[Front Cover]
[MFS 75 Years Logo]
MFS[RegTM] Municipal
Series Trust
Semiannual Report o September 30, 1999
For the States of: Mississippi,
New York, North Carolina,
Pennsylvania, South Carolina
Tennessee, Virginia, and West Virginia
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Letter from the Chairman .................... 1
Management Review and Outlook ............... 2
Performance Summary ......................... 4
Portfolio of Investments .................... 8
Financial Statements ........................ 25
Notes to Financial Statements ............... 51
MFS' Year 2000 Readiness Disclosure ......... 58
Trustees and Officers ....................... 61
</TABLE>
MFS Original Research[RegTM]
Research has been central to investment management at MFS since 1932, when we
created one of the first in-house research departments in the mutual fund
industry. Original Research[SM] at MFS is more than just crunching numbers and
creating economic models: it's getting to know each security and each company
personally.
[MFS Original Research Makes A Difference Logo]
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NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
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<PAGE>
Letter from the Chairman
[Photo of Jeffrey L. Shames]
Dear Shareholders,
The current investment and economic environment
bears little resemblance to last year's. One
year ago, global economies were floundering, and
the crisis in Asia threatened an already weak
U.S. economy. Corporate earnings were flat, and
economists used the word "deflation" for the
first time in recent memory. Entering 1999,
expectations for corporate earnings growth were lowered dramatically. In an
attempt to foster U.S. growth, the Federal Reserve Board (the Fed) lowered
interest rates.
As a result, this year the U.S. economy is booming and unemployment is low. Many
corporations are focused on improving their profitability, and investors have
been rewarded with positive surprises across a variety of industries. Our
analysts predict that corporate earnings growth for 1999 will average 12% - 15%.
Global economies also are showing signs of strength, and the Asian crisis has
passed. In fact, Japan's economic woes seem to have reached bottom. Although the
process is in its infancy, some Japanese corporations not only are talking about
restructuring and cost cutting, they also are beginning to take action, looking
within to become more competitive and improve returns on equity. While still
lagging the United States, Europe is beginning to restructure and consolidate.
These signs of international growth have contributed to concerns that the U.S.
economy now may be too strong. In June, and again in August, the Fed raised
rates by one-quarter of a percentage point to help ward off the specter of
inflation.
After an unprecedented four years of 20% annual returns in the U.S. equity
market, we fear that many investors have become accustomed to high returns and
have lost sight of the risks they take on to achieve them. In the current market
many investors are taking on additional risk -- whether through day trading or
investing in speculative Internet stocks.
Risks are as much a part of the market today as they were one year ago. We
believe the market remains overvalued, with stocks priced 30% above our
analysts' earnings projections. And market narrowness has not abated; the top 25
stocks in the Standard & Poor's 500 Composite Index, a popular, unmanaged index
of common stock total return performance, are still the most overvalued. Such
extreme overvaluation makes the stock market sensitive to interest-rate news and
any negative earnings surprises. The Year 2000 (Y2K) computer problem is another
factor causing investor concern. While we believe corporate America is well
prepared to address any Y2K situations that may arise at year-end, no one can
predict investor behavior. In our opinion, it is investor behavior that has the
greatest potential to create market volatility.
We believe the best way to address Y2K and other market risks is through our
continuing commitment to MFS Original Research[RegTM] and our fundamental
investment tenet of long-term investing. Whether markets are up or down, MFS
analysts focus on analyzing industries and visiting companies to determine the
long-term winners and the prices that will make them attractive opportunities.
Because all companies will not benefit equally from the improving international
environment, bottom-up research remains critical to identifying those that we
believe are successfully restructuring, consolidating, and gaining market share.
Changes in market and economic conditions can't be predicted but should always
be expected. The changes we have seen over the past year only reinforce our
commitment to long-term planning and investing. We believe volatility helps to
create opportunity for long-term investors to buy solid companies at attractive
prices. For this reason, we are continuing to expand our domestic and
international capabilities to ensure that MFS has primary, in-house research on
companies worldwide. We believe that we have built the right investment team,
backed by MFS Original Research, to take advantage of those opportunities for
our shareholders.
We appreciate your confidence and welcome any questions or comments you may
have.
Respectfully,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management[RegTM]
October 15, 1999
1
<PAGE>
Management Review and Outlook
Dear Shareholders,
The bond market suffered from the pressure caused by rising interest rates
during the six months ended September 30, 1999. Rates started trending upward in
October 1998, after they had bottomed in response to several events. These
events included the Russian debt crisis, economic difficulties in Southeast
Asia, and the bailout of the hedge fund Long-Term Capital Management. In late
1998, the Federal Reserve Board (the Fed) encouraged this rate decline by
implementing three rapid cuts in short-term interest rates to help support
global financial markets and ease a building credit crunch. When fears related
to credit and the global economy subsided, investors turned their focus back to
the United States. There, they found the domestic economy continuing to grow at
a strong rate. Concerns emerged about whether that growth could be sustained
without inciting inflationary pressures. As these doubts rose, so did interest
rates through the end of September 1999, spurred even higher by signs of a
worldwide economic recovery. Bond prices move in the opposite direction of
interest rates, and the yield on the 30-year U.S. Treasury bond rose from 5.62%
at the end of March to 6.05% at the end of September.
Fears of imminent inflation spurred the Fed to reverse monetary policy, even
though economic data painted a picture of a relatively benign inflationary
environment. In May, the Fed shifted from a neutral stance, choosing to announce
a bias toward raising rates to cool the economy and head off inflation. In June,
it followed through with a pre-emptive rate hike. The Fed acted once again in
August, taking back another of the three rate cuts it had implemented in late
1998.
Concerns over possible inflation and rising interest rates also hurt the
municipal bond market. On top of that, municipal bond performance relative to
U.S. Treasuries was restrained by issues related to supply and demand. On the
supply side, new issuance was still very strong, even though it didn't match the
huge quantity that came to market in 1998 when municipalities sought to take
advantage of lower interest rates to reduce their borrowing costs. Further,
demand was weak as traditional purchasers of municipal bonds, such as insurance
companies, were less active. Because of rising interest rates and this supply
and demand imbalance, yields on long-term, high-grade "AAA"-rated municipal
bonds rose from 4.97% to 5.63% during the period. In addition, municipal bonds
and other non-Treasury investments lagged because we believe securities dealers
sought the liquidity offered by U.S. Treasury securities. U.S. Treasuries are
deemed to be of higher quality than other bonds because their principal value
and interest are guaranteed by the U.S. government if held to maturity. In a
rising interest-rate environment, low-rated and nonrated municipal bonds tended
to performed better than high-rated issues because the latter group tends to be
more sensitive to changes in interest rates. On the other hand, low-rated and
nonrated municipal bond prices tend to be driven more by the individual
creditworthiness of the issuer. Since the U.S. economy remained healthy during
the period, issuers of low-rated and nonrated bonds generally encountered few
problems meeting their payments. Over the course of the six months, we were able
to take advantage of this divergence in performance through our selective
purchase of attractive low- and nonrated issues, also reaping the benefits of
the higher yields they offered to compensate investors for taking on their
additional credit risk.
We also benefited from maintaining a neutral to cautious stance with respect to
duration. Duration is an indicator of a portfolio's sensitivity to changes in
interest rates; with a shorter duration, the portfolios were less susceptible to
price declines resulting from interest-rate increases. In addition, we profited
from a focus on intermediate-maturity securities. This segment of the market was
hurt less by rate increases -- and price declines -- than long-term securities.
We also looked for bonds offering diversified characteristics or structures that
we felt helped them maintain a steady performance regardless of the market
backdrop. While each state was unique in terms of the types of securities it had
available, its issuance patterns, and its cash flows, no one region stood out as
a leader or a laggard. For several years, the U.S. economy as a whole has
performed very well. It used to be that we'd see a cycle in which one region
would perform better than the others, but that hasn't been the case. With regard
to sectors, we've generally been very cautious and selective with investments in
the health care industry. We felt higher education and housing were considered
more attractive during the period.
Looking forward, we believe we'll see interest rates trade in a narrow range
fairly close to current levels instead of moving sharply up or down. In
addition, most market observers anticipate that the Fed will take back the last
of its 1998 rate cuts by the end of 1999. We believe it would not be surprising
to see the Fed do so in November or next year. Turning to the markets, we could
see a gradual rebound in non-Treasury bond sectors, including municipals, as we
cross into the year 2000 and liquidity becomes less of an issue. At this point,
municipal securities are very attractively valued on an absolute basis and
relative to Treasuries. They offer very attractive yields, enjoy the advantage
of being tax exempt, and have benefited from very strong credit quality in
general. As a result, we believe there are many good reasons to own municipal
bonds at this juncture.
2
<PAGE>
Management Review and Outlook - continued
As always, we will use our research-driven, bottom-up, MFS Original
Research[RegTM] to search for opportunities in the municipal marketplace.
Respectfully,
<GRAPHIC OMITTED>
/s/ Michael L. Dawson /s/ Christopher J. Mier /s/ Geoffrey L. Schechter
Michael L. Dawson Christopher J. Mier Geoffrey L. Schechter
Portfolio Manager Portfolio Manager Portfolio Manager
The opinions expressed in this report are those of the portfolio managers and
are current only through the end of the period of the report as stated on the
cover. The managers' views are subject to change at any time based on market and
other conditions, and no forecasts can be guaranteed. The portfolios are
actively managed, and current holdings may be different.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS' PROFILES
- --------------------------------------------------------------------------------
Michael L. Dawson is Assistant Vice President and a portfolio manager of all
state municipal bond funds at MFS Investment Management[RegTM]. He joined MFS
in 1998 and was named Assistant Vice President and portfolio manager in 1999.
Prior to joining MFS, Mr. Dawson worked in institutional sales -- fixed income
for Fidelity Capital Markets and Goldman Sachs. Prior to that, he was a
research analyst in the municipal bond group at Franklin Templeton. He is a
graduate of Santa Clara University and received an M.B.A. degree from Babson
College in May 1999.
Christopher J. Mier is Senior Vice President of MFS Investment
Management[RegTM] and portfolio manager of MFS[RegTM] Municipal Limited
Maturity Fund and MFS[RegTM] Municipal Income Fund. He is also a portfolio
manager of the MFS[RegTM] Alabama, Arkansas, California, Florida, Maryland,
Massachusetts, Mississippi, New York, Pennsylvania, and Tennessee municipal
bond funds. Mr. Mier joined MFS in May 1999. Prior to joining MFS, he spent 13
years as a managing director and portfolio manager in the municipal bond
department at a major international money manager. He earned a bachelor's
degree in economics from the University of Michigan and an M.B.A. from
Northwestern University. He is a Chartered Financial Analyst.
Geoffrey L. Schechter is Vice President of MFS Investment Management[RegTM]
and portfolio manager of MFS[RegTM] Municipal Bond Fund. He is also a manager
of the MFS[RegTM] South Carolina, North Carolina, Georgia, Virginia, and West
Virginia municipal bond funds. Mr. Schechter joined MFS as an Investment
Officer in 1993 after working as a municipal credit analyst with a major
insurance company. He was named portfolio manager in 1993, Assistant Vice
President in 1994, and Vice President in 1995. Mr. Schechter is a graduate of
the University of Texas and has an M.B.A. degree from Boston University. He is
a Chartered Financial Analyst and a Certified Public Accountant.
All portfolio managers at MFS Investment Management[RegTM] are supported by an
investment staff of over 100 professionals utilizing MFS Original
Research[RegTM], a company-oriented, bottom-up process of selecting
securities.
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. A prospectus containing more information,
including the exchange privilege and all charges and expenses, for any other MFS
product is available from your financial consultant, or by calling MFS at
1-800-225-2606. Please read it carefully before investing or sending money.
3
<PAGE>
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FUND FACTS
- --------------------------------------------------------------------------------
Objective: Each Fund seeks current income exempt from federal income taxes
and from the personal income taxes, if any, of the state to which its name
refers.
Commencement of investment operations:
<TABLE>
<S> <C>
Mississippi August 6, 1992
New York June 6, 1988
North Carolina October 31, 1984
Pennsylvania February 1, 1993
South Carolina October 31, 1984
Tennessee August 12, 1988
Virginia October 31, 1984
West Virginia October 31, 1984
Net assets as of September 30, 1999:
Mississippi $ 78.2 million
New York $134.5 million
North Carolina $400.7 million
Pennsylvania $ 46.4 million
South Carolina $165.6 million
Tennessee $129.8 million
Virginia $377.3 million
West Virginia $140.5 million
</TABLE>
<TABLE>
<S> <C> <C>
Class inception:
Mississippi Class A August 6, 1992
Class B September 7, 1993
New York Class A June 6, 1988
Class B September 7, 1993
North Carolina Class A October 31, 1984
Class B September 7, 1993
Class C January 3, 1994
Pennsylvania Class A February 1, 1993
Class B September 7, 1993
South Carolina Class A October 31, 1984
Class B September 7, 1993
Tennessee Class A August 12, 1988
Class B September 7, 1993
Virginia Class A October 31, 1984
Class B September 7, 1993
Class C January 3, 1994
West Virginia Class A October 31, 1984
Class B September 7, 1993
</TABLE>
Performance Summary
Because mutual funds are designed for investors with long-term goals, we have
provided cumulative results as well as the average annual total returns for the
applicable time periods. Investment results reflect the percentage change in net
asset value, including reinvestment of dividends.
Average Annual and Cumulative Total Rates of Return through September 30, 1999
MFS[RegTM] Mississippi Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years Life*
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -1.85% -0.89% +16.86% +36.34% +46.88%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -0.89% +5.33% +6.40% +5.52%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -5.59% +3.64% +5.37% +4.81%
- ------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years Life*
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -2.23% -1.65% +14.26% +30.98% +39.61%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -1.65% +4.54% +5.55% +4.78%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -5.42% +3.62% +5.22% +4.78%
- ------------------------------------------------------------------------------------------
</TABLE>
*For the period from the commencement of the Fund's investment operations,
August 6, 1992, through September 30, 1999.
MFS[RegTM] New York Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -3.02% -2.02% +15.64% +33.29% +98.18%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -2.02% +4.96% +5.92% +7.08%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -6.68% +3.27% +4.89% +6.56%
- ------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -3.38% -2.75% +13.09% +28.24% +88.98%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -2.75% +4.19% +5.10% +6.57%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -6.48% +3.26% +4.77% +6.57%
- ------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
Performance Summary - continued
MFS[RegTM] North Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -3.11% -2.41% +13.80% +30.94% +81.21%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -2.41% +4.40% +5.54% +6.13%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -7.05% +2.72% +4.52% +5.61%
- ------------------------------------------------------------------------------------------
Class C Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
Cumulative Total Return
Excluding Sales Charge -3.35% -2.96% +11.62% +26.90% +74.37%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -2.96% +3.73% +4.88% +5.72%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -3.89% +3.73% +4.88% +5.72%
- ------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -3.35% -2.96% +11.60% +26.70% +73.78%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -2.96% +3.73% +4.85% +5.68%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -6.68% +2.80% +4.51% +5.68%
- ------------------------------------------------------------------------------------------
Cumulative Total Return
Excluding Sales Charge
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge
- ------------------------------------------------------------------------------------------
</TABLE>
MFS[RegTM] Pennsylvania Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years Life*
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -2.64% -1.75% +16.49% +34.82% +42.04%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -1.75% +5.22% +6.16% +5.41%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -6.41% +3.53% +5.13% +4.64%
- ------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years Life*
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -2.92% -2.41% +13.86% +29.70% +35.39%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -2.41% +4.42% +5.34% +4.65%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -6.16% +3.50% +5.01% +4.65%
- ------------------------------------------------------------------------------------------
</TABLE>
*For the period from the commencement of the Fund's investment operations,
February 1, 1993, through September 30, 1999.
MFS[RegTM] South Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -3.44% -3.11% +13.18% +29.49% +83.57%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -3.11% +4.21% +5.31% +6.26%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -7.71% +2.54% +4.29% +5.75%
- ------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -3.68% -3.65% +10.99% +25.28% +76.05%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -3.65% +3.54% +4.61% +5.82%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -7.36% +2.61% +4.27% +5.82%
- ------------------------------------------------------------------------------------------
</TABLE>
MFS[RegTM] Tennessee Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -3.20% -2.37% +15.11% +30.45% +85.70%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -2.37% +4.80% +5.46% +6.39%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -7.01% +3.12% +4.44% +5.87%
- ------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -3.52% -3.00% +12.90% +25.99% +77.90%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -3.00% +4.13% +4.73% +5.93%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -6.72% +3.20% +4.39% +5.93%
- ------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
Performance Summary - continued
MFS[RegTM] Virginia Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -2.74% -2.07% +13.90% +30.00% +80.66%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -2.07% +4.43% +5.39% +6.09%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -6.72% +2.75% +4.37% +5.58%
- ------------------------------------------------------------------------------------------
Class C Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
Cumulative Total Return
Excluding Sales Charge -2.97% -2.61% +11.81% +26.18% +73.94%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -2.61% +3.79% +4.76% +5.69%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -3.55% +3.79% +4.76% +5.69%
- ------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -3.06% -2.62% +11.80% +25.79% +73.27%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -2.62% +3.79% +4.70% +5.65%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -6.35% +2.87% +4.36% +5.65%
- ------------------------------------------------------------------------------------------
</TABLE>
MFS[RegTM] West Virginia Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -3.07% -2.24% +13.52% +29.84% +85.36%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -2.24% +4.32% +5.36% +6.37%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -6.88% +2.64% +4.34% +5.85%
- ------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -3.31% -2.79% +11.33% +25.51% +77.77%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- -2.79% +3.64% +4.65% +5.92%
- ------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -6.51% +2.72% +4.31% +5.92%
- ------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
Notes to Performance Summary
The Class A Share Performance Including Sales Charge takes into account the
deduction of the maximum 4.75% sales charge. The Class B Share Performance
Including Sales Charge takes into account the deduction of the applicable
contingent deferred sales charge (CDSC), which declines over six years from 4%
to 0%. The Class C Share Performance Including Sales Charge takes into account
the deduction of the 1% CDSC applicable to Class C shares redeemed within 12
months.
Class B and C share performance include the performance of the Fund's Class A
shares for periods prior to their inception (blended performance). Class B and C
blended performance has been adjusted to take into account the CDSC applicable
to Class B and C shares rather than the initial sales charge (load) applicable
to Class A shares. These blended performance figures have not been adjusted to
take into account differences in class-specific operating expenses. Because
operating expenses of Class B and C shares are higher than those of Class A, the
blended Class B and C share performance is higher than it would have been had
Class B and C shares been offered for the entire period.
All performance results reflect any applicable expense subsidies and waivers,
without which the results would have been less favorable. Subsidies and waivers
may be rescinded at any time. See the prospectus for details. All results are
historical and assume the reinvestment of capital gains.
Investment return and principal value will fluctuate, and shares, when redeemed,
may be worth more or less than their original cost. Past performance is no
guarantee of future results.
A small portion of income may be subject to state, federal, and/or alternative
minimum tax. Capital gains, if any, are subject to capital gains tax. See the
prospectus for details.
7
<PAGE>
Portfolio of Investments (Unaudited) - September 30, 1999
MFS MISSISSIPPI MUNICIPAL BOND FUND
Municipal Bonds - 95.9%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 8.8%
Commonwealth of Puerto Rico, MBIA, 8.134s,
2008 ++++ $2,000 $ 2,139,200
Gulfport, MS, School District, AMBAC, 5s, 2016 580 538,582
Hinds County, MS, MBIA, 6.25s, 2010 1,660 1,807,690
Hinds County, MS, MBIA, 6.25s, 2011 1,285 1,394,842
Tupelo, MS, Public School District, MBIA,
5.375s, 2015 1,000 978,170
-----------
$ 6,858,484
- --------------------------------------------------------------------------------------
State and Local Appropriation - 5.9%
Medical Center Educational Building Corp., MS
(University of Mississippi Medical Center),
MBIA, 5.65s, 2009 $2,000 $ 2,090,160
Puerto Rico Public Finance Corp., AMBAC, 6.99s,
2013 +++++ 500 509,110
State of Mississippi, Certificates of Participation
(Rehabilitation Services), 6.1s, 2014 2,000 2,029,260
-----------
$ 4,628,530
- --------------------------------------------------------------------------------------
Refunded and Special Obligations - 19.1%
Columbus, MS, Water & Sewer Rev., MBIA,
6.5s, 2004 $1,000 $ 1,097,660
Harrison County, MS, Wastewater Management
District, Wastewater Treatment, FGIC, 5.875s,
2005 1,000 1,073,740
Hinds Community College, MS, Conference and
Training Center, 6.5s, 2014 1,320 1,431,355
Medical Center Educational Building Corp., MS
(University of Mississippi Medical Center),
MBIA, 5.9s, 2004 2,250 2,428,043
Mississippi Home Corp., 0s, 2013 6,920 3,258,559
Mississippi Hospital Equipment & Facilities
Authority Rev. (Magnolia Regional Health
Center), 7.375s, 2001 1,500 1,616,685
Puerto Rico Highway & Transportation Authority
Rev., 6.625s, 2002 1,900 2,049,473
State of Mississippi, 6.75s, 2004 1,800 1,979,154
-----------
$14,934,669
- --------------------------------------------------------------------------------------
Airport and Port Revenue - 2.6%
Puerto Rico Ports Authority (American Airlines),
6.25s, 2026 $2,000 $ 2,018,580
- --------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 5.7%
Guam Power Authority Rev., AMBAC, 6.673s,
2013 +++++ $1,000 $ 970,220
Puerto Rico Electric Power Authority,
8.408s, 2023 ++++ 1,000 1,112,250
Warren County, MS, Pollution Control Rev.
(Mississippi Power & Light), 7s, 2022 1,000 1,063,090
Washington County, MS, Pollution Control Rev.
(Mississippi Power & Light), 7s, 2022 1,230 1,307,601
-----------
$ 4,453,161
- --------------------------------------------------------------------------------------
Health Care Revenue - 3.2%
Corinth Alcorn County, MS, Hospital Rev.
(Magnolia Regional Health Center), MBIA-IBC,
5.5s, 2021 $ 670 $ 602,156
Jones County, MS, Hospital Rev. (South Central
Regional Medical Center), 5.5s, 2017 1,000 926,100
Mississippi Hospital Equipment & Facilities
Authority Rev., 6s, 2016 1,000 978,350
-----------
$ 2,506,606
- --------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Revenue (Corporate Guarantee) - 8.5%
Jones County, MS, Solid Waste Disposal Rev.
(International Paper Co.), 5.8s, 2021 $1,000 $ 958,010
Lowndes County, MS, Solid Waste Disposal &
Pollution Control Rev. (Weyerhauser Co.), 6.8s,
2022 3,250 3,603,242
Mississippi Business Finance Corp. (Jackson
Municipal Airport/Airborne Freight), 7.15s, 2007 985 1,074,734
Warren County, MS, Pollution Control Rev.
(International Paper), 6.6s, 2019 1,000 1,045,070
-----------
$ 6,681,056
- --------------------------------------------------------------------------------------
Insured Health Care Revenue - 17.6% Alcorn County, MS, Corinth Hospital Rev.
(Magnolia Regional Health Center), AMBAC,
5.75s, 2013 $2,000 $ 2,033,340
Gulfport, MS, Hospital Facilities (Memorial
Hospital), MBIA, 6.125s, 2015 2,250 2,349,720
Gulfport, MS, Hospital Facilities (Memorial
Hospital), MBIA, 6.2s, 2018 1,000 1,045,640
Hinds County, MS, Rev. (Methodist Hospital &
Rehabilitition Center), AMBAC, 5.6s, 2012 3,055 3,140,051
Mississippi Development Bank, Special Obligation
(Adams County Hospital), FSA, 5.75s, 2016 1,000 1,008,220
Mississippi Hospital Equipment & Facilities
Authority Rev. (Baptist), MBIA, 6.5s, 2010 1,190 1,284,545
Mississippi Hospital Equipment & Facilities
Authority Rev. (Baptist), MBIA, 6s, 2013 750 775,748
Mississippi Hospital Equipment & Facilities
Authority Rev. (Rush Medical Foundation),
Connie Lee, 6.7s, 2018 2,000 2,103,740
-----------
$13,741,004
- --------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 5.3%
Gulfport, MS, Community Development (Oakview
Apartments), FNMA, 7.4s, 2025 $1,755 $ 1,831,571
Jackson, MS, Elderly Housing Corp., Mortgage
Rev. (Delhaven Manor), FHA, 7.375s, 2024 1,940 2,017,192
Ridgeland, MS, Urban Renewal, Multifamily
Housing Rev. (Northbrook I & III Apartments),
6.15s, 2019 ### 300 281,823
-----------
$ 4,130,586
- --------------------------------------------------------------------------------------
Single Family Housing Revenue - 7.6%
Mississippi Home Corp., GNMA, 6.5s, 2024 $2,650 $ 2,715,932
Mississippi Home Corp., GNMA, 6.625s, 2027 1,350 1,393,632
Mississippi Home Corp., GNMA, 7.55s, 2027 1,215 1,313,609
Mississippi Home Corp., GNMA, 5.25s, 2031 500 524,580
-----------
$ 5,947,753
- --------------------------------------------------------------------------------------
Universities - 2.5%
University of Mississippi, Educational Building
Corp. (Athletic Facilities), 6.2s, 2016 ### $1,000 $ 1,014,020
University of Mississippi Educational Building
Corp. (Performing Arts Center), AMBAC,
5.25s, 2018 1,000 949,340
-----------
$ 1,963,360
- --------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 6.6%
Gautier, MS, Utility District, Utility Systems Rev.,
FGIC, 6.375s, 2019 $1,300 $ 1,361,841
Jackson, MS, Water & Sewer Systems Rev., FGIC,
5.25s, 2017 1,170 1,116,180
Meridian, MS, Water & Sewer Rev., AMBAC,
6s, 2010 1,500 1,602,720
</TABLE>
8 - MMS
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Water and Sewer Utility Revenue - continued
Meridian, MS, Water & Sewer Rev., AMBAC,
6.2s, 2012 $ 650 $ 699,400
Meridian, MS, Water & Sewer Rev., AMBAC,
6.2s, 2013 400 423,732
-----------
$ 5,203,873
- --------------------------------------------------------------------------------------
Other - 2.5%
Mississippi Development Bank (Diamond Lakes
Utilities), 6.25s, 2017 $1,250 $ 1,209,837
Mississippi Development Bank (Tupelo
Fairgrounds), AMBAC, 5s, 2017 785 710,904
-----------
$ 1,920,741
- --------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $72,253,634) $74,988,403
- --------------------------------------------------------------------------------------
Floating Rate Demand Notes - 3.7%
- --------------------------------------------------------------------------------------
Harris County, TX, Industrial Development Corp.
(Shell Oil Co.), due 10/01/99 $2,600 $ 2,600,000
Jackson County, MS, Pollution Control Rev.
(Chevron USA, Inc.), due 10/01/99 300 300,000
- --------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 2,900,000
- --------------------------------------------------------------------------------------
Total Investments (Identified Cost, $75,153,634) $77,888,403
Other Assets, Less Liabilities - 0.4% 350,902
- --------------------------------------------------------------------------------------
Net assets - 100.0% $78,239,305
- --------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
MFS NEW YORK MUNICIPAL BOND FUND
Municipal Bonds - 97.9%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 4.9%
Buffalo, NY, FSA, 5.125s, 2014 ### $1,580 $ 1,527,307
Buffalo, NY, General Improvement, AMBAC,
5.125s, 2014 ### 1,505 1,454,808
Port Byron, NY, Central School District, AMBAC,
7.4s, 2012 500 601,130
Port Byron, NY, Central School District, AMBAC,
7.4s, 2013 500 601,190
Port Byron, NY, Central School District, AMBAC,
7.4s, 2014 500 603,855
Port Byron, NY, Central School District, AMBAC,
7.4s, 2015 500 605,450
Washingtonville, NY, Central School District, FGIC,
7.35s, 2008 550 640,338
Washingtonville, NY, Central School District, FGIC,
7.35s, 2009 550 644,363
-----------
$ 6,678,441
- --------------------------------------------------------------------------------------
State and Local Appropriation - 22.4%
Metropolitan Transportation Authority, NY,
Dedicated Tax Fund, FGIC, 5.25s, 2014 $1,500 $ 1,459,530
Metropolitan Transportation Authority, NY, Service
Contract, 7.375s, 2008 2,000 2,231,880
Metropolitan Transportation Authority, NY, Service
Contract, 5.5s, 2017 750 725,070
Metropolitan Transportation Authority, NY, Service
Contract, AMBAC, 5.75s, 2013 1,825 1,900,172
New York Dormitory Authority Rev. (City
University), 5.625s, 2016 1,450 1,444,157
New York Dormitory Authority Rev. (City
University), AMBAC, 5.75s, 2018 1,800 1,841,292
New York Dormitory Authority Rev. (City
University), FSA, 5.75s, 2013 4,250 4,425,057
New York Dormitory Authority Rev. (State
University), 5s, 2013 1,000 945,720
New York Dormitory Authority Rev. (State
University), 5.875s, 2017 1,130 1,151,572
New York Dormitory Authority Rev. (State
University), FSA, 5.875s, 2017 1,435 1,493,318
New York Medical Care Facilities Financing
Agency Rev., 6.375s, 2014 15 15,836
New York Medical Care Facilities Financing
Agency Rev., MBIA, 6s, 2025 20 20,426
New York Urban Development Corp. Rev.,
AMBAC, 5.125s, 2014 1,000 958,730
New York Urban Development Corp. Rev., FSA,
5.5s, 2008 2,000 2,075,140
New York Urban Development Corp. Rev.
(Correctional Facilities), AMBAC, 0s, 2009 5,000 3,133,550
New York Urban Development Corp. Rev.
(Correctional Facilities), AMBAC, 5.25s, 2015 1,600 1,558,560
New York Urban Development Corp. Rev.
(Correctional Facilities), FSA, 5.25s, 2014 2,000 1,971,700
New York Urban Development Corp. Rev. (State
Facilities), AMBAC, 5.6s, 2015 2,750 2,792,212
-----------
$30,143,922
- --------------------------------------------------------------------------------------
Refunded and Special Obligations - 17.2%
New York City, NY, 7.2s, 2004 $1,000 $ 1,124,220
New York City, NY, 7.3s, 2004 880 995,174
New York City, NY, 7.3s, 2004 5,000 5,642,750
New York City, NY, 7.375s, 2004 1,600 1,814,608
New York City, NY, 8s, 2001 490 530,190
New York City, NY, 8.25s, 2001 2,000 2,194,480
</TABLE>
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Refunded and Special Obligations - continued
New York City, NY, Municipal Water Finance
Authority, Water & Sewer Systems Rev.,
7.1s, 2001 $1,325 $ 1,402,141
New York Energy Research & Development
Authority, Electric Facilities Rev., 7.15s, 2002 1,975 2,144,949
New York Medical Care Facilities Financing
Agency Rev. (Mental Health Services),
7.875s, 2000 340 358,578
New York Medical Care Facilities Financing
Agency Rev. (Mental Health Services),
6.375s, 2004 965 1,058,248
New York Medical Care Facilities Financing
Agency Rev. (Montefiore Medical), AMBAC,
6.5s, 2005 2,550 2,820,249
New York Power Authority, FGIC, 6.5s, 2008 2,500 2,742,900
Puerto Rico Aqueduct & Sewer Authority Rev.,
FSA, 9s, 2005 250 293,235
-----------
$23,121,722
- --------------------------------------------------------------------------------------
Airport and Port Revenue - 1.6%
New York City, NY, Industrial Development
Agency, Special Facilities Rev. (American
Airlines), 6.9s, 2024 $1,000 $ 1,054,710
Port Authority NY & NJ, Special Obligation
(JFK International), MBIA, 6.25s, 2015 1,000 1,073,810
-----------
$ 2,128,520
- --------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 4.3%
Guam Power Authority Rev., AMBAC,
6.673s, 2013 +++++ $1,060 $ 1,028,433
Guam Power Authority Rev., AMBAC,
6.673s, 2014 +++++ 500 477,430
New York Energy Research & Development
Authority, Electric Facilities Rev., 7.15s, 2022 725 772,480
Port Authority NY & NJ, Special Obligation,
6.75s, 2019 1,750 1,831,778
Puerto Rico Electric Power Authority, FSA,
8.408s, 2023 ++++ 1,500 1,668,375
-----------
$ 5,778,496
- --------------------------------------------------------------------------------------
Health Care Revenue - 4.6%
Albany, NY, Industrial Development Authority,
Civic Facilities Rev., 8.25s, 2004 $1,375 $ 1,449,209
Chautauqua County, NY, Industrial Development
Agency, Civic Facility Rev. (Womans Christian
Assn.), 6.35s, 2017 200 189,790
Chautauqua County, NY, Industrial Development
Agency, Civic Facility Rev. (Womans Christian
Assn.), 6.4s, 2029 500 467,770
Dutchess, NY, Industrial Development Agency,
Civic Facilities Rev., 8.625s, 2016 1,060 1,125,593
Fulton County, NY, Industrial Development Agency
Rev., Civic Facilities Rev. (Nathan Littauer
Hospital Assn.), 5.75s, 2009 750 720,908
New York City Industrial Development Agency,
Civic Facilities Rev. (A Very Special Place, Inc.),
5.75s, 2029 1,000 927,210
New York Medical Care Facilities Finance
Agency, Mental Health Services (Huntington
Mortgage), 6.5s, 2014 1,250 1,315,562
- --------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Revenue (Corporate Guarantee) - 4.3%
Allegany County, NY, Industrial Development
Agency, Solid Waste Rev. (Atlantic Richfield),
6.625s, 2016 $1,000 $ 1,054,030
Essex County, NY, Industrial Development Agency
(International Paper), 5.55s, 2014 750 734,542
Essex County, NY, Industrial Development Agency
(International Paper), 6.15s, 2021 1,000 1,003,020
Fulton County, NY, Industrial Development Agency
(Crossroads Incubator), 8.75s, 2009 975 1,006,210
Monroe County, NY, Industrial Development
Agency (Weyerhauser Co.), 9s, 2006 1,000 1,004,000
Onondaga County, NY, Industrial Development
Agency (Bristol-Meyers Squibb), 5.75s, 2024 1,000 1,002,610
-----------
$ 5,804,412
- --------------------------------------------------------------------------------------
Insured Health Care Revenue - 5.1%
Nassua County, NY (Nassua Health Care Corp.),
FSA, 6s, 2014 $1,000 $ 1,039,050
New York City, NY, Health & Hospital Corp.,
AMBAC, 7.728s, 2023 ++++ 3,200 3,039,648
New York Dormitory Authority Rev. (Champlain
Valley), Connie Lee, 6s, 2010 250 268,735
New York Dormitory Authority Rev. (St. Vincent's
Hospital), FHA, 7.375s, 2011 2,325 2,466,918
-----------
$ 6,814,351
- --------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 0.7%
New York City, NY, Housing Development Corp.,
5.6s, 2019 $ 400 $ 388,640
New York City, NY, Housing Development Corp.
(South Bronx Cooperatives), 8.1s, 2023 560 575,775
-----------
$ 964,415
- --------------------------------------------------------------------------------------
Single Family Housing Revenue - 3.7%
New York Mortgage Agency Rev., 7.375s, 2011 $ 475 $ 498,712
New York Mortgage Agency Rev., 6.45s, 2017 2,355 2,447,269
New York Mortgage Agency Rev., 5.85s, 2018 2,000 1,988,180
-----------
$ 4,934,161
- --------------------------------------------------------------------------------------
Turnpike Revenue - 12.3%
New York Thruway Authority Rev., Highway &
Bridges, FGIC, 5.125s, 2015 $2,400 $ 2,282,328
New York Thruway Authority Rev., Highway &
Bridges, MBIA, 5.75s, 2015 1,000 1,018,970
New York Thruway Authority Rev., Highway &
Bridges, MBIA, 5.375s, 2016 2,000 1,957,880
Niagara Falls, NY, Bridge Commission Toll Rev.,
FGIC, 6.475s, 2015 ++++ + 3,500 3,343,060
Triborough Bridge & Tunnel Authority, NY,
5.5s, 2017 8,000 7,940,800
-----------
$16,543,038
- --------------------------------------------------------------------------------------
Universities - 4.5%
Hempstead Town, NY, Civic Facilities Rev. (Hofstra
University), MBIA, 5.8s, 2015 $1,500 $ 1,540,395
Islip, NY, Community Development Agency Rev.
(New York Institute of Technology), 7.5s, 2026 1,990 2,106,893
Monroe County, NY, Industrial Development
Agency (Student Housing-Collegiate),
5.375s, 2029 1,000 887,660
New York Dormitory Authority Rev. (Colgate
University), MBIA, 6s, 2016 1,000 1,058,540
</TABLE>
10 - MNY
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Universities - continued
Utica, NY, Industrial Development Agency (Utica
College), 5.3s, 2008 $ 500 $ 478,925
------------
$ 6,072,413
- --------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 11.5%
New York City, NY, Municipal Water & Sewer
Finance Authority Rev., 6s, 2010 $ 620 $ 660,517
New York City, NY, Municipal Water & Sewer
Finance Authority Rev., 7.1s, 2012 675 707,042
New York City, NY, Municipal Water & Sewer
Finance Authority Rev., 7s, 2015 745 786,534
New York Environmental Facilities Corp., Clean
Water & Drinking, 5.5s, 2014 2,000 2,008,180
New York Environmental Facilities Corp., Pollution
Control Rev., 5.75s, 2010 3,235 3,394,194
New York Environmental Facilities Corp., Pollution
Control Rev., 6.875s, 2010 220 232,494
New York Environmental Facilities Corp., Pollution
Control Rev., 5.75s, 2012 1,080 1,130,177
New York Environmental Facilities Corp., Water
Facilities Rev., 8.85s, 2015 2,500 2,723,075
Suffolk County, NY, Water Authority, MBIA,
5.1s, 2012 1,895 1,875,084
Suffolk County, NY, Water Authority, MBIA,
5.1s, 2013 2,000 1,956,920
------------
$ 15,474,217
- --------------------------------------------------------------------------------------
Other - 0.8%
Suffolk County, NY, Judicial Facilities Rev. (John P
Cohalan Complex), AMBAC, 5.75s, 2012 $1,000 $ 1,032,079
- --------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $126,730,343) $131,686,229
- --------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.6%
- --------------------------------------------------------------------------------------
New York City, NY, due 10/01/99 $ 400 $ 400,000
New York City, NY, Municipal Water Finance
Authority Rev., due 10/01/99 400 400,000
- --------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 800,000
- --------------------------------------------------------------------------------------
Total Investments (Identified Cost, $127,530,343) $132,486,229
Other Assets, Less Liabilities - 1.5% 2,053,161
- --------------------------------------------------------------------------------------
Net assets - 100.0% $134,539,390
- --------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
MFS NORTH CAROLINA MUNICIPAL BOND FUND
Municipal Bonds - 98.0%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 3.3%
Durham, NC, 5.9s, 2013 $ 2,400 $ 2,518,584
Durham, NC, 5.9s, 2014 2,400 2,507,136
Hertford County, NC, 9.5s, 2000 100 100,666
Hertford County, NC, 9.5s, 2001 100 101,115
Hertford County, NC, 9.5s, 2002 100 101,875
State of North Carolina, 5.446s, 2015 +++++ 5,000 4,085,800
State of North Carolina, 5.446s, 2017 +++++ 5,000 3,699,600
-----------
$13,114,776
- --------------------------------------------------------------------------------------
State and Local Appropriation - 8.2%
Charlotte, NC, Certificates of Participation
(Convention Facilities), AMBAC, 0s, 2004 $ 3,435 $ 2,699,120
Charlotte, NC, Certificates of Participation
(Convention Facilities), AMBAC, 0s, 2005 4,810 3,575,225
Charlotte, NC, Certificates of Participation
(Convention Facilities), AMBAC, 0s, 2006 1,075 756,284
Charlotte, NC, Certificates of Participation
(Convention Facilities), AMBAC, 0s, 2008 3,000 1,896,510
Cumberland County, NC, Certificates of
Participation (Civic Center), AMBAC, 0s, 2011 425 223,172
Cumberland County, NC, Certificates of
Participation (Civic Center), AMBAC, 0s, 2013 1,000 458,850
Dare County, NC, MBIA, 6.6s, 2006 2,100 2,217,474
Durham, NC, Certificates of Participation (New
Durham Corp.), 6.875s, 2009 1,750 1,834,700
Franklin County, NC, Certificates of Participation
(Jail and School), FGIC, 6.625s, 2014 2,000 2,167,840
Greensboro, NC, Certificates of Participation
(Coliseum Arena), 6.25s, 2011 2,180 2,268,137
Harnett County, NC, Certificates of Participation,
AMBAC, 6.2s, 2006 1,000 1,070,950
Harnett County, NC, Certificates of Participation,
AMBAC, 6.2s, 2009 1,500 1,598,640
Puerto Rico Housing, Bank and Finance Agency,
7.5s, 2006 7,000 7,783,230
Puerto Rico Public Finance Corp, AMBAC, 6.99s,
2016 +++++ 1,500 1,471,890
Sampson Area Development Corp., NC,
Installment Payment Rev., MBIA, 4.75s, 2019 1,000 864,870
Scotland County, NC, Certificates of Participation
(Jail and Courthouse), FSA, 6.75s, 2011 1,000 1,044,990
Union County, NC, Certificates of Participation,
AMBAC, 6.375s, 2012 1,000 1,068,650
-----------
$33,000,532
- --------------------------------------------------------------------------------------
Refunded and Special Obligations - 18.7%
Chapel Hill, NC, Parking Facilities Rev. (Rosemary
Street), 8.125s, 2000 $ 1,535 $ 1,638,275
Chapel Hill, NC, Parking Facilities Rev. (Rosemary
Street), 8.25s, 2000 3,305 3,531,987
Durham, NC, Certificates of Participation (Hospital
and Office Facilities), 5.875s, 2006 1,460 1,549,206
Haywood County, NC, Industrial Facilities &
Pollution Control Finance Authority (Champion
International), 8.1s, 1999 90 92,062
North Carolina Eastern Municipal Power Agency,
7.5s, 2009 2,595 3,084,391
North Carolina Eastern Municipal Power Agency,
5s, 2017 11,870 11,287,420
North Carolina Medical Care Commission,
Hospital Rev. (Carolina Medicorp), 6s, 2001 16,000 16,438,080
</TABLE>
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Refunded and Special Obligations - continued
North Carolina Medical Care Commission,
Hospital Rev. (Halifax Memorial Hospital),
6.75s, 2002 $ 1,355 $ 1,464,322
North Carolina Medical Care Commission,
Hospital Rev. (Halifax Memorial Hospital),
6.75s, 2002 4,500 4,869,405
North Carolina Medical Care Commission,
Hospital Rev. (Rex Hospital), 6.25s, 2003 2,500 2,692,675
North Carolina Medical Care Commission,
Hospital Rev. (Valdese General Hospital),
8.75s, 2001 5,115 5,645,681
Pender County, NC, Certificates of Participation
(Pender County Prison), 7.6s, 2001 1,455 1,560,851
Pender County, NC, Certificates of Participation
(Pender County Prison), 7.7s, 2001 1,000 1,074,330
Pitt County, NC, Hospital Rev. (Memorial Hospital),
5.25s, 2021 10,135 9,674,466
University of North Carolina (Chapel Hill), 0s, 2002 9,105 4,269,425
University of North Carolina (Chapel Hill), 0s, 2002 4,285 1,872,931
Winston-Salem, NC, Water and Sewer Systems
Rev., 6.25s, 2002 4,000 4,261,840
-----------
$75,007,347
- --------------------------------------------------------------------------------------
Airport and Port Revenue - 1.3%
Puerto Rico Ports Authority (American Airlines),
6.25s, 2026 $ 5,075 $ 5,122,147
- --------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 17.1% New Hanover County, NC, Industrial
Facilities Rev.
(Carolina Power and Light Co.), 6.9s, 2009 $ 1,000 $ 1,030,000
North Carolina Eastern Municipal Power Agency,
AMBAC, 6s, 2018 14,245 14,904,971
North Carolina Eastern Municipal Power Agency,
MBIA, 7s, 2007 5,000 5,597,600
North Carolina Eastern Municipal Power Agency,
MBIA, 7.25s, 2007 5,000 5,672,750
North Carolina Eastern Municipal Power Agency,
MBIA, 7.5s, 2010 3,005 3,562,668
North Carolina Municipal Power Agency, No. 1,
Catawba Electric Rev., MBIA, 0s, 2008 10,150 6,717,270
North Carolina Municipal Power Agency, No. 1,
Catawba Electric Rev., MBIA, 6s, 2011 8,000 8,571,120
North Carolina Municipal Power Agency, No. 1,
Catawba Electric Rev., MBIA, 6.97s, 2012 ++++ 9,000 8,991,990
North Carolina Municipal Power Agency, No. 1,
Catawba Electric Rev., MBIA, 5.5s, 2014 3,500 3,533,250
North Carolina Municipal Power Agency, No. 1,
Catawba Electric Rev., FSA, 6.2s, 2018 4,300 4,487,179
Puerto Rico Electric Power Authority, FSA,
6s, 2016 5,000 5,206,700
-----------
$68,275,498
- --------------------------------------------------------------------------------------
Health Care Revenue - 9.6%
Charlotte-Mecklenberg Hospital Authority, "A",
5.75s, 2021 $ 1,500 $ 1,508,775
Mocksville, NC (Housing Foundation, Inc.),
7.25s, 2029 1,000 970,280
North Carolina Medical Care Commission,
Hospital Rev. (Duke University), 5.25s, 2021 5,975 5,571,687
North Carolina Medical Care Commission,
Hospital Rev. (Gaston Health Care), 5.5s, 2015 8,040 7,762,459
North Carolina Medical Care Commission,
Hospital Rev. (Gaston Health Care), 5.5s, 2019 7,500 7,055,775
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Health Care Revenue - continued
North Carolina Medical Care Commission,
Hospital Rev. (Moore Memorial Hospital),
9.1s, 1999 $ 800 $ 800,000
North Carolina Medical Care Commission,
Hospital Rev. (Pitt County Memorial Hospital),
5.25s, 2012 1,000 989,320
North Carolina Medical Care Commission,
Hospital Rev. (Pitt County Memorial Hospital),
5s, 2018 3,000 2,688,630
North Carolina Medical Care Commission,
Hospital Rev. (Well Spring Retirement),
6.25s, 2017 1,750 1,753,798
Northern Hospital District, Surry County, NC,
Heath Care Facilities Rev., 7.875s, 2021 4,530 4,786,761
University of North Carolina, Chapel Hill,
University Hospital Rev., 5.25s, 2019 4,800 4,478,352
-----------
$38,365,837
- --------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 10.4%
Columbus County, NC, Industrial Facilities &
Pollution Control (International Paper), 5.8s, 2016 $4,000 $ 3,922,240
Columbus County, NC, Industrial Facilities &
Pollution Control (International Paper),
6.15s, 2021 5,000 5,011,500
Halifax County, NC, Industrial Facilities & Pollution
Control Finance Authority (Champion
International Corp.), 8.15s, 2019 1,500 1,533,360
Haywood County, NC, Industrial Facilities &
Pollution Control Finance Authority (Champion
International), 8.1s, 2009 2,410 2,463,574
Haywood County, NC, Industrial Facilities &
Pollution Control Finance Authority (Champion
International), 5.75s, 2025 8,900 8,189,780
Martin County, NC, Industrial Facilities & Pollution
Control Finance Authority (Weyerhaeuser Co.),
7.25s, 2014 7,000 7,452,410
Martin County, NC, Industrial Facilities & Pollution
Control Finance Authority (Weyerhaeuser Co.),
6.8s, 2024 7,500 8,015,550
Mecklenburg County, NC, Industrial Facilities &
Pollution Control Finance Authority (Precision
Steel), 7.75s, 2014 2,600 2,665,598
Surry County, NC, Industrial Facilities & Pollution
Control Finance Authority (Weyerhaeuser Co.),
9.25s, 2002 1,200 1,287,696
Wake County, NC, Industrial Facilities & Pollution
Control Finance Authority (Mallinkcodt),
6.75s, 2012 1,100 1,132,703
-----------
$41,674,411
- --------------------------------------------------------------------------------------
Insured Health Care Revenue - 8.8%
Catawba County, NC, Hospital Rev. (Catawba
Memorial Hospital), AMBAC, 5s, 2017 $1,200 $ 1,095,912
Cumberland County, NC, Hospital Facilities Rev.
(Cumberland County Hospital), MBIA, 0s, 2009 1,800 1,079,838
Cumberland County, NC, Hospital Facilities Rev.
(Cumberland County Hospital), MBIA, 6s, 2021 4,000 4,141,400
New Hanover County, NC, Hospital Rev. (New
Hanover Regional Medical Center), AMBAC,
5.75s, 2026 3,625 3,620,433
New Hanover County, NC, Hospital Rev. (New
Hanover Regional Medical Center), MBIA,
5s, 2019 6,225 5,632,380
</TABLE>
12 - MNC
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Insured Health Care Revenue - continued
North Carolina Medical Care Commission, Health
Care Facilities Rev. (Novant Health), MBIA, 5s,
2018 $ 1,975 $ 1,785,755
North Carolina Medical Care Commission, Health
Care Facilities Rev. (Scotland Memorial
Hospital), AGI, 5s, 2010 1,005 976,418
North Carolina Medical Care Commission, Health
System Rev., (Catholic Health East), AMBAC, 5s,
2018 2,000 1,807,580
North Carolina Medical Care Commission,
Hospital Rev. (Alamance Regional Medical
Center, Inc.), FSA, 5s, 2016 3,180 2,943,154
North Carolina Medical Care Commission,
Hospital Rev. (Mission-St. Joseph Health
System), MBIA, 5.1s, 2018 3,000 2,756,430
North Carolina Medical Care Commission,
Hospital Rev. (Northeast Medical Center),
AMBAC, 4.75s, 2013 1,330 1,216,777
North Carolina Medical Care Commission,
Hospital Rev. (Rex Healthcare), AMBAC, 5s, 2017 5,000 4,555,050
North Carolina Medical Care Commission,
Hospital Rev. (Wake County Hospital), AMBAC,
5.375s, 2026 1,610 1,525,716
North Carolina Medical Care Commission,
Hospital Rev. (Wilson Memorial Hospital),
AMBAC, 0s, 2013 1,000 457,810
North Carolina Medical Care Commission,
Hospital Rev. (Wilson Memorial Hospital),
AMBAC, 0s, 2015 1,140 456,935
Northern Hospital District Surry County, NC,
Health Care Facilities Rev., AGI, 5.5s, 2019 1,250 1,188,775
------------
$ 35,240,363
- --------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 4.4%
Asheville, NC, Housing Authority (Asheville
Terrace Apartments), FGIC, 7.1s, 2011 ### $ 5,000 $ 5,248,050
North Carolina Housing Finance Agency, FHA,
6.9s, 2024 4,880 5,158,746
North Carolina Housing Finance Agency, FHA,
6.05s, 2028 5,000 5,107,700
Salisbury, NC, Housing Corp. (Yadkin Senior
Citizens), FNMA, 6.75s, 2022 1,990 2,020,367
------------
$ 17,534,863
- --------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 0.6%
Territory of Virgin Islands Public Finance
Authority, 5.5s, 2018 $ 1,000 $ 947,950
Territory of Virgin Islands Public Finance
Authority, 5.5s, 2022 1,600 1,502,704
------------
$ 2,450,654
- --------------------------------------------------------------------------------------
Single Family Housing Revenue - 2.9%
North Carolina Housing Finance Agency,
5.125s, 2013 $ 1,100 $ 1,054,669
North Carolina Housing Finance Agency,
6.15s, 2017 2,000 2,042,160
North Carolina Housing Finance Agency,
6.7s, 2018 1,645 1,708,168
North Carolina Housing Finance Agency,
5.55s, 2019 4,000 3,865,560
North Carolina Housing Finance Agency,
7.85s, 2028 1,210 1,239,064
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Single Family Housing Revenue - continued
North Carolina Housing Finance Agency,
7.6s, 2032 $ 1,620 $ 1,659,042
------------
$ 11,568,663
- --------------------------------------------------------------------------------------
Solid Waste Revenue - 0.3%
Iredell, NC, Solid Waste Systems Rev., 6.25s, 2012 $ 1,250 $ 1,293,625
- --------------------------------------------------------------------------------------
Turnpike Revenue - 2.2%
Puerto Rico Highway & Transportation Authority
Rev., 6.6s, 2007 ++++ $ 2,750 $ 2,878,590
Puerto Rico Highway & Transportation Authority
Rev., FSA, 8.272s, 2018 +++++ 5,425 6,066,126
------------
$ 8,944,716
- --------------------------------------------------------------------------------------
Universities - 5.8%
North Carolina Education Facilities Finance
Agency (Duke University), 6.75s, 2021 $11,500 $ 12,109,615
University of North Carolina, University Rev.,
0s, 2012 4,000 1,997,400
University of North Carolina, University Rev.,
0s, 2013 6,415 3,030,510
University of North Carolina, University Rev.,
0s, 2015 4,415 1,831,342
University of North Carolina, University Rev.,
0s, 2016 3,500 1,359,855
University of North Carolina-Chapel Hill Rev.,
Dining Systems, 5.4s, 2017 1,140 1,119,446
University of North Carolina-Greensboro Rev.,
Student Facilities Systems, AMBAC, 5.125s, 2018 2,000 1,852,020
------------
$ 23,300,188
- --------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 4.4%
Asheville, NC, Water System Rev., FGIC,
5.7s, 2025 ### $ 2,000 $ 2,005,560
Charlotte, NC, Water & Sewer, 5s, 2020 3,350 3,072,988
Charlotte, NC, Water & Sewer, 5s, 2022 1,900 1,730,691
Charlotte, NC, Water & Sewer Systems Rev.,
5.75s, 2016 2,000 2,033,040
Charlotte, NC, Water & Sewer Systems Rev.,
5.25s, 2021 4,000 3,774,600
Raleigh, NC, Combined Enterprise Systems Rev.,
4.75s, 2016 3,520 3,100,381
Raleigh, NC, Combined Enterprise Systems Rev.,
5.125s, 2022 2,000 1,855,300
------------
$ 17,572,560
- --------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $383,804,865) $392,466,180
- --------------------------------------------------------------------------------------
Floating Rate Demand Note
- --------------------------------------------------------------------------------------
Harris County, TX, Industrial Development Corp.
(Shell Oil Co.), due 10/01/99, at Identified Cost $ 100 $ 100,000
- --------------------------------------------------------------------------------------
Total Investments (Identified Cost, $383,904,865) $392,566,180
Other Assets, Less Liabilities - 2.0% 8,088,755
- --------------------------------------------------------------------------------------
Net assets - 100.0% $400,654,935
- --------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
13 - MNC
<PAGE>
Portfolio of Investments (Unaudited) - September 30, 1999
MFS PENNSYLVANIA MUNICIPAL BOND FUND
Municipal Bonds - 95.9%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 8.1%
Butler, PA, School District, FGIC, 5.375s, 2018 $ 500 $ 480,110
Chester County, PA, 5.65s, 2011 500 511,685
Greene County, PA, 6s, 2010 100 102,390
Northeastern York County, PA, School District,
FGIC, 0s, 2012 415 210,928
Oley Valley, PA, School District, AMBAC, 0s, 2011 810 433,820
Philadelphia, PA, FGIC, 5.125s, 2015 1,000 949,680
Pittsburgh, PA, FGIC, 5.25s, 2011 500 498,035
Southeastern Area, PA, Special Schools Authority
Rev., 0s, 2007 360 239,929
State of Pennsylvania, 6.25s, 2010 300 328,635
----------
$3,755,212
- --------------------------------------------------------------------------------------
State and Local Appropriation - 2.6%
Delaware Valley, PA, Regional Finance Authority,
AMBAC, 6.843s, 2018 ++++ $ 500 $ 483,690
Philadelphia, PA, Municipal Authority Rev.
(Justice Lease), 8.625s, 2016 220 234,654
Puerto Rico Public Finance Corp., AMBAC,
6.99s, 2013 ++++ + 500 509,110
----------
$1,227,454
- --------------------------------------------------------------------------------------
Refunded and Special Obligations - 19.0%
Allegheny County, PA, Sanitation Authority, FGIC,
0s, 2014 $2,835 $1,225,797
Beaver County, PA, "A", MBIA, 5.75s, 2006 250 265,025
Commonwealth of Puerto Rico, 6.35s, 2004 1,350 1,483,340
Harrisburg, PA, 5.875s, 2003 1,000 1,067,370
Philadelphia, PA, Gas Works Rev., 6s, 2013 1,645 1,746,085
Philadelphia, PA, Gas Works Rev., 6.375s, 2014 510 525,958
Philadelphia, PA, Gas Works Rev., MBIA,
5.5s, 2014 1,000 982,550
Philadelphia, PA, Hospital & Higher Educational
Facilities Authority, FHA, 7.25s, 2001 500 535,965
Puerto Rico Highway & Transportation Authority
Rev., 6.5s, 2002 250 268,865
Schuylkill County, PA, Redevelopment Authority
Rev., FGIC, 7s, 2001 300 316,251
Westmoreland County, PA, MBIA, ETM,
5.25s, 2009 400 402,828
----------
$8,820,034
- --------------------------------------------------------------------------------------
Airport and Port Revenue - 6.3%
Allegheny County, PA, Airport Rev. (Pittsburgh
International Airport), MBIA, 5.75s, 2014 $1,000 $1,013,240
Philadelphia, PA, Industrial Development Authority
(Philadelphia Airport Systems), FGIC, 5s, 2016 500 453,360
Philadelphia, PA, Parking Authority Rev., FSA,
5.625s, 2015 1,000 1,002,570
Virgin Islands Port Authority, Airport Rev. (Rohlsen
Terminal), 4.5s, 2005 495 472,809
----------
$2,941,979
- --------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 7.9%
Guam Power Authority Rev., 6.673s, 2014 ++++ + $2,170 $2,072,046
Luzerne County, PA, Industrial Development
Authority, 6.05s, 2019 300 302,535
Luzerne County, PA, Industrial Development
Authority, AMBAC, 7.2s, 2017 500 537,800
Philadelphia, PA, 6.375s, 2003 240 259,803
Virgin Islands Water & Power Authority Rev.,
5.3s, 2018 500 472,625
----------
$3,644,809
- --------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Health Care Revenue - 5.5%
Butler County, PA, Industrial Development
Authority (Sherwood Oaks), 5.75s, 2011 $ 400 $ 393,796
Chester County, PA, Health & Education (Main
Line), 5.5s, 2015 ### 335 326,005
Cumberland County, PA, Municipal Refunding
(Carlisle Hospital), 6.8s, 2023 500 517,490
Philadelphia, PA, Health & Educational Facilities
(Jeanes Health), 6.6s, 2010 500 528,690
Philadelphia, PA, Health & Educational Facilities
(Temple University), 6.625s, 2023 250 255,895
Scranton Lackawanna, PA, Health & Welfare
(Allied Health), 7.125s, 2005 500 527,310
----------
$2,549,186
- --------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 5.5%
Erie County, PA, Industrial Development Authority
(International Paper Co.), 5.3s, 2012 $ 500 $ 484,715
Erie County, PA, Industrial Development Authority
(International Paper Co.), 7.625s, 2018 250 277,648
New Morgan, PA, Industrial Development
Authority (Browning Ferris Co.), 6.5s, 2019 500 519,715
Northampton County, PA, Industrial Development
Authority (Bethlehem Steel), 7.55s, 2017 750 797,220
Westmoreland County, PA, Industrial Development
Corp. (Valley Landfill), 5.1s, 2018 500 466,940
----------
$2,546,238
- --------------------------------------------------------------------------------------
Insured Health Care Revenue - 5.5%
Allegheny County, PA, Hospital Authority (South
Hills Health System), MBIA, 5.8s, 2016 $ 500 $ 502,705
Blair County, PA, Hospital Authority (Altoona),
AMBAC, 5.5s, 2008 470 485,176
Dauphin County, PA, General Authority Hospital
Rev. (Hapsco), MBIA, 5.8s, 2002 355 367,943
Lehigh County, PA, Hospital Rev. (Lehigh Valley),
MBIA, 7s, 2016 250 286,475
Lycoming County, PA, Authority Hospital Rev.
(Williamsport Hospital Obligation Group), Connie
Lee, 5.375s, 2010 750 756,135
Sayre, PA, Health Care Facilities (VHA, PA),
AMBAC, 6.375s, 2022 160 166,837
----------
$2,565,271
- --------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 0.6%
Montgomery County, PA, Redevelopment Authority
(KBF Associates), 6.5s, 2025 $ 250 $ 257,910
- --------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 2.2%
Puerto Rico Highway & Transportation Authority,
5.5s, 2008 $ 500 $ 509,925
Puerto Rico Highway & Transportation Authority,
5.5s, 2013 500 506,560
----------
$1,016,485
- --------------------------------------------------------------------------------------
Single Family Housing Revenue - 6.9%
Pennsylvania Housing Finance Agency, 6.75s, 2014 $ 500 $ 521,635
Pennsylvania Housing Finance Agency, 6.4s, 2016 500 516,140
Pennsylvania Housing Finance Agency, 6.65s, 2021 250 258,162
Pennsylvania Housing Finance Agency, 6.125s, 2024 385 390,513
Pennsylvania Housing Finance Agency, FHA-VA,
5.75s, 2013 1,000 1,009,380
Philadelphia, PA, Redevelopment Authority,
6.1s, 2010 120 121,691
</TABLE>
14 - MPA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Single Family Housing Revenue - continued
Pittsburgh, PA, Urban Development Corp.,
5.5s, 2010 $ 400 $ 397,692
-----------
$ 3,215,213
- --------------------------------------------------------------------------------------
Solid Waste Revenue - 1.1%
York County, PA, Solid Waste Systems Rev., FGIC,
5.5s, 2011 $ 485 $ 496,029
- --------------------------------------------------------------------------------------
Special Assesment District - 2.1%
Pennsylvania Intergovernmental Cooperative
Authority, Special Tax Rev., FGIC, 5.25s, 2016 $1,000 $ 955,800
- --------------------------------------------------------------------------------------
Turnpike Revenue - 6.4%
Pennsylvania Turnpike Commission, 5.25s, 2012 $ 500 $ 494,195
Puerto Rico Highway & Transportation Authority,
MBIA, 5.5s, 2015 500 507,240
Southeastern Pennsylvania Transportation
Authority, Special Rev., FGIC, 5.4s, 2010 500 507,455
Southeastern Pennsylvania Transportation
Authority, Special Rev., FGIC, 5.25s, 2013 1,000 979,850
Southeastern Pennsylvania Transportation
Authority, Special Rev., FGIC, 5.25s, 2015 500 482,445
-----------
$ 2,971,185
- --------------------------------------------------------------------------------------
Universities - 2.9%
Pennsylvania Higher Education Facilities (Temple
University), MBIA, 5.25s, 2014 $ 500 $ 485,540
Philadephia, PA, Authority for Industrial
Development (Girard Estate Facilities Leasing),
5.5s, 2014 880 881,558
-----------
$ 1,367,098
- --------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 5.3%
Philadelphia, PA, Water Rev., 5.75s, 2013 $ 300 $ 304,686
Philadelphia, PA, Water Rev., MBIA, 6.25s, 2012 1,050 1,142,610
Philadelphia, PA, Water Rev., MBIA, 5.5s, 2014 1,000 995,660
-----------
$ 2,442,956
- --------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Other - 8.0%
Lehigh County, PA, General Purpose Authority
(Kidspeace Obligation Group), 6s, 2018 $ 250 $ 239,498
Pennsylvania Convention Center Rev., 6.75s, 2019 250 267,247
Pennsylvania Finance Authority Rev., 6.6s, 2009 900 969,129
Pennsylvania Industrial Development Authority,
AMBAC, 7s, 2007 300 336,243
Pennsylvania Industrial Development Authority,
AMBAC, 5.8s, 2009 400 419,288
Philadelphia, PA, Industrial Development
Authority, MBIA, 5.35s, 2012 500 496,660
Pittsburgh & Allegheny County, PA, Public
Auditorium Hotel Room, AMBAC, 5.25s, 2013 1,000 979,900
-----------
$ 3,707,965
- --------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $44,368,709) $44,480,824
- --------------------------------------------------------------------------------------
Floating Rate Demand Notes - 2.6%
- --------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development
Authority Rev. (Aces Presbyterian Hospital), due
10/07/99 $ 800 $ 800,000
Delaware County, PA, Industrial Development
Authority (United Parcel Service), due 10/01/99 400 400,000
- --------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 1,200,000
- --------------------------------------------------------------------------------------
Total Investments (Identified Cost, $45,568,709) $45,680,824
Other Assets, Less Liabilities - 1.5% 703,965
- --------------------------------------------------------------------------------------
Net assets - 100.0% $46,384,789
- --------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
15 - MPA
<PAGE>
Portfolio of Investments (Unaudited) - September 30, 1999
MFS SOUTH CAROLINA MUNICIPAL BOND FUND
Municipal Bonds - 98.5%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 8.1%
Charleston County, SC, 5.5s, 2014 $1,250 $ 1,249,025
Commonwealth of Puerto Rico, 6.5s, 2013 3,300 3,678,543
North Charleston, SC (Coliseum & Convention),
MBIA, 5.125s, 2015 3,000 2,832,240
Richland County, SC, School District No. 1,
5s, 2016 1,975 1,848,343
State of South Carolina, 5.146s, 2016 ++++ + 5,000 3,749,300
-----------
$13,357,451
- --------------------------------------------------------------------------------------
State and Local Appropriation - 4.6%
Berkeley County, SC, School District (Berkeley
School Facilities Group, Inc.), AMBAC, 5s, 2016 $1,500 $ 1,369,515
Greenville County, SC (University Center),
AMBAC, 5.25s, 2019 1,000 942,830
Greenville, SC, Memorial Auditorium District,
Public Facilities Corp. (Bi-Lo Center), AMBAC,
4.75s, 2014 1,210 1,102,056
Hilton Head Island, SC, Public Finance Corp.,
Certificates of Participation, AMBAC, 5.75s, 2014 1,750 1,796,515
Puerto Rico Public Buildings Authority, 5.7s, 2009 1,000 1,044,270
Puerto Rico Public Finance Corp., AMBAC,
6.99s, 2013 ++++ + 1,375 1,400,052
-----------
$ 7,655,238
- --------------------------------------------------------------------------------------
Refunded and Special Obligations - 14.6%
Berkeley County, SC, School District, AMBAC,
6.3s, 2004 $1,800 $ 1,951,092
Calhoun, SC, Solid Waste Disposal Rev. (Eastman
Kodak), 6.75s, 2017 1,000 1,125,040
Coastal Carolina University, SC, MBIA,
6.875s, 2004 1,000 1,114,490
Columbia, SC, Waterworks & Sewer Rev., 0s, 2004 1,500 1,228,830
Commonwealth of Puerto Rico, 6.5s, 2004 2,000 2,210,280
Greenville County, SC, Certificates of Participation
(Greenville Technical College), AMBAC,
5.9s, 2005 850 915,017
Myrtle Beach, SC, Public Finance Corp.,
Certificates of Participation (Convention Center),
6.875s, 2002 2,500 2,706,900
Puerto Rico Aqueduct & Sewer Authority Rev.,
9s, 2005 750 879,705
Puerto Rico Highway & Transportation Authority
Rev., 6.625s, 2002 300 323,601
Puerto Rico Public Improvement Rev., 6.8s, 2002 425 460,343
Richland County, SC, Certificates of Participation,
FGIC, 0s, 2005 1,160 897,457
Richland County, SC, Certificates of Participation,
FGIC, 0s, 2006 1,160 849,955
South Carolina Jobs Economic Development
Authority (Carolina Hospital System), 7.55s, 2002 2,000 2,209,260
South Carolina Public Service Authority (Santee
Cooper), 6.625s, 2002 2,000 2,155,440
Spartanburg, SC, Waterworks Rev., FGIC,
6.05s, 2006 2,750 2,954,985
Williamsburg County, SC, School District Public
Facilities Corp., Certificates of Participation,
7.5s, 2003 2,010 2,241,130
-----------
$24,223,525
- --------------------------------------------------------------------------------------
Airport and Port Revenue - 2.5%
Horry County, SC, Airport Rev., "A", FSA,
5.7s, 2027 $2,250 $ 2,231,460
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Airport and Port Revenue - continued
Richland Lexington, SC, Airport Rev. (Columbia
Airport), "A", AMBAC, 5.7s, 2026 $1,000 $ 991,920
South Carolina Ports Authority Rev., FSA, 5s, 2016 1,000 908,710
-----------
$ 4,132,090
- --------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 13.8%
Camden, SC, Public Utility Rev., Refunding &
Improvement, MBIA, 5.5s, 2017 ### $1,500 $ 1,479,855
Colleton & Dorchester Counties, SC, Pollution
Control Rev., 6.6s, 2014 3,000 3,198,510
Fairfield County, SC, Pollution Control Rev. (South
Carolina Electric Co.), 6.5s, 2014 1,250 1,334,300
Oconee County, SC, Pollution Control Rev. (Duke
Power Co.), 7.5s, 2017 1,000 1,032,800
Piedmont, SC, Municipal Power Agency, FGIC,
6.25s, 2021 4,600 4,956,500
Puerto Rico Electric Power Authority, FSA,
7.25s, 2015 +++++ 1,000 969,960
Puerto Rico Electric Power Authority, MBIA,
6.125s, 2008 1,025 1,122,703
South Carolina Public Service Authority, FGIC,
5.875s, 2023 2,000 2,037,160
South Carolina Public Service Authority, MBIA,
7.02s, 2013 ++++ 3,000 3,011,820
South Carolina Public Service Authority, "B",
AMBAC, 5.5s, 2023 1,000 970,560
South Carolina Public Service Authority (South
Carolina Electric & Gas), MBIA, 5s, 2019 3,000 2,703,840
-----------
$22,818,008
- --------------------------------------------------------------------------------------
Health Care Revenue - 11.6%
Charlestown County, SC, Rev. (Care Alliance
Health Services), 5s, 2012 $3,045 $ 2,931,848
Greenville County, SC, First Mortgage Rev.
(Chestnut Hill), 10.125s, 2016 ** 1,860 930,000
Greenville, SC, Hospital System, Hospital Facilities
Rev., 6s, 2020 5,400 5,495,634
Greenville, SC, Hospital System, Hospital Facilities
Rev., 5.25s, 2023 2,040 1,879,431
Greenville, SC, Hospital System, Hospital Facilities
Rev., "A", 5.25s, 2017 2,785 2,622,774
Horry County, SC, Hospital Facilities Rev. (Conway
Hospital), 6.75s, 2012 4,125 4,328,321
Puerto Rico Industrial Tourist Educational,
Medical & Environmental Control Facilities (San
Lucas & Cristo), 5.75s, 2019 1,000 947,930
-----------
$19,135,938
- --------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 9.5%
Charleston County, SC, Industrial Rev. (Zeigler
Coal Holdings), 6.95s, 2028 $ 600 $ 588,888
Chester County, SC, Industrial Development Rev.
(Springs Industries, Inc), 7.35s, 2014 1,000 1,053,300
Chester County, SC, Industrial Development Rev.
(Springs Industries, Inc.), 7.8s, 2014 1,025 1,071,484
Darlington County, SC, Industrial Development
Rev. (Nucor Corp.), 5.75s, 2023 2,000 1,984,480
Darlington County, SC, Industrial Development
Rev. (Sonoco Products Co.), 6.125s, 2025 1,500 1,518,540
Florence County, SC, Industrial Development Rev.
(Stone Container Corp.), 7.375s, 2007 785 821,055
Greenville County, SC, Industrial Development
Rev. (Kroger Co.), 7.85s, 2015 500 547,180
</TABLE>
16 - MSC
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Revenue (Corporate Guarantee) - continued
Lexington County, SC, Industrial Rev. (J. B. White
& Co.), 8s, 2005 $ 450 $ 470,637
Richland County, SC, Pollution Control Rev. (Union
Camp Corp.), 6.55s, 2020 1,800 1,867,428
Richland County, SC, Pollution Control Rev. (Union
Camp Corp.), 6.75s, 2022 2,000 2,088,500
York City, SC, Industrial Development Rev.
(Hoechst Celanese), 5.7s, 2024 4,000 3,793,400
------------
$ 15,804,892
- --------------------------------------------------------------------------------------
Insured Health Care Revenue - 8.9%
Charleston County, SC (Care Alliance Health
Services), FSA, 5.125s, 2014 $2,000 $ 1,894,640
Charleston County, SC (Care Alliance Health
Services), FSA, 5s, 2019 1,000 897,440
Charleston County, SC, Hospital Facilities Rev.
(Medical Society Health), MBIA, 5s, 2022 2,450 2,162,958
Lexington County, SC, Hospital Rev., FSA,
5.125s, 2021 1,500 1,360,770
South Carolina Jobs & Economic Development
Authority, Hospital Facilities Rev. (Anderson Area
Medical Center), FSA, 5.2s, 2012 1,500 1,481,895
South Carolina Jobs & Economic Development
Authority, Hospital Facilities Rev. (Anderson Area
Medical Center), FSA, 5.3s, 2015 1,000 963,100
South Carolina Jobs & Economic Development
Authority, Hospital Facilities Rev. (Anderson Area
Medical Center), MBIA, 5.25s, 2015 1,750 1,669,623
South Carolina Jobs & Economic Development
Authority, Hospital Facilities Rev. (Georgetown
Memorial Hospital), AMBAC, 6s, 2014 1,000 1,029,030
Spartanburg County, SC, Health Service Rev.,
AMBAC, 5.3s, 2025 1,000 940,150
Spartanburg County, SC, Hospital Facilities Rev.
(Health Services District, Inc.), AMBAC,
5.3s, 2020 2,500 2,385,450
------------
$ 14,785,056
- --------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 2.6%
South Carolina Housing, Finance & Development
Authority (Fairway Apartments), FHA,
7.625s, 2033 $1,895 $ 1,958,881
South Carolina Housing, Finance & Development
Authority (Hunting Ridge Apartments), 6.75s, 2025 1,000 1,033,650
South Carolina Housing, Finance & Development
Authority (Runaway Bay Apartments),
6.125s, 2015 1,300 1,313,663
------------
$ 4,306,194
- --------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 0.6%
Territory of Virgin Islands Public Finance
Authority, 5.5s, 2018 $1,000 $ 947,950
- --------------------------------------------------------------------------------------
Single Family Housing Revenue
South Carolina Housing, Finance & Development
Authority Rev., 8.6s, 2019 $ 80 $ 80,738
- --------------------------------------------------------------------------------------
Solid Waste Revenue - 1.2%
Orangeburg County, SC, Solid Waste Disposal
Facilities Rev., AMBAC, 5.7s, 2024 $2,000 $ 1,935,220
- --------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Turnpike Revenue - 1.4%
Puerto Rico Highway & Transportation Authority,
5.5s, 2013 $1,000 $ 1,013,120
Puerto Rico Public Finance Corp., 7.021s, 2019
++++ + 1,300 1,260,844
------------
$ 2,273,964
- --------------------------------------------------------------------------------------
Universities - 0.9%
Greenville County, SC (Greenville Technical
College), AMBAC, 5s, 2017 $1,000 $ 907,470
University of South Carolina, University Rev.,
MBIA, 5.75s, 2026 515 517,477
------------
$ 1,424,947
- --------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 17.4%
Cayce, SC, Waterworks & Sewage Rev., FSA,
5s, 2017 $1,000 $ 903,560
Charleston County, SC, Waterworks & Sewer
Rev., 6s, 2012 2,000 2,075,180
Charleston, SC, Waterworks & Sewer Rev.,
6s, 2018 1,500 1,539,090
Charleston, SC, Waterworks & Sewer Rev., MBIA,
5s, 2022 1,000 894,810
Columbia, SC, Waterworks & Sewer Rev., 0s, 2005 2,245 1,737,698
Columbia, SC, Waterworks & Sewer Rev., 0s, 2006 9,330 6,866,973
Columbia, SC, Waterworks & Sewer Rev.,
5.375s, 2012 1,000 998,220
Columbia, SC, Waterworks & Sewer Rev., 6s, 2015 2,000 2,062,560
Greenville, SC, Waterworks Rev., 5.5s, 2022 1,000 968,670
Myrtle Beach, SC, Water & Sewer Rev., MBIA,
5.5s, 2013 1,000 1,007,520
South Carolina Water Resources Authority Rev.
(Local Government Program), 7.25s, 2020 3,000 3,093,900
Spartanburg, SC, Waterworks Rev., FGIC, 5s, 2013 1,000 959,450
Spartanburg, SC, Waterworks Rev., FGIC, 5s, 2014 1,000 948,810
Western Carolina Regional Sewer Authority Rev.,
AMBAC, 0s, 2007 4,000 2,769,760
York County, SC, Water & Sewer Rev., 6.5s, 2025 2,000 1,965,180
------------
$ 28,791,381
- --------------------------------------------------------------------------------------
Other - 0.8%
North Charleston, SC, Municipal Golf Course
Mortgage Rev., 5s, 2009 $ 500 $ 469,620
North Charleston, SC, Municipal Golf Course
Mortgage Rev., 5.5s, 2019 1,000 909,430
------------
$ 1,379,050
- --------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $160,509,290) $163,051,642
- --------------------------------------------------------------------------------------
Floating Rate Demand Note
- --------------------------------------------------------------------------------------
Harris County, TX, Industrial Development Corp.
(Shell Oil Co.), due 10/01/99, at Identified Cost $ 100 $ 100,000
- --------------------------------------------------------------------------------------
Total Investments (Identified Cost, $160,609,290) $163,151,642
Other Assets, Less Liabilities - 1.5% 2,447,689
- --------------------------------------------------------------------------------------
Net assets - 100.0% $165,599,331
- --------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
17 - MSC
<PAGE>
Portfolio of Investments (Unaudited) - September 30, 1999
MFS TENNESSEE MUNICIPAL BOND FUND
Municipal Bonds - 97.6%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 13.4%
Commonwealth of Puerto Rico, 5.375s, 2025 $1,640 $ 1,549,390
Commonwealth of Puerto Rico, 5.4s, 2025 3,000 2,883,060
Gibson County, TN, MBIA, 5.75s, 2016 645 651,708
Johnson City, TN, FGIC, 0s, 2012 1,690 855,394
Knoxville, TN, 5.25s, 2015 1,000 974,820
Memphis, TN, 5s, 2015 3,000 2,813,760
Rutherford County, TN, 0s, 2015 1,500 619,005
Shelby County, TN, 0s, 2012 3,000 1,498,050
Shelby County, TN, 0s, 2013 3,960 1,819,580
State of Tennessee, 5s, 2016 4,000 3,770,840
-----------
$17,435,607
- --------------------------------------------------------------------------------------
State and Local Appropriation - 3.8%
Gatlinburg, TN, Public Building Authority
(Gatlinburg Convention Center), AMBAC,
6.9s, 2012 $1,000 $ 1,060,280
Puerto Rico Public Buildings Authority, 5.5s, 2021 1,000 977,560
Tennessee Local Development Authority Rev.,
7s, 2021 1,000 1,056,690
Tennessee Local Development Authority Rev.,
MBIA, 5.125s, 2013 1,845 1,787,787
-----------
$ 4,882,317
- --------------------------------------------------------------------------------------
Refunded and Special Obligations - 17.1%
Franklin, TN, Industrial Development Rev.
(Sussex Downs), FHA, 6.75s, 2004 $1,000 $ 1,117,420
Knox County, TN, Industrial Development Board,
0s, 2016 5,825 2,105,796
Metropolitan Government of Nashville & Davidson
County, TN, 6.125s, 2002 2,255 2,397,020
Metropolitan Government of Nashville & Davidson
County, TN, AMBAC, 6.075s, 2002 ++++ 2,000 2,106,760
Mt. Juliet, TN, Public Building Authority
(Madison), MBIA, 7.7s, 2004 1,100 1,327,018
Mt. Juliet, TN, Public Building Authority
(Madison), MBIA, 7.8s, 2004 3,500 4,235,945
Shelby County, TN, 5.75s, 2006 1,000 1,057,590
Territory of Virgin Islands, 7.75s, 2001 305 324,791
West Knox Utility District, TN, Water & Sewer
Rev., MBIA, 0s, 2002 1,315 1,141,657
West Knox Utility District, TN, Water & Sewer
Rev., MBIA, 0s, 2003 1,045 863,295
West Knox Utility District, TN, Water & Sewer
Rev., MBIA, 0s, 2004 1,920 1,506,509
West Knox Utility District, TN, Water & Sewer
Rev., MBIA, 0s, 2005 1,920 1,426,944
West Knox Utility District, TN, Water & Sewer
Rev., MBIA, 0s, 2006 1,920 1,350,317
West Knox Utility District, TN, Water & Sewer
Rev., MBIA, 0s, 2007 1,920 1,275,321
-----------
$22,236,383
- --------------------------------------------------------------------------------------
Airport and Port Revenue - 0.7%
Memphis-Shelby County, TN, Airport Authority
(North West Link & Parent Co.), 6.125s, 2016 $1,000 $ 974,090
- --------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 7.0%
Harpeth Valley, TN, Utilities Improvement, MBIA,
4.75s, 2013 $1,000 $ 920,060
Jackson, TN, Electric Systems Rev., MBIA,
5s, 2018 1,000 906,690
Lawrenceburg, TN, Electric Rev., MBIA, 5.5s, 2026 1,255 1,202,466
Metropolitan Government of Nashville & Davidson
County, TN, 0s, 2010 2,480 1,430,836
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Electric and Gas Utility Revenue - continued
Metropolitan Government of Nashville & Davidson
County, TN, 5.125s, 2015 $2,000 $ 1,903,360
Metropolitan Government of Nashville & Davidson
County, TN, MBIA, 0s, 2012 3,305 1,679,601
Tennessee Gas Rev. (Tennergy Corp.), MBIA,
5s, 2009 1,000 1,000,960
-----------
$ 9,043,973
- --------------------------------------------------------------------------------------
Health Care Revenue - 6.0%
Cookeville, TN, Industrial Development Board,
Hospital Rev. (Cookeville General), 5.75s, 2010 $2,000 $ 2,007,600
Knox County, TN, Health, Education & Housing
Facilities Board (East Tennessee Children's),
6.5s, 2012 1,000 1,041,860
Metropolitan Government of Nashville & Davidson
County, TN, Health & Educational Facilities
Board Rev. (Adventist Health System),
5.25s, 2020 1,000 884,460
Puerto Rico Industrial Tourist Educational,
Medical & Environmental Control Facilities (San
Lucas & Cristo), 5.75s, 2019 1,000 947,930
Shelby County, TN, Health Educational & Housing
(St. Judes Childrens Research), 5.5s, 2020 1,750 1,670,567
Springfield, TN, Health & Higher Educational
Facilities (Northcrest Medical Center),
5.25s, 2013 1,290 1,210,936
-----------
$ 7,763,353
- --------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 7.7%
Bristol, TN, Industrial Development Authority
(Kmart Corp.), 7.5s, 2008 ### $1,105 $ 1,192,416
Hardeman County, TN (Correctional Facilities
Corp.), 7.375s, 2017 500 521,220
Hardeman County, TN (Correctional Facilities
Corp.), 7.75s, 2017 1,000 1,072,780
Humphreys County, TN, Certificates of
Participation (DuPont), 6.7s, 2024 1,750 1,889,930
Knox County,TN, Industrial Development Board
(Kroger Co.), 8.1s, 2003 2,000 2,156,600
Lawrenceburg, TN, Industrial Development Board
(Tridon, Inc.), 9.875s, 2006 1,000 1,035,000
McMinn County, TN, Industrial Development
Board, Pollution Control Rev. (Bowater),
7.625s, 2016 1,000 1,046,410
Memphis-Shelby County, TN, Airport Authority
(Federal Express Corp.), 6.2s, 2014 1,000 1,027,750
-----------
$ 9,942,106
- --------------------------------------------------------------------------------------
Insured Health Care Revenue - 11.0%
Bristol, TN, Health & Educational Facilities Board
(Bristol Memorial), FGIC, 5.45s, 2021 $2,825 $ 2,726,718
Jackson, TN, Hospital Rev. (Jackson-Madison
County General Hospital), AMBAC, 5s, 2018 1,000 900,340
Johnson City, TN, Health & Education Financing
Authority (Johnson City Medical Center
Hospital), MBIA, 5.25s, 2016 1,375 1,318,433
Johnson City, TN, Health & Education Financing
Authority (Johnson City Medical Center
Hospital), MBIA, 5s, 2018 3,000 2,698,560
Knox County, TN, Health, Education & Housing
Facilities Board (Fort Sanders), MBIA,
5.75s, 2014 3,250 3,334,825
</TABLE>
18 - MTN
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Insured Health Care Revenue - continued
Metropolitan Government of Nashville & Davidson
County, TN, Health & Education (Meharry
Medical College), AMBAC, 5s, 2024 $3,750 $ 3,327,900
------------
$ 14,306,776
- --------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 4.6%
Franklin, TN, Industrial Development Rev.
(Landings Apartments), FSA, 6s, 2026 $1,000 $ 1,010,720
Jackson, TN, Health, Education & Housing
Facilities Board (Posthouse Apartments), FHA,
7.1s, 2028 1,610 1,690,999
Metropolitan Government of Nashville & Davidson
County, TN, Health & Education Facility Board
Rev. (Herman Street), FHA, 7.25s, 2032 495 520,216
Metropolitan Government of Nashville & Davidson
County, TN, Industrial Development Board, FHA,
6.95s, 2026 1,000 1,051,010
Metropolitan Government of Nashville & Davidson
County, TN, Industrial Development Board, FHA,
7.5s, 2029 695 716,246
Metropolitan Government of Nashville & Davidson
County, TN, Industrial Development Board, FHA,
7.7s, 2029 1,000 1,024,110
------------
$ 6,013,301
- --------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 0.5%
Virgin Islands Public Finance Authority,
5.875s, 2018 $ 730 $ 708,363
- --------------------------------------------------------------------------------------
Single Family Housing Revenue - 5.5%
Shelby County, TN, Single Family Mortgage Rev.,
FHA, 0s, 2015 $4,040 $ 854,662
Tennessee Housing Development Agency, 5.45s,
2014 2,535 2,459,634
Tennessee Housing Development Agency, 0s, 2016 5,000 1,882,700
Tennessee Housing Development Agency, 7.4s,
2016 1,495 1,536,427
Tennessee Housing Development Agency, 7.125s,
2026 355 360,165
------------
$ 7,093,588
- --------------------------------------------------------------------------------------
Turnpike Revenue - 3.7%
Puerto Rico Highway & Transportation Authority,
FSA, 5s, 2016 $4,000 $ 3,773,480
Puerto Rico Highway & Transportation Authority,
MBIA, 5.5s, 2015 1,000 1,014,480
------------
$ 4,787,960
- --------------------------------------------------------------------------------------
Universities - 4.4%
Jackson, TN, Health, Education & Housing
Facilities Board (Lambuth University), Asset
Guaranty, 5.9s, 2015 $1,000 $ 1,019,560
Metropolitan Government of Nashville & Davidson
County, TN, Health, Educational & Housing
Facilities Board (McKendree Village, Inc.),
5.125s, 2020 1,000 887,250
Metropolitan Government of Nashville & Davidson
County, TN, Health, Educational & Housing
Facilities Board (Vanderbilt University),
5.25s, 2012 1,000 989,510
Metropolitan Government of Nashville & Davidson
County, TN, Health, Educational & Housing
Facilities Board (Vanderbilt University), 5.3s, 2013 1,875 1,868,869
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Universities - continued
Metropolitan Government of Nashville & Davidson
County, TN, Health, Educational & Housing
Facilities Board (Vanderbilt University),
5.375s, 2014 $1,000 $ 999,040
------------
$ 5,764,229
- --------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 12.2%
Clarksville, TN, Water, Sewer & Gas, MBIA,
5.25s, 2018 $1,000 $ 951,190
Hallsdale Powell Utility District, AMBAC, 5s, 2019 1,000 906,070
Madison, TN, Utility Waterworks Refunding,
MBIA, 5s, 2019 2,750 2,492,682
Metropolitan Government of Nashville & Davidson
County, TN, Water & Sewer Rev., AMBAC,
8.469s, 2022 ++++ 1,000 1,110,910
Metropolitan Government of Nashville & Davidson
County, TN, Water & Sewer Rev., FGIC,
5.2s, 2013 2,000 1,971,000
Metropolitan Government of Nashville & Davidson
County, TN, Water & Sewer Rev., FGIC,
5.1s, 2016 2,565 2,412,921
Poplar Grove, TN, Utility District, Waterworks
Rev., 6.375s, 2011 500 517,165
Puerto Rico Aqueduct & Sewer Rev., 6.25s, 2012 2,000 2,187,240
White House Utility District, TN, Robertson &
Sumner Counties Waterworks, FGIC, 0s, 2014 3,590 1,630,650
White House Utility District, TN, Robertson &
Sumner Counties Waterworks, FGIC, 5.25s, 2017 1,700 1,627,036
------------
$ 15,806,864
- --------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $124,986,843) $126,758,910
- --------------------------------------------------------------------------------------
Floating Rate Demand Note - 0.4%
- --------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority, due
10/07/99, at Identified Cost $ 500 $ 500,000
- --------------------------------------------------------------------------------------
Total Investments (Identified Cost, $125,486,843) $127,258,910
Other Assets, Less Liabilities - 2.0% 2,584,385
- --------------------------------------------------------------------------------------
Net assets - 100.0% $129,843,295
- --------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
19 - MTN
<PAGE>
Portfolio of Investments (Unaudited) - September 30, 1999
MFS VIRGINIA MUNICIPAL BOND FUND
Municipal Bonds - 97.4%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 14.8%
Bristol, VA, MBIA, 5.3s, 2018 $1,250 $ 1,204,187
Chesapeake, VA, Public Improvement, 5.375s, 2013 3,500 3,499,055
Commonwealth of Puerto Rico, 5.5s, 2013 2,000 2,036,000
Fairfax County, VA, 5.446s, 2016 +++++ 3,855 3,079,066
Fairfax County, VA, 5.446s, 2017 +++++ 3,845 3,012,557
Fairfax County, VA, Public Improvement, 5.5s, 2013 2,470 2,483,412
Fairfax County, VA, Redevelopment & Housing
Authority, 5.5s, 2017 2,225 2,220,773
Lebanon, VA, 6.375s, 2011 1,625 1,713,270
Loudoun County, VA, 5.25s, 2015 480 468,634
Loudoun County, VA, 5s, 2016 1,000 933,840
Newport News, VA, 5s, 2017 3,340 3,097,082
Newport News, VA, 5s, 2018 4,170 3,847,909
Norfolk, VA, Parking System Rev., MBIA, 5s, 2020 1,630 1,476,959
Richmond, VA, 0s, 2006 1,000 739,850
Richmond, VA, 0s, 2006 2,500 1,849,625
Richmond, VA, 0s, 2007 5,280 3,697,637
Richmond, VA, 0s, 2008 2,000 1,323,180
Richmond, VA, 0s, 2008 5,270 3,486,579
Richmond, VA, 0s, 2009 5,175 3,233,961
Richmond, VA, 5.5s, 2009 5,000 5,188,400
Spotsylvania County, VA, FGIC, 6s, 2009 4,270 4,581,454
Virginia Public School Authority, School
Financing, 5.125s, 2016 2,000 1,903,060
Virginia Public School Authority, School
Financing, 5.125s, 2017 1,000 945,540
-----------
$56,022,030
- --------------------------------------------------------------------------------------
State and Local Appropriation - 11.9%
Blue Ridge, VA, Regional Jail Authority, MBIA,
5.2s, 2017 ### $1,500 $ 1,428,525
Blue Ridge, VA, Regional Jail Authority, MBIA,
5.2s, 2021 4,830 4,533,438
Chesapeake, VA, Industrial Development Authority
(Chesapeake Court House), MBIA, 6.25s, 2011 3,985 4,342,614
Chesapeake, VA, Industrial Development Authority
(Chesapeake Court House), MBIA, 5.25s, 2017 2,000 1,923,820
Chesterfield County, VA, Industrial Development
Authority, Public Facilities, 7.5s, 2008 1,720 1,834,277
Henrico County, VA, Industrial Development
Authority Rev., 6.5s, 2010 5,000 5,403,500
Portsmouth, VA, Industrial Development Authority
Rev., Hotel Conference Center & Parking, FSA,
5.125s, 2014 1,170 1,126,230
Portsmouth, VA, Industrial Development Authority
Rev., Hotel Conference Center & Parking, FSA,
5.125s, 2015 1,000 954,960
Portsmouth, VA, Industrial Development Authority
Rev., Hotel Conference Center & Parking, FSA,
5.125s, 2016 1,295 1,227,712
Portsmouth, VA, Industrial Development Authority
Rev., Hotel Conference Center & Parking, FSA,
5.125s, 2017 1,360 1,278,169
Puerto Rico Public Buildings Authority, 5.25s, 2021 3,075 2,867,007
Puerto Rico Public Finance Corp., AMBAC, 6.99s,
2013 +++++ 2,000 2,036,440
Puerto Rico Public Finance Corp., AMBAC,
7.021s, 2016 +++++ 500 497,040
Virginia Biotechnology Research Park (Biotech
Two), 5.25s, 2018 8,800 8,314,416
Virginia Public Building Authority, 5s, 2011 1,000 982,040
Virginia Public Building Authority, MBIA, 0s, 2007 9,000 6,118,830
-----------
$44,869,018
- --------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Refunded and Special Obligations - 8.0%
Albemarle County, VA, Industrial Development
Authority, Health Services Rev., 6.5s, 2002 $1,000 $ 1,076,350
Arlington County, VA, Industrial Development
Authority (Arlington Hospital), 7.125s, 2001 1,000 1,072,790
Carroll County, VA, Solid Waste Authority Rev.,
7.5s, 2001 2,265 2,443,097
Fairfax, Fauquier & Loudoun Counties, VA, Health
Center Commission, Nursing Home Rev., 9s, 2000 1,810 1,929,732
Hampton Roads, VA, Medical College General
Rev., 6.875s, 2001 1,500 1,606,695
New Kent County, VA, Industrial Development
Authority, Public Facilities, 7.5s, 2001 700 751,737
Newport News, VA, 6.5s, 2000 3,080 3,228,302
Portsmouth, VA, 6.375s, 2001 1,555 1,644,428
Puerto Rico Aqueduct & Sewer Authority Rev.,
9s, 2005 4,150 4,867,701
Puerto Rico Aqueduct & Sewer Authority Rev.,
10.25s, 2009 400 512,796
Richmond, VA, 6.5s, 2001 2,000 2,096,220
Virginia Beach, VA, Certificates of Participation
(Judical Center), FGIC, 7.25s, 2000 4,955 5,204,930
Virginia Beach, VA, Water & Sewer Rev.,
6.625s, 2002 1,400 1,495,494
Virginia Public School Authority, 6.5s, 2004 1,875 2,060,887
-----------
$29,991,159
- --------------------------------------------------------------------------------------
Airport and Port Revenue - 8.5%
Metropolitan Washington, DC, Airport Rev.,
7.6s, 2014 $5,030 $ 5,274,910
Metropolitan Washington, DC, Airport Rev.,
5.5s, 2016 2,465 2,380,081
Metropolitan Washington, DC, Airport Rev.,
5.75s, 2020 11,000 10,802,000
Metropolitan Washington, DC, Airport Rev., MBIA,
5s, 2018 2,000 1,787,220
Metropolitan Washington, DC, Airport Rev., "A",
MBIA, 6.625s, 2019 1,000 1,056,410
Peninsula Airport Commission, VA, 7.3s, 2021 2,400 2,532,696
Puerto Rico Ports Authority (American Airlines),
6.3s, 2023 2,000 2,031,460
Puerto Rico Ports Authority (American Airlines),
6.25s, 2026 6,000 6,055,740
-----------
$31,920,517
- --------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 3.5%
Guam Power Authority Rev., AMBAC, 6.673s,
2015 +++++ $1,010 $ 950,026
Halifax County, VA, Industrial Authority Rev. (Old
Dominion Electric), 6s, 2022 5,000 5,006,600
Pittsylvania County, VA, Industrial Development
Authority Rev., 7.5s, 2014 4,000 4,256,760
Puerto Rico Electric Power Authority, 6s, 2015 3,000 3,091,380
-----------
$13,304,766
- --------------------------------------------------------------------------------------
Health Care Revenue - 4.1%
Lynchburg, VA, Industrial Development Authority,
5.2s, 2018 $1,000 $ 919,000
Martinsville, VA, Industrial Development Authority
(Beverley Enterprises), 6.75s, 2004 1,075 1,078,666
Peninsula Ports, VA, Health Care Rev. (Riverside
Health System), 6.625s, 2010 1,500 1,614,555
Peninsula Ports, VA, Health Care Rev. (Riverside
Health System), 5s, 2018 4,000 3,627,640
</TABLE>
20 - MVA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Health Care Revenue - continued
Virginia Beach, VA, Development Authority
(Beverly Enterprises), 10s, 2010 $1,210 $ 1,266,107
Virginia Beach, VA, Development Authority
(Sentara Health System), 5.25s, 2014 3,740 3,632,737
Virginia Beach, VA, Development Authority
(Sentara Health System), 4.75s, 2018 3,750 3,263,100
-----------
$15,401,805
- --------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 6.5%
Bedford County, VA, Industrial Development
Authority Rev. (Georgia Pacific Corp.), 5.6s, 2025 $6,000 $ 5,492,700
Isle Wight County, VA, Industrial Development
(Union Camp), 6.55s, 2024 8,000 8,284,320
Isle Wight County, VA, Industrial Development
(Union Camp), 6.1s, 2027 3,500 3,454,010
Loudoun, VA, Industrial Development Authority
Rev. (Dulles Airport Marriott Hotel), 7.125s, 2015 2,000 2,106,580
Lynchburg, VA, Industrial Development Authority
(Kroger Co.), 7.9s, 2011 1,000 1,076,470
Virginia Peninsula Ports Authority Rev. (Zeigler
Coal), 6.9s, 2022 1,500 1,454,145
West Point, VA, Industrial Development Authority,
Solid Waste Disposal Rev. (Chesapeake Corp.),
6.375s, 2019 2,600 2,651,948
-----------
$24,520,173
- --------------------------------------------------------------------------------------
Insured Health Care Revenue - 10.3%
Albemarle County, VA, Industrial Development
Authority, First Mortgage Rev., FHA, 8.9s, 2026 $2,150 $ 2,277,753
Danville, VA, Industrial Development Authority
Hospital Rev. (Danville Regional Medical Center),
AMBAC, 5.2s, 2018 2,500 2,366,875
Fredericksburg, VA, Industrial Development
(Medicorp Health Systems), AMBAC, 5.25s, 2023 11,000 10,251,450
Front Royal-Warren County, VA, Industrial
Development Authority, FHA, 9.45s, 2024 1,000 1,041,070
Hanover County, VA, Industrial Development
Authority, MBIA, 6s, 2009 1,550 1,655,013
Hanover County, VA, Industrial Development
Authority (Memorial Regional Medical Center),
MBIA, 6.5s, 2008 1,000 1,106,510
Hanover County, VA, Industrial Development
Authority (Memorial Regional Medical Center),
MBIA, 6.5s, 2009 1,510 1,670,226
Henrico County, VA, Industrial Development
Authority Rev. (Bon Secours Health), MBIA,
6.25s, 2020 1,500 1,607,460
Medical College of Virginia, Hospital Authority
Rev., MBIA, 5.125s, 2018 3,000 2,789,130
Peninsula Ports Authority, VA (Whittaker
Memorial), FHA, 8.7s, 2023 2,100 2,113,650
Roanoke, VA, Industrial Development Authority,
Hospital Rev. (Roanoke Memorial), MBIA,
6.125s, 2017 6,000 6,350,160
Winchester, VA, Industrial Development Authority,
AMBAC, 9.195s, 2014 ++++ 4,900 5,530,238
-----------
$38,759,535
- --------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Multi-Family Housing Revenue - 3.4%
Alexandria, VA, Redevelopment & Housing
Finance Authority (Jefferson Village
Apartments), 9s, 2018 $4,000 $ 4,056,880
Norfolk, VA, Redevelopment & Housing Authority
(Dockside Apartments), FHA, 7.375s, 2028 2,000 2,079,960
Virginia Housing Development Authority, 6.5s, 2013 2,300 2,409,480
Virginia Housing Development Authority, 5.1s, 2015 1,550 1,460,069
Virginia Housing Development Authority, 5.95s, 2016 1,905 1,943,690
Virginia Housing Development Authority, 6.6s, 2022 965 993,410
-----------
$12,943,489
- --------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 1.0%
Commonwealth of Puerto Rico, "A", AMBAC,
5s, 2021 $3,000 $ 2,739,630
Virgin Islands Public Finance Authority,
5.625s, 2025 1,000 948,430
-----------
$ 3,688,060
- --------------------------------------------------------------------------------------
Single Family Housing Revenue - 8.3%
Virginia Housing Development Authority, 7.67s,
2019 ++++ $7,500 $ 7,599,525
Virginia Housing Development Authority, 6.2s, 2021 15,000 15,138,600
Virginia Housing Development Authority, 6.3s, 2025 8,500 8,644,330
-----------
$31,382,455
- --------------------------------------------------------------------------------------
Solid Waste Revenue - 0.1%
Arlington County, VA, Industrial Development
Authority, Resource Recovery Rev., FSA,
5.25s, 2010 $ 500 $ 499,335
- --------------------------------------------------------------------------------------
Turnpike Revenue - 6.0%
Chesapeake Bay, VA, Bridge & Tunnel Authority,
FGIC, 0s, 2005 $4,535 $ 3,454,400
North Virginia Transportation District, Commuter
Rail (Railway Express), FSA, 5.375s, 2013 3,220 3,227,438
North Virginia Transportation District, Commuter
Rail (Railway Express), MBIA, 6s, 2010 1,240 1,329,739
Pocahontas Parkway Assn., VA, Toll Road Rev.,
0s, 2012 1,500 692,430
Pocahontas Parkway Assn., VA, Toll Road Rev.,
0s, 2013 1,500 647,685
Pocahontas Parkway Assn., VA, Toll Road Rev.,
0s, 2014 1,500 605,235
Pocahontas Parkway Assn., VA, Toll Road Rev.,
0s, 2015 1,500 560,670
Pocahontas Parkway Assn., VA, Toll Road Rev.,
0s, 2016 1,500 522,630
Puerto Rico Highway & Transportation Authority
Rev., 5.5s, 2018 1,450 1,421,464
Puerto Rico Highway & Transportation Authority
Rev., FSA, 5.5s, 2015 2,000 2,028,960
Virginia Transportation Board, Transportation
Contract Rev., 6.5s, 2018 3,500 3,688,300
Virginia Transportation Board, US Route 58,
5.125s, 2021 5,000 4,574,900
-----------
$22,753,851
- --------------------------------------------------------------------------------------
Universities - 3.1%
Hampton Roads, VA, Medical College General
Rev., 6.875s, 2016 $2,000 $ 2,090,040
Loudoun County, VA, Industrial Development
Authority (George Washington University),
6.25s, 2012 2,710 2,824,037
</TABLE>
21 - MVA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Universities - continued
Roanoke County, VA, Industrial Development
Authority (Hollins College), 5.25s, 2023 $1,000 $ 907,310
Virginia College Building Authority, Educational
Facilities Rev. (Hampden Syndey College),
5s, 2016 1,730 1,600,977
Virginia College Building Authority, Educational
Facilities Rev. (Hampton University), 5s, 2018 1,655 1,474,638
Virginia College Building Authority, Educational
Facilities Rev. (Marymount), 7s, 2022 2,500 2,711,500
------------
$ 11,608,502
- --------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 4.9%
Chesterfield County, VA, Water & Sewer Rev.,
0s, 2007 $6,000 $ 4,016,700
Chesterfield County, VA, Water & Sewer Rev.,
0s, 2008 6,135 3,836,338
Chesterfield County, VA, Water & Sewer Rev.,
0s, 2009 6,135 3,632,534
Hanover County, VA, Water & Sewer Systems,
MBIA, 5.25s, 2026 2,000 1,875,400
Henrico County, VA, Water & Sewer Rev.,
5.25s, 2013 1,195 1,175,235
Norfolk, VA, Water Rev., FSA, 5s, 2013 1,905 1,824,475
Prince William County, VA, Water & Sewer
Systems Rev., FGIC, 5.5s, 2019 2,000 1,954,900
------------
$ 18,315,582
- --------------------------------------------------------------------------------------
Other - 3.0%
Danville, VA, Industrial Development Authority,
Industrial Development Rev. (Piedmont Mall),
8s, 2013 $2,875 $ 2,936,094
New River Valley, VA, Regional Jail Authority,
MBIA, 5.125s, 2019 6,405 5,939,292
Pamunkey, VA, Regional Jail Authority, MBIA,
5.75s, 2018 2,500 2,522,276
------------
$ 11,397,662
- --------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $364,440,191) $367,377,939
- --------------------------------------------------------------------------------------
Floating Rate Demand Note - 0.5%
- --------------------------------------------------------------------------------------
Harris County, TX, Industrial Development Corp.
(Shell Oil Co.), due 10/01/99, at Identified Cost $2,000 $ 2,000,000
- --------------------------------------------------------------------------------------
Total Investments (Identified Cost, $366,440,191) $369,377,939
Other Assets, Less Liabilities - 2.1% 7,901,898
- --------------------------------------------------------------------------------------
Net assets - 100.0% $377,279,837
- --------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
MFS WEST VIRGINIA MUNICIPAL BOND FUND
Municipal Bonds - 98.1%%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 17.6%
Charleston, WV, Public Improvement, 7.2s, 2008 $1,240 $ 1,431,109
Charleston, WV, Public Improvement, 7.2s, 2009 1,140 1,323,164
Jefferson County, WV, Board of Education, FGIC,
6.85s, 2009 1,680 1,898,434
State of West Virginia, FGIC, 5s, 2015 1,500 1,413,960
State of West Virginia, FGIC, 5.5s, 2017 2,565 2,481,791
State of West Virginia, FGIC, 5s, 2021 4,000 3,585,520
State of West Virginia, FGIC, 5.25s, 2026 8,000 7,402,640
State of West Virginia, State Roads, 5.75s, 2015 2,000 2,039,940
State of West Virginia, Water Development
Authority Rev., FSA, 6.2s, 2024 3,000 3,164,490
-----------
$24,741,048
- --------------------------------------------------------------------------------------
State and Local Appropriation - 10.7%
Charlestown, WV, Urban Renewal Authority Lease
Rev., FSA, 5.05s, 2014 $1,000 $ 938,020
Huntington, WV, Municipal Development Authority
Rev., MBIA, 5.1s, 2018 2,740 2,510,963
Puerto Rico Public Buildings Authority, 5.25s, 2021 3,115 2,904,301
State of West Virginia Building Commission,
AMBAC, 6.646s, 2018 +++++ 5,770 5,390,450
West Virginia School Building Authority,
Refunding Capital Improvement, "B", FSA,
5.25s, 2021 3,550 3,322,374
-----------
$15,066,108
- --------------------------------------------------------------------------------------
Refunded and Special Obligations - 12.6%
Cabell, WV, Board of Education, MBIA, 6s, 2006 $ 500 $ 535,490
Kanawha County, WV, Building Commission (St.
Francis Hospital), 7.5s, 2007 215 234,978
Monongalia County, WV, Board of Education,
MBIA, 7s, 2005 500 556,855
Ohio County, WV, Board of Education, MBIA,
5.25s, 2018 1,180 1,141,615
Puerto Rico Aqueduct & Sewer Authority Rev.,
9s, 2005 1,500 1,759,410
West Virginia Building Commission, Lease Rev.
(West Virginia Regional Jail), MBIA, 7s, 2000 1,000 1,043,070
West Virginia Building Commission, Lease Rev.
(West Virginia Regional Jail), MBIA, 0s, 2007 3,150 2,136,519
West Virginia Building Commission, Lease Rev.
(West Virginia Regional Jail), MBIA, 0s, 2008 3,050 1,950,780
West Virginia Building Commission, Lease Rev.
(West Virginia Regional Jail), MBIA, 0s, 2009 2,500 1,507,800
West Virginia Parkways, Economic Development
& Tourism Authority, FGIC, 0s, 2005 2,250 1,706,152
West Virginia Parkways, Economic Development
& Tourism Authority, FGIC, 0s, 2006 2,500 1,794,650
West Virginia Parkways, Economic Development
& Tourism Authority, FGIC, 0s, 2007 2,000 1,356,520
West Virginia Parkways, Economic Development
& Tourism Authority, FGIC, 0s, 2008 610 390,156
West Virginia Water Development Authority,
7.625s, 2000 500 529,655
West Virginia Water Development Authority,
7.4s, 2001 750 811,980
West Virginia Water Development Authority,
7.1s, 2009 220 240,244
-----------
$17,695,874
- --------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 11.6%
Marshall County, WV, Pollution Control Rev. (Ohio
Power Co.), 6.85s, 2022 $2,000 $ 2,105,900
</TABLE>
22 - MWV
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Electric and Gas Utility Revenue - continued
Marshall County, WV, Pollution Control Rev. (Ohio
Power Co.), MBIA, 6.85s, 2022 $3,150 $ 3,350,655
Mason County, WV, Pollution Control Rev.
(Appalachian Power), MBIA, 6.6s, 2022 7,000 7,454,300
Putnam County, WV, Pollution Control Rev.
(Applachian Power Co.), MBIA, 6.6s, 2019 3,200 3,397,824
------------
$ 16,308,679
- --------------------------------------------------------------------------------------
Health Care Revenue - 7.4%
Berkeley County, WV, Building Commission,
Hospital Rev. (City Hospital), 6.5s, 2022 ### $2,500 $ 2,561,675
Monongalia County, WV, Health Facilities Rev.
(Beverly Enterprises, Inc.), 5.625s, 2003 250 247,462
Monongalia County, WV, Health Facilities Rev.
(Beverly Enterprises, Inc.), 5.875s, 2007 500 490,315
Ohio County, WV, County Commission Health
System (Ohio Valley Medical Center), 5.75s, 2013 750 711,368
West Virginia Hospital Finance Authority
(Charleston Area Medical Center), 6.5s, 2023 2,000 2,092,800
West Virginia Hospital Finance Authority (Fairmont
General Hospital), 6.625s, 2019 2,000 2,060,880
West Virginia Hospital Finance Authority (General
Division Medical Building), 7.25s, 2014 2,000 2,160,700
------------
$ 10,325,200
- --------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 13.8%
Braxton County, WV, Solid Waste Disposal
(Weyerhaeuser Co.), 6.5s, 2025 $2,000 $ 2,093,920
Jackson County, WV, Pollution Control Rev.
(Kaiser Aluminum & Chemical Corp.), 6.5s, 2008 3,235 3,238,623
Kanawha County, WV, Commercial Development
Rev. (Kroger Co.), 8s, 2011 1,000 1,076,230
Kanawha County, WV, Commercial Development
Rev. (May Department Stores Co.), 6.5s, 2003 3,000 3,173,010
Kanawha County, WV, Pollution Control Rev.
(Union Carbide Corp.), 8s, 2020 2,000 2,082,620
Monongalia County, WV, Commercial
Development Rev. (Kroger Co.), 7.7s, 2012 2,000 2,171,340
Ohio County, WV, Industrial Development Rev.
(Kroger Co.), 8.125s, 2011 2,000 2,161,700
Putnam County, WV, Industrial Development Rev.
(Rite Aid Corp.), 10.375s, 2002 590 592,537
South Charleston, WV, Pollution Control Rev.
(Union Carbide Corp.), 7.625s, 2005 2,500 2,784,525
------------
$ 19,374,505
- --------------------------------------------------------------------------------------
Insured Health Care Revenue - 7.5%
Harrison County, WV, Building Commission Rev.
(Maplewood Retirement), AMBAC, 5.25s, 2021 $2,625 $ 2,457,866
Monongalia County, WV, Building Commission,
Health Rev. (Monongalia General Hospital),
MBIA, 6.625s, 2011 1,000 1,043,090
Randolph County, WV, Community Health System
Rev. (Davis Health System, Inc.), FSA, 5.2s, 202 1 1,000 919,870
West Virginia Hospital Finance Authority (Cabell
Huntington Hospital), AMBAC, 6.25s, 2019 5,000 5,245,500
West Virginia Hospital Finance Authority (West
Virginia University Hospital), AMBAC, 5s, 2018 1,000 894,560
------------
$ 10,560,886
- --------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 0.9%
Huntington, WV, Housing Corp., Multi-Family Rev.,
FNMA, 7.5s, 2024 $ 800 $ 824,160
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Multi-Family Housing Revenue - continued
Webster County, WV, Housing Development Rev.
(Circlebrook), FHA, 6.35s, 2008 $ 465 $ 480,703
------------
$ 1,304,863
- --------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 0.4%
Virgin Islands Public Finance Authority,
5.625s, 2025 $ 500 $ 474,215
- --------------------------------------------------------------------------------------
Single Family Housing Revenue - 2.6%
Berkeley County, WV, Residential Mortgage Rev.,
7.875s, 2012 $ 145 $ 148,187
Charles Town, WV, Residential Mortgage Rev.,
6.2s, 2011 380 386,521
Mason County, WV, 0s, 2014 1,700 566,185
West Virginia Housing Development Fund,
7.2s, 2020 1,585 1,649,082
West Virginia Housing Development Fund,
5.3s, 2023 1,000 923,260
------------
$ 3,673,235
Turnpike Revenue - 4.4%
- --------------------------------------------------------------------------------------
Puerto Rico Highway & Transportation Authority,
5.5s, 2013 $1,500 $ 1,519,680
West Virginia Parkways, Economic Development
& Tourism Authority, FGIC, 0s, 2006 1,885 1,377,030
West Virginia Parkways, Economic Development
& Tourism Authority, FGIC, 7.452s, 2019 ++++ 3,300 3,297,822
------------
$ 6,194,532
- --------------------------------------------------------------------------------------
Universities - 1.9%
West Virgina University Rev. (West Virginia
Dormitory), AMBAC, 5s, 2022 $2,000 $ 1,769,880
West Virginia University Rev. (West Virginia
University), AMBAC, 5s, 2017 1,000 908,200
------------
$ 2,678,080
- --------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 6.0% Beckley, WV, Industrial Development Rev.
(Beckley Water Co.), 7s, 2017 ### $2,000 $ 2,116,220
Charleston, WV, Sewer Rev., MBIA, 6.5s, 2017 2,260 2,402,019
Fairmont, WV, Waterworks Rev., AMBAC,
5.25s, 2017 1,000 949,910
West Virginia Water Development Authority, FSA,
5s, 2018 1,270 1,141,222
West Virginia Water Development Authority, FSA,
5.25s, 2035 2,000 1,829,060
------------
$ 8,438,431
- --------------------------------------------------------------------------------------
Other - 0.7%
West Virginia Building Commission, Lottery Rev.,
MBIA, 5.25s, 2010 $1,000 $ 1,013,140
- --------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $133,771,555) $137,848,796
- --------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Floating Rate Demand Note - 0.2%
- --------------------------------------------------------------------------------------
Georgia Hospital Financing Authority Rev.
(Hospital Loan Program), due 10/01/99,
at Identified Cost $300 $ 300,000
- --------------------------------------------------------------------------------------
Total Investments (Identified Cost, $134,071,555) $138,148,796
Other Assets, Less Liabilities - 1.7% 2,391,533
- --------------------------------------------------------------------------------------
Net assets - 100.0% $140,540,329
- --------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
Portfolio Footnotes:
++++Inverse floating rate security.
+Restricted security.
###Security segregated as collateral for an open futures contract.
**Non-income producing security in default.
24 - MWV
<PAGE>
Financial Statements
Statements of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Mississippi New York
September 30, 1999 Fund Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments -
Identified cost $75,153,634 $127,530,343
Unrealized appreciation 2,734,769 4,955,886
----------- ------------
Total, at value $77,888,403 $132,486,229
Cash 44,522 90,058
Receivable for Fund shares sold 18,925 205,051
Receivable for investments sold 1,724,908 5,000
Interest receivable 1,352,536 2,081,145
Other assets 996 1,904
----------- ------------
Total assets $81,030,290 $134,869,387
----------- ------------
Liabilities:
Distributions payable $ 181,795 $ 230,585
Payable for Fund shares reacquired 20,965 15,400
Payable for investments purchased 2,524,045 --
Payable for daily variation margin on open future contracts 1,687 2,813
Payable to affiliates -
Management fee 747 1,282
Shareholder servicing agent fee 213 366
Distribution fee and service fee 1,079 1,496
Administrative fee 32 55
Accrued expenses and other liabilities 60,422 78,000
----------- ------------
Total liabilities $ 2,790,985 $ 329,997
----------- ------------
Net assets $78,239,305 $134,539,390
----------- ------------
Net assets consist of:
Paid-in capital $78,740,892 $130,367,644
Unrealized appreciation on investments 2,732,519 4,951,980
Accumulated net realized loss on investments (3,285,761) (773,613)
Accumulated undistributed (distributions in excess of)
net investment income 51,655 (6,621)
----------- ------------
Total $78,239,305 $134,539,390
----------- ------------
Shares of beneficial interest outstanding:
Class A 7,063,132 9,954,254
Class B 1,174,724 2,663,181
Class C -- --
----------- ------------
Total shares of beneficial interest outstanding 8,237,856 12,617,435
----------- ------------
Net assets:
Class A $67,072,807 $106,148,956
Class B 11,166,498 28,390,434
Class C -- --
----------- ------------
Total net assets $78,239,305 $134,539,390
----------- ------------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $9.50 $10.66
----- ------
Offering price per share (100 [divided by] 95.25 of net asset value per share) $9.97 $11.19
----- ------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $9.51 $10.66
----- ------
Class C shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) -- --
----- ------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
North Carolina Pennsylvania
September 30, 1999 Fund Fund
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments -
Identified cost $383,904,865 $45,568,709
Unrealized appreciation 8,661,315 112,115
------------ -----------
Total, at value $392,566,180 $45,680,824
Cash 292,567 86,179
Receivable for Fund shares sold 423,492 62,654
Receivable for investments sold 3,155,328 1,538,297
Interest receivable 6,881,578 694,793
Other assets 5,606 451
------------ -----------
Total assets $403,324,751 $48,063,198
------------ -----------
Liabilities:
Distributions payable $ 696,761 $ 77,140
Payable for Fund shares reacquired 341,543 58,556
Payable for investments purchased 1,471,890 1,539,027
Payable for daily variation margin on open future contracts 8,719 844
Payable to affiliates -
Management fee 3,824 442
Shareholder servicing agent fee 1,093 --
Distribution fee and service fee 5,008 2,400
Administrative fee 164 --
Accrued expenses and other liabilities 140,814 --
------------ ------------
Total liabilities $ 2,669,816 $ 1,678,409
------------ ------------
Net assets $400,654,935 $46,384,789
------------ ------------
Net assets consist of:
Paid-in capital $393,983,268 $47,742,807
Unrealized appreciation on investments 8,650,159 111,240
Accumulated net realized loss on investments (1,694,427) (1,500,603)
Accumulated undistributed (distributions in excess of)
net investment income (284,065) 31,345
------------ -----------
Total $400,654,935 $46,384,789
------------ -----------
Shares of beneficial interest outstanding:
Class A 29,062,749 2,462,673
Class B 4,533,223 2,464,403
Class C 1,300,331 --
------------ -----------
Total shares of beneficial interest outstanding 34,896,303 4,927,076
------------ -----------
Net assets:
Class A $333,705,126 $23,155,897
Class B 52,028,032 23,228,892
Class C 14,921,777 --
------------ -----------
Total net assets $400,654,935 $46,384,789
------------ -----------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $11.48 $9.40
------ -----
Offering price per share (100 [divided by] 95.25 of net asset value per share) $12.05 $9.87
------ -----
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $11.48 $9.43
------ -----
Class C shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $11.48 --
------ -----
</TABLE>
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, Class
B, and Class C shares.
See notes to financial statements.
25
<PAGE>
Financial Statements - continued
Statements of Assets and Liabilities (Unaudited) - continued
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
South Carolina
September 30, 1999 Fund
- ------------------------------------------------------------------------------------------------
<S> <C>
Assets:
Investments -
Identified cost $160,609,290
Unrealized appreciation 2,542,352
------------
Total, at value $163,151,642
Cash 68,735
Receivable for Fund shares sold 91,228
Receivable for investments sold 6,771,426
Interest receivable 2,395,599
Other assets 2,319
------------
Total assets $172,480,949
------------
Liabilities:
Distributions payable $ 316,145
Payable for Fund shares reacquired 164,907
Payable for investments purchased 6,310,784
Payable for daily variation margin on open future contracts 3,656
Payable to affiliates -
Management fee 1,580
Shareholder servicing agent fee 451
Distribution and service fee 2,195
Administrative fee 67
Accrued expenses and other liabilities 81,833
------------
Total liabilities $ 6,881,618
------------
Net assets $165,599,331
------------
Net assets consist of:
Paid-in capital $162,893,736
Unrealized appreciation on investments 2,537,352
Accumulated undistributed net realized
gain (loss) on investments 224,187
Accumulated undistributed (distributions in excess of)
net investment income (55,944)
------------
Total $165,599,331
------------
Shares of beneficial interest outstanding:
Class A 11,109,287
Class B 2,958,542
Class C --
------------
Total shares of beneficial interest outstanding 14,067,829
------------
Net assets:
Class A $130,789,693
Class B 34,809,638
Class C --
------------
Total net assets $165,599,331
------------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $11.77
------
Offering price per share (100 [divided by] 95.25 of net asset value per share) $12.36
------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $11.77
------
Class C shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) --
------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Tennessee Virginia
September 30, 1999 Fund Fund
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments -
Identified cost $ 125,486,843 $366,440,191
Unrealized appreciation 1,772,067 2,937,748
------------- ------------
Total, at value $ 127,258,910 $369,377,939
Cash 80,258 91,659
Receivable for Fund shares sold 23,296 258,259
Receivable for investments sold 1,060,215 8,694,552
Interest receivable 1,796,548 6,057,712
Other assets 1,667 5,338
------------- ------------
Total assets $ 130,220,894 $384,485,459
------------- ------------
Liabilities:
Distributions payable $ 253,528 $ 790,065
Payable for Fund shares reacquired 39,927 124,023
Payable for investments purchased -- 6,156,107
Payable for daily variation margin on open future contracts 2,812 8,438
Payable to affiliates -
Management fee 1,239 3,597
Shareholder servicing agent fee 354 1,028
Distribution and service fee 1,644 4,277
Administrative fee 53 154
Accrued expenses and other liabilities 78,042 117,933
------------- ------------
Total liabilities $ 377,599 $ 7,205,622
------------- ------------
Net assets $ 129,843,295 $377,279,837
------------- ------------
Net assets consist of:
Paid-in capital $ 127,515,948 $375,626,130
Unrealized appreciation on investments 1,768,161 2,926,342
Accumulated undistributed net realized
gain (loss) on investments 515,757 (368,173)
Accumulated undistributed (distributions in excess of)
net investment income 43,429 (904,462)
------------- ------------
Total $ 129,843,295 $377,279,837
------------- ------------
Shares of beneficial interest outstanding:
Class A 10,410,848 30,776,818
Class B 2,223,239 2,991,561
Class C -- 485,982
------------- ------------
Total shares of beneficial interest outstanding 12,634,087 34,254,361
------------- ------------
Net assets:
Class A $ 107,005,900 $338,989,028
Class B 22,837,395 32,937,140
Class C -- 5,353,669
------------- ------------
Total net assets $ 129,843,295 $377,279,837
------------- ------------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $10.28 $11.01
------ ------
Offering price per share (100 [divided by] 95.25 of net asset value per share) $10.79 $11.56
------ ------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $10.27 $11.01
------ ------
Class C shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) -- $11.02
------ ------
<CAPTION>
- -----------------------------------------------------------------------------------------------
West Virginia
September 30, 1999 Fund
- -----------------------------------------------------------------------------------------------
<S> <C>
Assets:
Investments -
Identified cost $134,071,555
Unrealized appreciation 4,077,241
------------
Total, at value $138,148,796
Cash 3,167
Receivable for Fund shares sold 232,545
Receivable for investments sold 35,000
Interest receivable 2,566,782
Other assets 1,924
------------
Total assets $140,988,214
------------
Liabilities:
Distributions payable $ 264,343
Payable for Fund shares reacquired 95,729
Payable for investments purchased --
Payable for daily variation margin on open future contracts 3,094
Payable to affiliates -
Management fee 1,339
Shareholder servicing agent fee 383
Distribution and service fee 1,627
Administrative fee 57
Accrued expenses and other liabilities 81,313
------------
Total liabilities $ 447,885
------------
Net assets $140,540,329
------------
Net assets consist of:
Paid-in capital $139,859,938
Unrealized appreciation on investments 4,073,085
Accumulated undistributed net realized
gain (loss) on investments (2,908,023)
Accumulated undistributed (distributions in excess of)
net investment income (484,671)
------------
Total $140,540,329
------------
Shares of beneficial interest outstanding:
Class A 11,188,003
Class B 1,459,382
Class C --
------------
Total shares of beneficial interest outstanding 12,647,385
------------
Net assets:
Class A $124,329,262
Class B 16,211,067
Class C --
------------
Total net assets $140,540,329
------------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $11.11
------
Offering price per share (100 [divided by] 95.25 of net asset value per share) $11.66
------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $11.11
------
Class C shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) --
------
</TABLE>
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, Class
B, and Class C shares.
See notes to financial statements.
26
<PAGE>
Financial Statements - continued
Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Mississippi New York North Carolina Pennsylvania
Six Months Ended September 30, 1999 Fund Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income:
Interest income $ 2,232,887 $ 4,094,398 $ 12,205,563 $ 1,259,918
------------ ------------ ------------- ------------
Expenses -
Management fee $ 213,942 $ 386,147 $ 1,147,506 $ 128,111
Trustees' compensation 9,286 9,927 9,626 9,264
Shareholder servicing agent fee 38,918 70,232 208,715 23,318
Distribution and service fee (Class A) -- 138,773 612,051 --
Distribution and service fee (Class B) 45,534 147,232 263,143 96,625
Distribution and service fee (Class C) -- -- 75,281 --
Administrative fee 5,838 10,535 31,307 3,495
Custodian fee 15,786 22,553 63,112 10,307
Printing 2,639 4,860 12,555 1,718
Postage 1,546 3,176 7,295 816
Auditing fees 15,341 13,841 15,342 15,341
Legal fees 3,766 1,038 3,581 5,571
Miscellaneous 33,185 28,937 83,695 23,342
------------ ------------ ------------- ------------
Total expenses $ 385,781 $ 837,251 $ 2,533,209 $ 317,908
Fees paid indirectly (5,842) (18,287) (38,803) (4,211)
Reduction of expenses by investment adviser (64,719) (116,479) (346,421) (127,708)
------------ ------------ ------------- ------------
Net expenses $ 315,220 $ 702,485 $ 2,147,985 $ 185,989
------------ ------------ ------------- ------------
Net investment income $ 1,917,667 $ 3,391,913 $ 10,057,578 $ 1,073,929
------------ ------------ ------------- ------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ (80,024) $ (293,715) $ (818,445) $ (75,005)
Futures contracts (5,482) (9,168) (26,087) 43,379
------------ ------------ ------------- ------------
Net realized loss on investments $ (85,506) $ (302,883) $ (844,532) $ (31,626)
------------ ------------ ------------- ------------
Change in unrealized depreciation -
Investments $ (3,395,614) $ (7,449,333) $ (22,436,587) $ (2,375,639)
Futures contracts (2,250) (3,906) (11,156) (875)
------------ ------------ ------------- ------------
Net unrealized loss on investments $ (3,397,864) $ (7,453,239) $ (22,447,743) $ (2,376,514)
------------ ------------ ------------- ------------
Net realized and unrealized loss on investments $ (3,483,370) $ (7,756,122) $ (23,292,275) $ (2,408,140)
------------ ------------ ------------- ------------
Decrease in net assets from operations $ (1,565,703) $ (4,364,209) $ (13,234,697) $ (1,334,211)
============ ============ ============= ============
</TABLE>
See notes to financial statements.
27
<PAGE>
Financial Statements - continued
Statements of Operations (Unaudited) - continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
South Carolina Tennessee Virginia West Virginia
Six Months Ended September 30, 1999 Fund Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income:
Interest income $ 4,978,518 $ 3,878,784 $ 11,481,047 $ 4,342,512
------------- ------------ ------------- ------------
Expenses -
Management fee $ 481,152 $ 381,125 $ 1,083,649 $ 402,111
Trustees' compensation 9,384 9,200 9,667 9,535
Shareholder servicing agent fee 87,511 69,320 197,099 73,139
Distribution and service fee (Class A) 243,613 201,859 618,626 226,804
Distribution and service fee (Class B) 179,072 116,460 173,592 83,372
Distribution and service fee (Class C) -- -- 29,884 --
Administrative fee 13,127 10,398 29,564 10,971
Custodian fee 29,119 25,658 62,566 24,126
Printing 4,046 2,999 12,167 4,581
Postage 2,900 2,058 7,599 2,586
Auditing fees 15,341 14,091 15,591 15,341
Legal fees 2,980 2,212 3,469 3,942
Miscellaneous 30,392 37,132 60,794 30,279
------------- ------------ ------------- ------------
Total expenses $ 1,098,637 $ 872,512 $ 2,304,267 $ 886,787
Fees paid indirectly (13,167) (7,097) (36,595) (9,444)
Reduction of expenses by investment adviser (145,136) (115,135) (327,095) (121,406)
------------- ------------ ------------- ------------
Net expenses $ 940,334 $ 750,280 $ 1,940,577 $ 755,937
------------- ------------ ------------- ------------
Net investment income $ 4,038,184 $ 3,128,504 $ 9,540,470 $ 3,586,575
------------- ------------ ------------- ------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ (295,668) $ (299,447) $ 556,850 $ (105,996)
Futures contracts 93,304 (9,565) 786,194 (7,364)
------------- ------------ ------------- ------------
Net realized gain (loss) on investments $ (202,364) $ (309,012) $ 1,343,044 $ (113,360)
------------- ------------ ------------- ------------
Change in unrealized depreciation -
Investments $ (10,036,881) $ (7,479,158) $ (21,887,424) $ (8,001,968)
Futures contracts (5,000) (3,906) (11,406) (4,156)
------------- ------------ ------------- ------------
Net unrealized loss on investments $ (10,041,881) $ (7,483,064) $ (21,898,830) $ (8,006,124)
------------- ------------ ------------- ------------
Net realized and unrealized loss on investments $ (10,244,245) $ (7,792,076) $ (20,555,786) $ (8,119,484)
------------- ------------ ------------- ------------
Decrease in net assets from operations $ (6,206,061) $ (4,663,572) $ (11,015,316) $ (4,532,909)
============= ============ ============= ============
</TABLE>
See notes to financial statements.
28
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Mississippi
Six Months Ended September 30, 1999 Fund
- ------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 1,917,667
Net realized loss on investments (85,506)
Net unrealized loss on investments (3,397,864)
------------
Decrease in net assets from operations $ (1,565,703)
------------
Distributions declared to shareholders -
From net investment income (Class A) $ (1,701,240)
From net investment income (Class B) (247,763)
From net investment income (Class C) --
------------
Total distributions declared to shareholders $ (1,949,003)
------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 7,840,889
Net asset value of shares issued to shareholders
in reinvestment of distributions 835,098
Cost of shares reacquired (5,256,248)
------------
Net increase (decrease) in net assets from
Fund share transactions $ 3,419,739
------------
Total increase (decrease) in net assets $ (94,967)
Net assets:
At beginning of period 78,334,272
------------
At end of period $ 78,239,305
============
Accumulated undistributed (distributions in excess of) net investment
income included in net assets at end of period $ 51,655
============
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
New York North Carolina Pennsylvania
Six Months Ended September 30, 1999 Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 3,391,913 $ 10,057,578 $ 1,073,929
Net realized loss on investments (302,883) (844,532) (31,626)
Net unrealized loss on investments (7,453,239) (22,447,743) (2,376,514)
------------- ------------- ------------
Decrease in net assets from operations $ (4,364,209) $ (13,234,697) $ (1,334,211)
------------- ------------- ------------
Distributions declared to shareholders -
From net investment income (Class A) $ (2,769,344) $ (8,471,314) $ (565,844)
From net investment income (Class B) (624,507) (1,104,669) (502,647)
From net investment income (Class C) -- (315,791) --
------------- ------------- ------------
Total distributions declared to shareholders $ (3,393,851) $ (9,891,774) $ (1,068,491)
------------- ------------- ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 6,091,912 $ 16,078,932 $ 6,527,546
Net asset value of shares issued to shareholders
in reinvestment of distributions 1,988,134 5,722,117 617,477
Cost of shares reacquired (12,957,032) (28,713,063) (4,035,603)
------------- ------------- ------------
Net increase (decrease) in net assets from
Fund share transactions $ (4,876,986) $ (6,912,014) $ 3,109,420
------------- ------------- ------------
Total increase (decrease) in net assets $ (12,635,046) $ (30,038,485) $ 706,718
Net assets:
At beginning of period 147,174,436 430,693,420 45,678,071
------------- ------------- ------------
At end of period $ 134,539,390 $ 400,654,935 $ 46,384,789
============= ============= ============
Accumulated undistributed (distributions in excess of) net investment
income included in net assets at end of period $ (6,621) $ (284,065) $ 31,345
============= ============= ============
</TABLE>
See notes to financial statements.
29
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets (Unaudited) - continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
South Carolina
Six Months Ended September 30, 1999 Fund
- -------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 4,038,184
Net realized gain (loss) on investments (202,364)
Net unrealized loss on investments (10,041,881)
-------------
Decrease in net assets from operations $ (6,206,061)
-------------
Distributions declared to shareholders -
From net investment income (Class A) $ (3,267,548)
From net investment income (Class B) (724,767)
From net investment income (Class C) --
-------------
Total distributions declared to shareholders $ (3,992,315)
-------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 6,305,795
Net asset value of shares issued to shareholders
in reinvestment of distributions 2,094,585
Cost of shares reacquired (14,615,058)
-------------
Net decrease in net assets from
Fund share transactions $ (6,214,678)
-------------
Total decrease in net assets $ (16,413,054)
Net assets:
At beginning of period 182,012,385
-------------
At end of period $ 165,599,331
=============
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ (55,944)
=============
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Tennessee Virginia West Virginia
Six Months Ended September 30, 1999 Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 3,128,504 $ 9,540,470 $ 3,586,575
Net realized gain (loss) on investments (309,012) 1,343,044 (113,360)
Net unrealized loss on investments (7,483,064) (21,898,830) (8,006,124)
------------- ------------- -------------
Decrease in net assets from operations $ (4,663,572) $ (11,015,316) $ (4,532,909)
------------- ------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (2,681,304) $ (8,595,427) $ (3,204,076)
From net investment income (Class B) (465,960) (731,515) (358,191)
From net investment income (Class C) -- (125,182) --
------------- ------------- -------------
Total distributions declared to shareholders $ (3,147,264) $ (9,452,124) $ (3,562,267)
------------- ------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 8,564,771 $ 13,432,959 $ 4,276,312
Net asset value of shares issued to shareholders
in reinvestment of distributions 1,610,718 4,678,505 1,992,247
Cost of shares reacquired (12,582,588) (28,412,112) (8,254,863)
------------- ------------- -------------
Net decrease in net assets from
Fund share transactions $ (2,407,099) $ (10,300,648) $ (1,986,304)
------------- ------------- -------------
Total decrease in net assets $ (10,217,935) $ (30,768,088) $ (10,081,480)
Net assets:
At beginning of period 140,061,230 408,047,925 150,621,809
------------- ------------- -------------
At end of period $ 129,843,295 $ 377,279,837 $ 140,540,329
============= ============= =============
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ 43,429 $ (904,462) $ (484,671)
============= ============= =============
</TABLE>
See notes to financial statements.
30
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets (Unaudited) - continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Mississippi
Year Ended March 31, 1999 Fund
- -------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 3,716,756
Net realized gain on investments 94,562
Net unrealized gain (loss) on investments 308,084
------------
Increase in net assets from operations $ 4,119,402
------------
Distributions declared to shareholders -
From net investment income (Class A) $ (3,287,679)
From net investment income (Class B) (454,600)
From net investment income (Class C) --
In excess of net investment income (Class A) --
In excess of net investment income (Class B) --
------------
Total distributions declared to shareholders $ (3,742,279)
------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 7,347,508
Net asset value of shares issued to shareholders
in reinvestment of distributions 1,634,892
Cost of shares reacquired (7,804,067)
------------
Net increase (decrease) in net assets from
Fund share transactions $ 1,178,333
------------
Total increase (decrease) in net assets $ 1,555,456
Net assets:
At beginning of period 76,778,816
------------
At end of period $ 78,334,272
============
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ 82,991
============
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
New York North Carolina Pennsylvania
Year Ended March 31, 1999 Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 6,933,079 $ 20,147,252 $ 1,854,082
Net realized gain on investments 2,321,410 5,141,594 190,272
Net unrealized gain (loss) on investments (2,186,539) (5,778,205) 119,606
------------- -------------- ------------
Increase in net assets from operations $ 7,067,950 $ 19,510,641 $ 2,163,960
------------- -------------- ------------
Distributions declared to shareholders -
From net investment income (Class A) $ (5,734,216) $ (17,636,624) $ (968,779)
From net investment income (Class B) (1,208,410) (1,992,249) (895,842)
From net investment income (Class C) -- (445,446) --
In excess of net investment income (Class A) (3,870) -- --
In excess of net investment income (Class B) (815) -- --
------------- -------------- ------------
Total distributions declared to shareholders $ (6,947,311) $ (20,074,319) $ (1,864,621)
------------- -------------- ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 29,293,927 $ 95,174,583 $ 9,693,546
Net asset value of shares issued to shareholders
in reinvestment of distributions 4,020,370 11,591,211 1,050,475
Cost of shares reacquired (32,254,619) (108,484,241) (4,833,679)
------------- -------------- ------------
Net increase (decrease) in net assets from
Fund share transactions $ 1,059,678 $ (1,718,447) $ 5,910,342
------------- -------------- ------------
Total increase (decrease) in net assets $ 1,180,317 $ (2,282,125) $ 6,209,681
Net assets:
At beginning of period 145,994,119 432,975,545 39,468,390
------------- -------------- ------------
At end of period $ 147,174,436 $ 430,693,420 $ 45,678,071
============= ============== ============
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ (4,683) $ (449,869) $ 25,907
============= ============== ============
</TABLE>
See notes to financial statements.
31
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets (Unaudited) - continued
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
South Carolina Tennessee
Year Ended March 31, 1999 Fund Fund
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 7,935,924 $ 6,013,864
Net realized gain on investments 1,589,817 1,051,618
Net unrealized loss on investments (2,199,147) (1,234,421)
------------- -------------
Increase in net assets from operations $ 7,326,594 $ 5,831,061
------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (6,682,276) $ (5,137,762)
From net investment income (Class B) (1,253,648) (821,549)
From net investment income (Class C) -- --
From net realized gain on investments (Class A) -- (337,988)
From net realized gain on investments (Class B) -- (64,567)
In excess of net investment income (Class A) (23,065) --
In excess of net investment income (Class B) (4,327) --
------------- -------------
Total distributions declared to shareholders $ (7,963,316) $ (6,361,866)
------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 21,347,777 $ 23,846,170
Net asset value of shares issued to shareholders
in reinvestment of distributions 4,185,898 3,141,165
Cost of shares reacquired (19,791,022) (13,464,339)
------------- -------------
Net increase (decrease) in net assets from
Fund share transactions $ 5,742,653 $ 13,522,996
------------- -------------
Total increase (decrease) in net assets $ 5,105,931 $ 12,992,191
Net assets:
At beginning of period 176,906,454 127,069,039
------------- -------------
At end of period $ 182,012,385 $ 140,061,230
============= =============
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ (101,813) $ 62,189
============= =============
<CAPTION>
- -------------------------------------------------------------------------------------------------
Virginia West Virginia
Year Ended March 31, 1999 Fund Fund
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 19,019,822 $ 6,968,680
Net realized gain on investments 5,086,588 486,002
Net unrealized loss on investments (5,493,034) (796,403)
------------- -------------
Increase in net assets from operations $ 18,613,376 $ 6,658,279
------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (17,358,181) $ (6,282,387)
From net investment income (Class B) (1,394,357) (686,293)
From net investment income (Class C) (179,277) --
From net realized gain on investments (Class A) -- --
From net realized gain on investments (Class B) -- --
In excess of net investment income (Class A) -- (26,990)
In excess of net investment income (Class B) -- (2,948)
------------- -------------
Total distributions declared to shareholders $ (18,931,815) $ (6,998,618)
------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 56,562,932 $ 15,549,189
Net asset value of shares issued to shareholders
in reinvestment of distributions 9,409,188 3,876,569
Cost of shares reacquired (66,614,366) (13,937,487)
------------- -------------
Net increase (decrease) in net assets from
Fund share transactions $ (642,246) $ 5,488,271
------------- -------------
Total increase (decrease) in net assets $ (960,685) $ 5,147,932
Net assets:
At beginning of period 409,008,610 145,473,877
------------- -------------
At end of period $ 408,047,925 $ 150,621,809
============= =============
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ (992,808) $ (508,979)
============= =============
</TABLE>
See notes to financial statements.
32
<PAGE>
Financial Statements - continued
Financial Highlights
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Mississippi Fund
- -------------------------------------------------------------------------------------------------------
Six Months
Ended
September 30,
1999
----------------
(Unaudited)
- -------------------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.93
-------
Income from investment operations# -
Net investment income[sec] $ 0.24
Net realized and unrealized gain (loss) on
investments (0.42)
-------
Total from investment operations $ (0.18)
-------
Less distributions declared to shareholders -
From net investment income $ (0.25)
From net realized gain on investments --
In excess of net investment income --
In excess of net realized gain on investments --
-------
Total distributions declared to shareholders $ (0.25)
-------
Net asset value - end of period $ 9.50
-------
Total return++ (1.85)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.71%+
Net investment income 5.02%+
Portfolio turnover 8%
Net assets at end of period (000 omitted) $67,073
[sec]Subject to reimbursement, the Fund pays MFS a fee not greater than 0.40% of average daily net
assets pursuant to a temporary expense arrangement in which MFS has voluntarily agreed to pay
all of the Fund's operating expenses exclusive of management and distribution and service fees
for certain of the periods indicated. In addition, the investment adviser voluntarily waived
a portion of its fee for certain of the periods indicated. To the extent actual expenses were
over this limitation and the waivers had not been in place, the net investment income per share
and the ratios would have been:
Net investment income $ 0.23
Ratios (to average net assets):
Expenses## 0.88%+
Net investment income 4.85%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon
the amount of cash maintained by the Fund with its custodian and dividend disbursing agent. For
fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction
for this expense offset arrangement.
++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.
<CAPTION>
Year Ended March 31,
---------------------------------
1999 1998 1997
------ ------ ---------
<S> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.88 $ 9.35 $ 9.35
------ ------ ---------
Income from investment operations# -
Net investment income[sec] $ 0.49 $ 0.49 $ 0.48
Net realized and unrealized gain (loss) on
investments 0.06 0.52 0.00+++
------ ------ ---------
Total from investment operations $ 0.55 $ 1.01 $ 0.48
------ ------ ---------
Less distributions declared to shareholders -
From net investment income $(0.50) $(0.48) $ (0.48)
From net realized gain on investments -- -- --
In excess of net investment income -- -- --
In excess of net realized gain on investments -- -- --
------- ------- ---------
Total distributions declared to shareholders $(0.50) $(0.48) $ (0.48)
------- ------- ---------
Net asset value - end of period $ 9.93 $ 9.88 $ 9.35
------- ------- ---------
Total return++ 5.62% 11.02% 5.22%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.73% 0.78% 0.87%
Net investment income 4.94% 5.04% 5.14%
Portfolio turnover 6% 18% 17%
Net assets at end of period (000 omitted) $66,869 $66,061 $ 66,630
[sec]Subject to reimbursement, the Fund pays MFS a fee not greater than 0.40% of average daily net assets
pursuant to a temporary expense arrangement in which MFS has voluntarily agreed to pay all of the
Fund's operating expenses exclusive of management and distribution and service fees for certain of
the periods indicated. In addition, the investment adviser voluntarily waived a portion of its fee
for certain of the periods indicated. To the extent actual expenses were over this limitation and
the waivers had not been in place, the net investment income per share and the ratios would have
been:
Net investment income $ 0.48 $ 0.48 --
Ratios (to average net assets):
Expenses## 0.85% 0.85% --
Net investment income 4.82% 4.97% --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the
amount of cash maintained by the Fund with its custodian and dividend disbursing agent. For fiscal
years ending after September 1, 1995, the Fund's expenses are calculated without reduction for
this expense offset arrangement.
++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.
<CAPTION>
Year Ended March 31,
--------------------------
1996 1995
--------------------------
<S> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.15 $ 9.19
--------- ---------
Income from investment operations# -
Net investment income[sec] $ 0.52 $ 0.54
Net realized and unrealized gain (loss) on
investments 0.20 (0.01)
--------- ---------
Total from investment operations $ 0.72 $ 0.53
--------- ---------
Less distributions declared to shareholders -
From net investment income $ (0.52) $ (0.54)
From net realized gain on investments -- (0.00)+++
In excess of net investment income (0.00)+++ (0.00)+++
In excess of net realized gain on investments -- (0.03)
--------- ---------
Total distributions declared to shareholders $ (0.52) $ (0.57)
--------- ---------
Net asset value - end of period $ 9.35 $ 9.15
--------- ---------
Total return++ 7.99% 6.08%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.45% 0.22%
Net investment income 5.51% 5.99%
Portfolio turnover 31% 47%
Net assets at end of period (000 omitted) $ 74,435 $ 79,033
[sec]Subject to reimbursement, the Fund pays MFS a fee not greater than 0.40% of average
daily net assets pursuant to a temporary expense arrangement in which MFS has
voluntarily agreed to pay all of the Fund's operating expenses exclusive of
management and distribution and service fees for certain of the periods indicated.
In addition, the investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. To the extent actual expenses were over this
limitation and the waivers had not been in place, the net investment income per
share and the ratios would have been:
Net investment income $ 0.48 $ 0.48
Ratios (to average net assets):
Expenses## 0.88% 0.93%
Net investment income 5.08% 5.28%
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee
based upon the amount of cash maintained by the Fund with its custodian and
dividend disbursing agent. For fiscal years ending after September 1, 1995, the
Fund's expenses are calculated without reduction for this expense offset arrangement.
++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.
</TABLE>
See notes to financial statements.
33
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Mississippi Fund
- ---------------------------------------------------------------------------------
Six Months Year Ended
Ended March 31,
September 30, ------------
1999 1999
--------------------------
(Unaudited)
- ---------------------------------------------------------------------------------
Class B
- ---------------------------------------------------------------------------------
<S> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.94 $ 9.89
--------- ------
Income from investment operations# -
Net investment income[sec] $ 0.21 $ 0.41
Net realized and unrealized gain (loss) on
investments (0.43) 0.06
--------- ------
Total from investment operations $ (0.22) $ 0.47
--------- ------
Less distributions declared to shareholders -
From net investment income $ (0.21) $ (0.42)
From net realized gain on investments -- --
In excess of net investment come -- --
In excess of net realized gain on investments -- --
--------- -------
Total distributions declared to shareholders $ (0.21) $ (0.42)
--------- -------
Net asset value - end of period $ 9.51 $ 9.94
--------- -------
Total return (2.23)%++ 4.80%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.50%+ 1.51%
Net investment income 4.23%+ 4.16%
Portfolio turnover 8% 6%
Net assets at end of period (000 omitted) $ 11,166 $11,465
[sec]Subject to reimbursement, the Fund pays MFS a fee not greater than 0.40%
of average daily net assets pursuant to a temporary expense arrangement in
which MFS has voluntarily agreed to pay all of the Fund's operating expenses
exclusive of management and distribution and service fees for certain of the
periods indicated. In addition, the investment adviser voluntarily waived a
portion of its fee for certain of the periods indicated. To the extent
actual expenses were over this limitation and the waivers had not been in
place, the net investment income per share and the ratios would have been:
Net investment income $ 0.20 $ 0.40
Ratios (to average net assets):
Expenses## 1.67%+ 1.63%
Net investment income 4.06%+ 4.04%
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01 #Per share data are based on average
shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian
fee based upon the amount of cash maintained by the Fund with its custodian
and dividend disbursing agent. For fiscal years ending after September 1,
1995, the Fund's expenses are calculated without reduction for this expense
offset arrangement.
<CAPTION>
Year Ended March 31,
-------------------------------------------------------
1998 1997 1996 1995
-------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.36 $ 9.36 $ 9.16 $ 9.19
------- ------- ------- ------
Income from investment operations# -
Net investment income[sec] $ 0.41 $ 0.40 $ 0.44 $ 0.45
Net realized and unrealized gain (loss) on
investments 0.53 0.00+++ 0.20 0.00+++
------- ------- ------- ------
Total from investment operations $ 0.94 $ 0.40 $ 0.64 $ 0.45
------- ------- ------- ------
Less distributions declared to shareholders -
From net investment income $ (0.41) $ (0.40) $ (0.44) $(0.45)
From net realized gain on investments -- -- -- (0.00)+++
In excess of net investment come -- -- (0.00)+++ (0.00)+++
In excess of net realized gain on investments -- -- -- (0.03)
------- ------- ------- ------
Total distributions declared to shareholders $ (0.41) $ (0.40) $ (0.44) $(0.48)
------- ------- ------- ------
Net asset value - end of period $ 9.89 $ 9.36 $ 9.36 $ 9.16
------- ------- ------- ------
Total return 10.15% 4.33% 7.11% 5.14%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.56% 1.72% 1.28% 1.23%
Net investment income 4.26% 4.29% 4.67% 4.97%
Portfolio turnover 18% 17% 31% 47%
Net assets at end of period (000 omitted) $10,717 $11,014 $11,475 $9,429
[sec]Subject to reimbursement, the Fund pays MFS a fee not greater than 0.40% of average daily net assets
pursuant to a temporary expense arrangement in which MFS has voluntarily agreed to pay all of the Fund's
operating expenses exclusive of management and distribution and service fees for certain of the
periods indicated. In addition, the investment adviser voluntarily waived a portion of its fee for certain
of the periods indicated. To the extent actual expenses were over this limitation and the waivers had not
been in place, the net investment income per share and the ratios would have been:
Net investment income $ 0.40 -- $ 0.40 $ 0.38
Ratios (to average net assets):
Expenses## 1.63% -- 1.71% 2.01%
Net investment income 4.19% -- 4.24% 4.19%
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01 #Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of
cash maintained by the Fund with its custodian and dividend disbursing agent. For fiscal years ending after
September 1, 1995, the Fund's expenses are calculated without reduction for this expense offset
arrangement.
</TABLE>
See notes to financial statements.
34
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
New York Fund
- --------------------------------------------------------------------
Six Months
Ended
September 30,
1999
-------------
(Unaudited)
- --------------------------------------------------------------------
Class A
- --------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.27
---------
Income from investment operations# -
Net investment income[sec] $ 0.27
Net realized and unrealized gain (loss) on
investments (0.61)
---------
Total from investment operations $ (0.34)
---------
Less distributions declared to shareholders -
From net investment income $ (0.27)
In excess of net investment income --
In excess of net realized gain on investments --
---------
Total distributions declared to shareholders $ (0.27)
---------
Net asset value - end of period $ 10.66
---------
Total return++ (3.02)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.86%+
Net investment income 4.97%+
Portfolio turnover 30%
Net assets at end of period (000 omitted) $ 106,149
[sec]The investment adviser voluntarily waived a portion of its fee
for certain of the periods indicated. If this fee had been
incurred by the Fund, the net investment income per share and
the ratios would have been:
Net investment income $ 0.26
Ratios (to average net assets):
Expenses## 1.03%+
Net investment income 4.80%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund
with its custodian and dividend disbursing agent. For fiscal years
ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expense offset arrangement
++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.
<CAPTION>
Year Ended March 31,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.26 $ 10.60 $ 10.66 $ 10.49 $ 10.50
--------- -------- -------- -------- --------
Income from investment operations# -
Net investment income[sec] $ 0.56 $ 0.57 $ 0.55 $ 0.55 $ 0.56
Net realized and unrealized gain (loss) on
investments 0.01 0.64 (0.06) 0.17 0.05
--------- -------- -------- -------- --------
Total from investment operations $ 0.57 $ 1.21 $ 0.49 $ 0.72 $ 0.61
--------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.56) $ (0.55) $ (0.55) $ (0.55) $ (0.56)
In excess of net investment income (0.00)+++ -- -- (0.00)+++ (0.01)
In excess of net realized gain on investments -- -- -- -- (0.05)
--------- -------- -------- -------- --------
Total distributions declared to shareholders $ (0.56) $ (0.55) $ (0.55) $ (0.55) $ (0.62)
--------- -------- -------- -------- --------
Net asset value - end of period $ 11.27 $ 11.26 $ 10.60 $ 10.66 $ 10.49
--------- -------- -------- -------- --------
Total return++ 5.14% 11.59% 4.68% 6.98% 6.03%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.93% 1.03% 1.11% 1.10% 1.07%
Net investment income 4.93% 5.14% 5.18% 5.09% 5.43%
Portfolio turnover 26% 41% 64% 102% 147%
Net assets at end of period (000 omitted) $ 116,767 $119,376 $121,588 $134,449 $146,597
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.55 $ 0.56 -- $ 0.54 $ 0.55
Ratios (to average net assets):
Expenses## 1.05% 1.10% -- 1.20% 1.18%
Net investment income 4.81% 5.07% -- 4.99% 5.31%
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash maintained
by the Fund with its custodian and dividend disbursing agent. For fiscal years ending after September 1, 1995, the Fund's
expenses are calculated without reduction for this expense offset arrangement
++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.
</TABLE>
See notes to financial statements.
35
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
New York Fund
- --------------------------------------------------------------------
Six Months
Ended
September 30,
1999
-------------
(Unaudited)
- --------------------------------------------------------------------
Class B
- --------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.27
---------
Income from investment operations# -
Net investment income[sec] $ 0.23
Net realized and unrealized gain (loss) on
investments (0.61)
---------
Total from investment operations $ (0.38)
---------
Less distributions declared to shareholders -
From net investment income $ (0.23)
In excess of net investment income --
In excess of net realized gain on investments --
---------
Total distributions declared to shareholders $ (0.23)
---------
Net asset value - end of period $ 10.66
---------
Total return (3.38)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.61%+
Net investment income 4.22%+
Portfolio turnover 30%
Net assets at end of period (000 omitted) $ 28,390
[sec]The investment adviser voluntarily waived a portion of its fee
for certain of the periods indicated. If this fee had been
incurred by the Fund, the net investment income per share and
the ratios would have been:
Net investment income $ 0.22
Ratios (to average net assets):
Expenses## 1.78%+
Net investment income 4.05%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the
Fund's custodian fee based upon the amount of cash maintained
by the Fund with its custodian and dividend disbursing agent.
For fiscal years ending after September 1, 1995, the Fund's
expenses are calculated without reduction for this expense
offset arrangement.
<CAPTION>
Year Ended March 31,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.26 $ 10.59 $ 10.66 $ 10.49 $ 10.50
--------- -------- -------- -------- --------
Income from investment operations# -
Net investment income[sec] $ 0.47 $ 0.49 $ 0.47 $ 0.47 $ 0.47
Net realized and unrealized gain (loss) on
investments 0.01 0.64 (0.07) 0.17 0.05
--------- -------- -------- -------- --------
Total from investment operations $ 0.48 $ 1.13 $ 0.40 $ 0.64 $ 0.52
--------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.47) $ (0.46) $ (0.47) $ (0.47) $ (0.47)
In excess of net investment income (0.00)+++ -- -- (0.00)+++ (0.01)
In excess of net realized gain on investments -- -- -- -- (0.05)
--------- -------- -------- -------- --------
Total distributions declared to shareholders $ (0.47) $ (0.46) $ (0.47) $ (0.47) $ (0.53)
--------- -------- -------- -------- --------
Net asset value - end of period $ 11.27 $ 11.26 $ 10.59 $ 10.66 $ 10.49
--------- -------- -------- -------- --------
Total return 4.46% 10.78% 3.77% 6.10% 5.17%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.68% 1.78% 1.92% 1.92% 1.89%
Net investment income 4.18% 4.39% 4.37% 4.27% 4.58%
Portfolio turnover 26% 41% 64% 102% 147%
Net assets at end of period (000 omitted) $ 30,408 $ 26,618 $ 26,724 $ 28,068 $ 11,885
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had
been incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.46 $ 0.48 -- -- $ 0.47
Ratios (to average net assets):
Expenses## 1.80% 1.85% -- -- 1.91%
Net investment income 4.06% 4.32% -- -- 4.57%
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash
maintained by the Fund with its custodian and dividend disbursing agent. For fiscal years ending after
September 1, 1995, the Fund's expenses are calculated without reduction for this expense offset arrangement.
</TABLE>
See notes to financial statements.
36
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
North Carolina Fund
- --------------------------------------------------------------------------------
Six Months Year Ended
Ended March 31,
September 30, ---------
1999 1999
----------- ---------
(Unaudited)
- --------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------
<S> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.14 $ 12.15
--------- -------
Income from investment operations# -
Net investment income[sec] $ 0.29 $ 0.59
Net realized and unrealized gain (loss) on
investments (0.66) (0.02)
--------- -------
Total from investment operations $ (0.37) $ 0.57
--------- -------
Less distributions declared to shareholders -
From net investment income $ (0.29) $ (0.58)
From net realized gain on investments -- --
In excess of net investment income -- --
In excess of net realized gain on investments -- --
--------- -------
Total distributions declared to shareholders $ (0.29) $ (0.58)
--------- -------
Net asset value - end of period $ 11.48 $ 12.14
--------- -------
Total return++ (3.11)%++ 4.76%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.94%+ 0.98%
Net investment income 4.91%+ 4.76%
Portfolio turnover 3% 30%
Net assets at end of period (000 omitted) $ 333,705 $364,576
[sec]The investment adviser voluntarily waived a portion of its fee for certain
of the periods indicated. If this fee had been incurred by the Fund, the
net investment income per share and the ratios would have been:
Net investment income $ 0.28 $ 0.57
Ratios (to average net assets):
Expenses## 1.11%+ 1.10%
Net investment income 4.74%+ 4.64%
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with
its custodian and dividend disbursing agent. For fiscal years ending
after September 1, 1995, the Fund's expenses are calculated without
reduction for this expense offset arrangement.
++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.
<CAPTION>
Year Ended March 31,
----------------------------------------------------------
1998 1997 1996 1995
----------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.56 $ 11.57 $ 11.42 $ 11.48
-------- -------- -------- --------
Income from investment operations# -
Net investment income[sec] $ 0.59 $ 0.59 $ 0.59 $ 0.61
Net realized and unrealized gain (loss) on
investments 0.59 (0.01) 0.15 0.03
-------- -------- -------- --------
Total from investment operations $ 1.18 $ 0.58 $ 0.74 $ 0.64
-------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.59) $ (0.59) $ (0.59) $ (0.60)
From net realized gain on investments -- -- -- (0.06)
In excess of net investment income -- (0.00)+++ (0.00)+++ --
In excess of net realized gain on investments -- -- -- (0.04)
-------- -------- -------- --------
Total distributions declared to shareholders $ (0.59) $ (0.59) $ (0.59) $ (0.70)
-------- -------- -------- --------
Net asset value - end of period $ 12.15 $ 11.56 $ 11.57 $ 11.42
-------- -------- -------- --------
Total return++ 10.36% 5.09% 6.56% 5.86%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.03% 1.08% 1.17% 1.16%
Net investment income 4.92% 5.05% 5.04% 5.38%
Portfolio turnover 24% 33% 30% 58%
Net assets at end of period (000 omitted) $380,595 $377,112 $409,347 $429,131
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If
this fee had been incurred by the Fund, the net investment income per share and the ratios would have
been:
Net investment income $ 0.58 $ 0.58 -- --
Ratios (to average net assets):
Expenses## 1.13% 1.15% -- --
Net investment income 4.82% 4.98% -- --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount
of cash maintained by the Fund with its custodian and dividend disbursing agent. For fiscal years ending
after September 1, 1995, the Fund's expenses are calculated without reduction for this expense offset
arrangement.
++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.
</TABLE>
See notes to financial statements.
37
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
North Carolina Fund
- ----------------------------------------------------------------------------------
Six Months Year Ended
Ended March 31,
September 30, -----------
1999 1999
------------- -----------
(Unaudited)
- ----------------------------------------------------------------------------------
Class B
- ----------------------------------------------------------------------------------
<S> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.13 $ 12.15
-------- --------
Income from investment operations# -
Net investment income[sec] $ 0.25 $ 0.50
Net realized and unrealized gain (loss) on
investments (0.65) (0.02)
-------- --------
Total from investment operations $ (0.40) $ 0.48
-------- --------
Less distributions declared to shareholders -
From net investment income $ (0.25) $ (0.50)
From net realized gain on investments -- --
In excess of net investment income -- --
In excess of net realized gain on investments -- --
-------- --------
Total distributions declared to shareholders $ (0.25) $ (0.50)
-------- --------
Net asset value - end of period $ 11.48 $ 12.13
-------- --------
Total return (3.35)%++ 4.00%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.59%+ 1.63%
Net investment income 4.26%+ 4.11%
Portfolio turnover 3% 30%
Net assets at end of period (000 omitted) $ 52,028 $ 52,033
[sec]The investment adviser voluntarily waived a portion of its fee for certain of
the periods indicated. If this fee had been incurred by the Fund, the net
investment income per share and the ratios would have been:
Net investment income $ 0.24 $ 0.49
Ratios (to average net assets):
Expenses## 1.76%+ 1.75%
Net investment income 4.09%+ 3.99%
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian
fee based upon the amount of cash maintained by the Fund with its custodian
and dividend disbursing agent. For fiscal years ending after September 1, 1995,
the Fund's expenses are calculated without reduction for this expense offset
arrangement.
<CAPTION>
Year Ended March 31,
-----------------------------------------------------
1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.55 $ 11.56 $ 11.42 $ 11.47
------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.51 $ 0.50 $ 0.50 $ 0.52
Net realized and unrealized gain (loss) on
investments 0.60 0.00 0.14 0.05
------- ------- ------- -------
Total from investment operations $ 1.11 $ 0.50 $ 0.64 $ 0.57
------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.51) $ (0.51) $ (0.50) $ (0.52)
From net realized gain on investments -- -- -- (0.06)
In excess of net investment income -- (0.00)+++ (0.00)+++ --
In excess of net realized gain on investments -- -- -- (0.04)
------- ------- ------- -------
Total distributions declared to shareholders $ (0.51) $ (0.51) $ (0.50) $ (0.62)
------- ------- ------- -------
Net asset value - end of period $ 12.15 $ 11.55 $ 11.56 $ 11.42
------- ------- ------- -------
Total return 9.75% 4.36% 5.70% 5.20%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.68% 1.78% 1.90% 1.88%
Net investment income 4.27% 4.36% 4.30% 4.64%
Portfolio turnover 24% 33% 30% 58%
Net assets at end of period (000 omitted) $44,238 $39,035 $33,847 $26,260
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If
this fee had been incurred by the Fund, the net investment income per share and the ratios would have
been:
Net investment income $ 0.50 $ 0.49 -- --
Ratios (to average net assets):
Expenses## 1.78% 1.85% -- --
Net investment income 4.17% 4.29% -- --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount
of cash maintained by the Fund with its custodian and dividend disbursing agent. For fiscal years ending
after September 1, 1995, the Fund's expenses are calculated without reduction for this expense offset
arrangement.
</TABLE>
See notes to financial statements.
38
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
North Carolina Fund
- ----------------------------------------------------------------------------------
Six Months Year Ended
Ended March 31,
September 30, ----------
1999 1999
------------- ----------
(Unaudited)
- ----------------------------------------------------------------------------------
Class C
- ----------------------------------------------------------------------------------
<S> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.13 $ 12.15
------- -------
Income from investment operations# -
Net investment income[sec] $ 0.25 $ 0.50
Net realized and unrealized gain (loss) on
investments (0.65) (0.02)
------- -------
Total from investment operations $ (0.40) $ 0.48
------- -------
Less distributions declared to shareholders -
From net investment income $ (0.25) $ (0.50)
From net realized gain on investments -- --
In excess of net investment income -- --
In excess of net realized gain on investments -- --
------- -------
Total distributions declared to shareholders $ (0.25) $ (0.50)
------- -------
Net asset value - end of period $ 11.48 $ 12.13
------- -------
Total return (3.35)%++ 4.00%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.59%+ 1.63%
Net investment income 4.26%+ 4.11%
Portfolio turnover 3% 30%
Net assets at end of period (000 omitted) $14,922 $14,084
[sec]The investment adviser voluntarily waived a portion of its fee for certain of
the periods indicated. If this fee had been incurred by the Fund, the net
investment income per share and the ratios would have been:
Net investment income $ 0.24 $ 0.49
Ratios (to average net assets):
Expenses## 1.76% 1.75%
Net investment income 4.09% 3.99%
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian
fee based upon the amount of cash maintained by the Fund with its custodian
and dividend disbursing agent. For fiscal years ending after September 1, 1995,
the Fund's expenses are calculated without reduction for this expense offset
arrangement.
<CAPTION>
Year Ended March 31,
-------------------------------------------------------
1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $11.55 $11.56 $11.41 $11.47
------ ------ ------ ------
Income from investment operations# -
Net investment income[sec] $ 0.51 $ 0.52 $ 0.51 $ 0.53
Net realized and unrealized gain (loss) on
investments 0.60 (0.02) 0.15 0.04
------ ------ ------ ------
Total from investment operations $ 1.11 $ 0.50 $ 0.66 $ 0.57
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.51) $(0.51) $(0.51) $(0.53)
From net realized gain on investments -- -- -- (0.06)
In excess of net investment income -- (0.00)+++ (0.00)+++ --
In excess of net realized gain on investments -- -- -- (0.04)
------ ------ ------ ------
Total distributions declared to shareholders $(0.51) $(0.51) $(0.51) $(0.63)
------ ------ ------ ------
Net asset value - end of period $12.15 $11.55 $11.56 $11.41
------ ------ ------ ------
Total return 9.75% 4.41% 5.87% 5.18%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.68% 1.73% 1.83% 1.81%
Net investment income 4.27% 4.40% 4.38% 4.71%
Portfolio turnover 24% 33% 30% 58%
Net assets at end of period (000 omitted) $8,143 $7,789 $9,352 $8,149
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If
this fee had been incurred by the Fund, the net investment income per share and the ratios would have
been:
Net investment income $ 0.50 $ 0.51 -- --
Ratios (to average net assets):
Expenses## 1.78% 1.80% -- --
Net investment income 4.17% 4.33% -- --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount
of cash maintained by the Fund with its custodian and dividend disbursing agent. For fiscal years ending
after September 1, 1995, the Fund's expenses are calculated without reduction for this expense offset
arrangement.
</TABLE>
See notes to financial statements.
39
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Pennsylvania Fund
- --------------------------------------------------------------------
Six Months
Ended
September 30,
1999
-------------
(Unaudited)
- --------------------------------------------------------------------
Class A
- --------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.90
-------
Income from investment operations# -
Net investment income[sec] $ 0.24
Net realized and unrealized gain (loss) on
investments (0.50)
-------
Total from investment operations $ (0.26)
-------
Less distributions declared to shareholders -
From net investment income $ (0.24)
From net realized gain on investments --
In excess of net investment income --
In excess of net realized gain on investments --
-------
Total distributions declared to shareholders $ (0.24)
-------
Net asset value - end of period $ 9.40
-------
Total return++ (2.64)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.40%+
Net investment income 5.01%+
Portfolio turnover 32%
Net assets at end of period (000 omitted) $23,156
[sec]Subject to reimbursement, the Fund pays MFS a fee not greater
than 0.00% of average daily net assets pursuant to a temporary
expense arrangement in which MFS has voluntarily agreed to pay
all of the Fund's operating expenses exclusive of management
and distribution and service fees. In addition, the investment
adviser voluntarily waived a portion of its fee for certain of
the periods indicated. To the extent actual expenses were over
this limitation and the waiver had not been in place, the net
investment income per share and the ratios would have been:
Net investment income $ 0.21
Ratios (to average net assets):
Expenses## 0.95%+
Net investment income 4.46%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund
with its custodian and dividend disbursing agent. For fiscal years
ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expense offset arrangement.
++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.
<CAPTION>
Year Ended March 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.82 $ 9.26 $ 9.37 $ 9.29 $ 9.15
------- ------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.48 $ 0.50 $ 0.53 $ 0.54 $ 0.54
Net realized and unrealized gain (loss) on
investments 0.08 0.56 (0.10) 0.09 0.18
------- ------- ------- ------- -------
Total from investment operations $ 0.56 $ 1.06 $ 0.43 $ 0.63 $ 0.72
------- ------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.48) $ (0.50) $ (0.54) $ (0.55) $ (0.54)
From net realized gain on investments -- -- -- -- (0.01)
In excess of net investment income -- -- (0.00)+++ -- --
In excess of net realized gain on investments -- -- -- -- (0.03)
------- ------- ------- ------- -------
Total distributions declared to shareholders $ (0.48) $ (0.50) $ (0.54) $ (0.55) $ (0.58)
------- ------- ------- ------- -------
Net asset value - end of period $ 9.90 $ 9.82 $ 9.26 $ 9.37 $ 9.29
------- ------- ------- ------- -------
Total return++ 5.85% 11.65% 4.67% 6.85% 8.14%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.45% 0.40% 0.10% 0.10% 0.01%
Net investment income 4.85% 5.15% 5.66% 5.76% 5.97%
Portfolio turnover 8% 31% 42% 40% 49%
Net assets at end of period (000 omitted) $21,695 $18,918 $16,933 $18,030 $16,411
[sec]Subject to reimbursement, the Fund pays MFS a fee not greater than 0.00% of average daily net assets pursuant to
a temporary expense arrangement in which MFS has voluntarily agreed to pay all of the Fund's operating expenses
exclusive of management and distribution and service fees. In addition, the investment adviser voluntarily waived
a portion of its fee for certain of the periods indicated. To the extent actual expenses were over this limitation
and the waiver had not been in place, the net investment income per share and the ratios would have been:
Net investment income $ 0.43 $ 0.44 $ 0.45 $ 0.45 $ 0.43
Ratios (to average net assets):
Expenses## 0.93% 0.99% 0.95% 1.00% 1.18%
Net investment income 4.37% 4.56% 4.81% 4.86% 4.80%
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash
maintained by the Fund with its custodian and dividend disbursing agent. For fiscal years ending after
September 1, 1995, the Fund's expenses are calculated without reduction for this expense offset arrangement.
++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.
</TABLE>
See notes to financial statements.
40
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Pennsylvania Fund
- --------------------------------------------------------------------
Six Months
Ended
September 30,
1999
-------------
(Unaudited)
- --------------------------------------------------------------------
Class B
- --------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.92
-------
Income from investment operations# -
Net investment income[sec] $ 0.21
Net realized and unrealized gain (loss) on
investments (0.50)
-------
Total from investment operations $ (0.29)
-------
Less distributions declared to shareholders -
From net investment income $ (0.20)
From net realized gain on investments --
In excess of net investment income --
In excess of net realized gain on investments --
-------
Total distributions declared to shareholders $ (0.20)
-------
Net asset value - end of period $ 9.43
-------
Total return (2.92)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.20%+
Net investment income 4.21%+
Portfolio turnover 32%
Net assets at end of period (000 omitted) $23,229
[sec]Subject to reimbursement, the Fund pays MFS a fee not greater
than 0.00% of average daily net assets pursuant to a temporary
expense arrangement in which MFS has voluntarily agreed to pay
all of the Fund's operating expenses exclusive of management
and distribution and service fees. In addition, the investment
adviser voluntarily waived a portion of its fee for certain of
the periods indicated. To the extent actual expenses were over
this limitation and the waiver had not been in place, the net
investment income per share and the ratios would have been:
Net investment income $ 0.17
Ratios (to average net assets):
Expenses## 1.75%+
Net investment income 3.66%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund
with its custodian and dividend disbursing agent. For fiscal years
ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expense offset arrangement.
<CAPTION>
Year Ended March 31,
-----------------------------------------------------------
1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.84 $ 9.28 $ 9.39 $ 9.29 $ 9.15
------- ------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.41 $ 0.42 $ 0.46 $ 0.50 $ 0.45
Net realized and unrealized gain (loss) on
investments 0.08 0.56 (0.11) 0.07 0.18
------- ------- ------- ------- -------
Total from investment operations $ 0.49 $ 0.98 $ 0.35 $ 0.57 $ 0.63
------- ------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.41) $ (0.42) $ (0.46) $ (0.47) $ (0.45)
From net realized gain on investments -- -- -- -- (0.01)
In excess of net investment income -- -- (0.00)+++ -- --
In excess of net realized gain on investments -- -- -- -- (0.03)
------- ------- ------- ------- -------
Total distributions declared to shareholders $ (0.41) $ (0.42) $ (0.46) $ (0.47) $ (0.49)
------- ------- ------- ------- -------
Net asset value - end of period $ 9.92 $ 9.84 $ 9.28 $ 9.39 $ 9.29
------- ------- ------- ------- -------
Total return 5.02% 10.76% 3.83% 6.23% 7.07%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.23% 1.19% 0.90% 0.88% 1.01%
Net investment income 4.07% 4.36% 4.86% 4.98% 4.96%
Portfolio turnover 8% 31% 42% 40% 49%
Net assets at end of period (000 omitted) $23,983 $20,551 $24,898 $24,170 $ 7,699
[sec]Subject to reimbursement, the Fund pays MFS a fee not greater than 0.00% of average daily net assets pursuant
to a temporary expense arrangement in which MFS has voluntarily agreed to pay all of the Fund's operating
expenses exclusive of management and distribution and service fees. In addition, the investment adviser
voluntarily waived a portion of its fee for certain of the periods indicated. To the extent actual expenses
were over this limitation and the waiver had not been in place, the net investment income per share and the
ratios would have been:
Net investment income $ 0.33 $ 0.36 $ 0.38 $ 0.41 $ 0.34
Ratios (to average net assets):
Expenses## 1.71% 1.78% 1.75% 1.85% 2.26%
Net investment income 3.59% 3.77% 4.01% 4.01% 3.72%
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash
maintained by the Fund with its custodian and dividend disbursing agent. For fiscal years ending after
September 1, 1995, the Fund's expenses are calculated without reduction for this expense offset
arrangement.
</TABLE>
See notes to financial statements.
41
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
South Carolina Fund
- ----------------------------------------------------------------------
Six Months
Ended
September 30,
1999
-------------
(Unaudited)
- ----------------------------------------------------------------------
Class A
- ----------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.48
--------
Income from investment operations# -
Net investment income[sec] $ 0.28
Net realized and unrealized gain (loss) on investments (0.70)
--------
Total from investment operations $ (0.42)
--------
Less distributions declared to shareholders -
From net investment income $ (0.29)
From net realized gain on investments --
In excess of net investment income --
In excess of net realized gain on investments --
--------
Total distributions declared to shareholders $ (0.29)
--------
Net asset value - end of period $ 11.77
--------
Total return++ (3.44%)++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.95%+
Net investment income 4.73%+
Portfolio turnover 11%
Net assets at end of period (000 omitted) $130,790
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by
the Fund, the net investment income per share and the ratios would
have been:
Net investment income $ 0.28
Ratios (to average net assets):
Expenses ## 1.12%+
Net investment income 4.56%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund
with its custodian and dividend disbursing agent. For fiscal years
ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expenses offset arrangement.
++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.
<CAPTION>
Year Ended March 31,
-----------------------------------------------------------
1999 1998 1997 1996
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.52 $ 11.88 $ 11.97 $ 11.86
-------- -------- -------- --------
Income from investment operations# -
Net investment income[sec] $ 0.57 $ 0.60 $ 0.62 $ 0.62
Net realized and unrealized gain (loss) on investments (0.04) 0.64 (0.10) 0.11
-------- -------- -------- --------
Total from investment operations $ 0.53 $ 1.24 $ 0.52 $ 0.73
-------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.57) $ (0.60) $ (0.61) $ (0.62)
From net realized gain on investments -- -- -- --
In excess of net investment income (0.00)+++ (0.00)+++ -- (0.00)+++
In excess of net realized gain on investments -- -- -- --
-------- -------- -------- --------
Total distributions declared to shareholders $ (0.57) $ (0.60) $ (0.61) $ (0.62)
-------- -------- -------- --------
Net asset value - end of period $ 12.48 $ 12.52 $ 11.88 $ 11.97
V -------- -------- -------- --------
Total return++ 4.33% 10.62% 4.46% 6.20%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.02% 1.06% 1.10% 1.20%
Net investment income 4.55% 4.86% 5.17% 5.10%
Portfolio turnover 25% 29% 13% 18%
Net assets at end of period (000 omitted) $145,787 $148,820 $148,908 $166,801
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this
fee had been incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.56 $ 0.59 $ 0.16 --
Ratios (to average net assets):
Expenses ## 1.14% 1.16% 1.16% --
Net investment income 4.43% 4.76% 5.11% --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount
of cash maintained by the Fund with its custodian and dividend disbursing agent. For fiscal years ending after
September 1, 1995, the Fund's expenses are calculated without reduction for this expenses offset arrangement.
++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.
<CAPTION>
Year Ended
March 31,
----------
1995
- ------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.79
--------
Income from investment operations# -
Net investment income[sec] $ 0.63
Net realized and unrealized gain (loss) on investments 0.15
--------
Total from investment operations $ 0.78
--------
Less distributions declared to shareholders -
From net investment income $ (0.62)
From net realized gain on investments (0.06)
In excess of net investment income --
In excess of net realized gain on investments (0.03)
--------
Total distributions declared to shareholders $ (0.71)
--------
Net asset value - end of period $ 11.86
--------
Total return++ 6.93%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.19%
Net investment income 5.37%
Portfolio turnover 30%
Net assets at end of period (000 omitted) $171,045
[sec]The investment adviser voluntarily waived a portion of its fee
for certain of the periods indicated. If this fee had been
incurred by the Fund, the net investment income per share and
the ratios would have been:
Net investment income --
Ratios (to average net assets):
Expenses ## --
Net investment income --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund
with its custodian and dividend disbursing agent. For fiscal years
ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expenses offset arrangement.
++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.
</TABLE>
See notes to financial statements.
42
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
South Carolina Fund
- ----------------------------------------------------------------------
Six Months
Ended
September 30,
1999
-------------
(Unaudited)
- ----------------------------------------------------------------------
Class B
- ----------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.47
-------
Income from investment operations# -
Net investment income[sec] $ 0.25
Net realized and unrealized gain (loss) on investments (0.70)
-------
Total from investment operations $ (0.45)
-------
Less distributions declared to shareholders -
From net investment income $ (0.25)
From net realized gain on investments --
In excess of net investment income --
In excess of net realized gain on investments --
-------
Total distributions declared to shareholders $ (0.25)
-------
Net asset value - end of period $ 11.77
-------
Total return (3.68)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.60%+
Net investment income 4.08%+
Portfolio turnover 11%
Net assets at end of period (000 omitted) $34,810
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by
the Fund, the net investment income per share and the ratios would
have been:
Net investment income $ 0.24
Ratios (to average net assets):
Expenses ## 1.77%+
Net investment income 3.91%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund
with its custodian and dividend disbursing agent. For fiscal years
ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expense offset arrangement.
See notes to financial statements.
<CAPTION>
Year Ended March 31,
-------------------------------------------------------
1999 1998 1997 1996
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.52 $ 11.88 $ 11.97 $ 11.86
--------- --------- -------- ---------
Income from investment operations# -
Net investment income[sec] $ 0.48 $ 0.52 $ 0.54 $ 0.52
Net realized and unrealized gain (loss) on investments (0.04) 0.64 (0.10) 0.12
--------- --------- -------- ---------
Total from investment operations $ 0.44 $ 1.16 $ 0.44 $ 0.64
--------- --------- -------- ---------
Less distributions declared to shareholders -
From net investment income $ (0.49) $ (0.52) $ (0.53) $ (0.53)
From net realized gain on investments -- -- -- --
In excess of net investment income (0.00)+++ (0.00)+++ -- (0.00)+++
In excess of net realized gain on investments -- -- -- --
--------- --------- -------- ---------
Total distributions declared to shareholders $ (0.49) $ (0.52) $ (0.53) $ (0.53)
--------- --------- -------- ---------
Net asset value - end of period $ 12.47 $ 12.52 $ 11.88 $ 11.97
--------- --------- -------- ---------
Total return 3.57% 9.91% 3.73% 5.43%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.67% 1.71% 1.79% 1.92%
Net investment income 3.90% 4.21% 4.48% 4.35%
Portfolio turnover 25% 29% 13% 18%
Net assets at end of period (000 omitted) $ 36,226 $ 28,086 $ 21,871 $ 18,420
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this
fee had been incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.47 $ 0.51 $ 0.53 --
Ratios (to average net assets):
Expenses ## 1.79% 1.81% 1.85% --
Net investment income 3.78% 4.11% 4.42% --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of
cash maintained by the Fund with its custodian and dividend disbursing agent. For fiscal years ending after
September 1, 1995, the Fund's expenses are calculated without reduction for this expense offset arrangement.
See notes to financial statements.
<CAPTION>
Year Ended March 31,
--------------------
1995
- ----------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.78
----------
Income from investment operations# -
Net investment income[sec] $ 0.54
Net realized and unrealized gain (loss) on investments 0.17
----------
Total from investment operations $ 0.71
----------
Less distributions declared to shareholders -
From net investment income $ (0.54)
From net realized gain on investments (0.06)
In excess of net investment income (0.00)+++
In excess of net realized gain on investments (0.03)
----------
Total distributions declared to shareholders $ (0.63)
----------
Net asset value - end of period $ 11.86
----------
Total return 6.26%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.90%
Net investment income 4.63%
Portfolio turnover 30%
Net assets at end of period (000 omitted) $ 12,964
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred
by the Fund, the net investment income per share and the ratios
would have been:
Net investment income -- Ratios (to average net assets):
Expenses ## --
Net investment income --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with
its custodian and dividend disbursing agent. For fiscal years ending
after September 1, 1995, the Fund's expenses are calculated without
reduction for this expense offset arrangement.
See notes to financial statements.
</TABLE>
43
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
Tennessee Fund
- ----------------------------------------------------------------------
Six Months
Ended
September 30,
1999
------------
(Unaudited)
- ----------------------------------------------------------------------
Class A
- ----------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.87
---------
Income from investment operations# -
Net investment income[sec] $ 0.25
Net realized and unrealized gain (loss) on investments (0.59)
---------
Total from investment operations $ (0.34)
---------
Less distributions declared to shareholders -
From net investment income $ (0.25)
From net realized gain on investments --
In excess of net investment income --
In excess of net realized gain on investments --
---------
Total distributions declared to shareholders $ (0.25)
---------
Net asset value - end of period $ 10.28
---------
Total return++ (3.20)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.98%+
Net investment income 4.61%+
Portfolio turnover 11%
Net assets at end of period (000 omitted) $ 107,006
[sec]The investment adviser voluntarily waived a portion of
its fee for certain of the periods indicated. If this
fee had been incurred by the Fund, the net
investment income per share and the ratios would have been:
Net investment income $ 0.24
Ratios (to average net assets):
Expenses## 1.15%+
Net investment income 4.44%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with
its custodian and dividend disbursing agent. For fiscal years ending
after September 1, 1995, the Fund's expenses are calculated without
reduction for this expense offset arrangement.
++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. See
notes to financial statements.
<CAPTION>
Year Ended March 31,
--------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.91 $ 10.32 $ 10.40 $ 10.27 $ 10.26
-------- ------- -------- -------- ---------
Income from investment operations# -
Net investment income[sec] $ 0.53 $ 0.53 $ 0.55 $ 0.54 $ 0.56
Net realized and unrealized gain (loss) on investments (0.02) 0.60 (0.09) 0.13 0.02
-------- ------- -------- -------- ---------
Total from investment operations $ 0.51 $ 1.13 $ 0.46 $ 0.67 $ 0.58
-------- ------- -------- --------- ---------
Less distributions declared to shareholders -
From net investment income $ (0.52) $ (0.53) $ (0.54) $ (0.54) $ (0.56)
From net realized gain on investments (0.03) -- -- -- (0.00)+++
In excess of net investment income -- ( 0.01) -- (0.00)+++ --
In excess of net realized gain on investments -- -- -- -- (0.01)
-------- -------- -------- --------- ---------
Total distributions declared to shareholders $ (0.55) $ (0.54) $ (0.54) (0.54) $ (0.57)
-------- -------- -------- --------- ---- -----
Net asset value - end of period $ 10.87 $ 10.91 $ 10.32 $ 10.40 $ 10.27
-------- -------- -------- --------- ---------
Total return++ 4.80% 11.11% 4.48% 6.66% 5.86%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.02% 1.07% 1.10% 1.21% 1.22%
Net investment income 4.79% 4.97% 5.26% 5.18% 5.52%
Portfolio turnover 16% 26% 20% 20% 27%
Net assets at end of period (000 omitted) $117,296 $108,871 $108,000 $109,811 $ 117,572
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.51 $ 0.52 $ 0.54 -- --
Ratios (to average net assets):
Expenses## 1.14% 1.17% 1.16% -- --
Net investment income 4.67% 4.87% 5.20% -- --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash maintained
by the Fund with its custodian and dividend disbursing agent. For fiscal years ending after September 1, 1995, the Fund's
expenses are calculated without reduction for this expense offset arrangement.
++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.
</TABLE>
See notes to financial statements.
44
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
Tennessee Fund
- ----------------------------------------------------------------------
Six Months
Ended
September 30,
1999
------------
(Unaudited)
- ----------------------------------------------------------------------
Class B
- ----------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.86
-------
Income from investment operations# -
Net investment income[sec] $ 0.21
Net realized and unrealized gain (loss) on investments (0.59)
-------
Total from investment operations $ (0.38)
-------
Less distributions declared to shareholders -
From net investment income $ (0.21)
From net realized gain on investments --
In excess of net investment income --
In excess of net realized gain on investments --
-------
Total distributions declared to shareholders $ (0.21)
-------
Net asset value - end of period $ 10.27
-------
Total return (3.52)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.63%+
Net investment income 3.96%+
Portfolio turnover 11%
Net assets at end of period (000 omitted) $22,837
[sec]The investment adviser voluntarily waived a portion of its fee
for certain of the periods indicated. If this fee had been
incurred by the Fund, the net investment income per share and
the ratios would have been:
Net investment income $ 0.20
Ratios (to average daily net assets):
Expenses## 1.80%+
Net investment income 3.79%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the
Fund's custodian fee based upon the amount of cash maintained
by the Fund with its custodian and dividend disbursing agent.
For fiscal years ending after September 1, 1995, the Fund's
expenses are calculated without reduction for this expense
offset arrangement.
<CAPTION>
Year Ended March 31,
---------------------------------------------------------------
1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.91 $ 10.31 $ 10.39 $ 10.26 $ 10.26
------- ------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.45 $ 0.46 $ 0.47 $ 0.46 $ 0.48
Net realized and unrealized gain (loss) on investments (0.02) 0.61 (0.09) 0.14 0.01
------- ------- ------- ------- -------
Total from investment operations $ 0.43 $ 1.07 $ 0.38 $ 0.60 $ 0.49
------- ------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.45) $ (0.46) $ (0.46) $ (0.47) $ (0.48)
From net realized gain on investments (0.03) -- -- -- (0.00)+++
In excess of net investment income -- (0.01) -- (0.00)+++ --
In excess of net realized gain on investments -- -- -- -- (0.01)
------- ------- ------- ------- -------
Total distributions declared to shareholders $ (0.48) $ (0.47) $ (0.46) $ (0.47) $ (0.49)
------- ------- ------- ------- -------
Net asset value - end of period $ 10.86 $ 10.91 $ 10.31 $ 10.39 $ 10.26
------- ------- ------- ------- -------
Total return 4.04% 10.51% 3.76% 5.89% 5.00%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.67% 1.72% 1.79% 1.93% 1.94%
Net investment income 4.14% 4.32% 4.57% 4.43% 4.80%
Portfolio turnover 16% 26% 20% 20% 27%
Net assets at end of period (000 omitted) $22,765 $18,198 $14,436 $12,935 $10,006
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.44 $ 0.45 $ 0.46 -- --
Ratios (to average daily net assets):
Expenses## 1.79% 1.82% 1.85% -- --
Net investment income 4.02% 4.22% 4.51% -- --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash maintained
by the Fund with its custodian and dividend disbursing agent. For fiscal years ending after September 1, 1995, the Fund's
expenses are calculated without reduction for this expense offset arrangement.
</TABLE>
See notes to financial statements.
45
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
Virginia Fund
- ----------------------------------------------------------------------
Six Months
Ended
September 30,
1999
-------------
(Unaudited)
- ----------------------------------------------------------------------
Class A
- ----------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.60
---------
Income from investment operations# -
Net investment income[sec] $ 0.28
Net realized and unrealized gain (loss) on investments (0.59)
---------
Total from investment operations $ (0.31)
---------
Less distributions declared to shareholders -
From net investment income $ (0.28)
From net realized gain on investments --
In excess of net investment income --
In excess of net realized gain on investments --
---------
Total distributions declared to shareholders $ (0.28)
---------
Net asset value - end of period $ 11.01
---------
Total return++ (2.74)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.93%+
Net investment income 4.89%+
Portfolio turnover 5%
Net assets at end of period (000 omitted) $338,989
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by
the Fund, the net investment income per share and the ratios would
have been:
Net investment income $ 0.27
Ratios (to average net assets):
Expenses## 1.10%+
Net investment income 4.72%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund
with its custodian and dividend disbursing agent. For fiscal years
ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expense offset arrangement.
++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.
<CAPTION>
Year Ended March 31,
-----------------------------------------------------
1999 1998 1997 1996
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.61 $ 11.06 $ 11.21 $ 11.09
-------- -------- -------- ---------
Income from investment operations# -
Net investment income[sec] $ 0.55 $ 0.57 $ 0.59 $ 0.59
Net realized and unrealized gain (loss) on investments (0.01) 0.55 (0.15) 0.13
-------- -------- -------- ---------
Total from investment operations $ 0.54 $ 1.12 $ 0.44 $ 0.72
-------- -------- -------- ---------
Less distributions declared to shareholders -
From net investment income $ (0.55) $ (0.57) $ (0.59) $ (0.60)
From net realized gain on investments -- -- -- --
In excess of net investment income -- (0.00)+++ -- (0.00)+++
In excess of net realized gain on investments -- -- -- --
-------- --------- -------- ---------
Total distributions declared to shareholders $ (0.55) $ (0.57) $ (0.59) $ (0.60)
-------- --------- -------- ---------
Net asset value - end of period $ 11.60 $ 11.61 $ 11.06 $ 11.21
-------- --------- -------- ---------
Total return++ 4.71% 10.32% 3.97% 6.52%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.99% 1.03% 1.08% 1.18%
Net investment income 4.73% 4.97% 5.27% 5.20%
Portfolio turnover 24% 39% 42% 42%
Net assets at end of period (000 omitted) $365,880 $373,024 $379,185 $418,408
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this
fee had been incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.54 $ 0.56 $ 0.58 --
Ratios (to average net assets):
Expenses## 1.11% 1.13% 1.14% --
Net investment income 4.61% 4.87% 5.21% --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian
fee based upon the amount of cash maintained by the Fund with its custodian
and dividend disbursing agent. For fiscal years ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expense offset
arrangement.
++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.
<CAPTION>
Year Ended March 31,
--------------------
1995
- ----------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.15
--------
Income from investment operations# -
Net investment income[sec] $ 0.56
Net realized and unrealized gain (loss) on investments 0.04
--------
Total from investment operations $ 0.60
--------
Less distributions declared to shareholders -
From net investment income $ (0.61)
From net realized gain on investments (0.04)
In excess of net investment income (0.00)+++
In excess of net realized gain on investments (0.01)
---------
Total distributions declared to shareholders $ (0.66)
---------
Net asset value - end of period $ 11.09
---------
Total return++ 5.67%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.16%
Net investment income 4.91%
Portfolio turnover 27%
Net assets at end of period (000 omitted) $430,688
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by
the Fund, the net investment income per share and the ratios would
have been:
Net investment income -- Ratios (to average net assets):
Expenses## --
Net investment income --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund
with its custodian and dividend disbursing agent. For fiscal years
ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expense offset arrangement.
++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.
</TABLE>
See notes to financial statements.
46
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
Virginia Fund
- ----------------------------------------------------------------------
Six Months
Ended
September 30,
1999
-------------
(Unaudited)
- ----------------------------------------------------------------------
Class B
- ----------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.60
-------
Income from investment operations# -
Net investment income[sec] $ 0.24
Net realized and unrealized gain (loss) on investments (0.59)
-------
Total from investment operations $ (0.35)
-------
Less distributions declared to shareholders -
From net investment income $ (0.24)
From net realized gain on investments --
In excess of net investment income --
In excess of net realized gain on investments --
-------
Total distributions declared to shareholders $ (0.24)
-------
Net asset value - end of period $ 11.01
-------
Total return (3.06)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.58%+
Net investment income 4.24%+
Portfolio turnover 5%
Net assets at end of period (000 omitted) $32,937
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by
the Fund, the net investment income per share and the ratios would
have been:
Net investment income $ 0.23
Ratios (to average net assets):
Expenses## 1.75%+
Net investment income 4.07%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund
with its custodian and dividend disbursing agent. For fiscal years
ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expense offset arrangement.
<CAPTION>
Year Ended March 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.61 $ 11.06 $ 11.21 $ 11.08 $ 11.14
------- ------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.47 $ 0.49 $ 0.51 $ 0.51 $ 0.53
Net realized and unrealized gain (loss) on investments (0.01) 0.56 (0.15) 0.13 (0.01)
------- ------- ------- ------- -------
Total from investment operations $ 0.46 $ 1.05 $ 0.36 $ 0.64 $ 0.52
------- ------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.47) $ (0.49) $ (0.51) $ (0.51) $ (0.53)
From net realized gain on investments -- -- -- -- (0.04)
In excess of net investment income -- (0.01) -- (0.00)+++ (0.00)+++
In excess of net realized gain on investments -- -- -- -- (0.01)
------- ------- ------- ------- -------
Total distributions declared to shareholders $ (0.47) $ (0.50) $ (0.51) $ (0.51) $ (0.58)
------- ------- ------- ------- -------
Net asset value - end of period $ 11.60 $ 11.61 $ 11.06 $ 11.21 $ 11.08
------- ------- ------- ------- -------
Total return 4.04% 9.61% 3.24% 5.85% 4.91%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.64% 1.68% 1.78% 1.90% 1.88%
Net investment income 4.08% 4.32% 4.57% 4.46% 4.84%
Portfolio turnover 24% 39% 42% 42% 27%
Net assets at end of period (000 omitted) $35,644 $32,902 $30,567 $28,420 $22,007
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.46 $ 0.48 $ 0.50 -- --
Ratios (to average net assets):
Expenses## 1.76% 1.78% 1.84% -- --
Net investment income 3.96% 4.22% 4.51% -- --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash
maintained by the Fund with its custodian and dividend disbursing agent. For fiscal years ending after September 1, 1995,
the Fund's expenses are calculated without reduction for this expense offset arrangement.
</TABLE>
See notes to financial statements.
47
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Virginia Fund
- -----------------------------------------------------------------------
Six Months
Ended
September 30,
1999
-------------
(Unaudited)
- -----------------------------------------------------------------------
Class C
- -----------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.60
-------
Income from investment operations# -
Net investment income[sec] $ 0.24
Net realized and unrealized gain (loss) on investments (0.58)
-------
Total from investment operations $ (0.34)
-------
Less distributions declared to shareholders -
From net investment income $ (0.24)
From net realized gain on investment income --
In excess of net investment income --
In excess of net realized gain on investments --
-------
Total distributions declared to shareholders $ (0.24)
-------
Net asset value - end of period $ 11.02
-------
Total return (2.97)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.58%+
Net investment income 4.24%+
Portfolio turnover 5%
Net assets at end of period (000 omitted) 5,354
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by
the Fund, the net investment income per share and the ratios would
have been:
Net investment income $ 0.23
Ratios (to average net assets):
Expenses## 1.75%+
Net investment income 4.07%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund
with its custodian and dividend disbursing agent. For fiscal years
ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expense offset arrangement.
<CAPTION>
Year Ended March 31,
---------------------------------------------------------------
1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $11.61 $ 11.06 $ 11.21 $ 11.07 $ 11.14
------ ------- ------- -------- --------
Income from investment operations# -
Net investment income[sec] $ 0.47 $ 0.49 $ 0.52 $ 0.51 $ 0.56
Net realized and unrealized gain (loss) on investments (0.01) 0.56 (0.16) 0.15 (0.04)
------ ------- ------- -------- --------
Total from investment operations $ 0.46 $ 1.05 $ 0.36 $ 0.66 $ 0.52
------ ------- ------- ---------- ----------
Less distributions declared to shareholders -
From net investment income $(0.47) $ (0.49) $ (0.51) $ (0.52) $ (0.54)
From net realized gain on investment income -- -- -- -- (0.04)
In excess of net investment income -- (0.01) -- (0.00)+++ (0.00)+++
In excess of net realized gain on investments -- -- -- -- (0.01)
------ ------- ------- -------- --------
Total distributions declared to shareholders $(0.47) $ (0.50) $ (0.51) $ (0.52) $ (0.59)
------ ------- ------- -------- --------
Net asset value - end of period $11.60 $ 11.61 $ 11.06 $ 11.21 $ 11.07
------ ------- ------- -------- --------
Total return 4.04% 9.61% 3.30% 6.02% 4.85%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.64% 1.68% 1.72% 1.83% 1.80%
Net investment income 4.08% 4.32% 4.63% 4.53% 4.90%
Portfolio turnover 24% 39% 42% 42% 27%
Net assets at end of period (000 omitted) $6,523 $3,082 $ 3,182 $ 3,366 $ 2,300
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.46 $ 0.48 $ 0.51 -- --
Ratios (to average net assets):
Expenses## 1.76% 1.78% 1.78% -- --
Net investment income 3.96% 4.22% 4.57% -- --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash
maintained by the Fund with its custodian and dividend disbursing agent. For fiscal years ending after
September 1, 1995, the Fund's expenses are calculated without reduction for this expense offset arrangement.
</TABLE>
See notes to financial statements.
48
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
West Virginia Fund
- ------------------------------------------------------------------------
Six Months
Ended
September 30,
1999
--------------
(Unaudited)
- ------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.75
---------
Income from investment operations# -
Net investment income[sec] $ 0.28
Net realized and unrealized gain (loss) on investments ( 0.64)
---------
Total from investment operations $ (0.36)
---------
Less distributions declared to shareholders -
From net investment income $ (0.28)
In excess of net investment income --
In excess of net realized gain on investments --
---------
Total distributions declared to shareholders $ (0.28)
---------
Net asset value - end of period $ 11.11
---------
Total return++ (3.07)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.97%+
Net investment income 4.96%+
Portfolio turnover 14%
Net assets at end of period (000 omitted) $124,329
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by
the Fund, the net investment income per share and the ratios would
have been:
Net investment income $ 0.27
Ratios (to average net assets):
Expenses## 1.14%+
Net investment income 4.79%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with
its custodian
and dividend disbursing agent. For fiscal years ending after September 1,
1995, the Fund's expenses are calculated without reduction for this
expense offset
arrangement.
++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.
<CAPTION>
Year Ended March 31,
-------------------------------------------------------
1999 1998 1997 1996
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.77 $ 11.31 $ 11.33 $ 11.21
--------- -------- -------- --------
Income from investment operations# -
Net investment income[sec] $ 0.56 $ 0.58 $ 0.60 $ 0.61
Net realized and unrealized gain (loss) on investments (0.01) 0.47 (0.02) 0.12
--------- -------- -------- --------
Total from investment operations $ 0.55 $ 1.05 $ 0.58 $ 0.73
--------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.57) $ (0.58) $ (0.60) $ (0.61)
In excess of net investment income (0.00)+++ (0.01) -- (0.00)+++
In excess of net realized gain on investments -- -- -- --
--------- -------- -------- --------
Total distributions declared to shareholders $ (0.57) $ (0.59) $ (0.60) $ (0.61)
--------- -------- -------- --------
Net asset value - end of period $ 11.75 $ 11.77 $ 11.31 $ 11.33
--------- -------- -------- --------
Total return++ 4.73% 9.42% 5.20% 6.58%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.02% 1.10% 1.17% 1.22%
Net investment income 4.78% 4.98% 5.28% 5.30%
Portfolio turnover 13% 17% 21% 11%
Net assets at end of period (000 omitted) $ 133,456 $130,002 $126,107 $134,514
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee
had been incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.55 $ 0.57 -- --
Ratios (to average net assets):
Expenses## 1.14% 1.17% -- --
Net investment income 4.66% 4.91% -- --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian
fee based upon the amount of cash maintained by the Fund with its custodian
and dividend disbursing agent. For fiscal years ending after September 1, 1995,
the Fund's expenses are calculated without reduction for this expense offset
arrangement.
++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.
<CAPTION>
Year Ended
March 31,
- ----------------------------------------------------------------------
1995
- ----------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.19
--------
Income from investment operations# -
Net investment income[sec] $ 0.62
Net realized and unrealized gain (loss) on investments 0.03
--------
Total from investment operations $ 0.65
--------
Less distributions declared to shareholders -
From net investment income $ (0.62)
In excess of net investment income --
In excess of net realized gain on investments (0.01)
----------
Total distributions declared to shareholders $ (0.63)
----------
Net asset value - end of period $ 11.21
----------
Total return++ 6.07%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.19%
Net investment income 5.62%
Portfolio turnover 23%
Net assets at end of period (000 omitted) $127,616
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by
the Fund, the net investment income per share and the ratios would
have been:
Net investment income --
Ratios (to average net assets):
Expenses## --
Net investment income --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with
its custodian and dividend disbursing agent. For fiscal years ending
after September 1, 1995, the Fund's expenses are calculated without
reduction for this expense offset arrangement.
++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.
</TABLE>
See notes to financial statements.
49
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
West Virginia Fund
- ----------------------------------------------------------------------
Six Months
Ended
September 30,
1999
(Unaudited)
- ----------------------------------------------------------------------
Class B
- ----------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.74
-------
Income from investment operations# -
Net investment income[sec] $ 0.25
Net realized and unrealized gain (loss) on investments (0.63)
-------
Total from investment operations $ (0.38)
-------
Less distributions declared to shareholders -
From net investment income $ (0.25)
In excess of net investment income --
In excess of net realized gain on investments --
-------
Total distributions declared to shareholders $ (0.25)
-------
Net asset value - end of period $ 11.11
-------
Total return ( 3.31)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.62%+
Net investment income 4.31%+
Portfolio turnover 14%
Net assets at end of period (000 omitted) $16,211
[sec]The investment adviser voluntarily waived a portion of its fee
for certain of the periods indicated. If this fee had been incurred
by the Fund, the net investment income per share and the ratios
would have been:
Net investment income $ 0.24
Ratios (to average net assets):
Expenses## 1.79%+
Net investment income 4.14%+
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund
with its custodian and dividend disbursing agent. For fiscal years
ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expense offset arrangement.
<CAPTION>
Year Ended March 31,
--------------------------------------------------------
1999 1998 1997 1996
--------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.77 $ 11.31 $ 11.33 $ 11.21
------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.49 $ 0.51 $ 0.52 $ 0.52
Net realized and unrealized gain (loss) on investments (0.03) 0.46 (0.02) 0.12
------- ------- ------- -------
Total from investment operations $ 0.46 $ 0.97 $ 0.50 $ 0.64
------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.49) $ (0.51) $ (0.52) $ (0.52)
In excess of net investment income (0.00)+++ (0.00)+++ -- (0.00)+++
In excess of net realized gain on investments -- -- -- --
------- ------- ------- -------
Total distributions declared to shareholders $ (0.49) $ (0.51) $ (0.52) $ (0.52)
------- ------- ------- -------
Net asset value - end of period $ 11.74 $ 11.77 $ 11.31 $ 11.33
------- ------- ------- -------
Total return 3.97% 8.72% 4.47% 5.81%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.67% 1.75% 1.87% 1.94%
Net investment income 4.13% 4.33% 4.57% 4.56%
Portfolio turnover 13% 17% 21% 11%
Net assets at end of period (000 omitted) $17,166 $15,472 $13,587 $12,647
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee
had been incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.48 $ 0.50 -- --
Ratios (to average net assets):
Expenses## 1.79% 1.82% -- --
Net investment income 4.01% 4.26% -- --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash
maintained by the Fund with its custodian and dividend disbursing agent. For fiscal years ending after
September 1, 1995, the Fund's expenses are calculated without reduction for this expense offset arrangement.
<CAPTION>
Year Ended March 31,
- ----------------------------------------------------------------------
1995
- ----------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.19
-------
Income from investment operations# -
Net investment income[sec] $ 0.53
Net realized and unrealized gain (loss) on investments 0.04
-------
Total from investment operations $ 0.57
-------
Less distributions declared to shareholders -
From net investment income $ (0.54)
In excess of net investment income (0.00)+++
In excess of net realized gain on investments (0.01)
-------
Total distributions declared to shareholders $ (0.55)
-------
Net asset value - end of period $ 11.21
-------
Total return 5.30%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.91%
Net investment income 4.87%
Portfolio turnover 23%
Net assets at end of period (000 omitted) $10,046
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by
the Fund, the net investment income per share and the ratios would
have been:
Net investment income -- Ratios (to average net assets):
Expenses## --
Net investment income --
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund
with its custodian and dividend disbursing agent. For fiscal years
ending after September 1, 1995, the Fund's expenses are calculated
without reduction for this expense offset arrangement.
</TABLE>
See notes to financial statements.
50
<PAGE>
Notes to Financial Statements (Unaudited)
(1) Business and Organization
MFS Mississippi Municipal Bond Fund (Mississippi 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 (Tennessee Fund), MFS Virginia Municipal Bond Fund (Virginia
Fund), and MFS West Virginia Municipal Bond Fund (West Virginia Fund) are each a
non-diversified series of MFS Municipal Series Trust (the 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.
(2) Significant Accounting Policies
General - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Because each Fund invests primarily in the securities of a single state and its
political subdivisions, each Fund is vulnerable to the effects of changes in the
legal and economic environment of the particular state.
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 market value. Futures
contracts listed on commodities exchanges are reported at market value using
closing settlement prices. Securities for which there are no such quotations or
valuations are valued in good faith by the Trustees.
Futures Contracts - Each Fund may enter into 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
with the broker 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
contract, and are recorded for financial statement purposes as unrealized gains
or losses by the Fund. Each Fund's investment in futures contracts is designed
to hedge against anticipated future changes in interest rates or securities
prices. Investments in interest rate futures for purposes other than hedging may
be made to modify the duration of the portfolio without incurring the additional
transaction costs involved in buying and selling the underlying securities.
Should interest rates or securities prices move unexpectedly, the Fund may not
achieve the anticipated benefits of the 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 is amortized or accreted for financial statement and tax
reporting purposes as required by federal income tax regulations. Interest
payments received in additional securities are recorded on the ex-interest date
in an amount equal to the value of the security on such date. Some securities
may be purchased on a "when-issued" or "forward delivery" basis, which means
that the securities will be delivered to the Fund at a future date, usually
beyond customary settlement time.
Legal fees and other related expenses incurred to preserve and protect the value
of a security owned are added to the cost of the security; other legal fees are
expensed. Capital infusions made directly to the security issuer, which are
generally non-recurring, incurred to protect or enhance the value of high-yield
debt securities, are reported as additions to the cost basis of the security.
Costs that are incurred to negotiate the terms or conditions of capital
infusions or that are expected to result in a plan of reorganization are
reported as realized losses. Ongoing costs incurred to protect or enhance an
investment, or costs incurred to pursue other claims or legal actions, are
expensed.
Fees Paid Indirectly - The Trust's custody fee is calculated as a percentage of
each Funds' month end net assets. The fee is reduced according to an arrangement
that measures the value of cash deposited with the custodian by each Fund. This
amount is shown as a reduction of expenses on the Statement of Operations.
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.
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. The 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
51
<PAGE>
Notes to Financial Statements (Unaudited) - continued
statements as distributions from paid-in 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 net realized gains.
At March 31, 1999, the following Funds, for federal income tax purposes, had a
capital loss carryforward which may be applied against any net taxable realized
gains of each succeeding year until the earlier of their utilization or
expiration.
<TABLE>
<CAPTION>
Mississippi New York North Carolina Pennsylvania Virginia West Virginia
Expiration Date Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
March 31, 2003 $ -- $ -- $686,899 $ -- $ -- $ --
March 31, 2004 2,962,632 935,505 -- 2,079,974
March 31, 2005 228,833 446,982 -- 533,472 1,711,218 714,690
---------- -------- -------- ---------- ---------- ----------
Total $3,191,465 $446,982 $686,899 $1,468,977 $1,711,218 $2,794,664
---------- -------- -------- ---------- ---------- ----------
</TABLE>
Multiple Classes of Shares of Beneficial Interest - Each Fund offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the Fund based on the value
of settled shares outstanding of each class, without distinction between share
classes. Dividends are declared separately for each class. Differences in per
share dividend rates are generally due to differences in separate class
expenses. Class B shares will convert to Class A shares approximately eight
years after purchase.
(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 has voluntarily
agreed to waive a portion of its fee with respect to each Fund, which is shown
as a reduction of expenses in the Statement of Operations.
The Pennsylvania Fund has a temporary expense reimbursement agreement whereby
MFS has voluntarily agreed to pay all of the Pennsylvania Fund's operating
expenses, exclusive of management, distribution and service fees. The
Pennsylvania Fund in turn will pay MFS an expense reimbursement fee not greater
than 0.40% of its average daily net assets. To the extent that the expense
reimbursement fee exceeds the Pennsylvania Fund's actual expenses, the excess
will be applied to amounts paid by MFS in prior years. At September 30, 1999,
aggregate unreimbursed expenses owed to MFS by the Pennsylvania Fund amounted to
$228,316. During the six months ended September 30, 1999, MFS did not impose the
reimbursement fee of $93,212.
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 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 of its independent Trustees and Mr. Bailey.
Included in Trustees' compensation for the six months ended September 30, 1999,
is a net periodic pension expense for each Fund, as follows:
<TABLE>
<CAPTION>
North South West
Mississippi New York Carolina Pennsylvania Carolina Tennessee Virginia Virginia
Fund Fund Fund Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$2,804 $2,809 $2,996 $2,929 $2,981 $2,774 $2,982 $2,982
</TABLE>
Administrator - The Trust has an administrative services agreement with MFS to
provide the Trust with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, each Fund pays MFS an administrative fee
at the following annual percentages of each Fund's average daily net assets:
<TABLE>
<S> <C>
First $1 billion 0.0150%
Next $1 billion 0.0125%
Next $1 billion 0.0100%
In excess of $3 billion 0.0000%
</TABLE>
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$11,522, $13,862, $37,942, $13,132, $15,336, $17,217, $40,946, and $23,085 for
the six months ended September 30, 1999, as its portion of the sales charge on
sales of Class A shares of the Mississippi, New York, North Carolina,
Pennsylvania, South Carolina, Tennessee, Virginia and West Virginia Funds,
respectively.
The Trustees have adopted a distribution plan for Class A, Class B, and Class C
shares pursuant to Rule 12b-1 of the Investment Company Act of 1940 as follows:
Each Fund's distribution plan provides that the Fund will pay MFD up to 0.35%
per annum of its average daily net assets attributable to Class A shares 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
paid to each securities dealer that enters into a sales agreement with MFD of up
to 0.25% per annum of the Fund's average daily net assets attributable to Class
A shares which are attributable to that securities dealer and a distribution fee
to MFD of up to 0.10%
52
<PAGE>
Notes to Financial Statements (Unaudited) - continued
per annum of the Fund's average daily net assets attributable to Class A shares.
MFD retains the service fee for accounts not attributable to a securities
dealer, which amounted to $7,184, $13,890, $4,658, $5,163, $12,455, and $5,439
for the, New York, North Carolina, South Carolina, Tennessee, Virginia, and West
Virginia Funds, respectively, for the six months ended September 30, 1999. Fees
incurred under the distribution plan during the six months ended September 30,
1999, were, 0.00%, 0.25%, 0.35%, 0.00%, 0.35%, 0.35%, 0.35%, and 0.35% of each
Fund's average daily net assets attributable to Class A shares on an annualized
basis for the Mississippi, New York, North Carolina, Pennsylvania, South
Carolina, Tennessee, Virginia, and West Virginia Funds, respectively. Payments
of the Mississippi Fund's 0.35% per annum Class A distribution and service fee
will commence on such date as the Trustees of Trust may determine. In the case
of the New York and Pennsylvania Funds, payments of the 0.10% per annum Class A
distribution fee will be implemented on such date as the Trustees of the Trust
may determine. For the Pennsylvania Fund, payments of the 0.25% per annum Class
A service fee will commence on the date that the net assets of the Fund
attributable to Class A shares first equals or exceed $50 million.
Each Fund's distribution plan provides that the Fund will pay MFD a distribution
fee of 0.75% per annum, and a 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
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 consideration for services
rendered by the dealer with respect to Class B and Class C shares. MFD retains
the service fee for accounts not attributable to a securities dealer, which
amounted to $2,730, $2,446, $2,066, $943, $1,794, and $1,321 for the New York,
North Carolina, South Carolina, Tennessee, Virginia, and West Virginia Funds,
respectively, for Class B shares, for the six months ended September 30, 1999.
MFS retained the service fee for accounts not attributable to a securities
dealer, which amounted to $1 for the Virginia Fund for Class C shares for the
six months ended September 30, 1999. Fees incurred under the distribution plan
during the six months ended September 30, 1999, were 0.79%, 1.00%, 1.00%, 0.80%,
1.00%, 1.00%, 1.00%, and 1.00% of each of the Fund's average daily net assets
attributable to Class B shares for the Mississippi, New York, North Carolina,
Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia Funds,
respectively, on an annualized basis. Fees incurred under the distribution plan
during the six months ended September 30, 1999, were 1.00% and 1.00% of each of
the Fund's average daily net assets attributable to Class C shares for the North
Carolina and Virginia Funds, respectively, on an annualized basis. Except in the
case of the 0.25% per annum Class B service fee paid by the Mississippi Fund
upon sale of Class B shares in the first year, payment of the Class B service
fee will be suspended until such date as the Trustees of the Trust may
determine. Except in the case of the 0.25% per annum Class B service fee paid by
the Pennsylvania Fund upon the sale of Class B shares in the first year, payment
of the Class B service fee will be suspended until on such date as the Class A
service fee first becomes payable.
Certain Class A and Class C shares are subject to a contingent deferred sales
charge in the event of a shareholder redemption within 12 months following
purchase. A contingent deferred sales charge is imposed on shareholder
redemption's 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 six months September 30,
1999, for Class A, Class B, and Class C shares, were as follows:
<TABLE>
<CAPTION>
North South West
Mississippi New York Carolina Pennsylvania Carolina Tennessee Virginia Virginia
CDSC imposed Fund Fund Fund Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $ -- $ -- $ 231 $ -- $ 2,986 $ -- $ -- $ --
Class B 7,212 36,875 60,015 20,538 58,323 33,542 44,299 32,986
Class C -- -- 1,995 -- -- -- 10,222 --
</TABLE>
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of each Fund's average daily net assets at an effective annual rate
of 0.10%.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities, and
short-term obligations were as follows (000 omitted):
<TABLE>
<CAPTION>
North South West
Mississippi New York Carolina Pennsylvania Carolina Tennessee Virginia Virginia
Fund Fund Fund Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases $7,808 $41,495 $11,880 $17,160 $19,510 $14,430 $20,704 $18,068
Sales 5,975 44,624 19,520 14,198 22,324 16,061 43,155 19,037
</TABLE>
53
<PAGE>
Notes to Financial Statements (Unaudited) - continued
The cost and unrealized appreciation and depreciation in the value of the
investments owned by each Fund, as computed on a federal income tax basis, are
as follows (000's omitted):
<TABLE>
<CAPTION>
North
Mississippi New York Carolina
Fund Fund Fund
- ---------------------------------------------------------------------
<S> <C> <C> <C>
Aggregate cost $75,154 $127,530 $383,905
------- -------- --------
Gross unrealized appreciation $ 3,309 $ 6,655 $ 16,772
Gross unrealized depreciation (574) (1,699) (8,111)
------- -------- --------
Net unrealized appreciation $ 2,735 $ 4,956 $ 8,661
------- -------- --------
<CAPTION>
South West
Pennsylvania Carolina Tennessee Virginia Virginia
Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aggregate cost $45,569 $160,609 $125,487 $366,440 $134,072
------- -------- -------- -------- --------
Gross unrealized appreciation $ 1,049 $ 6,943 $ 4,354 $ 11,826 $ 6,961
Gross unrealized depreciation (937) (4,401) (2,582) (8,888) (2,884)
------- -------- -------- -------- --------
Net unrealized appreciation $ 112 $ 2,542 $ 1,772 $ 2,938 $ 4,077
------- -------- -------- -------- --------
</TABLE>
(5) Shares of Beneficial Interest
The Trust's Declaration permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest. Transactions in Fund shares
were as follows:
<TABLE>
<CAPTION>
Mississippi Fund
Class A Shares ------------------------
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount
- ----------------------------------------------------------------------------
<S> <C> <C>
Shares sold 722 $ 6,983
Shares issued to shareholders in
reinvestment of distributions 78 751
Shares reacquired (469) (4,530)
---- ---------
Net increase (decrease) 331 $ 3,204
---- ---------
Year Ended March 31, 1999 (000 Omitted) Shares Amount
- ----------------------------------------------------------------------------
Shares sold 523 $ 5,207
Shares issued to shareholders in
reinvestment of distributions 147 1,466
Shares reacquired (623) (6,193)
----- ---------
Net increase (decrease) 47 $ 480
----- ---------
Pennsylvania Fund
-----------------------
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount
- ----------------------------------------------------------------------------
Shares sold 448 $ 4,332
Shares issued to shareholders in
reinvestment of distributions 38 362
Shares reacquired (215) (2,069)
------- ---------
Net increase (decrease) 271 $ 2,625
------- ---------
Year Ended March 31, 1999 (000 Omitted) Shares Amount
- ----------------------------------------------------------------------------
Shares sold 443 $ 4,392
Shares issued to shareholders in
reinvestment of distributions 62 614
Shares reacquired (240) (2,376)
-------- ---------
Net increase (decrease) 265 $ 2,630
-------- ---------
<CAPTION>
New York Fund North Carolina Fund
Class A Shares ----------------------- ------------------------
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 313 $ 3,432 630 $ 7,472
Shares issued to shareholders in
reinvestment of distributions 151 1,644 415 4,879
Shares reacquired (871) (9,566) (2,023) (23,859)
---- --------- ------ ---------
Net increase (decrease) (407) $ (4,490) (978) $ (11,508)
---- --------- ------ ---------
Year Ended March 31, 1999 (000 Omitted) Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------
Shares sold 1,889 $ 21,362 6,127 $ 74,691
Shares issued to shareholders in
reinvestment of distributions 298 3,372 826 10,078
Shares reacquired (2,428) (27,459) (8,228) (100,378)
------ --------- ------ ---------
Net increase (decrease) (241) $ (2,725) (1,275) $ (15,609)
------ --------- ------ ---------
South Carolina Fund Tennessee Fund
----------------------- -----------------------
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------
Shares sold 213 $ 2,594 544 $ 5,842
Shares issued to shareholders in
reinvestment of distributions 141 1,708 130 1,369
Shares reacquired (927) (11,191) (1,052) (11,002)
------ --------- ------ ---------
Net increase (decrease) (573) $ (6,889) (378) $ (3,791)
------ --------- ------ ---------
Year Ended March 31, 1999 (000 Omitted) Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------
Shares sold 860 $ 10,768 1,562 $ 17,019
Shares issued to shareholders in
reinvestment of distributions 280 3,515 244 2,671
Shares reacquired (1,345) (16,841) (992) (10,839)
------ --------- ------ ---------
Net increase (decrease) (205) $ (2,558) 814 $ 8,851
------ --------- ------ ---------
</TABLE>
<TABLE>
<CAPTION>
Virginia Fund West Virginia Fund
Class A Shares ----------------------- -----------------------
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 907 $ 10,364 269 $ 3,087
Shares issued to shareholders in
reinvestment of distributions 378 4,257 156 1,776
Shares reacquired (2,044) (23,165) (600) (6,816)
------ --------- ---- ---------
Net decrease (759) $ (8,544) (175) $ (1,953)
------ --------- ---- ---------
Year Ended March 31, 1999 (000 Omitted) Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Shares sold 3,914 $ 45,669 1,029 $ 12,137
Shares issued to shareholders in
reinvestment of distributions 742 8,649 292 3,451
Shares reacquired (5,247) (61,190) (1,003) (11,832)
------ --------- ------ ---------
Net increase (decrease) (591) $ (6,872) 318 $ 3,756
------ --------- ------ ---------
</TABLE>
54
<PAGE>
Notes to Financial Statements (Unaudited) - continued
<TABLE>
<CAPTION>
Mississippi Fund New York Fund North Carolina Fund
Class B Shares --------------------------------------------------------------------------
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 88 $ 858 242 $ 2,660 461 $ 5,499
Shares issued to shareholders in
reinvestment of distributions 9 84 32 344 58 678
Shares reacquired (75) (726) (310) (3,391) (276) (3,263)
--- -------- ---- -------- ---- --------
Net increase (decrease) 22 $ 216 (36) $ (387) 243 $ 2,914
--- -------- ---- -------- ---- --------
Year Ended March 31, 1999 (000 Omitted) Shares Amount Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------------------------------
Shares sold 215 $ 2,140 701 $ 7,932 1,067 $ 13,003
Shares issued to shareholders in
reinvestment of distributions 17 169 57 649 103 1,259
Shares reacquired (162) (1,611) (424) (4,796) (522) (6,357)
---- -------- ------ -------- ------ --------
Net increase 70 $ 698 334 $ 3,875 648 $ 7,905
---- -------- ------ -------- ------ --------
Pennsylvania Fund South Carolina Fund Tennessee Fund
------------------------------------------------------------------------
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------------------------------
Shares sold 225 $ 2,196 307 $ 3,712 256 $ 2,723
Shares issued to shareholders in
reinvestment of distributions 26 255 32 386 23 241
Shares reacquired (204) (1,966) (284) (3,424) (151) (1,580)
---- -------- ------ -------- ----- --------
Net increase 47 $ 485 55 $ 674 128 $ 1,384
---- -------- ------ -------- ----- --------
Year Ended March 31, 1999 (000 Omitted) Shares Amount Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------------------------------
Shares sold 533 $ 5,302 842 $ 10,580 624 $ 6,827
Shares issued to shareholders in
reinvestment of distributions 44 436 53 671 43 470
Shares reacquired (248) (2,458) (235) (2,950) (240) (2,625)
----- -------- --------- -------- --------- --------
Net increase 329 $ 3,280 660 $ 8,301 427 $ 4,672
----- -------- --------- -------- --------- --------
Virginia Fund West Virginia Fund
--------------------------------------------------
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------------------------------
Shares sold 208 $ 2,375 103 $ 1,189
Shares issued to shareholders in
reinvestment of distributions 28 321 19 216
Shares reacquired (318) (3,591) (125) (1,439)
---- -------- ----- --------
Net decrease (82) $ (895) (3) $ (34)
---- -------- ----- --------
Year Ended March 31, 1999 (000 Omitted) Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------------------------------
Shares sold 611 $ 7,115 290 $ 3,412
Shares issued to shareholders in
reinvestment of distributions 53 616 36 426
Shares reacquired (425) (4,951) (179) (2,106)
---- -------- ----- -------
Net increase 239 $ 2,780 147 $ 1,732
---- -------- ----- -------
</TABLE>
<TABLE>
<CAPTION>
North Carolina Fund Virginia Fund
Class C Shares ---------------------------------------------
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 260 $ 3,108 61 $ 694
Shares issued to shareholders in
reinvestment of distributions 14 165 9 100
Shares reacquired (135) (1,591) (146) (1,656)
---- -------- ---- --------
Net increase (decrease) 139 $ 1,682 (76) $ (862)
---- -------- ---- --------
</TABLE>
55
<PAGE>
Notes to Financial Statements (Unaudited) - continued
<TABLE>
<CAPTION>
Year Ended March 31, 1999 (000 Omitted) Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 619 $7,481 325 $3,779
Shares issued to shareholders in
reinvestment of distributions 21 254 12 144
Shares reacquired (149) (1,749) (41) (473)
---- ------ --- ------
Net increase 491 $5,986 296 $3,450
---- ------ --- ------
</TABLE>
(6) Line of Credit
The Trust and other affiliated funds participate in an $820 million unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. 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
the Funds for the six months ended September 30, 1999, ranged from $164 to
$1,399. The Funds had no significant borrowings during the period.
(7) Financial Instruments
The Trust trades financial instruments with off-balance-sheet risk in the normal
course of its investing activities in order to manage exposure to market risks
such as interest rates. These financial instruments include futures contracts.
The notional or contractual amounts of these instruments represent the
investment a 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.
Futures Contracts
<TABLE>
<CAPTION>
Unrealized
Fund Description Expiration Contracts Position Depreciation
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mississippi Fund U.S. Treasury Bonds December 1999 6 Short $ (969)
Municipal Bond Index December 1999 6 Long (1,281)
---------
$ (2,250)
=========
New York Fund U.S. Treasury Bonds December 1999 10 Short $ (1,812)
Municipal Bond Index December 1999 10 Long (2,094)
---------
$ (3,906)
=========
North Carolina Fund U.S. Treasury Bonds December 1999 31 Short $ (3,750)
Municipal Bond Index December 1999 31 Long (7,406)
---------
$ (11,156)
=========
Pennsylvania Fund U.S. Treasury Bonds December 1999 3 Short $ (313)
Municipal Bond Index December 1999 3 Long (562)
---------
$ (875)
=========
South Carolina Fund U.S. Treasury Bonds December 1999 13 Short $ (2,125)
Municipal Bond Index December 1999 13 Long (2,875)
---------
$ (5,000)
=========
Tennessee Fund U.S. Treasury Bonds December 1999 10 Short $ (1,812)
Municipal Bond Index December 1999 10 Long (2,094)
---------
$ (3,906)
=========
Virginia Fund U.S. Treasury Bonds December 1999 30 Short $ (4,500)
Municipal Bond Index December 1999 30 Long (6,906)
---------
$ (11,406)
=========
West Virginia Fund U.S. Treasury Bonds December 1999 11 Short $ (1,406)
Municipal Bond Index December 1999 11 Long (2,750)
---------
$ (4,156)
=========
</TABLE>
At September 30, 1999, each Fund had sufficient cash and/or securities to cover
margin requirements on open futures contracts.
56
<PAGE>
Notes to Financial Statements (Unaudited) - continued
(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 September 30, 1999,
the Mississippi, New York, North Carolina, Pennsylvania, South Carolina,
Virginia, and West Virginia Funds owned the following restricted securities,
excluding securities issued under Rule 144A, constituting 1.9%, 3.6%, 3.8%,
5.6%, 4.5%, 2.5%, and 3.8% of each Fund's net assets, respectively, which may
not be publicly sold without registration under the Securities Act of 1933. Each
Fund does not have the right to demand that such securities be registered. The
value of these securities is determined by valuations furnished by dealers or by
a pricing service, or if not available, in good faith by the Trustees.
<TABLE>
<CAPTION>
Fund Description
- ----------------------------------------------------------------------------------------
<S> <C>
Mississippi Fund Guam Power Authority Rev., 6.673s, 2013
Puerto Rico Public Finance Corp., 6.99s, 2013
New York Fund Guam Power Authority Rev., 6.673s, 2013
Guam Power Authority Rev., 6.673s, 2014
Niagara Falls, NY, Bridge Commission Toll Rev., 6.475s, 2015
North Carolina Fund Puerto Rico Highway & Transportation Authority Rev., 8.272, 2018
Puerto Rico Public Finance Corp., 6.99s, 2016
State of North Carolina, 5.446s, 2015
State of North Carolina, 5.446s, 2017
Pennsylvania Fund Guam Power Authority Rev., 6.673s, 2014
Puerto Rico Public Finance Corp., 6.99s, 2013
South Carolina Fund Puerto Rico Electric Power Authority, 7.25s, 2015
Puerto Rico Public Finance Corp., 6.99s, 2013
Puerto Rico Public Finance Corp., 7.021s, 2019
State of South Carolina, 5.146s, 2016
Virginia Fund Fairfax County, VA, 5.446s, 2016
Fairfax County, VA, 5.446s, 2017
Guam Power Authority Rev., 6.673s, 2015
Puerto Rico Public Finance Corp., 6.99s, 2013
Puerto Rico Public Finance Corp., 7.021s, 2016
West Virginia Fund State of West Virginia Building Commission, 6.646s, 2018
<CAPTION>
Date of Principal
Fund Acquisition Amount Cost Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mississippi Fund 5/20/99 $1,000,000 $1,072,720 $ 970,220
9/30/99 500,000 509,110 509,110
-----------
$ 1,479,330
-----------
New York Fund 5/20/99 1,060,000 1,137,083 $ 1,028,433
5/20/99 500,000 531,950 477,430
5/21/99 3,500,000 3,755,920 3,343,060
-----------
$ 4,848,923
-----------
North Carolina Fund 2/26/99 5,425,000 7,037,418 $ 6,066,126
9/30/99 1,500,000 1,471,890 1,471,890
2/26/99 5,000,000 4,999,600 4,085,800
3/24/99 5,000,000 4,712,500 3,699,600
-----------
$15,323,416
-----------
Pennsylvania Fund 5/20/99 2,170,000 2,308,663 $ 2,072,046
9/30/99 500,000 509,110 509,110
-----------
$ 2,581,156
-----------
South Carolina Fund 9/16/99 1,000,000 976,500 $ 969,960
9/30/99 1,375,000 1,400,053 1,400,052
3/31/99 1,300,000 1,470,326 1,260,844
3/26/99 5,000,000 4,730,700 3,749,300
-----------
$ 7,380,156
-----------
Virginia Fund 4/12/99 3,855,000 3,801,801 $ 3,079,066
4/12/99 3,845,000 3,743,953 3,012,557
5/20/99 1,010,000 1,058,641 950,026
9/30/99 2,000,000 2,036,440 2,036,440
3/31/99 500,000 569,030 497,040
-----------
$ 9,575,129
-----------
West Virginia Fund 5/5/99 5,770,000 6,240,486 $ 5,390,450
-----------
</TABLE>
57
<PAGE>
MFS' Year 2000 Readiness Disclosure
MFS Investment Management(R), as an investment adviser and on behalf of the MFS
funds, is committed to the effective use of technology in managing our portfolio
investments, delivering high-quality service to MFS fund shareholders,
retirement plan participants, and MFS' institutional clients, and supporting the
financial advisers who sell our products. With that in mind, we created a
separately funded Year 2000 Program Management Office in 1996 comprised of a
specialized staff reporting directly to MFS senior management.
The Year 2000 (Y2K) problem arises because calendar-year fields in computers and
software applications traditionally have used two-digit codes so that, for
example, the year 1998 is coded as "98," with the "19" being implied. In the
year 2000, unless necessary corrections have been made, computer applications
may assume "00" refers to 1900 rather than 2000, thus resulting in systems
failures or miscalculations. To address this issue, our team of dedicated
business and technology managers, working with outside experts, is taking steps
to ascertain the Y2K readiness of MFS' internal systems and is working with our
external systems vendors to determine whether they expect their systems to be
ready.
MFS recognizes that fund shareholders and institutional clients also are
concerned about whether the companies whose securities are held in their
portfolios are addressing Y2K issues. As part of the MFS(R) Original
Research(SM) process of evaluating portfolio investments, one of the many
relevant factors that MFS' portfolio managers and research analysts may consider
is a company's Y2K readiness. Each year, MFS' research analysts and portfolio
managers conduct more than 1,000 on-site meetings with companies whose
securities are, or may be, held in fund and client portfolios, and host an
additional 1,500 meetings at MFS' headquarters. When assessing the Y2K readiness
of these companies, MFS' research analysts and portfolio managers may rely upon
discussions at these meetings as well as SEC disclosure documents and
third-party reports.
Y2K readiness is an enormously complex, worldwide issue. No company or
institution can guarantee that it will be unaffected by the Y2K issue. While MFS
is taking significant steps to protect the integrity of its internal systems,
there can be no assurance that these steps will be sufficient to avoid any
adverse impact on MFS, shareholders of MFS funds, participants in retirement
plans administered by MFS, or MFS' institutional clients.
If you have further questions regarding MFS' Year 2000 Readiness Program, please
visit our Web site at www.mfs.com or contact the MFS Year 2000 Program
Management Office by e-mail at [email protected] or by letter at 500 Boylston Street,
Boston, MA 02116-3741.
58
<PAGE>
MFS Family of Funds(R)
MFS offers a range of mutual funds to meet investors' varying financial needs
and goals. The funds are placed below in descending order of the level of risk
and reward each one offers in relation to the others in that asset class.(1) The
objective of the fund you choose should correspond to your financial needs and
goals.
HIGHER RISK/HIGHER REWARD POTENTIAL
BOND FUNDS
MFS(R) Global Governments Fund
MFS(R) High Yield Opportunities Fund
MFS(R) High Income Fund
MFS(R) Municipal High Income Fund
MFS(R) Strategic Income Fund
MFS(R) Municipal State Funds
AL, AR, CA, FL, GA, MD, MA, MS,
NY, NC, PA, SC, TN, VA, WV
MFS(R) Municipal Income Fund
MFS(R) Bond Fund
MFS(R) Municipal Bond Fund
MFS(R) Government Securities Fund
MFS(R) Government Mortgage Fund
MFS(R) Intermediate Income Fund
MFS(R) Municipal Limited Maturity Fund
MFS(R) Limited Maturity Fund
MFS(R) Government Limited Maturity Fund
STOCK FUNDS
MFS(R)/Foreign & Colonial Emerging Markets Equity Fund
MFS(R) Managed Sectors Fund
MFS(R) New Discovery Fund
MFS(R) Emerging Growth Fund
MFS(R) Mid Cap Growth Fund
MFS(R) International Growth Fund
MFS(R) Research International Fund
MFS(R) Global Growth Fund
MFS(R) Strategic Growth Fund
MFS(R) Research Fund
MFS(R) International Growth and Income Fund
MFS(R) Global Equity Fund
MFS(R) Capital Opportunities Fund
Massachusetts Investors Growth Stock Fund
MFS(R) Growth Opportunities Fund
MFS(R) Large Cap Growth Fund
MFS(R) Union Standard(R) Equity Fund
MFS(R) Research Growth and Income Fund
Massachusetts Investors Trust
MFS(R) Equity Income Fund
MFS(R) Utilities Fund
MFS(R) Global Total Return Fund
MFS(R) Total Return Fund
MFS(R) Global Asset Allocation Fund
LOWER RISK/LOWER REWARD POTENTIAL
(1) For information on the specific risks, charges, and expenses associated with
any MFS fund, refer to the prospectus. Read it carefully before investing or
sending money.
59
<PAGE>
Diversifying Your Investment Portfolio
[Graphic of person looking at three diverse groups of nest eggs]
Most experts agree that it's wise to diversify your investments, no matter what
your age or financial situation. Diversification -- spreading your assets among
a variety of investment types -- can help spread your risk as well.
No one type of investment performs well all the time. In fact, each type of
investment tends to follow its own cycle, so that when the price of one is
rising, the price of another may be declining. By including a range of
investments in your portfolio, the overall volatility -- or change in value --
of that portfolio should be less than if you put everything in one type of
investment.
MFS offers a wide variety of investments to suit a wide range of needs. For more
information, talk to your financial consultant or request our We're MFS kit. For
details about a specific MFS fund, ask for a prospectus including charges and
expenses. Read the prospectus carefully before you invest or send money.
For more information, call MFS at 1-800-225-2606 any business day from 8 a.m. to
8 p.m. Eastern time or visit our Web site at www.mfs.com.
60
<PAGE>
MFS(R) Municipal Series Trust
Trustees
Richard B. Bailey* - Private Investor;
Former Chairman and Director (until 1991),
MFS Investment Management
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, Colonial Insurance Company, Ltd.
Abby M. O'Neill - Private Investor
Walter E. Robb, III - President and Treasurer,
Benchmark Advisors, Inc.; President,
Benchmark Consulting Group, Inc.
Arnold D. Scott* - Senior Executive Vice
President, Director, and Secretary, MFS
Investment Management
Jeffrey L. Shames* - Chairman, Chief Executive
Officer, and Director, MFS Investment Management
J. Dale Sherratt - President, Insight Resources,
Inc.; Managing General Partner, Wellfleet
Investments; Chief Executive Officer,
Cambridge Nutraceuticals
Ward Smith - Former Chairman (until 1994),
NACCO Industries (holding company)
Investment Adviser
Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116-3741
Distributor
MFS Fund Distributors, Inc.
500 Boylston Street
Boston, MA 02116-3741
Chairman and President
Jeffrey L. Shames*
Portfolio Managers
Michael L. Dawson*
Christopher J. Mier*
Geoffrey L. Schechter*
Treasurer
W. Thomas London*
Assistant Treasurers
Mark E. Bradley*
Ellen Moynihan*
James O. Yost*
Secretary
Stephen E. Cavan*
Assistant Secretary
James R. Bordewick, Jr.*
Custodian
State Street Bank and Trust Company
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.
World Wide Web
www.mfs.com
*Affiliated with the Investment Adviser
61
<PAGE>
MFS(R) Municipal -----------------
Series Trust Bulk Rate
U.S. Postage
Paid
MFS(R) Mississippi Municipal Bond Fund MFS
MFS(R) New York Municipal Bond Fund -----------------
MFS(R) North Carolina Municipal Bond Fund
MFS(R) Pennsylvania Municipal Bond Fund
MFS(R) South Carolina Municipal Bond Fund
MFS(R) Tennessee Municipal Bond Fund
MFS(R) Virginia Municipal Bond Fund
MFS(R) West Virginia Municipal Bond Fund
[MFS LOGO]
INVESTMENT MANAGEMENT
We invented the mutual fund(R)
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Boston, MA 02116-3741
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(C)1999 MFS Investment Management.(R)
MFS(R) investment products are offered through
MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116. MST-3B-11/99/44.7M
