[Front Cover]
[MFS 75 Years Logo]
MFS[RegTM] MUNICIPAL
SERIES TRUST
Semiannual Report [bullet] September 30, 1999
For the States of: Alabama, Arkansas,
California, Florida, Georgia, Maryland,
and Massachusetts
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Letter from the Chairman .................... 1
Management Review and Outlook ............... 2
Performance Summary ......................... 4
Portfolio of Investments .................... 7
Financial Statements ........................ 21
Notes to Financial Statements ............... 44
MFS' Year 2000 Readiness Disclosure ......... 51
Trustees and Officers ....................... 53
</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 ResearchSM 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]
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE>
Letter from the Chairman
Dear Shareholders,
[Picture of Jeffrey L. Shames]
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,
[Signature of 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
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-rated 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,
[Signatures of Michael L. Dawson, Christopher J. Mier, 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>
- --------------------------------------------------------------------------------
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.
<TABLE>
<CAPTION>
Commencement of investment operations: Class inception:
<S> <C> <C> <C> <C>
Alabama February 1, 1990 Alabama Class A February 1, 1990
Arkansas February 3, 1992 Class B September 7, 1993
California June 18, 1985 Arkansas Class A February 3, 1992
Florida February 3, 1992 Class B September 7, 1993
Georgia June 6, 1988 California Class A June 18, 1985
Maryland October 31, 1984 Class B September 7, 1993
Massachusetts April 9, 1985 Class C January 3, 1994
Net assets as of September 30, 1999: Florida Class A February 3, 1992
Alabama $ 85.1 million Class B September 7, 1993
Arkansas $127.1 million Georgia Class A June 6, 1988
California $284.3 million Class B September 7, 1993
Florida $ 87.6 million Maryland Class A October 31, 1984
Georgia $ 66.9 million Class B September 7, 1993
Maryland $150.6 million Massachusetts Class A April 9, 1985
Massachusetts $249.8 million 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] Alabama 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 -2.83% -1.57% +15.00% +32.53% +87.65%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -1.57% +4.77% +5.79% +6.73%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -6.24% +3.08% +4.77% +6.20%
- ---------------------------- ------ ------ ------ ------ ------
<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 -3.19% -2.30% +12.43% +27.46% +79.05%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -2.30% +3.98% +4.97% +6.21%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -6.03% +3.08% +4.64% +6.21%
- ---------------------------- ------ ------ ------ ------ ------
</TABLE>
*For the period from the commencement of the Fund's investment operations,
February 1, 1990, through September 30, 1999.
MFS[RegTM] Arkansas 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 -2.10% -1.25% +15.00% +29.65% +52.99%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -1.25% +4.77% +5.33% +5.71%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -5.94% +3.08% +4.31% +5.04%
- ---------------------------- ------ ------ ------ ------ ------
<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 -2.54% -1.91% +12.43% +24.63% +45.21%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -1.91% +3.98% +4.50% +4.99%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -5.68% +3.05% +4.16% +4.99%
- ---------------------------- ------ ------ ------ ------ ------
</TABLE>
*For the period from the commencement of the Fund's investment operations,
February 3, 1992, through September 30, 1999.
4
<PAGE>
Performance Summary - continued
MFS[RegTM] California 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 -3.08% -1.92% +16.81% +35.58% +94.92%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -1.92% +5.32% +6.28% +6.90%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -6.58% +3.62% +5.25% +6.38%
- ---------------------------- ------ ------ ------ ------ ------
<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 -3.46% -2.68% +14.02% +29.91% +84.65%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -2.68% +4.47% +5.37% +6.32%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -6.42% +3.55% +5.05% +6.32%
- ---------------------------- ------ ------ ------ ------ ------
</TABLE>
<TABLE>
<CAPTION>
Class C Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
---------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge -3.51% -2.82% +13.43% +29.01% +84.18%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -2.82% +4.29% +5.23% +6.30%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -3.76% +4.29% +5.23% +6.30%
- ---------------------------- ------ ------ ------ ------ ------
</TABLE>
MFS[RegTM] Florida 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 -3.10% -2.25% +13.20% +31.26% +53.90%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -2.25% +4.22% +5.59% +5.79%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -6.90% +2.54% +4.57% +5.12%
- ---------------------------- ------ ------ ------ ------ ------
<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 -3.40% -3.05% +10.52% +25.94% +45.85%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -3.05% +3.39% +4.72% +5.05%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -6.77% +2.47% +4.39% +5.05%
- ---------------------------- ------ ------ ------ ------ ------
</TABLE>
*For the period from the commencement of the Fund's investment operations,
February 3, 1992, through September 30, 1999.
MFS[RegTM] Georgia 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 -2.97% -2.28% +14.92% +30.63% +88.05%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -2.28% +4.74% +5.49% +6.52%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -6.92% +3.06% +4.47% +6.00%
- ---------------------------- ------ ------ ------ ------ ------
<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 -3.43% -3.10% +12.24% +25.64% +79.27%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -3.10% +3.93% +4.67% +6.01%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -6.82% +3.00% +4.34% +6.01%
- ---------------------------- ------ ------ ------ ------ ------
</TABLE>
MFS[RegTM] Maryland 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 -2.98% -2.51% +13.90% +29.63% +78.54%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -2.51% +4.43% +5.33% +5.97%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -7.15% +2.75% +4.31% +5.45%
- ---------------------------- ------ ------ ------ ------ ------
<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 -3.30% -3.15% +11.68% +25.32% +71.14%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -3.15% +3.75% +4.62% +5.52%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -6.87% +2.83% +4.28% +5.52%
- ---------------------------- ------ ------ ------ ------ ------
</TABLE>
MFS[RegTM] Massachusetts 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 -3.13% -2.15% +13.90% +30.69% +86.81%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -2.15% +4.43% +5.50% +6.45%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -6.80% +2.75% +4.48% +5.93%
- ---------------------------- ------ ------ ------ ------ ------
<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 -3.44% -2.78% +11.68% +26.42% +79.34%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Excluding Sales Charge -- -2.78% +3.75% +4.80% +6.02%
- ---------------------------- ------ ------ ------ ------ ------
Average Annual Total Return
Including Sales Charge -- -6.50% +2.84% +4.47% +6.02%
- ---------------------------- ------ ------ ------ ------ ------
</TABLE>
5
<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.
6
<PAGE>
Portfolio of Investments (Unaudited) - September 30, 1999
MFS ALABAMA MUNICIPAL BOND FUND
Municipal Bonds - 97.7%
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- -------------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 14.2%
Birmingham, AL, 5.75s, 2019 $2,000 $ 2,022,760
Commonwealth of Puerto Rico, Aqueduct &
Sewer Authority Rev., 5s, 2015 1,300 1,216,085
Florence, AL, Warrants, FSA, 5s, 2018 850 781,915
Huntsville, AL, 5.5s, 2020 1,000 970,090
Puerto Rico Public Buildings Authority,
Government Facilities, AMBAC, 6.25s, 2013 2,000 2,197,520
Russell County, AL, Warrants, AMBAC, 5s, 2017 1,595 1,476,125
Shelby County, AL, 7.4s, 2007 1,000 1,074,770
Shelby County, AL, 7.7s, 2017 800 858,248
Shelby County, AL, MBIA, 0s, 2011 3,000 1,469,520
-----------
$12,067,033
- -------------------------------------------------------------------------------------------
State and Local Appropriation - 1.8%
Puerto Rico Public Buildings Authority, Education
& Health, 5.6s, 2008 $ 500 $ 518,570
Puerto Rico Public Finance Corp., AMBAC, 5.375s,
2013 ++++ + 500 509,110
Puerto Rico Public Finance Corp., AMBAC, 7.021s,
2016 ++++ + 500 497,040
-----------
$ 1,524,720
- -------------------------------------------------------------------------------------------
Refunded and Special Obligations - 8.5%
Alabama Agriculture & Mechanics University
Rev., MBIA, 5.75s, 2005 $ 500 $ 536,905
Baldwin County, AL, Eastern Shore Health Care
(Thomas Hospital), 8.5s, 2001 1,000 1,080,530
Birmingham, AL, Waterworks & Sewer Board
Rev., 5.375s, 2006 2,000 2,093,180
Gadsden East, AL, Medical Clinic Board Rev.
(Baptist Hospital), 7.8s, 2001 2,000 2,178,920
Montgomery County, AL, Department of Human
Resources Rev., 7s, 2010 1,000 1,059,100
State of Alabama, 7.1s, 2000 250 261,613
-----------
$ 7,210,248
- -------------------------------------------------------------------------------------------
Airport and Port Revenue - 6.3%
Alabama Docks Department Facilities Rev., MBIA,
5.375s, 2017 $1,000 $ 959,210
Alabama Docks Department Facilities Rev., MBIA,
5.5s, 2022 1,000 965,840
Birmingham, AL, Airport Authority, Airport Rev.,
AMBAC, 5.5s, 2013 [sec][sec] 1,465 1,404,393
Mobile, AL, Airport Authority Rev., 7.375s, 2012 1,000 1,042,770
Mobile, AL, Airport Authority Rev., 8.875s, 2015 927 965,915
-----------
$ 5,338,128
- -------------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 7.3%
DeKalb & Cherokee County, AL, Gas Rev.,
AMBAC, 5.4s, 2016 $2,000 $ 1,961,140
Guam Power Authority Rev., RITES, AMBAC,
6.673s, 2013 ++++ + 500 485,110
Guam Power Authority Rev., RITES, AMBAC,
6.673s, 2018 ++++ + 4,500 3,802,860
-----------
$ 6,249,110
- -------------------------------------------------------------------------------------------
Health Care Revenue - 7.2%
Alabama Special Care Facilities Financing
Authority (Daughters of Charity), AMBAC,
5s, 2025 $1,500 $ 1,315,875
Baldwin County, AL, Eastern Shore Health Care
(Thomas Hospital), 6.75s, 2015 1,000 1,041,990
Cullman, AL, Medical Park South Clinic, "A",
6.5s, 2023 1,000 1,020,500
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Health Care Revenue - continued
Montgomery, AL, Medical Clinic Board Rev.
(Jackson Hospital & Clinic), 7s, 2015 $2,030 $ 2,073,808
Valley, AL, Special Care Facilities Financing
Authority (Lanier Memorial Hospital), 5.65s, 2022 735 670,511
-----------
$ 6,122,684
- -------------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 9.0%
Butler, AL, Industrial Development Board, Solid
Waste Rev. (James River Corp.), 8s, 2028 $1,000 $ 1,103,930
Camden, AL, Industrial Development Board
Pollution Control Rev. (Macmillian Bloedel),
7.75s, 2009 500 521,440
Courtland, AL, Industrial Development Board,
Solid Waste Disposal Rev. (Champion
International), 5.9s, 2017 1,000 976,400
Courtland, AL, Industrial Development Board,
Solid Waste Disposal Rev. (Champion
International), 7.75s, 2020 1,485 1,523,669
Courtland, AL, Industrial Development Board,
Solid Waste Disposal Rev. (Champion
International), 6s, 2029 1,000 952,070
Piedmont, AL, Industrial Development Board Rev.
(Springs Industries), 8.25s, 2010 1,000 1,044,290
Tarrant City, AL, Industrial Development Board
Rev. (Vulcan Materials), 7.5s, 2011 1,500 1,568,850
-----------
$ 7,690,649
- -------------------------------------------------------------------------------------------
Insured Health Care Revenue - 9.0%
Alabama Special Care Facilities Financing
Authority (Daughters of Charity), AMBAC,
5s, 2025 $1,000 $ 876,050
Huntsville, AL, Health Care Authority Rev., MBIA,
6.375s, 2022 ### 850 890,290
Huntsville, AL, Health Care Authority, MBIA, 5s,
2023 ### 1,000 884,680
Lauderdale County & Florence, AL (Coffee Health
Group), MBIA, 5.75s, 2014 1,000 994,720
Lauderdale County & Florence, AL (Eliza Coffee
Memorial Hospital), MBIA, 5.75s, 2014 1,000 1,019,990
Montgomery, AL, Medical Clinic Board Rev.
(Jackson Hospital & Clinic), AMBAC,
5.875s, 2016 1,000 1,027,050
Montgomery, AL, Special Care Facilities Financing
Authority Rev. (Baptist Health), MBIA, 5.25s, 2013 850 828,214
Montgomery, AL, Special Care Facilities Financing
Authority Rev. (Baptist Health), MBIA,
5.375s, 2019 1,150 1,100,389
-----------
$ 7,621,383
- -------------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 2.1%
Alabama Housing Finance Authority, Multi-Family
Residential Development Rev. (St. Jude), FHA,
7.25s, 2023 $1,355 $ 1,427,411
Puerto Rico Housing Finance Corp., Multi-Family
Mortgage Rev., 7.5s, 2015 355 364,401
-----------
$ 1,791,812
- -------------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 1.1%
Territory of Virgin Islands Public Finance
Authority, 5.5s, 2018 $1,000 $ 947,950
- -------------------------------------------------------------------------------------------
Single Family Housing Revenue - 4.4%
Alabama Housing Finance Authority, Single Family
Mortgage Rev., GNMA, 6.55s, 2014 $ 940 $ 976,350
</TABLE>
7-MAL
<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
Alabama Housing Finance Authority, Single Family
Mortgage Rev., GNMA, 5.7s, 2015 $1,555 $ 1,566,989
Alabama Housing Finance Authority, Single Family
Mortgage Rev., GNMA, 7.4s, 2022 515 523,369
Alabama Housing Finance Authority, Single Family
Mortgage Rev., GNMA, 7.5s, 2022 320 328,950
Alabama Housing Finance Authority, Single Family
Mortgage Rev., GNMA, 7.6s, 2022 90 91,348
Alabama Housing Finance Authority, Single Family
Mortgage Rev., GNMA, 7.75s, 2022 235 241,822
-----------
$ 3,728,828
- -------------------------------------------------------------------------------------------
Turnpike Revenue - 2.2%
Puerto Rico Highway & Transportation Authority,
FSA, 5s, 2016 $2,000 $ 1,886,740
- -------------------------------------------------------------------------------------------
Universities - 5.3%
Alabama Agricultural & Mechanical University
Rev., MBIA, 5.25s, 2013 $ 500 $ 492,995
Alabama Board of Education Rev. (Shelton State
Community College), MBIA, 6s, 2014 1,000 1,048,700
Alabama Board of Education Rev. (Southern
Union Community College), MBIA, 5s, 2018 1,000 906,910
Alabama Public School & College, Capital
Improvement Series C, 5.75s, 2017 1,000 1,008,840
Homewood, AL, Educational Building Authority,
Educational Facilities Rev. (Samford University),
6.5s, 2016 1,000 1,046,930
-----------
$ 4,504,375
- -------------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 12.1%
Alabama Water Pollution Control Authority,
AMBAC, 5.5s, 2020 $1,500 $ 1,454,550
Arab, AL, Waterworks Board, Water Rev., MBIA,
7.05s, 2016 1,000 1,056,700
Bessemer, AL, Water Rev., AMBAC, 5.75s, 2026 1,000 998,650
Birmingham, AL, Water & Sewer Rev., Warrants,
AMBAC, 5.125s, 2014 1,410 1,346,987
Birmingham, AL, Water & Sewer Rev., Warrants,
AMBAC, 5.125s, 2017 1,000 936,070
Fairview, AL, Water Rev. (East Cullman), AMBAC,
8s, 2020 955 990,574
Limestone County, AL, Water Authority Rev., FGIC,
5.5s, 2026 2,650 2,538,408
Madison, AL, Water & Waste Board, MBIA,
5.5s, 2019 1,000 971,380
-----------
$10,293,319
- -------------------------------------------------------------------------------------------
Other - 7.2%
Alabama Building Renovation Finance Authority
Rev., 6s, 2014 $1,515 $ 1,565,162
Alabama Building Renovation Finance Authority
Rev. (Fitch Light), 7.45s, 2011 1,500 1,567,425
Birmingham, AL, Downtown Redevelopment
Authority, Social Security Administration Building
Rev., 0s to 2000, 12.5s to 2010 2,435 3,019,156
-----------
$ 6,151,743
- -------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $82,186,096) $83,128,722
- -------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 2.3%
- -----------------------------------------------------
Harris County, TX, Industrial Development Corp.
(Shell Oil Co.), due 10/01/99 $1,000 $ 1,000,000
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Floating Rate Demand Notes - continued
- -------------------------------------------------------------------------------------------
Pinellas County, FL, Health Facility Authority,
due 10/01/99 $ 300 $ 300,000
Stevenson, AL, Industrial Development Board,
Environmental Improvement Rev. (Mead Corp.),
due 10/01/99 700 700,000
- -------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 2,000,000
- -------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $84,186,096) $85,128,722
Other Assets, Less Liabilities (16,745)
- -------------------------------------------------------------------------------------------
Net assets - 100.0% $85,111,977
- -------------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
8 - MAL
<PAGE>
Portfolio of Investments (Unaudited) - September 30, 1999
MFS ARKANSAS MUNICIPAL BOND FUND
Municipal Bonds - 97.7%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- -------------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 5.3%
Arkansas College Savings, "A", 0s, 2015 $2,575 $ 1,081,345
Arkansas College Savings, "A", 0s, 2017 2,590 955,296
Arkansas College Savings, "B", 0s, 2012 1,200 614,436
Arkansas College Savings, "B", 0s, 2013 1,000 479,880
Arkansas College Savings, "B", 0s, 2014 1,150 514,844
Arkansas College Savings, "B", 0s, 2015 1,600 671,904
Arkansas College Savings, "C", 0s, 2014 1,000 447,690
Arkansas Water Resources Development
Authority, 6.375s, 2021 1,000 1,029,280
Commonwealth of Puerto Rico, 5.4s, 2025 1,000 961,020
-----------
$ 6,755,695
- -------------------------------------------------------------------------------------------
State and Local Appropriation - 4.5%
Arkansas Development Finance Authority, Local
Government Rev., 7.1s, 2008 $2,440 $ 2,557,828
Arkansas Development Finance Authority, Single
Family Mortgage Rev., 0s, 2011 5,000 2,128,150
Puerto Rico Public Finance Corp., AMBAC, 5.375s, 2016 1,000 990,530
-----------
$ 5,676,508
- -------------------------------------------------------------------------------------------
Refunded and Special Obligations - 12.8%
Arkansas Development Finance Authority, Water
& Sewer Rev., MBIA, 7s, 2001 $2,050 $ 2,162,217
Arkansas Housing Development Agency, Single
Family Mortgage Rev., 8.375s, 2011 ### 1,000 1,253,790
Arkansas Water Resources Development
Authority, 6.375s, 2012 ### 1,000 1,040,660
Baxter County, AR, Hospital Rev., 7.5s, 2002 3,145 3,474,376
Harrison, AR, Residential Housing Facilities Board,
Single Family Mortgage Rev., FGIC, 7.4s, 2011 4,000 4,733,280
North Little Rock, AR, Electric Rev., MBIA, 6.5s, 2002 1,000 1,074,530
Pulaski County, AR, Health Facilities Board Rev.
(Sisters of Charity), MBIA, 6s, 2002 1,000 1,066,550
Sherwood, AR, Residential Housing Facilities
Board, Single Family Mortgage Rev., MBIA,
7.5s, 2011 1,250 1,477,562
-----------
$16,282,965
- -------------------------------------------------------------------------------------------
Airport and Port Revenue - 0.6%
Little Rock, AR, Airport Rev., FSA, 5.25s, 2019 $ 800 $ 758,080
- -------------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 13.1%
Commonwealth of Puerto Rico, Electric Power
Authority, Power Rev., MBIA, 5.25s, 2016 $ 500 $ 490,055
Jefferson County, AR, Pollution Control Rev.
(Arkansas Power & Light), 6.3s, 2018 1,050 1,086,015
North Little Rock, AR, Electric Rev., MBIA, 6.5s, 2010 2,000 2,217,900
North Little Rock, AR, Electric Rev., MBIA, 6.5s, 2015 6,000 6,678,900
Pope County, AR, Solid Waste Disposal Rev.
(Arkansas Power & Light), 8s, 2020 1,780 1,868,163
Pope County, AR, Solid Waste Disposal Rev.
(Arkansas Power & Light), 8s, 2021 3,000 3,160,290
Virgin Islands Water & Power Authority Rev.,
ASST GTY, 5.3s, 2018 1,250 1,181,563
-----------
$16,682,886
- -------------------------------------------------------------------------------------------
Health Care Revenue - 6.2%
Arkansas Development Finance Authority Rev.
(White River Medical Center), 5.55s, 2019 $ 500 $ 462,695
Baxter County, AR, Hospital Rev., 5.6s, 2021 1,500 1,380,870
Little Rock, AR, Health Facilities Board (Baptist
Medical Center), 6.9s, 2009 1,400 1,550,486
Little Rock, AR, Health Facilities Board (Baptist
Medical Center), 7s, 2017 3,250 3,431,935
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Health Care Revenue - continued
Pulaski County, AR, Hospital Rev. (Children's
Hospital), 6.15s, 2017 $1,000 $ 1,022,630
-----------
$ 7,848,616
- -------------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 7.8%
Blytheville, AR, Solid Waste Recycling &
Sewerage Treatment Rev. (Nucor), 6.375s, 2023 $3,565 $ 3,702,145
Camden, AR, Environmental Improvement Rev.
(International Paper), 7.625s, 2018 1,000 1,119,580
Jonesboro, AR, Industrial Development Rev.
(Anheuser-Busch), 6.5s, 2012 3,500 3,717,665
Little River County, AR (Georgia Pacific Corp.),
5.6s, 2026 1,000 918,150
Pine Bluff, AR, Environmental Improvement Rev.
(International Paper Co.), 5.55s, 2022 500 465,085
-----------
$ 9,922,625
- -------------------------------------------------------------------------------------------
Insured Health Care Revenue - 8.7%
Arkansas Development Finance Authority, Health
Facilities Rev. (Sisters of Mercy), MBIA, 5s, 2013 $6,340 $ 6,172,497
Arkansas Development Finance Authority, Health
Facilities Rev. (Sisters of Mercy), MBIA, 5s, 2019 4,000 3,661,800
Arkansas Development Finance Authority Rev.,
AMBAC, 5.375s, 2019 1,315 1,265,990
-----------
$11,100,287
- -------------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 1.9%
Pulaski County, AR, Public Facilities Board,
GNMA, 5.75s, 2034 $2,000 $ 1,919,280
West Memphis, AR, Public Facilities Board
Mortgage Rev., AMBAC, 0s, 2011 1,090 535,157
-----------
$ 2,454,437
- -------------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 3.3%
Little Rock, AR, Hotel & Restaurant Gross
Receipts Tax Rev., 7.375s, 2015 $2,790 $ 3,251,661
Virgin Islands Public Finance Authority, 5.5s, 2022 1,000 939,190
-----------
$ 4,190,851
- -------------------------------------------------------------------------------------------
Single Family Housing Revenue - 12.3%
Arkansas Development Finance Authority Rev.,
5.3s, 2023 $1,000 $ 998,160
Arkansas Development Finance Authority, Single
Family Mortgage Rev., GNMA, 7.4s, 2023 985 1,018,825
Arkansas Development Finance Authority, Single
Family Mortgage Rev., GNMA, 6.7s, 2027 2,765 2,860,613
Arkansas Development Finance Authority, Single
Family Mortgage Rev., GNMA, 7.45s, 2027 1,305 1,400,500
Jefferson County, AR, Health Care & Residential
Facilities Board, 7.25s, 2011 620 641,235
Lonoke County, AR, Residential Housing Facilities
Board, 7.375s, 2011 143 150,391
Lonoke County, AR, Residential Housing Facilities
Board, FNMA, 7.9s, 2011 585 627,297
Mississippi County, AR, Public Facilities Board,
Mortgage Rev., 7.2s, 2010 725 777,700
North Little Rock, AR, Residential Housing
Facilities Board, 0s, 2010 11,526 5,419,756
Pulaski County, AR, Public Facilities Board Rev.,
FNMA, 0s, 2014 2,750 1,198,890
Saline County, AR, Residential Housing Facilities
Board, 7.875s, 2011 575 604,015
-----------
$15,697,382
- -------------------------------------------------------------------------------------------
</TABLE>
9-MAR
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Solid Waste Revenue - 0.8%
Ashdown, AR, Pollution Control Rev. (Nekoosa
Papers, Inc.), 4.75s, 2008 $1,000 $ 952,980
- -------------------------------------------------------------------------------------------
Student Loan Revenue - 2.4%
Arkansas Student Loan Authority Rev., 7.15s, 2002 $ 205 $ 211,953
Arkansas Student Loan Authority Rev., 6.75s, 2006 765 781,746
Arkansas Student Loan Authority Rev., "B", 6.25s, 2010 2,000 2,073,220
------------
$ 3,066,919
- -------------------------------------------------------------------------------------------
Turnpike Revenue - 1.9%
Puerto Rico Highway & Transportation Authority,
FSA, 5s, 2016 $2,605 $ 2,457,479
- -------------------------------------------------------------------------------------------
Universities - 4.4%
Arkansas State University Rev., AMBAC, 5s, 2019 $1,000 $ 906,240
Conway, AR, Public Facilities Rev. (Hendrix
College), 5.85s, 2016 1,000 995,540
Pope County, AR, Residential Housing Facilities
Board (Arkansas Tech University), 6s, 2027 1,000 931,960
University of Arkansas Rev., Athletic Facilities
(Razorback Stadium), AMBAC, 4.85s, 2014 500 458,405
University of Arkansas Rev., MBIA, 5.05s, 2019 2,500 2,311,150
------------
$ 5,603,295
- -------------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 11.7%
Arkansas Development Finance Authority,
Revolving Loan Fund, 5.85s, 2019 $2,130 $ 2,149,021
Arkansas Development Finance Authority, Waste
Water Systems Rev., 4.875s, 2017 1,500 1,356,750
Arkansas Development Finance Authority, Water
& Sewer Rev., MBIA, 5s, 2012 1,000 983,540
Beaver, AR, Water District, Benton & Washington
Counties, Water & Sewer Rev., MBIA, 5.85s, 2008 2,000 2,091,560
Fort Smith, AR, AMBAC, 5.65s, 2019 1,000 994,000
Fort Smith, AR, Water & Sewer Rev., MBIA, 6s, 2012 2,250 2,380,703
Russellville, AR, Water Systems Rev., AMBAC,
6.25s, 2012 1,365 1,428,513
South Sebastian County, AR, Water Users Assn.,
5.95s, 2013 2,425 2,431,863
South Sebastian County, AR, Water Users Assn.,
6.15s, 2023 1,000 1,004,110
------------
$ 14,820,060
- -------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $120,156,001) $124,271,065
- -------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.1%
- -------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Rev.
(Aces Presbyterian University Hospital), due
10/01/99 $ 100 $ 100,000
Harris County, TX, Hospital Rev. (Methodist
Hospital), due 10/01/99 400 400,000
North Little Rock, AR, Health Facilities Board
Baptist Health, due 10/01/99 200 200,000
Pinellas County, FL, Health Facility Authority, due
10/01/99 700 700,000
- -------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 1,400,000
- -------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $121,556,001) $125,671,065
Other Assets, Less Liabilities - 1.2% 1,475,830
- -------------------------------------------------------------------------------------------
Net assets - 100.0% $127,146,895
- -------------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
MFS CALIFORNIA MUNICIPAL BOND FUND
Municipal Bonds - 97.9%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- ------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 12.8%
Corona, CA, Unified School District, "A", FSA,
5.375s, 2018 $1,350 $ 1,316,156
Fresno, CA, Unified School District, MBIA,
5.9s, 2019 [sec][sec] 1,960 2,042,810
Los Angeles, CA, FGIC, 6.772s, 2014 ++++ + 5,405 5,302,737
Los Angeles, CA, Unified School District, MBIA,
5.625s, 2015 4,890 4,952,299
Los Angeles, CA, Unified School District, FGIC,
5s, 2021 1,000 919,060
Lucia Mar, CA, Unified School District, FGIC, 0s,
2013 1,350 635,175
State of California, 10s, 2007 1,055 1,426,740
State of California, 6.5s, 2010 1,235 1,394,327
State of California, 5s, 2015 500 476,165
State of California, AMBAC, 7.2s, 2008 1,600 1,870,448
State of California, AMBAC, 6.3s, 2010 6,000 6,668,460
State of California, AMBAC, 7s, 2010 2,000 2,321,480
State of California, FGIC, 5.772s, 2015 ++++ + 5,000 4,129,700
Tehachapi, CA, Unified School District, FGIC,
5.625s, 2020 1,100 1,098,966
Walnut Valley, CA, Unified School District,
AMBAC, 6s, 2011 1,600 1,733,424
-----------
$36,287,947
- ------------------------------------------------------------------------------------
State and Local Appropriation - 14.7%
Banning, CA, Water System Improvement,
Certificates of Participation, AMBAC, 8s, 2019 $1,000 $ 1,231,620
Bassett, CA, Unified School District, Certificates
of Participation, FSA, 4.75s, 2017 1,000 897,200
California Public Works Board, Lease Rev.
(Department of Corrections), 5.55s, 2010 4,000 4,195,000
California Public Works Board, Lease Rev.
(Department of Corrections), 7.4s, 2010 5,000 5,974,150
California Public Works Board, Lease Rev.
(Department of Corrections), MBIA, 5.5s, 2015 4,500 4,545,900
Fortuna, Parlier & Susanville, CA, Certificates of
Participation, "B", 7.375s, 2017 930 964,596
Grossmont, CA, Union High School District,
Certificates of Participation, MBIA, 0s, 2006 6,000 4,304,520
Inglewood, CA, Public Financing Authority Rev.,
AMBAC, 5.625s, 2015 1,740 1,763,960
Los Angeles, CA, Building Authority Rev., MBIA,
5.625s, 2011 3,375 3,539,126
Los Angeles, CA, Convention & Exhibition Center
Authority, Certificates of Participation, AMBAC,
0s, 2005 2,400 1,835,424
Pasadena, CA, Certificates of Participation
(Pasadena Parking Facilities), 6.25s, 2018 3,460 3,706,145
Pomona, CA, Public Financing Authority Rev.,
6.25s, 2010 4,020 4,298,827
Riverside County, CA, Certificates of Participation,
MBIA, 5s, 2018 1,230 1,135,536
Visalia, CA, Utility Systems Department,
Certificates of Participation, MBIA, 0s, 2005 4,655 3,512,523
-----------
$41,904,527
- ------------------------------------------------------------------------------------
Refunded and Special Obligations - 18.2%
California Health Facilities Financing Authority
Rev. (AIDS Hospice Foundation), 7.15s, 2000 $2,785 $ 2,864,456
California Health Facilities Financing Authority
Rev. (St. Joseph's Hospital), CHFC, 6.75s, 2001 2,710 2,890,053
</TABLE>
10 - MCA
<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
California Statewide Community Development
Authority, Certificates of Participation, CHFC,
0s, 2007 $3,645 $ 2,497,153
California Statewide Community Development
Authority, Certificates of Participation, CHFC,
0s, 2008 6,345 4,106,738
California Statewide Community Development
Authority, Certificates of Participation (St.
Joseph's Hospital), 6.625s, 2004 4,205 4,705,858
Central Valley, CA, 6.2s, 2003 3,000 3,267,660
Corona, CA, Certificates of Participation (Corona
Community Hospital), 8s, 2005 585 687,451
Desert Hospital District, CA, Hospital Rev. (Desert
Hospital Corp.), 9.004s, 2002 ++++ 3,000 3,448,680
Emeryville, CA, Public Financing Authority Rev.,
6.5s, 2002 770 829,898
Los Angeles, CA, Convention & Exhibition Center
Authority, Certificates of Participation, 9s, 2005 1,900 2,368,958
Mojave, CA, Water Agency Rev. (Morongo Basin),
6.6s, 2002 1,400 1,524,614
Northern California Power Agency, Public Power
Rev., 5.85s, 2010 870 928,220
Pomona, CA, Public Financing Authority Rev.,
5.75s, 2004 855 919,005
Pomona, CA, Single Family Mortgage Rev.,
FHLMC, GNMA, 7.5s, 2000 2,000 2,430,340
Pomona, CA, Single Family Mortgage Rev., FNMA,
GNMA, 7.375s, 2010 2,000 2,275,500
San Joaquin County, CA, Certificates of
Participation (General Hospital), 6.625s, 2003 2,000 2,210,760
Southern California Public Power Transmission
Rev., "A", 0s, 2005 3,795 2,918,317
Thousand Oaks, CA, Redevelopment Agency Rev.
(Shadow Hills Project), 7s, 2002 8,900 9,818,213
Tulare County, CA, Certificates of Participation
(Capital Improvements Program), MBIA, 6s, 2006 1,000 1,101,280
-----------
$51,793,154
- -------------------------------------------------------------------------------------------
Airport and Port Revenue - 5.7% Los Angeles, CA, Department of Airport Rev.
(Ontario International Airport), FGIC, 6s, 2017 $4,100 $ 4,184,911
Los Angeles, CA, Harbor Department Rev.,
6.625s, 2025 2,000 2,114,820
Port Oakland, CA, Port Rev., MBIA, 6.5s, 2016 1,000 1,061,130
San Francisco, CA, City & County Airport
Commission, International Airport Rev., 6.5s, 2019 4,000 4,260,520
San Francisco, CA, City & County Airport
Commission, International Airport Rev., FSA, 5s, 2018 5,000 4,547,650
-----------
$16,169,031
- -------------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 2.7%
California Pollution Control Financing Authority
Rev. (Pacific Gas & Electric Co.), 6.625s, 2009 $1,000 $ 1,054,840
Kings River Conservation District, CA, Pine Flat
Power Rev., 5.125s, 2016 1,500 1,438,095
Los Angeles, CA, Department of Water & Power,
Electric Plant Rev., 7.1s, 2031 1,050 1,105,828
Northern California Power Agency, Public Power
Rev., 5.85s, 2010 880 922,478
Southern California Public Power Authority Rev.
(Southern Transmission Project), 0s, 2005 4,205 3,233,771
-----------
$ 7,755,012
- -------------------------------------------------------------------------------------------
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Health Care Revenue - 1.9%
California Statewide Community Development
Authority, Certificates of Participation (Childrens
Hospital at Los Angeles), 5.125s, 2019 $4,000 $ 3,656,680
Tahoe Forest, CA, Hospital District Rev.,
5.85s, 2022 1,000 938,790
Washington Township, CA, Health Care Rev.,
5s, 2018 1,000 890,140
-----------
$ 5,485,610
- -------------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 1.4%
California Pollution Control Financing Authority
Rev. (Frito-Lay, Inc.), 6.375s, 2004 $1,025 $ 1,074,702
California Pollution Control Financing Authority
Rev. (LaidLaw Environmental), 6.7s, 2007 2,750 2,826,285
-----------
$ 3,900,987
- -------------------------------------------------------------------------------------------
Insured Health Care Revenue - 2.4%
Abag, CA, Finance Authority Rev. (Rhoda Haas
Goldman Plaza), CHFC, 5.125s, 2015 $2,250 $ 2,114,460
California Health Facilities Financing Authority
Rev. (Little Company Mary Health Services),
AMBAC, 5s, 2015 ### 2,715 2,568,417
California Health Facilities Financing Authority
Rev. (Marshall Hospital), CMI, 5.25s, 2018 ### 1,000 937,940
California Statewide Community Development
Authority, Certificates of Participation (Childrens
Hospital at Los Angeles), MBIA, 6s, 2011 1,015 1,093,175
-----------
$ 6,713,992
- -------------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 5.0%
California Housing Finance Agency Rev.,
6.7s, 2015 $2,750 $ 2,900,425
California Statewide Community Development
Authority, Certificates of Participation (Irvine
Apartments), 5.25s, 2025 3,000 2,852,040
Palmdale, CA, Multi-Family Housing Rev., FNMA,
7.375s, 2024 1,000 1,043,790
San Bernardino County, CA, Housing Authority
Rev. (Equity Residential Redlands), 5.2s, 2029 3,000 2,936,340
Yolo County, CA, Housing Authority Mortgage Rev.
(Walnut Park Apartments), FHA, 7.2s, 2033 4,150 4,396,220
-----------
$14,128,815
- -------------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 1.2%
Territory of Virgin Islands Public Finance Authority
Rev., 5.5s, 2022 $2,000 $ 1,878,380
Virgin Islands Public Finance Authority Rev.,
5.875s, 2018 1,500 1,455,540
-----------
$ 3,333,920
- -------------------------------------------------------------------------------------------
Single Family Housing Revenue - 3.0%
California Housing Finance Agency Rev.,
7.75s, 2010 $ 400 $ 410,148
California Housing Finance Agency Rev., 0s, 2030 10,500 2,010,120
California Housing Finance Agency Rev, MBIA,
0s, 2028 13,365 3,007,927
California Housing Finance Agency Rev., MBIA,
6s, 2010 1,400 1,439,494
California Rural Home Mortgage Finance
Authority Rev., 0s to 1999, 5.75s to 2029 1,455 1,566,773
San Bernardino County, CA, Single Family
Mortgage Rev., GNMA, 7.65s, 2023 90 93,911
</TABLE>
11-MCA
<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
Southern California Home Finance Authority,
Single Family Mortgage Rev., GNMA,
7.625s, 2023 $ 125 $ 128,926
------------
$ 8,657,299
- --------------------------------------------------------------------------------------------
Solid Waste Revenue - 0.4%
California Pollution Control Financing Authority,
Solid Waste Disposal Rev. (West Co. Resource
Recovery), 5.125s, 2014 $1,000 $ 930,170
- --------------------------------------------------------------------------------------------
Special Assessment District - 4.2%
Brea, CA, Public Finance Authority Rev., MBIA,
0s, 2005 $2,235 $ 1,712,278
Brea, CA, Public Finance Authority Rev., MBIA,
0s, 2006 3,415 2,483,149
Concord, CA, Redevelopment Agency Rev., Tax
Allocation, BIGI, 8s, 2018 40 40,739
Emeryville, CA, Public Financing Authority Rev.,
6.5s, 2021 1,230 1,272,152
Pomona, CA, Public Financing Authority Rev.,
5.75s, 2020 1,645 1,645,379
San Jose, CA, Redevelopment Agency Rev.,
Hospital District, MBIA, 6s, 2010 1,000 1,086,700
Santa Cruz County, CA, Redevelopment Agency
Rev. (Oak/Soquel Community), 5.6s, 2017 1,455 1,459,685
Walnut Valley, CA, Public Finance Authority Rev.
(Walnut Improvement), MBIA, 0s, 2007 1,150 788,957
Walnut Valley, CA, Public Finance Authority Rev.
(Walnut Improvement), MBIA, 0s, 2008 1,125 728,336
Walnut Valley, CA, Public Finance Authority Rev.
(Walnut Improvement), MBIA, 0s, 2009 1,175 714,095
------------
$ 11,931,470
- --------------------------------------------------------------------------------------------
Turnpike Revenue - 3.7%
Commonwealth of Puerto Rico, Highway &
Transportation Authority Rev., FSA, 5.5s, 2015 $1,000 $ 1,014,480
Foothill/Eastern Corridor Agency, CA, Toll Road
Rev., 0s, 2011 2,500 2,105,900
Foothill/Eastern Corridor Agency, CA, Toll Road
Rev., MBIA, 5s, 2016 3,000 2,829,870
Los Angeles County, CA, Metropolitan
Transportation Authority, Sales Tax Rev., FSA,
5s, 2019 5,000 4,598,450
------------
$ 10,548,700
- --------------------------------------------------------------------------------------------
Universities - 6.1%
California Educational Facilities Authority Rev.
(California Western School of Law), MBIA,
5s, 2018 $1,000 $ 923,640
California Educational Facilities Authority Rev.
(College & University), 6s, 2012 1,400 1,436,232
California Educational Facilities Authority Rev.
(College & University), 6.3s, 2021 1,000 1,018,760
California Educational Facilities Authority Rev.
(L.A. College of Chiropractic), 5.6s, 2017 500 483,355
California Educational Facilities Authority Rev.
(Pomona College), 5.875s, 2019 1,000 1,026,410
California Public Works Board, Lease Rev.
(California Community Colleges), 5s, 2016 3,675 3,421,351
Los Angeles, CA, Certificates of Participation,
5.7s, 2018 1,900 1,828,465
San Francisco, CA, City & County, Educational
Facilities Rev. (Community College), 5.5s, 2014 1,000 1,008,390
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Universities - continued
San Francisco, CA, City & County, Educational
Facilities Rev. (Zoo Facilities), 5.5s, 2014 $1,000 $ 1,008,390
University of California Rev., MBIA, 6.521s, 2016 ++++ + 5,705 5,210,947
------------
$ 17,365,940
- ------ ------------
Water and Sewer Utility Revenue - 12.1%
California Department of Water Resources,
Central Valley Project Rev., 7s, 2012 $1,495 $ 1,758,075
California Department of Water Resources,
Central Valley Project Rev., 5.125s, 2015 1,250 1,205,075
Carmichael, CA, Water District Rev., MBIA, 5.125s,
2019 3,000 2,809,290
El Monte, CA, Water Authority Rev., AMBAC, 6s,
2019 1,065 1,107,355
Fairfield-Suisun, CA, Sewer District Rev., MBIA,
0s, 2006 2,080 1,530,131
Metropolitan Water District, Linked Savers, RIBS,
5.75s, 2018 10,000 10,265,900
Metropolitan Water District, Waterworks Rev., 5s,
2020 2,500 2,288,200
Modesto, CA, Irrigation District, Financing
Authority Rev., AMBAC, 5s, 2017 3,000 2,791,020
Sacramento, CA, Cogeneration Authority Project
Rev., MBIA, 5s, 2016 1,000 942,330
San Diego, CA, Water Utilities Network Systems
Rev., FGIC, 5.375s, 2014 2,540 2,537,638
San Diego, CA, Water Utilities Network Systems
Rev., FGIC, 5s, 2016 4,500 4,239,720
San Diego County, CA, Water Authority Rev., 5s,
2017 2,000 1,862,200
Westlands, CA, Water District Rev., AMBAC,
5.125s, 2016 1,055 1,011,228
------------
$ 34,348,162
- --------------------------------------------------------------------------------------------
Other - 2.4%
Anaheim, CA, Public Finance Authority Rev., FSA,
6s, 2024 $1,000 $ 1,050,680
California Public Capital Improvements Financing
Authority Rev., MBIA, 8.1s, 2018 1,780 1,801,627
Marin, CA, Emergency Radio Authority Rev.,
AMBAC, 5s, 2015 1,530 1,455,489
South Coast Air Quality Management District Rev.,
AMBAC, 0s, 2005 3,480 2,666,098
------------
$ 6,973,894
- --------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $270,772,629) $278,228,630
- --------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.9%
- --------------------------------------------------------------------------------------------
California Economic Development Financing
Authority Rev., due 10/01/99 $3,700 $ 3,700,000
Harris County, TX, Hospital Rev. (Methodist
Hospital), due 10/01/99 300 300,000
Harris County, TX, Industrial Development Corp.
(Shell Oil Co.), due 10/01/99 1,100 1,100,000
New York City, NY, Municipal Water Finance
Authority Rev., due 10/01/99 400 400,000
- --------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 5,500,000
- --------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $276,272,629) $283,728,630
Other Assets, Less Liabilities - 0.2% 583,688
- --------------------------------------------------------------------------------------------
Net assets - 100.0% $284,312,318
- --------------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
12 - MCA
<PAGE>
Portfolio of Investments (Unaudited) - September 30, 1999
MFS FLORIDA MUNICIPAL BOND
Municipal Bonds - 99.6%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 13.5%
Dade County, FL, AMBAC, 7.125s, 2016 $2,380 $ 2,793,239
Florida Board of Education, Capital Outlay,
9.125s, 2014 2,600 3,488,446
Orlando, FL, Capital Improvement Special Rev.,
5s, 2017 3,575 3,302,585
Palm Beach County, FL, 6.5s, 2010 2,000 2,219,640
-----------
$11,803,910
- --------------------------------------------------------------------------------------
State and Local Appropriation - 1.1%
Miami-Dade County, FL, Florida School Board,
FSA, 5s, 2017 $1,000 $ 920,970
- --------------------------------------------------------------------------------------
Refunded and Special Obligations - 14.3%
Bay County, FL, School Board, Certificates of
Participation, AMBAC, 6.75s, 2004 $1,000 $ 1,112,080
Brevard County, FL, Health Facilities Authority
Rev. (Wuesthoff Memorial), MBIA, 7.2s, 2002 1,000 1,088,230
Charlotte County, FL, Utility Rev., FGIC,
6.875s, 2003 500 554,780
Escambia County, FL, Health Facility Rev. (Baptist
Hospital), 6.75s, 2003 785 857,189
Florida Board of Education, Capital Outlay,
9.125s, 2014 400 530,504
Florida Turnpike Authority Rev., "A" ( Fitch Light),
AMBAC, 7.125s, 2001 1,250 1,337,125
Hillsborough County, FL, Capital Improvement
Rev. (County Center), 6.75s, 2002 1,500 1,622,595
Palm Beach County, FL, School Board,
Certification of Participation, AMBAC,
6.375s, 2004 2,000 2,183,280
Palm Beach County, FL, Solid Waste Authority
Rev., Improvement Series, "B", 5.375s 1,000 1,009,410
Port St. Lucie, FL, Utility Rev., Capital
Appreciation, FGIC, 0s, 2006 2,405 706,204
Puerto Rico Electric Power Authority Rev.,
7s, 2001 240 256,733
Puerto Rico Highway & Transportation Authority,
Highway Rev., 6.625s, 2002 100 107,867
Tampa, FL, Allegheny Health System (St.
Joseph's), MBIA, 6.5s, 2004 1,000 1,110,360
-----------
$12,476,357
- --------------------------------------------------------------------------------------
Airport and Port Revenue - 11.0%
Broward County, FL, Airport Systems Rev.,
AMBAC, 4.8s, 2014 ### $1,500 $ 1,359,045
Greater Orlando Aviation Authority, FGIC,
5.25s, 2018 1,000 949,170
Hillsborough County, FL, Aviation Authority Rev.,
(Delta Airlines), 6.8s, 2024 1,500 1,551,885
Hillsborough County, FL, Aviation Authority Rev.,
(Tampa International), FGIC, 5.875s, 2015 750 767,722
Hillsborough County, FL, Aviation Authority Rev.,
(US Air), 8.6s, 2022 2,400 2,602,560
Miami-Dade County, FL, Florida Aviation Rev.,
MBIA, 5.25s, 2018 1,500 1,412,130
Pensacola FL, Airport Rev., MBIA, 5.625s, 2014 1,000 1,002,150
-----------
$ 9,644,662
- --------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 13.0%
Escambia County, FL, Utility Systems Rev., FGIC,
6.25s, 2015 $1,500 $ 1,634,160
Hillsborough County, FL, Industrial Development
Authority, Pollution Control Rev. (Tampa Electric
Co.), 8s, 2022 3,000 3,307,650
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Electric and Gas Utility Revenue - continued
Orlando, FL, Utility Commission, Water and
Electric Rev., 6.75s, 2017 $1,500 $ 1,691,460
Puerto Rico Electric Power Authority, FSA,
6s, 2016 2,000 2,082,680
Puerto Rico Electric Power Authority, MBIA,
6.125s, 2008 2,400 2,628,768
-----------
$11,344,718
- --------------------------------------------------------------------------------------
Health Care Revenue - 9.0%
Brevard County, FL, Health Facilities Authority
Rev. (Friendly Village), 9.25s, 2012 $ 350 $ 354,088
Escambia County, FL, Health Facility Rev. (Baptist
Hospital), 6.75s, 2014 175 187,968
Escambia County, FL, Health Facility Rev. (Baptist
Hospital), "B", 6s, 2014 2,500 2,508,050
Highlands County, FL, Health Facilities Authority
Rev. (Adventist Health Systems), 5.25s, 2013 1,000 940,660
Jacksonville, FL, Health Facilities Authority,
Hospital Rev., 5.375s, 2023 1,000 936,770
Jacksonville, FL, Health Facilities Authority,
Industrial Development Rev. (National Cypress),
7s, 2014 1,250 1,331,325
Marion County, FL, Hospital District Rev.,
5.5s, 2014 1,000 968,000
Orange County, FL, Industrial Development Rev.
(Friendly Village), 9.25s, 2012 335 336,360
Pinellas County, FL, Health Facility Authority,
3.8s, 1999 ++++ 300 300,000
-----------
$ 7,863,221
- --------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 2.4% Escambia County, FL, Industrial
Development Rev.
(Champion International), 6.8s, 2012 $1,000 $ 1,059,510
Escambia County, FL, Pollution Control Rev.
(Champion International), 6.95s, 2007 1,000 1,060,270
-----------
$ 2,119,780
- --------------------------------------------------------------------------------------
Insured Health Care Revenue - 7.2%
Brevard County, FL, Health Facilities Authority
Rev. (Wuesthoff Memorial), MBIA, 6.5s, 2007 ### $1,000 $ 1,059,140
Charlotte County, FL, Health Care Facilities Rev.
(Bon Secours), FSA, 8.177s, 2027 ++++ 2,500 2,554,125
Hillsborough County, FL, Industrial Development
Rev. (University Community Hospital), MBIA,
6.5s, 2019 1,000 1,091,790
Jacksonville, FL, Hospital Rev. (University Medical
Center), CONNIE LEE, 6.6s, 2013 500 528,810
Tallahassee, FL, Health Facilities Rev. (Tallahassee
Memorial Regional Medical Center), MBIA,
6.625s, 2013 1,000 1,095,360
-----------
$ 6,329,225
- --------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 1.2%
Jacksonville, FL, Excise Taxes Rev., FGIC, 0s, 2010 $1,000 $ 556,160
Jacksonville, FL, Excise Taxes Rev., FGIC, 0s, 2011 1,000 522,980
-----------
$ 1,079,140
- --------------------------------------------------------------------------------------
Single Family Housing Revenue - 6.0%
Dade County, FL, Housing Finance Authority,
Mortgage Rev., "D", FSA, 6.95s, 2012 $ 305 $ 317,926
Dade County, FL, Housing Finance Authority,
Mortgage Rev., "E", GNMA, 7s, 2024 65 67,008
Lee County, FL, Housing Finance Authority Rev.,
GNMA, 6.5s, 2031 750 787,185
</TABLE>
13-MFL
<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
Lee County, FL, Housing Finance Authority Rev.,
GNMA, 7s, 2031 $1,000 $ 1,075,060
Miami Dade County, FL, Housing Finance
Authority Rev., GNMA, 5.2s, 2031 1,000 987,070
Palm Beach County, FL, GNMA, 5.5s, 2022 1,000 998,740
Pinellas County, FL, Housing Authority Rev.,
GNMA, 6.2s, 2031 1,000 1,040,370
-----------
$ 5,273,359
- -----------------------------------------------------------------------------------
Solid Waste Revenue - 1.0%
Tampa Bay, FL, Solid Waste System Rev. (McKay
Bay Refuse), AMBAC, 4.75s, 2017 $1,000 $ 868,300
- -----------------------------------------------------------------------------------
Special Assessment District - 2.1%
Arbor Greene, FL, Community Development
District, 5.75s, 2006 $ 865 $ 851,653
Heritage Isles, FL, Community Development
District, 5.75s, 2005 1,000 989,940
-----------
$ 1,841,593
- -----------------------------------------------------------------------------------
Turnpike Revenue - 6.2%
Florida Mid Bay Bridge Authority Rev., AMBAC,
0s, 2018 $1,000 $ 333,940
Orlando & Orange County, FL, Expressway Florida,
FGIC, 6.064s, 2004 ++++ 1,000 1,032,430
Puerto Rico Highway & Transportation Authority,
MBIA, 5.5s, 2015 1,500 1,521,720
State of Florida, Department of Transportation,
5.946s, 2017 ++++ + 3,000 2,520,660
-----------
$ 5,408,750
- -----------------------------------------------------------------------------------
Universities - 1.3%
Florida Housing Finance Corp. Rev. (Crossing at
University Apartments), AMBAC, 5.1s, 2018 $1,250 $ 1,162,675
- -----------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 7.1%
Lee County, FL, Industrial Development Authority
Rev. (Bonita Springs Utilities Project), MBIA,
6.05s, 2015 $1,000 $ 1,039,450
Miramar, FL, Wastewater Improvement Rev., FGIC,
6.75s, 2016 955 1,060,871
Seminole County, FL, Water & Sewer Rev., MBIA,
6s, 2019 2,060 2,144,625
Seminole County, FL, Water & Sewer Rev., MBIA,
6s, 2019 940 976,782
Tampa Water Florida, FGIC, 5.75s, 2016 1,000 1,016,960
-----------
$ 6,238,688
- -----------------------------------------------------------------------------------
Other - 3.2%
Florida Department of Environmental Preservation
Rev., MBIA, 5.5s, 2012 $2,295 $ 2,323,665
Palm Beach County, FL, Criminal Justice Facilities,
5.75s, 2013 500 520,510
-----------
$ 2,844,175
- -----------------------------------------------------------------------------------
Total Municipal Bonds $87,219,523
- -----------------------------------------------------------------------------------
Total Investments (Identified Cost, $85,413,652 ) $87,219,523
- -----------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.4% 341,776
- -----------------------------------------------------------------------------------
Net assets - 100.0% $87,561,299
- -----------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
MFS GEORGIA MUNICIPAL BOND FUND
Municipal Bonds - 97.4%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- ------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 12.3%
Commonwealth of Puerto Rico, Public
Improvement, 5.25s, 2012 $1,000 $1,001,430
Dalton, GA, Development Authority, MBIA,
5.5s, 2017 1,000 993,050
Fulton County, GA, School District, 6.375s, 2010 2,000 2,212,440
Fulton County, GA, School District, 6.375s, 2012 1,000 1,104,200
Fulton County, GA, School District, 6.375s, 2016 1,000 1,095,350
Marietta, GA, 5s, 2013 750 718,702
State of Georgia, 6.25s, 2011 1,000 1,101,700
----------
$8,226,872
- ------------------------------------------------------------------------------------
State and Local Appropriation - 8.2%
Columbia County, GA (Courthouse/Detention
Center), 5.625s, 2020 $1,490 $1,458,844
Georgia Municipal Assn., Inc., Installment Sale
Program (Atlanta Detention Center), FSA,
5s, 2014 4,350 4,054,679
----------
$5,513,523
- ------------------------------------------------------------------------------------
Refunded and Special Obligations - 5.6%
Fulton County, GA, Water & Sewage Rev., FGIC,
6.375s, 2014 $3,150 $3,438,288
Territory of Virgin Islands, 7.75s, 2001 305 324,791
----------
$3,763,079
- ------------------------------------------------------------------------------------
Airport and Port Revenue - 13.5%
Atlanta, GA, Airport Facilities Rev., AMBAC,
0s, 2010 $6,000 $3,336,240
Atlanta, GA, Airport Facilities Rev., MBIA, 0s, 2010 5,100 2,835,804
Commonwealth of Puerto Rico, Ports Authority
Rev. (American Airlines), 6.25s, 2026 1,425 1,438,238
Fulton County, GA, Development Authority Rev.,
5.3s, 2013 1,500 1,396,230
----------
$9,006,512
- ------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 10.5% Appling County, GA, Development
Authority Rev.
(Ogelthorpe Power Corp.), MBIA, 7.15s, 2021 ### $1,400 $1,523,718
Commonwealth of Puerto Rico, Electric Power
Authority, Power Rev., MBIA, 5.25s, 2016 1,000 980,110
Georgia Municipal Electric Authority, Power Rev.,
AMBAC, 5.5s, 2009 1,225 1,261,836
Georgia Municipal Electric Authority, Power Rev.,
AMBAC, 0s, 2013 1,675 807,266
Georgia Municipal Electric Authority, Power Rev.,
MBIA, 6.5s, 2020 1,250 1,375,463
Monroe County, GA, Development Authority,
Pollution Control Rev. (Oglethorpe Power),
6.8s, 2012 1,000 1,108,610
----------
$7,057,003
- ------------------------------------------------------------------------------------
Health Care Revenue - 4.9%
Richmond County, GA, Development Authority.,
Nursing Home Rev. (Beverly Enterprises), 8.75s,
2011 ### $1,190 $1,288,865
Royston, GA., Hospital Authority Rev. (Ty Cobb
Healthcare Systems, Inc.), 6.125s, 2009 330 326,994
Royston, GA, Hospital Authority Rev. (Ty Cobb
Healthcare Systems, Inc.), 7.375s, 2014 1,565 1,626,489
----------
$3,242,348
- ------------------------------------------------------------------------------------
</TABLE>
14 - MGA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Revenue (Corporate Guarantee) - 10.0%
Cartersville, GA, Development Authority Rev.,
Water & Wastewater Facilities (Anheuser-Busch
Cos., Inc.), 5.625s, 2009 $1,500 $ 1,542,240
Savannah, GA, Economic Development Authority,
Industrial Development Rev. (Hershey Foods
Corp.), 6.6s, 2012 1,150 1,215,010
Savannah, GA, Economic Development Authority,
Industrial Development Rev. (Stone Container
Corp.), 7.4s, 2026 1,750 1,871,222
Savannah, GA, Economic Development Authority,
Industrial Development Rev. (Union Camp Corp.),
6.15s, 2017 1,000 1,027,850
Wayne County, GA, Solid Waste Rev. (ITT-
Rayonier, Inc), 8s, 2015 1,000 1,040,590
-----------
$ 6,696,912
- --------------------------------------------------------------------------------------
Insured Health Care Revenue - 3.5%
Chatham County, GA, Hospital Authority Rev.,
AMBAC, 5.25s, 2011 $1,100 $ 1,095,765
Savannah, GA, Hospital Authority Rev. (St.
Josephs/Candler Health Systems), FSA, 5s, 2018 1,400 1,259,328
-----------
$ 2,355,093
- --------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 5.9%
Cobb County, GA, Housing Authority Rev.
(Signature Place), 6.875s, 2017 $1,425 $ 1,479,663
Hinesville, GA, Leased Housing Corp., FHA,
6.7s, 2017 900 946,071
St. Mary's, GA, Housing Authority Rev.
(Cumberland Oaks Apartments), FNMA,
7.375s, 2022 1,470 1,510,175
-----------
$ 3,935,909
- --------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 1.4%
Territory of Virgin Islands, Public Finance
Authority, 5.5s, 2018 $1,000 $ 947,950
- --------------------------------------------------------------------------------------
Single Family Housing Revenue - 3.7%
DeKalb County, GA, Housing Authority Rev.,
GNMA, 7.75s, 2022 $ 390 $ 398,194
Georgia Housing & Finance Authority Rev.,
5.2s, 2020 1,000 998,750
Georgia Housing & Finance Authority Rev.,
0s, 2031 5,490 525,612
Georgia Residential Finance Authority Rev.,
FHA, 8s, 2020 255 262,979
Georgia Residential Finance Authority Rev.,
FHA, 7.25s, 2021 275 286,366
-----------
$ 2,471,901
- --------------------------------------------------------------------------------------
Universities - 3.0%
Georgia Private Colleges & University Authority
Rev. (Emory University), 5.75s, 2016 $1,000 $ 1,015,080
Marietta, GA, Development Authority Rev.
(Southern Polytech), 6.25s, 2027 1,000 961,620
-----------
$ 1,976,700
- --------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 14.9%
Atlanta, GA, Water & Wastewater Rev., FGIC,
6.946s, 2016 ++++ + $4,000 $ 4,021,600
Brunswick, GA, Water and Sewer Rev., MBIA,
6.1s, 2014 1,000 1,070,030
Cartersville, GA, Water and Sewer Rev., AMBAC,
7.2s, 2012 2,225 2,332,134
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Water and Sewer Utility Revenue - continued
Fulton County, GA, Water & Sewage Rev., FGIC,
6.375s, 2014 $ 100 $ 109,430
Macon, GA, Water Authority, Water & Sewer
Rev., 5.25s, 2012 1,000 987,620
Macon, GA, Water Authority, Water & Sewer
Rev., 5.25s, 2014 1,000 974,440
Paulding County, GA, Water & Sewer Rev.,
AMBAC, 5.25s, 2015 500 479,865
-----------
$ 9,975,119
- --------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $64,227,836) $65,168,921
- --------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.0%
- --------------------------------------------------------------------------------------
Georgia Hospital Financing Authority Rev.
(Hospital Loan Program), due 10/01/99, at
Identified Cost $ 683 $ 683,000
- --------------------------------------------------------------------------------------
Total Investments (Identified Cost, $64,910,836 ) $65,851,921
Other Assets, Less Liabilities - 1.6% 1,094,048
- --------------------------------------------------------------------------------------
Net assets - 100.0% $66,945,969
- --------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
15-MGA
<PAGE>
Portfolio of Investments (Unaudited) - September 30, 1999
MFS MARYLAND MUNICIPAL BOND FUND
Municipal Bonds - 96.9%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 16.5%
Anne Arundel County, MD, 4.9s, 2011 $1,005 $ 984,006
Anne Arundel County, MD, 5s, 2015 2,000 1,899,540
Baltimore County, MD, 5.125s, 2013 1,000 981,680
Baltimore, MD, Consolidated Public Improvement,
7.15s, 2009 2,120 2,480,655
Baltimore, MD, Consolidated Public Improvement,
FGIC, 5.3s, 2009 700 711,648
Baltimore, MD, Consolidated Public Improvement,
FGIC, 5.3s, 2010 815 826,214
Baltimore, MD, Consolidated Public Improvement,
FGIC, 5.375s, 2011 900 910,404
Baltimore, MD, Consolidated Public Improvement,
FGIC, 5.375s, 2013 770 766,396
Baltimore, MD, Consolidated Public Improvement,
MBIA, 7s, 2009 1,000 1,153,240
Commonwealth of Puerto Rico, MBIA, 5.75s, 2010 2,000 2,137,980
Frederick County, MD, Public Facilities, 5.25s, 2016 2,000 1,945,200
Howard County, MD, Metropolitan District, 0s,
2008 1,000 646,010
Prince George's County, MD, 0s, 2007 5,110 3,491,050
Prince George's County, MD, Consolidated Public
Improvement, FSA, 5.375s, 2015 4,000 3,954,800
Washington, MD, Suburban Sanitation District,
6.1s, 2015 1,070 1,120,579
Washington, MD, Suburban Sanitation District,
5.25s, 2016 865 838,626
-----------
$24,848,028
- ---------------------------------------------------------------------------------------
State and Local Appropriation - 9.0%
Calvert County, MD, Community Lease Rev., 7.2s,
2010 $ 750 $ 783,667
Howard County, MD, Certificates of Participation,
8.15s, 2021 450 583,911
Howard County, MD, Certificates of Participation,
"A", 8s, 2019 805 1,016,731
Howard County, MD, Certificates of Participation,
"B", 8s, 2019 385 486,263
Howard County, MD, Certificates of Participation,
"C", 8s, 2019 680 858,853
Maryland Stadium Authority, Sports Facilities
Leasing Rev., AMBAC, 5.875s, 2012 1,000 1,055,940
Prince George's County, MD, Certificates of
Participation, MBIA, 0s, 2005 2,495 1,897,547
Prince George's County, MD, Certificates of
Participation, MBIA, 0s, 2006 2,490 1,794,020
Prince George's County, MD, Industrial
Development Authority, MBIA, 0s, 2004 980 786,323
Prince George's County, MD, Industrial
Development Authority, MBIA, 0s, 2006 1,800 1,296,882
Prince George's County, MD, Industrial
Development Authority, MBIA, 0s, 2009 1,500 910,695
Puerto Rico Public Finance Corp., AMBAC,
5.375s, 2013 ++++ 500 509,110
Puerto Rico Public Finance Corp., AMBAC,
7.021s, 2016 +++++ 1,520 1,511,002
-----------
$13,490,944
- ---------------------------------------------------------------------------------------
Refunded and Special Obligations - 13.8%
Commonwealth of Puerto Rico, 6.5s, 2004 $2,000 $ 2,210,280
Maryland Health & Higher Educational Facilities,
Authority Rev. (Good Samaritan Hospital),
5.7s, 2009 1,085 1,142,049
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Refunded and Special Obligations - continued
Maryland Health & Higher Educational Facilities,
Authority Rev. (Howard County General
Hospital), 5.5s, 2021 $4,000 $ 3,969,560
Maryland Health & Higher Educational Facilities,
Authority Rev. (Kennedy Institute), 6.75s, 2001 500 521,720
Maryland Health & Higher Educational Facilities,
Authority Rev. (Sinai Hospital/Baltimore),
AMBAC, 7s, 2000 1,500 1,565,175
Maryland Health & Higher Educational Facilities,
Authority Rev. (University of Maryland Medical
System), FGIC, 7s, 2017 1,840 1,963,464
Maryland Health & Higher Educational Facilities,
Authority Rev. (University of Maryland Medical
System), FGIC, 6.5s, 2021 1,000 1,040,150
Morgan, MD, State University Academic &
Auxiliary Facilities & Fees Rev., MBIA, 0s, 2006 1,135 817,450
Morgan, MD, State University Academic &
Auxiliary Facilities & Fees Rev., MBIA, 0s, 2008 1,400 899,262
Prince George's County, MD, Hospital Rev.
(Dimensions Health Corp.), 7.25s, 2002 2,000 2,190,140
Puerto Rico Aqueduct & Sewer Authority Rev.,
10.25s, 2009 500 640,995
Puerto Rico Electric Power Authority Rev.,
7s, 2001 1,000 1,069,720
Puerto Rico Public Improvement Rev., 6.8s, 2002 1,500 1,624,740
Washington, MD, Suburban Sanitation District,
6.9s, 2001 1,045 1,111,190
-----------
$20,765,895
- ---------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 3.3%
Guam Power Authority Rev., AMBAC, 6.673s, 2015 +++++ $1,680 $ 1,580,242
Prince George's County, MD (Potomac Electric),
5.75s, 2010 2,000 2,080,300
Puerto Rico Electric Power Authority, Power Rev.,
FSA, 7.25s, 2015 ++++ + 1,400 1,357,944
-----------
$ 5,018,486
- ---------------------------------------------------------------------------------------
Health Care Revenue - 3.8%
Berlin, MD, Hospital Rev. (Atlantic General
Hospital), 8.375s, 2022 $1,307 $ 1,369,010
Maryland Health & Higher Educational Facilities,
Authority Rev. (Bradford Oaks Center),
6.375s, 2027 1,500 1,462,905
Maryland Health & Higher Educational Facilities,
Authority Rev. (Doctors Community
Hospital), 5.5s, 2024 2,000 1,763,700
Maryland Health & Higher Educational Facilities,
Authority Rev. (Johns Hopkins Hospital), 0s, 2010 2,000 1,114,320
-----------
$ 5,709,935
- ---------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 2.8%
Baltimore, MD, Port Facilities Rev. (DuPont (E.I.)
de Nemours), 6.5s, 2011 $1,500 $ 1,602,435
Cecil County, MD, Commissioners Industrial
Development Rev. Board, 5.25s, 2006 1,000 1,014,450
Northeast Maryland, Waste Disposal Authority
Resources Recovery Rev. (Baltimore Resco
Retrofit), 5s, 2012 1,000 896,320
Upper Potomac, MD, River Commission, Pollution
Control Rev. (Westvaco), 10.5s, 2004 150 151,500
Upper Potomac, MD, River Commission, Pollution
Control Rev. (Westvaco), 9.125s, 2015 500 507,750
-----------
$ 4,172,455
- ---------------------------------------------------------------------------------------
</TABLE>
16 - MMD
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Insured Health Care Revenue - 9.9%
Maryland Health & Higher Educational Facilities,
Authority Rev. (Anne Arundel Medical Center),
FSA, 5.25s, 2012 $1,510 $ 1,496,908
Maryland Health & Higher Educational Facilities,
Authority Rev. (Frederick Memorial Hospital),
FGIC, 5.25s, 2013 4,550 4,520,198
Maryland Health & Higher Educational Facilities,
Authority Rev. (Medlantic/Helix), AMBAC,
5.25s, 2013 2,145 2,104,889
Maryland Health & Higher Educational Facilities,
Authority Rev. (Memorial Hospital at Easton),
MBIA, 5.25s, 2011 1,615 1,614,063
Maryland Health & Higher Educational Facilities,
Authority Rev. (Mercy Medical Center), FSA,
5.625s, 2017 1,800 1,799,424
Maryland Health & Higher Educational Facilities,
Authority Rev. (Upper Chesapeake Hospital),
FSA, 5.5s, 2020 2,000 1,951,980
Maryland Industrial Development Finance
Authority, Economic Development Rev. (Bon
Secours Health System), FSA, 7.772s, 2022 ++++ 1,400 1,491,994
------------
$ 14,979,456
- ---------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 3.3%
Baltimore, MD, City Housing, FHA, 7.75s, 2009 $ 835 $ 842,306
Baltimore, MD, City Housing, FNMA, 7.25s, 2023 1,190 1,200,567
Maryland Community Development Administration,
7.375s, 2021 330 342,979
Maryland Community Development Administration,
0s, 2032 11,605 944,299
Maryland Community Development Administration,
7.8s, 2032 1,190 1,226,807
Montgomery County, MD, Housing Opportunities
Commission, 7.375s, 2032 440 455,853
------------
$ 5,012,811
- ---------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 2.5%
Puerto Rico Commonwealth Highway &
Transportation Authority, Highway Rev., FSA,
5.5s, 2013 $1,850 $ 1,897,878
Virgin Islands Public Finance Authority,
5.875s, 2018 1,000 970,360
Virgin Islands Public Finance Authority, 5.5s, 2022 1,000 939,190
------------
$ 3,807,428
- ---------------------------------------------------------------------------------------
Single Family Housing Revenue - 4.3%
Maryland Community Development Administration,
7.7s, 2015 $ 30 $ 30,032
Maryland Community Development Administration,
5.875s, 2016 2,000 2,029,720
Maryland Community Development Administration,
7.3s, 2025 940 975,428
Maryland Community Development Administration,
6.75s, 2026 ### 2,235 2,319,617
Montgomery County, MD, Housing Opportunities
Commission, 7.5s, 2017 145 149,317
Prince George's County, MD, Housing Authority
Rev., GNMA, 4.8s to 2000, 5.375s to 2018 1,000 947,070
------------
$ 6,451,184
- ---------------------------------------------------------------------------------------
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Solid Waste Revenue - 5.1%
Northeast Maryland, Waste Disposal Authority
(Montgomery County), 6s, 2006 $1,000 $ 1,048,860
Northeast Maryland, Waste Disposal Authority
(Montgomery County), MBIA, 6.3s, 2016 2,000 2,104,600
Northeast Maryland, Waste Disposal Authority
(Southwest County Resource Recovery), MBIA,
7.2s, 2005 1,000 1,112,190
Prince George's County, MD (Solid Waste
Management), FSA, 5.25s, 2013 3,500 3,451,630
------------
$ 7,717,280
- ---------------------------------------------------------------------------------------
Turnpike Revenue - 2.1%
Puerto Rico Highway & Transportation Authority
Rev., 6.625s, 2012 $1,000 $ 1,062,580
Puerto Rico Highway & Transportation Authority
Rev., 5.5s, 2013 2,000 2,026,240
------------
$ 3,088,820
- ---------------------------------------------------------------------------------------
Universities - 9.3%
Annapolis, MD, Economic Development Rev. (St.
John's College), 5.5s, 2018 $ 750 $ 697,260
Maryland Economic Development Corp., Student
Housing Rev. (Salibury), 6s, 2019 1,000 965,100
Maryland Health & Higher Educational Facilities,
Authority Rev. (Johns Hopkins University),
5.125s, 2020 6,000 5,582,280
Maryland Health & Higher Educational Facilities,
Authority Rev. (Johns Hopkins University),
5.625s, 2027 1,400 1,395,184
Maryland Health & Higher Educational Facilities,
Authority Rev. (Loyola College), MBIA, 5.5s, 2016 3,000 2,976,600
Morgan, MD, State University, Academic &
Auxiliary Facilities Rev., MBIA, 6.05s, 2015 1,500 1,596,780
University of Maryland, Auxillary Facilities &
Tuition Rev., 0s, 2004 1,000 799,660
------------
$ 14,012,864
- ---------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 4.0%
Baltimore, MD, Wastewater Rev., FGIC, 6s,
2015 ### $1,000 $ 1,056,400
Baltimore, MD, Wastewater Rev., MBIA,
5.65s, 2020 2,000 2,011,940
Baltimore, MD, Wastewater Rev., MBIA,
7.221s, 2020 ++++ 3,000 3,013,290
------------
$ 6,081,630
- ---------------------------------------------------------------------------------------
Other - 7.2%
Baltimore County, MD, 5.375s, 2013 $1,600 $ 1,550,256
Baltimore, MD, Convention Center Rev., MBIA,
5.5s, 2014 2,695 2,700,255
Baltimore, MD, Rev., FGIC, 5.9s, 2013 1,000 1,056,680
Maryland Industrial Development, Finance
Authority (American Center for Physics),
6.625s, 2017 1,500 1,569,495
Maryland Industrial Development, Finance
Authority (YMCA/Baltimore), 8s, 2012 2,825 3,107,613
Maryland Industrial Development, Finance
Authority (YMCA/Baltimore), 8.25s, 2012 795 832,882
------------
$ 10,817,181
- ---------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $142,139,652) $145,974,397
- ---------------------------------------------------------------------------------------
</TABLE>
17-MMD
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Floating Rate Demand Notes - 1.8%
- --------------------------------------------------------------------------------------
Harris County, TX, Health Facilities Hospital
(Methodist Hospital), due 10/01/99 $ 400 $ 400,000
Harris County, TX, Industrial Development Corp.
(Shell Oil Co.), due 10/01/99 1,100 1,100,000
St. Lucie County, FL, Polluiton Control Rev. (Florida
Power & Light), due 10/01/99 1,200 1,200,000
- --------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 2,700,000
- --------------------------------------------------------------------------------------
Total Investments (Identified Cost, $144,839,652) $148,674,397
- --------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.3% 1,912,903
- --------------------------------------------------------------------------------------
Net assets - 100.0% $150,587,300
- --------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
2</TABLE>
MFS MASSACHUSETTS MUNICIPAL BOND FUND
Municipal Bonds - 97.4%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- -------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 17.9%
Belmont, MA, 5s, 2015 $ 2,165 $ 2,053,351
Central Berkshire, MA, FSA, 5.25s, 2014 ### 1,510 1,469,305
Central Berkshire, MA, FSA, 5.25s, 2016 ### 1,610 1,541,205
Commonwealth of Massachusetts, 0s, 2004 10,000 7,861,600
Commonwealth of Massachusetts, 0s, 2005 4,000 2,995,400
Commonwealth of Massachusetts, FGIC, 0s, 2006 4,000 2,887,600
Commonwealth of Massachusetts, FGIC, 7s, 2009 1,150 1,312,299
Commonwealth of Massachusetts, MBIA,
7.5s, 2004 2,850 3,135,285
Dudley-Charlton, MA, FGIC, 6.545s, 2015 ++++ + 1,365 1,309,881
Dudley-Charlton, MA, FGIC, 6.545s, 2016 ++++ + 1,430 1,348,719
Dudley-Charlton, MA, FGIC, 6.545s, 2018 ++++ + 1,565 1,445,371
Fitchburg, MA, MBIA, 5s, 2015 2,480 2,351,710
Haverhill, MA, FGIC, 5s, 2017 1,000 924,440
Holyoke, MA, 8s, 2001 260 269,914
Lawrence, MA, AMBAC, 9.75s, 2002 600 673,596
Lowell, MA, 8.4s, 2009 1,000 1,065,260
Lynn, MA, AMBAC, 5.125s, 2018 3,690 3,443,323
Massachusetts Consolidated Loan, 5.875s, 2017 2,000 2,034,260
Northbridge, MA, 7.6s, 2001 325 342,466
Norton, MA, FGIC, 5.125s, 2014 1,000 959,810
Springfield, MA, FSA, 5.25s, 2014 2,000 1,954,540
Worcester, MA, FSA, 6s, 2016 3,255 3,378,625
-----------
$44,757,960
- -------------------------------------------------------------------------------
State and Local Appropriation - 9.6%
Massachusetts Bay Transportation Authority,
7s, 2021 $ 5,000 $ 5,712,450
Massachusetts Bay Transportation Authority
(General Transportation System), 6.2s, 2016 10,400 11,088,584
Plymouth County, MA, Correctional Facilities,
AMBAC, 5.125s, 2018 5,000 4,613,700
Puerto Rico Public Finance Corp., AMBAC,
7.021s, 2016 ++++ + 2,500 2,485,200
-----------
$23,899,934
- -------------------------------------------------------------------------------
Refunded and Special Obligations - 18.8%
Commonwealth of Massachusetts, AMBAC,
6.75s, 2001 $ 2,350 $ 2,502,609
Commonwealth of Massachusetts, Water
Resources Authority, MBIA, 5.25s, 2004 1,415 1,488,439
Haverhill, MA, FGIC, 7s, 2002 1,250 1,359,525
Holyoke, MA, MBIA, 8s, 2001 1,700 1,807,882
Holyoke, MA, MBIA, 8.1s, 2002 500 562,140
Martha's Vineyard, MA, Land Bank (Land
Acquisition), 8.125s, 2001 3,500 3,739,575
Massachusetts Federally Assisted Housing,
0s, 2009 4,995 1,029,769
Massachusetts Health & Education Facilities
Authority (Brigham & Women's Hospital), MBIA,
6.75s, 2001 1,000 1,062,940
Massachusetts Health & Education Facilities
Authority (Fairview Extended Care Facility),
10.25s, 2001 2,000 2,203,140
Massachusetts Health & Education Facilities
Authority (Massachusetts Eye & Ear Infirmary),
7.375s, 2001 3,000 3,214,710
Massachusetts Health & Education Facilities
Authority (New England Deaconess Hospital),
6.875s, 2002 5,600 6,047,328
</TABLE>
18 - MMA
<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
Massachusetts Health & Education Facilities
Authority (Newton-Wellesley Hospital), MBIA,
8s, 2000 $1,640 $ 1,723,082
Massachusetts Industrial Finance Agency (Curry
College), 8s, 2004 2,300 2,680,697
Massachusetts Industrial Finance Agency (Dexter
School), 7.5s, 2001 1,510 1,616,153
Massachusetts Industrial Finance Agency (Dexter
School), 7.5s, 2001 2,900 3,103,870
Massachusetts Industrial Finance Agency
(Emerson College), 8.9s, 2001 1,000 1,075,940
Massachusetts Industrial Finance Agency (Vinfen
Corp.), 7.1s, 2003 645 720,588
Massachusetts Industrial Finance Agency, Tunnel
Rev. (Massachusetts Turnpike), 9s, 2000 7,785 8,287,288
Massachusetts Port Authority, 12.75s, 1999 325 364,406
Massachusetts Port Authority, 13s, 1999 780 1,214,055
Nantucket Island, MA, Land Bank, 7.75s, 2001 1,200 1,294,404
-----------
$47,098,540
- ----------------------------------------------------------------------------------
Airport and Port Revenue - 5.9%
Massachusetts Port Authority, 5s, 2015 $5,600 $ 5,210,800
Massachusetts Port Authority, FGIC, 7.5s, 2020 3,440 3,571,408
Massachusetts Port Authority (USAIR), MBIA,
5.625s, 2011 2,140 2,170,902
Puerto Rico Ports Authority (American Airlines),
6.3s, 2023 2,370 2,407,280
Puerto Rico Ports Authority (American Airlines),
6.25s, 2026 1,500 1,513,935
-----------
$14,874,325
- ----------------------------------------------------------------------------------
Health Care Revenue - 9.1%
Boston, MA, Industrial Development Finance
Authority Rev. (Stonehedge Convalescent
Center), 10.75s, 2011 $ 620 $ 636,560
Massachusetts Health & Education Facilities
Authority (Caritas Christi), 5.7s, 2015 1,000 946,920
Massachusetts Health & Education Facilities
Authority (Children's Hospital), 6.125s, 2012 2,285 2,369,911
Massachusetts Health & Education Facilities
Authority (Jordan Hospital), 5.25s, 2018 2,555 2,288,335
Massachusetts Health & Education Facilities
Authority (North Adams Regional Hospital),
6.625s, 2018 1,000 1,029,800
Massachusetts Health & Education Facilities
Authority (South Shore Hospital), 5.625s, 2019 2,000 1,908,980
Massachusetts Industrial Finance Agency
(Beverly Enterprises), 8.375s, 2009 4,040 4,334,233
Massachusetts Industrial Finance Agency
(Evanswood), 7.625s, 2014 1,200 1,212,000
Massachusetts Industrial Finance Agency
(Massachusetts Biomedical Research), 0s, 2004 5,000 3,967,700
Massachusetts Industrial Finance Agency
(Massachusetts Biomedical Research), 0s, 2010 5,300 2,933,391
Massachusetts Industrial Finance Agency
(Needham/Hamilton House), 11s, 2010 400 415,776
Massachusetts Industrial Finance Agency (WNR,
Inc.), 9s, 2023 925 792,170
-----------
$22,835,776
- ----------------------------------------------------------------------------------
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- ----------------------------------------------------------------------------------
<S> <C> <C>
Industrial Revenue (Corporate Guarantee) - 1.5%
Massachusetts Development Finance Agency
Rev. (Springfield Resources Recovery),
5.625s, 2019 $2,000 $ 1,915,880
Massachusetts Industrial Finance Agency (Welch
Foods, Inc.), 5.625s, 2017 1,700 1,614,133
Springfield, MA, Industrial Development Finance
Agency (Terminal Building), 8s, 2001 294 296,660
-----------
$ 3,826,673
- ----------------------------------------------------------------------------------
Insured Health Care Revenue - 4.4%
Boston, MA, Industrial Development Finance
Authority Rev. (Alzheimers Center), FHA,
5.5s, 2012 $ 750 $ 742,388
Massachusetts Health & Education Facilities
Authority (Beth Israel Hospital), AMBAC,
8.826s, 2025 ++++ 5,000 5,027,250
Massachusetts Health & Education Facilities
Authority (Central New England Health), AMBAC,
5.5s, 2014 1,250 1,244,575
Massachusetts Health & Education Facilities
Authority (Newton Wellsley College), MBIA,
6.125s, 2015 1,000 1,039,170
Massachusetts Health & Education Facilities
Authority (Partners Healthcare Systems), MBIA,
5.375s, 2018 2,000 1,909,760
Massachusetts Health & Education Facilities
Authority (UMass Memorial), AMBAC,
5.25s, 2014 1,000 965,800
-----------
$10,928,943
- ----------------------------------------------------------------------------------
Multi-Family Housing Revenue - 1.1%
Massachusetts Housing Finance Agency, FNMA,
6.9s, 2025 $1,700 $ 1,790,661
Somerville, MA, Housing Authority Rev.
(Clarendon Hill), GMNA, 7.85s, 2010 890 917,065
-----------
$ 2,707,726
- ----------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 2.9%
Commonwealth of Massachusetts, 5s, 2017 $3,250 $ 2,994,550
Territory of Virgin Islands Public Finance
Authority, 5.875s, 2018 1,520 1,474,947
Territory of Virgin Islands Public Finance
Authority, 5.5s, 2022 3,000 2,817,570
-----------
$ 7,287,067
- ----------------------------------------------------------------------------------
Single Family Housing Revenue - 1.5%
Massachusetts Housing Finance Agency,
6.6s, 2026 $ 850 $ 874,616
Massachusetts Industrial Finance Agency, MBIA,
6.35s, 2022 2,880 2,947,622
-----------
$ 3,822,238
- ----------------------------------------------------------------------------------
Solid Waste Revenue - 0.8%
Massachusetts Industrial Finance Agency (Ogden
Haverhill), 5.6s, 2019 $2,000 $ 1,901,980
- ----------------------------------------------------------------------------------
Turnpike Revenue - 1.2%
Massachusetts Turnpike Authority, Metropolitan
Highway Systems Rev., AMBAC, 5.25s, 2015 $3,080 $ 2,972,446
- ----------------------------------------------------------------------------------
Universities - 14.3%
Commonwealth of Massachusetts College
Building, MBIA, 5.625s, 2016 $1,650 $ 1,646,980
Massachusetts Development Finance Agency
Rev. (Eastern Nazarine College), 5.625s, 2019 1,700 1,586,338
</TABLE>
19-MMA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Universities - continued
Massachusetts Development Finance Agency
Rev. (Suffolk University), 5.75s, 2019 $1,000 $ 954,380
Massachusetts Development Finance Agency
Rev. (Suffolk University), 5.85s, 2029 1,000 946,190
Massachusetts Development Finance Agency
Rev. (Xaverian Brothers High School), 5.55s, 2019 1,000 944,790
Massachusetts Development Finance Agency
Rev. (Xaverian Brothers High School), 5.65s, 2029 1,000 935,930
Massachusetts Development Finance Agency
Rev. (Williston Northampton School), 6.5s, 2028 1,000 963,390
Massachusetts Health & Education Facilities
Authority (Boston College), 5.25s, 2018 3,500 3,292,870
Massachusetts Health & Education Facilities
Authority (Boston College), 5.25s, 2023 4,350 4,027,839
Massachusetts Health & Education Facilities
Authority (Boston University), MBIA, 9.284s, 2031 5,000 5,446,200
Massachusetts Health & Education Facilities
Authority (Learning Center for Deaf Children),
6.1s, 2019 1,000 969,470
Massachusetts Health & Education Facilities
Authority (Wheaton College), 5.25s, 2019 1,000 924,550
Massachusetts Industrial Finance Agency
(Belmont Hill School), 5.625s, 2020 1,150 1,100,136
Massachusetts Industrial Finance Agency
(Brandeis University), MBIA, 0s, 2004 1,000 790,340
Massachusetts Industrial Finance Agency
(Brandeis University), MBIA, 0s, 2005 1,000 747,510
Massachusetts Industrial Finance Agency
(Brandeis University), MBIA, 0s, 2009 1,000 594,670
Massachusetts Industrial Finance Agency
(Brandeis University), MBIA, 0s, 2010 1,000 558,550
Massachusetts Industrial Finance Agency
(Brandeis University), MBIA, 0s, 2011 500 261,800
Massachusetts Industrial Finance Agency
(Concord Academy), 5.5s, 2027 2,000 1,812,660
Massachusetts Industrial Finance Agency (Groton
School), 5s, 2018 3,060 2,762,048
Massachusetts Industrial Finance Agency (Lesley
College), CONNIE LEE, 6.3s, 2025 2,000 2,082,960
Massachusetts Industrial Finance Agency (Tabor
Academy), 5.4s, 2018 1,000 923,390
Massachusetts Industrial Finance Agency
(Western New England College), AMBAC,
5s, 2018 1,555 1,410,245
------------
$ 35,683,236
- --------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 7.1%
Massachusetts Water Pollution Abatement,
5.125s, 2016 $1,600 $ 1,520,768
Massachusetts Water Pollution Abatement,
5.75s, 2017 3,000 3,032,130
Massachusetts Water Resources Authority,
6.5s, 2019 8,470 9,248,901
Massachusetts Water Resources Authority,
AMBAC, 5.25s, 2015 1,500 1,463,445
Massachusetts Water Resources Authority,
MBIA, 5s, 2016 1,000 925,610
Massachusetts Water Resources Authority,
MBIA, 5.25s, 2020 1,535 1,437,927
------------
$ 17,628,781
- --------------------------------------------------------------------------------------
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Other - 1.3%
Commonwealth of Massachusetts, 5.125s, 2015 $1,000 $ 953,510
Commonwealth of Massachusetts, GANS, 5.125s,
2013 1,000 968,750
Rail Connections, Inc. Route 128 Parking Garage,
6s, 2012 450 457,322
Rail Connections, Inc. Route 128 Parking Garage,
6s, 2013 500 505,205
Rail Connections, Inc. Route 128 Parking Garage,
6s, 2014 250 251,525
------------
$ 3,136,312
- --------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $237,113,358) $243,361,937
- --------------------------------------------------------------------------------------
Floating Rate Demand Notes - 2.4%
- --------------------------------------------------------------------------------------
East Baton Rouge, LA, due 10/01/99 $1,600 $ 1,600,000
Harris County, TX (Methodist Hospital), due
10/01/99 1,500 1,500,000
Massachusetts Health & Educational Facilities
Authority, due 10/01/99 1,200 1,200,000
Massachusetts Health & Educational Facilities
Authority (Berklee College Of Music), due
10/06/99 1,010 1,010,000
Massachusetts Water Resources Authority, due
10/06/99 700 700,000
- --------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 6,010,000
- --------------------------------------------------------------------------------------
Total Investments (Identified Cost, $243,123,358) $249,371,937
Other Assets, Less Liabilities - 0.2% 388,421
- --------------------------------------------------------------------------------------
Net assets - 100.0% $249,760,358
- --------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
Portfolio Footnotes:
[sec][sec]When-issued security. At September 30, 1999, each Fund had sufficient
cash and/or securities at least equal to the value of the when-issued
security.
++++Inverse floating rate security.
+Restricted security.
###Security segregated as collateral for an open futures contract.
</TABLE>
20 - MMA
<PAGE>
Financial Statements
Statements of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
Alabama Arkansas California
September 30, 1999 Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments -
Identified cost $ 84,186,096 $121,556,001 $276,272,629
Unrealized appreciation 942,626 4,115,064 7,456,001
------------ ------------ ------------
Total investments, at value $ 85,128,722 $125,671,065 $283,728,630
Cash 1,096 22,206 49,266
Receivable for Fund shares sold 124,134 65,275 456,114
Receivable for investments sold 2,816,258 1,011,278 9,816
Interest receivable 1,381,046 1,847,333 3,408,473
Other assets 1,093 1,834 3,606
------------ ------------ ------------
Total assets $ 89,452,349 $128,618,991 $287,655,905
------------ ------------ ------------
Liabilities:
Distributions payable $ 199,989 $ 291,881 $ 613,482
Payable for Fund shares reacquired 20,969 108,673 560,995
Payable for investments purchased 2,549,783 1,000,470 --
Payable for when-issued investments purchased 1,506,753 -- 2,030,893
Payable for daily variation margin on open futures contracts 1,688 2,531 5,907
Payable to affiliates -
Management fee 812 1,213 1,552
Shareholder servicing agent fee 232 347 776
Distribution and service fee 822 -- 9,091
Administrative fee 35 52 116
Accrued expenses and other liabilities 59,289 66,929 120,775
------------ ------------ ------------
Total liabilities $ 4,340,372 $ 1,472,096 $ 3,343,587
------------ ------------ ------------
Net assets $ 85,111,977 $127,146,895 $284,312,318
------------ ------------ ------------
Net assets consist of:
Paid-in capital $ 83,139,858 $129,876,517 $281,941,953
Unrealized appreciation on investments 940,376 4,111,721 7,448,220
Accumulated undistributed net realized
gain (loss) on investments 814,460 (6,696,998) (4,910,937)
Accumulated undistributed (distributions in excess of)
net investment income 217,283 (144,345) (166,918)
------------ ------------ ------------
Total $ 85,111,977 $127,146,895 $284,312,318
------------ ------------ ------------
Shares of beneficial interest outstanding:
Class A 7,189,941 12,116,190 37,894,606
Class B 1,161,940 1,022,867 11,217,297
Class C -- -- 1,910,763
------------ ------------ ------------
Total shares of beneficial interest outstanding 8,351,881 13,139,057 51,022,666
------------ ------------ ------------
Net assets:
Class A $ 73,268,482 $117,248,021 $211,144,679
Class B 11,843,495 9,898,874 62,500,457
Class C -- -- 10,667,182
------------ ------------ ------------
Total net assets $ 85,111,977 $127,146,895 $284,312,318
------------ ------------ ------------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $ 10.19 $ 9.68 $ 5.57
------------ ------------ ------------
Offering price per share (100 [divided by] 95.25 of NAV per share) $ 10.70 $ 10.16 $ 5.85
------------ ------------ ------------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $ 10.19 $ 9.68 $ 5.57
------------ ------------ ------------
Class C shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) -- -- $ 5.58
------------ ------------ ------------
</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.
21
<PAGE>
Financial Statements - continued
Statements of Assets and Liabilities (Unaudited) - continued
<TABLE>
<CAPTION>
Florida Georgia
September 30, 1999 Fund Fund
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments -
Identified cost $ 85,413,652 $64,910,836
Unrealized appreciation 1,805,871 941,085
------------ -----------
Total investments, at value $ 87,219,523 $65,851,921
Cash 45,643 37,908
Receivable for Fund shares sold 229,494 500,523
Receivable for investments sold 40,000 44,357
Interest receivable 1,703,464 1,114,729
Other assets 1,282 944
------------ -----------
Total assets $ 89,239,406 $67,550,382
------------ -----------
Liabilities:
Distributions payable $ 234,579 $ 131,074
Payable for Fund shares reacquired 356,501 73,460
Payable for investments purchased 1,019,040 329,745
Payable for daily variation margin on open futures contracts 1,969 1,407
Payable to affiliates -
Management fee 837 638
Shareholder servicing agent fee 239 182
Distribution and service fee 3,263 766
Administrative fee 36 27
Accrued expenses and other liabilities 61,643 67,114
------------ -----------
Total liabilities $ 1,678,107 $ 604,413
------------ -----------
Net assets $ 87,561,299 $66,945,969
------------ -----------
Net assets consist of:
Paid-in capital $ 92,083,106 $66,684,681
Unrealized appreciation on investments 1,803,340 939,397
Accumulated net realized loss on investments (6,356,438) (636,653)
Accumulated undistributed (distributions in excess of)
net investment income 31,291 (41,456)
------------ -----------
Total $ 87,561,299 $66,945,969
------------ -----------
Shares of beneficial interest outstanding:
Class A 6,959,413 5,003,601
Class B 2,198,761 1,466,147
------------ -----------
Total shares of beneficial interest outstanding 9,158,174 6,469,748
------------ -----------
Net assets:
Class A $ 66,542,332 $51,769,573
Class B 21,018,967 15,176,396
------------ -----------
Total net assets $ 87,561,299 $66,945,969
------------ -----------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $ 9.56 $ 10.35
------------ -----------
Offering price per share (100 [divided by] 95.25 of net asset value per share) $ 10.04 $ 10.87
------------ -----------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $ 9.56 $ 10.35
------------ -----------
<CAPTION>
Maryland Massachusetts
September 30, 1999 Fund Fund
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments -
Identified cost $144,839,652 $243,123,358
Unrealized appreciation 3,834,745 6,248,579
------------ ------------
Total investments, at value $148,674,397 $249,371,937
Cash 87,530 118,885
Receivable for Fund shares sold 28,998 99,178
Receivable for investments sold 1,716,992 145,491
Interest receivable 2,101,647 3,944,256
Other assets 1,979 3,386
------------ ------------
Total assets $152,611,543 $253,683,133
------------ ------------
Liabilities:
Distributions payable $ 284,128 $ 582,584
Payable for Fund shares reacquired 115,032 148,034
Payable for investments purchased 1,539,027 3,047,996
Payable for daily variation margin on open futures contracts 3,375 5,344
Payable to affiliates -
Management fee 1,437 2,383
Shareholder servicing agent fee 410 681
Distribution and service fee 1,947 2,847
Administrative fee 62 102
Accrued expenses and other liabilities 78,825 132,804
------------ ------------
Total liabilities $ 2,024,243 $ 3,922,775
------------ ------------
Net assets $150,587,300 $249,760,358
------------ ------------
Net assets consist of:
Paid-in capital $150,362,286 $247,293,454
Unrealized appreciation on investments 3,830,307 6,241,329
Accumulated net realized loss on investments (3,410,227) (3,770,984)
Accumulated undistributed (distributions in excess of)
net investment income (195,066) (3,441)
------------ ------------
Total $150,587,300 $249,760,358
------------ ------------
Shares of beneficial interest outstanding:
Class A 11,182,456 20,855,485
Class B 2,647,715 2,444,733
------------ ------------
Total shares of beneficial interest outstanding 13,830,171 23,300,218
------------ ------------
Net assets:
Class A $121,772,519 $223,539,658
Class B 28,814,781 26,220,700
------------ ------------
Total net assets $150,587,300 $249,760,358
------------ ------------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $ 10.89 $ 10.72
------------ ------------
Offering price per share (100 [divided by] 95.25 of net asset value per share) $ 11.43 $ 11.25
------------ ------------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $ 10.88 $ 10.73
------------ ------------
</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 and
Class B shares.
See notes to financial statements.
22
<PAGE>
Financial Statements - continued
Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
Alabama Arkansas California
Six Months Ended September 30, 1999 Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net investment income:
Interest income $ 2,612,979 $ 3,752,765 $ 8,142,497
------------ ------------ -------------
Expenses -
Management fee $ 239,462 $ 359,284 $ 806,987
Trustees' compensation 6,750 8,506 9,875
Shareholder servicing agent fee 43,699 65,350 146,701
Distribution and service fee (Class A) 93,911 60,224 109,918
Distribution and service fee (Class B) 59,951 50,822 279,101
Distribution and service fee (Class C) -- -- 52,228
Administrative fee 6,534 9,803 22,005
Custodian fee 16,513 22,438 44,506
Printing 1,703 2,095 2,734
Postage 825 2,634 6,068
Auditing fees 15,591 15,592 15,591
Legal fees 2,231 2,869 7,542
Miscellaneous 27,640 41,862 76,608
------------ ------------ -------------
Total expenses $ 514,810 $ 641,479 $ 1,579,864
Fees paid indirectly (5,825) (6,459) (10,434)
Reduction of expenses by investment advisor (72,360) (108,512) (513,585)
------------ ------------ -------------
Net expenses $ 436,625 $ 526,508 $ 1,055,845
------------ ------------ -------------
Net investment income $ 2,176,354 $ 3,226,257 $ 7,086,652
------------ ------------ -------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ (167,485) $ 13,002 $ 903,594
Futures contracts (5,451) (7,952) (18,410)
------------ ------------ -------------
Net realized gain (loss) on investments $ (172,936) $ 5,050 $ 885,184
------------ ------------ -------------
Change in unrealized depreciation -
Investments $ (4,558,490) $ (6,101,089) $ (17,587,202)
Futures contracts (2,250) (3,343) (7,781)
------------ ------------ -------------
Net unrealized loss on investments $ (4,560,740) $ (6,104,432) $ (17,594,983)
------------ ------------ -------------
Net realized and unrealized loss on investments $ (4,733,676) $ (6,099,382) $ (16,709,799)
------------ ------------ -------------
Decrease in net assets from operations $ (2,557,322) $ (2,873,125) $ (9,623,147)
============ ============ =============
</TABLE>
See notes to financial statements.
23
<PAGE>
Financial Statements - continued
Statements of Operations (Unaudited) - continued
<TABLE>
<CAPTION>
Florida Georgia Maryland Massachusetts
Six Months Ended September 30, 1999 Fund Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income:
Interest income $ 2,735,448 $ 2,005,762 $ 4,394,649 $ 7,840,320
------------ ------------ ------------ -------------
Expenses -
Management fee $ 262,614 $ 190,151 $ 428,562 $ 709,750
Trustees' compensation 9,578 9,446 9,676 10,560
Shareholder servicing agent fee 47,761 34,586 77,949 129,096
Distribution and service fee (Class A) -- 67,971 222,259 406,481
Distribution and service fee (Class B) 86,537 73,977 144,480 129,578
Administrative fee 7,165 5,188 11,693 19,364
Custodian fee 18,444 11,093 28,160 41,688
Printing 1,508 1,663 2,192 7,520
Postage 2,129 1,423 2,574 4,537
Auditing fees 14,841 15,591 15,592 15,341
Legal fees 5,526 1,053 3,595 3,177
Miscellaneous 33,513 32,564 48,874 75,848
------------ ------------ ------------ -------------
Total expenses $ 489,616 $ 444,706 $ 995,606 $ 1,552,940
Fees paid indirectly (4,927) (6,387) (11,955) (8,434)
Reduction of expenses by investment adviser (79,196) (57,410) (129,451) (214,310)
------------ ------------ ------------ -------------
Net expenses $ 405,493 $ 380,909 $ 854,200 $ 1,330,196
------------ ------------ ------------ -------------
Net investment income $ 2,329,955 $ 1,624,853 $ 3,540,449 $ 6,510,124
------------ ------------ ------------ -------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 590,047 $ (37,911) $ 129,181 $ 39,956
Futures contracts (9,394) 179,778 46,289 (17,755)
------------ ------------ ------------ -------------
Net realized gain on investments $ 580,653 $ 141,867 $ 175,470 $ 22,201
------------ ------------ ------------ -------------
Change in unrealized depreciation -
Investments $ (5,995,529) $ (3,927,956) $ (8,479,911) $ (14,774,876)
Futures contracts (2,531) (1,688) (9,336) (7,250)
------------ ------------ ------------ -------------
Net unrealized loss on investments $ (5,998,060) $ (3,929,644) $ (8,489,247) $ (14,782,126)
------------ ------------ ------------ -------------
Net realized and unrealized loss on investments $ (5,417,407) $ (3,787,777) $ (8,313,777) $ (14,759,925)
------------ ------------ ------------ -------------
Decrease in net assets from operations $ (3,087,452) $ (2,162,924) $ (4,773,328) $ (8,249,801)
------------ ------------ ------------ -------------
</TABLE>
See notes to financial statements.
24
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Alabama Arkansas California
Six Months Ended September 30, 1999 Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 2,176,354 $ 3,226,257 $ 7,086,652
Net realized gain (loss) on investments (172,936) 5,050 885,184
Net unrealized loss on investments (4,560,740) (6,104,432) (17,594,983)
------------ ------------ -------------
Decrease in net assets
from operations $ (2,557,322) $ (2,873,125) $ (9,623,147)
------------ ------------ -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (1,930,948) $ (3,025,162) $ (5,397,790)
From net investment income (Class B) (262,944) (211,839) (1,301,541)
From net investment income (Class C) -- -- (209,034)
------------ ------------ -------------
Total distributions declared to shareholders $ (2,193,892) $ (3,237,001) $ (6,908,365)
------------ ------------ -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 7,937,137 $ 4,705,730 $ 25,408,319
Net asset value of shares issued to shareholders
in reinvestment of distributions 978,411 1,481,362 3,181,989
Cost of shares reacquired (4,355,541) (8,182,881) (26,284,989)
------------ ------------ -------------
Net increase (decrease) in net assets from
Fund share transactions $ 4,560,007 $ (1,995,789) $ 2,305,319
------------ ------------ -------------
Total decrease in net assets $ (191,207) $ (8,105,915) $ (14,226,193)
Net assets:
At beginning of period 85,303,184 135,252,810 298,538,511
------------ ------------ -------------
At end of period $ 85,111,977 $127,146,895 $ 284,312,318
============ ============ =============
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ 217,283 $ (144,345) $ (166,918)
============ ============ =============
</TABLE>
See notes to financial statements.
25
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets (Unaudited) - continued
<TABLE>
<CAPTION>
Florida
Six Months Ended September 30, 1999 Fund
- --------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 2,329,955
Net realized gain on investments 580,653
Net unrealized loss on investments (5,998,060)
-------------
Decrease in net assets
from operations $ (3,087,452)
-------------
Distributions declared to shareholders -
From net investment income (Class A) $ (1,880,586)
From net investment income (Class B) (454,707)
-------------
Total distributions declared to shareholders $ (2,335,293)
-------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 7,415,181
Net asset value of shares issued to shareholders
in reinvestment of distributions 895,881
Cost of shares reacquired (13,767,287)
-------------
Net decrease in net assets from
Fund share transactions $ (5,456,225)
-------------
Total decrease in net assets $ (10,878,970)
Net assets:
At beginning of period 98,440,269
-------------
At end of period $ 87,561,299
=============
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ 31,291
=============
<CAPTION>
Georgia Maryland Massachusetts
Six Months Ended September 30, 1999 Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 1,624,853 $ 3,540,449 $ 6,510,124
Net realized gain on investments 141,867 175,470 22,201
Net unrealized loss on investments (3,929,644) (8,489,247) (14,782,126)
------------ ------------- -------------
Decrease in net assets
from operations $ (2,162,924) $ (4,773,328) $ (8,249,801)
------------ ------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (1,321,102) $ (2,965,362) $ (5,864,779)
From net investment income (Class B) (303,712) (581,279) (570,015)
------------ ------------- -------------
Total distributions declared to shareholders $ (1,624,814) $ (3,546,641) $ (6,434,794)
------------ ------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 3,624,508 $ 7,481,947 $ 14,418,189
Net asset value of shares issued to shareholders
in reinvestment of distributions 816,028 1,896,356 3,010,671
Cost of shares reacquired (5,183,948) (10,634,228) (18,579,459)
------------ ------------- -------------
Net decrease in net assets from
Fund share transactions $ (743,412) $ (1,255,925) $ (1,150,599)
------------ ------------- -------------
Total decrease in net assets $ (4,531,150) (9,575,894) $ (15,835,194)
Net assets:
At beginning of period 71,477,119 160,163,194 265,595,552
------------ ------------- -------------
At end of period $ 66,945,969 $ 150,587,300 $ 249,760,358
============ ============= =============
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ (41,456) $ (195,066) $ (3,441)
============ ============= =============
</TABLE>
See notes to financial statements.
26
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets - continued
<TABLE>
<CAPTION>
Alabama Arkansas California
Year Ended March 31, 1999 Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 4,158,764 $ 6,715,372 $ 13,254,945
Net realized gain on investments 1,016,442 590,303 2,724,580
Net unrealized gain (loss) on investments (1,146,571) (1,184,427) 1,479,688
------------ ------------- -------------
Increase in net assets
from operations $ 4,028,635 $ 6,121,248 $ 17,459,213
------------ ------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (3,730,766) $ (6,318,426) $ (10,947,288)
From net investment income (Class B) (406,822) (371,258) (2,054,879)
From net investment income (Class C) -- -- (252,778)
From net realized gain on investments (Class A) (201,655) -- --
From net realized gain on investments (Class B) (27,134) -- --
In excess of net investment income (Class A) -- -- (71,408)
In excess of net investment income (Class B) -- -- (13,404)
In excess of net investment income (Class C) -- -- (1,649)
------------ ------------- -------------
Total distributions declared to shareholders $ (4,366,377) $ (6,689,684) $ (13,341,406)
------------ ------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 7,670,880 $ 10,671,454 $ 86,096,243
Net asset value of shares issued to shareholders
in reinvestment of distributions 1,798,701 3,098,920 5,808,413
Cost of shares reacquired (7,440,655) (19,391,453) (68,090,571)
------------ ------------- -------------
Net increase (decrease) in net assets from
Fund share transactions $ 2,028,926 $ (5,621,079) $ 23,814,085
------------ ------------- -------------
Total increase (decrease) in net assets $ 1,691,184 $ (6,189,515) $ 27,931,892
Net assets:
At beginning of period 83,612,000 141,442,325 270,606,619
------------ ------------- -------------
At end of period $ 85,303,184 $ 135,252,810 $ 298,538,511
============ ============= =============
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ 234,821 $ (133,601) $ (345,205)
============ ============= =============
</TABLE>
See notes to financial statements.
27
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets - continued
<TABLE>
<CAPTION>
Florida Georgia
Year Ended March 31, 1999 Fund Fund
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 4,587,693 $ 3,489,582
Net realized gain (loss) on investments 1,059,108 2,092,576
Net unrealized loss on investments (958,281) (2,200,188)
------------- -------------
Increase in net assets
from operations $ 4,688,520 $ 3,381,970
------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (3,800,176) $ (2,952,432)
From net investment income (Class B) (760,880) (537,150)
In excess of net investment income (Class A) -- (9,402)
In excess of net investment income (Class B) -- (1,711)
------------- -------------
Total distributions declared to shareholders $ (4,561,056) $ (3,500,695)
------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 25,238,186 $ 10,300,409
Net asset value of shares issued to shareholders
in reinvestment of distributions 1,710,996 1,766,381
Cost of shares reacquired (23,066,502) (10,887,622)
------------- -------------
Net increase in net assets from
Fund share transactions $ 3,882,680 $ 1,179,168
------------- -------------
Total increase in net assets $ 4,010,144 $ 1,060,443
Net assets:
At beginning of period 94,430,125 70,416,676
------------- -------------
At end of period $ 98,440,269 $ 71,477,119
------------- -------------
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ 36,629 $ (41,495)
------------- -------------
<CAPTION>
Maryland Massachusetts
Year Ended March 31, 1999 Fund Fund
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 7,062,204 $ 13,185,391
Net realized gain (loss) on investments 820,603 (114,641)
Net unrealized loss on investments (697,500) (228,393)
------------- -------------
Increase in net assets
from operations $ 7,185,307 $ 12,842,357
------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (6,056,412) $ (11,808,364)
From net investment income (Class B) (992,797) (945,242)
In excess of net investment income (Class A) -- --
In excess of net investment income (Class B) -- --
------------- -------------
Total distributions declared to shareholders $ (7,049,209) $ (12,753,606)
------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 22,326,800 $ 45,386,831
Net asset value of shares issued to shareholders
in reinvestment of distributions 3,747,717 5,976,296
Cost of shares reacquired (13,687,036) (42,467,776)
------------- -------------
Net increase in net assets from
Fund share transactions $ 12,387,481 $ 8,895,351
------------- -------------
Total increase in net assets $ 12,523,579 $ 8,984,102
Net assets:
At beginning of period 147,639,615 256,611,450
------------- -------------
At end of period $ 160,163,194 $ 265,595,552
------------- -------------
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ (188,874) $ (78,771)
------------- -------------
</TABLE>
See notes to financial statements.
28
<PAGE>
Financial Statements - continued
Financial Highlights
<TABLE>
<CAPTION>
Alabama 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 $10.76
------
Income from investment operations# -
Net investment income[sec] $ 0.27
Net realized and unrealized gain (loss) on
investments (0.57)
------
Total from investment operations $(0.30)
------
Less distributions declared to shareholders -
From net investment income $(0.27)
From net realized gain on investments --
In excess of net realized gain on investments --
------
Total distributions declared to shareholders $(0.27)
------
Net asset value - end of period $10.19
------
Total return++ (2.83)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.91%+
Net investment income 5.09%+
Portfolio turnover 26%
Net assets at end of period (000 Omitted) $73,268
[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## 1.08%+
Net investment income 4.92%+
+Annualized.
++Not annualized.
#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 $ 10.80 $ 10.48 $ 10.52 $ 10.34 $ 10.27
------- ------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.54 $ 0.55 $ 0.56 $ 0.55 $ 0.56
Net realized and unrealized gain (loss) on
investments (0.01) 0.45 0.04 0.18 0.09
------- ------- ------- ------- -------
Total from investment operations $ 0.53 $ 1.00 $ 0.60 $ 0.73 $ 0.65
------- ------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.54) $ (0.55) $ (0.55) $ (0.55) $ (0.55)
From net realized gain on investments (0.03) (0.13) (0.09) -- --
In excess of net realized gain on investments -- -- -- -- (0.03)
-------- -------- -------- -------- --------
Total distributions declared to shareholders $ (0.57) $ (0.68) $ (0.64) $ (0.55) $ (0.58)
-------- -------- -------- -------- --------
Net asset value - end of period $ 10.76 $ 10.80 $ 10.48 $ 10.52 $ 10.34
-------- -------- -------- -------- --------
Total return++ 5.03% 9.72% 5.82% 7.13% 6.51%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.95% 1.04% 1.10% 1.14% 1.15%
Net investment income 5.04% 5.12% 5.28% 5.18% 5.47%
Portfolio turnover 23% 21% 22% 37% 30%
Net assets at end of period (000 Omitted) $73,851 $75,538 $76,928 $82,484 $83,805
[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 $ 0.53 $ 0.54 -- -- --
Ratios (to average net assets):
Expenses## 1.07% 1.11% -- -- --
Net investment income 4.92% 5.05% -- -- --
+Annualized.
++Not annualized.
#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.
29
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
Alabama 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 $10.76
------
Income from investment operations# -
Net investment income[sec] $ 0.23
Net realized and unrealized gain (loss) on
investments (0.57)
------
Total from investment operations $(0.34)
------
Less distributions declared to shareholders -
From net investment income $(0.23)
From net realized gain on investments --
In excess of net realized gain on investments --
------
Total distributions declared to shareholders $(0.23)
------
Net asset value - end of period $10.19
------
Total return (3.19)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses ## 1.66%+
Net investment income 4.34%+
Portfolio turnover 26%
Net assets at end of period (000 Omitted) $11,843
[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## 1.83%+
Net investment income 4.17%+
+Annualized.
++Not annualized.
#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 $10.80 $ 10.48 $ 10.52 $ 10.34 $ 10.27
------- ------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.46 $ 0.47 $ 0.47 $ 0.46 $ 0.47
Net realized and unrealized gain (loss) on
investments (0.01) 0.45 0.04 0.18 0.09
------- ------- ------- ------- -------
Total from investment operations $ 0.45 $ 0.92 $ 0.51 $ 0.64 $ 0.56
------- ------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $(0.46) $ (0.47) $ (0.47) $ (0.46) $ (0.46)
From net realized gain on investments (0.03) (0.13) (0.08) -- --
In excess of net realized gain on investments -- -- -- -- (0.03)
-------- -------- ------- ------- -------
Total distributions declared to shareholders $(0.49) $ (0.60) $ (0.55) $ (0.46) $ (0.49)
-------- -------- ------- ------- -------
Net asset value - end of period $10.76 $ 10.80 $ 10.48 $ 10.52 $ 10.34
-------- -------- ------- ------- -------
Total return 4.25% 8.91% 4.98% 6.25% 5.64%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses ## 1.69% 1.79% 1.90% 1.96% 1.97%
Net investment income 4.29% 4.36% 4.48% 4.34% 4.63%
Portfolio turnover 23% 21% 22% 37% 30%
Net assets at end of period (000 Omitted) $11,452 $8,074 $7,281 $6,139 $4,396
[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 $ 0.45 $ 0.46 -- -- --
Ratios (to average net assets):
Expenses## 1.81% 1.86% -- -- --
Net investment income 4.17% 4.29% -- -- --
+Annualized.
++Not annualized.
#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.
30
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
Arkansas 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 $ 10.14
--------
Income from investment operations# -
Net investment income[sec] $ 0.25
Net realized and unrealized gain (loss) on
investments (0.46)
----------
Total from investment operations $ (0.21)
----------
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 $ 9.68
----------
Total return++ (2.10)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.74%+
Net investment income 4.99%+
Portfolio turnover 9%
Net assets at end of period (000 Omitted) $117,248
[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## 0.91%+
Net investment income 4.82%+
+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 $ 10.18 $ 9.72 $ 9.75 $ 9.66 $ 9.69
-------- ---------- -------- -------- --------
Income from investment operations# -
Net investment income[sec] $ 0.50 $ 0.50 $ 0.50 $ 0.50 $ 0.53
Net realized and unrealized gain (loss) on
investments (0.04) 0.46 (0.03) 0.09 0.02
-------- ---------- -------- -------- --------
Total from investment operations $ 0.46 $ 0.96 $ 0.47 $ 0.59 $ 0.55
-------- ---------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.50) $ (0.50) $ (0.50) $ (0.50) $ (0.53)
In excess of net investment income -- (0.00)+++ -- -- --
In excess of net realized gain on investments -- -- -- -- (0.05)
-------- ---------- -------- -------- --------
Total distributions declared to shareholders $ (0.50) $ (0.50) $ (0.50) $ (0.50) $ (0.58)
-------- ---------- -------- -------- --------
Net asset value - end of period $ 10.14 $ 10.18 $ 9.72 $ 9.75 $ 9.66
-------- ---------- -------- -------- --------
Total return++ 4.60% 10.06% 4.87% 6.19% 5.90%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.77% 0.85% 0.92% 0.93% 0.75%
Net investment income 4.92% 4.97% 5.14% 5.10% 5.51%
Portfolio turnover 12% 15% 9% 6% 24%
Net assets at end of period (000 Omitted) $124,644 $134,072 $144,263 $172,907 $187,105
[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 $ 0.49 $ 0.49 -- -- $ 0.52
Ratios (to average net assets):
Expenses## 0.89% 0.92% -- -- 0.82%
Net investment income 4.80% 4.90% -- -- 5.43%
+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.
31
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
Arkansas 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 $ 10.14
--------
Income from investment operations# -
Net investment income[sec] $ 0.20
Net realized and unrealized gain (loss) on
investments (0.46)
--------
Total from investment operations $ (0.26)
--------
Less distributions declared to shareholders -
From net investment income $ (0.20)
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 $ 9.68
--------
Total return (2.54)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.63%+
Net investment income 4.10%+
Portfolio turnover 9%
Net assets at end of period (000 Omitted) $9,899
[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 $ 0.19
Ratios (to average net assets):
Expenses## 1.80%+
Net investment income 3.93%+
+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 $ 10.18 $ 9.72 $ 9.75 $ 9.65 $ 9.69
------- -------- ------ ------ -------
Income from investment operations# -
Net investment income[sec] $ 0.43 $ 0.42 $ 0.42 $ 0.42 $ 0.42
Net realized and unrealized gain (loss) on
investments (0.04) 0.46 (0.03) 0.10 0.01
------- -------- ------ ------ -------
Total from investment operations $ 0.39 $ 0.88 $ 0.39 $ 0.52 $ 0.43
------- -------- ------ ------ -------
Less distributions declared to shareholders -
From net investment income $ (0.43) $ (0.42) $(0.42) $(0.42) $(0.42)
In excess of net investment income -- (0.00)+++ -- -- --
In excess of net realized gain on investments -- -- -- -- (0.05)
-------- -------- ------ ------ -------
Total distributions declared to shareholders $ (0.43) $ (0.42) $(0.42) $(0.42) $(0.47)
-------- -------- ------ ------ -------
Net asset value - end of period $ 10.14 $ 10.18 $ 9.72 $ 9.75 $ 9.65
-------- -------- ------ ------ -------
Total return 3.91% 9.18% 4.05% 5.43% 4.67%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.43% 1.65% 1.71% 1.76% 1.84%
Net investment income 4.26% 4.15% 4.34% 4.27% 4.40%
Portfolio turnover 12% 15% 9% 6% 24%
Net assets at end of period (000 Omitted) $10,609 $7,370 $7,548 $7,950 $ 7,231
[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 $ 0.42 $ 0.41 -- -- $ 0.41
Ratios (to average net assets):
Expenses## 1.55% 1.72% -- -- 1.91%
Net investment income 4.14% 4.08% -- -- 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.
32
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
California 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 $ 5.89
----------
Income from investment operations# -
Net investment income[sec] $ 0.14
Net realized and unrealized gain (loss) on
investments (0.32)
----------
Total from investment operations $ (0.18)
----------
Less distributions declared to shareholders -
From net investment income $ (0.14)
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 $ (0.14)
----------
Net asset value - end of period $ 5.57
----------
Total return++ (3.08)%++
Ratios (to average net assets)/Supplemental
data[sec]:
Expenses## 0.53%+
Net investment income 5.01%+
Portfolio turnover 26%
Net assets at end of period (000 Omitted) $211,145
[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 $ 0.13
Ratios (to average net assets):
Expenses## 0.88%+
Net investment income 4.66%+
+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.
++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 $ 5.80 $ 5.47 $ 5.52 $ 5.41
---------- -------- -------- ----------
Income from investment operations# -
Net investment income[sec] $ 0.29 $ 0.29 $ 0.30 $ 0.30
Net realized and unrealized gain (loss) on
investments 0.09 0.33 (0.05) 0.11
---------- -------- -------- ----------
Total from investment operations $ 0.38 $ 0.62 $ 0.25 $ 0.41
---------- -------- -------- ----------
Less distributions declared to shareholders -
From net investment income $ (0.29) $ (0.29) $ (0.30) $ (0.30)
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 $ (0.29) $ (0.29) $ (0.30) $ (0.30)
---------- -------- -------- ----------
Net asset value - end of period $ 5.89 $ 5.80 $ 5.47 $ 5.52
---------- -------- -------- ----------
Total return++ 6.59% 11.51% 4.55% 7.86%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.60% 0.64% 0.66% 0.66%
Net investment income 4.82% 5.07% 5.36% 5.48%
Portfolio turnover 26% 49% 78% 69%
Net assets at end of period (000 Omitted) $226,903 $222,421 $232,612 $259,817
[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 $ 0.28 $ 0.29 $ 0.29
Ratios (to average net assets):
Expenses## 0.77% 0.79% 0.81% 0.81%
Net investment income 4.65% 4.92% 5.21% 5.33%
+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.
++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 $ 5.47
----------
Income from investment operations# -
Net investment income[sec] $ 0.31
Net realized and unrealized gain (loss) on
investments (0.05)
----------
Total from investment operations $ 0.26
----------
Less distributions declared to shareholders -
From net investment income $ (0.31)
From net realized gain on investments --
In excess of net investment income (0.00)+++
In excess of net realized gain on investments (0.01)
----------
Total distributions declared to shareholders $ (0.32)
----------
Net asset value - end of period $ 5.41
----------
Total return++ 4.85%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.69%
Net investment income 5.80%
Portfolio turnover 57%
Net assets at end of period (000 Omitted) $272,161
[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 $ 0.30
Ratios (to average net assets):
Expenses## 0.84%
Net investment income 5.65%
+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>
California 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 $ 5.89
---------
Income from investment operations# -
Net investment income[sec] $ 0.12
Net realized and unrealized gain (loss) on
investments (0.32)
---------
Total from investment operations $ (0.20)
---------
Less distributions declared to shareholders -
From net investment income $ (0.12)
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 $ (0.12)
---------
Net asset value - end of period $ 5.57
---------
Total return (3.46)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.31%+
Net investment income 4.23%+
Portfolio turnover 26%
Net assets at end of period (000 Omitted) $62,500
[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 $ 0.11
Ratios (to average net assets):
Expenses## 1.66%+
Net investment income 3.88%+
+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 $ 5.80 $ 5.47 $ 5.52 $ 5.41 $ 5.47
--------- ------- ------- --------- -------
Income from investment operations# -
Net investment income[sec] $ 0.24 $ 0.24 $ 0.25 $ 0.26 $ 0.25
Net realized and unrealized gain (loss) on
investments 0.09 0.33 (0.05) 0.11 (0.05)
--------- ------- ------- --------- -------
Total from investment operations $ 0.33 $ 0.57 $ 0.20 $ 0.37 $ 0.20
--------- ------- ------- --------- -------
Less distributions declared to shareholders -
From net investment income $ (0.24) $(0.24) $ (0.25) $ (0.26) $(0.25)
From net realized gain on investments -- -- -- -- --
In excess of net investment income (0.00)+++ -- -- (0.00)+++ --
In excess of net realized gain on investments -- -- -- -- (0.01)
--------- ------- ------- --------- -------
Total distributions declared to shareholders $ (0.24) $(0.24) $ (0.25) $ (0.26) $(0.26)
--------- ------- ------- --------- -------
Net asset value - end of period $ 5.89 $ 5.80 $ 5.47 $ 5.52 $ 5.41
--------- ------- ------- --------- -------
Total return 5.74% 10.62% 3.64% 6.93% 3.73%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.39% 1.44% 1.54% 1.54% 1.76%
Net investment income 4.02% 4.26% 4.48% 4.59% 4.72%
Portfolio turnover 26% 49% 78% 69% 57%
Net assets at end of period (000 Omitted) $61,458 $43,790 $36,694 $34,675 $29,057
[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 $ 0.23 $ 0.24 $ 0.24 $ 0.04
Ratios (to average net assets):
Expenses## 1.56% 1.59% 1.69% 1.91% 1.83%
Net investment income 3.85% 4.11% 4.33% 4.57% 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.
</TABLE>
See notes to financial statements.
34
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
California 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 $ 5.90
---------
Income from investment operations# -
Net investment income[sec] $ 0.11
Net realized and unrealized gain (loss) on
investments (0.32)
---------
Total from investment operations $ (0.21)
---------
Less distributions declared to shareholders -
From net investment income $ (0.11)
In excess of net investment income --
In excess of net realized gain on investments --
---------
Total distributions declared to shareholders $ (0.11)
---------
Net asset value - end of period $ 5.58
---------
Total return (3.51)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.43%+
Net investment income 4.11%+
Portfolio turnover 26%
Net assets at end of period (000 Omitted) $10,667
[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 $ 0.11
Ratios (to average net assets):
Expenses## 1.78%+
Net investment income 3.76%+
+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 $ 5.81 $ 5.48 $ 5.53 $ 5.42 $ 5.48
--------- ------- ------- -------- -------
Income from investment operations# -
Net investment income[sec] $ 0.23 $ 0.23 $ 0.24 $ 0.25 $ 0.26
Net realized and unrealized gain (loss) on
investments 0.09 0.33 (0.05) 0.11 (0.06)
--------- ------- ------- -------- -------
Total from investment operations $ 0.32 $ 0.56 $ 0.19 $ 0.36 $ 0.20
--------- ------- ------- -------- -------
Less distributions declared to shareholders -
From net investment income $ (0.23) $(0.23) $(0.24) $(0.25) $(0.25)
In excess of net investment income (0.00)+++ -- -- (0.00)+++ --
In excess of net realized gain on investments -- -- -- -- (0.01)
--------- ------- ------- -------- -------
Total distributions declared to shareholders $ (0.23) $(0.23) $(0.24) $(0.25) $(0.26)
--------- ------- ------- -------- -------
Net asset value - end of period $ 5.90 $ 5.81 $ 5.48 $ 5.53 $ 5.42
--------- ------- ------- -------- -------
Total return 5.54% 10.39% 3.51% 6.77% 3.79%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.56% 1.64% 1.66% 1.67% 1.69%
Net investment income 3.84% 4.08% 4.37% 4.47% 4.79%
Portfolio turnover 26% 49% 78% 69% 57%
Net assets at end of period (000 Omitted) $10,178 $ 4,396 $3,856 $4,353 $3,858
[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 $ 0.21 $ 0.22 $ 0.23 $ 0.24 $ 0.25
Ratios (to average net assets):
Expenses## 1.74% 1.79% 1.81% 1.82% 1.84%
Net investment income 3.66% 3.93% 4.22% 4.32% 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.
</TABLE>
See notes to financial statements.
35
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
Florida 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 $ 10.12
---------
Income from investment operations# -
Net investment income[sec] $ 0.25
Net realized and unrealized gain (loss) on
investments (0.56)
---------
Total from investment operations $ (0.31)
---------
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 $ 9.56
---------
Total return++ (3.10)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.68%+
Net investment income 5.04%+
Portfolio turnover 27%
Net assets at end of period (000 Omitted) $66,542
[sec]The investment adviser voluntarily waived a portion of its fee for
certain 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## 0.85%+
Net investment income 4.87%+
+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 the fiscal years ending
after September 1, 1995, the Fund's expenses are calculated without reduction
to 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 $ 10.10 $ 9.64 $ 9.82 $ 9.60 $ 9.65
------- ------- ------- --------- -------
Income from investment operations# -
Net investment income[sec] $ 0.50 $ 0.50 $ 0.51 $ 0.52 $ 0.54
Net realized and unrealized gain (loss) on
investments 0.02 0.46 (0.18) 0.22 0.02
------- ------- ------- --------- -------
Total from investment operations $ 0.52 $ 0.96 $ 0.33 $ 0.74 $ 0.56
------- ------- ------- --------- -------
Less distributions declared to shareholders -
From net investment income $ (0.50) $ (0.50) $(0.51) $ (0.52) $(0.54)
From net realized gain on investments -- -- -- -- (0.04)
In excess of net investment income -- -- -- (0.00)+++ --
In excess of net realized gain on investments -- -- -- -- (0.03)
-------- -------- ------- --------- -------
Total distributions declared to shareholders $ (0.50) $ (0.50) $(0.51) $ (0.52) $(0.61)
-------- -------- ------- --------- -------
Net asset value - end of period $ 10.12 $ 10.10 $ 9.64 $ 9.82 $ 9.60
-------- -------- ------- --------- -------
Total return++ 5.25% 10.16% 3.43% 7.81% 6.07%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.69% 0.78% 0.86% 0.86% 0.60%
Net investment income 4.96% 5.03% 5.26% 5.26% 5.75%
Portfolio turnover 23% 14% 24% 56% 131%
Net assets at end of period (000 Omitted) $77,628 $77,711 $80,342 $87,553 $89,894
[sec]The investment adviser voluntarily waived a portion of its fee for certain 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 $ 0.49 $ 0.49 -- $ 0.52 $ 0.52
Ratios (to average net assets):
Expenses## 0.81% 0.85% -- 0.90% 0.83%
Net investment income 4.84% 4.96% -- 5.22% 5.52%
+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 the fiscal years ending after September 1,
1995, the Fund's expenses are calculated without reduction to 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.
36
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
Florida 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 $ 10.11
---------
Income from investment operations# -
Net investment income[sec] $ 0.21
Net realized and unrealized gain (loss) on
investments (0.55)
---------
Total from investment operations $ (0.34)
---------
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 $ 9.56
---------
Total return (3.40)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.49%+
Net investment income 4.24%+
Portfolio turnover 27%
Net assets at end of period (000 Omitted) $21,018
[sec]The investment adviser voluntarily waived a portion of its fee for
certain 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 net assets):
Expenses## 1.66%+
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 to
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 $ 10.09 $ 9.64 $ 9.82 $ 9.60 $ 9.64
------- ------- ------- --------- -------
Income from investment operations# -
Net investment income[sec] $ 0.42 $ 0.42 $ 0.43 $ 0.43 $ 0.43
Net realized and unrealized gain (loss) on
investments 0.02 0.45 (0.18) 0.22 0.04
------- ------- ------- --------- -------
Total from investment operations $ 0.44 $ 0.87 $ 0.25 $ 0.65 $ 0.47
------- ------- ------- --------- -------
Less distributions declared to shareholders -
From net investment income $ (0.42) $ (0.42) $(0.43) $ (0.43) $(0.44)
From net realized gain on investments -- -- -- -- (0.04)
In excess of net investment income -- -- -- (0.00)+++ --
In excess of net realized gain on investments -- -- -- -- (0.03)
-------- -------- ------- --------- -------
Total distributions declared to shareholders $ (0.42) $ (0.42) $(0.43) $ (0.43) $(0.51)
-------- -------- ------- --------- -------
Net asset value - end of period $ 10.11 $ 10.09 $ 9.64 $ 9.82 $ 9.60
-------- -------- ------- --------- -------
Total return 4.42% 9.18% 2.56% 6.88% 5.06%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.49% 1.58% 1.72% 1.74% 1.68%
Net investment income 4.16% 4.22% 4.40% 4.36% 4.63%
Portfolio turnover 23% 14% 24% 56% 131%
Net assets at end of period (000 Omitted) $20,813 $16,719 $14,701 $14,448 $12,667
[sec]The investment adviser voluntarily waived a portion of its fee for certain 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 $ 0.41 $ 0.41 -- $ 0.43 $ 0.41
Ratios (to average net assets):
Expenses## 1.61% 1.65% -- 1.78% 1.91%
Net investment income 4.04% 4.15% -- 4.33% 4.40%
+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 to this expense
offset arrangement.
</TABLE>
See notes to financial statements.
37
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
----------------
Georgia 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 $ 10.93
---------
Income from investment operations# -
Net investment income[sec] 0.26
Net realized and unrealized gain (loss) on
investments (0.58)
---------
Total from investment operations $ (0.32)
---------
Less distributions declared to shareholders -
From net investment income $ (0.26)
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 $ (0.26)
---------
Net asset value - end of period $ 10.35
---------
Total return++ (2.97)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.95%+
Net investment income 4.85%+
Portfolio turnover 26% Net assets at end of period (000 Omitted) $51,770
[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 $ 0.25
Ratios (to average net assets):
Expenses## 1.12%+
Net investment income 4.68%+
+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 $ 10.95 $ 10.38 $ 10.47 $ 10.35 $ 10.38
--------- ------- ------- --------- -------
Income from investment operations# -
Net investment income[sec] $ 0.55 $ 0.56 $ 0.56 $ 0.54 $ 0.57
Net realized and unrealized gain (loss) on
investments (0.02) 0.56 (0.10) 0.12 --
--------- ------- ------- --------- -------
Total from investment operations $ 0.53 $ 1.12 $ 0.46 $ 0.66 $ 0.57
--------- ------- ------- --------- -------
Less distributions declared to shareholders -
From net investment income $ (0.55) $ (0.55) $ (0.55) $ (0.54) $ (0.56)
From net realized gain on investments -- -- -- -- (0.01)
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 $ (0.55) $ (0.55) $ (0.55) $ (0.54) $ (0.60)
--------- ------- -------- --------- -------
Net asset value - end of period $ 10.93 $ 10.95 $ 10.38 $ 10.47 $ 10.35
--------- ------- -------- --------- -------
Total return++ 4.09% 11.02% 4.47% 6.48% 5.65%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.97% 1.03% 1.03% 1.17% 1.14%
Net investment income 4.97% 5.14% 5.34% 5.11% 5.50%
Portfolio turnover 35% 18% 27% 65% 56%
Net assets at end of period (000 Omitted) $56,886 $59,546 $59,843 $68,183 $74,432
[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 $ 0.55 $ 0.55 $ 0.53 $ 0.56
Ratios (to average net assets):
Expenses## 1.09% 1.13% 1.10% 1.27% 1.24%
Net investment income 4.85% 5.04% 5.27% 5.01% 5.40%
+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.
38
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
Georgia 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 $ 10.93
---------
Income from investment operations# -
Net investment income[sec] $ 0.22
Net realized and unrealized gain (loss) on
investments (0.58)
---------
Total from investment operations $ (0.36)
---------
Less distributions declared to shareholders -
From net investment income $ (0.22)
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 $ (0.22)
---------
Net asset value - end of period $ 10.35
---------
Total return (3.43)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.70%+
Net investment income 4.10%+
Portfolio turnover 26% Net assets at end of period (000 Omitted) $15,176
[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 $ 0.21
Ratios (to average net assets)
Expenses## 1.87%+
Net investment income 3.93%+
+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 1995
================ =========== =========== ================ ===========
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.95 $ 10.38 $ 10.47 $ 10.36 $ 10.38
--------- ------- ------- -------- -------
Income from investment operations# -
Net investment income[sec] $ 0.47 $ 0.48 $ 0.47 $ 0.45 $ 0.47
Net realized and unrealized gain (loss) on
investments (0.02) 0.56 (0.09) 0.12 0.02
--------- ------- ------- -------- -------
Total from investment operations $ 0.45 $ 1.04 $ 0.38 $ 0.57 $ 0.49
--------- ------- ------- -------- -------
Less distributions declared to shareholders -
From net investment income $ (0.47) $ (0.47) $ (0.47) $ (0.46) $ (0.47)
From net realized gain on investments -- -- -- -- (0.01)
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 $ (0.47) $ (0.47) $ (0.47) $ (0.46) $ (0.51)
--------- -------- -------- -------- -------
Net asset value - end of period $ 10.93 $ 10.95 $ 10.38 $ 10.47 $ 10.36
--------- -------- -------- -------- -------
Total return 4.22% 10.19% 3.63% 5.52% 4.88%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.72% 1.77% 1.83% 2.00% 1.96%
Net investment income 4.22% 4.39% 4.53% 4.27% 4.66%
Portfolio turnover 35% 18% 27% 65% 56%
Net assets at end of period (000 Omitted) $14,591 $10,871 $ 9,995 $10,205 $8,695
[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 $ 0.45 $ 0.47 $ 0.47 -- --
Ratios (to average net assets)
Expenses## 1.84% 1.87% 1.90% -- --
Net investment income 4.10% 4.29% 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.
See notes to financial statements.
</TABLE>
39
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
Maryland 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 $ 11.49
----------
Income from investment operations# -
Net investment income[sec] $ 0.26
Net realized and unrealized gain (loss) on
investments (0.60)
----------
Total from investment operations $ (0.34)
----------
Less distributions declared to shareholders -
From net investment income $ (0.26)
In excess of net investment income --
In excess of net realized gain on investments --
----------
Total distributions declared to shareholders $ (0.26)
----------
Net asset value - end of period $ 10.89
----------
Total return++ (2.98)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.99%+
Net investment income 4.65%+
Portfolio turnover 14% Net assets at end of period (000 Omitted)$121,773
[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 $ 0.25
Ratios (to average net assets):
Expenses## 1.16%+
Net investment income 4.48%+
+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 $ 11.47 $ 10.89 $ 11.04 $ 10.94 $ 10.89
-------- -------- -------- -------- ---------
Income from investment operations# -
Net investment income[sec] $ 0.54 $ 0.54 $ 0.57 $ 0.57 $ 0.59
Net realized and unrealized gain (loss) on
investments 0.02 0.59 (0.16) 0.09 0.09
-------- -------- -------- -------- ---------
Total from investment operations $ 0.56 $ 1.13 $ 0.41 $ 0.66 $ 0.68
-------- -------- -------- -------- ---------
Less distributions declared to shareholders -
From net investment income $ (0.54) $ (0.54) $ (0.56) $ (0.56) $ (0.59)
In excess of net investment income -- (0.01) -- -- (0.00)+++
In excess of net realized gain on investments -- -- -- -- (0.04)
-------- -------- -------- -------- ---------
Total distributions declared to shareholders $ (0.54) $ (0.55) $ (0.56) $ (0.56) $ (0.63)
-------- -------- -------- -------- ---------
Net asset value - end of period $ 11.49 $ 11.47 $ 10.89 $ 11.04 $ 10.94
-------- -------- -------- -------- ---------
Total return++ 4.94% 10.57% 3.75% 6.17% 6.51%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.03% 1.09% 1.12% 1.19% 1.21%
Net investment income 4.67% 4.79% 5.21% 5.10% 5.46%
Portfolio turnover 14% 21% 22% 15% 31%
Net assets at end of period (000 Omitted) $131,261 $126,018 $126,405 $139,297 $145,361
[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 $ 0.53 $ 0.53 $ 0.57 -- --
Ratios (to average net assets):
Expenses## 1.15% 1.19% 1.19% -- --
Net investment income 4.55% 4.69% 5.14% -- --
+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.
++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.
</TABLE>
40
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
Maryland 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 $ 11.48
---------
Income from investment operations# -
Net investment income[sec] $ 0.22
Net realized and unrealized gain (loss) on
investments (0.60)
---------
Total from investment operations $ (0.38)
---------
Less distributions declared to shareholders -
From net investment income $ (0.22)
In excess of net investment income --
In excess of net realized gain on investments --
---------
Total distributions declared to shareholders $ (0.22)
---------
Net asset value - end of period $ 10.88
---------
Total return (3.30)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.64%+
Net investment income 4.00%+
Portfolio turnover 14% Net assets at end of period (000 Omitted)$28,815
[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 $ 0.21
Ratios (to average net assets):
Expenses## 1.81%+
Net investment income 3.83%+
+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 1995
=========== =========== =========== =========== ================
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.47 $ 10.88 $ 11.03 $ 10.93 $ 10.88
------- ------- ------- ------- --------
Income from investment operations# -
Net investment income[sec] $ 0.45 $ 0.47 $ 0.50 $ 0.48 $ 0.51
Net realized and unrealized gain (loss) on
investments 0.02 0.60 (0.17) 0.10 0.09
------- ------- ------- ------- --------
Total from investment operations $ 0.47 $ 1.07 $ 0.33 $ 0.58 $ 0.60
------- ------- ------- ------- --------
Less distributions declared to shareholders -
From net investment income $ (0.46) $ (0.47) $ (0.48) $ (0.48) $ (0.51)
In excess of net investment income -- (0.01) -- -- (0.00)+++
In excess of net realized gain on investments -- -- -- -- (0.04)
------- -------- -------- -------- --------
Total distributions declared to shareholders $ (0.46) $ (0.48) $ (0.48) $ (0.48) $ (0.55)
------- -------- -------- -------- --------
Net asset value - end of period $ 11.48 $ 11.47 $ 10.88 $ 11.03 $ 10.93
------- -------- -------- -------- --------
Total return 4.18% 9.96% 3.03% 5.41% 5.75%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.68% 1.74% 1.82% 1.91% 1.93%
Net investment income 4.01% 4.12% 4.50% 4.36% 4.73%
Portfolio turnover 14% 21% 22% 15% 31%
Net assets at end of period (000 Omitted) $28,902 $21,622 $17,379 $13,694 $11,168
[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 $ 0.45 $ 0.46 $ 0.49 -- --
Ratios (to average net assets):
Expenses## 1.80% 1.84% 1.89% -- --
Net investment income 3.89% 4.02% 4.43% -- --
+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>
41
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
Massachusetts 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 $ 11.35
----------
Income from investment operations# -
Net investment income[sec] $ 0.28
Net realized and unrealized gain (loss) on
investments (0.63)
----------
Total from investment operations $ (0.35)
----------
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 $ 10.72
----------
Total return++ (3.13)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.97%+
Net investment income 5.09%+
Portfolio turnover 16% Net assets at end of period (000 Omitted) $223,540
[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 4.92%+
+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 $ 11.34 $ 10.86 $ 10.98 $ 10.84 $ 10.90
-------- ---------- -------- --------- --------
Income from investment operations# -
Net investment income[sec] $ 0.58 $ 0.58 $ 0.61 $ 0.60 $ 0.64
Net realized and unrealized gain (loss) on
investments (0.01) 0.48 (0.14) 0.14 (0.03)
-------- ---------- -------- --------- --------
Total from investment operations $ 0.57 $ 1.06 $ 0.47 $ 0.74 $ 0.61
-------- ---------- -------- --------- --------
Less distributions declared to shareholders -
From net investment income $ (0.56) $ (0.58) $ (0.59) $ (0.60) $ (0.64)
From net realized gain on investments -- -- -- -- (0.02)
In excess of net investment income -- (0.00)+++ -- (0.00)+++ --
In excess of net realized gain on investments -- -- -- -- (0.01)
-------- ---------- -------- --------- --------
Total distributions declared to shareholders $ (0.56) $ (0.58) $ (0.59) $ (0.60) $ (0.67)
-------- ---------- -------- --------- --------
Net asset value - end of period $ 11.35 $ 11.34 $ 10.86 $ 10.98 $ 10.84
-------- ---------- -------- --------- --------
Total return++ 5.11% 9.99% 4.39% 6.95% 5.89%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.00% 1.06% 1.12% 1.17% 1.17%
Net investment income 5.08% 5.18% 5.55% 5.44% 6.01%
Portfolio turnover 28% 24% 33% 31% 31%
Net assets at end of period (000 Omitted) $239,980 $237,861 $234,874 $249,497 $262,551
[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 $ 0.57 $ 0.57 $ 0.60 -- --
Ratios (to average net assets):
Expenses## 1.12% 1.16% 1.19% -- --
Net investment income 4.96% 5.08% 5.48% -- --
+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.
</TABLE>
42
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
Massachusetts 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 $ 11.35
---------
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 $ (0.24)
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 $ 10.73
---------
Total return (3.44)%++
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.62%+
Net investment income 4.44%+
Portfolio turnover 16% Net assets at end of period (000 Omitted) $26,221
[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 4.27%+
+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 1995
=========== ================ =========== ================ ===========
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.35 $ 10.87 $ 10.99 $ 10.84 $ 10.90
------- --------- ------- -------- -------
Income from investment operations# -
Net investment income[sec] $ 0.50 $ 0.51 $ 0.53 $ 0.52 $ 0.55
Net realized and unrealized gain (loss) on
investments (0.01) 0.48 (0.13) 0.15 (0.02)
------- --------- ------- -------- -------
Total from investment operations $ 0.49 $ 0.99 $ 0.40 $ 0.67 $ 0.53
------- --------- ------- -------- -------
Less distributions declared to shareholders -
From net investment income $ (0.49) $ (0.51) $ (0.52) $ (0.52) $ (0.56)
From net realized gain on investments -- -- -- -- (0.02)
In excess of net investment income -- (0.00)+++ -- (0.00)+++ --
In excess of net realized gain on investments -- -- -- -- (0.01)
-------- --------- -------- -------- -------
Total distributions declared to shareholders $ (0.49) $ (0.51) $ (0.52) $ (0.52) $ (0.59)
-------- --------- -------- -------- -------
Net asset value - end of period $ 11.35 $ 11.35 $ 10.87 $ 10.99 $ 10.84
-------- --------- -------- -------- -------
Total return 4.43% 9.25% 3.66% 6.27% 5.13%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.64% 1.71% 1.81% 1.90% 1.89%
Net investment income 4.43% 4.52% 4.81% 4.71% 5.27%
Portfolio turnover 28% 24% 33% 51% 31%
Net assets at end of period (000 Omitted) $25,616 $18,750 $15,204 $11,316 $8,676
[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 $ 0.49 $ 0.50 $ 0.52 -- --
Ratios (to average net assets):
Expenses## 1.76% 1.81% 1.88% -- --
Net investment income 4.31% 4.42% 4.74% -- --
+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>
Notes to Financial Statements (Unaudited)
(1) Business and Organization
MFS Alabama Municipal Bond Fund (Alabama Fund), MFS Arkansas Municipal Bond Fund
(Arkansas Fund), MFS California Municipal Bond Fund (California Fund), MFS
Florida Municipal Bond Fund (Florida Fund), MFS Georgia Municipal Bond Fund
(Georgia Fund), MFS Maryland Municipal Bond Fund (Maryland Fund), and MFS
Massachusetts Municipal Bond Fund (Massachusetts Fund) are each a nondiversified
series of the 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 at fair value as determined 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 statements as distributions from paid-in
capital. Differences in the recognition or classification of income between the
financial statements and tax earnings
44
<PAGE>
Notes to Financial Statements (Unaudited) - continued
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 its utilization or expiration
on:
<TABLE>
<CAPTION>
Arkansas California Florida Georgia Maryland Massachusetts
Expiration Date Fund Fund Fund Fund Fund Fund
===========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
March 31, 2003 $ -- $4,804,665 $4,864,669 $ -- $ -- $1,413,006
March 31, 2004 6,486,073 403,290 -- 778,520 2,525,623 1,732,935
March 31, 2005 215,971 588,165 1,290,661 -- 1,055,172 405,183
March 31, 2006 -- -- 781,761 -- -- --
March 31, 2007 -- -- -- -- -- 242,062
----------- ---------- ---------- --------- ----------- ----------
Total $6,702,044 $5,796,120 $6,937,091 $778,520 $3,580,795 $3,793,186
----------- ---------- ---------- --------- ----------- ----------
</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
the 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
reflected as a reduction of expenses in the Statement of Operations.
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>
Alabama Arkansas California Florida Georgia Maryland Massachusetts
Fund Fund Fund Fund Fund Fund Fund
============================================================================================
<S> <C> <C> <C> <C> <C> <C>
$93 $2,915 $3,107 $2,917 $2,799 $2,982 $3,024
</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
$12,679, $17,352, $37,349, $13,252, $5,609, $23,073, and $31,295 for the six
months ended September 30, 1999, as its portion of the sales charge on sales of
Class A shares of the Alabama, Arkansas, California, Florida, Georgia, Maryland,
and Massachusetts 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% 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 $3,519, $2,657, $4,827,
$2,594, $9,865, and $37,841 for the Alabama, Arkansas, California, Georgia,
Maryland, and Massachusetts 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 0.25%, 0.10%, 0.10 %, 0.00%, 0.25%, 0.35%,
and 0.35% of each Fund's average daily net assets attributable to Class A shares
on an annualized basis for Alabama, Arkansas, California, Florida, Georgia,
Maryland, and Massachusetts Funds, respectively. Payments of
45
<PAGE>
Notes to Financial Statements (Unaudited) - continued
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 Alabama, Arkansas, California,
Florida, and Georgia Funds. Payment of the 0.25% per annum Class A service fee
by the Florida Fund will commence on such date as the Trustees of the Trust may
determine. In the case of the Arkansas and California Funds, a portion of the
service fee is currently being paid by each Fund; payment of the remaining
portion of the Class A service fee will become payable on such date as the
Trustees of the Trust may determine.
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 $490, $397, $4,298, $1,125, $1,085, and $575 for the Alabama,
Arkansas, California, Georgia, Maryland, and Massachusetts Funds, respectively,
for Class B shares, for the six months ended September 30, 1999. MFS retained no
service fees for accounts not attributable to a securities dealer with respect
to California Fund 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 1.00%, 0.99%, 0.88%, 0.81%, 1.00%, 1.00%, and 1.00% of each
Fund's average daily net assets attributable to Class B shares for Alabama,
Arkansas, California, Florida, Georgia, Maryland, and Massachusetts Funds,
respectively, on an annualized basis. Fees incurred under the distribution plan
during the six months ended September 30, 1999, were 1.00% of the California
Fund's average daily net assets attributable to Class C shares of the California
Fund on an annualized basis. Except in the case of the 0.25% per annum first
year Class B service fee, payment of the Class B service fee by the Florida Fund
will be suspended until such date as the Trustees of the Trust may determine. In
the case of the Arkansas and California Funds, except in the case of the 0.25%
per annum first year Class B service fee is currently 0.10% per annum on Class B
shares held over one year.
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 ended September
30, 1999, for Class A, Class B, and Class C shares, were as follows.
<TABLE>
<CAPTION>
Alabama Arkansas California Florida Georgia Maryland Massachusetts
CDSC imposed Fund Fund Fund Fund Fund Fund Fund
============================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Class A $ -- $ -- $ 2,127 $ 4,897 $ -- $ 855 $ 9,382
Class B 18,917 17,593 78,210 51,930 20,174 27,493 40,440
Class C -- -- 2,516 -- -- -- --
</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>
Alabama Arkansas California Florida Georgia Maryland Massachusetts
Fund Fund Fund Fund Fund Fund Fund
=========================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Purchases $25,084 $11,332 $78,970 $24,935 $18,182 $21,707 $39,152
Sales 22,501 14,514 74,423 27,667 17,398 24,314 41,742
</TABLE>
The cost and unrealized appreciation and depreciation in value of the
investments owned by each Fund, as computed on a federal income tax basis, are
as follows (000's Omitted):
<TABLE>
<CAPTION>
Alabama Arkansas California Florida Georgia Maryland Massachusetts
Fund Fund Fund Fund Fund Fund Fund
==========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Aggregate cost $ 84,186 $121,556 $276,273 $ 85,414 $ 64,911 $144,840 $243,123
-------- -------- -------- -------- -------- -------- --------
Gross unrealized appreciation $ 3,031 $ 5,565 $ 14,001 $ 3,504 $ 2,734 $ 5,974 $ 11,435
Gross unrealized depreciation (2,088) (1,450) (6,545) (1,698) (1,793) (2,139) (5,186)
-------- -------- -------- -------- -------- -------- --------
Net unrealized appreciation $ 943 $ 4,115 $ 7,456 $ 1,806 $ 941 $ 3,835 $ 6,249
-------- -------- -------- -------- -------- -------- --------
</TABLE>
46
<PAGE>
Notes to Financial Statements (Unaudited) - continued
(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>
Alabama Fund
Class A Shares ==========================
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount
=================================================== ============ =============
<S> <C> <C>
Shares sold 569 $ 6,065
Shares issued to shareholders in reinvestment
of distributions 82 851
Shares reacquired (324) (3,398)
---- --------
Net increase (decrease) 327 $ 3,518
---- --------
Year Ended March 31, 1999 (000 Omitted) Shares Amount
===========================================================================
Shares sold 350 $ 3,786
Shares issued to shareholders in reinvestment
of distributions 147 1,585
Shares reacquired (626) (6,769)
----- --------
Net increase (decrease) (129) $ (1,398)
----- --------
<CAPTION>
Arkansas Fund California Fund
Class A Shares ========================== =========================
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount Shares Amount
=================================================== ============ ============= ============ ============
<S> <C> <C> <C> <C>
Shares sold 400 $ 3,941 2,173 $ 12,536
Shares issued to shareholders in reinvestment
of distributions 139 1,369 435 2,477
Shares reacquired (714) (7,077) (3,222) (18,383)
---- --------- ------ ---------
Net increase (decrease) (175) $ (1,767) (614) $ (3,370)
---- --------- ------ ---------
Year Ended March 31, 1999 (000 Omitted) Shares Amount Shares Amount
=================================================== ====== ========= ====== =========
Shares sold 645 $ 6,578 9,249 $ 54,429
Shares issued to shareholders in reinvestment
of distributions 287 2,920 805 4,733
Shares reacquired (1,805) (18,400) (9,889) (58,042)
------ --------- ------ ---------
Net increase (decrease) (873) $ (8,902) 165 $ 1,120
------ --------- ------ ---------
</TABLE>
<TABLE>
<CAPTION>
Florida Fund
========================
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount
============================================================================
<S> <C> <C>
Shares sold 387 $ 3,813
Shares issued to shareholders in reinvestment
of distributions 76 741
Shares reacquired (1,177) (11,426)
------ ---------
Net decrease (714) $ (6,872)
------ ---------
Year Ended March 31, 1999 (000 Omitted) Shares Amount
============================================================================
Shares sold 1,787 $ 18,187
Shares issued to shareholders in reinvestment
of distributions 144 1,465
Shares reacquired (1,954) (19,860)
------ ---------
Net increase (decrease) (23) $ (208)
------ ---------
<CAPTION>
Georgia Fund Maryland Fund
========================== =======================
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount Shares Amount
======================================================================================================
<S> <C> <C> <C> <C>
Shares sold 102 $ 1,089 384 $ 4,295
Shares issued to shareholders in reinvestment
of distributions 65 691 138 1,537
Shares reacquired (369) (3,916) (767) (8,546)
---- -------- ---- ---------
Net decrease (202) $ (2,136) (245) $ (2,714)
---- -------- ---- ---------
Year Ended March 31, 1999 (000 Omitted) Shares Amount Shares Amount
======================================================================================================
Shares sold 446 $ 4,905 1,116 $ 12,890
Shares issued to shareholders in reinvestment
of distributions 140 1,543 276 3,173
Shares reacquired (821) (9,029) (950) (10,972)
----- -------- ----- ---------
Net increase (decrease) (235) $ (2,581) 442 $ 5,091
----- -------- ----- ---------
</TABLE>
<TABLE>
<CAPTION>
Massachusetts Fund
==========================
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount
=================================================== ============= ==========
<S> <C> <C>
Shares sold 944 $ 10,420
Shares issued to shareholders in reinvestment
of distributions 243 2,676
Shares reacquired (1,481) (16,332)
------ ---------
Net decrease (294) $ (3,236)
------ ---------
Year Ended March 31, 1999 (000 Omitted) Shares Amount
=================================================== ======= =========
Shares sold 3,151 $ 35,768
Shares issued to shareholders in reinvestment
of distributions 478 5,440
Shares reacquired (3,449) (39,192)
------- ---------
Net increase 180 $ 2,016
------- ---------
</TABLE>
47
<PAGE>
Notes to Financial Statements (Unaudited) - continued
<TABLE>
<CAPTION>
Alabama Fund
Class B Shares =========================
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount
=============================================================================
<S> <C> <C>
Shares sold 177 $ 1,872
Shares issued to shareholders in reinvestment
of distributions 12 127
Shares reacquired (92) (957)
--- -------
Net increase 97 $ 1,042
--- -------
Year Ended March 31, 1999 (000 Omitted) Shares Amount
============================================================================
Shares sold 359 $ 3,885
Shares issued to shareholders in reinvestment
of distributions 20 214
Shares reacquired (62) (672)
------ -------
Net increase 317 $ 3,427
------ -------
<CAPTION>
Arkansas Fund California Fund
Class B Shares =========================== =======================
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount Shares Amount
=======================================================================================================
<S> <C> <C> <C> <C>
Shares sold 78 $ 765 1,767 $ 10,154
Shares issued to shareholders in reinvestment
of distributions 11 112 105 600
Shares reacquired (112) (1,106) (1,085) (6,152)
---- --------- ------ --------
Net increase (23) $ (229) 787 $ 4,602
---- --------- ------ --------
Year Ended March 31, 1999 (000 Omitted) Shares Amount Shares Amount
=======================================================================================================
Shares sold 401 $ 4,093 4,033 $ 23,717
Shares issued to shareholders in reinvestment
of distributions 18 179 160 941
Shares reacquired (97) (991) (1,312) (7,691)
------ --------- ------- --------
Net increase 322 $ 3,281 2,881 $ 16,967
------ --------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
Florida Fund
=========================
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount
=============================================================================
<S> <C> <C>
Shares sold 364 $ 3,602
Shares issued to shareholders in reinvestment
of distributions 16 155
Shares reacquired (239) (2,341)
---- ---------
Net increase 141 $ 1,416
---- ---------
Year Ended March 31, 1999 (000 Omitted) Shares Amount
=============================================================================
Shares sold 693 $ 7,051
Shares issued to shareholders in reinvestment
of distributions 24 246
Shares reacquired (316) (3,207)
------ ---------
Net increase 401 $ 4,090
------ ---------
<CAPTION>
Georgia Fund Maryland Fund
========================= ========================
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount Shares Amount
========================================================================================================
<S> <C> <C> <C> <C>
Shares sold 240 $ 2,536 286 $ 3,187
Shares issued to shareholders in reinvestment
of distributions 12 125 32 359
Shares reacquired (120) (1,268) (188) (2,088)
---- --------- ---- ---------
Net increase 132 $ 1,393 130 $ 1,458
---- --------- ---- ---------
Year Ended March 31, 1999 (000 Omitted) Shares Amount Shares Amount
========================================================================================================
Shares sold 491 $ 5,396 818 $ 9,437
Shares issued to shareholders in reinvestment
of distributions 20 223 50 574
Shares reacquired (169) (1,859) (236) (2,715)
------ --------- ------ ---------
Net increase 342 $ 3,760 632 $ 7,296
------ --------- ------ ---------
</TABLE>
<TABLE>
<CAPTION>
Massachusetts Fund
====================
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount
==========================================================================
<S> <C> <C>
Shares sold 363 $ 3,998
Shares issued to shareholders in reinvestment
of distributions 30 334
Shares reacquired (204) (2,248)
---- --------
Net increase 189 $ 2,084
---- --------
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31, 1999 (000 Omitted) Shares Amount
==========================================================================
<S> <C> <C>
Shares sold 845 $ 9,619
Shares issued to shareholders in reinvestment
of distributions 47 536
Shares reacquired (288) (3,276)
---- --------
Net increase 604 $ 6,879
---- --------
</TABLE>
<TABLE>
<CAPTION>
California Fund
Class C Shares ==========================
Six Months Ended September 30, 1999 (000 Omitted) Shares Amount
================================================================================
<S> <C> <C>
Shares sold 477 $ 2,718
Shares issued to shareholders in reinvestment
of distributions 18 105
Shares reacquired (308) (1,750)
---- --------
Net increase 187 $ 1,073
---- --------
Year Ended March 31, 1999 (000 Omitted) Shares Amount
================================================================================
Shares sold 1,346 $ 7,950
Shares issued to shareholders in reinvestment
of distributions 23 135
Shares reacquired (401) (2,358)
------ --------
Net increase 968 $ 5,727
------ --------
</TABLE>
48
<PAGE>
Notes to Financial Statements (Unaudited) - continued
(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 $51 to
$1,013.
(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
Appreciation
Fund Description Expiration Contracts Position (Depreciation)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alabama Fund U.S. Treasury Bonds December 1999 6 Short $ (969)
Municipal Bond Index December 1999 6 Long (1,281)
--------
$ (2,250)
--------
Arkansas Fund U.S. Treasury Bonds December 1999 9 Short $ (1,280)
Municipal Bond Index December 1999 9 Long (2,063)
--------
$ (3,343)
--------
California Fund U.S. Treasury Bonds December 1999 21 Short $ (2,875)
Municipal Bond Index December 1999 21 Long (4,906)
--------
$ (7,781)
--------
Florida Fund U.S. Treasury Bonds December 1999 7 Short $ (5,688)
Municipal Bond Index December 1999 7 Long 3,719
--------
$ (1,969)
--------
Georgia Fund U.S. Treasury Bonds December 1999 5 Short $ (438)
Municipal Bond Index December 1999 5 Long (1,250)
--------
$ (1,688)
--------
Maryland Fund U.S. Treasury Bonds December 1999 12 Short $ (1,594)
Municipal Bond Index December 1999 12 Long (2,844)
--------
$ (4,438)
--------
Massachusetts Fund U.S. Treasury Bonds December 1999 19 Short $ (3,094)
Municipal Bond Index December 1999 19 Long (4,156)
--------
$ (7,250)
--------
</TABLE>
At September 30, 1999, each Fund had sufficient cash and/or securities to cover
margin requirements on open futures contracts.
49
<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 Alabama, California, Florida, Georgia, Maryland, and Massachusetts Funds
owned the following restricted securities (constituting 6.2%, 5.2%, 2.9%, 6.0%,
3.0%, and 2.6% 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 values
of these securities are determined by valuations furnished by dealers or by a
pricing service, or if not available, are valued at fair value in good faith by
the Trustees.
<TABLE>
<CAPTION>
Fund Description
- -------------------- --------------------------------------------------------------------
<S> <C>
Alabama Fund Guam Power Authority Rev., RITES, AMBAC, 6.673s, 2013
Guam Power Authority Rev., RITES, AMBAC, 6.673s, 2018
Puerto Rico Public Finance Corp., AMBAC, 5.375s, 2013
Puerto Rico Public Finance Corp., AMBAC, 7.021s, 2016
California Fund State of California, FGIC, 5.772s, 2015 Los Angeles,
CA, FGIC, 6.772s, 2014 University of California Rev., MBIA,
6.521s, 2016
Florida Fund State of Florida, Dept. of Transportation, 5.946s, 2017
Georgia Fund Atlanta, GA, Water & Wastewater Rev., FGIC, 6.94s, 2016
Maryland Fund Guam Power Authority Rev., AMBAC, 6.673s, 2015
Puerto Rico Electric Power Authority, Power Rev., FSA, 7.25s, 2015
Puerto Rico Public Finance Corp., AMBAC, 7.021s, 2016
Massachusetts Fund Dudley-Charlton, MA, FGIC, 6.545s, 2015
Dudley-Charlton, MA, FGIC, 6.545s, 2016 Dudley-Charlton,
MA, FGIC, 6.545s, 2018 Puerto Rico Public Finance Corp.,
AMBAC, 7.021s, 2016
<CAPTION>
Date of Share/Par
Fund Acquisition Amount Cost Value
- -------------------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Alabama Fund 5/20/99 580,000 $ 536,360 $ 485,110
5/20/99 4,500,000 4,376,790 3,802,860
10/1/99 500,000 509,110 509,110
3/31/99 500,000 569,030 497,040
-----------
$ 5,294,120
California Fund 3/10/99 5,000,000 $4,922,400 $ 4,129,700
7/20/99 5,405,000 5,672,548 5,302,737
5/21/99 5,705,000 5,783,273 5,210,947
-----------
$14,643,384
Florida Fund 4/9/99 3,000,000 $3,042,840 $ 2,520,660
Georgia Fund 4/20/99 4,000,000 $4,668,400 $ 4,021,600
Maryland Fund 5/20/99 1,680,000 $1,760,909 $ 1,580,242
9/16/99 1,400,000 1,367,100 1,357,944
3/31/99 1,520,000 1,729,851 1,511,002
-----------
$ 4,449,188
Massachusetts Fund 5/9/99 1,365,000 $1,498,398 $ 1,309,881
5/9/99 1,430,000 1,555,633 1,348,719
5/9/99 1,565,000 1,685,536 1,445,371
5/23/96 2,500,000 2,485,200 2,485,200
-----------
$ 6,589,171
</TABLE>
50
<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 Original
Research(R) 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.
51
<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.
52
<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
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 consultant 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
53
<PAGE>
MFS(R) Municipal -----------------
Series Trust Bulk Rate
U.S. Postage
Paid
MFS(R) Alabama Municipal Bond Fund MFS
MFS(R) Arkansas Municipal Bond Fund -----------------
MFS(R) California Municipal Bond Fund
MFS(R) Florida Municipal Bond Fund
MFS(R) Georgia Municipal Bond Fund
MFS(R) Maryland Municipal Bond Fund
MFS(R) Massachusetts 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 02116-3741
