[COVER]
[LOGO MFS
INVESTMENT MANAGEMENT
We invented the mutual fund]
MFS[RegTM] Municipal
Series Trust
Semiannual Report o September 30, 2000
For the States of: Mississippi,
New York, North Carolina,
Pennsylvania, South Carolina,
Tennessee, Virginia, and West Virginia
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Letter from the Chairman .............. 1
Management Review and Outlook ......... 3
Performance Summary ................... 5
Portfolio of Investments .............. 8
Financial Statements .................. 24
Notes to Financial Statements ......... 50
Trustees and Officers ................. 57
</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 LOGO]
* ORIGINAL RESEARCH * MAKES A DIFFERENCE
-------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
-------------------------------------------------
<PAGE>
Letter from the Chairman
Dear Shareholders,
If you've been reading our fund reports for any
[PHOTO OF length of time, you've probably sensed the
JEFFREY L. SHAMES] pride we have in our research process. More
than anything else, we think MFS Original
Research[RegTM] -- and the performance results
it has yielded for shareholders -- makes us
unique among investment management
companies. We think that uniqueness stems from three factors: philosophy,
process, and people.
Philosophy
In over 75 years of managing mutual funds, we've developed a number of beliefs
about the best ways to invest over a variety of market conditions. First, we
believe in bottom-up research, which means we use a company-by-company,
one-security-at-a-time approach to building a portfolio. What we look for is
the truth about the fundamentals of a company's business -- things such as the
ability of management to execute its business plan, the ability of that plan to
be scaled up as the company grows, actual demand for the company's products and
services, cash flow, profits, and earnings.
Second, we believe that, over the long term, stock prices follow earnings. In
our view, stock prices are basically a multiple of projected earnings, with the
multiple increasing as the market perceives that a company has something
customers want and will continue to want. One of the major elements of Original
ResearchSM is doing our best to project a company's future earnings and
determine how much the market will pay for those earnings.
Third, we believe there are at least three ways to potentially achieve
competitive long-term performance: be early, uncover second chances, and avoid
mistakes. All of these are based on bottom-up research. In both domestic and
international markets, early discovery has historically been a hallmark of our
investment style. Some of the stocks with which MFS has been most successful
are those in which we've taken large positions before the market discovered or
believed in them. Similarly, some of our best fixed-income investments have
been early positions in companies or governments that our research revealed
were potential candidates for credit upgrades. (A credit upgrade causes the
value of a bond to rise because it indicates the market has increased
confidence that principal and interest on the bond will be repaid.)
"Second-chance" opportunities are companies whose stock prices have stumbled
but that we believe still have the potential to be market leaders. For example,
a quarterly earnings shortfall of a few cents may cause the market to
temporarily lose confidence in a company. If we believe the business remains
fundamentally strong, we may use the price decline as a buying opportunity.
Avoiding mistakes is another way we feel Original Research may help
performance. In fixed-income investing this means, among other things, trying
to be better than our peers at avoiding bond issuers that may default. In
equity investing, avoiding mistakes means we strive to know a company and its
industry well enough to distinguish truth from hype.
Process
We acquire our information firsthand, by researching thousands of companies to
determine which firms may make good investments. Our analysis of an individual
company may include
o face-to-face contact with senior management as well as frontline workers
o analysis of the company's financial statements and balance sheets
o contact with the company's current and potential customers
o contact with the company's competitors
o our own forecasts of the company's future market share, cash flow, and
earnings
Our analysts and portfolio managers disseminate this information in the form of
daily notes e-mailed worldwide to all members of our investment team. This
ensures that our best ideas are shared throughout the company, without barriers
between equity and fixed-income, international and domestic, or value and
growth investment areas. We believe this allows each of our portfolio managers
-- and thus each of our investors -- to potentially benefit from any relevant
item of Original Research.
John Ballen, our President and Chief Investment Officer, has often said that
the thought he hopes managers will have when they read the daily notes is, "I
could never perform as well at any other investment company, because nowhere
else could the quality of the research be this good."
People
Our team of research analysts and portfolio managers traces its roots back to
1932, when we created one of the first in-house research departments in the
industry. Today, we believe we have an investment team distinguished for its
unique blend of talent, continuity, and cohesiveness.
MFS' team culture and commitment to quality research have proven to be of
tremendous value in attracting some of the best and brightest talent from
leading business schools and from other investment management companies. Our
company culture
1
<PAGE>
Letter from the Chairman - continued
was a key factor in our recognition by Fortune magazine in its January 10,
2000, issue as one of the "100 Best Companies to Work For" in America. As
befits a great team, our people have tended to stick around -- the average MFS
tenure of our portfolio managers is 11 years, with over 16 years in the
investment industry. Contributing to this continuity is our policy that all
equity portfolio managers are promoted from within, after distinguishing
themselves first as research analysts. And because many of us who are now
managing funds or managing the company itself have been working together for
well over a decade, we have a cohesiveness, a shared philosophy of investing,
and a unity of purpose that we believe bodes well for the future of the
company.
We also have scale. Our research analyst team is over 55 members strong and
growing. Each analyst is our in-house expert on a specific industry or group of
industries in a specific region of the globe. In pursuing their research, our
analysts and portfolio managers each year will visit more than 2,000 companies
throughout the world, meet with representatives from more than 3,000 companies
at one of our four worldwide offices, attend roughly 5,000 company
presentations sponsored by major Wall Street firms, and consult with over 1,000
analysts from hundreds of U.S. and foreign brokerage houses.
All of this culminates in our analysts making buy and sell recommendations on a
wide range of potential investments for all of our portfolios. In the end, the
goal of Original Research is to try to give our portfolio managers an advantage
over their peers -- to enable our managers to deliver competitive performance
by finding opportunities before they are generally recognized by the market,
and by avoiding mistakes whenever possible. Original Research does, we believe,
make a difference.
As always, we appreciate your confidence in MFS and welcome any questions or
comments you may have.
Respectfully,
/S/ JEFFREY SHAMES
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management[RegTM]
October 16, 2000
A prospectus containing more complete information on any MFS product, including
all charges and expenses, can be obtained from your investment professional.
Please read it carefully before you invest or send money. Investments in mutual
funds will fluctuate and may be worth more or less upon redemption.
The opinions expressed in this letter are those of Jeffrey L. Shames, and no
forecasts can be guaranteed.
2
<PAGE>
Management Review and Outlook
Dear Shareholders,
The period just ended was favorable for bond investors as interest rates fell
in the six months ended September 30, 2000. We believe this was due to a shift
in market sentiment away from concern over strong growth, inflation, and rising
interest rates and toward a more positive perception. Investors now seem to
feel that economic activity is moderating without drifting toward recession,
inflation is not about to rise dramatically, and the Federal Reserve Board (the
Fed) is done with rate tightening. In fact, there is a feeling among many
investors that the Fed may even be headed toward some easing of rates next
year. This more optimistic sentiment helped the bond market, and was a factor
in the positive performance for all funds in the Municipal Series Trust.
Another factor in our performance was positioning on the yield curve. The yield
curve for municipal bonds shows the relationship between yield (interest rate)
and time remaining to maturity. In general, bonds with more time remaining to
maturity have tended to be more volatile but pay higher interest rates. A key
element of our strategy is to determine the area of the yield curve that we
believe offers investors an optimum combination of higher yield and lower
potential volatility.
Our quantitative research has indicated that the "sweet spot" on the yield
curve is in the 15- to 20-year bracket, and that longer-maturity bonds offer
only slightly more yield with significantly more volatility or risk. We have
therefore positioned the majority of our holdings in the 15- to 20-year area of
the curve. We do not, however, tend to position the funds in anticipation of
interest rate moves, because we believe interest rate forecasting to be a
relatively risky strategy that is not in our shareholders' best interest over
the long term.
When buying a bond, there are two main questions we ask. First, do our analysts
believe the bond presents a good credit risk? Second, are we being properly
paid to take on that risk? A lower-rated bond should offer a higher yield to
compensate for taking on greater risk. Over the past 2 to 3 years, however, we
found that the difference in yield between higher-quality and lower-quality
bonds (the spread) had been compressing; by mid-1999, the spread had become
extremely narrow on a historical basis. In our view, we were not being paid
enough additional yield to take on the extra risk of lower-rated issues. In
addition, we felt there was a danger that spreads could widen, which would lead
to underperformance of lower-rated bonds. Both of these factors led us to
reduce our weightings in lower-quality issues.
Now, a year later, spreads have widened to their greatest level in several
years, and appear to have stabilized in the past few months. Our analysts are
beginning to find lower-quality, higher-yielding issues for which we feel we
are being adequately paid to take on more credit risk. Looking forward, we hope
to find opportunities to buy bonds rated "BBB" and below offering yields that
we think could properly reward our shareholders.
We believe we are entering a positive environment for our style of bond
investing--an environment of relatively stable interest rates with enough
growth to sustain credit quality, but not so much growth that we get
inflationary fears, other than perhaps those resulting from the current oil
price situation. We feel that this kind of environment highlights the value we
add through our Original ResearchSM process, which we believe is extremely
adept at finding opportunities, evaluating credit risk, and avoiding defaults.
Respectfully,
/S/ MICHAEL L. DAWSON /S/ GEOFFREY L. SCHECHTER
Michael L. Dawson Geoffrey L. Schechter
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. It is not possible to
invest directly in an index. The portfolio is actively managed, and current
holdings may be different.
3
<PAGE>
Management Review and Outlook - continued
--------------------------------------------------------------------------------
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 also
manages other national municipal bond portfolios. He joined MFS in 1998 and
was named Assistant Vice President and portfolio manager in 1999. Prior to
joining MFS, Michael 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.
Geoffrey L. Schechter, CFA, CPA, is Vice President of MFS Investment
Management[RegTM] and a portfolio manager of our municipal bond funds. He
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. Geoff is a graduate of the University of Texas and has an M.B.A.
degree from Boston University. He is a Chartered Financial Analyst (CFA) and
a Certified Public Accountant (CPA).
All portfolio managers at MFS Investment Management[RegTM] are supported by
an investment staff of over 100 professionals utilizing MFS Original
Research[RegTM], a global, issuer-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 MFS
product is available from your investment professional, or by calling MFS at
1-800-225-2606. Please read it carefully before investing or sending money.
4
<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>
<S> <C> <C> <C> <C>
Commencement of investment operations: Class inception:
Mississippi August 6, 1992 Mississippi Class A August 6, 1992
New York June 6, 1988 Class B September 7, 1993
North Carolina October 31, 1984 New York Class A June 6, 1988
Pennsylvania February 1, 1993 Class B September 7, 1993
South Carolina October 31, 1984 North Carolina Class A October 31, 1984
Tennessee August 12, 1988 Class B September 7, 1993
Virginia October 31, 1984 Class C January 3, 1994
West Virginia October 31, 1984 Pennsylvania Class A February 1, 1993
Class B September 7, 1993
Net assets as of September 30, 2000: South Carolina Class A October 31, 1984
Mississippi $ 73.6 million Class B September 7, 1993
New York $121.1 million Tennessee Class A August 12, 1988
North Carolina $364.3 million Class B September 7, 1993
Pennsylvania $ 46.2 million Virginia Class A October 31, 1984
South Carolina $146.6 million Class B September 7, 1993
Tennessee $119.0 million Class C January 3, 1994
Virginia $334.3 million West Virginia Class A October 31, 1984
West Virginia $129.9 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 the reinvestment of dividends.
Total Rates of Return through September 30, 2000
MFS[RegTM] Mississippi Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results Class B Investment Results
------------------------------------------------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years Life* 6 Months 1 Year 3 Years 5 Years Life*
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +4.03% +5.36% +13.56% +31.75% +54.76% +3.62% +4.53% +10.91% +26.53% +45.93%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.36% +4.33% +5.67% +5.50% -- +4.53% +3.51% +4.82% +4.75%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.36% +2.65% +4.65% +4.88% -- +0.53% +2.60% +4.49% +4.75%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*For the period from the commencement of the fund's investment operations,
August 6, 1992, through September 30, 2000.
MFS[RegTM] New York Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results Class B Investment Results
------------------------------------------------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years 6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.44% +5.53% +11.75% +29.13% +98.34% +3.16% +4.74% +9.38% +24.32% +87.72%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.53% +3.77% +5.25% +7.09% -- +4.74% +3.03% +4.45% +6.50%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.52% +2.10% +4.23% +6.57% -- +0.74% +2.12% +4.11% +6.50%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
Performance Summary - continued
MFS[RegTM] North Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results Class B Investment Results
------------------------------------------------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years 6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.62% +5.16% +10.59% +27.11% +79.65% +3.19% +4.39% +8.38% +22.86% +71.03%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.16% +3.41% +4.92% +6.03% -- +4.39% +2.72% +4.20% +5.51%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.16% +1.75% +3.90% +5.52% -- +0.40% +1.81% +3.87% +5.51%
------------------------------------------------------------------------------------------------------------------------------------
</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 +3.19% +4.39% +8.37% +23.08% +71.61%
--------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +4.39% +2.72% +4.24% +5.55%
--------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +3.39% +2.72% +4.24% +5.55%
--------------------------------------------------------------------------------
</TABLE>
MFS[RegTM] Pennsylvania Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results Class B Investment Results
------------------------------------------------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years Life* 6 Months 1 Year 3 Years 5 Years Life*
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.78% +6.12% +14.00% +31.50% +50.73% +3.47% +5.26% +11.30% +26.46% +42.44%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +6.12% +4.47% +5.63% +5.50% -- +5.26% +3.63% +4.81% +4.73%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +1.08% +2.78% +4.61% +4.83% -- +1.26% +2.71% +4.47% +4.73%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*For the period from the commencement of the fund's investment operations,
February 1, 1993, through September 30, 2000.
MFS[RegTM] South Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results Class B Investment Results
------------------------------------------------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years 6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.61% +4.87% +9.72% 25.05% +82.10% +3.19% +4.11% +7.61% +20.96% +73.37%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +4.87% +3.14% +4.57% +6.18% -- +4.11% +2.48% +3.88% +5.66%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -0.11% +1.48% +3.56% +5.66% -- +0.13% +1.56% +3.54% +5.66%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
MFS[RegTM] Tennessee Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results Class B Investment Results
------------------------------------------------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years 6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.52% +5.07% +10.74% +26.90% +84.54% +3.19% +4.39% +8.62% +22.65% +75.65%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.07% +3.46% +4.88% +6.32% -- +4.39% +2.79% +4.17% +5.80%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.08% +1.79% +3.86% +5.80% -- +0.42% +1.89% +3.83% +5.80%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
Performance Summary - continued
MFS[RegTM] Virginia Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results Class B Investment Results
------------------------------------------------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years 6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.47% +5.23% +10.84% +25.75% +79.14% +3.04% +4.46% +8.62% +21.54% +70.56%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.23% +3.49% +4.69% +6.00% -- +4.46% +2.80% +3.98% +5.48%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.23% +1.82% +3.67% +5.49% -- +0.47% +1.88% +3.64% +5.48%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Class C Investment Results
-------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
-------------------------------------------------
Cumulative Total Return
Excluding Sales Charge +3.13% +4.46% +8.71% +21.85% +71.21%
--------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +4.46% +2.82% +4.03% +5.52%
--------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +3.46% +2.82% +4.03% +5.52%
--------------------------------------------------------------------------------
MFS[RegTM] West Virginia Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results Class B Investment Results
------------------------------------------------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years 6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.76% +5.03% +10.02% +25.54% +83.65% +3.52% +4.36% +8.00% +21.44% +74.99%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.03% +3.23% +4.65% +6.27% -- +4.36% +2.60% +3.96% +5.76%
------------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.04% +1.57% +3.64% +5.75% -- +0.37% +1.69% +3.63% +5.76%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes to Performance Summary
Class A Share Performance Including Sales Charge takes into account the
deduction of the maximum 4.75% sales charge. 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%. 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 includes the performance of the funds' 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 in
effect during the period shown; without these, the results would have been less
favorable. 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. More recent
returns may be more or less than those shown. Past performance is no guarantee
of future results.
A small portion of income may be subject to state, federal, and/or alternative
minimum tax. Capital gains, if any, are subject to capital gains tax. See the
prospectus for details.
7
<PAGE>
Portfolio of Investments (Unaudited) - September 30, 2000
MFS MISSISSIPPI MUNICIPAL BOND FUND
Municipal Bonds - 97.5%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
-----------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 13.3%
Commonwealth of Puerto Rico, MBIA,
7.084s, 2008 ++++ $ 2,000 $ 2,123,320
Hinds County, MS, MBIA, 6.25s, 2010 1,660 1,814,662
Hinds County, MS, MBIA, 6.25s, 2011 1,285 1,405,880
Jackson, MS, Public School District, AMBAC,
5.75s, 2017 1,000 1,020,080
Madison County, MS, School District, MBIA,
5.875s, 2016 1,500 1,576,740
Puerto Rico Municipal Finance Agency, RITES,
FSA, 7.42s, 2017 [dag]++++ 750 776,835
State of Mississippi, 6s, 2018 1,000 1,035,490
-----------
$ 9,753,007
-----------------------------------------------------------------------------------------
State and Local Appropriation - 7.6%
Mississippi Development Bank (Natchez
Mississippi Convention Center), AMBAC, 6s, 2021 $ 750 $ 778,823
Puerto Rico Public Finance Corp., RITES,
7.17s, 2013 [dag]++++ 500 552,370
Southhaven, MS, Mississippi Development Bank,
Special Obligation (Recreation Facilities),
6.2s, 2020 400 411,344
State of Mississippi, Certificates of Participation
(Rehabilitation Services), 6.1s, 2014 2,000 2,029,760
Walnut, MS, Correctional Authority, AMBAC,
6s, 2019 1,750 1,807,837
-----------
$ 5,580,134
-----------------------------------------------------------------------------------------
Refunded and Special Obligations - 10.0%
Hinds Community College, MS, Conference and
Training Center, 6.5s, 2014 $ 1,320 $ 1,404,836
Mississippi Home Corp., 0s, 2013 4,920 2,433,088
Mississippi Hospital Equipment & Facilities
Authority Rev. (Magnolia Regional Health
Center), 7.375s, 2001 1,500 1,570,815
State of Mississippi, 6.75s, 2004 1,800 1,942,704
-----------
$ 7,351,443
-----------------------------------------------------------------------------------------
Airport and Port Revenue - 1.0%
Puerto Rico Ports Authority (American Airlines),
6.25s, 2026 $ 750 $ 755,310
-----------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 6.0%
Guam Power Authority Rev., RITES, AMBAC,
6.236s, 2013 [dag]+++ $ 1,000 $ 1,043,630
Puerto Rico Electric Power Authority, FSA,
7.589s, 2023 ++++ 1,000 1,079,080
Warren County, MS, Pollution Control Rev.
(Mississippi Power & Light), 7s, 2022 1,000 1,039,430
Washington County, MS, Pollution Control Rev.
(Mississippi Power & Light), 7s, 2022 1,230 1,278,499
-----------
$ 4,440,639
-----------------------------------------------------------------------------------------
Health Care Revenue - 1.9%
Corinth Alcorn County, MS, Hospital Rev.
(Magnolia Regional Health Center), 5.5s, 2021 $ 670 $ 541,608
Jones County, MS, Hospital Rev. (South Central
Regional Medical Center), 5.5s, 2017 1,000 845,370
-----------
$ 1,386,978
-----------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 8.9%
Jones County, MS, Solid Waste Disposal Rev.
(International Paper Co.), 5.8s, 2021 $ 1,000 $ 927,860
Lowndes County, MS, Solid Waste Disposal &
Pollution Control Rev. (Weyerhauser), 6.8s, 2022 3,250 3,516,370
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
-----------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Revenue (Corporate Guarantee) - continued
Mississippi Business Finance Corp. (Jackson
Municipal Airport/Airborne Freight), 7.15s, 2007 $ 985 $ 1,049,616
Warren County, MS, Pollution Control Rev.
(International Paper), 6.6s, 2019 1,000 1,019,370
-----------
$ 6,513,216
-----------------------------------------------------------------------------------------
Insured Health Care Revenue - 19.0%
Alcorn County, MS, Corinth Hospital Rev.
(Magnolia Regional Health Center), AMBAC,
5.75s, 2013 $ 2,000 $ 2,051,860
Gulfport, MS, Hospital Facilities (Memorial
Hospital), MBIA, 6.125s, 2015 2,250 2,327,692
Gulfport, MS, Hospital Facilities (Memorial
Hospital), MBIA, 6.2s, 2018 1,000 1,030,730
Hinds County, MS, Rev. (Methodist Hospital &
Rehabilitation Center), AMBAC, 5.6s, 2012 2,335 2,420,671
Medical Center Educational Building Corp., MS,
(University of Mississippi Medical Center),
AMBAC, 5.5s, 2023 1,000 970,620
Mississippi Development Bank, Special Obligation
(Adams County Hospital), FSA, 5.75s, 2016 1,000 1,013,610
Mississippi Hospital Equipment & Facilities
Authority Rev. (Baptist), MBIA, 6.5s, 2010 1,190 1,279,631
Mississippi Hospital Equipment & Facilities
Authority Rev. (Baptist), MBIA, 6s, 2013 750 780,810
Mississippi Hospital Equipment & Facilities
Authority Rev. (Rush Medical Foundation),
Connie Lee, 6.7s, 2018, 2,000 2,077,620
-----------
$13,953,244
-----------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 5.5%
Gulfport, MS, Community Development (Oakview
Apartments), FNMA, 7.4s, 2025 $ 1,755 $ 1,831,588
Jackson, MS, Elderly Housing Corp., Mortgage
Rev. (Delhaven Manor), "C", FHA, 7.375s, 2024 1,920 1,975,642
Ridgeland, MS, Urban Renewal, Multifamily
Housing Rev. (Northbrook I & III Apartments),
6.15s, 2019 ### 300 275,481
-----------
$ 4,082,711
-----------------------------------------------------------------------------------------
Single Family Housing Revenue - 9.5%
Mississippi Home Corp., GNMA, 6.5s, 2024 $ 2,650 $ 2,707,770
Mississippi Home Corp., GNMA, 6.625s, 2027 1,350 1,388,975
Mississippi Home Corp., GNMA, 7.55s, 2027 1,215 1,310,778
Mississippi Home Corp., GNMA\FNMA, 6.3s, 2031 500 510,990
Mississippi Home Corp., 5.75s, 2031 1,000 1,075,070
-----------
$ 6,993,583
-----------------------------------------------------------------------------------------
Turnpike Revenue - 1.3%
Puerto Rico Highway & Transportation Authority,
FSA, 5s, 2016 $ 1,000 $ 975,250
-----------------------------------------------------------------------------------------
Universities - 3.2%
Southhaven, MS, Mississippi Development Bank
Special Obligation (Recreation Facilities),
5.875s, 2014 $ 375 $ 386,422
University of Mississippi, Educational Building
Corp. (Athletic Facilities), 6.2s, 2016 ### 1,000 1,032,470
University of Mississippi Educational Building
Corp. (Performing Arts Center), AMBAC,
5.25s, 2018 1,000 963,890
-----------
$ 2,382,782
-----------------------------------------------------------------------------------------
</TABLE>
8 - MMS
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
--------------------------------------------------------------------------------------
<S> <C> <C>
Water and Sewer Utility Revenue - 7.7%
Gautier, MS, Utility District, Utility Systems Rev.,
FGIC, 6.375s, 2019 $ 1,300 $ 1,336,049
Gulfport, MS, Water & Sewer Rev., FSA,
5.625s, 2024 500 488,120
Jackson, MS, Water & Sewer Systems Rev.,
5.25s, 2017 1,170 1,134,034
Meridian, MS, Water & Sewer Rev., AMBAC,
6s, 2010 1,500 1,579,095
Meridian, MS, Water & Sewer Rev., AMBAC,
6.2s, 2012 650 685,237
Meridian, MS, Water & Sewer Rev., AMBAC,
6.2s, 2013 400 420,408
-----------
$5,642,943
--------------------------------------------------------------------------------------
Other - 2.6%
Mississippi Development Bank (Diamond Lakes
Utilities), 6.25s, 2017 $ 1,250 $ 1,199,725
Mississippi Development Bank Special Obligation
(Tupelo Fairgrounds), AMBAC, 5s, 2017 785 733,245
-----------
$ 1,932,970
--------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $70,020,482) $71,744,210
--------------------------------------------------------------------------------------
Floating Rate Demand Note - 0.3%
--------------------------------------------------------------------------------------
Perry County, MS, Pollution Control Rev., due
10/02/00, at Identified Cost $ 200 $ 200,000
--------------------------------------------------------------------------------------
Total Investments (Identified Cost, $70,220,482) $71,944,210
Other Assets, Less Liabilities - 2.2% 1,618,939
--------------------------------------------------------------------------------------
Net assets - 100.0% $73,563,149
--------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
MFS NEW YORK MUNICIPAL BOND FUND
Municipal Bonds - 97.9%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
--------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 7.7%
New York, NY, 5.375s, 2017 $1,250 $ 1,219,275
New York, NY, 6s, 2019 1,000 1,034,220
North Babylon, NY, Union Free School District,
FGIC, 5.5s, 2018 2,415 2,393,144
Port Byron, NY, Central School District, AMBAC,
7.4s, 2012 500 604,135
Port Byron, NY, Central School District, AMBAC,
7.4s, 2013 500 606,895
Port Byron, NY, Central School District, AMBAC,
7.4s, 2014 500 608,350
Port Byron, NY, Central School District, AMBAC,
7.4s, 2015 500 610,800
Rome, NY, City School District, FSA, 5.5s, 2019 1,000 982,610
Washingtonville, NY, Central School District, FGIC,
7.35s, 2008 550 636,708
Washingtonville, NY, Central School District, FGIC,
7.35s, 2009 550 643,324
------------
$ 9,339,461
--------------------------------------------------------------------------------------
State and Local Appropriation - 18.3%
Metropolitan Transportation Authority, NY,
Dedicated Tax Fund, FGIC, 5.25s, 2014 $1,500 $ 1,490,955
Metropolitan Transportation Authority, NY, Service
Contract, , 7.375s, 2008 2,000 2,222,500
Metropolitan Transportation Authority, NY, Service
Contract, 5.5s, 2017 750 739,305
Metropolitan Transportation Authority, NY, Service
Contract, AMBAC, 5.75s, 2013 825 875,284
New York Dormitory Authority Rev. (City University),
5.625s, 2016 1,450 1,477,724
New York Dormitory Authority Rev. (City University),
AMBAC, 5.75s, 2018 800 829,696
New York Dormitory Authority Rev. (City University),
FSA, 5.75s, 2013 3,000 3,182,850
New York Dormitory Authority Rev. (State University),
5s, 2013 1,000 965,990
New York Dormitory Authority Rev. (State University),
5.875s, 2017 1,130 1,180,567
New York Dormitory Authority Rev. (State University),
5.375s, 2018 1,500 1,454,010
New York Local Government Assist Corp., MBIA,
5s, 2021 1,750 1,583,540
New York Medical Care Facilities Financing
Agency Rev., 6.375s, 2014 15 15,453
New York Medical Care Facilities Financing
Agency Rev., MBIA, 6s, 2025 20 20,418
New York Urban Development Corp. Rev.
(Correctional Facilities), AMBAC, 0s, 2009 5,000 3,300,600
New York Urban Development Corp. Rev. (State
Facilities), AMBAC, 5.6s, 2015 2,750 2,846,195
------------
$ 22,185,087
--------------------------------------------------------------------------------------
Refunded and Special Obligations - 17.6%
Islip, NY, Community Development Agency Rev.
(New York Institute of Technology), 7.5s, 2006 $1,990 $ 2,287,306
New York City, NY, 8s, 2001 490 511,590
New York City, NY, 8.25s, 2001 2,000 2,112,820
New York City, NY, 7.2s, 2004 1,000 1,102,010
New York City, NY, 7.3s, 2004 880 974,503
New York City, NY, 7.3s, 2004 5,000 5,527,550
New York City, NY, 7.375s, 2004 1,600 1,776,032
New York City, NY, Municipal Water & Sewer
Finance Authority, 7s, 2001 745 766,098
</TABLE>
9 - MNY
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Refunded and Special Obligations - continued
New York Energy Research & Development
Authority, Electric Facilities Rev., 7.15s, 2002 $ 1,975 $ 2,092,039
New York Medical Care Facilities Financing
Agency Rev. (Mental Health Services),
6.375s, 2004 965 1,043,628
New York Medical Care Facilities Financing
Agency Rev. (Montefiore Medical), AMBAC,
6.5s, 2005 2,550 2,789,725
Puerto Rico Aqueduct & Sewer Authority Rev.,
FSA, 9s, 2005 250 287,963
-----------
$21,271,264
-------------------------------------------------------------------------------------
Airport and Port Revenue - 1.7%
New York City, NY, Industrial Development
Agency, Special Facilities Rev. (American
Airlines), 6.9s, 2024 $ 1,000 $ 1,028,710
Port Authority NY & NJ, Special Obligation,
(JFK International), MBIA, 6.25s, 2015 990 1,081,486
-----------
$ 2,110,196
-------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 4.3%
Guam Power Authority Rev., AMBAC, 5.25s, 2013 $ 2,120 $ 2,163,651
Guam Power Authority Rev., RITES, AMBAC,
6.236s, 2014 [dag]++++ 500 513,115
New York Energy Research & Development
Authority, Electric Facilities Rev., 7.15s, 2022 725 751,528
Port Authority NY & NJ, Special Obligation,
6.75s, 2019 1,750 1,791,142
-----------
$ 5,219,436
-------------------------------------------------------------------------------------
Health Care Revenue - 5.3%
Albany, NY, Industrial Development Authority,
Civic Facilities Rev., 8.25s, 2004 $ 1,140 $ 1,175,693
Chautauqua County, NY, Industrial Development
Agency, Civic Facility Rev. (Woman's Christian
Assn.), 6.35s, 2017 200 183,274
Chautauqua County, NY, Industrial Development
Agency, Civic Facility Rev. (Woman's Christian
Assn.), 6.4s, 2029 ### 500 414,195
Dutchess, NY, Industrial Development Agency,
Civic Facilities Rev., 8.625s, 2016 1,035 1,073,295
Fulton County, NY, Industrial Development Agency,
Civic Facilities Rev. (Nathan Littauer Hospital
Assn.), 5.75s, 2009 750 672,825
New York City, NY, Health & Hospital Corp. Rev.,
5.25s, 2017 750 690,870
New York City, NY, Industrial Development
Agency, Civic Facilities Rev. (A Very Special
Place, Inc.), 5.75s, 2029 1,000 884,530
New York Medical Care Facilities Finance Agency
Rev., Mental Health Services (Huntington
Mortgage), 6.5s, 2014 1,250 1,286,113
-----------
$ 6,380,795
-------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 3.9%
Allegany County, NY, Industrial Development
Agency, Solid Waste Rev. (Atlantic Richfield),
6.625s, 2016 $ 1,000 $ 1,041,040
Essex County, NY, Industrial Development Agency
(International Paper Co.), 5.55s, 2014 750 728,182
Essex County, NY, Industrial Development Agency
(International Paper Co.), 6.15s, 2021 1,000 978,110
Monroe County, NY, Industrial Development
Agency (Weyerhauser Co.), 9s, 2006 1,000 1,003,600
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Revenue (Corporate Guarantee) - continued
Onondaga County, NY, Industrial Development
Agency (Bristol-Meyers Squibb), 5.75s, 2024 $ 1,000 $ 993,620
-----------
$ 4,744,552
--------------------------------------------------------------------------------------
Insured Health Care Revenue - 2.7%
Nassau County, NY (Nassau Health Care Corp.),
FSA, 6s, 2014 $ 1,000 $ 1,060,850
New York Dormitory Authority Rev. (St. Vincent's
Hospital), FHA, 7.375s, 2011 2,105 2,185,116
-----------
$ 3,245,966
--------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 0.3%
New York City, NY, Housing Development Corp.,
5.6s, 2019 $ 400 $ 393,540
--------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 2.3%
New York City, NY, Transitional Finance Authority
Rev., 5.75s, 2018 $ 2,730 $ 2,783,890
--------------------------------------------------------------------------------------
Single Family Housing Revenue - 2.9%
New York Mortgage Agency Rev., 5.85s, 2018 $ 2,000 $ 1,999,980
New York Mortgage Agency Rev., 5.8s, 2020 1,555 1,538,672
-----------
$ 3,538,652
--------------------------------------------------------------------------------------
Turnpike Revenue - 16.4%
Metropolitan Transportation Authority, NY, FGIC,
5.875s, 2018 $ 1,980 $ 2,040,707
New York Thruway Authority Rev., Highway &
Bridges, AMBAC, 5.375s, 2018 2,000 1,952,080
New York Thruway Authority Rev., Highway &
Bridges, FGIC, 5.4s, 2017 2,000 1,971,720
New York Thruway Authority Rev., Highway &
Bridges, MBIA, 5.75s, 2015 1,000 1,038,690
New York Thruway Authority Rev., Highway &
Bridges, MBIA, 5.375s, 2016 2,000 1,979,860
New York Thruway Authority Rev., Highway &
Bridges, MBIA, 5s, 2018 2,400 2,219,184
Niagara Falls, NY, Bridge Commission Toll Rev.,
RITES, FGIC, 6.172s, 2015 [dag]++++ 3,500 3,509,310
Triborough Bridge & Tunnel Authority, NY, RITES,
6.643s, 2017 [dag]++++ 5,000 5,154,100
-----------
$19,865,651
--------------------------------------------------------------------------------------
Universities - 6.5%
Cattaraugus County, NY, Industrial Development
Agency (Jamestown Community College),
6.4s, 2019 $ 500 $ 505,905
Hempstead Town, NY, Civic Facilities Rev.
(Hofstra University), MBIA, 5.8s, 2015 1,500 1,549,920
New York Dormitory Authority Rev. (Pace
University), AMBAC, 5.5s, 2020 1,500 1,474,920
New York Dormitory Authority Rev. (Pace
University), MBIA, 6s, 2019 1,690 1,764,563
New York Dormitory Authority Rev. (State
University), FSA, 6s, 2018 1,000 1,046,490
Tompkins County, NY, Industrial Development
Agency (Cornell University), 5.625s, 2020 1,000 1,003,050
Utica, NY, Industrial Development Agency
(Utica College), 5.3s, 2008 465 461,447
-----------
$ 7,806,295
--------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 8.0%
New York City, NY, Municipal Water & Sewer
Finance Authority, 6s, 2010 $ 620 $ 672,812
</TABLE>
10 - MNY
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
-----------------------------------------------------------------------------------
<S> <C> <C>
Water and Sewer Utility Revenue - continued
New York City, NY, Municipal Water & Sewer
Finance Authority, 7.1s, 2012 $ 675 $ 692,455
New York Environmental Facilities Corp., Pollution
Control Rev., 5.75s, 2010 2,235 2,386,176
New York Environmental Facilities Corp., Pollution
Control Rev., 6.875s, 2010 220 227,359
New York Environmental Facilities Corp., Pollution
Control Rev., 5.75s, 2012 1,080 1,150,632
New York Environmental Facilities Corp., Water
Facilities Rev., 8.85s, 2015 2,500 2,658,675
Suffolk County, NY, Water Authority, MBIA,
5.1s, 2012 1,895 1,907,431
------------
$ 9,695,540
-----------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $113,606,980) $118,580,325
-----------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.1%
-----------------------------------------------------------------------------------
New York City, NY, due 10/02/00 $1,200 $ 1,200,000
Sevier County, TN, Public Building Authority,
due 10/05/00 100 100,000
-----------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 1,300,000
-----------------------------------------------------------------------------------
Total Investments (Identified Cost, $114,906,980) $119,880,325
Other Assets, Less Liabilities - 1.0% 1,234,982
-----------------------------------------------------------------------------------
Net assets - 100.0% $121,115,307
-----------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
MFS NORTH CAROLINA MUNICIPAL BOND FUND
Municipal Bonds - 98.4%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
-----------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 7.0%
Charlotte NC, 5.5s, 2016 $3,100 $ 3,144,764
Cumberland County, NC, 5.8s, 2019 4,400 4,552,900
Durham, NC, 5.9s, 2014 2,400 2,505,264
Hertford County, NC, 9.5s, 2001 100 100,980
Hertford County, NC, 9.5s, 2002 100 100,980
Johnston County, NC, FGIC, 5.6s, 2018 2,000 2,039,900
New Hanover County, NC, Public Improvement,
5.75s, 2017 1,000 1,032,900
New Hanover County, NC, Public Improvement,
5.8s, 2019 4,200 4,341,918
North Carolina Str, Series A, 4.75s, 2015 5,000 4,669,950
Randolph County, NC, FSA, 5.6s, 2018 3,000 3,024,960
-----------
$25,514,516
-----------------------------------------------------------------------------------
State and Local Appropriation - 11.5%
Brunswick County NC Certificates Participation,
FSA, 5.5s, 2020 $1,000 $ 990,370
Carteret County North Carolina Certificates Partin,
AMBAC, 5.625s, 2020 1,010 1,015,090
Charlotte, NC, Certificates of Participation
(Convention Facilities), AMBAC, 0s, 2004 3,435 2,815,807
Charlotte, NC, Certificates of Participation
(Convention Facilities), AMBAC, 0s, 2005 4,810 3,746,750
Charlotte, NC, Certificates of Participation
(Convention Facilities), AMBAC, 0s, 2006 1,075 795,575
Charlotte, NC, Certificates of Participation
(Convention Facilities), AMBAC, 0s, 2008 3,000 1,996,590
Charlotte NC Certificates Participation,
(Convention Facilities), 5.5s, 2020 3,000 2,967,180
Cumberland County, NC, Certificates of
Participation (Civic Center), AMBAC, 0s, 2011 425 237,583
Cumberland County, NC, Certificates of
Participation (Civic Center), AMBAC, 0s, 2013 1,000 487,210
Dare County, NC, MBIA, 6.6s, 2006 2,100 2,168,040
Durham, NC, Certificates of Participation
(New Durham Corp.), 6.875s, 2009 1,750 1,804,040
Franklin County, NC, Certificates of Participation
(Jail and School), FGIC, 6.625s, 2014 2,000 2,173,600
Greensboro, NC, Certificates of Participation
(Coliseum Arena), 6.25s, 2011 2,180 2,268,116
Harnett County NC Certificates Participation, FSA,
5.5s, 2016 1,225 1,228,442
Harnett County, NC, Certificates of Participation,
AMBAC, 6.2s, 2006 1,000 1,068,120
Harnett County, NC, Certificates of Participation,
AMBAC, 6.2s, 2009 1,500 1,592,760
Iredell County North Carolina Public Facilities,
School Projs, AMBAC, 5.5s, 2019 1,000 987,180
Pitt County NC Certificates Participation, School
Facilities Project Series A, FSA, 5.5s, 2020 1,250 1,251,400
Puerto Rico Housing, Bank and Finance Agency,
7.5s, 2006 7,000 7,751,380
Puerto Rico Public Finance Corp., RITES, AMBAC,
7.17s, 2016 [dag]++++ 1,500 1,592,730
Sampson Area Development Corp., NC,
Installment Payment Rev., MBIA, 4.75s, 2019 1,000 884,090
Scotland County, NC, Certificates of Participation
(Jail and Courthouse), CAP GTY, 6.75s, 2011 1,000 1,027,220
Union County, NC, Certificates of Participation,
AMBAC, 6.375s, 2012 1,000 1,055,070
-----------
$41,904,343
-----------------------------------------------------------------------------------
</TABLE>
11 - MNC
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
---------------------------------------------------------------------------------------
<S> <C> <C>
Refunded and Special Obligations - 11.2%
North Carolina Eastern Municipal Power Agency,
7.5s, 2009 $2,595 $ 3,099,909
North Carolina Eastern Municipal Power Agency,
5s, 2017 5,120 4,856,371
North Carolina Medical Care Commission,
Hospital Rev. (Carolina Medicorp), 6s, 2001 8,500 8,580,835
North Carolina Medical Care Commission,
Hospital Rev. (Halifax Memorial), 6.75s, 2002 4,500 4,764,105
North Carolina Medical Care Commission,
Hospital Rev. (Halifax Memorial), 6.75s, 2014 1,355 1,433,265
North Carolina Medical Care Commission,
Hospital Rev. (Valdese General Hospital),
8.75s, 2001 4,975 5,275,540
Pender County, NC, Certificates of Participation
(Pender County Prison), 7.6s, 2001 1,205 1,253,465
Pender County, NC, Certificates of Participation
(Pender County Prison), 7.7s, 2001 1,000 1,040,860
University of North Carolina (Chapel Hill), 0s, 2002 9,105 4,455,441
University of North Carolina (Chapel Hill), 0s, 2002 4,285 1,954,560
Winston-Salem, NC, Water and Sewer Systems
Rev., 6.25s, 2002 4,000 4,186,640
-----------
$40,900,991
---------------------------------------------------------------------------------------
Airport and Port Revenue - 2.3%
Charlotte, NC, Airport Rev., MBIA, 5.875s, 2019 $1,000 $ 1,014,970
Charlotte, NC, Airport Rev., MBIA, 5.875s, 2020 3,775 3,822,414
Puerto Rico Ports Authority (American Airlines),
6.25s, 2026 3,575 3,600,311
-----------
$ 8,437,695
---------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 14.4%
New Hanover County, NC, Industrial Facilities Rev.
(Carolina Power and Light Co.), 6.9s, 2009 $1,000 $ 1,019,720
North Carolina Eastern Municipal Power,
Pennsylvania 693, RITES, AMBAC,
7.613s, 2018 [dag]++++ 6,500 7,224,360
North Carolina Eastern Municipal Power Agency,
AMBAC, 6s, 2018 1,245 1,312,093
North Carolina Eastern Municipal Power Agency,
MBIA, 7s, 2007 5,000 5,543,500
North Carolina Eastern Municipal Power Agency,
MBIA, 7.25s, 2007 5,000 5,610,250
North Carolina Eastern Municipal Power Agency,
MBIA, 7.5s, 2010 3,005 3,527,119
North Carolina Municipal Power Agency, No. 1,
Catawba Electric Rev., MBIA, 6s, 2011 5,000 5,352,950
North Carolina Municipal Power Agency, No. 1,
Catawba Electric Rev., MBIA, 6.22s, 2012 ++++ 9,000 9,082,800
North Carolina Municipal Power Agency, No. 1,
Catawba Electric Rev., 6.375s, 2013 1,000 1,030,110
North Carolina Municipal Power Agency, No. 1,
Catawba Electric Rev., MBIA, 5.5s, 2014 3,000 3,072,690
North Carolina Municipal Power Agency, No. 1,
Catawba Electric Rev., FSA, 6.2s, 2018 4,300 4,403,415
Puerto Rico Electric Power Authority, FSA,
6s, 2016 5,000 5,222,450
-----------
$52,401,457
---------------------------------------------------------------------------------------
Health Care Revenue - 11.6%
Charlotte-Mecklenberg Hospital Authority, "A",
5.75s, 2021 $1,500 $ 1,466,220
Mocksville, NC (Housing Foundation, Inc.),
7.25s, 2029 1,000 933,830
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
---------------------------------------------------------------------------------------
<S> <C> <C>
Health Care Revenue - continued
North Carolina Medical Care Commission,
Hospital Rev. (Duke University), 5.25s, 2021 $5,975 $ 5,499,330
North Carolina Medical Care Commission,
Hospital Rev. (Gaston Health Care), 5.5s, 2015 5,790 5,612,826
North Carolina Medical Care Commission,
Hospital Rev. (Gaston Health Care), 5.5s, 2019 7,500 7,074,675
North Carolina Medical Care Commission,
Hospital Rev. (Pitt County Memorial Hospital),
5s, 2018 3,000 2,717,370
Northern Hospital District, Surry County, NC,
Health Care Facilities Rev., 7.875s, 2021 4,530 4,658,562
Pitt County, NC, Hospital Rev. (Memorial Hospital),
5.25s, 2021 10,135 9,685,006
University of North Carolina, Chapel Hill,
University Hospital Rev., 5.25s, 2019 4,800 4,455,888
-----------
$42,103,707
---------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 10.0%
Columbus County, NC, Industrial Facilities &
Pollution Control (International Paper), 5.8s, 2016 $4,000 $ 3,863,400
Columbus County, NC, Industrial Facilities &
Pollution Control (International Paper),
6.15s, 2021 5,000 4,907,450
Haywood County, NC, Industrial Facilities &
Pollution Control Finance Authority (Champion
International), 5.75s, 2025 8,900 7,866,799
Martin County, NC, Industrial Facilities & Pollution
Control Finance Authority (Weyerhaeuser Co.),
7.25s, 2014 7,000 7,319,900
Martin County, NC, Industrial Facilities & Pollution
Control Finance Authority (Weyerhaeuser Co.),
6.8s, 2024 7,500 7,640,625
Mecklenburg County, NC, Industrial Facilities &
Pollution Control Finance Authority (Precision
Steel), 7.75s, 2014 2,600 2,639,468
Surry County, NC, Industrial Facilities & Pollution
Control Finance Authority (Weyerhaeuser Co.),
9.25s, 2002 900 941,616
Wake County, NC, Industrial Facilities & Pollution
Control Finance Authority (Mallinkcodt),
6.75s, 2012 1,100 1,118,403
-----------
$36,297,661
---------------------------------------------------------------------------------------
Insured Health Care Revenue - 6.6%
Catawba County, NC, Hospital Rev. (Catawba
Memorial Hospital), AMBAC, 5s, 2017 $1,200 $ 1,111,248
Cumberland County, NC, Hospital Facilities Rev.
(Cumberland County Hospital), MBIA, 0s, 2009 1,800 1,141,236
New Hanover County, NC, Hospital Rev.
(New Hanover Regional Medical Center), MBIA,
5s, 2019 6,225 5,699,797
North Carolina Medical Care Commission,
AMBAC, 5s, 2017 5,000 4,642,450
North Carolina Medical Care Commission,
Hospital Rev. (Wilson Memorial Hospital),
AMBAC, 0s, 2013 1,000 488,180
North Carolina Medical Care Commission,
Hospital Rev. (Wilson Memorial Hospital),
AMBAC, 0s, 2015 1,140 491,477
North Carolina Medical Care Commission,
Hospital Rev. (Alamance Regional Medical
Center, Inc.), FSA, 5s, 2016 3,180 3,002,524
</TABLE>
12 - MNC
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
---------------------------------------------------------------------------------------
<S> <C> <C>
Insured Health Care Revenue - continued
North Carolina Medical Care Commission,
Hospital Rev. (Mission-St. Joseph Health
System), MBIA, 5.1s, 2018 $1,500 $ 1,405,800
North Carolina Medical Care Commission,
Hospital Rev. (Northeast Medical Center),
AMBAC, 4.75s, 2013 1,330 1,246,010
North Carolina Medical Care Commission
(Catholic Health East), AMBAC, 5s, 2018 2,000 1,840,940
North Carolina Medical Commission, Health Care
Facilities Rev. (Novant Health), MBIA, 5s, 2018 1,975 1,819,311
Northern Hospital District Surry County, NC,
Health Care Facilities Rev., ASST GTY, 5.5s, 2019 1,250 1,180,862
------------
$ 24,069,835
---------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 4.7%
Asheville, NC, Housing Authority (Asheville
Terrace Apartments), 7.1s, 2011 ### $5,000 $ 5,217,350
North Carolina Housing Finance Agency,
FHA, 6.9s, 2024 4,880 5,093,500
North Carolina Housing Finance Agency,
FHA, 6.05s, 2028 5,000 5,046,050
Salisbury, NC, Housing Corp. (Yadkin Senior
Citizens), FNMA, 6.75s, 2022 1,935 1,953,653
------------
$ 17,310,553
---------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 0.7%
Territory of Virgin Islands, Public Finance
Authority, 5.5s, 2022 $1,600 $ 1,460,080
Virgin Islands Public Finance Authority, Refunding
Senior Lien A Asset Guaranty Ibcc, ASST GTY,
5.5s, 2018 1,000 988,610
------------
$ 2,448,690
---------------------------------------------------------------------------------------
Single Family Housing Revenue - 3.7%
North Carolina Housing Finance Agency,
6.7s, 2018 $1,550 $ 1,607,350
North Carolina Housing Finance Agency,
5.55s, 2019 4,000 3,901,120
North Carolina Housing Finance Agency,
6.15s, 2020 1,000 1,018,140
North Carolina Housing Finance Agency,
5.85s, 2028 4,060 3,961,626
North Carolina Housing Finance Agency,
7.6s, 2032 1,105 1,122,050
North Carolina Housing Finance Agency,
FHA, 6.15s, 2017 1,955 2,001,197
------------
$ 13,611,483
---------------------------------------------------------------------------------------
Solid Waste Revenue - 0.4%
Iredell, NC, Solid Waste Systems Rev., 6.25s, 2012 $1,250 $ 1,308,325
---------------------------------------------------------------------------------------
Turnpike Revenue - 2.6%
Puerto Rico Highway & Transportation Authority
Rev., RITES, 6.525s, 2007++++ $2,750 $ 2,886,867
Puerto Rico Highway & Transportation Authority
Rev., RITES, FSA, 8.42s, 2018 [dag]++++ 5,425 6,444,032
------------
$ 9,330,899
---------------------------------------------------------------------------------------
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
---------------------------------------------------------------------------------------
<S> <C> <C>
Universities - 6.1%
Appalachian Str University North Carolina
Revenue, Parking Systems, FSA, 5.6s, 2020 $2,285 $ 2,293,683
North Carolina Education Facilities Finance
Agency (Duke University), 6.75s, 2021 11,500 11,926,075
University of North Carolina, Student Facilities
Systems, AMBAC, 5.125s, 2018 2,000 1,909,580
University of North Carolina, University Rev.,
0s, 2013 3,000 1,488,480
University of North Carolina, University Rev.,
0s, 2015 4,415 1,935,757
University of North Carolina, University Rev.,
0s, 2016 3,500 1,433,775
University of North Carolina (Chapel Hill),
5.4s, 2017 1,140 1,133,559
------------
$ 22,120,909
---------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 5.6%
Charlotte NC Water + Sewer Systems Revenue,
5.75s, 2018 $3,075 $ 3,139,760
Charlotte North Carolina Storm Water Fee,
6s, 2020 3,180 3,381,167
Charlotte, NC, Water & Sewer Systems Rev.,
5.75s, 2016 2,000 2,061,680
Charlotte, NC, Water & Sewer, 5s, 2020 3,350 3,098,549
Charlotte, NC, Water & Sewer Systems
Rev., 5.25s, 2021 4,000 3,793,880
Raleigh, NC, Combined Enterprise Systems
Rev., 4.75s, 2016 3,520 3,197,286
Raleigh, NC, Combined Enterprise Systems
Rev., 5.125s, 2022 2,000 1,863,240
------------
$ 20,535,562
---------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $350,265,489) $358,296,626
---------------------------------------------------------------------------------------
Floating Rate Demand Note - 0.2%
---------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority,
due 10/2/00, at Identified Cost $ 700 $ 700,000
---------------------------------------------------------------------------------------
Total Investments (Identified Cost, $350,965,489) $358,996,626
Other Assets, Less Liabilities - 1.4% 5,259,036
---------------------------------------------------------------------------------------
Net assets - 100.0% $364,255,662
---------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
13 - MNC
<PAGE>
Portfolio of Investments (Unaudited) - continued
MFS PENNSYLVANIA MUNICIPAL BOND FUND
Municipal Bonds - 93.5%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
---------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 12.8%
Butler, PA, School District, FGIC, 5.375s, 2018 $ 500 $ 490,050
Chester County, PA, 5.65s, 2011 500 509,600
Downingtown, PA, School District, AMBAC,
5.65s, 2019 500 501,875
Greene County, PA, 6s, 2010 100 101,929
Northeastern York County, PA, School District,
FGIC, 0s, 2012 415 225,448
Oley Valley, PA, School District, AMBAC, 0s, 2011 810 464,365
Philadelphia, PA, FGIC, 5.125s, 2015 1,000 970,160
Philadelphia, PA, School District, MBIA, 6s, 2016 500 523,505
Philadelphia, PA, School District, AMBAC,
5.375s, 2019 500 486,515
Southeastern Area, PA, Special Schools
Authority Rev., 0s, 2007 360 251,327
State of Pennsylvania, 6.25s, 2010 300 331,164
State of Pennsylvania, 6s, 2019 1,000 1,042,830
----------
$5,898,768
---------------------------------------------------------------------------------------
State and Local Appropriation - 3.7%
Delaware Valley, PA, Regional Finance Authority,
AMBAC, 6.204s, 2018 ++++ $ 500 $ 501,480
Pennsylvania Finance Authority Rev.
(Pennsylvania Hills Project), FGIC, 5.45s, 2019 500 490,590
Philadelphia, PA, Municipal Authority Rev.
(Justice Lease), 8.625s, 2016 150 156,375
Puerto Rico Public Finance Corp., RITES, AMBAC,
7.17s, 2013 [dag]++++ 500 552,370
----------
$1,700,815
---------------------------------------------------------------------------------------
Refunded and Special Obligations - 9.8%
Allegheny County, PA, Sanitation Authority,
FGIC, 0s, 2014 $ 835 $ 387,306
Beaver County, PA, "A", MBIA, 5.75s, 2006 250 263,970
Harrisburg, PA, 5.875s, 2003 1,000 1,052,090
Philadelphia, PA, 6.375s, 2003 240 255,137
Philadelphia, PA, Gas Works Rev., 6s, 2013 1,645 1,781,239
Philadelphia, PA, Hospital & Higher Educational
Facilities Authority, FHA, 7.25s, 2001 500 521,760
Puerto Rico Highway & Transportation Authority,
6.5s, 2002 250 263,158
----------
$4,524,660
---------------------------------------------------------------------------------------
Airport and Port Revenue - 6.6%
Allegheny County, PA, Airport Rev. (Pittsburgh
International Airport), MBIA, 5.75s, 2014 $1,000 $1,033,380
Allegheny County, PA, Airport Rev. (Pittsburgh
International Airport), FGIC, 6.125s, 2017 500 519,575
Philadelphia, PA, Industrial Development Authority
(Philadelphia Airport Systems), FGIC, 5s, 2016 500 461,445
Philadelphia, PA, Parking Authority Rev., FSA,
5.625s, 2015 1,000 1,017,890
----------
$3,032,290
---------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 11.0%
Guam Power Authority Rev., RITES, AMBAC,
6.236s, 2014 [dag]++++ $2,170 $2,226,941
Luzerne County, PA, Industrial Development
Authority, AMBAC, 7.2s, 2017 500 532,520
Luzerne County, PA, Industrial Development
Authority, 6.05s, 2019 300 299,349
Philadelphia, PA, Gas Works Rev., , 6.375s, 2014 510 517,726
Philadelphia, PA, Gas Works Rev., FSA, 5.5s, 2016 1,000 1,002,400
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
---------------------------------------------------------------------------------------
<S> <C> <C>
Electric and Gas Utility Revenue - continued
Virgin Islands Water & Power Authority Rev.,
ASST GTY, 5.3s, 2018 $ 500 $ 487,540
----------
$5,066,476
---------------------------------------------------------------------------------------
Health Care Revenue - 5.2%
Butler County, PA, Industrial Development
Authority (Sherwood Oaks), 5.75s, 2011 $ 400 $ 391,480
Chester County, PA, Health & Education
(Main Line), 5.5s, 2015 ### 335 321,453
Cumberland County, PA, Municipal Refunding
(Carlisle Hospital), 6.8s, 2023 500 448,465
Philadelphia, PA, Health & Educational Facilities
(Jeanes Health), 6.6s, 2010 500 491,990
Philadelphia, PA, Health & Educational Facilities
(Temple University), 6.625s, 2023 250 227,302
Scranton Lackawanna, PA, Health & Welfare
(Allied Health), 7.125s, 2005 500 506,840
----------
$2,387,530
---------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 3.6%
Erie County, PA, Industrial Development Authority
(International Paper Co.), 5.3s, 2012 $ 500 $ 475,650
Erie County, PA, Industrial Development Authority
(International Paper Co.), 7.625s, 2018 250 267,688
New Morgan, PA, Industrial Development
Authority (Browning Ferris Co.), 6.5s, 2019 500 460,880
Westmoreland County, PA, Industrial Development
Corp. (Waste Management), LOC, 5.1s, 2018 500 449,900
----------
$1,654,118
---------------------------------------------------------------------------------------
Insured Health Care Revenue - 7.6%
Allegheny County, PA, Hospital Authority,
MBIA, 5s, 2018 $ 500 $ 451,525
Allegheny County, PA, Hospital Authority
(South Hills Health System), MBIA, 5.8s, 2016 500 508,850
Blair County, PA, Hospital Authority (Altoona),
AMBAC, 5.5s, 2008 470 487,056
Dauphin County, PA, General Authority Hospital
Rev. (Hapsco), MBIA, 5.8s, 2002 355 362,082
Lehigh County, PA, Hospital Rev. (Lehigh Valley),
MBIA, 7s, 2016 250 289,393
Lycoming County, PA, Authority Hospital Rev.
(Williamsport Hospital Obligation Group),
Connie Lee, 5.375s, 2010 750 766,583
Sayre, PA, Health Care Facilities (VHA, PA),
AMBAC, 6.375s, 2022 160 164,171
Sharon, PA, Health Systems Authority Rev., MBIA,
5s, 2018 500 462,730
----------
$3,492,390
---------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 0.5%
Montgomery County, PA, Redevelopment Authority
(KBF Associates), 6.5s, 2025 $ 250 $ 248,428
---------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 2.2%
Puerto Rico Highway & Transportation Authority,
5.5s, 2008 $ 500 $ 511,500
Puerto Rico Highway & Transportation Authority,
5.5s, 2013 500 521,725
----------
$1,033,225
---------------------------------------------------------------------------------------
Single Family Housing Revenue - 6.9%
Pennsylvania Housing Finance Agency, FHA-VA,
5.75s, 2013 $1,000 $1,027,040
</TABLE>
14 - MPA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Single Family Housing Revenue - continued
Pennsylvania Housing Finance Agency,
6.75s, 2014 $ 500 $ 527,415
Pennsylvania Housing Finance Agency,
6.4s, 2016 500 518,685
Pennsylvania Housing Finance Agency,
6.65s, 2021 250 258,495
Pennsylvania Housing Finance Agency,
6.125s, 2024 310 314,244
Philadelphia, PA, Redevelopment Authority,
6.1s, 2010 115 117,934
Pittsburgh, PA, Urban Development Corp.,
5.5s, 2010 400 404,164
------------
$ 3,167,977
-------------------------------------------------------------------------------------
Special Assessment District - 1.0%
Pennsylvania Intergovernmental Cooperative
Authority, Special Tax Rev., FGIC, 5.25s, 2016 $ 500 $ 488,360
-------------------------------------------------------------------------------------
Turnpike Revenue - 5.5%
Allegheny County, PA, Port Authority Special Rev.,
MBIA, 6.25s, 2017 $ 500 $ 530,375
Puerto Rico Highway & Transportation Authority,
MBIA, 5.5s, 2015 500 525,190
Southeastern Pennsylvania Transportation
Authority, Special Rev., FGIC, 5.25s, 2013 1,000 1,001,880
Southeastern Pennsylvania Transportation
Authority, Special Rev., FGIC, 5.375s, 2017 500 492,120
------------
$ 2,549,565
-------------------------------------------------------------------------------------
Universities - 2.7%
Pennsylvania Higher Education Facilities
(Marywood University), MBIA, 5.5s, 2018 $ 300 $ 297,591
Pennsylvania Higher Education Facilities
(Temple University), MBIA, 5.25s, 2014 500 496,510
Pennsylvania Higher Education Facilities
(Thomas Jefferson University), AMBAC, 5s, 2019 500 464,790
------------
$ 1,258,891
-------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 4.2%
Philadelphia, PA, Water Rev., MBIA, 6.25s, 2012 $ 550 $ 607,491
Philadelphia, PA, Water Rev., FSA, 5.75s, 2013 300 306,648
Philadelphia, PA, Water Rev., MBIA, 5.5s, 2014 1,000 1,011,140
------------
$ 1,925,279
-------------------------------------------------------------------------------------
Other - 10.2%
Lehigh County, PA, General Purpose Authority
(Kidspeace Obligation Group), 6s, 2018 $ 250 $ 227,277
Pennsylvania Convention Center Rev., 6.75s, 2019 250 258,820
Pennsylvania Finance Authority Rev., 6.6s, 2009 900 957,591
Pennsylvania Industrial Development Authority,
AMBAC, 7s, 2007 300 333,975
Pennsylvania Industrial Development Authority,
AMBAC, 5.8s, 2009 400 423,916
Philadelphia, PA, Industrial Development
Authority, MBIA, 5.35s, 2012 500 506,745
Pittsburgh & Allegheny County, PA, Public
Auditorium Hotel Room, AMBAC, 5.25s, 2013 1,000 1,001,720
Pittsburgh, PA, FGIC, 5.75s, 2020 500 504,550
Pittsburgh, PA, Public Parking Authority Rev.,
AMBAC, 6s, 2020 500 519,390
------------
$ 4,733,984
-------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $42,631,543) $ 43,162,756
-------------------------------------------------------------------------------------
</TABLE>
Floating Rate Demand Notes - 4.9%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Gulf Breeze, FL, due 10/04/00 $ 100 $ 100,000
Jacksonville, FL, Pollution Control Rev.
(Power & Light), due 10/02/00 400 400,000
Massachusetts Water Resources Authority,
due 10/04/00 100 100,000
New Castle, PA, Area Hospital Authority
(Jameson Memorial Hospital), due 10/04/00 700 700,000
New York City, NY, due 10/02/00 100 100,000
Pinellas County, FL, Health Facility Authority,
due 10/02/00 300 300,000
Sevier County, TN, Public Building Authority,
due 10/05/00 550 550,000
-------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 2,250,000
-------------------------------------------------------------------------------------
Total Investments (Identified Cost, $44,881,543) $ 45,412,756
Other Assets, Less Liabilities - 1.6% 760,628
-------------------------------------------------------------------------------------
Net assets - 100.0% $ 46,173,384
-------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
15 - MPA
<PAGE>
Portfolio of Investments (Unaudited) - continued
MFS SOUTH CAROLINA MUNICIPAL BOND FUND
Municipal Bonds - 99.8%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
--------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 9.1%
Anderson County, SC, School District, 5.5s, 2018 $1,465 $ 1,461,455
Beaufort County, SC, School District, 5.625s, 2018 2,000 2,012,700
Berkeley County, SC, School District, 5s, 2020 2,000 1,858,460
Commonwealth of Puerto Rico, RITES, MBIA,
7.939s, 2020 [dag]++++ 2,000 2,113,500
Georgetown County, SC, School District,
5.25s, 2018 1,500 1,456,380
Puerto Rico Municipal Finance Agency,
RITES,FSA, 8.42s, 2016 [dag]++++ 850 959,582
Richland County, SC, School District No. 1,
5s, 2016 1,975 1,876,625
State of South Carolina, "A", 4.6s, 2016 1,850 1,656,286
-----------
$13,394,988
--------------------------------------------------------------------------------------
State and Local Appropriation - 6.9%
Berkeley County, SC, School District (Berkeley
School Facilities Group, Inc.), AMBAC,
5s, 2016 ### $ 500 $ 472,060
Greenville County, SC (University Center),
AMBAC, 5.25s, 2019 1,000 963,210
Greenville, SC, Memorial Auditorium District,
Public Facilities Corp. (Bi-Lo Center), AMBAC,
4.75s, 2014 1,210 1,131,677
Hilton Head Island, SC, Public Finance Corp.,
Certificates of Participation, AMBAC, 5.75s, 2014 1,750 1,801,520
North Charleston, SC (Coliseum & Convention),
MBIA, 5.125s, 2015 3,000 2,927,370
Puerto Rico Public Finance Corp., RITES, AMBAC,
7.17s, 2013 [dag]++++ 1,375 1,519,017
Puerto Rico Public Finance Corp., RITES, AMBAC,
7.17s, 2019 [dag]++++ 1,300 1,339,676
-----------
$10,154,530
--------------------------------------------------------------------------------------
Refunded and Special Obligations - 14.3%
Berkeley County, SC, School District, AMBAC,
6.3s, 2004 $1,800 $ 1,923,588
Calhoun, SC, Solid Waste Disposal Rev.
(Eastman Kodak), 6.75s, 2017 1,000 1,136,440
Coastal Carolina University, SC, MBIA,
6.875s, 2004 1,000 1,094,070
Columbia, SC, Waterworks & Sewer Systems
Rev., 0s, 2004 1,500 1,285,800
Commonwealth of Puerto Rico, Public
Improvement, 6.8s, 2002 425 449,489
Myrtle Beach, SC, Public Finance Corp.,
Certificates of Participation (Convention Center),
6.875s, 2002 2,500 2,644,425
Puerto Rico Aqueduct & Sewer Authority Rev.,
9s, 2005 750 863,887
Puerto Rico Highway & Transportation Authority
Rev., 6.625s, 2002 300 316,413
Richland County, SC, Certificates of Participation,
FGIC, 0s, 2005 1,160 942,860
Richland County, SC, Certificates of Participation,
FGIC, 0s, 2006 1,160 896,413
South Carolina Jobs Economic Development
Authority (Carolina Hospital System), 7.55s, 2002 2,000 2,146,980
South Carolina Public Service Authority
(Santee Cooper), 6.625s, 2002 2,000 2,109,000
Spartanburg, SC, Waterworks Rev., FGIC,
6.05s, 2006 2,750 2,939,420
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
--------------------------------------------------------------------------------------
<S> <C> <C>
Refunded and Special Obligations - continued
Williamsburg County, SC, School District Public
Facilities Corp., Certificates of Participation,
7.5s, 2003 $2,010 $ 2,184,669
-----------
$20,933,454
--------------------------------------------------------------------------------------
Airport and Port Revenue - 2.8%
Horry County, SC, "A", FSA, 5.7s, 2027 $2,250 $ 2,204,595
Richland Lexington, SC, Airport Rev.
(Columbia Airport), AMBAC, 5.7s, 2026 1,000 988,090
South Carolina Ports Authority Rev.,
FSA, 5s, 2016 1,000 928,270
-----------
$ 4,120,955
--------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 10.8%
Camden, SC, Public Utility Rev., Refunding &
Improvement, MBIA, 5.5s, 2017 $1,500 $ 1,505,055
Colleton & Dorchester Counties, SC, Pollution
Control Rev., 6.6s, 2014 3,000 3,156,780
Fairfield County, SC, Pollution Control Rev.
(South Carolina Electric Co.), 6.5s, 2014 1,250 1,316,375
Piedmont, SC, Municipal Power Agency, FGIC,
6.25s, 2021 4,600 4,982,352
Puerto Rico Electric Power Authority, RITES,
FSA, 6.92s, 2015 [dag]++++ 1,000 1,011,980
South Carolina Public Service Authority, FGIC,
5.875s, 2023 500 506,230
South Carolina Public Service Authority, "B",
AMBAC, 5.5s, 2023 1,000 983,530
South Carolina Public Service Authority (South
Carolina Electric & Gas), MBIA, 5s, 2019 2,600 2,419,664
-----------
$15,881,966
--------------------------------------------------------------------------------------
Health Care Revenue - 8.1%
Greenville County SC, Hospital Rev., 1st Mortgage
Facilities (Chestnut Hill), 8s, 2015 $1,825 $ 912,500
Greenville, SC, Hospital System, Hospital Facilities
Rev., 6s, 2020 3,400 3,418,666
Greenville, SC, Hospital System, Hospital Facilities
Rev., "A", 5.25s, 2017 2,785 2,576,988
Horry County, SC, Hospital Facilities Rev.
(Conway Hospital), 6.75s, 2012 3,920 4,036,542
Puerto Rico Industrial Tourist Educational,
Medical & Environmental Control Facilities
(San Lucas & Cristo), 5.75s, 2019 1,000 871,810
-----------
$11,816,506
--------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 8.9%
Charleston County, SC, Industrial Rev.
(Zeigler Coal Holdings), 6.95s, 2028 $ 600 $ 330,000
Chester County, SC, Industrial Development Rev.
(Springs Industries, Inc), 7.35s, 2014 1,000 1,034,410
Chester County, SC, Industrial Development Rev.
(Springs Industries, Inc.), 7.8s, 2014 1,025 1,050,481
Darlington County, SC, Industrial Development
Rev. (Nucor Corp.), 5.75s, 2023 2,000 1,969,800
Darlington County, SC, Industrial Development
Rev. (Sonoco Products Co.), 6.125s, 2025 1,500 1,478,250
Florence County, SC, Industrial Development Rev.
(Stone Container Corp.), 7.375s, 2007 695 698,607
Greenville County, SC, Industrial Development
Rev. (Kroger Co.), 7.85s, 2015 500 529,670
Lexington County, SC, Industrial Rev. (J. B. White
& Co.), 8s, 2005 380 388,497
</TABLE>
16 - MSC
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Revenue (Corporate Guarantee) -
continued
Richland County, SC, Pollution Control Rev.
(Union Camp Corp.), 6.55s, 2020 $1,800 $ 1,811,340
Richland County, SC, Pollution Control Rev.
(Union Camp Corp.), 6.75s, 2022 2,000 2,021,920
York City, SC, Industrial Development Rev.
(Hoechst Celanese), 5.7s, 2024 2,000 1,774,300
------------
$ 13,087,275
-------------------------------------------------------------------------------------
Insured Health Care Revenue - 7.9%
Charleston County, SC, (Care Alliance Health
Services), FSA, 5s, 2019 $1,000 $ 908,120
Charleston County, SC, Hospital Facilities Rev.
(Medical Society Health), MBIA, 5s, 2022 2,450 2,196,695
Lexington County, SC, Hospital Rev., FSA,
5.125s, 2021 1,500 1,379,220
South Carolina Jobs & Economic Development
Authority, Hospital Facilities Rev. (Anderson
Area Medical Center), MBIA, 5.25s, 2015 1,750 1,697,937
South Carolina Jobs & Economic Development
Authority, Hospital Facilities Rev. (Anderson
Area Medical Center), FSA, 5.3s, 2015 1,000 983,890
South Carolina Jobs & Economic Development
Authority, Hospital Facilities Rev. (Georgetown
Memorial Hospital), AMBAC, 6s, 2014 1,000 1,047,470
Spartanburg County, SC, Health Service
Rev., AMBAC, 5.3s, 2025 1,000 937,450
Spartanburg County, SC, Hospital Facilities
Rev. (Health Services District, Inc.), AMBAC,
5.3s, 2020 2,500 2,371,450
------------
$ 11,522,232
-------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 2.9%
South Carolina Housing, Finance & Development
Authority (Fairway Apartments), FHA,
7.625s, 2033 $1,875 $ 1,921,050
South Carolina Housing, Finance & Development
Authority (Hunting Ridge Apartments),
6.75s, 2025 1,000 1,033,920
South Carolina Housing, Finance & Development
Authority (Runaway Bay Apartments),
6.125s, 2015 1,300 1,334,294
------------
$ 4,289,264
-------------------------------------------------------------------------------------
Single Family Housing Revenue - 1.0%
South Carolina Housing Finance & Development
Authority Rev., FSA, 6s, 2020 $1,500 $ 1,527,885
-------------------------------------------------------------------------------------
Solid Waste Revenue - 1.4%
Orangeburg County, SC, Solid Waste Disposal
Facilities Rev., AMBAC, 5.7s, 2024 $2,000 $ 1,981,880
-------------------------------------------------------------------------------------
Universities - 3.0%
Clemson University, SC, Rev., AMBAC, 6.25s, 2015 $1,250 $ 1,336,650
Greenville County, SC (Greenville Technical
College), AMBAC, 5s, 2017 1,000 933,380
University of South Carolina, University Rev.,
MBIA, 5.75s, 2026 515 516,571
University South Carolina, University Rev., "A",
FGIC, 5.625s, 2020 1,555 1,556,944
------------
$ 4,343,545
-------------------------------------------------------------------------------------
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Water and Sewer Utility Revenue - 16.6%
Charleston County, SC, Waterworks & Sewer
Rev., 6s, 2012 $2,000 $ 2,064,160
Charleston, SC, Waterworks & Sewer Rev.,
6s, 2018 1,500 1,520,505
Charleston, SC, Waterworks & Sewer Rev.,
MBIA, 5s, 2022 1,000 905,070
Columbia, SC, Waterworks & Sewer Systems
Rev., 0s, 2005 2,245 1,816,564
Columbia, SC, Waterworks & Sewer Systems
Rev., 0s, 2006 9,330 7,172,064
Columbia, SC, Waterworks & Sewer Systems
Rev., 6s, 2015 2,000 2,099,280
Greenville, SC, Waterworks Rev., 5.5s, 2022 1,000 978,990
Myrtle Beach, SC, Water & Sewer Rev., MBIA,
5.5s, 2013 1,000 1,011,560
South Carolina Water Resources Authority Rev.
(Local Government Program), 7.25s, 2020 1,825 1,866,282
Western Carolina Regional Sewer Authority Rev.,
AMBAC, 0s, 2007 4,000 2,909,840
York County, SC, Water & Sewer Rev., 6.5s, 2025 2,000 1,999,880
------------
$ 24,344,195
-------------------------------------------------------------------------------------
Other - 6.1%
Commonwealth of Puerto Rico Infrastructure
Finance Authority, 5.5s, 2018 $4,000 $ 4,067,640
Commonwealth of Puerto Rico Infrastructure
Finance Authority, 5.5s, 2019 3,500 3,544,625
North Charleston, SC, Municipal Golf Course
Mortgage Rev., 5s, 2009 500 478,150
North Charleston, SC, Municipal Golf Course
Mortgage Rev., 5.5s, 2019 1,000 902,580
------------
$ 8,992,995
-------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $142,414,388) $146,391,670
-------------------------------------------------------------------------------------
Floating Rate Demand Note - 0.8%
-------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority,
due 10/05/00, at Identified Cost $1,125 $ 1,125,000
-------------------------------------------------------------------------------------
Total Investments (Identified Cost, $143,539,388) $147,516,670
Other Assets, Less Liabilities - (0.6%) (871,441)
-------------------------------------------------------------------------------------
Net assets - 100.0% $146,645,229
-------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
17 - MSC
<PAGE>
Portfolio of Investments (Unaudited) - continued
MFS TENNESSEE MUNICIPAL BOND FUND
Municipal Bonds - 98.3%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 18.2%
Commonwealth of Puerto Rico, 5.375s, 2025 $1,640 $ 1,582,321
Commonwealth of Puerto Rico, 5.4s, 2025 3,000 2,904,450
Fayette County, TN, AMBAC, 5.6s, 2019 1,215 1,216,264
Gibson County, TN, MBIA, 5.75s, 2016 645 662,944
Giles County, TN, FGIC, 5.75s, 2020 1,980 2,008,750
Johnson City, TN, FGIC, 0s, 2012 1,690 908,933
Knoxville, TN, 5.25s, 2015 1,000 982,710
Knoxville, TN, Public Improvement, "A",
5.5s, 2017 645 642,775
Lincoln County, TN, FGIC, 5.8s, 2019 1,000 1,018,200
Lincoln County, TN, FGIC, 5.8s, 2020 1,000 1,016,840
Roane County, TN, FGIC, 5.6s, 2019 915 918,852
Roane County, TN, FGIC, 5.6s, 2020 975 977,915
Rutherford County, TN, 0s, 2015 1,500 657,870
Rutherford County, TN, School District,
5.875s, 2019 2,000 2,056,840
Rutherford County, TN, School District,
5.875s, 2020 1,100 1,130,448
Shelby County, TN, 0s, 2013 2,560 1,248,870
Williamson County, TN, Rural School,
6.125s, 2015 1,575 1,669,421
-----------
$21,604,403
-------------------------------------------------------------------------------------
State and Local Appropriation - 2.6%
Gatlinburg, TN, Public Building Authority
(Gatlinburg Convention Center), AMBAC,
6.9s, 2012 $1,000 $ 1,041,420
Puerto Rico Public Buildings Authority, 5.5s, 2021 1,000 1,003,590
Tennessee Local Development Authority Rev.,
7s, 2021 1,000 1,047,040
-----------
$ 3,092,050
-------------------------------------------------------------------------------------
Refunded and Special Obligations - 17.1%
Franklin, TN, Industrial Development Rev.
(Sussex Downs), FHA, 6.75s, 2004 $1,000 $ 1,097,670
Johnson City, TN, Health & Education Financing
Authority (Johnson City Medical Center
Hospital), MBIA, 5s, 2018 3,000 2,783,430
Knox County, TN, Industrial Development Board,
0s, 2016 5,575 2,173,748
Metropolitan Government of Nashville & Davidson
County, TN, AMBAC, 6.075s, 2002 2,000 2,078,420
Mt. Juliet, TN, Public Building Authority
(Madison), MBIA, 7.7s, 2004 1,100 1,299,254
Mt. Juliet, TN, Public Building Authority
(Madison), MBIA, 7.8s, 2004 3,500 4,144,700
Territory of Virgin Islands, 7.75s, 2001 270 279,045
West Knox Utility District, TN, Water & Sewer
Rev., MBIA, 0s, 2002 1,315 1,189,036
West Knox Utility District, TN, Water & Sewer
Rev., MBIA, 0s, 2003 1,045 899,891
West Knox Utility District, TN, Water & Sewer
Rev., MBIA, 0s, 2004 1,920 1,574,381
West Knox Utility District, TN, Water & Sewer
Rev., MBIA, 0s, 2006 1,920 1,423,335
West Knox Utility District, TN, Water & Sewer
Rev., MBIA, 0s, 2007 1,920 1,350,144
-----------
$20,293,054
-------------------------------------------------------------------------------------
Airport and Port Revenue - 0.8%
Memphis-Shelby County, TN, Airport Authority
(North West Link & Parent Co.), 6.125s, 2016 $1,000 $ 958,290
-------------------------------------------------------------------------------------
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Electric and Gas Utility Revenue - 6.6%
Harpeth Valley, TN, Utilities Improvement, MBIA,
4.75s, 2013 $1,000 $ 947,320
Jackson, TN, Electric Systems Rev., MBIA,
5s, 2018 1,000 926,240
Lawrenceburg, TN, Electric Rev., MBIA, 5.5s, 2026 1,255 1,221,291
Metropolitan Government of Nashville & Davidson
County, TN, MBIA, 0s, 2012 3,305 1,773,826
Metropolitan Government of Nashville & Davidson
County, TN, 5.125s, 2015 1,000 973,110
Tennessee Gas Rev. (Tennergy Corp.), MBIA,
5s, 2009 1,000 964,840
White House Utility District, TN, FSA, 6s, 2020 1,000 1,030,840
-----------
$ 7,837,467
-------------------------------------------------------------------------------------
Health Care Revenue - 6.2%
Cookeville, TN, Industrial Development Board,
Hospital Rev. (Cookeville General), 5.75s, 2010 $2,000 $ 1,980,020
Knox County, TN, Health, Education & Housing
Facilities Board (East Tennessee Children's),
6.5s, 2012 1,000 1,012,220
Metropolitan Government of Nashville & Davidson
County, TN, Health & Education Facility Board
Rev. (Adventist Health System), 5.25s, 2020 1,000 831,630
Puerto Rico Industrial Tourist Educational,
Medical & Environmental Control Facilities
(San Lucas & Cristo), 5.75s, 2019 1,000 871,810
Shelby County, TN, Health Educational & Housing
(St. Judes Childrens Research), 5.5s, 2020 1,750 1,658,580
Springfield, TN, Health & Higher Educational
Facilities (Northcrest Medical Center),
5.25s, 2013 1,290 1,076,363
-----------
$ 7,430,623
-------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 7.3%
Bristol, TN, Industrial Development Authority
(Kmart Corp.), 7.5s, 2008 $1,105 $ 1,173,676
Hardeman County, TN (Correctional Facilities
Corp.), 7.375s, 2017 500 510,870
Hardeman County, TN (Correctional Facilities
Corp.), 7.75s, 2017 1,000 1,049,470
Humphreys County, TN, Certificates of
Participation (DuPont), 6.7s, 2024 1,750 1,863,085
Knox County, TN, Industrial Development Board
(Kroger Co.), 8.1s, 2003 2,000 2,084,440
McMinn County, TN, Industrial Development
Board, Pollution Control Rev. (Bowater),
7.625s, 2016 1,000 1,025,790
Memphis-Shelby County, TN, Airport Authority
(Federal Express Corp.), 6.2s, 2014 1,000 1,001,860
-----------
$ 8,709,191
-------------------------------------------------------------------------------------
Insured Health Care Revenue - 9.8%
Bristol, TN, Health & Educational Facilities Board
(Bristol Memorial), FGIC, 5.45s, 2021 $2,825 $ 2,698,892
Jackson, TN, Hospital Rev. (Jackson-Madison
County General Hospital), AMBAC, 5s, 2018 1,000 916,750
Johnson City, TN, Health & Education Financing
Authority (Johnson City Medical Center
Hospital), MBIA, 5.25s, 2016 1,375 1,333,035
Knox County, TN, Health, Education & Housing
Facilities Board (Fort Sanders), MBIA,
5.75s, 2014 3,250 3,383,542
</TABLE>
18 - MTN
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Insured Health Care Revenue - continued
Metropolitan Government of Nashville & Davidson
County, TN, Health & Education (Meharry
Medical College), AMBAC, 5s, 2024 $ 3,750 $ 3,362,213
-------------
$ 11,694,432
------------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 5.4%
Chattanooga, TN, Health, Educational & Housing
Facilities Board Rev. (Rainbow Creek), GNMA,
6.125s, 2019 $ 500 $ 509,860
Franklin, TN, Industrial Development Rev.
(Landings Apartments), FSA, 6s, 2026 1,000 1,010,100
Jackson, TN, Health, Education & Housing
Facilities Board (Posthouse Apartments), FHA,
7.1s, 2028 1,610 1,679,745
Memphis, TN, Health Educational Housing,
(Hickory Pointe Apts.), MBIA, 5.85s, 2020 1,000 1,007,500
Metropolitan Government of Nashville & Davidson
County, TN, Health & Education Facility Board
Rev. (Herman Street), FHA, 7.25s, 2032 495 517,577
Metropolitan Government of Nashville & Davidson
County, TN, Industrial Development Board, FHA,
6.95s, 2026 1,000 1,045,310
Metropolitan Government of Nashville & Davidson
County, TN, Industrial Development Board, FHA,
7.5s, 2029 695 709,873
-------------
$ 6,479,965
------------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 0.6%
Territory of Virgin Islands, Public Finance
Authority, 5.875s, 2018 $ 730 $ 683,302
------------------------------------------------------------------------------------------
Single Family Housing Revenue - 7.5%
Shelby County, TN, Single Family Mortgage
Rev., FHA, 0s, 2015 $ 3,185 $ 743,443
Tennessee Housing Development Agency,
5.45s, 2014 2,535 2,525,062
Tennessee Housing Development Agency,
0s, 2016 5,000 1,989,750
Tennessee Housing Development Agency,
7.4s, 2016 950 953,800
Tennessee Housing Development Agency,
6s, 2020 1,500 1,511,475
Tennessee Housing Development Agency, MBIA,
6.125s, 2020 1,000 1,016,810
Tennessee Housing Development Agency,
7.125s, 2026 185 188,554
-------------
$ 8,928,894
------------------------------------------------------------------------------------------
Universities - 3.6%
Metropolitan Government of Nashville & Davidson
County, TN, Health, Educational & Housing
Facilities Board (McKendree Village, Inc.),
5.125s, 2020 $ 1,000 $ 933,340
Metropolitan Government of Nashville & Davidson
County, TN, Health, Educational & Housing
Facilities Board (Vanderbilt University),
5.25s, 2012 500 504,920
Metropolitan Government of Nashville & Davidson
County, TN, Health, Educational & Housing
Facilities Board (Vanderbilt University), 5.3s, 2013 1,875 1,886,850
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Universities - continued
Metropolitan Government of Nashville & Davidson
County, TN, Health, Educational & Housing
Facilities Board (Vanderbilt University),
5.375s, 2014 $ 1,000 $ 1,005,940
-------------
$ 4,331,050
------------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 12.6%
Clarksville, TN, Water, Sewer & Gas, MBIA,
5.25s, 2018 $ 1,000 $ 973,150
Hendersonville, TN, Water & Sewer Rev., FGIC,
5.5s, 2018 1,125 1,117,294
Madison, TN, Utility Waterworks, MBIA,
5s, 2019 2,750 2,549,855
Memphis, TN, San Sewage Systems Rev.,
5.75s, 2016 625 640,337
Memphis, TN, San Sewage Systems Rev.,
5.75s, 2018 1,145 1,166,011
Memphis, TN, San Sewage Systems Rev.,
5.75s, 2020 750 758,130
Metropolitan Government of Nashville & Davidson
County, TN, Water & Sewer Rev., FGIC,
5.2s, 2013 2,000 2,006,340
Metropolitan Government of Nashville & Davidson
County, TN, Water & Sewer Rev., FGIC,
5.1s, 2016 2,565 2,466,863
Metropolitan Government of Nashville & Davidson
County, TN, Water & Sewer Rev., AMBAC,
7.658s, 2022 ++++ 1,000 1,070,770
Poplar Grove, TN, Utility District, Waterworks
Rev., 6.375s, 2011 500 516,765
White House Utility District, TN, Robertson &
Sumner Counties Waterworks, FGIC, 0s, 2014 3,590 1,725,462
-------------
$ 14,990,977
------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $114,508,238) $ 117,033,698
------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.5%
------------------------------------------------------------------------------------------
Pinellas County, FL, Health Facility Authority,
due 10/2/00 $ 100 $ 100,000
Sevier County, TN, Public Building Authority, due
10/2/00 500 500,000
------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 600,000
------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $115,108,238) $ 117,633,698
Other Assets, Less Liabilities - 1.2% 1,389,475
------------------------------------------------------------------------------------------
Net assets - 100.0% $ 119,023,173
------------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
19 - MTN
<PAGE>
Portfolio of Investments (Unaudited) - continued
MFS VIRGINIA MUNICIPAL BOND FUND
Municipal Bonds - 97.0%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
--------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 17.3%
Alexandria, VA, Consolidated Public Improvement,
5.5s, 2018 $2,980 $ 2,988,761
Bristol, VA, MBIA, 5.3s, 2018 1,250 1,226,075
Chesapeake, VA, Public Improvement, 5.375s, 2013 3,500 3,537,800
Chesterfield County, VA, 6s, 2020 1,900 1,979,800
Culpeper County, VA, School, FSA, 6s, 2019 1,000 1,040,710
Fairfax County, VA, Public Improvement,
4.75s, 2016 1,210 1,105,880
Fairfax County, VA, Public Improvement,
4.75s, 2017 7,690 6,952,375
Fairfax County, VA, Redevelopment & Housing
Authority, 5.5s, 2017 2,225 2,230,340
Hampton, VA, Public Improvement, 6s, 2018 3,280 3,440,720
Hampton, VA, Public Improvement, 6s, 2019 3,480 3,650,520
Lebanon, VA, 6.375s, 2011 1,625 1,722,955
Loudoun County, VA, Public Improvement, "B",
5.375s, 2016 2,650 2,649,550
Lynchburg, VA, Public Improvement, 5.6s, 2020 1,765 1,765,635
Newport News, VA, 5s, 2017 1,340 1,250,850
Newport News, VA, 5s, 2018 2,170 2,003,235
Norfolk, VA, Parking System Rev., MBIA, 5s, 2020 1,630 1,506,202
Puerto Rico Municipal Finance Agency, RITES,
FSA, 8.42s, 2016 [dag]++++ 1,105 1,247,456
Puerto Rico Municipal Finance Agency, RITES,
FSA, 7.42s, 2017 [dag]++++ 615 637,005
Richmond, VA, 0s, 2006 1,000 766,430
Richmond, VA, 0s, 2006 2,500 1,916,075
Richmond, VA, 0s, 2007 5,280 3,829,954
Richmond, VA, 0s, 2008 2,000 1,375,760
Richmond, VA, 0s, 2008 5,270 3,625,127
Richmond, VA, 0s, 2009 5,175 3,365,613
Suffolk, VA, Public Improvement, 5.5s, 2020 1,880 1,864,321
-----------
$57,679,149
--------------------------------------------------------------------------------------
State and Local Appropriation - 8.2%
Blue Ridge, VA, Regional Jail Authority, MBIA,
5.2s, 2021 $1,830 $ 1,741,849
Chesapeake, VA, Industrial Development Authority
(Chesapeake Court House), MBIA, 6.25s, 2011 3,985 4,347,077
Chesapeake, VA, Industrial Development Authority
(Chesapeake Court House), MBIA, 5.25s, 2017 2,000 1,968,980
Chesterfield County, VA, Industrial Development
Authority, Public Facilities, 7.5s, 2008 1,720 1,796,316
Portsmouth, VA, Industrial Development Authority
Rev., Hotel Conference Center & Parking, FSA,
5.125s, 2016 795 770,442
Puerto Rico Public Buildings Authority, 5.25s, 2021 3,075 2,925,340
Puerto Rico Public Finance Corp., RITES, AMBAC,
7.17s, 2013 [dag]++++ 2,000 2,209,480
Puerto Rico Public Finance Corp., RITES, AMBAC,
7.17s, 2016 [dag]++++ 500 530,910
Virginia Biotechnology Research Park (Biotech
Two), 5.25s, 2018 8,800 8,520,424
Virginia Public Building Authority, MBIA, 0s, 2007 3,750 2,663,438
-----------
$27,474,256
--------------------------------------------------------------------------------------
Refunded and Special Obligations - 8.4%
Albemarle County, VA, Industrial Development
Authority, Health Services Rev., 6.5s, 2002 $1,000 $ 1,055,600
Arlington County, VA, Industrial Development
Authority (Arlington Hospital), 7.125s, 2001 1,000 1,044,090
Carroll County, VA, Solid Waste Authority Rev.,
7.5s, 2001 2,265 2,371,296
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
--------------------------------------------------------------------------------------
<S> <C> <C>
Refunded and Special Obligations - continued
Hampton Roads, VA, Medical College General
Rev., 6.875s, 2001 $1,500 $ 1,567,905
Henrico County, VA, Industrial Development
Authority Rev., 6.5s, 2005 5,000 5,482,200
New Kent County, VA, Industrial Development
Authority, Public Facilities, 7.5s, 2001 700 729,932
Newport News, VA, 6.5s, 2000 875 893,804
Portsmouth, VA, 6.375s, 2001 1,555 1,610,793
Puerto Rico Aqueduct & Sewer Authority Rev.,
9s, 2005 4,150 4,780,177
Puerto Rico Aqueduct & Sewer Authority Rev.,
10.25s, 2009 375 475,189
Richmond, VA, 6.5s, 2001 2,000 2,051,380
Virginia Beach, VA, Water & Sewer Rev.,
6.625s, 2002 1,400 1,464,694
Virginia College Building Authority, Educational
Facilities Rev. (Marymount), 7s, 2002 2,500 2,648,750
Virginia Public School Authority, 6.5s, 2004 1,875 2,031,394
-----------
$28,207,204
--------------------------------------------------------------------------------------
Airport and Port Revenue - 6.5%
Metropolitan Washington, DC, Airport Rev.,
5.5s, 2016 $2,465 $ 2,438,649
Metropolitan Washington, DC, Airport Rev.,
MBIA, 5s, 2018 2,000 1,842,740
Metropolitan Washington, DC, Airport Rev.,
5.75s, 2020 11,000 10,993,840
Peninsula Airport Commission, VA, 7.3s, 2021 2,400 2,484,648
Puerto Rico Ports Authority (American Airlines),
6.3s, 2023 2,000 2,015,640
Puerto Rico Ports Authority (American Airlines),
6.25s, 2026 1,750 1,762,390
-----------
$21,537,907
--------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 4.9%
Guam Power Authority Rev., RITES, AMBAC,
6.236s, 2015 [dag]++++ $1,010 $ 1,017,636
Halifax County, VA, Industrial Authority Rev.
(Old Dominion Electric), 6s, 2022 5,000 4,944,700
Pittsylvania County, VA, Industrial Development
Authority Rev., 7.5s, 2014 2,000 2,070,000
Puerto Rico Electric Power Authority, 6s, 2015 3,000 3,124,050
Puerto Rico Electric Power Authority Power,
RITES, FSA, 7.939s, 2017 [dag]++++ 2,500 2,719,500
Puerto Rico Electric Power Authority Power,
RITES, FSA, 7.689s, 2019 [dag]++++ 1,270 1,320,051
Puerto Rico Electric Power Authority Power,
RITES, FSA, 7.039s, 2020 [dag]++++ 1,250 1,199,987
-----------
$16,395,924
--------------------------------------------------------------------------------------
Health Care Revenue - 3.8%
Lynchburg, VA, Industrial Development Authority,
5.2s, 2018 $1,000 $ 916,730
Martinsville, VA, Industrial Development Authority
(Beverley Enterprises), 6.75s, 2004 895 889,559
Peninsula Ports, VA, Health Care Rev. (Riverside
Health System), 6.625s, 2010 1,500 1,581,225
Peninsula Ports, VA, Health Care Rev. (Riverside
Health System), 5s, 2018 3,580 3,202,274
Virginia Beach, VA, Development Authority
(Beverly Enterprises), 10s, 2010 1,150 1,188,881
Virginia Beach, VA, Development Authority
(Sentara Health System), 5.25s, 2014 1,740 1,691,663
</TABLE>
20 - MVA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
--------------------------------------------------------------------------------------
<S> <C> <C>
Health Care Revenue - continued
Virginia Beach, VA, Development Authority
(Sentara Health System), 4.75s, 2018 $3,750 $ 3,270,600
-----------
$12,740,932
--------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 6.9%
Bedford County, VA, Industrial Development
Authority Rev. (Georgia Pacific Corp.), 5.6s, 2025 $6,000 $ 5,313,420
Isle Wight County, VA, Industrial Development
(Union Camp), 6.55s, 2024 8,000 8,116,000
Isle Wight County, VA, Industrial Development
(Union Camp), 6.1s, 2027 3,500 3,454,605
Loudoun, VA, Industrial Development Authority
Rev. (Dulles Airport Marriott Hotel), 7.125s, 2015 2,000 1,999,940
Lynchburg, VA, Industrial Development Authority
(Kroger Co.), 7.9s, 2011 1,000 1,041,920
Virginia Peninsula Ports Authority Rev. (Zeigler
Coal), 6.9s, 2022 1,500 825,000
West Point, VA, Industrial Development Authority,
Solid Waste Disposal Rev. (Chesapeake Corp.),
6.375s, 2019 2,600 2,411,344
-----------
$23,162,229
--------------------------------------------------------------------------------------
Insured Health Care Revenue - 10.5%
Albemarle County, VA, Industrial Development
Authority, First Mortgage Rev., FHA, 8.9s, 2026 $2,150 $ 2,227,142
Danville, VA, Industrial Development Authority,
Hospital Rev. (Danville Regional Medical Center),
AMBAC, 5.2s, 2018 2,500 2,425,775
Fredericksburg, VA, Industrial Development
(Medicorp Health Systems), AMBAC, 5.25s, 2023 11,000 10,426,460
Front Royal-Warren County, VA, Industrial
Development Authority, 9.45s, 2024 1,000 1,054,140
Henrico County, VA, Industrial Development
Authority Rev. (Bon Secours Health), MBIA,
6.25s, 2020 1,500 1,617,750
Medical College of Virginia, Hospital Authority
Rev., MBIA, 5.125s, 2018 3,000 2,863,020
Peninsula Ports Authority, VA (Whittaker
Memorial), FHA, 8.7s, 2023, 2,100 2,516,976
Roanoke, VA, Industrial Development Authority,
Hospital Rev. (Roanoke Memorial), MBIA,
6.125s, 2017 6,000 6,426,060
Winchester, VA, Industrial Development Authority,
AMBAC, 8.384s, 2014 ++++ 4,900 5,541,018
-----------
$35,098,341
--------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 4.5%
Alexandria, VA, Redevelopment & Housing
Finance Authority (Jefferson Village
Apartments), 9s, 2018 $4,000 $ 4,096,680
Norfolk, VA, Redevelopment & Housing Authority
(Dockside Apartments), FHA, 7.375s, 2028 2,000 2,067,840
Virginia Housing Development Authority, 6.5s, 2013 2,300 2,412,401
Virginia Housing Development Authority, 5.1s, 2015 1,550 1,504,957
Virginia Housing Development Authority,
5.95s, 2016 1,905 1,962,322
Virginia Housing Development Authority,
5.625s, 2020 2,000 1,942,760
Virginia Housing Development Authority,
6.6s, 2022 965 988,092
-----------
$14,975,052
--------------------------------------------------------------------------------------
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
--------------------------------------------------------------------------------------
<S> <C> <C>
Sales and Excise Tax Revenue - 0.3%
Virgin Islands Public Finance Authority,
5.625s, 2025 $1,000 $ 917,320
--------------------------------------------------------------------------------------
Single Family Housing Revenue - 9.4%
Virginia Housing Development Authority,
6.85s, 2019 ++++ $7,500 $ 7,499,925
Virginia Housing Development Authority, 6.2s, 2021 15,000 15,111,750
Virginia Housing Development Authority, 6.3s, 2025 8,500 8,624,610
-----------
$31,236,285
--------------------------------------------------------------------------------------
Turnpike Revenue - 4.1%
Chesapeake Bay, VA, Bridge & Tunnel Authority,
FGIC, 0s, 2005 $4,535 $ 3,595,847
Pocahontas Parkway Assn., VA, Toll Road Rev.,
0s, 2012 1,500 661,245
Pocahontas Parkway Assn., VA, Toll Road Rev.,
0s, 2013 1,500 613,320
Pocahontas Parkway Assn., VA, Toll Road Rev.,
0s, 2014 1,500 568,305
Pocahontas Parkway Assn., VA, Toll Road Rev.,
0s, 2015 1,500 526,080
Pocahontas Parkway Assn., VA, Toll Road Rev.,
0s, 2016 1,500 486,495
Virginia Transportation Board, Transportation
Contract Rev., 6.5s, 2018 3,500 3,639,055
Virginia Transportation Board, US Route 58,
5.125s, 2021 4,000 3,731,680
-----------
$13,822,027
--------------------------------------------------------------------------------------
Universities - 3.3%
Hampton Roads, VA, Medical College General
Rev., 6.875s, 2016 $2,000 $ 2,070,780
Loudoun County, VA, Industrial Development
Authority (George Washington University),
6.25s, 2012 2,710 2,810,053
Virginia College Building Authority, Educational
Facilities Rev. (Hampden Syndey College),
5s, 2016 1,730 1,647,393
Virginia College Building Authority, Educational
Facilities Rev. (Hampton University), 5s, 2018 1,655 1,519,240
Virginia College Building Authority, Educational
Facilities Rev. (Hampton University), 6s, 2020 1,000 1,028,890
Virginia College Building Authority, VA (21 St.
Century College Program), 6s, 2018 2,000 2,092,500
-----------
$11,168,856
--------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 3.3%
Hanover County, VA, Water & Sewer Systems,
MBIA, 5.25s, 2026 $2,000 $ 1,908,400
Prince William County, VA, Water & Sewer
Systems Rev., FGIC, 5.5s, 2019 2,000 1,990,360
Virgina Beach, VA, Water Rev., 6s, 2020 1,000 1,037,270
Virginia Resources Authority, 6s, 2017 2,750 2,887,857
Virginia Resources Authority, MBIA, 5.5s, 2019 1,600 1,592,400
Virginia Resources Authority, MBIA, 5.5s, 2020 1,690 1,675,804
-----------
$11,092,091
--------------------------------------------------------------------------------------
Other - 5.6%
Danville, VA, Industrial Development Authority,
Industrial Development Rev. (Piedmont Mall),
8s, 2013 $2,780 $ 2,846,025
Fairfax County, VA, Economic Development
Authority, Parking Rev. (Vienna II Metrorail),
6s, 2016 1,650 1,737,005
</TABLE>
21 - MVA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
------------------------------------------------------------------------------------
<S> <C> <C>
Other - continued
Fairfax County, VA, Economic Development
Authority, Parking Rev. (Vienna II Metrorail),
6s, 2017 $1,750 $ 1,843,765
Greater Richmond Convertible Center Authority,
Hotel Tax Rev. (Convention Center Expansion),
6.125s, 2020 3,500 3,624,040
New River Valley, VA, Regional Jail Authority,
MBIA, 5.125s, 2019 6,405 6,101,595
Pamunkey, VA, Regional Jail Authority, MBIA,
5.75s, 2018 2,500 2,540,325
------------
$ 18,692,755
------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $320,492,910) $324,200,328
------------------------------------------------------------------------------------
Floating Rate Demand Note - 0.7%
------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority, due
10/2/00, at Identified Cost $2,500 $ 2,500,000
------------------------------------------------------------------------------------
Total Investments (Identified Cost, $322,992,910) $326,700,328
Other Assets, Less Liabilities - 2.3% 7,583,885
------------------------------------------------------------------------------------
Net assets - 100.0% $334,284,213
------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
MFS WEST VIRGINIA MUNICIPAL BOND FUND
Municipal Bonds - 98.3%
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 20.0%
Charleston, WV, Public Improvement, 7.2s, 2009 $1,140 $ 1,319,322
Commonwealth of Puerto Rico, RITES, MBIA,
7.743s, 2019 [dag]++++ 3,000 3,211,770
Jefferson County, WV, Board of Education, FGIC,
6.85s, 2009 1,680 1,909,690
Puerto Rico Municipal Finance Agency, RITES,
FSA, 7.223s, 2017 [dag]++++ 900 932,202
State of West Virginia, FGIC, 5.5s, 2017 2,565 2,517,111
State of West Virginia, FGIC, 5.625s, 2019 2,000 1,999,720
State of West Virginia, FGIC, 5s, 2021 4,000 3,622,000
State of West Virginia, FGIC, 5.25s, 2026 8,000 7,422,080
West Virginia Water Development Authority, FSA,
6.2s, 2024 3,000 3,083,040
-----------
$26,016,935
------------------------------------------------------------------------------------
State and Local Appropriation - 9.0%
Huntington, WV, Municipal Development Authority
Rev., MBIA, 5.1s, 2018 $1,740 $ 1,631,581
Puerto Rico Public Buildings Authority, 5.25s, 2021 3,115 2,963,393
West Virginia Building Commission, RITES,
AMBAC, 6.088s, 2018 [dag]++++ 5,770 5,689,451
West Virginia School Building Authority,
Refunding Capital Improvement, "B", FSA,
5.25s, 2021 1,550 1,469,105
-----------
$11,753,530
------------------------------------------------------------------------------------
Refunded and Special Obligations - 11.3%
Kanawha County, WV, Building Commission
(St. Francis Hospital), 7.5s, 2007 $ 195 $ 214,050
Monongalia County, WV, Board of Education,
MBIA, 7s, 2005 500 547,770
West Virginia Building Commission, Lease Rev.
(West Virginia Regional Jail), MBIA, 0s, 2007 3,150 2,260,944
West Virginia Building Commission, Lease Rev.
(West Virginia Regional Jail), MBIA, 0s, 2008 3,050 2,074,671
West Virginia Building Commission, Lease Rev.
(West Virginia Regional Jail), MBIA, 0s, 2009 2,500 1,609,700
West Virginia Hospital Finance Authority
(Charleston Area Medical Center), 6.5s, 2023 2,000 2,215,740
West Virginia Parkways, Economic Development
& Tourism Authority, FGIC, 0s, 2005 2,250 1,791,000
West Virginia Parkways, Economic Development
& Tourism Authority, FGIC, 0s, 2006 2,500 1,891,225
West Virginia Parkways, Economic Development
& Tourism Authority, FGIC, 0s, 2007 2,000 1,435,520
West Virginia Parkways, Economic Development
& Tourism Authority, FGIC, 0s, 2008 610 414,934
West Virginia Water Development Authority,
7.1s, 2009 220 242,284
-----------
$14,697,838
------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 12.4%
Marshall County, WV, Pollution Control Rev.
(Ohio Power Co.), 6.85s, 2022 $2,000 $ 2,065,460
Marshall County, WV, Pollution Control Rev.
(Ohio Power Co.), MBIA, 6.85s, 2022 3,150 3,302,491
Mason County, WV, Pollution Control Rev.
(Appalachian Power), MBIA, 6.6s, 2022 7,000 7,344,820
Putnam County, WV, Pollution Control Rev.
(Applachian Power Co.), MBIA, 6.6s, 2019 3,200 3,349,920
-----------
$16,062,691
------------------------------------------------------------------------------------
</TABLE>
22 - MWV
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
--------------------------------------------------------------------------------------
<S> <C> <C>
Health Care Revenue - 6.0%
Berkeley County, WV, Building Commission,
Hospital Rev. (City Hospital), 6.5s, 2022 $2,500 $ 2,419,575
Monongalia County, WV, Health Facilities Rev.
(Beverly Enterprises, Inc.), 5.625s, 2003 210 206,159
Monongalia County, WV, Health Facilities Rev.
(Beverly Enterprises, Inc.), 5.875s, 2007 500 476,940
Ohio County, WV, County Commission Health
System (Ohio Valley Medical Center), 5.75s, 2013 750 652,785
West Virginia Hospital Finance Authority
(Fairmont General Hospital), 6.625s, 2019 2,000 1,890,220
West Virginia Hospital Finance Authority
(General Division Medical Building), 7.25s, 2014 2,000 2,105,020
------------
$ 7,750,699
--------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 12.1%
Braxton County, WV, Solid Waste Disposal
(Weyerhaeuser Co.), 6.5s, 2025 $2,000 $ 2,013,920
Jackson County, WV, Pollution Control Rev.
(Kaiser Aluminum & Chemical Corp.), 6.5s, 2008 2,085 2,073,574
Kanawha County, WV, Commercial Development
Rev. (Kroger Co.), 8s, 2011 1,000 1,041,270
Kanawha County, WV, Commercial Development
Rev. (May Department Stores Co.), 6.5s, 2003 3,000 3,109,710
Kanawha County, WV, Pollution Control Rev.
(Union Carbide Corp.), 8s, 2020 2,000 2,045,740
Monongalia County, WV, Commercial
Development Rev. (Kroger Co.), 7.7s, 2012 2,000 2,101,440
Putnam County, WV, Industrial Development Rev.
(Rite Aid Corp.), 10.375s, 2002 590 592,519
South Charleston, WV, Pollution Control Rev.
(Union Carbide Corp.), 7.625s, 2005 2,500 2,706,025
------------
$ 15,684,198
--------------------------------------------------------------------------------------
Insured Health Care Revenue - 8.1%
Harrison County, WV, Building Commission Rev.
(Maplewood Retirement), AMBAC, 5.25s, 2021 $2,625 $ 2,458,890
Monongalia County, WV, Building Commission,
Health Rev. (Monongalia General Hospital),
MBIA, 6.625s, 2011 1,000 1,025,680
Randolph County, WV, Community Health System
Rev. (Davis Health System, Inc.), FSA, 5.2s, 2021 1,000 922,050
West Virginia Hospital Finance Authority (Cabell
Huntington Hospital), AMBAC, 6.25s, 2019 5,000 5,141,400
West Virginia Hospital Finance Authority (West
Virginia University Hospital), AMBAC, 5s, 2018 1,000 916,940
------------
$ 10,464,960
--------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 1.0%
Huntington, WV, Housing Corp., Multi-Family Rev.,
FNMA, 7.5s, 2024 $ 800 $ 824,808
Webster County, WV, Housing Development Rev.
(Circlebrook), FHA, 6.35s, 2008 440 456,364
------------
$ 1,281,172
--------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 0.4%
Virgin Islands Public Finance Authority,
5.625s, 2025 $ 500 $ 458,660
--------------------------------------------------------------------------------------
Single Family Housing Revenue - 3.3%
Berkeley County, WV, Residential Mortgage Rev.,
7.875s, 2012 $ 145 $ 147,923
Charles Town, WV, Residential Mortgage Rev.,
6.2s, 2011 380 391,161
</TABLE>
Municipal Bonds - continued
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
--------------------------------------------------------------------------------------
<S> <C> <C>
Single Family Housing Revenue - continued
Mason County, WV, 0s, 2014 $1,700 $ 608,770
West Virginia Housing Development Fund,
5.55s, 2014 910 920,046
West Virginia Housing Development Fund,
7.2s, 2020 1,295 1,342,928
West Virginia Housing Development Fund,
5.3s, 2023 1,000 912,660
------------
$ 4,323,488
--------------------------------------------------------------------------------------
Turnpike Revenue - 2.3%
West Virginia Parkways Authority, FGIC,
5.831s, 2019 $3,000 $ 3,001,770
--------------------------------------------------------------------------------------
Universities - 4.9%
West Virgina University Rev. (West Virginia
Dormitory), AMBAC, 5s, 2022 $2,000 $ 1,834,140
West Virginia University Rev. (Marshall
University), FGIC, 6s, 2020 2,705 2,777,927
West Virginia University Rev. (West Virgina
University), MBIA, 5.5s, 2020 1,700 1,695,852
------------
$ 6,307,919
--------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 6.5%
Beckley, WV, Industrial Development Rev.
(Beckley Water Co.), 7s, 2017 $2,000 $ 2,088,680
Charleston, WV, Sewer Rev., MBIA, 6.5s, 2017 2,260 2,374,740
West Virginia Water Development Authority,
FSA, 5s, 2018 1,270 1,169,315
West Virginia Water Development Authority,
AMBAC, 6.25s, 2020 1,000 1,048,170
West Virginia Water Development Authority,
FSA, 5.25s, 2035 2,000 1,819,420
------------
$ 8,500,325
--------------------------------------------------------------------------------------
Other - 1.0%
West Virginia Economic Development, Auto Lease
Rev. (Capitol Parking Garage), AMBAC, 5.8s, 2020 $1,260 $ 1,274,301
--------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $123,882,434) $127,578,486
--------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.4%
--------------------------------------------------------------------------------------
Appling County, GA, Development Authority
Pollution (Georgia Power Co.), due 10/02/00 $ 100 $ 100,000
Bartow County, GA, Development Authority
Pollution Control Rev. (Georgia Power Co.),
due 10/05/00 200 200,000
Putnam County, GA, Development Authority,
Pollution Control Rev. (Georgia Power Co.),
due 10/02/00 200 200,000
Sevier County, TN, Public Building Authority,
due 10/05/00 1,000 1,000,000
St. Lucie County, FL, Pollution Control Rev.
(Florida Power & Light Co.), due 10/05/00 350 350,000
--------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 1,850,000
--------------------------------------------------------------------------------------
Total Investments (Identified Cost, $125,732,434) $129,428,486
Other Assets, Less Liabilities - 0.3% 432,949
--------------------------------------------------------------------------------------
Net assets - 100.0% $129,861,435
--------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
</TABLE>
Portfolio Footnotes:
++++Inverse floating rate security.
[dag]Restricted security.
###Security segregated as collateral for an open futures contract.
23 - MWV
<PAGE>
Financial Statements
Statements of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
Mississippi New York
September 30, 2000 Fund Fund
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments -
Identified cost $70,220,482 $114,906,980
Unrealized appreciation 1,723,728 4,973,345
----------- ------------
Total, at value $71,944,210 $119,880,325
Cash 73,370 22,189
Receivable for daily variation margin on open future contracts 2,344 1,875
Receivable for investments sold 430,113 2,037,534
Receivable for fund shares sold 84,135 245,613
Interest receivable 1,264,445 1,987,879
Other assets 504 969
----------- ------------
Total assets $73,799,121 $124,176,384
----------- ------------
Liabilities:
Distributions payable $ 170,740 $ 217,021
Payable for investments purchased -- 2,710,722
Payable for fund shares reacquired 500 47,525
Payable to affiliates -
Management fee 1,411 2,328
Shareholder servicing agent fee 403 665
Distribution and service fee 1,205 2,532
Administrative fee 71 116
Accrued expenses and other liabilities 61,642 80,168
----------- ------------
Total liabilities $ 235,972 $ 3,061,077
----------- ------------
Net assets $73,563,149 $121,115,307
----------- ------------
Net assets consist of:
Paid-in capital $74,274,173 $117,086,642
Unrealized appreciation on investments 1,691,697 4,948,970
Accumulated net realized loss on investments (2,554,713) (872,689)
Accumulated undistributed (distributions in excess of)
net investment income 151,992 (47,616)
----------- ------------
Total $73,563,149 $121,115,307
----------- ------------
Shares of beneficial interest outstanding:
Class A 6,656,342 9,365,129
Class B 1,095,651 1,981,767
Class C -- --
----------- ------------
Total shares of beneficial interest outstanding 7,751,993 11,346,896
----------- ------------
Net assets:
Class A $63,156,231 $ 99,970,905
Class B 10,406,918 21,144,402
Class C -- --
----------- ------------
Total net assets $73,563,149 $121,115,307
----------- ------------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $ 9.49 $ 10.67
----------- ------------
Offering price per share (100 [divided by] 95.25 of net asset value per share) $ 9.96 $ 11.20
----------- ------------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $ 9.50 $ 10.67
----------- ------------
Class C shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) -- --
----------- ------------
</TABLE>
<TABLE>
<CAPTION>
North Carolina Pennsylvania
September 30, 2000 Fund Fund
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments -
Identified cost $350,965,489 $44,881,543
Unrealized appreciation 8,031,137 531,213
------------ -----------
Total, at value $358,996,626 $45,412,756
Cash 15,352 76,907
Receivable for daily variation margin on open future contracts 2,344 281
Receivable for investments sold 2,939,149 241,117
Receivable for fund shares sold 260,014 328,844
Interest receivable 6,221,994 698,165
Other assets 2,823 451
------------ -----------
Total assets $368,438,302 $46,758,521
------------ -----------
Liabilities:
Distributions payable $ 646,697 $ 83,909
Payable for investments purchased 3,156,741 494,867
Payable for fund shares reacquired 263,853 1,231
Payable to affiliates -
Management fee 6,985 884
Shareholder servicing agent fee 1,996 --
Distribution and service fee 9,279 4,246
Administrative fee 349 --
Accrued expenses and other liabilities 96,740 --
------------ -----------
Total liabilities $ 4,182,640 $ 585,137
------------ -----------
Net assets $364,255,662 $46,173,384
------------ -----------
Net assets consist of:
Paid-in capital $359,024,899 $47,286,884
Unrealized appreciation on investments 8,002,232 527,744
Accumulated net realized loss on investments (2,400,164) (1,684,915)
Accumulated undistributed (distributions in excess of)
net investment income (371,305) 43,671
------------ -----------
Total $364,255,662 $46,173,384
------------ -----------
Shares of beneficial interest outstanding:
Class A 26,157,348 2,929,244
Class B 4,213,506 1,944,598
Class C 1,416,633 --
------------ -----------
Total shares of beneficial interest outstanding 31,787,487 4,873,842
------------ -----------
Net assets:
Class A $299,766,955 $27,723,030
Class B 48,264,205 18,450,354
Class C 16,224,502 --
------------ -----------
Total net assets $364,255,662 $46,173,384
------------ -----------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $ 11.46 $ 9.46
------------ -----------
Offering price per share (100 [divided by] 95.25 of net asset value per share) $ 12.03 $ 9.93
------------ -----------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $ 11.45 $ 9.49
------------ -----------
Class C shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $ 11.45 --
------------ -----------
</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.
24
<PAGE>
Financial Statements - continued
Statements of Assets and Liabilities (Unaudited) - continued
<TABLE>
<CAPTION>
South Carolina Tennessee
September 30, 2000 Fund Fund
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments -
Identified cost $143,539,388 $115,108,238
Unrealized appreciation 3,977,282 2,525,460
------------ ------------
Total, at value $147,516,670 $117,633,698
Cash 1,358,825 56,265
Receivable for daily variation margin on open futures contracts 1,515 --
Receivable for investments sold 4,612,572 35,000
Receivable for fund shares sold 20,311 121,296
Interest receivable 2,119,772 1,786,972
Other assets 1,168 837
------------ ------------
Total assets $155,630,833 $119,634,068
------------ ------------
Liabilities:
Distributions payable $ 281,144 $ 240,908
Payable for investments purchased 7,608,890 --
Payable for fund shares reacquired 1,031,279 289,740
Payable to affiliates -
Management fee 2,813 2,289
Shareholder servicing agent fee 804 654
Distribution and service fee 3,903 3,060
Administrative fee 140 114
Accrued expenses and other liabilities 56,631 74,130
------------ ------------
Total liabilities $ 8,985,604 $ 610,895
------------ ------------
Net assets $146,645,229 $119,023,173
------------ ------------
Net assets consist of:
Paid-in capital $145,227,513 $117,680,313
Unrealized appreciation on investments 3,978,282 2,525,460
Accumulated net realized loss on investments (2,795,485) (1,250,952)
Accumulated undistributed (distributions in excess of)
net investment income 234,919 68,352
------------ ------------
Total $146,645,229 $119,023,173
------------ ------------
Shares of beneficial interest outstanding:
Class A 9,917,278 9,541,040
Class B 2,616,149 2,118,725
Class C -- --
------------ ------------
Total shares of beneficial interest outstanding 12,533,427 11,659,765
------------ ------------
Net assets:
Class A $116,050,047 $ 97,406,475
Class B 30,595,182 21,616,698
Class C -- --
------------ ------------
Total net assets $146,645,229 $119,023,173
------------ ------------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $ 11.70 $ 10.21
------------ ------------
Offering price per share (100 [divided by] 95.25 of net asset value per share) $ 12.28 $ 10.72
------------ ------------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $ 11.69 $ 10.20
------------ ------------
Class C shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) -- --
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Virginia West Virginia
September 30, 2000 Fund Fund
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments -
Identified cost $322,992,910 $125,732,434
Unrealized appreciation 3,707,418 3,696,052
------------ ------------
Total, at value $326,700,328 $129,428,486
Cash 88,780 51,868
Receivable for daily variation margin on open futures contracts -- --
Receivable for investments sold 5,310,600 --
Receivable for fund shares sold 219,623 63,143
Interest receivable 5,632,103 2,340,413
Other assets 2,693 960
------------ ------------
Total assets $337,954,127 $131,884,870
------------ ------------
Liabilities:
Distributions payable $ 700,048 $ 238,657
Payable for investments purchased 1,963,500 1,694,467
Payable for fund shares reacquired 878,220 3,276
Payable to affiliates -
Management fee 6,421 2,490
Shareholder servicing agent fee 1,835 711
Distribution and service fee 7,618 3,021
Administrative fee 321 124
Accrued expenses and other liabilities 111,951 80,689
------------ ------------
Total liabilities $ 3,669,914 $ 2,023,435
------------ ------------
Net assets $334,284,213 $129,861,435
------------ ------------
Net assets consist of:
Paid-in capital $333,957,598 $129,974,680
Unrealized appreciation on investments 3,707,418 3,696,052
Accumulated net realized loss on investments (2,514,918) (3,298,282)
Accumulated undistributed (distributions in excess of)
net investment income (865,885) (511,015)
------------ ------------
Total $334,284,213 $129,861,435
------------ ------------
Shares of beneficial interest outstanding:
Class A 27,346,035 10,384,403
Class B 2,565,375 1,347,214
Class C 488,953 --
------------ ------------
Total shares of beneficial interest outstanding 30,400,363 11,731,617
------------ ------------
Net assets:
Class A $300,709,227 $114,954,179
Class B 28,197,545 14,907,256
Class C 5,377,441 --
------------ ------------
Total net assets $334,284,213 $129,861,435
------------ ------------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $ 11.00 $ 11.07
------------ ------------
Offering price per share (100 [divided by] 95.25 of net asset value per share) $ 11.55 $ 11.62
------------ ------------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $ 10.99 $ 11.07
------------ ------------
Class C shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $ 11.00 --
------------ ------------
</TABLE>
On sales of $100,000 or more, the offering price of Class A shares is reduced.
A contingent deferred sales charge may be imposed on redemptions of Class A,
Class B, and Class C shares.
See notes to financial statements.
25
<PAGE>
Financial Statements - continued
Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
Mississippi New York North Carolina Pennsylvania
Six Months Ended September 30, 2000 Fund Fund Fund Fund
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income:
Interest income $2,219,117 $3,619,037 $ 11,022,367 $1,219,111
---------- ---------- ------------ ----------
Expenses -
Management fee $ 203,959 $ 331,383 $ 1,007,965 $ 118,974
Trustees' compensation 10,669 10,634 10,205 10,754
Shareholder servicing agent fee 37,153 60,372 183,620 21,546
Distribution and service fee (Class A) -- 125,430 531,394 --
Distribution and service fee (Class B) 40,605 102,000 242,047 68,960
Distribution and service fee (Class C) -- -- 75,887 --
Administrative fee 6,502 10,565 32,134 3,771
Custodian fee 17,231 26,106 64,090 12,813
Printing 3,051 4,923 7,133 2,157
Postage 1,560 2,275 4,745 1,675
Auditing fees 15,214 15,224 15,671 15,609
Legal fees 3,163 1,202 2,552 2,549
Registration fees 20,419 -- -- --
Miscellaneous 6,767 31,502 48,273 20,305
---------- ---------- ------------ ----------
Total expenses $ 366,293 $ 721,616 $ 2,225,716 $ 279,113
Fees paid indirectly (8,072) (11,360) (28,417) (3,489)
Reduction of expenses by investment adviser (73,922) (120,081) (365,295) (130,782)
---------- ---------- ------------ ----------
Net expenses $ 284,299 $ 590,175 $ 1,832,004 $ 144,842
---------- ---------- ------------ ----------
Net investment income $1,934,818 $3,028,862 $ 9,190,363 $1,074,269
---------- ---------- ------------ ----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 149,076 $ 428,883 $ (1,475,916) $ (5,092)
Futures contracts 191,338 (90,950) 102,656 (41,202)
---------- ---------- ------------ ----------
Net realized gain (loss) on investments $ 340,414 $ 337,933 $ (1,373,260) $ (46,294)
---------- ---------- ------------ ----------
Change in unrealized appreciation (depreciation) -
Investments $ 640,844 $ 867,736 $ 4,903,596 $ 520,355
Futures contracts (92,876) (62,498) (140,892) (3,469)
---------- ---------- ------------ ----------
Net unrealized gain on investments $ 547,968 $ 805,238 $ 4,762,704 $ 516,886
---------- ---------- ------------ ----------
Net realized and unrealized gain on investments $ 888,382 $1,143,171 $ 3,389,444 $ 470,592
---------- ---------- ------------ ----------
Increase in net assets from operations $2,823,200 $4,172,033 $ 12,579,807 $1,544,861
---------- ---------- ------------ ----------
</TABLE>
See notes to financial statements.
26
<PAGE>
Financial Statements - continued
Statements of Operations (Unaudited) - continued
<TABLE>
<CAPTION>
South Carolina Tennessee Virginia West Virginia
Six Months Ended September 30, 2000 Fund Fund Fund Fund
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income:
Interest income $ 4,622,838 $3,556,164 $ 10,329,696 $3,981,658
------------ ---------- ------------ ----------
Expenses -
Management fee $ 411,626 $ 332,460 $ 937,272 $ 356,511
Trustees' compensation 11,040 10,765 11,047 10,856
Shareholder servicing agent fee 74,982 60,564 170,736 64,948
Distribution and service fee (Class A) 207,939 174,816 538,334 201,501
Distribution and service fee (Class B) 155,703 106,164 142,857 73,758
Distribution and service fee (Class C) -- -- 26,400 --
Administrative fee 13,121 10,599 29,879 11,366
Custodian fee 27,405 24,817 59,579 26,170
Printing 5,424 4,418 13,197 4,641
Postage 2,709 2,436 4,049 2,002
Auditing fees 15,629 15,624 15,666 15,225
Legal fees 33,184 4,534 1,242 2,119
Miscellaneous -- 19,727 64,012 28,487
------------ ---------- ------------ ----------
Total expenses $ 958,762 $ 766,924 $ 2,014,270 $ 797,584
Fees paid indirectly (23,340) (8,686) (32,279) (12,846)
Reduction of expenses by investment adviser (149,192) (120,486) (339,699) (129,194)
------------ ---------- ------------ ----------
Net expenses $ 786,230 $ 637,752 $ 1,642,292 $ 655,544
------------ ---------- ------------ ----------
Net investment income $ 3,836,608 $2,918,412 $ 8,687,404 $3,326,114
------------ ---------- ------------ ----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ (1,636,822) $ (606,009) $ (1,288,870) $ (431,490)
Futures contracts (90,829) 6,388 (10,153) (59,986)
------------ ---------- ------------ ----------
Net realized loss on investments $ (1,727,651) $ (599,621) $ (1,299,023) $ (491,476)
------------ ---------- ------------ ----------
Change in unrealized appreciation (depreciation) -
Investments $ 2,993,859 $1,891,310 $ 3,916,122 $1,841,845
Futures contracts 50,719 (35,740) 235 46,681
------------ ---------- ------------ ----------
Net unrealized gain on investments $ 3,044,578 $1,855,570 $ 3,916,357 $1,888,526
------------ ---------- ------------ ----------
Net realized and unrealized gain on investments $ 1,316,927 $1,255,949 $ 2,617,334 $1,397,050
------------ ---------- ------------ ----------
Increase in net assets from operations $ 5,153,535 $4,174,361 $ 11,304,738 $4,723,164
------------ ---------- ------------ ----------
</TABLE>
See notes to financial statements.
27
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Mississippi New York North Carolina Pennsylvania
Six Months Ended September 30, 2000 Fund Fund Fund Fund
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 1,934,818 $ 3,028,862 $ 9,190,363 $ 1,074,269
Net realized gain (loss) on investments 340,414 337,933 (1,373,260) (46,294)
Net unrealized gain on investments 547,968 805,238 4,762,704 516,886
------------ ------------ ------------- ------------
Increase in net assets from operations $ 2,823,200 $ 4,172,033 $ 12,579,807 $ 1,544,861
------------ ------------ ------------- ------------
Distributions declared to shareholders -
From net investment income (Class A) $ (1,706,774) $ (2,633,547) $ (7,837,087) $ (684,583)
From net investment income (Class B) (237,076) (459,041) (1,092,537) (390,528)
From net investment income (Class C) -- -- (342,008) --
------------ ------------ ------------- ------------
Total distributions declared to shareholders $ (1,943,850) $ (3,092,588) $ (9,271,632) $ (1,075,111)
------------ ------------ ------------- ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 2,842,321 $ 5,285,607 $ 9,567,793 $ 5,263,629
Net asset value of shares issued to shareholders
in reinvestment of distributions 896,407 1,780,007 5,278,883 579,427
Cost of shares reacquired (8,013,991) (8,657,069) (27,523,201) (3,129,713)
------------ ------------ ------------- ------------
Net increase (decrease) in net assets from
fund share transactions $ (4,275,263) $ (1,591,455) $ (12,676,525) $ 2,713,343
------------ ------------ ------------- ------------
Total increase (decrease) in net assets $ (3,395,913) $ (512,010) $ (9,368,350) $ 3,183,093
Net assets:
At beginning of period 76,959,062 121,627,317 373,624,012 42,990,291
------------ ------------ ------------- ------------
At end of period $ 73,563,149 $121,115,307 $ 364,255,662 $ 46,173,384
------------ ------------ ------------- ------------
Accumulated undistributed (distributions in excess of) net investment
income included in net assets at end of period $ 151,992 $ (47,616) $ (371,305) $ 43,671
------------ ------------ ------------- ------------
</TABLE>
See notes to financial statements.
28
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets (Unaudited) - continued
<TABLE>
<CAPTION>
South Carolina Tennessee Virginia West Virginia
Six Months Ended September 30, 2000 Fund Fund Fund Fund
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 3,836,608 $ 2,918,412 $ 8,687,404 $ 3,326,114
Net realized loss on investments (1,727,651) (599,621) (1,299,023) (491,476)
Net unrealized gain on investments 3,044,578 1,855,570 3,916,357 1,888,526
------------- ------------ ------------- ------------
Increase in net assets from operations $ 5,153,535 $ 4,174,361 $ 11,304,738 $ 4,723,164
------------- ------------ ------------- ------------
Distributions declared to shareholders -
From net investment income (Class A) $ (2,979,423) $ (2,466,532) $ (7,938,847) $ (2,989,705)
From net investment income (Class B) (680,127) (455,537) (645,922) (335,062)
From net investment income (Class C) -- -- (119,066) --
------------- ------------ ------------- ------------
Total distributions declared to shareholders $ (3,659,550) $ (2,922,069) $ (8,703,835) $ (3,324,767)
------------- ------------ ------------- ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 4,175,161 $ 4,502,554 $ 8,632,555 $ 2,475,463
Net asset value of shares issued to shareholders
in reinvestment of distributions 1,918,847 1,430,659 4,323,065 1,837,270
Cost of shares reacquired (13,538,681) (9,734,079) (27,693,061) (7,750,753)
------------- ------------ ------------- ------------
Net decrease in net assets from
fund share transactions $ (7,444,673) $ (3,800,866) $ (14,737,441) $ (3,438,020)
------------- ------------ ------------- ------------
Total decrease in net assets $ (5,950,688) $ (2,548,574) $ (12,136,538) $ (2,039,623)
Net assets:
At beginning of period 152,595,917 121,571,747 346,420,751 131,901,058
------------- ------------ ------------- ------------
At end of period $ 146,645,229 $119,023,173 $ 334,284,213 $129,861,435
------------- ------------ ------------- ------------
Accumulated undistributed (distributions in excess of) net investment
income included in net assets at end of period $ 234,919 $ 68,352 $ (865,885) $ (511,015)
------------- ------------ ------------- ------------
</TABLE>
See notes to financial statements.
29
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets - continued
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Mississippi New York North Carolina Pennsylvania
Year Ended March 31, 2000 Fund Fund Fund Fund
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 3,980,844 $ 6,703,903 $ 19,848,936 $ 2,165,065
Net realized gain (loss) on investments 372,698 (725,443) (177,009) (167,907)
Net unrealized loss on investments (4,986,654) (8,261,487) (27,858,374) (2,476,896)
------------ ------------ ------------- ------------
Decrease in net assets from operations $ (633,112) $ (2,283,027) $ (8,186,447) $ (479,738)
------------ ------------ ------------- ------------
Distributions declared to shareholders -
From net investment income (Class A) $ (3,475,557) $ (5,531,891) $ (16,769,203) $ (1,208,852)
From net investment income (Class B) (494,824) (1,165,668) (2,248,484) (939,344)
From net investment income (Class C) -- -- (636,441) --
------------ ------------ ------------- ------------
Total distributions declared to shareholders $ (3,970,381) $ (6,697,559) $ (19,654,128) $ (2,148,196)
------------ ------------ ------------- ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 13,670,556 $ 16,723,976 $ 29,418,303 $ 13,224,784
Net asset value of shares issued to shareholders
in reinvestment of distributions 1,734,390 3,894,825 11,346,137 1,230,667
Cost of shares reacquired (12,176,663) (37,185,334) (69,993,273) (14,515,297)
------------ ------------ ------------- ------------
Net increase (decrease) in net assets from
fund share transactions $ 3,228,283 $(16,566,533) $ (29,228,833) $ (59,846)
------------ ------------ ------------- ------------
Total decrease in net assets $ (1,375,210) $(25,547,119) $ (57,069,408) $ (2,687,780)
Net assets:
At beginning of period 78,334,272 147,174,436 430,693,420 45,678,071
------------ ------------ ------------- ------------
At end of period $ 76,959,062 $121,627,317 $ 373,624,012 $ 42,990,291
------------ ------------ ------------- ------------
Accumulated undistributed (distributions in excess of) net investment
income included in net assets at end of period $ 161,024 $ 16,110 $ (290,036) $ 44,513
------------ ------------ ------------- ------------
</TABLE>
See notes to financial statements.
30
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets - continued
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
South Carolina Tennessee Virginia West Virginia
Year Ended March 31, 2000 Fund Fund Fund Fund
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 7,935,405 $ 6,160,685 $ 18,788,884 $ 7,120,416
Net realized gain (loss) on investments (929,240) (651,330) 495,322 (12,143)
Net unrealized loss on investments (11,645,529) (8,581,335) (25,034,111) (10,271,683)
------------ ------------ ------------ ------------
Decrease in net assets from operations $ (4,639,364) $ (3,071,980) $ (5,749,905) $ (3,163,410)
------------ ------------ ------------ ------------
Distributions declared to shareholders -
From net investment income (Class A) $ (6,408,786) $ (5,207,698) $(16,879,510) $ (6,386,832)
From net investment income (Class B) (1,442,426) (942,677) (1,437,665) (715,598)
From net investment income (Class C) -- -- (243,017) --
From net realized gain on investments (Class A) (337,034) (675,450) -- --
From net realized gain on investments (Class B) (89,517) (149,319) -- --
In excess of net realized gain on investments (Class A) (49,868) (402) -- --
In excess of net realized gain on investments (Class B) (13,245) (89) -- --
------------ ------------ ------------ ------------
Total distributions declared to shareholders $ (8,340,876) $ (6,975,635) $(18,560,192) $ (7,102,430)
------------ ------------ ------------ ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 11,474,304 $ 12,069,955 $ 22,537,475 $ 6,726,050
Net asset value of shares issued to shareholders
in reinvestment of distributions 4,441,022 3,598,094 9,195,654 3,940,144
Cost of shares reacquired (32,351,554) (24,109,917) (69,050,206) (19,121,105)
------------ ------------ ------------ ------------
Net decrease in net assets from
fund share transactions $(16,436,228) $ (8,441,868) $(37,317,077) $ (8,454,911)
------------ ------------ ------------ ------------
Total decrease in net assets $(29,416,468) $(18,489,483) $(61,627,174) $(18,720,751)
Net assets:
At beginning of period 182,012,385 140,061,230 408,047,925 150,621,809
------------ ------------ ------------ ------------
At end of period $152,595,917 $121,571,747 $346,420,751 $131,901,058
------------ ------------ ------------ ------------
Accumulated undistributed (distributions in excess of) net investment
income included in net assets at end of period $ 57,861 $ 72,009 $ (849,454) $ (512,362)
------------ ------------ ------------ ------------
</TABLE>
See notes to financial statements.
31
<PAGE>
Financial Statements - continued
Financial Highlights
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Mississippi Fund
------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
September 30, -----------------------------------------------------------
2000 2000 1999 1998 1997 1996
------------------------------------------------------------------------------
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.37 $ 9.93 $ 9.88 $ 9.35 $ 9.35 $ 9.15
--------- ------- ------ ------- ------- ---------
Income from investment operations# -
Net investment income[sec] $ 0.25 $0.50 $ 0.49 $ 0.49 $ 0.48 $ 0.52
Net realized and unrealized gain (loss) on
investments 0.12 (0.56) 0.06 0.52 0.00 0.20
--------- ------- ------ ------- ------- ---------
Total from investment operations $ 0.37 $ (0.06) $ 0.55 $ 1.01 $ 0.48 $ 0.72
--------- ------- ------ ------- ------- ---------
Less distributions declared to shareholders -
From net investment income $ (0.25) $ (0.50) $(0.50) $ (0.48) $ (0.48) $ (0.52)
In excess of net investment income -- -- -- -- -- (0.00)++++
--------- ------- ------ ------- ------- ---------
Total distributions declared to shareholders $ (0.25) $ (0.50) $(0.50) $ (0.48) $ (0.48) $ (0.52)
--------- ------- ------ ------- ------- ---------
Net asset value - end of period $ 9.49 $ 9.37 $ 9.93 $ 9.88 $ 9.35 $ 9.35
--------- ------- ------ ------- ------- ---------
Total return [2 dags] 4.03%[2 dags] (0.58)% 5.62% 11.02% 5.22% 7.99%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.68%[dag] 0.66% 0.73% 0.78% 0.87% 0.45%
Net investment income 5.33%[dag] 5.22% 4.94% 5.04% 5.14% 5.51%
Portfolio turnover 10% 18% 6% 18% 17% 31%
Net assets at end of period (000 Omitted) $63,156 $66,173 $66,869 $66,061 $66,630 $ 74,435
[sec]Subject to reimbursement by the fund, the investment adviser voluntarily agreed under a temporary expense reimbursement
agreement to pay all of the fund's operating expenses, exclusive of management and distribution and service fees. In
consideration, the fund pays the investment adviser a reimbursement fee not greater than 0.40% of average daily net assets. In
addition, the investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. To the extent
actual expenses were over this limitation and the waivers had not been in place, the net investment income per share and the
ratios would have been:
Net investment income $ 0.24 $0.48 $ 0.48 $ 0.48 -- $ 0.48
Ratios (to average net assets):
Expenses## 0.88%[dag] 0.84% 0.85% 0.85% -- 0.88%
Net investment income 5.13%[dag] 5.04% 4.82% 4.97% -- 5.08%
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
++ 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.
++++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
32
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
Mississippi Fund
---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
September 30, --------------------------------------------------------
2000 2000 1999 1998 1997 1996
---------------------------------------------------------------------------
(Unaudited)
---------------------------------------------------------------------------------------------------------------------------------
Class B
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.38 $ 9.94 $ 9.89 $ 9.36 $ 9.36 $ 9.16
------- ------- ------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.21 $0.42 $ 0.41 $ 0.41 $ 0.40 $ 0.44
Net realized and unrealized gain (loss) on
investments 0.12 (0.56) 0.06 0.53 0.00 0.20
------- ------- ------- ------- ------- -------
Total from investment operations $ 0.33 $ (0.14) $ 0.47 $ 0.94 $ 0.40 $ 0.64
------- ------- ------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.21) $ (0.42) $ (0.42) $ (0.41) $ (0.40) $ (0.44)
In excess of net investment come -- -- -- -- -- (0.00)++
------- ------- ------- ------- ------- -------
Total distributions declared to shareholders $ (0.21) $ (0.42) $ (0.42) $ (0.41) $ (0.40) $ (0.44)
------- ------- ------- ------- ------- -------
Net asset value - end of period $ 9.50 $ 9.38 $ 9.94 $ 9.89 $ 9.36 $ 9.36
------- ------- ------- ------- ------- -------
Total return 3.62%[2 dags] (1.37)% 4.80% 10.15% 4.33% 7.11%
Ratios (to average net assets)/
Supplemental data[sec]:
Expenses## 1.46%[dag] 1.46% 1.51% 1.56% 1.72% 1.28%
Net investment income 4.54%[dag] 4.41% 4.16% 4.26% 4.29% 4.67%
Portfolio turnover 10% 18% 6% 18% 17% 31%
Net assets at end of period (000 Omitted) $10,407 $10,786 $11,465 $10,717 $11,014 $11,475
[sec]Subject to reimbursement by the fund, the investment adviser voluntarily agreed under a temporary expense reimbursement
agreement to pay all of the fund's operating expenses, exclusive of management and distribution and service fees. In
consideration, the fund pays the investment adviser a reimbursement fee not greater than 0.40% of average daily net assets. In
addition, the investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. To the extent
actual expenses were over this limitation and the waivers had not been in place, the net investment income per share and the
ratios would have been:
Net investment income $ 0.20 $0.40 $ 0.40 $ 0.40 -- $ 0.40
Ratios (to average net assets):
Expenses## 1.66%[dag] 1.64% 1.63% 1.63% -- 1.71%
Net investment income 4.34%[dag] 4.23% 4.04% 4.19% -- 4.24%
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset agreements.
++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
33
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
New York Fund
------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended ear Ended March 31,
September 30, -----------------------------------------------------------
2000 2000 1999 1998 1997 1996
---------------------------------------------------------------------------
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.58 $ 11.27 $ 11.26 $ 10.60 $ 10.66 $ 10.49
--------- ------- -------- ------- ------- --------
Income from investment operations# -
Net investment income[sec] $ 0.27 $0.55 $ 0.56 $0.57 $0.55 $ 0.55
Net realized and unrealized gain (loss) on
investments 0.10 (0.69) 0.01 0.64 (0.06) 0.17
--------- ------- -------- ------- ------- --------
Total from investment operations $ 0.37 $ (0.14) $ 0.57 $1.21 $0.49 $ 0.72
--------- ------- -------- ------- ------- --------
Less distributions declared to shareholders -
From net investment income $ (0.28) $ (0.55) $ (0.56) $(0.55) $(0.55) $ (0.55)
In excess of net investment income -- -- (0.00)++++ -- -- (0.00)++++
--------- ------- -------- ------- ------- --------
Total distributions declared to shareholders $ (0.28) $ (0.55) $ (0.56) $(0.55) $(0.55) $ (0.55)
--------- ------- -------- ------- ------- --------
Net asset value - end of period $ 10.67 $ 10.58 $ 11.27 $ 11.26 $ 10.60 $ 10.66
--------- ------- -------- ------- ------- --------
Total return++ 3.44%[2 dags] (1.06)% 5.14% 11.59% 4.68% 6.98%
Ratios (to average net assets)/
Supplemental data[sec]:
Expenses## 0.87%[dag] 0.85% 0.93% 1.03% 1.11% 1.10%
Net investment income 5.16%[dag] 5.14% 4.93% 5.14% 5.18% 5.09%
Portfolio turnover 24% 38% 26% 41% 64% 102%
Net assets at end of period (000 Omitted) $99,971 $101,403 $116,767 $119,376 $121,588 $134,449
[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 $0.53 $ 0.55 $0.56 -- $ 0.54
Ratios (to average net assets):
Expenses## 1.07%[dag] 1.03% 1.05% 1.10% -- 1.20%
Net investment income 4.96%[dag] 4.96% 4.81% 5.07% -- 4.99%
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ 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.
++++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
34
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
New York Fund
---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
September 30, --------------------------------------------------------
2000 2000 1999 1998 1997 1996
------------------------------------------------------------------------
(Unaudited)
---------------------------------------------------------------------------------------------------------------------------------
Class B
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.58 $ 11.27 $ 11.26 $ 10.59 $ 10.66 $ 10.49
--------- ------- --------- -------- -------- --------
Income from investment operations# -
Net investment income[sec] $ 0.23 $0.47 $ 0.47 $0.49 $0.47 $ 0.47
Net realized and unrealized gain (loss) on
investments 0.10 (0.69) 0.01 0.64 (0.07) 0.17
--------- ------- --------- -------- -------- --------
Total from investment operations $ 0.33 $ (0.22) $ 0.48 $ 1.13 $0.40 $ 0.64
--------- ------- --------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.24) $ (0.47) $ (0.47) $ (0.46) $ (0.47) $ (0.47)
In excess of net investment income -- -- (0.00)++ -- -- (0.00)++
--------- ------- --------- -------- -------- --------
Total distributions declared to shareholders $ (0.24) $ (0.47) $ (0.47) $ (0.46) $ (0.47) $ (0.47)
--------- ------- --------- -------- -------- --------
Net asset value - end of period $ 10.67 $ 10.58 $ 11.27 $ 11.26 $ 10.59 $ 10.66
--------- ------- --------- -------- -------- --------
Total return 3.16%++ (1.89)% 4.46% 10.78% 3.77% 6.10%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.62%[dag] 1.60% 1.68% 1.78% 1.92% 1.92%
Net investment income 4.39%[dag] 4.38% 4.18% 4.39% 4.37% 4.27%
Portfolio turnover 24% 38% 26% 41% 64% 102%
Net assets at end of period (000 Omitted) $21,144 $20,224 $30,408 $ 26,618 $ 26,724 $28,068
[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 $0.45 $ 0.46 $ 0.48 -- --
Ratios (to average net assets):
Expenses## 1.82%[dag] 1.78% 1.80% 1.85% -- --
Net investment income 4.19%[dag] 4.20% 4.06% 4.32% -- --
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
35
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
North Carolina Fund
------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
September 30, -------------------------------------------------------------
2000 2000 1999 1998 1997 1996
-----------------------------------------------------------------------------
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $11.35 $ 12.14 $ 12.15 $ 11.56 $ 11.57 $ 11.42
-------- -------- -------- -------- -------- --------
Income from investment operations# -
Net investment income[sec] $ 0.29 $0.59 $0.59 $0.59 $ 0.59 $ 0.59
Net realized and unrealized gain (loss) on
investments 0.11 (0.80) (0.02) 0.59 (0.01) 0.15
-------- -------- -------- -------- -------- --------
Total from investment operations $ 0.40 $ (0.21) $0.57 $ 1.18 $ 0.58 $ 0.74
-------- -------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $(0.29) $ (0.58) $ (0.58) $ (0.59) $ (0.59) $ (0.59)
In excess of net investment income -- -- -- -- (0.00)++++ (0.00)++++
-------- -------- -------- -------- -------- --------
Total distributions declared to shareholders $(0.29) $ (0.58) $ (0.58) $ (0.59) $ (0.59) $ (0.59)
-------- -------- -------- -------- -------- --------
Net asset value - end of period $11.46 $ 11.35 $ 12.14 $ 12.15 $ 11.56 $ 11.57
-------- -------- -------- -------- -------- --------
Total return++ 3.62%[2 dags] (1.67)% 4.76% 10.36% 5.09% 6.56%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.90%+ 0.91% 0.98% 1.03% 1.08% 1.17%
Net investment income 5.13%+ 5.07% 4.76% 4.92% 5.05% 5.04%
Portfolio turnover 16% 9% 30% 24% 33% 30%
Net assets at end of period (000 Omitted) $299,767 $310,624 $364,576 $380,595 $377,112 $409,347
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.28 $ 0.57 $ 0.57 $ 0.58 $ 0.58 --
Ratios (to average net assets):
Expenses## 1.10%+ 1.09% 1.10% 1.13% 1.15% --
Net investment income 4.93%+ 4.89% 4.64% 4.82% 4.98% --
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ 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.
++++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
36
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
North Carolina Fund
------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
September 30, -------------------------------------------------------------
2000 2000 1999 1998 1997 1996
--------------------------------------------------------------------------------------
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.35 $ 12.13 $ 12.15 $ 11.55 $ 11.56 $ 11.42
------- ------- -------- -------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.25 $0.51 $0.50 $0.51 $ 0.50 $ 0.50
Net realized and unrealized gain (loss) on
investments 0.11 (0.78) (0.02) 0.60 0.00 0.14
------- ------- -------- -------- ------- -------
Total from investment operations $ 0.36 $ (0.27) $ 0.48 $ 1.11 $ 0.50 $ 0.64
------- ------- -------- -------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.26) $ (0.51) $ (0.50) $ (0.51) $ (0.51) $ (0.50)
In excess of net investment income -- -- -- -- (0.00)++ (0.00)++
------- ------- -------- -------- ------- -------
Total distributions declared to shareholders $ (0.26) $ (0.51) $ (0.50) $ (0.51) $ (0.51) $ (0.50)
------- ------- -------- -------- ------- -------
Net asset value - end of period $ 11.45 $ 11.35 $ 12.13 $ 12.15 $ 11.55 $ 11.56
------- ------- -------- -------- ------- -------
Total return 3.19%[2 dags](2.22)% 4.00% 9.75% 4.36% 5.70%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.55%[dag] 1.56% 1.63% 1.68% 1.78% 1.90%
Net investment income 4.48%[dag] 4.42% 4.11% 4.27% 4.36% 4.30%
Portfolio turnover 16% 9% 30% 24% 33% 30%
Net assets at end of period (000 Omitted) $48,264 $48,794 $ 52,033 $ 44,238 $39,035 $33,847
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.24 $ 0.49 $ 0.49 $ 0.50 $ 0.49 --
Ratios (to average net assets):
Expenses## 1.75%[dag] 1.74% 1.75% 1.78% 1.85% --
Net investment income 4.28%[dag] 4.24% 3.99% 4.17% 4.29% --
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
37
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
North Carolina Fund
------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
September 30, -------------------------------------------------------------
2000 2000 1999 1998 1997 1996
--------------------------------------------------------------------------------------
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.35 $ 12.13 $ 12.15 $ 11.55 $ 11.56 $ 11.41
------- ------- -------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.25 $0.51 $0.50 $0.51 $ 0.52 $ 0.51
Net realized and unrealized gain (loss) on
investments 0.11 (0.78) (0.02) 0.60 (0.02) 0.15
------- ------- -------- ------- ------- -------
Total from investment operations $ 0.36 $ (0.27) $ 0.48 $ 1.11 $ 0.50 $ 0.66
------- ------- -------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.26) $ (0.51) $ (0.50) $ (0.51) $ (0.51) $(0.51)
In excess of net investment income -- -- -- -- (0.00)++ (0.00)++
------- ------- -------- ------- ------- -------
Total distributions declared to shareholders $ (0.26) $ (0.51) $ (0.50) $ (0.51) $ (0.51) $ (0.51)
------- ------- -------- ------- ------- -------
Net asset value - end of period $ 11.45 $ 11.35 $ 12.13 $ 12.15 $ 11.55 $ 11.56
------- ------- -------- ------- ------- -------
Total return 3.19%[2 dags] (2.22)% 4.00% 9.75% 4.41% 5.87%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.55%[dag] 1.56% 1.63% 1.68% 1.73% 1.83%
Net investment income 4.47%[dag] 4.42% 4.11% 4.27% 4.40% 4.38%
Portfolio turnover 16% 9% 30% 24% 33% 30%
Net assets at end of period (000 Omitted) $16,225 $14,206 $ 14,084 $ 8,143 $ 7,789 $ 9,352
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.24 $ 0.49 $ 0.49 $ 0.50 $ 0.51 --
Ratios (to average net assets):
Expenses## 1.75%+ 1.74% 1.75% 1.78% 1.80% --
Net investment income 4.27%+ 4.24% 3.99% 4.17% 4.33% --
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
38
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Fund
------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
September 30, -------------------------------------------------------------
2000 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.36 $ 9.90 $ 9.82 $ 9.26 $ 9.37 $ 9.29
------- ------- ------ ------- -------- -------
Income from investment operations# -
Net investment income[sec] $ 0.25 $ 0.50 $ 0.48 $ 0.50 $ 0.53 $ 0.54
Net realized and unrealized gain (loss) on
investments 0.10 (0.55) 0.08 0.56 (0.10) 0.09
------- ------- ------ ------- -------- -------
Total from investment operations $ 0.35 $ (0.05) $ 0.56 $ 1.06 $ 0.43 $ 0.63
------- ------- ------ ------- -------- -------
Less distributions declared to shareholders -
From net investment income $ (0.25) $ (0.49) $ (0.48) $ (0.50) $ (0.54) $ (0.55)
In excess of net investment income -- -- -- -- (0.00)++++ --
------- ------- ------- ------- -------- -------
Total distributions declared to shareholders $ (0.25) $ (0.49) $ (0.48) $ (0.50) $ (0.54) $ (0.55)
------- ------- ------- ------- -------- -------
Net asset value - end of period $ 9.46 $ 9.36 $ 9.90 $ 9.82 $ 9.26 $ 9.37
------- ------- ------- ------- -------- -------
Total return++ 3.78%[2 dags] (0.45)% 5.85% 11.65% 4.67% 6.85%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.36%[dag] 0.38% 0.45% 0.40% 0.10% 0.10%
Net investment income 5.26%[dag] 5.19% 4.85% 5.15% 5.66% 5.76%
Portfolio turnover 5% 48% 8% 31% 42% 40%
Net assets at end of period (000 Omitted) $27,723 $25,494 $21,695 $18,918 $ 16,933 $18,030
[sec]Subject to reimbursement by the fund, the investment adviser voluntarily agreed under a temporary expense reimbursement
agreement to pay all of the fund's operating expenses, exclusive of management and distribution and service fees. In
consideration, the fund pays the investment adviser a reimbursement fee not greater than 0.40% of average daily net assets. The
investment adviser has agreed to waive 0.40% of the reimbursement fee for an indefinite period of time. In addition, the
investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. To the extent actual expenses
were over this limitation and the waiver had not been in place, the net investment income per share and the ratios would have
been:
Net investment income $ 0.22 $ 0.44 $ 0.43 $ 0.44 $ 0.45 $ 0.45
Ratios (to average net assets):
Expenses## 0.96%[dag] 0.91% 0.93% 0.99% 0.95% 1.00%
Net investment income 4.66%[dag] 4.66% 4.37% 4.56% 4.81% 4.86%
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions for certain expense offset arrangements.
++ 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.
++++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
39
<PAGE>
Financial Statements - continued
Financial Highlights - continued
----------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------------------
Pennsylvania Fund
----------------------------------------------------------------------
Six Months
Ended
September 30,
2000
--------------
(Unaudited)
--------------
Class B
--------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.38
---------
Income from investment operations# -
Net investment income[sec] $ 0.21
Net realized and unrealized gain (loss) on
investments 0.11
---------
Total from investment operations $ 0.32
---------
Less distributions declared to shareholders -
From net investment income $ (0.21)
In excess of net investment income --
---------
Total distributions declared to shareholders $ (0.21)
---------
Net asset value - end of period $ 9.49
---------
Total return 3.47%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.15%[dag]
Net investment income 4.47%[dag]
Portfolio turnover 5%
Net assets at end of period (000 Omitted) $18,450
[sec] Subject to reimbursement by the fund, the investment adviser voluntarily agreed under a temporary expense reimbursement
agreement to pay all of the fund's operating expenses, exclusive of management and distribution and service fees. In
consideration, the fund pays the investment adviser a reimbursement fee not greater than 0.40% of average daily net assets.
The investment adviser has agreed to waive 0.40% of the reimbursement fee for an indefinite period of time. In addition, the
investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. To the extent actual expenses
were over this limitation and the waiver had not been in place, the net investment income per share and the ratios would have
been:
Net investment income $ 0.18
Ratios (to average net assets):
Expenses## 1.75%[dag]
Net investment income 3.87%[dag]
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions for certain expense offset
arrangements.
++ Per share amounts was less than $0.01.
<CAPTION>
Year Ended March 31,
--------------------------------------------------------------
2000 1999 1998 1997 1996
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.92 $ 9.84 $ 9.28 $ 9.39 $ 9.29
------- ------ ------ --------- -------
Income from investment operations# -
Net investment income[sec] $0.42 $ 0.41 $ 0.42 $ 0.46 $ 0.50
Net realized and unrealized gain (loss) on
investments (0.55) 0.08 0.56 (0.11) 0.07
------- ------ ------ --------- -------
Total from investment operations $ (0.13) $ 0.49 $ 0.98 $ 0.35 $ 0.57
------- ------ ------ --------- -------
Less distributions declared to shareholders -
From net investment income $ (0.41) $ (0.41) $ (0.42) $ (0.46) $ (0.47)
In excess of net investment income -- -- -- (0.00)++ --
------- ------- ------- --------- -------
Total distributions declared to shareholders $ (0.41) $ (0.41) $ (0.42) $ (0.46) $ (0.47)
------- ------- ------- --------- -------
Net asset value - end of period $9.38 $ 9.92 $ 9.84 $ 9.28 $ 9.39
------- ------- ------- --------- -------
Total return (1.25)% 5.02% 10.76% 3.83% 6.23%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.19% 1.23% 1.19% 0.90% 0.88%
Net investment income 4.35% 4.07% 4.36% 4.86% 4.98%
Portfolio turnover 48% 8% 31% 42% 40%
Net assets at end of period (000 Omitted) $17,496 $23,983 $20,551 $24,898 $24,170
[sec] Subject to reimbursement by the fund, the investment adviser voluntarily agreed under a temporary expense reimbursement
agreement to pay all of the fund's operating expenses, exclusive of management and distribution and service fees. In
consideration, the fund pays the investment adviser a reimbursement fee not greater than 0.40% of average daily net assets.
The investment adviser has agreed to waive 0.40% of the reimbursement fee for an indefinite period of time. In addition, the
investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. To the extent actual expenses
were over this limitation and the waiver had not been in place, the net investment income per share and the ratios would have
been:
Net investment income $ 0.37 $ 0.33 $ 0.36 $ 0.38 $ 0.41
Ratios (to average net assets):
Expenses## 1.72% 1.71% 1.78% 1.75% 1.85%
Net investment income 3.82% 3.59% 3.77% 4.01% 4.01%
[dag] Annualized.
[2 dag] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions for certain expense offset arrangements.
++ Per share amounts was less than $0.01.
</TABLE>
See notes to financial statements.
40
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
South Carolina Fund
------------------------------------------------------------------------------------
Six Months Year Ended
Ended March 31,
September 30, --------------
2000 2000
----------------------------
(Unaudited)
----------------------------
Class A
----------------------------
<S> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.58 $ 12.48
--------- -------
Income from investment operations# -
Net investment income[sec] $ 0.31 $ 0.58
Net realized and unrealized gain (loss) on
investments 0.10 (0.86)
--------- -------
Total from investment operations $ 0.41 $ (0.28)
--------- -------
Less distributions declared to shareholders -
From net investment income $ (0.29) $ (0.58)
From net realized gain on investments -- $ (0.03)
In excess of net investment income -- --
In excess of net realized gain on investments -- (0.01)
--------- -------
Total distributions declared to shareholders $ (0.29) $ (0.62)
--------- -------
Net asset value - end of period $ 11.70 $ 11.58
--------- -------
Total return++ 3.61%++ (2.27)%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.95%[dag] 0.94%
Net investment income 5.27%[dag] 4.91%
Portfolio turnover 22% 18%
Net assets at end of period (000 Omitted) $116,050 $121,064
[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 $ 0.29 $ 0.56
Ratios (to average net assets):
Expenses## 1.15%[dag] 1.12%
Net investment income 5.07%[dag] 4.73%
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ 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.
++++ Per share amount was less than $0.01.
<CAPTION>
Year Ended March 31,
---------------------------------------------------------------------
1999 1998 1997 1996
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.52 $ 11.88 $ 11.97 $ 11.86
---------- ---------- ------- ----------
Income from investment operations# -
Net investment income[sec] $ 0.57 $ 0.60 $ 0.62 $ 0.62
Net realized and unrealized gain (loss) on
investments (0.04) 0.64 (0.10) 0.11
---------- ---------- -------- ----------
Total from investment operations $ 0.53 $ 1.24 $ 0.52 $ 0.73
---------- ---------- -------- ----------
Less distributions declared to shareholders -
From net investment income $ (0.57) $ (0.60) $ (0.61) $ (0.62)
From net realized gain on investments -- -- -- --
In excess of net investment income (0.00)++++ (0.00)++++ -- (0.00)++++
In excess of net realized gain on investments -- -- -- --
---------- ---------- -------- ----------
Total distributions declared to shareholders $ (0.57) $ (0.60) $ (0.61) $ (0.62)
---------- ---------- -------- ----------
Net asset value - end of period $ 12.48 $ 12.52 $ 11.88 $ 11.97
---------- ---------- -------- ----------
Total return++ 4.33% 10.62% 4.46% 6.20%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.02% 1.06% 1.10% 1.20%
Net investment income 4.55% 4.86% 5.17% 5.10%
Portfolio turnover 25% 29% 13% 18%
Net assets at end of period (000 Omitted) $145,787 $148,820 $148,908 $166,801
[sec] The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.56 $ 0.59 $0.16 --
Ratios (to average net assets):
Expenses## 1.14% 1.16% 1.16% --
Net investment income 4.43% 4.76% 5.11% --
[dag]Annualized.
{2 dags]Not annualized.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset arrangements.
++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.
++++Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
41
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
-------------------------------------------------------------------
South Carolina Fund
-------------------------------------------------------------------
Six Months
Ended
September 30,
2000
--------------
(Unaudited)
--------------
Class B
--------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.58
---------
Income from investment operations# -
Net investment income[sec] $ 0.27
Net realized and unrealized gain (loss) on
investments 0.09
---------
Total from investment operations $ 0.36
---------
Less distributions declared to shareholders -
From net investment income $ (0.25)
From net realized gain on investments --
In excess of net investment income --
In excess of net realized gain on investments --
---------
Total distributions declared to shareholders $ (0.25)
---------
Net asset value - end of period $ 11.69
---------
Total return 3.19%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.60%[dag]
Net investment income 4.61%[dag]
Portfolio turnover 22%
Net assets at end of period (000 Omitted) $30,595
[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## 1.80%[dag]
Net investment income 4.41%[dag]
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
++ Per share amount was less than $0.01.
<CAPTION>
Year Ended March 31,
--------------------------------------------------------------------
2000 1999 1998 1997 1996
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.47 $ 12.52 $ 11.88 $ 11.97 $ 11.86
------- --------- --------- ------- ----------
Income from investment operations# -
Net investment income[sec] $0.51 $ 0.48 $ 0.52 $0.54 $ 0.52
Net realized and unrealized gain (loss) on
investments (0.86) (0.04) 0.64 (0.10) 0.12
------- --------- --------- ------- ----------
Total from investment operations $ (0.35) $ 0.44 $ 1.16 $0.44 $ 0.64
------- --------- --------- ------- ----------
Less distributions declared to shareholders -
From net investment income $ (0.50) $ (0.49) $ (0.52) $(0.53) $ (0.53)
From net realized gain on investments $ (0.03) -- -- -- --
In excess of net investment income -- (0.00)++ (0.00)++ -- (0.00)++
In excess of net realized gain on investments (0.01) -- -- -- --
------- --------- --------- -------- ----------
Total distributions declared to shareholders $ (0.54) $ (0.49) $ (0.52) $(0.53) $ (0.53)
------- --------- --------- -------- ----------
Net asset value - end of period $ 11.58 $ 12.47 $ 12.52 $11.88 $ 11.97
------- --------- --------- -------- ----------
Total return (2.82)% 3.57% 9.91% 3.73% 5.43%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.59% 1.67% 1.71% 1.79% 1.92%
Net investment income 4.26% 3.90% 4.21% 4.48% 4.35%
Portfolio turnover 18% 25% 29% 13% 18%
Net assets at end of period (000 Omitted) $31,532 $36,226 $28,086 $ 21,871 $18,420
[sec] The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.48 $ 0.47 $ 0.51 $ 0.53 --
Ratios (to average net assets):
Expenses## 1.77% 1.79% 1.81% 1.85% --
Net investment income 4.08% 0.37% 4.11% 4.42% --
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
42
<PAGE>
Financial Statements - continued
Financial Highlights - continued
------------------------------------------------------------------
<TABLE>
<CAPTION>
Tennessee Fund
-------------------------------------------------------------------
Six Months
Ended
September 30,
2000
--------------
(Unaudited)
--------------
Class A
--------------
<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] $ 0.25
Net realized and unrealized gain (loss) on
investments 0.10
---------
Total from investment operations $ 0.35
---------
Less distributions declared to shareholders -
From net investment income $ (0.25)
From net realized gain on investments --
In excess of net investment income --
In excess of net realized gain on investments --
---------
Total distributions declared to shareholders $ (0.25)
---------
Net asset value - end of period $ 10.21
---------
Total return++ 3.52%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.96%[dag]
Net investment income 4.95%[dag]
Portfolio turnover 8%
Net assets at end of period (000 Omitted) $97,406
[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## 1.16%[dag]
Net investment income 4.75%[dag]
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
++ 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.
++++ Per share amount was less than $0.01.
<CAPTION>
Year Ended March 31,
---------------------------------------------------------
2000 1999 1998 1997
------------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.87 $ 10.91 $ 10.32 $ 10.40
---------- -------- -------- --------
Income from investment operations# -
Net investment income[sec] $ 0.50 $ 0.53 $0.53 $0.55
Net realized and unrealized gain (loss) on
investments (0.69) (0.02) 0.60 (0.09)
---------- -------- -------- --------
Total from investment operations $ (0.19) $ 0.51 $1.13 $0.46
---------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.50) $ (0.52) $ (0.53) $ (0.54)
From net realized gain on investments (0.07) (0.03) -- --
In excess of net investment income -- -- (0.01) --
In excess of net realized gain on investments (0.00)++++ -- -- --
---------- -------- -------- --------
Total distributions declared to shareholders $ (0.57) $ (0.55) $ (0.54) $ (0.54)
---------- -------- -------- --------
Net asset value - end of period $ 10.11 $ 10.87 $ 10.91 $ 10.32
---------- -------- -------- --------
Total return++ (1.75)% 4.80% 11.11% 4.48%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.96% 1.02% 1.07% 1.10%
Net investment income 4.80% 4.79% 4.97% 5.26%
Portfolio turnover 20% 16% 26% 20%
Net assets at end of period (000 Omitted) $100,251 $117,296 $108,871 $108,000
[sec] The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this
fee had been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.48 $ 0.51 $ 0.52 $0.54
Ratios (to average net assets):
Expenses## 1.14% 1.14% 1.17% 1.16%
Net investment income 4.62% 4.67% 4.87% 5.20%
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ 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.
++++ Per share amount was less than $0.01.
<CAPTION>
Year Ended March 31,
--------------------
1996
--------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.27
----------
Income from investment operations# -
Net investment income[sec] $ 0.54
Net realized and unrealized gain (loss) on
investments 0.13
----------
Total from investment operations $ 0.67
----------
Less distributions declared to shareholders -
From net investment income $ (0.54)
From net realized gain on investments --
In excess of net investment income (0.00)++++
In excess of net realized gain on investments --
----------
Total distributions declared to shareholders $ (0.54)
----------
Net asset value - end of period $ 10.40
----------
Total return++ 6.66%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.21%
Net investment income 5.18%
Portfolio turnover 20%
Net assets at end of period (000 Omitted) $109,811
[sec] The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income --
Ratios (to average net assets):
Expenses## --
Net investment income --
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
++ 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.
++++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
43
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Tennessee Fund
-------------------------------------------------------------------
Six Months
Ended
September 30,
2000
--------------
(Unaudited)
--------------
Class B
--------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.10
---------
Income from investment operations# -
Net investment income[sec] $ 0.22
Net realized and unrealized gain (loss) on
investments 0.10
---------
Total from investment operations $ 0.32
---------
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 $ 10.20
---------
Total return 3.19%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.61%[dag]
Net investment income 4.29%[dag]
Portfolio turnover 8%
Net assets at end of period (000 Omitted) $21,617
[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 daily net assets):
Expenses## 1.81%[dag]
Net investment income 4.09%[dag]
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
++ Per share amount was less than $0.01.
<CAPTION>
Year Ended March 31,
-----------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.86 $ 10.91 $ 10.31 $ 10.39 $ 10.26
--------- ------- ------- ------- ---------
Income from investment operations# -
Net investment income[sec] $ 0.43 $0.45 $ 0.46 $ 0.47 $ 0.46
Net realized and unrealized gain (loss) on
investments (0.69) (0.02) 0.61 (0.09) 0.14
--------- ------- ------- ------- ---------
Total from investment operations $ (0.26) $0.43 $ 1.07 $0.38 $ 0.60
--------- ------- ------- ------- ---------
Less distributions declared to shareholders -
From net investment income $ (0.43) $ (0.45) $ (0.46) $ (0.46) $ (0.47)
From net realized gain on investments (0.07) (0.03) -- -- --
In excess of net investment income -- -- (0.01) -- (0.00)++
In excess of net realized gain on investments (0.00)++ -- -- -- --
--------- -------- -------- -------- ---------
Total distributions declared to shareholders $ (0.50) $ (0.48) $ (0.47) $ (0.46) $(0.47)
--------- -------- -------- -------- ---------
Net asset value - end of period $ 10.10 $ 10.86 $ 10.91 $ 10.31 $ 10.39
--------- -------- -------- -------- ---------
Total return (2.39)% 4.04% 10.51% 3.76% 5.89%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.61% 1.67% 1.72% 1.79% 1.93%
Net investment income 4.15% 4.14% 4.32% 4.57% 4.43%
Portfolio turnover 20% 16% 26% 20% 20%
Net assets at end of period (000 Omitted) $21,321 $ 22,765 $18,198 $14,436 $12,935
[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 $ 0.41 $ 0.44 $ 0.45 $ 0.46 --
Ratios (to average daily net assets):
Expenses## 1.79% 1.79% 1.82% 1.85% --
Net investment income 3.97% 4.02% 4.22% 4.51% --
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
44
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
----------------------------------------------------------------------
Virginia Fund
----------------------------------------------------------------------
Six Months
Ended
September 30,
2000
--------------
(Unaudited)
--------------
Class A
--------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.91
---------
Income from investment operations# -
Net investment income[sec] $ 0.28
Net realized and unrealized gain (loss) on
investments 0.09
---------
Total from investment operations $ 0.37
---------
Less distributions declared to shareholders -
From net investment income $ (0.28)
In excess of net investment income --
---------
Total distributions declared to shareholders $ (0.28)
---------
Net asset value - end of period $ 11.00
---------
Total return++ 3.47%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.92%[dag]
Net investment income 5.17%[dag]
Portfolio turnover 16%
Net assets at end of period (000 Omitted) $300,709
[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## 1.12%[dag]
Net investment income 4.97%[dag]
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
++ 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.
++++ Per share amount was less than $0.01.
<CAPTION>
Year Ended March 31,
----------------------------------------------------------
2000 1999 1998 1997
------------- ------------ ------------------ ------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.60 $ 11.61 $ 11.06 $ 11.21
-------- -------- --------- -------
Income from investment operations# -
Net investment income[sec] $0.57 $ 0.55 $ 0.57 $ 0.59
Net realized and unrealized gain (loss) on
investments (0.70) (0.01) 0.55 (0.15)
-------- -------- ---------- --------
Total from investment operations $ (0.13) $ 0.54 $ 1.12 $ 0.44
-------- -------- ---------- --------
Less distributions declared to shareholders -
From net investment income $ (0.56) $ (0.55) $ (0.57) $ (0.59)
In excess of net investment income -- -- (0.00)++++ --
-------- -------- ---------- --------
Total distributions declared to shareholders $ (0.56) $ (0.55) $ (0.57) $ (0.59)
-------- -------- ---------- --------
Net asset value - end of period $ 10.91 $ 11.60 $ 11.61 $ 11.06
-------- -------- ---------- --------
Total return++ (1.09)% 4.71% 10.32% 3.97%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.91% 0.99% 1.03% 1.08%
Net investment income 5.07% 4.73% 4.97% 5.27%
Portfolio turnover 13% 24% 39% 42%
Net assets at end of period (000 Omitted) $311,934 $365,880 $373,024 $379,185
[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 $ 0.54 $ 0.56 $ 0.58
Ratios (to average net assets):
Expenses## 1.09% 1.11% 1.13% 1.14%
Net investment income 4.89% 4.61% 4.87% 5.21%
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ 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.
++++ Per share amount was less than $0.01.
<CAPTION>
Year Ended March 31,
--------------------
1996
--------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.09
----------
Income from investment operations# -
Net investment income[sec] $ 0.59
Net realized and unrealized gain (loss) on
investments 0.13
----------
Total from investment operations $ 0.72
----------
Less distributions declared to shareholders -
From net investment income $ (0.60)
In excess of net investment income (0.00)++++
----------
Total distributions declared to shareholders $ (0.60)
----------
Net asset value - end of period $ 11.21
----------
Total return++ 6.52%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.18%
Net investment income 5.20%
Portfolio turnover 42%
Net assets at end of period (000 Omitted) $418,408
[sec] The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income --
Ratios (to average net assets):
Expenses## --
Net investment income --
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
++ 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.
++++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
45
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Virginia Fund
-------------------------------------------------------------------
Six Months
Ended
September 30,
2000
--------------
(Unaudited)
--------------
Class B
--------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.91
---------
Income from investment operations# -
Net investment income[sec] $ 0.25
Net realized and unrealized gain (loss) on
investments 0.08
---------
Total from investment operations $ 0.33
---------
Less distributions declared to shareholders -
From net investment income $ (0.25)
In excess of net investment income --
---------
Total distributions declared to shareholders $ (0.25)
---------
Net asset value - end of period $ 10.99
---------
Total return 3.04%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.57%[dag]
Net investment income 4.51%[dag]
Portfolio turnover 16%
Net assets at end of period (000 Omitted) $28,198
[sec] The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.24
Ratios (to average net assets):
Expenses## 1.77%[dag]
Net investment income 4.31%[dag]
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
++ Per share amount was less than $0.01.
<CAPTION>
Year Ended March 31,
--------------------------------------------------------------
2000 1999 1998 1997 1996
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.60 $ 11.61 $ 11.06 $ 11.21 $ 11.08
------- ------- ------- ------- ---------
Income from investment operations# -
Net investment income[sec] $0.49 $0.47 $0.49 $ 0.51 $ 0.51
Net realized and unrealized gain (loss) on
investments (0.70) (0.01) 0.56 (0.15) 0.13
------- ------- ------- ------- ---------
Total from investment operations $ (0.21) $0.46 $1.05 $ 0.36 $ 0.64
------- ------- ------- ------- ---------
Less distributions declared to shareholders -
From net investment income $ (0.48) $(0.47) $ (0.49) $ (0.51) $ (0.51)
In excess of net investment income -- -- (0.01) -- (0.00)++
------- -------- -------- -------- ---------
Total distributions declared to shareholders $ (0.48) $(0.47) $ (0.50) $ (0.51) $ (0.51)
------- -------- -------- -------- ---------
Net asset value - end of period $ 10.91 $ 11.60 $ 11.61 $ 11.06 $ 11.21
------- -------- -------- -------- ---------
Total return (1.73)% 4.04% 9.61% 3.24% 5.85%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.56% 1.64% 1.68% 1.78% 1.90%
Net investment income 4.42% 4.08% 4.32% 4.57% 4.46%
Portfolio turnover 13% 24% 39% 42% 42%
Net assets at end of period (000 Omitted) $29,316 $ 35,644 $ 32,902 $30,567 $28,420
[sec] The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $0.47 $ 0.46 $ 0.48 $ 0.50 --
Ratios (to average net assets):
Expenses## 1.74% 1.76% 1.78% 1.84% --
Net investment income 4.24% 3.96% 4.22% 4.51% --
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
46
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
--------------------------------------------------------------------
Virginia Fund
--------------------------------------------------------------------
Six Months
Ended
September 30,
2000
--------------
(Unaudited)
--------------
Class C
--------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.91
---------
Income from investment operations# -
Net investment income[sec] $ 0.25
Net realized and unrealized gain (loss) on
investments 0.09
---------
Total from investment operations $ 0.34
---------
Less distributions declared to shareholders -
From net investment income $ (0.25)
In excess of net investment income --
---------
Total distributions declared to shareholders $ (0.25)
---------
Net asset value - end of period $ 11.00
---------
Total return 3.13%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.57%[dag]
Net investment income 4.51%[dag]
Portfolio turnover 16%
Net assets at end of period (000 Omitted) $ 5,377
[sec] The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.24
Ratios (to average net assets):
Expenses## 1.77%[dag]
Net investment income 4.31%[dag]
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
++ Per share amount was less than $0.01.
<CAPTION>
Year Ended March 31,
--------------------------------------------------------------
2000 1999 1998 1997 1996
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.60 $11.61 $11.06 $11.21 $ 11.07
------- ------- ------- ------- ---------
Income from investment operations# -
Net investment income[sec] $0.49 $ 0.47 $ 0.49 $ 0.52 $ 0.51
Net realized and unrealized gain (loss) on
investments (0.70) (0.01) 0.56 (0.16) 0.15
------- ------- ------- ------- ---------
Total from investment operations $ (0.21) $ 0.46 $ 1.05 $ 0.36 $ 0.66
------- ------- ------- ------- ---------
Less distributions declared to shareholders -
From net investment income $ (0.48) $(0.47) $(0.49) $(0.51) $ (0.52)
In excess of net investment income -- -- (0.01) -- (0.00)++
------- -------- -------- -------- ---------
Total distributions declared to shareholders $ (0.48) $(0.47) $(0.50) $(0.51) $ (0.52)
------- -------- -------- -------- ---------
Net asset value - end of period $ 10.91 $11.60 $11.61 $11.06 $ 11.21
------- -------- -------- -------- ---------
Total return (1.73)% 4.04% 9.61% 3.30% 6.02%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.56% 1.64% 1.68% 1.72% 1.83%
Net investment income 4.42% 4.08% 4.32% 4.63% 4.53%
Portfolio turnover 13% 24% 39% 42% 42%
Net assets at end of period (000 Omitted) $ 5,171 $6,523 $3,082 $3,182 $ 3,366
[sec] The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.47 $ 0.46 $ 0.48 $ 0.51 --
Ratios (to average net assets):
Expenses## 1.74% 1.76% 1.78% 1.78% --
Net investment income 4.24% 3.96% 4.22% 4.57% --
[dag]Annualized.
[2 dags]Not annualized.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset arrangements.
++Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
47
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
-------------------------------------------------------------------
West Virginia Fund
-------------------------------------------------------------------
Six Months
Ended
September 30,
2000
--------------
(Unaudited)
--------------
Class A
--------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.95
---------
Income from investment operations# -
Net investment income[sec] $ 0.29
Net realized and unrealized gain (loss) on
investments 0.12
---------
Total from investment operations $ 0.41
---------
Less distributions declared to shareholders -
From net investment income $ (0.29)
In excess of net investment income --
---------
Total distributions declared to shareholders $ (0.29)
---------
Net asset value - end of period $ 11.07
---------
Total return++ 3.76%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.96%[dag]
Net investment income 5.21%[dag]
Portfolio turnover 8%
Net assets at end of period (000 Omitted) $114,954
[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## 1.16%[dag]
Net investment income 5.01%[dag]
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
++ 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.
++++ Per share amount was less than $0.01.
<CAPTION>
Year Ended March 31,
-----------------------------------------------------------
2000 1999 1998 1997
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.75 $ 11.77 $ 11.31 $ 11.33
------- ---------- ------- ----------
Income from investment operations# -
Net investment income[sec] $ 0.57 $ 0.56 $ 0.58 $ 0.60
Net realized and unrealized gain (loss) on
investments (0.80) (0.01) 0.47 (0.02)
------- ---------- ------- ----------
Total from investment operations $ (0.23) $ 0.55 $ 1.05 $ 0.58
------- ---------- ------- ----------
Less distributions declared to shareholders -
From net investment income $ (0.57) $ (0.57) $ (0.58) $(0.60)
In excess of net investment income -- (0.00)++++ (0.01) --
------- ---------- -------- ----------
Total distributions declared to shareholders $ (0.57) $ (0.57) $ (0.59) $ (0.60)
------- ---------- -------- ----------
Net asset value - end of period $ 10.95 $ 11.75 $ 11.77 $ 11.31
------- ---------- -------- ----------
Total return++ (1.89)% 4.73% 9.42% 5.20%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.95% 1.02% 1.10% 1.17%
Net investment income 5.13% 4.78% 4.98% 5.28%
Portfolio turnover 30% 13% 17% 21%
Net assets at end of period (000 Omitted) $117,174 $133,456 $130,002 $126,107
[sec] The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.55 $ 0.55 $ 0.57 --
Ratios (to average net assets):
Expenses## 1.13% 1.14% 1.17% --
Net investment income 4.95% 4.66% 4.91% --
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ 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.
++++ Per share amount was less than $0.01.
<CAPTION>
Year Ended March 31,
---------------------
1996
---------------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.21
----------
Income from investment operations# -
Net investment income[sec] $ 0.61
Net realized and unrealized gain (loss) on
investments 0.12
----------
Total from investment operations $ 0.73
----------
Less distributions declared to shareholders -
From net investment income $ (0.61)
In excess of net investment income (0.00)++++
----------
Total distributions declared to shareholders $ (0.61)
----------
Net asset value - end of period $ 11.33
----------
Total return++ 6.58%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.22%
Net investment income 5.30%
Portfolio turnover 11%
Net assets at end of period (000 Omitted) $134,514
[sec] The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by the
fund, the net investment income per share and the ratios would have been:
Net investment income --
Ratios (to average net assets):
Expenses## --
Net investment income --
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
++ 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.
++++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
48
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
--------------------------------------------------------------------
West Virginia Fund
--------------------------------------------------------------------
Six Months
Ended
September 30,
2000
--------------
(Unaudited)
--------------
Class B
--------------
<S> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.94
---------
Income from investment operations# -
Net investment income[sec] $ 0.25
Net realized and unrealized gain (loss) on
investments 0.13
---------
Total from investment operations $ 0.38
---------
Less distributions declared to shareholders -
From net investment income $ (0.25)
In excess of net investment income --
---------
Total distributions declared to shareholders $ (0.25)
---------
Net asset value - end of period $ 11.07
---------
Total return 3.52%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.61%[dag]
Net investment income 4.56%[dag]
Portfolio turnover 8%
Net assets at end of period (000 Omitted) $14,907
[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## 1.81%+
Net investment income 4.36%+
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
++ Per share amount was less than $0.01.
<CAPTION>
Year Ended March 31,
-----------------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data
(for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.74 $ 11.77 $ 11.31 $ 11.33 $ 11.21
------- --------- --------- --------- ----------
Income from investment operations# -
Net investment income[sec] $0.50 $ 0.49 $ 0.51 $ 0.52 $ 0.52
Net realized and unrealized gain (loss) on
investments (0.80) (0.03) 0.46 (0.02) 0.12
------- --------- --------- --------- ----------
Total from investment operations $ (0.30) $ 0.46 $ 0.97 $ 0.50 $ 0.64
------- --------- --------- --------- ----------
Less distributions declared to shareholders -
From net investment income $ (0.50) $ (0.49) $ (0.51) $ (0.52) $ (0.52)
In excess of net investment income -- (0.00)++ (0.00)++ -- (0.00)++
------- --------- --------- ---------- ----------
Total distributions declared to shareholders $ (0.50) $ (0.49) $ (0.51) $ (0.52) $ (0.52)
------- --------- --------- ---------- ----------
Net asset value - end of period $ 10.94 $ 11.74 $ 11.77 $ 11.31 $ 11.33
------- --------- --------- ---------- ----------
Total return (2.53)% 3.97% 8.72% 4.47% 5.81%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.60% 1.67% 1.75% 1.87% 1.94%
Net investment income 4.48% 4.13% 4.33% 4.57% 4.56%
Portfolio turnover 30% 13% 17% 21% 11%
Net assets at end of period (000 Omitted) $14,727 $17,166 $15,472 $13,587 $12,647
[sec] The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.48 $ 0.48 $ 0.50 -- --
Ratios (to average net assets):
Expenses## 1.78% 1.79% 1.82% -- --
Net investment income 4.30% 4.01% 4.26% -- --
[dag] Annualized.
[2 dags] Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
++ Per share amount was less than $0.01.
</TABLE>
See notes to financial statements.
49
<PAGE>
Notes to Financial Statements (Unaudited)
(1) Business and Organization Business and Organization
MFS Mississippi Municipal Bond Fund (Mississippi Fund), MFS New York Municipal
Bond Fund (New York Fund), MFS North Carolina Municipal Bond Fund (North
Carolina Fund), MFS Pennsylvania Municipal Bond Fund (Pennsylvania Fund), MFS
South Carolina Municipal Bond Fund (South Carolina Fund), MFS Tennessee
Municipal Bond Fund (Tennessee Fund), MFS Virginia Municipal Bond Fund
(Virginia Fund), and MFS West Virginia Municipal Bond Fund (West Virginia Fund)
are each a non-diversified series of MFS Municipal Series Trust (the trust).
The trust is organized as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company.
(2) Significant Accounting Policies
General - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Because each fund invests primarily in the securities of a single state and its
political subdivisions, each fund is vulnerable to the effects of changes in
the legal and economic environment of the particular state.
Investment Valuations - Debt securities (other than short-term obligations
which mature in 60 days or less), including listed issues, are valued on the
basis of valuations furnished by dealers or by a pricing service with
consideration to factors such as institutional-size trading in similar groups
of securities, yield, quality, coupon rate, maturity, type of issue, trading
characteristics, and other market data, without exclusive reliance upon
exchange or over-the-counter prices. Short-term obligations, which mature in 60
days or less, are valued at amortized cost, which approximates market value.
Futures contracts listed on commodities exchanges are reported at market value
using closing settlement prices. Securities for which there are no such
quotations or valuations are valued in good faith, at fair value, 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-dividend or ex-interest date in an amount equal to the value of the security
on such date. The fund uses the effective interest method for reporting
interest income on payment-in-kind (PIK) bonds. 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 - Each fund's custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by the
fund. This amount is shown as a reduction of total expenses on the Statement of
Operations.
Tax Matters and Distributions - Each fund'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
tax-exempt and net taxable 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.
50
<PAGE>
Notes to Financial Statements (Unaudited) - continued
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 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 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, 2000, 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.
<TABLE>
<CAPTION>
Mississippi New York North Carolina
Expiration Date Fund Fund Fund
----------------------------------------------------------------
<S> <C> <C> <C>
March 31, 2003 $ -- $ -- $ (686,899)
March 31, 2004 (2,596,659) -- --
March 31, 2005 (228,833) (446,982) --
March 31, 2008 -- (477,876) (65,023)
------------ ----------- ----------
Total $ (2,825,492) $ (924,858) $ (751,922)
------------ ----------- ----------
</TABLE>
<TABLE>
<CAPTION>
Pennsylvania South Carolina Tennessee Virginia West Virginia
Expiration Date Fund Fund Fund Fund Fund
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 31, 2003 $ -- $ -- $ -- $ -- $ --
March 31, 2004 (935,505) -- -- -- (2,079,974)
March 31, 2005 (533,472) -- -- (557,561) (714,690)
March 31, 2008 (43,665) (308,852) (546,400) -- (58,823)
------------ ---------- ---------- ---------- ------------
Total $ (1,512,642) $ (308,852) $ (546,400) $ (557,561) $ (2,853,487)
------------ ---------- ---------- ---------- ------------
</TABLE>
Multiple Classes of Shares of Beneficial Interest - Each fund offers multiple
classes of shares that 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 - Each fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities.
The management fee is computed daily and paid monthly at an annual rate of
0.55% of each fund's average daily net assets. The investment adviser has
voluntarily agreed to waive a portion of its fee, which is shown as a reduction
of total expenses in the Statement of Operations.
The Pennsylvania fund has a temporary expense reimbursement agreement whereby
MFS has voluntarily agreed to pay all of the fund's operating expenses,
exclusive of management, distribution, and service fees. The Pennsylvania fund
in turn will pay MFS an expense reimbursement fee not greater than 0.40% of
average daily net assets. The investment adviser agreed to waive 0.40% of the
reimbursement fee for an indefinite period of time. To the extent that the
expense reimbursement fee exceeds the Pennsylvania fund's actual expenses, the
excess will be applied to amounts paid by MFS in prior years. At September 30,
2000, aggregate unreimbursed expenses owed to MFS by the Pennsylvania fund
amounted to $191,381. During the six months ended September 30, 2000, MFS did
not impose the reimbursement fee of $86,183.
Each fund pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the fund, all of whom receive
remuneration for their services to each fund from MFS. Certain officers and
Trustees of each fund are officers or directors of MFS, MFS Fund Distributors,
Inc. (MFD), and MFS Service Center, Inc. (MFSC). Each fund has an unfunded
defined benefit plan for all of its independent Trustees. Included in Trustees'
compensation for the six months ended September 30, 2000, is a net periodic
pension expense for each fund as follows:
<TABLE>
<CAPTION>
Mississippi New York North Carolina Pennsylvania South Carolina Tennessee Virginia West Virginia
Fund Fund Fund Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$2,900 $2,985 $3,144 $2,972 $3,219 $2,950 $3,143 $3,140
</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 incurs an administrative fee at
the following annual percentages of each fund's average daily net assets:
<TABLE>
<S> <C>
First $2 billion 0.0175%
Next $2.5 billion 0.0130%
Next $2.5 billion 0.0005%
In excess of $7 billion 0.0000%
</TABLE>
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$7,882, $5,567, $27,526, $9,624, $6,649, $12,602, $32,073 and $14,485 for the
six months ended September 30, 2000, as its portion of the sales charge on
sales of Class A shares of the Mississippi, New York, North Carolina,
Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia funds,
respectively.
51
<PAGE>
Notes to Financial Statements (Unaudited) - continued
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 $5,909, $10,124, $3,323, $3,329, $10,093, and $4,710
for the New York, North Carolina, South Carolina, Tennessee, Virginia, and West
Virginia funds, respectively, for the six months ended September 30, 2000. Fees
incurred under the distribution plan during the six months ended September 30,
2000, were, 0.00%, 0.25%, 0.35%, 0.00%, 0.35%, 0.35%, 0.35%, and 0.35% of each
fund's average daily net assets attributable to Class A shares on an annualized
basis for the Mississippi, New York, North Carolina, Pennsylvania, South
Carolina, Tennessee, Virginia, and West Virginia funds, respectively. Payments
of the Mississippi fund's 0.35% per annum Class A distribution and service fee
will commence on such date as the Trustees of Trust may determine. In the case
of the New York and Pennsylvania funds, payments of the 0.10% per annum Class A
distribution fee will be implemented on such date as the Trustees of the Trust
may determine. For the Pennsylvania Fund, payments of the 0.25% per annum Class
A service fee will commence on the date that the net assets of the fund
attributable to Class A shares first equals or exceed $50 million.
Each fund's distribution plan provides that the fund will pay MFD a
distribution fee of 0.75% per annum, and a service fee of up to 0.25% per
annum, of the fund's average daily net assets attributable to Class B and Class
C shares. MFD will pay to securities dealers that enter into a sales agreement
with MFD all or a portion of the service fee attributable to Class B and Class
C shares, and will pay to such securities dealers all of the distribution fee
attributable to Class C shares. The service fee is intended to be consideration
for services rendered by the dealer with respect to Class B and Class C shares.
MFD retains the service fee for accounts not attributable to a securities
dealer, which amounted to $1,196, $1,650, $931, $497, $853, and $273 for the
New York, North Carolina, South Carolina, Tennessee, Virginia, and West
Virginia Funds, respectively, for Class B shares, for the six months ended
September 30, 2000. Fees incurred under the distribution plan during the six
months ended September 30, 2000, were 0.78%, 1.00%, 1.00%, 0.79%, 1.00%, 1.00%,
1.00%, and 1.00% of each of the fund's average daily net assets attributable to
Class B shares for the Mississippi, New York, North Carolina, Pennsylvania,
South Carolina, Tennessee, Virginia, and West Virginia funds, respectively, on
an annualized basis. Fees incurred under the distribution plan during the six
months ended September 30, 2000, were 1.00% and 1.00% of each of the fund's
average daily net assets attributable to Class C shares for the North Carolina
and Virginia funds, respectively, on an annualized basis. Except in the case of
the 0.25% per annum Class B service fee paid by the Mississippi fund upon sale
of Class B shares in the first year, payment of the Class B service fee will be
suspended until such date as the Trustees of the Trust may determine. Except in
the case of the 0.25% per annum Class B service fee paid by the Pennsylvania
fund upon the sale of Class B shares in the first year, payment of the Class B
service fee will be suspended until on such date as the Class A service fee
first becomes payable.
Certain Class A and Class C shares are subject to a contingent deferred sales
charge in the event of a shareholder redemption within 12 months following
purchase. A contingent deferred sales charge is imposed on shareholder
redemptions of Class B shares in the event of a shareholder redemption within
six years of purchase. MFD receives all contingent deferred sales charges.
Contingent deferred sales charges imposed during the six months ended September
30, 2000, for Class A, Class B, and Class C shares, were as follows:
<TABLE>
<CAPTION>
North South West
Mississippi New York Carolina Pennsylvania Carolina Tennessee Virginia Virginia
CDSC imposed Fund Fund Fund Fund Fund Fund Fund Fund
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ -- $ 69 $ -- $ -- $ --
Class B $13,356 $27,993 $48,492 $12,922 $47,575 $19,538 $36,167 $10,742
Class C $ -- $ -- $ 257 $ -- $ -- $ -- $ 119 $ --
</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 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's omitted):
<TABLE>
<CAPTION>
North South West
Mississippi New York Carolina Pennsylvania Carolina Tennessee Virginia Virginia
Fund Fund Fund Fund Fund Fund Fund Fund
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases $4,632 $28,824 $57,315 $2,774 $32,527 $ 9,394 $52,828 $10,329
Sales 9,272 27,914 68,939 2,145 37,983 13,325 72,707 14,021
</TABLE>
52
<PAGE>
Notes to Financial Statements (Unaudited) - continued
The cost and unrealized appreciation and depreciation in the value of the
investments owned by each fund, as computed on a federal income tax basis, are
as follows (000's Omitted):
<TABLE>
<CAPTION>
North South West
Mississippi New York Carolina Pennsylvania Carolina Tennessee Virginia Virginia
Fund Fund Fund Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aggregate cost $70,220 $114,907 $350,965 $44,882 $143,539 $115,108 $322,993 $125,732
------- -------- -------- ------- -------- -------- -------- --------
Gross unrealized appreciation $ 2,284 $ 5,715 $ 13,437 $ 1,110 $ 5,674 $ 3,981 $ 9,532 $ 5,540
Gross unrealized depreciation (560) (742) (5,406) (579) (1,697) (1,456) (5,825) (1,844)
------- -------- -------- ------- -------- -------- -------- --------
Net unrealized appreciation $ 1,724 $ 4,973 $8,031 $ 531 $ 3,977 $2,525 $ 3,707 $ 3,696
------- -------- -------- ------- -------- -------- -------- --------
</TABLE>
(5) Shares of Beneficial Interest
Each fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
fund shares were as follows:
<TABLE>
<CAPTION>
Mississippi Fund New York Fund North Carolina Fund
Class A shares --------------------- --------------------- ----------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount Shares Amount Shares Amount
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 253 $ 2,368 316 $ 3,338 413 $ 4,678
Shares issued to shareholders in
reinvestment of distributions 85 805 144 1,526 392 4,451
Shares reacquired (745) (6,945) (679) (7,194) (2,004) (22,717)
---- --------- ---- --------- ------ ----------
Net decrease (407) $(3,772) (219) $(2,330) (1,199) $(13,588)
---- --------- ---- --------- ------ ----------
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 1,277 $12,166 1,181 $12,517 1,421 $ 16,331
Shares issued to shareholders in
reinvestment of distributions 165 1,564 305 3,259 840 9,656
Shares reacquired (1,111) (10,495) (2,263) (24,117) (4,945) (56,638)
------ --------- ------ --------- ------ ----------
Net increase (decrease) 331 $ 3,235 (777) $(8,341) (2,684) $(30,651)
------ --------- ------ --------- ------ ----------
Pennsylvania Fund South Carolina Fund Tennessee Fund
--------------------------------------------------- ----------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------- ----------------------
Shares sold 376 $ 3,544 231 $ 2,696 296 $ 3,008
Shares issued to shareholders in
reinvestment of distributions 39 363 135 1,564 119 1,206
Shares reacquired (209) (1,960) (901) (10,454) (795) (8,089)
--------- --------- --------- --------- ------ --------
Net increase (decrease) 206 $ 1,947 (535) $ (6,194) (380) $ (3,875)
--------- --------- --------- --------- ------ --------
Year Ended March 31, 2000 (000 Omitted) Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------- ----------------------
Shares sold 990 $ 9,335 428 $ 5,068 740 $ 7,798
Shares issued to shareholders in
reinvestment of distributions 78 738 307 3,608 295 3,021
Shares reacquired (536) (5,036) (1,965) (23,102) (1,904) (19,537)
--------- --------- --------- --------- ------ --------
Net increase (decrease) 532 $ 5,037 (1,230) $ (14,426) (869) $ (8,718)
--------- --------- --------- --------- ------ --------
</TABLE>
<TABLE>
<CAPTION>
Virginia Fund West Virginia Fund
------------------------- ------------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount Shares Amount
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 586 $ 6,385 190 $ 2,088
Shares issued to shareholders in
reinvestment of distributions 360 3,924 150 1,649
Shares reacquired (2,185) (23,891) (659) (7,190)
------ --------- ---- ---------
Net decrease (1,239) $ (13,582) (319) $(3,453)
------ --------- ---- ---------
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount Shares Amount
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,527 $ 17,029 426 $ 4,792
Shares issued to shareholders in
reinvestment of distributions 760 8,371 316 3,515
Shares reacquired (5,238) (57,536) (1,401) (15,503)
------ --------- ------ ---------
Net decrease (2,951) $ (32,136) (659) $(7,196)
------ --------- ------ ---------
</TABLE>
53
<PAGE>
Notes to Financial Statements (Unaudited) - continued
<TABLE>
<CAPTION>
Mississippi Fund
Class B shares ---------------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 50 $ 474
Shares issued to shareholders in
reinvestment of distributions 11 92
Shares reacquired (115) (1,069)
---- ---------
Net increase (decrease) (54) $ (503)
---- ---------
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 157 $ 1,505
Shares issued to shareholders in
reinvestment of distributions 18 170
Shares reacquired (178) (1,682)
------- ---------
Net increase (decrease) (3) $ (7)
---------- ---------
Pennsylvania Fund
-------------------------
<CAPTION>
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 182 $ 1,720
Shares issued to shareholders in
reinvestment of distributions 23 216
Shares reacquired (125) (1,170)
------------ ---------
Net increase (decrease) 80 $ 766
------------ ---------
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 408 $ 3,890
Shares issued to shareholders in
reinvestment of distributions 52 492
Shares reacquired (1,013) (9,479)
------------ ---------
Net increase (decrease) (553) $(5,097)
------------ ---------
<CAPTION>
Six Months Ended September 30, 2000 (000 Omitted)
---------------------------------------------------
Shares sold
Shares issued to shareholders in
reinvestment of distributions
Shares reacquired
Net increase (decrease)
Year Ended March 31, 2000 (000 Omitted)
---------------------------------------------------
Shares sold
Shares issued to shareholders in
reinvestment of distributions
Shares reacquired
Net decrease
Class C shares
Six Months Ended September 30, 2000 (000 Omitted)
---------------------------------------------------
Shares sold
Shares issued to shareholders in
reinvestment of distributions
Shares reacquired
Net increase
Year Ended March 31, 2000 (000 Omitted)
---------------------------------------------------
Shares sold
Shares issued to shareholders in
reinvestment of distributions
Shares reacquired
Net increase (decrease)
<CAPTION>
New York Fund North Carolina Fund
Class B shares ------------------------- ------------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 184 $ 1,948 196 $2,224
Shares issued to shareholders in
reinvestment of distributions 24 254 57 643
Shares reacquired (139) (1,463) (338) (3,833)
---- --------- ---- --------
Net increase (decrease) 69 $ 739 (85) $ (966)
---- --------- ---- --------
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount Shares Amount
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 391 $ 4,207 686 $7,992
Shares issued to shareholders in
reinvestment of distributions 59 636 118 1,355
Shares reacquired (1,237) (13,068) (795) (9,055)
------ --------- ----- --------
Net increase (decrease) (787) $(8,225) 9 $ 292
------ --------- ----- --------
<CAPTION>
South Carolina Fund Tennessee Fund
------------------------- ----------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount Shares Amount
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 127 $ 1,479 148 $1,495
Shares issued to shareholders in
reinvestment of distributions 31 355 22 225
Shares reacquired (266) (3085) (162) (1,645)
--------- --------- -------- --------
Net increase (decrease) (108) $(1,251) 8 $ 75
--------- --------- -------- --------
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount Shares Amount
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 541 $ 6,406 410 $4,272
Shares issued to shareholders in
reinvestment of distributions 71 833 56 577
Shares reacquired (792) (9,250) (450) (4,573)
--------- --------- -------- --------
Net increase (decrease) (180) $(2,011) 16 $ 276
--------- --------- -------- --------
<CAPTION>
Virginia Fund West Virginia Fund
----------------------- ----------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount Shares Amount
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 160 $ 1,742 35 $ 387
Shares issued to shareholders in
reinvestment of distributions 28 307 17 189
Shares reacquired (310) (3,371) (51) (561)
--------- --------- -------- --------
Net increase (decrease) (122) $(1,322) 1 $ 15
--------- --------- -------- --------
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount Shares Amount
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 365 $ 4,069 172 $1,934
Shares issued to shareholders in
reinvestment of distributions 58 634 38 425
Shares reacquired (809) (8,888) (326) (3,618)
--------- --------- -------- --------
Net decrease (386) $(4,185) (116) $ (1,259)
--------- --------- -------- --------
<CAPTION>
Class C shares North Carolina Fund Virginia Fund
----------------------- ---------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount Shares Amount
-------------------------------------------------------------------------------------------- --------
<S> <C> <C> <C> <C>
Shares sold 234 $ 2,666 47 $ 505
Shares issued to shareholders in
reinvestment of distributions 16 185 8 92
Shares reacquired (85) (974) (40) (431)
--------- --------- -------- --------
Net increase 165 $ 1,877 15 $ 166
--------- --------- -------- --------
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount Shares Amount
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 438 $ 5,095 131 $1,439
Shares issued to shareholders in
reinvestment of distributions 29 335 17 190
Shares reacquired (376) (4,300) (236) (2,625)
--------- --------- -------- --------
Net increase (decrease) 91 $ 1,130 (88) $ (996)
--------- --------- -------- --------
</TABLE>
54
<PAGE>
Notes to Financial Statements (Unaudited) - continued
(6) Line of Credit
The trust and other affiliated funds participate in a $1.1 billion unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. Borrowings may be made for temporary financing needs. 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, 2000, ranged from $165 to $1,351. The funds had no
significant borrowings during the period.
(7) Financial Instruments
The trust trades financial instruments with off-balance-sheet risk in the
normal course of its investing activities in order to manage exposure to market
risks such as interest rates. These financial instruments include futures
contracts. The notional or contractual amounts of these instruments represent
the investment a fund has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
Futures Contracts
<TABLE>
<CAPTION>
Unrealized
Appreciation/
Fund Description Expiration Contracts Position (Depreciation)
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mississippi Fund Municipal Bond Index December 2000 25 Long $ (32,031)
---------
New York Fund Municipal Bond Index December 2000 20 Long $ (24,375)
---------
North Carolina Fund Municipal Bond Index December 2000 25 Long $ (28,905)
---------
Pennsylvania Fund Municipal Bond Index December 2000 3 Long $ (3,469)
---------
South Carolina Fund Municipal Bond Index December 2000 10 Short $ 1,000
---------
At September 30, 2000, the Mississippi, New York, North Carolina, Pennsylvania, and South Carolina
funds had sufficient cash and/or securities to cover margin requirements on open futures contracts.
</TABLE>
(8) Restricted Securities
Each fund may invest not more than 15% of its net assets in securities which
are subject to legal or contractual restrictions on resale. At September 30,
2000, the Mississippi, New York, North Carolina, Pennsylvania, South Carolina,
Virginia, West Virginia funds owned the following restricted securities,
excluding securities issued under Rule 144A, constituting 3.2%, 7.6%, 4.2%,
6.0%, 4.7%, 3.3% and 7.6% 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 value of these securities is determined by valuations furnished by dealers
or by a pricing service, or if not available, in good faith by the Trustees.
<TABLE>
<CAPTION>
Fund Description
--------------------------------------------------------------------------------------
<S> <C>
Mississippi Fund Guam Power Authority Rev., RITES, AMBAC, 6.236s, 2013
Puerto Rico Municipal Finance Agency, RITES, FSA, 7.42s, 2017
Puerto Rico Public Finance Corp., RITES, 7.17s, 2013
New York Fund Guam Power Authority Rev., RITES, AMBAC, 6.236s, 2014
Niagara Falls, NY, Bridge Commission Toll Rev., RITES, FGIC, 6.172s, 2015
Triborough Bridge & Tunnel Authority, NY, RITES, 6.643s, 2017
<CAPTION>
Date of Principal
Fund Acquisition Amount Cost Value
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mississippi Fund 5/20/99 1,000,000 $1,066,234 $1,043,630
1/6/00 750,000 703,966 776,835
9/30/99 500,000 508,652 552,370
----------
$2,372,835
----------
New York Fund 5/20/99 500,000 $ 529,177 $ 513,115
5/21/99 3,500,000 3,741,451 3,509,310
4/18/00 5,000,000 5,017,992 5,154,100
----------
$9,176,525
----------
</TABLE>
55
<PAGE>
Notes to Financial Statements (Unaudited) - continued
<TABLE>
<CAPTION>
Fund Description
----------------------------------------------------------------------------------------
<S> <C>
North Carolina Fund North Carolina Eastern Municipal Power, RITES, AMBAC, 7.613s, 2018
Puerto Rico Highway & Transportation Authority, Rev., RITES, FSA,
8.42s, 2018
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.17s, 2016
Pennsylvania Fund Guam Power Authority Rev., RITES, AMBAC, 6.236s, 2014
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.17s, 2013
South Carolina Fund Commonwealth of Puerto Rico, RITES, MBIA, 7.939s, 2020
Puerto Rico Electric Power Authority, RITES, FSA, 6.92s, 2015
Puerto Rico Municipal Finance Agency, RITES, FSA, 8.42s, 2016
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.17s, 2013
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.17s, 2019
Virginia Fund Guam Power Authority Rev., RITES, AMBAC, 6.236s, 2015
Puerto Rico Electric Power Authority, RITES, FSA, 7.939s, 2017
Puerto Rico Electric Power Authority, RITES, FSA, 7.689s, 2019
Puerto Rico Electric Power Authority, RITES, FSA, 7.039s, 2020
Puerto Rico Municipal Finance Agency, RITES, FSA, 8.42s, 2016
Puerto Rico Municipal Finance Agency, RITES, FSA, 7.42s, 2017
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.17s, 2013
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.17s, 2016
West Virginia Fund Commonwealth of Puerto Rico, RITES, MBIA, 7.743s, 2019
Puerto Rico Municipal Finance Agency, RITES, FSA, 7.223s, 2017
West Virginia Building Commission, RITES, AMBAC, 6.088s, 2018
<CAPTION>
Date of Principal
Fund Acquisition Amount Cost Value
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
North Carolina Fund 5/26/00 $6,500,000 $6,551,555 $ 7,224,360
2/26/99 5,425,000 6,989,771 6,444,032
9/30/99 1,500,000 1,471,890 1,592,730
-----------
$15,261,122
-----------
Pennsylvania Fund 5/20/99 2,170,000 $2,296,628 $ 2,226,941
9/30/99 500,000 508,652 552,370
-----------
$ 2,779,311
-----------
South Carolina Fund 3/30/00 2,000,000 $2,043,232 $ 2,113,500
9/30/99 1,000,000 976,500 1,011,980
1/6/00 850,000 882,124 959,582
9/30/99 1,375,000 1,398,793 1,519,017
3/31/99 1,300,000 1,470,326 1,339,676
-----------
$ 6,943,755
-----------
Virginia Fund 5/20/99 1,010,000 $1,054,711 $ 1,017,636
9/7/00 2,500,000 2,769,906 2,719,500
9/7/00 1,270,000 1,344,849 1,320,051
9/7/00 1,250,000 1,240,094 1,199,987
1/6/00 1,105,000 1,146,967 1,247,456
1/6/00 615,000 577,252 637,005
9/30/99 2,000,000 2,034,608 2,209,480
3/31/99 500,000 564,868 530,910
-----------
$10,882,025
-----------
West Virginia Fund 3/30/00 3,000,000 $3,087,409 $ 3,211,770
1/6/00 900,000 844,760 932,202
5/5/99 5,770,000 6,218,664 5,689,451
-----------
$ 9,833,423
-----------
</TABLE>
56
<PAGE>
MFS[RegTM] Municipal Series Trust
Trustees
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.
Abby M. O'Neill+ -- Private Investor
Walter E. Robb, III+ -- President and 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*
Geoffrey L. Schechter*
Treasurer
James O. Yost*
Assistant Treasurers
Mark E. Bradley*
Robert R. Flaherty*
Laura F. Healy*
Ellen Moynihan*
Secretary
Stephen E. Cavan*
Assistant Secretary
James R. Bordewick, Jr.*
Custodian
State Street Bank and Trust Company
Investor Information
For information on MFS mutual funds, call
your investment professional or, for an informa-
tion kit, call toll free: 1-800-637-2979 any
business day from 9 a.m. to 5 p.m. Eastern
time (or leave a message anytime).
For general information, call toll free:
1-800-225-2606 any business day from
8 a.m. to 8 p.m. Eastern time.
Investor Service
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
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, exchanges,
or stocks and bond outlooks, call toll free:
1-800-MFS-TALK (1-800-637-8255) anytime
from a touch-tone telephone.
World Wide Web
www.mfs.com
+ Independent Trustee
* MFS Investment Management
57
<PAGE>
MFS[Reg] Municipal
Series Trust
MFS Mississippi Municipal Bond Fund
MFS New York Municipal Bond Fund
MFS North Carolina Municipal Bond Fund
MFS Pennsylvania Municipal Bond Fund
MFS South Carolina Municipal Bond Fund
MFS Virginia Municipal Bond Fund
MFS West Virginia Municipal Bond Fund
[MFS Logo] MFS [RegTM]
INVESTMENT MANAGEMENT
We invented the mutual fund[RegTM]
500 Boylston Street
Boston, MA 02116-3741
--------------
PRSRT STD
U.S. Postage
Paid
MFS
--------------
58/258
52/252
41/241/341
30/230
42/242
53/253
43/243/343
44/244
MST-3B-11/00/56M
[Copyright] MFS Investment Management[RegTM]
MFS[RegTM] investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
