[Front cover]
[Background: Word BOND repeating across and down page]
[Graphic: MFS[RegTM]
INVESTMENT MANAGEMENT
We invented the mutual fund[RegTM]]
MFS[RegTM] Municipal
Series Trust
Semiannual Report o September 30, 2000
For the States of: Alabama, Arkansas,
California, Florida, Georgia, Maryland,
and Massachusetts
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Letter from the Chairman .................. 1
Management Review and Outlook ............. 3
Performance Summary ....................... 5
Portfolio of Investments .................. 8
Financial Statements ...................... 23
Notes to Financial Statements ............. 46
Trustees and Officers ..................... 53
</TABLE>
MFS Original Research[RegTM]
Research has been central to investment management at MFS
since 1932, when we created one of the first in-house
research departments in the mutual fund
industry. Original Research[SM] at MFS is more
than just crunching numbers and creating
economic models: it's getting to know
each security and each company personally.
[Graphic; Two circles[SM]
ORIGINAL RESEARCH (star) MAKES A DIFFERENCE (star)
-----
MFS
-----]
-----------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
-----------------------------------------------------------
<PAGE>
Letter from the Chairman
[Graphic; Picture of Jeffrey L. Shames]
Dear Shareholders,
If you've been reading our fund reports for any length of time, you've probably
sensed the 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
Research(SM) 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,
[Signature of Jeffrey L. 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 Research(SM) process, which we believe is extremely adept at finding
opportunities, evaluating credit risk, and avoiding defaults.
Respectfully,
[Signatures of Michael L. Dawson and 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 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>
<CAPTION>
Commencement of investment operations:
<S> <C>
Alabama February 1, 1990
Arkansas February 3, 1992
California June 18, 1985
Florida February 3, 1992
Georgia June 6, 1988
Maryland October 31, 1984
Massachusetts April 9, 1985
Net assets as of September 30, 2000:
Alabama $ 85.0 million
Arkansas $120.0 million
California $265.7 million
Florida $ 80.6 million
Georgia $ 63.8 million
Maryland $139.1 million
Massachusetts $231.5 million
</TABLE>
<TABLE>
<CAPTION>
Class inception:
<S> <C> <C>
Alabama Class A February 1, 1990
Class B September 7, 1993
Arkansas Class A February 3, 1992
Class B September 7, 1993
California Class A June 18, 1985
Class B September 7, 1993
Class C January 3, 1994
Florida Class A February 3, 1992
Class B September 7, 1993
Georgia Class A June 6, 1988
Class B September 7, 1993
Maryland Class A October 31, 1984
Class B September 7, 1993
Massachusetts Class A April 9, 1985
Class B September 7, 1993
</TABLE>
Performance Summary
Because mutual funds are designed for investors with long-term goals, we have
provided cumulative results as well as the average annual total returns for the
applicable time periods. Investment results reflect the percentage change in net
asset value, including reinvestment of dividends.
Total Rates of Return through September 30, 2000
MFS[RegTM] Alabama Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +4.06% +6.21% +12.15% +28.97% +96.39%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +6.21% +3.90% +5.22% +6.98%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +1.16% +2.23% +4.20% +6.46%
------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.67% +5.41% +9.66% +24.13% +85.81%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.41% +3.12% +4.42% +6.39%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +1.44% +2.24% +4.09% +6.39%
------------------------------------------------------------------------------------------
</TABLE>
MFS[RegTM] Arkansas Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years Life*
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.61% +5.59% +12.01% +27.93% +61.54%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.59% +3.85% +5.05% +5.70%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.57% +2.18% +4.03% +5.10%
------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years Life*
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.20% +4.81% +9.47% +23.05% +52.18%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +4.81% +3.06% +4.24% +4.97%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.81% +2.15% +3.90% +4.97%
------------------------------------------------------------------------------------------
</TABLE>
*For the period from the commencement of the fund's investment operations,
February 3, 1992, through September 30, 2000.
5
<PAGE>
Performance Summary - continued
MFS[RegTM] California Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +4.50% +6.30% +13.95% +32.26% +95.98%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +6.30% +4.45% +5.75% +6.96%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +1.25% +2.77% +4.73% +6.44%
------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +4.10% +5.44% +11.25% +26.91% +84.15%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.44% +3.62% +4.88% +6.30%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +1.44% +2.70% +4.55% +6.30%
------------------------------------------------------------------------------------------
</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 +4.03% +5.34% +10.75% +25.99% +83.51%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.34% +3.46% +4.73% +6.26%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +4.34% +3.46% +4.73% +6.26%
------------------------------------------------------------------------------------------
</TABLE>
MFS[RegTM] Florida Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years Life*
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.68% +5.53% +11.42% +26.34% +62.41%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.53% +3.67% +4.79% +5.76%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.52% +2.00% +3.77% +5.17%
------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years Life*
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.27% +4.69% +8.89% +21.28% +52.62%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +4.69% +2.88% +3.93% +5.00%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.69% +1.97% +3.60% +5.00%
------------------------------------------------------------------------------------------
</TABLE>
*For the period from the commencement of the fund's investment operations,
February 3, 1992, through September 30, 2000.
MFS[RegTM] Georgia Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.75% +5.52% +11.05% +27.25% +86.32%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.52% +3.55% +4.94% +6.42%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.51% +1.89% +3.92% +5.90%
------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.36% +4.83% +8.68% +22.48% +76.46%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +4.83% +2.81% +4.14% +5.84%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.83% +1.90% +3.80% +5.84%
------------------------------------------------------------------------------------------
</TABLE>
MFS[RegTM] Maryland Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
-------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.37% +5.18% +10.74% +26.34% +77.38%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.18% +3.46% +4.79% +5.90%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.19% +1.79% +3.77% +5.38%
------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.03% +4.60% +8.72% +22.34% +69.09%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +4.60% +2.82% +4.11% +5.39%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.60% +1.91% +3.77% +5.39%
------------------------------------------------------------------------------------------
</TABLE>
MFS[RegTM] Massachusetts Municipal Bond Fund
<TABLE>
<CAPTION>
Class A Investment Results
------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.41% +5.07% +10.30% +25.82% +86.37%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +5.07% +3.32% +4.70% +6.42%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.08% +1.66% +3.69% +5.91%
------------------------------------------------------------------------------------------
<CAPTION>
Class B Investment Results
------------------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +3.07% +4.28% +8.07% +21.67% +77.59%
------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +4.28% +2.62% +4.00% +5.91%
------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.31% +1.72% +3.67% +5.91%
------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
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 include 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 periods shown, without this, 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 ALABAMA MUNICIPAL BOND FUND
Municipal Bonds - 98.8%
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 22.1%
Bessemer, AL, School Warrants, 5.5s, 2020 $1,000 $ 984,630
Birmingham, AL, 5.75s, 2019 2,000 2,030,800
Birmingham, AL, Warrants, 5.75s, 2017 1,000 1,016,400
Commonwealth of Puerto Rico, Aqueduct &
Sewer Authority Rev., 5s, 2015 1,300 1,239,511
Florence, AL, Warrants, FSA, 5s, 2018 850 785,204
Hoover, AL, 6s, 2017 500 527,605
Houston County, AL, AMBAC, 6.25s, 2019 750 796,380
Huntsville, AL, 5.5s, 2020 1,000 978,860
Jefferson County, AL, Board Of Education,
FSA, 5.8s, 2020 865 877,006
Jefferson County, AL, School Warrants, 5.5s, 2020 1,750 1,723,085
Mobile County, AL, 6s, 2014 1,345 1,404,059
Puerto Rico Municipal Finance Agency,
RITES, 7.42s, 2017 ++++[dag] 500 517,890
Russell County, AL, Warrants, AMBAC, 5s, 2017 1,595 1,479,618
Shelby County, AL, 7.4s, 2007 1,000 1,053,000
Shelby County, AL, MBIA, 0s, 2011 3,000 1,543,530
Shelby County, AL, 7.7s, 2017 800 841,096
Tuscaloosa, AL, Warrants, 5.7s, 2018 1,000 1,008,700
-----------
$18,807,374
-------------------------------------------------------------------------------------
State and Local Appropriation - 1.3%
Puerto Rico Public Finance Corp., RITES,
7.17s, 2013 ++++[dag] $ 500 $ 552,370
Puerto Rico Public Finance Corp., RITES,
AMBAC, 7.17s, 2016 ++++[dag] 500 530,910
-----------
$ 1,083,280
-------------------------------------------------------------------------------------
Refunded and Special Obligations - 3.7%
Baldwin County, AL, Eastern Shore Health Care
(Thomas Hospital), 8.5s, 2016 $1,000 $ 1,039,040
Gadsden East, AL, Medical Clinic Board Rev.
(Baptist Hospital), 7.8s, 2021 1,000 1,054,350
Montgomery County, AL, Department of Human
Resources Rev., 7s, 2007 1,000 1,032,080
-----------
$ 3,125,470
-------------------------------------------------------------------------------------
Airport and Port Revenue - 5.2%
Alabama Docks Department Facilities Rev.,
MBIA, 5.375s, 2017 $1,000 $ 976,430
Alabama Docks Department Facilities Rev.,
MBIA, 5.5s, 2022 1,000 973,850
Birmingham, AL, Airport Authority, Airport Rev.,
AMBAC, 5.5s, 2013 1,465 1,477,233
Mobile, AL, Airport Authority Rev., 7.375s, 2012 1,000 1,021,470
-----------
$ 4,448,983
-------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 9.0%
DeKalb & Cherokee County, AL, Gas Rev.,
AMBAC, 5.4s, 2016 $2,000 $ 1,997,400
Guam Power Authority Rev., RITES,
AMBAC, 6.236s, 2013 ++++[dag] 500 521,815
Guam Power Authority Rev., RITES,
AMBAC, 5.757s, 2018 ++++[dag] 4,500 4,111,560
Southeast Alabama Gas District Systems Rev.,
AMBAC, 5.5s, 2020 1,000 984,500
-----------
$ 7,615,275
-------------------------------------------------------------------------------------
Health Care Revenue - 3.8%
Baldwin County, AL, Eastern Shore Health Care
(Thomas Hospital), 6.75s, 2015 $1,000 $ 969,650
Cullman, AL, Medical Park South Clinic, "A",
6.5s, 2023 1,000 925,370
</TABLE>
<TABLE>
<CAPTION>
Municipal Bonds - continued
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Health Care Revenue - continued
Montgomery, AL, Medical Clinic Board Rev.
(Jackson Hospital & Clinic), 7s, 2015 $ 780 $ 784,813
Valley, AL, Special Care Facilities Financing
Authority (Lanier Memorial Hospital), 5.65s, 2022 735 586,831
-----------
$ 3,266,664
-------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 9.5%
Butler, AL, Industrial Developement Board, Solid
Waste Rev. (James River Corp.), 8s, 2028 $1,000 $ 1,077,660
Camden, AL, Industrial Development Board,
Pollution Control Rev. (Macmillian Bloedel),
7.75s, 2009 500 510,645
Courtland, AL, Industrial Development Board,
Solid Waste Disposal Rev. (Champion
International), 5.9s, 2017 1,000 943,380
Courtland, AL, Industrial Development Board,
Solid Waste Disposal Rev. (Champion
International), 6s, 2029 1,000 928,960
Mobile County, AL, Industrial Development Board
Improvement Rev. (Ipsco, Inc.), 6.875s, 2030 500 504,825
Mobile, AL, Industrial Development Board
Improvement Rev. (International Paper Co.),
6.35s, 2016 650 660,881
Mobile, AL, Industrial Development Board
Improvement Rev. (International Paper Co.),
6.45s, 2019 350 356,734
Piedmont, AL, Industrial Development Board Rev.
(Springs Industries), 8.25s, 2010 1,000 1,028,850
Selma, AL, Industrial Development Board
(International Paper Co.), 6.7s, 2018 500 518,320
Tarrant City, AL, Industrial Development Board
Rev. (Vulcan Materials), 7.5s, 2011 1,500 1,536,945
-----------
$ 8,067,200
-------------------------------------------------------------------------------------
Insured Health Care Revenue - 10.9%
Alabama Special Care Facilities Financing
Authority (Daughters of Charity), AMBAC,
5s, 2025 $1,000 $ 899,750
Alabama Special Care Facilities Financing
Authority (Daughters of Charity), AMBAC,
5s, 2025 1,500 1,336,860
Houston County, AL, Health Care Authority,
AMBAC, 6.125s, 2022 1,000 1,030,780
Huntsville, AL, Health Care Authority Rev.,
MBIA, 6.375s, 2022 ### 850 874,353
Huntsville, AL, Health Care Authority Rev.,
MBIA, 5s, 2023 ### 1,000 898,500
Lauderdale County & Florence, AL (Coffee Health
Group), MBIA, 5.75s, 2014 1,000 1,003,420
Lauderdale County & Florence, AL (Eliza Coffee
Memorial Hospital), MBIA, 5.75s, 2014 1,000 1,061,410
Montgomery, AL, Medical Clinic Board Rev.
(Jackson Hospital & Clinic), AMBAC,
5.875s, 2016 1,000 1,020,650
Montgomery, AL, Special Care Facilities
Financing Authority Rev. (Baptist Health),
MBIA, 5.375s, 2019 1,150 1,106,875
-----------
$ 9,232,598
-------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 2.5%
Alabama Housing Finance Authority, Multi-Family
Residential Development Rev. (St. Jude), FHA,
7.25s, 2023 $1,305 $ 1,363,360
</TABLE>
8 - MAL
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
Municipal Bonds - continued
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Multi-Family Housing Revenue - continued
Birmingham, AL Multi-Family Residential
Development Rev., "C" (Beaconview
Apartments), 8s, 2030 $ 400 $ 401,896
Puerto Rico Housing Finance Corp., Multi-Family
Mortgage Rev., 7.5s, 2015 345 350,968
-----------
$ 2,116,224
-------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 1.1%
Territory of Virgin Islands, Public Finance
Authority, 5.5s, 2018 $ 1,000 $ 927,440
-------------------------------------------------------------------------------------
Single Family Housing Revenue - 3.8%
Alabama Housing Finance Authority, Single Family
Mortgage Rev., GNMA, 6.55s, 2014 $ 925 $ 969,603
Alabama Housing Finance Authority, Single Family
Mortgage Rev., GNMA, 5.7s, 2015 1,445 1,464,392
Alabama Housing Finance Authority, Single Family
Mortgage Rev., GNMA, 7.4s, 2022 460 468,220
Alabama Housing Finance Authority, Single Family
Mortgage Rev., GNMA, 7.5s, 2022 290 296,438
Alabama Housing Finance Authority, Single Family
Mortgage Rev., GNMA, 7.6s, 2022 55 55,664
-----------
$ 3,254,317
-------------------------------------------------------------------------------------
Turnpike Revenue - 0.6%
Puerto Rico Highway & Transportation Authority,
FSA, 5s, 2016 $ 500 $ 487,625
-------------------------------------------------------------------------------------
Universities - 6.0%
Alabama Board of Education Rev. (Shelton State
Community College), MBIA, 6s, 2014 $ 1,000 $ 1,041,040
Alabama Board of Education Rev. (Southern
Union Community College), MBIA, 5s, 2018 1,000 922,060
Alabama Public School & College, Capital
Improvement, 5.75s, 2017 1,000 1,026,900
Alabama Public School & College, Capital
Improvement, 5.75s, 2018 1,035 1,057,760
Homewood, AL, Educational Building Authority,
Educational Facilities Rev. (Samford University),
6.5s, 2016 1,000 1,033,190
-----------
$ 5,080,950
-------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 13.7%
Alabama Drinking Water Finance Authority,
AMBAC, 6s, 2021 $ 725 $ 746,895
Alabama Water Pollution Control Authority,
AMBAC, 5.75s, 2019 1,000 1,010,430
Alabama Water Pollution Control Authority,
AMBAC, 5.5s, 2020 1,380 1,358,500
Alabama Water Pollution Control Authority, "B",
AMBAC, 5.5s, 2016 1,000 1,002,150
Arab, AL, Waterworks Board, Water Rev.,
MBIA, 7.05s, 2016 1,000 1,037,710
Bessemer, AL, Water Rev., AMBAC, 5.75s, 2026 1,000 1,000,500
Birmingham, AL, Water & Sewer Rev., Warrants,
AMBAC, 5.125s, 2017 1,000 944,770
Jefferson County, AL, Sewer Rev., Warrants "D",
5.7s, 2019 1,000 1,006,570
Limestone County, AL, Water Authority Rev.,
FGIC, 5.5s, 2026 2,650 2,567,850
Madison, AL, Water & Waste Board,
MBIA, 5.5s, 2019 1,000 989,330
-----------
$11,664,705
-------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Municipal Bonds - continued
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Other - 5.6%
Alabama Building Renovation Authority, 6s, 2014 $ 1,515 $ 1,587,220
Birmingham, AL, Downtown Redevelopment
Authority, Social Security Administration
Building Rev., 12.5s, 2010 2,370 3,220,806
-----------
$ 4,808,026
-------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $82,486,207) $83,986,131
-------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.7%
-------------------------------------------------------------------------------------
Bartow County, GA, Development Authority
Pollution Control Rev. (Georgia Power Co.),
due 10/02/00 $ 200 $ 200,000
Burke County, GA, Development Authority
Pollution Rev. (Georgia Power Co.),
due 10/02/00 100 100,000
Burke County, GA, Development Authority,
Pollution Control Rev. (Vogtle Project),
due 10/02/00 100 100,000
Illinois Educational Facilities Authority Rev.,
(University Chicago Hospital), due 10/02/00 100 100,000
Pinellas County, FL, Health Facility Authority,
due 10/02/00 100 100,000
Sevier County, TN, Public Building Authority,
due 10/02/00 300 300,000
Sevier County, TN, Public Building Authority,
due 10/02/00 100 100,000
Sevier County, TN, Public Building Authority,
due 10/05/00 150 150,000
Sevier County, TN,, Public Building Authority,
due 10/02/00 200 200,000
Stevenson, AL, Industrial Development Board,
Environmental Improvement Rev. (Mead Corp.),
due 10/02/00 100 100,000
-------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 1,450,000
-------------------------------------------------------------------------------------
Total Investments (Identified Cost, $83,936,207) $85,436,131
Other Assets, Less Liabilities - (0.5%) (386,869)
-------------------------------------------------------------------------------------
Net assets - 100.0% $85,049,262
-------------------------------------------------------------------------------------
</TABLE>
See portfolio footnotes and notes to financial statements.
9 - MAL
<PAGE>
Portfolio of Investments (Unaudited) - continued
MFS ARKANSAS MUNICIPAL BOND FUND
Municipal Bonds - 98.9%
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 11.6%
Arkansas College Savings, "A", 0s, 2017 $1,840 $ 722,679
Arkansas College Savings, "B", 0s, 2012 1,200 649,140
Arkansas College Savings, "B", 0s, 2013 1,000 506,910
Arkansas College Savings, "B", 0s, 2014 1,150 546,664
Arkansas College Savings, "B", 0s, 2015 1,600 713,120
Commonwealth of Puerto Rico, RITES,
MBIA, 7.939s, 2020 ++++[dag] 3,000 3,170,250
Commonwealth of Puerto Rico Infrastructure
Finance Authority, Series A, 5.5s, 2019 2,500 2,531,875
Little Rock, AR, School District, Series A, FSA,
5.4s, 2017 1,000 989,050
Puerto Rico Municipal Finance Agency, RITES,
FSA, 7.42s, 2017 ++++[dag] 735 761,298
Puerto Rico Municipal Finance Agency, RITES,
FSA, 7.42s, 2018 ++++[dag] 3,250 3,334,305
-----------
$13,925,291
-------------------------------------------------------------------------------------
State and Local Appropriation - 3.6%
Arkansas Development Finance Authority, Local
Government Rev., 7.1s, 2008 [dag] $2,440 $ 2,510,736
Arkansas Development Finance Authority, Single
Family Mortgage Rev., 0s, 2011 3,860 1,758,770
-----------
$ 4,269,506
-------------------------------------------------------------------------------------
Refunded and Special Obligations - 10.2%
Arkansas Housing Development Agency, Single
Family Mortgage Rev., ETM, 8.375s , 2011 ### $1,000 $ 1,268,830
Baxter County, AR, Hospital Rev., 5.6s , 2021 1,500 1,252,890
Harrison, AR, Residential Housing Facilities Board,
FGIC, 7.4s , 2011 4,000 4,786,920
Pulaski County, AR, Public Facilities Board,
GNMA, 5.75s , 2034 1,985 1,910,523
Sebastian County, AR, Comnty Junior,
Refunding + Improvement, AMBAC, 5.6s , 2017 1,500 1,514,265
Sherwood, AR, Residential Housing Facilities
Board, MBIA, 7.5s , 2011 1,250 1,490,762
-----------
$12,224,190
-------------------------------------------------------------------------------------
Airport and Port Revenue - 0.6%
Little Rock, AR, Airport Rev., FSA, 5.25s, 2019 $ 800 $ 772,768
-------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 13.4%
Jefferson County, AR, Pollution Control Rev.
(Arkansas Power & Light), 6.3s, 2018 $1,050 $ 1,052,709
North Little Rock, AR, Electric Rev.,
MBIA, 6.5s, 2010 2,000 2,218,280
North Little Rock, AR, Electric Rev.,
MBIA, 6.5s, 2015 6,000 6,715,500
Pope County, AR, Solid Waste Disposal Rev.
(Arkansas Power & Light), 8s, 2020 1,780 1,819,035
Pope County, AR, Solid Waste Disposal Rev.
(Arkansas Power & Light), FSA, 8s, 2021 3,000 3,081,240
Virgin Islands Water & Power Authority Rev.,
ASST GTY, 5.3s, 2018 1,250 1,218,850
-----------
$16,105,614
-------------------------------------------------------------------------------------
Health Care Revenue - 9.4%
Arkansas Development Finance Authority,
AMBAC, 5.375s, 2019 $1,315 $ 1,285,137
Baxter County, AR, Hospital Rev., 7.5s, 2021 3,145 3,375,088
Crittenden County, AR, 7.15s, 2025 750 763,215
Little Rock, AR, Health Facilities Board (Baptist
Medical Center), 6.9s, 2009 1,400 1,523,494
</TABLE>
<TABLE>
<CAPTION>
Municipal Bonds - continued
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Health Care Revenue - continued
Little Rock, AR, Health Facilities Board (Baptist
Medical Center), 7s, 2017 $3,250 $ 3,375,515
Pulaski County, AR, Hospital Rev. (Children's
Hospital), 6.15s, 2017 1,000 997,810
-----------
$11,320,259
-------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 7.6%
Blytheville, AR, Solid Waste Recycling &
Sewerage Treatment Rev. (Nucor), 6.375s, 2023 $3,565 $ 3,639,865
Camden, AR, Environmental Improvement Rev.
(International Paper), 7.625s, 2018 1,000 1,070,750
Jonesboro, AR, Industrial Development Rev.
(Anheuser-Busch), 6.5s, 2012 3,500 3,659,705
Pine Bluff, AR, Environmental Improvement Rev.
(International Paper Co.), 6.7s, 2020 300 309,564
Pine Bluff, AR, Environmental Improvement Rev.
(International Paper Co.), 5.55s, 2022 500 448,890
-----------
$ 9,128,774
-------------------------------------------------------------------------------------
Insured Health Care Revenue - 6.6%
Arkansas Development Finance Authority, Health
Facilities Rev. (Sisters of Mercy), MBIA, 5s, 2013 $4,340 $ 4,234,842
Arkansas Development Finance Authority, Health
Facilities Rev. (Sisters of Mercy), MBIA, 5s, 2019 4,000 3,679,920
-----------
$ 7,914,762
-------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 1.2%
Pope County, AR, Residential Housing Facilities
Board (Arkansas Tech University), 6s, 2027 $1,000 $ 896,610
West Memphis, AR, Public Facilities Board
Mortgage Rev., AMBAC, 0s, 2011 1,090 563,301
-----------
$ 1,459,911
-------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 3.5%
Little Rock, AR, Hotel & Restaurant Gross
Receipts Tax Rev., 7.375s, 2015 $2,790 $ 3,288,880
Territory of Virgin Islands, Public Finance
Authority, 5.5s, 2022 1,000 912,550
-----------
$ 4,201,430
-------------------------------------------------------------------------------------
Single Family Housing Revenue - 12.7%
Arkansas Development Finance Authority, 5.3s,
2023 $1,000 $ 1,001,440
Arkansas Development Finance Authority, Single
Family Mortgage Rev., GNMA, 7.4s, 2023 880 904,182
Arkansas Development Finance Authority, Single
Family Mortgage Rev., GNMA, 7.45s, 2027 990 1,011,830
Arkansas Development Finance Authority, Single
Family Mortgage Rev., GNMA, 6.7s, 2027 2,735 2,822,739
Arkansas Finance Authority Single Family,
Amt Mortgage Bkd Secs Program Series D,
5.85s, 2024 1,765 1,795,058
Jefferson County, AR, Health Care & Residential
Facilities Board, 7.25s, 2011 475 491,611
Lonoke County, AR, Residential Housing Facilities
Board, 7.375s, 2011 109 114,264
Lonoke County, AR, Residential Housing Facilities
Board, FNMA, 7.9s, 2011 483 519,137
Mississippi County, AR, Public Facilities Board,
Mortgage Rev., 7.2s, 2010 610 649,284
North Little Rock, AR, Residential Housing
Facilities Board, 0s, 2010 8,167 4,100,242
Pulaski County, AR, Public Facilities Board Rev.,
FNMA, 0s, 2014 2,750 1,292,555
</TABLE>
10 - MAR
<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
Saline County, AR, Residential Housing Facilities
Board, 7.875s, 2011 $ 455 $ 476,421
------------
$ 15,178,763
-------------------------------------------------------------------------------------
Solid Waste Revenue - 0.4%
Ashdown, AR, Pollution Control Rev. (Nekoosa
Papers, Inc.), 4.75s, 2008 $ 500 $ 462,370
-------------------------------------------------------------------------------------
Student Loan Revenue - 2.5%
Arkansas Student Loan Authority Rev., 7.15s, 2002 $ 95 $ 96,899
Arkansas Student Loan Authority Rev., 6.75s, 2006 765 778,074
Arkansas Student Loan Authority Rev., "B",
6.25s, 2010 2,000 2,067,900
------------
$ 2,942,873
-------------------------------------------------------------------------------------
Turnpike Revenue - 1.7%
Commonwealth of Puerto Rico Highway & Transit,
Series B, MBIA, 5.875s, 2021 $2,000 $ 2,067,380
-------------------------------------------------------------------------------------
Universities - 4.0%
Arkansas State University Rev., AMBAC, 5s, 2019 $1,000 $ 926,390
Conway, AR, Public Facilities Rev. (Hendrix
College), 5.85s, 2016 1,000 1,016,410
University of Arkansas Rev., MBIA, 5.05s, 2019 2,500 2,338,575
University of Arkansas Rev., Athletic Facilities
(Razorback Stadium), AMBAC, 4.85s, 2014 500 472,180
------------
$ 4,753,555
-------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 9.4%
Arkansas Development Finance Authority,
Revolving Loan Fund, 5.85s, 2019 $2,130 $ 2,175,539
Arkansas Development Finance Authority, Waste
Water Systems Rev., 4.875s, 2017 1,500 1,361,865
Arkansas Water Resources Development
Authority, 6.375s, 2021 1,000 1,014,900
Fort Smith, AR, AMBAC, 5.65s, 2019 1,000 1,005,040
Fort Smith, AR, Water & Sewer Rev., MBIA,
6s, 2012 2,250 2,345,333
South Sebastian County, AR, Water Users Assn.,
5.95s, 2016 2,425 2,431,838
South Sebastian County, AR, Water Users Assn.,
6.15s, 2023 1,000 1,002,570
------------
$ 11,337,085
-------------------------------------------------------------------------------------
Other - 0.5%
Arkansas Development Finance Authority,
Economic Development Rev., AMBAC,
5.65s, 2014 $ 600 $ 607,944
-------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $114,752,975) $118,672,475
-------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Floating Rate Demand Notes - 2.1%
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Burke County, GA, Development Authority,
Pollution Control Rev. Georgia Power Co.,
due 09/01/25 $ 200 $ 200,000
California Statewide Community Development
Authority (Sutter Health), due 07/01/15 200 200,000
Massachusetts Water Resources Authority,
due 10/04/00 100 100,000
Sevier County, TN, Public Building Authority,
due 10/05/00 500 500,000
Sevier County, TN, Public Building Authority,
due 10/05/00 400 400,000
Sevier County, TN, Public Building Authority,
due 10/05/00 1,100 1,100,000
-------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 2,500,000
-------------------------------------------------------------------------------------
Total Investments (Identified Cost, $117,252,975) $121,172,475
Other Assets, Less Liabilities - (1.0%) (1,199,135)
-------------------------------------------------------------------------------------
Net assets - 100.0% $119,973,340
-------------------------------------------------------------------------------------
</TABLE>
See portfolio footnotes and notes to financial statements.
11 - MAR
<PAGE>
Portfolio of Investments (Unaudited) - continued
MFS CALIFORNIA MUNICIPAL BOND FUND
Municipal Bonds - 98.8%
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 18.2%
Capistrano, CA, Unified School District,
FGIC, 5.875s, 2020 $1,185 $ 1,244,985
Corona, CA, Unified School District, "A",
FSA, 5.375s, 2018 1,350 1,362,191
Fresno, CA, Unified School District,
MBIA, 5.9s, 2019 1,960 2,120,661
Glendora, CA, Unified School District, "A",
5.7s, 2020 1,285 1,326,287
Glendora, CA, Unified School District, "A",
FSA, 5.35s, 2020 500 496,925
Irvine, CA, School District, AMBAC, 5.8s, 2020 3,500 3,622,780
Los Angeles, CA, RITES, 6.92s, 2014 ++++[dag] 5,405 5,842,535
Lucia Mar, CA, Unified School District,
FGIC, 0s, 2013 1,350 694,575
Morgan Hills, CA, Unified School District,
FGIC, 5.5s, 2020 2,545 2,582,157
Napa County, CA, Flood Protection & Watershed
Improvement Authority, FGIC, 5s, 2018 2,745 2,665,971
Rowland, CA, Unified School District, "A",
FSA, 5.5s, 2020 1,250 1,264,750
Sacramento, CA, School District, 5.875s, 2020 2,075 2,170,720
Santa Clara County, CA, San Jose-Evergreen
Community College, "B", FGIC, 5.5s, 2020 1,425 1,440,504
Santa Clara, CA, Unified School District,
FGIC, 5.5s, 2019 2,210 2,239,194
State of California, 10s, 2007 1,055 1,375,382
State of California, AMBAC, 7.2s, 2008 1,600 1,881,280
State of California, AMBAC, 6.3s, 2010 3,000 3,411,090
State of California, AMBAC, 7s, 2010 2,000 2,373,240
State of California, 5.5s, 2016 3,000 3,084,750
State of California, RITES, 5.92s, 2015 ++++[dag] 5,000 4,717,850
State of California, RITES, 7.92s, 2017 ++++[dag] 1,250 1,366,675
Tehachapi, CA, Unified School District,
FGIC, 5.625s, 2020 1,100 1,126,488
-----------
$48,410,990
-------------------------------------------------------------------------------------
State and Local Appropriation - 16.1%
Anaheim, CA, Public Finance Authority Rev.,
FSA, 6s, 2024 $1,000 $ 1,085,800
Banning, CA, Water System Improvement,
Certificates of Participation, AMBAC, 8s, 2019 1,000 1,293,800
California Infrastructure & Economic
Development, MBIA, 5.5s, 2019 1,000 1,016,770
California Public Works Board, Lease Rev.
(Department of Corrections), 7.4s, 2010 5,000 6,017,800
Carmichael, CA, Water District Rev., MBIA,
5.125s, 2019 3,000 2,937,390
Fortuna, Parlier & Susanville, CA, Certificates of
Participation, "B", 7.375s, 2017 930 957,863
Grossmont, CA, Union High School District,
Certificates of Participation, MBIA, 0s, 2006 6,000 4,522,500
Inglewood, CA, Public Financing Authority Rev.,
AMBAC, 5.625s, 2015 1,740 1,823,294
Los Angeles County, CA, Public Works, Multiple
Capital Facilities Project, AMBAC, 5.5s, 2020 2,970 3,001,423
Los Angeles, CA, Convention & Exhibition Center
Authority, Certificates of Participation, AMBAC,
0s, 2005 2,400 1,918,896
Pasadena, CA, Certificates of Participation
(Pasadena Parking Facilities), 6.25s, 2018 3,460 3,848,869
Pomona, CA, Public Financing Authority Rev.,
6.25s, 2010 4,020 4,298,586
</TABLE>
<TABLE>
<CAPTION>
Municipal Bonds - continued
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
State and Local Appropriation - continued
Riverside County, CA, Certificates of Participation,
MBIA, 5s, 2018 $1,230 $ 1,194,059
Sacramento County, CA, Certificates of
Participation, AMBAC, 5.75s, 2018 1,500 1,564,260
Sacramento, CA, City Financing Authority Rev.,
Capital Improvement, 5.5s, 2021 1,635 1,641,998
San Francisco, CA, City & County, (San Bruno
Jail), AMBAC, 5.25s, 2018 2,000 1,999,020
Visalia, CA, Utility Systems Department,
Certificates of Participation, MBIA, 0s, 2005 4,655 3,672,050
-----------
$42,794,378
-------------------------------------------------------------------------------------
Refunded and Special Obligations - 14.4%
California Health Facilities Financing Authority
Rev. (St. Joseph's Hospital), 6.75s, 2021 $2,710 $ 2,819,403
California Statewide Community Development
Authority, Certificates of Participation, 0s, 2007 3,645 2,636,356
California Statewide Community Development
Authority, Certificates of Participation, 0s, 2008 6,345 4,353,495
California Statewide Community Development
Authority (St. Joseph's Hospital), 6.625s, 2021 2,000 2,200,380
Corona, CA, Certificates of Participation (Corona
Community Hospital), 8s, 2015 585 671,802
Desert Hospital District, CA, Hospital Rev. (Desert
Hospital Corp.), 8.266s, 2020 ++++[dag] 3,000 3,312,630
Emeryville, CA, Public Financing Authority Rev.,
Redevelopment Project, 6.5s, 2021 770 811,472
Los Angeles, CA, Convention & Exhibition Center
Authority, Certificates of Participation, 9s, 2010 1,900 2,307,056
Pomona, CA, Single Family Mortgage Rev., FNMA,
GNMA, 7.375s, 2010 2,000 2,302,000
Pomona, CA, Single Family Mortgage Rev.,
FHLMC, GNMA, 7.5s, 2023 2,000 2,492,500
Southern California Public Power Transmission
Rev., "A", 0s, 2005 3,795 3,070,231
Thousand Oaks, CA, Redevelopment Agency
(Shadow Hills), 7s, 2021 8,890 9,556,572
Walnut Valley, CA, Unified School District, "B",
AMBAC, 6s, 2011 1,600 1,787,200
-----------
$38,321,097
-------------------------------------------------------------------------------------
Airport and Port Revenue - 7.7%
Los Angeles, CA, Department of Airport Rev.
(Ontario International Airport), FGIC, 6s, 2017 $4,100 $ 4,259,900
Los Angeles, CA, Harbor Department Rev.,
6.625s, 2025 2,000 2,080,260
Port Oakland, CA, Port Rev., MBIA, 6.5s, 2016 1,000 1,049,040
Port Oakland, CA, Port Rev., "K", FGIC, 5.75s, 2020 4,000 4,089,400
San Francisco, CA, City & County Airport
Commission, International Airport Rev., FSA,
5s, 2018 5,000 4,752,000
San Francisco, CA, City & County Airport
Commission, International Airport Rev., 6.5s, 2019 4,000 4,232,680
-----------
$20,463,280
-------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 3.4%
California Pollution Control Financing Authority
Rev. (Pacific Gas & Electric Co.), 6.625s, 2009 $1,000 $ 1,043,410
Glendale, CA, Electric Works Rev., MBIA,
5.75s, 2019 1,420 1,475,295
Glendale, CA, Electric Works Rev., MBIA,
5.75s, 2020 1,160 1,200,484
</TABLE>
12 - MCA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Electric and Gas Utility Revenue - continued
Los Angeles, CA, Department of Water & Power,
Electric Plant Rev., 7.1s, 2031 $1,050 $ 1,078,791
Northern California Power Agency, Public Power
Rev., 5.85s, 2010 880 933,856
Southern California Public Power Authority Rev.
(Southern Transmission Project), 0s, 2005 4,205 3,380,904
-----------
$ 9,112,740
-------------------------------------------------------------------------------------
Health Care Revenue - 2.1%
California Statewide Community Development
Authority Rev. (Childrens Hospital Los Angeles),
5.125s, 2019 $4,000 $ 3,692,120
Tahoe Forest, CA, Hospital District Rev.,
5.85s, 2022 1,000 860,930
Washington Township, CA, Health Care Rev.,
5s, 2018 1,000 892,890
-----------
$ 5,445,940
-------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 0.4%
California Pollution Control Financing Authority
Rev. (Frito-Lay, Inc.), 6.375s, 2004 $1,025 $ 1,058,282
California Pollution Control Financing Authority
Rev. (Laidlaw, Inc.), 6.7s, 2007 2,750 110,000
-----------
$ 1,168,282
-------------------------------------------------------------------------------------
Insured Health Care Revenue - 1.2%
Abag, CA, Finance Authority Rev. (Rhoda Haas
Goldman Plaza), 5.125s, 2015 $2,250 $ 2,176,222
California Health Facilities Financing Authority
Rev., (Marshall Hospital), 5.25s, 2018 1,000 982,660
-----------
$ 3,158,882
-------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 5.3%
California Housing Finance Agency Rev.
(Multi-Unit Rental Housing), 6.7s, 2015 $2,750 $ 2,870,257
California Statewide Community Development
Authority Rev. (Irvine Apartments), 5.25s, 2025 3,000 2,924,250
Palmdale, CA, Multi-Family Housing Rev.,
FNMA, 7.375s, 2024 1,000 1,043,150
San Bernardino County, CA, Housing Authority
Rev. (Equity Residential Redlands), 5.2s, 2029 3,000 2,972,880
Yolo County, CA, Housing Authority Mortgage Rev.
(Walnut Park Apartments), FHA, 7.2s, 2033 4,150 4,356,504
-----------
$14,167,041
-------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 1.2%
Territory of Virgin Islands, Public Finance
Authority, 5.875s, 2018 $1,500 $ 1,404,045
Territory of Virgin Islands, Public Finance
Authority, 5.5s, 2022 2,000 1,825,100
-----------
$ 3,229,145
-------------------------------------------------------------------------------------
Single Family Housing Revenue - 3.8%
California Housing Finance Agency Rev., Home
Mortgage, MBIA, 6s, 2010 $1,400 $ 1,469,272
California Housing Finance Agency Rev., Home
Mortgage, FSA, 0s, 2019 6,750 2,201,917
California Housing Finance Agency Rev., Home
Mortgage, MBIA, 0s, 2028 13,025 3,096,173
California Rural Home Mortgage Finance
Authority, Single Family Mortgage Rev.,
GNMA, 6.35s, 2029 1,000 1,046,410
</TABLE>
<TABLE>
<CAPTION>
Municipal Bonds - continued
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Single Family Housing Revenue - continued
California Rural Home Mortgage Finance
Authority, Single Family Mortgage Rev.,
GNMA, 6.1s, 2031 $ 500 $ 554,085
San Bernardino County, CA, Single Family
Mortgage Rev., GNMA, 6.45s, 2020 1,500 1,635,900
San Bernardino County, CA, Single Family
Mortgage Rev., GNMA, 7.65s, 2023 90 94,272
-----------
$10,098,029
-------------------------------------------------------------------------------------
Solid Waste Revenue - 1.2%
California Pollution Control Financing Authority,
Solid Waste Disposal Rev. (West Co. Resource
Recovery), 5.125s, 2014 $1,000 $ 920,450
South Bayside Waste Management, Solid Waste
Systems Rev., AMBAC, 5.75s, 2020 2,100 2,165,331
-----------
$ 3,085,781
-------------------------------------------------------------------------------------
Special Assessment District - 4.2%
Brea, CA, Public Finance Authority Rev.,
MBIA, 0s, 2005 $2,235 $ 1,790,146
Brea, CA, Public Finance Authority Rev.,
MBIA, 0s, 2006 3,415 2,608,513
Concord, CA, Redevelopment Agency, Tax
Allocation, BIGI, MBIA, 8s, 2018 40 40,373
Emeryville, CA, Public Financing Authority,
Redevelopment Project, 6.5s, 2021 1,230 1,254,366
Pomona, CA, Public Financing Authority Rev.,
5.75s, 2020 1,645 1,651,021
Santa Cruz County, CA, Redevelopment Agency
(Oak/Soquel Community), 5.6s, 2017 1,455 1,460,180
Walnut Valley, CA, Public Finance Authority
(Walnut Improvement), MBIA, 0s, 2007 1,150 833,980
Walnut Valley, CA, Public Finance Authority
(Walnut Improvement), MBIA, 0s, 2008 1,125 775,902
Walnut Valley, CA, Public Finance Authority
(Walnut Improvement), MBIA, 0s, 2009 1,175 769,942
-----------
$11,184,423
-------------------------------------------------------------------------------------
Turnpike Revenue - 3.1%
Foothill/Eastern Transportation Corridor Agency,
CA, 0s, 2011 $2,500 $ 2,283,475
Foothill/Eastern Transportation Corridor Agency,
CA, Toll Road Rev., MBIA, 5s, 2016 2,000 1,974,200
Los Angeles County, CA, Metropolitan
Transportation Authority, Sales Tax Rev.,
FSA, 5s, 2019 4,000 3,821,160
-----------
$ 8,078,835
-------------------------------------------------------------------------------------
Universities - 7.5%
California Education Facilities Authority
Rev. (California Western School of Law),
MBIA, 5s, 2018 $1,000 $ 971,000
California Education Facilities Authority Rev.
(College & University), 6s, 2012 1,400 1,461,810
California Education Facilities Authority Rev.
(College & University), 6.3s, 2021 1,000 1,026,500
California Education Facilities Authority Rev.
(Fresno Pacific University), 6.75s, 2019 1,500 1,610,115
California Education Facilities Authority Rev.
(L.A. College of Chiropractic), 5.6s, 2017 500 495,015
California Education Facilities Authority Rev.
(Pomona College), 5.875s, 2019 2,000 2,105,400
</TABLE>
13 - MCA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Universities - continued
California Educational Facilities Authority Rev.,
Pooled College & University, "B", 6.625s, 2020 $ 1,000 $ 1,061,710
California Public Works Board, Lease Rev.
(California Community Colleges), 5s, 2016 1,675 1,631,115
Los Angeles, CA, Certificates of Participation,
5.7s, 2018 1,900 1,858,580
San Francisco, CA, City & County, Educational
Facilities (Community College), 5.5s, 2014 1,000 1,038,590
San Francisco, CA, City & County, Educational
Facilities (Zoo Facilities), 5.5s, 2014 1,000 1,038,590
University of California Rev., RITES, MBIA,
6.107s, 2016 ++++[dag] 5,705 5,689,825
------------
$ 19,988,250
-------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 7.3%
California Department of Water Resources,
Central Valley Project Rev., 7s, 2012 $ 1,495 $ 1,811,821
Culver City, CA, Wastewater Facilities Rev.,
5.6s, 2019 1,000 1,024,140
El Monte, CA, Water Authority Rev., AMBAC,
6s, 2019 1,065 1,134,640
Fairfield-Suisun, CA, Sewer District Rev., MBIA,
0s, 2006 2,080 1,607,174
Metropolitan Water District, Linked Savers, RIBS,
5.75s, 2018 10,000 10,429,400
Metropolitan Water District, Waterworks Rev.,
5s, 2020 2,500 2,367,450
San Diego County, CA, Water Authority Rev.,
5s, 2017 1,000 976,670
------------
$ 19,351,295
-------------------------------------------------------------------------------------
Other - 1.7%
California Public Capital Improvements Financing
Authority Rev., MBIA, 8.1s, 2018 $ 1,735 $ 1,748,689
South Coast Air Quality Management District Rev.,
AMBAC, 0s, 2005 3,480 2,787,341
------------
$ 4,536,030
-------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $252,828,120) $262,594,418
Other Assets, Less Liabilities - 1.2% 3,142,277
-------------------------------------------------------------------------------------
Net assets - 100.0% $265,736,695
-------------------------------------------------------------------------------------
</TABLE>
See portfolio footnotes and notes to financial statements.
MFS FLORIDA MUNICIPAL BOND FUND
Municipal Bonds - 97.6%
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 18.8%
Dade County, FL, AMBAC, 7.125s, 2016 $ 1,380 $ 1,642,904
Florida Board of Education, Capital Outlay,
9.125s, 2014 2,600 3,464,760
Lee County, FL, Airport Rev., FSA, 5.875s, 2018 1,000 1,018,620
Orange County, FL, Tourist Development Tax,
AMBAC, 5.375s, 2018 1,000 984,580
Orlando, FL, Capital Improvement Special
Rev., 5s, 2017 3,575 3,367,257
Polk County, FL, Transport Improvement Revenue,
FSA, 5.625s, 2017 1,000 1,016,500
Puerto Rico Commonwealth, RITES, Pennsylvania
652A 1, MBIA, 7.939s, 2019, ++++[dag] 1,000 1,070,650
State of Florida, 5.593s, 2017, [dag] 3,000 2,612,820
------------
$ 15,178,091
-------------------------------------------------------------------------------------
State and Local Appropriation - 4.9%
Florida Board Of Education Lottery Revenue,
Series C, FGIC, 5.25s, 2017 $ 1,000 $ 975,810
Florida Municipal Loan Council Rev., MBIA,
5.625s, 2019 1,000 1,004,430
Florida Municipal Loan Council Rev.,
Series A, MBIA, 5.625s, 2020 1,000 1,002,280
Marion County, FL, Hospital District Rev.,
5.5s, 2014 1,000 957,910
------------
$ 3,940,430
-------------------------------------------------------------------------------------
Refunded and Special Obligations - 7.7%
Brevard County, FL, Health Facilities Authority Rev.
(Wuesthoff Memorial), MBIA, IBC, 7.2s, 2002 $ 1,000 $ 1,058,440
Charlotte County, FL, Utility Rev., FGIC,
6.875s, 2003 500 541,790
Escambia County, FL, Health Facility Rev. (Baptist
Hospital), 6.75s, 2003 785 846,748
Florida Board of Education, Capital Outlay, ETM,
9.125s, 2014 400 534,628
Florida Turnpike Authority Rev., "A" (Fitch Light),
AMBAC, 7.125s, 2001 1,250 1,299,613
Hillsborough County, FL, Capital Improvement Rev.
(County Center), 6.75s, 2002 1,500 1,584,330
Puerto Rico Electric Power Authority Rev., 7s, 2001 240 250,032
Puerto Rico Highway & Transportation Authority
Rev., 6.625s, 2002 100 105,471
------------
$ 6,221,052
-------------------------------------------------------------------------------------
Airport and Port Revenue - 7.3%
Broward County, FL, Airport Systems Rev.,
AMBAC, 4.8s, 2014 $ 1,000 $ 919,670
Greater Orlando Aviation Authority, FGIC,
5.25s, 2018 1,000 953,930
Hillsborough County, FL, Aviation Authority Rev.
(Delta Airlines), 6.8s, 2024 1,000 1,007,230
Hillsborough County, FL, Aviation Authority Rev.
(Tampa International), FGIC, 5.875s, 2015 750 771,442
Hillsborough County, FL, Aviation Authority Rev.
(US Air), 8.6s, 2022 300 311,037
Miami-Dade County, FL, Florida Aviation Rev.,
MBIA, 5.25s, 2018 1,500 1,430,895
Pensacola, FL, Airport Rev., MBIA, 5.625s, 2014 500 507,660
------------
$ 5,901,864
-------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 13.4%
Clark County NV Industrial Development Rev.,
Adjustment Adjusted Refunding Nevada Power
Company Series B, 5.9s, 2030 $ 500 $ 445,565
</TABLE>
14 - MFL
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Electric and Gas Utility Revenue - continued
Connecticut Development Authority, Pollution
Control Rev. (Connecticut Light & Power),
5.85s, 2028 $ 500 $ 463,765
Escambia County, FL, Utility Systems Rev., FGIC,
6.25s, 2015 1,500 1,648,695
Farmington, NM, Pollution Control, 5.8s, 2022 500 452,090
Hillsborough County, FL, Industrial Development
Rev. (Tampa Electric Co.), 8s, 2022 3,000 3,223,980
Orlando, FL, Utility Commission, Water and
Electric Rev., 6.75s, 2017, 1,500 1,726,650
Port St. Lucie, FL, Utility Rev., Capital
Appreciation, FGIC, 0s, 2021 2,405 742,423
Puerto Rico Electric Power Authority, FSA,
6s, 2016 2,000 2,088,980
------------
$ 10,792,148
-------------------------------------------------------------------------------------
Health Care Revenue - 3.7%
Brevard County, FL, Health Facilities Authority
Rev. (Friendly Village), 9.25s, 2012 $ 335 $ 338,423
Escambia County, FL, Health Facility Rev. (Baptist
Hospital), 6.75s, 2014 135 136,654
Escambia County, FL, Health Facility Rev., "B"
(Baptist Hospital), 6s, 2014 1,000 956,430
Highlands County, FL, Health Facilities Authority
Rev. (Adventist Health Systems), 5.25s, 2013 500 442,930
Jacksonville, FL, Health Facilities Authority,
Industrial Development Rev. (National Cypress),
7s, 2014 750 771,675
Orange County, FL, Industrial Development Rev.
(Friendly Village), 9.25s, 2012 335 335,908
------------
$ 2,982,020
-------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 2.6%
Escambia County, FL, Industrial Development Rev.
(Champion International), 6.8s, 2012 $ 1,000 $ 1,025,410
Escambia County, FL, Pollution Control Rev.
(Champion International), 6.95s, 2007 1,000 1,042,280
------------
$ 2,067,690
-------------------------------------------------------------------------------------
Insured Health Care Revenue - 7.8%
Brevard County, FL, Health Facilities Authority
Rev. (Wuesthoff Memorial), MBIA, 6.5s, 2007 $ 1,000 $ 1,044,590
Charlotte County, FL, Health Care Facilities Rev.
(Bon Secours), FSA, 7.407s, 2027, ++++ 2,500 2,545,800
Hillsborough County, FL, Industrial Development
Rev. (University Community Hospital), MBIA,
6.5s, 2019 1,000 1,111,390
Jacksonville, FL, Hospital Rev. (University Medical
Center), CNIE LEE, 6.6s, 2013 500 520,505
Tallahassee, FL, Health Facilities Rev. (Tallahassee
Memorial Regional Medical Center), MBIA,
6.625s, 2013 1,000 1,080,780
------------
$ 6,303,065
-------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 2.0%
Jacksonville, FL, Excise Taxes Rev., FGIC,
0s, 2010 $ 1,000 $ 589,960
Jacksonville, FL, Excise Taxes Rev., FGIC,
0s, 2011 1,000 555,480
Taylor County, FL, Sales Tax Rev., FGIC,
5.5s, 2020 500 495,185
------------
$ 1,640,625
-------------------------------------------------------------------------------------
Single Family Housing Revenue - 9.6%
Dade County, FL, Housing Finance Authority,
Mortgage Rev., "D", FSA, 6.95s, 2012 $ 180 $ 185,828
</TABLE>
<TABLE>
<CAPTION>
Municipal Bonds - continued
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Single Family Housing Revenue - continued
Dade County, FL, Housing Finance Authority,
Mortgage Rev., "E", GNMA, 7s, 2024 $ 60 $ 61,448
Florida Housing Finance Corp. Rev., Homeowner
Mortgage Series 4, FSA, 5.85s, 2031 1,000 1,014,870
Lee County, FL, Housing Finance Authority, Multi
County Program Series A1, GNMA, 7.2s, 2033 500 553,380
Lee County, FL, Housing Finance Authority Rev.,
GNMA, 7s, 2031 995 1,060,252
Lee County, FL, Housing Financing Authority Rev.,
GNMA/FNMA, 6.5s, 2031 700 732,347
Miami Dade County, FL, Housing Finance
Authority Rev., GNMA, 5.2s, 2031 1,000 991,720
Palm Beach County, FL, GNMA, 5.5s, 2022 985 986,044
Pinellas County, FL, Housing Finance Authority,
Amt Multi County Program Series B 1, GNMA,
7.25s, 2029 1,000 1,101,090
Pinellas County, FL, Housing Authority Rev.,
GNMA, 6.2s, 2031 995 1,026,701
------------
$ 7,713,680
-------------------------------------------------------------------------------------
Solid Waste Revenue - 2.3%
Tampa Bay, FL, Solid Waste System Rev. (McKay
Bay Refuse), AMBAC, 4.75s, 2017 $ 1,000 $ 883,120
Tampa, FL, Solid Waste Systems Rev., AMBAC,
5.25s, 2013 1,000 991,310
------------
$ 1,874,430
-------------------------------------------------------------------------------------
Special Assesment District - 1.6%
Arbor Greene, FL, Community Development
District, 5.75s, 2006 $ 465 $ 456,649
Heritage Isles, FL, Community Development
District, 5.75s, 2005 865 848,158
------------
$ 1,304,807
-------------------------------------------------------------------------------------
Turnpike Revenue - 4.3%
Florida Mid Bay Bridge Authority Rev.,
AMBAC, 0s, 2018 $ 1,000 $ 344,560
Florida Turnpike Authority, Turnpike Rev.
(Department of Transportation), 5.75s, 2018 2,000 2,035,840
Miami-Dade County, FL, Toll System Rev., FGIC,
6s, 2020 1,000 1,040,450
------------
$ 3,420,850
-------------------------------------------------------------------------------------
Universities - 3.2%
Florida Housing Finance Corp. Rev. (Crossing at
University Apartments), AMBAC, 5.1s, 2018 $ 1,250 $ 1,149,575
Miami-Dade County, FL, Educational Facilities
Authority Rev., AMBAC, 5.5s, 2018 1,400 1,398,236
------------
$ 2,547,811
-------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 8.4%
Bay County Water Systems Revenue, AMBAC,
5.625s, 2019 $ 1,000 $ 1,008,850
Lee County, FL, Industrial Development Authority
Rev. (Bonita Springs Utilities Project), MBIA,
6.05s, 2015 1,000 1,035,910
Miramar, FL, Wastewater Improvement Rev., FGIC,
6.75s, 2016 955 1,039,613
Seminole County, FL, Water & Sewer Rev., MBIA,
6s, 2019 2,060 2,194,292
Seminole County, FL, Water & Sewer Rev., MBIA,
6s, 2019 940 996,033
</TABLE>
15 - MFL
<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
Sweetwater County, WY, Solid Waste Disposal
Rev., "A" (FMC Corp.), 7s, 2024 $500 $ 507,300
------------
$ 6,781,998
-------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $77,650,721) $ 78,670,561
-------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.6%
-------------------------------------------------------------------------------------
Gulf Breeze, FL, due 10/02/00 $100 $ 100,000
Pinellas County, FL, Health Facility Authority,
due 10/04/00 400 400,000
-------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 500,000
-------------------------------------------------------------------------------------
Total Investments (Identified Cost, $78,150,721) $ 79,170,561
Other Assets, Less Liabilities - 1.8% 1,465,735
-------------------------------------------------------------------------------------
Net assets - 100.0% $ 80,636,296
-------------------------------------------------------------------------------------
</TABLE>
See portfolio footnotes and notes to financial statements.
<TABLE>
<CAPTION>
MFS GEORGIA MUNICIPAL BOND FUND
Municipal Bonds - 97.6%
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 13.0%
Commonwealth of Puerto Rico, Municipal Finance
Agency, 8.42s, 2016, ++++ [dag] $ 500 $ 564,460
Dalton, GA, Development Authority Rev.,
MBIA, 5.5s, 2017 1,000 1,012,980
Forsyth County, GA, School District, 6s, 2015 750 803,190
Fulton County, GA, School District, 6.375s, 2010 2,000 2,222,340
Fulton County, GA, School District, 6.375s, 2012 1,000 1,117,500
Fulton County, GA, School District, 6.375s, 2016 1,000 1,108,340
Rockland County, GA, Hospital Authority
Rev. (Ty Cobb Healthcare Systems, Inc.),
AMBAC, 5.625s, 2020 500 499,525
State of Georgia, 5s, 2019 1,000 933,590
----------
$8,261,925
-------------------------------------------------------------------------------------
State and Local Appropriation - 11.4%
Columbia County, GA (Courthouse/Detention
Center), 5.625s, 2020 $1,490 $1,471,584
Fayette County, GA, Public Facilities Authority
Rev. (Criminal Justice Center), 6.25s, 2019 755 803,962
Fulton County, GA, Facilities Corp.,
AMBAC, 5.5s, 2018 750 743,940
Fulton County, GA, Facilities Corp.,
AMBAC, 5.9s, 2019 1,000 1,030,090
Georgia Municipal Assn., Inc., Installment
Sale Program (Atlanta Detention Center),
FSA, 5s, 2014 3,350 3,249,600
----------
$7,299,176
-------------------------------------------------------------------------------------
Refunded and Special Obligations - 8.5%
Fulton County, GA, Water & Sewage Rev.,
6.375s, 2014 $3,150 $3,487,270
Royston, GA, Hospital Authority Rev. (Ty Cobb
Healthcare Systems, Inc.), 7.375s, 2014 1,565 1,629,118
Territory of Virgin Islands, 7.75s, 2016 275 284,213
----------
$5,400,601
-------------------------------------------------------------------------------------
Airport and Port Revenue - 9.5%
Atlanta, GA, Airport Facilities Rev., AMBAC,
0s, 2010 $6,000 $3,522,660
Atlanta, GA, Airport Facilities Rev., MBIA,
0s, 2010 3,500 2,054,885
Commonwealth of Puerto Rico, Ports Authority
Rev. (American Airlines, Inc.), 6.25s, 2026 500 503,540
----------
$6,081,085
-------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 7.6%
Appling County, GA, Development Authority Rev.
(Ogelthorpe Power Corp.), MBIA, 7.15s, 2021, ### $1,400 $1,494,766
Georgia Municipal Electric Authority, Power Rev.,
AMBAC, 0s, 2013 1,675 862,056
Georgia Municipal Electric Authority, Power Rev.,
MBIA, 6.5s, 2020 1,250 1,384,487
Monroe County, GA, Development Authority,
Pollution Control Rev. (Oglethorpe Power Corp.),
6.8s, 2012 1,000 1,088,640
----------
$4,829,949
-------------------------------------------------------------------------------------
Health Care Revenue - 2.5%
Richmond County, GA, Development Authority,
Nursing Home Rev. (Beverly Enterprises, Inc.),
8.75s, 2011 $1,190 $1,254,701
Royston, GA, Hospital Authority Rev. (Ty Cobb
Healthcare Systems, Inc.), 6.125s, 2009 330 308,441
----------
$1,563,142
-------------------------------------------------------------------------------------
</TABLE>
16 - MGA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Revenue (Corporate Guarantee) - 6.3%
Cartersville, GA, Developement Authority Rev.,
Water & Wastewater Facilities (Anheuser-Busch
Cos., Inc.), 5.625s, 2009 $ 1,500 $ 1,531,500
Savannah, GA, Economic Development Authority
Rev. (Hershey Foods Corp.), 6.6s, 2012 1,150 1,197,035
Savannah, GA, Economic Development Authority
Rev. (Stone Container Corp.), 7.4s, 2026 300 299,418
Savannah, GA, Economic Development Authority
Rev. (Union Camp Corp.), 6.15s, 2017 1,000 1,002,570
-----------
$ 4,030,523
-------------------------------------------------------------------------------------
Insured Health Care Revenue - 2.0%
Savannah, GA, Hospital Authority Rev.
(St. Josephs/Candler Health Systems, Inc.),
FSA, 5s, 2018 $ 1,400 $ 1,275,792
-------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 6.1%
Cobb County, GA, Housing Authority Rev.
(Signature Place Corp.), 6.875s, 2017 $ 1,385 $ 1,432,395
Hinesville, GA, Leased Housing Corp. Rev.
(Baytree Apartments), FHA, 6.7s, 2017 900 940,158
St. Mary's, GA, Housing Authority Rev.
(Cumberland Oaks Apartments),
FNMA, 7.375s, 2022 1,470 1,494,078
-----------
$ 3,866,631
-------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 1.5%
Territory of Virgin Islands, Public Finance
Authority, 5.5s, 2018 $ 1,000 $ 988,610
-------------------------------------------------------------------------------------
Single Family Housing Revenue - 5.1%
Georgia Housing & Finance Authority Rev.,
6.05s, 2019 $ 1,000 $ 1,013,930
Georgia Housing & Finance Authority Rev.,
5.2s, 2020 1,000 999,960
Georgia Housing & Finance Authority Rev.,
5.8s, 2021 750 737,378
Georgia Housing & Finance Authority Rev.,
0s, 2031 2,680 274,378
Georgia Residential Finance Authority Rev.,
FHA, 7.25s, 2021 220 228,943
-----------
$ 3,254,589
-------------------------------------------------------------------------------------
Universities - 7.1%
Fulton County, GA, Development Authority Rev.
(Morehouse College), 6.25s, 2021 $ 980 $ 1,037,026
Georgia Private Colleges & University Authority
Rev. (Emory University), 5.75s, 2016 1,000 1,029,540
Georgia Private Colleges & University Authority
Rev. (Emory University) "A", 5.75s, 2018 1,000 1,023,400
Marietta, GA, Development Authority Rev.
(Southern Polytech University), 6.25s, 2027 1,000 930,950
Savannah, GA, Economic Development Authority
Rev. (College Of Art & Design, Inc.), 6.2s, 2009 500 516,415
-----------
$ 4,537,331
-------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 16.2%
Alanta, GA, Water & Wastewater Rev.,
FGIC, 6.593s, 2016, ++++ [dag] $ 4,000 $ 4,166,160
Cartersville, GA, Water and Sewer Rev.,
AMBAC, 7.2s, 2012 2,225 2,282,605
Clayton County & Clayton County, GA, Water
& Sewage Authority Rev., 6.25s, 2017 1,000 1,099,130
Columbia County, GA, Water & Sewage Rev.,
FGIC, 6.25s, 2018 470 498,769
</TABLE>
<TABLE>
<CAPTION>
Municipal Bonds - continued
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Water and Sewer Utility Revenue - continued
Forsyth County, GA, Water & Sewage Authority
Rev., 6.25s, 2018 $ 1,105 $ 1,179,322
Fulton County, GA, Water & Sewage Authority
Rev., FGIC, 6.375s, 2014 100 109,764
Gainesville, GA, Water & Sewage Authority Rev.,
FGIC, 5.625s, 2019 1,000 1,001,360
-----------
$10,337,110
-------------------------------------------------------------------------------------
Other - 0.8%
Clayton County, GA, Development Authority Rev.,
6.25s, 2020 $ 500 $ 532,135
-------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $60,539,148) $62,258,599
-------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.6%
-------------------------------------------------------------------------------------
Appling County, GA, Development Authority, due
10/02/00, at Amortized Cost and Value $ 400 $ 400,000
-------------------------------------------------------------------------------------
Total Investments (Identified Cost, $60,939,148) $62,658,599
Other Assets, Less Liabilities - 1.8% 1,133,390
-------------------------------------------------------------------------------------
Net assets - 100.0% $63,791,989
-------------------------------------------------------------------------------------
</TABLE>
See portfolio footnotes and notes to financial statements.
17 - MGA
<PAGE>
Portfolio of Investments (Unaudited) - continued
MFS MARYLAND MUNICIPAL BOND FUND
Municipal Bonds - 98.3%
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 21.7%
Anne Arundel County, MD, 5s, 2015 $ 2,000 $ 1,921,140
Baltimore, MD, Consolidated Public Improvement,
MBIA, 7s, 2009 1,000 1,159,210
Baltimore, MD, Consolidated Public Improvement,
7.15s, 2009 2,120 2,465,412
Baltimore, MD, Consolidated Public Improvement,
FGIC, 5.375s, 2011 900 926,442
Baltimore, MD, Consolidated Public Improvement,
FGIC, 5.375s, 2013 770 783,852
Baltimore, MD, Consolidated Public Improvement,
"A", 5.5s, 2018 1,700 1,697,841
Frederick County, MD, Public Facilities,
5.25s, 2016 2,000 1,961,620
Howard County, MD, Metropolitan District,
0s, 2008 1,000 677,960
Howard County, MD, Consolidated Public
Improvement, "A", 5.5s, 2019 1,000 997,530
Howard County, MD, Consolidated Public
Improvement, "A", 5.5s, 2020 2,000 1,992,640
Maryland, State & Local Facilities, 5.75s, 2014 1,550 1,623,067
Montgomery County, MD, Consolidated Public
Improvement, 5.75s, 2018 2,000 2,059,120
Prince George's County, MD, 0s, 2007 5,110 3,668,622
Prince George's County, MD, Consolidated Public
Improvement, FSA, 5.375s, 2015 1,500 1,513,620
Puerto Rico Municipal Finance Agency,
FSA, 7.42s, 2019 ++++ [dag] 1,000 1,016,040
Washington, MD, Suburban Sanitation District,
6.1s, 2015 1,070 1,112,896
Washington, MD, Suburban Sanitation District,
5.25s, 2016 865 852,951
Worcester County, MD, Public Improvement,
5.625s, 2013 1,620 1,679,406
Worcester County, MD, Public Improvement,
5.625s, 2015 2,030 2,076,304
-----------
$30,185,673
-------------------------------------------------------------------------------------
State and Local Appropriation - 9.5%
Howard County, MD, Certificates of Participation,
8.15s, 2021 $ 450 $ 593,050
Howard County, MD, Certificates of Participation,
"A", 8s, 2019 805 1,029,402
Howard County, MD, Certificates of Participation,
"B", 8s, 2019 385 492,323
Howard County, MD, Certificates of Participation,
"C", 8s, 2019 680 869,557
Maryland Stadium Authority, Sports Facilities
Leasing Rev., AMBAC, 5.875s, 2012 1,000 1,045,340
Prince George's County, MD, Certificates
of Participation, MBIA, 0s, 2005 2,495 1,987,767
Prince George's County, MD, Certificates
of Participation, MBIA, 0s, 2006 2,490 1,886,075
Prince George's County, MD, Industrial
Development Authority, MBIA, 0s, 2004 980 821,642
Prince George's County, MD, Industrial
Development Authority, MBIA, 0s, 2006 1,800 1,363,428
Prince George's County, MD, Industrial
Development Authority, MBIA, 0s, 2009 1,500 969,030
Puerto Rico Public Finance Corp., AMBAC,
7.17s, 2013 ++++ [dag] 500 552,370
Puerto Rico Public Finance Corp., AMBAC,
7.17s, 2016 ++++ [dag] 1,520 1,613,966
-----------
$13,223,950
-------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Municipal Bonds - continued
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Refunded and Special Obligations - 10.9%
Maryland Health & Higher Education Facilities
Authority Rev. (Good Samaritan Hospital),
5.7s, 2009 $ 1,085 $ 1,149,981
Maryland Health & Higher Education Facilities
Authority Rev. (Howard County General
Hospital), 5.5s, 2021 4,000 3,941,080
Maryland Health & Higher Education Facilities
Authority Rev. (Kennedy Institute), 6.75s, 2022 500 508,620
Maryland Health & Higher Education Facilities
Authority Rev. (University of Maryland Medical
System), FGIC, 7s, 2017 1,840 1,911,374
Maryland Health & Higher Education Facilities
Authority Rev. (University of Maryland Medical
System), FGIC, 6.5s, 2021 1,000 1,015,810
Morgan, MD, State University Academic &
Auxiliary Facilities & Fees Rev., MBIA, 0s, 2006 1,135 861,022
Morgan, MD, State University Academic &
Auxiliary Facilities & Fees Rev., MBIA, 0s, 2008 1,400 955,906
Prince George's County, MD, Hospital Rev.
(Dimensions Health Corp.), 7.25s, 2017 2,000 2,130,760
Puerto Rico Aqueduct & Sewer Authority Rev.,
10.25s, 2009 470 595,570
Puerto Rico Electric Power Authority Rev.,
7s, 2011 1,000 1,041,800
Washington, MD, Suburban Sanitation District,
6.9s, 2013 1,045 1,082,693
-----------
$15,194,616
-------------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 2.2%
Guam Power Authority Rev., AMBAC,
6.236s, 2015 ++++ [dag] $ 1,680 $ 1,692,701
Puerto Rico Electric Power Authority, Power Rev.,
FSA, 6.92s, 2015 ++++ [dag] 1,400 1,416,772
-----------
$ 3,109,473
-------------------------------------------------------------------------------------
Health Care Revenue - 4.7%
Berlin, MD, Hospital Rev. (Atlantic General
Hospital), 8.375s, 2022 $ 1,287 $ 1,297,034
Maryland Health & Higher Education Facilities
Authority Rev. (Bradford Oaks Center),
6.375s, 2027 1,500 1,233,030
Maryland Health & Higher Education Facilities
Authority Rev. (Catholic Health Initiatives),
6s, 2020 1,000 1,017,120
Maryland Health & Higher Education Facilities
Authority Rev. (Doctors Community Hospital),
5.5s, 2024 1,000 790,090
Maryland Health & Higher Education Facilities
Authority Rev. (Johns Hopkins Hospital), 0s, 2010 2,000 1,165,280
Maryland Health & Higher Educational Facilities
Authority Rev. (University Maryland Medical),
6.625s, 2020 1,000 1,027,970
-----------
$ 6,530,524
-------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 2.2%
Baltimore, MD, Port Facilities Rev. (DuPont (E.I.)
de Nemours), 6.5s, 2011 $ 1,500 $ 1,573,755
Northeast Maryland Waste Disposal Authority
Resources Recovery Rev. (Baltimore Resco
Retrofit), 5s, 2012 1,000 837,990
Upper Potomac, MD, River Commission, Pollution
Control Rev. (Westvaco), 10.5s, 2004 150 150,690
</TABLE>
18 - MMD
<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
Upper Potomac, MD, River Commission, Pollution
Control Rev. (Westvaco), 9.125s, 2015 $ 500 $ 504,120
------------
$ 3,066,555
-------------------------------------------------------------------------------------
Insured Health Care Revenue - 4.6%
Maryland Health & Higher Education Facilities
Authority Rev. (Frederick Memorial Hospital),
FGIC, 5.25s, 2013 $2,850 $ 2,851,454
Maryland Health & Higher Education Facilities
Authority Rev. (Upper Chesapeake Hospital),
FSA, 5.5s, 2020 2,000 1,950,920
Maryland Industrial Development Finance
Authority, Economic Development Rev. (Bon
Secours Health System), FSA, 7.366s, 2022 ++++ 1,400 1,524,306
------------
$ 6,326,680
-------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 3.6%
Baltimore, MD, City Housing, FHA, 7.75s, 2009 $ 780 $ 786,825
Baltimore, MD, City Housing, FNMA, 7.25s, 2023 1,175 1,176,598
Maryland Community Development Administration,
7.375s, 2021 330 338,887
Maryland Community Development Administration,
0s, 2032 11,605 1,006,618
Maryland Community Development Administration,
7.8s, 2032 1,190 1,215,858
Montgomery County, MD, Housing Opportunities
Commission, 7.375s, 2032 440 451,867
------------
$ 4,976,653
-------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 1.3%
Territory of Virgin Islands, Public Finance
Authority, 5.875s, 2018 $1,000 $ 936,030
Territory of Virgin Islands, Public Finance
Authority, 5.5s, 2022 1,000 912,550
------------
$ 1,848,580
-------------------------------------------------------------------------------------
Single Family Housing Revenue - 8.0%
Maryland Community Development Administration,
5.875s, 2016 $1,845 $ 1,891,402
Maryland Community Development Administration,
6.05s, 2020 1,000 1,007,460
Maryland Community Development Administration,
6.2s, 2020 2,500 2,540,775
Maryland Community Development Administration,
7.3s, 2025 760 777,305
Maryland Community Development Administration,
6.75s, 2026 2,235 2,310,319
Prince George's County, MD. Housing Authority
Rev., GNMA\FNMA, 5.375s, 2018 4.8s to 2000,
5.375s to 2018 995 978,682
Prince George's County, MD. Housing Authority
Rev., "A", 6s, 2032 1,500 1,648,635
------------
$ 11,154,578
-------------------------------------------------------------------------------------
Solid Waste Revenue - 5.6%
Northeast Maryland, Waste Disposal Authority
(Montgomery County), 6s, 2006 $1,100 $ 1,154,516
Northeast Maryland, Waste Disposal Authority
(Montgomery County), MBIA, 6.3s, 2016 2,000 2,063,280
Northeast Maryland Waste Disposal Authority
(Southwest County Resource Recovery),
MBIA, 7.2s, 2005 1,000 1,092,100
</TABLE>
<TABLE>
<CAPTION>
Municipal Bonds - continued
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Solid Waste Revenue - continued
Prince George's County, MD (Solid Waste
Management), FSA, 5.25s, 2013 $3,500 $ 3,476,130
------------
$ 7,786,026
-------------------------------------------------------------------------------------
Turnpike Revenue - 0.8%
Puerto Rico Highway & Transportation Authority,
5.5s, 2013 $1,000 $ 1,043,450
-------------------------------------------------------------------------------------
Universities - 12.2%
Annapolis, MD, Economic Development Rev.
(St. John's College), 5.5s, 2018 $ 750 $ 707,992
Maryland Economic Development Corp., Student
Housing Rev. (Salibury), 6s, 2019 1,000 998,650
Maryland Economic Development Corp., Student
Housing Rev. (Towson Sera), 5.75s, 2029 1,000 917,460
Maryland Health & Higher Education Facilities
Authority Rev. (John Hopkins University),
5.125s, 2020 6,000 5,640,420
Maryland Health & Higher Education Facilities
Authority Rev. (John Hopkins University),
5.625s, 2027 1,400 1,397,158
Maryland Health & Higher Education Facilities
Authority Rev. (Loyola College), MBIA, 5.5s, 2016 3,000 3,011,640
Maryland Health & Higher Education Facilities
Authority Rev. (Mercy Medical Center), FSA,
5.625s, 2017 1,800 1,803,726
Morgan, MD, State University, Academic &
Auxiliary Facilities Rev., MBIA, 6.05s, 2015 1,500 1,616,865
University of Maryland, Auxillary Facilities &
Tuition Rev., 0s, 2004 1,000 828,480
------------
$ 16,922,391
-------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 6.0%
Baltimore, MD, Wastewater Rev., FGIC, 6s, 2015 $1,000 $ 1,072,830
Baltimore, MD, Wastewater Rev., MBIA,
5.65s, 2020 ++++ 2,000 2,025,600
Baltimore, MD, Wastewater Rev., MBIA,
6.613s, 2020 ++++ 3,000 3,087,870
Washington Suburban San District Maryland,
General Construction, 5.25s, 2018 1,060 1,032,398
Washington Suburban San District Maryland,
General Construction, 5.25s, 2019 1,120 1,086,097
------------
$ 8,304,795
-------------------------------------------------------------------------------------
Other - 5.0%
Baltimore County, MD, 5.375s, 2013 $1,600 $ 1,602,832
Maryland Industrial Development Finance
Authority (American Center for Physics),
6.625s, 2017 1,500 1,535,790
Maryland Industrial Development Finance
Authority (YMCA/Baltimore), 8s, 2012 2,825 3,075,041
Maryland Industrial Development Finance
Authority (YMCA/Baltimore), 8.25s, 2012 755 783,077
------------
$ 6,996,740
-------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $132,382,572) $136,670,684
-------------------------------------------------------------------------------------
</TABLE>
19 - MMD
<PAGE>
Portfolio of Investments (Unaudited) - continued
Floating Rate Demand Notes - 0.3%
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Sevier County, TN, Public Building Authority, due
10/05/00, at Amortized Cost and Value $400 $ 400,000
-------------------------------------------------------------------------------------
Total Investments (Identified Cost, $132,782,572) $137,070,684
Other Assets, Less Liabilities - 1.4% 1,993,459
-------------------------------------------------------------------------------------
Net assets - 100.0% $139,064,143
-------------------------------------------------------------------------------------
</TABLE>
See portfolio footnotes and notes to financial statements.
MFS MASSACHUSETTS MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Municipal Bonds - 98.5%
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
General Obligation - 19.1%
Belmont, MA, 5s, 2015 $2,165 $ 2,076,668
Boston, MA, 5.75s, 2019 3,745 3,802,111
Brookline MA, 5.375s, 2019 2,000 1,964,140
Commonwealth of Massachusetts,
MBIA, 7.5s, 2004 2,850 3,062,240
Commonwealth of Massachusetts, 0s, 2004 1,080 883,526
Commonwealth of Massachusetts, 6s, 2013 125 134,401
Commonwealth of Massachusetts, 6s, 2015 3,000 3,190,800
Commonwealth of Massachusetts, 5.875s, 2017 1,000 1,039,980
Dudley-Charlton, MA, RITES, Regional School
District, FGIC, 6.241s, 2015 ++++[dag] 1,365 1,348,934
Dudley-Charlton, MA, RITES, Regional School
District, FGIC, 6.241s, 2016 ++++[dag] 1,430 1,412,568
Dudley-Charlton, MA, RITES, Regional School
District, FGIC, 6.241s, 2018 ++++[dag] 1,565 1,502,400
Fitchburg, MA, MBIA, 5s, 2015 1,000 964,880
Holyoke, MA, 8s, 2001 55 55,781
Lawrence, MA, AMBAC, 9.75s, 2002 250 268,035
Lowell, MA, 8.4s, 2009 1,000 1,030,090
Lynn, MA, AMBAC, 5.125s, 2018 3,690 3,488,194
Massachusetts, Consolidated Loan Series B,
5.625s, 2018 2,000 2,008,440
Massachusetts, Consolidated Loan Series B,
5.75s, 2020 1,000 1,015,710
Middleborough, MA, FGIC, 5.6s, 2014 75 77,371
Narragansett, MA, Regional School District,
AMBAC, 6s, 2019 1,720 1,794,012
Northbridge, MA, 7.6s, 2001 125 127,835
Springfield, MA, Municipal Purpose Loan,
FSA, 6.25s, 2019 2,100 2,230,032
Sutton, MA, MBIA, 5.5s, 2017 1,000 1,001,280
Sutton, MA, MBIA, 5.5s, 2019 1,000 993,010
Tantasqua, MA, Regional School District,
FSA, 5.375s, 2016 2,000 1,983,660
Westford, MA, FGIC, 5.25s, 2020 2,250 2,157,052
Weymouth, MA, Municipal Purpose Loan,
MBIA, 5.375s, 2020 1,250 1,210,488
Worcester, MA, FSA, 6s, 2016 3,155 3,340,577
-----------
$44,164,215
-------------------------------------------------------------------------------------
State and Local Appropriation - 10.7%
Massachusetts Bay Transport Authority, RITES,
Pennsylvania 675A 1, 8.161s, 2016 ++++[dag] $4,835 $ 5,716,614
Massachusetts Bay Transportation Authority,
7s, 2021, 5,000 5,840,750
Massachusetts Bay Transportation Authority,
Assmnt Series A, 5.75s, 2018 3,780 3,859,758
Massachusetts Bay Transportation Authority
(General Transportation Systems), 6.2s, 2016 400 435,736
Plymouth County, MA, Correctional Facilities,
AMBAC, 5.125s, 2018[dag] 5,000 4,659,200
Puerto Rico Public Finance Corp., RITES,
AMBAC, 7.17s, 2016 ++++[dag] 2,500 2,654,550
Route 3 North Transport Improvement Associates,
MBIA, 5.75s, 2017 100 102,330
Route 3 North Transport Improvement Associates,
MBIA, 5.625s, 2020 1,500 1,497,105
-----------
$24,766,043
-------------------------------------------------------------------------------------
Refunded and Special Obligations - 17.1%
Commonwealth of Massachusetts, ETM, 0s, 2004 $8,170 $ 6,712,962
Commonwealth of Massachusetts, ETM, 0s, 2005 2,000 1,579,400
Commonwealth of Massachusetts, ETM, 0s, 2005 2,000 1,553,980
</TABLE>
20 - MMA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Refunded and Special Obligations - continued
Commonwealth of Massachusetts,
AMBAC, 6.75s, 2001 $2,350 $ 2,441,368
Commonwealth of Massachusetts, FGIC,
ETM, 7s, 2009 1,150 1,323,800
Commonwealth of Massachusetts, Water
Resources Authority, MBIA, 5.25s, 2004 50 52,177
Greater Lawrence, MA, San District,
MBIA, 5.625s, 2020 1,940 1,943,162
Haverhill, MA, FGIC, 7s, 2002 1,250 1,325,275
Holyoke, MA, MBIA, 8s, 2001 1,500 1,537,050
Holyoke, MA, MBIA, 8.1s, 2002 500 543,215
Mansfield, MA, FSA, 5.375s, 2017 1,170 1,155,890
Martha's Vineyard, MA, Land Bank
(Land Acquisition), 8.125s, 2001 3,200 3,304,192
Massachusetts Health & Education Facilities
Authority (Fairview Extended Care Facility),
10.25s, 2001 2,000 2,086,780
Massachusetts Health & Education Facilities
Authority (Massachusetts Eye & Ear Infirmary),
7.375s, 2001 3,000 3,122,220
Massachusetts Health & Education Facilities
Authority (New England Deaconess Hospital),
6.875s, 2002 2,350 2,476,430
Massachusetts Industrial Finance Agency
(Curry College), 8s, 2004 470 535,969
Massachusetts Industrial Finance Agency
(Curry College), 8s, 2004 1,720 1,949,689
Massachusetts Industrial Finance Agency
(Dexter School), 7.5s, 2001 1,430 1,483,553
Massachusetts Industrial Finance Agency
(Emerson College), 8.9s, 2001 1,000 1,030,310
Massachusetts Industrial Finance Agency
(Vinfen Corp.), 7.1s, 2003 635 692,709
Massachusetts Port Authority, ETM, 12.75s, 2002 230 247,016
Massachusetts Port Authority, ETM, 13s, 2013 780 1,220,965
Nantucket Island, MA, Land Bank, 7.75s, 2001 1,200 1,252,584
-----------
$39,570,696
-------------------------------------------------------------------------------------
Airport and Port Revenue - 5.8%
Massachusetts Port Authority (USAIR),
MBIA, 5.625s, 2011 $1,140 $ 1,173,334
Massachusetts Port Authority, 5s, 2015 5,600 5,323,080
Massachusetts Port Authority, 6s, 2015 900 951,003
Massachusetts Port Authority, 6.125s, 2017 1,460 1,548,724
Massachusetts Port Authority (US Airways),
MBIA, 5.875s, 2016 1,900 1,933,934
Puerto Rico Ports Authority (American Airlines),
6.3s, 2023 2,370 2,388,533
-----------
$13,318,608
-------------------------------------------------------------------------------------
Health Care Revenue - 9.4%
Boston, MA, Industrial Development Finance
Authority Rev. (Stonehedge Convalescent
Center), 10.75s, 2011 $ 570 $ 578,915
Massachusetts Health & Education Facilities
Authority (Caritas Christi), 5.7s, 2015 980 858,108
Massachusetts Health & Education Facilities
Authority (Children's Hospital), 6.125s, 2012 2,285 2,343,770
Massachusetts Health & Education Facilities
Authority (Jordan Hospital), 5.25s, 2018 2,555 2,069,371
Massachusetts Health & Education Facilities
Authority (North Adams Regional Hospital),
6.625s, 2018 975 907,530
</TABLE>
<TABLE>
<CAPTION>
Municipal Bonds - continued
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Health Care Revenue - continued
Massachusetts Health & Education Facilities
Authority (South Shore Hospital), 5.625s, 2019 $1,970 $ 1,833,420
Massachusetts Industrial Finance Agency
(Beverly Enterprises), 8.375s, 2009 4,040 4,232,950
Massachusetts Industrial Finance Agency
(Evanswood), 7.625s, 2014 1,200 636,000
Massachusetts Industrial Finance Agency
(Massachusetts Biomedical Research), 0s, 2004 5,000 4,144,000
Massachusetts Industrial Finance Agency
(Massachusetts Biomedical Research), 0s, 2010 5,300 3,130,286
Massachusetts Industrial Finance Agency
(Needham/Hamilton House), 11s, 2010 400 411,300
Massachusetts Industrial Finance Agency
(WNR, Inc.), 9s, 2023 920 736,000
-----------
$21,881,650
-------------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 1.5%
Massachusetts Development Finance Agency
(Springfield Resources Recovery), 5.625s, 2019 $1,675 $ 1,589,893
Massachusetts Industrial Finance Agency
(Welch Foods, Inc.), 5.6s, 2017 1,700 1,587,188
Springfield, MA, Industrial Development Finance
Agency (Terminal Building), 8s, 2001 279 279,271
-----------
$ 3,456,352
-------------------------------------------------------------------------------------
Insured Health Care Revenue - 1.6%
Boston, MA, Industrial Development Finance
Authority Rev. (Alzheimers Center),
FHA, 5.5s, 2012 $ 660 $ 658,733
Massachusetts Health & Education Facilities
Authority (Newton Wellesley College),
MBIA, 6.125s, 2015 1,000 1,052,200
Massachusetts Health & Education
Facilities Authority (Partners Healthcare),
MBIA, 5.375s, 2018 2,000 1,908,160
-----------
$ 3,619,093
-------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 1.1%
Massachusetts Housing Finance Agency,
FNMA, 6.9s, 2025 $1,700 $ 1,785,357
Somerville, MA, Housing Authority Rev.
(Clarendon Hill), GNMA, 7.85s, 2010 840 858,522
-----------
$ 2,643,879
-------------------------------------------------------------------------------------
Sales and Excise Tax Revenue - 3.0%
Commonwealth of Massachusetts, 5s, 2017 $3,050 $ 2,871,453
Territory of Virgin Islands, Public Finance
Authority, 5.875s, 2018 1,520 1,422,766
Territory of Virgin Islands, Public Finance
Authority, 5.5s, 2022 2,950 2,692,022
-----------
$ 6,986,241
-------------------------------------------------------------------------------------
Single Family Housing Revenue - 2.5%
Massachusetts Housing Finance Agency,
6.6s, 2026 $ 815 $ 837,258
Massachusetts Housing Finance Agency, Amt
Single Family Series 79, FSA, 5.85s, 2021 2,000 1,975,920
Massachusetts Industrial Finance Agency,
MBIA, 6.35s, 2022 2,880 2,944,425
-----------
$ 5,757,603
-------------------------------------------------------------------------------------
</TABLE>
21 - MMA
<PAGE>
Portfolio of Investments (Unaudited) - continued
Municipal Bonds - continued
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Solid Waste Revenue - 1.2%
Massachusetts Development Finance
Agency, Resource Recovery Rev.
(Waste Management, Inc.), 6.9s, 2029 $ 975 $ 993,652
Massachusetts Industrial Finance Agency
(Ogden Haverhill), 5.5s, 2013 25 22,996
Massachusetts Industrial Finance Agency
(Ogden Haverhill), 5.6s, 2019 2,000 1,753,480
------------
$ 2,770,128
-------------------------------------------------------------------------------------
Universities - 20.3%
Commonwealth of Massachusetts, College
Building, MBIA, 5.625s, 2016 $1,650 $ 1,678,809
Massachusetts Development Finance Agency,
Visual & Performing Arts Project, 6s, 2015 1,135 1,204,734
Massachusetts Development Finance Agency
(Higher Education Smith College), 5.375s, 2016 1,335 1,326,910
Massachusetts Development Finance Agency
(Higher Education Smith College), 5.5s, 2017 1,310 1,309,293
Massachusetts Development Finance Agency
Rev. (Eastern Nazarine College), 5.625s, 2019 1,750 1,607,515
Massachusetts Development Finance Agency
Rev. (Suffolk University), 5.75s, 2019 1,000 962,030
Massachusetts Development Finance Agency
Rev. (Suffolk University), 5.85s, 2029 1,000 962,320
Massachusetts Development Finance Agency
Rev. (Williston Northampton School), 6.5s, 2028 1,000 932,500
Massachusetts Development Finance Agency
Rev. (Xaverian Brothers High School), 5.55s, 2019 1,000 959,280
Massachusetts Development Finance Agency
Rev. (Xaverian Brothers High School), 5.65s, 2029 1,000 932,870
Massachusetts Health & Education Facilities
Authority (Boston College), 5.25s, 2018 3,500 3,366,685
Massachusetts Health & Education Facilities
Authority (Boston College), 5.25s, 2023 4,350 4,081,126
Massachusetts Health & Education Facilities
Authority (Learning Center for Deaf Children),
6.1s, 2019 1,000 942,000
Massachusetts Health & Education Facilities
Authority (Simmons College), AMBAC,
6.05s, 2020 1,745 1,824,118
Massachusetts Health & Education Facilities
Authority (University of Massachusetts),
FGIC, 5.75s, 2019 2,395 2,425,105
Massachusetts Health & Education Facilities
Authority (University of Massachusetts),
FGIC, 5.85s, 2020 1,300 1,325,844
Massachusetts Health & Education Facilities
Authority (Wheaton College), 5.25s, 2019 1,000 941,750
Massachusetts Health & Educational Authority,
University MA Project Series A, FGIC,
5.625s, 2018 2,170 2,178,767
Massachusetts Health & Educational Authority,
Wheelock College Series B, MBIA, 5.5s, 2021 3,525 3,460,281
Massachusetts Industrial Finance Agency,
Education Dana Hall School Issue, 5.9s, 2027 1,330 1,254,908
Massachusetts Industrial Finance Agency
(Belmont Hill School), 5.625s, 2020 1,150 1,120,940
Massachusetts Industrial Finance Agency
(Brandeis University), MBIA, 0s, 2004 1,000 825,250
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Universities - continued
Massachusetts Industrial Finance Agency
(Brandeis University), MBIA, 0s, 2005 $1,000 $ 783,320
Massachusetts Industrial Finance Agency
(Brandeis University), MBIA, 0s, 2009 1,000 632,350
Massachusetts Industrial Finance Agency
(Brandeis University), MBIA, 0s, 2010 1,000 596,910
Massachusetts Industrial Finance Agency
(Brandeis University), MBIA, 0s, 2011 500 280,435
Massachusetts Industrial Finance Agency
(Concord Academy), 5.5s, 2027 1,950 1,775,436
Massachusetts Industrial Finance Agency
(Groton School), 5s, 2018 3,060 2,859,968
Massachusetts Industrial Finance Agency
(Lesley College), CONNIE LEE, 6.3s, 2025 2,000 2,076,140
Massachusetts Industrial Finance Agency
(Tabor Academy), 5.4s, 2018 900 824,949
Massachusetts Industrial Finance Agency
(Western New England College), AMBAC,
5s, 2018 1,555 1,436,898
------------
$ 46,889,441
-------------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 4.7%
Massachusetts Water Resources Authority,
FGIC, 6s, 2021 $1,000 $ 1,041,710
Massachusetts Water Resources Authority,
RITES, FGIC, 8.613s, 2019 ++++[dag] 4,010 4,978,736
Massachusetts Water Pollution Abatement,
5.75s, 2017 1,000 1,020,490
Massachusetts Water Resources Authority,
AMBAC, 5.25s, 2015 1,500 1,490,265
Massachusetts Water Resources Authority,
MBIA, 5s, 2016 1,000 947,300
Massachusetts Water Resources Authority,
MBIA, 5.25s, 2020 1,535 1,452,571
------------
$ 10,931,072
-------------------------------------------------------------------------------------
Other - 0.5%
Rail Connections, Inc., MA (Route 128 Parking
Garage), 6s, 2012 $ 500 $ 507,410
Rail Connections, Inc., MA (Route 128 Parking
Garage), 6s, 2013 500 503,425
Rail Connections, Inc., MA (Route 128 Parking
Garage), 6s, 2014 250 249,740
------------
$ 1,260,575
-------------------------------------------------------------------------------------
Total Investments (Identified Cost, $224,817,162) $228,015,596
Other Assets, Less Liabilities - 1.5% 3,489,402
-------------------------------------------------------------------------------------
Net assets - 100.0% $231,504,998
-------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
Portfolio Footnotes:
++++ Inverse floating rate security.
[dag] Restricted security.
### Security segregated as collateral for an open futures contract.
</TABLE>
22 - MMA
<PAGE>
Financial Statements
<TABLE>
<CAPTION>
Statements of Assets and Liabilities (Unaudited)
------------------------------------------------------------------------------------------------------------------------------
Alabama Arkansas California
September 30, 2000 Fund Fund Fund
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments -
Identified cost $83,936,207 $117,252,975 $252,828,120
Unrealized appreciation 1,499,924 3,919,500 9,766,298
----------- ------------ ------------
Total investments, at value $85,436,131 $121,172,475 $262,594,418
Cash 35,701 15,058 846,892
Receivable for daily variation margin on open futures contracts -- 3,937 --
Receivable for investments sold 344,300 12,174 1,212,981
Receivable for fund shares sold 192,408 26,388 173,171
Interest receivable 1,477,643 1,782,179 3,223,413
Other assets 1,093 1,834 3,606
----------- ------------ ------------
Total assets $87,487,276 $123,014,045 $268,054,481
----------- ------------ ------------
Liabilities:
Distributions payable $ 214,104 $ 265,696 $ 612,457
Payable for investments purchased 496,007 -- 1,016,881
Payable for fund shares reacquired 1,666,146 174,967 551,545
Payable for when-issued investments purchased -- 2,530,750
Payable to affiliates -
Management fee 1,662 2,305 5,103
Shareholder servicing agent fee 475 658 1,458
Distribution and service fee 1,634 4,375 25,129
Administrative fee 83 115 255
Accrued expenses and other liabilities 57,903 61,839 104,958
----------- ------------ ------------
Total liabilities $ 2,438,014 $ 3,040,705 $ 2,317,786
----------- ------------ ------------
Net assets $85,049,262 $119,973,340 $265,736,695
----------- ------------ ------------
Net assets consist of:
Paid-in capital $83,581,575 $122,503,131 $261,381,712
Unrealized appreciation on investments 1,499,924 3,865,687 9,766,298
Accumulated net realized loss on investments (261,391) (6,519,343) (5,578,545)
Accumulated undistributed net investment income 229,154 123,865 167,230
----------- ------------ ------------
Total $85,049,262 $119,973,340 $265,736,695
----------- ------------ ------------
Shares of beneficial interest outstanding:
Class A 7,318,945 11,424,001 33,904,510
Class B 1,075,870 947,115 10,976,207
Class C -- -- 2,390,003
----------- ------------ ------------
Total shares of beneficial interest outstanding 8,394,815 12,371,116 47,270,720
----------- ------------ ------------
Net assets:
Class A $74,146,641 $110,779,980 $190,583,663
Class B 10,902,621 9,193,360 61,693,696
Class C -- -- 13,459,336
----------- ------------ ------------
Total net assets $85,049,262 $119,973,340 $265,736,695
----------- ------------ ------------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $10.13 $ 9.70 $5.62
------ ------ -----
Offering price per share (100 [divided by] 95.25 of net asset value per share) $10.64 $10.18 $5.90
------ ------ -----
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $10.13 $ 9.71 $5.62
------ ------ -----
Class C shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) -- -- $5.63
------ ------ -----
</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.
23
<PAGE>
Financial Statements - continued
<TABLE>
<CAPTION>
Statements of Assets and Liabilities (Unaudited) - continued
--------------------------------------------------------------------------------------------------------------
Florida Georgia
September 30, 2000 Fund Fund
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments -
Identified cost $ 78,150,721 $ 60,939,148
Unrealized appreciation 1,019,840 1,719,451
------------ ------------
Total investments, at value $ 79,170,561 $ 62,658,599
Cash 83,124 76,553
Receivable for daily variation margin on open futures contracts -- 469
Receivable for investments sold 60,000 65,405
Receivable for fund shares sold 124,593 210,648
Interest receivable 1,614,109 1,047,941
Other assets 1,282 947
------------ ------------
Total assets $ 81,053,669 $ 64,060,562
------------ ------------
Liabilities:
Distributions payable $ 219,877 $ 126,269
Payable for daily variation margin on open futures contracts -- --
Payable for investments purchased -- --
Payable for fund shares reacquired 129,613 74,549
Payable to affiliates -
Management fee 1,550 1,224
Shareholder servicing agent fee 442 350
Distribution and service fee 1,416 1,534
Administrative fee 77 61
Accrued expenses and other liabilities 64,398 64,586
------------ ------------
Total liabilities $ 417,373 $ 268,573
------------ ------------
Net assets $ 80,636,296 $ 63,791,989
------------ ------------
Net assets consist of:
Paid-in capital $ 85,425,963 $ 63,383,033
Unrealized appreciation on investments 1,019,840 1,713,044
Accumulated net realized loss on investments (5,845,346) (1,269,680)
Accumulated undistributed (distributions in excess of) net investment income 35,839 (34,408)
------------ ------------
Total $ 80,636,296 $ 63,791,989
------------ ------------
Shares of beneficial interest outstanding:
Class A 6,429,077 4,594,547
Class B 2,006,058 1,547,551
------------ ------------
Total shares of beneficial interest outstanding 8,435,135 6,142,098
------------ ------------
Net assets:
Class A $ 61,463,116 $ 47,713,278
Class B 19,173,180 16,078,711
------------ ------------
Total net assets $ 80,636,296 $ 63,791,989
------------ ------------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $ 9.56 $10.38
------ ------
Offering price per share (100 [divided by] 95.25 of net asset value per share) $10.04 $10.90
------ ------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $ 9.56 $10.39
------ ------
<CAPTION>
--------------------------------------------------------------------------------------------------------------
Maryland Massachusetts
September 30, 2000 Fund Fund
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments -
Identified cost $132,782,572 $224,817,162
Unrealized appreciation 4,288,112 3,198,434
------------ ------------
Total investments, at value $137,070,684 $228,015,596
Cash 98,395 49,692
Receivable for daily variation margin on open futures contracts -- --
Receivable for investments sold 195,624 5,138,800
Receivable for fund shares sold 30,707 70,353
Interest receivable 2,065,331 4,073,354
Other assets 1,979 3,386
------------ ------------
Total assets $139,462,720 $237,351,181
------------ ------------
Liabilities:
Distributions payable $ 259,395 $ 545,851
Payable for daily variation margin on open futures contracts -- 3,375
Payable for investments purchased -- 5,146,262
Payable for fund shares reacquired 53,531 56,315
Payable to affiliates -
Management fee 2,668 4,442
Shareholder servicing agent fee 762 1,269
Distribution and service fee 3,607 5,437
Administrative fee 133 222
Accrued expenses and other liabilities 78,481 83,010
------------ ------------
Total liabilities $ 398,577 $ 5,846,183
------------ ------------
Net assets $139,064,143 $231,504,998
------------ ------------
Net assets consist of:
Paid-in capital $138,874,142 $230,603,841
Unrealized appreciation on investments 4,288,112 3,198,997
Accumulated net realized loss on investments (4,025,573) (2,318,010)
Accumulated undistributed (distributions in excess of) net investment income (72,538) 20,170
------------ ------------
Total $139,064,143 $231,504,998
------------ ------------
Shares of beneficial interest outstanding:
Class A 10,340,913 19,085,671
Class B 2,414,891 2,617,648
------------ ------------
Total shares of beneficial interest outstanding 12,755,804 21,703,319
------------ ------------
Net assets:
Class A $112,750,972 $203,564,039
Class B 26,313,171 27,940,959
------------ ------------
Total net assets $139,064,143 $231,504,998
------------ ------------
Class A shares:
Net asset value per share
(net assets [divided by] shares of beneficial interest outstanding) $10.90 $10.67
------ ------
Offering price per share (100 [divided by] 95.25 of net asset value per share) $11.45 $11.20
------ ------
Class B shares:
Net asset value and offering price per share
(net assets [divided by] shares of beneficial interest outstanding) $10.90 $10.67
------ ------
</TABLE>
On sales of $100,000 or more, the offering price of Class A shares is reduced.
A contingent deferred sales charge may be imposed on redemptions of Class A
and Class B shares.
See notes to financial statements.
24
<PAGE>
Financial Statements - continued
<TABLE>
<CAPTION>
Statements of Operations (Unaudited)
---------------------------------------------------------------------------------------------------------
Alabama Arkansas California
Six Months Ended September 30, 2000 Fund Fund Fund
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net investment income:
Interest income $2,613,304 $3,541,552 $ 7,646,473
---------- ---------- ------------
Expenses -
Management fee $ 232,182 $ 326,587 $ 731,497
Trustees' compensation 9,737 10,882 11,024
Shareholder servicing agent fee 42,305 59,503 133,063
Distribution and service fee (Class A) 92,267 54,901 96,497
Distribution and service fee (Class B) 53,974 40,565 266,856
Distribution and service fee (Class C) -- -- 62,684
Administrative fee 7,403 10,413 23,286
Custodian fee 16,737 23,767 48,621
Printing 2,672 6,629 12,768
Postage 1,336 2,096 3,108
Auditing fees 15,717 14,800 14,852
Legal fees 1,257 -- --
Miscellaneous 15,970 26,445 33,769
---------- ---------- ------------
Total expenses $ 491,557 $ 576,588 $ 1,438,025
Fees paid indirectly (7,286) (20,975) (18,345)
Reduction of expenses by investment adviser (84,117) (118,327) (397,818)
---------- ---------- ------------
Net expenses $ 400,154 $ 437,286 $ 1,021,862
---------- ---------- ------------
Net investment income $2,213,150 $3,104,266 $ 6,624,611
---------- ---------- ------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 18,121 $ (83,592) $ (1,344,857)
Futures contracts (10,953) 338,326 28,597
---------- ---------- ------------
Net realized gain (loss) on investments $ 7,168 $ 254,734 $ (1,316,260)
---------- ---------- ------------
Change in unrealized appreciation (depreciation) -
Investments $1,153,994 $ 962,642 $ 6,502,037
Futures contracts (60,307) (110,089) (236,159)
---------- ---------- ------------
Net unrealized gain on investments $1,093,687 $ 852,553 $ 6,265,878
---------- ---------- ------------
Net realized and unrealized gain on investments $1,100,855 $1,107,287 $ 4,949,618
---------- ---------- ------------
Increase in net assets from operations $3,314,005 $4,211,553 $ 11,574,229
========== ========== ============
</TABLE>
See notes to financial statements.
25
<PAGE>
Financial Statements - continued
<TABLE>
<CAPTION>
Statements of Operations (Unaudited) - continued
------------------------------------------------------------------------------------------------------------------------
Florida Georgia Maryland Massachusetts
Six Months Ended September 30, 2000 Fund Fund Fund Fund
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income:
Interest income $2,419,836 $1,868,935 $4,158,776 $7,138,252
---------- ---------- ---------- ----------
Expenses -
Management fee $ 223,829 $ 173,333 $ 384,411 $ 637,285
Trustees' compensation 11,073 10,854 11,040 11,079
Shareholder servicing agent fee 40,774 31,580 70,029 116,100
Distribution and service fee (Class A) -- 59,767 199,008 359,814
Distribution and service fee (Class B) 78,159 76,725 131,693 132,957
Administrative fee 7,135 5,526 12,255 20,317
Custodian fee 19,514 16,521 28,843 44,310
Printing 4,194 3,731 10,717 1,729
Postage 2,072 1,384 2,612 3,470
Auditing fees 14,766 14,812 15,327 15,245
Legal fees 2,566 -- 191 5,420
Miscellaneous 12,920 13,849 33,369 29,667
---------- ---------- ---------- ----------
Total expenses $ 417,002 $ 408,082 $ 899,495 $1,377,393
Fees paid indirectly (6,279) (7,187) (21,443) (13,339)
Reduction of expenses by investment adviser (81,123) (62,804) (139,310) (230,937)
---------- ---------- ---------- ----------
Net expenses $ 329,600 $ 338,091 $ 738,742 $1,133,117
---------- ---------- ---------- ----------
Net investment income $2,090,236 $1,530,844 $3,420,034 $6,005,135
---------- ---------- ---------- ----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 124,963 $ (167,057) $ (143,690) $ 312,687
Futures contracts 31,947 22,133 (110,757) 108,379
---------- ---------- ---------- ----------
Net realized gain (loss) on investments $ 156,910 $ (144,924) $ (254,447) $ 421,066
---------- ---------- ---------- ----------
Change in unrealized appreciation (depreciation) -
Investments $ 632,541 $ 911,989 $1,485,112 $1,319,935
Futures contracts (38,123) (6,407) (151,594) (105,254)
---------- ---------- ---------- ----------
Net unrealized gain on investments $ 594,418 $ 905,582 $1,333,518 $1,214,681
---------- ---------- ---------- ----------
Net realized and unrealized gain on investments $ 751,328 $ 760,658 $1,079,071 $1,635,747
---------- ---------- ---------- ----------
Increase in net assets from operations $2,841,564 $2,291,502 $4,499,105 $7,640,882
---------- ---------- ---------- ----------
</TABLE>
See notes to financial statements.
26
<PAGE>
Financial Statements - continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets (Unaudited)
---------------------------------------------------------------------------------------------------------
Alabama Arkansas California
Six Months Ended September 30, 2000 Fund Fund Fund
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 2,213,150 $ 3,104,266 $ 6,624,611
Net realized gain (loss) on investments 7,168 254,734 (1,316,260)
Net unrealized gain on investments 1,093,687 852,553 6,265,878
------------ ------------ -------------
Increase in net assets
from operations $ 3,314,005 $ 4,211,553 $ 11,574,229
------------ ------------ -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (1,976,438) $ (2,859,270) $ (5,023,608)
From net investment income (Class B) (248,647) (203,784) (1,338,513)
From net investment income (Class C) -- -- (267,734)
------------ ------------ -------------
Total distributions declared to shareholders $ (2,225,085) $ (3,063,054) $ (6,629,855)
------------ ------------ -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 4,856,054 $ 10,143,977 $ 31,816,170
Net asset value of shares issued to shareholders
in reinvestment of distributions 959,088 1,455,465 3,200,612
Cost of shares reacquired (5,516,702) (9,112,679) (41,901,481)
------------ ------------ -------------
Net increase (decrease) in net assets from
fund share transactions $ 298,440 $ 2,486,763 $ (6,884,699)
------------ ------------ -------------
Total increase (decrease) in net assets $ 1,387,360 $ 3,635,262 $ (1,940,325)
Net assets:
At beginning of period 83,661,902 116,338,078 267,677,020
------------ ------------ -------------
At end of period $ 85,049,262 $119,973,340 $ 265,736,695
============ ============ =============
Accumulated undistributed net investment income
included in net assets at end of period $ 229,154 $ 123,865 $ 167,230
============ ============ =============
</TABLE>
See notes to financial statements.
27
<PAGE>
Financial Statements - continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets (Unaudited) - continued
-------------------------------------------------------------------------------
Florida
Six Months Ended September 30, 2000 Fund
-------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 2,090,236
Net realized gain (loss) on investments 156,910
Net unrealized gain on investments 594,418
-------------
Increase in net assets
from operations $ 2,841,564
-------------
Distributions declared to shareholders -
From net investment income (Class A) $ (1,652,630)
From net investment income (Class B) (441,192)
-------------
Total distributions declared to shareholders $ (2,093,822)
-------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 5,072,607
Net asset value of shares issued to shareholders
in reinvestment of distributions 736,078
Cost of shares reacquired (10,026,872)
-------------
Net increase (decrease) in net assets from
fund share transactions $ (4,218,187)
-------------
Total increase (decrease) in net assets $ (3,470,445)
Net assets:
At beginning of period 84,106,741
-------------
At end of period $ 80,636,296
=============
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ 35,839
=============
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Georgia Maryland Massachusetts
Six Months Ended September 30, 2000 Fund Fund Fund
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 1,530,844 $ 3,420,034 $ 6,005,135
Net realized gain (loss) on investments (144,924) (254,447) 421,066
Net unrealized gain on investments 905,582 1,333,518 1,214,681
------------ ------------ -------------
Increase in net assets
from operations $ 2,291,502 $ 4,499,105 $ 7,640,882
------------ ------------ -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (1,202,798) $ (2,814,873) $ (5,516,018)
From net investment income (Class B) (327,749) (566,396) (625,570)
------------ ------------ -------------
Total distributions declared to shareholders $ (1,530,547) $ (3,381,269) $ (6,141,588)
------------ ------------ -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 3,349,399 $ 3,939,345 $ 7,212,062
Net asset value of shares issued to shareholders
in reinvestment of distributions 766,968 1,794,440 2,782,279
Cost of shares reacquired (3,916,535) (9,589,745) (12,959,487)
------------ ------------ -------------
Net increase (decrease) in net assets from
fund share transactions $ 199,832 $ (3,855,960) $ (2,965,146)
------------ ------------ -------------
Total increase (decrease) in net assets $ 960,787 $ (2,738,124) $ (1,465,852)
Net assets:
At beginning of period 62,831,202 141,802,267 232,970,850
------------ ------------ -------------
At end of period $ 63,791,989 $139,064,143 $ 231,504,998
============ ============ =============
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ (34,408) $ (72,538) $ 20,170
============ ============ =============
</TABLE>
See notes to financial statements.
28
<PAGE>
Financial Statements - continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets - continued
-----------------------------------------------------------------------------------------------------------------
Alabama Arkansas California
Year Ended March 31, 2000 Fund Fund Fund
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 4,389,130 $ 6,384,894 $ 14,136,039
Net realized gain (loss) on investments (261,297) 100,225 1,627,215
Net unrealized loss on investments (5,094,879) (7,203,019) (21,542,783)
------------- ------------- -------------
Decrease in net assets
from operations $ (967,046) $ (717,900) $ (5,779,529)
------------- ------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (3,861,217) $ (5,925,715) $ (10,614,498)
From net investment income (Class B) (528,444) (415,186) (2,636,701)
From net investment income (Class C) -- -- (432,554)
From net realized gain on investments (Class A) (848,799) -- --
From net realized gain on investments (Class B) (138,597) -- --
In excess of net realized gain on investments (Class A) (398) -- --
In excess of net realized gain on investments (Class B) (65) -- --
------------- ------------- -------------
Total distributions declared to shareholders $ (5,377,520) $ (6,340,901) $ (13,683,753)
------------- ------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 14,043,917 $ 6,862,514 $ 46,552,236
Net asset value of shares issued to shareholders
in reinvestment of distributions 2,544,352 2,916,772 6,199,778
Cost of shares reacquired (11,884,985) (21,635,217) (64,150,223)
------------- ------------- -------------
Net increase (decrease) in net assets from
fund share transactions $ 4,703,284 $ (11,855,931) $ (11,398,209)
------------- ------------- -------------
Total decrease in net assets $ (1,641,282) $ (18,914,732) $ (30,861,491)
Net assets:
At beginning of period 85,303,184 135,252,810 298,538,511
------------- ------------- -------------
At end of period $ 83,661,902 $ 116,338,078 $ 267,677,020
============= ============= =============
Accumulated undistributed net investment income
included in net assets at end of period $ 241,089 $ 82,653 $ 172,474
============= ============= =============
</TABLE>
See notes to financial statements.
29
<PAGE>
Financial Statements - continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets - continued
-------------------------------------------------------------------------------------------------
Florida Georgia
Year Ended March 31, 2000 Fund Fund
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 4,601,157 $ 3,221,640
Net realized gain (loss) on investments 946,715 (346,236)
Net unrealized loss on investments (7,375,978) (4,061,579)
------------- -------------
Decrease in net assets
from operations $ (1,828,106) $ (1,186,175)
------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (3,669,012) $ (2,583,113)
From net investment income (Class B) (941,229) (631,737)
------------- -------------
Total distributions declared to shareholders $ (4,610,241) $ (3,214,850)
------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 25,972,017 $ 6,953,821
Net asset value of shares issued to shareholders
in reinvestment of distributions 1,688,936 1,626,287
Cost of shares reacquired (35,556,134) (12,825,000)
------------- -------------
Net decrease in net assets from
fund share transactions $ (7,895,181) $ (4,244,892)
------------- -------------
Total decrease in net assets $ (14,333,528) $ (8,645,917)
Net assets:
At beginning of period 98,440,269 71,477,119
------------- -------------
At end of period $ 84,106,741 $ 62,831,202
------------- -------------
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ 39,425 $ (34,705)
------------- -------------
<CAPTION>
-------------------------------------------------------------------------------------------------
Maryland Massachusetts
Year Ended March 31, 2000 Fund Fund
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 7,107,274 $ 13,017,749
Net realized gain (loss) on investments (185,379) 1,131,509
Net unrealized loss on investments (9,364,960) (19,039,139)
------------- -------------
Decrease in net assets
from operations $ (2,443,065) $ (4,889,881)
------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (5,853,013) $ (11,660,828)
From net investment income (Class B) (1,176,743) (1,191,178)
------------- -------------
Total distributions declared to shareholders $ (7,029,756) $ (12,852,006)
------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 11,535,855 $ 22,121,042
Net asset value of shares issued to shareholders
in reinvestment of distributions 3,762,280 5,945,668
Cost of shares reacquired (24,186,241) (42,949,525)
------------- -------------
Net decrease in net assets from
fund share transactions $ (8,888,106) $ (14,882,815)
------------- -------------
Total decrease in net assets $ (18,360,927) $ (32,624,702)
Net assets:
At beginning of period 160,163,194 265,595,552
------------- -------------
At end of period $ 141,802,267 $ 232,970,850
------------- -------------
Accumulated undistributed (distributions in excess of)
net investment income included in net assets at end of period $ (111,303) $ 156,623
------------- -------------
</TABLE>
See notes to financial statements.
30
<PAGE>
Financial Statements - continued
<TABLE>
<CAPTION>
Financial Highlights
--------------------------------------------------------------------------------
Alabama 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 $10.00
------
Income from investment operations# -
Net investment income[sec] $ 0.27
Net realized and unrealized gain (loss) on
investments 0.13
------
Total from investment operations $ 0.40
------
Less distributions declared to shareholders -
From net investment income $(0.27)
From net realized gain on investments --
In excess of net realized gain on investments --
------
Total distributions declared to shareholders $(0.27)
------
Net asset value - end of period $10.13
------
Total return++ 4.06%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.87%[dag]
Net investment income 5.34%[dag]
Portfolio turnover 7%
Net assets at end of period (000 omitted) $74,147
[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## 1.07%[dag]
Net investment income 5.14%[dag]
[dag] Annualized.
[2 dags] Not annualized.
[3 dags] Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect 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.
<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 $10.76 $10.80 $10.48 $10.52 $10.34
------ ------ ------ ------ ------
Income from investment operations# -
Net investment income[sec] $ 0.54 $ 0.54 $ 0.55 $ 0.56 $ 0.55
Net realized and unrealized gain (loss) on
investments (0.64) (0.01) 0.45 0.04 0.18
------ ------ ------ ------ ------
Total from investment operations $(0.10) $ 0.53 $ 1.00 $ 0.60 $ 0.73
------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.54) $(0.54) $(0.55) $(0.55) $(0.55)
From net realized gain on investments (0.12) (0.03) (0.13) (0.09) --
In excess of net realized gain on investments (0.00)[3 dags] -- -- -- --
------ ------ ------ ------ ------
Total distributions declared to shareholders $(0.66) $(0.57) $(0.68) $(0.64) $(0.55)
------ ------ ------ ------ ------
Net asset value - end of period $10.00 $10.76 $10.80 $10.48 $10.52
------ ------ ------ ------ ------
Total return++ (0.82)% 5.03% 9.72% 5.82% 7.13%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.89% 0.95% 1.04% 1.10% 1.14%
Net investment income 5.28% 5.04% 5.12% 5.28% 5.18%
Portfolio turnover 44% 23% 21% 22% 37%
Net assets at end of period (000 omitted) $72,736 $73,851 $75,538 $76,928 $82,484
[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 $ 0.52 $ 0.53 $ 0.54 -- $ 0.54
Ratios (to average net assets):
Expenses## 1.07% 1.07% 1.11% -- 1.24%
Net investment income 5.10% 4.92% 5.05% -- 5.08%
[dag] Annualized.
[2 dags] Not annualized.
[3 dags] Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect 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.
</TABLE>
See notes to financial statements.
31
<PAGE>
Financial Statements - continued
Financial Highlights
<TABLE>
<CAPTION>
----------------------------------------------------------------------
Alabama 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 $10.00
------
Income from investment operations# -
Net investment income[sec] $ 0.23
Net realized and unrealized gain (loss) on
investments 0.13
------
Total from investment operations $ 0.36
------
Less distributions declared to shareholders -
From net investment income $(0.23)
From net realized gain on investments --
In excess of net realized gain on investments --
------
Total distributions declared to shareholders $(0.23)
------
Net asset value - end of period $ 10.13
------
Total return++ 3.67%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.62%[dag]
Net investment income 4.59%[dag]
Portfolio turnover 7%
Net assets at end of period (000 omitted) $10,903
[sec]The investment adviser voluntarily waived a portion of its fee
for certain of the periods indicated. If this fee had been incurred by
the fund, the net investment
income per share and the ratios would have been:
Net investment income $ 0.22
Ratios (to average net assets):
Expenses## 1.82%[dag]
Net investment income 4.39%[dag]
[dag] Annualized.
[2 dags] Not annualized.
[3 dags] Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
<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 $10.76 $10.80 $10.48 $10.52 $10.34
------ ------ ------ ------ ------
Income from investment operations# -
Net investment income[sec] $ 0.46 $ 0.46 $ 0.47 $ 0.47 $ 0.46
Net realized and unrealized gain (loss) on
investments (0.64) (0.01) 0.45 0.04 0.18
------ ------ ------ ------ ------
Total from investment operations $(0.18) $ 0.45 $ 0.92 $ 0.51 $ 0.64
------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.46) $(0.46) $(0.47) $(0.47) $(0.46)
From net realized gain on investments (0.12) (0.03) (0.13) (0.08) --
In excess of net realized gain on investments (0.00)[3 dags] -- -- -- --
------ ------ ------ ------ ------
Total distributions declared to shareholders $(0.58) $(0.49) $(0.60) $(0.55) $(0.46)
------ ------ ------ ------ ------
Net asset value - end of period $10.00 $10.76 $10.80 $10.48 $10.52
------ ------ ------ ------ ------
Total return++ (1.56)% 4.25% 8.91% 4.98% 6.25%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.64% 1.69% 1.79% 1.90% 1.96%
Net investment income 4.53% 4.29% 4.36% 4.48% 4.34%
Portfolio turnover 44% 23% 21% 22% 37%
Net assets at end of period (000 omitted) $10,926 $11,452 $8,074 $7,281 $6,139
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated.
If this fee had been incurred by the fund, the net investment income per share and the ratios would
have been:
Net investment income $ 0.44 $ 0.45 $ 0.46 -- --
Ratios (to average net assets):
Expenses## 1.82% 1.81% 1.86% -- --
Net investment income 4.35% 4.17% 4.29% -- --
</TABLE>
[dag] Annualized.
[2 dags] Not annualized.
[3 dags] Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
See notes to financial statements.
32
<PAGE>
Financial Statements - continued
Financial Highlights
<TABLE>
<CAPTION>
------------------------------------------------------------------
Arkansas Fund
------------------------------------------------------------------
Six Months
Ended
September 30,
2000
--------------
(Unaudited)
------------------------------------------------------------------
Class A
------------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each year):
Net asset value - beginning of year $ 9.61
------
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 year $ 9.70
------
Total return++ 3.61%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.71%[dag]
Net investment income 5.29%[dag]
Portfolio turnover 6%
Net assets at end of year (000 omitted) $110,780
[sec]The investment adviser voluntarily waived a portion of its fee
for certain of the periods indicated. If these fees had been
incurred by the fund, the net investment income per share and
the ratios would have been:
Net investment income $ 0.24
Ratios (to average net assets):
Expenses## 0.91%[dag]
Net investment income 5.09%[dag]
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#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.
<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 year):
Net asset value - beginning of year $10.14 $10.18 $ 9.72 $ 9.75 $ 9.66
------ ------ ------ ------ ------
Income from investment operations# -
Net investment income[sec] $ 0.50 $ 0.50 $ 0.50 $ 0.50 $ 0.50
Net realized and unrealized gain (loss) on
investments (0.53) (0.04) 0.46 (0.03) 0.09
------ ------ ------ ------ ------
Total from investment operations $(0.03) $ 0.46 $ 0.96 $ 0.47 $ 0.59
------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.50) $(0.50) $(0.50) $(0.50) $(0.50)
In excess of net investment income -- -- (0.00)[3 dags] -- --
------ ------ ------ ------ ------
Total distributions declared to shareholders $(0.50) $(0.50) $(0.50) $(0.50) $ (0.50)
------ ------ ------ ------ ------
Net asset value - end of year $ 9.61 $10.14 $10.18 $ 9.72 $ 9.75
------ ------ ------ ------ ------
Total return++ (0.24)% 4.60% 10.06% 4.87% 6.19%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.72% 0.77% 0.85% 0.92% 0.93%
Net investment income 5.14% 4.92% 4.97% 5.14% 5.10%
Portfolio turnover 28% 12% 15% 9% 6%
Net assets at end of year (000 omitted) $107,111 $124,644 $134,072 $144,263 $172,907
[sec]The investment adviser voluntarily waived a portion of its fee for certain
of the periods indicated. If these fees had been incurred by the fund, the net
investment income per share and the ratios would have been:
Net investment income $ 0.48 $ 0.49 $ 0.49 -- --
Ratios (to average net assets):
Expenses## 0.90% 0.89% 0.92% -- --
Net investment income 4.96% 4.80% 4.90% -- --
</TABLE>
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#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.
See notes to financial statements.
33
<PAGE>
Financial Statements - continued
Financial Highlights
<TABLE>
<CAPTION>
--------------------------------------------------------------
Arkansas Fund
--------------------------------------------------------------
Six Months
Ended
September 30,
2000
--------------
(Unaudited)
--------------------------------------------------------------
Class B
--------------------------------------------------------------
<S> <C>
Per share data
(for a share outstanding throughout each year):
Net asset value - beginning of year $ 9.62
------
Income from investment operations# -
Net investment income[sec] $ 0.22
Net realized and unrealized gain (loss) on
investments 0.08
-------
Total from investment operations $ 0.30
-------
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 year $ 9.71
-------
Total return 3.20%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.49%[dag]
Net investment income 4.51%[dag]
Portfolio turnover 6%
Net assets at end of year (000 omitted) $9,193
[sec]The investment adviser voluntarily waived a portion
of its fee for certain of the periods indicated. If
these fees had been incurred by the fund, the net
investment income per share and the ratios would
have been:
Net investment income $ 0.21
Ratios (to average net assets):
Expenses## 1.69%[dag]
Net investment income 4.31%[dag]
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##Ratios do not reflect reductions from certain expense arrangements.
<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 year):
Net asset value - beginning of year $10.14 $10.18 $ 9.72 $ 9.75 $ 9.65
------ ------ ------ ------ ------
Income from investment operations# -
Net investment income[sec] $ 0.42 $ 0.43 $ 0.42 $ 0.42 $ 0.42
Net realized and unrealized gain (loss) on
investments (0.53) (0.04) 0.46 (0.03) 0.10
------ ------ ------ ------ ------
Total from investment operations $(0.11) $ 0.39 $ 0.88 $ 0.39 $ 0.52
------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.41) $(0.43) $(0.42) $(0.42) $(0.42)
In excess of net investment income -- -- (0.00)[3 dags] -- --
------ ------ ------ ------ ------
Total distributions declared to shareholders $(0.41) $(0.43) $(0.42) $(0.42) $(0.42)
------ ------ ------ ------ ------
Net asset value - end of year $ 9.62 $10.14 $10.18 $ 9.72 $ 9.75
------ ------ ------ ------ ------
Total return (1.02)% 3.91% 9.18% 4.05% 5.43%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.62% 1.43% 1.65% 1.71% 1.76%
Net investment income 4.33% 4.26% 4.15% 4.34% 4.27%
Portfolio turnover 28% 12% 15% 9% 6%
Net assets at end of year (000 omitted) $9,227 $10,609 $7,370 $7,548 $7,950
[sec]The investment adviser voluntarily waived a portion of its fee for certain
of the periods indicated. If these fees had been incurred by the fund, the
net investment income per share and the ratios would have been:
Net investment income $ 0.40 $ 0.42 $ 0.41 -- --
Ratios (to average net assets):
Expenses## 1.80% 1.55% 1.72% -- --
Net investment income 4.15% 4.14% 4.08% -- --
</TABLE>
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##Ratios do not reflect reductions from certain expense arrangements.
See notes to financial statements.
34
<PAGE>
Financial Statements - continued
<TABLE>
<CAPTION>
Financial Highlights
--------------------------------------------------------------------
California 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 $ 5.52
-------
Income from investment operations# -
Net investment income[sec] $ 0.14
Net realized and unrealized gain (loss) on
investments 0.10
-------
Total from investment operations $ 0.24
-------
Less distributions declared to shareholders -
From net investment income $ (0.14)
In excess of net investment income --
-------
Total distributions declared to shareholders $ (0.14)
-------
Net asset value - end of period $ 5.62
-------
Total return++ 4.50%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.56%[dag]
Net investment income 5.19%[dag]
Portfolio turnover 6%
Net assets at end of period (000 omitted) $190,584
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by the
fund, the net investment
income per share and the ratios would have been:
Net investment income $ 0.13
Ratios (to average net assets):
Expenses## 0.86%[dag]
Net investment income 4.89%[dag]
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#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.
<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 $ 5.89 $ 5.80 $ 5.47 $ 5.52 $ 5.41
------- -------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.29 $ 0.29 $ 0.29 $ 0.30 $ 0.30
Net realized and unrealized gain (loss) on
investments (0.38) 0.09 0.33 (0.05) 0.11
------- -------- ------- ------- --------
Total from investment operations $ (0.09) $ 0.38 $ 0.62 $ 0.25 $ 0.41
------- -------- ------- ------- --------
Less distributions declared to shareholders -
From net investment income $ (0.28) $ (0.29) $ (0.29) $ (0.30) $ (0.30)
In excess of net investment income -- (0.00)[3 dags] -- -- (0.00)[3 dags]
------- -------- ------- ------- --------
Total distributions declared to shareholders $ (0.28) $ (0.29) $ (0.29) $ (0.30) $ (0.30)
------- -------- ------- ------- --------
Net asset value - end of period $ 5.52 $ 5.89 $ 5.80 $ 5.47 $ 5.52
------- -------- ------- ------- --------
Total return++ (1.41)% 6.59% 11.51% 4.55% 7.86%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.51% 0.60% 0.64% 0.66% 0.66%
Net investment income 5.21% 4.82% 5.07% 5.36% 5.48%
Portfolio turnover 40% 26% 49% 78% 69%
Net assets at end of period (000 omitted) $196,828 $226,903 $222,421 $232,612 $259,817
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.27 $ 0.27 $ 0.28 $ 0.29 $ 0.29
Ratios (to average net assets):
Expenses## 0.86% 0.77% 0.79% 0.81% 0.81%
Net investment income 4.86% 4.65% 4.92% 5.21% 5.33%
</TABLE>
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#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.
See notes to financial statements.
35
<PAGE>
Financial Statements - continued
Financial Highlights
<TABLE>
<CAPTION>
--------------------------------------------------------------------
California 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 $ 5.52
---------
Income from investment operations# -
Net investment income[sec] $ 0.12
Net realized and unrealized gain (loss) on
investments 0.10
---------
Total from investment operations $ 0.22
---------
Less distributions declared to shareholders -
From net investment income $ (0.12)
In excess of net investment income --
---------
Total distributions declared to shareholders $ (0.12)
---------
Net asset value - end of period $ 5.62
---------
Total return 4.10%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.34%[dag]
Net investment income 4.40%[dag]
Portfolio turnover 6%
Net assets at end of period (000 omitted) $ 61,694
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by
the fund, the net investment income per share and the ratios would
have been:
Net investment income $ 0.11
Ratios (to average net assets):
Expenses## 1.64%[dag]
Net investment income 4.10%[dag]
</TABLE>
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset
arrangements.
<TABLE>
<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 $ 5.89 $ 5.80 $ 5.47 $ 5.52 $ 5.41
------- ------- ------ ------ --------
Income from investment operations# -
Net investment income[sec] $ 0.25 $ 0.24 $ 0.24 $ 0.25 $ 0.26
Net realized and unrealized gain (loss) on
investments (0.38) 0.09 0.33 (0.05) 0.11
------- ------- ------ ------- --------
Total from investment operations $ (0.13) $ 0.33 $ 0.57 $ 0.20 $ 0.37
------- ------- ------ ------- --------
Less distributions declared to shareholders -
From net investment income $ (0.24) $ (0.24) $(0.24) $(0.25) $ (0.26)
In excess of net investment income -- (0.00)[3 dags] -- -- (0.00)[3 dags]
------- ------- ------- ------- --------
Total distributions declared to shareholders $ (0.24) $ (0.24) $(0.24) $(0.25) $ (0.26)
------- ------- ------- ------- --------
Net asset value - end of period $ 5.52 $ 5.89 $ 5.80 $ 5.47 $ 5.52
------- ------- ------- ------- --------
Total return (2.21)% 5.74% 10.62% 3.64% 6.93%
Ratios (to average net assets)
/Supplemental data[sec]:
Expenses## 1.31% 1.39% 1.44% 1.54% 1.54%
Net investment income 4.38% 4.02% 4.26% 4.48% 4.59%
Portfolio turnover 40% 26% 49% 78% 69%
Net assets at end of period (000 omitted) $60,367 $61,458 $43,790 $36,694 $ 34,675
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this fee
had been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.23 $ 0.22 $ 0.23 $ 0.24 $ 0.24
Ratios (to average net assets):
Expenses## 1.66% 1.56% 1.59% 1.69% 1.91%
Net investment income 4.03% 3.85% 4.11% 4.33% 4.57%
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset
arrangements.
</TABLE>
See notes to financial statements.
36
<PAGE>
Financial Statements - continued
Financial Highlights
<TABLE>
<CAPTION>
--------------------------------------------------------------------
California 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 $ 5.53
-------
Income from investment operations# -
Net investment income[sec] $ 0.12
Net realized and unrealized gain (loss) on
investments 0.10
-------
Total from investment operations $ 0.22
-------
Less distributions declared to shareholders -
From net investment income $ (0.12)
In excess of net realized gain on investments --
-------
Total distributions declared to shareholders $ (0.12)
-------
Net asset value - end of period $ 5.63
-------
Total return 4.03%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.46%[dag]
Net investment income 4.29%[dag]
Portfolio turnover 6%
Net assets at end of period (000 omitted) $13,459
[sec]The investment adviser voluntarily waived a portion of its fee for
certain of the periods indicated. If this fee had been incurred by
the fund, the net investment income per share and the ratios would
have been:
Net investment income $ 0.11
Ratios (to average net assets):
Expenses## 1.76%[dag]
Net investment income 3.99%[dag]
</TABLE>
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset
arrangements.
<TABLE>
<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 $ 5.90 $ 5.81 $ 5.48 $ 5.53 $ 5.42
------ ------ ------ ------ ------
Income from investment operations# -
Net investment income[sec] $ 0.24 $ 0.23 $ 0.23 $ 0.24 $ 0.25
Net realized and unrealized gain (loss) on
investments (0.38) 0.09 0.33 (0.05) 0.11
------ ------ ------ ------ ------
Total from investment operations $(0.14) $ 0.32 $ 0.56 $ 0.19 $ 0.36
------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.23) $(0.23) $(0.23) $(0.24) $(0.25)
In excess of net realized gain on investments -- (0.00)[3 dags] -- -- (0.00)[3 dags]
------ ------ ------ ------ ------
Total distributions declared to shareholders $(0.23) $(0.23) $(0.23) $(0.24) $(0.25)
------ ------ ------ ------ ------
Net asset value - end of period $ 5.53 $ 5.90 $ 5.81 $ 5.48 $ 5.53
------ ------ ------ ------ ------
Total return (2.29)% 5.54% 10.39% 3.51% 6.77%
Ratios (to average net assets)/
Supplemental data[sec]:
Expenses## 1.41% 1.56% 1.64% 1.66% 1.67%
Net investment income 4.32% 3.84% 4.08% 4.37% 4.47%
Portfolio turnover 40% 26% 49% 78% 69%
Net assets at end of period (000 omitted) $10,482 $10,178 $4,396 $3,856 $4,353
[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 $ 0.21 $ 0.22 $ 0.23 $ 0.24
Ratios (to average net assets):
Expenses## 1.76% 1.74% 1.79% 1.81% 1.82%
Net investment income 3.97% 3.66% 3.93% 4.22% 4.32%
</TABLE>
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset
arrangements.
See notes to financial statements.
37
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
---------------------------------------------------------------
Florida 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 $ 9.47
------
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 $ 9.56
------
Total return++ 3.68%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.64%[dag]
Net investment income 5.33%[dag]
Portfolio turnover 10%
Net assets at end of period (000 Omitted) $61,463
[sec]The investment adviser voluntarily waived a portion of its fee
for certain periods indicated. If the fee had been incurred by
the fund, the net investment income per share and the ratios
would have been:
Net investment income $ 0.24
Ratios (to average net assets):
Expenses## 0.84%[dag]
Net investment income 5.13%[dag]
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#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.
<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 $ 10.12 $ 10.10 $ 9.64 $ 9.82 $ 9.60
------- ------- ------- ------ -------
Income from investment operations# -
Net investment income[sec] $ 0.50 $ 0.50 $ 0.50 $ 0.51 $ 0.52
Net realized and unrealized gain (loss) on
investments (0.65) 0.02 0.46 (0.18) 0.22
------- ------- ------- ------ -------
Total from investment operations $ (0.15) $ 0.52 $ 0.96 $ 0.33 $ 0.74
------- ------- ------- ------ -------
Less distributions declared to shareholders -
From net investment income $ (0.50) $ (0.50) $ (0.50) $(0.51) $ (0.52)
In excess of net investment income -- -- -- -- (0.00)[3 dags]
------- ------- ------- ------ -------
Total distributions declared to shareholders $ (0.50) $(0.50) $ (0.50) $(0.51) $ (0.52)
------- ------- ------- ------ -------
Net asset value - end of period $ 9.47 $ 10.12 $ 10.10 $ 9.64 $ 9.82
------- ------- ------- ------ -------
Total return++ (1.38)% 5.25% 10.16% 3.43% 7.81%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.66% 0.69% 0.78% 0.86% 0.86%
Net investment income 5.21% 4.96% 5.03% 5.26% 5.26%
Portfolio turnover 52% 23% 14% 24% 56%
Net assets at end of period (000 Omitted) $64,107 $77,628 $77,711 $80,342 $87,553
[sec]The investment adviser voluntarily waived a portion of its fee for certain periods indicated. If the
fee had been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.48 $ 0.49 $ 0.49 -- $ 0.52
Ratios (to average net assets):
Expenses## 0.84% 0.81% 0.85% -- 0.90%
Net investment income 5.03% 4.84% 4.96% -- 5.22%
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#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.
</TABLE>
See notes to financial statements.
38
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
---------------------------------------------------------------
Florida 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 $ 9.47
-------
Income from investment operations# -
Net investment income[sec] $ 0.22
Net realized and unrealized gain (loss) on
investments 0.09
-------
Total from investment operations $ 0.31
-------
Less distributions declared to shareholders -
From net investment income $ (0.22)
In excess of net investment income --
-------
Total distributions declared to shareholders $ (0.22)
-------
Net asset value - end of period $ 9.56
-------
Total return 3.27%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.44%[dag]
Net investment income 4.53%[dag]
Portfolio turnover 10%
Net assets at end of period (000 Omitted) $19,173
[sec]The investment adviser voluntarily waived a portion of its fee
for certain periods indicated. If the fee had been incurred by
the fund, the net investment income per share and the ratios
would have been:
Net investment income $ 0.22
Ratios (to average net assets):
Expenses## 1.64%[dag]
Net investment income 4.33%[dag]
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain
expense offset arrangements.
<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 $ 10.11 $ 10.09 $ 9.64 $ 9.82 $ 9.60
------- ------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.43 $ 0.42 $ 0.42 $ 0.43 $ 0.43
Net realized and unrealized gain (loss) on
investments (0.64) 0.02 0.45 (0.18) 0.22
------- ------- ------- ------- -------
Total from investment operations $ (0.21) $ 0.44 $ 0.87 $ 0.25 $ 0.65
------- ------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.43) $ (0.42) $ (0.42) $ (0.43) $ (0.43)
In excess of net investment income -- -- -- -- (0.00)[3 dags]
------- ------- ------- ------- -------
Total distributions declared to shareholders $ (0.43) $ (0.42) $ (0.42) $ (0.43) $ (0.43)
------- ------- ------- ------- -------
Net asset value - end of period $ 9.47 $ 10.11 $ 10.09 $ 9.64 $ 9.82
------- ------- ------- ------- -------
Total return (2.07)% 4.42% 9.18% 2.56% 6.88%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.45% 1.49% 1.58% 1.72% 1.74%
Net investment income 4.42% 4.16% 4.22% 4.40% 4.36%
Portfolio turnover 52% 23% 14% 24% 56%
Net assets at end of period (000 Omitted) $19,999 $20,813 $16,719 $14,701 $14,448
[sec]The investment adviser voluntarily waived a portion of its fee for certain periods indicated. If the
fee had been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.41 $ 0.41 $ 0.41 -- $ 0.43
Ratios (to average net assets):
Expenses## 1.63% 1.61% 1.65% -- 1.78%
Net investment income 4.24% 4.04% 4.15% -- 4.33%
</TABLE>
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset
arrangements.
See notes to financial statements.
39
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
---------------------------------------------------------------
Georgia 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 $10.26
------
Income from investment operations# -
Net investment income[sec] 0.26
Net realized and unrealized gain (loss) on
investments 0.12
------
Total from investment operations $ 0.38
------
Less distributions declared to shareholders -
From net investment income $(0.26)
In excess of net investment income --
------
Total distributions declared to shareholders $(0.26)
------
Net asset value - end of period $10.38
------
Total return++ 3.75%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.90%[dag]
Net investment income 4.99%[dag]
Portfolio turnover 14%
Net assets at end of period (000 Omitted) $47,713
[sec]The investment adviser voluntarily waived a portion of its fee for certain
of the periods indicated. If this fee had been incurred by the fund, the
net investment income per share and the ratios would have been:
Net investment income $ 0.25
Ratios (to average net assets):
Expenses## 1.10%[dag]
Net investment income 4.79%[dag]
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share data amount was less than $0.01.
#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.
<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 $ 10.93 $ 10.95 $ 10.38 $ 10.47 $ 10.35
------- ------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.52 $ 0.55 $ 0.56 $ 0.56 $ 0.54
Net realized and unrealized gain (loss) on
investments (0.67) (0.02) 0.56 (0.10) 0.12
-------- ------- ------- ------- -------
Total from investment operations $ (0.15) $ 0.53 $ 1.12 $ 0.46 $ 0.66
------- ------- ------- ------- ---------
Less distributions declared to shareholders -
From net investment income $ (0.52) $ (0.55) $(0.55) $ (0.55) $ (0.54)
In excess of net investment income -- (0.00)[3 dags] -- -- (0.00)[3 dags]
------- ------- ------- ------- ------
Total distributions declared to shareholders $ (0.52) $ (0.55) $ (0.55) $ (0.55) $ (0.54)
------- ------- ------- ------- -------
Net asset value - end of period $ 10.26 $ 10.93 $ 10.95 $ 10.38 $ 10.47
------- ------- ------- ------- -------
Total return++ (1.32)% 4.09% 11.02% 4.47% 6.48%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.93% 0.97% 1.03% 1.03% 1.17%
Net investment income 4.98% 4.97% 5.14% 5.34% 5.11%
Portfolio turnover 39% 35% 18% 27% 65%
Net assets at end of period (000 Omitted) $48,054 $56,886 $59,546 $59,843 $68,183
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If
this fee had been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.50 $ 0.54 $ 0.55 $ 0.55 $ 0.53
Ratios (to average net assets):
Expenses## 1.11% 1.09% 1.13% 1.10% 1.27%
Net investment income 4.80% 4.85% 5.04% 5.27% 5.01%
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share data amount was less than $0.01. #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.
</TABLE>
See notes to financial statements.
40
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
---------------------------------------------------------------
Georgia 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 $ 10.27
-------
Income from investment operations# -
Net investment income[sec] $ 0.22
Net realized and unrealized gain (loss) on
investments 0.12
-------
Total from investment operations $ 0.34
-------
Less distributions declared to shareholders -
From net investment income $ (0.22)
In excess of net investment income --
-------
Total distributions declared to shareholders $ (0.22)
-------
Net asset value - end of period $ 10.39
-------
Total return 3.36%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.65%[dag]
Net investment income 4.24%[dag]
Portfolio turnover 14%
Net assets at end of period (000 Omitted) $16,079
[sec]The investment adviser voluntarily waived a portion of its fee for certain
of the periods indicated. If this fee had been incurred by the fund, the net
investment income per share and the ratios would have been:
Net investment income $ 0.21
Ratios (to average net assets)
Expenses## 1.85%[dag]
Net investment income 4.04%[dag]
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share data amount was less than $0.01.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset
arrangements.
<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 $ 10.93 $ 10.95 $ 10.38 $ 10.47 $ 10.36
------- ------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.44 $ 0.47 $ 0.48 $ 0.47 $ 0.45
Net realized and unrealized gain (loss) on
investments (0.66) (0.02) 0.56 (0.09) 0.12
------- ------- ------- ------- -------
Total from investment operations $ (0.22) $ 0.45 $ 1.04 $ 0.38 $ 0.57
------- ------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.44) $ (0.47) $ (0.47) $ (0.47) $ (0.46)
In excess of net investment income -- (0.00)[3 dags] -- -- (0.00)[3 dags]
------- ------- ------- ------- -------
Total distributions declared to shareholders $ (0.44) $ (0.47) $ (0.47) $ (0.47) $ (0.46)
------- ------- ------- ------- -------
Net asset value - end of period $ 10.27 $ 10.93 $ 10.95 $ 10.38 $ 10.47
------- ------- ------- ------- -------
Total return (2.06)% 4.22% 10.19% 3.63% 5.22%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.68% 1.72% 1.77% 1.83% 2.00%
Net investment income 4.24% $ 4.22% 4.39% 4.53% 4.27%
Portfolio turnover 39% 35% 18% 27% 65%
Net assets at end of period (000 Omitted) $14,777 $14,591 $10,871 $9,995 $10,205
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this
fee had been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.42 $ 0.45 $ 0.47 0.47 --
Ratios (to average net assets)
Expenses## 1.86% 1.84% 1.87% 1.90% --
Net investment income 4.06% 4.10% 4.29% 4.46% --
</TABLE>
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share data amount was less than $0.01.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset
arrangements.
See notes to financial statements.
41
<PAGE>
Financial Statements - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
-----------------------------------------------------------------
Maryland 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 10.81
-------
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 $ (0.27)
In excess of net investment income --
-------
Total distributions declared to shareholders $ (0.27)
-------
Net asset value - end of period 10.90
-------
Total return++ 3.37%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.96%[dag]
Net investment income 4.99%[dag]
Portfolio turnover 8%
Net assets at end of period (000 Omitted) $112,751
[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## 1.16%[dag]
Net investment income 4.79%[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.
See notes to financial statements.
<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 $ 11.49 $ 11.47 $ 10.89 $ 11.04 $ 10.94
------- -------- -------- -------- --------
Income from investment operations# -
Net investment income[sec] $ 0.53 $ 0.54 $ 0.54 $ 0.57 $ 0.57
Net realized and unrealized gain (loss) on
investments (0.68) 0.02 0.59 (0.16) 0.09
------- -------- -------- -------- --------
Total from investment operations $ (0.15) $ 0.56 $ 1.13 $ 0.41 $ 0.66
------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.53) $ (0.54) $ (0.54) $ (0.56) $ (0.56)
In excess of net investment income -- -- (0.01) -- --
------- -------- -------- -------- --------
Total distributions declared to shareholders $ (0.53) $ (0.54) $ (0.55) $ (0.56) $ (0.56)
------- -------- -------- -------- --------
Net asset value - end of period 10.81 $ 11.49 $ 11.47 $ 10.89 $ 11.04
------- -------- -------- -------- --------
Total return++ (1.27)% 4.94% 10.57% 3.75% 6.17%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.96% 1.03% 1.09% 1.12% 1.19%
Net investment income 4.85% 4.67% 4.79% 5.21% 5.10%
Portfolio turnover 24% 14% 21% 22% 15%
Net assets at end of period (000 Omitted) $114,957 $131,261 $126,018 $126,405 $139,297
[sec]The investment adviser voluntarily waived a portion of its fee for certain of the periods indicated. If this
fee hadbeen incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.51 $ 0.53 $ 0.53 $ 0.57 --
Ratios (to average net assets):
Expenses## 1.14% 1.15% 1.19% 1.19% --
Net investment income 4.67% 4.55% 4.69% 5.14% --
[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.
See notes to financial statements.
</TABLE>
42
<PAGE>
Financial Statements - continued
Financial Highlights - continued
---------------------------------------------------------------
<TABLE>
<CAPTION>
Maryland 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 $ 10.81
-------
Income from investment operations# -
Net investment income[sec] $ 0.24
Net realized and unrealized gain (loss) on
investments 0.08
-------
Total from investment operations $ 0.32
-------
Less distributions declared to shareholders -
From net investment income $ (0.23)
In excess of net investment income --
-------
Total distributions declared to shareholders $ (0.23)
-------
Net asset value - end of period $ 10.90
-------
Total return 3.03%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.61%[dag]
Net investment income 4.34%[dag]
Portfolio turnover 8%
Net assets at end of period (000 Omitted) $26,313
[sec] The investment adviser voluntarily waived a portion of its fee for certain
of the periods indicated. If this fee had been incurred by the fund, the
net investment income per share and the ratios would have been:
Net investment income $ 0.23
Ratios (to average net assets):
Expenses## 1.81%[dag]
Net investment income 4.14%[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.
<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 $ 11.48 $ 11.47 $ 10.88 $ 11.03 $ 10.93
-------- ------- ------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.46 $ 0.45 $ 0.47 $ 0.50 $ 0.48
Net realized and unrealized gain (loss) on
investments (0.67) 0.02 0.60 (0.17) 0.10
-------- ------- ------- ------- -------
Total from investment operations $ (0.21) $ 0.47 $ 1.07 $ 0.33 $ 0.58
-------- ------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.46) $ (0.46) $ (0.47) $ (0.48) $ (0.48)
In excess of net investment income -- -- (0.01) -- --
-------- -------- -------- -------- --------
Total distributions declared to shareholders $ (0.46) $ (0.46) $ (0.48) $ (0.48) $ (0.48)
-------- -------- -------- -------- --------
Net asset value - end of period $ 10.81 $ 11.48 $ 11.47 $ 10.88 $ 11.03
-------- -------- -------- -------- --------
Total return (1.82)% 4.18% 9.96% 3.03% 5.41%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.61% 1.68% 1.74% 1.82% 1.91%
Net investment income 4.21% 4.01% 4.12% 4.50% 4.36%
Portfolio turnover 24% 14% 21% 22% 15%
Net assets at end of period (000 Omitted) $26,845 $28,902 $21,622 $17,379 $13,694
[sec] The investment adviser voluntarily waived a portion of its fee for certain
of the periods indicated. If this fee had been incurred by the fund, the
net investment income per share and the ratios would have been:
Net investment income $ 0.44 $ 0.45 $ 0.46 $ 0.49 --
Ratios (to average net assets):
Expenses## 1.79% 1.80% 1.84% 1.89% --
Net investment income 4.03% 3.89% 4.02% 4.43% --
[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.
</TABLE>
See notes to financial statements.
43
<PAGE>
Financial Statements - continued
Financial Highlights - continued
------------------------------------------------------------------
<TABLE>
<CAPTION>
Massachusetts 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 $ 10.60
--------
Income from investment operations# -
Net investment income[sec] $ 0.28
Net realized and unrealized gain (loss) on
investments 0.08
--------
Total from investment operations $ 0.36
--------
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 $ 10.67
--------
Total return++ 3.41%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.92%[dag]
Net investment income 5.26%[dag]
Portfolio turnover 16%
Net assets at end of period (000 Omitted) $203,564
[sec] The investment adviser voluntarily waived a portion of its fee for certain
of the periods indicated. If these fees had been incurred by the fund, the
net investment income per share and the ratios would have been:
Net investment income $ 0.27
Ratios (to average net assets):
Expenses## 1.12%[dag]
Net investment income 5.06%[dag]
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#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.
See notes to financial statements.
<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 $ 11.35 $ 11.34 $ 10.86 $ 10.98 $ 10.84
-------- -------- ---------- -------- ---------
Income from investment operations# -
Net investment income[sec] $ 0.57 $ 0.58 $ 0.58 $ 0.61 $ 0.60
Net realized and unrealized gain (loss) on
investments (0.76) (0.01) 0.48 (0.14) 0.14
-------- -------- ---------- -------- ---------
Total from investment operations $ (0.19) $ 0.57 $ 1.06 $ 0.47 $ 0.74
-------- -------- ---------- -------- ---------
Less distributions declared to shareholders -
From net investment income $ (0.56) $ (0.56) $ (0.58) $ (0.59) $ (0.60)
In excess of net investment income -- -- (0.00)[3 dags] -- (0.00)[3 dags]
-------- -------- ---------- -------- ---------
Total distributions declared to shareholders $ (0.56) $ (0.56) $ (0.58) $ (0.59) $ (0.60)
-------- -------- ---------- -------- ---------
Net asset value - end of period $ 10.60 $ 11.35 $ 11.34 $ 10.86 $ 10.98
-------- -------- ---------- -------- ---------
Total return++ (1.57)% 5.11% 9.99% 4.39% 6.95%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 0.92% 1.00% 1.06% 1.12% 1.17%
Net investment income 5.29% 5.08% 5.18% 5.55% 5.44%
Portfolio turnover 35% 28% 24% 33% 31%
Net assets at end of period (000 Omitted) $207,228 $239,980 $237,861 $234,874 $249,497
[sec] The investment adviser voluntarily waived a portion of its fee for certain
of the periods indicated. If these fees had been incurred by the fund, the
net investment income per share and the ratios would have been:
Net investment income $ 0.55 $ 0.57 $ 0.57 $ 0.60 --
Ratios (to average net assets):
Expenses## 1.10% 1.12% 1.16% 1.19% --
Net investment income 5.11% 4.96% 5.08% 5.48% --
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01. #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.
</TABLE>
See notes to financial statements.
44
<PAGE>
Financial Statements - continued
Financial Highlights - continued
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Massachusetts 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 $ 10.60
---------
Income from investment operations# -
Net investment income[sec] $ 0.24
Net realized and unrealized gain (loss) on
investments 0.08
---------
Total from investment operations $ 0.32
---------
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 $ 10.67
---------
Total return 3.07%[2 dags]
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.57%[dag]
Net investment income 4.61%[dag]
Portfolio turnover 16%
Net assets at end of period (000 Omitted) $27,941
[sec] The investment adviser voluntarily waived a portion of its fee,
respectively, for certain of the periods indicated. If these fees had been
incurred by the fund, the net investment income per share and the ratios
would have been:
Net investment income $ 0.23
Ratios (to average net assets):
Expenses## 1.77%[dag]
Net investment income 4.41%[dag]
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01. #Per share data are based on average
shares outstanding. ##Ratios do not reflect expense reductions from certain
expense offset arrangements.
<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 $ 11.35 $ 11.35 $ 10.87 $ 10.99 $ 10.84
-------- ------- --------- ------- -------
Income from investment operations# -
Net investment income[sec] $ 0.50 $ 0.50 $ 0.51 $ 0.53 $ 0.52
Net realized and unrealized gain (loss) on
investments (0.76) (0.01) 0.48 (0.13) 0.15
-------- ------- --------- ------- -------
Total from investment operations $ (0.26) $ 0.49 $ 0.99 $ 0.40 $ 0.67
-------- ------- --------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.49) $ (0.49) $ (0.51) $ (0.52) $ (0.52)
In excess of net investment income -- -- (0.00)[3 dags] -- (0.00)[3 dags]
-------- -------- --------- ------- -------
Total distributions declared to shareholders $ (0.49) $ (0.49) $ (0.51) $ (0.52) $ (0.52)
-------- -------- --------- ------- -------
Net asset value - end of period $ 10.60 $ 11.35 $ 11.35 $ 10.87 $ 10.99
-------- -------- --------- ------- -------
Total return (2.30)% 4.43% 9.25% 3.66% 6.27%
Ratios (to average net assets)/Supplemental data[sec]:
Expenses## 1.57% 1.64% 1.71% 1.81% 1.90%
Net investment income 4.64% 4.43% 4.52% 4.81% 4.71%
Portfolio turnover 35% 28% 24% 33% 51%
Net assets at end of period (000 Omitted) $25,743 $25,616 $18,750 $15,204 $11,316
[sec] The investment adviser voluntarily waived a portion of its fee, respectively, for certain of the periods indicated. If
these fees had been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.48 $ 0.49 $ 0.50 $ 0.52 --
Ratios (to average net assets):
Expenses## 1.75% 1.76% 1.81% 1.88% --
Net investment income 4.46% 4.31% 4.42% 4.74% --
[dag]Annualized.
[2 dags]Not annualized.
[3 dags]Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset
arrangements.
</TABLE>
See notes to financial statements.
45
<PAGE>
Notes to Financial Statements (Unaudited)
(1) Business and Organization
MFS Alabama Municipal Bond Fund (Alabama Fund), MFS Arkansas Municipal Bond Fund
(Arkansas Fund), MFS California Municipal Bond Fund (California Fund), MFS
Florida Municipal Bond Fund (Florida Fund), MFS Georgia Municipal Bond Fund
(Georgia Fund), MFS Maryland Municipal Bond Fund (Maryland Fund), MFS
Massachusetts Municipal Bond Fund (Massachusetts Fund) are each a
non-diversified series of the MFS Municipal Series Trust (the trust). The trust
is organized as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as an open-end 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 are reported at market value using closing settlement prices.
Securities for which there are no such quotations or valuations are valued at
fair value as determined in good faith by the Trustees.
Futures Contracts - Each fund may enter into futures contracts for the delayed
delivery of securities or contracts based on financial indices at a fixed price
on a future date. In entering such contracts, each fund is required to deposit
with the broker either in cash or securities an amount equal to a certain
percentage of the contract amount. Subsequent payments are made or received by
the fund each day, depending on the daily fluctuations in the value of the
contract, and are recorded for financial statement purposes as unrealized gains
or losses by the fund. Each fund's investment in futures contracts is designed
to hedge against anticipated future changes in interest rates or securities
prices. Investments in interest rate futures for purposes other than hedging may
be made to modify the duration of the portfolio without incurring the additional
transaction costs involved in buying and selling the underlying securities.
Should interest rates or securities prices move unexpectedly, the fund may not
achieve the anticipated benefits of the futures contracts and may realize a
loss.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All premium and
original issue discount is amortized or accreted for financial statement and tax
reporting purposes as required by federal income tax regulations. Interest
payments received in additional securities are recorded on the ex-interest date
in an amount equal to the value of the security on such date. Each 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 expenses on the Statement of
Operations.
Tax Matters and Distributions - The trust's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net income,
including any net realized gain on investments. Accordingly, no provision for
federal income or excise tax is provided. Distributions paid by each fund from
net interest received on tax-exempt municipal bonds are not includable by
shareholders as gross income for federal income tax purposes because each fund
intends to meet certain requirements of the Code applicable to regulated
investment companies, which will enable each fund to pay exempt-interest
dividends. The portion of such interest, if any, earned on private activity
bonds issued after August 7, 1986, may be considered a tax-preference item to
shareholders.
Distributions to shareholders are recorded on the ex-dividend date. The fund
distinguishes between distributions on a tax basis and a financial reporting
basis and requires that only distributions in excess of tax basis earnings and
profits are reported in the financial statements as distributions from paid-in
capital. Differences in the recognition or classification of income between the
financial statements and tax earnings 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.
46
<PAGE>
Notes to Financial Statements (Unaudited) - continued
At September 30, 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 on:
<TABLE>
<CAPTION>
Alabama Arkansas California Florida Georgia Maryland Massachusetts
Expiration Date Fund Fund Fund Fund Fund Fund Fund
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
March 31, 2003 $ -- $ -- $3,034,670 3,891,711 $ -- $ -- $ 253,082
March 31, 2004 -- 6,486,073 403,290 -- 662,131 2,378,293 1,732,935
March 31, 2005 -- 215,971 588,165 1,290,661 -- 1,055,172 405,183
March 31, 2006 -- -- -- 781,761 -- -- --
March 31, 2007 -- -- -- -- -- -- 242,062
March 31, 2008 208,252 15,758 -- -- -- -- --
--------- ----------- ---------- ---------- -------- ---------- ----------
Total $208,252 $6,717,802 $4,026,125 $5,964,133 $662,131 $3,433,465 $2,633,262
========= =========== ========== ========== ======== ========== ==========
</TABLE>
Multiple Classes of Shares of Beneficial Interest - Each fund offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the fund based on the value
of settled shares outstanding of each class, without distinction between share
classes. Dividends are declared separately for each class. Differences in per
share dividend rates are generally due to differences in separate class
expenses. Class B shares will convert to Class A shares approximately eight
years after purchase.
(3) Transactions with Affiliates
Investment Adviser - The Trust has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an annual rate of 0.55% of
each fund's average daily net assets. The investment adviser has voluntarily
agreed to waive a portion of its fee with respect to each fund, which is
reflected as a reduction of expenses in the Statement of Operations.
The trust pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the trust, all of whom receive
remuneration for their services to the fund from MFS. Certain officers and
Trustees of the 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 and Mr. Bailey.
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>
Alabama Arkansas California Florida Georgia Maryland Massachusetts
Fund Fund Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,661 $2,991 $3,075 $2,991 $2,984 $3,140 $3,142
</TABLE>
Administrator - The Trust has an administrative services agreement with MFS to
provide each fund with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, each fund pays MFS an administrative fee
at the following annual percentages of the fund's average daily net assets:
<TABLE>
<S> <C>
First $1 billion 0.0175%
Next $1 billion 0.0130%
Next $1 billion 0.0005%
In excess of $3 billion 0.0000%
</TABLE>
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$12,191, $7,447, $32,829, $15,099, $4,717, $14,599, and $15,025 for the six
months ended September 30, 2000, as its portion of the sales charge on sales of
Class A shares of the Alabama, Arkansas, California, Florida, Georgia, Maryland,
and Massachusetts funds, respectively.
The Trustees have adopted a distribution plan for Class A, Class B, and Class C
shares pursuant to Rule 12b-1 of the Investment Company Act of 1940 as follows:
Each fund's distribution plan provides that the fund will pay MFD up to 0.35%
per annum of its average daily net assets attributable to Class A shares in
order that MFD may pay expenses on behalf of the fund related to the
distribution and servicing of its shares. These expenses include a service fee
paid to each securities dealer that enters into a sales agreement with MFD of up
to 0.25% per annum of each 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 each fund's average daily net assets
attributable to Class A shares. MFD retains the service fee for accounts not
attributable to a securities dealer, which amounted to $3,865, $1,868, $4,233,
$0, $1,795, $8,037, and $30,515 for the Alabama, Arkansas, California, Florida,
Georgia, Maryland, and Massachusetts 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 0.25%, 0.10%, 0.10%, 0.00%, 0.25%,
0.35%, and 0.35% of each fund's average daily net assets attributable to Class A
shares on an annualized basis for Alabama, Arkansas, California, Florida,
Georgia, Maryland, and Massachusetts funds, respectively. Payments of the 0.10%
per annum Class A distribution fee will be implemented on such date as the
Trustees of the Trust may determine for the Alabama, Arkansas, California,
Florida, and Georgia funds. Payment of the 0.25% per annum Class A service fee
by the Florida Fund will
47
<PAGE>
Notes to Financial Statements (Unaudited) - continued
commence on such date as the Trustees of the trust may determine. In the case of
the Arkansas and California Funds, a portion of the service fee is currently
being paid by each fund; payment of the remaining portion of the Class A service
fee will become payable on such date as the Trustees of the trust may determine.
Each fund's distribution plan provides that the fund will pay MFD a distribution
fee of 0.75% per annum, and a service fee of up to 0.25% per annum, of the
fund's average daily net assets attributable to Class B and Class C shares. MFD
will pay to securities dealers that enter into a sales agreement with MFD all or
a portion of the service fee attributable to Class B and Class C shares, and
will pay to such securities dealers all of the distribution fee attributable to
Class C shares. The service fee is intended to be consideration for services
rendered by the dealer with respect to Class B and Class C shares. MFD retains
the service fee for accounts not attributable to a securities dealer, which
amounted to $184, $37, $375, $0, $1,013, $726, and $1,277 for the Alabama,
Arkansas, California, Florida, Georgia, Maryland, and Massachusetts funds,
respectively, for Class B shares, for the six months ended September 30, 2000.
MFS retained no service fees with respect to California Class C shares. Fees
incurred under the distribution plan during the six months ended September 30,
2000, were 1.00%, 1.00%, 0.90%, 0.80%, 1.00%, 1.00%, and 1.00% of each fund's
average daily net assets attributable to Class B shares on an annualized basis
for Alabama, Arkansas, California, Florida, Georgia, Maryland, and Massachusetts
funds, respectively, on an annualized basis. Fees incurred under the
distribution plan for the six months ended September 30, 2000, were 1.00% of the
fund's average daily net assets attributable to Class C shares of the California
Fund on an annualized basis. Except in the case of the 0.25% per annum first
year Class B service fee, payments by the Florida Fund will be suspended until
such date as the Trustees of the Trust may determine. In the case of the
Arkansas and California funds, except in the case of the 0.25% per annum first
year Class B service fee is currently 0.10% per annum on Class B shares held
over one year.
Certain Class A and Class C shares are subject to a contingent deferred sales
charge in the event of a shareholder redemption within 12 months following
purchase. A contingent deferred sales charge is imposed on shareholder
redemption's of Class B shares in the event of a shareholder redemption within
six years of purchase. MFD receives all contingent deferred sales charges.
Contingent deferred sales charges imposed during the six months ended September
30, 2000, for Class A, Class B, and Class C shares, were as follows.
<TABLE>
<CAPTION>
Alabama Arkansas California Florida Georgia Maryland Massachusetts
CDSC imposed Fund Fund Fund Fund Fund Fund Fund
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ -- $ -- $ -- $ --
Class B 16,222 10,249 69,687 39,454 19,662 30,910 26,316
Class C -- -- 12,616 -- -- -- --
</TABLE>
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of each fund's average daily net assets at an effective annual rate
of 0.10%.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations were as follows (000
Omitted):
<TABLE>
<CAPTION>
Alabama Arkansas California Florida Georgia Maryland Massachusetts
Fund Fund Fund Fund Fund Fund Fund
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Purchases $7,627 $9,555 $19,348 $ 7,550 $8,769 $11,493 $36,856
Sales 5,450 6,478 27,843 11,252 8,995 15,208 35,660
</TABLE>
The cost and unrealized appreciation or depreciation in value of the investments
owned by each fund, as computed on a federal income tax basis, are as follows
(000 Omitted):
<TABLE>
<CAPTION>
Alabama Arkansas California
Fund Fund Fund
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggregate cost $ 83,936 $117,253 $252,828
-------- -------- --------
Gross unrealized appreciation $ 2,734 $ 5,079 $ 14,416
Gross unrealized depreciation (1,234) (1,160) (4,650)
-------- -------- --------
Net unrealized appreciation (depreciation) $ 1,500 $ 3,919 $ 9,766
-------- -------- --------
<CAPTION>
Florida Georgia Maryland Massachusetts
Fund Fund Fund Fund
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggregate cost $ 78,151 $60,939 $132,429 $224,817
-------- ------- -------- --------
Gross unrealized appreciation $ 2,405 $ 2,614 $ 5,594 $ 7,878
Gross unrealized depreciation (1,385) (895) (1,306) (4,680)
-------- ------- -------- --------
Net unrealized appreciation (depreciation) $ 1,020 $ 1,719 $ 4,288 $ 3,198
-------- ------- -------- --------
</TABLE>
48
<PAGE>
Notes to Financial Statements (Unaudited) - continued
(5) Shares of Beneficial Interest
The trust's declaration permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest. Transactions in fund shares
were as follows:
<TABLE>
<CAPTION>
Alabama Fund
Class A shares ---------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount
----------------------------------------------------------------------------
<S> <C> <C>
Shares sold 424 $ 4,269
Shares issued to shareholders in reinvestment
of distributions 84 843
Shares reacquired (464) (4,660)
---- --------
Net increase (decrease) 44 $ 452
==== ========
Year Ended March 31, 2000 (000 Omitted) Shares Amount
---------------------------------------------------------------------------
Shares sold 1,105 $ 11,362
Shares issued to shareholders in reinvestment
of distributions 219 2,214
Shares reacquired (913) (9,232)
----- --------
Net increase (decrease) 411 $ 4,344
===== ========
<CAPTION>
Arkansas Fund California Fund
Class A shares ------------------------- ----------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount Shares Amount
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,030 $ 9,801 1,315 $ 7,269
Shares issued to shareholders in reinvestment
of distributions 140 1,346 392 2,166
Shares reacquired (887) (8,550) (3,475) (19,149)
----- --------- ------ ---------
Net increase (decrease) 283 $ 2,597 (1,768) $ (9,714)
===== ========= ====== =========
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 588 $ 5,723 4,419 $ 24,781
Shares issued to shareholders in reinvestment
of distributions 278 2,694 853 4,763
Shares reacquired (2,017) (19,437) (8,108) (45,059)
------ --------- ------ ---------
Net increase (decrease) (1,151) $ (11,020) (2,836) $ (15,515)
====== ========= ====== =========
</TABLE>
<TABLE>
<CAPTION>
Florida Fund
--------------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount
------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 355 $ 3,377
Shares issued to shareholders in reinvestment
of distributions 61 581
Shares reacquired (756) (7,173)
---- ---------
Net decrease (340) $ (3,215)
==== =========
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount
------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 1,923 $ 18,244
Shares issued to shareholders in reinvestment
of distributions 142 1,367
Shares reacquired (2,970) (28,138)
------ ---------
Net decrease (905) $ (8,527)
====== =========
<CAPTION>
Georgia Fund Maryland Fund
-------------------------- -----------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 154 $ 1,586 222 $ 2,412
Shares issued to shareholders in reinvestment
of distributions 60 612 134 1,454
Shares reacquired (303) (3,110) (645) (6,966)
---- -------- ---- ---------
Net decrease (89) $ (912) (289) $ (3,100)
==== ======== ==== =========
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 238 $ 2,467 594 $ 6,536
Shares issued to shareholders in reinvestment
of distributions 130 1,344 279 3,043
Shares reacquired (890) (9,189) (1,670) (18,189)
----- -------- ------ ---------
Net decrease (522) $ (5,378) (797) $ (8,610)
===== ======== ====== =========
</TABLE>
<TABLE>
<CAPTION>
Massachusetts Fund
-------------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 338 $ 3,584
Shares issued to shareholders in reinvestment
of distributions 231 2,442
Shares reacquired (1,040) (11,014)
------ ---------
Net decrease (471) $ (4,988)
====== =========
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount
------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 1,386 $ 15,059
Shares issued to shareholders in reinvestment
of distributions 490 5,262
Shares reacquired (3,468) (37,122)
------- ---------
Net decrease (1,592) $ (16,801)
======= =========
</TABLE>
49
<PAGE>
Notes to Financial Statements (Unaudited) - continued
<TABLE>
<CAPTION>
Alabama Fund
Class B shares ---------------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 58 $ 587
Shares issued to shareholders in
reinvestment of distributions 12 116
Shares reacquired (86) (857)
--- -----
Net increase (decrease) (16) $(154)
=== =====
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount
------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 259 $2,682
Shares issued to shareholders in
reinvestment of distributions 33 330
Shares reacquired (263) (2,653)
------ ------
Net increase (decrease) 29 $ 359
====== ======
<CAPTION>
Arkansas Fund California Fund
Class B shares --------------------------- --------------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount Shares Amount
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 36 $ 344 1,094 $ 6,060
Shares issued to shareholders in
reinvestment of distributions 11 109 110 611
Shares reacquired (59) (563) (1,170) (6,481)
--- ----- ------ --------
Net increase (decrease) (12) $(110) 34 $ 190
=== ===== ====== ========
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount Shares Amount
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 117 $ 1,140 2,882 $ 16,250
Shares issued to shareholders in
reinvestment of distributions 23 223 218 1,211
Shares reacquired (227) (2,199) (2,588) (14,343)
------ --------- ------- ----------
Net increase (decrease) (87) $ (836) 512 $ 3,118
====== ========= ======= ==========
</TABLE>
<TABLE>
<CAPTION>
Florida Fund
---------------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 180 $ 1,696
Shares issued to shareholders in
reinvestment of distributions 16 155
Shares reacquired (302) (2,854)
---- --------
Net increase (decrease) (106) $ (1,003)
==== ========
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount
------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 804 $ 7,728
Shares issued to shareholders in
reinvestment of distributions 34 322
Shares reacquired (783) (7,418)
------ --------
Net increase (decrease) 55 $ 632
====== ========
<CAPTION>
Georgia Fund Maryland Fund
--------------------------- -------------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount Shares Amount
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 171 $ 1,763 142 $ 1,527
Shares issued to shareholders in
reinvestment of distributions 15 155 32 341
Shares reacquired (78) (806) (243) (2,624)
--- --------- ---- ---------
Net increase (decrease) 108 $ 1,112 (69) $ (756)
=== ========= ==== =========
Year Ended March 31, 2000 (000 Omitted) Shares Amount Shares Amount
--------------------------------------------------------------------------------------------------------
Shares sold 432 $ 4,486 455 $ 4,999
Shares issued to shareholders in
reinvestment of distributions 27 282 66 720
Shares reacquired (355) (3,636) (555) (5,997)
------ --------- ------ ---------
Net increase (decrease) 104 $ 1,132 (34) $ (278)
====== ========= ====== =========
</TABLE>
<TABLE>
<CAPTION>
Massachusetts Fund
--------------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount
--------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 342 $ 3,628
Shares issued to shareholders in reinvestment
of distributions 32 340
Shares reacquired (184) (1,945)
---- --------
Net increase 190 $ 2,023
==== ========
<CAPTION>
Year Ended March 31, 2000 (000 Omitted) Shares Amount
------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 653 $ 7,062
Shares issued to shareholders in reinvestment
of distributions 64 684
Shares reacquired (545) (5,828)
------ --------
Net increase 172 $ 1,918
====== ========
</TABLE>
<TABLE>
<CAPTION>
California Fund
Class C shares --------------------------
Six Months Ended September 30, 2000 (000 Omitted) Shares Amount
--------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 3,332 $ 18,487
Shares issued to shareholders in reinvestment
of distributions 77 424
Shares reacquired (2,915) (16,272)
------ ---------
Net increase 494 $ 2,639
====== =========
Year Ended March 31, 2000 (000 Omitted) Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 990 $ 5,521
Shares issued to shareholders in reinvestment
of distributions 41 227
Shares reacquired (859) (4,749)
------- ---------
Net increase 172 $ 999
======= =========
</TABLE>
50
<PAGE>
Notes to Financial Statements (Unaudited) - continued
(6) Line of Credit
The Trust and other affiliated funds participate in an $820 million unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. Borrowings may be made to temporarily finance the repurchase of fund
shares. Interest is charged to each fund, based on its borrowings, at a rate
equal to the bank's base rate.
In addition, a commitment fee, based on the average daily unused portion of the
line of credit, is allocated among the participating funds at the end of each
quarter. The commitment fee is allocated to each of the funds for the six months
ended September 30, 2000, ranged from $305 to $2,162.
(7) Financial Instruments
Each fund 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 and foreign currency exchange rates. These financial
instruments include futures contracts. The notional or contractual amounts of
these instruments represent the investment the fund has in particular classes of
financial instruments and does not necessarily represent the amounts potentially
subject to risk. The measurement of the risks associated with these instruments
is meaningful only when all related and offsetting transactions are considered.
Futures Contracts
<TABLE>
<CAPTION>
Unrealized
Appreciation
Fund Description Expiration Contracts Position (Depreciation)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Arkansas Fund Municipal Bond Index December 2000 42 Long $(53,813)
Georgia Fund Municipal Bond Index December 2000 5 Long $ (6,407)
Massachusetts Fund Municipal Bond Index December 2000 36 Long $ 563
</TABLE>
At September 30, 2000, the funds had sufficient cash and/or securities to cover
any commitments under these contracts.
(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 Alabama, Arkansas, California, Florida, Georgia, Maryland and
Massachusetts funds owned the following restricted securities (constituting
6.0%, 8.2%, 7.9, 4.6%, 4.5% and 9.6% of each fund's net assets, respectively)
which may not be publicly sold without registration under the Securities Act of
1933. Each fund does not have the right to demand that such securities be
registered. The values of these securities is determined by valuations furnished
by dealers or by a pricing service, or if not available, are valued at fair
value in good faith by the Trustees.
<TABLE>
<CAPTION>
Fund Description
-----------------------------------------------------------------------------------------------------
<S> <C>
Alabama Fund Guam Power Authority Rev., RITES, AMBAC, 6.236s 2013
Guam Power Authority Rev., RITES, AMBAC, 5.757s 2018
Puerto Rico Public Finance Corp., RITES, FSA, 7.175s, 2013
Puerto Rico Public Finance Corp., RITES, FSA, 7.175s, 2016
Puerto Rico Municipal Finance Agency, RITES, FSA, 7.425s, 2017
Arkansas Fund Arkansas Development Finance Authority, Local Gov. Rev., 7.1s, 2008
Puerto Rico Commonwealth., RITES, MBIA, 7.939s, 2020
Puerto Rico Municipal Finance Agency, RITES, FSA, 7.42s, 2017
Puerto Rico Municipal Finance Agency, RITES, FSA, 7.42s, 2018
California Fund Desert Hospital District, CA, Hospital Rev. (Desert Hospital Corp.), 8.266s, 2020
Los Angeles, CA, 6.92s, 2014
State of California, 5.92s, 2015
State of California, 7.92s, 2017
University of California Rev., MBIA, 6.107s, 2016
<CAPTION>
Date of Share/Par
Fund Acquisition Amount Cost Value
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama Fund 6/10/99 500,000 $ 536,360 $ 521,815
6/10/99 4,500,000 4,376,790 4,111,560
9/30/99 500,000 509,110 552,370
3/31/99 500,000 569,030 530,910
1/6/00 500,000 469,080 517,890
-----------
$ 6,234,545
Arkansas Fund 2/14/92 2,440,000 $2,621,157 $ 2,510,736
3/30/00 3,000,000 3,067,320 3,170,250
1/6/00 735,000 689,548 761,298
1/6/00 3,250,000 3,006,835 3,334,305
-----------
$ 9,776,589
California Fund 7/2/92 3,000,000 3,012,000 3,312,630
7/20/99 5,405,000 5,672,548 5,842,535
3/10/99 5,000,000 4,922,400 4,717,850
1/3/00 1,250,000 1,230,275 1,366,675
5/21/99 5,705,000 5,783,273 5,689,825
-----------
$20,929,515
</TABLE>
51
<PAGE>
Notes to Financial Statements (Unaudited) - continued
<TABLE>
<S> <C>
Florida Fund Puerto Rico Commonwealth, RITES, Pennsylvania 652A 1, MBIA, 7.939s, 2019
State of Florida, Dept. of Transportation, RITES, 5.593s, 2017
Georgia Fund Atlanta, GA, Water & Wastewater Rev., FGIC, 6.593s, 2016
Commonwealth of Puerto Rico, Municipal Finance Agency, FSA, 8.42s, 2016
Maryland Fund Guam Power Authority Rev., AMBAC, 6.236s, 2015
Puerto Rico Electric Power Authority, Power Rev., FSA, 6.92s, 2015
Puerto Rico Municipal Finance Agency, FSA, 7.42s, 2019
Puerto Rico Public Finance Corp., AMBAC, 7.17s, 2013
Puerto Rico Public Finance Corp., AMBAC, 7.17s, 2016
Massachusetts Fund Dudley-Charleton, MA, Regional School District, FGIC,
6.241s, 2015
Dudley-Charleton, MA, Regional School District, FGIC, 6.241s, 2016
Dudley-Charleton, MA, Regional School District, FGIC, 6.241s, 2018
Massachusetts Bay Transportation Authority, RITES, Pennsylvania
675A1, 8.161s, 2016
Massachusetts Water Resources Authority, RITES, FGIC,
8.613s, 2019
Plymouth County, MA, Correctional Facilities, AMBAC, 5.125s, 2018
Puerto Rico Public Finance Corp., AMBAC, 7.175s, 2016
<CAPTION>
<S> <C> <C> <C> <C>
Florida Fund 4/6/00 1,000,000 $1,030,240 $ 1,070,650
4/9/99 3,000,000 3,042,840 2,612,820
---------
$ 3,683,470
Georgia Fund 4/20/99 4,000,000 $4,630,192 $ 4,166,160
1/6/00 500,000 518,896 564,460
-----------
$ 4,730,620
Maryland Fund 5/20/99 1,680,000 $1,754,371 $ 1,692,701
9/16/99 1,400,000 1,367,100 1,416,772
1/6/00 1,000,000 905,723 1,016,040
9/30/99 500,000 508,652 552,370
3/31/99 1,520,000 1,717,199 1,613,966
-----------
$ 6,291,849
Massachusetts Fund 4/28/99 1,365,000 $1,493,183 $ 1,348,934
4/28/99 1,430,000 1,551,257 1,412,568
4/28/99 1,565,000 1,682,130 1,502,400
4/19/00 4,835,000 5,473,256 5,716,614
3/16/00 4,010,000 4,730,590 4,978,736
3/5/99 5,000,000 4,979,446 4,659,200
3/31/99 2,500,000 2,824,341 2,654,550
-----------
$22,273,002
</TABLE>
52
<PAGE>
MFS[Reg TM] Municipal Series Trust
Trustees
Marshal 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 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..; Management 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*
+ Independent Trustee
* MFS Investment Management
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).
Investor Service
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
For general information, call toll free:
1-800-225-2606 any business day from
8 a.m. to 8 p.m. Eastern time.
For service to speech- or hearing-impaired,
call toll free: 1-800-637-6576 any business
day from 9 a.m. to 5 p.m. Eastern time. (To
use this service, your phone must be equipped
with a Telecommunications Device for the Deaf.)
For share prices, account balances, 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
<PAGE>
MFS[Reg] Municipal
Series Trust
MFS[Reg] Alabama Municipal Bond Fund
MFS[Reg] Arkansas Muncipal Bond Fund
MFS[Reg] California Municipal Bond Fund
MFS[Reg] Florida Municipal Bond Fund
MFS[Reg] Georgia Municipal Bond Fund
MFS[Reg] Maryland Municipal Bond Fund
MFS[Reg] Massachusetts Municipal Bond Fund
[MFS Logo] MFS[Reg]
INVESTMENT MANAGEMENT
We invented the mutual fund[Reg]
500 Boylston Street
Boston, MA 02116-3741
--------------
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[Copyright] MFS Investment Management[Reg]
MFS[Reg] investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
