<TABLE>
<CAPTION>
First Union Florida Municipal Bond Portfolio
Statement of Investments
June 30, 1995
(unaudited)
<S> <C> <C>
Credit
Rating:
Principal Moody's
Amount or S&P Value
Long-Term Municipal Securities - 91.9%
Florida - 91.9%
1,500,000 Brevard County,
Utility RRB,
5.25%, 3/1/14, OID (AMBAC Insured)
(callable 3/1/03 @ 102) AAA $1,393,620
1,000,000 Casselberry,
Utility Systems. RRB,
5.125%, 10/1/10, OID (FGIC Insured)
(callable 10/1/02 @ 102) AAA 938,920
500,000 Collier County,
(The Moorings, Inc. Project)
Health Facility Authority RRB,
7.00%, 12/1/19
(callable 12/1/04 @ 102) BBB+ 504,645
2,000,000 Dade County,
(St. Thomas University)
(Sun Bank Miami LOC)
Education Facility Authority RRB,
6.00%, 1/1/14, OID
(callable 1/1/04 @ 102) AA- 1,913,940
1,000,000 Dade County,
Water & Sewer RB,
5.00%, 10/1/13, OID
(callable 10/1/03 @102) AAA 906,370
1,000,000 Dade County,
Education Facility Authority Revenue,
St. Thomas University,
6.125%, 1/1/19, OID
(callable 1/1/04 @ 102) AA- 959,770
1,000,000 Dade County,
Special Obligation,
Courthouse Center Project,
6.25%, 4/1/09
(callable 4/1/04 @102) A 1,026,660
2,000,000 Dade County,
Miami Cerebral Palsy Service,
(Greenwich Partners)
Development Authority RB,
8.00%, 6/1/22
(callable 6/1/05 @ 102) NR $2,000,000
3,000,000 Escambia County,
Champion International Corp. Project,
PC RB,
5.875%, 6/1/22, OID
(callable 12/1/03 @ 102)
(Subject to AMT) BBB 2,806,110
1,000,000 Escambia County
Health Facilities RB Baptist Hospital Inc.,
6.00%, 10/1/14
(callable @ 102 10/1/03) BBB+ 910,700
1,000,000 Florida St.,
Board of Administration,
Public Education, RRB,
5.00%, 6/1/09, OID AA 947,100
1,500,000 Gainesville,
Utility System RRB (Series B),
5.50%, 10/1/13, OID
(callable 10/1/03 @ 102) AA 1,428,495
1,235,000 Hialeah,
Capital Improvement RB,
5.50%, 10/1/13, OID
(callable 10/1/03 @ 102) Baa-1 1,105,177
1,000,000 Hillsborough County,
Port Distribution RB,
(Tampa Port Authority)
5.75%, 6/1/13, OID (FSA Insured)
(callable 6/1/05 @ 102) AAA 967,390
2,000,000 Hillsborough County,
IDA RRB ,
(University Community Hospital)
6.50%, 8/15/19 (MBIA Insured) AAA $2,164,020
1,000,000 Kissimmee,
Utility Authority, Electric Systems RRB,
5.50%, 10/1/15 OID
(callable 10/1/03 @ 102), (FGIC Insured) AAA 951,840
1,025,000 Leon County,
Finance Authority Multi County Program,
(GNMA/FHLMC Coll)
6.25%, 7/1/19
(callable 12/1/04 @ 102) Aaa 1,007,493
3,000,000 Miami Beach,
Redevelopment Agency.,
Tax Increment RB,
5.80%, 12/1/13, OID
(callable 12/1/04 @102) BBB 2,722,380
1,000,000 Okaloosa County,
Water & Sewer RB,
6.00%, 7/1/11, OID (AMBAC Insured) AAA 1,024,870
1,000,000 Orlando,
Utility Common Water & Electric RRB, (Sub-Series D)
6.75%, 10/1/17, OID AA- 1,111,080
1,000,000 Palm Beach County,
Single Family Mortgage (GNMA/FNMA Coll),
6.50%, 10/1/21
(callable 10/1/05 @102) Aaa 1,010,390
2,195,000 Palm Beach County,
Facility Authority Revenue,
6.20%, 10/1/11
(callable 10/1/03 @ 102) A+ 2,183,608
1,000,000 Port Everglades,
Port Authority RB (Escrowed to Maturity),
7.125%, 11/1/16, OID AAA $1,162,230
1,500,000 Reedy Creek,
Import Distribution Utility RRB (Series 1),
5.00%, 10/1/19, OID (MBIA Insured)
(callable 4/1/04 @ 101) AAA 1,321,620
500,000 Sarasota County,
Solid Waste Systems RRB,
5.625%, 10/1/13, OID
(callable 10/1/03 @ 102) A 478,245
1,000,000 Sarasota County,
Utility Systems RB,
6.50%, 10/1/14, OID (FGIC Insured)
(callable 10/1/04 @ 102) AAA 1,049,550
1,035,000 Sebastian,
Utility Systems RB,
5.40%, 10/1/13 (MBIA Insured)
(callable 10/1/03 @ 102) AAA 984,182
Total Long - Term Municipal Securities
(cost $35,011,428) 34,980,405
Mutual Fund Shares 1.9%
713,000 Lehman Municipal Money Market Fund 713,000
(cost $713,000)
Total Investments - 93.8% (cost $35,724,428) 35,693,405
Other Assets and Liabilities - net 6.2% 2,351,918
Net Assets - 100% $38,045,323
</TABLE>
The following abbreviations are used in this portfolio:
AMBAC --American Municipal Bond Assurance Corporation
FGIC --Financial Guaranty Insurance Company
FSA --Financial Security Assurance
GNMA/FNMA Coll --Governmental National Mortgage Association/Federal Home Loan
Mortgage Corp. Collateral
IDA --Industrial Development Authority
LOC --Letter of Credit
MBIA --Municipal Bond Investors Assurance
OID --Original Issue Discount
PC --Pollution Control
RB --Revenue Bond
RRB --Revenue Refunding Bond
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities
June 30, 1995
(unaudited)
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Assets:
Investments at value (identified cost $35,724,428) $35,693,404
Cash 319
Receivable for investment securities sold 1,932,947
Interest receivable 525,324
Receivable for Fund shares sold 60,655
Prepaid expenses 23,126
----------------
Total assets 38,235,775
----------------
Liabilities:
Dividends payable 73,947
Due to Adviser 111
----------------
Total liabilities 74,058
----------------
Net Assets $38,161,717
================
Net assets consist of:
Paid-in capital $39,969,768
Accumulated net realized loss (1,777,027)
Net unrealized depreciation of investments (31,024)
================
Net assets $38,161,717
================
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Calculation of net asset value per share:
Class A Shares ($8,493,390 / 878,237 shares of beneficial interest outstanding) $9.67
Sales charge - 4.75% of offering price .48
------
Maximum offering price $10.15
Class B Shares ($26,424,619 / 2,732,176 shares of beneficial interest outstanding) $9.67
-----
Class Y Shares ($3,243,708 / 335,389 shares of beneficial interest outstanding) $9.67
-----
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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First Union Florida Municipal Bond Portfolio
Statement of Operations
Six Months Ended June 30, 1995
(unaudited)
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Investment income: $1,098,314
Expenses:
Advisory fee $91,774
Adminstrative personnel and services fees 15,177
Distribution fee-Class A Shares 10,821
Distribution and shareholder services fees-Class B Shares 128,376
Custodian fee 24,669
Registration and filing fees 18,689
Transfer agent fee 17,518
Reports and notices to shareholders 8,644
Professional fees 6,678
Insurance 1,785
Trustees' fees and expenses 177
Miscellaneous 3,760
---------------------
328,068
Less: Fee waivers and expense reimbursements (88,566)
---------------------
Total expenses 239,502
------------
Net investment income 858,812
------------
Net realized and unrealized gain on investments:
Net realized gain on investments 290,057
Net change in unrealized depreciation of investments 2,614,793
------------
Net gain on investments 2,904,850
------------
Net increase in net assets resulting from operations $3,763,662
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Statement of Changes in Net Assets
Six Months Year
Ended Ended
June 30, 1995 December 31,
(unaudited) 1994
------------------ -----------------
Increase (decrease) in net assets:
Operations:
Net investment income $858,812 $1,647,375
Net realized gain (loss) on investments 290,057 (2,059,403)
Net change in unrealized depreciation of investments 2,614,793 (3,012,525)
------------------ -------------
Net increase (decrease) in net assets resulting from operations 3,763,662 (3,424,553)
------------------- -------------
Distributions to shareholders from net investment
income:
Class A Shares (231,881) (478,019)
Class B Shares (557,999) (1,098,233)
Class Y Shares (68,932) (71,123)
-------------------- ------------
Total distributions to shareholders (858,812) (1,647,375)
-------------------- ------------
Fund share transactions:
Proceeds from shares sold 3,591,985 25,409,953
Proceeds from reinvestment of dividends 403,832 836,762
Payment for shares redeemed (3,948,232) (12,458,987)
------------------- -------------
Net increase from Fund share transactions 47,585 13,787,728
-------------------- ------------
Net increase in net assets 2,952,435 8,715,800
Net assets:
Beginning of period 35,209,282 26,493,482
-------------------- ------------
End of period $38,161,717 $35,209,282
==================== =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Financial Highlights
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares Class B Shares Class Y Shares
-----------------------------------------------------------------------------------------------------
Six Months Year July 6, Six Months Year July 2, Six Months February 28,
Ended Ended through Ended Ended through Ended through
June 30, December 31, December 31, June 30, December 31, December 31, June 30, December 31,
Per Share Data 1995 1994 1993* 1995 1994 1993* 1995 1994*
(unaudited) (unaudited) (unaudited)
------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period..................... $8.92 $10.34 $10.00 $8.92 $10.34 $10.00 $8.92 $9.99
Income (loss) from
investment operations:.....
Net investment income....... 0.25 0.49 0.22 0.21 0.43 0.20 0.26 0.42
Net realized and unrealized
gain(loss) on investments. 0.75 (1.42) 0.34 0.75 (1.42) 0.34 0.75 (1.07)
Total from investment
operations ........ 1.00 (0.93) 0.56 0.96 (0.99) 0.54 1.01 (0.65)
Less distributions to
shareholders from net
investment income........ (0.25) (0.49) (0.22) (0.21) (0.43) (0.20) (0.26) (0.42)
Total distributions..... (0.25) (0.49) (0.22) (0.21) (0.43) (0.20) (0.26) (0.42)
Net asset value, end of period $9.67 $8.92 $10.34 $9.67 $8.92 $10.34 $9.67 $8.92
Total Return+ 11.2% (9.1)% 5.6% 10.8% (9.7)% 5.4% 11.4% (6.5)%
Ratios &
Supplemental Data
Net assets, end of period
(000's omitted)............ $8,493 $8,689 $8,110 $26,425 $24,756 $18,383 $3,244 $1,764
Ratios to average net assets:
Expenses (a)............... 0.80%++ 0.64% 0.25%++ 1.55%++ 1.22% 0.75%++ 0.56%++ 0.39%++
Net investment income (a)... 5.36%++ 5.19% 4.92%++ 4.35%++ 4.61% 4.46%++ 5.78%++ 5.54%++
Portfolio turnover rate 56% 72% 3% 56% 72% 3% 56% 72%
+ Total return is calculated on net asset value
per share for the period indicated and is not
annualized. Initial
sales charges or contingent deferred sales
charges are not reflected.
++ Annualized
(a) Net of expense waivers and reimbursements. If
the Fund had borne all expenses that were
assumed or waived by
by the investment adviser, the annualized
ratios of expenses and net investment income to
average net assets would
have been the following:
Class A Shares Class B Shares Class Y Shares
----------------------------------------------------------------------------------------------------------
Six months Year July 6, Six months Year July 2, Six months February 28,
Ended Ended through Ended Ended through Ended through
June 30, 1995 December 31, December 31, June 30, 1995 December 31, December 31, June 30,1995 December 31,
(unaudited) 1994 1993 (unaudited) 1994 1993 (unaudited) 1994
-----------------------------------------------------------------------------------------------------------
Expenses.............. 1.28% 1.40% 1.83% 2.03% 1.98% 2.33% 1.04% 1.15%
Net investment income 4.88% 4.43% 3.34% 3.87% 3.85% 2.88% 5.30% 4.78%
</TABLE>
First Union Florida Municipal Bond Portfolio
Notes to Financial Statements
Six Months Ended June 30, 1995
(unaudited)
Note 1 - Organization
Evergreen Investment Trust (formerly First Union Funds) (the "Trust") is a
Massachusetts business trust registered under the Investment Company Act of
1940, as amended (the "Act"), as an open-end management company. At June 30,
1995, the Trust consisted of seventeen funds. The financial statements
included herein are only those of the First Union Florida Municipal Bond
Portfolio referred to as the "Fund" (see Note 7).
Note 2 - Significant Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.These policies are in
conformity with generally accepted accounting principles.
Security Valuations - Municipal bonds are valued at the bid price by an
independent pricing service taking into consideration yield, liquidity, risk,
credit quality, coupon, maturity, type of issue and any other factors or
market data it deems relevant in determining valuations for normal
institutional size trading units of debt securities. The independent pricing
service does not rely exclusively on quoted prices. Short term securities
purchased with remaining maturities of sixty days or less are stated at
amortized cost which approximates market value.
Security Transactions - Security transactions are accounted for on the date
purchased or sold. Net realized gains or losses are determined on the
identified cost basis.
Investment Income and Expenses - Interest income and expenses are accrued
daily. Premiums and discounts paid on securities are amortized into income
as required by the Internal Revenue Code, as amended, (the "Code").
Repurchase Agreements - Securities pledged as collateral for repurchase
agreements are held by the Federal Reserve Bank and are designated as being
held on the Fund's behalf by its custodian under a book-entry system. The Fund
monitors the adequacy of the collateral on a daily basis, and can require the
seller to provide additional collateral in the event the market value of the
securities pledged falls below the carrying value of the repurchase agreement,
including accrued interest. The Fund will only enter into repurchase
agreements with banks and other financial institutions which are deemed by
the Fund's investment adviser to be creditworthy pursuant to guidelines
established by the Trustees.
Dividends to Shareholders - Dividends from net investment income for the Fund
is declared daily and paid monthly. Dividends from net realized capital gains
on investments, if any, will be distributed at least annually. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. To the extent these differences are permanent in nature, such
amounts are reclassified within the capital accounts.
Income Taxes - It is the Fund's policy to meet the requirements of the Code
applicable to regulated investment companies and to distribute substantially
all of its taxable and tax-exempt net income to its shareholders. Accordingly,
no provisions for federal income or excise taxes are necessary. To the extent
that realized capital gains can be offset by capital loss carryforwards, it is
at December 31, 1994 (the Fund's most recent fiscal year end), the Fund had a
capital loss carryforward of $2,067,085. Pursuant to the Code, this capital
loss carryforward will expire in the years 2001 ($7,682) and 2002 ($2,059,403).
When Issued and Delayed Delivery Transactions - The Fund records when-issued
or delayed delivery transactions on the trade date and maintain security
positions such that sufficient liquid assets will be available to make payment
<PAGE>
Note 2 (continued) - for the securities purchased. Securities purchased on
a when-issued or delayed delivery basis are marked to market daily and begin
earning interest on the settlement date.
Deferred Expenses - The costs incurred by the Fund with respect to registration
of its shares in its first fiscal year, excluding the initial expense of
registering the shares, have been deferred and are being amortized using the
straight-line method not to exceed a period of five years from the Fund's
commencement.
Note 3 - Investment Advisory Agreement and Other Transactions with Affiliates
Investment Advisory Agreement -First Union National Bank of North Carolina
(the "Adviser") is entitled to a fee of .50 of 1% of the Fund's average daily
net assets pursuant to an investment advisory contract. The Adviser voluntarily
waived $88,566 of its advisory fee for the six month period ended June 30, 1995.
The Adviser can modify or terminate this voluntary waiver at any time.
Administrative Agreement - Federated Investor Services ("FAS") provided the
Fund with certain administrative personnel and services including certain
clerical and recordkeeping services for the six-month period ended June 30,
1995 (see Note 7). In addition, certain of the Trust's officers and Trustees
were officers or directors of FAS. FAS' fee was based on the level of average
net assets of the Trust for the period, subject to a minimum fee.
Plan of Distribution and Shareholder Servicing - The Trust has adopted a
Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the
terms of the Plan, the Trust compensated Federated Securities Corp. ("FSC"),
the principal distributor,from the net assets of the all of the funds in the
Trust to finance activities intended to result in the sale of Class A and Class
B shares (see Note 7). The Plan provides that the Fund may incur distribution
expenses up to .75 of 1% of the average daily net assets of the Class A and
Class B shares, annually, to finance such activities. For the six-month period
ended June 30, 1995, FSC limited its fees on Class A shares to .25 of 1% of
Class A shares average daily net assets.
Under the terms of a Shareholder Services Agreement with First Union Brokerage
Services ("FUBS"), the Fund will pay FUBS up to .25 of 1% of average daily net
assets of the Class B shares for the period. This fee is designed to obtain
certain services for shareholders and to maintain the shareholder accounts.
Transfer and Dividend Disbursement Agent - Federated Services Company ("FServ")
served as Transfer and dividend disbursing agent for the Trust for the
six-month period ended June 30, 1995 (see Note 7). FServ's fee was based on
the size, type and number of accounts and transactions made by shareholders.
Organizational Expenses - Organizational expenses were borne initially by FAS.
The Fund has agreed to reimburse FAS for the organizational expenses during
the five-year period following the dates the Funds commenced operations.
Pursuant to these arrangements, for the six months ended June 30, 1995,
the Fund has paid and have a remaining liability as follows:
Commencement Organizational Organizational
of Expenses Expenses
Operations Paid Remaining
6/14/93 1,886 $28,526
As a result of the change in the administration agreement (see Note 7),
the Adviser purchased the remaining unreimbursed initial organizational
expenses from FAS. No change will be made to the payment schedule as a result
of this transaction.
<PAGE>
Note 4 - Investment Transactions
The cost of purchases and proceeds from sales of investments, excluding
short-term securities, for the six months ended June 30,1995 were as follows:
Purchases Sales
$19,584,437 $21,626,446
On June 30, 1995, the composition of unrealized appreciation and depreciation
of investment securities based on the aggregate cost of investments for federal
tax purposes was as follows:
Appreciation Depreciation Net
$568,697 ($599,721) ($31,024)
Note 5 - Shares of Beneficial Interest
There is an unlimited number of no par value shares of beneficial interest
authorized for the Fund. The shares are divided into three classes which are
designated Class A, Class B, and Class Y shares. Class A shares are offered
with a front-end sales charge of 4.75%. Class B shares are offered with a
contingent deferred sales charge payable when shares are redeemed which would
decline from 5% to zero over a seven-year period (after which it is expected
that they will convert to Class A shares). Class Y shares are sold without a
sales charge and are available only to investment advisory clients of the
Adviser and its affiliates, certain institutional investors and Class Y
shareholders of record of certain other funds managed by the Adviser and its
affiliates as of December 30, 1994. All classes have identical voting,
dividend, liquidation and other rights, except that certain classes bear
different distribution expenses (see Note 3) and have exclusive voting rights
with respect to their distribution plan.
<PAGE>
Note 5 (continued) - Transactions in shares of beneficial interest were
as follows:
Six Months Ended Year Ended
June 30, 1995 December 31, 1994*
Class A Shares Dollars Shares Dollars
Shares sold 50,116 $485,015 769,573 $7,389,725
Shares issued on reinvestment
of dividends 11,565 110,794 26,991 251,755
Shares redeemed (157,575) (1,501,796) (606,508) (5,616,311)
Net increase (decrease) (95,894) (905,987) 190,056 2,025,169
Class B
Shares sold 177,301 1,706,830 1,596,854 15,356,189
Shares issued on reinvestment
of dividends 29,558 283,242 62,035 576,605
Shares redeemed (250,346) (2,362,131) (661,049) (6,032,300)
Net increase (decrease) (43,487) (372,059) 997,840 9,900,494
Class Y
Shares sold 145,304 1,400,140 287,077 2,664,039
Shares issued on reinvestment
of dividends 1,017 9,796 930 8,402
Shares redeemed (8,738) (84,305) (90,201) (810,376)
Net increase 137,583 1,325,631 197,806 1,862,065
Total net increase (decrease)
resulting from Fund share
transactions (1,798) $47,585 1,385,702 $13,787,728
* For Class Y shares, the Fund share transaction activity is for the period
February 28, 1994 (commencement of class operations)through December 31, 1994.
Note 6 - Concentration of Credit Risk
Since the Fund invests a substantial portion of its assets in issuers located
in a single state, it will be more susceptible to factors adversely affecting
issuers of that state than would be a comparable general tax-exempt mutual fund.
Certain debt obligations held in the Fund's portfolio may be entitled to the
benefit of standby letters of credit or other guarantees of banks or other
financial institutions.
Note 7 - Subsequent Events
Effective July 1, 1995, the Fund acquired substantially all of the net assets
of ABT Florida Tax-Free Fund by a non-taxable exchange of 13,697,276 shares of
ABT Florida Tax-Free Fund for 15,518,259 shares of the Fund. The net assets of
the ABT Florida Tax-Free Fund acquired included unrealized appreciation of
$8,245,724. The aggregate net assets of the Fund immediately after the
combination were $207,558,917.
Effective July 7, 1995, Evergreen Asset Management Corp. and Boston Data
Financial Services became the Administrator and transfer agent respectively.
Evergreen Funds Distributor, Inc., a wholly owned subsidiary of Furman Selz,
Inc., became the Funds' distributor and sub-administrator. In addition,
effective July 7,1995, the Fund changed its name to Evergreen Florida Municipal
Bond Fund.
