<PAGE> 1
[NATIONS FUNDS LOGO]
Money
Market
Funds
Annual Report For The
Year Ended March 31, 1998
[PICTURE OF TREE]
Investments For A Lifetime(SM)
Nations
Tax Exempt Fund
Nations
Treasury Fund
Nations
Government
Money Market Fund
Nations
Prime Fund
<PAGE> 2
[BACKGROUND DEPICTING BASKETS]
This Report is submitted for
the general information of
shareholders of Nations Funds.
This material must be preceded or
accompanied by a current Nations
Funds prospectus.
Nations Funds Distributor:
Stephens Inc. Stephens Inc., which
is not affiliated with NationsBank,
N.A., is not a bank, and securities
offered by it are not guaranteed by
any bank or insured by the FDIC.
Stephens Inc., member NYSE, SIPC.
Nations Funds Investment Adviser:
NationsBanc Advisors, Inc.
Nations Funds Investment Sub-
Advisers: TradeStreet Investment
Associates, Inc., Gartmore Global
Partners, Boatmen's Capital
Management, Inc. and Marsico
Capital Management, LLC.
- -----------------
[DOWNWARD ARROW]
NOT FDIC-
INSURED
- -----------------
May Lose Value
- -----------------
No Bank Guarantee
- -----------------
<PAGE> 3
Presidents'
Message
Dear Shareholder:
The past 12 months have been very rewarding for many
investors. Even with domestic markets feeling the
effects of the Asian financial crisis, the Standard &
Poor's 500 Composite Stock Price Index (S&P 500
Index) -- a widely known indicator of stock market
activity -- returned 47.98%.*
Even though the markets have experienced recent
success, the prudent investor realizes these conditions
cannot continue indefinitely. While the markets have
continued to perform well during the first three months
of 1998, we encourage you to consider:
-- BUILDING A DIVERSIFIED PORTFOLIO. A portfolio
comprised of different types of
investments -- stocks, bonds, money market
instruments -- has the potential to serve you best
in volatile markets.
-- CHOOSING AN INVESTMENT STRATEGY THAT COMPLEMENTS
YOUR LIFESTYLE AND FINANCIAL OBJECTIVES, and
maintaining that strategy as you pursue your
investment goals.
-- INVESTING FOR THE LONG TERM. If you can afford to
invest throughout inevitable market fluctuations,
you should benefit since historically, market prices
have generally gone up over the long term. This is
often a better strategy than attempting to "time"
the market.
-- INVESTING ON A REGULAR BASIS. This technique, known
as dollar-cost averaging, may enable you to buy more
shares when prices are lower and fewer when prices
are higher. Systematic investing generally provides
an easy, disciplined way to increase your assets.
Such a strategy does not assure a profit and does
not protect against loss in declining markets. Since
this strategy involves continuous investment in
securities regardless of fluctuating price levels,
you should carefully consider your financial ability
to continue your purchases through periods of
declining price levels.
Following these guidelines may help you create an
investment portfolio with the potential to make the
most of current market conditions, as well as those to
come.
With Nations Funds as a component of that portfolio,
your investment is part of over $33 billion in assets
under management. We are very pleased with the overall
performance of the Funds over the past 12 months.
Please refer to the individual fund commentary for
performance results.
NEW OPPORTUNITIES FOR YOUR DIVERSIFIED PORTFOLIO
We have continued to expand the Nations Funds family of
funds, including the addition of two new growth funds
managed by Tom Marsico, one of
* The S&P 500 Index is an unmanaged index of 500 widely
held common stocks. It is unavailable for investment.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
<PAGE> 4
Presidents'
Message continued...
the most respected portfolio managers in the industry.
Mr. Marsico is widely known in the investment community
for having managed the Janus Twenty Fund and Janus
Growth and Income Fund; during his tenure of nearly 10
years at Janus, these Funds grew from $7 million in
assets to more than $7 billion.
In addition, we created Nations Annuity Trust, which
consists of eight investment portfolios that serve as
underlying investment vehicles for annuity products.
One of those products, Nations Variable Annuity issued
by Hartford Life Insurance Company, is now available
for your long-term tax-deferred investing needs.
RECOGNITION FOR SUPERIOR SHAREHOLDER SERVICES
The Nations Funds product line and its performance,
however, lacks importance if it isn't backed by
helpful, professional services to its shareholders.
That's why, among all the Funds' accomplishments this
year, we are particularly proud of the recognition the
industry bestowed on Nations Funds.
In its first year as a participant in the annual survey
conducted by DALBAR, Inc. -- an independent research
firm that measures customer service and establishes
benchmarks in the financial services industry --
Nations Funds was honored with the Key Honors Award for
superior customer service. This award "designates those
firms that demonstrate their commitment to the
shareholder by providing consistently solid service."
NATIONS FUNDS PROVIDES INVESTMENTS FOR A LIFETIME
We want to thank you for your confidence in Nations
Funds, and for making them part of your investment
strategy. As we strive to provide an ever-diverse range
of investment products, we recognize that the
strongest, most important asset is you, the
shareholder.
Sincerely,
<TABLE>
<S> <C>
/s/ A. Max Walker /s/ Robert H. Gordon
A. Max Walker Robert H. Gordon
President and Chairman President
of the Board NationsBanc Advisors, Inc.
</TABLE>
March 31, 1998
P.S.: If you have any questions or comments on your
annual report or the information in it, please contact
us at 1-800-321-7854 or send us a message from the
Nations Funds Web Site at
WWW.NATIONSBANK.COM/NATIONSFUNDS.
<PAGE> 5
Table
Of
Contents
<TABLE>
<S> <C>
NATIONS FUNDS SPECTRUM 2
ECONOMIC OVERVIEW 4
FINANCIAL STATEMENTS
Schedules of Investments 6
Statements of Assets and Liabilities 28
Statements of Operations 30
Statements of Changes in Net Assets 31
Statement of Cash Flows 33
Schedules of Capital Stock Activity 34
Financial Highlights 36
Notes to Financial Statements 44
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Nations Funds LOGO
Recognized For DALBAR, Inc., is a well-respected research firm
Outstanding that measures customer service levels and
Customer Service establishes benchmarks in the financial services
industry.
In recognition of our
commitment to retail
shareholders through
consistently providing
superior customer service,
Nations Funds was awarded
DALBAR Key Honors in 1997.
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</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
The
Nations Funds
Family At A Glance
STABILITY
- ---------------- CURRENT INCOME
- ----------------------------------------------------------------------------------
GROWTH & INCOME
-----------------------
MONEY SHORTER INTERMEDIATE LONGER TERM LARGE CAPITALIZATION
MARKET MATURITY MATURITY DOMESTIC VALUE FUNDS
FUNDS BOND FUNDS BOND FUNDS AND GLOBAL
BOND FUNDS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - Nations - Nations Short- - Nations - Nations Global - Nations
Prime Fund Intermediate Strategic Fixed Government Value Fund
Government Income Fund Income Fund
- - Nations Government Fund - Nations
Money Market - Nations - Nations Managed
Fund - Nations Government Diversified Value Index
Short-Term Securities Fund Income Fund Fund
- - Nations Income Fund
Treasury Fund - Nations - Nations - Nations
- - Nations Tax - Nations Short- Intermediate U.S. Government Equity Income
Exempt Fund Term Municipal Municipal Bond Fund Fund
Income Fund Bond Fund
- Nations - Nations
- Nations Municipal Balanced Assets
State-Specific Income Fund Fund
Intermediate
Municipal Bond - Nations
Funds State-Specific
Long-Term
Municipal Bond
Funds
</TABLE>
POTENTIAL RETURN
RISK (VARIABILITY)
2
<PAGE> 7
[NATIONS FUNDS LOGO]
Investments For A Lifetime(SM)
<TABLE>
<CAPTION>
GROWTH & INCOME
- -------------------------
GROWTH
- ----------------------------------------------------------
AGGRESSIVE GROWTH
-------------------------------------------------------------------------------
LARGE LARGE MID SMALL
CAPITALIZATION CAPITALIZATION INTERNATIONAL CAPITALIZATION CAPITALIZATION REGION-SPECIFIC
FUNDS GROWTH FUNDS EQUITY FUNDS FUNDS FUNDS INTERNATIONAL FUNDS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- - Nations - Nations - Nations - Nations - Nations - Nations
Marsico Marsico Focused International Emerging Small Company Emerging
Growth Equities Fund Growth Fund Growth Fund Growth Fund Markets Fund
& Income
Fund - Nations - Nations - Nations - Nations
Disciplined International Managed Pacific Growth
- - Nations Equity Fund Equity Fund SmallCap Fund
Managed Index Fund
Index Fund - Nations
Capital Growth - Nations
Fund Managed
SmallCap
Value Index
Fund
</TABLE>
The Nations Funds family also includes Nations Equity Index Fund, which seeks
investment results that correspond, before fees and expenses, to the total
return of the Standard and Poor's 500 Composite Stock Price Index.
LIFEGOAL PORTFOLIOS
- - LifeGoal Income and Growth Portfolio
- - LifeGoal Balanced Growth Portfolio
- - LifeGoal Growth Portfolio
3
<PAGE> 8
Economic
Overview
For the 12-month period ended March 31, 1998, economic
conditions in the United States were stellar, fueling a
steady rise in the financial markets and giving
investors plenty to cheer about.
Economic activity was robust, and the pace of growth
for the year was the fastest of the current expansion,
which is now entering its eighth year. With business
booming, corporate profits rose by more than 10%.
Nearly three million new jobs were created, sending the
national unemployment rate down to a 30-year low of
4.6%. What's more, in this high employment environment,
U.S. workers have enjoyed rising wages.
Fortunately, the inflationary impact of rising labor
costs has been more than offset by other strong forces.
In fact, overall inflation was almost nonexistent for
the reporting period, with the Consumer Price Index,
the most commonly used measure of inflation at the
retail level, up less than 2%. Meanwhile, wholesale
inflation actually dropped over the past 12 months.
What explains the economic balancing act that allows
for continual growth without the threat of inflation?
The answer is that the United States is benefiting from
a moderate economic expansion, driven by capital
spending that is expanding capacity rather than
pressuring it. Productivity gains have been impressive,
and inflation is being subdued by increasingly global
markets for labor and products, along with a freer
world trade environment. As long as these trends remain
in place, our economy should continue to grow while
experiencing stable prices for goods and services. We
remain bullish about long-term economic prospects in
the United States.
These ideal economic conditions have helped propel the
financial markets to new significant highs. During the
past 12 months, the Dow Jones Industrial Average* broke
through the 7,000 and 8,000 barriers, closing the
period at 8,799.81 -- up over 35%. Even more amazing is
that the Dow soared by over 20% for the third year in a
row, an unprecedented feat for the blue-chip average.
All other domestic stock indexes rose as well, some
higher than others. By all measures, the past year was
a rewarding one for stock investors.
* The Dow Jones Industrial Average is a price-weighted
index of 30 of the largest, most widely held stocks
traded on the New York Stock Exchange. It is unmanaged
and unavailable for investment.
Source for all statistical data -- TradeStreet
Investment Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
4
<PAGE> 9
Economic
Overview continued...
With news on the inflation front remaining positive,
the bond market also performed well during the period.
Interest rates drifted to lower levels and bond values
rose accordingly. This translated into attractive
results for bond funds, with total returns generally
ranging from 9% to 12% for the period.
Looking ahead, the next several months will likely be
dominated by news about the financial crisis in Asia
and its impact on U.S. companies. However, we do not
expect the so-called "Asian contagion" to cause U.S.
economic conditions to deteriorate. We believe the
positive cyclical themes of 1997 -- moderate growth,
low inflation and continued profit growth -- will
remain intact in the year ahead, and we remain
optimistic that the expansion will continue
uninterrupted.
The U.S. economy has climbed to a level envied by most
other countries in the world. For stock investors in
particular, the view from this lofty perch is
spectacular. Could our markets soar to even higher
levels? Yes, as long as favorable conditions remain in
place.
But investors must remember that stock markets do not
go up indefinitely. Today, our challenge is to fight
off the euphoria that can often accompany a bull market
and remind ourselves that investing is a long-term
endeavor. Historically, stocks have risen over time,
but there have been plenty of ups and downs along the
way. The next stock market correction may be out there,
even if we can't see any dark clouds yet.
On behalf of Nations Funds shareholders, we will keep
our eye on the horizon.
E. Keith Wirtz, CFA
Chief Investment Officer
TradeStreet Investment Associates, Inc.
March 31, 1998
5
<PAGE> 10
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- 99.8%
ALABAMA -- 2.1%
$ 6,000,000 Alabama (State of), Housing
Finance Authority, Multi-family
Housing, AmSouth Bank N.A.,
Birmingham LOC,
(Turtle Lake Project), Series F,
3.750% 09/01/23+................. $ 6,000,000
9,890,000 ASMS Public Education Building
Authority of Mobile, Alabama,
AmSouth Bank N.A., Birmingham
LOC,
(Alabama High School Math &
Science),
3.750% 07/01/22+................. 9,890,000
1,565,000 Birmingham, Alabama, Industrial
Development Board,
(Avondale -- Phase III), AmSouth
Bank N.A., Birmingham LOC,
4.000% 06/01/00+................. 1,565,000
3,300,000 Gadsden, Alabama, Industrial
Development Board, Industrial
Development Revenue, (Keystone
Foods Corporation Project), AMT,
Bank of Scotland LOC,
3.950% 05/01/04+(a).............. 3,300,000
10,000,000 McIntosh, Alabama, Industrial
Development Board, Solid Waste
Disposal Revenue, (Ciba-Geigy
Corporation Project), AMT, Union
Bank of Switzerland LOC,
3.650% 07/01/04+................. 10,000,000
2,000,000 Opelika, Alabama, Industrial
Development Board, (Flowers
Baking Company Project), SunTrust
Bank LOC,
3.700% 12/01/99+(a).............. 2,000,000
5,850,000 Phenix (County of), Alabama,
Industrial Development Board,
Environmental Improvement
Revenue, (Georgia Kraft Company
Project), Series A, AMT, Deutsche
Bank AG LOC,
3.750% 12/01/15++................ 5,850,000
14,000,000 Phenix (County of), Alabama,
Industrial Development Board,
Environmental Improvement
Revenue, (Mead Coated Board
Project), Series A, AMT, Toronto
Dominion Bank LOC,
3.800% 06/01/28++................ 14,000,000
--------------
52,605,000
--------------
ALASKA -- 1.5%
16,600,000 Alaska, (State of) Industrial
Development and Export Authority
Exempt Facilities Revenue,
(Fairbanks Gold Mining, Inc.),
AMT, Union Bank of Switzerland
LOC,
3.750% 05/01/09+................. 16,600,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
ALASKA -- (CONTINUED)
$21,750,000 Valdez, Alaska, Marine Term
Revenue, (Arco Transportation
Project), Series B, Atlantic
Richfield Guaranteed,
3.700% 05/01/31+................. $ 21,750,000
--------------
38,350,000
--------------
ARIZONA -- 3.4%
Apache (County of), Arizona,
Industrial Development Authority,
PCR, (Tuscon Electric Power):
13,700,000 Series 83A, Barclays Bank Plc; and
Toronto Dominion LOC,
3.750% 12/15/18+................. 13,700,000
12,900,000 Series 83B, Bank of New York LOC,
3.850% 12/15/18+................. 12,900,000
29,300,000 Series A, Chase Bank; and Toronto
Dominion LOC,
3.750% 06/15/20+................. 29,300,000
5,100,000 Casa Grande, Arizona, Industrial
Development Authority Revenue,
(Mayville Metal), Toronto
Dominion LOC,
3.450% 07/01/15+(a).............. 5,100,000
4,800,000 Goodyear, Arizona, Industrial
Development Authority, (Walle
Corporation Project), AMT, PNC
Bank LOC,
3.950% 05/01/15+(a).............. 4,800,000
3,980,000 Maricopa (County of), Arizona,
PCR, (Arizona Public Service
Company), Series F, Bank of
America LOC,
3.800% 05/01/29++................ 3,980,000
Maricopa (County of), Arizona,
Unified School District:
6,000,000 No. 69 Paradise Valley, Tax
Anticipation Notes, Series A,
4.400% 06/30/98.................. 6,007,513
5,000,000 No. 80 Chandler, Tax Anticipation
Notes, Series A,
4.400% 06/30/98.................. 5,006,262
4,000,000 No. 83 Cartwright Elementry, Tax
Anticipation Notes, Series A,
4.400% 06/30/98.................. 4,005,009
--------------
84,798,784
--------------
ARKANSAS -- 0.4%
6,300,000 Little Rock, Arkansas, Metrocentre
District Number 1, Improvement
Revenue, (Little Rock Newspapers
Inc. Project), Bank of New York
LOC,
3.800% 12/01/25++................ 6,300,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 11
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
ARKANSAS -- (CONTINUED)
$ 3,250,000 Lowell, Arkansas, Industrial
Development Revenue, (Little Rock
Newspapers Inc. Project), AMT,
Bank of New York LOC,
3.800% 06/01/31+(a).............. $ 3,250,000
--------------
9,550,000
--------------
CALIFORNIA -- 0.8%
10,850,000 California (State of), Higher
Education, Loan Authority Income,
Student Loan Revenue, Sr. Lien,
Series A1, Student Loan Marketing
Guarantee,
4.000% 07/01/98.................. 10,850,000
300,000 Regional Airports Improvement
Corporation, Los Angeles,
California, Terminal Facilities,
(Los Angeles International
Airport), Societe Generale LOC,
3.800% 12/01/25++................ 300,000
10,000,000 Student Education Loan Marketing
Corporation, California Student
Loan Revenue, Series A, Dresdner
Bank A.G. LOC,
3.850% 11/01/98 +................ 10,000,000
--------------
21,150,000
--------------
COLORADO -- 2.6%
13,000,000 Colorado (State of), Housing
Finance Authority, Multi-family
Housing Revenue, (Grants Plaza),
Series A, Bankers Trust Company
LOC,
3.775% 11/01/09+................. 13,000,000
1,900,000 Colorado (State of), Post
Secondary Educational Authority,
Economic Development Revenue,
(U.S. Swim Team Facilities), Bank
One LOC,
3.750% 06/01/11+(a).............. 1,900,000
Denver (City & County of)
Colorado, Airport Revenue, AMT:
3,500,000 Series F, Credit Local de France
LOC,
3.800% 11/15/25+................. 3,500,000
5,000,000 Series G, Credit Local de France
LOC,
3.800% 11/15/25+................. 5,000,000
2,205,000 El Paso (County of), Colorado,
Multi-family Housing Revenue,
(Briarglen Apartments Project),
General Electric Capital
Corporation,
3.700% 12/01/24+(a).............. 2,205,000
39,300,000 Moffat (County of), Colorado, PCR,
AMBAC Insured, Societe Generale
SBPA,
3.750% 07/01/20+................. 39,300,000
--------------
64,905,000
--------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
DELAWARE -- 2.4%
$25,200,000 Delaware (State of), Economic
Development Authority Revenue,
Hospital Billing, Series C, MBIA
Insured, Morgan Stanley Group,
Inc. SBPA,
3.700% 12/01/15+................. $ 25,200,000
Delaware (State of), Economic
Development Authority Revenue,
Industrial Development Revenue,
(Star Enterprise):
10,000,000 Series A, AMT, Canadian Imperial
Bank of Commerce LOC,
3.750% 08/01/29+................. 10,000,000
10,000,000 Series B, AMT, Canadian Imperial
Bank of Commerce LOC,
3.750% 08/01/29+................. 10,000,000
14,300,000 Series C, AMT, Canadian Imperial
Bank of Commerce LOC,
3.800% 08/01/29+................. 14,300,000
--------------
59,500,000
--------------
DISTRICT OF COLUMBIA -- 1.9%
District of Columbia, GO:
3,520,000 Series B, Recovery Notes, Society
Generale LOC,
3.850% 06/01/03++................ 3,520,000
9,500,000 Series C, Taxes & Revenue
Anticipation Notes, Union Bank of
Switzerland LOC,
5.000% 09/30/98.................. 9,552,681
7,300,000 Series D, (Georgetown University),
Bayerische Landesbank LOC,
3.700% 04/01/17+................. 7,300,000
8,900,000 Series E, (Georgetown University),
Bayerische Landesbank LOC,
3.700% 04/01/18+................. 8,900,000
District of Columbia, Revenue
Bonds, Georgetown University:
4,145,000 Series B, Bayerische Landesbank
LOC,
3.700% 04/01/04+................. 4,145,000
5,700,000 Series C, Bayerische Landesbank
LOC,
3.700% 04/01/12+................. 5,700,000
8,000,000 District of Columbia, Tax &
Revenue Anticipation Notes, GO,
Series B, Morgan Guaranty; and
Union Bank of Switzerland LOC,
4.500% 09/30/98.................. 8,024,160
--------------
47,141,841
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 12
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
FLORIDA -- 8.1%
$12,810,000 Broward (County of), Florida,
Housing Finance Authority,
Multi-family Housing Revenue,
(Fisherman's Project),
Continental Casualty Surety Bond,
3.500% 11/01/07+................. $ 12,810,000
12,617,000 Broward (County of), Florida,
Housing Finance Authority, PT-
1016, Merrill Lynch SBPA,
3.390% 12/01/29+(a).............. 12,617,000
54,494,000 Dade (County of), Florida, Housing
Finance Authority, Multi-Family
Housing Revenue, PT-1014, Merrill
Lynch SBPA,
3.390% 12/01/29+(a).............. 54,494,000
Dade (County of), Florida,
Industrial Development Authority:
(Dolphins Stadium Project),
Societe Generale LOC:
4,100,000 Series C,
3.700% 01/01/16+(a).............. 4,100,000
5,200,000 Series D,
3.700% 01/01/16+(a).............. 5,200,000
4,830,000 (Phase II Furniture Corporation
Project), AMT, SunTrust Bank LOC,
3.800% 11/01/14+(a).............. 4,830,000
14,998,500 Florida (State of), Board of
Education, Capital Outlay, BTP-
179, Bankers Trust Company SBPA,
3.000% 06/01/01+(a).............. 14,998,500
14,800,000 Florida (State of), Housing
Finance Agency, (Clear Lake
Project), Continental Casualty
Surety Bond,
3.500% 01/01/34+................. 14,800,000
24,225,000 Florida (State of), Housing
Finance Agency, Homeowner
Mortgage,
Series 4, AMT,
4.000% 07/01/30+................. 24,225,000
Florida (State of), Housing
Finance Agency, Multi-family
Housing Revenue:
7,000,000 (Woodlands Project), Northern
Trust LOC,
3.500% 12/01/07+................. 7,000,000
3,100,000 (Lake of North Dale Project),
Southtrust Bank LOC,
3.250% 06/01/07+................. 3,100,000
5,000,000 (Lakeside Project), Series B,
Bankers Trust Company LOC,
3.775% 08/01/06+(a).............. 5,000,000
4,700,000 Jacksonville, Florida, Parking
Systems Revenue, (University of
North Florida Foundation Inc.,
Project), First Union Bank LOC,
3.650% 05/01/22+................. 4,700,000
3,750,000 Manatee (County of), Florida,
Housing Finance Authority,
Multi-family Mortgage Revenue,
(Hampton Court Project), Series
A, First Union Bank LOC,
3.750% 06/01/07+(a).............. 3,750,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
FLORIDA -- (CONTINUED)
$11,340,000 Orange (County of) Florida, Health
Facilities Authority Revenue,
(SHCC Services Inc. Project),
SunTrust Bank LOC,
3.700% 12/01/23+(a).............. $ 11,340,000
7,000,000 Palm Beach (County of), Florida,
(Norton Gallery Inc. Project),
Northern Trust LOC,
3.650% 05/01/25+................. 7,000,000
3,100,000 St. Lucie (County of), Florida,
Industrial Development Authority,
(Florida Convalescent Centers
Project), Series A, Toronto
Dominion Bank LOC,
3.750% 01/01/11+++............... 3,100,000
9,500,000 University of Northern Florida,
Capital Improvement Revenue,
First Union National Bank of
North Carolina LOC,
3.700% 11/01/27+................. 9,500,000
--------------
202,564,500
--------------
GEORGIA -- 8.6%
10,000,000 Albany-Dougherty, Georgia, Payroll
Development Authority, PCR,
(Philip Morris Companies Inc.
Project),
3.800% 10/01/05+(a).............. 10,000,000
Burke County, Georgia, Development
Authority, PCR, (Georgia Power
Company Plant):
860,000 3.750% 07/01/24++................. 860,000
1,500,000 3.850% 09/01/34++................. 1,500,000
18,025,000 (Oglethorpe Power Corp.),
3.800% 5/28/98................... 18,025,000
6,385,000 Clayton (County of), Georgia,
Housing Authority, Multi-family
Housing Revenue, (Chateau Forest
Apartments), Series E, Barclays
Bank Plc SBPA, FSA Guarantee,
3.700% 01/01/21+................. 6,385,000
2,680,000 (Village Rouge Project),
3.700% 01/01/21+................. 2,680,000
2,445,000 Cobb (County of), Georgia,
Industrial Development Authority
Revenue, (Datagraphic Inc.
Project), AMT, Southtrust Bank
LOC,
3.700% 05/01/05+................. 2,445,000
3,700,000 Cobb (County of), Georgia,
Residential Care Facilities for
the Elderly Authority, (North
Georgia Presbyterian Homes, Inc.
Project), SunTrust Bank LOC,
3.700% 08/01/18+(a).............. 3,700,000
12,930,000 Cobb-Marietta, Georgia, Coliseum &
Exhibit Hall Authority Revenue,
Jr. Lien, Series A, MBIA
Guarantee, Canadian Imperial Bank
of Commerce SBPA,
3.700% 10/01/26+(a).............. 12,930,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 13
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
GEORGIA -- (CONTINUED)
$ 3,420,000 College Park, Georgia, Business &
Industrial Development Authority
Revenue, (College Park
Association Project), Bank of New
York LOC,
3.700% 06/01/14+(a).............. $ 3,420,000
2,250,000 Columbus, Georgia, Housing
Authority, Multi-family Housing
Revenue, (Quail Ridge Project),
Columbus Bank & Trust Company
LOC,
4.000% 02/01/05+................. 2,250,000
3,555,000 Columbus, Georgia, Industrial
Development Revenue, (Parisian
Inc. Project), Columbus Bank &
Trust Company LOC,
3.450% 04/01/07+(a).............. 3,555,000
13,800,000 Columbia County, Georgia, Elderly
Authority Residential Care
Facilities Revenue, (Augusta
Resource Center on Aging),
SunTrust Bank LOC,
3.700% 01/01/21+(a).............. 13,800,000
1,200,000 Coweta (County of), Georgia,
Development Authority, Industrial
Revenue, (Jack Eckerd Corporation
Project), UBS LOC,
3.800% 03/01/09++(a)............. 1,200,000
5,250,000 Dekalb (County of), Georgia,
Development Authority, Industrial
Development Revenue, (Radiation
Steralizers), Comerica LOC,
3.600% 03/01/05+++(a)............ 5,250,000
Dekalb (County of), Georgia,
Housing Authority, Multi-family
Housing Revenue:
2,800,000 (Camden Brook Project), FNMA
Collateral Agreement,
3.700% 06/15/25+................. 2,800,000
5,430,000 (Haystack Apartment Projects),
AMT, General Electric Capital
Corporation Guarantee,
3.900% 12/01/20+(a).............. 5,430,000
6,875,000 (Stone Mill Run Apartments
Project), Series A, AMT, First
Tennessee Bank LOC,
3.200% 08/01/27+................. 6,875,000
5,000,000 (Terrace Club Project), Series B,
Southtrust Bank LOC,
3.750% 11/01/15+................. 5,000,000
14,935,000 (Wood Terrace Apartments Project),
FNMA Collateral Project,
4.050% 12/15/15+................. 14,935,000
3,660,000 Dekalb (County of), Georgia,
Housing Authority, Revenue
Anticipation Certificates,
(Dekalb Medical Center Project),
SunTrust Company Bank LOC,
3.700% 09/01/09+(a).............. 3,660,000
600,000 Floyd (County of), Georgia,
Development Authority
Environmental Improvement
Revenue, (Georgia Kraft Company
Project), Banque Nationale de
Paris LOC,
3.900% 12/01/15++................ 600,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
GEORGIA -- (CONTINUED)
$ 5,800,000 Fulco (County of), Georgia,
Hospital Authority, (Piedmont
Hospital Project), SunTrust
Company Bank LOC,
3.700% 02/01/07+(a).............. $ 5,800,000
3,000,000 Fulton (County of), Georgia,
Development Authority Revenue,
(Spelman College Project),
SunTrust Bank LOC,
3.700% 06/01/16+................. 3,000,000
2,400,000 Greene (County of), Georgia,
Industrial Development Authority
Revenue, (Chipman-Union Inc.
Project), Series A, AMT, SunTrust
Bank LOC,
3.800% 03/01/05+(a).............. 2,400,000
7,500,000 Gwinnett (County of), Georgia,
Industrial Development Revenue,
(United Stationers Company
Project), PNC Bank LOC,
3.800% 12/31/02+(a).............. 7,500,000
2,000,000 (Volvo Project), AMT, Union Bank
of Switzerland LOC,
3.900% 08/01/06++(a)............. 2,000,000
3,000,000 Henry (County of), Georgia,
Development Authority Revenue,
(Georgia-Pacific Corporation
Project), SunTrust Bank LOC,
3.700% 05/01/04+(a).............. 3,000,000
Municipal Electric Authority,
Georgia, (Project One),
Subordinated Bonds:
35,000,000 Series E, ABN-AMRO LOC,
3.700% 01/01/26+................. 35,000,000
18,450,000 Series D,
3.650% 01/01/22+................. 18,450,000
5,000,000 Smyrna, Georgia, Multi-family
Housing Authority Revenue, (Post
Valley Project), FNMA
Collateralized,
3.700% 06/01/25+................. 5,000,000
4,000,000 Tallapoosa, Georgia, Development
Authority Revenue, (U.S. Can
Company Project), Harris Trust &
Savings Bank LOC,
3.700% 02/01/15+(a).............. 4,000,000
5,000,000 Thomaston-Upson (County of),
Georgia, Industrial Development
Revenue, (Quad/Thomaston
Project), First Union National
Bank, Charlotte LOC,
3.700% 04/01/00+(a).............. 5,000,000
--------------
218,450,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 14
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
HAWAII -- 0.3%
$ 8,700,000 Hawaii (State of), Housing Finance
and Development Corporation,
Rental Housing System Revenue
Bonds, Series 89A, Banque
Nationale de Paris LOC,
3.700% 07/01/24+................. $ 8,700,000
--------------
IDAHO -- 0.1%
3,700,000 Power City, Idaho, PCR, (FMC Corp.
Project), Wachovia Bank LOC,
3.800% 12/01/10++................ 3,700,000
--------------
ILLINOIS -- 13.6%
6,075,000 Chicago, Illinois, Industrial
Development Revenue, (Eli's
Chicago's Finest Inc.), AMT, U.S.
Bank, N.A. LOC,
3.900% 11/01/26+(a).............. 6,075,000
Chicago, Illinois, Multi-Family
Housing (Waveland Association),
Swiss Bank LOC:
6,750,000 Project B,
3.300% 11/01/10+................. 6,750,000
12,600,000 Project F,
3.300% 11/01/10+................. 12,600,000
Chicago, Illinois, O'Hare
International Airport, (American
Airlines Inc.):
2,100,000 Series A, Credit Suisse LOC,
3.800% 12/01/17++................ 2,100,000
5,850,000 Series D, Royal Bank of Canada
LOC,
3.800% 12/01/17++................ 5,850,000
Chicago, Illinois, O'Hare
International Airport, Second
Lien, Societe Generale LOC:
13,800,000 Series A,
3.650% 01/01/15+................. 13,800,000
2,600,000 Series B,
3.650% 01/01/15+................. 2,600,000
7,400,000 Series C,
3.700% 01/01/18+................. 7,400,000
Illinois (State of), Development
Finance Authority:
3,820,000 (Chicago Academy of Sciences),
American National Bank & Trust
Company LOC,
3.400% 01/01/31+................. 3,820,000
26,100,000 (Chicago Symphony Orchestra),
Northern Trust Company LOC,
3.700% 12/01/28+................. 26,100,000
19,400,000 (Chicago Symphony Project), Bank
of America LOC,
3.700% 06/01/31+(a).............. 19,400,000
26,600,000 (Lyric Opera Chicago Project),
Northern Trust Company; NBD Bank
N.A.; Harris Trust & Savings
Bank; and Caisse National de
Credit Agricole LOC,
3.700% 12/01/28+................. 26,600,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
ILLINOIS -- (CONTINUED)
$ 5,000,000 (Presbyterian Home Lake), Series
A, ABN-AMRO Bank LOC,
3.700% 10/01/31+................. $ 5,000,000
9,000,000 (Roosevelt University Project),
American National Bank & Trust
Company LOC,
3.700% 04/01/25+................. 9,000,000
9,000,000 (YMCA of Metropolitan Chicago
Project), Series A, Harris Trust
& Savings Bank LOC,
3.700% 06/01/26+................. 9,000,000
Illinois (State of), Development
Finance Authority, Economic
Development Revenue:
1,900,000 (Addison 450 LP Project), AMT,
American National Bank & Trust
Company LOC,
3.800% 12/01/09+................. 1,900,000
9,100,000 (Edison Company Project), Series
C, ABN-AMRO Bank LOC,
3.700% 03/01/09+................. 9,100,000
3,000,000 (Randolph Pickle Corporation),
AMT, American National Bank &
Trust Company LOC,
3.900% 06/01/12+................. 3,000,000
2,415,000 (Xavier University), American
National Bank & Trust Company
LOC,
3.700% 10/01/12+................. 2,415,000
Illinois (State of), Educational
Facilities Revenue:
3,700,000 (Arts Clubs of Chicago), Northern
Trust Company LOC,
3.700% 01/01/26+................. 3,700,000
6,300,000 (Chicago Historical Society),
Northern Trust Company, LOC
3.700% 12/01/25+(a).............. 6,300,000
14,700,000 (Illinois Institute of
Technology), Series A, NBD Bank
N.A.; Northern Trust Company; and
Harris Trust and Savings Bank
LOC,
3.700% 09/01/25+................. 14,700,000
6,000,000 (Museum of Science & Industry),
First National Bank of Chicago
LOC,
3.700% 10/01/26+................. 6,000,000
11,385,000 (University Pooled Financing
Program), FGIC Insured, NBD Bank
N.A. SBPA,
3.700% 12/02/05+................. 11,385,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 15
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
ILLINOIS -- (CONTINUED)
Illinois (State of), Health
Facilities Authority Revenue
Bonds:
$ 5,500,000 (Childrens Memorial Hospital
Project), Series B, National Bank
of Detroit LOC,
3.700% 11/01/15+................. $ 5,500,000
(Evanston Hospital Corporation
Project):
5,000,000 3.950% 04/30/98................... 5,000,000
5,000,000 3.900% 07/31/98+++................ 5,000,000
7,000,000 3.600% 08/31/98+++................ 7,000,000
18,000,000 3.700% 03/01/99+++................ 18,000,000
4,000,000 (Gottlieb Health Resources Inc.
Project), Harris Trust and
Savings Bank LOC,
3.700% 11/15/24+................. 4,000,000
10,250,000 (Park Plaza Retirement Center
Project), ABN-AMRO Bank LOC,
3.700% 09/15/20+................. 10,250,000
6,700,000 (The Streeterville Corporation
Project), First National Bank of
Chicago LOC,
3.700% 08/15/24+................. 6,700,000
7,000,000 Jackson-Union (Counties of),
Illinois, Regional District, Port
Facilities Revenue,
(Environmental Transportation
Services), First Union National
Bank LOC,
3.700% 04/01/22+................. 7,000,000
15,000,000 Lisle, Illinois, Multi-Family
Housing Revenue, (Ashley of Lisle
Project), Lasalle National Bank
LOC,
3.750% 12/15/25+(a).............. 15,000,000
5,000,000 Lombard, Illinois, Multi-Family
Housing, Continental Casualty
Surety Bond, (Clover Creek
Apartment Project),
4.000% 12/15/98.................. 5,000,000
9,200,000 Orland Park, Illinois, Industrial
Development Revenue, (Panduit
Corporation Project), AMT,
Wachovia Bank, Georgia LOC,
3.800% 04/01/31+(a).............. 9,200,000
7,000,000 Quincy, Illinois, (Quincy
University), Allied Irish Bank
Plc. LOC,
3.750% 06/01/22+................. 7,000,000
7,195,000 Richton Park, Illinois, Industrial
Development Revenue, (Sinter
Metals Inc. Project), AMT, Mellon
Bank LOC,
3.850% 04/01/16+(a).............. 7,195,000
9,200,000 Sauget, Illinois, GO, Credit
Locale de France LOC,
3.700% 02/01/16+................. 9,200,000
1,600,000 Southwestern Illinois Development
Authority, Industrial Development
Revenue, (Robinson Steel Company
Inc. Project), AMT, American
National Bank & Trust Company
LOC,
3.800% 12/01/06+................. 1,600,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
ILLINOIS -- (CONTINUED)
$ 5,000,000 Woodford (County of), Illinois,
Industrial Development Authority
Revenue, (Parsons Company Inc.
Project), AMT, Bank One Illinois
N.A. LOC,
3.850% 03/01/13+(a).............. $ 5,000,000
--------------
342,240,000
--------------
INDIANA -- 2.9%
5,200,000 Fort Wayne, Indiana, Economic
Development Revenue, (Georgetown
Place Venture Project), Banc One
N.A. LOC,
3.800% 12/01/15+(a).............. 5,200,000
3,495,000 Hendricks (County of), Indiana,
Redevelopment Commission, Tax
Increment Revenue, (Heartland
Crossings Project), Series A,
Banc One N.A. LOC,
3.750% 01/01/22+(a).............. 3,495,000
Indiana (State of), Development
Finance Authority, Economic
Development Revenue:
14,900,000 Educational Facilities, (Indiana
Historical Society Project), NBD
Bank LOC,
3.700% 08/01/31+(a).............. 14,900,000
1,700,000 (Fischer Enterprises Ltd.
Project), PNC Bank LOC,
3.950% 11/01/01+(a).............. 1,700,000
2,200,000 (Walker-Williams Lumber Company,
Inc.), AMT, Columbus Bank & Trust
Company LOC,
4.050% 01/01/09+(a).............. 2,200,000
4,900,000 Indianapolis, Indiana, Economic
Development Revenue, (Edgcomb
Metals Company Project), Banque
Nationale de Paris LOC,
3.700% 12/01/08+................. 4,900,000
3,100,000 Indianapolis, Indiana,
Multi-family Housing Revenue,
(El Beulah Retirement Village),
National Bank of Detroit LOC,
3.550% 03/01/21+(a).............. 3,100,000
2,000,000 Princeton, Indiana, PCR, (PSI
Energy Income Project), Canadian
Imperial Bank LOC
3.800% 03/01/19++................ 2,000,000
Purdue University, Indiana,
University Revenue, Student Fee:
3,400,000 Series K,
3.600% 07/01/20++................ 3,400,000
3,300,000 Series L,
3.600% 07/01/20++................ 3,300,000
2,900,000 Rockport, Indiana, PCR, (Indiana
and Michigan Electric Company),
Series A, Swiss Bank LOC,
3.750% 08/01/14+(a).............. 2,900,000
12,500,000 South Bend, Indiana, Community
School Corporation, Tax
Anticipation Warrants,
4.250% 12/31/98(a)............... 12,531,586
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 16
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
INDIANA -- (CONTINUED)
$ 5,500,000 St. Joseph's (County of), Indiana,
Economic Development Revenue,
(Brothers of the Holy Cross
Project), Key Bank LOC,
4.010% 09/01/17+(a).............. $ 5,500,000
6,600,000 Terre Haute, Indiana, Economic
Development Revenue, (First
Financial Corporation Project),
First National Bank of Chicago
LOC,
3.700% 12/01/15+................. 6,600,000
--------------
71,726,586
--------------
IOWA -- 0.1%
2,000,000 Iowa (State of), Finance
Authority, Industrial Development
Revenue,
(Sauer-Sunstrand Company Project),
AMT, Bayerische Vereinsbank LOC,
3.750% 05/01/26+(a).............. 2,000,000
--------------
KANSAS -- 2.4%
9,600,000 Kansas (State of), Development
Finance Authority, (Seaboard
Projects), Series A, AMT, Bank of
New York LOC,
3.800% 12/02/25+(a).............. 9,600,000
6,020,000 Lawrence, Kansas, GO, Series B,
3.900% 10/01/98.................. 6,019,398
41,470,000 Olathe, Kansas, Educational
Facilities Revenue, (Kansas
Independent College Association),
Series A, Midland Bank Plc LOC,
3.650% 07/01/24+................. 41,470,000
2,115,000 Wichita, Kansas, Industrial
Revenue, (Brenner Tank Inc.
Project), AMT, Bank One LOC,
3.850% 12/01/05+(a).............. 2,115,000
--------------
59,204,398
--------------
KENTUCKY -- 3.0%
2,800,000 Daviess (County of), Kentucky,
Solid Waste Disposal Facilities
Revenue, (Scott Paper Company
Project), Series A, AMT, Kimberly
Clark Guaranty,
3.850% 12/01/23++................ 2,800,000
12,000,000 Georgetown, Kentucky, Educational
Institution Improvement Revenue,
(Georgetown College Project),
Bank One Kentucky N.A. LOC,
3.750% 12/01/17+(a).............. 12,000,000
1,500,000 Hopkinsville, Kentucky, Industrial
Building Revenue, (Brazeway Inc.
Project), AMT, NBD Bank, N.A.
LOC,
3.850% 06/01/04+(a).............. 1,500,000
19,000,000 Kentucky (State of),
Asset/Liability Commission,
General Fund Revenue, Tax and
Revenue Anticipation Notes,
Series A,
4.500% 06/25/98.................. 19,027,686
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
KENTUCKY -- (CONTINUED)
$ 7,500,000 Kentucky (State of), Economic
Development Finance Authority,
Hospital Facilities Revenue,
(Baptist Healthcare Systems
Project), Canadian Imperial Bank
of Commerce LOC,
3.600% 08/15/31+................. $ 7,500,000
3,500,000 Lebanon, Kentucky, Industrial
Development Revenue, (Wallace
Computer Services Inc.), AMT,
Wachovia Bank, Georgia LOC,
3.800% 06/01/19+(a).............. 3,500,000
Lexington-Fayette, Kentucky, Urban
County Airport Corporation
Revenue, AMT, Credit Local de
France LOC:
1,000,000 Series A,
3.900% 04/01/24++................ 1,000,000
3,000,000 Series B,
3.900% 04/01/24++................ 3,000,000
5,430,000 Louisville and Jefferson (Counties
of), Kentucky, Visitors and
Convention Commission, FSA
Insured, Merrill Lynch SBPA,
3.050% 01/01/24+(a).............. 5,430,000
Mason (County of), Kentucky, PCR,
(East Kentucky Power Cooperative
Inc. Project), CFC:
5,700,000 Series B1,
3.750% 10/15/14+................. 5,700,000
8,950,000 Series B2,
3.750% 10/15/14+................. 8,950,000
6,000,000 Middletown, Kentucky, (Christian
Academy Project), Bank One LOC,
3.750% 07/01/22+(a).............. 6,000,000
--------------
76,407,686
--------------
LOUISIANA -- 2.7%
6,550,000 Caddo Parish, Louisiana,
Industrial Development Board,
(Frymaster Corporation Project),
Chase Bank LOC,
3.650% 01/01/03+................. 6,550,000
11,385,000 Jefferson Parish, Louisiana,
Hospital Service Revenue,
District Number 1, (West
Jefferson Medical Center),
Rabobank Nederland LOC,
3.700% 01/01/26+................. 11,385,000
Louisiana (State of), Public
Facilities Authority, PCR:
20,225,000 (Ciba-Geigy Corporation Project),
Swiss Bank LOC,
3.700% 12/01/04+................. 20,225,000
25,000,000 (Willis Knighter Medical Center),
AMBAC Insured, Credit Local de
France SBPA,
3.700% 09/01/27+................. 25,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 17
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
LOUISIANA -- (CONTINUED)
$ 5,345,000 Upper Pontalba, Louisiana,
Building Restoration Corporation
Revenue, (Upper Pontalba Building
Project), Bank One LOC,
3.750% 12/01/16+................. $ 5,345,000
--------------
68,505,000
--------------
MARYLAND -- 0.4%
3,300,000 Baltimore (City of), Maryland,
Port Facilities Authority,
(Occidental Petroleum Company),
Wachovia Bank LOC,
3.250% 10/14/11+++............... 3,300,000
4,750,000 Maryland (State of), Economic
Development Revenue,
(General Binding Corporation
Project), AMT, Harris Trust &
Savings Bank LOC,
3.800% 03/01/26+(a).............. 4,750,000
2,300,000 Maryland (State of), Industrial
Development Finance Authority,
(Rock-Tennessee Converting
Company), AMT, SunTrust Company
Bank LOC,
3.800% 05/01/06+(a).............. 2,300,000
--------------
10,350,000
--------------
MASSACHUSETTS -- 0.2%
4,000,000 Massachusetts (State of),
Industrial Finance Authority,
Development Revenue, (Sundstrand
Corporation Project), AMT, UBS
LOC,
3.850% 05/01/32+................. 4,000,000
--------------
MICHIGAN -- 2.1%
7,000,000 Delta (County of), Michigan,
Economic Development Corporation
Revenue, Improvement Revenue
Bonds, (Mead-Escanaba Paper
Project), Series F, Union Bank of
Switzerland LOC,
3.750% 12/01/13++(a)............. 7,000,000
14,800,000 Green Lake, Michigan, Economic
Development Corporation Revenue,
(Interlochen Center Arts
Project), Lasalle National Bank
LOC,
3.700% 06/01/27+(a).............. 14,800,000
3,185,000 Jackson (County of), Michigan,
Economic Development Corporation,
Industrial Development Revenue,
(Jackson Association LLC), Bank
One, Dayton LOC,
3.750% 10/01/14+(a).............. 3,185,000
8,000,000 Michigan (State of), Hospital
Financing Authority Revenue,
(St. Mary Hospital of Livonia),
Series A, Comerica Bank LOC,
3.700% 07/01/17+................. 8,000,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
MICHIGAN -- (CONTINUED)
$ 3,000,000 Michigan (State of), Housing
Development Authority, Limited
Obligation Revenue, (Pine Ridge
Project), NatWest LOC,
3.700% 10/01/07+................. $ 3,000,000
10,000,000 Michigan (State of), Municipal
Bond Authority Revenue, Series B,
4.500% 07/02/98.................. 10,015,754
900,000 Michigan (State of), Strategic
Funding Ltd. Obligation Revenue,
(Uni Boring Company Inc.), NBD
Bank N.A. LOC,
3.800% 12/01/98+(a).............. 900,000
Michigan (State of), University of
Michigan Hospital Revenues,
Series A:
700,000 3.800% 12/01/19++................. 700,000
3,900,000 3.800% 12/01/27++................. 3,900,000
1,100,000 Michigan (State of), University of
Michigan Revenues, (Medical
Service Plan), Series A,
3.800% 12/01/27++................ 1,100,000
--------------
52,600,754
--------------
MINNESOTA -- 0.7%
5,900,000 Minneapolis, Minnesota, Community
Development Agency Revenue,
(Arena Acquisition Project),
Series A, U.S. Bank, N.A. LOC,
3.700% 10/01/24+................. 5,900,000
6,160,000 Minneapolis, Minnesota, Housing
Development Revenue, (Symphony
Place Project), Citibank LOC,
3.750% 12/01/14+................. 6,160,000
5,100,000 New Ulm, Minnesota, Hospital
Facilities Revenue, (Health
Center Systems Project),
Norwest Corporation LOC,
3.600% 08/01/14+................. 5,100,000
--------------
17,160,000
--------------
MISSISSIPPI -- 0.2%
Mississippi Business Finance
Corporation, Industrial
Development Revenue:
2,500,000 (Choctaw Maid Farms Inc. Project),
AMT, Rabobank Nederland LOC,
3.800% 03/01/10+(a).............. 2,500,000
2,400,000 (Mmars 2nd Program Project),
Series A, AMT, Midland Bank LOC,
3.800% 06/01/05+(a).............. 2,400,000
--------------
4,900,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 18
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
MISSOURI -- 8.2%
Berkeley, Missouri, Industrial
Development Authority Revenue:
$ 5,000,000 (Flight Safety International Inc.
Project), Wachovia Bank LOC,
3.650% 09/01/04+(a).............. $ 5,000,000
5,000,000 (Wetterau Project), PNC Bank LOC,
3.750% 07/01/06+(a).............. 5,000,000
4,100,000 Columbia, Missouri, Special
Obligation Revenue, Series A,
Toronto Dominion Bank LOC,
3.700% 06/01/08+................. 4,100,000
17,100,000 Kansas City, Missouri, Industrial
Development Authority, Multi-
family Housing Revenue, (Timbline
Village Apartments Project), Bank
of America LOC,
3.750% 06/01/08+................. 17,100,000
Mexico, Missouri, Industrial
Development Authority Revenue,
(Wetterau Inc. Project), PNC Bank
LOC:
810,000 Series A,
3.750% 12/01/98+(a).............. 810,000
815,000 Series B,
3.750% 12/01/98+(a).............. 815,000
Missouri (State of), Environmental
Improvement and Energy Resources
Authority, PCR, (Union Electric),
Union Bank of Switzerland LOC:
7,000,000 3.950% 06/01/98................... 7,000,000
Missouri (State of), Environmental
Improvement and Energy Resources
Authority, PCR, (Union Electric),
Westdeutsche Landesbank
Girozentrale LOC:
7,000,000 3.900% 04/17/98................... 7,000,000
7,475,000 4.000% 05/08/98................... 7,475,000
13,370,000 3.900% 06/08/98................... 13,370,000
3,000,000 3.850% 06/12/98................... 3,000,000
9,000,000 3.900% 06/12/98................... 9,000,000
2,000,000 (Monsanto Company Project),
3.750% 06/01/23+................. 2,000,000
Missouri (State of), Health and
Educational Facilities Authority,
Educational Facilities Revenue:
7,760,000 Series A,
3.650% 09/01/10+................. 7,760,000
7,400,000 (Rockhurst College Project),
Allied Irish Bank Group LOC,
3.700% 11/01/25+................. 7,400,000
1,500,000 (Washington University Project),
Morgan Guaranty Trust Company of
New York SBPA,
3.650% 09/01/09+................. 1,500,000
Missouri (State of), Health and
Educational Facilities Authority,
Health Facilities Revenue:
14,890,000 (Barnes Hospital Project), Morgan
Guaranty Trust Company, New York
LOC,
3.650% 12/01/15+................. 14,890,000
(Sisters of Mercy Health Care
Project), Rabobank Nederland
SBPA; and ABN-AMRO LOC:
15,400,000 Series B,
3.650% 06/01/19+................. 15,400,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
MISSOURI -- (CONTINUED)
$ 6,100,000 Series D, Rabonobank Nederland
LOC,
3.650% 06/01/19+................. $ 6,100,000
1,300,000 (SSM Health Care Project-A),
Rabonobank Nederland LOC,
3.500% 06/01/06+................. 1,300,000
Missouri (State of), Health and
Educational Facilities Authority,
School District Authority,
(Advance Funding Project):
4,500,000 (Ferguson-Florissant School
District), Series E,
4.500% 09/14/98.................. 4,511,760
5,650,000 (Independence School District),
Series F,
4.500% 09/14/98.................. 5,664,766
5,000,000 (Joplin R-VIII School District),
Series G,
4.500% 09/14/98.................. 5,013,067
5,000,000 (North Kansas City School
District), Series I,
4.500% 09/14/98.................. 5,013,067
5,000,000 (St. Louis School District),
Series N,
4.500% 09/14/98.................. 5,013,067
9,525,000 Platte, (County of) Missouri,
Industrial Development Authority,
Multi-family Housing Revenue,
(Wexford Place Project), Bank One
LOC,
3.750% 04/01/28+(a).............. 9,525,000
St. Charles (County of), Missouri,
Industrial Development Authority
Revenue:
3,070,000 (Casalon Apartments Project),
Citibank LOC,
3.750% 09/01/25+................. 3,070,000
7,675,000 (Vanderbuilt Apartments Project),
Series A, Citibank LOC,
3.700% 08/01/17+................. 7,675,000
4,400,000 (Venture Stores Inc. Project),
Bank of America LOC,
3.700% 10/01/06+(a).............. 4,400,000
St. Louis, Missouri, Industrial
Development Authority Revenue:
5,000,000 (Wetterau Inc. Project), PNC Bank
LOC,
3.800% 05/01/09+(a).............. 5,000,000
8,000,000 (Wetterau Inc. Project), Wachovia
Bank and Trust LOC,
3.750% 12/01/03+(a).............. 8,000,000
6,170,000 St. Louis, Missouri, Planned
Industrial Expansion Authority,
Development Revenue,
(Alumax Foils Project), PNC Bank
LOC,
3.800% 12/01/05+(a).............. 6,170,000
--------------
205,075,727
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 19
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
MONTANA -- 0.4%
Forsyth, Montana, PCR, AMT:
$ 5,000,000 (Pacificorp Colstrip Project),
Deutsche Bank LOC,
3.900% 12/01/16++(a)............. $ 5,000,000
2,400,000 (Portland General Electric
Company), Banque Nationale de
Paris LOC,
3.850% 12/01/16++................ 2,400,000
1,400,000 Montana (State of), Health
Facilities Authority, Health Care
Revenue, (Pooled Loan Program),
Series A, FGIC insured, Norwest
Bank SBPA,
3.600% 12/01/15+................. 1,400,000
--------------
8,800,000
--------------
NEBRASKA -- 0.2%
4,000,000 York, Nebraska, Industrial
Development Revenue, (Sunstrand
Corporation Project), AMT, Union
Bank of Switzerland LOC,
3.850% 08/01/17+................. 4,000,000
--------------
NEVADA -- 0.2%
4,000,000 Clark County, Nevada, Industrial
Development Revenue,
(Cogeneration Association I
Project), AMT, Canadian Imperial
Bank LOC,
3.850% 11/01/21++................ 4,000,000
--------------
NEW JERSEY -- 0.3%
7,200,000 Jersey City, New Jersey,
Prommisory Notes,
4.375% 09/18/98.................. 7,216,149
--------------
NEW MEXICO -- 0.9%
3,100,000 Albuquerque, New Mexico, (Charter
Hospital Inc. Project), Bankers
Trust Company LOC,
3.650% 03/01/14+................. 3,100,000
20,000,000 New Mexico (State of) Tax and
Revenue Anticipation Notes, Chase
Bank LOC,
4.500% 06/30/98.................. 20,029,203
--------------
23,129,203
--------------
NEW YORK -- 3.4%
3,000,000 Erie (County of), New York,
Industrial Development Agency,
Civic Facilities Revenue, (Depaul
Community Facilities Inc.
Project), Key Bank LOC,
3.740% 11/01/16++(a)............. 3,000,000
40,000,000 New York City, New York, Municipal
Water Finance Authority, PT-1008,
Water and Sewer System Revenue,
FGIC Insured, Merrill Lynch SBPA,
3.800% 06/15/30+(a).............. 40,000,000
39,175,000 New York State, Dorm Authority
Revenues, PT-1012, MBIA Insured,
Merrill Lynch SBPA,
3.800% 08/15/21+(a).............. 39,175,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
NEW YORK -- (CONTINUED)
$ 3,505,000 Niagara (County of), Industrial
Development Agency , Solid Waste
Disposal Revenue, (BFI), AMT,
Wachovia LOC,
3.700% 11/15/24+................. $ 3,505,000
--------------
85,680,000
--------------
NORTH CAROLINA -- 2.6%
5,000,000 Cabarrus (County of), North
Carolina, Industrial Facilities
and Pollution Control Financing
Authority, (Phillip Morris
Companies Project),
3.800% 04/01/01+(a).............. 5,000,000
10,855,000 Charlotte (County of), North
Carolina, Housing Authority,
Multi-family Housing Revenue,
(Merrywood Senior Adult Project),
AMT, Branch Banking and Trust
Company LOC,
3.900% 06/01/11+................. 10,855,000
2,725,000 Iredell, (County of), North
Carolina, Industrial Facilities
and Pollution Control Financing
Authority, (Sullivan Corporation
Project), AMT, Bank One LOC,
3.850% 01/01/11+(a).............. 2,725,000
10,000,000 Lenoir (County of), North
Carolina, (Lenoir Memorial
Hospital Revenue), Wachovia Bank
of North Carolina LOC,
3.500% 10/01/12+(a).............. 10,000,000
Mecklenburg (County of), North
Carolina, Industrial Facilities
and Pollution Control Finance
Authority:
2,000,000 (Sterigenics International
Project), AMT, Comerica Bank,
California LOC,
3.900% 03/01/16+(a).............. 2,000,000
1,575,000 (Virkler Company Project), AMT,
First Union National Bank,
Charlotte LOC,
3.800% 12/01/04+(a).............. 1,575,000
10,545,000 North Carolina (State of), NC
State Housing Project Guaranty;
and Wachovia Bank SBPA,
4.020% 07/01/99+(a).............. 10,545,000
4,670,000 North Carolina (State of), Medical
Care, Community Health Care
Facilities Revenue,
(Missions Thomas St. Jospeph),
Wachovia Bank N.A. LOC,
3.450% 03/01/18+(a).............. 4,670,000
7,700,000 New Hanover (County of), North
Carolina, Industrial Facilities
and Pollution Control Financing
Authority, (Corning Project),
Wachovia Bank N.A. LOC,
3.600% 05/01/10+................. 7,700,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 20
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
NORTH CAROLINA -- (CONTINUED)
$ 4,300,000 Randolph (County of), North
Carolina, Industrial Facilities
and Pollution Control Financing
Authority, (Wayne Steel Inc.),
AMT, Bank One, Akron LOC,
3.850% 09/01/05+(a).............. $ 4,300,000
3,300,000 Stanley (County of), North
Carolina, Industrial Development
Authority, PCR, (General Signal
Corporation), Wachovia Bank,
Georgia LOC,
3.850% 12/01/00+................. 3,300,000
3,615,000 Winston-Salem, North Carolina,
(Risk Acceptance Management
Corporation Project),
Certificates of Participation,
Series 1988, Wachovia Bank SBPA,
3.750% 07/01/09+(a).............. 3,615,000
--------------
66,285,000
--------------
OHIO -- 2.0%
2,160,000 Defiance (County of), Ohio,
Industrial Development Revenue,
(Isaac Property Company), Series
A, Key Bank LOC,
3.740% 07/01/00+(a).............. 2,160,000
8,000,000 Montgomery (County of), Ohio,
Economic Development Revenue (The
Dayton Art Institute Project),
National City Bank of Ohio,
3.750% 05/01/26+................. 8,000,000
Ohio (State of), Air Quality
Development Authority Revenue:
3,500,000 Series A, (Cinergy Corporation),
Union Bank of Switzerland LOC,
4.000% 12/01/15++................ 3,500,000
4,300,000 Series B, (Cinergy Corporation),
Morgan Guaranty, Delaware LOC,
4.000% 12/01/15++................ 4,300,000
10,000,000 Pollution Control, (Duquesne
Power), Series A, Union Bank of
Switzerland LOC,
3.950% 07/01/98.................. 10,000,000
2,000,000 Ohio (State of), PCR, South Ohio
Water Project, British Petroleum
Guaranty,
3.750% 05/01/22++................ 2,000,000
20,000,000 Toledo Lucas County, Ohio, Port
Authority Airport Revenue,
(Flight Safety),
Series 1, AMT, Berkshire Hathaway
Guaranty,
3.400% 01/01/18+(a).............. 20,000,000
--------------
49,960,000
--------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
OKLAHOMA -- 0.2%
$ 5,000,000 Oklahoma (State of), Development
Finance Authority Revenue,
(Seaboard Farms Inc., Project),
AMT, Bank of New York LOC,
3.800% 03/01/27+(a).............. $ 5,000,000
280,000 Oklahoma (State of), Housing
Finance Agency, Single Family
Housing Revenue, PFloats PT41,
AMT, GNMA Collateralized, Merrill
Lynch SBPA,
3.100% 08/01/18+(a).............. 280,000
--------------
5,280,000
--------------
OREGON -- 1.1%
7,500,000 Oregon (State of), Housing and
Community Services Department,
Mortgage Revenue, Single Family
Mortgage, Series K, AMT,
3.875% 12/03/98.................. 7,500,000
4,900,000 Port Portland, Oregon, Pollution
Control, (Reynolds Metals), Bank
of Nova Scotia LOC,
3.750% 12/01/09++................ 4,900,000
12,200,000 Port Portland, Oregon, Special
Obligation Revenue, (Horizon Air
Project) Bank of Montreal LOC,
3.800% 06/15/27++................ 12,200,000
2,000,000 Washington (County of), Oregon,
Housing Authority, Multi-family
Housing Revenue, (Cedar Mill
Project), AMT, Bank of Nova
Scotia LOC,
3.800% 09/01/25+(a).............. 2,000,000
--------------
26,600,000
--------------
PENNSYLVANIA -- 4.5%
Allegheny (County of),
Pennsylvania, Industrial
Development Authority, (Duquesne
Power), Canadian Imperial Bank of
Commerce LOC:
5,000,000 Mode 2
3.850% 09/01/11+................. 5,000,000
8,800,000 Series A
4.100% 09/01/11+................. 8,800,000
9,435,000 (United Jewish Federation), Series
B, PNC Bank LOC,
3.800% 10/01/25+(a).............. 9,435,000
Delaware (County of),
Pennsylvania, Industrial
Development Authority, PCR:
2,000,000 (BP Exploration & Oil),
3.800% 10/01/19++................ 2,000,000
3,500,000 (BP Oil Inc. Project),
3.800% 12/01/09++................ 3,500,000
Delaware Valley, Pennsylvania,
Regional Finance Authority,
Credit Suisse LOC:
10,000,000 Local Government Revenue, Series
C,
3.650% 12/01/20+................. 10,000,000
17,150,000 Series 1986,
3.650% 08/01/16+................. 17,150,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 21
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
PENNSYLVANIA -- (CONTINUED)
$ 5,000,000 Montgomery (County of),
Pennsylvania, Industrial
Development Authority Revenue,
(Plymouth Woods Project), PNC
Bank LOC,
3.800% 09/01/06+(a).............. $ 5,000,000
1,200,000 Pennsylvania (State of), Economic
Development, Financing Authority
Development Revenue, Series B,
(Pennsylvania Bar Institute), PNC
Bank N.A. LOC,
3.800% 04/01/25+(a).............. 1,200,000
10,000,000 Philadelphia, Pennsylvania,
Redevelopment Authority,
(Southwark Plaza), PNC Bank N.A.
LOC
3.800% 12/01/03+................. 10,000,000
25,000,000 Philadelphia, Pennsylvania, School
District, Tax and Revenue
Anticipation Notes, Commerzbank
AG LOC,
4.500% 06/30/98.................. 25,031,413
5,400,000 Quakertown, Pennsylvania, General
Authority Revenue, (Pooled
Financing Program), Series A, PNC
Bank LOC,
3.750% 07/01/26+................. 5,400,000
4,820,000 Union (County of), Pennsylvania,
Hospital Authority Revenue,
(Evangelical Community Hospital),
Series B, PNC Bank LOC,
3.500% 10/01/23+................. 4,820,000
5,000,000 Westmoreland (County of),
Pennsylvania, Industrial
Development Authority Revenue,
(Elizabeth Carbide Die), Series
A, AMT, National City Bank LOC,
3.400% 02/01/18+(a).............. 5,000,000
--------------
112,336,413
--------------
RHODE ISLAND -- 0.2%
4,000,000 Rhode Island (State of),
Industrial Facilities
Corporation, Industrial
Development Revenue, (Handy &
Harman Electric Project), Bank of
Nova Scotia LOC,
3.800% 04/01/04+(a).............. 4,000,000
--------------
SOUTH CAROLINA -- 2.4%
6,545,000 Kershaw (County of), South
Carolina, Industrial Development
Revenue, (Deroyal Textiles Inc.
Project), AMT, SunTrust Bank LOC,
3.800% 12/01/07+(a).............. 6,545,000
7,070,000 South Carolina (State of), Housing
Authority, Rental Housing
Revenue, (Hampton Pointe
Apartments Project), Bank of New
York LOC,
3.800% 12/01/07+................. 7,070,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SOUTH CAROLINA -- (CONTINUED)
$ 9,000,000 South Carolina (State of), Jobs,
Economic Development Authority
Revenue, (Alco-Lite Industries
LLC Project), AMT, Wachovia Bank,
South Carolina LOC,
3.750% 04/01/12+................. $ 9,000,000
South Carolina (State of), Jobs,
Economic Development Authority
Revenue:
5,860,000 Health Facilities Revenue, (Martha
Franks Baptist Center Project),
Wachovia Bank, Columbia LOC,
3.650% 04/01/19+(a).............. 5,860,000
Industrial Facilities Revenue:
5,125,000 (Kravet Fabrics Inc. Project),
AMT, Bank of New York LOC,
3.800% 03/01/12+(a).............. 5,125,000
3,400,000 (Specialty Equipment Companies
Project), AMT, Bank of America
Plc LOC,
3.850% 11/01/10+(a).............. 3,400,000
20,700,000 South Carolina (State of), Ports
Authority, Ports Revenue, (JR.
Lien), AMT, South Carolina
National Bank LOC,
3.850% 07/01/24+................. 20,700,000
2,000,000 York (County of), South Carolina,
PCR, (North Carolina Electrical
Membership Corporation Project),
CFC LOC,
3.750% 09/15/14+................. 2,000,000
--------------
59,700,000
--------------
SOUTH DAKOTA -- 0.9%
22,040,000 South Dakota (State of), Housing
Development Authority, PT-168,
Banque Nationale de Paris SBPA,
3.850% 05/01/27+(a).............. 22,040,000
--------------
TENNESSEE -- 1.7%
Chattanooga, Tennessee, Industrial
Development Board:
4,250,000 (Warehouse Row Limited Project),
Credit Suisse LOC,
3.700% 12/15/12+................. 4,250,000
2,000,000 (Seaboard Farms Inc. Project),
SunTrust Bank LOC,
3.750% 06/01/04+(a).............. 2,000,000
4,200,000 Covington, Tennessee, Industrial
Development Board, (Charms
Company Project), Societe
Generale LOC,
3.800% 06/01/27+(a).............. 4,200,000
6,969,000 Cumberland (County of), Tennessee,
Industrial Development Board,
Industrial Development Revenue,
(Crossville Ceramics Company
Project), NBD LOC,
3.700% 01/01/00+(a).............. 6,969,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 22
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TENNESSEE -- (CONTINUED)
$ 2,300,000 Jackson (County of), Tennessee,
Industrial Development Board,
(Essette Project), Series A, Bank
of America LOC,
3.800% 08/01/00+(a).............. $ 2,300,000
Metropolitan, Nashville, Airport
Authority SPL Facility Revenue,
(American Airlines Project):
3,300,000 Series A, Credit Suisse LOC,
3.750% 10/01/12++................ 3,300,000
2,100,000 Series B, Bayerische Landesbank,
3.750% 10/01/12++................ 2,100,000
3,245,000 Shelby (County of), Tennessee,
Health Educational & Housing
Facilities Board, Multi-family
Housing Revenue, (Flag Manor),
AMT, Federal Home Loan Bank,
Indianapolis LOC,
3.800% 01/01/23+(a).............. 3,245,000
8,000,000 Tennessee (State of), Housing
Development Agency, Homeownership
Program, Issue 2, AMT,
4.000% 06/04/98#................. 8,000,000
7,000,000 Tesculum, Tennessee, Health
Educational & Housing Facilities
Board, Educational Facilities
Revenue, (Tusculum College
Project), SunTrust Bank Nashville
LOC,
3.700% 07/01/12+(a).............. 7,000,000
--------------
43,364,000
--------------
TEXAS -- 3.7%
3,500,000 Angelina & Neches River Authority,
Texas, (Texas Industrial
Development Corporation), Solid
Waste Revenue, Credit Suisse LOC,
3.800% 05/01/14++................ 3,500,000
3,635,000 Bexar (County of), Texas, (Army
Retirement), Series 85-B,
Rabobank Nederland LOC,
Solid Waste Revenue, Series
1984B, Credit Suisse LOC,
3.050% 07/01//11+................ 3,635,000
1,000,000 Brazos River, Texas, Higher
Educational Authority, (Hoffman-
Laroche), Wachovia Bank, Georgia
LOC,
3.575% 04/01/02+(a).............. 1,000,000
8,185,000 El Paso, Texas, Multi-family
Housing Finance Corporation,
(Viva Apartments Project), AMT,
General Electric Capital
Corporation LOC,
3.950% 09/01/23+(a).............. 8,185,000
Grapevine, Texas, Industrial
Development Corporation Revenue,
(American Airlines), Morgan
Guaranty Trust LOC, Multiple
Mode:
600,000 Series A1,
3.750% 12/01/24++................ 600,000
1,700,000 Series A2,
3.750% 12/01/24++................ 1,700,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
TEXAS -- (CONTINUED)
$ 800,000 Series A4,
3.750% 12/01/24++................ $ 800,000
500,000 Series B1,
3.750% 12/01/24++................ 500,000
600,000 Series B2,
3.750% 12/01/24++................ 600,000
1,600,000 Series B3,
3.750% 12/01/24++................ 1,600,000
4,000,000 Harris (County of), Texas,
Industrial Development
Corporation, Industrial
Development Revenue,(Forged
Products Inc. Project), AMT, Bank
One LOC,
3.850% 05/01/03+(a).............. 4,000,000
3,000,000 Hillsboro, Texas, Industrial
Development Corporation Revenue,
(Lamcraft LP Project), AMT,
Columbus Bank and Trust LOC,
3.400% 07/01/13+................. 3,000,000
5,000,000 Houston, Texas, Tax and Revenue
Anticipation Notes,
3.750% 06/30/98.................. 5,007,714
Lone Star, Texas, Airport
Improvement Authority, (American
Airlines Inc. Project), Royal
Bank of Canada LOC:
300,000 Series A2,
3.750% 12/01/14++................ 300,000
1,600,000 Series A3,
3.750% 12/01/14++................ 1,600,000
1,500,000 Series A4,
3.750% 12/01/14++................ 1,500,000
2,700,000 Series A5,
3.750% 12/01/14++................ 2,700,000
800,000 Series B1,
3.750% 12/01/14++................ 800,000
Series B3:
1,600,000 3.750% 12/01/14++................. 1,600,000
2,000,000 3.750% 12/01/14++................. 2,000,000
1,600,000 Series B4,
3.750% 12/01/14++................ 1,600,000
7,600,000 Montgomery (County of), Texas,
Industrial Development
Corporation Revenue, (Houston
Area Research Center Project),
Banque National de Paris LOC,
3.750% 12/01/15+................. 7,600,000
9,200,000 Port Development Corporation,
(Pasadena Marine Terminal Company
Project), ABN-AMRO Bank LOC,
3.900% 12/01/04+(a).............. 9,200,000
Sabine River Authority, Texas,
Pollution Control Revenue, (Texas
Utilities Electric Company
Project):
4,900,000 Series A, AMBAC Insured, Bank of
New York SBPA,
3.800% 03/01/26++................ 4,900,000
3,200,000 Series A, Morgan Guaranty Trust
LOC,
3.850% 04/01/30++................ 3,200,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 23
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TEXAS -- (CONTINUED)
$ 8,000,000 Sulphur Springs, Texas, Industrial
Development Authority,
(Hon Industrial Inc. Project),
Northern Trust LOC,
3.800% 12/01/13+(a).............. $ 8,000,000
5,000,000 Texas (State of), Tax and Revenue
Anticipation Notes, Series A,
4.750% 08/31/98.................. 5,018,047
3,300,000 Trinity River Authority, Texas,
PCR, (Texas Utilities Company
Project), Series A, MBIA Insured,
Bank of New York SBPA,
3.800% 07/01/22+................. 3,300,000
5,300,000 West Side Calhoun (County of),
Texas, Development Corporation
Revenue, (Sohio Chemical Company
Project), British Petroleum
Guaranty,
3.800% 12/01/15++................ 5,300,000
--------------
92,745,761
--------------
UTAH -- 1.0%
2,000,000 Murray (City of), Utah, Industrial
Revenue, (Zevex Inc., Project),
AMT, Bank One LOC,
3.850% 10/01/16+(a).............. 2,000,000
3,200,000 Murray (County of), Utah,
Industrial Development Authority,
(Hunter Douglas Realty Property),
AMT, ABN-AMRO Bank LOC,
3.800% 09/01/14+(a).............. 3,200,000
14,300,000 Salt Lake (City of), Utah, Health
Care Facilities Revenue, Class A,
(IHC Health Services),
Westdeutsche Landesbank SBPA,
3.650% 01/01/20+................. 14,300,000
4,610,000 Salt Lake (City of), Utah, PCR,
(Service Station Holdings Inc.,
Project), Series B, British
Petroleum Guaranty,
3.800% 08/01/07++................ 4,610,000
--------------
24,110,000
--------------
VIRGINIA -- 0.6%
2,500,000 Colonial Heights, Virginia,
Industrial Development Authority,
(Philip Morris Company Project),
3.800% 03/01/05+(a).............. 2,500,000
2,000,000 Fluvanna (County of), Virginia,
Industrial Development Authority
Revenue, (Edgcomb Metals Company
Project), Banque National de
Paris LOC,
3.650% 12/01/09+(a).............. 2,000,000
3,900,000 Greensville (County of), Virginia,
Industrial Development Authority,
PCR, (Perdue Farms Inc. Project),
AMT, SunTrust Bank LOC,
3.800% 10/01/06+(a).............. 3,900,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
VIRGINIA -- (CONTINUED)
$ 2,000,000 Spotsylvania (County of),
Virginia, Industrial Development
Revenue,
(Carlisle Corporation Project),
SunTrust Bank LOC,
3.700% 06/01/08+(a).............. $ 2,000,000
5,500,000 Virginia College Building
Authority, Educational Facilities
Revenue, (University of Richmond
Project), Crestar Bank SBPA LOC,
3.750% 11/01/26+................. 5,500,000
--------------
15,900,000
--------------
WASHINGTON -- 1.8%
2,800,000 Pierce (County of), Washington,
Housing Authority Revenue,
(Eagles Watch Project), Key Bank
LOC,
3.640% 10/01/20+................. 2,800,000
7,575,000 Washington (State of), Housing
Finance Authority, Multi-family
Mortgage Revenue, (Inglenook
Court Project), AMT, Bank of
America LOC,
3.950% 07/01/25++................ 7,575,000
Washington (State of), Public
Power Supply System, Bank of
America LOC:
14,800,000 (Nuclear Project Number 1), Series
1A-2,
3.625% 07/01/17+................. 14,800,000
19,320,000 (Nuclear Project Number 3), Series
3A-1,
3.625% 07/01/18+................. 19,320,000
--------------
44,495,000
--------------
WEST VIRGINIA -- 1.1%
5,100,000 Marshall (County of), West
Virginia, PCR, British Petroleum
Guaranteed,
3.800% 12/01/20++................ 5,100,000
23,100,000 West Virginia (State of), Hospital
Finance Authority, Hospital
Revenue, (St. Mary's Hospital
Project), Bank One LOC,
3.700% 10/01/12+................. 23,100,000
--------------
28,200,000
--------------
WISCONSIN -- 1.8%
6,500,000 Appleton, Wisconsin, Area School
District, Tax and Revenue,
4.100% 09/25/98.................. 6,505,753
1,500,000 Germantown, Wisconsin, School
District, Board Anticipation
Notes,
4.250% 04/01/98.................. 1,500,000
2,250,000 Janesville, Wisconsin, School
District, Tax and Revenue
Anticipation Promissory Notes,
4.100% 09/21/98.................. 2,252,050
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE> 24
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
WISCONSIN -- (CONTINUED)
$ 4,000,000 Menomonee Falls, Wisconsin,
Industrial Development Authority
Revenue, (Jemma LLC Project),
AMT, Bank One LOC,
3.850% 09/01/14+(a).............. $ 4,000,000
4,900,000 Pleasant Prairie, Wisconsin,
Industrial Development Authority
Revenue, (Nucon Corporation
Project), AMT, American National
Bank & Trust Company, LOC,
3.800% 02/01/22+(a).............. 4,900,000
5,000,000 Sheboygan, Wisconsin, Area School
District, Tax and Revenue
Anticipation Promissory Notes,
4.100% 08/31/98.................. 5,004,006
3,950,000 Stevensons Point, Wisconsin, Area
Public School District, Tax and
Revenue Anticipation Promissory
Notes,
4.100% 10/15/98.................. 3,953,675
8,200,000 West Allis, Milwaukee, Wisconsin,
School District, Tax and Revenue
Anticipation Promissory Notes,
4.100% 09/21/98.................. 8,207,473
Wisconsin (State of), Health
Facilities Authority:
6,000,000 (Daughters of Charity),
3.650% 11/01/26+(a).............. 6,000,000
2,800,000 (Felician Health Care Inc.),
LaSalle National Bank LOC,
3.700% 01/01/19+................. 2,800,000
--------------
45,122,957
--------------
WYOMING -- 0.3%
600,000 Sublette (County of), Wyoming,
PCR, (Exxon Project), Series A,
AMT,
3.850% 07/17/17+................. 600,000
7,000,000 Wyoming Community Development
Authority Housing Revenue, Series
7A, AMT,
4.150% 08/27/98.................. 7,000,600
--------------
7,600,600
--------------
TOTAL MUNICIPAL BONDS
AND NOTES
(Cost $2,506,150,359)............. 2,506,150,359
==============
</TABLE>
<TABLE>
<CAPTION>
SHARES
- -----------
<C> <S> <C>
INVESTMENT COMPANIES -- 0.0%##
50,000 AIM Tax-Exempt Fund................ 50,000
25,000 Federated Tax Exempt Money Market
Fund.............................. 25,000
--------------
TOTAL INVESTMENT COMPANIES
(Cost $75,000).................... 75,000
==============
TOTAL INVESTMENTS
(Cost $2,506,225,359*).................. 99.8% $2,506,225,359
OTHER ASSETS AND
LIABILITIES (NET)....................... 0.2 5,240,892
----- --------------
NET ASSETS............................... 100.0% $2,511,466,251
===== ==============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Variable rate demand notes payable upon not more than seven calendar days'
notice. The interest rate shown reflects the rate in effect at March 31,
1998.
++ Variable rate demand notes payable upon not more than one calendar day's
notice. The interest rate shown reflects the rate in effect at March 31,
1998.
+++ Variable rate demand notes payable upon not more than thirty calendar days'
notice. The interest rate shown reflects the rate in effect at March 31,
1998.
# Put date.
## Amount represents less than 0.1%.
(a) Securities are not registered under the Securities Act of 1933. These
securities may be resold in transactions exempt from registration to
qualified institutional buyers.
Nations Tax Exempt Fund had the following industry concentrations greater than
10% at March 31, 1998 (as a percentage of net assets) (unaudited):
<TABLE>
<S> <C>
Educational Facilities Revenue 10.9%
Industrial Facilities Revenue 10.5%
Housing Revenue 15.8%
Medical Facilities Revenue 12.2%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE> 25
NATIONS FUNDS
Nations Treasury Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MATURITY
AMOUNT DATE VALUE
- -----------------------------------------------------------------
<C> <S> <C> <C>
U.S. TREASURY NOTES -- 21.7%
(Cost $590,878,559)
$ 40,000,000 5.875%+............... 04/30/98 $ 40,007,297
15,000,000 8.250%+............... 07/15/98 15,106,140
195,000,000 6.250%+............... 07/31/98 195,341,051
40,000,000 4.750%+............... 09/30/98 39,828,241
65,000,000 6.000%+............... 09/30/98 65,108,862
75,000,000 5.875%+............... 10/31/98 75,086,542
125,000,000 5.875%+............... 01/31/99 125,405,375
35,000,000 5.500%................ 02/28/99 34,995,051
--------------
U.S. TREASURY NOTES
(Cost $590,878,559)............. 590,878,559
==============
</TABLE>
REPURCHASE AGREEMENTS -- 94.3%
REPURCHASE AGREEMENTS -- FIXED
RATE -- 89.5%
134,000,000 Agreement with
ABN-Amro Bank, 6.050%
dated 03/31/98 to be
repurchased at
$134,022,519 on
04/01/98
collateralized by:
$36,644,472 U.S.
Treasury Strip,
Principal Only, due
11/30/99;
$100,036,160 U.S.
Treasury Strip,
Principal Only, due
09/30/99............. 134,000,000
665,000,000 Agreement with Bankers
Trust N.Y.
Corporation, 6.050%
dated 03/31/98 to be
repurchased at
$665,111,757 on
04/01/98
collateralized by
$265,380,569 U.S.
Treasury Note, 5.375%
due 02/15/01;
$350,702,695 U.S.
Treasury Note, 6.125%
due 08/15/07;
$54,488,230 U.S.
Treasury Bond,
12.750% due
11/15/10............. 665,000,000
134,000,000 Agreement with Bear
Stearns Company,
6.100% dated 03/31/98
to be repurchased at
$134,022,705 on
04/01/98
collateralized by
$137,803,202 GNMA,
6.500% -- 8.000% due
09/20/21 -- 03/15/28... 134,000,000
90,000,000 Agreement with BZW
Securities
Corporation, 5.950%
dated 03/31/98 to be
repurchased at
$90,014,875 on
04/01/98
collateralized by
$91,800,270 U.S.
Treasury Notes,
5.875% -- 6.750% due
06/30/99 --
05/31/01............. 90,000,000
476,298,000 Agreement with CS
First Boston
Corporation. Interest
is payable monthly.
The agreement is
terminable by the
Fund daily. The final
maturity date of the
agreement is 07/01/98
collateralized by:
$96,518 U.S. Treasury
Strips, Principal
Only, due
08/15/25 -- 02/15/26;
$494,283,011 U.S.
Treasury Strips,
Interest Only, due
11/15/01 -- 11/15/17##... 476,298,000
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
REPURCHASE AGREEMENTS -- FIXED RATE --
(CONTINUED)
$133,000,000 Agreement with CIBC Wood Gundy
Securities Corporation, 5.900%
dated 03/31/98 to be repurchased
at $133,021,797 on 04/01/98
collateralized by $135,664,472
U.S. Treasury Notes,
5.500% -- 7.875% due
08/15/98 -- 02/15/08............ $ 133,000,000
134,000,000 Agreement with Dresdner Bank
Inc., 6.100% dated 03/31/98 to
be repurchased at $134,022,705
on 04/01/98 collateralized by
$136,680,975 GNMA, 6.000% due
06/20/27 -- 10/20/27............ 134,000,000
134,000,000 Agreement with First Union
Corporation, 6.000% dated
03/31/98 to be repurchased at
$134,022,333 on 04/01/98
collateralized by: $76,541,234
U.S. Treasury Bills due
04/02/98 -- 02/04/99; $6,218,989
U.S. Treasury Bonds,
6.250% -- 10.750% due
08/15/05 -- 08/15/23;
$53,982,013 U.S. Treasury Notes,
4.750% -- 7.750% due
08/15/98 -- 08/15/05............ 134,000,000
134,000,000 Agreement with Goldman, Sachs &
Company, 6.000% dated 03/31/98
to be repurchased at
$134,022,333 on 04/01/98
collateralized by $136,702,780
GNMA, 7.000% due 07/15/27....... 134,000,000
134,000,000 Agreement with Lehman Brothers
Inc., 5.900% dated 03/31/98 to
be repurchased at $134,021,961
on 04/01/98 collateralized by:
$84,227,452 U.S. Treasury Bond,
6.375% due 08/15/27; $52,420,338
U.S. Treasury Note, 5.750% due
10/31/02........................ 134,000,000
134,000,000 Agreement with Morgan (J.P.)
Securities Inc., 6.100% dated
03/31/98 to be repurchased at
$134,022,705 on 04/01/98
collateralized by $136,680,000
GNMA, 8.500% -- 9.000% due
05/15/16 -- 11/15/27............ 134,000,000
134,000,000 Agreement with Salomon Smith
Barney Holdings Inc., 6.100%
dated 03/31/98 to be repurchased
at $134,022,705 on 04/01/98
collateralized by $136,682,027
GNMA, 5.500% -- 9.500% due
08/15/01 -- 12/15/27............ 134,000,000
--------------
2,436,298,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE> 26
NATIONS FUNDS
Nations Treasury Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENTS -- TERM -- 4.8%
$130,000,000 Agreement with Morgan Stanley
Group Inc., 6.100%, with a final
maturity date of 04/09/98.
Interest receivable as of March
31, 1998 was $418,600,
collateralized by $134,598,948
GNMA, 5.000% -- 8.500% due
02/20/23 -- 11/20/27**..........
$ 130,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(Cost $2,566,298,000)...........
2,566,298,000
==============
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
INVESTMENT COMPANIES -- 1.4%
20,884,000 AIM Treasury Fund................ $ 20,884,000
18,037,000 Dreyfus Treasury Cash Management
Fund............................ 18,037,000
--------------
TOTAL INVESTMENT COMPANIES
(Cost $38,921,000).............. 38,921,000
==============
TOTAL INVESTMENTS
(Cost $3,196,097,559*)................. 117.4% $3,196,097,559
OTHER ASSETS AND LIABILITIES (NET)...... (17.4) (474,522,776)
----- --------------
NET ASSETS.............................. 100.0% $2,721,574,783
===== ==============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
** Restricted security (Note 5).
+ Denotes security, or a portion thereof, subject to repurchase under reverse
repurchase agreement as of March 31, 1998 (Note 1).
## Securities segregated as collateral for reverse repurchase agreement.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE> 27
NATIONS FUNDS
Nations Government Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MATURITY
AMOUNT DATE VALUE
- -----------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 102.4%
FEDERAL FARM CREDIT BANK NOTES -- 5.6%
$ 8,000,000 5.900%................ 04/01/98 $ 8,000,000
4,605,000 5.600%................ 10/01/98 4,606,032
6,000,000 5.700%................ 11/03/98 5,999,723
--------------
18,605,755
--------------
FEDERAL HOME LOAN BANK -- 50.9%
140,033,000 Discount note......... 04/01/98 140,033,000
5,415,000 Discount note......... 04/07/98 5,410,127
17,545,000 Discount note......... 04/08/98 17,526,407
5,000,000 Discount note......... 05/07/98 4,972,700
--------------
167,942,234
--------------
FEDERAL HOME LOAN BANK FLOATING RATE NOTES --10.0%
15,000,000 5.720%+............... 04/01/98+++ 15,000,000
18,000,000 5.614%+............... 04/01/98+++ 17,997,074
--------------
32,997,074
--------------
FEDERAL HOME LOAN BANK NOTES -- 23.6%
6,000,000 6.010%................ 05/15/98 6,000,009
7,000,000 5.820%................ 06/16/98 6,999,430
7,000,000 5.900%................ 06/19/98 6,999,969
5,000,000 5.720%................ 07/07/98 5,003,246
5,000,000 5.690%................ 09/24/98 5,004,628
9,000,000 5.682%................ 10/16/98 8,996,561
5,000,000 5.579%................ 01/27/99 4,998,711
5,000,000 5.415%................ 02/10/99 4,996,452
10,000,000 5.570%................ 03/09/99 9,996,615
10,000,000 5.570%................ 04/07/99 9,991,400
9,000,000 5.650%................ 04/09/99 8,997,636
--------------
77,984,657
--------------
STUDENT LOAN MARKETING ASSOCIATION FLOATING RATE
NOTE -- 4.5%
14,800,000 5.378%+............... 04/07/98+++ 14,800,000
--------------
STUDENT LOAN MARKETING ASSOCIATION NOTES -- 7.8%
8,000,000 5.850%................ 06/10/98 7,998,926
3,900,000 5.740%................ 11/16/98 3,898,622
14,000,000 5.400%................ 02/10/99 13,981,599
--------------
25,879,147
--------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(Cost $338,208,867)............ 338,208,867
==============
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
INVESTMENT COMPANY -- 3.3% (Cost $10,802,500)
10,802,500 Dreyfus Treasury Prime Cash
Management Fund................... $ 10,802,500
============
TOTAL INVESTMENTS
(Cost $349,011,367*)..................... 105.7% $349,011,367
OTHER ASSETS AND LIABILITIES (NET)........ (5.7) (18,891,480)
----- ------------
NET ASSETS................................ 100.0% $330,119,887
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Variable rate security. The interest rate shown reflects the rate in effect
at March 31, 1998.
+++ Reset date. Interest rates reset either daily, weekly or monthly.
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE> 28
NATIONS FUNDS
Nations Prime Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MATURITY
AMOUNT DATE VALUE
- -----------------------------------------------------------------
<C> <S> <C> <C>
BANK OBLIGATIONS -- 11.5%
CERTIFICATES OF DEPOSIT -- DOMESTIC -- 2.6%
Bankers Trust New York Corporation:
$ 5,000,000 5.990%............... 06/25/98 $ 4,999,555
40,000,000 5.670%............... 02/26/99 39,982,619
Morgan Guaranty Trust Company:
65,000,000 5.965%............... 06/22/98 64,995,117
36,000,000 5.550%............... 02/02/99 35,921,076
--------------
145,898,367
--------------
CERTIFICATES OF DEPOSIT -- YANKEE -- 8.9%
25,000,000 ABN-Amro Bank, (New
York),
5.750%............... 03/31/99 24,985,677
45,000,000 Banque Nationale de
Paris, (New York),
5.710%............... 02/25/99 45,000,000
30,000,000 Bayerische Landesbank
AG, (New York),
5.602%+.............. 04/07/98 29,995,559
45,000,000 Bayerische Verein-
sbank, (New York),
5.680%............... 01/21/99 45,000,000
10,000,000 CS First Boston,
5.800%............... 10/13/98 10,000,000
50,000,000 Credit Agricole, (New
York),
5.750%............... 04/01/99 49,976,061
40,000,000 Deutsche Bank, (New
York),
5.640%............... 01/15/99 40,000,000
National Bank of Canada, (New York):
30,000,000 6.140%............... 06/05/98 29,998,927
30,000,000 5.940%............... 12/03/98 30,000,000
Societe Generale, (New York):
40,000,000 5.650%............... 04/07/98 40,000,000
30,000,000 5.880%............... 07/22/98 29,996,478
30,000,000 5.950%............... 10/21/98 29,992,027
35,000,000 5.700%............... 02/26/99 34,987,836
18,000,000 5.800%............... 03/31/99 17,992,105
40,000,000 Westdeutsche
Landesbanken,
Girozentrale, (New
York),
5.680%............... 01/25/99 40,000,000
--------------
497,924,670
--------------
TOTAL BANK OBLIGATIONS
(Cost $643,823,037)............ 643,823,037
==============
CORPORATE OBLIGATIONS -- 60.2%
COMMERCIAL PAPER -- DOMESTIC -- 33.1%
AON Corporation:
25,000,000 Discount note........ 04/09/98 24,969,000
12,007,000 Discount note........ 04/13/98 11,984,667
20,857,000 Discount note........ 06/22/98 20,594,283
25,000,000 Asset Securitization
Cooperative Corpo-
ration, Discount
note(b).............. 04/29/98 24,892,278
30,000,000 Bankers Trust New York
Corporation,
Discount note........ 11/24/98 28,915,725
8,000,000 Beta Finance, Inc.,
Discount note(b)..... 09/24/98 7,787,236
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
PRINCIPAL MATURITY
AMOUNT DATE VALUE
<C> <S> <C> <C>
COMMERCIAL PAPER -- DOMESTIC -- (CONTINUED)
Concord Minutemen Capital Corporation:
$ 15,000,000 Discount note(b)..... 04/06/98 $ 14,988,313
20,000,000 Discount note(b)..... 04/08/98 19,978,183
20,000,000 Discount note(b)..... 04/13/98 19,962,600
21,172,000 Discount note(b)..... 04/14/98 21,129,109
16,676,000 Discount note(b)..... 04/21/98 16,624,119
127,700,000 Discount note(b)..... 04/22/98 127,282,724
23,122,000 Discount note(b)..... 10/07/98 22,457,994
Countrywide Home Loans, Inc.:
60,000,000 Discount note........ 04/15/98 59,870,033
50,000,000 Discount note........ 04/16/98 49,883,958
40,000,000 Discount note........ 05/19/98 39,703,467
20,000,000 Discount note........ 05/20/98 19,848,917
Edison Securitization L.L.C.:
36,437,000 Discount note(b)..... 04/15/98 36,358,215
20,000,000 Discount note(b)..... 04/20/98 19,941,311
10,000,000 Discount note(b)..... 07/10/98 9,846,944
Finova Capital Corporation:
20,000,000 Discount note........ 04/08/98 19,978,222
20,000,000 Discount note........ 04/13/98 19,963,333
40,000,000 Discount note........ 06/11/98 39,563,744
25,000,000 Discount note........ 06/22/98 24,685,097
General Motors Acceptance Corporation:
30,000,000 Discount note........ 04/20/98 29,910,542
125,000,000 Discount note........ 04/24/98 124,554,375
19,000,000 Hitachi America,
Discount note........ 07/17/98 18,679,802
International Securitization Corporation:
20,110,000 Discount note(a)..... 04/21/98 20,047,771
20,450,000 Discount note(a)..... 04/27/98 20,368,177
64,690,000 Discount note(a)..... 04/30/98 64,403,090
26,000,000 Discount note(a)..... 07/09/98 25,607,465
30,000,000 Lehman Brothers
Holdings Inc.,
Discount note........ 05/01/98 29,858,750
Lexington Parker Capital Company L.L.C.:
35,358,000 Discount note(b)..... 04/22/98 35,243,322
75,000,000 Discount note(b)..... 05/27/98 74,358,800
30,704,000 Discount note(b)..... 08/07/98 30,105,750
22,200,000 Discount note(b)..... 08/21/98 21,720,135
19,500,000 Discount note(b)..... 09/03/98 19,038,229
Mitsubishi International Corporation:
20,000,000 Discount note........ 04/27/98 19,919,978
60,000,000 Discount note........ 05/11/98 59,631,333
10,000,000 Discount note........ 05/14/98 9,933,828
30,000,000 Discount note........ 06/17/98 29,646,442
SAFECO Corporation:
50,000,000 Discount note(a)..... 04/21/98 49,848,056
10,000,000 Discount note(a)..... 04/23/98 9,966,083
20,000,000 Discount note(a)..... 05/06/98 19,891,694
20,000,000 Discount note........ 05/11/98 19,878,000
20,000,000 Discount note(a)..... 05/20/98 19,848,917
35,000,000 Discount note........ 05/20/98 34,738,462
14,000,000 Discount note(a)..... 05/26/98 13,882,575
22,000,000 Discount note........ 06/09/98 21,765,975
40,500,000 Discount note(a)..... 06/10/98 40,064,512
Sumitomo Corporation of America:
68,000,000 Discount note........ 04/08/98 67,920,842
15,000,000 Discount note........ 04/20/98 14,955,271
45,000,000 Discount note........ 05/06/98 44,752,569
20,000,000 Discount note........ 05/26/98 19,822,778
20,000,000 Discount note........ 06/09/98 19,770,000
25,000,000 Discount note........ 06/10/98 24,708,333
30,000,000 Discount note........ 07/29/98 29,446,650
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE> 29
NATIONS FUNDS
Nations Prime Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MATURITY
AMOUNT DATE VALUE
- -----------------------------------------------------------------
<C> <S> <C> <C>
COMMERCIAL PAPER -- DOMESTIC -- (CONTINUED)
</TABLE>
Sumitomo Corporation of America: (continued):
$ 36,000,000 Discount note........ 08/12/98 $ 35,259,190
15,000,000 Discount note........ 12/11/98 14,415,800
20,000,000 Tribune Company,
Discount note(a)..... 04/22/98 19,936,067
--------------
1,855,109,035
--------------
COMMERCIAL PAPER -- EURO -- 1.3%
40,000,000 Abby National Treasury
Services PLC, Dis-
count note........... 01/28/99 40,000,000
20,000,000 Burmah Castrol Fi-
nance PLC, Discount
note(a).............. 05/18/98 19,852,211
10,900,000 Toshiba International
Finance, (U.K.) PLC,
Discount note........ 05/29/98 10,803,414
--------------
70,655,625
--------------
CORPORATE BONDS & NOTES -- 25.8%
Associated Corporation of North America:
50,000,000 Discount note........ 04/08/98 49,945,847
10,000,000 5.250%............... 09/01/98 9,969,483
Bankers Trust Company of New York:
30,000,000 5.770%+(b)........... 04/01/98+++ 30,000,000
20,000,000 5.780%+(b)........... 04/01/98+++ 20,000,000
Bear Stearns & Company, Inc.:
60,000,000 5.780%+.............. 04/01/98+++ 60,000,000
50,000,000 5.664%+.............. 04/21/98+++ 50,000,000
25,000,000 5.575%+.............. 04/21/98+++ 25,000,000
30,000,000 CIT Group, Inc.,
6.500%............... 07/13/98 30,042,056
14,000,000 Chrysler Financial
Corporation,
6.210%............... 06/29/98 14,000,641
60,000,000 Comerica Bank,
5.728%+.............. 04/06/98+++ 59,994,020
285,000,000 Credit Suisse First
Boston Mortgage
Capital L.L.C.,
5.981%+(b)........... 04/01/98+++ 285,000,000
Goldman Sachs Group L.P.:
14,000,000 6.100%............... 04/15/98 13,999,355
50,000,000 5.687%+.............. 06/26/98+++ 50,000,000
Lehman Brothers Holdings Inc.:
100,000,000 5.840%+............. 04/01/98+++ 100,000,000
30,000,000 5.888%+.............. 04/07/98+++ 30,000,000
10,350,000 6.375%............... 06/01/98 10,355,738
60,000,000 5.720%............... 06/23/98+++ 60,000,000
6,000,000 6.250%............... 06/29/98 6,003,916
40,000,000 5.750%............... 03/26/99 40,000,000
Merrill Lynch & Company Inc.:
25,000,000 5.764%+.............. 04/01/98+++ 25,000,000
80,000,000 5.788%+.............. 04/07/98+++ 80,000,000
30,000,000 Morgan (J.P.) and
Company, Inc,
5.750%............... 03/10/99 30,000,000
40,000,000 Morgan Stanley Dean
Witter and Discover
Company,
5.5438%+............. 04/15/98+++ 39,993,887
41,755,000 Philip Morris Compa-
nies, Inc.,
7.3750%.............. 02/15/99 42,295,770
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
PRINCIPAL MATURITY
AMOUNT DATE VALUE
<C> <S> <C> <C>
CORPORATE BONDS & NOTES -- (CONTINUED)
PHH Corporation:
$ 50,000,000 5.710%+.............. 04/01/98+++ $ 49,991,130
40,000,000 5.788%+.............. 04/07/98+++ 40,000,000
70,000,000 5.986%............... 08/12/98 69,996,429
Societe Generale,
125,000,000 5.705%+.............. 04/01/98+++ 124,964,863
--------------
1,446,553,135
--------------
TOTAL CORPORATE OBLIGATIONS
(Cost $3,372,317,795)..........
3,372,317,795
==============
GUARANTEED INVESTMENT CONTRACTS -- 13.3%
50,000,000 Allstate Life Insurance Company,
5.792%**+............ 06/29/98# 50,000,000
Anchor National Life Insurance Company:
50,000,000 5.920%**+............ 06/29/98# 50,000,000
25,000,000 5.873%**+............ 06/29/98# 25,000,000
Commonwealth Life Insurance Company, Inc.:
50,000,000 5.910%**+............ 04/01/98+++ 50,000,000
72,000,000 5.850%**+............ 09/28/98# 72,000,000
50,000,000 First Allmerica Finan-
cial Life Insurance
Company,
5.700%**+............ 06/29/98# 50,000,000
General American Life Insurance Company:
50,000,000 5.830%**+............ 04/07/98# 50,000,000
50,000,000 5.830%**+............ 04/07/98# 50,000,000
60,000,000 Life Insurance Com-
pany of Georgia,
5.912%**+............ 09/28/98# 60,000,000
Life Insurance Company of Virginia:
50,000,000 5.595%**+............ 04/07/98# 50,000,000
50,000,000 5.595%**+............ 04/07/98# 50,000,000
50,000,000 New York Life Insur-
ance Company,
5.792%**+............ 04/07/98# 50,000,000
Peoples Security Life Insurance Company:
20,000,000 5.850%**+............ 04/01/98+++ 20,000,000
20,000,000 5.940%**+............ 09/28/98# 20,000,000
50,000,000 Sun Life Insurance
Company of America,
5.903%**+............ 09/28/98# 50,000,000
Travelers Life Insurance Company:
25,000,000 5.722%**+............ 04/01/98+++ 25,000,000
25,000,000 5.672%**+............ 05/01/98+++ 25,000,000
--------------
TOTAL GUARANTEED INVESTMENT
CONTRACTS
(Cost $747,000,000)............ 747,000,000
==============
MUNICIPAL BONDS -- 3.1%
28,800,000 Illinois (State of),
Student Assistance
Commission, First
National Bank of
Chicago LOC,
5.630%+.............. 04/07/98+++ 28,800,000
24,800,000 Indiana (State of),
Financing Authority,
Economic Develop-
ment Revenue, Qual-
itech Steel, National
City Bank, Indiana
LOC,
5.610%+.............. 04/07/98+++ 24,800,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE> 30
NATIONS FUNDS
Nations Prime Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MATURITY
AMOUNT DATE VALUE
- -----------------------------------------------------------------
<C> <S> <C> <C>
MUNICIPAL BONDS -- (CONTINUED)
$ 22,600,000 Missouri (State of),
Economic Develop-
ment Revenue, Ex-
port and
Infrastructure Board,
(Biocraft Laborato-
ries Inc. Project),
PNC Bank LOC,
5.650%+.............. 04/07/98+++ $ 22,600,000
100,000,000 Virginia (State of),
Housing Development
Authority,
5.550%+.............. 04/07/98+++ 100,000,000
--------------
TOTAL MUNICIPAL BONDS
(Cost $176,200,000)............ 176,200,000
==============
U.S. GOVERNMENT OBLIGATIONS -- 1.3%
Student Loan Marketing Association Floating Rate
Notes:
23,600,000 5.378%+............... 04/07/98+++ 23,590,313
47,500,000 5.398%+............... 04/07/98+++ 47,443,310
--------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS
(Cost $71,033,623)............. 71,033,623
==============
TIME DEPOSITS -- EURO -- 3.9% (Cost $220,000,000)
220,000,000 First National Bank of
Chicago,
6.125%............... 04/01/98 220,000,000
==============
REPURCHASE AGREEMENTS -- 5.3%
70,000,000 Agreement with ABN-Amro Bank,
6.100% dated 3/31/98 to be re-
purchased at $70,011,861 on
4/01/98 collateralized by:
$1,298,599 FMAC, 0.000% due
04/03/98; $70,101,400 GNMA,
5.500% -- 8.000% due
07/15/26 -- 02/20/27........... 70,000,000
65,000,000 Agreement with ABN-Amro Bank,
6.125% dated 3/31/98 to be re-
purchased at $65,011,059 on
4/01/98 collateralized by:
$20,256,801 FHLB, 6.600% due
03/25/05; $46,046,916 FMAC,
6.390% due 03/12/08............ 65,000,000
50,000,000 Agreement with ABN-Amro Bank,
6.200% dated 3/31/98 to be re-
purchased at $50,008,611 on
4/01/98 collateralized by:
$9,973,441 FHLB, 5.670% due
03/30/00; $10,005,874 FMAC,
6.800% due 03/10/08;
$31,021,065 FNMA, 0.000% --
6.400% due 03/10/00 --
07/09/12....................... 50,000,000
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
<C> <S> <C> <C>
REPURCHASE AGREEMENTS -- (CONTINUED)
$110,000,000 Agreement with Merrill Lynch
Securities, 6.250% dated
3/31/98 to be repurchased at
$110,019,097 on 4/01/98
collateralized by: $115,770,671
Qualified First Tier Money
Market Instruments, due
04/03/98 -- 04/29/98........... $ 110,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(Cost $295,000,000)............
295,000,000
==============
</TABLE>
<TABLE>
<CAPTION>
SHARES
- ------------
<C> <S> <C>
INVESTMENT COMPANIES -- 2.2%
93,995,000 AIM Liquid Asset Portfolio....... 93,995,000
11,676,000 AIM Prime Fund................... 11,676,000
17,158,000 Dreyfus Cash Management Plus
Fund............................ 17,158,000
--------------
TOTAL INVESTMENT COMPANIES
(Cost $122,829,000)............. 122,829,000
==============
TOTAL INVESTMENTS
(Cost $5,648,203,455*)................. 100.8% $5,648,203,455
OTHER ASSETS AND LIABILITIES (NET)...... (0.8) (47,334,700)
----- --------------
NET ASSETS.............................. 100.0% $5,600,868,755
===== ==============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
** Restricted security (Note 5).
+ Floating/variable rate note. The interest rate shown reflects the rate in
effect at March 31, 1998.
+++ Reset date. Interest rates reset either daily, weekly, monthly, quarterly or
semi-annually.
# Security subject to a demand feature which allows the Fund to put the
security back to the issuer from 7 to 180 calendar days.
(a) Securities are not registered under the Securities Act of 1933. These
securities may be resold in transactions exempt from registration to
qualified institutional buyers.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE> 31
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<S> <C>
Comprehensive Abbreviation Listing for all 3/31/98 Nations
Money Market Funds:
ABBREVIATIONS:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
CFC Cooperative Finance Corporation
FGIC Financial Guaranty Insurance Corporation
FHLB Federal Home Loan Bank
FMAC Federal Mortgage Acceptance Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National Mortgage Association
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
SBPA Standby Bond Purchase Agreement
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE> 32
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES MARCH 31, 1998
<TABLE>
<CAPTION>
GOVERNMENT
TAX EXEMPT TREASURY MONEY MARKET PRIME
---------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value, See accompanying schedules:
Securities............................................... $2,506,225,359 $ 629,799,559 $349,011,367 $5,353,203,455
Repurchase agreements.................................... -- 2,566,298,000 -- 295,000,000
-------------- -------------- ------------ --------------
Total investments...................................... 2,506,225,359 3,196,097,559 349,011,367 5,648,203,455
Cash....................................................... 46,889 294 790 236
Interest receivable........................................ 15,751,984 7,285,030 1,836,130 33,032,975
Dividend receivable........................................ 27,823 228,520 37,234 640,554
Receivable for Fund shares sold............................ 1,231,071 242,052 104,047 22,061,750
Prepaid expenses and other assets.......................... 41,830 172,249 5,703 46,751
-------------- -------------- ------------ --------------
Total Assets........................................... 2,523,324,956 3,204,025,704 350,995,271 5,703,985,721
-------------- -------------- ------------ --------------
LIABILITIES:
Payable for reverse repurchase agreements.................. -- 476,298,000 -- --
Payable for Fund shares redeemed........................... 5,382,060 572,502 717,657 19,251,639
Payable for investment securities purchased................ -- -- 18,989,037 67,971,066
Dividends payable.......................................... 5,200,323 4,214,513 1,012,256 13,467,149
Investment advisory fee payable............................ 310,648 415,654 33,228 889,732
Administration fee payable................................. 170,925 185,765 21,536 383,205
Shareholder servicing and distribution fees payable........ 127,465 588,573 25,458 634,686
Transfer agent fees payable................................ 45,422 18,539 15,917 80,130
Custodian fees payable..................................... 27,477 15,902 9,800 58,528
Accrued Trustees'/Directors' fees and expenses............. 98,499 136,918 32,464 233,759
Accrued expenses and other payables........................ 495,886 4,555 18,031 147,072
-------------- -------------- ------------ --------------
Total Liabilities...................................... 11,858,705 482,450,921 20,875,384 103,116,966
-------------- -------------- ------------ --------------
NET ASSETS................................................. $2,511,466,251 $2,721,574,783 $330,119,887 $5,600,868,755
============== ============== ============ ==============
Investments, at cost....................................... $2,506,225,359 $3,196,097,559 $349,011,367 $5,648,203,455
============== ============== ============ ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE> 33
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
GOVERNMENT
TAX EXEMPT TREASURY MONEY MARKET PRIME
------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSETS CONSIST OF:
Paid-in capital.......................................... $2,511,529,621 $2,721,609,452 $330,166,711 $5,601,143,886
Undistributed net investment income...................... 8,729 10,103 13,157 748
Accumulated net realized loss on investments sold........ (72,099) (44,772) (59,981) (275,879)
-------------- -------------- ------------ --------------
$2,511,466,251 $2,721,574,783 $330,119,887 $5,600,868,755
============== ============== ============ ==============
NET ASSETS:
Primary A Shares......................................... $2,001,083,327 $ 615,184,650 $217,506,129 $2,852,554,605
Primary B Shares......................................... 8,726,161 11,764,454 1,812,348 8,132,336
Investor A Shares........................................ 171,785,421 1,361,214,485 23,805,602 1,706,691,551
Investor B Shares........................................ 249,819,338 546,832,680 77,059,763 844,367,534
Investor C Shares........................................ 67,511,229 8,294,570 3,368,749 96,149,099
Daily Shares............................................. 12,540,775 178,283,944 6,567,296 92,973,630
SHARES OUTSTANDING:
Primary A Shares......................................... 2,001,340,701 615,231,877 217,538,926 2,853,094,315
Primary B Shares......................................... 8,727,283 11,765,357 1,812,621 8,133,875
Investor A Shares........................................ 171,807,516 1,361,318,985 23,809,191 1,707,014,234
Investor B Shares........................................ 249,851,469 546,874,661 77,071,383 844,526,472
Investor C Shares........................................ 67,519,912 8,295,206 3,369,257 96,167,288
Daily Shares............................................. 12,542,389 178,297,631 6,568,287 92,991,237
PRIMARY A SHARES:
Net asset value, offering and redemption price per
share.................................................. $1.00 $1.00 $1.00 $1.00
PRIMARY B SHARES:
Net asset value, offering and redemption price per
share.................................................. $1.00 $1.00 $1.00 $1.00
INVESTOR A SHARES:
Net asset value, offering and redemption price per
share.................................................. $1.00 $1.00 $1.00 $1.00
INVESTOR B SHARES:
Net asset value, offering and redemption price per
share.................................................. $1.00 $1.00 $1.00 $1.00
INVESTOR C SHARES:
Net asset value, offering and redemption price per
share.................................................. $1.00 $1.00 $1.00 $1.00
DAILY SHARES:
Net asset value, offering and redemption price per
share.................................................. $1.00 $1.00 $1.00 $1.00
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE> 34
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
GOVERNMENT
TAX EXEMPT TREASURY MONEY MARKET PRIME
--------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest.................................................... $80,937,411 $181,699,467 $19,269,435 $315,339,647
Dividends................................................... 376,726 4,419,832 459,575 5,314,184
----------- ------------ ----------- ------------
Total investment income................................. 81,314,137 186,119,299 19,729,010 320,653,831
----------- ------------ ----------- ------------
EXPENSES:
Investment advisory fee..................................... 8,722,460 6,687,610 1,422,543 11,227,974
Administration fee.......................................... 2,180,615 3,320,414 355,636 5,551,487
Transfer agent fees......................................... 314,522 507,261 81,536 895,532
Custodian fees.............................................. 124,474 211,179 35,109 340,494
Legal and audit fees........................................ 208,277 238,357 32,753 528,622
Trustees'/Directors' fees and expenses...................... 46,554 41,021 12,934 94,026
Interest expense (Note 6)................................... 35,347 -- -- --
Registration and filing fees................................ 479,176 209,160 108,341 7,519
Other....................................................... 171,348 252,470 43,979 758,901
----------- ------------ ----------- ------------
Subtotal................................................ 12,282,773 11,467,472 2,092,831 19,404,555
Shareholder servicing and distribution fees:
Primary B Shares.......................................... 26,714 67,921 41,993 145,320
Investor A Shares......................................... 439,245 4,040,791 86,324 4,815,033
Investor B Shares......................................... 453,492 1,891,737 105,609 1,577,256
Investor C Shares......................................... 115,616 25,041 7,557 219,261
Daily Shares.............................................. 68,120 757,015 35,046 356,426
Fees waived by investment adviser and administrator (Note
2)........................................................ (5,676,058) (1,507,754) (1,025,359) (2,698,467)
----------- ------------ ----------- ------------
Net expenses.............................................. 7,709,902 16,742,223 1,344,001 23,819,384
----------- ------------ ----------- ------------
NET INVESTMENT INCOME....................................... 73,604,235 169,377,076 18,385,009 296,834,447
----------- ------------ ----------- ------------
NET REALIZED GAIN/(LOSS) ON INVESTMENTS..................... 582 -- 1,588 (12,176)
------------ ------------ ----------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $73,604,817 $169,377,076 $18,386,597 $296,822,271
============ ============ =========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE> 35
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TAX EXEMPT TREASURY
------------------------------- -------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/98 3/31/97 3/31/98 3/31/97
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income........................... $ 73,604,235 $ 47,090,130 $ 169,377,076 $ 123,088,385
Net realized gain/(loss) on investments......... 582 (1,480) -- 18,200
-------------- -------------- -------------- --------------
Net increase in net assets resulting from
operations.................................... 73,604,817 47,088,650 169,377,076 123,106,585
Distributions to shareholders from net
investment income:
Primary A Shares.............................. (58,607,861) (35,293,502) (64,676,668) (42,850,726)
Primary B Shares.............................. (343,858) (380,490) (1,381,664) (3,347,375)
Investor A Shares............................. (4,959,936) (4,059,182) (57,323,213) (7,715,087)
Investor B Shares............................. (7,214,051) (5,532,546) (38,192,855) (68,532,266)
Investor C Shares............................. (2,075,866) (1,820,710) (506,797) (611,667)
Daily Shares.................................. (399,671) (3,700) (7,295,879) (31,264)
Net increase/(decrease) in net assets from Fund
share transactions:
Primary A Shares.............................. 816,719,738 105,546,666 (730,387,879) 524,546,725
Primary B Shares.............................. (4,423,874) 3,780,463 (43,404,299) 7,681,748
Investor A Shares............................. 26,464,331 16,923,712 641,941,258 629,610,623
Investor B Shares............................. 21,241,691 95,689,951 (426,417,552) (551,757,395)
Investor C Shares............................. 4,756,044 (3,982,155) (5,572,742) 5,084,728
Daily Shares.................................. 10,208,132 2,332,190 161,974,249 16,321,269
-------------- -------------- -------------- --------------
Net increase/(decrease) in net assets........... 874,969,636 220,289,347 (401,866,965) 631,505,898
NET ASSETS:
Beginning of period............................. 1,636,496,615 1,416,207,268 3,123,441,748 2,491,935,850
-------------- -------------- -------------- --------------
End of period................................... $2,511,466,251 $1,636,496,615 $2,721,574,783 $3,123,441,748
============== ============== ============== ==============
Undistributed net investment income at end of
period........................................ $ 8,729 $ 5,737 $ 10,103 $ 10,103
============== ============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE> 36
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET PRIME
---------------------------- -------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/98 3/31/97 3/31/98 3/31/97
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income............................ $18,385,009 $ 20,882,615 $ 296,834,447 $ 211,915,430
Net realized gain/(loss) on investments.......... 1,588 1,339 (12,176) 2,522
------------- ------------- -------------- --------------
Net increase in net assets resulting from
operations..................................... 18,386,597 20,883,954 296,822,271 211,917,952
Distributions to shareholders from net investment
income:
Primary A Shares............................... (13,732,183) (16,005,498) (181,469,352) (127,428,642)
Primary B Shares............................... (838,909) (1,068,560) (3,019,774) (9,968,081)
Investor A Shares.............................. (1,214,735) (1,292,731) (71,233,077) (53,311,689)
Investor B Shares.............................. (2,114,696) (2,383,399) (32,993,601) (17,025,636)
Investor C Shares.............................. (152,083) (98,717) (4,581,466) (4,133,462)
Daily Shares................................... (332,403) (33,710) (3,536,429) (47,920)
Net increase/(decrease) in net assets from Fund
share transactions:
Primary A Shares............................... (81,896,488) (37,373,510) 318,550,303 61,206,993
Primary B Shares............................... (17,640,454) (12,131,029) (175,906,446) 87,724,370
Investor A Shares.............................. 5,089,232 (30,027,577) 549,169,124 58,232,248
Investor B Shares.............................. 49,317,971 (34,870,084) 463,471,474 22,368,779
Investor C Shares.............................. 1,227,069 411,437 2,479,005 18,857,687
Daily Shares................................... (1,292,741) 7,858,911 83,980,404 8,970,359
------------- ------------- -------------- --------------
Net increase/(decrease) in net assets............ (45,193,823) (106,130,513) 1,241,732,436 257,362,958
NET ASSETS:
Beginning of year................................ 375,313,710 481,444,223 4,359,136,319 4,101,773,361
------------- ------------- -------------- --------------
End of year...................................... $330,119,887 $375,313,710 $5,600,868,755 $4,359,136,319
============ ============ ============== ==============
Undistributed net investment income at end of
year........................................... $ 13,157 $ 13,157 $ 748 $ --
============ ============ ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE> 37
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
TREASURY
---------------------------------
<S> <C> <C>
Cash flows from operating and investing activities:
Investment income received................................ $ 177,251,135
Payment of operating expenses............................. (16,739,202)
Net sales of short-term investments....................... 418,986,441
----------------
Cash provided by operating and investing activities......... $ 579,498,374
Cash flows from financing activities:
Proceeds from shares sold................................. 17,734,359,066
Payment for shares redeemed............................... (18,169,893,704)
Cash used from reverse repurchase agreement............... 4,377,000
Distributions paid*....................................... (148,340,792)
----------------
Cash used by financing activities........................... (579,498,430)
-------------
Increase in cash.......................................... (56)
Cash at beginning of year................................. 350
-------------
Cash at end of year....................................... $ 294
=============
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATIONS
TO CASH USED BY OPERATING AND INVESTING ACTIVITIES:
Net increase in net assets resulting from operations........ $ 169,377,076
Decrease in investments................................... $ 413,052,963
Increase in interest and dividends receivable............. (2,934,686)
Increase in other assets.................................. (112,667)
Increase in accrued expenses.............................. 115,688
----------------
Cash provided by operating and investing activities......... $ 579,498,374
=============
</TABLE>
- ---------------
* Non-cash activities include reinvestment of dividends of $25,381,283.
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE> 38
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULES OF CAPITAL STOCK ACTIVITY
Since the Funds have sold, issued as reinvestment of dividends and redeemed
shares only at a constant net asset value of $1.00 per share, the number of
shares represented by such sales, reinvestments and redemptions is the same as
the amounts shown below for such transactions.
<TABLE>
<CAPTION>
TAX EXEMPT TREASURY
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/98 3/31/97 3/31/98 3/31/97
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................... $1,930,602,765 $1,392,743,346 $1,681,502,144 $ 2,911,565,540
Issued in exchange for Pilot Shares of
Pilot (Note 8):
Short-Term U.S. Treasury Fund........... -- -- 1,227,238,960 --
Short-Term Tax Exempt
Diversified Fund...................... 374,107,166 -- -- --
Missouri Short-Term Tax Exempt Fund..... 194,197,068 -- -- --
Issued as reinvestment of dividends....... 1,081,562 754,137 356,222 256,531
Redeemed.................................. (1,683,268,823) (1,287,950,817) (3,639,485,205) (2,387,275,346)
--------------- --------------- --------------- ---------------
Net increase/(decrease)................... $ 816,719,738 $ 105,546,666 $ (730,387,879) $ 524,546,725
=============== =============== =============== ===============
PRIMARY B SHARES:
Sold...................................... $ 33,933,417 $ 83,563,210 $ 119,961,211 $ 425,279,678
Issued as reinvestment of dividends....... 155 -- 22,709 504
Redeemed.................................. (38,357,446) (79,782,747) (163,388,219) (417,598,435)
--------------- --------------- --------------- ---------------
Net increase/(decrease)................... $ (4,423,874) $ 3,780,463 $ (43,404,299) $ 7,681,747
=============== =============== =============== ===============
INVESTOR A SHARES:
Sold...................................... $ 531,649,317 $ 430,531,574 $3,672,011,775 $ 1,502,010,404
Issued as reinvestment of dividends....... 4,810,686 3,977,272 4,900,948 4,949,120
Redeemed.................................. (509,995,672) (417,585,134) (3,034,971,465) (877,348,901)
--------------- --------------- --------------- ---------------
Net increase.............................. $ 26,464,331 $ 16,923,712 $ 641,941,258 $ 629,610,623
=============== =============== =============== ===============
INVESTOR B SHARES:
Sold...................................... $ 726,067,456 $ 625,042,344 $8,652,480,866 $ 8,327,962,057
Issued in exchange for Administration
Shares of Pilot (Note 8):
Short-Term U.S. Treasury Fund........... -- -- 237,343,134 --
Short-Term Tax Exempt
Diversified Fund...................... 10,606,293 -- -- --
Missouri Short-Term Tax Exempt Fund..... 11,940,599 -- -- --
Issued as reinvestment of dividends....... 6,340,186 5,290,829 12,703,068 4,638,191
Redeemed.................................. (733,712,843) (534,643,222) (9,328,944,620) (8,884,357,643)
--------------- --------------- --------------- ---------------
Net increase/(decrease)................... $ 21,241,691 $ 95,689,951 $ (426,417,552) $ (551,757,395)
=============== =============== =============== ===============
INVESTOR C SHARES:
Sold...................................... $ 201,253,533 $ 166,459,636 $ 23,431,671 $ 31,620,194
Issued as reinvestment of dividends....... 2,046,021 1,807,813 510,290 608,852
Redeemed.................................. (198,543,510) (172,249,604) (29,514,703) (27,144,318)
--------------- --------------- --------------- ---------------
Net increase/(decrease)................... $ 4,756,044 $ (3,982,155) $ (5,572,742) $ 5,084,728
=============== =============== =============== ===============
DAILY SHARES:
Sold...................................... $ 185,934,872 $ 4,211,534 $1,965,123,241 $ 35,051,951
Issued in exchange for Investor Shares
of Pilot (Note 8):
Short-Term U.S. Treasury Fund........... -- -- 155,071,580 --
Short-Term Tax Exempt
Diversified Fund...................... 7,244,751 -- -- --
Missouri Short-Term Tax Exempt Fund..... 20,641,959 -- -- --
Issued as reinvestment of dividends....... 378,976 3,295 6,888,046 31,264
Redeemed.................................. (203,992,426) (1,882,639) (1,965,108,618) (18,761,946)
--------------- --------------- --------------- ---------------
Net increase.............................. $ 10,208,132 $ 2,332,190 $ 161,974,249 $ 16,321,269
=============== =============== =============== ===============
Total net increase/(decrease)............... $ 874,966,062 $ 220,290,827 $ (401,866,965) $ 631,487,697
=============== =============== =============== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE> 39
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
GOVERNMENT
MONEY MARKET PRIME
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/98 3/31/97 3/31/98 3/31/97
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold.................................................. $ 930,667,760 $ 507,243,378 $ 4,016,048,542 $ 2,571,909,421
Issued in exchange for Primary A
Shares of Peachtree (Note 8):
Prime Money Market Fund............................. -- -- -- 46,490,663
Government Money Market Fund........................ -- 31,477,446 -- --
Issued in exchange for Pilot Shares of
Pilot Short-Term Diversified Assets
Fund (Note 8)....................................... -- -- 1,539,898,718 --
Issued as reinvestment of dividends................... 67,037 3,017 4,159,111 852,265
Redeemed.............................................. (1,012,631,285) (576,097,351) (5,241,556,068) (2,558,045,356)
--------------- ------------- --------------- ---------------
Net increase/(decrease)............................... $ (81,896,488) $ (37,373,510) $ 318,550,303 $ 61,206,993
=============== ============= =============== ===============
PRIMARY B SHARES:
Sold.................................................. $ 136,817,242 $ 171,213,079 $ 294,928,676 $ 1,407,226,085
Issued as reinvestment of dividends................... -- -- 42,025 28,061
Redeemed.............................................. (154,457,696) (183,344,108) (470,877,147) (1,319,529,776)
--------------- ------------- --------------- ---------------
Net increase/(decrease)............................... $ (17,640,454) $ (12,131,029) $ (175,906,446) $ 87,724,370
=============== ============= =============== ===============
INVESTOR A SHARES:
Sold.................................................. $ 110,874,778 $ 87,140,427 $ 4,691,456,183 $ 3,809,109,741
Issued as reinvestment of dividends................... 1,153,566 1,257,952 68,507,970 51,501,048
Redeemed.............................................. (106,939,112) (118,425,956) (4,210,795,029) (3,802,378,541)
--------------- ------------- --------------- ---------------
Net increase/(decrease)............................... $ 5,089,232 $ (30,027,577) $ 549,169,124 $ 58,232,248
=============== ============= =============== ===============
INVESTOR B SHARES:
Sold.................................................. $ 362,572,100 $ 259,954,369 $ 4,419,706,688 $ 1,472,078,943
Issued in exchange for Administration Shares of Pilot
Short-Term Diversified Assets
Fund (Note 8)....................................... -- -- 239,008,251 --
Issued as reinvestment of dividends................... 1,792,687 1,641,684 28,891,561 13,460,877
Redeemed.............................................. (315,046,816) (296,466,137) (4,224,135,026) (1,463,171,041)
--------------- ------------- --------------- ---------------
Net increase/(decrease)............................... $ 49,317,971 $ (34,870,084) $ 463,471,474 $ 22,368,779
=============== ============= =============== ===============
INVESTOR C SHARES:
Sold.................................................. $ 6,191,345 $ 6,143,189 $ 232,101,957 $ 244,058,874
Issued as reinvestment of dividends................... 148,505 97,541 4,454,322 4,008,416
Redeemed.............................................. (5,112,781) (5,829,293) (234,077,274) (229,209,603)
--------------- ------------- --------------- ---------------
Net increase.......................................... $ 1,227,069 $ 411,437 $ 2,479,005 $ 18,857,687
=============== ============= =============== ===============
DAILY SHARES:
Sold.................................................. $ 119,962,209 $ 14,994,192 $ 611,272,891 $ 12,949,550
Issued in exchange for Investor Shares of
Pilot Short-Term Diversified Assets
Fund (Note 8)....................................... -- -- 75,676,121 --
Issued as reinvestment of dividends................... 324,125 22,229 3,483,214 47,920
Redeemed.............................................. (121,579,075) (7,157,510) (606,451,822) (4,027,111)
--------------- ------------- --------------- ---------------
Net increase/(decrease)............................... $ (1,292,741) $ 7,858,911 $ 83,980,404 $ 8,970,359
=============== ============= =============== ===============
Total net increase/(decrease)........................... $ (45,195,411) $(106,131,852) $ 1,241,743,864 $ 257,360,436
=============== ============= =============== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
35
<PAGE> 40
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS TOTAL
VALUE NET FROM NET DIVIDENDS
BEGINNING INVESTMENT INVESTMENT AND
OF YEAR INCOME INCOME DISTRIBUTIONS
------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX EXEMPT
PRIMARY A SHARES
Year ended 03/31/1998....................................... $1.00 $0.0345 $(0.0345) $(0.0345)
Year ended 03/31/1997....................................... 1.00 0.0324 (0.0324) (0.0324)
Period ended 03/31/1996(a).................................. 1.00 0.0112 (0.0112) (0.0112)
Year ended 11/30/1995....................................... 1.00 0.0361 (0.0361) (0.0361)
Year ended 11/30/1994....................................... 1.00 0.0257 (0.0257) (0.0257)
Year ended 11/30/1993....................................... 1.00 0.0223 (0.0223) (0.0223)
Year ended 11/30/1992....................................... 1.00 0.0267 (0.0267) (0.0267)
Year ended 11/30/1991....................................... 1.00 0.0422 (0.0422) (0.0422)
Year ended 11/30/1990....................................... 1.00 0.0550 (0.0550) (0.0550)
Year ended 11/30/1989....................................... 1.00 0.0600 (0.0600) (0.0600)
Period ended 11/30/1988*.................................... 1.00 0.0350 (0.0350) (0.0350)
PRIMARY B SHARES
Year ended 03/31/1998....................................... $1.00 $0.0320 $(0.0320) $(0.0320)
Year ended 03/31/1997....................................... 1.00 0.0300 (0.0300) (0.0300)
Period ended 03/31/1996(a).................................. 1.00 0.0104 (0.0104) (0.0104)
Year ended 11/30/1995....................................... 1.00 0.0335 (0.0335) (0.0335)
Period ended 11/30/1994*.................................... 1.00 0.0116 (0.0116) (0.0116)
INVESTOR A SHARES
Year ended 03/31/1998....................................... $1.00 $0.0316 $(0.0316) $(0.0316)
Year ended 03/31/1997....................................... 1.00 0.0300 (0.0300) (0.0300)
Period ended 03/31/1996(a).................................. 1.00 0.0104 (0.0104) (0.0104)
Year ended 11/30/1995....................................... 1.00 0.0335 (0.0335) (0.0335)
Year ended 11/30/1994....................................... 1.00 0.0231 (0.0231) (0.0231)
Year ended 11/30/1993....................................... 1.00 0.0198 (0.0198) (0.0198)
Year ended 11/30/1992....................................... 1.00 0.0266 (0.0266) (0.0266)
Period ended 11/30/1991*.................................... 1.00 0.0422 (0.0422) (0.0422)
INVESTOR B SHARES
Year ended 03/31/1998....................................... $1.00 $0.0325 $(0.0325) $(0.0325)
Year ended 03/31/1997....................................... 1.00 0.0307 (0.0307) (0.0307)
Period ended 03/31/1996(a).................................. 1.00 0.0106 (0.0106) (0.0106)
Year ended 11/30/1995....................................... 1.00 0.0342 (0.0342) (0.0342)
Period ended 11/30/1994*.................................... 1.00 0.0141 (0.0141) (0.0141)
INVESTOR C SHARES
Year ended 03/31/1998....................................... $1.00 $0.0323 $(0.0323) $(0.0323)
Year ended 03/31/1997....................................... 1.00 0.0311 (0.0311) (0.0311)
Period ended 03/31/1996(a).................................. 1.00 0.0107 (0.0107) (0.0107)
Year ended 11/30/1995....................................... 1.00 0.0346 (0.0346) (0.0346)
Period ended 11/30/1994*.................................... 1.00 0.0203 (0.0203) (0.0203)
DAILY SHARES
Year ended 03/31/1998....................................... $1.00 $0.0295 $(0.0295) $(0.0295)
Year ended 03/31/1997....................................... 1.00 0.0270 (0.0270) (0.0270)
Period ended 03/31/1996(a).................................. 1.00 0.0090 (0.0090) (0.0090)
Period ended 11/30/1995*.................................... 1.00 0.0243 (0.0243) (0.0243)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Tax Exempt's Primary A, Primary B, Investor A, Investor B,
Investor C and Daily Shares commenced operations on March
14, 1988, June 16, 1994, April 5, 1991, May 17, 1994, March
7, 1994 and February 10, 1995, respectively.
+ Annualized.
++ Total return represents aggregate total return for the
period indicated and does not reflect the deduction of any
applicable sales charges.
+++ Unaudited.
(a) Fiscal year end changed to March 31. Prior to this, the
fiscal year end was November 30.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36
<PAGE> 41
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING
VALUE END OF EXPENSES TO INCOME TO EXPENSES TO
END OF TOTAL YEAR AVERAGE AVERAGE AVERAGE
YEAR RETURN++ (IN 000'S) NET ASSETS NET ASSETS NET ASSETS
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$1.00 3.48% $2,001,083 0.30% 3.43% 0.56%
1.00 3.29 1,184,313 0.30 3.25 0.55
1.00 1.12 1,078,764 0.30+ 3.35+ 0.58+
1.00 3.68 905,125 0.30 3.62 0.57
1.00 2.60 820,677 0.27 2.59 0.59
1.00 2.27 701,403 0.23 2.23 0.59
1.00 2.70+++ 329,265 0.40 2.65 0.57
1.00 4.31+++ 168,829 0.42 4.23 0.60
1.00 5.63+++ 173,834 0.40 5.51 0.75
1.00 6.17+++ 145,109 0.40 6.00 0.74
1.00 3.55+++ 143,245 0.40+ 4.97+ 0.75+
$1.00 3.22% $ 8,726 0.55% 3.18% 0.81%
1.00 3.04 13,151 0.55 3.00 0.80
1.00 1.04 9,370 0.55+ 3.10+ 0.83+
1.00 3.39 11,666 0.55 3.37 0.82
1.00 1.17 18,207 0.52+ 2.34+ 0.84+
$1.00 3.20% $ 171,785 0.58% 3.15% 0.84%
1.00 3.04 145,337 0.55 3.00 0.80
1.00 1.04 128,414 0.55+ 3.10+ 0.83+
1.00 3.40 126,207 0.55 3.37 0.82
1.00 2.36 151,714 0.52 2.34 0.84
1.00 2.00 119,552 0.48 1.98 0.84
1.00 2.68+++ 80,158 0.55 2.50 0.72
1.00 4.30+++ 1,690 0.42+ 4.23+ 0.60+
$1.00 3.30% $ 249,819 0.50% 3.23% 0.76%
1.00 3.11 228,601 0.50 3.05 0.75
1.00 1.06 132,914 0.50+ 3.15+ 0.78+
1.00 3.47 86,374 0.50 3.42 0.77
1.00 1.43 3 0.47+ 2.39+ 0.79+
$1.00 3.26% $ 67,511 0.48% 3.25% 0.74%
1.00 3.15 62,761 0.45 3.10 0.70
1.00 1.07 66,743 0.45+ 3.20+ 0.73+
1.00 3.52 41,409 0.45 3.47 0.72
1.00 2.05 25,704 0.42+ 2.44+ 0.74+
$1.00 2.98% $ 12,541 0.80% 2.93% 1.06%
1.00 2.73 2,334 0.80 2.75 1.05
1.00 0.91 2 0.69+ 2.96+ 0.97+
1.00 2.61 2 0.45+ 3.47+ 0.72+
</TABLE>
37
<PAGE> 42
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS TOTAL
VALUE NET FROM NET DIVIDENDS
BEGINNING INVESTMENT INVESTMENT AND
OF YEAR INCOME INCOME DISTRIBUTIONS
------------------------------------------------------------
<S> <C> <C> <C> <C>
TREASURY
PRIMARY A SHARES
Year ended 03/31/1998....................................... $1.00 $0.0531 $(0.0531) $(0.0531)
Year ended 03/31/1997....................................... 1.00 0.0509 (0.0509) (0.0509)
Period ended 03/31/1996(a).................................. 1.00 0.0458 (0.0458)# (0.0458)
Year ended 05/31/1995....................................... 1.00 0.0494 (0.0494)# (0.0494)
Year ended 05/31/1994....................................... 1.00 0.0297 (0.0297) (0.0297)
Year ended 05/31/1993....................................... 1.00 0.0307 (0.0307) (0.0307)
Year ended 05/31/1992....................................... 1.00 0.0483 (0.0483) (0.0483)
Year ended 05/31/1991....................................... 1.00 0.0721 (0.0721) (0.0721)
Year ended 05/31/1990....................................... 1.00 0.0829 (0.0829) (0.0829)
Year ended 05/31/1989....................................... 1.00 0.0802 (0.0802) (0.0802)
Year ended 05/31/1988....................................... 1.00 0.0630 (0.0630) (0.0630)
PRIMARY B SHARES
Year ended 03/31/1998....................................... $1.00 $0.0506 $(0.0506) $(0.0506)
Year ended 03/31/1997....................................... 1.00 0.0484 (0.0484) (0.0484)
Period ended 03/31/1996(a).................................. 1.00 0.0437 (0.0437)# (0.0437)
Period ended 05/31/1995*.................................... 1.00 0.0449 (0.0449)# (0.0449)
INVESTOR A SHARES
Year ended 03/31/1998....................................... $1.00 $0.0496 $(0.0496) $(0.0496)
Year ended 03/31/1997....................................... 1.00 0.0474 (0.0474) (0.0474)
Period ended 03/31/1996(a).................................. 1.00 0.0429 (0.0429)# (0.0429)
Year ended 05/31/1995....................................... 1.00 0.0457 (0.0457)# (0.0457)
Year ended 05/31/1994....................................... 1.00 0.0262 (0.0262) (0.0262)
Year ended 05/31/1993....................................... 1.00 0.0272 (0.0272) (0.0272)
Year ended 05/31/1992....................................... 1.00 0.0448 (0.0448) (0.0448)
Period ended 05/31/1991*.................................... 1.00 0.0592 (0.0592) (0.0592)
INVESTOR B SHARES
Year ended 03/31/1998....................................... $1.00 $0.0506 $(0.0506) $(0.0506)
Year ended 03/31/1997....................................... 1.00 0.0484 (0.0484) (0.0484)
Period ended 03/31/1996(a).................................. 1.00 0.0437 (0.0437)# (0.0437)
Year ended 05/31/1995....................................... 1.00 0.0468 (0.0468)# (0.0468)
Period ended 05/31/1994*.................................... 1.00 0.0015 (0.0015) (0.0015)
INVESTOR C SHARES
Year ended 03/31/1998....................................... $1.00 $0.0506 $(0.0506) $(0.0506)
Year ended 03/31/1997....................................... 1.00 0.0484 (0.0484) (0.0484)
Period ended 03/31/1996(a).................................. 1.00 0.0437 (0.0437)# (0.0437)
Year ended 05/31/1995....................................... 1.00 0.0468 (0.0468)# (0.0468)
Period ended 05/31/1994*.................................... 1.00 0.0019 (0.0019) (0.0019)
DAILY SHARES
Year ended 03/31/1998....................................... $1.00 $0.0481 $(0.0481) $(0.0481)
Year ended 03/31/1997....................................... 1.00 0.0455 (0.0455) (0.0455)
Period ended 03/31/1996(a).................................. 1.00 0.0404 (0.0404) (0.0404)
Period ended 05/31/1995*.................................... 1.00 0.0167 (0.0167) (0.0167)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Treasury's Primary B, Investor A, Investor B, Investor C and
Daily Shares commenced operations on June 16, 1994, July 16,
1990, May 16, 1994, May 11, 1994 and February 9, 1995,
respectively.
+ Annualized.
++ Total return represents aggregate total return for the
period indicated and does not reflect the deduction of any
applicable sales charges.
+++ Unaudited.
# Amount includes distributions from net realized gains of
less than $0.0001 per share.
(a) Fiscal year end changed to March 31. Prior to this, the
fiscal year end was May 31.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE> 43
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING
VALUE END OF EXPENSES TO INCOME TO EXPENSES TO
END OF TOTAL YEAR AVERAGE AVERAGE AVERAGE
YEAR RETURN++ (IN 000'S) NET ASSETS NET ASSETS NET ASSETS
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1.00 5.43% $ 615,185 0.30% 5.31% 0.35%
1.00 5.22 1,345,585 0.30 5.09 0.35
1.00 4.67 821,030 0.30+ 5.52+ 0.37+
1.00 5.05 2,896,868 0.30 4.99 0.35
1.00 2.99 2,679,992 0.30 2.97 0.36
1.00 3.12 2,956,796 0.30 3.02 0.36
1.00 4.95+++ 1,094,741 0.29 4.82 0.42
1.00 7.46+++ 955,186 0.25 7.04 0.43
1.00 8.61+++ 392,843 0.25 8.18 0.59+++
1.00 8.33+++ 90,946 0.39 7.93 0.58+++
1.00 6.49+++ 111,414 0.38 6.31 0.65+++
1.00 5.18% $ 11,764 0.55% 5.06% 0.60%
1.00 4.96 55,170 0.55 4.84 0.60
1.00 4.46 47,488 0.55+ 5.27+ 0.62+
1.00 4.56 56,815 0.55+ 4.74+ 0.60+
1.00 5.06% $1,361,214 0.65% 4.96% 0.70%
1.00 4.85 719,199 0.65 4.74 0.70
1.00 4.36 89,584 0.65 5.17 0.72+
1.00 4.65 107,475 0.67 4.62 0.72
1.00 2.67 74,195 0.65 2.62 0.71
1.00 2.77 105,828 0.65 2.67 0.71
1.00 4.57+++ 90,917 0.64 4.47 0.76
1.00 6.98+++ 37,265 0.61+ 6.53+ 0.83+
1.00 5.18% $ 546,833 0.55% 5.06% 0.60%
1.00 4.96 973,297 0.55 4.84 0.60
1.00 4.46 1,525,048 0.55+ 5.27+ 0.62+
1.00 4.76 52,564 0.56 4.73 0.61
1.00 0.14 2 0.55+ 2.72+ 0.61+
1.00 5.18% $ 8,295 0.55% 5.06% 0.60%
1.00 4.96 13,868 0.55 4.84 0.60
1.00 4.46 8,783 0.55+ 5.27+ 0.62+
1.00 4.76 6,373 0.56 4.73 0.61
1.00 0.19 191 0.55+ 2.72+ 0.61+
1.00 4.92% $ 178,284 0.80% 4.81% 0.85%
1.00 4.66 16,323 0.80 4.59 0.85
1.00 4.09 2 0.64+ 5.18+ 0.71+
1.00 1.67 2 0.55+ 4.74+ 0.60+
</TABLE>
39
<PAGE> 44
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS TOTAL
VALUE NET FROM NET DIVIDENDS
BEGINNING INVESTMENT INVESTMENT AND
OF YEAR INCOME INCOME DISTRIBUTIONS
------------------------------------------------------
<S> <C> <C> <C> <C>
GOVERNMENT MONEY MARKET
PRIMARY A SHARES
Year ended 03/31/1998....................................... $1.00 $0.0524 $(0.0524) $(0.0524)
Year ended 03/31/1997....................................... 1.00 0.0503 (0.0503) (0.0503)
Period ended 03/31/1996(a).................................. 1.00 0.0173 (0.0173) (0.0173)
Year ended 11/30/1995....................................... 1.00 0.0558 (0.0558) (0.0558)
Year ended 11/30/1994....................................... 1.00 0.0375 (0.0375)# (0.0375)
Year ended 11/30/1993....................................... 1.00 0.0294 (0.0294) (0.0294)
Year ended 11/30/1992....................................... 1.00 0.0358 (0.0358) (0.0358)
Period ended 11/30/1991*.................................... 1.00 0.0571 (0.0571) (0.0571)
PRIMARY B SHARES
Year ended 03/31/1998....................................... $1.00 $0.0499 $(0.0499) $(0.0499)
Year ended 03/31/1997....................................... 1.00 0.0478 (0.0478) (0.0478)
Period ended 03/31/1996(a).................................. 1.00 0.0165 (0.0165) (0.0165)
Year ended 11/30/1995....................................... 1.00 0.0533 (0.0533) (0.0533)
Period ended 11/30/1994*.................................... 1.00 0.0200 (0.0200)# (0.0200)
INVESTOR A SHARES
Year ended 03/31/1998....................................... $1.00 $0.0489 $(0.0489) $(0.0489)
Year ended 03/31/1997....................................... 1.00 0.0468 (0.0468) (0.0468)
Period ended 03/31/1996(a).................................. 1.00 0.0162 (0.0162) (0.0162)
Year ended 11/30/1995....................................... 1.00 0.0522 (0.0522) (0.0522)
Year ended 11/30/1994....................................... 1.00 0.0340 (0.0340)# (0.0340)
Year ended 11/30/1993....................................... 1.00 0.0256 (0.0256) (0.0256)
Year ended 11/30/1992....................................... 1.00 0.0358 (0.0358) (0.0358)
Period ended 11/30/1991*.................................... 1.00 0.0571 (0.0571) (0.0571)
INVESTOR B SHARES
Year ended 03/31/1998....................................... $1.00 $0.0499 $(0.0499) $(0.0499)
Year ended 03/31/1997....................................... 1.00 0.0478 (0.0478) (0.0478)
Period ended 03/31/1996(a).................................. 1.00 0.0165 (0.0165) (0.0165)
Year ended 11/30/1995....................................... 1.00 0.0532 (0.0532) (0.0532)
Period ended 11/30/1994*.................................... 1.00 0.0222 (0.0222)# (0.0222)
INVESTOR C SHARES
Year ended 03/31/1998....................................... $1.00 $0.0499 $(0.0499) $(0.0499)
Year ended 03/31/1997....................................... 1.00 0.0478 (0.0478) (0.0478)
Period ended 03/31/1996(a).................................. 1.00 0.0165 (0.0165) (0.0165)
Year ended 11/30/1995....................................... 1.00 0.0532 (0.0532) (0.0532)
Period ended 11/30/1994*.................................... 1.00 0.0290 (0.0290)# (0.0290)
DAILY SHARES
Year ended 03/31/1998....................................... $1.00 $0.0474 $(0.0474) $(0.0474)
Year ended 03/31/1997....................................... 1.00 0.0453 (0.0453) (0.0453)
Period ended 03/31/1996(a).................................. 1.00 0.0157 (0.0157) (0.0157)
Period ended 11/30/1995*.................................... 1.00 0.0418 (0.0418) (0.0418)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Government Money Market's Primary A, Primary B, Investor A,
Investor B, Investor C and Daily Shares commenced operations
on December 3, 1990, June 16, 1994, February 11, 1991, May
17, 1994, March 21, 1994 and February 10, 1995,
respectively.
+ Annualized.
++ Total return represents aggregate total return for the
period indicated and does not reflect the deduction of any
applicable sales charges.
+++ Unaudited.
# Amount includes distributions from net realized gains of
less than $0.0001 per share.
(a) Fiscal year end changed to March 31. Prior to this, the
fiscal year end was November 30.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
40
<PAGE> 45
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING
VALUE END OF EXPENSES TO INCOME TO EXPENSES TO
END OF TOTAL YEAR AVERAGE AVERAGE AVERAGE
YEAR RETURN++ (IN 000'S) NET ASSETS NET ASSETS NET ASSETS
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$1.00 5.39% $217,506 0.30% 5.25% 0.59%
1.00 5.18 299,394 0.30 5.03 0.57
1.00 1.74 336,771 0.30+ 5.20+ 0.59+
1.00 5.72 332,895 0.30 5.58 0.57
1.00 3.84 432,729 0.30 3.79 0.59
1.00 2.96 475,180 0.30 2.91 0.56
1.00 3.63+++ 414,412 0.42 3.55 0.58
1.00 5.87+++ 333,979 0.43+ 5.49+ 0.62+
$1.00 5.12% $ 1,812 0.55% 5.00% 0.84%
1.00 4.93 19,450 0.55 4.78 0.82
1.00 1.66 31,581 0.55+ 4.95+ 0.84+
1.00 5.45 27,122 0.55 5.33 0.82
1.00 2.02 72,747 0.55+ 3.54+ 0.84+
$1.00 5.01% $ 23,806 0.65% 4.90% 0.94%
1.00 4.80 18,717 0.65 4.68 0.92
1.00 1.62 48,742 0.65+ 4.85+ 0.94+
1.00 5.34 26,175 0.65 5.23 0.92
1.00 3.45 20,173 0.65 3.44 0.94
1.00 2.60 10,499 0.61 2.60 0.87
1.00 3.63+++ 13,851 0.42 3.55 0.58
1.00 5.86+++ 8,949 0.43+ 5.49+ 0.62+
$1.00 5.12% $ 77,060 0.55% 5.00% 0.84%
1.00 4.93 27,750 0.55 4.78 0.82
1.00 1.66 62,617 0.55+ 4.95+ 0.84+
1.00 5.45 27,079 0.55 5.33 0.82
1.00 2.24 11,955 0.55+ 3.54+ 0.84+
$1.00 5.12% $ 3,369 0.55% 5.00% 0.84%
1.00 4.93 2,142 0.55 4.78 0.82
1.00 1.66 1,731 0.55+ 4.95+ 0.84+
1.00 5.44 4,414 0.55 5.33 0.82
1.00 2.94 476 0.55+ 3.54+ 0.84+
$1.00 4.85% $ 6,567 0.80% 4.75% 1.09%
1.00 4.63 7,860 0.80 4.53 1.07
1.00 1.58 2 0.71+ 4.79+ 1.00+
1.00 4.38 2 0.55+ 5.33+ 0.82+
</TABLE>
41
<PAGE> 46
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS TOTAL
VALUE NET FROM NET DIVIDENDS
BEGINNING INVESTMENT INVESTMENT AND
OF YEAR INCOME INCOME DISTRIBUTIONS
------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIME
PRIMARY A SHARES
Year ended 03/31/1998....................................... $1.00 $0.0547 $(0.0547) $(0.0547)
Year ended 03/31/1997....................................... 1.00 0.0520 (0.0520) (0.0520)
Period ended 03/31/1996(a).................................. 1.00 0.0468 (0.0468) (0.0468)
Year ended 05/31/1995....................................... 1.00 0.0519 (0.0519) (0.0519)
Year ended 05/31/1994....................................... 1.00 0.0318 (0.0318) (0.0318)
Year ended 05/31/1993....................................... 1.00 0.0328 (0.0328) (0.0328)
Year ended 05/31/1992....................................... 1.00 0.0506 (0.0506) (0.0506)
Year ended 05/31/1991....................................... 1.00 0.0749 (0.0749) (0.0749)
Year ended 05/31/1990....................................... 1.00 0.0855 (0.0855) (0.0855)
Year ended 05/31/1989....................................... 1.00 0.0839 (0.0839) (0.0839)
Year ended 05/31/1988....................................... 1.00 0.0675 (0.0675) (0.0675)
PRIMARY B SHARES
Year ended 03/31/1998....................................... $1.00 $0.0522 $(0.0522) $(0.0522)
Year ended 03/31/1997....................................... 1.00 0.0495 (0.0495) (0.0495)
Period ended 03/31/1996(a).................................. 1.00 0.0447 (0.0447) (0.0447)
Period ended 05/31/1995*.................................... 1.00 0.0474 (0.0474) (0.0474)
INVESTOR A SHARES
Year ended 03/31/1998....................................... $1.00 $0.0512 $(0.0512) $(0.0512)
Year ended 03/31/1997....................................... 1.00 0.0485 (0.0485) (0.0485)
Period ended 03/31/1996(a).................................. 1.00 0.0438 (0.0438) (0.0438)
Year ended 05/31/1995....................................... 1.00 0.0475 (0.0475) (0.0475)
Year ended 05/31/1994....................................... 1.00 0.0283 (0.0283) (0.0283)
Year ended 05/31/1993....................................... 1.00 0.0293 (0.0293) (0.0293)
Year ended 05/31/1992....................................... 1.00 0.0470 (0.0470) (0.0470)
Period ended 05/31/1991*.................................... 1.00 0.0617 (0.0617) (0.0617)
INVESTOR B SHARES
Year ended 03/31/1998....................................... $1.00 $0.0522 $(0.0522) $(0.0522)
Year ended 03/31/1997....................................... 1.00 0.0495 (0.0495) (0.0495)
Period ended 03/31/1996(a).................................. 1.00 0.0447 (0.0447) (0.0447)
Year ended 05/31/1995....................................... 1.00 0.0493 (0.0493) (0.0493)
Period ended 05/31/1994*.................................... 1.00 0.0015 (0.0015) (0.0015)
INVESTOR C SHARES
Year ended 03/31/1998....................................... $1.00 $0.0522 $(0.0522) $(0.0522)
Year ended 03/31/1997....................................... 1.00 0.0495 (0.0495) (0.0495)
Period ended 03/31/1996(a).................................. 1.00 0.0447 (0.0447) (0.0447)
Year ended 05/31/1995....................................... 1.00 0.0493 (0.0493) (0.0493)
Period ended 05/31/1994*.................................... 1.00 0.0155 (0.0155) (0.0155)
DAILY SHARES
Year ended 03/31/1998....................................... $1.00 $0.0497 $(0.0497) $(0.0497)
Year ended 03/31/1997....................................... 1.00 0.0470 (0.0470) (0.0470)
Period ended 03/31/1996(a).................................. 1.00 0.0439 (0.0439) (0.0439)
Period ended 05/31/1995*.................................... 1.00 0.0173 (0.0173) (0.0173)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Prime's Primary B, Investor A, Investor B, Investor C and
Daily Shares commenced operations on June 16, 1994, July 16,
1990, May 11, 1994, November 26, 1993 and February 9, 1995,
respectively.
+ Annualized.
++ Total return represents aggregate total return for the
period indicated and does not reflect the deduction of any
applicable sales charges.
+++ Unaudited.
(a) Fiscal year end changed to March 31. Prior to this, the
fiscal year end was May 31.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
42
<PAGE> 47
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING
VALUE END OF EXPENSES TO INCOME TO EXPENSES TO
END OF TOTAL YEAR AVERAGE AVERAGE AVERAGE
YEAR RETURN++ (IN 000'S) NET ASSETS NET ASSETS NET ASSETS
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$1.00 5.61% $2,852,555 0.30% 5.48% 0.35%
1.00 5.34 2,533,688 0.30 5.21 0.35
1.00 4.79 2,472,469 0.30+ 5.62+ 0.37+
1.00 5.32 2,873,096 0.30 5.23 0.38
1.00 3.22 2,883,762 0.30 3.20 0.37
1.00 3.33 1,156,266 0.30 3.25 0.36
1.00 5.19+++ 500,476 0.30 5.03 0.42
1.00 7.75+++ 574,993 0.30 7.47 0.44
1.00 8.88+++ 433,298 0.32 8.43 0.50+++
1.00 8.71+++ 115,295 0.35 8.11 0.55+++
1.00 6.94+++ 264,063 0.36 6.73 0.56+++
$1.00 5.34% $ 8,132 0.55% 5.23% 0.60%
1.00 5.05 184,021 0.55 4.96 0.60
1.00 4.57 96,305 0.55+ 5.37+ 0.62+
1.00 4.84 126,120 0.55+ 4.98+ 0.63+
$1.00 5.24% $1,706,692 0.65% 5.13% 0.70%
1.00 4.96 1,157,724 0.65 4.86 0.70
1.00 4.48 1,099,490 0.65+ 5.27+ 0.72+
1.00 4.85 698,358 0.75 4.78 0.83
1.00 2.86 511,833 0.65 2.85 0.72
1.00 2.97 306,376 0.65 2.90 0.71
1.00 4.81+++ 281,101 0.65 4.67 0.77
1.00 7.31+++ 144,202 0.65+ 6.69+ 0.79+
$1.00 5.34% $ 844,368 0.55% 5.23% 0.60%
1.00 5.05 381,015 0.55 4.96 0.60
1.00 4.57 358,646 0.55+ 5.37+ 0.62+
1.00 5.03 216,973 0.56 4.97 0.64
1.00 0.15 2 0.55+ 2.95+ 0.62+
$1.00 5.34% $ 96,149 0.55% 5.23% 0.60%
1.00 5.05 93,678 0.55 4.96 0.60
1.00 4.57 74,822 0.55+ 5.37+ 0.62+
1.00 5.03 53,451 0.56 4.97 0.64
1.00 1.58 1,481 0.55+ 2.95+ 0.62+
$1.00 5.08% $ 92,974 0.80% 4.98% 0.85%
1.00 4.80 9,010 0.80 4.71 0.85
1.00 4.49 40 0.67+ 5.25+ 0.74+
1.00 1.74 2 0.55+ 4.98+ 0.63+
</TABLE>
43
<PAGE> 48
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Nations Fund Trust (the "Trust") and Nations Fund, Inc. (the "Company") are each
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end investment company. At March 31, 1998, the Trust offered
thirty-seven separate portfolios and the Company offered nine separate
portfolios. Information presented in these financial statements pertains only to
the money market portfolios of the Trust and the Company (each a "Fund" and
collectively, the "Funds"). The financial statements for the other portfolios of
the Trust and the Company are presented under separate cover. The Funds
currently offer six classes of shares: Primary A Shares, Primary B Shares,
Investor A Shares, Investor B Shares, Investor C Shares and Daily Shares. Each
class of shares of a Fund has identical voting rights (except shareholders of a
class have exclusive voting rights on matters that relate solely to that class),
dividend, liquidation and other rights, except each class bears different
shareholder servicing and distribution plan fees.
1. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Funds in the preparation of
their financial statements.
Securities Valuation: Securities are valued on the basis of amortized cost,
which approximates market value. Amortized cost valuation involves initially
valuing an instrument at its cost and thereafter assuming a constant
amortization to maturity of any discount or premium, as long as the effect of
fluctuating interest rates on the market value of the instrument is not
significant. Restricted securities and certain other assets are valued by the
investment adviser under the supervision of the Board of Trustees/Directors.
Repurchase Agreements: Each Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the collateral is at
least equal at all times to the total amount of the repurchase obligations,
including interest. Generally, in the event of counterparty default, the Fund
has the right to use the collateral to offset losses incurred. There would be a
potential loss to the Fund in the event the Fund is delayed or prevented from
exercising its right to dispose of the collateral securities, including the risk
of a possible decline in the value of the underlying securities during the
period while the Fund seeks to assert its right. The Funds' investment adviser
and sub-adviser acting under the supervision of the Board of Trustees/Directors,
monitor the value of collateral received as well as the creditworthiness of
those banks and dealers with which the Funds enter into repurchase agreements to
evaluate potential risks.
Reverse Repurchase Agreements: Each Fund may enter into reverse repurchase
agreements with institutions that the Fund's investment adviser and sub-adviser
have determined are creditworthy. Under the terms of a typical reverse
repurchase agreement, the Fund sells securities and agrees to repurchase them at
a mutually agreed upon date and price. At the time the Fund enters into a
reverse repurchase agreement, it establishes a segregated account with its
custodian bank in which it will maintain cash, U.S. Government securities or
other appropriate liquid securities at least equal in value to the Fund's
obligations arising under the reverse repurchase agreement. Reverse repurchase
agreements involve the risk that the market value of the securities purchased
with the proceeds from the sale of securities received by the Fund may decline
below the price of the securities that the Fund is obligated to repurchase.
Securities subject to repurchase under reverse repurchase agreements are
designated in the Schedule of Investments.
At March 31, 1998, the Treasury Fund had reverse repurchase agreements
outstanding as follows:
<TABLE>
<S> <C>
Maturity Amount....................... $476,298,000
Maturity Date......................... 07/01/98
Market Value of Assets Sold Under
Agreements.......................... $470,607,821
</TABLE>
44
<PAGE> 49
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The average daily balance of reverse repurchase agreements outstanding by the
Treasury Fund during the year ended March 31, 1998 was $514,691,170.
The proceeds received by the Treasury Fund under the reverse repurchase
agreements were reinvested in a tri-party repurchase agreement. Net fees earned
during the year ended March 31, 1998, representing the difference between
interest rates on the reverse repurchase and repurchase agreements, amounted to
$762,124 and have been included in interest income in the Statement of
Operations.
Securities Transactions and Investment Income: Securities transactions are
accounted for on a trade date basis. Realized gains and losses are computed
based on the specific identification of the securities sold. Interest income,
adjusted for accretion of discounts and amortization of premiums calculated
ratably, is earned from the settlement date and is recorded on the accrual
basis. Dividend income is recorded on the ex-dividend date. Each Fund's
investment income and realized and unrealized gains and losses are allocated
among its classes based upon the relative net assets of each class of shares.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date.
Dividends and Distributions to Shareholders: It is the policy of each Fund to
declare dividends daily from net investment income and to pay such dividends
monthly. Each Fund will distribute net realized short-term capital gains
annually after the fiscal year in which the capital gains were earned or more
frequently to maintain a net asset value of $1.00 per share, unless offset by
any available capital loss carryforward. Income distributions and capital gain
distributions on a Fund level are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
Certain reclassifications are made to each Fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryforwards) under Federal income tax regulations. Reclassifications for the
year ended March 31, 1998 were as follows:
<TABLE>
<CAPTION>
INCREASE (DECREASE)
INCREASE (DECREASE) ACCUMULATED NET
PAID-IN CAPITAL REALIZED LOSS
-----------------------------------------
<S> <C> <C>
Prime...................... (206,093) 206,093
Treasury................... 6,018 (6,018)
Tax Exempt................. 2,268 (2,268)
</TABLE>
Federal Income Tax: Each Fund intends to qualify as a regulated investment
company by complying with the requirements of the Internal Revenue Code of 1986,
as amended, applicable to regulated investment companies and by distributing
substantially all of its earnings to its shareholders. Therefore, no Federal
income or excise tax provision is applicable.
Expenses: General expenses of the Trust or the Company are allocated to the
relevant Funds based upon relative net assets. Operating expenses directly
attributable to a Fund or class of shares are charged to such Fund's or class's
operations. Expenses of each Fund not directly attributable to the operations of
any class of shares are prorated among the classes based on the relative net
assets of each class of shares.
Cash Flow Information: Cash, as used in the Statement of Cash Flows, is the
amount reported in the Statements of Assets and Liabilities and represents cash
on hand at custodian banks. The Trust and the Company issue and redeem shares,
invest in securities, and distribute dividends from net investment income and
net capital gains (which are either paid in cash or reinvested at the discretion
of shareholders). These activities are reported in the Statements of Changes in
Net Assets. Information on cash payments is presented in the Statement of Cash
Flows.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS
Each of the Trust and the Company has, on behalf of its Funds, entered into an
investment advisory agreement (the "Investment Advisory Agreements") with
NationsBanc Advisors, Inc. ("NBAI"), a wholly-owned subsidiary of NationsBank,
N.A., ("NationsBank"), pursuant to which NBAI provides investment advisory
services to the Funds. Under the terms of the Investment Advisory Agreements,
NBAI is entitled to receive a fee which is calculated daily and paid monthly
based on the average daily net assets as follows: (i) Government Money Market
and Tax Exempt at the annual rate of 0.40% and (ii) Prime and Treasury at the
annual rate of 0.25% on combined net assets up to $250 million and 0.20% on
combined net assets exceeding $250 million.
Each of the Trust and the Company has, on behalf of its Funds, entered into a
sub-advisory agreement with
45
<PAGE> 50
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NBAI and TradeStreet Investment Associates, Inc. ("TradeStreet"), a wholly-owned
subsidiary of NationsBank, pursuant to which TradeStreet is entitled to receive
a sub-advisory fee from NBAI at the annual rate of 0.055% of each Fund's average
daily net assets.
Stephens Inc. ("Stephens") serves as the administrator of the Trust and the
Company. First Data Investor Services Group, Inc. ("First Data"), a wholly-owned
subsidiary of First Data Corporation, serves as the co-administrator of the
Trust and the Company. Stephens and First Data are entitled to receive a
combined fee, computed daily and paid monthly, at the annual rate of 0.10% of
the average daily net assets of the Funds. Effective November 17, 1997, NBAI
became the sub-administrator of the Trust and the Company pursuant to a sub-
administration agreement with Stephens. Prior to that date, NationsBank served
as sub-administrator. For the year ended March 31, 1998, Stephens earned
$8,321,522, net of fee waivers, from the Funds for its administration services,
of which $770,061 and $370,754 was paid to NationsBank and NBAI, respectively,
for their services as sub-administrator.
The investment adviser, sub-adviser and administrator may, from time to time,
reduce their fees payable by each Fund. For the year ended March 31, 1998, fees
waived were as follows:
<TABLE>
<CAPTION>
FEES WAIVED FEES WAIVED
BY ADVISER BY ADMINISTRATOR
------------------------------
<S> <C> <C>
Tax Exempt.......................... $5,239,935 $ 436,123
Treasury............................ 843,672 664,082
Government Money Market............. 954,231 71,128
Prime............................... 1,588,170 1,110,297
</TABLE>
NationsBank of Texas, N.A. ("NationsBank of Texas") served as the custodian of
the Trust's and the Company's assets for the year ended March 31, 1998, and
earned $26,621 for providing such services. The Bank of New York ("BONY") has
entered into an agreement with each of the Funds and NationsBank of Texas,
whereby BONY serves as sub-custodian for the Funds. For the year ended March 31,
1998, expenses of the Funds were reduced by $18,349 under expense offset
arrangements with BONY. The Funds could have invested a portion of the assets
utilized in connection with the expense offset arrangements in an income
producing asset if they had not entered into such arrangements.
First Data also serves as the transfer agent for the Funds' shares. NationsBank
of Texas also served as the sub-transfer agent for the Primary Shares of the
Funds for the year ended March 31, 1998, and earned approximately $21,032 for
providing such services. Stephens also serves as distributor of the Funds'
shares.
The Trust and the Company pay each unaffiliated Trustee or Director an annual
fee of $1,000 ($3,000 for the Chairman of the Board), plus $500 per Fund and an
additional $1,000 for each in-person board meeting and $500 for each telephonic
board meeting attended. The Trust and the Company also reimburse expenses
incurred by each unaffiliated Trustee or Director in attending such meetings.
The Trust's and the Company's eligible Trustees or Directors, respectively, may
participate in non-qualified deferred compensation and retirement plans which
may be terminated at any time. All benefits provided under these plans are
unfunded and any payments to plan participants are paid solely out of the Funds'
assets. Income earned on each plan participant's deferral account is tied to the
rate of return of the eligible mutual funds selected by the participants or, if
no funds are selected, to the rate of return of the Treasury Fund. The expense
for the deferred compensation and retirement plans is included in
"Trustees'/Directors' fees and expenses" in the Statements of Operations.
A significant portion of each Fund's Primary A Shares represent investments by
fiduciary accounts over which NationsBank N.A. has either sole or joint
investment discretion.
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS
The Trust and the Company each have adopted shareholder servicing plans and
distribution plans for the Primary B, Investor B, Investor C and Daily Shares of
each Fund. The shareholder servicing plans permit the Funds to compensate or
reimburse servicing agents for shareholder services provided by the servicing
agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940
Act, permit the Fund to compensate or reimburse the distributor (and for
Investor A Shares, the distributor and/or selling agents) for activities or
expenses primarily intended to result in the sale of the classes' shares.
Payments are made at an annual rate, as a percentage of average
46
<PAGE> 51
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
daily net assets set from time to time by the Board of Trustees/Directors, and
are charged as expenses of each Fund directly to the applicable class. A
substantial portion of the expenses pursuant to these plans are paid to
affiliates of NationsBank and NBAI.
At March 31, 1998, the actual rates in effect and plan limits, as a percentage
of average daily net assets, were as follows:
<TABLE>
<CAPTION>
ACTUAL RATE PLAN LIMIT
------------------------
<S> <C> <C>
Primary B, Investor A, Investor C and Daily
Shareholder Servicing Plans*.............. 0.25% 0.25%
Investor B Shareholder Servicing Plan
Prime, Treasury, Government Money
Market.................................. 0.25% 0.25%
Tax Exempt.............................. 0.20% 0.25%
Investor A Distribution Plan**............. 0.10% 0.10%
Investor B Distribution Plan............... 0.00% 0.10%
Daily Distribution Plan.................... 0.25% 0.45%
</TABLE>
* The Investor C Shareholder Servicing Plan reflects a rate change from 0.15%
effective August 1, 1997 for the Tax Exempt Fund.
** Reflects a rate change from 0.00% effective August 1, 1997 for the Tax Exempt
Fund.
4. SHARES OF BENEFICIAL INTEREST
At March 31, 1998, an unlimited number of shares of beneficial interest without
par value were authorized for the Trust and 420,000,000,000 shares of $.001 par
value capital stock were authorized for the Company. The Trust's Declaration of
Trust and the Company's Articles of Incorporation authorize the Board of
Trustees/Directors to classify or reclassify any authorized, but unissued shares
into one or more additional classes or series of shares. See Schedule of Capital
Stock Activity.
5. RESTRICTED SECURITIES
The following securities of the Prime and Treasury Funds are illiquid and
restricted as to resale and, accordingly, are valued at fair market value in
good faith by or under the direction of the Trust's Board of Trustees or the
Company's Board of Directors, as applicable, taking into consideration such
factors as the relevant Board deems appropriate.
PRIME
<TABLE>
<CAPTION>
VALUE FAIR PERCENTAGE HISTORICAL
ACQUISITION PAR VALUE PER UNIT VALUE OF NET ASSETS COST
SECURITY DATE 3/31/98 3/31/98 3/31/98 3/31/98 3/31/98
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Allstate Life Insurance Company:
5.792% 06/29/98#........................... 11/01/97 $25,000,000 $1.00 $ 25,000,000 0.4% $ 25,000,000
5.792% 06/29/98#........................... 12/01/97 25,000,000 1.00 25,000,000 0.4 25,000,000
Anchor National Life Insurance Company,
5.920% 06/29/98#........................... 05/16/97 50,000,000 1.00 50,000,000 0.9 50,000,000
5.873% 06/29/98#........................... 12/01/97 25,000,000 1.00 25,000,000 0.4 25,000,000
Commonwealth Life Insurance Company, Inc.:
5.910% 04/01/98+++......................... 02/05/98 50,000,000 1.00 50,000,000 0.9 50,000,000
5.850% 09/28/98#........................... 12/01/97 62,000,000 1.00 62,000,000 1.1 62,000,000
5.850% 09/28/98#........................... 02/02/98 10,000,000 1.00 10,000,000 0.3 10,000,000
First Allmerica Financial Life Insurance
Company
5.700% 06/29/98#........................... 11/24/97 50,000,000 1.00 50,000,000 0.9 50,000,000
Life Insurance Company of Georgia,
5.912% 09/28/98#........................... 01/01/98 60,000,000 1.00 60,000,000 1.1 60,000,000
Peoples Security Life Insurance Company:
5.850% 04/01/98+++......................... 12/04/97 20,000,000 1.00 20,000,000 0.4 20,000,000
5.940% 09/28/98#........................... 01/05/98 20,000,000 1.00 20,000,000 0.4 20,000,000
Sun Life Insurance Company of America,
5.903% 09/28/98#........................... 10/01/97 50,000,000 1.00 50,000,000 0.9 50,000,000
Travelers Life Insurance Company:
5.722% 04/01/98+++......................... 02/03/98 25,000,000 1.00 25,000,000 0.4 25,000,000
5.672% 05/01/98+++......................... 07/31/97 25,000,000 1.00 25,000,000 0.4 25,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
$497,000,000 8.9% $497,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
# Put Date
+++ Reset Date
47
<PAGE> 52
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
TREASURY
<TABLE>
<CAPTION>
VALUE FAIR PERCENTAGE HISTORICAL
ACQUISITION PAR VALUE PER UNIT VALUE OF NET ASSETS COST
SECURITY DATE 3/31/98 3/31/98 3/31/98 3/31/98 3/31/98
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Repurchase Agreement with Morgan Stanley
Group, Inc.,
6.100% 04/09/98........................... 03/10/98 $130,000,000 $1.00 $130,000,000 4.8% $130,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
$130,000,000 4.8% $130,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Certain securities may be sold only pursuant to certain legal restrictions and
may be difficult to sell. No Fund will invest more than 10% of the value of its
net assets in securities that are illiquid.
The following securities of the Prime Fund are restricted as to resale, however,
they are considered liquid due to the put feature which allows the Fund to put
the security back to the issuer at par value with seven calendar days notice.
<TABLE>
<CAPTION>
VALUE PER FAIR PERCENTAGE HISTORICAL
ACQUISITION PAR VALUE UNIT VALUE OF NET ASSETS COST
SECURITY DATE 3/31/98 3/31/98 3/31/98 3/31/98 3/31/98
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
General American Life Insurance Company,
5.830% 04/07/98#.......................... 02/06/98 $50,000,000 $1.00 $ 50,000,000 0.9% $ 50,000,000
5.830% 04/07/98#.......................... 05/16/97 50,000,000 1.00 50,000,000 0.9 50,000,000
Life Insurance Company of Virginia:
5.595% 04/07/98#.......................... 09/02/97 50,000,000 1.00 50,000,000 0.9 50,000,000
5.595% 04/07/98#.......................... 02/01/98 25,000,000 1.00 25,000,000 0.4 25,000,000
5.595% 04/07/98#.......................... 03/01/98 25,000,000 1.00 25,000,000 0.4 25,000,000
New York Life Insurance Company
5.792% 04/07/98#.......................... 11/17/97 50,000,000 1.00 50,000,000 0.9 50,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
$250,000,000 4.4% $250,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
# Put Date
6. LINE OF CREDIT
The Trust and the Company participate in an uncommitted line of credit provided
by BONY under a line of credit agreement (the "Agreement"). Advances under the
Agreement are taken primarily for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. Interest on borrowings is payable at the federal
funds rate plus 0.50% on an annualized basis. The Agreement requires, among
other things, that each participating Fund maintain a ratio of no less than 4 to
1 net assets (not including funds borrowed pursuant to the Agreement) to
aggregate amount of indebtedness pursuant to the Agreement.
For the year ended March 31, 1998, borrowings by the Funds were as follows:
<TABLE>
<CAPTION>
AVERAGE AVERAGE
AMOUNT AVERAGE DEBT
FUND OUTSTANDING SHARES PER SHARE
- -------------------------------------------------------------------
<S> <C> <C> <C>
Prime................... $ 48,932 5,455,955,014 $0.00(a)
Tax Exempt.............. 567,452 2,142,959,878 0.00(a)
</TABLE>
- ---------------
(a) Amount represents less than $0.01 per share.
The average amount outstanding was calculated based on daily balances in the
period.
48
<PAGE> 53
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. CAPITAL LOSS CARRYFORWARD
At March 31, 1998, the Funds had available for Federal income tax purposes the
following unused capital losses expiring March 31:
<TABLE>
<CAPTION>
1999 2001 2002 2003 2004 2005 2006
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Prime................................... $203,217 -- -- $131,029 $35,477 $407,118 $23,040
Government Money Market................. -- -- -- 66,277 1,658 -- --
Treasury................................ -- -- $16,305 26,323 94,877 30,612 13,748
Tax Exempt.............................. -- $23,264 16,054 43,995 -- 1,480 1,686
</TABLE>
8. REORGANIZATIONS
On September 27, 1996, certain Funds, as listed below (each an "Acquiring
Fund"), acquired the assets and certain liabilities of The Peachtree Funds, also
listed below (each an "Acquired Fund"), in a tax-free reorganization in exchange
for shares of the Acquiring Fund, pursuant to agreements and plans of
reorganization approved by the Acquired Fund's shareholders. The value of shares
issued by the Acquiring Fund are presented in the Schedule of Capital Stock
Activity. Net assets as of the reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS OF
ACQUIRING ACQUIRED TOTAL NET ASSETS OF TOTAL NET ASSETS OF ACQUIRING FUND AFTER
FUND FUND ACQUIRED FUND ACQUIRING FUND ACQUISITION
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prime Fund Peachtree Prime Money Market Fund $46,490,663 $4,147,941,938 $4,194,432,601
Government Money
Market Fund Peachtree Government Money Market Fund 31,477,446 364,861,596 396,339,042
</TABLE>
On May 16, 1997, certain Funds, as listed below (each an "Acquiring Fund"),
acquired the assets and certain liabilities of The Pilot Funds, also listed
below (each an "Acquired Fund"), in a tax-free reorganization in exchange for
shares of the Acquiring Fund, pursuant to agreements and plans of reorganization
approved by the Acquired Fund's shareholders. The value of shares issued by the
Acquiring Fund are presented in the Schedule of Capital Stock Activity. Net
assets as of the reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS OF
ACQUIRING ACQUIRED TOTAL NET ASSETS OF TOTAL NET ASSETS OF ACQUIRING FUND AFTER
FUND FUND ACQUIRED FUND ACQUIRING FUND ACQUISITION
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prime Pilot Short-Term Diversified Assets Fund $1,854,583,090 $4,275,976,797 $6,130,559,887
Treasury Pilot Short-Term U.S. Treasury Fund 1,619,653,674 2,618,142,225 4,237,795,899
Tax-Exempt Pilot Short-Term Tax Exempt Diversified Fund 391,958,210 1,461,772,856 1,853,731,066
Tax-Exempt Pilot Missouri Short-Term Tax Exempt Fund 226,779,626 1,853,731,066 2,080,510,692
</TABLE>
9. SUBSEQUENT EVENTS
The Trust and the Company are parties to Agreements and Plans of Reorganization
with The Emerald Funds (which are advised by Barnett Capital Advisors, Inc., an
indirect wholly-owned subsidiary of NationsBank Corporation) pursuant to which
the assets and liabilities (net) of the Emerald Tax Exempt Fund of $170,699,695,
Emerald Treasury Fund of $875,234,848 and Emerald Prime Fund of $2,174,402,324,
were acquired in a tax free exchange of shares by the Tax Exempt Fund, Treasury
Fund and Prime Fund respectively, as of May 15, 1998.
In addition, NationsBank of Texas merged into NationsBank on May 6, 1998.
NationsBank began serving as custodian of the Trust's and the Company's assets
and sub-transfer agent for the Primary Shares of the Funds on that date and is
providing the same services as were previously provided by NationsBank of Texas.
49
<PAGE> 54
NATIONS FUNDS
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS, DIRECTORS AND TRUSTEES OF NATIONS FUNDS
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations, the
statement of cash flows for Nations Treasury Fund, the statements of changes in
net assets and the financial highlights present fairly, in all material
respects, the financial position of Nations Tax Exempt Fund, Nations Treasury
Fund, Nations Government Money Market Fund and Nations Prime Fund (portfolios of
Nations Fund Trust or Nations Fund, Inc., hereafter referred to as the "Funds")
at March 31, 1998, and the results of each of their operations, the cash flows
for Nations Treasury Fund, the changes in each of their net assets and the
financial highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at March 31, 1998 by
correspondence with the custodian and the application of alternative procedures
where securities purchased had not been received by the custodian, provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
May 28, 1998
50
<PAGE> 55
NATIONS FUNDS
- --------------------------------------------------------------------------------
TAX INFORMATION (UNAUDITED)
For the period ended March 31, 1998, all of the distributions made from
investment income of Nations Tax Exempt Fund, are tax exempt for regular Federal
income tax purposes. A portion of this income may be subject to Federal
Alternative Minimum Tax.
51
<PAGE> 56
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<PAGE> 57
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105
AR2 IN96117 3/98
