<PAGE> 1
[GRAPHIC: Photo of rowers] Nations
Tax Exempt Fund
Nations
Treasury Fund
Nations
Government Money
Market Fund
Nations Prime Fund
MONEY
MARKET FUNDS
ANNUAL REPORT FOR THE YEAR
ENDED MARCH 31, 2000
[NATIONS FUNDS LOGO]
<PAGE> 2
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., which is not affiliated with Bank of
America 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: Banc of America Advisors, Inc.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 3
PRESIDENTS' MESSAGE
Dear Shareholder:
As we report on the past 12 months ending March 31,
2000, we need to remind ourselves of two major
investment tenets -- diversification and investing
for the long term. Keep these points in mind as we
take a look back at the past year and where we are
today.
THE YEAR IN REVIEW
For most of 1999, the threat of Y2K was on everyone's
minds. Many companies in the U.S. and around the
world went to great lengths to make sure that
computer systems were compliant and ready to "squash"
the Y2K bug. Fortunately, we entered the 21st century
relatively unscathed. But in the months that led up
to the year 2000 and in the first quarter of the new
year, the markets have put on quite a show. We've
seen an unusual level of volatility and it doesn't
look like things are going to calm down any time
soon.
While large-company stocks continued to perform well
in 1999 and into 2000, markets began to broaden with
small and mid-size company stocks staging turnarounds
and actually outperforming large-company stocks. The
Standard & Poor's 500 Composite Stock Price Index was
up 17.94% for the 12 months ending March 31, 2000,
while the S&P MidCap 400 Index and Russell 2000 Index
were up 38.20% and 37.29%, respectively.* Value
stocks also regained some ground during the period
after several quarters of underperformance versus
growth stocks.
International markets also showed new life in 1999
and into 2000, especially in Asia where it's been a
long recovery since the Asian "malaise" began in
1997. The Morgan Stanley Capital International (MSCI)
Europe, Australasia and Far East (EAFE) Index gained
25.09% for the 12 months ending March 31, 2000,
thanks in large part to the economic recovery in
Japan.**
MARKET MAYHEM
As of late, we have witnessed wild swings in the U.S.
stock markets, setting new milestones for one-day
gains and losses. It's a tumultuous time in the
markets and now, more than ever, it's important to
remember that one key to a successful investment
strategy is diversification. Investing in a number of
sectors allows you to take advantage of those sectors
that are in favor today, and those that may be in
favor tomorrow. And, as shown by how quickly the
markets have rebounded from these dramatic highs and
lows, you need to remember to stay focused on
long-term goals. Investing takes discipline and a
conviction to hold true to your long-term objectives.
As we've said before, investors that took themselves
out of the market based on short-term volatility and
Y2K fears lost out on potential gains in their
investments during that time and face possible tax
implications and fees as a result of their
withdrawal. It's true that over the long term, the
market has trended upward. While there is no
assurance that this trend will continue, the
advantages of long-term investing are clear.
*The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. The Standard & Poor's MidCap 400 Index
is a market-value weighted index that
measures the market value of 400 domestic stocks
chosen for market size, liquidity, and industry
representation. It is unmanaged and unavailable for
investment. The Russell 2000 Index is an
unmanaged capitalization-weighted index that tracks
the performance of 2000 small company stocks. It
is unavailable for investment.
**The Morgan Stanley Capital International Europe,
Australasia and Far East Index is an unmanaged,
capitalization-weighted index that tracks stocks
traded in twenty countries in Europe, Australia, and
the
Far East. It is unavailable for investment.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
<PAGE> 4
PRESIDENTS' MESSAGE CONTINUED...
At Nations Funds, we firmly believe in the value of
advice, especially in times of uncertainty. An
investment professional can keep you abreast of
current market conditions and work with you to
determine the best strategy for surviving short-term
volatility and successfully reaching your long-term
goals.
WHAT'S NEW AT NATIONS FUNDS
In its continuing effort to provide world-class
investment management, Bank of America reorganized a
number of internal investment management units into
Banc of America Capital Management, Inc. (BACAP).
Focusing on both equity and fixed income funds, this
Nations Funds Manager of Distinction(SM) is
responsible for the portfolio management of more than
40 Nations Funds. This entity was developed to
synergize research and investment capabilities into a
premier investment management organization. And the
media has taken notice. You may have seen BACAP
investment professionals regularly featured on
programs on CNBC and CNNfn. When the media looks to
the industry for expert analysis, they are now
turning regularly to the investment professionals of
BACAP.
In addition to the changes at BACAP, we enhanced our
investment management expertise with the addition of
MacKay Shields LLC as our newest Manager of
Distinction to manage Nations High Yield Bond Fund,
which debuted in February. The Fund rounds out our
line of fixed income fund offerings. On the equity
side, we launched a new Fund for a new era -- Nations
Marsico 21st Century Fund. This latest offering
managed by Marsico Capital Management, LLC is
positioned to invest in companies of any size that
are changing the way the world does business.
Not only are new products important to us. Quality
shareholder service continues to be of utmost
importance. We were recognized by DALBAR, Inc. -- an
independent evaluator of customer service in the
mutual fund industry -- with the 1999 Mutual Fund
Service Award. This award was given to us in
recognition of our commitment to provide shareholders
with the highest level of client service in the
mutual fund industry. We will strive to maintain this
level of excellence throughout 2000 and beyond.
We are excited about our growth over the past year
and the opportunities ahead of us. Should you have
any questions or comments on your annual report,
please contact your investment professional or call
us at 1.800.321.7854. You can also visit us online at
www.nations-funds.com.
Thank you for being a part of the Nations Funds
family.
Sincerely,
/s/ A. Max Walker
A. MAX WALKER
PRESIDENT AND CHAIRMAN OF THE BOARD
NATIONS FUNDS
/s/ Robert H. Gordon
ROBERT H. GORDON
PRESIDENT
BANC OF AMERICA ADVISORS, INC.
March 31, 2000
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<S> <C>
NATIONS FUNDS SPECTRUM 2
ECONOMIC OVERVIEW 3
FINANCIAL STATEMENTS
Statement of net assets 5
Nations Tax Exempt Fund 5
Nations Treasury Fund 21
Nations Government Money Market Fund 23
Nations Prime Fund 24
Statements of operations 28
Statements of changes in net assets 30
Statement of cash flows 32
Schedules of capital stock activity 33
Financial highlights 36
Notes to financial statements 44
</TABLE>
<TABLE>
<S> <C>
------------------------------------------------------------------------------
NATIONS FUNDS [DALBAR LOGO]
RECOGNIZED FOR
OUTSTANDING DALBAR, Inc., is a well-respected
CUSTOMER SERVICE research firm that measures
customer service levels and
IN RECOGNITION OF ITS COMMITMENT TO establishes benchmarks in the
PROVIDE SHAREHOLDERS WITH THE financial services industry.
HIGHEST LEVEL OF CUSTOMER SERVICE
IN THE MUTUAL FUND INDUSTRY,
NATIONS FUNDS RECEIVED THE DALBAR
MUTUAL FUND SERVICE AWARD IN 1999.
------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
THE NATIONS FUNDS FAMILY OF FUNDS
As of March 31, 2000
LOWER RISK/REWARD POTENTIAL
MONEY MARKET FUNDS
Nations Prime Fund
Nations Cash Reserves
Nations Money Market Reserves
Nations Government Money Market Fund
Nations Government Reserves
Nations Treasury Fund
Nations Treasury Reserves
Nations Tax Exempt Fund
Nations Municipal Reserves
Nations California Tax-Exempt Reserves
FIXED INCOME FUNDS
INCOME FUNDS
Nations High Yield Bond Fund
Nations Strategic Income Fund
Nations U.S. Government Bond Fund
Nations Government Securities Fund
Nations Investment Grade Bond Fund
Nations Intermediate Bond Fund
Nations Short-Intermediate Government Fund
Nations Short-Term Income Fund
TAX-EXEMPT INCOME FUNDS
Nations Municipal Income Fund
Nations State-Specific Long-Term Municipal
Bond Funds (CA, FL, GA,
MD, NC, SC, TN, TX, VA)
Nations Intermediate Municipal Bond Fund
Nations State-Specific Intermediate Municipal
Bond Funds (FL, GA, MD,
NC, SC, TN, TX, VA)
Nations Short-Term Municipal Income Fund
DOMESTIC EQUITY FUNDS
GROWTH FUNDS
Nations Small Company Fund
Nations MidCap Growth Fund
Nations Marsico Focused Equities Fund
Nations Disciplined Equity Fund
Nations Capital Growth Fund
Nations Strategic Growth Fund
Nations Blue Chip Fund
GROWTH AND INCOME FUNDS
Nations Marsico Growth & Income Fund
Nations Value Fund
Nations Equity Income Fund
Nations Asset Allocation Fund
Nations Balanced Assets Fund
Nations Convertible Securities Fund
INTERNATIONAL FUNDS
Nations Emerging Markets Fund
Nations International Growth Fund
Nations International Equity Fund
Nations International Value Fund
HIGHER RISK/REWARD POTENTIAL
INDEX FUNDS
Nations LargeCap Index Fund
Nations Managed Index Fund
Nations SmallCap Index Fund
Nations Managed SmallCap Value Index Fund
Nations Managed Value Index Fund
ASSET ALLOCATION PORTFOLIOS
Nations LifeGoal Balanced Growth Portfolio
Nations LifeGoal Growth Portfolio
Nations LifeGoal Income and Growth Portfolio
2
<PAGE> 7
ECONOMIC OVERVIEW
BANC OF AMERICA CAPITAL MANAGEMENT*
THE YEAR IN REVIEW
Both the U.S. economy and stock market scored
impressive performances in the year ended March 31,
2000. Our economy launched an unprecedented tenth
year of expansion, marking the longest upswing in
American history. And the stock market's continued
climb reflected favorable short-term fundamentals and
a long-term revolution in technology and
communications.
In the year ended March 31, the Standard & Poor's 500
Composite Stock Price Index advanced by 16.5%. While
investors turned in March to some of those economic
sectors largely overlooked in the rush to technology,
the Nasdaq Composite Index still sparkled with an 86%
advance for the past 12 months. A renewed interest in
smaller-capitalization stocks also drove the Russell
2000 Index 36% higher as of March 31.**
During the past year, U.S. real GDP (gross domestic
product) expanded an estimated 5%, while inflation
remained subdued. Despite a near tripling in oil
costs, consumer prices increased by only 2.4%. Two
primary forces deserve credit for this nearly
flawless performance. First, U.S. economic policies
have spawned an environment conducive to
non-inflationary growth. These policies include
deficit reduction, monetary discipline, deregulation
and free foreign trade. Second, a once-in-a-century
wave of innovation has sparked large gains in
productivity through advances in the internet,
computers and information sharing. These advances in
output per hour have restrained inflation and helped
companies achieve double-digit profit gains.
Economic and stock market advances have continued
despite five interest rate hikes enacted by the
Federal Reserve Board (the Fed) over the past year.
Three of those increases simply reversed the easings
triggered by Russia's crisis in 1998. The last two
advances in the Federal Funds Rate have restored the
monetary target to the 6.0% level of 1995. The Fed is
attempting to achieve a tempered and sustainable
economic growth rate consistent with an ongoing low
rate of inflation.
The long-term bond market appears confident that the
Fed will succeed. The yield on 30-year U.S. Treasury
bonds slid below 6.0% by the end of March 2000,
reflecting in part the conviction that economic
growth will ultimately moderate and that inflation
will stay in check. In addition, the Treasury's
decision to buy back $30 billion in government debt
because of the emergence of sizable federal budget
surpluses has been a major force pushing long-term
Treasury bond yields lower.
*Banc of America Capital Management is the investment
management group of Bank of America, N.A.
and includes Banc of America Capital Management,
Inc., investment sub-adviser to many Nations Funds,
and other non-bank affiliates of Bank of America.
**The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
The Nasdaq Composite Index tracks the performance of
domestic common stocks traded on the regular
Nasdaq market as National Market System traded
foreign stocks and ADRs. It is unmanaged and
unavailable for investment.
The Russell 2000 Index is an unmanaged,
capitalization-weighted index that tracks the
performance of
2000 small company stocks. It is unavailable for
investment.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
3
<PAGE> 8
ECONOMIC OVERVIEW CONTINUED...
The past 12 months have also witnessed the emergence
of a global recovery. Much of Asia has rebounded
smartly from the scourge of devaluations that began
in 1997. Japan's economy has continued to struggle
but appears to be on a modest upward track. The new
"Eurozone" has moved forward, although growth has
been moderate. Even Russia has begun to emerge from
the turmoil of 1998. Finally, while parts of Latin
America -- such as Venezuela and
Argentina -- continue to struggle, Brazil appears to
have turned the corner and Mexico has prospered.
The major non-event of the year turned out to be the
"Y2K" date change. Although computer failures could
have wreaked havoc on financial markets and the
global economy, extensive investment and preparation
by the technology-dependent countries allowed markets
to celebrate the new year with barely a hiccup.
THE YEAR AHEAD
Look for the U.S. economy to continue its expansion
during the coming year, with no recession looming on
the horizon. We forecast growth to moderate, however,
to 3.5% or less over the course of the next 12
months. This pace will be more consistent with a
long-term sustainable trend.
Inflation should remain constrained. Although low
unemployment may cause additional upward pressure on
wages and benefits, productivity gains should offset
much of that increase. Meanwhile, a step-up in
production by oil producing countries should cause
energy prices to subside from the peaks reached in
early 2000.
We also anticipate one or two more interest rate
hikes from the Fed as monetary authorities attempt to
rein in growth and ensure that the economy does not
overheat. Long-term interest rates have already
largely incorporated expectations of such additional
tightening.
The stock market has displayed extreme volatility
recently, and large swings are likely to continue.
Strong profit growth and moderate interest rates
should support a further rise in overall stock prices
during the coming year. However, general gains of
more than 10% should be more difficult to achieve,
especially as the surge in the technology sector has
tended to overstate some of the general strength in
the market.
While the long-term fundamentals underpinning the
technology sector remain compelling, a reallocation
in portfolios generally has begun. Investors have
started to switch from internet, communications, and
biotechnology stocks with very high valuations to
other market segments with much lower
price-to-earnings ratios***. We think this
rebalancing of the market is healthy, especially as
it involves some broadening in its strength to
encompass the financial, consumer noncyclical and
industrial sectors of the market. Also, look for
investors to continue to discern between internet and
other new firms that are likely to be long-term
survivors and those that have set up shop with only a
concept and a promise.
LYNN REASER, PH.D.
CHIEF ECONOMIST
BANC OF AMERICA CAPITAL MANAGEMENT
March 31, 2000
***The price-to-earnings ratio gives investors an
idea of how much they are paying for a company's
earning power.
Source for all statistical data -- Banc of America
Capital Management.
4
<PAGE> 9
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- 99.9%
ALABAMA -- 2.3%
$ 8,265 Alabama Housing Finance Authority
Multi-Family Housing Revenue
Refunding, (Rime Village
Apartments - Hoover Project)
Series 1996A, (FNMA Collateral
Agreement),
3.900% 06/15/26**#................ $ 8,265
10,775 Alabama Housing Finance Authority
Multi-Family Housing Revenue
Refunding, (Rime Village
Apartments - Huntsville Project)
Series 1996B, (FNMA Collateral
Agreement),
3.900% 06/15/26**#................ 10,775
1,380 Birmingham, Alabama Industrial
Development Board IDR, (Avondale
Commerce - Phase III Project)
Series 1991, (AmSouth Bank N.A.
LOC),
4.250% 06/01/00**................. 1,380
5,300 Columbia, Alabama Industrial
Development Board PCR, (Alabama
Power Company Project) Series
1995A,
3.950% 05/01/22**................. 5,300
2,100 Gadsen, Alabama Industrial
Development Board IDR, (Keystone
Foods Corporation Project) Series
1989, AMT, (Bank of Scotland LOC),
4.100% 05/01/04**#................ 2,100
6,150 Gadsen, Alabama Industrial
Development Board PCR Refunding,
(Alabama Power Company Project)
Series 1994,
4.000% 06/01/15**................. 6,150
560 Homewood, Alabama Industrial
Development Board Revenue
Refunding, (Keebler Company
Project) Series 1993, (Bank of
Nova Scotia LOC),
4.000% 11/01/04**................. 560
9,455 Mobile, Alabama ASMS Public
Educational Building Authority
Revenue, (Alabama High School Math
and Science Foundation Project)
Series 1997, (AmSouth Bank of
Alabama LOC),
4.000% 07/01/22**................. 9,455
2,300 Northern Alabama Pollution Control
Environmental Improvement
Authority PCR, (Reynolds Metals
Company Project) Series 1985,
(Bank of Nova Scotia LOC),
4.100% 12/01/00**................. 2,300
5,850 Phenix County, Alabama Industrial
Development Board Environmental
Improvement Revenue, (Georgia
Kraft Company Project) Series
1985, (Deutsche Bank A.G. LOC),
3.950% 12/01/15**................. 5,850
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
ALABAMA -- (CONTINUED)
$ 2,280 Phenix County, Alabama Industrial
Development Board Environmental
Improvement Revenue, (Mead Coated
Board, Inc. Project) Series 1993A,
AMT, (Toronto Dominion Bank LOC),
4.100% 06/01/28**................. $ 2,280
1,600 Phenix County, Alabama Industrial
Development Board Environmental
Improvement Revenue, (Mead Coated
Board, Inc. Project) Series 1996,
AMT, (Hypo Vereinsbank LOC),
4.100% 03/01/31**................. 1,600
----------
56,015
----------
ARIZONA -- 1.2%
20,200 Apache County, Arizona Industrial
Development Authority Revenue,
(Tucson Electric Power Company
Project) Series 1983B, (Bank of
New York LOC),
3.900% 12/15/18**................. 20,200
5,100 Casa Grande, Arizona Industrial
Development Authority Revenue
Refunding, (Mayville Metal
Products Project) Series 1998,
(Toronto Dominion Bank LOC),
3.900% 07/01/15**#................ 5,100
3,700 Goodyear, Arizona Industrial
Development Authority IDR, (Walle
Corporation Project) Series 1995,
AMT, (Bank One Kentucky, N.A.
LOC),
4.100% 05/01/15**#................ 3,700
----------
29,000
----------
ARKANSAS -- 0.4%
6,300 Little Rock, Arkansas Metrocentre
District Number 1 Improvement
Revenue, (Little Rock Newspapers,
Inc. Project) Series 1985, (Bank
of New York LOC),
4.050% 12/01/25**#................ 6,300
3,250 Lowell, Arkansas IDR, (Little Rock
Newspapers, Inc. Project) Series
1996, AMT, (Bank of New York LOC),
4.000% 06/01/31**#................ 3,250
----------
9,550
----------
CALIFORNIA -- 2.4%
19,725 California Higher Education Loan
Authority Inc. Student Loan
Revenue Refunding, Sr. Lien,
Series 1992A-1, (SLMA Guarantee),
Mandatory Put Bond 07/01/00,
3.500% 10/01/02................... 19,725
19,000 California Higher Education Loan
Authority Inc. Student Loan
Revenue, Sr. Lien, Series 1992A-2,
(SLMA Guarantee), Mandatory Put
Bond,
3.180% 04/01/00................... 19,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 10
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
CALIFORNIA -- (CONTINUED)
$ 1,000 Los Angeles, California Regional
Airports Improvement Corporation
Lease Revenue, (American
Airlines - Los Angeles
International Airport Project)
Series 1984C, (Wachovia Bank of
Georgia LOC),
4.100% 12/01/24**................. $ 1,000
1,400 Los Angeles, California Regional
Airports Improvement Corporation
Lease Revenue, (American Airlines,
Inc. Project) Series 1984A,
(Wachovia Bank of Georgia LOC),
4.100% 12/01/24**................. 1,400
3,700 Los Angeles, California Regional
Airports Improvement Corporation
Lease Revenue, (American Airlines,
Inc. Project) Series 1984B,
(Wachovia Bank of Georgia LOC),
4.100% 12/01/24**................. 3,700
700 Los Angeles, California Regional
Airports Improvement Corporation
Lease Revenue, (LAX Two
Corporation - Los Angeles
International Airport Project)
Series 1985, (Societe Generale
LOC),
4.100% 12/01/25**................. 700
13,000 Los Angeles, California Regional
Airports Improvement Corporation
Terminal Facilities Revenue, (LAX
Two Corporation - Los Angeles
International Airport Project)
Series 1989, AMT, (Societe
Generale LOC),
4.100% 12/01/25**................. 13,000
----------
58,525
----------
COLORADO -- 2.7%
3,500 Denver City and County, Colorado
Airport Revenue, Series 1992F,
AMT, (Dexia Credit Local de France
LOC),
3.950% 11/15/25**................. 3,500
5,000 Denver City and County, Colorado
Airport Revenue, Series 1992G,
AMT, (Dexia Credit Local de France
LOC),
3.950% 11/15/25**................. 5,000
5,305 El Paso County, Colorado
Multi-Family Housing Revenue
Refunding, (Briarglen Apartments
Project) Series 1995, (FHLMC
Guarantee),
3.850% 12/01/24**#................ 5,305
51,500 Moffat County, Colorado PCR,
(Tri-State Colorado - Utah
Electric Cooperative Project)
Series 1984, (AMBAC Insured,
Societe Generale SBPA),
3.950% 07/01/10**................. 51,500
----------
65,305
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
DELAWARE -- 2.1%
$ 14,500 Delaware State Economic Development
Authority Hospital Billing
Revenue, Series 1985, (MBIA
Insured, Morgan Stanley SBPA),
3.900% 12/01/15**................. $ 14,500
9,650 Delaware State Economic Development
Authority Hospital Billing
Revenue, Series 1985B, (MBIA
Insured, Morgan Stanley SBPA),
3.900% 12/01/15**................. 9,650
13,650 Delaware State Economic Development
Authority Hospital Billing
Revenue, Series 1985C, (AMBAC
Insured, Morgan Stanley SBPA),
3.900% 12/01/15**................. 13,650
10,000 Delaware State Economic Development
Authority IDR, (Star Enterprise -
Delaware Clean Power Project)
Series 1997B, AMT, (Canadian
Imperial Bank of Commerce LOC),
4.000% 08/01/29**................. 10,000
2,300 Delaware State Economic Development
Authority IDR, (Star Enterprise -
Delaware Clean Power Project)
Series 1997C, AMT, (Canadian
Imperial Bank of Commerce LOC),
3.990% 08/01/29**................. 2,300
----------
50,100
----------
FLORIDA -- 1.5%
11,790 Broward County, Florida Housing
Finance Authority Multi-Family
Housing Revenue, (Harbour Town
Project) Series 1999 PT-1166,
(Merrill Lynch SBPA Guarantee),
4.090% 12/01/25**#(++)............ 11,790
6,300 Dade County, Florida Special
Revenue, (Youth Fair and
Exposition Project) Series 1995,
(SunTrust Bank of Central Florida
LOC),
3.950% 08/01/15**................. 6,300
3,645 Manatee County, Florida Housing
Finance Authority Multi-Family
Mortgage Revenue, (Hampton Court
Project) Series 1989A, (Credit
Suisse First Boston LOC),
3.900% 06/01/07**#................ 3,645
11,900 Miami, Florida Health Facilities
Authority Health Facilities
Revenue, (Miami Jewish Home and
Hospital Project) Series 1996,
(SunTrust Bank Miami LOC),
3.950% 12/01/16**#................ 11,900
2,750 St. Lucie County, Florida IDR
Refunding, (Florida Convalescent
Centers Project) Series 1988,
(Toronto Dominion Bank LOC),
4.100% 01/01/11**................. 2,750
----------
36,385
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 11
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
GEORGIA -- 8.2%
$ 12,790 Albany-Dougherty, Georgia Payroll
Development Authority PCR
Refunding, (Philip Morris
Companies, Inc. Project) Series
1992,
4.050% 10/01/05**#................ $ 12,790
5,300 Bibb County, Georgia, Development
Authority Revenue, (First
Presbyterian Day School Project)
Series 1999, (SunTrust Bank of
Georgia LOC),
3.950% 05/01/19**#................ 5,300
10,400 Clayton County, Georgia Hospital
Authority Revenue Anticipation
Certificates, (Southern Regional
Medical Center Project) Series
1998B, (SunTrust Bank LOC),
3.950% 08/01/19**#................ 10,400
3,380 Clayton County, Georgia Housing
Authority Multi-Family Housing
Revenue Refunding, (Village Rouge
Apartments Project) Series 1990C,
(FSA Insured, Societe Generale
SBPA),
3.900% 01/01/21**................. 3,380
1,965 Cobb County, Georgia IDR,
(Datagraphic Inc. Project) Series
1990, AMT, (SouthTrust Bank of
Alabama LOC),
3.950% 05/01/05**................. 1,965
3,500 Cobb County, Georgia Residential
Care Facilities for the Elderly
Authority, (North Georgia
Presbyterian Homes, Inc. Project)
Series 1993, (SunTrust Bank LOC),
3.950% 08/01/18**#................ 3,500
14,800 Cobb-Marietta, Georgia Coliseum and
Exhibit Hall Authority Revenue,
Jr. Lien, Series 1996A, (MBIA
Insured, Canadian Imperial Bank of
Commerce SBPA),
3.900% 10/01/26**#................ 14,800
2,985 College Park, Georgia Business and
Industrial Development Authority
Revenue Refunding, (College Park
Association Project) Series 1997,
(Bank of New York LOC),
3.900% 06/01/14**#................ 2,985
2,250 Columbus, Georgia Housing Authority
Multi-Family Housing Revenue
Refunding, (Quail Ridge Project)
Series 1988, (Columbus Bank &
Trust LOC),
4.200% 02/01/05**#................ 2,250
3,085 Columbus, Georgia Industrial and
Port Development Commission
Revenue Refunding, (Parisian, Inc.
Project) Series 1995, (Columbus
Bank & Trust LOC),
4.300% 04/01/07**#................ 3,085
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
GEORGIA -- (CONTINUED)
$ 4,280 DeKalb County, Georgia Development
Authority Industrial Educational
Revenue, (Catholic School
Properties, Inc. Project) Series
1999, (Wachovia Bank, N.A. LOC),
3.950% 04/01/24**................. $ 4,280
7,115 DeKalb County, Georgia Development
Authority Revenue, (American
Cancer Society, Inc. Project)
Series 1988, (SunTrust Bank LOC),
3.950% 05/01/13**#................ 7,115
3,160 DeKalb County, Georgia Hospital
Authority Revenue Anticipation
Certificates, (DeKalb Medical
Center, Inc. Project) Series 1994,
(SunTrust Bank LOC),
3.950% 09/01/09**#................ 3,160
4,400 DeKalb County, Georgia Housing
Authority Multi-Family Housing
Revenue Refunding, (Camden Brook
Project) Series 1995, (FNMA
Collateral Agreement),
3.900% 06/15/25**................. 4,400
5,430 DeKalb County, Georgia Housing
Authority Multi-Family Housing
Revenue, (Haystack Apartments
Project) Series 1995, AMT,
(General Electric Capital
Corporation Guarantee),
4.100% 12/01/20**#................ 5,430
6,875 DeKalb County, Georgia Housing
Authority Multi-Family Housing
Revenue, (Stone Mill Run
Apartments Project) Series 1995A,
AMT, (First Tennessee Bank, N.A.
LOC),
4.000% 08/01/27**................. 6,875
5,300 DeKalb County, Georgia Industrial
Development Authority IDR, (A.G.
Rhodes Home Inc. Project) Series
1996, (SunTrust Bank LOC),
3.950% 03/01/21**#................ 5,300
5,250 DeKalb County, Georgia Industrial
Development Authority IDR,
(Radiation Sterilizers Inc.
Project) Series 1985, (Comerica
Bank LOC),
3.950% 03/01/05**#................ 5,250
5,000 Floyd County, Georgia Development
Authority University and College
Improvement Revenue, (Berry
College, Inc. Project) Series
1999, (Sun Trust Bank LOC),
3.950% 03/01/24**................. 5,000
12,500 Fulton County, Georgia Development
Authority Revenue, (Robert W.
Woodruff Arts Center Project)
Series 1993, (Wachovia Bank of
Georgia LOC),
3.950% 08/01/18**#................ 12,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 12
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
GEORGIA -- (CONTINUED)
$ 3,000 Fulton County, Georgia Development
Authority Revenue, (Spelman
College Project) Series 1996,
(SunTrust Bank LOC),
3.950% 06/01/16**#................ $ 3,000
2,400 Greene County, Georgia Industrial
Development Authority IDR,
(Chipman-Union, Inc. Project)
Series 1995A, AMT, (SunTrust Bank
LOC),
4.050% 03/01/05**#................ 2,400
7,500 Gwinnett County, Georgia Industrial
Development Authority IDR, (United
Stationers Company Project) Series
1990, (PNC Bank of Ohio, N.A.
LOC),
4.000% 12/31/02**#................ 7,500
5,800 Gwinnett County, Georgia Industrial
Development Authority IDR, (Volvo
of America Corporation Project)
Series 1986, AMT, (UBS AG LOC),
4.100% 08/01/06**................. 5,800
3,000 Henry County, Georgia Development
Authority Revenue Refunding,
(Georgia-Pacific Corporation
Project) Series 1993, (SunTrust
Bank LOC),
3.950% 05/01/04**#................ 3,000
7,640 Marietta, Georgia Housing Authority
Multi-Family Revenue, (Franklin
Walk Apartments Project) Series
1990, (Wachovia Bank LOC),
3.900% 01/01/32**................. 7,640
1,000 Newton County, Georgia Industrial
Development Authority IDR, (H.B.
Fuller Company Project) Series
1984, (Commerzbank A.G. LOC),
4.050% 12/01/04**................. 1,000
7,000 Private Colleges and University
Authority Revenue, (Emory
University Project) Series 1999C,
3.800% 11/01/03**................. 7,000
8,200 Putnam County, Georgia Development
Authority PCR, (Georgia Power
Company Plant Project) Series
1997-2,
4.000% 09/01/29**................. 8,200
10,000 Richmond County, Georgia Hospital
Authority Revenue Anticipation
Certificates, (University Health
Services, Inc. Project) Series
1999, (SunTrust Bank LOC),
3.950% 01/01/19**................. 10,000
8,600 Smyrna, Georgia Housing Authority
Multi-Family Housing Revenue,
(Gardens of Post Village Apartment
Project) Series 1996, (FNMA
Collateral Agreement),
3.900% 06/01/25**#................ 8,600
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
GEORGIA -- (CONTINUED)
$ 4,000 Tallapoosa, Georgia Development
Authority IDR Refunding, (U.S. Can
Company Project) Series 1994,
(Harris Trust & Savings Bank LOC),
3.900% 02/01/15**#................ $ 4,000
5,000 Thomaston-Upson County, Georgia IDR
Refunding, (Quad
Graphic - Thomaston, Inc. Project)
Series 1990, (First Union National
Bank LOC),
3.900% 04/01/00**#................ 5,000
5,450 Worth County, Georgia Industrial
Development Authority Revenue
Refunding, (Seabrook Enterprises
Inc. Project) Series 1996A,
(SunTrust Bank LOC),
3.950% 08/01/23**#................ 5,450
----------
198,355
----------
HAWAII -- 0.3%
8,400 Hawaii State Housing Finance and
Development Corporation Rental
Housing System Revenue Bonds,
Series 1989A, (Banque Nationale de
Paris LOC),
3.850% 07/01/24**................. 8,400
----------
IDAHO -- 0.9%
22,275 Idaho Housing and Finance
Association, Series 1998 PT-173,
AMT, (Commerzbank AG SBPA),
4.010% 07/01/29**##............... 22,275
----------
ILLINOIS -- 16.1%
2,600 Chicago, Illinois Airport Special
Facilities Revenue, (Centerpoint
O'Hare Project) Series 1997,
(First National Bank of Chicago
LOC),
4.000% 09/01/32**#................ 2,600
3,700 Chicago, Illinois O'Hare
International Airport Authority
Industrial Revenue, (American
Airlines, Inc. Project) Series
1983C, (Royal Bank of Canada LOC),
4.000% 12/01/17**................. 3,700
12,300 Chicago, Illinois O'Hare
International Airport Authority
Industrial Revenue, (American
Airlines, Inc. Project) Series
1983D, (Royal Bank of Canada LOC),
4.000% 12/01/17**................. 12,300
2,000 Chicago, Illinois O'Hare
International Airport Authority
Revenue, (American Airlines, Inc.
Project) Series 1983A, (Credit
Suisse First Boston LOC),
4.000% 12/01/17**................. 2,000
4,300 Chicago, Illinois O'Hare
International Airport Authority
Revenue, (American Airlines, Inc.
Project) Series 1983B, (Royal Bank
of Canada LOC),
4.00% 12/01/17**.................. 4,300
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 13
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
ILLINOIS -- (CONTINUED)
$ 5,970 Chicago, Illinois O'Hare
International Airport Authority
Revenue, (General Airport Project)
Second Lien, Series 1984B,
(Societe Generale LOC),
3.85% 01/01/15**.................. $ 5,970
2,115 Illinois Development Finance
Authority IDR Refunding, (St.
Xavier University Project) Series
1992, (American National Bank &
Trust Company LOC),
3.95% 10/01/12**.................. 2,115
3,630 Illinois Development Finance
Authority IDR, (Randolph Pickle
Corporation Project) Series 1992,
AMT, (American National Bank &
Trust Company LOC),
4.15% 06/01/12**.................. 3,630
2,000 Illinois Development Finance
Authority Revenue, (Chicago
Symphony Orchestra - Orchestral
Association Project) Series 1994,
(Northern Trust Company LOC),
3.850% 12/01/28**................. 2,000
5,470 Illinois Development Finance
Authority Revenue, (Little City
Foundation Project) Series 1994,
(LaSalle National Bank LOC),
3.950% 02/01/19**................. 5,470
12,300 Illinois Development Finance
Authority Revenue, (Lyric Opera of
Chicago Project) Series 1994,
(Northern Trust Company LOC, Bank
One of Michigan LOC, Harris Trust
& Savings Bank LOC, Caisse
Nationale de Credit Agricole LOC),
3.900% 12/01/28**................. 12,300
10,000 Illinois Development Finance
Authority Revenue, (YMCA of
Metropolitan Chicago Project)
Series 1999A, (Harris Trust &
Savings Bank LOC),
3.900% 06/01/29**................. 10,000
13,000 Illinois Education Facilities
Authority Revenue, (University of
Chicago Project), Series 2000,
3.850% 05/18/00................... 13,000
8,900 Illinois Educational Facilities
Authority Revenue, (Arts Club of
Chicago Project) Series 1996,
(Northern Trust Company LOC),
3.900% 01/01/26**................. 8,900
700 Illinois Educational Facilities
Authority Revenue, (Chicago
Historical Society Project) Series
1985, (Northern Trust Company
LOC),
3.900% 12/01/25**#................ 700
29,000 Illinois Educational Facilities
Authority Revenue, (Field Museum
of Natural History Project) Series
1998, (Northern Trust Company
LOC),
3.900% 11/01/32**................. 28,999
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
ILLINOIS -- (CONTINUED)
$ 6,000 Illinois Educational Facilities
Authority Revenue, (Museum of
Science and Industry Project)
Series 1992, (First National Bank
of Chicago LOC),
3.950% 10/01/26**................. $ 6,000
12,369 Illinois Educational Facilities
Authority Revenue, (Northwestern
University Project) Series 1988,
(Northern Trust Company SBPA),
3.950% 03/01/28**................. 12,369
10,765 Illinois Educational Facilities
Authority Revenue, (University
Pooled Financing Program) Series
1985, (FGIC Insured, First
National Bank of Chicago SBPA),
3.950% 12/01/05**#................ 10,765
11,000 Illinois Health Facilities Authority
Revenue, (Evanston Hospital
Corporation Project) Series 1985B,
3.650% 08/15/00**#................ 11,000
11,000 Illinois Health Facilities Authority
Revenue, (Evanston Hospital
Corporation Project) Series 1996,
3.450% 08/15/30**................. 11,000
4,200 Illinois Health Facilities Authority
Revenue, (Gottlieb Health
Resources, Inc. Project) Series
1994, (Harris Trust & Savings Bank
LOC),
3.900% 11/15/24**................. 4,200
9,800 Illinois Health Facilities Authority
Revenue, (Sacramento Development
Association - Park Plaza Center
Project) Series 1996, (La Salle
National Bank LOC),
3.900% 09/15/20**................. 9,800
7,100 Illinois Health Facilities Authority
Revenue, (The Streeterville
Corporation Project) Series 1994,
(First National Bank of Chicago
LOC),
3.950% 08/15/24**................. 7,100
1,700 Illinois State Development Finance
Authority Economic Development
Revenue, (Addison 450 LP Project)
Series 1989, AMT, (American
National Bank & Trust Company
LOC),
4.000% 12/01/09**................. 1,700
9,000 Illinois State Development Finance
Authority Economic Development
Revenue, (Roosevelt University
Project) Series 1995, (American
National Bank & Trust Company
LOC),
3.950% 04/01/25**................. 9,000
4,120 Illinois State Development Finance
Authority Revenue, (Chicago
Academy of Sciences Project)
Series 1997, (American National
Bank & Trust Company LOC),
3.950% 01/01/31**................. 4,120
10,000 Illinois State GO, Series 1999,
4.000% 06/01/00................... 10,010
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 14
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
ILLINOIS -- (CONTINUED)
$ 1,200 Illinois State Health Facilities
Authority Revenue, (Central Health
and Northwest Community Hospital
Project) Series 1985B, (Harris
Trust & Savings Bank LOC),
3.750% 10/01/15**#................ $ 1,200
45,100 Illinois State Housing Development
Authority Housing Revenue,
(Illinois Center Apartments
Project) Series 1985, (FHLMC
Guarantee),
3.700% 01/01/08**#................ 45,100
7,000 Jackson-Union County, Illinois
Regional District Port Facilities
Revenue Refunding, (Enron
Transportation Services Project)
Series 1994, (First Union National
Bank LOC),
3.900% 04/01/24**#................ 7,000
13,700 Kane County, Illinois Educational
Facilities Revenue, (Glenwood
School for Boys Project) Series
1993, (Harris Trust & Savings Bank
LOC),
3.900% 02/01/28**................. 13,700
23,500 Lisle, Illinois Multi-Family Housing
Revenue, (Ashley of Lisle Project)
Series 1987, (FHLMC Guarantee),
3.900% 12/15/25**#................ 23,500
44,535 Metropolitan Pier and Exposition
Authority Illinois Dedicated
Special Tax Revenue, (McCormick
Place Project) Series 1998
PT-1030, (AMBAC Insured, Merrill
Lynch SBPA),
3.960% 06/15/27**#................ 44,535
5,200 Mount Morris, Illinois Revenue,
(Brethren Home Project) Series
1997, (Lasalle National Bank LOC),
3.900% 06/01/27**................. 5,200
3,700 Palos Hills, Illinois Multi-Family
Housing Revenue, (Green Oaks
Project) Series 1998, AMT,
(LaSalle National Bank LOC),
4.000% 08/01/29**#................ 3,700
7,000 Quincy, Illinois Revenue, (Quincy
University Project) Series 1997,
(Allied Irish Bank, plc LOC),
4.000% 06/01/22**#................ 7,000
7,195 Richton Park, Illinois IDR, (Sinter
Metals Inc. Project) Series 1996,
AMT, (Mellon Bank, N.A. LOC),
4.100% 04/01/16**#................ 7,195
9,500 Sauget, Illinois GO, Series 1997,
(Dexia Credit Communal de Belgique
LOC),
3.900% 02/01/16**................. 9,500
1,300 Southwestern Illinois Development
Authority IDR, (Robinson Steel
Company, Inc. Project) Series
1991, AMT, (American National Bank
& Trust Company LOC),
4.000% 12/01/06**................. 1,300
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
ILLINOIS -- (CONTINUED)
$ 5,000 Woodford County, Illinois Industrial
Development Authority IDR,
(Parsons Company, Inc. Project)
Series 1998, AMT, (Bank One
Illinois, N.A. LOC),
4.100% 03/01/13**#................ $ 5,000
----------
388,978
----------
INDIANA -- 2.7%
505 Evansville, Indiana IDR Refunding,
(Keebler Company Project) Series
1993, (Bank of Nova Scotia LOC),
4.000% 06/01/04**................. 505
4,800 Fort Wayne, Indiana Economic
Development Revenue Refunding,
(Georgetown Place Venture Project)
Series 1987, (Federal Home Loan
Bank LOC),
3.900% 12/01/15**#................ 4,800
3,495 Hendricks County, Indiana
Redevelopment Commission Tax
Increment Revenue, (Heartlands
Crossing Project) Series 1997A,
(Bank One Indiana, N.A. LOC),
4.000% 01/01/22**#................ 3,495
14,900 Indiana State Development Finance
Authority Economic Development
Educational Facilities Revenue,
(Indiana Historical Society
Project) Series 1997, (Bank One
Michigan LOC),
3.950% 08/01/31**#................ 14,900
900 Indiana State Development Finance
Authority Economic Development
Revenue, (Fischer Enterprises,
Ltd. Project) Series 1991, (PNC
Bank, N.A. LOC),
4.100% 11/01/01**#................ 900
1,800 Indiana State Development Finance
Authority Economic Development
Revenue, (Walker-Williams Lumber
Project) Series 1994, AMT,
(Columbus Bank & Trust LOC),
4.300% 01/01/09**#................ 1,800
9,700 Indiana State Development Finance
Authority IDR, (Indiana University
Foundation Project) Series 1998,
(National City Bank LOC),
4.000% 08/01/18**#................ 9,700
725 Indiana State Health Facilities
Financing Authority Capital Access
Designated Pool Revenue, Series
1997, (Comerica Bank LOC),
3.900% 01/01/12**................. 725
8,500 Indiana State Hospital Equipment
Financing Authority Revenue,
Series 1985A, (MBIA Insured, Bank
One of Michigan SBPA),
3.900% 12/01/15**#................ 8,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 15
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
INDIANA -- (CONTINUED)
$ 4,900 Indianapolis, Indiana Economic
Development Revenue, (Edgcomb
Metals Company Project) Series
1983, (Wells Fargo Bank LOC),
3.900% 12/01/08**................. $ 4,900
2,900 Indianapolis, Indiana Multi-Family
Housing Revenue, (El-Beulah
Retirement Village Project) Series
1996, (Bank One Michigan LOC),
4.000% 03/01/21**#................ 2,900
5,240 St. Joseph County, Indiana Economic
Development Revenue, (Brothers of
the Holy Cross Project) Series
1997, (Key Bank N.A. LOC),
4.000% 09/01/17**#................ 5,240
6,600 Terre Haute, Indiana Economic
Development Revenue, (First
Financial Corporation Project)
Series 1985, (First National Bank
of Chicago LOC),
3.950% 12/01/15**................. 6,600
----------
64,965
----------
IOWA -- 0.1%
1,900 Iowa State Finance Authority IDR,
(Sauer-Sundstrand Company Project)
Series 1996, AMT, (Bayerische
Hypovvereinsbank LOC),
3.950% 05/01/26**#................ 1,900
----------
KANSAS -- 1.8%
4,000 Junction City, Kansas IDR, (Genmar
Manufacturing Project) Series
1999, AMT, (Bank of New York LOC),
4.000% 04/01/19**#................ 4,000
1,900 Kansas Industrial Development
Finance Authority Revenue, (PQ
Corporation Project) Series 1988,
(Bank of New York LOC),
4.050% 08/01/15**#................ 1,900
9,600 Kansas State Development Finance
Authority Exempt Facilities
Revenue, (Seaboard Project) Series
1995A, AMT, (Bank of New York
LOC),
4.000% 12/01/25**#................ 9,600
28,950 Olathe, Kansas Educational
Facilities Revenue, (Kansas
Independent College Association
Project) Series 1989A, (Key Bank,
N.A. LOC),
3.900% 07/01/24**................. 28,950
----------
44,450
----------
KENTUCKY -- 2.2%
5,000 Carroll County, Kentucky IDR,
(Kentucky Ladder Company Project)
Series 1990, AMT, (Bankers Trust
Company LOC),
4.200% 09/01/10**................. 5,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
KENTUCKY -- (CONTINUED)
$ 9,975 Georgetown, Kentucky Educational
Institution Improvement Revenue,
(Georgetown College Project)
Series 1997B, (Bank One Kentucky
N.A. LOC),
4.000% 12/01/17**#................ $ 9,975
1,000 Hopkinsville, Kentucky Industrial
Building Revenue, (Brazeway, Inc.
Project) Series 1994, AMT, (Bank
One Michigan LOC),
4.100% 06/01/04**#................ 1,000
3,500 Lebanon, Kentucky IDR, (Wallace
Computer Services, Inc. Project)
Series 1994, AMT, (Wachovia Bank
of Georgia LOC),
4.000% 06/01/19**#................ 3,500
5,400 Lexington-Fayette County, Kentucky
Urban County Airport Corporation
Revenue, (First Mortgage Project)
Series 1994A, AMT, (Dexia Credit
Local de France LOC),
4.100% 04/01/24**................. 5,400
2,800 Lexington-Fayette County, Kentucky
Urban County Airport Corporation
Revenue, (First Mortgage Project)
Series 1994B, AMT, (Dexia Credit
Local de France LOC),
4.100% 04/01/24**................. 2,800
6,250 Louisville and Jefferson County,
Kentucky Regional Airport
Authority Airport Systems Revenue,
BAN, Series 1997AA-1, AMT,
(National City Bank Kentucky LOC),
4.050% 06/30/02**................. 6,250
5,400 Mason County, Kentucky PCR, (East
Kentucky Power National Rural
Cooperative Project) Series
1984B-1, (CFC SBPA Insured),
3.950% 10/15/14**................. 5,400
8,500 Mason County, Kentucky PCR, (East
Kentucky Power National Rural
Cooperative Project) Series
1984B-2, (CFC SBPA Insured),
3.950% 10/15/14**................. 8,500
6,000 Middletown, Kentucky Revenue,
(Christian Academy Louisville
Project) Series 1997, (Bank One of
Kentucky, N.A. LOC),
4.000% 07/01/22**#................ 6,000
----------
53,825
----------
LOUISIANA -- 4.8%
6,550 Caddo Parish, Louisiana Industrial
Development Board Revenue,
(Frymaster Corporation Project)
Series 1987, (Barclays Bank plc
LOC),
3.900% 01/01/03**#................ 6,550
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 16
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
LOUISIANA -- (CONTINUED)
$ 1,000 East Baton Rouge Parish, Louisiana
PCR Refunding, (Exxon Project)
Series 1993, (Exxon Guarantee),
3.950% 03/01/22**................. $ 1,000
23,300 Jefferson Parish, Louisiana Hospital
Service District Number 001
Revenue Refunding, (West Jefferson
Medical Center Project) Series
1996, (Rabobank Nederland LOC),
3.900% 01/01/26**................. 23,300
22,325 Louisiana Public Facilities
Authority PCR, (Ciba-Geigy
Corporation Project) Series 1985,
(UBS AG LOC),
3.850% 12/01/04**................. 22,325
12,000 Louisiana Public Facilities
Authority Revenue,
(Inter-Community Health Care
Project) Series 1999, (Bank of New
York LOC),
3.900% 04/01/21**#................ 12,000
1,500 Louisiana State Offshore Terminal
Authority Revenue Refunding,
(Loop, Inc. Project) Series 1992A,
(Suntrust Bank, Nashville),
3.850% 09/01/08**................. 1,500
25,000 Louisiana State Public Facilities
Authority Hospital Revenue,
(Willis-Knighton Medical Center
Project) Series 1997, (AMBAC
Insured, Dexia Credit Local de
France SBPA),
4.000% 09/01/27**................. 25,000
10,000 Plaquemines, Louisiana Port Harbor
and Terminal District Port
Facilities Revenue, (International
Marine Terminals Project) Series
1984A, (KBC Bank N.V. LOC),
Mandatory Put 03/15/00,
4.200% 03/15/06................... 10,000
9,000 South Louisiana, Port Commission
Facilities Port Revenue, (Holnam,
Inc. Project) Series 1997, AMT,
(Wachovia Bank LOC),
3.900% 01/01/27**#................ 9,000
5,045 Upper Pontalba, Louisiana Building
Restoration Corporation Revenue
Refunding, (Upper Pontalba
Building Project) Series 1996,
(Bank One Louisiana LOC),
4.000% 12/01/16**#................ 5,045
----------
115,720
----------
MARYLAND -- 2.3%
27,800 Baltimore, Maryland Industrial
Development Authority IDR,
(Baltimore Capital Acquisition
Project) Series 1986, (Bayerische
Landesbank LOC),
3.850% 08/01/16**................. 27,800
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
MARYLAND -- (CONTINUED)
$ 3,300 Baltimore, Maryland Port Facilities
Revenue, (Occidental Petroleum
Corporation Project) Series 1981,
(Wachovia Bank LOC),
3.900% 10/14/11**................. $ 3,300
15,235 Maryland Community Development
Administration Multi-Family
Development Revenue Refunding,
(Avalon Lea Apartments Project)
Series 1997, (FNMA Collateral
Agreement),
3.750% 06/15/26**................. 15,235
6,900 Maryland State Industrial
Development Finance Authority
Economic Development Revenue,
(General Binding Corporation
Project) Series 1996, AMT, (Harris
Trust & Savings Bank LOC),
4.000% 03/01/26**#................ 6,900
2,300 Maryland State Industrial
Development Finance Authority
Revenue, (Rock-Tennessee
Converting Company Project) Series
1994, AMT, (SunTrust Bank LOC),
4.050% 05/01/06**#................ 2,300
----------
55,535
----------
MICHIGAN - 3.6%
3,800 Delta County, Michigan Economic
Development Revenue, (Mead
Corporation - Mead Escanaba Paper
Project) Series 1985, (Credit
Suisse First Boston Corporation
LOC),
3.950% 12/01/23**................. 3,800
7,500 Grand Rapids, Michigan Economic
Development Corporation IDR
Refunding, (Baker, Knapp and
Tubbs, Inc. Project) Series 1992,
(Wachovia Bank, NA LOC),
3.950% 06/01/12**#................ 7,500
14,800 Green Lake Township, Michigan
Economic Development Corporation
Revenue, (Interlochen Center for
the Arts Project) Series 1997,
(LaSalle National Bank LOC),
3.900% 06/01/27**#................ 14,800
2,920 Jackson County, Michigan Economic
Development Corporation IDR
Refunding, (Jackson Associates,
LLC Project) Series 1994, (Bank
One of Dayton, N.A. LOC),
4.000% 10/01/14**#................ 2,920
7,560 Michigan State Hospital Finance
Authority Revenue, (St. Mary's of
Livonia Hospital Project) Series
1996A, (Comerica Bank LOC),
3.900% 07/01/17**................. 7,560
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 17
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
MICHIGAN -- (CONTINUED)
$ 10,335 Michigan State Strategic Fund PCR,
(General Motors Corporation
Project) Series 1985, (General
Motors Guarantee),
3.800% 12/01/08**................. $ 10,335
19,700 University of Michigan Board of
Regents Revenue, (University of
Michigan Hospitals Project) Series
1995A,
4.000% 12/01/27**................. 19,700
14,800 University of Michigan Hospital
Revenue, (University of Michigan
Project) Series 1995A,
4.000% 12/01/27**................. 14,800
2,700 University of Michigan, Hospital
Revenue Refunding, (University of
Michigan Hospitals Project) Series
1992A,
4.000% 12/01/19**................. 2,700
3,000 University of Michigan, Hospital
Revenue, (University of Michigan
Project) Series 1998A-1,
4.000% 12/01/21**................. 3,000
----------
87,115
----------
MINNESOTA - 0.2%
5,660 Minneapolis, Minnesota Community
Development Agency Revenue, (Arena
Acquisition Project) Series 1995A,
(US Bank N.A. LOC),
3.900% 10/01/24**................. 5,660
----------
MISSISSIPPI - 1.8%
1,800 Mississippi Business Finance
Corporation IDR, (Choctaw Maid
Farms, Inc. Project) Series 1995,
AMT, (Rabobank Nederland LOC),
4.050% 03/01/10**#................ 1,800
1,800 Mississippi Business Finance
Corporation, (Trilogy
Communications Project) Series
1995, AMT, (First Union National
Bank LOC),
3.950% 06/01/05**#................ 1,800
39,125 Mississippi State GO, Putters 103,
Series 1998B, (FGIC Insured, Bank
of New York SBPA),
3.980% 11/01/11**#................ 39,125
----------
42,725
----------
MISSOURI - 5.5%
5,000 Berkeley, Missouri Industrial
Development Authority IDR, (Flight
Safety International, Inc.
Project) Series 1984, (Wachovia
Bank LOC),
3.950% 09/01/04**#................ 5,000
5,000 Berkeley, Missouri Industrial
Development Authority Revenue
Refunding, (Wetterau, Inc.
Project) Series 1987, (PNC Bank,
N.A. LOC),
3.900% 07/01/08**#................ 5,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
MISSOURI -- (CONTINUED)
$ 18,400 Kansas City, Missouri Industrial
Development Authority Multi-Family
Housing Revenue, (Timberlane
Village Associates Project) Series
1986, (UBS AG LOC),
3.960% 06/01/27**................. $ 18,400
20,000 Missouri State Development Finance
Board Lease Revenue, Transamerica
Life and Annuity, Series 1999,
(Missouri Association of Utilities
Lease Pool TransAmerica Life and
Annuity GIC),
4.000% 12/01/22**................. 20,001
12,000 Missouri State Environmental
Improvement and Energy Resources
Authority PCR, (Union Electric
Company Project) Series 1985B,
(Westdeutsche Landesbank LOC),
3.900% 04/24/00................... 12,000
18,655 Missouri State Environmental
Improvement and Energy Resources
Authority PCR, (Union Electric
Company Project) Series 1985B,
(Westdeutsche Landesbank LOC),
3.950% 04/24/00................... 18,655
20,845 Missouri State Environmental
Improvement and Energy Resources
Authority PCR, (Union Electric
Company Project) Series 1985B,
(Westdeutsche Landesbank LOC),
3.900% 06/01/15**................. 20,845
6,100 Missouri State Health and
Educational Facilities Authority
Health Facilities Revenue,
(Sisters of Mercy Health Care
System Project) Series 1989D,
(ABN-AMRO Bank SBPA, Rabobank
Nederland SBPA),
3.900% 06/01/19**................. 6,100
9,220 Platte County, Missouri Industrial
Development Authority Multi-Family
Housing Revenue Refunding,
(Wexford Place Project) Series
1996, (Bank One Texas, N.A. LOC),
3.970% 04/01/28**#................ 9,220
8,000 St. Louis, Missouri Industrial
Development Authority Revenue
Refunding, (Wetterau, Inc.
Project) Series 1988, (Wachovia
Bank NA LOC),
3.900% 12/01/03**#................ 8,000
5,000 St. Louis, Missouri Industrial
Development Authority Revenue
Refunding, (Wetterau, Inc.
Project) Series 1989, (PNC Bank,
N.A. LOC),
3.900% 05/01/09**#................ 5,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 18
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
MISSOURI -- (CONTINUED)
$ 4,840 St. Louis, Missouri Planned
Industrial Expansion Authority
IDR, (Alumax Foils Project) Series
1992, (PNC Bank, N.A. LOC),
4.000% 12/01/05**#................ $ 4,840
----------
133,061
----------
NEVADA - 1.0%
1,550 Clark County, Nevada IDR, (Nevada
Cogeneration Association I
Project) Series 1991, AMT,
(Canadian Imperial Bank of
Commerce LOC),
4.100% 11/01/21**................. 1,550
12,050 Clark County, Nevada IDR, (Nevada
Cogeneration Association II
Project) Series 1990, AMT,
(Canadian Imperial Bank of
Commerce LOC),
4.100% 11/01/20**................. 12,050
10,700 Clark County, Nevada IDR, (Nevada
Cogeneration Association Project)
Series 1992, AMT, (ABN-AMRO Bank
N.V. LOC),
4.100% 12/01/22**................. 10,700
----------
24,300
----------
NEW HAMPSHIRE - 0.1%
3,075 New Hampshire State Housing Finance
Authority Single-Family Revenue,
(Mortgage Acquisition Project)
Series 1999D, AMT, (GIC),
4.000% 12/01/00................... 3,075
----------
NEW MEXICO - 0.1%
3,100 Albuquerque, New Mexico Revenue
Refunding, (Charter Hospital Inc.
Project) Series 1992, (Chase
Manhattan Bank LOC),
3.750% 03/01/14**#................ 3,100
----------
NEW YORK - 2.0%
2,775 Erie County, New York Industrial
Development Agency Civic
Facilities Revenue, (DePaul
Community Facilities, Inc.
Project) Series 1996, (Key Bank of
New York N.A. LOC),
4.000% 11/01/16**#................ 2,775
6,690 Monroe County, New York Industrial
Development Agency Civic
Facilities Revenue, (Hillside
Childrens Center Project) Series
1998, (Key Bank N.A. LOC),
4.000% 08/01/18**#................ 6,690
38,990 New York State Dormitory Authority
Revenue, Series 1998 PT-1066,
(AMBAC Insured, Merrill Lynch
SBPA),
3.910% 07/01/23**#................ 38,990
----------
48,455
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
NORTH CAROLINA - 2.6%
$ 5,000 Cabarrus County, North Carolina
Industrial Facilities and
Pollution Control Financing
Authority Revenue Refunding,
(Philip Morris Companies, Inc.
Project) Series 1992, (Philip
Morris Guarantee),
4.050% 04/01/01**#................ $ 5,000
2,420 Iredell County, North Carolina
Industrial Facilities and
Pollution Control Financing
Authority Revenue, (Sullivan
Corporation Project) Series 1996,
AMT, (Bank One Milwaukee, N.A.
LOC),
4.100% 01/01/11**#................ 2,420
4,500 Johnston County, North Carolina
Industrial Facilities and
Pollution Control Finance
Authority Revenue, (Industrial
Development Housing - Autry Mills
Project) Series 1999, AMT, (Branch
Banking and Trust LOC),
4.100% 02/01/13**................. 4,500
9,400 Lenoir County, North Carolina
Hospital Revenue, (Lenoir Memorial
Hospital Project) Series 1998,
(Wachovia Bank NA LOC),
3.900% 10/01/12**#................ 9,400
1,800 Mecklenburg County, North Carolina
Industrial Facilities and
Pollution Control Financing
Authority Revenue, (Sterigenics
International Project) Series
1996, AMT, (Comerica Bank of
California LOC),
4.050% 03/01/16**#................ 1,800
1,000 Mecklenburg County, North Carolina
Industrial Facilities and
Pollution Control Financing
Authority, (Virkler Company
Project) Series 1989, AMT, (First
Union National Bank LOC),
4.000% 12/01/04**#................ 1,000
7,700 New Hanover County, North Carolina
Industrial Facilities and
Pollution Control Financing
Authority Revenue Refunding,
(Corning, Inc. Project) Series
1997, (Wachovia Bank NA LOC),
3.900% 05/01/10**#................ 7,700
4,670 North Carolina Medical Care
Commission Health Care Facilities
Revenue, (Mission-Thomas - St.
Joseph Medical Center Project)
Series 1998, (Wachovia Bank NA
LOC),
3.900% 03/01/18**#................ 4,670
7,700 North Carolina State Medical Care
Commission Community Health Care
Facilities Revenue, (Carolina
Village Inc. Project) Series 1998,
(Wachovia Bank LOC),
3.900% 10/01/18**#................ 7,700
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 19
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
NORTH CAROLINA -- (CONTINUED)
$ 3,500 Randolph County, North Carolina
Industrial Facilities and
Pollution Control Finance
Authority Revenue, (Wayne Steel,
Inc. Project) Series 1995, AMT,
(Bank One Akron, N.A. LOC),
4.100% 09/01/05**#................ $ 3,500
9,700 Wake County, North Carolina
Industrial Facilities and
Pollution Control Financing
Authority PCR, (Carolina Power &
Light Company Project) Series
1987, AMT, (First Union National
Bank LOC),
4.050% 03/01/17**................. 9,700
6,280 Winston-Salem, North Carolina Risk
Acceptance Management Corporation
Certificates of Participation,
Series 1988, (Wachovia Bank SBPA),
3.950% 07/01/09**#................ 6,280
----------
63,670
----------
NORTH DAKOTA - 0.2%
4,250 Grand Forks, North Dakota Hospital
Facilities Revenue, (The United
Hospital Obligated Group Project)
Series 1992, (LaSalle National
Bank LOC),
4.100% 12/01/16**#................ 4,250
----------
OHIO - 2.8%
1,785 Defiance County, Ohio IDR Refunding,
(Isaac Properties Company Project)
Series 1996A, (Key Bank, N.A.
LOC),
4.000% 07/01/00#.................. 1,785
3,000 Lucas County, Ohio Facilities
Improvement Revenue, (Toledo
Zoological Society Project) Series
1997, (Key Bank, N.A. LOC),
3.900% 10/01/05**#................ 3,000
8,000 Montgomery County, Ohio Economic
Development Revenue, (The Dayton
Art Institute Project) Series
1996, (National City Bank LOC),
3.950% 05/01/26**................. 8,000
20,000 Ohio State Air Quality Development
Authority Revenue Refunding, (Ohio
Edison Project) Series 1988A,
(Toronto Dominion Bank LOC),
4.100% 02/01/15**................. 19,984
1,600 Ohio State Air Quality Development
Authority Revenue, (Cincinnati Gas
and Electric Project) Series 1985,
(J.P. Morgan of Delaware LOC),
4.100% 12/01/15**................. 1,600
525 Ohio State Water Development
Authority Promissory Revenue,
Series 1998A, (National City Bank
LOC),
4.000% 07/01/00**#................ 525
11,395 Ohio State Water Development
Authority Promissory Revenue,
Series 1999A, (National City Bank
LOC),
4.000% 05/01/01**#................ 11,395
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
OHIO -- (CONTINUED)
$ 995 Summit County, Ohio IDR Refunding,
(Keebler Company Project) Series
1993, (Bank of Nova Scotia LOC),
4.000% 03/01/05**................. $ 995
20,000 Toledo-Lucas County, Ohio Port
Authority Airport Development
Revenue, (Flightsafety
International, Inc. Project)
Series 1998-1, AMT, (Berkshire
Hathaway Guarantee),
4.050% 01/01/18**#................ 20,000
----------
67,284
----------
OKLAHOMA - 1.3%
6,000 Muskogee City and County, Oklahoma
Port Authority IDR, (Metals USA,
Inc. Project) Series 1998, AMT,
(Bank One Texas, N.A. LOC),
4.100% 05/01/23**#................ 6,000
5,000 Oklahoma Development Finance
Authority Revenue, (Seabrook Farms
Inc. Project) Series 1997, AMT,
(Bank of New York LOC),
4.000% 03/01/27**#................ 5,000
6,605 Oklahoma State Capital Improvement
Authority State Facilities
Revenue, Certificates of
Participation, Series 1999A, (MBIA
Insured),
4.500% 09/01/00................... 6,628
6,800 Oklahoma State Industrial Authority
Revenue Refunding, (Integris
Baptist Medical Center Inc.
Project), Series 1999B, (MBIA
Insured, Morgan Guaranty SBPA),
3.950% 08/15/29**................. 6,800
6,500 Tulsa, Oklahoma Industrial
Development Authority Revenue,
(Justin Industries Project) Series
1984, (Bank of New York LOC),
3.900% 10/01/14**#................ 6,500
----------
30,928
----------
OREGON - 0.8%
11,000 Multnomah County, Oregon TRAN,
Series 1999,
3.750% 06/30/00................... 11,009
2,100 Port of Portland, Oregon PCR,
(Reynolds Metals Company Project)
Series 1985, (Bank of Nova Scotia
LOC),
4.100% 12/01/09**................. 2,100
2,800 Port of Portland, Oregon Special
Obligation Revenue, (Horizon Air
Industries, Inc. Project) Series
1997, AMT, (Bank of Montreal LOC),
4.100% 06/15/27**................. 2,800
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 20
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
OREGON -- (CONTINUED)
$ 3,200 Washington County, Oregon Housing
Authority Multi-Family Housing
Revenue, (Cedar Mill Project)
Series 1995, AMT, (Bank of Nova
Scotia LOC),
4.000% 09/01/25**#................ $ 3,200
----------
19,109
----------
PENNSYLVANIA - 3.4%
8,480 Allegheny County, Pennsylvania
Hospital Development Authority
Revenue, (Dialysis Clinic Inc.
Project) Series 2000, (Wachovia
Bank N.A. LOC),
3.950% 12/01/19**................. 8,480
8,600 Allegheny County, Pennsylvania IDR,
(United Jewish Federation Project)
Series 1995B, (PNC Bank, N.A.
LOC),
4.000% 10/01/25**#................ 8,600
5,000 Montgomery County, Pennsylvania
Industrial Development Authority
Revenue, (Plymouth Woods Project)
Series 1987, (PNC Bank, N.A. LOC),
4.000% 09/01/06**#................ 5,000
1,200 Pennsylvania Economic Development
Financing Authority Development
Revenue, (Pennsylvania Bar
Institute Project) Series 1996B,
AMT, (PNC Bank, N.A. LOC),
4.100% 04/01/15**#................ 1,200
1,000 Philadelphia, Pennsylvania Authority
for Industrial Development
Revenue, (Institute for Cancer
Research - Fox Chase Cancer Center
Project) Series 1990A, (Morgan
Guaranty Trust LOC),
3.950% 07/01/13**................. 1,000
2,200 Philadelphia, Pennsylvania Authority
for Industrial Development
Revenue, (Institute for Cancer
Research - Fox Chase Cancer Center
Project) Series 1997, (Morgan
Guaranty Trust LOC),
3.950% 07/01/25**................. 2,200
16,300 Philadelphia, Pennsylvania
Redevelopment Authority Revenue,
(Southwark Plaza, LP Project)
Series 1997A, (PNC Bank, N.A.
LOC),
4.000% 12/01/03**................. 16,300
5,900 Philadelphia, Pennsylvania
Redevelopment Authority, (The
Presbyterian Home Project) Series
1998, (PNC Bank N.A. LOC),
4.000% 07/01/28**#................ 5,900
10,000 Philadelphia, Pennsylvania School
District TRAN, Series 1999A,
(First Union National Bank LOC),
4.000% 06/30/00................... 10,013
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
PENNSYLVANIA -- (CONTINUED)
$ 10,000 Philadelphia, Pennsylvania School
District TRAN, Series 1999B,
(Mellon Bank N.A. LOC),
4.000% 06/30/00................... $ 10,013
4,100 Quakertown, Pennsylvania General
Authority Revenue, (Pooled
Financing Program) Series 1996A,
(PNC Bank, N.A. LOC),
4.000% 07/01/26**................. 4,100
4,700 Westmoreland County, Pennsylvania
Industrial Development Authority
Revenue, (Elizabeth Carbide Die
Project) Series 1998A, AMT,
(National City Bank LOC),
4.100% 02/01/18**#................ 4,700
4,160 Westmoreland County, Pennsylvania
Industrial Development Authority
Revenue, (Rhodin Enterprises
Project) Series 1997, AMT, (PNC
Bank, N.A. LOC),
4.100% 04/01/17**#................ 4,160
----------
81,666
----------
RHODE ISLAND - 0.3%
7,925 Rhode Island Port Authority and
Economic Development Corporation
Energy Facilities Revenue
Refunding, (Newport Electric
Corporation Project) Series 1994,
(Bank of New York LOC),
3.900% 09/01/11**#................ 7,925
----------
SOUTH CAROLINA - 4.7%
13,500 Charleston, South Carolina TAN GO,
Series 2000,
4.600% 03/15/01................... 13,543
21,000 Greenville County, South Carolina
School District GO, Series 2000,
4.500% 03/01/01................... 21,046
5,445 Kershaw County, South Carolina IDR,
(DeRoyal Textiles, Inc. Project)
Series 1994, AMT, (Sun Trust Bank
of Nashville LOC),
4.050% 12/01/07**#................ 5,445
5,750 South Carolina Jobs Economic
Development Authority Health
Facilities Revenue, (Carolina
Village Project) Series 2000,
(Branch Banking & Trust LOC),
4.000% 02/01/22**................. 5,750
5,460 South Carolina Jobs Economic
Development Authority Health
Facilities Revenue, (Martha Franks
Baptist Retirement Center Project)
Series 1995, (Wachovia Bank LOC),
3.950% 04/01/19**#................ 5,460
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 21
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
SOUTH CAROLINA -- (CONTINUED)
$ 7,900 South Carolina Jobs Economic
Development Authority Hospital
Facilities Revenue, (Tuomey
Regional Medical Center Project)
Series 1995C, (MBIA Insured,
Wachovia Bank SBPA),
3.900% 11/01/25**................. $ 7,900
8,000 South Carolina Jobs Economic
Development Authority IDR,
(Abraham Industries LLC Project)
Series 1999, AMT, (PNC Bank N.A.
LOC),
4.100% 05/01/14**................. 8,000
4,135 South Carolina Jobs Economic
Development Authority IDR, (Kravet
Fabrics, Inc. Project) Series
1997, AMT, (Bank of New York LOC),
4.000% 03/01/12**#................ 4,135
6,900 South Carolina Jobs Economic
Development Authority Revenue,
(Alco-Lite Industries
LLC - TechnoSteel LLC Project)
Series 1997, AMT, (Wachovia Bank
LOC),
4.050% 04/01/12**#................ 6,900
20,000 South Carolina Jobs Economic
Development Authority Revenue,
P-Floats-PT328, (St. Francis
Hospital - Bon Secours Project),
Series 1999, (Merrill Lynch
Guarantee, Merrill Lynch SBPA),
4.110% 01/01/01**##(++)........... 20,000
12,775 University of South Carolina
Athletic Facilities Revenue,
Series 2000,
4.500% 02/23/01................... 12,808
1,950 York County, South Carolina PCR,
(National Rural Utilities
Cooperative, North Carolina
Electricities Project) Series
1984N-1, (CFC SBPA Insured),
3.950% 09/15/14**................. 1,950
----------
112,937
----------
SOUTH DAKOTA -- 1.3%
32,050 South Dakota State Housing
Development Authority, Series 1998
PT-168, AMT, (Banque Nationale de
Paris SBPA),
4.010% 05/01/27**#................ 32,050
----------
TENNESSEE -- 1.9%
3,000 Chattanooga, Tennessee Industrial
Development Board Industrial
Revenue, (Seaboard Farms Inc.
Project) Series 1984, (SunTrust
Bank LOC),
3.900% 06/01/04**#................ 3,000
2,500 Chattanooga - Hamilton County,
Tennessee Hospital Authority
Revenue Refunding, (Erlanger
Medical Center Project) Series
1987, (Morgan Guaranty Trust LOC),
4.000% 10/01/17**................. 2,500
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
TENNESSEE -- (CONTINUED)
$ 7,500 Knox County, Tennessee Health and
Educational Facilities Board
Educational Facilities Revenue,
(Webb School - Knoxville Project)
Series 1999, (SunTrust Bank
Nashville LOC),
3.950% 03/01/19**#................ $ 7,500
2,975 Loudon, Tennessee Water and Sewer
Revenue Refunding, Series 1996,
(Wachovia Bank LOC),
3.950% 09/01/06**#................ 2,975
4,755 Metropolitan Government, Nashville
and Davidson County, Tennessee
Industrial Development Board
Revenue Refunding, (Nashville
Apartment Properties Project)
Series 1995-2, (SunTrust Bank
Nashville LOC),
3.950% 09/01/15**#................ 4,755
3,900 Metropolitan Nashville, Tennessee
Airport Authority Special
Facilities Revenue, (American
Airlines, Inc. Project) Series
1995A, (Credit Suisse First Boston
LOC),
4.100% 10/01/12**................. 3,900
3,245 Shelby County, Tennessee Health
Educational and Housing Facilities
Board Multi-Family Housing
Revenue, (Flag Manor Project)
Series 1995, AMT, (FHLB
Guarantee),
4.000% 01/01/23**#................ 3,245
5,000 Sullivan County, Tennessee
Industrial Development Board
Revenue, (Modern Forge Company
Project) Series 1990, AMT,
(Northern Trust Company LOC),
4.050% 07/01/10**#................ 5,000
12,500 Tennessee Housing Development Agency
Revenue, Series 1999, AMT,
Mandatory Put Bond,
3.570% 08/15/00................... 12,500
----------
45,375
----------
TEXAS -- 10.2%
30,530 Alliance Airport Authority Inc.,
Texas Special Facilities Revenue,
(Federal Express Project) Series
1999PA-460, (Merrill Lynch
Guarantee, Merrill Lynch SBPA),
4.140% 04/01/21**#(++)............ 30,530
3,100 Bexar County, Texas Health
Facilities Development Corporation
Revenue, (Air Force Retirement
Community Project) Series 1985B,
(Rabobank Nederland LOC),
3.900% 03/01/12**................. 3,100
7,900 Bexar County, Texas Health
Facilities Development Corporation
Revenue, (Army Retirement
Community Project) Series 1985B,
(Rabobank Nederland LOC),
3.900% 07/01/11**................. 7,900
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 22
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
TEXAS -- (CONTINUED)
$ 10,190 Bexar County, Texas Housing Finance
Corporation Multi-Family Housing
Revenue, Series 1998 PT-1041, AMT,
(Merrill Lynch Guarantee, Merrill
Lynch SBPA),
4.110% 06/01/35**#(++)............ $ 10,190
1,000 Brazos River, Texas Habor Navigation
District Revenue, (Hoffman - La
Roche Inc. Project) Series 1985,
(Wachovia Bank of North Carolina
LOC),
3.830% 04/01/02**#................ 1,000
6,200 Chambers County, Texas Industrial
Development Corporation Revenue,
(Ecolochem Inc. Project) Series
1999, AMT, (Wachovia Bank N.A.
LOC),
4.050% 03/01/14**#................ 6,200
13,000 Dallas, Texas Area Rapid Transit
Revenue, (North Central Light Rail
Project) Series 2000, (Dexia
Credit Local De France LOC),
3.900% 01/05/05**................. 13,000
8,185 El Paso, Texas Housing Finance
Corporation Multi-Family Housing
Revenue, (Viva Apartments Project)
Series 1993, AMT, (General
Electric Capital Corporation
Guarantee),
4.100% 09/01/23**#................ 8,185
2,600 Grapevine, Texas Industrial
Development Corporation Revenue,
(American Airlines, Inc. Project)
Series 1984A-1, (Bayerische
Landesbank LOC),
4.100% 12/01/24**................. 2,600
300 Grapevine, Texas Industrial
Development Corporation Revenue,
(American Airlines, Inc. Project)
Series 1984A-3, (Bayerische
Landesbank LOC),
4.100% 12/01/24**................. 300
800 Grapevine, Texas Industrial
Development Corporation, Revenue,
(American Airlines, Inc. Project)
Series 1984A-4, (Bayerische
Landesbank LOC),
4.100% 12/01/24**................. 800
10,600 Guadalupe-Blanco, Texas River
Authority Revenue Refunding,
(Central Power & Light Company
Project) Series 1995, (ABN AMRO
Bank N.V. LOC),
4.000% 11/01/15**................. 10,600
2,680 Harris County, Texas Industrial
Development Corporation IDR,
(Forged Products, Inc. Project)
Series 1996, AMT, (Bank One Texas,
N.A. LOC),
4.100% 05/01/03**#................ 2,680
2,805 Hillsboro, Texas Industrial
Development Corporation Revenue,
(Lamraft, LP Project) Series 1997,
AMT, (First Commercial Bank LOC),
4.200% 07/01/13**................. 2,805
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
TEXAS -- (CONTINUED)
$ 8,000 Houston, Texas Independent School
District GO, Series 1998,
4.000% 07/15/00................... $ 8,013
400 Lone Star, Texas Airport Improvement
Authority Revenue, (American
Airlines, Inc. Project) Series
1984A-1, (Royal Bank of Canada
LOC),
4.100% 12/01/14**................. 400
1,300 Lone Star, Texas Airport Improvement
Authority Revenue, (American
Airlines, Inc. Project) Series
1984A-2, (Royal Bank of Canada
LOC),
4.100% 12/01/14**................. 1,300
2,100 Lone Star, Texas Airport Improvement
Authority Revenue, (American
Airlines, Inc. Project) Series
1984B-1, (Royal Bank of Canada
LOC),
4.100% 12/01/14**................. 2,100
500 Lone Star, Texas Airport Improvement
Authority Revenue, (American
Airlines, Inc. Project) Series
1984B-3, (Royal Bank of Canada
LOC),
4.100% 12/01/14**................. 500
7,000 Montgomery County, Texas IDR,
(Houston Area Research Center
Project) Series 1985, (Banque
Nationale de Paris LOC),
3.950% 12/01/15**................. 7,000
10,200 Port Development Corporation of
Texas Marine Terminal Revenue,
(Pasadena Terminal Company, Inc.
Project) Series 1984, (Deutsche
Bank LOC),
4.150% 12/01/04**#................ 10,200
1,200 Port of Port Arthur, Texas
Navigation District Revenue
Refunding, (Texaco, Inc. Project)
Series 1994,
4.000% 10/01/24**................. 1,200
1,900 Sabine River Authority, Texas PCR
Refunding, (Texas Utilities
Electric Company Project) Series
1996, (AMBAC Insured, Bank of New
York SBPA),
4.000% 03/01/26**................. 1,900
9,180 Sabine River Authority, Texas PCR,
(Texas Utilities Electric Company
Project) Series 1995A, AMT,
(Morgan Guaranty Trust LOC),
4.100% 04/01/30**................. 9,180
100,000 Texas State TRAN, Series 1999A,
4.500% 08/31/00................... 100,323
5,300 Trinity River Authority of Texas PCR
Refunding, (Texas Utilities
Electric Company Project) Series
1997A, AMT, (MBIA Insured, Bank of
New York SBPA),
3.950% 07/01/22**................. 5,300
----------
247,306
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 23
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
UTAH -- 1.3%
$ 14,750 Davis County, Utah School District
TAN, Series 1999,
3.600% 06/30/00................... $ 14,757
1,800 Murray City, Utah IDR, (Zevex, Inc.
Project) Series 1996, AMT, (Bank
One Arizona, N.A. LOC),
4.100% 10/01/16**#................ 1,800
3,200 Murray City, Utah Industrial
Development Authority Revenue,
(Hunter Douglas Real Property
Project) Series 1994, AMT,
(ABN-AMRO Bank N.V. LOC),
4.050% 09/01/14**#................ 3,200
12,500 Utah State Board of Regents Student
Loan Revenue, Series 1988B, (AMBAC
Insured, Drescher Bank Ag SBPA),
3.850% 11/01/00**................. 12,500
----------
32,257
----------
VIRGINIA -- 0.7%
2,500 Colonial Heights, Virginia
Industrial Development Authority
Revenue Refunding, (Philip Morris
Companies, Inc. Project) Series
1992, (Phillip Morris Inc.
Guarantee),
4.050% 03/01/05**#................ 2,500
2,000 Fluvanna County, Virginia Industrial
Development Authority IDR,
(Edgecomb Metals Company Project)
Series 1984, (Wells Fargo Bank
LOC),
3.900% 12/01/09**#................ 2,000
3,900 Greensville County, Virginia
Industrial Development Authority
Revenue, (Perdue Farms, Inc.
Project) Series 1996, AMT,
(SunTrust Bank LOC),
4.050% 10/01/06**#................ 3,900
2,000 Spotsylvania County, Virginia
Industrial Development Authority
IDR, (Carlisle Corporation
Project) Series 1993, (SunTrust
Bank LOC),
3.950% 06/01/08**#................ 2,000
5,500 Virginia State College Building
Authority Educational Facilities
Revenue, (University of Richmond
Project) Series 1996, (Crestar
Bank SBPA),
3.900% 11/01/26**................. 5,500
----------
15,900
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
WEST VIRGINIA -- 1.0%
$ 1,500 Marshall County, West Virginia PCR,
(Mountaineer Carbon Company
Project) Series 1985, (BP Amoco
plc Guarantee),
3.950% 12/01/20**................. $ 1,500
21,750 West Virginia State Hospital Finance
Authority Revenue, (St. Mary's
Hospital Project) Series 1987,
(Bank One of West Virginia LOC),
3.970% 10/01/12**#................ 21,750
----------
23,250
----------
WISCONSIN -- 1.1%
4,000 Menomonee Falls, Wisconsin
Industrial Development Authority
IDR, (Jema, LLC Project) Series
1994, AMT, (Bank One Milwaukee,
N.A. LOC),
4.100% 09/01/14**#................ 4,000
11,100 Wisconsin State Health and
Educational Facilities Authority
Revenue, (St. Luke's Medical
Center Project) Series 1987,
(First National Bank of Chicago
LOC),
3.950% 12/01/17**#................ 11,100
12,000 Wisconsin State Health and
Educational Facilities Authority
Revenue, (Wheaton Franciscan
Services Project) Series 1997,
(Toronto Dominion Bank LOC),
3.850% 08/15/16**#................ 12,000
----------
27,100
----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $2,417,781)................. 2,417,781
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE> 24
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
-----------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 0.0%+
50 AIM Tax-Exempt Fund................ $ 50
225 Federated Tax-Exempt Money Market
Fund............................. 225
----------
TOTAL INVESTMENT COMPANIES
(Cost $275)...................... 275
----------
TOTAL INVESTMENTS
(Cost $2,418,056*)........ 99.9% 2,418,056
----------
OTHER ASSETS AND
LIABILITIES (NET)......... 0.1%
Cash............................... $ 29
Receivable for Fund shares sold.... 569
Interest receivable................ 14,416
Receivable from investment
advisor.......................... 44
Payable for Fund shares redeemed... (14)
Administration fee payable......... (206)
Shareholder servicing and
distribution fees payable........ (120)
Dividends payable.................. (6,540)
Accrued Trustees'/Directors' fees
and expenses..................... (93)
Payable to transfer agent.......... (4,546)
Accrued expenses and other
liabilities...................... (222)
----------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)................ 3,317
----------
NET ASSETS.................. 100.0% $2,421,373
==========
NET ASSETS CONSIST OF:
Undistributed net investment
income........................... $ 51
Accumulated net realized gain on
investments sold................. 2
Paid-in capital.................... 2,421,320
----------
NET ASSETS......................... $2,421,373
==========
</TABLE>
<TABLE>
<CAPTION>
VALUE
-----------------------------------------------------------
<C> <S> <C> <C>
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
SHARE
PRIMARY A SHARES:
($2,037,742,344 / 2,038,306,968
shares outstanding).............. $1.00
-----
-----
PRIMARY B SHARES:
($6,834,502 / 6,826,928 shares
outstanding)..................... $1.00
-----
-----
INVESTOR A SHARES:
($43,934,230 / 43,899,612 shares
outstanding)..................... $1.00
-----
-----
INVESTOR B SHARES:
($204,150,158 / 204,013,809 shares
outstanding)..................... $1.00
-----
-----
INVESTOR C SHARES:
($325,844 / 325,698 shares
outstanding)..................... $1.00
-----
-----
DAILY SHARES:
($128,386,241 / 128,218,842 shares
outstanding)..................... $1.00
-----
-----
</TABLE>
---------------
* Aggregate cost for Federal tax purposes.
** Variable rate demand notes. The interest rate shown reflects the rate in
effect at March 31, 2000. These securities are subject to demand features of
either one, seven or thirty days.
+ Amount represents less than 0.1%.
(++) Restricted security (Note 5).
# Securities are not registered under the Securities Act of 1933. These
securities may be resold in transactions exempt from registration to
qualified institutional buyers.
## 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.
Nations Tax Exempt Fund had the following industry concentrations greater than
10% at March 31, 2000 (as a percentage of net assets):
HealthCare Revenue 13.5%
Industrial Facilities Revenue 11.8%
Housing Revenue 10.7%
Pollution Control Revenue 10.2%
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE> 25
NATIONS FUNDS
Nations Treasury Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS -- 34.4%
U.S. TREASURY BILLS -- 5.3%
$ 75,000 Discount note 04/27/00(+)........... $ 74,691
25,000 Discount note 06/08/00(+)........... 24,746
----------
99,437
----------
U.S. TREASURY NOTES -- 29.1%
50,000 5.625% 04/30/00..................... 49,993
45,000 6.375% 05/15/00(+).................. 45,067
70,000 5.500% 05/31/00(+).................. 70,005
70,000 5.375% 06/30/00(+).................. 69,983
50,000 5.875% 06/30/00(+).................. 50,036
25,000 5.375% 07/31/00(+).................. 24,993
75,000 6.000% 08/15/00..................... 74,956
70,000 6.250% 08/31/00(+).................. 70,143
20,000 4.000% 10/31/00..................... 19,779
50,000 5.750% 11/15/00..................... 49,855
25,000 5.375% 02/15/01..................... 24,781
----------
549,591
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $649,028)................... 649,028
----------
REPURCHASE AGREEMENTS -- 83.7%
470,000 Agreement with ABN AMRO Inc.,
6.100% dated 03/31/00 to be
repurchased at $470,239 on
04/03/00 collateralized by:
$479,400 U.S. Treasury Strips,
Interest Only, due
08/15/07 - 05/15/15............... 470,000
93,000 Agreement with Barclays Capital
Inc., 6.100% dated 03/31/00 to be
repurchased at $93,047 on 04/03/00
collateralized by: $94,860 U.S.
Treasury Inflation Linked Note,
3.625% due 07/15/02............... 93,000
93,000 Agreement with Bear, Stearns and
Company, Inc., 6.200% dated
03/31/00 to be repurchased at
$93,048 on 04/03/00 collateralized
by: $97,407 GNMA, 6.500% - 7.500%
due 10/15/28 - 05/15/29........... 93,000
50,000 Agreement with Deutsche Bank
Securities Inc., 5.920%, with a
final maturity date of 05/15/00.
Interest receivable as of March
31, 2000 was $140, collateralized
by: $51,001 U.S. Treasury Note,
5.500% due
08/31/01(++)...................... 50,000
93,000 Agreement with First Union Capital
Markets, 6.125% dated 03/31/00 to
be repurchased at $93,047 on
04/03/00 collateralized by:
$94,860 GNMA II, 7.125% due
11/20/27.......................... 93,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
$ 93,000 Agreement with Goldman Sachs and
Company, 6.150% dated 03/31/00 to
be repurchased at $93,048 on
04/03/00 collateralized by:
$91,823 GNMA, 5.500% - 12.500% due
05/15/00 - 03/15/30; $3,037 GNMA
II 4.500% - 11.750% due
11/20/00 - 01/20/30............... $ 93,000
93,000 Agreement with J.P. Morgan
Securities Inc., 6.150% dated
03/31/00 to be repurchased at
$93,048 on 04/03/00 collateralized
by: $85,515 GNMA, 6.500% - 8.000%
due 12/15/22 - 01/15/30; $9,345
GNMA II, 7.500% due 04/20/29...... 93,000
75,000 Agreement with Lehman Brothers Inc.,
5.960%, with a final maturity date
of 05/16/00. Interest receivable
as of March 31, 2000 was $112,
collateralized by: $76,491 U.S.
Treasury Bond, 5.250% - 8.500% due
02/15/20 - 02/15/29(++)........... 75,000
59,000 Agreement with Salomon Smith Barney
Inc., 6.120% dated 03/31/00 to be
repurchased at $59,030 on 04/03/00
collateralized by: $60,180 GNMA,
6.500% - 8.000% due 09/15/28 -
12/15/28.......................... 59,000
363,520 Agreement with Salomon Smith Barney,
Inc., Interest is payable monthly.
The agreement is terminable by the
Fund daily. The final maturity
date of the agreement is 04/03/00
collateralized by: $198,338 U.S.
Treasury Note, 6.250% - 7.000% due
10/31/01 - 07/15/06; $172,599 U.S.
Treasury Bill due 04/20/00++...... 363,520
93,000 Agreement with Westdeutsche
Landesbank, Girozentrale, 6.200%
dated 03/31/00 to be repurchased
at $93,048 on 04/03/00
collateralized by: $94,860 GNMA,
7.000% due 07/15/29............... 93,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $1,575,520)................. 1,575,520
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE> 26
NATIONS FUNDS
Nations Treasury Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 1.5%
26,428 AIM Treasury Fund.................... $ 26,428
2,683 Dreyfus Treasury Cash Management
Fund............................... 2,683
----------
TOTAL INVESTMENT COMPANIES
(Cost $29,111)..................... 29,111
----------
TOTAL INVESTMENTS
(Cost $2,253,659*).......... 119.6% 2,253,659
----------
OTHER ASSETS AND
LIABILITIES (NET)........... (19.6)%
Receivable for Fund shares sold...... $ 512
Interest receivable.................. 8,637
Payable for reverse repurchase
agreements......................... (363,520)
Payable for Fund shares redeemed..... (2)
Investment advisory fee payable...... (521)
Administration fee payable........... (127)
Shareholder servicing and
distribution fees payable.......... (402)
Dividends payable.................... (3,366)
Accrued Trustees'/Directors' fees and
expenses........................... (152)
Payable to transfer agent............ (9,435)
Accrued expenses and other
liabilities........................ (749)
----------
TOTAL OTHER ASSETS AND LIABILITIES
(NET).............................. (369,125)
----------
NET ASSETS.................... 100.0% $1,884,534
==========
NET ASSETS CONSIST OF:
Accumulated net realized loss on
investments sold................... $ (191)
Paid-in capital...................... 1,884,725
----------
NET ASSETS........................... $1,884,534
==========
</TABLE>
<TABLE>
<CAPTION>
VALUE
------------------------------------------------------------
<C> <S> <C> <C>
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
PRIMARY A SHARES:
($503,511,340 / 503,807,692 shares
outstanding)....................... $1.00
-----
-----
PRIMARY B SHARES:
($11,496,372 / 11,503,037 shares
outstanding)....................... $1.00
-----
-----
INVESTOR A SHARES:
($1,044,725,874 / 1,045,305,572
shares outstanding)................ $1.00
-----
-----
INVESTOR B SHARES:
($196,331,468 / 196,444,982 shares
outstanding)....................... $1.00
-----
-----
INVESTOR C SHARES:
($170,072 / 170,126 shares
outstanding)......................... $1.00
-----
-----
DAILY SHARES:
($128,299,188 / 128,392,337 shares
outstanding)....................... $1.00
-----
-----
</TABLE>
---------------
* Aggregate cost for Federal tax purposes.
(+) Denotes security, or a portion thereof, subject to repurchase under reverse
repurchase agreement as of March 31, 2000 (Note 1).
(++) Restricted security (Note 5).
++ Security segregated as collateral for reverse repurchase agreement.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE> 27
NATIONS FUNDS
Nations Government Money Market Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS -- 105.9%
FEDERAL FARM CREDIT BANK
(FFCB) -- 7.3%
$ 20,650 Discount note 04/18/00........ $ 20,596
7,608 6.350% 02/01/01............... 7,596
--------
28,192
--------
FEDERAL HOME LOAN BANK (FHLB) -- 83.1%
40,330 Discount note 04/03/00........ 40,316
8,000 6.155%+ 04/03/00++............ 8,000
25,000 6.210%+ 04/03/00++............ 24,997
10,000 5.819%+ 04/12/00++............ 9,999
18,000 5.956%+ 04/21/00++............ 17,997
8,000 5.050% 04/26/00............... 8,000
10,000 5.415% 06/14/00............... 9,997
40,000 Discount note 06/23/00........ 39,448
125,000 Discount note 06/30/00........ 123,115
5,000 5.750% 09/01/00............... 4,999
5,000 5.875% 09/07/00............... 4,999
10,000 6.500% 03/15/01............... 9,991
20,000 6.660% 04/06/01............... 19,984
--------
321,842
--------
STUDENT LOAN MARKETING ASSOCIATION
(SLMA) -- 15.5%
10,000 6.585%+ 04/04/00++............ 9,998
25,000 6.585%+ 04/04/00++............ 24,996
25,000 6.647%+ 04/04/00++............ 24,994
--------
59,988
--------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS
(Cost $410,022)............. 410,022
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
(000)
-----------------------------------------------------------
<C> <S> <C> <C>
TOTAL INVESTMENTS
(Cost $410,022*)............ 105.9% $410,022
--------
OTHER ASSETS AND
LIABILITIES (NET)........... (5.9)%
Cash................................. $ 1
Receivable for Fund shares sold...... 354
Interest receivable.................. 1,323
Investment advisory fee payable...... (35)
Administration fee payable........... (27)
Shareholder servicing and
distribution fees payable.......... (30)
Dividends payable.................... (1,712)
Payable for investment securities
purchased.......................... (19,984)
Accrued Trustees'/Directors' fees and
expenses........................... (35)
Payable to transfer agent............ (2,616)
Accrued expenses and other
liabilities........................ (66)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET).............................. (22,827)
--------
NET ASSETS.................... 100.0% $387,195
========
NET ASSETS CONSIST OF:
Accumulated net realized loss on
investments sold................... $ (60)
Paid-in capital...................... 387,255
--------
NET ASSETS........................... $387,195
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
PRIMARY A SHARES:
($270,879,208 / 270,918,288 shares
outstanding)....................... $1.00
-----
-----
PRIMARY B SHARES:
($583,129 / 583,485 shares
outstanding)....................... $1.00
-----
-----
INVESTOR A SHARES:
($16,002,353 / 16,004,496 shares
outstanding)....................... $1.00
-----
-----
INVESTOR B SHARES:
($81,333,779 / 81,348,450 shares
outstanding)....................... $1.00
-----
-----
INVESTOR C SHARES:
($458,123 / 458,130 shares
outstanding)....................... $1.00
-----
-----
DAILY SHARES:
($17,938,880 / 17,942,551 shares
outstanding)....................... $1.00
-----
-----
</TABLE>
---------------
* Aggregate cost for Federal tax purposes.
+ Floating rate security. The interest rate shown reflects the rate in effect
at March 31, 2000.
++ Reset date. Interest rates reset either daily, weekly or monthly.
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE> 28
NATIONS FUNDS
Nations Prime Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
BANK OBLIGATIONS -- 32.8%
BANK NOTES -- 7.1%
First Union National Bank
$ 50,000 6.160%+ 04/01/00++.................. $ 50,000
32,000 6.300%+ 04/01/00++.................. 32,000
75,000 6.410%+ 04/01/00++.................. 74,999
50,000 6.490%+ 04/01/00++.................. 50,000
National City Bank
50,000 6.735%+ 04/04/00++.................. 49,988
50,000 6.151%+ 04/29/00++.................. 49,981
25,000 6.730% 02/09/01..................... 24,990
50,000 Northern Rock plc 50,000
6.134%+ 06/14/00++##..............
----------
381,958
----------
CERTIFICATES OF DEPOSIT -- YANKEE -- 11.8%
38,000 Barclays Bank plc, (New York) 37,984
6.680% 02/12/01...................
Commerzbank AG, (New York)
25,000 5.770% 07/03/00..................... 24,998
25,000 6.700% 02/20/01..................... 24,989
50,000 6.750% 02/22/01..................... 49,979
25,000 Credit Locale de France/Credit 24,968
Communal de Belgique, (New York)
5.960% 10/02/00...................
Deutsche Bank AG, (New York)
50,000 6.150% 10/10/00..................... 49,987
25,000 6.700% 02/28/01..................... 24,989
50,000 6.700% 03/14/01..................... 49,977
National Bank of Canada, (New York)
40,000 5.150% 04/26/00..................... 39,999
35,000 5.730% 06/28/00..................... 34,998
75,000 6.035% 09/25/00..................... 74,991
25,000 6.750% 02/09/01..................... 24,992
Rabobank Nederland, (New York)
50,000 6.490% 01/29/01..................... 49,980
25,000 6.600% 02/01/01..................... 24,990
Westdeutsche Landesbank,
Girozentrale
50,000 6.050% 05/23/00..................... 50,000
50,000 6.100% 06/15/00..................... 50,000
----------
637,821
----------
TIME DEPOSITS -- EURO -- 13.9%
105,000 Credit Agricole 105,000
6.250% 04/03/00...................
150,000 Deutsche Bank 150,000
6.313% 04/03/00...................
100,000 First National Bank, Chicago 100,000
6.320% 04/03/00...................
250,000 Societe Generale
6.250% 04/03/00..................... 250,000
150,000 Westdeutsche Landesbank, 150,000
Girozentrale
6.250% 04/03/00...................
----------
755,000
----------
TOTAL BANK OBLIGATIONS
(Cost $1,774,779)................... 1,774,779
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
CORPORATE OBLIGATIONS -- 52.3%
COMMERCIAL PAPER -- 39.5%
Amstel Funding Corporation
$ 50,000 Discount note 06/15/00#............. $ 49,365
75,000 Discount note 06/16/00#............. 74,029
20,160 Aon Corporation 19,931
Discount note 06/08/00............
Barton Capital Corporation
45,024 Discount note 04/03/00.............. 45,008
40,000 Discount note 04/26/00#............. 39,832
45,000 CC (USA) Inc. 44,694
Discount note 05/12/00#...........
Concord Minutemen Capital Company
LLC
100,155 Discount note 04/05/00#............. 100,087
75,000 Discount note 04/06/00#............. 74,937
55,000 Discount note 05/02/00#............. 54,711
25,000 Discount note 07/20/00#............. 24,525
150,000 Countrywide Home Loans, Inc. 149,949
Discount note 04/03/00............
30,000 Edison Securitization LLC 29,767
Discount note 05/18/00#...........
25,000 Finova Capital Corporation 24,813
Discount note 05/16/00............
Galaxy Funding Corporation
25,000 Discount note 05/15/00#............. 24,818
36,280 Discount note 06/12/00#............. 35,837
75,000 Discount note 06/22/00.............. 73,944
75,000 Discount note 06/28/00#............. 73,874
50,000 GE Capital International Funding 49,736
Inc.
Discount note 05/03/00#...........
50,000 General Electric Capital Corporation 49,982
Discount note 04/03/00............
14,000 Hitachi America 13,584
Discount note 09/18/00............
30,190 International Securitization 29,890
Corporation
Discount note 05/31/00#...........
MCI WorldCom, Inc.
25,000 Discount note 05/10/00#............. 24,838
25,000 Discount note 05/15/00#............. 24,817
MOAT Funding LLC
41,570 Discount note 05/03/00#............. 41,345
50,000 Discount note 05/04/00#............. 49,726
21,247 Discount note 07/05/00#............. 20,900
Morgan Stanley Dean Witter and
Company
79,700 Discount note 06/13/00.............. 78,719
50,000 Discount note 06/20/00.............. 49,322
Ness LLC
50,000 Discount note 06/19/00#............. 49,331
75,000 Discount note 07/19/00#............. 73,592
Sigma Finance, Inc.
70,000 Discount note 06/05/00.............. 69,230
50,000 Discount note 07/14/00#............. 49,104
18,800 Discount note 07/25/00#............. 18,426
18,830 Discount note 07/27/00#............. 18,449
Surrey Funding Corporation
75,000 Discount note 04/03/00.............. 74,975
50,000 Discount note 04/05/00#............. 49,967
250,000 UBS Finance (Delaware) Inc. 249,913
Discount note 04/03/00............
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE> 29
NATIONS FUNDS
Nations Prime Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
$ 70,000 Variable Funding Capital Corporation $ 69,964
Discount note 04/04/00#...........
38,173 Victory Receivables Corporation
Discount note 04/25/00#............. 38,022
----------
2,133,953
----------
CORPORATE BONDS AND NOTES -- 12.8%
20,000 Abbey National Treasury Services plc 19,999
5.050% 04/17/00...................
25,000 Bank One Corporation 25,003
6.180%+ 06/08/00++................
43,000 Bayerische Landesbank 42,963
6.030%+ 06/15/00++................
Bear, Stearns and Company, Inc.
50,000 6.330%+ 04/01/00++.................. 50,000
50,000 6.183%+ 04/30/00++.................. 50,000
25,000 5.750% 06/28/00..................... 25,000
Credit Suisse First Boston, Inc.
35,000 6.310%+ 06/21/00++.................. 35,000
15,000 6.310%+ 06/21/00++.................. 15,000
75,000 Ford Motor Credit Company 74,976
6.058%+ 05/18/00++................
50,000 General Electric Capital Corporation 50,000
6.049%+ 05/12/00++................
30,000 General Motors Acceptance 29,997
Corporation
5.750% 07/28/00...................
25,000 Goldman Sachs Group, Inc. 25,000
6.100% 08/21/00...................
27,000 GTE Corporation 26,997
6.175%+ 06/12/00++................
Lehman Brothers Holdings Inc.
25,000 6.160%+ 05/22/00++.................. 25,000
25,000 6.182% 08/04/00..................... 25,000
Links Finance LLC
25,000 6.110%+ 05/16/00++##................ 24,998
10,000 6.290% 10/18/00##................... 10,000
Morgan Stanley Dean Witter and
Company
50,000 6.250%+ 06/15/00++.................. 50,000
Sigma Finance, Inc.
50,000 6.315%+ 04/01/00++##................ 50,000
25,000 5.440% 05/24/00##................... 25,000
15,000 5.800% 07/24/00##................... 15,000
----------
694,933
----------
TOTAL CORPORATE OBLIGATIONS
(Cost $2,828,886)................... 2,828,886
----------
FUNDING AGREEMENTS -- 10.9%
Anchor National Life Insurance
Company
25,000 6.064%+ 04/01/00++(++).............. 25,000
50,000 6.410%+ 04/01/00++(++).............. 50,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C>
$ 50,000 Commonwealth Life Insurance Company
Inc.
6.400%+ 04/01/00++(++).............. $ 50,000
50,000 First Allmerica Financial Life 50,000
Insurance Company
6.180%+ 05/24/00++(++)............
GE Financial Assurance/Life of
Virginia
50,000 5.845%+ 04/07/00+(++)............... 50,000
25,000 5.911%+ 04/07/00+(++)............... 25,000
60,000 Life Insurance Company of Georgia 60,000
6.104%+ 04/01/00++(++)............
Metropolitan Life Insurance Company
45,000 6.130%+ 04/07/00+(++)............... 45,000
45,000 6.130%+ 04/07/00+(++)............... 45,000
Monumental Life Insurance Company
Inc.
62,000 6.100%+ 04/01/00++(++).............. 62,000
10,000 6.100%+ 04/01/00++(++).............. 10,000
Monumental Security Life Insurance
Company
20,000 6.100%+ 04/01/00++(++).............. 20,000
20,000 6.130%+ 04/01/00++(++).............. 20,000
50,000 Sun America Life Insurance Company 50,000
of America
6.094%+ 04/01/00++(++)............
25,000 Travelers Life Insurance Company 25,000
5.973%+ 04/01/00++(++)............
----------
TOTAL FUNDING AGREEMENTS
(Cost $587,000)..................... 587,000
----------
REPURCHASE AGREEMENTS -- 4.1%
75,000 Agreement with Lehman Brothers Inc., 75,000
6.300% dated 03/31/00 to be
repurchased at $75,039 on 04/03/00
collateralized by: $28,867 FNMA,
5.625% due 05/14/04; $47,622 FHLB,
discount note due 06/15/09........
150,000 Agreement with Salomon Smith Barney 150,000
Inc., 6.250% dated 03/31/00 to be
repurchased at $150,078 on
04/03/00 collateralized by:
$104,439 FHLB, discount note due
07/31/00 - 06/25/12; $49,239
FHLMC, discount note due 12/15/17;
$948 FNMA,
7.250% due 01/15/10 - 03/28/28....
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $225,000)..................... 225,000
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE> 30
NATIONS FUNDS
Nations Prime Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
-----------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 1.4%
59,844 AIM Liquid Asset Portfolio......... $ 59,844
2,917 AIM Prime Fund..................... 2,917
11,615 Dreyfus Cash Management Plus
Fund............................. 11,615
----------
TOTAL INVESTMENT COMPANIES
(Cost $74,376)..................... 74,376
----------
TOTAL INVESTMENTS
(Cost $5,490,041*)........ 101.5% 5,490,041
----------
OTHER ASSETS AND LIABILITIES
(NET)..................... (1.5)%
Receivable for Fund shares sold.... $ 3,876
Interest receivable................ 27,759
Payable for Fund shares redeemed... (20)
Investment advisory fee payable.... (1,714)
Administration fee payable......... (368)
Shareholder servicing and
distribution fees payable........ (942)
Due to custodian................... (86)
Dividends payable.................. (17,688)
Accrued Trustees'/Directors' fees
and expenses..................... (224)
Payable to transfer agent.......... (90,745)
Accrued expenses and other
liabilities...................... (968)
----------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................ (81,120)
----------
NET ASSETS.................. 100.0% $5,408,921
==========
NET ASSETS CONSIST OF:
Accumulated net realized loss on
investments sold................. $ (667)
Paid-in capital.................... 5,409,588
----------
NET ASSETS......................... $5,408,921
==========
</TABLE>
<TABLE>
<CAPTION>
VALUE
-----------------------------------------------------------
<C> <S> <C> <C>
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
PRIMARY A SHARES:
($2,742,000,796 / 2,742,491,599
shares outstanding).............. $1.00
==========
PRIMARY B SHARES:
($83,729,607 / 83,733,331 shares
outstanding)..................... $1.00
==========
INVESTOR A SHARES:
($589,804,395 / 589,911,124 shares
outstanding)..................... $1.00
==========
INVESTOR B SHARES:
($730,983,798 / 731,097,425 shares
outstanding)..................... $1.00
==========
INVESTOR C SHARES:
($8,824,106 / 8,826,115 shares
outstanding)..................... $1.00
==========
DAILY SHARES:
($1,234,026,286 / 1,234,430,141
shares outstanding).............. $1.00
==========
MARSICO SHARES:
($19,551,551 / 19,551,682 shares
outstanding)..................... $1.00
==========
</TABLE>
---------------
* Aggregate cost for Federal tax purposes.
+ Floating rate security. The interest rate shown reflects the rate in effect
at March 31, 2000.
++ Reset date. Interest rates reset either daily, weekly, monthly, quarterly or
semi-annually.
(++) Restricted security (Note 5).
+ Security subject to a demand feature which allows the fund to put the
security back to the issuer within 7 to 180 calendar days. The interest rate
shown reflects the rate in effect at March 31, 2000.
# Securities are not registered under the Securities Act of 1933. These
securities may be resold in transactions exempt from registration to
qualified institutional buyers.
## 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
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
BAN Bond Anticipation Note
CFC Cooperative Finance Corporation
FGIC Financial Guaranty Insurance Corporation
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GIC Guaranteed Investment Contracts
GO General Obligation
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
SBPA Standby Bond Purchase Agreement
SLMA Student Loan Marketing Association
TAN Tax Anticipation Note
TRAN Tax and Revenue Anticipation Note
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE> 32
NATIONS FUNDS
STATEMENTS OF OPERATIONS
For the year ended March 31, 2000
<TABLE>
GOVERNMENT
TAX EXEMPT TREASURY MONEY MARKET PRIME
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
INVESTMENT INCOME:
Interest Income.................................... $ 84,076 $ 109,881 $ 25,492 $ 327,443
Dividend Income.................................... 4 -- -- --
-------------- -------------- -------------- --------------
Total Investment income........................ 84,080 109,881 25,492 327,443
-------------- -------------- -------------- --------------
EXPENSES:
Investment advisory fee............................ 6,533 4,245 1,231 12,019
Administration fee................................. 2,406 2,112 478 5,978
Transfer agent fees................................ 422 380 91 1,058
Custodian fees..................................... 136 150 32 343
Legal and audit fees............................... 119 113 80 188
Registration and filing fees....................... 79 89 78 120
Trustees'/Directors' fees and expenses............. 19 19 19 19
Other.............................................. 370 221 112 978
-------------- -------------- -------------- --------------
Subtotal....................................... 10,084 7,329 2,121 20,703
Shareholder servicing and distribution fees:
Primary B Shares................................. 24 36 3 57
Investor A Shares................................ 160 3,801 69 2,346
Investor B Shares................................ 741 790 282 2,401
Investor C Shares................................ 1 1 1 30
Daily Shares..................................... 1,269 1,164 231 12,744
Marsico Shares................................... -- -- -- 53
-------------- -------------- -------------- --------------
Total expenses................................. 12,279 13,121 2,707 38,334
Fees waived by investment adviser, administrator
and/or distributor............................... (3,475) (1,532) (833) (7,045)
Fees reduced by credits allowed by the custodian... -- (9) --* (5)
-------------- -------------- -------------- --------------
Net expenses................................... 8,804 11,580 1,874 31,284
-------------- -------------- -------------- --------------
NET INVESTMENT INCOME.............................. 75,276 98,301 23,618 296,159
-------------- -------------- -------------- --------------
NET REALIZED GAIN/(LOSS) ON INVESTMENTS:........... 2 -- 1 (41)
-------------- -------------- -------------- --------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.................................. $ 75,278 $ 98,301 $ 23,619 $ 296,118
============== ============== ============== ==============
</TABLE>
---------------
* Amount represents less than $500.
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE> 33
[This page intentionally left blank.]
29
<PAGE> 34
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
TAX EXEMPT
------------------------------
YEAR ENDED YEAR ENDED
3/31/00 3/31/99
------------------------------
<S> <C> <C>
(IN THOUSANDS)
Net investment income....................................... $ 75,276 $ 82,678
Net realized gain/(loss) on investments..................... 2 165
-------------- --------------
Net increase/(decrease) in net assets resulting from
operations................................................ 75,278 82,843
Distributions to shareholders from net investment income:
Primary A Shares.......................................... (62,608) (65,819)
Primary B Shares.......................................... (285) (273)
Investor A Shares......................................... (1,300) (3,650)
Investor B Shares......................................... (6,269) (7,511)
Investor C Shares......................................... (10) (964)
Daily Shares.............................................. (4,804) (4,469)
Marsico Shares............................................ -- --
Net increase/(decrease) in net assets from Fund share
transactions.............................................. (367,603) 277,351
-------------- --------------
Net increase/(decrease) in net assets....................... (367,601) 277,508
NET ASSETS:
Beginning of year........................................... 2,788,974 2,511,466
-------------- --------------
End of year................................................. $ 2,421,373 $ 2,788,974
============== ==============
Undistributed net investment income/(distributions in excess
of net investment income) at end of year.................. $ 51 $ --
============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE> 35
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
TREASURY GOVERNMENT MONEY MARKET PRIME
------------------------------- ------------------------------- -------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/00 3/31/99 3/31/00 3/31/99 3/31/00 3/31/99
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 98,301 $ 130,986 $ 23,618 $ 19,374 $ 296,159 $ 336,404
-- (9) 1 2 (41) 17
-------------- -------------- -------------- -------------- -------------- --------------
98,301 130,977 23,619 19,376 296,118 336,421
(30,332) (35,810) (17,337) (12,220) (142,973) (144,712)
(673) (715) (49) (82) (1,146) (1,010)
(49,488) (70,376) (932) (991) (32,376) (87,660)
(10,514) (15,860) (3,819) (4,572) (34,055) (34,889)
(9) (182) (18) (65) (604) (2,729)
(7,285) (8,054) (1,463) (1,457) (83,948) (65,322)
-- -- -- -- (1,056) (83)
(560,076) (276,945) (29,257) 86,342 (2,007,472) 1,815,548
-------------- -------------- -------------- -------------- -------------- --------------
(560,076) (276,965) (29,256) 86,331 (2,007,512) 1,815,564
2,444,610 2,721,575 416,451 330,120 7,416,433 5,600,869
-------------- -------------- -------------- -------------- -------------- --------------
$ 1,884,534 $ 2,444,610 $ 387,195 $ 416,451 $ 5,408,921 $ 7,416,433
============== ============== ============== ============== ============== ==============
$ -- $ -- $ -- $ -- $ -- $ (1)
============== ============== ============== ============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE> 36
NATIONS FUNDS
STATEMENT OF CASH FLOWS
For the year ended March 31, 2000
<TABLE>
<CAPTION>
TREASURY
(000)
------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES:
Investment income received................................ $ 112,557
Payment of operating expenses............................. (11,101)
Net reduction from reverse repurchase agreements
outstanding............................................. (166,448)
Net sales of short-term investments....................... 1,003,873
-----------
Cash provided by operating and investing activities......... $ 938,881
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Fund shares sold............................ 3,993,056
Payment on shares redeemed................................ (4,846,304)
Distributions paid*....................................... (85,804)
-----------
Cash used by financing activities........................... (939,052)
---------
Decrease in cash.......................................... $ (171)
Cash at beginning of year................................. 171
---------
Cash at end of year....................................... $ --
=========
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATIONS
TO CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES:
Net increase in net assets resulting from operations........ $ 98,301
Decrease in investments................................... $ 1,004,871
Decrease in payable for reverse repurchase agreement
transactions............................................ (166,448)
Decrease in interest and dividends receivable............. 1,678
Decrease in other assets.................................. 54
Increase in accrued expenses and other payables........... 425
-----------
Cash provided by operating and investing activities......... $ 938,881
=========
</TABLE>
---------------
* Non-cash activities include reinvestment of dividends of $13,636.
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE> 37
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY*
<TABLE>
<CAPTION>
TAX EXEMPT TREASURY
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 2000 MARCH 31, 1999
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold........................................ $ 1,659,136 $ 2,239,774 $ 528,841 $ 745,038
Issued in exchange for Institutional Shares
of Emerald (Note 8):
Tax-Exempt Fund........................... -- 111,309 -- --
Treasury Fund............................. -- -- -- 280,819
Issued in exchange for assets of Nationsbank
Common Trust Municipal Temp Fund (Note
8)........................................ -- 52,112 -- --
Issued as reinvestment of dividends......... 501 1,384 59 68
Redeemed.................................... (1,754,045) (2,273,641) (791,845) (874,634)
----------- ----------- ----------- -----------
Net increase/(decrease)..................... $ (94,408) $ 130,938 $ (262,945) $ 151,291
=========== =========== =========== ===========
PRIMARY B SHARES:
Sold........................................ $ 35,021 $ 35,307 $ 28,668 $ 49,612
Issued as reinvestment of dividends......... 2 1 -- --
Redeemed.................................... (38,425) (33,799) (37,486) (41,055)
----------- ----------- ----------- -----------
Net increase/(decrease)..................... $ (3,402) $ 1,509 $ (8,818) $ 8,557
=========== =========== =========== ===========
INVESTOR A SHARES:
Sold........................................ $ 92,393 $ 515,758 $ 2,595,557 $ 3,421,643
Issued in exchange for Service Shares of
Emerald (Note 8):
Tax-Exempt Fund........................... -- 551 -- --
Treasury Fund............................. -- -- -- 518,802
Issued as reinvestment of dividends......... 1,278 3,340 2,922 7,103
Redeemed.................................... (103,429) (637,759) (2,729,986) (4,132,631)
----------- ----------- ----------- -----------
Net increase/(decrease)..................... $ (9,758) $ (118,110) $ (131,507) $ (185,083)
=========== =========== =========== ===========
INVESTOR B SHARES:
Sold........................................ $ 433,728 $ 718,176 $ 658,880 $ 2,050,523
Issued as reinvestment of dividends......... 5,615 6,745 5,968 8,372
Redeemed.................................... (494,662) (715,284) (730,356) (2,343,796)
----------- ----------- ----------- -----------
Net increase/(decrease)..................... $ (55,319) $ 9,637 $ (65,508) $ (284,901)
=========== =========== =========== ===========
INVESTOR C SHARES:
Sold........................................ $ 370 $ 77,602 $ 28 $ 8,917
Issued as reinvestment of dividends......... 5 894 9 175
Redeemed.................................... (267) (145,795) (42) (17,212)
----------- ----------- ----------- -----------
Net increase/(decrease)..................... $ 108 $ (67,299) $ (5) $ (8,120)
=========== =========== =========== ===========
DAILY SHARES:
Sold........................................ $ 270,242 $ 579,655 $ 156,645 $ 668,946
Issued in exchange for Retail Shares of
Emerald (Note 8):
Tax-Exempt Fund........................... -- 58,840 -- --
Treasury Fund............................. -- -- -- 75,614
Issued as reinvestment of dividends......... 4,714 4,438 4,678 5,812
Redeemed.................................... (479,780) (322,257) (252,616) (709,061)
----------- ----------- ----------- -----------
Net increase/(decrease)..................... $ (204,824) $ 320,676 $ (91,293) $ 41,311
=========== =========== =========== ===========
Total net increase/(decrease)............... $ (367,603) $ 277,351 $ (560,076) $ (276,945)
=========== =========== =========== ===========
</TABLE>
---------------
* 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 above for such transactions.
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE> 38
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY* (CONTINUED)
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET PRIME
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 2000 MARCH 31, 1999
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold........................................ $ 817,399 $ 799,733 $ 3,155,768 $ 2,884,029
Issued in exchange for Institutional Shares
of Emerald Prime Fund (Note 8)............ -- -- 351,001
Issued as reinvestment of dividends......... 59 14 1,947 3,278
Redeemed.................................... (822,255) (741,571) (3,569,068) (2,937,008)
--------- ----------- ----------- -----------
Net increase/(decrease)..................... $ (4,797) $ 58,176 $ (411,353) $ 301,300
========= =========== =========== ===========
PRIMARY B SHARES:
Sold........................................ $ 8,557 $ 6,527 $ 186,771 $ 184,200
Issued as reinvestment of dividends......... -- -- -- --
Redeemed.................................... (9,272) (7,041) (184,690) (110,683)
--------- ----------- ----------- -----------
Net increase/(decrease)..................... $ (715) $ (514) $ 2,081 $ 73,517
========= =========== =========== ===========
INVESTOR A SHARES:
Sold........................................ $ 301,379 $ 88,851 $ 2,984,063 $ 6,032,561
Issued in exchange for Service Shares of
Emerald Prime Fund (Note 8)............... -- -- -- 1,222,395
Issued as reinvestment of dividends......... 752 920 31,183 60,480
Redeemed.................................... (300,053) (99,654) (3,121,140) (8,326,879)
--------- ----------- ----------- -----------
Net increase/(decrease)..................... $ 2,078 $ (9,883) $ (105,894) $(1,011,443)
========= =========== =========== ===========
INVESTOR B SHARES:
Sold........................................ $ 317,218 $ 1,221,157 $ 2,436,021 $ 3,900,160
Issued as reinvestment of dividends......... 3,544 3,747 32,005 31,563
Redeemed.................................... (321,509) (1,219,880) (2,475,710) (4,037,571)
--------- ----------- ----------- -----------
Net increase/(decrease)..................... $ (747) $ 5,024 $ (7,684) $ (105,848)
========= =========== =========== ===========
INVESTOR C SHARES:
Sold........................................ $ 428 $ 1,991 $ 9,365 $ 105,867
Issued as reinvestment of dividends......... 18 62 548 2,522
Redeemed.................................... (31) (5,380) (12,126) (193,462)
--------- ----------- ----------- -----------
Net increase/(decrease)..................... $ 415 $ (3,327) $ (2,213) $ (85,073)
========= =========== =========== ===========
DAILY SHARES:
Sold........................................ $ 287,994 $ 630,871 $ 1,005,415 $ 3,067,562
Issued in exchange for Retail Shares of
Emerald Prime Fund (Note 8)............... -- -- -- 601,006
Issued as reinvestment of dividends......... 1,367 1,438 82,089 64,860
Redeemed.................................... (314,852) (595,443) (2,571,494) (1,108,303)
--------- ----------- ----------- -----------
Net increase/(decrease)..................... $ (25,491) $ 36,866 $(1,483,990) $ 2,625,125
========= =========== =========== ===========
MARSICO SHARES:+
Sold........................................ $ -- $ -- $ 131,075 $ 22,087
Issued as reinvestment of dividends......... -- -- 1,055 23
Redeemed.................................... -- -- (130,549) (4,140)
--------- ----------- ----------- -----------
Net increase/(decrease)..................... $ -- $ -- $ 1,581 $ 17,970
========= =========== =========== ===========
Total net increase/(decrease)............... $ (29,257) $ 86,342 $(2,007,472) $ 1,815,548
========= =========== =========== ===========
</TABLE>
---------------
* 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 above for such transactions.
+ Marsico Shares were first offered on January 26, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE> 39
[This page intentionally left blank]
35
<PAGE> 40
NATIONS FUNDS
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS
VALUE NET FROM NET
BEGINNING INVESTMENT INVESTMENT
OF YEAR INCOME INCOME
-------------------------------------
<S> <C> <C> <C>
TAX EXEMPT
PRIMARY A SHARES
Year ended 3/31/2000........................................ $1.00 $0.0321 $(0.0321)
Year ended 3/31/1999........................................ 1.00 0.0312 (0.0312)
Year ended 3/31/1998........................................ 1.00 0.0345 (0.0345)
Year ended 3/31/1997........................................ 1.00 0.0324 (0.0324)
Period ended 3/31/1996(a)................................... 1.00 0.0112 (0.0112)
Year ended 11/30/1995....................................... 1.00 0.0361 (0.0361)
PRIMARY B SHARES
Year ended 3/31/2000........................................ $1.00 $0.0296 $(0.0296)
Year ended 3/31/1999........................................ 1.00 0.0288 (0.0288)
Year ended 3/31/1998........................................ 1.00 0.0320 (0.0320)
Year ended 3/31/1997........................................ 1.00 0.0300 (0.0300)
Period ended 3/31/1996(a)................................... 1.00 0.0104 (0.0104)
Year ended 11/30/1995....................................... 1.00 0.0335 (0.0335)
INVESTOR A SHARES
Year ended 3/31/2000........................................ $1.00 $0.0286 $(0.0286)
Year ended 3/31/1999........................................ 1.00 0.0278 (0.0278)
Year ended 3/31/1998........................................ 1.00 0.0316 (0.0316)
Year ended 3/31/1997........................................ 1.00 0.0300 (0.0300)
Period ended 3/31/1996(a)................................... 1.00 0.0104 (0.0104)
Year ended 11/30/1995....................................... 1.00 0.0335 (0.0335)
INVESTOR B SHARES
Year ended 3/31/2000........................................ $1.00 $0.0298 $(0.0298)
Year ended 3/31/1999........................................ 1.00 0.0293 (0.0293)
Year ended 3/31/1998........................................ 1.00 0.0325 (0.0325)
Year ended 3/31/1997........................................ 1.00 0.0307 (0.0307)
Period ended 3/31/1996(a)................................... 1.00 0.0106 (0.0106)
Year ended 11/30/1995....................................... 1.00 0.0342 (0.0342)
INVESTOR C SHARES
Year ended 3/31/2000........................................ $1.00 $0.0296 $(0.0296)
Year ended 3/31/1999........................................ 1.00 0.0288 (0.0288)
Year ended 3/31/1998........................................ 1.00 0.0323 (0.0323)
Year ended 3/31/1997........................................ 1.00 0.0311 (0.0311)
Period ended 3/31/1996(a)................................... 1.00 0.0107 (0.0107)
Year ended 11/30/1995....................................... 1.00 0.0346 (0.0346)
DAILY SHARES
Year ended 3/31/2000........................................ $1.00 $0.0271 $(0.0271)
Year ended 3/31/1999........................................ 1.00 0.0263 (0.0263)
Year ended 3/31/1998........................................ 1.00 0.0295 (0.0295)
Year ended 3/31/1997........................................ 1.00 0.0270 (0.0270)
Period ended 3/31/1996(a)................................... 1.00 0.0090 (0.0090)
Period ended 11/30/1995*.................................... 1.00 0.0243 (0.0243)
</TABLE>
---------------
* Tax Exempt Daily Shares commenced operations on February 10, 1995.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) The effect of interest expense on the operating expense ratio was less than
0.01%.
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 ASSETS OPERATING NET INVESTMENT OPERATING
NET ASSET END OF EXPENSES TO INCOME/(LOSS) EXPENSES TO
VALUE TOTAL YEAR AVERAGE NET TO AVERAGE NET AVERAGE NET
END OF YEAR RETURN++ (000) ASSETS ASSETS ASSETS
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3.26% $2,037,742 0.30% 3.20% 0.42%
$1.00
3.17 2,132,148 0.30(b) 3.11 0.55(b)
1.00
3.48 2,001,083 0.30(b) 3.43 0.56(b)
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
3.00% $ 6,835 0.55% 2.95% 0.67%
$1.00
2.91 10,236 0.55(b) 2.86 0.80(b)
1.00
3.22 8,726 0.55(b) 3.18 0.81(b)
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
2.90% $ 43,934 0.65% 2.85% 0.77%
$1.00
2.81 53,693 0.65(b) 2.76 0.90(b)
1.00
3.20 171,786 0.58(b) 3.15 0.84(b)
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
3.02% $ 204,150 0.53% 2.97% 0.75%
$1.00
2.97 259,469 0.50(b) 2.91 0.90(b)
1.00
3.30 249,819 0.50(b) 3.23 0.76(b)
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
3.00% $ 326 0.55% 2.95% 0.67%
$1.00
2.91 218 0.55(b) 2.86 0.80(b)
1.00
3.26 67,511 0.48(b) 3.25 0.74(b)
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
2.74% $ 128,386 0.80% 2.70% 1.12%
$1.00
2.66 333,210 0.80(b) 2.61 1.25(b)
1.00
2.98 12,541 0.80(b) 2.93 1.06(b)
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+
1.00
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
37
<PAGE> 42
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS
VALUE NET FROM NET
BEGINNING INVESTMENT INVESTMENT
OF YEAR INCOME INCOME
-------------------------------------
<S> <C> <C> <C>
TREASURY
PRIMARY A SHARES
Year ended 3/31/2000........................................ $1.00 $0.0493 $(0.0493)
Year ended 3/31/1999........................................ 1.00 0.0499 (0.0499)
Year ended 3/31/1998........................................ 1.00 0.0531 (0.0531)
Year ended 3/31/1997........................................ 1.00 0.0509 (0.0509)
Period ended 3/31/1996(a)................................... 1.00 0.0458 (0.0458)#
Year ended 5/31/1995........................................ 1.00 0.0494 (0.0494)#
PRIMARY B SHARES
Year ended 3/31/2000........................................ $1.00 $0.0468 $(0.0468)
Year ended 3/31/1999........................................ 1.00 0.0474 (0.0474)
Year ended 3/31/1998........................................ 1.00 0.0506 (0.0506)
Year ended 3/31/1997........................................ 1.00 0.0484 (0.0484)
Period ended 3/31/1996(a)................................... 1.00 0.0437 (0.0437)#
Period ended 5/31/1995*..................................... 1.00 0.0449 (0.0449)#
INVESTOR A SHARES
Year ended 3/31/2000........................................ $1.00 $0.0458 $(0.0458)
Year ended 3/31/1999........................................ 1.00 0.0464 (0.0464)
Year ended 3/31/1998........................................ 1.00 0.0496 (0.0496)
Year ended 3/31/1997........................................ 1.00 0.0474 (0.0474)
Period ended 3/31/1996(a)................................... 1.00 0.0429 (0.0429)#
Year ended 5/31/1995........................................ 1.00 0.0457 (0.0457)#
INVESTOR B SHARES
Year ended 3/31/2000........................................ $1.00 $0.0468 $(0.0468)
Year ended 3/31/1999........................................ 1.00 0.0474 (0.0474)
Year ended 3/31/1998........................................ 1.00 0.0506 (0.0506)
Year ended 3/31/1997........................................ 1.00 0.0484 (0.0484)
Period ended 3/31/1996(a)................................... 1.00 0.0437 (0.0437)#
Year ended 5/31/1995........................................ 1.00 0.0468 (0.0468)#
INVESTOR C SHARES
Year ended 3/31/2000........................................ $1.00 $0.0468 $(0.0468)
Year ended 3/31/1999........................................ 1.00 0.0474 (0.0474)
Year ended 3/31/1998........................................ 1.00 0.0506 (0.0506)
Year ended 3/31/1997........................................ 1.00 0.0484 (0.0484)
Period ended 3/31/1996(a)................................... 1.00 0.0437 (0.0437)#
Year ended 5/31/1995........................................ 1.00 0.0468 (0.0468)#
DAILY SHARES
Year ended 3/31/2000........................................ $1.00 $0.0443 $(0.0443)
Year ended 3/31/1999........................................ 1.00 0.0449 (0.0449)
Year ended 3/31/1998........................................ 1.00 0.0481 (0.0481)
Year ended 3/31/1997........................................ 1.00 0.0455 (0.0455)
Period ended 3/31/1996(a)................................... 1.00 0.0404 (0.0404)
Period ended 5/31/1995*..................................... 1.00 0.0167 (0.0167)
</TABLE>
---------------
* Treasury Primary B and Daily Shares commenced operations on June 16, 1994
and February 9, 1995, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# 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.
(b) The effect of the custodial expense offset (Note 2) on the operating
expense ratio, with and without waivers and/or expense reimbursements, was
less than 0.01%.
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 ASSETS OPERATING NET INVESTMENT OPERATING
NET ASSET END OF EXPENSES TO INCOME/(LOSS) EXPENSES TO
VALUE TOTAL YEAR AVERAGE NET TO AVERAGE NET AVERAGE NET
END OF YEAR RETURN++ (000) ASSETS ASSETS ASSETS
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$1.00 5.04% $ 503,511 0.30%(b) 4.90% 0.35%(b)
1.00 5.10 766,456 0.30(b) 5.01 0.35(b)
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 4.78% $ 11,496 0.55%(b) 4.65% 0.60%(b)
1.00 4.84 20,315 0.55(b) 4.76 0.60(b)
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 4.68% $1,044,726 0.65%(b) 4.55% 0.70%(b)
1.00 4.74 1,176,233 0.65(b) 4.66 0.70(b)
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 4.78% $ 196,332 0.55%(b) 4.65% 0.70%(b)
1.00 4.84 261,840 0.55(b) 4.76 0.70(b)
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 4.78% $ 170 0.55%(b) 4.65% 0.60%(b)
1.00 4.84 175 0.55(b) 4.76 0.60(b)
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 4.52% $ 128,299 0.80%(b) 4.40% 1.05%(b)
1.00 4.58 219,592 0.80(b) 4.51 1.05(b)
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>
SEE NOTES TO FINANCIAL STATEMENTS.
39
<PAGE> 44
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS
VALUE NET FROM NET
BEGINNING INVESTMENT INVESTMENT
OF YEAR INCOME INCOME
-------------------------------------
<S> <C> <C> <C>
GOVERNMENT MONEY MARKET
PRIMARY A SHARES
Year ended 3/31/2000........................................ $1.00 $0.0501 $(0.0501)
Year ended 3/31/1999........................................ 1.00 0.0497 (0.0497)
Year ended 3/31/1998........................................ 1.00 0.0524 (0.0524)
Year ended 3/31/1997........................................ 1.00 0.0503 (0.0503)
Period ended 3/31/1996(a)................................... 1.00 0.0173 (0.0173)
Year ended 11/30/1995....................................... 1.00 0.0558 (0.0558)
PRIMARY B SHARES
Year ended 3/31/2000........................................ $1.00 $0.0475 $(0.0475)
Year ended 3/31/1999........................................ 1.00 0.0472 (0.0472)
Year ended 3/31/1998........................................ 1.00 0.0499 (0.0499)
Year ended 3/31/1997........................................ 1.00 0.0478 (0.0478)
Period ended 3/31/1996(a)................................... 1.00 0.0165 (0.0165)
Year ended 11/30/1995....................................... 1.00 0.0533 (0.0533)
INVESTOR A SHARES
Year ended 3/31/2000........................................ $1.00 $0.0465 $(0.0465)
Year ended 3/31/1999........................................ 1.00 0.0462 (0.0462)
Year ended 3/31/1998........................................ 1.00 0.0489 (0.0489)
Year ended 3/31/1997........................................ 1.00 0.0468 (0.0468)
Period ended 3/31/1996(a)................................... 1.00 0.0162 (0.0162)
Year ended 11/30/1995....................................... 1.00 0.0522 (0.0522)
INVESTOR B SHARES
Year ended 3/31/2000........................................ $1.00 $0.0475 $(0.0475)
Year ended 3/31/1999........................................ 1.00 0.0472 (0.0472)
Year ended 3/31/1998........................................ 1.00 0.0499 (0.0499)
Year ended 3/31/1997........................................ 1.00 0.0478 (0.0478)
Period ended 3/31/1996(a)................................... 1.00 0.0165 (0.0165)
Year ended 11/30/1995....................................... 1.00 0.0532 (0.0532)
INVESTOR C SHARES
Year ended 3/31/2000........................................ $1.00 $0.0476 $(0.0476)
Year ended 3/31/1999........................................ 1.00 0.0472 (0.0472)
Year ended 3/31/1998........................................ 1.00 0.0499 (0.0499)
Year ended 3/31/1997........................................ 1.00 0.0478 (0.0478)
Period ended 3/31/1996(a)................................... 1.00 0.0165 (0.0165)
Year ended 11/30/1995....................................... 1.00 0.0532 (0.0532)
DAILY SHARES
Year ended 3/31/2000........................................ $1.00 $0.0450 $(0.0450)
Year ended 3/31/1999........................................ 1.00 0.0447 (0.0447)
Year ended 3/31/1998........................................ 1.00 0.0474 (0.0474)
Year ended 3/31/1997........................................ 1.00 0.0453 (0.0453)
Period ended 3/31/1996(a)................................... 1.00 0.0157 (0.0157)
Period ended 11/30/1995*.................................... 1.00 0.0418 (0.0418)
</TABLE>
---------------
* Government Money Market Daily Shares commenced operations on February 10,
1995.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) The effect of the custodial expense offset (Note 2) on the operating
expense ratio, with and without waivers and/or expense reimbursements, was
less than 0.01%.
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 ASSETS OPERATING NET INVESTMENT OPERATING
NET ASSET END OF EXPENSES TO INCOME/(LOSS) EXPENSES TO
VALUE TOTAL YEAR AVERAGE NET TO AVERAGE NET AVERAGE NET
END OF YEAR RETURN++ (000) ASSETS ASSETS ASSETS
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$1.00 5.12% $270,879 0.30%(b) 5.06% 0.44%(b)
1.00 5.08 275,677 0.30(b) 4.97 0.58(b)
1.00 5.39 217,506 0.30 5.25 0.59
1.00 5.18 299,395 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 4.86% $ 583 0.55%(b) 4.81% 0.69%(b)
1.00 4.82 1,298 0.55(b) 4.72 0.83(b)
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 4.75% $ 16,002 0.65%(b) 4.71% 0.79%(b)
1.00 4.72 13,924 0.65(b) 4.62 0.93(b)
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 4.86% $ 81,334 0.55%(b) 4.81% 0.79%(b)
1.00 4.82 82,080 0.55(b) 4.72 0.93(b)
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 4.86% $ 458 0.55%(b) 4.81% 0.69%(b)
1.00 4.82 42 0.55(b) 4.72 0.83(b)
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 4.60% $ 17,939 0.80%(b) 4.56% 1.14%(b)
1.00 4.56 43,430 0.80(b) 4.47 1.28(b)
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>
SEE NOTES TO FINANCIAL STATEMENTS.
41
<PAGE> 46
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS
VALUE NET FROM NET
BEGINNING INVESTMENT INVESTMENT
OF YEAR INCOME INCOME
-------------------------------------
<S> <C> <C> <C>
PRIME
PRIMARY A SHARES
Year ended 3/31/2000........................................ $1.00 $0.0522 $(0.0522)
Year ended 3/31/1999........................................ 1.00 0.0521 (0.0521)
Year ended 3/31/1998........................................ 1.00 0.0547 (0.0547)
Year ended 3/31/1997........................................ 1.00 0.0520 (0.0520)
Period ended 3/31/1996(a)................................... 1.00 0.0468 (0.0468)
Year ended 5/31/1995........................................ 1.00 0.0519 (0.0519)
PRIMARY B SHARES
Year ended 3/31/2000........................................ $1.00 $0.0497 $(0.0497)
Year ended 3/31/1999........................................ 1.00 0.0496 (0.0496)
Year ended 3/31/1998........................................ 1.00 0.0522 (0.0522)
Year ended 3/31/1997........................................ 1.00 0.0495 (0.0495)
Period ended 3/31/1996(a)................................... 1.00 0.0447 (0.0447)
Period ended 5/31/1995*..................................... 1.00 0.0474 (0.0474)
INVESTOR A SHARES
Year ended 3/31/2000........................................ $1.00 $0.0487 $(0.0487)
Year ended 3/31/1999........................................ 1.00 0.0486 (0.0486)
Year ended 3/31/1998........................................ 1.00 0.0512 (0.0512)
Year ended 3/31/1997........................................ 1.00 0.0485 (0.0485)
Period ended 3/31/1996(a)................................... 1.00 0.0438 (0.0438)
Year ended 5/31/1995........................................ 1.00 0.0475 (0.0475)
INVESTOR B SHARES
Year ended 3/31/2000........................................ $1.00 $0.0497 $(0.0497)
Year ended 3/31/1999........................................ 1.00 0.0496 (0.0496)
Year ended 3/31/1998........................................ 1.00 0.0522 (0.0522)
Year ended 3/31/1997........................................ 1.00 0.0495 (0.0495)
Period ended 3/31/1996(a)................................... 1.00 0.0447 (0.0447)
Year ended 5/31/1995........................................ 1.00 0.0493 (0.0493)
INVESTOR C SHARES
Year ended 3/31/2000........................................ $1.00 $0.0497 $(0.0497)
Year ended 3/31/1999........................................ 1.00 0.0496 (0.0496)
Year ended 3/31/1998........................................ 1.00 0.0522 (0.0522)
Year ended 3/31/1997........................................ 1.00 0.0495 (0.0495)
Period ended 3/31/1996(a)................................... 1.00 0.0447 (0.0447)
Year ended 5/31/1995........................................ 1.00 0.0493 (0.0493)
DAILY SHARES
Year ended 3/31/2000........................................ $1.00 $0.0472 $(0.0472)
Year ended 3/31/1999........................................ 1.00 0.0471 (0.0471)
Year ended 3/31/1998........................................ 1.00 0.0497 (0.0497)
Year ended 3/31/1997........................................ 1.00 0.0470 (0.0470)
Period ended 3/31/1996(a)................................... 1.00 0.0439 (0.0439)
Period ended 5/31/1995*..................................... 1.00 0.0173 (0.0173)
MARSICO SHARES
Year ended 3/31/2000........................................ $1.00 $0.0497 $(0.0497)
Period ended 3/31/1999*..................................... 1.00 0.0080 (0.0080)
</TABLE>
---------------
* Prime Primary B, Daily and Marsico Shares commenced operations on June 16,
1994, February 9, 1995 and January 26, 1999, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
May 31.
(b) The effect of the custodial expense offset (Note 2) on the operating
expense ratio, with and without waivers and/or expense reimbursements, was
less than 0.01%.
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 ASSETS OPERATING NET INVESTMENT OPERATING
NET ASSET END OF EXPENSES TO INCOME/(LOSS) EXPENSES TO
VALUE TOTAL YEAR AVERAGE NET TO AVERAGE NET AVERAGE NET
END OF YEAR RETURN++ (000) ASSETS ASSETS ASSETS
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$1.00 5.34% $2,742,001 0.30%(b) 5.21% 0.35%(b)
1.00 5.34 3,153,372 0.30(b) 5.21 0.34(b)
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 5.08% $ 83,730 0.55%(b) 4.96% 0.60%(b)
1.00 5.08 81,649 0.55(b) 4.96 0.59(b)
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+ 5.27+ 0.62+
1.00 4.84 126,120 0.55+ 4.98+ 0.63+
$1.00 4.98% $ 589,804 0.65%(b) 4.86% 0.70%(b)
1.00 4.91 695,703 0.65(b) 4.86 0.69(b)
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 5.08% $ 730,984 0.55%(b) 4.96% 0.70%(b)
1.00 5.02 738,673 0.55(b) 4.96 0.69(b)
1.00 5.34 844,367 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 5.08% $ 8,824 0.55%(b) 4.96% 0.60%(b)
1.00 5.02 11,037 0.55(b) 4.96 0.59(b)
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 4.82% $1,234,026 0.80%(b) 4.71% 1.05%(b)
1.00 4.75 2,718,028 0.80(b) 4.71 1.04(b)
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+
$1.00 5.08% $ 19,552 0.55%(b) 4.96% 0.60%(b)
1.00 0.80 17,970 0.55+(b) 4.96+ 0.59+(b)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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, 2000, the Trust offered
thirty-six separate portfolios and the Company offered seven separate
portfolios. These financial statements pertain only to the money market
portfolios of the Trust and the Company: Tax Exempt Fund, Treasury Fund,
Government Money Market Fund and Prime Fund (each a "Fund" and collectively, the
"Funds"). 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. The Prime Fund also
offers Marsico Shares. Shareholders of a Fund have equal voting rights on
matters affecting all shareholders of the Fund. In addition, each class of
shares of a Fund has exclusive voting rights on matters that relate solely to
that class and separate voting rights on matters in which the interests of one
class differ from the interests of any other class.
1. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make certain 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 current 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 accretion 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 may be valued
under procedures adopted by the Board of Trustees/Directors.
Repurchase agreements: Each Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, a Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the obligation of a Fund to resell, the underlying
debt obligation at an agreed-upon price and date, 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 the Fund seeks to assert its right.
The Funds' investment adviser and sub-adviser, under the oversight 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 Funds' investment adviser and sub-adviser
have determined are creditworthy. Under the terms of a typical reverse
repurchase agreement, a 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
Statements of net assets.
At March 31, 2000, the Treasury Fund had reverse repurchase agreements
outstanding as follows:
<TABLE>
<S> <C>
Maturity Amount......................... $363,519,798
Maturity Date........................... 04/03/00
Market Value of Assets Sold Under
Agreements............................ $360,000,000
</TABLE>
The average daily balance of reverse repurchase agreements outstanding for the
Treasury Fund during the year ended March 31, 2000 was $337,438,251.
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
44
<PAGE> 49
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
year ended March 31, 2000, representing the difference between interest rates on
the reverse repurchase and repurchase agreements, amounted to $489,747 and have
been included in interest income in the Statements of operations.
Securities transactions and investment income: Securities transactions are
accounted for on trade date. Realized gains and losses are computed based on the
specific identification of securities sold. Interest income, adjusted for
accretion of discounts and amortization of premiums calculated ratably, is
earned from settlement date and recorded on an accrual basis. Dividend income is
recorded on 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; interest income is not accrued
until settlement date. At the time a Fund enters into such transactions, it
instructs the custodian to segregate assets with a current value at least equal
to the amount of its when-issued or delayed-delivery purchase commitments.
Dividends and distributions to shareholders: It is the policy of each Fund to
declare dividends from net investment income daily 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 realized 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. These reclassifications are
due to different book and tax accounting for dividend reclassifications.
Reclassifications for the year ended March 31, 2000 were as follows:
<TABLE>
<CAPTION>
INCREASE/
UNDISTRIBUTED (DECREASE)
NET ACCUMULATED
INVESTMENT NET REALIZED
INCOME GAIN/(LOSS)
(000) (000)
-----------------------------
<S> <C> <C>
Tax Exempt.................. $51 $(51)
</TABLE>
Federal income tax: Each Fund intends to continue to qualify as a regulated
investment company by complying with the applicable requirements of the Internal
Revenue Code of 1986, as amended, and by distributing substantially all of its
earnings to its shareholders. Therefore, no provision is made for Federal income
or excise taxes.
Expenses: General expenses of the Trust and the Company are allocated to the
Funds based upon their relative net assets or other expense allocation
methodologies determined by the nature of the expense. Expenses directly
attributable to a Fund or class of shares are charged to such Fund or class.
Cash flow information: Cash, as used in the Statement of cash flows, is the
amount reported in the Statements of net assets and represents cash on hand at a
Fund's custodian. 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
for the Treasury Fund.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS
Each of the Trust and the Company has entered into an investment advisory
agreement (the "Investment Advisory Agreements") with Banc of America Advisors,
Inc. ("BAAI"), a wholly-owned subsidiary of Bank of America, N.A. ("Bank of
America"), which in turn is a wholly-owned banking subsidiary of Bank of America
Corporation, a bank holding company organized as a Delaware corporation,
pursuant to which BAAI provides investment advisory services to the Funds. Under
the terms of the Investment Advisory Agreements, BAAI is currently entitled to
receive an advisory fee, calculated daily and payable monthly, at the maximum
annual rate of 0.20% of each Fund's average daily net assets. Effective August
1, 1999, the maximum advisory fee payable by the Tax Exempt and Government Money
Market Funds decreased by 0.20% of the Funds' average daily net assets.
Effective August 1, 1999, the Treasury and Prime Funds advisory fee decreased to
0.20% from the prior annual rate of 0.25% of average daily net assets on
combined net assets up to $250 million and 0.20% on combined net assets
exceeding $250 million.
45
<PAGE> 50
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Each of the Trust and the Company has entered into a sub-advisory agreement with
BAAI and Banc of America Capital Management, Inc. ("BACAP") (formerly known as
TradeStreet Investment Associates, Inc.), a wholly-owned subsidiary of Bank of
America, pursuant to which BACAP is entitled to receive a sub-advisory fee from
BAAI at the maximum annual rate of 0.055% of each Fund's average daily net
assets.
Stephens Inc. ("Stephens") and BAAI serve as co-administrators of the Trust and
the Company. Under the co-administration agreements, Stephens and BAAI are
entitled to receive a combined fee, computed daily and paid monthly, at the
maximum annual rate of 0.10% of each Fund's average daily net assets. The Bank
of New York ("BNY") serves as sub-administrator of the Trust and the Company
pursuant to an agreement with BAAI. For the year ended March 31, 2000, Stephens
and BAAI earned $6,405,077 and $1,097,510, respectively, from the Funds for
their co-administration services.
BAAI and/or the sub-adviser and Stephens may, from time to time, reduce their
fees payable by each Fund. Effective August 1, 1999, BAAI and/or the sub-adviser
and Stephens agreed to reimburse expenses and/or waive their fees until July 31,
2000 to the extent that total expenses (excluding shareholder servicing and
distribution fees) exceed an annual rate of 0.30% of each Fund's average daily
net assets. Prior to that date, BAAI and/or the sub-adviser and Stephens had
voluntarily agreed to reimburse expenses and/or waive their fees to maintain
these total expense limits.
BNY also serves as the custodian of the Trust's and the Company's assets. For
the year ended March 31, 2000, expenses of the Treasury, Government Money Market
and Prime Fund were reduced by $14,487 under expense offset arrangements with
BNY. 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. The Tax Exempt Fund does not
participate in the expense offset arrangement.
Effective December 1, 1999, First Data Investor Services Group, Inc. ("First
Data"), the transfer agent for the Funds' shares, was acquired by PFPC Inc.
("PFPC"). PFPC provides the same services as the transfer agent for the Funds'
shares as were previously provided by First Data. Bank of America serves as the
sub-transfer agent for the Primary A and B Shares of the Funds. For the year
ended March 31, 2000, Bank of America earned approximately $16,426 for providing
such services. Stephens also serves as distributor of the Funds' shares.
The Trust's and the Company's eligible Trustees/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 represents investments by
fiduciary accounts over which Bank of America 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 Investor A, Investor B, Investor C and Daily Shares
of each Fund and a shareholder servicing plan for the Primary B and Marsico
Shares of the Prime 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 Funds 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 daily
net assets set from time to time by the Boards of Trustees/Directors, and are
charged as expenses of each Fund directly to the applicable class. A substantial
portion of the expenses incurred pursuant to these plans is paid to affiliates
of Bank of America and BAAI.
46
<PAGE> 51
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At March 31, 2000, the rates in effect and plan limits, as a percentage of
average daily net assets, were as follows:
<TABLE>
<CAPTION>
CURRENT PLAN
RATE LIMIT
------------------
<S> <C> <C>
Primary B, Investor A, Investor C,
Daily and Marsico Shareholder
Servicing Plans.................. 0.25% 0.25%
Investor B Shareholder Servicing
Plan............................. 0.25%* 0.35%
Investor A Distribution Plan....... 0.10% 0.10%
Investor B Distribution Plan....... 0.00% 0.10%
Daily Distribution Plan............ 0.25% 0.45%
</TABLE>
---------------
* Reflects a rate change effective September 1, 1999 from 0.20% for the Tax
Exempt Fund.
4. SHARES OF BENEFICIAL INTEREST/CAPITAL STOCK
At March 31, 2000, an unlimited number of shares of beneficial interest without
par value were authorized for the Trust and 480,000,000,000 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 Schedules of
capital stock activity.
5. RESTRICTED SECURITIES
Certain securities may be subject to 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 are considered both illiquid and restricted as to
resale. Accordingly, they are valued at their fair value in good faith under
procedures adopted by the Board of Trustees/Directors.
47
<PAGE> 52
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
TAX EXEMPT
<TABLE>
<CAPTION>
FAIR PERCENTAGE HISTORICAL
PAR VALUE VALUE VALUE OF NET COST
ACQUISITION 3/31/00 PER UNIT 3/31/00 ASSETS 3/31/00
SECURITY DATE (000) 3/31/00 (000) 3/31/00 (000)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Airport Authority, Inc., Texas Special
Facilities Revenue, (Federal Express Project)
Series 1999 PA-460, (Merrill Lynch Guarantee,
Merrill Lynch SBPA),
4.140% 04/01/21................................... 03/09/00 $30,530 $1.00 $30,530 1.3% $30,530
Bexar County, Texas Housing Finance Corporation,
Multi-Family Housing Revenue, Series 1998 PT-1041,
AMT, (Merrill Lynch Guarantee, Merrill Lynch
SBPA),
4.110% 06/01/35................................... 06/26/99 10,190 1.00 10,190 0.4 10,190
Broward County, Florida Housing Finance Authority,
Multi-Family Housing Revenue, (Harbour Town
Projects) Series 1999 PT-1166, (Merrill Lynch
Guarantee),
4.090% 12/01/25................................... 07/01/99 11,790 1.00 11,790 0.5 11,790
South Carolina Jobs Economic Development Authority
Revenue, P-Floats-PT328, (St. Francis
Hospital - Bon Secours Project) Series 1999,
(Merrill Lynch Guarantee, Merrill Lynch SBPA),
4.110% 01/01/01................................... 02/03/00 20,000 1.00 20,000 0.8 20,000
</TABLE>
TREASURY
<TABLE>
<CAPTION>
FAIR PERCENTAGE HISTORICAL
PAR VALUE VALUE VALUE OF NET COST
ACQUISITION 3/31/00 PER UNIT 3/31/00 ASSETS 3/31/00
SECURITY DATE (000) 3/31/00 (000) 3/31/00 (000)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Repurchase Agreement with Deutsche Bank Securities
Inc.,
5.920% 05/15/00................................... 03/15/00 $50,000 $1.00 $50,000 2.6% $50,000
Repurchase Agreement with Lehman Brothers Inc.,
5.960% 05/16/00................................... 03/23/00 75,000 1.00 75,000 4.0 75,000
</TABLE>
PRIME
<TABLE>
<CAPTION>
FAIR PERCENTAGE HISTORICAL
PAR VALUE VALUE VALUE OF NET COST
ACQUISITION 3/31/00 PER UNIT 3/31/00 ASSETS 3/31/00
SECURITY DATE (000) 3/31/00 (000) 3/31/00 (000)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Anchor National Life Insurance Company:
6.064% 04/01/00+++................................ 12/01/98 $25,000 $1.00 $25,000 0.5% $25,000
6.410% 04/01/00+++................................ 01/01/99 50,000 1.00 50,000 0.9 50,000
Commonwealth Life Insurance Company:
6.400% 04/01/00+++................................ 08/02/99 50,000 1.00 50,000 0.9 50,000
First Allmerica Financial Life Insurance Company:
6.180% 05/24/00+++................................ 08/24/99 50,000 1.00 50,000 0.9 50,000
Life Insurance Company of Georgia:
6.104% 04/01/00+++................................ 06/01/99 60,000 1.00 60,000 1.1 60,000
Monumental Life Insurance Company Inc.:
6.100% 04/01/00+++................................ 03/05/99 62,000 1.00 62,000 1.1 62,000
6.100% 04/01/00+++................................ 06/01/99 10,000 1.00 10,000 0.2 10,000
Monumental Security Life Insurance Company:
6.100% 04/01/00+++................................ 07/05/99 20,000 1.00 20,000 0.4 20,000
6.130% 04/01/00+++................................ 02/05/99 20,000 1.00 20,000 0.4 20,000
Sun America Life Insurance Company of America:
6.094% 04/01/00+++................................ 10/01/98 50,000 1.00 50,000 0.9 50,000
Travelers Life Insurance Company:
5.973% 04/01/00+++................................ 02/03/99 25,000 1.00 25,000 0.5 25,000
</TABLE>
---------------
+++ Reset date
48
<PAGE> 53
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 within seven calendar days.
<TABLE>
<CAPTION>
FAIR PERCENTAGE HISTORICAL
PAR VALUE VALUE VALUE OF NET COST
ACQUISITION 3/31/00 PER UNIT 3/31/00 ASSETS 3/31/00
SECURITY DATE (000) 3/31/00 (000) 3/31/00 (000)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GE Financial Assurance/Life of Virginia:
5.845% 04/07/00+++................................ 03/01/99 $50,000 $1.00 $50,000 0.9% $50,000
5.911% 04/07/00+++................................ 02/01/99 25,000 1.00 25,000 0.5 25,000
Metropolitan Life Insurance Company:
6.130% 04/07/00+++................................ 09/29/99 45,000 1.00 45,000 0.8 45,000
6.130% 04/07/00+++................................ 09/29/99 45,000 1.00 45,000 0.8 45,000
</TABLE>
---------------
+++Reset date
6. LINES OF CREDIT
The Trust and the Company each participate with other Nations Funds in an
uncommitted line of credit provided by BNY 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 a specified Federal Funds rate plus 0.50% on an annualized basis.
Each participating Fund maintains a ratio of no less than 4 to 1 net assets (not
including amounts borrowed pursuant to the Agreement) to aggregate amount of
indebtedness pursuant to the Agreement. For the year ended March 31, 2000, there
were no borrowings by the Funds under the Agreement.
The Trust and the Company also participate with other Nations Funds in a
committed line of credit provided by BNY. Interest on borrowings under the
committed line is payable at a specified Federal Funds rate plus 0.50% on an
annualized basis. A facility fee of 0.09% per annum of the total amounts
available under the line of credit is charged of which each Fund has agreed to
pay its pro rata share. This fee is paid quarterly in arrears. Each
participating Fund is required to maintain an asset coverage ratio of at least
300% under the terms of the arrangement. For the year ended March 31, 2000,
there were no borrowings by the Funds under the committed line of credit.
7. CAPITAL LOSS CARRYFORWARD
At March 31, 2000, the Funds had available for Federal income tax purposes the
following unused capital losses expiring March 31:
<TABLE>
<CAPTION>
2002 2003 2004 2005 2006 2007 2008
(000) (000) (000) (000) (000) (000) (000)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Treasury.................................................... $16 $ 26 $95 $ 31 $14 $9 $--
Government Money Market..................................... -- 58 2 -- -- -- --
Prime....................................................... -- 131 35 436 23 -- 41
</TABLE>
At March 31, 2000, the following Funds utilized capital losses during the year
as follows:
<TABLE>
<CAPTION>
CAPITAL
LOSSES
UTILIZED
FUND (000)
----------------------------------------------------------------------------
<S> <C>
Government Money Market..................................... $1
</TABLE>
Under current tax law, capital losses realized after October 31, 1999 may be
deferred and treated as occurring on the first day of the following fiscal year.
For the year ended March 31, 2000, the Prime Fund elected to defer losses
occurring between November 1, 1999 and March 31, 2000 in the amount of $901.
49
<PAGE> 54
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. REORGANIZATIONS
On May 15, 1998, certain Funds, as listed below (each an "Acquiring Fund"),
acquired the assets and certain liabilities of The Emerald Funds, also listed
below (each an "Acquired Fund"), in a tax-free reorganization in exchange for
shares of the Acquiring Fund, pursuant to a plan of reorganization approved by
the Acquired Fund's shareholders. The value of shares issued by the Acquiring
Fund is presented in the Schedules of capital stock activity. Net assets as of
the reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS
TOTAL NET ASSETS TOTAL NET ASSETS OF ACQUIRING FUND
ACQUIRING OF ACQUIRED FUND OF ACQUIRING FUND AFTER ACQUISITION
FUND ACQUIRED FUND (000) (000) (000)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Exempt Emerald Tax-Exempt Fund $ 170,700 $2,426,697 $2,597,397
Treasury Emerald Treasury Fund 875,235 2,468,080 3,343,315
Prime Emerald Prime Fund 2,174,402 5,517,462 7,691,864
</TABLE>
On June 19, 1998, the Tax Exempt Fund ("Acquiring Fund") acquired the assets of
the Common Trust Municipal Temp Fund ("Acquired Fund"), a common trust fund
managed by NationsBank, N.A., in a tax-free exchange for shares of the Acquiring
Fund. The value of shares issued by the Acquiring Fund is presented in the
Schedules of capital stock activity. Net assets as of the conversion date were
as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS
TOTAL NET ASSETS TOTAL NET ASSETS OF ACQUIRING FUND
OF ACQUIRED FUND OF ACQUIRING FUND AFTER CONVERSION
(000) (000) (000)
--------------------------------------------------------
<S> <C> <C>
$52,112 $2,597,973 $2,650,085
</TABLE>
50
<PAGE> 55
NATIONS FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS, DIRECTORS AND TRUSTEES OF NATIONS FUNDS
In our opinion, the accompanying statements of net assets, and the related
statements of operations, of cash flows for Nations Treasury Fund and 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, 2000, 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 each of the periods indicated, in conformity with accounting
principles generally accepted in the United States. 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 auditing standards
generally accepted in the United States, 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,
2000 by correspondence with the custodian, provide a reasonable basis for the
opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
May 19, 2000
51
<PAGE> 56
NATIONS FUNDS
TAX INFORMATION (UNAUDITED)
For the year ended March 31, 2000, 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.
52
<PAGE> 57
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53
<PAGE> 58
P.O. Box 34602
Charlotte, NC 28254-4602
Toll free 1.800.321.7854
Nations Funds
MONEYAR (3/00)
