<PAGE> 1
NATIONS [GRAPHIC]
FUNDS
Investments For A Lifetime[SM]
MONEY Nations
Tax Exempt Fund
Nations
MARKET Treasury Fund
Nations
Government
FUNDS Money Market Fund
Nations
Prime Fund
Semi-Annual Report For The Period
Ended September 30, 1997
<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. Stephens Inc., which
is not affiliated with NationsBank,
N.A., is not a bank, and securities
offered by it are not guaranteed by
any bank or insured by the FDIC.
Stephens Inc., member NYSE, SIPC. [GRAPHIC DEPICTING BASKETS]
Nations Funds Investment Adviser:
NationsBanc Advisors, Inc.
Nations Funds Investment Sub-
Advisers: TradeStreet Investment
Associates, Inc., Gartmore Global
Partners and Boatmen's Capital
Management, Inc.
- ----------------------------------
NOT FDIC
INSURED
- ----------------------------------
MAY LOSE VALUE
- ----------------------------------
NO BANK GUARANTEE
- ----------------------------------
<PAGE> 3
NATIONS FUNDS
DEAR SHAREHOLDER:
The capital markets, particularly the U.S. stock markets, have continued to
surprise participants with solid investment returns through the first nine
months of 1997. But as we had anticipated in January, the markets have become
more volatile than in the previous two years. Stock investors have experienced
more daily swings exceeding one percent of value than at any time in the 1990s.
Bond investors have seen yields move up and down in a broad range for most of
the year. Meanwhile, municipal securities have enjoyed better total returns than
their taxable counterparts.
Investors have continued to benefit from the outstanding economic conditions in
the U.S. Employment is high and jobs are being produced at a 200,000-plus rate
monthly. The growth rate for the U.S. economy has exceeded three percent in real
terms (after inflation) for the past four quarters. Corporate profits are
exceeding Wall Street estimates and should finish the year up about twelve
percent, which would make 1997 a record sixth consecutive year of double-digit
profit growth. Inflation is perhaps the biggest of all: retail inflation has
registered a benign 2.2 percent for the past year, and wholesale inflation has
actually dropped over the same period.
As we have noted, investors have been the beneficiaries of strong economic and
market conditions over the past three years. However, we do not subscribe to the
notion that the historical business cycle has been "repealed." Indeed, we
encourage investors to maintain reasonable expectations about the future. A
recent national survey of 750 mutual fund investors conducted by Montgomery
Asset Management found that those shareholders surveyed anticipated average
annual returns of 34 percent on their investments over the next decade. Such
results, roughly triple the average annual return from stocks over the past 60
years, demonstrate the strong exuberance in the marketplace and give us some
cause for concern. We believe investors should temper their expectations of the
future and enjoy the rewards of the recent past.
That being said, there is little on the horizon that would suggest trouble for
investors as 1997 draws to a close. We believe that the pattern of the past
several years will continue to hold true and should produce a reasonable
investment environment as we move into the new year. The economy continues its
vigorous pace, monetary policy is neutral, inflation is virtually absent, and
the profit picture remains intact. However, any changes on any of these fronts
could translate into market volatility. On behalf of our shareholders, we will
stay vigilant in our work as we pursue the Funds' investment objectives.
<TABLE>
<S> <C>
Sincerely,
/s/ A. Max Walker /s/ Mark Williamson
A. Max Walker Mark Williamson
President and Chairman of the Board President, NationsBanc Advisors, Inc.
September 30, 1997
</TABLE>
ADDENDUM
Since the date of this report, equity markets worldwide have experienced
enormous volatility sparked by events in the Pacific Rim. However, the U.S.
economic picture remains positive -- fundamentals have not changed. Although we
expect continued volatility, our long-term view of the domestic market remains
intact.
November 26, 1997
1
<PAGE> 4
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- 100.6%
ALABAMA -- 2.6%
Alabama (State of), Housing
Finance Authority,
Multi-family Housing, AmSouth
Bank N.A., Birmingham LOC:
$ 6,200,000 (Ski Lodge III), Series A,
4.150% 03/01/15+............. $ 6,200,000
6,000,000 (Turtle Lake Project), Series
F,
4.100% 09/01/23+............. 6,000,000
1,610,000 Birmingham, Alabama, Industrial
Development Board,
(Avondale -- Phase III),
AmSouth Bank N.A., Birmingham
LOC, 4.400% 06/01/00+........ 1,610,000
3,600,000 Gadsden, Alabama, Industrial
Development Board, Industrial
Development Revenue,
(Keystone Foods Corporation
Project), AMT, Bank of
Scotland LOC, 4.250%
05/01/04+.................... 3,600,000
10,000,000 McIntosh, Alabama, Industrial
Development Board, Solid
Waste Disposal Revenue,
(Ciba-Geigy Corporation
Project), Union Bank of
Switzerland LOC, 4.200%
07/01/04+.................... 10,000,000
4,000,000 Mobile, Alabama, Industrial
Development Board, (IB
Chemical Company Project),
Industrial Bank of Japan Ltd.
LOC, 4.300% 12/01/97+........ 4,000,000
9,890,000 Mobile, Alabama, Public
Educational Building
Authority Revenue, (Alabama
High School Math & Science
Project), 4.100% 07/01/22+... 9,890,000
2,000,000 Opelika, Alabama, Industrial
Development Board, (Flowers
Baking Company Project),
SunTrust Bank LOC, 4.150%
12/01/99+.................... 2,000,000
1,000,000 Parish, Alabama, Industrial
Development Board, PCR,
(Alabama Power Company
Project), 3.900%
06/01/15++................... 1,000,000
Phenix (County of), Alabama,
Industrial Development Board,
Environmental Improvement
Revenue, AMT (Mead Coated
Board Project):
4,100,000 Bayerische Vereinsbank LOC,
3.950% 03/01/31++............ 4,100,000
4,200,000 Series A, Toronto Dominion Bank
LOC, 3.950% 06/01/28++....... 4,200,000
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
ALABAMA -- (CONTINUED)
$ 5,700,000 Stevenson, Alabama, Industrial
Development Board,
Environmental Improvement
Revenue, (Mead Corporation
Project), AMT, Societe
Generale LOC, 3.950%
01/01/31++................... $ 5,700,000
--------------
58,300,000
--------------
ALASKA -- 1.7%
16,600,000 Alaska, (State of) Industrial
Development and Export
Authority Exempt Facilities
Revenue, (Fairbanks Gold
Mining, Inc.), Union Bank of
Switzerland LOC, 4.200%
05/01/09+.................... 16,600,000
20,750,000 Valdez, Alaska, Marine Term
Revenue, (Arco Transportation
Project), Series B, Atlantic
Richfield Guaranteed, 4.250%
05/01/31+.................... 20,750,000
--------------
37,350,000
--------------
ARIZONA -- 5.1%
Apache (County of), Arizona,
Industrial Development
Authority, PCR, (Tuscon
Electric Power):
5,500,000 Series 83A, Barclays Bank Plc
LOC, 4.100% 12/15/18+........ 5,500,000
12,700,000 Series 83B, Bank of New York
LOC, 4.150% 12/15/18+........ 12,700,000
29,300,000 Series A, Chase Bank LOC,
4.100% 06/15/20+............. 29,300,000
5,100,000 Goodyear, Arizona, Industrial
Development Authority, (Walle
Corporation Project), AMT,
PNC Bank LOC, 4.250%
05/01/15+.................... 5,100,000
2,700,000 Maricopa (County of), Arizona,
PCR, (Arizona Public Service
Company), Series F, Bank of
America LOC, 3.900%
05/01/29++................... 2,700,000
Maricopa (County of), Arizona,
Unified School District:
6,000,000 No. 69 Paradise Valley, Tax
Anticipation Notes, Series A,
4.400% 06/30/98.............. 6,022,708
5,000,000 No. 80 Chandler, Tax
Anticipation Notes, Series A,
4.400% 06/30/98.............. 5,018,923
4,000,000 No. 83 Cartwright Elementary,
Tax Anticipation Notes,
Series A, 4.400% 06/30/98.... 4,015,139
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE> 5
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
ARIZONA -- (CONTINUED)
Pima (County of), Arizona,
Industrial Development
Authority, (Tuscon Electric),
Series A:
$33,800,000 Bank of America LOC, 4.150%
07/01/22+.................... $ 33,800,000
7,700,000 Societe Generale LOC, 4.100%
06/15/22+.................... 7,700,000
--------------
111,856,770
--------------
ARKANSAS -- 0.4%
6,300,000 Little Rock, Arkansas,
Metrocentre District Number
1, Improvement Revenue,
(Little Rock Newspapers Inc.
Project), Bank of New York
LOC, 3.950% 12/01/25++....... 6,300,000
3,250,000 Lowell, Arkansas, Industrial
Development Revenue, (Little
Rock Newspapers Inc.
Project), AMT, Bank of New
York LOC, 4.200% 06/01/31+... 3,250,000
--------------
9,550,000
--------------
CALIFORNIA -- 1.6%
10,850,000 California (State of), Higher
Education Loan, Student Loan
Revenue, Sallie Mae Guaranty,
4.000% 07/01/98.............. 10,850,000
Los Angeles, California,
Regional Airports Improvement
Corporation, (Los Angeles
International Airport),
Societe Generale LOC:
2,000,000 Facilities Sublease Revenue,
3.850% 12/01/25++............ 2,000,000
5,900,000 Terminal Facilities Completion
Revenue, AMT, Societe
Generale LOC, 3.950%
12/01/25++................... 5,900,000
16,900,000 Student Education Loan
Marketing Corporation,
Student Loan Revenue, Series
A, Dresdner Bank LOC, 4.100%
11/01/02+.................... 16,900,000
--------------
35,650,000
--------------
COLORADO -- 3.0%
1,000,000 Adams (County of), Colorado,
School District No. 12, GO,
FGIC Insured, 4.125%
12/15/97..................... 1,001,063
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
COLORADO -- (CONTINUED)
$13,000,000 Colorado (State of), Housing
Finance Authority,
Multi-family Housing Revenue,
(Grants Plaza), Series A,
Bankers Trust Company LOC,
4.175% 11/01/09+............. $ 13,000,000
1,900,000 Colorado (State of), Post
Secondary Educational
Authority, Economic
Development Revenue, Bank One
LOC, 4.150% 06/01/11+........ 1,900,000
Denver (City & County of)
Colorado, Airport Revenue,
AMT:
3,500,000 Series F, Bank of Montreal LOC,
4.250% 11/15/25+............. 3,500,000
5,000,000 Series G, Credit Local de
France LOC, 4.250%
11/15/25+.................... 5,000,000
2,205,000 El Paso (County of), Colorado,
Multi-family Housing Revenue,
(Briarglen Apartments
Project), General Electric
Capital Corporation Guaranty
LOC, 4.100% 12/01/24+........ 2,205,000
1,440,000 Englewood, Colorado, Industrial
Development Revenue, (Swedish
Mob Project), Bank of Tokyo-
Mitsubishi Bank Ltd. LOC,
4.200% 12/01/10+............. 1,440,000
32,000,000 Moffat (County of), Colorado,
PCR, CFC Guarantee, AMBAC
Insured, Societe Generale
SBPA, 4.100% 07/01/20+....... 32,000,000
6,600,000 Pitkin (County of), Colorado,
Industrial Development
Revenue, (Aspen Skiing
Company Project), First
National Bank of Chicago LOC,
Series B, AMT, 3.900%
04/01/14++................... 6,600,000
--------------
66,646,063
--------------
DELAWARE -- 2.6%
24,000,000 Delaware (State of), Economic
Development Authority
Revenue, Hospital Billing,
Series C, MBIA Insured,
Morgan Stanley Group, Inc.
SBPA, 4.050% 12/01/15+....... 24,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 6
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
DELAWARE -- (CONTINUED)
Delaware (State of), Economic
Development Authority,
Industrial Development
Revenue, (Star Enterprise),
AMT:
$10,000,000 Series A, Canadian Imperial
Bank of Commerce LOC, 3.800%
08/01/29+.................... $ 10,000,000
10,000,000 Series B, Canadian Imperial
Bank of Commerce LOC, 4.100%
08/01/29+.................... 10,000,000
13,900,000 Series C, Canadian Imperial
Bank of Commerce LOC, 4.200%
08/01/29+.................... 13,900,000
--------------
57,900,000
--------------
DISTRICT OF COLUMBIA -- 1.0%
District of Columbia, GO,
(Georgetown University),
Bayerische Landesbank LOC:
4,145,000 Series B, 4.050% 04/01/04+..... 4,145,000
5,700,000 Series C, 4.050% 04/01/12+..... 5,700,000
7,300,000 Series D, 4.050% 04/01/17+..... 7,300,000
1,100,000 Series E, 4.050% 04/01/18+..... 1,100,000
2,900,000 District of Columbia, Hospital
Revenue, (Columbia Women's
Hospital), Series A, Bank of
Tokyo-Mitsubishi Bank Ltd.
LOC, 4.300% 07/01/20+........ 2,900,000
--------------
21,145,000
--------------
FLORIDA -- 8.3%
12,810,000 Broward (County of), Florida,
Housing Finance Authority,
Multi-family Housing Revenue,
(Fisherman's Project),
Continental Casualty Surety
Bond, 4.100% 11/01/07+....... 12,810,000
Dade (County of), Florida,
Industrial Development
Authority:
(Dolphins Stadium Project),
Societe Generale LOC:
4,100,000 Series C, 4.100% 01/01/16+..... 4,100,000
5,200,000 Series D, 4.100% 01/01/16+..... 5,200,000
4,220,000 (Phase II Furniture Corporation
Project), AMT, SunTrust Bank
LOC, 4.250% 11/01/14+........ 4,220,000
14,998,500 Florida (State of), Board of
Education, Capital Outlay,
BTP-179, Bankers Trust
Company SBPA, 3.550%
06/01/01+.................... 14,998,500
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
FLORIDA -- (CONTINUED)
$24,225,000 Florida (State of), Housing
Finance Agency, AMT, 4.000%
06/01/98..................... $ 24,225,000
Florida (State of), Housing
Finance Agency, Multi-family
Housing Revenue:
14,800,000 (Clear Lake Project), Series D,
Continental Casualty Surety
Bond, 4.100% 12/01/09+....... 14,800,000
3,100,000 (Lake of North Dale Project),
Southtrust Bank LOC, 4.200%
06/01/07+.................... 3,100,000
5,000,000 (Lakeside Project), Series B,
Bankers Trust Company LOC,
4.175% 08/01/06+............. 5,000,000
7,000,000 (Woodlands Project), Citibank
LOC, 4.100% 12/01/07+........ 7,000,000
2,025,000 Gainsville, Florida, Utilities
(Series A, pre-refunded)
7.875% 10/01/97.............. 2,065,500
Jacksonville, Florida, Hospital
Revenue, (Baptist Medical
Center Project), First Union
National Bank, Charlotte LOC:
6,600,000 4.100% 06/01/09+............... 6,600,000
21,695,000 3.800% 07/01/14+............... 21,695,000
4,700,000 Jacksonville, Florida, Parking
Systems Revenue, (University
of North Florida Foundation
Inc., Project), First Union
National Bank LOC, 4.050%
05/01/22+.................... 4,700,000
2,500,000 Key West, Florida, Community
Redevelopment Agency Revenue,
(Pier House Joint Venture),
PNC Bank, Ohio LOC, 4.100%
01/01/98+.................... 2,500,000
3,750,000 Manatee (County of), Florida,
Housing Finance Authority,
Multi-family Mortgage
Revenue, (Hampton Court
Project), Series A, First
Union National Bank LOC,
4.050% 06/01/07+............. 3,750,000
10,950,000 Orange (County of) Florida,
Health Facilities Authority
Revenue, (SHCC Services Inc.
Project), SunTrust Bank LOC,
4.150% 12/01/23+............. 10,950,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 7
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
FLORIDA -- (CONTINUED)
$ 7,000,000 Palm Beach (County of),
Florida, (Norton Gallery Inc.
Project), Northern Trust LOC,
4.050% 05/01/25+............. $ 7,000,000
3,250,000 St. Lucie (County of), Florida,
Industrial Development
Authority, (Florida
Convalescent Centers
Project), Series A, Toronto
Dominion Bank LOC, 3.750%
01/01/11+++.................. 3,250,000
St. Lucie (County of), Florida,
PCR, (Florida Power and Light
Company):
10,025,000 3.650% 10/08/97................ 10,025,000
7,000,000 3.650% 10/08/97................ 7,000,000
9,500,000 University of Northern Florida,
Capital Improvement Revenue,
First Union National Bank of
North Carolina LOC, 4.100%
11/01/27+.................... 9,500,000
--------------
184,489,000
--------------
GEORGIA -- 5.6%
10,000,000 Albany-Dougherty, Georgia,
Payroll Development
Authority, PCR, (Philip
Morris Companies Inc.
Project), 4.150% 10/01/05+... 10,000,000
6,385,000 Clayton (County of), Georgia,
Housing Authority,
Multi-family Housing Revenue,
(Chateau Forest Apartments),
Series E, Barclays Bank Plc
LOC, 4.050% 01/01/21+........ 6,385,000
2,445,000 Cobb (County of), Georgia,
Industrial Development
Authority Revenue,
(Datagraphic Inc. Project),
AMT, Southtrust Bank LOC,
4.050% 05/01/05+............. 2,445,000
3,700,000 Cobb (County of), Georgia,
Residential Care Facilities
for the Elderly Authority,
(North Georgia Presbyterian
Homes, Inc. Project),
SunTrust Bank LOC, 4.150%
08/01/18+.................... 3,700,000
2,250,000 Columbus, Georgia, Housing
Authority, Multi-family
Housing Revenue, (Quail Ridge
Project), Columbus Bank &
Trust Company LOC, 4.350%
02/01/05+.................... 2,250,000
3,555,000 Columbus, Georgia, Industrial
Development Revenue,
(Parisian Inc. Project),
Columbus Bank & Trust Company
LOC, 4.450% 04/01/07+........ 3,555,000
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
GEORGIA -- (CONTINUED)
$ 1,200,000 Coweta (County of), Georgia,
Development Authority,
Industrial Revenue, (Jack
Eckerd Corporation Project),
UBS LOC, 3.800% 03/01/09++... $ 1,200,000
Dekalb (County of), Georgia,
Housing Authority,
Multi-family Housing Revenue:
2,800,000 (Camden Brook Project), FNMA
Collateral Agreement, 4.150%
06/15/25+.................... 2,800,000
5,430,000 (Haystack Apartment Projects),
AMT, General Electric Capital
Corporation LOC, 4.250%
12/01/20+.................... 5,430,000
6,875,000 (Stone Mill Run Apartments
Project), Series A, AMT,
First Tennessee Bank LOC,
4.200% 08/01/27+............. 6,875,000
5,000,000 (Terrace Club Project), Series
B, Southtrust Bank LOC,
4.200% 11/01/15+............. 5,000,000
13,760,000 (Wood Terrace Apartments
Project), FNMA Collateral
Agreement, 4.050%
12/15/15+.................... 13,760,000
3,960,000 Dekalb (County of), Georgia,
Housing Authority, Revenue
Anticipation Certificates,
(Dekalb Medical Center
Project), SunTrust Bank LOC,
4.150% 09/01/09+............. 3,960,000
6,200,000 Fulco (County of), Georgia,
Hospital Authority, Revenue
Anticipation Certificates,
(Piedmont Hospital Project),
Sun Trust Bank LOC, 4.150%
02/01/07+.................... 6,200,000
3,000,000 Fulton (County of), Georgia,
Development Authority
Revenue, (Spelman College
Project), SunTrust Bank LOC,
4.150% 06/01/16+............. 3,000,000
2,400,000 Greene (County of), Georgia,
Industrial Development
Authority Revenue, (Chipman-
Union Inc. Project), Series
A, AMT, SunTrust Bank LOC,
4.250% 03/01/05+............. 2,400,000
3,700,000 Gwinnett (County of), Georgia,
Industrial Development
Revenue, (United Stationers
Company Project), PNC Bank
LOC, 4.100% 12/31/02+........ 3,700,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 8
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
GEORGIA -- (CONTINUED)
$ 3,000,000 Henry (County of), Georgia,
Development Authority
Revenue, (Georgia-Pacific
Corporation Project),
SunTrust Bank LOC, 4.150%
05/01/04+.................... $ 3,000,000
Municipal Electric Authority,
Georgia, (Project One),
Subordinated Bonds:
8,250,000 Series D, ABN-AMRO LOC, 4.150%
01/01/22+.................... 8,250,000
15,000,000 Series E, ABN-AMRO LOC, 4.100%
01/01/26+.................... 15,000,000
5,000,000 Smyrna, Georgia, Multi-family
Housing Authority Revenue,
(Post Valley Project), FNMA
Collateralized, 4.100%
06/01/25+.................... 5,000,000
4,000,000 Tallapoosa, Georgia,
Development Authority
Revenue, (U.S. Canada Company
Project), Harris Trust &
Savings Bank LOC, 4.050%
02/01/15+.................... 4,000,000
5,000,000 Thomaston-Upson (County of),
Georgia, Industrial
Development Revenue,
(Quad/Thomaston Project),
First Union National Bank,
Charlotte LOC, 4.100%
04/01/00+.................... 5,000,000
--------------
122,910,000
--------------
HAWAII -- 0.4%
8,700,000 Hawaii (State of), Housing
Finance and Development
Corporation, Rental Housing
System Revenue Bonds, Series
89A, Banque Nationale de
Paris LOC, 4.150%
07/01/24+.................... 8,700,000
--------------
ILLINOIS -- 13.5%
6,275,000 Chicago, Illinois, Industrial
Development Revenue, (Eli's
Chicago's Finest Inc.), AMT,
First Bank LOC, 4.300%
11/01/26+.................... 6,275,000
2,700,000 Chicago, Illinois, O'Hare
International Airport,
(American Airlines Inc.),
Series A, Royal Bank of
Canada LOC, 3.900%
12/01/17++................... 2,700,000
Chicago, Illinois, O'Hare
International Airport, Second
Lien:
12,100,000 Series A, Societe Generale LOC,
4.100% 01/01/15+............. 12,100,000
3,300,000 Series C, Societe Generale LOC,
4.050% 01/01/18+............. 3,300,000
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
ILLINOIS -- (CONTINUED)
Illinois (State of),
Development Finance
Authority:
$ 3,920,000 (Chicago Academy of Sciences),
American National Bank &
Trust Company LOC, 4.200%
01/01/31+.................... $ 3,920,000
26,100,000 (Chicago Symphony Orchestra),
Northern Trust Company LOC,
4.050% 12/01/28+............. 26,100,000
19,400,000 (Chicago Symphony Project),
Bank of America LOC, 4.050%
06/01/31+.................... 19,400,000
26,600,000 (Lyric Opera Chicago Project),
Northern Trust Company; NBD
Bank N.A.; Harris Trust &
Savings Bank; and Caisse
National de Credit Agricole
LOC, 4.050% 12/01/28+........ 26,600,000
5,000,000 (Presbyterian Home Lake),
Series A, ABN-AMRO Bank LOC,
4.200% 09/01/31+............. 5,000,000
9,000,000 (Roosevelt University Project),
American National Bank &
Trust Company LOC, 4.200%
04/01/25+.................... 9,000,000
9,000,000 (YMCA of Metropolitan Chicago
Project), Series A, Harris
Trust & Savings Bank LOC,
4.050% 06/01/26+............. 9,000,000
2,000,000 Illinois (State of),
Development Finance
Authority, Economic
Development Revenue, (Addison
450 LP Project), AMT,
American National Bank &
Trust Company LOC, 4.150%
12/01/09+.................... 2,000,000
Illinois (State of),
Development Finance
Authority, Industrial
Development Revenue:
2,000,000 (MTI Project), AMT, Industrial
Bank of Japan Ltd., NY LOC,
4.300% 01/01/09+............. 2,000,000
3,000,000 (Randolph Pickle Corporation),
AMT, American National Bank &
Trust Company LOC, 4.400%
06/01/12+.................... 3,000,000
2,515,000 (Xavier University), American
National Bank & Trust Company
LOC, 4.200% 10/01/12+........ 2,515,000
Illinois (State of),
Development Finance
Authority, PCR:
3,700,000 (Diamond Star Motors Project),
Bank of Tokyo-Mitsubishi Bank
Ltd. LOC, 3.950%
12/01/08++................... 3,700,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 9
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
ILLINOIS -- (CONTINUED)
$ 7,100,000 (Edison Company Project),
Series C, ABN-AMRO Bank LOC,
4.150% 03/01/09+............. $ 7,100,000
9,300,000 (Illinois Power Company
Project), AMT, Series B, Bank
of Tokyo-Mitsubishi Bank Ltd.
LOC, 3.800% 03/01/17+........ 9,300,000
6,500,000 (Pollution Power Project),
Canadian Imperial Bank of
Canada LOC, 3.800% 03/17/98.. 6,500,000
3,700,000 Illinois (State of),
Educational Facilities
Revenue: (Arts Clubs of
Chicago), Northern Trust
Company LOC, 4.050%
01/01/26+.................... 3,700,000
6,400,000 (Chicago Historical Society)
Northern Trust Company, LOC,
3.450% 12/01/25+............. 6,400,000
14,700,000 (Illinois Institute of
Technology), Series A, NBD
Bank N.A.; Northern Trust
Company LOC, 4.050%
09/01/25+.................... 14,700,000
6,000,000 (Museum of Science & Industry),
First National Bank of
Chicago LOC, 4.050%
10/01/26+.................... 6,000,000
11,675,000 (University Pooled Financing
Program), FGIC Insured, NBD
Bank N.A. SBPA, 4.050%
12/02/05+.................... 11,675,000
5,600,000 Illinois (State of), Health
Facilities Authority Revenue
Bonds: (Childrens Memorial
Hospital Project), Series B,
National Bank of Detroit LOC,
4.050% 11/01/15+............. 5,600,000
7,900,000 (Condell Memorial Hospital
Project), Bank of Tokyo-
Mitsubishi Bank Ltd. LOC,
3.450% 11/01/05+++........... 7,900,000
(Evanston Hospital Corporation
Project):
5,000,000 3.650% 10/31/97................ 5,000,000
7,000,000 3.750% 01/15/98................ 7,000,000
5,000,000 3.950% 04/30/98................ 5,000,000
5,000,000 3.900% 07/31/98................ 5,000,000
4,000,000 (Gottlieb Health Resources Inc.
Project), Harris Trust and
Savings Bank LOC, 4.050%
11/15/24+.................... 4,000,000
1,000,000 (Northwestern Memorial Hospital
Project), Northern Trust
Company LOC, 3.800%
08/15/25+.................... 1,000,000
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
ILLINOIS -- (CONTINUED)
$ 2,950,000 (Park Plaza Retirement Center
Project), ABN-AMRO Bank LOC,
4.050% 09/15/20+............. $ 2,950,000
6,700,000 (The Streeterville Corporation
Project), First National Bank
of Chicago LOC, 4.050%
08/15/24+.................... 6,700,000
7,000,000 Jackson-Union (Counties of),
Illinois, Regional District,
Port Facilities Revenue,
(Environmental Transportation
Services), First Union
National Bank LOC, 4.150%
04/01/22+.................... 7,000,000
4,500,000 Kane (County of), Illinois,
Revenue Bonds, (Glenwood
School For Boys), Harris
Trust & Savings Bank,
Illinois LOC, 4.050%
02/01/28+.................... 4,500,000
9,200,000 Orland Park, Illinois,
Industrial Development
Revenue, (Panduit Corporation
Project), AMT, Wachovia Bank,
Georgia LOC, 4.150%
04/01/31+.................... 9,200,000
7,000,000 Quincy, Illinois, (Quincy
University), Allied Irish
Bank Plc. LOC, 4.150%
06/01/22+.................... 7,000,000
7,195,000 Richton Park, Illinois,
Industrial Development
Revenue, (Sinter Metals Inc.
Project), AMT, Mellon Bank
LOC, 4.250% 04/01/16+........ 7,195,000
9,200,000 Sauget, Illinois, GO, Credit
Locale de France LOC, 4.050%
02/01/16+.................... 9,200,000
1,800,000 Southwestern Illinois
Development Authority,
Industrial Development
Revenue, (Robinson Steel
Company Inc. Project), AMT,
American National Bank &
Trust Company LOC, 4.150%
12/01/06+.................... 1,800,000
--------------
298,030,000
--------------
INDIANA -- 3.8%
5,400,000 Duneland, Indiana, (Chesterton
School Corporation), Tax
Anticipation Time Warrants,
4.100% 12/31/97.............. 5,405,844
5,300,000 Fort Wayne, Indiana, Economic
Development Revenue,
(Georgetown Place Venture
Project), Banc One N.A. LOC,
4.150% 12/01/15+............. 5,300,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 10
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
INDIANA -- (CONTINUED)
$ 3,495,000 Hendricks (County of), Indiana,
Redevelopment Commission, Tax
Increment Revenue, (Heartland
Crossings Project), Series A,
Banc One N.A. LOC, 4.250%
01/01/22+.................... $ 3,495,000
5,000,000 Indiana (State of), Bond Bank,
(Advanced Funding Notes),
Series A2, 4.250% 01/21/98... 5,008,153
Indiana (State of), Development
Finance Authority, Economic
Development Revenue:
14,900,000 Educational Facilities,
(Indiana Historical Society
Project), NBD Bank LOC,
4.050% 08/01/31+............. 14,900,000
2,100,000 (Fischer Enterprises Ltd.
Project), PNC Bank LOC,
4.250% 11/01/01+............. 2,100,000
2,400,000 (Walker-Williams Lumber
Company, Inc.), AMT, Columbus
Bank & Trust Company LOC,
4.450% 01/01/09+............. 2,400,000
Indianapolis, Indiana, Economic
Development Revenue:
1,750,000 (Art Center of Indianapolis
Project), Bank One, Indiana
LOC, 4.150% 02/01/98+........ 1,750,000
7,600,000 (Edgcomb Metals Company
Project), Banque Nationale de
Paris LOC, 4.050%
12/01/08+.................... 7,600,000
Indianapolis, Indiana,
Multi-family Housing Revenue:
1,300,000 (Canal Square Project), Societe
Generale LOC, 4.100%
12/01/15+.................... 1,300,000
3,200,000 (El Beulah Retirement Village),
National Bank of Detroit LOC,
3.950% 03/01/21+............. 3,200,000
Purdue University, Indiana,
University Revenue, Student
Fee:
3,300,000 Series H, 4.050% 07/01/17+..... 3,300,000
3,400,000 Series K, 4.050% 07/01/20+..... 3,400,000
2,900,000 Rockport, Indiana, PCR,
(Indiana and Michigan
Electric Company), Series A,
AMBAC Insured, Swiss Bank
LOC, 4.100% 08/01/14+........ 2,900,000
5,500,000 St. Joseph (County of),
Indiana, Economic Development
Revenue, (Brothers of the
Holy Cross Project), Key Bank
LOC, 3.600% 09/01/17+........ 5,500,000
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
INDIANA -- (CONTINUED)
$ 6,600,000 Terre Haute, Indiana, Economic
Development Revenue, (First
Financial Corporation
Project), First National Bank
of Chicago LOC, 4.050%
12/01/15+.................... $ 6,600,000
9,500,000 Vigo (County of), Indiana,
School Corporation Warrants,
4.000% 12/30/97.............. 9,504,534
--------------
83,663,531
--------------
IOWA -- 0.1%
2,000,000 Iowa (State of), Finance
Authority, Industrial
Development Revenue, (Sauer-
Sunstrand Company Project),
AMT, Bayerishce Vereinsbank
LOC, 4.100% 05/01/26+........ 2,000,000
--------------
KANSAS -- 3.0%
9,600,000 Kansas (State of), Development
Finance Authority, (Seaboard
Projects), Series A, AMT,
Bank of New York LOC, 4.200%
12/02/25+.................... 9,600,000
6,020,000 Lawrence, Kansas, GO, Series B,
3.900% 10/01/98.............. 6,018,799
42,870,000 Olathe, Kansas, Educational
Facilities Revenue, (Kansas
Independent College
Association), Series A,
Midland Bank Plc LOC, 4.100%
07/01/24+.................... 42,870,000
2,800,000 Wichita, Kansas, Industrial
Revenue, (Brenner Tank Inc.
Project), AMT, Bank One LOC,
4.250% 12/01/05+............. 2,800,000
5,600,000 Winfield, Kansas, Industrial
Development Revenue, Morgan
Guaranty Trust Company, New
York, LOC, (Binney & Smith),
4.050% 11/01/07+............. 5,600,000
--------------
66,888,799
--------------
KENTUCKY -- 4.3%
31,500,000 Daviess (County of), Kentucky,
Solid Waste Disposal
Facilities Revenue, (Scott
Paper Company Project),
Series A, AMT, Kimberly Clark
Guaranty LOC, 3.950%
12/01/23++................... 31,500,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 11
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
KENTUCKY -- (CONTINUED)
$ 1,500,000 Hopkinsville, Kentucky,
Industrial Building Revenue,
(Brazeway Inc. Project), AMT,
NBD Bank, N.A. LOC, 4.100%
06/01/04+.................... $ 1,500,000
19,000,000 Kentucky (State of),
Asset/Liability Commission,
General Fund Revenue, Tax and
Revenue Anticipation Notes,
Series A, 4.500% 06/25/98.... 19,086,966
2,455,000 Kentucky (Rural), Economic
Development Authority,
Industrial Building Revenue,
(Technos Corporation Project),
AMT, Industrial Bank of
Japan, Ltd. LOC, 4.450%
12/01/09+.................... 2,455,000
7,500,000 Kentucky (State of), Economic
Development Finance
Authority, Hospital
Facilities Revenue, (Baptist
Healthcare Systems Project),
Canadian Imperial Bank of
Commerce LOC, 4.100%
08/15/31+.................... 7,500,000
3,500,000 Lebanon, Kentucky, Industrial
Development Revenue, (Wallace
Computer Services Inc.), AMT,
Wachovia Bank, Georgia LOC,
4.150% 06/01/19+............. 3,500,000
Lexington-Fayette, Kentucky,
Urban County Airport
Corporation Revenue, AMT,
Credit Local de France LOC:
1,000,000 Series A, 4.000% 04/01/24++.... 1,000,000
3,000,000 Series B, 4.000% 04/01/24++.... 3,000,000
5,630,000 Louisville and Jefferson
(Counties of), Kentucky,
Visitors and Convention
Commission, FSA Insured,
HypoBank SBPA, 3.550%
01/01/24+.................... 5,630,000
Mason (County of), Kentucky,
PCR, (East Kentucky Power
Cooperative Inc. Project),
CFC Insured:
5,800,000 Series B1, 4.100% 10/15/14+.... 5,800,000
9,150,000 Series B2, 4.100% 10/15/14+.... 9,150,000
6,000,000 Middletown, Kentucky,
(Christian Academy Project),
Bank One LOC, 4.150%
07/01/22+.................... 6,000,000
--------------
96,121,966
--------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
LOUISIANA -- 2.4%
$ 8,000,000 Ascension Parish, Louisiana,
PCR, (Borden Inc. Project),
Credit Suisse LOC, 4.100%
12/01/09+.................... $ 8,000,000
1,000,000 Ascension Parish, Louisiana,
Environment Improvement
Revenue Bonds, (Shell Oil
Company Project), 3.900%
10/01/08++................... 1,000,000
6,550,000 Caddo Parish, Louisiana,
Industrial Development Board,
(Frymaster Corporation
Project), Chase Bank LOC,
3.800% 01/01/03+............. 6,550,000
11,385,000 Jefferson Parish, Louisiana,
Hospital Service Revenue,
District Number 1, (West
Jefferson Medical Center),
Rabobank Nederland LOC,
4.150% 01/01/26+............. 11,385,000
20,225,000 Louisiana (State of), Public
Facilities Authority, PCR,
(Ciba-Geigy Corporation
Project), Swiss Bank LOC,
4.000% 12/01/04+............. 20,225,000
5,480,000 Upper Pontalba, Louisiana,
Building Restoration
Corporation Revenue, (Upper
Pontalba Building Project),
Bank One LOC, 4.150%
12/01/16+.................... 5,480,000
--------------
52,640,000
--------------
MARYLAND -- 0.5%
3,300,000 Baltimore (City of), Maryland,
Port Facilities Authority,
(Occidental Petroleum
Company), J.P. Morgan LOC,
3.600% 10/14/11+++........... 3,300,000
4,750,000 Maryland (State of), Economic
Development Revenue, (General
Binding Corporation Project),
AMT, Harris Trust & Savings
Bank LOC, 4.150% 03/01/26+... 4,750,000
2,300,000 Maryland (State of), Industrial
Development Finance
Authority, (Rock-Tennessee
Converting Company), AMT,
SunTrust Company Bank LOC,
4.250% 05/01/06+............. 2,300,000
--------------
10,350,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 12
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
MASSACHUSETTS -- 0.2%
$ 4,000,000 Massachusetts (State of),
Industrial Finance Authority,
Development Revenue,
(Sundstrand Corporation
Project), AMT, UBS LOC,
4.200% 05/01/32+............. $ 4,000,000
--------------
MICHIGAN -- 2.8%
Dearborn, Michigan, Economic
Development Corporation
Revenue, (Oakbrook Common
Project), Mellon Bank LOC:
16,300,000 4.050% 03/01/23+............... 16,300,000
2,800,000 4.050% 03/01/25+............... 2,800,000
1,000,000 Delta (County of), Michigan,
Economic Development
Corporation Revenue,
Improvement Revenue Bonds,
(Mead-Escanaba Paper
Project), Series F, Bank of
Nova Scotia LOC, 3.850%
12/01/13++................... 1,000,000
14,800,000 Green Lake, Michigan, Economic
Development Corporation
Revenue, (Interlochen Center
Arts Project), LaSalle
National Bank LOC, 4.050%
06/01/27+.................... 14,800,000
3,310,000 Jackson (County of), Michigan,
Economic Development
Corporation, Industrial
Development Revenue, (Jackson
Association LLC), Bank One,
Dayton LOC, 4.150%
10/01/14+.................... 3,310,000
8,000,000 Michigan (State of), Hospital
Financing Authority Revenue,
(St. Mary Hospital of
Livonia), Series A, Comerica
Bank LOC, 4.050% 07/01/17+... 8,000,000
3,000,000 Michigan (State of), Housing
Development Authority,
Limited Obligation Revenue,
(Pine Ridge Project), NatWest
LOC, 4.000% 10/01/07+........ 3,000,000
10,000,000 Michigan (State of), Municipal
Bond Authority Revenue,
Series B, 4.500% 07/02/98.... 10,046,918
1,800,000 Michigan (State of), Strategic
Funding Ltd. Obligation
Revenue, (Uni Boring Company
Inc.), NBD Bank N.A. LOC,
4.050% 12/01/98+............. 1,800,000
--------------
61,056,918
--------------
MINNESOTA -- 0.8%
5,950,000 Minneapolis, Minnesota,
Community Development Agency
Revenue, (Arena Acquisition
Project), Series A, First
Bank of America LOC, 4.100%
10/01/24+.................... 5,950,000
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
MINNESOTA -- (CONTINUED)
$ 6,160,000 Minneapolis, Minnesota, Housing
Development Revenue,
(Symphony Place Project),
Citibank LOC, 4.120%
12/01/14+.................... $ 6,160,000
5,100,000 New Ulm, Minnesota, Hospital
Facilities Revenue, (Health
Center Systems Project),
Norwest Corporation LOC,
3.900% 08/01/14+............. 5,100,000
--------------
17,210,000
--------------
MISSISSIPPI -- 0.6%
6,200,000 Lawrence (County of),
Mississippi, PCR,
(Georgia-Pacific Corporation
Project), Bank of
Tokyo-Mitsubishi Bank Ltd.
LOC, 4.175% 12/01/00+........ 6,200,000
Mississippi Business Finance
Corporation, Industrial
Development Revenue:
2,700,000 (Choctaw Maid Farms Inc.
Project), AMT Rabobank
Nederland LOC, 4.250%
03/01/10+.................... 2,700,000
2,400,000 (Mmars 2nd Program Project),
Series A, AMT, Midland Bank
LOC, 4.250% 06/01/05+........ 2,400,000
3,000,000 (Nitek Metal Services Inc.
Project), AMT, Bank of Tokyo-
Mitsubishi Bank Ltd. LOC,
4.200% 03/01/05+............. 3,000,000
--------------
14,300,000
--------------
MISSOURI -- 10.7%
Berkeley, Missouri, Industrial
Development Authority
Revenue:
5,000,000 (Flight Safety International
Inc. Project), Wachovia Bank
LOC, 4.150% 09/01/04+........ 5,000,000
5,000,000 (Wetterau Project), PNC Bank
LOC, 4.050% 07/01/06+........ 5,000,000
4,100,000 Columbia, Missouri, Special
Obligation Revenue, Series A,
Toronto Dominion Bank LOC,
4.150% 06/01/08+............. 4,100,000
10,800,000 Colombia, Missouri, Water and
Electricity Revenue, Series
B, Toronto Dominion Bank LOC,
4.150% 12/01/15+............. 10,800,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 13
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
MISSOURI -- (CONTINUED)
$ 1,400,000 Independence, Missouri,
Industrial Development
Authority Revenue, (Resthaven
Project), Credit Locale de
France LOC, 4.100%
02/01/25+.................... $ 1,400,000
17,100,000 Kansas City, Missouri,
Industrial Development
Authority, Multi-family
Housing Revenue, (Timberline
Village Apartments Project),
Bank of America LOC, 4.150%
06/01/08+.................... 17,100,000
9,000,000 Kansas City, Missouri,
Industrial Development
Revenue, (Owens-Illinois Inc.
Project), Industrial Bank of
Japan Ltd. LOC, 3.930%
12/31/08+.................... 9,000,000
465,000 Kansas City, Missouri, Water
Revenue, Series B, 5.750%
12/01/97..................... 466,533
Mexico, Missouri, Industrial
Development Authority
Revenue, (Wetterau Inc.
Project), PNC Bank LOC:
810,000 Series A, 4.050% 12/01/98+..... 810,000
815,000 Series B, 4.050% 12/01/98+..... 815,000
Missouri (State of),
Environmental Improvement and
Energy Resources Authority,
PCR:
2,000,000 (Monsanto Company Project),
4.050% 06/01/23+............. 2,000,000
5,795,000 (Noranda Aluminum Inc.
Project), Sanwa Bank LOC,
4.250% 10/01/02+............. 5,795,000
(Union Electric) West LB LOC:
7,000,000 3.900% 04/17/98................ 7,000,000
7,475,000 4.000% 05/08/98................ 7,475,000
7,000,000 3.950% 06/01/98................ 7,000,000
13,370,000 3.900% 06/08/98................ 13,370,000
3,000,000 3.850% 06/12/98................ 3,000,000
9,000,000 3.900% 06/12/98................ 9,000,000
Missouri (State of), Health and
Educational Facilities
Authority, Educational
Facilities Revenue:
7,400,000 (Rockhurst College Project),
Allied Irish Bank Group LOC,
4.000% 11/01/25+............. 7,400,000
(Washington University
Project), Morgan Guaranty
Trust Company of New York
SBPA:
1,500,000 4.150% 09/01/09+............... 1,500,000
3,500,000 Series A, 4.150% 09/01/10+..... 3,500,000
1,500,000 Series B, 3.900% 09/01/30++.... 1,500,000
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
MISSOURI -- (CONTINUED)
Missouri (State of), Health and
Educational Facilities
Authority, Health Facilities
Revenue:
$15,190,000 (Barnes Hospital Project),
Morgan Guaranty Trust
Company, New York LOC, 4.100%
12/01/15+.................... $ 15,190,000
(Sisters of Mercy Health Care
Project), Rabobank Nederland
LOC:
1,300,000 Series A, 3.750% 06/01/06+..... 1,300,000
15,400,000 Series 89B, ABN-AMRO, Rabobank
Nederland,
4.050% 06/01/19+............... 15,400,000
6,900,000 Series 92B, ABN-AMRO, Rabobank
Nederland,
4.050% 06/01/14+............. 6,900,000
6,100,000 Series D, ABN-AMRO, Rabobank
Nederland
Credit Suisse SBPA,
4.050% 06/01/19+............... 6,100,000
Missouri (State of), Health and
Educational Facilities,
School District Authority,
(Advance Funding Project):
4,500,000 (Ferguson-Florissant School
District), Series E, 4.500%
09/14/98..................... 4,524,654
5,650,000 (Independence School District),
Series F, 4.500% 09/14/98.... 5,680,955
5,000,000 (Joplin R-VIII School
District), Series G, 4.500%
09/14/98..................... 5,027,394
5,000,000 (North Kansas City School
District), Series I, 4.500%
09/14/98..................... 5,027,394
5,000,000 (St. Louis School District),
Series N, 4.500% 09/14/98.... 5,027,394
9,595,000 Platte, (County of) Missouri,
Industrial Development
Authority, Multi-family
Housing Revenue, (Wexford
Place Project), Bank One LOC,
4.150% 04/01/28+............. 9,595,000
St. Charles (County of),
Missouri, Industrial
Development Authority
Revenue:
3,070,000 (Casalon Apartments Project),
Citibank LOC, 4.150%
09/01/25+.................... 3,070,000
7,675,000 (Vanderbuilt Apartments
Project), Series A, Citibank
LOC, 4.100% 08/01/17+........ 7,675,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 14
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
MISSOURI -- (CONTINUED)
$ 4,400,000 (Venture Stores Inc. Project),
Bank of America LOC, 4.050%
10/01/06+.................... $ 4,400,000
St. Louis, Missouri, Industrial
Development Authority
Revenue:
$ 8,000,000 (Wetterau Inc. Project),
Wachovia Bank and Trust LOC:
4.050% 12/01/03+............... 8,000,000
5,000,000 (Wetterau Inc. Project), PNC
Bank LOC:
4.050% 05/01/09+............... 5,000,000
5,835,000 St. Louis, Missouri, Planned
Industrial Expansion
Authority, Development
Revenue, (Alumax Foils
Project), PNC Bank LOC,
4.200% 12/01/05+............. 5,835,000
--------------
236,784,324
--------------
MONTANA -- 0.5%
Forsyth, Montana, PCR, AMT:
1,400,000 (Pacificorp Colstrip Project),
Banque Nationale de Paris
LOC, 3.850% 12/01/16++....... 1,400,000
8,500,000 (Portland General Electric
Company), Deutsche
Bank LOC, 4.000% 12/01/16++.. 8,500,000
1,400,000 Montana (State of), Health
Facilities Authority, Health
Care Revenue, (Pooled Loan
Program), Series A, Norwest
Bank LOC, 4.150% 12/01/15+... 1,400,000
--------------
11,300,000
--------------
NEBRASKA -- 0.2%
4,000,000 York, Nebraska, Industrial
Development Revenue,
(Sunstrand Corporation
Project), AMT, United Bank of
Switzerland LOC, 4.200%
08/01/17+.................... 4,000,000
--------------
NEW JERSEY -- 0.3%
7,200,000 Jersey City, New Jersey,
Promisory Notes, 4.375%
09/18/98..................... 7,233,437
--------------
NEW MEXICO -- 0.6%
3,100,000 Albuquerque, New Mexico,
(Charter Hospital Inc.
Project), Bankers Trust
Company LOC, 3.850%
03/01/14+.................... 3,100,000
10,000,000 New Mexico (State of) Tax and
Revenue Anticipation Notes,
4.500% 06/30/98.............. 10,045,140
--------------
13,145,140
--------------
NEW YORK -- 0.1%
3,000,000 Erie (County of), New York,
Industrial Development
Agency, Civic Facilities
Revenue, (Depaul Community
Facilities Inc. Project), Key
Bank LOC, 4.100% 11/01/16+... 3,000,000
--------------
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
NORTH CAROLINA -- 2.7%
$ 7,500,000 Bladen (County of), North
Carolina, Industrial
Facilities and Pollution
Control Financing Authority,
(BCH Energy LP Project), AMT,
Bank of Tokyo-Mitsubishi Bank
Ltd. LOC, 4.300% 11/01/20+... $ 7,500,000
5,000,000 Cararrus (County of), North
Carolina, Industrial
Facilities and Pollution
Control Financing Authority,
(Phillip Morris Companies
Project), 4.150% 04/01/01+... 5,000,000
10,855,000 Charlotte (County of), North
Carolina, Housing Authority,
Multi-family Housing Revenue,
(Merrywood Senior Adult
Project), AMT, Branch Banking
and Trust Company LOC, 4.100%
06/01/11+.................... 10,855,000
2,865,000 Iredell, (County of), North
Carolina, Industrial
Facilities and Pollution
Control Financing Authority,
(Sullivan Corporation
Project), AMT, Bank One LOC,
4.250% 01/01/11+............. 2,865,000
Mecklenburg (County of), North
Carolina, Industrial
Facilities and Pollution
Control Finance Authority:
2,000,000 (Sterigenics International
Project), AMT, Comerica Bank,
California LOC, 4.100%
03/01/16+.................... 2,000,000
1,625,000 (Virkler Company Project), AMT,
First Union National Bank,
Charlotte LOC, 4.200%
12/01/04+.................... 1,625,000
7,700,000 New Hanover (County of), North
Carolina Industrial
Facilities and Pollution
Control Financing Authority,
(Corning Project), Wachovia
Bank N.A. LOC, SBPA, 4.150%
05/01/10+.................... 7,700,000
4,400,000 North Carolina (State of),
(University Housing Project),
Wachovia Bank SBPA, 4.020%
07/01/99+.................... 4,400,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 15
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
NORTH CAROLINA -- (CONTINUED)
$ 6,800,000 Raleigh-Durham, North Carolina,
Airport Authority, Special
Facilities Revenue, (American
Airlines), Series B, Royal
Bank of Canada LOC, 3.900%
11/01/15++................... $ 6,800,000
4,300,000 Randolph (County of), North
Carolina, Industrial
Facilities and Pollution
Control Financing Authority,
(Wayne Steel Inc.), AMT, Bank
One, Akron LOC, 4.250%
09/01/05+.................... 4,300,000
3,300,000 Stanley (County of), North
Carolina, Industrial
Development Authority, PCR,
(General Signal Corporation),
Wachovia Bank, Georgia LOC,
4.200% 12/01/00+............. 3,300,000
3,615,000 Winston-Salem, North Carolina,
(Risk Acceptance Management
Corporation Project),
Certificates of
Participation, Series 1988,
NatWest SBPA, 4.100%
07/01/09+.................... 3,615,000
--------------
59,960,000
--------------
OHIO -- 1.0%
2,250,000 Defiance (County of), Ohio,
Industrial Development
Revenue, (Isaac Property
Company), Series A, Key Bank
LOC, 4.100% 07/01/00+........ 2,250,000
8,000,000 Montgomery (County of), Ohio,
Economic Development Revenue
(The Dayton Art Institute
Project), National City Bank
of Ohio, 4.100% 05/01/26+.... 8,000,000
10,000,000 Ohio (State of), Air Quality
Development Authority
Revenue, (Duquesne Power),
United Bank of Switzerland
LOC, 3.950% 07/10/98......... 10,000,000
2,400,000 St. Marys, Ohio, Industrial
Development Revenue, (Setex
Inc. Project), AMT,
Industrial Bank of Japan Ltd.
LOC, 4.450% 12/01/01+........ 2,400,000
--------------
22,650,000
--------------
OKLAHOMA -- 0.3%
5,000,000 Oklahoma (State of),
Development Finance Authority
Revenue, (Seaboard Farms
Inc., Project), AMT, Bank of
New York LOC, 4.200%
03/01/27+.................... 5,000,000
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
OKLAHOMA -- (CONTINUED)
$ 2,250,000 Oklahoma (State of), Housing
Finance Agency, Single Family
Housing Revenue, PFloats
PT41, AMT, GNMA
Collateralized, Commerzbank
SBPA, 3.650% 08/01/18+....... $ 2,250,000
--------------
7,250,000
--------------
OREGON -- 1.3%
Oregon (State of):
5,000,000 Veterans S'76B, 3.95%
02/02/98..................... 5,000,000
5,000,000 Veterans S'76C, 4.05%
02/02/98..................... 5,000,000
6,000,000 Series 73G, GO, 4.100%
12/01/18+.................... 6,000,000
5,000,000 Series 73H, Morgan Guaranty
Trust Company, LOC, 4.100%
12/01/19+.................... 5,000,000
5,500,000 Portland (City of), Oregon,
Multi-family Housing Revenue,
(University Park Apartments
Project), Chase Manhattan
Bank LOC, 4.050% 10/01/11+... 5,500,000
2,000,000 Washington (County of), Oregon,
Housing Authority,
Multi-family Housing Revenue,
(Cedar Mill Project), AMT,
Societe Generale LOC, 4.150%
09/20/25+.................... 2,000,000
--------------
28,500,000
--------------
PENNSYLVANIA -- 3.9%
1,570,000 Allegheny (County of),
Pennsylvania, Hospital
Development Authority Revenue
(Presbyterian University
Hospital), Series B3, PNC
Bank LOC, 4.000% 03/01/18+... 1,570,000
Allegheny (County of),
Pennsylvania, Industrial
Development Authority,
(Duquesne Power):
5,000,000 Canadian Imperial Bank of
Commerce LOC, 4.100%
10/30/97..................... 5,000,000
9,565,000 (United Jewish Federation),
Series B, PNC Bank LOC,
4.100% 10/01/25+............. 9,565,000
Delaware Valley, Pennsylvania,
Regional Finance Authority,
Credit Suisse LOC:
10,000,000 Local Government Revenue,
Series C, 4.150% 12/01/20+... 10,000,000
14,700,000 Series 1986, 4.150% 08/01/16+.. 14,700,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 16
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
PENNSYLVANIA -- (CONTINUED)
$ 5,000,000 Montgomery (County of),
Pennsylvania, Industrial
Development Authority
Revenue, (Plymouth Woods
Project), PNC Bank LOC,
4.100% 09/01/06+............. $ 5,000,000
4,000,000 Pennsylvania (State of), GO,
(Pennsylvania State
University Project), Series
A, 4.500% 11/25/97........... 4,005,089
2,000,000 Pennsylvania (State of), Higher
Education Facilities
Authority Revenue, (Carnegie
Mellon University), Series C,
Union Bank of Switzerland
LOC, 3.900% 11/01/29++....... 2,000,000
25,000,000 Philadelphia, Pennsylvania,
School District, Tax and
Revenue Anticipation Notes,
Commerce Bank LOC, 4.500%
06/30/98..................... 25,094,938
5,500,000 Quakertown, Pennsylvania,
General Authority Revenue,
(Pooled Financing Program),
Series A, PNC Bank LOC,
3.900% 07/01/26+............. 5,500,000
4,925,000 Union (County of),
Pennsylvania, Hospital
Authority Revenue,
(Evangelical Community
Hospital), Series B, PNC Bank
LOC, 4.100% 10/01/23+........ 4,925,000
--------------
87,360,027
--------------
RHODE ISLAND -- 0.2%
4,000,000 Rhode Island (State of),
Industrial Facilities
Corporation, Industrial
Development Revenue, (Handy &
Harman Electric Project),
Bank of Nova Scotia LOC,
4.200% 04/01/04+............. 4,000,000
--------------
SOUTH CAROLINA -- 1.7%
5,175,000 Kershaw (County of), South
Carolina, Industrial
Development Revenue, (Deroyal
Textiles Inc.
Project), AMT, SunTrust
Bank LOC, 4.250% 12/01/07+... 5,175,000
7,340,000 South Carolina (State of),
Housing Authority, Rental
Housing Revenue, (Hampton
Pointe Apartments Project),
Bank of New York LOC, 4.200%
12/01/07+.................... 7,340,000
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
SOUTH CAROLINA -- (CONTINUED)
South Carolina (State of),
Jobs, Economic Development
Authority:
Health Facilities Revenue:
$ 5,860,000 (Martha Franks Baptist
Center Project), Wachovia
Bank,
Columbia LOC, 4.150%
04/01/19+.................. $ 5,860,000
3,400,000 (Specialty Equipment
Companies Project), AMT,
Bank of America Plc LOC,
4.250% 11/01/10+........... 3,400,000
5,125,000 Hospital Facilities Revenue,
(Kravet Fabrics Inc.
Project), AMT, Bank of New
York LOC, 4.200% 03/01/12+... 5,125,000
9,000,000 South Carolina (State of),
Jobs, Economic Development
Authority Revenue, (Alco-Lite
Industries LLC Project), AMT,
Wachovia Bank, South Carolina
LOC, 4.250% 04/01/12+........ 9,000,000
2,000,000 York (County of), South
Carolina, PCR, (North
Carolina Electrical
Membership Corporation
Project), CFC Guaranteed
4.100% 09/15/14+............. 2,000,000
--------------
37,900,000
--------------
TENNESSEE -- 1.4%
Chattanooga, Tennessee,
Industrial Development Board:
4,250,000 (Warehouse Row Limited
Project), Credit Suisse LOC,
4.100% 12/15/12+............. 4,250,000
2,000,000 (Seaboard Farms Inc. Project),
4.100% 06/01/04+............. 2,000,000
4,200,000 Covington, Tennessee,
Industrial Development Board,
(Charms Company Project),
Societe Generale LOC, 4.150%
06/01/27+.................... 4,200,000
6,969,000 Cumberland (County of),
Tennessee, Industrial
Development Board, Industrial
Development Revenue,
(Crossville Ceramics Company
Project), NBD LOC, 4.050%
01/01/00+.................... 6,969,000
2,300,000 Jackson (County of), Tennessee,
Industrial Development Board,
(Essette Project), Series A,
Bank of America LOC, 4.250%
08/01/00+.................... 2,300,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 17
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
TENNESSEE -- (CONTINUED)
$ 3,245,000 Shelby (County of), Tennessee,
Health Educational & Housing
Facilities Board,
Multi-family Housing Revenue,
(Flag Manor), AMT, Federal
Home Loan Bank, Indianapolis
LOC, 4.250% 01/01/23+........ $ 3,245,000
8,000,000 Tennessee (State of), Housing
Development, (Homeownership
Program), AMT, 4.000%
06/04/98..................... 8,000,000
--------------
30,964,000
--------------
TEXAS -- 3.7%
2,000,000 Angelina and Neches River
Authority, Texas, Industrial
Development Corporation,
Solid Waste Revenue, Series
1984B, Credit Suisse LOC,
3.800% 05/01/14++............ 2,000,000
3,635,000 Bexar (County of), Texas, (Army
Retirement), Series 85-B,
Rabobank Nederland LOC,
4.050% 07/01/11+............. 3,635,000
1,000,000 Brazos River, Texas, Higher
Educational Authority,
(Hoffman-Laroche), Wachovia
Bank, Georgia LOC, 3.930%
04/01/02+.................... 1,000,000
1,650,000 Dallas, Texas, Waterworks and
Sewer Systems, Refunding and
Improvement Revenue Bonds,
8.000% 10/01/97.............. 1,650,000
8,185,000 El Paso, Texas, Multi-family
Housing Finance Corporation,
(Viva Apartments Project),
AMT, General Electric Capital
Corporation Guaranteed,
4.250% 09/01/23+............... 8,185,000
3,000,000 Greater Texas Student Loan,
AMT, SLMA Collateralized,
3.700% 03/01/98#............. 3,000,000
1,100,000 Guadalupe-Blanco River
Authority, Texas, PCR,
(Central Power & Light
Company Project), ABN-AMRO
Bank LOC, 3.800%
11/01/15++................... 1,100,000
Harris (County of), Texas,
Industrial Development
Corporation, Industrial
Development Revenue, AMT:
4,000,000 (Forged Products Inc. Project),
Banc One LOC, 4.250%
05/01/03+.................... 4,000,000
4,200,000 (Zeon Chemicals Project),
Industrial Bank of Japan,
Ltd. LOC, 4.450% 02/01/09+... 4,200,000
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
TEXAS -- (CONTINUED)
$ 3,000,000 Hillsboro, Texas, Industrial
Development Corporation
Revenue, (Lamraft LP
Project), AMT, 3.950%
07/01/13+.................... $ 3,000,000
5,000,000 Houston, Texas, Tax and Revenue
Anticipation Notes, 4.500%
06/30/98..................... 5,023,315
Lone Star, Texas, Airport
Improvement Authority,
(American Airlines Inc.
Project), Royal Bank of
Canada LOC:
2,000,000 Series A1, 3.850% 12/01/14++... 2,000,000
700,000 Series A2, 3.850% 12/01/14++... 700,000
4,300,000 McAllen, Texas, Health
Facilities Development
Revenue, PNC Bank LOC, 4.150%
12/01/24+.................... 4,300,000
7,600,000 Montgomery (County of), Texas,
Industrial Development
Corporation Revenue, (Houston
Area Research Center
Project), Banque National de
Paris LOC, 4.250%
12/01/15+.................... 7,600,000
9,200,000 Port Development Corporation,
(Pasadena Marine Terminal
Company Project), ABN-AMRO
Bank LOC, 4.300% 12/01/04+... 9,200,000
1,500,000 San Antonio, Texas, Industrial
Development Revenue, (Colin
Medical Instruments
Corporation Project), AMT,
Sanwa Bank LOC, 4.400%
01/01/99+.................... 1,500,000
8,000,000 Sulphur Springs, Texas,
Industrial Development
Authority, (Hon Industrial
Inc. Project), Northern Trust
LOC, 4.250% 12/01/13+........ 8,000,000
5,000,000 Texas (State of), Tax and
Revenue Anticipation Notes,
Series A, 4.750% 08/31/98.... 5,039,657
4,300,000 Texas (State of), Water
Development Board, Series A,
Canadian Imperial Bank of
Commerce LOC, 3.900%
03/01/15++................... 4,300,000
2,800,000 West Side Calhoun (County of),
Texas, Development
Corporation Revenue, (Sohio
Chemical Company Project),
British Petroleum Guaranty,
3.900% 12/01/15++............ 2,800,000
--------------
82,232,972
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 18
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
UTAH -- 1.2%
$ 2,000,000 Murray (City of), Utah,
Industrial Revenue, (Zevex
Inc., Project), AMT, Bank One
LOC, 4.250% 10/01/16+........ $ 2,000,000
3,200,000 Murray (County of), Utah,
Industrial Development
Authority, (Hunter Douglas
Realty Property), AMT,
ABN-AMRO Bank LOC, 4.250%
09/01/14+.................... 3,200,000
14,300,000 Salt Lake (City of), Utah,
Health Care Facilities
Revenue, Class A,
Westdeutsche Landesbank SBPA
LOC, 4.100% 01/01/20+........ 14,300,000
4,500,000 Salt Lake (City of), Utah,
Industrial Development
Revenue, (SPS Technologies
Inc., Project), AMT, National
Australia Bank Ltd. LOC,
4.250% 12/01/12+............. 4,500,000
1,000,000 Salt Lake (City of), Utah, PCR,
(Service Station Holdings
Inc., Project), Series B,
British Petroleum Guaranty,
3.900% 08/01/07++............ 1,000,000
1,200,000 West Valley (City of), Utah,
Industrial Development
Revenue, (Johnson Matthey
Inc. Project), Canadian
Imperial Bank of Commerce
LOC, 3.950% 12/01/11++....... 1,200,000
--------------
26,200,000
--------------
VIRGINIA -- 0.7%
2,500,000 Colonial Heights, Virginia,
Industrial Development
Authority, (Philip Morris
Company Project), 4.250%
03/01/05+.................... 2,500,000
2,000,000 Fluvanna (County of), Virginia,
Industrial Development
Authority Revenue, (Edgcomb
Metals Company Project),
Banque National de Paris LOC,
4.050% 12/01/09+............. 2,000,000
3,900,000 Greensville (County of),
Virginia, Industrial
Development Authority, PCR,
(Perdue Farms Inc. Project),
AMT, SunTrust Bank LOC,
4.250% 10/01/06+............. 3,900,000
2,000,000 Spotsylvania (County of),
Virginia, Industrial
Development Revenue,
(Carlisle Corporation
Project), SunTrust Bank LOC,
4.150% 06/01/08+............. 2,000,000
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
VIRGINIA -- (CONTINUED)
$ 5,500,000 Virginia College Building
Authority, Educational
Facilities Revenue,
(University of Richmond
Project), Crestar Bank SBPA
LOC, 3.950% 11/01/26+........ $ 5,500,000
--------------
15,900,000
--------------
WASHINGTON -- 2.3%
2,905,000 Pierce (County of), Washington,
Housing Authority Revenue,
(Eagles Watch Project), Key
Bank LOC, 4.000% 10/01/20+... 2,905,000
7,075,000 Washington (State of), Housing
Finance Authority,
Multi-family Mortgage
Revenue, (Inglenook Court
Project), AMT, Bank of
America LOC, 4.000%
07/01/25++................... 7,075,000
Washington (State of), Public
Power Supply System, Bank of
America LOC:
14,800,000 (Nuclear Project Number 1),
Series 1A-2, 4.100%
07/01/17+.................... 14,800,000
19,320,000 (Nuclear Project Number 3),
Series 3A-1, 4.100%
07/01/18+.................... 19,320,000
7,100,000 (Nuclear Project Number 3),
Series 3A-2, 4.100%
07/01/18+.................... 7,100,000
--------------
51,200,000
--------------
WEST VIRGINIA -- 1.5%
10,000,000 Fayette (County of), West
Virginia, County Commission,
Solid Waste Disposal
Facilities Revenue,
(Georgia-Pacific Corporation
Project), AMT, Industrial
Bank of Japan Ltd. LOC,
4.400% 05/01/18+............. 10,000,000
24,100,000 West Virginia (State of),
Hospital Finance Authority,
Hospital Revenue, (St. Mary's
Hospital Project), Bank One
LOC, 4.150% 10/01/12+........ 24,100,000
--------------
34,100,000
--------------
WISCONSIN -- 2.0%
Beaver Dam, Wisconsin, Unified
School District, Tax
Anticipation Notes:
3,000,000 3.800% 10/14/97................ 3,000,183
2,000,000 3.850% 10/14/97................ 2,000,132
3,480,000 Germantown, Wisconsin, School
District, Board Anticipation
Notes, 4.250% 04/01/98....... 3,481,149
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 19
NATIONS FUNDS
Nations Tax Exempt Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
WISCONSIN -- (CONTINUED)
$ 2,250,000 Janesville, Wisconsin, School
District, Tax and Revenue
Anticipation Promissory
Notes, 4.100% 09/21/98....... $ 2,254,208
4,000,000 Menomonee Falls, Wisconsin,
Industrial Development
Authority Revenue, (Jemma LLC
Project), AMT, Bank One LOC,
4.250% 09/01/14+............. 4,000,000
1,000,000 Milwaukee, Wisconsin, GO,
Series AH, 6.100% 12/01/97... 1,004,060
5,050,000 Pleasant Prairie, Wisconsin,
Industrial Development
Authority Revenue, (Nucon
Corporation Project), AMT,
American National Bank &
Trust Company, LOC, 4.150%
02/01/22+.................... 5,050,000
5,000,000 Sheboygan, Wisconsin, Area
School District, Tax and
Revenue Anticipation
Promissory Notes, 4.100%
08/31/98..................... 5,008,750
8,200,000 West Allis, Milwaukee,
Wisconsin, School District,
Tax and Revenue Anticipation
Promissory Notes, 4.100%
09/21/98..................... 8,215,334
Wisconsin (State of), Health
Facilities Authority:
8,435,000 Daughters of Charity, 4.100%
11/01/16+.................... 8,435,000
2,900,000 Felician Health Care Inc.,
LaSalle National Bank LOC,
4.150% 01/01/19+............. 2,900,000
--------------
45,348,816
--------------
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $2,229,786,763).......... 2,229,786,763
==============
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MONEY MARKET FUNDS -- 0.0%##
50,000 AIM Tax-Exempt Fund............ $ 50,000
250,000 Federated Tax Exempt Money
Market Fund.................. 250,000
30,000 Fidelity Institutional
Tax-Exempt Cash Fund......... 30,000
--------------
TOTAL MONEY MARKET FUNDS
(Cost $330,000)................ 330,000
==============
TOTAL INVESTMENTS
(Cost $2,230,116,763*).............. 100.6% 2,230,116,763
OTHER ASSETS AND (0.6) (13,693,548)
LIABILITIES (NET)...................
----- --------------
NET ASSETS............................ 100.0% $2,216,423,215
===== ==============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Variable rate demand notes payable upon not more than seven calendar days'
notice. The interest rate shown reflects the rate in effect at September
30, 1997.
++ Variable rate demand notes payable upon not more than one calendar day's
notice. The interest rate shown reflects the rate in effect at September
30, 1997.
+++ Variable rate demand notes payable upon not more than thirty calendar days'
notice. The interest rate shown reflects the rate in effect at September
30, 1997.
# Put date.
## Amount represents less than 0.1%.
Nations Tax Exempt Fund had the following industry concentrations greater than
10% at September 30, 1997 (as a percentage of net assets):
<TABLE>
<S> <C>
Medical Facilities Revenue.............. 0.0%
Industrial Facilities Revenue........... 0.0
Pollution Control Revenue............... 0.0
Housing Revenue......................... 0.0
ABBREVIATIONS:
AMT Alternative Minimum Tax
CFC Cooperative Finance Corporation
FGIC Federal Guaranty Investment Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National Mortgage Association
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
PCR Pollution Control Revenue
SBPA Standby Bond Purchase Agreement
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 20
NATIONS FUNDS
Nations Treasury Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MATURITY VALUE
AMOUNT DATE (NOTE 1)
------------------------------------------------------------
<C> <S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 14.0%
U.S. TREASURY BILLS -- 4.0%
$ 25,000,000 Discount note#..... 10/16/97 $ 24,944,245
25,000,000 Discount note#..... 11/13/97 24,843,229
50,000,000 Discount note#..... 01/08/98 49,271,250
40,000,000 Discount note#..... 02/05/98 39,249,288
------------
138,308,012
------------
U.S. TREASURY NOTES -- 10.0%
40,000,000 5.625%#............ 10/31/97 40,001,246
55,000,000 6.125%#............ 03/31/98 55,041,001
40,000,000 5.875%#............ 04/30/98 40,053,096
15,000,000 8.250%#............ 07/15/98 15,290,116
195,000,000 6.250%#............ 07/31/98 195,854,036
------------
346,239,495
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $484,547,507).......... 484,547,507
============
REPURCHASE AGREEMENTS -- 97.9%
REPURCHASE AGREEMENTS - FIXED
RATE -- 88.1%
867,000,000 Agreement with Bankers Trust
N.Y. Corporation, 6.150%
dated 09/30/97 to be
repurchased at $867,148,113
on 10/01/97 collateralized
by $49,570,800 U.S. Treasury
Bill, due 02/05/98;
$174,993,404 U.S. Treasury
Bond, 6.375% due 08/15/20;
$660,129,942 U.S. Treasury
Notes,
5.750% -- 6.625% due
11/30/98 -- 08/15/07........ 867,000,000
173,000,000 Agreement with BZW Securities
Corporation, 6.150% dated
09/30/97 to be repurchased
at $173,029,554 on 10/01/97
collateralized by $8,689,571
U.S. Treasury Bill due
03/26/98; $167,770,785 U.S.
Treasury Notes,
5.125% -- 6.000% due
12/31/98 -- 06/30/99........ 173,000,000
489,182,000 Agreement with CS First Boston
Corporation. Interest is
payable monthly. The
agreement is terminable by
the Fund daily. The final
maturity date of the
agreement is 07/01/98
collateralized by
$53,415,570 U.S. Treasury
Strips, Principal Only, due
11/15/97 -- 02/15/26;
$452,952,701 U.S. Treasury
Strips, Interest Only, due
02/15/98 -- 05/15/24##...... 489,182,000
173,000,000 Agreement with Dresdner Bank
Inc., 6.200% dated 09/30/97
to be repurchased at
$173,029,794 on 10/01/97
collateralized by
$176,461,302 GNMA,
7.000% -- 7.500% due
10/15/26.................... 173,000,000
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENTS -- (CONTINUED)
$173,000,000 Agreement with First Union
Corporation, 6.125% dated
09/30/97 to be repurchased
at $173,029,434 on 10/01/97
collateralized by
$67,944,656 U.S. Treasury
Bills due
11/06/97 -- 03/26/98;
$105,035,758 U.S. Treasury
Notes, 6.000% -- 7.250% due
02/15/98 -- 08/31/99;
$344,589 U.S. Treasury
Strips, Interest Only, due
11/15/97.................... $ 173,000,000
173,000,000 Agreement with Goldman, Sachs
& Company, 6.350% dated
09/30/97 to be repurchased
at $173,030,515 on 10/01/97
collateralized by
$176,491,126 GNMA, 7.000%
due 05/15/27................ 173,000,000
173,000,000 Agreement with HSBC
Securities, 6.000% dated
09/30/97 to be repurchased
at $173,028,833 on 10/01/97
collateralized by
$176,462,203 U.S. Treasury
Bonds, 7.250% -- 13.250% due
08/15/13 -- 11/15/16........ 173,000,000
13,000,000 Agreement with Merrill Lynch
Securities, 6.150% dated
09/30/97 to be repurchased
at $13,002,221 on 10/01/97
collateralized by
$13,260,988 GNMA,
7.500% -- 9.000% due
11/15/21 -- 10/15/22........ 13,000,000
352,000,000 Agreement with Morgan (J.P.)
Securities Inc., 6.050%
dated 09/30/97 to be
repurchased at $352,059,156
on 10/01/97 collateralized
by $301,336 U.S. Treasury
Bond, 3.625% due 07/15/02;
$1,786,739 U.S. Treasury
Cubes, Interest Only, due
02/15/98 -- 05/15/04;
$306,981,983 U.S. Treasury
Strips, Interest Only, due
02/15/98 -- 02/15/26;
$49,970,058 U.S. Treasury
Strips, Principal Only, due
11/15/97 -- 08/15/26........ 352,000,000
25,000,000 Agreement with Morgan (J.P.)
Securities Inc., 6.500%
dated 09/30/97 to be
repurchased at $25,004,514
on 10/01/97 collateralized
by $25,500,000 GNMA, 7.000%
due 01/26/15 -- 12/25/15.... 25,000,000
94,000,000 Agreement with Morgan Stanley
Group Inc., 6.050% dated
09/30/97 to be repurchased
at $173,015,797 on 10/01/97
collateralized by
$95,977,209 U.S. Treasury
Notes, 6.125% -- 6.625% due
09/30/00 -- 06/30/01........ 94,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 21
NATIONS FUNDS
Nations Treasury Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENTS -- (CONTINUED)
$173,000,000 Agreement with Smith Barney,
Inc., 6.350% dated 09/30/97
to be repurchased at
$173,030,515 on 10/01/97
collateralized by
$27,387,306 GNMA,
6.500% -- 8.000% due
07/20/25 -- 09/15/27;
$5,920,975 U.S. Treasury
Bill due 07/23/98;
$10,208,081 U.S. Treasury
Bond, 6.625% due 02/15/27;
$105,756,106 U.S. Treasury
Notes, 5.500% -- 8.875% due
11/15/97 -- 05/15/01;
$10,390,556 U.S. Treasury
Strips, Interest Only, due
11/15/07; $13,337,750 U.S.
Treasury Strips, Principal
Only, due 11/15/21.......... $ 173,000,000
173,000,000 Agreement with UBS Securities,
Inc., 6.350% dated 09/30/97
to be repurchased at
$173,030,515 on 10/01/97
collateralized by
$176,463,717 GNMA,
5.500% -- 11.500% due
12/20/13 -- 09/20/27........ 173,000,000
--------------
3,051,182,000
==============
REPURCHASE AGREEMENTS -
TERM -- 9.7%
177,000,000 Agreement with Lehman Brothers
Inc., 5.520%, with a final
maturity date of 10/01/97.
Interest receivable as of
September 30, 1997 was
$407,100, collateralized by
$180,484,592 U.S. Treasury
Notes, 5. 125% -- 6.250% due
05/31/98 -- 06/30/98........ 177,000,000
160,000,000 Agreement with Merrill Lynch
Securities, 5.520%, with a
final maturity date of
10/01/97. Interest
receivable as of September
30, 1997 was $490,667,
collateralized by
$163,202,244 GNMA,
7.000% -- 10.500% due
04/15/98 -- 01/15/26........ 160,000,000
--------------
337,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(Cost $3,388,182,000)....... 3,388,182,000
==============
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MONEY MARKET FUNDS -- 2.6%
39,856,000 AIM Treasury Fund............. $ 39,856,000
27,293,000 Dreyfus Treasury Cash
Management Fund............. 27,293,000
24,155,000 Fidelity Institutional Cash
Portfolio................... 24,155,000
--------------
TOTAL MONEY
MARKET FUNDS
(Cost $91,304,000).......... 91,304,000
==============
TOTAL INVESTMENTS
(Cost $3,964,033,507*).............. 114.5% 3,964,033,507
OTHER ASSETS AND LIABILITIES (NET).... (14.5) (501,854,746)
----- --------------
NET ASSETS............................ 100.0% $3,462,178,761
===== ==============
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Aggregate cost for Federal tax purposes.
# Denotes security subject to repurchase under reverse
repurchase agreement as of September 30, 1997 (Note 1).
## Securities segregated as collateral for reverse
repurchase agreement.
</TABLE>
ABBREVIATION:
GNMA Government National Mortgage Association
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE> 22
NATIONS FUNDS
Nations Government Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MATURITY VALUE
AMOUNT DATE (NOTE 1)
------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 97.5%
FEDERAL FARM CREDIT
BANK -- 4.0%
$ 8,000,000 Discount note....... 10/24/97 $ 7,972,298
5,000,000 Discount note....... 01/02/98 4,930,767
------------
12,903,065
------------
FEDERAL FARM CREDIT BANK NOTE -- 2.5%
8,000,000 5.900%.............. 04/01/98 7,991,224
------------
FEDERAL HOME LOAN BANK -- 49.7%
85,000,000 Discount note....... 10/01/97 85,000,000
7,000,000 Discount note....... 10/08/97 6,992,602
3,869,000 Discount note....... 10/10/97 3,863,758
5,000,000 Discount note....... 10/14/97 4,990,304
13,000,000 Discount note....... 10/15/97 12,972,789
5,000,000 Discount note....... 10/24/97 4,982,830
4,500,000 Discount note....... 10/28/97 4,481,809
8,000,000 Discount note....... 11/07/97 7,955,353
13,000,000 Discount note....... 11/19/97 12,903,783
6,000,000 Discount note....... 12/19/97 5,928,637
3,000,000 Discount note....... 01/05/98 2,956,760
5,000,000 Discount note....... 01/15/98 4,920,500
5,000,000 Discount note....... 01/16/98 4,919,304
------------
162,868,429
------------
FEDERAL HOME LOAN BANK FLOATING RATE NOTES --
6.7%
15,000,000 5.780%+............. 10/01/97+++ 15,000,000
7,000,000 4.580%++............ 10/29/97+++ 7,000,000
------------
22,000,000
------------
FEDERAL HOME LOAN BANK NOTES -- 14.0%
8,000,000 5.625%.............. 12/26/97 8,000,000
8,000,000 5.675%.............. 02/12/98 7,994,721
6,000,000 6.010%.............. 05/15/98 6,000,047
7,000,000 5.820%.............. 06/16/98 6,998,065
7,000,000 5.900%.............. 06/19/98 6,999,899
10,000,000 5.805%.............. 08/20/98 9,997,235
------------
45,989,967
------------
<CAPTION>
PRINCIPAL MATURITY VALUE
AMOUNT DATE (NOTE 1)
------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- (CONTINUED)
STUDENT LOAN MARKETING ASSOCIATION FLOATING RATE
NOTES -- 18.2%
$ 25,000,000 5.230%+................. 10/07/97+++ $ 25,000,000
14,800,000 5.250%+................. 10/07/97+++ 14,800,000
20,000,000 5.360%+................. 10/07/97+++ 19,999,963
------------
59,799,963
------------
STUDENT LOAN MARKETING ASSOCIATION
STRUCTURED NOTE -- 2.4%
8,000,000 5.850%.................. 06/10/98 7,996,133
------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(Cost $319,548,781)..... 319,548,781
============
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------
<C> <S> <C> <C>
MONEY MARKET FUND -- 2.4%
(Cost $7,976,500)
7,976,500 Dreyfus Treasury Prime
Cash Management
Fund.................. 7,976,500
============
TOTAL INVESTMENTS (Cost
$327,525,281*)........................ 99.9% 327,525,281
OTHER ASSETS AND LIABILITIES (NET)......
0.1 172,689
----- ------------
NET ASSETS.............................. 100.0% $327,697,970
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Variable rate security. The interest rate shown reflects the rate in effect
at September 30, 1997.
++ Variable rate security. Interest rate shown is tied to the Cost of Funds
Index and resets on a delayed basis.
+++ Reset date. Interest rates reset either daily, weekly or monthly.
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE> 23
NATIONS FUNDS
Nations Prime Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
BANK OBLIGATIONS -- 10.1%
CERTIFICATES OF DEPOSIT -
DOMESTIC -- 1.6%
Bankers Trust Company of New
York:
$ 15,000,000 5.580% 10/30/97............... $ 14,994,736
35,000,000 5.910% 03/12/98............... 34,995,542
40,000,000 6.000% 03/24/98............... 39,977,247
5,000,000 5.990% 06/25/98............... 4,998,602
--------------
94,966,127
--------------
CERTIFICATE OF DEPOSIT -
EURO -- 1.1%
65,000,000 Sanwa Bank Ltd. of London,
5.920% 12/16/97............. 65,002,664
--------------
CERTIFICATES OF DEPOSIT -
YANKEE -- 7.4%
Bank of Tokyo Mitsubishi, (New
York):
50,000,000 5.920% 12/08/97............... 50,000,000
30,000,000 5.840% 01/15/98............... 30,002,413
50,000,000 5.840% 01/22/98............... 50,000,000
45,000,000 5.800% 03/02/98............... 45,000,000
25,000,000 5.790% 03/19/98............... 25,000,000
20,000,000 Deutsche Bank, (New York),
5.860% 03/10/98............... 19,996,646
National Bank of Canada, (New
York):
50,000,000 5.580% 11/10/97............... 50,000,000
20,000,000 5.850% 02/27/98............... 20,000,000
20,000,000 5.940% 03/06/98............... 20,000,000
30,000,000 6.030% 03/18/98............... 29,998,680
30,000,000 6.140% 06/05/98............... 29,995,921
40,000,000 Sanwa Bank Ltd. of New York,
5.930% 12/09/97............... 40,000,744
30,000,000 Societe Generale,
5.880% 07/22/98............... 29,990,755
--------------
439,985,159
--------------
TOTAL BANK OBLIGATIONS
(Cost $599,953,950)......... 599,953,950
==============
CORPORATE OBLIGATIONS -- 58.9%
COMMERCIAL PAPER -- 37.2%
78,000,000 Aetna Services, Inc.,
Discount note 10/01/97........ 78,000,000
AON Corporation:
30,980,000 Discount note 10/02/97........ 30,975,207
15,000,000 Discount note 10/14/97........ 14,969,937
21,443,000 Discount note 11/12/97........ 21,304,407
30,000,000 Bradford & Bingley Building
Society,
Discount note 03/10/98...... 29,256,000
Countrywide Home Loans, Inc.:
46,000,000 Discount note 10/01/97........ 46,000,000
50,000,000 Discount note 10/07/97........ 49,953,585
50,000,000 Discount note 10/27/97........ 49,799,945
38,000,000 Discount note 11/13/97........ 37,748,092
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
CORPORATE OBLIGATIONS -- (CONTINUED)
COMMERCIAL PAPER -- (CONTINUED)
Dynamic Funding Corporation:
$ 44,366,000 Discount note 10/02/97........ $ 44,359,037
20,000,000 Discount note 10/06/97........ 19,984,306
19,545,000 Discount note 10/15/97........ 19,501,751
25,000,000 Discount note 10/16/97........ 24,937,000
11,000,000 Discount note 10/21/97........ 10,965,472
30,000,000 Discount note 10/29/97........ 29,868,167
19,506,000 Discount note 11/17/97........ 19,362,116
35,000,000 Discount note 12/10/97........ 34,616,847
10,551,000 Discount note 12/15/97........ 10,426,806
Finova Capital Corporation:
25,000,000 Discount note 10/20/97........ 24,927,035
15,000,000 Discount note 10/23/97........ 14,949,308
25,000,000 Discount note 10/29/97........ 24,892,084
20,000,000 Discount note 11/03/97........ 19,898,250
15,000,000 Discount note 11/05/97........ 14,918,917
General Motors Acceptance
Corporation:
75,000,000 Discount note 10/01/97........ 75,000,000
25,000,000 Discount note 10/07/97........ 24,975,750
25,000,000 Discount note 10/14/97........ 24,947,097
30,000,000 Discount note 12/01/97........ 29,710,250
35,000,000 Discount note 03/02/98........ 34,173,922
50,000,000 General Motors Corporation,
Discount note 10/16/97........ 49,883,334
International Securitization
Corporation:
20,000,000 Discount note(a) 11/19/97..... 19,849,189
60,000,000 Discount note(a) 12/01/97..... 59,436,767
Lehman Brothers Holdings Inc.:
350,000,000 Discount note 10/01/97........ 350,000,000
21,000,000 Discount note 11/10/97........ 20,864,200
60,000,000 Discount note 11/12/97........ 59,593,999
40,000,000 Discount note 11/21/97........ 39,668,500
50,000,000 Discount note 12/03/97........ 49,496,875
30,000,000 Discount note 05/01/98........ 29,001,833
ODC Capital Corporation:
35,000,000 Discount note(b) 10/08/97..... 34,962,093
11,002,000 Discount note(b) 10/08/97..... 10,990,063
40,000,000 Discount note(b) 10/22/97..... 39,870,033
32,998,000 Discount note(b) 10/29/97..... 32,855,302
Orix America Inc.:
32,500,000 Discount note 11/04/97........ 32,328,111
20,000,000 Discount note 11/21/97........ 19,839,350
30,000,000 Discount note 01/05/98........ 29,544,000
10,500,000 Discount note 01/09/98........ 10,334,625
47,000,000 Renault Credit International,
Discount note 10/09/97...... 46,941,302
45,000,000 SAFECO Corporation,
Discount note 11/12/97...... 44,706,000
Sumitomo Corporation of
America:
25,000,000 Discount note 10/29/97........ 24,888,194
20,000,000 Discount note 11/07/97........ 19,885,506
25,000,000 Discount note 11/10/97........ 24,840,000
20,000,000 Discount note 12/10/97........ 19,780,278
75,000,000 Discount note 12/17/97........ 74,093,111
23,000,000 Discount note 12/18/97........ 22,718,940
20,000,000 Discount note 12/22/97........ 19,745,800
22,500,000 Discount note 12/29/97........ 22,185,719
37,000,000 Discount note 02/11/98........ 36,230,891
20,000,000 Discount note 03/11/98........ 19,499,111
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE> 24
NATIONS FUNDS
Nations Prime Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENT (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
CORPORATE OBLIGATIONS -- (CONTINUED)
COMMERCIAL PAPER -- (CONTINUED)
Tri-Lateral Capital (USA)
Inc.:
$ 34,270,000 Discount note(b) 10/06/97..... $ 34,243,108
10,045,000 Discount note(b) 10/15/97..... 10,023,124
20,566,000 Discount note(b) 10/24/97..... 20,492,419
15,040,000 Discount note(b) 11/18/97..... 14,927,701
--------------
2,204,140,766
--------------
CORPORATE BONDS & NOTES -- 21.7%
Bankers Trust Company of New
York:
30,000,000 5.830%+(b) 10/01/97+++........ 30,000,000
126,000,000 5.840%+(b) 10/01/97+++........ 125,996,664
40,000,000 5.840%+(b) 10/01/97+++........ 39,998,795
Bear Stearns & Company, Inc.:
60,000,000 5.840%+ 10/01/97+++........... 60,000,000
38,000,000 5.656%+ 10/01/97+++........... 38,000,000
50,000,000 5.636%+ 10/01/97+++........... 50,000,000
25,000,000 5.636%+ 10/01/97+++........... 25,000,000
20,000,000 Beta Finance Inc.,
5.800%(b) 03/03/98............ 20,000,000
30,000,000 CIT Group Holdings,
6.500% 07/13/98............... 30,116,369
Chrysler Financial
Corporation:
10,000,000 6.390% 10/03/97............... 10,000,103
14,000,000 6.210% 06/29/98............... 14,001,950
285,000,000 CS First Boston,
5.981%+ 10/07/97+++......... 285,000,000
50,000,000 General Motors Acceptance
Corporation,
5.850%+ 10/01/97+++......... 49,999,623
14,000,000 Goldman Sachs Group L.P.,
6.100% 04/15/98............. 13,991,014
International Business
Machines Credit Corporation:
50,000,000 5.880%+ 10/01/97+++........... 50,000,000
35,000,000 5.880%+ 10/01/97+++........... 35,000,000
30,000,000 5.880%+ 10/01/97+++........... 30,000,000
Lehman Brothers Holdings Inc.:
10,350,000 6.375% 06/01/98............... 10,372,857
6,000,000 6.250% 06/29/98............... 6,011,924
25,000,000 Merrill Lynch & Company Inc.,
5.820%+ 10/01/97+++......... 25,000,000
65,000,000 Morgan Guaranty Trust Company,
5.965% 06/22/98............. 64,984,278
PHH Corporation:
70,000,000 5.986% 08/12/98............... 69,991,542
50,000,000 5.770%+ 10/01/97+++........... 49,982,008
Societe Generale:
75,000,000 5.765%+ 10/01/97+++........... 74,955,316
50,000,000 5.765%+ 10/01/97+++........... 49,970,023
25,000,000 Travelers Life Insurance
Company,
5.727%+ 10/01/97+++......... 25,000,000
--------------
1,283,372,466
--------------
TOTAL CORPORATE OBLIGATIONS
(Cost $3,487,513,232)....... 3,487,513,232
==============
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
GUARANTEED INVESTMENT CONTRACTS -- 11.4%
Allstate Life Insurance
Company:
$ 25,000,000 5.835%**+ 12/29/97#........... $ 25,000,000
25,000,000 5.835%**+ 12/29/97#........... 25,000,000
Anchor National Life Insurance
Company:
25,000,000 5.882%**+ 12/29/97#........... 25,000,000
50,000,000 5.980%+ 10/01/97+++........... 50,000,000
Commonwealth Life Insurance
Company, Inc.:
62,000,000 5.850%**+ 03/27/98#........... 62,000,000
10,000,000 5.850%**+ 03/27/98#........... 10,000,000
General American Life
Insurance Company:
50,000,000 5.830%+ 10/01/97+++........... 50,000,000
50,000,000 5.830%**+ 10/07/97#........... 50,000,000
60,000,000 Life Insurance Company of
Georgia,
5.817%**+ 03/27/98#......... 60,000,000
Life Insurance Company of
Virginia:
50,000,000 5.626%**+ 10/07/97#........... 50,000,000
25,000,000 5.650%**+ 10/07/97#........... 25,000,000
25,000,000 5.650%**+ 10/07/97#........... 25,000,000
100,000,000 New York Life Insurance
Company,
5.864%**+ 10/06/97+++....... 100,000,000
Peoples Security Life
Insurance Company,
20,000,000 5.850%**+ 12/04/97+++......... 20,000,000
20,000,000 5.910%**+ 03/27/98#........... 20,000,000
50,000,000 Sun Life Insurance Company of
America,
5.942%**+ 03/27/98#......... 50,000,000
25,000,000 Travelers Life Insurance
Company,
5.736%**+ 11/01/97+++....... 25,000,000
--------------
TOTAL GUARANTEED INVESTMENT
CONTRACTS
(Cost $672,000,000)......... 672,000,000
==============
MUNICIPAL BONDS -- 3.0%
28,800,000 Illinois (State of), Student
Assistance Commission, First
National Bank of Chicago
LOC,
5.610%+ 10/01/97+++......... 28,800,000
24,800,000 Indiana (State of), Financing
Authority, Economic
Development Revenue,
Qualitech Steel, National
City Bank, Indiana LOC,
5.590%+ 10/01/97+++......... 24,800,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE> 25
NATIONS FUNDS
Nations Prime Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENT (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS -- (CONTINUED)
$ 22,600,000 Missouri (State of), Economic
Development Revenue, Export
and Infrastructure Board,
(Biocraft Laboratories Inc.
Project), PNC Bank LOC,
5.650%+ 10/01/97+++......... $ 22,600,000
100,000,000 Virginia (State of), Housing
Development Authority,
5.400%+ 10/01/97+++......... 100,000,000
--------------
TOTAL MUNICIPAL BONDS
(Cost $176,200,000)......... 176,200,000
==============
U.S. GOVERNMENT OBLIGATIONS -- 4.3%
18,000,000 Federal Home Loan Bank,
4.687%++ 10/29/97+++........ 18,000,000
Student Loan Marketing
Association Floating Rate
Notes:
20,000,000 5.230%+ 10/07/97+++........... 20,000,000
12,000,000 5.250%+ 10/07/97+++........... 12,000,000
11,600,000 5.250%+ 10/07/97+++........... 11,580,519
47,500,000 5.270%+ 10/07/97+++........... 47,407,359
21,000,000 5.270%+ 10/07/97+++........... 20,999,209
76,697,000 5.360%+ 10/07/97+++........... 76,697,000
40,700,000 5.410%+ 10/07/97+++........... 40,708,797
10,000,000 5.410%+ 10/07/97+++........... 10,000,000
--------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS
(Cost $257,392,884)......... 257,392,884
==============
TIME DEPOSITS -- EURO -- 6.8%
275,000,000 First National Bank of
Chicago,
6.500% 10/01/97............. 275,000,000
125,000,000 Societe Generale,
6.563% 10/01/97............. 125,000,000
--------------
TOTAL TIME
DEPOSITS - EURO
(Cost $400,000,000)......... 400,000,000
==============
REPURCHASE AGREEMENTS -- 5.1%
225,000,000 Agreement with Goldman Sachs
Group, 6.563% dated 09/30/97
to be repurchased at
$225,041,016 on 10/01/97,
collateralized by
$230,834,820 Qualified First
Tier Money Market
Instruments, due
10/10/97 -- 02/05/98........ 225,000,000
75,000,000 Agreement with Lehman
Brothers, 6.563% dated
09/30/97 to be repurchased
at $75,013,672 on 10/01/97,
collateralized by
$76,504,000 Qualified First
Tier Money Market
Instruments, due
09/30/97 -- 11/28/97........ 75,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(Cost $300,000,000)......... 300,000,000
==============
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
MONEY MARKET FUNDS -- 0.1%
6,746,000 AIM Liquid Asset Portfolio.... $ 6,746,000
459,000 AIM Prime Fund................ 459,000
1,298,000 Dreyfus Cash Management Plus
Fund........................ 1,298,000
39,000 Fidelity Institutional Cash
Portfolio................... 39,000
--------------
TOTAL MONEY MARKET FUNDS
(Cost $8,542,000)........... 8,542,000
==============
TOTAL INVESTMENTS
(Cost $5,901,602,066*).............. 99.7% 5,901,602,066
OTHER ASSETS AND LIABILITIES (NET).... 0.3 15,553,477
--------------
NET ASSETS............................ 100.0% $5,917,155,543
==============
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Aggregate cost for Federal tax purposes.
** Restricted security (Note 5).
+ Floating/variable rate note. The interest rate shown
reflects the rate in effect at September 30, 1997.
++ Variable rate security. The interest rate shown is tied
to the Cost of Funds Index and resets on a delayed
basis.
+++ Reset date. Interest rates reset either daily, weekly,
monthly, quarterly or semi-annually.
# Security subject to a demand feature which allows the
Fund to put the security back to the issuer from 7 to
180 calendar days.
(a) Securities are not registered under the Securities Act
of 1933. These securities may be resold in in
transactions exempt from registration to qualified
institutional buyers.
(b) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold
in transactions exempt from registration to qualified
institutional buyers.
</TABLE>
ABBREVIATION:
LOC Letter of Credit
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE> 26
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NATIONS
NATIONS NATIONS GOVERNMENT NATIONS
TAX EXEMPT TREASURY MONEY MARKET PRIME
FUND FUND FUND FUND
---------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (Note 1),
See accompanying schedules:
Securities................................. $2,230,116,763 $1,065,033,507 $327,525,281 $5,901,302,066
Repurchase agreements...................... -- 2,899,000,000 -- 300,000
-------------- -------------- ------------ --------------
Total investments....................... 2,230,116,763 3,964,033,507 327,525,281 5,901,602,066
Cash......................................... 79,348 37 878 987
Interest receivable.......................... 10,940,265 5,553,052 1,733,151 32,479,856
Dividends receivable......................... 2,049 266,159 40,254 576,599
Receivable for Fund shares sold.............. 614,697 -- 25,673 16,708,508
Prepaid expenses and other assets............ 130,864 232,077 54,925 383,143
-------------- -------------- ------------ --------------
Total Assets............................... 2,241,883,986 3,970,084,832 329,380,162 5,951,751,159
-------------- -------------- ------------ --------------
LIABILITIES:
Payable for reverse repurchase
agreements (Note 1)........................ -- 489,182,000 -- --
Payable for Fund shares redeemed............. 3,490,584 9,424,481 367,080 14,671,245
Payable for investment securities
purchased.................................. 15,478,292 -- -- --
Note payable (Note 6)........................ 500,000 -- -- --
Investment advisory fee payable (Note 2)..... 343,782 634,017 38,333 1,030,318
Administration fee payable (Note 2).......... 147,388 240,455 22,039 389,874
Shareholder servicing and distribution fees
payable (Note 3)........................... 87,273 657,620 22,495 538,230
Transfer agent fees payable (Note 2)......... 98,014 24,657 -- 75,168
Custodian fees payable (Note 2).............. 53,826 77,759 11,033 118,597
Dividends payable............................ 5,093,718 7,432,680 1,169,987 17,303,254
Accrued Trustees'/Directors' fees and
expenses (Note 2).......................... 101,651 148,573 28,928 226,532
Accrued expenses and other payables.......... 66,243 83,829 22,297 242,398
-------------- -------------- ------------ --------------
Total Liabilities.......................... 25,460,771 507,906,071 1,682,192 34,595,616
-------------- -------------- ------------ --------------
NET ASSETS................................... $2,216,423,215 $3,462,178,761 $327,697,970 $5,917,155,543
============== ============== ============ ==============
Investments, at cost......................... $2,230,116,763 $3,964,033,507 $327,525,281 $5,901,602,066
============== ============== ============ ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE> 27
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) SEPTEMBER 30,
1997 (UNAUDITED)
<TABLE>
<CAPTION>
NATIONS
NATIONS NATIONS GOVERNMENT NATIONS
TAX EXEMPT TREASURY MONEY MARKET PRIME
FUND FUND FUND FUND
---------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSETS CONSIST OF:
Undistributed net investment income..... $ 5,737 $ 10,103 $ 13,156 $ --
Accumulated net realized loss on
investments sold...................... (69,830) (38,754) (61,569) (488,645)
Paid-in capital......................... 2,216,487,308 3,462,207,412 327,746,383 5,917,644,188
-------------- -------------- ------------ --------------
$2,216,423,215 $3,462,178,761 $327,697,970 $5,917,155,543
============== ============== ============ ==============
NET ASSETS:
Primary A Shares........................ $1,762,398,431 $1,119,754,681 $244,546,765 $3,655,757,915
============== ============== ============ ==============
Primary B Shares........................ $ 11,016,570 $ 33,180,075 $ 19,079,519 $ 67,278,508
============== ============== ============ ==============
Investor A Shares....................... $ 157,667,061 $1,464,925,799 $ 26,370,407 $1,364,334,703
============== ============== ============ ==============
Investor B Shares....................... $ 210,820,924 $ 666,811,652 $ 27,058,079 $ 643,085,935
============== ============== ============ ==============
Investor C Shares....................... $ 63,751,107 $ 7,795,637 $ 3,859,082 $ 81,886,948
============== ============== ============ ==============
Daily Shares............................ $ 10,769,122 $ 169,710,917 $ 6,784,118 $ 104,811,534
============== ============== ============ ==============
SHARES OUTSTANDING:
Primary A Shares........................ 1,762,657,659 1,119,822,255 244,585,098 3,656,416,695
============== ============== ============ ==============
Primary B Shares........................ 11,018,190 33,182,078 19,082,510 67,290,633
============== ============== ============ ==============
Investor A Shares....................... 157,690,252 1,465,014,205 26,374,541 1,364,580,561
============== ============== ============ ==============
Investor B Shares....................... 210,851,934 666,851,893 27,062,320 643,201,822
============== ============== ============ ==============
Investor C Shares....................... 63,760,484 7,796,107 3,859,687 81,901,704
============== ============== ============ ==============
Daily Shares............................ 10,770,706 169,721,159 6,785,181 104,830,422
============== ============== ============ ==============
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share....................... $1.00 $1.00 $1.00 $1.00
===== ===== ===== =====
PRIMARY B SHARES:
Net asset value, offering and redemption
price per share....................... $1.00 $1.00 $1.00 $1.00
===== ===== ===== =====
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share....................... $1.00 $1.00 $1.00 $1.00
===== ===== ===== =====
INVESTOR B SHARES:
Net asset value, offering and redemption
price per share....................... $1.00 $1.00 $1.00 $1.00
===== ===== ===== =====
INVESTOR C SHARES:
Net asset value, offering and redemption
price per share....................... $1.00 $1.00 $1.00 $1.00
===== ===== ===== =====
DAILY SHARES:
Net asset value, offering and redemption
price per share....................... $1.00 $1.00 $1.00 $1.00
===== ===== ===== =====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE> 28
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NATIONS
NATIONS NATIONS GOVERNMENT NATIONS
TAX EXEMPT TREASURY MONEY MARKET PRIME
FUND FUND FUND FUND
--------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest........................................... $38,124,891 $97,203,076 $9,482,967 $154,745,709
Dividends.......................................... 297,723 2,499,309 210,950 1,838,137
----------- ----------- ---------- ------------
Total investment income.......................... 38,422,614 99,702,385 9,693,917 156,583,846
----------- ----------- ---------- ------------
EXPENSES:
Investment advisory fee (Note 2)................... 4,030,050 3,604,852 701,402 5,483,748
Administration fee (Note 2)........................ 1,007,512 1,789,999 175,350 2,727,965
Transfer agent fees (Note 2)....................... 186,893 316,912 30,512 432,660
Custodian fees (Note 2)............................ 54,414 114,832 21,871 143,720
Legal and audit fees............................... 71,517 124,273 18,498 189,514
Trustees'/Directors' fees and expenses (Note 2).... 28,938 30,591 6,166 49,299
Interest expense (Note 6).......................... 1,109 -- -- --
Other.............................................. 183,831 190,042 61,303 366,199
----------- ----------- ---------- ------------
Subtotal......................................... 5,564,264 6,171,501 1,015,102 9,393,105
Shareholder servicing and distribution fees (Note
3):
Primary B Shares................................. 15,025 45,962 28,002 110,572
Investor A Shares................................ 185,276 1,758,879 38,723 2,175,409
Investor B Shares................................ 207,968 1,043,867 38,751 678,089
Investor C Shares................................ 58,961 12,910 3,159 111,605
Daily Shares..................................... 41,767 323,711 19,095 171,485
Fees waived by investment adviser and
administrator (Note 2)........................... (2,542,629) (800,844) (484,658) (1,224,187)
----------- ----------- ---------- ------------
Total expenses................................... 3,530,632 8,555,986 658,174 11,416,078
Fees reduced by credits allowed by the
custodian (Note 2)............................... -- -- (4,549) --
----------- ----------- ---------- ------------
Net expenses..................................... 3,530,632 8,555,986 653,625 11,416,078
----------- ----------- ---------- ------------
NET INVESTMENT INCOME.............................. 34,891,982 91,146,399 9,040,292 145,167,768
----------- ----------- ---------- ------------
NET REALIZED GAIN/(LOSS) ON INVESTMENTS (NOTE 1)... 583 -- -- (18,849)
----------- ----------- ---------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS....................................... $34,892,565 $91,146,399 $9,040,292 $145,148,919
=========== =========== ========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE> 29
NATIONS FUNDS
Nations Treasury Fund
- --------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
Cash flows from operating and investing activities:
Investment income received........................................ $ 93,391,839
Payment of operating expenses..................................... (8,111,789)
Net purchases and sales of short-term investments................. (349,812,786)
----------------
Cash used by operating and investing activities..................... $(264,532,736)
Cash flows from financing activities:
Proceeds from shares sold......................................... 10,395,026,334
Payment for shares redeemed....................................... (10,066,135,961)
Cash provided from reverse repurchase agreement................... 17,261,000
Distributions paid*............................................... (81,618,950)
----------------
Cash provided by financing activities............................... 264,532,423
-------------
Increase in cash.................................................... (313)
Cash at beginning of period......................................... 350
-------------
Cash at end of period............................................... $ 37
=============
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATIONS TO CASH
USED BY OPERATING AND INVESTING ACTIVITIES:
Net increase in net assets resulting from operations................ $ 91,146,399
Increase in investments........................................... $ (354,882,985)
Increase in interest and dividends receivable..................... (1,240,347)
Increase in other assets.......................................... (172,495)
Increase in accrued expenses...................................... 616,692 (355,679,135)
---------------- -------------
Cash used by operating and investing activities..................... $(264,532,736)
=============
</TABLE>
- ---------------
* Non-cash activities include reinvestment of dividends of $10,654,282.
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE> 30
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NATIONS
NATIONS NATIONS GOVERNMENT NATIONS
TAX EXEMPT TREASURY MONEY MARKET PRIME
FUND FUND FUND FUND
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income........................ $ 34,891,982 $ 91,146,399 $ 9,040,292 $ 145,167,768
Net realized gain/(loss) on investments...... 583 -- -- (18,849)
-------------- -------------- ------------ --------------
Net increase in net assets resulting from
operations................................. 34,892,565 91,146,399 9,040,292 145,148,919
Distributions to shareholders from net
investment income:
Primary A Shares........................... (27,521,833) (41,161,882) (6,929,684) (93,041,065)
Primary B Shares........................... (198,329) (921,830) (557,643) (2,297,701)
Investor A Shares.......................... (2,426,617) (24,760,243) (538,033) (31,698,038)
Investor B Shares.......................... (3,374,501) (20,947,455) (771,577) (14,109,583)
Investor C Shares.......................... (1,122,194) (259,061) (62,884) (2,320,594)
Daily Shares............................... (248,508) (3,095,928) (180,471) (1,700,787)
Net increase/(decrease) in net assets from
Fund share transactions:
Primary A Shares........................... 578,036,696 (225,980,051) (54,850,317) 1,121,872,683
Primary B Shares........................... (2,132,967) (21,987,579) (370,565) (116,749,688)
Investor A Shares.......................... 12,347,067 745,819,027 7,654,582 206,735,451
Investor B Shares.......................... (17,757,844) (306,440,320) (691,092) 262,146,617
Investor C Shares.......................... 996,616 (6,071,841) 1,717,499 (11,786,579)
Daily Shares............................... 8,436,449 153,397,777 (1,075,847) 95,819,589
-------------- -------------- ------------ --------------
Net increase/(decrease) in net assets........ 579,926,600 338,737,013 (47,615,740) 1,558,019,224
NET ASSETS:
Beginning of period.......................... 1,636,496,615 3,123,441,748 375,313,710 4,359,136,319
-------------- -------------- ------------ --------------
End of period................................ $2,216,423,215 $3,462,178,761 $327,697,970 $5,917,155,543
============== ============== ============ ==============
Undistributed net investment income at end of
period..................................... $ 5,737 $ 10,103 $ 13,157 $ --
============== ============== ============ ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE> 31
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS
NATIONS NATIONS GOVERNMENT NATIONS
TAX EXEMPT TREASURY MONEY MARKET PRIME
FUND FUND FUND FUND
----------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income....................... $ 47,090,130 $ 123,088,385 $ 20,882,615 $ 211,915,430
Net realized gain/(loss) on investments..... (1,480) 18,200 1,339 2,522
-------------- -------------- ------------- --------------
Net increase in net assets resulting from
operations................................ 47,088,650 123,106,585 20,883,954 211,917,952
Distributions to shareholders from net
investment income:
Primary A Shares.......................... (35,293,502) (42,850,726) (16,005,498) (127,428,642)
Primary B Shares.......................... (380,490) (3,347,375) (1,068,560) (9,968,081)
Investor A Shares......................... (4,059,182) (7,715,087) (1,292,731) (53,311,689)
Investor B Shares......................... (5,532,546) (68,532,266) (2,383,399) (17,025,636)
Investor C Shares......................... (1,820,710) (611,667) (98,717) (4,133,462)
Daily Shares.............................. (3,700) (31,264) (33,710) (47,920)
Net increase/(decrease) in net assets from
Fund share transactions:
Primary A Shares.......................... 105,546,666 524,546,725 (37,373,510) 61,206,993
Primary B Shares.......................... 3,780,463 7,681,748 (12,131,029) 87,724,370
Investor A Shares......................... 16,923,712 629,610,623 (30,027,577) 58,232,248
Investor B Shares......................... 95,689,951 (551,757,395) (34,870,084) 22,368,779
Investor C Shares......................... (3,982,155) 5,084,728 411,437 18,857,687
Daily Shares.............................. 2,332,190 16,321,269 7,858,911 8,970,359
-------------- -------------- ------------- --------------
Net increase/(decrease) in net assets....... 220,289,347 631,505,898 (106,130,513) 257,362,958
NET ASSETS:
Beginning of year........................... 1,416,207,268 2,491,935,850 481,444,223 4,101,773,361
-------------- -------------- ------------- --------------
End of year................................. $1,636,496,615 $3,123,441,748 $ 375,313,710 $4,359,136,319
============== ============== ============= ==============
Undistributed net investment income at end
of year................................... $ 5,737 $ 10,103 $ 13,157 $ --
============== ============== ============= ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE> 32
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
NATIONS TAX EXEMPT FUND NATIONS TREASURY FUND
SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, 1997 YEAR ENDED SEPTEMBER 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997 (UNAUDITED) MARCH 31, 1997
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold.............................................. $ 785,203,214 $1,392,743,346 $ 1,075,931,969 $2,911,565,540
Issued in exchange for Pilot Shares of Pilot:
Short-Term U.S. Treasury Fund (Note 8).......... -- -- 1,227,411,213 --
Short-Term Tax Exempt Diversified Fund (Note
8)............................................ 374,161,516 -- -- --
Missouri Short-Term Tax-Exempt Fund (Note 8).... 194,372,509 -- -- --
Issued as reinvestment of dividends............... 247,910 754,137 284,113 256,531
Redeemed.......................................... (775,948,453) (1,287,950,817) (2,529,607,346) (2,387,275,346)
-------------- -------------- ---------------- --------------
Net increase/(decrease)........................... $ 578,036,696 $ 105,546,666 $ (225,980,051) $ 524,546,725
============== ============== ================ ==============
PRIMARY B SHARES:
Sold.............................................. $ 21,002,043 $ 83,563,210 $ 78,888,960 $ 425,279,678
Issued as reinvestment of dividends............... -- -- 15,362 504
Redeemed.......................................... (23,135,010) (79,782,747) (100,891,901) (417,598,435)
-------------- -------------- ---------------- --------------
Net increase/(decrease)........................... $ (2,132,967) $ 3,780,463 $ (21,987,579) $ 7,681,747
============== ============== ================ ==============
INVESTOR A SHARES:
Sold.............................................. $ 251,801,387 $ 430,531,574 $ 2,322,660,825 $1,502,010,404
Issued as reinvestment of dividends............... 1,990,707 3,977,272 1,902,388 4,949,120
Redeemed.......................................... (241,445,027) (417,585,134) (1,578,744,186) (877,348,901)
-------------- -------------- ---------------- --------------
Net increase...................................... $ 12,347,067 $ 16,923,712 $ 745,819,027 $ 629,610,623
============== ============== ================ ==============
INVESTOR B SHARES:
Sold.............................................. $ 279,555,791 $ 625,042,344 $ 4,422,564,023 $8,327,962,057
Issued in exchange for Administration Shares of
Pilot:
Short-Term U.S. Treasury Fund (Note 8).......... -- -- 237,369,259 --
Short-Term Tax Exempt Diversified Fund (Note
8)............................................ 10,607,606 -- -- --
Missouri Short-Term Tax-Exempt Fund (Note 8).... 11,951,035 -- -- --
Issued as reinvestment of dividends............... 3,538,206 5,290,829 5,342,893 4,638,191
Redeemed.......................................... (323,410,482) (534,643,222) (4,971,716,495) (8,884,357,643)
-------------- -------------- ---------------- --------------
Net increase/(decrease)........................... $ (17,757,844) $ 95,689,951 $ (306,440,320) $ (551,757,395)
============== ============== ================ ==============
INVESTOR C SHARES:
Sold.............................................. $ 106,573,284 $ 166,459,636 $ 10,279,158 $ 31,620,194
Issued as reinvestment of dividends............... 931,431 1,807,813 200,488 608,852
Redeemed.......................................... (106,508,099) (172,249,604) (16,551,487) (27,144,318)
-------------- -------------- ---------------- --------------
Net increase/(decrease)........................... $ 996,616 $ (3,982,155) $ (6,071,841) $ 5,084,728
============== ============== ================ ==============
DAILY SHARES:
Sold.............................................. $ 98,996,843 $ 4,211,534 $ 864,386,887 $ 35,051,951
Issued in exchange for Investor Shares of Pilot:
Short-Term U.S. Treasury Fund (Note 8).......... -- -- 155,097,504 --
Short-Term Tax Exempt Diversified Fund (Note
8)............................................ 7,245,914 -- -- --
Missouri Short-Term Tax-Exempt Fund (Note 8).... 20,660,647 -- -- --
Issued as reinvestment of dividends............... 200,407 3,295 2,909,038 31,264
Redeemed.......................................... (118,667,362) (1,882,639) (868,995,652) (18,761,946)
-------------- -------------- ---------------- --------------
Net increase...................................... $ 8,436,449 $ 2,332,190 $ 153,397,777 $ 16,321,269
============== ============== ================ ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE> 33
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
Since the Funds have sold, issued as reinvestment of dividends and redeemed
shares only at a constant net asset value of $1.00 per share, the number of
shares represented by such sales, reinvestments and redemptions is the same as
the amounts shown below for such transactions.
<TABLE>
<CAPTION>
NATIONS GOVERNMENT
MONEY MARKET FUND NATIONS PRIME FUND
SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, 1997 YEAR ENDED SEPTEMBER 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997 (UNAUDITED) MARCH 31, 1997
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................... $ 191,390,126 $ 507,240,424 $ 1,831,759,578 $2,571,907,088
Issued in exchange for Primary A Shares of
Peachtree:
Prime Money Market Fund.......................... -- -- -- 46,492,996
Government Money Market Fund..................... -- 31,480,400 -- --
Issued in exchange for Pilot Shares of Pilot
Short-Term Diversified Assets Fund (Note 8)...... -- -- 1,540,113,669 --
Issued as reinvestment of dividends................ -- 3,017 805,447 852,265
Redeemed........................................... (246,240,443) (576,097,351) (2,250,806,011) (2,558,045,356)
-------------- -------------- ---------------- --------------
Net increase/(decrease)............................ $ (54,850,317) $ (37,373,510) $ 1,121,872,683 $ 61,206,993
============== ============== ================ ==============
PRIMARY B SHARES:
Sold............................................... $ 108,850,905 $ 171,213,079 $ 211,485,793 $1,407,226,085
Issued as reinvestment of dividends................ -- -- 36,443 28,061
Redeemed........................................... (109,221,470) (183,344,108) (328,271,924) (1,319,529,776)
-------------- -------------- ---------------- --------------
Net increase/(decrease)............................ $ (370,565) $ (12,131,029) $ (116,749,688) $ 87,724,370
============== ============== ================ ==============
INVESTOR A SHARES:
Sold............................................... $ 41,597,376 $ 87,140,427 $ 2,102,049,443 $3,809,109,741
Issued as reinvestment of dividends................ 528,147 1,257,952 25,512,354 51,501,048
Redeemed........................................... (34,470,941) (118,425,956) (1,920,826,346) (3,802,378,541)
-------------- -------------- ---------------- --------------
Net increase/(decrease)............................ $ 7,654,582 $ (30,027,577) $ 206,735,451 $ 58,232,248
============== ============== ================ ==============
INVESTOR B SHARES:
Sold............................................... $ 77,798,637 $ 259,954,369 $ 1,713,763,726 $1,472,078,943
Issued in exchange for Administration Shares of
Pilot Short-Term Diversified Assets Fund (Note
8)............................................... -- -- 239,088,854 --
Issued as reinvestment of dividends................ 661,441 1,641,684 12,240,351 13,460,877
Redeemed........................................... (79,151,170) (296,466,137) (1,702,946,314) (1,463,171,041)
-------------- -------------- ---------------- --------------
Net increase/(decrease)............................ $ (691,092) $ (34,870,084) $ 262,146,617 $ 22,368,779
============== ============== ================ ==============
INVESTOR C SHARES:
Sold............................................... $ 3,145,395 $ 6,143,189 $ 119,738,465 $ 244,058,874
Issued as reinvestment of dividends................ 55,336 97,541 2,255,292 4,008,416
Redeemed........................................... (1,483,232) (5,829,293) (133,780,336) (229,209,603)
-------------- -------------- ---------------- --------------
Net increase/(decrease)............................ $ 1,717,499 $ 411,437 $ (11,786,579) $ 18,857,687
============== ============== ================ ==============
DAILY SHARES:
Sold............................................... $ 75,507,184 $ 14,994,192 $ 267,254,835 $ 12,949,550
Issued in exchange for Investor Shares of Pilot
Short-Term Diversified Assets Fund (Note 8)...... -- -- 75,970,660 --
Issued as reinvestment of dividends................ 172,307 22,229 1,664,936 47,920
Redeemed........................................... (76,755,338) (7,157,510) (249,070,842) (4,027,111)
-------------- -------------- ---------------- --------------
Net increase/(decrease)............................ $ (1,075,847) $ 7,858,911 $ 95,819,589 $ 8,970,359
============== ============== ================ ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE> 34
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS TOTAL
VALUE NET FROM NET DIVIDENDS
BEGINNING INVESTMENT INVESTMENT AND
OF PERIOD INCOME INCOME DISTRIBUTIONS
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NATIONS TAX EXEMPT FUND
PRIMARY A SHARES
Six months ended 09/30/1997 (unaudited)................. $ 1.00 $ 0.0177 $(0.0177) $ (0.0177)
Year ended 03/31/1997................................... 1.00 0.0324 (0.0324) (0.0324)
Period ended 03/31/1996(a).............................. 1.00 0.0112 (0.0112) (0.0112)
Year ended 11/30/1995................................... 1.00 0.0361 (0.0361) (0.0361)
Year ended 11/30/1994................................... 1.00 0.0257 (0.0257) (0.0257)
Year ended 11/30/1993................................... 1.00 0.0223 (0.0223) (0.0223)
Year ended 11/30/1992................................... 1.00 0.0267 (0.0267) (0.0267)
Year ended 11/30/1991................................... 1.00 0.0422 (0.0422) (0.0422)
Year ended 11/30/1990................................... 1.00 0.0550 (0.0550) (0.0550)
Year ended 11/30/1989................................... 1.00 0.0600 (0.0600) (0.0600)
Period ended 11/30/1988*................................ 1.00 0.0350 (0.0350) (0.0350)
PRIMARY B SHARES
Six months ended 09/30/1997 (unaudited)................. $ 1.00 $ 0.0165 $(0.0165) $ (0.0165)
Year ended 03/31/1997................................... 1.00 0.0300 (0.0300) (0.0300)
Period ended 03/31/1996(a).............................. 1.00 0.0104 (0.0104) (0.0104)
Year ended 11/30/1995................................... 1.00 0.0335 (0.0335) (0.0335)
Period ended 11/30/1994*................................ 1.00 0.0116 (0.0116) (0.0116)
INVESTOR A SHARES
Six months ended 09/30/1997 (unaudited)................. $ 1.00 $ 0.0165 $(0.0165) $ (0.0165)
Year ended 03/31/1997................................... 1.00 0.0300 (0.0300) (0.0300)
Period ended 03/31/1996(a).............................. 1.00 0.0104 (0.0104) (0.0104)
Year ended 11/30/1995................................... 1.00 0.0335 (0.0335) (0.0335)
Year ended 11/30/1994................................... 1.00 0.0231 (0.0231) (0.0231)
Year ended 11/30/1993................................... 1.00 0.0198 (0.0198) (0.0198)
Year ended 11/30/1992................................... 1.00 0.0266 (0.0266) (0.0266)
Period ended 11/30/1991*................................ 1.00 0.0422 (0.0422) (0.0422)
INVESTOR B SHARES
Six months ended 09/30/1997 (unaudited)................. $ 1.00 $ 0.0167 $(0.0167) $ (0.0167)
Year ended 03/31/1997................................... 1.00 0.0307 (0.0307) (0.0307)
Period ended 03/31/1996(a).............................. 1.00 0.0106 (0.0106) (0.0106)
Year ended 11/30/1995................................... 1.00 0.0342 (0.0342) (0.0342)
Period ended 11/30/1994*................................ 1.00 0.0141 (0.0141) (0.0141)
INVESTOR C SHARES
Six months ended 09/30/1997 (unaudited)................. $ 1.00 $ 0.0168 $(0.0168) $ (0.0168)
Year ended 03/31/1997................................... 1.00 0.0311 (0.0311) (0.0311)
Period ended 03/31/1996(a).............................. 1.00 0.0107 (0.0107) (0.0107)
Year ended 11/30/1995................................... 1.00 0.0346 (0.0346) (0.0346)
Period ended 11/30/1994*................................ 1.00 0.0203 (0.0203) (0.0203)
DAILY SHARES
Six months ended 09/30/1997 (unaudited)................. $ 1.00 $ 0.0152 $(0.0152) $ (0.0152)
Year ended 03/31/1997................................... 1.00 0.0270 (0.0270) (0.0270)
Period ended 03/31/1996(a).............................. 1.00 0.0090 (0.0090) (0.0090)
Period ended 11/30/1995*................................ 1.00 0.0243 (0.0243) (0.0243)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Nations Tax Exempt Fund's Primary A, Primary B, Investor A, Investor B, Investor C and Daily Shares commenced operations on
March 14, 1988, June 16, 1994, April 5, 1991, May 17, 1994, March 7, 1994 and February 10, 1995, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and does not reflect the deduction of any applicable
sales charges.
+++ Unaudited.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was November 30.
(b) The effect of interest expense on the operating expense ratio was less than 0.01%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE> 35
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
------------------------------
RATIO OF RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING
VALUE END OF EXPENSES TO INCOME TO EXPENSES TO NET INVESTMENT
END OF TOTAL PERIOD AVERAGE NET AVERAGE NET AVERAGE NET INCOME
PERIOD RETURN++ (IN 000'S) ASSETS ASSETS ASSETS PER SHARE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$1.00 1.78% $1,762,398 0.30%+(b) 3.51%+ 0.55%+ $ 0.0164
1.00 3.29 1,184,313 0.30 3.25 0.55 0.0298
1.00 1.12 1,078,764 0.30+ 3.35+ 0.58+ 0.0103
1.00 3.68 905,125 0.30 3.62 0.57 0.0335
1.00 2.60 820,677 0.27 2.59 0.59 0.0226
1.00 2.27 701,403 0.23 2.23 0.59 0.0187
1.00 2.70+++ 329,265 0.40 2.65 0.57 0.0250
1.00 4.31+++ 168,829 0.42 4.23 0.60 0.0404
1.00 5.63+++ 173,834 0.40 5.51 0.75 0.0515
1.00 6.17+++ 145,109 0.40 6.00 0.74 0.0566
1.00 3.55+++ 143,245 0.40+ 4.97+ 0.75+ 0.0325
$1.00 1.65% $ 11,017 0.55%+(b) 3.26%+ 0.80%+ $ 0.0157
1.00 3.04 13,151 0.55 3.00 0.80 0.0274
1.00 1.04 9,370 0.55+ 3.10+ 0.83+ 0.0095
1.00 3.39 11,666 0.55 3.37 0.82 0.0309
1.00 1.17 18,207 0.52+ 2.34+ 0.84+ 0.0102
$1.00 1.65% $ 157,667 0.55%+(b) 3.26%+ 0.80%+ $ 0.0152
1.00 3.04 145,337 0.55 3.00 0.80 0.0274
1.00 1.04 128,414 0.55+ 3.10+ 0.83+ 0.0095
1.00 3.40 126,207 0.55 3.37 0.82 0.0309
1.00 2.36 151,714 0.52 2.34 0.84 0.0199
1.00 2.00 119,552 0.48 1.98 0.84 0.0162
1.00 2.68+++ 80,158 0.55 2.50 0.72 0.0248
1.00 4.30+++ 1,690 0.42+ 4.23+ 0.60+ 0.0404
$1.00 1.68% $ 210,821 0.50%+(b) 3.31%+ 0.75%+ $ 0.0155
1.00 3.11 228,601 0.50 3.05 0.75 0.0281
1.00 1.06 132,914 0.50+ 3.15+ 0.78+ 0.0097
1.00 3.47 86,374 0.50 3.42 0.77 0.0316
1.00 1.43 3 0.47+ 2.39+ 0.79+ 0.0118
$1.00 1.69% $ 63,751 0.48%+(b) 3.34%+ 0.73%+ $ 0.0153
1.00 3.15 62,761 0.45 3.10 0.70 0.0285
1.00 1.07 66,743 0.45+ 3.20+ 0.73+ 0.0098
1.00 3.52 41,409 0.45 3.47 0.72 0.0320
1.00 2.05 25,704 0.42+ 2.44+ 0.74+ 0.0177
$1.00 1.53% $ 10,769 0.80%+(b) 3.01%+ 1.05%+ $ 0.0139
1.00 2.73 2,334 0.80 2.75 1.05 0.0244
1.00 0.91 2 0.69+ 2.96+ 0.97+ 0.0081
1.00 2.61 2 0.45+ 3.47+ 0.72+ 0.0225
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE> 36
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS DISTRIBUTIONS TOTAL
VALUE NET FROM NET FROM NET DIVIDENDS
BEGINNING OF INVESTMENT INVESTMENT REALIZED AND
PERIOD INCOME INCOME CAPITAL GAINS DISTRIBUTIONS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS TREASURY FUND
PRIMARY A SHARES
Six months ended 09/30/1997
(unaudited)..................... $ 1.00 $ 0.0264 $(0.0264) -- $ (0.0264)
Year ended 03/31/1997............. 1.00 0.0509 (0.0509) -- (0.0509)
Period ended 03/31/1996(a)........ 1.00 0.0458 (0.0458) $ (0.0000)# (0.0458)
Year ended 05/31/1995............. 1.00 0.0494 (0.0494) (0.0000)# (0.0494)
Year ended 05/31/1994............. 1.00 0.0297 (0.0297) -- (0.0297)
Year ended 05/31/1993............. 1.00 0.0307 (0.0307) -- (0.0307)
Year ended 05/31/1992............. 1.00 0.0483 (0.0483) -- (0.0483)
Year ended 05/31/1991............. 1.00 0.0721 (0.0721) -- (0.0721)
Year ended 05/31/1990............. 1.00 0.0829 (0.0829) -- (0.0829)
Year ended 05/31/1989............. 1.00 0.0802 (0.0802) -- (0.0802)
Year ended 05/31/1988............. 1.00 0.0630 (0.0630) -- (0.0630)
Period ended 05/31/1987*.......... 1.00 0.0262 (0.0262) -- (0.0262)
PRIMARY B SHARES
Six months ended 09/30/1997
(unaudited)..................... $ 1.00 $ 0.0252 $(0.0252) -- $ (0.0252)
Year ended 03/31/1997............. 1.00 0.0484 (0.0484) -- (0.0484)
Period ended 03/31/1996(a)........ 1.00 0.0437 (0.0437) $ (0.0000)# (0.0437)
Period ended 05/31/1995*.......... 1.00 0.0449 (0.0449) (0.0000)# (0.0449)
INVESTOR A SHARES
Six months ended 09/30/1997
(unaudited)..................... $ 1.00 $ 0.0247 $(0.0247) -- $ (0.0247)
Year ended 03/31/1997............. 1.00 0.0474 (0.0474) -- (0.0474)
Period ended 03/31/1996(a)........ 1.00 0.0429 (0.0429) $ (0.0000)# (0.0429)
Year ended 05/31/1995............. 1.00 0.0457 (0.0457) (0.0000)# (0.0457)
Year ended 05/31/1994............. 1.00 0.0262 (0.0262) -- (0.0262)
Year ended 05/31/1993............. 1.00 0.0272 (0.0272) -- (0.0272)
Year ended 05/31/1992............. 1.00 0.0448 (0.0448) -- (0.0448)
Period ended 05/31/1991*.......... 1.00 0.0592 (0.0592) -- (0.0592)
INVESTOR B SHARES
Six months ended 09/30/1997
(unaudited)..................... $ 1.00 $ 0.0252 $(0.0252) -- $ (0.0252)
Year ended 03/31/1997............. 1.00 0.0484 (0.0484) -- (0.0484)
Period ended 03/31/1996(a)........ 1.00 0.0437 (0.0437) $ (0.0000)# (0.0437)
Year ended 05/31/1995............. 1.00 0.0468 (0.0468) (0.0000)# (0.0468)
Period ended 05/31/1994*.......... 1.00 0.0015 (0.0015) -- (0.0015)
INVESTOR C SHARES
Six months ended 09/30/1997
(unaudited)..................... $ 1.00 $ 0.0252 $(0.0252) -- $ (0.0252)
Year ended 03/31/1997............. 1.00 0.0484 (0.0484) -- (0.0484)
Period ended 03/31/1996(a)........ 1.00 0.0437 (0.0437) $ (0.0000)# (0.0437)
Year ended 05/31/1995............. 1.00 0.0468 (0.0468) (0.0000)# (0.0468)
Period ended 05/31/1994*.......... 1.00 0.0019 (0.0019) -- (0.0019)
DAILY SHARES
Six months ended 09/30/1997
(unaudited)..................... $ 1.00 $ 0.0239 $(0.0239) -- $ (0.0239)
Year ended 03/31/1997............. 1.00 0.0455 (0.0455) -- (0.0455)
Period ended 03/31/1996(a)........ 1.00 0.0404 (0.0404) -- (0.0404)
Period ended 05/31/1995*.......... 1.00 0.0167 (0.0167) -- (0.0167)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Nations Treasury Fund's Primary A, Primary B, Investor A, Investor B, Investor C and Daily Shares commenced operations on
December 15, 1986, June 16, 1994, July 16, 1990, May 16, 1994, May 11, 1994 and February 9, 1995, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and does not reflect the deduction of any applicable
sales charges.
+++ Unaudited.
# Amount represents less than $0.0001 per share.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was May 31.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE> 37
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
------------------------------
RATIO OF RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING
VALUE END OF EXPENSES TO INCOME EXPENSES TO NET INVESTMENT
END OF TOTAL PERIOD AVERAGE NET TO AVERAGE AVERAGE NET INCOME
PERIOD RETURN++ (IN 000'S) ASSETS NET ASSETS ASSETS PER SHARE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1.00 2.67% $1,119,755 0.30%+ 5.27%+ 0.35%+ $ 0.0262
1.00 5.22 1,345,585 0.30 5.09 0.34 0.0505
1.00 4.67 821,030 0.30+ 5.52+ 0.37+ 0.0453
1.00 5.05 2,896,868 0.30 4.99 0.35 0.0489
1.00 2.99 2,679,992 0.30 2.97 0.36 0.0292
1.00 3.12 2,956,796 0.30 3.02 0.36 0.0302
1.00 4.95+++ 1,094,741 0.29 4.82 0.42 0.0470
1.00 7.46+++ 955,186 0.25 7.04 0.43 0.0703
1.00 8.61+++ 392,843 0.25 8.18 0.59+++ 0.0693+++
1.00 8.33+++ 90,946 0.39 7.93 0.58+++ 0.0783+++
1.00 6.49+++ 111,414 0.38 6.31 0.65+++ 0.0603+++
1.00 2.64+++ 66,221 0.35+ 5.68+ 0.75+/+++ 0.0222+++
$ 1.00 2.55% $ 33,180 0.55%+ 5.02%+ 0.60%+ $ 0.0250
1.00 4.96 55,170 0.55 4.84 0.59 0.0480
1.00 4.46 47,488 0.55+ 5.27+ 0.62+ 0.0432
1.00 4.56 56,815 0.55+ 4.74+ 0.60+ 0.0444
$ 1.00 2.49% $1,464,926 0.65%+ 4.92%+ 0.70%+ $ 0.0245
1.00 4.85 719,199 0.65 4.74 0.69 0.0470
1.00 4.36 89,584 0.65+ 5.17+ 0.72+ 0.0424
1.00 4.65 107,475 0.67 4.62 0.72 0.0452
1.00 2.67 74,195 0.65 2.62 0.71 0.0257
1.00 2.77 105,828 0.65 2.67 0.71 0.0266
1.00 4.57+++ 90,917 0.64 4.47 0.76 0.0435
1.00 6.98+++ 37,265 0.61+ 6.53+ 0.83+ 0.0570
$ 1.00 2.55% $ 666,812 0.55%+ 5.02%+ 0.60%+ $ 0.0250
1.00 4.96 973,297 0.55 4.84 0.59 0.0480
1.00 4.46 1,525,048 0.55+ 5.27+ 0.62+ 0.0432
1.00 4.76 52,564 0.56 4.73 0.61 0.0463
1.00 0.14 2 0.55+ 2.72+ 0.61+ 0.0014
$ 1.00 2.55% $ 7,796 0.55%+ 5.02%+ 0.60%+ $ 0.0250
1.00 4.96 13,868 0.55 4.84 0.59 0.0480
1.00 4.46 8,783 0.55+ 5.27+ 0.62+ 0.0432
1.00 4.76 6,373 0.56 4.73 0.61 0.0463
1.00 0.19 191 0.55+ 2.72+ 0.61+ 0.0019
$ 1.00 2.42% $ 169,711 0.80%+ 4.77%+ 0.85%+ $ 0.0237
1.00 4.66 16,323 0.80 4.59 0.84 0.0451
1.00 4.09 2 0.64+ 5.18+ 0.71+ 0.0399
1.00 1.67 2 0.55+ 4.74+ 0.60+ 0.0162
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
35
<PAGE> 38
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS DISTRIBUTIONS TOTAL
VALUE NET FROM NET FROM NET DIVIDENDS
BEGINNING OF INVESTMENT INVESTMENT REALIZED AND
PERIOD INCOME INCOME CAPITAL GAINS DISTRIBUTIONS
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS GOVERNMENT MONEY MARKET FUND
PRIMARY A SHARES
Six months ended 09/30/1997 (unaudited)....... $ 1.00 $ 0.0262 $(0.0262) -- $ (0.0262)
Year ended 03/31/1997......................... 1.00 0.0503 (0.0503) -- (0.0503)
Period ended 03/31/1996(a).................... 1.00 0.0173 (0.0173) -- (0.0173)
Year ended 11/30/1995......................... 1.00 0.0558 (0.0558) -- (0.0558)
Year ended 11/30/1994......................... 1.00 0.0375 (0.0375) $ (0.0000)# (0.0375)
Year ended 11/30/1993......................... 1.00 0.0294 (0.0294) -- (0.0294)
Year ended 11/30/1992......................... 1.00 0.0358 (0.0358) -- (0.0358)
Period ended 11/30/1991*...................... 1.00 0.0571 (0.0571) -- (0.0571)
PRIMARY B SHARES
Six months ended 09/30/1997 (unaudited)....... $ 1.00 $ 0.0250 $(0.0250) -- $ (0.0250)
Year ended 03/31/1997......................... 1.00 0.0478 (0.0478) -- (0.0478)
Period ended 03/31/1996(a).................... 1.00 0.0165 (0.0165) -- (0.0165)
Year ended 11/30/1995......................... 1.00 0.0533 (0.0533) -- (0.0533)
Period ended 11/30/1994*...................... 1.00 0.0200 (0.0200) $ (0.0000)# (0.0200)
INVESTOR A SHARES
Six months ended 09/30/1997 (unaudited)....... $ 1.00 $ 0.0245 $(0.0245) -- $ (0.0245)
Year ended 03/31/1997......................... 1.00 0.0468 (0.0468) -- (0.0468)
Period ended 03/31/1996(a).................... 1.00 0.0162 (0.0162) -- (0.0162)
Year ended 11/30/1995......................... 1.00 0.0522 (0.0522) -- (0.0522)
Year ended 11/30/1994......................... 1.00 0.0340 (0.0340) $ (0.0000)# (0.0340)
Year ended 11/30/1993......................... 1.00 0.0256 (0.0256) -- (0.0256)
Year ended 11/30/1992......................... 1.00 0.0358 (0.0358) -- (0.0358)
Period ended 11/30/1991*...................... 1.00 0.0571 (0.0571) -- (0.0571)
INVESTOR B SHARES
Six months ended 09/30/1997 (unaudited)....... $ 1.00 $ 0.0250 $(0.0250) -- $ (0.0250)
Year ended 03/31/1997......................... 1.00 0.0478 (0.0478) -- (0.0478)
Period ended 03/31/1996(a).................... 1.00 0.0165 (0.0165) -- (0.0165)
Year ended 11/30/1995......................... 1.00 0.0532 (0.0532) -- (0.0532)
Period ended 11/30/1994*...................... 1.00 0.0222 (0.0222) $ (0.0000)# (0.0222)
INVESTOR C SHARES
Six months ended 09/30/1997 (unaudited)....... $ 1.00 $ 0.0250 $(0.0250) -- $ (0.0250)
Year ended 03/31/1997......................... 1.00 0.0478 (0.0478) -- (0.0478)
Period ended 03/31/1996(a).................... 1.00 0.0165 (0.0165) -- (0.0165)
Year ended 11/30/1995......................... 1.00 0.0532 (0.0532) -- (0.0532)
Period ended 11/30/1994*...................... 1.00 0.0290 (0.0290) $ (0.0000)# (0.0290)
DAILY SHARES
Six months ended 09/30/1997 (unaudited)....... $ 1.00 $ 0.0237 $(0.0237) -- $ (0.0237)
Year ended 03/31/1997......................... 1.00 0.0453 (0.0453) -- (0.0453)
Period ended 03/31/1996(a).................... 1.00 0.0157 (0.0157) -- (0.0157)
Period ended 11/30/1995*...................... 1.00 0.0418 (0.0418) -- (0.0418)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Nations Government Money Market Fund's Primary A, Primary B, Investor A, Investor B, Investor C and Daily Shares commenced
operations on December 3, 1990, June 16, 1994, February 11, 1991, May 17, 1994, March 21, 1994 and February 10, 1995,
respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and does not reflect the deduction of any
applicable sales charge.
+++ Unaudited.
# Amount represents less than $0.0001 per share.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was November 30.
(b) The effect of the fees reduced by credits allowed by the custodian on the operating expense ratio, with and without waivers
and/or expense reimbursements and net investment income per share was less than 0.01% and $0.00, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36
<PAGE> 39
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
------------------------------
RATIO OF RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING
VALUE END OF EXPENSES TO INCOME TO EXPENSES TO NET INVESTMENT
END OF TOTAL PERIOD AVERAGE NET AVERAGE NET AVERAGE NET INCOME
PERIOD RETURN++ (IN 000'S) ASSETS ASSETS ASSETS PER SHARE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$1.00 2.66% $244,547 0.30%+(b) 5.23%+ 0.58%+(b) $ 0.0250(b)
1.00 5.18 299,394 0.30 5.03 0.57 0.0476
1.00 1.74 336,771 0.30+ 5.20+ 0.59+ 0.0163
1.00 5.72 332,895 0.30 5.58 0.57 0.0531
1.00 3.84 432,729 0.30 3.79 0.59 0.0347
1.00 2.96 475,180 0.30 2.91 0.56 0.0269
1.00 3.63+++ 414,412 0.42 3.55 0.58 0.0341
1.00 5.87+++ 333,979 0.43+ 5.49+ 0.62+ 0.0551
$1.00 2.52% $ 19,080 0.55%+(b) 4.98%+ 0.83%+(b) $ 0.0236(b)
1.00 4.93 19,450 0.55 4.78 0.82 0.0451
1.00 1.66 31,581 0.55+ 4.95+ 0.84+ 0.0155
1.00 5.45 27,122 0.55 5.33 0.82 0.0506
1.00 2.02 72,747 0.55+ 3.54+ 0.84+ 0.0186
$1.00 2.48% $ 26,370 0.65%+(b) 4.88%+ 0.93%+(b) $ 0.0231(b)
1.00 4.80 18,717 0.65 4.68 0.92 0.0441
1.00 1.62 48,742 0.65+ 4.85+ 0.94+ 0.0152
1.00 5.34 26,175 0.65 5.23 0.92 0.0495
1.00 3.45 20,173 0.65 3.44 0.94 0.0311
1.00 2.60 10,499 0.61 2.60 0.87 0.0231
1.00 3.63+++ 13,851 0.42 3.55 0.58 0.0341
1.00 5.86+++ 8,949 0.43+ 5.49+ 0.62+ 0.0551
$1.00 2.52% $ 27,058 0.55%+(b) 4.98%+ 0.83%+(b) $ 0.0236(b)
1.00 4.93 27,750 0.55 4.78 0.82 0.0451
1.00 1.66 62,617 0.55+ 4.95+ 0.84+ 0.0155
1.00 5.45 27,079 0.55 5.33 0.82 0.0505
1.00 2.24 11,955 0.55+ 3.54+ 0.84+ 0.0206
$1.00 2.52% $ 3,859 0.55%+(b) 4.98%+ 0.83%+(b) $ 0.0236(b)
1.00 4.93 2,142 0.55 4.78 0.82 0.0451
1.00 1.66 1,731 0.55+ 4.95+ 0.84+ 0.0155
1.00 5.44 4,414 0.55 5.33 0.82 0.0505
1.00 2.94 476 0.55+ 3.54+ 0.84+ 0.0268
$1.00 2.39% $ 6,784 0.80%+(b) 4.73%+ 1.08%+(b) $ 0.0223(b)
1.00 4.63 7,860 0.80 4.53 1.07 0.0426
1.00 1.58 2 0.71+ 4.79+ 1.00+ 0.0147
1.00 4.38 2 0.55+ 5.33+ 0.82+ 0.0397
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
37
<PAGE> 40
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS TOTAL
VALUE NET FROM NET DIVIDENDS
BEGINNING OF INVESTMENT INVESTMENT AND
PERIOD INCOME INCOME DISTRIBUTIONS
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NATIONS PRIME FUND
PRIMARY A SHARES
Six months ended 09/30/1997 (unaudited).......... $ 1.00 $ 0.0273 $(0.0273) $ (0.0273)
Year ended 03/31/1997............................ 1.00 0.0520 (0.0520) (0.0520)
Period ended 03/31/1996(a)....................... 1.00 0.0468 (0.0468) (0.0468)
Year ended 05/31/1995............................ 1.00 0.0519 (0.0519) (0.0519)
Year ended 05/31/1994............................ 1.00 0.0318 (0.0318) (0.0318)
Year ended 05/31/1993............................ 1.00 0.0328 (0.0328) (0.0328)
Year ended 05/31/1992............................ 1.00 0.0506 (0.0506) (0.0506)
Year ended 05/31/1991............................ 1.00 0.0749 (0.0749) (0.0749)
Year ended 05/31/1990............................ 1.00 0.0855 (0.0855) (0.0855)
Year ended 05/31/1989............................ 1.00 0.0839 (0.0839) (0.0839)
Year ended 05/31/1988............................ 1.00 0.0675 (0.0675) (0.0675)
Period ended 05/31/1987*......................... 1.00 0.0277 (0.0277) (0.0277)
PRIMARY B SHARES
Six months ended 09/30/1997 (unaudited).......... $ 1.00 $ 0.0261 $(0.0261) $ (0.0261)
Year ended 03/31/1997............................ 1.00 0.0495 (0.0495) (0.0495)
Period ended 03/31/1996(a)....................... 1.00 0.0447 (0.0447) (0.0447)
Period ended 05/31/1995*......................... 1.00 0.0474 (0.0474) (0.0474)
INVESTOR A SHARES
Six months ended 09/30/1997 (unaudited).......... $ 1.00 $ 0.0256 $(0.0256) $ (0.0256)
Year ended 03/31/1997............................ 1.00 0.0485 (0.0485) (0.0485)
Period ended 03/31/1996(a)....................... 1.00 0.0438 (0.0438) (0.0438)
Year ended 05/31/1995............................ 1.00 0.0475 (0.0475) (0.0475)
Year ended 05/31/1994............................ 1.00 0.0283 (0.0283) (0.0283)
Year ended 05/31/1993............................ 1.00 0.0293 (0.0293) (0.0293)
Year ended 05/31/1992............................ 1.00 0.0470 (0.0470) (0.0470)
Period ended 05/31/1991*......................... 1.00 0.0617 (0.0617) (0.0617)
INVESTOR B SHARES
Six months ended 09/30/1997 (unaudited).......... $ 1.00 $ 0.0261 $(0.0261) $ (0.0261)
Year ended 03/31/1997............................ 1.00 0.0495 (0.0495) (0.0495)
Period ended 03/31/1996(a)....................... 1.00 0.0447 (0.0447) (0.0447)
Year ended 05/31/1995............................ 1.00 0.0493 (0.0493) (0.0493)
Period ended 05/31/1994*......................... 1.00 0.0015 (0.0015) (0.0015)
INVESTOR C SHARES
Six months ended 09/30/1997 (unaudited).......... $ 1.00 $ 0.0261 $(0.0261) $ (0.0261)
Year ended 03/31/1997............................ 1.00 0.0495 (0.0495) (0.0495)
Period ended 03/31/1996(a)....................... 1.00 0.0447 (0.0447) (0.0447)
Year ended 05/31/1995............................ 1.00 0.0493 (0.0493) (0.0493)
Period ended 05/31/1994*......................... 1.00 0.0155 (0.0155) (0.0155)
DAILY SHARES
Six months ended 09/30/1997 (unaudited).......... $ 1.00 $ 0.0248 $(0.0248) $ (0.0248)
Year ended 03/31/1997............................ 1.00 0.0470 (0.0470) (0.0470)
Period ended 03/31/1996(a)....................... 1.00 0.0439 (0.0439) (0.0439)
Period ended 05/31/1995*......................... 1.00 0.0173 (0.0173) (0.0173)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Nations Prime Fund's Primary A, Primary B, Investor A, Investor B, Investor C and Daily Shares commenced operations on
December 15, 1986, June 16, 1994, July 16, 1990, May 11, 1994, November 26, 1993 and February 9, 1995, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and does not reflect the deduction of any applicable
sales charges.
+++ Unaudited.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was May 31.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE> 41
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
------------------------------
RATIO OF RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING
VALUE END OF EXPENSES TO INCOME EXPENSES TO NET INVESTMENT
END OF TOTAL PERIOD AVERAGE NET TO AVERAGE AVERAGE NET INCOME
PERIOD RETURN++ (IN 000'S) ASSETS NET ASSETS ASSETS PER SHARE
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$1.00 2.77% $3,655,758 0.30%+ 5.45%+ 0.34%+ $ 0.0271
1.00 5.34 2,533,688 0.30 5.21 0.35 0.0516
1.00 4.79 2,472,469 0.30+ 5.62+ 0.37+ 0.0463
1.00 5.32 2,873,096 0.30 5.23 0.38 0.0511
1.00 3.22 2,883,762 0.30 3.20 0.37 0.0311
1.00 3.33 1,156,266 0.30 3.25 0.36 0.0322
1.00 5.19+++ 500,476 0.30 5.03 0.42 0.0494
1.00 7.75+++ 574,993 0.30 7.47 0.44 0.0735
1.00 8.88+++ 433,298 0.32 8.43 0.50+++ 0.0731+++
1.00 8.71+++ 115,295 0.35 8.11 0.55+++ 0.0819+++
1.00 6.94+++ 264,063 0.36 6.73 0.56+++ 0.0655+++
1.00 2.79+++ 252,562 0.35+ 5.99+ 0.65+/+++ 0.0247+++
$1.00 2.63% $ 67,279 0.55%+ 5.20%+ 0.59%+ $ 0.0259
1.00 5.05 184,021 0.55 4.96 0.60 0.0491
1.00 4.57 96,305 0.55+ 5.37+ 0.62+ 0.0442
1.00 4.84 126,120 0.55+ 4.98+ 0.63+ 0.0466
$1.00 2.60% $1,364,335 0.65%+ 5.10%+ 0.69%+ $ 0.0254
1.00 4.96 1,157,724 0.65 4.86 0.70 0.0481
1.00 4.48 1,099,490 0.65+ 5.27+ 0.72+ 0.0433
1.00 4.85 698,358 0.75 4.78 0.83 0.0467
1.00 2.86 511,833 0.65 2.85 0.72 0.0276
1.00 2.97 306,376 0.65 2.90 0.71 0.0287
1.00 4.81+++ 281,101 0.65 4.67 0.77 0.0458
1.00 7.31+++ 144,202 0.65+ 6.69+ 0.79+ 0.0603
$1.00 2.63% $ 643,086 0.55%+ 5.20%+ 0.59%+ $ 0.0259
1.00 5.05 381,015 0.55 4.96 0.60 0.0491
1.00 4.57 358,646 0.55+ 5.37+ 0.62+ 0.0442
1.00 5.03 216,973 0.56 4.97 0.64 0.0485
1.00 0.15 2 0.55+ 2.95+ 0.62+ 0.0015
$1.00 2.63% $ 81,887 0.55%+ 5.20%+ 0.59%+ $ 0.0259
1.00 5.05 93,678 0.55 4.96 0.60 0.0491
1.00 4.57 74,822 0.55+ 5.37+ 0.62+ 0.0442
1.00 5.03 53,451 0.56 4.97 0.64 0.0485
1.00 1.58 1,481 0.55+ 2.95+ 0.62+ 0.0151
$1.00 2.51% $ 104,812 0.80%+ 4.95%+ 0.84%+ $ 0.0246
1.00 4.80 9,010 0.80 4.71 0.85 0.0466
1.00 4.49 40 0.67+ 5.25+ 0.74+ 0.0434
1.00 1.74 2 0.55+ 4.98+ 0.63+ 0.0165
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
39
<PAGE> 42
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Nations Fund Trust (the "Trust") and Nations Fund, Inc. (the "Company") are
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as open-end investment companies. As of the date of this report, the
Trust offers thirty-three separate portfolios and the Company offers eight
separate portfolios. Information presented in these financial statements
pertains only to: Nations Prime Fund, Nations Government Money Market Fund,
Nations Treasury Fund and Nations Tax Exempt Fund (each a "Fund" and
collectively, the "Funds"). The financial statements for the remaining funds 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.
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 its class and separate
voting rights on matters in which the interests of one class of shares 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 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: The portfolio securities of each Fund are valued on the
basis of amortized cost, which approximates market value. Amortized cost
valuation involves initially valuing an instrument at its cost and thereafter
assuming a constant amortization to maturity of any discount or premium, as long
as the effect of fluctuating interest rates on the market value of the
instrument is not significant. Restricted securities and other assets are valued
by the Funds' investment adviser under the supervision of the Board of Trustees
or the Board of Directors.
Repurchase Agreements: Each Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the collateral
should be at least equal at all times to the total amount of the repurchase
obligations, including interest. Generally, in the event of counterparty
default, the Fund has the right to use the collateral to offset losses incurred.
There would be a potential loss to the Fund in the event the Fund is delayed or
prevented from exercising its right to dispose of the collateral securities,
including the risk of a possible decline in the value of the underlying
securities during the period while the Fund seeks to assert its right. Unless
permitted by the Securities and Exchange Commission, the Fund will not enter
into repurchase agreements with the investment adviser, distributor or any of
their affiliates. The Funds' investment adviser, acting under the supervision of
the Board of Trustees or the Board of Directors, monitors 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: The Funds may enter into reverse repurchase
agreements with institutions that the Funds' investment adviser has determined
are creditworthy. Under the terms of a typical reverse repurchase agreement, the
Fund sells securities and agrees to repurchase them at a mutually agreed upon
date and price. At the time the Fund enters into a reverse repurchase agreement,
it establishes a segregated account with its custodian bank in which it will
maintain cash, U.S. Government securities or other liquid high grade debt
obligations at least equal in value to the Fund's obligations arising under the
reverse repurchase agreement. Reverse repurchase agreements involve the risk
that the market value of the securities purchased with the proceeds from the
sale of securities received by the Fund may decline below the price of the
securities that the Fund is obligated to repurchase. Securities subject to
repurchase under reverse repurchase agreements are designated in the Schedule of
Investments.
At September 30, 1997, Nations Treasury Fund had reverse repurchase agreements
outstanding as follows:
<TABLE>
<S> <C>
Maturity Amount.............................................................. $489,182,000
Maturity Date................................................................ 07/01/98
Market Value of Assets Sold Under Agreements................................. $484,547,507
</TABLE>
The average daily balance of reverse repurchase agreements outstanding during
the six months ended September 30, 1997 was $487,628,697.
40
<PAGE> 43
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
The proceeds received by Nations Treasury Fund under the reverse repurchase
agreements were reinvested in a tri-party repurchase agreement. Net fees earned
during the six months ended September 30, 1997, representing the difference
between interest rates on the reverse repurchase and repurchase agreements,
amounted to $371,817 and have been included in interest income in the Statement
of Operations.
Securities Transactions and Investment Income: Securities transactions are
accounted for on a trade date basis. Securities purchased or sold on a
when-issued or delayed-delivery basis may be settled a month or more after the
trade date. Realized gains and losses are computed based on the specific
identification of the securities sold. Interest income, adjusted for accretion
of discounts and amortization premiums calculated ratably, is earned from the
settlement date and is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date. Each Fund's investment income and realized and
unrealized gains and losses are allocated among classes based upon the relative
net assets of each class of shares.
Dividends and Distributions to Shareholders: It is the policy of each Fund to
declare dividends daily from net investment income and to pay such dividends
monthly. Each Fund will distribute net realized short-term capital gains
annually after the fiscal year in which earned or more frequently to maintain a
net asset value of $1.00 per share, unless offset by any available capital loss
carryforward. Additional distributions of net investment income and capital
gains may be made at the discretion of the Board of Trustees or the Board of
Directors in order to avoid application of the 4% non-deductible Federal excise
tax. 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. These differences are primarily
due to timing differences and differing characterization of distributions made
by the Fund as a whole.
Federal Income Tax: Each Fund intends to qualify as a regulated investment
company by complying with the requirements of the Internal Revenue Code of 1986,
as amended, applicable to regulated investment companies and by distributing
substantially all of its earnings to its shareholders. Therefore, no Federal
income or excise tax provision is applicable.
Expenses: General expenses of the Trust or the Company are allocated to the
relevant Funds based upon relative net assets. Operating expenses directly
attributable to a Fund or class of shares are charged to such Fund's or class's
operations. Expenses of each Fund not directly attributable to the operations of
any class of shares are prorated among the classes based on the relative net
assets of each class of shares.
Cash Flow Information: Cash, as used in the Statement of Cash Flows, is the
amount reported in the Statements of Assets and Liabilities and represents cash
on hand at custodian banks. The Trust and the Company issue and redeem shares,
invest in securities, and distribute dividends from net investment income and
net capital gains (which are either paid in cash or reinvested at the discretion
of shareholders). These activities are reported in the Statements of Changes in
Net Assets. Information on cash payments is presented in the Statement of Cash
Flows.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS.
Each of the Trust and the Company has, on behalf of its Funds, entered into an
investment advisory agreement (the "Investment Advisory Agreements") with
NationsBanc Advisors, Inc. ("NBAI"), a wholly-owned subsidiary of NationsBank,
N.A., ("NationsBank"), pursuant to which NBAI provides investment advisory
services to the Funds. Under the terms of these Investment Advisory Agreements,
NBAI is entitled to receive an advisory fee from (i) Nations Government Money
Market Fund and Nations Tax Exempt Fund calculated daily and payable monthly
based on the annual rate of 0.40% of the average daily net assets of such Funds
and (ii) Nations Prime Fund and Nations Treasury Fund at the following annual
rates multiplied by the combined average daily net assets of such Funds, as
follows:
<TABLE>
<CAPTION>
FEES ON COMBINED FEES ON COMBINED
ASSETS UP TO ASSETS EXCEEDING
$250 MILLION $250 MILLION
-------------------------------------
<S> <C> <C>
Nations Prime Fund............................................ 0.25% 0.20%
Nations Treasury Fund......................................... 0.25% 0.20%
</TABLE>
Each of the Trust and the Company has, on behalf of its Funds, entered into a
sub-advisory agreement (the "Sub-Advisory Agreements") with NBAI and TradeStreet
Investment Associates, Inc. ("TradeStreet"), a wholly-owned
41
<PAGE> 44
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
subsidiary of NationsBank. Under the terms of these Sub-Advisory Agreements,
TradeStreet is entitled to receive a sub-advisory fee from NBAI for each Fund at
the annual rate of 0.055% of each Fund's average daily net assets.
Stephens Inc. ("Stephens") serves as the administrator of the Trust and the
Company pursuant to administration agreements (the "Administration Agreements").
First Data Investor Services Group, Inc. ("First Data"), a wholly-owned
subsidiary of First Data Corporation, serves as the co-administrator of the
Trust and the Company pursuant to co-administration agreements (the
"Co-Administration Agreements"). Pursuant to the Administration and Co-
Administration Agreements, Stephens and First Data are entitled to receive a
combined fee, computed daily and paid monthly, at the annual rate of 0.10% of
the average daily net assets of the investment portfolios of the Trust and the
Company and the investment portfolios of Nations Fund Portfolios, Inc. (another
registered investment company which is part of the Nations Funds Family) on a
combined basis. NationsBank serves as the sub-administrator of the Trust and the
Company pursuant to a sub-administration agreement (the "Sub-Administration
Agreement") with Stephens. For the six months ended September 30, 1997, Stephens
earned $4,160,566, net of fee waiver, from the Funds for its administration
services, of which $569,583, was paid to NationsBank for its services as
sub-administrator.
The investment adviser, sub-adviser and administrator may, from time to time,
reduce their fees payable by each Fund. For the six months ended September 30,
1997, the investment adviser/administrator voluntarily waived fees as follows:
<TABLE>
<CAPTION>
FEES WAIVED FEES WAIVED
BY ADVISER BY ADMINISTRATOR
--------------------------------
<S> <C> <C>
Nations Prime Fund................................................. $ 674,594 $549,593
Nations Government Money Market Fund............................... 449,588 35,070
Nations Treasury Fund.............................................. 442,844 358,000
Nations Tax Exempt Fund............................................ 2,341,127 201,502
</TABLE>
NationsBank of Texas, N.A.("NationsBank of Texas" and, collectively with The
Bank of New York ("BONY"), called "Custodians") acts as Custodian of the Trust's
and the Company's assets and, for the six months ended September 30, 1997,
earned $13,492 for providing such services. BONY has entered into an agreement
with each of the Funds and NationsBank of Texas, whereby BONY will serve as
sub-custodian for the Funds. The Trust and the Company accrue a credit on daily
cash balances held at BONY. The earnings credit is applied to the monthly
custody fee. For the six months ended September 30, 1997 the earnings credit was
$4,549.
First Data also serves as the transfer agent for the Funds' shares. NationsBank
of Texas also acts as the sub-transfer agent for the Primary Shares of the Funds
and, for the six months ended September 30, 1997, earned approximately $10,574
for providing such services. Stephens also serves as distributor of the Funds'
shares.
No officer, director or employee of NationsBank, NBAI, TradeStreet, Stephens,
First Data or any affiliate thereof, receives any compensation from the Trust or
the Company for serving as a trustee, director, officer or employee of the Trust
or the Company. The Trust and the Company pay each unaffiliated Trustee or
Director an annual fee of $1,000 ($3,000 for the Chairman of the Board), plus
$500 per Fund and an additional $1,000 for each in-person board meeting and $500
for each telephonic board meeting attended. The Trust and the Company also
reimburse expenses incurred by each unaffiliated Trustee or Director in
attending such meetings.
The Trust's and the Company's eligible Trustees or Directors, respectively, may
participate in non-qualified deferred compensation and retirement plans which
may be terminated at any time. All benefits provided under these plans are
unfunded and any payments to plan participants are paid solely out of the Funds'
assets. Income earned on each plan participant's deferral account is tied to the
rate of return of the eligible mutual funds selected by the participants or, if
no funds are selected, to the rate of return of Nations Treasury Fund. The
expense for the deferred compensation plan is included in "Trustees'/Directors'
fees and expenses" in the Statements of Operations.
42
<PAGE> 45
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS.
The Trust and the Company each have adopted shareholder servicing plans
("Servicing Plans") for Primary B Shares, Investor A Shares, Investor B Shares
(formerly Investor N Shares), Investor C Shares and Daily Shares of each Fund;
and a distribution plan ("Distribution Plans") pursuant to Rule 12b-1 under the
1940 Act for Investor A Shares, Investor B Shares and Daily Shares of each Fund
(collectively, the "Plans"). The Servicing Plans permit the Funds to compensate
servicing agents and selling agents that have entered into a servicing agreement
with the Funds for services provided to their customers that own Primary B
Shares, Investor A Shares, Investor B Shares, Investor C Shares and Daily
Shares, respectively. The Distribution Plans permit the Funds to compensate or
reimburse Stephens for any activities or expenses primarily intended to result
in the sale of the Funds' Investor A Shares, Investor B Shares or Daily Shares,
respectively. Payments under the Plans are accrued daily and paid monthly at a
rate set, from time to time, by the Funds. Fees incurred pursuant to the Plans
are charged as expenses of each Fund directly to the Primary B Shares, Investor
A Shares, Investor B Shares, Investor C Shares and Daily Shares, respectively.
For the six months ended September 30, 1997, the effective rates incurred by the
Funds, as a percentage of average daily net assets, pursuant to the Plans were
as follows:
<TABLE>
<CAPTION>
PRIMARY B INVESTOR A INVESTOR A INVESTOR B INVESTOR B INVESTOR C DAILY DAILY
SERVICING SERVICING DISTRIBUTION SERVICING DISTRIBUTION SERVICING SERVICING DISTRIBUTION
FUND FUND PLAN PLAN PLAN PLAN PLAN PLAN PLAN
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nations Prime Fund.... 0.25% 0.25% 0.10% 0.25% -- 0.25% 0.25% 0.25%
Nations Government
Money Market Fund... 0.25% 0.25% 0.10% 0.25% -- 0.25% 0.25% 0.25%
Nations Treasury
Fund................ 0.25% 0.25% 0.10% 0.25% -- 0.25% 0.25% 0.25%
Nations Tax Exempt
Fund................ 0.25% 0.25% -- 0.20% -- 0.18% 0.25% 0.25%
</TABLE>
A substantial portion of the fees paid pursuant to the Plans described above are
paid to affiliates of NationsBank and NBAI.
4. SHARES OF BENEFICIAL INTEREST.
As of September 30, 1997, an unlimited number of shares of beneficial interest
without par value were authorized for the Trust and 420,000,000,000 shares of
$.001 par value capital stock were authorized for the Company. The Trust's
Declaration of Trust authorizes the Board of Trustees to classify or reclassify
any authorized, but unissued shares into one or more additional classes or
series of shares. See Schedule of Capital Stock Activity.
5. RESTRICTED SECURITIES.
The following securities are illiquid and restricted as to resale and,
accordingly, are valued at fair market value in good faith by or under the
direction of the Trust's Board of Trustees or the Company's Board of Directors,
as applicable, taking into consideration such factors as the relevant Board
deems appropriate.
The following table shows the acquisition date, the par value, value per unit,
market value, the percentage of Nations Prime Fund's total net assets that each
security comprises as well as the aggregate cost of each such security at
September 30, 1997.
<TABLE>
<CAPTION>
VALUE PERCENTAGE
ACQUISITION PER MARKET OF COST AT
SECURITY DATE PAR VALUE UNIT VALUE NET ASSETS 09/30/97
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Allstate Life Insurance Company:
5.835% 12/29/97#................. 11/01/96 $ 25,000,000 $ 1.00 $ 25,000,000 0.4% $ 25,000,000
5.835% 12/29/97#................. 12/01/96 25,000,000 1.00 25,000,000 0.4 25,000,000
</TABLE>
43
<PAGE> 46
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
<TABLE>
<CAPTION>
VALUE PERCENTAGE
ACQUISITION PER MARKET OF COST AT
SECURITY DATE PAR VALUE UNIT VALUE NET ASSETS 09/30/97
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Anchor National Life Insurance
Company:
5.882% 12/29/97#................. 12/01/96 $ 25,000,000 $ 1.00 $ 25,000,000 0.4% $ 25,000,000
5.980% 10/01/97+++............... 07/01/96 50,000,000 1.00 50,000,000 0.9 50,000,000
Commonwealth Life Insurance
Company, Inc.:
5.850% 03/27/98#................. 12/01/96 62,000,000 1.00 62,000,000 1.0 62,000,000
5.850% 03/27/98#................. 02/02/97 10,000,000 1.00 10,000,000 0.1 10,000,000
Life Insurance Company of Georgia,
5.817% 03/27/98#................. 01/01/97 60,000,000 1.00 60,000,000 1.0 60,000,000
New York Life Insurance Company,
5.864% 10/06/97+++............... 10/07/96 100,000,000 1.00 100,000,000 1.6 100,000,000
Peoples Security Life Insurance
Company:
5.850% 12/04/97+++............... 11/04/96 20,000,000 1.00 20,000,000 0.4 20,000,000
5.910% 03/27/98#................. 01/05/97 20,000,000 1.00 20,000,000 0.4 20,000,000
Sun Life Insurance Company of
America,
5.942% 03/27/98#................. 04/01/96 50,000,000 1.00 50,000,000 0.9 50,000,000
Travelers Life Insurance Company,
5.736% 11/01/97+++............... 02/03/97 25,000,000 1.00 25,000,000 0.4 25,000,000
- ---------------------------------------------------------------------------------------------------------------------
$422,000,000 7.9% $472,000,000
=====================================================================================================================
</TABLE>
# Put Date
+++ Reset Date
Certain securities may be sold only pursuant to certain legal restrictions and
may be difficult to sell. No Fund will invest more than 10% of the value of its
net assets in securities that are illiquid.
The following securities of Nations 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
notice.
The following table shows the acquisition date, the par value, value per unit,
market value, the percentage of Nations Prime Fund's total net assets that each
security comprises as well as the aggregate cost of each such security at
September 30, 1997.
<TABLE>
<CAPTION>
VALUE PERCENTAGE
ACQUISITION PER MARKET OF COST AT
SECURITY DATE PAR VALUE UNIT VALUE NET ASSETS 09/30/97
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
General American Life Insurance
Company:
5.830% 10/01/97+++................. 04/09/96 $50,000,000 $1.00 $ 50,000,000 0.9% $ 50,000,000
5.830% 10/07/97#................... 02/06/97 50,000,000 1.00 50,000,000 0.9 50,000,000
Life Insurance Company of Virginia:
5.626% 10/07/97#................... 09/02/96 50,000,000 1.00 50,000,000 0.9 50,000,000
5.650% 10/07/97#................... 02/01/97 25,000,000 1.00 25,000,000 0.4 25,000,000
5.650% 10/07/97#................... 03/01/97 25,000,000 1.00 25,000,000 0.4 25,000,000
- -------------------------------------------------------------------------------------------------------------------
$150,000,000 3.5% $200,000,000
===================================================================================================================
</TABLE>
# Put Date
44
<PAGE> 47
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
6. LINE OF CREDIT.
The Trust and the Company participate in an uncommitted line of credit provided
by BONY under a line of credit agreement dated February 28, 1997 (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. Under the Agreement each
Fund may borrow up to the lesser of $25 million or 25% of its net assets.
Interest on borrowings is payable at the Federal Funds Rate plus 0.50% on an
annualized basis. The Agreement requires, among other things, that each
participating Fund maintain a ratio of no less than 4 to 1 net assets (not
including funds borrowed pursuant to the agreement) to aggregate amount of
indebtedness pursuant to the agreement.
Borrowings for the six months ended September 30, 1997 by the Funds under each
agreement are disclosed below:
<TABLE>
<CAPTION>
AMOUNT MAXIMUM AVERAGE AVERAGE INTEREST
OUTSTANDING AMOUNT AMOUNT AVERAGE DEBT RATE INTEREST
FUND AT 09/30/1997 OUTSTANDING OUTSTANDING SHARES PER SHARE HIGH LOW EXPENSE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nations Tax Exempt Fund..... $ 500,000 $2,040,000 $36,175 1,983,598,558 $0.00(a) 6.31% 6.02% $1,109
</TABLE>
- ---------------
(a) Amount represents less than $0.01 per share.
The average amount outstanding was calculated by adding the borrowings at the
end of each day and dividing the sum by the number of days in the six months
ended September 30, 1997.
7. CAPITAL LOSS CARRYFORWARD.
At March 31, 1997, the Funds had available for Federal income tax purposes the
following unused capital losses expiring March 31:
<TABLE>
<CAPTION>
1998 1999 2001 2002 2003 2004 2005
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Nations Prime Fund.......... $216,957 $203,217 -- -- -- $24,136 $25,486
Nations Government Money
Market Fund............... -- -- -- $ 1,266 $64,553 1,658 --
Nations Treasury Fund....... -- -- -- -- -- 6,459 24,565
Nations Tax Exempt Fund..... -- -- $23,264 16,054 29,615 -- 1,480
</TABLE>
Under the current tax law, capital losses realized after October 31 may be
deferred and treated as occurring on the first day of the following fiscal year.
For the fiscal year ended March 31, 1997, Nations Treasury Fund has elected to
defer losses occurring between November 1, 1996 and March 31, 1997, under these
rules, in the amount of $7,730.
45
<PAGE> 48
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
8. REORGANIZATIONS.
On May 16, 1997 certain Nations Funds, as listed below (each an "Acquiring
Fund"), acquired the assets and certain liabilities of the Pilot Funds, also
listed below (each an "Acquired Fund"), in a tax-free exchange for shares of the
Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired
Fund's shareholders. Total shares issued by the Acquiring Fund, the value of the
shares issued by the Acquiring Fund, the total net assets of the Acquired Fund
and the Acquiring Fund at the acquisition date as well as the net assets of each
Acquiring Fund after the acquisition are as follows:
<TABLE>
<CAPTION>
VALUE OF TOTAL NET
SHARES ISSUED SHARES ISSUED TOTAL NET TOTAL NET ASSETS OF
ACQUIRING ACQUIRED ACQUISITION BY ACQUIRING BY ACQUIRING ASSETS OF ASSETS OF ACQUIRING FUND
FUND FUND DATE FUND FUND ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Nations Pilot
Prime Money Short-Term 05/16/97 1,855,173,183 $1,855,173,183 $1,854,583,091 $4,275,976,797 $ 6,130,559,888
Market Fund Diversified
Assets Fund
Nations Pilot
Treasury Short-Term 05/16/97 1,619,877,976 1,619,877,976 1,619,653,674 2,618,142,225 4,237,795,899
Fund U.S. Treasury
Fund
Nations Pilot
Tax-Exempt Short-Term 05/16/97 392,015,036 392,015,036 391,958,209 1,461,772,857 1,853,731,066
Fund Tax Exempt
Diversified
Fund
Nations Pilot Missouri
Tax-Exempt Short-Term 05/16/97 226,984,191 226,984,191 226,779,626 1,853,731,066 2,080,510,692
Fund Tax-Exempt Fund
</TABLE>
46
<PAGE> 49
[GRAPHIC DEPICTING BASKETS]
<PAGE> 50
--------------------
[NATIONS FUNDS LOGO] BULK RATE
U.S. POSTAGE
PAID
P.O. Box 32602 N READING, MA
Charlotte NC 28234-4602 PERMIT NO.
Toll Free 1-800-982-2271 105
--------------------
SAR4 97495 9/97
