<PAGE> 1
[NATIONS FUNDS LOGO]
[GRAPHIC DEPICTING TREE]
INVESTMENTS FOR A LIFETIME(SM)
NATIONS
TAX EXEMPT FUND
NATIONS
TREASURY FUND
NATIONS
GOVERNMENT
MONEY MONEY MARKET FUND
MARKET
FUNDS NATIONS
PRIME FUND
[GRAPHIC DEPICTING CREW BOAT]
ANNUAL REPORT FOR THE
YEAR ENDED MARCH 31, 1999
<PAGE> 2
[GRAPHIC DEPICTING BASKETS]
THIS REPORT IS SUBMITTED FOR
THE GENERAL INFORMATION OF
SHAREHOLDERS OF NATIONS FUNDS.
THIS MATERIAL MUST BE PRECEDED OR
ACCOMPANIED BY A CURRENT NATIONS
FUNDS PROSPECTUS.
NATIONS FUNDS DISTRIBUTOR:
STEPHENS INC. STEPHENS INC., WHICH
IS NOT AFFILIATED WITH BANK OF
AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION OR
NATIONSBANK, N.A., IS NOT A BANK,
AND SECURITIES OFFERED BY IT ARE NOT
GUARANTEED BY ANY BANK OR INSURED
BY THE FDIC, STEPHENS INC., MEMBER
NYSE, SIPC.
NATIONS FUNDS INVESTMENT ADVISER:
NATIONSBANC ADVISORS, INC.
- ---------------------
NOT FDIC-
INSURED
- ---------------------
MAY LOSE VALUE
- ---------------------
NO BANK GUARANTEE
- ---------------------
<PAGE> 3
Presidents'
Message
Dear Shareholder:
We'd like to thank you for being a part of the
Nations Funds family. Your continued trust and
confidence are greatly appreciated. Many noteworthy
events have taken place during the past year. Let's
take a look.
A ROLLER-COASTER-RIDE OF A YEAR
We know the past 12 months have proved to be quite an
unsettling time for investors. You've seen major
market indexes reach all-time highs, even after the
significant market volatility of late summer-early
fall 1998. Much of the volatility was attributed to
financial crises in Brazil and Russia, the continuing
malaise in Asia, as well as a slowdown in U.S.
corporate earnings growth. However, the Federal
Reserve Board came to the rescue in late September
with the first of three successive cuts in interest
rates. By year-end, investors were feeling confident
once again and many stocks had soared, moving the Dow
Jones Industrial Average closer to the 10,000
milestone.*
While some stock indexes had another impressive year
of double-digit performance -- the Standard & Poor's
500 Composite Stock Price Index (S&P 500)** of
large-company stocks was up 18.46% for the 12 months
ending March 31, 1999 -- focusing on these particular
indexes doesn't give you the complete picture. For
example, during the same 12-month period, the
Standard & Poor's MidCap 400 Index*** posted a gain
of only 0.43% and the Russell 2000 Index(+) of
small-company stocks actually posted negative
performance of -16.20%. There was even divergence
among the stocks in the S&P 500, with the performance
of the 25 largest stocks accounting for approximately
70% of the Index's return.
THE VALUE OF ADVICE
Diversification, along with a long-term perspective,
are among the best tools for investors to weather
changing markets and create a balanced investment
portfolio. That's where the value of professional
financial advice comes in. The role of a good
financial adviser, especially during volatile times,
is to help you make smart investment decisions that
help you pursue your long-term goals. During last
year's downturn in
* The Dow Jones Industrial Average is a
price-weighted index of 30 of the largest, most
widely held stocks traded on the New York Stock
Exchange. It is unmanaged and unavailable for
investment.
** The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely
held common stocks. It is unavailable for investment.
*** The Standard & Poor's MidCap 400 Index is a
market-value weighted index that measures
the market value of 400 domestic stocks chosen for
market size, liquidity and industry representation.
It is unmanaged and unavailable for investment.
+ The Russell 2000 Index is a capitalization-weighted
index that includes 2,000 of the smallest stocks
representing approximately 11% of the U.S. equity
market. It is unmanaged and unavailable for
investment.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
<PAGE> 4
Presidents'
Message continued...
the markets, many mutual fund shareholders who
invested through a financial adviser remained calm
and ignored short-term corrections.
Today, these same investors are probably glad they
did, as the markets continue their generally upward
trend. Of course, history tells us that these trends
do not continue indefinitely, and our belief is that
the best way to weather changing market conditions is
by working with a professional financial adviser.
YOUR MANAGERS OF DISTINCTION(SM)
Financial advisers are there to guide and assist you,
but it also helps to invest with a company that has
experienced fund managers who have weathered various
market cycles over time. At Nations Funds, we call
them our Managers of Distinction(SM).
In bringing you the wide range of funds we offer,
we've carefully selected a roster of specialized
investment management firms. Nations Funds Managers
of Distinction(SM) are all seasoned and
well-respected investment firms. We are pleased to
bring this talent together in one place to offer you
a variety of distinct money management styles.
And, our fund family should get even better with the
completion of our merger with Pacific Horizon
Funds -- the largest merger in mutual fund
history -- anticipated for May. Together, the new
Nations Funds family will be able to offer you an
even broader selection of mutual funds.
Of course, customer service continues to be of
tremendous importance to us and, for the second year
in a row, Nations Funds received the Key Honors award
for superior customer support from DALBAR, Inc. -- an
independent evaluator of customer service in the
mutual fund industry. Our commitment is to provide
you with the best products and services, and we will
seek to continue to do so in the coming year.
We are excited about the past year and the
opportunities ahead of us. If you have any questions
or comments on your annual report, please contact us
at 1.800.321.7854 or e-mail your comments to us via
our Web site at www.nationsbank.com/nationsfunds.
Once again, thank you for being a part of the Nations
Funds family.
Sincerely,
<TABLE>
<S> <C>
/s/ A. Max Walker /s/ Robert H. Gordon
A. Max Walker Robert H. Gordon
President and Chairman President
of the Board NationsBanc Advisors, Inc.
</TABLE>
March 31, 1999
P.S. On May 21, 1999, the Nations Funds/Pacific
Horizon Funds merger was successfully completed.
<PAGE> 5
Table
Of
Contents
<TABLE>
<S> <C>
NATIONS FUNDS SPECTRUM 2
ECONOMIC OVERVIEW 4
FINANCIAL STATEMENTS
Statement of Net Assets 7
Statements of Operations 33
Statements of Changes in Net Assets 34
Statement of Cash Flows 36
Schedules of Capital Stock Activity 37
Financial Highlights 40
Notes to Financial Statements 48
</TABLE>
<TABLE>
<S> <C>
---------------------------------------------------------------------------------
Nations Funds [Dalbar Logo]
Recognized For
Outstanding DALBAR, Inc., is a well-respected research firm
Customer Service that measures customer service levels and
establishes benchmarks in the financial services
In recognition of our industry.
commitment to retail
shareholders through
consistently providing
superior customer service,
Nations Funds was awarded
DALBAR Key Honors in 1997
and 1998.
---------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
THE
NATIONS FUNDS
FAMILY AT A GLANCE
POTENTIAL RETURN
GROWTH & INCOME
------------------
CURRENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
LIQUIDITY
- ----------------------------------------------
MONEY SHORTER INTERMEDIATE LONGER TERM LARGE
MARKET MATURITY MATURITY DOMESTIC CAPITALIZATION
FUNDS BOND FUNDS BOND FUNDS BOND FUNDS VALUE FUNDS
- ----- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
*Nations *Nations Short- *Nations *Nations *Nations
Prime Fund Intermediate Strategic Fixed Diversified Value Fund
Government Income Fund Income Fund
*Nations Government Fund *Nations
Money Market *Nations *Nations Managed
Fund *Nations Government U.S. Government Value Index
Short-Term Securities Fund Bond Fund Fund
*Nations Income Fund
Treasury Fund *Nations *Nations *Nations
*Nations Short- Intermediate Municipal Balanced Assets
*Nations Tax Term Municipal Municipal Income Fund Fund
Exempt Fund Income Fund Bond Fund
*Nations
*Nations State-Specific
State-Specific Long-Term
Intermediate Municipal Bond
Municipal Bond Funds
Funds
</TABLE>
RISK (VARIABILITY)
2
<PAGE> 7
<TABLE>
<CAPTION>
[NATIONS FUNDS LOGO]
INVESTMENTS FOR A LIFETIME(SM)
POTENTIAL RETURN
AGGRESSIVE GROWTH
-----------------------------------------------------------------------------
GROWTH
- -------------------------------------------------------------------
GROWTH & INCOME
- -------------------------------------------
LARGE
CAPITALI- LARGE MID SMALL REGION-SPECIFIC
ZATION CAPITALIZATION INTERNATIONAL CAPITALIZATION CAPITALIZATION INTERNATIONAL
FUNDS GROWTH FUNDS EQUITY FUNDS FUNDS FUNDS FUNDS
- ----- ------------ ------------ ----- ----- -----
<S> <C> <C> <C> <C> <C>
*Nations *Nations *Nations *Nations *Nations *Nations
Marsico Growth Marsico Focused International Emerging Small Company Emerging
& Income Fund Equities Fund Value Fund Growth Fund Growth Fund Markets Fund
*Nations *Nations *Nations *Nations
Equity Disciplined International Managed
Index Fund Equity Fund Growth Fund SmallCap
Index Fund
*Nations *Nations *Nations
Managed Capital Growth International *Nations
Index Fund Fund Equity Fund Managed
SmallCap
*Nations *Nations Value Index
Equity Strategic Equity Fund
Income Fund Fund
RISK (VARIABILITY)
</TABLE>
LIFEGOAL PORTFOLIOS
*LifeGoal Income And Growth Portfolio
*LifeGoal Balanced Growth Portfolio
*LifeGoal Growth Portfolio
3
<PAGE> 8
Economic
Overview
The U.S. economy expanded strongly and the stock
market surged for the 12 months ending March 31,
1999.
Declining interest rates, confident consumers,
healthy corporate capital spending and an expanding
housing industry all helped propel the economy and
fuel a persistent rally in stocks, particularly of
large-capitalization companies. It was an
event-filled period, punctuated by abrupt changes in
investor sentiment and even some signs of a slowing
of growth in the middle of the year. Through it all,
the nation's Gross Domestic Product (the market value
of the goods and services produced) grew. In 1998,
the growth rate was an estimated 3.6%, only slightly
less than the healthy 3.9% growth rate of 1997.
Upon closer examination, the story of the 12-month
period actually was a tale of two economies -- a
strong consumer economy and a weak industrial sector.
Solid employment growth and increased real disposable
personal income translated to a high level of
consumer confidence. Industries linked closely to
consumer behavior -- including autos, housing and
retail -- were quite strong. At the same time, a
number of factors contributed to weakness on the
industrial side of the economy. The economic problems
of some of our key trading partners, combined with
the strength of the U.S. dollar, led to sluggishness
in exports. While the evidence remains mixed, the
worst of these problems for industrial industries may
be ending. The most recent view of the National
Association of Purchasing Managers, for example, is
that manufacturing conditions in the U.S. may have
bottomed.
Inflation, as measured by the Consumer Price Index,
averaged 1.5% in 1998, following a 2.3% rise in 1997.
Lower food and energy prices, combined with cheaper
import prices, contributed significantly to the tame
inflation picture. The low inflation rate came
despite a low unemployment rate of 5% or less for
most of the year. In the past, low unemployment
accompanied by growth in money supply has tended to
fuel inflation. However, that did not happen last
year, as concerns about a worldwide credit crunch,
global recession and deflation acted as a brake on
inflation. The U.S. Federal Reserve Board moved away
from its tight monetary policy stance of early 1998
and cut short-term interest rates three successive
times in the fall, easing the availability of credit
and liquidity. As we entered the second calendar
quarter of 1999, economists were debating what the
next move of the Federal Reserve Board might be.
If the economic story during the period was split
into two sections -- consumer and industrial -- the
year in the stock market was divided into three
periods. For the first seven months, the
Source for all statistical data -- TradeStreet
Investment Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
4
<PAGE> 9
Economic
Overview continued...
market steadily progressed, peaking in July. Then,
the market abruptly reversed course, diving in August
through early October as international concerns --
starting with the devaluation of the Russian ruble --
overwhelmed relatively benign reports about the U.S.
economy. However, the Federal Reserve Board's actions
helped restore confidence, and the market went on to
new highs in late 1998 and early 1999.
The fiscal year also encompassed several different
periods for bond market investors. Earlier in the
year, investor uneasiness about the possibility of a
revival of inflation worried the bond market, and
interest rates tended to rise and bond prices slumped
going into the summer of 1998. That situation changed
dramatically with the Russian economic crisis of
April. Fears about a global economic slowdown drove
investor dollars toward only the highest quality
securities -- principally U.S. Treasuries, and
interest rates fell sharply. This period of investor
anxiety ended in early October, however, as the
Federal Reserve Board's intervention calmed the
markets. For the remainder of the fiscal year,
corporate and mortgage-backed securities -- with
yield spread advantages over U.S. Treasuries --
tended to return to favor.
International economic forces continue to send mixed
signals. In early 1999, we could see scattered signs
of an economic turnaround in Southeast Asia. Japan
was beginning to reform its banking system, and
investors were waiting to see the impact of an
injection of 40 trillion yen into the banking system.
Japan suffered through its worst economic performance
in 50 years during 1998. The key to its economic
rebound will be how quickly the business community,
consumers and investors regain confidence. Worth
watching will be whether Japan's export industry can
grow. Elsewhere, the international scene provided
additional signs of progress. The International
Monetary Fund (IMF) finally received funding from the
U.S. Congress, easing investor concerns. The
devaluation of the real -- the Brazilian
currency -- seemed to be postponed, but Brazil's
government remained under pressure to carry out
needed economic reforms.
But if U.S. investors found reasons for guarded
optimism in some international developments, they
also found sources for concern. China appeared unable
to meet its ambitious growth targets and Hong Kong's
economy remained under pressure. The world continued
to watch to see whether China would feel pressure to
devalue its currency. Meanwhile, the ability of
Russia to pay its bills remained in doubt and the
Russian domestic political situation raised questions
as Foreign Minister Primakov took over day-to-day
decision-making from an ailing Boris Yeltsin.
Our outlook for 1999 calls for a possible slowing,
but not reversal, of the domestic economic expansion.
In light of reports of a slowdown
5
<PAGE> 10
Economic
Overview continued...
in employment growth, a reduction in capital spending
and continued sluggishness in international trade, we
think economic expansion may have peaked. However, we
still see room for continued growth in 1999 at lower
levels than in 1998, perhaps at a rate of between 3%
and 3.5%.
Viewing the domestic stock market in early 1999, the
big question is whether the third quarter of 1998
represented a bottom for earnings and for stock
prices. Given expectations of a slowing of U.S.
economic growth and continued sluggishness in the
global economy, investors are concerned about
corporate earnings expectations for 1999. However, we
do not think the most recent stock market levels
reflected these investor concerns.
In the bond market, we see the potential of a more
stable interest rate climate over the next several
months, with the possibility of less dramatic changes
in investor sentiment than we saw over the past 12
months.
We believe the direction of the markets will depend
greatly on the economy's ability to continue to move
forward at a controlled pace.
C. Thomas Clapp
Chief Equity Investment Officer
TradeStreet Investment Associates, Inc.
March 31, 1999
6
<PAGE> 11
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- 97.5%
ALABAMA -- 2.1%
$ 6,765 Alabama, Housing Finance Authority,
Multi-Family Housing Revenue Refunding,
(Rime Village Apartments - Hoover
Project) Series 1996A, (FNMA Collateral
Agreement),
3.00% 06/15/26**....................... $ 6,765
4,500 Alabama, Housing Finance Authority,
Multi-Family Housing Revenue Refunding,
(Rime Village Apartments - Huntsville
Project) Series 1996B, (FNMA Collateral
Agreement),
3.00% 06/15/26**....................... 4,500
6,000 Alabama, Housing Finance Authority,
Multi-Family Housing Revenue Refunding,
(Turtle Lake Apartments Project) Series
1996F, (AmSouth Bank of Alabama LOC),
3.15% 09/01/23**....................... 6,000
1,475 Birmingham, Alabama, Industrial
Development Board, IDR, (Avondale
Commerce - Phase III Project) Series
1991, (AmSouth Bank N.A. LOC),
3.40% 06/01/00**....................... 1,475
2,800 Columbia, Alabama, Industrial
Development Board, PCR Refunding,
(Alabama Power Company Project) Series
1998, AMT,
3.15% 06/01/28**....................... 2,800
2,700 Gadsen, Alabama, Industrial Development
Board, IDR, (Keystone Foods Corporation
Project) Series 1989, AMT, (Bank of
Scotland LOC),
3.25% 05/01/04**#...................... 2,700
1,150 Gadsen, Alabama, Industrial Development
Board, PCR Refunding, (Alabama Power
Company Project) Series 1994,
3.10% 06/01/15**....................... 1,150
560 Homewood, Alabama, Industrial
Development Board, Revenue Refunding,
(Keebler Company Project) Series 1993,
(Bank of Nova Scotia LOC),
3.10% 11/01/04**....................... 560
9,640 Mobile, Alabama, ASMS Public Educational
Building Authority, Revenue, (Alabama
High School Math and Science Foundation
Project) Series 1997, (Amsouth Bank of
Alabama LOC),
3.15% 07/01/22**....................... 9,640
3,300 Northern Alabama, Pollution Control
Environmental Improvement Authority,
PCR, (Reynolds Metals Company Project)
Series 1985, (Bank of Nova Scotia LOC),
3.10% 12/01/00**....................... 3,300
2,000 Opelika, Alabama, Industrial Development
Board, Industrial Revenue Refunding,
(Flowers Baking Company Project) Series
1995, (SunTrust Bank LOC),
3.10% 12/01/99**#...................... 2,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
ALABAMA -- (CONTINUED)
$12,930 Phenix County, Alabama, Industrial
Development Board, Environmental
Improvement Revenue, (Mead Coated
Board, Inc. Project) Series 1993A, AMT,
(Toronto Dominion Bank LOC),
3.15% 06/01/28**....................... $ 12,930
3,800 Phenix County, Alabama, Industrial
Development Board, Environmental
Improvement Revenue, (Mead Coated
Board, Inc. Project) Series 1996, AMT,
(Hypo Vereinsbank LOC),
3.15% 03/01/31**....................... 3,800
----------
57,620
----------
ALASKA -- 1.7%
16,600 Alaska, Industrial Development and
Export Authority, Exempt Facilities
Revenue, (AMAX Gold, Inc. Project)
Series 1997, AMT, (UBS AG LOC),
3.10% 05/01/09**....................... 16,600
29,550 Valdez, Alaska, Marine Terminal Revenue
Refunding, (ARCO Transportation Alaska,
Inc. Project) Series 1994B, (GTY-AGMT),
3.05% 05/01/31**....................... 29,550
500 Valdez, Alaska, Marine Terminal Revenue
Refunding, (Exxon Pipeline Company
Project) Series 1993A,
3.10% 12/01/33**....................... 500
700 Valdez, Alaska, Marine Terminal Revenue
Refunding, (Exxon Pipeline Company
Project) Series 1993B,
3.10% 12/01/33**....................... 700
----------
47,350
----------
ARIZONA -- 1.2%
7,000 Apache County, Arizona, Industrial
Development Authority, Revenue, (Tucson
Electric Power Company Project) Series
1983A, (Toronto Dominion Bank LOC),
3.05% 12/15/18**....................... 7,000
17,200 Apache County, Arizona, Industrial
Development Authority, Revenue, (Tucson
Electric Power Company Project) Series
1983B, (Bank of New York LOC),
3.05% 12/15/18**....................... 17,200
5,100 Casa Grande, Arizona, Industrial
Development Authority, Revenue
Refunding, (Mayville Metal Products
Project) Series 1998, (Toronto Dominion
Bank LOC),
2.95% 07/01/15**#...................... 5,100
4,200 Goodyear, Arizona, Industrial
Development Authority, IDR, (Walle
Corporation Project) Series 1995, AMT,
(Bank One Kentucky, N.A. LOC),
3.25% 05/01/15**#...................... 4,200
----------
33,500
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 12
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
ARKANSAS -- 0.5%
$ 5,000 Crossett, Arkansas, PCR Refunding,
(Georgia-Pacific Corporation Project)
Series 1998, (SunTrust Bank LOC),
3.10% 08/01/04**....................... $ 5,000
6,300 Little Rock, Arkansas, Metrocentre
District Number 1, Improvement Revenue,
(Little Rock Newspapers, Inc. Project)
Series 1985, (Bank of New York LOC),
3.15% 12/01/25**....................... 6,300
3,250 Lowell, Arkansas, IDR, (Little Rock
Newspapers, Inc. Project) Series 1996,
AMT, (Bank of New York LOC),
3.10% 06/01/31**#...................... 3,250
----------
14,550
----------
CALIFORNIA -- 2.7%
7,500 California, Higher Education Loan
Authority Inc., Student Loan Revenue,
Sr. Lien, Series 1992A-1, (SLMA
Guarantee),
3.65% 04/01/00......................... 7,500
19,000 California, Higher Education Loan
Authority Inc., Student Loan Revenue,
Sr. Lien, Series 1992A-2, (SLMA LOC),
3.80% 04/01/00......................... 19,000
1,400 Los Angeles, California, Regional
Airports Improvement Corporation, Lease
Revenue, (American Airlines, Inc. - Los
Angeles International Project) Series
1984A, (Wachovia Bank of Georgia LOC),
3.10% 12/01/24**....................... 1,400
44,750 Los Angeles, California, Regional
Airports Improvement Corporation, Lease
Revenue, (LAX Two Corporation - Los
Angeles International Airport Project)
Series 1985, (Societe Generale LOC),
3.10% 12/01/25**....................... 44,750
3,500 Los Angeles, California, Regional
Airports Improvement Corporation,
Terminal Facilities Revenue, (LAX Two
Corporation - Los Angeles International
Airport Project) Series 1989, AMT,
(Societe Generale LOC),
3.15% 12/01/25**....................... 3,500
----------
76,150
----------
COLORADO -- 2.7%
5,440 Arapahoe County, Colorado, IDR, (Suntory
Water Group, Inc. Project) Series 1998,
AMT, (Wachovia Bank LOC),
3.15% 05/01/23**#...................... 5,440
13,000 Colorado, Housing Finance Authority,
Multi-Family Housing Revenue, (Grants
Plaza Project) Series 1984A, (Bankers
Trust Company LOC),
3.13% 11/01/09**....................... 13,000
3,500 Denver City and County, Colorado,
Airport Revenue, Series 1992F, AMT,
(Credit Local de France LOC),
3.10% 11/15/25**....................... 3,500
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
COLORADO -- (CONTINUED)
$ 5,000 Denver City and County, Colorado,
Airport Revenue, Series 1992G, AMT,
(Credit Local de France LOC),
3.10% 11/15/25**....................... $ 5,000
5,305 El Paso County, Colorado, Multi-Family
Housing Revenue Refunding, (Briarglen
Apartments Project) Series 1995,
(General Electric Capital Corporation
Guarantee),
3.05% 12/01/24**#...................... 5,305
39,300 Moffat County, Colorado, PCR, (Tri-State
Colorado - Utah Electric Cooperative
Project) Series 1984, (AMBAC Insured,
Societe Generale SBPA),
3.05% 07/01/10**....................... 39,300
3,000 Pitkin County, Colorado, IDR, (Aspen
Skiing Company Project) Series 1984B,
AMT, (First National Bank of Chicago
LOC),
3.25% 04/01/14**....................... 3,000
----------
74,545
----------
DELAWARE -- 3.0%
28,100 Delaware State, Economic Development
Authority, Hospital Billing Revenue,
Series 1985B, (MBIA Insured, Morgan
Stanley SBPA),
3.10% 12/01/15**....................... 28,100
5,700 Delaware State, Economic Development
Authority, Hospital Billing Revenue,
Series 1985C, (MBIA Insured, Morgan
Stanley SBPA),
3.10% 12/01/15**....................... 5,700
12,000 Delaware State, Economic Development
Authority, IDR, (Star Enterprise -
Delaware Clean Power Project) Series
1997A, AMT, (Canadian Imperial Bank
LOC),
3.15% 08/01/29**....................... 12,000
10,000 Delaware State, Economic Development
Authority, IDR, (Star Enterprise -
Delaware Clean Power Project) Series
1997B, AMT, (Canadian Imperial Bank
LOC),
3.00% 08/01/29**....................... 10,000
17,300 Delaware State, Economic Development
Authority, IDR, (Star Enterprise -
Delaware Clean Power Project) Series
1997C, AMT, (Canadian Imperial Bank
LOC),
3.05% 08/01/29**....................... 17,300
10,550 Delaware State, Economic Development
Authority, Revenue, (Hospital Billing
Project) Series 1985, (MBIA Insured,
Morgan Stanley SBPA),
3.10% 12/01/15**....................... 10,550
----------
83,650
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 13
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
DISTRICT OF COLUMBIA -- 0.4%
$10,000 District of Columbia, TRAN, GO, Series
1998B, (Morgan Guaranty Trust LOC),
3.75% 09/30/99......................... $ 10,031
----------
FLORIDA -- 3.4%
12,810 Broward County, Florida, Housing Finance
Authority, Multi-Family Housing Revenue
Refunding, (Fisherman's Landing Coconut
Project) Series 1990, (Continental
Casualty Surety Bond),
3.05% 11/01/07**....................... 12,810
4,365 Dade County, Florida, Industrial
Development Authority, IDR, (Phase II
Furniture Corporation Project) Series
1994, AMT, (SunTrust Bank of Central
Florida LOC),
3.20% 11/01/14**#...................... 4,365
6,500 Dade County, Florida, Special Revenue,
(Youth Fair and Exposition Project)
Series 1995, (SunTrust Bank Central
LOC),
3.10% 08/01/15**....................... 6,500
14,999 Florida State, Board of Education,
Capital Outlay, Series 1996BTP-179,
(Toronto Dominion SBPA),
3.20% 06/01/01**!!..................... 14,999
14,800 Florida, Housing Finance Agency, Multi-
Family Housing Revenue Refunding,
(Clear Lake Apartments Project) Series
1994D, (Continental Casualty Surety
Bond),
3.05% 01/01/34**....................... 14,800
5,000 Florida, Housing Finance Agency, Multi-
Family Housing Revenue, (Lakeside South
Associates Apartments Project) Series
1988B, (Bankers Trust Company LOC),
3.13% 10/01/06**#...................... 5,000
7,500 Indian River County, Florida, Hospital
District Revenue, (Indian River
Memorial Hospital Project) Series 1985,
(KBC Bank N.V. LOC),
3.00% 10/01/15**....................... 7,500
3,645 Manatee County, Florida, Housing Finance
Authority, Multi-Family Mortgage
Revenue, (Hampton Court Project) Series
1989A, (First Union National Bank LOC),
3.05% 06/01/07**#...................... 3,645
12,500 Miami, Florida, Health Facilities
Authority, Health Facilities Revenue,
(Miami Jewish Home and Hospital
Project) Series 1996, (SunTrust Bank
Miami LOC),
3.10% 12/01/16**#...................... 12,500
1,500 Palm Beach County, Florida, Revenue,
(Norton Gallery School of Art Project)
Series 1995, (Northern Trust Company
LOC),
2.90% 05/01/25**....................... 1,500
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
FLORIDA -- (CONTINUED)
$ 6,000 Polk County, Florida, Industrial
Development Authority, Revenue,
(Farmland Hydro, LP Project) Series
1998, AMT, (Raboland Nederland LOC),
3.10% 02/01/29**....................... $ 6,000
2,950 St. Lucie County, Florida, IDR
Refunding, (Florida Convalescent
Centers Project) Series 1988, (Toronto
Dominion Bank LOC),
3.05% 01/01/11**....................... 2,950
1,900 University Athletic Association, Inc.,
Florida, Capital Improvement Revenue,
(University of Florida Project) Series
1999, (SunTrust Bank of Central Florida
LOC),
3.15% 02/01/20**....................... 1,900
----------
94,469
----------
GEORGIA -- 10.8%
10,000 Albany-Dougherty, Georgia, Payroll
Development Authority, PCR Refunding,
(Philip Morris Companies, Inc. Project)
Series 1992,
3.10% 10/01/05**#...................... 10,000
2,040 Bartow County, Georgia, Development
Authority, PCR, (Georgia Power
Company - Bowden Project) Series 1998,
3.10% 03/01/24**....................... 2,040
17,500 Burke County, Georgia, Development
Authority, PCR, (Georgia Power
Company - Vogtle Project) Series
1994-5,
3.05% 07/01/24**....................... 17,500
5,800 Burke County, Georgia, Development
Authority, PCR, (Georgia Power
Company - Vogtle Project) Series 1996,
3.10% 09/01/26**....................... 5,800
7,900 Burke County, Georgia, Development
Authority, PCR, (Georgia Power Company
Plant - Vogtle Project) Series 1995-3,
3.10% 09/01/25**....................... 7,900
7,750 Clayton County, Georgia, Hospital
Authority, Revenue Anticipation
Certificates, (Southern Regional
Medical Center Project) Series 1998B,
(SunTrust Bank LOC),
3.10% 08/01/19**#...................... 7,750
6,385 Clayton County, Georgia, Housing
Authority, Multi-Family Housing Revenue
Refunding, (Chateau Forest Apartments
Project) Series 1990E, (FSA Insured,
Societe Generale SBPA),
3.00% 01/01/21**....................... 6,385
3,380 Clayton County, Georgia, Housing
Authority, Multi-Family Housing Revenue
Refunding, (Village Rouge Apartments
Project) Series 1990C, (FSA Insured,
Societe Generale SBPA),
3.00% 01/01/21**....................... 3,380
2,215 Cobb County, Georgia, IDR, (Datagraphic
Inc. Project) Series 1990, AMT,
(SouthTrust Bank of Alabama LOC),
3.35% 05/01/05**....................... 2,215
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 14
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
GEORGIA -- (CONTINUED)
$ 3,600 Cobb County, Georgia, Residential Care
Facilities for the Elderly Authority,
(North Georgia Presbyterian Homes, Inc.
Project) Series 1993, (SunTrust Bank
LOC),
3.10% 08/01/18**#...................... $ 3,600
17,330 Cobb-Marietta, Georgia, Coliseum and
Exhibit Hall Authority, Revenue, Jr.
Lien, Series 1996A, (MBIA Insured, CIBC
SBPA),
3.00% 10/01/26**#...................... 17,330
3,260 College Park, Georgia, Business and
Industrial Development Authority,
Revenue Refunding, (College Park
Association Project) Series 1997, (Bank
of New York LOC),
3.00% 06/01/14**#...................... 3,260
12,415 Columbia County, Georgia, Residential
Care Facilities for the Elderly
Authority, Revenue, (Augusta
Residential Center on Aging Project)
Series 1994, (SunTrust Bank LOC),
3.10% 01/01/21**#...................... 12,415
2,250 Columbus, Georgia, Housing Authority,
Multi-Family Housing Revenue Refunding,
(Quail Ridge Project) Series 1988,
(Columbus Bank & Trust LOC),
3.38% 02/01/05**#...................... 2,250
3,330 Columbus, Georgia, Industrial and Port
Development Commission, Revenue
Refunding, (Parisian, Inc. Project)
Series 1995, (Columbus Bank & Trust
LOC),
3.40% 04/01/07**#...................... 3,330
7,600 Dade County, Georgia, Industrial
Development Authority, Industrial
Revenue, (Bull Moose Tube Company
Project) Series 1997, AMT, (Bank of
Nova Scotia LOC),
3.00% 12/01/12**#...................... 7,600
4,280 De Kalb County, Georgia, Development
Authority, Industrial Educational
Revenue, (Catholic School Properties,
Inc. Project) Series 1999, (Wachovia
Bank, N.A.),
3.05% 04/01/24**....................... 4,280
7,430 De Kalb County, Georgia, Development
Authority, Revenue, (American Cancer
Society, Inc.) Series 1988, (SunTrust
Bank LOC),
3.10% 05/01/13**#...................... 7,430
3,460 De Kalb County, Georgia, Hospital
Authority, Revenue Anticipation
Certificates, (De Kalb Medical Center,
Inc. Project) Series 1994, (SunTrust
Bank LOC),
3.10% 09/01/09**#...................... 3,460
2,800 De Kalb County, Georgia, Housing
Authority, Multi-Family Housing Revenue
Refunding, (Camden Brook Project)
Series 1995, (FNMA Collateral
Agreement),
3.05% 06/15/25**....................... 2,800
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
GEORGIA -- (CONTINUED)
$14,935 De Kalb County, Georgia, Housing
Authority, Multi-Family Housing Revenue
Refunding, (Wood Terrace Apartments
Project) Series 1995, (FNMA Collateral
Agreement),
3.00% 12/15/15**....................... $ 14,935
5,430 De Kalb County, Georgia, Housing
Authority, Multi-Family Housing
Revenue, (Haystack Apartments Project)
Series 1995, AMT, (General Electric
Capital Corporation LOC),
3.20% 12/01/20**#...................... 5,430
6,875 De Kalb County, Georgia, Housing
Authority, Multi-Family Housing
Revenue, (Stone Mill Run Apartments
Project) Series 1995A, AMT, (First
Tennessee Bank, N.A. LOC),
3.20% 08/01/27**....................... 6,875
5,400 De Kalb County, Georgia, Industrial
Development Authority, IDR, (A.G.
Rhodes Home Inc. Project) Series 1996,
(SunTrust Bank LOC),
3.10% 03/01/21**#...................... 5,400
5,250 De Kalb County, Georgia, Industrial
Development Authority, IDR, (Radiation
Sterilizers Inc. Project) Series 1985,
(Comerica Bank LOC),
3.00% 03/01/05**#...................... 5,250
5,000 Floyd County, Georgia, Development
Authority, University and College
Improvement, Revenue, (Berry College,
Inc. Project) Series 1999, (Sun Trust
Bank LOC),
3.10% 03/01/24**....................... 5,000
5,300 Fulco, Georgia, Hospital Authority,
Revenue Anticipation Certificates,
(Piedmont Hospital Project) Series
1992, (SunTrust Bank LOC),
3.10% 02/01/07**#...................... 5,300
4,500 Fulton County, Georgia, Development
Authority, Revenue, (Alfred/Adele Davis
Academy Project) Series 1998, (SunTrust
Bank LOC),
3.10% 10/01/18**#...................... 4,500
12,500 Fulton County, Georgia, Development
Authority, Revenue, (Robert W. Woodruff
Arts Center Project) Series 1993,
(Wachovia Bank of Georgia LOC),
3.15% 08/01/18**#...................... 12,500
3,000 Fulton County, Georgia, Development
Authority, Revenue, (Spelman College
Project) Series 1996, (SunTrust Bank
LOC),
3.10% 06/01/16**....................... 3,000
2,400 Greene County, Georgia, Industrial
Development Authority, IDR,
(Chipman-Union, Inc. Project) Series
1995A, AMT, (SunTrust Bank LOC),
3.20% 03/01/05**#...................... 2,400
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 15
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
GEORGIA -- (CONTINUED)
$ 7,500 Gwinnett County, Georgia, Industrial
Development Authority, IDR, (United
Stationers Company Project) Series
1990, (PNC Bank of Ohio, N.A. LOC),
3.15% 12/31/02**#...................... $ 7,500
5,800 Gwinnett County, Georgia, Industrial
Development Authority, IDR, (Volvo of
America Corporation Project) Series
1986, AMT, (Union Bank of Switzerland
LOC),
3.20% 08/01/06**....................... 5,800
3,000 Henry County, Georgia, Development
Authority, Revenue Refunding,
(Georgia-Pacific Corporation Project)
Series 1993, (SunTrust Bank LOC),
3.10% 05/01/04**#...................... 3,000
35,000 Municipal Electric Authority, Georgia,
Subordinated Revenue, (Georgia MEAG
Project Number One) Series 1994E,
(ABN-AMRO Bank N.V. LOC),
2.85% 01/01/26**....................... 35,000
1,000 Newton County, Georgia, Industrial
Development Authority, IDR, (H.B.
Fuller Company Project) Series 1984,
(Commerzbank A.G. LOC),
3.15% 12/01/04**....................... 1,000
9,400 Putnam County, Georgia, Development
Authority, PCR, (Georgia Power Company
Plant Project) Series 1997-2,
3.10% 09/01/29**....................... 9,400
7,900 Smyrna, Georgia, Housing Authority,
Multi-Family Housing Revenue, (Gardens
of Post Village Apartment Project)
Series 1996, (FNMA Collateral
Agreement),
3.00% 06/01/25**#...................... 7,900
16,300 Smyrna, Georgia, Housing Authority,
Multi-Family Housing Revenue, (Post
Apartment Homes-Post Valley, LP
Project) Series 1995, (FNMA Collateral
Agreement),
3.00% 06/01/25**....................... 16,300
4,000 Tallapoosa, Georgia, Development
Authority, IDR Refunding, (U.S. Can
Company Project) Series 1994, (Harris
Trust & Savings Bank LOC),
2.95% 02/01/15**#...................... 4,000
5,000 Thomaston-Upson County, Georgia, IDR,
Refunding, (Quad Graphic - Thomaston,
Inc. Project) Series 1990, (First Union
National Bank LOC),
3.10% 04/01/00**#...................... 5,000
5,550 Worth County, Georgia, Industrial
Development Authority, Revenue
Refunding, (Seabrook Enterprises Inc.
Project) Series 1996A, (SunTrust Bank
LOC),
3.10% 08/01/23**#...................... 5,550
----------
301,765
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
HAWAII -- 0.3%
$ 8,500 Hawaii State, Housing Finance and
Development Corporation, Rental Housing
System Revenue Bonds, Series 1989A,
(Banque Nationale de Paris LOC),
3.13% 07/01/24**....................... $ 8,500
----------
IDAHO -- 0.8%
22,275 Idaho, Housing and Finance Association,
Series 1998PT-173, AMT,
3.12% 07/01/29**#...................... 22,275
----------
ILLINOIS -- 16.5%
2,600 Chicago, Illinois, Airport Special
Facilities Revenue, (Centerpoint O'Hare
Project) Series 1997, (First National
Bank Chicago LOC),
3.05% 09/01/32**#...................... 2,600
5,855 Chicago, Illinois, IDR, (Eli's Chicago's
Finest Inc. Project) Series 1996, AMT,
(U.S. Bank, N.A. LOC),
3.25% 11/01/26**#...................... 5,855
1,300 Chicago, Illinois, O'Hare International
Airport Authority, Industrial Revenue,
(American Airlines, Inc. Project)
Series 1983D, (Royal Bank of Canada
LOC),
3.10% 12/01/17**....................... 1,300
3,100 Chicago, Illinois, O'Hare International
Airport Revenue, (American Airlines,
Inc. Project) Series 1983A, (Credit
Suisse First Boston LOC),
3.10% 12/01/17**....................... 3,100
13,400 Chicago, Illinois, O'Hare International
Airport Revenue, (General Airport
Project) Second Lien, Series 1984A,
(Societe Generale LOC),
3.05% 01/01/15**....................... 13,400
6,170 Chicago, Illinois, O'Hare International
Airport Revenue, (General Airport
Project) Second Lien, Series 1984B,
(Societe Generale LOC),
3.05% 01/01/15**....................... 6,170
7,200 Chicago, Illinois, O'Hare International
Airport Revenue, (General Airport
Project) Second Lien, Series 1994C,
(Societe Generale LOC),
3.00% 01/01/18**....................... 7,200
1,800 Illinois State, Development Finance
Authority, Economic Development
Revenue, (Addison 450 LP Project)
Series 1989, AMT, (American National
Bank & Trust Company LOC),
3.10% 12/01/09**....................... 1,800
9,000 Illinois State, Development Finance
Authority, Economic Development
Revenue, (Roosevelt University Project)
Series 1995, (American National Bank &
Trust Company LOC),
3.00% 04/01/25**....................... 9,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 16
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
ILLINOIS -- (CONTINUED)
$ 4,320 Illinois State, Development Finance
Authority, Revenue, (Chicago Academy of
Sciences Project) Series 1997,
(American National Bank & Trust LOC),
3.00% 01/01/31**....................... $ 4,320
700 Illinois State, Educational Facilities
Authority, Revenue, (Chicago Historical
Society Project) Series 1985, (American
National Bank & Trust Company LOC),
2.95% 12/01/25**#...................... 700
1,200 Illinois State, Health Facilities
Authority, Revenue, (Central Health and
Northwest Community Hospital Project)
Series 1985B, (Harris Trust & Savings
Bank LOC),
3.15% 10/01/15**#...................... 1,200
5,300 Illinois State, Health Facilities
Authority, Revenue, (Childrens Memorial
Hospital Project) Series 1985B, (First
National Bank Chicago LOC),
2.95% 11/01/15**....................... 5,300
7,000 Illinois State, Health Facilities
Authority, Revenue, (Evanston Hospital
Corporation Project) Series 1985B,
3.55% 08/16/99**#...................... 7,000
45,400 Illinois State, Housing Development
Authority, Housing Revenue, (Illinois
Center Apartments Project) Series 1985,
(Met Life Guarantee),
3.20% 01/01/08**#...................... 45,400
2,315 Illinois, Development Finance Authority,
IDR Refunding, (St. Xavier University
Project) Series 1992, (American
National Bank & Trust LOC),
3.00% 10/01/12**....................... 2,315
3,830 Illinois, Development Finance Authority,
IDR, (Randolph Pickle Corporation
Project) Series 1992, AMT, (American
National Bank & Trust Company LOC),
3.20% 06/01/12**....................... 3,830
28,000 Illinois, Development Finance Authority,
PCR Refunding, (Commonwealth Edison
Company Project) Series 1994B,
(ABN-AMRO Bank N.V. LOC),
2.90% 10/15/14**#...................... 28,000
9,100 Illinois, Development Finance Authority,
PCR Refunding, (Commonwealth Edison
Company Project) Series 1994C,
(ABN-AMRO Bank N.V. LOC),
3.05% 03/01/09**....................... 9,100
26,100 Illinois, Development Finance Authority,
Revenue, (Chicago Symphony
Orchestra-Orchestral Association
Project) Series 1994, (Northern Trust
Company LOC),
2.95% 12/01/28**....................... 26,100
30,300 Illinois, Development Finance Authority,
Revenue, (Lyric Opera of Chicago
Project) Series 1994, (Northern Trust
Company LOC, NBD Bank LOC, Harris Trust
& Savings Bank LOC, Caisse Nationale de
Credit Agricole LOC),
2.90% 12/01/28**....................... 30,300
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
ILLINOIS -- (CONTINUED)
$ 5,000 Illinois, Development Finance Authority,
Revenue, (Presbyterian Home Lake Forest
Project) Series 1996A, (La Salle
National Bank LOC),
3.00% 10/01/31**....................... $ 5,000
8,900 Illinois, Educational Facilities
Authority, Revenue, (Arts Club of
Chicago Project) Series 1996, (Northern
Trust Company LOC),
2.95% 01/01/26**....................... 8,900
4,000 Illinois, Educational Facilities
Authority, Revenue, (DePaul University
Project) Series 1992CP-1, (Northern
Trust LOC),
2.95% 04/01/26**....................... 4,000
29,000 Illinois, Educational Facilities
Authority, Revenue, (Field Museum of
Natural History Project) Series 1998,
(Northern Trust Company LOC),
2.95% 11/01/32**....................... 29,000
14,500 Illinois, Educational Facilities
Authority, Revenue, (Illinois Institute
of Technology) Series 1990A, (Northern
Trust LOC, Harris Trust & Savings Bank
LOC, NBD Bank N.A. LOC),
3.00% 09/01/14**....................... 14,500
6,000 Illinois, Educational Facilities
Authority, Revenue, (Museum of Science
and Industry Project) Series 1992,
(First National Bank of Chicago LOC),
2.95% 10/01/26**....................... 6,000
11,090 Illinois, Educational Facilities
Authority, Revenue, (University Pooled
Financing Program) Series 1985, (FGIC
Insured, First National Bank of Chicago
SBPA),
2.95% 12/01/05**#...................... 11,090
11,000 Illinois, Health Facilities Authority,
Revenue, (Evanston Hospital Corporation
Project) Series 1996,
3.70% 07/15/99**#...................... 11,000
5,000 Illinois, Health Facilities Authority,
Revenue, (Gottlieb Health Resources,
Inc. Project) Series 1994, (Harris
Trust & Savings Bank LOC),
2.95% 11/15/24**....................... 5,000
8,000 Illinois, Health Facilities Authority,
Revenue, (Revolving Fund Pooled
Project) Series 1985C, (First National
Bank of Chicago LOC),
2.95% 08/01/15**....................... 8,000
10,050 Illinois, Health Facilities Authority,
Revenue, (Sacramento Development
Association - Park Plaza Center
Project) Series 1996, (La Salle
National Bank LOC),
2.95% 09/15/20**....................... 10,050
7,100 Illinois, Health Facilities Authority,
Revenue, (The Streeterville Corporation
Project) Series 1994, (First National
Bank of Chicago LOC),
2.95% 08/15/24**....................... 7,100
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 17
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
ILLINOIS -- (CONTINUED)
$ 7,000 Jackson-Union County, Illinois, Regional
District, Port Facilities Revenue
Refunding, (Enron Transportation
Services Project) Series 1994, (First
Union National Bank LOC),
3.13% 04/01/24**#...................... $ 7,000
13,700 Kane County, Illinois, Educational
Facilities Revenue, (Glenwood School
for Boys Project) Series 1993, (Harris
Trust & Savings Bank LOC),
2.95% 02/01/28**....................... 13,700
15,000 Lisle, Illinois, Multi-Family Housing
Revenue, (Ashley of Lisle Project)
Series 1987, (La Salle National Bank
LOC),
3.10% 12/15/25**....................... 15,000
8,000 Lombard, Illinois, Multi-Family Housing
Revenue, (Clover Creek Apartments
Project) Series 1985, (Continental
Casualty Surety Bond),
3.55% 12/15/99**....................... 8,000
44,535 Metropolitan Pier and Exposition
Authority, Illinois, Dedicated Special
Tax Revenue, (McCormick Place Project)
Series 1998PT-1030, (AMBAC Insured,
Merrill Lynch SBPA),
3.07% 06/15/27**#...................... 44,535
9,200 Orland Park, Illinois, IDR, (Panduit
Corporation Project) Series 1996, AMT,
(Wachovia Bank of Georgia LOC),
3.05% 04/01/31**#...................... 9,200
3,700 Palos Hills, Illinois, Multi-Family
Housing Revenue, (Green Oaks Project)
Series 1998, AMT, (La Salle National
Bank LOC),
3.09% 08/01/29**#...................... 3,700
7,000 Quincy, Illinois, Revenue, (Quincy
University Project) Series 1997,
(Allied Irish Bank, PLC LOC),
3.10% 06/01/21**....................... 7,000
7,195 Richton Park, Illinois, IDR, (Sinter
Metals Inc. Project) Series 1996, AMT,
(Mellon Bank, N.A. LOC),
3.20% 04/01/16**#...................... 7,195
7,600 Sauget, Illinois, GO, Series 1997,
(Credit Communal de Belgique LOC),
2.95% 02/01/16**....................... 7,600
1,400 Southwestern Illinois, Development
Authority, IDR, (Robinson Steel
Company, Inc. Project) Series 1991,
AMT, (American National Bank & Trust
LOC),
3.10% 12/01/06**....................... 1,400
5,000 Woodford County, Illinois, Industrial
Development Authority, IDR, (Parsons
Company, Inc. Project) Series 1998,
AMT, (Bank One Illinois, N.A. LOC),
3.20% 03/01/13**#...................... 5,000
----------
462,960
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
INDIANA -- 2.6%
$ 505 Evansville, Indiana, IDR Refunding,
(Keebler Company Project) Series 1993,
(Bank of Nova Scotia LOC),
3.10% 06/01/04**....................... $ 505
5,000 Fort Wayne, Indiana, Economic
Development Revenue Refunding,
(Georgetown Place Venture Project)
Series 1987, (Federal Home Loan Bank
LOC),
3.00% 12/01/15**#...................... 5,000
3,495 Hendricks County, Indiana, Redevelopment
Commission, Tax Increment Revenue,
(Heartlands Crossing Project) Series
1997A, (Bank One Indiana, N.A. LOC),
3.10% 01/01/22**#...................... 3,495
14,900 Indiana State, Development Finance
Authority, Economic Development
Educational Facilities Revenue,
(Indiana Historical Society Project)
Series 1997, (NBD Bank LOC),
2.95% 08/01/31**#...................... 14,900
1,300 Indiana State, Development Finance
Authority, Economic Development
Revenue, (Fischer Enterprises, Ltd.
Project) Series 1991, (PNC Bank, N.A.
LOC),
3.25% 11/01/01**#...................... 1,300
2,000 Indiana State, Development Finance
Authority, Economic Development
Revenue, (Walker-Williams Lumber
Project) Series 1994, AMT, (Columbus
Bank & Trust LOC),
3.40% 01/01/09**#...................... 2,000
3,000 Indiana State, Development Finance
Authority, Exempt Facilities Revenue,
(Mid-America Energy Resources, Inc.
Project) Series 1995, AMT, (ABN-AMRO
Bank N.V. LOC),
3.10% 09/01/30**....................... 3,000
9,700 Indiana State, Development Finance
Authority, IDR, (Indiana University
Foundation Project) Series 1998,
(National City Bank LOC),
3.10% 08/01/18**#...................... 9,700
1,050 Indiana State, Health Facilities
Financing Authority, Capital Access
Designated Pool Revenue, Series 1997,
(Comerica Bank LOC),
2.95% 01/01/12**....................... 1,050
8,500 Indiana State, Hospital Equipment
Financing Authority, Revenue, Series
1985A, (MBIA Insured, NBD Bank SBPA),
2.95% 12/01/15**#...................... 8,500
4,900 Indianapolis, Indiana, Economic
Development Revenue, (Edgcomb Metals
Company Project) Series 1983, (Banque
Nationale de Paris LOC),
2.95% 12/01/08**....................... 4,900
3,000 Indianapolis, Indiana, Multi-Family
Housing Revenue, (El-Beulah Retirement
Village Project) Series 1996, (NBD
Bank, N.A. LOC),
3.10% 03/01/21**#...................... 3,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 18
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
INDIANA -- (CONTINUED)
$ 2,900 Rockport, Indiana, PCR, (Indiana and
Michigan Electric Company Project)
Series 1985A, (Union Bank of
Switzerland LOC),
3.05% 08/01/14**#...................... $ 2,900
5,380 St. Joseph County, Indiana, Economic
Development Revenue, (Brothers of the
Holy Cross Project) Series 1997, (Key
Bank N.A. LOC),
3.00% 09/01/17**#...................... 5,380
6,600 Terre Haute, Indiana, Economic
Development Revenue, (First Financial
Corporation Project) Series 1985,
(First National Bank of Chicago LOC),
2.95% 12/01/15**....................... 6,600
----------
72,230
----------
IOWA -- 0.3%
5,000 Davenport, Iowa, Community School
District, Anticipation Warrants, State
Aid Withholding GO, Series 1998,
3.95% 07/01/99......................... 5,002
2,000 Iowa State, Finance Authority, IDR,
(Sauer-Sundstrand Company Project)
Series 1996, AMT, (Hypo Vereinsbank
LOC),
3.00% 05/01/26**#...................... 2,000
----------
7,002
----------
KANSAS -- 1.8%
9,600 Kansas State, Development Finance
Authority, Exempt Facilities Revenue,
(Seaboard Project) Series 1995A, AMT,
(Bank of New York LOC),
3.20% 12/01/25**#...................... 9,600
1,900 Kansas, Industrial Development Finance
Authority, Revenue, (PQ Corporation
Project) Series 1988, (Bank of New York
LOC),
3.15% 08/01/15**....................... 1,900
5,524 Manhattan, Kansas, Temporary Notes, GO,
Series 1998B-20,
3.50% 06/15/99......................... 5,527
32,350 Olathe, Kansas, Educational Facilities
Revenue, (Kansas Independent College
Association Project) Series 1989A, (Key
Bank, N.A. LOC),
2.95% 07/01/24**....................... 32,350
----------
49,377
----------
KENTUCKY -- 2.0%
11,015 Georgetown, Kentucky, Educational
Institution Improvement Revenue,
(Georgetown College Project) Series
1997B, (Bank One Kentucky N.A. LOC),
3.10% 12/01/17**#...................... 11,015
1,300 Hopkinsville, Kentucky, Industrial
Building Revenue, (Brazeway, Inc.
Project) Series 1994, AMT, (NBD
Michigan LOC),
3.20% 06/01/04**#...................... 1,300
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
KENTUCKY -- (CONTINUED)
$ 3,500 Lebanon, Kentucky, IDR, (Wallace
Computer Services, Inc. Project) Series
1994, AMT, (Wachovia Bank of Georgia
LOC),
3.05% 06/01/19**#...................... $ 3,500
5,600 Lexington-Fayette County, Kentucky,
Urban County Airport Corporation,
Revenue, (First Mortgage Project)
Series 1994A, AMT, (Credit Local de
France LOC),
3.20% 04/01/24**....................... 5,600
2,900 Lexington-Fayette County, Kentucky,
Urban County Airport Corporation,
Revenue, (First Mortgage Project)
Series 1994B, AMT, (Credit Local de
France LOC),
3.20% 04/01/24**....................... 2,900
4,880 Louisville and Jefferson County,
Kentucky, Convention Center GO, Series
1996PT-69, (FSA Insured, Merrill Lynch
SBPA),
3.07% 07/01/24**#...................... 4,880
6,250 Louisville and Jefferson County,
Kentucky, Regional Airport Authority,
Airport Systems Revenue, BAN, Series
1997AA-1, AMT, (National City Bank
Kentucky LOC),
3.20% 06/30/02**....................... 6,250
5,600 Mason County, Kentucky, PCR, (East
Kentucky Power National Rural
Cooperative Project) Series 1984B-1,
(CFC Insured),
3.05% 10/15/14**....................... 5,600
8,750 Mason County, Kentucky, PCR, (East
Kentucky Power National Rural
Cooperative Project) Series 1984B-2,
(CFC Insured),
3.05% 10/15/14**....................... 8,750
6,000 Middletown, Kentucky, Revenue,
(Christian Academy Louisville Project)
Series 1997, (Bank One of Kentucky,
N.A. LOC),
3.10% 07/01/22**#...................... 6,000
----------
55,795
----------
LOUISIANA -- 3.5%
6,550 Caddo Parish, Louisiana, Industrial
Development Board, Revenue, (Frymaster
Corporation Project) Series 1987,
(Chase Manhattan Bank LOC),
3.00% 01/01/03**....................... 6,550
23,300 Jefferson Parish, Louisiana, Hospital
Service District Number 001, Revenue
Refunding, (West Jefferson Medical
Center Project) Series 1996, (Rabobank
Nederland LOC),
3.00% 01/01/26**....................... 23,300
21,225 Louisiana Public Facilities Authority,
PCR, (Ciba-Geigy Corporation Project)
Series 1985, (Union Bank of Switzerland
LOC),
3.00% 12/01/03**....................... 21,225
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 19
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
LOUISIANA -- (CONTINUED)
$ 1,000 Louisiana State, Offshore Terminal
Authority, Revenue Refunding, (Loop,
Inc. Project) Series 1992A, (UBS AG
LOC),
3.15% 09/01/08**....................... $ 1,000
25,000 Louisiana State, Public Facilities
Authority, Hospital Revenue, (Willis-
Knighton Medical Center Project) Series
1997, (AMBAC Insured, Credit Local de
France SBPA),
3.10% 09/01/27**....................... 25,000
9,000 South Louisiana, Port Commission,
Facilities Port Revenue, (Holnam, Inc.
Project) Series 1997, AMT, (ABN-AMRO
Bank N.V. LOC),
3.10% 01/01/27**#...................... 9,000
5,800 St. Charles Parish, Louisiana, PCR
Refunding, (Shell Oil Company Project)
Series 1995,
3.10% 10/01/25**....................... 5,800
5,200 Upper Pontalba, Louisiana, Building
Restoration Corporation, Revenue
Refunding, (Upper Pontalba Building
Project) Series 1996, (Bank One
Louisiana LOC),
3.10% 12/01/16**....................... 5,200
----------
97,075
----------
MARYLAND -- 3.0%
70,700 Baltimore, Maryland, Industrial
Development Authority, IDR, (Baltimore
Capital Acquisition Project) Series
1986, (Bayerische Landesbank LOC),
2.95% 08/01/16**....................... 70,701
3,300 Baltimore, Maryland, Port Facilities
Revenue, (Occidental Petroleum
Corporation Project) Series 1981,
(Wachovia Bank LOC),
3.00% 10/14/11**....................... 3,300
6,900 Maryland State, Industrial Development
Finance Authority, Economic Development
Revenue, (General Binding Corporation
Project) Series 1996, AMT, (Harris
Trust & Savings Bank LOC),
3.05% 03/01/26**#...................... 6,900
2,300 Maryland State, Industrial Development
Finance Authority, Revenue, (Rock-
Tennessee Converting Company Project)
Series 1994, AMT, (SunTrust Bank LOC),
3.20% 05/01/06**#...................... 2,300
----------
83,201
----------
MASSACHUSETTS -- 0.1%
4,000 Massachusetts State, Industrial Finance
Authority, IDR, (Sundstrand Corporation
Project) Series 1992, AMT, (Union Bank
of Switzerland LOC),
3.10% 05/01/32**....................... 4,000
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MICHIGAN -- 1.4%
$ 7,500 Grand Rapids, Michigan, Economic
Development Corporation, IDR Refunding,
(Baker, Knapp and Tubbs, Inc. Project)
Series 1992, (Wachovia Bank & Trust
LOC),
3.05% 06/01/12**#...................... $ 7,500
14,800 Green Lake Township, Michigan, Economic
Development Corporation, Revenue,
(Interlochen Center for the Arts
Project) Series 1997, (La Salle
National Bank LOC),
2.95% 06/01/27**#...................... 14,800
3,055 Jackson County, Michigan, Economic
Development Corporation, IDR Refunding,
(Jackson Associates, LLC Project)
Series 1994, (Bank One of Dayton, N.A.
LOC),
3.10% 10/01/14**#...................... 3,055
7,800 Michigan State, Hospital Finance
Authority, Revenue, (St. Mary's of
Livonia Hospital Project) Series 1996A,
(Comerica Bank LOC),
3.00% 07/01/17**....................... 7,800
1,000 Michigan State, Job Development
Authority, Revenue, (Gordon Food
Service Inc. Project) Series 1985,
(Rabobank Nederland LOC),
3.00% 08/01/15**....................... 1,000
900 University of Michigan, Board of
Regents, Revenue, (University of
Michigan Hospitals Project) Series
1995A,
3.15% 12/01/27**....................... 900
1,800 University of Michigan, Hospital Revenue
Refunding, (University of Michigan
Hospitals Project) Series 1992A,
3.15% 12/01/19**....................... 1,800
1,425 University of Michigan, Hospital
Revenue, (Medical Service Plans
Project) Series 1995A,
3.15% 12/01/27**....................... 1,425
1,000 University of Michigan, Hospital
Revenue, (Medical Service Plans
Project) Series 1998A-1,
3.15% 12/01/21**....................... 1,000
----------
39,280
----------
MINNESOTA -- 0.4%
5,780 Minneapolis, Minnesota, Community
Development Agency, Revenue, (Arena
Acquisition Project) Series 1995A,
(U.S. Bank N.A. LOC),
3.05% 10/01/24**....................... 5,780
6,160 Minneapolis, Minnesota, Housing
Development Revenue Refunding,
(Symphony Place Project) Series 1988,
(American National Bank & Trust LOC),
3.00% 12/01/14**....................... 6,160
----------
11,940
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 20
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
MISSISSIPPI -- 2.0%
$39,180 Mississippi State, GO, Putters 103,
Series 1998B, (FGIC Insured, Bank of
New York SBPA),
3.10% 11/01/11**#...................... $ 39,180
2,100 Mississippi, Business Finance
Corporation, (Trilogy Communications
Project) Series 1995, AMT, (First Union
National Bank LOC),
3.30% 06/01/05**#...................... 2,100
2,200 Mississippi, Business Finance
Corporation, IDR, (Choctaw Maid Farms,
Inc. Project) Series 1995, AMT,
(Rabobank Nederland LOC),
3.20% 03/01/10**#...................... 2,200
11,300 Perry County, Mississippi, PCR
Refunding, (Leaf River Forest Products
Project) Series 1989, (Morgan Guaranty
Trust LOC),
3.10% 10/01/12**#...................... 11,300
----------
54,780
----------
MISSOURI -- 6.0%
5,000 Berkeley, Missouri, Industrial
Development Authority, IDR, (Flight
Safety International, Inc. Project)
Series 1984, (Wachovia Bank LOC),
3.05% 09/01/04**#...................... 5,000
5,000 Berkeley, Missouri, Industrial
Development Authority, Revenue
Refunding, (Wetterau, Inc. Project)
Series 1987, (PNC Bank, N.A. LOC),
3.05% 07/01/08**#...................... 5,000
4,100 Columbia, Missouri, Special Obligation
Revenue, Series 1988A, (Toronto
Dominion Bank LOC),
2.95% 06/01/08**....................... 4,100
10,800 Columbia, Missouri, Water and Electric
Systems Revenue, Series 1985B, (Toronto
Dominion Bank LOC),
2.95% 12/01/15**....................... 10,800
18,400 Kansas City, Missouri, Industrial
Development Authority, Multi-Family
Housing Revenue, (Timberlane Village
Associates Project) Series 1986, (UBS
Corporation LOC),
3.11% 06/01/27**....................... 18,400
20,845 Missouri State, Environmental
Improvement and Energy Resources
Authority, PCR, (Union Electric Company
Project) Series 1985B, (Westdeutsche
Landesbank LOC),
3.00% 05/13/99**....................... 20,845
12,000 Missouri State, Environmental
Improvement and Energy Resources
Authority, PCR, (Union Electric Company
Project) Series 1985B, (Westdeutsche
Landesbank LOC),
3.00% 05/20/99**....................... 12,000
11,590 Missouri State, Health and Educational
Facilities Authority, Health Facilities
Revenue, (Barnes Hospital Project)
Series 1985, (Morgan Guaranty Trust
LOC),
3.00% 12/01/15**....................... 11,590
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MISSOURI -- (CONTINUED)
$15,400 Missouri State, Health and Educational
Facilities Authority, Health Facilities
Revenue, (Sisters of Mercy Health Care
System Project) Series 1989B, (ABN-
AMRO Bank SBPA),
3.00% 06/01/19**....................... $ 15,400
6,100 Missouri State, Health and Educational
Facilities Authority, Health Facilities
Revenue, (Sisters of Mercy Health Care
System Project) Series 1989D, (ABN-
AMRO Bank SBPA),
3.00% 06/01/19**....................... 6,100
7,400 Missouri State, Health and Educational
Facilities Authority, Revenue,
(Rockhurst College Project) Series
1995, (Allied Irish Bank PLC Group
LOC),
3.20% 11/01/25**....................... 7,400
5,000 Missouri State, Health and Educational
Facilities Authority, Revenue, School
District Advanced Funding Program,
(Joplin R-VII School District Project)
Series 1998E,
4.25% 09/13/99......................... 5,013
4,700 Missouri State, Health and Educational
Facilities Authority, School District
Advanced Funding Program, Revenue, (St.
Charles R-VI School District Project)
Series 1998J,
4.25% 09/13/99......................... 4,712
2,700 Missouri State, Health and Educational
Facilities Authority, University and
College Improvements Educational
Facilities Revenue, (St. Louis
University Project) Series 1985, (FGIC
Insured, Morgan Guaranty Trust SBPA),
3.15% 12/01/05**....................... 2,700
7,000 Missouri, Environmental Improvement and
Energy Resources Authority, Revenue,
(Union Electric Project) (Westdeutsche
Landesbank Bank LOC),
3.20% 05/06/99......................... 7,000
9,380 Platte County, Missouri, Industrial
Development Authority, Multi-Family
Housing Revenue Refunding, (Wexford
Place Project) Series 1996, (Bank One
Texas, N.A. LOC),
3.10% 04/01/28**#...................... 9,380
3,070 St. Charles County, Missouri, Industrial
Development Authority, Revenue
Refunding, (Casalon Apartments Project)
Series 1995, (Citibank, N.A. LOC),
3.05% 09/01/25**....................... 3,070
8,000 St. Louis, Missouri, Industrial
Development Authority, Revenue
Refunding, (Wetterau, Inc. Project)
Series 1988, (Wachovia Bank & Trust
LOC),
3.05% 12/01/03**#...................... 8,000
5,000 St. Louis, Missouri, Industrial
Development Authority, Revenue
Refunding, (Wetterau, Inc. Project)
Series 1989, (PNC Bank, N.A. LOC),
3.05% 05/01/09**#...................... 5,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 21
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
MISSOURI -- (CONTINUED)
$ 5,505 St. Louis, Missouri, Planned Industrial
Expansion Authority, IDR, (Alumax Foils
Project) Series 1992, (PNC Bank, N.A.
LOC),
3.15% 12/01/05**#...................... $ 5,505
----------
167,015
----------
MONTANA -- 0.5%
8,500 Forsyth, Montana, PCR, (Pacificorp
Colstrip Project) Series 1986, AMT,
(Deutsche Bank A.G. LOC),
3.20% 12/01/16**....................... 8,500
1,400 Montana State, Health Facilities
Authority, Health Care Revenue, (Pooled
Loan Program) Series 1985A, (FGIC
Insured, Norwest Bank SBPA),
3.10% 12/01/15**....................... 1,400
4,925 Montana State, Housing Board, Tender
Option Certificates, Series 1998BT-298,
AMT, (Bank of New York SBPA),
3.25% 07/01/31**!!..................... 4,925
----------
14,825
----------
NEBRASKA -- 0.3%
4,500 Nebraska Help, Inc., Student Loan
Revenue, Series 1986B, AMT, (SLMA
Guarantee),
3.20% 12/01/16**....................... 4,500
4,000 York, Nebraska, IDR Refunding,
(Sundstrand Corporation Project) Series
1991, AMT, (Union Bank of Switzerland
LOC),
3.10% 08/01/17**....................... 4,000
----------
8,500
----------
NEW HAMPSHIRE -- 0.3%
7,000 Merrimack County, New Hampshire, TAN,
GO, Series 1999,
3.13% 12/30/99......................... 7,002
----------
NEW MEXICO -- 0.1%
3,100 Albuquerque, New Mexico, Revenue
Refunding, (Charter Hospital Inc.
Project) Series 1992, (GTY AGMT, Chase
Manhattan Bank LOC),
3.00% 03/01/14**....................... 3,100
----------
NEW YORK -- 2.2%
2,855 Erie County, New York, Industrial
Development Agency, Civic Facilities
Revenue, (DePaul Community Facilities,
Inc. Project) Series 1996, (Key Bank of
New York N.A. LOC),
3.00% 11/01/16**#...................... 2,855
6,845 Monroe County, New York, Industrial
Development Agency, Civic Facilities
Revenue, (Hillside Childrens Center
Project) Series 1998, (Key Bank N.A.
LOC),
3.00% 08/01/18**#...................... 6,845
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
NEW YORK -- (CONTINUED)
$38,990 New York State, Dormitory Authority,
Revenue, Series 1998 PT-1066, (AMBAC
Insured, Merrill Lynch SBPA),
3.05% 07/01/23**#...................... $ 38,990
3,505 Niagara County, New York, Industrial
Development Agency, Solid Waste
Disposal Revenue Refunding, (American
Refunding-Fuel Company Project) Series
1994, AMT, (Wachovia Bank & Trust
Company, N.A. LOC),
2.85% 11/15/24**....................... 3,505
9,300 Northport-East Northport, New York,
Unified Free School District, State Aid
Withholding GO, BAN, Series 1998,
3.87% 06/04/99......................... 9,300
----------
61,495
----------
NORTH CAROLINA -- 1.9%
5,000 Cabarrus County, North Carolina,
Industrial Facilities and Pollution
Control Financing Authority, Revenue
Refunding, (Philip Morris Companies,
Inc. Project) Series 1992,
3.20% 04/01/01**#...................... 5,000
600 Cabarrus County, North Carolina,
Industrial Facilities and Pollution
Control Financing Authority, Revenue
Refunding, (Philip Morris Companies,
Inc. Project) Series 1993,
3.10% 01/01/00**#...................... 600
2,575 Iredell County, North Carolina,
Industrial Facilities and Pollution
Control Financing Authority, Revenue,
(Sullivan Corporation Project) Series
1996, AMT, (Bank One Milwaukee, N.A.
LOC),
3.20% 01/01/11**....................... 2,575
10,000 Lenoir County, North Carolina, Hospital
Revenue, (Lenoir Memorial Hospital
Project) Series 1998, (Wachovia Bank of
North Carolina LOC),
3.00% 10/01/12**....................... 10,000
1,325 Mecklenburg County, North Carolina,
Industrial Facilities and Pollution
Control Financing Authority, (Virkler
Company Project) Series 1989, AMT,
(First Union National Bank LOC),
3.20% 12/01/04**#...................... 1,325
1,900 Mecklenburg County, North Carolina,
Industrial Facilities and Pollution
Control Financing Authority, Revenue,
(Sterigenics International Project)
Series 1996, AMT, (Comerica Bank of
California LOC),
3.20% 03/01/16**#...................... 1,900
7,700 New Hanover County, North Carolina,
Industrial Facilities and Pollution
Control Financing Authority, Revenue
Refunding, (Corning, Inc. Project)
Series 1997, (Wachovia Bank Georgia
LOC),
3.00% 05/01/10**....................... 7,700
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 22
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
NORTH CAROLINA -- (CONTINUED)
$ 7,700 North Carolina State, Medical Care
Commission, Community Health Care
Facilities Revenue, (Carolina Village
Inc. Project) Series 1998, (Wachovia
Bank LOC),
3.00% 10/01/18**....................... $ 7,700
4,670 North Carolina, Medical Care Commission,
Health Care Facilities Revenue,
(Mission-Thomas - St. Joseph Medical
Center Project) Series 1998, (Wachovia
Bank of North Carolina LOC),
3.00% 03/01/18**....................... 4,670
3,900 Randolph County, North Carolina,
Industrial Facilities and Pollution
Contol Finance Authority Revenue,
(Wayne Steel, Inc. Project) Series
1995, AMT, (Bank One Akron, N.A. LOC),
3.20% 09/01/05**#...................... 3,900
6,760 Winston-Salem, North Carolina, Risk
Acceptance Management Corporation,
Certificates of Participation, Series
1988, (Wachovia Bank SBPA),
3.05% 07/01/09**#...................... 6,760
----------
52,130
----------
NORTH DAKOTA -- 0.4%
500 Grand Forks, North Dakota, Health Care
Facilities Revenue, (The United
Hospital Obligated Group Project)
Series 1996A, (La Salle National Bank
LOC),
3.10% 12/01/25**#...................... 500
12,025 Grand Forks, North Dakota, Hospital
Facilities Revenue, (United Hospital
Obligated Group Project) Series 1992,
(Lasalle National Bank LOC),
3.10% 12/01/16**#...................... 12,025
----------
12,525
----------
OHIO -- 1.9%
2,070 Defiance County, Ohio, IDR Refunding,
(Isaac Properties Company Project)
Series 1996A, (Key Bank, N.A. LOC),
3.00% 07/01/00**#...................... 2,070
3,000 Lucas County, Ohio, Facilities
Improvement Revenue, (Toledo Zoological
Society Project) Series 1997, (Key
Bank, N.A. LOC),
2.95% 10/01/05**#...................... 3,000
8,000 Montgomery County, Ohio, Economic
Development Revenue, (The Dayton Art
Institute Project) Series 1996,
(National City Bank LOC),
3.00% 05/01/26**....................... 8,000
10,000 Ohio State, Air Quality Development
Authority, PCR, (Duquesne Light Company
Project) Series 1993A, (Union Bank of
Switzerland LOC),
3.65% 10/01/27**....................... 10,000
2,000 Ohio State, PCR, (Sohio Water - BP Amoco
Project) Series 1995,
3.10% 05/01/22**....................... 2,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
OHIO -- (CONTINUED)
$ 7,675 Ohio State, Water Development Authority,
Promissory Revenue, Series 1998A,
(National City Bank LOC),
3.10% 07/01/00**....................... $ 7,675
995 Summit County, Ohio, IDR Refunding,
(Keebler Company Project) Series 1993,
(Bank of Nova Scotia LOC),
3.10% 03/01/05**....................... 995
20,000 Toledo-Lucas County, Ohio, Port
Authority, Airport Development Revenue,
(Flightsafety International, Inc.
Project) Series 1998-1, AMT, (Berkshire
Hathaway LOC),
3.15% 01/01/18**#...................... 20,000
----------
53,740
----------
OKLAHOMA -- 0.4%
6,000 Muskogee City and County, Oklahoma, Port
Authority, IDR, (Metals USA, Inc.
Project) Series 1998, AMT, (Bank One
Texas, N.A. LOC),
3.20% 05/01/23**#...................... 6,000
5,000 Oklahoma, Development Finance Authority,
Revenue, (Seabrook Farms Inc. Project)
Series 1997, AMT, (Bank of New York
LOC),
3.10% 03/01/27**#...................... 5,000
----------
11,000
----------
OREGON -- 0.9%
15,600 Oregon State, Veteran's Welfare GO,
Series 1985-73-G, (Morgan Guaranty
SBPA),
3.00% 12/01/18**....................... 15,600
4,300 Port of Portland, Oregon, PCR, (Reynolds
Metals Company Project) Series 1985,
(Bank of Nova Scotia LOC),
3.10% 12/01/09**....................... 4,300
2,000 Port of Portland, Oregon, Special
Obligation Revenue, (Horizon Air
Industries, Inc. Project) Series 1997,
(Bank of Montreal LOC),
3.15% 06/15/27**....................... 2,000
2,000 Washington County, Oregon, Housing
Authority, Multi-Family Housing
Revenue, (Cedar Mill Project) Series
1995, AMT, (Bank of Nova Scotia LOC),
3.05% 09/01/25**#...................... 2,000
----------
23,900
----------
PENNSYLVANIA -- 2.8%
8,800 Allegheny County, Pennsylvania, IDR
Refunding, (Duquesne Light Company
Project) Series 1992A, (Canadian
Imperial Bank LOC),
2.90% 09/01/11**....................... 8,800
5,000 Allegheny County, Pennsylvania, IDR
Refunding, (Duquesne Power Company
Project) Series 1992-2, (Canadian
Imperial Bank LOC),
2.90% 09/01/11**....................... 5,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 23
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
PENNSYLVANIA -- (CONTINUED)
$ 8,865 Allegheny County, Pennsylvania, IDR,
(United Jewish Federation Project)
Series 1995B, (PNC Bank, N.A. LOC),
3.15% 10/01/25**#...................... $ 8,865
1,000 Delaware County, Pennsylvania,
Industrial Development Authority, PCR,
(BP Exploration and Oil Inc. Project)
Series 1995,
3.10% 10/01/19**....................... 1,000
7,700 Delaware County, Pennsylvania,
Industrial Development Authority, PCR,
(BP Exploration and Oil, Inc. Project)
Series 1985,
3.10% 12/01/09**....................... 7,700
5,000 Montgomery County, Pennsylvania,
Industrial Development Authority,
Revenue, (Plymouth Woods Project)
Series 1987, (PNC Bank, N.A. LOC),
3.15% 09/01/06**#...................... 5,000
1,100 Pennsylvania, Economic Development
Financing Authority, Development
Revenue, (Pennsylvania Bar Institute
Project) Series 1996B, AMT, (PNC Bank,
N.A. LOC),
3.15% 04/01/15**#...................... 1,100
5,900 Philadelphia, Pennsylvania,
Redevelopment Authority, (The
Presbyterian Home Project) Series 1998,
(PNC Bank N.A. LOC),
3.15% 07/01/28**#...................... 5,900
16,300 Philadelphia, Pennsylvania,
Redevelopment Authority, Revenue,
(Southwark Plaza, LP Project) Series
1997A, (PNC Bank, N.A. LOC),
3.15% 12/01/03**....................... 16,300
4,500 Quakertown, Pennsylvania, General
Authority, Revenue, (Pooled Financing
Program) Series 1996A, (PNC Bank, N.A.
LOC),
3.10% 07/01/26**....................... 4,500
4,710 Union County, Pennsylvania, Hospital
Authority, Hospital Revenue,
(Evangelical Community Hospital
Project) Series 1993B, (PNC Bank LOC),
3.05% 10/01/23**....................... 4,710
5,000 Westmoreland County, Pennsylvania,
Industrial Development Authority,
Revenue, (Elizabeth Carbide Die
Project) Series 1998A, AMT, (National
City Bank LOC),
3.25% 02/01/18**#...................... 5,000
4,310 Westmoreland County, Pennsylvania,
Industrial Development Authority,
Revenue, (Rhodin Enterprises Project)
Series 1997, AMT, (PNC Bank, N.A. LOC),
3.15% 04/01/17**#...................... 4,310
----------
78,185
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
RHODE ISLAND -- 0.4%
$ 4,000 Rhode Island State, Industrial
Facilities Corporation, IDR, (Handy and
Harman Electronic Project) Series 1984,
(Bank of Nova Scotia LOC),
3.10% 04/01/04**#...................... $ 4,000
7,925 Rhode Island, Port Authority and
Economic Development Corporation,
Energy Facilities Revenue Refunding,
(Newport Electric Corporation Project)
Series 1994, (Bank of New York LOC),
3.00% 09/01/11**....................... 7,925
----------
11,925
----------
SOUTH CAROLINA -- 1.1%
5,945 Kershaw County, South Carolina, IDR,
(DeRoyal Textiles, Inc. Project) Series
1994, AMT, (Third National Bank LOC),
3.20% 12/01/07**#...................... 5,945
5,000 Newberry County, South Carolina, School
District, GO, Series 1998, (State Aid
Withholding),
3.75% 04/01/99......................... 5,000
5,660 South Carolina, Jobs Economic
Development Authority, Health
Facilities Revenue, (Martha Franks
Baptist Retirement Center Project)
Series 1995, (Wachovia Bank of South
Carolina LOC),
3.05% 04/01/19**#...................... 5,660
4,465 South Carolina, Jobs Economic
Development Authority, IDR, (Kravet
Fabrics, Inc. Project) Series 1997,
AMT, (Bank of New York LOC),
3.20% 03/01/12**#...................... 4,465
9,000 South Carolina, Jobs Economic
Development Authority, Revenue,
(Alco-Lite Industries LLC-TechnoSteel
LLC Project) Series 1997, AMT,
(Wachovia Bank of South Carolina LOC),
3.15% 04/01/12**....................... 9,000
1,950 York County, South Carolina, PCR,
(National Rural Utilities Cooperative,
North Carolina Electricities Project)
Series 1984N-1, (CFC Insured),
3.05% 09/15/14**....................... 1,950
----------
32,020
----------
SOUTH DAKOTA -- 1.2%
32,430 South Dakota State Housing Development
Authority, Series 1998PT-168, AMT,
(Banque Nationale de Paris SBPA),
3.12% 05/01/27**#...................... 32,430
----------
TENNESSEE -- 3.7%
3,000 Chattanooga, Tennessee, Industrial
Development Board, Industrial Revenue,
(Seaboard Farms Inc. Project) Series
1984, (SunTrust Bank LOC),
3.10% 06/01/04**#...................... 3,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE> 24
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
TENNESSEE -- (CONTINUED)
$ 5,250 Chattanooga, Tennessee, Industrial
Development Board, Industrial Revenue,
(Warehouse Row Ltd. Project) Series
1984, (Credit Suisse First Boston LOC),
3.00% 12/15/12**....................... $ 5,250
3,600 Chattanooga-Hamilton County, Tennessee,
Hospital Authority, Revenue Refunding,
(Erlanger Medical Center) Series 1987,
(Morgan Guaranty Trust LOC),
3.10% 10/01/17**....................... 3,600
6,969 Cumberland County, Tennessee, Industrial
Development Board, IDR, (Crossville
Ceramics Company Project) Series 1989,
(Bank One LOC),
2.95% 01/01/00**#...................... 6,969
7,500 Knox County, Tennessee, Health and
Educational Facilities Board,
Educational Facilities Revenue, (Webb
School-Knoxville Project) Series 1999,
(SunTrust Bank Nashville LOC),
3.10% 03/01/19**#...................... 7,500
3,575 Loudon, Tennessee, Water and Sewer
Revenue Refunding, Series 1996,
(Wachovia Bank LOC),
3.05% 09/01/06**....................... 3,575
5,155 Metropolitan Government, Nashville and
Davidson County, Tennessee, Industrial
Development Board, Revenue Refunding,
(Nashville Apartment Properties
Project) Series 1995-2, (SunTrust Bank
Nashville LOC),
3.10% 09/01/15**#...................... 5,155
11,700 Metropolitan Nashville, Tennessee,
Airport Authority, Special Facilities
Revenue, (American Airlines, Inc.
Project) Series 1995A, (Credit Suisse
First Boston LOC),
3.10% 10/01/12**....................... 11,700
15,600 Metropolitan Nashville, Tennessee,
Airport Authority, Special Facilities
Revenue, (American Airlines, Inc.
Project) Series 1995B, (Bayerische
Landesbank LOC),
3.10% 10/01/12**....................... 15,600
3,245 Shelby County, Tennessee, Health
Educational and Housing Facilities
Board, Multi-Family Housing Revenue,
(Flag Manor Project) Series 1995, AMT,
(FHLB Insured),
3.15% 01/01/23**#...................... 3,245
5,000 Sullivan County, Tennessee, Industrial
Development Board, Revenue, (Modern
Forge Company Project) Series 1990,
AMT, (Northern Trust Company LOC),
3.15% 07/01/10**#...................... 5,000
10,000 Tennessee, Housing Development Agency,
Revenue, (Home Ownership Program 1),
Series 1998, AMT,
3.75% 01/01/30**....................... 10,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
TENNESSEE -- (CONTINUED)
$23,500 Tennessee, Housing Development Agency,
Revenue, (Home Ownership Program)
Series 1998-3C, AMT,
3.10% 01/01/31**....................... $ 23,500
----------
104,094
----------
TEXAS -- 5.8%
28,030 Alliance Airport Authority, Inc., Texas,
Special Facilities Revenue, (Federal
Express Project) Series 1999PA-460,
AMT, (Merrill Lynch Guarantee, Merrill
Lynch SBPA),
3.17% 04/01/21**!!....................... 28,030
3,460 Bexar County, Texas, Health Facilities
Development Corporation, Revenue, (Army
Retirement Community Project) Series
1985B, (Rabobank Nederland LOC),
3.00% 07/01/11**!!..................... 3,460
10,190 Bexar County, Texas, Housing Finance
Corporation, Multi-Family Housing
Revenue, Series 1998PT-1041, AMT,
(Merrill Lynch Guarantee, Merrill Lynch
SBPA),
3.26% 06/01/35**#...................... 10,190
1,000 Brazos River, Texas, Habor Navigation
District, Revenue, (Hoffman-La Roche
Inc. Project) Series 1985, (Wachovia
Bank of North Carolina LOC),
3.23% 04/01/02**#...................... 1,000
8,185 El Paso, Texas, Housing Finance
Corporation, Multi-Family Housing
Revenue, (Viva Apartments Project)
Series 1993, AMT, (General Electric
Capital Corporation Guarantee),
3.25% 09/01/23**#...................... 8,185
1,600 Grapevine, Texas, Industrial Development
Corporation, Revenue, (American
Airlines, Inc. Project) Series 1984A-1,
(Morgan Guaranty Trust LOC),
3.10% 12/01/24**....................... 1,600
2,300 Grapevine, Texas, Industrial Development
Corporation, Revenue, (American
Airlines, Inc. Project) Series 1984A-2,
(Morgan Guaranty Trust LOC),
3.10% 12/01/24**....................... 2,300
2,000 Grapevine, Texas, Industrial Development
Corporation, Revenue, (American
Airlines, Inc. Project) Series 1984A-3,
(Morgan Guaranty Trust LOC),
3.10% 12/01/24**....................... 2,000
2,700 Grapevine, Texas, Industrial Development
Corporation, Revenue, (American
Airlines, Inc. Project) Series 1984A-4,
(Morgan Guaranty Trust LOC),
3.10% 12/01/24**....................... 2,700
400 Grapevine, Texas, Industrial Development
Corporation, Revenue, (American
Airlines, Inc. Project) Series 1984B-1,
(Morgan Guaranty Trust LOC),
3.10% 12/01/24**....................... 400
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE> 25
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
TEXAS -- (CONTINUED)
$ 3,000 Grapevine, Texas, Industrial Development
Corporation, Revenue, (American
Airlines, Inc. Project) Series 1984B-2,
(Morgan Guaranty Trust LOC),
3.10% 12/01/24**....................... $ 3,000
3,300 Grapevine, Texas, Industrial Development
Corporation, Revenue, (American
Airlines, Inc. Project) Series 1984B-3,
(Morgan Guaranty Trust LOC),
3.10% 12/01/24**....................... 3,300
500 Grapevine, Texas, Industrial Development
Corporation, Revenue, (American
Airlines, Inc. Project) Series 1984B-4,
(Morgan Guaranty Trust LOC),
3.10% 12/01/24**....................... 500
3,390 Guadalupe-Blanco, Texas, River
Authority, Revenue Refunding, (Central
Power & Light Company Project) Series
1995, (ABN AMRO Bank N.V. LOC),
3.15% 11/01/15**....................... 3,390
2,000 Gulf Coast, Texas, Waste Disposal
Authority, PCR, (Amoco Oil Company
Project) Series 1992,
3.10% 10/01/17**....................... 2,000
3,050 Harris County, Texas, Health Facilities
Development Corporation, Hospital
Revenue, (Methodist Hospital Project)
Series 1997, (Morgan Guaranty SBPA),
3.10% 12/01/26**....................... 3,050
5,700 Harris County, Texas, Health Facilities
Development Revenue, (Methodist
Hospital Project) Series 1994, (Morgan
Guaranty SBPA),
3.10% 12/01/25**....................... 5,700
3,340 Harris County, Texas, Industrial
Development Corporation, IDR, (Forged
Products, Inc. Project) Series 1996,
AMT, (Bank One Texas, N.A. LOC),
3.20% 05/01/03**#...................... 3,340
3,000 Hillsboro, Texas, Industrial Development
Corporation, Revenue, (Lamraft, LP
Project) Series 1997, AMT, (First
Commercial Bank LOC),
3.30% 07/01/13**....................... 3,000
1,200 Lone Star, Texas, Airport Improvement
Authority, Revenue, (American Airlines,
Inc. Project) Series 1984A-2, (Royal
Bank of Canada LOC),
3.10% 12/01/14**....................... 1,200
1,200 Lone Star, Texas, Airport Improvement
Authority, Revenue, (American Airlines,
Inc. Project) Series 1984A-3, (Royal
Bank of Canada LOC),
3.10% 12/01/14**....................... 1,200
1,200 Lone Star, Texas, Airport Improvement
Authority, Revenue, (American Airlines,
Inc. Project) Series 1984B-1, (Royal
Bank of Canada LOC),
3.10% 12/01/14**....................... 1,200
2,200 Lone Star, Texas, Airport Improvement
Authority, Revenue, (American Airlines,
Inc. Project) Series 1984B-4, (Royal
Bank of Canada LOC),
3.10% 12/01/14**....................... 2,200
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
TEXAS -- (CONTINUED)
$ 600 Lone Star, Texas, Airport Improvement
Authority, Revenue, (American Airlines,
Inc. Project) Series 1984B-5, (Royal
Bank of Canada LOC),
3.10% 12/01/14**....................... $ 600
7,300 Montgomery County, Texas, IDR, (Houston
Area Research Center Project) Series
1985, (Banque Nationale de Paris LOC),
3.10% 12/01/15**....................... 7,300
10,200 Port Development Corporation of Texas,
Marine Terminal Revenue, (Pasadena
Terminal Company, Inc. Project) Series
1984, (ABN-AMRO Bank N.V. LOC),
3.25% 12/01/04**#...................... 10,200
1,200 Port of Port Arthur, Texas, Navigation
District, Revenue Refunding, (Texaco,
Inc. Project) Series 1994,
3.20% 10/01/24**....................... 1,200
11,300 Sabine River Authority, Texas, PCR,
(Texas Utilities Electric Company
Project) Series 1995A, AMT, (Morgan
Guaranty Trust LOC),
3.30% 04/01/30**....................... 11,300
8,000 Sulphur Springs, Texas, IDR, (Hon
Industries Inc., Project) Series 1985,
(Northern Trust Company LOC),
3.15% 12/01/13**#...................... 8,000
25,000 Texas, Municipal Gas Corporation, Gas
Reserves Revenue, Sr. Lien, Series
1998, (FSA Insured, Societe Generale
SBPA),
3.00% 01/15/23**....................... 25,000
3,300 Trinity River Authority of Texas, PCR
Refunding, (Texas Utilities Electric
Company Project) Series 1997A, (MBIA
Insured, Bank of New York SBPA),
3.10% 07/01/22**....................... 3,300
3,200 West Side Calhoun County, Texas,
Development Corporation, PCR, (Sohio
Chemical Corporation Project) Series
1985, (BP Amoco plc Guarantee)
3.10% 12/01/15**....................... 3,200
----------
163,045
----------
UTAH -- 1.2%
1,900 Murray City, Utah, IDR, (Zevex, Inc.
Project) Series 1996, AMT, (Bank One
Arizona, N.A. LOC),
3.20% 10/01/16**#...................... 1,900
3,200 Murray City, Utah, Industrial
Development Authority, Revenue, (Hunter
Douglas Real Property Project) Series
1994, AMT, (ABN-AMRO Bank N.V. LOC),
3.20% 09/01/14**#...................... 3,200
17,300 Salt Lake City, Utah, Revenue, (IHC
Health Services, Inc. Project) Series
1990A, (Westdeutsche Landesbank SBPA),
3.05% 01/01/20**....................... 17,300
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE> 26
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
UTAH -- (CONTINUED)
$10,110 Salt Lake County, Utah, PCR Refunding,
(British Petroleum Company-Service
Station Holdings, Inc. Project) Series
1994B, (BP Amoco plc Guarantee),
3.10% 08/01/07**....................... $ 10,110
----------
32,510
----------
VIRGINIA -- 0.9%
2,500 Colonial Heights, Virginia, Industrial
Development Authority, Revenue
Refunding, (Philip Morris Companies,
Inc. Project) Series 1992,
3.05% 03/01/05**#...................... 2,500
2,000 Fluvanna County, Virginia, Industrial
Development Authority, IDR, (Edgecomb
Metals Company Project) Series 1984,
(Banque Nationale de Paris LOC),
3.00% 12/01/09**#...................... 2,000
3,900 Greensville County, Virginia, Industrial
Development Authority, Revenue, (Perdue
Farms, Inc. Project) Series 1996, AMT,
(SunTrust Bank LOC),
3.20% 10/01/06**#...................... 3,900
5,200 Newport News, Virginia, Economic
Development Authority, Multi-Family
Revenue, (Jefferson Point Development
Project) Series 1998, (Credit Suisse
First Boston LOC),
2.95% 11/01/11**....................... 5,200
4,600 Peninsula Ports Authority of Virginia,
Coalition Terminal Revenue Refunding,
(Dominion Terminal Associates Project)
Series 1987C, (Barclays Bank, PLC LOC),
3.10% 07/01/16**....................... 4,600
2,000 Spotsylvania County, Virginia,
Industrial Development Authority, IDR,
(Carlisle Corporation Project) Series
1993, (SunTrust Bank LOC),
3.10% 06/01/08**#...................... 2,000
5,500 Virginia State, College Building
Authority, Educational Facilities
Revenue, (University of Richmond
Project) Series 1996, (Crestar Bank
SBPA),
3.05% 11/01/26**....................... 5,500
----------
25,700
----------
WEST VIRGINIA -- 0.9%
1,500 Marshall County, West Virginia, PCR,
(Mountaineer Carbon Company Project)
Series 1985, (BP Amoco plc Guarantee),
3.10% 12/01/20**....................... 1,500
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
WEST VIRGINIA -- (CONTINUED)
$22,650 West Virginia State, Hospital Finance
Authority, Revenue, (St. Mary's
Hospital Project) Series 1987, (Bank
One of West Virginia LOC),
3.10% 10/01/12**....................... $ 22,650
----------
24,150
----------
WISCONSIN -- 1.2%
4,000 Menomonee Falls, Wisconsin, Industrial
Development Authority, IDR, (Jema, LLC
Project) Series 1994, AMT, (Bank One
Milwaukee, N.A. LOC),
3.20% 09/01/14**#...................... 4,000
4,600 Pleasant Prairie, Wisconsin, IDR, (Nucon
Corporation Project) Series 1995, AMT,
(American National Bank & Trust LOC),
3.05% 02/01/22**#...................... 4,600
2,700 Wisconsin State, Health and Educational
Facilities Authority Revenue, (Felician
Health Care Inc. Project) Series 1994,
(La Salle National Bank LOC),
3.13% 01/01/19**....................... 2,700
11,400 Wisconsin State, Health and Educational
Facilities Authority, Revenue, (St.
Luke's Medical Center Project) Series
1987, (First National Bank Chicago
LOC),
2.95% 12/01/17**#...................... 11,400
12,000 Wisconsin State, Health and Educational
Facilities Authority, Revenue, (Wheaton
Franciscan Services Project) Series
1997, (Toronto Dominion Bank LOC),
3.05% 08/15/16**#...................... 12,000
----------
34,700
----------
WYOMING -- 0.2%
500 Sublette County, Wyoming, PCR, (Exxon
Capital Ventures Project) Series 1987B,
AMT, (Exxon Corporation Guarantee),
3.20% 07/01/17**....................... 500
3,700 Sweetwater County, Wyoming, PCR
Refunding, (Pacificorp Project) Series
1990A, (Credit Suisse First Boston
LOC),
2.90% 07/01/15**....................... 3,700
----------
4,200
----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $2,720,236)...................... 2,720,236
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE> 27
NATIONS FUNDS
Nations Tax Exempt Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
- --------------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 0.3%
4,450 AIM Tax-Exempt Fund......................... $ 4,450
2,725 Federated Tax-Exempt Money Market Fund...... 2,725
----------
TOTAL INVESTMENT COMPANIES
(Cost $7,175).............................. 7,175
----------
TOTAL INVESTMENTS 97.8%
(Cost $2,727,411*).................. 2,727,411
----------
OTHER ASSETS AND LIABILITIES (NET)... 2.2%
Cash........................................ $ 3,400
Receivable for Fund shares sold............. 54,762
Interest receivable......................... 11,229
Prepaid expenses............................ 35
Dividends payable........................... (5,581)
Payable for Fund shares redeemed............ (968)
Investment advisory fee payable............. (284)
Administration fee payable.................. (228)
Shareholder servicing and distribution fees
payable.................................... (206)
Accrued Trustees'/Directors' fees and
expenses................................... (85)
Accrued expenses and other liabilities...... (511)
----------
TOTAL OTHER ASSETS AND LIABILITIES (NET).... 61,563
----------
NET ASSETS........................... 100.0% $2,788,974
==========
NET ASSETS CONSIST OF:
Accumulated net realized gain on investments
sold....................................... $ 51
Paid-in capital............................. 2,788,923
----------
NET ASSETS.................................. $2,788,974
==========
</TABLE>
<TABLE>
<CAPTION>
VALUE
- --------------------------------------------------------------------
<C> <S> <C> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
PRIMARY A SHARES:
($2,132,148,488/2,132,714,984 shares
outstanding)............................... $1.00
==========
PRIMARY B SHARES:
($10,236,007/10,228,442 shares
outstanding)............................... $1.00
==========
INVESTOR A SHARES:
($53,692,646/53,658,060 shares
outstanding)............................... $1.00
==========
INVESTOR B SHARES:
($259,469,437/259,333,274 shares
outstanding)............................... $1.00
==========
INVESTOR C SHARES:
($217,788/217,642 shares outstanding)....... $1.00
==========
DAILY SHARES:
($333,209,888/333,042,782 shares
outstanding)............................... $1.00
==========
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Aggregate cost for Federal tax purposes.
** Variable rate demand notes. The interest rate shown reflects
the rate in effect at March 31, 1999. These securities are
subject to demand features of either one, seven or thirty
days.
!! Restricted Security (Note 5).
# Securities are not registered under the Securities Act of
1933. These securities may be resold in transactions exempt
from registration to qualified institutional buyers.
</TABLE>
Nations Tax Exempt Fund had the following industry concentrations greater than
10% at March 31, 1999 (as a percentage of net assets):
Medical Facilities Revenue 12.0%
Multi-Family Housing Revenue 11.4%
Industrial Facilities Revenue 11.3%
Pollution Control Revenue 10.4%
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE> 28
NATIONS FUNDS
Nations Treasury Fund
STATEMENT OF NET ASSETS MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- -----------------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 23.4%
U.S. TREASURY NOTES -- 23.4%
$125,000 6.375% 04/30/99!.......................
$ 125,092
25,000 6.250% 05/31/99!.......................
25,066
20,000 6.000% 06/30/99!.......................
20,022
60,000 5.875% 07/31/99!.......................
60,164
50,000 5.875% 08/31/99!.......................
50,076
25,000 5.750% 09/30/99!.......................
25,126
110,000 5.625% 11/30/99!.......................
110,713
80,000 5.875% 02/15/00!.......................
80,697
75,000 5.500% 02/29/00!.......................
75,423
----------
TOTAL U.S. GOVERNMENT AND AGENCY
OBLIGATIONS
(Cost $572,379)........................
572,379
----------
REPURCHASE AGREEMENTS -- 108.2%
660,000 Agreement with ABN-AMRO Bank, 4.970%
dated 03/31/99 to be repurchased at
$660,091 on 04/01/99 collateralized
by: $501,281 U.S. Treasury Strips,
Interest Only, due
08/15/01 - 05/15/20; $171,919 U.S.
Treasury Strips, Principal Only, due
08/15/05 - 08/15/20...................
660,000
130,000 Agreement with Barclays Capital, 4.900%
dated 03/31/99 to be repurchased at
$130,018 on 04/01/99 collateralized
by: $132,600 U.S. Treasury Strips,
Principal Only, due 11/15/24..........
130,000
130,000 Agreement with Bear Stearns and
Company, Inc., 4.900% dated 03/31/99
to be repurchased at $130,018 on
04/01/99 collateralized by: $99,352
U.S. Treasury Strips, Interest Only,
due 08/15/09 - 11/15/21; $35,539 U.S.
Treasury Strips, Principal Only, due
05/15/16 - 11/15/21...................
130,000
125,000 Agreement with CIBC Wood Gundy
Securities Corporation, 5.000% dated
03/31/99 to be repurchased at $125,017
on 04/01/99 collateralized by: $80,882
U.S. Treasury Bonds, 10.625% due
08/15/15; $46,621 U.S. Treasury Notes,
4.500% - 6.120% due
01/31/01 - 04/30/03...................
125,000
529,968 Agreement with Credit Suisse First
Boston Corporation, Interest is
payable monthly. The agreement is
terminable by the Fund daily. The
final maturity date of the agreement
is 04/01/99 collateralized by:
$105,575 U.S. Treasury Bills, due
04/01/99 - 09/16/99; $222,707 U.S.
Treasury Strips, Interest Only, due
04/30/99 - 08/15/27; $217,194 U.S.
Treasury Strips, Principal Only, due
05/15/99 - 11/15/27@@.................
529,968
130,000 Agreement with Deutsche Bank, 5.000%
dated 03/31/99 to be repurchased at
$130,018 on 04/01/99 collateralized
by: $132,600 GNMA, 6.000% - 9.000% due
08/15/16 - 03/15/29...................
130,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- -----------------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENTS -- (CONTINUED)
$130,000 Agreement with First Union Capital
Corporation, 4.970% dated 03/31/99 to
be repurchased at $130,018 on 04/01/99
collateralized by: $51,574 U.S.
Treasury Bills, due 07/01/99 -
09/02/99; $16,631 U.S. Treasury
Strips, Principal Only, due 08/15/17;
$64,134 U.S. Treasury Notes, 5.625% -
7.500% due
08/31/99 - 02/15/05...................
$ 130,000
130,000 Agreement with J.P. Morgan Securities
Inc., 5.050% dated 03/31/99 to be
repurchased at $130,018 on 04/01/99
collateralized by: $132,600 GNMA,
6.500% - 8.000% due 06/15/26 -
03/15/29..............................
130,000
113,000 Agreement with Lehman Brothers Inc.,
4.880%, with a final maturity date of
04/06/99. Interest receivable as of
March 31, 1999 was $31, collateralized
by: $84,430 GNMA, 6.000% - 9.000% due
07/15/10 - 03/15/29; $30,820 GNMA II,
7.000% - 10.000% due
09/20/16 - 05/20/28...................
113,000
90,000 Agreement with Morgan Stanley Group
Inc., 4.810%, with a final maturity
date of 04/30/99. Interest receivable
as of March 31, 1999 was $1,792,
collateralized by: $91,800 GNMA,
6.500% - 8.000% due
03/15/23 - 03/15/29!!.................
90,000
130,000 Agreement with Salomon Smith Barney,
Inc., 5.050% dated 03/31/99 to be
repurchased at $130,018 on 04/01/99
collateralized by: $132,608 GNMA,
5.500% - 8.000% due
10/15/13 - 03/20/29...................
130,000
130,000 Agreement with Societe Generale, 5.050%
dated 03/31/99 to be repurchased at
$130,018 on 04/01/99 collateralized
by: $133,877 GNMA, 6.000% due
12/20/28..............................
130,000
86,000 Agreement with Warburg Dillon, 5.100%
dated 03/31/99 to be repurchased at
$86,012 on 04/01/99 collateralized by:
$87,723 U.S. Treasury Notes, 4.750%
due 11/15/08..........................
86,000
130,000 Agreement with Westdeutsche
Landesbanken, Girozentrale, 5.000%
dated 03/31/99 to be repurchased at
$130,018 on 04/01/99 collateralized
by: $132,600 GNMA, 6.000% due
01/15/29 - 01/20/29...................
130,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $2,643,968).....................
2,643,968
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE> 29
NATIONS FUNDS
Nations Treasury Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
- --------------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 1.7%
22,032 AIM Treasury Fund......................... $ 22,032
20,151 Dreyfus Treasury Cash
Management Fund.......................... 20,151
----------
TOTAL INVESTMENT COMPANIES
(Cost $42,183)........................... 42,183
----------
TOTAL INVESTMENTS 133.3%
(Cost $3,258,530*)................ 3,258,530
----------
OTHER ASSETS AND LIABILITIES (33.3)%
(NET).............................
Cash...................................... $ 171
Receivable for Fund shares sold........... 24,949
Interest receivable....................... 10,315
Prepaid expenses.......................... 54
Dividends payable......................... (4,505)
Payable for reverse repurchase
agreements............................... (529,968)
Payable for Fund shares redeemed.......... (313,410)
Investment advisory fee payable........... (76)
Administration fee payable................ (199)
Shareholder servicing and distribution
fees payable............................. (527)
Accrued Trustees'/Directors' fees and
expenses................................. (144)
Accrued expenses and other liabilities.... (580)
----------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)........................ (813,920)
----------
NET ASSETS......................... 100.0% $2,444,610
==========
NET ASSETS CONSIST OF:
Accumulated net realized loss on
investments sold......................... $ (191)
Paid-in capital........................... 2,444,801
----------
NET ASSETS................................ $2,444,610
==========
</TABLE>
<TABLE>
<CAPTION>
VALUE
- --------------------------------------------------------------------
<C> <S> <C> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
PRIMARY A SHARES:
($766,455,852/766,752,205 shares
outstanding)............................. $1.00
==========
PRIMARY B SHARES:
($20,314,574/20,321,239 shares
outstanding)............................. $1.00
==========
INVESTOR A SHARES:
($1,176,233,251/1,176,812,948 shares
outstanding)............................. $1.00
==========
INVESTOR B SHARES:
($261,839,631/261,953,145 shares
outstanding)............................. $1.00
==========
INVESTOR C SHARES:
($174,960/175,014 shares outstanding)..... $1.00
==========
DAILY SHARES:
($219,591,613/219,684,762 shares
outstanding)............................. $1.00
==========
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Aggregate cost for Federal tax purposes.
! Denotes security, or a portion thereof, subject to
repurchase under reverse repurchase agreement as of March
31, 1999.
!! Restricted Security (Note 5).
@@ Security segregated as collateral for reverse repurchase
agreement.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE> 30
NATIONS FUNDS
Nations Government Money Market Fund
STATEMENT OF NET ASSETS MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 96.6%
FEDERAL FARM CREDIT BANK (FFCB) -- 2.6%
$ 6,000 5.500% 04/01/99........................... $ 6,000
5,000 Discount note 04/12/99.................... 4,993
--------
10,993
--------
FEDERAL HOME LOAN BANK (FHLB) -- 84.8%
70,000 Discount note 04/01/99.................... 70,000
12,000 4.770%+ 04/01/99++........................ 12,000
10,000 4.770%+ 04/01/99++........................ 9,997
6,000 Discount note 04/05/99.................... 5,997
6,000 Discount note 04/07/99.................... 5,995
12,000 4.781%+ 04/07/99++........................ 11,999
10,000 5.570% 04/07/99........................... 10,000
6,000 Discount note 04/09/99.................... 5,994
9,000 5.650% 04/09/99........................... 9,000
10,000 Discount note 04/14/99.................... 9,983
6,000 Discount note 04/15/99.................... 5,989
15,000 Discount note 04/23/99.................... 14,958
8,000 Discount note 04/30/99.................... 7,970
15,000 Discount note 05/05/99.................... 14,933
4,000 5.705% 05/05/99........................... 4,002
8,000 5.723% 05/05/99........................... 8,000
4,850 Discount note 05/12/99.................... 4,823
10,000 Discount note 05/19/99.................... 9,937
10,000 Discount note 05/21/99.................... 9,934
8,000 Discount note 05/26/99.................... 7,941
8,000 Discount note 05/28/99.................... 7,940
8,000 Discount note 06/15/99.................... 7,921
8,000 Discount note 06/25/99.................... 7,910
8,000 5.510% 07/06/99........................... 7,998
8,000 Discount note 07/14/99.................... 7,894
8,000 Discount note 08/04/99.................... 7,869
8,000 Discount note 08/06/99.................... 7,867
10,000 Discount note 08/13/99.................... 9,824
12,000 4.900% 01/14/00........................... 11,999
10,000 4.910% 02/09/00........................... 9,999
10,000 4.950% 02/24/00........................... 9,994
8,000 5.100% 03/03/00........................... 7,997
8,000 5.150% 03/08/00........................... 7,994
--------
352,658
--------
STUDENT LOAN MARKETING ASSOCIATION (SLMA) -- 9.2%
8,000 4.720%+ 04/01/99++........................ 7,997
4,500 4.992%+ 04/06/99++........................ 4,500
8,000 5.202%+ 04/06/99++........................ 8,000
8,000 Discount note 06/30/99.................... 7,907
10,000 4.930% 02/08/00........................... 10,000
--------
38,404
--------
TOTAL U.S. GOVERNMENT AND AGENCY
OBLIGATIONS
(Cost $402,055).......................... 402,055
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000)
- ---------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 1.8%
7,554 Dreyfus Treasury Prime Cash Management
Fund...................................... 7,554
--------
TOTAL INVESTMENT COMPANIES
(Cost $7,554)............................. 7,554
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
(000)
- -------------------------------------------------------------------
<C> <S> <C> <C>
TOTAL INVESTMENTS
(Cost $409,609*)................... 98.4% $409,609
--------
OTHER ASSETS AND LIABILITIES
(NET).............................. 1.6%
Receivable for Fund shares sold............ $ 12,535
Interest receivable........................ 2,027
Prepaid expenses........................... 8
Dividends payable.......................... (1,424)
Payable for Fund shares redeemed........... (6,076)
Investment advisory fee payable............ (23)
Administration fee payable................. (33)
Shareholder servicing and distribution fees
payable................................... (43)
Accrued Trustees'/Directors' fees and
expenses.................................. (27)
Accrued expenses and other liabilities..... (102)
--------
TOTAL OTHER ASSETS AND LIABILITIES (NET)...
6,842
--------
NET ASSETS.......................... 100.0% $416,451
========
NET ASSETS CONSIST OF:
Accumulated net realized loss on
investments sold.......................... $ (61)
Paid-in capital............................ 416,512
--------
NET ASSETS................................. $416,451
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
PRIMARY A SHARES:
($275,677,014/275,716,674 shares
outstanding).............................. $1.00
========
PRIMARY B SHARES:
($1,298,395/1,298,751 shares outstanding).. $1.00
========
INVESTOR A SHARES:
($13,923,580/13,925,870 shares
outstanding).............................. $1.00
========
INVESTOR B SHARES:
($82,079,952/82,094,851 shares
outstanding).............................. $1.00
========
INVESTOR C SHARES:
($42,483/42,491 shares outstanding)........ $1.00
========
DAILY SHARES:
($43,429,783/43,433,629 shares
outstanding).............................. $1.00
========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Floating rate security. The interest rate shown reflects the rate in effect
at March 31, 1999.
++ Reset date. Interest rates reset either daily, weekly or monthly.
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE> 31
NATIONS FUNDS
Nations Prime Fund
STATEMENT OF NET ASSETS MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
BANK OBLIGATIONS -- 13.3%
CERTIFICATES OF DEPOSIT -- DOMESTIC -- 1.6%
Bankers Trust Company
$ 40,000 4.860%+ 04/01/99++...................... $ 39,998
20,000 5.770% 04/28/99......................... 19,998
32,000 5.780% 04/28/99......................... 31,999
Chase Manhattan Bank
25,000 5.685% 08/03/99......................... 24,995
----------
116,990
----------
CERTIFICATES OF DEPOSIT -- YANKEE -- 6.0%
20,000 Bank of Nova Scotia, (New York)
5.330% 03/03/00......................... 19,993
40,000 Bayerische Hypotheken-und-
Vereinsbank, (New York)
5.075% 02/10/00......................... 39,987
50,000 Credit Agricole, (New York)
5.750% 04/01/99......................... 50,000
Deutsche Bank, (New York)
40,000 5.120% 01/10/00......................... 40,000
40,000 5.160% 01/12/00......................... 40,000
40,000 5.100% 02/18/00......................... 39,988
Societe Generale (New York)
65,000 4.853%+ 04/01/99++...................... 64,974
100,000 4.855%+ 04/01/99++...................... 99,936
30,000 5.750% 04/16/99......................... 29,986
25,000 Union Bank of Switzerland, (New York)
5.080% 01/13/00......................... 24,994
----------
449,858
----------
TIME DEPOSITS -- EURO -- 5.7%
35,000 Commerzbank
5.270% 03/01/00........................ 34,997
100,000 First National Bank of Chicago
5.125% 04/01/99......................... 100,000
135,000 Societe Generale
5.125% 04/01/99........................ 135,000
150,000 Westdeutsche Landesbanken Girozentrale
5.188% 04/01/99........................ 150,000
----------
419,997
----------
TOTAL BANK OBLIGATIONS
(Cost $986,845)........................ 986,845
----------
CORPORATE OBLIGATIONS -- 66.0%
COMMERCIAL PAPER -- 43.5%
Aon Corporation
12,000 Discount note 04/07/99.................. 11,990
10,309 Discount note 04/27/99.................. 10,273
32,139 Discount note 05/12/99.................. 31,960
Bankers Trust Corporation
25,000 Discount note 04/15/99.................. 24,949
30,000 Discount note 06/29/99.................. 29,628
25,000 Discount note 07/20/99.................. 24,626
Barton Capital Corporation
35,000 Discount note 04/27/99##................ 34,876
28,332 Discount note 05/21/99.................. 28,141
Countrywide Home Loans, Inc.
50,000 Discount note 05/19/99.................. 49,673
50,000 Discount note 05/24/99.................. 49,639
Edison Securitization LLC
30,000 Discount note 04/23/99#................. 29,908
35,000 Discount note 05/11/99#................. 34,809
40,000 Discount note 05/12/99#................. 39,763
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
COMMERCIAL PAPER -- (CONTINUED)
Finova Capital Corporation
$ 25,000 Discount note 05/04/99.................. $ 4,889
25,000 Discount note 05/24/99.................. 24,820
50,000 Discount note 06/09/99.................. 49,529
15,000 Discount note 06/15/99.................. 14,847
35,000 Discount note 06/16/99.................. 34,638
20,000 Discount note 06/25/99.................. 19,768
40,000 General Electric Capital Corporation
Discount note 10/04/99.................. 39,018
60,000 Goldman Sachs Group, LP
Discount note 04/14/99................. 59,888
Hitachi America
10,000 Discount note 04/13/99.................. 9,982
13,000 Discount note 05/11/99.................. 12,921
17,000 Discount note 05/14/99.................. 16,890
International Securitization Corporation
50,000 Discount note 04/15/99#................. 49,905
50,000 Discount note 04/22/99#................. 49,854
45,000 Discount note 04/29/99#................. 44,828
75,000 Discount note 04/30/99#................. 74,705
41,680 Discount note 06/17/99#................. 41,247
Lehman Brothers Holdings Inc.
57,000 Discount note 04/26/99.................. 56,801
23,000 Discount note 04/27/99.................. 22,916
90,000 Discount note 05/03/99.................. 89,596
40,000 Discount note 05/05/99.................. 39,808
35,000 Discount note 05/18/99.................. 34,768
50,000 Discount note 09/22/99.................. 48,775
Lexington Parker Capital Company LLC
50,000 4.905%+ 04/01/99++##.................... 50,000
56,306 Discount note 06/22/99##................ 55,684
214,878 Discount note 09/02/99##................ 210,345
33,100 Mitsubishi International Corporation
Discount note 05/18/99.................. 32,871
MOAT Funding LLC
79,460 Discount note 04/07/99#................. 79,395
20,000 Discount note 04/12/99#................. 19,970
30,000 Discount note 05/17/99#................. 29,812
25,000 Discount note 05/28/99#................. 24,808
15,000 Discount note 06/07/99#................. 14,863
25,000 Discount note 06/14/99#................. 24,742
21,571 Discount note 06/21/99#................. 21,332
50,000 Discount note 06/29/99#................. 49,404
20,000 Discount note 08/24/99#................. 19,605
13,889 Discount note 09/21/99#................. 13,563
23,349 Discount note 10/20/99#................. 22,700
National Bank of Canada, (New York)
20,000 Discount note 08/23/99.................. 19,608
20,000 Discount note 09/01/99.................. 19,580
20,000 Discount note 09/08/99.................. 19,568
25,000 New Center Asset Trust
Discount note 04/15/99................. 24,953
PHH Corporation
25,000 Discount note 05/11/99.................. 24,861
25,000 Discount note 08/10/99.................. 24,541
25,000 Discount note 08/11/99.................. 24,538
50,000 Discount note 08/25/99.................. 48,960
SAFECO Corporation
20,000 Discount note 05/17/99#................. 19,873
45,000 Discount note 06/10/99#................. 44,567
24,000 Discount note 06/23/99#................. 23,725
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE> 32
NATIONS FUNDS
Nations Prime Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
CORPORATE OBLIGATIONS -- (CONTINUED)
COMMERCIAL PAPER -- (CONTINUED)
SAFECO Credit Company
$ 20,000 Discount note 04/30/99.................. $ 19,919
25,000 Discount note 05/12/99.................. 24,859
13,000 Discount note 05/12/99.................. 12,927
50,000 Discount note 06/10/99.................. 49,512
15,000 Discount note 06/10/99.................. 14,857
45,000 Discount note 07/08/99.................. 44,401
Sigma Finance, Inc.
50,000 Discount note 06/23/99##................ 49,441
43,987 Discount note 07/07/99##................ 43,410
275,000 Spice Trust I
Discount note 04/28/99................. 273,972
30,000 Spice Trust II
Discount note 04/28/99................. 29,888
Tulip Funding Corporation
75,000 Discount note 05/19/99##................ 74,511
20,000 Discount note 06/04/99##................ 19,826
100,000 Variable Funding Capital Corporation
Discount note 04/01/99##................ 100,000
Victory Receivables Corporation
34,426 Discount note 04/26/99##................ 34,310
34,077 Discount note 05/12/99##................ 33,888
55,296 Discount note 05/17/99##................ 54,953
50,000 Discount note 05/18/99##................ 49,683
10,000 Discount note 06/15/99##................ 9,899
37,972 Discount note 06/16/99##................ 37,582
22,500 WCP Funding
Discount note 04/28/99#................ 22,418
----------
3,224,752
----------
CORPORATE BONDS AND NOTES -- 22.5%
Bankers Trust Corporation (MTN)
60,000 4.920%+ 04/01/99++##.................... 59,998
50,000 4.919%+ 04/14/99++...................... 50,000
Bear, Stearns and Company, Inc.
50,000 5.396%+ 04/04/99++...................... 50,000
50,000 4.907%+ 04/28/99++...................... 50,000
50,000 5.374%+ 05/04/99++...................... 50,000
40,000 5.150% 01/25/00......................... 40,000
40,000 5.170% 02/10/00......................... 40,000
40,000 5.180% 02/18/00......................... 40,000
40,000 5.340% 03/02/00......................... 40,000
Credit Suisse First Boston Corporation
30,000 4.965%+ 04/09/99++##.................... 29,982
15,000 5.100%+ 05/17/99++...................... 15,000
35,000 5.100%+ 05/17/99++...................... 35,000
First Union National Bank
90,000 5.010%+ 04/01/99++...................... 90,000
40,000 5.300% 03/01/00......................... 40,000
Goldman Sachs Group LP
100,000 5.260%+ 04/07/99++##.................... 100,000
100,000 4.995%+ 04/09/99@##..................... 100,000
35,000 5.280% 02/24/00......................... 34,999
Liberty Lighthouse Funding Company LLC
50,000 4.920%+ 04/01/99++##.................... 50,000
50,000 4.920%+ 04/01/99++##.................... 50,000
25,000 4.960%+ 04/01/99++##.................... 25,000
25,000 4.919%+ 04/15/99++##.................... 25,000
50,000 4.919%+ 04/15/99++##.................... 49,996
50,000 4.919%+ 04/15/99++##.................... 49,996
25,000 5.760% 07/23/99##....................... 24,999
35,000 5.260% 02/10/00##....................... 35,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
(000) (000)
<C> <S> <C>
CORPORATE BONDS AND NOTES -- (CONTINUED)
Merrill Lynch & Company
$ 80,000 4.900%+ 04/01/99++...................... $ 80,000
25,000 4.970%+ 04/01/99++...................... 25,000
50,000 4.961%+ 04/06/99++...................... 50,000
50,000 Morgan Stanley Dean Witter & Company
5.100%+ 06/15/99++...................... 50,000
PHH Corporation
60,000 4.995%+ 04/01/99++...................... 59,998
50,000 5.009%+ 04/14/99++...................... 50,000
7,000 Salomon Smith Barney, Inc.
7.000% 05/15/99......................... 7,016
Sigma Finance, Inc.
40,000 5.190% 02/18/00##....................... 40,000
40,000 5.220% 02/23/00##....................... 40,000
40,000 5.330% 03/01/00##....................... 40,000
50,000 SMM Trust Series 1999-B
5.449% 03/15/00!!....................... 50,000
----------
1,666,984
----------
TOTAL CORPORATE OBLIGATIONS
(Cost $4,891,736)...................... 4,891,736
----------
GUARANTEED INVESTMENT CONTRACTS -- 10.1%
Allstate Life Insurance Company
25,000 5.107%+ 06/29/99@!!..................... 25,000
25,000 5.107%+ 06/29/99@!!..................... 25,000
Anchor National Life Insurance Company
50,000 5.070%+ 06/29/99@!!..................... 50,000
25,000 5.136%+ 06/29/99@!!..................... 25,000
Commonwealth Life Insurance Company Inc.
50,000 5.060%+ 04/01/99++!!.................... 50,000
62,000 5.160%+ 09/27/99@!!..................... 62,000
10,000 5.160%+ 09/27/99@!!..................... 10,000
50,000 First Allmerica Financial Life Insurance Company
5.070%+ 06/29/99@!!..................... 50,000
General American Life Insurance Company
50,000 5.140%+ 04/07/99@!!..................... 50,000
50,000 5.140%+ 04/07/99@!!..................... 50,000
60,000 Life Insurance Company of Georgia
5.176%+ 09/27/99@!!..................... 60,000
Life Insurance Company of Virginia
25,000 4.951%+ 04/07/99@!!..................... 25,000
50,000 4.951%+ 04/07/99@!!..................... 50,000
25,000 4.951%+ 04/07/99@!!..................... 25,000
50,000 New York Life Insurance Company
5.106%+ 04/07/99@!!..................... 50,000
Peoples Security Life Insurance Company
20,000 5.160%+ 04/01/99++!!.................... 20,000
20,000 5.210%+ 04/01/99++!!.................... 20,000
50,000 Sun Life Insurance Company of America
5.166%+ 09/27/99@!!..................... 50,000
Travelers Life Insurance Company
25,000 5.013%+ 04/01/99++!!.................... 25,000
25,000 5.040%+ 06/01/99++!!.................... 25,000
----------
TOTAL GUARANTEED INVESTMENT CONTRACTS
(Cost $747,000)........................ 747,000
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE> 33
NATIONS FUNDS
Nations Prime Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL BONDS AND NOTES -- 2.0%
$ 28,800 Illinois, Student Assistance Commission
Revenue, Series 1990B, (GTD STD LNS,
First National Bank of Chicago LOC),
4.930%+ 04/07/99++..................... $ 28,800
20,600 Missouri State, Economic Development
Export Revenue, (Biocraft Labs, Inc.
Project) Series 1989, (PNC Bank LOC),
5.000%+ 04/07/99++..................... 20,600
100,000 Virginia State, Housing Development
Authority, Commonwealth Revenue, Series
1996E,
4.950%+ 04/07/99++..................... 100,000
----------
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $149,400)........................ 149,400
----------
REPURCHASE AGREEMENTS -- 5.9%
240,000 Agreement with ABN-AMRO Inc., 5.05%
dated 03/31/99 to be repurchased at
$240,034 on 04/01/99 collateralized by:
$1,522 TVA Strips, Principal Only, due
07/15/43; $10,106 TVA Strips, Interest
Only, due 04/15/02 - 10/15/02; $9,055
SLMA, 0.000% due 04/16/99 - 03/08/00;
$104,280 FNMA, 0.000% - 7.110% due
09/25/00 - 02/04/13; $50,458 FMAC,
0.000% - 6.710% due
04/15/99 - 07/09/12; $59,449 FHLB,
0.000% - 7.700% due 05/19/99 -
08/21/18; $9,931 FFCB, 6.100% - 8.160%
due 11/04/04 - 12/07/04................ 240,000
100,000 Agreement with Deutsche Bank Securities,
Inc., 5.23% dated 03/31/99 to be
repurchased at $100,015 on 04/01/99
collateralized by: $102,001 Concord
Minutemen Capital Corporation
Commercial Paper, due 04/01/99......... 100,000
100,000 Agreement with Merrill Lynch Government
Securities, Inc, 5.20% dated 03/31/99
to be repurchased at $100,014 on
04/01/99 collateralized by: $104,794
Various Commercial Paper due
04/28/99 - 05/21/99.................... 100,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $440,000)........................ 440,000
----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
- -------------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 0.9%
10,462 AIM Liquid Asset Portfolio............... $ 10,462
2,917 AIM Prime Fund........................... 2,917
52,280 Dreyfus Cash Management Plus Fund........ 52,280
----------
TOTAL INVESTMENT COMPANIES
(Cost $65,659).......................... 65,659
----------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
VALUE
<C> <S> <C> <C>
TOTAL INVESTMENTS
(Cost $7,280,640*)............... 98.2% $7,280,640
--------
OTHER ASSETS AND
LIABILITIES (NET)................ 1.8%
Cash..................................... $ 82
Receivable for investment securities
sold.................................... 24,800
Receivable for Fund shares sold.......... 124,823
Interest receivable...................... 30,755
Prepaid expenses......................... 82
Dividends payable........................ (16,170)
Payable for Fund shares redeemed......... (23,904)
Investment advisory fee payable.......... (1,245)
Administration fee payable............... (553)
Shareholder servicing and distribution
fees payable............................ (1,514)
Accrued Trustees'/Directors' fees and
expenses................................ (217)
Accrued expenses and other liabilities... (1,146)
----------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)....................... 135,793
----------
NET ASSETS........................ 100.0% $7,416,433
==========
NET ASSETS CONSIST OF:
Distributions in excess of net investment
income.................................. $ (1)
Accumulated net realized loss on
investments sold........................ (626)
Paid-in capital.......................... 7,417,060
----------
NET ASSETS............................... $7,416,433
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE> 34
NATIONS FUNDS
Nations Prime Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
<TABLE>
<CAPTION>
VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
PRIMARY A SHARES:
($3,153,371,862/3,153,843,554 shares
outstanding)............................ $1.00
==========
PRIMARY B SHARES:
($81,648,973/81,652,442 shares
outstanding)............................ $1.00
==========
INVESTOR A SHARES:
($695,703,375/695,805,014 shares
outstanding)............................ $1.00
==========
INVESTOR B SHARES:
($738,672,927/738,781,526 shares
outstanding)............................ $1.00
==========
INVESTOR C SHARES:
($11,037,478/11,039,406 shares
outstanding)............................ $1.00
==========
DAILY SHARES:
($2,718,028,415/2,718,420,435 shares
outstanding)............................ $1.00
==========
MARSICO SHARES:
($17,970,479/17,970,479 shares
outstanding)............................ $1.00
==========
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Aggregate cost for Federal tax purposes.
+ Floating rate security. The interest rate shown reflects the
rate in effect at March 31, 1999.
++ Reset date. Interest rates reset either daily, weekly or
monthly, quarterly or semi-annual.
!! Restricted Security (Note 5).
@ Security subject to a demand feature which allows the fund
to put the security back to the issuer within 7 to 180
calendar days.
# Securities are not registered under the Securities Act of
1933. These securities may be resold in transactions exempt
from registration to qualified institutional buyers.
## Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration to qualified
institutional buyers.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE> 35
NATIONS FUNDS
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 1999
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance
Corporation
AMT Alternative Minimum Tax
BAN Bond Anticipation Note
CFC Cooperative Finance Corporation
FGIC Financial Guaranty Insurance Corporation
FHLB Federal Home Loan Bank
FMAC Federal Mortgage Acceptance Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National Mortgage Association
GO General Obligation
GTD STD LNS Guaranteed Student Loan
GTY-AGMT Guarantee Agreement
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
MTN Medium Term Note
PCR Pollution Control Revenue
SBPA Standby Bond Purchase Agreement
SLMA Student Loan Marketing Association
TAN Tax Anticipation Note
TRAN Tax and Revenue Anticipation Note
TVA Tennessee Valley Authority
</TABLE>
31
<PAGE> 36
[THIS PAGE INTENTIONALLY LEFT BLANK.]
32
<PAGE> 37
NATIONS FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
GOVERNMENT
TAX EXEMPT TREASURY MONEY MARKET PRIME
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS)
INVESTMENT INCOME:
Interest.................................................... $92,738 $146,302 $21,104 $371,923
------- -------- ------- --------
EXPENSES:
Investment advisory fee..................................... 10,886 5,535 1,631 13,566
Administration fee.......................................... 2,721 2,754 408 6,749
Transfer agent fees......................................... 433 500 51 1,067
Custodian fees.............................................. 170 218 39 372
Legal and audit fees........................................ 151 290 68 412
Registration and filing fees................................ 192 203 75 161
Interest expense............................................ 7 -- -- --
Trustees'/Directors' fees and expenses...................... 15 15 15 15
Other....................................................... 264 203 65 389
------- -------- ------- --------
Subtotal................................................ 14,839 9,718 2,352 22,731
Shareholder servicing and distribution fees:
Primary B Shares.......................................... 24 38 4 53
Investor A Shares......................................... 442 5,250 74 6,148
Investor B Shares......................................... 898 1,156 345 2,461
Investor C Shares......................................... 78 9 3 133
Daily Shares.............................................. 1,277 1,273 247 10,025
Marsico Shares............................................ -- -- -- 7
------- -------- ------- --------
Total Expenses.......................................... 17,558 17,444 3,025 41,558
Fees waived by investment adviser, administrator and/or
distributor............................................... (7,498) (2,128) (1,290) (6,031)
Fees reduced by credits allowed by the custodian............ -- --* (5) (8)
------- -------- ------- --------
Net Expenses............................................ 10,060 15,316 1,730 35,519
------- -------- ------- --------
NET INVESTMENT INCOME....................................... 82,678 130,986 19,374 336,404
------- -------- ------- --------
NET REALIZED GAIN/(LOSS) ON INVESTMENTS..................... 165 (9) 2 17
------- -------- ------- --------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $82,843 $130,977 $19,376 $336,421
======= ======== ======= ========
</TABLE>
- ---------------
* Amount represents less than $500.
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE> 38
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TAX EXEMPT
-------------------------------
YEAR ENDED YEAR ENDED
3/31/99 3/31/98
-------------------------------
<S> <C> <C>
(IN THOUSANDS)
Net investment income....................................... $ 82,678 $ 73,604
Net realized gain/(loss) on investments..................... 165 1
---------- ----------
Net increase/(decrease) in net assets resulting from
operations................................................ 82,843 73,605
Distributions to shareholders from net investment income:
Primary A Shares.......................................... (65,819) (58,608)
Primary B Shares.......................................... (273) (344)
Investor A Shares......................................... (3,650) (4,960)
Investor B Shares......................................... (7,511) (7,214)
Investor C Shares......................................... (964) (2,076)
Daily Shares.............................................. (4,469) (400)
Marsico Shares............................................ -- --
Net increase/(decrease) in net assets from Fund share
transactions.............................................. 277,351 874,966
---------- ----------
Net increase/(decrease) in net assets....................... 277,508 874,969
NET ASSETS:
Beginning of year........................................... 2,511,466 1,636,497
---------- ----------
End of year................................................. $2,788,974 $2,511,466
========== ==========
Undistributed net investment income/(distributions in excess
of net investment income) at end of year.................. $ -- $ 9
========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE> 39
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
TREASURY GOVERNMENT MONEY MARKET PRIME
------------------------- ------------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/99 3/31/98 3/31/99 3/31/98 3/31/99 3/31/98
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 130,986 $ 169,377 $ 19,374 $ 18,385 $ 336,404 $ 296,834
(9) -- 2 2 17 (12)
---------- ---------- -------- -------- ---------- ----------
130,977 169,377 19,376 18,387 336,421 296,822
(35,810) (64,676) (12,220) (13,732) (144,712) (181,469)
(715) (1,382) (82) (839) (1,010) (3,020)
(70,376) (57,323) (991) (1,215) (87,660) (71,233)
(15,860) (38,193) (4,572) (2,115) (34,889) (32,993)
(182) (507) (65) (152) (2,729) (4,581)
(8,054) (7,296) (1,457) (332) (65,322) (3,536)
-- -- -- -- (83) --
(276,945) (401,867) 86,342 (45,196) 1,815,548 1,241,743
---------- ---------- -------- -------- ---------- ----------
(276,965) (401,867) 86,331 (45,194) 1,815,564 1,241,733
2,721,575 3,123,442 330,120 375,314 5,600,869 4,359,136
---------- ---------- -------- -------- ---------- ----------
$2,444,610 $2,721,575 $416,451 $330,120 $7,416,433 $5,600,869
========== ========== ======== ======== ========== ==========
--
$ $ 10 $ -- $ 13 $ (1) $ 1
========== ========== ======== ======== ========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
35
<PAGE> 40
NATIONS FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
TREASURY
(000)
----------------------------
<S> <C> <C> <C>
Cash flows from operating and investing activities:
Investment income received................................ $ 146,886
Payment of operating expenses............................. (15,038)
Net proceeds from reverse repurchase agreements
outstanding............................................. 53,670
Net sales of short-term investments....................... 809,409
-----------
Cash provided by operating and investing activities......... $ 994,927
Cash flows from financing activities:
Proceeds from shares sold@................................ 6,919,973
Payments on shares redeemed............................... (7,805,552)
Distributions paid*....................................... (109,177)
-----------
Cash used by financing activities........................... (994,756)
---------
Increase in cash.......................................... 171
Cash at beginning of year................................. --
---------
Cash at end of year....................................... $ 171
=========
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATIONS
TO CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES:
Net decrease in net assets resulting from operations........ $ 130,977
Decrease in investments................................... $ 812,803
Increase in payable for reverse repurchase agreement
transactions............................................ 53,670
Increase in interest and dividends receivable............. (2,801)
Decrease in other assets.................................. 118
Increase in accrued expenses and other payables........... 160
-----------
Cash provided by operating and investing activities......... $ 994,927
=========
</TABLE>
- ---------------
* Non-cash activities include reinvestment of dividends of $21,530.
@ Non-cash activities include shares issued in exchange for shares of Emerald
Treasury Fund of $875,235.
SEE NOTES TO FINANCIAL STATEMENTS.
36
<PAGE> 41
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY*
<TABLE>
<CAPTION>
TAX EXEMPT TREASURY
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 1999 MARCH 31, 1998 MARCH 31, 1999 MARCH 31, 1998
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold................................................... $ 2,239,774 $ 1,930,603 $ 745,038 $ 1,681,502
Issued in exchange for Pilot Shares of Pilot (Note 8):
Short-Term U.S. Treasury Fund........................ -- -- -- 1,227,239
Short-Term Tax Exempt Diversified Fund............... -- 374,107 -- --
Missouri Short-Term Tax Exempt Fund.................. -- 194,197 -- --
Issued in exchange for Institutional Shares of Emerald
(Note 8):
Tax-Exempt Fund...................................... 111,309 -- -- --
Treasury Fund........................................ -- -- 280,819 --
Issued in exchange for assets of Nationsbank Common
Trust Municipal Temp Fund (Note 8)................... 52,112 -- -- --
Issued as reinvestment of dividends.................... 1,384 1,082 68 356
Redeemed............................................... (2,273,641) (1,683,269) (874,634) (3,639,485)
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ 130,938 $ 816,720 $ 151,291 $ (730,388)
=========== =========== =========== ===========
PRIMARY B SHARES:
Sold................................................... $ 35,307 $ 33,933 $ 49,612 $ 119,961
Issued as reinvestment of dividends.................... 1 -- -- 23
Redeemed............................................... (33,799) (38,357) (41,055) (163,388)
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ 1,509 $ (4,424) $ 8,557 $ (43,404)
=========== =========== =========== ===========
INVESTOR A SHARES:
Sold................................................... $ 515,758 $ 531,649 $ 3,421,643 $ 3,672,012
Issued in exchange for Service Shares of Emerald (Note
8):
Tax-Exempt Fund...................................... 551 -- -- --
Treasury Fund........................................ -- -- 518,802 --
Issued as reinvestment of dividends.................... 3,340 4,811 7,103 4,901
Redeemed............................................... (637,759) (509,996) (4,132,631) (3,034,972)
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ (118,110) $ 26,464 $ (185,083) $ 641,941
=========== =========== =========== ===========
INVESTOR B SHARES:
Sold................................................... $ 718,176 $ 726,068 $ 2,050,523 $ 8,652,481
Issued in exchange for Administration Shares of Pilot
(Note 8):
Short-Term U.S. Treasury Fund........................ -- -- -- 237,343
Short-Term Tax Exempt Diversified Fund............... -- 10,606 -- --
Missouri Short-Term Tax Exempt Fund.................. -- 11,941 -- --
Issued as reinvestment of dividends.................... 6,745 6,340 8,372 12,703
Redeemed............................................... (715,284) (733,713) (2,343,796) (9,328,944)
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ 9,637 $ 21,242 $ (284,901) $ (426,417)
=========== =========== =========== ===========
INVESTOR C SHARES:
Sold................................................... $ 77,602 $ 201,254 $ 8,917 $ 23,432
Issued as reinvestment of dividends.................... 894 2,046 175 510
Redeemed............................................... (145,795) (198,544) (17,212) (29,515)
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ (67,299) $ 4,756 $ (8,120) $ (5,573)
=========== =========== =========== ===========
DAILY SHARES:
Sold................................................... $ 579,655 $ 185,935 $ 668,946 $ 1,965,123
Issued in exchange for Investor Shares of Pilot (Note
8):
Short-Term U.S. Treasury Fund........................ -- -- -- 155,072
Short-Term Tax Exempt Diversified Fund............... -- 7,245 -- --
Missouri Short-Term Tax Exempt Fund.................. -- 20,642 -- --
Issued in exchange for Retail Shares of Emerald (Note
8):
Tax-Exempt Fund...................................... 58,840 -- -- --
Treasury Fund........................................ -- -- 75,614 --
Issued as reinvestment of dividends.................... 4,438 379 5,812 6,888
Redeemed............................................... (322,257) (203,993) (709,061) (1,965,109)
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ 320,676 $ 10,208 $ 41,311 $ 161,974
=========== =========== =========== ===========
Total net increase/(decrease)............................ $ 277,351 $ 874,966 $ (276,945) $ (401,867)
=========== =========== =========== ===========
</TABLE>
- ---------------
* Since the Funds have sold, issued as reinvestment of dividends and redeemed
shares only at a constant net asset value of $1.00 per share, the number of
shares represented by such sales, reinvestments and redemptions is the same
as the amounts shown above for such transactions.
SEE NOTES TO FINANCIAL STATEMENTS.
37
<PAGE> 42
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY* (CONTINUED)
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET PRIME
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 1999 MARCH 31, 1998 MARCH 31, 1999 MARCH 31, 1998
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold................................................... $ 799,733 $ 930,668 $ 2,884,029 $ 4,016,048
Issued in exchange for:
Pilot Shares of Pilot Short-Term Diversified Assets
Fund (Note 8)...................................... -- -- -- 1,539,899
Institutional Shares of Emerald Prime Fund (Note
8)................................................. -- -- 351,001 --
Issued as reinvestment of dividends.................... 14 67 3,278 4,159
Redeemed............................................... (741,571) (1,012,632) (2,937,008) (5,241,556)
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ 58,176 $ (81,897) $ 301,300 $ 318,550
=========== =========== =========== ===========
PRIMARY B SHARES:
Sold................................................... $ 6,527 $ 136,817 $ 184,200 $ 294,929
Issued as reinvestment of dividends.................... -- -- -- 42
Redeemed............................................... (7,041) (154,457) (110,683) (470,877)
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ (514) $ (17,640) $ 73,517 $ (175,906)
=========== =========== =========== ===========
INVESTOR A SHARES:
Sold................................................... $ 88,851 $ 110,875 $ 6,032,561 $ 4,691,456
Issued in exchange for Service Shares of Emerald Prime
Fund................................................. -- -- 1,222,395 --
Issued as reinvestment of dividends.................... 920 1,153 60,480 68,508
Redeemed............................................... (99,654) (106,939) (8,326,879) (4,210,795)
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ (9,883) $ 5,089 $(1,011,443) $ 549,169
=========== =========== =========== ===========
INVESTOR B SHARES:
Sold................................................... $ 1,221,157 $ 362,572 $ 3,900,160 $ 4,419,707
Issued in exchange for Administration Shares of Pilot
Short-Term Diversified Assets Fund (Note 8).......... -- -- -- 239,008
Issued as reinvestment of dividends.................... 3,747 1,793 31,563 28,891
Redeemed............................................... (1,219,880) (315,047) (4,037,571) (4,224,135)
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ 5,024 $ 49,318 $ (105,848) $ 463,471
=========== =========== =========== ===========
INVESTOR C SHARES:
Sold................................................... $ 1,991 $ 6,191 $ 105,867 $ 232,102
Issued as reinvestment of dividends.................... 62 149 2,522 4,454
Redeemed............................................... (5,380) (5,113) (193,462) (234,077)
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ (3,327) $ 1,227 $ (85,073) $ 2,479
=========== =========== =========== ===========
DAILY SHARES:
Sold................................................... $ 630,871 $ 119,962 $ 3,067,562 $ 611,273
Issued in exchange for:
Investor Shares of Pilot Short-Term Diversified
Assets Fund (Note 8)............................... -- -- -- 75,676
Retail Shares of Emerald Prime Fund (Note 8)......... -- -- 601,006 --
Issued as reinvestment of dividends.................... 1,438 324 64,860 3,483
Redeemed............................................... (595,443) (121,579) (1,108,303) (606,452)
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ 36,866 $ (1,293) $ 2,625,125 $ 83,980
=========== =========== =========== ===========
MARSICO SHARES:@
Sold................................................... $ -- $ -- $ 22,087 $ --
Issued as reinvestment of dividends.................... -- -- 23 --
Redeemed............................................... -- -- (4,140) --
----------- ----------- ----------- -----------
Net increase/(decrease)................................ $ -- $ -- $ 17,970 $ --
=========== =========== =========== ===========
Total net increase/(decrease)............................ $ 86,342 $ (45,196) $ 1,815,548 $ 1,241,743
=========== =========== =========== ===========
</TABLE>
- ---------------
* Since the Funds have sold, issued as reinvestment of dividends and redeemed
shares only at a constant net asset value of $1.00 per share, the number of
shares represented by such sales, reinvestments and redemptions is the same as
the amounts shown above for such transactions.
@ Marsico Shares commenced operations on January 26, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE> 43
[THIS PAGE INTENTIONALLY LEFT BLANK.]
39
<PAGE> 44
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 YEAR INCOME INCOME DISTRIBUTIONS
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX EXEMPT
PRIMARY A
Year ended 3/31/1999............................. $1.00 $0.0312 $(0.0312) $(0.0312)
Year ended 3/31/1998............................. 1.00 0.0345 (0.0345) (0.0345)
Year ended 3/31/1997............................. 1.00 0.0324 (0.0324) (0.0324)
Period ended 3/31/1996(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)
PRIMARY B
Year ended 3/31/1999............................. $1.00 $0.0288 $(0.0288) $(0.0288)
Year ended 3/31/1998............................. 1.00 0.0320 (0.0320) (0.0320)
Year ended 3/31/1997............................. 1.00 0.0300 (0.0300) (0.0300)
Period ended 3/31/1996(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
Year ended 3/31/1999............................. $1.00 $0.0278 $(0.0278) $(0.0278)
Year ended 3/31/1998............................. 1.00 0.0316 (0.0316) (0.0316)
Year ended 3/31/1997............................. 1.00 0.0300 (0.0300) (0.0300)
Period ended 3/31/1996(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)
INVESTOR B
Year ended 3/31/1999............................. $1.00 $0.0293 $(0.0293) $(0.0293)
Year ended 3/31/1998............................. 1.00 0.0325 (0.0325) (0.0325)
Year ended 3/31/1997............................. 1.00 0.0307 (0.0307) (0.0307)
Period ended 3/31/1996(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
Year ended 3/31/1999............................. $1.00 $0.0288 $(0.0288) $(0.0288)
Year ended 3/31/1998............................. 1.00 0.0323 (0.0323) (0.0323)
Year ended 3/31/1997............................. 1.00 0.0311 (0.0311) (0.0311)
Period ended 3/31/1996 (a)....................... 1.00 0.0107 (0.0107) (0.0107)
Year ended 11/30/1995............................ 1.00 0.0346 (0.0346) (0.0346)
Period ended 11/30/1994 *........................ 1.00 0.0203 (0.0203) (0.0203)
DAILY SHARES
Year ended 3/31/1999............................. $1.00 $0.0263 ($0.0263) ($0.0263)
Year ended 3/31/1998............................. 1.00 0.0295 (0.0295) (0.0295)
Year ended 3/31/1997............................. 1.00 0.0270 (0.0270) (0.0270)
Period ended 3/31/1996(a)........................ 1.00 0.0090 (0.0090) (0.0090)
Period ended 11/30/1995 *........................ 1.00 0.0243 (0.0243) (0.0243)
</TABLE>
- ---------------
* Tax Exempt Primary B, Investor B, Investor C and Daily Shares commenced
operations on June 16, 1994, May 17, 1994, March 7, 1994 and February 10,
1995, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) The effect of interest expense on the operating expense ratio was less than
0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
40
<PAGE> 45
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
------------------------------------------------
OPERATING
NET ASSETS EXPENSES WITHOUT
NET ASSET VALUE TOTAL END OF YEAR OPERATING NET INVESTMENT WAIVERS AND/OR
END OF YEAR RETURN++ (000) EXPENSES INCOME REIMBURSEMENTS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$1.00 3.17% $2,132,148 0.30%(b) 3.11% 0.55%(b)
1.00 3.48 2,001,083 0.30(b) 3.43 0.56(b)
1.00 3.29 1,184,313 0.30 3.25 0.55
1.00 1.12 1,078,764 0.30+ 3.35+ 0.58+
1.00 3.68 905,125 0.30 3.62 0.57
1.00 2.60 820,677 0.27 2.59 0.59
$1.00 2.91% $ 10,236 0.55%(b) 2.86% 0.80%(b)
1.00 3.22 8,726 0.55(b) 3.18 0.81(b)
1.00 3.04 13,151 0.55 3.00 0.80
1.00 1.04 9,370 0.55+ 3.10+ 0.83+
1.00 3.39 11,666 0.55 3.37 0.82
1.00 1.17 18,207 0.52+ 2.34+ 0.84+
$1.00 2.81% $ 53,693 0.65%(b) 2.76% 0.90%(b)
1.00 3.20 171,786 0.58(b) 3.15 0.84(b)
1.00 3.04 145,337 0.55 3.00 0.80
1.00 1.04 128,414 0.55+ 3.10+ 0.83+
1.00 3.40 126,207 0.55 3.37 0.82
1.00 2.36 151,714 0.52 2.34 0.84
$1.00 2.97% $ 259,469 0.50%(b) 2.91% 0.90%(b)
1.00 3.30 249,819 0.50(b) 3.23 0.76(b)
1.00 3.11 228,601 0.50 3.05 0.75
1.00 1.06 132,914 0.50+ 3.15+ 0.78+
1.00 3.47 86,374 0.50 3.42 0.77
1.00 1.43 3 0.47+ 2.39+ 0.79+
$1.00 2.91% $ 218 0.55%(b) 2.86% 0.80%(b)
1.00 3.26 67,511 0.48(b) 3.25 0.74(b)
1.00 3.15 62,761 0.45 3.10 0.70
1.00 1.07 66,743 0.45+ 3.20+ 0.73+
1.00 3.52 41,409 0.45 3.47 0.72
1.00 2.05 25,704 0.42+ 2.44+ 0.74+
$1.00 2.66% $ 333,210 0.80%(b) 2.61% 1.25%(b)
1.00 2.98 12,541 0.80(b) 2.93 1.06(b)
1.00 2.73 2,334 0.80 2.75 1.05
1.00 0.91 2 0.69+ 2.96+ 0.97+
1.00 2.61 2 0.45+ 3.47+ 0.72+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
41
<PAGE> 46
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 YEAR INCOME INCOME DISTRIBUTIONS
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
TREASURY
PRIMARY A
Year ended 3/31/1999................................... $1.00 $0.0499 $(0.0499) $(0.0499)
Year ended 3/31/1998................................... 1.00 0.0531 (0.0531) (0.0531)
Year ended 3/31/1997................................... 1.00 0.0509 (0.0509) (0.0509)
Period ended 3/31/1996(a).............................. 1.00 0.0458 (0.0458)# (0.0458)
Year ended 5/31/1995................................... 1.00 0.0494 (0.0494)# (0.0494)
Year ended 5/31/1994................................... 1.00 0.0297 (0.0297) (0.0297)
PRIMARY B
Year ended 3/31/1999................................... $1.00 $0.0474 $(0.0474) $(0.0474)
Year ended 3/31/1998................................... 1.00 0.0506 (0.0506) (0.0506)
Year ended 3/31/1997................................... 1.00 0.0484 (0.0484) (0.0484)
Period ended 3/31/1996(a).............................. 1.00 0.0437 (0.0437)# (0.0437)
Period ended 5/31/1995 *............................... 1.00 0.0449 (0.0449)# (0.0449)
INVESTOR A
Year ended 3/31/1999................................... $1.00 $0.0464 $(0.0464) $(0.0464)
Year ended 3/31/1998................................... 1.00 0.0496 (0.0496) (0.0496)
Year ended 3/31/1997................................... 1.00 0.0474 (0.0474) (0.0474)
Period ended 3/31/1996(a).............................. 1.00 0.0429 (0.0429)# (0.0429)
Year ended 5/31/1995................................... 1.00 0.0457 (0.0457)# (0.0457)
Year ended 5/31/1994................................... 1.00 0.0262 (0.0262) (0.0262)
INVESTOR B
Year ended 3/31/1999................................... $1.00 $0.0474 $(0.0474) $(0.0474)
Year ended 3/31/1998................................... 1.00 0.0506 (0.0506) (0.0506)
Year ended 3/31/1997................................... 1.00 0.0484 (0.0484) (0.0484)
Period ended 3/31/1996(a).............................. 1.00 0.0437 (0.0437)# (0.0437)
Year ended 5/31/1995................................... 1.00 0.0468 (0.0468)# (0.0468)
Period ended 5/31/1994*................................ 1.00 0.0015 (0.0015) (0.0015)
INVESTOR C
Year ended 3/31/1999................................... $1.00 $0.0474 $(0.0474) $(0.0474)
Year ended 3/31/1998................................... 1.00 0.0506 (0.0506) (0.0506)
Year ended 3/31/1997................................... 1.00 0.0484 (0.0484) (0.0484)
Period ended 3/31/1996(a).............................. 1.00 0.0437 (0.0437)# (0.0437)
Year ended 5/31/1995................................... 1.00 0.0468 (0.0468)# (0.0468)
Period ended 5/31/1994*................................ 1.00 0.0019 (0.0019) (0.0019)
DAILY SHARES
Year ended 3/31/1999................................... $1.00 $0.0449 $(0.0449) $(0.0449)
Year ended 3/31/1998................................... 1.00 0.0481 (0.0481) (0.0481)
Year ended 3/31/1997................................... 1.00 0.0455 (0.0455) (0.0455)
Period ended 3/31/1996(a).............................. 1.00 0.0404 (0.0404) (0.0404)
Period ended 5/31/1995*................................ 1.00 0.0167 (0.0167) (0.0167)
</TABLE>
- ---------------
* Treasury Primary B, Investor B, Investor C and Daily Shares commenced
operations on June 16, 1994, May 16, 1994, May 11, 1994 and February 9, 1995,
respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Amount includes distributions from net realized gains of less than $0.0001
per share.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
May 31.
(b) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements, was less than 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
42
<PAGE> 47
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
---------------------------------------------
OPERATING
NET ASSETS EXPENSES WITHOUT
NET ASSET VALUE TOTAL END OF YEAR OPERATING NET INVESTMENT WAIVERS AND/OR
END OF YEAR RETURN++ (000) EXPENSE INCOME REIMBURSEMENTS
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$1.00 5.10% $ 766,456 0.30%(b) 5.01% 0.35%(b)
1.00 5.43 615,185 0.30 5.31 0.35
1.00 5.22 1,345,585 0.30 5.09 0.35
1.00 4.67 821,030 0.30+ 5.52+ 0.37+
1.00 5.05 2,896,868 0.30 4.99 0.35
1.00 2.99 2,679,992 0.30 2.97 0.36
$1.00 4.84% $ 20,315 0.55%(b) 4.76% 0.60%(b)
1.00 5.18 11,764 0.55 5.06 0.60
1.00 4.96 55,170 0.55 4.84 0.60
1.00 4.46 47,488 0.55+ 5.27+ 0.62+
1.00 4.56 56,815 0.55+ 4.74+ 0.60+
$1.00 4.74% $1,176,233 0.65%(b) 4.66% 0.70%(b)
1.00 5.06 1,361,214 0.65 4.96 0.70
1.00 4.85 719,199 0.65 4.74 0.70
1.00 4.36 89,584 0.65+ 5.17+ 0.72+
1.00 4.65 107,475 0.67 4.62 0.72
1.00 2.67 74,195 0.65 2.62 0.71
$1.00 4.84% $ 261,840 0.55%(b) 4.76% 0.70%(b)
1.00 5.18 546,833 0.55 5.06 0.60
1.00 4.96 973,297 0.55 4.84 0.60
1.00 4.46 1,525,048 0.55+ 5.27+ 0.62+
1.00 4.76 52,564 0.56 4.73 0.61
1.00 0.14 2 0.55+ 2.72+ 0.61+
$1.00 4.84% $ 175 0.55%(b) 4.76% 0.60%(b)
1.00 5.18 8,295 0.55 5.06 0.60
1.00 4.96 13,868 0.55 4.84 0.60
1.00 4.46 8,783 0.55+ 5.27+ 0.62+
1.00 4.76 6,373 0.56 4.73 0.61
1.00 0.19 191 0.55+ 2.72+ 0.61+
$1.00 4.58% $ 219,592 0.80%(b) 4.51% 1.05%(b)
1.00 4.92 178,284 0.80 4.81 0.85
1.00 4.66 16,323 0.80 4.59 0.85
1.00 4.09 2 0.64+ 5.18+ 0.71+
1.00 1.67 2 0.55+ 4.74+ 0.60+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
43
<PAGE> 48
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 YEAR INCOME INCOME DISTRIBUTIONS
------------------------------------------------------------------
<S> <C> <C> <C> <C>
GOVERNMENT MONEY MARKET
PRIMARY A
Year ended 3/31/1999..................................... $1.00 $0.0497 $(0.0497) $(0.0497)
Year ended 3/31/1998..................................... 1.00 0.0524 (0.0524) (0.0524)
Year ended 3/31/1997..................................... 1.00 0.0503 (0.0503) (0.0503)
Period ended 3/31/1996(a)................................ 1.00 0.0173 (0.0173) (0.0173)
Year ended 11/30/1995.................................... 1.00 0.0558 (0.0558) (0.0558)
Year ended 11/30/1994.................................... 1.00 0.0375 (0.0375)# (0.0375)
PRIMARY B
Year ended 3/31/1999..................................... $1.00 $0.0472 $(0.0472) $(0.0472)
Year ended 3/31/1998..................................... 1.00 0.0499 (0.0499) (0.0499)
Year ended 3/31/1997..................................... 1.00 0.0478 (0.0478) (0.0478)
Period ended 3/31/1996(a)................................ 1.00 0.0165 (0.0165) (0.0165)
Year ended 11/30/1995.................................... 1.00 0.0533 (0.0533) (0.0533)
Period ended 11/30/1994*................................. 1.00 0.0200 (0.0200)# (0.0200)
INVESTOR A
Year ended 3/31/1999..................................... $1.00 $0.0462 $(0.0462) $(0.0462)
Year ended 3/31/1998..................................... 1.00 0.0489 (0.0489) (0.0489)
Year ended 3/31/1997..................................... 1.00 0.0468 (0.0468) (0.0468)
Period ended 3/31/1996(a)................................ 1.00 0.0162 (0.0162) (0.0162)
Year ended 11/30/1995.................................... 1.00 0.0522 (0.0522) (0.0522)
Year ended 11/30/1994.................................... 1.00 0.0340 (0.0340)# (0.0340)
INVESTOR B
Year ended 3/31/1999..................................... $1.00 $0.0472 $(0.0472) $(0.0472)
Year ended 3/31/1998..................................... 1.00 0.0499 (0.0499) (0.0499)
Year ended 3/31/1997..................................... 1.00 0.0478 (0.0478) (0.0478)
Period ended 3/31/1996(a)................................ 1.00 0.0165 (0.0165) (0.0165)
Year ended 11/30/1995.................................... 1.00 0.0532 (0.0532) (0.0532)
Period ended 11/30/1994*................................. 1.00 0.0222 (0.0222)# (0.0222)
INVESTOR C
Year ended 3/31/1999..................................... $1.00 $0.0472 $(0.0472) $(0.0472)
Year ended 3/31/1998..................................... 1.00 0.0499 (0.0499) (0.0499)
Year ended 3/31/1997..................................... 1.00 0.0478 (0.0478) (0.0478)
Period ended 3/31/1996(a)................................ 1.00 0.0165 (0.0165) (0.0165)
Year ended 11/30/1995.................................... 1.00 0.0532 (0.0532) (0.0532)
Period ended 11/30/1994*................................. 1.00 0.0290 (0.0290)# (0.0290)
DAILY SHARES
Year ended 3/31/1999..................................... $1.00 $0.0447 $(0.0447) $(0.0447)
Year ended 3/31/1998..................................... 1.00 0.0474 (0.0474) (0.0474)
Year ended 3/31/1997..................................... 1.00 0.0453 (0.0453) (0.0453)
Period ended 3/31/1996(a)................................ 1.00 0.0157 (0.0157) (0.0157)
Period ended 11/30/1995*................................. 1.00 0.0418 (0.0418) (0.0418)
</TABLE>
- ---------------
* Government Money Market Primary B, Investor B, Investor C and Daily Shares
commenced operations on June 16, 1994, May 17, 1994, March 21, 1994 and
February 10, 1995, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Amount includes distributions from net realized gains of less than $0.0001
per share.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
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, was less than 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
44
<PAGE> 49
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
---------------------------------------------
OPERATING
NET ASSETS EXPENSES WITHOUT
NET ASSET VALUE TOTAL END OF YEAR OPERATING NET INVESTMENT WAIVERS AND/OR
END OF YEAR RETURN++ (000) EXPENSE INCOME REIMBURSEMENTS
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$1.00 5.08% $275,677 0.30%(b) 4.97% 0.58%(b)
1.00 5.39 217,506 0.30 5.25 0.59
1.00 5.18 299,395 0.30 5.03 0.57
1.00 1.74 336,771 0.30+ 5.20+ 0.59+
1.00 5.72 332,895 0.30 5.58 0.57
1.00 3.84 432,729 0.30 3.79 0.59
$1.00 4.82% $ 1,298 0.55%(b) 4.72% 0.83%(b)
1.00 5.12 1,812 0.55 5.00 0.84
1.00 4.93 19,450 0.55 4.78 0.82
1.00 1.66 31,581 0.55+ 4.95+ 0.84+
1.00 5.45 27,122 0.55 5.33 0.82
1.00 2.02 72,747 0.55+ 3.54+ 0.84+
$1.00 4.72% $ 13,924 0.65%(b) 4.62% 0.93%(b)
1.00 5.01 23,806 0.65 4.90 0.94
1.00 4.80 18,717 0.65 4.68 0.92
1.00 1.62 48,742 0.65+ 4.85+ 0.94+
1.00 5.34 26,175 0.65 5.23 0.92
1.00 3.45 20,173 0.65 3.44 0.94
$1.00 4.82% $ 82,080 0.55%(b) 4.72% 0.93%(b)
1.00 5.12 77,060 0.55 5.00 0.84
1.00 4.93 27,750 0.55 4.78 0.82
1.00 1.66 62,617 0.55+ 4.95+ 0.84+
1.00 5.45 27,079 0.55 5.33 0.82
1.00 2.24 11,955 0.55+ 3.54+ 0.84+
$1.00 4.82% $ 42 0.55%(b) 4.72% 0.83%(b)
1.00 5.12 3,369 0.55 5.00 0.84
1.00 4.93 2,142 0.55 4.78 0.82
1.00 1.66 1,731 0.55+ 4.95+ 0.84+
1.00 5.44 4,414 0.55 5.33 0.82
1.00 2.94 476 0.55+ 3.54+ 0.84+
$1.00 4.56% $ 43,430 0.80%(b) 4.47% 1.28%(b)
1.00 4.85 6,567 0.80 4.75 1.09
1.00 4.63 7,860 0.80 4.53 1.07
1.00 1.58 2 0.71+ 4.79+ 1.00+
1.00 4.38 2 0.55+ 5.33+ 0.82+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
45
<PAGE> 50
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 YEAR INCOME INCOME DISTRIBUTIONS
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIME
PRIMARY A
Year ended 3/31/1999.................................. $1.00 $0.0521 $(0.0521) $(0.0521)
Year ended 3/31/1998.................................. 1.00 0.0547 (0.0547) (0.0547)
Year ended 3/31/1997.................................. 1.00 0.0520 (0.0520) (0.0520)
Period ended 3/31/1996(a)............................. 1.00 0.0468 (0.0468) (0.0468)
Year ended 5/31/1995.................................. 1.00 0.0519 (0.0519) (0.0519)
Year ended 5/31/1994.................................. 1.00 0.0318 (0.0318) (0.0318)
PRIMARY B
Year ended 3/31/1999.................................. $1.00 $0.0496 $(0.0496) $(0.0496)
Year ended 3/31/1998.................................. 1.00 0.0522 (0.0522) (0.0522)
Year ended 3/31/1997.................................. 1.00 0.0495 (0.0495) (0.0495)
Period ended 3/31/1996(a)............................. 1.00 0.0447 (0.0447) (0.0447)
Period ended 5/31/1995*............................... 1.00 0.0474 (0.0474) (0.0474)
INVESTOR A
Year ended 3/31/1999.................................. $1.00 $0.0486 $(0.0486) $(0.0486)
Year ended 3/31/1998.................................. 1.00 0.0512 (0.0512) (0.0512)
Year ended 3/31/1997.................................. 1.00 0.0485 (0.0485) (0.0485)
Period ended 3/31/1996(a)............................. 1.00 0.0438 (0.0438) (0.0438)
Year ended 5/31/1995.................................. 1.00 0.0475 (0.0475) (0.0475)
Year ended 5/31/1994.................................. 1.00 0.0283 (0.0283) (0.0283)
INVESTOR B
Year ended 3/31/1999.................................. $1.00 $0.0496 $(0.0496) $(0.0496)
Year ended 3/31/1998.................................. 1.00 0.0522 (0.0522) (0.0522)
Year ended 3/31/1997.................................. 1.00 0.0495 (0.0495) (0.0495)
Period ended 3/31/1996(a)............................. 1.00 0.0447 (0.0447) (0.0447)
Year ended 5/31/1995.................................. 1.00 0.0493 (0.0493) (0.0493)
Period ended 5/31/1994*............................... 1.00 0.0015 (0.0015) (0.0015)
INVESTOR C
Year ended 3/31/1999.................................. $1.00 $0.0496 $(0.0496) $(0.0496)
Year ended 3/31/1998.................................. 1.00 0.0522 (0.0522) (0.0522)
Year ended 3/31/1997.................................. 1.00 0.0495 (0.0495) (0.0495)
Period ended 3/31/1996(a)............................. 1.00 0.0447 (0.0447) (0.0447)
Year ended 5/31/1995.................................. 1.00 0.0493 (0.0493) (0.0493)
Period ended 5/31/1994*............................... 1.00 0.0155 (0.0155) (0.0155)
DAILY SHARES
Year ended 3/31/1999.................................. $1.00 $0.0471 $(0.0471) $(0.0471)
Year ended 3/31/1998.................................. 1.00 0.0497 (0.0497) (0.0497)
Year ended 3/31/1997.................................. 1.00 0.0470 (0.0470) (0.0470)
Period ended 3/31/1996(a)............................. 1.00 0.0439 (0.0439) (0.0439)
Period ended 5/31/1995*............................... 1.00 0.0173 (0.0173) (0.0173)
MARSICO SHARES
Period ended 3/31/1999*............................... $1.00 $0.0080 $(0.0080) $(0.0080)
</TABLE>
- ---------------
* Prime Primary B, Investor B, Investor C, Daily Shares and Marsico Shares
commenced operations on June 16, 1994, May 11, 1994, November 26, 1993,
February 9, 1995 and January 26, 1999, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
May 31.
(b) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements, was less than 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
46
<PAGE> 51
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
---------------------------------------------
OPERATING
NET ASSETS EXPENSES WITHOUT
NET ASSET VALUE TOTAL END OF YEAR OPERATING NET INVESTMENT WAIVERS AND/OR
END OF YEAR RETURN++ (000) EXPENSE INCOME REIMBURSEMENTS
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$1.00 5.34% $3,153,372 0.30%(b) 5.21% 0.34%(b)
1.00 5.61 2,852,555 0.30 5.48 0.35
1.00 5.34 2,533,688 0.30 5.21 0.35
1.00 4.79 2,472,469 0.30+ 5.62+ 0.37+
1.00 5.32 2,873,096 0.30 5.23 0.38
1.00 3.22 2,883,762 0.30 3.20 0.37
$1.00 5.08% $ 81,649 0.55%(b) 4.96% 0.59%(b)
1.00 5.34 8,132 0.55 5.23 0.60
1.00 5.05 184,021 0.55 4.96 0.60
1.00 4.57 96,305 0.55+ 5.37+ 0.62+
1.00 4.84 126,120 0.55+ 4.98+ 0.63+
$1.00 4.91% $ 695,703 0.65%(b) 4.86% 0.69%(b)
1.00 5.24 1,706,692 0.65 5.13 0.70
1.00 4.96 1,157,724 0.65 4.86 0.70
1.00 4.48 1,099,490 0.65+ 5.27+ 0.72+
1.00 4.85 698,358 0.75 4.78 0.83
1.00 2.86 511,833 0.65 2.85 0.72
$1.00 5.02% $ 738,673 0.55%(b) 4.96% 0.69%(b)
1.00 5.34 844,367 0.55 5.23 0.60
1.00 5.05 381,015 0.55 4.96 0.60
1.00 4.57 358,646 0.55+ 5.37+ 0.62+
1.00 5.03 216,973 0.56 4.97 0.64
1.00 0.15 2 0.55+ 2.95+ 0.62+
$1.00 5.02% $ 11,037 0.55%(b) 4.96% 0.59%(b)
1.00 5.34 96,149 0.55 5.23 0.60
1.00 5.05 93,678 0.55 4.96 0.60
1.00 4.57 74,822 0.55+ 5.37+ 0.62+
1.00 5.03 53,451 0.56 4.97 0.64
1.00 1.58 1,481 0.55+ 2.95+ 0.62+
$1.00 4.75% $2,718,028 0.80%(b) 4.71% 1.04%(b)
1.00 5.08 92,974 0.80 4.98 0.85
1.00 4.80 9,010 0.80 4.71 0.85
1.00 4.49 40 0.67+ 5.25+ 0.74+
1.00 1.74 2 0.55+ 4.98+ 0.63+
$1.00 0.80% $ 17,970 0.55%+(b) 4.96%+ 0.59%+(b)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
47
<PAGE> 52
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS
Nations Fund Trust (the "Trust") and Nations Fund, Inc. (the "Company") are each
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end investment company. At March 31, 1999, the Trust offered
thirty-eight separate portfolios and the Company offered nine separate
portfolios. These financial statements pertain only to the money market
portfolios of the Trust and the Company (each a "Fund" and collectively, the
"Funds"). Financial statements for the other portfolios of the Trust and the
Company are presented under separate cover. The Funds currently offer six
classes of shares: Primary A Shares, Primary B Shares, Investor A Shares,
Investor B Shares, Investor C Shares and Daily Shares. Additionally, the Prime
Fund offers Marsico Shares. Shareholders of a Fund have equal voting rights on
matters affecting all shareholders of the Fund. In addition, each class of
shares of a Fund has exclusive voting rights on matters that relate solely to
its class and separate voting rights on matters in which the interests of one
class differ from the interests of any other class.
1. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Funds in the preparation of
their financial statements.
Securities Valuation: Securities are valued on the basis of amortized cost,
which approximates market value. Amortized cost valuation involves initially
valuing an instrument at its cost and thereafter assuming a constant
amortization to maturity of any discount or premium, as long as the effect of
fluctuating interest rates on the market value of the instrument is not
significant. Restricted securities and certain other assets are valued by the
investment advisor under the supervision of the Board of Trustees/Directors.
Repurchase Agreements: Each Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and date, thereby determining the yield during the Fund's holding period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the collateral is at
least equal at all times to the total amount of the repurchase obligations,
including interest. Generally, in the event of counterparty default, the Fund
has the right to use the collateral to offset losses incurred. There would be a
potential loss to the Fund in the event the Fund is delayed or prevented from
exercising its right to dispose of the collateral securities, including the risk
of a possible decline in the value of the underlying securities during the
period while the Fund seeks to assert its right. The Funds' investment advisor
and sub-advisor, acting under the supervision of the Board of
Trustees/Directors, monitor the value of collateral received as well as the
creditworthiness of those banks and dealers with which the Funds enter into
repurchase agreements to evaluate potential risks.
Reverse Repurchase Agreements: Each Fund may enter into reverse repurchase
agreements with institutions that the Funds' investment advisor and sub-advisor
have determined are creditworthy. Under the terms of a typical reverse
repurchase agreement, the Fund sells securities and agrees to repurchase them at
a mutually agreed upon date and price. At the time the Fund enters into a
reverse repurchase agreement, it establishes a segregated account with its
custodian bank in which it will maintain cash, U.S. Government securities or
other appropriate liquid securities at least equal in value to the Fund's
obligations arising under the reverse repurchase agreement. Reverse repurchase
agreements involve the risk that the market value of the securities purchased
with the proceeds from the sale of securities received by the Fund may decline
below the price of the securities that the Fund is obligated to repurchase.
Securities subject to repurchase under reverse repurchase agreements are
designated in the Statement of Net Assets.
At March 31, 1999, the Treasury Fund had reverse repurchase agreements
outstanding as follows:
<TABLE>
<S> <C>
Maturity Amount............................ $529,968,000
Maturity Date.............................. 04/01/99
Market Value of Assets Sold Under
Agreements............................... $521,956,000
</TABLE>
48
<PAGE> 53
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The average daily balance of reverse repurchase agreements outstanding by the
Treasury Fund during the year ended March 31, 1999 was $566,880,293.
The proceeds received by the Treasury Fund under the reverse repurchase
agreements were reinvested in a tri-party repurchase agreement. Net fees earned
during the year ended March 31, 1999, representing the difference between
interest rates on the reverse repurchase and repurchase agreements, amounted to
$690,107 and have been included in interest income in the Statement of
Operations.
Securities Transactions and Investment Income: Securities transactions are
accounted for on trade date. Realized gains and losses are computed based on the
specific identification of securities sold. Interest income, adjusted for
accretion of discounts and amortization of premiums calculated ratably, is
earned from settlement date and recorded on an accrual basis. Dividend income is
recorded on ex-dividend date. Each Fund's investment income and realized and
unrealized gains and losses are allocated among its classes based upon the
relative net assets of each class of shares.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income is not accrued
until settlement date. At the time a Fund enters into such transactions, it
instructs the custodian to segregate assets with a current value at least equal
to the amount of its when-issued or delayed-delivery purchase commitments.
Dividends and Distributions to Shareholders: It is the policy of each Fund to
declare dividends from net investment income daily and to pay such dividends
monthly. Each Fund will distribute net realized short-term capital gains
annually after the fiscal year in which the capital gains were earned or more
frequently to maintain a net asset value of $1.00 per share, unless offset by
any available capital loss carryforward. Income distributions and capital gain
distributions on a Fund level are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
Certain reclassifications are made to each Fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryforwards) under Federal income tax regulations. These reclassifications are
due to different book and tax accounting for capital loss carry forwards from
mergers.
Reclassifications for the year ended March 31, 1999 were as follows:
<TABLE>
<CAPTION>
INCREASE/
INCREASE/ (DECREASE)
(DECREASE) ACCUMULATED
PAID-IN NET REALIZED
CAPITAL GAIN/(LOSS)
(000) (000)
-------------------------
<S> <C> <C>
Tax Exempt................................. $ 43 $ (43)
Treasury................................... 137 (137)
Government Money Market.................... 3 (3)
Prime...................................... 367 (367)
</TABLE>
Federal Income Tax: Each Fund intends to continue to qualify as a regulated
investment company by complying with the applicable requirements of the Internal
Revenue Code of 1986, as amended, and by distributing substantially all of its
earnings to its shareholders. Therefore, no provision is made for Federal income
or excise taxes.
Expenses: General expenses of the Trust or the Company are allocated to the
Funds based upon their relative net assets or other expense allocation
methodologies determined by the nature of the expense. Expenses directly
attributable to a Fund or class of shares are charged to such Fund or class.
Expenses not directly attributable to any class of shares are prorated based on
the relative net assets of each class.
Cash Flow Information: Cash, as used in the Statement of Cash Flows, is the
amount reported in the Statements of Net Assets and represents cash on hand at
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
for the Treasury Fund.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS
Each of the Trust and the Company has entered into an investment advisory
agreement (the "Investment Advisory Agreements") with NationsBanc Advisors, Inc.
("NBAI"), a wholly-owned subsidiary of NationsBank, N.A. ("NationsBank"), which
in turn
49
<PAGE> 54
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
is an indirect wholly-owned banking subsidiary of Bank of America Corporation, a
bank holding company organized as a Delaware corporation, pursuant to which NBAI
provides investment advisory services to the Funds. Under the Investment
Advisory Agreements, NBAI is entitled to receive an advisory fee, calculated
daily and payable monthly, based on the average daily net assets of each Fund as
follows: (i) Government Money Market and Tax Exempt at the annual rate of 0.40%
and (ii) Prime and Treasury at the annual rate of 0.25% on combined net assets
up to $250 million and 0.20% on combined net assets exceeding $250 million.
Each of the Trust and the Company has entered into a sub-advisory agreement with
NBAI and TradeStreet Investment Associates, Inc. ("TradeStreet"), a wholly-owned
subsidiary of NationsBank, pursuant to which TradeStreet is entitled to receive
a fee from NBAI at the annual rate of 0.055% of each Fund's average daily net
assets.
Stephens Inc. ("Stephens") serves as the co-administrator of the Trust and the
Company. On December 1, 1998, NBAI began serving as co-administrator of the
Funds with Stephens. Under the new arrangement, Stephens and NBAI are entitled
to receive a combined fee, computed daily and paid monthly at the annual rate of
0.10% of each Fund's average daily net assets. Prior to December 1, 1998, First
Data Investor Services Group, Inc. ("First Data"), a wholly-owned subsidiary of
First Data Corporation, served as co-administrator. Stephens and First Data were
entitled to receive a combined fee, computed daily and paid monthly, at the
annual rate of 0.10% of each Fund's average daily net assets. Effective December
1, 1998, The Bank of New York ("BNY") began serving as the sub-administrator of
the Trust and the Company, respectively, pursuant to an agreement with NBAI, and
NBAI ceased to serve as sub-administrator. For the year ended March 31, 1999,
Stephens earned $9,091,296 from the Funds for its administration services, of
which $1,263,197, net of fee waivers, was paid to NBAI for its services.
The investment advisor, sub-advisor and distributor may, from time to time,
voluntarily reduce their fees payable by each Fund. For the year ended March 31,
1999, the investment advisor agreed to voluntarily reimburse expenses and/or
waive its advisory and co-administration fees to the extent that total expenses
(excluding shareholder servicing and distribution fees) exceed 0.30% of each
Fund's average daily net assets.
Effective October 19, 1998, BNY began serving as the custodian of the Trust's
and the Company's assets. Previously, NationsBank of Texas, N.A. ("NationsBank
of Texas") served as custodian until May 6, 1998, when it was merged with
NationsBank. BNY acted as sub-custodian to the Funds until that date. For the
year ended March 31, 1999, NationsBank of Texas and NationsBank earned $14,122
for providing such services. For the year ended March 31, 1999, expenses of the
Treasury, Government Money Market and Prime Funds were reduced by $12,804 under
expense offset arrangements with BNY. The Funds could have invested a portion of
the assets utilized in connection with the expense offset arrangements in an
income producing asset if they had not entered into such arrangements. The Tax
Exempt Fund does not participate in the expense offset arrangement.
First Data serves as the transfer agent for the Funds' shares. NationsBank of
Texas also served as the sub-transfer agent for the Primary Shares of the Funds
until it merged with NationsBank. NationsBank began serving as the sub-transfer
agent for the Primary Shares of the Funds on May 6, 1998 and is providing the
same services as were previously provided by NationsBank of Texas. For the year
ended March 31, 1999, NationsBank of Texas and NationsBank earned approximately
$18,592 for providing such services. Stephens serves as distributor of the
Funds' shares.
The Trust and the Company pay each unaffiliated Trustee or Director an annual
fee of $1,000 ($3,000 for the Chairman of the Board), plus $500 per Fund and an
additional $1,000 for each in-person board meeting, and $500 for each telephonic
board meeting attended. The Trust and the Company also reimburse expenses
incurred by each unaffiliated Trustee or Director in attending such meetings.
The Trust's and the Company's eligible Trustees or Directors, respectively, may
participate in non-qualified deferred compensation and retirement plans which
may be terminated at any time. All benefits provided under these plans are
unfunded and any payments to plan participants are paid solely out of the Funds'
assets. Income earned on each plan participant's deferral account is tied to the
rate of return of the eligible mutual funds selected by the
50
<PAGE> 55
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
participants or, if no funds are selected, to the rate of return of the Treasury
Fund. The expense for the deferred compensation and retirement plans is included
in "Trustees'/Directors' fees and expenses" in the Statements of Operations.
A significant portion of each Fund's Primary A Shares represents investments by
fiduciary accounts over which NationsBank and its affiliates have either sole or
joint investment discretion.
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS
The Trust and the Company each have adopted shareholder servicing plans and
distribution plans for the Primary B, Investor A, Investor B and Daily Shares of
each Fund and a shareholder servicing plan for Investor C and the Marsico Shares
of the Prime Fund. The shareholder servicing plans permit the Funds to
compensate or reimburse servicing agents for shareholder services provided by
the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1
under the 1940 Act, permit the Funds to compensate or reimburse the distributor
(and for Investor A Shares, the distributor and/or selling agents) for
activities or expenses primarily intended to result in the sale of the classes'
shares. Payments are made at an annual rate, as a percentage of average daily
net assets set from time to time by the Board of Trustees/Directors, and are
charged as expenses of each Fund directly to the applicable class. A substantial
portion of the expenses incurred pursuant to these plans is paid to affiliates
of NationsBank and NBAI.
At March 31, 1999, the rates in effect and plan limits, as a percentage of
average daily net assets, were as follows:
<TABLE>
<CAPTION>
CURRENT PLAN
RATE LIMIT
----------------
<S> <C> <C>
Primary B, Investor A, Investor C, Daily and
Marsico Shareholder Servicing Plans............ 0.25% 0.25%
Investor B Shareholder Servicing Plan Prime,
Treasury, Government Money Market.............. 0.25% 0.25%
Tax Exempt..................................... 0.20% 0.25%
Investor A Distribution Plan.................... 0.10% 0.10%
Investor B Distribution Plan.................... 0.00% 0.10%
Daily Distribution Plan......................... 0.25% 0.45%
</TABLE>
4. SHARES OF BENEFICIAL INTEREST/CAPITAL STOCK
At March 31, 1999, an unlimited number of shares of beneficial interest without
par value were authorized for the Trust and 480,000,000,000 shares of $.001 par
value capital stock were authorized for the Company. The Trust's Declaration of
Trust and the Company's Articles of Incorporation authorize the Board of
Trustees/Directors to classify or reclassify any authorized, but unissued shares
into one or more additional classes or series of shares. See Schedule of Capital
Stock Activity.
5. RESTRICTED SECURITIES
Certain securities may be subject to legal restrictions and may be difficult to
sell. In addition, no Fund will invest more than 10% of the value of its net
assets in securities that are illiquid.
The following securities are considered both illiquid and restricted as to
resale. Accordingly, they are valued at fair value in good faith by the
investment advisor under the direction of the Board of Trustees/ Directors, as
applicable, taking into consideration such factors as the relevant Board deems
appropriate.
51
<PAGE> 56
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
TAX EXEMPT
<TABLE>
<CAPTION>
PERCENTAGE HISTORICAL
PAR VALUE VALUE FAIR VALUE OF NET COST
ACQUISITION 3/31/99 PER UNIT 3/31/99 ASSETS 3/31/99
SECURITY DATE (000) 3/31/99 (000) 3/31/99 (000)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Airport Authority, Inc., Texas, Special
Facilities Revenue, (Federal Express Project)
Series 1999PA-460, AMT,
3.17% 04/01/21.................................. 3/22/99 $28,030 $1.00 $28,030 1.0% $28,030
Bexar County, Texas, Health Facilities
Development Corporation, Revenue, (Army
Retirement Community Project) Series 1995B,
3.00% 07/01/11.................................. 6/26/98 3,460 1.00 3,460 0.1 3,460
Florida State, Board of Education, Capital
Outlay, Series 1996BTP-179,
3.20% 06/01/01.................................. 1/10/96 14,999 1.00 14,999 0.5 14,999
Montana State, Housing Board, Tender Option
Certificates, Series 1998BT-298, AMT,
3.25% 07/01/31.................................. 4/22/98 4,925 1.00 4,925 0.2 4,925
</TABLE>
TREASURY
<TABLE>
<CAPTION>
PERCENTAGE HISTORICAL
PAR VALUE VALUE FAIR VALUE OF NET COST
ACQUISITION 3/31/99 PER UNIT 3/31/99 ASSETS 3/31/99
SECURITY DATE (000) 3/31/99 (000) 3/31/99 (000)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Repurchase Agreement with Morgan Stanley Group
Inc.,
4.81% 04/30/99................................... 11/3/98 $90,000 $1.00 $90,000 3.7% $90,000
</TABLE>
PRIME
<TABLE>
<CAPTION>
PERCENTAGE HISTORICAL
PAR VALUE VALUE FAIR VALUE OF NET COST
ACQUISITION 3/31/99 PER UNIT 3/31/99 ASSETS 3/31/99
SECURITY DATE (000) 3/31/99 (000) 3/31/99 (000)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Allstate Life Insurance Company:
5.107% 06/29/99#................................ 11/01/98 $25,000 $1.00 $25,000 0.3% $25,000
5.107% 06/29/99#................................ 12/01/98 25,000 1.00 25,000 0.3 25,000
Anchor National Life Insurance Company:
5.070% 06/29/99#................................ 1/01/99 50,000 1.00 50,000 0.7 50,000
5.136% 06/29/99#................................ 12/01/98 25,000 1.00 25,000 0.3 25,000
Commonwealth Life Insurance Company:
5.060% 04/01/99+++.............................. 3/05/99 50,000 1.00 50,000 0.7 50,000
5.160% 09/27/99#................................ 12/01/98 62,000 1.00 62,000 0.8 62,000
5.160% 09/27/99#................................ 2/02/99 10,000 1.00 10,000 0.1 10,000
First Allmerica Life Insurance Company:
5.070% 06/29/99#................................ 2/24/99 50,000 1.00 50,000 0.7 50,000
Life Insurance Company of Georgia:
5.176% 09/27/99#................................ 1/01/99 60,000 1.00 60,000 0.8 60,000
Peoples Security Life Insurance Company:
5.160% 04/01/99+++.............................. 1/05/99 20,000 1.00 20,000 0.3 20,000
5.210% 04/01/99+++.............................. 2/05/99 20,000 1.00 20,000 0.3 20,000
SMM Trust, Series 1999-B:
5.449% 03/15/00................................. 3/05/99 50,000 1.00 50,000 0.7 50,000
Sun Life Insurance Company of America:
5.166% 09/27/99#................................ 10/01/98 50,000 1.00 50,000 0.7 50,000
Travelers Life Insurance Company:
5.013% 04/01/99+++.............................. 2/03/99 25,000 1.00 25,000 0.3 25,000
5.040% 06/01/99+++.............................. 8/31/98 25,000 1.00 25,000 0.3 25,000
</TABLE>
- ---------------
# Put date
+++ Reset date
52
<PAGE> 57
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The following securities of the Prime Fund are restricted as to resale, however,
they are considered liquid due to the put feature which allows the Fund to
put the security back to the issuer at par value within seven calendar days.
<TABLE>
<CAPTION>
PERCENTAGE HISTORICAL
PAR VALUE VALUE FAIR VALUE OF NET COST
ACQUISITION 3/31/99 PER UNIT 3/31/99 ASSETS 3/31/99
SECURITY DATE (000) 3/31/99 (000) 3/31/99 (000)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
General American Life Insurance Company
5.140% 04/07/99#................................ 2/01/99 $50,000 $1.00 $50,000 0.7% $50,000
5.140% 04/07/99#................................ 4/09/98 50,000 1.00 50,000 0.7 50,000
Life Insurance Company of Virginia
4.951% 04/07/99#................................ 3/01/99 25,000 1.00 25,000 0.3 25,000
4.951% 04/07/99#................................ 9/01/98 50,000 1.00 50,000 0.7 50,000
4.951% 04/07/99#................................ 2/01/99 25,000 1.00 25,000 0.3 25,000
New York Life Insurance Company:
5.106% 04/07/99#................................ 11/10/98 50,000 1.00 50,000 0.7 50,000
</TABLE>
- ---------------
# Put date
6. LINE OF CREDIT
The Trust and the Company participate in an uncommitted line of credit provided
by BNY under a line of credit agreement (the "Agreement"). Advances under the
Agreement are taken primarily for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. Interest on borrowings is payable at the Federal
Funds Rate plus 0.50% on an annualized basis. Each participating Fund maintains
a ratio of no less than 4 to 1 net assets (not including funds borrowed pursuant
to the Agreement) to aggregate amount of indebtedness pursuant to the Agreement.
At March 31, 1999, there were no loans outstanding under this Agreement. For the
year ended March 31, 1999, borrowings by the Funds under the Agreement were as
follows:
<TABLE>
<CAPTION>
AVERAGE
AMOUNT AVERAGE
OUTSTANDING INTEREST
FUND (000) RATE
- -------------------------------------------------------------------
<S> <C> <C>
Tax Exempt................................ $173 5.33%
</TABLE>
The average amount outstanding was calculated based on daily balances in the
period.
7. CAPITAL LOSS CARRYFORWARD
At March 31, 1999, the Funds had available for Federal income tax purposes the
following unused capital losses expiring March 31:
<TABLE>
<CAPTION>
2002 2003 2004 2005 2006 2007
(000) (000) (000) (000) (000) (000)
- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Treasury............. $16 $ 26 $95 $ 31 $14 $9
Government Money
Market.............. -- 59 2 -- -- --
Prime................ -- 131 35 436 23 --
</TABLE>
53
<PAGE> 58
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. REORGANIZATIONS
On May 16, 1997, certain Funds, as listed below (each an "Acquiring Fund"),
acquired the assets and certain liabilities of The Pilot Funds, also listed
below (each an "Acquired Fund"), in a tax-free reorganization in exchange for
shares of the Acquiring Fund, pursuant to a plan of reorganization approved by
the Acquired Fund's shareholders. The value of shares issued by the Acquiring
Fund is presented in the Schedule of Capital Stock Activity. Net assets as of
the reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS OF
TOTAL NET ASSETS OF TOTAL NET ASSETS OF ACQUIRING FUND
ACQUIRING ACQUIRED ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION
FUND FUND (000) (000) (000)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prime Pilot Short-Term $1,854,583 $4,275,977 $6,130,560
Diversified
Assets Fund
Treasury Pilot Short-Term 1,619,654 2,618,142 4,237,796
U.S. Treasury
Fund
Tax Exempt Pilot Short-Term 391,958 1,461,773 1,853,731
Tax Exempt
Diversified Fund
Tax Exempt Pilot Missouri 226,780 1,853,731 2,080,511
Short-Term Tax
Exempt Fund
</TABLE>
On May 15, 1998, certain Funds, as listed below (each an "Acquiring Fund"),
acquired the assets and certain liabilities of The Emerald Funds, also listed
below (each an "Acquired Fund"), in a tax-free reorganization in exchange for
shares of the Acquiring Fund, pursuant to a plan of reorganization approved by
the Acquired Fund's shareholders. The value of shares issued by the Acquiring
Fund is presented in the Schedule of Capital Stock Activity. Net assets as of
the reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS OF
TOTAL NET ASSETS OF TOTAL NET ASSETS OF ACQUIRING FUND
ACQUIRING ACQUIRED ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION
FUND FUND (000) (000) (000)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Exempt Emerald Tax-Exempt Fund $ 170,700 $2,426,697 $2,597,397
Prime Emerald Prime Fund 2,174,402 5,517,462 7,691,864
Treasury Emerald Treasury Fund 875,235 2,468,080 3,343,315
</TABLE>
On June 19, 1998, Tax Exempt Fund ("Acquiring Fund"), acquired the assets of the
Common Trust Municipal Temp Fund ("Acquired Fund"), a common trust fund managed
by NationsBank, in a tax-free exchange for shares of the Acquiring Fund. The
value of shares issued by the Acquiring Fund is presented in the Schedule of
Capital Stock Activity. Net assets as of the conversion date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS OF
TOTAL NET ASSETS OF TOTAL NET ASSETS OF ACQUIRING FUND
ACQUIRED FUND ACQUIRING FUND AFTER CONVERSION
(000) (000) (000)
- ---------------------------------------------------------------
<S> <C> <C>
$52,112 $2,597,973 $2,650,085
</TABLE>
54
<PAGE> 59
NATIONS FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS, DIRECTORS AND TRUSTEES OF NATIONS FUNDS
In our opinion, the accompanying statements of net assets, and the related
statements of operations, of cash flows for Nations Treasury Fund, and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Nations Tax-Exempt Fund, Nations
Treasury Fund, Nations Government Money Market Fund and Nations Prime Fund
(portfolios of Nations Fund Trust or Nations Fund, Inc., hereafter referred to
as the "Funds") at March 31, 1999, and the results of each of their operations,
the cash flows for Nations Treasury Fund, the changes in each of their net
assets and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at March 31, 1999 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
May 28, 1999
55
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NATIONS FUNDS
TAX INFORMATION (UNAUDITED)
For the year ended March 31, 1999, all of the distributions made from investment
income of Nations Tax Exempt Fund, are tax exempt for regular Federal income tax
purposes. A portion of this income may be subject to Federal Alternative Minimum
Tax.
56
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[GRAPHIC DEPICTING BASKETS]
<PAGE> 62
NATIONS FUNDS [LOGO]
P.O. Box 32602
Charlotte, NC 28234-4602
Toll Free 1-800-982-2271
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BULK RATE
U.S. POSTAGE
PAID
N READING, MA
PERMIT NO.
105
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AR2 IN96117 3/99
