The American
Funds
Tax-Exempt
Series I
The Tax-Exempt Fund of Maryland
The Tax-Exempt Fund of Virginia
Annual Report
July 31, 1995
(Logo)
The American Funds Group(R)
Fund results in this report were computed without a sales charge
unless otherwise indicated. Here are the total returns and average annual
compound returns with all distributions reinvested for periods ended June
30, 1995 (the most recent calendar quarter), assuming payment of the 4.75%
maximum sales charge at the beginning of the stated periods - For The
Tax-Exempt Fund of Maryland's lifetime (from 8/14/86): +67.67%, or +6.00% a
year; 5 years: +35.46%, or +6.26% a year; 12 months: +3.08%. For The Tax_
Exempt Fund of Virginia's lifetime (from 8/14/86): +74.53%, or +6.47% a
year; 5 years: +36.66%, or +6.45% a year; 12 months: +3.27%. Sales charges
are lower for accounts of $25,000 or more.
The Funds' 30-day yields as of August 31, 1995, calculated in
accordance with the Securities and Exchange Commission formula, were 4.49%
for the Maryland Fund and 4.48% for the Virginia Fund. The Funds'
distribution rates as of that date were 5.14% and 5.18%, respectively. The
SEC yield reflects income earned by the Funds, while the distribution rate
reflects dividends actually paid by the Funds.
The figures in this report reflect past results. Share price and
return will vary, so you may have a gain or loss of principal when you sell
your shares. Fund shares are not deposits or obligations of, or insured or
guaranteed by, the U.S. government, any financial institution, the Federal
Deposit Insurance Corporation, or any other agency, entity or person.
Investments in the Funds are subject to risks, including interest rate
fluctuations. Additionally, each Fund is more susceptible to factors adve-
rsely affecting issuers of their state's tax-exempt securities than a more
widely diversified municipal bond fund. Accordingly, investors should
maintain a long-term perspective.
Fellow Shareholders
After experiencing the worst of times in 1994, the municipal bond
market enjoyed the best of times - with one exception - during the second
half of the Funds' fiscal year, which ended July 31, 1995.
On February 1, the market was in the midst of an unusually strong
rally that had begun last November, when a number of favorable economic
trends - including moderate growth and subdued inflation - converged to
bolster bond prices. By May, however, the municipal market's steady ascent
was halted when a national flat tax rate was proposed by several members of
Congress. While enactment of such a radical change to the tax code is
remote, speculative talk about its possible effects influenced many
investors to sell their municipal holdings. Under most of the flat tax
proposals, interest and dividend income would not be taxed, thereby
negating a key advantage of municipal bonds.
Notwithstanding these crosscurrents, The Tax-Exempt Fund of Maryland
and The Tax-Exempt Fund of Virginia produced relatively good results for
the past fiscal year.
Twelve months ago, the net asset value of the Maryland Fund was $15.00
a share; on July 31, 1995 it was $15.29. The Virginia Fund began the
fiscal year at $15.49 and ended at $15.79. If you reinvested the dividends
totaling 79.9 cents and 82.4 cents a share, respectively, the value of your
holdings increased 7.58% for the Maryland Fund and 7.56% for the Virginia
Fund. Based upon the Funds' 30-day tax-free distribution rates for July
1995 - 5.12% for Maryland and 5.16% for Virginia - the equivalent taxable
yield for individuals in the top tax bracket was 9.14% and 9.05%,
respectively, as reported in the "Highlights" on page 3.
We continue to believe that intensive research is the most effective
way to add value to the Funds. Nowhere is our research effort more
critical than in our ongoing attempt to diversify the risks in each
portfolio with the proper selection and proportion of higher yielding,
lower quality bonds. As of July 31, the Maryland and Virginia Funds had
17.4% and 5.2%, respectively, invested in bonds rated lower than A or not
rated by Moody's or Standard & Poor's. On the conservative side, 41.7% of
the assets in the Maryland Fund consisted of triple A-rated bonds, as did
43.0% in the Virginia Fund.
Currently, we are maintaining a cautious outlook amid signs the
economy will likely pick up over the next few months. The Funds' assets
continue to be diversified among numerous cities, counties, industries and
projects throughout both states. The average maturities of the Funds'
portfolios are about 11 years. As always, we remain firmly committed to
the effort that has enabled the Funds to benefit in the past from the value
of municipal bonds selected through intensive research.
We take this opportunity to welcome our new shareholders and look
forward to reporting to you again in six months.
Sincerely,
(Signature) (Signature) (Signature)
Stephen Hartwell James H. Lemon, Jr. Harry J. Lister
Chairman Vice Chairman President
September 18, 1995
Growth of a $10,000 Investment
AVERAGE ANNUAL COMPOUND RETURNS<F1>
(for periods ended July 31, 1995)
1 Year 5 Years Lifetime
The Tax-
Exempt Fund
of Maryland +2.45% +6.23% +6.04%
The Tax-
Exempt Fund
of Virginia +2.47% +6.39% +6.51%
[FN]
<F1>Assumes reinvestment of all distributions and payment of the 4.75%
maximum sales charge at the beginning of the stated periods.
[/FN]
(Chart 1: A line graph plotting the following data)
The Tax The Tax Lehman Brothers
Exempt Fund Exempt Fund Municipal Consumer
Year of Maryland of Virginia Bond Index Price Index
August 14, 1986 9525 9525 10000 10000
July 31, 1987 9444 9798 10907 10390
July 31, 1988 10122 10412 11673 10820
July 31, 1989 11313 11620 13095 11363
July 31, 1990 11918 12302 14002 11912
July 31, 1991 12804 13288 15225 12439
July 31, 1992 14433 14989 17317 12829
July 31, 1993 15508 16081 18848 13189
July 31, 1994 15728 16360 19201 13549
July 31, 1995 16920 17597 19825 13892
The Funds' results in the graph reflect payment of the 4.75% maximum sales
charge on a $10,000 investment. Thus, the net amount invested in each Fund
was $9,525. The graph reflects the lifetime results from the Funds'
inception date of August 14, 1986. All dividends and capital gain
distributions are reinvested in additional shares without a sales charge.
The Lehman Brothers Municipal Bond Index is a national index that includes
about 20,000 bonds and reflects approximately $300 billion of market
capitalization. It excludes bonds subject to the alternative minimum tax
and bonds with floating or zero coupons. It is not intended to be generally
representative of any municipal bond fund that invests exclusively in the
issues of a specific state. A broad-based municipal bond index generally
representative of the Maryland and Virginia Funds is not currently
available. The indexes are unmanaged and do not reflect sales charges,
commissions or expenses. Past results are not predictive of future results.
Highlights-as of July 31, 1995
The Tax-Exempt The Tax-Exempt
Fund of Maryland Fund of Virginia
Assets:
Net Assets $75,144,082 $91,682,610
Net Asset Value Per Share $15.29 $15.79
Distribution Rate<F1> 5.12% 5.16%
Quality
Diversification:
Moody's/S&P Ratings
(best of either)
Aaa/AAA 41.69% 43.00%
Aa/AA 19.72 39.37
A/A 15.05 7.96
Lower than A or nonrated 17.42 5.16
Cash and Equivalents 6.12 4.51
Total 100.00% 100.00%
Maturity
Diversification:<F2>
Under 1 year 6.12% 4.51%
1 to 10 years 26.26 30.65
10+ to 20 years 40.66 48.94
20+ to 30 years 25.59 12.77
Over 30 years 1.37 3.13
Total 100.00% 100.00%
Average Life<F3> 10.95 years 11.31 years
To match Maryland's triple tax-free distribution rate of 5.12%, investors
with a combined effective Federal/state/county tax rate of 44% would have
to earn a taxable yield of 9.14%. For Virginia investors with a combined
effective Federal/state tax rate of 43%, it would take a taxable yield of
9.05% to equal the Fund's double tax-free distribution rate of 5.16%.
[FN]
<F1> Distribution rate for July 1995 is one month's dividend annualized,
divided by the average offering price for the month. The 30-day yield for
July, calculated per the Securities and Exchange Commission formula, at
maximum sales charge: Maryland, 4.65% and Virginia, 4.57%. For the latest
yields based on actual distributions, call toll-free 800/421-0180.
<F2> Securities are included at pre-refunded dates, not maturity dates.
<F3> Average life more accurately reflects the potential impact of call
options. Should no call options be exercised, the average maturity of the
Maryland Fund and the Virginia Fund is 16.66 years and 17.19 years,
respectively.
[/FN]
<TABLE>
<CAPTION>
The Tax-Exempt Fund of Maryland
Investment Portfolio, July 31, 1995
Principal
Amount Market
(000) Value
<S> <C> <C>
Tax-Exempt Securities Maturing in More than One Year-93.88%
College & University Revenue - 5.03%
Frederick County, College Revenue Bonds,
(Hood College Project), 1990 Series:
7.05% 2004 $ 410 $ 453,874
7.05% 2005 455 501,592
Maryland Health and Higher Educational Facilities Authority,
Refunding Revenue Bonds, Johns Hopkins University Issue,
Series 1988, 7.375% 2008 1,000 1,093,830
University of Maryland System Auxiliary Facility and Tuition
Revenue Bonds:
1992 Series A, 6.30% 2009 750 787,875
1993 Refunding Series C, 5.00% 2010 1,000 939,140
3,776,311
General Obligations (Local) - 10.10%
Anne Arundel County, Consolidated Water and Sewer:
1993 Refunding Series, 5.25% 2011 1,000 964,670
1985 Refunding Series, 5.30% 2016 1,000 935,510
Baltimore County:
Consolidated Public Improvement Bonds, 1990 Series, 6.75% 1999 600 650,172
Metropolitan District Bonds, 63rd Issue, 1992 Series, 6.10% 2006 250 268,833
Frederick County, Public Facilities Bonds:
1990, 8.875% 2002 250 311,650
1993, Series B, 5.125% 2007 995 987,547
Harford County Consolidated Public Improvement Bonds,
Series 1992, 5.80% 2010 530 539,699
Howard County Consolidated Public Improvement Refunding Bonds,
1993 Series A, 5.25% 2007 1,500 1,505,760
Montgomery County, Consolidated Public Improvement Refunding
Bonds of 1993, Series A, 5.00% 2010 1,000 946,960
Wicomico County, Consolidated Public Improvement Bonds of
1993, 4.60% 2005 500 476,600
7,587,401
Hospital & Health Facilities Revenue - 15.22%
Maryland Health and Higher Educational Facilities Authority:
Good Samaritan Hospital Issue, Revenue Bonds, Series 1993,
5.70% 2009 $1,000 $ 996,140
Greater Baltimore Medical Center Issue, Revenue Bonds,
Series 1991, 6.00% 2021 625 587,525
Howard County, General Hospital Issue, Series 1993:
5.50% 2013 1,500 1,309,485
5.50% 2021 2,000 1,655,700
Johns Hopkins Hospital Issue, Revenue Refunding Bonds, Series 1993:
5.60% 2009 850 841,857
5.00% 2023 1,000 849,770
Memorial Hospital of Cumberland Issue, Revenue Refunding
Bonds, Series 1992, 6.50% 2010 750 764,670
Peninsula Regional Medical Center Issue, Project and Refunding
Revenue Bonds, Series 1993, 5.00% 2023 2,000 1,671,640
Suburban Hospital Issue, Revenue Refunding Bonds,
Series 1993, 5.125% 2021 3,000 2,527,260
Prince George's County, Hospital Revenue Bonds
(Dimensions Health Corporation Issue), Series 1992, 7.20% 2006 215 233,802
11,437,849
Housing Finance Authority Revenue - 7.10%
Maryland Community Development Administration, Department of
Housing and Community Development, Single-Family Program Bonds:
1990 First Series, 7.60% 2017 495 529,675
1994 Fifth Series, 5.875% 2017 1,490 1,495,126
1988 Third Series, 8.00% 2018 1,000 1,069,650
Montgomery County, Maryland Housing Opportunities Commission,
Single Family Mortgage Revenue, 1986 Series C, 7.25% 2013 750 781,005
Prince George's County Housing Authority, GNMA/FNMA
Collateralized Single Family Mortgage Bonds,
Series 1994 A, 6.60% 2025 1,000 1,021,610
Commonwealth of Puerto Rico Housing Finance Corporation,
Single Family Mortgage Revenue Bonds, 1st Portfolio:
1988 Series A, 7.80% 2021 95 101,146
1988 Series B, 7.65% 2022 320 340,895
5,339,107
Industrial Development Revenue - 1.44%
Mayor and City Council of Baltimore, Port Facilities Revenue
Bonds (Consolidation Coal Sales Company Project):
Series 1984 A, 6.50% 2011 $ 500 $ 540,915
Series 1984 B, 6.50% 2011 500 540,916
1,081,831
Insured - 17.22%
of Baltimore, Refunding Revenue Bonds, FGIC Insured:
1995, Series A, 7.25% 2005 2,000 2,361,340
1994, Series A, 6.00% 2015 1,500 1,542,240
Charles County, Consolidated Public Improvement Bonds of 1993,
Series A, FGIC Insured, 5.25% 2003 715 741,619
City of Frederick, General Improvement Bonds, 1992 Refunding
Series, FGIC Insured, 6.125% 2008 890 952,220
Maryland Health and Higher Educational Facilities Authority:
Anne Arundel Medical Center Issue, Revenue Bonds,
AMBAC Insured:
Series 1993, 5.25% 2013 1,000 932,830
Series 1993, 5.00% 2023 500 432,035
Francis Scott Key Medical Center Issue, Refunding Revenue
Bonds, Series 1993, FGIC Insured, 5.00% 2013 500 451,635
Holy Cross Hospital Issue, Series 1990 A,
AMBAC Insured, 7.00% 2004 750 827,775
Memorial Hospital of Easton, Series 1989 B,
MBIA Insured, 7.00% 2012 1,200 1,300,548
Sinai Hospital of Baltimore Issue Project and Revenue
Refunding Bonds, Series 1993, AMBAC Insured, 5.25% 2019 2,000 1,808,340
Commonwealth of Puerto Rico, Public Improvement Bonds of 1987,
MBIA Insured, 6.75% 2006 500 530,735
Washington, D.C. Metropolitan Area Transit Authority,
Gross Revenue Transit Refunding Bonds, Series 1993,
FGIC Insured, 6.00% 2008 1,000 1,061,920
12,943,237
Life Care Facilities Revenue - 9.45%
Calvert County, Economic Development Revenue Bonds
(Asbury-Solomons Island Facility), Series 1995, 8.625% 2024 $2,000 $ 2,130,780
Maryland Health and Higher Educational Facilities Authority,
First Mortgage Refunding Revenue Bonds, Roland Park Place Issue,
Series 1989, 7.75% 2012 2,000 2,133,360
Prince George's County, Refunding Revenue Bonds, Collington
Episcopal Life Care Community, Inc., Series 1994 A, 6.00% 2013 3,000 2,837,430
7,101,570
Multi-Family Housing - 2.76%
Montgomery County, Maryland Housing Opportunities Commission,
Single Family Mortgage Revenue, 1994 Series A-2, 7.50% 2024 2,000 2,073,720
Pre-Refunded<F1> - 19.62%
Frederick County, Public Facilities Bonds:
1989, 7.20% 2006 (1999) 350 389,925
1991, Series B, 6.30% 2011 (2002) 1,370 1,521,399
1986 Series, 7.40% 2012 (2001) 310 362,133
Harford County, Consolidated Public Improvement Bonds,
Series 1992, 5.80% 2010 (2002) 970 1,057,397
Howard County:
Consolidated Public Improvement Bonds,
1990 Series A, 7.00% 2009 (2000) 500 554,400
Metropolitan District Refunding Bonds,
1991 Series A, 6.625% 2021 (2001) 500 557,555
Maryland Department of Transportation, Consolidated
Transportation Bonds, 1989 Series, 6.50% 2003 (1998) 500 540,465
State of Maryland, General Obligation Bonds, State and
Local Facilities:
Loan of 1990, Third Series, 6.75% 2003 (2000) 400 443,904
1989 First Series, 6.80% 2004 (1999) 1,000 1,099,330
Pre-Refunded<F1> - (continued)
Maryland State Health and Higher Educational Facilities
Authority:
Junior Lien Revenue Bonds, Francis Scott Key Medical Center
Issue, 1990 Series A, 7.00% 2025 (2000) $ 250 $ 281,888
Sinai Hospital of Baltimore Issue, Revenue Bonds,
1990 Series, AMBAC Insured, 7.00% 2019 (2000) 700 789,285
Suburban Hospital Issue Revenue Bonds:
Series 1988, 7.50% 2008 (1998) 1,250 1,386,763
Series 1992, 6.50% 2017 (2002) 500 561,110
University of Maryland Medical System Issue, Revenue Bonds,
Series 1991 A, FGIC Insured, 6.50% 2021 (2001) 1,000 1,099,020
Morgan State University Academic Fees and Auxiliary Facilities
Fees Revenue Bonds, 1990 Series A, MBIA Insured,
7.00% 2020 (2000) 475 535,586
Prince George's County, Hospital Revenue Bonds (Dimensions
Health Corporation Issue), Series 1992, 7.20% 2006 (2002) 1,035 1,203,912
Commonwealth of Puerto Rico, Housing Bank and Finance Agency,
Single Family Mortgage Revenue Bonds, Homeownership
5th Portfolio, 1986 Series, 7.50% 2015 (2000) 495 559,503
Commonwealth of Puerto Rico, Public Improvement Bonds of 1992,
MBIA Insured, 6.50% 2009 (2002) 1,000 1,124,910
University of Maryland System Auxiliary Facility and Tuition
Revenue Bonds, 1989 Series B, 7.00% 2007 (1999) 600 671,440
14,739,925
Resource Recovery - 3.99%
Montgomery County, Northeast Maryland Waste Disposal Authority,
Solid Waste Revenue Bonds:
6.00% 2006 1,000 1,002,320
6.00% 2007 1,000 1,002,470
Series 1993 A, 6.30% 2016 1,000 993,040
2,997,830
Turnpikes & Toll Roads Revenue - 1.40%
Maryland Transportation Authority Facilities Project,
Transportation Facilities Projects Revenue Bonds,
Series 1992, 5.80% 2006 $1,000 $ 1,050,300
Water & Sewer Revenue - .55%
Maryland Water Quality Financing Administration,
Revolving Loan Fund Revenue Bonds, Series 1991 B, 0.00% 2005 700 415,919
70,545,000
Tax-Exempt Securities Maturing in One Year or Less -5.56%
Ports - .93%
Anne Arundel County, Baltimore Gas and Electric Co.,
Economic Development Revenue Bonds, Series 1985, 3.60% 1995 700 699,999
Pre-Refunded<F1> - 1.55%
Baltimore County Pension Fund, 1988 Series, 7.75% 2016 (1996) 1,125 1,166,603
Transportation - 3.08%
Maryland Department of Transportation, Consolidated Transportation
Bonds, 6.20% 1995 2,300 2,314,904
4,181,506
TOTAL TAX-EXEMPT SECURITIES (cost: $72,053,000) 74,726,506
Excess of cash and receivables over payables 417,576
NET ASSETS $75,144,082
<FN>
<F1>Parenthetical year represents date of pre-refunding.
See Notes to Financial Statements
</FN>
</TABLE>
<TABLE>
<CAPTION>
The Tax-Exempt Fund of Virginia
Investment Portfolio, July 31, 1995
Principal
Amount Market
(000) Value
<S> <C> <C>
Tax-Exempt Securities Maturing in More than One Year-95.49%
College & University Revenue - 4.13%
Rockingham County Industrial Development Authority, Educational
Facilities Revenue Bonds (Bridgewater College),
Series 1993, 6.00% 2023 $1,100 $ 1,037,333
University of Virginia, General Revenue Pledge Bonds,
Series 1993 B, 5.375% 2010 1,000 999,920
Virginia College Building Authority Educational Facilities Revenue
Bonds (Marymount University Project), Series 1992, 6.875% 2007 1,650 1,753,142
3,790,395
General Obligations (Local) - 11.88%
Arlington County Public Improvement Bonds,
Series 1993, 5.30% 2009 2,500 2,490,175
Chesapeake:
Public Improvement Bonds, Series of 1992, 6.00% 2006 1,600 1,707,344
Refunding Bonds, Series of 1993, 5.40% 2008 1,000 1,006,540
Covington, Water and Sewer Refunding Bonds,
Series of 1994, 5.25% 2013 250 230,703
Leesburg Refunding Bonds, Series 1993, 5.60% 2008 1,195 1,205,002
Lynchburg Public Improvement Refunding Bonds,
Series 1993, 5.25% 2009 1,000 979,880
Newport News General Obligation, Water Bonds,
Series A of 1992, 6.125% 2009 1,170 1,225,201
Norfolk Capital Improvement and Refunding Bonds,
Series 1992 A, 6.00% 2011 500 506,920
Roanoke Public Improvement and Refunding Bonds,
Series 1992 A and B:
6.375% 2009 250 264,003
6.40% 2011 500 525,710
Spotsylvania Public Improvement Bonds,
Series of 1992, 5.75% 2011 750 749,970
10,891,448
General Obligations (State) - 1.70%
Commonwealth of Virginia, Public Facilities Bonds,
1993 Series A, 5.40% 2005 1,500 1,560,825
Hospital & Health Facilities Revenue - 13.22%
Arlington County Industrial Development Authority, Hospital
Revenue Refunding Bonds (The Arlington Hospital), Series 1993:
5.125% 2008 $1,000 $ 929,970
5.00% 2021 1,000 838,990
Fairfax County Industrial Development Authority, Hospital
Revenue Refunding Bonds (INOVA Health Systems Hospital
Project), Series 1993 A:
5.00% 2007 1,500 1,442,205
5.25% 2019 1,500 1,338,510
5.00% 2023 2,000 1,692,040
Lynchburg Industrial Development Authority, Hospital
Facilities, Revenue Refunding Bonds, Centra
Health, Inc., Series 1988, 8.125% 2016 1,000 1,100,800
Norfolk Industrial Development Authority, Hospital Revenue
Bonds (Sentara Hospitals-Norfolk Project),
Series A of 1994, 5.00% 2020 1,750 1,481,637
Peninsula Ports Authority:
Health Care Facilities Revenue and Refunding Bonds (Mary
Immaculate Project), 1994 Series, 6.875% 2010 1,900 1,938,912
Health System Revenue and Refunding Bonds
(Riverside Health System Project),
Series 1992 A, 6.625% 2010 1,300 1,353,560
12,116,624
Housing Finance Authority Revenue - 4.99%
Commonwealth of Puerto Rico Housing Finance Corporation,
Single Family Mortgage Revenue Bonds, 1st Portfolio:
1988 Series A, 7.80% 2021 80 85,175
1988 Series B, 7.65% 2022 345 367,529
Virginia Housing Development Authority, Commonwealth
Mortgage Bonds:
1994 Series H, Sub-Series H-1, 6.10% 2003 500 528,205
1995 Series A-AMT, Sub-Series A-1, 6.60% 2004 1,000 1,062,890
1994 Series I-AMT, Sub-Series I-1, 6.40% 2005 800 843,784
1989 Series B, Sub-Series B-2, 7.625% 2017 250 265,385
1994 Series H, Sub-Series H-2, 6.55% 2017 1,000 1,023,330
1992 Series A, 7.10% 2022 380 399,847
4,576,145
Insured - 15.02%
Chesapeake Certificates of Participation,
MBIA Insured, 1993 Series, 5.40% 2005 $1,000 $ 1,025,420
Danville, Virginia Industrial Development Authority, Hospital
Revenue Bonds, Danville Regional Medical Center,
Series 1994, FGIC Insured, 6.00% 2007 1,000 1,054,920
Industrial Development Authority of the County of Hanover,
Hospital Revenue Bonds (Memorial Regional Medical Center
Project at Hanover Medical Park), Series 1995, MBIA Insured:
6.50% 2010 1,375 1,487,956
6.375% 2018 1,000 1,067,250
Loudoun County Sanitation Authority, Water and Sewer System
Revenue Bonds, Refunding Series 1992,
FGIC Insured, 6.25% 2010 2,000 2,086,580
Metropolitan Washington, D.C. Airports Authority, Airport
System Revenue and Refunding Bonds, MBIA Insured AMT:
Series 1992 A, 6.625% 2019 750 774,592
Series 1994 A, 5.75% 2020 2,000 1,873,800
County of Prince William, Virginia, Lease Participation Certificates,
Series 1995, MBIA Insured, 5.20% 2005 1,000 998,340
Southeastern Public Service Authority of Virginia, Senior Revenue
Refunding Bonds (Regional Solid Waste System),
Series 1993 A, MBIA Insured, 5.125% 2013 1,500 1,381,740
City of Virginia Beach Development Authority, Hospital Revenue
Bonds (Virginia Beach General Hospital Project),
Series 1993, AMBAC Insured, 6.00% 2011 1,000 1,032,710
Washington, D.C. Metropolitan Area Transit Authority,
Gross Revenue Transit Refunding Bonds,
Series 1993, FGIC Insured, 4.70% 2003 1,000 983,740
13,767,048
Lease Revenue (State) - 2.02%
Virginia Public Building Authority, State Building Revenue Bonds,
Series 1991 A, 6.50% 2011 1,750 1,853,915
Local Appropriation - .84%
Fairfax County Economic Development Authority, Parking Revenue
Bonds (Huntington Metrorail Station Project),
Series 1990 A, 6.75% 2015 500 519,305
Local Appropriation - (continued)
Hampton Museum Revenue Refunding Bonds, Series 1994, 4.40% 2000 $ 255 $ 252,720
772,025
Pre-Refunded<F1> - 21.24%
Chesapeake, Hospital Authority Facility for Chesapeake
General Hospital First Mortgage Revenue, BIG Insured,
Series 1988, 7.625% 2018 (1998) 1,000 1,112,810
Fairfax County:
Industrial Development Authority Hospital Revenue Bonds:
(Fairfax Hospital Association System),
Series 1985 A, 7.875% 2017 (1996) 250 268,765
(Fairfax Hospital System Project), INOVA Health Systems,
Series 1991 C, 6.664% 2023 (2001) 1,000 1,127,210
Water Authority Revenue, Series 1989, 7.30% 2021 (2000) 1,250 1,411,937
Henry County Public Service Authority, Water and Sewer Revenue
Bonds, FGIC Insured, Series 1990, 7.20% 2019 (2000) 1,250 1,420,200
Loudoun County Sanitation Authority, Water and Sewer System
Revenue Bonds, Series 1989, AMBAC Insured:
7.50% 2010 (1999) 900 1,005,813
7.50% 2017 (1999) 375 419,089
Norfolk Industrial Development Authority,
Hospital Revenue Bonds:
(Children's Hospital of the King's Daughters Obligated
Group), Series 1991, AMBAC Insured, 7.00% 2011 (2001) 400 455,392
(Sentara Hospitals-Norfolk Project), Series 1991, 7.00% 2020 (2000) 250 282,995
Portsmouth Improvement Bonds, Public Improvement Refunding
Bonds, Series 1987, 7.50% 2012 (1997) 500 549,030
Prince William County Service Authority, Water and Sewer
System Revenue Bonds, Series 1991, FGIC Insured, 6.50% 2021 (2001) 680 757,744
Richmond Public Utility Revenue Bonds,
Series 1988 A, 8.00% 2018 (1998) 1,500 1,662,060
Roanoke:
Industrial Development Authority, Hospital Revenue Bonds,
Carilion Health System (Roanoke Memorial Hospital Projects),
Series 1990, MBIA Insured, 7.25% 2017 (2000) 750 853,860
Water System Revenue Bonds,
Series 1991, FGIC Insured, 6.50% 2021 (2001) 750 835,748
Pre-Refunded<F1> - (continued)
Southeastern Public Service Authority, Regional Solid Waste
System, Senior Revenue Refunding Bonds,
Series 1989, BIG Insured:
7.00% 2006 (1999) $ 500 $ 556,435
7.00% 2013 (1999) 1,000 1,112,870
Suffolk, Series 1989, 7.00% 2005 (1998) 1,000 1,101,240
University of Virginia, Hospital Revenue Bonds,
1984 Series A, HIBI Insured, 9.875% 2001 (2001) 25 28,686
University of Virginia Hospital (The Rectors and Visitors
Hospital), Revenue Refunding Bonds,
Series 1985 D, 7.15% 2017 (1998) 500 549,135
Upper Occoquan Sewage Authority, Regional Sewerage System
Revenue Bonds, Series 1991, MBIA Insured, 6.00% 2021 (2001) 700 751,345
Virginia Resources Authority:
Solid Waste Disposal System Revenue Bonds,
1990 Series A, 7.30% 2015 (2000) 1,000 1,134,200
Water and Sewer System Revenue Bonds,
Series 1990, 7.25% 2011 (2000) 250 285,705
Commonwealth of Virginia Transportation Board,
Transportation Contract Revenue Bonds, Route 28 Project,
Series 1988:
7.70% 2008 (1998) 890 983,067
7.80% 2016 (1998) 500 553,495
Warrenton, Series of 1990, 7.10% 2003 (1998) 230 254,249
19,473,080
Resource Recovery - 2.17%
Fairfax County Economic Development Authority, Resource Recovery
Revenue Bonds, Series 1988 A AMT, (Ogden Martin Systems of
Fairfax, Inc. Project), 7.55% 2011 500 541,035
Roanoke Valley Resource Authority, Solid Waste System Revenue
Bonds, Series 1992, 5.75% 2012 1,500 1,447,755
1,988,790
State Authority - 4.35%
Virginia Public School Authority, School Financing Bonds:
(1987 Resolution), 1991 Refunding Series C, 6.25% 2007 $1,500 $ 1,604,070
(1991 Resolution), Series 1994 A, 6.20% 2014 1,500 1,550,745
Virginia Resources Authority:
Water and Sewer System Revenue Bonds
(Pooled Loan Program), 1986 Series A, 7.50% 2017 50 52,744
Water System Refunding Revenue Bonds,
1992 Series A, 6.45% 2013 750 777,083
3,984,642
Student Loan - 3.07%
Virginia Education Loan Authority, Student Loan Program Revenue
Refunding Bonds, Senior Series of 1993 D AMT:
5.40% 2001 1,800 1,823,148
5.95% 2009 1,000 993,350
2,816,498
Transportation - 3.49%
Commonwealth of Virginia Transportation Board,
Transportation Revenue Refunding Bonds:
(Northern Virginia Transportation District Program),
Series 1993 C, 5.30% 2009 2,565 2,520,497
(U.S. Route 58 Corridor Development Program),
Series 1993 A, 5.25% 2012 730 681,645
3,202,142
Water & Sewer Revenue - 7.37%
Chesterfield County Water and Sewer Revenue Refunding Bonds,
Series 1992, 6.375% 2009 1,250 1,325,537
Fairfax County Water Authority, Water Refunding Revenue Bonds,
Series 1992, 5.75% 2029 3,000 2,870,940
Prince William County, Virginia Resources Authority,
Solid Waste Disposal System Revenue Refunding Bonds,
1995 Series A, 5.50% 2015 1,960 1,864,901
Rivanna Water and Sewer Authority, Regional Water and Sewer
System Refunding Revenue Bonds, Series 1991, 6.40% 2007 645 690,840
6,752,218
87,545,795
Tax-Exempt Securities Maturing in One Year or Less -3.28%
General Obligations (Local) - .27%
Suffolk, Series 1988, 8.25% 1995 $ 250 $ 250,028
Pre-Refunded<F1> - 2.35%
Bedford Electric System Revenue Refunding Bonds,
Series 1986, AMBAC Insured, 7.25% 2025 (1996) 1,000 1,048,020
Chesapeake, Certificates of Participation,
1986 Series, 7.75% 2006 (1996) 1,000 1,054,900
Chesterfield County Refunding Bonds,
1986 Series, 7.50% 2001 (1996) 50 52,581
2,155,501
Resource Recovery - .66%
City of Alexandria Industrial Development Authority,
Adjustable Tender Resource Recovery Revenue Bonds,
1986 Series A, 4.10% 2016<F2> 600 600,000
3,005,529
TOTAL TAX-EXEMPT SECURITIES (cost: $87,073,000) 90,551,324
Excess of cash and receivables over payables 1,131,286
NET ASSETS $91,682,610
<FN>
<F1> Parenthetical year represents date of pre-refunding.
<F2> Coupon rate may change periodically.
See Notes to Financial Statements
</FN>
</TABLE>
Financial Statements
Statement of Assets and Liabilities
July 31, 1995
(dollars in thousands)
The Tax-Exempt The Tax-Exempt
Fund of Maryland Fund of Virginia
Assets:
Tax-exempt securities:
Maturing in more than one year
(cost: $67,916 and $84,184, respectively) $70,545 $87,546
Maturing in one year or less
(cost: $4,137 and $2,889, respectively) 4,182 3,005
Cash 171 48
Receivables for -
Sales of investments - 704
Sales of Funds' shares 21 50
Accrued interest 786 1,318
Total Assets 75,705 92,671
Liabilities:
Payables for -
Purchases of investments - 702
Repurchases of Funds' shares 387 75
Dividends 113 139
Adviser and management services 30 35
Accrued expenses 31 37
Total Liabilities 561 988
Net Assets:
Net assets applicable to Funds'
shares issued and outstanding $75,144 $91,683
Funds' shares outstanding<F1> 4,914,453 5,806,683
Net asset value per share $15.29 $15.79
[FN]
<F1>Shares of beneficial interest, unlimited shares authorized.
See Notes to Financial Statements
[/FN]
Financial Statements
Statement of Operations
For the year ended July 31, 1995
(dollars in thousands)
The Tax-Exempt The Tax-Exempt
Fund of Maryland Fund of Virginia
Investment Income:
Income:
Interest on tax-exempt securities $4,478 $5,572
Expenses:
Investment adviser fee 188 227
Business management fee 153 183
Distribution fee 154 211
Transfer agent fee 27 32
Reports to shareholders 6 11
Registration statements and prospectus 5 10
Postage, stationery and supplies 7 14
Trustees' fees 7 7
Custodian fee 3 5
Auditing and legal fees 15 15
Total expenses 565 715
Net investment income 3,913 4,857
Realized Gain and Unrealized Appreciation
on Investments:
Net realized gain 105 501
Net increase in unrealized appreciation
on investments:
Beginning of year 1,598 2,345
End of year 2,674 3,478
Net unrealized appreciation on investments 1,076 1,133
Net realized gain and unrealized
appreciation on investments 1,181 1,634
Net Increase in Net Assets Resulting
from Operations $5,094 $6,491
See Notes to Financial Statements
Statement of Changes in Net Assets
(dollars in thousands)
Year Ended July 31
1995 1994
The Tax-Exempt Fund of Maryland
Operations:
Net investment income $ 3,913 $ 3,533
Net realized gain on investments 105 15
Net change in unrealized appreciation on investments 1,076 (2,776)
Net increase in net assets resulting from operations 5,094 772
Dividends Paid to Shareholders from Net Investment Income (3,923) (3,523)
Capital Share Transactions:
Proceeds from shares sold: 778,353 and 1,205,365 shares,
respectively 11,540 18,790
Proceeds from shares issued in reinvestment of net
investment income dividends: 168,487 and 148,181
shares, respectively 2,494 2,289
Cost of shares repurchased: 1,015,670 and 521,577
shares, respectively (14,835) (8,023)
Net increase (decrease) in net assets resulting from
capital share transactions (801) 13,056
Total Increase in Net Assets 370 10,305
Net Assets:
Beginning of year 74,774 64,469
End of year (prior year includes undistributed net
investment income of $10) $75,144 $74,774
The Tax-Exempt Fund of Virginia
Operations:
Net investment income $ 4,857 $ 4,528
Net realized gain on investments 501 75
Net change in unrealized appreciation on investments 1,133 (3,590)
Net increase in net assets resulting from operations 6,491 1,013
Dividends Paid to Shareholders from Net Investment Income (4,871) (4,514)
Capital Share Transactions:
Proceeds from shares sold: 951,297 and 1,670,010 shares,
respectively 14,430 26,882
Proceeds from shares issued in reinvestment of net
investment income dividends: 180,954 and 167,755
shares, respectively 2,768 2,674
Cost of shares repurchased: 1,361,785 and 779,481
shares, respectively (20,619) (12,284)
Net increase (decrease) in net assets resulting
from capital share transactions (3,421) 17,272
Total Increase (Decrease) in Net Assets (1,801) 13,771
Net Assets:
Beginning of year 93,484 79,713
End of year (prior year includes undistributed
net investment income of $14) $91,683 $93,484
See Notes to Financial Statements
Notes to Financial Statements
1. The American Funds Tax-Exempt Series I (the "Trust") is registered
under the Investment Company Act of 1940 as an open-end, diversified
management investment company and has initially issued two series of
shares, The Tax-Exempt Fund of Maryland and The Tax-Exempt Fund of Virginia
(the "Funds"). The following paragraphs summarize the significant
accounting policies consistently followed by the Trust in the preparation
of its financial statements:
Tax-exempt securities with original or remaining maturities in excess
of 60 days are valued at prices obtained from a national municipal bond
pricing service. The pricing service takes into account various factors
such as quality, yield, and maturity of tax-exempt securities comparable to
those held by the Trust, as well as actual bid and asked prices on a
particular day.
Other securities with original or remaining maturities in excess of 60
days, including securities for which pricing service values are not
available, are valued at the mean of their quoted bid and asked prices.
All securities with 60 days or less to maturity are valued at amortized
cost, which approximates market value. Securities for which market
quotations are not readily available are valued at fair value as determined
in good faith by the committee appointed by the Board of Trustees.
As is customary in the mutual fund industry, securities transactions
are accounted for on the date the securities are purchased or sold.
Realized gains and losses from securities transactions are reported on an
identified cost basis. Interest income is reported on the accrual basis.
Premiums and original issue discounts on securities purchased are amortized
over the life of the respective securities. Dividends to shareholders are
declared daily from net investment income.
Pursuant to the custodian agreement, the Funds receive credits against
their custodian fees for imputed interest on certain balances with the
custodian bank. The custodian fees of $3,000 and $5,000 for the Maryland
and Virginia Funds, respectively, include $3,000 and $2,000 paid by these
credits rather than in cash.
2. It is the Trust's policy to continue to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies
and to distribute all of its net investment income, including any net
realized gain on investments, to its shareholders. Therefore, no federal
income tax provision is required.
As of July 31, 1995, net unrealized appreciation on investments for
book and federal income tax purposes for the Maryland Fund aggregated
$2,674,000, of which $3,719,000 related to appreciated securities and
$1,045,000 related to depreciated securities. For the Virginia Fund, net
unrealized appreciation aggregated $3,478,000, of which $4,127,000 related
to appreciated securities and $649,000 related to depreciated securities.
There was no difference between book and tax realized gains on securities
transactions for the year ended July 31, 1995. During the year ended July
31, 1995, the Maryland and Virginia Funds utilized capital loss
carryforwards totaling $105,000 and $316,000, respectively, to offset, for
tax purposes, capital gains realized during the year up to such amount.
The Maryland Fund has available at July 31, 1995 a net capital loss
carryforward totaling $81,000, which may be used to offset capital gains
realized during subsequent years through July 31, 1999. It is the
intention of the Maryland Fund not to make distributions from capital gains
until the capital loss carryforward is utilized. The cost of portfolio
securities for book and federal income tax purposes was $72,053,000 and
$87,073,000 for the Maryland and Virginia Funds, respectively, at July 31,
1995.
3. Officers of the Trust received no remuneration from the Funds in such
capacities. Their remuneration was paid by Washington Management
Corporation (WMC), a wholly owned subsidiary of The Johnston-Lemon Group,
Incorporated. Fees of $153,000 and $183,000 were recognized by the
Maryland and Virginia Funds, respectively, and were paid or are payable to
WMC as Business Manager of the Trust pursuant to the business management
contract under which WMC provides the officer personnel, accounting, and
clerical-
staff of the Trust, together with office space and equipment. The business
management contract provides for monthly fees, accrued daily, based on an
annual rate of 0.135% of the first $60 million of average net assets of
each of the Funds; 0.09% of such assets in excess of $60 million; plus
1.35% of the gross investment income (excluding any net capital gains from
transactions in portfolio securities). Johnston, Lemon & Co. Incorporated,
a wholly owned subsidiary of The Johnston-Lemon Group, Incorporated, has
informed the Funds that it has earned $50,000 and $27,000 on its retail
sales of shares and under the distribution plan of the Maryland and
Virginia Funds, respectively, but received no net brokerage commissions
resulting from purchases and sales of securities for the investment account
of the Funds. All the officers of the Trust and three of its trustees are
affiliated with WMC.
Fees of $188,000 and $227,000 were recognized by the Maryland and
Virginia Funds, respectively, and were paid or are payable to Capital
Research and Management Company (CRMC) as Investment Adviser pursuant to an
investment advisory contract with the Trust. The investment advisory
contract provides for monthly fees, accrued daily, based on an annual rate
of 0.165% of the first $60 million of average net assets of each of the
Funds; 0.12% of such assets in excess of $60 million; plus 1.65% of the
gross investment income (excluding any
net capital gains from transactions in portfolio securities).
Pursuant to a Plan of Distribution, the Funds may expend up to 0.25%
of their average net assets annually for any activities primarily intended
to result in sales of Fund shares, provided the categories of expenses for
which reimbursement is made are approved by the Funds' Board of Trustees.
Fund expenses under the Plan include payments to dealers to compensate them
for their selling and servicing efforts. During the year ended July 31,
1995, distribution expenses under the Plan were $154,000 and $211,000,
including accrued and unpaid expenses of $26,000 and $31,000, for the
Maryland and Virginia Funds, respectively.
American Funds Service Company (AFS), the transfer agent for the
Maryland and Virginia Funds, was paid fees of $27,000 and $32,000,
respectively. American Funds Distributors, Inc. (AFD), the principal
underwriter of the Funds' shares, has informed the Funds that it has
received $42,000 and $46,000 (after allowances to dealers) for the Maryland
and Virginia Funds, respectively, as its portion of the sales charges paid
by purchasers of the Funds' shares. Such sales charges are not an expense
of the Funds-
and, hence, are not reflected in the accompanying statement of operations.
Trustees of the Funds who are unaffiliated with WMC may elect to defer
part or all of the fees earned for services as members of the Board.
Amounts deferred are not funded and are general unsecured liabilities of
the Funds. As of July 31, 1995, aggregate amounts deferred were $3,000 each
for the Maryland and Virginia Funds.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are
both wholly owned subsidiaries of CRMC.
4. As of July 31, 1995:
The Tax-Exempt The Tax-Exempt
Fund of Maryland Fund of Virginia
Accumulated
undistributed net
realized gain (loss)
on investments $ (81,000) $ 185,000
Paid-in capital 72,551,000 88,020,000
Purchases and sales of
investment securities,
excluding short-term
securities, during
the year ended
July 31, 1995:
Purchases 14,440,000 28,271,000
Sales 14,566,000 30,261,000
Per-Share Data and Ratios
The Tax-Exempt Fund of Maryland
Year Ended July 31
1995 1994 1993 1992 1991
Net Asset Value, Beginning of Year $15.00 $15.53 $15.22 $14.29 $14.12
Income from Investment Operations:
Net investment income .80 .76 .79 .83 .85
Net realized and unrealized gain (loss)
on investments .29 (.53) .31 .93 .17
Total income from investment operations 1.09 .23 1.10 1.76 1.02
Less Distributions:
Dividends from net investment income (.80) (.76) (.79) (.83) (.85)
Net Asset Value, End of Year $15.29 $15.00 $15.53 $15.22 $14.29
Total Return<F1> 7.58% 1.42% 7.44% 12.72% 7.44%
Ratios/Supplemental Data:
Net assets, end of year (in millions) $75 $75 $64 $48 $35
Ratio of expenses to average net assets .78% .75% .83% .91% .94%
Ratio of net income to average net assets 5.38% 4.90% 5.12% 5.60% 5.98%
Portfolio turnover rate 20.91% 10.01% 9.05% 8.11% .88%
The Tax-Exempt Fund of Virginia
Year Ended July 31
1995 1994 1993 1992 1991
Net Asset Value, Beginning of Year $15.49 $16.01 $15.72 $14.75 $14.50
Income from Investment Operations:
Net investment income .83 .80 .82 .85 .87
Net realized and unrealized gain (loss)
on investments .30 (.52) .29 .97 .25
Total income from investment operations 1.13 .28 1.11 1.82 1.12
Less Distributions:
Dividends from net investment income (.83) (.80) (.82) (.85) (.87)
Net Asset Value, End of Year $15.79 $15.49 $16.01 $15.72 $14.75
Total Return<F1> 7.56% 1.74% 7.29% 12.80% 8.01%
Ratios/Supplemental Data:
Net assets, end of year (in millions) $92 $93 $80 $57 $39
Ratio of expenses to average net assets .79% .78% .84% .93% .97%
Ratio of net income to average net assets 5.37% 5.04% 5.18% 5.61% 6.00%
Portfolio turnover rate 32.18% 2.36% 4.96% 6.84% 13.60%
[FN]
<F1>This was calculated without deducting a sales charge. The maximum sales
charge is 4.75% of each Fund's offering price.
[/FN]
Report of Independent Accountants
To the Board of Trustees and Shareholders of
The American Funds Tax-Exempt Series I
In our opinion, the accompanying statements of assets and liabilities,
including the investment portfolios, and the related statements of
operations and of changes in net assets and the per-share data and ratios
present fairly, in all material respects, the financial position of The
Tax-Exempt Fund of Maryland and The Tax-Exempt Fund of Virginia
(constituting The American Funds Tax-Exempt Series I, hereafter referred to
as the "Trust") at July 31, 1995, the results of each of their operations,
the changes in each of their net assets and each of their per-share data
and ratios for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and per-share data and
ratios (hereafter referred to as "financial statements") are the
responsibility of the Trust's 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 July 31, 1995 by correspondence with the
custodian and brokers and the application of alternative auditing
procedures where confirmations from brokers were not received, provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Los Angeles, California
August 31, 1995
Shareholders may exclude from Federal taxable income any exempt-interest
dividends paid from net investment income. All of the dividends paid from
net investment income qualifies as exempt-interest dividends.
Since the amounts above are reported for the fiscal year and not a calendar
year, share-holders should refer to their Form 1099 DIV which will be
mailed in January 1996 to determine the calendar year amounts to be
included on their respective 1995 tax returns. Shareholders should consult
their tax advisers.
Shareholders Services
To help you add to your account
Automatic Reinvestment of Distributions
All dividends and capital gain distributions can be automatically
reinvested in additional shares at net asset value (without sales charge),
thus providing you with additional potential for growth through
compounding.
Investing by Mail
Simply send a check for $50 or more to the fund's transfer agent. You can
send personal checks or you can put bonus, gift or dividend checks to work
by endorsing them to the fund for investment into your account.
Automatic Investment Plan
You can make automatic investments regularly by authorizing the fund's
transfer agent to deduct a specified sum from your bank account.
Cross-Reinvestment of Distributions
You can cross-reinvest dividends or dividends and capital gain
distributions from one fund into another at no charge if you have a balance
of at least $5,000 in the originating fund or meet the minimum initial
investment for the receiving fund.
To help you add to your investment at a reduced sales charge
Quantity Discounts
There are discounts on large investments, whether they are in one fund or a
combination of funds in The American Funds Group, as explained in the
prospectus.
Right of Accumulation
You can add the value of your present shares of any of the funds in The
American Funds Group (except shares of our money market funds that were
purchased directly) to the amount of any new purchase in order to qualify
for a quantity discount on your new investment.
Statement of Intention
You can, without obligation, sign a Statement of Intention that allows you
to combine the purchases you intend to make over a 13-month period so as to
take immediate advantage of the maximum quantity discount available.
To help you pay your bills
Dividends in Cash
You have the option of taking your dividends in cash.
Automatic Withdrawal Plan
You can arrange to have regular checks for specified amounts sent to you or
to anyone you designate in any month(s) you choose.
To help you meet your changing needs
Exchange Privileges
Should your goals or financial circumstances change, you can easily
restructure your investment program by trans-
ferring some or all of your holdings into other funds in The American Funds
Group. You can do this at no charge by mail or by phone. Automatic
exchanges of $50 or more may also be made between funds. Your initial
exchange must meet the receiving fund's minimum investment requirement
unless the originating fund's balance is at least $5,000 (in which case you
have a year to meet the minimum investment requirement). Please remember
that fund exchanges constitute a sale and purchase for tax purposes.
To help you with recordkeeping
Confirmation of Transactions
You receive account statements reflecting the transactions in your account.
Consolidated Quarterly Statements
If you have more than one account with the American Funds, you can request
a quarterly statement combining certain accounts registered to the same
individual.
Telephone Information Service
American FundsLine(R) is a toll-free service which gives you information
about your account as well as current prices for the American Funds. Just
call 800/325-3590. (Please have your account number and fund number ready.)
ImageCheck(SM)
If you're a shareholder in a fund that has check-writing privileges (The
Cash Management Trust of America, The U.S. Treasury Money Fund of America
or The Tax-Exempt Money Fund of America), each month you'll receive photo
images of the front and back of each cleared check on easy-to-file 81_2" x
11" statements.
Year-End Tax Report
At the end of each year, you will receive an individual report which shows
the tax status of the dividends and any capital gain distributions paid to
you during the year. In many instances, these reports can help you
calculate taxes due on shares you've sold by reporting average cost.
Safekeeping of Certificates
Your shares are credited to your account and certificates are not issued
unless specifically requested. This helps eliminate the costly, irritating
problem of lost or destroyed certificates.
For more complete information about these services or about any of the
American Funds, including charges and expenses, please obtain a prospectus
from your securities dealer or financial planner, or phone the Fund's
transfer agent, American Funds Service Company, at 800/421-0180. Please
read the prospectus carefully before you invest or send money. These
services are subject to change or termination.
The American Funds Tax-Exempt Series I
Board of Trustees
Cyrus A. Ansary
President, Investment Services International Company
Frank M. Ewing
Chairman of the Board and President,
Frank M. Ewing Co., Inc.
Stephen Hartwell
Chairman of the Board
Chairman of the Board,
Washington Management Corporation
James H. Lemon, Jr.
Vice Chairman of the Board
Chairman of the Board and Chief Executive Officer,
The Johnston-Lemon Group, Incorporated
Harry J. Lister
President of the Funds
President, Washington Management Corporation
Jean Head Sisco
Partner, Sisco Associates
T. Eugene Smith
President, T. Eugene Smith, Inc.
Stephen G. Yeonas
Chairman of the Board, Stephen G. Yeonas Company
Other Officers
Howard L. Kitzmiller
Vice President, Secretary/Treasurer of the Funds
Director, Senior Vice President, Secretary and Assistant Treasurer,
Washington Management Corporation
Lois A. Erhard
Vice President of the Funds
Vice President, Washington Management Corporation
Offices of the Funds and of the Business Manager
Washington Management Corporation
1101 Vermont Avenue, NW Washington, DC 20005
202/842-5665
Investment Manager
Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071
135 South State College Boulevard
Brea, CA 92621
5300 Robin Hood Road
Norfolk, VA 23513
Transfer Agent
American Funds Service Company
P.O. Box 2280
Norfolk, VA 23501-2280
Custodian
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, NY 10081
Counsel
Thompson, O'Donnell, Markham, Norton & Hannon
805 Fifteenth Street, NW
Washington, DC 20005
Principal Underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071
Independent Accountants
Price Waterhouse LLP
400 South Hope Street
Los Angeles, CA 90071
This report is for the information of shareholders in the Funds that
comprise The American Funds Tax-Exempt Series I, but it may also be used as
sales literature when preceded or accompanied by the current prospectus,
which gives details about charges, expenses, investment objectives and
operating policies of the Funds. If used as sales material after September
30, 1995, this report must be accompanied by an American Funds Group
Statistical Update for the most recently completed calendar quarter.
TEFMD/TEFVA-011-0995
