<PAGE> 1
The Eaton Vance Municipals Trust
For the Portfolios:
Alabama Tax Free Fund
Arkansas Tax Free Fund
Georgia Tax Free Fund
Kentucky Tax Free Fund
Louisiana Tax Free Fund
Maryland Tax Free Fund
Missouri Tax Free Fund
North Carolina Tax Free Fund
Oregon Tax Free Fund
South Carolina Tax Free Fund
Tennessee Tax Free Fund
Virginia Tax Free Fund
[LOGO]
Annual Shareholder Report
August 31, 1995
Portfolio Investment Adviser
Boston Management and Research
24 Federal Street
Boston, MA 02110
Fund Administrator
Eaton Vance Management
24 Federal Street
Boston, MA 02110
(617) 482-8260
Principal Underwriter
Eaton Vance distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
Transfer Agent
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
<PAGE> 2
- --------------------------------------------------------------------------------
Alabama Tax Free Portfolio
Portfolio of Investments - August 31, 1995
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
ELECTRIC UTILITIES - 3.0%
NR BBB $ 500 Guam Power Authority,
6.625%, 10/1/14 $ 511,180
Baa1 A- 500 Puerto Rico Electric Power
Authority, 7.00%, 7/1/07 537,105
Baa1 A- 500 Puerto Rico Electric Power
Authority, 6.375%, 7/1/24 508,735
Baa1 A- 935 Puerto Rico Electric Power
Authority, 6.00%, 7/1/16 929,409
Baa1 A- 1,000 Puerto Rico Electric Power
Authority, 6.00%, 7/1/10 1,008,360
------------
$ 3,494,789
------------
ESCROWED - 4.6%
NR AA $ 500 Birmingham City, Alabama
Improvement Warrants,
6.60%, 7/1/17 $ 560,295
NR BBB 2,000 Gadsden City, Alabama
Medical Clinic Board
(Baptist Hospital), 7.80%,
11/1/21 2,375,560
NR BBB 350 Gadsden City, Alabama
Medical Clinic Board
(Baptist Hospital), 7.60%,
11/1/08 412,006
Aaa AAA 250 Tuscaloosa County, Alabama
Limited Obligation-Capital
Outlay Warrants (AMBAC),
6.50%, 2/1/15 270,793
Aa NR 1,600 University of Alabama-
Birmingham Medical &
Educational Foundation
Housing, 7.00%, 12/1/19 1,788,944
------------
$ 5,407,598
------------
GENERAL OBLIGATIONS - 6.5%
A1 AA $1,500 Birmingham, Alabama
U.T.G.O., 5.75%, 4/1/19 $ 1,452,930
A1 AA 1,000 Birmingham, Alabama
U.T.G.O., 5.75%, 6/1/16 982,080
Baa1 A 2,000 Puerto Rico U.T.G.O.,
6.50%, 7/1/23 2,059,260
Baa1 A 1,980 Puerto Rico Public
Buildings Authority,
5.75%, 7/1/15 1,907,314
Baa1 A 1,000 Puerto Rico Public
Buildings Authority,
5.50%, 7/1/21 919,960
NR NR 250 Virgin Islands, Public
Finance Authority, 7.25%,
10/1/18 262,505
------------
$ 7,584,049
------------
HEALTH CARE - 4.2%
A1 A+ $2,000 DCH Healthcare, Alabama
5.75%, 6/1/23 $ 1,888,860
NR NR 325 Fairhope City, Alabama
Midtown Medical Clinic
Board (Beverly
Enterprises), 6.375%,
6/1/09 301,542
Baa BBB 2,000 Marshall County, Alabama
Health Care, 7.00%, 1/1/20 1,997,400
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
NR NR 670 Mobile City, Alabama
Second Medical Clinic
Board (Beverly
Enterprises), 7.00%,
4/1/07 651,883
------------
$ 4,839,685
------------
HOSPITALS - 5.1%
Baa NR $1,000 Cullman, Alabama Medical
Clinic Board (Cullman
Regional Medical Center),
6.50%, 2/15/23 $ 947,460
Baa1 NR 3,550 Jasper City, Alabama
Medical Clinic Board
(Walker Regional Medical
Center), 6.375%, 7/1/18
(2) 3,530,582
A A 1,000 Montgomery City, Alabama
Medical Clinic Board
(Jackson Hospital), 7.00%,
3/1/15 1,044,270
Baa BBB 430 Troy City, Alabama
Hospital Building
Authority, 7.375%, 5/1/12 450,192
------------
$ 5,972,504
------------
HOUSING - 2.6%
Aaa NR $3,000 Alabama HFA Single Family
Mortgage (GNMA/FNMA),
6.60%, 4/1/19 $ 3,036,180
------------
INDUSTRIAL DEVELOPMENT
REVENUE/POLLUTION CONTROL
REVENUE - 12.7%
Baa1 BBB $1,200 Courtland, Alabama
(Champion International
Corporation), 7.20%,
12/1/13 $ 1,298,760
Baa1 BBB 5,500 Courtland, Alabama
(Champion International
Corporation), 5.90%,
2/1/17 5,311,790
Baa3 NR 1,000 Jackson, Alabama (Boise
Cascade), 7.875%, 8/1/00 1,037,310
Baa3 BBB- 2,000 Mobile, Alabama Industrial
Development Board (Solid
Waste), 6.95%, 1/1/20 2,045,340
Aa2 AA 3,000 Mobile County, Alabama
Pollution Control, 6.00%,
12/1/14 3,048,690
Baa3 BB+ 1,000 Puerto Rico Port Authority
(American Airlines),
(AMT), 6.30%, 6/1/23 992,100
A3 A- 1,000 Selma, Alabama, Industrial
Development Board (Solid
Waste), International
Paper Co., 6.00%, 12/1/17 997,450
------------
$ 14,731,440
------------
INSURED EDUCATION - 8.5%
Aaa AAA $1,000 Alabama A&M University
(MBIA), 6.375%, 11/1/09 $ 1,059,150
Aaa AAA 1,770 Alabama A&M University
(MBIA), 5.75%, 11/1/14 1,755,645
</TABLE>
46
<PAGE> 3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED EDUCATION - (CONTINUED)
Aaa AAA 3,750 Alabama A&M University
(MBIA), 5.50%, 11/1/20 3,559,013
Aaa AAA 4,000 University of Alabama
(MBIA), 5.00%, 6/1/16 3,554,680
------------
$ 9,928,488
------------
INSURED ELECTRIC UTILITIES - 2.1%
Aaa AAA $ 250 Puerto Rico Electric Power
Authority (STRIPES) (FSA),
Variable, 7/1/03 (1) $ 279,153
Aaa AAA 2,000 Wilsonville, Alabama
Industrial Development
Board (MBIA), 6.75%,
2/1/15 2,122,760
------------
$ 2,401,913
------------
INSURED GENERAL OBLIGATION - 3.7%
Aaa AAA $ 500 Fairfield City, Alabama
U.T.G.O. (AMBAC), 6.30%,
6/1/22 $ 518,975
Aaa AAA 3,250 Madison City, Alabama
(MBIA), 6.00%, 2/1/24 3,269,760
Aaa AAA 500 Troy City, Alabama (CAPG),
6.60%, 6/1/12 526,725
------------
$ 4,315,460
------------
INSURED HEALTH CARE - 1.8%
Aaa AAA $2,000 Huntsville, Alabama Health
Care Facilities (MBIA),
6.50%, 6/1/13 $ 2,097,440
------------
INSURED HOSPITAL - 6.4%
Aaa AAA $2,500 Birmingham, Alabama
Baptist Medical Center
(MBIA), 5.875%, 11/15/20 $ 2,459,400
Aaa AAA 2,500 Birmingham, Alabama
Baptist Medical Center
(MBIA), 6.00%, 11/15/24 2,482,700
Aaa AAA 1,000 East Alabama Health Care
Facilities (MBIA), 5.25%,
9/1/23 906,400
Aaa AAA 1,000 Houston County, Southeast
Alabama Medical Center
(MBIA), 5.75%, 10/1/22 974,520
Aaa AAA 750 University of Alabama
Revenue (MBIA), 5.00%,
10/1/14 674,100
------------
$ 7,497,120
------------
INSURED INDUSTRIAL
DEVELOPMENT REVENUE/
POLLUTION CONTROL REVENUE - 4.4%
Aaa AAA $3,000 Columbia, Alabama (AL
Power Company) (AMBAC),
6.50%, 9/1/23 $ 3,107,940
Aaa AAA 2,000 West Jefferson, Alabama
Industrial Development
(MBIA), 6.05%, 5/1/23 2,004,620
------------
$ 5,112,560
------------
INSURED LEASE/CERTIFICATE
OF PARTICIPATION - 3.9%
Aaa AAA $4,700 Montgomery, Alabama
Downtown Redevelopment
Authority Mortgage (MBIA),
5.50%, 10/1/13 $ 4,497,571
------------
INSURED
MISCELLANEOUS - 0.4%
Aaa AAA $1,950 Jefferson County, Alabama
Birmingham-Jefferson Civic
Center (MBIA), 0%, 9/1/18 $ 492,180
------------
INSURED SOLID WASTE - 4.0%
Aaa AAA $4,000 Huntsville, Alabama Solid
Waste Disposal (FGIC)
(AMT), 7.00%, 10/1/14 $ 4,271,480
Aaa AAA 350 Huntsville, Alabama Solid
Waste Disposal (FGIC)
(AMT), 7.00%, 10/1/08 382,316
------------
$ 4,653,796
------------
INSURED TRANSPORTATION - 4.3%
Aaa AAA $3,475 Birmingham, Alabama
Airport Authority (AMBAC),
5.25%, 7/1/20 $ 3,186,471
Aaa AAA 2,000 Birmingham, Alabama
Airport Authority (AMBAC)
(AMT), 5.375%, 7/1/23 1,821,660
------------
$ 5,008,131
------------
INSURED WATER & SEWER - 17.2%
Aaa AAA $2,750 Alabama Water Pollution
Control Authority
(Jefferson County)
(AMBAC), 5.50%, 2/15/16 $ 2,623,363
Aaa AAA 2,500 Alabama Water Pollution
Control Authority (AMBAC),
5.00%, 8/15/15 2,254,400
Aaa AAA 1,100 Gulf Shores, Alabama Water
and Sewer (AMBAC), 6.50%,
2/1/15 1,156,001
Aaa AAA 2,360 Limestone County, Alabama
Water Authority (FGIC),
5.25%, 12/1/20 2,159,707
Aaa AAA 500 Northeast, Alabama Water,
Sewer and Fire Protection
(AMBAC), 5.70%, 5/1/23 487,065
Aaa AAA 3,075 Prichard City, Alabama
Water and Sewer (AMBAC),
6.125%, 11/15/14 3,148,460
Aaa AAA 6,000 Scottsboro, Alabama Water,
Sewer and Gas (AMBAC),
6.50%, 12/1/14 6,361,020
</TABLE>
47
<PAGE> 4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED WATER & SEWER - (CONTINUED)
Aaa AAA 750 West Morgan-East Lawrence,
Alabama Water Authority
(FGIC), 6.00%, 5/1/22 754,200
Aaa AAA 1,000 West Morgan-East Lawrence,
Alabama Water Authority
(FSA), 6.85%, 8/15/25 1,077,410
------------
$ 20,021,626
------------
MISCELLANEOUS - 0.1%
A A $ 100 Tennessee Valley, Alabama
Exhibit Commission, 6.70%,
6/1/10 $ 107,061
------------
SPECIAL TAX REVENUE - 2.4%
Baa1 A $1,000 Puerto Rico Highway and
Transportation, 5.50%,
7/1/15 $ 950,160
Baa1 A 1,800 Puerto Rico Highway and
Transportation, 6.625%,
7/1/18 1,878,480
------------
$ 2,828,640
------------
TRANSPORTATION - 0.9%
NR BBB $1,000 Guam Airport Authority,
6.70%, 10/1/23 $ 1,007,200
------------
WATER AND SEWER - 1.2%
NR NR $1,500 Moulton City, Alabama
Water, 6.30%, 1/1/18 $ 1,444,425
------------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$112,610,415) $116,479,856
============
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
(2) Security has been segregated to cover margin requirements for open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Alabama
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at August 31, 1995, 56.7% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.5% to 27.3% of total investments.
See notes to financial statements
48
<PAGE> 5
- --------------------------------------------------------------------------------
Arkansas Tax Free Portfolio
Portfolio of Investments - August 31, 1995
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 3.2%
A1 NR $1,750 University of Arkansas
Board of Trustees, 7.20%,
12/1/10 (2) $ 1,923,338
A NR 610 Arkansas State Student Loan
Authority, 7.25%, 6/1/09 666,193
-----------
$ 2,589,531
-----------
ELECTRIC UTILITIES - 9.2%
A NR $1,750 Conway, Arkansas Electric,
5.70%, 8/1/09 $ 1,764,368
NR BBB 1,250 Guam Power Authority,
5.25%, 10/1/13 1,123,200
NR BBB 1,250 Guam Power Authority,
5.25%, 10/1/23 1,072,300
Baa2 BBB 1,500 Independence, Arkansas PCR
(AR Power & Light), 6.25%,
1/1/21 1,507,470
Baa2 BBB- 750 Jefferson, Arkansas PCR (AR
Power & Light), 6.125%,
10/1/07 750,225
Baa2 BBB 550 Jefferson, Arkansas PCR (AR
Power & Light), 6.30%,
6/1/18 564,174
Baa2 BBB 500 Pope, Arkansas PCR (AR
Power & Light), 6.30%,
12/1/16 510,100
Baa1 A- 500 Puerto Rico Electric Power
Authority, 0%, 7/1/17 132,214
-----------
$ 7,424,051
-----------
ESCROWED - 3.4%
Aaa AAA $ 500 Arkansas DFA Wastewater
System (MBIA), 7.00%,
6/1/14 $ 567,760
Aaa NR 650 Arkansas State Waste
Disposal and Pollution
Abatement U.T.G.O., 6.25%,
7/1/22 714,110
Aaa AAA 500 Harrison, Arkansas Single
Family Mortgage (FGIC),
7.40%, 9/1/11 574,114
Aaa AAA 750 Puerto Rico Public
Buildings Authority 6.875%,
7/1/21 861,848
-----------
$ 2,717,832
-----------
GENERAL OBLIGATIONS - 8.2%
Aa AA $ 750 Arkansas State College
Savings, 0%, 6/1/13 $ 273,465
Aa AA 2,750 Arkansas State College
Savings, 0%, 6/1/14 938,658
Baa1 A 1,000 Puerto Rico Public
Improvement, 5.25%, 7/1/18 901,610
Baa1 A 2,000 Puerto Rico Commonwealth
Unlimited Tax 5.50%, 7/1/13 1,901,760
Baa1 A 2,000 Puerto Rico Public
Buildings Authority, 5.50%,
7/1/21 1,839,920
NR NR 750 Virgin Island, Public
Finance Authority, 7.25%,
10/1/18 787,515
-----------
$ 6,642,928
-----------
HOSPITALS - 14.8%
Aa AA $3,000 Arkansas DFA (Sisters of
Mercy), 5.00%, 6/1/19 $ 2,664,180
Baa NR 700 Baxter, Arkansas Hospital
Improvement, 7.25%, 9/1/07 744,611
Baa NR 750 Baxter, Arkansas Hospital
Improvement, 7.50%, 9/1/21 800,970
NR A+ 1,125 Little Rock, Arkansas
(Baptist Medical Center),
6.80%, 11/1/05 1,256,108
NR A+ 2,250 Little Rock, Arkansas
(Baptist Medical Center),
5.50%, 9/1/15 2,137,545
NR A 1,000 Little Rock, Arkansas
(Baptist Medical
Center-Parkway Village),
7.00%, 10/1/17 1,064,340
NR A- 2,250 Pulaski, Arkansas
(Children's Hospital),
6.20%, 3/1/22 2,253,150
A1 AA 1,000 Sebastian, Arkansas (Sparks
Regional Medical Center),
5.60%, 4/1/06 1,026,020
-----------
$11,946,924
-----------
HOUSING - 11.7%
NR AAA $2,400 Arkansas DFA Single Family
Mortgage (GNMA, AMT),
5.80%, 6/1/25 $ 2,230,272
NR AAA 765 Arkansas DFA Single Family
Mortgage (GNMA, AMT),
7.85%, 12/1/21 809,592
NR AAA 1,000 Arkansas DFA Single Family
Mortgage (GNMA/FNMA, AMT),
6.35%, 7/1/22 999,880
NR AAA 1,000 Arkansas DFA Single Family
Mortgage (GNMA/FNMA),
6.60%, 7/1/17 1,032,200
NR AAA 1,500 Arkansas DFA Single Family
Mortgage (GNMA/FNMA, AMT),
6.80%, 1/1/22 1,547,790
NR AAA 740 Arkansas DFA Single Family
Mortgage (GNMA/FNMA),
6.70%, 7/1/27 746,519
NR AAA 1,000 Arkansas DFA Single Family
Mortgage (GNMA, AMT),
7.45%, 1/1/27 1,077,470
A NR 3,000 Arkansas DFA Compound
Accretion, 0%, 12/1/11 974,010
-----------
$ 9,417,733
-----------
INDUSTRIAL DEVELOPMENT
REVENUE/POLLUTION CONTROL
REVENUE - 13.2%
Baa2 BBB $2,350 Baxter, Arkansas (Aeroquip
Corporation), 5.80%,
10/1/13 $ 2,280,816
A1 AA- 2,500 Blythesville, Arkansas
(Nucor Corporation), (AMT),
6.90%, 12/1/21 2,653,825
A3 A- 755 Gurdon, Arkansas
(International Paper),
5.75%, 2/1/08 755,627
A1 AA- 1,000 Jonesboro, Arkansas
(Anheuser-Busch), 6.50%,
11/15/12 1,074,290
</TABLE>
49
<PAGE> 6
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INDUSTRIAL DEVELOPMENT REVENUE/
POLLUTION CONTROL REVENUE - (CONTINUED)
NR A- 550 Pine Bluff, Arkansas
(International Paper),
(AMT), 5.55%, 10/1/17 517,347
A2 NR 750 Puerto Rico IME (American
Home Products), 5.10%,
12/1/18 670,215
Baa3 BB+ 2,740 Puerto Rico Ports Authority
(American Airlines) (AMT),
6.30%, 6/1/23 2,718,353
-----------
$10,670,473
-----------
INSURED ELECTRIC UTILITIES - 7.5%
Aaa AAA $ 500 Independence, Arkansas PCR
(AR Power & Light) (FSA),
6.25%, 1/1/21 $ 519,265
Aaa AAA 250 North Little Rock, Arkansas
Electric System (MBIA),
6.50%, 7/1/10 271,900
Aaa AAA 3,390 North Little Rock, Arkansas
Electric System (MBIA),
6.50%, 7/1/15 3,722,016
Aaa AAA 450 Puerto Rico Electric Power
Authority (STRIPES) (FSA),
Variable, 7/1/03 (1) 502,475
Aaa AAA 1,000 West Memphis, Arkansas
Public Utilities (MBIA),
6.60%, 1/1/09 1,073,250
-----------
$ 6,088,906
-----------
INSURED GENERAL OBLIGATIONS - 7.0%
Aaa AAA $1,610 Jonesboro, Arkansas School
District (AMBAC), 6.125%,
2/1/15 $ 1,629,352
Aaa AAA 3,000 Springdale, Arkansas School
District (AMBAC), 5.125%,
6/1/16 2,760,630
Aaa AAA 680 White Hall, Arkansas School
District (AMBAC), 4.75%,
4/1/12 620,140
Aaa AAA 710 White Hall, Arkansas School
District (AMBAC), 4.75%,
4/1/13 645,248
-----------
$ 5,655,370
-----------
INSURED HEALTH CARE - 1.1%
Aaa AAA $ 400 Saline, Arkansas Healthcare
(Evan Lutheran Good
Samaritan) (AMBAC), 5.80%,
5/1/11 $ 394,280
Aaa AAA 500 Saline, Arkansas Healthcare
(Evan Lutheran Good
Samaritan) (AMBAC), 6.00%,
6/1/18 513,665
-----------
$ 907,945
-----------
INSURED TRANSPORTATION - 0.6%
Aaa AAA $ 500 Little Rock, Arkansas
Airport (MBIA), 6.00%,
11/1/14 $ 508,370
-----------
INSURED WATER & SEWER - 7.2%
Aaa AAA $1,670 Arkansas DFA Wastewater
System (MBIA), 5.40%,
12/1/15 $ 1,598,541
Aaa AAA 1,680 Arkansas DFA Wastewater
System (MBIA), 5.00%,
12/1/08 1,621,502
Aaa AAA 2,000 Arkansas DFA Wastewater
System (MBIA), 5.00%,
6/1/15 1,821,960
Aaa AAA 300 Beaver, Arkansas Water
District (MBIA), 5.85%,
11/15/08 312,741
Aaa AAA 500 Jonesboro, Arkansas Water
and Light (AMBAC), 5.25%,
12/1/13 477,915
-----------
$ 5,832,659
-----------
MISCELLANEOUS - 2.9%
A NR $2,000 Little Rock, Arkansas Hotel
and Restaurant Gross
Receipts Tax, 7.375%,
8/1/15 $ 2,329,700
-----------
SPECIAL TAX REVENUE - 3.2%
Baa1 A $3,000 Puerto Rico Highway and
Transportation, 5.00%,
7/1/22 $ 2,591,430
-----------
WATER & SEWER REVENUE - 6.8%
NR NR $ 800 Conway, Arkansas Water,
5.40%, 5/1/11 $ 772,880
NR NR 1,250 Cross, Arkansas Rural
Water, 5.75%, 4/1/18 1,254,574
A1 NR 2,000 Little Rock, Arkansas
Sewer, 5.50%, 8/1/14 1,933,740
NR NR 1,500 South Sebastian, Arkansas
Water, 6.15%, 6/1/23 1,534,815
-----------
$ 5,496,009
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$79,275,204) $80,819,861
===========
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
(2) Security has been segregated to cover margin requirements for open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Arkansas
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at August 31, 1995, 23.4% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.7% to 6.1% of total investments.
See notes to financial statements
50
<PAGE> 7
- --------------------------------------------------------------------------------
Georgia Tax Free Portfolio
Portfolio of Investments - August 31, 1995
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 5.6%
Aa1 AA- $3,000 Dekalb County Georgia,
Emory University, 6.00%,
10/1/14 $ 3,058,170
Aa AA- 3,425 Private Colleges and
Universities Authority,
Agnes Scott College,
5.625%, 6/1/23 3,324,100
Aa1 AA- 310 Private Colleges and
Universities Authority,
Emory University, 6.40%,
10/1/23 321,628
------------
$ 6,703,898
------------
ESCROWED - 0.2%
Aaa AAA $ 250 Cherokee County, Georgia,
Water and Sewer, (MBIA),
6.90%, 8/1/18 $ 279,650
------------
GENERAL
OBLIGATIONS - 15.0%
Aa AA- $ 300 Alpharetta, Georgia,
6.50%, 5/1/10 $ 331,482
Aa AA 3,350 Atlanta, Georgia, 6.10%,
12/1/19 3,398,575
Aa AA 2,000 Atlanta, Georgia, 6.125%,
12/1/23 2,024,880
Aa AA 3,000 Atlanta, 6.25%, 10/1/12 3,111,120
Aa AA 1,650 Atlanta, 6.25%, 10/1/16 1,699,351
A1 NR 150 Cherokee County School
District, 6.375%, 6/1/7 160,494
Aa AA 1,000 Downtown Savannah
Authority Georgia Revenue,
5.00%, 1/1/11 931,930
Aa AA- 250 Clayton County, Georgia,
Solid Waste, 6.50%, 2/1/12 264,043
Aa AA 1,000 Fulton County School
District, 5.60%, 1/1/13 983,590
Aaa AA+ 500 Georgia, 6.30%, 3/1/08 553,930
Aa1 AA+ 1,480 Gwinnett County, Georgia,
Water and Sewerage, 6.50%,
8/1/06 1,491,618
A A 450 Paulding County School
District, 6.625%, 2/1/08 495,477
Baa1 A 1,000 Puerto Rico, 5.75%, 7/1/15 963,290
NR NR 1,400 Virgin Island, 7.25%,
10/1/18 1,470,028
------------
$ 17,879,808
------------
HOSPITALS - 10.5%
Baa1 NR $4,250 Fulco Hospital, Georgia
Baptist, 6.375%, 9/1/22 $ 3,973,495
A NR 5,040 Savannah, Georgia, St.
Joseph's Hospital, 6.20%,
7/1/23 4,877,460
NR BBB 1,285 Toombs County, Dr. John M.
Meadows Memorial Hospital,
7.00%, 12/1/17 1,262,088
NR BBB+ 2,750 Tri City Hospital, 6.375%,
7/1/16 2,449,947
------------
$ 12,562,990
------------
HOUSING - 13.9%
NR AAA $4,000 Fulton County, HFA, (AMT),
6.64%, 3/1/28 $ 4,031,960
Aa NR 1,450 Georgia HFA, (AMT),
6.875%, 12/1/20 1,495,342
Aa AA+ 395 Georgia Resource
Authority, SFMR, (FHA),
7.50%, 6/1/17 419,569
Aa AA 2,500 Georgia HFA, (FHA Insured
or VA Guaranteed), (AMT),
6.70%, 12/1/25 2,558,500
Aa AA+ 1,500 Georgia HFA, (AMT), 7.05%,
12/1/20 1,567,290
Aa AA+ 2,380 Georgia HFA, (AMT),
7.125%, 12/1/26 2,491,169
Aa AA+ 4,000 Georgia HFA, (AMT), 6.55%,
12/1/27 4,006,320
------------
$ 16,570,150
------------
INDUSTRIAL DEVELOPMENT
AUTHORITY - 5.6%
A1 AA- $1,000 Cartersville, Georgia,
Anheuser-Busch, (AMT),
7.375%, 5/1/09 $ 1,157,340
A2 NR 1,000 Puerto Rico IME, American
Home, 5.10%, 12/1/18 893,620
A1 A- 750 Savannah Union Camp
Corporation, 6.80%, 2/1/12 806,258
NR NR 1,250 Savannah Economic
Development, (AMT), 9.00%,
1/1/15 1,332,375
NR AA- 500 Savannah, Hershey Foods,
6.60%, 6/1/12 532,700
NR AA- 2,000 Vienna, Cargill Project,
6.00%, 9/1/14 2,002,940
------------
$ 6,725,233
------------
INSURED GENERAL
OBLIGATIONS - 4.0%
Aaa AAA $2,990 Houston County School
District, (MBIA), 5.375%,
3/1/11 $ 2,858,291
Aaa AAA 1,350 Jackson County School
District, (MBIA), 6.00%,
7/1/14 1,369,170
Aaa AAA 500 Puerto Rico, Public
Improvement Bonds of 1992,
(AMBAC), Variable, 7/1/15
(1) 505,850
------------
$ 4,733,311
------------
INSURED HOSPITAL - 13.2%
Aaa AAA $ 675 Chatham County, Memorial
Medical Center, (MBIA),
7.00%, 1/1/21 $ 723,424
Aaa AAA 305 Chatham County, Memorial
Medical Center, (MBIA),
6.85%, 1/1/21 325,972
Aaa AAA 1,300 Cobb County, Kennestone
Hospital, (MBIA), 5.00%,
4/1/24 1,137,682
</TABLE>
51
<PAGE> 8
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED HOSPITAL - (CONTINUED)
Aaa AAA 3,225 Gainsville and Hall
County, NE Healthcare,
(MBIA), 6.00%, 10/1/25 3,235,804
Aaa AAA 3,000 Gwinnett County, Gwinnett
Hospital, (AMBAC), 5.00%,
9/1/13 2,709,300
Aaa AAA 2,500 Macon-Bibb County Hospital
Authority, The Medical
Center of Central Georgia,
(FGIC), 5.00%, 8/1/14 2,269,375
Aaa AAA 2,000 Medical Center Hospital
Authority, Columbus
Regional Healthcare
System, (MBIA), 6.40%,
8/1/06 2,165,640
Aaa AAA 1,500 Medical Center Hospital
Authority, Columbus
Regional Healthcare
System, (MBIA), Variable,
8/1/10 (1) 1,664,775
Aaa AAA 1,375 Walker, Dade and Catoosa
Counties Hospital, (FGIC),
7.00%, 10/1/10 1,518,688
------------
$ 15,750,660
------------
INSURED HOUSING - 0.9%
Aaa AAA $1,000 East Point Building
Authority, (FGIC), 6.00%,
2/1/10 $ 1,024,810
------------
INSURED SPECIAL TAX - 1.8%
Aaa AAA $1,000 Metropolitan Atlanta Rapid
Transit Authority,
(AMBAC), 6.25%, 7/1/11 $ 1,062,100
Aaa AAA 1,000 Metropolitan Atlanta Rapid
Transit Authority,
(AMBAC), 6.25%, 7/1/20 1,065,560
------------
$ 2,127,660
------------
INSURED TRANSPORTATION - 0.8%
Aaa AAA $1,000 Atlanta Airport Facility
Revenue, (AMBAC), (AMT),
6.00%, 1/1/21 $ 994,740
------------
INSURED UTILITIES - 3.3%
Aaa AAA $1,480 Cordele Public Utility
Authority, (MBIA), 6.50%,
11/1/19 $ 1,554,133
Aaa AAA 750 Municipal Electric
Authority of Georgia,
(MBIA), 0%, 1/1/07 409,410
Aaa AAA 1,000 Municipal Electric
Authority of Georgia,
(FGIC), 5.50%, 1/1/12 973,670
Aaa AAA 900 Puerto Rico Electric Power
Authority, (FSA),
Variable, 7/1/03 (1) 1,004,949
------------
$ 3,942,162
------------
INSURED WATER & SEWER - 3.8%
Aaa AAA $2,700 Atlanta, Water and Sewer,
(FGIC), 5.00%, 1/1/15 $ 2,424,708
Aaa AAA 1,975 Cherokee County, Water and
Sewerage, (MBIA), 6.875%,
8/1/13 2,121,012
------------
$ 4,545,720
------------
LEASE/CERTIFICATES OF
PARTICIPATION - 1.0%
Aa AA $ 310 Fulton County, Lease
Revenue, 0%, 1/1/09 $ 146,828
Aa AA 2,300 Fulton County, Lease
Revenue, 0%, 1/1/10 1,022,787
------------
$ 1,169,615
------------
LIFE CARE - 1.2%
NR NR $1,500 Dekalb Private Hospital,
Assisted Living, Atlanta
Inc, 8.50%, 3/1/25 $ 1,463,625
------------
SOLID WASTE - 0.9%
A1 A+ $1,000 Savannah Energy Systems
Company Project, 6.30%,
12/1/06 $ 1,049,330
------------
SPECIAL TAX REVENUE - 0.4%
Baa1 A $ 500 Puerto Rico Commonwealth
Highway, 5.50%, 7/1/17 $ 468,025
------------
TRANSPORTATION - 1.3%
Ba3 BB $1,500 Atlanta Special Purpose
Facilities, Delta
Airlines, (AMT), 7.90%,
12/1/18 $ 1,592,475
------------
UTILITIES - 15.5%
A1 A $2,000 Burke County, PCR, Georgia
Power, 6.375%, 8/1/24 $ 2,023,820
A A 1,000 Georgia Muni Electric
Power Authority, 0%,
1/1/12 368,600
A A 3,000 Georgia Muni Electric
Power Authority, 5.50%,
1/1/20 2,744,730
A A 3,000 Georgia Muni Electric
Power Authority, 5.70%,
1/1/23 2,795,940
A A 2,000 Georgia Muni Electric
Power Authority, 8.25%,
1/1/11 2,455,640
A1 A+ 1,000 Monroe County, PCR, Gulf
Power, 6.30%, 9/1/24 1,013,890
A3 A+ 4,000 Monroe County, PCR,
Ogelthorpe Power, 6.55%,
1/1/06 4,383,200
A3 A+ 2,000 Monroe County, PCR,
Ogelthorpe Power, 6.70%,
1/1/09 2,198,480
Baa1 A- 665 Puerto Rico Electrical
Power Authority, 0%,
7/1/17 175,846
Baa1 A- 250 Puerto Rico Electrical
Power Authority, 7.00%,
7/1/07 268,552
------------
$ 18,428,698
------------
</TABLE>
52
<PAGE> 9
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WATER & SEWER REVENUE - 1.1%
A NR $ 150 Augusta, Water and Sewer
Authority, 6.50%, 5/1/11 $ 157,886
A A+ 1,000 Columbus, Water and Sewer
Authority, 5.70%, 5/1/20 965,280
A NR 200 Richmond County, Water and
Sewer Authority, 6.50%,
10/1/21 207,606
------------
$ 1,330,772
------------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$115,913,957) $119,343,332
============
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
The Portfolio invests primarily in debt securities issued by Georgia
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at August 31, 1995, 27.8% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.8% to 15.0% of total investments.
See notes to financial statements
53
<PAGE> 10
- --------------------------------------------------------------------------------
Kentucky Tax Free Portfolio
Portfolio of Investments - August 31, 1995
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 5.5%
Aa1 NR $2,460 Berea, Kentucky
Educational Development,
5.45%, 3/1/14 $ 2,363,101
A1 AA- 500 University of Kentucky
Consolidated Educational
Buildings, 6.40%, 5/1/09 528,865
A1 AA- 785 University of Kentucky
Consolidated Educational
Buildings, 6.40%, 5/1/11 825,059
A1 AA- 1,295 University of Louisville
Consolidated Educational
Buildings, 5.875%, 5/1/11 1,322,350
A1 AA- 1,000 University of Louisville
Consolidated Educational
Buildings, 5.40%, 5/1/08 999,920
A1 AA- 2,000 University of Louisville
Consolidated Educational
Buildings, 5.40%, 5/1/11 1,958,500
------------
$ 7,997,795
------------
ELECTRIC UTILITIES - 6.8%
Aa2 AA- $2,000 Carroll, Kentucky PCR (KY
Utilities Company), 6.25%,
2/1/18 $ 2,069,820
NR BBB 400 Guam Power Authority,
5.25%, 10/1/23 343,135
Aa2 AA 1,000 Jefferson, Kentucky PCR
(Louisville G&E Company),
5.625%, 8/15/19 967,410
Aa2 AA- 1,000 Muhlenburg, Kentucky PCR
(KY Utilities Company),
6.25%, 2/1/18 1,031,540
NR A 2,315 Nicholasville, Kentucky
Utilities 5.10%, 10/1/12 2,089,635
Baa1 A- 3,500 Puerto Rico Electric Power
Authority, 0%, 7/1/17 925,505
Baa1 A- 2,250 Puerto Rico Electric Power
Authority, 6.375%, 7/1/2 2,289,308
------------
$ 9,716,353
------------
ESCROWED - 1.3%
NR NR $ 190 KY DFA St. Claire Medical
Center, 7.125%, 9/1/21 $ 216,674
Aaa NR 510 Lexington-Fayette,
Kentucky Government Public
Facilities, 6.40%, 4/1/12 569,084
Aaa A 1,000 University of Puerto Rico,
6.50%, 6/1/13 1,062,770
------------
$ 1,848,528
------------
GENERAL OBLIGATIONS - 2.9%
NR A+ $1,030 KY League of Cities
Funding Trust Floating
Indebtedness Certificates
of Participation, 6.15%,
8/1/13 $ 1,041,959
NR A 1,415 KY League of Cities
Funding Trust Floating
Indebtedness Certificates
of Participation, 5.90%,
8/1/16 1,376,837
Baa1 A 1,255 Puerto Rico Public
Building Authority, 5.50%,
7/1/21 1,154,550
NR NR 500 Virgin Islands, 7.25%,
10/1/18 525,010
------------
$ 4,098,356
------------
HOSPITALS - 0.8%
Baa1 BBB $ 975 Russell, Kentucky
Franciscan Sisters of the
Poor Health System, 8.10%,
7/1/15 $ 1,102,052
------------
HOUSING - 1.7%
NR AAA $1,500 Boone, Kentucky
Multi-Family (Walnut Creek
Apartments) (FHA), 7.00%,
1/1/27 $ 1,544,520
Aa1 AAA 840 KY Housing (FHA) (AMT),
7.45%, 1/1/23 869,492
------------
$ 2,414,012
------------
INDUSTRIAL DEVELOPMENT
REVENUE/POLLUTION CONTROL
REVENUE - 11.4%
Baa1 BBB $3,355 Ashland, Kentucky Solid
Waste (Ashland Oil) (AMT),
7.20%, 10/1/20 $ 3,515,470
Baa1 NR 2,425 Ashland, Kentucky Solid
Waste (Ashland Oil) (AMT),
7.125%, 2/1/22 2,537,569
NR NR 1,000 Elsmere, Kentucky
(Courtaulds Package
Corporation), 6.75%,
4/1/10 1,020,860
NR NR 3,075 Fulton, Kentucky
(H.I.S.-Chic Jeans),
(AMT), 7.50%, 2/1/10 3,125,123
Aa3 AA 1,000 Jefferson, Kentucky (E.I.
du Pont de Nemours),
6.30%,
7/1/12 1,067,180
Baa2 BBB 1,075 Johnson, Kentucky (KMart
Corporation), 6.45%,
7/1/08 1,073,011
NR BBB 985 Owensboro, Kentucky (KMart
Corporation), 6.80%,
12/1/07 1,005,232
NR BBB 915 Powderly, Kentucky (KMart
Corporation), 6.90%,
3/1/07 939,293
A2 NR 1,190 Puerto Rico IM&E (American
Home), 5.10%, 12/1/18 1,063,407
Baa3 BB+ 500 Puerto Rico Port Authority
(American Airlines),
(AMT), 6.30%, 6/1/23 496,050
Ba2 NR 500 Winchester, Kentucky
(Kroger Corporation),
6.90%, 7/1/99 524,640
------------
$ 16,367,835
------------
INSURED EDUCATION - 0.5%
Aaa AAA $ 700 Northern KY University
Educational Buildings
(AMBAC), 6.25%, 5/1/12 $ 733,817
------------
INSURED ELECTRIC UTILITIES - 4.1%
Aaa AAA $6,280 Boone, Kentucky
Collateralized PCR (MBIA),
5.50%, 1/1/24 $ 5,862,254
------------
</TABLE>
54
<PAGE> 11
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED GENERAL OBLIGATION - 0.6%
Aaa AAA $1,000 Jefferson, Kentucky School
District U.T.G.O. (MBIA),
4.875%, 1/1/13 $ 892,640
------------
INSURED HOSPITALS - 14.8%
Aaa AAA $2,500 Daviess, Kentucky Hospital
(ODCH Inc.) (MBIA), 6.25%,
8/1/22 $ 2,554,525
Aaa AAA 2,000 Hopkins, Kentucky Hospital
(Trover Clinic Foundation)
(MBIA), 6.625%, 11/15/11 2,122,200
Aaa AAA 2,500 Jefferson, Kentucky Jewish
Hospital (AMBAC), 6.50%,
5/1/15 2,610,575
Aaa AAA 1,750 Jefferson, Kentucky Jewish
Hospital (AMBAC), 6.55%,
5/1/22 1,833,283
Aaa AAA 4,000 KY DFA St. Luke's Hospital
(MBIA), 7.00%, 10/1/21 4,322,440
Aaa AAA 9,000 KY EDA Baptist Healthcare
(MBIA), 5.00%, 8/15/24 7,814,880
------------
$ 21,257,903
------------
INSURED LEASE/COP - 1.7%
Aaa AAA $2,000 Danville, Kentucky
Multi-City Lease (MBIA),
5.875%, 9/1/10 $ 2,044,640
Aaa AAA 400 Lexington-Fayette,Kentucky
Government Public
Facilities (FSA), 4.50%,
2/1/10 350,380
------------
$ 2,395,020
------------
INSURED TRANSPORTATION - 4.5%
Aaa AAA $1,000 Kenton, Kentucky Airport
(Cincinnati/Northern KY)
(FSA) (AMT), 6.30%, 3/1/15 $ 1,019,710
Aaa AAA 1,000 KY EDA Turnpike
(Revitalization Project)
(FGIC), 0%, 1/1/10 440,380
Aaa AAA 1,000 KY EDA Turnpike
(Revitalization Project)
(AMBAC), 5.50%, 7/1/11 981,280
Aaa AAA 1,170 Louisville & Jefferson,
Kentucky KY Regl. Airport
(MBIA), 5.30%, 7/1/23 1,077,500
Aaa AAA 3,250 Louisville & Jefferson,
Kentucky KY Regl. Airport
(MBIA) (AMT), 5.50%,
7/1/23 2,998,222
------------
$ 6,517,092
------------
INSURED WATER AND SEWER - 9.5%
Aaa AAA $1,000 Hardin, Kentucky Water
System (MBIA), 5.90%,
1/1/25 $ 1,001,620
Aaa AAA 800 Kenton, Kentucky Water
District (FGIC), 6.375%,
2/1/17 839,576
Aaa AAA 2,000 Kenton, Kentucky Water
District (FGIC), 6.00%,
2/1/17 2,027,020
Aaa AAA 500 Lexington-Fayette,
Kentucky Government Sewer
(MBIA), 6.375%, 7/1/12 527,360
Aaa AAA 1,000 Louisville & Jefferson,
Kentucky Sewer District
(MBIA), 5.25%, 5/15/14 938,730
Aaa AAA 2,840 Louisville & Jefferson,
Kentucky Sewer District
(MBIA), 5.40%, 5/15/19 2,680,477
Aaa AAA 2,000 Louisville & Jefferson,
Kentucky Sewer District
(MBIA), 5.50%, 5/15/21 1,909,900
Aaa AAA 500 Louisville & Jefferson,
Kentucky Sewer District
(MBIA), 5.50%, 5/15/23 474,130
Aaa AAA 1,000 Louisville & Jefferson,
Kentucky Sewer District
(AMBAC), 6.75%, 5/15/19 1,079,010
Aaa AAA 2,000 Louisville & Jefferson,
Kentucky Sewer District
(AMBAC), 6.75%, 5/15/25 2,149,480
------------
$ 13,627,303
------------
LEASE REVENUE BONDS - 21.4%
A A $1,300 Boone, Kentucky School
District Finance, 6.75%,
9/1/11 $ 1,390,077
A NR 2,250 Boone, Kentucky School
District Finance, 6.125%,
12/1/17 (1) 2,293,718
A NR 3,000 Boone, Kentucky School
District Finance, 5.70%,
5/1/18 2,921,610
A NR 1,670 Campbell, Kentucky School
District Finance, 5.10%,
2/1/12 1,533,995
A NR 700 Campbell, Kentucky School
District Finance, 4.80%,
2/1/11 617,568
A NR 1,790 Campbell, Kentucky School
District Finance, 4.875%,
2/1/14 1,544,054
A NR 820 Covington, Kentucky
Independent School
District Finance, 5.20%,
6/1/13 759,017
A1 A+ 905 Jefferson, Kentucky School
District Finance, 4.875%,
1/1/11 823,269
A1 A+ 1,250 Jefferson, Kentucky School
District Finance, 4.875%,
1/1/12 1,126,513
A1 A 4,990 Jefferson, Kentucky
Capital Projects
Corporation, 0%, 8/15/15 1,517,259
A NR 260 Johnson, Kentucky School
District Finance, 5.00%,
6/1/11 239,203
A NR 300 Johnson, Kentucky School
District Finance, 5.00%,
6/1/13 271,137
A A+ 2,860 KY State Property and
Buildings, 5.00%, 9/1/13 2,582,866
A A+ 2,500 KY State Property and
Buildings, 6.00%, 9/1/14 2,513,950
</TABLE>
55
<PAGE> 12
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LEASE REVENUE BONDS -
(CONTINUED)
A A- 1,000 Louisville, Kentucky
Public Properties
Corporation, 6.80%,
12/1/22 1,057,500
Aa NR 2,000 Mount Sterling, Kentucky
League of Cities Trust,
6.15%, 3/1/13 1,964,300
Aa NR 4,500 Mount Sterling, Kentucky
League of Cities Trust,
6.20%, 3/1/18 4,382,955
A NR 2,000 Owensboro, Kentucky
Airport, 5.875%, 6/1/15 1,913,200
A NR 615 Pulaski, Kentucky School
District Finance, 5.75%,
2/1/10 615,978
A NR 595 Pulaski, Kentucky School
District Finance, 5.80%,
2/1/11 593,161
------------
$ 30,661,330
------------
SOLID WASTE - 2.2%
Baa2 BBB- $3,000 Henderson, Kentucky
(MacMillan Blodel Project)
(AMT), 7.00%, 3/1/25 $ 3,083,370
------------
SPECIAL TAX REVENUE - 4.4%
Baa1 A $ 415 Puerto Rico Highway &
Transportation Authority,
5.25%, 7/1/21 $ 366,939
Baa1 A 5,655 Puerto Rico Highway &
Transportation Authority,
6.625%, 7/1/18 5,901,558
------------
$ 6,268,497
------------
TRANSPORTATION - 4.3%
NR BBB $2,000 Guam Airport Authority,
6.70%, 10/1/23 $ 2,014,400
Ba1 BB 1,000 Kenton, Kentucky Airport
(Delta Airlines) (AMT),
6.75%, 2/1/02 1,044,720
Ba1 BB 250 Kenton, Kentucky Airport
(Delta Airlines) (AMT),
7.50%, 2/1/12 263,820
Ba1 BB 500 Kenton, Kentucky Airport
(Delta Airlines) (AMT),
7.50%, 2/1/20 527,640
Ba1 BB 2,400 Kenton, Kentucky Airport
(Delta Airlines) (AMT),
6.125%, 2/1/22 2,258,183
------------
$ 6,108,763
------------
WATER AND SEWER REVENUE - 1.6%
NR A $1,500 Campbell, Kentucky Water
District, 6.60%, 12/1/11 $ 1,572,360
A NR 650 Hardin, Kentucky Water
District, 6.50%, 9/1/12 679,965
------------
$ 2,252,325
------------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$141,197,528) $143,205,245
============
</TABLE>
(1) Security has been segregated to cover margin requirements for open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Kentucky
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at August 31, 1995, 35.8% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 1.0% to 26.0% of total investments.
See notes to financial statements
56
<PAGE> 13
- --------------------------------------------------------------------------------
Louisiana Tax Free Portfolio
Portfolio of Investments - August 31, 1995
- --------------------------------------------------------------------------------
TAX EXEMPT INVESTMENTS - 100%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 3.2%
Aa NR $ 150 Louisiana PFA, Student Loan
Revenue Bonds, (AMT),
6.75%, 9/1/06 $ 162,170
Aa NR 100 Louisiana PFA, Student Loan
Revenue Bonds, (AMT),
7.00%, 9/1/06 104,676
NR BBB- 400 Puerto Rico ITEM&EC,
(Polytechnic University of
Puerto Rico), 5.70%, 8/1/13 370,384
NR BBB- 500 Puerto Rico ITEM&EC,
(Polytechnic University of
Puerto Rico), 5.50%, 8/1/24 438,075
-----------
$ 1,075,305
-----------
GENERAL OBLIGATION - 2.8%
NR BBB $ 250 Government of Guam, 5.375%,
11/15/13 $ 222,418
Baa1 A 750 Puerto Rico PBA, Public
Education and Health
Facilities, 5.75%, 7/1/15 722,468
-----------
$ 944,886
-----------
HEALTH CARE - 8.1%
NR AAA $2,000 Louisiana HFA, Mortgage
Revenue Bonds, (GNMA
Collateralized) St. Joseph
Manor Retirement Center,
7.80%, 12/1/35 $ 2,215,260
NR AAA 500 Louisiana HFA, (GNMA
Collateralized), St.
Dominic Assisted
Care - Facility, 6.85%,
9/1/25 510,345
-----------
$ 2,725,605
-----------
HOUSING - 26.5%
Aaa NR $ 935 East Baton Rouge Mortgage
Finance Authority SF,
7.00%, 4/1/32 $ 966,528
Aaa NR 155 East Baton Rouge Mortgage
Finance Authority SF,
7.10%, 10/1/24 158,243
NR AAA 2,000 Parish of Jefferson, Home
Mortgage Authority (TEAMS),
7.35%, 12/1/16 2,208,760
NR AAA 620 Louisiana HFA, MFMB,
(FHA),6.95%, 7/1/16 631,916
Aaa NR 1,240 Louisiana HFA, SFMB, 8.00%,
3/1/25 1,349,318
Aaa NR 1,635 Louisiana HFA, SFMB, 6.55%,
12/1/26 1,621,887
NR AAA 500 Louisiana HFA, (Multifamily
Housing - Tall Timbers
Apartment), (FHA) (AMT),
5.90%, 12/1/18 475,705
NR AAA 150 Louisiana HFA, (Multifamily
Housing - Westview
Apartment II), (FHA),
7.95%,
1/1/32 159,129
NR AAA 1,000 Louisiana PFA, (FNMA
Collaterallized,
Multifamily
Housing - Edgewood
Apartments), 5.70%, 6/1/05 1,003,990
A NR 350 Shreveport, Louisiana HFA,
(Multifamily Mortgage
Bonds - U.S. Goodman
Plaza - Section 8
Assisted), 6.10%, 8/1/19 336,791
-----------
$ 8,912,267
-----------
HOSPITALS - 3.3%
Aa AA $1,000 Louisiana Public Health
Facilities Bonds, (Sisters
of Mercy Health System),
5.00%, 6/1/19 (2) $ 868,510
NR A- 250 St. Tammany Parish Hospital
Service District No. 1,
Hospital Revenue Bonds,
6.50%, 7/1/22 250,135
-----------
$ 1,118,645
-----------
INDUSTRIAL DEVELOPMENT/
POLLUTION CONTROL - 6.4%
A3 A- $1,750 Bastrop IDB, Louisiana,
(International Paper),
6.60%, 3/1/19 $ 1,824,428
Aa3 NR 150 Parish of DeSoto, Pollution
Control (Southwestern
Electric Power), Company
Project, 7.60%, 1/1/19 171,657
Baa1 A- 150 South Louisiana Port
Commission Terminal, (GATX
Terminals Corporation),
7.00%, 3/1/23 155,570
-----------
$ 2,151,655
-----------
INSURED COLLEGE &
UNIVERSITY - 10.3%
Aaa AAA $2,500 Louisiana State University
and Agricultural and
Mechanical College (FGIC),
5.75%, 7/1/14 $ 2,457,475
Aaa AAA 1,100 University of Puerto Rico
(MBIA), 5.25%, 6/1/25 1,008,821
-----------
$ 3,466,296
-----------
INSURED GENERAL
OBLIGATIONS LOCAL - 17.6%
Aaa AAA $ 500 Caddo Parish, Louisiana
(MBIA), 5.25%, 2/1/07 $ 500,705
Aaa AAA 1,000 Caddo Parish, Louisiana
(MBIA), 5.25%, 2/1/08 992,750
Aaa AAA 500 City of Lafayette, Public
Improvement Sales Tax
Refunding Bonds (FGIC),
5.00%, 3/1/15 446,690
Aaa AAA 500 City of Lafayette, Public
Improvement Sales Tax
Refunding Bonds (FGIC),
5.00%, 3/1/16 445,265
</TABLE>
57
<PAGE> 14
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED GENERAL OBLIGATIONS
LOCAL - (CONTINUED)
Aaa AAA 1,000 City of Lafayette, Public
Improvement Sales Tax
Refunding Bonds (FGIC),
5.00%, 5/1/15 892,820
Aaa AAA 1,000 Louisiana PFA, Parish of
Jefferson, Drainage
Improvement Refunding Bonds
(FGIC), 5.00%, 8/1/10 919,900
Aaa AAA 500 Parish of East Baton Rouge,
Public Improvement Sales
Tax Bonds (FGIC), 5.90%,
2/1/17 494,575
Aaa AAA 990 Parish of East Baton Rouge,
Public Improvement Sales
Tax Bonds (FGIC), 4.80%,
2/1/14 864,646
Aaa AAA 400 Parish of East Baton Rouge,
Public Improvement Sales
Tax Bonds (FGIC), 4.90%,
2/1/16 349,020
-----------
$ 5,906,371
-----------
INSURED GENERAL OBLIGATIONS
SCHOOL DISTRICT - 1.4%
Aaa AAA $ 500 St. Tammany Parishwide
School District No.12,
Louisiana Unlimited Tax
School Bonds (FGIC), 5.00%,
3/1/12 $ 454,435
-----------
INSURED GENERAL OBLIGATIONS
STATE - 1.6%
Aaa AAA $ 300 State of Louisiana, (MBIA),
5.625%, 8/1/11 $ 299,511
Aaa AAA 250 Commonwealth of Puerto
Rico, Public Improvement
Bonds Residual Interest
Bonds (AMBAC), Variable,
7/1/15 (1) 252,925
-----------
$ 552,436
-----------
INSURED HOSPITAL - 3.0%
Aaa AAA $1,000 Parish of Jefferson,
Hospital District No.1
(FGIC), 5.25%, 1/1/19 $ 908,730
Aaa AAA 100 Louisiana PFA Hospital
Revenue Bonds, (Our Lady of
the Lake Regional Medical
Center), Residual Interest
Bonds (MBIA), Variable,
12/1/14 (1) 104,247
-----------
$ 1,012,977
-----------
INSURED MUNICIPAL ELECTRIC - 5.6%
Aaa AAA $2,000 Lafayette Public Power
Authority, Electric Revenue
Bonds (AMBAC), 5.25%,
11/1/12 $ 1,875,100
-----------
INSURED UTILITIES - 0.5%
Aaa AAA $ 150 City of Alexandria,
Utilities Bonds (FGIC),
6.00%, 5/1/06 $ 159,144
-----------
INSURED WATER & SEWER - 1.5%
Aaa AAA $ 500 Terrebone Parish,
Louisiana, Water Works
Revenue Bonds (FGIC),
5.75%, 11/1/08 $ 512,715
-----------
LIFE CARE - 2.3%
NR NR $ 500 Louisiana HFA, Assisted
Living Facility (HCC
Assisted Living Group I,
Inc.), 9.00%, 3/1/25 $ 484,475
NR NR 300 St. Tammany PFA (Christwood
Project), 9.00%, 11/15/25 287,667
-----------
$ 772,142
-----------
SPECIAL TAX - 3.9%
Baa1 A $1,500 Puerto Rico Highway and
Transportation Authority,
Highway Revenue Refunding
Bonds, Series X, 5.00%,
7/1/22 $ 1,295,715
-----------
TRANSPORTATION - 1.6%
A A- $ 500 Mississippi River Bridge
Authority, Bridge Revenue
Bonds, State of Louisiana,
Series 1992, 6.75%, 11/1/12
(2) $ 525,703
-----------
UTILITIES - 0.4%
Baa3 BBB- $ 150 Parish of Pointe Coupe, PCB
(Gulf States Utilities
Co.), 6.70%, 3/1/13 $ 149,387
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$33,349,873) $33,610,784
===========
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
(2) Security has been segregated to cover margin requirements for open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Louisiana
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at August 31, 1995, 54.8% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 3.8% to 26.5% of total investments.
See notes to financial statements.
58
<PAGE> 15
- --------------------------------------------------------------------------------
Maryland Tax Free Portfolio
Portfolio of Investments - August 31, 1995
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 0.9%
Aa AA+ $1,000 University of Maryland
Auxiliary Facilities &
Tuition, 6.30%, 2/1/10 $ 1,052,390
------------
ELECTRIC UTILITIES - 7.7%
A2 A $2,000 Calvert, Maryland PCR
(Baltimore Gas & Electric
Company), 5.55%, 7/15/14 $ 1,925,200
NR BBB 2,500 Guam Power Authority,
5.25%, 10/1/13 2,246,400
NR BBB 500 Guam Power Authority,
5.25%, 10/1/23 428,920
NR BBB 750 Guam Power Authority,
6.625%, 10/1/14 766,770
A1 A 500 Montgomery, Maryland PCR
(Potomac Electric Power
Company), 5.375%, 2/15/24 451,930
A1 A 2,225 Prince Georges, Maryland
PCR (Potomac Electric),
6.375%, 1/15/23 2,326,015
Baa1 A- 585 Puerto Rico Electric Power
Authority, 6.25%, 7/1/17 590,850
------------
$ 8,736,085
------------
ESCROWED - 5.3%
Aaa NR $1,125 Baltimore, Maryland Single
Family Mortgage (Inner
Harbor), 8.00%, 12/1/10 $ 1,359,543
Aaa AAA 500 Maryland Health & Higher
Educational (University of
Maryland) (FGIC), 6.50%,
7/1/21 552,000
NR AAA 1,000 Commonwealth of Puerto
Rico Public Improvement,
6.80%, 7/1/21 1,144,770
Aaa AAA 1,500 Puerto Rico Public
Buildings Authority,
6.875%, 7/1/21 1,723,695
NR AAA 1,000 University of Maryland
System Auxiliary Facility
and Tuition, 6.50%, 4/1/11 1,104,610
NR AAA 175 University of Maryland
System Auxiliary Facility
and Tuition, 6.50%, 4/1/2 197,971
------------
$ 6,082,589
------------
GENERAL OBLIGATIONS - 6.4%
Aa AA+ $1,000 Anne Arundel, Maryland,
5.30%, 4/15/16 $ 934,560
Aa AA- 1,500 Hartford, Maryland, 4.90%,
12/1/10 1,399,020
A AA- 230 Prince Georges, Maryland,
5.00%, 1/15/11 214,767
Baa1 A 1,000 Commonwealth of Puerto
Rico Public Improvement,
6.50%, 7/1/23 1,029,630
Baa1 A 100 Puerto Rico Aqueduct and
Sewer Authority, 7.875%,
7/1/17 111,057
Baa1 A 1,150 Puerto Rico Aqueduct and
Sewer Authority, 7.00%,
7/1/19 1,222,220
NR NR 750 Virgin Islands Public
Finance Authority, 7.25%
10/1/18 787,515
Aa1 AA 500 Washington, Maryland
Suburban Sanitary
District, 6.20%, 6/1/11 523,260
Aaa1 AA 600 Washington, Maryland
Suburban Sanitary
District, 5.00%, 6/1/10 577,542
Aa NR 500 Worcester, Maryland
Sanitary District, 6.55%,
8/15/17 539,210
------------
$ 7,338,781
------------
HOSPITALS - 20.7%
NR NR $ 490 Berlin, Maryland (Atlantic
General Hospital), 8.375%,
6/1/22 $ 516,382
A A 2,000 MD Health & Higher
Educational (Good
Samaritan Hospital),
5.75%, 7/1/19 1,881,420
A A 1,500 MD Health & Higher
Educational (Memorial
Hospital of Cumberland),
6.50%, 7/1/17 1,547,520
A1 A 4,050 MD Health & Higher
Educational (Suburban
Hospital), 5.125%, 7/1/21 3,563,271
Baa1 NR 1,000 MD Health & Higher
Educational (Union
Hospital of Cecil), 6.70%,
7/1/22 951,050
A A 1,200 MD Health & Higher
Educational (Peninsula
Regional Medical Center),
5.00%, 7/1/23 1,011,503
Baa1 BBB 1,250 MD Health & Higher
Educational (Howard County
General Hospital), 5.50%,
7/1/25 1,039,300
Aa AA- 2,000 MD State IDA (Holy Cross
Health System), 5.50%,
12/1/15 1,894,700
Baa NR 1,355 Prince Georges, Maryland
(Greater SouthEast
Healthcare System),
6.375%, 1/1/13 1,257,779
Baa NR 4,500 Prince Georges, Maryland
(Greater SouthEast
Healthcare System),
6.375%, 1/1/23 4,058,415
A NR 7,000 Prince Georges, Maryland
(Dimensions Health),
5.30%, 7/1/24 5,887,630
------------
$ 23,608,970
------------
HOUSING - 7.2%
Aa NR $3,000 Maryland CDA Single Family
(AMT), 6.75%, 4/1/26 $ 3,049,620
Aa NR 250 Maryland CDA Single
Family. 6.85%, 4/1/11 260,758
</TABLE>
59
<PAGE> 16
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING - (CONTINUED)
Aa NR 985 Maryland CDA Single Family
(AMT), 6.80%, 4/1/22 1,001,538
Aa NR 750 Maryland CDA Single Family
(AMT), 6.80%, 4/1/24 762,592
Aa NR 1,810 Maryland CDA Multi Family
(FHA), 6.70%, 5/15/27 1,844,336
Aa NR 1,000 Maryland CDA Multi Family
(FHA) (AMT), 6.70%,
5/15/36 1,011,180
NR AAA 300 Prince Georges, Maryland
(Antoinette Gardens
Apartments) (FHA), 7.00%,
3/1/28 313,239
------------
$ 8,243,263
------------
INDUSTRIAL DEVELOPMENT
REVENUE/POLLUTION CONTROL
REVENUE - 10.2%
A1 A $1,350 Allegany County, Maryland
(Westvaco Corporation
Project), 6.20%, 1/1/08 $ 1,426,167
NR NR 1,350 Baltimore, Maryland
(Bethlehem Steel
Corporation Project),
7.50%, 6/1/15 1,387,827
A3 BBB+ 1,000 Baltimore, Maryland
(General Motors), 5.35%,
4/1/08 971,460
Aa2 AA- 2,000 Baltimore, Maryland
(Consolidated Coal Sales
Company-E.I. Dupont),
6.50%, 12/1/10 2,145,900
Aa3 AA 2,000 Baltimore, Maryland
(Consolidated Coal Sales
Company-E.I. Dupont),
6.50%, 12/1/11 2,141,040
NR AA- 1,425 Frederick, Maryland EDA
(Cargill, Inc. Project),
6.30%, 11/1/09 (2) 1,518,067
A2 NR 600 Puerto Rico IM&E (American
Home), 5.10%, 12/1/18 536,171
Baa3 BB+ 1,500 Puerto Rico Port Authority
(American Airlines) (AMT),
6.30%, 6/1/23 1,488,150
------------
$ 11,614,782
------------
INSURED EDUCATION - 1.1%
Aaa AAA $1,200 Morgan State University,
Maryland Academic and
Facilities (MBIA), 6.10%,
7/1/20 $ 1,259,928
------------
INSURED ELECTRIC UTILITIES - 0.2%
Aaa AAA $ 250 Puerto Rico Electric Power
Authority (STRIPES) (FSA),
Variable, 7/1/03 (1) $ 279,153
------------
INSURED HOSPITALS - 17.9%
Aaa AAA $1,365 MD Health & Higher
Educational (Washington
Community Hospital)
(AMBAC), 6.375%, 7/1/22 $ 1,419,394
Aaa AAA 5,000 MD Health & Higher
Educational (Anne Arundel
Hospital) (AMBAC), 5.00%,
7/1/23 4,388,150
Aaa AAA 4,350 MD Health & Higher
Educational (Francis Scott
Key Hospital) (FGIC),
5.00%, 7/1/23 3,759,357
Aaa AAA 3,000 MD Health & Higher
Educational (University
Medical Center) (FGIC),
5.00%, 7/1/20 2,632,500
Aaa AAA 6,250 MD Health & Higher
Educational (Greater
Baltimore Medical Center)
(FGIC), 5.00%, 7/1/19 5,534,688
Aaa AAA 500 MD Health & Higher
Educational (General
Hospital) (MBIA), 6.20%,
7/1/24 512,220
Aaa AAA 2,150 Puerto Rico IM&E Hospital
(MBIA), 6.25%, 7/1/24 2,213,060
------------
$ 20,459,369
------------
INSURED HOUSING - 0.7%
Aaa AAA $ 235 MD CDA Housing and
Community Development
(AMBAC), 6.625%, 6/1/12 $ 240,675
Aaa AAA 500 Prince Georges, Maryland
(Keystone Apartments)
(FHA) (MBIA), 6.80%,
7/1/25 511,395
------------
$ 752,070
------------
INSURED INDUSTRIAL
DEVELOPMENT REVENUE/
POLLUTION CONTROL REVENUE - 0.8%
Aaa AAA $1,000 Prince Georges, Maryland
Solid Waste (FSA), 5.25%,
6/15/13 $ 931,010
------------
INSURED TRANSPORTATION - 6.1%
Aaa AAA $2,000 Baltimore, Maryland
International Airport
(AMT) (FGIC), 6.25%,
7/1/14 $ 2,066,500
Aaa AAA 5,250 Washington, D.C. Metro
Area Transportation
(FGIC), 5.25%, 7/1/14 4,881,660
------------
$ 6,948,160
------------
</TABLE>
60
<PAGE> 17
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED WATER & SEWER - 3.7%
Aaa AAA $2,000 Baltimore, Maryland
Wastewater (MBIA), 5.65%,
7/1/20 $ 1,942,420
Aaa AAA 2,550 Baltimore, Maryland
Wastewater (FGIC), 5.00%,
7/1/22 2,261,315
------------
$ 4,203,735
------------
MISCELLANEOUS - 0.8%
A NR $1,000 Baltimore, Maryland
Revenue Authority, 5.375%,
7/1/18 $ 921,600
------------
SOLID WASTE - 5.3%
A NR $6,000 North East Maryland Solid
Waste Disposal (AMT),
6.30%, 7/1/16 $ 6,016,680
------------
SPECIAL TAX REVENUE - 3.0%
Baa1 A $1,000 Puerto Rico Highway and
Transportation Authority,
5.25%, 7/1/20 $ 900,160
Baa1 A 1,225 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/17 1,146,661
Baa1 A 1,500 Puerto Rico Highway and
Transportation Authority,
5.25%, 7/1/21 1,347,675
------------
$ 3,394,496
------------
TRANSPORTATION - 0.6%
NR BBB $ 700 Guam Airport Authority
(AMT), 6.70%, 10/1/23 $ 705,040
------------
WATER AND SEWER - 1.4%
Aa AA $1,000 Maryland Water Quality
Financing Administration
Revolving Loan Fund, 0%,
9/1/07 $ 534,740
Aa AA 1,000 Maryland Water Quality
Financing Administration
Revolving Loan Fund,
6.55%, 9/1/14 1,068,880
------------
$ 1,603,620
------------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$112,178,823) $114,151,721
============
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
(2) Security has been segregated to cover margin requirements for open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Maryland
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at August 31, 1995, 30.5% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 1.1% to 19.0% of total investments.
See notes to financial statements
61
<PAGE> 18
- --------------------------------------------------------------------------------
Missouri Tax Free Portfolio
Portfolio of Investments - August 31, 1995
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 2.7%
A NR $2,750 Missouri Higher Education
Loan Authority, Student
Loan, (AMT), 5.45%, 2/15/09 $ 2,514,380
-----------
ESCROWED - 2.8%
Aaa AAA $ 240 Missouri Health & Education
Authority, St. Louis
Children's, (MBIA), 6.25%,
5/15/12 $ 266,258
Aaa AAA 410 Missouri Health & Education
Authority, St. Louis
Children's, (MBIA), 6.25%,
5/15/12 453,341
Aaa AAA 350 State of Missouri, Regional
Convention & Sports Complex
Authority, 6.80%, 8/15/11 399,480
Aaa AAA 425 Missouri Health & Education
Authority, Christian
Health, 6.875%, (FGIC),
2/15/21 480,998
Aaa AAA 250 St. Louis County, Regional
Convention & Sports Complex
Authority, 7.00%, 8/15/11 288,630
Aaa AAA 600 St. Louis County,
Pattonville School
District, 6.25%, (FGIC),
2/1/10 656,070
-----------
$ 2,544,777
-----------
GENERAL OBLIGATION - 4.3%
A1 NR $ 750 City of St. Peters, 5.85%,
1/1/13 $ 759,773
Baa1 A 700 Puerto Rico, 5.00%, 7/1/21 600,460
Baa1 A 1,250 Puerto Rico, 5.75%, 7/1/15 1,204,112
Baa1 A 1,000 Puerto Rico, 5.50%, 7/1/21 919,960
NR NR 450 Virgin Island Public
Finance Authority, 7.25%,
10/1/18 472,509
-----------
$ 3,956,814
-----------
HEALTHCARE - 0.4%
Baa1 NR $ 300 Cass County, Fox Springs
Living Center, 7.375%,
10/1/22 $ 317,127
-----------
HOSPITALS - 10.5%
A NR $1,000 Boone County Hospital,
5.50%, 8/1/09 $ 951,420
Baa1 NR 2,000 Missouri Health & Education
Authority, Jefferson
Memorial Hospital, 6.00%,
8/15/23 1,831,100
Aa AA 1,000 Missouri Health & Education
Authority, Barnes Jewish
Christian Hospital, 5.10%,
5/15/09 944,310
Aa AA 2,000 Missouri Health & Education
Authority, Barnes Jewish
Christian Hospital, 5.25%,
5/15/14 1,886,160
Aa AA 2,000 Missouri Health & Education
Authority, Barnes Jewish
Christian Hospital, 5.25%,
5/15/21 1,851,300
Aa AA 1,000 Missouri Health & Education
Authority, Sisters of Mercy
Hospital, 6.25%, 6/1/15 1,034,550
NR BBB+ 550 Moberly Industrial
Development Authority,
Moberly Regional Medical
Center, 8.75%, 3/1/16 603,471
NR AAA 500 Phelps County, Phelps
Regional Medical Center,
(CLEE), 6.00%, 5/15/13 503,000
-----------
$ 9,605,311
-----------
HOUSING - 0.6%
NR AAA $ 535 Missouri Housing
Development Authority SFMR,
(AMT), (GNMA), 6.75%,
6/1/24 $ 550,916
-----------
INDUSTRIAL DEVELOPMENT
REVENUE - 2.8%
NR BBB $1,390 Jefferson County Industrial
Development Authority,
Kmart Corporation, 6.40%,
8/1/08 $ 1,381,452
A3 NR 1,200 Missouri Environmental
Improvement & Energy
Resources Authority,
American Cynamid Company,
5.80%, 9/1/09 1,212,600
-----------
$ 2,594,052
-----------
INSURED - TRANSPORTATION - 1.7%
Aaa AAA $1,000 City of St. Louis, St.
Louis-Lambert International
Airport, (AMT), (FGIC),
6.125%, 7/1/12 $ 1,024,170
Aaa AAA 500 City of St. Louis, St.
Louis-Lambert International
Airport, (AMT), (FGIC),
6.125%, 7/1/15 510,350
-----------
$ 1,534,520
-----------
INSURED - EDUCATION - 2.1%
Aaa AAA $1,000 Missouri Western State
College Housing System,
(MBIA), 5.25%, 10/1/11 $ 947,960
Aaa AAA 1,000 Southeast Missouri State
University Housing System,
(MBIA), 5.70%, 4/1/14 1,003,600
-----------
$ 1,951,560
-----------
INSURED - GENERAL
OBLIGATION - 9.3%
Aaa AAA $1,000 Kansas City School
District, (FGIC), 5.00%,
2/1/14 $ 908,070
Aaa AAA 2,250 Kansas City School
District, (FGIC), 5.00%,
2/1/14 2,043,158
Aaa AAA 1,450 St. Louis County, Mehlville
School District, (MBIA),
6.00%, 2/15/13 1,484,554
Aaa AAA 1,000 St. Louis County, Parkway
School District, (MBIA),
5.00%, 2/1/12 931,020
</TABLE>
62
<PAGE> 19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED - GENERAL OBLIGATION
(CONTINUED)
Aaa AAA 1,500 City of St. Louis School
District, (FGIC), 5.75%,
4/1/12 1,508,340
Aaa AAA 620 City of St. Louis School
District, (FGIC), 6.00%,
4/1/12 634,333
Aaa AAA 500 Puerto Rico, (AMBAC),
Variable, 7/1/15 (1) 505,850
Aaa AAA 500 Puerto Rico, (FSA),
Variable, 7/1/22 (1) 513,080
-----------
$ 8,528,405
-----------
INSURED - HOSPITAL - 18.4%
Aaa AAA $1,000 Jackson County, Carondelet
Health System, St. Mary's
Hospital, (MBIA), 5.75%,
7/1/24 $ 981,950
Aaa AAA 800 Jackson County, St.
Joseph's Health System,
(MBIA), 6.50%, 7/1/19 836,464
Aaa AAA 1,000 Jackson County, St.
Joseph's Health System,
(MBIA), 6.50%, 7/1/12 1,052,620
Aaa AAA 1,500 Missouri Health & Education
Authority, Health Midwest,
(MBIA), 6.25%, 2/15/22 1,533,435
Aaa AAA 500 Missouri Health & Education
Authority, Sisters of St.
Mary, (MBIA), 6.25%, 6/1/07 535,710
Aaa AAA 1,600 Missouri Health & Education
Authority, Sisters of St.
Mary, (MBIA), 6.25%, 6/1/16 1,642,000
Aaa AAA 1,500 Missouri Health & Education
Authority, Heartland Health
System, (AMBAC), 6.35%,
11/15/17 1,554,735
Aaa AAA 2,900 Missouri Health & Education
Authority, Lester Cox
Medical Center, (MBIA),
5.35%, 6/1/10 2,813,493
Aaa AAA 1,865 Missouri Health & Education
Authority, St. Luke's
Health System, (MBIA),
5.10%, 11/15/13 1,719,287
Aaa AAA 2,000 Missouri Health & Education
Authority, St. Luke's
Health System, (MBIA),
5.125%, 11/15/19 1,801,460
Aaa AAA 575 Missouri Health & Education
Authority, St. Louis
Children's Hospital,
(MBIA), 0%, 5/15/08 287,023
Aaa AAA 9,500 Missouri Health & Education
Authority, Lester Cox
Medical Center, (MBIA), 0%,
9/1/20 2,101,400
-----------
$16,859,577
-----------
INSURED - HOUSING - 1.8%
Aaa AAA $1,500 City of Springfield, SCA
Realty Multifamily Mortgage
Receipts, (FSA), 7.15%,
1/1/30 $ 1,607,220
-----------
INSURED - LEASE/CERTIFICATE
OF PARTICIPATION - 4.4%
Aaa AAA $1,250 Kansas City Municipal
Assistance Corporation,
Bartle Hall Convention,
(AMBAC), 6.625%, 4/15/15 $ 1,336,050
Aaa AAA 500 Kansas City Municipal
Assistance Corporation,
Bartle Hall Convention,
(AMBAC), 6.00%, 4/15/20 507,075
Aaa AAA 600 Kansas City School
District, Building
Corporation, (FGIC), 6.50%,
2/1/08 641,280
Aaa AAA 500 St. Charles County, Public
Facilities Authority,
(FGIC), 6.375%, 3/15/07 536,420
Aaa AAA 1,000 St. Louis County Municipal
Finance Corporation, Civil
Courts Building, (FGIC),
5.75%, 8/1/13 1,002,340
-----------
$ 4,023,165
-----------
INSURED - UTILITIES - 11.4%
Aaa AAA $5,000 Missouri Environmental
Improvement & Energy
Resources Authority, Union
Electric Project, (AMT),
(AMBAC), 5.45%, 10/1/28 $ 4,540,000
Aaa AAA 700 Puerto Rico Electric Power
Authority, (FSA), Variable,
7/1/03 (1) 781,627
Aaa AAA 5,000 City of Sikeston, Electric
System, (MBIA), 6.25%,
6/1/22 5,138,150
-----------
$10,459,777
-----------
INSURED - WATER & SEWER - 1.7%
Aaa AAA $1,500 City of St. Louis, Water
Revenue Improvement Bonds,
(FGIC), 6.00%, 7/1/14 $ 1,539,480
-----------
LEASE/CERTIFICATE OF
PARTICIPATION - 5.1%
A1 A+ $2,000 State of Missouri, Regional
Convention & Sports Complex
Authority, 5.50%, 8/15/21 $ 1,844,580
A BBB+ 2,000 St. Louis County, Regional
Convention & Sports Complex
Authority, 5.50%, 8/15/13 1,861,880
Aa AA 1,000 Southeast Missouri
Correctional Facility,
5.75%, 8/15/16 995,090
-----------
$ 4,701,550
-----------
</TABLE>
63
<PAGE> 20
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIFECARE - 1.1%
NR NR $ 950 Kansas City Industrial
Development Authority,
Kingswood United Methodist
Manor, 9.00%, 11/15/13 $ 1,018,457
-----------
NURSING HOMES - 1.7%
NR NR $ 500 Missouri Health & Education
Authority, Bethesda Health
Group, 6.625%, 8/15/05 $ 498,710
NR NR 1,000 Missouri Health & Education
Authority, Bethesda Health
Group, 7.50%, 8/15/12 1,011,820
-----------
$ 1,510,530
-----------
SPECIAL TAX REVENUE - 3.6%
Baa1 A $1,000 Puerto Rico Highway and
Transportation Authority,
6.625%, 7/1/12 $ 1,050,590
Baa1 A 1,400 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/19 1,306,704
Baa1 A 1,000 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/17 936,050
-----------
$ 3,293,344
-----------
TRANSPORTATION - 0.2%
NR BBB $ 200 Guam Airport Authority,
6.375%, 10/1/10 $ 202,580
-----------
UTILITIES - 4.3%
A1 AA $ 500 City of Columbia, Water &
Electric, 6.125%, 10/1/12 $ 513,080
NR BBB 1,010 Guam Power Authority,
6.30%, 10/1/22 998,304
Baa1 A- 1,000 Puerto Rico Electric Power
Authority, 5.00%, 7/1/12 905,730
Baa1 A- 1,500 Puerto Rico Electric Power
Authority, 6.375%, 7/1/24 1,526,205
-----------
$ 3,943,319
-----------
WATER & SEWER - 9.1%
A1 AA- $ 760 City of Columbia, Sewerage
System, 6.25%, 10/1/15 $ 784,472
Aa NR 800 Missouri Environmental
Improvement & Energy
Resources Authority, Water
Pollution Control, 6.875%,
6/1/14 872,288
Aa NR 475 Missouri Environmental
Improvement & Energy
Resources Authority, Water
Pollution Control, 6.45%,
7/1/08 513,385
Aa NR 500 Missouri Environmental
Improvement & Energy
Resources Authority, Water
Pollution Control, 6.55%,
7/1/14 532,300
Aa NR 1,000 Missouri Environmental
Improvement & Energy
Resources Authority, Water
Pollution Control, 6.05%,
7/1/15 1,033,590
Aa NR 1,250 Missouri Environmental
Improvement & Energy
Resources Authority, Water
Pollution Control, 7.20%,
7/1/16 1,419,863
Aa NR 1,000 Missouri Environmental
Improvement & Energy
Resources Authority, Cape
Giradeau Project, 0%,
1/1/14 329,020
Aa A+ 3,000 City of Springfield,
Waterworks, 5.375%, 5/1/14 2,888,640
-----------
$ 8,373,558
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$88,354,959) $91,630,419
===========
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
The Portfolio invests primarily in debt securities issued by Missouri
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at August 31, 1995, 53.4% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.6% to 27.9% of total investments.
See notes to financial statements
64
<PAGE> 21
- --------------------------------------------------------------------------------
North Carolina Tax Free Portfolio
Portfolio of Investments - August 31, 1995
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 1.1%
Aa1 AA $1,000 Educational Facilities
Finance Agency, Duke
University, 6.75%,
10/01/21 $ 1,061,130
NR AAA 1,000 Educational Facilities
Finance Agency, Elon
College, 6.375%, 1/1/07 1,063,860
------------
$ 2,124,990
------------
ESCROWED - 1.4%
Aaa A- $ 155 North Carolina Municipal
Power, Catawba Electric,
5.00%, 1/1/20 $ 141,755
NR AAA 150 Puerto Rico GO, 7.30%,
7/1/20 171,831
Aaa AAA 1,500 Puerto Rico Public
Building Authority,
6.875%, 7/1/12 1,723,695
Baa1 AAA 635 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 707,987
------------
$ 2,745,268
------------
GENERAL OBLIGATIONS - 8.7%
A A- $ 175 Eden, Water and Sewer
Bonds, (AMT), 6.75%,
6/1/08 $ 188,249
NR BBB 1,700 Guam, 5.40%, 11/15/18 1,484,729
Aaa AAA 4,000 North Carolina Capital
Improvement, 4.70%, 2/1/06 3,897,040
Aaa AAA 3,000 North Carolina Capital
Improvement, 4.70%, 2/1/10 2,768,850
Aaa AAA 4,000 North Carolina Capital
Improvement, 4.75%, 2/1/12 3,606,200
Baa1 A 1,000 Puerto Rico, 6.50%, 7/1/23 1,029,630
Baa1 A 1,000 Puerto Rico, 5.75%, 7/1/15 963,290
NR NR 2,550 Virgin Island, 7.25%,
10/1/18 2,677,551
------------
$ 16,615,539
------------
HEALTH CARE - 3.4%
Aa AA $1,700 North Carolina Medical
Care Commission, Carolina
Medicorp, 6.00%, 5/1/21 $ 1,669,281
Aa AA 5,060 North Carolina Medical
Care Commission, Carolina
Medicorp, 5.50%, 5/1/15 4,742,080
------------
$ 6,411,361
------------
HOSPITALS - 18.8%
Aa AA $2,090 Charlotte-Mecklenberg
Hospital, 0%, 1/1/06 $ 1,193,745
Aa AA 2,345 Charlotte-Mecklenberg
Hospital, 6.25%, 1/1/20 2,385,780
NR A 5,500 North Carolina Medical
Care Commission, Mercy
Hospital, 6.50%, 8/1/08 5,725,665
Aa AA- 3,000 North Carolina Medical
Care Commission, North
Carolina Baptist Hospital,
6.00%, 6/1/22 2,944,830
Aa AA 4,000 North Carolina Medical
Care Commission,
Presbyterian Health
Services, 5.50%, 10/1/14 3,778,720
Aa AA 3,700 North Carolina Medical
Care Commission,
Presbyterian Health
Services, 6.00%, 10/1/24 3,610,386
A1 A+ 5,000 North Carolina Medical
Care Commission, Rex
Hospital, 6.125%, 6/1/10 5,030,350
NR BBB+ 2,500 North Carolina Medical
Care Commission, Roanake-
Chowan Hospital, 7.75%,
10/1/19 2,638,475
NR AA 3,700 North Carolina Medical
Care Commission, Scotland
Memorial Hospital, 5.375%,
10/1/11 3,463,459
Aa AA- 2,450 Pitt County Memorial
Hospital, 6.90%, 12/1/21 2,602,807
A1 AA- 2,380 University of North
Carolina at Chapel Hill,
6.00%, 2/15/24 2,390,828
------------
$ 35,765,045
------------
HOUSING - 9.1%
NR AAA $1,900 Charlotte Housing, Double
Oaks, (FHA), (FNMA),
7.35%, 5/15/26 $ 2,032,639
Aa AA 2,250 North Carolina HFA, MFMR,
6.60%, 9/1/26 2,286,855
Aa AA 4,395 North Carolina HFA, MFMR,
6.85%, 7/1/13 4,619,848
Aa A+ 870 North Carolina HFA, SFMR,
6.95%, 3/1/17 910,220
Aa A+ 890 North Carolina HFA, SFMR,
(AMT), 7.05%, 9/1/20 925,066
Aa A+ 4,000 North Carolina HFA, SFMR,
(AMT), 6.70%, 9/1/26 4,093,680
Aa A+ 2,250 North Carolina HFA, MFMR,
(AMT), 6.70%, 1/1/26 2,321,348
Aaa AAA 200 Puerto Rico HFC, SFMR,
6.85%, 10/15/23 207,526
------------
$ 17,397,182
------------
INDUSTRIAL DEVELOPMENT - 5.5%
Baa1 BBB $2,750 Haywood County, Champion
International Corporation,
(AMT), 5.50%, 10/1/18 $ 2,518,395
Baa2 BBB 2,500 New Hanover County,
Occidental Petroleum
Corporation, 6.70%, 7/1/19 2,609,550
NR AA 850 Robeson County, Campbell
Soup Company, 6.40%,
12/1/06 917,847
</TABLE>
65
<PAGE> 22
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INDUSTRIAL DEVELOPMENT -
(CONTINUED)
A2 A 4,250 Martin County, Weyerhauser
Company, (AMT), 6.80%,
5/1/24 4,399,303
------------
$ 10,445,095
------------
INSURED GOVERNMENT
OBLIGATIONS - 2.4%
Aaa AAA $1,000 Puerto Rico, (AMBAC),
Variable, 7/1/15 (1) $ 1,011,700
Aaa AAA 3,500 Puerto Rico, (FSA),
Variable, 7/1/22 (1) 3,591,560
------------
$ 4,603,260
------------
INSURED HOSPITAL - 10.6%
Aaa AAA $2,000 Catawba County, Catawba
Memorial Hospital,
(AMBAC), 6.20%, 10/1/12 $ 2,065,660
Aaa AAA 500 Cumberland County
Hospital, (MBIA), 0%,
10/1/09 226,440
Aaa AAA 4,225 New Hanover Regional
Medical Center, (AMBAC),
4.75%, 10/1/23 3,567,378
Aaa AAA 1,750 North Carolina Medical
Care Commission, Moore
Regional Hospital, (FGIC),
5.20%, 10/1/13 1,616,720
Aaa AAA 3,750 North Carolina Medical
Care Commission, Moore
Regional Hospital, (FGIC),
5.00%, 10/1/18 3,288,863
Aaa AAA 2,000 North Carolina Medical
Care Commission, Wesley
Long Community Hospital,
(AMBAC), 5.25%, 10/1/13 1,858,720
Aaa AAA 2,500 North Carolina Medical
Care Commission, Wesley
Long Community Hospital,
(AMBAC), 5.25%, 10/1/17 2,260,825
Aaa AAA 935 North Carolina Medical
Care Commission, Memorial
Mission Hospital, (FSA),
0%, 10/1/06 518,944
Aaa AAA 5,000 North Carolina Medical
Care Commission, St.
Joseph's Medical Center,
(AMBAC), 5.10%, 10/1/14 4,524,250
Aaa AAA 250 Wake County, North
Carolina Hospital System,
(MBIA), 5.125%, 10/1/26 219,655
------------
$ 20,147,455
------------
INSURED LEASE/CERTIFICATE
OF PARTICIPATION - 8.4%
Aaa AAA $ 900 Burke County, COP,
Detention
Facility/Landfill
Equipment, (MBIA), 6.30%,
4/1/08 $ 960,561
Aaa AAA 4,500 Charlotte, COP, Convention
Facility, (AMBAC), 5.25%,
12/1/13 4,242,600
Aaa AAA 1,750 Duplin County, COP,
(FGIC), 5.25%, 8/1/14 1,623,195
Aaa AAA 1,575 Franklin, COP, (FGIC),
6.625%, 6/1/14 1,673,690
Aaa AAA 5,000 Iredell County, COP,
Iredell-Statesville
Schools, (FGIC), 6.125%,
6/1/07 5,288,550
Aaa AAA 1,000 Mooresville School
District, (AMBAC), COP,
6.35%, 10/1/14 1,034,750
Aaa AAA 1,000 Rutherford County, COP,
(FGIC), 6.25%, 6/1/23 1,022,640
Aaa AAA 200 Scotland County, COP,
(CGIC), 6.75%, 3/1/11 213,198
------------
$ 16,059,184
------------
INSURED TRANSPORTATION - 1.8%
Aaa AAA $3,750 Piedmont Triad Airport
Authority, (MBIA), 5.125%,
7/1/12 $ 3,464,888
------------
INSURED UTILITIES - 3.1%
Aaa AAA $3,000 North Carolina Municipal
Power Authority, Catawba
Electric, (AMBAC), 5.75%,
1/1/15 $ 2,917,920
Aaa AAA 1,500 North Carolina Eastern
Municipal Power Authority,
(FSA), Variable, 1/1/19
(1) 1,411,365
Aaa AAA 1,400 Puerto Rico Electric Power
Authority, Stripes, (FSA),
Variable, 7/1/02 (1) 1,546,062
------------
$ 5,875,347
------------
INSURED WATER & SEWER - 2.0%
Aaa AAA $ 750 Fayetteville Public Works
Commission, (FGIC), 4.75%,
3/1/14 $ 650,655
Aaa AAA 3,500 Fayetteville Public Works
Commission, (FGIC),
5.125%, 3/1/10 3,257,555
------------
$ 3,908,210
------------
LEASE/CERTIFICATE OF
PARTICIPATION - 6.7%
A1 A- $2,065 Buncombe County, COP,
6.625%, 12/1/10 $ 2,205,026
Aa1 AA 4,150 Charlotte County, COP,
Charolette Mecklendberg
Law, 5.375%, 6/1/13 4,022,803
NR AA 825 Durham County, COP, 6.10%,
7/15/07 872,900
Aa AA 985 Durham County, COP, 6.75%,
12/1/11 1,062,648
</TABLE>
66
<PAGE> 23
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
LEASE/CERTIFICATE OF
PARTICIPATION - (CONTINUED)
A1 AA 2,400 Greensboro, COP,
Greensboro Coliseum Arena,
6.75%, 12/1/09 2,581,272
A NR 1,950 Rowan County, COP, 6.25%,
12/1/07 2,095,002
------------
$ 12,839,651
------------
SPECIAL TAX REVENUE - 2.8%
Baa1 BBB+ $ 200 Puerto Rico Finance
Authority, 7.90%, 7/1/07 $ 220,820
Baa1 A 4,000 Puerto Rico Highway and
Transportation Authority,
5.25%, 7/1/20 3,600,640
Baa1 A 1,490 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/15 1,415,738
------------
$ 5,237,198
------------
TRANSPORTATION - 0.9%
Baa3 BB+ $1,500 Raleigh-Durham Airport
Authority, American
Airlines Inc., 9.40%,
11/1/00 $ 1,713,810
------------
UTILITIES - 12.3%
A2 A $1,015 Chatham County Industrial
Facilities and Pollution,
Carolina Power & Light,
6.30%, 6/1/14 $ 1,074,804
NR BBB 1,750 Guam Power Authority,
5.25%, 10/1/23 1,501,220
A A- 2,875 North Carolina Municipal
Power, Catawba Electric,
5.00%, 1/1/15 2,426,414
A A- 2,500 North Carolina Municipal
Power, Catawba Electric,
5.75%, 1/1/15 2,328,850
A A- 550 North Carolina Municipal
Power, Catawba Electric,
7.00%, 1/1/16 566,803
A BBB+ 5,000 North Carolina Municipal
Power, Eastern Power,
6.125%, 1/1/09 4,965,750
A BBB+ 1,500 North Carolina Municipal
Power, Eastern Power,
6.40%, 1/1/21 1,481,310
A BBB+ 3,200 North Carolina Municipal
Power, Eastern Power,
6.00%, 1/1/26 3,008,960
A BBB+ 1,750 North Carolina Municipal
Power, Eastern Power,
7.00%, 1/1/13 1,858,727
Baa1 A- 2,000 Puerto Rico Electric Power
Authority, 0%, 7/1/17 528,860
Baa1 A- 1,000 Puerto Rico Electric Power
Authority, 7.00%, 7/1/21 1,105,180
Baa1 A- 2,000 Puerto Rico Electric Power
Authority, 6.00%, 7/1/16 1,988,040
Baa1 A- 365 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 398,427
NR NR 250 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 261,877
------------
$ 23,495,222
------------
WATER & SEWER - 1.0%
Aa AA $2,000 Orange County, Water &
Sewer, 5.20%, 7/1/16 $ 1,815,440
------------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$183,328,988) $190,664,145
============
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
The Portfolio invests primarily in debt securities issued by North Carolina
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at August 31, 1995, 28.3% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.1% to 12.3% of total investments.
See notes to financial statements
67
<PAGE> 24
- --------------------------------------------------------------------------------
Oregon Tax Free Portfolio
Portfolio of Investments - August 31, 1995
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 1.6%
NR A+ $1,250 State of Oregon Health,
Housing, Educational and
Cultural Facilities
Authority, Reed College
Project, 6.75%, 7/1/21 $ 1,320,450
A NR 1,000 City of Salem, Educational
Facilities, Willamette
University Project, 6.10%,
4/1/14 1,010,800
------------
$ 2,331,250
------------
ESCROWED - 1.7%
A1 AAA $2,000 City of Medford, Rogue
Valley Memorial Hospital
(ETM), 6.25%, 12/1/07 $ 2,182,460
NR AAA 200 Puerto Rico Highway &
Transportation Authority,
Pre-Refunded, 6.625%,
7/1/18 226,918
------------
$ 2,409,378
------------
GENERAL
OBLIGATIONS - 17.7%
A A+ $2,000 Clackamas County,
Clackamas Community
College District, 5.25%,
12/1/09 $ 1,964,440
Aa AA+ 1,000 Tri County Metropolitan
Transportation District,
Light Rail Extention,
6.00%, 7/1/12 1,021,140
Aa NR 1,000 Clackamas & Multnomah
Counties, Lake Oswego
School District, 5.70%,
6/15/10 1,012,290
Aa NR 2,000 Lane County, City of
Eugene, School District,
5.375%, 7/1/13 1,932,000
Aa AA- 1,500 Washington and Multnomah
Counties, City of
Beaverton, School
District, 5.00%, 9/1/12 1,405,290
Aa AA- 1,000 State of Oregon, Oregon
Veterans' Welfare Bonds,
9.00%, 4/1/04 1,291,370
Aa AA- 1,000 State of Oregon, Board of
Higher Education, 6.00%,
10/15/18 1,013,760
Aa AA- 6,110 State of Oregon, Elderly
and Disabled Housing,
(AMT), 5.65%, 8/1/26 5,885,213
Aa AA- 1,250 State of Oregon, Elderly
and Disabled Housing,
6.375%, 8/1/24 1,294,063
Aa AA- 1,000 State of Oregon, Elderly
and Disabled Housing,
(AMT), 5.625%, 8/1/18 976,670
Aa AA- 3,505 State of Oregon,
Governmental Purpose,
5.625%, 6/1/13 (2) 3,491,015
Aa AA- 2,000 State of Oregon, Board of
Higher Education, 5.00%,
8/1/23 1,764,940
Baa1 A 2,000 Puerto Rico, 5.75%, 7/1/15 1,926,580
Baa1 A 1,000 Puerto Rico, 5.50%, 7/1/21 919,960
------------
$ 25,898,731
------------
HOSPITALS - 1.4%
NR A $1,000 Benton County, Good
Samaritan Hospital
Corvallis, 6.25%, 10/1/09 $ 1,006,810
Aa3 AA 1,000 Clackamas County, Kaiser
Permanente, 6.25%, 4/1/21 1,006,520
------------
$ 2,013,330
------------
HOUSING - 8.8%
Aa NR $2,500 State of Oregon Housing
and Community Services
Department, MFMR, 6.875%,
7/1/28 $ 2,623,425
Aa NR 1,055 State of Oregon Housing
and Community Services
Department, SFMR, (AMT),
6.80%, 7/1/27 1,097,105
Aa NR 1,500 State of Oregon Housing
and Community Services
Department, SFMR, 5.375%,
7/1/17 1,388,325
Aa NR 3,500 State of Oregon, Housing
and Community Services
Department, SFMR, 5.45%,
7/1/24 3,205,965
Aa NR 2,500 State of Oregon, Housing
and Community Services
Department, SFMR, (AMT),
6.45%, 7/1/26 2,579,025
Aa NR 2,000 State of Oregon, Housing
and Community Services
Department, SFMR, (AMT),
6.40%, 7/1/26 2,029,580
------------
$ 12,923,425
------------
INDUSTRIAL DEVELOPMENT
REVENUE - 4.7%
NR BBB- $5,000 Port of Astoria, PCR,
James River Project,
6.55%, 2/1/15 (2) $ 5,030,900
NR NR 750 Port of Portland, Ash
Grove Cement Co., 7.25%,
10/1/09 821,640
Baa1 A 1,000 Port of Portland, North
Portland Crown Zellerbach
Corporation, 6.125%,
5/15/08 1,000,200
------------
$ 6,852,740
------------
COGENERATION - 1.4%
NR NR $2,000 Western Generation Agency,
Wauna Cogeneration
Project, (AMT), 7.40%,
1/1/16 $ 2,084,360
------------
</TABLE>
68
<PAGE> 25
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED TRANSPORTATION - 4.6%
Aaa AAA $1,000 Port of Portland, Portland
International Airport,
(AMT), (AMBAC), 6.25%,
7/1/18 $ 1,050,930
Aaa AAA 2,750 Port of Portland, Portland
International Airport,
(AMT), (FGIC), 6.00%,
7/1/23 2,829,118
Aaa AAA 1,250 Port of Portland, Portland
International Airport,
(AMT), (FGIC), 5.75%,
7/1/25 1,213,475
Aaa AAA 1,500 Oregon Department of
Transportation, Westside
Light Rail, (MBIA), 6.25%,
6/1/09 1,585,155
------------
$ 6,678,678
------------
INSURED EDUCATION - 1.7%
Aaa AAA $1,000 State of Oregon Health,
Housing, Educational and
Cultural Facilities
Authority, Lewis and Clark
College, (MBIA), 6.00%,
10/1/13 $ 1,025,980
Aaa AAA 1,500 State of Oregon Health,
Housing, Educational and
Cultural Facilities
Authority, Lewis and Clark
College, (MBIA), 6.125%,
10/1/24 1,535,640
------------
$ 2,561,620
------------
INSURED GENERAL
OBLIGATIONS - 11.6%
Aaa AAA $1,850 Deschutes and Jefferson
Counties, Redmond School
District, (MBIA), 5.60%,
6/1/09 $ 1,865,984
Aaa AAA 2,500 Deschutes County, City of
Sisters School District,
(MBIA), 5.40%, 12/1/10 2,459,000
Aaa AAA 2,750 Jefferson County, Madras
School District, (FSA),
5.50%, 6/15/13 2,712,930
Aaa AAA 1,000 Multnomah County, Parkrose
School District, (FGIC),
5.70%, 12/1/09 1,027,770
Aaa AAA 1,000 Multnomah County, Parkrose
School District, (FGIC),
5.50%, 12/1/10 1,005,770
Aaa AAA 2,500 Marion and Polk Counties,
Salem-Keizer School
District, (FSA), 5.40%,
6/1/12 2,409,100
Aaa AAA 3,500 Yamhill, Clackamas &
Washington Counties,
Newberg School Dist.,
(FSA), 5.50%, 6/1/10 3,471,755
Aaa AAA 2,000 Puerto Rico, (AMBAC),
Variable, 7/1/15 (1) 2,023,400
------------
$ 16,975,709
------------
INSURED HOSPITALS - 2.2%
Aaa AAA $2,000 City of Portland, Hospital
Facilities Authority,
Legacy Health System,
(AMBAC), 6.70%, 5/1/21 $ 2,146,520
Aaa AAA 1,000 Western Lane Hospital
District Authority,
Sisters of St. Joseph of
Peace, (MBIA), 5.75%,
8/1/19 1,003,150
------------
$ 3,149,670
------------
INSURED - CERTIFICATES OF
PARTICIPATIONS - 2.0%
Aaa AAA $1,250 State of Oregon,
Department of General
Services, Real Property
Financing Program,
(AMBAC), 6.25%, 9/1/15 $ 1,295,138
Aaa AAA 1,500 State of Oregon,
Department of General
Services, Real Property
Financing Program, (MBIA),
6.25%, 11/1/19 (2) 1,559,595
------------
$ 2,854,733
------------
INSURED UTILITIES - 1.7%
Aaa AAA $1,000 Lane County, Emerald
People's Utility District,
Electric System, (AMBAC),
5.75%, 11/1/16 $ 1,000,610
Aaa AAA 1,000 City of Eugene, Electric
Utility Revenue, (MBIA),
5.80%, 8/1/22 1,011,210
Aaa AAA 500 Puerto Rico Electric Power
Authority, (FSA),
Variable, 7/1/03 (1) 558,305
------------
$ 2,570,125
------------
INSURED WATER
& SEWER - 4.5%
Aaa AAA $1,000 City of Beaverton,
Washington County, Water
Revenue, (FSA), 6.125%,
6/1/14 $ 1,027,200
Aaa AAA 1,500 City of Portland, Sewer
System, (FGIC), 6.00%,
10/1/12 1,542,135
Aaa AAA 1,000 South Fork Water Board,
First Lien Water Revenue,
(FSA), 6.00%, 2/1/19 1,024,020
Aaa AAA 1,375 Washington County, Unified
Sewerage Agency, Senior
Lien, (AMBAC), 6.125%,
10/1/12 1,427,690
Aaa AAA 1,500 Washington County, Unified
Sewerage Agency, (AMBAC),
6.125%, 10/1/12 1,557,480
------------
$ 6,578,525
------------
</TABLE>
69
<PAGE> 26
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
CERTIFICATES OF
PARTICIPATION - 1.7%
Aa A $1,500 Multnomah County, Juvenile
Justice Complex, 6.00%,
8/1/12 $ 1,535,865
Aa NR 1,000 Multnomah County, Health
System Facilities, 5.50%,
7/1/13 979,900
------------
$ 2,515,765
------------
MISCELLANEOUS - 3.9%
A A $3,000 Metropolitan Service
District, Metro
Headquarters Building
Project, 5.25%, 8/1/22 $ 2,682,930
A NR 1,600 State of Oregon, Oregon
Bond Bank, Special Public
Works Fund, 5.375%, 1/1/14 1,523,744
A1 NR 1,500 State of Oregon Health,
Housing, Educational and
Cultural Facilities
Authority, Oregon Coast
Aquarium, 5.25%, 10/1/13 1,427,640
------------
$ 5,634,314
------------
SPECIAL TAX REVENUE - 6.8%
A NR $1,000 City of Portland, Urban
Renewal and Redevelopment
Bonds, Downtown Waterfront
Project, 6.40%, 6/1/08 $ 1,066,770
Baa1 A 1,500 Puerto Rico Highway and
Transportation Authority,
6.375%, 7/1/08 1,586,550
Baa1 A 1,720 Puerto Rico Highway and
Transportation Authority,
5.25%, 7/1/20 1,548,275
Baa1 A 2000 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/17 1,872,100
Baa1 A 800 Puerto Rico Highway and
Transportation Authority,
6.625%, 7/1/18 834,880
A1 AA 3,000 Tri-County Metropolitan
Transportation District,
Limited Tax Pledge, 5.70%,
8/1/13 2,993,130
------------
$ 9,901,705
------------
TRANSPORTATION - 3.4%
Ba1 BB $1,500 Port of Portland, Special
Obligation Revenue Bonds,
Delta Air Lines, Inc.
Project, (AMT), 6.20%,
9/1/22 $ 1,435,725
NR BBB 2,000 Guam Airport Authority,
6.50%, 10/1/23 2,007,180
NR BBB 1,500 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 1,510,800
------------
$ 4,953,705
------------
UTILITIES - 14.3%
A1 AA $1,500 City of Eugene, Electric
Utility System, 6.00%,
8/1/11 $ 1,533,000
A1 AA 4,055 City of Eugene, Electric
Utility System, 5.75%,
8/1/16 4,025,480
Aa AA 4,000 City of Eugene, Trojan
Nuclear Power Project,
5.90%, 9/1/09 (2) 3,999,920
Aa AA 4,000 Northern Wasco County,
People's Utility District,
McNary Dam Fishway
Hydroelectric Project,
Bonneville Power
Administration, 5.20%,
12/1/24 3,571,040
Baa1 A- 8,000 Puerto Rico Electric Power
Authority, 5.00%, 7/1/12 7,245,840
A A+ 500 Puerto Rico Telephone
Authority, Variable,
1/1/20 (1) 510,830
------------
$ 20,886,110
------------
WATER & SEWER - 4.3%
NR A+ $2,000 Clackamus County, Water
Revenue, 6.375%, 10/1/14 $ 2,097,880
A A+ 1,500 City of Gresham, Water
Revenue, 5.20%, 11/1/10 1,470,615
A A+ 1,000 City of Gresham, Water
Revenue, 5.30%, 11/1/15 965,110
Aa A+ 1,800 City of Portland, Water
Systems, 5.25%, 8/1/13 1,711,673
------------
$ 6,245,278
------------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$143,369,782) $146,019,151
============
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
(2) Security has been segregated to cover margin requirements for open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Oregon
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at August 31, 1995, 35.3% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 5.2% to 8.2% of total investments.
See notes to financial statements
70
<PAGE> 27
- --------------------------------------------------------------------------------
South Carolina Tax Free Portfolio
Portfolio of Investments - August 31, 1995
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 3.8%
NR BBB- $1,000 Puerto Rico ITEME,
Polytechnic University of
Puerto Rico, 5.50%, 8/1/24 $ 876,150
NR A 1,500 SC Education Authority,
Student Loan, (AMT), 6.30%,
9/1/08 1,516,575
-----------
$ 2,392,725
-----------
ESCROWED - 1.5%
Aaa AA $ 500 Columbia, South Carolina
Waterworks and Sewer
System, 7.10%, 2/1/12 $ 570,865
Aaa AAA 350 South Carolina Public
Service Authority, Santee
Cooper, 6.625%, 7/1/31 397,292
-----------
$ 968,157
-----------
GENERAL OBLIGATIONS - 5.7%
NR BBB $1,025 Guam, 5.40%, 11/15/18 $ 895,204
Baa1 A 1,000 Puerto Rico Public
Building, 5.75%, 7/1/16 956,670
Baa1 A 1,000 Puerto Rico, 6.50%, 7/1/23 1,029,630
A A 500 Spartanburg Sanitary Sewer
District, 5.40%, 3/1/10 481,520
NR NR 200 Virgin Islands, 7.25%,
10/1/18 210,004
-----------
$ 3,573,028
-----------
HOSPITALS - 6.0%
NR AA- $ 725 Greenville Hospital System
Board of Trustees, 7.00%,
5/1/17 $ 759,365
Baa1 NR 1,500 Horry County, Conway
Hospital, 6.75%, 7/1/12 1,527,705
NR AAA 1,500 SC Jobs Economic
Development, Oconee
Memorial Hospital, 6.15%,
3/1/25 1,499,970
-----------
$ 3,787,040
-----------
HOUSING - 9.5%
NR AA $ 995 South Carolina HFA, MFMR,
Westbury Place, 6.05%,
7/1/27 $ 951,698
NR BBB+ 1,000 South Carolina HDA, MFMR,
Hunting Ridge, (AMT),
6.75%, 6/1/25 983,480
Aa AA 1,500 South Carolina HFA, SFMR,
6.375%, 7/1/16 1,501,560
Aa NR 1,500 South Carolina HFA, SFMR,
6.45%, 7/1/17 1,510,260
Aa NR 1,000 South Carolina HFA, SFMR,
(AMT), 6.75%, 7/1/26 1,010,570
-----------
$ 5,957,568
-----------
INDUSTRIAL DEVELOPMENT - 18.0%
Baa2 BBB $1,000 Aiken County, Beliot
Corporation, 6.00%, 12/1/11 $ 991,700
NR BBB+ 1,500 Chester County, 7.35%,
2/1/14 1,609,395
A1 AA- 1,500 Darlington County, Nucor
Corporation, (AMT), 5.75%,
8/1/23 (3) 1,405,185
A2 A+ 500 Darlington County, Sonoco
Products, (AMT), 6.125%,
6/1/25 498,920
Aa3 AA 500 Florence County, Pollution
Control, E.I. du Pont de
Nemours & Co., 6.35%,
7/1/22 520,050
A1 A- 2,665 Richland County, Pollution
Control, Union Camp
Corporation, (AMT), 6.75%,
11/1/22 2,812,854
NR NR 1,500 Spartanburg County, Solid
Waste, Bavarian Motor Works
Corporation, (AMT), 7.55%,
11/1/24 1,618,440
A2 A+ 2,000 York County, Hoechst
Celanese Corporation,
(AMT), 5.70%, 1/1/24 1,869,640
-----------
$11,326,184
-----------
INSURED EDUCATION - 0.4%
Aaa AAA $ 250 College of Charleston,
Housing and Auxiliary
Facilities, (MBIA), 6.00%,
10/1/07 $ 257,818
-----------
INSURED GENERAL OBLIGATION - 1.7%
Aaa AAA $1,000 Berkeley County School
District, (AMBAC), 6.30%,
2/1/16 $ 1,039,360
-----------
INSURED HOSPITAL - 5.9%
Aaa AAA $1,000 Florence County, McLeod
Medical Center, (FGIC),
5.25%, 11/1/09 $ 947,310
Aaa AAA 1,500 Greenwood County, Self
Memorial Hospital, (FGIC),
5.875%, 10/1/17 1,493,490
Aaa AAA 300 Lexington County Health
Services District, Inc.,
(FSA), 6.75%, 10/1/18 317,547
Aaa AAA 1,000 South Carolina
Jobs-Economic Development,
South Carolina Baptist
Hospital, (AMBAC), 5.45%,
8/1/15 934,330
-----------
$ 3,692,677
-----------
INSURED LEASE/CERTIFICATE
OF PARTICIPATION - 7.3%
Aaa AAA $ 500 Charleston County, COP,
(MBIA), 6.10%, 6/1/11 $ 513,820
Aaa AAA 1,000 Charleston County, COP,
(MBIA), 7.00%, 6/1/19 1,079,830
Aaa AAA 1,060 Chesterfield County School
District, COP, (MBIA),
6.00%, 7/1/15 1,058,664
Aaa AAA 1,000 Florence County, COP, Law
Center, (AMBAC), 6.00%,
3/1/14 1,003,570
Aaa AAA 900 North Charleston, COP,
Coliseum Capital
Improvements, (FGIC),
6.00%, 1/1/11 915,318
-----------
$ 4,571,202
-----------
</TABLE>
71
<PAGE> 28
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED SOLID WASTE - 0.8%
Aaa AAA $ 500 Charleston County, (FGIC),
6.00%, 1/1/14 $ 508,995
-----------
INSURED TRANSPORTATION - 1.5%
Aaa AAA $1,105 Charleston County Airport,
(MBIA), 4.75%, 7/1/15 $ 952,919
-----------
INSURED UTILITIES - 12.5%
Aaa AAA $ 300 Piedmont Municipal Power
Agency, (MBIA), 6.25%,
1/1/09 $ 322,785
Aaa AAA 1,000 Piedmont Municipal Power
Agency, (MBIA), 6.30%,
1/1/14 1,039,880
Aaa AAA 400 Puerto Rico Electric Power
Authority, (STRIPES),
(FSA), Variable, 7/1/02 (1) 441,732
Aaa AAA 150 Rock Hill, Downtown
Redevelopment, (AMBAC),
5.375%, 1/1/24 141,399
Aaa AAA 1,000 South Carolina Public
Service Authority, Santee
Cooper, (AMBAC), 5.00%,
1/1/14 907,230
Aaa AAA 1,000 South Carolina Public
Service Authority, Santee
Cooper, (MBIA), 5.125%,
1/1/32 867,170
Aaa AAA 1,500 South Carolina Public
Service Authority, (MBIA),
5.75%, 1/1/10 (2) 1,478,295
Aaa AAA 1,500 South Carolina Public
Service Authority, (MBIA),
5.75%, 1/1/22 (2) 1,422,090
Aaa AAA 1,250 South Carolina Public
Service Authority, (AMBAC),
6.375%, 7/1/21 1,279,025
-----------
$ 7,899,606
-----------
INSURED WATER & SEWER - 5.2%
Aaa AAA $1,000 Berkeley County, South
Carolina Water and Sewer
System, (MBIA), 5.55%,
6/1/15 $ 954,920
Aaa AAA 2,000 Cayce, South Carolina Water
and Sewer System, (AMBAC),
5.25%, 7/1/15 (3) 1,840,320
Aaa AAA 500 Mount Pleasant, Waterworks
and Sewer System, (AMBAC),
6.00%, 12/1/20 505,950
-----------
$ 3,301,190
-----------
LEASE/CERTIFICATE OF
PARTICIPATION - 4.1%
Baa NR $ 750 Lexington School District,
COP, 6.90%, 7/1/08 $ 784,223
Baa1 BBB+ 1,750 Myrtle Beach Convention
Center, COP, 6.875%, 7/1/17 1,802,762
-----------
$ 2,586,985
-----------
MISCELLANEOUS - 0.5%
NR A+ $ 300 South Carolina Resource
Authority, 7.00%, 4/1/13 $ 311,634
-----------
SPECIAL TAX - 1.1%
Baa1 A $ 750 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/19 $ 700,020
-----------
UTILITIES - 13.5%
A2 A- $1,650 Berkeley County, South
Carolina Electric & Gas
Company, 6.50%, 10/1/14 $ 1,746,195
A2 A 1,500 Darlington County, Carolina
Power & Light Company,
6.60%, 11/1/10 1,596,915
NR BBB 500 Guam Power Authority,
5.25%, 10/1/23 428,920
Aa2 AA- 1,000 Oconee County, PCR, Duke
Power, 5.80%, 4/1/14 990,970
A BBB 500 Piedmont Municipal Power
Agency, 5.75%, 1/1/24 458,910
Baa1 A- 1,400 Puerto Rico Electric Power
Authority, 6.250%, 7/1/17 1,414,000
Baa1 A- 500 Puerto Rico Electric Power
Authority, 6.375%, 7/1/24 508,735
A1 A+ 500 South Carolina Public
Service Authority, Santee
Cooper, 6.00%, 7/1/31 488,435
A1 A+ 1,000 South Carolina Public
Service Authority, 5.125%,
1/1/32 849,170
-----------
$ 8,482,250
-----------
WATER & SEWER REVENUE - 1.0%
Aa AA $ 500 Columbia, Waterworks and
Sewer System, 5.375%,
2/1/12 $ 483,830
A1 AA- 150 Spartanburg, Water System,
6.25%, 6/1/12 155,079
-----------
$ 638,909
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$60,604,156) $62,948,267
===========
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
(2) When-issued security.
(3) Security has been segregated to cover when-issued securities.
The Portfolio invests primarily in debt securities issued by South Carolina
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at August 31, 1995, 35.3% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 1.2% to 15.8% of total investments.
See notes to financial statements
72
<PAGE> 29
- --------------------------------------------------------------------------------
Tennessee Tax Free Portfolio
Portfolio of Investments - August 31, 1995
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 4.3%
Aa AA $1,600 Nashville and Davidson
County, The Vanderbilt
University, 5.20%, 7/1/18 $ 1,462,256
Baa NR 1,000 Nashville and Davidson
County, The Belmont
University, 6.40%, 12/1/19 998,650
-----------
$ 2,460,906
-----------
GENERAL OBLIGATION - 4.1%
Aa AA+ $1,000 Shelby County, 5.625%,
4/1/14 $ 973,560
Aa AA+ 1,000 Shelby County, 5.125%,
3/1/16 907,440
Aa NR 500 Williamson County, Rural
School Bonds, 5.80%, 3/1/12 504,710
-----------
$ 2,385,710
-----------
HOSPITAL - 4.0%
Baa1 NR $ 500 City of Clarksville,
Clarksville Memorial
Hospital, 6.25%, 7/1/08 $ 497,765
Baa1 NR 500 City of Clarksville,
Clarksville Memorial
Hospital, 6.375%, 7/1/08 487,915
Baa1 BBB+ 250 County of Knox, East
Tennessee Children's
Hospital, 6.50%, 10/1/12 249,728
NR A- 1,000 Sumner County, Sumner
Regional Health Systems,
7.50%, 11/1/14 1,084,970
-----------
$ 2,320,378
-----------
HOUSING - 16.2%
NR AAA $ 500 Knoxville Community
Development Corporation,
MFMR, Morningside Gardens,
(GNMA) 6.10%, 7/20/20 $ 486,860
NR A 750 Knoxville Community
Development Corporation,
MFMR, Clinton Towers,
6.65%, 10/15/10 760,140
NR A 1,645 Nashville and Davidson
County, MFMR, The Park at
Hermitage, 5.90%, 2/1/19 1,494,054
NR A 800 Murfreesboro Housing
Authority, MFMR, Westbrooks
Towers Project, 5.875%,
7/15/10 755,120
Aa A+ 500 TN HDA, Homeownership
Program, 6.80%, 7/1/17 510,560
A1 A+ 2,000 TN HDA, Mortgage Finance
Program, 5.85%, 7/1/13 1,973,680
A1 A+ 2,000 TN HDA, Mortgage Finance
Program, 5.95%, 7/1/28 1,938,180
Aa AA 1,500 TN HDA, Homeownership
Program, (AMT), 5.75%,
7/1/24 1,394,550
-----------
$ 9,313,144
-----------
INDUSTRIAL DEVELOPMENT
REVENUE - 16.0%
Aa2 AA $1,000 City of Chattanooga, E.I.
du Pont de Nemours and
Company Project, 6.35%,
7/1/22 $ 1,040,100
Aa2 AA 1,000 Humphreys County, E.I. du
Pont de Nemours and Company
Project, 6.70%, 5/1/24 1,056,030
Aa2 AA 2,000 Loudon County,
Kimberly-Clark Corporation
Project, (AMT), 6.20%,
2/1/23 (2) 2,006,900
Baa1 BBB 1,750 Maury County, Saturn
Corporation Project, 6.50%,
9/1/24 1,796,970
Baa1 BBB 250 McMinn County, Calhoun
Newsprint Company, Bowater
Incorporated Obligor,
(AMT), 7.40%, 12/1/22 264,340
Baa3 BBB 1,500 Memphis-Shelby County
Airport Authority, Federal
Express Corporation, 6.75%,
9/1/12 1,562,475
Baa3 BBB 1,000 Memphis-Shelby County
Airport Authority, Federal
Express Corporation, (AMT),
6.20%, 7/1/14 1,005,000
NR BBB+ 500 Nashville and Davidson
County, Osco Treatment
Systems, (AMT), 6.00%,
5/1/03 499,040
-----------
$ 9,230,855
-----------
INSURED GENERAL OBLIGATION - 0.5%
Aaa AAA $ 300 Puerto Rico, (AMBAC),
Variable, 7/1/15 (1) $ 303,510
-----------
INSURED HOUSING - 1.8%
Aaa AAA $1,000 Knox County, SCA Realty
Multifamily Mortgage
Receipts, (FSA), 7.125%,
1/1/30 (2) $ 1,069,290
-----------
INSURED HOSPITAL - 21.9%
Aaa AAA $ 500 City of Bristol, Bristol
Memorial Hospital, (FGIC),
6.75%, 9/1/10 $ 552,955
Aaa AAA 2,000 City of Bristol, Bristol
Memorial Hospital, (FGIC),
5.125%, 9/1/13 1,839,980
Aaa AAA 1,500 Chattanooga-Hamilton
County, Erlanger Medical
Center, (FSA), 5.625%,
10/1/18 1,442,805
Aaa AAA 250 City of Chattanooga,
Memorial Hospital Project,
(MBIA), 6.625%, 9/1/09 276,158
Aaa AAA 1,000 City of Johnson, Johnson
City Medical Center,
(MBIA), 5.00%, 7/1/13 906,620
Aaa AAA 1,500 City of Johnson, Johnson
City Medical Center,
(MBIA), 5.25%, 7/1/16 1,377,135
Aaa AAA 1,000 Knox County, Mercy Health
System, (AMBAC), 6.00%,
9/1/19 (2) 1,004,450
Aaa AAA 2,000 Knox County, Fort Sanders
Alliance Obligated Group,
(MBIA), 5.25%, 1/1/23 1,802,000
</TABLE>
73
<PAGE> 30
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED HOSPITAL - (CONTINUED)
Aaa AAA 1,500 Shelby County, LeBonheur
Children's Medical Center,
Inc., (MBIA), 5.50%,
8/15/12 1,436,204
Aaa AAA 2,000 Sullivan County, Holston
Valley Health Care Inc.,
(MBIA), 5.75%, 2/15/13 (2) 1,980,380
-----------
$12,618,687
-----------
INSURED SPECIAL TAX - 1.9%
Aaa AAA $1,000 City of Johnson, School
Sales Tax Revenue, (AMBAC),
6.70%, 5/1/21 $ 1,070,690
-----------
INSURED TRANSPORTATION - 4.4%
Aaa AAA $1,500 Memphis-Shelby County
Airport Authority, (MBIA),
5.65%, 9/1/15 $ 1,468,350
Aaa AAA 1,000 Memphis-Shelby County
Airport Authority, (MBIA),
(AMT), 6.50%, 2/15/09 1,080,230
-----------
$ 2,548,580
-----------
INSURED UTILITIES - 2.4%
Aaa AAA $1,000 Madison County Suburban
Utility District, (MBIA),
5.00%, 2/1/19 $ 905,310
Aaa AAA 400 Puerto Rico Electric Power
Authority, (FSA), Variable,
7/1/03 (1) 446,644
-----------
$ 1,351,954
-----------
INSURED WATER & SEWER - 4.8%
Aaa AAA $ 500 Roane and Morgan Counties,
Cumberland Utility
District, Waterworks
Revenue, (MBIA), 5.90%,
1/1/23 $ 499,950
Aaa AAA 1,000 Nashville and Davidson
Counties, Water and Sewer
Revenue, (AMBAC), 5.75%,
1/1/15 989,560
Aaa AAA 350 Nashville and Davidson
Counties, Water and Sewer
Revenue, (AMBAC), Variable,
1/1/22 (1) 358,740
Aaa AAA 1,000 Nashville and Davidson
Counties, Water and Sewer
Revenue, (FGIC), 5.20%,
1/1/13 935,930
-----------
$ 2,784,180
-----------
CERTIFICATE OF
PARTICIPATION - 0.9%
A NR $ 500 Wilson County Educational
Facilities Corporation,
6.125%, 6/30/10 $ 508,050
-----------
POOLED LOANS - 6.7%
A AA- $ 700 Tennessee Local Development
Authority, State Loan
Program, 5.00%, 3/1/15 $ 637,406
A AA- 2,000 Tennessee Local Development
Authority, State Loan
Program, 5.75%, 3/1/11 2,004,320
NR A- 1,200 Tennessee Local Development
Authority, Community
Provider Pooled Loan
Program, 6.55%, 10/1/23 1,227,420
-----------
$ 3,869,146
-----------
NURSING HOMES - 1.8%
NR A+ $1,000 Tennessee State Veterans'
Homes Board, Humboldt
Project, 6.65%, 2/1/14 $ 1,025,410
-----------
TRANSPORTATION - 1.7%
NR BBB $1,000 Guam Airport Authority,
6.70%, 10/1/23 $ 1,007,200
-----------
UTILITIES - 4.4%
NR NR $1,000 Scott and Morgan Counties,
Citizens Gas Utility
District, 6.00%, 1/1/13 $ 959,390
Aa AA 1,000 Nashville and Davidson
Counties, Electric System
Revenue, 6.00%, 5/15/17 1,013,400
Baa1 A- 500 Puerto Rico Electric Power
Authority, 5.00%, 7/1/12 452,865
Baa1 A- 100 Puerto Rico Electric Power
Authority, 7.00%, 7/1/21 110,518
-----------
$ 2,536,173
-----------
WATER & SEWER - 2.2%
NR BBB+ $ 250 Hamilton County, Eastside
Utility District, 6.50%,
11/1/05 $ 263,208
NR BBB+ 250 Hamilton County, Eastside
Utility District, 6.75%,
11/1/11 260,455
A1 A 750 Davidson and Williamson
Counties, Harpeth Valley
Utility District, 5.50,
9/1/11 722,212
-----------
$ 1,245,875
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$57,120,750) $57,649,738
===========
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
(2) Security has been segregated to cover margin requirements for open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Tennessee
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at August 31, 1995, 37.7% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.8% to 20.3% of total investments.
See notes to financial statements
74
<PAGE> 31
- --------------------------------------------------------------------------------
Virginia Tax Free Portfolio
Portfolio of Investments - August 31, 1995
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 10.1%
NR A $2,000 Lynchburgh, IDA, Randolph-
Macon Woman's College,
5.875%, 9/1/23 $ 1,945,140
Baa1 NR 2,220 Rockingham County, IDA,
Bridgewater College,
5.95%, 10/1/13 2,120,633
NR A- 1,570 Virginia College Building
Authority, Hampden-Sydney
College, 6.60%, 9/1/16 1,631,073
NR A+ 400 Virginia College Building
Authority, Hampton
University, 6.50%, 4/1/08 421,988
NR A+ 1,000 Virginia College Building
Authority, Hampton
University, 5.75%, 4/1/14 962,440
NR BBB- 1,150 Virginia College Building
Authority, Marymount
University, 7.00%, 7/1/12 1,203,694
NR BBB- 2,200 Virginia College Building
Authority, Marymount
University, 7.00%, 7/1/22 2,287,626
Aa AA 1,500 Virginia College Building
Authority, Washington and
Lee University, 5.80%,
1/1/24 1,491,585
A NR 1,350 Virginia Education Loan
Authority, (AMT), 6.15%,
9/1/09 1,336,271
Aaa NR 5,650 Virginia Education Loan
Authority, (AMT), 5.55%,
9/1/10 5,422,417
------------
$ 18,822,867
------------
ESCROWED - 1.9%
Aaa NR $1,000 Arlington, IDA, Arlington
Hospital, 7.125%, 9/1/21 $ 1,154,580
A NR 500 Augusta, IDA, Augusta
Hospital, 7.00%, 9/1/21 572,615
NR A+ 1,700 Virginia Beach, Virginia
Water and Sewer System,
6.625%, 2/01/17 1,914,353
------------
$ 3,641,548
------------
GENERAL OBLIGATIONS - 5.6%
Aaa AAA $1,000 Fairfax County, 5.625%,
6/1/14 $ 985,670
Baa1 A 350 Puerto Rico, 0.00%, 7/1/04 218,953
A1 AA 500 Richmond, 6.25%, 1/5/18 509,085
A1 AA 2,000 Richmond, 6.25%, 1/15/21 2,024,460
Aa AA 1,000 Roanoke County, 5.00%,
6/01/21 881,520
Aa AA 1,500 Virginia Public School
Authority, 6.50%, 8/1/12 1,571,505
NR NR 4,000 Virgin Island, 7.25%,
10/1/18 4,200,080
------------
$ 10,391,273
------------
HEALTH CARE - 0.2%
NR NR $ 365 Covington-Allegheny
County, IDA, Beverly
Enterprises, 9.375%,
9/1/01 $ 412,304
------------
HOSPITALS - 16.7%
A NR $1,100 Albermarle County, IDA,
Martha Jefferson Hospital,
5.50%, 10/1/15 $ 1,024,133
A NR 3,800 Albermarle County, IDA,
Martha Jefferson Hospital,
5.50%, 10/1/20 3,463,586
A NR 380 Chesapeake Hospital,
Chesapeake General
Hospital, 7.60%, 7/1/00 417,057
Aa AA- 2,910 Fairfax, IDA, Inova Health
System Hospitals, 5.00%,
8/15/14 2,580,122
Aa AA- 2,000 Fairfax, IDA, Inova Health
System Hospitals, 5.00%,
8/15/15 1,756,440
A A 1,250 Martinsville, IDA,
Memorial Hospital of
Martinsville and Henry
County, 7.00%, 1/1/06 1,317,113
NR A- 2,000 Medical College of Hampton
Roads, GO, 6.875%,
11/15/11 2,117,000
Aa AA 1,000 Norfolk, IDA, Sentara
Health System, 5.50%,
11/01/17 941,400
Aa AA 3,000 Norfolk, IDA, Sentara
Health System, 5.00%,
11/1/20 2,612,760
Aa AA 2,250 Norfolk, IDA, Sentara
Health System, 6.50%,
11/1/13 2,377,823
Aa AA- 3,500 Peninsula Ports Authority
of Virginia, Riverside
Health System, 6.625%,
7/1/10 3,679,550
A NR 1,200 Prince William County,
IDA, Prince William
Hospital, 5.25%, 4/1/19 1,030,548
A NR 2,400 Prince William County,
IDA, Potomac Hospital,
6.85%, 10/1/25 2,545,728
Aa AA 4,000 Virginia Beach Development
Authority, Sentara Bayside
Hospital, 6.60%, 11/1/09 4,205,200
A NR 1,060 Washington County, IDA,
Johnston Memorial
Hospital, 7.00%, 7/1/22 1,121,989
------------
$ 31,190,449
------------
HOUSING - 10.9%
NR AAA $1,250 Fairfax County
Redevelopment and Housing
Authority, MFMR, (FHA),
7.00%, 5/1/26 $ 1,309,138
NR AAA 200 Harrisonburg Redevelopment
and Housing Authority,
MFMR, (GNMA), 7.375%,
11/20/28 210,291
Aa1 AA+ 5,000 Virginia HDA, MFMR, 6.75%,
7/1/21 5,065,950
</TABLE>
75
<PAGE> 32
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING - (CONTINUED)
Aa AA+ 3,500 Virginia HDA, MFMR, 7.05%,
5/1/18 3,663,170
Aa1 A+ 2,350 Virginia HDA, SFMR, 7.10%,
1/1/17 2,463,811
Aa1 NR 2,500 Virginia HDA, SFMR, 6.85%,
1/1/15 2,589,325
Aa1 A+ 3,000 Virginia HDA, SFMR, 7.10%,
1/1/22 3,135,450
Aa NR 1,900 Virginia HDA, SFMR,
Variable, 7/1/04 (1) 1,916,359
------------
$ 20,353,494
------------
INDUSTRIAL DEVELOPMENT
AUTHORITY - 7.5%
Aa NR $2,190 Chesapeake, IDA, Cargill
Inc., 5.875%, 3/1/13 $ 2,200,643
A2 A+ 1,000 Giles City, IDA, Hoechst
Celanese Corporation,
(AMT), 6.625%, 12/1/22 1,035,820
A1 A- 4,000 Isle of Wright County,
IDA, Union Camp
Corporation, (AMT), 6.55%,
4/1/24 4,192,480
Baa3 BBB 5,520 West Point, IDA,
Chesapeake Corporation,
(AMT), 6.375%, 3/1/19 5,516,578
Baa3 BBB 980 West Point, IDA,
Chesapeake Corporation,
6.25%, 3/1/19 981,480
------------
$ 13,927,001
------------
INSURED GENERAL
OBLIGATION - 0.9%
Aaa AAA $2,000 Loudon County, (MBIA),
5.25%, 1/1/30 $ 1,785,320
------------
INSURED HEALTH CARE - 1.0%
Aaa AAA $2,000 Hanover County, Bonsecour
Health System, (MBIA),
5.50%, 8/15/25 $ 1,853,800
------------
INSURED HOSPITALS - 7.6%
Aaa AAA $1,665 Arlington, IDA, The
Arlington Hospital,
(AMBAC), 5.00%, 9/1/21 $ 1,421,960
Aaa AAA 5,000 Augusta County, IDA,
Augusta Hospital
Corporation, (AMBAC),
5.125%, 9/1/21 4,543,500
Aaa AAA 3,000 Chesapeake Hospital
Authority, Chesapeake
General Hospital, (MBIA),
5.25%, 7/1/18 2,739,390
Aaa AAA 1,000 Norfolk, IDA, Children's
Hospital of the King's
Daughters Obligated Group,
(AMBAC), 5.50%, 6/1/20 934,650
Aaa AAA 1,000 Roanoke, IDA, Franklin
Memorial Hospital and St.
Albans Psychiatric
Hospital (MBIA), 5.25%,
7/1/25 896,350
Aaa AAA 2,250 Virginia Beach, IDA,
Virginia Beach Memorial
Hospital, (AMBAC), 5.125%,
2/15/18 2,034,495
Aaa AAA 1,700 Winchester, IDA,
Winchester Medical Center,
(AMBAC), Variable, 1/1/08
(1) 1,667,836
------------
$ 14,238,181
------------
INSURED LEASE - 0.5%
Aaa AAA $1,000 Riverside Regional Jail
Authority, (MBIA), 6.00%,
7/1/25 $ 999,890
------------
INSURED TRANSPORTATION - 5.4%
Aaa AAA $6,500 Metropolitan Washington
Airports Authority,
(MBIA), (AMT), 5.75%,
10/1/20 $ 6,233,500
Aaa AAA 3,000 Northern Virginia
Transportation District
Commission, (CGIC), 5.25%,
7/1/10 2,868,750
Aaa AAA 1,000 Richmond Metropolitan
Authority Expressway,
(FGIC), 6.375%, 7/15/16 1,035,800
------------
$ 10,138,050
------------
INSURED WATER & SEWER - 2.8%
Aaa AAA $2,000 Loudon County Sanitation
Authority, (MBIA), 5.25%,
1/1/25 $ 1,809,240
Aaa AAA 1,000 Norfolk Water, (AMBAC),
5.25%, 11/1/13 937,610
Aaa AAA 1,000 Roanoke County, Water and
Sewer, (FGIC), 5.00%,
7/1/21 881,360
Aaa AAA 1,750 Upper Occoquan Sewage
Authority, (FGIC), 5.00%,
7/1/15 1,578,570
------------
$ 5,206,780
------------
LEASE/CERTIFICATES OF
PARTICIPATION - 11.2%
Aa AA $4,250 Fairfax County Economic
Development Authority,
Lease, Government Center
Properties, 5.50%, 5/15/18 $ 4,033,378
Aa AA 1,750 Fairfax County Economic
Development Authority,
Lease, Government Center
Properties 5.25%, 11/15/18 1,605,030
Aa AA 3,200 Fairfax County Economic
Development Authority,
Lease, Government Center
Properties 5.50%, 5/15/14 3,073,407
NR A- 2,500 Hampton, Museum Revenue,
5.25%, 1/1/09 2,389,025
A NR 3,000 Harrisonburg Redevelopment
and Housing Authority,
Lease, Rockingham County
and Harrisonburg, 6.50%,
9/1/14 3,089,640
</TABLE>
76
<PAGE> 33
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
LEASE/CERTIFICATES OF
PARTICIPATION - (CONTINUED)
Aa AA 2,000 Henrico County, IDA,
Lease, 7.00%, 8/1/13 2,251,580
Aa AA 2,250 Henrico County, IDA,
Lease, 7.125%, 8/1/21 2,545,043
NR NR 1,250 King George County, Lease,
7.00%, 12/15/12 1,299,025
NR A 600 Prince William County,
IDA, Virginia Commuter
Parking Facilities Lease,
7.25%, 3/1/11 677,484
------------
$ 20,963,612
------------
LIFE CARE - 1.1%
NR NR $2,000 Loudon County, IDA,
Falcons Landing, 8.75%,
11/01/24 $ 2,032,500
------------
SOLID WASTE - 1.2%
A1 A+ $ 915 Fairfax County Economic
Development Authority,
Ogden Martin Systems of
Fairfax Incorporated,
(AMT), 7.75%, 2/1/11 $ 1,002,694
Baa1 A- 1,250 Southeastern Public
Service Authority, Solid
Waste Systems, 6.00%,
7/1/13 1,208,750
------------
$ 2,211,444
------------
SPECIAL TAX REVENUE - 6.9%
Baa1 A $1,375 Puerto Rico Highway &
Transportation Authority,
5.50%, 7/1/19 $ 1,283,370
Baa1 A 2,200 Puerto Rico Highway &
Transportation Authority,
5.25%, 7/1/20 1,980,352
Baa1 A 1,000 Puerto Rico Highway &
Transportation Authority,
5.00%, 7/1/22 863,810
Baa1 A 1,000 Puerto Rico Highway &
Transportation Authority,
5.50%, 7/1/15 950,160
Aa AA 1,000 Virginia State
Transportation Board
Revenue, Route 28,
Variable, 4/1/18 (1) 1,092,590
Aa AA 2,800 Virginia State
Transportation Board
Revenue, US Route 28,
5.25%, 5/15/19 2,565,724
Aa AA 4,000 Virginia State
Transportation Board
Revenue, Route 28, 6.50%,
4/1/18 4,156,640
------------
$ 12,892,646
------------
UTILITIES - 2.9%
Baa1 A- $3,000 Puerto Rico Electric
Authority Power, 0.00%,
7/1/17 $ 793,290
Baa1 A- 1,000 Puerto Rico Electric
Authority Power, 6.00%,
7/1/14 994,320
NR NR 1,000 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 1,047,510
A2 A 2,700 Louisa, IDA, Virginia
Electric and Power
Company, 5.45%, 1/1/24 2,488,320
------------
$ 5,323,440
------------
WATER & SEWER REVENUE - 5.6%
Aa AA- $2,250 Fairfax County Virginia
Water Authority, 5.75%,
4/1/29 $ 2,194,380
Aa AA- 1,000 Fairfax County Virginia
Water Authority, Variable,
4/1/29 (1) 934,120
Aa AA- 4,095 Fairfax County Virginia
Water Authority, 5.00%,
4/1/16 3,650,037
NR AA 2,000 Virginia Resource
Authority, Hopewell Waste
Water, (AMT), 6.00%,
10/1/25 1,950,960
NR AA 1,880 Virginia Resource
Authority, Campbell
Utilities, 5.125%, 10/1/19 1,663,085
------------
$ 10,392,582
------------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$179,383,019) $186,777,181
============
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
The Portfolio invests primarily in debt securities issued by Virginia
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at August 31, 1995, 18.3% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.7% to 8.7% of total investments.
See notes to financial statements
77
<PAGE> 34
- --------------------------------------------------------------------------------
Tax Free Portfolios
Financial Statements
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALABAMA ARKANSAS GEORGIA KENTUCKY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments --
Identified cost $112,610,415 $79,275,204 $115,913,957 $141,197,528
Unrealized appreciation 3,869,441 1,544,657 3,429,375 2,007,717
------------ ----------- ------------ ------------
Total investments, at value (Note 1A) $116,479,856 $80,819,861 $119,343,332 $143,205,245
Cash 479 631 1,575,423 291,390
Receivable for investments sold 1,953,475 -- -- --
Interest receivable 1,842,994 1,202,749 2,030,938 2,222,506
Deferred organization expenses (Note 1D) 3,759 5,177 5,511 3,157
------------ ----------- ------------ ------------
Total assets $120,280,563 $82,028,418 $122,955,204 $145,722,298
------------ ----------- ------------ ------------
LIABILITIES:
Demand note payable (Note 5) $ 103,000 $ 444,000 $ -- $ --
Payable for investments purchased 1,625,182 -- -- 370,873
Payable for daily variation margin on open financial
futures contracts (Note 1E) 59,704 42,646 -- 74,630
Payable to affiliates --
Trustees' fees 1,339 1,009 1,339 1,339
Custodian fees 1,824 2,436 1,500 2,783
Accrued expenses 3,461 3,325 3,698 4,047
------------ ----------- ------------ ------------
Total liabilities $ 1,794,510 $ 493,416 $ 6,537 $ 453,672
------------ ----------- ------------ ------------
NET ASSETS applicable to investors' interest in
Portfolio $118,486,053 $81,535,002 $122,948,667 $145,268,626
============ =========== ============ ============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $114,679,646 $80,035,368 $119,519,292 $143,339,700
Unrealized appreciation of investments and financial
futures contracts (computed on the basis of
identified cost) 3,806,407 1,499,634 3,429,375 1,928,926
------------ ----------- ------------ ------------
Total $118,486,053 $81,535,002 $122,948,667 $145,268,626
============ =========== ============ ============
</TABLE>
See notes to financial statements
78
<PAGE> 35
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ----------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments --
Identified cost $33,349,873 $112,178,823 $88,354,959 $183,382,988
Unrealized appreciation 260,911 1,972,898 3,275,460 7,281,157
----------- ------------ ----------- ------------
Total investments, at value (Note 1A) $33,610,784 $114,151,721 $91,630,419 $190,664,145
Cash 47,590 732 358 1,453,646
Receivable for investments sold -- -- 866,873 --
Interest receivable 659,890 1,517,519 1,190,249 3,059,961
Deferred organization expenses (Note 1D) 4,697 3,865 3,364 8,323
----------- ------------ ----------- ------------
Total assets $34,322,961 $115,673,837 $93,691,263 $195,186,075
----------- ------------ ----------- ------------
LIABILITIES:
Demand note payable (Note 5) $ -- $ 603,000 $ 524,000 $ --
Payable for daily variation margin on open
financial futures contracts (Note 1E) 11,875 59,704 -- --
Payable to affiliates --
Trustees' fees 275 1,339 1,009 1,779
Custodian fees 500 1,974 1,978 1,500
Accrued expenses 1,632 3,644 2,173 4,072
----------- ------------ ----------- ------------
Total liabilities $ 14,282 $ 669,661 $ 529,160 $ 7,351
----------- ------------ ----------- ------------
NET ASSETS applicable to investors' interest in
Portfolio $34,308,679 $115,004,176 $93,162,103 $195,178,724
=========== ============ =========== ============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $34,063,019 $113,094,311 $89,886,643 $187,897,567
Unrealized appreciation of investments and
financial futures contracts (computed
on the basis of identified cost) 245,660 1,909,865 3,275,460 7,281,157
----------- ------------ ----------- ------------
Total $34,308,679 $115,004,176 $93,162,103 $195,178,724
=========== ============ =========== ============
</TABLE>
See notes to financial statements
79
<PAGE> 36
- -------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
August 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ -------------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments --
Identified cost $143,369,782 $ 60,604,156 $57,120,750 $179,383,019
Unrealized appreciation 2,649,369 2,344,111 528,988 7,394,162
------------ ------------- ----------- ------------
Total investments, at value (Note 1A) $146,019,151 $ 62,948,267 $57,649,738 $186,777,181
Cash 414,837 922,554 611 644
Receivable for investments sold -- 250,069 349,174 3,747,425
Interest receivable 2,002,597 901,959 930,255 3,441,666
Deferred organization expenses (Note 1D) 5,037 4,978 5,807 6,791
------------ ------------- ----------- ------------
Total assets $148,441,622 $ 65,027,827 $58,935,585 $193,973,707
------------ ------------- ----------- ------------
LIABILITIES:
Due to Bank $ -- $ -- $ 230,000 $ --
Demand note payable (Note 5) -- -- -- 795,000
Payable for investments purchased 2,012,175 737,459 -- 1,423,116
Payable for when issued securities (Note 1F) -- 2,872,768 -- --
Payable for daily variation margin on open
financial futures contracts (Note 1E) 32,063 -- 28,500 --
Payable to affiliates --
Trustees' fees 1,339 1,009 1,009 1,779
Custodian fees 3,011 1,770 1,000 1,500
Accrued expenses 2,113 3,153 1,773 4,390
------------ ------------ ----------- ------------
Total liabilities $ 2,050,701 $ 3,616,159 $ 262,282 $ 2,225,785
------------ ------------ ----------- ------------
NET ASSETS applicable to investors' interest in
Portfolio $146,390,921 $ 61,411,668 $58,673,303 $191,747,922
============ ============ =========== ============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $143,780,409 $ 59,067,557 $58,178,854 $184,353,760
Unrealized appreciation of investments and
financial futures contracts (computed on the
basis of identified cost) 2,610,512 2,344,111 494,449 7,394,162
------------ ------------ ----------- ------------
Total $146,390,921 $ 61,411,668 $58,673,303 $191,747,922
============ ============ =========== ============
</TABLE>
See notes to financial statements
80
<PAGE> 37
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Year Ended August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALABAMA ARKANSAS GEORGIA KENTUCKY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income (Note 1B) $ 7,218,221 $ 4,986,371 $ 7,872,386 $ 8,874,638
----------- ----------- ----------- -----------
Expenses --
Investment adviser fee (Note 2) $ 466,320 $ 296,231 $ 521,159 $ 595,483
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 9,218 6,366 8,154 8,932
Custodian fee (Note 2) 16,491 23,999 1,500 35,132
Legal and accounting services 21,471 19,471 21,476 21,478
Amortization of organization expenses (Note 1D) 1,569 1,504 2,194 1,332
Miscellaneous 26,725 24,449 26,661 32,366
----------- ----------- ----------- -----------
Total expenses $ 541,794 $ 372,020 $ 581,144 $ 694,723
----------- ----------- ----------- -----------
Net investment income $ 6,676,427 $ 4,614,351 $ 7,291,242 $ 8,179,915
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss --
Investment transactions (identified cost basis) $(1,890,084) $(1,454,374) $(4,616,970) $ (885,272)
Financial futures contracts (1,483,364) (1,063,446) (2,695,409) (1,829,860)
----------- ----------- ----------- -----------
Net realized loss on investments $(3,373,448) $(2,517,820) $(7,312,379) $(2,715,132)
----------- ----------- ----------- -----------
Change in unrealized appreciation (depreciation) --
Investments $ 5,912,494 $ 3,484,695 $ 6,554,692 $ 4,974,832
Financial futures contracts (28,264) (20,556) 124,961 (32,432)
----------- ----------- ----------- -----------
Net unrealized appreciation $ 5,884,230 $ 3,464,139 $ 6,679,653 $ 4,942,400
----------- ----------- ----------- -----------
Net realized and unrealized gain (loss) on
investments $ 2,510,782 $ 946,319 $ (632,726) $ 2,227,268
----------- ----------- ----------- -----------
Net increase in net assets from operations $ 9,187,209 $ 5,560,670 $ 6,658,516 $10,407,183
=========== =========== =========== ===========
</TABLE>
See notes to financial statements
81
<PAGE> 38
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Year Ended August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income (Note 1B) $ 2,046,922 $ 7,192,618 $ 5,770,761 $12,179,577
----------- ----------- ----------- -----------
Expenses --
Investment adviser fee (Note 2) $ 73,471 $ 459,907 $ 353,176 $ 851,448
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 1,618 8,154 5,709 10,743
Custodian fee (Note 2) 975 16,357 35,917 1,500
Interest expense (Note 5) 6,263 -- 13,828 --
Legal and accounting services 15,814 21,471 19,565 26,148
Bond pricing 6,060 -- -- --
Amortization of organization expenses (Note 1D) 1,355 1,518 1,405 3,365
Miscellaneous 1,842 25,883 14,442 35,974
----------- ----------- ----------- -----------
Total expenses $ 107,398 $ 533,290 $ 444,042 $ 929,178
Deduct reduction of investment adviser fee
(Note 2) 36,188 -- -- --
----------- ----------- ----------- -----------
Net expenses $ 71,210 $ 533,290 $ 444,042 $ 929,178
----------- ----------- ----------- -----------
Net investment income $ 1,975,712 $ 6,659,328 $ 5,326,719 $11,250,399
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss --
Investment transactions (identified cost basis) $ (705,098) $(1,843,753) $(2,564,654) $(4,108,823)
Financial futures contracts (964,523) (1,471,264) (474,286) (4,996,239)
----------- ----------- ----------- -----------
Net realized loss on investments $(1,669,621) $(3,315,017) $(3,038,940) $(9,105,062)
----------- ----------- ----------- -----------
Change in unrealized appreciation (depreciation) --
Investments $ 1,644,370 $ 4,940,542 $ 5,450,131 $ 8,883,601
Financial futures contracts 19,876 (26,976) 21,133 176,415
----------- ----------- ----------- -----------
Net unrealized appreciation $ 1,664,246 $ 4,913,566 $ 5,471,264 $ 9,060,016
----------- ----------- ----------- -----------
Net realized and unrealized gain (loss)
on investments $ (5,375) $ 1,598,549 $ 2,432,324 $ (45,046)
----------- ----------- ----------- -----------
Net increase in net assets from
operations $ 1,970,337 $ 8,257,877 $ 7,759,043 $11,205,353
=========== =========== =========== ===========
</TABLE>
See notes to financial statements
82
<PAGE> 39
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Year Ended August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income (Note 1B) $ 8,920,231 $ 3,791,815 $ 3,518,306 $11,988,135
----------- ----------- ----------- -----------
Expenses --
Investment adviser fee (Note 2) $ 609,837 $ 198,498 $ 177,788 $ 834,074
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 8,155 6,212 7,096 10,743
Custodian fee (Note 2) 56,584 16,809 13,033 1,500
Legal and accounting services 21,580 19,464 19,554 26,931
Amortization of organization expenses
(Note 1D) 2,091 1,442 2,358 2,763
Miscellaneous 35,210 23,093 14,329 30,392
----------- ----------- ----------- -----------
Total expenses $ 733,457 $ 265,518 $ 234,158 $ 906,403
----------- ----------- ----------- -----------
Net investment income $ 8,186,774 $ 3,526,297 $ 3,284,148 $11,081,732
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss --
Investment transactions (identified cost
basis) $(3,335,521) $(2,946,871) $(1,045,028) $(3,901,492)
Financial futures contracts (1,035,171) (1,080,892) (866,769) (3,709,160)
----------- ----------- ----------- -----------
Net realized loss on investments $(4,370,692) $(4,027,763) $(1,911,797) $(7,610,652)
----------- ----------- ----------- -----------
Change in unrealized appreciation (depreciation) --
Investments $ 7,376,821 $ 4,213,366 $ 2,650,662 $10,104,183
Financial futures contracts (4,860) 53,292 (23,513) 175,497
----------- ----------- ----------- -----------
Net unrealized appreciation $ 7,371,961 $ 4,266,658 $ 2,627,149 $10,279,680
----------- ----------- ----------- -----------
Net realized and unrealized gain on
investments $ 3,001,269 $ 238,895 $ 715,352 $ 2,669,028
----------- ----------- ----------- -----------
Net increase in net assets from
operations $11,188,043 $ 3,765,192 $ 3,999,500 $13,750,760
=========== =========== =========== ============
</TABLE>
See notes to financial statements
83
<PAGE> 40
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALABAMA ARKANSAS GEORGIA KENTUCKY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 6,676,427 $ 4,614,351 $ 7,291,242 $ 8,179,915
Net realized loss on investment transactions (3,373,448) (2,517,820) (7,312,379) (2,715,132)
Change in unrealized appreciation of investments 5,884,230 3,464,139 6,679,653 4,942,400
------------ ------------ ------------ ------------
Net increase in net assets from operations $ 9,187,209 $ 5,560,670 $ 6,658,516 $ 10,407,183
------------ ------------ ------------ ------------
Capital transactions --
Contributions $ 15,271,028 $ 7,773,910 $ 12,224,959 $ 13,579,954
Withdrawals (23,135,575) (14,716,313) (33,658,605) (23,928,447)
------------ ------------ ------------ ------------
Decrease in net assets resulting from
capital transactions $ (7,864,547) (6,942,403) $(21,433,646) $(10,348,493)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets $ 1,322,662 $ (1,381,733) $(14,775,130) $ 58,690
NET ASSETS:
At beginning of year 117,163,391 82,916,735 137,723,797 145,209,936
------------ ------------ ------------ ------------
At end of year $118,486,053 $ 81,535,002 $122,948,667 $145,268,626
============ ============ ============ ============
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ----------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 1,975,712 $ 6,659,328 $ 5,326,719 $ 11,250,399
Net realized loss on investment transactions (1,669,621) (3,315,017) (3,038,940) (9,105,062)
Change in unrealized appreciation of
investments 1,664,246 4,913,566 5,471,264 9,060,016
----------- ------------ ----------- ------------
Net increase in net assets from operations $ 1,970,337 $ 8,257,877 $ 7,759,043 $ 11,205,353
----------- ------------ ----------- ------------
Capital transactions --
Contributions $ 6,817,148 $ 14,770,279 $ 8,450,749 $ 18,834,488
Withdrawals (5,902,141) (25,879,697) (18,215,122) (34,633,470)
----------- ------------ ----------- ------------
Increase (decrease) in net assets resulting
from capital transactions $ 915,007 $(11,109,418) $(9,764,373) $(15,798,982)
----------- ------------ ----------- ------------
Net increase (decrease) in net assets $ 2,885,344 $ (2,851,541) $(2,005,330) $ (4,593,629)
NET ASSETS:
At beginning of year 31,423,335 117,855,717 95,167,433 199,772,353
----------- ------------ ----------- ------------
At end of year $34,308,679 $115,004,176 $93,162,103 $195,178,724
=========== ============ =========== =============
</TABLE>
See notes to financial statements
84
<PAGE> 41
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ -------------- ----------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 8,186,774 $ 3,526,297 $ 3,284,148 $ 11,081,732
Net realized loss on investment transactions (4,370,692) (4,027,763) (1,911,797) (7,610,652)
Change in unrealized appreciation of
investments 7,371,961 4,266,658 2,627,149 10,279,680
------------ ------------- ----------- ------------
Net increase in net assets from operations $ 11,188,043 $ 3,765,192 $ 3,999,500 $ 13,750,760
------------ ------------ ----------- ------------
Capital transactions --
Contributions $ 12,298,876 $ 9,608,721 $ 7,946,656 $ 24,173,920
Withdrawals (30,215,219) (14,226,934) (9,768,536) (40,695,946)
------------ ------------ ----------- ------------
Decrease in net assets resulting from capital
transactions $(17,916,343) $ (4,618,213) $(1,821,880) $(16,522,026)
------------ ------------ ----------- ------------
Net increase (decrease) in net assets $ (6,728,300) $ (853,021) $ 2,177,620 $ (2,771,266)
NET ASSETS:
At beginning of year 153,119,221 62,264,689 56,495,683 194,519,188
------------ ------------ ----------- ------------
At end of year $146,390,921 $ 61,411,668 $58,673,303 $191,747,922
============ ============ =========== ============
</TABLE>
See notes to financial statements
85
<PAGE> 42
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended August 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALABAMA ARKANSAS GEORGIA KENTUCKY
PORTFOLIO* PORTFOLIO** PORTFOLIO* PORTFOLIO*
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 5,213,587 $ 2,555,613 $ 6,604,249 $ 6,772,813
Net realized loss on investment transactions (1,159,958) (349,879) (1,311,944) (59,807)
Change in unrealized depreciation of investments (6,819,050) (5,522,249) (9,992,777) (10,955,591)
------------ ----------- ------------ ------------
Net decrease in net assets from operations $ (2,765,421) $(3,316,515) $ (4,700,472) $ (4,242,585)
------------ ----------- ------------ ------------
Capital transactions --
Contributions $ 48,883,547 $90,005,753 $ 42,445,028 $ 44,883,326
Withdrawals (12,582,537) (3,872,523) (19,332,141) (13,367,045)
------------ ----------- ------------ ------------
Increase in net assets resulting from capital
transactions $ 36,301,010 $86,133,230 $ 23,112,887 $ 31,516,281
------------ ----------- ------------ ------------
Net increase in net assets $ 33,535,589 $82,816,715 $ 18,412,415 $ 27,273,696
NET ASSETS:
At beginning of period 83,627,802 100,020 119,311,382 117,936,240
------------ ----------- ------------ ------------
At end of period $117,163,391 $82,916,735 $137,723,797 $145,209,936
============ ============ ============ ============
</TABLE>
* For the eleven months ended August 31, 1994 (Note 7).
** For the seven months ended August 31, 1994.
See notes to financial statements
86
<PAGE> 43
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended August 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
PORTFOLIO** PORTFOLIO* PORTFOLIO* PORTFOLIO*
----------- ------------ ----------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 976,696 $ 5,460,165 $ 4,337,756 $ 9,444,440
Net realized loss on investment transactions (259,364) (590,974) (14,916) (3,785,407)
Change in unrealized depreciation of
investments (2,361,484) (9,137,805) (7,434,028) (12,662,593)
----------- ------------ ----------- ------------
Net decrease in net assets from operations $(1,644,152) $ (4,268,614) $(3,111,188) $ (7,003,560)
----------- ------------ ----------- -------------
Capital transactions --
Contributions $34,683,852 $ 38,617,526 $30,851,018 $ 52,654,042
Withdrawals (1,716,385) (10,706,479) (7,845,180) (18,412,361)
----------- ------------ ----------- --------------
Increase in net assets resulting from
capital transactions $32,967,467 $ 27,911,047 $23,005,838 $ 34,241,681
----------- ------------ ----------- -------------
Net increase in net assets $31,323,315 $ 23,642,433 $19,894,650 $ 27,238,121
NET ASSETS:
At beginning of period 100,020 94,213,284 75,272,783 172,534,232
----------- ------------ ----------- -------------
At end of period $31,423,335 $117,855,717 $95,167,433 $199,772,353
=========== ============ =========== ============
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
PORTFOLIO* PORTFOLIO** PORTFOLIO* PORTFOLIO*
------------ -------------- ----------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 6,932,765 $ 1,863,481 $ 2,453,518 $ 9,556,570
Net realized gain (loss) on investment
transactions 4,146 (984,439) (105,080) (2,385,959)
Change in unrealized depreciation of
investments (11,945,088) (4,190,757) (3,871,496) (13,323,277)
------------ ----------- ----------- ------------
Net decrease in net assets from operations $ (5,008,177) $(3,311,715) $(1,523,058) $ (6,152,666)
------------ ----------- ----------- ------------
Capital transactions --
Contributions $ 47,210,240 $72,540,601 $22,707,167 $ 47,023,229
Withdrawals (16,579,534) (7,064,217) (3,954,097) (20,611,874)
------------ ----------- ----------- ------------
Increase in net assets resulting from capital
transactions $ 30,630,706 $65,476,384 $18,753,070 $ 26,411,355
------------ ----------- ----------- ------------
Net increase in net assets $ 25,622,529 $62,164,669 $17,230,012 $ 20,258,689
NET ASSETS:
At beginning of period 127,496,692 100,020 39,265,671 174,260,499
------------ ----------- ----------- ------------
At end of period $153,119,221 $62,264,689 $56,495,683 $194,519,188
============ =========== =========== ============
</TABLE>
* For the eleven months ended August 31, 1994 (Note 7).
** For the seven months ended August 31, 1994.
See notes to financial statements
87
<PAGE> 44
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended September 30, 1993*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALABAMA GEORGIA KENTUCKY MARYLAND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 2,179,903 $ 3,313,669 $ 3,277,040 $ 2,481,633
Net realized gain (loss) on investment
transactions (464,133) 73,591 (535,372) (224,803)
Change in unrealized appreciation of investments 3,994,097 5,637,256 6,325,963 5,066,445
------------ ------------ ------------ ------------
Net increase in net assets from operations $ 5,709,867 $ 9,024,516 $ 9,067,631 $ 7,323,275
------------ ------------ ------------ ------------
Capital transactions --
Contributions $ 81,040,375 $116,822,592 $115,630,800 $ 94,448,256
Withdrawals (3,222,460) (6,635,746) (6,862,211) (7,658,267)
------------ ------------ ------------ ------------
Increase in net assets resulting from capital
transactions $ 77,817,915 $110,186,846 $108,768,589 $ 86,789,989
------------ ------------ ------------ ------------
Net increase in net assets $ 83,527,782 $119,211,362 $117,836,220 $ 94,113,264
NET ASSETS:
At beginning of period 100,020 100,020 100,020 100,020
------------ ------------ ------------ ------------
At end of period $ 83,627,802 $119,311,382 $117,936,240 $ 94,213,284
============ ============ ============ ============
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MISSOURI NORTH CAROLINA OREGON TENNESSEE VIRGINIA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 1,996,871 $ 4,992,912 $ 3,445,924 $ 926,224 $ 5,091,661
Net realized gain (loss) on
investment transactions (201,650) (495,879) 1,139,513 454,397 (192,625)
Change in unrealized
appreciation of investments 4,258,226 8,668,236 5,331,993 1,499,177 7,938,495
----------- ------------ ------------ ------------ ------------
Net increase in net assets
from operations $ 6,053,447 $ 13,165,269 $ 9,917,430 $ 2,879,798 $ 12,837,531
----------- ------------- ------------ ------------ ------------
Capital transactions --
Contributions $71,730,941 $177,359,369 $142,413,151 $ 41,826,943 $170,140,465
Withdrawals (2,611,625) (18,090,426) (24,933,909) (5,541,090) (8,817,517)
----------- ------------- ------------ ------------ ------------
Increase in net assets
resulting from capital
transactions $69,119,316 $159,268,943 $117,479,242 $ 36,285,853 $161,322,948
----------- ------------ ------------ ------------ ------------
Net increase in net
assets $75,172,763 $172,434,212 $127,396,672 $ 39,165,651 $174,160,479
NET ASSETS:
At beginning of period 100,020 100,020 100,020 100,020 100,020
----------- ------------ ------------ ------------ ------------
At end of period $75,272,783 $172,534,232 $127,496,692 $ 39,265,671 $174,260,499
=========== ============ ============ ============ ============
</TABLE>
* For the period from the start of business, February 1, 1993, to September 30,
1993.
See notes to financial statements
88
<PAGE> 45
- --------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO ARKANSAS PORTFOLIO
----------------------------------- -----------------------
YEAR ENDED YEAR ENDED
----------------------------------- -----------------------
AUGUST 31, AUGUST 31, SEPT. 30, AUGUST 31, AUGUST 31,
1995 1994* 1993** 1995 1994***
---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
RATIOS (As a percentage of average
daily net assets)++:
Net expenses 0.47% 0.44%+ 0.25%+ 0.46% 0.24%+
Net investment income 5.77% 5.37%+ 5.52%+ 5.69% 5.60%+
Portfolio Turnover 51% 26% 10% 23% 16%
NET ASSETS, end of period (000 omitted) $118,486 $117,163 $83,628 $ 81,535 $ 82,917
</TABLE>
++The operating expenses of the Portfolios may reflect a reduction of the
investment adviser fee and an allocation of expenses to the Investment
Adviser. Had such actions not been taken, the ratios would have been as
follows:
<TABLE>
<S> <C> <C>
RATIOS (As a percentage of average daily net assets):
Expenses 0.35%+ 0.43%+
Net investment income 5.42%+ 5.41%+
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
----------------------------------- ------------------------------------
YEAR ENDED YEAR ENDED
----------------------------------- ------------------------------------
AUGUST 31, AUGUST 31, SEPT. 30, AUGUST 31, AUGUST 31, SEPT. 30,
1995 1994* 1993** 1995 1994* 1993**
---------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
RATIOS (As a percentage of average
daily net assets):
Net expenses 0.46% 0.44%+ 0.40%+ 0.49% 0.46%+ 0.40%+
Net investment income 5.73% 5.37%+ 5.37%+ 5.75% 5.39%+ 5.40%+
Portfolio Turnover 48% 45% 35% 30% 21% 11%
NET ASSETS, end of period (000
omitted) $122,949 $137,724 $119,311 $145,269 $145,210 $117,936
</TABLE>
+ Annualized.
* For the eleven months ended August 31, 1994 (Note 7).
** For the period from the start of business, February 1, 1993, to September
30, 1993.
*** For the seven months ended August 31, 1994.
See notes to financial statements
89
<PAGE> 46
- --------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOUISIANA PORTFOLIO MARYLAND PORTFOLIO
----------------------- -----------------------------------
YEAR ENDED YEAR ENDED
----------------------- -----------------------------------
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, SEPT. 30,
1995 1994*** 1995 1994* 1993**
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
RATIOS (As a percentage of average
daily net assets)++:
Net expenses 0.22% 0.14%+ 0.47% 0.44%+ 0.36%+
Net investment income 6.06% 5.86%+ 5.79% 5.44%+ 5.41%+
Portfolio Turnover 46% 21% 30% 41% 34%
NET ASSETS, end of period (000 omitted) $34,309 $31,423 $115,004 $117,856 $94,213
</TABLE>
++ The operating expenses of the Portfolios may reflect a reduction of the
investment adviser fee and an allocation of expenses to the Investment
Adviser. Had such actions not been taken, the ratios would have been as
follows:
<TABLE>
<S> <C> <C> <C>
RATIOS (As a percentage of average net assets):
Expenses 0.33% 0.33%+ 0.38%+
Net investment income 5.95% 5.67%+ 5.39%+
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED
----------------------------------- -----------------------------------
AUGUST 31, AUGUST 31, SEPT. 30, AUGUST 31, AUGUST 31, SEPT. 30,
1995 1994* 1993** 1995 1994* 1993**
---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
RATIOS (As a percentage of average
daily net assets):
Net expenses 0.48% 0.45%+ 0.40%+ 0.48% 0.46%+ 0.43%+
Net investment income 5.76% 5.36%+ 5.36%+ 5.78% 5.40%+ 5.43%+
Portfolio Turnover 24% 28% 6% 33% 37% 21%
NET ASSETS, end of period (000
omitted) $93,162 $95,167 $75,273 $195,179 $199,772 $172,534
</TABLE>
+ Annualized.
* For the eleven months ended August 31, 1994 (Note 7).
** For the period from the start of business, February 1, 1993, to September
30, 1993.
*** For the seven months ended August 31, 1994.
See notes to financial statements
90
<PAGE> 47
- --------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SOUTH CAROLINA
OREGON PORTFOLIO PORTFOLIO
----------------------------------- -----------------------
YEAR ENDED YEAR ENDED
----------------------------------- -----------------------
AUGUST 31, AUGUST 31, SEPT. 30, AUGUST 31, AUGUST 31,
1995 1994* 1993** 1995 1994***
---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
RATIOS (As a percentage of average
daily net assets):
Net expenses 0.50% 0.46%+ 0.43%+ 0.44% 0.37%+
Net investment income 5.60% 5.26%+ 5.30%+ 5.81% 5.47%+
Portfolio Turnover 22% 15% 32% 75% 23%
NET ASSETS, end of period (000 omitted) $146,391 $153,119 $127,497 $61,412 $62,265
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED
----------------------------------- -----------------------------------
AUGUST 31, AUGUST 31, SEPT. 30, AUGUST 31, AUGUST 31, SEPT. 30,
1995 1994* 1993** 1995 1994* 1993**
---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
RATIOS (As a percentage of average
daily net assets)++:
Net expenses 0.41% 0.36%+ 0.08%+ 0.48% 0.46%+ 0.43%+
Net investment income 5.81% 5.49%+ 5.60%+ 5.81% 5.49%+ 5.49%+
Portfolio Turnover 20% 10% 69% 38% 48% 29%
NET ASSETS, end of period (000
omitted) $58,673 $56,496 $39,266 $191,748 $194,519 $174,260
</TABLE>
++The operating expenses of the Portfolios may reflect a reduction of the
investment adviser fee and an allocation of expenses to the Investment
Adviser. Had such actions not been taken, the ratios would have been as
follows:
<TABLE>
<S> <C>
RATIOS (As a percentage of average daily net assets):
Expenses 0.31%+
Net investment income 5.37%+
</TABLE>
+ Annualized.
* For the eleven months ended August 31, 1994 (Note 7).
** For the period from the start of business, February 1, 1993, to September
30, 1993.
*** For the seven months ended August 31, 1994.
See notes to financial statements
91
<PAGE> 48
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Alabama Tax Free Portfolio (Alabama Portfolio), Arkansas Tax Free Portfolio
(Arkansas Portfolio), Georgia Tax Free Portfolio (Georgia Portfolio), Kentucky
Tax Free Portfolio (Kentucky Portfolio), Louisiana Tax Free Portfolio (Louisiana
Portfolio), Maryland Tax Free Portfolio (Maryland Portfolio), Missouri Tax Free
Portfolio (Missouri Portfolio), North Carolina Tax Free Portfolio (North
Carolina Portfolio), Oregon Tax Free Portfolio (Oregon Portfolio), South
Carolina Tax Free Portfolio (South Carolina Portfolio), Tennessee Tax Free
Portfolio (Tennessee Portfolio) and Virginia Tax Free Portfolio (Virginia
Portfolio), collectively the Portfolios, are registered under the Investment
Company Act of 1940 as non-diversified open-end management investment companies
which were organized as trusts under the laws of the State of New York on May 1,
1992. The Declarations of Trust permit the Trustees to issue interests in the
Portfolios. The following is a summary of significant accounting policies of the
Portfolios. The policies are in conformity with generally accepted accounting
principles.
A. INVESTMENT VALUATIONS--Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Futures contracts listed on commodity
exchanges are valued at closing settlement prices. Short-term obligations,
maturing in sixty days or less, are valued at amortized cost, which approximates
value. Investments for which valuations or market quotations are unavailable are
valued at fair value using methods determined in good faith by or at the
direction of the Trustees.
B. INCOME--Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes.
C. INCOME TAXES--The Portfolios are treated as partnerships for Federal tax
purposes. No provision is made by the Portfolios for federal or state taxes on
any taxable income of the Portfolios because each investor in the Portfolio is
ultimately responsible for the payment of any taxes. Since some of the
Portfolios' investors are regulated investment companies that invest all or
substantially all of their assets in the Portfolios, the Portfolios normally
must satisfy the applicable source of income and diversification requirements
(under the Internal Revenue Code) in order for their respective investors to
satisfy them. The Portfolios will allocate at least annually among their
respective investors each investor's distributive share of the Portfolios' net
taxable (if any) and tax-exempt investment income, net realized capital gains,
and any other items of income, gain, loss, deductions or credit. Interest income
received by the Portfolios on investments in municipal bonds, which is
excludable from gross income under the Internal Revenue Code, will retain its
status as income exempt from federal income tax when allocated to each
Portfolio's investors. The portion of such interest, if any, earned on private
activity bonds issued after August 7, 1986, may be considered a tax preference
item for investors.
D. DEFERRED ORGANIZATION EXPENSES--Costs incurred by a Portfolio in connection
with its organization are being amortized on the straight-line basis over five
years beginning on the date each Portfolio commenced operations.
E. FINANCIAL FUTURES CONTRACTS--Upon the entering of a financial futures
contract, a Portfolio is required to deposit ("initial margin") either in cash
or securities an amount equal to a certain percentage of the purchase price
indicated in the financial futures contract. Subsequent payments are made or
received by a Portfolio ("margin maintenance") each day, dependent on the daily
fluctuations in the value of the underlying security, and are recorded for book
purposes as unrealized gains or losses by a Portfolio. A Portfolio's investment
in financial futures contracts is designed only to hedge against anticipated
future changes in interest rates. Should interest rates move unexpectedly, a
Portfolio may not achieve the anticipated benefits of the financial futures
contract and may realize a loss.
F. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Portfolios may engage in
when-issued or delayed delivery transactions. The Portfolios record when-issued
securities on trade date and maintain security positions such that sufficient
liquid assets will be available to make payment for the securities purchased.
Securities purchased on a when-issued or delayed delivery basis are
marked-to-market daily and begin accruing interest on settlement date.
G. OTHER--Investment transactions are accounted for on a trade date basis.
92
<PAGE> 49
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee is earned by Boston Management and Research (BMR), a
wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation for
management and investment advisory services rendered to each Portfolio.
The fee is based upon a percentage of average daily net assets plus a percentage
of gross income (i.e., income other than gains from the sale of securities).
For the year ended August 31, 1995, each Portfolio paid advisory fees as
follows:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT EFFECTIVE RATE*
--------------------------------- -------- ---------------
<S> <C> <C>
Alabama $466,320 0.40%
Arkansas 296,231 0.37%
Georgia 521,159 0.41%
Kentucky 595,483 0.42%
Louisiana 73,471 0.23%
Maryland 459,907 0.40%
Missouri 353,176 0.38%
North Carolina 851,448 0.44%
Oregon 609,837 0.42%
South Carolina 198,498 0.33%
Tennessee 177,788 0.31%
Virginia 834,074 0.44%
</TABLE>
* Advisory fees paid as a percentage of average daily net assets.
To enhance the net income of the Louisiana Portfolio, BMR made a partial
reduction in its fee in the amount of $36,188 for the year ended August 31,
1995.
Except as to Trustees of the Portfolios who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services to
the Portfolios out of such investment adviser fee. Investors Bank & Trust
Company (IBT), an affiliate of EVM and BMR, serves as custodian of the
Portfolios. Pursuant to the custodian agreements, IBT receives a fee reduced by
credits which are determined based on the average daily cash balances each
Portfolio maintains with IBT. Certain of the officers and Trustees of the
Portfolios are officers and directors/trustees of the above organizations.
Trustees of the Portfolios that are not affiliated with the Investment Adviser
may elect to defer receipt of all or a percentage of their annual fees in
accordance with the terms of the Trustees Deferred Compensation Plan. For the
year ended August 31, 1995, no significant amounts have been deferred.
- --------------------------------------------------------------------------------
(3) INVESTMENTS
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, for the year ended August 31, 1995 were as follows:
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
------------------- ------------------------ ------------------- ------------------------
<S> <C> <C> <C> <C>
Purchases $57,406,180 $18,763,229 $59,548,573 $42,276,757
Sales 61,142,289 21,156,422 74,913,164 47,472,754
</TABLE>
<TABLE>
<CAPTION>
LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
------------------- ------------------------ ------------------- ------------------------
<S> <C> <C> <C> <C>
Purchases $15,588,103 $33,410,454 $22,283,879 $63,087,915
Sales 15,182,545 38,920,632 26,604,957 70,378,217
</TABLE>
<TABLE>
<CAPTION>
OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
------------------- ------------------------ ------------------- ------------------------
<S> <C> <C> <C> <C>
Purchases $31,234,927 $45,794,201 $12,215,128 $66,007,726
Sales 39,597,788 45,177,886 10,940,645 73,486,977
</TABLE>
93
<PAGE> 50
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(4) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in value of the investments
owned by each Portfolio at August 31, 1995, as computed on a federal income tax
basis, are as follows:
<TABLE>
<CAPTION>
ALABAMA ARKANSAS GEORGIA KENTUCKY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Aggregate Cost $112,610,415 $79,275,204 $115,913,957 $141,197,528
------------ ------------ ------------ ------------
Gross unrealized
appreciation $ 4,365,636 $ 2,221,739 $ 3,989,210 $ 4,126,437
Gross unrealized
depreciation 496,195 677,082 559,835 2,118,720
------------ ------------ ------------ ------------
Net unrealized
appreciation $ 3,869,441 $ 1,544,657 $ 3,429,375 $ 2,007,717
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Aggregate Cost $33,349,873 $112,178,823 $88,354,959 $183,382,988
----------- ------------ ----------- ------------
Gross unrealized
appreciation $ 705,823 $ 3,928,104 $ 3,711,528 $ 8,278,474
Gross unrealized
depreciation 444,912 1,955,206 436,068 997,317
----------- ------------ ----------- ------------
Net unrealized
appreciation $ 260,911 $ 1,972,898 $ 3,275,460 $ 7,281,157
=========== ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ -------------- ------------ ------------
<S> <C> <C> <C> <C>
Aggregate Cost $143,369,782 $60,604,156 $57,120,750 $179,383,019
------------ ----------- ----------- ------------
Gross unrealized
appreciation $ 4,380,388 $ 2,552,611 $ 1,185,756 $ 8,251,752
Gross unrealized
depreciation 1,731,019 208,500 656,768 857,590
------------ ----------- ----------- ------------
Net unrealized
appreciation $ 2,649,369 $ 2,344,111 $ 528,988 $ 7,394,162
============ =========== =========== ============
</TABLE>
94
<PAGE> 51
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(5) LINE OF CREDIT
The Portfolios participate with other portfolios and funds managed by BMR and
EVM in a $120 million unsecured line of credit agreement with a bank. The line
of credit consists of a $20 million committed facility and a $100 million
discretionary facility. Each Portfolio may temporarily borrow up to 5% of its
total assets to satisfy redemption requests or settle transactions. Interest is
charged to each portfolio or fund based on its borrowings at an amount above
either the bank's adjusted certificate of deposit rate, a variable adjusted
certificate of deposit rate, or a federal funds effective rate. In addition, a
fee computed at an annual rate of 1/4 of 1% on the $20 million committed
facility and on the daily unused portion of the $100 million discretionary
facility is allocated among the participating funds and portfolios at the end of
each quarter. At August 31, 1995, the Alabama Portfolio, Arkansas Portfolio,
Maryland Portfolio, Missouri Portfolio and Virginia Portfolio had balances
outstanding pursuant to this line of credit of $103,000, $444,000, $603,000,
$524,000 and $795,000, respectively. For the Louisiana Portfolio the average
daily loan balance for the year ended August 31, 1995 was $526,873 and the
average daily interest rate was 7.17%. The maximum borrowings during the year
ended August 31, 1995 was $1,803,000. The Portfolios, exclusive of the Louisiana
Portfolio, did not have any significant borrowings or allocated fees during the
year ended August 31, 1995.
- --------------------------------------------------------------------------------
(6) FINANCIAL INSTRUMENTS
The Portfolios regularly trade in financial instruments with off-balance sheet
risk in the normal course of their investing activities to assist in managing
exposure to various market risks. These financial instruments include written
options and futures contracts and may involve, to a varying degree, elements of
risk in excess of the amounts recognized for financial statement purposes.
The notional or contractual amounts of these instruments represent the
investment a Portfolio has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
A summary of obligations under these financial instruments at August 31, 1995 is
as follows:
<TABLE>
<CAPTION>
FUTURES CONTRACTS NET UNREALIZED
PORTFOLIO EXPIRATION DATE CONTRACTS POSITION DEPRECIATION
- ---------------- ----------------- ------------------------ -------- --------------
<S> <C> <C> <C> <C>
Alabama 12/95 112 U.S. Treasury Bonds Short $ 63,034
Arkansas 12/95 120 U.S. Treasury Bonds Short 45,023
Kentucky 12/95 140 U.S. Treasury Bonds Short 78,791
Louisiana 12/95 20 U.S. Treasury Bonds Short 15,251
Maryland 12/95 112 U.S. Treasury Bonds Short 63,033
Oregon 12/95 54 U.S. Treasury Bonds Short 38,857
Tennessee 12/95 48 U.S. Treasury Bonds Short 34,539
</TABLE>
At August 31, 1995 each Portfolio had sufficient cash and/or securities to cover
margin requirements on open futures contracts.
The Georgia Portfolio, Missouri Portfolio, North Carolina Portfolio, South
Carolina Portfolio and Virginia Portfolio had no obligations outstanding at
August 31, 1995.
- --------------------------------------------------------------------------------
(7) CHANGE IN FISCAL YEAR
The Portfolios changed their fiscal year end from September 30, to August 31,
effective August 31, 1994.
95
<PAGE> 52
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
TO THE TRUSTEES AND INVESTORS OF:
ALABAMA TAX FREE PORTFOLIO
ARKANSAS TAX FREE PORTFOLIO
GEORGIA TAX FREE PORTFOLIO
KENTUCKY TAX FREE PORTFOLIO
LOUISIANA TAX FREE PORTFOLIO
MARYLAND TAX FREE PORTFOLIO
MISSOURI TAX FREE PORTFOLIO
NORTH CAROLINA TAX FREE PORTFOLIO
OREGON TAX FREE PORTFOLIO
SOUTH CAROLINA TAX FREE PORTFOLIO
TENNESSEE TAX FREE PORTFOLIO
VIRGINIA TAX FREE PORTFOLIO
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Alabama Tax Free Portfolio, Arkansas Tax Free
Portfolio, Georgia Tax Free Portfolio, Kentucky Tax Free Portfolio, Louisiana
Tax Free Portfolio, Maryland Tax Free Portfolio, Missouri Tax Free Portfolio,
North Carolina Tax Free Portfolio, Oregon Tax Free Portfolio, South Carolina Tax
Free Portfolio, Tennessee Tax Free Portfolio and Virginia Tax Free Portfolio as
of August 31, 1995, and the related statements of operations for the year then
ended, the statements of changes in net assets and the supplementary data for
the years ended August 31, 1995 and 1994 and the year ended September 30, 1993.
These financial statements and supplementary data are the responsibility of the
Trusts' management. Our responsibility is to express an opinion on the financial
statements and supplementary data based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at August
31, 1995, by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other audit procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and supplementary data present fairly,
in all material respects, the financial position of Alabama Tax Free Portfolio,
Arkansas Tax Free Portfolio, Georgia Tax Free Portfolio, Kentucky Tax Free
Portfolio, Louisiana Tax Free Portfolio, Maryland Tax Free Portfolio, Missouri
Tax Free Portfolio, North Carolina Tax Free Portfolio, Oregon Tax Free
Portfolio, South Carolina Tax Free Portfolio, Tennessee Tax Free Portfolio and
Virginia Tax Free Portfolio at August 31, 1995, the results of their operations,
the changes in their net assets and their supplementary data for the respective
stated periods in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
BOSTON, MASSACHUSETTS
SEPTEMBER 29, 1995
96
<PAGE> 53
- --------------------------------------------------------------------------------
Investment Management
- --------------------------------------------------------------------------------
FUNDS OFFICERS INDEPENDENT TRUSTEES
THOMAS J. FETTER DONALD R. DWIGHT
President President, Dwight Partners, Inc.
Chairman, Newspapers of New
JAMES B. HAWKES England, Inc.
Vice President, Trustee
SAMUEL L. HAYES, III
ROBERT B. MACINTOSH Jacob H. Schiff Professor of
Vice President Investment Banking,
Harvard University Graduate
JAMES L. O'CONNOR School of Business
Treasurer Administration
THOMAS OTIS NORTON H. REAMER
Secretary President and Director, United
Asset Management Corporation
JOHN L. THORNDIKE
Director, Fiduciary Company
Incorporated
JACK L. TREYNOR
Investment Adviser and
Consultant
- --------------------------------------------------------------------------------
PORTFOLIOS OFFICERS INDEPENDENT TRUSTEES
THOMAS J. FETTER DONALD R. DWIGHT
President President, Dwight Partners, Inc.
Chairman, Newspapers of New
JAMES B. HAWKES England, Inc.
Vice President, Trustee
SAMUEL L. HAYES, III
ROBERT B. MACINTOSH Jacob H. Schiff Professor of
Vice President of Alabama, Investment Banking, Harvard
Arkansas, Georgia, Kentucky, University Graduate School of
Louisiana, Maryland, Missouri, Business Administration
North Carolina, Oregon, South
Carolina, Tennessee and NORTON H. REAMER
Virginia Tax Free Portfolios President and Director, United
Asset Management Corporation
NICOLE ANDERES
Vice President and Portfolio JOHN L. THORNDIKE
Manager of Louisiana Tax Director, Fiduciary Company
Free Portfolios Incorporated
TIMOTHY T. BROWSE JACK L. TREYNOR
Vice President and Portfolio Investment Adviser and
Manager of Alabama, Arkansas, Consultant
Kentucky and Maryland
Tax Free Portfolios
CYNTHIA J. CLEMSON
Vice President and Portfolio
Manager of Missouri, Oregon
and Tennessee Tax Free
Portfolios
DAVID C. REILLY
Vice President and Portfolio
Manager of Georgia, North
Carolina, South Carolina and
Virginia Tax Free Portfolios
97
<PAGE> 54
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INVESTMENT ADVISER
Boston Management and Research
24 Federal Street
Boston, MA 02110
FUND ADMINISTRATOR
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
98
