<PAGE>
[NORTHERN FUNDS LOGO]-Registered Trademark-
U.S. GOVERNMENT FUND
SHORT-INTERMEDIATE U.S. GOVERNMENT FUND
INTERMEDIATE TAX-EXEMPT FUND
CALIFORNIA INTERMEDIATE TAX-EXEMPT FUND
FLORIDA INTERMEDIATE TAX-EXEMPT FUND
FIXED INCOME FUND
TAX-EXEMPT FUND
ARIZONA TAX-EXEMPT FUND
CALIFORNIA TAX-EXEMPT FUND
GLOBAL FIXED INCOME FUND
HIGH YIELD MUNICIPAL FUND
HIGH YIELD FIXED INCOME FUND
--------------------------------------------------------------------------------
FIXED INCOME SEMIANNUAL
--------------------------------------------------------------------------------
[GRAPHIC PHOTO OF ABACUS]
[GRAPHIC PHOTO OF GEARS]
[GRAPHIC PHOTO OF STONES]
September 30, 2000
<PAGE>
NORTHERN FIXED INCOME FUNDS OVERVIEW
After a multi-year period of rapid economic growth, the economy exhibited signs
of slower growth over the past six months. As this evidence accumulated,
government interest rates from 2-year to 5-year maturities declined roughly 75
basis points. With yields in this maturity spectrum now approximately 6 percent,
such securities are now a full one-half of one percent lower than the overnight
lending rate of 6.50 percent. The rapid rise in oil prices, tight labor markets,
and the decline in the Euro triggered some moderate fears of an increase in
inflation, causing longer maturity government bonds to decline slightly less.
Looking ahead, contemporaneous economic data, leading indicators and the
behavior of stock indices all point to our central scenario in which a soft
landing is achieved. A harder landing is hinted at by the performance of
corporate bond markets, both investment grade and high yield, and the punishment
meted out by the equity markets to those stocks failing to achieve expected
earnings. Some commentators have drawn parallels between the present situation
and the events of the fall of 1998. However, we do not think history is about to
repeat itself with Fed easings. The tightening of bank lending standards and
rise in credit risk premia is the desired consequence of the Fed's monetary
policy over the past eighteen months. Unlike 1998, there is little evidence of a
generalized liquidity crisis as the market for lower-rated, short-term paper
remains open for business, fears of systemic risk are absent, and growth in
Japan and Europe is better supported. In short, neither domestic liquidity
conditions nor the external growth environment resemble the crisis conditions
which precipitated Fed easing two years ago.
We believe that the Fed would need more convincing evidence of a durable
economic slowdown and easing inflationary pressures before contemplating cutting
rates. Signs that the tight labor market is easing and a dampening in still
buoyant consumer spending are necessary conditions in this regard. In the
absence of such signals, we believe that the market is premature in discounting
an ease early next year. However, we are maintaining neutral durations as,
cognizant of stock market signals, our main risk scenario involves a slowdown of
growth beyond the Fed's desired intentions.
Slowing growth does heighten the challenges facing corporate entities. With
softer corporate earnings, rising default rates and the unrelenting need for
companies to raise and spend capital to compete in the new economy, corporate
bond market performance has been a laggard all year. Specific risk is unusually
high as evidenced by the speed with which bond prices drop to so-called
"distressed" levels. It is our contention that these events have been adequately
priced into corporate bonds. What we think has been overdone is the market's
expectation of economic growth slowing to a point where systemic--as opposed to
specific--credit risk dramatically worsens. Consequently, we will look at
selectively increasing corporate credit risk, focusing on higher quality,
defensive sectors and issuers. In particular, the municipal sector is one area
that is attractive and has the added benefit of providing refuge from some of
the challenges buffeting the corporate sector.
<PAGE>
TABLE OF CONTENTS PAGE
Abbreviations and Other Information ......................................... 1
Statements of Assets and Liabilities ...................................... 2
Statements of Operations .................................................. 4
Statements of Changes in Net Assets ....................................... 6
Financial Highlights ..................................................... 10
Schedules of Investments
U.S. Government Fund ................................................... 17
Short-Intermediate U.S. Government Fund ................................ 18
Intermediate Tax-Exempt Fund ........................................... 19
California Intermediate Tax-Exempt Fund ................................ 27
Florida Intermediate Tax-Exempt Fund ................................... 30
Fixed Income Fund ...................................................... 33
Tax-Exempt Fund ........................................................ 36
Arizona Tax-Exempt Fund ................................................ 43
California Tax-Exempt Fund ............................................. 45
Global Fixed Income Fund ............................................... 49
High Yield Municipal Fund .............................................. 51
High Yield Fixed Income Fund ........................................... 55
Notes to the Financial Statements .......................................... 59
<PAGE>
ABBREVIATIONS AND OTHER INFORMATION
With respect to the Schedules of Investments, the percentage shown for each
investment category reflects the value of investments in that category as a
percentage of total net assets.
Interest rates represent either the stated coupon rate, annualized yield on date
of purchase for discounted notes, or, for floating rate securities, the current
reset rate.
Maturity dates represent the stated date on the security, the next interest
reset date or next putable dates for floating rate securities or the prerefunded
date for these types of securities.
Prerefunding is a procedure in which a bond issuer floats a second bond in order
to pay off the first bond at the first call date. The proceeds from the sale of
the second bond are safely invested, usually in Treasury securities, that will
mature at the first call date of the first bond issue. Those first bonds are
said to be prerefunded after this operation has taken place.
EXPLANATION OF ABBREVIATIONS USED THROUGHOUT THE SCHEDULES OF INVESTMENTS
ACA American Capital Access
AMBAC American Municipal Bond Assurance Corp.
AMT Alternative Minimum Tax
COLLD. Collateralized
COP Certificate of Participation
CVP Central Valley Project
FGIC Financial Guaranty Insurance Corp.
FHA Federal Housing Authority
FHLB Federal Home Loan Bank
FHLMC Freddie Mac
FNMA Fannie Mae
FRN Floating Rate Note
FSA Financial Security Assurance
GIC Guaranteed Investment Contract
GNMA Government National Mortgage Association
G.O. General Obligation
Gtd. Guaranteed
I.O. Interest Only Stripped Security
IDA Industrial Development Authority
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
MTN Medium Term Notes
PCR Pollution Control Revenue
PFA Public Finance Authority
PSF Permanent School Fund
RAN Revenue Anticipation Notes
REMIC Real Estate Mortgage Investment Conduit
SFM Single Family Mortgage
TAN Tax Anticipation Notes
TRB Tax Revenue Bonds
* Non-Income Producing Security
------------------
NOT FDIC-INSURED
------------------
May lose value
No bank guarantee
------------------
An investment in Northern Funds is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency.
An investment in a non-money market fund involves risks including possible loss
of principal.
Shares of Northern Funds are distributed by Northern Funds Distributors, LLC, an
independent third party.
1
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 2000 (UNAUDITED)
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
SHORT- CALIFORNIA
U.S. INTERMEDIATE INTERMEDIATE INTERMEDIATE
AMOUNTS IN THOUSANDS, GOV'T. U.S. GOV'T. TAX-EXEMPT TAX-EXEMPT
EXCEPT PER SHARE DATA FUND FUND FUND FUND
--------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (cost $342,196, $69,169, $661,044,
$91,144, $41,563, $703,379, $513,091, $69,723, $128,881,
$18,378, $27,269 and $201,683, respectively) $336,315 $68,959 $660,974 $93,591
Cash and foreign currencies 8 158 -- --
Income receivable 2,813 1,021 8,863 1,163
Receivable for securities sold -- -- 2,521 --
Receivable from Adviser 8 3 16 3
Prepaid and other assets 9 6 4 4
----------------------------------------------------------------------------------------------------------------------------------
Total Assets 339,153 70,147 672,378 94,761
----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 243 54 395 52
Payable for securities purchased -- -- 10,011 7,578
Accrued investment advisory fees 42 8 76 10
Accrued administration fees 8 2 16 2
Accrued custody and accounting fees 1 -- 1 --
Accrued transfer agent fees 6 1 11 1
Accrued registration fees and other liabilities 20 15 35 20
----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 320 80 10,545 7,663
----------------------------------------------------------------------------------------------------------------------------------
Net Assets $338,833 $70,067 $661,833 $87,098
----------------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS:
Capital stock $346,640 $70,993 $664,849 $84,736
Undistributed (distributions in
excess of) net investment income 455 -- 77 --
Accumulated net realized losses on investments
and foreign currency transactions (2,381) (716) (3,023) (85)
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions (5,881) (210) (70) 2,447
Net unrealized losses on translation of assets and
liabilities denominated in foreign currencies -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Net Assets $338,833 $70,067 $661,833 $87,098
----------------------------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING ($.0001 PAR VALUE,
UNLIMITED AUTHORIZATION) 34,321 7,021 65,884 8,546
NET ASSET VALUE, REDEMPTION AND
OFFERING PRICE PER SHARE $9.87 $9.98 $10.05 $10.19
----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
FLORIDA
INTERMEDIATE
AMOUNTS IN THOUSANDS, TAX-EXEMPT
EXCEPT PER SHARE DATA FUND
--------------------- ----
<S> <C>
ASSETS:
Investments, at value (cost $342,196, $69,169, $661,044,
$91,144, $41,563, $703,379, $513,091, $69,723, $128,881,
$18,378, $27,269 and $201,683, respectively) $41,473
Cash and foreign currencies --
Income receivable 616
Receivable for securities sold 985
Receivable from Adviser 2
Prepaid and other assets 10
--------------------------------------------------------------------------------
Total Assets 43,086
--------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 24
Payable for securities purchased 1,088
Accrued investment advisory fees 5
Accrued administration fees 1
Accrued custody and accounting fees --
Accrued transfer agent fees 1
Accrued registration fees and other liabilities 17
--------------------------------------------------------------------------------
Total Liabilities 1,136
--------------------------------------------------------------------------------
Net Assets $41,950
--------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS:
Capital stock $42,523
Undistributed (distributions in
excess of) net investment income --
Accumulated net realized losses on investments
and foreign currency transactions (483)
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions (90)
Net unrealized losses on translation of assets and
liabilities denominated in foreign currencies --
--------------------------------------------------------------------------------
Net Assets $41,950
--------------------------------------------------------------------------------
SHARES OUTSTANDING ($.0001 PAR VALUE,
UNLIMITED AUTHORIZATION) 4,129
NET ASSET VALUE, REDEMPTION AND
OFFERING PRICE PER SHARE $10.16
--------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
2
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
FIXED ARIZONA CALIFORNIA
AMOUNTS IN THOUSANDS, INCOME TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT
EXCEPT PER SHARE DATA FUND FUND FUND FUND
--------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (cost $342,196, $69,169, $661,044,
$91,144, $41,563, $703,379, $513,091, $69,723, $128,881,
$18,378, $27,269 and $201,683, respectively) $697,747 $523,295 $70,605 $130,425
Cash and foreign currencies 3 -- -- --
Income receivable 6,466 7,788 992 1,687
Receivable for securities sold -- 1,723 -- --
Receivable from Adviser 16 12 3 4
Prepaid and other assets 19 3 6 2
-----------------------------------------------------------------------------------------------------------------------------------
Total Assets 704,251 532,821 71,606 132,118
-----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 584 342 41 80
Payable for securities purchased 4,555 11,436 2,518 2,336
Accrued investment advisory fees 86 60 8 15
Accrued administration fees 17 13 2 3
Accrued custody and accounting fees -- 5 2 --
Accrued transfer agent fees 11 8 1 2
Accrued registration fees and other liabilities 40 21 17 18
-----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 5,293 11,885 2,589 2,454
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets $698,958 $520,936 $69,017 $129,664
-----------------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS:
Capital stock $721,111 $518,799 $68,203 $129,224
Undistributed (distributions in
excess of) net investment income (179) (66) -- --
Accumulated net realized losses on investments
and foreign currency transactions (16,342) (8,001) (68) (1,104)
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions (5,632) 10,204 882 1,544
Net unrealized losses on translation of assets and
liabilities denominated in foreign currencies -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets $698,958 $520,936 $69,017 $129,664
-----------------------------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING ($.0001 PAR VALUE,
UNLIMITED AUTHORIZATION) 71,765 51,443 6,790 12,263
NET ASSET VALUE, REDEMPTION AND
OFFERING PRICE PER SHARE $9.74 $10.13 $10.16 $10.57
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
GLOBAL HIGH HIGH
FIXED YIELD YIELD
AMOUNTS IN THOUSANDS, INCOME MUNICIPAL FIXED INCOME
EXCEPT PER SHARE DATA FUND FUND FUND
--------------------- ---- ---- ----
<S> <C> <C> <C>
ASSETS:
Investments, at value (cost $342,196, $69,169, $661,044,
$91,144, $41,563, $703,379, $513,091, $69,723, $128,881,
$18,378, $27,269 and $201,683, respectively) $17,709 $26,336 $188,137
Cash and foreign currencies 1,807 1 1
Income receivable 330 486 5,657
Receivable for securities sold 8 269 6,399
Receivable from Adviser 2 2 5
Prepaid and other assets 5 3 8
-----------------------------------------------------------------------------------------------------------------
Total Assets 19,861 27,097 200,207
-----------------------------------------------------------------------------------------------------------------
LIABILITIES:
Dividends payable -- 20 292
Payable for securities purchased 1,105 -- 6,829
Accrued investment advisory fees 3 3 24
Accrued administration fees 1 1 5
Accrued custody and accounting fees -- 9 --
Accrued transfer agent fees -- -- 3
Accrued registration fees and other liabilities 15 16 16
-----------------------------------------------------------------------------------------------------------------
Total Liabilities 1,124 49 7,169
-----------------------------------------------------------------------------------------------------------------
Net Assets $18,737 $27,048 $193,038
-----------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS:
Capital stock $20,674 $28,642 $211,569
Undistributed (distributions in
excess of) net investment income (681) -- --
Accumulated net realized losses on investments
and foreign currency transactions (583) (661) (4,985)
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions (661) (933) (13,546)
Net unrealized losses on translation of assets and
liabilities denominated in foreign currencies (12) -- --
-----------------------------------------------------------------------------------------------------------------
Net Assets $18,737 $27,048 $193,038
-----------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING ($.0001 PAR VALUE,
UNLIMITED AUTHORIZATION) 2,032 3,000 21,779
NET ASSET VALUE, REDEMPTION AND
OFFERING PRICE PER SHARE $9.22 $9.02 $8.86
-----------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
STATEMENTS OF OPERATIONS SIX MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
SHORT- CALIFORNIA
U.S. INTERMEDIATE INTERMEDIATE INTERMEDIATE
GOV'T. U.S. GOV'T. TAX-EXEMPT TAX-EXEMPT
AMOUNTS IN THOUSANDS FUND FUND FUND FUND
--------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $10,435 $2,237 $16,817 $2,320
-----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 1,288 253 2,508 333
Administration fees 257 51 502 67
Transfer agent fees 172 34 334 44
Custody and accounting fees 49 23 86 26
Professional fees 6 1 14 1
Registration fees 30 13 48 17
Trustees' fees and expenses 3 1 8 2
Other 15 5 23 5
-----------------------------------------------------------------------------------------------------------------------------------
Total Expenses 1,820 381 3,523 495
Less voluntary waivers of
investment advisory fees -- -- (167) (22)
Less reimbursement of expenses by Adviser (275) (77) (514) (96)
-----------------------------------------------------------------------------------------------------------------------------------
Net Expenses 1,545 304 2,842 377
-----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 8,890 1,933 13,975 1,943
-----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gains (losses) on:
Investments (225) (296) (688) (109)
Foreign currency transactions -- -- -- --
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 5,607 921 8,636 1,593
Net change in unrealized losses on translation
of assets and liabilities denominated in
foreign currencies -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments 5,382 625 7,948 1,484
-----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $14,272 $2,558 $21,923 $3,427
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
FLORIDA
INTERMEDIATE
TAX-EXEMPT
AMOUNTS IN THOUSANDS FUND
--------------------- ----
<S> <C>
INVESTMENT INCOME:
Interest income $1,067
------------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 155
Administration fees 31
Transfer agent fees 21
Custody and accounting fees 20
Professional fees 3
Registration fees 15
Trustees' fees and expenses --
Other 3
------------------------------------------------------------------------------------
Total Expenses 248
Less voluntary waivers of
investment advisory fees (10)
Less reimbursement of expenses by Adviser (62)
------------------------------------------------------------------------------------
Net Expenses 176
------------------------------------------------------------------------------------
NET INVESTMENT INCOME 891
------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gains (losses) on:
Investments 264
Foreign currency transactions --
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 128
Net change in unrealized losses on translation
of assets and liabilities denominated in
foreign currencies --
------------------------------------------------------------------------------------
Net Gains (Losses) on Investments 392
------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $1,283
------------------------------------------------------------------------------------
</TABLE>
SEEE NOTES TO THE FINANCIAL STATEMENTS.
4
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
FIXED ARIZONA CALIFORNIA
INCOME TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT
AMOUNTS IN THOUSANDS FUND FUND FUND FUND
--------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $23,414 $14,811 $1,748 $3,332
-----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 2,508 1,952 248 468
Administration fees 502 390 50 94
Transfer agent fees 334 260 33 62
Custody and accounting fees 72 70 25 28
Professional fees 16 9 1 4
Registration fees 51 35 17 19
Trustees' fees and expenses 7 5 3 1
Other 21 16 5 7
-----------------------------------------------------------------------------------------------------------------------------------
Total Expenses 3,511 2,737 382 683
Less voluntary waivers of
investment advisory fees -- (130) (17) (31)
Less reimbursement of expenses by Adviser (502) (395) (84) (121)
-----------------------------------------------------------------------------------------------------------------------------------
Net Expenses 3,009 2,212 281 531
-----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 20,405 12,599 1,467 2,801
-----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gains (losses) on:
Investments (3,923) 2,975 215 (32)
Foreign currency transactions -- -- -- --
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 12,632 3,825 675 3,087
Net change in unrealized losses on translation
of assets and liabilities denominated in
foreign currencies -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments 8,709 6,800 890 3,055
-----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $29,114 $19,399 $2,357 $5,856
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
GLOBAL HIGH HIGH
FIXED YIELD YIELD
INCOME MUNICIPAL FIXED INCOME
AMOUNTS IN THOUSANDS FUND FUND FUND
--------------------- ---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income $496 $751 $10,350
-----------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment advisory fees 85 88 675
Administration fees 14 18 135
Transfer agent fees 9 12 90
Custody and accounting fees 33 22 25
Professional fees 3 3 3
Registration fees 15 14 17
Trustees' fees and expenses -- 1 2
Other 3 4 6
-----------------------------------------------------------------------------------------------------------------------
Total Expenses 162 162 953
Less voluntary waivers of
investment advisory fees -- (6) --
Less reimbursement of expenses by Adviser (54) (56) (143)
-----------------------------------------------------------------------------------------------------------------------
Net Expenses 108 100 810
-----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 388 651 9,540
-----------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gains (losses) on:
Investments 120 (310) (1,228)
Foreign currency transactions (689) -- --
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions (482) 344 (7,634)
Net change in unrealized losses on translation
of assets and liabilities denominated in
foreign currencies (16) -- --
-----------------------------------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments (1,067) 34 (8,862)
-----------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $(679) $685 $678
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
SHORT
U.S. INTERMEDIATE
GOVERNMENT U.S. GOV'T
FUND FUND
--------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED PERIOD
SEPT. 30, ENDED SEPT. 30, ENDED
2000 MARCH 31, 2000 MARCH 31,
AMOUNTS IN THOUSANDS (UNAUDITED) 2000 (UNAUDITED) 2000(1)
-------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $8,890 $15,048 $1,933 $1,691
Net realized gains (losses) on investments,
forward foreign currency contracts and
foreign currency transactions (225) (1,988) (296) (420)
Net change in unrealized appreciation
(depreciation) on investments and
forward foreign currency contracts 5,607 (7,317) 921 (236)
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 14,272 5,743 2,558 1,035
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 24,748 54,658 12,540 12,072
Shares issued upon conversion -- 112,138 -- 60,337
Shares from reinvestment of dividends 713 1,734 78 21
Shares redeemed (40,751) (78,206) (6,644) (8,306)
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Capital Share
Transactions (15,290) 90,324 5,974 64,124
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (8,890) (15,048) (1,933) (1,691)
From net realized gains -- (520) -- --
In excess of net realized gains -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (8,890) (15,568) (1,933) (1,691)
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (9,908) 80,499 6,599 63,468
NET ASSETS:
Beginning of year 348,741 268,242 63,468 --
-----------------------------------------------------------------------------------------------------------------------------------
End of period $338,833 $348,741 $70,067 $63,468
-----------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS IN
EXCESS OF) NET INVESTMENT INCOME $455 $455 $-- $--
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
INTERMEDIATE
TAX-EXEMPT
FUND
----------------------------
SIX MONTHS
ENDED YEAR
SEPT. 30, ENDED
2000 MARCH 31,
AMOUNTS IN THOUSANDS (UNAUDITED) 2000
-------------------- -----------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $13,975 $20,995
Net realized gains (losses) on investments,
forward foreign currency contracts and
foreign currency transactions (688) (2,249)
Net change in unrealized appreciation
(depreciation) on investments and
forward foreign currency contracts 8,636 (15,980)
---------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 21,923 2,766
---------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 32,848 97,338
Shares issued upon conversion -- 363,331
Shares from reinvestment of dividends 637 1,812
Shares redeemed (58,871) (109,074)
---------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Capital Share
Transactions (25,386) 353,407
---------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (13,975) (20,995)
From net realized gains -- --
In excess of net realized gains -- (696)
---------------------------------------------------------------------------------------------------
Total Distributions Paid (13,975) (21,691)
---------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (17,438) 334,482
NET ASSETS:
Beginning of year 679,271 344,789
---------------------------------------------------------------------------------------------------
End of period $661,833 $679,271
---------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS IN
EXCESS OF) NET INVESTMENT INCOME $77 $77
---------------------------------------------------------------------------------------------------
</TABLE>
(1) Commenced investment operations on October 1, 1999.
SEE NOTES TO THE FINANCIAL STATEMENTS.
6
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
CALIFORNIA FLORIDA
INTERMEDIATE INTERMEDIATE
TAX-EXEMPT TAX-EXEMPT
FUND FUND
----------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED PERIOD ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2000 MARCH 31, 2000 MARCH 31,
AMOUNTS IN THOUSANDS (UNAUDITED) 2000(1) (UNAUDITED) 2000
-------------------- ----------------------------- -----------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $1,943 $1,929 $891 $1,508
Net realized gains (losses) on investments,
forward foreign currency contracts and
foreign currency transactions (109) 24 264 (748)
Net change in unrealized appreciation
(depreciation) on investments and
forward foreign currency contracts 1,593 254 128 (620)
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 3,427 2,207 1,283 140
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 3,887 28,979 3,156 20,304
Shares issued upon conversion -- 79,836 -- --
Shares from reinvestment of dividends 81 105 141 395
Shares redeemed (10,824) (16,728) (3,715) (14,343)
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Capital Share
Transactions (6,856) 92,192 (418) 6,356
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (1,943) (1,929) (891) (1,508)
From net realized gains -- -- -- (133)
In excess of net realized gains -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (1,943) (1,929) (891) (1,641)
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (5,372) 92,470 (26) 4,855
NET ASSETS:
Beginning of year 92,470 -- 41,976 37,121
-----------------------------------------------------------------------------------------------------------------------------------
End of period $87,098 $92,470 $41,950 $41,976
-----------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS IN
EXCESS OF) NET INVESTMENT INCOME $-- $-- $-- $--
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
FIXED
INCOME
FUND
------------------------------
SIX MONTHS
ENDED YEAR
SEPT. 30, ENDED
2000 MARCH 31,
AMOUNTS IN THOUSANDS (UNAUDITED) 2000
-------------------- ------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $20,405 $26,022
Net realized gains (losses) on investments,
forward foreign currency contracts and
foreign currency transactions (3,923) (12,222)
Net change in unrealized appreciation
(depreciation) on investments and
forward foreign currency contracts 12,632 (4,337)
---------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 29,114 9,463
---------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 85,369 171,003
Shares issued upon conversion -- 293,695
Shares from reinvestment of dividends 1,558 4,430
Shares redeemed (40,112) (82,162)
---------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Capital Share
Transactions 46,815 386,966
---------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (20,405) (26,022)
From net realized gains -- (2,081)
In excess of net realized gains -- --
---------------------------------------------------------------------------------------------------
Total Distributions Paid (20,405) (28,103)
---------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 55,524 368,326
NET ASSETS:
Beginning of year 643,434 275,108
---------------------------------------------------------------------------------------------------
End of period $698,958 $643,434
---------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS IN
EXCESS OF) NET INVESTMENT INCOME $(179) $(179)
---------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
ARIZONA
TAX-EXEMPT TAX-EXEMPT
FUND FUND
---------------------------- ---------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED PERIOD
SEPT. 30, ENDED SEPT. 30, ENDED
2000 MARCH 31, 2000 MARCH 31,
AMOUNTS IN THOUSANDS (UNAUDITED) 2000 (UNAUDITED) 2000(1)
-------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $12,599 $17,380 $1,467 $1,265
Net realized gains (losses) on investments,
forward foreign currency contracts and
foreign currency transactions 2,975 (10,976) 215 (283)
Net change in unrealized appreciation
(depreciation) on investments and
forward foreign currency contracts 3,825 (3,289) 675 634
Net change in unrealized gains (losses)
on translation of assets and liabilities
denominated in foreign currencies -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 19,399 3,115 2,357 1,616
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 31,083 81,379 11,309 30,701
Shares issued upon conversion -- 327,321 -- 56,205
Shares from reinvestment of dividends 388 1,671 46 24
Shares redeemed (39,785) (100,597) (9,605) (20,904)
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Capital Share
Transactions (8,314) 309,774 1,750 66,026
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (12,599) (17,380) (1,467) (1,265)
From net realized gains -- (882) -- --
-----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (12,599) (18,262) (1,467) (1,265)
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,514) 294,627 2,640 66,377
NET ASSETS:
Beginning of year 522,450 227,823 66,377 --
-----------------------------------------------------------------------------------------------------------------------------------
End of period $520,936 $522,450 $69,017 $66,377
-----------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS IN
EXCESS OF) NET INVESTMENT INCOME $(66) $(66) $-- $--
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
CALIFORNIA
TAX-EXEMPT
FUND
---------------------------
SIX MONTHS
ENDED YEAR
SEPT. 30, ENDED
2000 MARCH 31,
AMOUNTS IN THOUSANDS (UNAUDITED) 2000
-------------------- ---------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $2,801 $4,312
Net realized gains (losses) on investments,
forward foreign currency contracts and
foreign currency transactions (32) (1,072)
Net change in unrealized appreciation
(depreciation) on investments and
forward foreign currency contracts 3,087 (2,706)
Net change in unrealized gains (losses)
on translation of assets and liabilities
denominated in foreign currencies -- --
---------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 5,856 534
---------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 12,850 32,875
Shares issued upon conversion -- 60,293
Shares from reinvestment of dividends 337 875
Shares redeemed (9,925) (44,000)
---------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Capital Share
Transactions 3,262 50,043
---------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (2,801) (4,312)
From net realized gains -- (167)
---------------------------------------------------------------------------------------------------
Total Distributions Paid (2,801) (4,479)
---------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 6,317 46,098
NET ASSETS:
Beginning of year 123,347 77,249
---------------------------------------------------------------------------------------------------
End of period $129,664 $123,347
---------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS IN
EXCESS OF) NET INVESTMENT INCOME $-- $--
---------------------------------------------------------------------------------------------------
</TABLE>
(1) Commenced investment operations on October 1, 1999.
SEE NOTES TO THE FINANCIAL STATEMENTS.
8
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
GLOBAL HIGH YIELD
FIXED INCOME MUNICIPAL
FUND FUND
---------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2000 MARCH 31, 2000 MARCH 31,
AMOUNTS IN THOUSANDS (UNAUDITED) 2000 (UNAUDITED) 2000
-------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $388 $712 $651 $829
Net realized gains (losses) on investments,
forward foreign currency contracts and
foreign currency transactions (569) (1,272) (310) (351)
Net change in unrealized appreciation
(depreciation) on investments and
forward foreign currency contracts (482) (436) 344 (1,266)
Net change in unrealized gains (losses)
on translation of assets and liabilities
denominated in foreign currencies (16) 14 -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations (679) (982) 685 (788)
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 2,554 5,161 7,278 16,128
Shares issued upon conversion -- 5,714 -- --
Shares from reinvestment of dividends -- 39 44 49
Shares redeemed (2,268) (4,572) (1,426) (3,468)
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Capital Share
Transactions 286 6,342 5,896 12,709
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income -- (515) (651) (836)
From net realized gains -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid -- (515) (651) (836)
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (393) 4,845 5,930 11,085
NET ASSETS:
Beginning of year 19,130 14,285 21,118 10,033
-----------------------------------------------------------------------------------------------------------------------------------
End of period $18,737 $19,130 $27,048 $21,118
-----------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS IN
EXCESS OF) NET INVESTMENT INCOME $(681) $(1,069) $-- $--
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
HIGH YIELD
FIXED INCOME
FUND
----------------------------
SIX MONTHS
ENDED YEAR
SEPT. 30, ENDED
2000 MARCH 31,
AMOUNTS IN THOUSANDS (UNAUDITED) 2000
-------------------- ----------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $9,540 $9,523
Net realized gains (losses) on investments,
forward foreign currency contracts and
foreign currency transactions (1,228) (3,757)
Net change in unrealized appreciation
(depreciation) on investments and
forward foreign currency contracts (7,634) (6,180)
Net change in unrealized gains (losses)
on translation of assets and liabilities
denominated in foreign currencies -- --
---------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 678 (414)
---------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 50,565 159,272
Shares issued upon conversion -- --
Shares from reinvestment of dividends 1,953 1,366
Shares redeemed (16,128) (25,996)
---------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Capital Share
Transactions 36,390 134,642
---------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (9,540) (9,582)
From net realized gains -- --
---------------------------------------------------------------------------------------------------
Total Distributions Paid (9,540) (9,582)
---------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 27,528 124,646
NET ASSETS:
Beginning of year 165,510 40,864
---------------------------------------------------------------------------------------------------
End of period $193,038 $165,510
---------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS IN
EXCESS OF) NET INVESTMENT INCOME $-- $--
---------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
FINANCIAL HIGHLIGHTS
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
U.S. GOVERNMENT
FUND
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR
SEPT. 30, ENDED ENDED ENDED
2000 MARCH 31, MARCH 31, MARCH 31,
(UNAUDITED) 2000 1999 1998
------------------------------------------------------ --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $9.72 $10.05 $10.20 $9.88
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.25 0.47 0.50 0.54
Net realized and unrealized gains
(losses) on investments, forward foreign
currency contracts and foreign currency
transactions 0.15 (0.32) 0.10 0.32
-----------------------------------------------------------------------------------------------------------------------------------
Total Income from Investment Operations 0.40 0.15 0.60 0.86
-----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.25) (0.47) (0.49) (0.53)
From net realized gains -- (0.01) (0.26) (0.01)
In excess of net realized gains -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (0.25) (0.48) (0.75) (0.54)
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.87 $9.72 $10.05 $10.20
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 4.20% 1.67% 6.01% 8.90%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $338,833 $348,741 $268,242 $229,352
Ratio to average net assets of (3):
Expenses, net of waivers
and reimbursements 0.90% 0.90% 0.90% 0.90%
Expenses, before waivers
and reimbursements 1.06% 1.07% 1.07% 1.07%
Net investment income, net of waivers
and reimbursements 5.18% 4.83% 4.73% 5.24%
Net investment income, before waivers
and reimbursements 5.02% 4.66% 4.56% 5.07%
Portfolio Turnover Rate 15.65% 30.56% 123.75% 47.41%
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
U.S. GOVERNMENT
FUND
---------------------------------
YEAR YEAR
ENDED ENDED
MARCH 31, MARCH 31,
1997 1996
------------------------------------------------------ ---------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $10.06 $9.84
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.51 0.51
Net realized and unrealized gains
(losses) on investments, forward foreign
currency contracts and foreign currency
transactions (0.11) 0.29
------------------------------------------------------------------------------------------
Total Income from Investment Operations 0.40 0.80
------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.51) (0.51)
From net realized gains (0.05) (0.07)
In excess of net realized gains (0.02) --
------------------------------------------------------------------------------------------
Total Distributions Paid (0.58) (0.58)
------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.88 $10.06
------------------------------------------------------------------------------------------
TOTAL RETURN(2) 3.98% 7.65%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $181,921 $149,062
Ratio to average net assets of (3):
Expenses, net of waivers
and reimbursements 0.90% 0.90%
Expenses, before waivers
and reimbursements 1.09% 1.10%
Net investment income, net of waivers
and reimbursements 5.19% 5.07%
Net investment income, before waivers
and reimbursements 5.00% 4.87%
Portfolio Turnover Rate 83.41% 112.00%
------------------------------------------------------------------------------------------
</TABLE>
(1) Commenced investment operations on October 1, 1999.
(2) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at net asset value at the end of the year. Total return
is not annualized for periods less than one year.
(3) Annualized for periods less than one year.
SEE NOTES TO THE FINANCIAL STATEMENTS.
10
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
SHORT-
INTERMEDIATE INTERMEDIATE
U.S. GOVERNMENT TAX-EXEMPT
FUND FUND
-------------------------------- ------------------------------------
SIX MONTHS SIX MONTHS
ENDED PERIOD ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2000 MARCH 31, 2000 MARCH 31,
(UNAUDITED) 2000(1) (UNAUDITED) 2000
------------------------------------------------------ -------------------------------- ------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $9.89 $10.00 $9.93 $10.36
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.29 0.27 0.21 0.39
Net realized and unrealized gains
(losses) on investments, forward foreign
currency contracts and foreign currency
transactions 0.09 (0.11) 0.12 (0.42)
-----------------------------------------------------------------------------------------------------------------------------------
Total Income from Investment Operations 0.38 0.16 0.33 (0.03)
-----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.29) (0.27) (0.21) (0.39)
From net realized gains -- -- -- (0.01)
In excess of net realized gains -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (0.29) (0.27) (0.21) (0.40)
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.98 $9.89 $10.05 $9.93
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 3.84% 1.76% 3.34% (0.14)%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $70,067 $63,468 $661,833 $679,271
Ratio to average net assets of (3):
Expenses, net of waivers
and reimbursements 0.90% 0.90% 0.85% 0.85%
Expenses, before waivers
and reimbursements 1.13% 1.24% 1.05% 1.06%
Net investment income, net of waivers
and reimbursements 5.74% 5.66% 4.18% 4.03%
Net investment income, before waivers
and reimbursements 5.51% 5.32% 3.98% 3.82%
Portfolio Turnover Rate 58.99% 45.44% 21.70% 68.69%
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
INTERMEDIATE
TAX-EXEMPT
FUND
--------------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1999 1998 1997 1996
------------------------------------------------------ --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $10.36 $10.07 $10.22 $10.03
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.39 0.40 0.40 0.41
Net realized and unrealized gains
(losses) on investments, forward foreign
currency contracts and foreign currency
transactions 0.11 0.29 (0.06) 0.26
-----------------------------------------------------------------------------------------------------------------------------------
Total Income from Investment Operations 0.50 0.69 0.34 0.67
-----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.39) (0.40) (0.40) (0.41)
From net realized gains (0.11) -- (0.07) (0.07)
In excess of net realized gains -- -- (0.02) --
-----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (0.50) (0.40) (0.49) (0.48)
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.36 $10.36 $10.07 $10.22
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 4.88% 6.95% 3.39% 6.81%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $344,789 $298,529 $264,630 $244,139
Ratio to average net assets of (3):
Expenses, net of waivers
and reimbursements 0.85% 0.85% 0.85% 0.85%
Expenses, before waivers
and reimbursements 1.06% 1.07% 1.07% 1.08%
Net investment income, net of waivers
and reimbursements 3.76% 3.84% 3.90% 4.01%
Net investment income, before waivers
and reimbursements 3.55% 3.62% 3.68% 3.78%
Portfolio Turnover Rate 54.03% 61.83% 61.39% 137.85%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
CALIFORNIA FLORIDA
INTERMEDIATE INTERMEDIATE
TAX-EXEMPT TAX-EXEMPT
FUND FUND
------------------------- ---------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED PERIOD ENDED YEAR YEAR YEAR
SEPT. 30, ENDED SEPT. 30, ENDED ENDED ENDED
2000 MARCH 31, 2000 MARCH 31, MARCH 31, MARCH 31,
(UNAUDITED) 2000(1) (UNAUDITED) 2000 1999 1998
----------------------------------------------- ------------- ----------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $10.02 $10.00 $10.07 $10.47 $10.47 $10.03
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.22 0.20 0.22 0.38 0.39 0.40
Net realized and unrealized gains (losses) on
investments, forward foreign currency
contracts and foreign currency transactions 0.17 0.02 0.09 (0.37) 0.16 0.44
--------------------------------------------------------------------------- ---------------------------------------------------
Total Income from Investment Operations 0.39 0.22 0.31 0.01 0.55 0.84
--------------------------------------------------------------------------- ---------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.22) (0.20) (0.22) (0.38) (0.39) (0.40)
From net realized gains -- -- -- (0.03) (0.16) --
In excess of net investment income -- -- -- -- -- --
In excess of net realized gains -- -- -- -- -- --
--------------------------------------------------------------------------- ---------------------------------------------------
Total Distributions Paid (0.22) (0.20) (0.22) (0.41) (0.55) (0.40)
--------------------------------------------------------------------------- ---------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.19 $10.02 $10.16 $10.07 $10.47 $10.47
--------------------------------------------------------------------------- ---------------------------------------------------
TOTAL RETURN(3) 3.94% 2.37% 3.08% 0.30% 5.38% 8.51%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $87,098 $92,470 $41,950 $41,976 $37,121 $25,329
Ratio to average net assets of (4):
Expenses, net of waivers and reimbursements 0.85% 0.85% 0.85% 0.85% 0.85% 0.85%
Expenses, before waivers and reimbursements 1.12% 1.16% 1.20% 1.24% 1.29% 1.41%
Net investment income, net of waivers
and reimbursements 4.38% 4.37% 4.31% 3.84% 3.67% 3.86%
Net investment income, before waivers
and reimbursements 4.11% 4.06% 3.96% 3.45% 3.23% 3.30%
Portfolio Turnover Rate 40.13% 31.29% 70.99% 133.01% 57.98% 46.12%
--------------------------------------------------------------------------- ---------------------------------------------------
<CAPTION>
PERIOD
ENDED
MARCH 31,
1997(2)
----------------------------------------------------- -----------
<S> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.24
Net realized and unrealized gains (losses) on
investments, forward foreign currency
contracts and foreign currency transactions 0.03
--------------------------------------------------------------------
Total Income from Investment Operations 0.27
--------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.24)
From net realized gains --
In excess of net investment income --
In excess of net realized gains --
--------------------------------------------------------------------
Total Distributions Paid (0.24)
--------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.03
--------------------------------------------------------------------
TOTAL RETURN(3) 2.63%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $14,807
Ratio to average net assets of (4):
Expenses, net of waivers and reimbursements 0.85%
Expenses, before waivers and reimbursements 2.31%
Net investment income, net of waivers
and reimbursements 3.84%
Net investment income, before waivers
and reimbursements 2.38%
Portfolio Turnover Rate 50.77%
--------------------------------------------------------------------
</TABLE>
(1) Commenced investment operations on October 1, 1999.
(2) Commenced investment operations on August 15, 1996.
(3) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at net asset value at the end of the year. Total return
is not annualized for periods less than one year.
(4) Annualized for periods less than a full year.
SEE NOTES TO THE FINANCIAL STATEMENTS.
12
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
FIXED
INCOME
FUND
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
SEPT. 30, ENDED ENDED ENDED ENDED ENDED
2000 MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
(UNAUDITED) 2000 1999 1998 1997 1996
----------------------------------------------------- ------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $9.62 $10.15 $10.42 $9.86 $10.10 $9.78
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.29 0.54 0.54 0.59 0.57 0.58
Net realized and unrealized gains (losses) on
investments, forward foreign currency
contracts and foreign currency transactions 0.12 (0.50) -- 0.56 (0.12) 0.50
-----------------------------------------------------------------------------------------------------------------------------------
Total Income from Investment Operations 0.41 0.04 0.54 1.15 0.45 1.08
-----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.29) (0.54) (0.54) (0.58) (0.56) (0.59)
From net realized gains -- (0.03) (0.27) (0.01) (0.10) (0.17)
In excess of net investment income -- -- -- -- (0.01) --
In excess of net realized gains -- -- -- -- (0.02) --
-----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (0.29) (0.57) (0.81) (0.59) (0.69) (0.76)
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.74 $9.62 $10.15 $10.42 $9.86 $10.10
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 4.39% 0.57% 5.18% 11.90% 4.59% 11.18%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $698,958 $643,434 $275,108 $181,917 $122,444 $101,339
Ratio to average net assets of (4):
Expenses, net of waivers and reimbursements 0.90% 0.90% 0.90% 0.90% 0.90% 0.90%
Expenses, before waivers and reimbursements 1.05% 1.06% 1.08% 1.09% 1.12% 1.14%
Net investment income, net of waivers
and reimbursements 6.10% 5.66% 5.15% 5.71% 5.69% 5.79%
Net investment income, before waivers
and reimbursements 5.95% 5.50% 4.97% 5.52% 5.47% 5.55%
Portfolio Turnover Rate 70.57% 105.70% 84.85% 33.55% 87.64% 116.22%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
TAX-EXEMPT
FUND
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
SEPT. 30, ENDED ENDED ENDED ENDED ENDED
2000 MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
(UNAUDITED) 2000 1999 1998 1997 1996
----------------------------------------------------- ------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $9.99 $10.63 $10.73 $10.24 $10.35 $10.08
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.24 0.45 0.45 0.47 0.50 0.48
Net realized and unrealized gains (losses) on
investments, forward foreign currency contracts
and foreign currency transactions 0.14 (0.62) 0.13 0.57 (0.06) 0.29
-----------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) from Investment Operations 0.38 (0.17) 0.58 1.04 0.44 0.77
-----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.24) (0.45) (0.45) (0.47) (0.47) (0.48)
From net realized gains -- (0.02) (0.23) (0.08) (0.05) (0.02)
In excess of net investment income -- -- -- -- (0.03) --
In excess of net realized gains -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (0.24) (0.47) (0.68) (0.55) (0.55) (0.50)
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.13 $9.99 $10.63 $10.73 $10.24 $10.35
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 3.88% (1.50)% 5.47% 10.39% 4.32% 7.80%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $520,936 $522,450 $227,823 $167,220 $136,372 $125,113
Ratio to average net assets of (4):
Expenses, net of waivers and reimbursements 0.85% 0.85% 0.85% 0.85% 0.85% 0.85%
Expenses, before waivers and reimbursements 1.05% 1.07% 1.08% 1.09% 1.10% 1.10%
Net investment income, net of waivers
and reimbursements 4.84% 4.63% 4.13% 4.42% 4.61% 4.62%
Net investment income, before waivers
and reimbursements 4.64% 4.41% 3.90% 4.18% 4.36% 4.37%
Portfolio Turnover Rate 59.89% 118.69% 140.39% 74.32% 8.10% 60.50%
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
ARIZONA
TAX-EXEMPT
FUND
-----------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, ENDED
2000 MARCH 31,
(UNAUDITED) 2000(1)
----------------------------------------------------- -----------------------
<S> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $10.03 $10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.22 0.20
Net realized and unrealized gains (losses) on
investments, forward foreign currency contracts
and foreign currency transactions 0.13 0.03
-------------------------------------------------------------------------------
Total Income (Loss) from Investment Operations 0.35 0.23
-------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.22) (0.20)
From net realized gains -- --
In excess of net investment income -- --
In excess of net realized gains -- --
-------------------------------------------------------------------------------
Total Distributions Paid (0.22) (0.20)
-------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.16 $10.03
-------------------------------------------------------------------------------
TOTAL RETURN(3) 3.57% 2.43%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $69,017 $66,377
Ratio to average net assets of (4):
Expenses, net of waivers and reimbursements 0.85% 0.85%
Expenses, before waivers and reimbursements 1.16% 1.23%
Net investment income, net of waivers
and reimbursements 4.44% 4.28%
Net investment income, before waivers
and reimbursements 4.13% 3.90%
Portfolio Turnover Rate 47.45% 29.85%
-------------------------------------------------------------------------------
</TABLE>
(1) Commenced investment operations on October 1, 1999.
(2) Commenced investment operations on April 8, 1997.
(3) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at net asset value at the end of the year. Total return
is not annualized for periods less than one year.
(4) Annualized for periods less than a full year.
SEE NOTES TO THE FINANCIAL STATEMENTS.
14
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
CALIFORNIA
TAX-EXEMPT
FUND
----------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR PERIOD
SEPT. 30, ENDED ENDED ENDED
2000 MARCH 31, MARCH 31, MARCH 31,
(UNAUDITED) 2000 1999 1998(2)
----------------------------------------------------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $10.32 $10.89 $10.76 $10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.23 0.43 0.43 0.41
Net realized and unrealized gains (losses) on
investments, forward foreign currency contracts
and foreign currency transactions 0.25 (0.55) 0.23 0.76
--------------------------------------------------------------------------------------------------------------
Total Income (Loss) from Investment Operations 0.48 (0.12) 0.66 1.17
--------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.23) (0.43) (0.43) (0.41)
From net realized gains -- (0.02) (0.10) --
In excess of net investment income -- -- -- --
In excess of net realized gains -- -- -- --
--------------------------------------------------------------------------------------------------------------
Total Distributions Paid (0.23) (0.45) (0.53) (0.41)
--------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.57 $10.32 $10.89 $10.76
--------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 4.74% (0.93)% 6.20% 11.86%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $129,664 $123,347 $77,249 $39,943
Ratio to average net assets of (4):
Expenses, net of waivers and reimbursements 0.85% 0.85% 0.85% 0.85%
Expenses, before waivers and reimbursements 1.09% 1.10% 1.17% 1.60%
Net investment income, net of waivers
and reimbursements 4.48% 4.35% 3.87% 4.01%
Net investment income, before waivers
and reimbursements 4.24% 4.10% 3.55% 3.26%
Portfolio Turnover Rate 19.47% 67.91% 62.55% 22.22%
--------------------------------------------------------------------------------------------------------------
<CAPTION>
GLOBAL
FIXED
INCOME
FUND
------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
SEPT. 30, ENDED ENDED ENDED ENDED ENDED
2000 MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
(UNAUDITED) 2000 1999 1998 1997 1996
----------------------------------------------------- ------------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $9.56 $10.38 $9.85 $10.08 $10.62 $10.64
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.20 (0.25) 0.38 0.43 0.56 0.78
Net realized and unrealized gains (losses) on
investments, forward foreign currency contracts
and foreign currency transactions (0.54) (0.28) 0.58 0.02 (0.40) (0.16)
--------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) from Investment Operations (0.34) (0.53) 0.96 0.45 0.16 0.62
--------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income -- -- (0.32) (0.59) (0.58) (0.62)
From net realized gains -- -- (0.07) (0.09) (0.11) (0.02)
In excess of net investment income -- (0.29) -- -- -- --
In excess of net realized gains -- -- (0.04) -- (0.01) --
--------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid -- (0.29) (0.43) (0.68) (0.70) (0.64)
--------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.22 $9.56 $10.38 $9.85 $10.08 $10.62
--------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (3.56)% (5.11)% 9.68% 4.61% 1.39% 5.84%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $18,737 $19,130 $14,285 $13,675 $16,426 $15,665
Ratio to average net assets of (4):
Expenses, net of waivers and reimbursements 1.15% 1.15% 1.15% 1.15% 1.15% 1.15%
Expenses, before waivers and reimbursements 1.72% 1.81% 1.96% 1.87% 1.96% 2.00%
Net investment income, net of waivers
and reimbursements 4.12% 4.06% 4.69% 4.98% 5.49% 5.75%
Net investment income, before waivers
and reimbursements 3.55% 3.40% 3.88% 4.26% 4.68% 4.90%
Portfolio Turnover Rate 103.98% 90.69% 16.49% 30.26% 37.76% 52.05%
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
HIGH YIELD
HIGH YIELD FIXED
MUNICIPAL INCOME
FUND FUND
------------------------------------- -------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR PERIOD ENDED YEAR PERIOD
SEPT. 30, ENDED ENDED SEPT. 30, ENDED ENDED
2000 MARCH 31, MARCH 31, 2000 MARCH 31, MARCH 31,
(UNAUDITED) 2000 1999(1) (UNAUDITED) 2000 1999(1)
----------------------------------------------------- ------------- ----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $9.01 $10.01 $10.00 $9.30 $10.10 $10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.25 0.44 0.05 0.48 0.85 0.11
Net realized and unrealized gains (losses) on
investments, forward foreign currency
contracts and foreign currency transactions 0.01 (0.99) -- (0.44) (0.79) 0.08
-------------------------------------------------------------------------------------------- -------------------------------------
Total Income (Loss) from Investment Operations 0.26 (0.55) 0.05 0.04 0.06 0.19
-------------------------------------------------------------------------------------------- -------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.25) (0.45) (0.04) (0.48) (0.86) (0.09)
-------------------------------------------------------------------------------------------- -------------------------------------
NET ASSET VALUE, END OF PERIOD $9.02 $9.01 $10.01 $8.86 $9.30 $10.10
-------------------------------------------------------------------------------------------- -------------------------------------
TOTAL RETURN(2) 2.91% (5.40)% 0.57% 0.45% 0.80% 2.06%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of year $27,048 $21,118 $10,033 $193,038 $165,510 $40,864
Ratio to average net assets of (3):
Expenses, net of waivers and reimbursements 0.85% 0.85% 0.85% 0.90% 0.90% 0.90%
Expenses, before waivers and reimbursements 1.37% 1.46% 5.60% 1.06% 1.12% 2.18%
Net investment income, net of waivers
and reimbursements 5.52% 5.12% 2.92% 10.61% 9.55% 6.78%
Net investment income (loss), before waivers
and reimbursements 5.00% 4.51% (1.83)% 10.45% 9.33% 5.50%
Portfolio Turnover Rate 9.99% 21.69% 0.00% 48.36% 87.92% 0.00%
-------------------------------------------------------------------------------------------- -------------------------------------
</TABLE>
(1) Commenced investment operations after the close of business on December 31,
1998.
(2) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at net asset value at the end of the year. Total return
is not annualized for periods less than one year.
(3) Annualized for periods less than a full year.
SEE NOTES TO THE FINANCIAL INSTITUTION STATEMENTS.
16
<PAGE>
NORTHERN FUNDS Semiannual Report
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
U.S. GOVERNMENT FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT
AGENCIES - 72.6%
FANNIE MAE - 18.8%
$18,500 5.625%, 3/15/01 $ 18,387
29,050 5.25%, 1/15/03 28,269
10,000 5.625%, 5/14/04 9,697
7,500 6.00%, 5/15/08 7,165
--------
63,518
--------
FANNIE MAE REMIC TRUST - 15.6%
10,000 Series 1997-M5, Class C,
6.74%, 8/25/07 9,766
10,264 Series 1998-24, Class QB,
6.00%, 9/18/12 10,213
17,239 Pool #440700,
6.00%, 11/1/28 16,123
17,719 Pool #452421,
6.00%, 12/1/28 16,573
--------
52,675
--------
FEDERAL HOME LOAN BANK - 8.9%
30,000 FHLB Note, 6.875%, 7/18/02 30,173
--------
FREDDIE MAC - 12.0%
18,500 Series 2028, Class PE,
6.00%, 11/15/21 17,916
1,048 Pool #410092,
7.69%, 11/1/24 1,061
9,421 Pool #G00767,
7.50%, 8/1/27 9,430
13,242 Pool #C18079,
6.00%, 11/1/28 12,377
--------
40,784
--------
FREDDIE MAC MTN - 13.5%
18,500 5.75%, 7/15/03 18,136
28,000 6.625%, 9/15/09 27,667
--------
45,803
--------
GINNIE MAE - 1.5%
206 Pool #268360, 10.00%, 4/15/19 221
257 Pool #270288, 10.00%, 6/15/19 275
$ 50 Pool #270297, 10.00%, 6/15/19 $ 54
71 Pool #302836, 10.00%, 2/15/21 76
4,748 Pool #476998, 6.50%, 7/15/29 4,573
--------
5,199
--------
TENNESSEE VALLEY AUTHORITY - 2.3%
8,000 Series B, Putable 7/15/01,
6.23%, 7/15/45 7,954
--------
Total U.S. Government Agencies
(cost $250,847) 246,106
--------
U.S. GOVERNMENT
OBLIGATIONS - 22.2%
U.S. TREASURY NOTES
16,940 6.625%, 7/31/01 16,977
17,315 5.75%, 8/15/03 17,218
38,500 7.50%, 2/15/05 40,817
--------
75,012
--------
Total U.S. Government Obligations
(cost $76,152) 75,012
--------
SHORT-TERM INVESTMENTS - 4.5%
11,543 Student Loan Marketing Association
Discount Note
6.28% 10/2/00 11,541
3,657 Tennessee Valley Authority Discount Note
6.28% 10/2/00 3,656
--------
Total Short-term Investments
(cost $15,197) 15,197
--------
Total Investments - 99.3%
(cost $342,196) 336,315
Other Assets less Liabilities - 0.7% 2,518
--------
NET ASSETS - 100.0% $338,833
========
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
17
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
SHORT-INTERMEDIATE U.S. GOVERNMENT FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-------------------------------------------------------------------
<S> <C> <C>
CORPORATE BOND - 2.9%
(cost $2,025)
$ 2,030 Inter-American Development Bank
7.00%, 6/16/03 $ 2,053
--------
U.S. GOVERNMENT AGENCIES - 47.3%
FANNIE MAE - 3.0%
2,200 5.125%, 2/13/04 2,105
--------
FANNIE MAE REMIC TRUST - 12.3%
1,341 Series 1997-M1, Class A,
6.50%, 1/17/03 1,337
1,446 Series 1998-24, Class QB
6.00%, 9/18/12 1,438
3,094 Pool #440700,
6.00%, 11/1/28 2,894
3,180 Pool #452421,
6.00%, 12/1/28 2,975
--------
8,644
--------
FEDERAL HOME LOAN BANK - 13.3%
6,200 6.875%, 7/18/02 6,236
3,050 7.25%, 5/15/03 3,098
--------
9,334
--------
FREDDIE MAC - 8.7%
3,250 Series 2028, Class-PE,
6.00%, 11/15/21 3,147
251 Pool #410092,
7.22%, 11/1/24 254
1,728 Pool #G00767,
7.50%, 8/1/27 1,729
1,025 Pool #C18035,
6.00%, 11/1/28 958
--------
6,088
--------
FREDDIE MAC MTN - 6.4%
3,250 6.25%, 10/15/02 3,234
1,250 5.75%, 7/15/03 1,225
--------
4,459
--------
TENNESSEE VALLEY AUTHORITY - 3.6%
$ 2,500 Series B, Putable 7/15/01,
6.24%, 7/15/45 $ 2,486
--------
Total U.S. Government Agencies
(cost $33,542) 33,116
--------
U.S. GOVERNMENT
OBLIGATIONS - 42.1%
U.S. TREASURY NOTES
1,000 6.625%, 7/31/01 1,002
3,000 8.00%, 5/15/01 3,030
5,500 5.625%, 9/30/01 5,464
8,500 7.50%, 11/15/01 8,609
8,500 5.75%, 10/31/02 8,459
2,950 5.75%, 8/15/03 2,933
--------
Total U.S. Government Obligations
(cost $29,309) 29,497
--------
SHORT-TERM INVESTMENT - 6.1%
(cost $4,293)
4,294 Student Loan Marketing Association
Discount Note
6.28%, 10/2/00 4,293
--------
Total Investments - 98.4%
(cost $69,169) 68,959
Other Assets less Liabilities - 1.6% 1,108
--------
NET ASSETS - 100.0% $70,067
========
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
18
<PAGE>
NORTHERN FUNDS Semiannual Report
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
INTERMEDIATE TAX-EXEMPT FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 98.3%
ALASKA - 1.1%
$ 500 Alaska State Housing Financial Corp.
Revenue Bond, Series B-2, State Capital
Project (MBIA Insured),
5.125%, 12/1/03 $ 507
North Slope Borough Capital Appreciation
G.O. Refunding Bond (MBIA Insured),
3,000 Series A, 0.00%, 6/30/01 2,897
2,200 Series A, 0.00%, 6/30/01 2,125
2,000 Series B, 0.00%, 6/30/01 1,932
----------
7,461
----------
ARIZONA - 2.9%
Arizona Agriculture Improvement and
Power Distribution Electrical Systems
Revenue Refunding Bond, Salt River Project
1,000 Series A, 5.50%, 1/1/05 1,034
2,160 Series A, 6.00%, 1/1/05 2,272
5,000 Arizona State Transportation Board Highway
Revenue Bond, 5.75%, 7/1/17 5,138
2,000 Maricopa County Unified School District
No. 11 Peoria G.O. Bond, 5.60%, 7/1/07 2,076
5,000 Mesa City Project of 1987 G.O. Bond
(MBIA Insured), Prerefunded,
5.70%, 7/1/03 5,220
3,500 Phoenix City G.O. Refunding Bond,
Series A, 4.90%, 7/1/02 3,530
----------
19,270
----------
CALIFORNIA - 2.2%
5,000 ABAG Financial Authority for Nonprofit
Corps. Multifamily Revenue Refunding
Bond, Series B, United Dominion,
6.25%, Mandatory Put 8/15/08 5,126
3,110 California State G.O. Bond
(AMBAC Insured), 5.00%, 10/1/18 3,017
$ 5,500 California Statewide Communities
Development Authority Revenue
Refunding Bond, Series A-2, Irvine
Apartment Communities,
4.90%, Mandatory Put 5/15/08 $ 5,356
1,000 Foothill/Eastern Transportation Corridor
Agency Toll Road Senior Lien Revenue
Bond, Series A, 0.00%, 1/1/05 826
----------
14,325
----------
COLORADO - 6.7%
1,180 Arapahoe County Capital
Improvement Trust Fund Highway
Revenue Bond, Series E-470, Prerefunded,
6.95%, 8/31/05 1,328
5,040 Arapahoe County School District No. 5
Cherry Creek G.O. Refunding Bond,
Series A, 5.25%, 12/15/04 5,145
Denver City & County Airport
Revenue Bond, (MBIA Insured),
1,190 Series E, 5.125%, 11/15/15 1,151
5,000 Series B, 5.00%, 11/15/25 4,432
3,700 Highlands Ranch Metropolitan District
No. 2 G.O. Bond (FSA Insured),
5.00%, 6/15/16 3,499
5,750 Jefferson County School District
No. R-001 G.O. Bond, Series A
(FGIC Insured), 6.00%, 12/15/05 6,102
Metropolitan Football Stadium District
Sales TRB (MBIA Insured),
20,000 Series B, 0.00%, 1/1/04 17,100
5,000 Series A, 0.00%, 1/1/07 3,669
2,000 Metropolitan Wastewater Reclamation
District Gross Revenue Refunding Bond,
Series B (MBIA Insured),
6.75%, 4/1/03 2,103
----------
44,529
----------
CONNECTICUT - 0.9%
6,000 Connecticut State Special Tax Obligation
Transportation Infrastructure Revenue
Bond, Series B (FSA Insured),
5.50%, 11/1/05 6,256
----------
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
19
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
INTERMEDIATE TAX-EXEMPT FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 98.3% (CONT'D.)
DISTRICT OF COLUMBIA - 1.1%
District of Columbia G.O. Bond
(FSA Insured)
$ 1,500 Series B, 5.50%, 6/1/08 $ 1,559
3,670 Series A, 5.50%, 6/1/11 3,777
1,700 District of Columbia Revenue Bond,
Georgetown University (MBIA Insured),
4.70%, 4/1/06 1,691
----------
7,027
----------
FLORIDA - 3.6%
1,000 Broward County School District G.O. Bond
6.00%, 2/15/06 1,036
3,375 Dade County Water and Sewer System
Revenue Bond (FGIC Insured),
6.25%, 10/1/06 3,651
3,000 Florida State Division Bond Finance
Department General Services Revenue Bond,
Environmental Protection Preservation 2000
(AMBAC Insured), 5.50%, 7/1/07 3,120
2,500 Florida State Division Bond Finance
Department General Services Revenue Bond,
Environmental Protection Preservation 2000
(FGIC Insured), 4.375%, 7/1/09 2,397
1,000 Heritage Palms Community Development
District Capital Improvement Revenue Bond,
6.25%, 11/1/04 1,000
Inland Protection Financing Corp. Special
Obligation Revenue Bond (FSA Insured),
730 Escrowed to Maturity, 5.00%, 1/1/04 740
270 Unrefunded Balance, 5.00%, 1/1/04 274
5,000 Jacksonville Electric Authority Revenue
Refunding Bond, St. John's River Power
System, 6.50%, 10/1/01 5,083
5,000 Venice City Health Facilities Revenue
Bond, Venice Hospital, Inc. Project,
Prerefunded, 6.00%, 12/1/04 5,353
$ 1,000 Vista Lakes Community Development
District Capital Improvement Revenue Bond,
Series B, 6.35%, 5/1/05 $ 999
----------
23,653
----------
GEORGIA - 4.3%
2,500 Atlanta City Airport Facilities Revenue
Refunding Bond (AMBAC Insured),
6.00%, 1/1/04 2,602
5,000 Fulton County Facilities Corp. COP Bond,
Fulton County Public Purpose Project,
5.50%, 11/1/18 4,955
Georgia Municipal Electric Authority Power
Revenue Bond, (MBIA Insured),
1,155 Series Z, Escrowed to Maturity, Prerefunded,
4.90%, 1/1/03 1,164
3,845 Series Z, Unrefunded Balance,
4.90%, 1/1/03 3,870
Georgia Municipal Electric Authority
Revenue Bond,
10,000 Series CC, 4.60%, 1/1/03 9,993
2,000 Series W, 6.40%, 1/1/07 2,162
1,000 Municipal Electric Authority of Georgia
General Resolution Project Revenue Bond,
Series A (MBIA Insured),
6.00%, 1/1/07 1,062
2,805 Municipal Electric Authority of Georgia
Revenue Bond, Series B, Project One
(AMBAC Insured), 6.00%, 1/1/05 2,942
----------
28,750
----------
HAWAII - 0.3%
1,870 Hawaii G.O. Bond Series CT,
5.25%, 9/1/05 1,917
----------
ILLINOIS - 8.7%
Champaign County Community Unified
School District No. 116 Urbana G.O.Bond,
Series C (FGIC Insured),
3,395 0.00%, 1/1/06 2,616
1,065 0.00%, 1/1/07 780
2,760 0.00%, 1/1/08 1,917
850 0.00%. 1/1/11 492
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
20
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
$ 6,000 Chicago Central Loop Redevelopment Tax
Allocation Bond (AMBAC Insured),
5.25%, 6/1/06 $ 6,144
3,895 Chicago City Board of Education Capital
Appreciation School Reform-B-1 G.O. Bond
(FGIC Insured), 0.00%, 12/1/09 2,417
3,000 Chicago City G.O. Bond (AMBAC Insured),
Prerefunded, 5.90%, 7/1/05 3,208
5,480 Chicago City Park District Parking Facility
Revenue Bond (ACA Insured), 6.25%, 1/1/15 5,670
4,000 Chicago City Public Building Commission
Revenue Bond, Series C (FGIC Insured),
5.375%, 2/1/05 4,106
1,000 Chicago City Wastewater Transmission
Revenue Bond (FGIC Insured),
Prerefunded, 6.30%, 1/1/03 1,055
Chicago City Wastewater Transmission
Revenue Bond (MBIA Insured),
1,000 6.00%, 1/1/14 1,055
1,000 6.00%, 1/1/15 1,051
2,000 Illinois Development Finance Authority
Solid Waste Disposal
Disposal Revenue Bond (AMT), Waste
Management, Inc. Project, 5.05%, 1/1/10 1,754
1,750 Illinois Educational Facilities Authority
Revenue Bond, The Art Institute of Chicago,
4.75%, 3/1/30 1,729
Illinois Educational Facilities Authority
Revenue Bond, Northwestern University,
2,550 4.80%, Mandatory Put 11/1/06 2,551
3,300 4.95%, Mandatory Put 11/1/08 3,302
2,500 Illinois Educational Facilities Authority
Revenue Bond, Series A (AMBAC Insured),
4.625%, Mandatory Put 9/1/04 2,448
4,000 Illinois Regional Transportation Authority
Revenue Bond, Series A (AMBAC Insured),
Prerefunded, 6.30%, 6/1/04 4,298
2,500 Illinois Sports Facility Revenue Bond,
Series A (MBIA Insured) (AMT),
5.00%, 6/15/09 2,489
Illinois State Development Financing
Authority Economic Development Revenue
Bond, Latin School of Chicago Project
$ 500 5.60%, 8/1/18 $ 464
1,000 5.65%, 8/1/28 896
1,000 Illinois State Sales Tax Revenue Bond,
6.00%, 6/15/06 1,061
2,530 Illinois State School District Capital
Appreciation Revenue Bond, Project 304
(FSA Insured), 0.00%, 1/1/07 1,853
Illinois State Toll Highway Authority
Revenue Refunding Bond, Series A,
2,000 4.75%, 1/1/02 2,006
2,000 (FGIC Insured), 5.50%, 1/1/04 2,052
----------
57,414
----------
INDIANA - 0.5%
1,500 Indiana Transportation Financing Authority
Airport Facilities Lease Revenue Refunding
Bond, Series A (AMBAC Insured),
6.00%, 11/1/11 1,625
1,500 Tippecanoe County School Building
Revenue Bond (MBIA Insured),
5.50%, 7/15/01 1,513
----------
3,138
----------
IOWA - 1.3%
5,000 Chillicothe PCR Refunding Bond, IES
Utilities, Inc. Project,
4.25%, Mandatory Put 11/1/03 4,808
3,610 Iowa Financing Authority Hospital Facility
Revenue Bond, Mercy Medical Center
Project (FSA Insured), 6.00%, 8/15/15 3,757
----------
8,565
----------
KENTUCKY - 1.4%
2,665 Carrollton & Henderson County Public
Energy Authority Gas Revenue Bond,
Series A (FSA Insured), 4.00%, 1/1/05 2,419
3,035 Jefferson County Kentucky G.O.
Bond, Series B (FSA Insured),
0.00%, 8/15/03 2,648
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
21
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
INTERMEDIATE TAX-EXEMPT FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 98.3% (CONT'D.)
KENTUCKY - 1.4% (CONT'D.)
$ 1,380 Kentucky Economic Finance Authority
Revenue Bond, Series A, Catholic Health
Project, 5.50%, 12/1/05 $ 1,419
2,850 Kentucky State Turnpike Authority
Economic Development Road Revenue
Refunding Bond, Revitalization Project,
5.50%, 1/1/01 2,857
----------
9,343
----------
LOUISIANA - 0.4%
3,030 St. Charles Parish PCR Refunding Bond,
Union Carbide Corp. Project,
5.10%, 1/1/12 2,806
----------
MAINE - 0.6%
4,000 Maine Governmental Facilities Authority
Lease Rent Revenue Bond,
(AMBAC Insured),
5.50%, 10/1/19 3,935
----------
MARYLAND - 1.3%
3,660 Baltimore Revenue Exchanged Bond,
Series A, (FGIC Insured),
5.90%, 7/1/09 3,950
3,500 Maryland State & Local Facilities Loan
G.O. Bond, Third Series,
5.60%, 10/15/05 3,642
1,000 Montgomery County G.O. Bond,
8.60%, 5/1/03 1,100
----------
8,692
----------
MASSACHUSETTS - 3.6%
3,000 Massachusetts State Consolidated Loan,
Series B, 5.75%, 6/1/10 3,199
1,735 Massachusetts State Health & Educational
Facilities Authority Revenue Bond, Series A,
Caregroup, Inc. (MBIA Insured),
5.00%, 7/1/05 1,758
3,625 Massachusetts State Health & Educational
Facilities Authority Revenue Bond,
Series B, Partners Healthcare Systems,
5.25%, 7/1/12 3,547
$ 1,915 Massachusetts State Health & Educational
Facilities Authority Revenue Bond, Series F,
South Shore Hospital, 5.00%, 7/1/07 $ 1,850
2,625 Massachusetts State Municipal Wholesale
Electric Co. and Power Supply System
Revenue Bond (AMBAC Insured),
5.10%, 7/1/07 2,679
10,000 Massachusetts State Water Reserve Authority
General Revenue Bond, Series A,
Prerefunded,
6.50%, 7/15/02 10,539
----------
23,572
----------
MICHIGAN - 2.0%
Detroit City G.O. Bond, Self-Insurance
Project
2,925 Series A, 5.60%, 5/1/01 2,941
1,000 Series A, 5.70%, 5/1/02 1,012
9,000 Michigan State Hospital Financing Authority
Revenue Bond, Series A, Ascension Health
Credit (MBIA Insured),
6.00%, 11/15/13 9,409
----------
13,362
----------
MISSISSIPPI - 1.5%
Mississippi State G.O. Bond,
2,110 Series E, 5.00%, 9/1/03 2,136
2,500 Series B, Refunding Bond, 5.50%, 11/15/04 2,584
4,750 Refunding Bond, 6.05%, 8/15/03 4,933
----------
9,653
----------
MISSOURI - 0.5%
2,000 Missouri State G.O. Bond, Series A,
7.00%, 4/1/03 2,122
1,000 St. Louis City Airport Revenue Bond,
6.25%, 1/1/02 1,011
----------
3,133
----------
NEBRASKA - 2.7%
American Public Energy Agency Gas
Supply Revenue Bond, Series C, Nebraska
Public Gas Agency
3,350 (AMBAC Insured), 4.00%, 9/1/06 2,986
5,500 (AMBAC Insured), 4.30%, 3/1/11 4,642
11,625 (MBIA Insured), 4.00%, 9/1/08 10,003
----------
17,631
----------
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
22
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
NEVADA - 0.6%
$ 3,000 Clark County Passenger Facility
Charge Revenue Refunding Bond,
Las Vegas McCarran International
(MBIA Insured),
5.375%, 7/1/13 $ 3,028
1,000 Nevada State Bank Municipal G.O. Bond,
Project No. 3-C, Escrowed to Maturity,
7.625%, 5/1/01 1,013
----------
4,041
----------
NEW JERSEY - 4.2%
1,375 New Jersey Economic Development
Authority Revenue Bond, Series A,
Transportation Project (FSA Insured),
5.00%, 5/1/05 1,401
New Jersey Health Care Facilities
Financing Authority
Palisades Medical Center Obligation Group
Revenue Bond (ACA Insured),
1,770 5.125%, 7/1/14 1,645
1,000 5.20%, 7/1/19 897
10,940 New Jersey State G.O. Bond, Series E,
5.00%, 7/15/04 11,128
New Jersey State Transportation Corp.
Capital Grant Anticipated Notes, Series A,
5,000 5.00%, 2/1/02 5,005
7,500 5.125%, 2/1/04 7,505
----------
27,581
----------
NEW MEXICO - 1.2%
5,250 Santa Fe City Gross Receipts Tax
Revenue Bond, 6.00%, 6/1/11 5,567
2,000 Santa Fe City Revenue Bond, Series A
(AMBAC Insured), Prerefunded,
6.30%, 6/1/04 2,114
----------
7,681
----------
NEW YORK - 8.7%
3,815 Metropolitan Transportation Authority
Dedicated Tax Fund Revenue Bond,
Series A (FGIC Insured),
6.125%, 4/1/16 4,051
New York City G.O. Bond,
8,200 Series A, 5.00%, 8/1/05 8,333
3,000 Series A, 6.00%, 5/15/19 3,109
$ 3,250 New York City Municipal Water Financing
Authority Water & Sewer Systems Revenue
Bond, Series A (MBIA Insured),
5.625%, 6/15/19 $ 3,254
New York City Transitional Financing
Authority Future Tax Secured Revenue
Bond,
4,795 Series B (FGIC Insured),
4.75%, 11/15/13 4,543
5,000 Series C, 5.50%, 11/1/29 4,831
New York State Dormitory Authority
Revenue Bond, Mount Sinai Health, Series A
3,000 6.00%, 7/1/05 3,143
1,500 6.00%, 7/1/06 1,580
2,700 New York State Dormitory Authority
Revenue Bond, Series B, State University
Educational Facilities,
5.25%, 5/15/05 2,770
4,000 New York State Dormitory Authority
Revenue Bond, Series C, State University
Additional Facilities,
5.75%, 5/15/17 4,183
1,500 New York State Environmental Facilities
Corp. Revenue Bond, Series A, State
Clean Water & Drinking Revolving Funds,
6.00%, 6/15/16 1,578
New York State G.O. Bond,
2,500 6.625%, 8/1/01 2,546
1,230 (AMBAC Insured), 7.00%, 11/15/02 1,294
2,000 Refunding, 6.00%, 10/1/06 2,131
2,500 New York State Mortgage Agency
Revenue Bond, 26th Series,
5.85%, 4/1/17 2,535
1,000 New York State Tollway Authority
Highway & Boarding Trust Fund
Revenue Bond, Series A (FSA Insured),
6.00%, 4/1/16 1,058
2,265 New York State Urban Development Corp.
Revenue Bond, Series B, Correctional
Facilities Services Contract,
5.00%, 1/1/03 2,283
1,250 New York State Urban Development Corp.
Subordinate Lien Revenue Bond,
5.50%, 7/1/16 1,225
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
23
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
INTERMEDIATE TAX-EXEMPT FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 98.3% (CONT'D.)
NEW YORK - 8.7% (CONT'D.)
$ 3,460 Port Authority New York & New Jersey
Revenue Bond, 119th Series (AMT),
(FGIC Insured), 5.00%,
9/15/03 $ 3,496
----------
57,943
----------
NORTH CAROLINA - 2.8%
North Carolina Eastern Municipal Power
Agency Revenue Bond,
1,500 Series B, Refunding, 6.00%, 1/1/06 1,543
9,425 Series B, Refunding, 6.125%, 1/1/09 9,742
2,505 Series A, Refunding, 5.20%, 1/1/10 2,414
5,000 North Carolina State Public Improvement
G.O. Bond, Series A,
5.00%, 9/1/01 5,031
----------
18,730
----------
OHIO - 1.8%
3,630 Cleveland City School District RAN
(AMBAC Insured), 5.75%, 6/1/07 3,837
5,000 Ohio State Higher Education Capital
Facilities G.O. Bond, Series A,
5.25%, 2/1/11 5,111
3,355 Ohio State Highway Capital Improvement
G.O. Bond, Series D,
4.25%, 5/1/06 3,283
----------
12,231
----------
OKLAHOMA - 3.1%
Grand River Dam Authority Revenue Bond,
11,000 4.00%, 6/1/04 10,692
4,850 Refunding, (MBIA Insured),
5.70%, 6/1/05 5,063
Oklahoma Development Financing Authority
Revenue Bond, Series A, Hillcrest
Healthcare System
2,000 4.90%, 8/15/07 1,736
1,000 5.00%, 8/15/09 830
2,740 5.20%, 8/15/11 2,201
----------
20,522
----------
OREGON - 1.3%
$ 1,765 Clackamas and Washington Counties
School District No. 003 G.O. Bond,
7.00%, 8/1/02 $ 1,842
3,450 Portland City Airport Way Urban Renewal &
Redevelopment Tax Increment, Series A
(AMBAC Insured),
6.00%, 6/15/16 3,616
3,445 Washington County School District
No. 48J Beaverton G.O. Bond,
5.00%, 8/1/06 3,508
----------
8,966
----------
PENNSYLVANIA - 5.7%
2,565 Allegheny County Port Authority Special
Revenue Bond, (MBIA Insured),
6.00%, 3/1/13 2,724
5,700 Pennsylvania State G.O. Bond,
Second Series,
5.00%, 10/15/05 5,789
Pennsylvania State Higher Education
Revenue Bond, Capital Acquisition
(MBIA Insured)
1,815 6.00%, 12/15/13 1,926
1,925 6.125%, 12/15/14 2,055
Pennsylvania State Intergovernmental
Cooperative Authority Special TRB,
City of Philadelphia Funding Program
3,000 (FGIC Insured), Escrowed to Maturity,
6.00%, 6/15/02 3,050
3,300 Prerefunded, 6.75%, 6/15/05 3,596
8,000 Philadelphia Authority for Industrial
Development Airport Revenue Bond,
Series A (AMT), Philadelphia Airport
System (FGIC Insured),
5.00%, 7/1/06 8,055
2,630 Philadelphia City Hospitals and Higher
Education Facilities Revenue Bond,
Series A, Jefferson Health System
(MBIA Insured),
5.25%, 5/15/11 2,654
6,000 Philadelphia School District G.O.
Refunding Bond, Series D
(MBIA Insured),
5.50%, 3/1/07 6,250
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
24
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
$ 1,910 St. Mary Hospital Authority Revenue Bond,
Series A, Bucks County Catholic Health
Initiatives,
5.00%, 12/1/05 $ 1,917
----------
38,016
----------
PUERTO RICO - 1.5%
6,675 Puerto Rico Commonwealth Public
Improvement G.O. Refunding Bond,
0.00%, 7/1/04 5,617
4,000 Puerto Rico Municipal Financing Agency
G.O. Bond, Series A (FSA Insured),
5.50%, 8/1/07 4,257
----------
9,874
----------
SOUTH CAROLINA - 3.3%
3,500 Columbia Waterworks and Sewer System
Capital Appreciation Revenue Bond,
0.00%, 2/1/03 3,133
3,900 South Carolina State Capital Improvement
G.O. Bond, Series B,
5.75%, 8/1/04 4,073
South Carolina State Public Service
Authority Revenue Refunding Bond,
Series B (FGIC Insured)
8,650 6.50%, 1/1/04 9,130
5,000 6.50%, 1/1/05 5,345
----------
21,681
----------
TENNESSEE - 2.2%
1,000 Chattanooga Health, Educational &
Housing Facilities Board Revenue
Refunding and Hospital Improvement
Bond, Siskin Hospital,
5.25%, 6/1/28 818
1,100 Memphis City Electric System Revenue
Refunding Bond,
5.80%, 1/1/03 1,129
2,000 Memphis-Shelby County Tennessee Airport
Authority Revenue Bond, Series D (AMT)
(AMBAC Insured),
6.25%, 3/1/15 2,118
$ 3,000 Sevier County Tennessee Public Building
Authority Local Government Public
Improvement VRDB, Series IV-3,
(FSA Insured),
5.55%, 6/1/25 $ 3,000
1,000 Shelby County Health Educational &
Housing Facilities Board Revenue Bond,
St. Jude's Children's Research,
4.65%, 7/1/04 997
1,800 Shelby County Public Improvement &
Schedule G.O. Bond, Series A,
4.50%, 5/1/09 1,751
5,205 Tennessee Energy Acquisition Corp. Gas
Revenue Bond, Series B (AMBAC Insured),
4.50%, 9/1/08 4,621
----------
14,434
----------
TEXAS - 4.0%
2,700 Austin City Public Improvement General
Obligation Bond,
5.50%, 9/1/19 2,669
Austin City Utilities System Revenue
Refunding Bond
3,000 (FSA Insured), 5.125%, 11/15/17 2,832
1,325 Series A (MBIA Insured), 6.00%, 11/15/04 1,385
2,000 El Paso City Independent School District
Capital Appreciation G.O. Bond
(PSF of Texas Gtd.),
0.00%, 2/15/02 1,874
7,450 Harris County Revenue Refunding Senior
Subordinate Lien Toll Road Bond
(AMBAC Insured),
4.95%, 8/15/06 7,533
2,955 Houston Independent School District
Capital Appreciation Revenue Bond,
Series B,
0.00%, 9/15/01 2,825
San Antonio City Electricity & Gas Revenue
Bond, Series A,
5,000 5.00%, 2/1/07 5,054
2,500 5.25%, 2/1/14 2,460
----------
26,632
----------
UTAH - 0.1%
800 Alpine School District G.O. Bond,
5.25%, 3/15/08 823
----------
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
25
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
INTERMEDIATE TAX-EXEMPT FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 98.3% (CONT'D.)
VIRGIN ISLANDS - 0.5%
$ 3,000 Virgin Islands Public Financing Authority
Revenue Bond, Series A, Gross Receipts
Taxes Lien Note,
5.625%, 10/1/10 $ 3,049
----------
VIRGINIA - 3.3%
3,250 Arlington County G.O. Bond,
5.80%, 12/1/02 3,342
3,000 Charles City and County IDA Solid Waste
Disposal Facility Revenue Refunding Bond
(AMT), Waste Management, Inc. Project,
4.875%, 2/1/09 2,640
9,100 Fairfax County G.O. Bond, Series C,
5.25%, 5/1/08 9,296
5,710 Richmond City G.O. Bond (FSA Insured),
5.125%, 1/15/05 5,827
460 Virginia State G.O. Bond, Series B,
4.60%, 6/1/04 462
----------
21,567
----------
WASHINGTON - 5.7%
5,175 King County School District No. 406
South Central Improvement G.O.
Refunding Bond (FGIC Insured),
5.15%, 12/1/16 4,951
5,020 King County Sewer Revenue Bond,
Second Series (FGIC Insured),
6.25%, 1/1/15 5,364
1,000 Pierce County School District No. 003
Puyallup G.O. Bond, Series A,
7.75%, 12/1/01 1,036
1,000 Pierce Fife County School District No. 417
G.O. Bond, Series A,
7.85%, 12/1/01 1,037
1,475 Seattle Limited Tax G.O. Bond, Escrowed
to Maturity,
7.00%, 3/1/01 1,491
1,645 Snohomish County School District
No. 015 Edmonds G.O. Bond,
7.00%, 12/1/01 1,691
$10,000 Washington State G.O. Bond, Series S-4,
5.75%, 1/1/12 $ 10,436
Washington State Public Power Supply
System Revenue Refunding Bond, Series A,
4,645 Nuclear Project No. 1 (FSA Insured),
5.60%, 7/1/05 4,813
3,640 Nuclear Project No. 3 (FGIC Insured),
5.65%, 7/1/08 3,809
3,000 Washington State Public Power Supply
System Revenue Refunding Bond, Series A,
Nuclear Project No. 2 (FGIC Insured),
4.80%, 7/1/06 2,998
----------
37,626
----------
WISCONSIN - 0.7%
4,415 Wisconsin State G.O. Refunding Bond,
Series 3, 6.125%, 11/1/06 4,740
----------
Total Municipal Investments
(cost $650,639) 650,569
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES
(000S)
---------
<S> <C> <C>
OTHER - 1.6%
5,127 AIM Tax Free Cash Reserve Fund 5,127
5,278 Provident Municipal Fund 5,278
----------
Total Other
(cost $10,405) 10,405
----------
Total Investments - 99.9%
(cost $661,044) 660,974
Other Assets less Liabilities - 0.1% 859
----------
NET ASSETS - 100.0% $ 661,833
==========
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
26
<PAGE>
NORTHERN FUNDS Semiannual Report
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
CALIFORNIA INTERMEDIATE TAX-EXEMPT FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 105.7%
CALIFORNIA - 93.2%
$ 4,400 ABAG Financing Authority For
Nonprofit Corp. Multifamily
Housing Revenue Refunding Bond,
Series B, United Dominion,
6.25%, Mandatory Put 8/15/08 $ 4,510
1,000 Adelanto Public Utility Authority
Revenue Bond, Series A,
Utility System Project
(Union Bank of California LOC),
4.45%, Mandatory Put 11/1/01 999
1,000 Arcade Water District Water Revenue
COP (FGIC Insured),
5.00%, 11/1/17 973
2,725 Brea PFA Revenue Tax Allocation
Redevelopment Project Bond
(MBIA Insured), Prerefunded,
7.00%, 8/1/01 2,842
1,000 California Infrastructure &
Economic Development
Bank Revenue Bond, Scripps
Research Institute,
5.75%, 7/1/30 1,015
1,000 California Infrastructure &
Economic Development Bank
Revenue Bond, Asian Museum
Foundation of San Francisco
(MBIA Insured),
5.50%, 6/1/19 1,015
1,250 California State Department of
Water Resources Revenue Bond,
Series O, CVP Water System,
4.75%, 12/1/16 1,190
2,435 California State Educational
Facilities Authority Revenue Bond
Loyola Marymount (MBIA Insured),
0.00%, 10/1/02 2,232
95 California State Housing Financing
Agency Revenue Bond, Series A,
Home Mortgage (FHA Insured),
7.375%, 8/1/17 97
California State G.O. Bond
$ 2,000 6.60%, 2/1/10 $ 2,306
2,000 4.50%, 12/1/16 1,819
1,000 4.50%, 10/1/18 888
1,000 (FGIC Insured), 4.75%, 2/1/19 917
1,350 California State Public Works Board
Lease Revenue Refunding Bond,
Series A, Department of Corrections
State Prisons, (AMBAC Insured),
5.25%, 12/1/13 1,411
3,545 California State Public Works Board
Lease Revenue Refunding Bond, Series A,
Trustees California State University,
5.25%, 10/1/14 3,614
1,000 California State Public Works Board
Lease Revenue Refunding Bond, Series C,
Various Community Colleges Projects,
5.50%, 9/1/11 1,048
1,000 California Statewide Communities
Development Authority Multifamily
Revenue Refunding Bond, Series E,
Archstone/Oakridge Housing,
5.30%, Mandatory Put 6/1/08 1,009
2,030 California Statewide Communities
Development Authority Revenue COP,
John Muir/Mount Diablo Health
System (MBIA Insured),
5.50%, 8/15/12 2,159
1,000 Contra Costa County Home Mortgage
Revenue Bond (Colld. by U.S.
Government Securities),
Escrowed to Maturity,
7.50%, 5/1/14 1,225
950 Duarte Redevelopment Agency Single
Family Mortgage Revenue Refunding
Bond, Series B (Colld. by U.S.
Government Securities),
Escrowed to Maturity,
6.875%, 10/1/11 1,122
250 East Bay California Regional Park
District G.O. Refunding Bond,
5.00%, 9/1/17 245
2,000 Imperial Irrigation District COP,
Electrical Systems Project,
6.50%, 11/1/07 2,257
</TABLE>
27
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
CALIFORNIA INTERMEDIATE TAX-EXEMPT FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 105.7% (CONT'D.)
CALIFORNIA - 93.2% (CONT'D.)
Los Angeles County Metropolitan
Transportation Authority Sales
Refunding TRB, Proposition A, Series B
(FSA Insured)
$ 1,250 4.75%, 7/1/15 $ 1,204
850 4.75%, 7/1/16 809
65 Los Angeles County SFM Revenue Bond,
Issue B, (Colld. by U.S. Government
Securities),
7.60%, 8/1/16 67
Los Angeles Department of Water &
Power Electric Plant Revenue Bond
2,000 6.10%, 2/15/17 2,105
1,250 6.375%, 2/1/20 1,300
500 Crossover Refunded,
6.80%, 6/1/01 518
1,275 Crossover Refunding (MBIA Insured),
9.00%, 9/1/02 1,385
5,000 Los Angeles Unified School District COP,
Series B (MBIA Insured),
5.00%, 10/1/02 5,085
3,000 Metropolitan Water District Southern
California Waterworks Revenue Bond,
6.25%, 7/1/01 3,054
850 Mountain View COP Refunding
Revitalization Authority (MBIA Insured),
6.00%, 10/1/16 906
1,070 Oakland Joint Powers Financing
Authority Lease Revenue Bond,
Oakland Administration Buildings
(AMBAC Insured),
5.375%, 8/1/10 1,128
1,500 Orange County Refunding COP,
Juvenile Justice Center Facility
(AMBAC Insured)
5.875%, 6/1/02 1,542
1,035 Paso Robles Joint Unified High School
District COP, Measure E, Capital Projects
Phase III, Escrowed to Maturity,
5.30%, 8/1/01 1,047
1,000 Rancho Water District Financing
Authority Revenue Refunding Bond
(AMBAC Insured),
5.00%, 8/15/14 1,001
1,000 Riverside Water Revenue Bond,
9.00%, 10/1/02 1,092
Sacramento County Sanitation
District Financing Authority Revenue
Bond, Series A,
$ 1,500 5.60%, 12/1/16 $ 1,543
1,250 5.75%, 12/1/18 1,288
Sacramento Municipal Utility District
Electric Revenue Refunding Bond,
Series C (MBIA Insured),
1,060 5.60%, 11/15/02 1,092
200 Escrowed to Maturity,
5.60%, 11/15/02 206
1,000 San Diego County COP, Burnham
Institute,
5.70%, 9/1/11 1,045
San Diego Unified School District COP,
1,050 Series A, Capital Projects Phase 15,
4.60%, 7/1/01 1,055
750 Series A, Escrowed to Maturity,
6.10%, 7/1/01 762
1,500 Series B, Capital Projects,
Escrowed to Maturity,
6.00%, 7/1/03 1,532
1,000 San Diego Unified School District
G.O. Bond, Series A (FGIC Insured),
0.00%, 7/1/05 807
500 San Francisco City and County
Airport Commission International
Airport Revenue Refunding Bond,
Series 20 (MBIA Insured)
4.75%, 5/1/15 484
San Francisco City & County
Educational Facilities G.O. Series A,
Community College,
700 5.75%, 6/15/20 726
300 5.50%, 6/15/11 319
1,545 San Francisco City and County G.O.
Bond, School District Facilities
Improvement, Series D (FGIC Insured),
7.00%, 6/15/02 1,617
1,000 San Marcos Public Facilities Authority
Revenue Bond, Escrowed to Maturity,
0.00%, 7/1/11 592
1,000 San Marino Unified School District G.O.
Bond, Series B, 5.25%, 7/1/20 987
</TABLE>
28
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-------------------------------------------------------------------
<S> <C> <C>
$ 1,000 Santa Rosa Wastewater Revenue
Refunding and Subregional Wastewater
Project Bond, Series A (FGIC Insured),
4.75%, 9/1/16 $ 949
2,100 Southern California Public Power
Authority Power Project Revenue Bond
(GIC: Pittsburgh National Bank),
6.75%, 7/1/12 2,448
1,000 Southern California Public Power
Authority Revenue Bond,
Transmission Project,
0.00%, 7/1/14 486
2,250 Turlock Irrigation District Revenue
Refunding Bond, Series A,
6.00%, 1/1/20 2,251
Union Elementary School District
G.O. Bond, Series A,
1,340 0.00%, 9/1/01 1,290
715 0.00%, 9/1/03 628
860 University of California Revenue Bond,
Series F, Multi Purpose Projects,
7.00%, 9/1/01 (FGIC Insured) 884
Washington Township Health Care
District Revenue Bond
100 4.25%, 7/1/05 97
705 4.50%, 7/1/07 685
250 5.00%, 7/1/09 251
-------
81,160
-------
PUERTO RICO - 11.3%
800 Puerto Rico Commonwealth Highway
and Transportation Authority
Highway Revenue Bond, Series X,
Permanent Fixed Option Receipts,
5.20%, 7/1/03 816
1,500 Puerto Rico Commonwealth
Infrastructure Financing Authority
Special Obligation Bond, Series A,
5.375%, 10/1/24 1,481
Puerto Rico Commonwealth
Infrastructure Financing Authority
Special Tax Revenue Refunding
Bond, Series A (AMBAC Insured),
2,000 5.25%, 7/1/10 2,096
3,000 5.00%, 7/1/12 3,040
Puerto Rico Municipal Financing
Agency G.O. Refunding Bond, Series B,
$ 635 5.00%, 8/1/01 $ 639
1,000 (FSA Insured), 5.00%, 8/1/03 1,022
750 Puerto Rico Public Buildings Authority
Revenue Bond, Series B, Guaranteed
Government Facilities (MBIA Insured),
5.00%, 7/1/16 739
-------
9,833
-------
VIRGIN ISLANDS - 1.2%
1,000 Virgin Islands Public Financing Authority
Revenue Bond, Series A, Gross Receipts
Taxes Lien Note,
5.625%, 10/1/10 1,016
-------
Total Municipal Investments
(cost $89,562) 92,009
-------
<CAPTION>
NUMBER
OF SHARES
(OOOS)
---------
<S> <C> <C>
OTHER - 1.8%
(cost $1,582)
1,582 Provident Municipal Cash Fund 1,582
-------
Total Investments - 107.5%
(cost $91,144) 93,591
Liabilities less Other Assets - (7.5)% (6,493)
-------
NET ASSETS - 100.0% $87,098
=======
</TABLE>
29
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
FLORIDA INTERMEDIATE TAX-EXEMPT FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
--------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 91.0%
FLORIDA - 74.5%
$ 500 Crossings At Fleming Island Community
Development Refunding
Revenue Bond, Series C
7.05%, 5/1/15 $ 517
1,000 Dade County Refunding Bond
(FGIC Insured),
12.00%, 10/1/02 1,141
500 Dade County Sales TRB (AMBAC Insured),
6.00%, 10/1/01 508
400 Dade County Seaport Refunding
Revenue Bond (MBIA Insured)
6.50%, 10/1/10 451
150 Duval County School District G.O.
Bond, Series 1992 (AMBAC Insured),
6.125%, 8/1/04 156
1,000 Florida State Board of Education
Capital Outlay G.O.
Series E, Public Education,
5.50%, 6/1/20 993
100 Florida State Board of Education
Capital Outlay Revenue Bond,
Series 1992 B, Prerefunded,
5.30%, 6/1/02 102
1,000 Florida State Board of Education
Lottery Revenue Bond,
Series B (FGIC Insured),
5.50%, 7/1/11 1,045
1,000 Florida State Board of Education Revenue
Bond, Series C, Escrowed to Maturity,
6.00%, 5/1/03 1,006
1,000 Florida State Division Bond Finance
Department of General Services Revenue
Bond, Environmental
Protection-Preservation 2000-A,
6.00%, 7/1/11(FSA Insured) 1,088
200 Florida State Municipal Power Agency
Revenue Bond, Power Supply Project
(AMBAC Insured), Prerefunded,
6.25%, 10/1/01 207
350 Florida State Municipal Power Agency
Revenue Bond, St. Lucie Project
(FGIC Insured),
5.40%, 10/1/05 360
$ 250 Florida State Sunshine Skyway
Revenue Refunding Bond, Series 1991,
6.40%, 7/1/04 $ 256
1,000 Gainesville City Utility Systems Revenue
Refunding Bond, Series 1979 A,
6.20%, 10/1/02 1,012
1,000 Gulf Breeze Florida Revenue Variable Rate
Local Government Loan, Revenue Bond
5.65%, 12/1/20 (FGIC Insured) 1,015
1,895 Gulf Breeze Florida Revenue Variable Rate
Local Government Loan, Revenue Bond
5.625%, 12/1/20 (FGIC Insured) 1,927
1,000 Heritage Palms Community Development
District Capital Improvement Revenue Bond,
6.25%, 11/1/04 1,000
1,365 Hillsborough County IDA IDR Bond, Series A,
Health Facilities Project, University
Community Hospital
4.50%, 8/15/03 1,326
500 Jacksonville City Health Facilities Authority
Revenue Bond, Series A, Charity Obligation
Group Project (MBIA Insured),
5.00%, 8/15/11 495
1,000 Jacksonville Florida Electric Authority
Revenue Bond, Electrical System Subsidiary,
Series D,
5.30%, 10/1/10 1,007
2,000 Jacksonville Florida Electrical Authority
Revenue Bond, St. John River -Issue 2,
Series 16,
5.00%, 10/1/02 2,021
100 Kissimmee City Utility Authority
Electric System Revenue Refunding
Bond, Series 1991 (FGIC Insured),
Prerefunded,
6.50%, 10/1/01 104
185 Kissimmee Suburban Water &
Sewer System Revenue Bond
(AMBAC Insured), Prerefunded,
5.75%, 10/1/00 189
500 Manatee County Public Utilities Revenue
Bond, Series 1991 A (MBIA Insured),
Prerefunded,
6.75%, 10/1/01 521
1,200 Marion County Hospital District Revenue
Refunding & Improvement Bond, Health
Systems, Monroe Regional Medical Center,
4.625%, 10/1/03 1,184
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
30
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
--------------------------------------------------------------------
<S> <C> <C>
$ 1,000 Miami-Dade County Special Obligation
Refunding Subordinate Bond, Series 1997 A
(MBIA Insured),
0.00%, 10/1/14 $ 453
3,000 Miami-Dade County Special Obligation
Revenue Bond, Subordinate-Series C
0.00%, 10/1/13 1,457
2,000 North Slope Boro Alaska Capital
Appreciation G.O., Series B (MBIA Insured)
0.00%, 1/1/03 1,795
1,625 Orange County HFA Revenue Bond,
Series 1999 G (AMT),
5.20%, 9/1/14 1,506
100 Orlando City Utility Commission
Water and Electric Revenue Refunding
Bond, Series 1992,
5.75%, 10/1/05 105
250 Palm Beach County G.O. Refunding Bond,
Series B,
6.50%, 7/1/10 282
1,000 Palm Beach County School Board
COP Bond, Series A (FGIC Insured),
6.00%, 8/1/17 1,057
500 Polk County Florida Transportation
Improvement Revenue Bond,
5.625%, 12/1/16 (FSA Insured) 510
50 Reedy Creek Improvement District Bond,
Series 1991 A, Prerefunded,
6.00%, 6/1/02 51
200 Reedy Creek Improvement District Bond,
Series 1991 A, Unrefunded Balance,
6.00%, 6/1/02 204
200 Sunrise City Utility Systems Revenue
Capital Appreciation Bond, Series 1996 A
(AMBAC Insured),
0.00%, 10/1/01 191
1,000 Tampa Bay Water Systems Revenue Bond
(FGIC Insured),
0.00%, 10/1/06 748
750 Tampa City Sports Authority Revenue
Bond, Stadium Project (MBIA Insured),
6.00%, 1/1/06 797
1,035 Tampa Hospital Capital Improvement
Revenue Bond, Series 1999 A,
4.75%, 7/1/11 961
500 Vista Lakes Community Development District
Florida Capital Improvement Revenue
Bond, Series B
6.35%, 5/1/05 500
$ 1,000 West Orange Healthcare Revenue Bond,
Series A,
5.25%, 2/1/03 $ 1,000
--------
31,248
--------
MASSACHUSETTS - 2.2%
1,000 Massachusetts State Health and Educational
Facilities Revenue Bond, Group A,
5.25%, 7/1/07 923
--------
MISSOURI - 0.6%
250 St. Louis Missouri Airport Revenue Bond,
6.25%, 1/1/02 253
--------
PUERTO RICO - 11.3%
1,000 Puerto Rico Commonwealth Public
Improvement Capital Appreciation G.O.
Refunding Bond,
0.00%, 7/1/04 842
Puerto Rico Industrial, Tourist, Educational,
Medical & Environmental Central Facilities
Revenue Refunding Bond, Series A,
San Lucas & Cristo Project,
385 4.65%, 6/1/01 383
435 4.80%, 6/1/02 430
595 4.90%, 6/1/03 582
1,000 Puerto Rico Municipal Financing Agency
G.O. Bond, Series A (FSA Insured),
6.00%, 8/1/15 1,077
1,400 Puerto Rico Public Buildings Authority
Guaranteed Public Education and Health
Facilities Revenue Refunding Bond,
Series M (Commonwealth Gtd.),
5.20%, 7/1/02 1,420
--------
4,734
--------
VIRGIN ISLANDS - 2.4%
1,000 Virgin Islands Public Finance Authority
Revenue Bond, Gross Receipts
Taxes Lien Note, Series A,
5.625%, 10/1/10 1,016
--------
Total Municipal Investments
(cost $38,264) 38,174
--------
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
31
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
FLORIDA INTERMEDIATE TAX-EXEMPT FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
--------------------------------------------------------------------
<S> <C> <C>
OTHER - 7.9%
29 Dreyfus Tax-Exempt Cash Management
Fund No. 264 $ 29
3,270 Federated Tax Free Trust Money
Market Fund No. 15 3,270
--------
Total Other
(cost $3,299) 3,299
--------
Total Investments - 98.9%
(cost $41,563) 41,473
Other Assets less Liabilities - 1.1% 477
--------
NET ASSETS - 100.0% $ 41,950
========
</TABLE>
NOTES TO THE FINANCIAL STATEMENTS.
32
<PAGE>
NORTHERN FUNDS Semiannual Report
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
FIXED INCOME FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-----------------------------------------------------------------------------
<S> <C> <C>
ASSET-BACKED SECURITIES - 12.6%
$ 5,500 Associates Automobile Receivables Trust,
Series 2000-1, Class A3,
7.30%, 1/15/04 $ 5,543
8,610 California Infrastructure SCE-1,
Series 1997-1, Class A4,
6.22%, 3/25/04 8,553
5,815 California Infrastructure PG&E-1,
Series 1997-1, Class A5,
6.25%, 6/25/04 5,759
2,586 Chevy Chase Auto Receivables Trust,
Series 1997-2, Class A,
6.35%, 1/15/04 2,577
2,670 Commercial Mortgage Asset Trust,
Series 1999-C1, Class A3,
6.64%, 9/17/10 2,573
6,781 CS First Boston Mortgage Securities Corp.,
Series 1998-C2, Class A1,
5.96%, 12/15/07 6,537
-- Delta Funding Mortgage Corp., I.O.,
Series 1991-1, Class A-4,
7.50%, 3/15/06(1) 12
-- DLJ Mortgage Acceptance Corp., I.O.,
7.50%, 11/12/21(1) 72
8,830 First Union-Lehman Brothers-Bank of
America, Series 1998-C2, Class A2,
6.56%, 11/18/08 8,583
6,660 GMAC Commercial Mortgage Securities, Inc.,
Series 1999-C3,Class A1B,
7.27%, 7/15/32 6,651
2,674 IMC Excess Cashflow Securities Trust,
Series 1997-A, Class A,
7.41%, 11/26/28(1) 588
4,935 LB Commercial Conduit Mortgage Trust,
Series 1998-C4, Class B,
6.36%, 10/15/08 4,831
5,500 LB-UBS Commercial Mortgage Trust,
Series 2000-C3, Class A2,
7.95%, 1/15/10 5,794
Morgan Stanley Capital I,
1,100 Series 1998-WF1, Class A2,
6.55%, 12/15/07 1,072
6,680 Series 1999-LIFE, Class A2,
7.11%, 7/15/09 6,656
$ 4,405 Mortgage Capital Funding, Inc.,
Series 1998-MC1, Class A2,
6.66%, 1/18/08 $ 4,288
2,765 Nationslink Funding Corp.,
Series 1999-1, Class A2,
6.32%, 11/20/08 2,641
4,014 Pegasus Aviation Lease Securitization Trust,
Series 1999-1A, Class A1,
6.30%, 3/25/29 3,921
1,122 PNC Mortgage Securities Corp.,
8.09%, 4/28/27(1) 987
10,000 Yosemite Securities Trust I,
8.25%, 11/15/04(1) 10,137
----------
Total Asset-Backed Securities
(cost $90,781) 87,775
----------
CORPORATE/GOVERNMENT BONDS
AND NOTES - 24.6%
AIRLINES - 1.8%
12,000 Continental Airlines, Inc.,
Series 2000-1, Class A-1,
8.05%, 11/1/20 12,298
----------
BANKS - 0.4%
2,650 Bank One Corp.,
6.40%, 8/1/02 2,632
----------
CASINO HOTEL - 0.2%
1,495 MGM Mirage, Inc.,
8.50%, 9/15/10 1,496
----------
DIVERSIFIED FINANCIAL SERVICES - 10.4%
15,870 Asian Development Bank,
6.375%, 10/1/28 15,775
1,555 Boeing Capital Corp.,
7.38%, 9/27/10 1,568
10,000 CIT Group, Inc.,
5.85%, 5/26/00 9,877
3,060 Comdisco, Inc.,
9.50%, 8/15/03 3,025
1,630 FleetBoston Financial Corp.,
7.25%, 9/15/05 1,641
</TABLE>
33
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
FIXED INCOME FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-----------------------------------------------------------------------------
<S> <C> <C>
CORPORATE/GOVERNMENT BONDS
AND NOTES - 24.6% (CONT'D.)
DIVERSIFIED FINANCIAL SERVICES - 10.4% (CONT'D.)
$10,000 Ford Motor Credit Co.,
7.50%, 6/15/03 $ 10,099
5,045 General Motors Acceptance Corp.,
7.50%, 7/15/05 5,109
Green Tree Financial Corp.,
469 Series 1994-B, Class A, 7.85%, 7/15/04 469
2,700 Series 1886-9, Class A, 7.69%, 1/15/28 2,636
2,700 Series 1997-6, Class B1, 7.17%, 1/15/29 2,277
6,190 Heller Financial Commercial Mortgage
Association, Series 2000-PH1, Class A2,
7.75%, 11/15/09 6,406
1,210 MBNA America Bank NA,
7.38%, 9/15/05 1,217
4,075 Repsol International Finance BV,
7.45%, 7/15/05 4,119
8,555 Transamerica Finance Corp.,
7.25%, 8/15/02 8,592
----------
72,810
----------
ENVIRONMENTAL CONTROLS - 0.4%
3,350 Waste Management, Inc.,
7.10%, 8/1/26 3,241
FANNIE MAE - 2.3% ----------
FNMA
4,850 6.75%, 8/15/02 4,871
7,670 7.125%, 2/15/05 7,826
3,633 7.25%, 5/15/30 3,811
----------
16,508
----------
INSURANCE - 1.2%
2,900 Anthem Insurance, Inc.,
9.00%, 4/1/27(1) 2,393
3,200 Conseco, Inc.,
8.75%, 2/09/04 2,256
Lumberman's Mutual Casualty Co.,
3,910 9.15%, 7/1/26(1) 3,455
765 8.45%, 12/1/97(1) 589
----------
8,693
----------
PIPELINES - 0.3%
1,765 Duke Energy Field Services,
7.875%, 8/16/10 1,791
----------
SPECIAL PURPOSE - 2.8%
$ 3,080 Bunge Trade Ltd.,
9.25%, 5/1/02(1) $ 3,072
10,000 Air 2 US,
8.03%, 10/1/19(1) 10,018
6,200 US West Capital Funding, Inc.,
6.875%, 8/15/01 6,184
----------
19,274
----------
TELEPHONE - 2.0%
3,505 Deutsche Telekom AG,
8.00%, 6/15/10 3,599
Koninklijke KPN NV,
2,550 8.00%, 10/01/10 2,563
2,010 8.38%, 10/01/30 2,028
1,700 Marconi Corp. PLC,
7.75%, 9/15/10 1,682
4,040 Telefonica Europe BV,
7.75%, 9/15/10 4,056
----------
13,928
----------
TRANSPORTATION - 1.7%
Burlington Northern Santa Fe Corp.,
6,000 7.29%, 6/1/36, Putable 6/1/08 5,892
5,950 6.53%, 7/15/37 5,842
----------
11,734
----------
UTILITIES - 1.1%
1,840 Dominion Resources, Inc.,
7.82%, 9/15/04 1,844
5,735 PP&L Transition Bond Co. LLC,
Series 1999-1, Class A5,
6.83%, 3/25/07 5,742
----------
7,586
----------
Total Corporate/Government Bonds
and Notes
(cost $175,514) 171,991
----------
U.S. GOVERNMENT AGENCIES - 41.7%
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.1%
-- FNMA REMIC Trusts,
Series 1997-20, I.O.,
8.00%, 3/25/27 506
----------
</TABLE>
34
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-----------------------------------------------------------------------------
<S> <C> <C>
MORTGAGE BACKED SECURITIES - 41.6%
$ 4,268 FHLMC - Gold, Pool C00835,
6.50%, 7/1/29 $ 4,105
11,675 FHLMC - Gold, Pool C18079,
6.00%, 11/1/28 10,913
6,376 FNMA, Pool 253266,
7.50%, 3/15/30 6,459
3,110 FNMA, Pool 323938,
6.00%, 9/1/14 2,993
23,828 FNMA, Pool 323980,
6.00%, 4/1/14 22,929
24,532 FNMA, Pool 440700,
6.00%, 11/1/28 22,945
23,834 FNMA, Pool 452421,
6.00%, 12/1/28 22,294
10,867 FNMA, Pool 506248,
6.00%, 3/1/14 10,456
12,394 FNMA, Pool 520113,
7.50%, 4/1/30 12,363
3,580 FNMA, Pool 526354,
8.00%, 3/1/30 3,627
17,347 FNMA, Pool 532912,
7.50%, 3/1/30 17,304
502 FNMA, Pool 532968,
6.00%, 3/1/15 483
8,663 FNMA, Pool 533440,
8.00%, 1/1/30 8,776
18,667 FNMA, Pool 535198,
8.00%, 3/1/30 18,912
19,183 FNMA, Pool 535276,
6.50%, 11/1/28 18,433
52,114 FNMA, Pool 535300,
6.50%, 5/1/30 50,046
11,676 GNMA, Pool 465725,
7.00%, 5/15/28 11,501
3,450 GNMA, Pool 470778,
7.00%, 8/15/29 3,399
9,905 GNMA, Pool 479288,
8.00%, 4/15/30 10,081
19,183 GNMA, Pool 486873,
8.00%, 1/15/29 18,475
3,281 GNMA, Pool 510732,
7.00%, 11/15/29 3,232
1,322 GNMA, Pool 514330,
7.00%, 7/15/29 1,302
$ 9,965 GNMA, Pool 528714,
8.00%, 4/15/30 $ 10,143
----------
291,171
----------
Total U.S. Government Agencies
(cost $291,551) 291,677
----------
U.S. GOVERNMENT
OBLIGATIONS - 12.2%
U.S. TREASURY BONDS
6,325 6.00%, 8/15/09 6,357
13,005 7.50%, 11/15/16 14,824
33,130 8.88%, 2/15/19 43,064
20,540 6.38%, 8/15/27 21,400
----------
85,645
----------
Total U.S. Government Obligations
(cost $84,867) 85,645
----------
FLOATING RATE BANK NOTE - 0.2%
(cost $1,212)
1,435 Lloyds Bank PLC,
6.31%, 12/15/00 1,205
----------
SHORT-TERM INVESTMENT - 8.5%
(cost $59,454)
59,454 Bayerische Hypo-Und Vereinsbank,
Grand Cayman, Eurodollar Time Deposits,
6.72%, 10/2/00 59,454
----------
Total Investments - 99.8%
(cost $703,379) 697,747
Other Assets less Liabilities - 0.2% 1,211
----------
NET ASSETS - 100.0% $ 698,958
==========
</TABLE>
35
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
TAX-EXEMPT FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 96.6%
ALABAMA - 0.4%
$ 2,000 Courtland Industrial Development
Board Solid Waste Disposal Revenue
Bond (AMT),
6.00%, 8/1/29 $ 1,893
----------
ARIZONA - 2.6%
1,000 Arizona Student Loan Acquisition
Authority Revenue Bond, Series A-1 (AMT),
5.90%, 5/1/24 1,021
1,375 Cochise County University School
District No. 68 Sierra Vista G.O. Bond,
Series B (FGIC Insured),
9.00%, 7/1/03 1,531
3,000 Maricopa County School District No. 41
Gilbert G.O. Bond,
6.25%, 7/1/15 3,044
5,500 Maricopa County School District No. 69
Paradise Valley G.O. Bond, Series B,
8.50%, 7/1/06 6,547
1,500 Maricopa County Unified
School District No.11 G.O. Bond,
Peoria Project 1991,
5.50%, 7/1/10 1,537
----------
13,680
----------
CALIFORNIA - 7.2%
4,000 California Educational Facilities
Authority Capital Appreciation
Revenue Bond, Loyola Marymount
(MBIA Insured),
0.00%, 10/1/31 570
4,315 California Health Facility Financing
Authority Revenue Bond, Northern
California Presbyterian,
5.125%, 7/1/18 3,990
5,000 California State Public Works Board
Lease Revenue Bond, Series A,
6.10%, 9/1/02 5,173
$ 3,500 California Statewide Communities
Development Authority Revenue
Refunding Bond, Series A-2, Irvine
Apartment Communities, 4.90%,
Mandatory Put 5/15/08 $ 3,409
Kern High School District G.O.
Refunding Bond, Series A (MBIA
Insured),
1,845 6.60%, 2/1/17 2,114
1,825 6.60%, 8/1/17 2,091
6,000 Los Angeles Convention and Exhibition
Center Authority Revenue COP,
Prerefunded, 9.00%, 12/1/05 7,313
6,000 Los Angeles Convention and Exhibition
Center Authority COP, Prerefunded,
9.00%, 12/1/05 7,313
4,125 Los Angeles Department of Water &
Power Electric Plant Revenue Bond,
6.00%, 2/15/16 4,332
1,000 Walnut Valley Unified School District
G.O. Bond, Series A (MBIA Insured),
Escrowed to Maturity,
6.00%, 8/1/13 1,099
----------
37,404
----------
COLORADO - 1.1%
3,360 Denver City & County Special Facilities
Airport Revenue Bond, Series A (AMT)
(MBIA Insured), Rental Car Project,
6.00%, 1/1/14 3,500
3,000 Metropolitan Football Stadium Sales
TRB, Series B (MBIA Insured),
0.00%, 1/1/06 2,319
----------
5,819
----------
CONNECTICUT - 1.9%
8,625 Connecticut State Special Tax Obligation
Revenue Bond, Series A, Transportation
Infrastructure,
7.125%, 6/1/10 9,985
----------
FLORIDA - 9.3%
15,950 Broward County G.O. Bond,
10.00%, 7/1/14 22,569
</TABLE>
36
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
$ 2,000 Crossing at Fleming Island
Community Special Assessment
Revenue Bond, Series C,
7.05%, 5/1/15 $ 2,069
Florida State Board of Education
Capital Outlay G.O. Refunding Bond,
2,090 9.125%, 6/1/14 2,795
325 Prerefunded, 9.125%, 6/1/14 433
1,840 Heritage Palms Community
Development District Capital
Improvement Revenue Bond,
6.25%, 11/1/04 1,841
4,000 Hillsborough County IDA PCR Bond,
Tempa Electric Co. Project,
5.55%, 10/2/00 4,000
1,930 Jackson County PCR Bond
Gulf Power Co. Project,
5.60%, 10/2/00 1,930
6,200 Orlando City Utilities Commission
Water and Electric Revenue
Refunding Bond, Series D,
6.75%, 10/1/17 7,078
2,500 Pinellas County Sewer
Revenue Bond (MBIA Insured),
5.75%, 10/1/05 2,628
1,000 Poinciana Community Special
Assessment Bond, Series A,
7.125%, 5/1/31 1,007
1,000 Vista Lakes Community Capital
Improvement Revenue Bond, Series B,
6.35%, 5/1/05 999
1,000 Volusia County Educational Facility
Authority Revenue Bond, Series A,
Embry-Riddle Aeronautical,
5.75%, 10/15/29 951
----------
48,300
----------
GEORGIA - 3.1%
2,000 Atlanta Airport Revenue Refunding
Bond, Series A (FGIC Insured),
5.50%, 1/1/26 1,952
3,290 Forsyth County G.O. Bond,
6.00%, 3/1/18 3,464
5,800 Fulton County Water & Sewer Revenue
Bond (FGIC Insured),
4.75%, 1/1/28 4,971
$ 2,000 Gainesville & Hall County Development
Authority Revenue Bond, Series C,
Senior Living Facility - Lanier Village,
7.25%, 11/15/29 $ 1,894
2,300 Georgia State Municipal Electric
Authority Power Revenue Bond,
Series B (FGIC Insured),
6.375%, 1/1/16 2,543
1,100 Municipal Electric Authority Revenue
Bond, Series A (MBIA Insured),
General Resolution Project,
5.00%, 1/1/01 1,101
----------
15,925
----------
IDAHO - 0.3%
1,750 Power County IDR Bond (AMT),
FMC Corp. Project,
6.45%, 8/1/32 1,736
----------
ILLINOIS - 7.0%
Chicago City G.O. Bond,
10,000 Series A (FGIC Insured),
6.75%, 1/1/35 11,102
10,250 Series B (AMBAC Insured),
5.125%, 1/1/15 10,051
3,000 Chicago Park District Parking Facility
Revenue Bond (ACA Insured),
6.00%, 1/1/19 3,000
6,455 Chicago Water Revenue Refunding
Bond (FGIC Insured),
4.125%, 11/1/13 5,830
Illinois State Development Financing
Authority Economic Development
Revenue Bond, Latin School of
Chicago Project,
350 5.60%, 8/1/18 325
730 5.65%, 8/1/28 654
2,000 Illinois State Health Facility
Authority Revenue Refunding Bond,
Series A, West Suburban Hospital,
5.75%, 7/1/15 1,832
</TABLE>
37
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
TAX-EXEMPT FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 96.6% (CONT'D.)
ILLINOIS - 7.0% (CONT'D.)
$ 2,015 Illinois State Student Assistance
Commission Student Loan Revenue
Bond, Series QQ,
3.75%, 9/1/02 $ 1,961
10,000 Metropolitan Pier & Exposition
Authority Revenue Bond (FGIC
Insured), McCormick Project,
0.00%, 6/15/29 1,832
----------
36,587
----------
INDIANA - 7.5%
5,000 Franklin Township School
Building, Marion County First
Mortgage Revenue Bond,
6.50%, 7/15/18 5,473
4,200 Hamilton County Public Building
Corp. First Mortgage G.O. Bond,
7.25%, 8/1/13 4,965
2,000 Indiana Health Facility Financing
Authority Hospital Revenue Bond,
Series D, Charity Obligation Group,
4.75%, 11/15/06 1,986
1,500 Indiana Housing Finance Authority
SFM Revenue Bond,
Series C-3 (AMT),
6.30%, 7/1/31 1,514
1,810 Indiana State Municipal Power Agency
Supply Systems Revenue Refunding
Bond, Series B (MBIA Insured),
6.00%, 1/1/12 1,946
5,620 Indiana State Office Building Capital
Complex Revenue Bond, Series B
(MBIA Insured),
7.40%, 7/1/15 6,799
3,305 Indiana State Transportation
Authority Airport Finance Lease
Revenue Bond, Series A,
5.50%, 11/1/12 3,322
Indianapolis City Industrial Gas Utility
Revenue Refunding Bond, Series B
(FGIC Insured),
1,740 5.00%, 6/1/06 1,768
2,275 4.00%, 6/1/08 2,136
3,280 3.50%, 6/1/18 2,535
$ 3,000 Indianapolis Local Public Improvement
Capital Appreciation Revenue Bond,
Series E (AMBAC Insured),
0.00%, 2/1/22 $ 857
3,500 Marion County Convention and
Recreational Facility Authority Excise
TRB, Series A (AMBAC Insured),
7.00%, 6/1/21 3,618
2,000 Monroe County Hospital Authority
Revenue Bond, Series B (FSA Insured),
Bloomington Hospital Obligation Group,
6.00%, 5/1/29 2,023
----------
38,942
----------
KENTUCKY - 0.3%
1,500 Jefferson County Student Housing
Industrial Building Revenue Bond,
Series A, Collegiate Housing Foundation,
7.125%, 9/1/29 1,503
----------
MARYLAND - 0.5%
Maryland Community Administration
Department Housing & Community
Development Revenue Bond, Series D
(AMT) (FHA Insured),
1,000 6.25%, 9/1/32 1,022
1,750 6.20%, 9/1/20 1,796
----------
2,818
----------
MASSACHUSETTS - 5.8%
10,000 Massachusetts Bay Transit Authority
Revenue Bond, Series A, General
Transportation System,
4.50%, 3/1/26 8,125
Massachusetts State Development
Finance Agency Revenue Bond,
Series P, Boston University
2,000 5.375%, 5/15/39 1,812
2,000 6.00%, 5/15/59 2,003
Massachusetts State Health &
Educational Facility Authority
Revenue Bond,
4,500 Series A, Caritas Christi
Obligation Group,
5.625%, 7/1/20 3,774
1,500 Series B, Partners Healthcare System,
5.125%, 7/1/19 1,316
</TABLE>
38
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
Massachusetts State Turnpike
Authority Revenue Bond Series A
$ 2,500 (AMBAC Insured), 4.75%, 1/1/34 $ 2,080
3,900 (MBIA Insured), 5.00%, 1/1/27 3,491
5,000 (MBIA Insured), 5.125%, 1/1/23 4,594
3,000 Massachusetts State Water Pollution
Abatement Revenue Bond, Series A,
6.00%, 8/1/19 3,193
----------
30,388
----------
MICHIGAN - 0.8%
5,000 Michigan State Hospital Finance
Authority Revenue Refunding
Bond (MBIA Insured),
4.50%, 10/15/21 4,079
----------
MINNESOTA - 0.4%
2,000 Minnesota State Housing Finance
Agency Single Family Mortgage
Revenue Bond,
5.70%, 1/1/17 2,015
----------
MISSISSIPPI - 1.0%
5,000 Mississippi State Highway Revenue
Refunding Bond, Series No. 39,
Four Lane Highway Program,
5.25%, 6/1/06 5,143
----------
MISSOURI - 0.1%
750 St. Louis Airport Revenue Bond,
6.25%, 1/1/02 758
----------
MONTANA - 0.4%
2,500 University of Montana Higher
Education Revenue Bond, Series A
(MBIA Insured),
4.50%, 11/15/15 2,198
----------
NEBRASKA - 0.9%
5,500 American Public Energy Agency
Gas Supply Revenue Bond, Series C,
Public Gas Agency Project
(AMBAC Insured),
4.30%, 3/1/11 4,642
----------
NEVADA - 0.5%
$ 2,540 Nevada State G.O. Refunding Bond,
Project 20-23A, Escrowed to Maturity,
7.20%, 7/1/06 $ 2,556
----------
NEW JERSEY - 3.0%
1,500 New Jersey State Health Care Facilities
Finance Authority Revenue Bond,
Palisades Medical Center Obligation
Group (ACA Insured),
5.25%, 7/1/28 1,300
New Jersey State Transportation
Revenue Bond, Series A,
Capital Grant Anticipated Notes,
5,000 5.00%, 2/1/02 5,005
7,500 5.125%, 2/1/04 7,505
2,000 New Jersey State Turnpike Authority
Revenue Refunding Bond, Series A,
6.75%, 1/1/08 2,049
----------
15,859
----------
NEW YORK - 12.2%
2,000 Dutchess County Civic Facility Revenue
Bond, Bard College Civic Facility,
5.75%, 8/1/30 1,961
4,000 Long Island Power Authority
Electric System Revenue Bond,
Series A (FSA Insured),
5.00%, 12/1/15 3,839
4,190 Metropolitan Transportation Authority
Revenue Bond, Series A (FGIC Insured),
4.75%, 4/1/28 3,562
2,000 New York State Dormitory Authority
Revenue Bond (AMBAC FHA Insured),
Menorah Home,
5.00%, 8/1/18 1,851
5,000 New York City Municipal Water
Financing Authority Water and Sewer
System Revenue Refunding Bond,
Series A (MBIA Insured),
5.50%, 6/15/23 4,879
</TABLE>
39
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
TAX-EXEMPT FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 96.6% (CONT'D.)
NEW YORK - 12.2% (CONT'D.)
New York City Transitional
Finance Authority Revenue Bond,
Future Tax Secured,
$ 2,000 Series B, 6.125%, 11/15/15 $ 2,139
4,000 Series B, 6.00%, 11/15/24 4,152
1,115 Series B, 6.25%, 7/1/20 1,179
5,550 Series B, 6.00%, 7/1/30 5,680
5,000 Series C, 5.875%, 11/1/16 5,207
3,100 New York City Municipal Water
Finance Authority Revenue Bond
Series B, Water and Sewer System,
6.00%, 6/15/33 3,201
2,500 New York State Mortgage Agency
Revenue Bond, 26th Series,
5.85%, 4/1/17 2,535
20,000 New York State Dormitory Authority
Revenue Bond, Series A, Mt. Sinai
School of Medicine (MBIA Insured),
5.15%, 7/1/24 18,620
4,825 Triborough Bridge & Tunnel
Authority General Purpose
Revenue Bond, Series SR,
5.00%, 1/1/07 4,856
----------
63,661
----------
NORTH CAROLINA - 7.5%
North Carolina State Eastern Municipal
Power Agency Revenue Refunding Bond,
18,950 Series B, 7.00%, 1/1/08 20,594
2,655 Series A, Escrowed to Maturity,
6.50%, 1/1/18 2,967
4,000 Series A, 5.75%, 1/1/26 3,644
1,000 Series D, 6.75%, 1/1/26 1,024
3,720 North Carolina Municipal Power
Agency No. 1 Catawba Electric Revenue
Bond, Series B, Unrefunded Balance,
6.00%, 1/1/20 3,580
7,000 North Carolina G.O. Bond, Series A,
5.00%, 9/1/01 7,043
----------
38,852
----------
OHIO - 0.8%
$ 1,000 Ontario Ohio Local School
District G.O. Bond (FSA Insured),
5.125%, 12/1/18 $ 946
1,000 Plain Ohio Local School
District G.O. Bond (FGIC Insured),
6.00%, 12/1/25 1,039
2,500 Scioto County Marine Terminal
Revenue Refunding Bond, Norfolk
Southern Corp. Project,
5.30%, 8/15/13 2,269
----------
4,254
----------
OKLAHOMA - 2.0%
6,000 McGee Creek Water Authority Revenue
Bond, Series 1992 (MBIA Insured),
6.00%, 1/1/13 6,481
1,750 Oklahoma Industrial Finance
Authority G.O. Bond, Series K,
8.875%, 12/1/15 1,763
2,000 Payne County Economic Development
Student Housing Authority Revenue
Bond, Series A, Collegiate Housing
Foundation,
6.375%, 6/1/30 1,989
----------
10,233
----------
OREGON - 0.4%
1,000 Oregon State G.O. Bond, Series 66,
10.50%, 6/1/02 1,095
1,000 Oregon State Housing & Community
Services Department Mortgage
Revenue Bond, Series E (FHA Insured),
Single Family Project,
6.15%, 7/1/30 1,025
----------
2,120
----------
PENNSYLVANIA - 1.4%
1,635 Allegheny County Port Authority
Special Revenue Bond (MBIA Insured),
6.125%, 3/1/29 1,701
3,000 Montgomery County Higher Education
and Health Authority Revenue Bond,
Series A, Philadelphia Geriatric Center,
7.375%, 12/1/30 2,810
</TABLE>
40
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
$ 1,500 Pennsylvania State Higher Educational
Facilities Authority Student Housing
Revenue Bond, Series A, Student
Association, Inc., Project,
6.75%, 9/1/32 $ 1,439
1,395 Philadelphia Water & Wastewater
Revenue Bond (FSA Insured),
Prerefunded,
5.50%, 6/15/14 1,453
----------
7,403
----------
PUERTO RICO - 1.6%
5,000 Puerto Rico Commonwealth
Infrastructure Financing Authority
Special Obligation Bond, Series A,
5.50%, 10/1/40 4,897
1,500 Puerto Rico Commonwealth
Infrastructure Financing Authority
Special Obligation Bond, Series A,
5.375%, 10/1/24 1,481
2,000 Puerto Rico Commonwealth Highway &
Transportation Authority Revenue
Bond, Series B,
6.00%, 7/1/31 2,079
----------
8,457
----------
RHODE ISLAND - 0.6%
3,000 Rhode Island State Economic
Development Corp. Airport Revenue
Bond, Series B (FGIC Insured),
6.50%, 7/1/18 3,256
----------
SOUTH CAROLINA - 0.9%
3,000 Georgetown County Pollution Control
Facilities Revenue Refunding Bond,
Series A, International Paper Co. Project,
5.125%, 2/1/12 2,821
2,115 Piedmont County Municipal
Power Agency Electric Revenue
Refunding Bond, Series A,
6.55%, 1/1/16 2,115
----------
4,936
----------
TENNESSEE - 1.8%
$ 1,500 Chattanooga Health, Educational &
Housing Facilities Board Revenue
Refunding Bond, Siskin Hospital,
5.25%, 6/1/28 $ 1,227
5,000 Tennessee State Energy Acquisition
Corp. Gas Revenue Bond, Series B
(AMBAC Insured),
4.50%, 9/1/08 4,440
3,600 Tennessee State G.O. Bond, Series A,
5.00%, 5/1/05 3,666
----------
9,333
----------
TEXAS - 8.3%
5,245 Austin Texas G.O. Bond (FGIC Insured),
5.125%, 9/1/17 4,976
1,800 Austin Utility System Revenue
Refunding Bond (FSA Insured),
5.125%, 11/15/20 1,671
1,795 Birdville Texas School District
G.O. Bond (PSF Gtd.)
0.00%, 2/15/19 568
1,000 Brownsville Naval District Revenue
Refunding Bond, Union Carbide
Corp. Project,
5.10%, 1/1/12 905
3,290 Carrollton Farmers Branch Independent
School District G.O. Bond (PSF Gtd.),
6.00%, 2/15/14 3,453
Colorado River Municipal Water District
Revenue Prerefunded Bond
3,500 9.50%, 1/1/01 3,543
1,500 Harris County Health Facilities
Development Corp. Revenue Bond,
Series A, Christus Health,
5.50%, 7/1/09 1,540
7,500 Harris County G.O. Bond,
5.00%, 8/15/21 6,804
2,400 Lamar School District G.O.
Bond (PSF Gtd.),
6.00%, 2/15/13 2,530
4,500 Matagorda County Navigation
District No. 1 Revenue Bond,
Series C, Reliant Energy Inc.,
5.20%, 5/1/29 4,483
</TABLE>
41
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
TAX-EXEMPT FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 96.6% (CONT'D.)
TEXAS - 8.3% (CONT'D.)
$ 1,000 Parker County Hospital District
Revenue Bond, Campbell Health System,
6.25%, 8/15/19 $ 901
4,000 San Antonio Electric and Gas Revenue
Refunding Bond, Series A,
4.50%, 2/1/21 3,337
Texas State Veterans Housing
Assistant G.O. Bond, Series C,
3,000 6.10%, 6/1/21 3,032
Waxahachie Independent School
District G.O. Capital Appreciation
Refunding Bond (PSF Gtd.),
5,505 0.00%, 8/15/16 2,108
4,265 0.00%, 8/15/23 987
6,875 0.00%, 8/15/28 1,135
7,140 0.00%, 8/15/30 1,030
----------
43,003
----------
VIRGINIA - 0.5%
2,750 Charles City and County IDA Solid
Waste Disposal Facility Revenue Bond
(AMT), Waste Management, Inc. Project,
4.875%, 2/1/09 2,420
----------
WASHINGTON - 3.4%
2,000 Chelan County Public Utility
District No. 1 Capital Appreciation
Refunding Bond, Columbia
River Rock (MBIA Insured),
0.00%, 6/1/28 390
2,000 King County School District
No. 403 G.O. Bond,
6.125%, 12/1/11 2,085
2,500 Seattle G.O. Limited Tax
Refunding Bond,
6.50%, 3/1/17 2,556
Washington State G.O. Bond,
5,000 Series A, 6.00%, 9/1/16 5,108
3,450 Series B, 6.40%, 6/1/17 3,830
$ 3,750 Washington State Public Power Supply
Systems Revenue Refunding Bond,
Series A, Nuclear Project No. 2,
6.50%, 7/1/03 $ 3,873
----------
17,842
----------
WEST VIRGINIA - 0.2%
2,800 West Virginia University Revenue Bond,
Series A (AMBAC Insured),
West Virginia University Project,
0.00%, 4/1/22 793
----------
WISCONSIN - 0.9%
4,500 Wisconsin State Health & Educational
Facilities Revenue Bond, University
Medical Foundation
(Lasalle Bank N.A. LOC),
5.55%, 10/6/00 4,500
----------
Total Municipal Investments
(cost $493,089) 503,293
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES
(000S)
---------
<S> <C> <C>
OTHER - 3.8%
9,087 AIM Tax Free Cash Reserve Fund 9,087
9,229 Provident Municipal Fund 9,229
1,686 Shearson Lehman Brothers California
Municipal Fund 1,686
----------
Total Other
(cost $20,002) 20,002
----------
Total Investments - 100.4%
(cost $513,091) 523,295
Liabilities less Other Assets - (0.4%) (2,359)
----------
NET ASSETS - 100.0% $ 520,936
==========
</TABLE>
42
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
NORTHERN FUNDS Semiannual Report
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
ARIZONA TAX-EXEMPT BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 99.8%
ARIZONA - 96.1%
$ 935 Arizona Health Facilities
Authority Hospital System
Revenue Bond, Prerefunded,
7.25%, 11/1/03 $ 1,009
1,000 Arizona Health Facilities
Authority Hospital System
Revenue Bond, Northern Arizona
Healthcare System
(AMBAC Insured),
4.75%, 10/1/30 840
1,250 Arizona School District TAN
Financing Program COP,
4.875%, 7/31/01 1,255
Arizona State Transportation
Board Highway Revenue Bond,
1,500 4.50%, 7/1/03 1,501
2,390 5.75%, 7/1/18 2,447
1,000 Central Arizona Water Conservation
District Contract Revenue Bond,
Series B, Central Arizona Project
(MBIA Insured),
6.30%, 11/1/02 1,030
2,000 Chandler Street & Highway User
Revenue Bond (MBIA Insured),
5.125%, 7/1/15 1,947
1,180 Coconino & Yavapai Counties G.O. Bond
Joint Unified School District No. 9
Sedona-Oak Creek Project
(FGIC Insured),
5.50%, 7/1/05 1,210
375 Glendale Unified High School District
No. 205, G.O. Refunding Bond
(FGIC Insured),
4.875%, 7/1/12 368
1,000 Lake Havasu City Excise Tax Revenue
Refunding Bond (AMBAC Insured),
4.10%, 6/1/08 943
1,140 Maricopa County IDA Multifamily
Housing Revenue Bond, Series A,
Metro Gardens-Mesa Ridge Project
(MBIA Insured),
4.75%, 7/1/13 1,062
Maricopa County School District No. 6
G.O. Bond, Washington Elementary
Projects (FGIC Insured),
$ 1,125 Series B, 4.00%, 7/1/09 $ 1,036
1,265 Series C, 4.00%, 7/1/11 1,127
Maricopa County School District
No. 8 Osborn G.O. Bond (FGIC Insured),
Refunding,
1,000 4.70%, 7/1/14 936
2,000 5.875%, 7/1/14 2,078
Maricopa County School District
No. 11 G.O. Bond,
1,000 Peoria Unified Project of 1991,
5.50%, 7/1/10 1,025
475 Peoria Unified Project of 1996
(FGIC Insured),
5.125%, 7/1/11 480
Maricopa County School District
No. 28 G.O. Bond, Kyrene Elementary
Project (FGIC Insured), Prerefunded
250 6.50%, 7/1/01 254
1,500 Refunding, Series B, 0%, 1/1/04 1,288
1,070 Series B, 6.00%, 7/1/14 1,112
1,250 Maricopa County Unified School
District No. 41 G.O. Bond, Series F,
Gilbert Project (FSA Insured),
5.25%, 7/1/12 1,264
2,300 Maricopa County Unified School
District No. 48 Scottsdale G.O.
Refunding Bond, Series B,
4.50%, 7/1/10 2,237
1,200 Maricopa County Elementary School
District No. 68 G.O. Bond,
Alhambra School Improvement
(AMBAC Insured),
6.35%, 7/1/06 1,302
1,500 Maricopa County Unified High School
District No. 210 G.O. Bond, Phoenix
Project of 1988, Series F,
6.375%, 7/1/06 1,629
Maricopa County Unified School
District No. 80 Chandler, G.O. Bond,
1,200 (FGIC Insured), Prerefunded,
5.80%, 7/1/05 1,272
1,000 (MBIA Insured),
4.70%, 7/1/12 960
1,330 Refunding, (FGIC Insured),
0%, 7/1/09 865
</TABLE>
43
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
ARIZONA TAX-EXEMPT BOND FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 99.8% (CONT'D.)
ARIZONA - 96.1% (CONT'D.)
$ 1,500 Maricopa County Unified School
District No. 97 G.O. Bond, Series F,
Deer Valley Project of 1996
(MBIA Insured),
5.00%, 7/1/11 $ 1,492
250 Mesa Arizona Refunding G.O. Bond
(AMBAC Insured),
6.00%, 7/1/01 253
1,000 Mohave County Unified High School
No. 30 G.O. Bond, Series B, (FGIC Insured),
8.50%, 7/1/05 1,162
1,325 Phoenix Civic Improvement Corp.
Excise TRB, Series A, Senior Lien-Municipal
Courthouse Project,
5.75%, 7/1/15 1,370
1,160 Phoenix Civic Plaza Building Corp.
Excise TRB, Senior Lien,
5.70%, 7/1/07 1,217
Phoenix G.O. Bond,
1,000 4.50%, 7/1/22 845
1,300 Series A, Refunding,
5.00%, 7/1/03 1,320
1,000 Series A, Refunding,
4.125%, 7/1/14 865
1,500 Series A, Refunding,
4.50%, 7/1/15 1,347
1,000 Series A, Refunding,
5.00%, 7/1/19 940
1,100 Series B, Refunding,
4.50%, 7/1/20 938
2,000 Phoenix Civic Improvement Corp.
Wastewater System Lease Revenue Bond,
5.70%, 7/1/03 2,059
1,000 Phoenix Civic Improvement Corp.
Wastewater System Revenue Bond,
Junior Lien, (FGIC Insured),
6.25%, 7/1/17 1,079
2,000 Pima County G.O. Bond, (FSA Insured),
4.00%, 7/1/14 1,764
Pima County Unified School District
No. 6 Marana G.O. Refunding Bond Ltd.,
(FGIC Insured),
1,300 4.625%, 7/1/11 1,247
2,100 5.375%, 7/1/12 2,152
1,300 5.40%, 7/1/14 1,316
$ 1,900 Pima County Unified School District
No. 10 G.O. Bond, Amphitheater School
Improvement,
6.50%, 7/1/05 $ 2,046
Pima County Unified School District
No. 12 Sunnyside G.O. Bond (FGIC Insured),
1,000 5.375%, 7/1/12 1,017
2,000 5.75%, 7/1/12 2,099
Salt River Project Agricultural
Improvement & Power District
Electrical System, Revenue Refunding Bond,
500 Series B, 5.25%, 1/1/19 479
2,000 Series C, 5.00%, 1/1/16 1,896
1,000 Santa Cruz County Unified School District
No. 1 Nogales G.O. Bond, Series B
(AMBAC Insured), Prerefunded,
6.10%, 7/1/04 1,055
1,620 Scottsdale Preservation Authority
Excise TRB (FGIC Insured),
6.00%, 7/1/10 1,750
1,125 Tempe Arizona Unified High School
District 213 Refunding G. O. Bond
(FGIC Insured),
5.00%, 7/1/09 1,144
1,000 Tucson Street and Highway User
Revenue Refunding Bonds, Senior Lien,
5.50%, 7/1/09 1,028
----------
66,357
----------
PUERTO RICO - 3.7%
2,500 Puerto Rico Commonwealth Infrastructure
Financing Authority Special Obligation
Bond, Series A,
5.50%, 10/1/20 2,523
----------
Total Municipal Investments
(cost $67,998) 68,880
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES
(000S)
---------
<S> <C> <C>
OTHER - 2.5%
(cost $1,725)
1,725 Shearson Leman Brothers Municipal
Cash Trust Money Market Fund 1,725
----------
Total Investments - 102.3%
(cost $69,723) 70,605
Liabilities less Other Assets - (2.3)% (1,588)
----------
NET ASSETS - 100.0% $ 69,017
==========
</TABLE>
44
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
NORTHERN FUNDS Semiannual Report
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
CALIFORNIA TAX-EXEMPT BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 99.9%
CALIFORNIA - 88.3%
ABAG Finance Authority For Nonprofit
Corps. COP Channing House,
$ 590 4.65%, 2/15/06 $ 565
780 4.90%, 2/15/09 730
2,600 ABAG Finance Authority for Nonprofit
Corps. Multifamily Housing Revenue
Refunding Bond, United Dominion
Realty Trust,
6.25%, Mandatory Put 8/15/08 2,665
1,250 Adelanto Public Utility Authority
Revenue Bond, Series A, Utilities
Systems Projects, (Union Bank of
California LOC),
4.45%, Mandatory Put 11/1/01 1,249
2,000 Alameda County Water District Revenue
Refunding Bond (MBIA Insured),
4.75%, 6/1/20 1,825
250 Anaheim PFA Tax Allocation
Revenue Bond, Series A, Redevelopment
Project (MBIA Insured),
5.25%, 2/1/18 249
1,000 California Educational Facilities Authority
Revenue Bond, Series A, Pepperdine
University
5.00%, 11/1/29 918
500 California Educational Facility Authority
Revenue Bond, Series N, Stanford
University,
5.20%, 12/1/27 481
California Health Facilities Financing
Authority Revenue Bond, Sutter Health,
1,000 Series A (MBIA Insured), 5.35%, 8/15/28 968
1,000 Series A (FSA Insured), 5.00%, 8/15/37 899
2,000 California Health Facilities Financing
Authority Revenue Bond, Northern
California Presbyterian,
5.125%, 7/1/18 1,849
3,350 California Health Facilities Financing
Authority Revenue Bond, Series A,
Cedars-Sinai Medical Center,
6.125%, 12/1/19 3,417
$ 495 California Housing Finance Agency
Revenue Bond, Series A
7.35%, 8/1/11 $ 509
250 California Infrastructure and Economic
Development Bank Revenue Bond, Scripps
Research Institute,
5.75%, 7/1/30 254
California Statewide Communities
Development Authority Multifamily
Housing Revenue Refunding Bond,
Archstone/Oakridge,
1,000 5.30%, 6/01/29 1,009
2,000 5.25%, Mandatory Put 6/1/08 1,979
1,000 California Statewide Communities
Development Corp. COP, J Paul Gotty Trust,
5.00%, 10/1/10 1,025
1,000 California Statewide Communities
Development Authority Revenue Refunding
Bond, Irvine Apartments,
4.90%, Mandatory Put 5/15/08 974
1,000 California State Department of Water
Resources Revenue Refunding Bond,
Century Valley Project,
4.75%, 12/1/16 952
1,000 California State Department of
Transportation Refunding COP,
Series A (MBIA Insured)
5.25%, 3/1/16 1,007
California State G.O. Bond,
150 6.60%, 2/1/10 173
1,390 Refunding, 4.375%, 10/1/17 1,223
1,000 Refunding (FGIC Insured), 4.75%, 2/1/29 877
1,300 California State Public Works Board
Lease Revenue Bond, Series A,
Department of Corrections
(AMBAC Insured),
5.50%, 1/1/14 1,347
California State Public Works Board
Lease Revenue Refunding Bond, Various
Community College Projects,
750 Series C, 5.50%, 9/1/11 786
1,000 Series B, (AMBAC Insured), 5.625%, 3/1/16 1,035
2,750 California Pollution Control Financing
Authority, PCR Refunding Bond, Series B,
Southern California Edison Co.
(MBIA Insured),
5.45%, 9/1/29 2,722
</TABLE>
45
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
CALIFORNIA TAX-EXEMPT BOND FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 99.9% (CONT'D.)
CALIFORNIA - 88.3% (CONT'D.)
$ 400 Dry Creek Joint Elementary School
District G.O. Bond, Series A (FSA Insured),
0.00%, 8/1/09 $ 264
3,250 East Bay Municipal Utility District Water
System Revenue Bond,
5.25%, 6/1/16 3,279
2,250 East Bay Regional Park District G.O. Bond,
5.00%, 9/1/17 2,205
150 Escondido Unified High School District
G.O. Bond (MBIA Insured),
5.60%,11/1/09 161
515 Fillmore Unified School District
G.O. Bond, Series A (FGIC Insured),
0.00%, 7/1/10 323
200 Folsom School Facilities Projects
G.O. Bond, Series D (FGIC Insured),
5.70%, 8/1/13 213
375 Foothill Eastern Transportation
Corridor Agency Toll Road Senior Lien
Revenue Bond, Series A,
0.00%, 1/1/05 310
1,160 Fremont Unified School District
Alameda County G.O. Refunding Bond,
Series A (FGIC Insured),
0.00%, 8/1/13 602
1,000 Galt Schools Joint Powers Authority
Revenue Refunding Bond, Series A,
High School and Elementary School
Projects (MBIA Insured),
5.75%, 11/1/16 1,051
Imperial Irrigation District COP,
Electrical System Project,
1,600 6.50%, 11/1/07 1,806
200 Refunding (MBIA Insured), 5.20%, 11/1/09 211
200 Lemoore Unified High School District
G.O. Bond (AMBAC Insured),
6.00%, 1/1/12 223
Los Angeles County Metropolitan
Transportation Authority Sales TRB,
Series B, Proposition A (FSA Insured),
1,750 4.75%, 7/1/15 1,685
1,150 4.75%, 7/1/16 1,095
$ 1,000 Proposition C (AMBAC Insured),
4.75%, 7/1/18 $ 916
Los Angeles Department of
Water & Power Electric Plant Revenue
Bond, Second Issue,
2,290 Crossover Refunded, 6.80%, 6/1/01 2,374
1,010 Crossover Refunding, 4.25%, 11/15/14 909
1,500 6.10%, 2/15/17 1,579
2,000 Refunding, 6.375%, 2/1/20 2,080
40 Los Angeles Harbor Department
Revenue Bond, Escrowed to Maturity,
7.60%, 10/1/18 50
450 Los Angeles Unified School District
G.O. Bond, Series A,
6.00%, 7/1/15 500
2,000 Los Angeles Unified School District COP,
Series B (MBIA Insured),
5.00%, 10/1/02 2,034
3,000 Metropolitan Water District Southern
California G.O. Crossover Refunding
Bond, Series A1,
5.50%, 3/1/10 3,121
1,000 Metropolitan Water District Southern
California Waterworks Revenue Bond,
Series A,
5.00%, 7/1/26 932
2,500 MidPeninsula Regional Open Space
District G.O. Refunding Bond,
7.00%, 9/1/14 2,713
1,920 Modesto Irrigation District
Refunding COP, Series B, Capital
Improvements Projects,
5.30% 7/1/22 1,832
1,420 Modesto Revenue Refunding COP,
Water Utility System Refinacing Project
(FGIC Insured),
5.125%, 10/1/17 1,405
720 Monrovia Unified School District
G.O. Bond, Series A (MBIA Insured),
0.00%, 8/1/10 449
200 Oakland G.O. Bond, Measure I
(FGIC Insured),
5.60%,12/15/14 210
</TABLE>
46
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-----------------------------------------------------------------------------
<S> <C> <C>
$ 2,080 Oakland Joint Powers Financing
Authority Lease Revenue Bond Oakland
Administration Buildings (AMBAC Insured),
5.375%, 8/1/11 $ 2,178
250 Paramount Unified School District
G.O. Bond, Series A (FSA Insured),
5.125%, 9/1/19 244
5,140 Poway Unified School District Special Tax
Community Facilities District No. 1
Refunding Bond (MBIA Insured),
4.875%,10/1/17 4,908
500 Riverside Water Revenue Refunding Bond,
5.00%,10/1/18 483
Sacramento Municipal Utility District
Electric Revenue Bond,
1,000 Refunding, Series L (AMBAC Insured),
5.20%, 7/1/16 1,005
3,000 Improvements Refunding, 5.25%, 7/1/28 2,817
Sacramento County Sanitation District
Financing Authority Revenue Bond,
500 5.60%, 12/1/16 514
2,500 6.00%, 12/1/20 2,615
1,250 Sacramento County COP Crossover
Refunding Bond, Public Facilities
Projects (AMBAC Insured),
4.75%, 10/1/17 1,171
1,530 Salinas Sanitation Sewer Systems
Revenue Bond (FGIC Insured),
5.00%, 8/1/20 1,463
500 San Diego County COP, Burnham
Institute,
6.25%, 9/1/29 509
1,050 San Diego County Water Authority
Revenue Refunding COP, Series A,
5.00%, 5/1/16 1,031
450 San Diego Public Facilities Financing
Authority Sewer Revenue Bond, Series B
(FGIC Insured),
5.375%, 5/15/17 456
2,500 San Diego Unified School District
G.O. Bond, Series A (FGIC Insured),
0.00%, 7/1/05 2,018
1,000 San Francisco Bay Area Rapid Transit
District Sales Tax Revenue Refunding Bond,
5.25%, 7/1/17 1,003
$ 1,200 San Francisco City & County
Educational Facilities G.O. Bond, Series A,
Community College Improvements,
5.75%, 6/15/20 $ 1,244
1,000 San Francisco City & County Airport
Commission International Airport
Revenue Refunding Bond, Second
Series Issue 20 (MBIA Insured)
4.75%, 5/1/15 967
4,250 San Francisco State Building Authority
Lease Revenue Bond, Series A,
Department of General Services Lease,
5.00%, 10/1/13 4,274
2,460 San Joaquin Area Flood Control Agency
Improvement Board Act 1915 Flood
Protection and Restoration Special
Assessment Bond (FSA Insured),
5.60%, 9/2/10 2,538
San Jose Redevelopment Agency Tax
Allocation Bond, Merged Area
Redevelopment Project (AMBAC Insured),
2,000 4.75%, 8/1/17 1,874
5,000 4.75%, 8/1/29 4,382
750 San Marino Unified School District
G.O. Bond, Series B,
5.25%, 7/1/20 740
1,150 Santa Margarita-Dana Point Authority
Revenue Refunding Bond, Series B, California
Improvements Districts 3-3a & 4-4a
(MBIA Insured),
7.25%, 8/1/09 1,381
35 Santa Rosa Wastewater Revenue
Refunding Bond, Series A (FGIC Insured),
5.25%, 9/1/16 36
200 Santa Rosa Wastewater Revenue
Refunding Bond, Series A, Subregional
Project (FGIC Insured),
4.75%, 9/1/16 190
South San Francisco Capital Improvements
Financing Authority Revenue Refunding
Bond, Series A, South San Francisco
Redevelopment (ACA Insured)
485 3.85%, 9/1/02 478
1,085 4.20%, 9/1/06 1,053
1,370 4.25%, 9/1/07 1,326
</TABLE>
47
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
CALIFORNIA TAX-EXEMPT BOND FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-----------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 99.9% (CONT'D.)
CALIFORNIA - 88.3% (CONT'D.)
$ 2,000 Southern California Public Power
Authority Power Project Revenue
Refunding Bond, Series A, Mead
Adelanto Project (AMBAC Insured),
4.75%, 7/1/16 $ 1,896
1,250 Turlock Irrigation District Revenue
Refunding Bond, Series A,
6.00%, 1/1/20 1,251
Washington Township Health Care
District Revenue Bond,
100 4.25%, 7/1/05 97
405 5.00%, 7/1/09 407
500 5.00%, 7/1/11 495
1,270 5.00%, 7/1/12 1,244
----------
114,507
----------
PUERTO RICO - 10.4%
3,000 Puerto Rico Commonwealth G.O.
Refunding Bond, Public Improvement,
0.00%, 7/1/04 2,524
2,000 Puerto Rico Commonwealth Highway &
Transportation Authority Highway
Permanent Fixed Option Receipts
Revenue Bond, Series X,
5.20%, 7/1/03 2,040
Puerto Rico Commonwealth
Highway & Transportation Authority
Revenue Bond,
1,600 (MBIA Insured), 5.75%, 7/1/18 1,665
1,000 Series A (AMBAC Insured), 5.00%, 7/1/28 920
Puerto Rico Commonwealth
Infrastructure Financing
Authority Special TRB, Series A
(AMBAC Insured),
3,000 5.00%, 7/1/12 3,040
1,000 5.00%, 7/1/21 937
1,365 Puerto Rico Electric Power
Authority Power Revenue Bond
(FSA Insured),
5.30%, 7/1/20 1,350
$ 1,000 Puerto Rico Municipal Finance
Agency Refunding Revenue Bond,
Series B (FSA Insured),
5.00%, 8/1/03 $ 1,021
----------
13,497
----------
VIRGIN ISLANDS - 1.2%
1,500 Virgin Islands Public Finance
Authority Revenue Bond,
Series A, Gross Receipt Taxes
Lien Note,
5.625%, 10/1/10 1,525
----------
Total Municipal Investments
(cost $127,985) 129,529
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES
(000S)
---------
<S> <C> <C>
OTHER - 0.7%
13 Federated California Municipal Cash
Trust Money Market Fund 13
883 Shearson Lehman Brothers California
Municipal Fund 883
----------
Total Other
(cost $896) 896
----------
Total Investments - 100.6%
(cost $128,881) 130,425
Liabilities less Other Assets - (0.6)% (761)
----------
NET ASSETS - 100% $ 129,664
==========
</TABLE>
48
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
NORTHERN FUNDS Semiannual Report
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
GLOBAL FIXED INCOME FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-----------------------------------------------------------------------------
<S> <C> <C>
DEBT OBLIGATIONS - 89.9%
AUSTRALIAN DOLLAR - 0.2%
70 Commonwealth of Australia,
10.00%, 10/15/02 $ 41
----------
BRITISH POUND STERLING - 5.1%
Treasury of Great Britain,
175 7.50%, 12/7/06 285
230 5.75%, 12/7/09 354
150 8.00%, 6/7/21 312
----------
951
----------
CANADIAN DOLLAR - 2.4%
680 Government of Canada,
5.50%, 6/1/10 444
----------
DANISH KRONE - 1.4%
2,000 Kingdom of Denmark,
8.00%, 3/15/06 262
----------
EURO - 44.8%
590 Buoni Poliennali del Tes
5.25%, 11/1/29 472
800 Corp Andina de Fomento,
4.75, 5/6/04 668
420 FHLMC,
5.75%, 9/15/10 369
400 FKI PLC,
6.625%, 2/22/10 348
Federal Republic of Germany,
450 6.25%, 1/4/24 426
210 6.50%, 7/4/27 206
400 Fort James Corp.,
4.75%, 6/29/04 332
300 Halifax Group,
7.627%, 12/9/11 264
250 Household Finance Corp.,
5.125%, 6/24/09 198
200 Invensys PLC,
5.50%, 4/1/05 170
400 Imperial Tobacco Finance,
6.375%, 9/27/06 347
400 Kelda Group PLC,
5.25%, 7/26/06 332
400 Kingdom of Spain,
4.25%, 7/30/02 $ 347
400 Lehman Brothers Holdings PLC,
4.00%, 2/18/03 339
400 Osprey Trust,
6.375%, 1/15/03 355
400 North West Water Finance,
4.875%, 3/18/09 311
375 Republic of Italy,
3.00%, 6/15/02 319
400 Republic of Lithuania,
7.875%, 4/14/03 363
400 Republic of South Africa,
7.00%, 10/14/04 354
400 Royal Bank of Scotland Group PLC,
6.77%, 3/31/05 355
200 Stagecoach Holdings PLC,
6.00%, 11/24/04 161
400 Telefonica De Espana,
4.50%, 4/14/09 305
400 Telekom S.A. Ltd.,
7.125%, 4/12/05 341
400 Unicredito Capital Trust,
8.048%, 10/5/10 354
400 VNU N.V.,
6.625%, 5/30/07 357
----------
8,393
----------
JAPANESE YEN - 13.3%
55,000 Asian Development Bank,
5.00%, 2/5/03 559
50,000 Government of Canada,
1.90%, 3/23/09 468
50,000 International Bank for Reconstruction
and Development,
4.50%, 3/20/03 506
60,000 Japan Development Bank,
1.75%, 6/21/10 546
45,000 KFW International Finance,
1.00%, 12/20/04 415
----------
2,494
----------
SWEDISH KRONA - 1.1%
1,600 Kingdom of Sweden,
9.00%, 4/20/09 208
----------
</TABLE>
49
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
GLOBAL FIXED INCOME FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000S) (000S)
-----------------------------------------------------------------------------
<S> <C> <C>
DEBT OBLIGATIONS - 89.9% (CONT'D.)
UNITED STATES DOLLAR - 21.6%
$ 1,000 FNMA,
5.625%, 5/14/04 $ 970
200 KPN N.V.,
8.00%, 10/01/10 200
U.S. Treasury Bonds,
700 6.50%, 2/15/10 729
600 8.75%, 5/15/17 763
600 8.875%, 2/15/19 780
400 6.375%, 8/15/27 417
200 Unicredito Capital Trust,
9.20%, 10/5/10 200
----------
4,059
----------
Total Debt Obligations
(cost $17,521) 16,852
----------
SHORT-TERM INVESTMENT - 4.6%
(cost $857)
UNITED STATES DOLLAR
857 Bayerische Hypo-Und Vereinsbank,
GRAND CAYMAN,
EURODOLLAR TIME DEPOSITS,
6.72%, 10/2/00 857
----------
Total Investments - 94.5%
(cost $18,378) 17,709
Other Assets less Liabilities - 5.5% 1,028
----------
NET ASSETS - 100.0% $ 18,737
==========
</TABLE>
50
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
NORTHERN FUNDS Semiannual Report
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
HIGH YIELD MUNICIPAL FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL
INVESTMENTS - 88.0%
ALASKA - 1.0%
$ 300 Alaska Industrial Development and Export
Authority Power Revenue Bonds (AMT),
Upper Lynn Canal Regional Power,
5.875%, 1/1/32 $ 264
-------
ARIZONA - 4.9%
400 Coconino County Arizona Pollution
Control Corp. Revenue Bonds, Series A
(AMT), Tucson Electric Power Navajo,
7.125%, 10/1/32 401
500 Maricopa County PCR Refunding Bond,
El Paso Electric Co.,
6.15%, 12/1/14 500
500 Peoria Arizona IDA Non-Profit Revenue
Refunding Bonds, Series A, Sierra
Winds Life,
6.25%, 8/15/20 435
-------
1,336
-------
ARKANSAS - 2.2%
500 Little Rock Arkansas Hotel & Restaurant
Gross Receipts Tax Revenue Refunding
Bonds,
7.375%, 8/1/15 589
-------
CALIFORNIA - 3.7%
500 Sacramento Financing Authority Revenue
Bonds, Series A, Convention Center Hotel
Project,
6.25%, 1/1/30 492
500 San Diego County COP Bonds,
The Burnham Institute,
5.70%, 9/1/11 523
-------
1,015
-------
COLORADO - 1.0%
250 Denver City & County Airport Revenue
Bonds, Series A, Prerefunded,
7.25%, 11/15/02 268
-------
DISTRICT OF COLUMBIA - 1.3%
$ 400 District of Columbia Revenue Bonds,
Methodist Home of the District of
Columbia Issue,
6.00%, 1/1/20 $ 343
-------
FLORIDA - 8.3%
500 Crossings at Flemming Island Community
Development Authority Revenue
Refunding Bond, Series C
7.05%, 5/1/15 517
500 Heritage Palms Community Development
District Capital Improvement Revenue
Bonds,
6.25%, 11/1/04 500
250 Lee County IDA Health Care Facilities
Revenue Bonds, Series A, Shell Point
Village Project,
5.75%, 11/15/15 227
500 Poinciana Community Development
District Revenue Bond, Series A,
Special Assessment
7.125%, 5/1/31 503
500 Vista Lakes Community Development
District Capital Improvement Revenue
Bond, Series B,
6.35%, 5/1/05 500
-------
2,247
-------
GEORGIA - 0.7%
500 Bibb County Development Authority
Multifamily Revenue Bonds, Series A,
Emerald Coast Housing II, Inc.,(1)
7.25%, 11/1/28 200
-------
IDAHO - 1.8%
500 Power County Idaho Industrial
Development Corp. Solid Waste Disposal
Revenue Bonds (AMT), FMC Corp.,
6.45%, 8/1/32 496
-------
INDIANA - 1.6%
500 South Bend Indiana Economic
Development Revenue Bonds, Series A,
Southfield Village, Inc.,
6.25%, 11/15/29 420
-------
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
51
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
HIGH YIELD MUNICIPAL FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL
INVESTMENTS - 88.0% (CONT'D.)
IOWA - 1.8%
$ 500 Bremer County Health Care & Residential
Facilities Revenue Bonds, Bartels Lutheran
Home Project,
7.25%, 11/15/29 $ 482
-------
KANSAS - 1.9%
500 Olathe Kansas Senior Living Facilities
Revenue Bonds, Series A, Aberdeen
Village, Inc.,
8.00%, 5/15/30 499
-------
KENTUCKY - 1.9%
500 Jefferson County Student Housing
Industrial Building Revenue Bonds,
Series A, Collegiate Housing Foundation,
7.125%, 9/1/29 501
-------
LOUISIANA - 2.7%
250 St. Charles Parish PCR Refunding
Bonds, Union Carbide Corp. Project,
5.10%, 1/1/12 232
500 West Feliciana Parish PCR Refunding
Bonds, Series A, Entergy Gulf States, Inc.,
5.65%, Mandatory Put 9/1/04 499
-------
731
-------
MAINE - 1.9%
500 Maine Finance Authority Solid Waste
Disposal Revenue Bonds (AMT), Boise
Cascade Corp. Project,
7.90%, 6/1/15 509
-------
MARYLAND - 1.9%
500 Anne Arundel County Special Obligation
Revenue Bond, National Business Park
Project,
7.375%, 7/1/28 505
-------
MASSACHUSETTS - 1.2%
400 Massachusetts State Health & Educational
Facilities Authority Revenue Bonds,
Series A, Caritas Christi Obligated Group,
5.625%, 7/1/20 336
-------
MISSISSIPPI - 1.7%
$ 500 Mississippi Business Finance Corp. PCR
Refunding Bonds, Systems Energy
Resources, Inc. Project,
5.90%, 5/1/22 $ 465
-------
MISSOURI - 2.7%
500 Howard Bend Levee District Special Tax
Bonds, 5.85%, 3/1/19 487
250 St. Louis Airport Revenue Bond,
6.25%, 1/1/02 253
-------
740
-------
NEVADA - 2.6%
260 Clark County PCR Refunding Bonds,
Series D, Nevada Power Co. Project,
5.45%, 10/1/23 222
500 State Director Department of Business
and Industry Revenue Bond,
Las Vegas Monorail Project,
7.375%, 1/1/40 480
-------
702
-------
NEW HAMPSHIRE - 1.7%
500 New Hampshire Business Finance
Authority Revenue Refunding Bond,
Series D (AMT), Public Service Co. of
New Hampshire,
6.00%, 5/1/21 466
-------
NEW JERSEY - 1.9%
500 New Jersey Economic Development
Authority Special Facilities Revenue Bonds
(AMT), Continental Airlines, Inc. Project,
6.625%, 9/15/12 509
-------
NEW MEXICO - 1.7%
460 New Mexico Educational Assistance
Foundation Student Loan Revenue Bonds,
Second Subordinate, Series II-C (AMT),
6.00%, 12/1/08 454
-------
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
52
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-------------------------------------------------------------------
<S> <C> <C>
NEW YORK - 7.2%
$ 400 New York City G.O. Bonds, Series H,
5.25%, 3/15/18 $ 376
500 New York State Dormitory Authority
Revenue Bond, Series A, Mount Sinai Health,
6.75%, 7/1/20 525
New York State Local Government
Assistance Corp. Revenue Bonds,
500 Series A, Prerefunded, 6.70%, 4/1/02 526
500 Series B, Prerefunded, 7.50%, 4/1/01 518
-------
1,945
-------
NORTH CAROLINA - 3.8%
500 North Carolina Eastern Municipal Power
Agency Power System Revenue Refunding
Bonds, Series B,
6.125%, 1/1/09 517
500 North Carolina Municipal Power Agency
No. 1 Catawba Electric Revenue Bonds,
Series B,
6.375%, 1/1/13 515
-------
1,032
-------
OKLAHOMA - 1.8%
500 Langston Economic Development
Authority Student Housing Revenue Bond,
Series A, Langston Community
Development Corp.,
7.75%, 8/1/30 497
-------
OREGON - 1.7%
500 Klamath Falls Oregon Electric Revenue
Refunding Bonds, Senior Lien, Klamath
Cogeneration Project,
6.00%, 1/1/25 447
-------
PENNSYLVANIA - 12.5%
100 Beaver County IDA PCR Refunding Bonds,
Series A, Cleveland Electric
Illuminating Co.,
7.75%, 7/15/25 106
500 Carbon County IDA Resource Recovery
Refunding Bond (AMT), Panther Creek
Partners Project,
6.65%, 5/1/10 509
$ 270 Delaware County Authority College
Revenue Bonds, Series B, Eastern College,
5.50%, 10/1/24 $ 236
500 Montgomery County Higher Education &
Health Authority Revenue Bonds, Series A,
Philadelphia Geriatric Center,
7.25%. 12/1/19 473
500 Montgomery County Higher Education &
Health Authority Revenue Bonds, Temple
Continuing Care Center,
6.625%, 7/1/19 445
400 Pennsylvania Economic Development
Financing Authority Exempt Facility
Revenue Bonds, Series A (AMT), National
Gypsum Co., Shippingport Project,
6.25%, 11/1/27 364
500 Pennsylvania State Higher Educational
Facilities Authority Student Housing
Revenue Bond, Series A, Student
Association, Inc. Project,
6.75%, 9/1/32 480
500 Philadelphia Hospitals and Higher
Education Facilities Revenue Bonds,
Chestnut Hill College,
6.00%, 10/1/29 437
400 Philadelphia Hospitals and Higher
Education Facilities Revenue Bonds,
Temple University Children's Medical
Center,
5.625%, 6/15/19 330
-------
3,380
-------
PUERTO RICO - 1.9%
500 Puerto Rico Industrial Tourist Educational
Medical and Environmental Control
Facilities Revenue Bond (AMT), AES Puerto
Rico Project,
6.625%, 6/1/26 521
-------
SOUTH CAROLINA - 1.9%
500 Florence County IDR Bond, Stone
Container Corp.,
7.375%, 2/1/07 502
-------
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
53
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
HIGH YIELD MUNICIPAL FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL INVESTMENTS - 88.0% (CONT'D.)
TEXAS - 3.5%
$ 500 Brazos River Authority PCR Refunding
Bond, Series A, Texas Utility Electric Co.,
5.00%, Mandatory Put 4/1/01 $ 501
500 Matagorda County Navigation District
No. 1 Revenue Refunding Bond, Series B
(AMT), Reliant Energy, Inc. Project,
5.95%, 5/1/30 452
-------
953
-------
VERMONT - 1.6%
500 Vermont Educational & Health Buildings
Financing Agency Healthcare Facility
Revenue Bonds, Copley Manor Project,
6.15%, 4/1/19 433
-------
Total Municipal Investments
(cost $24,720) 23,787
-------
NUMBER
OF SHARES
(000s)
---------
OTHER - 9.4%
(cost $2,549)
2,549 Federated Tax-Free Trust Money Market
Fund No. 15 2,549
-------
Total Investments - 97.4%
(cost $27,269) 26,336
Other Assets less Liabilities - 2.6% 712
-------
NET ASSETS - 100.0% $27,048
=======
</TABLE>
(1) Non-income producing security. Issuer has defaulted on terms of debt
obligation. At September 30, 2000, value represents 0.7% of net assets.
SEE NOTES TO THE FINANCIAL STATEMENTS.
54
<PAGE>
NORTHERN FUNDS Semiannual Report
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
HIGH YIELD FIXED INCOME FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS - 93.2%
AEROSPACE - 1.6%
$ 3,000 Dunlop Standard Aerospace
Holdings PLC, Senior Notes,
11.875%, 5/15/09(1) $ 3,097
-------
AIRLINES - 1.0%
2,000 Aircraft Finance Trust
Subordinated Bond, Series 1999 - 1A,
Class D, 11.00%, 5/15/24(1) 2,000
-------
AUTO PARTS & EQUIPMENT - 0.8%
2,000 JL French Automotive Castings, Inc.,
Senior Subordinated Notes,
11.50%, 6/1/09(1) 1,480
-------
BUILDING, RESIDENTIAL/COMMERCIAL - 3.5%
3,000 D.R. Horton, Inc.,
Senior Subordinated Notes,
9.75%, 9/15/10 2,910
4,000 K Hovnanian Enterprises, Inc.,
10.50%, 10/1/07(1) 3,915
-------
6,825
-------
CHEMICALS - 3.1%
3,000 Avecia Group PLC,
11.00%, 7/1/09 2,955
3,000 Huntsman ICI Chemicals LLC
Senior Subordinated Notes,
10.125%, 7/1/09(1) 2,944
-------
5,899
-------
COMMERCIAL SERVICES - 4.8%
5,000 Avis Rent A Car, Inc.,
Senior Subordinated Notes,
11.00%, 5/1/09(1) 5,425
1,500 Building One Services Corp.,
Senior Subordinated Notes,
10.50%, 5/1/09 1,314
3,500 NationsRent, Inc.,
Senior Subordinated Notes,
10.375%, 12/15/08 2,590
-------
9,329
-------
COMPUTERS - 1.6%
$ 3,001 S C G Holding Corp.,
Senior Subordinated Notes,
12.00%, 8/1/09(1) $ 3,151
-------
DIVERSIFIED FINANCIAL SERVICES - 3.6%
Advanta Corp. Medium Term FRN,
2,000 7.17%, 7/23/01 1,931
500 7.30%, 7/30/01 488
2,500 PTC International Finance,
11.25%, 12/1/09(1) 2,500
2,000 Sovereign Bancorp, Senior Notes,
10.25%, 5/15/04 2,027
-------
6,946
-------
ELECTRIC - 2.3%
AES Corp., Senior Notes,
2,750 9.50%, 6/1/09 2,812
1,500 9.375%, 9/15/10 1,522
-------
4,334
-------
ELECTRONICS - 2.4%
2,000 Knowles Electronics, Inc.,
Senior Subordinated Notes,
13.125%, 10/15/09(1) 1,900
2,550 Flextronics International Ltd.,
Senior Subordinated Notes,
9.875%, 07/1/10(1) 2,620
-------
4,520
-------
FOOD & BEVERAGE - 3.3%
2,500 Luigino's, Inc., Senior
Subordinated Notes,
10.00%, 2/1/06(1) 1,975
4,000 Triarc Consumer Products Group LLC
Senior Subordinated Notes,
10.25%, 2/15/09(1) 4,450
-------
6,425
-------
GAMING - 3.7%
2,000 Autotote Corp.,
12.50%, 8/15/10(1) 2,030
5,000 MGM Mirage, Inc.,
8.50% 9/15/10 5,005
-------
7,035
-------
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS
55
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
HIGH YIELD FIXED INCOME FUND(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
-----------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS - 93.2% (CONT'D.)
HEALTH CARE - 2.8%
$ 3,500 Dynacare, Inc., Senior Notes,
10.75%, 1/15/06 $ 3,412
2,000 Iasis Healthcare Corp.,
Senior Subordinated Notes,
13.00%, 10/15/09(1) 2,065
-------
5,477
-------
INSURANCE - 2.0%
Conseco, Inc.,
1,000 7.875%, 12/15/00 980
2,550 8.50%, 10/15/02 2,818
-------
3,798
-------
INTERNET - 2.3%
2,500 Globix Corp., Senior Notes,
12.50% 2/1/10(1) 1,775
PSINet, Inc. Senior Notes,
2,000 10.50%, 12/1/06(1) 1,300
2,000 11.00%, 8/1/09 1,300
-------
4,375
-------
IRON/STEEL - 0.2%
2,500 Republic Technologies International/
RTI Capital Corp.,
13.75%, 7/15/09(1) 450
-------
LODGING - 1.5%
3,000 HMH Properties,
7.875%, 08/01/05 2,827
-------
MISCELLANEOUS MANUFACTURING - 4.1%
2,000 Gentek, Inc.,
Senior Subordinated Notes,
11.00%, 8/1/09(1) 2,045
2,000 Selmer Co., Inc.,
Senior Subordinated Notes,
11.00%, 5/15/05 2,062
1,500 Tekni-Plex, Inc.,
Senior Subordinated Notes,
12.75%, 06/15/10(1) 1,478
2,500 Terex Corp., Senior Subordinated Notes,
Series D, 8.875%, 4/1/08 2,275
-------
7,860
-------
MEDIA, CABLE & RADIO - 11.4%
$ 2,500 American Media Operations, Inc.,
Senior Subordinated Notes,
10.25%, 5/1/09 $ 2,437
4,000 Chancellor Media,
Senior Subordinated Notes,
8.125%, 12/15/07 4,040
2,500 Callahan Nordhein, Senior Notes,
14.00%, 7/15/10(1) 2,487
2,500 Charter Communications Holdings LLC
Senior Notes,
8.625%, 4/1/09(1) 2,447
Telewest Communications PLC
Senior Notes,
2,000 11.00%, 10/1/00(1) 1,915
1,500 9.875%, 10/1/07 1,373
United Pan-Europe Communications N.V.
500 Senior Notes, Series B,
10.875%, 8/1/07 435
1,500 Senior Notes,
11.25%, 2/1/10(1) 1,313
3,000 WRC Media Co.,
12.75%, 11/15/09(1) 2,734
2,000 XM Satellite Radio, Inc.,
14.00%, 3/15/10(1) 1,400
1,500 Ziff Davis Media Inc.,
12.00%, 7/15/10(1) 1,485
-------
22,066
-------
OIL & GAS PRODUCERS AND SERVICES - 3.2%
500 Comstock Resources, Inc.,
Senior Notes,
11.25%, 5/1/07(1) 525
2,000 Key Energy Services, Inc.,
Senior Subordinated Notes,
14.00%, 1/15/09 2,275
2,000 Plains Resources, Inc.,
Senior Subordinated Notes,
10.25%, 3/15/06(1) 2,030
1,400 R&B Falcon, Corp.,
9.125%, 12/15/03 1,421
-------
6,251
-------
</TABLE>
56
SEE NOTES TO THE FINANCIAL STATEMENTS
<PAGE>
NORTHERN FUNDS Semiannual Report
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
--------------------------------------------------------------------------------
<S> <C> <C>
PACKAGING - 3.2%
$ 2,000 Consolidated Container Co., LLC
Senior Subordinated Notes,
10.125%, 7/15/09(1) $ 2,003
4,000 Stone Container Corp.,
Senior Notes,
11.50%, 10/1/04 4,110
-------
6,113
-------
PAPER PRODUCTS - 1.1%
2,600 Tjiwi Kimia International,
13.25%, 8/1/01 2,210
-------
REAL ESTATE INVESTMENT TRUSTS - 1.5%
2,000 Crescent Real Estate Equities L.P. Notes,
7.00%, 9/15/02 1,880
1,000 Felcor Lodging, Senior Notes,
9.50%, 9/15/08(1) 993
-------
2,873
-------
REMEDIATION SERVICES - 1.1%
2,500 IT Group, Inc.,
Senior Subordinated Notes,
11.25%, 4/1/09(1) 2,188
-------
SPECIAL PURPOSE - 1.0%
1,917 GS Escrow Corp.,
6.75%, 08/01/01 1,887
-------
STRUCTURED TRADE RECEIVABLE NOTE - 1.0%
2,000 Bunge Trade Ltd. Note,
9.25%, 5/1/02(1) 1,995
-------
TELECOMMUNICATIONS - 24.1%
1,000 360Networks Inc., Senior Notes,
13.00% 5/1/08 910
2,975 Adelphia Business Solutions, Inc.,
12.875%, 10/15/07(3) 1,785
1,500 Airgate PCS, Inc.,
Senior Discount Notes,
13.50%, 10/1/09 904
2,500 Alamosa PCS Holdings, Inc.,
12.875%, 2/15/10 1,350
2,330 Allegiance Telecom, Inc.,
Senior Notes,
12.875%, 5/15/08 2,336
Focal Communications Corp.,
Senior Discount Notes, Series 1998 B,
$ 1,000 12.125%, 2/15/08(2) $ 470
3,250 Senior Notes,
11.875% 1/15/10(1) 2,470
Global Crossing Holding Ltd.,
2,000 Senior Notes,
9.125% 11/15/06(1) 1,980
1,000 Senior Notes,
9.625%, 5/15/08 1,000
1,500 Horizon PCS, Inc.,
14.00%, 10/1/10(2) 765
2,000 Hyperion Telecom, Senior Notes,
9.625%, 5/15/08 1,810
1,500 IPCS, Inc.,
14.00%, 7/15/10(1) 825
Leap Wireless,
2,500 Senior Notes,
12.50%, 4/15/10(1)(2) 2,200
Senior Discount Notes,
1,000 14.50%, 4/15/10(1) 395
2,000 Level 3 Communications, Inc.,
Senior Notes,
9.125%, 5/1/08 1,910
2,750 Madison River Finance, Senior Notes,
13.25%, 3/1/10(1) 2,200
3,000 Metromedia Fiber Networks, Inc.,
Senior Notes,
10.00%, 12/15/09 2,805
4,000 Nextel Intl. Inc.,
12.75%, 8/1/10(1) 3,920
1,500 Nextel Partners PCS, Inc.,
14.00%, 10/1/10(1) 1,511
3,000 NEXTLINK Communications, Inc.,
Senior Notes,
10.75%, 6/1/09(1) 2,775
2,500 Rhythms NetConnections,
Senior Notes,
12.75%, 4/15/09(1) 1,625
2,500 Telecorp PCS Inc.,
Senior Subordinated Notes,
10.625%, 7/15/10(1) 2,525
3,500 Versatel, Senior Notes,
13.25% 5/15/08 3,133
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS
57
<PAGE>
SCHEDULES OF INVESTMENTS SEPTEMBER 30, 2000 (UNAUDITED)
HIGH YIELD FIXED INCOME FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS - 93.2% (CONT'D.)
TELECOMMUNICATIONS - 24.1% (CONT'D.)
$ 3,000 Voicestream Wire, Senior Notes,
10.375%, 11/15/09 $ 3,240
2,000 Worldwide Fiber, Inc., Senior Notes,
12.00%, 8/1/09 1,780
-------
46,624
-------
TRANSPORTATION - 0.5%
2,500 RailWorks Corp.,
Senior Subordinated Notes,
11.50%, 4/15/09 875
-------
WATER - 0.5%
1,000 Azurix Corp., Senior Notes,
10.75%, 2/15/10(1) 920
-------
Total Corporate Bonds
(cost $193,059) 179,830
-------
NUMBER
OF SHARES
(000S)
---------
CONVERTIBLE PREFERRED STOCK - 0.1%
(cost $883)
15,000 PSINet, Inc. 246
-------
WARRANTS - 0.2%
(cost $0)
3,500 Leap Wireless International, Exp., 4/15/10 40
3,000 Maxcom Telecom, Exp., 4/1/07 -
2,500 Republic Technologies International
Corp., Exp., 7/15/09 -
4,059 WRC Media Co., Exp., 11/15/09 -
2,000 XM Satellite Radio, Exp., 3/15/10 280
-------
320
-------
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
------------------------------------------------------------------
SHORT-TERM INVESTMENT - 4.0%
(cost $7,741)
$ 7,741 Bayerische Hypo-Und Vereinsbank,
GRAND CAYMAN,
Eurodollar Time Deposits,
6.72%, 10/2/00 $ 7,741
-------
Total Investments - 97.5%
(cost $201,683) 188,137
Other Assets less Liabilities - 2.5% 4,901
-------
NET ASSETS - 100.0% 193,038
=======
</TABLE>
(1) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September 30,
2000, the value of these securities amounted to approximately $93,461,000
or 48.4% of net assets.
(2) Deferred interest rate note. Currently zero coupon under the terms of
agreement.
(3) Pay-in-Kind (PIK) note. Currently shares received in lieu of interest
payments
58
SEE NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
NORTHERN FUNDS Semiannual Report
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 (UNAUDITED)
1. ORGANIZATION
Northern Funds, (the "Trust") is a Delaware business trust, which was formed on
February 7, 2000, and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company. The U.S. Government,
Short-Intermediate U.S. Government, Intermediate Tax-Exempt, California
Intermediate Tax-Exempt, Florida Intermediate Tax-Exempt, Fixed Income,
Tax-Exempt, Arizona Tax-Exempt, California Tax-Exempt, Global Fixed Income
(formerly known as International Fixed Income Fund), High Yield Municipal and
High Yield Fixed Income Funds (collectively the "Funds") are separate,
diversified investment portfolios of the Trust, except for the California
Intermediate Tax-Exempt, Florida Intermediate Tax-Exempt, Arizona Tax-Exempt,
California Tax-Exempt and Global Fixed Income Funds, which are non-diversified
portfolios of the Trust. Non-diversified portfolios may invest a relatively high
percentage of their net assets in obligations of a limited number of issuers.
Each of the Funds maintains its own investment objective. The Funds were
formerly series of Northern Funds, a Massachusetts business trust, and were
reorganized into the Trust on July 31, 2000. The Northern Trust Company
("Northern Trust" or the "Adviser") serves as investment adviser to the Funds.
Northern Trust also serves as custodian, co-administrator, fund accountant and
transfer agent for the Funds.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds. These policies are in conformity with generally accepted
accounting principles in the United States or "GAAP". The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
A VALUATION OF SECURITIES - Short-term investments held by the Funds are
valued using the amortized cost method, which approximates market value.
Under this method, investments purchased at a discount or premium are
valued by amortizing the difference between the original purchase price and
maturity value of the issue over the period to maturity. Securities which
are traded on a recognized U.S. or foreign securities exchange are
generally valued at the last quoted sales price on the securities exchange
on which the securities are primarily traded. If securities traded on a
foreign securities exchange are not traded on a valuation date, they will
be valued at the most recent quoted sales price. Securities that are traded
in the U.S. over-the-counter markets, absent a last quoted sales price, are
valued at the last quoted bid price. Securities which are traded in the
foreign over-the-counter markets are generally valued at the last sales
price. Insurance funding agreements are valued at cost plus accrued
interest, which approximates market value. Any securities for which no
current quotations are readily available are valued at fair value as
determined in good faith by the Adviser under the supervision of the Board
of Trustees.
B REPURCHASE AGREEMENTS - During the term of a repurchase agreement, the
market value of the underlying collateral, including accrued interest, is
required to equal or exceed the market value of the repurchase agreement.
The underlying collateral for all repurchase agreements is held in a
customer-only account of Northern Trust, as custodian for the Funds, at the
Federal Reserve Bank of Chicago.
C FUTURES CONTRACTS - Certain Funds may enter into long financial futures
contracts to maintain liquidity or short financial futures contracts for
hedging purposes. These Funds may also enter into futures contracts for
speculative purposes. Futures contracts are valued based upon their quoted
daily settlement prices; changes in initial settlement value are accounted
for as unrealized appreciation (depreciation) until the contracts are
terminated at which time realized gains and losses are recognized.
A Fund bears the market risk arising from changes in the value of
these financial instruments. At the time a Fund enters into a futures
contract, it is required to make a margin deposit in a segregated account
of a specified amount of cash or eligible securities. Subsequently, as the
market price of the futures contract fluctuates, gains and losses are
recognized and payments are made on a daily basis between the Fund and the
broker. The Statements of Operations reflect gains and losses as realized
for closed futures contracts and as unrealized for open contracts. There
were no outstanding futures contracts at September 30, 2000.
D STRIPPED SECURITIES - Stripped securities represent the right to receive
future interest payments (interest only stripped securities) or principal
payments (principal only stripped
59
<PAGE>
securities). The value of variable rate interest only stripped securities
varies directly with changes in interest rates, while the value of fixed
rate interest only stripped securities and the value of principal only
stripped securities vary inversely with changes in interest rates.
E FOREIGN CURRENCY TRANSLATIONS - Values of investments denominated in
foreign currencies are converted into U.S. dollars using the spot market
rate of exchange at the time of valuation. Purchases and sales of
investments, interest and dividend income are translated into U.S. dollars
using the spot market rate of exchange prevailing on the respective dates
of such transactions. The gains or losses on investments resulting from
changes in foreign exchange rates are included with net realized and
unrealized gains (losses) on investments.
F FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS - The Funds are authorized to
enter into forward foreign currency exchange contracts for the purchase or
sale of a specific foreign currency at a fixed price on a future date as a
hedge against either specific transactions or portfolio positions, or as a
cross-hedge transaction or for speculative purposes. The objective of a
Fund's foreign currency hedging transactions is to reduce the risk that the
U.S. dollar value of a Fund's foreign currency denominated securities will
decline in value due to changes in foreign currency exchange rates. All
forward foreign currency contracts are "marked-to-market" daily at the
applicable translation rates and any resulting unrealized gains or losses
are recorded in a Fund's financial statements. A Fund records realized
gains or losses at the time the forward contract is offset by entering into
a closing transaction or extinguished by delivery of the currency. Risks
may arise upon entering into these contracts from the potential inability
of counterparties to meet the terms of their contracts and from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar. The contractual amounts of forward foreign currency exchange
contracts do 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.
At September 30, 2000, Global Fixed Income Fund had outstanding
contracts as follows:
<TABLE>
<CAPTION>
CONTRACT CONTRACT
AMOUNT AMOUNT UNREALIZED
(LOCAL (U.S. GAIN/
CONTRACT DELIVERY CURRENCY) DOLLARS) (LOSS)
TYPE CURRENCY DATE (000S) (000S) (000S)
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Buy British Pounds 11/27/2000 $1,708 $2,424 $103
Sell British Pounds 11/27/2000 2,342 3,377 (86)
Buy Euro 11/27/2000 8,173 7,262 (30)
Sell Euro 11/27/2000 3,972 3,447 (68)
Sell Japanese Yen 11/27/2000 270,000 2,569 47
Buy Swiss Franc 11/27/2000 2,715 1,540 38
Sell Swiss Franc 11/27/2000 2,579 1,504 4
--
Net Unrealized Gain: $8
==
</TABLE>
G INVESTMENT TRANSACTIONS AND INCOME - Investment transactions are recorded
as of the trade date. The Funds determine the gain or loss realized from
investment transactions by using an identified cost basis method. Dividend
income is recognized on the ex-dividend date and interest income is
recognized on an accrual basis and includes amortization of discounts and
premiums. Dividends from foreign securities are recorded on ex-date, or as
soon as the information is available.
H EXPENSES - The Funds are charged for those expenses that are directly
attributable to each Fund. Expenses that are not directly attributable to a
Fund are typically allocated among the Funds in proportion to their
respective net assets.
I DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income are
declared and paid as follows:
<TABLE>
<CAPTION>
DECLARATION PAYMENT
FREQUENCY FREQUENCY
-------------------------------------------------------------------------------
<S> <C> <C>
U.S. Government Daily Monthly
Short-Intermediate U.S. Government Daily Monthly
Intermediate Tax-Exempt Daily Monthly
California Intermediate Tax-Exempt Daily Monthly
Florida Intermediate Tax-Exempt Daily Monthly
Fixed Income Daily Monthly
Tax-Exempt Daily Daily Monthly
Arizona Tax-Exempt Daily Monthly
California Tax-Exempt Daily Monthly
Global Fixed Income Quarterly Quarterly
High Yield Municipal Daily Monthly
High Yield Fixed Income Daily Monthly
-------------------------------------------------------------------------------
</TABLE>
60
<PAGE>
Distributions of net realized capital gains, if any, are declared at
least annually. Distributions to shareholders are recorded on the
ex-dividend date.
The timing and character of distributions determined in accordance
with federal income tax regulations may differ from financial statement
amounts determined in accordance with GAAP due to differences in the
treatment and recognition of investment income and realized gains (losses).
These differences are primarily related to foreign currency transactions,
deferral of wash sales and capital loss carryforwards. Certain differences
in treatment of income and capital gains for distributions, which are
permanent, may result in periodic reclassifications in the Funds' capital
accounts.
During the six months ended September 30, 2000 all of the dividends
derived from net investment income paid by each of the Intermediate
Tax-Exempt, Florida Intermediate Tax-Exempt, California Intermediate
Tax-Exempt, Tax-Exempt, Arizona Tax-Exempt, California Tax-Exempt and High
Yield Municipal Funds were "exempt-interest dividends," excludable from
gross income for Federal income tax purposes. Further, all such dividends
paid by the California Intermediate Tax-Exempt and California Tax-Exempt
Funds were "California exempt-interest dividends," exempt from California
state personal income tax.
J FEDERAL INCOME TAXES - No provision for federal income taxes has been made
since the Funds intend to comply with the requirements of the Internal
Revenue Code available to regulated investment companies and to distribute
substantially all of their taxable income to their shareholders.
3. INVESTMENT ADVISORY AND OTHER AGREEMENTS
Pursuant to its advisory agreement with the Funds, the Adviser is entitled to
receive a fee, calculated daily and payable monthly, at the annual rates
presented below as applied to each Fund's daily net assets. For the six months
ended September 30, 2000, the Adviser voluntarily agreed to waive a portion of
its advisory fees as shown on the accompanying Statements of Operations.
Northern Trust also reimbursed the Funds as shown on the accompanying Statements
of Operations to adhere to the expense limitations presented in the following
table:
<TABLE>
<CAPTION>
ANNUAL ADVISORY
ADVISORY FEES AFTER EXPENSE
FEES WAIVERS LIMITATIONS
-------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Government 0.75% 0.75% 0.90%
Short-Intermediate
U.S. Government 0.75% 0.75% 0.90%
Intermediate Tax-Exempt 0.75% 0.70% 0.85%
California Intermediate
Tax-Exempt 0.75% 0.70% 0.85%
Florida Intermediate
Tax-Exempt 0.75% 0.70% 0.85%
Fixed Income 0.75% 0.75% 0.90%
Tax-Exempt 0.75% 0.70% 0.85%
Arizona Tax-Exempt 0.75% 0.70% 0.85%
California Tax-Exempt 0.75% 0.70% 0.85%
Global Fixed Income 0.90% 0.90% 1.15%
High Yield Municipal 0.75% 0.70% 0.85%
High Yield Fixed Income 0.75% 0.75% 0.90%
-------------------------------------------------------------------------------
</TABLE>
The waivers and reimbursements described above are voluntary and may be
terminated at any time. The Funds have a co-administration agreement with
Northern Trust and PFPC, Inc. ("the co-administrators") for certain
administrative services. Pursuant to their co-administration agreement with the
Funds, the co-administrators are entitled to receive a fee, computed daily and
payable monthly, at the annual rate of 0.15% of each Fund's daily net assets.
4. BANK LOANS
The Funds maintain a $50,000,000 revolving bank credit line for liquidity and
other purposes. Borrowings under this arrangement bear interest at .45% above
the Fed Funds rate.
As of September 30, 2000, there were no outstanding borrowings.
61
<PAGE>
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the six months ended September 30, 2000 were as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------------------------------------------------------------------
U.S. U.S.
AMOUNTS IN THOUSANDS GOVERNMENT OTHER GOVERNMENT OTHER
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government $ 50,267 $ -- $ 66,863 $ --
Short-Intermediate U.S. Government 43,979 -- 35,066 --
Intermediate Tax-Exempt -- 140,811 -- 156,167
California Intermediate Tax-Exempt -- 34,487 -- 35,931
Florida Intermediate Tax-Exempt -- 27,342 -- 29,176
Fixed Income 385,421 68,826 289,775 153,693
Tax-Exempt -- 291,201 -- 307,412
Arizona Tax-Exempt -- 32,319 -- 30,732
California Tax-Exempt -- 28,314 -- 23,540
Global Fixed Income 2,331 18,016 450 16,372
High Yield Municipal -- 7,669 -- 2,129
High Yield Fixed Income -- 117,254 -- 75,912
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
At September 30, 2000, for federal tax purposes, gross unrealized
appreciation, gross unrealized depreciation, net unrealized appreciation
(depreciation) on investments (including the effects of foreign currency
translation) and the cost basis of securities were as follows:
<TABLE>
<CAPTION>
NET COST
UNREALIZED UNREALIZED APPRECIATION BASIS OF
AMOUNTS IN THOUSANDS APPRECIATION DEPRECIATION (DEPRECIATION) SECURITIES
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government $ 756 $ (6,637) $ (5,881) $342,196
Short-Intermediate U.S. Government 349 (559) (210) 69,169
Intermediate Tax-Exempt 7,816 (7,886) (70) 661,044
California Intermediate Tax-Exempt 2,671 (224) 2,447 91,144
Florida Intermediate Tax-Exempt 247 (337) (90) 41,563
Fixed Income 6,157 (11,789) (5,632) 703,379
Tax-Exempt 17,773 (7,569) 10,204 513,091
Arizona Tax-Exempt 1,339 (457) 882 69,723
California Tax-Exempt 3,352 (1,808) 1,544 128,881
Global Fixed Income 91 (760) (669) 18,378
High Yield Municipal 193 (1,126) (933) 27,269
High Yield Fixed Income 1,792 (15,338) (13,546) 201,683
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
62
<PAGE>
NORTHERN FUNDS Semiannual Report
At March 31, 2000, the approximate capital loss carryforwards for U.S.
Federal income tax purposes and their respective years of expiration were as
follows:
<TABLE>
<CAPTION>
MARCH 31,
AMOUNTS IN THOUSANDS 2008
--------------------------------------------------------------------------------
<S> <C>
U.S. Government $1,813
Short-Intermediate U.S. Government 67
Intermediate Tax-Exempt 800
Florida Intermediate Tax-Exempt 203
Fixed Income 433
Tax-Exempt 4,366
California Tax-Exempt 403
International Fixed Income 15
High Yield Municipal 131
High Yield Fixed Income 2,519
-------------------------------------------------------------------------------
</TABLE>
These capital loss carryforwards are available to offset future capital gains.
6. CAPITAL SHARE TRANSACTIONS
Transactions of shares of the Funds for the six months ended September 30, 2000
were as follows:
<TABLE>
<CAPTION>
NET
REINVESTMENT INCREASE
AMOUNTS IN THOUSANDS SOLD OF DIVIDENDS REDEEMED (DECREASE)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government 2,541 73 (4,179) (1,565)
Short-Intermediate U.S. Government 1,267 8 (670) 605
Intermediate Tax-Exempt 3,300 64 (5,912) (2,548)
California Intermediate Tax-Exempt 386 8 (1,077) (683)
Florida Intermediate Tax-Exempt 314 14 (369) (41)
Fixed Income 8,888 162 (4,171) 4,879
Tax-Exempt 3,105 39 (3,975) (831)
Arizona Tax-Exempt 1,133 4 (962) 175
California Tax-Exempt 1,235 33 (959) 309
Global Fixed Income 274 -- (242) 32
High Yield Municipal 811 5 (159) 657
High Yield Fixed Income 5,533 214 (1,767) 3,980
--------------------------------------------------------------------------------------------------------------------
</TABLE>
63
<PAGE>
Transactions of shares of the Funds for the year ended March 31, 2000 were as
follows:
<TABLE>
<CAPTION>
NET
ISSUED UPON REINVESTMENT INCREASE
AMOUNTS IN THOUSANDS SOLD CONVERSION (1) OF DIVIDENDS REDEEMED (DECREASE)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
U.S. Government 17,301 11,422 176 (19,710) 9,189
Short-Intermediate U.S. Government 1,217 6,034 2 (837) 6,416
Intermediate Tax-Exempt 45,944 36,215 182 (47,197) 35,144
California Intermediate Tax-Exempt 2,924 7,986 11 (1,692) 9,229
Florida Intermediate Tax-Exempt 2,005 -- 39 (1,418) 626
Fixed Income 17,565 30,234 457 (8,487) 39,769
Tax-Exempt 8,098 32,683 168 (10,117) 30,832
Arizona Tax-Exempt 3,104 5,621 2 (2,112) 6,615
California Tax-Exempt 3,253 5,865 85 (4,270) 4,933
International Fixed Income 522 567 4 (469) 624
High Yield Municipal 1,711 -- 5 (375) 1,341
High Yield Fixed Income 16,278 -- 141 (2,664) 13,755
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) See footnote 7
7. CONVERSION FROM NORTHERN COMMON TRUST FUNDS
On October 1, 1999, Northern Trust converted ten fixed income common trust funds
into existing or new comparable funds of the Trust. These conversions were
tax-free for federal income tax purposes. The following is a summary of the net
assets and shares converted (amounts in thousands):
<TABLE>
<CAPTION>
NORTHERN NET ASSETS SHARES
COMMON TRUST FUND FUND CONVERTED CONVERTED
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1986 Government Bond Fund and
Government Bond Fund U.S. Government Fund $112,138 11,422
Intermediate Government Bond Fund Short-Intermediate U.S. Government Fund* 60,337 6,034
Intermediate Tax-Exempt Bond Fund Intermediate Tax-Exempt Fund 363,331 36,215
Intermediate California Tax-Exempt
Bond Fund California Intermediate Tax-Exempt Fund* 79,836 7,986
Taxable Bond Fund Fixed Income Fund 293,695 30,234
Tax-Exempt Bond Fund Tax-Exempt Fund 327,321 32,683
Arizona Tax-Exempt Bond Fund Arizona Tax-Exempt Fund* 56,205 5,621
California Tax-Exempt Bond Fund California Tax-Exempt Fund 60,293 5,865
International Government Bond Fund International Fixed Income Fund 5,714 567
</TABLE>
* Fund commenced operations upon conversion
64
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
65
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
66
<PAGE>
This report has been prepared for the general information of Northern Funds
shareholders. It is not authorized for distribution to prospective investors
unless accompanied or preceded by a current Northern Funds prospectus, which
contains more complete information about Northern Funds investment policies,
management fees and expenses. Investors are reminded to read the prospectus
carefully before investing or sending money.
[NORTHERN FUNDS LOGO]-Registered Trademark-
P.O. Box 75986
Chicago, IL 60675-5986
(800) 595-9111
Northern Funds Distributors, LLC, an independent third party.
PRESORTED STANDARD U.S. POSTAGE PAID CHICAGO, IL PERMIT NO. 941
