Notes to Financial Statements
1. Multiple Classes of Shares — Seligman Municipal Series Trust (the “Trust”) consists of four separate funds: the “California High-Yield Fund,” the “California Quality Fund,” the “Florida Fund,” and the “North Carolina Fund”. Each Fund of the Trust, as well as Seligman New Jersey Municipal Fund, Inc. (the “New Jersey Fund”) and Seligman Pennsylvania Municipal Fund Series (the “Pennsylvania Fund”), offer three classes of shares.
Class A shares are sold with an initial sales charge of up to 4.75% and a continuing service fee of up to 0.25% on an annual basis. Class A shares purchased in an amount of $1,000,000 or more are sold without an initial sales charge but are subject to a contingent deferred sales charge (“CDSC”) of 1% on redemptions within 18 months of purchase. Eligible employee benefit plans which have at least $500,000 invested in the Seligman Group of mutual funds or 50 eligible employees may purchase Class A shares at net asset value, but, in the event of plan termination, will be subject to a CDSC of 1% on redemption of shares purchased within 18 months prior to plan termination.
Class C shares are sold primarily with an initial sales charge of up to 1%, and a CDSC, if applicable, of 1% imposed on redemptions made within 18 months of purchase. Class C shares purchased through certain financial intermediaries may be bought without an initial sales charge and with a 1% CDSC on redemptions made within 12 months of purchase. All Class C shares are subject to a distribution fee of up to 0.75% and a service fee of up to 0.25% on an annual basis.
Class D shares are sold without an initial sales charge but are subject to a distribution fee of up to 0.75% and a service fee of up to 0.25% on an annual basis, and a CDSC, if applicable, of 1% imposed on redemptions made within one year of purchase.
The three classes of shares for each Fund represent interests in the same portfolio of investments, have the same rights and are generally identical in all respects except that each class bears its separate distribution and certain other class-specific expenses, and has exclusive voting rights with respect to any matter on which a separate vote of any class is required.
2. Significant Accounting Policies — The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results may differ from these estimates. The following summarizes the significant accounting policies of the Funds:
a. | | Security Valuation — Traded securities are valued at the last sales price on the primary market on which they are traded. Securities for which there is no last sales price are valued by independent pricing services based on bid prices which consider such factors as transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities or are valued by J. & W. Seligman & Co. Incorporated (the “Manager”) based on quotations provided by primary market makers in such securities. Securities for which market quotations are not readily available (or are otherwise no longer valid or reliable) are valued at fair value determined in accordance with procedures approved by the directors/trustees. This can occur in the event of, among other things, natural disasters, acts of terrorism, market disruptions, intra-day trading halts, and extreme market volatility. The determination of fair value involves subjective judgments. As a result, using fair value to price a security may result in a price materially different from the prices used by other mutual funds to determine net asset value or the price that may be realized upon the actual sale of the security. Short-term holdings maturing in more than 60 days are valued at current market quotations. Short-term holdings maturing in 60 days or less are valued at amortized cost. |
b. | | Federal Taxes — There is no provision for federal income tax. Each Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all taxable net income and net realized gains. |
c. | | Security Transactions and Related Investment Income — Investment transactions are recorded on trade dates. Identified cost of investments sold is used for both financial reporting and federal income tax purposes. Interest income is recorded on the accrual basis. The Funds amortize discounts and premiums paid on bonds and other debt securities for financial reporting purposes. |
| | Short-term holdings include securities with stated or effective maturity dates of less than one year. |
| | Variable rate demand notes purchased by the Funds may be put back to the designated remarketing agent for the issue at par on any day, for settlement within seven days, and, accordingly, are treated as short-term holdings. These notes bear interest at a rate that resets daily or weekly. At September 30, 2006, the interest rates paid on these notes ranged from 3.78% to 3.86%. |
d. | | Multiple Class Allocations — Each Fund’s income, expenses (other than class-specific expenses), and realized and unrealized gains or losses are allocated daily to each class of shares of that Fund based upon the relative value of the shares of each class. Class-specific expenses, which include distribution and service fees and any other items that are specifically attributable to a particular class, are charged directly to such class. For the year ended September 30, 2006, distribution and service fees were the only class-specific expenses. |
e. | | Distributions to Shareholders — Dividends are declared daily and paid monthly. Other distributions paid by the Funds are recorded on the ex-dividend date. |
f. | | Restricted Cash — Restricted cash represents deposits that are being held by banks as collateral for letters of credit issued in connection with the Funds’ insurance policies of the Trust, New Jersey Fund and Pennsylvania Fund. |
3. Management Fee, Distribution Services, and Other Transactions The Manager manages the affairs of the Funds and provides the necessary personnel and facilities. Compensation of all officers of the Funds, all directors/trustees of the Funds who are employees of the Manager, and all personnel of the Funds and the Manager is paid by the Manager. The Manager’s fee is calculated daily and payable monthly, equal to 0.50% per annum of each Fund’s average daily net assets. The Manager, at its discretion, agreed to waive a portion of its fees for the year ended September 30, 2006 to limit the per annum fee of California High-Yield Fund and Florida Fund to 0.40% and 0.35%, respectively. For the year ended September 30, 2006, the amounts of fees waived by the Manager for California High-Yield Fund and Florida Fund were $35,897 and $48,294, respectively.
For the year ended September 30, 2006, Seligman Advisors, Inc. (the “Distributor”), agent for the distribution of the Funds’ shares, and Seligman Services, Inc., each an affiliate of the Manager, received in the aggregate the following commissions and concessions from sales of Class A and Class C shares. The following commissions were also paid to dealers for sales of Class A and Class C shares:
25
Notes to Financial Statements
Fund
|
|
|
| Commissions and Concessions
Retained by Affiliates
|
| Dealer
Commissions
|
|---|
| California High-Yield | | | | | $ 1,443 | | | | $ 7,463 | |
| California Quality | | | | | 4,406 | | | | 24,938 | |
| Florida | | | | | 3,379 | | | | 20,720 | |
| North Carolina | | | | | 1,054 | | | | 7,496 | |
| New Jersey | | | | | 3,051 | | | | 10,974 | |
| Pennsylvania | | | | | 2,726 | | | | 18,799 | |
The Funds each have an Administration, Shareholder Services and Distribution Plan (the “Plan”) with respect to distribution of its shares. Under the Plan, with respect to Class A shares, service organizations can enter into agreements with the Distributor and receive continuing fees of up to 0.25% on an annual basis of the average daily net assets of the Class A shares attributable to the particular service organizations for providing personal services and/or the maintenance of shareholder accounts. The Distributor charges such fees to the Funds monthly pursuant to the Plan. For the year ended September 30, 2006, for California High-Yield Fund, California Quality Fund, Florida Fund, North Carolina Fund, New Jersey Fund and Pennsylvania Fund, fees incurred under the Plan aggregated to $30,250, $43,942, $68,351, $39,479, $82,611 and $42,815, respectively, or 0.10%, 0.10%, 0.25%, 0.25%, 0.24% and 0.25%, respectively, per annum of average daily net assets of Class A shares.
Under the Plan, with respect to Class C shares and Class D shares, service organizations can enter into agreements with the Distributor and receive continuing fees for providing personal services and/or the maintenance of shareholder accounts of up to 0.25% on an annual basis of the average daily net assets of the Class C and Class D shares for which the organizations are responsible, and fees for providing other distribution assistance of up to 0.75% on an annual basis of such average daily net assets. Such fees are paid monthly by the Funds to the Distributor pursuant to the Plan. For the year ended September 30, 2006, fees incurred under the Plan equivalent to 1% per annum of the average daily net assets of Class C and Class D shares were as follows:
Fund
|
|
|
| Class C
|
| Class D
|
| Fund
|
| Class C
|
| Class D
|
|---|
| California High-Yield | | | | $ | 23,558 | | | $ | 30,892 | | | | North Carolina | | | $ | 12,113 | | | $ | 5,177 | |
| California Quality | | | | | 26,362 | | | | 10,496 | | | | New Jersey | | | | 33,875 | | | | 9,110 | |
| Florida | | | | | 35,042 | | | | 11,949 | | | | Pennsylvania | | | | 8,301 | | | | 4,821 | |
The Distributor and Seligman Services, Inc. are eligible to receive distribution and service fees pursuant to the Plan. For the year ended September 30, 2006, the Distributor and Seligman Services, Inc. received distribution and service fees as follows:
Fund
|
|
|
| Distribution and
Service Fees
| Fund
|
| Distribution and
Service Fees
|
|---|
| California High-Yield | | | | | $ 3,844 | | North Carolina | | $ 2,695 | |
| California Quality | | | | | 2,379 | | New Jersey | | 12,808 | |
| Florida | | | | | 3,540 | | Pennsylvania | | 2,143 | |
The Distributor is entitled to retain any CDSC imposed on certain redemptions of shares. For the year ended September 30, 2006, such charges amounted to $924 for California High-Yield Fund, $5 for California Quality Fund, $972 for Florida Fund, $1 for North Carolina Fund, $1,082 for New Jersey Fund and $1 for Pennsylvania Fund.
For the year ended September 30, 2006, Seligman Data Corp., which is owned by certain associated investment companies, charged each Fund at cost for shareholder account services in accordance with a methodology approved by the Funds’ directors/trustees as follows:
Fund
|
|
|
|
| Fund
|
|
|
|
|---|
| California High-Yield | | | | | $ 70,182 | | North Carolina | | $31,850 | |
| California Quality | | | | | 80,033 | | New Jersey | | 69,005 | |
| Florida | | | | | 55,567 | | Pennsylvania | | 36,719 | |
Costs of Seligman Data Corp. directly attributable to a Fund were charged to that Fund. The remaining charges were allocated to each Fund by Seligman Data Corp. pursuant to a formula based on each Fund’s net assets, shareholder transaction volume and number of shareholder accounts.
The Trust, New Jersey Fund and Pennsylvania Fund and certain other associated investment companies (together, the “Guarantors”) have severally but not jointly guaranteed the performance and observance of all the terms and conditions of two leases entered into by Seligman Data Corp., including the payment of rent by Seligman Data Corp. (the “Guaranties”). The leases and the Guaranties expire in September 2008 and January 2009, respectively. The obligation of a Guarantor to pay any amount due under either Guaranty is limited to a specified percentage of the full amount, which generally is based on each Guarantor’s percentage of the expenses billed by Seligman Data Corp. to all Guarantors in the most recent calendar quarter. As of September 30, 2006, the potential obligations under the Guaranties were $19,500 for Seligman Municipal Series Trust, $5,800 for the New Jersey Fund and $2,900 for the Pennsylvania Fund.
As of September 30, 2006, no event has occurred which would result in the Guarantors becoming liable to make any payment under a Guaranty. Each Fund of the Trust would bear a portion of any payments made by the Trust under the Guaranties. A portion of rent paid by Seligman Data Corp. is charged to the Funds as part of Seligman Data Corp.’s shareholder account services cost.
Certain officers and directors/trustees of the Funds are officers or directors of the Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
The Trust, New Jersey Fund, and Pennsylvania Fund have a compensation agreement under which directors/trustees who receive fees may elect to defer receiving such fees. Directors/trustees may elect to have their deferred fees accrue interest or earn a return based on the performance of the Funds or other funds in the Seligman Group of Investment Companies. Deferred fees and related accrued earnings are not deductible by the Funds for federal income tax purposes until such amounts are paid. The accumulated balances at December 31, 2005, which were paid to the participating director/trustee in January 2006, were as follows:
Fund
|
|
|
|
| Fund
|
|
|
|
|---|
| California High-Yield | | | | | $ 8,873 | | North Carolina | | $5,000 | |
| California Quality | | | | | 9,086 | | New Jersey | | 15,696 | |
| Florida | | | | | 5,867 | | Pennsylvania | | 14,863 | |
As of September 30, 2006, no directors/trustees were participating in the deferred compensation arrangement.
26
Notes to Financial Statements
4. | | Committed Line of Credit — The Trust, New Jersey Fund, and Pennsylvania Fund are each participants in a joint $400 million committed line of credit that is shared by substantially all open-end funds in the Seligman Group of Investment Companies. Each Fund’s borrowings are limited to 10% of its net assets. Borrowings pursuant to the credit facility are subject to interest at a per annum rate equal to the overnight federal funds rate plus 0.50%. Each Fund incurs a commitment fee of 0.10% per annum on its share of the unused portion of the credit facility. The credit facility may be drawn upon only for temporary purposes and is subject to certain other customary restrictions. The credit facility commitment expires in June 2007, but is renewable annually with the consent of the participating banks. For the year ended September 30, 2006, the Funds did not borrow from the credit facility. |
5. | | Purchases and Sales of Securities — Purchases and sales of portfolio securities, excluding short-term holdings, for the year ended September 30, 2006, were as follows: |
Fund
|
|
|
| Purchases
|
| Sales
|
|---|
| California High-Yield | | | | | — | | | | $ 260,000 | |
| California Quality | | | | | — | | | | 6,218,438 | |
| Florida | | | | | $ 1,567,245 | | | | 4,164,220 | |
| North Carolina | | | | | 4,759,350 | | | | 6,654,990 | |
| New Jersey | | | | | 1,558,710 | | | | 4,540,000 | |
| Pennsylvania | | | | | 527,875 | | | | 1,068,814 | |
6. | | Federal Tax Information — Certain components of income, expense and realized capital gain and loss are recognized at different times or have a different character for federal income tax purposes and for financial reporting purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations or net asset value per share of the Funds. As a result of the differences described above, the treatment for financial reporting purposes of distributions made during the year from net investment income or net realized gains may differ from their ultimate treatment for federal income tax purposes. Further, the cost of investments also can differ for federal income tax purposes. |
At September 30, 2006, each Fund’s cost of investments for federal income tax purposes was less than the cost for financial reporting purposes due to the amortization of market discount for financial reporting purposes, offset, in part, for the California Quality Fund by the tax deferral of losses on wash sales of $149,160. The tax basis cost of investments was as follows:
Fund
|
| Tax
Basis Cost
|
|---|
| California High-Yield | | | $ 33,562,350 | |
| California Quality | | | 42,313,363 | |
| Florida | | | 27,981,559 | |
| North Carolina | | | 15,781,935 | |
| New Jersey | | | 34,193,882 | |
| Pennsylvania | | | 16,583,658 | |
At September 30, 2006, the tax basis components of accumulated earnings were as follows:
|
| California
High-Yield
|
| California
Quality
|
| Florida
| North
Carolina
|
| New
Jersey
|
| Pennsylvania
|
|---|
| Gross unrealized appreciation of portfolio securities | | $ | 1,737,337 | | | $ | 2,500,348 | | | $ | 1,595,076 | | $1,048,619 | | $1,973,027 | | $1,343,703 |
| Gross unrealized depreciation of portfolio securities | | | — | | | | — | | | | — | | — | | — | | (17,146) |
| Net unrealized appreciation of portfolio securities | | | 1,737,337 | | | | 2,500,348 | | | | 1,595,076 | | 1,048,619 | | 1,973,027 | | 1,326,557 |
| Undistributed tax-exempt income | | | 4,075 | | | | 72,031 | | | | 46,376 | | 16,838 | | 79,154 | | 38,378 |
| Undistributed/accumulated net realized gain (loss) | | | — | | | | 86,511 | | | | 38,116 | | 156,515 | | 97,944 | | — |
| Timing difference (post-October loss) | | | — | | | | — | | | | — | | — | | — | | (4,329) |
| Total accumulated earnings | | $ | 1,741,412 | | | $ | 2,658,890 | | | $ | 1,679,568 | | $1,221,972 | | $2,150,125 | | $1,360,606 |
The tax characterization of distributions paid was as follows:
| | Year Ended September 30,
|
|
|---|
|
| 2006
|
| 2005
|
|---|
| Tax-exempt income: |
| California High-Yield | | | $ 1,467,276 | | | | $ 1,513,097 | |
| California Quality | | | 1,933,771 | | | | 2,128,131 | |
| Florida | | | 1,300,117 | | | | 1,448,202 | |
| North Carolina | | | 590,774 | | | | 745,364 | |
| New Jersey | | | 1,487,747 | | | | 1,676,831 | |
| Pennsylvania | | | 608,080 | | | | 694,950 | |
| Long-term capital gains: |
| California High-Yield | | | — | | | | $ 355,782 | |
| California Quality | | | $ 238,526 | | | | 723,504 | |
| Florida | | | 199,755 | | | | 23,714 | |
| North Carolina | | | 130,484 | | | | 60,846 | |
| New Jersey | | | 221,733 | | | | 44,193 | |
| Pennsylvania | | | 153,179 | | | | 31,524 | |
The Pennsylvania Fund elected to defer to October 1, 2006, the recognition for tax purposes of net loss of $4,329 realized on sales of investments after October 31, 2005. This loss will be available to offset future taxable net gains.
27
Notes to Financial Statements
7. | | Share Transactions — At September 30, 2006, the Funds (with the exception of New Jersey Fund) had unlimited shares authorized. The New Jersey Fund had 100,000,000 shares authorized. Transactions in Shares of Beneficial Interest (for Funds of the Trust and Pennsylvania Fund) or Capital Stock were as follows: |
| | | | Class A
|
| Class C
|
|
|---|
| | | | Year Ended September 30,
|
| Year Ended September 30,
|
|
|---|
|
|
|
| 2006
|
| 2005
|
| 2006
|
| 2005
|
|
|---|
| | | |
| |
| |
| |
| |
| |
| |
|---|
California High-Yield Fund
|
|
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
|---|
| Net proceeds from sales of shares | | | | | 36,481 | | | $ | 239,657 | | | | 59,615 | | | $ | 395,391 | | | | 102,822 | | | $ | 675,111 | | | | 12,984 | | | $ | 86,027 | |
| Investment of dividends | | | | | 115,848 | | | | 761,222 | | | | 113,844 | | | | 754,713 | | | | 6,850 | | | | 45,095 | | | | 7,953 | | | | 52,760 | |
| Exchanged from associated funds | | | | | 3,816 | | | | 24,994 | | | | 30,967 | | | | 204,413 | | | | 8,071 | | | | 53,121 | | | | 4,728 | | | | 31,382 | |
| Investment of gain distributions | | | | | — | | | | — | | | | 37,131 | | | | 244,320 | | | | — | | | | — | | | | 3,786 | | | | 24,951 | |
| Total | | | | | 156,145 | | | | 1,025,873 | | | | 241,557 | | | | 1,598,837 | | | | 117,743 | | | | 773,327 | | | | 29,451 | | | | 195,120 | |
| Cost of shares repurchased | | | | | (343,374 | ) | | | (2,256,084 | ) | | | (622,899 | ) | | | (4,130,453 | ) | | | (90,288 | ) | | | (592,805 | ) | | | (101,439 | ) | | | (675,224 | ) |
| Exchanged into associated funds | | | | | (3,495 | ) | | | (23,000 | ) | | | (32,609 | ) | | | (217,152 | ) | | | — | | | | — | | | | — | | | | — | |
| Total | | | | | (346,869 | ) | | | (2,279,084 | ) | | | (655,508 | ) | | | (4,347,605 | ) | | | (90,288 | ) | | | (592,805 | ) | | | (101,439 | ) | | | (675,224 | ) |
| Increase (decrease) | | | | | (190,724 | ) | | $ | (1,253,211 | ) | | | (413,951 | ) | | $ | (2,748,768 | ) | | | 27,455 | | | $ | 180,522 | | | | (71,988 | ) | | $ | (480,104 | ) |
| | | | Class D
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
|
|
|
| 2006
|
| 2005
|
|
|---|
California High-Yield Fund
|
|
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
|---|
| Net proceeds from sales of shares | | | | | 604 | | | $ | 3,995 | | | | 3,299 | | | $ | 21,989 | |
| Investment of dividends | | | | | 7,772 | | | | 51,168 | | | | 8,473 | | | | 56,211 | |
| Exchanged from associated funds | | | | | 51,584 | | | | 340,288 | | | | 83,528 | | | | 557,021 | |
| Investment of gain distributions | | | | | — | | | | — | | | | 3,628 | | | | 23,905 | |
| Total | | | | | 59,960 | | | | 395,451 | | | | 98,928 | | | | 659,126 | |
| Cost of shares repurchased | | | | | (44,999 | ) | | | (296,071 | ) | | | (25,714 | ) | | | (171,359 | ) |
| Exchanged into associated funds | | | | | (3,405 | ) | | | (22,370 | ) | | | (820 | ) | | | (5,438 | ) |
| Total | | | | | (48,404 | ) | | | (318,441 | ) | | | (26,534 | ) | | | (176,797 | ) |
| Increase | | | | | 11,556 | | | $ | 77,010 | | | | 72,394 | | | $ | 482,329 | |
| | | | Class A
|
| Class C
|
|
|---|
| | | | Year Ended September 30,
|
| Year Ended September 30,
|
|
|---|
|
|
|
| 2006
|
| 2005
|
| 2006
|
| 2005
|
|
|---|
| | | |
| |
| |
| |
| |
| |
| |
|---|
California Quality Fund
|
|
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
|---|
| Net proceeds from sales of shares | | | | | 138,675 | | | $ | 929,493 | | | | 147,127 | | | $ | 1,003,777 | | | | 1,909 | | | $ | 12,680 | | | | 5,654 | | | $ | 38,337 | |
| Investment of dividends | | | | | 147,576 | | | | 987,536 | | | | 158,217 | | | | 1,079,785 | | | | 7,193 | | | | 47,964 | | | | 8,248 | | | | 56,102 | |
| Exchanged from associated funds | | | | | 58,811 | | | | 393,464 | | | | 27,959 | | | | 190,982 | | | | — | | | | — | | | | 54,246 | | | | 369,172 | |
| Investment of gain distributions | | | | | 22,352 | | | | 150,199 | | | | 65,323 | | | | 443,520 | | | | 1,564 | | | | 10,479 | | | | 6,094 | | | | 41,254 | |
| Total | | | | | 367,414 | | | | 2,460,692 | | | | 398,626 | | | | 2,718,064 | | | | 10,666 | | | | 71,123 | | | | 74,242 | | | | 504,865 | |
| Cost of shares repurchased | | | | | (952,575 | ) | | | (6,377,975 | ) | | | (850,072 | ) | | | (5,793,374 | ) | | | (203,168 | ) | | | (1,355,717 | ) | | | (286,099 | ) | | | (1,947,902 | ) |
| Exchanged into associated funds | | | | | (10,986 | ) | | | (73,662 | ) | | | (55,162 | ) | | | (375,462 | ) | | | (1,091 | ) | | | (7,297 | ) | | | (2,802 | ) | | | (18,961 | ) |
| Total | | | | | (963,561 | ) | | | (6,451,637 | ) | | | (905,234 | ) | | | (6,168,836 | ) | | | (204,259 | ) | | | (1,363,014 | ) | | | (288,901 | ) | | | (1,966,863 | ) |
| Decrease | | | | | (596,147 | ) | | $ | (3,990,945 | ) | | | (506,608 | ) | | $ | (3,450,772 | ) | | | (193,593 | ) | | $ | (1,291,891 | ) | | | (214,659 | ) | | $ | (1,461,998 | ) |
| | | | Class D
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
|
|
|
| 2006
|
| 2005
|
|
|---|
California Quality Fund
|
|
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
|---|
| Net proceeds from sales of shares | | | | | 7,755 | | | $ | 52,120 | | | | 322 | | | $ | 2,189 | |
| Investment of dividends | | | | | 2,562 | | | | 17,087 | | | | 2,672 | | | | 18,176 | |
| Exchanged from associated funds | | | | | 11,554 | | | | 77,028 | | | | 4,242 | | | | 28,804 | |
| Investment of gain distributions | | | | | 382 | | | | 2,558 | | | | 1,276 | | | | 8,635 | |
| Total | | | | | 22,253 | | | | 148,793 | | | | 8,512 | | | | 57,804 | |
| Cost of shares repurchased | | | | | (15,472 | ) | | | (102,907 | ) | | | (47,258 | ) | | | (320,268 | ) |
| Exchanged into associated funds | | | | | (2,220 | ) | | | (14,939 | ) | | | (389 | ) | | | (2,645 | ) |
| Total | | | | | (17,692 | ) | | | (117,846 | ) | | | (47,647 | ) | | | (322,913 | ) |
| Increase (decrease) | | | | | 4,561 | | | $ | 30,947 | | | | (39,135 | ) | | $ | (265,109 | ) |
28
Notes to Financial Statements
| | | | Class A
|
| Class C
|
|
|---|
| | | | Year Ended September 30,
|
| Year Ended September 30,
|
|
|---|
|
|
|
| 2006
|
| 2005
|
| 2006
|
| 2005
|
|
|---|
| | | |
| |
| |
| |
| |
| |
| |
|---|
Florida Fund
|
|
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
|---|
| Net proceeds from sales of shares | | | | | 99,799 | | | $ | 778,397 | | | | 94,812 | | | $ | 756,005 | | | | 22,227 | | | $ | 173,717 | | | | 36,316 | | | $ | 289,703 | |
| Investment of dividends | | | | | 78,565 | | | | 612,179 | | | | 80,048 | | | | 637,959 | | | | 10,264 | | | | 80,175 | | | | 12,388 | | | | 98,932 | |
| Exchanged from associated funds | | | | | 49,489 | | | | 385,250 | | | | 73,081 | | | | 583,068 | | | | — | | | | — | | | | 767 | | | | 6,163 | |
| Investment of gain distributions | | | | | 13,326 | | | | 104,198 | | | | 1,665 | | | | 13,282 | | | | 2,277 | | | | 17,831 | | | | 289 | | | | 2,312 | |
| Total | | | | | 241,179 | | | | 1,880,024 | | | | 249,606 | | | | 1,990,314 | | | | 34,768 | | | | 271,723 | | | | 49,760 | | | | 397,110 | |
| Cost of shares repurchased | | | | | (445,592 | ) | | | (3,466,996 | ) | | | (600,570 | ) | | | (4,786,378 | ) | | | (119,990 | ) | | | (936,087 | ) | | | (118,994 | ) | | | (947,816 | ) |
| Exchanged into associated funds | | | | | (181,520 | ) | | | (1,418,929 | ) | | | (6,052 | ) | | | (48,575 | ) | | | — | | | | — | | | | (22,374 | ) | | | (178,456 | ) |
| Total | | | | | (627,112 | ) | | | (4,885,925 | ) | | | (606,622 | ) | | | (4,834,953 | ) | | | (119,990 | ) | | | (936,087 | ) | | | (141,368 | ) | | | (1,126,272 | ) |
| Decrease | | | | | (385,933 | ) | | $ | (3,005,901 | ) | | | (357,016 | ) | | $ | (2,844,639 | ) | | | (85,222 | ) | | $ | (664,364 | ) | | | (91,608 | ) | | $ | (729,162 | ) |
| | | | Class D
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
|
|
|
| 2006
|
| 2005
|
|
|---|
Florida Fund
|
|
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
|---|
| Net proceeds from sales of shares | | | | | 22,944 | | | $ | 180,112 | | | | 24 | | | $ | 189 | |
| Investment of dividends | | | | | 2,969 | | | | 23,182 | | | | 2,757 | | | | 22,009 | |
| Exchanged from associated funds | | | | | 4,287 | | | | 33,568 | | | | 3,539 | | | | 28,403 | |
| Investment of gain distributions | | | | | 569 | | | | 4,449 | | | | 56 | | | | 453 | |
| Total | | | | | 30,769 | | | | 241,311 | | | | 6,376 | | | | 51,054 | |
| Cost of shares repurchased | | | | | (29,480 | ) | | | (230,132 | ) | | | (26,608 | ) | | | (211,683 | ) |
| Exchanged into associated funds | | | | | — | | | | — | | | | — | | | | — | |
| Total | | | | | (29,480 | ) | | | (230,132 | ) | | | (26,608 | ) | | | (211,683 | ) |
| Increase (decrease) | | | | | 1,289 | | | $ | 11,179 | | | | (20,232 | ) | | $ | (160,629 | ) |
| | | | Class A
|
| Class C
|
|
|---|
| | | | Year Ended September 30,
|
| Year Ended September 30,
|
|
|---|
|
|
|
| 2006
|
| 2005
|
| 2006
|
| 2005
|
|
|---|
| | | |
| |
| |
| |
| |
| |
| |
|---|
North Carolina Fund
|
|
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
|---|
| Net proceeds from sales of shares | | | | | 50,611 | | | $ | 398,533 | | | | 31,132 | | | $ | 250,714 | | | | 2,065 | | | $ | 16,000 | | | | 1,058 | | | $ | 8,487 | |
| Investment of dividends | | | | | 45,275 | | | | 353,338 | | | | 53,761 | | | | 430,309 | | | | 1,816 | | | | 14,170 | | | | 4,610 | | | | 36,863 | |
| Exchanged from associated funds | | | | | 8,627 | | | | 67,120 | | | | 16,614 | | | | 133,328 | | | | — | | | | — | | | | — | | | | — | |
| Investment of gain distributions | | | | | 11,434 | | | | 89,521 | | | | 5,121 | | | | 41,021 | | | | 979 | | | | 7,659 | | | | 864 | | | | 6,911 | |
| Total | | | | | 115,947 | | | | 908,512 | | | | 106,628 | | | | 855,372 | | | | 4,860 | | | | 37,829 | | | | 6,532 | | | | 52,261 | |
| Cost of shares repurchased | | | | | (255,223 | ) | | | (1,986,911 | ) | | | (448,712 | ) | | | (3,586,486 | ) | | | (14,823 | ) | | | (115,922 | ) | | | (202,888 | ) | | | (1,611,054 | ) |
| Exchanged into associated funds | | | | | (5,916 | ) | | | (45,831 | ) | | | (11,785 | ) | | | (94,215 | ) | | | (22,937 | ) | | | (179,820 | ) | | | — | | | | — | |
| Total | | | | | (261,139 | ) | | | (2,032,742 | ) | | | (460,497 | ) | | | (3,680,701 | ) | | | (37,760 | ) | | | (295,742 | ) | | | (202,888 | ) | | | (1,611,054 | ) |
| Decrease | | | | | (145,192 | ) | | $ | (1,124,230 | ) | | | (353,869 | ) | | $ | (2,825,329 | ) | | | (32,900 | ) | | $ | (257,913 | ) | | | (196,356 | ) | | $ | (1,558,793 | ) |
| | | | Class D
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
|
|
|
| 2006
|
| 2005
|
|
|---|
North Carolina Fund
|
|
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
|---|
| Net proceeds from sales of shares | | | | | 17 | | | $ | 133 | | | | 1,627 | | | $ | 13,179 | |
| Investment of dividends | | | | | 991 | | | | 7,722 | | | | 1,578 | | | | 12,612 | |
| Exchanged from associated funds | | | | | 942 | | | | 7,364 | | | | — | | | | — | |
| Investment of gain distributions | | | | | 274 | | | | 2,141 | | | | 154 | | | | 1,228 | |
| Total | | | | | 2,224 | | | | 17,360 | | | | 3,359 | | | | 27,019 | |
| Cost of shares repurchased | | | | | (3,414 | ) | | | (26,748 | ) | | | (24,018 | ) | | | (191,428 | ) |
| Exchanged into associated funds | | | | | — | | | | — | | | | (140 | ) | | | (1,116 | ) |
| Total | | | | | (3,414 | ) | | | (26,748 | ) | | | (24,158 | ) | | | (192,544 | ) |
| Decrease | | | | | (1,190 | ) | | $ | (9,388 | ) | | | (20,799 | ) | | $ | (165,525 | ) |
29
Notes to Financial Statements
| | | | Class A
|
| Class C
|
|
|---|
| | | | Year Ended September 30,
|
| Year Ended September 30,
|
|
|---|
|
|
|
| 2006
|
| 2005
|
| 2006
|
| 2005
|
|
|---|
| | | |
| |
| |
| |
| |
| |
| |
|---|
New Jersey Fund
|
|
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
|---|
| Net proceeds from sales of shares | | | | | 172,278 | | | $ | 1,274,735 | | | | 117,029 | | | $ | 882,504 | | | | 35,871 | | | $ | 267,960 | | | | 34,205 | | | $ | 261,158 | |
| Investment of dividends | | | | | 121,163 | | | | 893,139 | | | | 136,040 | | | | 1,025,489 | | | | 9,763 | | | | 72,954 | | | | 10,791 | | | | 82,384 | |
| Exchanged from associated funds | | | | | 33,719 | | | | 248,536 | | | | 18,196 | | | | 137,130 | | | | 34,270 | | | | 256,636 | | | | 24,803 | | | | 189,975 | |
| Investment of gain distributions | | | | | 21,018 | | | | 155,309 | | | | 4,241 | | | | 31,891 | | | | 2,077 | | | | 15,553 | | | | 364 | | | | 2,772 | |
| Total | | | | | 348,178 | | | | 2,571,719 | | | | 275,506 | | | | 2,077,014 | | | | 81,981 | | | | 613,103 | | | | 70,163 | | | | 536,289 | |
| Cost of shares repurchased | | | | | (631,131 | ) | | | (4,653,060 | ) | | | (1,294,115 | ) | | | (9,721,288 | ) | | | (62,531 | ) | | | (466,938 | ) | | | (87,785 | ) | | | (669,409 | ) |
| Exchanged into associated funds | | | | | (12,448 | ) | | | (91,512 | ) | | | (23,861 | ) | | | (179,894 | ) | | | (34,056 | ) | | | (254,675 | ) | | | (6,382 | ) | | | (48,694 | ) |
| Total | | | | | (643,579 | ) | | | (4,744,572 | ) | | | (1,317,976 | ) | | | (9,901,182 | ) | | | (96,587 | ) | | | (721,613 | ) | | | (94,167 | ) | | | (718,103 | ) |
| Decrease | | | | | (295,401 | ) | | $ | (2,172,853 | ) | | | (1,042,470 | ) | | $ | (7,824,168 | ) | | | (14,606 | ) | | $ | (108,510 | ) | | | (24,004 | ) | | $ | (181,814 | ) |
| | | | Class D
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
|
|
|
| 2006
|
| 2005
|
|
|---|
New Jersey Fund
|
|
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
|---|
| Net proceeds from sales of shares | | | | | 3,218 | | | $ | 24,173 | | | | 5,106 | | | $ | 38,999 | |
| Investment of dividends | | | | | 3,545 | | | | 26,481 | | | | 3,509 | | | | 26,792 | |
| Exchanged from associated funds | | | | | 1,287 | | | | 9,624 | | | | 1,073 | | | | 8,163 | |
| Investment of gain distributions | | | | | 633 | | | | 4,735 | | | | 109 | | | | 829 | |
| Total | | | | | 8,683 | | | | 65,013 | | | | 9,797 | | | | 74,783 | |
| Cost of shares repurchased | | | | | (14,129 | ) | | | (105,639 | ) | | | (19,834 | ) | | | (151,362 | ) |
| Exchanged into associated funds | | | | | — | | | | — | | | | — | | | | — | |
| Total | | | | | (14,129 | ) | | | (105,639 | ) | | | (19,834 | ) | | | (151,362 | ) |
| Decrease | | | | | (5,446 | ) | | $ | (40,626 | ) | | | (10,037 | ) | | $ | (76,579 | ) |
| | | | Class A
|
| Class C
|
|
|---|
| | | | Year Ended September 30,
|
| Year Ended September 30,
|
|
|---|
|
|
|
| 2006
|
| 2005
|
| 2006
|
| 2005
|
|
|---|
| | | |
| |
| |
| |
| |
| |
| |
|---|
Pennsylvania Fund
|
|
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
|---|
| Net proceeds from sales of shares | | | | | 84,885 | | | $ | 662,412 | | | | 25,994 | | | $ | 208,149 | | | | 1,063 | | | $ | 8,290 | | | | 6,081 | | | $ | 48,371 | |
| Investment of dividends | | | | | 48,763 | | | | 379,872 | | | | 55,213 | | | | 441,183 | | | | 1,445 | | | | 11,228 | | | | 1,882 | | | | 14,998 | |
| Exchanged from associated funds | | | | | 34,056 | | | | 266,383 | | | | 16,264 | | | | 129,768 | | | | 2,679 | | | | 20,948 | | | | — | | | | — | |
| Investment of gain distributions | | | | | 14,355 | | | | 111,796 | | | | 2,824 | | | | 22,581 | | | | 589 | | | | 4,578 | | | | 117 | | | | 934 | |
| Total | | | | | 182,059 | | | | 1,420,463 | | | | 100,295 | | | | 801,681 | | | | 5,776 | | | | 45,044 | | | | 8,080 | | | | 64,303 | |
| Cost of shares repurchased | | | | | (353,244 | ) | | | (2,757,303 | ) | | | (201,565 | ) | | | (1,608,298 | ) | | | (16,117 | ) | | | (126,247 | ) | | | (28,639 | ) | | | (226,208 | ) |
| Exchanged into associated funds | | | | | (11,115 | ) | | | (86,803 | ) | | | (15,426 | ) | | | (123,768 | ) | | | (4,656 | ) | | | (36,453 | ) | | | (1,247 | ) | | | (10,000 | ) |
| Total | | | | | (364,359 | ) | | | (2,844,106 | ) | | | (216,991 | ) | | | (1,732,066 | ) | | | (20,773 | ) | | | (162,700 | ) | | | (29,886 | ) | | | (236,208 | ) |
| Decrease | | | | | (182,300 | ) | | $ | (1,423,643 | ) | | | (116,696 | ) | | $ | (930,385 | ) | | | (14,997 | ) | | $ | (117,656 | ) | | | (21,806 | ) | | $ | (171,905 | ) |
| | | | Class D
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
|
|
|
| 2006
|
| 2005
|
|
|---|
Pennsylvania Fund
|
|
|
| Shares
|
| Amount
|
| Shares
|
| Amount
|
|---|
| Net proceeds from sales of shares | | | | | 1,035 | | | $ | 8,095 | | | | 12 | | | $ | 95 | |
| Investment of dividends | | | | | 268 | | | | 2,086 | | | | 375 | | | | 2,993 | |
| Investment of gain distributions | | | | | 312 | | | | 2,422 | | | | 68 | | | | 546 | |
| Total | | | | | 1,615 | | | | 12,603 | | | | 455 | | | | 3,634 | |
| Cost of shares repurchased | | | | | (4,712 | ) | | | (35,999 | ) | | | (7,858 | ) | | | (62,564 | ) |
| Exchanged into associated funds | | | | | — | | | | — | | | | — | | | | — | |
| Total | | | | | (4,712 | ) | | | (35,999 | ) | | | (7,858 | ) | | | (62,564 | ) |
| Decrease | | | | | (3,097 | ) | | $ | (23,396 | ) | | | (7,403 | ) | | $ | (58,930 | ) |
30
Notes to Financial Statements
8. | | Other Matters — In late 2003, the Manager conducted an extensive internal review in response to public announcements concerning frequent trading in shares of open-end mutual funds. As of September 2003, the Manager had one arrangement that permitted frequent trading in the Seligman mutual funds. This arrangement was in the process of being closed down by the Manager before the first proceedings relating to trading practices within the mutual fund industry were publicly announced. Based on a review of the Manager’s records for 2001 through 2003, the Manager identified three other arrangements that had permitted frequent trading in the Seligman mutual funds. All three had already been terminated prior to the end of September 2002. |
The results of the Manager’s internal review were presented to the Independent Directors of all the Seligman registered investment companies (the “Seligman Funds”). In order to resolve matters with the Independent Directors relating to the four arrangements that permitted frequent trading, the Manager, in May 2004, made payments to three mutual funds and agreed to waive a portion of its management fee with respect to another mutual fund (none of which was a Fund of Seligman Municipal Series Trust, Seligman New Jersey Municipal Fund, Inc. or Seligman Pennsylvania Municipal Fund Series).
Since February 2004, the Manager has been in discussions with the New York staff of the Securities and Exchange Commission (“SEC”) and the Office of the New York Attorney General (“Attorney General”) in connection with their review of frequent trading in certain of the Seligman Funds. No late trading is involved. This review was apparently stimulated by the Manager’s voluntary public disclosure of the foregoing arrangements in January 2004. In March 2005, negotiations to settle the matter were initiated by the New York staff of the SEC. After several months of negotiations, tentative agreement was reached, both with the New York staff of the SEC and the Attorney General, on the financial terms of a settlement. However, settlement discussions with the Attorney General ended when the Attorney General sought to impose operating conditions on the Manager that were unacceptable to the Manager, would have applied in perpetuity and were not requested or required by the SEC. Subsequently, the New York staff of the SEC indicated that, in lieu of moving forward under the terms of the tentative financial settlement, the staff was considering recommending to the Commissioners of the SEC the instituting of a formal action against the Manager, the Distributor and Seligman Data Corp. (together, “Seligman”).
Seligman believes that any action would be both inappropriate and unnecessary, especially in light of the fact that Seligman previously resolved the underlying issue with the Independent Directors of the Seligman Funds and made recompense to the affected Seligman Funds.
Immediately after settlement discussions with the Attorney General ended, the Attorney General issued subpoenas to certain of the Seligman Funds and their directors. The subpoenas seek various Board materials and information relating to the deliberations of the Independent Directors as to the advisory fees paid by the Seligman Funds to the Manager. The Manager has objected to the Attorney General’s seeking of such information and, on September 6, 2005, filed suit in federal district court seeking to enjoin the Attorney General from pursuing a fee inquiry. Seligman believes that the Attorney General’s inquiry is improper because Congress has vested exclusive regulatory oversight of investment company advisory fees in the SEC.
At the end of September 2005, the Attorney General indicated that it intended to file an action at some time in the future alleging, in substance, that the Manager permitted other persons to engage in frequent trading other than the arrangements described above and, as a result, the prospectus disclosure of the Seligman Funds is and has been misleading.
On September 26, 2006, the Attorney General commenced a civil action in New York State Supreme Court against J. & W. Seligman & Co. Incorporated, Seligman Advisors, Inc., Seligman Data Corp. and Brian T. Zino (President of the Manager and the Seligman Funds), reiterating, in substance, the foregoing claims and various other related matters. The Attorney General also claims that the fees charged by Seligman are excessive. The Attorney General is seeking damages and restitution, disgorgement, penalties and costs (collectively, “Damages”), including Damages of at least $80 million relating to alleged timing occurring in the Seligman Funds and disgorgement of profits and management fees, and injunctive relief. Seligman and Mr. Zino believe that the claims are without merit and intend to defend themselves vigorously.
Any resolution of these matters with regulatory authorities may include, but not be limited to, sanctions, penalties, injunctions regarding Seligman, restitution to mutual fund shareholders or changes in procedures. Any Damages will be paid by Seligman and not by the Seligman Funds. If Seligman is unsuccessful in its defense of these proceedings, it and its affiliates could be barred from providing services to the Seligman Funds, including serving as an investment adviser for the Seligman Funds and principal underwriter for the open-end Seligman Funds. If these results occur, Seligman will seek exemptive relief from the SEC to permit it and its affiliates to continue to provide services to the Seligman Funds. There is no assurance that such exemptive relief will be granted.
Seligman does not believe that the foregoing legal actions or possible actions should have a material adverse impact on Seligman or the Seligman Funds; however, there can be no assurance of this, or that these matters and any related publicity will not result in reduced demand for shares of the Seligman Funds or other adverse consequences.
9. | | Recently Issued Accounting Pronouncements — In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109.” FIN 48 provides guidance for how uncertain tax positions, if any, should be recognized, measured, presented and disclosed in the financial statements. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Funds are currently evaluating the impact, if any, of applying the various provisions of FIN 48. |
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value of assets and liabilities and expands disclosure about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Funds are currently evaluating the impact of the adoption of SFAS No. 157 but believe the impact will be limited to expanded disclosures in the Funds’ financial statements.
31
Financial Highlights
The tables below are intended to help you understand the financial performance of each Class of each Fund for the periods presented. Certain information reflects financial results for a single share of a Class that was held throughout the periods shown. Per share amounts are calculated using average shares outstanding during the period. Total return shows the rate that you would have earned (or lost) on an investment in each Class, assuming you reinvested all your dividend and capital gain distributions. Total returns do not reflect any sales charges or taxes investors may incur on distributions or on the redemption of shares.
California High-Yield Fund
CLASS A
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 6.62 | | | $ | 6.65 | | | $ | 6.59 | | | $ | 6.74 | | | $ | 6.63 | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | | | 0.28 | | | | 0.26 | | | | 0.28 | | | | 0.28 | | | | 0.29 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.02 | ) | | | 0.04 | | | | 0.06 | | | | (0.12 | ) | | | 0.13 | |
Total from Investment Operations | | | | | 0.26 | | | | 0.30 | | | | 0.34 | | | | 0.16 | | | | 0.42 | |
Less Distributions: | | | | | | | | | | | | | | | | | | | | | | |
| Dividends from net investment income | | | | | (0.28 | ) | | | (0.26 | ) | | | (0.27 | ) | | | (0.28 | ) | | | (0.29 | ) |
| Distributions from net realized capital gain | | | | | — | | | | (0.07 | ) | | | (0.01 | ) | | | (0.03 | ) | | | (0.02 | ) |
Total Distributions | | | | | (0.28 | ) | | | (0.33 | ) | | | (0.28 | ) | | | (0.31 | ) | | | (0.31 | ) |
Net Asset Value, End of Year | | | | $ | 6.60 | | | $ | 6.62 | | | $ | 6.65 | | | $ | 6.59 | | | $ | 6.74 | |
Total Return | | | | | 3.99 | % | | | 4.63 | % | | | 5.30 | % | | | 2.48 | % | | | 6.50 | % |
| | Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of year (000s omitted) | | | | $ | 30,079 | | | $ | 31,432 | | | $ | 34,315 | | | $ | 38,798 | | | $ | 51,011 | |
| Ratio of expenses to average net assets | | | | | 0.90 | % | | | 0.92 | % | | | 0.90 | % | | | 0.88 | % | | | 0.84 | % |
| Ratio of net investment income to average net assets | | | | | 4.26 | % | | | 3.97 | % | | | 4.20 | % | | | 4.24 | % | | | 4.41 | % |
| Portfolio turnover rate | | | | | — | | | | 1.47 | % | | | — | | | | 4.43 | % | | | 11.72 | % |
| Without management fee waiver:* | | | | | | | | | | | | | | | | | | | | | | |
| Ratio of expenses to average net assets | | | | | 1.00 | % | | | 1.02 | % | | | 1.00 | % | | | 0.98 | % | | | 0.94 | % |
| Ratio of net investment income to average net assets | | | | | 4.16 | % | | | 3.87 | % | | | 4.10 | % | | | 4.14 | % | | | 4.31 | % |
See footnotes on page 41.
32
Financial Highlights
California High-Yield Fund (continued)
CLASS C
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 6.63 | | | $ | 6.66 | | | $ | 6.60 | | | $ | 6.75 | | | $ | 6.64 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.22 | | | | 0.20 | | | | 0.22 | | | | 0.22 | | | | 0.23 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.02 | ) | | | 0.04 | | | | 0.06 | | | | (0.12 | ) | | | 0.13 | |
Total from Investment Operations | | | | | 0.20 | | | | 0.24 | | | | 0.28 | | | | 0.10 | | | | 0.36 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.22 | ) | | | (0.20 | ) | | | (0.21 | ) | | | (0.22 | ) | | | (0.23 | ) |
| Distributions from net realized capital gain | | | | | — | | | | (0.07 | ) | | | (0.01 | ) | | | (0.03 | ) | | | (0.02 | ) |
Total Distributions | | | | | (0.22 | ) | | | (0.27 | ) | | | (0.22 | ) | | | (0.25 | ) | | | (0.25 | ) |
Net Asset Value, End of Year | | | | $ | 6.61 | | | $ | 6.63 | | | $ | 6.66 | | | $ | 6.60 | | | $ | 6.75 | |
Total Return | | | | | 3.06 | % | | | 3.69 | % | | | 4.35 | % | | | 1.56 | % | | | 5.57 | % |
| | Ratios/Supplemental Data:
|
| Net assets, end of year (000s omitted) | | | | $ | 2,649 | | | $ | 2,475 | | | $ | 2,964 | | | $ | 3,482 | | | $ | 3,457 | |
| Ratio of expenses to average net assets | | | | | 1.80 | % | | | 1.82 | % | | | 1.80 | % | | | 1.78 | % | | | 1.74 | % |
| Ratio of net investment income to average net assets | | | | | 3.35 | % | | | 3.07 | % | | | 3.30 | % | | | 3.34 | % | | | 3.51 | % |
| Portfolio turnover rate | | | | | — | | | | 1.47 | % | | | — | | | | 4.43 | % | | | 11.72 | % |
| Without management fee waiver:* |
| Ratio of expenses to average net assets | | | | | 1.90 | % | | | 1.92 | % | | | 1.90 | % | | | 1.88 | % | | | 1.84 | % |
| Ratio of net investment income to average net assets | | | | | 3.25 | % | | | 2.97 | % | | | 3.20 | % | | | 3.24 | % | | | 3.41 | % |
CLASS D
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 6.63 | | | $ | 6.66 | | | $ | 6.60 | | | $ | 6.75 | | | $ | 6.64 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.22 | | | | 0.20 | | | | 0.22 | | | | 0.22 | | | | 0.23 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.02 | ) | | | 0.04 | | | | 0.06 | | | | (0.12 | ) | | | 0.13 | |
Total from Investment Operations | | | | | 0.20 | | | | 0.24 | | | | 0.28 | | | | 0.10 | | | | 0.36 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.22 | ) | | | (0.20 | ) | | | (0.21 | ) | | | (0.22 | ) | | | (0.23 | ) |
| Distributions from net realized capital gain | | | | | — | | | | (0.07 | ) | | | (0.01 | ) | | | (0.03 | ) | | | (0.02 | ) |
Total Distributions | | | | | (0.22 | ) | | | (0.27 | ) | | | (0.22 | ) | | | (0.25 | ) | | | (0.25 | ) |
Net Asset Value, End of Year | | | | $ | 6.61 | | | $ | 6.63 | | | $ | 6.66 | | | $ | 6.60 | | | $ | 6.75 | |
Total Return | | | | | 3.06 | % | | | 3.69 | % | | | 4.35 | % | | | 1.56 | % | | | 5.57 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 3,056 | | | $ | 2,988 | | | $ | 2,519 | | | $ | 4,832 | | | $ | 5,419 | |
| Ratio of expenses to average net assets | | | | | 1.80 | % | | | 1.82 | % | | | 1.80 | % | | | 1.78 | % | | | 1.74 | % |
| Ratio of net investment income to average net assets | | | | | 3.35 | % | | | 3.07 | % | | | 3.30 | % | | | 3.34 | % | | | 3.51 | % |
| Portfolio turnover rate | | | | | — | | | | 1.47 | % | | | — | | | | 4.43 | % | | | 11.72 | % |
| Without management fee waiver:* |
| Ratio of expenses to average net assets | | | | | 1.90 | % | | | 1.92 | % | | | 1.90 | % | | | 1.88 | % | | | 1.84 | % |
| Ratio of net investment income to average net assets | | | | | 3.25 | % | | | 2.97 | % | | | 3.20 | % | | | 3.24 | % | | | 3.41 | % |
See footnotes on page 41.
33
Financial Highlights
California Quality Fund
CLASS A
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 6.79 | | | $ | 6.89 | | | $ | 6.88 | | | $ | 7.04 | | | $ | 6.90 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.28 | | | | 0.28 | | | | 0.28 | | | | 0.27 | | | | 0.29 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.07 | ) | | | (0.02 | ) | | | — | | | | (0.16 | ) | | | 0.20 | |
Total from Investment Operations | | | | | 0.21 | | | | 0.26 | | | | 0.28 | | | | 0.11 | | | | 0.49 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.28 | ) | | | (0.27 | ) | | | (0.27 | ) | | | (0.27 | ) | | | (0.29 | ) |
| Distributions from net realized capital gain | | | | | (0.03 | ) | | | (0.09 | ) | | | — | | | | — | | | | (0.06 | ) |
Total Distributions | | | | | (0.31 | ) | | | (0.36 | ) | | | (0.27 | ) | | | (0.27 | ) | | | (0.35 | ) |
Net Asset Value, End of Year | | | | $ | 6.69 | | | $ | 6.79 | | | $ | 6.89 | | | $ | 6.88 | | | $ | 7.04 | |
Total Return | | | | | 3.14 | % | | | 3.90 | % | | | 4.23 | % | | | 1.63 | % | | | 7.29 | % |
| Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 42,495 | | | $ | 47,186 | | | $ | 51,395 | | | $ | 61,566 | | | $ | 74,713 | |
| Ratio of expenses to average net assets | | | | | 0.94 | % | | | 0.94 | % | | | 0.93 | % | | | 0.93 | % | | | 0.87 | % |
| Ratio of net investment income to average net assets | | | | | 4.19 | % | | | 4.04 | % | | | 4.06 | % | | | 3.96 | % | | | 4.23 | % |
| Portfolio turnover rate | | | | | — | | | | — | | | | 0.86 | % | | | 1.43 | % | | | 6.40 | % |
CLASS C
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 6.76 | | | $ | 6.87 | | | $ | 6.85 | | | $ | 7.01 | | | $ | 6.88 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.22 | | | | 0.21 | | | | 0.22 | | | | 0.21 | | | | 0.23 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.07 | ) | | | (0.02 | ) | | | 0.01 | | | | (0.16 | ) | | | 0.18 | |
Total from Investment Operations | | | | | 0.15 | | | | 0.19 | | | | 0.23 | | | | 0.05 | | | | 0.41 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.22 | ) | | | (0.21 | ) | | | (0.21 | ) | | | (0.21 | ) | | | (0.22 | ) |
| Distributions from net realized capital gain | | | | | (0.03 | ) | | | (0.09 | ) | | | — | | | | — | | | | (0.06 | ) |
Total Distributions | | | | | (0.25 | ) | | | (0.30 | ) | | | (0.21 | ) | | | (0.21 | ) | | | (0.28 | ) |
Net Asset Value, End of Year | | | | $ | 6.66 | | | $ | 6.76 | | | $ | 6.87 | | | $ | 6.85 | | | $ | 7.01 | |
Total Return | | | | | 2.23 | % | | | 2.84 | % | | | 3.46 | % | | | 0.72 | % | | | 6.20 | % |
| |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | | $1,921 | | | $ | 3,259 | | | $ | 4,783 | | | $ | 5,772 | | | $ | 5,067 | |
| Ratio of expenses to average net assets | | | | | 1.84 | % | | | 1.84 | % | | | 1.83 | % | | | 1.83 | % | | | 1.77 | % |
| Ratio of net investment income to average net assets | | | | | 3.29 | % | | | 3.13 | % | | | 3.16 | % | | | 3.06 | % | | | 3.33 | % |
| Portfolio turnover rate | | | | | — | | | | — | | | | 0.86 | % | | | 1.43 | % | | | 6.40 | % |
See footnotes on page 41.
34
Financial Highlights
California Quality Fund (continued)
CLASS D
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 6.76 | | | $ | 6.87 | | | $ | 6.85 | | | $ | 7.01 | | | $ | 6.88 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.22 | | | | 0.21 | | | | 0.22 | | | | 0.21 | | | | 0.23 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.07 | ) | | | (0.02 | ) | | | 0.01 | | | | (0.16 | ) | | | 0.18 | |
Total from Investment Operations | | | | | 0.15 | | | | 0.19 | | | | 0.23 | | | | 0.05 | | | | 0.41 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.22 | ) | | | (0.21 | ) | | | (0.21 | ) | | | (0.21 | ) | | | (0.22 | ) |
| Distributions from net realized capital gain | | | | | (0.03 | ) | | | (0.09 | ) | | | — | | | | — | | | | (0.06 | ) |
Total Distributions | | | | | (0.25 | ) | | | (0.30 | ) | | | (0.21 | ) | | | (0.21 | ) | | | (0.28 | ) |
Net Asset Value, End of Year | | | | $ | 6.66 | | | $ | 6.76 | | | $ | 6.87 | | | $ | 6.85 | | | $ | 7.01 | |
Total Return | | | | | 2.23 | % | | | 2.84 | % | | | 3.46 | % | | | 0.72 | % | | | 6.20 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 1,037 | | | $ | 1,022 | | | $ | 1,306 | | | $ | 1,512 | | | $ | 1,956 | |
| Ratio of expenses to average net assets | | | | | 1.84 | % | | | 1.84 | % | | | 1.83 | % | | | 1.83 | % | | | 1.77 | % |
| Ratio of net investment income to average net assets | | | | | 3.29 | % | | | 3.13 | % | | | 3.16 | % | | | 3.06 | % | | | 3.33 | % |
| Portfolio turnover rate | | | | | — | | | | — | | | | 0.86 | % | | | 1.43 | % | | | 6.40 | % |
Florida Fund
CLASS A
|
|
|---|
| | Year Ended September 30,
|
|
|---|
Per Share Data:
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | $ | 7.92 | | | $ | 8.00 | | | $ | 8.08 | | | $ | 8.08 | | | $ | 7.88 | |
Income from Investment Operations: |
| Net investment income | | | 0.33 | | | | 0.33 | | | | 0.32 | | | | 0.32 | | | | 0.34 | |
| Net realized and unrealized gain (loss) on investments | | | (0.11 | ) | | | (0.08 | ) | | | (0.06 | ) | | | 0.01 | | | | 0.20 | |
Total from Investment Operations | | | 0.22 | | | | 0.25 | | | | 0.26 | | | | 0.33 | | | | 0.54 | |
Less Distributions: |
| Dividends from net investment income | | | (0.32 | ) | | | (0.32 | ) | | | (0.32 | ) | | | (0.32 | ) | | | (0.34 | ) |
| Distributions from net realized capital gain | | | (0.05 | ) | | | (0.01 | ) | | | (0.02 | ) | | | (0.01 | ) | | | — | |
Total Distributions | | | (0.37 | ) | | | (0.33 | ) | | | (0.34 | ) | | | (0.33 | ) | | | (0.34 | ) |
Net Asset Value, End of Year | | $ | 7.77 | | | $ | 7.92 | | | $ | 8.00 | | | $ | 8.08 | | | $ | 8.08 | |
Total Return | | | 2.86 | % | | | 3.17 | % | | | 3.26 | % | | | 4.16 | % | | | 7.08 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | $ | 25,750 | | | $ | 29,298 | | | $ | 32,470 | | | $ | 34,131 | | | $ | 37,513 | |
| Ratio of expenses to average net assets | | | 1.00 | % | | | 0.98 | % | | | 0.99 | % | | | 1.00 | % | | | 0.94 | % |
| Ratio of net investment income to average net assets | | | 4.20 | % | | | 4.11 | % | | | 4.05 | % | | | 3.98 | % | | | 4.37 | % |
| Portfolio turnover rate | | | 5.12 | % | | | — | | | | — | | | | 12.51 | % | | | 10.19 | % |
| Without management fee waiver:* |
| Ratio of expenses to average net assets | | | 1.15 | % | | | 1.13 | % | | | 1.14 | % | | | 1.15 | % | | | 1.09 | % |
| Ratio of net investment income to average net assets | | | 4.05 | % | | | 3.96 | % | | | 3.90 | % | | | 3.83 | % | | | 4.22 | % |
See footnotes on page 41.
35
Financial Highlights
Florida Fund (continued)
CLASS C
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 7.93 | | | $ | 8.02 | | | $ | 8.09 | | | $ | 8.10 | | | $ | 7.90 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.27 | | | | 0.27 | | | | 0.26 | | | | 0.26 | | | | 0.29 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.09 | ) | | | (0.09 | ) | | | (0.05 | ) | | | — | | | | 0.19 | |
Total from Investment Operations | | | | | 0.18 | | | | 0.18 | | | | 0.21 | | | | 0.26 | | | | 0.48 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.27 | ) | | | (0.26 | ) | | | (0.26 | ) | | | (0.26 | ) | | | (0.28 | ) |
| Distributions from net realized capital gain | | | | | (0.05 | ) | | | (0.01 | ) | | | (0.02 | ) | | | (0.01 | ) | | | — | |
Total Distributions | | | | | (0.32 | ) | | | (0.27 | ) | | | (0.28 | ) | | | (0.27 | ) | | | (0.28 | ) |
Net Asset Value, End of Year | | | | $ | 7.79 | | | $ | 7.93 | | | $ | 8.02 | | | $ | 8.09 | | | $ | 8.10 | |
Total Return | | | | | 2.22 | % | | | 2.27 | % | | | 2.61 | % | | | 3.24 | % | | | 6.26 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 3,171 | | | $ | 3,907 | | | $ | 4,683 | | | $ | 4,686 | | | $ | 3,839 | |
| Ratio of expenses to average net assets | | | | | 1.75 | % | | | 1.73 | % | | | 1.74 | % | | | 1.75 | % | | | 1.69 | % |
| Ratio of net investment income to average net assets | | | | | 3.45 | % | | | 3.36 | % | | | 3.30 | % | | | 3.23 | % | | | 3.62 | % |
| Portfolio turnover rate | | | | | 5.12 | % | | | — | | | | — | | | | 12.51 | % | | | 10.19 | % |
| Without management fee waiver:* |
| Ratio of expenses to average net assets | | | | | 1.90 | % | | | 1.88 | % | | | 1.89 | % | | | 1.90 | % | | | 1.84 | % |
| Ratio of net investment income to average net assets | | | | | 3.30 | % | | | 3.21 | % | | | 3.15 | % | | | 3.08 | % | | | 3.47 | % |
CLASS D
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 7.93 | | | $ | 8.02 | | | $ | 8.10 | | | $ | 8.10 | | | $ | 7.90 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.27 | | | | 0.27 | | | | 0.26 | | | | 0.26 | | | | 0.29 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.09 | ) | | | (0.09 | ) | | | (0.06 | ) | | | 0.01 | | | | 0.19 | |
Total from Investment Operations | | | | | 0.18 | | | | 0.18 | | | | 0.20 | | | | 0.27 | | | | 0.48 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.27 | ) | | | (0.26 | ) | | | (0.26 | ) | | | (0.26 | ) | | | (0.28 | ) |
| Distributions from net realized capital gain | | | | | (0.05 | ) | | | (0.01 | ) | | | (0.02 | ) | | | (0.01 | ) | | | — | |
Total Distributions | | | | | (0.32 | ) | | | (0.27 | ) | | | (0.28 | ) | | | (0.27 | ) | | | (0.28 | ) |
Net Asset Value, End of Year | | | | $ | 7.79 | | | $ | 7.93 | | | $ | 8.02 | | | $ | 8.10 | | | $ | 8.10 | |
Total Return | | | | | 2.22 | % | | | 2.27 | % | | | 2.48 | % | | | 3.37 | % | | | 6.26 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 1,164 | | | $ | 1,176 | | | $ | 1,351 | | | $ | 1,567 | | | $ | 1,904 | |
| Ratio of expenses to average net assets | | | | | 1.75 | % | | | 1.73 | % | | | 1.74 | % | | | 1.75 | % | | | 1.69 | % |
| Ratio of net investment income to average net assets | | | | | 3.45 | % | | | 3.36 | % | | | 3.30 | % | | | 3.23 | % | | | 3.62 | % |
| Portfolio turnover rate | | | | | 5.12 | % | | | — | | | | — | | | | 12.51 | % | | | 10.19 | % |
| Without management fee waiver:* |
| Ratio of expenses to average net assets | | | | | 1.90 | % | | | 1.88 | % | | | 1.89 | % | | | 1.90 | % | | | 1.84 | % |
| Ratio of net investment income to average net assets | | | | | 3.30 | % | | | 3.21 | % | | | 3.15 | % | | | 3.08 | % | | | 3.47 | % |
See footnotes on page 41.
36
Financial Highlights
North Carolina Fund
CLASS A
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 7.94 | | | $ | 8.05 | | | $ | 8.14 | | | $ | 8.19 | | | $ | 7.89 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.27 | | | | 0.29 | | | | 0.29 | | | | 0.29 | | | | 0.32 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.02 | ) | | | (0.10 | ) | | | (0.07 | ) | | | (0.01 | ) | | | 0.31 | |
Total from Investment Operations | | | | | 0.25 | | | | 0.19 | | | | 0.22 | | | | 0.28 | | | | 0.63 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.27 | ) | | | (0.28 | ) | | | (0.28 | ) | | | (0.29 | ) | | | (0.32 | ) |
| Distributions from net realized capital gain | | | | | (0.06 | ) | | | (0.02 | ) | | | (0.03 | ) | | | (0.04 | ) | | | (0.01 | ) |
Total Distributions | | | | | (0.33 | ) | | | (0.30 | ) | | | (0.31 | ) | | | (0.33 | ) | | | (0.33 | ) |
Net Asset Value, End of Year | | | | $ | 7.86 | | | $ | 7.94 | | | $ | 8.05 | | | $ | 8.14 | | | $ | 8.19 | |
Total Return | | | | | 3.14 | % | | | 2.45 | % | | | 2.82 | % | | | 3.51 | % | | | 8.21 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 15,471 | | | $ | 16,781 | | | $ | 19,856 | | | $ | 22,778 | | | $ | 25,386 | |
| Ratio of expenses to average net assets | | | | | 1.28 | % | | | 1.24 | % | | | 1.19 | % | | | 1.19 | % | | | 1.11 | % |
| Ratio of net investment income to average net assets | | | | | 3.51 | % | | | 3.60 | % | | | 3.55 | % | | | 3.65 | % | | | 4.11 | % |
| Portfolio turnover rate | | | | | 29.32 | % | | | — | | | | 7.93 | % | | | 10.00 | % | | | 7.96 | % |
CLASS C
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 7.94 | | | $ | 8.04 | | | $ | 8.13 | | | $ | 8.18 | | | $ | 7.88 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.22 | | | | 0.23 | | | | 0.22 | | | | 0.23 | | | | 0.27 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.03 | ) | | | (0.09 | ) | | | (0.06 | ) | | | (0.01 | ) | | | 0.30 | |
Total from Investment Operations | | | | | 0.19 | | | | 0.14 | | | | 0.16 | | | | 0.22 | | | | 0.57 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.21 | ) | | | (0.22 | ) | | | (0.22 | ) | | | (0.23 | ) | | | (0.26 | ) |
| Distributions from net realized capital gain | | | | | (0.06 | ) | | | (0.02 | ) | | | (0.03 | ) | | | (0.04 | ) | | | (0.01 | ) |
Total Distributions | | | | | (0.27 | ) | | | (0.24 | ) | | | (0.25 | ) | | | (0.27 | ) | | | (0.27 | ) |
Net Asset Value, End of Year | | | | $ | 7.86 | | | $ | 7.94 | | | $ | 8.04 | | | $ | 8.13 | | | $ | 8.18 | |
Total Return | | | | | 2.37 | % | | | 1.82 | % | | | 2.06 | % | | | 2.74 | % | | | 7.41 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 1,142 | | | $ | 1,414 | | | $ | 3,012 | | | $ | 2,778 | | | $ | 2,962 | |
| Ratio of expenses to average net assets | | | | | 2.03 | % | | | 1.99 | % | | | 1.94 | % | | | 1.94 | % | | | 1.86 | % |
| Ratio of net investment income to average net assets | | | | | 2.76 | % | | | 2.85 | % | | | 2.80 | % | | | 2.90 | % | | | 3.36 | % |
| Portfolio turnover rate | | | | | 29.32 | % | | | — | | | | 7.93 | % | | | 10.00 | % | | | 7.96 | % |
See footnotes on page 41.
37
Financial Highlights
North Carolina Fund (continued)
CLASS D
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 7.93 | | | $ | 8.04 | | | $ | 8.13 | | | $ | 8.18 | | | $ | 7.88 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.22 | | | | 0.23 | | | | 0.22 | | | | 0.23 | | | | 0.27 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.03 | ) | | | (0.10 | ) | | | (0.06 | ) | | | (0.01 | ) | | | 0.30 | |
Total from Investment Operations | | | | | 0.19 | | | | 0.13 | | | | 0.16 | | | | 0.22 | | | | 0.57 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.21 | ) | | | (0.22 | ) | | | (0.22 | ) | | | (0.23 | ) | | | (0.26 | ) |
| Distributions from net realized capital gain | | | | | (0.06 | ) | | | (0.02 | ) | | | (0.03 | ) | | | (0.04 | ) | | | (0.01 | ) |
Total Distributions | | | | | (0.27 | ) | | | (0.24 | ) | | | (0.25 | ) | | | (0.27 | ) | | | (0.27 | ) |
Net Asset Value, End of Year | | | | $ | 7.85 | | | $ | 7.93 | | | $ | 8.04 | | | $ | 8.13 | | | $ | 8.18 | |
Total Return | | | | | 2.37 | % | | | 1.69 | % | | | 2.06 | % | | | 2.74 | % | | | 7.41 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 517 | | | $ | 532 | | | $ | 706 | | | $ | 824 | | | $ | 941 | |
| Ratio of expenses to average net assets | | | | | 2.03 | % | | | 1.99 | % | | | 1.94 | % | | | 1.94 | % | | | 1.86 | % |
| Ratio of net investment income to average net assets | | | | | 2.76 | % | | | 2.85 | % | | | 2.80 | % | | | 2.90 | % | | | 3.36 | % |
| Portfolio turnover rate | | | | | 29.32 | % | | | — | | | | 7.93 | % | | | 10.00 | % | | | 7.96 | % |
New Jersey Fund
CLASS A
|
|
|---|
| | Year Ended September 30,
|
|
|---|
Per Share Data:
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | $ | 7.49 | | | $ | 7.54 | | | $ | 7.60 | | | $ | 7.65 | | | $ | 7.44 | |
Income from Investment Operations: |
| Net investment income | | | 0.30 | | | | 0.30 | | | | 0.29 | | | | 0.29 | | | | 0.31 | |
| Net realized and unrealized gain (loss) on investments | | | (0.08 | ) | | | (0.04 | ) | | | (0.05 | ) | | | (0.04 | ) | | | 0.22 | |
Total from Investment Operations | | | 0.22 | | | | 0.26 | | | | 0.24 | | | | 0.25 | | | | 0.53 | |
Less Distributions: |
| Dividends from net investment income | | | (0.30 | ) | | | (0.30 | ) | | | (0.29 | ) | | | (0.29 | ) | | | (0.31 | ) |
| Distributions from net realized capital gain | | | (0.04 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.01 | ) |
Total Distributions | | | (0.34 | ) | | | (0.31 | ) | | | (0.30 | ) | | | (0.30 | ) | | | (0.32 | ) |
Net Asset Value, End of Year | | $ | 7.37 | | | $ | 7.49 | | | $ | 7.54 | | | $ | 7.60 | | | $ | 7.65 | |
Total Return | | | 2.99 | % | | | 3.40 | % | | | 3.28 | % | | | 3.34 | % | | | 7.29 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | $ | 32,449 | | | $ | 35,209 | | | $ | 43,324 | | | $ | 46,610 | | | $ | 49,274 | |
| Ratio of expenses to average net assets | | | 1.15 | % | | | 1.20 | % | | | 1.13 | % | | | 1.13 | % | | | 1.04 | % |
| Ratio of net investment income to average net assets | | | 4.03 | % | | | 3.95 | % | | | 3.91 | % | | | 3.82 | % | | | 4.23 | % |
| Portfolio turnover rate | | | 4.39 | % | | | 2.53 | % | | | — | | | | 4.39 | % | | | 13.02 | % |
See footnotes on page 41.
38
Financial Highlights
New Jersey Fund (continued)
CLASS C
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 7.59 | | | $ | 7.64 | | | $ | 7.69 | | | $ | 7.74 | | | $ | 7.52 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.24 | | | | 0.24 | | | | 0.24 | | | | 0.23 | | | | 0.26 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.08 | ) | | | (0.04 | ) | | | (0.04 | ) | | | (0.04 | ) | | | 0.23 | |
Total from Investment Operations | | | | | 0.16 | | | | 0.20 | | | | 0.20 | | | | 0.19 | | | | 0.49 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.24 | ) | | | (0.24 | ) | | | (0.24 | ) | | | (0.23 | ) | | | (0.26 | ) |
| Distributions from net realized capital gain | | | | | (0.04 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.01 | ) |
Total Distributions | | | | | (0.28 | ) | | | (0.25 | ) | | | (0.25 | ) | | | (0.24 | ) | | | (0.27 | ) |
Net Asset Value, End of Year | | | | $ | 7.47 | | | $ | 7.59 | | | $ | 7.64 | | | $ | 7.69 | | | $ | 7.74 | |
Total Return | | | | | 2.17 | % | | | 2.57 | % | | | 2.58 | % | | | 2.52 | % | | | 6.54 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 3,289 | | | $ | 3,453 | | | $ | 3,659 | | | $ | 5,271 | | | $ | 5,096 | |
| Ratio of expenses to average net assets | | | | | 1.91 | % | | | 1.96 | % | | | 1.90 | % | | | 1.90 | % | | | 1.84 | % |
| Ratio of net investment income to average net assets | | | | | 3.28 | % | | | 3.19 | % | | | 3.14 | % | | | 3.05 | % | | | 3.44 | % |
| Portfolio turnover rate | | | | | 4.39 | % | | | 2.53 | % | | | — | | | | 4.39 | % | | | 13.02 | % |
CLASS D
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 7.59 | | | $ | 7.64 | | | $ | 7.69 | | | $ | 7.74 | | | $ | 7.52 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.24 | | | | 0.24 | | | | 0.24 | | | | 0.23 | | | | 0.26 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.08 | ) | | | (0.04 | ) | | | (0.04 | ) | | | (0.04 | ) | | | 0.23 | |
Total from Investment Operations | | | | | 0.16 | | | | 0.20 | | | | 0.20 | | | | 0.19 | | | | 0.49 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.24 | ) | | | (0.24 | ) | | | (0.24 | ) | | | (0.23 | ) | | | (0.26 | ) |
| Distributions from net realized capital gain | | | | | (0.04 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.01 | ) |
Total Distributions | | | | | (0.28 | ) | | | (0.25 | ) | | | (0.25 | ) | | | (0.24 | ) | | | (0.27 | ) |
Net Asset Value, End of Year | | | | $ | 7.47 | | | $ | 7.59 | | | $ | 7.64 | | | $ | 7.69 | | | $ | 7.74 | |
Total Return | | | | | 2.17 | % | | | 2.57 | % | | | 2.58 | % | | | 2.52 | % | | | 6.54 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 864 | | | $ | 920 | | | $ | 1,002 | | | $ | 1,299 | | | $ | 1,366 | |
| Ratio of expenses to average net assets | | | | | 1.91 | % | | | 1.96 | % | | | 1.90 | % | | | 1.90 | % | | | 1.84 | % |
| Ratio of net investment income to average net assets | | | | | 3.28 | % | | | 3.19 | % | | | 3.14 | % | | | 3.05 | % | | | 3.44 | % |
| Portfolio turnover rate | | | | | 4.39 | % | | | 2.53 | % | | | — | | | | 4.39 | % | | | 13.02 | % |
See footnotes on page 41.
39
Financial Highlights
Pennsylvania Fund
CLASS A
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 7.93 | | | $ | 8.03 | | | $ | 8.09 | | | $ | 8.26 | | | $ | 7.92 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.27 | | | | 0.28 | | | | 0.27 | | | | 0.27 | | | | 0.33 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.04 | ) | | | (0.10 | ) | | | (0.05 | ) | | | (0.08 | ) | | | 0.34 | |
Total from Investment Operations | | | | | 0.23 | | | | 0.18 | | | | 0.22 | | | | 0.19 | | | | 0.67 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.26 | ) | | | (0.27 | ) | | | (0.27 | ) | | | (0.27 | ) | | | (0.32 | ) |
| Distributions from net realized capital gain | | | | | (0.06 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.09 | ) | | | (0.01 | ) |
Total Distributions | | | | | (0.32 | ) | | | (0.28 | ) | | | (0.28 | ) | | | (0.36 | ) | | | (0.33 | ) |
Net Asset Value, End of Year | | | | $ | 7.84 | | | $ | 7.93 | | | $ | 8.03 | | | $ | 8.09 | | | $ | 8.26 | |
Total Return | | | | | 3.02 | % | | | 2.34 | % | | | 2.72 | % | | | 2.37 | % | | | 8.75 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 16,906 | | | $ | 18,548 | | | $ | 19,721 | | | $ | 22,354 | | | $ | 23,493 | |
| Ratio of expenses to average net assets | | | | | 1.43 | % | | | 1.48 | % | | | 1.36 | % | | | 1.30 | % | | | 1.25 | % |
| Ratio of net investment income to average net assets | | | | | 3.45 | % | | | 3.54 | % | | | 3.32 | % | | | 3.38 | % | | | 4.11 | % |
| Portfolio turnover rate | | | | | 2.98 | % | | | 18.95 | % | | | 5.34 | % | | | 8.30 | % | | | 16.73 | % |
CLASS C
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 7.91 | | | $ | 8.01 | | | $ | 8.07 | | | $ | 8.24 | | | $ | 7.91 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.21 | | | | 0.22 | | | | 0.21 | | | | 0.21 | | | | 0.27 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.04 | ) | | | (0.10 | ) | | | (0.05 | ) | | | (0.08 | ) | | | 0.33 | |
Total from Investment Operations | | | | | 0.17 | | | | 0.12 | | | | 0.16 | | | | 0.13 | | | | 0.60 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.20 | ) | | | (0.21 | ) | | | (0.21 | ) | | | (0.21 | ) | | | (0.26 | ) |
| Distributions from net realized capital gain | | | | | (0.06 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.09 | ) | | | (0.01 | ) |
Total Distributions | | | | | (0.26 | ) | | | (0.22 | ) | | | (0.22 | ) | | | (0.30 | ) | | | (0.27 | ) |
Net Asset Value, End of Year | | | | $ | 7.82 | | | $ | 7.91 | | | $ | 8.01 | | | $ | 8.07 | | | $ | 8.24 | |
Total Return | | | | | 2.26 | % | | | 1.58 | % | | | 1.96 | % | | | 1.60 | % | | | 7.79 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 785 | | | $ | 913 | | | $ | 1,100 | | | $ | 1,133 | | | $ | 1,029 | |
| Ratio of expenses to average net assets | | | | | 2.18 | % | | | 2.23 | % | | | 2.11 | % | | | 2.05 | % | | | 2.00 | % |
| Ratio of net investment income to average net assets | | | | | 2.70 | % | | | 2.79 | % | | | 2.57 | % | | | 2.63 | % | | | 3.36 | % |
| Portfolio turnover rate | | | | | 2.98 | % | | | 18.95 | % | | | 5.34 | % | | | 8.30 | % | | | 16.73 | % |
See footnotes on page 41.
40
Financial Highlights
Pennsylvania Fund (continued)
CLASS D
|
|
|---|
| | | | Year Ended September 30,
|
|
|---|
Per Share Data:
|
|
|
| 2006
|
| 2005
|
| 2004
|
| 2003
|
| 2002
|
|---|
Net Asset Value, Beginning of Year | | | | $ | 7.91 | | | $ | 8.01 | | | $ | 8.07 | | | $ | 8.24 | | | $ | 7.91 | |
Income from Investment Operations: |
| Net investment income | | | | | 0.21 | | | | 0.22 | | | | 0.21 | | | | 0.21 | | | | 0.27 | |
| Net realized and unrealized gain (loss) on investments | | | | | (0.04 | ) | | | (0.10 | ) | | | (0.05 | ) | | | (0.08 | ) | | | 0.33 | |
Total from Investment Operations | | | | | 0.17 | | | | 0.12 | | | | 0.16 | | | | 0.13 | | | | 0.60 | |
Less Distributions: |
| Dividends from net investment income | | | | | (0.20 | ) | | | (0.21 | ) | | | (0.21 | ) | | | (0.21 | ) | | | (0.26 | ) |
| Distributions from net realized capital gain | | | | | (0.06 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.09 | ) | | | (0.01 | ) |
Total Distributions | | | | | (0.26 | ) | | | (0.22 | ) | | | (0.22 | ) | | | (0.30 | ) | | | (0.27 | ) |
Net Asset Value, End of Year | | | | $ | 7.82 | | | $ | 7.91 | | | $ | 8.01 | | | $ | 8.07 | | | $ | 8.24 | |
Total Return | | | | | 2.26 | % | | | 1.58 | % | | | 1.96 | % | | | 1.60 | % | | | 7.79 | % |
Ratios/Supplemental Data: |
| Net assets, end of year (000s omitted) | | | | $ | 460 | | | $ | 490 | | | $ | 556 | | | $ | 624 | | | $ | 690 | |
| Ratio of expenses to average net assets | | | | | 2.18 | % | | | 2.23 | % | | | 2.11 | % | | | 2.05 | % | | | 2.00 | % |
| Ratio of net investment income to average net assets | | | | | 2.70 | % | | | 2.79 | % | | | 2.57 | % | | | 2.63 | % | | | 3.36 | % |
| Portfolio turnover rate | | | | | 2.98 | % | | | 18.95 | % | | | 5.34 | % | | | 8.30 | % | | | 16.73 | % |
| * | | During the periods stated, the Manager, at its discretion, waived portions of its management fees for California High-Yield Fund and Florida Fund (Note 3). |
See Notes to Financial Statements.
41
Report of Independent Registered Public Accounting Firm
The Board of Directors/Trustees and Shareholders,
Seligman Municipal Series Trust,
Seligman New Jersey Municipal Fund, Inc. and
Seligman Pennsylvania Municipal Fund Series:
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Seligman Municipal Series Trust (comprising the California High-Yield, California Quality, Florida and North Carolina Funds), Seligman New Jersey Municipal Fund, Inc. and Seligman Pennsylvania Municipal Fund Series (collectively referred to as the “Funds”) as of September 30, 2006, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor are we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2006, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the funds constituting Seligman Municipal Series Trust, Seligman New Jersey Municipal Fund, Inc. and Seligman Pennsylvania Municipal Fund Series as of September 30, 2006, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for the respective stated periods, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
New York, New York
November 29, 2006
42
Directors/Trustees and Officers
Information pertaining to the Directors/Trustees and Officers of Seligman Municipal Series Trust, Seligman New Jersey Municipal Fund, Inc.,
and Seligman Pennsylvania Municipal Fund Series is set forth below.
Independent Directors/Trustees
Name, (Age), Position(s)
held with Fundsø
|
|
|
| Principal Occupation(s) During Past Five Years, Directorships
and Other Information
|
John R. Galvin (77)1,3
• Director/Trustee:
1995 to Date
• Oversees 60 Portfolios in Fund Complex | | | | Dean Emeritus, Fletcher School of Law and Diplomacy at Tufts University; Director or Trustee of each of the investment companies of the Seligman Group of Funds†; and Chairman Emeritus, American Council on Germany. Formerly, Director, Raytheon Co. (defense and commercial electronics), Governor of the Center for Creative Leadership, and Trustee, Institute for Defense Analyses. From February 1995 until June 1997, he was a Director of USLIFE Corporation (life insurance). From June 1987 to June 1992, Mr. Galvin was the Supreme Allied Commander, NATO, and the Commander-in-Chief, United States European Command. |
Frank A. McPherson (73)2,3
• Director/Trustee:
1995 to Date
• Oversees 60 Portfolios in Fund Complex | | | | Retired Chairman of the Board and Chief Executive Officer of Kerr-McGee Corporation (diversified energy and chemical company); Director or Trustee of each of the investment companies of the Seligman Group of Funds†; and Director, DCP Midstream GP, LLP (natural gas processing), Integris Health (owner of various hospitals), Oklahoma Chapter of the Nature Conservancy, Oklahoma Medical Research Foundation, Boys and Girls Clubs of Oklahoma, Oklahoma City Public Schools Foundation, and Oklahoma Foundation for Excellence in Education. Formerly, Director, ConocoPhillips (integrated international oil corporation), Kimberly-Clark Corporation (consumer products) and BOK Financial (bank holding company). From 1990 until 1994, Director, the Federal Reserve System’s Kansas City Reserve Bank. |
Betsy S. Michel (64)1,3
• Trustee, Seligman Municipal Series Trust: 1984 to Date; Seligman Pennsylvania Municipal Fund Series: 1986 to Date
• Director, Seligman New Jersey Municipal Fund:
1988 to Date
• Oversees 60 Portfolios in Fund Complex | | | | Attorney; Director or Trustee of each of the investment companies of the Seligman Group of Funds†; and Trustee, The Geraldine R. Dodge Foundation (charitable foundation). Formerly, Chairman of the Board of Trustees of St. George’s School (Newport, RI); and Trustee, World Learning, Inc. (international educational training), and Council of New Jersey Grantmakers. |
Leroy C. Richie (65)1,3
• Director/Trustee:
2000 to Date
• Oversees 59 Portfolios in Fund Complex | | | | Counsel, Lewis & Munday, P.C. (law firm); Chairman and Chief Executive Officer, Q Standards Worldwide, Inc. (library of technical standards); Director or Trustee of each of the investment companies of the Seligman Group of Funds† (with the exception of Seligman Cash Management Fund, Inc.); Director, Kerr-McGee Corporation (diversified energy and chemical company), Infinity, Inc. (oil and gas services and exploration), and Vibration Control Technologies, LLC (auto vibration technology); Lead Outside Director, Digital Ally Inc. (digital imaging); Director and Chairman, Highland Park Michigan Economic Development Corp.; and Chairman, Detroit Public Schools Foundation. Formerly, Trustee, New York University Law Center Foundation; and Vice Chairman, Detroit Medical Center and Detroit Economic Growth Corp. From 1990 until 1997, Vice President and General Counsel, Automotive Legal Affairs, Chrysler Corporation. |
Robert L. Shafer (74)2,3
• Trustee, Seligman Municipal Series Trust: 1984 to Date; Seligman Pennsylvania Municipal Fund Series: 1986 to Date
• Director, Seligman New Jersey Municipal Fund:
1988 to Date
• Oversees 60 Portfolios in Fund Complex | | | | Ambassador and Permanent Observer of the Sovereign Military Order of Malta to the United Nations; and Director or Trustee of each of the investment companies of the Seligman Group of Funds†. From May 1987 until June 1997, Director, USLIFE Corporation (life insurance) and from 1973 until January 1996, Vice President, Pfizer Inc. (pharmaceuticals). |
James N. Whitson (71)1,3
• Director/Trustee:
1993 to Date
• Oversees 60 Portfolios in Fund Complex | | | | Retired Executive Vice President and Chief Operating Officer, Sammons Enterprises, Inc. (a diversified holding company); Director or Trustee of each of the investment companies of the Seligman Group of Funds†; and Director, CommScope, Inc. (manufacturer of coaxial cable). Formerly, Director and Consultant, Sammons Enterprises, Inc. and Director, C-SPAN (cable television networks). |
See footnotes on page 45.
43
Directors/Trustees and Officers
Interested Directors/Trustees and Principal Officers
Name, (Age), Position(s)
held with Fundø
|
|
|
| Principal Occupation(s) During Past Five Years, Directorships
and Other Information
|
William C. Morris* (68)
• Director/Trustee and Chairman of the Board: 1988 to Date
• Oversees 60 Portfolios in Fund Complex | | | | Chairman, J. & W. Seligman & Co. Incorporated; Chairman of the Board and Director or Trustee of each of the investment companies of the Seligman Group of Funds†; Chairman, Seligman Advisors, Inc., Seligman Services, Inc. and Carbo Ceramics Inc. (manufacturer of ceramic proponents for oil and gas industry); Director, Seligman Data Corp.; and President and Chief Executive Officer of The Metropolitan Opera Association. Formerly, Director, Kerr-McGee Corporation (diversified energy and chemical company) and Chief Executive Officer of each of the investment companies of the Seligman Group of Funds. |
Brian T. Zino* (54)
• Director/Trustee:
1993 to Date
• President: 1995 to Date
• Chief Executive Officer: 2002 to Date
• Oversees 59 Portfolios in Fund Complex | | | | Director and President, J. & W. Seligman & Co. Incorporated; President, Chief Executive Officer, and, with the exception of Seligman Cash Management Fund, Inc., Director or Trustee of each of the investment companies of the Seligman Group of Funds†; Director, Seligman Advisors, Inc. and Seligman Services, Inc.; Chairman, Seligman Data Corp.; Member of the Board of Governors of the Investment Company Institute; and Director (formerly Chairman), ICI Mutual Insurance Company. |
Thomas G. Moles (64)
• Vice President and Portfolio Manager, Seligman Municipal Series Trust: 1984 to Date; Seligman Pennsylvania Municipal Fund Series: 1986 to Date; and Seligman New Jersey Municipal Fund:
1988 to Date | | | | Director and Managing Director, J. & W. Seligman & Co. Incorporated; Vice President and Co-Portfolio Manager, Seligman Municipal Fund Series, Inc; Executive Vice President and Co-Portfolio Manager, Seligman Quality Municipal Fund, Inc. and Seligman Select Municipal Fund, Inc. (closed-end investment companies); and Director, Seligman Advisors, Inc. and Seligman Services, Inc. |
Eileen A. Comerford (48)
• Vice President and Co-Portfolio Manager:
2003 to Date | | | | Senior Vice President and Investment Officer, J. & W. Seligman & Co. Incorporated; Vice President and Co-Portfolio Manager, Seligman Municipal Fund Series, Inc., Seligman Quality Municipal Fund, Inc. and Seligman Select Municipal Fund, Inc. |
Eleanor T.M. Hoagland (55)
• Vice President and Chief Compliance Officer:
2004 to Date | | | | Managing Director, J. & W. Seligman & Co. Incorporated; Vice President and Chief Compliance Officer for each of the investment companies of the Seligman Group of Funds†. |
Thomas G. Rose (48)
• Vice President:
2000 to Date | | | | Managing Director, Chief Financial Officer, Senior Vice President, Finance, and Treasurer, J. & W. Seligman & Co. Incorporated; Senior Vice President, Finance, Seligman Advisors, Inc. and Seligman Data Corp.; Vice President of each of the investment companies of the Seligman Group of Funds†, Seligman Services, Inc. and Seligman International, Inc. |
Lawrence P. Vogel (50)
• Vice President: 1992 to Date
• Treasurer: 2000 to Date | | | | Senior Vice President and Treasurer, Investment Companies, J. & W. Seligman & Co. Incorporated; Vice President and Treasurer of each of the investment companies of the Seligman Group of Funds† and Treasurer of Seligman Data Corp. |
See footnotes on page 45.
44
Directors/Trustees and Officers
Interested Directors/Trustees and Principal Officers (continued)
Name, (Age), Position(s)
held with Fundø
|
|
|
| Principal Occupation(s) During Past Five Years, Directorships
and Other Information
|
Frank J. Nasta (42)
• Secretary: 1994 to Date | | | | Director, Managing Director, General Counsel and Corporate Secretary, J. & W. Seligman & Co. Incorporated; Secretary of each of the investment companies of the Seligman Group of Funds†; and Corporate Secretary, Seligman Advisors, Inc., Seligman Services, Inc., Seligman International, Inc. and Seligman Data Corp. |
| The Funds’ Statements of Additional Information (SAI) include additional information about Fund directors/trustees, and are available, without charge, upon request. You may call toll-free (800) 221-2450 in the US or collect (212) 682-7600 outside the US to request a copy of an SAI, to request other information about the Funds, or to make shareholder inquiries. |
| ø | | The address for each of the directors/trustees and officers is 100 Park Avenue, 8th floor, New York, NY 10017. Each director/trustee serves for an indefinite term, until the election and qualification of a successor or until his or her earlier death, resignation or removal. Each officer is elected annually by the Board of Directors/Trustees. |
| † | | The Seligman Group of Funds consists of 24 registered investment companies. |
| * | | Mr. Morris and Mr. Zino are considered “interested persons” of the Funds, as defined in the Investment Company Act of 1940, as amended, by virtue of their positions with J. & W. Seligman & Co. Incorporated and its affiliates. |
| Member: | | 1 Audit Committee
2 Director/Trustee Nominating Committee
3 Board Operations Committee |
Additional Fund Information
Quarterly Schedule of Investments
A complete schedule of portfolio holdings owned by the Funds will be filed with the SEC for the first and third quarters of each fiscal year on Form N-Q, and will be available to shareholders (i) without charge, upon request, by calling toll-free (800) 221-2450 in the US or collect (212) 682-7600 outside the US or (ii) on the SEC’s website at www.sec.gov.1 In addition, the Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Certain of the information contained on the Fund’s Form N-Q is also made available to shareholders on Seligman’s website at www.seligman.com.1
Proxy Voting
A description of the policies and procedures used by the Funds to determine how to vote proxies relating to portfolio securities, as well as information regarding how the Funds voted proxies relating to portfolio securities during the 12-month period ended June 30 of each year, will be available (i) without charge, upon request, by calling toll-free (800) 221-2450 in the US or collect (212) 682-7600 outside the US and (ii) on the SEC’s website at www.sec.gov.1 Information for each new 12-month period ending June 30 will be available no later than August 31 of that year.
1 | |
These website references are inactive textual references and information contained in or otherwise accessible through these websites does not form a part of this report or the Funds’ prospectus or statements of additional information. |
45
| | As of September 30, 2006, the registrant has adopted a code of ethics that applies to its principal executive and principal financial officers. |
ITEM 3. | | AUDIT COMMITTEE FINANCIAL EXPERT. |
| | The registrant’s board of trustees has determined that Mr. James N. Whitson, a member of its audit committee, is an audit committee financial expert. Mr. Whitson is “independent” as such term is defined in Form N-CSR. |
ITEM 4. | | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
| | (a) - - (d) Aggregate fees billed to the registrant for the last two fiscal years for professional services rendered by the registrant’s principal accountant were as follows: |
| | 2006 | | 2005 |
| Audit Fees | $20,080 | | $19,120 |
| Audit-Related Fees | - | | - |
| Tax Fees | 2,500 | | 2,350 |
| All Other Fees | - | | 1,931 |
| | Audit fees include amounts related to the audit of the registrant’s annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. Tax fees include amounts related to tax compliance, tax planning, and tax advice. Other fees include the registrant's pro-rata share of amounts for services related to the assessment of procedures for compliance with anti-money laundering regulations by the registrant and certain other associated investment companies. |
| | Aggregate fees billed by the registrant’s principal accountant for the last two fiscal years for non-audit services provided to the registrant’s investment adviser (not including a sub-adviser whose role is primarily portfolio management and is sub-contracted or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registered investment company, where the engagement relates directly to the operations and financial reporting of the registrant, were as follows: |
| | 2006 | | 2005 |
| Audit-Related Fees | $129,300 | | $120,630 |
| Tax Fees | 12,990 | | 13,903 |
| All Other Fees | - | | - |
| | Audit-related fees include amounts for (i) attestation services for the registrant’s shareholder service agent and (ii) performance of certain agreed-upon procedures relating to certain services performed by the registrant’s distributor. Tax fees include amounts related to tax compliance, tax planning, and tax advice for and an evaluation of certain tax reporting procedures of the registrant’s shareholder service agent. |
| | (e) (1) The Audit Committee is required to preapprove audit and non-audit services performed for the registrant by the principal accountant in order to assure that the provision of such services does not impair the principal accountant’s independence. The Audit Committee also is required to preapprove certain non-audit services performed by the registrant’s principal accountant for the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and certain of the adviser’s affiliates that provide services directly related to the operations and financial reporting of the registrant. Unless a type of service to be provided by the principal accountant has received preapproval, it will require specific preapproval by the Audit Committee. |
| | The Audit Committee may delegate preapproval authority to one or more of its members. The member or members to whom such authority is delegated shall report any preapproval decisions to the Audit Committee at its next scheduled meeting. |
| | Notwithstanding the foregoing, under certain circumstances, preapproval of non-audit services of a de minimis amount is not required. |
| | (2) No services included in (b) - (d) above were approved pursuant to the waiver provisions of paragraphs (c)(7)(i)(C) or (c)(7)(ii) of Rule 2-01 of Regulation S-X. |
(f) Not applicable.
| | (g) The aggregate fees billed for the most recent fiscal year and the preceding fiscal year by the registrant’s principal accountant for non-audit services rendered to the registrant, its investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant were $144,790 and $138,814, respectively. |
| | (h) All non-audit services rendered in (g) above were pre-approved by the registrant’s audit committee. Accordingly, the audit committee considered whether these services were compatible with maintaining the principal accountant’s independence. |
ITEM 5. | | AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. |
ITEM 6. | | SCHEDULE OF INVESTMENTS. |
| | Included in Item 1 above. |
ITEM 7. | | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
| ITEM 8. | | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
ITEM 9. | | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
ITEM 10. | | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
| | The Board of Trustees of the Registrant has a adopted a Nominating Committee Charter which provides that the Nominating Committee (the “Committee”) may consider and evaluate nominee candidates properly submitted by shareholders if a vacancy among the Independent Trustees of the Registrant occurs and if, based on the Board’s then current size, composition and structure, the Committee determines that the vacancy should be filled. The Committee will consider candidates submitted by shareholders on the same basis as it considers and evaluates candidates recommended by other sources. A copy of the qualifications and procedures that must be met or followed by shareholders to properly submit a nominee candidate to the Committee may be obtained by submitting a request in writing to the Secretary of the Registrant. |
ITEM 11. | | CONTROLS AND PROCEDURES. |
| | (a) The registrant's principal executive officer and principal financial officer have concluded, based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures provide reasonable assurance that material information required to be disclosed by the registrant in the report it files or submits on Form N-CSR is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and that such material information is accumulated and communicated to the registrant's management, including its principal executive officer and principal financial officer, as appropriate, in order to allow timely decisions regarding required disclosure. |
| | (b) The registrant’s principal executive officer and principal financial officer are aware of no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| | (a)(1) Code of Ethics for Principal Executive and Principal Financial Officers. |
| | (a)(2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. |
(a)(3) Not applicable.
| | (b) Certifications of chief executive officer and chief financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SELIGMAN PENNSYLVANIA MUNICIPAL FUND SERIES
By:
Brian T. Zino
President and Chief Executive Officer
Date: December 7, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By:
Brian T. Zino
President and Chief Executive Officer
Date: December 7, 2006
By:
Lawrence P. Vogel
Vice President, Treasurer and Chief Financial Officer
Date: December 7, 2006
SELIGMAN PENNSYLVANIA MUNICIPAL FUND SERIES
EXHIBIT INDEX
(a)(1) Code of Ethics for Principal Executive and Principal Financial Officers.
(a)(2) Certifications of principal executive officer and principal financial officer as
required by Rule 30a-2(a) under the Investment Company Act of 1940.
(b) Certification of chief executive officer and chief financial officer as required by
Rule 30a-2(b) of the Investment Company Act of 1940.
