UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-6239
Tax-Free Fund for Utah
(Exact name of Registrant as specified in charter)
380 Madison Avenue
New York, New York 10017
(Address of principal executive offices) (Zip code)
Joseph P. DiMaggio
380 Madison Avenue
New York, New York 10017
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 697-6666
Date of fiscal year end: 6/30
Date of reporting period: 12/31/03
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
[Logo of the Aquila Group of Funds: an eagle's head]
AQUILA(SM) SERVING UTAH INVESTORS
GROUP OF FUNDS FOR MORE THAN A DECADE
TAX-FREE FUND
FOR UTAH
380 MADISON AVENUE, SUITE 2300 * NEW YORK, NY 10017
800-437-1020 * 212-697-6666
[Logo of Tax-Free Fund for Utah: a rectangle containing desert boulders sun
rising behind them]
SEMI-ANNUAL REPORT
TAX-FREE FUND FOR UTAH
STATEMENT OF INVESTMENTS
DECEMBER 31, 2003
(UNAUDITED)
RATING
FACE MOODY'S/
AMOUNT GENERAL OBLIGATION BONDS (16.5%) S&P VALUE
- ---------- ------------------------------------------------------- --------- -----------
CITY, COUNTY AND STATE (7.2%)
-------------------------------------------------------
American Fork City, Utah
$ 610,000 5.00%, 12/01/14 FGIC Insured........................ Aaa/NR $ 654,988
645,000 5.00%, 12/01/15 FGIC Insured........................ Aaa/NR 691,762
Brian Head, Utah
405,000 6.50%, 03/15/24..................................... NR/NR* 461,194
Brigham City, Utah Tax Allocation
140,000 5.50%, 06/15/11 FSA Insured (pre-refunded).......... Aaa/AAA 153,300
Cedar City, Utah Special Improvement
District Assessment
235,000 5.05%, 09/01/10..................................... NR/NR* 242,050
215,000 5.20%, 09/01/11..................................... NR/NR* 222,256
Clearfield City, Utah
2,095,000 5.125%, 02/01/18 MBIA Insured....................... Aaa/AAA 2,212,844
Coral Canyon, Utah Special Service District
580,000 5.70%, 07/15/18..................................... NR/NR* 595,950
Hurricane, Utah
295,000 5.40%, 11/01/09 Radian Insured...................... NR/AA 332,244
North Davis County, Utah Sewer District
1,330,000 5.375%, 03/01/18 AMBAC Insured...................... Aaa/NR 1,467,988
150,000 5.125%, 03/01/22 AMBAC Insured...................... Aaa/NR 156,750
St. George, Utah
100,000 5.375%, 08/01/21 FGIC Insured....................... Aaa/AAA 107,500
Salt Lake City, Utah
120,000 5.75%, 06/15/17 (pre-refunded)...................... Aaa/NR 141,150
Washington County, Utah
1,000,000 5.00%, 10/01/22 MBIA Insured........................ Aaa/NR 1,038,750
-----------
8,478,726
-----------
SCHOOL DISTRICT (9.3%)
-------------------------------------------------------
Alpine, Utah School District
1,000,000 5.25%, 03/15/12..................................... Aaa/NR 1,112,500
375,000 5.00%, 03/15/12..................................... Aaa/NR 417,187
Davis County, Utah School District
575,000 5.00%, 06/01/15..................................... Aaa/NR 621,719
250,000 5.10%, 06/01/16..................................... Aaa/NR 272,500
675,000 5.15%, 06/01/17..................................... Aaa/NR 731,531
Nebo, Utah School District
$ 440,000 5.50%, 07/01/11..................................... Aaa/AAA $ 502,700
2,000,000 5.50%, 07/01/19..................................... Aaa/AAA 2,210,000
Rich County, Utah School District
120,000 5.50%, 12/15/09..................................... NR/NR* 126,750
100,000 5.60%, 12/15/10..................................... NR/NR* 104,500
Tooele County, Utah School District
1,375,000 5.25%, 06/01/17..................................... Aaa/AAA 1,510,781
Weber County, Utah School District
750,000 5.00%, 06/15/18..................................... Aaa/NR 793,125
825,000 5.00%, 06/15/20..................................... Aaa/NR 874,500
Weber County, Utah School District-Series B
1,485,000 5.000%, 06/15/21.................................... Aaa/NR 1,544,400
------------
10,822,193
------------
Total General Obligation Bonds...................... 19,300,919
------------
REVENUE BONDS (82.7%)
-------------------------------------------------------
EDUCATION (14.7%)
-------------------------------------------------------
Salt Lake County, Utah Westminster College Project
115,000 5.05%, 10/01/10..................................... NR/BBB 125,063
100,000 5.50%, 10/01/19..................................... NR/BBB 103,250
1,000,000 5.75%, 10/01/27..................................... NR/BBB 1,036,250
Southern Utah University Revenue
375,000 6.30%, 06/01/16..................................... NR/NR* 396,094
University of Utah Revenue Refunding, (Biology
Research Facilities),
200,000 5.50%, 04/01/11 MBIA Insured........................ Aaa/AAA 217,000
Utah State Board Regents Dixie State College
115,000 5.50%, 05/01/13 MBIA Insured........................ Aaa/AAA 131,531
120,000 5.50%, 05/01/14 MBIA Insured........................ Aaa/AAA 136,950
130,000 5.50%, 05/01/15 MBIA Insured........................ Aaa/AAA 148,363
400,000 5.10%, 05/01/21 MBIA Insured........................ Aaa/AAA 420,000
Utah State Board Regents Office Facility Revenue
450,000 5.05%, 02/01/20 MBIA Insured........................ Aaa/AAA 473,625
360,000 5.125%, 02/01/22 MBIA Insured....................... Aaa/AAA 376,200
Utah State Board Regents Salt Lake Community College
$1,035,000 5.50%, 06/01/14 FSA Insured......................... Aaa/AAA $ 1,173,431
1,260,000 5.50%, 06/01/16 FSA Insured......................... Aaa/AAA 1,415,925
Utah State Board Regents University Utah-Auxiliary &
Campus Revenue
895,000 5.25%, 04/01/12 MBIA Insured........................ Aaa/AAA 997,925
1,000,000 5.00%, 04/01/20 MBIA Insured........................ Aaa/AAA 1,042,500
Utah State Board Regents University Utah
Hospital Revenue
1,055,000 5.50%, 08/01/16 FSA Insured......................... Aaa/AAA 1,188,194
2,030,000 5.50%, 08/01/17 MBIA Insured........................ Aaa/AAA 2,278,675
905,000 5.00%, 05/01/19 AMBAC Insured....................... Aaa/AAA 960,431
3,595,000 5.00%, 08/01/19 MBIA Insured........................ Aaa/AAA 3,779,244
Weber State University, Utah Revenue Student
Facilities System Series A
300,000 5.10%, 04/01/16..................................... NR/AA 324,750
425,000 5.25%, 04/01/19..................................... NR/AA 458,469
------------
17,183,870
------------
HEALTHCARE (2.9%)
-------------------------------------------------------
Murray City, Utah Hospital Revenue
595,000 5.00%, 05/15/22 MBIA Insured........................ Aaa/AAA 610,619
Salt Lake County, Utah Hospital Revenue - IHC
Hospitals, Inc.
500,000 5.50%, 05/15/13 AMBAC Insured....................... Aaa/AAA 565,000
Utah County, Utah Hospital Revenue, IHC
Health Services
1,935,000 5.25%, 08/15/21 MBIA Insured........................ Aaa/AAA 2,034,169
Utah State Board Regents Revenue University Utah
Hospital Revenue
110,000 5.00%, 08/01/21 MBIA Insured........................ Aaa/AAA 114,400
------------
3,324,188
------------
HOUSING (5.5%)
-------------------------------------------------------
Provo City, Utah Housing Authority
500,000 5.80%, 07/20/22 GNMA Collateralized................. Aaa/NR 523,750
Utah Housing Corporation Single Family Housing
$ 70,000 5.25%, 07/01/23 AMT................................. Aa2/AA $ 71,487
Utah Housing Corporation Single Family Mortgage
515,000 5.150%, 07/01/23 AMT................................ Aaa/AAA 522,725
Utah State Housing Agency Housing Revenue
170,000 5.65%, 07/01/27 AMT................................. Aa2/AA 174,462
Utah State Housing Corporation Single Family
Housing Revenue
1,000,000 5.125%, 07/01/24 AMT................................ Aa3/AA- 1,011,250
Utah State Housing Finance Agency
10,000 5.00%, 07/01/09 Series F............................ Aaa/AAA 10,000
170,000 6.35%, 07/01/12 AMBAC Insured AMT................... Aaa/AAA 175,170
20,000 6.15%, 07/01/16 Senior Issue A-1.................... Aaa/AAA 20,825
205,000 5.30%, 07/01/18 AMT................................. Aaa/AAA 211,919
185,000 5.00%, 07/01/18 AMT................................. Aaa/AAA 189,394
770,000 5.40,%, 07/01/20 AMT................................ Aa2/AA 797,912
15,000 7.25%, 07/01/11 Series 1994C........................ Aaa/AA 15,389
60,000 6.60%, 07/01/11 Series E-1.......................... NR/AA 61,693
60,000 6.35%, 07/01/11 Mezzanine Series G-1................ AAA/NR 60,675
340,000 5.65%, 07/01/16 Series 1994C........................ Aaa/AAA 354,875
120,000 5.40%, 07/01/16 AMT................................. Aa2/AA 122,850
205,000 6.00%, 07/01/17 AMT................................. Aaa/AAA 213,200
970,000 5.50%, 07/01/18 AMT................................. Aa3/AA- 1,023,350
460,000 5.60%, 07/01/23 AMT................................. Aa2/AA 476,100
West Jordan, Utah Multi-Family Housing
360,000 6.80%, 01/01/15 FSA Insured......................... Aaa/AAA 368,107
------------
6,405,133
------------
INDUSTRIAL DEVELOPMENT & POLLUTION CONTROL (0.6%)
-------------------------------------------------------
Sandy City, Utah Industrial Development, H
Shirley Wright Project, Refunding Bonds, LOC
Olympus Bank
250,000 6.125%, 08/01/16.................................... NR/AAA 255,470
Utah County Environmental Improvement Revenue
435,000 5.05%, 11/01/17..................................... Baa1/BBB+ 471,431
------------
726,901
------------
LEASE (12.4%)
-------------------------------------------------------
Emery County, Utah Municipal Building Authority Lease
$ 840,000 5.125%, 03/01/23 Radian Insured..................... NR/AA $ 869,400
Lehi, Utah Municipal Building Lease Revenue,
Building Revenue
1,020,000 5.50%, 06/15/15 AMBAC Insured....................... Aaa/NR 1,150,050
Murray City, Utah Municipal Building Revenue
520,000 5.05%, 12/01/15 AMBAC Insured....................... Aaa/NR 566,150
Salt Lake County, Utah Municipal Building
Authority, Lease Revenue
400,000 5.00%, 10/01/11 MBIA Insured........................ Aaa/AAA 438,000
1,070,000 6.00%, 10/15/14..................................... Aa1/AA 1,098,013
320,000 5.40%, 10/15/19 AMBAC Insured....................... Aaa/AAA 354,000
3,900,000 5.20%, 10/15/20 AMBAC Insured....................... Aaa/AAA 4,148,625
Sandy City, Utah Municipal Building Authority
700,000 5.60%, 06/15/15 AMBAC Insured....................... Aaa/NR 799,750
Tooele City, Utah Municipal Building Lease Revenue
250,000 5.60%, 12/01/15 AMBAC Insured....................... Aaa/AAA 283,438
Utah County, Utah Municipal Building Authority,
Lease Revenue
120,000 5.50%, 11/01/16 AMBAC Insured....................... Aaa/NR 135,600
240,000 5.50%, 11/01/17 AMBAC Insured....................... Aaa/NR 269,400
Utah State Building Ownership Authority
1,350,000 5.25%, 05/15/20 FSA Insured......................... Aaa/AAA 1,437,750
Washington County - Saint George, Utah Interlocal
Agency Revenue
1,000,000 5.125%, 12/01/17 AMBAC Insured...................... NR/AAA 1,076,250
100,000 5.125%, 12/01/22 AMBAC Insured...................... NR/AAA 103,250
Weber County, Utah Municipal Building Lease Revenue
1,500,000 5.75%, 12/15/19 MBIA Insured........................ Aaa/AAA 1,683,750
------------
14,413,426
------------
TAX REVENUE (27.3%)
-------------------------------------------------------
Bluffdale, Utah Sales Tax Revenue
2,110,000 5.50%, 08/01/23..................................... NR/NR* 2,181,213
Bountiful, Utah Special Improvement District Special
Assessment Revenue
$ 203,000 5.00%, 06/01/14..................................... NR/NR* $ 198,179
213,000 5.15%, 06/01/15..................................... NR/NR* 208,208
224,000 5.30%, 06/01/16..................................... NR/NR* 219,520
236,000 5.50%, 06/01/17..................................... NR/NR* 233,050
249,000 5.65%, 06/01/18..................................... NR/NR* 247,133
Brian Head, Utah Special Service Improvement
District Revenue
455,000 5.35%, 11/01/12..................................... NR/NR* 468,650
Cache County, Utah Sales Tax Revenue
500,000 5.00%, 12/15/14 FGIC Insured........................ Aaa/AAA 550,000
670,000 5.00%, 12/15/16 FGIC Insured........................ Aaa/AAA 726,113
600,000 5.00%, 12/15/17 FGIC Insured........................ Aaa/AAA 645,750
510,000 5.00%, 12/15/18 FGIC Insured........................ Aaa/AAA 545,062
830,000 5.00%, 12/15/19 FGIC Insured........................ Aaa/AAA 878,763
Clearfield, Utah Sales Tax Revenue
590,000 5.00%, 07/01/18 FGIC Insured........................ Aaa/AAA 633,512
620,000 5.00%, 07/01/19 FGIC Insured........................ Aaa/AAA 658,750
650,000 5.00%, 07/01/20 FGIC Insured........................ Aaa/AAA 686,563
Coral Canyon, Utah Special Service District
110,000 5.00%, 07/15/13..................................... NR/NR* 112,062
250,000 5.50%, 07/15/18..................................... NR/NR* 254,375
Davis County, Utah Sales Tax Revenue
1,470,000 5.15%, 10/01/18 AMBAC Insured....................... NR/AAA 1,596,788
Jordanelle, Utah Special Service District
186,000 5.00%, 11/15/14..................................... NR/NR* 186,698
196,000 5.10%, 11/15/15..................................... NR/NR* 196,735
206,000 5.20%, 11/15/16..................................... NR/NR* 206,772
216,000 5.30%, 11/15/17..................................... NR/NR* 216,810
228,000 5.40%, 11/15/18..................................... NR/NR* 228,855
240,000 5.50%, 11/15/19..................................... NR/NR* 240,900
253,000 5.60%, 11/15/20..................................... NR/NR* 253,949
268,000 5.70%, 11/15/21..................................... NR/NR* 269,005
283,000 5.80%, 11/15/22..................................... NR/NR* 284,061
299,000 6.00%, 11/15/23..................................... NR/NR* 300,121
Jordanelle, Utah Special Service Improvement District
$ 400,000 8.00%, 10/01/11..................................... NR/NR* $ 420,500
Mountain Regional Water District, Utah Special
Assessment Revenue
2,000,000 7.00%, 12/01/18..................................... NR/NR* 1,982,500
Mountain Regional Water, Utah Special Service District
2,000,000 5.000%, 12/15/20 MBIA Insured....................... Aaa/AAA 2,115,000
Orem, Utah Special Assessment Revenue
96,000 5.00%, 08/01/15..................................... NR/NR* 95,400
101,000 5.15%, 08/01/16..................................... NR/NR* 100,748
106,000 5.30%, 08/01/17..................................... NR/NR* 105,992
112,000 5.50%, 08/01/18..................................... NR/NR* 111,999
118,000 5.65%, 08/01/19..................................... NR/NR* 118,002
Pleasant Grove City, Utah Sales Tax Revenue
410,000 5.25%, 12/01/17 MBIA Insured........................ Aaa/AAA 453,050
Salt Lake City, Utah Sales Tax Revenue
490,000 5.25%, 02/01/12..................................... NR/AAA 557,375
265,000 5.25%, 02/01/13..................................... NR/AAA 297,463
1,320,000 5.25%, 02/01/15..................................... NR/AAA 1,463,550
100,000 5.25%, 02/01/17..................................... NR/AAA 109,500
Salt Lake County, Utah Municipal Building Authority
100,000 5.40%, 10/01/19..................................... Aa1/AA+ 109,250
Sandy City, Utah Sales Tax Revenue
520,000 5.00%, 09/15/18 AMBAC Insured....................... NR/AAA 555,100
605,000 5.00%, 09/15/20 AMBAC Insured....................... NR/AAA 636,006
South Jordan, Utah Sales Tax
570,000 5.00%, 08/15/15 AMBAC Insured....................... Aaa/AAA 617,025
South Jordan, Utah Special Assignment
1,000,000 6.875%, 11/01/17.................................... NR/NR* 1,020,000
Utah Water Finance Agency Revenue
725,000 5.10%, 07/01/18 AMBAC Insured....................... Aaa/NR 778,469
510,000 5.00%, 07/01/18 AMBAC Insured....................... Aaa/NR 545,062
250,000 5.00%, 06/01/19 MBIA Insured........................ Aaa/AAA 263,750
685,000 5.00%, 07/01/19 AMBAC Insured....................... Aaa/NR 727,812
Wasatch County, Utah Building Authority
130,000 5.00%, 10/01/15..................................... A3/NR 136,825
135,000 5.00%, 10/01/16..................................... A3/NR 141,750
Wasatch County, Utah Sales Tax Revenue
$ 205,000 5.00%, 12/01/16 AMBAC Insured....................... Aaa/AAA $ 222,169
210,000 5.00%, 12/01/17 AMBAC Insured....................... Aaa/AAA 226,012
225,000 5.00%, 12/01/18 AMBAC Insured....................... Aaa/AAA 240,469
Washington City, Utah Sales Tax Revenue
680,000 5.25%, 11/15/17 AMBAC Insured....................... NR/AAA 750,550
West Valley City, Utah Sales Tax Revenue
800,000 5.50%, 07/15/17 MBIA Insured........................ Aaa/AAA 895,000
1,400,000 6.00%, 03/01/24..................................... NR/A- 1,485,750
Woodland Hills, Utah Special Assessment Revenue
94,000 5.50%, 08/01/09..................................... NR/NR* 95,645
224,000 5.50%, 08/01/10..................................... NR/NR* 228,480
236,000 5.50%, 08/01/11..................................... NR/NR* 241,310
249,000 5.50%, 08/01/12..................................... NR/NR* 253,980
263,000 5.50%, 08/01/13..................................... NR/NR* 267,602
------------
31,796,692
------------
TRANSPORTATION (2.1%)
-------------------------------------------------------
Salt Lake City, Utah Airport Revenue Series B
875,000 5.875%, 12/01/12 FGIC Insured....................... Aaa/AAA 893,217
370,000 5.875%, 12/01/18 FGIC Insured....................... Aaa/AAA 377,703
Utah Transit Authority Sales Tax & Transportation
Revenue
1,000,000 5.40%, 12/15/16 FSA Insured......................... NR/AAA 1,107,500
------------
2,378,420
------------
UTILITY (8.6%)
-------------------------------------------------------
Intermountain Power Agency Utilities Light & Power
Service, Utah
450,000 5.00%, 07/01/12 MBIA Insured........................ Aaa/AAA 457,443
1,470,000 5.25%, 07/01/15 MBIA Insured........................ Aaa/AAA 1,639,050
90,000 5.00%, 07/01/16..................................... A1/A+ 94,275
2,380,000 5.00%, 07/01/21..................................... A1/A+ 2,445,450
255,000 5.00%, 07/01/23..................................... A1/A+ 255,456
200,000 5.00%, 07/01/23 FSA Insured......................... Aaa/AAA 205,500
Manti City, Utah Electric System Revenue
603,000 5.75%, 02/01/17..................................... NR/NR* 612,045
Murray City, Utah Utility Electric Revenue
400,000 5.625%, 06/01/18 AMBAC Insured...................... Aaa/NR 444,500
Salem, Utah Electric Revenue
$ 125,000 5.30%, 11/01/07..................................... NR/NR* $ 135,156
130,000 5.35%, 11/01/08..................................... NR/NR* 142,350
140,000 5.40%, 11/01/09..................................... NR/NR* 154,175
Southern Utah Valley Power System Revenue
210,000 5.25%, 09/15/13 MBIA Insured........................ NR/AAA 237,563
225,000 5.25%, 09/15/14 MBIA Insured........................ NR/AAA 253,969
235,000 5.25%, 09/15/15 MBIA Insured........................ NR/AAA 263,200
185,000 5.125%, 09/15/21 MBIA Insured....................... NR/AAA 194,944
Springville, Utah Electric Revenue
550,000 5.60%, 03/01/09..................................... Baa1/NR 609,125
Utah Assessed Municipal Power System Revenue
790,000 5.25%, 12/01/09..................................... NR/A- 882,825
1,000,000 5.00%, 04/01/21 FSA Insured......................... Aaa/AAA 1,047,500
------------
10,074,526
------------
WATER AND SEWER (8.6%)
-------------------------------------------------------
Ashley Valley, Utah
310,000 9.50%, 01/01/08 AMBAC Insured....................... Aaa/AAA 350,300
Eagle Mountain, Utah Water and Sewer
750,000 5.80%, 11/15/16 ACA Insured......................... NR/A 827,812
Granger and Hunter, Utah Improvement District
Water & Sewer
250,000 5.00%, 03/01/18 FSA Insured......................... Aaa/NR 264,062
Murray City, Utah Sewer & Water Revenue
465,000 5.00%, 10/01/17 AMBAC Insured....................... Aaa/NR 501,619
390,000 5.00%, 10/01/18 AMBAC Insured....................... Aaa/NR 417,787
440,000 5.00%, 10/01/19 AMBAC Insured....................... Aaa/NR 468,050
Riverton, Utah Water Revenue
100,000 5.35%, 09/01/15 FGIC Insured........................ Aaa/NR 110,750
Salt Lake City, Utah Metropolitan Water Revenue
1,200,000 5.375%, 07/01/24 AMBAC Insured (pre-refunded)....... Aaa/AAA 1,375,500
125,000 5.375%, 07/01/29 AMBAC Insured (pre-refunded)....... Aaa/AAA 143,281
Salt Lake City, Utah Water And Sewer Revenue
500,000 5.75%, 02/01/13 AMBAC Insured....................... Aaa/AAA 522,180
Spanish Fork City, Utah Water Revenue
55,000 5.50%, 06/01/17 FSA Insured (pre-refunded).......... Aaa/NR 64,212
195,000 5.50%, 06/01/17 FSA Insured......................... Aaa/NR 218,400
Utah Water Finance Agency Revenue
$ 100,000 5.00%, 06/01/14 MBIA Insured........................ Aaa/AAA $ 107,625
910,000 5.50%, 10/01/14 AMBAC Insured....................... Aaa/AAA 1,030,575
200,000 5.25%, 07/01/16 AMBAC Insured....................... Aaa/NR 221,750
250,000 5.375%, 09/01/17 AMBAC Insured...................... Aaa/NR 279,063
310,000 5.00%, 10/01/17 AMBAC Insured....................... Aaa/NR 333,250
500,000 5.25%, 10/01/18 AMBAC Insured....................... Aaa/NR 552,500
285,000 5.30%, 10/01/23 MBIA Insured........................ Aaa/AAA 300,675
450,000 5.40%, 10/01/24 AMBAC Insured....................... Aaa/AAA 478,687
250,000 5.50%, 10/01/29 AMBAC Insured....................... Aaa/AAA 268,125
Weber-Box Elder, Utah Conservation District Water
Revenue
200,000 6.45%, 11/01/14 (pre-refunded)...................... Baa3/NR 243,000
200,000 6.50%, 11/01/19 (pre-refunded)...................... Baa3/NR 243,750
335,000 6.90%, 11/01/20 (pre-refunded)...................... Baa3/NR 416,237
White City, Utah Water Improvement
300,000 5.90%, 02/01/22 AMBAC Insured....................... Aaa/AAA 326,625
------------
10,065,815
------------
Total Revenue Bonds................................. 96,368,971
------------
Total Investments (cost $110,622,495**) 99.2% 115,669,890
Other assets less liabilities 0.8 965,976
----- ------------
Net Assets 100.0% $116,635,866
===== ============
* Any security not rated (NR) must be determined
by the Investment Adviser to have sufficient quality
to be ranked in the top four ratings if a credit
rating were to be assigned by a rating service.
** See note 4.
PORTFOLIO ABBREVIATIONS:
ACA - ACA Financial Guaranty Corp.
AMBAC - American Municipal Bond Assurance Corp.
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Co.
FSA - Financial Security Assurance
GNMA - Government National Mortgage Association
LOC - Letter of Credit
MBIA - Municipal Bond Investors Assurance
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003 (UNAUDITED)
ASSETS
Investments at value (cost $110,622,495) ................................................. $ 115,669,890
Interest receivable ...................................................................... 1,614,857
Receivable for investment securities sold ................................................ 475,000
Receivable for Fund shares sold .......................................................... 223,925
-------------
Total assets ............................................................................. 117,983,672
-------------
LIABILITIES
Cash overdraft ........................................................................... 280,332
Payable for Fund shares redeemed ......................................................... 846,785
Dividends payable ........................................................................ 113,413
Distribution fees payable ................................................................ 67,450
Management fees payable .................................................................. 2,943
Accrued expenses ......................................................................... 36,883
-------------
Total liabilities ........................................................................ 1,347,806
-------------
NET ASSETS .................................................................................. $ 116,635,866
=============
Net Assets consist of:
Capital Stock - Authorized an unlimited number of shares, par value $.01 per share ....... $ 114,290
Additional paid-in capital ............................................................... 114,648,470
Net unrealized appreciation on investments (note 4) ...................................... 5,047,395
Accumulated net realized loss on investments ............................................. (2,943,359)
-------------
Distributions in excess of net investment income ......................................... (230,930)
-------------
$ 116,635,866
=============
CLASS A
Net Assets ............................................................................... $ 95,857,928
=============
Capital shares outstanding ............................................................... 9,392,614
=============
Net asset value and redemption price per share ........................................... $ 10.21
=============
Offering price per share (100/96 of $10.21 adjusted to nearest cent) ..................... $ 10.64
=============
CLASS C
Net Assets ............................................................................... $ 19,768,274
=============
Capital shares outstanding ............................................................... 1,937,818
=============
Net asset value and offering price per share ............................................. $ 10.20
=============
Redemption price per share (*a charge of 1% is imposed on the redemption
proceeds of the shares, or on the original price, whichever is lower, if redeemed
during the first 12 months after purchase) ............................................ $ 10.20*
=============
CLASS Y
Net Assets ............................................................................... $ 1,009,664
=============
Capital shares outstanding ............................................................... 98,597
=============
Net asset value, offering and redemption price per share ................................. $ 10.24
=============
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2003 (UNAUDITED)
INVESTMENT INCOME:
Interest income ...................................... $ 2,562,147
Expenses:
Management fee (note 3) .............................. $ 273,489
Distribution and service fees (note 3) ............... 179,869
Transfer and shareholder servicing agent fees ........ 29,017
Fund accounting fee .................................. 23,992
Shareholders' reports and proxy statements ........... 18,537
Legal fees ........................................... 18,410
Trustees' fees and expenses (note 8) ................. 17,814
Auditing and tax fees ................................ 10,994
Custodian fees ....................................... 7,250
Registration fees and dues ........................... 3,373
Miscellaneous ........................................ 12,032
-----------
Total expenses ....................................... 594,777
Management fee waived (note 3) ....................... (264,272)
Expenses paid indirectly (note 6) .................... (4,483)
-----------
Net expenses ......................................... 326,022
-----------
Net investment income ................................ 2,236,125
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions (228,498)
Change in unrealized appreciation on investments ..... (520,997)
-----------
Net realized and unrealized gain (loss) on investments (749,495)
-----------
Net increase in net assets
resulting from operations ................................. $ 1,486,630
===========
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
DECEMBER 31, 2003 YEAR ENDED
(UNAUDITED) JUNE 30, 2003
----------------- -------------
OPERATIONS:
Net investment income ......................................... $ 2,236,125 $ 3,389,214
Net realized gain (loss) from securities transactions ......... (228,498) (44,103)
Change in unrealized appreciation on investments .............. (520,997) 3,818,783
------------- -------------
Change in net assets from operations ....................... 1,486,630 7,163,894
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 10):
Class A Shares:
Net investment income ......................................... (2,044,101) (3,169,522)
Class C Shares:
Net investment income ......................................... (330,446) (377,988)
Class Y Shares:
Net investment income ......................................... (21,684) (11,237)
------------- -------------
Change in net assets from distributions .................... (2,396,231) (3,558,747)
------------- -------------
CAPITAL SHARE TRANSACTIONS (NOTE 7):
Proceeds from shares sold ..................................... 23,796,997 41,782,674
Reinvested dividends and distributions ........................ 1,272,268 1,882,383
Cost of shares redeemed ....................................... (10,156,318) (7,318,351)
------------- -------------
Change in net assets from capital share transactions ....... 14,912,947 36,346,706
------------- -------------
Change in net assets ....................................... 14,003,346 39,951,853
NET ASSETS:
Beginning of period ........................................... 102,632,520 62,680,667
------------- -------------
End of period* ................................................ $ 116,635,866 $ 102,632,520
============= =============
* Includes distributions in excess of net investment income of: $ (230,930) $ (70,824)
============= =============
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION
Tax-Free Fund For Utah (the "Fund"), a non-diversified, open-end investment
company, was organized on December 12, 1990 as a Massachusetts business trust
and commenced operations on July 24, 1992. The Fund is authorized to issue an
unlimited number of shares and, since its inception to May 21, 1996, offered
only one class of shares. On that date, the Fund began offering two additional
classes of shares, Class C and Class Y shares. All shares outstanding prior to
that date were designated as Class A shares and are sold with a front-payment
sales charge and bear an annual distribution fee. Class C shares are sold with a
level-payment sales charge with no payment at time of purchase but level service
and distribution fees from date of purchase through a period of six years
thereafter. A contingent deferred sales charge of 1% is assessed to any Class C
shareholder who redeems shares of this Class within one year from the date of
purchase. Class C Shares, together with a pro-rata portion of all Class C Shares
acquired through reinvestment of dividends and other distributions paid in
additional Class C Shares, automatically convert to Class A Shares after 6
years. The Class Y shares are only offered to institutions acting for an
investor in a fiduciary, advisory, agency, custodian or similar capacity and are
not offered directly to retail investors. Class Y shares are sold at net asset
value without any sales charge, redemption fees, contingent deferred sales
charge or distribution or service fees. On October 31, 1997, the Fund
established Class I shares, which are offered and sold only through financial
intermediaries and are not offered directly to retail investors. As of the
report date, there were no Class I shares outstanding. All classes of shares,
represent interests in the same portfolio of investments and are identical as to
rights and privileges but differ with respect to the effect of sales charges,
the distribution and/or service fees borne by each class, expenses specific to
each class, voting rights on matters affecting a single class and the exchange
privileges of each class.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. The policies are in
conformity with accounting principles generally accepted in the United States of
America for investment companies.
a) PORTFOLIO VALUATION: Municipal securities which have remaining maturities
of more than 60 days are valued each business day based upon information
provided by a nationally prominent independent pricing service and
periodically verified through other pricing services; in the case of
securities for which market quotations are readily available, securities
are valued at the mean of bid and asked quotations and, in the case of
other securities, at fair value determined under procedures established by
and under the general supervision of the Board of Trustees. Securities
which mature in 60 days or less are valued at amortized cost if their term
to maturity at purchase is 60 days or less, or by amortizing their
unrealized appreciation or depreciation on the 61st day prior to maturity,
if their term to maturity at purchase exceeds 60 days.
b) SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME: Securities
transactions are recorded on the trade date. Realized gains and losses from
securities transactions are reported on the identified cost basis. Interest
income is recorded daily on the accrual basis and is adjusted for
amortization of premium and accretion of original issue and market
discount.
c) FEDERAL INCOME TAXES: It is the policy of the Fund to qualify as a
regulated investment company by complying with the provisions of the
Internal Revenue Code applicable to certain investment companies. The Fund
intends to make distributions of income and securities profits sufficient
to relieve it from all, or substantially all, Federal income and excise
taxes.
d) ALLOCATION OF EXPENSES: Expenses, other than class-specific expenses, are
allocated daily to each class of shares based on the relative net assets of
each class. Class-specific expenses, which include distribution and service
fees and any other items that are specifically attributed to a particular
class, are charged directly to such class.
e) USE OF ESTIMATES: The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of increases and decreases in net assets from operations
during the reporting period. Actual results could differ from those
estimates.
3. FEES AND RELATED PARTY TRANSACTIONS
a) MANAGEMENT ARRANGEMENTS:
Aquila Management Corporation (the "Manager"), the Fund's founder and
sponsor, serves as the Investment Adviser for the Fund under an Advisory and
Administration Agreement with the Fund. Refer to Note 11 for Subsequent Event
footnote. The Manager provides all investment management and administrative
services to the Fund. The Manager's services include providing the office of the
Fund and all related services as well as overseeing the activities of all the
various support organizations to the Fund such as the shareholder servicing
agent, custodian, legal counsel, fund accounting agent, auditors and
distributor. For its services, the Manager is entitled to receive a fee which is
payable monthly and computed as of the close of business each day at the annual
rate of 0.50 of 1% on the Fund's average net assets.
For the six months ended December 31, 2003, the Fund incurred management
fees of $273,489 of which $264,272 was voluntarily waived.
Specific details as to the nature and extent of the services provided by
the Manager are more fully defined in the Fund's Prospectus and Statement of
Additional Information.
b) DISTRIBUTION AND SERVICE FEES:
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 (the "Rule") under the Investment Company Act of 1940. Under one part of
the Plan, with respect to Class A Shares, the Fund is authorized to make
distribution fee payments to broker-dealers or others ("Qualified Recipients")
selected by Aquila Distributors, Inc. (the "Distributor") including, but not
limited to, any principal underwriter of the Fund, with which the Distributor
has entered into written agreements contemplated by the Rule and which have
rendered assistance in the distribution and/or retention of the Fund's shares or
servicing of shareholder accounts. The Fund makes payment of this service fee at
the annual rate of 0.20% of the Fund's average net assets represented by Class A
Shares. For the six months ended December 31, 2003 distribution fees on Class A
Shares amounted to $90,628, of which the Distributor retained $2,364.
Under another part of the Plan, the Fund is authorized to make payments
with respect to Class C Shares to Qualified Recipients which have rendered
assistance in the distribution and/or retention of the Fund's Class C shares or
servicing of shareholder accounts. These payments are made at the annual rate of
0.75% of the Fund's average net assets represented by Class C Shares and for the
six months ended December 31, 2003, amounted to $66,931. In addition, under a
Shareholder Services Plan, the Fund is authorized to make service fee payments
with respect to Class C Shares to Qualified Recipients for providing personal
services and/or maintenance of shareholder accounts. These payments are made at
the annual rate of 0.25% of the Fund's average net assets represented by Class C
Shares and for the six months ended December 31, 2003 amounted to $22,310. The
total of these payments with respect to Class C Shares amounted to $89,241, of
which the Distributor retained $11,944.
Specific details about the Plans are more fully defined in the Fund's
Prospectus and Statement of Additional Information.
Under a Distribution Agreement, the Distributor serves as the exclusive
distributor of the Fund's shares. Through agreements between the Distributor and
various broker-dealer firms ("dealers"), the Fund's shares are sold primarily
through the facilities of these dealers having offices within Utah, with the
bulk of sales commissions inuring to such dealers. For the six months ended
December 31, 2003, total commissions on sales of Class A Shares amounted to
$265,096, of which the Distributor received $22,711.
c) OTHER RELATED PARTY TRANSACTIONS:
For the six months ended December 31, 2003, the Fund incurred $17,823 of
legal fees allocable to Hollyer Brady Smith & Hines LLP counsel to the Fund for
legal services in conjunction with the Fund's ongoing operations. The Secretary
of the Fund is a Partner of Hollyer Brady Smith & Hines LLP.
4. PURCHASES AND SALES OF SECURITIES
During the six months ended December 31, 2003, purchases of securities and
proceeds from the sales of securities aggregated $23,343,075 and $6,082,002,
respectively.
At December 31, 2003, the aggregate tax cost for all securities was
$110,598,044. At December 31, 2003 the aggregate gross unrealized appreciation
for all securities in which there is an excess of market value over tax cost
amounted to $5,129,059 and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over market value amounted to
$57,213, for a net unrealized appreciation of $5,071,846.
5. PORTFOLIO ORIENTATION
Since the Fund invests principally and may invest entirely in double
tax-free municipal obligations of issuers within Utah, it is subject to possible
risks associated with economic, political, or legal developments or industrial
or regional matters specifically affecting Utah and whatever effects these may
have upon Utah issuers' ability to meet their obligations.
The Fund is also permitted to invest in tax-free municipal obligations of
issuers in other states and U.S. territories meeting comparable quality
standards and providing income which is exempt from both regular Federal and
Utah income taxes. The general policy of the Fund is to invest in such
securities only when comparable securities of Utah issuers are not available in
the market. At December 31, 2003, the Fund had 100% of its net assets invested
in State of Utah municipal issues.
6. EXPENSES
The Fund has negotiated an expense offset arrangement with its custodian
wherein it receives credit toward the reduction of custodian fees and other Fund
expenses whenever there are uninvested cash balances. The Statement of
Operations reflects the total expenses before any offset, the amount of offset
and the net expenses. It is the general intention of the Fund to invest, to the
extent practicable, some or all of cash balances in income-producing assets
rather than leave cash on deposit.
7. CAPITAL SHARE TRANSACTIONS
Transactions in Capital Shares of the Fund were as follows:
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2003 (UNAUDITED) JUNE 30, 2003
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ------------ ------------
CLASS A SHARES:
Proceeds from shares sold .... 1,856,908 $ 18,773,572 3,092,149 $ 31,209,525
Reinvested distributions ..... 105,946 1,067,430 165,136 1,665,186
Cost of shares redeemed ...... (849,276) (8,548,010) (657,050) (6,646,533)
------------ ------------ ------------ ------------
Net change ................ 1,113,578 11,292,992 2,600,235 26,228,178
------------ ------------ ------------ ------------
CLASS C SHARES:
Proceeds from shares sold .... 484,501 4,904,141 957,135 9,712,558
Reinvested distributions ..... 18,799 189,345 20,771 209,789
Cost of shares redeemed ...... (159,479) (1,607,313) (63,577) (645,935)
------------ ------------ ------------ ------------
Net change ................ 343,821 3,486,173 914,329 9,276,412
------------ ------------ ------------ ------------
CLASS Y SHARES:
Proceeds from shares sold .... 11,784 119,284 84,124 860,591
Reinvested distributions ..... 1,536 15,493 720 7,408
Cost of shares redeemed ...... (98) (995) (2,553) (25,883)
------------ ------------ ------------ ------------
Net change ................ 13,222 133,782 82,291 842,116
------------ ------------ ------------ ------------
Total transactions in Fund
shares ....................... 1,470,621 $ 14,912,947 3,596,855 $ 36,346,706
============ ============ ============ ============
8. TRUSTEES' FEES AND EXPENSES
During the previous fiscal year ended June 30, 2003 there were six
trustees, two of whom were affiliated with the Manager and are not paid any
trustee fees. Each Trustee's fees paid during the year were at the annual rate
of $3,500 for carrying out their responsibilities and attendance at regularly
scheduled Board Meetings. If additional or special meetings are scheduled for
the Fund, separate meeting fees are paid for each such meeting to those Trustees
in attendance. The Fund also reimburses Trustees for expenses such as travel,
accommodations, and meals incurred in connection with attendance at regularly
scheduled or special Board Meetings and at the Annual Meeting of Shareholders.
For the previous fiscal year ended June 30, 2003 such reimbursements averaged
approximately $1,407 per Trustee.
9. SECURITIES TRADED ON A WHEN-ISSUED BASIS
The Fund may purchase or sell securities on a when-issued basis.
When-issued transactions arise when securities are purchased or sold by the Fund
with payment and delivery taking place in the future in order to secure what is
considered to be an advantageous price and yield to the Fund at the time of
entering into the transaction. Beginning on the date the Fund enters into a
when-issued transaction, cash or other liquid securities are segregated in an
amount equal to or greater than the amount of the when-issued transaction. These
transactions are subject to market fluctuations and their current value is
determined in the same manner as for other securities.
10. DISTRIBUTIONS
The Fund declares dividends daily from net investment income and makes
payments monthly in additional shares at the net asset value per share, in cash,
or in a combination of both, at the shareholder's option. Net realized capital
gains, if any, are distributed annually and are taxable.
The Fund intends to maintain, to the maximum extent possible, the
tax-exempt status of interest payments received from portfolio municipal
securities in order to allow dividends paid to shareholders from net investment
income to be exempt from regular Federal and State of Utah income taxes.
However, due to differences between financial statement reporting and Federal
income tax reporting requirements, distributions made by the Fund may not be the
same as the Fund's net investment income, and/or net realized securities gains.
In this regard, the Fund credited distributions in excess of net investment
income in the amount of $138,826 and debited additional paid-in capital in the
amount of $138,826 at June 30, 2003. This adjustment had no impact on the Fund's
aggregate net assets at June 30, 2003. Further, a small portion of the dividends
may, under some circumstances, be subject to taxes at ordinary income and/or
capital gain rates.
At June 30, 2003, the Fund had a capital loss carryover of $2,686,182 of
which $211,315 expires on June 30, 2008, $2,459,398 expires on June 30, 2009,
and $15,469 expires on June 30, 2011. This carryover is available to offset
future net realized gains on securities transactions to the extent provided for
in the Internal Revenue Code. To the extent that this loss is used to offset
future realized capital gains, it is probable that the gains so offset will not
be distributed.
The tax character of distributions during the fiscal years ended June 30,
2003 and 2002 is as follows:
Distributions from
Year Ended June 30,
2003 2002
---------- ----------
Net tax-exempt income $3,419,849 $2,418,521
Ordinary income 138,898 75,927
---------- ----------
$3,558,747 $2,494,448
========== ==========
As of June 30, 2003, the components of distributable earnings on a tax
basis were as follows:
Accumulated net realized loss $(2,686,182)
Unrealized appreciation 5,590,204
-----------
$ 2,904,022
===========
11. SUBSEQUENT EVENT
Effective January 1, 2004, Aquila Management Corporation, founder of the
Fund, assigned its Advisory and Administration Agreement to its wholly-owned
subsidiary, Aquila Investment Management LLC, which will continue the management
of the Fund. The transfer was made for reasons of corporate and tax planning and
will have no effect on the management of the Fund or the fees being paid.
TAX-FREE FUND FOR UTAH
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Class A
----------------------------------------------------------------------
Six Months
Ended Year Ended June 30,
12/31/03 ------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
---------- ------ ------ ------ ------ ------
Net asset value, beginning of period ............. $10.31 $9.85 $9.65 $9.35 $9.88 $10.24
------ ------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment income + ....................... 0.21 0.44 0.46 0.48 0.48 0.49
Net gain (loss) on securities (both realized
and unrealized) ............................ (0.08) 0.48 0.22 0.32 (0.44) (0.36)
------ ------ ------ ------ ------ ------
Total from investment operations .............. 0.13 0.92 0.68 0.80 0.04 0.13
------ ------ ------ ------ ------ ------
Less distributions (note 10):
Dividends from net investment income .......... (0.23) (0.46) (0.48) (0.50) (0.51) (0.49)
Distributions from capital gains .............. - - - - (0.06) -
------ ------ ------ ------ ------ ------
Total distributions ........................... (0.23) (0.46) (0.48) (0.50) (0.57) (0.49)
------ ------ ------ ------ ------ ------
Net asset value, end of period ................... $10.21 $10.31 $9.85 $9.65 $9.35 $9.88
====== ====== ====== ====== ====== ======
Total return (not reflecting sales charge) ....... 1.30%* 9.55% 7.22% 8.72% 0.57% 1.19%
Ratios/supplemental data
Net assets, end of period (in thousands) ...... $95,858 $85,329 $55,957 $34,321 $34,171 $47,251
Ratio of expenses to average net assets ....... 0.48%** 0.43% 0.46% 0.48% 0.42% 0.45%
Ratio of net investment income to average
net assets ................................. 4.21%** 4.31% 4.65% 4.95% 5.06% 4.57%
Portfolio turnover rate ....................... 5.70%* 6.43% 27.42% 44.17% 48.99% 87.49%
The expense and net investment income ratios without the effect of the voluntary
waiver of a portion of the management fee and the voluntary expense
reimbursement were:
Ratio of expenses to average net assets ....... 0.95%** 1.02% 1.00% 1.11% 1.11% 1.04%
Ratio of net investment income to average
net assets ................................. 3.74%** 3.72% 4.11% 4.32% 4.37% 3.98%
The expense ratios after giving effect to the waiver, reimbursement and expense
offset for uninvested cash balances were:
Ratio of expenses to average net assets ....... 0.47%** 0.42% 0.40% 0.39% 0.39% 0.38%
- --------
Note: Effective July 16, 1998, Zions First National Bank became the Fund's
Investment Sub-Adviser replacing First Security Investment Management,
Inc. Effective August 1, 2001, Aquila Management Corporation became the
Fund's Investment Adviser replacing Zions First National Bank which was
the sub-adviser.
+ Per share amounts have been calculated using the monthly average shares
method.
* Not annualized
** Annualized
See accompanying notes to financial statements.
TAX-FREE FUND FOR UTAH
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Class C
----------------------------------------------------------------------
Six Months
Ended Year Ended June 30,
12/31/03 ------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
---------- ------ ------ ------ ------ ------
Net asset value, beginning of period ............. $10.30 $9.85 $9.64 $9.35 $9.87 $10.23
------ ------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment income + ....................... 0.17 0.34 0.37 0.38 0.38 0.38
Net gain (loss) on securities (both
realized and unrealized) ................... (0.08) 0.48 0.23 0.31 (0.42) (0.35)
------ ------ ------ ------ ------ ------
Total from investment operations ................. 0.09 0.82 0.60 0.69 (0.04) 0.03
------ ------ ------ ------ ------ ------
Less distributions (note 10):
Dividends from net investment income .......... (0.19) (0.37) (0.39) (0.40) (0.42) (0.39)
Distributions from capital gains .............. - - - - (0.06) -
------ ------ ------ ------ ------ ------
Total distributions ........................... (0.19) (0.37) (0.39) (0.40) (0.48) (0.39)
------ ------ ------ ------ ------ ------
Net asset value, end of period ................... $10.20 $10.30 $9.85 $9.64 $9.35 $9.87
====== ====== ====== ====== ====== ======
Total return (not reflecting sales charge) ....... 0.89%* 8.48% 6.36% 7.52% (0.33)% 0.18%
Ratios/supplemental data
Net assets, end of period (in thousands) ...... $19,768 $16,420 $6,694 $1,874 $1,036 $1,667
Ratio of expenses to average net assets ....... 1.27%** 1.31% 1.34% 1.47% 1.43% 1.45%
Ratio of net investment income to
average net assets ......................... 3.40%** 3.39% 3.72% 3.93% 4.07% 3.57%
Portfolio turnover rate ....................... 5.70%* 6.43% 27.42% 44.17% 48.99% 87.49%
The expense and net investment income ratios without the effect of the voluntary
waiver of a portion of the management fee and the voluntary expense
reimbursement were:
Ratio of expenses to average net assets ....... 1.75%** 1.81% 1.78% 1.89% 1.91% 1.85%
Ratio of net investment income to
average net assets ......................... 2.93%** 2.89% 3.28% 3.51% 3.58% 3.17%
The expense ratios after giving effect to the waiver, reimbursement and expense
offset for uninvested cash balances were:
Ratio of expenses to average net assets ....... 1.27%** 1.30% 1.28% 1.39% 1.39% 1.37%
Class Y
----------------------------------------------------------------------
Six Months
Ended Year Ended June 30,
12/31/03 ------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
---------- ------ ------ ------ ------ ------
Net asset value, beginning of period ............. $10.34 $9.89 $9.68 $9.36 $9.88 $10.24
------ ------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment income + ....................... 0.23 0.42 0.50 0.49 0.45 0.45
Net gain (loss) on securities (both
realized and unrealized) ................... (0.09) 0.50 0.20 0.34 (0.38) (0.32)
------ ------ ------ ------ ------ ------
Total from investment operations ................. 0.14 0.92 0.70 0.83 0.07 0.13
------ ------ ------ ------ ------ ------
Less distributions (note 10):
Dividends from net investment income .......... (0.24) (0.47) (0.49) (0.51) (0.53) (0.49)
Distributions from capital gains .............. - - - - (0.06) -
------ ------ ------ ------ ------ ------
Total distributions ........................... (0.24) (0.47) (0.49) (0.51) (0.59) (0.49)
------ ------ ------ ------ ------ ------
Net asset value, end of period ................... $10.24 $10.34 $9.89 $9.68 $9.36 $9.88
====== ====== ====== ====== ====== ======
Total return (not reflecting sales charge) ....... 1.41%* 9.55% 7.41% 9.05% 0.86% 1.19%
Ratios/supplemental data
Net assets, end of period (in thousands) ...... $1,010 $883 $30 $5 $0.1 $5
Ratio of expenses to average net assets ....... 0.28%** 0.30% 0.36% 0.42% 0.42% 0.43%
Ratio of net investment income to
average net assets ......................... 4.42%** 4.17% 4.75% 4.83% 4.88% 4.45%
Portfolio turnover rate ....................... 5.70%* 6.43% 27.42% 44.17% 48.99% 87.49%
The expense and net investment income ratios without the effect of the voluntary
waiver of a portion of the management fee and the voluntary expense
reimbursement were:
Ratio of expenses to average net assets ....... 0.75%** 0.78% 0.80% 0.64% 0.86% 0.96%
Ratio of net investment income to
average net assets ......................... 3.94%** 3.70% 4.31% 4.62% 4.43% 3.92%
The expense ratios after giving effect to the waiver, reimbursement and expense
offset for uninvested cash balances were:
Ratio of expenses to average net assets ....... 0.27%** 0.29% 0.30% 0.36% 0.39% 0.34%
- ----------------
Note: Effective July 16, 1998, Zions First National Bank became the Fund's
Investment Sub-Adviser replacing First Security Investment Management,
Inc. Effective August 1, 2001, Aquila Management Corporation became the
Fund's Investment Adviser replacing Zions First National Bank which was
the sub-adviser.
+ Per share amounts have been calculated using the monthly average shares
method.
* Not annualized
** Annualized
See accompanying notes to financial statements.
SHAREHOLDER MEETING RESULTS (UNAUDITED)
The Annual Meeting of Shareholders of Tax-Free Fund For Utah (the "Fund") was
held on September 26, 2003. The holders of shares representing approximately 76%
of the total net asset value of the shares entitled to vote were present in
person or by proxy. At the meeting, the following matters were voted upon and
approved by the shareholders (the resulting votes are presented below).
1. To elect Trustees.
Number of Votes:
TRUSTEE FOR WITHHELD
------- --- --------
Lacy B. Herrmann 7,584,343 27,293
Gary C. Cornia 7,592,510 19,126
William L. Ensign 7,592,510 19,126
Diana P. Herrmann 7,576,793 34,843
Lyle W. Hillyard 7,581,040 30,596
Anne J. Mills 7,582,907 28,729
2. To ratify the selection of KPMG LLP as the Fund's independent auditors.
Number of Votes:
FOR AGAINST ABSTAIN
--- ------- -------
7,510,954 60,346 40,336
INFORMATION AVAILABLE (UNAUDITED)
Much of the information that the funds in the Aquila(SM) Group of Funds
produce is automatically sent to you and all other shareholders. Specifically,
you are routinely sent the entire list of portfolio of securities of your fund
twice a year in the semi-annual and annual reports you receive. You should know,
however, that we prepare, and have available, portfolio listings at the end of
each quarter.
Whenever you may be interested in seeing a listing of your trust's
portfolio other than in your shareholder reports, please check our website
(www.aquilafunds.com) or call us at 1-800-437-1020.
FOUNDER
AQUILA MANAGEMENT CORPORATION
MANAGER
AQUILA investment MANAGEMENT LLC
380 Madison Avenue, Suite 2300
New York, New York 10017
BOARD OF TRUSTEES
Lacy B. Herrmann, Chairman
Gary C. Cornia
William L. Ensign
Diana P. Herrmann
Lyle W. Hillyard
Anne J. Mills
OFFICERS
Diana P. Herrmann, Vice Chair and President
Jerry G. McGrew, Senior Vice President
Kimball L. Young, Senior Vice President
and Co-Portfolio Manager
Thomas S. Albright, Vice President
and Co-Portfolio Manager
M. Kayleen Willis, Vice President
Joseph P. DiMaggio, Chief Financial Officer
and Treasurer
Edward M.W. Hines, Secretary
DISTRIBUTOR
AQUILA DISTRIBUTORS, INC.
380 Madison Avenue, Suite 2300
New York, New York 10017
CUSTODIAN
BANK ONE TRUST COMPANY, N.A.
1111 Polaris Parkway
Columbus, Ohio 43240
TRANSFER AND SHAREHOLDER SERVICING AGENT
PFPC INC.
760 Moore Road
King of Prussia, Pennsylvania 19406
INDEPENDENT AUDITORS
KPMG LLP
757 Third Avenue
New York, New York 10017
Further information is contained in the Prospectus, which must precede or
accompany this report.
SEMI-ANNUAL
REPORT
DECEMBER 31, 2003
[Logo of Tax-Free Fund for Utah: a rectangle containing desert boulders sun with
the rising behind them]
TAX-FREE FUND FOR
UTAH
A TAX-FREE INCOME INVESTMENT
[Logo of the Aquila Group of Funds: an eagle's head]
ONE OF THE
AQUILASM GROUP OF FUNDS
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
905: Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-2(c) under the Investment Company Act of
1940) as of a date within 90 days of the fling of this report, the registrant's
chief financial and executive officers have concluded that the disclosure
controls and procedures of the registrant are appropriately designed to ensure
that information required to be disclosed in the registrant's reports that are
filed under the Securities Exchange Act of 1934 are accumulated and communicated
to registrant's management, including its principal executive officer(s) and
principal financial officer(s), to allow timely decisions regarding required
disclosure and is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms adopted by the Securities and Exchange
Commission.
(b) There have been no significant changes in registrant's internal controls or
in other factors that could significantly affect registrant's internal controls
subsequent to the date of the most recent evaluation, including no significant
deficiencies or material weaknesses that required corrective action.
ITEM 10. EXHIBITS.
(a)(1) Not applicable.
(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) Certifications of principal executive officer and principal 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.
TAX-FREE FUND FOR UTAH
By: /s/ Lacy B. Herrmann
- ---------------------------------
Chairman of the Board
March 8, 2004
By: /s/ Diana P. Herrmann
- ---------------------------------
Vice Chair and President
March 8, 2004
By: /s/ Joseph P. DiMaggio
- -----------------------------------
Chief Financial Officer
March 8, 2004
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: /s/ Lacy B. Herrmann
- ---------------------------------
Lacy B. Herrmann
Chairman of the Board
March 8, 2004
By: /s/ Diana P. Herrmann
- ---------------------------------
Diana P. Herrmann
Vice Chair and President
March 8, 2004
By: /s/ Joseph P. DiMaggio
- -----------------------------------
Joseph P. DiMaggio
Chief Financial Officer
March 8, 2004
TAX-FREE FUND FOR UTAH
EXHIBIT INDEX
(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.