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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 811-2731
Tax-Free Investments Trust
(Exact name of registrant as specified in charter)
11 Greenway Plaza, Suite 100 Houston, Texas 77046
(Address of principal executive offices) (Zip code)
Robert H. Graham 11 Greenway Plaza, Suite 100 Houston, Texas 77046
(Name and address of agent for service)
Registrant's telephone number, including area code: (713) 626-1919
Date of fiscal year end: 3/31
Date of reporting period: 9/30/04
Item 1. Reports to Stockholders.
<Table>
TRUSTEES TAX-FREE
Bruce L. Crockett, Chair Robert H. Graham INVESTMENTS TRUST
Bob R. Baker Gerald J. Lewis (TFIT)
Frank S. Bayley Prema Mathai-Davis
James T. Bunch Lewis F. Pennock TAX-FREE
Albert R. Dowden Ruth H. Quigley CASH RESERVE
Edward K. Dunn, Jr. Louis S. Sklar PORTFOLIO
Jack M. Fields Larry Soll, Ph.D.
Carl Frischling Mark H. Williamson CASH
MANAGEMENT
OFFICERS CLASS
Robert H. Graham President
Mark H. Williamson Executive Vice President Semi-
Lisa O. Brinkley Sr. Vice President and Chief Compliance Officer Annual
Kevin M. Carome Senior Vice President, Secretary & Chief Legal Officer Report
Sidney M. Dilgren Vice President & Treasurer
Stuart W. Coco Vice President September 30, 2004
Karen Dunn Kelley Vice President
Edgar M. Larsen Vice President
INVESTMENT ADVISOR
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
DISTRIBUTOR
Fund Management Company
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
CUSTODIAN
The Bank of New York
2 Hanson Place
Brooklyn, NY 11217-1431
COUNSEL TO THE FUND
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
COUNSEL TO THE TRUSTEES
Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022-3852
TRANSFER AGENT
AIM Investment Services, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
A description of the policies and procedures that the fund uses to
determine how to vote proxies relating to portfolio securities is available
without charge, upon request, from our Client Services department at
800-959-4246 or on the AIM Web site, AIMinvestments.com. On the home page,
scroll down and click on AIM Funds Proxy Policy. The information is also
available on the Securities and Exchange Commission's Web site, sec.gov.
Information regarding how the fund voted proxies related to its portfolio
securities during the 12 months ended 6/30/04 is available at our Web site.
Go to AIMinvestments.com, access the About Us tab, click on Required
Notices and then click on Proxy Voting Activity. Next, select your fund
from the drop-down menu.
</Table>
YOUR GOALS. OUR SOLUTIONS. [AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark-- --Registered Trademark--
TFIT-SAR-3
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
This is the semiannual report on the performance of the Cash
[PHOTO OF Management Class of the Tax-Free Cash Reserve Portfolio of
ROBERT H. Tax-Free Investments Trust, a money market fund investing in
GRAHAM] short-term municipal bonds of the highest credit ratings. The
report is for the six-month period ended September 30, 2004.
ROBERT H. GRAHAM
Historically low interest rates resulted in low yields
for money market instruments.
The Federal Reserve (the Fed), which had left the federal
funds target rate at 1.00% since June 2003 (the
lowest rate since 1958), increased the rate by 0.25% (or 25
basis points) three times during the six-month reporting
period. With the latest increase on September 21, the rate
stood at 1.75%. The federal funds rate is the interest rate
at which depository institutions lend balances at the Fed to
other depository institutions overnight. The federal funds rate does not mandate
the rates offered on municipal bonds. However, the low-interest rate environment
resulting from the federal funds rate, as well as the overall economic climate
itself, affects all fixed-income investing.
Indications of sustained economic growth characterized the bond market
during the second quarter of 2004, according to The Bond Market Association's
Research Quarterly. The report noted that considering interest rate volatility
in 2004, bond markets in general have responded well to sustained economic
growth. However, municipal bond issuance declined in the quarter amid rising
rates and a flattening yield curve.
Economic activity continued to expand throughout the reporting period,
according to Beige Books published by the Fed. The nation's gross domestic
product, generally considered the broadest measure of economic activity, grew at
an annualized rate of 3.3% in the second quarter and 3.7% in the third quarter
of 2004. According to the Department of Labor, 1.05 million jobs were created
during the reporting period. However, a slowdown in job growth led to declining
consumer confidence in August and September, according to The Conference Board.
At the close of the fiscal year, the unemployment rate stood at 5.4%.
The September Beige Book reported that the economy continued to improve in
July and August, with 11 districts reporting increased activity levels during
the summer. All but one district reported an increase in manufacturing activity.
Labor markets remained slack across the nation, with few reports of occupational
shortages, while retail sales improved modestly in July and August, according to
the Beige Book report.
YOUR INVESTMENT PORTFOLIO
For the six-month period ended September 30, 2004, the seven-day SEC and monthly
yields for the Tax-Free Cash Reserve Portfolio's Cash Management Class were
1.19% and 1.07%, respectively. The seven-day SEC yield and monthly yield
represent annualized results for the period, net of fees and expenses, and
exclude any realized capital gains or losses. Yields will fluctuate. Had the
advisor and distributor not waived fees and/or reimbursed expenses,
==================================
PORTFOLIO COMPOSITION BY MATURITY
In days, as of 9/30/04
1-7 75.5%
8-14 2.6
15-60 7.7
61-120 6.7
121-180 1.8
181-240 0.7
241+ 5.0
The number of days to maturity of
each holding is determined in
accordance with the provisions of
Rule 2a-7 under the Investment
Company Act of 1940.
==================================
[AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark-- (continued)
The views and opinions performance would have been lower. Through a
expressed in this letter combination of short-term cash management vehicles
are those of A I M and selective use of a longer maturity schedule
Advisors, Inc. These for higher yields, the portfolio continued to
views and opinions are provide relatively attractive returns. The
subject to change at any weighted average maturity (WAM) remained in the
time based on factors 25- to 42-day range; at the close of the reporting
such as market and period, the WAM stood at 35 days. The portfolio
economic conditions. continued to maintain a relatively short maturity
These views and opinions structure to take advantage of any sudden rise in
may not be relied upon as market yields.
investment advice or
recommendations, or as an The portfolio continued to hold the highest
offer for a particular credit-quality ratings given by three widely known
security. Statements of credit rating agencies: AAAm from Standard &
fact are from sources Poor's, Aaa from Moody's and AAA from
considered reliable, but FitchRatings. Fund ratings are subject to change
A I M Advisors, Inc. and are based on several factors including an
makes no representation analysis of a portfolio's overall credit quality,
or warranty as to their market price exposure and management.
completeness or accuracy.
Although historical The Tax-Free Cash Reserve Portfolio seeks to
performance is no provide as high a level of tax-exempt income as is
guarantee of future consistent with preservation of capital and
results, these insights maintenance of liquidity by investing in
may help you understand high-quality, short-term municipal obligations.
our investment management The portfolio invests solely in securities that,
philosophy. at the time of investment, are "First Tier," as
defined in Rule 2a-7 under the Investment Company
Act of 1940.
THIS REPORT MUST BE
ACCOMPANIED OR PRECEDED IN CONCLUSION
BY A CURRENTLY EFFECTIVE
FUND PROSPECTUS, WHICH Despite raising the federal funds rate for the
CONTAINS MORE COMPLETE third time since June 24, as the reporting period
INFORMATION, INCLUDING ended, the Fed believed that monetary policy
SALES CHARGES AND remains accommodative. After the September rate
EXPENSES. READ IT increase, the Fed stated that it expects
CAREFULLY BEFORE YOU underlying inflation to be relatively low, but
INVEST. that it would "respond to changes in economic
prospects as needed to maintain price stability."
PERFORMANCE QUOTED IS We are pleased to send you this report on your
PAST PERFORMANCE AND investment. AIM is committed to the primary goals
CANNOT GUARANTEE of safety, liquidity and yield in institutional
COMPARABLE FUTURE fund management. We are also dedicated to customer
RESULTS; CURRENT service. Should you have comments or questions
PERFORMANCE MAY BE LOWER about this report, please contact one of our
OR HIGHER. VISIT representatives at 800-659-1005.
AIMINVESTMENTS.COM FOR
THE MOST RECENT MONTH-END Sincerely,
PERFORMANCE.
/S/ ROBERT H. GRAHAM
--------------------------------------
AN INVESTMENT IN THE FUND Robert H. Graham
IS NOT INSURED OR Chairman, A I M Management Group Inc.
GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE Beginning with fiscal periods ending after
CORPORATION OR ANY OTHER December 31, 2004, the fund files its complete
GOVERNMENT AGENCY. schedule of portfolio holdings with the Securities
ALTHOUGH THE FUND SEEKS and Exchange Commission ("SEC") for the first and
TO PRESERVE THE VALUE OF third quarters of each fiscal year on Form N-Q.
YOUR INVESTMENT AT $1.00 The fund's Form N-Q filings are available on the
PER SHARE, IT IS POSSIBLE SEC's website at http://www.sec.gov. Copies of the
TO LOSE MONEY BY fund's Forms N-Q may be reviewed and copied at the
INVESTING IN THE FUND. SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549-0102. You can obtain
information on the operation of the Public
Reference Room, including information about
duplicating fee charges, by calling 1-202-942-8090
or by electronic request at the following E-mail
address: publicinfo@sec.gov. The SEC file numbers
for the fund are 8112731 and 2-58286. The fund's
most recent portfolio holdings, as filed on Form
N-Q, are also available at www.aiminvestments.com.
2
INFORMATION ABOUT YOUR FUND'S EXPENSES
EXAMPLE
As a shareholder of the fund, you incur ongoing costs, including management
fees; distribution and/or service fees (12b-1); and other fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the fund and to compare these costs with ongoing costs of investing
in other mutual funds. The example is based on an investment of $1,000 invested
at the beginning of the period and held for the entire period, April 1, 2004 -
September 30, 2004.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use this information to compare the ongoing costs of investing in the fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
================================================================================
<Table>
<Caption>
HYPOTHETICAL
ACTUAL (5% ANNUAL RETURN
BEFORE EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING
(04/01/04) (09/30/04)(1) PERIOD(2) (09/30/04) PERIOD(2)
CASH
MANAGEMENT
CLASS $1,000.00 $1,004.20 $1.51 $1,023.56 $1.52
</Table>
(1) The actual ending account value is based on the actual total return of the
fund for the period April 1, 2004 to September 30, 2004 after actual expenses
and will differ from the hypothetical ending account value which is based on the
fund's expense ratio and a hypothetical annual return of 5% before expenses. The
actual cumulative return at net asset value for the period April 1, 2004 to
September 30, 2004 was 0.42% for Cash Management Class shares.
(2) Expenses are equal to the fund's annualized expense ratio (0.30% for Cash
Management Class shares) multiplied by the average account value over the
period, multiplied by 183/365 (to reflect the one-half year period).
================================================================================
3
SCHEDULE OF INVESTMENTS
September 30, 2004
(Unaudited)
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS-100.40%
ALABAMA-1.62%
Birmingham (City of) Public Parks &
Recreation Board
(Children's Zoo Project); VRD Series 2002
RB
(LOC-AmSouth Bank)
1.84%, 05/01/07(b(c) -- VMIG-1 $ 2,925 $ 2,925,000
- -------------------------------------------------------------------------------------------
Birmingham (City of) Public Parks &
Recreation Board
(YMCA Project); Refunding VRD Series 1996
RB
(LOC-AmSouth Bank)
1.84%, 06/01/16(b)(c) -- VMIG-1 1,990 1,990,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Birmingham
Waterworks & Sewer Board);
VRD Series 2002-6009 Class A COP
(Acquired 11/05/02; Cost $4,100,000)
1.75%, 01/01/43(c)(d)(e) A-1+ -- 4,100 4,100,000
- -------------------------------------------------------------------------------------------
VRD Series 2003-0007 Class A COP
(Acquired 04/16/03; Cost $7,370,000)
1.75%, 01/01/43(c)(d)(e) A-1+ -- 7,370 7,370,000
- -------------------------------------------------------------------------------------------
Homewood (City of) Medical Clinic Board
(Lakeshore Foundation Project); Lease
Revenue VRD Series 2000 RB
(LOC-AmSouth Bank)
1.84%, 11/01/24(b)(c) A-1 -- 6,046 6,046,000
- -------------------------------------------------------------------------------------------
Mobile (City of); Port City Medical Clinic
Board (Infirmary Health); VRD Series 1998 B
RB
1.71%, 02/01/25(c)(f) A-1 VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Montgomery (City of) Industrial Development
Board
(Industrial Partners Project); Refunding
VRD Series 1989 IDR
(LOC-SunTrust Bank)
1.73%, 01/01/07(b)(c) -- Aa2 635 635,000
- -------------------------------------------------------------------------------------------
Oxford (City of); Unlimited Tax VRD Series
2003 GO Wts.
(LOC-Branch Banking & Trust)
1.73%, 07/01/15(b)(c) -- VMIG-1 5,180 5,180,000
- -------------------------------------------------------------------------------------------
Ridge (City of) Improvement District; Special
Assessment VRD Series 2000 RB (LOC-AmSouth
Bank)
1.73%, 10/01/25(b)(c) -- VMIG-1 13,335 13,335,000
- -------------------------------------------------------------------------------------------
Tuscaloosa (City of) Educational Building
Authority (Stillman College Project);
Refunding Capital Improvement VRD Series
2002 A RB (LOC-AmSouth Bank)
1.84%, 10/01/23(b)(c) -- VMIG-1 500 500,000
===========================================================================================
47,081,000
===========================================================================================
</Table>
F-1
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ALASKA-0.13%
Alaska (State of) Industrial Development &
Export Authority
(Safeway Inc. Projects); Refunding VRD
Series 1991 IDR
(LOC-Deutsche Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1 -- $ 1,895 $ 1,895,000
- -------------------------------------------------------------------------------------------
Alaska (State of) Industrial Development
Authority
(Alaska Hotel Properties Inc. Project); VRD
Series 1986 IDR
(LOC-Royal Bank of Scotland)
(Acquired 12/17/02; Cost $800,000)
1.70%, 06/01/06(b)(c)(d) -- Aa1 800 800,000
- -------------------------------------------------------------------------------------------
Matanuska-Susitna (Borough of); Unlimited Tax
Series 1998 A GO
4.50%, 03/01/05(f) AAA Aaa 1,000 1,012,718
===========================================================================================
3,707,718
===========================================================================================
ARIZONA-1.43%
Apache (County of) Industrial Development
Authority
(Tucson Electric Power Co.); Floating Rate
Series 1982 A IDR
(LOC-Credit Suisse First Boston)
1.75%, 12/15/18(b)(c) A-1 VMIG-1 6,625 6,625,000
- -------------------------------------------------------------------------------------------
Casa Grande (City of) Industrial Development
Authority (Center Park Apartments Project);
Refunding Multi-Family Housing VRD Series
2001 A IDR (CEP-Federal National Mortgage
Association)
1.72%, 06/15/31(c) -- VMIG-1 2,010 2,010,000
- -------------------------------------------------------------------------------------------
Casa Grande (City of) Industrial Development
Authority (Quail Gardens Apartments);
Refunding Multi-Family Housing VRD Series
2001 A IDR (CEP-Federal National Mortgage
Association)
1.72%, 06/15/31(c) -- VMIG-1 1,550 1,550,000
- -------------------------------------------------------------------------------------------
Phoenix (City of) Civic Improvement Corp.;
Wastewater System Series 2003 BAN
1.22%, 11/12/04 A-1+ P-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
1.23%, 12/16/04 A-1+ P-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
1.27%, 01/10/05 A-1+ P-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Phoenix (City of) Industrial Development
Authority
(Lynwood Apartments Project); Refunding VRD
Series 1994 IDR
(CEP-Federal Home Loan Bank)
1.75%, 10/01/25(c) A-1+ -- 6,020 6,020,000
- -------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Tucson Electric Power
Co.-Irvington Road Project); VRD Series
1982 IDR (LOC-Credit Suisse First Boston)
1.68%, 10/01/22(b)(c) A-1 VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
University of Arizona (University of Arizona
Projects);
VRD Series 2004 B COP
1.64%, 06/01/31(c)(f) A-1+ VMIG-1 2,550 2,550,000
===========================================================================================
41,755,000
===========================================================================================
</Table>
F-2
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ARKANSAS-0.09%
Pulaski (County of) Public Facilities Board
(Health Facilities-Central Arkansas
Radiation Therapy Inc. Project);
Educational Facilities VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.75%, 07/01/08(b)(c)(i) -- -- $ 2,500 $ 2,500,000
===========================================================================================
CALIFORNIA-0.05%
San Diego (County of) (Friends of Chabad
Lubavitch);
VRD Series 2003 COP (LOC-Comerica Bank)
1.78%, 01/01/23(b)(c)(i) -- -- 1,500 1,500,000
===========================================================================================
COLORADO-2.39%
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Art Museum
Project); VRD Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 01/01/33(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Seminary
Project); VRD Series 2004 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 07/01/24(b)(c) A-1+ -- 1,200 1,200,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (National Cable
Television Center & Museum Project);
VRD Series 1999 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 10/01/06(b)(c) A-1+ -- 1,505 1,505,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority
(Regis Jesuit High School Project); VRD
Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 12/01/33(b)(c) A-1+ -- 5,015 5,015,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Arapahoe House Project); VRD Series 2004 A
RB
(LOC-Wells Fargo Bank N.A.)
1.76%, 04/01/24(b)(c) A-1+ -- 1,200 1,200,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Christian Living Project); Refunding VRD
Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.74%, 01/01/31(b)(c) A-1+ -- 3,400 3,400,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Craig Hospital Project); Refunding VRD
Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 12/01/20(b)(c) A-1+ -- 5,605 5,605,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Golden West Manor Inc. Project); VRD
Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.74%, 07/01/32(b)(c) A-1+ -- 4,210 4,210,000
- -------------------------------------------------------------------------------------------
Colorado Springs (City of) (Pikes Peak Mental
Health);
VRD Series 2003 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 03/15/23(b)(c) A-1+ -- 3,570 3,570,000
- -------------------------------------------------------------------------------------------
</Table>
F-3
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
COLORADO-(CONTINUED)
Denver (City & County of) (Kentucky Circle
Village Project); VRD Series 2000 RB
(LOC-Mountain States Bank, U.S. Bank N.A.)
1.74%, 10/01/29(b)(c) A-1+ -- $ 1,740 $ 1,740,000
- -------------------------------------------------------------------------------------------
Idaho Springs (City of); (Safeway Inc.
Project);
Refunding VRD Series 1993 IDR (LOC-Deutsche
Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1+ -- 940 940,000
- -------------------------------------------------------------------------------------------
Jefferson (County of) School District No.
R-001; Series 2004 A TAN
3.00%, 06/30/05 SP-1+ MIG-1 30,000 30,332,309
- -------------------------------------------------------------------------------------------
Lafayette (City of) Exempla Improvement
District
(Special Improvement No. 2-01);
Refunding Special Assessment VRD Series
2002 RB
(LOC-Wells Fargo Bank N.A.)
1.72%, 12/01/22(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (City & County of
Denver Water);
VRD Series 2003 PT-1872 RB
(Acquired 05/29/03; Cost $7,830,000)
1.73%, 12/01/22(c)(d)(e)(i) -- -- 7,830 7,830,000
- -------------------------------------------------------------------------------------------
Regional Transportation (District of);
Refunding Sales Tax Series 2003 A RB
3.00%, 11/01/04(f) AAA Aaa 1,000 1,001,613
===========================================================================================
69,548,922
===========================================================================================
CONNECTICUT-0.09%
Connecticut (State of) Development Authority
(Central Vermont Public Service); Floating
Rate Series 1985 PCR
(LOC-Royal Bank of Scotland)
1.35%, 12/01/15(b)(j) A-1+ -- 1,400 1,400,000
- -------------------------------------------------------------------------------------------
Connecticut (State of) Development Authority
(Connecticut Water Co. Project); Refunding
Water Facilities VRD Series 2004 B RB
(LOC-Royal Bank of Scotland)
1.70%, 09/01/28(b)(c) A-1+ -- 1,125 1,125,000
===========================================================================================
2,525,000
===========================================================================================
DELAWARE-0.28%
Delaware (State of) Economic Development
Authority
(Independent School Inc. Project); VRD
Series 2003 RB
(LOC-Royal Bank of Scotland)
1.69%, 07/01/33(b)(c) A-1+ -- 8,250 8,250,000
===========================================================================================
DISTRICT OF COLUMBIA-0.89%
District of Columbia (Consortium Issue); VRD
Series 1998 RB
(LOC-Wachovia Bank N.A.)
1.69%, 07/01/23(b)(c) A-1 -- 15,755 15,755,000
- -------------------------------------------------------------------------------------------
District of Columbia (National Children's
Center Inc.);
VRD Series 1993 RB (LOC-Bank of America
N.A.)
1.70%, 02/01/20(b)(c) A-1+ -- 3,385 3,385,000
- -------------------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA-(CONTINUED)
District of Columbia (Resources for the
Future Inc.);
VRD Series 1998 RB (LOC-Wachovia Bank N.A.)
(Acquired 09/26/03; Cost $2,015,000)
1.75%, 08/01/29(b)(c)(d) A-1 -- $ 2,015 $ 2,015,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (District of Columbia
Water & Sewer Authority); VRD Series 2003
A12 RB
(Acquired 02/24/03; Cost $4,655,000)
1.74%, 10/01/17(c)(d)(e) -- VMIG-1 4,655 4,655,000
===========================================================================================
25,810,000
===========================================================================================
FLORIDA-3.88%
ABN AMRO Munitops Ctfs. Trust (County of
Escambia);
Refunding Florida Non-AMT VRD Series
2002-24 Ctfs.
(Acquired 10/24/02; Cost $5,000,000)
1.73%, 10/01/10(c)(d)(e) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Capital Projects Finance Authority (Capital
Projects Loan Program); VRD Series 1997 A
RB
1.74%, 08/01/17(c)(f) A-1+ -- 1,050 1,050,000
- -------------------------------------------------------------------------------------------
Clay (County of) Housing Finance Authority
(Bluff Housing); Refunding Multi-Family
Housing VRD Series 2001 A RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 11/01/14(c) A-1+ -- 1,150 1,150,000
- -------------------------------------------------------------------------------------------
Collier (County of) Health Facilities
Authority
(Cleveland Clinic Health); VRD Hospital
Series 2003 C-2 BAN
(LOC-JPMorgan Chase Bank)
1.55%, 11/22/04(c) A-1+ VMIG-1 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Collier (County of) Industrial Development
Authority
(Redlands Christian Migrant); VRD Series
2001 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/26(b)(c)(i) -- -- 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Duval (County of) Housing Finance Authority
(Sunbeam Road Apartments Project);
Refunding Multi-Family Housing VRD Series
1997 RB
(LOC-Bank of America N.A.)
1.70%, 07/01/25(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Jacksonville (City of) Health Facilities
Authority (Baptist Medical Center Project);
VRD Hospital Series 2003 B RB
(LOC-Bank of America N.A.)
0.98%, 12/22/04(b)(g)(k) A-1+ -- 19,000 19,000,000
- -------------------------------------------------------------------------------------------
Jacksonville (City of) Health Facilities
Authority
(Samuel C. Taylor Foundation Project); VRD
Series 1998 RB (LOC-Bank of America N.A.)
(Acquired 02/20/01; Cost $2,800,000)
1.75%, 12/01/23(b)(c)(d)(i) -- -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
</Table>
F-5
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
Jacksonville (City of) Health Facilities
Authority (University of Florida
Jacksonville Physicians, Inc.); VRD Series
2002 RB
(LOC-Bank of America N.A.)
1.73%, 06/01/22(b)(c) -- VMIG-1 $12,140 $ 12,140,000
- -------------------------------------------------------------------------------------------
Lakeland (City of) Electric & Water;
Refunding Series 1992 RB
5.63%, 10/01/04(l) NRR -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Marion (County of) Hospital District (Munroe
Regional Health System); Health System
Improvement VRD Series 2000 RB
(LOC-AmSouth Bank)
1.72%, 10/01/30(b)(c) -- VMIG-1 13,375 13,375,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (State of Florida
Mid-Bay Bridge Authority); VRD Series 2002
PT-1531 RB
(Acquired 10/10/02; Cost $9,100,000)
1.72%, 10/01/18(c)(d)(e) A-1+ -- 9,100 9,100,000
- -------------------------------------------------------------------------------------------
Miami-Dade (County of) Educational Facilities
Authority
(Carlos Albizu University Project); VRD
Series 2000 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/25(b)(c)(i) -- -- 9,400 9,400,000
- -------------------------------------------------------------------------------------------
Miami-Dade (County of) Industrial Development
Authority
(Palmer Trinity Private School Project);
VRD Series 1999 IDR
(LOC-Bank of America N.A.)
1.75%, 12/01/19(b)(c)(i) -- -- 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Florida Department of
Environmental Protection); Floating Rate
Trust Ctfs. VRD Series 2002-722 RB
(Acquired 11/13/02; Cost $9,850,000)
1.73%, 07/01/22(c)(d)(e) A-1 -- 9,850 9,850,000
- -------------------------------------------------------------------------------------------
North Miami (City of) Educational Facilities
(Miami Country Day School Project); VRD
Series 1999 RB
(LOC-Bank of America N.A.)
1.75%, 08/01/19(b)(c)(i) -- -- 1,550 1,550,000
- -------------------------------------------------------------------------------------------
Orange (County of) Health Facilities
Authority
(Adventist Health System); VRD Series 1992
RB
(LOC-SunTrust Bank)
1.70%, 11/15/14(b)(c) A-1+ VMIG-1 1,155 1,155,000
- -------------------------------------------------------------------------------------------
Orange (County of) Health Facilities
Authority (Presbyterian Retirement
Communities Project); VRD Series 1998 RB
(LOC-Bank of America N.A.)
(Acquired 01/29/02-09/01/04; Cost
$5,129,000)
1.75%, 11/01/28(b)(c)(d)(i) -- -- 5,129 5,129,000
- -------------------------------------------------------------------------------------------
Palm Beach (County of) Educational Facilities
Authority (Atlantic College Project);
Educational Facilities VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/31(b)(c)(i) -- -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
Pasco (County of); Refunding Water & Sewer
Series 2002 RB
5.00%, 10/01/04(f) AAA Aaa 1,000 1,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-6
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
Tampa (City of) (Agency for Community
Treatment DACCO Project); VRD Series 2001
RB (LOC-Bank of America N.A.)
1.75%, 07/01/22(b)(c)(i) -- -- $ 5,080 $ 5,080,000
- -------------------------------------------------------------------------------------------
University of North Florida Foundation, Inc.
(Parking System);
VRD Series 1998 RB (LOC-Wachovia Bank N.A.)
1.73%, 05/01/28(b)(c) A-1 -- 800 800,000
===========================================================================================
113,079,000
===========================================================================================
GEORGIA-5.07%
Athens-Clarke (County of) Unified Government
Development Authority (University of
Georgia Athletic Association Project);
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.76%, 08/01/33(b)(i)(m) -- -- 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Clayton (County of) Development Authority
(Delta Airlines Project); Special
Facilities VRD Series 2000 A RB
(CEP-General Electric Capital Corp.)
1.71%, 06/01/29(c) A-1+ VMIG-1 7,500 7,500,000
- -------------------------------------------------------------------------------------------
Cobb (County of) Housing Authority (Tamarron
Apartments Project); Refunding Multi-Family
Housing VRD Series 2003 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 03/01/24(c) A-1+ -- 5,050 5,050,000
- -------------------------------------------------------------------------------------------
Cobb (County of) School District; Limited Tax
Series 2004 GO
1.75%, 12/31/04 -- MIG-1 20,000 20,038,500
- -------------------------------------------------------------------------------------------
DeKalb (County of) Hospital Authority
(DeKalb Medical Center Inc. Project); VRD
Series 2000 B RB
(LOC-Wachovia Bank N.A.)
1.69%, 10/01/25(b)(c) -- VMIG-1 10,925 10,925,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Georgia);
VRD Series 2000-1001 C COP (Acquired
07/26/00; Cost $20,000,000)
1.75%, 07/01/15(c)(d)(e) A-1+ -- 20,000 20,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Dalton); Utilities VRD
Series 2003 A02 RB
(Acquired 08/25/04; Cost $4,895,000)
1.74%, 01/01/12(c)(d)(e) -- VMIG-1 4,895 4,895,000
- -------------------------------------------------------------------------------------------
Fulton (County of) Development Authority
(Bridgeway Foundation for Education
Project); Educational Facilities VRD Series
2000 RB
(LOC-Wachovia Bank N.A.)
1.74%, 06/01/15(b)(c) A-1 -- 1,400 1,400,000
- -------------------------------------------------------------------------------------------
Fulton (County of) Hospital Authority
(Northside Hospital Inc.);
VRD Series 2003 A RAN (LOC-Wachovia Bank
N.A.)
1.69%, 10/01/18(b)(c) -- VMIG-1 28,860 28,860,000
- -------------------------------------------------------------------------------------------
Georgia (State of); Unlimited Tax Series 1999
D GO
5.80%, 11/01/04 AAA Aaa 1,400 1,405,461
- -------------------------------------------------------------------------------------------
Gwinnett (County of) School District; Limited
Construction Sales Tax Notes Series 2004 GO
1.75%, 12/30/04 -- MIG-1 15,000 15,025,977
- -------------------------------------------------------------------------------------------
</Table>
F-7
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
GEORGIA-(CONTINUED)
Houston (County of) Hospital Authority; VRD
Series 2002 RB
(LOC-Wachovia Bank N.A.)
1.69%, 10/01/14(b)(c) A-1 -- $ 9,230 $ 9,230,000
- -------------------------------------------------------------------------------------------
Private Colleges & Universities Authority
(Mercer University Project); VRD Series
2003 RB (LOC-Branch Banking & Trust)
1.82%, 10/01/32(b)(c) -- VMIG-1 7,260 7,260,000
- -------------------------------------------------------------------------------------------
Roswell (City of) Housing Authority (Rosemont
Apartments Project); Refunding Multi-Family
Housing VRD Series 2003 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 01/01/34(c) A-1+ -- 10,555 10,555,000
- -------------------------------------------------------------------------------------------
Smyrna (City of) Hospital Authority
(Ridgeview Institute Inc. Project); VRD
Series 2002 RB (LOC-Wachovia Bank N.A.)
1.74%, 11/01/27(b)(c) -- VMIG-1 2,210 2,210,000
===========================================================================================
147,854,938
===========================================================================================
HAWAII-0.37%
Eagle Tax Exempt Trust (State of Hawaii); VRD
Series 2000-1101 COP (Acquired 01/11/01;
Cost $6,000,000)
1.75%, 12/01/16(c)(d)(e) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Hawaii);
Unlimited Tax VRD Series 2003 A16 GO
(Acquired 02/27/03; Cost $3,885,000)
1.74%, 07/01/18(c)(d)(e) -- VMIG-1 3,885 3,885,000
- -------------------------------------------------------------------------------------------
Hawaii (State of); Refunding Unlimited Tax
Series 1997 CO GO
6.00%, 03/01/05(f) AAA Aaa 1,000 1,020,421
===========================================================================================
10,905,421
===========================================================================================
IDAHO-0.47%
Custer (County of) Pollution Control (Amoco
Oil Co.-Standard Oil Industry Project); VRD
Series 1983 RB
0.90%, 04/01/05(g)(h) A-1+ Aa1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Magic Valley Healthcare System Inc.
(Magic Valley Regional Medical Center
Project);
VRD Series 2001 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 12/01/21(b)(c) -- VMIG-1 3,640 3,640,000
===========================================================================================
13,640,000
===========================================================================================
ILLINOIS-14.26%
ABN AMRO Munitops Ctfs. Trust (City of
Chicago); Refunding
Multi-State Non-AMT VRD Limited Tax Series
2001-34 Ctfs. (Acquired 11/15/01; Cost
$10,000,000)
1.75%, 07/01/07(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Bear Stearns Municipal Securities Trust Ctfs.
(State of Illinois Sales Tax); VRD Series
1998-25 Class A RB
(Acquired 08/26/99; Cost $10,000,000)
1.75%, 03/15/07(c)(d)(e) A-1 Aa2 10,000 10,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-8
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Bear Stearns Municipal Securities Trust Ctfs.
(State of Illinois);
VRD Series 2002-190 Class A RB
(Acquired 05/06/02; Cost $10,130,000)
1.75%, 06/05/14(c)(d)(e) A-1 -- $10,130 $ 10,130,000
- -------------------------------------------------------------------------------------------
Chicago (City of); VRD Limited Tax Obligation
Tender Series 2004 GO (LOC-State Street
Bank & Trust Co.)
1.05%, 01/13/05(b)(g)(k) SP-1+ MIG-1 4,000 4,000,000
- -------------------------------------------------------------------------------------------
Chicago (City of); VRD Unlimited Tax Series
2002 B GO
1.70%, 01/01/37(c)(f) A-1+ VMIG-1 8,400 8,400,000
- -------------------------------------------------------------------------------------------
Crestwood (City of) (Trinity Christian
College);
VRD Series 2003 RB (LOC-Fifth Third Bank)
1.51%, 09/01/28(b)(c) A-1+ -- 3,775 3,775,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago Water
& Sewer); VRD Series 2001-1308 COP
(Acquired 12/12/01; Cost $8,655,000)
1.75%, 11/01/26(c)(d)(e) A-1+ -- 8,655 8,655,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago); VRD
Series 2001-1305 COP (Acquired 04/02/01;
Cost $4,950,000)
1.84%, 01/01/35(c)(d)(e) A-1+ -- 4,950 4,950,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (County of Cook
Regional Transportation Authority); VRD
Series 2000-1303 COP
(Acquired 03/26/01; Cost $19,000,000)
1.75%, 07/01/23(c)(d)(e) A-1+ -- 19,000 19,000,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Illinois);
VRD Unlimited Tax Series 2003-0023 Class A
COP
(Acquired 06/12/03; Cost $3,775,000)
1.75%, 06/01/15(c)(d)(e) A-1+ -- 3,775 3,775,000
- -------------------------------------------------------------------------------------------
VRD Series 2000-1304 COP (Acquired
06/27/00; Cost $7,340,000)
1.75%, 06/01/21(c)(d)(e) A-1+ -- 7,340 7,340,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Chicago Park
District);
VRD Unlimited Tax Series 2002-1306 Class A
COP
(Acquired 05/02/02; Cost $5,500,000)
1.75%, 01/01/29(c)(d)(e) A-1+ -- 5,500 5,500,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago
Public Building Commission); VRD Series
2003-0015 Class A COP (Acquired 05/14/03;
Cost $2,800,000)
1.75%, 12/01/14(c)(d)(e) A-1+ -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Central Lake County
Joint Action Water Agency); VRD Series 2003
B18 RB
(Acquired 02/19/03; Cost $3,155,000)
1.74%, 05/01/20(c)(d)(e) -- VMIG-1 3,155 3,155,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Chicago Board of
Education);
VRD Unlimited Tax Series 2000 A4 GO
(Acquired 11/12/03; Cost $4,845,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 4,845 4,845,000
- -------------------------------------------------------------------------------------------
</Table>
F-9
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
First Union MERLOTs (City of Chicago); VRD
Limited Tax Series 2000 A12 GO (Acquired
10/13/00; Cost $10,000,000)
1.74%, 01/01/23(c)(d)(e) -- VMIG-1 $10,000 $ 10,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Chicago
Emergency Telephone System); VRD Limited
Tax Series 2002 A44 GO
(Acquired 08/02/02; Cost $7,855,000)
1.74%, 01/01/20(c)(d)(e) -- VMIG-1 7,855 7,855,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Cook County Regional
Transportation Authority);
VRD Unlimited Tax Series 2001 A93 GO
(Acquired 10/10/01; Cost $3,670,000)
1.74%, 07/01/27(c)(d)(e) -- VMIG-1 3,670 3,670,000
- -------------------------------------------------------------------------------------------
VRD Unlimited Tax Series 2002 A41 GO
(Acquired 07/25/02; Cost $17,825,000)
1.74%, 06/01/17(c)(d)(e) -- VMIG-1 17,825 17,825,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Cook County); VRD
Unlimited Tax Series 2003 B11 GO (Acquired
01/29/03; Cost $7,000,000)
1.74%, 11/15/25(c)(d)(e) -- VMIG-1 7,000 7,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Illinois); VRD
Unlimited Tax Series 2001 A124 GO (Acquired
11/26/01; Cost $7,915,000)
1.74%, 11/01/26(c)(d)(e) A-1 -- 7,915 7,915,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (University of Illinois);
VRD Series 2000 S GO (Acquired 03/20/00;
Cost $7,400,000)
1.74%, 04/01/30(c)(d)(e) -- VMIG-1 7,400 7,400,000
- -------------------------------------------------------------------------------------------
Glendale Heights (City of) (Glendale Lakes
Project);
Refunding Multi-Family Housing VRD Series
2000 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.69%, 03/01/30(c) A-1+ -- 14,845 14,845,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(American College of Surgeons); VRD Series
1996 RB
(LOC-Northern Trust Co.)
1.60%, 08/01/26(b)(c) A-1+ -- 7,298 7,298,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (BAPS Inc. Project); VRD Series
2002 RB (LOC-Comerica Bank)
1.70%, 06/01/17(b)(c) A-1 -- 9,000 9,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(British Home for Retired Men & Women);
VRD Series 2001 RB (LOC-ABN AMRO Bank N.V.)
1.71%, 11/01/27(b)(c) A-1 -- 9,120 9,120,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Chicago Shakespeare Theater Project); VRD
Series 1999 RB
(LOC-ABN AMRO Bank N.V.) (Acquired
09/24/03; Cost $4,100,000)
1.71%, 01/01/19(b)(c)(d) A-1 -- 4,100 4,100,000
- -------------------------------------------------------------------------------------------
</Table>
F-10
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Development Finance
Authority (Embers Elementary School
Project); Educational Facilities VRD Series
2002 RB (LOC-ABN AMRO Bank N.V.)
(Acquired 11/04/03; Cost $2,250,000)
1.72%, 04/01/32(b)(c)(d) A-1 -- $ 2,250 $ 2,250,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Evanston Northwestern); VRD Series 2001 C
RB
1.70%, 05/01/31(c) A-1+ VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Glenwood School for Boys); VRD Series 1998
RB
(LOC-Bank of Montreal)
1.70%, 02/01/33(b)(c) A-1+ -- 2,100 2,100,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Institute of Gas Technology Project); VRD
Series 1999 IDR
(LOC-Bank of Montreal)
1.80%, 09/01/24(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Lyric Opera of Chicago Project); VRD
Series 1994 RB
(LOC-Northern Trust Co., Bank of Montreal,
JPMorgan Chase Bank)
1.70%, 12/01/28(b)(c) A-1+ VMIG-1 30,000 30,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Mount Carmel High School Project); VRD
Series 2003 RB
(LOC-JPMorgan Chase Bank)
1.70%, 07/01/33(b)(c) -- VMIG-1 5,600 5,600,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Museum of Contemporary Art Project); VRD
Series 1994 RB
(LOC-JPMorgan Chase Bank, Northern Trust
Co.)
1.70%, 02/01/29(b)(c) A-1 VMIG-1 14,950 14,950,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(North Shore Country Day School); VRD
Series 2003 RB
(LOC-Northern Trust Co.)
1.70%, 07/01/33(b)(c) -- VMIG-1 2,825 2,825,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Oak Park Residence Corp. Project); VRD
Series 2001 RB
(LOC-ABN AMRO Bank N.V.) (Acquired
01/29/03; Cost $2,975,000)
1.71%, 07/01/41(b)(c)(d) A-1 -- 2,975 2,975,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Sacred Heart Schools Project); VRD Series
2003 RB
(LOC-Fifth Third Bank)
1.70%, 07/01/33(b)(c) -- VMIG-1 4,600 4,600,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (West Central Illinois
Educational Project); VRD Series 2002 RB
(LOC-JPMorgan Chase Bank)
1.70%, 09/01/32(b)(c) -- VMIG-1 4,800 4,800,000
- -------------------------------------------------------------------------------------------
</Table>
F-11
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Development Finance
Authority
(World Communications Inc.); VRD Series
2000 RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 08/01/15(b)(c) -- VMIG-1 $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (Aurora University); VRD Series
2002 RB (LOC-Fifth Third Bank)
1.75%, 03/01/32(b)(c) -- VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(Chicago Children's Museum); VRD Series
1994 RB
(LOC-JPMorgan Chase Bank)
1.70%, 02/01/28(b)(c) A-1 VMIG-1 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (DePaul University); VRD Series
1992 CP-1 RB (LOC-Northern Trust Co.)
1.70%, 04/01/26(b)(c) A-1+ VMIG-1 1,800 1,800,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(National Louis University); VRD Series
1999 B RB
(LOC-JPMorgan Chase Bank)
1.70%, 06/01/29(b)(c) A-1+ -- 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(University Pooled Financing Program); VRD
Series 1985 RB
1.70%, 12/01/05(c)(f) A-1 VMIG-1 1,050 1,050,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Alexian Brothers Health);
VRD Series 2004 RB (LOC-JPMorgan Chase
Bank)
1.67%, 04/01/35(b)(c) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Jewish
Charities);
VRD Series 2004 A RN (LOC-Bank of Montreal)
1.70%, 06/30/05(b)(c) A-1+ -- 7,630 7,630,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Kohl
Children's Museum);
VRD Series 2004 RB (LOC-Fifth Third Bank)
1.70%, 07/01/34(b)(c) -- VMIG-1 2,680 2,680,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Northwestern University);
VRD Sub-Series 2004 A RB
1.69%, 12/01/34(c) A-1+ VMIG-1 8,000 8,000,000
- -------------------------------------------------------------------------------------------
VRD Sub-Series 2004 B RB
1.70%, 12/01/34(c) A-1+ VMIG-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Bensenville Home Society); VRD Series 1989
A RB
(LOC-JPMorgan Chase Bank)
1.71%, 02/15/19(b)(c) A-1 -- 1,150 1,150,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Blessing Hospital);
VRD Series 1999 B RB
1.74%, 11/15/29(c)(f) A-1 VMIG-1 4,710 4,710,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Cradle Society Project); VRD
Series 1998 RB (LOC-JPMorgan Chase Bank)
1.70%, 04/01/33(b)(c) A-1+ -- 1,600 1,600,000
- -------------------------------------------------------------------------------------------
</Table>
F-12
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Health Facilities
Authority (Edward Hospital Obligated
Group); VRD Series 2001 C RB
1.71%, 02/01/34(c)(f) A-1 VMIG-1 $ 2,050 $ 2,050,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Franciscan Eldercare Project);
Refunding VRD Series 1996 E RB
(LOC-ABN AMRO Bank N.V.)
1.67%, 05/15/27(b)(c) A-1 -- 5,660 5,660,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Northwestern Memorial Hospital); VRD
Series 1995 RB
1.70%, 08/15/25(c) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Peace Memorial Ministries); VRD Series
2003 B RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 08/15/33(b)(c) A-1 -- 9,845 9,845,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Resurrection Health); VRD Series
1999 B RB
1.71%, 05/15/29(c)(f) A-1 VMIG-1 2,210 2,210,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(St. Luke's Medical Center); VRD Series
1998 B RB
1.71%, 11/15/23(c)(f) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority;
Revolving Fund Pooled VRD Series 1985 C RB
(LOC-JPMorgan Chase Bank)
1.70%, 08/01/15(b)(c) A-1+ VMIG-1 8,100 8,100,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Toll Highway Authority;
Refunding Toll Highway VRD Series 1998 B RB
1.75%, 01/01/16(c)(f) AAA VMIG-1 15,900 15,900,000
- -------------------------------------------------------------------------------------------
1.75%, 01/01/17(c)(f) AAA VMIG-1 4,600 4,600,000
- -------------------------------------------------------------------------------------------
Lombard (City of) (Clover Creek Apartments
Project);
VRD Multi-Family Housing Series 2000 RB
(CEP-Federal National Mortgage Association)
1.72%, 12/15/30(c) A-1+ -- 14,855 14,855,000
- -------------------------------------------------------------------------------------------
McCook (City of) (Illinois Saint Andrew
Society);
VRD Series 1996 A RB (LOC-Northern Trust
Co.)
1.72%, 12/01/21(b)(c) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Oak Forest (City of) (Homewood Pool-South
Suburban Mayors & Managers Association
Program); VRD Series 1989 RB
(LOC-Fifth Third Bank)
1.51%, 07/01/24(b)(c) -- VMIG-1 4,500 4,500,000
- -------------------------------------------------------------------------------------------
Orland Hills (City of); Multi-Family Housing
VRD Series 1995 A RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 12/01/04(b)(c) A-1 -- 1,470 1,470,000
===========================================================================================
415,763,000
===========================================================================================
</Table>
F-13
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
INDIANA-3.08%
ABN AMRO Munitops Ctfs. Trust (Township of
Wayne, County of Marion School Building
Corp.); Multi-State Non-AMT VRD Series
2003-27 RB (Acquired 11/12/03; Cost
$13,795,000)
1.76%, 07/15/11(c)(d)(e) -- VMIG-1 $13,795 $ 13,795,000
- -------------------------------------------------------------------------------------------
Brownsburg (City of) Independent School
Building Corp. No. 2;
First Mortgage Series 1995 RB
5.95%, 02/01/05(g)(l) AAA Aaa 1,700 1,761,041
- -------------------------------------------------------------------------------------------
First Union MERLOTs (County of Porter Jail
Building Corp.);
VRD Series 2001 A58 RB (Acquired 11/12/03;
Cost $9,415,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 9,415 9,415,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Bond Bank (Advanced
Program Notes); Series 2004 A RN
2.00%, 01/25/05 SP-1+ MIG-1 18,500 18,551,692
- -------------------------------------------------------------------------------------------
Indiana (State of) Bond Bank (Pike Township
Metropolitan School District); Series 1995
A RB
5.80%, 02/01/05(g)(l) AAA Aaa 2,750 2,821,138
- -------------------------------------------------------------------------------------------
Indiana (State of) Development Finance
Authority (Indiana Museum of Art);
Educational Facilities VRD Series 2004 RB
(LOC-JPMorgan Chase Bank)
1.70%, 02/01/39(b)(c) -- VMIG-1 3,000 3,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Educational Facilities
Authority
(Wabash College Project); Educational
Facilities VRD Series 2003 RB (LOC-JPMorgan
Chase Bank)
1.70%, 12/01/23(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Community Hospitals Project); VRD Series
2000 A RB
(LOC-Bank of America N.A.)
1.70%, 07/01/28(b)(c) A-1+ -- 9,815 9,815,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority (Community Mental
Health & Rehabilitation); VRD Series 1990
RB
(LOC-ABN AMRO Bank N.V.)
1.72%, 11/01/20(b)(c) A-1 -- 2,040 2,040,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Deaconess Hospital); VRD Series 2004 B RB
(LOC-Fifth Third Bank)
1.51%, 01/01/29(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Fayette Memorial Hospital Association);
VRD Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.77%, 10/01/32(b)(m) A-1+ -- 3,100 3,100,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Golden Years Homestead); VRD Series 2002 A
RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 06/01/25(b)(c) A-1+ -- 6,500 6,500,000
- -------------------------------------------------------------------------------------------
</Table>
F-14
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
INDIANA-(CONTINUED)
Indiana (State of) Health Facilities
Financing Authority
(Margaret Mary Community Hospital); VRD
Series 2004 A RB
(LOC-Fifth Third Bank)
1.77%, 12/01/29(b)(m) A-1+ -- $ 5,000 $ 5,000,000
- -------------------------------------------------------------------------------------------
Kokomo (City of) Hospital Authority (St.
Joseph's Hospital Center); Refunding
Hospital Series 1993 RB
6.35%, 08/15/05(g)(l) AAA Aaa 3,000 3,118,888
- -------------------------------------------------------------------------------------------
Monroe (County of) Hospital Authority;
Refunding VRD Hospital Series 1999 RB
1.69%, 05/01/11(c)(f) -- VMIG-1 3,900 3,900,000
===========================================================================================
89,817,759
===========================================================================================
IOWA-1.78%
Iowa (State of) Finance Authority Retirement
Community
(Deerfield Retirement Community); VRD
Series 2003 A RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 12/01/33(b)(c) A-1 -- 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Iowa (State of) Higher Education Loan
Authority
(Graceland Private College); VRD Series
2003 RB
(LOC-Bank of America N.A.)
1.75%, 02/01/33(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Iowa (State of) School Corps.; School Cash
Anticipation Program Series 2004 A Wts.
Ctfs.
3.00%, 06/30/05(f) -- MIG-1 10,000 10,103,360
- -------------------------------------------------------------------------------------------
Series 2004 B Wts. Ctfs.
2.00%, 01/28/05(f) -- MIG-1 18,000 18,045,776
- -------------------------------------------------------------------------------------------
Iowa City (City of) (ACT, Inc.); VRD Series
2001 RB
1.87%, 04/01/32(m) A-1+ -- 6,815 6,815,000
===========================================================================================
51,964,136
===========================================================================================
KANSAS-1.14%
Eagle Tax Exempt Trust (County of Wyandotte
Unified Government Utility System); VRD
Series 2004-0038 Class A COP (Acquired
09/08/04; Cost $5,000,000)
1.75%, 09/01/21(c)(d)(e) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Leawood (City of); Unlimited Tax Temporary
Notes Series 2004-2 GO
3.00%, 10/01/05 -- MIG-1 14,000 14,182,401
- -------------------------------------------------------------------------------------------
Lenexa (City of) Health Care Facilities
(Lakeview Village Inc.);
VRD Series 2002 B RB (LOC-ABN AMRO Bank
N.V.)
1.72%, 05/15/32(b)(c) A-1 -- 7,500 7,500,000
- -------------------------------------------------------------------------------------------
Olathe (City of) Recreational Facilities
(YMCA of Greater Kansas City Project); VRD
Series 2002 B RB (LOC-Bank of America N.A.)
1.75%, 11/01/18(b)(c) -- VMIG-1 3,100 3,100,000
- -------------------------------------------------------------------------------------------
</Table>
F-15
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
KANSAS-(CONTINUED)
Wichita (City of) Recreational Facilities
(YMCA of Wichita Project); VRD Series 1998
XI RB (LOC-Bank of America N.A.)
(Acquired 02/15/01; Cost $3,500,000)
1.75%, 08/01/09(b)(c)(d) A-1+ -- $ 3,500 $ 3,500,000
===========================================================================================
33,282,401
===========================================================================================
KENTUCKY-1.47%
Kentucky (State of) Asset/Liability
Commission;
General Funding Series 2004 A TRAN
3.00%, 06/29/05 SP-1+ MIG-1 15,000 15,159,010
- -------------------------------------------------------------------------------------------
Kentucky (State of) Area Developing Districts
Financing Trust
(Weekly Acquisition-Ewing); Lease Program
VRD Series 2000 RB (LOC-Wachovia Bank N.A.)
1.79%, 06/01/33(b)(c) A-1 -- 5,910 5,910,000
- -------------------------------------------------------------------------------------------
Newport (City of) Kentucky League of Cities
Funding Trust; Lease Program VRD Series
2002 RB (LOC-U.S. Bank N.A.)
1.53%, 04/01/32(b)(c) -- VMIG-1 20,000 20,000,000
- -------------------------------------------------------------------------------------------
Williamsburg (City of) Educational Building
(Cumberland Project); Refunding &
Improvement VRD Series 2002 RB
(LOC-Fifth Third Bank)
1.51%, 09/01/32(b)(c) A-1+ -- 1,790 1,790,000
===========================================================================================
42,859,010
===========================================================================================
LOUISIANA-0.95%
Eagle Tax Exempt Trust (City of New Orleans);
VRD Series 2000-1801 COP (Acquired
10/10/00; Cost $6,000,000)
1.75%, 12/01/21(c)(d)(e) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Louisiana (State of) Offshore Terminal
Authority (Loop LLC Project); Refunding
Deepwater Port Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.69%, 10/01/19(b)(c) A-1+ VMIG-1 16,400 16,400,000
- -------------------------------------------------------------------------------------------
Louisiana (State of) Public Facilities
Authority (Glen Retirement System Project);
VRD Series 2001 RB (LOC-AmSouth Bank)
(Acquired 08/15/01; Cost $3,380,000)
1.84%, 08/01/16(b)(c)(d) -- VMIG-1 3,380 3,380,000
- -------------------------------------------------------------------------------------------
Louisiana (State of); Unlimited Tax Series
1998 B GO
5.50%, 04/15/05(f) AAA Aaa 1,775 1,815,232
===========================================================================================
27,595,232
===========================================================================================
MAINE-0.29%
Maine (State of) Housing Authority; Mortgage
Purchase VRD Series 2003 E-1 RB
1.73%, 11/15/30(c)(f) A-1+ VMIG-1 8,585 8,585,000
===========================================================================================
</Table>
F-16
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MARYLAND-0.96%
Anne Arundel (County of); Unlimited Tax
Series 2002 GO
4.25%, 03/01/05 AA+ Aa1 $ 1,740 $ 1,762,823
- -------------------------------------------------------------------------------------------
Frederick (County of) Retirement Community
(Buckingham's Choice Inc. Project); VRD
Series 1997 C RB
(LOC-Branch Banking & Trust)
1.75%, 01/01/27(b)(c) A-1 -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Hyattsville (City of) (Safeway Inc.
Projects); Refunding VRD Series 1991 IDR
(LOC-Deutsche Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1 -- 740 740,000
- -------------------------------------------------------------------------------------------
Maryland (State of) Economic Development
Corp.
(YMCA of Central Maryland Inc. Project);
VRD Series 2003 RB
(LOC-Branch Banking & Trust)
1.72%, 04/01/28(b)(c) -- VMIG-1 3,800 3,800,000
- -------------------------------------------------------------------------------------------
Maryland (State of) Health & Higher
Educational Facilities Authority (Pooled
Loan Program); VRD Series 1994 D RB
(LOC-Bank of America N.A.) (Acquired
07/01/04; Cost $11,900,000)
1.70%, 01/01/29(b)(c)(d) A-1+ -- 11,900 11,900,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Maryland Health & Higher
Educational Facilities Authority);
VRD Floating Rate Trust Ctfs. Series
2003-829 RB
(Acquired 06/19/03; Cost $3,800,000)
1.73%, 08/15/38(c)(d)(e) -- VMIG-1 3,800 3,800,000
===========================================================================================
28,002,823
===========================================================================================
MASSACHUSETTS-0.99%
Billerica (City of); Limited Tax Series 2004
BAN GO
2.00%, 01/07/05 SP-1+ MIG-1 18,000 18,042,016
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Development Finance
Agency
(Briarwood Retirement); Series 2004 A RB
(LOC-Sovereign Bank, Comerica Bank)
1.68%, 01/01/35(b)(c) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Housing Finance
Agency;
Housing VRD Series 2003 F RB
1.70%, 12/01/37(c)(f) A-1+ VMIG-1 4,200 4,200,000
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Water Resources
Authority;
Series 1993 C RB
5.25%, 12/01/04(g)(l) NRR Aaa 1,460 1,499,158
===========================================================================================
28,741,174
===========================================================================================
MICHIGAN-3.41%
Dearborn (City of) Economic Development Corp.
(Henry Ford Village Inc. Project); VRD
Limited Tax Series 1998 IDR (LOC-Comerica
Bank)
1.74%, 10/01/23(b)(c)(o) -- -- 8,600 8,600,000
- -------------------------------------------------------------------------------------------
</Table>
F-17
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Eagle Tax Exempt Trust (City of Detroit
School District);
VRD Unlimited Tax Series 2002-6014 Class A
GO
(Acquired 11/06/02; Cost $7,105,000)
1.75%, 05/01/32(c)(d)(e) A-1+ -- $ 7,105 $ 7,105,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Detroit Sewage
Disposal System);
VRD Series 2001 A112 RB
(Acquired 10/31/01; Cost $4,910,000)
1.74%, 07/01/32(c)(d)(e) -- VMIG-1 4,910 4,910,000
- -------------------------------------------------------------------------------------------
VRD Series 2003 B41 RB
(Acquired 07/09/03; Cost $6,770,000)
1.74%, 07/01/26(c)(d)(e) -- VMIG-1 6,770 6,770,000
- -------------------------------------------------------------------------------------------
First Union MERLOTS (City of Detroit Water
Supply System);
VRD Series 1999 D RB (Acquired 01/21/00;
Cost $10,000,000)
1.74%, 07/01/29(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Michigan
Hospital Finance Authority); VRD Series
1997 X RB
(Acquired 12/12/03; Cost $15,000,000)
1.74%, 08/15/24(c)(d)(e) -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Kalamazoo (County of) Economic Development
Corp. (Heritage Community Project);
Refunding VRD Limited Tax Series 2004 RB
(LOC-Fifth Third Bank)
1.69%, 05/15/17(b)(c) A-1+ -- 5,405 5,405,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Higher Educational
Facilities Authority
(Hope College); Refunding VRD Limited Tax
Series 2004 RB
(LOC-JPMorgan Chase Bank)
1.73%, 04/01/34(b)(c) A-1 -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Hospital Finance
Authority
(Holland Community Hospital); VRD Series
2004 B RB
(LOC-JPMorgan Chase Bank)
1.73%, 01/01/34(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Municipal Bond Authority;
Series 2004 B-2 RN (LOC-JPMorgan Chase
Bank)
3.00%, 08/23/05(b) SP-1+ -- 15,000 15,188,557
- -------------------------------------------------------------------------------------------
Michigan (State of) Strategic Fund (Van Andel
Research Institute Project); VRD Limited
Tax Series 1997 RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 11/01/27(b)(c) A-1 -- 12,800 12,800,000
- -------------------------------------------------------------------------------------------
Oakland (County of) Economic Development
Corp. (Rochester College Project); VRD
Limited Obligation Series 2001 RB
(LOC-JPMorgan Chase Bank)
1.80%, 08/01/21(b)(c) -- VMIG-1 1,848 1,848,000
- -------------------------------------------------------------------------------------------
Southfield (City of) (Lawrence Tech
University Project);
Economic Development VRD Series 2001 RB
(LOC-JPMorgan Chase Bank)
1.70%, 10/01/31(b)(c) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-18
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Troy (City of) School District; Refunding
School Building & Site Unlimited Tax Series
2004 GO
3.00%, 05/01/05 AA+ Aa1 $ 1,805 $ 1,821,650
===========================================================================================
99,448,207
===========================================================================================
MINNESOTA-4.83%
Golden Valley (City of) (Unicare Homes Inc.
Project);
VRD Series 1984 IDR (LOC-ABN AMRO Bank
N.V.)
1.67%, 09/01/14(b)(c) A-1+ -- 4,400 4,400,000
- -------------------------------------------------------------------------------------------
J.P. Morgan PUTTERs (State of Minnesota
Public Facilities Authority); VRD Drinking
Water Series 2002-319 COP
(Acquired 07/31/03; Cost $14,030,000)
1.71%, 03/01/21(c)(d)(e) A-1 -- 14,030 14,030,000
- -------------------------------------------------------------------------------------------
Maple Grove (City of) (Heritage Christian
Academy);
Economic Development VRD Series 2004 RB
(LOC-U.S. Bank N.A.)
1.69%, 07/01/29(b)(c) A-1+ -- 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Minneapolis (City of) (Minnehaha Academy
Project);
VRD Series 2001 RB (LOC-U.S. Bank N.A.)
1.87%, 05/01/26(b)(m)(o) -- -- 2,500 2,500,000
- -------------------------------------------------------------------------------------------
Minneapolis-St. Paul (Cities of) Metropolitan
Council of Minnesota; Unlimited Tax Series
2002 D GO
5.00%, 02/01/05 AAA Aaa 1,190 1,205,464
- -------------------------------------------------------------------------------------------
Minnesota (State of); Refunding Unlimited Tax
Series 2003 GO
2.00%, 08/01/05 AAA Aa1 2,240 2,250,153
- -------------------------------------------------------------------------------------------
Rochester (City of) Health Care Facilities
(Mayo Foundation); Commercial Paper Notes,
Series 2000 A
1.15%, 10/12/04 A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Series 2000 B
1.15%, 11/09/04 A-1+ -- 20,500 20,500,000
- -------------------------------------------------------------------------------------------
Series 2000 C
1.40%, 10/14/04 A-1+ -- 33,500 33,500,000
- -------------------------------------------------------------------------------------------
Series 2001 A
1.13%, 10/12/04 -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Series 2001 B
1.13%, 10/12/04 -- VMIG-1 10,600 10,600,000
- -------------------------------------------------------------------------------------------
Series 2001 C
1.40%, 10/14/04 -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Adjustable Tender Series 1998 F
1.15%, 10/12/04 A-1+ -- 8,000 8,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-19
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MINNESOTA-(CONTINUED)
St. Paul (City of) Housing & Redevelopment
Authority
(Science Museum of Minnesota); VRD Series
1997 A RB
(LOC-U.S. Bank N.A.)
1.72%, 05/01/27(b)(c) -- VMIG-1 $16,260 $ 16,260,000
===========================================================================================
140,745,617
===========================================================================================
MISSISSIPPI-2.50%
ABN AMRO Munitops Ctfs. Trust (State of
Mississippi Development Board-Jackson Water
& Sewer); Multi-State Non-AMT
VRD Series 2002-22 Ctfs. (Acquired
09/10/03; Cost $9,995,000)
1.76%, 09/01/10(c)(d)(e) -- VMIG-1 9,995 9,995,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of
Mississippi);
VRD Unlimited Tax Series 2002-6018 Class A
COP
(Acquired 11/20/02; Cost $3,200,000)
1.75%, 11/01/22(c)(d)(e) A-1+ -- 3,200 3,200,000
- -------------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Jackson Medical Mall); VRD Series 2000 A
RB (LOC-JPMorgan Chase Bank)
1.70%, 11/01/18(b)(c) A-1 -- 5,300 5,300,000
- -------------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Mississippi College Project); VRD Series
2003 RB
(LOC-AmSouth Bank) (Acquired 07/17/03; Cost
$9,600,000)
1.84%, 07/01/23(b)(c)(d) -- VMIG-1 9,600 9,600,000
- -------------------------------------------------------------------------------------------
Perry (County of) (Leaf River Forest Products
Project); Refunding VRD Series 2002 PCR
(LOC-Citibank N.A.)
1.72%, 02/01/22(b)(c) A-1+ -- 36,500 36,500,000
- -------------------------------------------------------------------------------------------
University of Mississippi Educational
Building Corp.
(Campus Improvements Project); VRD Series
2000 RB
1.74%, 10/01/20(c)(f) -- VMIG-1 8,235 8,235,000
===========================================================================================
72,830,000
===========================================================================================
MISSOURI-0.96%
Missouri (State of) Development Finance Board
(Center of Creative Arts Project); Cultural
Facilities VRD Series 2004 RB
(LOC-National City Bank)
1.74%, 07/01/24(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority (Lutheran Church);
Educational Facilities VRD Series 2004 A RB
(LOC-Bank of America N.A.)
1.74%, 07/01/29(b)(m) -- VMIG-1 5,740 5,740,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority (Southwest Baptist
University Project); Educational Facilities
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.77%, 10/01/33(b)(m) A-1+ -- 5,950 5,950,000
- -------------------------------------------------------------------------------------------
</Table>
F-20
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MISSOURI-(CONTINUED)
Missouri (State of) Health & Educational
Facilities Authority (Washington University
Project); Educational Facilities VRD Series
1985 B RB
1.73%, 09/01/10(c) A-1+ VMIG-1 $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------------------
VRD Series 1996 C RB
1.70%, 09/01/30(m) A-1+ VMIG-1 1,300 1,300,000
- -------------------------------------------------------------------------------------------
VRD Series 1996 D RB
1.70%, 09/01/30(m) A-1+ VMIG-1 1,500 1,500,000
- -------------------------------------------------------------------------------------------
VRD Series 2000 C RB
1.70%, 03/01/40(m) A-1+ VMIG-1 4,300 4,300,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority
(Cox Health System); Refunding VRD Series
1997 RB
1.70%, 06/01/15(f)(m) A-1+ VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
St. Louis (County of) Industrial Development
Authority
(Friendship Village of South County); VRD
Series 2002 B IDR
(LOC-ABN AMRO Bank N.V.)
1.67%, 09/01/22(b)(c) A-1 -- 2,915 2,915,000
===========================================================================================
28,005,000
===========================================================================================
MONTANA-0.39%
Montana (State of) Facility Finance Authority
(Mission Ridge Project); VRD Series 2002 RB
(LOC-ABN AMRO Bank N.V.)
1.72%, 08/01/27(b)(c)(i) -- -- 11,365 11,365,000
===========================================================================================
NEBRASKA-1.51%
Nebhelp Inc.; Multi-Mode VRD
Series 1985 A RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 5,995 5,995,000
- -------------------------------------------------------------------------------------------
Series 1985 B RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 3,590 3,590,000
- -------------------------------------------------------------------------------------------
Series 1985 D RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 5,865 5,865,000
- -------------------------------------------------------------------------------------------
Series 1985 E RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 28,635 28,635,000
===========================================================================================
44,085,000
===========================================================================================
NEVADA-0.88%
ABN AMRO Munitops Ctfs. Trust (County of
Washoe); Refunding VRD Limited Tax Series
2001-24 Single Asset Trust Ctfs. (Acquired
06/21/01; Cost $5,500,000)
1.75%, 07/01/09(c)(d)(e) -- VMIG-1 5,500 5,500,000
- -------------------------------------------------------------------------------------------
Carson (City of) (Carson-Tahoe Hospital
Project);
Hospital VRD Series 2003 B RB (LOC-U.S.
Bank N.A.)
1.69%, 09/01/33(b)(c) A-1+ -- 18,000 18,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-21
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
NEVADA-(CONTINUED)
Clark (County of); Refunding Limited Tax
Series 1998 B GO
5.25%, 11/01/04 AA Aa2 $ 2,245 $ 2,252,753
===========================================================================================
25,752,753
===========================================================================================
NEW HAMPSHIRE-0.45%
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(New Hampshire Higher Educational & Health
Facilities Authority);
Refunding VRD
Series 2003-772 RB
(Acquired 01/22/03; Cost $5,475,000)
1.75%, 01/01/17(c)(d)(e) A-1 -- 5,475 5,475,000
- -------------------------------------------------------------------------------------------
Series 2003-866 RB
(Acquired 10/23/03; Cost $7,485,000)
1.75%, 08/15/21(c)(d)(e) A-1 -- 7,485 7,485,000
===========================================================================================
12,960,000
===========================================================================================
NEW MEXICO-0.05%
Albuquerque (City of) Educational Facilities
(Albuquerque Academy Project); VRD Series
2002 RB
1.73%, 10/15/16(c) AA VMIG-1 1,500 1,500,000
===========================================================================================
NEW YORK-0.34%
ABN AMRO Munitops Ctfs. Trust (Triborough
Bridge & Tunnel Authority); Non-AMT VRD
Series 2002-31 Ctfs.
(Acquired 03/24/04; Cost $10,000,000)
1.70%, 11/15/10(c)(d)(e) -- VMIG-1 10,000 10,000,000
===========================================================================================
NORTH CAROLINA-1.88%
Mecklenburg (County of); Public Improvement
Unlimited Tax Series 1998 B GO
4.40%, 02/01/05 AAA Aaa 13,000 13,130,922
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Barton College); Educational Facilities
VRD Series 2004 RB
(LOC-Branch Banking & Trust)
1.72%, 07/01/19(b)(c) -- VMIG-1 5,750 5,750,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Elon College); VRD Series 2001 A RB
(LOC-Bank of America N.A.)
1.68%, 01/01/14(b)(c)(i) -- -- 4,500 4,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Goodwill Community Foundation Project);
VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.70%, 04/01/22(b)(c)(i) -- -- 2,165 2,165,000
- -------------------------------------------------------------------------------------------
</Table>
F-22
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
NORTH CAROLINA-(CONTINUED)
North Carolina (State of) Capital Facilities
Finance Agency (Thompson Children's Home);
Educational Facilities VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.70%, 12/01/20(b)(c)(i) -- -- $ 3,070 $ 3,070,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency (University of North
Carolina at Pembroke University
Foundation); Student Housing VRD Series
2001 A RB
(LOC-Wachovia Bank N.A.)
1.82%, 07/01/31(b)(c) -- VMIG-1 11,240 11,240,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Wolfpack Club Project); VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.70%, 04/01/12(b)(c)(i) -- -- 9,500 9,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission; Refunding First Mortgage Health
Care Facilities VRD Series 2004 C RB
(LOC-SunTrust Bank)
1.72%, 11/01/27(b)(c) -- VMIG-1 3,500 3,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of); Public Improvement
Unlimited Tax Series 2002 A GO
5.00%, 03/01/05 AAA Aa1 1,865 1,892,943
===========================================================================================
54,748,865
===========================================================================================
OHIO-4.63%
Akron (City of) (Community Learning Centers);
Income Tax Revenue Series 2004 B RB
2.00%, 12/01/04(f) AAA Aaa 1,000 1,001,488
- -------------------------------------------------------------------------------------------
Akron (City of) Bath & Copley (Townships of)
Joint Township Hospital District (Summa
Health Systems); VRD Series 2004 B RB
(LOC-JPMorgan Chase Bank)
1.71%, 11/01/34(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Allen (County of); Refunding Limited Tax
Series 2002 GO
1.70%, 12/01/04(f) -- Aaa 1,000 1,001,075
- -------------------------------------------------------------------------------------------
Butler (County of) Health Care Facilities
(Lifesphere Project); Refunding &
Improvement VRD Series 2002 RB
(LOC-U.S. Bank N.A.)
1.70%, 05/01/27(b)(c) A-1+ -- 8,500 8,500,000
- -------------------------------------------------------------------------------------------
Cambridge (City of) Hospital Facilities
(Regional Medical Center Project);
Refunding & Improvement VRD Series 2001 RB
(LOC-National City Bank)
1.73%, 12/01/21(b)(c) -- VMIG-1 11,515 11,515,000
- -------------------------------------------------------------------------------------------
Centerville (City of) (Bethany Lutheran
Village Project);
Health Care VRD Series 1994 RB
(LOC-National City Bank)
1.73%, 11/01/13(b)(c) -- VMIG-1 2,985 2,985,000
- -------------------------------------------------------------------------------------------
</Table>
F-23
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OHIO-(CONTINUED)
Cincinnati (City of) & Hamilton (County of)
Port Authority (Kenwood Office Association
Project); Economic Development VRD Series
1985 RB (LOC-Fifth Third Bank)
1.77%, 09/01/25(b)(m) A-1+ -- $ 1,185 $ 1,185,000
- -------------------------------------------------------------------------------------------
Cleveland Heights (City of); Limited Tax
Series 2004 BAN GO
2.00%, 08/18/05(o) -- -- 3,234 3,245,177
- -------------------------------------------------------------------------------------------
Cuyahoga (County of) Continuing Care
Facilities; Refunding VRD Series 1999 RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 02/01/29(b)(c) A-1+ -- 15,985 15,985,000
- -------------------------------------------------------------------------------------------
Cuyahoga (County of) Health Care Facilities
(Judson Retirement Community); Refunding
VRD Series 2000 RB
(LOC-National City Bank)
1.72%, 11/15/19(b)(c) A-1 -- 800 800,000
- -------------------------------------------------------------------------------------------
Cuyahoga Falls (City of); Limited Tax Series
2003 Notes
2.00%, 12/16/04 -- MIG-1 7,000 7,009,153
- -------------------------------------------------------------------------------------------
Hamilton (County of) Economic Development
(St. Xavier High School Project); VRD
Series 2003 RB
(LOC-Fifth Third Bank)
1.51%, 04/01/28(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Lake (County of); Limited Tax Series 2004 BAN
GO
2.00%, 04/14/05(o) -- -- 3,000 3,013,944
- -------------------------------------------------------------------------------------------
Lakewood (City of) (St. Edward High School
Project);
Educational Facilities VRD Series 2000 RB
(LOC-Fifth Third Bank)
1.69%, 08/01/30(b)(c) -- VMIG-1 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Lorain (County of) (Elyria United Methodist
Village);
Refunding Hospital VRD Series 1996 B RB
(LOC-JPMorgan Chase Bank)
1.71%, 06/01/12(b)(c) A-1 VMIG-1 4,685 4,685,000
- -------------------------------------------------------------------------------------------
Lorain (County of) (EMH Regional Medical
Center Project);
Hospital Facilities VRD Series 2001 RB
(LOC-National City Bank)
1.76%, 05/01/26(b)(c)(o) -- -- 15,170 15,170,000
- -------------------------------------------------------------------------------------------
Lorain (County of) Independent Living
Facilities
(Elyria United Methodist Project); VRD
Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.71%, 06/01/25(b)(c) A-1+ -- 9,125 9,125,000
- -------------------------------------------------------------------------------------------
Mahoning (County of) Hospital Facilities
(Forum Health Obligation Group);
VRD Series 1997 B RB
1.70%, 12/01/28(c)(f) A-1+ VMIG-1 10,500 10,500,000
- -------------------------------------------------------------------------------------------
Series 2002 B RB (LOC-Fifth Third Bank)
1.73%, 12/01/27(b)(c) -- VMIG-1 7,200 7,200,000
- -------------------------------------------------------------------------------------------
</Table>
F-24
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OHIO-(CONTINUED)
Marion (County of) (Pooled Lease Program);
Hospital Improvement VRD Series 1990 RB
(LOC-JPMorgan Chase Bank)
1.72%, 08/01/20(b)(c) A-1 -- $ 4,535 $ 4,535,000
- -------------------------------------------------------------------------------------------
Middleburg Heights (City of) (Southwest
General Health);
Hospital Improvement Series 1997 RB
(LOC-Fifth Third Bank)
1.73%, 08/15/22(b)(c) A-1+ -- 5,405 5,405,000
- -------------------------------------------------------------------------------------------
Montgomery (County of) (St. Vincent DePaul
Society);
Limited Obligation VRD Series 1996 RB
(LOC-National City Bank)
1.73%, 12/01/10(b)(c) A-1 -- 1,900 1,900,000
- -------------------------------------------------------------------------------------------
Portage (County of) (Robinson Memorial
Hospital);
Hospital VRD Series 2002 RB (LOC-JPMorgan
Chase Bank)
1.73%, 05/01/17(b)(c) -- VMIG-1 6,255 6,255,000
- -------------------------------------------------------------------------------------------
Solon (City of); Unlimited Tax Series 2003
BAN GO
2.00%, 12/09/04(o) -- -- 2,800 2,804,536
- -------------------------------------------------------------------------------------------
Twinsburg (City of) School District;
Refunding Unlimited Tax Series 2004 GO
2.00%, 12/01/04(f) -- Aaa 1,800 1,802,977
===========================================================================================
134,923,350
===========================================================================================
OKLAHOMA-1.79%
Mustang (City of) Improvement Authority;
Refunding Series 1995 RB
5.38%, 12/01/04(g)(l) AAA Aaa 3,135 3,188,215
- -------------------------------------------------------------------------------------------
Oklahoma (County of) Finance Authority
(Oxford Oaks Apartments Projects);
Refunding Multi-Family Housing VRD Series
2000 RB
(CEP-Federal National Mortgage Association)
1.71%, 07/15/30(c) A-1+ -- 27,695 27,695,000
- -------------------------------------------------------------------------------------------
Oklahoma (State of) Development Finance
Authority
(Capitol Dome Project); VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.79%, 06/01/11(b)(c) A-1+ -- 3,785 3,785,000
- -------------------------------------------------------------------------------------------
Oklahoma (State of) Water Resource Board;
State Loan Program VRD Series 2003 A RB
0.98%, 10/01/04(g)(h) A-1+ -- 14,935 14,935,000
- -------------------------------------------------------------------------------------------
Tulsa (County of) Industrial Authority;
Capital Improvements Series 2003 B RB
4.00%, 05/15/05 AA -- 2,500 2,537,739
===========================================================================================
52,140,954
===========================================================================================
</Table>
F-25
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OREGON-1.15%
Oregon (State of) Health, Housing,
Educational & Cultural Facilities Authority
(Quatama Crossing LLC Housing Project);
VRD Series 1998 RB (LOC-U.S. Bank N.A.)
1.74%, 01/01/31(b)(c) -- Aa2 $ 7,430 $ 7,430,000
- -------------------------------------------------------------------------------------------
Oregon (State of); Unlimited Tax Series 2003
TAN GO
2.25%, 11/15/04 SP-1+ MIG-1 25,000 25,030,450
- -------------------------------------------------------------------------------------------
Salem (City of) Water & Sewer; Refunding
Series 2004 RB
3.00%, 05/01/05(f) AAA Aaa 1,175 1,184,588
===========================================================================================
33,645,038
===========================================================================================
PENNSYLVANIA-2.78%
ABN AMRO Munitops Ctfs. Trust (State of
Pennsylvania Public School Building
Authority); Non-AMT VRD
Series 2001-30 Ctfs. (Acquired 10/31/02;
Cost $5,000,000)
1.74%, 09/01/09(c)(d)(e) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Series 2003-24 Ctfs. (Acquired 03/08/04;
Cost $7,000,000)
1.74%, 06/01/11(c)(d)(e) -- VMIG-1 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Allegheny (County of) Hospital Development
Authority (ACES-Presbyterian University
Hospital); VRD Series 1988 B1 RB
(LOC-JPMorgan Chase Bank)
1.70%, 03/01/18(b)(c) -- VMIG-1 2,085 2,085,000
- -------------------------------------------------------------------------------------------
Allegheny (County of) Industrial Development
Authority
(Carnegie Museums of Pittsburgh); VRD
Series 2002 IDR
(LOC-Royal Bank of Scotland)
1.70%, 08/01/32(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Altoona (City of) Authority; Water Series
1994 A RB
6.50%, 11/01/04(g)(l) AAA NRR 1,700 1,741,627
- -------------------------------------------------------------------------------------------
Berks (County of) Industrial Development
Authority
(Lutheran Services); Health Care VRD Series
1998 A IDR
1.69%, 01/01/28(c)(f) -- VMIG-1 9,588 9,588,000
- -------------------------------------------------------------------------------------------
Chartiers Valley (Community of) Industrial &
Commercial Development Authority (Asbury
Villas Project);
VRD Series 2000 B IDR (LOC-ABN AMRO Bank
N.V.)
1.72%, 12/01/30(b)(c) A-1 -- 3,000 3,000,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Delaware Valley
Regional);
VRD Series 2001-3801 Class A COP
(Acquired 06/04/01; Cost $8,900,000)
1.75%, 08/01/28(c)(d)(e) A-1+ -- 8,900 8,900,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Scranton &
County of Lackawanna Health & Welfare
Authority); VRD Series 2002 A-18 RB
(Acquired 03/22/02; Cost $2,860,000)
1.74%, 03/01/15(c)(d)(e) -- VMIG-1 2,860 2,860,000
- -------------------------------------------------------------------------------------------
</Table>
F-26
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
PENNSYLVANIA-(CONTINUED)
Franklin (County of) Industrial Development
Authority (Chambersburg Hospital
Obligation);
Health Care VRD Series 2000 IDR
1.79%, 12/01/24(c)(f) A-1 Aaa $ 3,575 $ 3,575,000
- -------------------------------------------------------------------------------------------
Geisinger Authority Health System (Geisinger
Health System Foundation); Refunding VRD
Series 2000 RB
1.71%, 08/01/28(m) A-1+ VMIG-1 25,950 25,950,000
- -------------------------------------------------------------------------------------------
Lehigh (County of) Industrial Development
Authority
(Allegheny Electric Coop. Inc.);
VRD Series 1984 PCR (LOC-Rabobank
Nederland)
1.30%, 10/01/14(b)(j) A-1+ -- 7,180 7,180,000
- -------------------------------------------------------------------------------------------
Refunding VRD Series 1984 PCR (LOC-Rabobank
Nederland)
1.30%, 06/01/14(b)(j) A-1+ -- 1,030 1,030,000
- -------------------------------------------------------------------------------------------
Philadelphia (City of) Industrial Development
Authority
(Girard Estate Aramark Project); VRD Series
2002 IDR
(LOC-JP Morgan Chase Bank)
1.70%, 06/01/32(b)(c) A-1+ -- 1,000 1,000,000
===========================================================================================
80,909,627
===========================================================================================
SOUTH CAROLINA-2.07%
Cherokee (County of) (Newark Electronics
Division); Industrial VRD Series 1985 RB
(LOC-ABN AMRO Bank N.V.)
1.71%, 12/01/15(b)(c) A-1 -- 6,500 6,500,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of South
Carolina Public Service Authority); VRD
Series 2000-4001 Class A COP
(Acquired 09/08/00; Cost $10,100,000)
1.75%, 01/01/22(c)(d)(e) A-1+ -- 10,100 10,100,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of South Carolina
Public Service Authority); VRD Series 2000
L RB
(Acquired 02/25/00; Cost $11,590,000)
1.74%, 01/01/22(c)(d)(e) -- VMIG-1 11,590 11,590,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of South Carolina Transportation
Infrastructure Bank); Floating Rate Trust
Ctfs. VRD Series 2002-728 RB (Acquired
11/13/02; Cost $7,185,000)
1.73%, 10/01/22(c)(d)(e) -- VMIG-1 7,185 7,185,000
- -------------------------------------------------------------------------------------------
Oconee (County of) (Duke); Refunding VRD
Series 1993 PCR (LOC-JPMorgan Chase Bank)
1.70%, 02/01/17(b)(c) -- P-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Educational
Facilities Authority
for Non-Profit Institutions (The Allen
University Project);
VRD Series 1998 RB (LOC-Bank of America
N.A.)
(Acquired 03/27/01; Cost $2,525,000)
1.75%, 09/01/18(b)(c)(d) A-1+ -- 2,525 2,525,000
- -------------------------------------------------------------------------------------------
</Table>
F-27
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
SOUTH CAROLINA-(CONTINUED)
South Carolina (State of) Educational
Facilities Authority
for Non-Profit Institutions (Morris College
Project);
VRD Series 1997 RB (LOC-Bank of America
N.A.)
(Acquired 07/30/02; Cost $2,100,000)
1.75%, 07/01/17(b)(c)(d) A-1+ -- $ 2,100 $ 2,100,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Carolina Children's
Home Project); VRD Series 2003 RB
(LOC-Branch Banking & Trust)
1.72%, 03/01/23(b)(c) -- VMIG-1 3,335 3,335,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Carolina Piedmont
Foundation Project); VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.75%, 09/01/32(b)(c)(i) -- -- 4,000 4,000,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Catholic Diocese of
South Carolina Project); VRD Series 1998 RB
(LOC-Bank of America N.A.) (Acquired
07/23/02; Cost $2,555,000)
1.75%, 09/01/18(b)(c)(d) A-1+ -- 2,555 2,555,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Presbyterian Home of
South Carolina Project);
VRD Series 2003 A RB (LOC-Wachovia Bank
N.A.)
1.75%, 04/01/20(b)(c) A-1 -- 4,535 4,535,000
===========================================================================================
60,425,000
===========================================================================================
SOUTH DAKOTA-0.11%
South Dakota (State of) Health & Educational
Facilities Authority (University of Sioux
Falls); VRD Series 2001 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 10/01/16(b)(c) A-1+ -- 3,155 3,155,000
===========================================================================================
TENNESSEE-5.46%
Eagle Tax Exempt Trust (City of Chattanooga);
VRD Series 2000-4202 Class A COP (Acquired
10/10/00; Cost $14,040,000)
1.75%, 10/01/27(c)(d)(e) A-1+ -- 14,040 14,040,000
- -------------------------------------------------------------------------------------------
Jackson (City of) Energy Authority; Electric
Systems VRD Series 2003 B RB
1.70%, 11/01/26(c)(f) -- VMIG-1 12,700 12,700,000
- -------------------------------------------------------------------------------------------
Jackson (City of) Health & Educational
Facilities Board (Trinity Christian
Academy); Educational Facilities VRD Series
2002 RB
(LOC-AmSouth Bank)
1.84%, 03/01/22(b)(c) -- VMIG-1 5,400 5,400,000
- -------------------------------------------------------------------------------------------
Knox (County of) Health Educational & Housing
Facility Board (Volunteer Student Housing
LLC Project); Student Housing VRD Series
2002 RB (LOC-Wachovia Bank N.A.)
1.69%, 09/01/34(b)(c) -- VMIG-1 27,020 27,020,000
- -------------------------------------------------------------------------------------------
</Table>
F-28
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TENNESSEE-(CONTINUED)
Memphis (City of); Electric System Sub-Series
2003 A RB
2.00%, 12/01/04 AA- Aa3 $10,000 $ 10,014,023
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(City of Nashville & County of Davidson);
Unlimited Tax Series 2003-871 GO
(Acquired 11/17/03; Cost $4,995,000)
1.73%, 10/15/10(c)(d)(e) -- VMIG-1 4,995 4,995,000
- -------------------------------------------------------------------------------------------
Sevier (County of) Public Building Authority
(Local Government Public Improvement);
VRD Series 1995 A RB
1.72%, 06/01/15(c)(f) AAA VMIG-1 5,230 5,230,000
- -------------------------------------------------------------------------------------------
VRD Series 1995 B-2 RB
1.72%, 06/01/06(c)(f) AAA VMIG-1 1,200 1,200,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 I A-1 RB
1.72%, 06/01/22(c)(f) -- VMIG-1 5,900 5,900,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-1 RB
1.72%, 06/01/21(c)(f) -- VMIG-1 2,100 2,100,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-3 RB
1.72%, 06/01/10(c)(f) -- VMIG-1 1,485 1,485,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-5 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 1,320 1,320,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II F-1 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 1,190 1,190,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II F-5 RB
1.72%, 06/01/27(c)(f) -- VMIG-1 2,265 2,265,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-1 RB
1.72%, 06/01/07(c)(f) -- VMIG-1 14,950 14,950,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-3 RB
1.72%, 06/01/19(c)(f) -- VMIG-1 1,425 1,425,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-4 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 300 300,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III B-2 RB
1.72%, 06/01/19(c)(f) -- VMIG-1 5,650 5,650,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III C-3 RB
1.72%, 06/01/18(c)(f) -- VMIG-1 3,475 3,475,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III C-4 RB
1.72%, 06/01/20(c)(f) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
VRD Series 1999 II A-1 RB
1.72%, 06/01/24(c)(f) -- VMIG-1 6,300 6,300,000
- -------------------------------------------------------------------------------------------
VRD Series 1999 II B-1 RB
1.72%, 06/01/25(c)(f) -- VMIG-1 1,700 1,700,000
- -------------------------------------------------------------------------------------------
</Table>
F-29
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TENNESSEE-(CONTINUED)
Shelby (County of) Health, Educational &
Housing Facilities Board (Briarcrest
Christian School System); Educational
Facilities VRD Series 2002 RB (LOC-SunTrust
Bank)
1.69%, 04/01/22(b)(c) -- VMIG-1 $11,050 $ 11,050,000
- -------------------------------------------------------------------------------------------
Shelby (County of) Health, Educational &
Housing Facilities Board (St. Benedict
Auburndale School); VRD Series 2003 RB
(LOC-AmSouth Bank)
1.74%, 05/01/33(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Tennessee (State of) Local Development
Authority (Community Provider Pooled Loan
Program); Series 1994 RB
6.45%, 10/01/04(g)(l) NRR -- 1,000 1,020,000
- -------------------------------------------------------------------------------------------
Washington (County of) (Capital Outlay
Notes);
Refunding Unlimited Tax Series 2002 GO
4.00%, 02/01/05(f) -- Aaa 1,000 1,009,664
- -------------------------------------------------------------------------------------------
Williamson (County of) Industrial Development
Board (Currey Ingram Academy); Educational
Facilities VRD Series 2003 RB
(LOC-SunTrust Bank)
1.75%, 04/01/23(b)(c) -- VMIG-1 2,500 2,500,000
===========================================================================================
159,238,687
===========================================================================================
TEXAS-11.84%
ABN AMRO Munitops Ctfs. Trust (City of
Leander Independent School District);
Unlimited Multi-State Non-AMT VRD Series
2002-16 Ctfs. (Acquired 08/20/03; Cost
$5,395,000)
1.75%, 08/15/10(c)(d)(e) -- VMIG-1 5,395 5,395,000
- -------------------------------------------------------------------------------------------
Alief (City of) Independent School District;
Unlimited Tax Series 1997 GO (CEP-Texas
Permanent School Fund)
6.60%, 02/15/05 AAA Aaa 1,000 1,020,512
- -------------------------------------------------------------------------------------------
Amarillo (City of) Health Facilities Corp.
(Panhandle Pooled Health Care); VRD Series
1985 ACES RB (LOC-BNP Paribas)
1.75%, 05/31/25(b)(c) -- VMIG-1 4,862 4,862,000
- -------------------------------------------------------------------------------------------
Austin (City of) Water & Wastewater System;
Refunding Series 2002 A RB
5.00%, 11/15/04(f) AAA Aaa 4,000 4,019,072
- -------------------------------------------------------------------------------------------
Austin (City of); Refunding Utility System
Series 1995 RB
5.60%, 05/15/05(g)(l) AAA Aaa 5,000 5,128,791
- -------------------------------------------------------------------------------------------
Austin (City of); Utility System Series 1994
RB
5.75%, 11/15/04(g)(i) AAA Aaa 2,605 2,619,767
- -------------------------------------------------------------------------------------------
Bexar (County of) Health Facilities
Development Corp.
(Air Force Village); VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.69%, 08/15/30(b)(c) A-1+ -- 19,500 19,500,000
- -------------------------------------------------------------------------------------------
</Table>
F-30
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Bexar (County of) Health Facilities
Development Corp.
(Warm Springs); Healthcare System VRD
Series 1997 RB
(LOC-JPMorgan Chase Bank)
1.74%, 09/01/27(b)(c) -- VMIG-1 $ 3,435 $ 3,435,000
- -------------------------------------------------------------------------------------------
Brownsville (City of) Utility Systems;
Refunding Sub. Lien VRD Series 2001 A RB
0.95%, 11/04/04(f)(g)(k) A-1+ VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Dallas (City of) Waterworks & Sewer System;
Refunding Series 2002 A RB
4.00%, 10/01/04 AA+ Aa2 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Dallas (City of); Limited Tax Series 2003 GO
3.50%, 02/15/05 AA+ Aa1 1,500 1,513,855
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Houston
Airport);
VRD Series 2000-4307 COP (Acquired
11/15/00; Cost $15,750,000)
1.75%, 07/01/28(c)(d)(e) A-1+ -- 15,750 15,750,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Houston Water
& Sewer);
VRD Series 1997-4305 Class A COP (Acquired
04/27/99; Cost $14,005,000)
1.75%, 12/01/27(c)(d)(e) A-1+ -- 14,005 14,005,000
- -------------------------------------------------------------------------------------------
VRD Series 2002-6019 Class A COP (Acquired
11/13/02; Cost $8,910,000)
1.75%, 12/01/30(c)(d)(e) A-1+ -- 8,910 8,910,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Harris County Toll
Road);
VRD Series 2001-4305 COP
(Acquired 05/08/01; Cost $7,390,000)
1.75%, 08/01/14(c)(d)(e) A-1+ -- 7,390 7,390,000
- -------------------------------------------------------------------------------------------
VRD Series 2002-6012 Class A COP
(Acquired 11/20/02; Cost $1,580,000)
1.75%, 08/15/30(c)(d)(e) A-1+ -- 1,580 1,580,000
- -------------------------------------------------------------------------------------------
El Paso (County of); Refunding Limited Tax
Series 2002 A GO
3.25%, 02/15/05(f) AAA Aaa 1,040 1,048,302
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Harris County Toll
Road);
VRD Series 2003 B16 RB (Acquired 02/19/03;
Cost $3,015,000)
1.57%, 08/15/25(c)(d)(e) -- VMIG-1 3,015 3,015,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Jefferson County Health
Facilities Development Corp.); VRD Series
2001 A83 RB
(Acquired 11/18/03; Cost $3,570,000)
1.20%, 11/16/04(d)(e)(g)(k)(n) A-1 -- 3,570 3,570,000
- -------------------------------------------------------------------------------------------
Fort Worth (City of); Limited Tax Series 2000
GO Ctfs.
6.25%, 03/01/05(g)(l) NRR NRR 5,000 5,105,817
- -------------------------------------------------------------------------------------------
Garland (City of) Industrial Development
Authority Inc. (Carroll Co. Project); VRD
Series 1984 IDR (LOC-Wells Fargo Bank N.A.)
(Acquired 09/03/03; Cost $2,300,000)
1.74%, 12/01/14(b)(c)(d) -- Aaa 2,300 2,300,000
- -------------------------------------------------------------------------------------------
</Table>
F-31
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Goose Creek (City of) Consolidated
Independent School District; Refunding
Unlimited Tax Series 2002 A GO
(CEP-Texas Permanent School Fund)
4.00%, 02/15/05 AAA Aaa $ 1,520 $ 1,536,322
- -------------------------------------------------------------------------------------------
Grand Prairie (City of) Housing Finance Corp.
(Lincoln Property Co.); Refunding
Multi-Family Housing VRD Series 1993 RB
(CEP-General Electric Corp.)
1.77%, 06/01/10(c) A-1+ -- 2,700 2,700,000
- -------------------------------------------------------------------------------------------
Grapevine (City of) Industrial Development
Corp.
(Southern Air Transport); Refunding Airport
Series 1993 RB
(LOC-JPMorgan Chase Bank)
1.77%, 03/01/10(b)(c) A-1+ -- 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Harris (County of) Cultural Education
Facilities Finance Corp. (Houston Music
Hall Foundation); VRD Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.74%, 06/01/29(b)(c) A-1+ -- 700 700,000
- -------------------------------------------------------------------------------------------
Harris (County of) Hospital District; Sub.
Lien Commercial Paper Series A RN (LOC-Bank
of America N.A.)
1.28%, 11/22/04(b) A-1+ -- 9,451 9,451,000
- -------------------------------------------------------------------------------------------
Harris (County of) Houston Texas Sports
Authority (Rodeo);
Jr. Lein VRD Series 2001 C RB
1.77%, 11/15/30(c)(f) A-1+ VMIG-1 6,400 6,400,000
- -------------------------------------------------------------------------------------------
Harris (County of); Permanent Improvement
Unlimited Tax Series 2003 GO
3.00%, 10/01/04 AA+ Aa1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Harris (County of); Refunding Unlimited Tax
Series 2001 GO
5.00%, 10/01/04 AA+ Aa1 4,970 4,970,000
- -------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corp. (AMOCO Project);
VRD Series 1985 PCR
1.15%, 11/01/04(g)(h) A-1+ P-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corp.
(AMOCO Project-Standard Oil Co.); VRD
Series 1983 PCR
1.40%, 03/01/05(g)(h) A-1+ Aa1 12,775 12,775,000
- -------------------------------------------------------------------------------------------
Houston (City of) Independent School District
(Schoolhouse);
Limited Tax Series 2004 GO
(CEP-Texas Permanent School Fund)
1.62%, 06/09/05(g)(k) A-1+ VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Houston (City of); Commercial Paper Notes
Series 2003 A GO
1.30%, 10/21/04 A-1+ P-1 20,000 20,000,000
- -------------------------------------------------------------------------------------------
1.37%, 11/15/04 A-1+ P-1 24,000 24,000,000
- -------------------------------------------------------------------------------------------
1.38%, 01/25/05 A-1+ P-1 13,400 13,400,000
- -------------------------------------------------------------------------------------------
Mansfield (City of); Refunding Unlimited Tax
VRD Series 2004 GO
2.00%, 02/15/05(f) AAA Aaa 855 857,910
- -------------------------------------------------------------------------------------------
</Table>
F-32
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Merrill Lynch P-Floats (City of Brazosport
Independent School District); Refunding
Unlimited Tax VRD Series 2003 PT-1690 GO
(Acquired 02/20/03; Cost $4,920,000)
1.73%, 08/15/10(c)(d)(e) -- VMIG-1 $ 4,920 $ 4,920,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (County of Harris
Hospital District);
VRD Series 2002 PT-665 RB (Acquired
10/02/02; Cost $5,935,000)
1.73%, 08/15/08(c)(d)(e) A-1+ -- 5,935 5,935,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Texas Affordable Housing Corp.);
Floating Rate Trust Ctfs. VRD Series
2003-780 RB
(Acquired 02/19/03; Cost $1,995,000)
1.73%, 09/01/22(c)(d)(e) -- VMIG-1 1,995 1,995,000
- -------------------------------------------------------------------------------------------
Northside Independent School District;
Refunding VRD Unlimited Tax Series 2003 B
GO (CEP-Texas Permanent School Fund)
1.75%, 08/01/05(g)(k) A-1+ VMIG-1 1,870 1,870,000
- -------------------------------------------------------------------------------------------
Pine Tree Independent School District;
Unlimited Tax Series 1994 GO (CEP-Texas
Permanent School Fund)
5.25%, 02/15/05(g)(k) NRR Aaa 910 923,135
- -------------------------------------------------------------------------------------------
San Antonio (City of) Water & Sewer System;
Commercial Paper Notes Series 2001 A GO
1.15%, 10/21/04 A-1+ P-1 29,900 29,900,000
- -------------------------------------------------------------------------------------------
Sherman (City of) Higher Education Finance
Corp. (Austin College Project); Higher
Education VRD Series 1997 RB
(LOC-Bank of America N.A.)
1.75%, 01/01/18(b)(c) A-1+ -- 12,800 12,800,000
- -------------------------------------------------------------------------------------------
Spring (City of) Independent School District;
Unlimited Tax Series 2004 GO (CEP-Texas
Permanent School Fund)
2.50%, 02/15/05 AAA Aaa 2,195 2,206,356
- -------------------------------------------------------------------------------------------
Texas (State of); Series 2004 TRAN
3.00%, 08/31/05 SP-1+ MIG-1 30,000 30,378,015
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (Southeast Texas Housing
Finance Corp.);
VRD Series 2001 A18 RB (Acquired 11/18/03;
Cost $4,130,000)
1.20%, 11/16/04(d)(e)(g)(k)(n) A-1 -- 4,130 4,130,000
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (University of Texas);
Refunding VRD Series 2003 B14 RB (Acquired
01/29/03; Cost $8,005,000)
1.72%, 08/15/22(c)(d)(e) -- VMIG-1 8,005 8,005,000
===========================================================================================
345,120,854
===========================================================================================
UTAH-1.47%
Davis (County of) Housing Authority (Fox
Creek Apartments); Refunding Multi-Family
Housing VRD Series 1997 A RB
(LOC-JPMorgan Chase Bank)
1.71%, 08/15/27(b)(c) A-1 -- 4,240 4,240,000
- -------------------------------------------------------------------------------------------
Davis (County of); Unlimited Tax Series 2004
TRAN
2.25%, 12/30/04 -- MIG-1 4,000 4,009,763
- -------------------------------------------------------------------------------------------
</Table>
F-33
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
UTAH-(CONTINUED)
First Union MERLOTs (Intermountain Power
Agency);
Power Supply VRD Series 2002 A59 RB
(Acquired 10/23/02; Cost $7,040,000)
1.74%, 07/01/10(c)(d)(e) -- VMIG-1 $ 7,040 $ 7,040,000
- -------------------------------------------------------------------------------------------
Intermountain Power Agency; Power Supply VRD
Series 1985 E RB
1.24%, 12/01/04(f)(g)(k) A-1+ VMIG-1 14,770 14,770,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (City of Murray
Hospital); VRD Series 2002 PA-1066 RB
(Acquired 10/02/02; Cost $5,995,000)
1.73%, 05/15/22(c)(d)(e) A-1 -- 5,995 5,995,000
- -------------------------------------------------------------------------------------------
Salt Lake (City of) (Gateway Project);
Special Assessment VRD Series 2003
(LOC-Citibank N.A.)
1.70%, 12/01/23(b)(c) A-1+ -- 5,850 5,850,000
- -------------------------------------------------------------------------------------------
Sanpete (County of) School Facilities
(Wasatch Academy);
VRD Series 2003 RB (LOC-U.S. Bank N.A.)
1.76%, 08/01/28(b)(c) A-1+ -- 900 900,000
===========================================================================================
42,804,763
===========================================================================================
VERMONT-0.22%
Vermont (State of) Student Assistance Corp.;
Student Loan VRD Series 1985 RB (LOC-State
Street Bank & Trust Co.)
1.35%, 01/01/08(b)(j) -- VMIG-1 2,640 2,640,000
- -------------------------------------------------------------------------------------------
Vermont (State of); Unlimited Tax Series 1994
A GO
6.40%, 01/15/05(g)(l) NRR NRR 3,510 3,632,758
===========================================================================================
6,272,758
===========================================================================================
VIRGINIA-0.82%
Chesapeake (City of) Hospital Authority
(Chesapeake General Hospital); Hospital
Facility VRD Series 2001 B RB
(LOC-SunTrust Bank)
1.69%, 07/01/31(b)(c) A-1+ -- 1,545 1,545,000
- -------------------------------------------------------------------------------------------
Henrico (County of) Economic Development
Authority
(Westminster Centerbury); Residential Care
Facilities
VRD Series 2003 B RB (LOC-KBC Bank N.V.)
1.69%, 07/01/08(b)(c) -- VMIG-1 17,100 17,100,000
- -------------------------------------------------------------------------------------------
Richmond (City of) Industrial Development
Authority;
Educational Facilities VRD Series 2002 RB
(LOC-SunTrust Bank)
1.70%, 05/01/32(b)(c) -- VMIG-1 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Rockingham (County of) Industrial Development
Authority (Sunnyside Presbyterian Home);
Residential Care Facilities VRD Series 2003
RB (LOC-Branch Banking & Trust)
1.72%, 12/01/33(b)(c) A-1 -- 750 750,000
- -------------------------------------------------------------------------------------------
</Table>
F-34
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
VIRGINIA-(CONTINUED)
Winchester (City of) Industrial Development
Authority (Shenandoah University);
Educational Facilities First Mortgage
Series 1994 IDR
6.70%, 10/01/04(g)(l) NRR NRR $ 1,620 $ 1,652,400
===========================================================================================
23,947,400
===========================================================================================
WASHINGTON-5.39%
ABN AMRO Munitops Ctfs. Trust (City of
Seattle Municipal Light & Power);
Multi-State Non-AMT VRD Series 2002-12
Ctfs. (Acquired 05/25/04; Cost $9,755,000)
1.75%, 03/01/09(c)(d)(e) -- VMIG-1 9,755 9,755,000
- -------------------------------------------------------------------------------------------
ABN AMRO Munitops Ctfs. Trust (City of
Seattle);
Multi-State Non-AMT VRD Limited Tax Series
2003-7 GO Ctfs.
(Acquired 05/13/03; Cost $10,685,000)
1.34%, 11/17/04(d)(e)(g)(i)(k)(n) -- -- 10,685 10,685,000
- -------------------------------------------------------------------------------------------
ABN AMRO Munitops Ctfs. Trust (King County);
Multi-State Non-AMT VRD Limited Tax Series
2001-1 GO Ctfs.
(Acquired 01/04/01; Cost $10,000,000)
1.75%, 07/01/06(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Bremerton (City of) (Kitsap Regional
Conference Center);
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.75%, 12/01/28(b)(c)(i) -- -- 2,565 2,565,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Washington
Public Power Supply Systems Project No. 2);
VRD Series 96-4703 Class A COP (Acquired
05/02/01; Cost $5,870,000)
1.75%, 07/01/11(c)(d)(e) A-1+ -- 5,870 5,870,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Washington);
VRD Series 98-4701 Class A COP (Acquired
07/20/00; Cost $14,400,000)
1.75%, 05/01/18(c)(d)(e) A-1+ -- 14,400 14,400,000
- -------------------------------------------------------------------------------------------
Everett (City of) Public Facilities District;
Commercial Paper TRAN (LOC-Bank of America
N.A.)
1.00%, 10/26/04(b) A-1+ -- 4,300 4,300,000
- -------------------------------------------------------------------------------------------
Everett (City of) Public Facilities District;
Commercial Paper Notes (LOC-Bank of America
N.A.)
1.00%, 10/26/04(b) A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Everett (City of); VRD Limited Tax Series
2001 GO
(LOC-Bank of America N.A.)
1.75%, 12/01/21(b)(c)(i) -- -- 2,600 2,600,000
- -------------------------------------------------------------------------------------------
Issaquah (City of) Community Properties; VRD
Special Revenue Series 2001 A RB (LOC-Bank
of America N.A.)
1.73%, 02/15/21(b)(c) -- VMIG-1 10,150 10,150,000
- -------------------------------------------------------------------------------------------
King & Snohomish (Counties of) School
District No. 417 (Northshore); Unlimited
Tax Series 2003 GO
2.00%, 12/01/04(f) AAA Aaa 3,300 3,304,792
- -------------------------------------------------------------------------------------------
</Table>
F-35
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
King (County of) Economic Enterprise Corp.
(Puget Sound Blood Center Project);
VRD Series 1998 RB (LOC-U.S. Bank N.A.)
1.74%, 04/01/23(b)(c) -- VMIG-1 $ 3,810 $ 3,810,000
- -------------------------------------------------------------------------------------------
Lake Tapps Parkway Properties; Special
Revenue VRD
(LOC-U.S. Bank N.A.)
Series 1999 A RB
1.73%, 12/01/19(b)(c) -- VMIG-1 11,800 11,800,000
- -------------------------------------------------------------------------------------------
Series 1999 B RB
1.73%, 12/01/19(b)(c) -- VMIG-1 700 700,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(Port of Seattle);
VRD Series 2002-739D RB (Acquired 07/21/04;
Cost $5,000,000)
1.73%, 09/01/20(c)(d)(e) A-1 -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Pierce (County of) Economic Development Corp.
(Weyerhaeuser Real Estate); Special Revenue
VRD Series 1997 RB
(LOC-Bank of America N.A.)
1.73%, 01/01/27(b)(c) A-1+ VMIG-1 12,705 12,705,000
- -------------------------------------------------------------------------------------------
Seattle (Port of) Industrial Development
Corp. (Sysco Food Services Project);
Refunding VRD Series 1994 IDR
1.72%, 11/01/25(c) A-1+ VMIG-1 8,000 8,000,000
- -------------------------------------------------------------------------------------------
Seattle (City of) Housing Authority (Bayview
Manor Project);
Low Income Housing Assistance VRD Series
1994 B RB
(LOC-U.S. Bank N.A.)
1.74%, 05/01/19(b)(c) A-1+ -- 2,340 2,340,000
- -------------------------------------------------------------------------------------------
Seattle (City of) Housing Authority (Pioneer
Human Services Project); Refunding VRD
Series 1995 RB (LOC-U.S. Bank N.A.)
1.74%, 12/01/15(b)(c) A-1+ -- 1,975 1,975,000
- -------------------------------------------------------------------------------------------
Snohomish (County of) Housing Authority (Ebey
Arms Centerhouse Project); Refunding
Housing VRD Series 2003 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/34(b)(c)(i) -- -- 6,245 6,245,000
- -------------------------------------------------------------------------------------------
Vancouver (City of) Housing Authority
(Village Park Apartments Project); Housing
VRD Series 2000 RB (LOC-U.S. Bank N.A.)
1.73%, 11/02/05(b)(c) A-1+ -- 1,430 1,430,000
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (Central Puget Sound
Regional Transit Authority); Sales Tax &
Motor VRD Series 2001 A46 RB
(Acquired 11/12/03; Cost $6,275,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 6,275 6,275,000
- -------------------------------------------------------------------------------------------
Washington (State of) Economic Development
Finance Authority (Seadrunar Recycling LLC
Project); Economic Development VRD Series
2000 E RB (LOC-U.S. Bank N.A.)
1.74%, 08/01/25(b)(c) A-1+ -- 2,735 2,735,000
- -------------------------------------------------------------------------------------------
Washington (State of) Health Care Facilities
Authority
(Empire Health Services); VRD Series 2003
RB
(LOC-U.S. Bank N.A.)
1.65%, 11/01/23(b)(c) A-1+ -- 2,335 2,335,000
- -------------------------------------------------------------------------------------------
</Table>
F-36
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
Washington (State of) Higher Education
Facilities Authority
(Cornish College Arts Project); VRD Series
2003 A RB
(LOC-Bank of America N.A.)
1.73%, 12/01/33(b)(c) -- VMIG-1 $ 5,000 $ 5,000,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (Nikkei Concerns Project);
Non-Profit Housing VRD Series 1994 RB
(LOC-U.S. Bank N.A.)
1.74%, 10/01/19(b)(c) A-1+ -- 3,755 3,755,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (Tacoma Art Museum Project);
Non-Profit VRD Series 2002 RB
(LOC-Northern Trust Co.)
1.77%, 06/01/32(b)(m) -- VMIG-1 1,225 1,225,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (University Preparatory Academy
Project); Non-Profit VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.75%, 07/01/30(b)(c) -- VMIG-1 1,250 1,250,000
===========================================================================================
157,209,792
===========================================================================================
WEST VIRGINIA-0.35%
Monongalia (County of) Building Community
Hospital (Monongalia General Hospital);
Refunding VRD Series 2002 A RB
(LOC-JPMorgan Chase Bank)
1.72%, 07/01/17(b)(c) A-1 VMIG-1 645 645,000
- -------------------------------------------------------------------------------------------
West Virginia (State of) Hospital Finance
Authority (Cabell Huntington); Refunding
VRD Series 2002 A-1 RB
(LOC-JPMorgan Chase Bank)
1.67%, 06/01/13(b)(c) -- VMIG-1 9,495 9,495,000
===========================================================================================
10,140,000
===========================================================================================
WISCONSIN-3.44%
Kimberly (City of) (Fox Cities YMCA Project);
VRD Series 2002 RB
(LOC-M&I Marshall & Ilsley Bank)
1.75%, 04/01/32(b)(c) -- VMIG-1 2,540 2,540,000
- -------------------------------------------------------------------------------------------
Menomonee Falls (City of); Refunding Sewer
System Series 2004 RB
2.00%, 05/01/05(f) -- Aaa 1,425 1,429,517
- -------------------------------------------------------------------------------------------
Waukesha (County of); Promissory Notes
Unlimited Tax Series 2004 GO
2.00%, 04/01/05 -- Aaa 1,500 1,507,192
- -------------------------------------------------------------------------------------------
Wind Point (City of) (Johnson Foundation
Project);
VRD Series 2000 RB (LOC-Bank of Montreal)
1.80%, 09/01/35(b)(c) A-1+ -- 4,665 4,665,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Beaver Dam Community
Hospitals Inc.); VRD Series 2004 B RB
(LOC-U.S. Bank N.A.)
1.69%, 08/15/34(b)(c) A-1+ -- 3,000 3,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-37
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WISCONSIN-(CONTINUED)
Wisconsin (State of) Health & Educational
Facilities Authority (Mequon Jewish
Project); VRD Series 2003 RB
(LOC-JPMorgan Chase Bank)
1.73%, 07/01/28(b)(c) -- VMIG-1 $ 2,150 $ 2,150,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(Mercy Health System); (LOC-M&I Marshall &
Ilsley Bank)
Pooled Loan VRD Series 2003 I RB
1.70%, 06/01/23(b)(c) -- VMIG-1 9,570 9,570,000
- -------------------------------------------------------------------------------------------
VRD Series 2003 C RB
1.72%, 08/15/23(b)(c) -- VMIG-1 7,300 7,300,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. John's Home); Pooled Loan VRD Series
2003 J RB
(LOC-M&I Marshall & Ilsley Bank)
1.70%, 07/01/23(b)(c) -- VMIG-1 4,250 4,250,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. Luke's Medical Center); VRD Series
1987 RB
(LOC-KBC Bank N.V.) (Acquired 06/01/04;
Cost $30,000,000)
1.70%, 12/01/17(b)(c)(d) A-1 -- 30,000 30,000,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. Mary's School); VRD Series 2004 RB
(LOC-M&I Marshall & Ilsley Bank)
1.72%, 08/01/19(b)(c) A-1 -- 2,695 2,695,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(Sinai Samaritan Medical Center Inc.); VRD
Series 1994 A RB
(LOC-M&I Marshall & Ilsley Bank)
1.75%, 09/01/19(b)(c) A-1 -- 5,649 5,649,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Wheaton Franciscan
Services); VRD Series 2003 B RB
(LOC-U.S. Bank N.A.)
1.69%, 08/15/33(b)(c) A-1+ VMIG-1 8,750 8,750,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) School Districts Cash
Flow Management Program;
Series 2003 B-1 COP
2.00%, 11/01/04 -- MIG-1 5,565 5,568,956
- -------------------------------------------------------------------------------------------
Series 2004 A-1 COP
3.00%, 09/20/05(o) -- -- 8,000 8,100,676
- -------------------------------------------------------------------------------------------
Wisconsin (State of); Unlimited Tax Series
1995 A GO
6.10%, 05/01/05(g)(l) NRR Aaa 3,000 3,087,881
===========================================================================================
100,263,222
===========================================================================================
Total Municipal Obligations (Cost
$2,926,404,421) 2,926,404,421
===========================================================================================
TOTAL INVESTMENTS-100.40% (Cost
$2,926,404,421)(p) 2,926,404,421
===========================================================================================
OTHER ASSETS LESS LIABILITIES-(0.40%) (11,669,927)
===========================================================================================
NET ASSETS-100.00% $2,914,734,494
___________________________________________________________________________________________
===========================================================================================
</Table>
F-38
Investment Abbreviations:
<Table>
ACES - Automatically Convertible Extendable Security
AMT - Alternative Minimum Tax
BAN - Bond Anticipation Notes
CEP - Credit Enhancement Provider
COP - Certificate of Participation
Ctfs - Certificates
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
Jr. - Junior
LOC - Letter of Credit
MERLOT - Municipal Exempt Receipts Liquidity Optional Tender
NRR - Not Re-Rated
P-Floats - Puttable Floating Option Tax-Exempt Receipts
PCR - Pollution Control Revenue Bonds
PUTTERS - Putable Tax Exempt Receipts
RAN - Revenue Anticipation Notes
RB - Revenue Bonds
RN - Revenue Notes
Sub. - Subordinated
TAN - Tax Anticipation Notes
TRAN - Tax and Revenue Anticipation Notes
VRD - Variable Rate Demand
Wts. - Warrants
</Table>
Notes to Schedule of Investments:
(a) Ratings assigned by Standard & Poor's Corporation ("S&P") and Moody's
Investors Service, Inc. ("Moody's"), except as indicated in note (i) and (o)
below. NRR indicates a security that is not re-rated subsequent to funding
of an escrow fund (consisting of U.S. Treasury obligations held by a bank
custodian); this funding is pursuant to an advance refunding of this
security.
(b) Principal and interest payments are fully enhanced by a letter of credit
from the bank listed or a predecessor bank, branch or subsidiary.
(c) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined weekly. Rate
shown is the rate in effect on September 30, 2004.
(d) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at September 30, 2004 was
$691,199,000, which represented 23.71% of the Fund's net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(e) Synthetic municipal instruments; involves the deposit into a trust of one or
more long-term tax-exempt bonds or notes ("Underlying Bonds"), a sale of
certificates evidencing interests in the trust to investors such as the
Fund. The trustee receives the long-term fixed interest payments on the
Underlying Bonds, and pays certificate holders variable rate interest
payments based upon a short-term reset periodically.
(f) Principal and interest payments are secured by bond insurance provided by
one of the following companies: Ambac Assurance Corp., Financial Guaranty
Insurance Co., Financial Security Assurance Inc., or MBIA Insurance Corp.
F-39
(g) Security has an irrevocable call or mandatory put by the issuer. Maturity
date reflects such call or put.
(h) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined
semi-annually. Rate shown is the rate in effect on September 30, 2004.
(i) Security is not rated by S&P or by Moody's; however it is rated by Fitch
IBCA ("Fitch") of F1+.
(j) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined monthly. Rate
shown is the rate in effect on September 30, 2004.
(k) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined at
intermittent intervals. Rate shown is the rate in effect on September 30,
2004.
(l) Advance refunded; secured by an escrow fund of U.S. Treasury obligations.
(m) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined daily. Rate
shown is the rate in effect on September 30, 2004.
(n) Security considered to be illiquid. The aggregate market value of these
securities considered illiquid at September 30, 2004 was $38,920,000, which
represented 1.34% of the Fund's net assets.
(o) Determined by the investment advisor to be of comparable quality to the
rated securities in which the Fund may invest, pursuant to guidelines for
the determination of quality adopted by the Board of Trustees and followed
by the investment advisor.
(p) Also represents cost for federal income tax purposes.
See accompanying notes which are an integral part of the financial statements.
F-40
STATEMENT OF ASSETS & LIABILITIES
September 30, 2004
(Unaudited)
<Table>
ASSETS:
Investments, at market value
(cost $2,926,404,421) $2,926,404,421
- ---------------------------------------------
Cash 697,925
- ---------------------------------------------
Receivables for:
Investments sold 4,895,235
- ---------------------------------------------
Interest 8,879,674
- ---------------------------------------------
Investment for trustee
deferred compensation and
retirement plans 136,908
- ---------------------------------------------
Other assets 190,315
=============================================
Total assets 2,941,204,478
_____________________________________________
=============================================
LIABILITIES:
Payables for:
Investments purchased 23,240,918
- ---------------------------------------------
Dividends 2,730,970
- ---------------------------------------------
Trustee deferred
compensation and
retirement plans 215,380
- ---------------------------------------------
Accrued distribution fees 131,402
- ---------------------------------------------
Accrued transfer agent fees 91,843
- ---------------------------------------------
Accrued trustees fees 1,095
- ---------------------------------------------
Accrued operating expenses 58,376
=============================================
Total liabilities 26,469,984
=============================================
Net assets applicable to
shares outstanding $2,914,734,494
_____________________________________________
=============================================
NET ASSETS CONSIST OF:
Shares of beneficial
interest $2,914,752,505
- ---------------------------------------------
Undistributed net realized
gain (loss) from
investment securities (18,011)
=============================================
$2,914,734,494
_____________________________________________
=============================================
NET ASSETS:
Institutional Class $1,671,593,521
_____________________________________________
=============================================
Private Investment Class $ 190,301,672
_____________________________________________
=============================================
Personal Investment Class $ 9,273,444
_____________________________________________
=============================================
Cash Management Class $ 796,326,655
_____________________________________________
=============================================
Reserve Class $ 11,062,666
_____________________________________________
=============================================
Resource Class $ 236,176,536
_____________________________________________
=============================================
SHARES OUTSTANDING,
$0.001 PAR VALUE PER SHARE,
UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Institutional Class 1,671,550,863
_____________________________________________
=============================================
Private Investment Class 190,288,610
_____________________________________________
=============================================
Personal Investment Class 9,270,510
_____________________________________________
=============================================
Cash Management Class 796,322,561
_____________________________________________
=============================================
Reserve Class 11,060,717
_____________________________________________
=============================================
Resource Class 236,175,751
_____________________________________________
=============================================
Net asset value, offering and
redemption price per share
for each class $ 1.00
_____________________________________________
=============================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-41
STATEMENT OF OPERATIONS
For the six months ended September 30, 2004
(Unaudited)
<Table>
INVESTMENT INCOME:
Interest $17,235,533
=========================================================================
EXPENSES:
Advisory fees 3,131,846
- -------------------------------------------------------------------------
Administrative services fees 295,697
- -------------------------------------------------------------------------
Custodian fees 38,978
- -------------------------------------------------------------------------
Distribution fees:
Private Investment Class 404,301
- -------------------------------------------------------------------------
Personal Investment Class 40,938
- -------------------------------------------------------------------------
Cash Management Class 334,772
- -------------------------------------------------------------------------
Reserve Class 50,510
- -------------------------------------------------------------------------
Resource Class 266,654
- -------------------------------------------------------------------------
Transfer agent fees 231,258
- -------------------------------------------------------------------------
Trustees' fees and retirement benefits 29,952
- -------------------------------------------------------------------------
Other 317,825
=========================================================================
Total expenses 5,142,731
=========================================================================
Less: Fees waived (1,065,457)
=========================================================================
Net expenses 4,077,274
=========================================================================
Net investment income 13,158,259
=========================================================================
Net realized gain (loss) from investment securities (17,079)
=========================================================================
Net increase in net assets resulting from operations $13,141,180
_________________________________________________________________________
=========================================================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-42
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 2004 and the year ended March 31, 2004
(Unaudited)
<Table>
<Caption>
SEPTEMBER 30, MARCH 31,
2004 2004
- --------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 13,158,259 $ 22,690,885
- --------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities (17,079) 40,841
============================================================================================
Net increase in net assets resulting from operations 13,141,180 22,731,726
============================================================================================
Distributions to shareholders from net investment income:
Institutional Class (8,710,440) (14,405,472)
- --------------------------------------------------------------------------------------------
Private Investment Class (555,715) (1,230,193)
- --------------------------------------------------------------------------------------------
Personal Investment Class (20,320) (37,490)
- --------------------------------------------------------------------------------------------
Cash Management Class (2,854,661) (5,040,826)
- --------------------------------------------------------------------------------------------
Reserve Class (4,673) (8,425)
- --------------------------------------------------------------------------------------------
Resource Class (1,012,450) (1,968,479)
============================================================================================
Decrease in net assets resulting from distributions (13,158,259) (22,690,885)
============================================================================================
Share transactions-net:
Institutional Class (282,164,384) 632,519,818
- --------------------------------------------------------------------------------------------
Private Investment Class 39,903,203 (77,436,378)
- --------------------------------------------------------------------------------------------
Personal Investment Class (1,120,107) (6,598,054)
- --------------------------------------------------------------------------------------------
Cash Management Class 28,190,366 150,447,508
- --------------------------------------------------------------------------------------------
Reserve Class (2,966,860) 1,376,091
- --------------------------------------------------------------------------------------------
Resource Class (63,027,459) 39,025,099
============================================================================================
Net increase (decrease) in net assets resulting from
share transactions (281,185,241) 739,334,084
============================================================================================
Net increase (decrease) in net assets (281,202,320) 739,374,925
============================================================================================
NET ASSETS:
Beginning of period 3,195,936,814 2,456,561,889
============================================================================================
End of period (including undistributed net investment
income of $0 and $0, respectively) $2,914,734,494 $3,195,936,814
____________________________________________________________________________________________
============================================================================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-43
NOTES TO FINANCIAL STATEMENTS
September 30, 2004
(Unaudited)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
Tax-Free Investments Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Trust is organized as a Delaware statutory
trust consisting of one portfolio, the Tax-Free Cash Reserve Portfolio (the
"Fund"). The Fund currently offers multiple classes of shares. Matters affecting
each class are voted on exclusively by the shareholders of each class. The
Fund's investment objective is to provide as high a level of tax-exempt income
as is consistent with the preservation of capital and maintenance of liquidity.
On November 4, 2003, the Fund was restructured from a separate series of
Tax-Free Investments Co. to a new series portfolio of the Trust.
Under the Trust's organizational documents, the Fund's officers, trustees,
employees and agents are indemnified against certain liabilities that may arise
out of performance of their duties to the Fund. Additionally, in the normal
course of business, the Fund enters into contracts that contain a variety of
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, the Fund has not had prior claims or losses
pursuant to these contracts.
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 at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted by Rule 2a-7
under the 1940 Act. This method values a security at its cost on the date
of purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities.' Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
F-44
The Fund allocates realized and unrealized capital gains and losses to a
class based on the relative net assets of each class. The Fund allocates
income to a class based on the relative value of the settled shares of each
class.
C. DISTRIBUTIONS -- Distributions from income are declared daily and paid
monthly. Distributions from net realized capital gain, if any, are
generally paid annually and recorded on ex-dividend date. The Fund may
elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and, as such, will not be subject to federal
income taxes on otherwise taxable income (including net realized capital
gain) which is distributed to shareholders. Therefore, no provision for
federal income taxes is recorded in the financial statements.
In addition, the Fund intends to invest in securities to allow it to
qualify to pay shareholders "exempt interest dividends", as defined in the
Internal Revenue Code of 1986, as amended.
E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.25% of the first
$500 million of the Fund's average daily net assets plus 0.20% of the Fund's
average daily net assets in excess of $500 million. AIM has voluntarily agreed
to waive advisory fees and/or reimburse expenses to the extent necessary to
limit Total Annual Fund Operating Expenses (excluding certain items discussed
below) to 0.22%. In determining the advisor's obligation to waive advisory fees
and/or reimburse expenses, the following expenses are not taken into account,
and could cause the Total Annual Fund Operating Expenses to exceed the cap
stated above: (i) Rule 12b-1 plan fees, if any; (ii) interest; (iii) taxes; (iv)
dividend expense on short sales; (v) extraordinary items (these are expenses
that are not anticipated to arise from the Fund's day-to-day operations), or
items designated as such by the Fund's Board of Trustees; (vi) expenses related
to a merger or reorganization, as approved by the Fund's Board of Trustees;
(vii) expenses that the Fund has incurred but did not actually pay because of an
expense offset arrangement; (viii) trustees' fees; and (ix) federal registration
fees. Currently, the only expense offset arrangements from which the Fund
benefits are in the form of credits that the Fund receives from banks where the
Fund or its transfer agent has deposit accounts in which it holds uninvested
cash. Those credits are used to pay certain expenses incurred by the Fund.
Voluntary fee waivers or reimbursements may be modified or discontinued at any
time upon consultation with the Board of Trustees without further notice to
investors. To the extent that the annualized expense ratio does not exceed the
expense limitation, AIM will retain its ability to be reimbursed for such fee
waivers or reimbursements prior to the end of each fiscal year. For the six
months ended September 30, 2004, AIM waived fees of $723,330.
The Trust, pursuant to a master administrative services agreement with AIM,
has agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended September 30, 2004,
AIM was paid $295,697 for such services.
The Trust, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the six months ended
September 30, 2004, AISI retained $225,258 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Trust, FMC acts as the exclusive distributor of the
Fund's shares. The Fund has adopted a master distribution
F-45
plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's
Private Investment Class, Personal Investment Class, Cash Management Class,
Reserve Class and Resource Class (the "Plan"). The Plan provides that the
Private Investment Class, the Personal Investment Class, the Cash Management
Class, the Reserve Class and the Resource Class pay up to the maximum annual
rate of 0.50%, 0.75%, 0.10%, 1.00% and 0.20%, respectively, of the average daily
net assets attributable to such class. Of this amount, up to 0.25% of the
average daily net assets of each class may be paid to furnish continuing
personal shareholder services to customers who purchase and own shares of the
such classes. Any amounts not paid as a service fee under such Plan would
constitute an asset-based sales charge. NASD Rules also impose a cap on the
total amount of sales charges, including asset-based sales charges, that may be
paid by any class of shares of the Fund. Currently, FMC has elected to waive a
portion of its compensation payable by the Fund such that compensation paid
pursuant to the Plan with respect to the Private Investment Class, the Personal
Investment Class, the Cash Management Class, the Reserve Class and the Resource
Class equals the maximum annual rate of 0.25%, 0.55%, 0.08%, 0.87% and 0.16%,
respectively, of the average daily net assets attributable to such class.
Further, FMC voluntarily waived additional Rule 12b-1 plan fees for the Reserve
Class during the year in order to increase the yield. Waivers may be modified or
discontinued at any time. Pursuant to the Plan, for the six months ended
September 30, 2004, the Private Investment Class, the Personal Investment Class,
the Cash Management Class, the Reserve Class and the Resource Class paid
$202,150, $30,021, $267,818, $41,736 and $213,323, respectively, after FMC
waived Plan fees of $202,151, $10,917, $66,954, $8,774 and $53,331,
respectively.
Certain officers and trustees of the Trust are officers and directors of
AIM, FMC and/or AISI.
NOTE 3--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM and INVESCO Funds under specified conditions outlined in procedures adopted
by the Board of Trustees of the Trust. The procedures have been designed to
ensure that any purchase or sale of securities by the Fund from or to another
fund or portfolio that is or could be considered an affiliate by virtue of
having a common investment advisor (or affiliated investment advisors), common
Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act.
Further, as defined under the procedures each transaction is effected at the
current market price. Pursuant to these procedures, during the six months ended
September 30, 2004, the Fund engaged in purchases and sales of securities of $0
and $27,058,780, respectively.
NOTE 4--TRUSTEES' FEES
Trustees' fees represent remuneration paid to each Trustee of the Trust who is
not an "interested person" of AIM. Trustees have the option to defer
compensation payable by the Trust. Those Trustees who defer compensation have
the option to select various AIM Funds and INVESCO Funds in which their deferral
accounts shall be deemed to be invested.
Current Trustees are eligible to participate in a retirement plan that
provides for benefits to be paid upon retirement to Trustees over a period of
time based on the number of years of service. The Fund may have certain former
Trustees that also participate in a retirement plan and receive benefits under
such plan.
Obligations under the deferred compensation and retirement plans represent
unsecured claims against the general assets of the Fund.
During the six months ended September 30, 2004, the Fund paid legal fees of
$5,068 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel
to the Independent Trustees. A member of that firm is a Trustee of the Trust.
F-46
NOTE 5--BORROWINGS
Pursuant to an exemptive order from the SEC, the Fund may participate in an
interfund lending facility that AIM has established for temporary borrowings by
the AIM Funds and the INVESCO Funds. An interfund loan will be made under this
facility only if the loan rate (an average of the rate available on bank loans
and the rate available on investments in overnight repurchase agreements) is
favorable to both the lending fund and the borrowing fund. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. To the extent that the loan is required
to be secured by collateral, the collateral is marked to market daily to ensure
that the market value is at least 102% of the outstanding principal value of the
loan. The Fund did not borrow or lend under the facility during the six months
ended September 30, 2004.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with The Bank of New York, the custodian bank.
To compensate the custodian bank for such overdrafts, the overdrawn Fund may
either (i) leave funds in the account so the custodian can be compensated by
earning the additional interest; or (ii) compensate by paying the custodian
bank. In either case, the custodian bank will be compensated at an amount equal
to the Federal Funds rate plus 100 basis points.
NOTE 6--TAX INFORMATION
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforward) under income tax regulations. The tax character of
distributions paid during the year and the tax components of net assets will be
reported at the Fund's fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions.
The Fund had a capital loss carryforward as of March 31, 2004 which expires
as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------
March 31, 2011 $933
_____________________________________________________________________________
=============================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
F-47
NOTE 7--SHARE INFORMATION
The Fund currently offers six different classes of shares: Institutional Class,
Private Investment Class, Personal Investment Class, Cash Management Class,
Reserve Class and Resource Class.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING(A)
- ---------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2004 MARCH 31, 2004
--------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
Sold:
Institutional Class 8,676,342,046 $ 8,676,342,046 13,446,683,719 $ 13,446,683,719
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 217,524,346 217,524,346 489,285,624 489,285,624
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class 20,166,779 20,166,779 26,756,133 26,756,133
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 2,908,837,254 2,908,837,254 5,641,820,633 5,641,820,633
- ---------------------------------------------------------------------------------------------------------
Reserve Class 77,269,739 77,269,739 156,764,612 156,764,612
- ---------------------------------------------------------------------------------------------------------
Resource Class 732,494,862 732,494,862 1,508,376,051 1,508,376,051
=========================================================================================================
Issued as reinvestment of
dividends:
Institutional Class 5,177,367 5,177,367 7,301,226 7,301,226
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 318,170 318,170 737,747 737,747
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class 2,442 2,442 4,054 4,054
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 1,846,071 1,846,071 4,115,815 4,115,815
- ---------------------------------------------------------------------------------------------------------
Reserve Class 2,986 2,986 8,921 8,921
- ---------------------------------------------------------------------------------------------------------
Resource Class 936,355 936,355 1,860,224 1,860,224
=========================================================================================================
Reacquired:
Institutional Class (8,963,683,797) (8,963,683,797) (12,821,465,127) (12,821,465,127)
- ---------------------------------------------------------------------------------------------------------
Private Investment Class (177,939,313) (177,939,313) (567,459,749) (567,459,749)
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class (21,289,328) (21,289,328) (33,358,241) (33,358,241)
- ---------------------------------------------------------------------------------------------------------
Cash Management Class (2,882,492,959) (2,882,492,959) (5,495,488,940) (5,495,488,940)
- ---------------------------------------------------------------------------------------------------------
Reserve Class (80,239,585) (80,239,585) (155,397,442) (155,397,442)
- ---------------------------------------------------------------------------------------------------------
Resource Class (796,458,676) (796,458,676) (1,471,211,176) (1,471,211,176)
=========================================================================================================
(281,185,241) $ (281,185,241) 739,334,084 $ 739,334,084
_________________________________________________________________________________________________________
=========================================================================================================
</Table>
(a) There are two entities that are each record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate they own 50% of the
outstanding shares of the Fund. The Fund's principle underwriter may have an
agreement with these entities to sell Fund shares. The Fund, AIM and/or AIM
affiliates may make payments to these entities, which are considered to be
related to the Fund, for providing services to the Fund, AIM and/or AIM
affiliates including but not limited to services such as, securities
brokerage, distribution, third party record keeping and account servicing.
The Trust has no knowledge as to whether all or any portion of the shares
owned of record by these shareholders are also owned beneficially.
F-48
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
CASH MANAGEMENT CLASS
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, -------------------------------------------------
2004 2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.004 0.01 0.01 0.02 0.04 0.03
=======================================================================================================
Less distributions from net
investment income (0.004) (0.01) (0.01) (0.02) (0.04) (0.03)
=======================================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_______________________________________________________________________________________________________
=======================================================================================================
Total return(a) 0.42% 0.76% 1.14% 2.08% 3.87% 3.23%
_______________________________________________________________________________________________________
=======================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $796,327 $768,141 $617,683 $320,502 $15,668 $6,178
_______________________________________________________________________________________________________
=======================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 0.30%(b) 0.30% 0.30% 0.30% 0.28% 0.28%
- -------------------------------------------------------------------------------------------------------
Without fee waivers 0.37%(b) 0.37% 0.37% 0.38% 0.39% 0.39%
_______________________________________________________________________________________________________
=======================================================================================================
Ratio of net investment income to
average net assets 0.85%(b) 0.75% 1.12% 1.92% 3.76% 3.17%
_______________________________________________________________________________________________________
=======================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and is not annualized for periods
less than one year.
(b) Ratios are annualized and based on average daily net assets of
$667,706,086.
F-49
NOTE 9--LEGAL PROCEEDINGS
Terms used in this Legal Proceedings Note are defined terms solely for the
purpose of this note.
The mutual fund industry as a whole is currently subject to regulatory
inquiries and litigation related to a wide range of issues. These issues
include, among others, market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders.
As described more fully below, INVESCO Funds Group, Inc. ("IFG"), the former
investment advisor to certain AIM Funds, A I M Advisors, Inc. ("AIM"), the
Fund's investment advisor, and A I M Distributors, Inc. ("ADI"), the distributor
of the retail AIM Funds and a wholly owned subsidiary of AIM, reached final
settlements with the Securities and Exchange Commission ("SEC"), the New York
Attorney General ("NYAG"), the Colorado Attorney General ("COAG"), the Colorado
Division of Securities ("CODS") and the Secretary of State of the State of
Georgia to resolve civil enforcement actions and investigations related to
market timing activity and related issues in the AIM Funds, including those
formerly advised by IFG.
In addition, as described more fully below, IFG and AIM are the subject of a
number of ongoing regulatory inquiries and civil lawsuits related to one or more
of the issues currently being scrutinized by various Federal and state
regulators, including but not limited to those issues described above.
Additional regulatory actions and/or civil lawsuits related to the above or
other issues may be filed against the AIM Funds, IFG, AIM and/or related
entities and individuals in the future. Additional regulatory inquiries related
to the above or other issues also may be received by the AIM Funds, IFG, AIM
and/or related entities and individuals in the future.
As a result of the matters discussed below, investors in the AIM Funds might
react by redeeming their investments. This might require the Funds to sell
investments to provide for sufficient liquidity and could also have an adverse
effect on the investment performance of the Funds.
Settled Enforcement Actions and Investigations Related to Market Timing
On October 8, 2004, AMVESCAP PLC ("AMVESCAP"), the parent company of IFG and
AIM, announced that final settlements had been reached with the SEC, the NYAG,
the COAG and the Secretary of State of Georgia to resolve civil enforcement
actions and investigations related to market timing activity and related issues
in the AIM Funds, including those formerly advised by IFG. A final settlement
also has been reached with the Colorado Division of Securities ("CODS") with
respect to this matter. In their enforcement actions and investigations, these
regulators alleged, in substance, that IFG and AIM failed to disclose in the
prospectuses for the AIM Funds that they advised and to the independent
directors/trustees of such Funds that IFG and AIM had entered into certain
arrangements permitting market timing of such Funds, thereby breaching their
fiduciary duties to such Funds. As a result of the foregoing, the regulators
alleged that IFG, AIM and ADI breached various Federal and state securities,
business and consumer protection laws. Under the terms of the settlements, IFG,
AIM and ADI consent to the entry of settlement orders or assurances of
discontinuance, as applicable, by the regulators containing certain terms, some
of which are described below, without admitting or denying any wrongdoing.
Under the terms of the settlements, IFG agreed to pay a total of $325 million,
of which $110 million is civil penalties. Of the $325 million total payment,
half will be paid on or before December 31, 2004 and the remaining half will be
paid on or before December 31, 2005. AIM and ADI agreed to pay a total of $50
million, of which $30 million is civil penalties. The entire $50 million payment
by AIM and ADI will be paid by November 7, 2004.
The entire $325 million IFG settlement payment will be available for
distribution to the shareholders of those AIM Funds that IFG formerly advised
that were harmed by market timing activity, and the entire $50 million
F-50
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
settlement payment by AIM and ADI will be available for distribution to the
shareholders of those AIM Funds advised by AIM that were harmed by market timing
activity, all as to be determined by an independent distribution consultant to
be appointed under the settlements. The settlement payments will be distributed
in accordance with a methodology to be determined by the independent
distribution consultant, in consultation with AIM and the independent trustees
of the AIM Funds and acceptable to the staff of the SEC.
Under the settlements with the NYAG and COAG, AIM has agreed to reduce
management fees on the AIM Funds by $15 million per year for the next five
years, based upon effective fee rates and assets under management as of July 1,
2004, and not to increase certain management fees. IFG will also pay $1.5
million to the COAG to be used for investor education purposes and to reimburse
the COAG for actual costs. Finally, IFG and AIM will pay $175,000 to the
Secretary of State of Georgia to be used for investor education purposes and to
reimburse the Secretary of State for actual costs.
None of the costs of the settlements will be borne by the AIM Funds or by Fund
shareholders.
Under the terms of the settlements, AIM will make certain governance reforms,
including maintaining an internal controls committee and retaining an
independent compliance consultant, a corporate ombudsman and, as stated above,
an independent distribution consultant. Also, commencing in 2007 and at least
once every other year thereafter, AIM will undergo a compliance review by an
independent third party.
In addition, under the terms of the settlements, AIM has undertaken to cause
the AIM Funds to operate in accordance with certain governance policies and
practices, including retaining a full-time independent senior officer whose
duties will include monitoring compliance and managing the process by which
proposed management fees to be charged the AIM Funds are negotiated. Also,
commencing in 2008 and not less than every fifth calendar year thereafter, the
AIM Funds will hold shareholder meetings at which their Boards of Trustees will
be elected.
On October 8, 2004, the SEC announced that it had settled a market timing
enforcement action against Raymond R. Cunningham, the former president and chief
executive officer of IFG and a former member of the board of directors of the
AIM Funds formerly advised by IFG. As part of the settlement, the SEC ordered
Mr. Cunningham to pay $1 in restitution and civil penalties in the amount of
$500,000. In addition, the SEC prohibited Mr. Cunningham from associating with
an investment advisor, broker, dealer or investment company for a period of two
years and further prohibited him from serving as an officer or director of an
investment advisor, broker, dealer or investment company for a period of five
years.
On August 31, 2004, the SEC announced that it had settled market timing
enforcement actions against Timothy J. Miller, the former chief investment
officer and a former portfolio manager for IFG, Thomas A. Kolbe, the former
national sales manager of IFG, and Michael D. Legoski, a former assistant vice
president in IFG's sales department. As part of the settlements, the SEC ordered
Messrs. Miller, Kolbe and Legoski to pay $1 in restitution each and civil
penalties in the amounts of $150,000, $150,000 and $40,000, respectively. In
addition, the SEC prohibited each of them from associating with an investment
advisor or investment company for a period of one year, prohibited Messrs.
Miller and Kolbe from serving as an officer or director of an investment advisor
or investment company for three years and two years, respectively, and
prohibited Mr. Legoski from associating with a broker or dealer for a period of
one year.
As referenced by the SEC in the SEC's settlement order, one former officer of
ADI and one current officer of AIM (who has taken a voluntary leave of absence)
have received regulatory inquiries in the form of subpoenas or other oral or
written requests for information and/or documents related to market timing
activity in the AIM Funds.
At the direction of the trustees of the AIM Funds, AMVESCAP has agreed to pay
all of the expenses incurred by such Funds related to the market timing
investigations, including expenses incurred in connection with the
F-51
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
regulatory complaints against IFG alleging market timing and the market timing
investigations with respect to IFG and AIM.
The payments made in connection with the above-referenced settlements by IFG,
AIM and ADI will total approximately $375 million (not including AIM's agreement
to reduce management fees on the AIM Funds by $15 million per year for the next
five years, based upon effective fee rates and assets under management as of
July 1, 2004). The manner in which the settlement payments will be distributed
is unknown at the present time and will be determined by an independent
distribution consultant to be appointed under the settlements. Therefore,
management of AIM and the Fund are unable at the present time to estimate the
impact, if any, that the distribution of the settlement amounts may have on the
Fund or whether such distribution will have an impact on the Fund's financial
statements in the future.
At the present time, management of AIM and the Fund are unable to estimate the
impact, if any, that the outcome of the ongoing matters described below may have
on AIM, ADI or the Fund.
Ongoing Regulatory Inquiries Concerning IFG and AIM
IFG, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds formerly advised by IFG have received regulatory
inquiries in the form of subpoenas or other oral or written requests for
information and/or documents related to one or more of the following issues,
some of which concern one or more such Funds: market timing activity, late
trading, fair value pricing, excessive or improper advisory and/or distribution
fees, mutual fund sales practices, including revenue sharing and
directed-brokerage arrangements, and investments in securities of other
registered investment companies. These regulators include the SEC, the NASD,
Inc. ("NASD"), the Florida Department of Financial Services, the Attorney
General of the State of West Virginia, the West Virginia Securities Commission
and the Bureau of Securities of the State of New Jersey. IFG and certain of
these other parties also have received more limited inquiries from the United
States Department of Labor ("DOL") and the United States Attorney's Office for
the Southern District of New York, some of which concern one or more of the AIM
Funds formerly advised by IFG. IFG is providing full cooperation with respect to
these inquiries.
AIM, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds have received regulatory inquiries in the form
of subpoenas or other oral or written requests for information and/or documents
related to one or more of the following issues, some of which concern one or
more AIM Funds: market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders. These regulators include the SEC, the NASD, the
Department of Banking for the State of Connecticut, the Attorney General of the
State of West Virginia, the West Virginia Securities Commission and the Bureau
of Securities of the State of New Jersey. AIM and certain of these other parties
also have received more limited inquiries from the SEC, the NASD, the DOL, the
Internal Revenue Service, the New York Stock Exchange, the United States
Attorney's Office for the Southern District of New York, the United States
Attorney's Office for the Central District of California, the United States
Attorney's Office for the District of Massachusetts, the Massachusetts
Securities Division and the U.S. Postal Inspection Service, some of which
concern one or more AIM Funds. AIM is providing full cooperation with respect to
these inquiries.
Private Civil Actions Alleging Market Timing
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, certain AIM Funds, IFG, AIM, A I M Management Group Inc. ("AIM
Management"), AMVESCAP, certain related entities, certain of their current and
former officers
F-52
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
and/or certain unrelated third parties) making allegations that are similar in
many respects to those in the settled regulatory actions brought by the SEC, the
NYAG and the COAG concerning market timing activity in the AIM Funds. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violation of various provisions of the Federal and state securities laws;
(ii) violation of various provisions of ERISA; (iii) breach of fiduciary duty;
and/or (iv) breach of contract. These lawsuits were initiated in both Federal
and state courts and seek such remedies as compensatory damages; restitution;
injunctive relief; disgorgement of management fees; imposition of a constructive
trust; removal of certain directors and/or employees; various corrective
measures under ERISA; rescission of certain Funds' advisory agreements;
interest; and attorneys' and experts' fees.
All lawsuits based on allegations of market timing, late trading, and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court") for consolidated or coordinated pre-trial
proceedings. Pursuant to an Order of the MDL Court, plaintiffs consolidated
their claims for pre-trial purposes into three amended complaints against
various AIM- and IFG-related parties: (i) a Consolidated Amended Class Action
Complaint purportedly brought on behalf of shareholders of the AIM Funds; (ii) a
Consolidated Amended Fund Derivative Complaint purportedly brought on behalf of
the AIM Funds and fund registrants; and (iii) an Amended Class Action Complaint
for Violations of the Employee Retirement Income Securities Act purportedly
brought on behalf of participants in AMVESCAP's 401(k) plan. Plaintiffs in one
of the underlying lawsuits transferred to the MDL Court continue to seek remand
of their action to state court.
Private Civil Actions Alleging Improper Use of Fair Value Pricing
Multiple civil class action lawsuits have been filed against various parties
(including, depending on the lawsuit, certain AIM Funds, IFG and/or AIM)
alleging that certain AIM Funds inadequately employed fair value pricing. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violations of various provisions of the Federal securities laws; (ii) common
law breach of duty; and (iii) common law negligence and gross negligence. These
lawsuits have been filed in both Federal and state courts and seek such remedies
as compensatory and punitive damages; interest; and attorneys' fees and costs.
Private Civil Actions Alleging Excessive Advisory and/or Distribution Fees
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, INVESCO Institutional (N.A.), Inc., ADI and/or INVESCO
Distributors, Inc.) alleging that the defendants charged excessive advisory
and/or distribution fees and failed to pass on to shareholders the perceived
savings generated by economies of scale. Certain of these lawsuits also allege
that the defendants adopted unlawful distribution plans. These lawsuits allege a
variety of theories of recovery, including but not limited to: (i) violation of
various provisions of the Federal securities laws; (ii) breach of fiduciary
duty; and/or (iii) breach of contract. These lawsuits have been filed in Federal
courts and seek such remedies as damages; injunctive relief; rescission of
certain Funds' advisory agreements and distribution plans; interest; prospective
relief in the form of reduced fees; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Charging of Distribution Fees on Closed
Funds or Share Classes
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, ADI and/or certain of the trustees of the AIM Funds)
alleging that the defendants breached their fiduciary duties by charging
distribution fees while funds and/or specific share classes were closed
generally to new investors and/or while other share classes of the same fund
were not charged the same distribution fees. These lawsuits allege a variety of
theories of recovery, including but not limited to: (i) violation of various
provisions of the Federal securities laws; and (ii) breach of
F-53
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
fiduciary duty. These lawsuits have been filed in Federal courts and seek such
remedies as damages; injunctive relief; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Mutual Fund Sales Practices and
Directed-Brokerage Arrangements
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, AIM Management, IFG, AIM, AIM Investment Services, Inc. and/or
certain of the trustees of the AIM Funds) alleging that the defendants
improperly used the assets of the AIM Funds to pay brokers to aggressively
promote the sale of the AIM Funds over other mutual funds and that the
defendants concealed such payments from investors by disguising them as
brokerage commissions. These lawsuits allege a variety of theories of recovery,
including but not limited to: (i) violation of various provisions of the Federal
securities laws; (ii) breach of fiduciary duty; and (iii) aiding and abetting a
breach of fiduciary duty. These lawsuits have been filed in Federal courts and
seek such remedies as compensatory and punitive damages; rescission of certain
Funds' advisory agreements and distribution plans and recovery of all fees paid;
an accounting of all fund-related fees, commissions and soft dollar payments;
restitution of all unlawfully or discriminatorily obtained fees and charges; and
attorneys' and experts' fees.
F-54
<Table>
TRUSTEES TAX-FREE
Bruce L. Crockett, Chair Robert H. Graham INVESTMENTS TRUST
Bob R. Baker Gerald J. Lewis (TFIT)
Frank S. Bayley Prema Mathai-Davis
James T. Bunch Lewis F. Pennock TAX-FREE
Albert R. Dowden Ruth H. Quigley CASH RESERVE
Edward K. Dunn, Jr. Louis S. Sklar PORTFOLIO
Jack M. Fields Larry Soll, Ph.D.
Carl Frischling Mark H. Williamson INSTITUTIONAL
CLASS
OFFICERS
Robert H. Graham President Semi-
Mark H. Williamson Executive Vice President Annual
Lisa O. Brinkley Sr. Vice President and Chief Compliance Officer Report
Kevin M. Carome Senior Vice President, Secretary & Chief Legal Officer
Sidney M. Dilgren Vice President & Treasurer September 30, 2004
Stuart W. Coco Vice President
Karen Dunn Kelley Vice President
Edgar M. Larsen Vice President
INVESTMENT ADVISOR
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
DISTRIBUTOR
Fund Management Company
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
CUSTODIAN
The Bank of New York
2 Hanson Place
Brooklyn, NY 11217-1431
COUNSEL TO THE FUND
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
COUNSEL TO THE TRUSTEES
Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022-3852
TRANSFER AGENT
AIM Investment Services, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
A description of the policies and procedures that the fund uses to determine how
to vote proxies relating to portfolio securities is available without charge,
upon request, from our Client Services department at 800-959-4246 or on the AIM
Web site, AIMinvestments.com. On the home page, scroll down and click on AIM
Funds Proxy Policy. The information is also available on the Securities and
Exchange Commission's Web site, sec.gov.
Information regarding how the fund voted proxies related to its portfolio
securities during the 12 months ended 6/30/04 is available at our Web site. Go
to AIMinvestments.com, access the About Us tab, click on Required Notices and
then click on Proxy Voting Activity. Next, select your fund from the drop-down
menu.
</Table>
YOUR GOALS. OUR SOLUTIONS. [AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark-- --Registered Trademark--
TFIT-SAR-1
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This is the semiannual report on the performance of the
ROBERT H. Institutional Class of the Tax-Free Cash Reserve Portfolio
GRAHAM] of Tax-Free Investments Trust, a money market fund investing
in short-term municipal bonds of the highest credit ratings.
ROBERT H. GRAHAM The report is for the six-month period ended September 30,
2004.
Historically low interest rates resulted in low yields
for money market instruments.
The Federal Reserve (the Fed), which had left the federal
funds target rate at 1.00% since June 2003 (the lowest rate
since 1958), increased the rate by 0.25% (or 25 basis
points) three times during the six-month reporting period.
With the latest increase on September 21, the rate stood at
1.75%. The federal funds rate is the interest rate at which depository
institutions lend balances at the Fed to other depository institutions
overnight. The federal funds rate does not mandate the rates offered on
municipal bonds. However, the low-interest rate environment resulting from the
federal funds rate, as well as the overall economic climate itself, affects all
fixed-income investing.
Indications of sustained economic growth characterized the bond market during
the second quarter of 2004, according to The Bond Market Association's Research
Quarterly. The report noted that considering interest rate volatility in 2004,
bond markets in general have responded well to sustained economic growth.
However, municipal bond issuance declined in the quarter amid rising rates and a
flattening yield curve.
Economic activity continued to expand throughout the reporting period,
according to Beige Books published by the Fed. The nation's gross domestic
product, generally considered the broadest measure of economic activity, grew at
an annualized rate of 3.3% in the second quarter and 3.7% in the third quarter
of 2004. According to the Department of Labor, 1.05 million jobs were created
during the reporting period. However, a slowdown in job growth led to declining
consumer confidence in August and September, according to The Conference Board.
At the close of the fiscal year, the unemployment rate stood at 5.4%.
The September Beige Book reported that the economy continued to improve in
July and August, with 11 districts reporting increased activity levels during
the summer. All but one district reported an increase in manufacturing activity.
Labor markets remained slack across the nation, with few reports of occupational
shortages, while retail sales improved modestly in July and August, according to
the Beige Book report.
YOUR INVESTMENT PORTFOLIO
For the six-month period ended September 30, 2004, the seven-day SEC and monthly
yields for the Tax-Free Cash Reserve Portfolio's Institutional Class were 1.27%
and 1.15%, respectively. The seven-day SEC yield and monthly yield represent
annualized results for the period, net of fees and expenses, and exclude any
realized capital gains or losses. Yields will fluctuate. Had the advisor not
waived fees and/or reimbursed expenses, performance would have been lower.
Through a combination of short-term cash management vehicles and selective use
of a longer
========================================
PORTFOLIO COMPOSITION BY MATURITY
In days, as of 9/30/04
1-7 75.5%
8-14 2.6
15-60 7.7
61-120 6.7
121-180 1.8
181-240 0.7
241+ 5.0
The number of days to maturity of each
holding is determined in accordance with
the provisions of Rule 2a-7 under the
Investment Company Act of 1940.
========================================
[AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark-- (continued)
The views and opinions maturity schedule for higher yields, the portfolio
expressed in this letter continued to provide relatively attractive
are those of A I M returns. The weighted average maturity (WAM)
Advisors, Inc. These remained in the 25- to 42- day range; at the close
views and opinions are of the reporting period, the WAM stood at 35 days.
subject to change at any The portfolio continued to maintain a relatively
time based on factors short maturity structure to take advantage of any
such as market and sudden rise in market yields.
economic conditions.
These views and opinions The portfolio continued to hold the highest
may not be relied upon as credit-quality ratings given by three widely known
investment advice or credit rating agencies: AAAm from Standard &
recommendations, or as an Poor's, Aaa from Moody's and AAA from
offer for a particular FitchRatings. Fund ratings are subject to change
security. Statements of and are based on several factors including an
fact are from sources analysis of a portfolio's overall credit quality,
considered reliable, but market price exposure and management.
A I M Advisors, Inc.
makes no representation The Tax-Free Cash Reserve Portfolio seeks to
or warranty as to their provide as high a level of tax-exempt income as is
completeness or accuracy. consistent with preservation of capital and
Although historical maintenance of liquidity by investing in
performance is no high-quality, short-term municipal obligations.
guarantee of future The portfolio invests solely in securities that,
results, these insights at the time of investment, are "First Tier," as
may help you understand defined in Rule 2a-7 under the Investment Company
our investment management Act of 1940.
philosophy.
IN CONCLUSION
THIS REPORT MUST BE Despite raising the federal funds rate for the
ACCOMPANIED OR PRECEDED third time since June 24, as the reporting period
BY A CURRENTLY EFFECTIVE ended, the Fed believed that monetary policy
FUND PROSPECTUS, WHICH remains accommodative. After the September rate
CONTAINS MORE COMPLETE increase, the Fed stated that it expects
INFORMATION, INCLUDING underlying inflation to be relatively low, but
SALES CHARGES AND that it would "respond to changes in economic
EXPENSES. READ IT prospects as needed to maintain price stability."
CAREFULLY BEFORE YOU
INVEST. We are pleased to send you this report on your
investment. AIM is committed to the primary goals
PERFORMANCE QUOTED IS of safety, liquidity and yield in institutional
PAST PERFORMANCE AND fund management. We are also dedicated to customer
CANNOT GUARANTEE service. Should you have comments or questions
COMPARABLE FUTURE about this report, please contact one of our
RESULTS; CURRENT representatives at 800-659-1005.
PERFORMANCE MAY BE LOWER
OR HIGHER. VISIT Sincerely,
AIMINVESTMENTS.COM FOR
THE MOST RECENT MONTH-END /s/ ROBERT H. GRAHAM
PERFORMANCE. -------------------------------------
Robert H. Graham
Chairman, A I M Management Group Inc.
AN INVESTMENT IN THE FUND
IS NOT INSURED OR Beginning with fiscal periods ending after
GUARANTEED BY THE FEDERAL December 31, 2004, the fund files its complete
DEPOSIT INSURANCE schedule of portfolio holdings with the Securities
CORPORATION OR ANY OTHER and Exchange Commission ("SEC") for the first and
GOVERNMENT AGENCY. third quarters of each fiscal year on Form N-Q.
ALTHOUGH THE FUND SEEKS The fund's Form N-Q filings are available on the
TO PRESERVE THE VALUE OF SEC's website at http://www.sec.gov. Copies of the
YOUR INVESTMENT AT $1.00 fund's Forms N-Q may be reviewed and copied at the
PER SHARE, IT IS POSSIBLE SEC's Public Reference Room at 450 Fifth Street,
TO LOSE MONEY BY N.W., Washington, D.C. 20549-0102. You can obtain
INVESTING IN THE FUND. information on the operation of the Public
Reference Room, including information about
duplicating fee charges, by calling 1-202-942-8090
or by electronic request at the following E-mail
address: publicinfo@sec.gov. The SEC file numbers
for the fund are 8112731 and 2-58286. The fund's
most recent portfolio holdings, as filed on Form
N-Q, are also available at www.aiminvestments.com.
2
INFORMATION ABOUT YOUR FUND'S EXPENSES
EXAMPLE
As a shareholder of the fund, you incur ongoing costs, including management
fees; and other fund expenses. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the fund and to compare these
costs with ongoing costs of investing in other mutual funds. The example is
based on an investment of $1,000 invested at the beginning of the period and
held for the entire period, April 1, 2004 - September 30, 2004.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use this information to compare the ongoing costs of investing in the fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
================================================================================
<Table>
<Caption>
HYPOTHETICAL
ACTUAL (5% ANNUAL RETURN
BEFORE EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING
(04/01/04) (09/30/04)(1) PERIOD(2) (09/30/04) PERIOD(2)
INSTITUTIONAL
CLASS $1,000.00 $1,004.70 $1.11 $1,023.97 $1.12
</Table>
(1) The actual ending account value is based on the actual total return of the
fund for the period April 1, 2004 to September 30, 2004 after actual expenses
and will differ from the hypothetical ending account value which is based on the
fund's expense ratio and a hypothetical annual return of 5% before expenses. The
actual cumulative return at net asset value for the period April 1, 2004 to
September 30, 2004 was 0.47% for Institutional Class shares.
(2) Expenses are equal to the fund's annualized expense ratio of 0.22% for
Institutional Class shares multiplied by the average account value over the
period, multiplied by 183/365 (to reflect the one-half year period).
================================================================================
3
SCHEDULE OF INVESTMENTS
September 30, 2004
(Unaudited)
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS-100.40%
ALABAMA-1.62%
Birmingham (City of) Public Parks &
Recreation Board
(Children's Zoo Project); VRD Series 2002
RB
(LOC-AmSouth Bank)
1.84%, 05/01/07(b(c) -- VMIG-1 $ 2,925 $ 2,925,000
- -------------------------------------------------------------------------------------------
Birmingham (City of) Public Parks &
Recreation Board
(YMCA Project); Refunding VRD Series 1996
RB
(LOC-AmSouth Bank)
1.84%, 06/01/16(b)(c) -- VMIG-1 1,990 1,990,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Birmingham
Waterworks & Sewer Board);
VRD Series 2002-6009 Class A COP
(Acquired 11/05/02; Cost $4,100,000)
1.75%, 01/01/43(c)(d)(e) A-1+ -- 4,100 4,100,000
- -------------------------------------------------------------------------------------------
VRD Series 2003-0007 Class A COP
(Acquired 04/16/03; Cost $7,370,000)
1.75%, 01/01/43(c)(d)(e) A-1+ -- 7,370 7,370,000
- -------------------------------------------------------------------------------------------
Homewood (City of) Medical Clinic Board
(Lakeshore Foundation Project); Lease
Revenue VRD Series 2000 RB
(LOC-AmSouth Bank)
1.84%, 11/01/24(b)(c) A-1 -- 6,046 6,046,000
- -------------------------------------------------------------------------------------------
Mobile (City of); Port City Medical Clinic
Board (Infirmary Health); VRD Series 1998 B
RB
1.71%, 02/01/25(c)(f) A-1 VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Montgomery (City of) Industrial Development
Board
(Industrial Partners Project); Refunding
VRD Series 1989 IDR
(LOC-SunTrust Bank)
1.73%, 01/01/07(b)(c) -- Aa2 635 635,000
- -------------------------------------------------------------------------------------------
Oxford (City of); Unlimited Tax VRD Series
2003 GO Wts.
(LOC-Branch Banking & Trust)
1.73%, 07/01/15(b)(c) -- VMIG-1 5,180 5,180,000
- -------------------------------------------------------------------------------------------
Ridge (City of) Improvement District; Special
Assessment VRD Series 2000 RB (LOC-AmSouth
Bank)
1.73%, 10/01/25(b)(c) -- VMIG-1 13,335 13,335,000
- -------------------------------------------------------------------------------------------
Tuscaloosa (City of) Educational Building
Authority (Stillman College Project);
Refunding Capital Improvement VRD Series
2002 A RB (LOC-AmSouth Bank)
1.84%, 10/01/23(b)(c) -- VMIG-1 500 500,000
===========================================================================================
47,081,000
===========================================================================================
</Table>
F-1
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ALASKA-0.13%
Alaska (State of) Industrial Development &
Export Authority
(Safeway Inc. Projects); Refunding VRD
Series 1991 IDR
(LOC-Deutsche Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1 -- $ 1,895 $ 1,895,000
- -------------------------------------------------------------------------------------------
Alaska (State of) Industrial Development
Authority
(Alaska Hotel Properties Inc. Project); VRD
Series 1986 IDR
(LOC-Royal Bank of Scotland)
(Acquired 12/17/02; Cost $800,000)
1.70%, 06/01/06(b)(c)(d) -- Aa1 800 800,000
- -------------------------------------------------------------------------------------------
Matanuska-Susitna (Borough of); Unlimited Tax
Series 1998 A GO
4.50%, 03/01/05(f) AAA Aaa 1,000 1,012,718
===========================================================================================
3,707,718
===========================================================================================
ARIZONA-1.43%
Apache (County of) Industrial Development
Authority
(Tucson Electric Power Co.); Floating Rate
Series 1982 A IDR
(LOC-Credit Suisse First Boston)
1.75%, 12/15/18(b)(c) A-1 VMIG-1 6,625 6,625,000
- -------------------------------------------------------------------------------------------
Casa Grande (City of) Industrial Development
Authority (Center Park Apartments Project);
Refunding Multi-Family Housing VRD Series
2001 A IDR (CEP-Federal National Mortgage
Association)
1.72%, 06/15/31(c) -- VMIG-1 2,010 2,010,000
- -------------------------------------------------------------------------------------------
Casa Grande (City of) Industrial Development
Authority (Quail Gardens Apartments);
Refunding Multi-Family Housing VRD Series
2001 A IDR (CEP-Federal National Mortgage
Association)
1.72%, 06/15/31(c) -- VMIG-1 1,550 1,550,000
- -------------------------------------------------------------------------------------------
Phoenix (City of) Civic Improvement Corp.;
Wastewater System Series 2003 BAN
1.22%, 11/12/04 A-1+ P-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
1.23%, 12/16/04 A-1+ P-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
1.27%, 01/10/05 A-1+ P-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Phoenix (City of) Industrial Development
Authority
(Lynwood Apartments Project); Refunding VRD
Series 1994 IDR
(CEP-Federal Home Loan Bank)
1.75%, 10/01/25(c) A-1+ -- 6,020 6,020,000
- -------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Tucson Electric Power
Co.-Irvington Road Project); VRD Series
1982 IDR (LOC-Credit Suisse First Boston)
1.68%, 10/01/22(b)(c) A-1 VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
University of Arizona (University of Arizona
Projects);
VRD Series 2004 B COP
1.64%, 06/01/31(c)(f) A-1+ VMIG-1 2,550 2,550,000
===========================================================================================
41,755,000
===========================================================================================
</Table>
F-2
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ARKANSAS-0.09%
Pulaski (County of) Public Facilities Board
(Health Facilities-Central Arkansas
Radiation Therapy Inc. Project);
Educational Facilities VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.75%, 07/01/08(b)(c)(i) -- -- $ 2,500 $ 2,500,000
===========================================================================================
CALIFORNIA-0.05%
San Diego (County of) (Friends of Chabad
Lubavitch);
VRD Series 2003 COP (LOC-Comerica Bank)
1.78%, 01/01/23(b)(c)(i) -- -- 1,500 1,500,000
===========================================================================================
COLORADO-2.39%
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Art Museum
Project); VRD Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 01/01/33(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Seminary
Project); VRD Series 2004 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 07/01/24(b)(c) A-1+ -- 1,200 1,200,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (National Cable
Television Center & Museum Project);
VRD Series 1999 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 10/01/06(b)(c) A-1+ -- 1,505 1,505,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority
(Regis Jesuit High School Project); VRD
Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 12/01/33(b)(c) A-1+ -- 5,015 5,015,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Arapahoe House Project); VRD Series 2004 A
RB
(LOC-Wells Fargo Bank N.A.)
1.76%, 04/01/24(b)(c) A-1+ -- 1,200 1,200,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Christian Living Project); Refunding VRD
Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.74%, 01/01/31(b)(c) A-1+ -- 3,400 3,400,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Craig Hospital Project); Refunding VRD
Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 12/01/20(b)(c) A-1+ -- 5,605 5,605,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Golden West Manor Inc. Project); VRD
Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.74%, 07/01/32(b)(c) A-1+ -- 4,210 4,210,000
- -------------------------------------------------------------------------------------------
Colorado Springs (City of) (Pikes Peak Mental
Health);
VRD Series 2003 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 03/15/23(b)(c) A-1+ -- 3,570 3,570,000
- -------------------------------------------------------------------------------------------
</Table>
F-3
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
COLORADO-(CONTINUED)
Denver (City & County of) (Kentucky Circle
Village Project); VRD Series 2000 RB
(LOC-Mountain States Bank, U.S. Bank N.A.)
1.74%, 10/01/29(b)(c) A-1+ -- $ 1,740 $ 1,740,000
- -------------------------------------------------------------------------------------------
Idaho Springs (City of); (Safeway Inc.
Project);
Refunding VRD Series 1993 IDR (LOC-Deutsche
Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1+ -- 940 940,000
- -------------------------------------------------------------------------------------------
Jefferson (County of) School District No.
R-001; Series 2004 A TAN
3.00%, 06/30/05 SP-1+ MIG-1 30,000 30,332,309
- -------------------------------------------------------------------------------------------
Lafayette (City of) Exempla Improvement
District
(Special Improvement No. 2-01);
Refunding Special Assessment VRD Series
2002 RB
(LOC-Wells Fargo Bank N.A.)
1.72%, 12/01/22(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (City & County of
Denver Water);
VRD Series 2003 PT-1872 RB
(Acquired 05/29/03; Cost $7,830,000)
1.73%, 12/01/22(c)(d)(e)(i) -- -- 7,830 7,830,000
- -------------------------------------------------------------------------------------------
Regional Transportation (District of);
Refunding Sales Tax Series 2003 A RB
3.00%, 11/01/04(f) AAA Aaa 1,000 1,001,613
===========================================================================================
69,548,922
===========================================================================================
CONNECTICUT-0.09%
Connecticut (State of) Development Authority
(Central Vermont Public Service); Floating
Rate Series 1985 PCR
(LOC-Royal Bank of Scotland)
1.35%, 12/01/15(b)(j) A-1+ -- 1,400 1,400,000
- -------------------------------------------------------------------------------------------
Connecticut (State of) Development Authority
(Connecticut Water Co. Project); Refunding
Water Facilities VRD Series 2004 B RB
(LOC-Royal Bank of Scotland)
1.70%, 09/01/28(b)(c) A-1+ -- 1,125 1,125,000
===========================================================================================
2,525,000
===========================================================================================
DELAWARE-0.28%
Delaware (State of) Economic Development
Authority
(Independent School Inc. Project); VRD
Series 2003 RB
(LOC-Royal Bank of Scotland)
1.69%, 07/01/33(b)(c) A-1+ -- 8,250 8,250,000
===========================================================================================
DISTRICT OF COLUMBIA-0.89%
District of Columbia (Consortium Issue); VRD
Series 1998 RB
(LOC-Wachovia Bank N.A.)
1.69%, 07/01/23(b)(c) A-1 -- 15,755 15,755,000
- -------------------------------------------------------------------------------------------
District of Columbia (National Children's
Center Inc.);
VRD Series 1993 RB (LOC-Bank of America
N.A.)
1.70%, 02/01/20(b)(c) A-1+ -- 3,385 3,385,000
- -------------------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA-(CONTINUED)
District of Columbia (Resources for the
Future Inc.);
VRD Series 1998 RB (LOC-Wachovia Bank N.A.)
(Acquired 09/26/03; Cost $2,015,000)
1.75%, 08/01/29(b)(c)(d) A-1 -- $ 2,015 $ 2,015,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (District of Columbia
Water & Sewer Authority); VRD Series 2003
A12 RB
(Acquired 02/24/03; Cost $4,655,000)
1.74%, 10/01/17(c)(d)(e) -- VMIG-1 4,655 4,655,000
===========================================================================================
25,810,000
===========================================================================================
FLORIDA-3.88%
ABN AMRO Munitops Ctfs. Trust (County of
Escambia);
Refunding Florida Non-AMT VRD Series
2002-24 Ctfs.
(Acquired 10/24/02; Cost $5,000,000)
1.73%, 10/01/10(c)(d)(e) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Capital Projects Finance Authority (Capital
Projects Loan Program); VRD Series 1997 A
RB
1.74%, 08/01/17(c)(f) A-1+ -- 1,050 1,050,000
- -------------------------------------------------------------------------------------------
Clay (County of) Housing Finance Authority
(Bluff Housing); Refunding Multi-Family
Housing VRD Series 2001 A RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 11/01/14(c) A-1+ -- 1,150 1,150,000
- -------------------------------------------------------------------------------------------
Collier (County of) Health Facilities
Authority
(Cleveland Clinic Health); VRD Hospital
Series 2003 C-2 BAN
(LOC-JPMorgan Chase Bank)
1.55%, 11/22/04(c) A-1+ VMIG-1 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Collier (County of) Industrial Development
Authority
(Redlands Christian Migrant); VRD Series
2001 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/26(b)(c)(i) -- -- 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Duval (County of) Housing Finance Authority
(Sunbeam Road Apartments Project);
Refunding Multi-Family Housing VRD Series
1997 RB
(LOC-Bank of America N.A.)
1.70%, 07/01/25(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Jacksonville (City of) Health Facilities
Authority (Baptist Medical Center Project);
VRD Hospital Series 2003 B RB
(LOC-Bank of America N.A.)
0.98%, 12/22/04(b)(g)(k) A-1+ -- 19,000 19,000,000
- -------------------------------------------------------------------------------------------
Jacksonville (City of) Health Facilities
Authority
(Samuel C. Taylor Foundation Project); VRD
Series 1998 RB (LOC-Bank of America N.A.)
(Acquired 02/20/01; Cost $2,800,000)
1.75%, 12/01/23(b)(c)(d)(i) -- -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
</Table>
F-5
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
Jacksonville (City of) Health Facilities
Authority (University of Florida
Jacksonville Physicians, Inc.); VRD Series
2002 RB
(LOC-Bank of America N.A.)
1.73%, 06/01/22(b)(c) -- VMIG-1 $12,140 $ 12,140,000
- -------------------------------------------------------------------------------------------
Lakeland (City of) Electric & Water;
Refunding Series 1992 RB
5.63%, 10/01/04(l) NRR -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Marion (County of) Hospital District (Munroe
Regional Health System); Health System
Improvement VRD Series 2000 RB
(LOC-AmSouth Bank)
1.72%, 10/01/30(b)(c) -- VMIG-1 13,375 13,375,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (State of Florida
Mid-Bay Bridge Authority); VRD Series 2002
PT-1531 RB
(Acquired 10/10/02; Cost $9,100,000)
1.72%, 10/01/18(c)(d)(e) A-1+ -- 9,100 9,100,000
- -------------------------------------------------------------------------------------------
Miami-Dade (County of) Educational Facilities
Authority
(Carlos Albizu University Project); VRD
Series 2000 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/25(b)(c)(i) -- -- 9,400 9,400,000
- -------------------------------------------------------------------------------------------
Miami-Dade (County of) Industrial Development
Authority
(Palmer Trinity Private School Project);
VRD Series 1999 IDR
(LOC-Bank of America N.A.)
1.75%, 12/01/19(b)(c)(i) -- -- 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Florida Department of
Environmental Protection); Floating Rate
Trust Ctfs. VRD Series 2002-722 RB
(Acquired 11/13/02; Cost $9,850,000)
1.73%, 07/01/22(c)(d)(e) A-1 -- 9,850 9,850,000
- -------------------------------------------------------------------------------------------
North Miami (City of) Educational Facilities
(Miami Country Day School Project); VRD
Series 1999 RB
(LOC-Bank of America N.A.)
1.75%, 08/01/19(b)(c)(i) -- -- 1,550 1,550,000
- -------------------------------------------------------------------------------------------
Orange (County of) Health Facilities
Authority
(Adventist Health System); VRD Series 1992
RB
(LOC-SunTrust Bank)
1.70%, 11/15/14(b)(c) A-1+ VMIG-1 1,155 1,155,000
- -------------------------------------------------------------------------------------------
Orange (County of) Health Facilities
Authority (Presbyterian Retirement
Communities Project); VRD Series 1998 RB
(LOC-Bank of America N.A.)
(Acquired 01/29/02-09/01/04; Cost
$5,129,000)
1.75%, 11/01/28(b)(c)(d)(i) -- -- 5,129 5,129,000
- -------------------------------------------------------------------------------------------
Palm Beach (County of) Educational Facilities
Authority (Atlantic College Project);
Educational Facilities VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/31(b)(c)(i) -- -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
Pasco (County of); Refunding Water & Sewer
Series 2002 RB
5.00%, 10/01/04(f) AAA Aaa 1,000 1,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-6
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
Tampa (City of) (Agency for Community
Treatment DACCO Project); VRD Series 2001
RB (LOC-Bank of America N.A.)
1.75%, 07/01/22(b)(c)(i) -- -- $ 5,080 $ 5,080,000
- -------------------------------------------------------------------------------------------
University of North Florida Foundation, Inc.
(Parking System);
VRD Series 1998 RB (LOC-Wachovia Bank N.A.)
1.73%, 05/01/28(b)(c) A-1 -- 800 800,000
===========================================================================================
113,079,000
===========================================================================================
GEORGIA-5.07%
Athens-Clarke (County of) Unified Government
Development Authority (University of
Georgia Athletic Association Project);
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.76%, 08/01/33(b)(i)(m) -- -- 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Clayton (County of) Development Authority
(Delta Airlines Project); Special
Facilities VRD Series 2000 A RB
(CEP-General Electric Capital Corp.)
1.71%, 06/01/29(c) A-1+ VMIG-1 7,500 7,500,000
- -------------------------------------------------------------------------------------------
Cobb (County of) Housing Authority (Tamarron
Apartments Project); Refunding Multi-Family
Housing VRD Series 2003 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 03/01/24(c) A-1+ -- 5,050 5,050,000
- -------------------------------------------------------------------------------------------
Cobb (County of) School District; Limited Tax
Series 2004 GO
1.75%, 12/31/04 -- MIG-1 20,000 20,038,500
- -------------------------------------------------------------------------------------------
DeKalb (County of) Hospital Authority
(DeKalb Medical Center Inc. Project); VRD
Series 2000 B RB
(LOC-Wachovia Bank N.A.)
1.69%, 10/01/25(b)(c) -- VMIG-1 10,925 10,925,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Georgia);
VRD Series 2000-1001 C COP (Acquired
07/26/00; Cost $20,000,000)
1.75%, 07/01/15(c)(d)(e) A-1+ -- 20,000 20,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Dalton); Utilities VRD
Series 2003 A02 RB
(Acquired 08/25/04; Cost $4,895,000)
1.74%, 01/01/12(c)(d)(e) -- VMIG-1 4,895 4,895,000
- -------------------------------------------------------------------------------------------
Fulton (County of) Development Authority
(Bridgeway Foundation for Education
Project); Educational Facilities VRD Series
2000 RB
(LOC-Wachovia Bank N.A.)
1.74%, 06/01/15(b)(c) A-1 -- 1,400 1,400,000
- -------------------------------------------------------------------------------------------
Fulton (County of) Hospital Authority
(Northside Hospital Inc.);
VRD Series 2003 A RAN (LOC-Wachovia Bank
N.A.)
1.69%, 10/01/18(b)(c) -- VMIG-1 28,860 28,860,000
- -------------------------------------------------------------------------------------------
Georgia (State of); Unlimited Tax Series 1999
D GO
5.80%, 11/01/04 AAA Aaa 1,400 1,405,461
- -------------------------------------------------------------------------------------------
Gwinnett (County of) School District; Limited
Construction Sales Tax Notes Series 2004 GO
1.75%, 12/30/04 -- MIG-1 15,000 15,025,977
- -------------------------------------------------------------------------------------------
</Table>
F-7
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
GEORGIA-(CONTINUED)
Houston (County of) Hospital Authority; VRD
Series 2002 RB
(LOC-Wachovia Bank N.A.)
1.69%, 10/01/14(b)(c) A-1 -- $ 9,230 $ 9,230,000
- -------------------------------------------------------------------------------------------
Private Colleges & Universities Authority
(Mercer University Project); VRD Series
2003 RB (LOC-Branch Banking & Trust)
1.82%, 10/01/32(b)(c) -- VMIG-1 7,260 7,260,000
- -------------------------------------------------------------------------------------------
Roswell (City of) Housing Authority (Rosemont
Apartments Project); Refunding Multi-Family
Housing VRD Series 2003 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 01/01/34(c) A-1+ -- 10,555 10,555,000
- -------------------------------------------------------------------------------------------
Smyrna (City of) Hospital Authority
(Ridgeview Institute Inc. Project); VRD
Series 2002 RB (LOC-Wachovia Bank N.A.)
1.74%, 11/01/27(b)(c) -- VMIG-1 2,210 2,210,000
===========================================================================================
147,854,938
===========================================================================================
HAWAII-0.37%
Eagle Tax Exempt Trust (State of Hawaii); VRD
Series 2000-1101 COP (Acquired 01/11/01;
Cost $6,000,000)
1.75%, 12/01/16(c)(d)(e) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Hawaii);
Unlimited Tax VRD Series 2003 A16 GO
(Acquired 02/27/03; Cost $3,885,000)
1.74%, 07/01/18(c)(d)(e) -- VMIG-1 3,885 3,885,000
- -------------------------------------------------------------------------------------------
Hawaii (State of); Refunding Unlimited Tax
Series 1997 CO GO
6.00%, 03/01/05(f) AAA Aaa 1,000 1,020,421
===========================================================================================
10,905,421
===========================================================================================
IDAHO-0.47%
Custer (County of) Pollution Control (Amoco
Oil Co.-Standard Oil Industry Project); VRD
Series 1983 RB
0.90%, 04/01/05(g)(h) A-1+ Aa1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Magic Valley Healthcare System Inc.
(Magic Valley Regional Medical Center
Project);
VRD Series 2001 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 12/01/21(b)(c) -- VMIG-1 3,640 3,640,000
===========================================================================================
13,640,000
===========================================================================================
ILLINOIS-14.26%
ABN AMRO Munitops Ctfs. Trust (City of
Chicago); Refunding
Multi-State Non-AMT VRD Limited Tax Series
2001-34 Ctfs. (Acquired 11/15/01; Cost
$10,000,000)
1.75%, 07/01/07(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Bear Stearns Municipal Securities Trust Ctfs.
(State of Illinois Sales Tax); VRD Series
1998-25 Class A RB
(Acquired 08/26/99; Cost $10,000,000)
1.75%, 03/15/07(c)(d)(e) A-1 Aa2 10,000 10,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-8
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Bear Stearns Municipal Securities Trust Ctfs.
(State of Illinois);
VRD Series 2002-190 Class A RB
(Acquired 05/06/02; Cost $10,130,000)
1.75%, 06/05/14(c)(d)(e) A-1 -- $10,130 $ 10,130,000
- -------------------------------------------------------------------------------------------
Chicago (City of); VRD Limited Tax Obligation
Tender Series 2004 GO (LOC-State Street
Bank & Trust Co.)
1.05%, 01/13/05(b)(g)(k) SP-1+ MIG-1 4,000 4,000,000
- -------------------------------------------------------------------------------------------
Chicago (City of); VRD Unlimited Tax Series
2002 B GO
1.70%, 01/01/37(c)(f) A-1+ VMIG-1 8,400 8,400,000
- -------------------------------------------------------------------------------------------
Crestwood (City of) (Trinity Christian
College);
VRD Series 2003 RB (LOC-Fifth Third Bank)
1.51%, 09/01/28(b)(c) A-1+ -- 3,775 3,775,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago Water
& Sewer); VRD Series 2001-1308 COP
(Acquired 12/12/01; Cost $8,655,000)
1.75%, 11/01/26(c)(d)(e) A-1+ -- 8,655 8,655,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago); VRD
Series 2001-1305 COP (Acquired 04/02/01;
Cost $4,950,000)
1.84%, 01/01/35(c)(d)(e) A-1+ -- 4,950 4,950,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (County of Cook
Regional Transportation Authority); VRD
Series 2000-1303 COP
(Acquired 03/26/01; Cost $19,000,000)
1.75%, 07/01/23(c)(d)(e) A-1+ -- 19,000 19,000,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Illinois);
VRD Unlimited Tax Series 2003-0023 Class A
COP
(Acquired 06/12/03; Cost $3,775,000)
1.75%, 06/01/15(c)(d)(e) A-1+ -- 3,775 3,775,000
- -------------------------------------------------------------------------------------------
VRD Series 2000-1304 COP (Acquired
06/27/00; Cost $7,340,000)
1.75%, 06/01/21(c)(d)(e) A-1+ -- 7,340 7,340,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Chicago Park
District);
VRD Unlimited Tax Series 2002-1306 Class A
COP
(Acquired 05/02/02; Cost $5,500,000)
1.75%, 01/01/29(c)(d)(e) A-1+ -- 5,500 5,500,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago
Public Building Commission); VRD Series
2003-0015 Class A COP (Acquired 05/14/03;
Cost $2,800,000)
1.75%, 12/01/14(c)(d)(e) A-1+ -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Central Lake County
Joint Action Water Agency); VRD Series 2003
B18 RB
(Acquired 02/19/03; Cost $3,155,000)
1.74%, 05/01/20(c)(d)(e) -- VMIG-1 3,155 3,155,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Chicago Board of
Education);
VRD Unlimited Tax Series 2000 A4 GO
(Acquired 11/12/03; Cost $4,845,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 4,845 4,845,000
- -------------------------------------------------------------------------------------------
</Table>
F-9
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
First Union MERLOTs (City of Chicago); VRD
Limited Tax Series 2000 A12 GO (Acquired
10/13/00; Cost $10,000,000)
1.74%, 01/01/23(c)(d)(e) -- VMIG-1 $10,000 $ 10,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Chicago
Emergency Telephone System); VRD Limited
Tax Series 2002 A44 GO
(Acquired 08/02/02; Cost $7,855,000)
1.74%, 01/01/20(c)(d)(e) -- VMIG-1 7,855 7,855,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Cook County Regional
Transportation Authority);
VRD Unlimited Tax Series 2001 A93 GO
(Acquired 10/10/01; Cost $3,670,000)
1.74%, 07/01/27(c)(d)(e) -- VMIG-1 3,670 3,670,000
- -------------------------------------------------------------------------------------------
VRD Unlimited Tax Series 2002 A41 GO
(Acquired 07/25/02; Cost $17,825,000)
1.74%, 06/01/17(c)(d)(e) -- VMIG-1 17,825 17,825,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Cook County); VRD
Unlimited Tax Series 2003 B11 GO (Acquired
01/29/03; Cost $7,000,000)
1.74%, 11/15/25(c)(d)(e) -- VMIG-1 7,000 7,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Illinois); VRD
Unlimited Tax Series 2001 A124 GO (Acquired
11/26/01; Cost $7,915,000)
1.74%, 11/01/26(c)(d)(e) A-1 -- 7,915 7,915,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (University of Illinois);
VRD Series 2000 S GO (Acquired 03/20/00;
Cost $7,400,000)
1.74%, 04/01/30(c)(d)(e) -- VMIG-1 7,400 7,400,000
- -------------------------------------------------------------------------------------------
Glendale Heights (City of) (Glendale Lakes
Project);
Refunding Multi-Family Housing VRD Series
2000 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.69%, 03/01/30(c) A-1+ -- 14,845 14,845,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(American College of Surgeons); VRD Series
1996 RB
(LOC-Northern Trust Co.)
1.60%, 08/01/26(b)(c) A-1+ -- 7,298 7,298,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (BAPS Inc. Project); VRD Series
2002 RB (LOC-Comerica Bank)
1.70%, 06/01/17(b)(c) A-1 -- 9,000 9,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(British Home for Retired Men & Women);
VRD Series 2001 RB (LOC-ABN AMRO Bank N.V.)
1.71%, 11/01/27(b)(c) A-1 -- 9,120 9,120,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Chicago Shakespeare Theater Project); VRD
Series 1999 RB
(LOC-ABN AMRO Bank N.V.) (Acquired
09/24/03; Cost $4,100,000)
1.71%, 01/01/19(b)(c)(d) A-1 -- 4,100 4,100,000
- -------------------------------------------------------------------------------------------
</Table>
F-10
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Development Finance
Authority (Embers Elementary School
Project); Educational Facilities VRD Series
2002 RB (LOC-ABN AMRO Bank N.V.)
(Acquired 11/04/03; Cost $2,250,000)
1.72%, 04/01/32(b)(c)(d) A-1 -- $ 2,250 $ 2,250,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Evanston Northwestern); VRD Series 2001 C
RB
1.70%, 05/01/31(c) A-1+ VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Glenwood School for Boys); VRD Series 1998
RB
(LOC-Bank of Montreal)
1.70%, 02/01/33(b)(c) A-1+ -- 2,100 2,100,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Institute of Gas Technology Project); VRD
Series 1999 IDR
(LOC-Bank of Montreal)
1.80%, 09/01/24(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Lyric Opera of Chicago Project); VRD
Series 1994 RB
(LOC-Northern Trust Co., Bank of Montreal,
JPMorgan Chase Bank)
1.70%, 12/01/28(b)(c) A-1+ VMIG-1 30,000 30,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Mount Carmel High School Project); VRD
Series 2003 RB
(LOC-JPMorgan Chase Bank)
1.70%, 07/01/33(b)(c) -- VMIG-1 5,600 5,600,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Museum of Contemporary Art Project); VRD
Series 1994 RB
(LOC-JPMorgan Chase Bank, Northern Trust
Co.)
1.70%, 02/01/29(b)(c) A-1 VMIG-1 14,950 14,950,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(North Shore Country Day School); VRD
Series 2003 RB
(LOC-Northern Trust Co.)
1.70%, 07/01/33(b)(c) -- VMIG-1 2,825 2,825,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Oak Park Residence Corp. Project); VRD
Series 2001 RB
(LOC-ABN AMRO Bank N.V.) (Acquired
01/29/03; Cost $2,975,000)
1.71%, 07/01/41(b)(c)(d) A-1 -- 2,975 2,975,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Sacred Heart Schools Project); VRD Series
2003 RB
(LOC-Fifth Third Bank)
1.70%, 07/01/33(b)(c) -- VMIG-1 4,600 4,600,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (West Central Illinois
Educational Project); VRD Series 2002 RB
(LOC-JPMorgan Chase Bank)
1.70%, 09/01/32(b)(c) -- VMIG-1 4,800 4,800,000
- -------------------------------------------------------------------------------------------
</Table>
F-11
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Development Finance
Authority
(World Communications Inc.); VRD Series
2000 RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 08/01/15(b)(c) -- VMIG-1 $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (Aurora University); VRD Series
2002 RB (LOC-Fifth Third Bank)
1.75%, 03/01/32(b)(c) -- VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(Chicago Children's Museum); VRD Series
1994 RB
(LOC-JPMorgan Chase Bank)
1.70%, 02/01/28(b)(c) A-1 VMIG-1 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (DePaul University); VRD Series
1992 CP-1 RB (LOC-Northern Trust Co.)
1.70%, 04/01/26(b)(c) A-1+ VMIG-1 1,800 1,800,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(National Louis University); VRD Series
1999 B RB
(LOC-JPMorgan Chase Bank)
1.70%, 06/01/29(b)(c) A-1+ -- 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(University Pooled Financing Program); VRD
Series 1985 RB
1.70%, 12/01/05(c)(f) A-1 VMIG-1 1,050 1,050,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Alexian Brothers Health);
VRD Series 2004 RB (LOC-JPMorgan Chase
Bank)
1.67%, 04/01/35(b)(c) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Jewish
Charities);
VRD Series 2004 A RN (LOC-Bank of Montreal)
1.70%, 06/30/05(b)(c) A-1+ -- 7,630 7,630,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Kohl
Children's Museum);
VRD Series 2004 RB (LOC-Fifth Third Bank)
1.70%, 07/01/34(b)(c) -- VMIG-1 2,680 2,680,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Northwestern University);
VRD Sub-Series 2004 A RB
1.69%, 12/01/34(c) A-1+ VMIG-1 8,000 8,000,000
- -------------------------------------------------------------------------------------------
VRD Sub-Series 2004 B RB
1.70%, 12/01/34(c) A-1+ VMIG-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Bensenville Home Society); VRD Series 1989
A RB
(LOC-JPMorgan Chase Bank)
1.71%, 02/15/19(b)(c) A-1 -- 1,150 1,150,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Blessing Hospital);
VRD Series 1999 B RB
1.74%, 11/15/29(c)(f) A-1 VMIG-1 4,710 4,710,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Cradle Society Project); VRD
Series 1998 RB (LOC-JPMorgan Chase Bank)
1.70%, 04/01/33(b)(c) A-1+ -- 1,600 1,600,000
- -------------------------------------------------------------------------------------------
</Table>
F-12
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Health Facilities
Authority (Edward Hospital Obligated
Group); VRD Series 2001 C RB
1.71%, 02/01/34(c)(f) A-1 VMIG-1 $ 2,050 $ 2,050,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Franciscan Eldercare Project);
Refunding VRD Series 1996 E RB
(LOC-ABN AMRO Bank N.V.)
1.67%, 05/15/27(b)(c) A-1 -- 5,660 5,660,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Northwestern Memorial Hospital); VRD
Series 1995 RB
1.70%, 08/15/25(c) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Peace Memorial Ministries); VRD Series
2003 B RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 08/15/33(b)(c) A-1 -- 9,845 9,845,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Resurrection Health); VRD Series
1999 B RB
1.71%, 05/15/29(c)(f) A-1 VMIG-1 2,210 2,210,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(St. Luke's Medical Center); VRD Series
1998 B RB
1.71%, 11/15/23(c)(f) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority;
Revolving Fund Pooled VRD Series 1985 C RB
(LOC-JPMorgan Chase Bank)
1.70%, 08/01/15(b)(c) A-1+ VMIG-1 8,100 8,100,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Toll Highway Authority;
Refunding Toll Highway VRD Series 1998 B RB
1.75%, 01/01/16(c)(f) AAA VMIG-1 15,900 15,900,000
- -------------------------------------------------------------------------------------------
1.75%, 01/01/17(c)(f) AAA VMIG-1 4,600 4,600,000
- -------------------------------------------------------------------------------------------
Lombard (City of) (Clover Creek Apartments
Project);
VRD Multi-Family Housing Series 2000 RB
(CEP-Federal National Mortgage Association)
1.72%, 12/15/30(c) A-1+ -- 14,855 14,855,000
- -------------------------------------------------------------------------------------------
McCook (City of) (Illinois Saint Andrew
Society);
VRD Series 1996 A RB (LOC-Northern Trust
Co.)
1.72%, 12/01/21(b)(c) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Oak Forest (City of) (Homewood Pool-South
Suburban Mayors & Managers Association
Program); VRD Series 1989 RB
(LOC-Fifth Third Bank)
1.51%, 07/01/24(b)(c) -- VMIG-1 4,500 4,500,000
- -------------------------------------------------------------------------------------------
Orland Hills (City of); Multi-Family Housing
VRD Series 1995 A RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 12/01/04(b)(c) A-1 -- 1,470 1,470,000
===========================================================================================
415,763,000
===========================================================================================
</Table>
F-13
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
INDIANA-3.08%
ABN AMRO Munitops Ctfs. Trust (Township of
Wayne, County of Marion School Building
Corp.); Multi-State Non-AMT VRD Series
2003-27 RB (Acquired 11/12/03; Cost
$13,795,000)
1.76%, 07/15/11(c)(d)(e) -- VMIG-1 $13,795 $ 13,795,000
- -------------------------------------------------------------------------------------------
Brownsburg (City of) Independent School
Building Corp. No. 2;
First Mortgage Series 1995 RB
5.95%, 02/01/05(g)(l) AAA Aaa 1,700 1,761,041
- -------------------------------------------------------------------------------------------
First Union MERLOTs (County of Porter Jail
Building Corp.);
VRD Series 2001 A58 RB (Acquired 11/12/03;
Cost $9,415,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 9,415 9,415,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Bond Bank (Advanced
Program Notes); Series 2004 A RN
2.00%, 01/25/05 SP-1+ MIG-1 18,500 18,551,692
- -------------------------------------------------------------------------------------------
Indiana (State of) Bond Bank (Pike Township
Metropolitan School District); Series 1995
A RB
5.80%, 02/01/05(g)(l) AAA Aaa 2,750 2,821,138
- -------------------------------------------------------------------------------------------
Indiana (State of) Development Finance
Authority (Indiana Museum of Art);
Educational Facilities VRD Series 2004 RB
(LOC-JPMorgan Chase Bank)
1.70%, 02/01/39(b)(c) -- VMIG-1 3,000 3,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Educational Facilities
Authority
(Wabash College Project); Educational
Facilities VRD Series 2003 RB (LOC-JPMorgan
Chase Bank)
1.70%, 12/01/23(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Community Hospitals Project); VRD Series
2000 A RB
(LOC-Bank of America N.A.)
1.70%, 07/01/28(b)(c) A-1+ -- 9,815 9,815,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority (Community Mental
Health & Rehabilitation); VRD Series 1990
RB
(LOC-ABN AMRO Bank N.V.)
1.72%, 11/01/20(b)(c) A-1 -- 2,040 2,040,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Deaconess Hospital); VRD Series 2004 B RB
(LOC-Fifth Third Bank)
1.51%, 01/01/29(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Fayette Memorial Hospital Association);
VRD Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.77%, 10/01/32(b)(m) A-1+ -- 3,100 3,100,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Golden Years Homestead); VRD Series 2002 A
RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 06/01/25(b)(c) A-1+ -- 6,500 6,500,000
- -------------------------------------------------------------------------------------------
</Table>
F-14
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
INDIANA-(CONTINUED)
Indiana (State of) Health Facilities
Financing Authority
(Margaret Mary Community Hospital); VRD
Series 2004 A RB
(LOC-Fifth Third Bank)
1.77%, 12/01/29(b)(m) A-1+ -- $ 5,000 $ 5,000,000
- -------------------------------------------------------------------------------------------
Kokomo (City of) Hospital Authority (St.
Joseph's Hospital Center); Refunding
Hospital Series 1993 RB
6.35%, 08/15/05(g)(l) AAA Aaa 3,000 3,118,888
- -------------------------------------------------------------------------------------------
Monroe (County of) Hospital Authority;
Refunding VRD Hospital Series 1999 RB
1.69%, 05/01/11(c)(f) -- VMIG-1 3,900 3,900,000
===========================================================================================
89,817,759
===========================================================================================
IOWA-1.78%
Iowa (State of) Finance Authority Retirement
Community
(Deerfield Retirement Community); VRD
Series 2003 A RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 12/01/33(b)(c) A-1 -- 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Iowa (State of) Higher Education Loan
Authority
(Graceland Private College); VRD Series
2003 RB
(LOC-Bank of America N.A.)
1.75%, 02/01/33(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Iowa (State of) School Corps.; School Cash
Anticipation Program Series 2004 A Wts.
Ctfs.
3.00%, 06/30/05(f) -- MIG-1 10,000 10,103,360
- -------------------------------------------------------------------------------------------
Series 2004 B Wts. Ctfs.
2.00%, 01/28/05(f) -- MIG-1 18,000 18,045,776
- -------------------------------------------------------------------------------------------
Iowa City (City of) (ACT, Inc.); VRD Series
2001 RB
1.87%, 04/01/32(m) A-1+ -- 6,815 6,815,000
===========================================================================================
51,964,136
===========================================================================================
KANSAS-1.14%
Eagle Tax Exempt Trust (County of Wyandotte
Unified Government Utility System); VRD
Series 2004-0038 Class A COP (Acquired
09/08/04; Cost $5,000,000)
1.75%, 09/01/21(c)(d)(e) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Leawood (City of); Unlimited Tax Temporary
Notes Series 2004-2 GO
3.00%, 10/01/05 -- MIG-1 14,000 14,182,401
- -------------------------------------------------------------------------------------------
Lenexa (City of) Health Care Facilities
(Lakeview Village Inc.);
VRD Series 2002 B RB (LOC-ABN AMRO Bank
N.V.)
1.72%, 05/15/32(b)(c) A-1 -- 7,500 7,500,000
- -------------------------------------------------------------------------------------------
Olathe (City of) Recreational Facilities
(YMCA of Greater Kansas City Project); VRD
Series 2002 B RB (LOC-Bank of America N.A.)
1.75%, 11/01/18(b)(c) -- VMIG-1 3,100 3,100,000
- -------------------------------------------------------------------------------------------
</Table>
F-15
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
KANSAS-(CONTINUED)
Wichita (City of) Recreational Facilities
(YMCA of Wichita Project); VRD Series 1998
XI RB (LOC-Bank of America N.A.)
(Acquired 02/15/01; Cost $3,500,000)
1.75%, 08/01/09(b)(c)(d) A-1+ -- $ 3,500 $ 3,500,000
===========================================================================================
33,282,401
===========================================================================================
KENTUCKY-1.47%
Kentucky (State of) Asset/Liability
Commission;
General Funding Series 2004 A TRAN
3.00%, 06/29/05 SP-1+ MIG-1 15,000 15,159,010
- -------------------------------------------------------------------------------------------
Kentucky (State of) Area Developing Districts
Financing Trust
(Weekly Acquisition-Ewing); Lease Program
VRD Series 2000 RB (LOC-Wachovia Bank N.A.)
1.79%, 06/01/33(b)(c) A-1 -- 5,910 5,910,000
- -------------------------------------------------------------------------------------------
Newport (City of) Kentucky League of Cities
Funding Trust; Lease Program VRD Series
2002 RB (LOC-U.S. Bank N.A.)
1.53%, 04/01/32(b)(c) -- VMIG-1 20,000 20,000,000
- -------------------------------------------------------------------------------------------
Williamsburg (City of) Educational Building
(Cumberland Project); Refunding &
Improvement VRD Series 2002 RB
(LOC-Fifth Third Bank)
1.51%, 09/01/32(b)(c) A-1+ -- 1,790 1,790,000
===========================================================================================
42,859,010
===========================================================================================
LOUISIANA-0.95%
Eagle Tax Exempt Trust (City of New Orleans);
VRD Series 2000-1801 COP (Acquired
10/10/00; Cost $6,000,000)
1.75%, 12/01/21(c)(d)(e) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Louisiana (State of) Offshore Terminal
Authority (Loop LLC Project); Refunding
Deepwater Port Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.69%, 10/01/19(b)(c) A-1+ VMIG-1 16,400 16,400,000
- -------------------------------------------------------------------------------------------
Louisiana (State of) Public Facilities
Authority (Glen Retirement System Project);
VRD Series 2001 RB (LOC-AmSouth Bank)
(Acquired 08/15/01; Cost $3,380,000)
1.84%, 08/01/16(b)(c)(d) -- VMIG-1 3,380 3,380,000
- -------------------------------------------------------------------------------------------
Louisiana (State of); Unlimited Tax Series
1998 B GO
5.50%, 04/15/05(f) AAA Aaa 1,775 1,815,232
===========================================================================================
27,595,232
===========================================================================================
MAINE-0.29%
Maine (State of) Housing Authority; Mortgage
Purchase VRD Series 2003 E-1 RB
1.73%, 11/15/30(c)(f) A-1+ VMIG-1 8,585 8,585,000
===========================================================================================
</Table>
F-16
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MARYLAND-0.96%
Anne Arundel (County of); Unlimited Tax
Series 2002 GO
4.25%, 03/01/05 AA+ Aa1 $ 1,740 $ 1,762,823
- -------------------------------------------------------------------------------------------
Frederick (County of) Retirement Community
(Buckingham's Choice Inc. Project); VRD
Series 1997 C RB
(LOC-Branch Banking & Trust)
1.75%, 01/01/27(b)(c) A-1 -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Hyattsville (City of) (Safeway Inc.
Projects); Refunding VRD Series 1991 IDR
(LOC-Deutsche Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1 -- 740 740,000
- -------------------------------------------------------------------------------------------
Maryland (State of) Economic Development
Corp.
(YMCA of Central Maryland Inc. Project);
VRD Series 2003 RB
(LOC-Branch Banking & Trust)
1.72%, 04/01/28(b)(c) -- VMIG-1 3,800 3,800,000
- -------------------------------------------------------------------------------------------
Maryland (State of) Health & Higher
Educational Facilities Authority (Pooled
Loan Program); VRD Series 1994 D RB
(LOC-Bank of America N.A.) (Acquired
07/01/04; Cost $11,900,000)
1.70%, 01/01/29(b)(c)(d) A-1+ -- 11,900 11,900,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Maryland Health & Higher
Educational Facilities Authority);
VRD Floating Rate Trust Ctfs. Series
2003-829 RB
(Acquired 06/19/03; Cost $3,800,000)
1.73%, 08/15/38(c)(d)(e) -- VMIG-1 3,800 3,800,000
===========================================================================================
28,002,823
===========================================================================================
MASSACHUSETTS-0.99%
Billerica (City of); Limited Tax Series 2004
BAN GO
2.00%, 01/07/05 SP-1+ MIG-1 18,000 18,042,016
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Development Finance
Agency
(Briarwood Retirement); Series 2004 A RB
(LOC-Sovereign Bank, Comerica Bank)
1.68%, 01/01/35(b)(c) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Housing Finance
Agency;
Housing VRD Series 2003 F RB
1.70%, 12/01/37(c)(f) A-1+ VMIG-1 4,200 4,200,000
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Water Resources
Authority;
Series 1993 C RB
5.25%, 12/01/04(g)(l) NRR Aaa 1,460 1,499,158
===========================================================================================
28,741,174
===========================================================================================
MICHIGAN-3.41%
Dearborn (City of) Economic Development Corp.
(Henry Ford Village Inc. Project); VRD
Limited Tax Series 1998 IDR (LOC-Comerica
Bank)
1.74%, 10/01/23(b)(c)(o) -- -- 8,600 8,600,000
- -------------------------------------------------------------------------------------------
</Table>
F-17
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Eagle Tax Exempt Trust (City of Detroit
School District);
VRD Unlimited Tax Series 2002-6014 Class A
GO
(Acquired 11/06/02; Cost $7,105,000)
1.75%, 05/01/32(c)(d)(e) A-1+ -- $ 7,105 $ 7,105,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Detroit Sewage
Disposal System);
VRD Series 2001 A112 RB
(Acquired 10/31/01; Cost $4,910,000)
1.74%, 07/01/32(c)(d)(e) -- VMIG-1 4,910 4,910,000
- -------------------------------------------------------------------------------------------
VRD Series 2003 B41 RB
(Acquired 07/09/03; Cost $6,770,000)
1.74%, 07/01/26(c)(d)(e) -- VMIG-1 6,770 6,770,000
- -------------------------------------------------------------------------------------------
First Union MERLOTS (City of Detroit Water
Supply System);
VRD Series 1999 D RB (Acquired 01/21/00;
Cost $10,000,000)
1.74%, 07/01/29(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Michigan
Hospital Finance Authority); VRD Series
1997 X RB
(Acquired 12/12/03; Cost $15,000,000)
1.74%, 08/15/24(c)(d)(e) -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Kalamazoo (County of) Economic Development
Corp. (Heritage Community Project);
Refunding VRD Limited Tax Series 2004 RB
(LOC-Fifth Third Bank)
1.69%, 05/15/17(b)(c) A-1+ -- 5,405 5,405,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Higher Educational
Facilities Authority
(Hope College); Refunding VRD Limited Tax
Series 2004 RB
(LOC-JPMorgan Chase Bank)
1.73%, 04/01/34(b)(c) A-1 -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Hospital Finance
Authority
(Holland Community Hospital); VRD Series
2004 B RB
(LOC-JPMorgan Chase Bank)
1.73%, 01/01/34(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Municipal Bond Authority;
Series 2004 B-2 RN (LOC-JPMorgan Chase
Bank)
3.00%, 08/23/05(b) SP-1+ -- 15,000 15,188,557
- -------------------------------------------------------------------------------------------
Michigan (State of) Strategic Fund (Van Andel
Research Institute Project); VRD Limited
Tax Series 1997 RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 11/01/27(b)(c) A-1 -- 12,800 12,800,000
- -------------------------------------------------------------------------------------------
Oakland (County of) Economic Development
Corp. (Rochester College Project); VRD
Limited Obligation Series 2001 RB
(LOC-JPMorgan Chase Bank)
1.80%, 08/01/21(b)(c) -- VMIG-1 1,848 1,848,000
- -------------------------------------------------------------------------------------------
Southfield (City of) (Lawrence Tech
University Project);
Economic Development VRD Series 2001 RB
(LOC-JPMorgan Chase Bank)
1.70%, 10/01/31(b)(c) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-18
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Troy (City of) School District; Refunding
School Building & Site Unlimited Tax Series
2004 GO
3.00%, 05/01/05 AA+ Aa1 $ 1,805 $ 1,821,650
===========================================================================================
99,448,207
===========================================================================================
MINNESOTA-4.83%
Golden Valley (City of) (Unicare Homes Inc.
Project);
VRD Series 1984 IDR (LOC-ABN AMRO Bank
N.V.)
1.67%, 09/01/14(b)(c) A-1+ -- 4,400 4,400,000
- -------------------------------------------------------------------------------------------
J.P. Morgan PUTTERs (State of Minnesota
Public Facilities Authority); VRD Drinking
Water Series 2002-319 COP
(Acquired 07/31/03; Cost $14,030,000)
1.71%, 03/01/21(c)(d)(e) A-1 -- 14,030 14,030,000
- -------------------------------------------------------------------------------------------
Maple Grove (City of) (Heritage Christian
Academy);
Economic Development VRD Series 2004 RB
(LOC-U.S. Bank N.A.)
1.69%, 07/01/29(b)(c) A-1+ -- 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Minneapolis (City of) (Minnehaha Academy
Project);
VRD Series 2001 RB (LOC-U.S. Bank N.A.)
1.87%, 05/01/26(b)(m)(o) -- -- 2,500 2,500,000
- -------------------------------------------------------------------------------------------
Minneapolis-St. Paul (Cities of) Metropolitan
Council of Minnesota; Unlimited Tax Series
2002 D GO
5.00%, 02/01/05 AAA Aaa 1,190 1,205,464
- -------------------------------------------------------------------------------------------
Minnesota (State of); Refunding Unlimited Tax
Series 2003 GO
2.00%, 08/01/05 AAA Aa1 2,240 2,250,153
- -------------------------------------------------------------------------------------------
Rochester (City of) Health Care Facilities
(Mayo Foundation); Commercial Paper Notes,
Series 2000 A
1.15%, 10/12/04 A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Series 2000 B
1.15%, 11/09/04 A-1+ -- 20,500 20,500,000
- -------------------------------------------------------------------------------------------
Series 2000 C
1.40%, 10/14/04 A-1+ -- 33,500 33,500,000
- -------------------------------------------------------------------------------------------
Series 2001 A
1.13%, 10/12/04 -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Series 2001 B
1.13%, 10/12/04 -- VMIG-1 10,600 10,600,000
- -------------------------------------------------------------------------------------------
Series 2001 C
1.40%, 10/14/04 -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Adjustable Tender Series 1998 F
1.15%, 10/12/04 A-1+ -- 8,000 8,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-19
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MINNESOTA-(CONTINUED)
St. Paul (City of) Housing & Redevelopment
Authority
(Science Museum of Minnesota); VRD Series
1997 A RB
(LOC-U.S. Bank N.A.)
1.72%, 05/01/27(b)(c) -- VMIG-1 $16,260 $ 16,260,000
===========================================================================================
140,745,617
===========================================================================================
MISSISSIPPI-2.50%
ABN AMRO Munitops Ctfs. Trust (State of
Mississippi Development Board-Jackson Water
& Sewer); Multi-State Non-AMT
VRD Series 2002-22 Ctfs. (Acquired
09/10/03; Cost $9,995,000)
1.76%, 09/01/10(c)(d)(e) -- VMIG-1 9,995 9,995,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of
Mississippi);
VRD Unlimited Tax Series 2002-6018 Class A
COP
(Acquired 11/20/02; Cost $3,200,000)
1.75%, 11/01/22(c)(d)(e) A-1+ -- 3,200 3,200,000
- -------------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Jackson Medical Mall); VRD Series 2000 A
RB (LOC-JPMorgan Chase Bank)
1.70%, 11/01/18(b)(c) A-1 -- 5,300 5,300,000
- -------------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Mississippi College Project); VRD Series
2003 RB
(LOC-AmSouth Bank) (Acquired 07/17/03; Cost
$9,600,000)
1.84%, 07/01/23(b)(c)(d) -- VMIG-1 9,600 9,600,000
- -------------------------------------------------------------------------------------------
Perry (County of) (Leaf River Forest Products
Project); Refunding VRD Series 2002 PCR
(LOC-Citibank N.A.)
1.72%, 02/01/22(b)(c) A-1+ -- 36,500 36,500,000
- -------------------------------------------------------------------------------------------
University of Mississippi Educational
Building Corp.
(Campus Improvements Project); VRD Series
2000 RB
1.74%, 10/01/20(c)(f) -- VMIG-1 8,235 8,235,000
===========================================================================================
72,830,000
===========================================================================================
MISSOURI-0.96%
Missouri (State of) Development Finance Board
(Center of Creative Arts Project); Cultural
Facilities VRD Series 2004 RB
(LOC-National City Bank)
1.74%, 07/01/24(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority (Lutheran Church);
Educational Facilities VRD Series 2004 A RB
(LOC-Bank of America N.A.)
1.74%, 07/01/29(b)(m) -- VMIG-1 5,740 5,740,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority (Southwest Baptist
University Project); Educational Facilities
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.77%, 10/01/33(b)(m) A-1+ -- 5,950 5,950,000
- -------------------------------------------------------------------------------------------
</Table>
F-20
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MISSOURI-(CONTINUED)
Missouri (State of) Health & Educational
Facilities Authority (Washington University
Project); Educational Facilities VRD Series
1985 B RB
1.73%, 09/01/10(c) A-1+ VMIG-1 $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------------------
VRD Series 1996 C RB
1.70%, 09/01/30(m) A-1+ VMIG-1 1,300 1,300,000
- -------------------------------------------------------------------------------------------
VRD Series 1996 D RB
1.70%, 09/01/30(m) A-1+ VMIG-1 1,500 1,500,000
- -------------------------------------------------------------------------------------------
VRD Series 2000 C RB
1.70%, 03/01/40(m) A-1+ VMIG-1 4,300 4,300,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority
(Cox Health System); Refunding VRD Series
1997 RB
1.70%, 06/01/15(f)(m) A-1+ VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
St. Louis (County of) Industrial Development
Authority
(Friendship Village of South County); VRD
Series 2002 B IDR
(LOC-ABN AMRO Bank N.V.)
1.67%, 09/01/22(b)(c) A-1 -- 2,915 2,915,000
===========================================================================================
28,005,000
===========================================================================================
MONTANA-0.39%
Montana (State of) Facility Finance Authority
(Mission Ridge Project); VRD Series 2002 RB
(LOC-ABN AMRO Bank N.V.)
1.72%, 08/01/27(b)(c)(i) -- -- 11,365 11,365,000
===========================================================================================
NEBRASKA-1.51%
Nebhelp Inc.; Multi-Mode VRD
Series 1985 A RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 5,995 5,995,000
- -------------------------------------------------------------------------------------------
Series 1985 B RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 3,590 3,590,000
- -------------------------------------------------------------------------------------------
Series 1985 D RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 5,865 5,865,000
- -------------------------------------------------------------------------------------------
Series 1985 E RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 28,635 28,635,000
===========================================================================================
44,085,000
===========================================================================================
NEVADA-0.88%
ABN AMRO Munitops Ctfs. Trust (County of
Washoe); Refunding VRD Limited Tax Series
2001-24 Single Asset Trust Ctfs. (Acquired
06/21/01; Cost $5,500,000)
1.75%, 07/01/09(c)(d)(e) -- VMIG-1 5,500 5,500,000
- -------------------------------------------------------------------------------------------
Carson (City of) (Carson-Tahoe Hospital
Project);
Hospital VRD Series 2003 B RB (LOC-U.S.
Bank N.A.)
1.69%, 09/01/33(b)(c) A-1+ -- 18,000 18,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-21
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
NEVADA-(CONTINUED)
Clark (County of); Refunding Limited Tax
Series 1998 B GO
5.25%, 11/01/04 AA Aa2 $ 2,245 $ 2,252,753
===========================================================================================
25,752,753
===========================================================================================
NEW HAMPSHIRE-0.45%
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(New Hampshire Higher Educational & Health
Facilities Authority);
Refunding VRD
Series 2003-772 RB
(Acquired 01/22/03; Cost $5,475,000)
1.75%, 01/01/17(c)(d)(e) A-1 -- 5,475 5,475,000
- -------------------------------------------------------------------------------------------
Series 2003-866 RB
(Acquired 10/23/03; Cost $7,485,000)
1.75%, 08/15/21(c)(d)(e) A-1 -- 7,485 7,485,000
===========================================================================================
12,960,000
===========================================================================================
NEW MEXICO-0.05%
Albuquerque (City of) Educational Facilities
(Albuquerque Academy Project); VRD Series
2002 RB
1.73%, 10/15/16(c) AA VMIG-1 1,500 1,500,000
===========================================================================================
NEW YORK-0.34%
ABN AMRO Munitops Ctfs. Trust (Triborough
Bridge & Tunnel Authority); Non-AMT VRD
Series 2002-31 Ctfs.
(Acquired 03/24/04; Cost $10,000,000)
1.70%, 11/15/10(c)(d)(e) -- VMIG-1 10,000 10,000,000
===========================================================================================
NORTH CAROLINA-1.88%
Mecklenburg (County of); Public Improvement
Unlimited Tax Series 1998 B GO
4.40%, 02/01/05 AAA Aaa 13,000 13,130,922
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Barton College); Educational Facilities
VRD Series 2004 RB
(LOC-Branch Banking & Trust)
1.72%, 07/01/19(b)(c) -- VMIG-1 5,750 5,750,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Elon College); VRD Series 2001 A RB
(LOC-Bank of America N.A.)
1.68%, 01/01/14(b)(c)(i) -- -- 4,500 4,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Goodwill Community Foundation Project);
VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.70%, 04/01/22(b)(c)(i) -- -- 2,165 2,165,000
- -------------------------------------------------------------------------------------------
</Table>
F-22
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
NORTH CAROLINA-(CONTINUED)
North Carolina (State of) Capital Facilities
Finance Agency (Thompson Children's Home);
Educational Facilities VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.70%, 12/01/20(b)(c)(i) -- -- $ 3,070 $ 3,070,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency (University of North
Carolina at Pembroke University
Foundation); Student Housing VRD Series
2001 A RB
(LOC-Wachovia Bank N.A.)
1.82%, 07/01/31(b)(c) -- VMIG-1 11,240 11,240,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Wolfpack Club Project); VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.70%, 04/01/12(b)(c)(i) -- -- 9,500 9,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission; Refunding First Mortgage Health
Care Facilities VRD Series 2004 C RB
(LOC-SunTrust Bank)
1.72%, 11/01/27(b)(c) -- VMIG-1 3,500 3,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of); Public Improvement
Unlimited Tax Series 2002 A GO
5.00%, 03/01/05 AAA Aa1 1,865 1,892,943
===========================================================================================
54,748,865
===========================================================================================
OHIO-4.63%
Akron (City of) (Community Learning Centers);
Income Tax Revenue Series 2004 B RB
2.00%, 12/01/04(f) AAA Aaa 1,000 1,001,488
- -------------------------------------------------------------------------------------------
Akron (City of) Bath & Copley (Townships of)
Joint Township Hospital District (Summa
Health Systems); VRD Series 2004 B RB
(LOC-JPMorgan Chase Bank)
1.71%, 11/01/34(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Allen (County of); Refunding Limited Tax
Series 2002 GO
1.70%, 12/01/04(f) -- Aaa 1,000 1,001,075
- -------------------------------------------------------------------------------------------
Butler (County of) Health Care Facilities
(Lifesphere Project); Refunding &
Improvement VRD Series 2002 RB
(LOC-U.S. Bank N.A.)
1.70%, 05/01/27(b)(c) A-1+ -- 8,500 8,500,000
- -------------------------------------------------------------------------------------------
Cambridge (City of) Hospital Facilities
(Regional Medical Center Project);
Refunding & Improvement VRD Series 2001 RB
(LOC-National City Bank)
1.73%, 12/01/21(b)(c) -- VMIG-1 11,515 11,515,000
- -------------------------------------------------------------------------------------------
Centerville (City of) (Bethany Lutheran
Village Project);
Health Care VRD Series 1994 RB
(LOC-National City Bank)
1.73%, 11/01/13(b)(c) -- VMIG-1 2,985 2,985,000
- -------------------------------------------------------------------------------------------
</Table>
F-23
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OHIO-(CONTINUED)
Cincinnati (City of) & Hamilton (County of)
Port Authority (Kenwood Office Association
Project); Economic Development VRD Series
1985 RB (LOC-Fifth Third Bank)
1.77%, 09/01/25(b)(m) A-1+ -- $ 1,185 $ 1,185,000
- -------------------------------------------------------------------------------------------
Cleveland Heights (City of); Limited Tax
Series 2004 BAN GO
2.00%, 08/18/05(o) -- -- 3,234 3,245,177
- -------------------------------------------------------------------------------------------
Cuyahoga (County of) Continuing Care
Facilities; Refunding VRD Series 1999 RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 02/01/29(b)(c) A-1+ -- 15,985 15,985,000
- -------------------------------------------------------------------------------------------
Cuyahoga (County of) Health Care Facilities
(Judson Retirement Community); Refunding
VRD Series 2000 RB
(LOC-National City Bank)
1.72%, 11/15/19(b)(c) A-1 -- 800 800,000
- -------------------------------------------------------------------------------------------
Cuyahoga Falls (City of); Limited Tax Series
2003 Notes
2.00%, 12/16/04 -- MIG-1 7,000 7,009,153
- -------------------------------------------------------------------------------------------
Hamilton (County of) Economic Development
(St. Xavier High School Project); VRD
Series 2003 RB
(LOC-Fifth Third Bank)
1.51%, 04/01/28(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Lake (County of); Limited Tax Series 2004 BAN
GO
2.00%, 04/14/05(o) -- -- 3,000 3,013,944
- -------------------------------------------------------------------------------------------
Lakewood (City of) (St. Edward High School
Project);
Educational Facilities VRD Series 2000 RB
(LOC-Fifth Third Bank)
1.69%, 08/01/30(b)(c) -- VMIG-1 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Lorain (County of) (Elyria United Methodist
Village);
Refunding Hospital VRD Series 1996 B RB
(LOC-JPMorgan Chase Bank)
1.71%, 06/01/12(b)(c) A-1 VMIG-1 4,685 4,685,000
- -------------------------------------------------------------------------------------------
Lorain (County of) (EMH Regional Medical
Center Project);
Hospital Facilities VRD Series 2001 RB
(LOC-National City Bank)
1.76%, 05/01/26(b)(c)(o) -- -- 15,170 15,170,000
- -------------------------------------------------------------------------------------------
Lorain (County of) Independent Living
Facilities
(Elyria United Methodist Project); VRD
Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.71%, 06/01/25(b)(c) A-1+ -- 9,125 9,125,000
- -------------------------------------------------------------------------------------------
Mahoning (County of) Hospital Facilities
(Forum Health Obligation Group);
VRD Series 1997 B RB
1.70%, 12/01/28(c)(f) A-1+ VMIG-1 10,500 10,500,000
- -------------------------------------------------------------------------------------------
Series 2002 B RB (LOC-Fifth Third Bank)
1.73%, 12/01/27(b)(c) -- VMIG-1 7,200 7,200,000
- -------------------------------------------------------------------------------------------
</Table>
F-24
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OHIO-(CONTINUED)
Marion (County of) (Pooled Lease Program);
Hospital Improvement VRD Series 1990 RB
(LOC-JPMorgan Chase Bank)
1.72%, 08/01/20(b)(c) A-1 -- $ 4,535 $ 4,535,000
- -------------------------------------------------------------------------------------------
Middleburg Heights (City of) (Southwest
General Health);
Hospital Improvement Series 1997 RB
(LOC-Fifth Third Bank)
1.73%, 08/15/22(b)(c) A-1+ -- 5,405 5,405,000
- -------------------------------------------------------------------------------------------
Montgomery (County of) (St. Vincent DePaul
Society);
Limited Obligation VRD Series 1996 RB
(LOC-National City Bank)
1.73%, 12/01/10(b)(c) A-1 -- 1,900 1,900,000
- -------------------------------------------------------------------------------------------
Portage (County of) (Robinson Memorial
Hospital);
Hospital VRD Series 2002 RB (LOC-JPMorgan
Chase Bank)
1.73%, 05/01/17(b)(c) -- VMIG-1 6,255 6,255,000
- -------------------------------------------------------------------------------------------
Solon (City of); Unlimited Tax Series 2003
BAN GO
2.00%, 12/09/04(o) -- -- 2,800 2,804,536
- -------------------------------------------------------------------------------------------
Twinsburg (City of) School District;
Refunding Unlimited Tax Series 2004 GO
2.00%, 12/01/04(f) -- Aaa 1,800 1,802,977
===========================================================================================
134,923,350
===========================================================================================
OKLAHOMA-1.79%
Mustang (City of) Improvement Authority;
Refunding Series 1995 RB
5.38%, 12/01/04(g)(l) AAA Aaa 3,135 3,188,215
- -------------------------------------------------------------------------------------------
Oklahoma (County of) Finance Authority
(Oxford Oaks Apartments Projects);
Refunding Multi-Family Housing VRD Series
2000 RB
(CEP-Federal National Mortgage Association)
1.71%, 07/15/30(c) A-1+ -- 27,695 27,695,000
- -------------------------------------------------------------------------------------------
Oklahoma (State of) Development Finance
Authority
(Capitol Dome Project); VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.79%, 06/01/11(b)(c) A-1+ -- 3,785 3,785,000
- -------------------------------------------------------------------------------------------
Oklahoma (State of) Water Resource Board;
State Loan Program VRD Series 2003 A RB
0.98%, 10/01/04(g)(h) A-1+ -- 14,935 14,935,000
- -------------------------------------------------------------------------------------------
Tulsa (County of) Industrial Authority;
Capital Improvements Series 2003 B RB
4.00%, 05/15/05 AA -- 2,500 2,537,739
===========================================================================================
52,140,954
===========================================================================================
</Table>
F-25
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OREGON-1.15%
Oregon (State of) Health, Housing,
Educational & Cultural Facilities Authority
(Quatama Crossing LLC Housing Project);
VRD Series 1998 RB (LOC-U.S. Bank N.A.)
1.74%, 01/01/31(b)(c) -- Aa2 $ 7,430 $ 7,430,000
- -------------------------------------------------------------------------------------------
Oregon (State of); Unlimited Tax Series 2003
TAN GO
2.25%, 11/15/04 SP-1+ MIG-1 25,000 25,030,450
- -------------------------------------------------------------------------------------------
Salem (City of) Water & Sewer; Refunding
Series 2004 RB
3.00%, 05/01/05(f) AAA Aaa 1,175 1,184,588
===========================================================================================
33,645,038
===========================================================================================
PENNSYLVANIA-2.78%
ABN AMRO Munitops Ctfs. Trust (State of
Pennsylvania Public School Building
Authority); Non-AMT VRD
Series 2001-30 Ctfs. (Acquired 10/31/02;
Cost $5,000,000)
1.74%, 09/01/09(c)(d)(e) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Series 2003-24 Ctfs. (Acquired 03/08/04;
Cost $7,000,000)
1.74%, 06/01/11(c)(d)(e) -- VMIG-1 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Allegheny (County of) Hospital Development
Authority (ACES-Presbyterian University
Hospital); VRD Series 1988 B1 RB
(LOC-JPMorgan Chase Bank)
1.70%, 03/01/18(b)(c) -- VMIG-1 2,085 2,085,000
- -------------------------------------------------------------------------------------------
Allegheny (County of) Industrial Development
Authority
(Carnegie Museums of Pittsburgh); VRD
Series 2002 IDR
(LOC-Royal Bank of Scotland)
1.70%, 08/01/32(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Altoona (City of) Authority; Water Series
1994 A RB
6.50%, 11/01/04(g)(l) AAA NRR 1,700 1,741,627
- -------------------------------------------------------------------------------------------
Berks (County of) Industrial Development
Authority
(Lutheran Services); Health Care VRD Series
1998 A IDR
1.69%, 01/01/28(c)(f) -- VMIG-1 9,588 9,588,000
- -------------------------------------------------------------------------------------------
Chartiers Valley (Community of) Industrial &
Commercial Development Authority (Asbury
Villas Project);
VRD Series 2000 B IDR (LOC-ABN AMRO Bank
N.V.)
1.72%, 12/01/30(b)(c) A-1 -- 3,000 3,000,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Delaware Valley
Regional);
VRD Series 2001-3801 Class A COP
(Acquired 06/04/01; Cost $8,900,000)
1.75%, 08/01/28(c)(d)(e) A-1+ -- 8,900 8,900,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Scranton &
County of Lackawanna Health & Welfare
Authority); VRD Series 2002 A-18 RB
(Acquired 03/22/02; Cost $2,860,000)
1.74%, 03/01/15(c)(d)(e) -- VMIG-1 2,860 2,860,000
- -------------------------------------------------------------------------------------------
</Table>
F-26
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
PENNSYLVANIA-(CONTINUED)
Franklin (County of) Industrial Development
Authority (Chambersburg Hospital
Obligation);
Health Care VRD Series 2000 IDR
1.79%, 12/01/24(c)(f) A-1 Aaa $ 3,575 $ 3,575,000
- -------------------------------------------------------------------------------------------
Geisinger Authority Health System (Geisinger
Health System Foundation); Refunding VRD
Series 2000 RB
1.71%, 08/01/28(m) A-1+ VMIG-1 25,950 25,950,000
- -------------------------------------------------------------------------------------------
Lehigh (County of) Industrial Development
Authority
(Allegheny Electric Coop. Inc.);
VRD Series 1984 PCR (LOC-Rabobank
Nederland)
1.30%, 10/01/14(b)(j) A-1+ -- 7,180 7,180,000
- -------------------------------------------------------------------------------------------
Refunding VRD Series 1984 PCR (LOC-Rabobank
Nederland)
1.30%, 06/01/14(b)(j) A-1+ -- 1,030 1,030,000
- -------------------------------------------------------------------------------------------
Philadelphia (City of) Industrial Development
Authority
(Girard Estate Aramark Project); VRD Series
2002 IDR
(LOC-JP Morgan Chase Bank)
1.70%, 06/01/32(b)(c) A-1+ -- 1,000 1,000,000
===========================================================================================
80,909,627
===========================================================================================
SOUTH CAROLINA-2.07%
Cherokee (County of) (Newark Electronics
Division); Industrial VRD Series 1985 RB
(LOC-ABN AMRO Bank N.V.)
1.71%, 12/01/15(b)(c) A-1 -- 6,500 6,500,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of South
Carolina Public Service Authority); VRD
Series 2000-4001 Class A COP
(Acquired 09/08/00; Cost $10,100,000)
1.75%, 01/01/22(c)(d)(e) A-1+ -- 10,100 10,100,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of South Carolina
Public Service Authority); VRD Series 2000
L RB
(Acquired 02/25/00; Cost $11,590,000)
1.74%, 01/01/22(c)(d)(e) -- VMIG-1 11,590 11,590,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of South Carolina Transportation
Infrastructure Bank); Floating Rate Trust
Ctfs. VRD Series 2002-728 RB (Acquired
11/13/02; Cost $7,185,000)
1.73%, 10/01/22(c)(d)(e) -- VMIG-1 7,185 7,185,000
- -------------------------------------------------------------------------------------------
Oconee (County of) (Duke); Refunding VRD
Series 1993 PCR (LOC-JPMorgan Chase Bank)
1.70%, 02/01/17(b)(c) -- P-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Educational
Facilities Authority
for Non-Profit Institutions (The Allen
University Project);
VRD Series 1998 RB (LOC-Bank of America
N.A.)
(Acquired 03/27/01; Cost $2,525,000)
1.75%, 09/01/18(b)(c)(d) A-1+ -- 2,525 2,525,000
- -------------------------------------------------------------------------------------------
</Table>
F-27
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
SOUTH CAROLINA-(CONTINUED)
South Carolina (State of) Educational
Facilities Authority
for Non-Profit Institutions (Morris College
Project);
VRD Series 1997 RB (LOC-Bank of America
N.A.)
(Acquired 07/30/02; Cost $2,100,000)
1.75%, 07/01/17(b)(c)(d) A-1+ -- $ 2,100 $ 2,100,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Carolina Children's
Home Project); VRD Series 2003 RB
(LOC-Branch Banking & Trust)
1.72%, 03/01/23(b)(c) -- VMIG-1 3,335 3,335,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Carolina Piedmont
Foundation Project); VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.75%, 09/01/32(b)(c)(i) -- -- 4,000 4,000,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Catholic Diocese of
South Carolina Project); VRD Series 1998 RB
(LOC-Bank of America N.A.) (Acquired
07/23/02; Cost $2,555,000)
1.75%, 09/01/18(b)(c)(d) A-1+ -- 2,555 2,555,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Presbyterian Home of
South Carolina Project);
VRD Series 2003 A RB (LOC-Wachovia Bank
N.A.)
1.75%, 04/01/20(b)(c) A-1 -- 4,535 4,535,000
===========================================================================================
60,425,000
===========================================================================================
SOUTH DAKOTA-0.11%
South Dakota (State of) Health & Educational
Facilities Authority (University of Sioux
Falls); VRD Series 2001 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 10/01/16(b)(c) A-1+ -- 3,155 3,155,000
===========================================================================================
TENNESSEE-5.46%
Eagle Tax Exempt Trust (City of Chattanooga);
VRD Series 2000-4202 Class A COP (Acquired
10/10/00; Cost $14,040,000)
1.75%, 10/01/27(c)(d)(e) A-1+ -- 14,040 14,040,000
- -------------------------------------------------------------------------------------------
Jackson (City of) Energy Authority; Electric
Systems VRD Series 2003 B RB
1.70%, 11/01/26(c)(f) -- VMIG-1 12,700 12,700,000
- -------------------------------------------------------------------------------------------
Jackson (City of) Health & Educational
Facilities Board (Trinity Christian
Academy); Educational Facilities VRD Series
2002 RB
(LOC-AmSouth Bank)
1.84%, 03/01/22(b)(c) -- VMIG-1 5,400 5,400,000
- -------------------------------------------------------------------------------------------
Knox (County of) Health Educational & Housing
Facility Board (Volunteer Student Housing
LLC Project); Student Housing VRD Series
2002 RB (LOC-Wachovia Bank N.A.)
1.69%, 09/01/34(b)(c) -- VMIG-1 27,020 27,020,000
- -------------------------------------------------------------------------------------------
</Table>
F-28
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TENNESSEE-(CONTINUED)
Memphis (City of); Electric System Sub-Series
2003 A RB
2.00%, 12/01/04 AA- Aa3 $10,000 $ 10,014,023
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(City of Nashville & County of Davidson);
Unlimited Tax Series 2003-871 GO
(Acquired 11/17/03; Cost $4,995,000)
1.73%, 10/15/10(c)(d)(e) -- VMIG-1 4,995 4,995,000
- -------------------------------------------------------------------------------------------
Sevier (County of) Public Building Authority
(Local Government Public Improvement);
VRD Series 1995 A RB
1.72%, 06/01/15(c)(f) AAA VMIG-1 5,230 5,230,000
- -------------------------------------------------------------------------------------------
VRD Series 1995 B-2 RB
1.72%, 06/01/06(c)(f) AAA VMIG-1 1,200 1,200,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 I A-1 RB
1.72%, 06/01/22(c)(f) -- VMIG-1 5,900 5,900,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-1 RB
1.72%, 06/01/21(c)(f) -- VMIG-1 2,100 2,100,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-3 RB
1.72%, 06/01/10(c)(f) -- VMIG-1 1,485 1,485,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-5 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 1,320 1,320,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II F-1 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 1,190 1,190,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II F-5 RB
1.72%, 06/01/27(c)(f) -- VMIG-1 2,265 2,265,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-1 RB
1.72%, 06/01/07(c)(f) -- VMIG-1 14,950 14,950,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-3 RB
1.72%, 06/01/19(c)(f) -- VMIG-1 1,425 1,425,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-4 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 300 300,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III B-2 RB
1.72%, 06/01/19(c)(f) -- VMIG-1 5,650 5,650,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III C-3 RB
1.72%, 06/01/18(c)(f) -- VMIG-1 3,475 3,475,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III C-4 RB
1.72%, 06/01/20(c)(f) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
VRD Series 1999 II A-1 RB
1.72%, 06/01/24(c)(f) -- VMIG-1 6,300 6,300,000
- -------------------------------------------------------------------------------------------
VRD Series 1999 II B-1 RB
1.72%, 06/01/25(c)(f) -- VMIG-1 1,700 1,700,000
- -------------------------------------------------------------------------------------------
</Table>
F-29
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TENNESSEE-(CONTINUED)
Shelby (County of) Health, Educational &
Housing Facilities Board (Briarcrest
Christian School System); Educational
Facilities VRD Series 2002 RB (LOC-SunTrust
Bank)
1.69%, 04/01/22(b)(c) -- VMIG-1 $11,050 $ 11,050,000
- -------------------------------------------------------------------------------------------
Shelby (County of) Health, Educational &
Housing Facilities Board (St. Benedict
Auburndale School); VRD Series 2003 RB
(LOC-AmSouth Bank)
1.74%, 05/01/33(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Tennessee (State of) Local Development
Authority (Community Provider Pooled Loan
Program); Series 1994 RB
6.45%, 10/01/04(g)(l) NRR -- 1,000 1,020,000
- -------------------------------------------------------------------------------------------
Washington (County of) (Capital Outlay
Notes);
Refunding Unlimited Tax Series 2002 GO
4.00%, 02/01/05(f) -- Aaa 1,000 1,009,664
- -------------------------------------------------------------------------------------------
Williamson (County of) Industrial Development
Board (Currey Ingram Academy); Educational
Facilities VRD Series 2003 RB
(LOC-SunTrust Bank)
1.75%, 04/01/23(b)(c) -- VMIG-1 2,500 2,500,000
===========================================================================================
159,238,687
===========================================================================================
TEXAS-11.84%
ABN AMRO Munitops Ctfs. Trust (City of
Leander Independent School District);
Unlimited Multi-State Non-AMT VRD Series
2002-16 Ctfs. (Acquired 08/20/03; Cost
$5,395,000)
1.75%, 08/15/10(c)(d)(e) -- VMIG-1 5,395 5,395,000
- -------------------------------------------------------------------------------------------
Alief (City of) Independent School District;
Unlimited Tax Series 1997 GO (CEP-Texas
Permanent School Fund)
6.60%, 02/15/05 AAA Aaa 1,000 1,020,512
- -------------------------------------------------------------------------------------------
Amarillo (City of) Health Facilities Corp.
(Panhandle Pooled Health Care); VRD Series
1985 ACES RB (LOC-BNP Paribas)
1.75%, 05/31/25(b)(c) -- VMIG-1 4,862 4,862,000
- -------------------------------------------------------------------------------------------
Austin (City of) Water & Wastewater System;
Refunding Series 2002 A RB
5.00%, 11/15/04(f) AAA Aaa 4,000 4,019,072
- -------------------------------------------------------------------------------------------
Austin (City of); Refunding Utility System
Series 1995 RB
5.60%, 05/15/05(g)(l) AAA Aaa 5,000 5,128,791
- -------------------------------------------------------------------------------------------
Austin (City of); Utility System Series 1994
RB
5.75%, 11/15/04(g)(i) AAA Aaa 2,605 2,619,767
- -------------------------------------------------------------------------------------------
Bexar (County of) Health Facilities
Development Corp.
(Air Force Village); VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.69%, 08/15/30(b)(c) A-1+ -- 19,500 19,500,000
- -------------------------------------------------------------------------------------------
</Table>
F-30
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Bexar (County of) Health Facilities
Development Corp.
(Warm Springs); Healthcare System VRD
Series 1997 RB
(LOC-JPMorgan Chase Bank)
1.74%, 09/01/27(b)(c) -- VMIG-1 $ 3,435 $ 3,435,000
- -------------------------------------------------------------------------------------------
Brownsville (City of) Utility Systems;
Refunding Sub. Lien VRD Series 2001 A RB
0.95%, 11/04/04(f)(g)(k) A-1+ VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Dallas (City of) Waterworks & Sewer System;
Refunding Series 2002 A RB
4.00%, 10/01/04 AA+ Aa2 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Dallas (City of); Limited Tax Series 2003 GO
3.50%, 02/15/05 AA+ Aa1 1,500 1,513,855
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Houston
Airport);
VRD Series 2000-4307 COP (Acquired
11/15/00; Cost $15,750,000)
1.75%, 07/01/28(c)(d)(e) A-1+ -- 15,750 15,750,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Houston Water
& Sewer);
VRD Series 1997-4305 Class A COP (Acquired
04/27/99; Cost $14,005,000)
1.75%, 12/01/27(c)(d)(e) A-1+ -- 14,005 14,005,000
- -------------------------------------------------------------------------------------------
VRD Series 2002-6019 Class A COP (Acquired
11/13/02; Cost $8,910,000)
1.75%, 12/01/30(c)(d)(e) A-1+ -- 8,910 8,910,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Harris County Toll
Road);
VRD Series 2001-4305 COP
(Acquired 05/08/01; Cost $7,390,000)
1.75%, 08/01/14(c)(d)(e) A-1+ -- 7,390 7,390,000
- -------------------------------------------------------------------------------------------
VRD Series 2002-6012 Class A COP
(Acquired 11/20/02; Cost $1,580,000)
1.75%, 08/15/30(c)(d)(e) A-1+ -- 1,580 1,580,000
- -------------------------------------------------------------------------------------------
El Paso (County of); Refunding Limited Tax
Series 2002 A GO
3.25%, 02/15/05(f) AAA Aaa 1,040 1,048,302
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Harris County Toll
Road);
VRD Series 2003 B16 RB (Acquired 02/19/03;
Cost $3,015,000)
1.57%, 08/15/25(c)(d)(e) -- VMIG-1 3,015 3,015,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Jefferson County Health
Facilities Development Corp.); VRD Series
2001 A83 RB
(Acquired 11/18/03; Cost $3,570,000)
1.20%, 11/16/04(d)(e)(g)(k)(n) A-1 -- 3,570 3,570,000
- -------------------------------------------------------------------------------------------
Fort Worth (City of); Limited Tax Series 2000
GO Ctfs.
6.25%, 03/01/05(g)(l) NRR NRR 5,000 5,105,817
- -------------------------------------------------------------------------------------------
Garland (City of) Industrial Development
Authority Inc. (Carroll Co. Project); VRD
Series 1984 IDR (LOC-Wells Fargo Bank N.A.)
(Acquired 09/03/03; Cost $2,300,000)
1.74%, 12/01/14(b)(c)(d) -- Aaa 2,300 2,300,000
- -------------------------------------------------------------------------------------------
</Table>
F-31
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Goose Creek (City of) Consolidated
Independent School District; Refunding
Unlimited Tax Series 2002 A GO
(CEP-Texas Permanent School Fund)
4.00%, 02/15/05 AAA Aaa $ 1,520 $ 1,536,322
- -------------------------------------------------------------------------------------------
Grand Prairie (City of) Housing Finance Corp.
(Lincoln Property Co.); Refunding
Multi-Family Housing VRD Series 1993 RB
(CEP-General Electric Corp.)
1.77%, 06/01/10(c) A-1+ -- 2,700 2,700,000
- -------------------------------------------------------------------------------------------
Grapevine (City of) Industrial Development
Corp.
(Southern Air Transport); Refunding Airport
Series 1993 RB
(LOC-JPMorgan Chase Bank)
1.77%, 03/01/10(b)(c) A-1+ -- 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Harris (County of) Cultural Education
Facilities Finance Corp. (Houston Music
Hall Foundation); VRD Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.74%, 06/01/29(b)(c) A-1+ -- 700 700,000
- -------------------------------------------------------------------------------------------
Harris (County of) Hospital District; Sub.
Lien Commercial Paper Series A RN (LOC-Bank
of America N.A.)
1.28%, 11/22/04(b) A-1+ -- 9,451 9,451,000
- -------------------------------------------------------------------------------------------
Harris (County of) Houston Texas Sports
Authority (Rodeo);
Jr. Lein VRD Series 2001 C RB
1.77%, 11/15/30(c)(f) A-1+ VMIG-1 6,400 6,400,000
- -------------------------------------------------------------------------------------------
Harris (County of); Permanent Improvement
Unlimited Tax Series 2003 GO
3.00%, 10/01/04 AA+ Aa1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Harris (County of); Refunding Unlimited Tax
Series 2001 GO
5.00%, 10/01/04 AA+ Aa1 4,970 4,970,000
- -------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corp. (AMOCO Project);
VRD Series 1985 PCR
1.15%, 11/01/04(g)(h) A-1+ P-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corp.
(AMOCO Project-Standard Oil Co.); VRD
Series 1983 PCR
1.40%, 03/01/05(g)(h) A-1+ Aa1 12,775 12,775,000
- -------------------------------------------------------------------------------------------
Houston (City of) Independent School District
(Schoolhouse);
Limited Tax Series 2004 GO
(CEP-Texas Permanent School Fund)
1.62%, 06/09/05(g)(k) A-1+ VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Houston (City of); Commercial Paper Notes
Series 2003 A GO
1.30%, 10/21/04 A-1+ P-1 20,000 20,000,000
- -------------------------------------------------------------------------------------------
1.37%, 11/15/04 A-1+ P-1 24,000 24,000,000
- -------------------------------------------------------------------------------------------
1.38%, 01/25/05 A-1+ P-1 13,400 13,400,000
- -------------------------------------------------------------------------------------------
Mansfield (City of); Refunding Unlimited Tax
VRD Series 2004 GO
2.00%, 02/15/05(f) AAA Aaa 855 857,910
- -------------------------------------------------------------------------------------------
</Table>
F-32
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Merrill Lynch P-Floats (City of Brazosport
Independent School District); Refunding
Unlimited Tax VRD Series 2003 PT-1690 GO
(Acquired 02/20/03; Cost $4,920,000)
1.73%, 08/15/10(c)(d)(e) -- VMIG-1 $ 4,920 $ 4,920,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (County of Harris
Hospital District);
VRD Series 2002 PT-665 RB (Acquired
10/02/02; Cost $5,935,000)
1.73%, 08/15/08(c)(d)(e) A-1+ -- 5,935 5,935,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Texas Affordable Housing Corp.);
Floating Rate Trust Ctfs. VRD Series
2003-780 RB
(Acquired 02/19/03; Cost $1,995,000)
1.73%, 09/01/22(c)(d)(e) -- VMIG-1 1,995 1,995,000
- -------------------------------------------------------------------------------------------
Northside Independent School District;
Refunding VRD Unlimited Tax Series 2003 B
GO (CEP-Texas Permanent School Fund)
1.75%, 08/01/05(g)(k) A-1+ VMIG-1 1,870 1,870,000
- -------------------------------------------------------------------------------------------
Pine Tree Independent School District;
Unlimited Tax Series 1994 GO (CEP-Texas
Permanent School Fund)
5.25%, 02/15/05(g)(k) NRR Aaa 910 923,135
- -------------------------------------------------------------------------------------------
San Antonio (City of) Water & Sewer System;
Commercial Paper Notes Series 2001 A GO
1.15%, 10/21/04 A-1+ P-1 29,900 29,900,000
- -------------------------------------------------------------------------------------------
Sherman (City of) Higher Education Finance
Corp. (Austin College Project); Higher
Education VRD Series 1997 RB
(LOC-Bank of America N.A.)
1.75%, 01/01/18(b)(c) A-1+ -- 12,800 12,800,000
- -------------------------------------------------------------------------------------------
Spring (City of) Independent School District;
Unlimited Tax Series 2004 GO (CEP-Texas
Permanent School Fund)
2.50%, 02/15/05 AAA Aaa 2,195 2,206,356
- -------------------------------------------------------------------------------------------
Texas (State of); Series 2004 TRAN
3.00%, 08/31/05 SP-1+ MIG-1 30,000 30,378,015
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (Southeast Texas Housing
Finance Corp.);
VRD Series 2001 A18 RB (Acquired 11/18/03;
Cost $4,130,000)
1.20%, 11/16/04(d)(e)(g)(k)(n) A-1 -- 4,130 4,130,000
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (University of Texas);
Refunding VRD Series 2003 B14 RB (Acquired
01/29/03; Cost $8,005,000)
1.72%, 08/15/22(c)(d)(e) -- VMIG-1 8,005 8,005,000
===========================================================================================
345,120,854
===========================================================================================
UTAH-1.47%
Davis (County of) Housing Authority (Fox
Creek Apartments); Refunding Multi-Family
Housing VRD Series 1997 A RB
(LOC-JPMorgan Chase Bank)
1.71%, 08/15/27(b)(c) A-1 -- 4,240 4,240,000
- -------------------------------------------------------------------------------------------
Davis (County of); Unlimited Tax Series 2004
TRAN
2.25%, 12/30/04 -- MIG-1 4,000 4,009,763
- -------------------------------------------------------------------------------------------
</Table>
F-33
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
UTAH-(CONTINUED)
First Union MERLOTs (Intermountain Power
Agency);
Power Supply VRD Series 2002 A59 RB
(Acquired 10/23/02; Cost $7,040,000)
1.74%, 07/01/10(c)(d)(e) -- VMIG-1 $ 7,040 $ 7,040,000
- -------------------------------------------------------------------------------------------
Intermountain Power Agency; Power Supply VRD
Series 1985 E RB
1.24%, 12/01/04(f)(g)(k) A-1+ VMIG-1 14,770 14,770,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (City of Murray
Hospital); VRD Series 2002 PA-1066 RB
(Acquired 10/02/02; Cost $5,995,000)
1.73%, 05/15/22(c)(d)(e) A-1 -- 5,995 5,995,000
- -------------------------------------------------------------------------------------------
Salt Lake (City of) (Gateway Project);
Special Assessment VRD Series 2003
(LOC-Citibank N.A.)
1.70%, 12/01/23(b)(c) A-1+ -- 5,850 5,850,000
- -------------------------------------------------------------------------------------------
Sanpete (County of) School Facilities
(Wasatch Academy);
VRD Series 2003 RB (LOC-U.S. Bank N.A.)
1.76%, 08/01/28(b)(c) A-1+ -- 900 900,000
===========================================================================================
42,804,763
===========================================================================================
VERMONT-0.22%
Vermont (State of) Student Assistance Corp.;
Student Loan VRD Series 1985 RB (LOC-State
Street Bank & Trust Co.)
1.35%, 01/01/08(b)(j) -- VMIG-1 2,640 2,640,000
- -------------------------------------------------------------------------------------------
Vermont (State of); Unlimited Tax Series 1994
A GO
6.40%, 01/15/05(g)(l) NRR NRR 3,510 3,632,758
===========================================================================================
6,272,758
===========================================================================================
VIRGINIA-0.82%
Chesapeake (City of) Hospital Authority
(Chesapeake General Hospital); Hospital
Facility VRD Series 2001 B RB
(LOC-SunTrust Bank)
1.69%, 07/01/31(b)(c) A-1+ -- 1,545 1,545,000
- -------------------------------------------------------------------------------------------
Henrico (County of) Economic Development
Authority
(Westminster Centerbury); Residential Care
Facilities
VRD Series 2003 B RB (LOC-KBC Bank N.V.)
1.69%, 07/01/08(b)(c) -- VMIG-1 17,100 17,100,000
- -------------------------------------------------------------------------------------------
Richmond (City of) Industrial Development
Authority;
Educational Facilities VRD Series 2002 RB
(LOC-SunTrust Bank)
1.70%, 05/01/32(b)(c) -- VMIG-1 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Rockingham (County of) Industrial Development
Authority (Sunnyside Presbyterian Home);
Residential Care Facilities VRD Series 2003
RB (LOC-Branch Banking & Trust)
1.72%, 12/01/33(b)(c) A-1 -- 750 750,000
- -------------------------------------------------------------------------------------------
</Table>
F-34
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
VIRGINIA-(CONTINUED)
Winchester (City of) Industrial Development
Authority (Shenandoah University);
Educational Facilities First Mortgage
Series 1994 IDR
6.70%, 10/01/04(g)(l) NRR NRR $ 1,620 $ 1,652,400
===========================================================================================
23,947,400
===========================================================================================
WASHINGTON-5.39%
ABN AMRO Munitops Ctfs. Trust (City of
Seattle Municipal Light & Power);
Multi-State Non-AMT VRD Series 2002-12
Ctfs. (Acquired 05/25/04; Cost $9,755,000)
1.75%, 03/01/09(c)(d)(e) -- VMIG-1 9,755 9,755,000
- -------------------------------------------------------------------------------------------
ABN AMRO Munitops Ctfs. Trust (City of
Seattle);
Multi-State Non-AMT VRD Limited Tax Series
2003-7 GO Ctfs.
(Acquired 05/13/03; Cost $10,685,000)
1.34%, 11/17/04(d)(e)(g)(i)(k)(n) -- -- 10,685 10,685,000
- -------------------------------------------------------------------------------------------
ABN AMRO Munitops Ctfs. Trust (King County);
Multi-State Non-AMT VRD Limited Tax Series
2001-1 GO Ctfs.
(Acquired 01/04/01; Cost $10,000,000)
1.75%, 07/01/06(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Bremerton (City of) (Kitsap Regional
Conference Center);
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.75%, 12/01/28(b)(c)(i) -- -- 2,565 2,565,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Washington
Public Power Supply Systems Project No. 2);
VRD Series 96-4703 Class A COP (Acquired
05/02/01; Cost $5,870,000)
1.75%, 07/01/11(c)(d)(e) A-1+ -- 5,870 5,870,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Washington);
VRD Series 98-4701 Class A COP (Acquired
07/20/00; Cost $14,400,000)
1.75%, 05/01/18(c)(d)(e) A-1+ -- 14,400 14,400,000
- -------------------------------------------------------------------------------------------
Everett (City of) Public Facilities District;
Commercial Paper TRAN (LOC-Bank of America
N.A.)
1.00%, 10/26/04(b) A-1+ -- 4,300 4,300,000
- -------------------------------------------------------------------------------------------
Everett (City of) Public Facilities District;
Commercial Paper Notes (LOC-Bank of America
N.A.)
1.00%, 10/26/04(b) A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Everett (City of); VRD Limited Tax Series
2001 GO
(LOC-Bank of America N.A.)
1.75%, 12/01/21(b)(c)(i) -- -- 2,600 2,600,000
- -------------------------------------------------------------------------------------------
Issaquah (City of) Community Properties; VRD
Special Revenue Series 2001 A RB (LOC-Bank
of America N.A.)
1.73%, 02/15/21(b)(c) -- VMIG-1 10,150 10,150,000
- -------------------------------------------------------------------------------------------
King & Snohomish (Counties of) School
District No. 417 (Northshore); Unlimited
Tax Series 2003 GO
2.00%, 12/01/04(f) AAA Aaa 3,300 3,304,792
- -------------------------------------------------------------------------------------------
</Table>
F-35
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
King (County of) Economic Enterprise Corp.
(Puget Sound Blood Center Project);
VRD Series 1998 RB (LOC-U.S. Bank N.A.)
1.74%, 04/01/23(b)(c) -- VMIG-1 $ 3,810 $ 3,810,000
- -------------------------------------------------------------------------------------------
Lake Tapps Parkway Properties; Special
Revenue VRD
(LOC-U.S. Bank N.A.)
Series 1999 A RB
1.73%, 12/01/19(b)(c) -- VMIG-1 11,800 11,800,000
- -------------------------------------------------------------------------------------------
Series 1999 B RB
1.73%, 12/01/19(b)(c) -- VMIG-1 700 700,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(Port of Seattle);
VRD Series 2002-739D RB (Acquired 07/21/04;
Cost $5,000,000)
1.73%, 09/01/20(c)(d)(e) A-1 -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Pierce (County of) Economic Development Corp.
(Weyerhaeuser Real Estate); Special Revenue
VRD Series 1997 RB
(LOC-Bank of America N.A.)
1.73%, 01/01/27(b)(c) A-1+ VMIG-1 12,705 12,705,000
- -------------------------------------------------------------------------------------------
Seattle (Port of) Industrial Development
Corp. (Sysco Food Services Project);
Refunding VRD Series 1994 IDR
1.72%, 11/01/25(c) A-1+ VMIG-1 8,000 8,000,000
- -------------------------------------------------------------------------------------------
Seattle (City of) Housing Authority (Bayview
Manor Project);
Low Income Housing Assistance VRD Series
1994 B RB
(LOC-U.S. Bank N.A.)
1.74%, 05/01/19(b)(c) A-1+ -- 2,340 2,340,000
- -------------------------------------------------------------------------------------------
Seattle (City of) Housing Authority (Pioneer
Human Services Project); Refunding VRD
Series 1995 RB (LOC-U.S. Bank N.A.)
1.74%, 12/01/15(b)(c) A-1+ -- 1,975 1,975,000
- -------------------------------------------------------------------------------------------
Snohomish (County of) Housing Authority (Ebey
Arms Centerhouse Project); Refunding
Housing VRD Series 2003 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/34(b)(c)(i) -- -- 6,245 6,245,000
- -------------------------------------------------------------------------------------------
Vancouver (City of) Housing Authority
(Village Park Apartments Project); Housing
VRD Series 2000 RB (LOC-U.S. Bank N.A.)
1.73%, 11/02/05(b)(c) A-1+ -- 1,430 1,430,000
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (Central Puget Sound
Regional Transit Authority); Sales Tax &
Motor VRD Series 2001 A46 RB
(Acquired 11/12/03; Cost $6,275,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 6,275 6,275,000
- -------------------------------------------------------------------------------------------
Washington (State of) Economic Development
Finance Authority (Seadrunar Recycling LLC
Project); Economic Development VRD Series
2000 E RB (LOC-U.S. Bank N.A.)
1.74%, 08/01/25(b)(c) A-1+ -- 2,735 2,735,000
- -------------------------------------------------------------------------------------------
Washington (State of) Health Care Facilities
Authority
(Empire Health Services); VRD Series 2003
RB
(LOC-U.S. Bank N.A.)
1.65%, 11/01/23(b)(c) A-1+ -- 2,335 2,335,000
- -------------------------------------------------------------------------------------------
</Table>
F-36
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
Washington (State of) Higher Education
Facilities Authority
(Cornish College Arts Project); VRD Series
2003 A RB
(LOC-Bank of America N.A.)
1.73%, 12/01/33(b)(c) -- VMIG-1 $ 5,000 $ 5,000,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (Nikkei Concerns Project);
Non-Profit Housing VRD Series 1994 RB
(LOC-U.S. Bank N.A.)
1.74%, 10/01/19(b)(c) A-1+ -- 3,755 3,755,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (Tacoma Art Museum Project);
Non-Profit VRD Series 2002 RB
(LOC-Northern Trust Co.)
1.77%, 06/01/32(b)(m) -- VMIG-1 1,225 1,225,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (University Preparatory Academy
Project); Non-Profit VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.75%, 07/01/30(b)(c) -- VMIG-1 1,250 1,250,000
===========================================================================================
157,209,792
===========================================================================================
WEST VIRGINIA-0.35%
Monongalia (County of) Building Community
Hospital (Monongalia General Hospital);
Refunding VRD Series 2002 A RB
(LOC-JPMorgan Chase Bank)
1.72%, 07/01/17(b)(c) A-1 VMIG-1 645 645,000
- -------------------------------------------------------------------------------------------
West Virginia (State of) Hospital Finance
Authority (Cabell Huntington); Refunding
VRD Series 2002 A-1 RB
(LOC-JPMorgan Chase Bank)
1.67%, 06/01/13(b)(c) -- VMIG-1 9,495 9,495,000
===========================================================================================
10,140,000
===========================================================================================
WISCONSIN-3.44%
Kimberly (City of) (Fox Cities YMCA Project);
VRD Series 2002 RB
(LOC-M&I Marshall & Ilsley Bank)
1.75%, 04/01/32(b)(c) -- VMIG-1 2,540 2,540,000
- -------------------------------------------------------------------------------------------
Menomonee Falls (City of); Refunding Sewer
System Series 2004 RB
2.00%, 05/01/05(f) -- Aaa 1,425 1,429,517
- -------------------------------------------------------------------------------------------
Waukesha (County of); Promissory Notes
Unlimited Tax Series 2004 GO
2.00%, 04/01/05 -- Aaa 1,500 1,507,192
- -------------------------------------------------------------------------------------------
Wind Point (City of) (Johnson Foundation
Project);
VRD Series 2000 RB (LOC-Bank of Montreal)
1.80%, 09/01/35(b)(c) A-1+ -- 4,665 4,665,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Beaver Dam Community
Hospitals Inc.); VRD Series 2004 B RB
(LOC-U.S. Bank N.A.)
1.69%, 08/15/34(b)(c) A-1+ -- 3,000 3,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-37
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WISCONSIN-(CONTINUED)
Wisconsin (State of) Health & Educational
Facilities Authority (Mequon Jewish
Project); VRD Series 2003 RB
(LOC-JPMorgan Chase Bank)
1.73%, 07/01/28(b)(c) -- VMIG-1 $ 2,150 $ 2,150,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(Mercy Health System); (LOC-M&I Marshall &
Ilsley Bank)
Pooled Loan VRD Series 2003 I RB
1.70%, 06/01/23(b)(c) -- VMIG-1 9,570 9,570,000
- -------------------------------------------------------------------------------------------
VRD Series 2003 C RB
1.72%, 08/15/23(b)(c) -- VMIG-1 7,300 7,300,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. John's Home); Pooled Loan VRD Series
2003 J RB
(LOC-M&I Marshall & Ilsley Bank)
1.70%, 07/01/23(b)(c) -- VMIG-1 4,250 4,250,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. Luke's Medical Center); VRD Series
1987 RB
(LOC-KBC Bank N.V.) (Acquired 06/01/04;
Cost $30,000,000)
1.70%, 12/01/17(b)(c)(d) A-1 -- 30,000 30,000,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. Mary's School); VRD Series 2004 RB
(LOC-M&I Marshall & Ilsley Bank)
1.72%, 08/01/19(b)(c) A-1 -- 2,695 2,695,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(Sinai Samaritan Medical Center Inc.); VRD
Series 1994 A RB
(LOC-M&I Marshall & Ilsley Bank)
1.75%, 09/01/19(b)(c) A-1 -- 5,649 5,649,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Wheaton Franciscan
Services); VRD Series 2003 B RB
(LOC-U.S. Bank N.A.)
1.69%, 08/15/33(b)(c) A-1+ VMIG-1 8,750 8,750,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) School Districts Cash
Flow Management Program;
Series 2003 B-1 COP
2.00%, 11/01/04 -- MIG-1 5,565 5,568,956
- -------------------------------------------------------------------------------------------
Series 2004 A-1 COP
3.00%, 09/20/05(o) -- -- 8,000 8,100,676
- -------------------------------------------------------------------------------------------
Wisconsin (State of); Unlimited Tax Series
1995 A GO
6.10%, 05/01/05(g)(l) NRR Aaa 3,000 3,087,881
===========================================================================================
100,263,222
===========================================================================================
Total Municipal Obligations (Cost
$2,926,404,421) 2,926,404,421
===========================================================================================
TOTAL INVESTMENTS-100.40% (Cost
$2,926,404,421)(p) 2,926,404,421
===========================================================================================
OTHER ASSETS LESS LIABILITIES-(0.40%) (11,669,927)
===========================================================================================
NET ASSETS-100.00% $2,914,734,494
___________________________________________________________________________________________
===========================================================================================
</Table>
F-38
Investment Abbreviations:
<Table>
ACES - Automatically Convertible Extendable Security
AMT - Alternative Minimum Tax
BAN - Bond Anticipation Notes
CEP - Credit Enhancement Provider
COP - Certificate of Participation
Ctfs - Certificates
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
Jr. - Junior
LOC - Letter of Credit
MERLOT - Municipal Exempt Receipts Liquidity Optional Tender
NRR - Not Re-Rated
P-Floats - Puttable Floating Option Tax-Exempt Receipts
PCR - Pollution Control Revenue Bonds
PUTTERS - Putable Tax Exempt Receipts
RAN - Revenue Anticipation Notes
RB - Revenue Bonds
RN - Revenue Notes
Sub. - Subordinated
TAN - Tax Anticipation Notes
TRAN - Tax and Revenue Anticipation Notes
VRD - Variable Rate Demand
Wts. - Warrants
</Table>
Notes to Schedule of Investments:
(a) Ratings assigned by Standard & Poor's Corporation ("S&P") and Moody's
Investors Service, Inc. ("Moody's"), except as indicated in note (i) and (o)
below. NRR indicates a security that is not re-rated subsequent to funding
of an escrow fund (consisting of U.S. Treasury obligations held by a bank
custodian); this funding is pursuant to an advance refunding of this
security.
(b) Principal and interest payments are fully enhanced by a letter of credit
from the bank listed or a predecessor bank, branch or subsidiary.
(c) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined weekly. Rate
shown is the rate in effect on September 30, 2004.
(d) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at September 30, 2004 was
$691,199,000, which represented 23.71% of the Fund's net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(e) Synthetic municipal instruments; involves the deposit into a trust of one or
more long-term tax-exempt bonds or notes ("Underlying Bonds"), a sale of
certificates evidencing interests in the trust to investors such as the
Fund. The trustee receives the long-term fixed interest payments on the
Underlying Bonds, and pays certificate holders variable rate interest
payments based upon a short-term reset periodically.
(f) Principal and interest payments are secured by bond insurance provided by
one of the following companies: Ambac Assurance Corp., Financial Guaranty
Insurance Co., Financial Security Assurance Inc., or MBIA Insurance Corp.
F-39
(g) Security has an irrevocable call or mandatory put by the issuer. Maturity
date reflects such call or put.
(h) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined
semi-annually. Rate shown is the rate in effect on September 30, 2004.
(i) Security is not rated by S&P or by Moody's; however it is rated by Fitch
IBCA ("Fitch") of F1+.
(j) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined monthly. Rate
shown is the rate in effect on September 30, 2004.
(k) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined at
intermittent intervals. Rate shown is the rate in effect on September 30,
2004.
(l) Advance refunded; secured by an escrow fund of U.S. Treasury obligations.
(m) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined daily. Rate
shown is the rate in effect on September 30, 2004.
(n) Security considered to be illiquid. The aggregate market value of these
securities considered illiquid at September 30, 2004 was $38,920,000, which
represented 1.34% of the Fund's net assets.
(o) Determined by the investment advisor to be of comparable quality to the
rated securities in which the Fund may invest, pursuant to guidelines for
the determination of quality adopted by the Board of Trustees and followed
by the investment advisor.
(p) Also represents cost for federal income tax purposes.
See accompanying notes which are an integral part of the financial statements.
F-40
STATEMENT OF ASSETS & LIABILITIES
September 30, 2004
(Unaudited)
<Table>
ASSETS:
Investments, at market value
(cost $2,926,404,421) $2,926,404,421
- ---------------------------------------------
Cash 697,925
- ---------------------------------------------
Receivables for:
Investments sold 4,895,235
- ---------------------------------------------
Interest 8,879,674
- ---------------------------------------------
Investment for trustee
deferred compensation and
retirement plans 136,908
- ---------------------------------------------
Other assets 190,315
=============================================
Total assets 2,941,204,478
_____________________________________________
=============================================
LIABILITIES:
Payables for:
Investments purchased 23,240,918
- ---------------------------------------------
Dividends 2,730,970
- ---------------------------------------------
Trustee deferred
compensation and
retirement plans 215,380
- ---------------------------------------------
Accrued distribution fees 131,402
- ---------------------------------------------
Accrued transfer agent fees 91,843
- ---------------------------------------------
Accrued trustees fees 1,095
- ---------------------------------------------
Accrued operating expenses 58,376
=============================================
Total liabilities 26,469,984
=============================================
Net assets applicable to
shares outstanding $2,914,734,494
_____________________________________________
=============================================
NET ASSETS CONSIST OF:
Shares of beneficial
interest $2,914,752,505
- ---------------------------------------------
Undistributed net realized
gain (loss) from
investment securities (18,011)
=============================================
$2,914,734,494
_____________________________________________
=============================================
NET ASSETS:
Institutional Class $1,671,593,521
_____________________________________________
=============================================
Private Investment Class $ 190,301,672
_____________________________________________
=============================================
Personal Investment Class $ 9,273,444
_____________________________________________
=============================================
Cash Management Class $ 796,326,655
_____________________________________________
=============================================
Reserve Class $ 11,062,666
_____________________________________________
=============================================
Resource Class $ 236,176,536
_____________________________________________
=============================================
SHARES OUTSTANDING,
$0.001 PAR VALUE PER SHARE,
UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Institutional Class 1,671,550,863
_____________________________________________
=============================================
Private Investment Class 190,288,610
_____________________________________________
=============================================
Personal Investment Class 9,270,510
_____________________________________________
=============================================
Cash Management Class 796,322,561
_____________________________________________
=============================================
Reserve Class 11,060,717
_____________________________________________
=============================================
Resource Class 236,175,751
_____________________________________________
=============================================
Net asset value, offering and
redemption price per share
for each class $ 1.00
_____________________________________________
=============================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-41
STATEMENT OF OPERATIONS
For the six months ended September 30, 2004
(Unaudited)
<Table>
INVESTMENT INCOME:
Interest $17,235,533
=========================================================================
EXPENSES:
Advisory fees 3,131,846
- -------------------------------------------------------------------------
Administrative services fees 295,697
- -------------------------------------------------------------------------
Custodian fees 38,978
- -------------------------------------------------------------------------
Distribution fees:
Private Investment Class 404,301
- -------------------------------------------------------------------------
Personal Investment Class 40,938
- -------------------------------------------------------------------------
Cash Management Class 334,772
- -------------------------------------------------------------------------
Reserve Class 50,510
- -------------------------------------------------------------------------
Resource Class 266,654
- -------------------------------------------------------------------------
Transfer agent fees 231,258
- -------------------------------------------------------------------------
Trustees' fees and retirement benefits 29,952
- -------------------------------------------------------------------------
Other 317,825
=========================================================================
Total expenses 5,142,731
=========================================================================
Less: Fees waived (1,065,457)
=========================================================================
Net expenses 4,077,274
=========================================================================
Net investment income 13,158,259
=========================================================================
Net realized gain (loss) from investment securities (17,079)
=========================================================================
Net increase in net assets resulting from operations $13,141,180
_________________________________________________________________________
=========================================================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-42
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 2004 and the year ended March 31, 2004
(Unaudited)
<Table>
<Caption>
SEPTEMBER 30, MARCH 31,
2004 2004
- --------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 13,158,259 $ 22,690,885
- --------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities (17,079) 40,841
============================================================================================
Net increase in net assets resulting from operations 13,141,180 22,731,726
============================================================================================
Distributions to shareholders from net investment income:
Institutional Class (8,710,440) (14,405,472)
- --------------------------------------------------------------------------------------------
Private Investment Class (555,715) (1,230,193)
- --------------------------------------------------------------------------------------------
Personal Investment Class (20,320) (37,490)
- --------------------------------------------------------------------------------------------
Cash Management Class (2,854,661) (5,040,826)
- --------------------------------------------------------------------------------------------
Reserve Class (4,673) (8,425)
- --------------------------------------------------------------------------------------------
Resource Class (1,012,450) (1,968,479)
============================================================================================
Decrease in net assets resulting from distributions (13,158,259) (22,690,885)
============================================================================================
Share transactions-net:
Institutional Class (282,164,384) 632,519,818
- --------------------------------------------------------------------------------------------
Private Investment Class 39,903,203 (77,436,378)
- --------------------------------------------------------------------------------------------
Personal Investment Class (1,120,107) (6,598,054)
- --------------------------------------------------------------------------------------------
Cash Management Class 28,190,366 150,447,508
- --------------------------------------------------------------------------------------------
Reserve Class (2,966,860) 1,376,091
- --------------------------------------------------------------------------------------------
Resource Class (63,027,459) 39,025,099
============================================================================================
Net increase (decrease) in net assets resulting from
share transactions (281,185,241) 739,334,084
============================================================================================
Net increase (decrease) in net assets (281,202,320) 739,374,925
============================================================================================
NET ASSETS:
Beginning of period 3,195,936,814 2,456,561,889
============================================================================================
End of period (including undistributed net investment
income of $0 and $0, respectively) $2,914,734,494 $3,195,936,814
____________________________________________________________________________________________
============================================================================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-43
NOTES TO FINANCIAL STATEMENTS
September 30, 2004
(Unaudited)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
Tax-Free Investments Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Trust is organized as a Delaware statutory
trust consisting of one portfolio, the Tax-Free Cash Reserve Portfolio (the
"Fund"). The Fund currently offers multiple classes of shares. Matters affecting
each class are voted on exclusively by the shareholders of each class. The
Fund's investment objective is to provide as high a level of tax-exempt income
as is consistent with the preservation of capital and maintenance of liquidity.
On November 4, 2003, the Fund was restructured from a separate series of
Tax-Free Investments Co. to a new series portfolio of the Trust.
Under the Trust's organizational documents, the Fund's officers, trustees,
employees and agents are indemnified against certain liabilities that may arise
out of performance of their duties to the Fund. Additionally, in the normal
course of business, the Fund enters into contracts that contain a variety of
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, the Fund has not had prior claims or losses
pursuant to these contracts.
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 at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted by Rule 2a-7
under the 1940 Act. This method values a security at its cost on the date
of purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities.' Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
F-44
The Fund allocates realized and unrealized capital gains and losses to a
class based on the relative net assets of each class. The Fund allocates
income to a class based on the relative value of the settled shares of each
class.
C. DISTRIBUTIONS -- Distributions from income are declared daily and paid
monthly. Distributions from net realized capital gain, if any, are
generally paid annually and recorded on ex-dividend date. The Fund may
elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and, as such, will not be subject to federal
income taxes on otherwise taxable income (including net realized capital
gain) which is distributed to shareholders. Therefore, no provision for
federal income taxes is recorded in the financial statements.
In addition, the Fund intends to invest in securities to allow it to
qualify to pay shareholders "exempt interest dividends", as defined in the
Internal Revenue Code of 1986, as amended.
E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.25% of the first
$500 million of the Fund's average daily net assets plus 0.20% of the Fund's
average daily net assets in excess of $500 million. AIM has voluntarily agreed
to waive advisory fees and/or reimburse expenses to the extent necessary to
limit Total Annual Fund Operating Expenses (excluding certain items discussed
below) to 0.22%. In determining the advisor's obligation to waive advisory fees
and/or reimburse expenses, the following expenses are not taken into account,
and could cause the Total Annual Fund Operating Expenses to exceed the cap
stated above: (i) Rule 12b-1 plan fees, if any; (ii) interest; (iii) taxes; (iv)
dividend expense on short sales; (v) extraordinary items (these are expenses
that are not anticipated to arise from the Fund's day-to-day operations), or
items designated as such by the Fund's Board of Trustees; (vi) expenses related
to a merger or reorganization, as approved by the Fund's Board of Trustees;
(vii) expenses that the Fund has incurred but did not actually pay because of an
expense offset arrangement; (viii) trustees' fees; and (ix) federal registration
fees. Currently, the only expense offset arrangements from which the Fund
benefits are in the form of credits that the Fund receives from banks where the
Fund or its transfer agent has deposit accounts in which it holds uninvested
cash. Those credits are used to pay certain expenses incurred by the Fund.
Voluntary fee waivers or reimbursements may be modified or discontinued at any
time upon consultation with the Board of Trustees without further notice to
investors. To the extent that the annualized expense ratio does not exceed the
expense limitation, AIM will retain its ability to be reimbursed for such fee
waivers or reimbursements prior to the end of each fiscal year. For the six
months ended September 30, 2004, AIM waived fees of $723,330.
The Trust, pursuant to a master administrative services agreement with AIM,
has agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended September 30, 2004,
AIM was paid $295,697 for such services.
The Trust, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the six months ended
September 30, 2004, AISI retained $225,258 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Trust, FMC acts as the exclusive distributor of the
Fund's shares. The Fund has adopted a master distribution
F-45
plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's
Private Investment Class, Personal Investment Class, Cash Management Class,
Reserve Class and Resource Class (the "Plan"). The Plan provides that the
Private Investment Class, the Personal Investment Class, the Cash Management
Class, the Reserve Class and the Resource Class pay up to the maximum annual
rate of 0.50%, 0.75%, 0.10%, 1.00% and 0.20%, respectively, of the average daily
net assets attributable to such class. Of this amount, up to 0.25% of the
average daily net assets of each class may be paid to furnish continuing
personal shareholder services to customers who purchase and own shares of the
such classes. Any amounts not paid as a service fee under such Plan would
constitute an asset-based sales charge. NASD Rules also impose a cap on the
total amount of sales charges, including asset-based sales charges, that may be
paid by any class of shares of the Fund. Currently, FMC has elected to waive a
portion of its compensation payable by the Fund such that compensation paid
pursuant to the Plan with respect to the Private Investment Class, the Personal
Investment Class, the Cash Management Class, the Reserve Class and the Resource
Class equals the maximum annual rate of 0.25%, 0.55%, 0.08%, 0.87% and 0.16%,
respectively, of the average daily net assets attributable to such class.
Further, FMC voluntarily waived additional Rule 12b-1 plan fees for the Reserve
Class during the year in order to increase the yield. Waivers may be modified or
discontinued at any time. Pursuant to the Plan, for the six months ended
September 30, 2004, the Private Investment Class, the Personal Investment Class,
the Cash Management Class, the Reserve Class and the Resource Class paid
$202,150, $30,021, $267,818, $41,736 and $213,323, respectively, after FMC
waived Plan fees of $202,151, $10,917, $66,954, $8,774 and $53,331,
respectively.
Certain officers and trustees of the Trust are officers and directors of
AIM, FMC and/or AISI.
NOTE 3--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM and INVESCO Funds under specified conditions outlined in procedures adopted
by the Board of Trustees of the Trust. The procedures have been designed to
ensure that any purchase or sale of securities by the Fund from or to another
fund or portfolio that is or could be considered an affiliate by virtue of
having a common investment advisor (or affiliated investment advisors), common
Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act.
Further, as defined under the procedures each transaction is effected at the
current market price. Pursuant to these procedures, during the six months ended
September 30, 2004, the Fund engaged in purchases and sales of securities of $0
and $27,058,780, respectively.
NOTE 4--TRUSTEES' FEES
Trustees' fees represent remuneration paid to each Trustee of the Trust who is
not an "interested person" of AIM. Trustees have the option to defer
compensation payable by the Trust. Those Trustees who defer compensation have
the option to select various AIM Funds and INVESCO Funds in which their deferral
accounts shall be deemed to be invested.
Current Trustees are eligible to participate in a retirement plan that
provides for benefits to be paid upon retirement to Trustees over a period of
time based on the number of years of service. The Fund may have certain former
Trustees that also participate in a retirement plan and receive benefits under
such plan.
Obligations under the deferred compensation and retirement plans represent
unsecured claims against the general assets of the Fund.
During the six months ended September 30, 2004, the Fund paid legal fees of
$5,068 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel
to the Independent Trustees. A member of that firm is a Trustee of the Trust.
F-46
NOTE 5--BORROWINGS
Pursuant to an exemptive order from the SEC, the Fund may participate in an
interfund lending facility that AIM has established for temporary borrowings by
the AIM Funds and the INVESCO Funds. An interfund loan will be made under this
facility only if the loan rate (an average of the rate available on bank loans
and the rate available on investments in overnight repurchase agreements) is
favorable to both the lending fund and the borrowing fund. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. To the extent that the loan is required
to be secured by collateral, the collateral is marked to market daily to ensure
that the market value is at least 102% of the outstanding principal value of the
loan. The Fund did not borrow or lend under the facility during the six months
ended September 30, 2004.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with The Bank of New York, the custodian bank.
To compensate the custodian bank for such overdrafts, the overdrawn Fund may
either (i) leave funds in the account so the custodian can be compensated by
earning the additional interest; or (ii) compensate by paying the custodian
bank. In either case, the custodian bank will be compensated at an amount equal
to the Federal Funds rate plus 100 basis points.
NOTE 6--TAX INFORMATION
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforward) under income tax regulations. The tax character of
distributions paid during the year and the tax components of net assets will be
reported at the Fund's fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions.
The Fund had a capital loss carryforward as of March 31, 2004 which expires
as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------
March 31, 2011 $933
_____________________________________________________________________________
=============================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
F-47
NOTE 7--SHARE INFORMATION
The Fund currently offers six different classes of shares: Institutional Class,
Private Investment Class, Personal Investment Class, Cash Management Class,
Reserve Class and Resource Class.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING(A)
- ---------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2004 MARCH 31, 2004
--------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
Sold:
Institutional Class 8,676,342,046 $ 8,676,342,046 13,446,683,719 $ 13,446,683,719
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 217,524,346 217,524,346 489,285,624 489,285,624
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class 20,166,779 20,166,779 26,756,133 26,756,133
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 2,908,837,254 2,908,837,254 5,641,820,633 5,641,820,633
- ---------------------------------------------------------------------------------------------------------
Reserve Class 77,269,739 77,269,739 156,764,612 156,764,612
- ---------------------------------------------------------------------------------------------------------
Resource Class 732,494,862 732,494,862 1,508,376,051 1,508,376,051
=========================================================================================================
Issued as reinvestment of
dividends:
Institutional Class 5,177,367 5,177,367 7,301,226 7,301,226
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 318,170 318,170 737,747 737,747
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class 2,442 2,442 4,054 4,054
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 1,846,071 1,846,071 4,115,815 4,115,815
- ---------------------------------------------------------------------------------------------------------
Reserve Class 2,986 2,986 8,921 8,921
- ---------------------------------------------------------------------------------------------------------
Resource Class 936,355 936,355 1,860,224 1,860,224
=========================================================================================================
Reacquired:
Institutional Class (8,963,683,797) (8,963,683,797) (12,821,465,127) (12,821,465,127)
- ---------------------------------------------------------------------------------------------------------
Private Investment Class (177,939,313) (177,939,313) (567,459,749) (567,459,749)
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class (21,289,328) (21,289,328) (33,358,241) (33,358,241)
- ---------------------------------------------------------------------------------------------------------
Cash Management Class (2,882,492,959) (2,882,492,959) (5,495,488,940) (5,495,488,940)
- ---------------------------------------------------------------------------------------------------------
Reserve Class (80,239,585) (80,239,585) (155,397,442) (155,397,442)
- ---------------------------------------------------------------------------------------------------------
Resource Class (796,458,676) (796,458,676) (1,471,211,176) (1,471,211,176)
=========================================================================================================
(281,185,241) $ (281,185,241) 739,334,084 $ 739,334,084
_________________________________________________________________________________________________________
=========================================================================================================
</Table>
(a) There are two entities that are each record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate they own 50% of the
outstanding shares of the Fund. The Fund's principle underwriter may have an
agreement with these entities to sell Fund shares. The Fund, AIM and/or AIM
affiliates may make payments to these entities, which are considered to be
related to the Fund, for providing services to the Fund, AIM and/or AIM
affiliates including but not limited to services such as, securities
brokerage, distribution, third party record keeping and account servicing.
The Trust has no knowledge as to whether all or any portion of the shares
owned of record by these shareholders are also owned beneficially.
F-48
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
INSTITUTIONAL CLASS
-----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, ----------------------------------------------------------
2004 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.005 0.01 0.01 0.02 0.04 0.03
===========================================================================================================
Less distributions from net
investment income (0.005) (0.01) (0.01) (0.02) (0.04) (0.03)
===========================================================================================================
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
___________________________________________________________________________________________________________
===========================================================================================================
Total return(a) 0.47% 0.84% 1.22% 2.17% 3.95% 3.32%
___________________________________________________________________________________________________________
===========================================================================================================
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $1,671,594 $1,953,769 $1,321,224 $1,239,058 $929,921 $964,396
___________________________________________________________________________________________________________
===========================================================================================================
Ratio of expenses to average
net assets:
With fee waivers 0.22%(b) 0.22% 0.22% 0.22% 0.20% 0.20%
- -----------------------------------------------------------------------------------------------------------
Without fee waivers 0.27%(b) 0.27% 0.27% 0.28% 0.29% 0.29%
___________________________________________________________________________________________________________
===========================================================================================================
Ratio of net investment
income to average net
assets 0.93%(b) 0.83% 1.20% 2.01% 3.84% 3.25%
___________________________________________________________________________________________________________
===========================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and is not annualized for periods
less than one year.
(b) Ratios are annualized and based on average daily net assets of
$1,882,352,508.
F-49
NOTE 9--LEGAL PROCEEDINGS
Terms used in this Legal Proceedings Note are defined terms solely for the
purpose of this note.
The mutual fund industry as a whole is currently subject to regulatory
inquiries and litigation related to a wide range of issues. These issues
include, among others, market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders.
As described more fully below, INVESCO Funds Group, Inc. ("IFG"), the former
investment advisor to certain AIM Funds, A I M Advisors, Inc. ("AIM"), the
Fund's investment advisor, and A I M Distributors, Inc. ("ADI"), the distributor
of the retail AIM Funds and a wholly owned subsidiary of AIM, reached final
settlements with the Securities and Exchange Commission ("SEC"), the New York
Attorney General ("NYAG"), the Colorado Attorney General ("COAG"), the Colorado
Division of Securities ("CODS") and the Secretary of State of the State of
Georgia to resolve civil enforcement actions and investigations related to
market timing activity and related issues in the AIM Funds, including those
formerly advised by IFG.
In addition, as described more fully below, IFG and AIM are the subject of a
number of ongoing regulatory inquiries and civil lawsuits related to one or more
of the issues currently being scrutinized by various Federal and state
regulators, including but not limited to those issues described above.
Additional regulatory actions and/or civil lawsuits related to the above or
other issues may be filed against the AIM Funds, IFG, AIM and/or related
entities and individuals in the future. Additional regulatory inquiries related
to the above or other issues also may be received by the AIM Funds, IFG, AIM
and/or related entities and individuals in the future.
As a result of the matters discussed below, investors in the AIM Funds might
react by redeeming their investments. This might require the Funds to sell
investments to provide for sufficient liquidity and could also have an adverse
effect on the investment performance of the Funds.
Settled Enforcement Actions and Investigations Related to Market Timing
On October 8, 2004, AMVESCAP PLC ("AMVESCAP"), the parent company of IFG and
AIM, announced that final settlements had been reached with the SEC, the NYAG,
the COAG and the Secretary of State of Georgia to resolve civil enforcement
actions and investigations related to market timing activity and related issues
in the AIM Funds, including those formerly advised by IFG. A final settlement
also has been reached with the Colorado Division of Securities ("CODS") with
respect to this matter. In their enforcement actions and investigations, these
regulators alleged, in substance, that IFG and AIM failed to disclose in the
prospectuses for the AIM Funds that they advised and to the independent
directors/trustees of such Funds that IFG and AIM had entered into certain
arrangements permitting market timing of such Funds, thereby breaching their
fiduciary duties to such Funds. As a result of the foregoing, the regulators
alleged that IFG, AIM and ADI breached various Federal and state securities,
business and consumer protection laws. Under the terms of the settlements, IFG,
AIM and ADI consent to the entry of settlement orders or assurances of
discontinuance, as applicable, by the regulators containing certain terms, some
of which are described below, without admitting or denying any wrongdoing.
Under the terms of the settlements, IFG agreed to pay a total of $325 million,
of which $110 million is civil penalties. Of the $325 million total payment,
half will be paid on or before December 31, 2004 and the remaining half will be
paid on or before December 31, 2005. AIM and ADI agreed to pay a total of $50
million, of which $30 million is civil penalties. The entire $50 million payment
by AIM and ADI will be paid by November 7, 2004.
The entire $325 million IFG settlement payment will be available for
distribution to the shareholders of those AIM Funds that IFG formerly advised
that were harmed by market timing activity, and the entire $50 million
F-50
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
settlement payment by AIM and ADI will be available for distribution to the
shareholders of those AIM Funds advised by AIM that were harmed by market timing
activity, all as to be determined by an independent distribution consultant to
be appointed under the settlements. The settlement payments will be distributed
in accordance with a methodology to be determined by the independent
distribution consultant, in consultation with AIM and the independent trustees
of the AIM Funds and acceptable to the staff of the SEC.
Under the settlements with the NYAG and COAG, AIM has agreed to reduce
management fees on the AIM Funds by $15 million per year for the next five
years, based upon effective fee rates and assets under management as of July 1,
2004, and not to increase certain management fees. IFG will also pay $1.5
million to the COAG to be used for investor education purposes and to reimburse
the COAG for actual costs. Finally, IFG and AIM will pay $175,000 to the
Secretary of State of Georgia to be used for investor education purposes and to
reimburse the Secretary of State for actual costs.
None of the costs of the settlements will be borne by the AIM Funds or by Fund
shareholders.
Under the terms of the settlements, AIM will make certain governance reforms,
including maintaining an internal controls committee and retaining an
independent compliance consultant, a corporate ombudsman and, as stated above,
an independent distribution consultant. Also, commencing in 2007 and at least
once every other year thereafter, AIM will undergo a compliance review by an
independent third party.
In addition, under the terms of the settlements, AIM has undertaken to cause
the AIM Funds to operate in accordance with certain governance policies and
practices, including retaining a full-time independent senior officer whose
duties will include monitoring compliance and managing the process by which
proposed management fees to be charged the AIM Funds are negotiated. Also,
commencing in 2008 and not less than every fifth calendar year thereafter, the
AIM Funds will hold shareholder meetings at which their Boards of Trustees will
be elected.
On October 8, 2004, the SEC announced that it had settled a market timing
enforcement action against Raymond R. Cunningham, the former president and chief
executive officer of IFG and a former member of the board of directors of the
AIM Funds formerly advised by IFG. As part of the settlement, the SEC ordered
Mr. Cunningham to pay $1 in restitution and civil penalties in the amount of
$500,000. In addition, the SEC prohibited Mr. Cunningham from associating with
an investment advisor, broker, dealer or investment company for a period of two
years and further prohibited him from serving as an officer or director of an
investment advisor, broker, dealer or investment company for a period of five
years.
On August 31, 2004, the SEC announced that it had settled market timing
enforcement actions against Timothy J. Miller, the former chief investment
officer and a former portfolio manager for IFG, Thomas A. Kolbe, the former
national sales manager of IFG, and Michael D. Legoski, a former assistant vice
president in IFG's sales department. As part of the settlements, the SEC ordered
Messrs. Miller, Kolbe and Legoski to pay $1 in restitution each and civil
penalties in the amounts of $150,000, $150,000 and $40,000, respectively. In
addition, the SEC prohibited each of them from associating with an investment
advisor or investment company for a period of one year, prohibited Messrs.
Miller and Kolbe from serving as an officer or director of an investment advisor
or investment company for three years and two years, respectively, and
prohibited Mr. Legoski from associating with a broker or dealer for a period of
one year.
As referenced by the SEC in the SEC's settlement order, one former officer of
ADI and one current officer of AIM (who has taken a voluntary leave of absence)
have received regulatory inquiries in the form of subpoenas or other oral or
written requests for information and/or documents related to market timing
activity in the AIM Funds.
At the direction of the trustees of the AIM Funds, AMVESCAP has agreed to pay
all of the expenses incurred by such Funds related to the market timing
investigations, including expenses incurred in connection with the
F-51
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
regulatory complaints against IFG alleging market timing and the market timing
investigations with respect to IFG and AIM.
The payments made in connection with the above-referenced settlements by IFG,
AIM and ADI will total approximately $375 million (not including AIM's agreement
to reduce management fees on the AIM Funds by $15 million per year for the next
five years, based upon effective fee rates and assets under management as of
July 1, 2004). The manner in which the settlement payments will be distributed
is unknown at the present time and will be determined by an independent
distribution consultant to be appointed under the settlements. Therefore,
management of AIM and the Fund are unable at the present time to estimate the
impact, if any, that the distribution of the settlement amounts may have on the
Fund or whether such distribution will have an impact on the Fund's financial
statements in the future.
At the present time, management of AIM and the Fund are unable to estimate the
impact, if any, that the outcome of the ongoing matters described below may have
on AIM, ADI or the Fund.
Ongoing Regulatory Inquiries Concerning IFG and AIM
IFG, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds formerly advised by IFG have received regulatory
inquiries in the form of subpoenas or other oral or written requests for
information and/or documents related to one or more of the following issues,
some of which concern one or more such Funds: market timing activity, late
trading, fair value pricing, excessive or improper advisory and/or distribution
fees, mutual fund sales practices, including revenue sharing and
directed-brokerage arrangements, and investments in securities of other
registered investment companies. These regulators include the SEC, the NASD,
Inc. ("NASD"), the Florida Department of Financial Services, the Attorney
General of the State of West Virginia, the West Virginia Securities Commission
and the Bureau of Securities of the State of New Jersey. IFG and certain of
these other parties also have received more limited inquiries from the United
States Department of Labor ("DOL") and the United States Attorney's Office for
the Southern District of New York, some of which concern one or more of the AIM
Funds formerly advised by IFG. IFG is providing full cooperation with respect to
these inquiries.
AIM, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds have received regulatory inquiries in the form
of subpoenas or other oral or written requests for information and/or documents
related to one or more of the following issues, some of which concern one or
more AIM Funds: market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders. These regulators include the SEC, the NASD, the
Department of Banking for the State of Connecticut, the Attorney General of the
State of West Virginia, the West Virginia Securities Commission and the Bureau
of Securities of the State of New Jersey. AIM and certain of these other parties
also have received more limited inquiries from the SEC, the NASD, the DOL, the
Internal Revenue Service, the New York Stock Exchange, the United States
Attorney's Office for the Southern District of New York, the United States
Attorney's Office for the Central District of California, the United States
Attorney's Office for the District of Massachusetts, the Massachusetts
Securities Division and the U.S. Postal Inspection Service, some of which
concern one or more AIM Funds. AIM is providing full cooperation with respect to
these inquiries.
Private Civil Actions Alleging Market Timing
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, certain AIM Funds, IFG, AIM, A I M Management Group Inc. ("AIM
Management"), AMVESCAP, certain related entities, certain of their current and
former officers
F-52
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
and/or certain unrelated third parties) making allegations that are similar in
many respects to those in the settled regulatory actions brought by the SEC, the
NYAG and the COAG concerning market timing activity in the AIM Funds. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violation of various provisions of the Federal and state securities laws;
(ii) violation of various provisions of ERISA; (iii) breach of fiduciary duty;
and/or (iv) breach of contract. These lawsuits were initiated in both Federal
and state courts and seek such remedies as compensatory damages; restitution;
injunctive relief; disgorgement of management fees; imposition of a constructive
trust; removal of certain directors and/or employees; various corrective
measures under ERISA; rescission of certain Funds' advisory agreements;
interest; and attorneys' and experts' fees.
All lawsuits based on allegations of market timing, late trading, and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court") for consolidated or coordinated pre-trial
proceedings. Pursuant to an Order of the MDL Court, plaintiffs consolidated
their claims for pre-trial purposes into three amended complaints against
various AIM- and IFG-related parties: (i) a Consolidated Amended Class Action
Complaint purportedly brought on behalf of shareholders of the AIM Funds; (ii) a
Consolidated Amended Fund Derivative Complaint purportedly brought on behalf of
the AIM Funds and fund registrants; and (iii) an Amended Class Action Complaint
for Violations of the Employee Retirement Income Securities Act purportedly
brought on behalf of participants in AMVESCAP's 401(k) plan. Plaintiffs in one
of the underlying lawsuits transferred to the MDL Court continue to seek remand
of their action to state court.
Private Civil Actions Alleging Improper Use of Fair Value Pricing
Multiple civil class action lawsuits have been filed against various parties
(including, depending on the lawsuit, certain AIM Funds, IFG and/or AIM)
alleging that certain AIM Funds inadequately employed fair value pricing. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violations of various provisions of the Federal securities laws; (ii) common
law breach of duty; and (iii) common law negligence and gross negligence. These
lawsuits have been filed in both Federal and state courts and seek such remedies
as compensatory and punitive damages; interest; and attorneys' fees and costs.
Private Civil Actions Alleging Excessive Advisory and/or Distribution Fees
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, INVESCO Institutional (N.A.), Inc., ADI and/or INVESCO
Distributors, Inc.) alleging that the defendants charged excessive advisory
and/or distribution fees and failed to pass on to shareholders the perceived
savings generated by economies of scale. Certain of these lawsuits also allege
that the defendants adopted unlawful distribution plans. These lawsuits allege a
variety of theories of recovery, including but not limited to: (i) violation of
various provisions of the Federal securities laws; (ii) breach of fiduciary
duty; and/or (iii) breach of contract. These lawsuits have been filed in Federal
courts and seek such remedies as damages; injunctive relief; rescission of
certain Funds' advisory agreements and distribution plans; interest; prospective
relief in the form of reduced fees; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Charging of Distribution Fees on Closed
Funds or Share Classes
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, ADI and/or certain of the trustees of the AIM Funds)
alleging that the defendants breached their fiduciary duties by charging
distribution fees while funds and/or specific share classes were closed
generally to new investors and/or while other share classes of the same fund
were not charged the same distribution fees. These lawsuits allege a variety of
theories of recovery, including but not limited to: (i) violation of various
provisions of the Federal securities laws; and (ii) breach of
F-53
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
fiduciary duty. These lawsuits have been filed in Federal courts and seek such
remedies as damages; injunctive relief; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Mutual Fund Sales Practices and
Directed-Brokerage Arrangements
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, AIM Management, IFG, AIM, AIM Investment Services, Inc. and/or
certain of the trustees of the AIM Funds) alleging that the defendants
improperly used the assets of the AIM Funds to pay brokers to aggressively
promote the sale of the AIM Funds over other mutual funds and that the
defendants concealed such payments from investors by disguising them as
brokerage commissions. These lawsuits allege a variety of theories of recovery,
including but not limited to: (i) violation of various provisions of the Federal
securities laws; (ii) breach of fiduciary duty; and (iii) aiding and abetting a
breach of fiduciary duty. These lawsuits have been filed in Federal courts and
seek such remedies as compensatory and punitive damages; rescission of certain
Funds' advisory agreements and distribution plans and recovery of all fees paid;
an accounting of all fund-related fees, commissions and soft dollar payments;
restitution of all unlawfully or discriminatorily obtained fees and charges; and
attorneys' and experts' fees.
F-54
<Table>
TRUSTEES TAX-FREE
Bruce L. Crockett, Chair Lewis F. Pennock INVESTMENTS TRUST
Bob R. Baker Robert H. Graham (TFIT)
Frank S. Bayley Gerald J. Lewis
James T. Bunch Prema Mathai-Davis TAX-FREE
Albert R. Dowden Ruth H. Quigley CASH RESERVE
Edward K. Dunn, Jr. Louis S. Sklar PORTFOLIO
Jack M. Fields Larry Soll, Ph.D.
Carl Frischling Mark H. Williamson PERSONAL
INVESTMENT
OFFICERS CLASS
Robert H. Graham President
Mark H. Williamson Executive Vice President Semi-
Lisa O. Brinkley Senior Vice President & Chief Compliance Officer Annual
Kevin M. Carome Senior Vice President, Secretary & Chief Legal Officer Officer Report
Sidney M. Dilgren Vice President & Treasurer
Stuart W. Coco Vice President September 30, 2004
Karen Dunn Kelley Vice President
Edgar M. Larsen Vice President
INVESTMENT ADVISOR
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
DISTRIBUTOR
Fund Management Company
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
CUSTODIAN
The Bank of New York
2 Hanson Place
Brooklyn, NY 11217-1431
COUNSEL TO THE FUND
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
COUNSEL TO THE TRUSTEES
Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022-3852
TRANSFER AGENT
AIM Investment Services, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
A description of the policies and procedures that the fund uses to determine how
to vote proxies relating to portfolio securities is available without charge,
upon request, from our Client Services department at 800-959-4246 or on the AIM
Web site, AIMinvestments.com. On the home page, scroll down and click on AIM
Funds Proxy Policy. The information is also available on the Securities and
Exchange Commission's Web site, sec.gov.
Information regarding how the fund voted proxies related to its portfolio
securities during the 12 months ended 6/30/04 is available at our Web site. Go
to AIMinvestments.com, access the About Us tab, click on Required Notices and
then click on Proxy Voting Activity. Next, select your fund from the drop-down
menu.
</Table>
YOUR GOALS. OUR SOLUTIONS. [AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark-- --Registered Trademark--
TFIT-SAR-6
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This is the semiannual report on the performance of the
ROBERT H. Personal Investment Class of the Tax-Free Cash Reserve
GRAHAM] Portfolio of Tax-Free Investments Trust, a money market fund
investing in short-term municipal bonds of the highest
ROBERT H. GRAHAM credit ratings. The report is for the six-month period ended
September 30, 2004.
Historically low interest rates resulted in low yields
for money market instruments.
The Federal Reserve (the Fed), which had left the federal
funds target rate at 1.00% since June 2003 (the lowest rate
since 1958), increased the rate by 0.25% (or 25 basis
points) three times during the six-month reporting period.
With the latest increase on September 21, the rate stood at
1.75%. The federal funds rate is the interest rate at which depository
institutions lend balances at the Fed to other depository institutions
overnight. The federal funds rate does not mandate the rates offered on
municipal bonds. However, the low-interest rate environment resulting from the
federal funds rate, as well as the overall economic climate itself, affects all
fixed-income investing.
Indications of sustained economic growth characterized the bond market during
the second quarter of 2004, according to The Bond Market Association's Research
Quarterly. The report noted that considering interest rate volatility in 2004,
bond markets in general have responded well to sustained economic growth.
However, municipal bond issuance declined in the quarter amid rising rates and a
flattening yield curve.
Economic activity continued to expand throughout the reporting period,
according to Beige Books published by the Fed. The nation's gross domestic
product, generally considered the broadest measure of economic activity, grew at
an annualized rate of 3.3% in the second quarter and 3.7% in the third quarter
of 2004. According to the Department of Labor, 1.05 million jobs were created
during the reporting period. However, a slowdown in job growth led to declining
consumer confidence in August and September, according to The Conference Board.
At the close of the fiscal year, the unemployment rate stood at 5.4%.
The September Beige Book reported that the economy continued to improve in
July and August, with 11 districts reporting increased activity levels during
the summer. All but one district reported an increase in manufacturing activity.
Labor markets remained slack across the nation, with few reports of occupational
shortages, while retail sales improved modestly in July and August, according to
the Beige Book report.
YOUR INVESTMENT PORTFOLIO
For the six-month period ended September 30, 2004, the seven-day SEC and monthly
yields for the Tax-Free Cash Reserve Portfolio's Personal Investment Class were
0.72% and 0.60%, respectively. The seven-day SEC yield and monthly yield
represent annualized results for the period, net of fees and expenses, and
exclude any realized capital gains or losses. Yields will fluctuate. Had the
advisor and distributor not waived fees and/or reimbursed expenses, performance
would have been lower. Through a combination of short-term cash management
========================================
PORTFOLIO COMPOSITION BY MATURITY
In days, as of 9/30/04
1-7 75.5%
8-14 2.6
15-60 7.7
61-120 6.7
121-180 1.8
181-240 0.7
241+ 5.0
The number of days to maturity of each
holding is determined in accordance with
the provisions of Rule 2a-7 under the
Investment Company Act of 1940.
========================================
[AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark--
(continued)
The views and opinions vehicles and selective use of a longer maturity
expressed in this letter schedule for higher yields, the portfolio
are those of A I M continued to provide relatively attractive
Advisors, Inc. These returns. The weighted average maturity (WAM)
views and opinions are remained in the 25- to 42-day range; at the close
subject to change at any of the reporting period, the WAM stood at 35 days.
time based on factors The portfolio continued to maintain a relatively
such as market and short maturity structure to take advantage of any
economic conditions. sudden rise in market yields.
These views and opinions
may not be relied upon as The portfolio continued to hold the highest
investment advice or credit-quality ratings given by three widely known
recommendations, or as an credit rating agencies: AAAm from Standard &
offer for a particular Poor's, Aaa from Moody's and AAA from
security. Statements of FitchRatings. Fund ratings are subject to change
fact are from sources and are based on several factors including an
considered reliable, but analysis of a portfolio's overall credit quality,
A I M Advisors, Inc. market price exposure and management.
makes no representation
or warranty as to their The Tax-Free Cash Reserve Portfolio seeks to
completeness or accuracy. provide as high a level of tax-exempt income as is
Although historical consistent with preservation of capital and
performance is no maintenance of liquidity by investing in
guarantee of future high-quality, short-term municipal obligations.
results, these insights The portfolio invests solely in securities that,
may help you understand at the time of investment, are "First Tier," as
our investment management defined in Rule 2a-7 under the Investment Company
philosophy. Act of 1940.
THIS REPORT MUST BE IN CONCLUSION
ACCOMPANIED OR PRECEDED
BY A CURRENTLY EFFECTIVE Despite raising the federal funds rate for the
FUND PROSPECTUS, WHICH third time since June 24, as the reporting period
CONTAINS MORE COMPLETE closed, the Fed believed that monetary policy
INFORMATION, INCLUDING remains accommodative. After the September rate
SALES CHARGES AND increase, the Fed stated that it expects
EXPENSES. READ IT underlying inflation to be relatively low, but
CAREFULLY BEFORE YOU that it would "respond to changes in economic
INVEST. prospects as needed to maintain price stability."
PERFORMANCE QUOTED IS We are pleased to send you this report on your
PAST PERFORMANCE AND investment. AIM is committed to the primary goals
CANNOT GUARANTEE of safety, liquidity and yield in institutional
COMPARABLE FUTURE fund management. We are also dedicated to customer
RESULTS; CURRENT service. Should you have comments or questions
PERFORMANCE MAY BE LOWER about this report, please contact one of our
OR HIGHER. VISIT representatives at 800-659-1005.
AIMINVESTMENTS.COM FOR
THE MOST RECENT MONTH-END Sincerely,
PERFORMANCE.
/s/ ROBERT H. GRAHAM
AN INVESTMENT IN THE FUND --------------------------------------
IS NOT INSURED OR Robert H. Graham
GUARANTEED BY THE FEDERAL Chairman, A I M Management Group Inc.
DEPOSIT INSURANCE
CORPORATION OR ANY OTHER Beginning with fiscal periods ending after
GOVERNMENT AGENCY. December 31, 2004, the fund files its complete
ALTHOUGH THE FUND SEEKS schedule of portfolio holdings with the Securities
TO PRESERVE THE VALUE OF and Exchange Commission ("SEC") for the first and
YOUR INVESTMENT AT $1.00 third quarters of each fiscal year on Form N-Q.
PER SHARE, IT IS POSSIBLE The fund's Form N-Q filings are available on the
TO LOSE MONEY BY SEC's website at http://www.sec.gov. Copies of the
INVESTING IN THE FUND. fund's Forms N-Q may be reviewed and copied at the
SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549-0102. You can obtain
information on the operation of the Public
Reference Room, including information about
duplicating fee charges, by calling 1-202-942-8090
or by electronic request at the following E-mail
address: publicinfo@sec.gov. The SEC file numbers
for the fund are 8112731 and 2-58286. The fund's
most recent portfolio holdings, as filed on Form
N-Q, are also available at www.aiminvestments.com.
2
INFORMATION ABOUT YOUR FUND'S EXPENSES
EXAMPLE
As a shareholder of the fund, you incur ongoing costs, including management
fees; distribution and/or service fees (12b-1); and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the fund and to compare these costs with ongoing costs of investing
in other mutual funds. The example is based on an investment of $1,000 invested
at the beginning of the period and held for the entire period, April 1, 2004 -
September 30, 2004.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use this information to compare the ongoing costs of investing in the fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
================================================================================
<Table>
<Caption>
HYPOTHETICAL
ACTUAL (5% ANNUAL RETURN
BEFORE EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING
(04/01/04) (09/30/04)(1) PERIOD(2) (09/30/04) PERIOD(2)
PERSONAL
INVESTMENT
CLASS $1,000.00 $1,001.90 $3.86 $1,021.21 $3.90
</Table>
(1) The actual ending account value is based on the actual total return of the
fund for the period April 1, 2004 to September 30, 2004 after actual expenses
and will differ from the hypothetical ending account value which is based on the
Fund's expense ratio and a hypothetical annual return of 5% before expenses. The
actual cumulative return at net asset value for the period April 1, 2004 to
September 30, 2004 was 0.19% for Personal Investment Class shares.
(2) Expenses are equal to the Fund's annualized expense ratio (0.77% for
Personal Investment Class shares) multiplied by the average account value over
the period, multiplied by 183/365 (to reflect the one-half year period).
================================================================================
3
SCHEDULE OF INVESTMENTS
September 30, 2004
(Unaudited)
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS-100.40%
ALABAMA-1.62%
Birmingham (City of) Public Parks &
Recreation Board
(Children's Zoo Project); VRD Series 2002
RB
(LOC-AmSouth Bank)
1.84%, 05/01/07(b(c) -- VMIG-1 $ 2,925 $ 2,925,000
- -------------------------------------------------------------------------------------------
Birmingham (City of) Public Parks &
Recreation Board
(YMCA Project); Refunding VRD Series 1996
RB
(LOC-AmSouth Bank)
1.84%, 06/01/16(b)(c) -- VMIG-1 1,990 1,990,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Birmingham
Waterworks & Sewer Board);
VRD Series 2002-6009 Class A COP
(Acquired 11/05/02; Cost $4,100,000)
1.75%, 01/01/43(c)(d)(e) A-1+ -- 4,100 4,100,000
- -------------------------------------------------------------------------------------------
VRD Series 2003-0007 Class A COP
(Acquired 04/16/03; Cost $7,370,000)
1.75%, 01/01/43(c)(d)(e) A-1+ -- 7,370 7,370,000
- -------------------------------------------------------------------------------------------
Homewood (City of) Medical Clinic Board
(Lakeshore Foundation Project); Lease
Revenue VRD Series 2000 RB
(LOC-AmSouth Bank)
1.84%, 11/01/24(b)(c) A-1 -- 6,046 6,046,000
- -------------------------------------------------------------------------------------------
Mobile (City of); Port City Medical Clinic
Board (Infirmary Health); VRD Series 1998 B
RB
1.71%, 02/01/25(c)(f) A-1 VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Montgomery (City of) Industrial Development
Board
(Industrial Partners Project); Refunding
VRD Series 1989 IDR
(LOC-SunTrust Bank)
1.73%, 01/01/07(b)(c) -- Aa2 635 635,000
- -------------------------------------------------------------------------------------------
Oxford (City of); Unlimited Tax VRD Series
2003 GO Wts.
(LOC-Branch Banking & Trust)
1.73%, 07/01/15(b)(c) -- VMIG-1 5,180 5,180,000
- -------------------------------------------------------------------------------------------
Ridge (City of) Improvement District; Special
Assessment VRD Series 2000 RB (LOC-AmSouth
Bank)
1.73%, 10/01/25(b)(c) -- VMIG-1 13,335 13,335,000
- -------------------------------------------------------------------------------------------
Tuscaloosa (City of) Educational Building
Authority (Stillman College Project);
Refunding Capital Improvement VRD Series
2002 A RB (LOC-AmSouth Bank)
1.84%, 10/01/23(b)(c) -- VMIG-1 500 500,000
===========================================================================================
47,081,000
===========================================================================================
</Table>
F-1
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ALASKA-0.13%
Alaska (State of) Industrial Development &
Export Authority
(Safeway Inc. Projects); Refunding VRD
Series 1991 IDR
(LOC-Deutsche Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1 -- $ 1,895 $ 1,895,000
- -------------------------------------------------------------------------------------------
Alaska (State of) Industrial Development
Authority
(Alaska Hotel Properties Inc. Project); VRD
Series 1986 IDR
(LOC-Royal Bank of Scotland)
(Acquired 12/17/02; Cost $800,000)
1.70%, 06/01/06(b)(c)(d) -- Aa1 800 800,000
- -------------------------------------------------------------------------------------------
Matanuska-Susitna (Borough of); Unlimited Tax
Series 1998 A GO
4.50%, 03/01/05(f) AAA Aaa 1,000 1,012,718
===========================================================================================
3,707,718
===========================================================================================
ARIZONA-1.43%
Apache (County of) Industrial Development
Authority
(Tucson Electric Power Co.); Floating Rate
Series 1982 A IDR
(LOC-Credit Suisse First Boston)
1.75%, 12/15/18(b)(c) A-1 VMIG-1 6,625 6,625,000
- -------------------------------------------------------------------------------------------
Casa Grande (City of) Industrial Development
Authority (Center Park Apartments Project);
Refunding Multi-Family Housing VRD Series
2001 A IDR (CEP-Federal National Mortgage
Association)
1.72%, 06/15/31(c) -- VMIG-1 2,010 2,010,000
- -------------------------------------------------------------------------------------------
Casa Grande (City of) Industrial Development
Authority (Quail Gardens Apartments);
Refunding Multi-Family Housing VRD Series
2001 A IDR (CEP-Federal National Mortgage
Association)
1.72%, 06/15/31(c) -- VMIG-1 1,550 1,550,000
- -------------------------------------------------------------------------------------------
Phoenix (City of) Civic Improvement Corp.;
Wastewater System Series 2003 BAN
1.22%, 11/12/04 A-1+ P-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
1.23%, 12/16/04 A-1+ P-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
1.27%, 01/10/05 A-1+ P-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Phoenix (City of) Industrial Development
Authority
(Lynwood Apartments Project); Refunding VRD
Series 1994 IDR
(CEP-Federal Home Loan Bank)
1.75%, 10/01/25(c) A-1+ -- 6,020 6,020,000
- -------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Tucson Electric Power
Co.-Irvington Road Project); VRD Series
1982 IDR (LOC-Credit Suisse First Boston)
1.68%, 10/01/22(b)(c) A-1 VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
University of Arizona (University of Arizona
Projects);
VRD Series 2004 B COP
1.64%, 06/01/31(c)(f) A-1+ VMIG-1 2,550 2,550,000
===========================================================================================
41,755,000
===========================================================================================
</Table>
F-2
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ARKANSAS-0.09%
Pulaski (County of) Public Facilities Board
(Health Facilities-Central Arkansas
Radiation Therapy Inc. Project);
Educational Facilities VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.75%, 07/01/08(b)(c)(i) -- -- $ 2,500 $ 2,500,000
===========================================================================================
CALIFORNIA-0.05%
San Diego (County of) (Friends of Chabad
Lubavitch);
VRD Series 2003 COP (LOC-Comerica Bank)
1.78%, 01/01/23(b)(c)(i) -- -- 1,500 1,500,000
===========================================================================================
COLORADO-2.39%
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Art Museum
Project); VRD Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 01/01/33(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Seminary
Project); VRD Series 2004 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 07/01/24(b)(c) A-1+ -- 1,200 1,200,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (National Cable
Television Center & Museum Project);
VRD Series 1999 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 10/01/06(b)(c) A-1+ -- 1,505 1,505,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority
(Regis Jesuit High School Project); VRD
Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 12/01/33(b)(c) A-1+ -- 5,015 5,015,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Arapahoe House Project); VRD Series 2004 A
RB
(LOC-Wells Fargo Bank N.A.)
1.76%, 04/01/24(b)(c) A-1+ -- 1,200 1,200,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Christian Living Project); Refunding VRD
Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.74%, 01/01/31(b)(c) A-1+ -- 3,400 3,400,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Craig Hospital Project); Refunding VRD
Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 12/01/20(b)(c) A-1+ -- 5,605 5,605,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Golden West Manor Inc. Project); VRD
Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.74%, 07/01/32(b)(c) A-1+ -- 4,210 4,210,000
- -------------------------------------------------------------------------------------------
Colorado Springs (City of) (Pikes Peak Mental
Health);
VRD Series 2003 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 03/15/23(b)(c) A-1+ -- 3,570 3,570,000
- -------------------------------------------------------------------------------------------
</Table>
F-3
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
COLORADO-(CONTINUED)
Denver (City & County of) (Kentucky Circle
Village Project); VRD Series 2000 RB
(LOC-Mountain States Bank, U.S. Bank N.A.)
1.74%, 10/01/29(b)(c) A-1+ -- $ 1,740 $ 1,740,000
- -------------------------------------------------------------------------------------------
Idaho Springs (City of); (Safeway Inc.
Project);
Refunding VRD Series 1993 IDR (LOC-Deutsche
Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1+ -- 940 940,000
- -------------------------------------------------------------------------------------------
Jefferson (County of) School District No.
R-001; Series 2004 A TAN
3.00%, 06/30/05 SP-1+ MIG-1 30,000 30,332,309
- -------------------------------------------------------------------------------------------
Lafayette (City of) Exempla Improvement
District
(Special Improvement No. 2-01);
Refunding Special Assessment VRD Series
2002 RB
(LOC-Wells Fargo Bank N.A.)
1.72%, 12/01/22(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (City & County of
Denver Water);
VRD Series 2003 PT-1872 RB
(Acquired 05/29/03; Cost $7,830,000)
1.73%, 12/01/22(c)(d)(e)(i) -- -- 7,830 7,830,000
- -------------------------------------------------------------------------------------------
Regional Transportation (District of);
Refunding Sales Tax Series 2003 A RB
3.00%, 11/01/04(f) AAA Aaa 1,000 1,001,613
===========================================================================================
69,548,922
===========================================================================================
CONNECTICUT-0.09%
Connecticut (State of) Development Authority
(Central Vermont Public Service); Floating
Rate Series 1985 PCR
(LOC-Royal Bank of Scotland)
1.35%, 12/01/15(b)(j) A-1+ -- 1,400 1,400,000
- -------------------------------------------------------------------------------------------
Connecticut (State of) Development Authority
(Connecticut Water Co. Project); Refunding
Water Facilities VRD Series 2004 B RB
(LOC-Royal Bank of Scotland)
1.70%, 09/01/28(b)(c) A-1+ -- 1,125 1,125,000
===========================================================================================
2,525,000
===========================================================================================
DELAWARE-0.28%
Delaware (State of) Economic Development
Authority
(Independent School Inc. Project); VRD
Series 2003 RB
(LOC-Royal Bank of Scotland)
1.69%, 07/01/33(b)(c) A-1+ -- 8,250 8,250,000
===========================================================================================
DISTRICT OF COLUMBIA-0.89%
District of Columbia (Consortium Issue); VRD
Series 1998 RB
(LOC-Wachovia Bank N.A.)
1.69%, 07/01/23(b)(c) A-1 -- 15,755 15,755,000
- -------------------------------------------------------------------------------------------
District of Columbia (National Children's
Center Inc.);
VRD Series 1993 RB (LOC-Bank of America
N.A.)
1.70%, 02/01/20(b)(c) A-1+ -- 3,385 3,385,000
- -------------------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA-(CONTINUED)
District of Columbia (Resources for the
Future Inc.);
VRD Series 1998 RB (LOC-Wachovia Bank N.A.)
(Acquired 09/26/03; Cost $2,015,000)
1.75%, 08/01/29(b)(c)(d) A-1 -- $ 2,015 $ 2,015,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (District of Columbia
Water & Sewer Authority); VRD Series 2003
A12 RB
(Acquired 02/24/03; Cost $4,655,000)
1.74%, 10/01/17(c)(d)(e) -- VMIG-1 4,655 4,655,000
===========================================================================================
25,810,000
===========================================================================================
FLORIDA-3.88%
ABN AMRO Munitops Ctfs. Trust (County of
Escambia);
Refunding Florida Non-AMT VRD Series
2002-24 Ctfs.
(Acquired 10/24/02; Cost $5,000,000)
1.73%, 10/01/10(c)(d)(e) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Capital Projects Finance Authority (Capital
Projects Loan Program); VRD Series 1997 A
RB
1.74%, 08/01/17(c)(f) A-1+ -- 1,050 1,050,000
- -------------------------------------------------------------------------------------------
Clay (County of) Housing Finance Authority
(Bluff Housing); Refunding Multi-Family
Housing VRD Series 2001 A RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 11/01/14(c) A-1+ -- 1,150 1,150,000
- -------------------------------------------------------------------------------------------
Collier (County of) Health Facilities
Authority
(Cleveland Clinic Health); VRD Hospital
Series 2003 C-2 BAN
(LOC-JPMorgan Chase Bank)
1.55%, 11/22/04(c) A-1+ VMIG-1 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Collier (County of) Industrial Development
Authority
(Redlands Christian Migrant); VRD Series
2001 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/26(b)(c)(i) -- -- 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Duval (County of) Housing Finance Authority
(Sunbeam Road Apartments Project);
Refunding Multi-Family Housing VRD Series
1997 RB
(LOC-Bank of America N.A.)
1.70%, 07/01/25(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Jacksonville (City of) Health Facilities
Authority (Baptist Medical Center Project);
VRD Hospital Series 2003 B RB
(LOC-Bank of America N.A.)
0.98%, 12/22/04(b)(g)(k) A-1+ -- 19,000 19,000,000
- -------------------------------------------------------------------------------------------
Jacksonville (City of) Health Facilities
Authority
(Samuel C. Taylor Foundation Project); VRD
Series 1998 RB (LOC-Bank of America N.A.)
(Acquired 02/20/01; Cost $2,800,000)
1.75%, 12/01/23(b)(c)(d)(i) -- -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
</Table>
F-5
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
Jacksonville (City of) Health Facilities
Authority (University of Florida
Jacksonville Physicians, Inc.); VRD Series
2002 RB
(LOC-Bank of America N.A.)
1.73%, 06/01/22(b)(c) -- VMIG-1 $12,140 $ 12,140,000
- -------------------------------------------------------------------------------------------
Lakeland (City of) Electric & Water;
Refunding Series 1992 RB
5.63%, 10/01/04(l) NRR -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Marion (County of) Hospital District (Munroe
Regional Health System); Health System
Improvement VRD Series 2000 RB
(LOC-AmSouth Bank)
1.72%, 10/01/30(b)(c) -- VMIG-1 13,375 13,375,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (State of Florida
Mid-Bay Bridge Authority); VRD Series 2002
PT-1531 RB
(Acquired 10/10/02; Cost $9,100,000)
1.72%, 10/01/18(c)(d)(e) A-1+ -- 9,100 9,100,000
- -------------------------------------------------------------------------------------------
Miami-Dade (County of) Educational Facilities
Authority
(Carlos Albizu University Project); VRD
Series 2000 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/25(b)(c)(i) -- -- 9,400 9,400,000
- -------------------------------------------------------------------------------------------
Miami-Dade (County of) Industrial Development
Authority
(Palmer Trinity Private School Project);
VRD Series 1999 IDR
(LOC-Bank of America N.A.)
1.75%, 12/01/19(b)(c)(i) -- -- 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Florida Department of
Environmental Protection); Floating Rate
Trust Ctfs. VRD Series 2002-722 RB
(Acquired 11/13/02; Cost $9,850,000)
1.73%, 07/01/22(c)(d)(e) A-1 -- 9,850 9,850,000
- -------------------------------------------------------------------------------------------
North Miami (City of) Educational Facilities
(Miami Country Day School Project); VRD
Series 1999 RB
(LOC-Bank of America N.A.)
1.75%, 08/01/19(b)(c)(i) -- -- 1,550 1,550,000
- -------------------------------------------------------------------------------------------
Orange (County of) Health Facilities
Authority
(Adventist Health System); VRD Series 1992
RB
(LOC-SunTrust Bank)
1.70%, 11/15/14(b)(c) A-1+ VMIG-1 1,155 1,155,000
- -------------------------------------------------------------------------------------------
Orange (County of) Health Facilities
Authority (Presbyterian Retirement
Communities Project); VRD Series 1998 RB
(LOC-Bank of America N.A.)
(Acquired 01/29/02-09/01/04; Cost
$5,129,000)
1.75%, 11/01/28(b)(c)(d)(i) -- -- 5,129 5,129,000
- -------------------------------------------------------------------------------------------
Palm Beach (County of) Educational Facilities
Authority (Atlantic College Project);
Educational Facilities VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/31(b)(c)(i) -- -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
Pasco (County of); Refunding Water & Sewer
Series 2002 RB
5.00%, 10/01/04(f) AAA Aaa 1,000 1,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-6
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
Tampa (City of) (Agency for Community
Treatment DACCO Project); VRD Series 2001
RB (LOC-Bank of America N.A.)
1.75%, 07/01/22(b)(c)(i) -- -- $ 5,080 $ 5,080,000
- -------------------------------------------------------------------------------------------
University of North Florida Foundation, Inc.
(Parking System);
VRD Series 1998 RB (LOC-Wachovia Bank N.A.)
1.73%, 05/01/28(b)(c) A-1 -- 800 800,000
===========================================================================================
113,079,000
===========================================================================================
GEORGIA-5.07%
Athens-Clarke (County of) Unified Government
Development Authority (University of
Georgia Athletic Association Project);
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.76%, 08/01/33(b)(i)(m) -- -- 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Clayton (County of) Development Authority
(Delta Airlines Project); Special
Facilities VRD Series 2000 A RB
(CEP-General Electric Capital Corp.)
1.71%, 06/01/29(c) A-1+ VMIG-1 7,500 7,500,000
- -------------------------------------------------------------------------------------------
Cobb (County of) Housing Authority (Tamarron
Apartments Project); Refunding Multi-Family
Housing VRD Series 2003 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 03/01/24(c) A-1+ -- 5,050 5,050,000
- -------------------------------------------------------------------------------------------
Cobb (County of) School District; Limited Tax
Series 2004 GO
1.75%, 12/31/04 -- MIG-1 20,000 20,038,500
- -------------------------------------------------------------------------------------------
DeKalb (County of) Hospital Authority
(DeKalb Medical Center Inc. Project); VRD
Series 2000 B RB
(LOC-Wachovia Bank N.A.)
1.69%, 10/01/25(b)(c) -- VMIG-1 10,925 10,925,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Georgia);
VRD Series 2000-1001 C COP (Acquired
07/26/00; Cost $20,000,000)
1.75%, 07/01/15(c)(d)(e) A-1+ -- 20,000 20,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Dalton); Utilities VRD
Series 2003 A02 RB
(Acquired 08/25/04; Cost $4,895,000)
1.74%, 01/01/12(c)(d)(e) -- VMIG-1 4,895 4,895,000
- -------------------------------------------------------------------------------------------
Fulton (County of) Development Authority
(Bridgeway Foundation for Education
Project); Educational Facilities VRD Series
2000 RB
(LOC-Wachovia Bank N.A.)
1.74%, 06/01/15(b)(c) A-1 -- 1,400 1,400,000
- -------------------------------------------------------------------------------------------
Fulton (County of) Hospital Authority
(Northside Hospital Inc.);
VRD Series 2003 A RAN (LOC-Wachovia Bank
N.A.)
1.69%, 10/01/18(b)(c) -- VMIG-1 28,860 28,860,000
- -------------------------------------------------------------------------------------------
Georgia (State of); Unlimited Tax Series 1999
D GO
5.80%, 11/01/04 AAA Aaa 1,400 1,405,461
- -------------------------------------------------------------------------------------------
Gwinnett (County of) School District; Limited
Construction Sales Tax Notes Series 2004 GO
1.75%, 12/30/04 -- MIG-1 15,000 15,025,977
- -------------------------------------------------------------------------------------------
</Table>
F-7
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
GEORGIA-(CONTINUED)
Houston (County of) Hospital Authority; VRD
Series 2002 RB
(LOC-Wachovia Bank N.A.)
1.69%, 10/01/14(b)(c) A-1 -- $ 9,230 $ 9,230,000
- -------------------------------------------------------------------------------------------
Private Colleges & Universities Authority
(Mercer University Project); VRD Series
2003 RB (LOC-Branch Banking & Trust)
1.82%, 10/01/32(b)(c) -- VMIG-1 7,260 7,260,000
- -------------------------------------------------------------------------------------------
Roswell (City of) Housing Authority (Rosemont
Apartments Project); Refunding Multi-Family
Housing VRD Series 2003 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 01/01/34(c) A-1+ -- 10,555 10,555,000
- -------------------------------------------------------------------------------------------
Smyrna (City of) Hospital Authority
(Ridgeview Institute Inc. Project); VRD
Series 2002 RB (LOC-Wachovia Bank N.A.)
1.74%, 11/01/27(b)(c) -- VMIG-1 2,210 2,210,000
===========================================================================================
147,854,938
===========================================================================================
HAWAII-0.37%
Eagle Tax Exempt Trust (State of Hawaii); VRD
Series 2000-1101 COP (Acquired 01/11/01;
Cost $6,000,000)
1.75%, 12/01/16(c)(d)(e) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Hawaii);
Unlimited Tax VRD Series 2003 A16 GO
(Acquired 02/27/03; Cost $3,885,000)
1.74%, 07/01/18(c)(d)(e) -- VMIG-1 3,885 3,885,000
- -------------------------------------------------------------------------------------------
Hawaii (State of); Refunding Unlimited Tax
Series 1997 CO GO
6.00%, 03/01/05(f) AAA Aaa 1,000 1,020,421
===========================================================================================
10,905,421
===========================================================================================
IDAHO-0.47%
Custer (County of) Pollution Control (Amoco
Oil Co.-Standard Oil Industry Project); VRD
Series 1983 RB
0.90%, 04/01/05(g)(h) A-1+ Aa1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Magic Valley Healthcare System Inc.
(Magic Valley Regional Medical Center
Project);
VRD Series 2001 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 12/01/21(b)(c) -- VMIG-1 3,640 3,640,000
===========================================================================================
13,640,000
===========================================================================================
ILLINOIS-14.26%
ABN AMRO Munitops Ctfs. Trust (City of
Chicago); Refunding
Multi-State Non-AMT VRD Limited Tax Series
2001-34 Ctfs. (Acquired 11/15/01; Cost
$10,000,000)
1.75%, 07/01/07(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Bear Stearns Municipal Securities Trust Ctfs.
(State of Illinois Sales Tax); VRD Series
1998-25 Class A RB
(Acquired 08/26/99; Cost $10,000,000)
1.75%, 03/15/07(c)(d)(e) A-1 Aa2 10,000 10,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-8
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Bear Stearns Municipal Securities Trust Ctfs.
(State of Illinois);
VRD Series 2002-190 Class A RB
(Acquired 05/06/02; Cost $10,130,000)
1.75%, 06/05/14(c)(d)(e) A-1 -- $10,130 $ 10,130,000
- -------------------------------------------------------------------------------------------
Chicago (City of); VRD Limited Tax Obligation
Tender Series 2004 GO (LOC-State Street
Bank & Trust Co.)
1.05%, 01/13/05(b)(g)(k) SP-1+ MIG-1 4,000 4,000,000
- -------------------------------------------------------------------------------------------
Chicago (City of); VRD Unlimited Tax Series
2002 B GO
1.70%, 01/01/37(c)(f) A-1+ VMIG-1 8,400 8,400,000
- -------------------------------------------------------------------------------------------
Crestwood (City of) (Trinity Christian
College);
VRD Series 2003 RB (LOC-Fifth Third Bank)
1.51%, 09/01/28(b)(c) A-1+ -- 3,775 3,775,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago Water
& Sewer); VRD Series 2001-1308 COP
(Acquired 12/12/01; Cost $8,655,000)
1.75%, 11/01/26(c)(d)(e) A-1+ -- 8,655 8,655,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago); VRD
Series 2001-1305 COP (Acquired 04/02/01;
Cost $4,950,000)
1.84%, 01/01/35(c)(d)(e) A-1+ -- 4,950 4,950,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (County of Cook
Regional Transportation Authority); VRD
Series 2000-1303 COP
(Acquired 03/26/01; Cost $19,000,000)
1.75%, 07/01/23(c)(d)(e) A-1+ -- 19,000 19,000,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Illinois);
VRD Unlimited Tax Series 2003-0023 Class A
COP
(Acquired 06/12/03; Cost $3,775,000)
1.75%, 06/01/15(c)(d)(e) A-1+ -- 3,775 3,775,000
- -------------------------------------------------------------------------------------------
VRD Series 2000-1304 COP (Acquired
06/27/00; Cost $7,340,000)
1.75%, 06/01/21(c)(d)(e) A-1+ -- 7,340 7,340,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Chicago Park
District);
VRD Unlimited Tax Series 2002-1306 Class A
COP
(Acquired 05/02/02; Cost $5,500,000)
1.75%, 01/01/29(c)(d)(e) A-1+ -- 5,500 5,500,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago
Public Building Commission); VRD Series
2003-0015 Class A COP (Acquired 05/14/03;
Cost $2,800,000)
1.75%, 12/01/14(c)(d)(e) A-1+ -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Central Lake County
Joint Action Water Agency); VRD Series 2003
B18 RB
(Acquired 02/19/03; Cost $3,155,000)
1.74%, 05/01/20(c)(d)(e) -- VMIG-1 3,155 3,155,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Chicago Board of
Education);
VRD Unlimited Tax Series 2000 A4 GO
(Acquired 11/12/03; Cost $4,845,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 4,845 4,845,000
- -------------------------------------------------------------------------------------------
</Table>
F-9
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
First Union MERLOTs (City of Chicago); VRD
Limited Tax Series 2000 A12 GO (Acquired
10/13/00; Cost $10,000,000)
1.74%, 01/01/23(c)(d)(e) -- VMIG-1 $10,000 $ 10,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Chicago
Emergency Telephone System); VRD Limited
Tax Series 2002 A44 GO
(Acquired 08/02/02; Cost $7,855,000)
1.74%, 01/01/20(c)(d)(e) -- VMIG-1 7,855 7,855,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Cook County Regional
Transportation Authority);
VRD Unlimited Tax Series 2001 A93 GO
(Acquired 10/10/01; Cost $3,670,000)
1.74%, 07/01/27(c)(d)(e) -- VMIG-1 3,670 3,670,000
- -------------------------------------------------------------------------------------------
VRD Unlimited Tax Series 2002 A41 GO
(Acquired 07/25/02; Cost $17,825,000)
1.74%, 06/01/17(c)(d)(e) -- VMIG-1 17,825 17,825,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Cook County); VRD
Unlimited Tax Series 2003 B11 GO (Acquired
01/29/03; Cost $7,000,000)
1.74%, 11/15/25(c)(d)(e) -- VMIG-1 7,000 7,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Illinois); VRD
Unlimited Tax Series 2001 A124 GO (Acquired
11/26/01; Cost $7,915,000)
1.74%, 11/01/26(c)(d)(e) A-1 -- 7,915 7,915,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (University of Illinois);
VRD Series 2000 S GO (Acquired 03/20/00;
Cost $7,400,000)
1.74%, 04/01/30(c)(d)(e) -- VMIG-1 7,400 7,400,000
- -------------------------------------------------------------------------------------------
Glendale Heights (City of) (Glendale Lakes
Project);
Refunding Multi-Family Housing VRD Series
2000 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.69%, 03/01/30(c) A-1+ -- 14,845 14,845,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(American College of Surgeons); VRD Series
1996 RB
(LOC-Northern Trust Co.)
1.60%, 08/01/26(b)(c) A-1+ -- 7,298 7,298,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (BAPS Inc. Project); VRD Series
2002 RB (LOC-Comerica Bank)
1.70%, 06/01/17(b)(c) A-1 -- 9,000 9,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(British Home for Retired Men & Women);
VRD Series 2001 RB (LOC-ABN AMRO Bank N.V.)
1.71%, 11/01/27(b)(c) A-1 -- 9,120 9,120,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Chicago Shakespeare Theater Project); VRD
Series 1999 RB
(LOC-ABN AMRO Bank N.V.) (Acquired
09/24/03; Cost $4,100,000)
1.71%, 01/01/19(b)(c)(d) A-1 -- 4,100 4,100,000
- -------------------------------------------------------------------------------------------
</Table>
F-10
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Development Finance
Authority (Embers Elementary School
Project); Educational Facilities VRD Series
2002 RB (LOC-ABN AMRO Bank N.V.)
(Acquired 11/04/03; Cost $2,250,000)
1.72%, 04/01/32(b)(c)(d) A-1 -- $ 2,250 $ 2,250,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Evanston Northwestern); VRD Series 2001 C
RB
1.70%, 05/01/31(c) A-1+ VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Glenwood School for Boys); VRD Series 1998
RB
(LOC-Bank of Montreal)
1.70%, 02/01/33(b)(c) A-1+ -- 2,100 2,100,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Institute of Gas Technology Project); VRD
Series 1999 IDR
(LOC-Bank of Montreal)
1.80%, 09/01/24(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Lyric Opera of Chicago Project); VRD
Series 1994 RB
(LOC-Northern Trust Co., Bank of Montreal,
JPMorgan Chase Bank)
1.70%, 12/01/28(b)(c) A-1+ VMIG-1 30,000 30,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Mount Carmel High School Project); VRD
Series 2003 RB
(LOC-JPMorgan Chase Bank)
1.70%, 07/01/33(b)(c) -- VMIG-1 5,600 5,600,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Museum of Contemporary Art Project); VRD
Series 1994 RB
(LOC-JPMorgan Chase Bank, Northern Trust
Co.)
1.70%, 02/01/29(b)(c) A-1 VMIG-1 14,950 14,950,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(North Shore Country Day School); VRD
Series 2003 RB
(LOC-Northern Trust Co.)
1.70%, 07/01/33(b)(c) -- VMIG-1 2,825 2,825,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Oak Park Residence Corp. Project); VRD
Series 2001 RB
(LOC-ABN AMRO Bank N.V.) (Acquired
01/29/03; Cost $2,975,000)
1.71%, 07/01/41(b)(c)(d) A-1 -- 2,975 2,975,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Sacred Heart Schools Project); VRD Series
2003 RB
(LOC-Fifth Third Bank)
1.70%, 07/01/33(b)(c) -- VMIG-1 4,600 4,600,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (West Central Illinois
Educational Project); VRD Series 2002 RB
(LOC-JPMorgan Chase Bank)
1.70%, 09/01/32(b)(c) -- VMIG-1 4,800 4,800,000
- -------------------------------------------------------------------------------------------
</Table>
F-11
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Development Finance
Authority
(World Communications Inc.); VRD Series
2000 RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 08/01/15(b)(c) -- VMIG-1 $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (Aurora University); VRD Series
2002 RB (LOC-Fifth Third Bank)
1.75%, 03/01/32(b)(c) -- VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(Chicago Children's Museum); VRD Series
1994 RB
(LOC-JPMorgan Chase Bank)
1.70%, 02/01/28(b)(c) A-1 VMIG-1 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (DePaul University); VRD Series
1992 CP-1 RB (LOC-Northern Trust Co.)
1.70%, 04/01/26(b)(c) A-1+ VMIG-1 1,800 1,800,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(National Louis University); VRD Series
1999 B RB
(LOC-JPMorgan Chase Bank)
1.70%, 06/01/29(b)(c) A-1+ -- 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(University Pooled Financing Program); VRD
Series 1985 RB
1.70%, 12/01/05(c)(f) A-1 VMIG-1 1,050 1,050,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Alexian Brothers Health);
VRD Series 2004 RB (LOC-JPMorgan Chase
Bank)
1.67%, 04/01/35(b)(c) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Jewish
Charities);
VRD Series 2004 A RN (LOC-Bank of Montreal)
1.70%, 06/30/05(b)(c) A-1+ -- 7,630 7,630,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Kohl
Children's Museum);
VRD Series 2004 RB (LOC-Fifth Third Bank)
1.70%, 07/01/34(b)(c) -- VMIG-1 2,680 2,680,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Northwestern University);
VRD Sub-Series 2004 A RB
1.69%, 12/01/34(c) A-1+ VMIG-1 8,000 8,000,000
- -------------------------------------------------------------------------------------------
VRD Sub-Series 2004 B RB
1.70%, 12/01/34(c) A-1+ VMIG-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Bensenville Home Society); VRD Series 1989
A RB
(LOC-JPMorgan Chase Bank)
1.71%, 02/15/19(b)(c) A-1 -- 1,150 1,150,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Blessing Hospital);
VRD Series 1999 B RB
1.74%, 11/15/29(c)(f) A-1 VMIG-1 4,710 4,710,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Cradle Society Project); VRD
Series 1998 RB (LOC-JPMorgan Chase Bank)
1.70%, 04/01/33(b)(c) A-1+ -- 1,600 1,600,000
- -------------------------------------------------------------------------------------------
</Table>
F-12
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Health Facilities
Authority (Edward Hospital Obligated
Group); VRD Series 2001 C RB
1.71%, 02/01/34(c)(f) A-1 VMIG-1 $ 2,050 $ 2,050,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Franciscan Eldercare Project);
Refunding VRD Series 1996 E RB
(LOC-ABN AMRO Bank N.V.)
1.67%, 05/15/27(b)(c) A-1 -- 5,660 5,660,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Northwestern Memorial Hospital); VRD
Series 1995 RB
1.70%, 08/15/25(c) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Peace Memorial Ministries); VRD Series
2003 B RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 08/15/33(b)(c) A-1 -- 9,845 9,845,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Resurrection Health); VRD Series
1999 B RB
1.71%, 05/15/29(c)(f) A-1 VMIG-1 2,210 2,210,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(St. Luke's Medical Center); VRD Series
1998 B RB
1.71%, 11/15/23(c)(f) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority;
Revolving Fund Pooled VRD Series 1985 C RB
(LOC-JPMorgan Chase Bank)
1.70%, 08/01/15(b)(c) A-1+ VMIG-1 8,100 8,100,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Toll Highway Authority;
Refunding Toll Highway VRD Series 1998 B RB
1.75%, 01/01/16(c)(f) AAA VMIG-1 15,900 15,900,000
- -------------------------------------------------------------------------------------------
1.75%, 01/01/17(c)(f) AAA VMIG-1 4,600 4,600,000
- -------------------------------------------------------------------------------------------
Lombard (City of) (Clover Creek Apartments
Project);
VRD Multi-Family Housing Series 2000 RB
(CEP-Federal National Mortgage Association)
1.72%, 12/15/30(c) A-1+ -- 14,855 14,855,000
- -------------------------------------------------------------------------------------------
McCook (City of) (Illinois Saint Andrew
Society);
VRD Series 1996 A RB (LOC-Northern Trust
Co.)
1.72%, 12/01/21(b)(c) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Oak Forest (City of) (Homewood Pool-South
Suburban Mayors & Managers Association
Program); VRD Series 1989 RB
(LOC-Fifth Third Bank)
1.51%, 07/01/24(b)(c) -- VMIG-1 4,500 4,500,000
- -------------------------------------------------------------------------------------------
Orland Hills (City of); Multi-Family Housing
VRD Series 1995 A RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 12/01/04(b)(c) A-1 -- 1,470 1,470,000
===========================================================================================
415,763,000
===========================================================================================
</Table>
F-13
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
INDIANA-3.08%
ABN AMRO Munitops Ctfs. Trust (Township of
Wayne, County of Marion School Building
Corp.); Multi-State Non-AMT VRD Series
2003-27 RB (Acquired 11/12/03; Cost
$13,795,000)
1.76%, 07/15/11(c)(d)(e) -- VMIG-1 $13,795 $ 13,795,000
- -------------------------------------------------------------------------------------------
Brownsburg (City of) Independent School
Building Corp. No. 2;
First Mortgage Series 1995 RB
5.95%, 02/01/05(g)(l) AAA Aaa 1,700 1,761,041
- -------------------------------------------------------------------------------------------
First Union MERLOTs (County of Porter Jail
Building Corp.);
VRD Series 2001 A58 RB (Acquired 11/12/03;
Cost $9,415,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 9,415 9,415,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Bond Bank (Advanced
Program Notes); Series 2004 A RN
2.00%, 01/25/05 SP-1+ MIG-1 18,500 18,551,692
- -------------------------------------------------------------------------------------------
Indiana (State of) Bond Bank (Pike Township
Metropolitan School District); Series 1995
A RB
5.80%, 02/01/05(g)(l) AAA Aaa 2,750 2,821,138
- -------------------------------------------------------------------------------------------
Indiana (State of) Development Finance
Authority (Indiana Museum of Art);
Educational Facilities VRD Series 2004 RB
(LOC-JPMorgan Chase Bank)
1.70%, 02/01/39(b)(c) -- VMIG-1 3,000 3,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Educational Facilities
Authority
(Wabash College Project); Educational
Facilities VRD Series 2003 RB (LOC-JPMorgan
Chase Bank)
1.70%, 12/01/23(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Community Hospitals Project); VRD Series
2000 A RB
(LOC-Bank of America N.A.)
1.70%, 07/01/28(b)(c) A-1+ -- 9,815 9,815,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority (Community Mental
Health & Rehabilitation); VRD Series 1990
RB
(LOC-ABN AMRO Bank N.V.)
1.72%, 11/01/20(b)(c) A-1 -- 2,040 2,040,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Deaconess Hospital); VRD Series 2004 B RB
(LOC-Fifth Third Bank)
1.51%, 01/01/29(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Fayette Memorial Hospital Association);
VRD Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.77%, 10/01/32(b)(m) A-1+ -- 3,100 3,100,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Golden Years Homestead); VRD Series 2002 A
RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 06/01/25(b)(c) A-1+ -- 6,500 6,500,000
- -------------------------------------------------------------------------------------------
</Table>
F-14
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
INDIANA-(CONTINUED)
Indiana (State of) Health Facilities
Financing Authority
(Margaret Mary Community Hospital); VRD
Series 2004 A RB
(LOC-Fifth Third Bank)
1.77%, 12/01/29(b)(m) A-1+ -- $ 5,000 $ 5,000,000
- -------------------------------------------------------------------------------------------
Kokomo (City of) Hospital Authority (St.
Joseph's Hospital Center); Refunding
Hospital Series 1993 RB
6.35%, 08/15/05(g)(l) AAA Aaa 3,000 3,118,888
- -------------------------------------------------------------------------------------------
Monroe (County of) Hospital Authority;
Refunding VRD Hospital Series 1999 RB
1.69%, 05/01/11(c)(f) -- VMIG-1 3,900 3,900,000
===========================================================================================
89,817,759
===========================================================================================
IOWA-1.78%
Iowa (State of) Finance Authority Retirement
Community
(Deerfield Retirement Community); VRD
Series 2003 A RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 12/01/33(b)(c) A-1 -- 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Iowa (State of) Higher Education Loan
Authority
(Graceland Private College); VRD Series
2003 RB
(LOC-Bank of America N.A.)
1.75%, 02/01/33(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Iowa (State of) School Corps.; School Cash
Anticipation Program Series 2004 A Wts.
Ctfs.
3.00%, 06/30/05(f) -- MIG-1 10,000 10,103,360
- -------------------------------------------------------------------------------------------
Series 2004 B Wts. Ctfs.
2.00%, 01/28/05(f) -- MIG-1 18,000 18,045,776
- -------------------------------------------------------------------------------------------
Iowa City (City of) (ACT, Inc.); VRD Series
2001 RB
1.87%, 04/01/32(m) A-1+ -- 6,815 6,815,000
===========================================================================================
51,964,136
===========================================================================================
KANSAS-1.14%
Eagle Tax Exempt Trust (County of Wyandotte
Unified Government Utility System); VRD
Series 2004-0038 Class A COP (Acquired
09/08/04; Cost $5,000,000)
1.75%, 09/01/21(c)(d)(e) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Leawood (City of); Unlimited Tax Temporary
Notes Series 2004-2 GO
3.00%, 10/01/05 -- MIG-1 14,000 14,182,401
- -------------------------------------------------------------------------------------------
Lenexa (City of) Health Care Facilities
(Lakeview Village Inc.);
VRD Series 2002 B RB (LOC-ABN AMRO Bank
N.V.)
1.72%, 05/15/32(b)(c) A-1 -- 7,500 7,500,000
- -------------------------------------------------------------------------------------------
Olathe (City of) Recreational Facilities
(YMCA of Greater Kansas City Project); VRD
Series 2002 B RB (LOC-Bank of America N.A.)
1.75%, 11/01/18(b)(c) -- VMIG-1 3,100 3,100,000
- -------------------------------------------------------------------------------------------
</Table>
F-15
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
KANSAS-(CONTINUED)
Wichita (City of) Recreational Facilities
(YMCA of Wichita Project); VRD Series 1998
XI RB (LOC-Bank of America N.A.)
(Acquired 02/15/01; Cost $3,500,000)
1.75%, 08/01/09(b)(c)(d) A-1+ -- $ 3,500 $ 3,500,000
===========================================================================================
33,282,401
===========================================================================================
KENTUCKY-1.47%
Kentucky (State of) Asset/Liability
Commission;
General Funding Series 2004 A TRAN
3.00%, 06/29/05 SP-1+ MIG-1 15,000 15,159,010
- -------------------------------------------------------------------------------------------
Kentucky (State of) Area Developing Districts
Financing Trust
(Weekly Acquisition-Ewing); Lease Program
VRD Series 2000 RB (LOC-Wachovia Bank N.A.)
1.79%, 06/01/33(b)(c) A-1 -- 5,910 5,910,000
- -------------------------------------------------------------------------------------------
Newport (City of) Kentucky League of Cities
Funding Trust; Lease Program VRD Series
2002 RB (LOC-U.S. Bank N.A.)
1.53%, 04/01/32(b)(c) -- VMIG-1 20,000 20,000,000
- -------------------------------------------------------------------------------------------
Williamsburg (City of) Educational Building
(Cumberland Project); Refunding &
Improvement VRD Series 2002 RB
(LOC-Fifth Third Bank)
1.51%, 09/01/32(b)(c) A-1+ -- 1,790 1,790,000
===========================================================================================
42,859,010
===========================================================================================
LOUISIANA-0.95%
Eagle Tax Exempt Trust (City of New Orleans);
VRD Series 2000-1801 COP (Acquired
10/10/00; Cost $6,000,000)
1.75%, 12/01/21(c)(d)(e) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Louisiana (State of) Offshore Terminal
Authority (Loop LLC Project); Refunding
Deepwater Port Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.69%, 10/01/19(b)(c) A-1+ VMIG-1 16,400 16,400,000
- -------------------------------------------------------------------------------------------
Louisiana (State of) Public Facilities
Authority (Glen Retirement System Project);
VRD Series 2001 RB (LOC-AmSouth Bank)
(Acquired 08/15/01; Cost $3,380,000)
1.84%, 08/01/16(b)(c)(d) -- VMIG-1 3,380 3,380,000
- -------------------------------------------------------------------------------------------
Louisiana (State of); Unlimited Tax Series
1998 B GO
5.50%, 04/15/05(f) AAA Aaa 1,775 1,815,232
===========================================================================================
27,595,232
===========================================================================================
MAINE-0.29%
Maine (State of) Housing Authority; Mortgage
Purchase VRD Series 2003 E-1 RB
1.73%, 11/15/30(c)(f) A-1+ VMIG-1 8,585 8,585,000
===========================================================================================
</Table>
F-16
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MARYLAND-0.96%
Anne Arundel (County of); Unlimited Tax
Series 2002 GO
4.25%, 03/01/05 AA+ Aa1 $ 1,740 $ 1,762,823
- -------------------------------------------------------------------------------------------
Frederick (County of) Retirement Community
(Buckingham's Choice Inc. Project); VRD
Series 1997 C RB
(LOC-Branch Banking & Trust)
1.75%, 01/01/27(b)(c) A-1 -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Hyattsville (City of) (Safeway Inc.
Projects); Refunding VRD Series 1991 IDR
(LOC-Deutsche Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1 -- 740 740,000
- -------------------------------------------------------------------------------------------
Maryland (State of) Economic Development
Corp.
(YMCA of Central Maryland Inc. Project);
VRD Series 2003 RB
(LOC-Branch Banking & Trust)
1.72%, 04/01/28(b)(c) -- VMIG-1 3,800 3,800,000
- -------------------------------------------------------------------------------------------
Maryland (State of) Health & Higher
Educational Facilities Authority (Pooled
Loan Program); VRD Series 1994 D RB
(LOC-Bank of America N.A.) (Acquired
07/01/04; Cost $11,900,000)
1.70%, 01/01/29(b)(c)(d) A-1+ -- 11,900 11,900,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Maryland Health & Higher
Educational Facilities Authority);
VRD Floating Rate Trust Ctfs. Series
2003-829 RB
(Acquired 06/19/03; Cost $3,800,000)
1.73%, 08/15/38(c)(d)(e) -- VMIG-1 3,800 3,800,000
===========================================================================================
28,002,823
===========================================================================================
MASSACHUSETTS-0.99%
Billerica (City of); Limited Tax Series 2004
BAN GO
2.00%, 01/07/05 SP-1+ MIG-1 18,000 18,042,016
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Development Finance
Agency
(Briarwood Retirement); Series 2004 A RB
(LOC-Sovereign Bank, Comerica Bank)
1.68%, 01/01/35(b)(c) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Housing Finance
Agency;
Housing VRD Series 2003 F RB
1.70%, 12/01/37(c)(f) A-1+ VMIG-1 4,200 4,200,000
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Water Resources
Authority;
Series 1993 C RB
5.25%, 12/01/04(g)(l) NRR Aaa 1,460 1,499,158
===========================================================================================
28,741,174
===========================================================================================
MICHIGAN-3.41%
Dearborn (City of) Economic Development Corp.
(Henry Ford Village Inc. Project); VRD
Limited Tax Series 1998 IDR (LOC-Comerica
Bank)
1.74%, 10/01/23(b)(c)(o) -- -- 8,600 8,600,000
- -------------------------------------------------------------------------------------------
</Table>
F-17
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Eagle Tax Exempt Trust (City of Detroit
School District);
VRD Unlimited Tax Series 2002-6014 Class A
GO
(Acquired 11/06/02; Cost $7,105,000)
1.75%, 05/01/32(c)(d)(e) A-1+ -- $ 7,105 $ 7,105,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Detroit Sewage
Disposal System);
VRD Series 2001 A112 RB
(Acquired 10/31/01; Cost $4,910,000)
1.74%, 07/01/32(c)(d)(e) -- VMIG-1 4,910 4,910,000
- -------------------------------------------------------------------------------------------
VRD Series 2003 B41 RB
(Acquired 07/09/03; Cost $6,770,000)
1.74%, 07/01/26(c)(d)(e) -- VMIG-1 6,770 6,770,000
- -------------------------------------------------------------------------------------------
First Union MERLOTS (City of Detroit Water
Supply System);
VRD Series 1999 D RB (Acquired 01/21/00;
Cost $10,000,000)
1.74%, 07/01/29(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Michigan
Hospital Finance Authority); VRD Series
1997 X RB
(Acquired 12/12/03; Cost $15,000,000)
1.74%, 08/15/24(c)(d)(e) -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Kalamazoo (County of) Economic Development
Corp. (Heritage Community Project);
Refunding VRD Limited Tax Series 2004 RB
(LOC-Fifth Third Bank)
1.69%, 05/15/17(b)(c) A-1+ -- 5,405 5,405,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Higher Educational
Facilities Authority
(Hope College); Refunding VRD Limited Tax
Series 2004 RB
(LOC-JPMorgan Chase Bank)
1.73%, 04/01/34(b)(c) A-1 -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Hospital Finance
Authority
(Holland Community Hospital); VRD Series
2004 B RB
(LOC-JPMorgan Chase Bank)
1.73%, 01/01/34(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Municipal Bond Authority;
Series 2004 B-2 RN (LOC-JPMorgan Chase
Bank)
3.00%, 08/23/05(b) SP-1+ -- 15,000 15,188,557
- -------------------------------------------------------------------------------------------
Michigan (State of) Strategic Fund (Van Andel
Research Institute Project); VRD Limited
Tax Series 1997 RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 11/01/27(b)(c) A-1 -- 12,800 12,800,000
- -------------------------------------------------------------------------------------------
Oakland (County of) Economic Development
Corp. (Rochester College Project); VRD
Limited Obligation Series 2001 RB
(LOC-JPMorgan Chase Bank)
1.80%, 08/01/21(b)(c) -- VMIG-1 1,848 1,848,000
- -------------------------------------------------------------------------------------------
Southfield (City of) (Lawrence Tech
University Project);
Economic Development VRD Series 2001 RB
(LOC-JPMorgan Chase Bank)
1.70%, 10/01/31(b)(c) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-18
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Troy (City of) School District; Refunding
School Building & Site Unlimited Tax Series
2004 GO
3.00%, 05/01/05 AA+ Aa1 $ 1,805 $ 1,821,650
===========================================================================================
99,448,207
===========================================================================================
MINNESOTA-4.83%
Golden Valley (City of) (Unicare Homes Inc.
Project);
VRD Series 1984 IDR (LOC-ABN AMRO Bank
N.V.)
1.67%, 09/01/14(b)(c) A-1+ -- 4,400 4,400,000
- -------------------------------------------------------------------------------------------
J.P. Morgan PUTTERs (State of Minnesota
Public Facilities Authority); VRD Drinking
Water Series 2002-319 COP
(Acquired 07/31/03; Cost $14,030,000)
1.71%, 03/01/21(c)(d)(e) A-1 -- 14,030 14,030,000
- -------------------------------------------------------------------------------------------
Maple Grove (City of) (Heritage Christian
Academy);
Economic Development VRD Series 2004 RB
(LOC-U.S. Bank N.A.)
1.69%, 07/01/29(b)(c) A-1+ -- 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Minneapolis (City of) (Minnehaha Academy
Project);
VRD Series 2001 RB (LOC-U.S. Bank N.A.)
1.87%, 05/01/26(b)(m)(o) -- -- 2,500 2,500,000
- -------------------------------------------------------------------------------------------
Minneapolis-St. Paul (Cities of) Metropolitan
Council of Minnesota; Unlimited Tax Series
2002 D GO
5.00%, 02/01/05 AAA Aaa 1,190 1,205,464
- -------------------------------------------------------------------------------------------
Minnesota (State of); Refunding Unlimited Tax
Series 2003 GO
2.00%, 08/01/05 AAA Aa1 2,240 2,250,153
- -------------------------------------------------------------------------------------------
Rochester (City of) Health Care Facilities
(Mayo Foundation); Commercial Paper Notes,
Series 2000 A
1.15%, 10/12/04 A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Series 2000 B
1.15%, 11/09/04 A-1+ -- 20,500 20,500,000
- -------------------------------------------------------------------------------------------
Series 2000 C
1.40%, 10/14/04 A-1+ -- 33,500 33,500,000
- -------------------------------------------------------------------------------------------
Series 2001 A
1.13%, 10/12/04 -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Series 2001 B
1.13%, 10/12/04 -- VMIG-1 10,600 10,600,000
- -------------------------------------------------------------------------------------------
Series 2001 C
1.40%, 10/14/04 -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Adjustable Tender Series 1998 F
1.15%, 10/12/04 A-1+ -- 8,000 8,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-19
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MINNESOTA-(CONTINUED)
St. Paul (City of) Housing & Redevelopment
Authority
(Science Museum of Minnesota); VRD Series
1997 A RB
(LOC-U.S. Bank N.A.)
1.72%, 05/01/27(b)(c) -- VMIG-1 $16,260 $ 16,260,000
===========================================================================================
140,745,617
===========================================================================================
MISSISSIPPI-2.50%
ABN AMRO Munitops Ctfs. Trust (State of
Mississippi Development Board-Jackson Water
& Sewer); Multi-State Non-AMT
VRD Series 2002-22 Ctfs. (Acquired
09/10/03; Cost $9,995,000)
1.76%, 09/01/10(c)(d)(e) -- VMIG-1 9,995 9,995,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of
Mississippi);
VRD Unlimited Tax Series 2002-6018 Class A
COP
(Acquired 11/20/02; Cost $3,200,000)
1.75%, 11/01/22(c)(d)(e) A-1+ -- 3,200 3,200,000
- -------------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Jackson Medical Mall); VRD Series 2000 A
RB (LOC-JPMorgan Chase Bank)
1.70%, 11/01/18(b)(c) A-1 -- 5,300 5,300,000
- -------------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Mississippi College Project); VRD Series
2003 RB
(LOC-AmSouth Bank) (Acquired 07/17/03; Cost
$9,600,000)
1.84%, 07/01/23(b)(c)(d) -- VMIG-1 9,600 9,600,000
- -------------------------------------------------------------------------------------------
Perry (County of) (Leaf River Forest Products
Project); Refunding VRD Series 2002 PCR
(LOC-Citibank N.A.)
1.72%, 02/01/22(b)(c) A-1+ -- 36,500 36,500,000
- -------------------------------------------------------------------------------------------
University of Mississippi Educational
Building Corp.
(Campus Improvements Project); VRD Series
2000 RB
1.74%, 10/01/20(c)(f) -- VMIG-1 8,235 8,235,000
===========================================================================================
72,830,000
===========================================================================================
MISSOURI-0.96%
Missouri (State of) Development Finance Board
(Center of Creative Arts Project); Cultural
Facilities VRD Series 2004 RB
(LOC-National City Bank)
1.74%, 07/01/24(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority (Lutheran Church);
Educational Facilities VRD Series 2004 A RB
(LOC-Bank of America N.A.)
1.74%, 07/01/29(b)(m) -- VMIG-1 5,740 5,740,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority (Southwest Baptist
University Project); Educational Facilities
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.77%, 10/01/33(b)(m) A-1+ -- 5,950 5,950,000
- -------------------------------------------------------------------------------------------
</Table>
F-20
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MISSOURI-(CONTINUED)
Missouri (State of) Health & Educational
Facilities Authority (Washington University
Project); Educational Facilities VRD Series
1985 B RB
1.73%, 09/01/10(c) A-1+ VMIG-1 $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------------------
VRD Series 1996 C RB
1.70%, 09/01/30(m) A-1+ VMIG-1 1,300 1,300,000
- -------------------------------------------------------------------------------------------
VRD Series 1996 D RB
1.70%, 09/01/30(m) A-1+ VMIG-1 1,500 1,500,000
- -------------------------------------------------------------------------------------------
VRD Series 2000 C RB
1.70%, 03/01/40(m) A-1+ VMIG-1 4,300 4,300,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority
(Cox Health System); Refunding VRD Series
1997 RB
1.70%, 06/01/15(f)(m) A-1+ VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
St. Louis (County of) Industrial Development
Authority
(Friendship Village of South County); VRD
Series 2002 B IDR
(LOC-ABN AMRO Bank N.V.)
1.67%, 09/01/22(b)(c) A-1 -- 2,915 2,915,000
===========================================================================================
28,005,000
===========================================================================================
MONTANA-0.39%
Montana (State of) Facility Finance Authority
(Mission Ridge Project); VRD Series 2002 RB
(LOC-ABN AMRO Bank N.V.)
1.72%, 08/01/27(b)(c)(i) -- -- 11,365 11,365,000
===========================================================================================
NEBRASKA-1.51%
Nebhelp Inc.; Multi-Mode VRD
Series 1985 A RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 5,995 5,995,000
- -------------------------------------------------------------------------------------------
Series 1985 B RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 3,590 3,590,000
- -------------------------------------------------------------------------------------------
Series 1985 D RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 5,865 5,865,000
- -------------------------------------------------------------------------------------------
Series 1985 E RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 28,635 28,635,000
===========================================================================================
44,085,000
===========================================================================================
NEVADA-0.88%
ABN AMRO Munitops Ctfs. Trust (County of
Washoe); Refunding VRD Limited Tax Series
2001-24 Single Asset Trust Ctfs. (Acquired
06/21/01; Cost $5,500,000)
1.75%, 07/01/09(c)(d)(e) -- VMIG-1 5,500 5,500,000
- -------------------------------------------------------------------------------------------
Carson (City of) (Carson-Tahoe Hospital
Project);
Hospital VRD Series 2003 B RB (LOC-U.S.
Bank N.A.)
1.69%, 09/01/33(b)(c) A-1+ -- 18,000 18,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-21
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
NEVADA-(CONTINUED)
Clark (County of); Refunding Limited Tax
Series 1998 B GO
5.25%, 11/01/04 AA Aa2 $ 2,245 $ 2,252,753
===========================================================================================
25,752,753
===========================================================================================
NEW HAMPSHIRE-0.45%
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(New Hampshire Higher Educational & Health
Facilities Authority);
Refunding VRD
Series 2003-772 RB
(Acquired 01/22/03; Cost $5,475,000)
1.75%, 01/01/17(c)(d)(e) A-1 -- 5,475 5,475,000
- -------------------------------------------------------------------------------------------
Series 2003-866 RB
(Acquired 10/23/03; Cost $7,485,000)
1.75%, 08/15/21(c)(d)(e) A-1 -- 7,485 7,485,000
===========================================================================================
12,960,000
===========================================================================================
NEW MEXICO-0.05%
Albuquerque (City of) Educational Facilities
(Albuquerque Academy Project); VRD Series
2002 RB
1.73%, 10/15/16(c) AA VMIG-1 1,500 1,500,000
===========================================================================================
NEW YORK-0.34%
ABN AMRO Munitops Ctfs. Trust (Triborough
Bridge & Tunnel Authority); Non-AMT VRD
Series 2002-31 Ctfs.
(Acquired 03/24/04; Cost $10,000,000)
1.70%, 11/15/10(c)(d)(e) -- VMIG-1 10,000 10,000,000
===========================================================================================
NORTH CAROLINA-1.88%
Mecklenburg (County of); Public Improvement
Unlimited Tax Series 1998 B GO
4.40%, 02/01/05 AAA Aaa 13,000 13,130,922
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Barton College); Educational Facilities
VRD Series 2004 RB
(LOC-Branch Banking & Trust)
1.72%, 07/01/19(b)(c) -- VMIG-1 5,750 5,750,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Elon College); VRD Series 2001 A RB
(LOC-Bank of America N.A.)
1.68%, 01/01/14(b)(c)(i) -- -- 4,500 4,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Goodwill Community Foundation Project);
VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.70%, 04/01/22(b)(c)(i) -- -- 2,165 2,165,000
- -------------------------------------------------------------------------------------------
</Table>
F-22
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
NORTH CAROLINA-(CONTINUED)
North Carolina (State of) Capital Facilities
Finance Agency (Thompson Children's Home);
Educational Facilities VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.70%, 12/01/20(b)(c)(i) -- -- $ 3,070 $ 3,070,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency (University of North
Carolina at Pembroke University
Foundation); Student Housing VRD Series
2001 A RB
(LOC-Wachovia Bank N.A.)
1.82%, 07/01/31(b)(c) -- VMIG-1 11,240 11,240,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Wolfpack Club Project); VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.70%, 04/01/12(b)(c)(i) -- -- 9,500 9,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission; Refunding First Mortgage Health
Care Facilities VRD Series 2004 C RB
(LOC-SunTrust Bank)
1.72%, 11/01/27(b)(c) -- VMIG-1 3,500 3,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of); Public Improvement
Unlimited Tax Series 2002 A GO
5.00%, 03/01/05 AAA Aa1 1,865 1,892,943
===========================================================================================
54,748,865
===========================================================================================
OHIO-4.63%
Akron (City of) (Community Learning Centers);
Income Tax Revenue Series 2004 B RB
2.00%, 12/01/04(f) AAA Aaa 1,000 1,001,488
- -------------------------------------------------------------------------------------------
Akron (City of) Bath & Copley (Townships of)
Joint Township Hospital District (Summa
Health Systems); VRD Series 2004 B RB
(LOC-JPMorgan Chase Bank)
1.71%, 11/01/34(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Allen (County of); Refunding Limited Tax
Series 2002 GO
1.70%, 12/01/04(f) -- Aaa 1,000 1,001,075
- -------------------------------------------------------------------------------------------
Butler (County of) Health Care Facilities
(Lifesphere Project); Refunding &
Improvement VRD Series 2002 RB
(LOC-U.S. Bank N.A.)
1.70%, 05/01/27(b)(c) A-1+ -- 8,500 8,500,000
- -------------------------------------------------------------------------------------------
Cambridge (City of) Hospital Facilities
(Regional Medical Center Project);
Refunding & Improvement VRD Series 2001 RB
(LOC-National City Bank)
1.73%, 12/01/21(b)(c) -- VMIG-1 11,515 11,515,000
- -------------------------------------------------------------------------------------------
Centerville (City of) (Bethany Lutheran
Village Project);
Health Care VRD Series 1994 RB
(LOC-National City Bank)
1.73%, 11/01/13(b)(c) -- VMIG-1 2,985 2,985,000
- -------------------------------------------------------------------------------------------
</Table>
F-23
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OHIO-(CONTINUED)
Cincinnati (City of) & Hamilton (County of)
Port Authority (Kenwood Office Association
Project); Economic Development VRD Series
1985 RB (LOC-Fifth Third Bank)
1.77%, 09/01/25(b)(m) A-1+ -- $ 1,185 $ 1,185,000
- -------------------------------------------------------------------------------------------
Cleveland Heights (City of); Limited Tax
Series 2004 BAN GO
2.00%, 08/18/05(o) -- -- 3,234 3,245,177
- -------------------------------------------------------------------------------------------
Cuyahoga (County of) Continuing Care
Facilities; Refunding VRD Series 1999 RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 02/01/29(b)(c) A-1+ -- 15,985 15,985,000
- -------------------------------------------------------------------------------------------
Cuyahoga (County of) Health Care Facilities
(Judson Retirement Community); Refunding
VRD Series 2000 RB
(LOC-National City Bank)
1.72%, 11/15/19(b)(c) A-1 -- 800 800,000
- -------------------------------------------------------------------------------------------
Cuyahoga Falls (City of); Limited Tax Series
2003 Notes
2.00%, 12/16/04 -- MIG-1 7,000 7,009,153
- -------------------------------------------------------------------------------------------
Hamilton (County of) Economic Development
(St. Xavier High School Project); VRD
Series 2003 RB
(LOC-Fifth Third Bank)
1.51%, 04/01/28(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Lake (County of); Limited Tax Series 2004 BAN
GO
2.00%, 04/14/05(o) -- -- 3,000 3,013,944
- -------------------------------------------------------------------------------------------
Lakewood (City of) (St. Edward High School
Project);
Educational Facilities VRD Series 2000 RB
(LOC-Fifth Third Bank)
1.69%, 08/01/30(b)(c) -- VMIG-1 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Lorain (County of) (Elyria United Methodist
Village);
Refunding Hospital VRD Series 1996 B RB
(LOC-JPMorgan Chase Bank)
1.71%, 06/01/12(b)(c) A-1 VMIG-1 4,685 4,685,000
- -------------------------------------------------------------------------------------------
Lorain (County of) (EMH Regional Medical
Center Project);
Hospital Facilities VRD Series 2001 RB
(LOC-National City Bank)
1.76%, 05/01/26(b)(c)(o) -- -- 15,170 15,170,000
- -------------------------------------------------------------------------------------------
Lorain (County of) Independent Living
Facilities
(Elyria United Methodist Project); VRD
Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.71%, 06/01/25(b)(c) A-1+ -- 9,125 9,125,000
- -------------------------------------------------------------------------------------------
Mahoning (County of) Hospital Facilities
(Forum Health Obligation Group);
VRD Series 1997 B RB
1.70%, 12/01/28(c)(f) A-1+ VMIG-1 10,500 10,500,000
- -------------------------------------------------------------------------------------------
Series 2002 B RB (LOC-Fifth Third Bank)
1.73%, 12/01/27(b)(c) -- VMIG-1 7,200 7,200,000
- -------------------------------------------------------------------------------------------
</Table>
F-24
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OHIO-(CONTINUED)
Marion (County of) (Pooled Lease Program);
Hospital Improvement VRD Series 1990 RB
(LOC-JPMorgan Chase Bank)
1.72%, 08/01/20(b)(c) A-1 -- $ 4,535 $ 4,535,000
- -------------------------------------------------------------------------------------------
Middleburg Heights (City of) (Southwest
General Health);
Hospital Improvement Series 1997 RB
(LOC-Fifth Third Bank)
1.73%, 08/15/22(b)(c) A-1+ -- 5,405 5,405,000
- -------------------------------------------------------------------------------------------
Montgomery (County of) (St. Vincent DePaul
Society);
Limited Obligation VRD Series 1996 RB
(LOC-National City Bank)
1.73%, 12/01/10(b)(c) A-1 -- 1,900 1,900,000
- -------------------------------------------------------------------------------------------
Portage (County of) (Robinson Memorial
Hospital);
Hospital VRD Series 2002 RB (LOC-JPMorgan
Chase Bank)
1.73%, 05/01/17(b)(c) -- VMIG-1 6,255 6,255,000
- -------------------------------------------------------------------------------------------
Solon (City of); Unlimited Tax Series 2003
BAN GO
2.00%, 12/09/04(o) -- -- 2,800 2,804,536
- -------------------------------------------------------------------------------------------
Twinsburg (City of) School District;
Refunding Unlimited Tax Series 2004 GO
2.00%, 12/01/04(f) -- Aaa 1,800 1,802,977
===========================================================================================
134,923,350
===========================================================================================
OKLAHOMA-1.79%
Mustang (City of) Improvement Authority;
Refunding Series 1995 RB
5.38%, 12/01/04(g)(l) AAA Aaa 3,135 3,188,215
- -------------------------------------------------------------------------------------------
Oklahoma (County of) Finance Authority
(Oxford Oaks Apartments Projects);
Refunding Multi-Family Housing VRD Series
2000 RB
(CEP-Federal National Mortgage Association)
1.71%, 07/15/30(c) A-1+ -- 27,695 27,695,000
- -------------------------------------------------------------------------------------------
Oklahoma (State of) Development Finance
Authority
(Capitol Dome Project); VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.79%, 06/01/11(b)(c) A-1+ -- 3,785 3,785,000
- -------------------------------------------------------------------------------------------
Oklahoma (State of) Water Resource Board;
State Loan Program VRD Series 2003 A RB
0.98%, 10/01/04(g)(h) A-1+ -- 14,935 14,935,000
- -------------------------------------------------------------------------------------------
Tulsa (County of) Industrial Authority;
Capital Improvements Series 2003 B RB
4.00%, 05/15/05 AA -- 2,500 2,537,739
===========================================================================================
52,140,954
===========================================================================================
</Table>
F-25
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OREGON-1.15%
Oregon (State of) Health, Housing,
Educational & Cultural Facilities Authority
(Quatama Crossing LLC Housing Project);
VRD Series 1998 RB (LOC-U.S. Bank N.A.)
1.74%, 01/01/31(b)(c) -- Aa2 $ 7,430 $ 7,430,000
- -------------------------------------------------------------------------------------------
Oregon (State of); Unlimited Tax Series 2003
TAN GO
2.25%, 11/15/04 SP-1+ MIG-1 25,000 25,030,450
- -------------------------------------------------------------------------------------------
Salem (City of) Water & Sewer; Refunding
Series 2004 RB
3.00%, 05/01/05(f) AAA Aaa 1,175 1,184,588
===========================================================================================
33,645,038
===========================================================================================
PENNSYLVANIA-2.78%
ABN AMRO Munitops Ctfs. Trust (State of
Pennsylvania Public School Building
Authority); Non-AMT VRD
Series 2001-30 Ctfs. (Acquired 10/31/02;
Cost $5,000,000)
1.74%, 09/01/09(c)(d)(e) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Series 2003-24 Ctfs. (Acquired 03/08/04;
Cost $7,000,000)
1.74%, 06/01/11(c)(d)(e) -- VMIG-1 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Allegheny (County of) Hospital Development
Authority (ACES-Presbyterian University
Hospital); VRD Series 1988 B1 RB
(LOC-JPMorgan Chase Bank)
1.70%, 03/01/18(b)(c) -- VMIG-1 2,085 2,085,000
- -------------------------------------------------------------------------------------------
Allegheny (County of) Industrial Development
Authority
(Carnegie Museums of Pittsburgh); VRD
Series 2002 IDR
(LOC-Royal Bank of Scotland)
1.70%, 08/01/32(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Altoona (City of) Authority; Water Series
1994 A RB
6.50%, 11/01/04(g)(l) AAA NRR 1,700 1,741,627
- -------------------------------------------------------------------------------------------
Berks (County of) Industrial Development
Authority
(Lutheran Services); Health Care VRD Series
1998 A IDR
1.69%, 01/01/28(c)(f) -- VMIG-1 9,588 9,588,000
- -------------------------------------------------------------------------------------------
Chartiers Valley (Community of) Industrial &
Commercial Development Authority (Asbury
Villas Project);
VRD Series 2000 B IDR (LOC-ABN AMRO Bank
N.V.)
1.72%, 12/01/30(b)(c) A-1 -- 3,000 3,000,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Delaware Valley
Regional);
VRD Series 2001-3801 Class A COP
(Acquired 06/04/01; Cost $8,900,000)
1.75%, 08/01/28(c)(d)(e) A-1+ -- 8,900 8,900,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Scranton &
County of Lackawanna Health & Welfare
Authority); VRD Series 2002 A-18 RB
(Acquired 03/22/02; Cost $2,860,000)
1.74%, 03/01/15(c)(d)(e) -- VMIG-1 2,860 2,860,000
- -------------------------------------------------------------------------------------------
</Table>
F-26
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
PENNSYLVANIA-(CONTINUED)
Franklin (County of) Industrial Development
Authority (Chambersburg Hospital
Obligation);
Health Care VRD Series 2000 IDR
1.79%, 12/01/24(c)(f) A-1 Aaa $ 3,575 $ 3,575,000
- -------------------------------------------------------------------------------------------
Geisinger Authority Health System (Geisinger
Health System Foundation); Refunding VRD
Series 2000 RB
1.71%, 08/01/28(m) A-1+ VMIG-1 25,950 25,950,000
- -------------------------------------------------------------------------------------------
Lehigh (County of) Industrial Development
Authority
(Allegheny Electric Coop. Inc.);
VRD Series 1984 PCR (LOC-Rabobank
Nederland)
1.30%, 10/01/14(b)(j) A-1+ -- 7,180 7,180,000
- -------------------------------------------------------------------------------------------
Refunding VRD Series 1984 PCR (LOC-Rabobank
Nederland)
1.30%, 06/01/14(b)(j) A-1+ -- 1,030 1,030,000
- -------------------------------------------------------------------------------------------
Philadelphia (City of) Industrial Development
Authority
(Girard Estate Aramark Project); VRD Series
2002 IDR
(LOC-JP Morgan Chase Bank)
1.70%, 06/01/32(b)(c) A-1+ -- 1,000 1,000,000
===========================================================================================
80,909,627
===========================================================================================
SOUTH CAROLINA-2.07%
Cherokee (County of) (Newark Electronics
Division); Industrial VRD Series 1985 RB
(LOC-ABN AMRO Bank N.V.)
1.71%, 12/01/15(b)(c) A-1 -- 6,500 6,500,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of South
Carolina Public Service Authority); VRD
Series 2000-4001 Class A COP
(Acquired 09/08/00; Cost $10,100,000)
1.75%, 01/01/22(c)(d)(e) A-1+ -- 10,100 10,100,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of South Carolina
Public Service Authority); VRD Series 2000
L RB
(Acquired 02/25/00; Cost $11,590,000)
1.74%, 01/01/22(c)(d)(e) -- VMIG-1 11,590 11,590,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of South Carolina Transportation
Infrastructure Bank); Floating Rate Trust
Ctfs. VRD Series 2002-728 RB (Acquired
11/13/02; Cost $7,185,000)
1.73%, 10/01/22(c)(d)(e) -- VMIG-1 7,185 7,185,000
- -------------------------------------------------------------------------------------------
Oconee (County of) (Duke); Refunding VRD
Series 1993 PCR (LOC-JPMorgan Chase Bank)
1.70%, 02/01/17(b)(c) -- P-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Educational
Facilities Authority
for Non-Profit Institutions (The Allen
University Project);
VRD Series 1998 RB (LOC-Bank of America
N.A.)
(Acquired 03/27/01; Cost $2,525,000)
1.75%, 09/01/18(b)(c)(d) A-1+ -- 2,525 2,525,000
- -------------------------------------------------------------------------------------------
</Table>
F-27
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
SOUTH CAROLINA-(CONTINUED)
South Carolina (State of) Educational
Facilities Authority
for Non-Profit Institutions (Morris College
Project);
VRD Series 1997 RB (LOC-Bank of America
N.A.)
(Acquired 07/30/02; Cost $2,100,000)
1.75%, 07/01/17(b)(c)(d) A-1+ -- $ 2,100 $ 2,100,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Carolina Children's
Home Project); VRD Series 2003 RB
(LOC-Branch Banking & Trust)
1.72%, 03/01/23(b)(c) -- VMIG-1 3,335 3,335,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Carolina Piedmont
Foundation Project); VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.75%, 09/01/32(b)(c)(i) -- -- 4,000 4,000,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Catholic Diocese of
South Carolina Project); VRD Series 1998 RB
(LOC-Bank of America N.A.) (Acquired
07/23/02; Cost $2,555,000)
1.75%, 09/01/18(b)(c)(d) A-1+ -- 2,555 2,555,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Presbyterian Home of
South Carolina Project);
VRD Series 2003 A RB (LOC-Wachovia Bank
N.A.)
1.75%, 04/01/20(b)(c) A-1 -- 4,535 4,535,000
===========================================================================================
60,425,000
===========================================================================================
SOUTH DAKOTA-0.11%
South Dakota (State of) Health & Educational
Facilities Authority (University of Sioux
Falls); VRD Series 2001 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 10/01/16(b)(c) A-1+ -- 3,155 3,155,000
===========================================================================================
TENNESSEE-5.46%
Eagle Tax Exempt Trust (City of Chattanooga);
VRD Series 2000-4202 Class A COP (Acquired
10/10/00; Cost $14,040,000)
1.75%, 10/01/27(c)(d)(e) A-1+ -- 14,040 14,040,000
- -------------------------------------------------------------------------------------------
Jackson (City of) Energy Authority; Electric
Systems VRD Series 2003 B RB
1.70%, 11/01/26(c)(f) -- VMIG-1 12,700 12,700,000
- -------------------------------------------------------------------------------------------
Jackson (City of) Health & Educational
Facilities Board (Trinity Christian
Academy); Educational Facilities VRD Series
2002 RB
(LOC-AmSouth Bank)
1.84%, 03/01/22(b)(c) -- VMIG-1 5,400 5,400,000
- -------------------------------------------------------------------------------------------
Knox (County of) Health Educational & Housing
Facility Board (Volunteer Student Housing
LLC Project); Student Housing VRD Series
2002 RB (LOC-Wachovia Bank N.A.)
1.69%, 09/01/34(b)(c) -- VMIG-1 27,020 27,020,000
- -------------------------------------------------------------------------------------------
</Table>
F-28
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TENNESSEE-(CONTINUED)
Memphis (City of); Electric System Sub-Series
2003 A RB
2.00%, 12/01/04 AA- Aa3 $10,000 $ 10,014,023
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(City of Nashville & County of Davidson);
Unlimited Tax Series 2003-871 GO
(Acquired 11/17/03; Cost $4,995,000)
1.73%, 10/15/10(c)(d)(e) -- VMIG-1 4,995 4,995,000
- -------------------------------------------------------------------------------------------
Sevier (County of) Public Building Authority
(Local Government Public Improvement);
VRD Series 1995 A RB
1.72%, 06/01/15(c)(f) AAA VMIG-1 5,230 5,230,000
- -------------------------------------------------------------------------------------------
VRD Series 1995 B-2 RB
1.72%, 06/01/06(c)(f) AAA VMIG-1 1,200 1,200,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 I A-1 RB
1.72%, 06/01/22(c)(f) -- VMIG-1 5,900 5,900,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-1 RB
1.72%, 06/01/21(c)(f) -- VMIG-1 2,100 2,100,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-3 RB
1.72%, 06/01/10(c)(f) -- VMIG-1 1,485 1,485,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-5 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 1,320 1,320,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II F-1 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 1,190 1,190,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II F-5 RB
1.72%, 06/01/27(c)(f) -- VMIG-1 2,265 2,265,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-1 RB
1.72%, 06/01/07(c)(f) -- VMIG-1 14,950 14,950,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-3 RB
1.72%, 06/01/19(c)(f) -- VMIG-1 1,425 1,425,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-4 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 300 300,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III B-2 RB
1.72%, 06/01/19(c)(f) -- VMIG-1 5,650 5,650,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III C-3 RB
1.72%, 06/01/18(c)(f) -- VMIG-1 3,475 3,475,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III C-4 RB
1.72%, 06/01/20(c)(f) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
VRD Series 1999 II A-1 RB
1.72%, 06/01/24(c)(f) -- VMIG-1 6,300 6,300,000
- -------------------------------------------------------------------------------------------
VRD Series 1999 II B-1 RB
1.72%, 06/01/25(c)(f) -- VMIG-1 1,700 1,700,000
- -------------------------------------------------------------------------------------------
</Table>
F-29
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TENNESSEE-(CONTINUED)
Shelby (County of) Health, Educational &
Housing Facilities Board (Briarcrest
Christian School System); Educational
Facilities VRD Series 2002 RB (LOC-SunTrust
Bank)
1.69%, 04/01/22(b)(c) -- VMIG-1 $11,050 $ 11,050,000
- -------------------------------------------------------------------------------------------
Shelby (County of) Health, Educational &
Housing Facilities Board (St. Benedict
Auburndale School); VRD Series 2003 RB
(LOC-AmSouth Bank)
1.74%, 05/01/33(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Tennessee (State of) Local Development
Authority (Community Provider Pooled Loan
Program); Series 1994 RB
6.45%, 10/01/04(g)(l) NRR -- 1,000 1,020,000
- -------------------------------------------------------------------------------------------
Washington (County of) (Capital Outlay
Notes);
Refunding Unlimited Tax Series 2002 GO
4.00%, 02/01/05(f) -- Aaa 1,000 1,009,664
- -------------------------------------------------------------------------------------------
Williamson (County of) Industrial Development
Board (Currey Ingram Academy); Educational
Facilities VRD Series 2003 RB
(LOC-SunTrust Bank)
1.75%, 04/01/23(b)(c) -- VMIG-1 2,500 2,500,000
===========================================================================================
159,238,687
===========================================================================================
TEXAS-11.84%
ABN AMRO Munitops Ctfs. Trust (City of
Leander Independent School District);
Unlimited Multi-State Non-AMT VRD Series
2002-16 Ctfs. (Acquired 08/20/03; Cost
$5,395,000)
1.75%, 08/15/10(c)(d)(e) -- VMIG-1 5,395 5,395,000
- -------------------------------------------------------------------------------------------
Alief (City of) Independent School District;
Unlimited Tax Series 1997 GO (CEP-Texas
Permanent School Fund)
6.60%, 02/15/05 AAA Aaa 1,000 1,020,512
- -------------------------------------------------------------------------------------------
Amarillo (City of) Health Facilities Corp.
(Panhandle Pooled Health Care); VRD Series
1985 ACES RB (LOC-BNP Paribas)
1.75%, 05/31/25(b)(c) -- VMIG-1 4,862 4,862,000
- -------------------------------------------------------------------------------------------
Austin (City of) Water & Wastewater System;
Refunding Series 2002 A RB
5.00%, 11/15/04(f) AAA Aaa 4,000 4,019,072
- -------------------------------------------------------------------------------------------
Austin (City of); Refunding Utility System
Series 1995 RB
5.60%, 05/15/05(g)(l) AAA Aaa 5,000 5,128,791
- -------------------------------------------------------------------------------------------
Austin (City of); Utility System Series 1994
RB
5.75%, 11/15/04(g)(i) AAA Aaa 2,605 2,619,767
- -------------------------------------------------------------------------------------------
Bexar (County of) Health Facilities
Development Corp.
(Air Force Village); VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.69%, 08/15/30(b)(c) A-1+ -- 19,500 19,500,000
- -------------------------------------------------------------------------------------------
</Table>
F-30
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Bexar (County of) Health Facilities
Development Corp.
(Warm Springs); Healthcare System VRD
Series 1997 RB
(LOC-JPMorgan Chase Bank)
1.74%, 09/01/27(b)(c) -- VMIG-1 $ 3,435 $ 3,435,000
- -------------------------------------------------------------------------------------------
Brownsville (City of) Utility Systems;
Refunding Sub. Lien VRD Series 2001 A RB
0.95%, 11/04/04(f)(g)(k) A-1+ VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Dallas (City of) Waterworks & Sewer System;
Refunding Series 2002 A RB
4.00%, 10/01/04 AA+ Aa2 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Dallas (City of); Limited Tax Series 2003 GO
3.50%, 02/15/05 AA+ Aa1 1,500 1,513,855
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Houston
Airport);
VRD Series 2000-4307 COP (Acquired
11/15/00; Cost $15,750,000)
1.75%, 07/01/28(c)(d)(e) A-1+ -- 15,750 15,750,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Houston Water
& Sewer);
VRD Series 1997-4305 Class A COP (Acquired
04/27/99; Cost $14,005,000)
1.75%, 12/01/27(c)(d)(e) A-1+ -- 14,005 14,005,000
- -------------------------------------------------------------------------------------------
VRD Series 2002-6019 Class A COP (Acquired
11/13/02; Cost $8,910,000)
1.75%, 12/01/30(c)(d)(e) A-1+ -- 8,910 8,910,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Harris County Toll
Road);
VRD Series 2001-4305 COP
(Acquired 05/08/01; Cost $7,390,000)
1.75%, 08/01/14(c)(d)(e) A-1+ -- 7,390 7,390,000
- -------------------------------------------------------------------------------------------
VRD Series 2002-6012 Class A COP
(Acquired 11/20/02; Cost $1,580,000)
1.75%, 08/15/30(c)(d)(e) A-1+ -- 1,580 1,580,000
- -------------------------------------------------------------------------------------------
El Paso (County of); Refunding Limited Tax
Series 2002 A GO
3.25%, 02/15/05(f) AAA Aaa 1,040 1,048,302
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Harris County Toll
Road);
VRD Series 2003 B16 RB (Acquired 02/19/03;
Cost $3,015,000)
1.57%, 08/15/25(c)(d)(e) -- VMIG-1 3,015 3,015,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Jefferson County Health
Facilities Development Corp.); VRD Series
2001 A83 RB
(Acquired 11/18/03; Cost $3,570,000)
1.20%, 11/16/04(d)(e)(g)(k)(n) A-1 -- 3,570 3,570,000
- -------------------------------------------------------------------------------------------
Fort Worth (City of); Limited Tax Series 2000
GO Ctfs.
6.25%, 03/01/05(g)(l) NRR NRR 5,000 5,105,817
- -------------------------------------------------------------------------------------------
Garland (City of) Industrial Development
Authority Inc. (Carroll Co. Project); VRD
Series 1984 IDR (LOC-Wells Fargo Bank N.A.)
(Acquired 09/03/03; Cost $2,300,000)
1.74%, 12/01/14(b)(c)(d) -- Aaa 2,300 2,300,000
- -------------------------------------------------------------------------------------------
</Table>
F-31
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Goose Creek (City of) Consolidated
Independent School District; Refunding
Unlimited Tax Series 2002 A GO
(CEP-Texas Permanent School Fund)
4.00%, 02/15/05 AAA Aaa $ 1,520 $ 1,536,322
- -------------------------------------------------------------------------------------------
Grand Prairie (City of) Housing Finance Corp.
(Lincoln Property Co.); Refunding
Multi-Family Housing VRD Series 1993 RB
(CEP-General Electric Corp.)
1.77%, 06/01/10(c) A-1+ -- 2,700 2,700,000
- -------------------------------------------------------------------------------------------
Grapevine (City of) Industrial Development
Corp.
(Southern Air Transport); Refunding Airport
Series 1993 RB
(LOC-JPMorgan Chase Bank)
1.77%, 03/01/10(b)(c) A-1+ -- 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Harris (County of) Cultural Education
Facilities Finance Corp. (Houston Music
Hall Foundation); VRD Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.74%, 06/01/29(b)(c) A-1+ -- 700 700,000
- -------------------------------------------------------------------------------------------
Harris (County of) Hospital District; Sub.
Lien Commercial Paper Series A RN (LOC-Bank
of America N.A.)
1.28%, 11/22/04(b) A-1+ -- 9,451 9,451,000
- -------------------------------------------------------------------------------------------
Harris (County of) Houston Texas Sports
Authority (Rodeo);
Jr. Lein VRD Series 2001 C RB
1.77%, 11/15/30(c)(f) A-1+ VMIG-1 6,400 6,400,000
- -------------------------------------------------------------------------------------------
Harris (County of); Permanent Improvement
Unlimited Tax Series 2003 GO
3.00%, 10/01/04 AA+ Aa1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Harris (County of); Refunding Unlimited Tax
Series 2001 GO
5.00%, 10/01/04 AA+ Aa1 4,970 4,970,000
- -------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corp. (AMOCO Project);
VRD Series 1985 PCR
1.15%, 11/01/04(g)(h) A-1+ P-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corp.
(AMOCO Project-Standard Oil Co.); VRD
Series 1983 PCR
1.40%, 03/01/05(g)(h) A-1+ Aa1 12,775 12,775,000
- -------------------------------------------------------------------------------------------
Houston (City of) Independent School District
(Schoolhouse);
Limited Tax Series 2004 GO
(CEP-Texas Permanent School Fund)
1.62%, 06/09/05(g)(k) A-1+ VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Houston (City of); Commercial Paper Notes
Series 2003 A GO
1.30%, 10/21/04 A-1+ P-1 20,000 20,000,000
- -------------------------------------------------------------------------------------------
1.37%, 11/15/04 A-1+ P-1 24,000 24,000,000
- -------------------------------------------------------------------------------------------
1.38%, 01/25/05 A-1+ P-1 13,400 13,400,000
- -------------------------------------------------------------------------------------------
Mansfield (City of); Refunding Unlimited Tax
VRD Series 2004 GO
2.00%, 02/15/05(f) AAA Aaa 855 857,910
- -------------------------------------------------------------------------------------------
</Table>
F-32
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Merrill Lynch P-Floats (City of Brazosport
Independent School District); Refunding
Unlimited Tax VRD Series 2003 PT-1690 GO
(Acquired 02/20/03; Cost $4,920,000)
1.73%, 08/15/10(c)(d)(e) -- VMIG-1 $ 4,920 $ 4,920,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (County of Harris
Hospital District);
VRD Series 2002 PT-665 RB (Acquired
10/02/02; Cost $5,935,000)
1.73%, 08/15/08(c)(d)(e) A-1+ -- 5,935 5,935,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Texas Affordable Housing Corp.);
Floating Rate Trust Ctfs. VRD Series
2003-780 RB
(Acquired 02/19/03; Cost $1,995,000)
1.73%, 09/01/22(c)(d)(e) -- VMIG-1 1,995 1,995,000
- -------------------------------------------------------------------------------------------
Northside Independent School District;
Refunding VRD Unlimited Tax Series 2003 B
GO (CEP-Texas Permanent School Fund)
1.75%, 08/01/05(g)(k) A-1+ VMIG-1 1,870 1,870,000
- -------------------------------------------------------------------------------------------
Pine Tree Independent School District;
Unlimited Tax Series 1994 GO (CEP-Texas
Permanent School Fund)
5.25%, 02/15/05(g)(k) NRR Aaa 910 923,135
- -------------------------------------------------------------------------------------------
San Antonio (City of) Water & Sewer System;
Commercial Paper Notes Series 2001 A GO
1.15%, 10/21/04 A-1+ P-1 29,900 29,900,000
- -------------------------------------------------------------------------------------------
Sherman (City of) Higher Education Finance
Corp. (Austin College Project); Higher
Education VRD Series 1997 RB
(LOC-Bank of America N.A.)
1.75%, 01/01/18(b)(c) A-1+ -- 12,800 12,800,000
- -------------------------------------------------------------------------------------------
Spring (City of) Independent School District;
Unlimited Tax Series 2004 GO (CEP-Texas
Permanent School Fund)
2.50%, 02/15/05 AAA Aaa 2,195 2,206,356
- -------------------------------------------------------------------------------------------
Texas (State of); Series 2004 TRAN
3.00%, 08/31/05 SP-1+ MIG-1 30,000 30,378,015
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (Southeast Texas Housing
Finance Corp.);
VRD Series 2001 A18 RB (Acquired 11/18/03;
Cost $4,130,000)
1.20%, 11/16/04(d)(e)(g)(k)(n) A-1 -- 4,130 4,130,000
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (University of Texas);
Refunding VRD Series 2003 B14 RB (Acquired
01/29/03; Cost $8,005,000)
1.72%, 08/15/22(c)(d)(e) -- VMIG-1 8,005 8,005,000
===========================================================================================
345,120,854
===========================================================================================
UTAH-1.47%
Davis (County of) Housing Authority (Fox
Creek Apartments); Refunding Multi-Family
Housing VRD Series 1997 A RB
(LOC-JPMorgan Chase Bank)
1.71%, 08/15/27(b)(c) A-1 -- 4,240 4,240,000
- -------------------------------------------------------------------------------------------
Davis (County of); Unlimited Tax Series 2004
TRAN
2.25%, 12/30/04 -- MIG-1 4,000 4,009,763
- -------------------------------------------------------------------------------------------
</Table>
F-33
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
UTAH-(CONTINUED)
First Union MERLOTs (Intermountain Power
Agency);
Power Supply VRD Series 2002 A59 RB
(Acquired 10/23/02; Cost $7,040,000)
1.74%, 07/01/10(c)(d)(e) -- VMIG-1 $ 7,040 $ 7,040,000
- -------------------------------------------------------------------------------------------
Intermountain Power Agency; Power Supply VRD
Series 1985 E RB
1.24%, 12/01/04(f)(g)(k) A-1+ VMIG-1 14,770 14,770,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (City of Murray
Hospital); VRD Series 2002 PA-1066 RB
(Acquired 10/02/02; Cost $5,995,000)
1.73%, 05/15/22(c)(d)(e) A-1 -- 5,995 5,995,000
- -------------------------------------------------------------------------------------------
Salt Lake (City of) (Gateway Project);
Special Assessment VRD Series 2003
(LOC-Citibank N.A.)
1.70%, 12/01/23(b)(c) A-1+ -- 5,850 5,850,000
- -------------------------------------------------------------------------------------------
Sanpete (County of) School Facilities
(Wasatch Academy);
VRD Series 2003 RB (LOC-U.S. Bank N.A.)
1.76%, 08/01/28(b)(c) A-1+ -- 900 900,000
===========================================================================================
42,804,763
===========================================================================================
VERMONT-0.22%
Vermont (State of) Student Assistance Corp.;
Student Loan VRD Series 1985 RB (LOC-State
Street Bank & Trust Co.)
1.35%, 01/01/08(b)(j) -- VMIG-1 2,640 2,640,000
- -------------------------------------------------------------------------------------------
Vermont (State of); Unlimited Tax Series 1994
A GO
6.40%, 01/15/05(g)(l) NRR NRR 3,510 3,632,758
===========================================================================================
6,272,758
===========================================================================================
VIRGINIA-0.82%
Chesapeake (City of) Hospital Authority
(Chesapeake General Hospital); Hospital
Facility VRD Series 2001 B RB
(LOC-SunTrust Bank)
1.69%, 07/01/31(b)(c) A-1+ -- 1,545 1,545,000
- -------------------------------------------------------------------------------------------
Henrico (County of) Economic Development
Authority
(Westminster Centerbury); Residential Care
Facilities
VRD Series 2003 B RB (LOC-KBC Bank N.V.)
1.69%, 07/01/08(b)(c) -- VMIG-1 17,100 17,100,000
- -------------------------------------------------------------------------------------------
Richmond (City of) Industrial Development
Authority;
Educational Facilities VRD Series 2002 RB
(LOC-SunTrust Bank)
1.70%, 05/01/32(b)(c) -- VMIG-1 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Rockingham (County of) Industrial Development
Authority (Sunnyside Presbyterian Home);
Residential Care Facilities VRD Series 2003
RB (LOC-Branch Banking & Trust)
1.72%, 12/01/33(b)(c) A-1 -- 750 750,000
- -------------------------------------------------------------------------------------------
</Table>
F-34
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
VIRGINIA-(CONTINUED)
Winchester (City of) Industrial Development
Authority (Shenandoah University);
Educational Facilities First Mortgage
Series 1994 IDR
6.70%, 10/01/04(g)(l) NRR NRR $ 1,620 $ 1,652,400
===========================================================================================
23,947,400
===========================================================================================
WASHINGTON-5.39%
ABN AMRO Munitops Ctfs. Trust (City of
Seattle Municipal Light & Power);
Multi-State Non-AMT VRD Series 2002-12
Ctfs. (Acquired 05/25/04; Cost $9,755,000)
1.75%, 03/01/09(c)(d)(e) -- VMIG-1 9,755 9,755,000
- -------------------------------------------------------------------------------------------
ABN AMRO Munitops Ctfs. Trust (City of
Seattle);
Multi-State Non-AMT VRD Limited Tax Series
2003-7 GO Ctfs.
(Acquired 05/13/03; Cost $10,685,000)
1.34%, 11/17/04(d)(e)(g)(i)(k)(n) -- -- 10,685 10,685,000
- -------------------------------------------------------------------------------------------
ABN AMRO Munitops Ctfs. Trust (King County);
Multi-State Non-AMT VRD Limited Tax Series
2001-1 GO Ctfs.
(Acquired 01/04/01; Cost $10,000,000)
1.75%, 07/01/06(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Bremerton (City of) (Kitsap Regional
Conference Center);
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.75%, 12/01/28(b)(c)(i) -- -- 2,565 2,565,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Washington
Public Power Supply Systems Project No. 2);
VRD Series 96-4703 Class A COP (Acquired
05/02/01; Cost $5,870,000)
1.75%, 07/01/11(c)(d)(e) A-1+ -- 5,870 5,870,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Washington);
VRD Series 98-4701 Class A COP (Acquired
07/20/00; Cost $14,400,000)
1.75%, 05/01/18(c)(d)(e) A-1+ -- 14,400 14,400,000
- -------------------------------------------------------------------------------------------
Everett (City of) Public Facilities District;
Commercial Paper TRAN (LOC-Bank of America
N.A.)
1.00%, 10/26/04(b) A-1+ -- 4,300 4,300,000
- -------------------------------------------------------------------------------------------
Everett (City of) Public Facilities District;
Commercial Paper Notes (LOC-Bank of America
N.A.)
1.00%, 10/26/04(b) A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Everett (City of); VRD Limited Tax Series
2001 GO
(LOC-Bank of America N.A.)
1.75%, 12/01/21(b)(c)(i) -- -- 2,600 2,600,000
- -------------------------------------------------------------------------------------------
Issaquah (City of) Community Properties; VRD
Special Revenue Series 2001 A RB (LOC-Bank
of America N.A.)
1.73%, 02/15/21(b)(c) -- VMIG-1 10,150 10,150,000
- -------------------------------------------------------------------------------------------
King & Snohomish (Counties of) School
District No. 417 (Northshore); Unlimited
Tax Series 2003 GO
2.00%, 12/01/04(f) AAA Aaa 3,300 3,304,792
- -------------------------------------------------------------------------------------------
</Table>
F-35
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
King (County of) Economic Enterprise Corp.
(Puget Sound Blood Center Project);
VRD Series 1998 RB (LOC-U.S. Bank N.A.)
1.74%, 04/01/23(b)(c) -- VMIG-1 $ 3,810 $ 3,810,000
- -------------------------------------------------------------------------------------------
Lake Tapps Parkway Properties; Special
Revenue VRD
(LOC-U.S. Bank N.A.)
Series 1999 A RB
1.73%, 12/01/19(b)(c) -- VMIG-1 11,800 11,800,000
- -------------------------------------------------------------------------------------------
Series 1999 B RB
1.73%, 12/01/19(b)(c) -- VMIG-1 700 700,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(Port of Seattle);
VRD Series 2002-739D RB (Acquired 07/21/04;
Cost $5,000,000)
1.73%, 09/01/20(c)(d)(e) A-1 -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Pierce (County of) Economic Development Corp.
(Weyerhaeuser Real Estate); Special Revenue
VRD Series 1997 RB
(LOC-Bank of America N.A.)
1.73%, 01/01/27(b)(c) A-1+ VMIG-1 12,705 12,705,000
- -------------------------------------------------------------------------------------------
Seattle (Port of) Industrial Development
Corp. (Sysco Food Services Project);
Refunding VRD Series 1994 IDR
1.72%, 11/01/25(c) A-1+ VMIG-1 8,000 8,000,000
- -------------------------------------------------------------------------------------------
Seattle (City of) Housing Authority (Bayview
Manor Project);
Low Income Housing Assistance VRD Series
1994 B RB
(LOC-U.S. Bank N.A.)
1.74%, 05/01/19(b)(c) A-1+ -- 2,340 2,340,000
- -------------------------------------------------------------------------------------------
Seattle (City of) Housing Authority (Pioneer
Human Services Project); Refunding VRD
Series 1995 RB (LOC-U.S. Bank N.A.)
1.74%, 12/01/15(b)(c) A-1+ -- 1,975 1,975,000
- -------------------------------------------------------------------------------------------
Snohomish (County of) Housing Authority (Ebey
Arms Centerhouse Project); Refunding
Housing VRD Series 2003 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/34(b)(c)(i) -- -- 6,245 6,245,000
- -------------------------------------------------------------------------------------------
Vancouver (City of) Housing Authority
(Village Park Apartments Project); Housing
VRD Series 2000 RB (LOC-U.S. Bank N.A.)
1.73%, 11/02/05(b)(c) A-1+ -- 1,430 1,430,000
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (Central Puget Sound
Regional Transit Authority); Sales Tax &
Motor VRD Series 2001 A46 RB
(Acquired 11/12/03; Cost $6,275,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 6,275 6,275,000
- -------------------------------------------------------------------------------------------
Washington (State of) Economic Development
Finance Authority (Seadrunar Recycling LLC
Project); Economic Development VRD Series
2000 E RB (LOC-U.S. Bank N.A.)
1.74%, 08/01/25(b)(c) A-1+ -- 2,735 2,735,000
- -------------------------------------------------------------------------------------------
Washington (State of) Health Care Facilities
Authority
(Empire Health Services); VRD Series 2003
RB
(LOC-U.S. Bank N.A.)
1.65%, 11/01/23(b)(c) A-1+ -- 2,335 2,335,000
- -------------------------------------------------------------------------------------------
</Table>
F-36
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
Washington (State of) Higher Education
Facilities Authority
(Cornish College Arts Project); VRD Series
2003 A RB
(LOC-Bank of America N.A.)
1.73%, 12/01/33(b)(c) -- VMIG-1 $ 5,000 $ 5,000,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (Nikkei Concerns Project);
Non-Profit Housing VRD Series 1994 RB
(LOC-U.S. Bank N.A.)
1.74%, 10/01/19(b)(c) A-1+ -- 3,755 3,755,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (Tacoma Art Museum Project);
Non-Profit VRD Series 2002 RB
(LOC-Northern Trust Co.)
1.77%, 06/01/32(b)(m) -- VMIG-1 1,225 1,225,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (University Preparatory Academy
Project); Non-Profit VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.75%, 07/01/30(b)(c) -- VMIG-1 1,250 1,250,000
===========================================================================================
157,209,792
===========================================================================================
WEST VIRGINIA-0.35%
Monongalia (County of) Building Community
Hospital (Monongalia General Hospital);
Refunding VRD Series 2002 A RB
(LOC-JPMorgan Chase Bank)
1.72%, 07/01/17(b)(c) A-1 VMIG-1 645 645,000
- -------------------------------------------------------------------------------------------
West Virginia (State of) Hospital Finance
Authority (Cabell Huntington); Refunding
VRD Series 2002 A-1 RB
(LOC-JPMorgan Chase Bank)
1.67%, 06/01/13(b)(c) -- VMIG-1 9,495 9,495,000
===========================================================================================
10,140,000
===========================================================================================
WISCONSIN-3.44%
Kimberly (City of) (Fox Cities YMCA Project);
VRD Series 2002 RB
(LOC-M&I Marshall & Ilsley Bank)
1.75%, 04/01/32(b)(c) -- VMIG-1 2,540 2,540,000
- -------------------------------------------------------------------------------------------
Menomonee Falls (City of); Refunding Sewer
System Series 2004 RB
2.00%, 05/01/05(f) -- Aaa 1,425 1,429,517
- -------------------------------------------------------------------------------------------
Waukesha (County of); Promissory Notes
Unlimited Tax Series 2004 GO
2.00%, 04/01/05 -- Aaa 1,500 1,507,192
- -------------------------------------------------------------------------------------------
Wind Point (City of) (Johnson Foundation
Project);
VRD Series 2000 RB (LOC-Bank of Montreal)
1.80%, 09/01/35(b)(c) A-1+ -- 4,665 4,665,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Beaver Dam Community
Hospitals Inc.); VRD Series 2004 B RB
(LOC-U.S. Bank N.A.)
1.69%, 08/15/34(b)(c) A-1+ -- 3,000 3,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-37
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WISCONSIN-(CONTINUED)
Wisconsin (State of) Health & Educational
Facilities Authority (Mequon Jewish
Project); VRD Series 2003 RB
(LOC-JPMorgan Chase Bank)
1.73%, 07/01/28(b)(c) -- VMIG-1 $ 2,150 $ 2,150,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(Mercy Health System); (LOC-M&I Marshall &
Ilsley Bank)
Pooled Loan VRD Series 2003 I RB
1.70%, 06/01/23(b)(c) -- VMIG-1 9,570 9,570,000
- -------------------------------------------------------------------------------------------
VRD Series 2003 C RB
1.72%, 08/15/23(b)(c) -- VMIG-1 7,300 7,300,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. John's Home); Pooled Loan VRD Series
2003 J RB
(LOC-M&I Marshall & Ilsley Bank)
1.70%, 07/01/23(b)(c) -- VMIG-1 4,250 4,250,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. Luke's Medical Center); VRD Series
1987 RB
(LOC-KBC Bank N.V.) (Acquired 06/01/04;
Cost $30,000,000)
1.70%, 12/01/17(b)(c)(d) A-1 -- 30,000 30,000,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. Mary's School); VRD Series 2004 RB
(LOC-M&I Marshall & Ilsley Bank)
1.72%, 08/01/19(b)(c) A-1 -- 2,695 2,695,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(Sinai Samaritan Medical Center Inc.); VRD
Series 1994 A RB
(LOC-M&I Marshall & Ilsley Bank)
1.75%, 09/01/19(b)(c) A-1 -- 5,649 5,649,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Wheaton Franciscan
Services); VRD Series 2003 B RB
(LOC-U.S. Bank N.A.)
1.69%, 08/15/33(b)(c) A-1+ VMIG-1 8,750 8,750,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) School Districts Cash
Flow Management Program;
Series 2003 B-1 COP
2.00%, 11/01/04 -- MIG-1 5,565 5,568,956
- -------------------------------------------------------------------------------------------
Series 2004 A-1 COP
3.00%, 09/20/05(o) -- -- 8,000 8,100,676
- -------------------------------------------------------------------------------------------
Wisconsin (State of); Unlimited Tax Series
1995 A GO
6.10%, 05/01/05(g)(l) NRR Aaa 3,000 3,087,881
===========================================================================================
100,263,222
===========================================================================================
Total Municipal Obligations (Cost
$2,926,404,421) 2,926,404,421
===========================================================================================
TOTAL INVESTMENTS-100.40% (Cost
$2,926,404,421)(p) 2,926,404,421
===========================================================================================
OTHER ASSETS LESS LIABILITIES-(0.40%) (11,669,927)
===========================================================================================
NET ASSETS-100.00% $2,914,734,494
___________________________________________________________________________________________
===========================================================================================
</Table>
F-38
Investment Abbreviations:
<Table>
ACES - Automatically Convertible Extendable Security
AMT - Alternative Minimum Tax
BAN - Bond Anticipation Notes
CEP - Credit Enhancement Provider
COP - Certificate of Participation
Ctfs - Certificates
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
Jr. - Junior
LOC - Letter of Credit
MERLOT - Municipal Exempt Receipts Liquidity Optional Tender
NRR - Not Re-Rated
P-Floats - Puttable Floating Option Tax-Exempt Receipts
PCR - Pollution Control Revenue Bonds
PUTTERS - Putable Tax Exempt Receipts
RAN - Revenue Anticipation Notes
RB - Revenue Bonds
RN - Revenue Notes
Sub. - Subordinated
TAN - Tax Anticipation Notes
TRAN - Tax and Revenue Anticipation Notes
VRD - Variable Rate Demand
Wts. - Warrants
</Table>
Notes to Schedule of Investments:
(a) Ratings assigned by Standard & Poor's Corporation ("S&P") and Moody's
Investors Service, Inc. ("Moody's"), except as indicated in note (i) and (o)
below. NRR indicates a security that is not re-rated subsequent to funding
of an escrow fund (consisting of U.S. Treasury obligations held by a bank
custodian); this funding is pursuant to an advance refunding of this
security.
(b) Principal and interest payments are fully enhanced by a letter of credit
from the bank listed or a predecessor bank, branch or subsidiary.
(c) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined weekly. Rate
shown is the rate in effect on September 30, 2004.
(d) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at September 30, 2004 was
$691,199,000, which represented 23.71% of the Fund's net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(e) Synthetic municipal instruments; involves the deposit into a trust of one or
more long-term tax-exempt bonds or notes ("Underlying Bonds"), a sale of
certificates evidencing interests in the trust to investors such as the
Fund. The trustee receives the long-term fixed interest payments on the
Underlying Bonds, and pays certificate holders variable rate interest
payments based upon a short-term reset periodically.
(f) Principal and interest payments are secured by bond insurance provided by
one of the following companies: Ambac Assurance Corp., Financial Guaranty
Insurance Co., Financial Security Assurance Inc., or MBIA Insurance Corp.
F-39
(g) Security has an irrevocable call or mandatory put by the issuer. Maturity
date reflects such call or put.
(h) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined
semi-annually. Rate shown is the rate in effect on September 30, 2004.
(i) Security is not rated by S&P or by Moody's; however it is rated by Fitch
IBCA ("Fitch") of F1+.
(j) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined monthly. Rate
shown is the rate in effect on September 30, 2004.
(k) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined at
intermittent intervals. Rate shown is the rate in effect on September 30,
2004.
(l) Advance refunded; secured by an escrow fund of U.S. Treasury obligations.
(m) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined daily. Rate
shown is the rate in effect on September 30, 2004.
(n) Security considered to be illiquid. The aggregate market value of these
securities considered illiquid at September 30, 2004 was $38,920,000, which
represented 1.34% of the Fund's net assets.
(o) Determined by the investment advisor to be of comparable quality to the
rated securities in which the Fund may invest, pursuant to guidelines for
the determination of quality adopted by the Board of Trustees and followed
by the investment advisor.
(p) Also represents cost for federal income tax purposes.
See accompanying notes which are an integral part of the financial statements.
F-40
STATEMENT OF ASSETS & LIABILITIES
September 30, 2004
(Unaudited)
<Table>
ASSETS:
Investments, at market value
(cost $2,926,404,421) $2,926,404,421
- ---------------------------------------------
Cash 697,925
- ---------------------------------------------
Receivables for:
Investments sold 4,895,235
- ---------------------------------------------
Interest 8,879,674
- ---------------------------------------------
Investment for trustee
deferred compensation and
retirement plans 136,908
- ---------------------------------------------
Other assets 190,315
=============================================
Total assets 2,941,204,478
_____________________________________________
=============================================
LIABILITIES:
Payables for:
Investments purchased 23,240,918
- ---------------------------------------------
Dividends 2,730,970
- ---------------------------------------------
Trustee deferred
compensation and
retirement plans 215,380
- ---------------------------------------------
Accrued distribution fees 131,402
- ---------------------------------------------
Accrued transfer agent fees 91,843
- ---------------------------------------------
Accrued trustees fees 1,095
- ---------------------------------------------
Accrued operating expenses 58,376
=============================================
Total liabilities 26,469,984
=============================================
Net assets applicable to
shares outstanding $2,914,734,494
_____________________________________________
=============================================
NET ASSETS CONSIST OF:
Shares of beneficial
interest $2,914,752,505
- ---------------------------------------------
Undistributed net realized
gain (loss) from
investment securities (18,011)
=============================================
$2,914,734,494
_____________________________________________
=============================================
NET ASSETS:
Institutional Class $1,671,593,521
_____________________________________________
=============================================
Private Investment Class $ 190,301,672
_____________________________________________
=============================================
Personal Investment Class $ 9,273,444
_____________________________________________
=============================================
Cash Management Class $ 796,326,655
_____________________________________________
=============================================
Reserve Class $ 11,062,666
_____________________________________________
=============================================
Resource Class $ 236,176,536
_____________________________________________
=============================================
SHARES OUTSTANDING,
$0.001 PAR VALUE PER SHARE,
UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Institutional Class 1,671,550,863
_____________________________________________
=============================================
Private Investment Class 190,288,610
_____________________________________________
=============================================
Personal Investment Class 9,270,510
_____________________________________________
=============================================
Cash Management Class 796,322,561
_____________________________________________
=============================================
Reserve Class 11,060,717
_____________________________________________
=============================================
Resource Class 236,175,751
_____________________________________________
=============================================
Net asset value, offering and
redemption price per share
for each class $ 1.00
_____________________________________________
=============================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-41
STATEMENT OF OPERATIONS
For the six months ended September 30, 2004
(Unaudited)
<Table>
INVESTMENT INCOME:
Interest $17,235,533
=========================================================================
EXPENSES:
Advisory fees 3,131,846
- -------------------------------------------------------------------------
Administrative services fees 295,697
- -------------------------------------------------------------------------
Custodian fees 38,978
- -------------------------------------------------------------------------
Distribution fees:
Private Investment Class 404,301
- -------------------------------------------------------------------------
Personal Investment Class 40,938
- -------------------------------------------------------------------------
Cash Management Class 334,772
- -------------------------------------------------------------------------
Reserve Class 50,510
- -------------------------------------------------------------------------
Resource Class 266,654
- -------------------------------------------------------------------------
Transfer agent fees 231,258
- -------------------------------------------------------------------------
Trustees' fees and retirement benefits 29,952
- -------------------------------------------------------------------------
Other 317,825
=========================================================================
Total expenses 5,142,731
=========================================================================
Less: Fees waived (1,065,457)
=========================================================================
Net expenses 4,077,274
=========================================================================
Net investment income 13,158,259
=========================================================================
Net realized gain (loss) from investment securities (17,079)
=========================================================================
Net increase in net assets resulting from operations $13,141,180
_________________________________________________________________________
=========================================================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-42
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 2004 and the year ended March 31, 2004
(Unaudited)
<Table>
<Caption>
SEPTEMBER 30, MARCH 31,
2004 2004
- --------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 13,158,259 $ 22,690,885
- --------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities (17,079) 40,841
============================================================================================
Net increase in net assets resulting from operations 13,141,180 22,731,726
============================================================================================
Distributions to shareholders from net investment income:
Institutional Class (8,710,440) (14,405,472)
- --------------------------------------------------------------------------------------------
Private Investment Class (555,715) (1,230,193)
- --------------------------------------------------------------------------------------------
Personal Investment Class (20,320) (37,490)
- --------------------------------------------------------------------------------------------
Cash Management Class (2,854,661) (5,040,826)
- --------------------------------------------------------------------------------------------
Reserve Class (4,673) (8,425)
- --------------------------------------------------------------------------------------------
Resource Class (1,012,450) (1,968,479)
============================================================================================
Decrease in net assets resulting from distributions (13,158,259) (22,690,885)
============================================================================================
Share transactions-net:
Institutional Class (282,164,384) 632,519,818
- --------------------------------------------------------------------------------------------
Private Investment Class 39,903,203 (77,436,378)
- --------------------------------------------------------------------------------------------
Personal Investment Class (1,120,107) (6,598,054)
- --------------------------------------------------------------------------------------------
Cash Management Class 28,190,366 150,447,508
- --------------------------------------------------------------------------------------------
Reserve Class (2,966,860) 1,376,091
- --------------------------------------------------------------------------------------------
Resource Class (63,027,459) 39,025,099
============================================================================================
Net increase (decrease) in net assets resulting from
share transactions (281,185,241) 739,334,084
============================================================================================
Net increase (decrease) in net assets (281,202,320) 739,374,925
============================================================================================
NET ASSETS:
Beginning of period 3,195,936,814 2,456,561,889
============================================================================================
End of period (including undistributed net investment
income of $0 and $0, respectively) $2,914,734,494 $3,195,936,814
____________________________________________________________________________________________
============================================================================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-43
NOTES TO FINANCIAL STATEMENTS
September 30, 2004
(Unaudited)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
Tax-Free Investments Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Trust is organized as a Delaware statutory
trust consisting of one portfolio, the Tax-Free Cash Reserve Portfolio (the
"Fund"). The Fund currently offers multiple classes of shares. Matters affecting
each class are voted on exclusively by the shareholders of each class. The
Fund's investment objective is to provide as high a level of tax-exempt income
as is consistent with the preservation of capital and maintenance of liquidity.
On November 4, 2003, the Fund was restructured from a separate series of
Tax-Free Investments Co. to a new series portfolio of the Trust.
Under the Trust's organizational documents, the Fund's officers, trustees,
employees and agents are indemnified against certain liabilities that may arise
out of performance of their duties to the Fund. Additionally, in the normal
course of business, the Fund enters into contracts that contain a variety of
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, the Fund has not had prior claims or losses
pursuant to these contracts.
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 at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted by Rule 2a-7
under the 1940 Act. This method values a security at its cost on the date
of purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities.' Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
F-44
The Fund allocates realized and unrealized capital gains and losses to a
class based on the relative net assets of each class. The Fund allocates
income to a class based on the relative value of the settled shares of each
class.
C. DISTRIBUTIONS -- Distributions from income are declared daily and paid
monthly. Distributions from net realized capital gain, if any, are
generally paid annually and recorded on ex-dividend date. The Fund may
elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and, as such, will not be subject to federal
income taxes on otherwise taxable income (including net realized capital
gain) which is distributed to shareholders. Therefore, no provision for
federal income taxes is recorded in the financial statements.
In addition, the Fund intends to invest in securities to allow it to
qualify to pay shareholders "exempt interest dividends", as defined in the
Internal Revenue Code of 1986, as amended.
E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.25% of the first
$500 million of the Fund's average daily net assets plus 0.20% of the Fund's
average daily net assets in excess of $500 million. AIM has voluntarily agreed
to waive advisory fees and/or reimburse expenses to the extent necessary to
limit Total Annual Fund Operating Expenses (excluding certain items discussed
below) to 0.22%. In determining the advisor's obligation to waive advisory fees
and/or reimburse expenses, the following expenses are not taken into account,
and could cause the Total Annual Fund Operating Expenses to exceed the cap
stated above: (i) Rule 12b-1 plan fees, if any; (ii) interest; (iii) taxes; (iv)
dividend expense on short sales; (v) extraordinary items (these are expenses
that are not anticipated to arise from the Fund's day-to-day operations), or
items designated as such by the Fund's Board of Trustees; (vi) expenses related
to a merger or reorganization, as approved by the Fund's Board of Trustees;
(vii) expenses that the Fund has incurred but did not actually pay because of an
expense offset arrangement; (viii) trustees' fees; and (ix) federal registration
fees. Currently, the only expense offset arrangements from which the Fund
benefits are in the form of credits that the Fund receives from banks where the
Fund or its transfer agent has deposit accounts in which it holds uninvested
cash. Those credits are used to pay certain expenses incurred by the Fund.
Voluntary fee waivers or reimbursements may be modified or discontinued at any
time upon consultation with the Board of Trustees without further notice to
investors. To the extent that the annualized expense ratio does not exceed the
expense limitation, AIM will retain its ability to be reimbursed for such fee
waivers or reimbursements prior to the end of each fiscal year. For the six
months ended September 30, 2004, AIM waived fees of $723,330.
The Trust, pursuant to a master administrative services agreement with AIM,
has agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended September 30, 2004,
AIM was paid $295,697 for such services.
The Trust, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the six months ended
September 30, 2004, AISI retained $225,258 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Trust, FMC acts as the exclusive distributor of the
Fund's shares. The Fund has adopted a master distribution
F-45
plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's
Private Investment Class, Personal Investment Class, Cash Management Class,
Reserve Class and Resource Class (the "Plan"). The Plan provides that the
Private Investment Class, the Personal Investment Class, the Cash Management
Class, the Reserve Class and the Resource Class pay up to the maximum annual
rate of 0.50%, 0.75%, 0.10%, 1.00% and 0.20%, respectively, of the average daily
net assets attributable to such class. Of this amount, up to 0.25% of the
average daily net assets of each class may be paid to furnish continuing
personal shareholder services to customers who purchase and own shares of the
such classes. Any amounts not paid as a service fee under such Plan would
constitute an asset-based sales charge. NASD Rules also impose a cap on the
total amount of sales charges, including asset-based sales charges, that may be
paid by any class of shares of the Fund. Currently, FMC has elected to waive a
portion of its compensation payable by the Fund such that compensation paid
pursuant to the Plan with respect to the Private Investment Class, the Personal
Investment Class, the Cash Management Class, the Reserve Class and the Resource
Class equals the maximum annual rate of 0.25%, 0.55%, 0.08%, 0.87% and 0.16%,
respectively, of the average daily net assets attributable to such class.
Further, FMC voluntarily waived additional Rule 12b-1 plan fees for the Reserve
Class during the year in order to increase the yield. Waivers may be modified or
discontinued at any time. Pursuant to the Plan, for the six months ended
September 30, 2004, the Private Investment Class, the Personal Investment Class,
the Cash Management Class, the Reserve Class and the Resource Class paid
$202,150, $30,021, $267,818, $41,736 and $213,323, respectively, after FMC
waived Plan fees of $202,151, $10,917, $66,954, $8,774 and $53,331,
respectively.
Certain officers and trustees of the Trust are officers and directors of
AIM, FMC and/or AISI.
NOTE 3--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM and INVESCO Funds under specified conditions outlined in procedures adopted
by the Board of Trustees of the Trust. The procedures have been designed to
ensure that any purchase or sale of securities by the Fund from or to another
fund or portfolio that is or could be considered an affiliate by virtue of
having a common investment advisor (or affiliated investment advisors), common
Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act.
Further, as defined under the procedures each transaction is effected at the
current market price. Pursuant to these procedures, during the six months ended
September 30, 2004, the Fund engaged in purchases and sales of securities of $0
and $27,058,780, respectively.
NOTE 4--TRUSTEES' FEES
Trustees' fees represent remuneration paid to each Trustee of the Trust who is
not an "interested person" of AIM. Trustees have the option to defer
compensation payable by the Trust. Those Trustees who defer compensation have
the option to select various AIM Funds and INVESCO Funds in which their deferral
accounts shall be deemed to be invested.
Current Trustees are eligible to participate in a retirement plan that
provides for benefits to be paid upon retirement to Trustees over a period of
time based on the number of years of service. The Fund may have certain former
Trustees that also participate in a retirement plan and receive benefits under
such plan.
Obligations under the deferred compensation and retirement plans represent
unsecured claims against the general assets of the Fund.
During the six months ended September 30, 2004, the Fund paid legal fees of
$5,068 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel
to the Independent Trustees. A member of that firm is a Trustee of the Trust.
F-46
NOTE 5--BORROWINGS
Pursuant to an exemptive order from the SEC, the Fund may participate in an
interfund lending facility that AIM has established for temporary borrowings by
the AIM Funds and the INVESCO Funds. An interfund loan will be made under this
facility only if the loan rate (an average of the rate available on bank loans
and the rate available on investments in overnight repurchase agreements) is
favorable to both the lending fund and the borrowing fund. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. To the extent that the loan is required
to be secured by collateral, the collateral is marked to market daily to ensure
that the market value is at least 102% of the outstanding principal value of the
loan. The Fund did not borrow or lend under the facility during the six months
ended September 30, 2004.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with The Bank of New York, the custodian bank.
To compensate the custodian bank for such overdrafts, the overdrawn Fund may
either (i) leave funds in the account so the custodian can be compensated by
earning the additional interest; or (ii) compensate by paying the custodian
bank. In either case, the custodian bank will be compensated at an amount equal
to the Federal Funds rate plus 100 basis points.
NOTE 6--TAX INFORMATION
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforward) under income tax regulations. The tax character of
distributions paid during the year and the tax components of net assets will be
reported at the Fund's fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions.
The Fund had a capital loss carryforward as of March 31, 2004 which expires
as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------
March 31, 2011 $933
_____________________________________________________________________________
=============================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
F-47
NOTE 7--SHARE INFORMATION
The Fund currently offers six different classes of shares: Institutional Class,
Private Investment Class, Personal Investment Class, Cash Management Class,
Reserve Class and Resource Class.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING(A)
- ---------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2004 MARCH 31, 2004
--------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
Sold:
Institutional Class 8,676,342,046 $ 8,676,342,046 13,446,683,719 $ 13,446,683,719
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 217,524,346 217,524,346 489,285,624 489,285,624
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class 20,166,779 20,166,779 26,756,133 26,756,133
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 2,908,837,254 2,908,837,254 5,641,820,633 5,641,820,633
- ---------------------------------------------------------------------------------------------------------
Reserve Class 77,269,739 77,269,739 156,764,612 156,764,612
- ---------------------------------------------------------------------------------------------------------
Resource Class 732,494,862 732,494,862 1,508,376,051 1,508,376,051
=========================================================================================================
Issued as reinvestment of
dividends:
Institutional Class 5,177,367 5,177,367 7,301,226 7,301,226
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 318,170 318,170 737,747 737,747
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class 2,442 2,442 4,054 4,054
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 1,846,071 1,846,071 4,115,815 4,115,815
- ---------------------------------------------------------------------------------------------------------
Reserve Class 2,986 2,986 8,921 8,921
- ---------------------------------------------------------------------------------------------------------
Resource Class 936,355 936,355 1,860,224 1,860,224
=========================================================================================================
Reacquired:
Institutional Class (8,963,683,797) (8,963,683,797) (12,821,465,127) (12,821,465,127)
- ---------------------------------------------------------------------------------------------------------
Private Investment Class (177,939,313) (177,939,313) (567,459,749) (567,459,749)
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class (21,289,328) (21,289,328) (33,358,241) (33,358,241)
- ---------------------------------------------------------------------------------------------------------
Cash Management Class (2,882,492,959) (2,882,492,959) (5,495,488,940) (5,495,488,940)
- ---------------------------------------------------------------------------------------------------------
Reserve Class (80,239,585) (80,239,585) (155,397,442) (155,397,442)
- ---------------------------------------------------------------------------------------------------------
Resource Class (796,458,676) (796,458,676) (1,471,211,176) (1,471,211,176)
=========================================================================================================
(281,185,241) $ (281,185,241) 739,334,084 $ 739,334,084
_________________________________________________________________________________________________________
=========================================================================================================
</Table>
(a) There are two entities that are each record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate they own 50% of the
outstanding shares of the Fund. The Fund's principle underwriter may have an
agreement with these entities to sell Fund shares. The Fund, AIM and/or AIM
affiliates may make payments to these entities, which are considered to be
related to the Fund, for providing services to the Fund, AIM and/or AIM
affiliates including but not limited to services such as, securities
brokerage, distribution, third party record keeping and account servicing.
The Trust has no knowledge as to whether all or any portion of the shares
owned of record by these shareholders are also owned beneficially.
F-48
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
PERSONAL INVESTMENT CLASS
----------------------------------------------------------------
DECEMBER 4,
2000
SIX MONTHS (DATE SALES
ENDED YEAR ENDED MARCH 31, COMMENCED) TO
SEPTEMBER 30, -------------------------- MARCH 31,
2004 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
- --------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.002 0.003 0.01 0.02(a) 0.01
==================================================================================================
Less distributions from net
investment income (0.002) (0.003) (0.01) (0.02) (0.01)
==================================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
__________________________________________________________________________________________________
==================================================================================================
Total return(b) 0.19% 0.28% 0.69% 1.66% 0.95%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $9,273 $10,394 $16,991 $5,102 $ 722
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 0.77%(c) 0.77% 0.76% 0.72% 0.70%(d)
- --------------------------------------------------------------------------------------------------
Without fee waivers 1.02%(c) 1.02% 1.02% 1.03% 1.04%(d)
__________________________________________________________________________________________________
==================================================================================================
Ratio of net investment income
to average net assets 0.38%(c) 0.28% 0.66% 1.51% 3.35%(d)
__________________________________________________________________________________________________
==================================================================================================
</Table>
(a) Calculated using average shares outstanding.
(b) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and is not annualized for periods
less than one year.
(c) Ratios are annualized and based on average daily net assets of $10,884,016.
(d) Annualized.
F-49
NOTE 9--LEGAL PROCEEDINGS
Terms used in this Legal Proceedings Note are defined terms solely for the
purpose of this note.
The mutual fund industry as a whole is currently subject to regulatory
inquiries and litigation related to a wide range of issues. These issues
include, among others, market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders.
As described more fully below, INVESCO Funds Group, Inc. ("IFG"), the former
investment advisor to certain AIM Funds, A I M Advisors, Inc. ("AIM"), the
Fund's investment advisor, and A I M Distributors, Inc. ("ADI"), the distributor
of the retail AIM Funds and a wholly owned subsidiary of AIM, reached final
settlements with the Securities and Exchange Commission ("SEC"), the New York
Attorney General ("NYAG"), the Colorado Attorney General ("COAG"), the Colorado
Division of Securities ("CODS") and the Secretary of State of the State of
Georgia to resolve civil enforcement actions and investigations related to
market timing activity and related issues in the AIM Funds, including those
formerly advised by IFG.
In addition, as described more fully below, IFG and AIM are the subject of a
number of ongoing regulatory inquiries and civil lawsuits related to one or more
of the issues currently being scrutinized by various Federal and state
regulators, including but not limited to those issues described above.
Additional regulatory actions and/or civil lawsuits related to the above or
other issues may be filed against the AIM Funds, IFG, AIM and/or related
entities and individuals in the future. Additional regulatory inquiries related
to the above or other issues also may be received by the AIM Funds, IFG, AIM
and/or related entities and individuals in the future.
As a result of the matters discussed below, investors in the AIM Funds might
react by redeeming their investments. This might require the Funds to sell
investments to provide for sufficient liquidity and could also have an adverse
effect on the investment performance of the Funds.
Settled Enforcement Actions and Investigations Related to Market Timing
On October 8, 2004, AMVESCAP PLC ("AMVESCAP"), the parent company of IFG and
AIM, announced that final settlements had been reached with the SEC, the NYAG,
the COAG and the Secretary of State of Georgia to resolve civil enforcement
actions and investigations related to market timing activity and related issues
in the AIM Funds, including those formerly advised by IFG. A final settlement
also has been reached with the Colorado Division of Securities ("CODS") with
respect to this matter. In their enforcement actions and investigations, these
regulators alleged, in substance, that IFG and AIM failed to disclose in the
prospectuses for the AIM Funds that they advised and to the independent
directors/trustees of such Funds that IFG and AIM had entered into certain
arrangements permitting market timing of such Funds, thereby breaching their
fiduciary duties to such Funds. As a result of the foregoing, the regulators
alleged that IFG, AIM and ADI breached various Federal and state securities,
business and consumer protection laws. Under the terms of the settlements, IFG,
AIM and ADI consent to the entry of settlement orders or assurances of
discontinuance, as applicable, by the regulators containing certain terms, some
of which are described below, without admitting or denying any wrongdoing.
Under the terms of the settlements, IFG agreed to pay a total of $325 million,
of which $110 million is civil penalties. Of the $325 million total payment,
half will be paid on or before December 31, 2004 and the remaining half will be
paid on or before December 31, 2005. AIM and ADI agreed to pay a total of $50
million, of which $30 million is civil penalties. The entire $50 million payment
by AIM and ADI will be paid by November 7, 2004.
The entire $325 million IFG settlement payment will be available for
distribution to the shareholders of those AIM Funds that IFG formerly advised
that were harmed by market timing activity, and the entire $50 million
F-50
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
settlement payment by AIM and ADI will be available for distribution to the
shareholders of those AIM Funds advised by AIM that were harmed by market timing
activity, all as to be determined by an independent distribution consultant to
be appointed under the settlements. The settlement payments will be distributed
in accordance with a methodology to be determined by the independent
distribution consultant, in consultation with AIM and the independent trustees
of the AIM Funds and acceptable to the staff of the SEC.
Under the settlements with the NYAG and COAG, AIM has agreed to reduce
management fees on the AIM Funds by $15 million per year for the next five
years, based upon effective fee rates and assets under management as of July 1,
2004, and not to increase certain management fees. IFG will also pay $1.5
million to the COAG to be used for investor education purposes and to reimburse
the COAG for actual costs. Finally, IFG and AIM will pay $175,000 to the
Secretary of State of Georgia to be used for investor education purposes and to
reimburse the Secretary of State for actual costs.
None of the costs of the settlements will be borne by the AIM Funds or by Fund
shareholders.
Under the terms of the settlements, AIM will make certain governance reforms,
including maintaining an internal controls committee and retaining an
independent compliance consultant, a corporate ombudsman and, as stated above,
an independent distribution consultant. Also, commencing in 2007 and at least
once every other year thereafter, AIM will undergo a compliance review by an
independent third party.
In addition, under the terms of the settlements, AIM has undertaken to cause
the AIM Funds to operate in accordance with certain governance policies and
practices, including retaining a full-time independent senior officer whose
duties will include monitoring compliance and managing the process by which
proposed management fees to be charged the AIM Funds are negotiated. Also,
commencing in 2008 and not less than every fifth calendar year thereafter, the
AIM Funds will hold shareholder meetings at which their Boards of Trustees will
be elected.
On October 8, 2004, the SEC announced that it had settled a market timing
enforcement action against Raymond R. Cunningham, the former president and chief
executive officer of IFG and a former member of the board of directors of the
AIM Funds formerly advised by IFG. As part of the settlement, the SEC ordered
Mr. Cunningham to pay $1 in restitution and civil penalties in the amount of
$500,000. In addition, the SEC prohibited Mr. Cunningham from associating with
an investment advisor, broker, dealer or investment company for a period of two
years and further prohibited him from serving as an officer or director of an
investment advisor, broker, dealer or investment company for a period of five
years.
On August 31, 2004, the SEC announced that it had settled market timing
enforcement actions against Timothy J. Miller, the former chief investment
officer and a former portfolio manager for IFG, Thomas A. Kolbe, the former
national sales manager of IFG, and Michael D. Legoski, a former assistant vice
president in IFG's sales department. As part of the settlements, the SEC ordered
Messrs. Miller, Kolbe and Legoski to pay $1 in restitution each and civil
penalties in the amounts of $150,000, $150,000 and $40,000, respectively. In
addition, the SEC prohibited each of them from associating with an investment
advisor or investment company for a period of one year, prohibited Messrs.
Miller and Kolbe from serving as an officer or director of an investment advisor
or investment company for three years and two years, respectively, and
prohibited Mr. Legoski from associating with a broker or dealer for a period of
one year.
As referenced by the SEC in the SEC's settlement order, one former officer of
ADI and one current officer of AIM (who has taken a voluntary leave of absence)
have received regulatory inquiries in the form of subpoenas or other oral or
written requests for information and/or documents related to market timing
activity in the AIM Funds.
At the direction of the trustees of the AIM Funds, AMVESCAP has agreed to pay
all of the expenses incurred by such Funds related to the market timing
investigations, including expenses incurred in connection with the
F-51
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
regulatory complaints against IFG alleging market timing and the market timing
investigations with respect to IFG and AIM.
The payments made in connection with the above-referenced settlements by IFG,
AIM and ADI will total approximately $375 million (not including AIM's agreement
to reduce management fees on the AIM Funds by $15 million per year for the next
five years, based upon effective fee rates and assets under management as of
July 1, 2004). The manner in which the settlement payments will be distributed
is unknown at the present time and will be determined by an independent
distribution consultant to be appointed under the settlements. Therefore,
management of AIM and the Fund are unable at the present time to estimate the
impact, if any, that the distribution of the settlement amounts may have on the
Fund or whether such distribution will have an impact on the Fund's financial
statements in the future.
At the present time, management of AIM and the Fund are unable to estimate the
impact, if any, that the outcome of the ongoing matters described below may have
on AIM, ADI or the Fund.
Ongoing Regulatory Inquiries Concerning IFG and AIM
IFG, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds formerly advised by IFG have received regulatory
inquiries in the form of subpoenas or other oral or written requests for
information and/or documents related to one or more of the following issues,
some of which concern one or more such Funds: market timing activity, late
trading, fair value pricing, excessive or improper advisory and/or distribution
fees, mutual fund sales practices, including revenue sharing and
directed-brokerage arrangements, and investments in securities of other
registered investment companies. These regulators include the SEC, the NASD,
Inc. ("NASD"), the Florida Department of Financial Services, the Attorney
General of the State of West Virginia, the West Virginia Securities Commission
and the Bureau of Securities of the State of New Jersey. IFG and certain of
these other parties also have received more limited inquiries from the United
States Department of Labor ("DOL") and the United States Attorney's Office for
the Southern District of New York, some of which concern one or more of the AIM
Funds formerly advised by IFG. IFG is providing full cooperation with respect to
these inquiries.
AIM, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds have received regulatory inquiries in the form
of subpoenas or other oral or written requests for information and/or documents
related to one or more of the following issues, some of which concern one or
more AIM Funds: market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders. These regulators include the SEC, the NASD, the
Department of Banking for the State of Connecticut, the Attorney General of the
State of West Virginia, the West Virginia Securities Commission and the Bureau
of Securities of the State of New Jersey. AIM and certain of these other parties
also have received more limited inquiries from the SEC, the NASD, the DOL, the
Internal Revenue Service, the New York Stock Exchange, the United States
Attorney's Office for the Southern District of New York, the United States
Attorney's Office for the Central District of California, the United States
Attorney's Office for the District of Massachusetts, the Massachusetts
Securities Division and the U.S. Postal Inspection Service, some of which
concern one or more AIM Funds. AIM is providing full cooperation with respect to
these inquiries.
Private Civil Actions Alleging Market Timing
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, certain AIM Funds, IFG, AIM, A I M Management Group Inc. ("AIM
Management"), AMVESCAP, certain related entities, certain of their current and
former officers
F-52
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
and/or certain unrelated third parties) making allegations that are similar in
many respects to those in the settled regulatory actions brought by the SEC, the
NYAG and the COAG concerning market timing activity in the AIM Funds. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violation of various provisions of the Federal and state securities laws;
(ii) violation of various provisions of ERISA; (iii) breach of fiduciary duty;
and/or (iv) breach of contract. These lawsuits were initiated in both Federal
and state courts and seek such remedies as compensatory damages; restitution;
injunctive relief; disgorgement of management fees; imposition of a constructive
trust; removal of certain directors and/or employees; various corrective
measures under ERISA; rescission of certain Funds' advisory agreements;
interest; and attorneys' and experts' fees.
All lawsuits based on allegations of market timing, late trading, and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court") for consolidated or coordinated pre-trial
proceedings. Pursuant to an Order of the MDL Court, plaintiffs consolidated
their claims for pre-trial purposes into three amended complaints against
various AIM- and IFG-related parties: (i) a Consolidated Amended Class Action
Complaint purportedly brought on behalf of shareholders of the AIM Funds; (ii) a
Consolidated Amended Fund Derivative Complaint purportedly brought on behalf of
the AIM Funds and fund registrants; and (iii) an Amended Class Action Complaint
for Violations of the Employee Retirement Income Securities Act purportedly
brought on behalf of participants in AMVESCAP's 401(k) plan. Plaintiffs in one
of the underlying lawsuits transferred to the MDL Court continue to seek remand
of their action to state court.
Private Civil Actions Alleging Improper Use of Fair Value Pricing
Multiple civil class action lawsuits have been filed against various parties
(including, depending on the lawsuit, certain AIM Funds, IFG and/or AIM)
alleging that certain AIM Funds inadequately employed fair value pricing. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violations of various provisions of the Federal securities laws; (ii) common
law breach of duty; and (iii) common law negligence and gross negligence. These
lawsuits have been filed in both Federal and state courts and seek such remedies
as compensatory and punitive damages; interest; and attorneys' fees and costs.
Private Civil Actions Alleging Excessive Advisory and/or Distribution Fees
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, INVESCO Institutional (N.A.), Inc., ADI and/or INVESCO
Distributors, Inc.) alleging that the defendants charged excessive advisory
and/or distribution fees and failed to pass on to shareholders the perceived
savings generated by economies of scale. Certain of these lawsuits also allege
that the defendants adopted unlawful distribution plans. These lawsuits allege a
variety of theories of recovery, including but not limited to: (i) violation of
various provisions of the Federal securities laws; (ii) breach of fiduciary
duty; and/or (iii) breach of contract. These lawsuits have been filed in Federal
courts and seek such remedies as damages; injunctive relief; rescission of
certain Funds' advisory agreements and distribution plans; interest; prospective
relief in the form of reduced fees; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Charging of Distribution Fees on Closed
Funds or Share Classes
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, ADI and/or certain of the trustees of the AIM Funds)
alleging that the defendants breached their fiduciary duties by charging
distribution fees while funds and/or specific share classes were closed
generally to new investors and/or while other share classes of the same fund
were not charged the same distribution fees. These lawsuits allege a variety of
theories of recovery, including but not limited to: (i) violation of various
provisions of the Federal securities laws; and (ii) breach of
F-53
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
fiduciary duty. These lawsuits have been filed in Federal courts and seek such
remedies as damages; injunctive relief; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Mutual Fund Sales Practices and
Directed-Brokerage Arrangements
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, AIM Management, IFG, AIM, AIM Investment Services, Inc. and/or
certain of the trustees of the AIM Funds) alleging that the defendants
improperly used the assets of the AIM Funds to pay brokers to aggressively
promote the sale of the AIM Funds over other mutual funds and that the
defendants concealed such payments from investors by disguising them as
brokerage commissions. These lawsuits allege a variety of theories of recovery,
including but not limited to: (i) violation of various provisions of the Federal
securities laws; (ii) breach of fiduciary duty; and (iii) aiding and abetting a
breach of fiduciary duty. These lawsuits have been filed in Federal courts and
seek such remedies as compensatory and punitive damages; rescission of certain
Funds' advisory agreements and distribution plans and recovery of all fees paid;
an accounting of all fund-related fees, commissions and soft dollar payments;
restitution of all unlawfully or discriminatorily obtained fees and charges; and
attorneys' and experts' fees.
F-54
<Table>
TRUSTEES TAX-FREE
Bruce L. Crockett, Chair Robert H. Graham INVESTMENTS TRUST
Bob R. Baker Gerald J. Lewis (TFIT)
Frank S. Bayley Prema Mathai-Davis
James T. Bunch Lewis F. Pennock TAX-FREE
Albert R. Dowden Ruth H. Quigley CASH RESERVE
Edward K. Dunn, Jr. Louis S. Sklar PORTFOLIO
Jack M. Fields Larry Soll, Ph.D.
Carl Frischling Mark H. Williamson PRIVATE
OFFICERS INVESTMENT
Robert H. Graham President CLASS
Mark H. Williamson Executive Vice President
Lisa O. Brinkley Sr. Vice President and Chief Compliance Officer Semi-
Kevin M. Carome Senior Vice President, Secretary & Chief Legal Officer Annual
Sidney M. Dilgren Vice President & Treasurer Report
Stuart W. Coco Vice President
Karen Dunn Kelley Vice President September 30, 2004
Edgar M. Larsen Vice President
INVESTMENT ADVISOR
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
DISTRIBUTOR
Fund Management Company
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
CUSTODIAN
The Bank of New York
2 Hanson Place
Brooklyn, NY 11217-1431
COUNSEL TO THE FUND
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
COUNSEL TO THE TRUSTEES
Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022-3852
TRANSFER AGENT
AIM Investment Services, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
A description of the policies and procedures that the fund uses to determine how
to vote proxies relating to portfolio securities is available without charge,
upon request, from our Client Services department at 800-959-4246 or on the AIM
Web site, AIMinvestments.com. On the home page, scroll down and click on AIM
Funds Proxy Policy. The information is also available on the Securities and
Exchange Commission's Web site, sec.gov.
Information regarding how the fund voted proxies related to its portfolio
securities during the 12 months ended 6/30/04 is available at our Web site. Go
to AIMinvestments.com, access the About Us tab, click on Required Notices and
then click on Proxy Voting Activity. Next, select your fund from the drop-down
menu.
</Table>
YOUR GOALS. OUR SOLUTIONS. [AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark-- --Registered Trademark--
TFIT-SAR-2
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This is the semiannual report on the performance of the
ROBERT H. Private Investment Class of the Tax-Free Cash Reserve
GRAHAM] Portfolio of Tax-Free Investments Trust, a money market fund
investing in short-term municipal bonds of the highest
ROBERT H. GRAHAM credit ratings. The report is for the six-month period ended
September 30, 2004.
Historically low interest rates resulted in low yields
for money market instruments.
The Federal Reserve (the Fed), which had left the federal
funds target rate at 1.00% since June 2003 (the lowest rate
since 1958), increased the rate by 0.25% (or 25 basis
points) three times during the six-month reporting period.
With the latest increase on September 21, the rate stood at
1.75%. The federal funds rate is the interest rate at which depository
institutions lend balances at the Fed to other depository institutions
overnight. The federal funds rate does not mandate the rates offered on
municipal bonds. However, the low-interest rate environment resulting from the
federal funds rate, as well as the overall economic climate itself, affects all
fixed-income investing.
Indications of sustained economic growth characterized the bond market during
the second quarter of 2004, according to The Bond Market Association's Research
Quarterly. The report noted that considering interest rate volatility in 2004,
bond markets in general have responded well to sustained economic growth.
However, municipal bond issuance declined in the quarter amid rising rates and a
flattening yield curve.
Economic activity continued to expand throughout the reporting period,
according to Beige Books published by the Fed. The nation's gross domestic
product, generally considered the broadest measure of economic activity, grew at
an annualized rate of 3.3% in the second quarter and 3.7% in the third quarter
of 2004. According to the Department of Labor, 1.05 million jobs were created
during the reporting period. However, a slowdown in job growth led to declining
consumer confidence in August and September, according to The Conference Board.
At the close of the fiscal year, the unemployment rate stood at 5.4%.
The September Beige Book reported that the economy continued to improve in
July and August, with 11 districts reporting increased activity levels during
the summer. All but one district reported an increase in manufacturing activity.
Labor markets remained slack across the nation, with few reports of occupational
shortages, while retail sales improved modestly in July and August, according to
the Beige Book report.
YOUR INVESTMENT PORTFOLIO
For the six-month period ended September 30, 2004, the seven-day SEC and monthly
yields for the Tax-Free Cash Reserve Portfolio's Private Investment Class were
1.02% and 0.90%, respectively. The seven-day SEC yield and monthly yield
represent annualized results for the period, net of fees and expenses, and
exclude any realized capital gains or losses. Yields will fluctuate. Had the
advisor and distributor not waived fees and/or reimbursed expenses, performance
would have been lower. Through a combination of short-term cash management
vehicles and selective use of a longer maturity schedule for
========================================
PORTFOLIO COMPOSITION BY MATURITY
In days, as of 9/30/04
1-7 75.5%
8-14 2.6
15-60 7.7
61-120 6.7
121-180 1.8
181-240 0.7
241+ 5.0
The number of days to maturity of each
holding is determined in accordance with
the provisions of Rule 2a-7 under the
Investment Company Act of 1940.
========================================
[AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark--
(continued)
The views and opinions higher yields, the portfolio continued to provide
expressed in this letter relatively attractive returns. The weighted
are those of A I M average maturity (WAM) remained in the 25- to
Advisors, Inc. These 42-day range; at the close of the reporting
views and opinions are period, the WAM stood at 35 days. The portfolio
subject to change at any continued to maintain a relatively short maturity
time based on factors structure to take advantage of any sudden rise in
such as market and market yields.
economic conditions.
These views and opinions The portfolio continued to hold the highest
may not be relied upon as credit-quality ratings given by three widely known
investment advice or credit rating agencies: AAAm from Standard &
recommendations, or as an Poor's, Aaa from Moody's and AAA from
offer for a particular FitchRatings. Fund ratings are subject to change
security. Statements of and are based on several factors including an
fact are from sources analysis of a portfolio's overall credit quality,
considered reliable, but market price exposure and management.
A I M Advisors, Inc.
makes no representation The Tax-Free Cash Reserve Portfolio seeks to
or warranty as to their provide as high a level of tax-exempt income as is
completeness or accuracy. consistent with preservation of capital and
Although historical maintenance of liquidity by investing in
performance is no high-quality, short-term municipal obligations.
guarantee of future The portfolio invests solely in securities that,
results, these insights at the time of investment, are "First Tier," as
may help you understand defined in Rule 2a-7 under the Investment Company
our investment management Act of 1940.
philosophy.
IN CONCLUSION
THIS REPORT MUST BE
ACCOMPANIED OR PRECEDED Despite raising the federal funds rate for the
BY A CURRENTLY EFFECTIVE third time since June 24, as the reporting period
FUND PROSPECTUS, WHICH ended, the Fed believed that monetary policy
CONTAINS MORE COMPLETE remains accommodative. After the September rate
INFORMATION, INCLUDING increase, the Fed stated that it expects
SALES CHARGES AND underlying inflation to be relatively low, but
EXPENSES. READ IT that it would "respond to changes in economic
CAREFULLY BEFORE YOU prospects as needed to maintain price stability."
INVEST.
We are pleased to send you this report on your
PERFORMANCE QUOTED IS investment. AIM is committed to the primary goals
PAST PERFORMANCE AND of safety, liquidity and yield in institutional
CANNOT GUARANTEE fund management. We are also dedicated to customer
COMPARABLE FUTURE service. Should you have comments or questions
RESULTS; CURRENT about this report, please contact one of our
PERFORMANCE MAY BE LOWER representatives at 800-659-1005.
OR HIGHER. VISIT
AIMINVESTMENTS.COM FOR Sincerely,
THE MOST RECENT MONTH-END
PERFORMANCE. /s/ ROBERT H. GRAHAM
----------------------------------------
AN INVESTMENT IN THE FUND Robert H. Graham
IS NOT INSURED OR Chairman, A I M Management Group Inc.
GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE Beginning with fiscal periods ending after
CORPORATION OR ANY OTHER December 31, 2004, the fund files its complete
GOVERNMENT AGENCY. schedule of portfolio holdings with the Securities
ALTHOUGH THE FUND SEEKS and Exchange Commission ("SEC") for the first and
TO PRESERVE THE VALUE OF third quarters of each fiscal year on Form N-Q.
YOUR INVESTMENT AT $1.00 The fund's Form N-Q filings are available on the
PER SHARE, IT IS POSSIBLE SEC's website at http://www.sec.gov. Copies of the
TO LOSE MONEY BY fund's Forms N-Q may be reviewed and copied at the
INVESTING IN THE FUND. SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549-0102. You can obtain
information on the operation of the Public
Reference Room, including information about
duplicating fee charges, by calling 1-202-942-8090
or by electronic request at the following E-mail
address: publicinfo@sec.gov. The SEC file numbers
for the fund are 8112731 and 2-58286. The fund's
most recent portfolio holdings, as filed on Form
N-Q, are also available at www.aiminvestments.com.
2
INFORMATION ABOUT YOUR FUND'S EXPENSES
EXAMPLE
As a shareholder of the fund, you incur ongoing costs, including management
fees; distribution and/or service fees (12b-1); and other fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the fund and to compare these costs with ongoing costs of investing
in other mutual funds. The example is based on an investment of $1,000 invested
at the beginning of the period and held for the entire period, April 1, 2004
- -September 30, 2004.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use this information to compare the ongoing costs of investing in the fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
================================================================================
<Table>
<Caption>
HYPOTHETICAL
ACTUAL (5% ANNUAL RETURN
BEFORE EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING
(04/01/04) (09/30/04)(1) PERIOD(2) (09/30/04) PERIOD(2)
PRIVATE
INVESTMENT CLASS $1,000.00 $1,003.40 $2.36 $1,022.71 $2.38
</Table>
(1) The actual ending account value is based on the actual total return of the
Fund for the period April 1, 2004 to September 30, 2004 after actual expenses
and will differ from the hypothetical ending account value which is based on the
Fund's expense ratio and a hypothetical annual return of 5% before expenses. The
actual cumulative return at net asset value for the period April 1, 2004 to
September 30, 2004 was 0.34% for Private Investment Class shares.
(2) Expenses are equal to the fund's annualized expense ratio (0.47% for Private
Investment Class shares) multiplied by the average account value over the
period, multiplied by 183/365 (to reflect the one-half year period).
================================================================================
3
SCHEDULE OF INVESTMENTS
September 30, 2004
(Unaudited)
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS-100.40%
ALABAMA-1.62%
Birmingham (City of) Public Parks &
Recreation Board
(Children's Zoo Project); VRD Series 2002
RB
(LOC-AmSouth Bank)
1.84%, 05/01/07(b(c) -- VMIG-1 $ 2,925 $ 2,925,000
- -------------------------------------------------------------------------------------------
Birmingham (City of) Public Parks &
Recreation Board
(YMCA Project); Refunding VRD Series 1996
RB
(LOC-AmSouth Bank)
1.84%, 06/01/16(b)(c) -- VMIG-1 1,990 1,990,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Birmingham
Waterworks & Sewer Board);
VRD Series 2002-6009 Class A COP
(Acquired 11/05/02; Cost $4,100,000)
1.75%, 01/01/43(c)(d)(e) A-1+ -- 4,100 4,100,000
- -------------------------------------------------------------------------------------------
VRD Series 2003-0007 Class A COP
(Acquired 04/16/03; Cost $7,370,000)
1.75%, 01/01/43(c)(d)(e) A-1+ -- 7,370 7,370,000
- -------------------------------------------------------------------------------------------
Homewood (City of) Medical Clinic Board
(Lakeshore Foundation Project); Lease
Revenue VRD Series 2000 RB
(LOC-AmSouth Bank)
1.84%, 11/01/24(b)(c) A-1 -- 6,046 6,046,000
- -------------------------------------------------------------------------------------------
Mobile (City of); Port City Medical Clinic
Board (Infirmary Health); VRD Series 1998 B
RB
1.71%, 02/01/25(c)(f) A-1 VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Montgomery (City of) Industrial Development
Board
(Industrial Partners Project); Refunding
VRD Series 1989 IDR
(LOC-SunTrust Bank)
1.73%, 01/01/07(b)(c) -- Aa2 635 635,000
- -------------------------------------------------------------------------------------------
Oxford (City of); Unlimited Tax VRD Series
2003 GO Wts.
(LOC-Branch Banking & Trust)
1.73%, 07/01/15(b)(c) -- VMIG-1 5,180 5,180,000
- -------------------------------------------------------------------------------------------
Ridge (City of) Improvement District; Special
Assessment VRD Series 2000 RB (LOC-AmSouth
Bank)
1.73%, 10/01/25(b)(c) -- VMIG-1 13,335 13,335,000
- -------------------------------------------------------------------------------------------
Tuscaloosa (City of) Educational Building
Authority (Stillman College Project);
Refunding Capital Improvement VRD Series
2002 A RB (LOC-AmSouth Bank)
1.84%, 10/01/23(b)(c) -- VMIG-1 500 500,000
===========================================================================================
47,081,000
===========================================================================================
</Table>
F-1
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ALASKA-0.13%
Alaska (State of) Industrial Development &
Export Authority
(Safeway Inc. Projects); Refunding VRD
Series 1991 IDR
(LOC-Deutsche Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1 -- $ 1,895 $ 1,895,000
- -------------------------------------------------------------------------------------------
Alaska (State of) Industrial Development
Authority
(Alaska Hotel Properties Inc. Project); VRD
Series 1986 IDR
(LOC-Royal Bank of Scotland)
(Acquired 12/17/02; Cost $800,000)
1.70%, 06/01/06(b)(c)(d) -- Aa1 800 800,000
- -------------------------------------------------------------------------------------------
Matanuska-Susitna (Borough of); Unlimited Tax
Series 1998 A GO
4.50%, 03/01/05(f) AAA Aaa 1,000 1,012,718
===========================================================================================
3,707,718
===========================================================================================
ARIZONA-1.43%
Apache (County of) Industrial Development
Authority
(Tucson Electric Power Co.); Floating Rate
Series 1982 A IDR
(LOC-Credit Suisse First Boston)
1.75%, 12/15/18(b)(c) A-1 VMIG-1 6,625 6,625,000
- -------------------------------------------------------------------------------------------
Casa Grande (City of) Industrial Development
Authority (Center Park Apartments Project);
Refunding Multi-Family Housing VRD Series
2001 A IDR (CEP-Federal National Mortgage
Association)
1.72%, 06/15/31(c) -- VMIG-1 2,010 2,010,000
- -------------------------------------------------------------------------------------------
Casa Grande (City of) Industrial Development
Authority (Quail Gardens Apartments);
Refunding Multi-Family Housing VRD Series
2001 A IDR (CEP-Federal National Mortgage
Association)
1.72%, 06/15/31(c) -- VMIG-1 1,550 1,550,000
- -------------------------------------------------------------------------------------------
Phoenix (City of) Civic Improvement Corp.;
Wastewater System Series 2003 BAN
1.22%, 11/12/04 A-1+ P-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
1.23%, 12/16/04 A-1+ P-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
1.27%, 01/10/05 A-1+ P-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Phoenix (City of) Industrial Development
Authority
(Lynwood Apartments Project); Refunding VRD
Series 1994 IDR
(CEP-Federal Home Loan Bank)
1.75%, 10/01/25(c) A-1+ -- 6,020 6,020,000
- -------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Tucson Electric Power
Co.-Irvington Road Project); VRD Series
1982 IDR (LOC-Credit Suisse First Boston)
1.68%, 10/01/22(b)(c) A-1 VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
University of Arizona (University of Arizona
Projects);
VRD Series 2004 B COP
1.64%, 06/01/31(c)(f) A-1+ VMIG-1 2,550 2,550,000
===========================================================================================
41,755,000
===========================================================================================
</Table>
F-2
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ARKANSAS-0.09%
Pulaski (County of) Public Facilities Board
(Health Facilities-Central Arkansas
Radiation Therapy Inc. Project);
Educational Facilities VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.75%, 07/01/08(b)(c)(i) -- -- $ 2,500 $ 2,500,000
===========================================================================================
CALIFORNIA-0.05%
San Diego (County of) (Friends of Chabad
Lubavitch);
VRD Series 2003 COP (LOC-Comerica Bank)
1.78%, 01/01/23(b)(c)(i) -- -- 1,500 1,500,000
===========================================================================================
COLORADO-2.39%
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Art Museum
Project); VRD Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 01/01/33(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Seminary
Project); VRD Series 2004 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 07/01/24(b)(c) A-1+ -- 1,200 1,200,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (National Cable
Television Center & Museum Project);
VRD Series 1999 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 10/01/06(b)(c) A-1+ -- 1,505 1,505,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority
(Regis Jesuit High School Project); VRD
Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 12/01/33(b)(c) A-1+ -- 5,015 5,015,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Arapahoe House Project); VRD Series 2004 A
RB
(LOC-Wells Fargo Bank N.A.)
1.76%, 04/01/24(b)(c) A-1+ -- 1,200 1,200,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Christian Living Project); Refunding VRD
Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.74%, 01/01/31(b)(c) A-1+ -- 3,400 3,400,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Craig Hospital Project); Refunding VRD
Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 12/01/20(b)(c) A-1+ -- 5,605 5,605,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Golden West Manor Inc. Project); VRD
Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.74%, 07/01/32(b)(c) A-1+ -- 4,210 4,210,000
- -------------------------------------------------------------------------------------------
Colorado Springs (City of) (Pikes Peak Mental
Health);
VRD Series 2003 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 03/15/23(b)(c) A-1+ -- 3,570 3,570,000
- -------------------------------------------------------------------------------------------
</Table>
F-3
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
COLORADO-(CONTINUED)
Denver (City & County of) (Kentucky Circle
Village Project); VRD Series 2000 RB
(LOC-Mountain States Bank, U.S. Bank N.A.)
1.74%, 10/01/29(b)(c) A-1+ -- $ 1,740 $ 1,740,000
- -------------------------------------------------------------------------------------------
Idaho Springs (City of); (Safeway Inc.
Project);
Refunding VRD Series 1993 IDR (LOC-Deutsche
Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1+ -- 940 940,000
- -------------------------------------------------------------------------------------------
Jefferson (County of) School District No.
R-001; Series 2004 A TAN
3.00%, 06/30/05 SP-1+ MIG-1 30,000 30,332,309
- -------------------------------------------------------------------------------------------
Lafayette (City of) Exempla Improvement
District
(Special Improvement No. 2-01);
Refunding Special Assessment VRD Series
2002 RB
(LOC-Wells Fargo Bank N.A.)
1.72%, 12/01/22(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (City & County of
Denver Water);
VRD Series 2003 PT-1872 RB
(Acquired 05/29/03; Cost $7,830,000)
1.73%, 12/01/22(c)(d)(e)(i) -- -- 7,830 7,830,000
- -------------------------------------------------------------------------------------------
Regional Transportation (District of);
Refunding Sales Tax Series 2003 A RB
3.00%, 11/01/04(f) AAA Aaa 1,000 1,001,613
===========================================================================================
69,548,922
===========================================================================================
CONNECTICUT-0.09%
Connecticut (State of) Development Authority
(Central Vermont Public Service); Floating
Rate Series 1985 PCR
(LOC-Royal Bank of Scotland)
1.35%, 12/01/15(b)(j) A-1+ -- 1,400 1,400,000
- -------------------------------------------------------------------------------------------
Connecticut (State of) Development Authority
(Connecticut Water Co. Project); Refunding
Water Facilities VRD Series 2004 B RB
(LOC-Royal Bank of Scotland)
1.70%, 09/01/28(b)(c) A-1+ -- 1,125 1,125,000
===========================================================================================
2,525,000
===========================================================================================
DELAWARE-0.28%
Delaware (State of) Economic Development
Authority
(Independent School Inc. Project); VRD
Series 2003 RB
(LOC-Royal Bank of Scotland)
1.69%, 07/01/33(b)(c) A-1+ -- 8,250 8,250,000
===========================================================================================
DISTRICT OF COLUMBIA-0.89%
District of Columbia (Consortium Issue); VRD
Series 1998 RB
(LOC-Wachovia Bank N.A.)
1.69%, 07/01/23(b)(c) A-1 -- 15,755 15,755,000
- -------------------------------------------------------------------------------------------
District of Columbia (National Children's
Center Inc.);
VRD Series 1993 RB (LOC-Bank of America
N.A.)
1.70%, 02/01/20(b)(c) A-1+ -- 3,385 3,385,000
- -------------------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA-(CONTINUED)
District of Columbia (Resources for the
Future Inc.);
VRD Series 1998 RB (LOC-Wachovia Bank N.A.)
(Acquired 09/26/03; Cost $2,015,000)
1.75%, 08/01/29(b)(c)(d) A-1 -- $ 2,015 $ 2,015,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (District of Columbia
Water & Sewer Authority); VRD Series 2003
A12 RB
(Acquired 02/24/03; Cost $4,655,000)
1.74%, 10/01/17(c)(d)(e) -- VMIG-1 4,655 4,655,000
===========================================================================================
25,810,000
===========================================================================================
FLORIDA-3.88%
ABN AMRO Munitops Ctfs. Trust (County of
Escambia);
Refunding Florida Non-AMT VRD Series
2002-24 Ctfs.
(Acquired 10/24/02; Cost $5,000,000)
1.73%, 10/01/10(c)(d)(e) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Capital Projects Finance Authority (Capital
Projects Loan Program); VRD Series 1997 A
RB
1.74%, 08/01/17(c)(f) A-1+ -- 1,050 1,050,000
- -------------------------------------------------------------------------------------------
Clay (County of) Housing Finance Authority
(Bluff Housing); Refunding Multi-Family
Housing VRD Series 2001 A RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 11/01/14(c) A-1+ -- 1,150 1,150,000
- -------------------------------------------------------------------------------------------
Collier (County of) Health Facilities
Authority
(Cleveland Clinic Health); VRD Hospital
Series 2003 C-2 BAN
(LOC-JPMorgan Chase Bank)
1.55%, 11/22/04(c) A-1+ VMIG-1 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Collier (County of) Industrial Development
Authority
(Redlands Christian Migrant); VRD Series
2001 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/26(b)(c)(i) -- -- 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Duval (County of) Housing Finance Authority
(Sunbeam Road Apartments Project);
Refunding Multi-Family Housing VRD Series
1997 RB
(LOC-Bank of America N.A.)
1.70%, 07/01/25(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Jacksonville (City of) Health Facilities
Authority (Baptist Medical Center Project);
VRD Hospital Series 2003 B RB
(LOC-Bank of America N.A.)
0.98%, 12/22/04(b)(g)(k) A-1+ -- 19,000 19,000,000
- -------------------------------------------------------------------------------------------
Jacksonville (City of) Health Facilities
Authority
(Samuel C. Taylor Foundation Project); VRD
Series 1998 RB (LOC-Bank of America N.A.)
(Acquired 02/20/01; Cost $2,800,000)
1.75%, 12/01/23(b)(c)(d)(i) -- -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
</Table>
F-5
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
Jacksonville (City of) Health Facilities
Authority (University of Florida
Jacksonville Physicians, Inc.); VRD Series
2002 RB
(LOC-Bank of America N.A.)
1.73%, 06/01/22(b)(c) -- VMIG-1 $12,140 $ 12,140,000
- -------------------------------------------------------------------------------------------
Lakeland (City of) Electric & Water;
Refunding Series 1992 RB
5.63%, 10/01/04(l) NRR -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Marion (County of) Hospital District (Munroe
Regional Health System); Health System
Improvement VRD Series 2000 RB
(LOC-AmSouth Bank)
1.72%, 10/01/30(b)(c) -- VMIG-1 13,375 13,375,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (State of Florida
Mid-Bay Bridge Authority); VRD Series 2002
PT-1531 RB
(Acquired 10/10/02; Cost $9,100,000)
1.72%, 10/01/18(c)(d)(e) A-1+ -- 9,100 9,100,000
- -------------------------------------------------------------------------------------------
Miami-Dade (County of) Educational Facilities
Authority
(Carlos Albizu University Project); VRD
Series 2000 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/25(b)(c)(i) -- -- 9,400 9,400,000
- -------------------------------------------------------------------------------------------
Miami-Dade (County of) Industrial Development
Authority
(Palmer Trinity Private School Project);
VRD Series 1999 IDR
(LOC-Bank of America N.A.)
1.75%, 12/01/19(b)(c)(i) -- -- 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Florida Department of
Environmental Protection); Floating Rate
Trust Ctfs. VRD Series 2002-722 RB
(Acquired 11/13/02; Cost $9,850,000)
1.73%, 07/01/22(c)(d)(e) A-1 -- 9,850 9,850,000
- -------------------------------------------------------------------------------------------
North Miami (City of) Educational Facilities
(Miami Country Day School Project); VRD
Series 1999 RB
(LOC-Bank of America N.A.)
1.75%, 08/01/19(b)(c)(i) -- -- 1,550 1,550,000
- -------------------------------------------------------------------------------------------
Orange (County of) Health Facilities
Authority
(Adventist Health System); VRD Series 1992
RB
(LOC-SunTrust Bank)
1.70%, 11/15/14(b)(c) A-1+ VMIG-1 1,155 1,155,000
- -------------------------------------------------------------------------------------------
Orange (County of) Health Facilities
Authority (Presbyterian Retirement
Communities Project); VRD Series 1998 RB
(LOC-Bank of America N.A.)
(Acquired 01/29/02-09/01/04; Cost
$5,129,000)
1.75%, 11/01/28(b)(c)(d)(i) -- -- 5,129 5,129,000
- -------------------------------------------------------------------------------------------
Palm Beach (County of) Educational Facilities
Authority (Atlantic College Project);
Educational Facilities VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/31(b)(c)(i) -- -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
Pasco (County of); Refunding Water & Sewer
Series 2002 RB
5.00%, 10/01/04(f) AAA Aaa 1,000 1,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-6
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
Tampa (City of) (Agency for Community
Treatment DACCO Project); VRD Series 2001
RB (LOC-Bank of America N.A.)
1.75%, 07/01/22(b)(c)(i) -- -- $ 5,080 $ 5,080,000
- -------------------------------------------------------------------------------------------
University of North Florida Foundation, Inc.
(Parking System);
VRD Series 1998 RB (LOC-Wachovia Bank N.A.)
1.73%, 05/01/28(b)(c) A-1 -- 800 800,000
===========================================================================================
113,079,000
===========================================================================================
GEORGIA-5.07%
Athens-Clarke (County of) Unified Government
Development Authority (University of
Georgia Athletic Association Project);
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.76%, 08/01/33(b)(i)(m) -- -- 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Clayton (County of) Development Authority
(Delta Airlines Project); Special
Facilities VRD Series 2000 A RB
(CEP-General Electric Capital Corp.)
1.71%, 06/01/29(c) A-1+ VMIG-1 7,500 7,500,000
- -------------------------------------------------------------------------------------------
Cobb (County of) Housing Authority (Tamarron
Apartments Project); Refunding Multi-Family
Housing VRD Series 2003 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 03/01/24(c) A-1+ -- 5,050 5,050,000
- -------------------------------------------------------------------------------------------
Cobb (County of) School District; Limited Tax
Series 2004 GO
1.75%, 12/31/04 -- MIG-1 20,000 20,038,500
- -------------------------------------------------------------------------------------------
DeKalb (County of) Hospital Authority
(DeKalb Medical Center Inc. Project); VRD
Series 2000 B RB
(LOC-Wachovia Bank N.A.)
1.69%, 10/01/25(b)(c) -- VMIG-1 10,925 10,925,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Georgia);
VRD Series 2000-1001 C COP (Acquired
07/26/00; Cost $20,000,000)
1.75%, 07/01/15(c)(d)(e) A-1+ -- 20,000 20,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Dalton); Utilities VRD
Series 2003 A02 RB
(Acquired 08/25/04; Cost $4,895,000)
1.74%, 01/01/12(c)(d)(e) -- VMIG-1 4,895 4,895,000
- -------------------------------------------------------------------------------------------
Fulton (County of) Development Authority
(Bridgeway Foundation for Education
Project); Educational Facilities VRD Series
2000 RB
(LOC-Wachovia Bank N.A.)
1.74%, 06/01/15(b)(c) A-1 -- 1,400 1,400,000
- -------------------------------------------------------------------------------------------
Fulton (County of) Hospital Authority
(Northside Hospital Inc.);
VRD Series 2003 A RAN (LOC-Wachovia Bank
N.A.)
1.69%, 10/01/18(b)(c) -- VMIG-1 28,860 28,860,000
- -------------------------------------------------------------------------------------------
Georgia (State of); Unlimited Tax Series 1999
D GO
5.80%, 11/01/04 AAA Aaa 1,400 1,405,461
- -------------------------------------------------------------------------------------------
Gwinnett (County of) School District; Limited
Construction Sales Tax Notes Series 2004 GO
1.75%, 12/30/04 -- MIG-1 15,000 15,025,977
- -------------------------------------------------------------------------------------------
</Table>
F-7
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
GEORGIA-(CONTINUED)
Houston (County of) Hospital Authority; VRD
Series 2002 RB
(LOC-Wachovia Bank N.A.)
1.69%, 10/01/14(b)(c) A-1 -- $ 9,230 $ 9,230,000
- -------------------------------------------------------------------------------------------
Private Colleges & Universities Authority
(Mercer University Project); VRD Series
2003 RB (LOC-Branch Banking & Trust)
1.82%, 10/01/32(b)(c) -- VMIG-1 7,260 7,260,000
- -------------------------------------------------------------------------------------------
Roswell (City of) Housing Authority (Rosemont
Apartments Project); Refunding Multi-Family
Housing VRD Series 2003 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 01/01/34(c) A-1+ -- 10,555 10,555,000
- -------------------------------------------------------------------------------------------
Smyrna (City of) Hospital Authority
(Ridgeview Institute Inc. Project); VRD
Series 2002 RB (LOC-Wachovia Bank N.A.)
1.74%, 11/01/27(b)(c) -- VMIG-1 2,210 2,210,000
===========================================================================================
147,854,938
===========================================================================================
HAWAII-0.37%
Eagle Tax Exempt Trust (State of Hawaii); VRD
Series 2000-1101 COP (Acquired 01/11/01;
Cost $6,000,000)
1.75%, 12/01/16(c)(d)(e) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Hawaii);
Unlimited Tax VRD Series 2003 A16 GO
(Acquired 02/27/03; Cost $3,885,000)
1.74%, 07/01/18(c)(d)(e) -- VMIG-1 3,885 3,885,000
- -------------------------------------------------------------------------------------------
Hawaii (State of); Refunding Unlimited Tax
Series 1997 CO GO
6.00%, 03/01/05(f) AAA Aaa 1,000 1,020,421
===========================================================================================
10,905,421
===========================================================================================
IDAHO-0.47%
Custer (County of) Pollution Control (Amoco
Oil Co.-Standard Oil Industry Project); VRD
Series 1983 RB
0.90%, 04/01/05(g)(h) A-1+ Aa1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Magic Valley Healthcare System Inc.
(Magic Valley Regional Medical Center
Project);
VRD Series 2001 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 12/01/21(b)(c) -- VMIG-1 3,640 3,640,000
===========================================================================================
13,640,000
===========================================================================================
ILLINOIS-14.26%
ABN AMRO Munitops Ctfs. Trust (City of
Chicago); Refunding
Multi-State Non-AMT VRD Limited Tax Series
2001-34 Ctfs. (Acquired 11/15/01; Cost
$10,000,000)
1.75%, 07/01/07(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Bear Stearns Municipal Securities Trust Ctfs.
(State of Illinois Sales Tax); VRD Series
1998-25 Class A RB
(Acquired 08/26/99; Cost $10,000,000)
1.75%, 03/15/07(c)(d)(e) A-1 Aa2 10,000 10,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-8
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Bear Stearns Municipal Securities Trust Ctfs.
(State of Illinois);
VRD Series 2002-190 Class A RB
(Acquired 05/06/02; Cost $10,130,000)
1.75%, 06/05/14(c)(d)(e) A-1 -- $10,130 $ 10,130,000
- -------------------------------------------------------------------------------------------
Chicago (City of); VRD Limited Tax Obligation
Tender Series 2004 GO (LOC-State Street
Bank & Trust Co.)
1.05%, 01/13/05(b)(g)(k) SP-1+ MIG-1 4,000 4,000,000
- -------------------------------------------------------------------------------------------
Chicago (City of); VRD Unlimited Tax Series
2002 B GO
1.70%, 01/01/37(c)(f) A-1+ VMIG-1 8,400 8,400,000
- -------------------------------------------------------------------------------------------
Crestwood (City of) (Trinity Christian
College);
VRD Series 2003 RB (LOC-Fifth Third Bank)
1.51%, 09/01/28(b)(c) A-1+ -- 3,775 3,775,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago Water
& Sewer); VRD Series 2001-1308 COP
(Acquired 12/12/01; Cost $8,655,000)
1.75%, 11/01/26(c)(d)(e) A-1+ -- 8,655 8,655,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago); VRD
Series 2001-1305 COP (Acquired 04/02/01;
Cost $4,950,000)
1.84%, 01/01/35(c)(d)(e) A-1+ -- 4,950 4,950,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (County of Cook
Regional Transportation Authority); VRD
Series 2000-1303 COP
(Acquired 03/26/01; Cost $19,000,000)
1.75%, 07/01/23(c)(d)(e) A-1+ -- 19,000 19,000,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Illinois);
VRD Unlimited Tax Series 2003-0023 Class A
COP
(Acquired 06/12/03; Cost $3,775,000)
1.75%, 06/01/15(c)(d)(e) A-1+ -- 3,775 3,775,000
- -------------------------------------------------------------------------------------------
VRD Series 2000-1304 COP (Acquired
06/27/00; Cost $7,340,000)
1.75%, 06/01/21(c)(d)(e) A-1+ -- 7,340 7,340,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Chicago Park
District);
VRD Unlimited Tax Series 2002-1306 Class A
COP
(Acquired 05/02/02; Cost $5,500,000)
1.75%, 01/01/29(c)(d)(e) A-1+ -- 5,500 5,500,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago
Public Building Commission); VRD Series
2003-0015 Class A COP (Acquired 05/14/03;
Cost $2,800,000)
1.75%, 12/01/14(c)(d)(e) A-1+ -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Central Lake County
Joint Action Water Agency); VRD Series 2003
B18 RB
(Acquired 02/19/03; Cost $3,155,000)
1.74%, 05/01/20(c)(d)(e) -- VMIG-1 3,155 3,155,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Chicago Board of
Education);
VRD Unlimited Tax Series 2000 A4 GO
(Acquired 11/12/03; Cost $4,845,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 4,845 4,845,000
- -------------------------------------------------------------------------------------------
</Table>
F-9
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
First Union MERLOTs (City of Chicago); VRD
Limited Tax Series 2000 A12 GO (Acquired
10/13/00; Cost $10,000,000)
1.74%, 01/01/23(c)(d)(e) -- VMIG-1 $10,000 $ 10,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Chicago
Emergency Telephone System); VRD Limited
Tax Series 2002 A44 GO
(Acquired 08/02/02; Cost $7,855,000)
1.74%, 01/01/20(c)(d)(e) -- VMIG-1 7,855 7,855,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Cook County Regional
Transportation Authority);
VRD Unlimited Tax Series 2001 A93 GO
(Acquired 10/10/01; Cost $3,670,000)
1.74%, 07/01/27(c)(d)(e) -- VMIG-1 3,670 3,670,000
- -------------------------------------------------------------------------------------------
VRD Unlimited Tax Series 2002 A41 GO
(Acquired 07/25/02; Cost $17,825,000)
1.74%, 06/01/17(c)(d)(e) -- VMIG-1 17,825 17,825,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Cook County); VRD
Unlimited Tax Series 2003 B11 GO (Acquired
01/29/03; Cost $7,000,000)
1.74%, 11/15/25(c)(d)(e) -- VMIG-1 7,000 7,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Illinois); VRD
Unlimited Tax Series 2001 A124 GO (Acquired
11/26/01; Cost $7,915,000)
1.74%, 11/01/26(c)(d)(e) A-1 -- 7,915 7,915,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (University of Illinois);
VRD Series 2000 S GO (Acquired 03/20/00;
Cost $7,400,000)
1.74%, 04/01/30(c)(d)(e) -- VMIG-1 7,400 7,400,000
- -------------------------------------------------------------------------------------------
Glendale Heights (City of) (Glendale Lakes
Project);
Refunding Multi-Family Housing VRD Series
2000 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.69%, 03/01/30(c) A-1+ -- 14,845 14,845,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(American College of Surgeons); VRD Series
1996 RB
(LOC-Northern Trust Co.)
1.60%, 08/01/26(b)(c) A-1+ -- 7,298 7,298,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (BAPS Inc. Project); VRD Series
2002 RB (LOC-Comerica Bank)
1.70%, 06/01/17(b)(c) A-1 -- 9,000 9,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(British Home for Retired Men & Women);
VRD Series 2001 RB (LOC-ABN AMRO Bank N.V.)
1.71%, 11/01/27(b)(c) A-1 -- 9,120 9,120,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Chicago Shakespeare Theater Project); VRD
Series 1999 RB
(LOC-ABN AMRO Bank N.V.) (Acquired
09/24/03; Cost $4,100,000)
1.71%, 01/01/19(b)(c)(d) A-1 -- 4,100 4,100,000
- -------------------------------------------------------------------------------------------
</Table>
F-10
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Development Finance
Authority (Embers Elementary School
Project); Educational Facilities VRD Series
2002 RB (LOC-ABN AMRO Bank N.V.)
(Acquired 11/04/03; Cost $2,250,000)
1.72%, 04/01/32(b)(c)(d) A-1 -- $ 2,250 $ 2,250,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Evanston Northwestern); VRD Series 2001 C
RB
1.70%, 05/01/31(c) A-1+ VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Glenwood School for Boys); VRD Series 1998
RB
(LOC-Bank of Montreal)
1.70%, 02/01/33(b)(c) A-1+ -- 2,100 2,100,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Institute of Gas Technology Project); VRD
Series 1999 IDR
(LOC-Bank of Montreal)
1.80%, 09/01/24(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Lyric Opera of Chicago Project); VRD
Series 1994 RB
(LOC-Northern Trust Co., Bank of Montreal,
JPMorgan Chase Bank)
1.70%, 12/01/28(b)(c) A-1+ VMIG-1 30,000 30,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Mount Carmel High School Project); VRD
Series 2003 RB
(LOC-JPMorgan Chase Bank)
1.70%, 07/01/33(b)(c) -- VMIG-1 5,600 5,600,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Museum of Contemporary Art Project); VRD
Series 1994 RB
(LOC-JPMorgan Chase Bank, Northern Trust
Co.)
1.70%, 02/01/29(b)(c) A-1 VMIG-1 14,950 14,950,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(North Shore Country Day School); VRD
Series 2003 RB
(LOC-Northern Trust Co.)
1.70%, 07/01/33(b)(c) -- VMIG-1 2,825 2,825,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Oak Park Residence Corp. Project); VRD
Series 2001 RB
(LOC-ABN AMRO Bank N.V.) (Acquired
01/29/03; Cost $2,975,000)
1.71%, 07/01/41(b)(c)(d) A-1 -- 2,975 2,975,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Sacred Heart Schools Project); VRD Series
2003 RB
(LOC-Fifth Third Bank)
1.70%, 07/01/33(b)(c) -- VMIG-1 4,600 4,600,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (West Central Illinois
Educational Project); VRD Series 2002 RB
(LOC-JPMorgan Chase Bank)
1.70%, 09/01/32(b)(c) -- VMIG-1 4,800 4,800,000
- -------------------------------------------------------------------------------------------
</Table>
F-11
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Development Finance
Authority
(World Communications Inc.); VRD Series
2000 RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 08/01/15(b)(c) -- VMIG-1 $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (Aurora University); VRD Series
2002 RB (LOC-Fifth Third Bank)
1.75%, 03/01/32(b)(c) -- VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(Chicago Children's Museum); VRD Series
1994 RB
(LOC-JPMorgan Chase Bank)
1.70%, 02/01/28(b)(c) A-1 VMIG-1 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (DePaul University); VRD Series
1992 CP-1 RB (LOC-Northern Trust Co.)
1.70%, 04/01/26(b)(c) A-1+ VMIG-1 1,800 1,800,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(National Louis University); VRD Series
1999 B RB
(LOC-JPMorgan Chase Bank)
1.70%, 06/01/29(b)(c) A-1+ -- 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(University Pooled Financing Program); VRD
Series 1985 RB
1.70%, 12/01/05(c)(f) A-1 VMIG-1 1,050 1,050,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Alexian Brothers Health);
VRD Series 2004 RB (LOC-JPMorgan Chase
Bank)
1.67%, 04/01/35(b)(c) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Jewish
Charities);
VRD Series 2004 A RN (LOC-Bank of Montreal)
1.70%, 06/30/05(b)(c) A-1+ -- 7,630 7,630,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Kohl
Children's Museum);
VRD Series 2004 RB (LOC-Fifth Third Bank)
1.70%, 07/01/34(b)(c) -- VMIG-1 2,680 2,680,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Northwestern University);
VRD Sub-Series 2004 A RB
1.69%, 12/01/34(c) A-1+ VMIG-1 8,000 8,000,000
- -------------------------------------------------------------------------------------------
VRD Sub-Series 2004 B RB
1.70%, 12/01/34(c) A-1+ VMIG-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Bensenville Home Society); VRD Series 1989
A RB
(LOC-JPMorgan Chase Bank)
1.71%, 02/15/19(b)(c) A-1 -- 1,150 1,150,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Blessing Hospital);
VRD Series 1999 B RB
1.74%, 11/15/29(c)(f) A-1 VMIG-1 4,710 4,710,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Cradle Society Project); VRD
Series 1998 RB (LOC-JPMorgan Chase Bank)
1.70%, 04/01/33(b)(c) A-1+ -- 1,600 1,600,000
- -------------------------------------------------------------------------------------------
</Table>
F-12
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Health Facilities
Authority (Edward Hospital Obligated
Group); VRD Series 2001 C RB
1.71%, 02/01/34(c)(f) A-1 VMIG-1 $ 2,050 $ 2,050,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Franciscan Eldercare Project);
Refunding VRD Series 1996 E RB
(LOC-ABN AMRO Bank N.V.)
1.67%, 05/15/27(b)(c) A-1 -- 5,660 5,660,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Northwestern Memorial Hospital); VRD
Series 1995 RB
1.70%, 08/15/25(c) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Peace Memorial Ministries); VRD Series
2003 B RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 08/15/33(b)(c) A-1 -- 9,845 9,845,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Resurrection Health); VRD Series
1999 B RB
1.71%, 05/15/29(c)(f) A-1 VMIG-1 2,210 2,210,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(St. Luke's Medical Center); VRD Series
1998 B RB
1.71%, 11/15/23(c)(f) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority;
Revolving Fund Pooled VRD Series 1985 C RB
(LOC-JPMorgan Chase Bank)
1.70%, 08/01/15(b)(c) A-1+ VMIG-1 8,100 8,100,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Toll Highway Authority;
Refunding Toll Highway VRD Series 1998 B RB
1.75%, 01/01/16(c)(f) AAA VMIG-1 15,900 15,900,000
- -------------------------------------------------------------------------------------------
1.75%, 01/01/17(c)(f) AAA VMIG-1 4,600 4,600,000
- -------------------------------------------------------------------------------------------
Lombard (City of) (Clover Creek Apartments
Project);
VRD Multi-Family Housing Series 2000 RB
(CEP-Federal National Mortgage Association)
1.72%, 12/15/30(c) A-1+ -- 14,855 14,855,000
- -------------------------------------------------------------------------------------------
McCook (City of) (Illinois Saint Andrew
Society);
VRD Series 1996 A RB (LOC-Northern Trust
Co.)
1.72%, 12/01/21(b)(c) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Oak Forest (City of) (Homewood Pool-South
Suburban Mayors & Managers Association
Program); VRD Series 1989 RB
(LOC-Fifth Third Bank)
1.51%, 07/01/24(b)(c) -- VMIG-1 4,500 4,500,000
- -------------------------------------------------------------------------------------------
Orland Hills (City of); Multi-Family Housing
VRD Series 1995 A RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 12/01/04(b)(c) A-1 -- 1,470 1,470,000
===========================================================================================
415,763,000
===========================================================================================
</Table>
F-13
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
INDIANA-3.08%
ABN AMRO Munitops Ctfs. Trust (Township of
Wayne, County of Marion School Building
Corp.); Multi-State Non-AMT VRD Series
2003-27 RB (Acquired 11/12/03; Cost
$13,795,000)
1.76%, 07/15/11(c)(d)(e) -- VMIG-1 $13,795 $ 13,795,000
- -------------------------------------------------------------------------------------------
Brownsburg (City of) Independent School
Building Corp. No. 2;
First Mortgage Series 1995 RB
5.95%, 02/01/05(g)(l) AAA Aaa 1,700 1,761,041
- -------------------------------------------------------------------------------------------
First Union MERLOTs (County of Porter Jail
Building Corp.);
VRD Series 2001 A58 RB (Acquired 11/12/03;
Cost $9,415,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 9,415 9,415,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Bond Bank (Advanced
Program Notes); Series 2004 A RN
2.00%, 01/25/05 SP-1+ MIG-1 18,500 18,551,692
- -------------------------------------------------------------------------------------------
Indiana (State of) Bond Bank (Pike Township
Metropolitan School District); Series 1995
A RB
5.80%, 02/01/05(g)(l) AAA Aaa 2,750 2,821,138
- -------------------------------------------------------------------------------------------
Indiana (State of) Development Finance
Authority (Indiana Museum of Art);
Educational Facilities VRD Series 2004 RB
(LOC-JPMorgan Chase Bank)
1.70%, 02/01/39(b)(c) -- VMIG-1 3,000 3,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Educational Facilities
Authority
(Wabash College Project); Educational
Facilities VRD Series 2003 RB (LOC-JPMorgan
Chase Bank)
1.70%, 12/01/23(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Community Hospitals Project); VRD Series
2000 A RB
(LOC-Bank of America N.A.)
1.70%, 07/01/28(b)(c) A-1+ -- 9,815 9,815,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority (Community Mental
Health & Rehabilitation); VRD Series 1990
RB
(LOC-ABN AMRO Bank N.V.)
1.72%, 11/01/20(b)(c) A-1 -- 2,040 2,040,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Deaconess Hospital); VRD Series 2004 B RB
(LOC-Fifth Third Bank)
1.51%, 01/01/29(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Fayette Memorial Hospital Association);
VRD Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.77%, 10/01/32(b)(m) A-1+ -- 3,100 3,100,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Golden Years Homestead); VRD Series 2002 A
RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 06/01/25(b)(c) A-1+ -- 6,500 6,500,000
- -------------------------------------------------------------------------------------------
</Table>
F-14
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
INDIANA-(CONTINUED)
Indiana (State of) Health Facilities
Financing Authority
(Margaret Mary Community Hospital); VRD
Series 2004 A RB
(LOC-Fifth Third Bank)
1.77%, 12/01/29(b)(m) A-1+ -- $ 5,000 $ 5,000,000
- -------------------------------------------------------------------------------------------
Kokomo (City of) Hospital Authority (St.
Joseph's Hospital Center); Refunding
Hospital Series 1993 RB
6.35%, 08/15/05(g)(l) AAA Aaa 3,000 3,118,888
- -------------------------------------------------------------------------------------------
Monroe (County of) Hospital Authority;
Refunding VRD Hospital Series 1999 RB
1.69%, 05/01/11(c)(f) -- VMIG-1 3,900 3,900,000
===========================================================================================
89,817,759
===========================================================================================
IOWA-1.78%
Iowa (State of) Finance Authority Retirement
Community
(Deerfield Retirement Community); VRD
Series 2003 A RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 12/01/33(b)(c) A-1 -- 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Iowa (State of) Higher Education Loan
Authority
(Graceland Private College); VRD Series
2003 RB
(LOC-Bank of America N.A.)
1.75%, 02/01/33(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Iowa (State of) School Corps.; School Cash
Anticipation Program Series 2004 A Wts.
Ctfs.
3.00%, 06/30/05(f) -- MIG-1 10,000 10,103,360
- -------------------------------------------------------------------------------------------
Series 2004 B Wts. Ctfs.
2.00%, 01/28/05(f) -- MIG-1 18,000 18,045,776
- -------------------------------------------------------------------------------------------
Iowa City (City of) (ACT, Inc.); VRD Series
2001 RB
1.87%, 04/01/32(m) A-1+ -- 6,815 6,815,000
===========================================================================================
51,964,136
===========================================================================================
KANSAS-1.14%
Eagle Tax Exempt Trust (County of Wyandotte
Unified Government Utility System); VRD
Series 2004-0038 Class A COP (Acquired
09/08/04; Cost $5,000,000)
1.75%, 09/01/21(c)(d)(e) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Leawood (City of); Unlimited Tax Temporary
Notes Series 2004-2 GO
3.00%, 10/01/05 -- MIG-1 14,000 14,182,401
- -------------------------------------------------------------------------------------------
Lenexa (City of) Health Care Facilities
(Lakeview Village Inc.);
VRD Series 2002 B RB (LOC-ABN AMRO Bank
N.V.)
1.72%, 05/15/32(b)(c) A-1 -- 7,500 7,500,000
- -------------------------------------------------------------------------------------------
Olathe (City of) Recreational Facilities
(YMCA of Greater Kansas City Project); VRD
Series 2002 B RB (LOC-Bank of America N.A.)
1.75%, 11/01/18(b)(c) -- VMIG-1 3,100 3,100,000
- -------------------------------------------------------------------------------------------
</Table>
F-15
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
KANSAS-(CONTINUED)
Wichita (City of) Recreational Facilities
(YMCA of Wichita Project); VRD Series 1998
XI RB (LOC-Bank of America N.A.)
(Acquired 02/15/01; Cost $3,500,000)
1.75%, 08/01/09(b)(c)(d) A-1+ -- $ 3,500 $ 3,500,000
===========================================================================================
33,282,401
===========================================================================================
KENTUCKY-1.47%
Kentucky (State of) Asset/Liability
Commission;
General Funding Series 2004 A TRAN
3.00%, 06/29/05 SP-1+ MIG-1 15,000 15,159,010
- -------------------------------------------------------------------------------------------
Kentucky (State of) Area Developing Districts
Financing Trust
(Weekly Acquisition-Ewing); Lease Program
VRD Series 2000 RB (LOC-Wachovia Bank N.A.)
1.79%, 06/01/33(b)(c) A-1 -- 5,910 5,910,000
- -------------------------------------------------------------------------------------------
Newport (City of) Kentucky League of Cities
Funding Trust; Lease Program VRD Series
2002 RB (LOC-U.S. Bank N.A.)
1.53%, 04/01/32(b)(c) -- VMIG-1 20,000 20,000,000
- -------------------------------------------------------------------------------------------
Williamsburg (City of) Educational Building
(Cumberland Project); Refunding &
Improvement VRD Series 2002 RB
(LOC-Fifth Third Bank)
1.51%, 09/01/32(b)(c) A-1+ -- 1,790 1,790,000
===========================================================================================
42,859,010
===========================================================================================
LOUISIANA-0.95%
Eagle Tax Exempt Trust (City of New Orleans);
VRD Series 2000-1801 COP (Acquired
10/10/00; Cost $6,000,000)
1.75%, 12/01/21(c)(d)(e) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Louisiana (State of) Offshore Terminal
Authority (Loop LLC Project); Refunding
Deepwater Port Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.69%, 10/01/19(b)(c) A-1+ VMIG-1 16,400 16,400,000
- -------------------------------------------------------------------------------------------
Louisiana (State of) Public Facilities
Authority (Glen Retirement System Project);
VRD Series 2001 RB (LOC-AmSouth Bank)
(Acquired 08/15/01; Cost $3,380,000)
1.84%, 08/01/16(b)(c)(d) -- VMIG-1 3,380 3,380,000
- -------------------------------------------------------------------------------------------
Louisiana (State of); Unlimited Tax Series
1998 B GO
5.50%, 04/15/05(f) AAA Aaa 1,775 1,815,232
===========================================================================================
27,595,232
===========================================================================================
MAINE-0.29%
Maine (State of) Housing Authority; Mortgage
Purchase VRD Series 2003 E-1 RB
1.73%, 11/15/30(c)(f) A-1+ VMIG-1 8,585 8,585,000
===========================================================================================
</Table>
F-16
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MARYLAND-0.96%
Anne Arundel (County of); Unlimited Tax
Series 2002 GO
4.25%, 03/01/05 AA+ Aa1 $ 1,740 $ 1,762,823
- -------------------------------------------------------------------------------------------
Frederick (County of) Retirement Community
(Buckingham's Choice Inc. Project); VRD
Series 1997 C RB
(LOC-Branch Banking & Trust)
1.75%, 01/01/27(b)(c) A-1 -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Hyattsville (City of) (Safeway Inc.
Projects); Refunding VRD Series 1991 IDR
(LOC-Deutsche Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1 -- 740 740,000
- -------------------------------------------------------------------------------------------
Maryland (State of) Economic Development
Corp.
(YMCA of Central Maryland Inc. Project);
VRD Series 2003 RB
(LOC-Branch Banking & Trust)
1.72%, 04/01/28(b)(c) -- VMIG-1 3,800 3,800,000
- -------------------------------------------------------------------------------------------
Maryland (State of) Health & Higher
Educational Facilities Authority (Pooled
Loan Program); VRD Series 1994 D RB
(LOC-Bank of America N.A.) (Acquired
07/01/04; Cost $11,900,000)
1.70%, 01/01/29(b)(c)(d) A-1+ -- 11,900 11,900,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Maryland Health & Higher
Educational Facilities Authority);
VRD Floating Rate Trust Ctfs. Series
2003-829 RB
(Acquired 06/19/03; Cost $3,800,000)
1.73%, 08/15/38(c)(d)(e) -- VMIG-1 3,800 3,800,000
===========================================================================================
28,002,823
===========================================================================================
MASSACHUSETTS-0.99%
Billerica (City of); Limited Tax Series 2004
BAN GO
2.00%, 01/07/05 SP-1+ MIG-1 18,000 18,042,016
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Development Finance
Agency
(Briarwood Retirement); Series 2004 A RB
(LOC-Sovereign Bank, Comerica Bank)
1.68%, 01/01/35(b)(c) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Housing Finance
Agency;
Housing VRD Series 2003 F RB
1.70%, 12/01/37(c)(f) A-1+ VMIG-1 4,200 4,200,000
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Water Resources
Authority;
Series 1993 C RB
5.25%, 12/01/04(g)(l) NRR Aaa 1,460 1,499,158
===========================================================================================
28,741,174
===========================================================================================
MICHIGAN-3.41%
Dearborn (City of) Economic Development Corp.
(Henry Ford Village Inc. Project); VRD
Limited Tax Series 1998 IDR (LOC-Comerica
Bank)
1.74%, 10/01/23(b)(c)(o) -- -- 8,600 8,600,000
- -------------------------------------------------------------------------------------------
</Table>
F-17
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Eagle Tax Exempt Trust (City of Detroit
School District);
VRD Unlimited Tax Series 2002-6014 Class A
GO
(Acquired 11/06/02; Cost $7,105,000)
1.75%, 05/01/32(c)(d)(e) A-1+ -- $ 7,105 $ 7,105,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Detroit Sewage
Disposal System);
VRD Series 2001 A112 RB
(Acquired 10/31/01; Cost $4,910,000)
1.74%, 07/01/32(c)(d)(e) -- VMIG-1 4,910 4,910,000
- -------------------------------------------------------------------------------------------
VRD Series 2003 B41 RB
(Acquired 07/09/03; Cost $6,770,000)
1.74%, 07/01/26(c)(d)(e) -- VMIG-1 6,770 6,770,000
- -------------------------------------------------------------------------------------------
First Union MERLOTS (City of Detroit Water
Supply System);
VRD Series 1999 D RB (Acquired 01/21/00;
Cost $10,000,000)
1.74%, 07/01/29(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Michigan
Hospital Finance Authority); VRD Series
1997 X RB
(Acquired 12/12/03; Cost $15,000,000)
1.74%, 08/15/24(c)(d)(e) -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Kalamazoo (County of) Economic Development
Corp. (Heritage Community Project);
Refunding VRD Limited Tax Series 2004 RB
(LOC-Fifth Third Bank)
1.69%, 05/15/17(b)(c) A-1+ -- 5,405 5,405,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Higher Educational
Facilities Authority
(Hope College); Refunding VRD Limited Tax
Series 2004 RB
(LOC-JPMorgan Chase Bank)
1.73%, 04/01/34(b)(c) A-1 -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Hospital Finance
Authority
(Holland Community Hospital); VRD Series
2004 B RB
(LOC-JPMorgan Chase Bank)
1.73%, 01/01/34(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Municipal Bond Authority;
Series 2004 B-2 RN (LOC-JPMorgan Chase
Bank)
3.00%, 08/23/05(b) SP-1+ -- 15,000 15,188,557
- -------------------------------------------------------------------------------------------
Michigan (State of) Strategic Fund (Van Andel
Research Institute Project); VRD Limited
Tax Series 1997 RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 11/01/27(b)(c) A-1 -- 12,800 12,800,000
- -------------------------------------------------------------------------------------------
Oakland (County of) Economic Development
Corp. (Rochester College Project); VRD
Limited Obligation Series 2001 RB
(LOC-JPMorgan Chase Bank)
1.80%, 08/01/21(b)(c) -- VMIG-1 1,848 1,848,000
- -------------------------------------------------------------------------------------------
Southfield (City of) (Lawrence Tech
University Project);
Economic Development VRD Series 2001 RB
(LOC-JPMorgan Chase Bank)
1.70%, 10/01/31(b)(c) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-18
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Troy (City of) School District; Refunding
School Building & Site Unlimited Tax Series
2004 GO
3.00%, 05/01/05 AA+ Aa1 $ 1,805 $ 1,821,650
===========================================================================================
99,448,207
===========================================================================================
MINNESOTA-4.83%
Golden Valley (City of) (Unicare Homes Inc.
Project);
VRD Series 1984 IDR (LOC-ABN AMRO Bank
N.V.)
1.67%, 09/01/14(b)(c) A-1+ -- 4,400 4,400,000
- -------------------------------------------------------------------------------------------
J.P. Morgan PUTTERs (State of Minnesota
Public Facilities Authority); VRD Drinking
Water Series 2002-319 COP
(Acquired 07/31/03; Cost $14,030,000)
1.71%, 03/01/21(c)(d)(e) A-1 -- 14,030 14,030,000
- -------------------------------------------------------------------------------------------
Maple Grove (City of) (Heritage Christian
Academy);
Economic Development VRD Series 2004 RB
(LOC-U.S. Bank N.A.)
1.69%, 07/01/29(b)(c) A-1+ -- 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Minneapolis (City of) (Minnehaha Academy
Project);
VRD Series 2001 RB (LOC-U.S. Bank N.A.)
1.87%, 05/01/26(b)(m)(o) -- -- 2,500 2,500,000
- -------------------------------------------------------------------------------------------
Minneapolis-St. Paul (Cities of) Metropolitan
Council of Minnesota; Unlimited Tax Series
2002 D GO
5.00%, 02/01/05 AAA Aaa 1,190 1,205,464
- -------------------------------------------------------------------------------------------
Minnesota (State of); Refunding Unlimited Tax
Series 2003 GO
2.00%, 08/01/05 AAA Aa1 2,240 2,250,153
- -------------------------------------------------------------------------------------------
Rochester (City of) Health Care Facilities
(Mayo Foundation); Commercial Paper Notes,
Series 2000 A
1.15%, 10/12/04 A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Series 2000 B
1.15%, 11/09/04 A-1+ -- 20,500 20,500,000
- -------------------------------------------------------------------------------------------
Series 2000 C
1.40%, 10/14/04 A-1+ -- 33,500 33,500,000
- -------------------------------------------------------------------------------------------
Series 2001 A
1.13%, 10/12/04 -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Series 2001 B
1.13%, 10/12/04 -- VMIG-1 10,600 10,600,000
- -------------------------------------------------------------------------------------------
Series 2001 C
1.40%, 10/14/04 -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Adjustable Tender Series 1998 F
1.15%, 10/12/04 A-1+ -- 8,000 8,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-19
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MINNESOTA-(CONTINUED)
St. Paul (City of) Housing & Redevelopment
Authority
(Science Museum of Minnesota); VRD Series
1997 A RB
(LOC-U.S. Bank N.A.)
1.72%, 05/01/27(b)(c) -- VMIG-1 $16,260 $ 16,260,000
===========================================================================================
140,745,617
===========================================================================================
MISSISSIPPI-2.50%
ABN AMRO Munitops Ctfs. Trust (State of
Mississippi Development Board-Jackson Water
& Sewer); Multi-State Non-AMT
VRD Series 2002-22 Ctfs. (Acquired
09/10/03; Cost $9,995,000)
1.76%, 09/01/10(c)(d)(e) -- VMIG-1 9,995 9,995,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of
Mississippi);
VRD Unlimited Tax Series 2002-6018 Class A
COP
(Acquired 11/20/02; Cost $3,200,000)
1.75%, 11/01/22(c)(d)(e) A-1+ -- 3,200 3,200,000
- -------------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Jackson Medical Mall); VRD Series 2000 A
RB (LOC-JPMorgan Chase Bank)
1.70%, 11/01/18(b)(c) A-1 -- 5,300 5,300,000
- -------------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Mississippi College Project); VRD Series
2003 RB
(LOC-AmSouth Bank) (Acquired 07/17/03; Cost
$9,600,000)
1.84%, 07/01/23(b)(c)(d) -- VMIG-1 9,600 9,600,000
- -------------------------------------------------------------------------------------------
Perry (County of) (Leaf River Forest Products
Project); Refunding VRD Series 2002 PCR
(LOC-Citibank N.A.)
1.72%, 02/01/22(b)(c) A-1+ -- 36,500 36,500,000
- -------------------------------------------------------------------------------------------
University of Mississippi Educational
Building Corp.
(Campus Improvements Project); VRD Series
2000 RB
1.74%, 10/01/20(c)(f) -- VMIG-1 8,235 8,235,000
===========================================================================================
72,830,000
===========================================================================================
MISSOURI-0.96%
Missouri (State of) Development Finance Board
(Center of Creative Arts Project); Cultural
Facilities VRD Series 2004 RB
(LOC-National City Bank)
1.74%, 07/01/24(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority (Lutheran Church);
Educational Facilities VRD Series 2004 A RB
(LOC-Bank of America N.A.)
1.74%, 07/01/29(b)(m) -- VMIG-1 5,740 5,740,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority (Southwest Baptist
University Project); Educational Facilities
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.77%, 10/01/33(b)(m) A-1+ -- 5,950 5,950,000
- -------------------------------------------------------------------------------------------
</Table>
F-20
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MISSOURI-(CONTINUED)
Missouri (State of) Health & Educational
Facilities Authority (Washington University
Project); Educational Facilities VRD Series
1985 B RB
1.73%, 09/01/10(c) A-1+ VMIG-1 $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------------------
VRD Series 1996 C RB
1.70%, 09/01/30(m) A-1+ VMIG-1 1,300 1,300,000
- -------------------------------------------------------------------------------------------
VRD Series 1996 D RB
1.70%, 09/01/30(m) A-1+ VMIG-1 1,500 1,500,000
- -------------------------------------------------------------------------------------------
VRD Series 2000 C RB
1.70%, 03/01/40(m) A-1+ VMIG-1 4,300 4,300,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority
(Cox Health System); Refunding VRD Series
1997 RB
1.70%, 06/01/15(f)(m) A-1+ VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
St. Louis (County of) Industrial Development
Authority
(Friendship Village of South County); VRD
Series 2002 B IDR
(LOC-ABN AMRO Bank N.V.)
1.67%, 09/01/22(b)(c) A-1 -- 2,915 2,915,000
===========================================================================================
28,005,000
===========================================================================================
MONTANA-0.39%
Montana (State of) Facility Finance Authority
(Mission Ridge Project); VRD Series 2002 RB
(LOC-ABN AMRO Bank N.V.)
1.72%, 08/01/27(b)(c)(i) -- -- 11,365 11,365,000
===========================================================================================
NEBRASKA-1.51%
Nebhelp Inc.; Multi-Mode VRD
Series 1985 A RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 5,995 5,995,000
- -------------------------------------------------------------------------------------------
Series 1985 B RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 3,590 3,590,000
- -------------------------------------------------------------------------------------------
Series 1985 D RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 5,865 5,865,000
- -------------------------------------------------------------------------------------------
Series 1985 E RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 28,635 28,635,000
===========================================================================================
44,085,000
===========================================================================================
NEVADA-0.88%
ABN AMRO Munitops Ctfs. Trust (County of
Washoe); Refunding VRD Limited Tax Series
2001-24 Single Asset Trust Ctfs. (Acquired
06/21/01; Cost $5,500,000)
1.75%, 07/01/09(c)(d)(e) -- VMIG-1 5,500 5,500,000
- -------------------------------------------------------------------------------------------
Carson (City of) (Carson-Tahoe Hospital
Project);
Hospital VRD Series 2003 B RB (LOC-U.S.
Bank N.A.)
1.69%, 09/01/33(b)(c) A-1+ -- 18,000 18,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-21
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
NEVADA-(CONTINUED)
Clark (County of); Refunding Limited Tax
Series 1998 B GO
5.25%, 11/01/04 AA Aa2 $ 2,245 $ 2,252,753
===========================================================================================
25,752,753
===========================================================================================
NEW HAMPSHIRE-0.45%
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(New Hampshire Higher Educational & Health
Facilities Authority);
Refunding VRD
Series 2003-772 RB
(Acquired 01/22/03; Cost $5,475,000)
1.75%, 01/01/17(c)(d)(e) A-1 -- 5,475 5,475,000
- -------------------------------------------------------------------------------------------
Series 2003-866 RB
(Acquired 10/23/03; Cost $7,485,000)
1.75%, 08/15/21(c)(d)(e) A-1 -- 7,485 7,485,000
===========================================================================================
12,960,000
===========================================================================================
NEW MEXICO-0.05%
Albuquerque (City of) Educational Facilities
(Albuquerque Academy Project); VRD Series
2002 RB
1.73%, 10/15/16(c) AA VMIG-1 1,500 1,500,000
===========================================================================================
NEW YORK-0.34%
ABN AMRO Munitops Ctfs. Trust (Triborough
Bridge & Tunnel Authority); Non-AMT VRD
Series 2002-31 Ctfs.
(Acquired 03/24/04; Cost $10,000,000)
1.70%, 11/15/10(c)(d)(e) -- VMIG-1 10,000 10,000,000
===========================================================================================
NORTH CAROLINA-1.88%
Mecklenburg (County of); Public Improvement
Unlimited Tax Series 1998 B GO
4.40%, 02/01/05 AAA Aaa 13,000 13,130,922
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Barton College); Educational Facilities
VRD Series 2004 RB
(LOC-Branch Banking & Trust)
1.72%, 07/01/19(b)(c) -- VMIG-1 5,750 5,750,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Elon College); VRD Series 2001 A RB
(LOC-Bank of America N.A.)
1.68%, 01/01/14(b)(c)(i) -- -- 4,500 4,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Goodwill Community Foundation Project);
VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.70%, 04/01/22(b)(c)(i) -- -- 2,165 2,165,000
- -------------------------------------------------------------------------------------------
</Table>
F-22
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
NORTH CAROLINA-(CONTINUED)
North Carolina (State of) Capital Facilities
Finance Agency (Thompson Children's Home);
Educational Facilities VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.70%, 12/01/20(b)(c)(i) -- -- $ 3,070 $ 3,070,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency (University of North
Carolina at Pembroke University
Foundation); Student Housing VRD Series
2001 A RB
(LOC-Wachovia Bank N.A.)
1.82%, 07/01/31(b)(c) -- VMIG-1 11,240 11,240,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Wolfpack Club Project); VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.70%, 04/01/12(b)(c)(i) -- -- 9,500 9,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission; Refunding First Mortgage Health
Care Facilities VRD Series 2004 C RB
(LOC-SunTrust Bank)
1.72%, 11/01/27(b)(c) -- VMIG-1 3,500 3,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of); Public Improvement
Unlimited Tax Series 2002 A GO
5.00%, 03/01/05 AAA Aa1 1,865 1,892,943
===========================================================================================
54,748,865
===========================================================================================
OHIO-4.63%
Akron (City of) (Community Learning Centers);
Income Tax Revenue Series 2004 B RB
2.00%, 12/01/04(f) AAA Aaa 1,000 1,001,488
- -------------------------------------------------------------------------------------------
Akron (City of) Bath & Copley (Townships of)
Joint Township Hospital District (Summa
Health Systems); VRD Series 2004 B RB
(LOC-JPMorgan Chase Bank)
1.71%, 11/01/34(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Allen (County of); Refunding Limited Tax
Series 2002 GO
1.70%, 12/01/04(f) -- Aaa 1,000 1,001,075
- -------------------------------------------------------------------------------------------
Butler (County of) Health Care Facilities
(Lifesphere Project); Refunding &
Improvement VRD Series 2002 RB
(LOC-U.S. Bank N.A.)
1.70%, 05/01/27(b)(c) A-1+ -- 8,500 8,500,000
- -------------------------------------------------------------------------------------------
Cambridge (City of) Hospital Facilities
(Regional Medical Center Project);
Refunding & Improvement VRD Series 2001 RB
(LOC-National City Bank)
1.73%, 12/01/21(b)(c) -- VMIG-1 11,515 11,515,000
- -------------------------------------------------------------------------------------------
Centerville (City of) (Bethany Lutheran
Village Project);
Health Care VRD Series 1994 RB
(LOC-National City Bank)
1.73%, 11/01/13(b)(c) -- VMIG-1 2,985 2,985,000
- -------------------------------------------------------------------------------------------
</Table>
F-23
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OHIO-(CONTINUED)
Cincinnati (City of) & Hamilton (County of)
Port Authority (Kenwood Office Association
Project); Economic Development VRD Series
1985 RB (LOC-Fifth Third Bank)
1.77%, 09/01/25(b)(m) A-1+ -- $ 1,185 $ 1,185,000
- -------------------------------------------------------------------------------------------
Cleveland Heights (City of); Limited Tax
Series 2004 BAN GO
2.00%, 08/18/05(o) -- -- 3,234 3,245,177
- -------------------------------------------------------------------------------------------
Cuyahoga (County of) Continuing Care
Facilities; Refunding VRD Series 1999 RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 02/01/29(b)(c) A-1+ -- 15,985 15,985,000
- -------------------------------------------------------------------------------------------
Cuyahoga (County of) Health Care Facilities
(Judson Retirement Community); Refunding
VRD Series 2000 RB
(LOC-National City Bank)
1.72%, 11/15/19(b)(c) A-1 -- 800 800,000
- -------------------------------------------------------------------------------------------
Cuyahoga Falls (City of); Limited Tax Series
2003 Notes
2.00%, 12/16/04 -- MIG-1 7,000 7,009,153
- -------------------------------------------------------------------------------------------
Hamilton (County of) Economic Development
(St. Xavier High School Project); VRD
Series 2003 RB
(LOC-Fifth Third Bank)
1.51%, 04/01/28(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Lake (County of); Limited Tax Series 2004 BAN
GO
2.00%, 04/14/05(o) -- -- 3,000 3,013,944
- -------------------------------------------------------------------------------------------
Lakewood (City of) (St. Edward High School
Project);
Educational Facilities VRD Series 2000 RB
(LOC-Fifth Third Bank)
1.69%, 08/01/30(b)(c) -- VMIG-1 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Lorain (County of) (Elyria United Methodist
Village);
Refunding Hospital VRD Series 1996 B RB
(LOC-JPMorgan Chase Bank)
1.71%, 06/01/12(b)(c) A-1 VMIG-1 4,685 4,685,000
- -------------------------------------------------------------------------------------------
Lorain (County of) (EMH Regional Medical
Center Project);
Hospital Facilities VRD Series 2001 RB
(LOC-National City Bank)
1.76%, 05/01/26(b)(c)(o) -- -- 15,170 15,170,000
- -------------------------------------------------------------------------------------------
Lorain (County of) Independent Living
Facilities
(Elyria United Methodist Project); VRD
Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.71%, 06/01/25(b)(c) A-1+ -- 9,125 9,125,000
- -------------------------------------------------------------------------------------------
Mahoning (County of) Hospital Facilities
(Forum Health Obligation Group);
VRD Series 1997 B RB
1.70%, 12/01/28(c)(f) A-1+ VMIG-1 10,500 10,500,000
- -------------------------------------------------------------------------------------------
Series 2002 B RB (LOC-Fifth Third Bank)
1.73%, 12/01/27(b)(c) -- VMIG-1 7,200 7,200,000
- -------------------------------------------------------------------------------------------
</Table>
F-24
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OHIO-(CONTINUED)
Marion (County of) (Pooled Lease Program);
Hospital Improvement VRD Series 1990 RB
(LOC-JPMorgan Chase Bank)
1.72%, 08/01/20(b)(c) A-1 -- $ 4,535 $ 4,535,000
- -------------------------------------------------------------------------------------------
Middleburg Heights (City of) (Southwest
General Health);
Hospital Improvement Series 1997 RB
(LOC-Fifth Third Bank)
1.73%, 08/15/22(b)(c) A-1+ -- 5,405 5,405,000
- -------------------------------------------------------------------------------------------
Montgomery (County of) (St. Vincent DePaul
Society);
Limited Obligation VRD Series 1996 RB
(LOC-National City Bank)
1.73%, 12/01/10(b)(c) A-1 -- 1,900 1,900,000
- -------------------------------------------------------------------------------------------
Portage (County of) (Robinson Memorial
Hospital);
Hospital VRD Series 2002 RB (LOC-JPMorgan
Chase Bank)
1.73%, 05/01/17(b)(c) -- VMIG-1 6,255 6,255,000
- -------------------------------------------------------------------------------------------
Solon (City of); Unlimited Tax Series 2003
BAN GO
2.00%, 12/09/04(o) -- -- 2,800 2,804,536
- -------------------------------------------------------------------------------------------
Twinsburg (City of) School District;
Refunding Unlimited Tax Series 2004 GO
2.00%, 12/01/04(f) -- Aaa 1,800 1,802,977
===========================================================================================
134,923,350
===========================================================================================
OKLAHOMA-1.79%
Mustang (City of) Improvement Authority;
Refunding Series 1995 RB
5.38%, 12/01/04(g)(l) AAA Aaa 3,135 3,188,215
- -------------------------------------------------------------------------------------------
Oklahoma (County of) Finance Authority
(Oxford Oaks Apartments Projects);
Refunding Multi-Family Housing VRD Series
2000 RB
(CEP-Federal National Mortgage Association)
1.71%, 07/15/30(c) A-1+ -- 27,695 27,695,000
- -------------------------------------------------------------------------------------------
Oklahoma (State of) Development Finance
Authority
(Capitol Dome Project); VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.79%, 06/01/11(b)(c) A-1+ -- 3,785 3,785,000
- -------------------------------------------------------------------------------------------
Oklahoma (State of) Water Resource Board;
State Loan Program VRD Series 2003 A RB
0.98%, 10/01/04(g)(h) A-1+ -- 14,935 14,935,000
- -------------------------------------------------------------------------------------------
Tulsa (County of) Industrial Authority;
Capital Improvements Series 2003 B RB
4.00%, 05/15/05 AA -- 2,500 2,537,739
===========================================================================================
52,140,954
===========================================================================================
</Table>
F-25
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OREGON-1.15%
Oregon (State of) Health, Housing,
Educational & Cultural Facilities Authority
(Quatama Crossing LLC Housing Project);
VRD Series 1998 RB (LOC-U.S. Bank N.A.)
1.74%, 01/01/31(b)(c) -- Aa2 $ 7,430 $ 7,430,000
- -------------------------------------------------------------------------------------------
Oregon (State of); Unlimited Tax Series 2003
TAN GO
2.25%, 11/15/04 SP-1+ MIG-1 25,000 25,030,450
- -------------------------------------------------------------------------------------------
Salem (City of) Water & Sewer; Refunding
Series 2004 RB
3.00%, 05/01/05(f) AAA Aaa 1,175 1,184,588
===========================================================================================
33,645,038
===========================================================================================
PENNSYLVANIA-2.78%
ABN AMRO Munitops Ctfs. Trust (State of
Pennsylvania Public School Building
Authority); Non-AMT VRD
Series 2001-30 Ctfs. (Acquired 10/31/02;
Cost $5,000,000)
1.74%, 09/01/09(c)(d)(e) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Series 2003-24 Ctfs. (Acquired 03/08/04;
Cost $7,000,000)
1.74%, 06/01/11(c)(d)(e) -- VMIG-1 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Allegheny (County of) Hospital Development
Authority (ACES-Presbyterian University
Hospital); VRD Series 1988 B1 RB
(LOC-JPMorgan Chase Bank)
1.70%, 03/01/18(b)(c) -- VMIG-1 2,085 2,085,000
- -------------------------------------------------------------------------------------------
Allegheny (County of) Industrial Development
Authority
(Carnegie Museums of Pittsburgh); VRD
Series 2002 IDR
(LOC-Royal Bank of Scotland)
1.70%, 08/01/32(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Altoona (City of) Authority; Water Series
1994 A RB
6.50%, 11/01/04(g)(l) AAA NRR 1,700 1,741,627
- -------------------------------------------------------------------------------------------
Berks (County of) Industrial Development
Authority
(Lutheran Services); Health Care VRD Series
1998 A IDR
1.69%, 01/01/28(c)(f) -- VMIG-1 9,588 9,588,000
- -------------------------------------------------------------------------------------------
Chartiers Valley (Community of) Industrial &
Commercial Development Authority (Asbury
Villas Project);
VRD Series 2000 B IDR (LOC-ABN AMRO Bank
N.V.)
1.72%, 12/01/30(b)(c) A-1 -- 3,000 3,000,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Delaware Valley
Regional);
VRD Series 2001-3801 Class A COP
(Acquired 06/04/01; Cost $8,900,000)
1.75%, 08/01/28(c)(d)(e) A-1+ -- 8,900 8,900,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Scranton &
County of Lackawanna Health & Welfare
Authority); VRD Series 2002 A-18 RB
(Acquired 03/22/02; Cost $2,860,000)
1.74%, 03/01/15(c)(d)(e) -- VMIG-1 2,860 2,860,000
- -------------------------------------------------------------------------------------------
</Table>
F-26
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
PENNSYLVANIA-(CONTINUED)
Franklin (County of) Industrial Development
Authority (Chambersburg Hospital
Obligation);
Health Care VRD Series 2000 IDR
1.79%, 12/01/24(c)(f) A-1 Aaa $ 3,575 $ 3,575,000
- -------------------------------------------------------------------------------------------
Geisinger Authority Health System (Geisinger
Health System Foundation); Refunding VRD
Series 2000 RB
1.71%, 08/01/28(m) A-1+ VMIG-1 25,950 25,950,000
- -------------------------------------------------------------------------------------------
Lehigh (County of) Industrial Development
Authority
(Allegheny Electric Coop. Inc.);
VRD Series 1984 PCR (LOC-Rabobank
Nederland)
1.30%, 10/01/14(b)(j) A-1+ -- 7,180 7,180,000
- -------------------------------------------------------------------------------------------
Refunding VRD Series 1984 PCR (LOC-Rabobank
Nederland)
1.30%, 06/01/14(b)(j) A-1+ -- 1,030 1,030,000
- -------------------------------------------------------------------------------------------
Philadelphia (City of) Industrial Development
Authority
(Girard Estate Aramark Project); VRD Series
2002 IDR
(LOC-JP Morgan Chase Bank)
1.70%, 06/01/32(b)(c) A-1+ -- 1,000 1,000,000
===========================================================================================
80,909,627
===========================================================================================
SOUTH CAROLINA-2.07%
Cherokee (County of) (Newark Electronics
Division); Industrial VRD Series 1985 RB
(LOC-ABN AMRO Bank N.V.)
1.71%, 12/01/15(b)(c) A-1 -- 6,500 6,500,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of South
Carolina Public Service Authority); VRD
Series 2000-4001 Class A COP
(Acquired 09/08/00; Cost $10,100,000)
1.75%, 01/01/22(c)(d)(e) A-1+ -- 10,100 10,100,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of South Carolina
Public Service Authority); VRD Series 2000
L RB
(Acquired 02/25/00; Cost $11,590,000)
1.74%, 01/01/22(c)(d)(e) -- VMIG-1 11,590 11,590,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of South Carolina Transportation
Infrastructure Bank); Floating Rate Trust
Ctfs. VRD Series 2002-728 RB (Acquired
11/13/02; Cost $7,185,000)
1.73%, 10/01/22(c)(d)(e) -- VMIG-1 7,185 7,185,000
- -------------------------------------------------------------------------------------------
Oconee (County of) (Duke); Refunding VRD
Series 1993 PCR (LOC-JPMorgan Chase Bank)
1.70%, 02/01/17(b)(c) -- P-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Educational
Facilities Authority
for Non-Profit Institutions (The Allen
University Project);
VRD Series 1998 RB (LOC-Bank of America
N.A.)
(Acquired 03/27/01; Cost $2,525,000)
1.75%, 09/01/18(b)(c)(d) A-1+ -- 2,525 2,525,000
- -------------------------------------------------------------------------------------------
</Table>
F-27
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
SOUTH CAROLINA-(CONTINUED)
South Carolina (State of) Educational
Facilities Authority
for Non-Profit Institutions (Morris College
Project);
VRD Series 1997 RB (LOC-Bank of America
N.A.)
(Acquired 07/30/02; Cost $2,100,000)
1.75%, 07/01/17(b)(c)(d) A-1+ -- $ 2,100 $ 2,100,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Carolina Children's
Home Project); VRD Series 2003 RB
(LOC-Branch Banking & Trust)
1.72%, 03/01/23(b)(c) -- VMIG-1 3,335 3,335,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Carolina Piedmont
Foundation Project); VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.75%, 09/01/32(b)(c)(i) -- -- 4,000 4,000,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Catholic Diocese of
South Carolina Project); VRD Series 1998 RB
(LOC-Bank of America N.A.) (Acquired
07/23/02; Cost $2,555,000)
1.75%, 09/01/18(b)(c)(d) A-1+ -- 2,555 2,555,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Presbyterian Home of
South Carolina Project);
VRD Series 2003 A RB (LOC-Wachovia Bank
N.A.)
1.75%, 04/01/20(b)(c) A-1 -- 4,535 4,535,000
===========================================================================================
60,425,000
===========================================================================================
SOUTH DAKOTA-0.11%
South Dakota (State of) Health & Educational
Facilities Authority (University of Sioux
Falls); VRD Series 2001 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 10/01/16(b)(c) A-1+ -- 3,155 3,155,000
===========================================================================================
TENNESSEE-5.46%
Eagle Tax Exempt Trust (City of Chattanooga);
VRD Series 2000-4202 Class A COP (Acquired
10/10/00; Cost $14,040,000)
1.75%, 10/01/27(c)(d)(e) A-1+ -- 14,040 14,040,000
- -------------------------------------------------------------------------------------------
Jackson (City of) Energy Authority; Electric
Systems VRD Series 2003 B RB
1.70%, 11/01/26(c)(f) -- VMIG-1 12,700 12,700,000
- -------------------------------------------------------------------------------------------
Jackson (City of) Health & Educational
Facilities Board (Trinity Christian
Academy); Educational Facilities VRD Series
2002 RB
(LOC-AmSouth Bank)
1.84%, 03/01/22(b)(c) -- VMIG-1 5,400 5,400,000
- -------------------------------------------------------------------------------------------
Knox (County of) Health Educational & Housing
Facility Board (Volunteer Student Housing
LLC Project); Student Housing VRD Series
2002 RB (LOC-Wachovia Bank N.A.)
1.69%, 09/01/34(b)(c) -- VMIG-1 27,020 27,020,000
- -------------------------------------------------------------------------------------------
</Table>
F-28
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TENNESSEE-(CONTINUED)
Memphis (City of); Electric System Sub-Series
2003 A RB
2.00%, 12/01/04 AA- Aa3 $10,000 $ 10,014,023
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(City of Nashville & County of Davidson);
Unlimited Tax Series 2003-871 GO
(Acquired 11/17/03; Cost $4,995,000)
1.73%, 10/15/10(c)(d)(e) -- VMIG-1 4,995 4,995,000
- -------------------------------------------------------------------------------------------
Sevier (County of) Public Building Authority
(Local Government Public Improvement);
VRD Series 1995 A RB
1.72%, 06/01/15(c)(f) AAA VMIG-1 5,230 5,230,000
- -------------------------------------------------------------------------------------------
VRD Series 1995 B-2 RB
1.72%, 06/01/06(c)(f) AAA VMIG-1 1,200 1,200,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 I A-1 RB
1.72%, 06/01/22(c)(f) -- VMIG-1 5,900 5,900,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-1 RB
1.72%, 06/01/21(c)(f) -- VMIG-1 2,100 2,100,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-3 RB
1.72%, 06/01/10(c)(f) -- VMIG-1 1,485 1,485,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-5 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 1,320 1,320,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II F-1 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 1,190 1,190,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II F-5 RB
1.72%, 06/01/27(c)(f) -- VMIG-1 2,265 2,265,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-1 RB
1.72%, 06/01/07(c)(f) -- VMIG-1 14,950 14,950,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-3 RB
1.72%, 06/01/19(c)(f) -- VMIG-1 1,425 1,425,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-4 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 300 300,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III B-2 RB
1.72%, 06/01/19(c)(f) -- VMIG-1 5,650 5,650,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III C-3 RB
1.72%, 06/01/18(c)(f) -- VMIG-1 3,475 3,475,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III C-4 RB
1.72%, 06/01/20(c)(f) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
VRD Series 1999 II A-1 RB
1.72%, 06/01/24(c)(f) -- VMIG-1 6,300 6,300,000
- -------------------------------------------------------------------------------------------
VRD Series 1999 II B-1 RB
1.72%, 06/01/25(c)(f) -- VMIG-1 1,700 1,700,000
- -------------------------------------------------------------------------------------------
</Table>
F-29
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TENNESSEE-(CONTINUED)
Shelby (County of) Health, Educational &
Housing Facilities Board (Briarcrest
Christian School System); Educational
Facilities VRD Series 2002 RB (LOC-SunTrust
Bank)
1.69%, 04/01/22(b)(c) -- VMIG-1 $11,050 $ 11,050,000
- -------------------------------------------------------------------------------------------
Shelby (County of) Health, Educational &
Housing Facilities Board (St. Benedict
Auburndale School); VRD Series 2003 RB
(LOC-AmSouth Bank)
1.74%, 05/01/33(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Tennessee (State of) Local Development
Authority (Community Provider Pooled Loan
Program); Series 1994 RB
6.45%, 10/01/04(g)(l) NRR -- 1,000 1,020,000
- -------------------------------------------------------------------------------------------
Washington (County of) (Capital Outlay
Notes);
Refunding Unlimited Tax Series 2002 GO
4.00%, 02/01/05(f) -- Aaa 1,000 1,009,664
- -------------------------------------------------------------------------------------------
Williamson (County of) Industrial Development
Board (Currey Ingram Academy); Educational
Facilities VRD Series 2003 RB
(LOC-SunTrust Bank)
1.75%, 04/01/23(b)(c) -- VMIG-1 2,500 2,500,000
===========================================================================================
159,238,687
===========================================================================================
TEXAS-11.84%
ABN AMRO Munitops Ctfs. Trust (City of
Leander Independent School District);
Unlimited Multi-State Non-AMT VRD Series
2002-16 Ctfs. (Acquired 08/20/03; Cost
$5,395,000)
1.75%, 08/15/10(c)(d)(e) -- VMIG-1 5,395 5,395,000
- -------------------------------------------------------------------------------------------
Alief (City of) Independent School District;
Unlimited Tax Series 1997 GO (CEP-Texas
Permanent School Fund)
6.60%, 02/15/05 AAA Aaa 1,000 1,020,512
- -------------------------------------------------------------------------------------------
Amarillo (City of) Health Facilities Corp.
(Panhandle Pooled Health Care); VRD Series
1985 ACES RB (LOC-BNP Paribas)
1.75%, 05/31/25(b)(c) -- VMIG-1 4,862 4,862,000
- -------------------------------------------------------------------------------------------
Austin (City of) Water & Wastewater System;
Refunding Series 2002 A RB
5.00%, 11/15/04(f) AAA Aaa 4,000 4,019,072
- -------------------------------------------------------------------------------------------
Austin (City of); Refunding Utility System
Series 1995 RB
5.60%, 05/15/05(g)(l) AAA Aaa 5,000 5,128,791
- -------------------------------------------------------------------------------------------
Austin (City of); Utility System Series 1994
RB
5.75%, 11/15/04(g)(i) AAA Aaa 2,605 2,619,767
- -------------------------------------------------------------------------------------------
Bexar (County of) Health Facilities
Development Corp.
(Air Force Village); VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.69%, 08/15/30(b)(c) A-1+ -- 19,500 19,500,000
- -------------------------------------------------------------------------------------------
</Table>
F-30
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Bexar (County of) Health Facilities
Development Corp.
(Warm Springs); Healthcare System VRD
Series 1997 RB
(LOC-JPMorgan Chase Bank)
1.74%, 09/01/27(b)(c) -- VMIG-1 $ 3,435 $ 3,435,000
- -------------------------------------------------------------------------------------------
Brownsville (City of) Utility Systems;
Refunding Sub. Lien VRD Series 2001 A RB
0.95%, 11/04/04(f)(g)(k) A-1+ VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Dallas (City of) Waterworks & Sewer System;
Refunding Series 2002 A RB
4.00%, 10/01/04 AA+ Aa2 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Dallas (City of); Limited Tax Series 2003 GO
3.50%, 02/15/05 AA+ Aa1 1,500 1,513,855
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Houston
Airport);
VRD Series 2000-4307 COP (Acquired
11/15/00; Cost $15,750,000)
1.75%, 07/01/28(c)(d)(e) A-1+ -- 15,750 15,750,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Houston Water
& Sewer);
VRD Series 1997-4305 Class A COP (Acquired
04/27/99; Cost $14,005,000)
1.75%, 12/01/27(c)(d)(e) A-1+ -- 14,005 14,005,000
- -------------------------------------------------------------------------------------------
VRD Series 2002-6019 Class A COP (Acquired
11/13/02; Cost $8,910,000)
1.75%, 12/01/30(c)(d)(e) A-1+ -- 8,910 8,910,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Harris County Toll
Road);
VRD Series 2001-4305 COP
(Acquired 05/08/01; Cost $7,390,000)
1.75%, 08/01/14(c)(d)(e) A-1+ -- 7,390 7,390,000
- -------------------------------------------------------------------------------------------
VRD Series 2002-6012 Class A COP
(Acquired 11/20/02; Cost $1,580,000)
1.75%, 08/15/30(c)(d)(e) A-1+ -- 1,580 1,580,000
- -------------------------------------------------------------------------------------------
El Paso (County of); Refunding Limited Tax
Series 2002 A GO
3.25%, 02/15/05(f) AAA Aaa 1,040 1,048,302
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Harris County Toll
Road);
VRD Series 2003 B16 RB (Acquired 02/19/03;
Cost $3,015,000)
1.57%, 08/15/25(c)(d)(e) -- VMIG-1 3,015 3,015,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Jefferson County Health
Facilities Development Corp.); VRD Series
2001 A83 RB
(Acquired 11/18/03; Cost $3,570,000)
1.20%, 11/16/04(d)(e)(g)(k)(n) A-1 -- 3,570 3,570,000
- -------------------------------------------------------------------------------------------
Fort Worth (City of); Limited Tax Series 2000
GO Ctfs.
6.25%, 03/01/05(g)(l) NRR NRR 5,000 5,105,817
- -------------------------------------------------------------------------------------------
Garland (City of) Industrial Development
Authority Inc. (Carroll Co. Project); VRD
Series 1984 IDR (LOC-Wells Fargo Bank N.A.)
(Acquired 09/03/03; Cost $2,300,000)
1.74%, 12/01/14(b)(c)(d) -- Aaa 2,300 2,300,000
- -------------------------------------------------------------------------------------------
</Table>
F-31
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Goose Creek (City of) Consolidated
Independent School District; Refunding
Unlimited Tax Series 2002 A GO
(CEP-Texas Permanent School Fund)
4.00%, 02/15/05 AAA Aaa $ 1,520 $ 1,536,322
- -------------------------------------------------------------------------------------------
Grand Prairie (City of) Housing Finance Corp.
(Lincoln Property Co.); Refunding
Multi-Family Housing VRD Series 1993 RB
(CEP-General Electric Corp.)
1.77%, 06/01/10(c) A-1+ -- 2,700 2,700,000
- -------------------------------------------------------------------------------------------
Grapevine (City of) Industrial Development
Corp.
(Southern Air Transport); Refunding Airport
Series 1993 RB
(LOC-JPMorgan Chase Bank)
1.77%, 03/01/10(b)(c) A-1+ -- 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Harris (County of) Cultural Education
Facilities Finance Corp. (Houston Music
Hall Foundation); VRD Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.74%, 06/01/29(b)(c) A-1+ -- 700 700,000
- -------------------------------------------------------------------------------------------
Harris (County of) Hospital District; Sub.
Lien Commercial Paper Series A RN (LOC-Bank
of America N.A.)
1.28%, 11/22/04(b) A-1+ -- 9,451 9,451,000
- -------------------------------------------------------------------------------------------
Harris (County of) Houston Texas Sports
Authority (Rodeo);
Jr. Lein VRD Series 2001 C RB
1.77%, 11/15/30(c)(f) A-1+ VMIG-1 6,400 6,400,000
- -------------------------------------------------------------------------------------------
Harris (County of); Permanent Improvement
Unlimited Tax Series 2003 GO
3.00%, 10/01/04 AA+ Aa1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Harris (County of); Refunding Unlimited Tax
Series 2001 GO
5.00%, 10/01/04 AA+ Aa1 4,970 4,970,000
- -------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corp. (AMOCO Project);
VRD Series 1985 PCR
1.15%, 11/01/04(g)(h) A-1+ P-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corp.
(AMOCO Project-Standard Oil Co.); VRD
Series 1983 PCR
1.40%, 03/01/05(g)(h) A-1+ Aa1 12,775 12,775,000
- -------------------------------------------------------------------------------------------
Houston (City of) Independent School District
(Schoolhouse);
Limited Tax Series 2004 GO
(CEP-Texas Permanent School Fund)
1.62%, 06/09/05(g)(k) A-1+ VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Houston (City of); Commercial Paper Notes
Series 2003 A GO
1.30%, 10/21/04 A-1+ P-1 20,000 20,000,000
- -------------------------------------------------------------------------------------------
1.37%, 11/15/04 A-1+ P-1 24,000 24,000,000
- -------------------------------------------------------------------------------------------
1.38%, 01/25/05 A-1+ P-1 13,400 13,400,000
- -------------------------------------------------------------------------------------------
Mansfield (City of); Refunding Unlimited Tax
VRD Series 2004 GO
2.00%, 02/15/05(f) AAA Aaa 855 857,910
- -------------------------------------------------------------------------------------------
</Table>
F-32
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Merrill Lynch P-Floats (City of Brazosport
Independent School District); Refunding
Unlimited Tax VRD Series 2003 PT-1690 GO
(Acquired 02/20/03; Cost $4,920,000)
1.73%, 08/15/10(c)(d)(e) -- VMIG-1 $ 4,920 $ 4,920,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (County of Harris
Hospital District);
VRD Series 2002 PT-665 RB (Acquired
10/02/02; Cost $5,935,000)
1.73%, 08/15/08(c)(d)(e) A-1+ -- 5,935 5,935,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Texas Affordable Housing Corp.);
Floating Rate Trust Ctfs. VRD Series
2003-780 RB
(Acquired 02/19/03; Cost $1,995,000)
1.73%, 09/01/22(c)(d)(e) -- VMIG-1 1,995 1,995,000
- -------------------------------------------------------------------------------------------
Northside Independent School District;
Refunding VRD Unlimited Tax Series 2003 B
GO (CEP-Texas Permanent School Fund)
1.75%, 08/01/05(g)(k) A-1+ VMIG-1 1,870 1,870,000
- -------------------------------------------------------------------------------------------
Pine Tree Independent School District;
Unlimited Tax Series 1994 GO (CEP-Texas
Permanent School Fund)
5.25%, 02/15/05(g)(k) NRR Aaa 910 923,135
- -------------------------------------------------------------------------------------------
San Antonio (City of) Water & Sewer System;
Commercial Paper Notes Series 2001 A GO
1.15%, 10/21/04 A-1+ P-1 29,900 29,900,000
- -------------------------------------------------------------------------------------------
Sherman (City of) Higher Education Finance
Corp. (Austin College Project); Higher
Education VRD Series 1997 RB
(LOC-Bank of America N.A.)
1.75%, 01/01/18(b)(c) A-1+ -- 12,800 12,800,000
- -------------------------------------------------------------------------------------------
Spring (City of) Independent School District;
Unlimited Tax Series 2004 GO (CEP-Texas
Permanent School Fund)
2.50%, 02/15/05 AAA Aaa 2,195 2,206,356
- -------------------------------------------------------------------------------------------
Texas (State of); Series 2004 TRAN
3.00%, 08/31/05 SP-1+ MIG-1 30,000 30,378,015
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (Southeast Texas Housing
Finance Corp.);
VRD Series 2001 A18 RB (Acquired 11/18/03;
Cost $4,130,000)
1.20%, 11/16/04(d)(e)(g)(k)(n) A-1 -- 4,130 4,130,000
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (University of Texas);
Refunding VRD Series 2003 B14 RB (Acquired
01/29/03; Cost $8,005,000)
1.72%, 08/15/22(c)(d)(e) -- VMIG-1 8,005 8,005,000
===========================================================================================
345,120,854
===========================================================================================
UTAH-1.47%
Davis (County of) Housing Authority (Fox
Creek Apartments); Refunding Multi-Family
Housing VRD Series 1997 A RB
(LOC-JPMorgan Chase Bank)
1.71%, 08/15/27(b)(c) A-1 -- 4,240 4,240,000
- -------------------------------------------------------------------------------------------
Davis (County of); Unlimited Tax Series 2004
TRAN
2.25%, 12/30/04 -- MIG-1 4,000 4,009,763
- -------------------------------------------------------------------------------------------
</Table>
F-33
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
UTAH-(CONTINUED)
First Union MERLOTs (Intermountain Power
Agency);
Power Supply VRD Series 2002 A59 RB
(Acquired 10/23/02; Cost $7,040,000)
1.74%, 07/01/10(c)(d)(e) -- VMIG-1 $ 7,040 $ 7,040,000
- -------------------------------------------------------------------------------------------
Intermountain Power Agency; Power Supply VRD
Series 1985 E RB
1.24%, 12/01/04(f)(g)(k) A-1+ VMIG-1 14,770 14,770,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (City of Murray
Hospital); VRD Series 2002 PA-1066 RB
(Acquired 10/02/02; Cost $5,995,000)
1.73%, 05/15/22(c)(d)(e) A-1 -- 5,995 5,995,000
- -------------------------------------------------------------------------------------------
Salt Lake (City of) (Gateway Project);
Special Assessment VRD Series 2003
(LOC-Citibank N.A.)
1.70%, 12/01/23(b)(c) A-1+ -- 5,850 5,850,000
- -------------------------------------------------------------------------------------------
Sanpete (County of) School Facilities
(Wasatch Academy);
VRD Series 2003 RB (LOC-U.S. Bank N.A.)
1.76%, 08/01/28(b)(c) A-1+ -- 900 900,000
===========================================================================================
42,804,763
===========================================================================================
VERMONT-0.22%
Vermont (State of) Student Assistance Corp.;
Student Loan VRD Series 1985 RB (LOC-State
Street Bank & Trust Co.)
1.35%, 01/01/08(b)(j) -- VMIG-1 2,640 2,640,000
- -------------------------------------------------------------------------------------------
Vermont (State of); Unlimited Tax Series 1994
A GO
6.40%, 01/15/05(g)(l) NRR NRR 3,510 3,632,758
===========================================================================================
6,272,758
===========================================================================================
VIRGINIA-0.82%
Chesapeake (City of) Hospital Authority
(Chesapeake General Hospital); Hospital
Facility VRD Series 2001 B RB
(LOC-SunTrust Bank)
1.69%, 07/01/31(b)(c) A-1+ -- 1,545 1,545,000
- -------------------------------------------------------------------------------------------
Henrico (County of) Economic Development
Authority
(Westminster Centerbury); Residential Care
Facilities
VRD Series 2003 B RB (LOC-KBC Bank N.V.)
1.69%, 07/01/08(b)(c) -- VMIG-1 17,100 17,100,000
- -------------------------------------------------------------------------------------------
Richmond (City of) Industrial Development
Authority;
Educational Facilities VRD Series 2002 RB
(LOC-SunTrust Bank)
1.70%, 05/01/32(b)(c) -- VMIG-1 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Rockingham (County of) Industrial Development
Authority (Sunnyside Presbyterian Home);
Residential Care Facilities VRD Series 2003
RB (LOC-Branch Banking & Trust)
1.72%, 12/01/33(b)(c) A-1 -- 750 750,000
- -------------------------------------------------------------------------------------------
</Table>
F-34
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
VIRGINIA-(CONTINUED)
Winchester (City of) Industrial Development
Authority (Shenandoah University);
Educational Facilities First Mortgage
Series 1994 IDR
6.70%, 10/01/04(g)(l) NRR NRR $ 1,620 $ 1,652,400
===========================================================================================
23,947,400
===========================================================================================
WASHINGTON-5.39%
ABN AMRO Munitops Ctfs. Trust (City of
Seattle Municipal Light & Power);
Multi-State Non-AMT VRD Series 2002-12
Ctfs. (Acquired 05/25/04; Cost $9,755,000)
1.75%, 03/01/09(c)(d)(e) -- VMIG-1 9,755 9,755,000
- -------------------------------------------------------------------------------------------
ABN AMRO Munitops Ctfs. Trust (City of
Seattle);
Multi-State Non-AMT VRD Limited Tax Series
2003-7 GO Ctfs.
(Acquired 05/13/03; Cost $10,685,000)
1.34%, 11/17/04(d)(e)(g)(i)(k)(n) -- -- 10,685 10,685,000
- -------------------------------------------------------------------------------------------
ABN AMRO Munitops Ctfs. Trust (King County);
Multi-State Non-AMT VRD Limited Tax Series
2001-1 GO Ctfs.
(Acquired 01/04/01; Cost $10,000,000)
1.75%, 07/01/06(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Bremerton (City of) (Kitsap Regional
Conference Center);
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.75%, 12/01/28(b)(c)(i) -- -- 2,565 2,565,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Washington
Public Power Supply Systems Project No. 2);
VRD Series 96-4703 Class A COP (Acquired
05/02/01; Cost $5,870,000)
1.75%, 07/01/11(c)(d)(e) A-1+ -- 5,870 5,870,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Washington);
VRD Series 98-4701 Class A COP (Acquired
07/20/00; Cost $14,400,000)
1.75%, 05/01/18(c)(d)(e) A-1+ -- 14,400 14,400,000
- -------------------------------------------------------------------------------------------
Everett (City of) Public Facilities District;
Commercial Paper TRAN (LOC-Bank of America
N.A.)
1.00%, 10/26/04(b) A-1+ -- 4,300 4,300,000
- -------------------------------------------------------------------------------------------
Everett (City of) Public Facilities District;
Commercial Paper Notes (LOC-Bank of America
N.A.)
1.00%, 10/26/04(b) A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Everett (City of); VRD Limited Tax Series
2001 GO
(LOC-Bank of America N.A.)
1.75%, 12/01/21(b)(c)(i) -- -- 2,600 2,600,000
- -------------------------------------------------------------------------------------------
Issaquah (City of) Community Properties; VRD
Special Revenue Series 2001 A RB (LOC-Bank
of America N.A.)
1.73%, 02/15/21(b)(c) -- VMIG-1 10,150 10,150,000
- -------------------------------------------------------------------------------------------
King & Snohomish (Counties of) School
District No. 417 (Northshore); Unlimited
Tax Series 2003 GO
2.00%, 12/01/04(f) AAA Aaa 3,300 3,304,792
- -------------------------------------------------------------------------------------------
</Table>
F-35
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
King (County of) Economic Enterprise Corp.
(Puget Sound Blood Center Project);
VRD Series 1998 RB (LOC-U.S. Bank N.A.)
1.74%, 04/01/23(b)(c) -- VMIG-1 $ 3,810 $ 3,810,000
- -------------------------------------------------------------------------------------------
Lake Tapps Parkway Properties; Special
Revenue VRD
(LOC-U.S. Bank N.A.)
Series 1999 A RB
1.73%, 12/01/19(b)(c) -- VMIG-1 11,800 11,800,000
- -------------------------------------------------------------------------------------------
Series 1999 B RB
1.73%, 12/01/19(b)(c) -- VMIG-1 700 700,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(Port of Seattle);
VRD Series 2002-739D RB (Acquired 07/21/04;
Cost $5,000,000)
1.73%, 09/01/20(c)(d)(e) A-1 -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Pierce (County of) Economic Development Corp.
(Weyerhaeuser Real Estate); Special Revenue
VRD Series 1997 RB
(LOC-Bank of America N.A.)
1.73%, 01/01/27(b)(c) A-1+ VMIG-1 12,705 12,705,000
- -------------------------------------------------------------------------------------------
Seattle (Port of) Industrial Development
Corp. (Sysco Food Services Project);
Refunding VRD Series 1994 IDR
1.72%, 11/01/25(c) A-1+ VMIG-1 8,000 8,000,000
- -------------------------------------------------------------------------------------------
Seattle (City of) Housing Authority (Bayview
Manor Project);
Low Income Housing Assistance VRD Series
1994 B RB
(LOC-U.S. Bank N.A.)
1.74%, 05/01/19(b)(c) A-1+ -- 2,340 2,340,000
- -------------------------------------------------------------------------------------------
Seattle (City of) Housing Authority (Pioneer
Human Services Project); Refunding VRD
Series 1995 RB (LOC-U.S. Bank N.A.)
1.74%, 12/01/15(b)(c) A-1+ -- 1,975 1,975,000
- -------------------------------------------------------------------------------------------
Snohomish (County of) Housing Authority (Ebey
Arms Centerhouse Project); Refunding
Housing VRD Series 2003 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/34(b)(c)(i) -- -- 6,245 6,245,000
- -------------------------------------------------------------------------------------------
Vancouver (City of) Housing Authority
(Village Park Apartments Project); Housing
VRD Series 2000 RB (LOC-U.S. Bank N.A.)
1.73%, 11/02/05(b)(c) A-1+ -- 1,430 1,430,000
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (Central Puget Sound
Regional Transit Authority); Sales Tax &
Motor VRD Series 2001 A46 RB
(Acquired 11/12/03; Cost $6,275,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 6,275 6,275,000
- -------------------------------------------------------------------------------------------
Washington (State of) Economic Development
Finance Authority (Seadrunar Recycling LLC
Project); Economic Development VRD Series
2000 E RB (LOC-U.S. Bank N.A.)
1.74%, 08/01/25(b)(c) A-1+ -- 2,735 2,735,000
- -------------------------------------------------------------------------------------------
Washington (State of) Health Care Facilities
Authority
(Empire Health Services); VRD Series 2003
RB
(LOC-U.S. Bank N.A.)
1.65%, 11/01/23(b)(c) A-1+ -- 2,335 2,335,000
- -------------------------------------------------------------------------------------------
</Table>
F-36
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
Washington (State of) Higher Education
Facilities Authority
(Cornish College Arts Project); VRD Series
2003 A RB
(LOC-Bank of America N.A.)
1.73%, 12/01/33(b)(c) -- VMIG-1 $ 5,000 $ 5,000,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (Nikkei Concerns Project);
Non-Profit Housing VRD Series 1994 RB
(LOC-U.S. Bank N.A.)
1.74%, 10/01/19(b)(c) A-1+ -- 3,755 3,755,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (Tacoma Art Museum Project);
Non-Profit VRD Series 2002 RB
(LOC-Northern Trust Co.)
1.77%, 06/01/32(b)(m) -- VMIG-1 1,225 1,225,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (University Preparatory Academy
Project); Non-Profit VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.75%, 07/01/30(b)(c) -- VMIG-1 1,250 1,250,000
===========================================================================================
157,209,792
===========================================================================================
WEST VIRGINIA-0.35%
Monongalia (County of) Building Community
Hospital (Monongalia General Hospital);
Refunding VRD Series 2002 A RB
(LOC-JPMorgan Chase Bank)
1.72%, 07/01/17(b)(c) A-1 VMIG-1 645 645,000
- -------------------------------------------------------------------------------------------
West Virginia (State of) Hospital Finance
Authority (Cabell Huntington); Refunding
VRD Series 2002 A-1 RB
(LOC-JPMorgan Chase Bank)
1.67%, 06/01/13(b)(c) -- VMIG-1 9,495 9,495,000
===========================================================================================
10,140,000
===========================================================================================
WISCONSIN-3.44%
Kimberly (City of) (Fox Cities YMCA Project);
VRD Series 2002 RB
(LOC-M&I Marshall & Ilsley Bank)
1.75%, 04/01/32(b)(c) -- VMIG-1 2,540 2,540,000
- -------------------------------------------------------------------------------------------
Menomonee Falls (City of); Refunding Sewer
System Series 2004 RB
2.00%, 05/01/05(f) -- Aaa 1,425 1,429,517
- -------------------------------------------------------------------------------------------
Waukesha (County of); Promissory Notes
Unlimited Tax Series 2004 GO
2.00%, 04/01/05 -- Aaa 1,500 1,507,192
- -------------------------------------------------------------------------------------------
Wind Point (City of) (Johnson Foundation
Project);
VRD Series 2000 RB (LOC-Bank of Montreal)
1.80%, 09/01/35(b)(c) A-1+ -- 4,665 4,665,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Beaver Dam Community
Hospitals Inc.); VRD Series 2004 B RB
(LOC-U.S. Bank N.A.)
1.69%, 08/15/34(b)(c) A-1+ -- 3,000 3,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-37
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WISCONSIN-(CONTINUED)
Wisconsin (State of) Health & Educational
Facilities Authority (Mequon Jewish
Project); VRD Series 2003 RB
(LOC-JPMorgan Chase Bank)
1.73%, 07/01/28(b)(c) -- VMIG-1 $ 2,150 $ 2,150,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(Mercy Health System); (LOC-M&I Marshall &
Ilsley Bank)
Pooled Loan VRD Series 2003 I RB
1.70%, 06/01/23(b)(c) -- VMIG-1 9,570 9,570,000
- -------------------------------------------------------------------------------------------
VRD Series 2003 C RB
1.72%, 08/15/23(b)(c) -- VMIG-1 7,300 7,300,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. John's Home); Pooled Loan VRD Series
2003 J RB
(LOC-M&I Marshall & Ilsley Bank)
1.70%, 07/01/23(b)(c) -- VMIG-1 4,250 4,250,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. Luke's Medical Center); VRD Series
1987 RB
(LOC-KBC Bank N.V.) (Acquired 06/01/04;
Cost $30,000,000)
1.70%, 12/01/17(b)(c)(d) A-1 -- 30,000 30,000,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. Mary's School); VRD Series 2004 RB
(LOC-M&I Marshall & Ilsley Bank)
1.72%, 08/01/19(b)(c) A-1 -- 2,695 2,695,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(Sinai Samaritan Medical Center Inc.); VRD
Series 1994 A RB
(LOC-M&I Marshall & Ilsley Bank)
1.75%, 09/01/19(b)(c) A-1 -- 5,649 5,649,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Wheaton Franciscan
Services); VRD Series 2003 B RB
(LOC-U.S. Bank N.A.)
1.69%, 08/15/33(b)(c) A-1+ VMIG-1 8,750 8,750,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) School Districts Cash
Flow Management Program;
Series 2003 B-1 COP
2.00%, 11/01/04 -- MIG-1 5,565 5,568,956
- -------------------------------------------------------------------------------------------
Series 2004 A-1 COP
3.00%, 09/20/05(o) -- -- 8,000 8,100,676
- -------------------------------------------------------------------------------------------
Wisconsin (State of); Unlimited Tax Series
1995 A GO
6.10%, 05/01/05(g)(l) NRR Aaa 3,000 3,087,881
===========================================================================================
100,263,222
===========================================================================================
Total Municipal Obligations (Cost
$2,926,404,421) 2,926,404,421
===========================================================================================
TOTAL INVESTMENTS-100.40% (Cost
$2,926,404,421)(p) 2,926,404,421
===========================================================================================
OTHER ASSETS LESS LIABILITIES-(0.40%) (11,669,927)
===========================================================================================
NET ASSETS-100.00% $2,914,734,494
___________________________________________________________________________________________
===========================================================================================
</Table>
F-38
Investment Abbreviations:
<Table>
ACES - Automatically Convertible Extendable Security
AMT - Alternative Minimum Tax
BAN - Bond Anticipation Notes
CEP - Credit Enhancement Provider
COP - Certificate of Participation
Ctfs - Certificates
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
Jr. - Junior
LOC - Letter of Credit
MERLOT - Municipal Exempt Receipts Liquidity Optional Tender
NRR - Not Re-Rated
P-Floats - Puttable Floating Option Tax-Exempt Receipts
PCR - Pollution Control Revenue Bonds
PUTTERS - Putable Tax Exempt Receipts
RAN - Revenue Anticipation Notes
RB - Revenue Bonds
RN - Revenue Notes
Sub. - Subordinated
TAN - Tax Anticipation Notes
TRAN - Tax and Revenue Anticipation Notes
VRD - Variable Rate Demand
Wts. - Warrants
</Table>
Notes to Schedule of Investments:
(a) Ratings assigned by Standard & Poor's Corporation ("S&P") and Moody's
Investors Service, Inc. ("Moody's"), except as indicated in note (i) and (o)
below. NRR indicates a security that is not re-rated subsequent to funding
of an escrow fund (consisting of U.S. Treasury obligations held by a bank
custodian); this funding is pursuant to an advance refunding of this
security.
(b) Principal and interest payments are fully enhanced by a letter of credit
from the bank listed or a predecessor bank, branch or subsidiary.
(c) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined weekly. Rate
shown is the rate in effect on September 30, 2004.
(d) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at September 30, 2004 was
$691,199,000, which represented 23.71% of the Fund's net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(e) Synthetic municipal instruments; involves the deposit into a trust of one or
more long-term tax-exempt bonds or notes ("Underlying Bonds"), a sale of
certificates evidencing interests in the trust to investors such as the
Fund. The trustee receives the long-term fixed interest payments on the
Underlying Bonds, and pays certificate holders variable rate interest
payments based upon a short-term reset periodically.
(f) Principal and interest payments are secured by bond insurance provided by
one of the following companies: Ambac Assurance Corp., Financial Guaranty
Insurance Co., Financial Security Assurance Inc., or MBIA Insurance Corp.
F-39
(g) Security has an irrevocable call or mandatory put by the issuer. Maturity
date reflects such call or put.
(h) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined
semi-annually. Rate shown is the rate in effect on September 30, 2004.
(i) Security is not rated by S&P or by Moody's; however it is rated by Fitch
IBCA ("Fitch") of F1+.
(j) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined monthly. Rate
shown is the rate in effect on September 30, 2004.
(k) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined at
intermittent intervals. Rate shown is the rate in effect on September 30,
2004.
(l) Advance refunded; secured by an escrow fund of U.S. Treasury obligations.
(m) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined daily. Rate
shown is the rate in effect on September 30, 2004.
(n) Security considered to be illiquid. The aggregate market value of these
securities considered illiquid at September 30, 2004 was $38,920,000, which
represented 1.34% of the Fund's net assets.
(o) Determined by the investment advisor to be of comparable quality to the
rated securities in which the Fund may invest, pursuant to guidelines for
the determination of quality adopted by the Board of Trustees and followed
by the investment advisor.
(p) Also represents cost for federal income tax purposes.
See accompanying notes which are an integral part of the financial statements.
F-40
STATEMENT OF ASSETS & LIABILITIES
September 30, 2004
(Unaudited)
<Table>
ASSETS:
Investments, at market value
(cost $2,926,404,421) $2,926,404,421
- ---------------------------------------------
Cash 697,925
- ---------------------------------------------
Receivables for:
Investments sold 4,895,235
- ---------------------------------------------
Interest 8,879,674
- ---------------------------------------------
Investment for trustee
deferred compensation and
retirement plans 136,908
- ---------------------------------------------
Other assets 190,315
=============================================
Total assets 2,941,204,478
_____________________________________________
=============================================
LIABILITIES:
Payables for:
Investments purchased 23,240,918
- ---------------------------------------------
Dividends 2,730,970
- ---------------------------------------------
Trustee deferred
compensation and
retirement plans 215,380
- ---------------------------------------------
Accrued distribution fees 131,402
- ---------------------------------------------
Accrued transfer agent fees 91,843
- ---------------------------------------------
Accrued trustees fees 1,095
- ---------------------------------------------
Accrued operating expenses 58,376
=============================================
Total liabilities 26,469,984
=============================================
Net assets applicable to
shares outstanding $2,914,734,494
_____________________________________________
=============================================
NET ASSETS CONSIST OF:
Shares of beneficial
interest $2,914,752,505
- ---------------------------------------------
Undistributed net realized
gain (loss) from
investment securities (18,011)
=============================================
$2,914,734,494
_____________________________________________
=============================================
NET ASSETS:
Institutional Class $1,671,593,521
_____________________________________________
=============================================
Private Investment Class $ 190,301,672
_____________________________________________
=============================================
Personal Investment Class $ 9,273,444
_____________________________________________
=============================================
Cash Management Class $ 796,326,655
_____________________________________________
=============================================
Reserve Class $ 11,062,666
_____________________________________________
=============================================
Resource Class $ 236,176,536
_____________________________________________
=============================================
SHARES OUTSTANDING,
$0.001 PAR VALUE PER SHARE,
UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Institutional Class 1,671,550,863
_____________________________________________
=============================================
Private Investment Class 190,288,610
_____________________________________________
=============================================
Personal Investment Class 9,270,510
_____________________________________________
=============================================
Cash Management Class 796,322,561
_____________________________________________
=============================================
Reserve Class 11,060,717
_____________________________________________
=============================================
Resource Class 236,175,751
_____________________________________________
=============================================
Net asset value, offering and
redemption price per share
for each class $ 1.00
_____________________________________________
=============================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-41
STATEMENT OF OPERATIONS
For the six months ended September 30, 2004
(Unaudited)
<Table>
INVESTMENT INCOME:
Interest $17,235,533
=========================================================================
EXPENSES:
Advisory fees 3,131,846
- -------------------------------------------------------------------------
Administrative services fees 295,697
- -------------------------------------------------------------------------
Custodian fees 38,978
- -------------------------------------------------------------------------
Distribution fees:
Private Investment Class 404,301
- -------------------------------------------------------------------------
Personal Investment Class 40,938
- -------------------------------------------------------------------------
Cash Management Class 334,772
- -------------------------------------------------------------------------
Reserve Class 50,510
- -------------------------------------------------------------------------
Resource Class 266,654
- -------------------------------------------------------------------------
Transfer agent fees 231,258
- -------------------------------------------------------------------------
Trustees' fees and retirement benefits 29,952
- -------------------------------------------------------------------------
Other 317,825
=========================================================================
Total expenses 5,142,731
=========================================================================
Less: Fees waived (1,065,457)
=========================================================================
Net expenses 4,077,274
=========================================================================
Net investment income 13,158,259
=========================================================================
Net realized gain (loss) from investment securities (17,079)
=========================================================================
Net increase in net assets resulting from operations $13,141,180
_________________________________________________________________________
=========================================================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-42
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 2004 and the year ended March 31, 2004
(Unaudited)
<Table>
<Caption>
SEPTEMBER 30, MARCH 31,
2004 2004
- --------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 13,158,259 $ 22,690,885
- --------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities (17,079) 40,841
============================================================================================
Net increase in net assets resulting from operations 13,141,180 22,731,726
============================================================================================
Distributions to shareholders from net investment income:
Institutional Class (8,710,440) (14,405,472)
- --------------------------------------------------------------------------------------------
Private Investment Class (555,715) (1,230,193)
- --------------------------------------------------------------------------------------------
Personal Investment Class (20,320) (37,490)
- --------------------------------------------------------------------------------------------
Cash Management Class (2,854,661) (5,040,826)
- --------------------------------------------------------------------------------------------
Reserve Class (4,673) (8,425)
- --------------------------------------------------------------------------------------------
Resource Class (1,012,450) (1,968,479)
============================================================================================
Decrease in net assets resulting from distributions (13,158,259) (22,690,885)
============================================================================================
Share transactions-net:
Institutional Class (282,164,384) 632,519,818
- --------------------------------------------------------------------------------------------
Private Investment Class 39,903,203 (77,436,378)
- --------------------------------------------------------------------------------------------
Personal Investment Class (1,120,107) (6,598,054)
- --------------------------------------------------------------------------------------------
Cash Management Class 28,190,366 150,447,508
- --------------------------------------------------------------------------------------------
Reserve Class (2,966,860) 1,376,091
- --------------------------------------------------------------------------------------------
Resource Class (63,027,459) 39,025,099
============================================================================================
Net increase (decrease) in net assets resulting from
share transactions (281,185,241) 739,334,084
============================================================================================
Net increase (decrease) in net assets (281,202,320) 739,374,925
============================================================================================
NET ASSETS:
Beginning of period 3,195,936,814 2,456,561,889
============================================================================================
End of period (including undistributed net investment
income of $0 and $0, respectively) $2,914,734,494 $3,195,936,814
____________________________________________________________________________________________
============================================================================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-43
NOTES TO FINANCIAL STATEMENTS
September 30, 2004
(Unaudited)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
Tax-Free Investments Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Trust is organized as a Delaware statutory
trust consisting of one portfolio, the Tax-Free Cash Reserve Portfolio (the
"Fund"). The Fund currently offers multiple classes of shares. Matters affecting
each class are voted on exclusively by the shareholders of each class. The
Fund's investment objective is to provide as high a level of tax-exempt income
as is consistent with the preservation of capital and maintenance of liquidity.
On November 4, 2003, the Fund was restructured from a separate series of
Tax-Free Investments Co. to a new series portfolio of the Trust.
Under the Trust's organizational documents, the Fund's officers, trustees,
employees and agents are indemnified against certain liabilities that may arise
out of performance of their duties to the Fund. Additionally, in the normal
course of business, the Fund enters into contracts that contain a variety of
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, the Fund has not had prior claims or losses
pursuant to these contracts.
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 at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted by Rule 2a-7
under the 1940 Act. This method values a security at its cost on the date
of purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities.' Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
F-44
The Fund allocates realized and unrealized capital gains and losses to a
class based on the relative net assets of each class. The Fund allocates
income to a class based on the relative value of the settled shares of each
class.
C. DISTRIBUTIONS -- Distributions from income are declared daily and paid
monthly. Distributions from net realized capital gain, if any, are
generally paid annually and recorded on ex-dividend date. The Fund may
elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and, as such, will not be subject to federal
income taxes on otherwise taxable income (including net realized capital
gain) which is distributed to shareholders. Therefore, no provision for
federal income taxes is recorded in the financial statements.
In addition, the Fund intends to invest in securities to allow it to
qualify to pay shareholders "exempt interest dividends", as defined in the
Internal Revenue Code of 1986, as amended.
E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.25% of the first
$500 million of the Fund's average daily net assets plus 0.20% of the Fund's
average daily net assets in excess of $500 million. AIM has voluntarily agreed
to waive advisory fees and/or reimburse expenses to the extent necessary to
limit Total Annual Fund Operating Expenses (excluding certain items discussed
below) to 0.22%. In determining the advisor's obligation to waive advisory fees
and/or reimburse expenses, the following expenses are not taken into account,
and could cause the Total Annual Fund Operating Expenses to exceed the cap
stated above: (i) Rule 12b-1 plan fees, if any; (ii) interest; (iii) taxes; (iv)
dividend expense on short sales; (v) extraordinary items (these are expenses
that are not anticipated to arise from the Fund's day-to-day operations), or
items designated as such by the Fund's Board of Trustees; (vi) expenses related
to a merger or reorganization, as approved by the Fund's Board of Trustees;
(vii) expenses that the Fund has incurred but did not actually pay because of an
expense offset arrangement; (viii) trustees' fees; and (ix) federal registration
fees. Currently, the only expense offset arrangements from which the Fund
benefits are in the form of credits that the Fund receives from banks where the
Fund or its transfer agent has deposit accounts in which it holds uninvested
cash. Those credits are used to pay certain expenses incurred by the Fund.
Voluntary fee waivers or reimbursements may be modified or discontinued at any
time upon consultation with the Board of Trustees without further notice to
investors. To the extent that the annualized expense ratio does not exceed the
expense limitation, AIM will retain its ability to be reimbursed for such fee
waivers or reimbursements prior to the end of each fiscal year. For the six
months ended September 30, 2004, AIM waived fees of $723,330.
The Trust, pursuant to a master administrative services agreement with AIM,
has agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended September 30, 2004,
AIM was paid $295,697 for such services.
The Trust, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the six months ended
September 30, 2004, AISI retained $225,258 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Trust, FMC acts as the exclusive distributor of the
Fund's shares. The Fund has adopted a master distribution
F-45
plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's
Private Investment Class, Personal Investment Class, Cash Management Class,
Reserve Class and Resource Class (the "Plan"). The Plan provides that the
Private Investment Class, the Personal Investment Class, the Cash Management
Class, the Reserve Class and the Resource Class pay up to the maximum annual
rate of 0.50%, 0.75%, 0.10%, 1.00% and 0.20%, respectively, of the average daily
net assets attributable to such class. Of this amount, up to 0.25% of the
average daily net assets of each class may be paid to furnish continuing
personal shareholder services to customers who purchase and own shares of the
such classes. Any amounts not paid as a service fee under such Plan would
constitute an asset-based sales charge. NASD Rules also impose a cap on the
total amount of sales charges, including asset-based sales charges, that may be
paid by any class of shares of the Fund. Currently, FMC has elected to waive a
portion of its compensation payable by the Fund such that compensation paid
pursuant to the Plan with respect to the Private Investment Class, the Personal
Investment Class, the Cash Management Class, the Reserve Class and the Resource
Class equals the maximum annual rate of 0.25%, 0.55%, 0.08%, 0.87% and 0.16%,
respectively, of the average daily net assets attributable to such class.
Further, FMC voluntarily waived additional Rule 12b-1 plan fees for the Reserve
Class during the year in order to increase the yield. Waivers may be modified or
discontinued at any time. Pursuant to the Plan, for the six months ended
September 30, 2004, the Private Investment Class, the Personal Investment Class,
the Cash Management Class, the Reserve Class and the Resource Class paid
$202,150, $30,021, $267,818, $41,736 and $213,323, respectively, after FMC
waived Plan fees of $202,151, $10,917, $66,954, $8,774 and $53,331,
respectively.
Certain officers and trustees of the Trust are officers and directors of
AIM, FMC and/or AISI.
NOTE 3--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM and INVESCO Funds under specified conditions outlined in procedures adopted
by the Board of Trustees of the Trust. The procedures have been designed to
ensure that any purchase or sale of securities by the Fund from or to another
fund or portfolio that is or could be considered an affiliate by virtue of
having a common investment advisor (or affiliated investment advisors), common
Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act.
Further, as defined under the procedures each transaction is effected at the
current market price. Pursuant to these procedures, during the six months ended
September 30, 2004, the Fund engaged in purchases and sales of securities of $0
and $27,058,780, respectively.
NOTE 4--TRUSTEES' FEES
Trustees' fees represent remuneration paid to each Trustee of the Trust who is
not an "interested person" of AIM. Trustees have the option to defer
compensation payable by the Trust. Those Trustees who defer compensation have
the option to select various AIM Funds and INVESCO Funds in which their deferral
accounts shall be deemed to be invested.
Current Trustees are eligible to participate in a retirement plan that
provides for benefits to be paid upon retirement to Trustees over a period of
time based on the number of years of service. The Fund may have certain former
Trustees that also participate in a retirement plan and receive benefits under
such plan.
Obligations under the deferred compensation and retirement plans represent
unsecured claims against the general assets of the Fund.
During the six months ended September 30, 2004, the Fund paid legal fees of
$5,068 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel
to the Independent Trustees. A member of that firm is a Trustee of the Trust.
F-46
NOTE 5--BORROWINGS
Pursuant to an exemptive order from the SEC, the Fund may participate in an
interfund lending facility that AIM has established for temporary borrowings by
the AIM Funds and the INVESCO Funds. An interfund loan will be made under this
facility only if the loan rate (an average of the rate available on bank loans
and the rate available on investments in overnight repurchase agreements) is
favorable to both the lending fund and the borrowing fund. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. To the extent that the loan is required
to be secured by collateral, the collateral is marked to market daily to ensure
that the market value is at least 102% of the outstanding principal value of the
loan. The Fund did not borrow or lend under the facility during the six months
ended September 30, 2004.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with The Bank of New York, the custodian bank.
To compensate the custodian bank for such overdrafts, the overdrawn Fund may
either (i) leave funds in the account so the custodian can be compensated by
earning the additional interest; or (ii) compensate by paying the custodian
bank. In either case, the custodian bank will be compensated at an amount equal
to the Federal Funds rate plus 100 basis points.
NOTE 6--TAX INFORMATION
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforward) under income tax regulations. The tax character of
distributions paid during the year and the tax components of net assets will be
reported at the Fund's fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions.
The Fund had a capital loss carryforward as of March 31, 2004 which expires
as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------
March 31, 2011 $933
_____________________________________________________________________________
=============================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
F-47
NOTE 7--SHARE INFORMATION
The Fund currently offers six different classes of shares: Institutional Class,
Private Investment Class, Personal Investment Class, Cash Management Class,
Reserve Class and Resource Class.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING(A)
- ---------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2004 MARCH 31, 2004
--------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
Sold:
Institutional Class 8,676,342,046 $ 8,676,342,046 13,446,683,719 $ 13,446,683,719
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 217,524,346 217,524,346 489,285,624 489,285,624
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class 20,166,779 20,166,779 26,756,133 26,756,133
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 2,908,837,254 2,908,837,254 5,641,820,633 5,641,820,633
- ---------------------------------------------------------------------------------------------------------
Reserve Class 77,269,739 77,269,739 156,764,612 156,764,612
- ---------------------------------------------------------------------------------------------------------
Resource Class 732,494,862 732,494,862 1,508,376,051 1,508,376,051
=========================================================================================================
Issued as reinvestment of
dividends:
Institutional Class 5,177,367 5,177,367 7,301,226 7,301,226
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 318,170 318,170 737,747 737,747
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class 2,442 2,442 4,054 4,054
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 1,846,071 1,846,071 4,115,815 4,115,815
- ---------------------------------------------------------------------------------------------------------
Reserve Class 2,986 2,986 8,921 8,921
- ---------------------------------------------------------------------------------------------------------
Resource Class 936,355 936,355 1,860,224 1,860,224
=========================================================================================================
Reacquired:
Institutional Class (8,963,683,797) (8,963,683,797) (12,821,465,127) (12,821,465,127)
- ---------------------------------------------------------------------------------------------------------
Private Investment Class (177,939,313) (177,939,313) (567,459,749) (567,459,749)
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class (21,289,328) (21,289,328) (33,358,241) (33,358,241)
- ---------------------------------------------------------------------------------------------------------
Cash Management Class (2,882,492,959) (2,882,492,959) (5,495,488,940) (5,495,488,940)
- ---------------------------------------------------------------------------------------------------------
Reserve Class (80,239,585) (80,239,585) (155,397,442) (155,397,442)
- ---------------------------------------------------------------------------------------------------------
Resource Class (796,458,676) (796,458,676) (1,471,211,176) (1,471,211,176)
=========================================================================================================
(281,185,241) $ (281,185,241) 739,334,084 $ 739,334,084
_________________________________________________________________________________________________________
=========================================================================================================
</Table>
(a) There are two entities that are each record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate they own 50% of the
outstanding shares of the Fund. The Fund's principle underwriter may have an
agreement with these entities to sell Fund shares. The Fund, AIM and/or AIM
affiliates may make payments to these entities, which are considered to be
related to the Fund, for providing services to the Fund, AIM and/or AIM
affiliates including but not limited to services such as, securities
brokerage, distribution, third party record keeping and account servicing.
The Trust has no knowledge as to whether all or any portion of the shares
owned of record by these shareholders are also owned beneficially.
F-48
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
PRIVATE CLASS
----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED MARCH 31,
SEPTEMBER 30, ---------------------------------------------------
2004 2004 2003 2002 2001 2000
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.003 0.01 0.01 0.02 0.04 0.03
========================================================================================================
Less distributions from net
investment income (0.003) (0.01) (0.01) (0.02) (0.04) (0.03)
========================================================================================================
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
________________________________________________________________________________________________________
========================================================================================================
Total return(a) 0.34% 0.59% 0.97% 1.91% 3.69% 3.06%
________________________________________________________________________________________________________
========================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $190,302 $150,399 $227,832 $179,095 $141,946 $83,454
________________________________________________________________________________________________________
========================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 0.47%(b) 0.47% 0.47% 0.47% 0.45% 0.45%
- --------------------------------------------------------------------------------------------------------
Without fee waivers 0.77%(b) 0.77% 0.77% 0.78% 0.79% 0.79%
________________________________________________________________________________________________________
========================================================================================================
Ratio of net investment income
to average net assets 0.68%(b) 0.58% 0.95% 1.76% 3.60% 3.00%
________________________________________________________________________________________________________
========================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and is not annualized for periods
less than one year.
(b) Ratios are annualized and based on average daily net assets of
$161,264,467.
F-49
NOTE 9--LEGAL PROCEEDINGS
Terms used in this Legal Proceedings Note are defined terms solely for the
purpose of this note.
The mutual fund industry as a whole is currently subject to regulatory
inquiries and litigation related to a wide range of issues. These issues
include, among others, market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders.
As described more fully below, INVESCO Funds Group, Inc. ("IFG"), the former
investment advisor to certain AIM Funds, A I M Advisors, Inc. ("AIM"), the
Fund's investment advisor, and A I M Distributors, Inc. ("ADI"), the distributor
of the retail AIM Funds and a wholly owned subsidiary of AIM, reached final
settlements with the Securities and Exchange Commission ("SEC"), the New York
Attorney General ("NYAG"), the Colorado Attorney General ("COAG"), the Colorado
Division of Securities ("CODS") and the Secretary of State of the State of
Georgia to resolve civil enforcement actions and investigations related to
market timing activity and related issues in the AIM Funds, including those
formerly advised by IFG.
In addition, as described more fully below, IFG and AIM are the subject of a
number of ongoing regulatory inquiries and civil lawsuits related to one or more
of the issues currently being scrutinized by various Federal and state
regulators, including but not limited to those issues described above.
Additional regulatory actions and/or civil lawsuits related to the above or
other issues may be filed against the AIM Funds, IFG, AIM and/or related
entities and individuals in the future. Additional regulatory inquiries related
to the above or other issues also may be received by the AIM Funds, IFG, AIM
and/or related entities and individuals in the future.
As a result of the matters discussed below, investors in the AIM Funds might
react by redeeming their investments. This might require the Funds to sell
investments to provide for sufficient liquidity and could also have an adverse
effect on the investment performance of the Funds.
Settled Enforcement Actions and Investigations Related to Market Timing
On October 8, 2004, AMVESCAP PLC ("AMVESCAP"), the parent company of IFG and
AIM, announced that final settlements had been reached with the SEC, the NYAG,
the COAG and the Secretary of State of Georgia to resolve civil enforcement
actions and investigations related to market timing activity and related issues
in the AIM Funds, including those formerly advised by IFG. A final settlement
also has been reached with the Colorado Division of Securities ("CODS") with
respect to this matter. In their enforcement actions and investigations, these
regulators alleged, in substance, that IFG and AIM failed to disclose in the
prospectuses for the AIM Funds that they advised and to the independent
directors/trustees of such Funds that IFG and AIM had entered into certain
arrangements permitting market timing of such Funds, thereby breaching their
fiduciary duties to such Funds. As a result of the foregoing, the regulators
alleged that IFG, AIM and ADI breached various Federal and state securities,
business and consumer protection laws. Under the terms of the settlements, IFG,
AIM and ADI consent to the entry of settlement orders or assurances of
discontinuance, as applicable, by the regulators containing certain terms, some
of which are described below, without admitting or denying any wrongdoing.
Under the terms of the settlements, IFG agreed to pay a total of $325 million,
of which $110 million is civil penalties. Of the $325 million total payment,
half will be paid on or before December 31, 2004 and the remaining half will be
paid on or before December 31, 2005. AIM and ADI agreed to pay a total of $50
million, of which $30 million is civil penalties. The entire $50 million payment
by AIM and ADI will be paid by November 7, 2004.
The entire $325 million IFG settlement payment will be available for
distribution to the shareholders of those AIM Funds that IFG formerly advised
that were harmed by market timing activity, and the entire $50 million
F-50
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
settlement payment by AIM and ADI will be available for distribution to the
shareholders of those AIM Funds advised by AIM that were harmed by market timing
activity, all as to be determined by an independent distribution consultant to
be appointed under the settlements. The settlement payments will be distributed
in accordance with a methodology to be determined by the independent
distribution consultant, in consultation with AIM and the independent trustees
of the AIM Funds and acceptable to the staff of the SEC.
Under the settlements with the NYAG and COAG, AIM has agreed to reduce
management fees on the AIM Funds by $15 million per year for the next five
years, based upon effective fee rates and assets under management as of July 1,
2004, and not to increase certain management fees. IFG will also pay $1.5
million to the COAG to be used for investor education purposes and to reimburse
the COAG for actual costs. Finally, IFG and AIM will pay $175,000 to the
Secretary of State of Georgia to be used for investor education purposes and to
reimburse the Secretary of State for actual costs.
None of the costs of the settlements will be borne by the AIM Funds or by Fund
shareholders.
Under the terms of the settlements, AIM will make certain governance reforms,
including maintaining an internal controls committee and retaining an
independent compliance consultant, a corporate ombudsman and, as stated above,
an independent distribution consultant. Also, commencing in 2007 and at least
once every other year thereafter, AIM will undergo a compliance review by an
independent third party.
In addition, under the terms of the settlements, AIM has undertaken to cause
the AIM Funds to operate in accordance with certain governance policies and
practices, including retaining a full-time independent senior officer whose
duties will include monitoring compliance and managing the process by which
proposed management fees to be charged the AIM Funds are negotiated. Also,
commencing in 2008 and not less than every fifth calendar year thereafter, the
AIM Funds will hold shareholder meetings at which their Boards of Trustees will
be elected.
On October 8, 2004, the SEC announced that it had settled a market timing
enforcement action against Raymond R. Cunningham, the former president and chief
executive officer of IFG and a former member of the board of directors of the
AIM Funds formerly advised by IFG. As part of the settlement, the SEC ordered
Mr. Cunningham to pay $1 in restitution and civil penalties in the amount of
$500,000. In addition, the SEC prohibited Mr. Cunningham from associating with
an investment advisor, broker, dealer or investment company for a period of two
years and further prohibited him from serving as an officer or director of an
investment advisor, broker, dealer or investment company for a period of five
years.
On August 31, 2004, the SEC announced that it had settled market timing
enforcement actions against Timothy J. Miller, the former chief investment
officer and a former portfolio manager for IFG, Thomas A. Kolbe, the former
national sales manager of IFG, and Michael D. Legoski, a former assistant vice
president in IFG's sales department. As part of the settlements, the SEC ordered
Messrs. Miller, Kolbe and Legoski to pay $1 in restitution each and civil
penalties in the amounts of $150,000, $150,000 and $40,000, respectively. In
addition, the SEC prohibited each of them from associating with an investment
advisor or investment company for a period of one year, prohibited Messrs.
Miller and Kolbe from serving as an officer or director of an investment advisor
or investment company for three years and two years, respectively, and
prohibited Mr. Legoski from associating with a broker or dealer for a period of
one year.
As referenced by the SEC in the SEC's settlement order, one former officer of
ADI and one current officer of AIM (who has taken a voluntary leave of absence)
have received regulatory inquiries in the form of subpoenas or other oral or
written requests for information and/or documents related to market timing
activity in the AIM Funds.
At the direction of the trustees of the AIM Funds, AMVESCAP has agreed to pay
all of the expenses incurred by such Funds related to the market timing
investigations, including expenses incurred in connection with the
F-51
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
regulatory complaints against IFG alleging market timing and the market timing
investigations with respect to IFG and AIM.
The payments made in connection with the above-referenced settlements by IFG,
AIM and ADI will total approximately $375 million (not including AIM's agreement
to reduce management fees on the AIM Funds by $15 million per year for the next
five years, based upon effective fee rates and assets under management as of
July 1, 2004). The manner in which the settlement payments will be distributed
is unknown at the present time and will be determined by an independent
distribution consultant to be appointed under the settlements. Therefore,
management of AIM and the Fund are unable at the present time to estimate the
impact, if any, that the distribution of the settlement amounts may have on the
Fund or whether such distribution will have an impact on the Fund's financial
statements in the future.
At the present time, management of AIM and the Fund are unable to estimate the
impact, if any, that the outcome of the ongoing matters described below may have
on AIM, ADI or the Fund.
Ongoing Regulatory Inquiries Concerning IFG and AIM
IFG, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds formerly advised by IFG have received regulatory
inquiries in the form of subpoenas or other oral or written requests for
information and/or documents related to one or more of the following issues,
some of which concern one or more such Funds: market timing activity, late
trading, fair value pricing, excessive or improper advisory and/or distribution
fees, mutual fund sales practices, including revenue sharing and
directed-brokerage arrangements, and investments in securities of other
registered investment companies. These regulators include the SEC, the NASD,
Inc. ("NASD"), the Florida Department of Financial Services, the Attorney
General of the State of West Virginia, the West Virginia Securities Commission
and the Bureau of Securities of the State of New Jersey. IFG and certain of
these other parties also have received more limited inquiries from the United
States Department of Labor ("DOL") and the United States Attorney's Office for
the Southern District of New York, some of which concern one or more of the AIM
Funds formerly advised by IFG. IFG is providing full cooperation with respect to
these inquiries.
AIM, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds have received regulatory inquiries in the form
of subpoenas or other oral or written requests for information and/or documents
related to one or more of the following issues, some of which concern one or
more AIM Funds: market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders. These regulators include the SEC, the NASD, the
Department of Banking for the State of Connecticut, the Attorney General of the
State of West Virginia, the West Virginia Securities Commission and the Bureau
of Securities of the State of New Jersey. AIM and certain of these other parties
also have received more limited inquiries from the SEC, the NASD, the DOL, the
Internal Revenue Service, the New York Stock Exchange, the United States
Attorney's Office for the Southern District of New York, the United States
Attorney's Office for the Central District of California, the United States
Attorney's Office for the District of Massachusetts, the Massachusetts
Securities Division and the U.S. Postal Inspection Service, some of which
concern one or more AIM Funds. AIM is providing full cooperation with respect to
these inquiries.
Private Civil Actions Alleging Market Timing
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, certain AIM Funds, IFG, AIM, A I M Management Group Inc. ("AIM
Management"), AMVESCAP, certain related entities, certain of their current and
former officers
F-52
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
and/or certain unrelated third parties) making allegations that are similar in
many respects to those in the settled regulatory actions brought by the SEC, the
NYAG and the COAG concerning market timing activity in the AIM Funds. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violation of various provisions of the Federal and state securities laws;
(ii) violation of various provisions of ERISA; (iii) breach of fiduciary duty;
and/or (iv) breach of contract. These lawsuits were initiated in both Federal
and state courts and seek such remedies as compensatory damages; restitution;
injunctive relief; disgorgement of management fees; imposition of a constructive
trust; removal of certain directors and/or employees; various corrective
measures under ERISA; rescission of certain Funds' advisory agreements;
interest; and attorneys' and experts' fees.
All lawsuits based on allegations of market timing, late trading, and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court") for consolidated or coordinated pre-trial
proceedings. Pursuant to an Order of the MDL Court, plaintiffs consolidated
their claims for pre-trial purposes into three amended complaints against
various AIM- and IFG-related parties: (i) a Consolidated Amended Class Action
Complaint purportedly brought on behalf of shareholders of the AIM Funds; (ii) a
Consolidated Amended Fund Derivative Complaint purportedly brought on behalf of
the AIM Funds and fund registrants; and (iii) an Amended Class Action Complaint
for Violations of the Employee Retirement Income Securities Act purportedly
brought on behalf of participants in AMVESCAP's 401(k) plan. Plaintiffs in one
of the underlying lawsuits transferred to the MDL Court continue to seek remand
of their action to state court.
Private Civil Actions Alleging Improper Use of Fair Value Pricing
Multiple civil class action lawsuits have been filed against various parties
(including, depending on the lawsuit, certain AIM Funds, IFG and/or AIM)
alleging that certain AIM Funds inadequately employed fair value pricing. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violations of various provisions of the Federal securities laws; (ii) common
law breach of duty; and (iii) common law negligence and gross negligence. These
lawsuits have been filed in both Federal and state courts and seek such remedies
as compensatory and punitive damages; interest; and attorneys' fees and costs.
Private Civil Actions Alleging Excessive Advisory and/or Distribution Fees
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, INVESCO Institutional (N.A.), Inc., ADI and/or INVESCO
Distributors, Inc.) alleging that the defendants charged excessive advisory
and/or distribution fees and failed to pass on to shareholders the perceived
savings generated by economies of scale. Certain of these lawsuits also allege
that the defendants adopted unlawful distribution plans. These lawsuits allege a
variety of theories of recovery, including but not limited to: (i) violation of
various provisions of the Federal securities laws; (ii) breach of fiduciary
duty; and/or (iii) breach of contract. These lawsuits have been filed in Federal
courts and seek such remedies as damages; injunctive relief; rescission of
certain Funds' advisory agreements and distribution plans; interest; prospective
relief in the form of reduced fees; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Charging of Distribution Fees on Closed
Funds or Share Classes
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, ADI and/or certain of the trustees of the AIM Funds)
alleging that the defendants breached their fiduciary duties by charging
distribution fees while funds and/or specific share classes were closed
generally to new investors and/or while other share classes of the same fund
were not charged the same distribution fees. These lawsuits allege a variety of
theories of recovery, including but not limited to: (i) violation of various
provisions of the Federal securities laws; and (ii) breach of
F-53
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
fiduciary duty. These lawsuits have been filed in Federal courts and seek such
remedies as damages; injunctive relief; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Mutual Fund Sales Practices and
Directed-Brokerage Arrangements
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, AIM Management, IFG, AIM, AIM Investment Services, Inc. and/or
certain of the trustees of the AIM Funds) alleging that the defendants
improperly used the assets of the AIM Funds to pay brokers to aggressively
promote the sale of the AIM Funds over other mutual funds and that the
defendants concealed such payments from investors by disguising them as
brokerage commissions. These lawsuits allege a variety of theories of recovery,
including but not limited to: (i) violation of various provisions of the Federal
securities laws; (ii) breach of fiduciary duty; and (iii) aiding and abetting a
breach of fiduciary duty. These lawsuits have been filed in Federal courts and
seek such remedies as compensatory and punitive damages; rescission of certain
Funds' advisory agreements and distribution plans and recovery of all fees paid;
an accounting of all fund-related fees, commissions and soft dollar payments;
restitution of all unlawfully or discriminatorily obtained fees and charges; and
attorneys' and experts' fees.
F-54
<Table>
<Caption>
TRUSTEES TAX-FREE
Bruce L. Crockett, Chair Lewis F. Pennock INVESTMENTS TRUST
Bob R. Baker Robert H. Graham (TFIT)
Frank S. Bayley Gerald J. Lewis
James T. Bunch Prema Mathai-Davis
Albert R. Dowden Ruth H. Quigley TAX-FREE
Edward K. Dunn, Jr. Louis S. Sklar CASH RESERVE
Jack M. Fields Larry Soll, Ph.D. PORTFOLIO
Carl Frischling Mark H. Williamson
OFFICERS RESERVE
Robert H. Graham President CLASS
Mark H. Williamson Executive Vice President
Lisa O. Brinkley Senior Vice President & Chief Compliance Officer Semi-
Kevin M. Carome Senior Vice President, Secretary & Chief Legal Officer Annual
Sidney M. Dilgren Vice President & Treasurer Report
Stuart W. Coco Vice President
Karen Dunn Kelley Vice President September 30, 2004
Edgar M. Larsen Vice President
INVESTMENT ADVISOR
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
DISTRIBUTOR
Fund Management Company
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
CUSTODIAN
The Bank of New York
2 Hanson Place
Brooklyn, NY 11217-1431
COUNSEL TO THE FUND
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
COUNSEL TO THE TRUSTEES
Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022-3852
TRANSFER AGENT
AIM Investment Services, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
A description of the policies and procedures that the fund uses to determine how
to vote proxies relating to portfolio securities is available without charge,
upon request, from our Client Services department at 800-959-4246 or on the AIM
Web site, AIMinvestments.com. On the home page, scroll down and click on AIM
Funds Proxy Policy. The information is also available on the Securities and
Exchange Commission's Web site, sec.gov.
Information regarding how the fund voted proxies related to its portfolio
securities during the 12 months ended 6/30/04 is available at our Web site. Go
to AIMinvestments.com, access the About Us tab, click on Required Notices and
then click on Proxy Voting Activity. Next, select your fund from the drop-down
menu.
</Table>
YOUR GOALS. OUR SOLUTIONS. [AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark-- --Registered Trademark--
TFIT-SAR-4
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
This is the semiannual report on the performance of the
[PHOTO OF Reserve Class of the Tax-Free Cash Reserve Portfolio of
ROBERT H. Tax-Free Investments Trust, a money market fund investing in
GRAHAM] short-term municipal bonds of the highest credit ratings.
The report is for the six-month period ended September 30,
ROBERT H. GRAHAM 2004.
Historically low interest rates resulted in low yields
for money market instruments.
The Federal Reserve (the Fed), which had left the
federal funds target rate at 1.00% since June 2003 (the
lowest rate since 1958), increased the rate by 0.25% (or 25
basis points) three times during the six-month reporting
period. With the latest increase on September 21, the rate
stood at 1.75%. The federal funds rate is the interest rate at which depository
institutions lend balances at the Fed to other depository institutions
overnight. The federal funds rate does not mandate the rates offered on
municipal bonds. However, the low-interest rate environment resulting from the
federal funds rate, as well as the overall economic climate itself, affects all
fixed-income investing.
Indications of sustained economic growth characterized the bond market
during the second quarter of 2004, according to The Bond Market Association's
Research Quarterly. The report noted that considering interest rate volatility
in 2004, bond markets in general have responded well to sustained economic
growth. However, municipal bond issuance declined in the quarter amid rising
rates and a flattening yield curve.
Economic activity continued to expand throughout the reporting period,
according to Beige Books published by the Fed. The nation's gross domestic
product, generally considered the broadest measure of economic activity, grew at
an annualized rate of 3.3% in the second quarter and 3.7% in the third quarter
of 2004. According to the Department of Labor, 1.05 million jobs were created
during the reporting period. However, a slowdown in job growth led to declining
consumer confidence in August and September, according to The Conference Board.
At the close of the reporting period, the unemployment rate stood at 5.4%.
The September Beige Book reported that the economy continued to improve in
July and August, with 11 districts reporting increased activity levels during
the summer. All but one district reported an increase in manufacturing activity.
Labor markets remained slack across the nation, with few reports of occupational
shortages, while retail sales improved modestly in July and August, according to
the Beige Book report.
YOUR INVESTMENT PORTFOLIO
For the six-month period ended September 30, 2004, the seven-day SEC and monthly
yields for the Tax-Free Cash Reserve Portfolio's Reserve Class were 0.40% and
0.28%, respectively. The seven-day SEC yield and monthly yield represent
annualized results for the period, net of fees and expenses, and exclude any
realized capital gains or losses. Yields will fluctuate. Had the advisor and
distributor not waived fees and/or reimbursed expenses, performance would have
==================================
PORTFOLIO COMPOSITION BY MATURITY
In days, as of 9/30/04
1-7 75.5%
8-14 2.6
15-60 7.7
61-120 6.7
121-180 1.8
181-240 0.7
241+ 5.0
The number of days to maturity of
each holding is determined in
accordance with the provisions of
Rule 2a-7 under the Investment
Company Act of 1940.
==================================
[AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark--
(continued)
The views and opinions been lower. Through a combination of short-term
expressed in this letter cash management vehicles and selective use of a
are those of A I M longer maturity schedule for higher yields, the
Advisors, Inc. These views portfolio continued to provide relatively
and opinions are subject to attractive returns. The weighted average maturity
change at any time based on (WAM) remained in the 25- to 42-day range; at the
factors such as market and close of the reporting period, the WAM stood at 35
economic conditions. These days. The portfolio continued to maintain a
views and opinions may not relatively short maturity structure to take
be relied upon as advantage of any sudden rise in market yields.
investment advice or
recommendations, or as an The portfolio continued to hold the highest
offer for a particular credit-quality ratings given by three widely known
security. Statements of credit rating agencies: AAAm from Standard &
fact are from sources Poor's, Aaa from Moody's and AAA from
considered reliable, but FitchRatings. Fund ratings are subject to change
A I M Advisors, Inc. makes and are based on several factors including an
no representation or analysis of a portfolio's overall credit quality,
warranty as to their market price exposure and management.
completeness or accuracy.
Although historical The Tax-Free Cash Reserve Portfolio seeks to
performance is no guarantee provide as high a level of tax-exempt income as is
of future results, these consistent with preservation of capital and
insights may help you maintenance of liquidity by investing in
understand our investment high-quality, short-term municipal obligations.
management philosophy. The portfolio invests solely in securities that,
at the time of investment, are "First Tier," as
defined in Rule 2a-7 under the Investment Company
THIS REPORT MUST BE Act of 1940.
ACCOMPANIED OR PRECEDED BY
A CURRENTLY EFFECTIVE FUND IN CONCLUSION
PROSPECTUS, WHICH CONTAINS
MORE COMPLETE INFORMATION, Despite raising the federal funds rate for the
INCLUDING SALES CHARGES AND third time since June 24, as the reporting period
EXPENSES. READ IT CAREFULLY ended, the Fed believed that monetary policy
BEFORE YOU INVEST. remains accommodative. After the September rate
increase, the Fed stated that it expects
underlying inflation to be relatively low, but
PERFORMANCE QUOTED IS PAST that it would "respond to changes in economic
PERFORMANCE AND CANNOT prospects as needed to maintain price stability."
GUARANTEE COMPARABLE FUTURE
RESULTS; CURRENT We are pleased to send you this report on your
PERFORMANCE MAY BE LOWER OR investment. AIM is committed to the primary goals
HIGHER. VISIT of safety, liquidity and yield in institutional
AIMINVESTMENTS.COM FOR THE fund management. We are also dedicated to customer
MOST RECENT MONTH-END service. Should you have comments or questions
PERFORMANCE. about this report, please contact one of our
representatives at 800-659-1005.
AN INVESTMENT IN THE FUND Sincerely,
IS NOT INSURED OR
GUARANTEED BY THE FEDERAL /s/ ROBERT H. GRAHAM
DEPOSIT INSURANCE -------------------------------------
CORPORATION OR ANY OTHER Robert H. Graham
GOVERNMENT AGENCY. ALTHOUGH Chairman, A I M Management Group Inc.
THE FUND SEEKS TO PRESERVE
THE VALUE OF YOUR Beginning with fiscal periods ending after
INVESTMENT AT $1.00 PER December 31, 2004, the fund files its complete
SHARE, IT IS POSSIBLE TO schedule of portfolio holdings with the Securities
LOSE MONEY BY INVESTING IN and Exchange Commission ("SEC") for the first and
THE FUND. third quarters of each fiscal year on Form N-Q.
The fund's Form N-Q filings are available on the
SEC's website at http://www.sec.gov. Copies of the
fund's Forms N-Q may be reviewed and copied at the
SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549-0102. You can obtain
information on the operation of the Public
Reference Room, including information about
duplicating fee charges, by calling 1-202-942-8090
or by electronic request at the following E-mail
address: publicinfo@sec.gov. The SEC file numbers
for the fund are 8112731 and 2-58286. The fund's
most recent portfolio holdings, as filed on Form
N-Q, are also available at www.aiminvestments.com.
2
INFORMATION ABOUT YOUR FUND'S EXPENSES
EXAMPLE
As a shareholder of the fund, you incur ongoing costs, including management
fees; distribution and/or service fees (12b-1); and other fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the fund and to compare these costs with ongoing costs of investing
in other mutual funds. The example is based on an investment of $1,000 invested
at the beginning of the period and held for the entire period, April 1, 2004
- -September 30, 2004.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use this information to compare the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
================================================================================
<Table>
<Caption>
HYPOTHETICAL
ACTUAL (5% ANNUAL RETURN
BEFORE EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING
(04/01/04) (09/30/04)(1) PERIOD(2) (09/30/04) PERIOD(2)
RESERVE
CLASS $1,000.00 $1,000.50 $5.27 $1,019.80 $5.32
</Table>
(1) The actual ending account value is based on the actual total return of the
fund for the period April 1, 2004 to September 30, 2004 after actual expenses
and will differ from the hypothetical ending account value which is based on the
fund's expense ratio and a hypothetical annual return of 5% before expenses. The
actual cumulative return at net asset value for the period April 1, 2004 to
September 30, 2004 was 0.05% for Reserve Class shares.
(2) Expenses are equal to the fund's annualized expense ratio (1.05% for Reserve
Class shares) multiplied by the average account value over the period,
multiplied by 183/365 (to reflect the one-half year period).
================================================================================
3
SCHEDULE OF INVESTMENTS
September 30, 2004
(Unaudited)
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS-100.40%
ALABAMA-1.62%
Birmingham (City of) Public Parks &
Recreation Board
(Children's Zoo Project); VRD Series 2002
RB
(LOC-AmSouth Bank)
1.84%, 05/01/07(b(c) -- VMIG-1 $ 2,925 $ 2,925,000
- -------------------------------------------------------------------------------------------
Birmingham (City of) Public Parks &
Recreation Board
(YMCA Project); Refunding VRD Series 1996
RB
(LOC-AmSouth Bank)
1.84%, 06/01/16(b)(c) -- VMIG-1 1,990 1,990,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Birmingham
Waterworks & Sewer Board);
VRD Series 2002-6009 Class A COP
(Acquired 11/05/02; Cost $4,100,000)
1.75%, 01/01/43(c)(d)(e) A-1+ -- 4,100 4,100,000
- -------------------------------------------------------------------------------------------
VRD Series 2003-0007 Class A COP
(Acquired 04/16/03; Cost $7,370,000)
1.75%, 01/01/43(c)(d)(e) A-1+ -- 7,370 7,370,000
- -------------------------------------------------------------------------------------------
Homewood (City of) Medical Clinic Board
(Lakeshore Foundation Project); Lease
Revenue VRD Series 2000 RB
(LOC-AmSouth Bank)
1.84%, 11/01/24(b)(c) A-1 -- 6,046 6,046,000
- -------------------------------------------------------------------------------------------
Mobile (City of); Port City Medical Clinic
Board (Infirmary Health); VRD Series 1998 B
RB
1.71%, 02/01/25(c)(f) A-1 VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Montgomery (City of) Industrial Development
Board
(Industrial Partners Project); Refunding
VRD Series 1989 IDR
(LOC-SunTrust Bank)
1.73%, 01/01/07(b)(c) -- Aa2 635 635,000
- -------------------------------------------------------------------------------------------
Oxford (City of); Unlimited Tax VRD Series
2003 GO Wts.
(LOC-Branch Banking & Trust)
1.73%, 07/01/15(b)(c) -- VMIG-1 5,180 5,180,000
- -------------------------------------------------------------------------------------------
Ridge (City of) Improvement District; Special
Assessment VRD Series 2000 RB (LOC-AmSouth
Bank)
1.73%, 10/01/25(b)(c) -- VMIG-1 13,335 13,335,000
- -------------------------------------------------------------------------------------------
Tuscaloosa (City of) Educational Building
Authority (Stillman College Project);
Refunding Capital Improvement VRD Series
2002 A RB (LOC-AmSouth Bank)
1.84%, 10/01/23(b)(c) -- VMIG-1 500 500,000
===========================================================================================
47,081,000
===========================================================================================
</Table>
F-1
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ALASKA-0.13%
Alaska (State of) Industrial Development &
Export Authority
(Safeway Inc. Projects); Refunding VRD
Series 1991 IDR
(LOC-Deutsche Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1 -- $ 1,895 $ 1,895,000
- -------------------------------------------------------------------------------------------
Alaska (State of) Industrial Development
Authority
(Alaska Hotel Properties Inc. Project); VRD
Series 1986 IDR
(LOC-Royal Bank of Scotland)
(Acquired 12/17/02; Cost $800,000)
1.70%, 06/01/06(b)(c)(d) -- Aa1 800 800,000
- -------------------------------------------------------------------------------------------
Matanuska-Susitna (Borough of); Unlimited Tax
Series 1998 A GO
4.50%, 03/01/05(f) AAA Aaa 1,000 1,012,718
===========================================================================================
3,707,718
===========================================================================================
ARIZONA-1.43%
Apache (County of) Industrial Development
Authority
(Tucson Electric Power Co.); Floating Rate
Series 1982 A IDR
(LOC-Credit Suisse First Boston)
1.75%, 12/15/18(b)(c) A-1 VMIG-1 6,625 6,625,000
- -------------------------------------------------------------------------------------------
Casa Grande (City of) Industrial Development
Authority (Center Park Apartments Project);
Refunding Multi-Family Housing VRD Series
2001 A IDR (CEP-Federal National Mortgage
Association)
1.72%, 06/15/31(c) -- VMIG-1 2,010 2,010,000
- -------------------------------------------------------------------------------------------
Casa Grande (City of) Industrial Development
Authority (Quail Gardens Apartments);
Refunding Multi-Family Housing VRD Series
2001 A IDR (CEP-Federal National Mortgage
Association)
1.72%, 06/15/31(c) -- VMIG-1 1,550 1,550,000
- -------------------------------------------------------------------------------------------
Phoenix (City of) Civic Improvement Corp.;
Wastewater System Series 2003 BAN
1.22%, 11/12/04 A-1+ P-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
1.23%, 12/16/04 A-1+ P-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
1.27%, 01/10/05 A-1+ P-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Phoenix (City of) Industrial Development
Authority
(Lynwood Apartments Project); Refunding VRD
Series 1994 IDR
(CEP-Federal Home Loan Bank)
1.75%, 10/01/25(c) A-1+ -- 6,020 6,020,000
- -------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Tucson Electric Power
Co.-Irvington Road Project); VRD Series
1982 IDR (LOC-Credit Suisse First Boston)
1.68%, 10/01/22(b)(c) A-1 VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
University of Arizona (University of Arizona
Projects);
VRD Series 2004 B COP
1.64%, 06/01/31(c)(f) A-1+ VMIG-1 2,550 2,550,000
===========================================================================================
41,755,000
===========================================================================================
</Table>
F-2
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ARKANSAS-0.09%
Pulaski (County of) Public Facilities Board
(Health Facilities-Central Arkansas
Radiation Therapy Inc. Project);
Educational Facilities VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.75%, 07/01/08(b)(c)(i) -- -- $ 2,500 $ 2,500,000
===========================================================================================
CALIFORNIA-0.05%
San Diego (County of) (Friends of Chabad
Lubavitch);
VRD Series 2003 COP (LOC-Comerica Bank)
1.78%, 01/01/23(b)(c)(i) -- -- 1,500 1,500,000
===========================================================================================
COLORADO-2.39%
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Art Museum
Project); VRD Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 01/01/33(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Seminary
Project); VRD Series 2004 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 07/01/24(b)(c) A-1+ -- 1,200 1,200,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (National Cable
Television Center & Museum Project);
VRD Series 1999 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 10/01/06(b)(c) A-1+ -- 1,505 1,505,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority
(Regis Jesuit High School Project); VRD
Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 12/01/33(b)(c) A-1+ -- 5,015 5,015,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Arapahoe House Project); VRD Series 2004 A
RB
(LOC-Wells Fargo Bank N.A.)
1.76%, 04/01/24(b)(c) A-1+ -- 1,200 1,200,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Christian Living Project); Refunding VRD
Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.74%, 01/01/31(b)(c) A-1+ -- 3,400 3,400,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Craig Hospital Project); Refunding VRD
Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 12/01/20(b)(c) A-1+ -- 5,605 5,605,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Golden West Manor Inc. Project); VRD
Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.74%, 07/01/32(b)(c) A-1+ -- 4,210 4,210,000
- -------------------------------------------------------------------------------------------
Colorado Springs (City of) (Pikes Peak Mental
Health);
VRD Series 2003 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 03/15/23(b)(c) A-1+ -- 3,570 3,570,000
- -------------------------------------------------------------------------------------------
</Table>
F-3
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
COLORADO-(CONTINUED)
Denver (City & County of) (Kentucky Circle
Village Project); VRD Series 2000 RB
(LOC-Mountain States Bank, U.S. Bank N.A.)
1.74%, 10/01/29(b)(c) A-1+ -- $ 1,740 $ 1,740,000
- -------------------------------------------------------------------------------------------
Idaho Springs (City of); (Safeway Inc.
Project);
Refunding VRD Series 1993 IDR (LOC-Deutsche
Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1+ -- 940 940,000
- -------------------------------------------------------------------------------------------
Jefferson (County of) School District No.
R-001; Series 2004 A TAN
3.00%, 06/30/05 SP-1+ MIG-1 30,000 30,332,309
- -------------------------------------------------------------------------------------------
Lafayette (City of) Exempla Improvement
District
(Special Improvement No. 2-01);
Refunding Special Assessment VRD Series
2002 RB
(LOC-Wells Fargo Bank N.A.)
1.72%, 12/01/22(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (City & County of
Denver Water);
VRD Series 2003 PT-1872 RB
(Acquired 05/29/03; Cost $7,830,000)
1.73%, 12/01/22(c)(d)(e)(i) -- -- 7,830 7,830,000
- -------------------------------------------------------------------------------------------
Regional Transportation (District of);
Refunding Sales Tax Series 2003 A RB
3.00%, 11/01/04(f) AAA Aaa 1,000 1,001,613
===========================================================================================
69,548,922
===========================================================================================
CONNECTICUT-0.09%
Connecticut (State of) Development Authority
(Central Vermont Public Service); Floating
Rate Series 1985 PCR
(LOC-Royal Bank of Scotland)
1.35%, 12/01/15(b)(j) A-1+ -- 1,400 1,400,000
- -------------------------------------------------------------------------------------------
Connecticut (State of) Development Authority
(Connecticut Water Co. Project); Refunding
Water Facilities VRD Series 2004 B RB
(LOC-Royal Bank of Scotland)
1.70%, 09/01/28(b)(c) A-1+ -- 1,125 1,125,000
===========================================================================================
2,525,000
===========================================================================================
DELAWARE-0.28%
Delaware (State of) Economic Development
Authority
(Independent School Inc. Project); VRD
Series 2003 RB
(LOC-Royal Bank of Scotland)
1.69%, 07/01/33(b)(c) A-1+ -- 8,250 8,250,000
===========================================================================================
DISTRICT OF COLUMBIA-0.89%
District of Columbia (Consortium Issue); VRD
Series 1998 RB
(LOC-Wachovia Bank N.A.)
1.69%, 07/01/23(b)(c) A-1 -- 15,755 15,755,000
- -------------------------------------------------------------------------------------------
District of Columbia (National Children's
Center Inc.);
VRD Series 1993 RB (LOC-Bank of America
N.A.)
1.70%, 02/01/20(b)(c) A-1+ -- 3,385 3,385,000
- -------------------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA-(CONTINUED)
District of Columbia (Resources for the
Future Inc.);
VRD Series 1998 RB (LOC-Wachovia Bank N.A.)
(Acquired 09/26/03; Cost $2,015,000)
1.75%, 08/01/29(b)(c)(d) A-1 -- $ 2,015 $ 2,015,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (District of Columbia
Water & Sewer Authority); VRD Series 2003
A12 RB
(Acquired 02/24/03; Cost $4,655,000)
1.74%, 10/01/17(c)(d)(e) -- VMIG-1 4,655 4,655,000
===========================================================================================
25,810,000
===========================================================================================
FLORIDA-3.88%
ABN AMRO Munitops Ctfs. Trust (County of
Escambia);
Refunding Florida Non-AMT VRD Series
2002-24 Ctfs.
(Acquired 10/24/02; Cost $5,000,000)
1.73%, 10/01/10(c)(d)(e) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Capital Projects Finance Authority (Capital
Projects Loan Program); VRD Series 1997 A
RB
1.74%, 08/01/17(c)(f) A-1+ -- 1,050 1,050,000
- -------------------------------------------------------------------------------------------
Clay (County of) Housing Finance Authority
(Bluff Housing); Refunding Multi-Family
Housing VRD Series 2001 A RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 11/01/14(c) A-1+ -- 1,150 1,150,000
- -------------------------------------------------------------------------------------------
Collier (County of) Health Facilities
Authority
(Cleveland Clinic Health); VRD Hospital
Series 2003 C-2 BAN
(LOC-JPMorgan Chase Bank)
1.55%, 11/22/04(c) A-1+ VMIG-1 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Collier (County of) Industrial Development
Authority
(Redlands Christian Migrant); VRD Series
2001 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/26(b)(c)(i) -- -- 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Duval (County of) Housing Finance Authority
(Sunbeam Road Apartments Project);
Refunding Multi-Family Housing VRD Series
1997 RB
(LOC-Bank of America N.A.)
1.70%, 07/01/25(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Jacksonville (City of) Health Facilities
Authority (Baptist Medical Center Project);
VRD Hospital Series 2003 B RB
(LOC-Bank of America N.A.)
0.98%, 12/22/04(b)(g)(k) A-1+ -- 19,000 19,000,000
- -------------------------------------------------------------------------------------------
Jacksonville (City of) Health Facilities
Authority
(Samuel C. Taylor Foundation Project); VRD
Series 1998 RB (LOC-Bank of America N.A.)
(Acquired 02/20/01; Cost $2,800,000)
1.75%, 12/01/23(b)(c)(d)(i) -- -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
</Table>
F-5
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
Jacksonville (City of) Health Facilities
Authority (University of Florida
Jacksonville Physicians, Inc.); VRD Series
2002 RB
(LOC-Bank of America N.A.)
1.73%, 06/01/22(b)(c) -- VMIG-1 $12,140 $ 12,140,000
- -------------------------------------------------------------------------------------------
Lakeland (City of) Electric & Water;
Refunding Series 1992 RB
5.63%, 10/01/04(l) NRR -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Marion (County of) Hospital District (Munroe
Regional Health System); Health System
Improvement VRD Series 2000 RB
(LOC-AmSouth Bank)
1.72%, 10/01/30(b)(c) -- VMIG-1 13,375 13,375,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (State of Florida
Mid-Bay Bridge Authority); VRD Series 2002
PT-1531 RB
(Acquired 10/10/02; Cost $9,100,000)
1.72%, 10/01/18(c)(d)(e) A-1+ -- 9,100 9,100,000
- -------------------------------------------------------------------------------------------
Miami-Dade (County of) Educational Facilities
Authority
(Carlos Albizu University Project); VRD
Series 2000 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/25(b)(c)(i) -- -- 9,400 9,400,000
- -------------------------------------------------------------------------------------------
Miami-Dade (County of) Industrial Development
Authority
(Palmer Trinity Private School Project);
VRD Series 1999 IDR
(LOC-Bank of America N.A.)
1.75%, 12/01/19(b)(c)(i) -- -- 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Florida Department of
Environmental Protection); Floating Rate
Trust Ctfs. VRD Series 2002-722 RB
(Acquired 11/13/02; Cost $9,850,000)
1.73%, 07/01/22(c)(d)(e) A-1 -- 9,850 9,850,000
- -------------------------------------------------------------------------------------------
North Miami (City of) Educational Facilities
(Miami Country Day School Project); VRD
Series 1999 RB
(LOC-Bank of America N.A.)
1.75%, 08/01/19(b)(c)(i) -- -- 1,550 1,550,000
- -------------------------------------------------------------------------------------------
Orange (County of) Health Facilities
Authority
(Adventist Health System); VRD Series 1992
RB
(LOC-SunTrust Bank)
1.70%, 11/15/14(b)(c) A-1+ VMIG-1 1,155 1,155,000
- -------------------------------------------------------------------------------------------
Orange (County of) Health Facilities
Authority (Presbyterian Retirement
Communities Project); VRD Series 1998 RB
(LOC-Bank of America N.A.)
(Acquired 01/29/02-09/01/04; Cost
$5,129,000)
1.75%, 11/01/28(b)(c)(d)(i) -- -- 5,129 5,129,000
- -------------------------------------------------------------------------------------------
Palm Beach (County of) Educational Facilities
Authority (Atlantic College Project);
Educational Facilities VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/31(b)(c)(i) -- -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
Pasco (County of); Refunding Water & Sewer
Series 2002 RB
5.00%, 10/01/04(f) AAA Aaa 1,000 1,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-6
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
Tampa (City of) (Agency for Community
Treatment DACCO Project); VRD Series 2001
RB (LOC-Bank of America N.A.)
1.75%, 07/01/22(b)(c)(i) -- -- $ 5,080 $ 5,080,000
- -------------------------------------------------------------------------------------------
University of North Florida Foundation, Inc.
(Parking System);
VRD Series 1998 RB (LOC-Wachovia Bank N.A.)
1.73%, 05/01/28(b)(c) A-1 -- 800 800,000
===========================================================================================
113,079,000
===========================================================================================
GEORGIA-5.07%
Athens-Clarke (County of) Unified Government
Development Authority (University of
Georgia Athletic Association Project);
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.76%, 08/01/33(b)(i)(m) -- -- 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Clayton (County of) Development Authority
(Delta Airlines Project); Special
Facilities VRD Series 2000 A RB
(CEP-General Electric Capital Corp.)
1.71%, 06/01/29(c) A-1+ VMIG-1 7,500 7,500,000
- -------------------------------------------------------------------------------------------
Cobb (County of) Housing Authority (Tamarron
Apartments Project); Refunding Multi-Family
Housing VRD Series 2003 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 03/01/24(c) A-1+ -- 5,050 5,050,000
- -------------------------------------------------------------------------------------------
Cobb (County of) School District; Limited Tax
Series 2004 GO
1.75%, 12/31/04 -- MIG-1 20,000 20,038,500
- -------------------------------------------------------------------------------------------
DeKalb (County of) Hospital Authority
(DeKalb Medical Center Inc. Project); VRD
Series 2000 B RB
(LOC-Wachovia Bank N.A.)
1.69%, 10/01/25(b)(c) -- VMIG-1 10,925 10,925,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Georgia);
VRD Series 2000-1001 C COP (Acquired
07/26/00; Cost $20,000,000)
1.75%, 07/01/15(c)(d)(e) A-1+ -- 20,000 20,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Dalton); Utilities VRD
Series 2003 A02 RB
(Acquired 08/25/04; Cost $4,895,000)
1.74%, 01/01/12(c)(d)(e) -- VMIG-1 4,895 4,895,000
- -------------------------------------------------------------------------------------------
Fulton (County of) Development Authority
(Bridgeway Foundation for Education
Project); Educational Facilities VRD Series
2000 RB
(LOC-Wachovia Bank N.A.)
1.74%, 06/01/15(b)(c) A-1 -- 1,400 1,400,000
- -------------------------------------------------------------------------------------------
Fulton (County of) Hospital Authority
(Northside Hospital Inc.);
VRD Series 2003 A RAN (LOC-Wachovia Bank
N.A.)
1.69%, 10/01/18(b)(c) -- VMIG-1 28,860 28,860,000
- -------------------------------------------------------------------------------------------
Georgia (State of); Unlimited Tax Series 1999
D GO
5.80%, 11/01/04 AAA Aaa 1,400 1,405,461
- -------------------------------------------------------------------------------------------
Gwinnett (County of) School District; Limited
Construction Sales Tax Notes Series 2004 GO
1.75%, 12/30/04 -- MIG-1 15,000 15,025,977
- -------------------------------------------------------------------------------------------
</Table>
F-7
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
GEORGIA-(CONTINUED)
Houston (County of) Hospital Authority; VRD
Series 2002 RB
(LOC-Wachovia Bank N.A.)
1.69%, 10/01/14(b)(c) A-1 -- $ 9,230 $ 9,230,000
- -------------------------------------------------------------------------------------------
Private Colleges & Universities Authority
(Mercer University Project); VRD Series
2003 RB (LOC-Branch Banking & Trust)
1.82%, 10/01/32(b)(c) -- VMIG-1 7,260 7,260,000
- -------------------------------------------------------------------------------------------
Roswell (City of) Housing Authority (Rosemont
Apartments Project); Refunding Multi-Family
Housing VRD Series 2003 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 01/01/34(c) A-1+ -- 10,555 10,555,000
- -------------------------------------------------------------------------------------------
Smyrna (City of) Hospital Authority
(Ridgeview Institute Inc. Project); VRD
Series 2002 RB (LOC-Wachovia Bank N.A.)
1.74%, 11/01/27(b)(c) -- VMIG-1 2,210 2,210,000
===========================================================================================
147,854,938
===========================================================================================
HAWAII-0.37%
Eagle Tax Exempt Trust (State of Hawaii); VRD
Series 2000-1101 COP (Acquired 01/11/01;
Cost $6,000,000)
1.75%, 12/01/16(c)(d)(e) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Hawaii);
Unlimited Tax VRD Series 2003 A16 GO
(Acquired 02/27/03; Cost $3,885,000)
1.74%, 07/01/18(c)(d)(e) -- VMIG-1 3,885 3,885,000
- -------------------------------------------------------------------------------------------
Hawaii (State of); Refunding Unlimited Tax
Series 1997 CO GO
6.00%, 03/01/05(f) AAA Aaa 1,000 1,020,421
===========================================================================================
10,905,421
===========================================================================================
IDAHO-0.47%
Custer (County of) Pollution Control (Amoco
Oil Co.-Standard Oil Industry Project); VRD
Series 1983 RB
0.90%, 04/01/05(g)(h) A-1+ Aa1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Magic Valley Healthcare System Inc.
(Magic Valley Regional Medical Center
Project);
VRD Series 2001 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 12/01/21(b)(c) -- VMIG-1 3,640 3,640,000
===========================================================================================
13,640,000
===========================================================================================
ILLINOIS-14.26%
ABN AMRO Munitops Ctfs. Trust (City of
Chicago); Refunding
Multi-State Non-AMT VRD Limited Tax Series
2001-34 Ctfs. (Acquired 11/15/01; Cost
$10,000,000)
1.75%, 07/01/07(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Bear Stearns Municipal Securities Trust Ctfs.
(State of Illinois Sales Tax); VRD Series
1998-25 Class A RB
(Acquired 08/26/99; Cost $10,000,000)
1.75%, 03/15/07(c)(d)(e) A-1 Aa2 10,000 10,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-8
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Bear Stearns Municipal Securities Trust Ctfs.
(State of Illinois);
VRD Series 2002-190 Class A RB
(Acquired 05/06/02; Cost $10,130,000)
1.75%, 06/05/14(c)(d)(e) A-1 -- $10,130 $ 10,130,000
- -------------------------------------------------------------------------------------------
Chicago (City of); VRD Limited Tax Obligation
Tender Series 2004 GO (LOC-State Street
Bank & Trust Co.)
1.05%, 01/13/05(b)(g)(k) SP-1+ MIG-1 4,000 4,000,000
- -------------------------------------------------------------------------------------------
Chicago (City of); VRD Unlimited Tax Series
2002 B GO
1.70%, 01/01/37(c)(f) A-1+ VMIG-1 8,400 8,400,000
- -------------------------------------------------------------------------------------------
Crestwood (City of) (Trinity Christian
College);
VRD Series 2003 RB (LOC-Fifth Third Bank)
1.51%, 09/01/28(b)(c) A-1+ -- 3,775 3,775,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago Water
& Sewer); VRD Series 2001-1308 COP
(Acquired 12/12/01; Cost $8,655,000)
1.75%, 11/01/26(c)(d)(e) A-1+ -- 8,655 8,655,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago); VRD
Series 2001-1305 COP (Acquired 04/02/01;
Cost $4,950,000)
1.84%, 01/01/35(c)(d)(e) A-1+ -- 4,950 4,950,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (County of Cook
Regional Transportation Authority); VRD
Series 2000-1303 COP
(Acquired 03/26/01; Cost $19,000,000)
1.75%, 07/01/23(c)(d)(e) A-1+ -- 19,000 19,000,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Illinois);
VRD Unlimited Tax Series 2003-0023 Class A
COP
(Acquired 06/12/03; Cost $3,775,000)
1.75%, 06/01/15(c)(d)(e) A-1+ -- 3,775 3,775,000
- -------------------------------------------------------------------------------------------
VRD Series 2000-1304 COP (Acquired
06/27/00; Cost $7,340,000)
1.75%, 06/01/21(c)(d)(e) A-1+ -- 7,340 7,340,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Chicago Park
District);
VRD Unlimited Tax Series 2002-1306 Class A
COP
(Acquired 05/02/02; Cost $5,500,000)
1.75%, 01/01/29(c)(d)(e) A-1+ -- 5,500 5,500,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago
Public Building Commission); VRD Series
2003-0015 Class A COP (Acquired 05/14/03;
Cost $2,800,000)
1.75%, 12/01/14(c)(d)(e) A-1+ -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Central Lake County
Joint Action Water Agency); VRD Series 2003
B18 RB
(Acquired 02/19/03; Cost $3,155,000)
1.74%, 05/01/20(c)(d)(e) -- VMIG-1 3,155 3,155,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Chicago Board of
Education);
VRD Unlimited Tax Series 2000 A4 GO
(Acquired 11/12/03; Cost $4,845,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 4,845 4,845,000
- -------------------------------------------------------------------------------------------
</Table>
F-9
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
First Union MERLOTs (City of Chicago); VRD
Limited Tax Series 2000 A12 GO (Acquired
10/13/00; Cost $10,000,000)
1.74%, 01/01/23(c)(d)(e) -- VMIG-1 $10,000 $ 10,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Chicago
Emergency Telephone System); VRD Limited
Tax Series 2002 A44 GO
(Acquired 08/02/02; Cost $7,855,000)
1.74%, 01/01/20(c)(d)(e) -- VMIG-1 7,855 7,855,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Cook County Regional
Transportation Authority);
VRD Unlimited Tax Series 2001 A93 GO
(Acquired 10/10/01; Cost $3,670,000)
1.74%, 07/01/27(c)(d)(e) -- VMIG-1 3,670 3,670,000
- -------------------------------------------------------------------------------------------
VRD Unlimited Tax Series 2002 A41 GO
(Acquired 07/25/02; Cost $17,825,000)
1.74%, 06/01/17(c)(d)(e) -- VMIG-1 17,825 17,825,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Cook County); VRD
Unlimited Tax Series 2003 B11 GO (Acquired
01/29/03; Cost $7,000,000)
1.74%, 11/15/25(c)(d)(e) -- VMIG-1 7,000 7,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Illinois); VRD
Unlimited Tax Series 2001 A124 GO (Acquired
11/26/01; Cost $7,915,000)
1.74%, 11/01/26(c)(d)(e) A-1 -- 7,915 7,915,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (University of Illinois);
VRD Series 2000 S GO (Acquired 03/20/00;
Cost $7,400,000)
1.74%, 04/01/30(c)(d)(e) -- VMIG-1 7,400 7,400,000
- -------------------------------------------------------------------------------------------
Glendale Heights (City of) (Glendale Lakes
Project);
Refunding Multi-Family Housing VRD Series
2000 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.69%, 03/01/30(c) A-1+ -- 14,845 14,845,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(American College of Surgeons); VRD Series
1996 RB
(LOC-Northern Trust Co.)
1.60%, 08/01/26(b)(c) A-1+ -- 7,298 7,298,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (BAPS Inc. Project); VRD Series
2002 RB (LOC-Comerica Bank)
1.70%, 06/01/17(b)(c) A-1 -- 9,000 9,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(British Home for Retired Men & Women);
VRD Series 2001 RB (LOC-ABN AMRO Bank N.V.)
1.71%, 11/01/27(b)(c) A-1 -- 9,120 9,120,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Chicago Shakespeare Theater Project); VRD
Series 1999 RB
(LOC-ABN AMRO Bank N.V.) (Acquired
09/24/03; Cost $4,100,000)
1.71%, 01/01/19(b)(c)(d) A-1 -- 4,100 4,100,000
- -------------------------------------------------------------------------------------------
</Table>
F-10
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Development Finance
Authority (Embers Elementary School
Project); Educational Facilities VRD Series
2002 RB (LOC-ABN AMRO Bank N.V.)
(Acquired 11/04/03; Cost $2,250,000)
1.72%, 04/01/32(b)(c)(d) A-1 -- $ 2,250 $ 2,250,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Evanston Northwestern); VRD Series 2001 C
RB
1.70%, 05/01/31(c) A-1+ VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Glenwood School for Boys); VRD Series 1998
RB
(LOC-Bank of Montreal)
1.70%, 02/01/33(b)(c) A-1+ -- 2,100 2,100,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Institute of Gas Technology Project); VRD
Series 1999 IDR
(LOC-Bank of Montreal)
1.80%, 09/01/24(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Lyric Opera of Chicago Project); VRD
Series 1994 RB
(LOC-Northern Trust Co., Bank of Montreal,
JPMorgan Chase Bank)
1.70%, 12/01/28(b)(c) A-1+ VMIG-1 30,000 30,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Mount Carmel High School Project); VRD
Series 2003 RB
(LOC-JPMorgan Chase Bank)
1.70%, 07/01/33(b)(c) -- VMIG-1 5,600 5,600,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Museum of Contemporary Art Project); VRD
Series 1994 RB
(LOC-JPMorgan Chase Bank, Northern Trust
Co.)
1.70%, 02/01/29(b)(c) A-1 VMIG-1 14,950 14,950,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(North Shore Country Day School); VRD
Series 2003 RB
(LOC-Northern Trust Co.)
1.70%, 07/01/33(b)(c) -- VMIG-1 2,825 2,825,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Oak Park Residence Corp. Project); VRD
Series 2001 RB
(LOC-ABN AMRO Bank N.V.) (Acquired
01/29/03; Cost $2,975,000)
1.71%, 07/01/41(b)(c)(d) A-1 -- 2,975 2,975,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Sacred Heart Schools Project); VRD Series
2003 RB
(LOC-Fifth Third Bank)
1.70%, 07/01/33(b)(c) -- VMIG-1 4,600 4,600,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (West Central Illinois
Educational Project); VRD Series 2002 RB
(LOC-JPMorgan Chase Bank)
1.70%, 09/01/32(b)(c) -- VMIG-1 4,800 4,800,000
- -------------------------------------------------------------------------------------------
</Table>
F-11
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Development Finance
Authority
(World Communications Inc.); VRD Series
2000 RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 08/01/15(b)(c) -- VMIG-1 $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (Aurora University); VRD Series
2002 RB (LOC-Fifth Third Bank)
1.75%, 03/01/32(b)(c) -- VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(Chicago Children's Museum); VRD Series
1994 RB
(LOC-JPMorgan Chase Bank)
1.70%, 02/01/28(b)(c) A-1 VMIG-1 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (DePaul University); VRD Series
1992 CP-1 RB (LOC-Northern Trust Co.)
1.70%, 04/01/26(b)(c) A-1+ VMIG-1 1,800 1,800,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(National Louis University); VRD Series
1999 B RB
(LOC-JPMorgan Chase Bank)
1.70%, 06/01/29(b)(c) A-1+ -- 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(University Pooled Financing Program); VRD
Series 1985 RB
1.70%, 12/01/05(c)(f) A-1 VMIG-1 1,050 1,050,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Alexian Brothers Health);
VRD Series 2004 RB (LOC-JPMorgan Chase
Bank)
1.67%, 04/01/35(b)(c) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Jewish
Charities);
VRD Series 2004 A RN (LOC-Bank of Montreal)
1.70%, 06/30/05(b)(c) A-1+ -- 7,630 7,630,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Kohl
Children's Museum);
VRD Series 2004 RB (LOC-Fifth Third Bank)
1.70%, 07/01/34(b)(c) -- VMIG-1 2,680 2,680,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Northwestern University);
VRD Sub-Series 2004 A RB
1.69%, 12/01/34(c) A-1+ VMIG-1 8,000 8,000,000
- -------------------------------------------------------------------------------------------
VRD Sub-Series 2004 B RB
1.70%, 12/01/34(c) A-1+ VMIG-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Bensenville Home Society); VRD Series 1989
A RB
(LOC-JPMorgan Chase Bank)
1.71%, 02/15/19(b)(c) A-1 -- 1,150 1,150,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Blessing Hospital);
VRD Series 1999 B RB
1.74%, 11/15/29(c)(f) A-1 VMIG-1 4,710 4,710,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Cradle Society Project); VRD
Series 1998 RB (LOC-JPMorgan Chase Bank)
1.70%, 04/01/33(b)(c) A-1+ -- 1,600 1,600,000
- -------------------------------------------------------------------------------------------
</Table>
F-12
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Health Facilities
Authority (Edward Hospital Obligated
Group); VRD Series 2001 C RB
1.71%, 02/01/34(c)(f) A-1 VMIG-1 $ 2,050 $ 2,050,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Franciscan Eldercare Project);
Refunding VRD Series 1996 E RB
(LOC-ABN AMRO Bank N.V.)
1.67%, 05/15/27(b)(c) A-1 -- 5,660 5,660,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Northwestern Memorial Hospital); VRD
Series 1995 RB
1.70%, 08/15/25(c) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Peace Memorial Ministries); VRD Series
2003 B RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 08/15/33(b)(c) A-1 -- 9,845 9,845,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Resurrection Health); VRD Series
1999 B RB
1.71%, 05/15/29(c)(f) A-1 VMIG-1 2,210 2,210,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(St. Luke's Medical Center); VRD Series
1998 B RB
1.71%, 11/15/23(c)(f) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority;
Revolving Fund Pooled VRD Series 1985 C RB
(LOC-JPMorgan Chase Bank)
1.70%, 08/01/15(b)(c) A-1+ VMIG-1 8,100 8,100,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Toll Highway Authority;
Refunding Toll Highway VRD Series 1998 B RB
1.75%, 01/01/16(c)(f) AAA VMIG-1 15,900 15,900,000
- -------------------------------------------------------------------------------------------
1.75%, 01/01/17(c)(f) AAA VMIG-1 4,600 4,600,000
- -------------------------------------------------------------------------------------------
Lombard (City of) (Clover Creek Apartments
Project);
VRD Multi-Family Housing Series 2000 RB
(CEP-Federal National Mortgage Association)
1.72%, 12/15/30(c) A-1+ -- 14,855 14,855,000
- -------------------------------------------------------------------------------------------
McCook (City of) (Illinois Saint Andrew
Society);
VRD Series 1996 A RB (LOC-Northern Trust
Co.)
1.72%, 12/01/21(b)(c) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Oak Forest (City of) (Homewood Pool-South
Suburban Mayors & Managers Association
Program); VRD Series 1989 RB
(LOC-Fifth Third Bank)
1.51%, 07/01/24(b)(c) -- VMIG-1 4,500 4,500,000
- -------------------------------------------------------------------------------------------
Orland Hills (City of); Multi-Family Housing
VRD Series 1995 A RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 12/01/04(b)(c) A-1 -- 1,470 1,470,000
===========================================================================================
415,763,000
===========================================================================================
</Table>
F-13
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
INDIANA-3.08%
ABN AMRO Munitops Ctfs. Trust (Township of
Wayne, County of Marion School Building
Corp.); Multi-State Non-AMT VRD Series
2003-27 RB (Acquired 11/12/03; Cost
$13,795,000)
1.76%, 07/15/11(c)(d)(e) -- VMIG-1 $13,795 $ 13,795,000
- -------------------------------------------------------------------------------------------
Brownsburg (City of) Independent School
Building Corp. No. 2;
First Mortgage Series 1995 RB
5.95%, 02/01/05(g)(l) AAA Aaa 1,700 1,761,041
- -------------------------------------------------------------------------------------------
First Union MERLOTs (County of Porter Jail
Building Corp.);
VRD Series 2001 A58 RB (Acquired 11/12/03;
Cost $9,415,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 9,415 9,415,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Bond Bank (Advanced
Program Notes); Series 2004 A RN
2.00%, 01/25/05 SP-1+ MIG-1 18,500 18,551,692
- -------------------------------------------------------------------------------------------
Indiana (State of) Bond Bank (Pike Township
Metropolitan School District); Series 1995
A RB
5.80%, 02/01/05(g)(l) AAA Aaa 2,750 2,821,138
- -------------------------------------------------------------------------------------------
Indiana (State of) Development Finance
Authority (Indiana Museum of Art);
Educational Facilities VRD Series 2004 RB
(LOC-JPMorgan Chase Bank)
1.70%, 02/01/39(b)(c) -- VMIG-1 3,000 3,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Educational Facilities
Authority
(Wabash College Project); Educational
Facilities VRD Series 2003 RB (LOC-JPMorgan
Chase Bank)
1.70%, 12/01/23(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Community Hospitals Project); VRD Series
2000 A RB
(LOC-Bank of America N.A.)
1.70%, 07/01/28(b)(c) A-1+ -- 9,815 9,815,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority (Community Mental
Health & Rehabilitation); VRD Series 1990
RB
(LOC-ABN AMRO Bank N.V.)
1.72%, 11/01/20(b)(c) A-1 -- 2,040 2,040,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Deaconess Hospital); VRD Series 2004 B RB
(LOC-Fifth Third Bank)
1.51%, 01/01/29(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Fayette Memorial Hospital Association);
VRD Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.77%, 10/01/32(b)(m) A-1+ -- 3,100 3,100,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Golden Years Homestead); VRD Series 2002 A
RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 06/01/25(b)(c) A-1+ -- 6,500 6,500,000
- -------------------------------------------------------------------------------------------
</Table>
F-14
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
INDIANA-(CONTINUED)
Indiana (State of) Health Facilities
Financing Authority
(Margaret Mary Community Hospital); VRD
Series 2004 A RB
(LOC-Fifth Third Bank)
1.77%, 12/01/29(b)(m) A-1+ -- $ 5,000 $ 5,000,000
- -------------------------------------------------------------------------------------------
Kokomo (City of) Hospital Authority (St.
Joseph's Hospital Center); Refunding
Hospital Series 1993 RB
6.35%, 08/15/05(g)(l) AAA Aaa 3,000 3,118,888
- -------------------------------------------------------------------------------------------
Monroe (County of) Hospital Authority;
Refunding VRD Hospital Series 1999 RB
1.69%, 05/01/11(c)(f) -- VMIG-1 3,900 3,900,000
===========================================================================================
89,817,759
===========================================================================================
IOWA-1.78%
Iowa (State of) Finance Authority Retirement
Community
(Deerfield Retirement Community); VRD
Series 2003 A RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 12/01/33(b)(c) A-1 -- 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Iowa (State of) Higher Education Loan
Authority
(Graceland Private College); VRD Series
2003 RB
(LOC-Bank of America N.A.)
1.75%, 02/01/33(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Iowa (State of) School Corps.; School Cash
Anticipation Program Series 2004 A Wts.
Ctfs.
3.00%, 06/30/05(f) -- MIG-1 10,000 10,103,360
- -------------------------------------------------------------------------------------------
Series 2004 B Wts. Ctfs.
2.00%, 01/28/05(f) -- MIG-1 18,000 18,045,776
- -------------------------------------------------------------------------------------------
Iowa City (City of) (ACT, Inc.); VRD Series
2001 RB
1.87%, 04/01/32(m) A-1+ -- 6,815 6,815,000
===========================================================================================
51,964,136
===========================================================================================
KANSAS-1.14%
Eagle Tax Exempt Trust (County of Wyandotte
Unified Government Utility System); VRD
Series 2004-0038 Class A COP (Acquired
09/08/04; Cost $5,000,000)
1.75%, 09/01/21(c)(d)(e) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Leawood (City of); Unlimited Tax Temporary
Notes Series 2004-2 GO
3.00%, 10/01/05 -- MIG-1 14,000 14,182,401
- -------------------------------------------------------------------------------------------
Lenexa (City of) Health Care Facilities
(Lakeview Village Inc.);
VRD Series 2002 B RB (LOC-ABN AMRO Bank
N.V.)
1.72%, 05/15/32(b)(c) A-1 -- 7,500 7,500,000
- -------------------------------------------------------------------------------------------
Olathe (City of) Recreational Facilities
(YMCA of Greater Kansas City Project); VRD
Series 2002 B RB (LOC-Bank of America N.A.)
1.75%, 11/01/18(b)(c) -- VMIG-1 3,100 3,100,000
- -------------------------------------------------------------------------------------------
</Table>
F-15
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
KANSAS-(CONTINUED)
Wichita (City of) Recreational Facilities
(YMCA of Wichita Project); VRD Series 1998
XI RB (LOC-Bank of America N.A.)
(Acquired 02/15/01; Cost $3,500,000)
1.75%, 08/01/09(b)(c)(d) A-1+ -- $ 3,500 $ 3,500,000
===========================================================================================
33,282,401
===========================================================================================
KENTUCKY-1.47%
Kentucky (State of) Asset/Liability
Commission;
General Funding Series 2004 A TRAN
3.00%, 06/29/05 SP-1+ MIG-1 15,000 15,159,010
- -------------------------------------------------------------------------------------------
Kentucky (State of) Area Developing Districts
Financing Trust
(Weekly Acquisition-Ewing); Lease Program
VRD Series 2000 RB (LOC-Wachovia Bank N.A.)
1.79%, 06/01/33(b)(c) A-1 -- 5,910 5,910,000
- -------------------------------------------------------------------------------------------
Newport (City of) Kentucky League of Cities
Funding Trust; Lease Program VRD Series
2002 RB (LOC-U.S. Bank N.A.)
1.53%, 04/01/32(b)(c) -- VMIG-1 20,000 20,000,000
- -------------------------------------------------------------------------------------------
Williamsburg (City of) Educational Building
(Cumberland Project); Refunding &
Improvement VRD Series 2002 RB
(LOC-Fifth Third Bank)
1.51%, 09/01/32(b)(c) A-1+ -- 1,790 1,790,000
===========================================================================================
42,859,010
===========================================================================================
LOUISIANA-0.95%
Eagle Tax Exempt Trust (City of New Orleans);
VRD Series 2000-1801 COP (Acquired
10/10/00; Cost $6,000,000)
1.75%, 12/01/21(c)(d)(e) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Louisiana (State of) Offshore Terminal
Authority (Loop LLC Project); Refunding
Deepwater Port Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.69%, 10/01/19(b)(c) A-1+ VMIG-1 16,400 16,400,000
- -------------------------------------------------------------------------------------------
Louisiana (State of) Public Facilities
Authority (Glen Retirement System Project);
VRD Series 2001 RB (LOC-AmSouth Bank)
(Acquired 08/15/01; Cost $3,380,000)
1.84%, 08/01/16(b)(c)(d) -- VMIG-1 3,380 3,380,000
- -------------------------------------------------------------------------------------------
Louisiana (State of); Unlimited Tax Series
1998 B GO
5.50%, 04/15/05(f) AAA Aaa 1,775 1,815,232
===========================================================================================
27,595,232
===========================================================================================
MAINE-0.29%
Maine (State of) Housing Authority; Mortgage
Purchase VRD Series 2003 E-1 RB
1.73%, 11/15/30(c)(f) A-1+ VMIG-1 8,585 8,585,000
===========================================================================================
</Table>
F-16
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MARYLAND-0.96%
Anne Arundel (County of); Unlimited Tax
Series 2002 GO
4.25%, 03/01/05 AA+ Aa1 $ 1,740 $ 1,762,823
- -------------------------------------------------------------------------------------------
Frederick (County of) Retirement Community
(Buckingham's Choice Inc. Project); VRD
Series 1997 C RB
(LOC-Branch Banking & Trust)
1.75%, 01/01/27(b)(c) A-1 -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Hyattsville (City of) (Safeway Inc.
Projects); Refunding VRD Series 1991 IDR
(LOC-Deutsche Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1 -- 740 740,000
- -------------------------------------------------------------------------------------------
Maryland (State of) Economic Development
Corp.
(YMCA of Central Maryland Inc. Project);
VRD Series 2003 RB
(LOC-Branch Banking & Trust)
1.72%, 04/01/28(b)(c) -- VMIG-1 3,800 3,800,000
- -------------------------------------------------------------------------------------------
Maryland (State of) Health & Higher
Educational Facilities Authority (Pooled
Loan Program); VRD Series 1994 D RB
(LOC-Bank of America N.A.) (Acquired
07/01/04; Cost $11,900,000)
1.70%, 01/01/29(b)(c)(d) A-1+ -- 11,900 11,900,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Maryland Health & Higher
Educational Facilities Authority);
VRD Floating Rate Trust Ctfs. Series
2003-829 RB
(Acquired 06/19/03; Cost $3,800,000)
1.73%, 08/15/38(c)(d)(e) -- VMIG-1 3,800 3,800,000
===========================================================================================
28,002,823
===========================================================================================
MASSACHUSETTS-0.99%
Billerica (City of); Limited Tax Series 2004
BAN GO
2.00%, 01/07/05 SP-1+ MIG-1 18,000 18,042,016
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Development Finance
Agency
(Briarwood Retirement); Series 2004 A RB
(LOC-Sovereign Bank, Comerica Bank)
1.68%, 01/01/35(b)(c) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Housing Finance
Agency;
Housing VRD Series 2003 F RB
1.70%, 12/01/37(c)(f) A-1+ VMIG-1 4,200 4,200,000
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Water Resources
Authority;
Series 1993 C RB
5.25%, 12/01/04(g)(l) NRR Aaa 1,460 1,499,158
===========================================================================================
28,741,174
===========================================================================================
MICHIGAN-3.41%
Dearborn (City of) Economic Development Corp.
(Henry Ford Village Inc. Project); VRD
Limited Tax Series 1998 IDR (LOC-Comerica
Bank)
1.74%, 10/01/23(b)(c)(o) -- -- 8,600 8,600,000
- -------------------------------------------------------------------------------------------
</Table>
F-17
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Eagle Tax Exempt Trust (City of Detroit
School District);
VRD Unlimited Tax Series 2002-6014 Class A
GO
(Acquired 11/06/02; Cost $7,105,000)
1.75%, 05/01/32(c)(d)(e) A-1+ -- $ 7,105 $ 7,105,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Detroit Sewage
Disposal System);
VRD Series 2001 A112 RB
(Acquired 10/31/01; Cost $4,910,000)
1.74%, 07/01/32(c)(d)(e) -- VMIG-1 4,910 4,910,000
- -------------------------------------------------------------------------------------------
VRD Series 2003 B41 RB
(Acquired 07/09/03; Cost $6,770,000)
1.74%, 07/01/26(c)(d)(e) -- VMIG-1 6,770 6,770,000
- -------------------------------------------------------------------------------------------
First Union MERLOTS (City of Detroit Water
Supply System);
VRD Series 1999 D RB (Acquired 01/21/00;
Cost $10,000,000)
1.74%, 07/01/29(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Michigan
Hospital Finance Authority); VRD Series
1997 X RB
(Acquired 12/12/03; Cost $15,000,000)
1.74%, 08/15/24(c)(d)(e) -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Kalamazoo (County of) Economic Development
Corp. (Heritage Community Project);
Refunding VRD Limited Tax Series 2004 RB
(LOC-Fifth Third Bank)
1.69%, 05/15/17(b)(c) A-1+ -- 5,405 5,405,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Higher Educational
Facilities Authority
(Hope College); Refunding VRD Limited Tax
Series 2004 RB
(LOC-JPMorgan Chase Bank)
1.73%, 04/01/34(b)(c) A-1 -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Hospital Finance
Authority
(Holland Community Hospital); VRD Series
2004 B RB
(LOC-JPMorgan Chase Bank)
1.73%, 01/01/34(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Municipal Bond Authority;
Series 2004 B-2 RN (LOC-JPMorgan Chase
Bank)
3.00%, 08/23/05(b) SP-1+ -- 15,000 15,188,557
- -------------------------------------------------------------------------------------------
Michigan (State of) Strategic Fund (Van Andel
Research Institute Project); VRD Limited
Tax Series 1997 RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 11/01/27(b)(c) A-1 -- 12,800 12,800,000
- -------------------------------------------------------------------------------------------
Oakland (County of) Economic Development
Corp. (Rochester College Project); VRD
Limited Obligation Series 2001 RB
(LOC-JPMorgan Chase Bank)
1.80%, 08/01/21(b)(c) -- VMIG-1 1,848 1,848,000
- -------------------------------------------------------------------------------------------
Southfield (City of) (Lawrence Tech
University Project);
Economic Development VRD Series 2001 RB
(LOC-JPMorgan Chase Bank)
1.70%, 10/01/31(b)(c) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-18
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Troy (City of) School District; Refunding
School Building & Site Unlimited Tax Series
2004 GO
3.00%, 05/01/05 AA+ Aa1 $ 1,805 $ 1,821,650
===========================================================================================
99,448,207
===========================================================================================
MINNESOTA-4.83%
Golden Valley (City of) (Unicare Homes Inc.
Project);
VRD Series 1984 IDR (LOC-ABN AMRO Bank
N.V.)
1.67%, 09/01/14(b)(c) A-1+ -- 4,400 4,400,000
- -------------------------------------------------------------------------------------------
J.P. Morgan PUTTERs (State of Minnesota
Public Facilities Authority); VRD Drinking
Water Series 2002-319 COP
(Acquired 07/31/03; Cost $14,030,000)
1.71%, 03/01/21(c)(d)(e) A-1 -- 14,030 14,030,000
- -------------------------------------------------------------------------------------------
Maple Grove (City of) (Heritage Christian
Academy);
Economic Development VRD Series 2004 RB
(LOC-U.S. Bank N.A.)
1.69%, 07/01/29(b)(c) A-1+ -- 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Minneapolis (City of) (Minnehaha Academy
Project);
VRD Series 2001 RB (LOC-U.S. Bank N.A.)
1.87%, 05/01/26(b)(m)(o) -- -- 2,500 2,500,000
- -------------------------------------------------------------------------------------------
Minneapolis-St. Paul (Cities of) Metropolitan
Council of Minnesota; Unlimited Tax Series
2002 D GO
5.00%, 02/01/05 AAA Aaa 1,190 1,205,464
- -------------------------------------------------------------------------------------------
Minnesota (State of); Refunding Unlimited Tax
Series 2003 GO
2.00%, 08/01/05 AAA Aa1 2,240 2,250,153
- -------------------------------------------------------------------------------------------
Rochester (City of) Health Care Facilities
(Mayo Foundation); Commercial Paper Notes,
Series 2000 A
1.15%, 10/12/04 A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Series 2000 B
1.15%, 11/09/04 A-1+ -- 20,500 20,500,000
- -------------------------------------------------------------------------------------------
Series 2000 C
1.40%, 10/14/04 A-1+ -- 33,500 33,500,000
- -------------------------------------------------------------------------------------------
Series 2001 A
1.13%, 10/12/04 -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Series 2001 B
1.13%, 10/12/04 -- VMIG-1 10,600 10,600,000
- -------------------------------------------------------------------------------------------
Series 2001 C
1.40%, 10/14/04 -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Adjustable Tender Series 1998 F
1.15%, 10/12/04 A-1+ -- 8,000 8,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-19
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MINNESOTA-(CONTINUED)
St. Paul (City of) Housing & Redevelopment
Authority
(Science Museum of Minnesota); VRD Series
1997 A RB
(LOC-U.S. Bank N.A.)
1.72%, 05/01/27(b)(c) -- VMIG-1 $16,260 $ 16,260,000
===========================================================================================
140,745,617
===========================================================================================
MISSISSIPPI-2.50%
ABN AMRO Munitops Ctfs. Trust (State of
Mississippi Development Board-Jackson Water
& Sewer); Multi-State Non-AMT
VRD Series 2002-22 Ctfs. (Acquired
09/10/03; Cost $9,995,000)
1.76%, 09/01/10(c)(d)(e) -- VMIG-1 9,995 9,995,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of
Mississippi);
VRD Unlimited Tax Series 2002-6018 Class A
COP
(Acquired 11/20/02; Cost $3,200,000)
1.75%, 11/01/22(c)(d)(e) A-1+ -- 3,200 3,200,000
- -------------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Jackson Medical Mall); VRD Series 2000 A
RB (LOC-JPMorgan Chase Bank)
1.70%, 11/01/18(b)(c) A-1 -- 5,300 5,300,000
- -------------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Mississippi College Project); VRD Series
2003 RB
(LOC-AmSouth Bank) (Acquired 07/17/03; Cost
$9,600,000)
1.84%, 07/01/23(b)(c)(d) -- VMIG-1 9,600 9,600,000
- -------------------------------------------------------------------------------------------
Perry (County of) (Leaf River Forest Products
Project); Refunding VRD Series 2002 PCR
(LOC-Citibank N.A.)
1.72%, 02/01/22(b)(c) A-1+ -- 36,500 36,500,000
- -------------------------------------------------------------------------------------------
University of Mississippi Educational
Building Corp.
(Campus Improvements Project); VRD Series
2000 RB
1.74%, 10/01/20(c)(f) -- VMIG-1 8,235 8,235,000
===========================================================================================
72,830,000
===========================================================================================
MISSOURI-0.96%
Missouri (State of) Development Finance Board
(Center of Creative Arts Project); Cultural
Facilities VRD Series 2004 RB
(LOC-National City Bank)
1.74%, 07/01/24(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority (Lutheran Church);
Educational Facilities VRD Series 2004 A RB
(LOC-Bank of America N.A.)
1.74%, 07/01/29(b)(m) -- VMIG-1 5,740 5,740,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority (Southwest Baptist
University Project); Educational Facilities
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.77%, 10/01/33(b)(m) A-1+ -- 5,950 5,950,000
- -------------------------------------------------------------------------------------------
</Table>
F-20
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MISSOURI-(CONTINUED)
Missouri (State of) Health & Educational
Facilities Authority (Washington University
Project); Educational Facilities VRD Series
1985 B RB
1.73%, 09/01/10(c) A-1+ VMIG-1 $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------------------
VRD Series 1996 C RB
1.70%, 09/01/30(m) A-1+ VMIG-1 1,300 1,300,000
- -------------------------------------------------------------------------------------------
VRD Series 1996 D RB
1.70%, 09/01/30(m) A-1+ VMIG-1 1,500 1,500,000
- -------------------------------------------------------------------------------------------
VRD Series 2000 C RB
1.70%, 03/01/40(m) A-1+ VMIG-1 4,300 4,300,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority
(Cox Health System); Refunding VRD Series
1997 RB
1.70%, 06/01/15(f)(m) A-1+ VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
St. Louis (County of) Industrial Development
Authority
(Friendship Village of South County); VRD
Series 2002 B IDR
(LOC-ABN AMRO Bank N.V.)
1.67%, 09/01/22(b)(c) A-1 -- 2,915 2,915,000
===========================================================================================
28,005,000
===========================================================================================
MONTANA-0.39%
Montana (State of) Facility Finance Authority
(Mission Ridge Project); VRD Series 2002 RB
(LOC-ABN AMRO Bank N.V.)
1.72%, 08/01/27(b)(c)(i) -- -- 11,365 11,365,000
===========================================================================================
NEBRASKA-1.51%
Nebhelp Inc.; Multi-Mode VRD
Series 1985 A RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 5,995 5,995,000
- -------------------------------------------------------------------------------------------
Series 1985 B RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 3,590 3,590,000
- -------------------------------------------------------------------------------------------
Series 1985 D RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 5,865 5,865,000
- -------------------------------------------------------------------------------------------
Series 1985 E RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 28,635 28,635,000
===========================================================================================
44,085,000
===========================================================================================
NEVADA-0.88%
ABN AMRO Munitops Ctfs. Trust (County of
Washoe); Refunding VRD Limited Tax Series
2001-24 Single Asset Trust Ctfs. (Acquired
06/21/01; Cost $5,500,000)
1.75%, 07/01/09(c)(d)(e) -- VMIG-1 5,500 5,500,000
- -------------------------------------------------------------------------------------------
Carson (City of) (Carson-Tahoe Hospital
Project);
Hospital VRD Series 2003 B RB (LOC-U.S.
Bank N.A.)
1.69%, 09/01/33(b)(c) A-1+ -- 18,000 18,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-21
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
NEVADA-(CONTINUED)
Clark (County of); Refunding Limited Tax
Series 1998 B GO
5.25%, 11/01/04 AA Aa2 $ 2,245 $ 2,252,753
===========================================================================================
25,752,753
===========================================================================================
NEW HAMPSHIRE-0.45%
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(New Hampshire Higher Educational & Health
Facilities Authority);
Refunding VRD
Series 2003-772 RB
(Acquired 01/22/03; Cost $5,475,000)
1.75%, 01/01/17(c)(d)(e) A-1 -- 5,475 5,475,000
- -------------------------------------------------------------------------------------------
Series 2003-866 RB
(Acquired 10/23/03; Cost $7,485,000)
1.75%, 08/15/21(c)(d)(e) A-1 -- 7,485 7,485,000
===========================================================================================
12,960,000
===========================================================================================
NEW MEXICO-0.05%
Albuquerque (City of) Educational Facilities
(Albuquerque Academy Project); VRD Series
2002 RB
1.73%, 10/15/16(c) AA VMIG-1 1,500 1,500,000
===========================================================================================
NEW YORK-0.34%
ABN AMRO Munitops Ctfs. Trust (Triborough
Bridge & Tunnel Authority); Non-AMT VRD
Series 2002-31 Ctfs.
(Acquired 03/24/04; Cost $10,000,000)
1.70%, 11/15/10(c)(d)(e) -- VMIG-1 10,000 10,000,000
===========================================================================================
NORTH CAROLINA-1.88%
Mecklenburg (County of); Public Improvement
Unlimited Tax Series 1998 B GO
4.40%, 02/01/05 AAA Aaa 13,000 13,130,922
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Barton College); Educational Facilities
VRD Series 2004 RB
(LOC-Branch Banking & Trust)
1.72%, 07/01/19(b)(c) -- VMIG-1 5,750 5,750,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Elon College); VRD Series 2001 A RB
(LOC-Bank of America N.A.)
1.68%, 01/01/14(b)(c)(i) -- -- 4,500 4,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Goodwill Community Foundation Project);
VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.70%, 04/01/22(b)(c)(i) -- -- 2,165 2,165,000
- -------------------------------------------------------------------------------------------
</Table>
F-22
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
NORTH CAROLINA-(CONTINUED)
North Carolina (State of) Capital Facilities
Finance Agency (Thompson Children's Home);
Educational Facilities VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.70%, 12/01/20(b)(c)(i) -- -- $ 3,070 $ 3,070,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency (University of North
Carolina at Pembroke University
Foundation); Student Housing VRD Series
2001 A RB
(LOC-Wachovia Bank N.A.)
1.82%, 07/01/31(b)(c) -- VMIG-1 11,240 11,240,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Wolfpack Club Project); VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.70%, 04/01/12(b)(c)(i) -- -- 9,500 9,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission; Refunding First Mortgage Health
Care Facilities VRD Series 2004 C RB
(LOC-SunTrust Bank)
1.72%, 11/01/27(b)(c) -- VMIG-1 3,500 3,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of); Public Improvement
Unlimited Tax Series 2002 A GO
5.00%, 03/01/05 AAA Aa1 1,865 1,892,943
===========================================================================================
54,748,865
===========================================================================================
OHIO-4.63%
Akron (City of) (Community Learning Centers);
Income Tax Revenue Series 2004 B RB
2.00%, 12/01/04(f) AAA Aaa 1,000 1,001,488
- -------------------------------------------------------------------------------------------
Akron (City of) Bath & Copley (Townships of)
Joint Township Hospital District (Summa
Health Systems); VRD Series 2004 B RB
(LOC-JPMorgan Chase Bank)
1.71%, 11/01/34(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Allen (County of); Refunding Limited Tax
Series 2002 GO
1.70%, 12/01/04(f) -- Aaa 1,000 1,001,075
- -------------------------------------------------------------------------------------------
Butler (County of) Health Care Facilities
(Lifesphere Project); Refunding &
Improvement VRD Series 2002 RB
(LOC-U.S. Bank N.A.)
1.70%, 05/01/27(b)(c) A-1+ -- 8,500 8,500,000
- -------------------------------------------------------------------------------------------
Cambridge (City of) Hospital Facilities
(Regional Medical Center Project);
Refunding & Improvement VRD Series 2001 RB
(LOC-National City Bank)
1.73%, 12/01/21(b)(c) -- VMIG-1 11,515 11,515,000
- -------------------------------------------------------------------------------------------
Centerville (City of) (Bethany Lutheran
Village Project);
Health Care VRD Series 1994 RB
(LOC-National City Bank)
1.73%, 11/01/13(b)(c) -- VMIG-1 2,985 2,985,000
- -------------------------------------------------------------------------------------------
</Table>
F-23
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OHIO-(CONTINUED)
Cincinnati (City of) & Hamilton (County of)
Port Authority (Kenwood Office Association
Project); Economic Development VRD Series
1985 RB (LOC-Fifth Third Bank)
1.77%, 09/01/25(b)(m) A-1+ -- $ 1,185 $ 1,185,000
- -------------------------------------------------------------------------------------------
Cleveland Heights (City of); Limited Tax
Series 2004 BAN GO
2.00%, 08/18/05(o) -- -- 3,234 3,245,177
- -------------------------------------------------------------------------------------------
Cuyahoga (County of) Continuing Care
Facilities; Refunding VRD Series 1999 RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 02/01/29(b)(c) A-1+ -- 15,985 15,985,000
- -------------------------------------------------------------------------------------------
Cuyahoga (County of) Health Care Facilities
(Judson Retirement Community); Refunding
VRD Series 2000 RB
(LOC-National City Bank)
1.72%, 11/15/19(b)(c) A-1 -- 800 800,000
- -------------------------------------------------------------------------------------------
Cuyahoga Falls (City of); Limited Tax Series
2003 Notes
2.00%, 12/16/04 -- MIG-1 7,000 7,009,153
- -------------------------------------------------------------------------------------------
Hamilton (County of) Economic Development
(St. Xavier High School Project); VRD
Series 2003 RB
(LOC-Fifth Third Bank)
1.51%, 04/01/28(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Lake (County of); Limited Tax Series 2004 BAN
GO
2.00%, 04/14/05(o) -- -- 3,000 3,013,944
- -------------------------------------------------------------------------------------------
Lakewood (City of) (St. Edward High School
Project);
Educational Facilities VRD Series 2000 RB
(LOC-Fifth Third Bank)
1.69%, 08/01/30(b)(c) -- VMIG-1 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Lorain (County of) (Elyria United Methodist
Village);
Refunding Hospital VRD Series 1996 B RB
(LOC-JPMorgan Chase Bank)
1.71%, 06/01/12(b)(c) A-1 VMIG-1 4,685 4,685,000
- -------------------------------------------------------------------------------------------
Lorain (County of) (EMH Regional Medical
Center Project);
Hospital Facilities VRD Series 2001 RB
(LOC-National City Bank)
1.76%, 05/01/26(b)(c)(o) -- -- 15,170 15,170,000
- -------------------------------------------------------------------------------------------
Lorain (County of) Independent Living
Facilities
(Elyria United Methodist Project); VRD
Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.71%, 06/01/25(b)(c) A-1+ -- 9,125 9,125,000
- -------------------------------------------------------------------------------------------
Mahoning (County of) Hospital Facilities
(Forum Health Obligation Group);
VRD Series 1997 B RB
1.70%, 12/01/28(c)(f) A-1+ VMIG-1 10,500 10,500,000
- -------------------------------------------------------------------------------------------
Series 2002 B RB (LOC-Fifth Third Bank)
1.73%, 12/01/27(b)(c) -- VMIG-1 7,200 7,200,000
- -------------------------------------------------------------------------------------------
</Table>
F-24
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OHIO-(CONTINUED)
Marion (County of) (Pooled Lease Program);
Hospital Improvement VRD Series 1990 RB
(LOC-JPMorgan Chase Bank)
1.72%, 08/01/20(b)(c) A-1 -- $ 4,535 $ 4,535,000
- -------------------------------------------------------------------------------------------
Middleburg Heights (City of) (Southwest
General Health);
Hospital Improvement Series 1997 RB
(LOC-Fifth Third Bank)
1.73%, 08/15/22(b)(c) A-1+ -- 5,405 5,405,000
- -------------------------------------------------------------------------------------------
Montgomery (County of) (St. Vincent DePaul
Society);
Limited Obligation VRD Series 1996 RB
(LOC-National City Bank)
1.73%, 12/01/10(b)(c) A-1 -- 1,900 1,900,000
- -------------------------------------------------------------------------------------------
Portage (County of) (Robinson Memorial
Hospital);
Hospital VRD Series 2002 RB (LOC-JPMorgan
Chase Bank)
1.73%, 05/01/17(b)(c) -- VMIG-1 6,255 6,255,000
- -------------------------------------------------------------------------------------------
Solon (City of); Unlimited Tax Series 2003
BAN GO
2.00%, 12/09/04(o) -- -- 2,800 2,804,536
- -------------------------------------------------------------------------------------------
Twinsburg (City of) School District;
Refunding Unlimited Tax Series 2004 GO
2.00%, 12/01/04(f) -- Aaa 1,800 1,802,977
===========================================================================================
134,923,350
===========================================================================================
OKLAHOMA-1.79%
Mustang (City of) Improvement Authority;
Refunding Series 1995 RB
5.38%, 12/01/04(g)(l) AAA Aaa 3,135 3,188,215
- -------------------------------------------------------------------------------------------
Oklahoma (County of) Finance Authority
(Oxford Oaks Apartments Projects);
Refunding Multi-Family Housing VRD Series
2000 RB
(CEP-Federal National Mortgage Association)
1.71%, 07/15/30(c) A-1+ -- 27,695 27,695,000
- -------------------------------------------------------------------------------------------
Oklahoma (State of) Development Finance
Authority
(Capitol Dome Project); VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.79%, 06/01/11(b)(c) A-1+ -- 3,785 3,785,000
- -------------------------------------------------------------------------------------------
Oklahoma (State of) Water Resource Board;
State Loan Program VRD Series 2003 A RB
0.98%, 10/01/04(g)(h) A-1+ -- 14,935 14,935,000
- -------------------------------------------------------------------------------------------
Tulsa (County of) Industrial Authority;
Capital Improvements Series 2003 B RB
4.00%, 05/15/05 AA -- 2,500 2,537,739
===========================================================================================
52,140,954
===========================================================================================
</Table>
F-25
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OREGON-1.15%
Oregon (State of) Health, Housing,
Educational & Cultural Facilities Authority
(Quatama Crossing LLC Housing Project);
VRD Series 1998 RB (LOC-U.S. Bank N.A.)
1.74%, 01/01/31(b)(c) -- Aa2 $ 7,430 $ 7,430,000
- -------------------------------------------------------------------------------------------
Oregon (State of); Unlimited Tax Series 2003
TAN GO
2.25%, 11/15/04 SP-1+ MIG-1 25,000 25,030,450
- -------------------------------------------------------------------------------------------
Salem (City of) Water & Sewer; Refunding
Series 2004 RB
3.00%, 05/01/05(f) AAA Aaa 1,175 1,184,588
===========================================================================================
33,645,038
===========================================================================================
PENNSYLVANIA-2.78%
ABN AMRO Munitops Ctfs. Trust (State of
Pennsylvania Public School Building
Authority); Non-AMT VRD
Series 2001-30 Ctfs. (Acquired 10/31/02;
Cost $5,000,000)
1.74%, 09/01/09(c)(d)(e) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Series 2003-24 Ctfs. (Acquired 03/08/04;
Cost $7,000,000)
1.74%, 06/01/11(c)(d)(e) -- VMIG-1 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Allegheny (County of) Hospital Development
Authority (ACES-Presbyterian University
Hospital); VRD Series 1988 B1 RB
(LOC-JPMorgan Chase Bank)
1.70%, 03/01/18(b)(c) -- VMIG-1 2,085 2,085,000
- -------------------------------------------------------------------------------------------
Allegheny (County of) Industrial Development
Authority
(Carnegie Museums of Pittsburgh); VRD
Series 2002 IDR
(LOC-Royal Bank of Scotland)
1.70%, 08/01/32(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Altoona (City of) Authority; Water Series
1994 A RB
6.50%, 11/01/04(g)(l) AAA NRR 1,700 1,741,627
- -------------------------------------------------------------------------------------------
Berks (County of) Industrial Development
Authority
(Lutheran Services); Health Care VRD Series
1998 A IDR
1.69%, 01/01/28(c)(f) -- VMIG-1 9,588 9,588,000
- -------------------------------------------------------------------------------------------
Chartiers Valley (Community of) Industrial &
Commercial Development Authority (Asbury
Villas Project);
VRD Series 2000 B IDR (LOC-ABN AMRO Bank
N.V.)
1.72%, 12/01/30(b)(c) A-1 -- 3,000 3,000,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Delaware Valley
Regional);
VRD Series 2001-3801 Class A COP
(Acquired 06/04/01; Cost $8,900,000)
1.75%, 08/01/28(c)(d)(e) A-1+ -- 8,900 8,900,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Scranton &
County of Lackawanna Health & Welfare
Authority); VRD Series 2002 A-18 RB
(Acquired 03/22/02; Cost $2,860,000)
1.74%, 03/01/15(c)(d)(e) -- VMIG-1 2,860 2,860,000
- -------------------------------------------------------------------------------------------
</Table>
F-26
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
PENNSYLVANIA-(CONTINUED)
Franklin (County of) Industrial Development
Authority (Chambersburg Hospital
Obligation);
Health Care VRD Series 2000 IDR
1.79%, 12/01/24(c)(f) A-1 Aaa $ 3,575 $ 3,575,000
- -------------------------------------------------------------------------------------------
Geisinger Authority Health System (Geisinger
Health System Foundation); Refunding VRD
Series 2000 RB
1.71%, 08/01/28(m) A-1+ VMIG-1 25,950 25,950,000
- -------------------------------------------------------------------------------------------
Lehigh (County of) Industrial Development
Authority
(Allegheny Electric Coop. Inc.);
VRD Series 1984 PCR (LOC-Rabobank
Nederland)
1.30%, 10/01/14(b)(j) A-1+ -- 7,180 7,180,000
- -------------------------------------------------------------------------------------------
Refunding VRD Series 1984 PCR (LOC-Rabobank
Nederland)
1.30%, 06/01/14(b)(j) A-1+ -- 1,030 1,030,000
- -------------------------------------------------------------------------------------------
Philadelphia (City of) Industrial Development
Authority
(Girard Estate Aramark Project); VRD Series
2002 IDR
(LOC-JP Morgan Chase Bank)
1.70%, 06/01/32(b)(c) A-1+ -- 1,000 1,000,000
===========================================================================================
80,909,627
===========================================================================================
SOUTH CAROLINA-2.07%
Cherokee (County of) (Newark Electronics
Division); Industrial VRD Series 1985 RB
(LOC-ABN AMRO Bank N.V.)
1.71%, 12/01/15(b)(c) A-1 -- 6,500 6,500,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of South
Carolina Public Service Authority); VRD
Series 2000-4001 Class A COP
(Acquired 09/08/00; Cost $10,100,000)
1.75%, 01/01/22(c)(d)(e) A-1+ -- 10,100 10,100,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of South Carolina
Public Service Authority); VRD Series 2000
L RB
(Acquired 02/25/00; Cost $11,590,000)
1.74%, 01/01/22(c)(d)(e) -- VMIG-1 11,590 11,590,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of South Carolina Transportation
Infrastructure Bank); Floating Rate Trust
Ctfs. VRD Series 2002-728 RB (Acquired
11/13/02; Cost $7,185,000)
1.73%, 10/01/22(c)(d)(e) -- VMIG-1 7,185 7,185,000
- -------------------------------------------------------------------------------------------
Oconee (County of) (Duke); Refunding VRD
Series 1993 PCR (LOC-JPMorgan Chase Bank)
1.70%, 02/01/17(b)(c) -- P-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Educational
Facilities Authority
for Non-Profit Institutions (The Allen
University Project);
VRD Series 1998 RB (LOC-Bank of America
N.A.)
(Acquired 03/27/01; Cost $2,525,000)
1.75%, 09/01/18(b)(c)(d) A-1+ -- 2,525 2,525,000
- -------------------------------------------------------------------------------------------
</Table>
F-27
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
SOUTH CAROLINA-(CONTINUED)
South Carolina (State of) Educational
Facilities Authority
for Non-Profit Institutions (Morris College
Project);
VRD Series 1997 RB (LOC-Bank of America
N.A.)
(Acquired 07/30/02; Cost $2,100,000)
1.75%, 07/01/17(b)(c)(d) A-1+ -- $ 2,100 $ 2,100,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Carolina Children's
Home Project); VRD Series 2003 RB
(LOC-Branch Banking & Trust)
1.72%, 03/01/23(b)(c) -- VMIG-1 3,335 3,335,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Carolina Piedmont
Foundation Project); VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.75%, 09/01/32(b)(c)(i) -- -- 4,000 4,000,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Catholic Diocese of
South Carolina Project); VRD Series 1998 RB
(LOC-Bank of America N.A.) (Acquired
07/23/02; Cost $2,555,000)
1.75%, 09/01/18(b)(c)(d) A-1+ -- 2,555 2,555,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Presbyterian Home of
South Carolina Project);
VRD Series 2003 A RB (LOC-Wachovia Bank
N.A.)
1.75%, 04/01/20(b)(c) A-1 -- 4,535 4,535,000
===========================================================================================
60,425,000
===========================================================================================
SOUTH DAKOTA-0.11%
South Dakota (State of) Health & Educational
Facilities Authority (University of Sioux
Falls); VRD Series 2001 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 10/01/16(b)(c) A-1+ -- 3,155 3,155,000
===========================================================================================
TENNESSEE-5.46%
Eagle Tax Exempt Trust (City of Chattanooga);
VRD Series 2000-4202 Class A COP (Acquired
10/10/00; Cost $14,040,000)
1.75%, 10/01/27(c)(d)(e) A-1+ -- 14,040 14,040,000
- -------------------------------------------------------------------------------------------
Jackson (City of) Energy Authority; Electric
Systems VRD Series 2003 B RB
1.70%, 11/01/26(c)(f) -- VMIG-1 12,700 12,700,000
- -------------------------------------------------------------------------------------------
Jackson (City of) Health & Educational
Facilities Board (Trinity Christian
Academy); Educational Facilities VRD Series
2002 RB
(LOC-AmSouth Bank)
1.84%, 03/01/22(b)(c) -- VMIG-1 5,400 5,400,000
- -------------------------------------------------------------------------------------------
Knox (County of) Health Educational & Housing
Facility Board (Volunteer Student Housing
LLC Project); Student Housing VRD Series
2002 RB (LOC-Wachovia Bank N.A.)
1.69%, 09/01/34(b)(c) -- VMIG-1 27,020 27,020,000
- -------------------------------------------------------------------------------------------
</Table>
F-28
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TENNESSEE-(CONTINUED)
Memphis (City of); Electric System Sub-Series
2003 A RB
2.00%, 12/01/04 AA- Aa3 $10,000 $ 10,014,023
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(City of Nashville & County of Davidson);
Unlimited Tax Series 2003-871 GO
(Acquired 11/17/03; Cost $4,995,000)
1.73%, 10/15/10(c)(d)(e) -- VMIG-1 4,995 4,995,000
- -------------------------------------------------------------------------------------------
Sevier (County of) Public Building Authority
(Local Government Public Improvement);
VRD Series 1995 A RB
1.72%, 06/01/15(c)(f) AAA VMIG-1 5,230 5,230,000
- -------------------------------------------------------------------------------------------
VRD Series 1995 B-2 RB
1.72%, 06/01/06(c)(f) AAA VMIG-1 1,200 1,200,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 I A-1 RB
1.72%, 06/01/22(c)(f) -- VMIG-1 5,900 5,900,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-1 RB
1.72%, 06/01/21(c)(f) -- VMIG-1 2,100 2,100,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-3 RB
1.72%, 06/01/10(c)(f) -- VMIG-1 1,485 1,485,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-5 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 1,320 1,320,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II F-1 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 1,190 1,190,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II F-5 RB
1.72%, 06/01/27(c)(f) -- VMIG-1 2,265 2,265,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-1 RB
1.72%, 06/01/07(c)(f) -- VMIG-1 14,950 14,950,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-3 RB
1.72%, 06/01/19(c)(f) -- VMIG-1 1,425 1,425,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-4 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 300 300,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III B-2 RB
1.72%, 06/01/19(c)(f) -- VMIG-1 5,650 5,650,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III C-3 RB
1.72%, 06/01/18(c)(f) -- VMIG-1 3,475 3,475,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III C-4 RB
1.72%, 06/01/20(c)(f) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
VRD Series 1999 II A-1 RB
1.72%, 06/01/24(c)(f) -- VMIG-1 6,300 6,300,000
- -------------------------------------------------------------------------------------------
VRD Series 1999 II B-1 RB
1.72%, 06/01/25(c)(f) -- VMIG-1 1,700 1,700,000
- -------------------------------------------------------------------------------------------
</Table>
F-29
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TENNESSEE-(CONTINUED)
Shelby (County of) Health, Educational &
Housing Facilities Board (Briarcrest
Christian School System); Educational
Facilities VRD Series 2002 RB (LOC-SunTrust
Bank)
1.69%, 04/01/22(b)(c) -- VMIG-1 $11,050 $ 11,050,000
- -------------------------------------------------------------------------------------------
Shelby (County of) Health, Educational &
Housing Facilities Board (St. Benedict
Auburndale School); VRD Series 2003 RB
(LOC-AmSouth Bank)
1.74%, 05/01/33(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Tennessee (State of) Local Development
Authority (Community Provider Pooled Loan
Program); Series 1994 RB
6.45%, 10/01/04(g)(l) NRR -- 1,000 1,020,000
- -------------------------------------------------------------------------------------------
Washington (County of) (Capital Outlay
Notes);
Refunding Unlimited Tax Series 2002 GO
4.00%, 02/01/05(f) -- Aaa 1,000 1,009,664
- -------------------------------------------------------------------------------------------
Williamson (County of) Industrial Development
Board (Currey Ingram Academy); Educational
Facilities VRD Series 2003 RB
(LOC-SunTrust Bank)
1.75%, 04/01/23(b)(c) -- VMIG-1 2,500 2,500,000
===========================================================================================
159,238,687
===========================================================================================
TEXAS-11.84%
ABN AMRO Munitops Ctfs. Trust (City of
Leander Independent School District);
Unlimited Multi-State Non-AMT VRD Series
2002-16 Ctfs. (Acquired 08/20/03; Cost
$5,395,000)
1.75%, 08/15/10(c)(d)(e) -- VMIG-1 5,395 5,395,000
- -------------------------------------------------------------------------------------------
Alief (City of) Independent School District;
Unlimited Tax Series 1997 GO (CEP-Texas
Permanent School Fund)
6.60%, 02/15/05 AAA Aaa 1,000 1,020,512
- -------------------------------------------------------------------------------------------
Amarillo (City of) Health Facilities Corp.
(Panhandle Pooled Health Care); VRD Series
1985 ACES RB (LOC-BNP Paribas)
1.75%, 05/31/25(b)(c) -- VMIG-1 4,862 4,862,000
- -------------------------------------------------------------------------------------------
Austin (City of) Water & Wastewater System;
Refunding Series 2002 A RB
5.00%, 11/15/04(f) AAA Aaa 4,000 4,019,072
- -------------------------------------------------------------------------------------------
Austin (City of); Refunding Utility System
Series 1995 RB
5.60%, 05/15/05(g)(l) AAA Aaa 5,000 5,128,791
- -------------------------------------------------------------------------------------------
Austin (City of); Utility System Series 1994
RB
5.75%, 11/15/04(g)(i) AAA Aaa 2,605 2,619,767
- -------------------------------------------------------------------------------------------
Bexar (County of) Health Facilities
Development Corp.
(Air Force Village); VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.69%, 08/15/30(b)(c) A-1+ -- 19,500 19,500,000
- -------------------------------------------------------------------------------------------
</Table>
F-30
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Bexar (County of) Health Facilities
Development Corp.
(Warm Springs); Healthcare System VRD
Series 1997 RB
(LOC-JPMorgan Chase Bank)
1.74%, 09/01/27(b)(c) -- VMIG-1 $ 3,435 $ 3,435,000
- -------------------------------------------------------------------------------------------
Brownsville (City of) Utility Systems;
Refunding Sub. Lien VRD Series 2001 A RB
0.95%, 11/04/04(f)(g)(k) A-1+ VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Dallas (City of) Waterworks & Sewer System;
Refunding Series 2002 A RB
4.00%, 10/01/04 AA+ Aa2 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Dallas (City of); Limited Tax Series 2003 GO
3.50%, 02/15/05 AA+ Aa1 1,500 1,513,855
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Houston
Airport);
VRD Series 2000-4307 COP (Acquired
11/15/00; Cost $15,750,000)
1.75%, 07/01/28(c)(d)(e) A-1+ -- 15,750 15,750,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Houston Water
& Sewer);
VRD Series 1997-4305 Class A COP (Acquired
04/27/99; Cost $14,005,000)
1.75%, 12/01/27(c)(d)(e) A-1+ -- 14,005 14,005,000
- -------------------------------------------------------------------------------------------
VRD Series 2002-6019 Class A COP (Acquired
11/13/02; Cost $8,910,000)
1.75%, 12/01/30(c)(d)(e) A-1+ -- 8,910 8,910,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Harris County Toll
Road);
VRD Series 2001-4305 COP
(Acquired 05/08/01; Cost $7,390,000)
1.75%, 08/01/14(c)(d)(e) A-1+ -- 7,390 7,390,000
- -------------------------------------------------------------------------------------------
VRD Series 2002-6012 Class A COP
(Acquired 11/20/02; Cost $1,580,000)
1.75%, 08/15/30(c)(d)(e) A-1+ -- 1,580 1,580,000
- -------------------------------------------------------------------------------------------
El Paso (County of); Refunding Limited Tax
Series 2002 A GO
3.25%, 02/15/05(f) AAA Aaa 1,040 1,048,302
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Harris County Toll
Road);
VRD Series 2003 B16 RB (Acquired 02/19/03;
Cost $3,015,000)
1.57%, 08/15/25(c)(d)(e) -- VMIG-1 3,015 3,015,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Jefferson County Health
Facilities Development Corp.); VRD Series
2001 A83 RB
(Acquired 11/18/03; Cost $3,570,000)
1.20%, 11/16/04(d)(e)(g)(k)(n) A-1 -- 3,570 3,570,000
- -------------------------------------------------------------------------------------------
Fort Worth (City of); Limited Tax Series 2000
GO Ctfs.
6.25%, 03/01/05(g)(l) NRR NRR 5,000 5,105,817
- -------------------------------------------------------------------------------------------
Garland (City of) Industrial Development
Authority Inc. (Carroll Co. Project); VRD
Series 1984 IDR (LOC-Wells Fargo Bank N.A.)
(Acquired 09/03/03; Cost $2,300,000)
1.74%, 12/01/14(b)(c)(d) -- Aaa 2,300 2,300,000
- -------------------------------------------------------------------------------------------
</Table>
F-31
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Goose Creek (City of) Consolidated
Independent School District; Refunding
Unlimited Tax Series 2002 A GO
(CEP-Texas Permanent School Fund)
4.00%, 02/15/05 AAA Aaa $ 1,520 $ 1,536,322
- -------------------------------------------------------------------------------------------
Grand Prairie (City of) Housing Finance Corp.
(Lincoln Property Co.); Refunding
Multi-Family Housing VRD Series 1993 RB
(CEP-General Electric Corp.)
1.77%, 06/01/10(c) A-1+ -- 2,700 2,700,000
- -------------------------------------------------------------------------------------------
Grapevine (City of) Industrial Development
Corp.
(Southern Air Transport); Refunding Airport
Series 1993 RB
(LOC-JPMorgan Chase Bank)
1.77%, 03/01/10(b)(c) A-1+ -- 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Harris (County of) Cultural Education
Facilities Finance Corp. (Houston Music
Hall Foundation); VRD Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.74%, 06/01/29(b)(c) A-1+ -- 700 700,000
- -------------------------------------------------------------------------------------------
Harris (County of) Hospital District; Sub.
Lien Commercial Paper Series A RN (LOC-Bank
of America N.A.)
1.28%, 11/22/04(b) A-1+ -- 9,451 9,451,000
- -------------------------------------------------------------------------------------------
Harris (County of) Houston Texas Sports
Authority (Rodeo);
Jr. Lein VRD Series 2001 C RB
1.77%, 11/15/30(c)(f) A-1+ VMIG-1 6,400 6,400,000
- -------------------------------------------------------------------------------------------
Harris (County of); Permanent Improvement
Unlimited Tax Series 2003 GO
3.00%, 10/01/04 AA+ Aa1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Harris (County of); Refunding Unlimited Tax
Series 2001 GO
5.00%, 10/01/04 AA+ Aa1 4,970 4,970,000
- -------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corp. (AMOCO Project);
VRD Series 1985 PCR
1.15%, 11/01/04(g)(h) A-1+ P-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corp.
(AMOCO Project-Standard Oil Co.); VRD
Series 1983 PCR
1.40%, 03/01/05(g)(h) A-1+ Aa1 12,775 12,775,000
- -------------------------------------------------------------------------------------------
Houston (City of) Independent School District
(Schoolhouse);
Limited Tax Series 2004 GO
(CEP-Texas Permanent School Fund)
1.62%, 06/09/05(g)(k) A-1+ VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Houston (City of); Commercial Paper Notes
Series 2003 A GO
1.30%, 10/21/04 A-1+ P-1 20,000 20,000,000
- -------------------------------------------------------------------------------------------
1.37%, 11/15/04 A-1+ P-1 24,000 24,000,000
- -------------------------------------------------------------------------------------------
1.38%, 01/25/05 A-1+ P-1 13,400 13,400,000
- -------------------------------------------------------------------------------------------
Mansfield (City of); Refunding Unlimited Tax
VRD Series 2004 GO
2.00%, 02/15/05(f) AAA Aaa 855 857,910
- -------------------------------------------------------------------------------------------
</Table>
F-32
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Merrill Lynch P-Floats (City of Brazosport
Independent School District); Refunding
Unlimited Tax VRD Series 2003 PT-1690 GO
(Acquired 02/20/03; Cost $4,920,000)
1.73%, 08/15/10(c)(d)(e) -- VMIG-1 $ 4,920 $ 4,920,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (County of Harris
Hospital District);
VRD Series 2002 PT-665 RB (Acquired
10/02/02; Cost $5,935,000)
1.73%, 08/15/08(c)(d)(e) A-1+ -- 5,935 5,935,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Texas Affordable Housing Corp.);
Floating Rate Trust Ctfs. VRD Series
2003-780 RB
(Acquired 02/19/03; Cost $1,995,000)
1.73%, 09/01/22(c)(d)(e) -- VMIG-1 1,995 1,995,000
- -------------------------------------------------------------------------------------------
Northside Independent School District;
Refunding VRD Unlimited Tax Series 2003 B
GO (CEP-Texas Permanent School Fund)
1.75%, 08/01/05(g)(k) A-1+ VMIG-1 1,870 1,870,000
- -------------------------------------------------------------------------------------------
Pine Tree Independent School District;
Unlimited Tax Series 1994 GO (CEP-Texas
Permanent School Fund)
5.25%, 02/15/05(g)(k) NRR Aaa 910 923,135
- -------------------------------------------------------------------------------------------
San Antonio (City of) Water & Sewer System;
Commercial Paper Notes Series 2001 A GO
1.15%, 10/21/04 A-1+ P-1 29,900 29,900,000
- -------------------------------------------------------------------------------------------
Sherman (City of) Higher Education Finance
Corp. (Austin College Project); Higher
Education VRD Series 1997 RB
(LOC-Bank of America N.A.)
1.75%, 01/01/18(b)(c) A-1+ -- 12,800 12,800,000
- -------------------------------------------------------------------------------------------
Spring (City of) Independent School District;
Unlimited Tax Series 2004 GO (CEP-Texas
Permanent School Fund)
2.50%, 02/15/05 AAA Aaa 2,195 2,206,356
- -------------------------------------------------------------------------------------------
Texas (State of); Series 2004 TRAN
3.00%, 08/31/05 SP-1+ MIG-1 30,000 30,378,015
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (Southeast Texas Housing
Finance Corp.);
VRD Series 2001 A18 RB (Acquired 11/18/03;
Cost $4,130,000)
1.20%, 11/16/04(d)(e)(g)(k)(n) A-1 -- 4,130 4,130,000
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (University of Texas);
Refunding VRD Series 2003 B14 RB (Acquired
01/29/03; Cost $8,005,000)
1.72%, 08/15/22(c)(d)(e) -- VMIG-1 8,005 8,005,000
===========================================================================================
345,120,854
===========================================================================================
UTAH-1.47%
Davis (County of) Housing Authority (Fox
Creek Apartments); Refunding Multi-Family
Housing VRD Series 1997 A RB
(LOC-JPMorgan Chase Bank)
1.71%, 08/15/27(b)(c) A-1 -- 4,240 4,240,000
- -------------------------------------------------------------------------------------------
Davis (County of); Unlimited Tax Series 2004
TRAN
2.25%, 12/30/04 -- MIG-1 4,000 4,009,763
- -------------------------------------------------------------------------------------------
</Table>
F-33
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
UTAH-(CONTINUED)
First Union MERLOTs (Intermountain Power
Agency);
Power Supply VRD Series 2002 A59 RB
(Acquired 10/23/02; Cost $7,040,000)
1.74%, 07/01/10(c)(d)(e) -- VMIG-1 $ 7,040 $ 7,040,000
- -------------------------------------------------------------------------------------------
Intermountain Power Agency; Power Supply VRD
Series 1985 E RB
1.24%, 12/01/04(f)(g)(k) A-1+ VMIG-1 14,770 14,770,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (City of Murray
Hospital); VRD Series 2002 PA-1066 RB
(Acquired 10/02/02; Cost $5,995,000)
1.73%, 05/15/22(c)(d)(e) A-1 -- 5,995 5,995,000
- -------------------------------------------------------------------------------------------
Salt Lake (City of) (Gateway Project);
Special Assessment VRD Series 2003
(LOC-Citibank N.A.)
1.70%, 12/01/23(b)(c) A-1+ -- 5,850 5,850,000
- -------------------------------------------------------------------------------------------
Sanpete (County of) School Facilities
(Wasatch Academy);
VRD Series 2003 RB (LOC-U.S. Bank N.A.)
1.76%, 08/01/28(b)(c) A-1+ -- 900 900,000
===========================================================================================
42,804,763
===========================================================================================
VERMONT-0.22%
Vermont (State of) Student Assistance Corp.;
Student Loan VRD Series 1985 RB (LOC-State
Street Bank & Trust Co.)
1.35%, 01/01/08(b)(j) -- VMIG-1 2,640 2,640,000
- -------------------------------------------------------------------------------------------
Vermont (State of); Unlimited Tax Series 1994
A GO
6.40%, 01/15/05(g)(l) NRR NRR 3,510 3,632,758
===========================================================================================
6,272,758
===========================================================================================
VIRGINIA-0.82%
Chesapeake (City of) Hospital Authority
(Chesapeake General Hospital); Hospital
Facility VRD Series 2001 B RB
(LOC-SunTrust Bank)
1.69%, 07/01/31(b)(c) A-1+ -- 1,545 1,545,000
- -------------------------------------------------------------------------------------------
Henrico (County of) Economic Development
Authority
(Westminster Centerbury); Residential Care
Facilities
VRD Series 2003 B RB (LOC-KBC Bank N.V.)
1.69%, 07/01/08(b)(c) -- VMIG-1 17,100 17,100,000
- -------------------------------------------------------------------------------------------
Richmond (City of) Industrial Development
Authority;
Educational Facilities VRD Series 2002 RB
(LOC-SunTrust Bank)
1.70%, 05/01/32(b)(c) -- VMIG-1 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Rockingham (County of) Industrial Development
Authority (Sunnyside Presbyterian Home);
Residential Care Facilities VRD Series 2003
RB (LOC-Branch Banking & Trust)
1.72%, 12/01/33(b)(c) A-1 -- 750 750,000
- -------------------------------------------------------------------------------------------
</Table>
F-34
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
VIRGINIA-(CONTINUED)
Winchester (City of) Industrial Development
Authority (Shenandoah University);
Educational Facilities First Mortgage
Series 1994 IDR
6.70%, 10/01/04(g)(l) NRR NRR $ 1,620 $ 1,652,400
===========================================================================================
23,947,400
===========================================================================================
WASHINGTON-5.39%
ABN AMRO Munitops Ctfs. Trust (City of
Seattle Municipal Light & Power);
Multi-State Non-AMT VRD Series 2002-12
Ctfs. (Acquired 05/25/04; Cost $9,755,000)
1.75%, 03/01/09(c)(d)(e) -- VMIG-1 9,755 9,755,000
- -------------------------------------------------------------------------------------------
ABN AMRO Munitops Ctfs. Trust (City of
Seattle);
Multi-State Non-AMT VRD Limited Tax Series
2003-7 GO Ctfs.
(Acquired 05/13/03; Cost $10,685,000)
1.34%, 11/17/04(d)(e)(g)(i)(k)(n) -- -- 10,685 10,685,000
- -------------------------------------------------------------------------------------------
ABN AMRO Munitops Ctfs. Trust (King County);
Multi-State Non-AMT VRD Limited Tax Series
2001-1 GO Ctfs.
(Acquired 01/04/01; Cost $10,000,000)
1.75%, 07/01/06(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Bremerton (City of) (Kitsap Regional
Conference Center);
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.75%, 12/01/28(b)(c)(i) -- -- 2,565 2,565,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Washington
Public Power Supply Systems Project No. 2);
VRD Series 96-4703 Class A COP (Acquired
05/02/01; Cost $5,870,000)
1.75%, 07/01/11(c)(d)(e) A-1+ -- 5,870 5,870,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Washington);
VRD Series 98-4701 Class A COP (Acquired
07/20/00; Cost $14,400,000)
1.75%, 05/01/18(c)(d)(e) A-1+ -- 14,400 14,400,000
- -------------------------------------------------------------------------------------------
Everett (City of) Public Facilities District;
Commercial Paper TRAN (LOC-Bank of America
N.A.)
1.00%, 10/26/04(b) A-1+ -- 4,300 4,300,000
- -------------------------------------------------------------------------------------------
Everett (City of) Public Facilities District;
Commercial Paper Notes (LOC-Bank of America
N.A.)
1.00%, 10/26/04(b) A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Everett (City of); VRD Limited Tax Series
2001 GO
(LOC-Bank of America N.A.)
1.75%, 12/01/21(b)(c)(i) -- -- 2,600 2,600,000
- -------------------------------------------------------------------------------------------
Issaquah (City of) Community Properties; VRD
Special Revenue Series 2001 A RB (LOC-Bank
of America N.A.)
1.73%, 02/15/21(b)(c) -- VMIG-1 10,150 10,150,000
- -------------------------------------------------------------------------------------------
King & Snohomish (Counties of) School
District No. 417 (Northshore); Unlimited
Tax Series 2003 GO
2.00%, 12/01/04(f) AAA Aaa 3,300 3,304,792
- -------------------------------------------------------------------------------------------
</Table>
F-35
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
King (County of) Economic Enterprise Corp.
(Puget Sound Blood Center Project);
VRD Series 1998 RB (LOC-U.S. Bank N.A.)
1.74%, 04/01/23(b)(c) -- VMIG-1 $ 3,810 $ 3,810,000
- -------------------------------------------------------------------------------------------
Lake Tapps Parkway Properties; Special
Revenue VRD
(LOC-U.S. Bank N.A.)
Series 1999 A RB
1.73%, 12/01/19(b)(c) -- VMIG-1 11,800 11,800,000
- -------------------------------------------------------------------------------------------
Series 1999 B RB
1.73%, 12/01/19(b)(c) -- VMIG-1 700 700,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(Port of Seattle);
VRD Series 2002-739D RB (Acquired 07/21/04;
Cost $5,000,000)
1.73%, 09/01/20(c)(d)(e) A-1 -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Pierce (County of) Economic Development Corp.
(Weyerhaeuser Real Estate); Special Revenue
VRD Series 1997 RB
(LOC-Bank of America N.A.)
1.73%, 01/01/27(b)(c) A-1+ VMIG-1 12,705 12,705,000
- -------------------------------------------------------------------------------------------
Seattle (Port of) Industrial Development
Corp. (Sysco Food Services Project);
Refunding VRD Series 1994 IDR
1.72%, 11/01/25(c) A-1+ VMIG-1 8,000 8,000,000
- -------------------------------------------------------------------------------------------
Seattle (City of) Housing Authority (Bayview
Manor Project);
Low Income Housing Assistance VRD Series
1994 B RB
(LOC-U.S. Bank N.A.)
1.74%, 05/01/19(b)(c) A-1+ -- 2,340 2,340,000
- -------------------------------------------------------------------------------------------
Seattle (City of) Housing Authority (Pioneer
Human Services Project); Refunding VRD
Series 1995 RB (LOC-U.S. Bank N.A.)
1.74%, 12/01/15(b)(c) A-1+ -- 1,975 1,975,000
- -------------------------------------------------------------------------------------------
Snohomish (County of) Housing Authority (Ebey
Arms Centerhouse Project); Refunding
Housing VRD Series 2003 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/34(b)(c)(i) -- -- 6,245 6,245,000
- -------------------------------------------------------------------------------------------
Vancouver (City of) Housing Authority
(Village Park Apartments Project); Housing
VRD Series 2000 RB (LOC-U.S. Bank N.A.)
1.73%, 11/02/05(b)(c) A-1+ -- 1,430 1,430,000
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (Central Puget Sound
Regional Transit Authority); Sales Tax &
Motor VRD Series 2001 A46 RB
(Acquired 11/12/03; Cost $6,275,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 6,275 6,275,000
- -------------------------------------------------------------------------------------------
Washington (State of) Economic Development
Finance Authority (Seadrunar Recycling LLC
Project); Economic Development VRD Series
2000 E RB (LOC-U.S. Bank N.A.)
1.74%, 08/01/25(b)(c) A-1+ -- 2,735 2,735,000
- -------------------------------------------------------------------------------------------
Washington (State of) Health Care Facilities
Authority
(Empire Health Services); VRD Series 2003
RB
(LOC-U.S. Bank N.A.)
1.65%, 11/01/23(b)(c) A-1+ -- 2,335 2,335,000
- -------------------------------------------------------------------------------------------
</Table>
F-36
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
Washington (State of) Higher Education
Facilities Authority
(Cornish College Arts Project); VRD Series
2003 A RB
(LOC-Bank of America N.A.)
1.73%, 12/01/33(b)(c) -- VMIG-1 $ 5,000 $ 5,000,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (Nikkei Concerns Project);
Non-Profit Housing VRD Series 1994 RB
(LOC-U.S. Bank N.A.)
1.74%, 10/01/19(b)(c) A-1+ -- 3,755 3,755,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (Tacoma Art Museum Project);
Non-Profit VRD Series 2002 RB
(LOC-Northern Trust Co.)
1.77%, 06/01/32(b)(m) -- VMIG-1 1,225 1,225,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (University Preparatory Academy
Project); Non-Profit VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.75%, 07/01/30(b)(c) -- VMIG-1 1,250 1,250,000
===========================================================================================
157,209,792
===========================================================================================
WEST VIRGINIA-0.35%
Monongalia (County of) Building Community
Hospital (Monongalia General Hospital);
Refunding VRD Series 2002 A RB
(LOC-JPMorgan Chase Bank)
1.72%, 07/01/17(b)(c) A-1 VMIG-1 645 645,000
- -------------------------------------------------------------------------------------------
West Virginia (State of) Hospital Finance
Authority (Cabell Huntington); Refunding
VRD Series 2002 A-1 RB
(LOC-JPMorgan Chase Bank)
1.67%, 06/01/13(b)(c) -- VMIG-1 9,495 9,495,000
===========================================================================================
10,140,000
===========================================================================================
WISCONSIN-3.44%
Kimberly (City of) (Fox Cities YMCA Project);
VRD Series 2002 RB
(LOC-M&I Marshall & Ilsley Bank)
1.75%, 04/01/32(b)(c) -- VMIG-1 2,540 2,540,000
- -------------------------------------------------------------------------------------------
Menomonee Falls (City of); Refunding Sewer
System Series 2004 RB
2.00%, 05/01/05(f) -- Aaa 1,425 1,429,517
- -------------------------------------------------------------------------------------------
Waukesha (County of); Promissory Notes
Unlimited Tax Series 2004 GO
2.00%, 04/01/05 -- Aaa 1,500 1,507,192
- -------------------------------------------------------------------------------------------
Wind Point (City of) (Johnson Foundation
Project);
VRD Series 2000 RB (LOC-Bank of Montreal)
1.80%, 09/01/35(b)(c) A-1+ -- 4,665 4,665,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Beaver Dam Community
Hospitals Inc.); VRD Series 2004 B RB
(LOC-U.S. Bank N.A.)
1.69%, 08/15/34(b)(c) A-1+ -- 3,000 3,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-37
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WISCONSIN-(CONTINUED)
Wisconsin (State of) Health & Educational
Facilities Authority (Mequon Jewish
Project); VRD Series 2003 RB
(LOC-JPMorgan Chase Bank)
1.73%, 07/01/28(b)(c) -- VMIG-1 $ 2,150 $ 2,150,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(Mercy Health System); (LOC-M&I Marshall &
Ilsley Bank)
Pooled Loan VRD Series 2003 I RB
1.70%, 06/01/23(b)(c) -- VMIG-1 9,570 9,570,000
- -------------------------------------------------------------------------------------------
VRD Series 2003 C RB
1.72%, 08/15/23(b)(c) -- VMIG-1 7,300 7,300,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. John's Home); Pooled Loan VRD Series
2003 J RB
(LOC-M&I Marshall & Ilsley Bank)
1.70%, 07/01/23(b)(c) -- VMIG-1 4,250 4,250,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. Luke's Medical Center); VRD Series
1987 RB
(LOC-KBC Bank N.V.) (Acquired 06/01/04;
Cost $30,000,000)
1.70%, 12/01/17(b)(c)(d) A-1 -- 30,000 30,000,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. Mary's School); VRD Series 2004 RB
(LOC-M&I Marshall & Ilsley Bank)
1.72%, 08/01/19(b)(c) A-1 -- 2,695 2,695,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(Sinai Samaritan Medical Center Inc.); VRD
Series 1994 A RB
(LOC-M&I Marshall & Ilsley Bank)
1.75%, 09/01/19(b)(c) A-1 -- 5,649 5,649,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Wheaton Franciscan
Services); VRD Series 2003 B RB
(LOC-U.S. Bank N.A.)
1.69%, 08/15/33(b)(c) A-1+ VMIG-1 8,750 8,750,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) School Districts Cash
Flow Management Program;
Series 2003 B-1 COP
2.00%, 11/01/04 -- MIG-1 5,565 5,568,956
- -------------------------------------------------------------------------------------------
Series 2004 A-1 COP
3.00%, 09/20/05(o) -- -- 8,000 8,100,676
- -------------------------------------------------------------------------------------------
Wisconsin (State of); Unlimited Tax Series
1995 A GO
6.10%, 05/01/05(g)(l) NRR Aaa 3,000 3,087,881
===========================================================================================
100,263,222
===========================================================================================
Total Municipal Obligations (Cost
$2,926,404,421) 2,926,404,421
===========================================================================================
TOTAL INVESTMENTS-100.40% (Cost
$2,926,404,421)(p) 2,926,404,421
===========================================================================================
OTHER ASSETS LESS LIABILITIES-(0.40%) (11,669,927)
===========================================================================================
NET ASSETS-100.00% $2,914,734,494
___________________________________________________________________________________________
===========================================================================================
</Table>
F-38
Investment Abbreviations:
<Table>
ACES - Automatically Convertible Extendable Security
AMT - Alternative Minimum Tax
BAN - Bond Anticipation Notes
CEP - Credit Enhancement Provider
COP - Certificate of Participation
Ctfs - Certificates
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
Jr. - Junior
LOC - Letter of Credit
MERLOT - Municipal Exempt Receipts Liquidity Optional Tender
NRR - Not Re-Rated
P-Floats - Puttable Floating Option Tax-Exempt Receipts
PCR - Pollution Control Revenue Bonds
PUTTERS - Putable Tax Exempt Receipts
RAN - Revenue Anticipation Notes
RB - Revenue Bonds
RN - Revenue Notes
Sub. - Subordinated
TAN - Tax Anticipation Notes
TRAN - Tax and Revenue Anticipation Notes
VRD - Variable Rate Demand
Wts. - Warrants
</Table>
Notes to Schedule of Investments:
(a) Ratings assigned by Standard & Poor's Corporation ("S&P") and Moody's
Investors Service, Inc. ("Moody's"), except as indicated in note (i) and (o)
below. NRR indicates a security that is not re-rated subsequent to funding
of an escrow fund (consisting of U.S. Treasury obligations held by a bank
custodian); this funding is pursuant to an advance refunding of this
security.
(b) Principal and interest payments are fully enhanced by a letter of credit
from the bank listed or a predecessor bank, branch or subsidiary.
(c) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined weekly. Rate
shown is the rate in effect on September 30, 2004.
(d) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at September 30, 2004 was
$691,199,000, which represented 23.71% of the Fund's net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(e) Synthetic municipal instruments; involves the deposit into a trust of one or
more long-term tax-exempt bonds or notes ("Underlying Bonds"), a sale of
certificates evidencing interests in the trust to investors such as the
Fund. The trustee receives the long-term fixed interest payments on the
Underlying Bonds, and pays certificate holders variable rate interest
payments based upon a short-term reset periodically.
(f) Principal and interest payments are secured by bond insurance provided by
one of the following companies: Ambac Assurance Corp., Financial Guaranty
Insurance Co., Financial Security Assurance Inc., or MBIA Insurance Corp.
F-39
(g) Security has an irrevocable call or mandatory put by the issuer. Maturity
date reflects such call or put.
(h) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined
semi-annually. Rate shown is the rate in effect on September 30, 2004.
(i) Security is not rated by S&P or by Moody's; however it is rated by Fitch
IBCA ("Fitch") of F1+.
(j) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined monthly. Rate
shown is the rate in effect on September 30, 2004.
(k) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined at
intermittent intervals. Rate shown is the rate in effect on September 30,
2004.
(l) Advance refunded; secured by an escrow fund of U.S. Treasury obligations.
(m) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined daily. Rate
shown is the rate in effect on September 30, 2004.
(n) Security considered to be illiquid. The aggregate market value of these
securities considered illiquid at September 30, 2004 was $38,920,000, which
represented 1.34% of the Fund's net assets.
(o) Determined by the investment advisor to be of comparable quality to the
rated securities in which the Fund may invest, pursuant to guidelines for
the determination of quality adopted by the Board of Trustees and followed
by the investment advisor.
(p) Also represents cost for federal income tax purposes.
See accompanying notes which are an integral part of the financial statements.
F-40
STATEMENT OF ASSETS & LIABILITIES
September 30, 2004
(Unaudited)
<Table>
ASSETS:
Investments, at market value
(cost $2,926,404,421) $2,926,404,421
- ---------------------------------------------
Cash 697,925
- ---------------------------------------------
Receivables for:
Investments sold 4,895,235
- ---------------------------------------------
Interest 8,879,674
- ---------------------------------------------
Investment for trustee
deferred compensation and
retirement plans 136,908
- ---------------------------------------------
Other assets 190,315
=============================================
Total assets 2,941,204,478
_____________________________________________
=============================================
LIABILITIES:
Payables for:
Investments purchased 23,240,918
- ---------------------------------------------
Dividends 2,730,970
- ---------------------------------------------
Trustee deferred
compensation and
retirement plans 215,380
- ---------------------------------------------
Accrued distribution fees 131,402
- ---------------------------------------------
Accrued transfer agent fees 91,843
- ---------------------------------------------
Accrued trustees fees 1,095
- ---------------------------------------------
Accrued operating expenses 58,376
=============================================
Total liabilities 26,469,984
=============================================
Net assets applicable to
shares outstanding $2,914,734,494
_____________________________________________
=============================================
NET ASSETS CONSIST OF:
Shares of beneficial
interest $2,914,752,505
- ---------------------------------------------
Undistributed net realized
gain (loss) from
investment securities (18,011)
=============================================
$2,914,734,494
_____________________________________________
=============================================
NET ASSETS:
Institutional Class $1,671,593,521
_____________________________________________
=============================================
Private Investment Class $ 190,301,672
_____________________________________________
=============================================
Personal Investment Class $ 9,273,444
_____________________________________________
=============================================
Cash Management Class $ 796,326,655
_____________________________________________
=============================================
Reserve Class $ 11,062,666
_____________________________________________
=============================================
Resource Class $ 236,176,536
_____________________________________________
=============================================
SHARES OUTSTANDING,
$0.001 PAR VALUE PER SHARE,
UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Institutional Class 1,671,550,863
_____________________________________________
=============================================
Private Investment Class 190,288,610
_____________________________________________
=============================================
Personal Investment Class 9,270,510
_____________________________________________
=============================================
Cash Management Class 796,322,561
_____________________________________________
=============================================
Reserve Class 11,060,717
_____________________________________________
=============================================
Resource Class 236,175,751
_____________________________________________
=============================================
Net asset value, offering and
redemption price per share
for each class $ 1.00
_____________________________________________
=============================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-41
STATEMENT OF OPERATIONS
For the six months ended September 30, 2004
(Unaudited)
<Table>
INVESTMENT INCOME:
Interest $17,235,533
=========================================================================
EXPENSES:
Advisory fees 3,131,846
- -------------------------------------------------------------------------
Administrative services fees 295,697
- -------------------------------------------------------------------------
Custodian fees 38,978
- -------------------------------------------------------------------------
Distribution fees:
Private Investment Class 404,301
- -------------------------------------------------------------------------
Personal Investment Class 40,938
- -------------------------------------------------------------------------
Cash Management Class 334,772
- -------------------------------------------------------------------------
Reserve Class 50,510
- -------------------------------------------------------------------------
Resource Class 266,654
- -------------------------------------------------------------------------
Transfer agent fees 231,258
- -------------------------------------------------------------------------
Trustees' fees and retirement benefits 29,952
- -------------------------------------------------------------------------
Other 317,825
=========================================================================
Total expenses 5,142,731
=========================================================================
Less: Fees waived (1,065,457)
=========================================================================
Net expenses 4,077,274
=========================================================================
Net investment income 13,158,259
=========================================================================
Net realized gain (loss) from investment securities (17,079)
=========================================================================
Net increase in net assets resulting from operations $13,141,180
_________________________________________________________________________
=========================================================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-42
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 2004 and the year ended March 31, 2004
(Unaudited)
<Table>
<Caption>
SEPTEMBER 30, MARCH 31,
2004 2004
- --------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 13,158,259 $ 22,690,885
- --------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities (17,079) 40,841
============================================================================================
Net increase in net assets resulting from operations 13,141,180 22,731,726
============================================================================================
Distributions to shareholders from net investment income:
Institutional Class (8,710,440) (14,405,472)
- --------------------------------------------------------------------------------------------
Private Investment Class (555,715) (1,230,193)
- --------------------------------------------------------------------------------------------
Personal Investment Class (20,320) (37,490)
- --------------------------------------------------------------------------------------------
Cash Management Class (2,854,661) (5,040,826)
- --------------------------------------------------------------------------------------------
Reserve Class (4,673) (8,425)
- --------------------------------------------------------------------------------------------
Resource Class (1,012,450) (1,968,479)
============================================================================================
Decrease in net assets resulting from distributions (13,158,259) (22,690,885)
============================================================================================
Share transactions-net:
Institutional Class (282,164,384) 632,519,818
- --------------------------------------------------------------------------------------------
Private Investment Class 39,903,203 (77,436,378)
- --------------------------------------------------------------------------------------------
Personal Investment Class (1,120,107) (6,598,054)
- --------------------------------------------------------------------------------------------
Cash Management Class 28,190,366 150,447,508
- --------------------------------------------------------------------------------------------
Reserve Class (2,966,860) 1,376,091
- --------------------------------------------------------------------------------------------
Resource Class (63,027,459) 39,025,099
============================================================================================
Net increase (decrease) in net assets resulting from
share transactions (281,185,241) 739,334,084
============================================================================================
Net increase (decrease) in net assets (281,202,320) 739,374,925
============================================================================================
NET ASSETS:
Beginning of period 3,195,936,814 2,456,561,889
============================================================================================
End of period (including undistributed net investment
income of $0 and $0, respectively) $2,914,734,494 $3,195,936,814
____________________________________________________________________________________________
============================================================================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-43
NOTES TO FINANCIAL STATEMENTS
September 30, 2004
(Unaudited)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
Tax-Free Investments Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Trust is organized as a Delaware statutory
trust consisting of one portfolio, the Tax-Free Cash Reserve Portfolio (the
"Fund"). The Fund currently offers multiple classes of shares. Matters affecting
each class are voted on exclusively by the shareholders of each class. The
Fund's investment objective is to provide as high a level of tax-exempt income
as is consistent with the preservation of capital and maintenance of liquidity.
On November 4, 2003, the Fund was restructured from a separate series of
Tax-Free Investments Co. to a new series portfolio of the Trust.
Under the Trust's organizational documents, the Fund's officers, trustees,
employees and agents are indemnified against certain liabilities that may arise
out of performance of their duties to the Fund. Additionally, in the normal
course of business, the Fund enters into contracts that contain a variety of
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, the Fund has not had prior claims or losses
pursuant to these contracts.
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 at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted by Rule 2a-7
under the 1940 Act. This method values a security at its cost on the date
of purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities.' Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
F-44
The Fund allocates realized and unrealized capital gains and losses to a
class based on the relative net assets of each class. The Fund allocates
income to a class based on the relative value of the settled shares of each
class.
C. DISTRIBUTIONS -- Distributions from income are declared daily and paid
monthly. Distributions from net realized capital gain, if any, are
generally paid annually and recorded on ex-dividend date. The Fund may
elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and, as such, will not be subject to federal
income taxes on otherwise taxable income (including net realized capital
gain) which is distributed to shareholders. Therefore, no provision for
federal income taxes is recorded in the financial statements.
In addition, the Fund intends to invest in securities to allow it to
qualify to pay shareholders "exempt interest dividends", as defined in the
Internal Revenue Code of 1986, as amended.
E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.25% of the first
$500 million of the Fund's average daily net assets plus 0.20% of the Fund's
average daily net assets in excess of $500 million. AIM has voluntarily agreed
to waive advisory fees and/or reimburse expenses to the extent necessary to
limit Total Annual Fund Operating Expenses (excluding certain items discussed
below) to 0.22%. In determining the advisor's obligation to waive advisory fees
and/or reimburse expenses, the following expenses are not taken into account,
and could cause the Total Annual Fund Operating Expenses to exceed the cap
stated above: (i) Rule 12b-1 plan fees, if any; (ii) interest; (iii) taxes; (iv)
dividend expense on short sales; (v) extraordinary items (these are expenses
that are not anticipated to arise from the Fund's day-to-day operations), or
items designated as such by the Fund's Board of Trustees; (vi) expenses related
to a merger or reorganization, as approved by the Fund's Board of Trustees;
(vii) expenses that the Fund has incurred but did not actually pay because of an
expense offset arrangement; (viii) trustees' fees; and (ix) federal registration
fees. Currently, the only expense offset arrangements from which the Fund
benefits are in the form of credits that the Fund receives from banks where the
Fund or its transfer agent has deposit accounts in which it holds uninvested
cash. Those credits are used to pay certain expenses incurred by the Fund.
Voluntary fee waivers or reimbursements may be modified or discontinued at any
time upon consultation with the Board of Trustees without further notice to
investors. To the extent that the annualized expense ratio does not exceed the
expense limitation, AIM will retain its ability to be reimbursed for such fee
waivers or reimbursements prior to the end of each fiscal year. For the six
months ended September 30, 2004, AIM waived fees of $723,330.
The Trust, pursuant to a master administrative services agreement with AIM,
has agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended September 30, 2004,
AIM was paid $295,697 for such services.
The Trust, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the six months ended
September 30, 2004, AISI retained $225,258 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Trust, FMC acts as the exclusive distributor of the
Fund's shares. The Fund has adopted a master distribution
F-45
plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's
Private Investment Class, Personal Investment Class, Cash Management Class,
Reserve Class and Resource Class (the "Plan"). The Plan provides that the
Private Investment Class, the Personal Investment Class, the Cash Management
Class, the Reserve Class and the Resource Class pay up to the maximum annual
rate of 0.50%, 0.75%, 0.10%, 1.00% and 0.20%, respectively, of the average daily
net assets attributable to such class. Of this amount, up to 0.25% of the
average daily net assets of each class may be paid to furnish continuing
personal shareholder services to customers who purchase and own shares of the
such classes. Any amounts not paid as a service fee under such Plan would
constitute an asset-based sales charge. NASD Rules also impose a cap on the
total amount of sales charges, including asset-based sales charges, that may be
paid by any class of shares of the Fund. Currently, FMC has elected to waive a
portion of its compensation payable by the Fund such that compensation paid
pursuant to the Plan with respect to the Private Investment Class, the Personal
Investment Class, the Cash Management Class, the Reserve Class and the Resource
Class equals the maximum annual rate of 0.25%, 0.55%, 0.08%, 0.87% and 0.16%,
respectively, of the average daily net assets attributable to such class.
Further, FMC voluntarily waived additional Rule 12b-1 plan fees for the Reserve
Class during the year in order to increase the yield. Waivers may be modified or
discontinued at any time. Pursuant to the Plan, for the six months ended
September 30, 2004, the Private Investment Class, the Personal Investment Class,
the Cash Management Class, the Reserve Class and the Resource Class paid
$202,150, $30,021, $267,818, $41,736 and $213,323, respectively, after FMC
waived Plan fees of $202,151, $10,917, $66,954, $8,774 and $53,331,
respectively.
Certain officers and trustees of the Trust are officers and directors of
AIM, FMC and/or AISI.
NOTE 3--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM and INVESCO Funds under specified conditions outlined in procedures adopted
by the Board of Trustees of the Trust. The procedures have been designed to
ensure that any purchase or sale of securities by the Fund from or to another
fund or portfolio that is or could be considered an affiliate by virtue of
having a common investment advisor (or affiliated investment advisors), common
Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act.
Further, as defined under the procedures each transaction is effected at the
current market price. Pursuant to these procedures, during the six months ended
September 30, 2004, the Fund engaged in purchases and sales of securities of $0
and $27,058,780, respectively.
NOTE 4--TRUSTEES' FEES
Trustees' fees represent remuneration paid to each Trustee of the Trust who is
not an "interested person" of AIM. Trustees have the option to defer
compensation payable by the Trust. Those Trustees who defer compensation have
the option to select various AIM Funds and INVESCO Funds in which their deferral
accounts shall be deemed to be invested.
Current Trustees are eligible to participate in a retirement plan that
provides for benefits to be paid upon retirement to Trustees over a period of
time based on the number of years of service. The Fund may have certain former
Trustees that also participate in a retirement plan and receive benefits under
such plan.
Obligations under the deferred compensation and retirement plans represent
unsecured claims against the general assets of the Fund.
During the six months ended September 30, 2004, the Fund paid legal fees of
$5,068 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel
to the Independent Trustees. A member of that firm is a Trustee of the Trust.
F-46
NOTE 5--BORROWINGS
Pursuant to an exemptive order from the SEC, the Fund may participate in an
interfund lending facility that AIM has established for temporary borrowings by
the AIM Funds and the INVESCO Funds. An interfund loan will be made under this
facility only if the loan rate (an average of the rate available on bank loans
and the rate available on investments in overnight repurchase agreements) is
favorable to both the lending fund and the borrowing fund. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. To the extent that the loan is required
to be secured by collateral, the collateral is marked to market daily to ensure
that the market value is at least 102% of the outstanding principal value of the
loan. The Fund did not borrow or lend under the facility during the six months
ended September 30, 2004.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with The Bank of New York, the custodian bank.
To compensate the custodian bank for such overdrafts, the overdrawn Fund may
either (i) leave funds in the account so the custodian can be compensated by
earning the additional interest; or (ii) compensate by paying the custodian
bank. In either case, the custodian bank will be compensated at an amount equal
to the Federal Funds rate plus 100 basis points.
NOTE 6--TAX INFORMATION
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforward) under income tax regulations. The tax character of
distributions paid during the year and the tax components of net assets will be
reported at the Fund's fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions.
The Fund had a capital loss carryforward as of March 31, 2004 which expires
as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------
March 31, 2011 $933
_____________________________________________________________________________
=============================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
F-47
NOTE 7--SHARE INFORMATION
The Fund currently offers six different classes of shares: Institutional Class,
Private Investment Class, Personal Investment Class, Cash Management Class,
Reserve Class and Resource Class.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING(A)
- ---------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2004 MARCH 31, 2004
--------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
Sold:
Institutional Class 8,676,342,046 $ 8,676,342,046 13,446,683,719 $ 13,446,683,719
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 217,524,346 217,524,346 489,285,624 489,285,624
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class 20,166,779 20,166,779 26,756,133 26,756,133
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 2,908,837,254 2,908,837,254 5,641,820,633 5,641,820,633
- ---------------------------------------------------------------------------------------------------------
Reserve Class 77,269,739 77,269,739 156,764,612 156,764,612
- ---------------------------------------------------------------------------------------------------------
Resource Class 732,494,862 732,494,862 1,508,376,051 1,508,376,051
=========================================================================================================
Issued as reinvestment of
dividends:
Institutional Class 5,177,367 5,177,367 7,301,226 7,301,226
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 318,170 318,170 737,747 737,747
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class 2,442 2,442 4,054 4,054
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 1,846,071 1,846,071 4,115,815 4,115,815
- ---------------------------------------------------------------------------------------------------------
Reserve Class 2,986 2,986 8,921 8,921
- ---------------------------------------------------------------------------------------------------------
Resource Class 936,355 936,355 1,860,224 1,860,224
=========================================================================================================
Reacquired:
Institutional Class (8,963,683,797) (8,963,683,797) (12,821,465,127) (12,821,465,127)
- ---------------------------------------------------------------------------------------------------------
Private Investment Class (177,939,313) (177,939,313) (567,459,749) (567,459,749)
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class (21,289,328) (21,289,328) (33,358,241) (33,358,241)
- ---------------------------------------------------------------------------------------------------------
Cash Management Class (2,882,492,959) (2,882,492,959) (5,495,488,940) (5,495,488,940)
- ---------------------------------------------------------------------------------------------------------
Reserve Class (80,239,585) (80,239,585) (155,397,442) (155,397,442)
- ---------------------------------------------------------------------------------------------------------
Resource Class (796,458,676) (796,458,676) (1,471,211,176) (1,471,211,176)
=========================================================================================================
(281,185,241) $ (281,185,241) 739,334,084 $ 739,334,084
_________________________________________________________________________________________________________
=========================================================================================================
</Table>
(a) There are two entities that are each record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate they own 50% of the
outstanding shares of the Fund. The Fund's principle underwriter may have an
agreement with these entities to sell Fund shares. The Fund, AIM and/or AIM
affiliates may make payments to these entities, which are considered to be
related to the Fund, for providing services to the Fund, AIM and/or AIM
affiliates including but not limited to services such as, securities
brokerage, distribution, third party record keeping and account servicing.
The Trust has no knowledge as to whether all or any portion of the shares
owned of record by these shareholders are also owned beneficially.
F-48
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
RESERVE CLASS
------------------------------------------------------------------------
JUNE 1,
1999
SIX MONTHS (DATE SALES
ENDED YEAR ENDED MARCH 31, COMMENCED) TO
SEPTEMBER 30, ------------------------------------- MARCH 31,
2004 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.0005 0.001 0.004 0.01 0.03 0.02
=====================================================================================================
Less distributions from net
investment income (0.0005) (0.001) (0.004) (0.01) (0.03) (0.02)
=====================================================================================================
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_____________________________________________________________________________________________________
=====================================================================================================
Total return(a) 0.05% 0.08% 0.39% 1.35% 3.12% 2.10%
_____________________________________________________________________________________________________
=====================================================================================================
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $ 11,063 $14,030 $12,653 $18,200 $15,871 $23,283
_____________________________________________________________________________________________________
=====================================================================================================
Ratio of expenses to
average net assets:
With fee waivers 1.05%(b) 0.98% 1.05% 1.02% 1.00% 1.00%(c)
- -----------------------------------------------------------------------------------------------------
Without fee waivers 1.27%(b) 1.27% 1.27% 1.28% 1.29% 1.29%(c)
_____________________________________________________________________________________________________
=====================================================================================================
Ratio of net investment
income to average net
assets 0.10%(b) 0.07% 0.37% 1.21% 3.05% 2.45%(c)
___________________________________________________________________________________________________ )
=====================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and is not annualized for periods
less than one year.
(b) Ratios are annualized and based on average daily net assets of $10,072,290.
(c) Annualized.
F-49
NOTE 9--LEGAL PROCEEDINGS
Terms used in this Legal Proceedings Note are defined terms solely for the
purpose of this note.
The mutual fund industry as a whole is currently subject to regulatory
inquiries and litigation related to a wide range of issues. These issues
include, among others, market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders.
As described more fully below, INVESCO Funds Group, Inc. ("IFG"), the former
investment advisor to certain AIM Funds, A I M Advisors, Inc. ("AIM"), the
Fund's investment advisor, and A I M Distributors, Inc. ("ADI"), the distributor
of the retail AIM Funds and a wholly owned subsidiary of AIM, reached final
settlements with the Securities and Exchange Commission ("SEC"), the New York
Attorney General ("NYAG"), the Colorado Attorney General ("COAG"), the Colorado
Division of Securities ("CODS") and the Secretary of State of the State of
Georgia to resolve civil enforcement actions and investigations related to
market timing activity and related issues in the AIM Funds, including those
formerly advised by IFG.
In addition, as described more fully below, IFG and AIM are the subject of a
number of ongoing regulatory inquiries and civil lawsuits related to one or more
of the issues currently being scrutinized by various Federal and state
regulators, including but not limited to those issues described above.
Additional regulatory actions and/or civil lawsuits related to the above or
other issues may be filed against the AIM Funds, IFG, AIM and/or related
entities and individuals in the future. Additional regulatory inquiries related
to the above or other issues also may be received by the AIM Funds, IFG, AIM
and/or related entities and individuals in the future.
As a result of the matters discussed below, investors in the AIM Funds might
react by redeeming their investments. This might require the Funds to sell
investments to provide for sufficient liquidity and could also have an adverse
effect on the investment performance of the Funds.
Settled Enforcement Actions and Investigations Related to Market Timing
On October 8, 2004, AMVESCAP PLC ("AMVESCAP"), the parent company of IFG and
AIM, announced that final settlements had been reached with the SEC, the NYAG,
the COAG and the Secretary of State of Georgia to resolve civil enforcement
actions and investigations related to market timing activity and related issues
in the AIM Funds, including those formerly advised by IFG. A final settlement
also has been reached with the Colorado Division of Securities ("CODS") with
respect to this matter. In their enforcement actions and investigations, these
regulators alleged, in substance, that IFG and AIM failed to disclose in the
prospectuses for the AIM Funds that they advised and to the independent
directors/trustees of such Funds that IFG and AIM had entered into certain
arrangements permitting market timing of such Funds, thereby breaching their
fiduciary duties to such Funds. As a result of the foregoing, the regulators
alleged that IFG, AIM and ADI breached various Federal and state securities,
business and consumer protection laws. Under the terms of the settlements, IFG,
AIM and ADI consent to the entry of settlement orders or assurances of
discontinuance, as applicable, by the regulators containing certain terms, some
of which are described below, without admitting or denying any wrongdoing.
Under the terms of the settlements, IFG agreed to pay a total of $325 million,
of which $110 million is civil penalties. Of the $325 million total payment,
half will be paid on or before December 31, 2004 and the remaining half will be
paid on or before December 31, 2005. AIM and ADI agreed to pay a total of $50
million, of which $30 million is civil penalties. The entire $50 million payment
by AIM and ADI will be paid by November 7, 2004.
The entire $325 million IFG settlement payment will be available for
distribution to the shareholders of those AIM Funds that IFG formerly advised
that were harmed by market timing activity, and the entire $50 million
F-50
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
settlement payment by AIM and ADI will be available for distribution to the
shareholders of those AIM Funds advised by AIM that were harmed by market timing
activity, all as to be determined by an independent distribution consultant to
be appointed under the settlements. The settlement payments will be distributed
in accordance with a methodology to be determined by the independent
distribution consultant, in consultation with AIM and the independent trustees
of the AIM Funds and acceptable to the staff of the SEC.
Under the settlements with the NYAG and COAG, AIM has agreed to reduce
management fees on the AIM Funds by $15 million per year for the next five
years, based upon effective fee rates and assets under management as of July 1,
2004, and not to increase certain management fees. IFG will also pay $1.5
million to the COAG to be used for investor education purposes and to reimburse
the COAG for actual costs. Finally, IFG and AIM will pay $175,000 to the
Secretary of State of Georgia to be used for investor education purposes and to
reimburse the Secretary of State for actual costs.
None of the costs of the settlements will be borne by the AIM Funds or by Fund
shareholders.
Under the terms of the settlements, AIM will make certain governance reforms,
including maintaining an internal controls committee and retaining an
independent compliance consultant, a corporate ombudsman and, as stated above,
an independent distribution consultant. Also, commencing in 2007 and at least
once every other year thereafter, AIM will undergo a compliance review by an
independent third party.
In addition, under the terms of the settlements, AIM has undertaken to cause
the AIM Funds to operate in accordance with certain governance policies and
practices, including retaining a full-time independent senior officer whose
duties will include monitoring compliance and managing the process by which
proposed management fees to be charged the AIM Funds are negotiated. Also,
commencing in 2008 and not less than every fifth calendar year thereafter, the
AIM Funds will hold shareholder meetings at which their Boards of Trustees will
be elected.
On October 8, 2004, the SEC announced that it had settled a market timing
enforcement action against Raymond R. Cunningham, the former president and chief
executive officer of IFG and a former member of the board of directors of the
AIM Funds formerly advised by IFG. As part of the settlement, the SEC ordered
Mr. Cunningham to pay $1 in restitution and civil penalties in the amount of
$500,000. In addition, the SEC prohibited Mr. Cunningham from associating with
an investment advisor, broker, dealer or investment company for a period of two
years and further prohibited him from serving as an officer or director of an
investment advisor, broker, dealer or investment company for a period of five
years.
On August 31, 2004, the SEC announced that it had settled market timing
enforcement actions against Timothy J. Miller, the former chief investment
officer and a former portfolio manager for IFG, Thomas A. Kolbe, the former
national sales manager of IFG, and Michael D. Legoski, a former assistant vice
president in IFG's sales department. As part of the settlements, the SEC ordered
Messrs. Miller, Kolbe and Legoski to pay $1 in restitution each and civil
penalties in the amounts of $150,000, $150,000 and $40,000, respectively. In
addition, the SEC prohibited each of them from associating with an investment
advisor or investment company for a period of one year, prohibited Messrs.
Miller and Kolbe from serving as an officer or director of an investment advisor
or investment company for three years and two years, respectively, and
prohibited Mr. Legoski from associating with a broker or dealer for a period of
one year.
As referenced by the SEC in the SEC's settlement order, one former officer of
ADI and one current officer of AIM (who has taken a voluntary leave of absence)
have received regulatory inquiries in the form of subpoenas or other oral or
written requests for information and/or documents related to market timing
activity in the AIM Funds.
At the direction of the trustees of the AIM Funds, AMVESCAP has agreed to pay
all of the expenses incurred by such Funds related to the market timing
investigations, including expenses incurred in connection with the
F-51
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
regulatory complaints against IFG alleging market timing and the market timing
investigations with respect to IFG and AIM.
The payments made in connection with the above-referenced settlements by IFG,
AIM and ADI will total approximately $375 million (not including AIM's agreement
to reduce management fees on the AIM Funds by $15 million per year for the next
five years, based upon effective fee rates and assets under management as of
July 1, 2004). The manner in which the settlement payments will be distributed
is unknown at the present time and will be determined by an independent
distribution consultant to be appointed under the settlements. Therefore,
management of AIM and the Fund are unable at the present time to estimate the
impact, if any, that the distribution of the settlement amounts may have on the
Fund or whether such distribution will have an impact on the Fund's financial
statements in the future.
At the present time, management of AIM and the Fund are unable to estimate the
impact, if any, that the outcome of the ongoing matters described below may have
on AIM, ADI or the Fund.
Ongoing Regulatory Inquiries Concerning IFG and AIM
IFG, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds formerly advised by IFG have received regulatory
inquiries in the form of subpoenas or other oral or written requests for
information and/or documents related to one or more of the following issues,
some of which concern one or more such Funds: market timing activity, late
trading, fair value pricing, excessive or improper advisory and/or distribution
fees, mutual fund sales practices, including revenue sharing and
directed-brokerage arrangements, and investments in securities of other
registered investment companies. These regulators include the SEC, the NASD,
Inc. ("NASD"), the Florida Department of Financial Services, the Attorney
General of the State of West Virginia, the West Virginia Securities Commission
and the Bureau of Securities of the State of New Jersey. IFG and certain of
these other parties also have received more limited inquiries from the United
States Department of Labor ("DOL") and the United States Attorney's Office for
the Southern District of New York, some of which concern one or more of the AIM
Funds formerly advised by IFG. IFG is providing full cooperation with respect to
these inquiries.
AIM, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds have received regulatory inquiries in the form
of subpoenas or other oral or written requests for information and/or documents
related to one or more of the following issues, some of which concern one or
more AIM Funds: market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders. These regulators include the SEC, the NASD, the
Department of Banking for the State of Connecticut, the Attorney General of the
State of West Virginia, the West Virginia Securities Commission and the Bureau
of Securities of the State of New Jersey. AIM and certain of these other parties
also have received more limited inquiries from the SEC, the NASD, the DOL, the
Internal Revenue Service, the New York Stock Exchange, the United States
Attorney's Office for the Southern District of New York, the United States
Attorney's Office for the Central District of California, the United States
Attorney's Office for the District of Massachusetts, the Massachusetts
Securities Division and the U.S. Postal Inspection Service, some of which
concern one or more AIM Funds. AIM is providing full cooperation with respect to
these inquiries.
Private Civil Actions Alleging Market Timing
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, certain AIM Funds, IFG, AIM, A I M Management Group Inc. ("AIM
Management"), AMVESCAP, certain related entities, certain of their current and
former officers
F-52
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
and/or certain unrelated third parties) making allegations that are similar in
many respects to those in the settled regulatory actions brought by the SEC, the
NYAG and the COAG concerning market timing activity in the AIM Funds. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violation of various provisions of the Federal and state securities laws;
(ii) violation of various provisions of ERISA; (iii) breach of fiduciary duty;
and/or (iv) breach of contract. These lawsuits were initiated in both Federal
and state courts and seek such remedies as compensatory damages; restitution;
injunctive relief; disgorgement of management fees; imposition of a constructive
trust; removal of certain directors and/or employees; various corrective
measures under ERISA; rescission of certain Funds' advisory agreements;
interest; and attorneys' and experts' fees.
All lawsuits based on allegations of market timing, late trading, and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court") for consolidated or coordinated pre-trial
proceedings. Pursuant to an Order of the MDL Court, plaintiffs consolidated
their claims for pre-trial purposes into three amended complaints against
various AIM- and IFG-related parties: (i) a Consolidated Amended Class Action
Complaint purportedly brought on behalf of shareholders of the AIM Funds; (ii) a
Consolidated Amended Fund Derivative Complaint purportedly brought on behalf of
the AIM Funds and fund registrants; and (iii) an Amended Class Action Complaint
for Violations of the Employee Retirement Income Securities Act purportedly
brought on behalf of participants in AMVESCAP's 401(k) plan. Plaintiffs in one
of the underlying lawsuits transferred to the MDL Court continue to seek remand
of their action to state court.
Private Civil Actions Alleging Improper Use of Fair Value Pricing
Multiple civil class action lawsuits have been filed against various parties
(including, depending on the lawsuit, certain AIM Funds, IFG and/or AIM)
alleging that certain AIM Funds inadequately employed fair value pricing. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violations of various provisions of the Federal securities laws; (ii) common
law breach of duty; and (iii) common law negligence and gross negligence. These
lawsuits have been filed in both Federal and state courts and seek such remedies
as compensatory and punitive damages; interest; and attorneys' fees and costs.
Private Civil Actions Alleging Excessive Advisory and/or Distribution Fees
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, INVESCO Institutional (N.A.), Inc., ADI and/or INVESCO
Distributors, Inc.) alleging that the defendants charged excessive advisory
and/or distribution fees and failed to pass on to shareholders the perceived
savings generated by economies of scale. Certain of these lawsuits also allege
that the defendants adopted unlawful distribution plans. These lawsuits allege a
variety of theories of recovery, including but not limited to: (i) violation of
various provisions of the Federal securities laws; (ii) breach of fiduciary
duty; and/or (iii) breach of contract. These lawsuits have been filed in Federal
courts and seek such remedies as damages; injunctive relief; rescission of
certain Funds' advisory agreements and distribution plans; interest; prospective
relief in the form of reduced fees; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Charging of Distribution Fees on Closed
Funds or Share Classes
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, ADI and/or certain of the trustees of the AIM Funds)
alleging that the defendants breached their fiduciary duties by charging
distribution fees while funds and/or specific share classes were closed
generally to new investors and/or while other share classes of the same fund
were not charged the same distribution fees. These lawsuits allege a variety of
theories of recovery, including but not limited to: (i) violation of various
provisions of the Federal securities laws; and (ii) breach of
F-53
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
fiduciary duty. These lawsuits have been filed in Federal courts and seek such
remedies as damages; injunctive relief; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Mutual Fund Sales Practices and
Directed-Brokerage Arrangements
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, AIM Management, IFG, AIM, AIM Investment Services, Inc. and/or
certain of the trustees of the AIM Funds) alleging that the defendants
improperly used the assets of the AIM Funds to pay brokers to aggressively
promote the sale of the AIM Funds over other mutual funds and that the
defendants concealed such payments from investors by disguising them as
brokerage commissions. These lawsuits allege a variety of theories of recovery,
including but not limited to: (i) violation of various provisions of the Federal
securities laws; (ii) breach of fiduciary duty; and (iii) aiding and abetting a
breach of fiduciary duty. These lawsuits have been filed in Federal courts and
seek such remedies as compensatory and punitive damages; rescission of certain
Funds' advisory agreements and distribution plans and recovery of all fees paid;
an accounting of all fund-related fees, commissions and soft dollar payments;
restitution of all unlawfully or discriminatorily obtained fees and charges; and
attorneys' and experts' fees.
F-54
<Table>
TRUSTEES TAX-FREE
Bruce L. Crockett, Chair Lewis F. Pennock INVESTMENTS TRUST
Bob R. Baker Robert H. Graham (TFIT)
Frank S. Bayley Gerald J. Lewis
James T. Bunch Prema Mathai-Davis TAX-FREE
Albert R. Dowden Ruth H. Quigley CASH RESERVE
Edward K. Dunn, Jr. Louis S. Sklar PORTFOLIO
Jack M. Fields Larry Soll, Ph.D.
Carl Frischling Mark H. Williamson RESOURCE
CLASS
OFFICERS
Robert H. Graham President Semi-
Mark H. Williamson Executive Vice President Annual
Lisa O. Brinkley Senior Vice President & Chief Compliance Officer Report
Kevin M. Carome Senior Vice President, Secretary & Chief Legal Officer
Sidney M. Dilgren Vice President & Treasurer September 30, 2004
Stuart W. Coco Vice President
Karen Dunn Kelley Vice President
Edgar M. Larsen Vice President
INVESTMENT ADVISOR
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
DISTRIBUTOR
Fund Management Company
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
CUSTODIAN
The Bank of New York
2 Hanson Place
Brooklyn, NY 11217-1431
COUNSEL TO THE FUND
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
COUNSEL TO THE TRUSTEES
Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022-3852
TRANSFER AGENT
AIM Investment Services, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
A description of the policies and procedures that the fund uses to determine how
to vote proxies relating to portfolio securities is available without charge,
upon request, from our Client Services department at 800-959-4246 or on the AIM
Web site, AIMinvestments.com. On the home page, scroll down and click on AIM
Funds Proxy Policy. The information is also available on the Securities and
Exchange Commission's Web site, sec.gov.
Information regarding how the fund voted proxies related to its portfolio
securities during the 12 months ended 6/30/04 is available at our Web site. Go
to AIMinvestments.com, access the About Us tab, click on Required Notices and
then click on Proxy Voting Activity. Next, select your fund from the drop-down
menu.
</Table>
YOUR GOALS. OUR SOLUTIONS. [AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark-- --Registered Trademark--
TFIT-SAR-5
LETTER TO OUR SHAREHOLDERS
DEAR SHAREHOLDER:
[PHOTO OF This is the semiannual report on the performance of the
ROBERT H. Resource Class of the Tax-Free Cash Reserve Portfolio of
GRAHAM] Tax-Free Investments Trust, a money market fund investing in
short-term municipal bonds of the highest credit ratings.
ROBERT H. GRAHAM The report is for the six-month period ended September 30,
2004.
Historically low interest rates resulted in low yields
for money market instruments.
The Federal Reserve (the Fed), which had left the federal
funds target rate at 1.00% since June 2003 (the lowest rate
since 1958), increased the rate by 0.25% (or 25 basis
points) three times during the six-month reporting period.
With the latest increase on September 21, the rate stood at
1.75%. The federal funds rate is the interest rate at which depository
institutions lend balances at the Fed to other depository institutions
overnight. The federal funds rate does not mandate the rates offered on
municipal bonds. However, the low-interest rate environment resulting from the
federal funds rate, as well as the overall economic climate itself, affects all
fixed-income investing.
Indications of sustained economic growth characterized the bond market during
the second quarter of 2004, according to The Bond Market Association's Research
Quarterly. The report noted that considering interest rate volatility in 2004,
bond markets in general have responded well to sustained economic growth.
However, municipal bond issuance declined in the quarter amid rising rates and a
flattening yield curve.
Economic activity continued to expand throughout the reporting period,
according to Beige Books published by the Fed. The nation's gross domestic
product, generally considered the broadest measure of economic activity, grew at
an annualized rate of 3.3% in the second quarter and 3.7% in the third quarter
of 2004. According to the Department of Labor, 1.05 million jobs were created
during the reporting period. However, a slowdown in job growth led to declining
consumer confidence in August and September, according to The Conference Board.
At the close of the reporting period, the unemployment rate stood at 5.4%.
The September Beige Book reported that the economy continued to improve in
July and August, with 11 districts reporting increased activity levels during
the summer. All but one district reported an increase in manufacturing activity.
Labor markets remained slack across the nation, with few reports of occupational
shortages, while retail sales improved modestly in July and August, according to
the Beige Book report.
YOUR INVESTMENT PORTFOLIO
For the six-month period ended September 30, 2004, the seven-day SEC and monthly
yields for the Tax-Free Cash Reserve Portfolio's Resource Class were 1.11% and
0.99%, respectively. The seven-day SEC yield and monthly yield represent
annualized results for the period, net of fees and expenses, and exclude any
realized capital gains or losses. Yields will fluctuate. Had the advisor and
distributor not waived fees and/or reimbursed expenses, performance would have
========================================
PORTFOLIO COMPOSITION BY MATURITY
In days, as of 9/30/04
1-7 75.5%
8-14 2.6
15-60 7.7
61-120 6.7
121-180 1.8
181-240 0.7
241+ 5.0
The number of days to maturity of each
holding is determined in accordance with
the provisions of Rule 2a-7 under the
Investment Company Act of 1940.
========================================
[AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark--
(continued)
The views and opinions been lower. Through a combination of short-term
expressed in this letter cash management vehicles and selective use of a
are those of A I M longer maturity schedule for higher yields, the
Advisors, Inc. These portfolio continued to provide relatively
views and opinions are attractive returns. The weighted average maturity
subject to change at any (WAM) remained in the 25- to 42-day range; at the
time based on factors close of the reporting period, the WAM stood at 35
such as market and days. The portfolio continued to maintain a
economic conditions. relatively short maturity structure to take
These views and opinions advantage of any sudden rise in market yields.
may not be relied upon as
investment advice or The portfolio continued to hold the highest
recommendations, or as an credit-quality ratings given by three widely known
offer for a particular credit rating agencies: AAAm from Standard &
security. Statements of Poor's, Aaa from Moody's and AAA from
fact are from sources FitchRatings. Fund ratings are subject to change
considered reliable, but and are based on several factors including an
A I M Advisors, Inc. analysis of a portfolio's overall credit quality,
makes no representation market price exposure and management.
or warranty as to their
completeness or accuracy. The Tax-Free Cash Reserve Portfolio seeks to
Although historical provide as high a level of tax-exempt income as is
performance is no consistent with preservation of capital and
guarantee of future maintenance of liquidity by investing in
results, these insights high-quality, short-term municipal obligations.
may help you understand The portfolio invests solely in securities that,
our investment management at the time of investment, are "First Tier," as
philosophy. defined in Rule 2a-7 under the Investment Company
Act of 1940.
THIS REPORT MUST BE
ACCOMPANIED OR PRECEDED IN CONCLUSION
BY A CURRENTLY EFFECTIVE
FUND PROSPECTUS, WHICH Despite raising the federal funds rate for the
CONTAINS MORE COMPLETE third time since June 24, as the reporting period
INFORMATION, INCLUDING closed, the Fed believed that monetary policy
SALES CHARGES AND remains accommodative. After the September rate
EXPENSES. READ IT increase, the Fed stated that it expects
CAREFULLY BEFORE YOU underlying inflation to be relatively low, but
INVEST. that it would "respond to changes in economic
prospects as needed to maintain price stability."
PERFORMANCE QUOTED IS
PAST PERFORMANCE AND We are pleased to send you this report on your
CANNOT GUARANTEE investment. AIM is committed to the primary goals
COMPARABLE FUTURE of safety, liquidity and yield in institutional
RESULTS; CURRENT fund management. We are also dedicated to customer
PERFORMANCE MAY BE LOWER service. Should you have comments or questions
OR HIGHER. VISIT about this report, please contact one of our
AIMINVESTMENTS.COM FOR representatives at 800-659-1005.
THE MOST RECENT MONTH-END
PERFORMANCE. Sincerely,
AN INVESTMENT IN THE FUND /s/ ROBERT H. GRAHAM
IS NOT INSURED OR --------------------------------------
GUARANTEED BY THE FEDERAL Robert H. Graham
DEPOSIT INSURANCE Chairman, A I M Management Group Inc.
CORPORATION OR ANY OTHER
GOVERNMENT AGENCY. Beginning with fiscal periods ending after
ALTHOUGH THE FUND SEEKS December 31, 2004, the fund files its complete
TO PRESERVE THE VALUE OF schedule of portfolio holdings with the Securities
YOUR INVESTMENT AT $1.00 and Exchange Commission ("SEC") for the first and
PER SHARE, IT IS POSSIBLE third quarters of each fiscal year on Form N-Q.
TO LOSE MONEY BY The fund's Form N-Q filings are available on the
INVESTING IN THE FUND. SEC's website at http://www.sec.gov. Copies of the
fund's Forms N-Q may be reviewed and copied at the
SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549-0102. You can obtain
information on the operation of the Public
Reference Room, including information about
duplicating fee charges, by calling 1-202-942-8090
or by electronic request at the following E-mail
address: publicinfo@sec.gov. The SEC file numbers
for the fund are 8112731 and 2-58286. The fund's
most recent portfolio holdings, as filed on Form
N-Q, are also available at www.aiminvestments.com.
2
INFORMATION ABOUT YOUR FUND'S EXPENSES
EXAMPLE
As a shareholder of the fund, you incur ongoing costs, including management
fees; distribution and/or service fees (12b-1); and other fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the fund and to compare these costs with ongoing costs of investing
in other mutual funds. The example is based on an investment of $1,000 invested
at the beginning of the period and held for the entire period, April 1, 2004 -
September 30, 2004.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information in this table, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Actual Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical account values and
hypothetical expenses based on the fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use this information to compare the ongoing costs of investing in the fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only. Therefore, the hypothetical information is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds.
================================================================================
<Table>
<Caption>
HYPOTHETICAL
ACTUAL (5% ANNUAL RETURN
BEFORE EXPENSES)
BEGINNING ENDING EXPENSES ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ACCOUNT VALUE PAID DURING
(04/01/04) (09/30/04)(1) PERIOD(2) (09/30/04) PERIOD(2)
RESOURCE
CLASS $1,000.00 $1,003.80 $1.91 $1,023.16 $1.93
</Table>
(1) The actual ending account value is based on the actual total return of the
fund for the period April 1, 2004 to September 30, 2004 after actual expenses
and will differ from the hypothetical ending account value which is based on the
fund's expense ratio and a hypothetical annual return of 5% before expenses. The
actual cumulative return at net asset value for the period April 1, 2004 to
September 30, 2004 was 0.38% for Resource Class shares.
(2) Expenses are equal to the fund's annualized expense ratio (0.38% for
Resource Class shares) multiplied by the average account value over the period,
multiplied by 183/365 (to reflect the one-half year period).
================================================================================
3
SCHEDULE OF INVESTMENTS
September 30, 2004
(Unaudited)
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS-100.40%
ALABAMA-1.62%
Birmingham (City of) Public Parks &
Recreation Board
(Children's Zoo Project); VRD Series 2002
RB
(LOC-AmSouth Bank)
1.84%, 05/01/07(b(c) -- VMIG-1 $ 2,925 $ 2,925,000
- -------------------------------------------------------------------------------------------
Birmingham (City of) Public Parks &
Recreation Board
(YMCA Project); Refunding VRD Series 1996
RB
(LOC-AmSouth Bank)
1.84%, 06/01/16(b)(c) -- VMIG-1 1,990 1,990,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Birmingham
Waterworks & Sewer Board);
VRD Series 2002-6009 Class A COP
(Acquired 11/05/02; Cost $4,100,000)
1.75%, 01/01/43(c)(d)(e) A-1+ -- 4,100 4,100,000
- -------------------------------------------------------------------------------------------
VRD Series 2003-0007 Class A COP
(Acquired 04/16/03; Cost $7,370,000)
1.75%, 01/01/43(c)(d)(e) A-1+ -- 7,370 7,370,000
- -------------------------------------------------------------------------------------------
Homewood (City of) Medical Clinic Board
(Lakeshore Foundation Project); Lease
Revenue VRD Series 2000 RB
(LOC-AmSouth Bank)
1.84%, 11/01/24(b)(c) A-1 -- 6,046 6,046,000
- -------------------------------------------------------------------------------------------
Mobile (City of); Port City Medical Clinic
Board (Infirmary Health); VRD Series 1998 B
RB
1.71%, 02/01/25(c)(f) A-1 VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Montgomery (City of) Industrial Development
Board
(Industrial Partners Project); Refunding
VRD Series 1989 IDR
(LOC-SunTrust Bank)
1.73%, 01/01/07(b)(c) -- Aa2 635 635,000
- -------------------------------------------------------------------------------------------
Oxford (City of); Unlimited Tax VRD Series
2003 GO Wts.
(LOC-Branch Banking & Trust)
1.73%, 07/01/15(b)(c) -- VMIG-1 5,180 5,180,000
- -------------------------------------------------------------------------------------------
Ridge (City of) Improvement District; Special
Assessment VRD Series 2000 RB (LOC-AmSouth
Bank)
1.73%, 10/01/25(b)(c) -- VMIG-1 13,335 13,335,000
- -------------------------------------------------------------------------------------------
Tuscaloosa (City of) Educational Building
Authority (Stillman College Project);
Refunding Capital Improvement VRD Series
2002 A RB (LOC-AmSouth Bank)
1.84%, 10/01/23(b)(c) -- VMIG-1 500 500,000
===========================================================================================
47,081,000
===========================================================================================
</Table>
F-1
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ALASKA-0.13%
Alaska (State of) Industrial Development &
Export Authority
(Safeway Inc. Projects); Refunding VRD
Series 1991 IDR
(LOC-Deutsche Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1 -- $ 1,895 $ 1,895,000
- -------------------------------------------------------------------------------------------
Alaska (State of) Industrial Development
Authority
(Alaska Hotel Properties Inc. Project); VRD
Series 1986 IDR
(LOC-Royal Bank of Scotland)
(Acquired 12/17/02; Cost $800,000)
1.70%, 06/01/06(b)(c)(d) -- Aa1 800 800,000
- -------------------------------------------------------------------------------------------
Matanuska-Susitna (Borough of); Unlimited Tax
Series 1998 A GO
4.50%, 03/01/05(f) AAA Aaa 1,000 1,012,718
===========================================================================================
3,707,718
===========================================================================================
ARIZONA-1.43%
Apache (County of) Industrial Development
Authority
(Tucson Electric Power Co.); Floating Rate
Series 1982 A IDR
(LOC-Credit Suisse First Boston)
1.75%, 12/15/18(b)(c) A-1 VMIG-1 6,625 6,625,000
- -------------------------------------------------------------------------------------------
Casa Grande (City of) Industrial Development
Authority (Center Park Apartments Project);
Refunding Multi-Family Housing VRD Series
2001 A IDR (CEP-Federal National Mortgage
Association)
1.72%, 06/15/31(c) -- VMIG-1 2,010 2,010,000
- -------------------------------------------------------------------------------------------
Casa Grande (City of) Industrial Development
Authority (Quail Gardens Apartments);
Refunding Multi-Family Housing VRD Series
2001 A IDR (CEP-Federal National Mortgage
Association)
1.72%, 06/15/31(c) -- VMIG-1 1,550 1,550,000
- -------------------------------------------------------------------------------------------
Phoenix (City of) Civic Improvement Corp.;
Wastewater System Series 2003 BAN
1.22%, 11/12/04 A-1+ P-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
1.23%, 12/16/04 A-1+ P-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
1.27%, 01/10/05 A-1+ P-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Phoenix (City of) Industrial Development
Authority
(Lynwood Apartments Project); Refunding VRD
Series 1994 IDR
(CEP-Federal Home Loan Bank)
1.75%, 10/01/25(c) A-1+ -- 6,020 6,020,000
- -------------------------------------------------------------------------------------------
Pima (County of) Industrial Development
Authority (Tucson Electric Power
Co.-Irvington Road Project); VRD Series
1982 IDR (LOC-Credit Suisse First Boston)
1.68%, 10/01/22(b)(c) A-1 VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
University of Arizona (University of Arizona
Projects);
VRD Series 2004 B COP
1.64%, 06/01/31(c)(f) A-1+ VMIG-1 2,550 2,550,000
===========================================================================================
41,755,000
===========================================================================================
</Table>
F-2
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ARKANSAS-0.09%
Pulaski (County of) Public Facilities Board
(Health Facilities-Central Arkansas
Radiation Therapy Inc. Project);
Educational Facilities VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.75%, 07/01/08(b)(c)(i) -- -- $ 2,500 $ 2,500,000
===========================================================================================
CALIFORNIA-0.05%
San Diego (County of) (Friends of Chabad
Lubavitch);
VRD Series 2003 COP (LOC-Comerica Bank)
1.78%, 01/01/23(b)(c)(i) -- -- 1,500 1,500,000
===========================================================================================
COLORADO-2.39%
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Art Museum
Project); VRD Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 01/01/33(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (Denver Seminary
Project); VRD Series 2004 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 07/01/24(b)(c) A-1+ -- 1,200 1,200,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority (National Cable
Television Center & Museum Project);
VRD Series 1999 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 10/01/06(b)(c) A-1+ -- 1,505 1,505,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Educational & Cultural
Facilities Authority
(Regis Jesuit High School Project); VRD
Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 12/01/33(b)(c) A-1+ -- 5,015 5,015,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Arapahoe House Project); VRD Series 2004 A
RB
(LOC-Wells Fargo Bank N.A.)
1.76%, 04/01/24(b)(c) A-1+ -- 1,200 1,200,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Christian Living Project); Refunding VRD
Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.74%, 01/01/31(b)(c) A-1+ -- 3,400 3,400,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Craig Hospital Project); Refunding VRD
Series 2003 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 12/01/20(b)(c) A-1+ -- 5,605 5,605,000
- -------------------------------------------------------------------------------------------
Colorado (State of) Health Facilities
Authority
(Golden West Manor Inc. Project); VRD
Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.74%, 07/01/32(b)(c) A-1+ -- 4,210 4,210,000
- -------------------------------------------------------------------------------------------
Colorado Springs (City of) (Pikes Peak Mental
Health);
VRD Series 2003 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 03/15/23(b)(c) A-1+ -- 3,570 3,570,000
- -------------------------------------------------------------------------------------------
</Table>
F-3
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
COLORADO-(CONTINUED)
Denver (City & County of) (Kentucky Circle
Village Project); VRD Series 2000 RB
(LOC-Mountain States Bank, U.S. Bank N.A.)
1.74%, 10/01/29(b)(c) A-1+ -- $ 1,740 $ 1,740,000
- -------------------------------------------------------------------------------------------
Idaho Springs (City of); (Safeway Inc.
Project);
Refunding VRD Series 1993 IDR (LOC-Deutsche
Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1+ -- 940 940,000
- -------------------------------------------------------------------------------------------
Jefferson (County of) School District No.
R-001; Series 2004 A TAN
3.00%, 06/30/05 SP-1+ MIG-1 30,000 30,332,309
- -------------------------------------------------------------------------------------------
Lafayette (City of) Exempla Improvement
District
(Special Improvement No. 2-01);
Refunding Special Assessment VRD Series
2002 RB
(LOC-Wells Fargo Bank N.A.)
1.72%, 12/01/22(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (City & County of
Denver Water);
VRD Series 2003 PT-1872 RB
(Acquired 05/29/03; Cost $7,830,000)
1.73%, 12/01/22(c)(d)(e)(i) -- -- 7,830 7,830,000
- -------------------------------------------------------------------------------------------
Regional Transportation (District of);
Refunding Sales Tax Series 2003 A RB
3.00%, 11/01/04(f) AAA Aaa 1,000 1,001,613
===========================================================================================
69,548,922
===========================================================================================
CONNECTICUT-0.09%
Connecticut (State of) Development Authority
(Central Vermont Public Service); Floating
Rate Series 1985 PCR
(LOC-Royal Bank of Scotland)
1.35%, 12/01/15(b)(j) A-1+ -- 1,400 1,400,000
- -------------------------------------------------------------------------------------------
Connecticut (State of) Development Authority
(Connecticut Water Co. Project); Refunding
Water Facilities VRD Series 2004 B RB
(LOC-Royal Bank of Scotland)
1.70%, 09/01/28(b)(c) A-1+ -- 1,125 1,125,000
===========================================================================================
2,525,000
===========================================================================================
DELAWARE-0.28%
Delaware (State of) Economic Development
Authority
(Independent School Inc. Project); VRD
Series 2003 RB
(LOC-Royal Bank of Scotland)
1.69%, 07/01/33(b)(c) A-1+ -- 8,250 8,250,000
===========================================================================================
DISTRICT OF COLUMBIA-0.89%
District of Columbia (Consortium Issue); VRD
Series 1998 RB
(LOC-Wachovia Bank N.A.)
1.69%, 07/01/23(b)(c) A-1 -- 15,755 15,755,000
- -------------------------------------------------------------------------------------------
District of Columbia (National Children's
Center Inc.);
VRD Series 1993 RB (LOC-Bank of America
N.A.)
1.70%, 02/01/20(b)(c) A-1+ -- 3,385 3,385,000
- -------------------------------------------------------------------------------------------
</Table>
F-4
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA-(CONTINUED)
District of Columbia (Resources for the
Future Inc.);
VRD Series 1998 RB (LOC-Wachovia Bank N.A.)
(Acquired 09/26/03; Cost $2,015,000)
1.75%, 08/01/29(b)(c)(d) A-1 -- $ 2,015 $ 2,015,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (District of Columbia
Water & Sewer Authority); VRD Series 2003
A12 RB
(Acquired 02/24/03; Cost $4,655,000)
1.74%, 10/01/17(c)(d)(e) -- VMIG-1 4,655 4,655,000
===========================================================================================
25,810,000
===========================================================================================
FLORIDA-3.88%
ABN AMRO Munitops Ctfs. Trust (County of
Escambia);
Refunding Florida Non-AMT VRD Series
2002-24 Ctfs.
(Acquired 10/24/02; Cost $5,000,000)
1.73%, 10/01/10(c)(d)(e) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Capital Projects Finance Authority (Capital
Projects Loan Program); VRD Series 1997 A
RB
1.74%, 08/01/17(c)(f) A-1+ -- 1,050 1,050,000
- -------------------------------------------------------------------------------------------
Clay (County of) Housing Finance Authority
(Bluff Housing); Refunding Multi-Family
Housing VRD Series 2001 A RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 11/01/14(c) A-1+ -- 1,150 1,150,000
- -------------------------------------------------------------------------------------------
Collier (County of) Health Facilities
Authority
(Cleveland Clinic Health); VRD Hospital
Series 2003 C-2 BAN
(LOC-JPMorgan Chase Bank)
1.55%, 11/22/04(c) A-1+ VMIG-1 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Collier (County of) Industrial Development
Authority
(Redlands Christian Migrant); VRD Series
2001 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/26(b)(c)(i) -- -- 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Duval (County of) Housing Finance Authority
(Sunbeam Road Apartments Project);
Refunding Multi-Family Housing VRD Series
1997 RB
(LOC-Bank of America N.A.)
1.70%, 07/01/25(b)(c) A-1+ -- 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Jacksonville (City of) Health Facilities
Authority (Baptist Medical Center Project);
VRD Hospital Series 2003 B RB
(LOC-Bank of America N.A.)
0.98%, 12/22/04(b)(g)(k) A-1+ -- 19,000 19,000,000
- -------------------------------------------------------------------------------------------
Jacksonville (City of) Health Facilities
Authority
(Samuel C. Taylor Foundation Project); VRD
Series 1998 RB (LOC-Bank of America N.A.)
(Acquired 02/20/01; Cost $2,800,000)
1.75%, 12/01/23(b)(c)(d)(i) -- -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
</Table>
F-5
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
Jacksonville (City of) Health Facilities
Authority (University of Florida
Jacksonville Physicians, Inc.); VRD Series
2002 RB
(LOC-Bank of America N.A.)
1.73%, 06/01/22(b)(c) -- VMIG-1 $12,140 $ 12,140,000
- -------------------------------------------------------------------------------------------
Lakeland (City of) Electric & Water;
Refunding Series 1992 RB
5.63%, 10/01/04(l) NRR -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Marion (County of) Hospital District (Munroe
Regional Health System); Health System
Improvement VRD Series 2000 RB
(LOC-AmSouth Bank)
1.72%, 10/01/30(b)(c) -- VMIG-1 13,375 13,375,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (State of Florida
Mid-Bay Bridge Authority); VRD Series 2002
PT-1531 RB
(Acquired 10/10/02; Cost $9,100,000)
1.72%, 10/01/18(c)(d)(e) A-1+ -- 9,100 9,100,000
- -------------------------------------------------------------------------------------------
Miami-Dade (County of) Educational Facilities
Authority
(Carlos Albizu University Project); VRD
Series 2000 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/25(b)(c)(i) -- -- 9,400 9,400,000
- -------------------------------------------------------------------------------------------
Miami-Dade (County of) Industrial Development
Authority
(Palmer Trinity Private School Project);
VRD Series 1999 IDR
(LOC-Bank of America N.A.)
1.75%, 12/01/19(b)(c)(i) -- -- 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Florida Department of
Environmental Protection); Floating Rate
Trust Ctfs. VRD Series 2002-722 RB
(Acquired 11/13/02; Cost $9,850,000)
1.73%, 07/01/22(c)(d)(e) A-1 -- 9,850 9,850,000
- -------------------------------------------------------------------------------------------
North Miami (City of) Educational Facilities
(Miami Country Day School Project); VRD
Series 1999 RB
(LOC-Bank of America N.A.)
1.75%, 08/01/19(b)(c)(i) -- -- 1,550 1,550,000
- -------------------------------------------------------------------------------------------
Orange (County of) Health Facilities
Authority
(Adventist Health System); VRD Series 1992
RB
(LOC-SunTrust Bank)
1.70%, 11/15/14(b)(c) A-1+ VMIG-1 1,155 1,155,000
- -------------------------------------------------------------------------------------------
Orange (County of) Health Facilities
Authority (Presbyterian Retirement
Communities Project); VRD Series 1998 RB
(LOC-Bank of America N.A.)
(Acquired 01/29/02-09/01/04; Cost
$5,129,000)
1.75%, 11/01/28(b)(c)(d)(i) -- -- 5,129 5,129,000
- -------------------------------------------------------------------------------------------
Palm Beach (County of) Educational Facilities
Authority (Atlantic College Project);
Educational Facilities VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/31(b)(c)(i) -- -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
Pasco (County of); Refunding Water & Sewer
Series 2002 RB
5.00%, 10/01/04(f) AAA Aaa 1,000 1,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-6
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
FLORIDA-(CONTINUED)
Tampa (City of) (Agency for Community
Treatment DACCO Project); VRD Series 2001
RB (LOC-Bank of America N.A.)
1.75%, 07/01/22(b)(c)(i) -- -- $ 5,080 $ 5,080,000
- -------------------------------------------------------------------------------------------
University of North Florida Foundation, Inc.
(Parking System);
VRD Series 1998 RB (LOC-Wachovia Bank N.A.)
1.73%, 05/01/28(b)(c) A-1 -- 800 800,000
===========================================================================================
113,079,000
===========================================================================================
GEORGIA-5.07%
Athens-Clarke (County of) Unified Government
Development Authority (University of
Georgia Athletic Association Project);
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.76%, 08/01/33(b)(i)(m) -- -- 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Clayton (County of) Development Authority
(Delta Airlines Project); Special
Facilities VRD Series 2000 A RB
(CEP-General Electric Capital Corp.)
1.71%, 06/01/29(c) A-1+ VMIG-1 7,500 7,500,000
- -------------------------------------------------------------------------------------------
Cobb (County of) Housing Authority (Tamarron
Apartments Project); Refunding Multi-Family
Housing VRD Series 2003 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 03/01/24(c) A-1+ -- 5,050 5,050,000
- -------------------------------------------------------------------------------------------
Cobb (County of) School District; Limited Tax
Series 2004 GO
1.75%, 12/31/04 -- MIG-1 20,000 20,038,500
- -------------------------------------------------------------------------------------------
DeKalb (County of) Hospital Authority
(DeKalb Medical Center Inc. Project); VRD
Series 2000 B RB
(LOC-Wachovia Bank N.A.)
1.69%, 10/01/25(b)(c) -- VMIG-1 10,925 10,925,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Georgia);
VRD Series 2000-1001 C COP (Acquired
07/26/00; Cost $20,000,000)
1.75%, 07/01/15(c)(d)(e) A-1+ -- 20,000 20,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Dalton); Utilities VRD
Series 2003 A02 RB
(Acquired 08/25/04; Cost $4,895,000)
1.74%, 01/01/12(c)(d)(e) -- VMIG-1 4,895 4,895,000
- -------------------------------------------------------------------------------------------
Fulton (County of) Development Authority
(Bridgeway Foundation for Education
Project); Educational Facilities VRD Series
2000 RB
(LOC-Wachovia Bank N.A.)
1.74%, 06/01/15(b)(c) A-1 -- 1,400 1,400,000
- -------------------------------------------------------------------------------------------
Fulton (County of) Hospital Authority
(Northside Hospital Inc.);
VRD Series 2003 A RAN (LOC-Wachovia Bank
N.A.)
1.69%, 10/01/18(b)(c) -- VMIG-1 28,860 28,860,000
- -------------------------------------------------------------------------------------------
Georgia (State of); Unlimited Tax Series 1999
D GO
5.80%, 11/01/04 AAA Aaa 1,400 1,405,461
- -------------------------------------------------------------------------------------------
Gwinnett (County of) School District; Limited
Construction Sales Tax Notes Series 2004 GO
1.75%, 12/30/04 -- MIG-1 15,000 15,025,977
- -------------------------------------------------------------------------------------------
</Table>
F-7
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
GEORGIA-(CONTINUED)
Houston (County of) Hospital Authority; VRD
Series 2002 RB
(LOC-Wachovia Bank N.A.)
1.69%, 10/01/14(b)(c) A-1 -- $ 9,230 $ 9,230,000
- -------------------------------------------------------------------------------------------
Private Colleges & Universities Authority
(Mercer University Project); VRD Series
2003 RB (LOC-Branch Banking & Trust)
1.82%, 10/01/32(b)(c) -- VMIG-1 7,260 7,260,000
- -------------------------------------------------------------------------------------------
Roswell (City of) Housing Authority (Rosemont
Apartments Project); Refunding Multi-Family
Housing VRD Series 2003 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.70%, 01/01/34(c) A-1+ -- 10,555 10,555,000
- -------------------------------------------------------------------------------------------
Smyrna (City of) Hospital Authority
(Ridgeview Institute Inc. Project); VRD
Series 2002 RB (LOC-Wachovia Bank N.A.)
1.74%, 11/01/27(b)(c) -- VMIG-1 2,210 2,210,000
===========================================================================================
147,854,938
===========================================================================================
HAWAII-0.37%
Eagle Tax Exempt Trust (State of Hawaii); VRD
Series 2000-1101 COP (Acquired 01/11/01;
Cost $6,000,000)
1.75%, 12/01/16(c)(d)(e) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Hawaii);
Unlimited Tax VRD Series 2003 A16 GO
(Acquired 02/27/03; Cost $3,885,000)
1.74%, 07/01/18(c)(d)(e) -- VMIG-1 3,885 3,885,000
- -------------------------------------------------------------------------------------------
Hawaii (State of); Refunding Unlimited Tax
Series 1997 CO GO
6.00%, 03/01/05(f) AAA Aaa 1,000 1,020,421
===========================================================================================
10,905,421
===========================================================================================
IDAHO-0.47%
Custer (County of) Pollution Control (Amoco
Oil Co.-Standard Oil Industry Project); VRD
Series 1983 RB
0.90%, 04/01/05(g)(h) A-1+ Aa1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Magic Valley Healthcare System Inc.
(Magic Valley Regional Medical Center
Project);
VRD Series 2001 RB (LOC-Wells Fargo Bank
N.A.)
1.71%, 12/01/21(b)(c) -- VMIG-1 3,640 3,640,000
===========================================================================================
13,640,000
===========================================================================================
ILLINOIS-14.26%
ABN AMRO Munitops Ctfs. Trust (City of
Chicago); Refunding
Multi-State Non-AMT VRD Limited Tax Series
2001-34 Ctfs. (Acquired 11/15/01; Cost
$10,000,000)
1.75%, 07/01/07(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Bear Stearns Municipal Securities Trust Ctfs.
(State of Illinois Sales Tax); VRD Series
1998-25 Class A RB
(Acquired 08/26/99; Cost $10,000,000)
1.75%, 03/15/07(c)(d)(e) A-1 Aa2 10,000 10,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-8
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Bear Stearns Municipal Securities Trust Ctfs.
(State of Illinois);
VRD Series 2002-190 Class A RB
(Acquired 05/06/02; Cost $10,130,000)
1.75%, 06/05/14(c)(d)(e) A-1 -- $10,130 $ 10,130,000
- -------------------------------------------------------------------------------------------
Chicago (City of); VRD Limited Tax Obligation
Tender Series 2004 GO (LOC-State Street
Bank & Trust Co.)
1.05%, 01/13/05(b)(g)(k) SP-1+ MIG-1 4,000 4,000,000
- -------------------------------------------------------------------------------------------
Chicago (City of); VRD Unlimited Tax Series
2002 B GO
1.70%, 01/01/37(c)(f) A-1+ VMIG-1 8,400 8,400,000
- -------------------------------------------------------------------------------------------
Crestwood (City of) (Trinity Christian
College);
VRD Series 2003 RB (LOC-Fifth Third Bank)
1.51%, 09/01/28(b)(c) A-1+ -- 3,775 3,775,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago Water
& Sewer); VRD Series 2001-1308 COP
(Acquired 12/12/01; Cost $8,655,000)
1.75%, 11/01/26(c)(d)(e) A-1+ -- 8,655 8,655,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago); VRD
Series 2001-1305 COP (Acquired 04/02/01;
Cost $4,950,000)
1.84%, 01/01/35(c)(d)(e) A-1+ -- 4,950 4,950,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (County of Cook
Regional Transportation Authority); VRD
Series 2000-1303 COP
(Acquired 03/26/01; Cost $19,000,000)
1.75%, 07/01/23(c)(d)(e) A-1+ -- 19,000 19,000,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Illinois);
VRD Unlimited Tax Series 2003-0023 Class A
COP
(Acquired 06/12/03; Cost $3,775,000)
1.75%, 06/01/15(c)(d)(e) A-1+ -- 3,775 3,775,000
- -------------------------------------------------------------------------------------------
VRD Series 2000-1304 COP (Acquired
06/27/00; Cost $7,340,000)
1.75%, 06/01/21(c)(d)(e) A-1+ -- 7,340 7,340,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Chicago Park
District);
VRD Unlimited Tax Series 2002-1306 Class A
COP
(Acquired 05/02/02; Cost $5,500,000)
1.75%, 01/01/29(c)(d)(e) A-1+ -- 5,500 5,500,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Chicago
Public Building Commission); VRD Series
2003-0015 Class A COP (Acquired 05/14/03;
Cost $2,800,000)
1.75%, 12/01/14(c)(d)(e) A-1+ -- 2,800 2,800,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Central Lake County
Joint Action Water Agency); VRD Series 2003
B18 RB
(Acquired 02/19/03; Cost $3,155,000)
1.74%, 05/01/20(c)(d)(e) -- VMIG-1 3,155 3,155,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Chicago Board of
Education);
VRD Unlimited Tax Series 2000 A4 GO
(Acquired 11/12/03; Cost $4,845,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 4,845 4,845,000
- -------------------------------------------------------------------------------------------
</Table>
F-9
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
First Union MERLOTs (City of Chicago); VRD
Limited Tax Series 2000 A12 GO (Acquired
10/13/00; Cost $10,000,000)
1.74%, 01/01/23(c)(d)(e) -- VMIG-1 $10,000 $ 10,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Chicago
Emergency Telephone System); VRD Limited
Tax Series 2002 A44 GO
(Acquired 08/02/02; Cost $7,855,000)
1.74%, 01/01/20(c)(d)(e) -- VMIG-1 7,855 7,855,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Cook County Regional
Transportation Authority);
VRD Unlimited Tax Series 2001 A93 GO
(Acquired 10/10/01; Cost $3,670,000)
1.74%, 07/01/27(c)(d)(e) -- VMIG-1 3,670 3,670,000
- -------------------------------------------------------------------------------------------
VRD Unlimited Tax Series 2002 A41 GO
(Acquired 07/25/02; Cost $17,825,000)
1.74%, 06/01/17(c)(d)(e) -- VMIG-1 17,825 17,825,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Cook County); VRD
Unlimited Tax Series 2003 B11 GO (Acquired
01/29/03; Cost $7,000,000)
1.74%, 11/15/25(c)(d)(e) -- VMIG-1 7,000 7,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Illinois); VRD
Unlimited Tax Series 2001 A124 GO (Acquired
11/26/01; Cost $7,915,000)
1.74%, 11/01/26(c)(d)(e) A-1 -- 7,915 7,915,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (University of Illinois);
VRD Series 2000 S GO (Acquired 03/20/00;
Cost $7,400,000)
1.74%, 04/01/30(c)(d)(e) -- VMIG-1 7,400 7,400,000
- -------------------------------------------------------------------------------------------
Glendale Heights (City of) (Glendale Lakes
Project);
Refunding Multi-Family Housing VRD Series
2000 RB
(CEP-Federal Home Loan Mortgage Corp.)
1.69%, 03/01/30(c) A-1+ -- 14,845 14,845,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(American College of Surgeons); VRD Series
1996 RB
(LOC-Northern Trust Co.)
1.60%, 08/01/26(b)(c) A-1+ -- 7,298 7,298,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (BAPS Inc. Project); VRD Series
2002 RB (LOC-Comerica Bank)
1.70%, 06/01/17(b)(c) A-1 -- 9,000 9,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(British Home for Retired Men & Women);
VRD Series 2001 RB (LOC-ABN AMRO Bank N.V.)
1.71%, 11/01/27(b)(c) A-1 -- 9,120 9,120,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Chicago Shakespeare Theater Project); VRD
Series 1999 RB
(LOC-ABN AMRO Bank N.V.) (Acquired
09/24/03; Cost $4,100,000)
1.71%, 01/01/19(b)(c)(d) A-1 -- 4,100 4,100,000
- -------------------------------------------------------------------------------------------
</Table>
F-10
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Development Finance
Authority (Embers Elementary School
Project); Educational Facilities VRD Series
2002 RB (LOC-ABN AMRO Bank N.V.)
(Acquired 11/04/03; Cost $2,250,000)
1.72%, 04/01/32(b)(c)(d) A-1 -- $ 2,250 $ 2,250,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Evanston Northwestern); VRD Series 2001 C
RB
1.70%, 05/01/31(c) A-1+ VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Glenwood School for Boys); VRD Series 1998
RB
(LOC-Bank of Montreal)
1.70%, 02/01/33(b)(c) A-1+ -- 2,100 2,100,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Institute of Gas Technology Project); VRD
Series 1999 IDR
(LOC-Bank of Montreal)
1.80%, 09/01/24(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Lyric Opera of Chicago Project); VRD
Series 1994 RB
(LOC-Northern Trust Co., Bank of Montreal,
JPMorgan Chase Bank)
1.70%, 12/01/28(b)(c) A-1+ VMIG-1 30,000 30,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Mount Carmel High School Project); VRD
Series 2003 RB
(LOC-JPMorgan Chase Bank)
1.70%, 07/01/33(b)(c) -- VMIG-1 5,600 5,600,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Museum of Contemporary Art Project); VRD
Series 1994 RB
(LOC-JPMorgan Chase Bank, Northern Trust
Co.)
1.70%, 02/01/29(b)(c) A-1 VMIG-1 14,950 14,950,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(North Shore Country Day School); VRD
Series 2003 RB
(LOC-Northern Trust Co.)
1.70%, 07/01/33(b)(c) -- VMIG-1 2,825 2,825,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Oak Park Residence Corp. Project); VRD
Series 2001 RB
(LOC-ABN AMRO Bank N.V.) (Acquired
01/29/03; Cost $2,975,000)
1.71%, 07/01/41(b)(c)(d) A-1 -- 2,975 2,975,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority
(Sacred Heart Schools Project); VRD Series
2003 RB
(LOC-Fifth Third Bank)
1.70%, 07/01/33(b)(c) -- VMIG-1 4,600 4,600,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Development Finance
Authority (West Central Illinois
Educational Project); VRD Series 2002 RB
(LOC-JPMorgan Chase Bank)
1.70%, 09/01/32(b)(c) -- VMIG-1 4,800 4,800,000
- -------------------------------------------------------------------------------------------
</Table>
F-11
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Development Finance
Authority
(World Communications Inc.); VRD Series
2000 RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 08/01/15(b)(c) -- VMIG-1 $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (Aurora University); VRD Series
2002 RB (LOC-Fifth Third Bank)
1.75%, 03/01/32(b)(c) -- VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(Chicago Children's Museum); VRD Series
1994 RB
(LOC-JPMorgan Chase Bank)
1.70%, 02/01/28(b)(c) A-1 VMIG-1 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority (DePaul University); VRD Series
1992 CP-1 RB (LOC-Northern Trust Co.)
1.70%, 04/01/26(b)(c) A-1+ VMIG-1 1,800 1,800,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(National Louis University); VRD Series
1999 B RB
(LOC-JPMorgan Chase Bank)
1.70%, 06/01/29(b)(c) A-1+ -- 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Educational Facilities
Authority
(University Pooled Financing Program); VRD
Series 1985 RB
1.70%, 12/01/05(c)(f) A-1 VMIG-1 1,050 1,050,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Alexian Brothers Health);
VRD Series 2004 RB (LOC-JPMorgan Chase
Bank)
1.67%, 04/01/35(b)(c) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Jewish
Charities);
VRD Series 2004 A RN (LOC-Bank of Montreal)
1.70%, 06/30/05(b)(c) A-1+ -- 7,630 7,630,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority (Kohl
Children's Museum);
VRD Series 2004 RB (LOC-Fifth Third Bank)
1.70%, 07/01/34(b)(c) -- VMIG-1 2,680 2,680,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Finance Authority
(Northwestern University);
VRD Sub-Series 2004 A RB
1.69%, 12/01/34(c) A-1+ VMIG-1 8,000 8,000,000
- -------------------------------------------------------------------------------------------
VRD Sub-Series 2004 B RB
1.70%, 12/01/34(c) A-1+ VMIG-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Bensenville Home Society); VRD Series 1989
A RB
(LOC-JPMorgan Chase Bank)
1.71%, 02/15/19(b)(c) A-1 -- 1,150 1,150,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Blessing Hospital);
VRD Series 1999 B RB
1.74%, 11/15/29(c)(f) A-1 VMIG-1 4,710 4,710,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Cradle Society Project); VRD
Series 1998 RB (LOC-JPMorgan Chase Bank)
1.70%, 04/01/33(b)(c) A-1+ -- 1,600 1,600,000
- -------------------------------------------------------------------------------------------
</Table>
F-12
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS-(CONTINUED)
Illinois (State of) Health Facilities
Authority (Edward Hospital Obligated
Group); VRD Series 2001 C RB
1.71%, 02/01/34(c)(f) A-1 VMIG-1 $ 2,050 $ 2,050,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Franciscan Eldercare Project);
Refunding VRD Series 1996 E RB
(LOC-ABN AMRO Bank N.V.)
1.67%, 05/15/27(b)(c) A-1 -- 5,660 5,660,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Northwestern Memorial Hospital); VRD
Series 1995 RB
1.70%, 08/15/25(c) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(Peace Memorial Ministries); VRD Series
2003 B RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 08/15/33(b)(c) A-1 -- 9,845 9,845,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority (Resurrection Health); VRD Series
1999 B RB
1.71%, 05/15/29(c)(f) A-1 VMIG-1 2,210 2,210,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority
(St. Luke's Medical Center); VRD Series
1998 B RB
1.71%, 11/15/23(c)(f) A-1+ VMIG-1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Health Facilities
Authority;
Revolving Fund Pooled VRD Series 1985 C RB
(LOC-JPMorgan Chase Bank)
1.70%, 08/01/15(b)(c) A-1+ VMIG-1 8,100 8,100,000
- -------------------------------------------------------------------------------------------
Illinois (State of) Toll Highway Authority;
Refunding Toll Highway VRD Series 1998 B RB
1.75%, 01/01/16(c)(f) AAA VMIG-1 15,900 15,900,000
- -------------------------------------------------------------------------------------------
1.75%, 01/01/17(c)(f) AAA VMIG-1 4,600 4,600,000
- -------------------------------------------------------------------------------------------
Lombard (City of) (Clover Creek Apartments
Project);
VRD Multi-Family Housing Series 2000 RB
(CEP-Federal National Mortgage Association)
1.72%, 12/15/30(c) A-1+ -- 14,855 14,855,000
- -------------------------------------------------------------------------------------------
McCook (City of) (Illinois Saint Andrew
Society);
VRD Series 1996 A RB (LOC-Northern Trust
Co.)
1.72%, 12/01/21(b)(c) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Oak Forest (City of) (Homewood Pool-South
Suburban Mayors & Managers Association
Program); VRD Series 1989 RB
(LOC-Fifth Third Bank)
1.51%, 07/01/24(b)(c) -- VMIG-1 4,500 4,500,000
- -------------------------------------------------------------------------------------------
Orland Hills (City of); Multi-Family Housing
VRD Series 1995 A RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 12/01/04(b)(c) A-1 -- 1,470 1,470,000
===========================================================================================
415,763,000
===========================================================================================
</Table>
F-13
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
INDIANA-3.08%
ABN AMRO Munitops Ctfs. Trust (Township of
Wayne, County of Marion School Building
Corp.); Multi-State Non-AMT VRD Series
2003-27 RB (Acquired 11/12/03; Cost
$13,795,000)
1.76%, 07/15/11(c)(d)(e) -- VMIG-1 $13,795 $ 13,795,000
- -------------------------------------------------------------------------------------------
Brownsburg (City of) Independent School
Building Corp. No. 2;
First Mortgage Series 1995 RB
5.95%, 02/01/05(g)(l) AAA Aaa 1,700 1,761,041
- -------------------------------------------------------------------------------------------
First Union MERLOTs (County of Porter Jail
Building Corp.);
VRD Series 2001 A58 RB (Acquired 11/12/03;
Cost $9,415,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 9,415 9,415,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Bond Bank (Advanced
Program Notes); Series 2004 A RN
2.00%, 01/25/05 SP-1+ MIG-1 18,500 18,551,692
- -------------------------------------------------------------------------------------------
Indiana (State of) Bond Bank (Pike Township
Metropolitan School District); Series 1995
A RB
5.80%, 02/01/05(g)(l) AAA Aaa 2,750 2,821,138
- -------------------------------------------------------------------------------------------
Indiana (State of) Development Finance
Authority (Indiana Museum of Art);
Educational Facilities VRD Series 2004 RB
(LOC-JPMorgan Chase Bank)
1.70%, 02/01/39(b)(c) -- VMIG-1 3,000 3,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Educational Facilities
Authority
(Wabash College Project); Educational
Facilities VRD Series 2003 RB (LOC-JPMorgan
Chase Bank)
1.70%, 12/01/23(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Community Hospitals Project); VRD Series
2000 A RB
(LOC-Bank of America N.A.)
1.70%, 07/01/28(b)(c) A-1+ -- 9,815 9,815,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority (Community Mental
Health & Rehabilitation); VRD Series 1990
RB
(LOC-ABN AMRO Bank N.V.)
1.72%, 11/01/20(b)(c) A-1 -- 2,040 2,040,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Deaconess Hospital); VRD Series 2004 B RB
(LOC-Fifth Third Bank)
1.51%, 01/01/29(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Fayette Memorial Hospital Association);
VRD Series 2002 A RB
(LOC-U.S. Bank N.A.)
1.77%, 10/01/32(b)(m) A-1+ -- 3,100 3,100,000
- -------------------------------------------------------------------------------------------
Indiana (State of) Health Facilities
Financing Authority
(Golden Years Homestead); VRD Series 2002 A
RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 06/01/25(b)(c) A-1+ -- 6,500 6,500,000
- -------------------------------------------------------------------------------------------
</Table>
F-14
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
INDIANA-(CONTINUED)
Indiana (State of) Health Facilities
Financing Authority
(Margaret Mary Community Hospital); VRD
Series 2004 A RB
(LOC-Fifth Third Bank)
1.77%, 12/01/29(b)(m) A-1+ -- $ 5,000 $ 5,000,000
- -------------------------------------------------------------------------------------------
Kokomo (City of) Hospital Authority (St.
Joseph's Hospital Center); Refunding
Hospital Series 1993 RB
6.35%, 08/15/05(g)(l) AAA Aaa 3,000 3,118,888
- -------------------------------------------------------------------------------------------
Monroe (County of) Hospital Authority;
Refunding VRD Hospital Series 1999 RB
1.69%, 05/01/11(c)(f) -- VMIG-1 3,900 3,900,000
===========================================================================================
89,817,759
===========================================================================================
IOWA-1.78%
Iowa (State of) Finance Authority Retirement
Community
(Deerfield Retirement Community); VRD
Series 2003 A RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 12/01/33(b)(c) A-1 -- 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Iowa (State of) Higher Education Loan
Authority
(Graceland Private College); VRD Series
2003 RB
(LOC-Bank of America N.A.)
1.75%, 02/01/33(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Iowa (State of) School Corps.; School Cash
Anticipation Program Series 2004 A Wts.
Ctfs.
3.00%, 06/30/05(f) -- MIG-1 10,000 10,103,360
- -------------------------------------------------------------------------------------------
Series 2004 B Wts. Ctfs.
2.00%, 01/28/05(f) -- MIG-1 18,000 18,045,776
- -------------------------------------------------------------------------------------------
Iowa City (City of) (ACT, Inc.); VRD Series
2001 RB
1.87%, 04/01/32(m) A-1+ -- 6,815 6,815,000
===========================================================================================
51,964,136
===========================================================================================
KANSAS-1.14%
Eagle Tax Exempt Trust (County of Wyandotte
Unified Government Utility System); VRD
Series 2004-0038 Class A COP (Acquired
09/08/04; Cost $5,000,000)
1.75%, 09/01/21(c)(d)(e) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Leawood (City of); Unlimited Tax Temporary
Notes Series 2004-2 GO
3.00%, 10/01/05 -- MIG-1 14,000 14,182,401
- -------------------------------------------------------------------------------------------
Lenexa (City of) Health Care Facilities
(Lakeview Village Inc.);
VRD Series 2002 B RB (LOC-ABN AMRO Bank
N.V.)
1.72%, 05/15/32(b)(c) A-1 -- 7,500 7,500,000
- -------------------------------------------------------------------------------------------
Olathe (City of) Recreational Facilities
(YMCA of Greater Kansas City Project); VRD
Series 2002 B RB (LOC-Bank of America N.A.)
1.75%, 11/01/18(b)(c) -- VMIG-1 3,100 3,100,000
- -------------------------------------------------------------------------------------------
</Table>
F-15
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
KANSAS-(CONTINUED)
Wichita (City of) Recreational Facilities
(YMCA of Wichita Project); VRD Series 1998
XI RB (LOC-Bank of America N.A.)
(Acquired 02/15/01; Cost $3,500,000)
1.75%, 08/01/09(b)(c)(d) A-1+ -- $ 3,500 $ 3,500,000
===========================================================================================
33,282,401
===========================================================================================
KENTUCKY-1.47%
Kentucky (State of) Asset/Liability
Commission;
General Funding Series 2004 A TRAN
3.00%, 06/29/05 SP-1+ MIG-1 15,000 15,159,010
- -------------------------------------------------------------------------------------------
Kentucky (State of) Area Developing Districts
Financing Trust
(Weekly Acquisition-Ewing); Lease Program
VRD Series 2000 RB (LOC-Wachovia Bank N.A.)
1.79%, 06/01/33(b)(c) A-1 -- 5,910 5,910,000
- -------------------------------------------------------------------------------------------
Newport (City of) Kentucky League of Cities
Funding Trust; Lease Program VRD Series
2002 RB (LOC-U.S. Bank N.A.)
1.53%, 04/01/32(b)(c) -- VMIG-1 20,000 20,000,000
- -------------------------------------------------------------------------------------------
Williamsburg (City of) Educational Building
(Cumberland Project); Refunding &
Improvement VRD Series 2002 RB
(LOC-Fifth Third Bank)
1.51%, 09/01/32(b)(c) A-1+ -- 1,790 1,790,000
===========================================================================================
42,859,010
===========================================================================================
LOUISIANA-0.95%
Eagle Tax Exempt Trust (City of New Orleans);
VRD Series 2000-1801 COP (Acquired
10/10/00; Cost $6,000,000)
1.75%, 12/01/21(c)(d)(e) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Louisiana (State of) Offshore Terminal
Authority (Loop LLC Project); Refunding
Deepwater Port Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.69%, 10/01/19(b)(c) A-1+ VMIG-1 16,400 16,400,000
- -------------------------------------------------------------------------------------------
Louisiana (State of) Public Facilities
Authority (Glen Retirement System Project);
VRD Series 2001 RB (LOC-AmSouth Bank)
(Acquired 08/15/01; Cost $3,380,000)
1.84%, 08/01/16(b)(c)(d) -- VMIG-1 3,380 3,380,000
- -------------------------------------------------------------------------------------------
Louisiana (State of); Unlimited Tax Series
1998 B GO
5.50%, 04/15/05(f) AAA Aaa 1,775 1,815,232
===========================================================================================
27,595,232
===========================================================================================
MAINE-0.29%
Maine (State of) Housing Authority; Mortgage
Purchase VRD Series 2003 E-1 RB
1.73%, 11/15/30(c)(f) A-1+ VMIG-1 8,585 8,585,000
===========================================================================================
</Table>
F-16
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MARYLAND-0.96%
Anne Arundel (County of); Unlimited Tax
Series 2002 GO
4.25%, 03/01/05 AA+ Aa1 $ 1,740 $ 1,762,823
- -------------------------------------------------------------------------------------------
Frederick (County of) Retirement Community
(Buckingham's Choice Inc. Project); VRD
Series 1997 C RB
(LOC-Branch Banking & Trust)
1.75%, 01/01/27(b)(c) A-1 -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
Hyattsville (City of) (Safeway Inc.
Projects); Refunding VRD Series 1991 IDR
(LOC-Deutsche Bank A.G.)
1.45%, 12/01/04(b)(g)(h) A-1 -- 740 740,000
- -------------------------------------------------------------------------------------------
Maryland (State of) Economic Development
Corp.
(YMCA of Central Maryland Inc. Project);
VRD Series 2003 RB
(LOC-Branch Banking & Trust)
1.72%, 04/01/28(b)(c) -- VMIG-1 3,800 3,800,000
- -------------------------------------------------------------------------------------------
Maryland (State of) Health & Higher
Educational Facilities Authority (Pooled
Loan Program); VRD Series 1994 D RB
(LOC-Bank of America N.A.) (Acquired
07/01/04; Cost $11,900,000)
1.70%, 01/01/29(b)(c)(d) A-1+ -- 11,900 11,900,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Maryland Health & Higher
Educational Facilities Authority);
VRD Floating Rate Trust Ctfs. Series
2003-829 RB
(Acquired 06/19/03; Cost $3,800,000)
1.73%, 08/15/38(c)(d)(e) -- VMIG-1 3,800 3,800,000
===========================================================================================
28,002,823
===========================================================================================
MASSACHUSETTS-0.99%
Billerica (City of); Limited Tax Series 2004
BAN GO
2.00%, 01/07/05 SP-1+ MIG-1 18,000 18,042,016
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Development Finance
Agency
(Briarwood Retirement); Series 2004 A RB
(LOC-Sovereign Bank, Comerica Bank)
1.68%, 01/01/35(b)(c) A-1+ -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Housing Finance
Agency;
Housing VRD Series 2003 F RB
1.70%, 12/01/37(c)(f) A-1+ VMIG-1 4,200 4,200,000
- -------------------------------------------------------------------------------------------
Massachusetts (State of) Water Resources
Authority;
Series 1993 C RB
5.25%, 12/01/04(g)(l) NRR Aaa 1,460 1,499,158
===========================================================================================
28,741,174
===========================================================================================
MICHIGAN-3.41%
Dearborn (City of) Economic Development Corp.
(Henry Ford Village Inc. Project); VRD
Limited Tax Series 1998 IDR (LOC-Comerica
Bank)
1.74%, 10/01/23(b)(c)(o) -- -- 8,600 8,600,000
- -------------------------------------------------------------------------------------------
</Table>
F-17
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Eagle Tax Exempt Trust (City of Detroit
School District);
VRD Unlimited Tax Series 2002-6014 Class A
GO
(Acquired 11/06/02; Cost $7,105,000)
1.75%, 05/01/32(c)(d)(e) A-1+ -- $ 7,105 $ 7,105,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Detroit Sewage
Disposal System);
VRD Series 2001 A112 RB
(Acquired 10/31/01; Cost $4,910,000)
1.74%, 07/01/32(c)(d)(e) -- VMIG-1 4,910 4,910,000
- -------------------------------------------------------------------------------------------
VRD Series 2003 B41 RB
(Acquired 07/09/03; Cost $6,770,000)
1.74%, 07/01/26(c)(d)(e) -- VMIG-1 6,770 6,770,000
- -------------------------------------------------------------------------------------------
First Union MERLOTS (City of Detroit Water
Supply System);
VRD Series 1999 D RB (Acquired 01/21/00;
Cost $10,000,000)
1.74%, 07/01/29(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of Michigan
Hospital Finance Authority); VRD Series
1997 X RB
(Acquired 12/12/03; Cost $15,000,000)
1.74%, 08/15/24(c)(d)(e) -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Kalamazoo (County of) Economic Development
Corp. (Heritage Community Project);
Refunding VRD Limited Tax Series 2004 RB
(LOC-Fifth Third Bank)
1.69%, 05/15/17(b)(c) A-1+ -- 5,405 5,405,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Higher Educational
Facilities Authority
(Hope College); Refunding VRD Limited Tax
Series 2004 RB
(LOC-JPMorgan Chase Bank)
1.73%, 04/01/34(b)(c) A-1 -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Hospital Finance
Authority
(Holland Community Hospital); VRD Series
2004 B RB
(LOC-JPMorgan Chase Bank)
1.73%, 01/01/34(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Michigan (State of) Municipal Bond Authority;
Series 2004 B-2 RN (LOC-JPMorgan Chase
Bank)
3.00%, 08/23/05(b) SP-1+ -- 15,000 15,188,557
- -------------------------------------------------------------------------------------------
Michigan (State of) Strategic Fund (Van Andel
Research Institute Project); VRD Limited
Tax Series 1997 RB
(LOC-ABN AMRO Bank N.V.)
1.70%, 11/01/27(b)(c) A-1 -- 12,800 12,800,000
- -------------------------------------------------------------------------------------------
Oakland (County of) Economic Development
Corp. (Rochester College Project); VRD
Limited Obligation Series 2001 RB
(LOC-JPMorgan Chase Bank)
1.80%, 08/01/21(b)(c) -- VMIG-1 1,848 1,848,000
- -------------------------------------------------------------------------------------------
Southfield (City of) (Lawrence Tech
University Project);
Economic Development VRD Series 2001 RB
(LOC-JPMorgan Chase Bank)
1.70%, 10/01/31(b)(c) A-1+ -- 6,000 6,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-18
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MICHIGAN-(CONTINUED)
Troy (City of) School District; Refunding
School Building & Site Unlimited Tax Series
2004 GO
3.00%, 05/01/05 AA+ Aa1 $ 1,805 $ 1,821,650
===========================================================================================
99,448,207
===========================================================================================
MINNESOTA-4.83%
Golden Valley (City of) (Unicare Homes Inc.
Project);
VRD Series 1984 IDR (LOC-ABN AMRO Bank
N.V.)
1.67%, 09/01/14(b)(c) A-1+ -- 4,400 4,400,000
- -------------------------------------------------------------------------------------------
J.P. Morgan PUTTERs (State of Minnesota
Public Facilities Authority); VRD Drinking
Water Series 2002-319 COP
(Acquired 07/31/03; Cost $14,030,000)
1.71%, 03/01/21(c)(d)(e) A-1 -- 14,030 14,030,000
- -------------------------------------------------------------------------------------------
Maple Grove (City of) (Heritage Christian
Academy);
Economic Development VRD Series 2004 RB
(LOC-U.S. Bank N.A.)
1.69%, 07/01/29(b)(c) A-1+ -- 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Minneapolis (City of) (Minnehaha Academy
Project);
VRD Series 2001 RB (LOC-U.S. Bank N.A.)
1.87%, 05/01/26(b)(m)(o) -- -- 2,500 2,500,000
- -------------------------------------------------------------------------------------------
Minneapolis-St. Paul (Cities of) Metropolitan
Council of Minnesota; Unlimited Tax Series
2002 D GO
5.00%, 02/01/05 AAA Aaa 1,190 1,205,464
- -------------------------------------------------------------------------------------------
Minnesota (State of); Refunding Unlimited Tax
Series 2003 GO
2.00%, 08/01/05 AAA Aa1 2,240 2,250,153
- -------------------------------------------------------------------------------------------
Rochester (City of) Health Care Facilities
(Mayo Foundation); Commercial Paper Notes,
Series 2000 A
1.15%, 10/12/04 A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Series 2000 B
1.15%, 11/09/04 A-1+ -- 20,500 20,500,000
- -------------------------------------------------------------------------------------------
Series 2000 C
1.40%, 10/14/04 A-1+ -- 33,500 33,500,000
- -------------------------------------------------------------------------------------------
Series 2001 A
1.13%, 10/12/04 -- VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Series 2001 B
1.13%, 10/12/04 -- VMIG-1 10,600 10,600,000
- -------------------------------------------------------------------------------------------
Series 2001 C
1.40%, 10/14/04 -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Adjustable Tender Series 1998 F
1.15%, 10/12/04 A-1+ -- 8,000 8,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-19
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MINNESOTA-(CONTINUED)
St. Paul (City of) Housing & Redevelopment
Authority
(Science Museum of Minnesota); VRD Series
1997 A RB
(LOC-U.S. Bank N.A.)
1.72%, 05/01/27(b)(c) -- VMIG-1 $16,260 $ 16,260,000
===========================================================================================
140,745,617
===========================================================================================
MISSISSIPPI-2.50%
ABN AMRO Munitops Ctfs. Trust (State of
Mississippi Development Board-Jackson Water
& Sewer); Multi-State Non-AMT
VRD Series 2002-22 Ctfs. (Acquired
09/10/03; Cost $9,995,000)
1.76%, 09/01/10(c)(d)(e) -- VMIG-1 9,995 9,995,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of
Mississippi);
VRD Unlimited Tax Series 2002-6018 Class A
COP
(Acquired 11/20/02; Cost $3,200,000)
1.75%, 11/01/22(c)(d)(e) A-1+ -- 3,200 3,200,000
- -------------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Jackson Medical Mall); VRD Series 2000 A
RB (LOC-JPMorgan Chase Bank)
1.70%, 11/01/18(b)(c) A-1 -- 5,300 5,300,000
- -------------------------------------------------------------------------------------------
Mississippi (State of) Business Finance Corp.
(Mississippi College Project); VRD Series
2003 RB
(LOC-AmSouth Bank) (Acquired 07/17/03; Cost
$9,600,000)
1.84%, 07/01/23(b)(c)(d) -- VMIG-1 9,600 9,600,000
- -------------------------------------------------------------------------------------------
Perry (County of) (Leaf River Forest Products
Project); Refunding VRD Series 2002 PCR
(LOC-Citibank N.A.)
1.72%, 02/01/22(b)(c) A-1+ -- 36,500 36,500,000
- -------------------------------------------------------------------------------------------
University of Mississippi Educational
Building Corp.
(Campus Improvements Project); VRD Series
2000 RB
1.74%, 10/01/20(c)(f) -- VMIG-1 8,235 8,235,000
===========================================================================================
72,830,000
===========================================================================================
MISSOURI-0.96%
Missouri (State of) Development Finance Board
(Center of Creative Arts Project); Cultural
Facilities VRD Series 2004 RB
(LOC-National City Bank)
1.74%, 07/01/24(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority (Lutheran Church);
Educational Facilities VRD Series 2004 A RB
(LOC-Bank of America N.A.)
1.74%, 07/01/29(b)(m) -- VMIG-1 5,740 5,740,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority (Southwest Baptist
University Project); Educational Facilities
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.77%, 10/01/33(b)(m) A-1+ -- 5,950 5,950,000
- -------------------------------------------------------------------------------------------
</Table>
F-20
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
MISSOURI-(CONTINUED)
Missouri (State of) Health & Educational
Facilities Authority (Washington University
Project); Educational Facilities VRD Series
1985 B RB
1.73%, 09/01/10(c) A-1+ VMIG-1 $ 1,000 $ 1,000,000
- -------------------------------------------------------------------------------------------
VRD Series 1996 C RB
1.70%, 09/01/30(m) A-1+ VMIG-1 1,300 1,300,000
- -------------------------------------------------------------------------------------------
VRD Series 1996 D RB
1.70%, 09/01/30(m) A-1+ VMIG-1 1,500 1,500,000
- -------------------------------------------------------------------------------------------
VRD Series 2000 C RB
1.70%, 03/01/40(m) A-1+ VMIG-1 4,300 4,300,000
- -------------------------------------------------------------------------------------------
Missouri (State of) Health & Educational
Facilities Authority
(Cox Health System); Refunding VRD Series
1997 RB
1.70%, 06/01/15(f)(m) A-1+ VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
St. Louis (County of) Industrial Development
Authority
(Friendship Village of South County); VRD
Series 2002 B IDR
(LOC-ABN AMRO Bank N.V.)
1.67%, 09/01/22(b)(c) A-1 -- 2,915 2,915,000
===========================================================================================
28,005,000
===========================================================================================
MONTANA-0.39%
Montana (State of) Facility Finance Authority
(Mission Ridge Project); VRD Series 2002 RB
(LOC-ABN AMRO Bank N.V.)
1.72%, 08/01/27(b)(c)(i) -- -- 11,365 11,365,000
===========================================================================================
NEBRASKA-1.51%
Nebhelp Inc.; Multi-Mode VRD
Series 1985 A RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 5,995 5,995,000
- -------------------------------------------------------------------------------------------
Series 1985 B RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 3,590 3,590,000
- -------------------------------------------------------------------------------------------
Series 1985 D RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 5,865 5,865,000
- -------------------------------------------------------------------------------------------
Series 1985 E RB
1.73%, 12/01/15(c)(f) A-1+ VMIG-1 28,635 28,635,000
===========================================================================================
44,085,000
===========================================================================================
NEVADA-0.88%
ABN AMRO Munitops Ctfs. Trust (County of
Washoe); Refunding VRD Limited Tax Series
2001-24 Single Asset Trust Ctfs. (Acquired
06/21/01; Cost $5,500,000)
1.75%, 07/01/09(c)(d)(e) -- VMIG-1 5,500 5,500,000
- -------------------------------------------------------------------------------------------
Carson (City of) (Carson-Tahoe Hospital
Project);
Hospital VRD Series 2003 B RB (LOC-U.S.
Bank N.A.)
1.69%, 09/01/33(b)(c) A-1+ -- 18,000 18,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-21
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
NEVADA-(CONTINUED)
Clark (County of); Refunding Limited Tax
Series 1998 B GO
5.25%, 11/01/04 AA Aa2 $ 2,245 $ 2,252,753
===========================================================================================
25,752,753
===========================================================================================
NEW HAMPSHIRE-0.45%
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(New Hampshire Higher Educational & Health
Facilities Authority);
Refunding VRD
Series 2003-772 RB
(Acquired 01/22/03; Cost $5,475,000)
1.75%, 01/01/17(c)(d)(e) A-1 -- 5,475 5,475,000
- -------------------------------------------------------------------------------------------
Series 2003-866 RB
(Acquired 10/23/03; Cost $7,485,000)
1.75%, 08/15/21(c)(d)(e) A-1 -- 7,485 7,485,000
===========================================================================================
12,960,000
===========================================================================================
NEW MEXICO-0.05%
Albuquerque (City of) Educational Facilities
(Albuquerque Academy Project); VRD Series
2002 RB
1.73%, 10/15/16(c) AA VMIG-1 1,500 1,500,000
===========================================================================================
NEW YORK-0.34%
ABN AMRO Munitops Ctfs. Trust (Triborough
Bridge & Tunnel Authority); Non-AMT VRD
Series 2002-31 Ctfs.
(Acquired 03/24/04; Cost $10,000,000)
1.70%, 11/15/10(c)(d)(e) -- VMIG-1 10,000 10,000,000
===========================================================================================
NORTH CAROLINA-1.88%
Mecklenburg (County of); Public Improvement
Unlimited Tax Series 1998 B GO
4.40%, 02/01/05 AAA Aaa 13,000 13,130,922
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Barton College); Educational Facilities
VRD Series 2004 RB
(LOC-Branch Banking & Trust)
1.72%, 07/01/19(b)(c) -- VMIG-1 5,750 5,750,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Elon College); VRD Series 2001 A RB
(LOC-Bank of America N.A.)
1.68%, 01/01/14(b)(c)(i) -- -- 4,500 4,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Goodwill Community Foundation Project);
VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.70%, 04/01/22(b)(c)(i) -- -- 2,165 2,165,000
- -------------------------------------------------------------------------------------------
</Table>
F-22
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
NORTH CAROLINA-(CONTINUED)
North Carolina (State of) Capital Facilities
Finance Agency (Thompson Children's Home);
Educational Facilities VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.70%, 12/01/20(b)(c)(i) -- -- $ 3,070 $ 3,070,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency (University of North
Carolina at Pembroke University
Foundation); Student Housing VRD Series
2001 A RB
(LOC-Wachovia Bank N.A.)
1.82%, 07/01/31(b)(c) -- VMIG-1 11,240 11,240,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Capital Facilities
Finance Agency
(Wolfpack Club Project); VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.70%, 04/01/12(b)(c)(i) -- -- 9,500 9,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of) Medical Care
Commission; Refunding First Mortgage Health
Care Facilities VRD Series 2004 C RB
(LOC-SunTrust Bank)
1.72%, 11/01/27(b)(c) -- VMIG-1 3,500 3,500,000
- -------------------------------------------------------------------------------------------
North Carolina (State of); Public Improvement
Unlimited Tax Series 2002 A GO
5.00%, 03/01/05 AAA Aa1 1,865 1,892,943
===========================================================================================
54,748,865
===========================================================================================
OHIO-4.63%
Akron (City of) (Community Learning Centers);
Income Tax Revenue Series 2004 B RB
2.00%, 12/01/04(f) AAA Aaa 1,000 1,001,488
- -------------------------------------------------------------------------------------------
Akron (City of) Bath & Copley (Townships of)
Joint Township Hospital District (Summa
Health Systems); VRD Series 2004 B RB
(LOC-JPMorgan Chase Bank)
1.71%, 11/01/34(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Allen (County of); Refunding Limited Tax
Series 2002 GO
1.70%, 12/01/04(f) -- Aaa 1,000 1,001,075
- -------------------------------------------------------------------------------------------
Butler (County of) Health Care Facilities
(Lifesphere Project); Refunding &
Improvement VRD Series 2002 RB
(LOC-U.S. Bank N.A.)
1.70%, 05/01/27(b)(c) A-1+ -- 8,500 8,500,000
- -------------------------------------------------------------------------------------------
Cambridge (City of) Hospital Facilities
(Regional Medical Center Project);
Refunding & Improvement VRD Series 2001 RB
(LOC-National City Bank)
1.73%, 12/01/21(b)(c) -- VMIG-1 11,515 11,515,000
- -------------------------------------------------------------------------------------------
Centerville (City of) (Bethany Lutheran
Village Project);
Health Care VRD Series 1994 RB
(LOC-National City Bank)
1.73%, 11/01/13(b)(c) -- VMIG-1 2,985 2,985,000
- -------------------------------------------------------------------------------------------
</Table>
F-23
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OHIO-(CONTINUED)
Cincinnati (City of) & Hamilton (County of)
Port Authority (Kenwood Office Association
Project); Economic Development VRD Series
1985 RB (LOC-Fifth Third Bank)
1.77%, 09/01/25(b)(m) A-1+ -- $ 1,185 $ 1,185,000
- -------------------------------------------------------------------------------------------
Cleveland Heights (City of); Limited Tax
Series 2004 BAN GO
2.00%, 08/18/05(o) -- -- 3,234 3,245,177
- -------------------------------------------------------------------------------------------
Cuyahoga (County of) Continuing Care
Facilities; Refunding VRD Series 1999 RB
(LOC-ABN AMRO Bank N.V.)
1.69%, 02/01/29(b)(c) A-1+ -- 15,985 15,985,000
- -------------------------------------------------------------------------------------------
Cuyahoga (County of) Health Care Facilities
(Judson Retirement Community); Refunding
VRD Series 2000 RB
(LOC-National City Bank)
1.72%, 11/15/19(b)(c) A-1 -- 800 800,000
- -------------------------------------------------------------------------------------------
Cuyahoga Falls (City of); Limited Tax Series
2003 Notes
2.00%, 12/16/04 -- MIG-1 7,000 7,009,153
- -------------------------------------------------------------------------------------------
Hamilton (County of) Economic Development
(St. Xavier High School Project); VRD
Series 2003 RB
(LOC-Fifth Third Bank)
1.51%, 04/01/28(b)(c) A-1+ -- 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Lake (County of); Limited Tax Series 2004 BAN
GO
2.00%, 04/14/05(o) -- -- 3,000 3,013,944
- -------------------------------------------------------------------------------------------
Lakewood (City of) (St. Edward High School
Project);
Educational Facilities VRD Series 2000 RB
(LOC-Fifth Third Bank)
1.69%, 08/01/30(b)(c) -- VMIG-1 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Lorain (County of) (Elyria United Methodist
Village);
Refunding Hospital VRD Series 1996 B RB
(LOC-JPMorgan Chase Bank)
1.71%, 06/01/12(b)(c) A-1 VMIG-1 4,685 4,685,000
- -------------------------------------------------------------------------------------------
Lorain (County of) (EMH Regional Medical
Center Project);
Hospital Facilities VRD Series 2001 RB
(LOC-National City Bank)
1.76%, 05/01/26(b)(c)(o) -- -- 15,170 15,170,000
- -------------------------------------------------------------------------------------------
Lorain (County of) Independent Living
Facilities
(Elyria United Methodist Project); VRD
Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.71%, 06/01/25(b)(c) A-1+ -- 9,125 9,125,000
- -------------------------------------------------------------------------------------------
Mahoning (County of) Hospital Facilities
(Forum Health Obligation Group);
VRD Series 1997 B RB
1.70%, 12/01/28(c)(f) A-1+ VMIG-1 10,500 10,500,000
- -------------------------------------------------------------------------------------------
Series 2002 B RB (LOC-Fifth Third Bank)
1.73%, 12/01/27(b)(c) -- VMIG-1 7,200 7,200,000
- -------------------------------------------------------------------------------------------
</Table>
F-24
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OHIO-(CONTINUED)
Marion (County of) (Pooled Lease Program);
Hospital Improvement VRD Series 1990 RB
(LOC-JPMorgan Chase Bank)
1.72%, 08/01/20(b)(c) A-1 -- $ 4,535 $ 4,535,000
- -------------------------------------------------------------------------------------------
Middleburg Heights (City of) (Southwest
General Health);
Hospital Improvement Series 1997 RB
(LOC-Fifth Third Bank)
1.73%, 08/15/22(b)(c) A-1+ -- 5,405 5,405,000
- -------------------------------------------------------------------------------------------
Montgomery (County of) (St. Vincent DePaul
Society);
Limited Obligation VRD Series 1996 RB
(LOC-National City Bank)
1.73%, 12/01/10(b)(c) A-1 -- 1,900 1,900,000
- -------------------------------------------------------------------------------------------
Portage (County of) (Robinson Memorial
Hospital);
Hospital VRD Series 2002 RB (LOC-JPMorgan
Chase Bank)
1.73%, 05/01/17(b)(c) -- VMIG-1 6,255 6,255,000
- -------------------------------------------------------------------------------------------
Solon (City of); Unlimited Tax Series 2003
BAN GO
2.00%, 12/09/04(o) -- -- 2,800 2,804,536
- -------------------------------------------------------------------------------------------
Twinsburg (City of) School District;
Refunding Unlimited Tax Series 2004 GO
2.00%, 12/01/04(f) -- Aaa 1,800 1,802,977
===========================================================================================
134,923,350
===========================================================================================
OKLAHOMA-1.79%
Mustang (City of) Improvement Authority;
Refunding Series 1995 RB
5.38%, 12/01/04(g)(l) AAA Aaa 3,135 3,188,215
- -------------------------------------------------------------------------------------------
Oklahoma (County of) Finance Authority
(Oxford Oaks Apartments Projects);
Refunding Multi-Family Housing VRD Series
2000 RB
(CEP-Federal National Mortgage Association)
1.71%, 07/15/30(c) A-1+ -- 27,695 27,695,000
- -------------------------------------------------------------------------------------------
Oklahoma (State of) Development Finance
Authority
(Capitol Dome Project); VRD Series 2001 RB
(LOC-Bank of America N.A.)
1.79%, 06/01/11(b)(c) A-1+ -- 3,785 3,785,000
- -------------------------------------------------------------------------------------------
Oklahoma (State of) Water Resource Board;
State Loan Program VRD Series 2003 A RB
0.98%, 10/01/04(g)(h) A-1+ -- 14,935 14,935,000
- -------------------------------------------------------------------------------------------
Tulsa (County of) Industrial Authority;
Capital Improvements Series 2003 B RB
4.00%, 05/15/05 AA -- 2,500 2,537,739
===========================================================================================
52,140,954
===========================================================================================
</Table>
F-25
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
OREGON-1.15%
Oregon (State of) Health, Housing,
Educational & Cultural Facilities Authority
(Quatama Crossing LLC Housing Project);
VRD Series 1998 RB (LOC-U.S. Bank N.A.)
1.74%, 01/01/31(b)(c) -- Aa2 $ 7,430 $ 7,430,000
- -------------------------------------------------------------------------------------------
Oregon (State of); Unlimited Tax Series 2003
TAN GO
2.25%, 11/15/04 SP-1+ MIG-1 25,000 25,030,450
- -------------------------------------------------------------------------------------------
Salem (City of) Water & Sewer; Refunding
Series 2004 RB
3.00%, 05/01/05(f) AAA Aaa 1,175 1,184,588
===========================================================================================
33,645,038
===========================================================================================
PENNSYLVANIA-2.78%
ABN AMRO Munitops Ctfs. Trust (State of
Pennsylvania Public School Building
Authority); Non-AMT VRD
Series 2001-30 Ctfs. (Acquired 10/31/02;
Cost $5,000,000)
1.74%, 09/01/09(c)(d)(e) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Series 2003-24 Ctfs. (Acquired 03/08/04;
Cost $7,000,000)
1.74%, 06/01/11(c)(d)(e) -- VMIG-1 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Allegheny (County of) Hospital Development
Authority (ACES-Presbyterian University
Hospital); VRD Series 1988 B1 RB
(LOC-JPMorgan Chase Bank)
1.70%, 03/01/18(b)(c) -- VMIG-1 2,085 2,085,000
- -------------------------------------------------------------------------------------------
Allegheny (County of) Industrial Development
Authority
(Carnegie Museums of Pittsburgh); VRD
Series 2002 IDR
(LOC-Royal Bank of Scotland)
1.70%, 08/01/32(b)(c) -- VMIG-1 2,000 2,000,000
- -------------------------------------------------------------------------------------------
Altoona (City of) Authority; Water Series
1994 A RB
6.50%, 11/01/04(g)(l) AAA NRR 1,700 1,741,627
- -------------------------------------------------------------------------------------------
Berks (County of) Industrial Development
Authority
(Lutheran Services); Health Care VRD Series
1998 A IDR
1.69%, 01/01/28(c)(f) -- VMIG-1 9,588 9,588,000
- -------------------------------------------------------------------------------------------
Chartiers Valley (Community of) Industrial &
Commercial Development Authority (Asbury
Villas Project);
VRD Series 2000 B IDR (LOC-ABN AMRO Bank
N.V.)
1.72%, 12/01/30(b)(c) A-1 -- 3,000 3,000,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Delaware Valley
Regional);
VRD Series 2001-3801 Class A COP
(Acquired 06/04/01; Cost $8,900,000)
1.75%, 08/01/28(c)(d)(e) A-1+ -- 8,900 8,900,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (City of Scranton &
County of Lackawanna Health & Welfare
Authority); VRD Series 2002 A-18 RB
(Acquired 03/22/02; Cost $2,860,000)
1.74%, 03/01/15(c)(d)(e) -- VMIG-1 2,860 2,860,000
- -------------------------------------------------------------------------------------------
</Table>
F-26
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
PENNSYLVANIA-(CONTINUED)
Franklin (County of) Industrial Development
Authority (Chambersburg Hospital
Obligation);
Health Care VRD Series 2000 IDR
1.79%, 12/01/24(c)(f) A-1 Aaa $ 3,575 $ 3,575,000
- -------------------------------------------------------------------------------------------
Geisinger Authority Health System (Geisinger
Health System Foundation); Refunding VRD
Series 2000 RB
1.71%, 08/01/28(m) A-1+ VMIG-1 25,950 25,950,000
- -------------------------------------------------------------------------------------------
Lehigh (County of) Industrial Development
Authority
(Allegheny Electric Coop. Inc.);
VRD Series 1984 PCR (LOC-Rabobank
Nederland)
1.30%, 10/01/14(b)(j) A-1+ -- 7,180 7,180,000
- -------------------------------------------------------------------------------------------
Refunding VRD Series 1984 PCR (LOC-Rabobank
Nederland)
1.30%, 06/01/14(b)(j) A-1+ -- 1,030 1,030,000
- -------------------------------------------------------------------------------------------
Philadelphia (City of) Industrial Development
Authority
(Girard Estate Aramark Project); VRD Series
2002 IDR
(LOC-JP Morgan Chase Bank)
1.70%, 06/01/32(b)(c) A-1+ -- 1,000 1,000,000
===========================================================================================
80,909,627
===========================================================================================
SOUTH CAROLINA-2.07%
Cherokee (County of) (Newark Electronics
Division); Industrial VRD Series 1985 RB
(LOC-ABN AMRO Bank N.V.)
1.71%, 12/01/15(b)(c) A-1 -- 6,500 6,500,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of South
Carolina Public Service Authority); VRD
Series 2000-4001 Class A COP
(Acquired 09/08/00; Cost $10,100,000)
1.75%, 01/01/22(c)(d)(e) A-1+ -- 10,100 10,100,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (State of South Carolina
Public Service Authority); VRD Series 2000
L RB
(Acquired 02/25/00; Cost $11,590,000)
1.74%, 01/01/22(c)(d)(e) -- VMIG-1 11,590 11,590,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of South Carolina Transportation
Infrastructure Bank); Floating Rate Trust
Ctfs. VRD Series 2002-728 RB (Acquired
11/13/02; Cost $7,185,000)
1.73%, 10/01/22(c)(d)(e) -- VMIG-1 7,185 7,185,000
- -------------------------------------------------------------------------------------------
Oconee (County of) (Duke); Refunding VRD
Series 1993 PCR (LOC-JPMorgan Chase Bank)
1.70%, 02/01/17(b)(c) -- P-1 6,000 6,000,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Educational
Facilities Authority
for Non-Profit Institutions (The Allen
University Project);
VRD Series 1998 RB (LOC-Bank of America
N.A.)
(Acquired 03/27/01; Cost $2,525,000)
1.75%, 09/01/18(b)(c)(d) A-1+ -- 2,525 2,525,000
- -------------------------------------------------------------------------------------------
</Table>
F-27
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
SOUTH CAROLINA-(CONTINUED)
South Carolina (State of) Educational
Facilities Authority
for Non-Profit Institutions (Morris College
Project);
VRD Series 1997 RB (LOC-Bank of America
N.A.)
(Acquired 07/30/02; Cost $2,100,000)
1.75%, 07/01/17(b)(c)(d) A-1+ -- $ 2,100 $ 2,100,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Carolina Children's
Home Project); VRD Series 2003 RB
(LOC-Branch Banking & Trust)
1.72%, 03/01/23(b)(c) -- VMIG-1 3,335 3,335,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Carolina Piedmont
Foundation Project); VRD Series 2002 RB
(LOC-Bank of America N.A.)
1.75%, 09/01/32(b)(c)(i) -- -- 4,000 4,000,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Catholic Diocese of
South Carolina Project); VRD Series 1998 RB
(LOC-Bank of America N.A.) (Acquired
07/23/02; Cost $2,555,000)
1.75%, 09/01/18(b)(c)(d) A-1+ -- 2,555 2,555,000
- -------------------------------------------------------------------------------------------
South Carolina (State of) Jobs-Economic
Development Authority (Presbyterian Home of
South Carolina Project);
VRD Series 2003 A RB (LOC-Wachovia Bank
N.A.)
1.75%, 04/01/20(b)(c) A-1 -- 4,535 4,535,000
===========================================================================================
60,425,000
===========================================================================================
SOUTH DAKOTA-0.11%
South Dakota (State of) Health & Educational
Facilities Authority (University of Sioux
Falls); VRD Series 2001 RB
(LOC-Wells Fargo Bank N.A.)
1.71%, 10/01/16(b)(c) A-1+ -- 3,155 3,155,000
===========================================================================================
TENNESSEE-5.46%
Eagle Tax Exempt Trust (City of Chattanooga);
VRD Series 2000-4202 Class A COP (Acquired
10/10/00; Cost $14,040,000)
1.75%, 10/01/27(c)(d)(e) A-1+ -- 14,040 14,040,000
- -------------------------------------------------------------------------------------------
Jackson (City of) Energy Authority; Electric
Systems VRD Series 2003 B RB
1.70%, 11/01/26(c)(f) -- VMIG-1 12,700 12,700,000
- -------------------------------------------------------------------------------------------
Jackson (City of) Health & Educational
Facilities Board (Trinity Christian
Academy); Educational Facilities VRD Series
2002 RB
(LOC-AmSouth Bank)
1.84%, 03/01/22(b)(c) -- VMIG-1 5,400 5,400,000
- -------------------------------------------------------------------------------------------
Knox (County of) Health Educational & Housing
Facility Board (Volunteer Student Housing
LLC Project); Student Housing VRD Series
2002 RB (LOC-Wachovia Bank N.A.)
1.69%, 09/01/34(b)(c) -- VMIG-1 27,020 27,020,000
- -------------------------------------------------------------------------------------------
</Table>
F-28
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TENNESSEE-(CONTINUED)
Memphis (City of); Electric System Sub-Series
2003 A RB
2.00%, 12/01/04 AA- Aa3 $10,000 $ 10,014,023
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(City of Nashville & County of Davidson);
Unlimited Tax Series 2003-871 GO
(Acquired 11/17/03; Cost $4,995,000)
1.73%, 10/15/10(c)(d)(e) -- VMIG-1 4,995 4,995,000
- -------------------------------------------------------------------------------------------
Sevier (County of) Public Building Authority
(Local Government Public Improvement);
VRD Series 1995 A RB
1.72%, 06/01/15(c)(f) AAA VMIG-1 5,230 5,230,000
- -------------------------------------------------------------------------------------------
VRD Series 1995 B-2 RB
1.72%, 06/01/06(c)(f) AAA VMIG-1 1,200 1,200,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 I A-1 RB
1.72%, 06/01/22(c)(f) -- VMIG-1 5,900 5,900,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-1 RB
1.72%, 06/01/21(c)(f) -- VMIG-1 2,100 2,100,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-3 RB
1.72%, 06/01/10(c)(f) -- VMIG-1 1,485 1,485,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II E-5 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 1,320 1,320,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II F-1 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 1,190 1,190,000
- -------------------------------------------------------------------------------------------
VRD Series 1997 II F-5 RB
1.72%, 06/01/27(c)(f) -- VMIG-1 2,265 2,265,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-1 RB
1.72%, 06/01/07(c)(f) -- VMIG-1 14,950 14,950,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-3 RB
1.72%, 06/01/19(c)(f) -- VMIG-1 1,425 1,425,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III A-4 RB
1.72%, 06/01/17(c)(f) -- VMIG-1 300 300,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III B-2 RB
1.72%, 06/01/19(c)(f) -- VMIG-1 5,650 5,650,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III C-3 RB
1.72%, 06/01/18(c)(f) -- VMIG-1 3,475 3,475,000
- -------------------------------------------------------------------------------------------
VRD Series 1998 III C-4 RB
1.72%, 06/01/20(c)(f) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
VRD Series 1999 II A-1 RB
1.72%, 06/01/24(c)(f) -- VMIG-1 6,300 6,300,000
- -------------------------------------------------------------------------------------------
VRD Series 1999 II B-1 RB
1.72%, 06/01/25(c)(f) -- VMIG-1 1,700 1,700,000
- -------------------------------------------------------------------------------------------
</Table>
F-29
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TENNESSEE-(CONTINUED)
Shelby (County of) Health, Educational &
Housing Facilities Board (Briarcrest
Christian School System); Educational
Facilities VRD Series 2002 RB (LOC-SunTrust
Bank)
1.69%, 04/01/22(b)(c) -- VMIG-1 $11,050 $ 11,050,000
- -------------------------------------------------------------------------------------------
Shelby (County of) Health, Educational &
Housing Facilities Board (St. Benedict
Auburndale School); VRD Series 2003 RB
(LOC-AmSouth Bank)
1.74%, 05/01/33(b)(c) -- VMIG-1 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Tennessee (State of) Local Development
Authority (Community Provider Pooled Loan
Program); Series 1994 RB
6.45%, 10/01/04(g)(l) NRR -- 1,000 1,020,000
- -------------------------------------------------------------------------------------------
Washington (County of) (Capital Outlay
Notes);
Refunding Unlimited Tax Series 2002 GO
4.00%, 02/01/05(f) -- Aaa 1,000 1,009,664
- -------------------------------------------------------------------------------------------
Williamson (County of) Industrial Development
Board (Currey Ingram Academy); Educational
Facilities VRD Series 2003 RB
(LOC-SunTrust Bank)
1.75%, 04/01/23(b)(c) -- VMIG-1 2,500 2,500,000
===========================================================================================
159,238,687
===========================================================================================
TEXAS-11.84%
ABN AMRO Munitops Ctfs. Trust (City of
Leander Independent School District);
Unlimited Multi-State Non-AMT VRD Series
2002-16 Ctfs. (Acquired 08/20/03; Cost
$5,395,000)
1.75%, 08/15/10(c)(d)(e) -- VMIG-1 5,395 5,395,000
- -------------------------------------------------------------------------------------------
Alief (City of) Independent School District;
Unlimited Tax Series 1997 GO (CEP-Texas
Permanent School Fund)
6.60%, 02/15/05 AAA Aaa 1,000 1,020,512
- -------------------------------------------------------------------------------------------
Amarillo (City of) Health Facilities Corp.
(Panhandle Pooled Health Care); VRD Series
1985 ACES RB (LOC-BNP Paribas)
1.75%, 05/31/25(b)(c) -- VMIG-1 4,862 4,862,000
- -------------------------------------------------------------------------------------------
Austin (City of) Water & Wastewater System;
Refunding Series 2002 A RB
5.00%, 11/15/04(f) AAA Aaa 4,000 4,019,072
- -------------------------------------------------------------------------------------------
Austin (City of); Refunding Utility System
Series 1995 RB
5.60%, 05/15/05(g)(l) AAA Aaa 5,000 5,128,791
- -------------------------------------------------------------------------------------------
Austin (City of); Utility System Series 1994
RB
5.75%, 11/15/04(g)(i) AAA Aaa 2,605 2,619,767
- -------------------------------------------------------------------------------------------
Bexar (County of) Health Facilities
Development Corp.
(Air Force Village); VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.69%, 08/15/30(b)(c) A-1+ -- 19,500 19,500,000
- -------------------------------------------------------------------------------------------
</Table>
F-30
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Bexar (County of) Health Facilities
Development Corp.
(Warm Springs); Healthcare System VRD
Series 1997 RB
(LOC-JPMorgan Chase Bank)
1.74%, 09/01/27(b)(c) -- VMIG-1 $ 3,435 $ 3,435,000
- -------------------------------------------------------------------------------------------
Brownsville (City of) Utility Systems;
Refunding Sub. Lien VRD Series 2001 A RB
0.95%, 11/04/04(f)(g)(k) A-1+ VMIG-1 3,300 3,300,000
- -------------------------------------------------------------------------------------------
Dallas (City of) Waterworks & Sewer System;
Refunding Series 2002 A RB
4.00%, 10/01/04 AA+ Aa2 3,500 3,500,000
- -------------------------------------------------------------------------------------------
Dallas (City of); Limited Tax Series 2003 GO
3.50%, 02/15/05 AA+ Aa1 1,500 1,513,855
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Houston
Airport);
VRD Series 2000-4307 COP (Acquired
11/15/00; Cost $15,750,000)
1.75%, 07/01/28(c)(d)(e) A-1+ -- 15,750 15,750,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (City of Houston Water
& Sewer);
VRD Series 1997-4305 Class A COP (Acquired
04/27/99; Cost $14,005,000)
1.75%, 12/01/27(c)(d)(e) A-1+ -- 14,005 14,005,000
- -------------------------------------------------------------------------------------------
VRD Series 2002-6019 Class A COP (Acquired
11/13/02; Cost $8,910,000)
1.75%, 12/01/30(c)(d)(e) A-1+ -- 8,910 8,910,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (Harris County Toll
Road);
VRD Series 2001-4305 COP
(Acquired 05/08/01; Cost $7,390,000)
1.75%, 08/01/14(c)(d)(e) A-1+ -- 7,390 7,390,000
- -------------------------------------------------------------------------------------------
VRD Series 2002-6012 Class A COP
(Acquired 11/20/02; Cost $1,580,000)
1.75%, 08/15/30(c)(d)(e) A-1+ -- 1,580 1,580,000
- -------------------------------------------------------------------------------------------
El Paso (County of); Refunding Limited Tax
Series 2002 A GO
3.25%, 02/15/05(f) AAA Aaa 1,040 1,048,302
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Harris County Toll
Road);
VRD Series 2003 B16 RB (Acquired 02/19/03;
Cost $3,015,000)
1.57%, 08/15/25(c)(d)(e) -- VMIG-1 3,015 3,015,000
- -------------------------------------------------------------------------------------------
First Union MERLOTs (Jefferson County Health
Facilities Development Corp.); VRD Series
2001 A83 RB
(Acquired 11/18/03; Cost $3,570,000)
1.20%, 11/16/04(d)(e)(g)(k)(n) A-1 -- 3,570 3,570,000
- -------------------------------------------------------------------------------------------
Fort Worth (City of); Limited Tax Series 2000
GO Ctfs.
6.25%, 03/01/05(g)(l) NRR NRR 5,000 5,105,817
- -------------------------------------------------------------------------------------------
Garland (City of) Industrial Development
Authority Inc. (Carroll Co. Project); VRD
Series 1984 IDR (LOC-Wells Fargo Bank N.A.)
(Acquired 09/03/03; Cost $2,300,000)
1.74%, 12/01/14(b)(c)(d) -- Aaa 2,300 2,300,000
- -------------------------------------------------------------------------------------------
</Table>
F-31
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Goose Creek (City of) Consolidated
Independent School District; Refunding
Unlimited Tax Series 2002 A GO
(CEP-Texas Permanent School Fund)
4.00%, 02/15/05 AAA Aaa $ 1,520 $ 1,536,322
- -------------------------------------------------------------------------------------------
Grand Prairie (City of) Housing Finance Corp.
(Lincoln Property Co.); Refunding
Multi-Family Housing VRD Series 1993 RB
(CEP-General Electric Corp.)
1.77%, 06/01/10(c) A-1+ -- 2,700 2,700,000
- -------------------------------------------------------------------------------------------
Grapevine (City of) Industrial Development
Corp.
(Southern Air Transport); Refunding Airport
Series 1993 RB
(LOC-JPMorgan Chase Bank)
1.77%, 03/01/10(b)(c) A-1+ -- 2,300 2,300,000
- -------------------------------------------------------------------------------------------
Harris (County of) Cultural Education
Facilities Finance Corp. (Houston Music
Hall Foundation); VRD Series 1999 RB
(LOC-JPMorgan Chase Bank)
1.74%, 06/01/29(b)(c) A-1+ -- 700 700,000
- -------------------------------------------------------------------------------------------
Harris (County of) Hospital District; Sub.
Lien Commercial Paper Series A RN (LOC-Bank
of America N.A.)
1.28%, 11/22/04(b) A-1+ -- 9,451 9,451,000
- -------------------------------------------------------------------------------------------
Harris (County of) Houston Texas Sports
Authority (Rodeo);
Jr. Lein VRD Series 2001 C RB
1.77%, 11/15/30(c)(f) A-1+ VMIG-1 6,400 6,400,000
- -------------------------------------------------------------------------------------------
Harris (County of); Permanent Improvement
Unlimited Tax Series 2003 GO
3.00%, 10/01/04 AA+ Aa1 1,000 1,000,000
- -------------------------------------------------------------------------------------------
Harris (County of); Refunding Unlimited Tax
Series 2001 GO
5.00%, 10/01/04 AA+ Aa1 4,970 4,970,000
- -------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corp. (AMOCO Project);
VRD Series 1985 PCR
1.15%, 11/01/04(g)(h) A-1+ P-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Hockley (County of) Industrial Development
Corp.
(AMOCO Project-Standard Oil Co.); VRD
Series 1983 PCR
1.40%, 03/01/05(g)(h) A-1+ Aa1 12,775 12,775,000
- -------------------------------------------------------------------------------------------
Houston (City of) Independent School District
(Schoolhouse);
Limited Tax Series 2004 GO
(CEP-Texas Permanent School Fund)
1.62%, 06/09/05(g)(k) A-1+ VMIG-1 15,000 15,000,000
- -------------------------------------------------------------------------------------------
Houston (City of); Commercial Paper Notes
Series 2003 A GO
1.30%, 10/21/04 A-1+ P-1 20,000 20,000,000
- -------------------------------------------------------------------------------------------
1.37%, 11/15/04 A-1+ P-1 24,000 24,000,000
- -------------------------------------------------------------------------------------------
1.38%, 01/25/05 A-1+ P-1 13,400 13,400,000
- -------------------------------------------------------------------------------------------
Mansfield (City of); Refunding Unlimited Tax
VRD Series 2004 GO
2.00%, 02/15/05(f) AAA Aaa 855 857,910
- -------------------------------------------------------------------------------------------
</Table>
F-32
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
TEXAS-(CONTINUED)
Merrill Lynch P-Floats (City of Brazosport
Independent School District); Refunding
Unlimited Tax VRD Series 2003 PT-1690 GO
(Acquired 02/20/03; Cost $4,920,000)
1.73%, 08/15/10(c)(d)(e) -- VMIG-1 $ 4,920 $ 4,920,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (County of Harris
Hospital District);
VRD Series 2002 PT-665 RB (Acquired
10/02/02; Cost $5,935,000)
1.73%, 08/15/08(c)(d)(e) A-1+ -- 5,935 5,935,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(State of Texas Affordable Housing Corp.);
Floating Rate Trust Ctfs. VRD Series
2003-780 RB
(Acquired 02/19/03; Cost $1,995,000)
1.73%, 09/01/22(c)(d)(e) -- VMIG-1 1,995 1,995,000
- -------------------------------------------------------------------------------------------
Northside Independent School District;
Refunding VRD Unlimited Tax Series 2003 B
GO (CEP-Texas Permanent School Fund)
1.75%, 08/01/05(g)(k) A-1+ VMIG-1 1,870 1,870,000
- -------------------------------------------------------------------------------------------
Pine Tree Independent School District;
Unlimited Tax Series 1994 GO (CEP-Texas
Permanent School Fund)
5.25%, 02/15/05(g)(k) NRR Aaa 910 923,135
- -------------------------------------------------------------------------------------------
San Antonio (City of) Water & Sewer System;
Commercial Paper Notes Series 2001 A GO
1.15%, 10/21/04 A-1+ P-1 29,900 29,900,000
- -------------------------------------------------------------------------------------------
Sherman (City of) Higher Education Finance
Corp. (Austin College Project); Higher
Education VRD Series 1997 RB
(LOC-Bank of America N.A.)
1.75%, 01/01/18(b)(c) A-1+ -- 12,800 12,800,000
- -------------------------------------------------------------------------------------------
Spring (City of) Independent School District;
Unlimited Tax Series 2004 GO (CEP-Texas
Permanent School Fund)
2.50%, 02/15/05 AAA Aaa 2,195 2,206,356
- -------------------------------------------------------------------------------------------
Texas (State of); Series 2004 TRAN
3.00%, 08/31/05 SP-1+ MIG-1 30,000 30,378,015
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (Southeast Texas Housing
Finance Corp.);
VRD Series 2001 A18 RB (Acquired 11/18/03;
Cost $4,130,000)
1.20%, 11/16/04(d)(e)(g)(k)(n) A-1 -- 4,130 4,130,000
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (University of Texas);
Refunding VRD Series 2003 B14 RB (Acquired
01/29/03; Cost $8,005,000)
1.72%, 08/15/22(c)(d)(e) -- VMIG-1 8,005 8,005,000
===========================================================================================
345,120,854
===========================================================================================
UTAH-1.47%
Davis (County of) Housing Authority (Fox
Creek Apartments); Refunding Multi-Family
Housing VRD Series 1997 A RB
(LOC-JPMorgan Chase Bank)
1.71%, 08/15/27(b)(c) A-1 -- 4,240 4,240,000
- -------------------------------------------------------------------------------------------
Davis (County of); Unlimited Tax Series 2004
TRAN
2.25%, 12/30/04 -- MIG-1 4,000 4,009,763
- -------------------------------------------------------------------------------------------
</Table>
F-33
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
UTAH-(CONTINUED)
First Union MERLOTs (Intermountain Power
Agency);
Power Supply VRD Series 2002 A59 RB
(Acquired 10/23/02; Cost $7,040,000)
1.74%, 07/01/10(c)(d)(e) -- VMIG-1 $ 7,040 $ 7,040,000
- -------------------------------------------------------------------------------------------
Intermountain Power Agency; Power Supply VRD
Series 1985 E RB
1.24%, 12/01/04(f)(g)(k) A-1+ VMIG-1 14,770 14,770,000
- -------------------------------------------------------------------------------------------
Merrill Lynch P-Floats (City of Murray
Hospital); VRD Series 2002 PA-1066 RB
(Acquired 10/02/02; Cost $5,995,000)
1.73%, 05/15/22(c)(d)(e) A-1 -- 5,995 5,995,000
- -------------------------------------------------------------------------------------------
Salt Lake (City of) (Gateway Project);
Special Assessment VRD Series 2003
(LOC-Citibank N.A.)
1.70%, 12/01/23(b)(c) A-1+ -- 5,850 5,850,000
- -------------------------------------------------------------------------------------------
Sanpete (County of) School Facilities
(Wasatch Academy);
VRD Series 2003 RB (LOC-U.S. Bank N.A.)
1.76%, 08/01/28(b)(c) A-1+ -- 900 900,000
===========================================================================================
42,804,763
===========================================================================================
VERMONT-0.22%
Vermont (State of) Student Assistance Corp.;
Student Loan VRD Series 1985 RB (LOC-State
Street Bank & Trust Co.)
1.35%, 01/01/08(b)(j) -- VMIG-1 2,640 2,640,000
- -------------------------------------------------------------------------------------------
Vermont (State of); Unlimited Tax Series 1994
A GO
6.40%, 01/15/05(g)(l) NRR NRR 3,510 3,632,758
===========================================================================================
6,272,758
===========================================================================================
VIRGINIA-0.82%
Chesapeake (City of) Hospital Authority
(Chesapeake General Hospital); Hospital
Facility VRD Series 2001 B RB
(LOC-SunTrust Bank)
1.69%, 07/01/31(b)(c) A-1+ -- 1,545 1,545,000
- -------------------------------------------------------------------------------------------
Henrico (County of) Economic Development
Authority
(Westminster Centerbury); Residential Care
Facilities
VRD Series 2003 B RB (LOC-KBC Bank N.V.)
1.69%, 07/01/08(b)(c) -- VMIG-1 17,100 17,100,000
- -------------------------------------------------------------------------------------------
Richmond (City of) Industrial Development
Authority;
Educational Facilities VRD Series 2002 RB
(LOC-SunTrust Bank)
1.70%, 05/01/32(b)(c) -- VMIG-1 2,900 2,900,000
- -------------------------------------------------------------------------------------------
Rockingham (County of) Industrial Development
Authority (Sunnyside Presbyterian Home);
Residential Care Facilities VRD Series 2003
RB (LOC-Branch Banking & Trust)
1.72%, 12/01/33(b)(c) A-1 -- 750 750,000
- -------------------------------------------------------------------------------------------
</Table>
F-34
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
VIRGINIA-(CONTINUED)
Winchester (City of) Industrial Development
Authority (Shenandoah University);
Educational Facilities First Mortgage
Series 1994 IDR
6.70%, 10/01/04(g)(l) NRR NRR $ 1,620 $ 1,652,400
===========================================================================================
23,947,400
===========================================================================================
WASHINGTON-5.39%
ABN AMRO Munitops Ctfs. Trust (City of
Seattle Municipal Light & Power);
Multi-State Non-AMT VRD Series 2002-12
Ctfs. (Acquired 05/25/04; Cost $9,755,000)
1.75%, 03/01/09(c)(d)(e) -- VMIG-1 9,755 9,755,000
- -------------------------------------------------------------------------------------------
ABN AMRO Munitops Ctfs. Trust (City of
Seattle);
Multi-State Non-AMT VRD Limited Tax Series
2003-7 GO Ctfs.
(Acquired 05/13/03; Cost $10,685,000)
1.34%, 11/17/04(d)(e)(g)(i)(k)(n) -- -- 10,685 10,685,000
- -------------------------------------------------------------------------------------------
ABN AMRO Munitops Ctfs. Trust (King County);
Multi-State Non-AMT VRD Limited Tax Series
2001-1 GO Ctfs.
(Acquired 01/04/01; Cost $10,000,000)
1.75%, 07/01/06(c)(d)(e) -- VMIG-1 10,000 10,000,000
- -------------------------------------------------------------------------------------------
Bremerton (City of) (Kitsap Regional
Conference Center);
VRD Series 2003 RB (LOC-Bank of America
N.A.)
1.75%, 12/01/28(b)(c)(i) -- -- 2,565 2,565,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Washington
Public Power Supply Systems Project No. 2);
VRD Series 96-4703 Class A COP (Acquired
05/02/01; Cost $5,870,000)
1.75%, 07/01/11(c)(d)(e) A-1+ -- 5,870 5,870,000
- -------------------------------------------------------------------------------------------
Eagle Tax Exempt Trust (State of Washington);
VRD Series 98-4701 Class A COP (Acquired
07/20/00; Cost $14,400,000)
1.75%, 05/01/18(c)(d)(e) A-1+ -- 14,400 14,400,000
- -------------------------------------------------------------------------------------------
Everett (City of) Public Facilities District;
Commercial Paper TRAN (LOC-Bank of America
N.A.)
1.00%, 10/26/04(b) A-1+ -- 4,300 4,300,000
- -------------------------------------------------------------------------------------------
Everett (City of) Public Facilities District;
Commercial Paper Notes (LOC-Bank of America
N.A.)
1.00%, 10/26/04(b) A-1+ -- 7,000 7,000,000
- -------------------------------------------------------------------------------------------
Everett (City of); VRD Limited Tax Series
2001 GO
(LOC-Bank of America N.A.)
1.75%, 12/01/21(b)(c)(i) -- -- 2,600 2,600,000
- -------------------------------------------------------------------------------------------
Issaquah (City of) Community Properties; VRD
Special Revenue Series 2001 A RB (LOC-Bank
of America N.A.)
1.73%, 02/15/21(b)(c) -- VMIG-1 10,150 10,150,000
- -------------------------------------------------------------------------------------------
King & Snohomish (Counties of) School
District No. 417 (Northshore); Unlimited
Tax Series 2003 GO
2.00%, 12/01/04(f) AAA Aaa 3,300 3,304,792
- -------------------------------------------------------------------------------------------
</Table>
F-35
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
King (County of) Economic Enterprise Corp.
(Puget Sound Blood Center Project);
VRD Series 1998 RB (LOC-U.S. Bank N.A.)
1.74%, 04/01/23(b)(c) -- VMIG-1 $ 3,810 $ 3,810,000
- -------------------------------------------------------------------------------------------
Lake Tapps Parkway Properties; Special
Revenue VRD
(LOC-U.S. Bank N.A.)
Series 1999 A RB
1.73%, 12/01/19(b)(c) -- VMIG-1 11,800 11,800,000
- -------------------------------------------------------------------------------------------
Series 1999 B RB
1.73%, 12/01/19(b)(c) -- VMIG-1 700 700,000
- -------------------------------------------------------------------------------------------
Morgan Stanley & Co. Inc. Trust Floater Ctfs.
(Port of Seattle);
VRD Series 2002-739D RB (Acquired 07/21/04;
Cost $5,000,000)
1.73%, 09/01/20(c)(d)(e) A-1 -- 5,000 5,000,000
- -------------------------------------------------------------------------------------------
Pierce (County of) Economic Development Corp.
(Weyerhaeuser Real Estate); Special Revenue
VRD Series 1997 RB
(LOC-Bank of America N.A.)
1.73%, 01/01/27(b)(c) A-1+ VMIG-1 12,705 12,705,000
- -------------------------------------------------------------------------------------------
Seattle (Port of) Industrial Development
Corp. (Sysco Food Services Project);
Refunding VRD Series 1994 IDR
1.72%, 11/01/25(c) A-1+ VMIG-1 8,000 8,000,000
- -------------------------------------------------------------------------------------------
Seattle (City of) Housing Authority (Bayview
Manor Project);
Low Income Housing Assistance VRD Series
1994 B RB
(LOC-U.S. Bank N.A.)
1.74%, 05/01/19(b)(c) A-1+ -- 2,340 2,340,000
- -------------------------------------------------------------------------------------------
Seattle (City of) Housing Authority (Pioneer
Human Services Project); Refunding VRD
Series 1995 RB (LOC-U.S. Bank N.A.)
1.74%, 12/01/15(b)(c) A-1+ -- 1,975 1,975,000
- -------------------------------------------------------------------------------------------
Snohomish (County of) Housing Authority (Ebey
Arms Centerhouse Project); Refunding
Housing VRD Series 2003 RB
(LOC-Bank of America N.A.)
1.75%, 12/01/34(b)(c)(i) -- -- 6,245 6,245,000
- -------------------------------------------------------------------------------------------
Vancouver (City of) Housing Authority
(Village Park Apartments Project); Housing
VRD Series 2000 RB (LOC-U.S. Bank N.A.)
1.73%, 11/02/05(b)(c) A-1+ -- 1,430 1,430,000
- -------------------------------------------------------------------------------------------
Wachovia MERLOTs (Central Puget Sound
Regional Transit Authority); Sales Tax &
Motor VRD Series 2001 A46 RB
(Acquired 11/12/03; Cost $6,275,000)
1.30%, 11/10/04(d)(e)(g)(k)(n) -- VMIG-1 6,275 6,275,000
- -------------------------------------------------------------------------------------------
Washington (State of) Economic Development
Finance Authority (Seadrunar Recycling LLC
Project); Economic Development VRD Series
2000 E RB (LOC-U.S. Bank N.A.)
1.74%, 08/01/25(b)(c) A-1+ -- 2,735 2,735,000
- -------------------------------------------------------------------------------------------
Washington (State of) Health Care Facilities
Authority
(Empire Health Services); VRD Series 2003
RB
(LOC-U.S. Bank N.A.)
1.65%, 11/01/23(b)(c) A-1+ -- 2,335 2,335,000
- -------------------------------------------------------------------------------------------
</Table>
F-36
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON-(CONTINUED)
Washington (State of) Higher Education
Facilities Authority
(Cornish College Arts Project); VRD Series
2003 A RB
(LOC-Bank of America N.A.)
1.73%, 12/01/33(b)(c) -- VMIG-1 $ 5,000 $ 5,000,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (Nikkei Concerns Project);
Non-Profit Housing VRD Series 1994 RB
(LOC-U.S. Bank N.A.)
1.74%, 10/01/19(b)(c) A-1+ -- 3,755 3,755,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (Tacoma Art Museum Project);
Non-Profit VRD Series 2002 RB
(LOC-Northern Trust Co.)
1.77%, 06/01/32(b)(m) -- VMIG-1 1,225 1,225,000
- -------------------------------------------------------------------------------------------
Washington (State of) Housing Finance
Commission (University Preparatory Academy
Project); Non-Profit VRD Series 2000 RB
(LOC-Bank of America N.A.)
1.75%, 07/01/30(b)(c) -- VMIG-1 1,250 1,250,000
===========================================================================================
157,209,792
===========================================================================================
WEST VIRGINIA-0.35%
Monongalia (County of) Building Community
Hospital (Monongalia General Hospital);
Refunding VRD Series 2002 A RB
(LOC-JPMorgan Chase Bank)
1.72%, 07/01/17(b)(c) A-1 VMIG-1 645 645,000
- -------------------------------------------------------------------------------------------
West Virginia (State of) Hospital Finance
Authority (Cabell Huntington); Refunding
VRD Series 2002 A-1 RB
(LOC-JPMorgan Chase Bank)
1.67%, 06/01/13(b)(c) -- VMIG-1 9,495 9,495,000
===========================================================================================
10,140,000
===========================================================================================
WISCONSIN-3.44%
Kimberly (City of) (Fox Cities YMCA Project);
VRD Series 2002 RB
(LOC-M&I Marshall & Ilsley Bank)
1.75%, 04/01/32(b)(c) -- VMIG-1 2,540 2,540,000
- -------------------------------------------------------------------------------------------
Menomonee Falls (City of); Refunding Sewer
System Series 2004 RB
2.00%, 05/01/05(f) -- Aaa 1,425 1,429,517
- -------------------------------------------------------------------------------------------
Waukesha (County of); Promissory Notes
Unlimited Tax Series 2004 GO
2.00%, 04/01/05 -- Aaa 1,500 1,507,192
- -------------------------------------------------------------------------------------------
Wind Point (City of) (Johnson Foundation
Project);
VRD Series 2000 RB (LOC-Bank of Montreal)
1.80%, 09/01/35(b)(c) A-1+ -- 4,665 4,665,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Beaver Dam Community
Hospitals Inc.); VRD Series 2004 B RB
(LOC-U.S. Bank N.A.)
1.69%, 08/15/34(b)(c) A-1+ -- 3,000 3,000,000
- -------------------------------------------------------------------------------------------
</Table>
F-37
<Table>
<Caption>
RATINGS(A) PAR MARKET
S&P MOODY'S (000) VALUE
- -------------------------------------------------------------------------------------------
WISCONSIN-(CONTINUED)
Wisconsin (State of) Health & Educational
Facilities Authority (Mequon Jewish
Project); VRD Series 2003 RB
(LOC-JPMorgan Chase Bank)
1.73%, 07/01/28(b)(c) -- VMIG-1 $ 2,150 $ 2,150,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(Mercy Health System); (LOC-M&I Marshall &
Ilsley Bank)
Pooled Loan VRD Series 2003 I RB
1.70%, 06/01/23(b)(c) -- VMIG-1 9,570 9,570,000
- -------------------------------------------------------------------------------------------
VRD Series 2003 C RB
1.72%, 08/15/23(b)(c) -- VMIG-1 7,300 7,300,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. John's Home); Pooled Loan VRD Series
2003 J RB
(LOC-M&I Marshall & Ilsley Bank)
1.70%, 07/01/23(b)(c) -- VMIG-1 4,250 4,250,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. Luke's Medical Center); VRD Series
1987 RB
(LOC-KBC Bank N.V.) (Acquired 06/01/04;
Cost $30,000,000)
1.70%, 12/01/17(b)(c)(d) A-1 -- 30,000 30,000,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(St. Mary's School); VRD Series 2004 RB
(LOC-M&I Marshall & Ilsley Bank)
1.72%, 08/01/19(b)(c) A-1 -- 2,695 2,695,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority
(Sinai Samaritan Medical Center Inc.); VRD
Series 1994 A RB
(LOC-M&I Marshall & Ilsley Bank)
1.75%, 09/01/19(b)(c) A-1 -- 5,649 5,649,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) Health & Educational
Facilities Authority (Wheaton Franciscan
Services); VRD Series 2003 B RB
(LOC-U.S. Bank N.A.)
1.69%, 08/15/33(b)(c) A-1+ VMIG-1 8,750 8,750,000
- -------------------------------------------------------------------------------------------
Wisconsin (State of) School Districts Cash
Flow Management Program;
Series 2003 B-1 COP
2.00%, 11/01/04 -- MIG-1 5,565 5,568,956
- -------------------------------------------------------------------------------------------
Series 2004 A-1 COP
3.00%, 09/20/05(o) -- -- 8,000 8,100,676
- -------------------------------------------------------------------------------------------
Wisconsin (State of); Unlimited Tax Series
1995 A GO
6.10%, 05/01/05(g)(l) NRR Aaa 3,000 3,087,881
===========================================================================================
100,263,222
===========================================================================================
Total Municipal Obligations (Cost
$2,926,404,421) 2,926,404,421
===========================================================================================
TOTAL INVESTMENTS-100.40% (Cost
$2,926,404,421)(p) 2,926,404,421
===========================================================================================
OTHER ASSETS LESS LIABILITIES-(0.40%) (11,669,927)
===========================================================================================
NET ASSETS-100.00% $2,914,734,494
___________________________________________________________________________________________
===========================================================================================
</Table>
F-38
Investment Abbreviations:
<Table>
ACES - Automatically Convertible Extendable Security
AMT - Alternative Minimum Tax
BAN - Bond Anticipation Notes
CEP - Credit Enhancement Provider
COP - Certificate of Participation
Ctfs - Certificates
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
Jr. - Junior
LOC - Letter of Credit
MERLOT - Municipal Exempt Receipts Liquidity Optional Tender
NRR - Not Re-Rated
P-Floats - Puttable Floating Option Tax-Exempt Receipts
PCR - Pollution Control Revenue Bonds
PUTTERS - Putable Tax Exempt Receipts
RAN - Revenue Anticipation Notes
RB - Revenue Bonds
RN - Revenue Notes
Sub. - Subordinated
TAN - Tax Anticipation Notes
TRAN - Tax and Revenue Anticipation Notes
VRD - Variable Rate Demand
Wts. - Warrants
</Table>
Notes to Schedule of Investments:
(a) Ratings assigned by Standard & Poor's Corporation ("S&P") and Moody's
Investors Service, Inc. ("Moody's"), except as indicated in note (i) and (o)
below. NRR indicates a security that is not re-rated subsequent to funding
of an escrow fund (consisting of U.S. Treasury obligations held by a bank
custodian); this funding is pursuant to an advance refunding of this
security.
(b) Principal and interest payments are fully enhanced by a letter of credit
from the bank listed or a predecessor bank, branch or subsidiary.
(c) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined weekly. Rate
shown is the rate in effect on September 30, 2004.
(d) Security not registered under the Securities Act of 1933, as amended (e.g.,
the security was purchased in a Rule 144A transaction or a Regulation D
transaction). The security may be resold only pursuant to an exemption from
registration under the 1933 Act, typically to qualified institutional
buyers. The Fund has no rights to demand registration of these securities.
The aggregate market value of these securities at September 30, 2004 was
$691,199,000, which represented 23.71% of the Fund's net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(e) Synthetic municipal instruments; involves the deposit into a trust of one or
more long-term tax-exempt bonds or notes ("Underlying Bonds"), a sale of
certificates evidencing interests in the trust to investors such as the
Fund. The trustee receives the long-term fixed interest payments on the
Underlying Bonds, and pays certificate holders variable rate interest
payments based upon a short-term reset periodically.
(f) Principal and interest payments are secured by bond insurance provided by
one of the following companies: Ambac Assurance Corp., Financial Guaranty
Insurance Co., Financial Security Assurance Inc., or MBIA Insurance Corp.
F-39
(g) Security has an irrevocable call or mandatory put by the issuer. Maturity
date reflects such call or put.
(h) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined
semi-annually. Rate shown is the rate in effect on September 30, 2004.
(i) Security is not rated by S&P or by Moody's; however it is rated by Fitch
IBCA ("Fitch") of F1+.
(j) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined monthly. Rate
shown is the rate in effect on September 30, 2004.
(k) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined at
intermittent intervals. Rate shown is the rate in effect on September 30,
2004.
(l) Advance refunded; secured by an escrow fund of U.S. Treasury obligations.
(m) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined daily. Rate
shown is the rate in effect on September 30, 2004.
(n) Security considered to be illiquid. The aggregate market value of these
securities considered illiquid at September 30, 2004 was $38,920,000, which
represented 1.34% of the Fund's net assets.
(o) Determined by the investment advisor to be of comparable quality to the
rated securities in which the Fund may invest, pursuant to guidelines for
the determination of quality adopted by the Board of Trustees and followed
by the investment advisor.
(p) Also represents cost for federal income tax purposes.
See accompanying notes which are an integral part of the financial statements.
F-40
STATEMENT OF ASSETS & LIABILITIES
September 30, 2004
(Unaudited)
<Table>
ASSETS:
Investments, at market value
(cost $2,926,404,421) $2,926,404,421
- ---------------------------------------------
Cash 697,925
- ---------------------------------------------
Receivables for:
Investments sold 4,895,235
- ---------------------------------------------
Interest 8,879,674
- ---------------------------------------------
Investment for trustee
deferred compensation and
retirement plans 136,908
- ---------------------------------------------
Other assets 190,315
=============================================
Total assets 2,941,204,478
_____________________________________________
=============================================
LIABILITIES:
Payables for:
Investments purchased 23,240,918
- ---------------------------------------------
Dividends 2,730,970
- ---------------------------------------------
Trustee deferred
compensation and
retirement plans 215,380
- ---------------------------------------------
Accrued distribution fees 131,402
- ---------------------------------------------
Accrued transfer agent fees 91,843
- ---------------------------------------------
Accrued trustees fees 1,095
- ---------------------------------------------
Accrued operating expenses 58,376
=============================================
Total liabilities 26,469,984
=============================================
Net assets applicable to
shares outstanding $2,914,734,494
_____________________________________________
=============================================
NET ASSETS CONSIST OF:
Shares of beneficial
interest $2,914,752,505
- ---------------------------------------------
Undistributed net realized
gain (loss) from
investment securities (18,011)
=============================================
$2,914,734,494
_____________________________________________
=============================================
NET ASSETS:
Institutional Class $1,671,593,521
_____________________________________________
=============================================
Private Investment Class $ 190,301,672
_____________________________________________
=============================================
Personal Investment Class $ 9,273,444
_____________________________________________
=============================================
Cash Management Class $ 796,326,655
_____________________________________________
=============================================
Reserve Class $ 11,062,666
_____________________________________________
=============================================
Resource Class $ 236,176,536
_____________________________________________
=============================================
SHARES OUTSTANDING,
$0.001 PAR VALUE PER SHARE,
UNLIMITED NUMBER OF SHARES
AUTHORIZED:
Institutional Class 1,671,550,863
_____________________________________________
=============================================
Private Investment Class 190,288,610
_____________________________________________
=============================================
Personal Investment Class 9,270,510
_____________________________________________
=============================================
Cash Management Class 796,322,561
_____________________________________________
=============================================
Reserve Class 11,060,717
_____________________________________________
=============================================
Resource Class 236,175,751
_____________________________________________
=============================================
Net asset value, offering and
redemption price per share
for each class $ 1.00
_____________________________________________
=============================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-41
STATEMENT OF OPERATIONS
For the six months ended September 30, 2004
(Unaudited)
<Table>
INVESTMENT INCOME:
Interest $17,235,533
=========================================================================
EXPENSES:
Advisory fees 3,131,846
- -------------------------------------------------------------------------
Administrative services fees 295,697
- -------------------------------------------------------------------------
Custodian fees 38,978
- -------------------------------------------------------------------------
Distribution fees:
Private Investment Class 404,301
- -------------------------------------------------------------------------
Personal Investment Class 40,938
- -------------------------------------------------------------------------
Cash Management Class 334,772
- -------------------------------------------------------------------------
Reserve Class 50,510
- -------------------------------------------------------------------------
Resource Class 266,654
- -------------------------------------------------------------------------
Transfer agent fees 231,258
- -------------------------------------------------------------------------
Trustees' fees and retirement benefits 29,952
- -------------------------------------------------------------------------
Other 317,825
=========================================================================
Total expenses 5,142,731
=========================================================================
Less: Fees waived (1,065,457)
=========================================================================
Net expenses 4,077,274
=========================================================================
Net investment income 13,158,259
=========================================================================
Net realized gain (loss) from investment securities (17,079)
=========================================================================
Net increase in net assets resulting from operations $13,141,180
_________________________________________________________________________
=========================================================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-42
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended September 30, 2004 and the year ended March 31, 2004
(Unaudited)
<Table>
<Caption>
SEPTEMBER 30, MARCH 31,
2004 2004
- --------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 13,158,259 $ 22,690,885
- --------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities (17,079) 40,841
============================================================================================
Net increase in net assets resulting from operations 13,141,180 22,731,726
============================================================================================
Distributions to shareholders from net investment income:
Institutional Class (8,710,440) (14,405,472)
- --------------------------------------------------------------------------------------------
Private Investment Class (555,715) (1,230,193)
- --------------------------------------------------------------------------------------------
Personal Investment Class (20,320) (37,490)
- --------------------------------------------------------------------------------------------
Cash Management Class (2,854,661) (5,040,826)
- --------------------------------------------------------------------------------------------
Reserve Class (4,673) (8,425)
- --------------------------------------------------------------------------------------------
Resource Class (1,012,450) (1,968,479)
============================================================================================
Decrease in net assets resulting from distributions (13,158,259) (22,690,885)
============================================================================================
Share transactions-net:
Institutional Class (282,164,384) 632,519,818
- --------------------------------------------------------------------------------------------
Private Investment Class 39,903,203 (77,436,378)
- --------------------------------------------------------------------------------------------
Personal Investment Class (1,120,107) (6,598,054)
- --------------------------------------------------------------------------------------------
Cash Management Class 28,190,366 150,447,508
- --------------------------------------------------------------------------------------------
Reserve Class (2,966,860) 1,376,091
- --------------------------------------------------------------------------------------------
Resource Class (63,027,459) 39,025,099
============================================================================================
Net increase (decrease) in net assets resulting from
share transactions (281,185,241) 739,334,084
============================================================================================
Net increase (decrease) in net assets (281,202,320) 739,374,925
============================================================================================
NET ASSETS:
Beginning of period 3,195,936,814 2,456,561,889
============================================================================================
End of period (including undistributed net investment
income of $0 and $0, respectively) $2,914,734,494 $3,195,936,814
____________________________________________________________________________________________
============================================================================================
</Table>
See accompanying notes which are an integral part of the financial statements.
F-43
NOTES TO FINANCIAL STATEMENTS
September 30, 2004
(Unaudited)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
Tax-Free Investments Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Trust is organized as a Delaware statutory
trust consisting of one portfolio, the Tax-Free Cash Reserve Portfolio (the
"Fund"). The Fund currently offers multiple classes of shares. Matters affecting
each class are voted on exclusively by the shareholders of each class. The
Fund's investment objective is to provide as high a level of tax-exempt income
as is consistent with the preservation of capital and maintenance of liquidity.
On November 4, 2003, the Fund was restructured from a separate series of
Tax-Free Investments Co. to a new series portfolio of the Trust.
Under the Trust's organizational documents, the Fund's officers, trustees,
employees and agents are indemnified against certain liabilities that may arise
out of performance of their duties to the Fund. Additionally, in the normal
course of business, the Fund enters into contracts that contain a variety of
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, the Fund has not had prior claims or losses
pursuant to these contracts.
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 at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATIONS -- The Fund's securities are valued on the basis of
amortized cost which approximates market value as permitted by Rule 2a-7
under the 1940 Act. This method values a security at its cost on the date
of purchase and, thereafter, assumes a constant amortization to maturity of
any premiums or accretion of any discounts.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income, adjusted for amortization of premiums and accretion
of discounts on investments, is recorded on the accrual basis from
settlement date.
Brokerage commissions and mark ups are considered transaction costs and
are recorded as an increase to the cost basis of securities purchased
and/or a reduction of proceeds on a sale of securities.' Such transaction
costs are included in the determination of realized and unrealized gain
(loss) from investment securities reported in the Statement of Operations
and the Statement of Changes in Net Assets and the realized and unrealized
net gains (losses) on securities per share in the Financial Highlights.
Transaction costs are included in the calculation of the Fund's net asset
value and, accordingly, they reduce the Fund's total returns. These
transaction costs are not considered operating expenses and are not
reflected in net investment income reported in the Statement of Operations
and Statement of Changes in Net Assets, or the net investment income per
share and ratios of expenses and net investment income reported in the
Financial Highlights, nor are they limited by any expense limitation
arrangements between the Fund and the advisor.
F-44
The Fund allocates realized and unrealized capital gains and losses to a
class based on the relative net assets of each class. The Fund allocates
income to a class based on the relative value of the settled shares of each
class.
C. DISTRIBUTIONS -- Distributions from income are declared daily and paid
monthly. Distributions from net realized capital gain, if any, are
generally paid annually and recorded on ex-dividend date. The Fund may
elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. FEDERAL INCOME TAXES -- The Fund intends to comply with the requirements of
Subchapter M of the Internal Revenue Code necessary to qualify as a
regulated investment company and, as such, will not be subject to federal
income taxes on otherwise taxable income (including net realized capital
gain) which is distributed to shareholders. Therefore, no provision for
federal income taxes is recorded in the financial statements.
In addition, the Fund intends to invest in securities to allow it to
qualify to pay shareholders "exempt interest dividends", as defined in the
Internal Revenue Code of 1986, as amended.
E. EXPENSES -- Fees provided for under the Rule 12b-1 plan of a particular
class of the Fund and which are directly attributable to that class are
charged to the operations of such class. All other expenses are allocated
among the classes based on relative net assets.
NOTE 2--ADVISORY FEES AND OTHER FEES PAID TO AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.25% of the first
$500 million of the Fund's average daily net assets plus 0.20% of the Fund's
average daily net assets in excess of $500 million. AIM has voluntarily agreed
to waive advisory fees and/or reimburse expenses to the extent necessary to
limit Total Annual Fund Operating Expenses (excluding certain items discussed
below) to 0.22%. In determining the advisor's obligation to waive advisory fees
and/or reimburse expenses, the following expenses are not taken into account,
and could cause the Total Annual Fund Operating Expenses to exceed the cap
stated above: (i) Rule 12b-1 plan fees, if any; (ii) interest; (iii) taxes; (iv)
dividend expense on short sales; (v) extraordinary items (these are expenses
that are not anticipated to arise from the Fund's day-to-day operations), or
items designated as such by the Fund's Board of Trustees; (vi) expenses related
to a merger or reorganization, as approved by the Fund's Board of Trustees;
(vii) expenses that the Fund has incurred but did not actually pay because of an
expense offset arrangement; (viii) trustees' fees; and (ix) federal registration
fees. Currently, the only expense offset arrangements from which the Fund
benefits are in the form of credits that the Fund receives from banks where the
Fund or its transfer agent has deposit accounts in which it holds uninvested
cash. Those credits are used to pay certain expenses incurred by the Fund.
Voluntary fee waivers or reimbursements may be modified or discontinued at any
time upon consultation with the Board of Trustees without further notice to
investors. To the extent that the annualized expense ratio does not exceed the
expense limitation, AIM will retain its ability to be reimbursed for such fee
waivers or reimbursements prior to the end of each fiscal year. For the six
months ended September 30, 2004, AIM waived fees of $723,330.
The Trust, pursuant to a master administrative services agreement with AIM,
has agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended September 30, 2004,
AIM was paid $295,697 for such services.
The Trust, pursuant to a transfer agency and service agreement, has agreed
to pay AIM Investment Services, Inc. ("AISI") a fee for providing transfer
agency and shareholder services to the Fund. During the six months ended
September 30, 2004, AISI retained $225,258 for such services.
Under the terms of a master distribution agreement between Fund Management
Company ("FMC") and the Trust, FMC acts as the exclusive distributor of the
Fund's shares. The Fund has adopted a master distribution
F-45
plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's
Private Investment Class, Personal Investment Class, Cash Management Class,
Reserve Class and Resource Class (the "Plan"). The Plan provides that the
Private Investment Class, the Personal Investment Class, the Cash Management
Class, the Reserve Class and the Resource Class pay up to the maximum annual
rate of 0.50%, 0.75%, 0.10%, 1.00% and 0.20%, respectively, of the average daily
net assets attributable to such class. Of this amount, up to 0.25% of the
average daily net assets of each class may be paid to furnish continuing
personal shareholder services to customers who purchase and own shares of the
such classes. Any amounts not paid as a service fee under such Plan would
constitute an asset-based sales charge. NASD Rules also impose a cap on the
total amount of sales charges, including asset-based sales charges, that may be
paid by any class of shares of the Fund. Currently, FMC has elected to waive a
portion of its compensation payable by the Fund such that compensation paid
pursuant to the Plan with respect to the Private Investment Class, the Personal
Investment Class, the Cash Management Class, the Reserve Class and the Resource
Class equals the maximum annual rate of 0.25%, 0.55%, 0.08%, 0.87% and 0.16%,
respectively, of the average daily net assets attributable to such class.
Further, FMC voluntarily waived additional Rule 12b-1 plan fees for the Reserve
Class during the year in order to increase the yield. Waivers may be modified or
discontinued at any time. Pursuant to the Plan, for the six months ended
September 30, 2004, the Private Investment Class, the Personal Investment Class,
the Cash Management Class, the Reserve Class and the Resource Class paid
$202,150, $30,021, $267,818, $41,736 and $213,323, respectively, after FMC
waived Plan fees of $202,151, $10,917, $66,954, $8,774 and $53,331,
respectively.
Certain officers and trustees of the Trust are officers and directors of
AIM, FMC and/or AISI.
NOTE 3--SECURITY TRANSACTIONS WITH AFFILIATED FUNDS
The Fund is permitted to purchase or sell securities from or to certain other
AIM and INVESCO Funds under specified conditions outlined in procedures adopted
by the Board of Trustees of the Trust. The procedures have been designed to
ensure that any purchase or sale of securities by the Fund from or to another
fund or portfolio that is or could be considered an affiliate by virtue of
having a common investment advisor (or affiliated investment advisors), common
Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act.
Further, as defined under the procedures each transaction is effected at the
current market price. Pursuant to these procedures, during the six months ended
September 30, 2004, the Fund engaged in purchases and sales of securities of $0
and $27,058,780, respectively.
NOTE 4--TRUSTEES' FEES
Trustees' fees represent remuneration paid to each Trustee of the Trust who is
not an "interested person" of AIM. Trustees have the option to defer
compensation payable by the Trust. Those Trustees who defer compensation have
the option to select various AIM Funds and INVESCO Funds in which their deferral
accounts shall be deemed to be invested.
Current Trustees are eligible to participate in a retirement plan that
provides for benefits to be paid upon retirement to Trustees over a period of
time based on the number of years of service. The Fund may have certain former
Trustees that also participate in a retirement plan and receive benefits under
such plan.
Obligations under the deferred compensation and retirement plans represent
unsecured claims against the general assets of the Fund.
During the six months ended September 30, 2004, the Fund paid legal fees of
$5,068 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel
to the Independent Trustees. A member of that firm is a Trustee of the Trust.
F-46
NOTE 5--BORROWINGS
Pursuant to an exemptive order from the SEC, the Fund may participate in an
interfund lending facility that AIM has established for temporary borrowings by
the AIM Funds and the INVESCO Funds. An interfund loan will be made under this
facility only if the loan rate (an average of the rate available on bank loans
and the rate available on investments in overnight repurchase agreements) is
favorable to both the lending fund and the borrowing fund. A loan will be
secured by collateral if the Fund's aggregate borrowings from all sources
exceeds 10% of the Fund's total assets. To the extent that the loan is required
to be secured by collateral, the collateral is marked to market daily to ensure
that the market value is at least 102% of the outstanding principal value of the
loan. The Fund did not borrow or lend under the facility during the six months
ended September 30, 2004.
Additionally, the Fund is permitted to temporarily carry a negative or
overdrawn balance in its account with The Bank of New York, the custodian bank.
To compensate the custodian bank for such overdrafts, the overdrawn Fund may
either (i) leave funds in the account so the custodian can be compensated by
earning the additional interest; or (ii) compensate by paying the custodian
bank. In either case, the custodian bank will be compensated at an amount equal
to the Federal Funds rate plus 100 basis points.
NOTE 6--TAX INFORMATION
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforward) under income tax regulations. The tax character of
distributions paid during the year and the tax components of net assets will be
reported at the Fund's fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date.
Results of transactions and other activity after that date may affect the amount
of capital loss carryforward actually available for the Fund to utilize. The
ability to utilize capital loss carryforward in the future may be limited under
the Internal Revenue Code and related regulations based on the results of future
transactions.
The Fund had a capital loss carryforward as of March 31, 2004 which expires
as follows:
<Table>
<Caption>
CAPITAL LOSS
EXPIRATION CARRYFORWARD*
- -----------------------------------------------------------------------------
March 31, 2011 $933
_____________________________________________________________________________
=============================================================================
</Table>
* Capital loss carryforward as of the date listed above is reduced for
limitations, if any, to the extent required by the Internal Revenue Code.
F-47
NOTE 7--SHARE INFORMATION
The Fund currently offers six different classes of shares: Institutional Class,
Private Investment Class, Personal Investment Class, Cash Management Class,
Reserve Class and Resource Class.
<Table>
<Caption>
CHANGES IN SHARES OUTSTANDING(A)
- ---------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2004 MARCH 31, 2004
--------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
Sold:
Institutional Class 8,676,342,046 $ 8,676,342,046 13,446,683,719 $ 13,446,683,719
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 217,524,346 217,524,346 489,285,624 489,285,624
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class 20,166,779 20,166,779 26,756,133 26,756,133
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 2,908,837,254 2,908,837,254 5,641,820,633 5,641,820,633
- ---------------------------------------------------------------------------------------------------------
Reserve Class 77,269,739 77,269,739 156,764,612 156,764,612
- ---------------------------------------------------------------------------------------------------------
Resource Class 732,494,862 732,494,862 1,508,376,051 1,508,376,051
=========================================================================================================
Issued as reinvestment of
dividends:
Institutional Class 5,177,367 5,177,367 7,301,226 7,301,226
- ---------------------------------------------------------------------------------------------------------
Private Investment Class 318,170 318,170 737,747 737,747
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class 2,442 2,442 4,054 4,054
- ---------------------------------------------------------------------------------------------------------
Cash Management Class 1,846,071 1,846,071 4,115,815 4,115,815
- ---------------------------------------------------------------------------------------------------------
Reserve Class 2,986 2,986 8,921 8,921
- ---------------------------------------------------------------------------------------------------------
Resource Class 936,355 936,355 1,860,224 1,860,224
=========================================================================================================
Reacquired:
Institutional Class (8,963,683,797) (8,963,683,797) (12,821,465,127) (12,821,465,127)
- ---------------------------------------------------------------------------------------------------------
Private Investment Class (177,939,313) (177,939,313) (567,459,749) (567,459,749)
- ---------------------------------------------------------------------------------------------------------
Personal Investment Class (21,289,328) (21,289,328) (33,358,241) (33,358,241)
- ---------------------------------------------------------------------------------------------------------
Cash Management Class (2,882,492,959) (2,882,492,959) (5,495,488,940) (5,495,488,940)
- ---------------------------------------------------------------------------------------------------------
Reserve Class (80,239,585) (80,239,585) (155,397,442) (155,397,442)
- ---------------------------------------------------------------------------------------------------------
Resource Class (796,458,676) (796,458,676) (1,471,211,176) (1,471,211,176)
=========================================================================================================
(281,185,241) $ (281,185,241) 739,334,084 $ 739,334,084
_________________________________________________________________________________________________________
=========================================================================================================
</Table>
(a) There are two entities that are each record owners of more than 5% of the
outstanding shares of the Fund and in the aggregate they own 50% of the
outstanding shares of the Fund. The Fund's principle underwriter may have an
agreement with these entities to sell Fund shares. The Fund, AIM and/or AIM
affiliates may make payments to these entities, which are considered to be
related to the Fund, for providing services to the Fund, AIM and/or AIM
affiliates including but not limited to services such as, securities
brokerage, distribution, third party record keeping and account servicing.
The Trust has no knowledge as to whether all or any portion of the shares
owned of record by these shareholders are also owned beneficially.
F-48
NOTE 8--FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<Table>
<Caption>
RESOURCE CLASS
----------------------------------------------------------------------------
APRIL 6,
1999
SIX MONTHS (DATE SALES
ENDED YEAR ENDED MARCH 31, COMMENCED) TO
SEPTEMBER 30, ---------------------------------------- MARCH 31,
2004 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.004 0.01 0.01 0.02 0.04 0.03
======================================================================================================
Less distributions from
net investment income (0.004) (0.01) (0.01) (0.02) (0.04) (0.03)
======================================================================================================
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______________________________________________________________________________________________________
======================================================================================================
Total return(a) 0.38% 0.68% 1.06% 2.00% 3.78% 3.15%
______________________________________________________________________________________________________
======================================================================================================
Ratios/supplemental
data:
Net assets, end of
period
(000s omitted) $236,177 $299,205 $260,178 $137,307 $15,464 $3,597
______________________________________________________________________________________________________
======================================================================================================
Ratio of expenses to
average net assets:
With fee waivers 0.38%(b) 0.38% 0.38% 0.38% 0.36% 0.36%(c)
- ------------------------------------------------------------------------------------------------------
Without fee waivers 0.47%(b) 0.47% 0.47% 0.48% 0.49% 0.49%(c)
______________________________________________________________________________________________________
======================================================================================================
Ratio of net investment
income to average net
assets 0.77%(b) 0.67% 1.04% 1.84% 3.68% 3.09%(c)
____________________________________________________________________________________________________ )
======================================================================================================
</Table>
(a) Includes adjustments in accordance with accounting principles generally
accepted in the United States of America and is not annualized for periods
less than one year.
(b) Ratios are annualized and based on average daily net assets of
$265,923,048.
(c) Annualized.
F-49
NOTE 9--LEGAL PROCEEDINGS
Terms used in this Legal Proceedings Note are defined terms solely for the
purpose of this note.
The mutual fund industry as a whole is currently subject to regulatory
inquiries and litigation related to a wide range of issues. These issues
include, among others, market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders.
As described more fully below, INVESCO Funds Group, Inc. ("IFG"), the former
investment advisor to certain AIM Funds, A I M Advisors, Inc. ("AIM"), the
Fund's investment advisor, and A I M Distributors, Inc. ("ADI"), the distributor
of the retail AIM Funds and a wholly owned subsidiary of AIM, reached final
settlements with the Securities and Exchange Commission ("SEC"), the New York
Attorney General ("NYAG"), the Colorado Attorney General ("COAG"), the Colorado
Division of Securities ("CODS") and the Secretary of State of the State of
Georgia to resolve civil enforcement actions and investigations related to
market timing activity and related issues in the AIM Funds, including those
formerly advised by IFG.
In addition, as described more fully below, IFG and AIM are the subject of a
number of ongoing regulatory inquiries and civil lawsuits related to one or more
of the issues currently being scrutinized by various Federal and state
regulators, including but not limited to those issues described above.
Additional regulatory actions and/or civil lawsuits related to the above or
other issues may be filed against the AIM Funds, IFG, AIM and/or related
entities and individuals in the future. Additional regulatory inquiries related
to the above or other issues also may be received by the AIM Funds, IFG, AIM
and/or related entities and individuals in the future.
As a result of the matters discussed below, investors in the AIM Funds might
react by redeeming their investments. This might require the Funds to sell
investments to provide for sufficient liquidity and could also have an adverse
effect on the investment performance of the Funds.
Settled Enforcement Actions and Investigations Related to Market Timing
On October 8, 2004, AMVESCAP PLC ("AMVESCAP"), the parent company of IFG and
AIM, announced that final settlements had been reached with the SEC, the NYAG,
the COAG and the Secretary of State of Georgia to resolve civil enforcement
actions and investigations related to market timing activity and related issues
in the AIM Funds, including those formerly advised by IFG. A final settlement
also has been reached with the Colorado Division of Securities ("CODS") with
respect to this matter. In their enforcement actions and investigations, these
regulators alleged, in substance, that IFG and AIM failed to disclose in the
prospectuses for the AIM Funds that they advised and to the independent
directors/trustees of such Funds that IFG and AIM had entered into certain
arrangements permitting market timing of such Funds, thereby breaching their
fiduciary duties to such Funds. As a result of the foregoing, the regulators
alleged that IFG, AIM and ADI breached various Federal and state securities,
business and consumer protection laws. Under the terms of the settlements, IFG,
AIM and ADI consent to the entry of settlement orders or assurances of
discontinuance, as applicable, by the regulators containing certain terms, some
of which are described below, without admitting or denying any wrongdoing.
Under the terms of the settlements, IFG agreed to pay a total of $325 million,
of which $110 million is civil penalties. Of the $325 million total payment,
half will be paid on or before December 31, 2004 and the remaining half will be
paid on or before December 31, 2005. AIM and ADI agreed to pay a total of $50
million, of which $30 million is civil penalties. The entire $50 million payment
by AIM and ADI will be paid by November 7, 2004.
The entire $325 million IFG settlement payment will be available for
distribution to the shareholders of those AIM Funds that IFG formerly advised
that were harmed by market timing activity, and the entire $50 million
F-50
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
settlement payment by AIM and ADI will be available for distribution to the
shareholders of those AIM Funds advised by AIM that were harmed by market timing
activity, all as to be determined by an independent distribution consultant to
be appointed under the settlements. The settlement payments will be distributed
in accordance with a methodology to be determined by the independent
distribution consultant, in consultation with AIM and the independent trustees
of the AIM Funds and acceptable to the staff of the SEC.
Under the settlements with the NYAG and COAG, AIM has agreed to reduce
management fees on the AIM Funds by $15 million per year for the next five
years, based upon effective fee rates and assets under management as of July 1,
2004, and not to increase certain management fees. IFG will also pay $1.5
million to the COAG to be used for investor education purposes and to reimburse
the COAG for actual costs. Finally, IFG and AIM will pay $175,000 to the
Secretary of State of Georgia to be used for investor education purposes and to
reimburse the Secretary of State for actual costs.
None of the costs of the settlements will be borne by the AIM Funds or by Fund
shareholders.
Under the terms of the settlements, AIM will make certain governance reforms,
including maintaining an internal controls committee and retaining an
independent compliance consultant, a corporate ombudsman and, as stated above,
an independent distribution consultant. Also, commencing in 2007 and at least
once every other year thereafter, AIM will undergo a compliance review by an
independent third party.
In addition, under the terms of the settlements, AIM has undertaken to cause
the AIM Funds to operate in accordance with certain governance policies and
practices, including retaining a full-time independent senior officer whose
duties will include monitoring compliance and managing the process by which
proposed management fees to be charged the AIM Funds are negotiated. Also,
commencing in 2008 and not less than every fifth calendar year thereafter, the
AIM Funds will hold shareholder meetings at which their Boards of Trustees will
be elected.
On October 8, 2004, the SEC announced that it had settled a market timing
enforcement action against Raymond R. Cunningham, the former president and chief
executive officer of IFG and a former member of the board of directors of the
AIM Funds formerly advised by IFG. As part of the settlement, the SEC ordered
Mr. Cunningham to pay $1 in restitution and civil penalties in the amount of
$500,000. In addition, the SEC prohibited Mr. Cunningham from associating with
an investment advisor, broker, dealer or investment company for a period of two
years and further prohibited him from serving as an officer or director of an
investment advisor, broker, dealer or investment company for a period of five
years.
On August 31, 2004, the SEC announced that it had settled market timing
enforcement actions against Timothy J. Miller, the former chief investment
officer and a former portfolio manager for IFG, Thomas A. Kolbe, the former
national sales manager of IFG, and Michael D. Legoski, a former assistant vice
president in IFG's sales department. As part of the settlements, the SEC ordered
Messrs. Miller, Kolbe and Legoski to pay $1 in restitution each and civil
penalties in the amounts of $150,000, $150,000 and $40,000, respectively. In
addition, the SEC prohibited each of them from associating with an investment
advisor or investment company for a period of one year, prohibited Messrs.
Miller and Kolbe from serving as an officer or director of an investment advisor
or investment company for three years and two years, respectively, and
prohibited Mr. Legoski from associating with a broker or dealer for a period of
one year.
As referenced by the SEC in the SEC's settlement order, one former officer of
ADI and one current officer of AIM (who has taken a voluntary leave of absence)
have received regulatory inquiries in the form of subpoenas or other oral or
written requests for information and/or documents related to market timing
activity in the AIM Funds.
At the direction of the trustees of the AIM Funds, AMVESCAP has agreed to pay
all of the expenses incurred by such Funds related to the market timing
investigations, including expenses incurred in connection with the
F-51
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
regulatory complaints against IFG alleging market timing and the market timing
investigations with respect to IFG and AIM.
The payments made in connection with the above-referenced settlements by IFG,
AIM and ADI will total approximately $375 million (not including AIM's agreement
to reduce management fees on the AIM Funds by $15 million per year for the next
five years, based upon effective fee rates and assets under management as of
July 1, 2004). The manner in which the settlement payments will be distributed
is unknown at the present time and will be determined by an independent
distribution consultant to be appointed under the settlements. Therefore,
management of AIM and the Fund are unable at the present time to estimate the
impact, if any, that the distribution of the settlement amounts may have on the
Fund or whether such distribution will have an impact on the Fund's financial
statements in the future.
At the present time, management of AIM and the Fund are unable to estimate the
impact, if any, that the outcome of the ongoing matters described below may have
on AIM, ADI or the Fund.
Ongoing Regulatory Inquiries Concerning IFG and AIM
IFG, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds formerly advised by IFG have received regulatory
inquiries in the form of subpoenas or other oral or written requests for
information and/or documents related to one or more of the following issues,
some of which concern one or more such Funds: market timing activity, late
trading, fair value pricing, excessive or improper advisory and/or distribution
fees, mutual fund sales practices, including revenue sharing and
directed-brokerage arrangements, and investments in securities of other
registered investment companies. These regulators include the SEC, the NASD,
Inc. ("NASD"), the Florida Department of Financial Services, the Attorney
General of the State of West Virginia, the West Virginia Securities Commission
and the Bureau of Securities of the State of New Jersey. IFG and certain of
these other parties also have received more limited inquiries from the United
States Department of Labor ("DOL") and the United States Attorney's Office for
the Southern District of New York, some of which concern one or more of the AIM
Funds formerly advised by IFG. IFG is providing full cooperation with respect to
these inquiries.
AIM, certain related entities, certain of their current and former officers
and/or certain of the AIM Funds have received regulatory inquiries in the form
of subpoenas or other oral or written requests for information and/or documents
related to one or more of the following issues, some of which concern one or
more AIM Funds: market timing activity, late trading, fair value pricing,
excessive or improper advisory and/or distribution fees, mutual fund sales
practices, including revenue sharing and directed-brokerage arrangements,
investments in securities of other registered investment companies, contractual
plans, issues related to Section 529 college savings plans and procedures for
locating lost securityholders. These regulators include the SEC, the NASD, the
Department of Banking for the State of Connecticut, the Attorney General of the
State of West Virginia, the West Virginia Securities Commission and the Bureau
of Securities of the State of New Jersey. AIM and certain of these other parties
also have received more limited inquiries from the SEC, the NASD, the DOL, the
Internal Revenue Service, the New York Stock Exchange, the United States
Attorney's Office for the Southern District of New York, the United States
Attorney's Office for the Central District of California, the United States
Attorney's Office for the District of Massachusetts, the Massachusetts
Securities Division and the U.S. Postal Inspection Service, some of which
concern one or more AIM Funds. AIM is providing full cooperation with respect to
these inquiries.
Private Civil Actions Alleging Market Timing
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, certain AIM Funds, IFG, AIM, A I M Management Group Inc. ("AIM
Management"), AMVESCAP, certain related entities, certain of their current and
former officers
F-52
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
and/or certain unrelated third parties) making allegations that are similar in
many respects to those in the settled regulatory actions brought by the SEC, the
NYAG and the COAG concerning market timing activity in the AIM Funds. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violation of various provisions of the Federal and state securities laws;
(ii) violation of various provisions of ERISA; (iii) breach of fiduciary duty;
and/or (iv) breach of contract. These lawsuits were initiated in both Federal
and state courts and seek such remedies as compensatory damages; restitution;
injunctive relief; disgorgement of management fees; imposition of a constructive
trust; removal of certain directors and/or employees; various corrective
measures under ERISA; rescission of certain Funds' advisory agreements;
interest; and attorneys' and experts' fees.
All lawsuits based on allegations of market timing, late trading, and related
issues have been transferred to the United States District Court for the
District of Maryland (the "MDL Court") for consolidated or coordinated pre-trial
proceedings. Pursuant to an Order of the MDL Court, plaintiffs consolidated
their claims for pre-trial purposes into three amended complaints against
various AIM- and IFG-related parties: (i) a Consolidated Amended Class Action
Complaint purportedly brought on behalf of shareholders of the AIM Funds; (ii) a
Consolidated Amended Fund Derivative Complaint purportedly brought on behalf of
the AIM Funds and fund registrants; and (iii) an Amended Class Action Complaint
for Violations of the Employee Retirement Income Securities Act purportedly
brought on behalf of participants in AMVESCAP's 401(k) plan. Plaintiffs in one
of the underlying lawsuits transferred to the MDL Court continue to seek remand
of their action to state court.
Private Civil Actions Alleging Improper Use of Fair Value Pricing
Multiple civil class action lawsuits have been filed against various parties
(including, depending on the lawsuit, certain AIM Funds, IFG and/or AIM)
alleging that certain AIM Funds inadequately employed fair value pricing. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violations of various provisions of the Federal securities laws; (ii) common
law breach of duty; and (iii) common law negligence and gross negligence. These
lawsuits have been filed in both Federal and state courts and seek such remedies
as compensatory and punitive damages; interest; and attorneys' fees and costs.
Private Civil Actions Alleging Excessive Advisory and/or Distribution Fees
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, INVESCO Institutional (N.A.), Inc., ADI and/or INVESCO
Distributors, Inc.) alleging that the defendants charged excessive advisory
and/or distribution fees and failed to pass on to shareholders the perceived
savings generated by economies of scale. Certain of these lawsuits also allege
that the defendants adopted unlawful distribution plans. These lawsuits allege a
variety of theories of recovery, including but not limited to: (i) violation of
various provisions of the Federal securities laws; (ii) breach of fiduciary
duty; and/or (iii) breach of contract. These lawsuits have been filed in Federal
courts and seek such remedies as damages; injunctive relief; rescission of
certain Funds' advisory agreements and distribution plans; interest; prospective
relief in the form of reduced fees; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Charging of Distribution Fees on Closed
Funds or Share Classes
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, IFG, AIM, ADI and/or certain of the trustees of the AIM Funds)
alleging that the defendants breached their fiduciary duties by charging
distribution fees while funds and/or specific share classes were closed
generally to new investors and/or while other share classes of the same fund
were not charged the same distribution fees. These lawsuits allege a variety of
theories of recovery, including but not limited to: (i) violation of various
provisions of the Federal securities laws; and (ii) breach of
F-53
NOTE 9--LEGAL PROCEEDINGS (CONTINUED)
fiduciary duty. These lawsuits have been filed in Federal courts and seek such
remedies as damages; injunctive relief; and attorneys' and experts' fees.
Private Civil Actions Alleging Improper Mutual Fund Sales Practices and
Directed-Brokerage Arrangements
Multiple civil lawsuits, including purported class action and shareholder
derivative suits, have been filed against various parties (including, depending
on the lawsuit, AIM Management, IFG, AIM, AIM Investment Services, Inc. and/or
certain of the trustees of the AIM Funds) alleging that the defendants
improperly used the assets of the AIM Funds to pay brokers to aggressively
promote the sale of the AIM Funds over other mutual funds and that the
defendants concealed such payments from investors by disguising them as
brokerage commissions. These lawsuits allege a variety of theories of recovery,
including but not limited to: (i) violation of various provisions of the Federal
securities laws; (ii) breach of fiduciary duty; and (iii) aiding and abetting a
breach of fiduciary duty. These lawsuits have been filed in Federal courts and
seek such remedies as compensatory and punitive damages; rescission of certain
Funds' advisory agreements and distribution plans and recovery of all fees paid;
an accounting of all fund-related fees, commissions and soft dollar payments;
restitution of all unlawfully or discriminatorily obtained fees and charges; and
attorneys' and experts' fees.
F-54
ITEM 2. CODE OF ETHICS.
There were no amendments to the Code of Ethics (the "Code")
that applies to the Registrant's Principal Executive Officer
("PEO") and Principal Financial Officer ("PFO") during the
period covered by the report. The Registrant did not grant
any waivers, including implicit waivers, from any provisions
of the Code to the PEO or PFO during the period covered by
this report.
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. SCHEDULE OF INVESTMENTS.
Investments in securities of unaffiliated issuers is included
as part of the reports to stockholders filed under Item 1 of
this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which
shareholders may recommend nominees to the Registrant's Board
of Trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a) As of September 21, 2004, an evaluation was performed under
the supervision and with the participation of the officers of
the Registrant, including the Principal Executive Officer
("PEO") and Principal Financial Officer ("PFO"), to assess the
effectiveness of the Registrant's disclosure controls and
procedures, as that term is defined in Rule 30a-3(c) under the
Investment Company Act of 1940 (the "Act"), as amended. Based
on that evaluation, the Registrant's officers, including the
PEO and PFO, concluded that, as of September 21, 2004, the
Registrant's disclosure controls and procedures were
reasonably designed to ensure: (1) that information required
to be disclosed by the Registrant on Form N-CSR is recorded,
processed, summarized and reported within the time periods
specified by the rules and forms of the Securities and
Exchange Commission; and (2) that material information
relating to the Registrant is made known to the PEO and PFO as
appropriate to allow timely decisions regarding required
disclosure.
(b) There have been no changes in the Registrant's internal
control over financial reporting (as defined in Rule 30a-3(d)
under the Act) that occurred during the Registrant's last
fiscal half-year (the Registrant's second fiscal half-year
in the case of an annual report) that have materially
affected, or are reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
However, on September 20, 2004, the Registrant appointed
Chief Compliance Officer ("Registrant CCO") who reports to the
Registrant's Board of Trustees. The Registrant CCO also serves
as Chief Compliance Officer of A I M Advisors, Inc. ("AIM"),
the investment advisor for the series portfolios of the
Registrant. The Registrant CCO is a member of the Disclosure
Controls Committee ("DCC") for the Registrant, which reports
to the Registrant's Principal Executive Officer ("PEO") and
Principal Financial Officer ("PFO"). The DCC is made up of
employees of AIM some of whom are officers of the Registrant.
Among other things, the DCC assists the PEO and PFO in their
responsibilities related to internal control over financial
reporting. The addition of the Registrant CCO is expected to
enhance the Registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
12(a) (1) Not applicable.
12(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.
12(a) (3) Not applicable.
12(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.
Registrant: Tax-Free Investments Trust
By: /s/ ROBERT H. GRAHAM
---------------------------
Robert H. Graham
Principal Executive Officer
Date: December 2, 2004
Pursuant to the requirements of the Securities and 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/ ROBERT H. GRAHAM
---------------------------
Robert H. Graham
Principal Executive Officer
Date: December 2, 2004
By: /s/ SIDNEY M. DILGREN
---------------------------
Sidney M. Dilgren
Principal Financial Officer
Date: December 2, 2004
EXHIBIT INDEX
<Table>
12(a) (1) Not applicable.
12(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.
12(a) (3) Not applicable.
12(b) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2(b) under the
Investment Company Act of 1940.
</Table>