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 811-4096
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MFS MUNICIPAL SERIES TRUST
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(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
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(Address of principal executive offices) (Zip code)
James R. Bordewick, Jr.
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
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(Name and address of agents for service)
Registrant's telephone number, including area code: (617) 954-5000
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Date of fiscal year end: March 31, 2004
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Date of reporting period: March 31, 2004
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ITEM 1. REPORTS TO STOCKHOLDERS.
MFS(R) Mutual Funds
ANNUAL REPORT 3/31/04
MFS(R) MUNICIPAL
INCOME FUND
A path for pursuing opportunity
[graphic omitted]
[logo] M F S(R)
INVESTMENT MANAGEMENT
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MFS(R) PRIVACY POLICY: A COMMITMENT TO YOU
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Privacy is a concern for every investor today. At MFS Investment Management(R)
and the MFS funds, we take this concern very seriously. We want you to
understand our policies about every MFS investment product and service that we
offer and how we protect the nonpublic personal information of investors who
have a direct relationship with us and our wholly owned subsidiaries.
Throughout our business relationship, you provide us with personal information;
we maintain information and records about you, your investments, and the
services you use. Examples of the nonpublic personal information we maintain
include
o data from investment applications and other forms
o share balances and transactional history with us, our affiliates, or others
o facts from a consumer reporting agency
We do not disclose any nonpublic personal information about our customers or
former customers to anyone except as permitted by law. We may share information
with companies or financial institutions that perform marketing services on our
behalf or to other financial institutions with which we have joint marketing
arrangements.
Access to your nonpublic personal information is limited to appropriate
personnel who provide products, services, or information to you. We maintain
physical, electronic, and procedural safeguards that comply with applicable
federal regulations.
If you have any questions about MFS' privacy policy, please call 1-800-225-2606
any business day between 8 a.m. and 8 p.m. Eastern time.
Note: If you own MFS products or receive MFS services in the name of a third
party such as a bank or broker-dealer, their privacy policy may apply to you
instead of ours.
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NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
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MFS(R) MUNICIPAL INCOME FUND
The fund seeks as high a level of current income exempt from federal income
tax as is consistent with prudent investing, while seeking protection of
shareholders' capital.
TABLE OF CONTENTS
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MFS PRIVACY POLICY
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LETTER FROM THE CEO 1
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MFS ORIGINAL RESEARCH(R) 5
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MANAGEMENT REVIEW 6
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PERFORMANCE SUMMARY 10
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PORTFOLIO OF INVESTMENTS 13
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FINANCIAL STATEMENTS 32
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NOTES TO FINANCIAL STATEMENTS 39
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INDEPENDENT AUDITORS' REPORT 51
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TRUSTEES AND OFFICERS 52
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MONEY MANAGEMENT FOR ALL TYPES OF INVESTORS 56
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FEDERAL TAX INFORMATION 57
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CONTACT INFORMATION 58
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ASSET ALLOCATION 59
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LETTER FROM THE CEO
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Dear Shareholders,
[Photo of Robert J. Manning]
Our firm was built on the strength of MFS Original Research(R), our in-depth
analysis of every security we consider for our portfolios. We've been honing
this process since 1932, when we created one of the mutual fund industry's
first research departments. And we continue to fine-tune this process so that
we can provide strong and consistent long-term investment performance to help
you achieve your financial goals.
While we have achieved strong investment performance in many of our
portfolios, our goal is to achieve the same strong results across all asset
classes. To ensure that our portfolio teams are doing the best possible job
for our firm's clients and shareholders, I am focusing the vast majority of my
time on the three key elements that I believe truly differentiate MFS from its
competitors: people, process, and culture.
PEOPLE
Our people have always been our most valuable resource. Our philosophy is to
deliver consistent, repeatable investment results by hiring the most talented
investors in our industry. We recruit from the nation's top business schools
and hire experienced analysts, both domestically and around the globe.
Our analysts are the engine that powers our entire investment team because
their recommendations have a direct impact on the investment performance of our
portfolios. To demonstrate our ongoing commitment in this area, we increased
the number of equity analysts at MFS from less than 40 at the end of 2000 to
over 50 in April 2004. During that same period, we doubled the average
investment experience of our new domestic equity analysts, from 2.6 years to
5.3 years, by recruiting more seasoned analysts to the firm. Moreover, our
international network of investment personnel now spans key regions of the
world with offices in London, Mexico City, Singapore, and Tokyo, as well as
Boston.
One of the major advantages that MFS has over many of its competitors is that
the position of research analyst is a long-term career for many members of our
team, not simply a steppingstone toward becoming a portfolio manager. We have
worked to elevate the stature of the analyst position to be on par with that of
a portfolio manager. In fact, an exceptional research analyst has the
opportunity to earn more at MFS than some portfolio managers.
At the same time, we look within the firm to promote talented analysts who
choose a path toward becoming a portfolio manager. We rarely hire portfolio
managers from our competitors because we believe the best investors are those
steeped in the MFS process and culture. In the past few months, we have
identified four senior research analysts who will assume roles on the
management teams of several of our larger portfolios. MFS is fortunate to have
a deep bench of talented investment personnel, and we welcome the opportunity
to put their skills to work for our clients.
PROCESS
MFS was built on the strength of its bottom-up approach to researching
securities. We have enhanced the mentoring process for our research analysts by
calling on several of our most seasoned portfolio managers to supplement the
work of Director of Global Equity Research David A. Antonelli. These portfolio
managers will be taking a special interest in developing the careers of our
research analysts and strengthening our investment process. Kenneth J. Enright
of our value equity group will work with a team of domestic analysts; David E.
Sette-Ducati of our small- and mid-cap equity team will work with analysts
concentrating on small- and mid-cap companies; and Barnaby Wiener of our
international equity team in London heads the European equity research team.
We have combined the bottom-up approach of our research process with a top-down
approach to risk controls on portfolio composition. We have a very strong
quantitative team under the leadership of industry veteran Deborah H. Miller,
who represents the equity management department on the Management Committee of
the firm. Quantitative analysis helps us generate investment ideas and, more
importantly, assess the appropriate level of risk for each portfolio. The risk
assessment is designed to assure that each portfolio operates within its
investment objectives.
Additionally, we have increased the peripheral vision of our investment
personnel across asset classes through the collaboration of our Equity, Fixed
Income, Quantitative Analysis, and Risk Management teams. We recently codified
this key aspect of our culture by forming an Investment Management Committee,
composed of key members of these teams. This Committee will work to ensure that
all teams are sharing information, actively debating investment ideas, and
creating a unified investment team.
CULTURE
Teamwork is at the heart of our ability to deliver consistent and competitive
investment performance over time. At MFS, each member of our team is involved
in our success; we have no superstars. The collaborative nature of our process
works to assure a consistent investment approach across all of our products and
provides a high level of continuity in portfolio management because our
investment performance never depends on the contributions of just a single
individual. Our culture is based on an environment of teamwork that allows our
investment personnel to be successful. In turn, we demand superior investment
results from every member of our team.
We have created a meritocracy at our firm based on investment results. We hold
all of our portfolio managers accountable for the performance of their
portfolios and their contributions to the team. We also track the equity and
fixed-income ratings of our analysts so we can evaluate them based on the
performance of their recommendations. We align bonus compensation to investment
performance by weighting rewards to those who have created the greatest
long-term benefit for our shareholders and who contribute most successfully to
the Original Research(SM) process.
The strength of our culture has resulted in a tremendous amount of stability,
both in terms of people and assets under management. Although we have dismissed
members of our team whose performance did not meet MFS' high standards, only
one member of our investment team has voluntarily left the firm over the past
six months, based on a decision to retire from the industry. Similarly, our
firm's assets under management have remained remarkably steady. We began the
year with $140 billion in assets and ended the first quarter with $142 billion
in assets. We are very proud to have experienced growth during this period
despite the difficult regulatory environment and the relatively flat
performance of the stock market.
In short, we can help you achieve your financial goals by hiring talented
people, following a disciplined process, and maintaining our firm's unique
culture. The recent enhancements described in this letter reflect the
collaborative spirit and the depth of resources in our investment teams.
As always, we appreciate your confidence in MFS and welcome any questions or
comments you may have.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer
MFS Investment Management(R)
April 19, 2004
Note to Shareholders: On February 6, 2004, Jeffrey L. Shames retired as
Chairman of MFS. Robert Pozen was named as non-executive Chairman. Also,
on February 6, 2004, Robert J. Manning was appointed Chief Executive Officer,
President, and Chief Investment Officer.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
The opinions expressed in this letter are those of MFS, and no forecasts can
be guaranteed.
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MFS ORIGINAL RESEARCH(R)
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THE MFS(R) DIFFERENCE
For 80 years MFS has been offering investors clear paths to pursuing specific
investment objectives. Today, millions of individuals and thousands of
institutions all over the world look to MFS to manage their assets with
insight and care.
Our success, we believe, has to do with the fact that we see investors as
people with plans, not just dollars to invest.
When you invest with MFS, you invest with a company dedicated to helping you
realize your long-term financial goals.
INVESTORS CHOOSE MFS FOR OUR
o global asset management expertise across all asset classes
o time-tested money management process for pursuing consistent results
o full spectrum of investment products backed by MFS Original Research(R)
o resources and services that match real-life needs
TURNING INFORMATION INTO OPPORTUNITY
Sound investments begin with sound information. MFS has been doing its own
research and analyzing findings in-house for decades. The process we use to
uncover opportunity is called MFS Original Research(R).
MFS ORIGINAL RESEARCH INVOLVES:
o meeting with the management of 3,000 companies each year to assess their
business plans and the managers' ability to execute those plans
o making onsite visits to more than 2,000 companies annually to gain first-hand
knowledge of their operations and products
o analyzing financial statements and balance sheets
o talking extensively with companies' customers and competitors
o developing our own proprietary estimates of companies' earnings
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MANAGEMENT REVIEW
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MARKET ENVIRONMENT
For the one year period ended March 31, 2004, long-term U.S. Treasury bond
yields were virtually unchanged. High-grade municipal bond yields declined
slightly, allowing municipal bonds in general to modestly outperform
Treasuries. Those facts, however, belie the tremendous volatility in the bond
market over the same 12 month period.
In early 2003 and into the first half of the period, we saw a confluence of
factors that were positive for bond prices. Geopolitical uncertainty, the
hangover from corporate scandals in 2002, and a weak U.S. economy were among
the factors that prompted a "flight to quality" by many investors and pushed
interest rates down to four-decade lows by June of 2003.
In late June, however, the bond market reversed direction as fixed-income
investors became concerned that the economic recovery was accelerating faster
than expected. Although stocks had been rising since late March, the catalyst
for the bond market appeared to be the Federal Reserve Board's decision on
June 25, 2003 to lower rates by one-quarter percent rather than one-half
percent as many investors had expected. From that date through early
September, bond prices sold off as rates rose sharply.
In the second half of the period, however, bond prices revived as several
factors combined to drive rates down again. Economic reports indicated that
inflation was well contained while job growth remained weak. Although most
other measures indicated the U.S. economy was improving, we believe investors
were concerned that consumer spending might falter because laid-off workers
were not finding new jobs. Statistics indicated that a significant portion of
U.S. production capacity remained idle. The Fed appeared to sum up the
situation in its statements that interest rates could remain low for the
foreseeable future. By period-end, interest rates for 10- and 30-year
Treasuries were within just four basis points of where they had started the
period. (A basis point is 0.01% of interest.)
Municipal bonds generally followed the path of Treasury bonds over the period,
but with somewhat smaller swings in yield. However, long-term municipal bonds
ended the period yielding about 20 basis points (a basis point is 0.01% of
interest) less than they had at the start of the period. Long-term municipal
bonds in general saw some price appreciation over the period and outperformed
long-term Treasuries. (The principal value and interest on U.S. Treasury
securities, however, are guaranteed by the U.S. government if held
to maturity.)
We believe the outperformance of municipals was caused by two main factors.
First, municipal bonds appreciated from historically low valuations, relative
to Treasuries, to more normal valuations. This was in part the result of a
growing national debt that put downward pressure on long-term Treasury prices.
Second, we believe a decrease in the supply of new municipal issues late in
the period put upward pressure on municipal prices.
PORTFOLIO CONCENTRATION AS OF 3/31/04
QUALITY RATINGS
"AAA" 43.8%
"AA" 8.5%
"A" 12.7%
"BBB" 17.2%
"BB" 3.3%
"B" 0.9%
"CCC" 0.1%
Not rated 13.5%
The portfolio is actively managed, and current holdings may be different.
PERFORMANCE RELATIVE TO THE FUND'S BENCHMARK
For the 12-month period ended March 31, 2004, the fund outperformed its
benchmark, the Lehman Brothers Municipal Bond Index (the Lehman Index). That
outperformance resulted from a combination of several factors: credit quality,
yield curve positioning, and sector and security selection.
In the area of credit quality, performance benefited from the fund's relative
overweighting in high-yield bonds during a period in which high yield
outperformed. The fund had a larger position in "BBB"-rated debt than the
Lehman Index. In addition, the fund had significant holdings in below-
investment-grade debt (bonds rated lower than "BBB"), whereas the index does
not contain bonds rated below "BBB".
Positioning on the yield curve also helped relative performance. Compared with
the Lehman Index, the fund was more heavily weighted in bonds on the long end
of the yield curve - bonds with 10 to 30 years remaining to maturity. That
overweighting helped during the period because long-term municipal rates came
down more than short-term rates, so longer-term bonds experienced more price
appreciation.
Sector and security selection helped results during a period when investors,
in our view, sought out riskier, lower-rated bonds as they became more
confident in the U.S. economic recovery. Our overweighting in health care
bonds, for example, helped performance as that sector outperformed during the
period. One area of opportunity has been debt issued by rural hospitals that
have limited competition and a dominant market share. An overweighting in
industrial-backed debt also aided performance. That sector recovered over the
period from corporate scandals that we believe made investors wary of the
sector in 2002 and early 2003.
The fund's exposure to the housing sector also helped relative outperformance.
As mortgage rates fell for much of the period, the risk of prepayment - from
homeowners refinancing their mortgages at lower rates - caused the housing
sector as a whole to underperform the broad market. However, our allocation to
the sector was largely in PAC ("planned amortization class") issues that were
protected from prepayments, and our preference for PAC issues helped us
perform well in the sector.
However, duration - a measure of our holdings' sensitivity to interest rate
changes - detracted modestly from the fund's relative performance. Coming into
the period, we had believed that interest rates, which were then at near-four-
decade lows, were poised to rise modestly over the period. Consequently, we had
positioned the fund with a slightly lower sensitivity to rising or falling
rates - a shorter average duration - than our benchmark. While Treasury rates
were virtually stable over the period, municipal rates fell, and our relatively
shorter duration proved somewhat negative for performance.
Respectfully,
/s/ Michael L. Dawson /s/ Geoffrey L. Schechter
Michael L. Dawson Geoffrey L. Schechter
Portfolio Manager Portfolio Manager
The views expressed in this report are those of the portfolio managers only
through the end of the period of the report as stated on the cover and do not
necessarily reflect the views of MFS or any other person in the MFS
organization. These views are subject to change at any time based on market and
other conditions, and MFS disclaims any responsibility to update such views.
These views may not be relied upon as investment advice or an indication of
trading intent on behalf of any MFS Fund. References to specific securities are
not recommendations of such securities, and may not be representative of any
MFS Fund's current or future investments.
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Visit mfs.com for our latest economic and investment outlook.
o Under Updates & Announcements, click Week in Review for a summary of recent
investment-related news.
o From Week in Review, link to MFS Global Perspective for our current view of
the world.
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PERFORMANCE SUMMARY THROUGH 3/31/04
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The following information illustrates the historical performance of the fund's
original share class in comparison to its benchmark. Performance results
include the deduction of the contingent deferred sales charge and reflect the
percentage change in net asset value, including reinvestment of dividends and
capital gains distributions. Benchmark comparisons are unmanaged and do not
reflect any fees or expenses. The performance of other share classes will be
greater than or less than the line shown. (See Notes to Performance Summary.)
VISIT MFS.COM FOR THE MOST RECENT MONTH-END PERFORMANCE RESULTS. MARKET
VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE, AND CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE
OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE
PERFORMANCE SHOWN DOES NOT REFLECT THE DEDUCTION OF TAXES, IF ANY, THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/04)
Lehman Brothers
MFS Muncicpal Municipal
Income Fund Bond Index
3/94 $10,000 $10,000
3/96 11,151 11,644
3/98 12,776 13,593
3/00 13,084 14,425
3/02 14,445 16,610
3/04 16,454 19,322
TOTAL RETURNS
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Average annual
without sales charge
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Class
Share class inception date 1-yr 3-yr 5-yr 10-yr
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A 9/7/1993 6.94% 5.88% 5.06% 5.93%
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B 12/29/1986 6.27% 5.13% 4.29% 5.11%
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C 1/3/1994 6.27% 5.12% 4.29% 5.13%
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Average annual
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Comparative benchmarks
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Average general municipal debt fund+ 5.46% 5.46% 4.70% 5.74%
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Lehman Brothers Municipal Bond
Index# 5.86% 6.49% 6.00% 6.81%
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Average annual
with sales charge
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Share class
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A 1.86% 4.18% 4.04% 5.41%
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B 2.27% 4.22% 3.96% 5.11%
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C 5.27% 5.12% 4.29% 5.13%
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Cumulative without
sales charge
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A 6.94% 18.71% 27.97% 77.87%
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B 6.27% 16.19% 23.39% 64.54%
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C 6.27% 16.17% 23.36% 64.97%
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+ Source: Lipper Inc., an independent firm that reports mutual fund performance.
# Source: Standard & Poor's Micropal, Inc.
INDEX DEFINITION
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX - a broad measure of the municipal
bond market.
It is not possible to invest directly in an index.
NOTES TO PERFORMANCE SUMMARY
Class A results, including sales charge, reflect the deduction of the maximum
4.75% sales charge. Class B results, including sales charge, reflect the
deduction of the applicable contingent deferred sales charge (CDSC), which
declines over six years from 4% to 0%. Class C results, including sales
charge, redeemed within one year from the end of the calendar month of
purchase, reflect the deduction of the 1% CDSC.
Performance results reflect any applicable expense subsidies and waivers in
effect during the periods shown. Without such subsidies and waivers, the
fund's performance results would be less favorable. Please see the prospectus
and financial statements for complete details.
KEY RISK CONSIDERATIONS:
A portion of income may be subject to state, federal, and/or alternative
minimum tax. Capital gains, if any, are subject to a capital gains tax.
If the Internal Revenue Service determines an issuer of a municipal security
has not complied with applicable tax requirements, interest from the security
could become taxable and the security could decline significantly in value.
Investments in high yield or lower-rated securities may provide greater
returns but are subject to greater-than-average risk.
These risks may increase share price volatility. Please see the prospectus for
further information regarding these and other risk considerations.
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
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PORTFOLIO OF INVESTMENTS - 3/31/04
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The Portfolio of Investments is a complete list of all securities owned by your fund. It is
categorized by broad-based asset classes.
Municipal Bonds - 98.9%
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PRINCIPAL AMOUNT
ISSUER (000 Omitted) $ VALUE
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Airport & Port Revenue - 2.2%
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Chicago, IL (O'Hare International Airport), RITES, FSA,
9.916%, 2022+(+) $1,500 $1,809,030
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Chicago, IL, O'Hare International Airport Rev. (2nd Lien
Passenger Facility D), AMBAC, 5.5%, 2019 350 381,665
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Connecticut Airport Rev. (Bradley International Airport),
FGIC, 7.65%, 2012 695 716,156
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Connecticut Airport Rev. (Bradley International Airport),
FGIC, 7.65%, 2012(++) 305 315,019
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Louisville & Jeff County, KY, Regional Airport Authority,
"A", MBIA, 6.5%, 2017 3,000 3,398,100
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Oklahoma City, OK, Airport Trust, "B", FSA, 5.75%, 2017 1,080 1,182,643
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$7,802,613
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Chemicals - 0.6%
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Brazos River, TX, Harbor Navigation District (Dow
Chemical Co.), 5.7%, 2033 $1,000 $1,101,830
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Sweetwater County, WY, Solid Waste Disposal Rev. (FMC
Corp.), 7%, 2024 1,000 1,015,400
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$2,117,230
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General Obligations - General Purpose - 6.5%
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Chicago, IL (Lakefront Millennium Parking Facilities),
MBIA, 5%, 2018 $4,000 $4,250,080
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Commonwealth of Massachusetts, 5.875%, 2017(++) 3,205 3,785,618
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Commonwealth of Puerto Rico, ROLS, FGIC, 9.896%, 2015+(+) 3,000 4,044,300
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Cranston, RI, FGIC, 6.375%, 2014 200 241,004
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Houston County, AL, AMBAC, 6.25%, 2019 850 1,017,578
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Indianapolis, IN, Public Improvement Bond Bank, "C",
AMBAC, 6%, 2017 500 582,105
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Mobile County, AL, 6%, 2014 800 934,216
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New York City, NY, "B", 5.75%, 2015 1,650 1,856,745
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New York, NY, "J", MBIA, 5%, 2017 2,000 2,145,680
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San Antonio, TX, 5%, 2020 700 730,688
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Southlake, TX, AMBAC, 0%, 2022 - 2023 6,335 2,147,635
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Wisconsin State, "C", 6%, 2019 1,200 1,422,600
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$23,158,249
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General Obligations - Improvement - 2.6%
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Birmingham, AL, "A", 5.75%, 2017 $1,000 $1,159,270
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Mesa, AZ, FGIC, 5%, 2018(++) 3,625 4,086,245
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Worcester, MA, FSA, 6%, 2017 3,475 4,109,257
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$9,354,772
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General Obligations - Schools - 8.6%
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Columbia & Brazoria, TX, Independent School District,
School Building, PSF, 5%, 2029 $535 $554,067
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Detroit, MI, City School District, "B", FGIC, 5%, 2021 2,000 2,106,680
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Dudley-Charlton, MA, Regional School District, RITES,
FGIC, 9.031%, 2017+(+) 1,495 1,917,637
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Florida State Board of Education Capital Outlay, Public
Education, "A", 5%, 2019 1,000 1,049,430
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Forsyth County, GA, School District, 6%, 2015 400 470,348
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Fresno, CA, Unified School District, MBIA, 6.55%, 2020 1,225 1,494,022
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Goose Creek, TX, Consolidated School District, 5%, 2020 2,500 2,623,700
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Houston, TX, Independent School District, RITES, PSF,
8.985%, 2017+(+) 2,325 2,723,180
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Keller, TX, Independent School District, PSF, 6%, 2017 1,980 2,354,059
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Leander, TX, Independent School District, PSF, 0%, 2018 2,500 1,160,275
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Manistee, MI, Area Public Schools, FGIC, 5.75%, 2019(++) 700 813,162
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Marshall, MI, Public School District, 5.5%, 2018 500 562,200
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Phenix City, AL, AMBAC, 5.65%, 2021 1,500 1,668,255
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Philadelphia, PA, School District, MBIA, 6%, 2016 750 877,058
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Pierre, SD, School District, FSA, 5.7%, 2017(++) 1,000 1,168,820
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Roma, TX, Indpendent School District, PSF, 5.875%, 2020 1,705 1,979,386
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Warren Township, IN (Vision 2005 School Building Corp.),
FGIC, 5.5%, 2020 2,600 2,901,288
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Williamson County, TN, Rural School, 6.125%, 2016 - 2017 3,430 4,063,110
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$30,486,677
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Healthcare Revenue - Hospitals - 18.5%
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Allegheny County, PA, Hospital Development Authority Rev.
(West Penn Allegheny Health), 9.25%, 2022 $350 $387,947
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Allegheny County, PA, Hospital Development Authority Rev.
(West Penn Allegheny Health), 9.25%, 2030 650 720,473
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Baldwin County, AL, Eastern Shore Health Care Authority
Rev. (Thomas Hospital), 5.75%, 2027 600 577,746
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Baxter County, AR, Hospital Rev., 5.375%, 2014 1,000 1,036,110
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Chemung County, NY, Civic Facilities Rev. (St. Joseph's
Hospital-Elmira), 6%, 2013 730 734,059
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Colorado Health Facilities Authority Rev. (Parkview
Medical Center), 6%, 2016 1,000 1,044,820
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Colorado Health Facilities Authority Rev. (Portercare
Adventist Health Systems), 6.625%, 2026 500 556,425
- ----------------------------------------------------------------------------------------------
Cullman, AL, Cullman Medical Park South, Medical Clinic
Board Rev. (Cullman Regional Medical Center), 6.5%, 2013 360 364,133
- ----------------------------------------------------------------------------------------------
Cuyahoga County, OH, Hospital Facilities Rev. (Canton,
Inc.), 7.5%, 2030 900 1,004,094
- ----------------------------------------------------------------------------------------------
Delaware Health Facilities Authority Rev. (Nanticoke
Memorial Hospital), 5.625%, 2032 465 484,497
- ----------------------------------------------------------------------------------------------
Denver, CO, Health & Hospital Authority Rev., 5.375%, 2018 300 301,335
- ----------------------------------------------------------------------------------------------
Denver, CO, Health & Hospital Authority Rev., 6%, 2023 500 513,215
- ----------------------------------------------------------------------------------------------
District of Columbia, Health & Hospital Authority Rev.
(Medstar University Hospital), 6.875%, 2031(++) 700 800,611
- ----------------------------------------------------------------------------------------------
Farmington, NM, Hospital Rev. (San Juan Regional Medical
Center), "A", 5%, 2023 665 666,975
- ----------------------------------------------------------------------------------------------
Fulton County, NY, Industrial Development Agency, Civic
Facility Rev. (Nathan Littauer Hospital), 5.75%, 2009 250 250,780
- ----------------------------------------------------------------------------------------------
Gainsville & Hall County, GA, Hospital Authority Rev.
(Northeast Georgia Health System), 5.5%, 2031 445 457,042
- ----------------------------------------------------------------------------------------------
Gulfport, MS, Healthcare Authority Rev. (Memorial
Hospital at Gulfport), 5.75%, 2031 500 516,335
- ----------------------------------------------------------------------------------------------
Henrico County, VA, Industrial Development Authority Rev.
(Bon Secours), FSA, 10.61%, 2027(+) 5,000 7,000,800
- ----------------------------------------------------------------------------------------------
Highlands County, FL, Health Facilities Authority Rev.
(Adventist/Sunbelt Hospital), 6%, 2031 350 373,209
- ----------------------------------------------------------------------------------------------
Illinois Health Facilities Authority Rev. (Condell
Medical Center), 6.35%, 2015 1,000 1,095,640
- ----------------------------------------------------------------------------------------------
Illinois Health Facilities Authority Rev. (Decatur
Memorial Hospital), 5.75%, 2024 350 362,037
- ----------------------------------------------------------------------------------------------
Illinois Health Facilities Authority Rev. (Passavant
Memorial Area Hospital Associates), 6%, 2024 335 348,923
- ----------------------------------------------------------------------------------------------
Illinois Health Facilities Authority Rev. (Riverside
Health Systems), 5.75%, 2022 650 670,163
- ----------------------------------------------------------------------------------------------
Illinois Health Facilities Authority Rev. (Sinai Health),
FHA, 5.15%, 2037 640 650,739
- ----------------------------------------------------------------------------------------------
Indiana Health Facilities Financing Authority, Hospital
Rev. (Community Foundation of NW Indiana),
6.375%, 2021 - 2031 2,200 2,257,464
- ----------------------------------------------------------------------------------------------
Indiana Health Facilities Financing Authority, Hospital
Rev. (Riverview Hospital), 5.25%, 2014 400 416,576
- ----------------------------------------------------------------------------------------------
Indiana Health Facilities Financing Authority, Hospital
Rev. (Riverview Hospital), 6.125%, 2031 250 258,968
- ----------------------------------------------------------------------------------------------
Kentucky Economic Development Finance Authority, Health
Systems Rev. (Norton Healthcare, Inc.), 6.5%, 2020 1,250 1,333,675
- ----------------------------------------------------------------------------------------------
Kentucky Economic Development Finance Authority, Health
Systems Rev. (Norton Healthcare, Inc.), 6.625%, 2028 250 264,560
- ----------------------------------------------------------------------------------------------
Kentucky Economic Development Finance Authority,
Refunding & Improvement, "A", MBIA, 5%, 2018 2,400 2,563,464
- ----------------------------------------------------------------------------------------------
Knox County, TN, Health Educational Hospital Facility
(Baptist Health Systems, East Tennessee), 6.375%, 2022 1,000 1,038,870
- ----------------------------------------------------------------------------------------------
Lauderdale County & Florence, AL (Coffee Health Group),
"A", MBIA, 5.25%, 2019 1,100 1,191,443
- ----------------------------------------------------------------------------------------------
Lufkin, TX, Health Facilities Rev. (Memorial Health
System of East Texas), 6.875%, 2026 325 331,728
- ----------------------------------------------------------------------------------------------
Macomb County, MI, Hospital Finance Authority Rev. (Mount
Clemens General Hospital), 5.75%, 2025 1,000 949,950
- ----------------------------------------------------------------------------------------------
Marion County, FL, Hospital District Rev. (Monroe
Hospital), 5.625%, 2019 750 783,548
- ----------------------------------------------------------------------------------------------
Marshall County, AL, Health Care Rev., "A", 6.25%, 2022 500 536,485
- ----------------------------------------------------------------------------------------------
Martin County, FL, Health Facilities Rev. (Martin
Memorial Medical Center), "B", 5.75%, 2022 850 867,340
- ----------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority
Rev. (Medstar Health), 5.5%, 2033 305 307,577
- ----------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority
Rev. (University of Maryland Medical System), 6.75%, 2030 1,000 1,143,810
- ----------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority
Rev. (Anna Jaques Hospital), 6.875%, 2012 280 284,172
- ----------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority
Rev. (Caritas Christi), 6.5%, 2012 400 450,592
- ----------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority
Rev. (Caritas Christi), 5.7%, 2015 1,000 1,030,270
- ----------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority
Rev. (Partners Healthcare), 5.75%, 2021 400 433,240
- ----------------------------------------------------------------------------------------------
Mecosta County, MI, General Hospital Rev., 6%, 2018 300 295,299
- ----------------------------------------------------------------------------------------------
Miami Beach, FL, Health Facilities (Mt. Sinai Medical
Center), 5.5%, 2035 295 292,950
- ----------------------------------------------------------------------------------------------
Michigan Hospital Finance Authority Rev. (Memorial
Healthcare Center), 5.75%, 2015 800 831,064
- ----------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Rev. (Rush
Medical Foundation) CONNIE LEE, 6.7%, 2018 1,000 1,003,960
- ----------------------------------------------------------------------------------------------
Mount Lebanon, PA, Hospital Authority Rev. (St. Clair
Memorial Hospital), 5.625%, 2032 375 380,576
- ----------------------------------------------------------------------------------------------
Nassau County, NY, Industrial Development Agency, Civic
Facilities Rev. (North Shore Health Systems), 5.875%, 2011 420 471,992
- ----------------------------------------------------------------------------------------------
New Hampshire Health & Educational Facilities Authority
Rev. (Covenant Health), 6.5%, 2017 960 1,077,898
- ----------------------------------------------------------------------------------------------
New Hampshire Health & Educational Facilities Authority
Rev. (Exeter Hospital), 6%, 2024 500 531,180
- ----------------------------------------------------------------------------------------------
New Jersey Health Care Facilities (Palisades Medical
Center), 6.5%, 2021 500 522,360
- ----------------------------------------------------------------------------------------------
North Texas Health Facilities Development Corp. Rev.
(United Regional Health Care System, Inc.), 6%, 2023 1,000 1,060,950
- ----------------------------------------------------------------------------------------------
Ohio County, WV, County Commission Health System Rev.
(Ohio Valley Medical Center), 5.75%, 2013 900 830,556
- ----------------------------------------------------------------------------------------------
Oklahoma Development Finance Authority Rev. (Comanche
County Hospital), 6%, 2014 600 646,572
- ----------------------------------------------------------------------------------------------
Oklahoma Development Finance Authority Rev. (Comanche
County Hospital), 6.6%, 2031 405 424,225
- ----------------------------------------------------------------------------------------------
Palm Beach County, FL, Health Facilities Rev. (Boca Raton
Hospital), 5.5%, 2021 500 520,390
- ----------------------------------------------------------------------------------------------
Rhode Island Health & Education Building Rev., Hospital
Financing (Lifespan Obligated Group), 6.5%, 2032 1,500 1,578,105
- ----------------------------------------------------------------------------------------------
Richardson, TX, Hospital Authority Rev. (Baylor-
Richardson), 5.25%, 2013 600 620,004
- ----------------------------------------------------------------------------------------------
Rio Grande, TX, Health Facilities Development Corp.
(Golden Palms), MBIA, 6.4%, 2015 2,800 2,837,660
- ----------------------------------------------------------------------------------------------
Royston, GA, Hospital Authority Rev. (Ty Cobb Healthcare
Systems, Inc.), 6.5%, 2027 290 276,866
- ----------------------------------------------------------------------------------------------
Shelby County, TN, Health Educational Hospital Rev.
(Methodist Healthcare), 6%, 2016 800 872,976
- ----------------------------------------------------------------------------------------------
South Carolina Jobs Economic Development Authority,
Hospital Facililties Rev. (Palmetto Health Alliance),
6.25%, 2031 500 528,385
- ----------------------------------------------------------------------------------------------
Steubenville, OH, Hospital Rev. (Trinity Hospital),
6.375%, 2020 300 321,525
- ----------------------------------------------------------------------------------------------
Stillwater, OK, Medical Center Authority (Stillwater
Medical Center), 6.5%, 2019 1,000 1,056,540
- ----------------------------------------------------------------------------------------------
Suffolk County, NY, Industrial Development Agency Rev.
(Huntington Hospital), 5.875%, 2032 1,000 1,026,940
- ----------------------------------------------------------------------------------------------
Suffolk County, NY, Industrial Development Agency Rev.
(Southampton Hospital), 7.25%, 2020 750 748,883
- ----------------------------------------------------------------------------------------------
Suffolk County, NY, Industrial Development Agency Rev.
(Southampton Hospital), 7.625%, 2030 250 252,895
- ----------------------------------------------------------------------------------------------
Tallahasse, FL, Health Facilities Rev. (Tallahassee
Memorial Healthcare), 6.25%, 2020 1,000 1,003,880
- ----------------------------------------------------------------------------------------------
Tom Green County, TX, Health Facilities Rev. (Shannon
Health System), 6.75%, 2021 400 427,376
- ----------------------------------------------------------------------------------------------
Upper Illinois River Valley Development, Health
Facilities Rev. (Morris Hospital), 6.625%, 2031 500 535,145
- ----------------------------------------------------------------------------------------------
Valley, AL, Special Care Facilities Financing (Lanier
Memorial Hospital), 5.5%, 2007 500 505,945
- ----------------------------------------------------------------------------------------------
Wapello County, IA, Hospital Authority Rev. (Ottumwa
Regional Health Center), 6.375%, 2031 750 784,898
- ----------------------------------------------------------------------------------------------
Weirton, WV, Municipal Hospital Building Commission Rev.
(Weirton Hospital Medical Center), 6.375%, 2031 500 491,980
- ----------------------------------------------------------------------------------------------
West Plains, MO, Industrial Development Authority Rev.
(Ozarks Medical Center), 6.75%, 2024 195 199,286
- ----------------------------------------------------------------------------------------------
West Shore, PA, Hospital Authority (Holy Spirit
Hospital), 6.25%, 2032 1,000 1,035,220
- ----------------------------------------------------------------------------------------------
Wichita, KS, Hospital Authority Rev. (Via Christi Health
System), 6.25%, 2019 1,500 1,695,180
- ----------------------------------------------------------------------------------------------
Wisconsin Health & Educational Facilities Authority Rev.
(Asgenesian Healthcare, Inc.), 6%, 2017 325 350,867
- ----------------------------------------------------------------------------------------------
Wisconsin Health & Educational Facilities Authority Rev.
(Aurora HealthCare), 6.875%, 2030 750 848,693
- ----------------------------------------------------------------------------------------------
Wisconsin Health & Educational Facilities Authority Rev.
(Wheaton Franciscan Services), 6.25%, 2022 1,000 1,096,270
- ----------------------------------------------------------------------------------------------
Yonkers, NY, Industrial Development Agency, Civic
Facilities Rev. (St. John's Riverside Hospital), 6.8%, 2016 460 476,689
- ----------------------------------------------------------------------------------------------
$65,824,020
- ----------------------------------------------------------------------------------------------
Healthcare Revenue - Long Term Care - 2.3%
- ----------------------------------------------------------------------------------------------
Bell County, TX, Health Facilities Development Rev.
(Advanced Living Technology), 7.75%, 2006 $90 $84,855
- ----------------------------------------------------------------------------------------------
Bell County, TX, Health Facilities Development Rev.
(Advanced Living Technology), 8.125%, 2016 505 418,090
- ----------------------------------------------------------------------------------------------
Bell County, TX, Health Facilities Development Rev.
(Advanced Living Technology), 8.5%, 2026 1,130 896,531
- ----------------------------------------------------------------------------------------------
Colorado Health Facilities Authority Rev. (Evangelical
Lutheran Good Samaritan), 6.9%, 2025 500 549,250
- ----------------------------------------------------------------------------------------------
Cumberland County, PA, Retirement Community Rev. (Wesley
Affiliated Services), 7.25%, 2035 375 382,403
- ----------------------------------------------------------------------------------------------
Eden Prairie, MN, Multi-Family Housing Rev. (SE-Rolling
Hills), "A", GNMA, 6%, 2021 200 217,182
- ----------------------------------------------------------------------------------------------
Goldsboro, NC, Housing Authority Rev. (North Carolina
Housing Foundation, Inc.), 7.25%, 2029 960 834,134
- ----------------------------------------------------------------------------------------------
Indiana Health Facilities Financing Authority Rev.
(Hoosier Care), 7.125%, 2034 825 681,912
- ----------------------------------------------------------------------------------------------
Iowa Finance Authority, Health Care Facilities Rev. (Care
Initiatives), 9.25%, 2025 495 589,248
- ----------------------------------------------------------------------------------------------
Jefferson County, KY, Health Care Authority Rev. (Beverly
Enterprises, Inc.), 5.875%, 2007 160 157,691
- ----------------------------------------------------------------------------------------------
Luzerne County, PA, Industrial Development Authority Rev.
(Beverly Enterprise, Inc.), 6.75%, 2008 300 301,029
- ----------------------------------------------------------------------------------------------
Millbrae, CA, Residential Facilities Rev. (Magnolia of
Millbrae), 7.375%, 2027 970 1,017,074
- ----------------------------------------------------------------------------------------------
New Hampshire Bussiness Finance Authority, Health Care
Facilities Rev. (Metro Health Foundation, Inc.), 6.55%, 2028 950 906,310
- ----------------------------------------------------------------------------------------------
Tennessee Veterans Home Board Rev. (Humboldt), 6.75%, 2021(++) 1,000 1,115,400
- ----------------------------------------------------------------------------------------------
$8,151,109
- ----------------------------------------------------------------------------------------------
Human Services - 0.4%
- ----------------------------------------------------------------------------------------------
Nassau County, NY, Industrial Development Civic (Special
Needs Facilities), 6.1%, 2012 $295 $307,422
- ----------------------------------------------------------------------------------------------
Orange County, FL, Health Facilities Authority Rev. (GF/
Orlando), 9%, 2031 1,000 1,023,690
- ----------------------------------------------------------------------------------------------
$1,331,112
- ----------------------------------------------------------------------------------------------
Industrial Revenue - Airlines - 0.5%
- ----------------------------------------------------------------------------------------------
Cleveland, OH, Airport Special Rev. (Continental
Airlines, Inc.), 5.7%, 2019 $1,000 $775,470
- ----------------------------------------------------------------------------------------------
Los Angeles, CA, Regional Airport Lease Rev. (American
Airlines, Inc.), 7%, 2012 300 269,250
- ----------------------------------------------------------------------------------------------
Tulsa, OK, Municipal Airport Trust Rev. (American
Airlines, Inc.), "B", 5.65%, 2035 1,000 897,500
- ----------------------------------------------------------------------------------------------
$1,942,220
- ----------------------------------------------------------------------------------------------
Industrial Revenue - Chemicals - 0.3%
- ----------------------------------------------------------------------------------------------
Red River Authority, TX, Pollution Control Rev.
(Celanese), 6.7%, 2030 $1,000 $1,076,530
- ----------------------------------------------------------------------------------------------
Industrial Revenue - Environmental Services - 1.9%
- ----------------------------------------------------------------------------------------------
Carbon County, UT, Solid Waste Disposal Rev. (Allied
Waste), 7.45%, 2017 $2,500 $2,569,525
- ----------------------------------------------------------------------------------------------
Charles City County, VA, Industrial Development
Authority, Solid Waste Disposal Facility Rev. (Waste
Management, Inc.), 6.25%, 2027 500 566,250
- ----------------------------------------------------------------------------------------------
Gloucester County, NJ, Improvement Authority, Solid Waste
Resource Recovery Rev. (Waste Management, Inc.),
6.85%, 2029 150 174,861
- ----------------------------------------------------------------------------------------------
Henrico County, VA, Industrial Development Authority Rev.
(Browning Ferris, Inc.), 5.3%, 2011 1,000 1,013,360
- ----------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev., Resource
Recovery Rev. (Waste Management, Inc.), 6.9%, 2029 300 350,487
- ----------------------------------------------------------------------------------------------
Nevada Department of Business (Republic Services, Inc.),
5.625%, 2026 450 477,131
- ----------------------------------------------------------------------------------------------
New York Environmental Facilities Corp., Solid Waste
Disposal Rev. (Waste Management), 4%, 2012 1,000 1,001,730
- ----------------------------------------------------------------------------------------------
State of Ohio, Air Quality Development Authority Rev.
(USX Corp.), 5%, 2015 500 555,075
- ----------------------------------------------------------------------------------------------
$6,708,419
- ----------------------------------------------------------------------------------------------
Industrial Revenue - Metals - 0%
- ----------------------------------------------------------------------------------------------
Burns Harbor, IN, Solid Waste Disposal Facilities Rev.
(Bethlehem Steel), 8%, 2024** $3,000 $3,750
- ----------------------------------------------------------------------------------------------
Industrial Revenue - Other - 2.8%
- ----------------------------------------------------------------------------------------------
Bucks County, PA, Industrial Development Authority Rev.
(USX Corp.), 5.4%, 2017 $500 $568,295
- ----------------------------------------------------------------------------------------------
Gulf Coast, Industrial Development Authority (Valero
Energy Corp.), 5.6%, 2031 500 504,670
- ----------------------------------------------------------------------------------------------
Hardeman County, TN, Correctional Facilities Corp.
(Corrections Corp. of America), 7.375%, 2017 500 516,740
- ----------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency, Resource
Recovery Rev. (Flour Corp.), 5.625%, 2019 2,895 3,041,516
- ----------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Welch
Foods, Inc.), 5.6%, 2017 1,300 1,397,253
- ----------------------------------------------------------------------------------------------
Park Creek Metropolitan District, Colorado Rev., 7.875%, 2032 400 413,296
- ----------------------------------------------------------------------------------------------
Pennsylvania Economic Development Financing Authority
Rev. (Amtrak), 6.125%, 2021 550 563,195
- ----------------------------------------------------------------------------------------------
Port of New Orleans, LA, Industrial Development Authority
Rev. (Avondale Industries), 8.5%, 2014(++) 1,845 1,916,992
- ----------------------------------------------------------------------------------------------
Tooele County, UT, Hazardous Waste Treatment Rev. (Union
Pacific Corp.), 5.7%, 2026 980 999,737
- ----------------------------------------------------------------------------------------------
$9,921,694
- ----------------------------------------------------------------------------------------------
Industrial Revenue - Paper - 2.2%
- ----------------------------------------------------------------------------------------------
Beauregard Parish, LA (Boise Cascade Corp.), 6.8%, 2027 $500 $514,750
- ----------------------------------------------------------------------------------------------
Butler, AL, Solid Waste Disposal Rev. (James River
Corp.), 8%, 2028 850 873,834
- ----------------------------------------------------------------------------------------------
Delta County, MI, Economic Development Corp.,
Environmental Improvements Rev. (Mead Westvaco Escanaba),
6.25%, 2027 900 961,551
- ----------------------------------------------------------------------------------------------
Mobile, AL, Industrial Development Board Improvement Rev.
(International Paper Co.), "B", 6.45%, 2019 2,000 2,173,940
- ----------------------------------------------------------------------------------------------
Navajo County, AZ, Industrial Development Authority
(Stone Container Corp.), 7.4%, 2026 1,500 1,529,400
- ----------------------------------------------------------------------------------------------
Navajo County, AZ, Industrial Development Authority
(Stone Container Corp.), 7.2%, 2027 500 509,870
- ----------------------------------------------------------------------------------------------
Onondaga County, NY, Industrial Development Authority
Rev., Solid Waste Disposal Rev. (Solvay Paperboard LLC),
6.8%, 2014 1,000 1,065,400
- ----------------------------------------------------------------------------------------------
$7,628,745
- ----------------------------------------------------------------------------------------------
Miscellaneous Revenue - Entertainment & Tourism - 1.0%
- ----------------------------------------------------------------------------------------------
Capital Trust Agency of Florida Rev. (Seminole Tribe
Convention), 10%, 2033 $1,000 $1,237,700
- ----------------------------------------------------------------------------------------------
Hamilton County, OH, Convention Facilities Authority
Rev., FGIC, 5.25%, 2022 1,310 1,425,581
- ----------------------------------------------------------------------------------------------
Nevada Department of Bussiness & Industry Rev. (Las Vegas
Monorail), 7.375%, 2040 1,000 998,210
- ----------------------------------------------------------------------------------------------
$3,661,491
- ----------------------------------------------------------------------------------------------
Miscellaneous Revenue - Other - 0.6%
- ----------------------------------------------------------------------------------------------
Austin, TX, Convention Center (Convention Enterprises,
Inc.), 6.6%, 2021 $300 $321,279
- ----------------------------------------------------------------------------------------------
Austin, TX, Convention Center (Convention Enterprises,
Inc.), 6.7%, 2028 400 430,144
- ----------------------------------------------------------------------------------------------
Gallery Certificate Trust, PA, Parking Rev., FSA, 4.5%, 2013 775 785,641
- ----------------------------------------------------------------------------------------------
Rockbridge County, VA, Industrial Development Authority
Rev. (Virginia Horse Center), 6.85%, 2021 500 474,435
- ----------------------------------------------------------------------------------------------
$2,011,499
- ----------------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 2.0%
- ----------------------------------------------------------------------------------------------
California Statewide Community Development Authority Rev.
(Irvine Apartments), 5.25%, 2025 $1,000 $1,041,050
- ----------------------------------------------------------------------------------------------
Charter Mac Equity Issuer Trust, 6.625%, 2009## 2,000 2,263,800
- ----------------------------------------------------------------------------------------------
Eaglebend, CO, Affordable Housing Corp., 6.2%, 2012 1,000 997,330
- ----------------------------------------------------------------------------------------------
Panhandle, TX, Regional Housing Finance Rev., 6.625%, 2020 330 344,919
- ----------------------------------------------------------------------------------------------
Panhandle, TX, Regional Housing Finance Rev., 6.75%, 2031 1,670 1,747,805
- ----------------------------------------------------------------------------------------------
Ridgeland, MS, Urban Renewal (Northbrook I & II
Apartments), 6.15%, 2019** 1,250 603,950
- ----------------------------------------------------------------------------------------------
$6,998,854
- ----------------------------------------------------------------------------------------------
Parking - 0.1%
- ----------------------------------------------------------------------------------------------
Rail Connections, Inc., MA Rev., 0%, 2016 - 2018(++) $610 $316,529
- ----------------------------------------------------------------------------------------------
Sales & Excise Tax Revenue - 2.0%
- ----------------------------------------------------------------------------------------------
Austin, TX, Town Community Events Center Venue, FGIC, 6%, 2019 $1,015 $1,177,836
- ----------------------------------------------------------------------------------------------
Metropolitan Pier & Exposition Authority, IL, MBIA,
0%, 2016 8,400 4,918,368
- ----------------------------------------------------------------------------------------------
Midwest City, OK, Municipal Authority Capital, FSA,
5.125%, 2018(++) 825 940,220
- ----------------------------------------------------------------------------------------------
$7,036,424
- ----------------------------------------------------------------------------------------------
Single Family Housing - Local - 2.8%
- ----------------------------------------------------------------------------------------------
Adams County, CO, Single Family Mortgage Rev.,
8.875%, 2011(++) $2,510 $3,468,770
- ----------------------------------------------------------------------------------------------
Brevard County, FL, Housing Finance Authority, "B", GNMA,
6.5%, 2022 327 341,676
- ----------------------------------------------------------------------------------------------
Calcasieu Parish, LA, Public Trust Authority, Single
Family Mortgage Rev. "A", GNMA, 6.05%, 2032 540 574,609
- ----------------------------------------------------------------------------------------------
California Rural Home Mortgage Finance Authority Rev.,
GNMA, 6.55%, 2030 295 312,850
- ----------------------------------------------------------------------------------------------
Chicago, IL, Single Family Mortgage Rev., GNMA, 7.05%, 2030 35 36,197
- ----------------------------------------------------------------------------------------------
Cook County, IL, Single Family Mortgage Rev., "A", 0%, 2015 715 207,858
- ----------------------------------------------------------------------------------------------
De Kalb, IL, Single Family Mortgage Rev., GNMA, 7.45%, 2009 5 5,004
- ----------------------------------------------------------------------------------------------
Jefferson Parish, LA, Single Family Mortgage Rev., GNMA,
6.625%, 2023 510 563,958
- ----------------------------------------------------------------------------------------------
Jefferson Parish, LA, Single Family Mortgage Rev., GNMA,
6.75%, 2030 205 216,105
- ----------------------------------------------------------------------------------------------
Lee County, FL, Housing Finance Authority Rev., GNMA, 7%, 2031 50 51,612
- ----------------------------------------------------------------------------------------------
Maricopa County, AZ, Single Family Mortgage Rev. "B",
GNMA, 6.2%, 2034 420 461,051
- ----------------------------------------------------------------------------------------------
Pima County, AZ, Industrial Development Authority, GNMA,
7.05%, 2030 465 482,898
- ----------------------------------------------------------------------------------------------
San Bernardino County, CA, Single Family Mortgage Rev.,
GNMA, 7.375%, 2020 30 31,048
- ----------------------------------------------------------------------------------------------
Sedgwick & Shawnee Counties, KS, Single Family Housing
Rev., "B", GNMA, 3.25%, 2027 415 453,425
- ----------------------------------------------------------------------------------------------
Sedgwick & Shawnee Counties, KS, Single Family Housing
Rev., GNMA, 6.875%, 2026 340 355,399
- ----------------------------------------------------------------------------------------------
Sedgwick & Shawnee Counties, KS, Single Family Housing
Rev., GNMA, 6.45%, 2029 - 2033 1,660 1,813,992
- ----------------------------------------------------------------------------------------------
Sedgwick & Shawnee Counties, KS, Single Family Housing
Rev., GNMA, 4%, 2035 500 537,725
- ----------------------------------------------------------------------------------------------
$9,914,177
- ----------------------------------------------------------------------------------------------
Single Family Housing - State - 3.0%
- ----------------------------------------------------------------------------------------------
California Housing Finance Agency Rev., Home Mortgage,
MBIA, 0%, 2027 - 2028 $3,055 $874,147
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 7.15%, 2014 22 22,590
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 7.45%, 2016 70 71,189
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.75%, 2021 85 86,807
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 5.9%, 2023 275 290,381
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.1%, 2023 150 156,857
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 7.4%, 2027 65 65,391
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.875%, 2028 225 232,549
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.8%, 2030 170 175,214
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.6%, 2032 305 319,448
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.375%, 2033 175 187,430
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.55%, 2033 170 179,508
- ----------------------------------------------------------------------------------------------
Louisiana Housing Finance Agency, Single Family Mortgage
Rev., GNMA, 7.55%, 2031 225 243,101
- ----------------------------------------------------------------------------------------------
Louisiana Housing Finance Agency, Single Family Mortgage
Rev., GNMA, 6.4%, 2032 320 335,219
- ----------------------------------------------------------------------------------------------
Minnesota Housing Finance Agency Rev., Residential
Housing Finance "B", 4.8%, 2023 290 298,059
- ----------------------------------------------------------------------------------------------
Missouri State Housing Development Commission, Single
Family Mortgage Rev. (Home Loan Program), GNMA,
6.7%, 2030 430 450,739
- ----------------------------------------------------------------------------------------------
Missouri State Housing Development Commission, Single
Family Mortgage Rev. (Home Loan Program), GNMA, 6.35%, 2032 390 412,913
- ----------------------------------------------------------------------------------------------
Missouri State Housing Development Commission, Single
Family Mortgage Rev. (Home Loan Program), GNMA, 6.85%, 2032 335 372,969
- ----------------------------------------------------------------------------------------------
Missouri State Housing Development Commission, Single
Family Mortgage Rev. (Home Loan Program), GNMA, 6.75%, 2034 210 226,321
- ----------------------------------------------------------------------------------------------
Nebraska Investment Finance Authority Rev., GNMA,
5.6%, 2020 40 41,258
- ----------------------------------------------------------------------------------------------
New Hampshire Housing Finance Authority Rev., 5.875%, 2030 190 198,793
- ----------------------------------------------------------------------------------------------
New Hampshire Housing Finance Authority Rev., 6.3%, 2031 200 217,166
- ----------------------------------------------------------------------------------------------
New Mexico Mortgage Finance Authority Rev., 7.1%, 2030 150 162,566
- ----------------------------------------------------------------------------------------------
New Mexico Mortgage Finance Authority Rev., GNMA, 6.25%, 2032 595 633,306
- ----------------------------------------------------------------------------------------------
New Mexico Mortgage Finance Authority Rev., GNMA, 6.35%, 2033 295 317,004
- ----------------------------------------------------------------------------------------------
North Dakota Housing Finance Agency Rev., Housing
Finance, 5%, 2033 555 563,297
- ----------------------------------------------------------------------------------------------
Oklahoma Housing Finance Agency, 6.65%, 2029 1,485 1,601,573
- ----------------------------------------------------------------------------------------------
Phoenix, AZ, Single Family Mortgage Rev., GNMA, 6.1%, 2028 125 133,758
- ----------------------------------------------------------------------------------------------
Texas Housing & Community Affairs, Residential Mortgage
Rev., GNMA, 7.1%, 2021 1,070 1,124,613
- ----------------------------------------------------------------------------------------------
Vermont Housing Finance Agency Rev., FSA, 4.95%, 2032 410 426,781
- ----------------------------------------------------------------------------------------------
West Virginia State, Housing Development Fund Rev., 0%, 2037 1,330 227,457
- ----------------------------------------------------------------------------------------------
$10,648,404
- ----------------------------------------------------------------------------------------------
Solid Waste Revenue - 1.1%
- ----------------------------------------------------------------------------------------------
Delaware County, PA, Industrial Development Authority
Rev. (American Ref-fuel Co.), 6.2%, 2019 $500 $520,465
- ----------------------------------------------------------------------------------------------
Delaware County, PA, Industrial Development Authority
Rev. (American Ref-fuel Co.), "A", 6.1%, 2005 875 890,426
- ----------------------------------------------------------------------------------------------
Hudson County, NJ, Solid Waste System Rev., 5.9%, 2015 880 878,126
- ----------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Ogden
Haverhill Associates), 6.7%, 2014 700 748,489
- ----------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev., Resource
Recovery Rev. (Odgen Haverhill Associates), 5.6%, 2019 1,000 994,320
- ----------------------------------------------------------------------------------------------
$4,031,826
- ----------------------------------------------------------------------------------------------
State & Local Appropriation - 3.6%
- ----------------------------------------------------------------------------------------------
Alabama Building Renovation Authority, AMBAC, 6%, 2018 $760 $890,804
- ----------------------------------------------------------------------------------------------
Alabama State Public School & College, Capital
Improvement, "D", 6%, 2015 2,850 3,320,421
- ----------------------------------------------------------------------------------------------
Chicago, IL, Public Building Commission Rev., RITES,
FGIC, 8.836%, 2016 - 2017+(+) 2,750 3,497,325
- ----------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency (Visual &
Performing Arts), 6%, 2021 1,000 1,204,830
- ----------------------------------------------------------------------------------------------
Michigan State Certificates of Participation, AMBAC,
5.5%, 2020 1,250 1,394,538
- ----------------------------------------------------------------------------------------------
New Mexico Finance Authority Rev., Court Facilities Fee
Rev., MBIA, 5.5%, 2020 475 531,454
- ----------------------------------------------------------------------------------------------
New York State Urban Development Corp., Correctional
Facilities Service Contract C, AMBAC, 5.875%, 2019 1,000 1,168,570
- ----------------------------------------------------------------------------------------------
Stafford, TX, Economic Development Corp., FGIC, 6%, 2015 525 630,961
- ----------------------------------------------------------------------------------------------
$12,638,903
- ----------------------------------------------------------------------------------------------
Student Loan Revenue - 0.9%
- ----------------------------------------------------------------------------------------------
Access to Loans for Learning, California Student Loan
Rev., 7.95%, 2030 $650 $681,460
- ----------------------------------------------------------------------------------------------
Arizona Student Loan Acquisition Authority Rev., 5.8%, 2016 675 728,035
- ----------------------------------------------------------------------------------------------
Arizona Student Loan Acquisition Authority Rev., 5.85%, 2017 700 752,745
- ----------------------------------------------------------------------------------------------
Massachusetts Educational Financing Authority, Refunding
Issue G, "A", MBIA, 6.1%, 2018 835 873,418
- ----------------------------------------------------------------------------------------------
$3,035,658
- ----------------------------------------------------------------------------------------------
Tax - Other - 1.0%
- ----------------------------------------------------------------------------------------------
Houston, TX, Certificate of Participation, 6.3%, 2020 $1,000 $1,103,310
- ----------------------------------------------------------------------------------------------
New York, NY, Transitional, Future Tax Secured, "A",
6%, 2017(++) 2,000 2,383,280
- ----------------------------------------------------------------------------------------------
$3,486,590
- ----------------------------------------------------------------------------------------------
Tax Assessment - 1.6%
- ----------------------------------------------------------------------------------------------
Broadview, IL, Tax Increment Rev., 5.25%, 2012 $1,000 $1,047,790
- ----------------------------------------------------------------------------------------------
Capital Region Community Development District of Florida,
Capital Improvement Rev., 5.95%, 2006 165 167,653
- ----------------------------------------------------------------------------------------------
Greyhawk Landing Community Development, 6.25%, 2009 410 421,673
- ----------------------------------------------------------------------------------------------
Katy, TX, Development Authority Rev., 5.8%, 2011 970 1,018,122
- ----------------------------------------------------------------------------------------------
Katy, TX, Development Authority Rev., 6%, 2018 1,500 1,539,555
- ----------------------------------------------------------------------------------------------
Panther Trace, FL, Community Development District Rev.,
6.5%, 2009 370 379,479
- ----------------------------------------------------------------------------------------------
Preserve At Wilderness Lake, "B", 5%, 2009 525 522,659
- ----------------------------------------------------------------------------------------------
Renaissance Community Development, "B", 6.25%, 2008 605 623,816
- ----------------------------------------------------------------------------------------------
$5,720,747
- ----------------------------------------------------------------------------------------------
Tobacco - 1.6%
- ----------------------------------------------------------------------------------------------
Badger Tobacco, WI (Asset Securitization Corp.), 6.125%, 2027 $1,000 $968,010
- ----------------------------------------------------------------------------------------------
District of Columbia, Tobacco Settlement, 6.25%, 2024 435 425,652
- ----------------------------------------------------------------------------------------------
Golden State Tobacco Securization, CA, 5.375%, 2028 1,500 1,514,835
- ----------------------------------------------------------------------------------------------
Guam Economic Development Authority, 5%, 2022 215 217,668
- ----------------------------------------------------------------------------------------------
Iowa Tobacco Settlement Authority, 5.3%, 2025 750 654,090
- ----------------------------------------------------------------------------------------------
Louisana Tobacco Settlement Authority, 5.5%, 2030 350 313,891
- ----------------------------------------------------------------------------------------------
New Jersey Tobacco Settlement Authority, 5.75%, 2032 600 557,436
- ----------------------------------------------------------------------------------------------
Rhode Island Tobacco Settlement Authority, 6%, 2023 250 240,043
- ----------------------------------------------------------------------------------------------
South Carolina Tobacco Settlement Rev. Management
Authority, 6.375%, 2028 500 480,025
- ----------------------------------------------------------------------------------------------
Washington Tobacco Settlement Authority, 6.5%, 2026 200 196,456
- ----------------------------------------------------------------------------------------------
$5,568,106
- ----------------------------------------------------------------------------------------------
Toll Roads - 1.8%
- ----------------------------------------------------------------------------------------------
New Jersey Turnpike Authority Rev., MBIA, 6.5%, 2016 $1,450 $1,796,231
- ----------------------------------------------------------------------------------------------
Northwest Parkway Public Highway Authority Co. Rev.,
Capital Appreciation "B", AMBAC, 0%, 2018 750 369,203
- ----------------------------------------------------------------------------------------------
San Joaquin Hills, CA, Transportation Corridor Agency,
Toll Road Rev., 0%, 2009(++) 1,000 877,530
- ----------------------------------------------------------------------------------------------
Triborough Bridge & Tunnel Authority, NY, 5.5%, 2017(++) 3,000 3,518,550
- ----------------------------------------------------------------------------------------------
$6,561,514
- ----------------------------------------------------------------------------------------------
Transportation - Special Tax - 3.0%
- ----------------------------------------------------------------------------------------------
Allegheny County, PA, Port Authority Special Rev., MBIA,
6.25%, 2017(++) $1,000 $1,188,600
- ----------------------------------------------------------------------------------------------
Dallas, TX, Rapid Transit, AMBAC, 5.375%, 2016 - 2017 1,000 1,107,735
- ----------------------------------------------------------------------------------------------
New Jersey Economic Development Authority Rev.,
Transportation Project Sublease "A", FSA, 6%, 2016(++) 325 381,404
- ----------------------------------------------------------------------------------------------
Pennsylvania State Turnpike Commission Oil, "A", AMBAC,
5.25%, 2018 850 928,727
- ----------------------------------------------------------------------------------------------
Pennsylvania State Turnpike Commission Oil, "A", AMBAC,
5.25%, 2018(++) 1,150 1,267,013
- ----------------------------------------------------------------------------------------------
Regional Transportation Authority, IL, FSA, 5.75%, 2017 5,000 5,915,600
- ----------------------------------------------------------------------------------------------
$10,789,079
- ----------------------------------------------------------------------------------------------
Universities - Colleges - 5.1%
- ----------------------------------------------------------------------------------------------
Amherst, NY, Industrial Development Agency Rev. (Daemen
College), 6%, 2021 $1,000 $1,059,600
- ----------------------------------------------------------------------------------------------
California Education Facilities Authority Rev. (L.A.
College of Chiropractic), 5.6%, 2017 250 240,503
- ----------------------------------------------------------------------------------------------
Houston, TX, Community College Systems, MBIA, 7.875%,
2025 1,650 2,166,500
- ----------------------------------------------------------------------------------------------
Islip, NY, Community Development Agency Rev. (New York
Institute of Technology), 7.5%, 2026(++) 2,000 2,265,480
- ----------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Boston
University), XLCA, 6%, 2059 1,250 1,482,813
- ----------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Massachusetts College of Pharmacy), 6.625%, 2020 100 109,319
- ----------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev., College
Issue, "B", XLCA, 5.25%, 2033 2,000 2,105,080
- ----------------------------------------------------------------------------------------------
Northern Illinois University Rev., Auxiliary Facilities
Systems, AMBAC, 5.875%, 2018 1,370 1,559,060
- ----------------------------------------------------------------------------------------------
Savannah, GA, Economic Development Authority Rev.
(College of Art & Design, Inc.), 6.5%, 2013(++) 500 560,305
- ----------------------------------------------------------------------------------------------
St. Joseph County, IN, Educational Facilities Rev.
(University of Notre Dame), 6.5%, 2026 1,000 1,273,830
- ----------------------------------------------------------------------------------------------
Tulsa, OK, Industrial Authority Rev. (University of
Tulsa), "A", MBIA, 6%, 2016 1,250 1,518,475
- ----------------------------------------------------------------------------------------------
Upland, IN, Economic Development Rev. (Taylor
University), 6%, 2018 435 486,643
- ----------------------------------------------------------------------------------------------
Upland, IN, Economic Development Rev. (Taylor
University), 6.25%, 2023 520 568,844
- ----------------------------------------------------------------------------------------------
Virginia College Building Authority, VA, Public Higher
Education Financing, "A", 5.75%, 2019 2,295 2,622,060
- ----------------------------------------------------------------------------------------------
$18,018,512
- ----------------------------------------------------------------------------------------------
Universities - Secondary Schools - 1.7%
- ----------------------------------------------------------------------------------------------
California Statewide Community Development Authority
(Escondido Charter High School), 7.5%, 2036 $500 $508,430
- ----------------------------------------------------------------------------------------------
Clark County, NV, Economic Development Rev. (Alexander
Dawson School), 5.5%, 2020 1,500 1,568,715
- ----------------------------------------------------------------------------------------------
Maine Finance Authority, Educational Rev. (Waynflete
School), 6.4%, 2019 1,000 1,085,710
- ----------------------------------------------------------------------------------------------
Maine Finance Authority, Educational Rev. (Waynflete
School), 6.5%, 2029 1,000 1,073,750
- ----------------------------------------------------------------------------------------------
Michigan Municipal Bond Authority Rev. (Detroit Academy
of Arts & Sciences), 8%, 2031 300 295,959
- ----------------------------------------------------------------------------------------------
Michigan Municipal Bond Authority Rev. (YMCA Service
Learning Academy), 7.625%, 2021 400 405,932
- ----------------------------------------------------------------------------------------------
New Hampshire Health & Education (Derryfield School),
6.5%, 2010 425 436,730
- ----------------------------------------------------------------------------------------------
Pima County, AZ, Industrial Development Authority,
6.75%, 2031 500 508,985
- ----------------------------------------------------------------------------------------------
$5,884,211
- ----------------------------------------------------------------------------------------------
Utilities - Cogeneration - 1.5%
- ----------------------------------------------------------------------------------------------
Carbon County, PA, Industrial Development Authority Rev.
(Panther Creek Partners), 6.65%, 2010 $700 $766,248
- ----------------------------------------------------------------------------------------------
Klamath Falls, OR, Electric Rev. (Klamath Cogeneration),
6%, 2025 2,000 1,996,980
- ----------------------------------------------------------------------------------------------
Mecklenburg County, VA, Industrial Development Authority
Rev. (UAE Mecklenburg, LP), 6.5%, 2017 700 719,446
- ----------------------------------------------------------------------------------------------
Pittsylvania County, VA, Industrial Development Authority
Rev. (Multi-trade of Pittsylvania), 7.5%, 2014 2,000 2,007,480
- ----------------------------------------------------------------------------------------------
$5,490,154
- ----------------------------------------------------------------------------------------------
Utilities - Investor Owned - 4.1%
- ----------------------------------------------------------------------------------------------
Apache County, AZ, Industrial Development Authority,
Pollution Control Rev. (Tuscon Electric Power Co.),
5.875%, 2033 $1,000 $977,680
- ----------------------------------------------------------------------------------------------
Brazos River Authority, Pollution Control Rev. (TXU
Corp.), 6.3%, 2032 250 262,645
- ----------------------------------------------------------------------------------------------
California Pollution Control Financing Authority,
Pollution Control Rev. (Pacific Gas & Electric Co.),
5.85%, 2023 350 350,077
- ----------------------------------------------------------------------------------------------
California Pollution Control Financing Authority,
Pollution Control Rev. (Pacific Gas & Electric Co.),
MBIA, 5.35%, 2016 1,600 1,749,728
- ----------------------------------------------------------------------------------------------
California Pollution Control Financing Authority,
Pollution Control Rev. (Southern California Edison Co.),
6.4%, 2024 500 507,535
- ----------------------------------------------------------------------------------------------
Connecticut Development Authority, Pollution Control Rev.
(Connecticut Light & Power Co.), 5.85%, 2028 1,000 1,055,190
- ----------------------------------------------------------------------------------------------
Farmington, NM, Pollution Control Rev. (New Mexico Public
Service), 6.3%, 2016 565 590,617
- ----------------------------------------------------------------------------------------------
Farmington, NM, Pollution Control Rev. (New Mexico Public
Service), 5.8%, 2022 500 511,250
- ----------------------------------------------------------------------------------------------
Farmington, NM, Pollution Control Rev. (New Mexico Public
Service), 6.375%, 2022 1,000 1,058,420
- ----------------------------------------------------------------------------------------------
Matagorda County, TX, Pollution Control Rev. (Central
Power & Light Co.), 4.55%, 2029 1,000 1,044,890
- ----------------------------------------------------------------------------------------------
Matagorda County, TX, Pollution Control Rev. (Reliant
Energy), 5.95%, 2030 750 743,175
- ----------------------------------------------------------------------------------------------
New Hampshire Industrial Development Authority, Pollution
Control (CT Light and Power), 5.9%, 2016 500 535,250
- ----------------------------------------------------------------------------------------------
Pima County, AZ, Industrial Development Authority Rev.
(Tucson Electric Power Co.), 6.1%, 2025 2,000 1,955,100
- ----------------------------------------------------------------------------------------------
Port Morrow, OR, Pollution Control Rev. (Portland General
Electric), 5.2%, 2033 350 378,749
- ----------------------------------------------------------------------------------------------
Sabine River Authority, TX, Pollution Control Rev. (TXU
Electric Co.) "A", 5.5%, 2022 500 543,905
- ----------------------------------------------------------------------------------------------
West Feliciana Parish, LA, Pollution Control Rev. (Energy
Gulf States), 6.6%, 2028 1,665 1,699,998
- ----------------------------------------------------------------------------------------------
West Feliciana Parish, LA, Pollution Control Rev. (Gulf
States Utilities), 7.7%, 2014 450 459,581
- ----------------------------------------------------------------------------------------------
$14,423,790
- ----------------------------------------------------------------------------------------------
Utilities - Municipal Owned - 6.4%
- ----------------------------------------------------------------------------------------------
Austin, TX, Utility Systems Rev., AMBAC, 6.75%, 2011 $1,500 $1,847,265
- ----------------------------------------------------------------------------------------------
California State, Department of Water Resources Power
Supply Rev., "A", 5.125%, 2018 750 788,775
- ----------------------------------------------------------------------------------------------
Georgia Municipal Electric Power Authority Rev., MBIA,
6.375%, 2016 2,000 2,477,120
- ----------------------------------------------------------------------------------------------
Georgia Municipal Electric Power Authority Rev., MBIA,
6.5%, 2020 7,350 9,272,739
- ----------------------------------------------------------------------------------------------
Intermountain Power Agency, UT, "A", MBIA, 5%, 2019 2,050 2,149,118
- ----------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, Catawba Electric
Rev., 6.375%, 2013 750 855,878
- ----------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, Catawba Electric
Rev., MBIA, 7%, 2007 3,250 3,694,860
- ----------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, ROLs, MBIA,
9.358%, 2019+(+) 1,500 1,761,090
- ----------------------------------------------------------------------------------------------
$22,846,845
- ----------------------------------------------------------------------------------------------
Water & Sewer Utility Revenue - 4.6%
- ----------------------------------------------------------------------------------------------
Atlanta, GA, Water & Wastewater Rev., RITES, FGIC,
9.4853%, 2016+(+) $1,000 $1,341,340
- ----------------------------------------------------------------------------------------------
Forsyth County, GA, Water & Sewage Authority, 6.25%, 2020(++) 1,170 1,406,785
- ----------------------------------------------------------------------------------------------
Las Vegas Valley, NV, Water District Refunding & Water
Improvement, "A", FGIC, 5%, 2032 575 594,251
- ----------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority, 6.5%, 2019 5,965 7,366,298
- ----------------------------------------------------------------------------------------------
New York State Environmental Facilities, 5%, 2016(++) 1,000 1,085,184
- ----------------------------------------------------------------------------------------------
Pittsburgh, PA, Water & Sewer Authority Rev., "C", FSA,
5.25%, 2022 2,000 2,095,380
- ----------------------------------------------------------------------------------------------
Pittsburgh, PA, Water & Sewer Authority Rev., FGIC,
0%, 2017 - 2018 4,600 2,465,439
- ----------------------------------------------------------------------------------------------
$16,354,677
- ----------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $321,955,038) $350,945,130
- ----------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.5%
- ----------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), due 4/07/04 $100 $100,000
- ----------------------------------------------------------------------------------------------
Bay Area Toll Authority, CA, Toll Bridge Rev. "A",
due 4/07/04 900 900,000
- ----------------------------------------------------------------------------------------------
Illinois Development Finance Authority Rev. (Jewish Fed
Met Chicago), due 4/01/04 700 700,000
- ----------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority, due 4/07/04 200 200,000
- ----------------------------------------------------------------------------------------------
Pinellas County, FL, Health Facilities Authority Rev.,
Pooled Hospital Loan Program, due 4/01/04 100 100,000
- ----------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost,
$2,000,000) $2,000,000
- ----------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $323,955,038) $352,945,130
- ----------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.6% 1,954,477
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $354,899,607
- ----------------------------------------------------------------------------------------------
+ Restricted security.
(+) Inverse floating rate security.
(++) Refunded bond.
## SEC Rule 144A restriction.
** Non-income producing security - in default.
The following abbreviations for insurers and inverse floater are used in the Portfolio of
Investments and are defined:
Insurers Inverse Floaters
AMBAC = AMBAC Indemnity Corp. RITES = Residual Interest Tax-Exempt Security
CONNIE LEE = Connie Lee Insurance Co. ROLS = Residual Option Longs
FGIC = Financial Guaranty Insurance Co.
FSA = Financial Security Assurance Inc.
GNMA = Government National Mortgage Assn.
MBIA = Municipal Bond Investors Corp.
PSF = Permanent School Fund
XLCA = XL Capital Insurance Co.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------------------------
This statement represents your fund's balance sheet, which details the assets and liabilities
composing the total value of your fund.
AT 3/31/04
ASSETS
Investments, at value (identified cost, $323,955,038) $352,945,130
- --------------------------------------------------------------------------------------------------
Cash 126,734
- --------------------------------------------------------------------------------------------------
Receivable for investments sold 391,114
- --------------------------------------------------------------------------------------------------
Receivable for fund shares sold 429,029
- --------------------------------------------------------------------------------------------------
Interest receivable 5,192,874
- --------------------------------------------------------------------------------------------------
Other assets 5,093
- --------------------------------------------------------------------------------------------------
Total assets $359,089,974
- --------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable $1,347,887
- --------------------------------------------------------------------------------------------------
Payable for investments purchased 523,096
- --------------------------------------------------------------------------------------------------
Payable for fund shares reacquired 1,173,275
- --------------------------------------------------------------------------------------------------
Unrealized depreciation on interest rate swap agreements 410,275
- --------------------------------------------------------------------------------------------------
Unrealized depreciation on rate lock swap agreements 604,465
- --------------------------------------------------------------------------------------------------
Payable to affiliates
- --------------------------------------------------------------------------------------------------
Management fee 2,911
- --------------------------------------------------------------------------------------------------
Shareholder servicing costs 6,925
- --------------------------------------------------------------------------------------------------
Distribution and service fee 4,283
- --------------------------------------------------------------------------------------------------
Administrative fee 160
- --------------------------------------------------------------------------------------------------
Accrued expenses and other liabilities 117,090
- --------------------------------------------------------------------------------------------------
Total liabilities $4,190,367
- --------------------------------------------------------------------------------------------------
Net assets $354,899,607
- --------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital $333,565,802
- --------------------------------------------------------------------------------------------------
Unrealized appreciation on investments 27,975,352
- --------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (6,065,645)
- --------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income (575,902)
- --------------------------------------------------------------------------------------------------
Total $354,899,607
- --------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 40,755,722
- --------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
Class A shares
Net assets $264,797,121
- --------------------------------------------------------------------------------------------------
Shares outstanding 30,423,660
- --------------------------------------------------------------------------------------------------
Net asset value per share $8.70
- --------------------------------------------------------------------------------------------------
Offering price per share (100/95.25X$8.70) $9.13
- --------------------------------------------------------------------------------------------------
Class B shares
Net assets $52,594,210
- --------------------------------------------------------------------------------------------------
Shares outstanding 6,034,345
- --------------------------------------------------------------------------------------------------
Net asset value and offering price per share $8.72
- --------------------------------------------------------------------------------------------------
Class C shares
Net assets $37,508,276
- --------------------------------------------------------------------------------------------------
Shares outstanding 4,297,717
- --------------------------------------------------------------------------------------------------
Net asset value and offering price per share $8.73
- --------------------------------------------------------------------------------------------------
On sales of $100,000 or more, the price of Class A shares is reduced. A contingent deferred
sales charge may be imposed on redemptions of Class A shares.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------------------------
This statement describes how much your fund received in investment income and
paid in expenses. It also describes any gains and/or losses generated by fund
operations.
FOR YEAR ENDED 3/31/04
NET INVESTMENT INCOME (LOSS)
Interest income $20,967,048
- --------------------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------------------
Management fee $2,023,439
- --------------------------------------------------------------------------------------------------
Trustees' compensation 15,444
- --------------------------------------------------------------------------------------------------
Shareholder servicing costs 523,400
- --------------------------------------------------------------------------------------------------
Service fee (Class A) 677,531
- --------------------------------------------------------------------------------------------------
Distribution and service fee (Class B) 568,149
- --------------------------------------------------------------------------------------------------
Distribution and service fee (Class C) 396,835
- --------------------------------------------------------------------------------------------------
Administrative fee 36,295
- --------------------------------------------------------------------------------------------------
Custodian fee 128,905
- --------------------------------------------------------------------------------------------------
Printing 47,014
- --------------------------------------------------------------------------------------------------
Postage 18,187
- --------------------------------------------------------------------------------------------------
Auditing fees 37,724
- --------------------------------------------------------------------------------------------------
Legal fees 4,452
- --------------------------------------------------------------------------------------------------
Miscellaneous 82,241
- --------------------------------------------------------------------------------------------------
Total expenses $4,559,616
- --------------------------------------------------------------------------------------------------
Fees paid indirectly (3,458)
- --------------------------------------------------------------------------------------------------
Reduction of expenses by investment adviser (583,761)
- --------------------------------------------------------------------------------------------------
Net expenses $3,972,397
- --------------------------------------------------------------------------------------------------
Net investment income $16,994,651
- --------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized loss (identified cost basis)
- --------------------------------------------------------------------------------------------------
Investment transactions $(768,107)
- --------------------------------------------------------------------------------------------------
Swap transactions (914,106)
- --------------------------------------------------------------------------------------------------
Net realized loss on investments $(1,682,213)
- --------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
- --------------------------------------------------------------------------------------------------
Investments $8,952,464
- --------------------------------------------------------------------------------------------------
Swap transactions (168,327)
- --------------------------------------------------------------------------------------------------
Net unrealized gain on investments $8,784,137
- --------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $7,101,924
- --------------------------------------------------------------------------------------------------
Increase in net assets from operations $24,096,575
- --------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------------------------
This statement describes the increases and/or decreases in net assets resulting from
operations, any distributions, and any shareholder transactions.
FOR YEAR ENDED 3/31 2004 2003
INCREASE IN NET ASSETS
OPERATIONS
Net investment income $16,994,651 $17,698,859
- -------------------------------------------------------------------------------------------------
Net realized loss on investments (1,682,213) (2,870,156)
- -------------------------------------------------------------------------------------------------
Net unrealized gain on investments 8,784,137 13,724,621
- --------------------------------------------------------- ------------ ------------
Increase in net assets from operations $24,096,575 $28,553,324
- --------------------------------------------------------- ------------ ------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
- -------------------------------------------------------------------------------------------------
Class A $(13,264,818) $(14,303,373)
- -------------------------------------------------------------------------------------------------
Class B (2,354,471) (2,694,683)
- -------------------------------------------------------------------------------------------------
Class C (1,644,710) (1,663,610)
- --------------------------------------------------------- ------------ ------------
Total distributions declared to shareholders $(17,263,999) $(18,661,666)
- --------------------------------------------------------- ------------ ------------
Net decrease in net assets from fund
share transactions $(25,385,914) $(10,929,973)
- --------------------------------------------------------- ------------ ------------
Total decrease in net assets $(18,553,338) $(1,038,315)
- --------------------------------------------------------- ------------ ------------
NET ASSETS
At beginning of period $373,452,945 $374,491,260
- -------------------------------------------------------------------------------------------------
At end of period (including accumulated distributions in
excess of net investment income of $575,902 and $729,715,
respectively) $354,899,607 $373,452,945
- -------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------
The financial highlights table is intended to help you understand the fund's financial performance for the past 5 years (or,
if shorter, the period of the fund's operation). Certain information reflects financial results for a single fund share. The
total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund
(assuming reinvestment of all distributions) held for the entire period. This information has been audited by the fund's
independent auditors, whose report, together with the fund's financial statements, are included in this report.
FOR YEAR ENDED 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $8.54 $8.32 $8.54 $8.33 $8.97
- ------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS(S)(S)#
Net investment income(S) $0.41 $0.41 $0.44 $0.46 $0.48
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 0.17 0.25 (0.20) 0.27 (0.59)
- ---------------------------------------------- ------ ------ ------ ------ -------
Total from investment operations $0.58 $0.66 $0.24 $0.73 $(0.11)
- ---------------------------------------------- ------ ------ ------ ------ -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.42) $(0.44) $(0.46) $(0.47) $(0.47)
- ------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- -- (0.02) (0.06)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on
investments -- -- -- (0.03) --
- ---------------------------------------------- ------ ------ ------ ------ -------
Total distributions declared to
shareholders $(0.42) $(0.44) $(0.46) $(0.52) $(0.53)
- ---------------------------------------------- ------ ------ ------ ------ -------
Net asset value, end of period $8.70 $8.54 $8.32 $8.54 $8.33
- ---------------------------------------------- ------ ------ ------ ------ -------
Total return (%)(+) 6.94 8.00 2.78 9.06 (1.15)
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA(S):
Expenses## 0.88 0.90 0.91 0.89 0.88
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.80 4.85 5.12 5.55 5.66
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 9 13 15 15 57
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $264,797 $274,442 $276,719 $255,799 $217,880
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.40 $0.40 $0.41 $0.44 $0.45
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS):
Expenses## 1.04 1.05 1.15 1.20 1.20
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.64 4.70 4.88 5.24 5.34
- ------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002 was to increase net investment income per share and decrease net realized and unrealized gains
and losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of
net investment income to average net assets increased by $0.02%. Per share, ratios, and supplemental data for periods
prior to April 1, 2001 have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the
results would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
FOR YEAR ENDED 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $8.55 $8.33 $8.55 $8.34 $8.98
- ------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS(S)(S)#
Net investment income(S) $0.35 $0.35 $0.37 $0.40 $0.42
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 0.18 0.24 (0.20) 0.27 (0.59)
- ---------------------------------------------- ------ ------ ------ ------ -------
Total from investment operations $0.53 $0.59 $0.17 $0.67 $(0.17)
- ---------------------------------------------- ------ ------ ------ ------ -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.36) $(0.37) $(0.39) $(0.41) $(0.41)
- ------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- -- (0.02) (0.06)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on
investments -- -- -- (0.03) --
- ---------------------------------------------- ------ ------ ------ ------ -------
Total distributions declared to
shareholders $(0.36) $(0.37) $(0.39) $(0.46) $(0.47)
- ---------------------------------------------- ------ ------ ------ ------ -------
Net asset value, end of period $8.72 $8.55 $8.33 $8.55 $8.34
- ---------------------------------------------- ------ ------ ------ ------ -------
Total return (%) 6.27 7.19 2.00 8.24 (1.89)
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA(S):
Expenses## 1.63 1.65 1.66 1.64 1.63
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.05 4.10 4.37 4.82 4.89
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 9 13 15 15 57
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $52,594 $59,591 $61,627 $75,858 $93,656
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.34 $0.34 $0.35 $0.38 $0.39
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS):
Expenses## 1.79 1.80 1.90 1.95 1.95
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.89 3.95 4.13 4.51 4.57
- ------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains
and losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of
net investment income to average net assets increased by $0.02%. Per share, ratios, and supplemental data for periods
prior to April 1, 2001 have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
FOR YEAR ENDED 3/31
CLASS C 2004 2003 2002 2001 2000
Net asset value, beginning of period $8.56 $8.34 $8.56 $8.35 $8.99
- ------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS(S)(S)#
Net investment income(S) $0.35 $0.35 $0.37 $0.40 $0.42
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 0.18 0.24 (0.20) 0.27 (0.59)
- ---------------------------------------------- ------ ------ ------ ------ -------
Total from investment operations $0.53 $0.59 $0.17 $0.67 $(0.17)
- ---------------------------------------------- ------ ------ ------ ------ -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.36) $(0.37) $(0.39) $(0.41) $(0.41)
- ------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- -- (0.02) (0.06)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on
investments -- -- -- (0.03) --
- ---------------------------------------------- ------ ------ ------ ------ -------
Total distributions declared to
shareholders $(0.36) $(0.37) $(0.39) $(0.46) $(0.47)
- ---------------------------------------------- ------ ------ ------ ------ -------
Net asset value, end of period $8.73 $8.56 $8.34 $8.56 $8.35
- ---------------------------------------------- ------ ------ ------ ------ -------
Total return (%) 6.27 7.18 2.00 8.23 (1.89)
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA(S):
Expenses## 1.63 1.65 1.66 1.64 1.63
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.05 4.10 4.37 4.80 4.89
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 9 13 15 15 57
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $37,508 $39,420 $36,146 $29,257 $26,037
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for certain of the periods indicated. If this fee had
been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.34 $0.34 $0.35 $0.37 $0.39
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS):
Expenses## 1.79 1.80 1.90 1.95 1.95
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.89 3.95 4.13 4.49 4.57
- ------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002 was to increase net investment income per share and decrease net realized and unrealized gains
and losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of
net investment income to average net assets increased by $0.02%. Per share, ratios, and supplemental data for periods
prior to April 1, 2001 have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
(1) BUSINESS AND ORGANIZATION
MFS Municipal Income Fund (the fund) is a diversified series of MFS Municipal
Series Trust (the trust). The trust is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL - The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
Municipal securities backed by current or anticipated revenues from a specific
project or specific assets can be negatively affected by the discontinuance of
the taxation supporting the projects or assets or the inability to collect
revenues for the project or from the assets. If the Internal Revenue Service
determines an issuer of a municipal security has not complied with applicable
tax requirements, interest from the security could become taxable and the
security could decline in value.
INVESTMENT VALUATIONS - The fund uses independent pricing services approved by
the Board of Trustees wherever possible to value its portfolio securities.
Portfolio securities are valued at current market prices where current market
prices are readily available, or the fund may fair value portfolio securities
under the direction of the Board of Trustees when a determination is made that
current market prices are not readily available. Bonds and other fixed income
securities (other than short-term obligations) in the fund's portfolio are
valued at an evaluated bid price as reported by an independent pricing service,
or to the extent a valuation is not reported by a pricing service, such
securities are valued on the basis of quotes from brokers and dealers. Prices
obtained from pricing services utilize both dealer-supplied valuations and
electronic data processing techniques which take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics,
and other market data without exclusive reliance upon quoted prices or exchange
or over-the-counter prices, since such valuations are believed to reflect more
accurately the fair value of such securities. Bonds and other fixed income
securities for which it is determined that current market prices are not
readily available will be fair valued under the direction of the Board of
Trustees. Short-term obligations with a remaining maturity in excess of 60 days
will be valued upon dealer-supplied valuations. All other short-term
obligations in the fund's portfolio are valued at amortized cost, which
constitutes market value as determined by the Board of Trustees.
SWAP AGREEMENTS - The fund may enter into swap agreements. A swap is an
exchange of cash payments between the fund and another party, which is based on
a specific financial index. Cash payments are exchanged at specified intervals
and the expected income or expense is recorded on the accrual basis. The value
of the swap is adjusted daily and the change in value is recorded as unrealized
appreciation or depreciation. Risks may arise upon entering into these
agreements from the potential inability of counterparties to meet the terms of
their contract and from unanticipated changes in the value of the financial
index on which the swap agreement is based. The fund uses swaps for both
hedging and non-hedging purposes. For hedging purposes, the fund may use swaps
to reduce its exposure to interest rate fluctuations. For non-hedging purposes,
the fund may use swaps to take a position on anticipated changes in the
underlying financial index.
INTEREST RATE SWAP AGREEMENTS - Interest rate swaps are agreements to exchange
cash flows periodically based on a notional principal amount, for example the
exchange of fixed rate interest payments for floating rate interest payments
which are based on a specific financial index or the exchange of two distinct
floating rate payments. The net receivable or payable associated with these
payments is accrued daily and is recorded as net interest income or expense.
For financial statement purposes, the net interest income or expense
periodically recognized for an interest rate swap is recorded in the same line
item as any unrealized and realized gains or losses recognized for that
instrument. The primary risk associated with interest rate swaps is that
unfavorable changes in the fluctuation of interest rates could adversely impact
the fund.
RATE LOCK SWAP AGREEMENTS - The fund may enter into rate lock swaps, which are
used to reduce the interest rate risk of the portfolio. A rate lock swap is a
payment or receipt of cash on a specified future date, calculated as the
difference between the strike rate and a specific index yield on that date. The
payment received or made at the end of the measurement period is recorded as a
realized gain or loss in the Statement of Operations. The value of the swap is
adjusted daily and the change in value is recorded as unrealized appreciation
or depreciation.
INVESTMENT TRANSACTIONS AND INCOME - Investment transactions are recorded on
the trade date. Interest income is recorded on the accrual basis. All premium
and discount is amortized or accreted for financial statement purposes in
accordance with accounting principles generally accepted in the United States
of America. All premium and original issue discount is amortized or accreted
for tax reporting purposes as required by federal income tax regulations.
Legal fees and other related expenses incurred to preserve and protect the
value of a security owned are added to the cost of the security; other legal
fees are expensed. Capital infusions made directly to the security issuer,
which are generally non-recurring, incurred to protect or enhance the value of
high-yield debt securities, are reported as additions to the cost basis of the
security. Costs that are incurred to negotiate the terms or conditions of
capital infusions or that are expected to result in a plan of reorganization
are reported as realized losses. Ongoing costs incurred to protect or enhance
an investment, or costs incurred to pursue other claims or legal actions, are
expensed.
FEES PAID INDIRECTLY - The fund's custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by the
fund. This amount, for the year ended March 31, 2004, is shown as a reduction
of total expenses on the Statement of Operations.
TAX MATTERS AND DISTRIBUTIONS - The fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net tax-
exempt and taxable net income, including any net realized gain on investments.
Accordingly, no provision for federal income or excise tax is provided.
Distributions paid by the fund from net interest received on tax-exempt
municipal bonds are not includable by shareholders as gross income for federal
income tax purposes because the fund intends to meet certain requirements of
the Code applicable to regulated investment companies, which will enable the
fund to pay exempt-interest dividends. The portion of such interest, if any,
earned on private activity bonds issued after August 7, 1986 may be considered
a tax-preference item to shareholders.
Distributions to shareholders are recorded on the ex-dividend date. The fund
distinguishes between distributions on a tax basis and a financial reporting
basis and only distributions in excess of tax basis earnings and profits are
reported in the financial statements as distributions from paid-in capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits, which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or net realized gains. Common
types of book and tax differences that could occur include differences in
accounting for derivatives, capital losses, and amortization and accretion on
debt securities.
The tax character of distributions declared for the years ended March 31, 2004
and March 31, 2003 was as follows:
3/31/04 3/31/03
Distributions declared from tax
exempt income $17,263,999 $18,661,666
--------------------------------------------------------------
During the year ended March 31, 2004, accumulated distributions in excess of
net investment income decreased by $423,161, accumulated net realized loss on
investments increased by $394,539, and paid-in capital decreased by $28,622
due to differences between book and tax accounting for amortization and
accretion on debt securities, market discount, defaulted bonds, capital
losses, interest rate swaps, and a net operating loss. This change had no
effect on the net assets or net asset value per share.
At March 31, 2004, accumulated distributions in excess of net investment
income and realized loss on investments under book accounting were different
from tax accounting due to temporary differences in accounting for capital
losses, amortization and accretion on debt securities, and defaulted bonds.
As of March 31, 2004, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
Undistributed ordinary income $987,656
--------------------------------------------------------------
Capital loss carryforward (6,386,266)
--------------------------------------------------------------
Unrealized appreciation 28,233,998
--------------------------------------------------------------
Other temporary differences (1,501,583)
--------------------------------------------------------------
For federal income tax purposes, the capital loss carryforward may be applied
against any net taxable realized gains of each succeeding year until the
earlier of its utilization or expiration on March 31, 2010, ($1,199,142),
March 31, 2011 ($1,101,451), and March 31, 2012 ($4,085,673).
MULTIPLE CLASSES OF SHARES OF BENEFICIAL INTEREST - The fund offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the fund based on the value
of settled shares outstanding of each class, without distinction between share
classes. Dividends are declared separately for each class. Differences in per
share dividend rates are due to differences in separate class expenses
charged. Class B shares will convert to Class A shares approximately eight
years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER - The fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an annual rate of 0.55%
of the fund's average daily net assets. The investment adviser has
contractually agreed to waive a portion of its fee, which is shown as a
reduction of total expenses in the Statement of Operations. From April 1, 2003
to March 1, 2004, MFS reduced the fund's management fee to 0.40% of average
daily net assets. As part of the settlement agreement with the New York
Attorney General concerning market timing and related matters, MFS has agreed
to reduce the fund's management fee to 0.30% of average daily net assets for
the period March 1, 2004 through February 28, 2009. During this time period,
the Board of Trustees will continue to review the appropriateness of all
advisory fees in accordance with their oversight responsibilities. After
February 28, 2009 the management fee will be determined in accordance with
then existing review policies approved by the Board of Trustees overseeing the
fund. Management fees incurred for the year ended March 31, 2004 were 0.39% of
average daily net assets on an annualized basis.
The fund pays compensation to the Independent Trustees ("Trustees") in the form
of both a retainer and attendance fees, and pays no compensation directly to
its Trustees who are officers of the investment adviser, or to officers of the
fund, all of whom receive remuneration for their services to the fund from MFS.
Certain officers and Trustees of the fund are officers or directors of MFS, MFS
Fund Distributors, Inc. (MFD), and MFS Service Center, Inc. (MFSC). The fund
has an unfunded, defined benefit plan for retired independent Trustees.
Included in Trustees' compensation is a pension expense of $4,850 for retired
independent Trustees for the year ended March 31, 2004.
ADMINISTRATOR - MFS provides certain financial, legal, shareholder
communications, compliance, and other administrative services to certain funds
for which MFS acts as investment adviser. Under an administrative services
agreement between the funds and MFS, MFS is entitled to partial reimbursement
of the costs MFS incurs to provide these services, subject to review and
approval by the Board of Trustees. Each fund is allocated a portion of these
administrative costs based on its size and relative average net assets,
subject to a maximum amount, (i.e., each fund will pay the lesser of its
allocated costs or a maximum amount based on its average daily net assets).
For the year ended March 31, 2004, the maximum amount is based on the
following annual percentages of the fund's average daily net assets:
First $2 billion 0.0175%
--------------------------------------------------------------
Next $2.5 billion 0.0130%
--------------------------------------------------------------
Next $2.5 billion 0.0005%
--------------------------------------------------------------
In excess of $7 billion 0.0000%
--------------------------------------------------------------
For the year ended March 31, 2004, the fund paid MFS $36,295, equivalent to
0.0098% of average daily net assets, to partially reimburse MFS for the costs
of providing administrative services. The maximum amount that could have been
charged to the fund during the period for administrative costs equaled $64,665
or 0.0175 % of average daily net assets.
Effective April 1, 2004 the maximum amount is based on the following annual
percentages of the fund's average daily net assets:
First $2 billion 0.01120%
--------------------------------------------------------------
Next $2.5 billion 0.00832%
--------------------------------------------------------------
Next $2.5 billion 0.00032%
--------------------------------------------------------------
In excess of $7 billion 0.0000%
--------------------------------------------------------------
DISTRIBUTOR - MFD, a wholly owned subsidiary of MFS, as distributor, received
$71,437 for the year ended March 31, 2004, as its portion of the sales charge
on sales of Class A shares of the fund.
The Trustees have adopted a distribution plan for Class A, Class B, and Class
C shares pursuant to Rule 12b-1 of the Investment Company Act of 1940
as follows:
The fund's distribution plan provides that the fund will pay MFD an annual
percentage of its average daily net assets attributable to certain share
classes in order that MFD may pay expenses on behalf of the fund related to
the distribution and servicing of its shares. These expenses include a service
fee paid to each securities dealer that enters into a sales agreement with MFD
based on the average daily net assets of accounts attributable to such
dealers. These fees are calculated based on each class' average daily net
assets. The maximum distribution and service fees for each class of shares are
as follows:
CLASS A CLASS B CLASS C
Distribution Fee 0.10% 0.75% 0.75%
- -------------------------------------------------------------------------------
Service Fee 0.25% 0.25% 0.25%
- -------------------------------------------------------------------------------
Total Distribution Plan 0.35% 1.00% 1.00%
- -------------------------------------------------------------------------------
MFD retains the service fee for accounts not attributable to a securities
dealer, which for the year ended March 31, 2004, amounted to:
CLASS A CLASS B CLASS C
Service Fee Retained by MFD $23,019 $548 $131
- -------------------------------------------------------------------------------
Payment of the 0.10% per annum Class A distribution fee will be implemented on
such a date as the Trustees of the Trust may determine.
Fees incurred under the distribution plan during the year ended March 31,
2004, were as follows:
CLASS A CLASS B CLASS C
Effective Annual Percentage Rates 0.25% 1.00% 1.00%
- -------------------------------------------------------------------------------
Certain Class A and Class C shares are subject to a contingent deferred sales
charge in the event of a shareholder redemption within, for Class A shares, 12
months following the purchase, and, for Class C shares, the first year from
the end of the calendar month of purchase. A contingent deferred sales charge
is imposed on shareholder redemptions of Class B shares in the event of a
shareholder redemption within six years from the end of the calendar month of
purchase. MFD receives all contingent deferred sales charges. Contingent
deferred sales charges imposed during the year ended March 31, 2004, were
as follows:
CLASS A CLASS B CLASS C
Contingent Deferred Sales Charges Imposed $200 $89,676 $13,532
- -------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT - Included in shareholder servicing costs is a fee
paid to MFSC, a wholly owned subsidiary of MFS, for its services as
shareholder servicing agent. The fee, which is calculated as a percentage of
the fund's average daily net assets is set periodically under the supervision
of the funds' Trustees. As of March 31, 2004, the fee is set at 0.11% of the
fund's average daily net assets. Effective April 1, 2004, the fee is set at
0.10% of the fund's average daily net assets. For the year ended March 31,
2004, the fund paid MFSC a fee of $404,262 for shareholder services which
amounted to 0.11% of the fund's average net assets. Also included in
shareholder servicing costs are out-of-pocket expenses, paid to MFSC, which
amounted to $38,784 for the year ended March 31, 2004 as well as other
expenses paid to unaffiliated vendors.
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations, aggregated
$31,386,264 and $57,641,056, respectively.
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the fund, as computed on a federal income tax basis, are
as follows:
Aggregate cost $323,696,392
--------------------------------------------------------------
Gross unrealized appreciation $34,185,694
--------------------------------------------------------------
Gross unrealized depreciation (4,936,956)
--------------------------------------------------------------
Net unrealized appreciation $29,248,738
--------------------------------------------------------------
(5) SHARES OF BENEFICIAL INTEREST
The fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
fund shares were as follows:
Year ended 3/31/04 Year ended 3/31/03
SHARES AMOUNT SHARES AMOUNT
CLASS A SHARES
Shares sold 3,923,574 $33,678,836 4,450,257 $37,896,886
- ----------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 867,292 7,450,143 945,048 8,059,984
- ----------------------------------------------------------------------------------------------------------
Shares reacquired (6,505,143) (55,872,881) (6,507,096) (55,624,477)
- ----------------------------------------------------------------------------------------------------------
Net decrease (1,714,277) $(14,743,902) (1,111,791) $(9,667,607)
- ----------------------------------------------------------------------------------------------------------
CLASS B SHARES
Shares sold 534,325 $4,621,956 1,268,027 $10,847,882
- ----------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 133,556 1,149,141 158,423 1,354,185
- ----------------------------------------------------------------------------------------------------------
Shares reacquired (1,602,274) (13,788,797) (1,853,374) (15,811,734)
- ----------------------------------------------------------------------------------------------------------
Net decrease (934,393) $(8,017,700) (426,924) $(3,609,667)
- ----------------------------------------------------------------------------------------------------------
CLASS C SHARES
Shares sold 1,083,331 $9,355,388 1,278,255 $10,973,927
- ----------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 125,956 1,084,943 127,218 1,087,463
- ----------------------------------------------------------------------------------------------------------
Shares reacquired (1,515,353) (13,064,643) (1,133,632) (9,714,089)
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) (306,066) $(2,624,312) 271,841 $2,347,301
- ----------------------------------------------------------------------------------------------------------
(6) LINE OF CREDIT
The fund and other affiliated funds participate in an $800 million unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. Borrowings may be made for temporary financing needs. Interest is
charged to each fund, based on its borrowings, at a rate equal to the bank's
base rate plus 0.50%. In addition, a commitment fee, based on the average
daily, unused portion of the line of credit, is allocated among the
participating funds at the end of each calendar quarter. The commitment fee
allocated to the fund for the year ended March 31, 2004, was $2,445. The fund
had no borrowings during the year.
(7) FINANCIAL INSTRUMENTS
The fund trades financial instruments with off-balance-sheet risk in the
normal course of its investing activities in order to manage exposure to
market risks such as interest rates. These financial instruments include swap
agreements. The notional or contractual amounts of these instruments represent
the investment the fund has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
Swap Agreements
Interest Rate Swap Agreements
NOTIONAL PRINCIPAL CASH FLOWS UNREALIZED
AMOUNT OF CASH FLOWS PAID RECEIVED APPRECIATION
EXPIRATION CONTRACT (000) BY THE FUND BY THE FUND (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------------
11/15/04 4,000 Fixed - 1.945% Floating - 7 Day $(24,923)
BMA Swap Index
- -----------------------------------------------------------------------------------------------------------
10/31/12 3,750 Floating - 7 Day Floating - 3M $(18,674)
BMA Swap Index LIBOR
X 78.875%
- -----------------------------------------------------------------------------------------------------------
12/18/12 7,600 Floating - 7 Day Floating - 3M $(40,930)
BMA Swap Index LIBOR
X 78.75%
- -----------------------------------------------------------------------------------------------------------
10/27/14 5,985 Fixed - 3.444% Floating - 7 Day $82,408
BMA Swap Index
- -----------------------------------------------------------------------------------------------------------
11/9/14 5,985 Fixed - 3.73% Floating - 7 Day $(54,991)
BMA Swap Index
- -----------------------------------------------------------------------------------------------------------
6/23/19 3,000 Fixed - 4.23% Floating - 7 Day $(123,190)
BMA Swap Index
- -----------------------------------------------------------------------------------------------------------
7/14/19 2,000 Fixed - 4.137% Floating - 7 Day $(50,653)
BMA Swap Index
- -----------------------------------------------------------------------------------------------------------
8/4/19 2,500 Fixed - 4.039% Floating - 7 Day $(31,405)
BMA Swap Index
- -----------------------------------------------------------------------------------------------------------
4/7/24 4,000 Fixed - 4.159% Floating - 7 Day $(72,093)
BMA Swap Index
- -----------------------------------------------------------------------------------------------------------
10/27/34 3,150 Floating - 7 Day Fixed - 4.132% $(79,677)
BMA Swap Index
- -----------------------------------------------------------------------------------------------------------
11/9/34 3,150 Floating - 7 Day Fixed - 4.322% $3,853
BMA Swap Index
- -----------------------------------------------------------------------------------------------------------
$(410,275)
- -----------------------------------------------------------------------------------------------------------
Rate Lock Swap Agreements
NOTIONAL PRINCIPAL
AMOUNT OF UNREALIZED
CONTRACT (000) DESCRIPTION DEPRECIATION
- ----------------------------------------------------------------------------------------------------
4,000 Agreement with Merrill Lynch terminating April 7, $(233,505)
2004 to pay the difference between the notional
value and the market value of a bond with a 4.842%
coupon maturing on April 7, 2024 priced at a yield
to maturity equal to the MMD general obligation
yeild curve rate for the designated maturity year as
of the close of business on the termination date, if
negative (receive if positive).
- ----------------------------------------------------------------------------------------------------
2,500 Agreement with Merrill Lynch terminating April 13, $(229,392)
2004 to pay the difference between the notional
value and the market value of a bond with a 5.106%
coupon maturing on April 13, 2025 priced at a yield
to maturity equal to the MMD general obligation
yeild curve rate for the designated maturity year as
of the close of business on the termination date, if
negative (receive if positive).
- ----------------------------------------------------------------------------------------------------
1,600 Agreement with Goldman Sachs terminating April 14, $(141,568)
2004 to pay the difference between the notional
value and the market value of a bond with a 5.10%
coupon maturing on April 14, 2025 priced at a yield
to maturity equal to the MMD general obligation
yeild curve rate for the designated maturity year as
of the close of business on the termination date, if
negative (receive if positive).
- ----------------------------------------------------------------------------------------------------
Total $(604,465)
- ----------------------------------------------------------------------------------------------------
At March 31, 2004, the fund had sufficient cash and/or securities to cover any
commitments under these contracts.
(8) RESTRICTED SECURITIES
The fund may invest not more than 15% of its total assets in securities, which
are subject to legal or contractual restrictions on resale. At March 31, 2004,
the fund owned the following restricted securities, excluding securities
issued under Rule 144A, constituting 4.8% of net assets which may not be
publicly sold without registration under the Securities Act of 1933. The fund
does not have the right to demand that such securities be registered. The
value of these securities is determined by valuations furnished by dealers or
by an independent pricing service, or if not available, at fair value under
the direction of the Trustees.
SHARE/
PRINCIPAL
DATE OF AMOUNT
DESCRIPTION ACQUISITION (000 OMITTED) COST VALUE
Atlanta, GA, Water & Wastewater Rev.,
RITES, FGIC, 9.4853%, 2016 4/20/1999 1,000 $1,167,100 $1,341,340
- ---------------------------------------------------------------------------------------------------------
Chicago, IL (O'Hare International
Airport), RITES, FSA, 9.916%, 2022 8/21/2003 1,500 1,599,660 1,809,030
- ---------------------------------------------------------------------------------------------------------
Chicago, IL Public Building Commission
Rev., RITES, FGIC, 8.836%, 2016-2017 3/10/1999 2,750 2,957,100 3,497,325
- ---------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, ROLS, FGIC,
9.896%, 2015 7/15/2001 3,000 3,878,760 4,044,300
- ---------------------------------------------------------------------------------------------------------
Dudley-Charlton, MA, Regional School
District, RITES, FGIC, 9.031%, 2017 5/05/1999 1,495 1,615,945 1,917,637
- ---------------------------------------------------------------------------------------------------------
Houston, TX, Independent School
District, RITES, PSF, 8.985%, 2017 2/26/1999 2,325 2,440,831 2,723,180
- ---------------------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency,
ROLs, MBIA, 9.358%, 2019 10/28/1996 1,500 1,717,980 1,761,090
- ---------------------------------------------------------------------------------------------------------
Total $17,093,902
- ---------------------------------------------------------------------------------------------------------
(9) CONCENTRATION OF CREDIT RISK
At March 31, 2004, 42.0% of securities in the portfolio of investments are
backed by letters of credit or bond insurance of various financial
institutions and financial guaranty assurance agencies. The percentage of
investments insured by or supported (backed) by a letter of credit from any
one institution or agency did not exceed 15.2% of total investments.
(10) LEGAL PROCEEDINGS
On March 31, 2004, MFS settled an administrative proceeding regarding
disclosure of brokerage allocation practices in connection with fund sales.
Under the terms of the settlement, in which MFS neither admitted nor denied any
wrongdoing, MFS agreed to pay (one dollar) $1.00 in disgorgement and $50
million in penalty to certain MFS funds, pursuant to a plan to be approved by
an independent distribution consultant. The agreement with the SEC is reflected
in an order of the SEC. The settlement order states that MFS failed to
adequately disclose to the Boards of Trustees and to shareholders of the MFS
funds the specifics of its preferred arrangements with certain brokerage firms
selling MFS fund shares. The settlement order states that MFS had in place
policies designed to obtain best execution of all fund trades. As part of the
settlement, MFS has retained an independent compliance consultant to review the
completeness of its disclosure to fund trustees and to fund shareholders of
strategic alliances between MFS or its affiliates and broker- dealers and other
financial advisers who support the sale of fund shares. The brokerage
allocation practices which were the subject of this proceeding were
discontinued by MFS in November 2003.
In addition, in February, 2004, MFS reached agreement with the Securities and
Exchange Commission ("SEC"), the New York Attorney General ("NYAG") and the
Bureau of Securities Regulation of the State of New Hampshire ("NH") to settle
administrative proceedings alleging false and misleading information in certain
MFS fund prospectuses regarding market timing and related matters (the
"February Settlements"). These regulators alleged that prospectus language for
certain MFS funds was false and misleading because, although the prospectuses
for those funds in the regulators' view indicated that the funds prohibited
market timing, MFS did not limit trading activity in 11 domestic large cap
stock, high grade bond and money market funds. MFS' former Chief Executive
Officer, John W. Ballen, and former President, Kevin R. Parke, also reached
agreement with the SEC in which they agreed to, among other terms, monetary
fines and temporary suspensions from association with any investment adviser or
registered investment company. Messrs. Ballen and Parke have resigned their
positions with, and will not be returning to, MFS and the MFS funds. Under the
terms of the February Settlements, MFS and the executives neither admit nor
deny wrongdoing.
Under the terms of the February Settlements, a $225 million pool has been
established for distribution to shareholders in certain of the MFS funds
offered to retail investors ("Retail Funds"), which has been funded by MFS and
of which $50 million is characterized as a penalty. This pool will be
distributed in accordance with a methodology developed by an independent
distribution consultant in consultation with MFS and the Boards of Trustees of
the Retail Funds, and acceptable to the SEC. MFS has further agreed with the
NYAG to reduce its management fees in the aggregate amount of approximately $25
million annually over the next five years, and not to increase certain
management fees during this period. MFS has also paid an administrative fine to
NH in the amount of $1 million, which will be used for investor education
purposes (NH will retain $250,000 and $750,000 will be contributed to the North
American Securities Administrators Association's Investor Protection Trust). In
addition, under the terms of the February Settlements, MFS is in the process of
adopting certain governance changes and reviewing its policies and procedures.
Since December 2003, MFS, Sun Life Financial Inc., various MFS funds, the
Trustees of these MFS funds, and certain officers of MFS have been named as
defendants in multiple lawsuits filed in federal and state courts. The lawsuits
variously have been commenced as class actions or individual actions on behalf
of investors who purchased, held or redeemed shares of the funds during
specified periods, as class actions on behalf of participants in certain
retirement plan accounts, or as derivative actions on behalf of the MFS funds.
The lawsuits generally allege that some or all of the defendants (i) permitted
or acquiesced in market timing and/or late trading in some of the MFS funds,
inadequately disclosed MFS' internal policies concerning market timing and such
matters, and received excessive compensation as fiduciaries to the MFS funds,
or (ii) permitted or acquiesced in the improper use of fund assets by MFS to
support the distribution of fund shares and inadequately disclosed MFS' use of
fund assets in this manner. The actions assert that some or all of the
defendants violated the federal securities laws, including the Securities Act
of 1933 and the Securities Exchange Act of 1934, the Investment Company Act of
1940 and the Investment Advisers Act of 1940, the Employee Retirement Income
Security Act of 1974, as well as fiduciary duties and other violations of
common law. The lawsuits seek unspecified compensatory damages. Insofar as any
of the actions is appropriately brought derivatively on behalf of any of the
MFS funds, any recovery will inure to the benefit of the funds. The defendants
are reviewing the allegations of the multiple complaints and will respond
appropriately. Additional lawsuits based on similar allegations may be filed in
the future.
Any potential resolution of these matters may include, but not be limited to,
judgments or settlements for damages against MFS, the MFS funds, or any other
named defendant. As noted above, as part of the regulatory settlements, MFS has
established a restitution pool in the amount of $225 million to compensate
certain shareholders of the Retail Funds for damages that they allegedly
sustained as a result of market timing or late trading in certain of the funds,
and will pay $50 million to compensate certain MFS funds based upon the amount
of brokerage commissions allocated in recognition of fund sales. It is not
clear whether these amounts will be sufficient to compensate shareholders for
all of the damage they allegedly sustained, whether certain shareholders or
putative class members may have additional claims to compensation, or whether
the damages that may be awarded in any of the actions will exceed these
amounts. In the event the MFS funds incur any losses, costs or expenses in
connection with such lawsuits, the Boards of Trustees of the affected funds may
pursue claims on behalf of such funds against any party that may have liability
to the funds in respect thereof.
Review of these matters by the independent Trustees of the MFS funds and their
counsel is continuing. There can be no assurance that these regulatory actions
and lawsuits, or the adverse publicity associated with these developments, will
not result in increased fund redemptions, reduced sales of fund shares, or
other adverse consequences to the funds.
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- -------------------------------------------------------------------------------
To the Trustees of Muncipal Series Trust and the Shareholders of
MFS Municipal Income Fund:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of MFS Municipal Income Fund (one of the series
constituting MFS Municipal Series Trust) as of March 31, 2004, the related
statement of operations for the year then ended, the statement of changes in
net assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period then ended.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of the securities owned at March 31, 2004 by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of MFS Municipal
Income Fund as of March 31, 2004, the results of its operations, the changes in
its net assets, and its financial highlights for the respective stated periods
in conformity with accounting principles generally accepted in the United
States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 14, 2004
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TRUSTEES AND OFFICERS -- IDENTIFICATION AND BACKGROUND
- ----------------------------------------------------------------------------------------------------------------------------
The Trustees and officers of the Trust are listed below, together with their principal occupations during the past five
years. (Their titles may have varied during that period.) The business address of each Trustee and officer is 500 Boylston
Street, Boston, Massachusetts 02116.
PRINCIPAL OCCUPATIONS & OTHER
POSITION(s) HELD TRUSTEE/OFFICER DIRECTORSHIPS(2) DURING
NAME, DATE OF BIRTH WITH FUND SINCE(1) THE PAST FIVE YEARS
- ------------------- ---------------- --------------- -----------------------------
INTERESTED TRUSTEES
John W. Ballen(3) Trustee and President August 2001 until Massachusetts Financial Services Company,
(born 09/12/59) February 2004 Chief Executive Officer and Director (until
February 2004)
Robert J. Manning(3) Trustee and President February 2004 Massachusetts Financial Services Company,
(born 10/20/63) Chief Executive Officer, President, Chief
Investment Officer and Director
Kevin R. Parke(3) Trustee January 2002 until Massachusetts Financial Services Company,
(born 12/14/59) February 2004 President, Chief Investment Officer and
Director (until February 2004)
Robert C. Pozen(3) Trustee February 2004 Massachusetts Financial Services Company,
(born 08/08/46) Chairman (since February 2004); Harvard Law
School (education), John Olin Visiting
Professor (since July 2002); Secretary of
Economic Affairs, The Commonwealth of
Massachusetts (January 2002 to December
2002); Fidelity Investments, Vice Chairman
(June 2000 to December 2001); Fidelity
Management & Research Company (investment
adviser), President (March 1997 to July
2001); The Bank of New York (financial
services), Director; Bell Canada Enterprises
(telecommunications), Director; Telesat
(satellite communications), Director
Jeffrey L.Shames(3) Trustee October 1993 until Massachusetts Financial Services Company,
(born 06/02/55) February 2004 Chairman (until February 2004)
INDEPENDENT TRUSTEES
J. Atwood Ives Chairman February 1992 Private investor; KeySpan Corporation (energy
(born 05/01/36) related services), Director; Eastern
Enterprises (diversified services company),
Chairman, Trustee and Chief Executive Officer
(until November 2000)
Lawrence H. Cohn, M.D. Trustee August 1993 Brigham and Women's Hospital, Chief of
(born 03/11/37) Cardiac Surgery; Harvard Medical School,
Professor of Surgery
David H. Gunning Trustee January 2004 Cleveland-Cliffs, Inc. (mining products and
(born 05/30/42) service provider), Vice Chairman/ Director
(since April 2001); Encinitos Ventures
(private investment company), Principal (1997
to April 2001); Lincoln Electric Holdings,
Inc. (welding equipment manufacturer),
Director; Southwest Gas Corporation (natural
gas distribution company), Director
William R. Gutow Trustee December 1993 Private investor and real estate consultant;
(born 09/27/41) Capitol Entertainment Management Company
(video franchise), Vice Chairman
Amy B. Lane Trustee January 2004 Retired; Merrill Lynch & Co., Inc., Managing
(born 02/08/53) Director, Investment Banking Group (1997 to
February 2001); Borders Group, Inc. (book and
music retailer), Director; Federal Realty
Investment Trust (real estate investment
trust), Trustee
Lawrence T. Perera Trustee July 1981 Hemenway & Barnes (attorneys), Partner
(born 06/23/35)
William J. Poorvu Trustee August 1982 Private investor; Harvard University Graduate
(born 04/10/35) School of Business Administration, Class of
1961 Adjunct Professor in Entrepreneurship
Emeritus; CBL & Associates Properties, Inc.
(real estate investment trust), Director
J. Dale Sherratt Trustee August 1993 Insight Resources, Inc. (acquisition planning
(born 09/23/38) specialists), President; Wellfleet
Investments (investor in health care
companies), Managing General Partner (since
1993); Cambridge Nutraceuticals (professional
nutritional products), Chief Executive
Officer (until May 2001)
Elaine R. Smith Trustee February 1992 Independent health care industry consultant
(born 04/25/46)
Ward Smith Trustee October 1992 Private investor
(born 09/13/30)
OFFICERS
Robert J. Manning(3) President and Trustee February 2004 Massachusetts Financial Services Company,
(born 10/20/63) Chief Executive Officer, President, Chief
Investment Officer and Director.
John W. Ballen(3) President and Trustee August 2001 until Massachusetts Financial Services Company,
(born 09/12/59) February 2004 Chief Executive Officer and Director (until
February 2004)
James R. Bordewick, Jr.(3) Assistant Secretary September 1990 Massachusetts Financial Services Company,
(born 03/06/59) and Assistant Clerk Senior Vice President and Associate General
Counsel
Stephen E. Cavan(3) Secretary and Clerk December 1989 until Massachusetts Financial Services Company,
(born 11/06/53) March 2004 Senior Vice President, General Counsel and
Secretary (until March 2004)
Stephanie A. DeSisto(3) Assistant Treasurer May 2003 Massachusetts Financial Services Company,
(born 10/01/53) Vice President (since April 2003); Brown
Brothers Harriman & Co., Senior Vice
President (November 2002 to April 2003); ING
Groep N.V./Aeltus Investment Management,
Senior Vice President (prior to November
2002)
Robert R. Flaherty(3) Assistant Treasurer August 2000 Massachusetts Financial Services Company,
(born 09/18/63) Vice President (since August 2000); UAM Fund
Services, Senior Vice President (prior to
August 2000)
Richard M. Hisey(3) Treasurer August 2002 Massachusetts Financial Services Company,
(born 08/29/58) Senior Vice President (since July 2002); The
Bank of New York, Senior Vice President
(September 2000 to July 2002); Lexington
Global Asset Managers, Inc., Executive Vice
President and Chief Financial Officer (prior
to September 2000); Lexington Funds, Chief
Financial Officer (prior to September 2000)
Ellen Moynihan(3) Assistant Treasurer April 1997 Massachusetts Financial Services Company,
(born 11/13/57) Vice President
James O. Yost(3) Assistant Treasurer September 1990 Massachusetts Financial Services Company,
(born 06/12/60) Senior Vice President
- ------------------
(1) Date first appointed to serve as Trustee/Officer of an MFS fund. Each Trustee has served continuously since appointment
unless indicated otherwise.
(2) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., "public
companies").
(3) "Interested person" of MFS within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act) which is
the principal federal law governing investment companies like the series/the fund. The address of MFS is 500 Boylston
Street, Boston, Massachusetts 02116.
The Trust does not hold annual shareholder meetings for the purpose of electing Trustees, and Trustees are not elected for
fixed terms. The Trust will hold a shareholders' meeting in 2005 and at least once every five years thereafter to elect
Trustees. Each Trustee and officer holds office until his or her successor is chosen and qualified or until his or her earlier
death, resignation, retirement or removal.
Each of the Trust's Trustees and officers holds comparable positions with certain other funds of which MFS or a subsidiary is
the investment adviser or distributor, and, in the case of the officers, with certain affiliates of MFS. Each Trustee serves as
a board member of 109 funds within the MFS Family of Funds.
The Statement of Additional Information contains further information about the Trustees and is available without charge upon
request by calling 1-800-225-2606.
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT ADVISER CUSTODIANS
Massachusetts Financial Services Company State Street Bank and Trust Company
500 Boylston Street, Boston, MA 02116-3741 225 Franklin Street, Boston, MA 02110
AUDITORS
DISTRIBUTOR Deloitte & Touche LLP
MFS Fund Distributors, Inc. 200 Berkeley Street, Boston, MA 02116
500 Boylston Street, Boston, MA 02116-3741
PORTFOLIO MANAGERS
Michael L. Dawson
Geoffrey L. Schechter
- -------------------------------------------------------------------------------
MONEY MANAGEMENT FOR ALL TYPES OF INVESTORS
- -------------------------------------------------------------------------------
YOUR GOALS ARE IMPORTANT
MFS offers a complete range of investments and investment services to address
specific financial needs over time. When your investing goals change, you can
easily stay with MFS for the products you need, when you need them. Whether
you're investing for college or retirement expenses or for tax management or
estate planning, MFS will be there.
Ask your investment professional how MFS can help you move toward the goals
you've set.
MFS FAMILY OF FUNDS(R)
More than 50 portfolios offer domestic and international
equity and fixed-income investment across the full risk
spectrum
VARIABLE ANNUITIES
A selection of annuity products with advantages for
building and preserving wealth
MFS 401(k) AND IRA SUITES
Retirement plans for businesses and individuals
MFS COLLEGE SAVINGS PLANS
Investment products to help meet education expenses
MFS PRIVATE PORTFOLIO SERVICES
Investment advisory services that provide custom products
for high-net-worth individuals
A prospectus for any MFS product can be obtained from your investment
professional. You should read the prospectus carefully before investing as it
contains complete information on the fund's investment objective(s), the risks
associated with an investment in the fund, and the fees, charges, and expenses
involved. These elements, as well as other information contained in the
prospectus, should be considered carefully before investing.
Variable annuities are offered through MFS/Sun Life Financial Distributors,
Inc.
- -------------------------------------------------------------------------------
FEDERAL TAX INFORMATION
In January 2005, shareholders will be mailed a Form 1099-DIV reporting the
federal tax status of all distributions paid during the calendar year 2004.
For federal income tax purposes, approximately 100% of the total dividends
paid by the fund from net investment income during the year ended March 31,
2004, is designated as an exempt-interest dividend.
The fund has the option to use equalization, which is a tax basis dividends
paid deduction from earnings and profits distributed to shareholders upon
redemption shares.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CONTACT INFORMATION
- -------------------------------------------------------------------------------
INVESTOR INFORMATION
For information on MFS mutual funds, call your investment professional or, for
an information kit, call toll free: 1-800-225-2606 any business day from
8 a.m. to 8 p.m. Eastern time.
A general description of the fund's proxy voting policies and procedures is
available without charge, upon request, by calling 202-547-7071, extension
201, by visiting www.jmr-financial.com/MFS or by visiting the SEC's website at
http://www.sec. gov.
INVESTOR SERVICE
Write to us at: MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
Type of Information Phone number Hours, Eastern Time
- --------------------------------------------------------------------------------
General information 1-800-225-2606 8 a.m. to 8 p.m., any
business day
- --------------------------------------------------------------------------------
Speech- or hearing-impaired 1-800-637-6576 9 a.m. to 5 p.m., any
business day
- --------------------------------------------------------------------------------
Shares prices, account 1-800-MFS-TALK
balances exchanges (1-800-637-8255) 24 hours a day, 365 days a
or stock and bond outlooks touch-tone required year
- --------------------------------------------------------------------------------
WORLD WIDE WEB
Go to MFS.COM for a clear view of market events, investor education, account
access, and product and performance insights.
Go paperless with EDELIVERY: Join your fellow shareholders who are already
taking advantage of this great new benefit from MFS. With eDelivery, we send
you prospectuses, reports, and proxies electronically. You get timely
information without mailbox clutter (and help your fund save printing and
postage costs).
SIGN-UP instructions: If your account is registered with us, go to mfs.com,
log in to your account via MFS Access, and select the eDelivery sign up
options.
If you own your MFS fund shares through a financial institution or through a
retirement plan, MFS Talk, MFS Access, and eDelivery may not be available
to you.
[logo] M F S(R)
INVESTMENT MANAGEMENT
500 Boylston Street
Boston, MA 02116-3741
(C) 2004 MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.
500 Boylston Street, Boston, MA 02116
MMI-ANN-5/04 21M
[graphic omitted]
MFS(R) Mutual Funds
ANNUAL REPORT 3/31/04
MFS(R) MUNICIPAL SERIES TRUST
For the States of: Alabama,
Arkansas, California, Florida,
Georgia, Maryland, Massachusetts
A path for pursuing opportunity
[logo] M F S(R)
INVESTMENT MANAGEMENT
- --------------------------------------------------------------------------------
MFS(R) PRIVACY POLICY: A COMMITMENT TO YOU
- --------------------------------------------------------------------------------
Privacy is a concern for every investor today. At MFS Investment Management(R)
and the MFS funds, we take this concern very seriously. We want you to
understand our policies about every MFS investment product and service that we
offer and how we protect the nonpublic personal information of investors who
have a direct relationship with us and our wholly owned subsidiaries.
Throughout our business relationship, you provide us with personal information;
we maintain information and records about you, your investments, and the
services you use. Examples of the nonpublic personal information we maintain
include
o data from investment applications and other forms
o share balances and transactional history with us, our affiliates, or others
o facts from a consumer reporting agency
We do not disclose any nonpublic personal information about our customers or
former customers to anyone except as permitted by law. We may share information
with companies or financial institutions that perform marketing services on our
behalf or to other financial institutions with which we have joint marketing
arrangements. Access to your nonpublic personal information is limited to
appropriate personnel who provide products, services, or information to you. We
maintain physical, electronic, and procedural safeguards that comply with
applicable federal regulations.
If you have any questions about MFS' privacy policy, please call 1-800-225-2606
any business day between 8 a.m. and 8 p.m. Eastern time.
Note: If you own MFS products or receive MFS services in the name of a third
party such as a bank or broker-dealer, their privacy policy may apply to you
instead of ours.
- --------------------------------------------------------------------------------
MFS(R) MUNICIPAL SERIES TRUST
The investment objective of each fund is to seek current income exempt from
federal income tax and personal income tax, if any, of the state to which its
name refers.
TABLE OF CONTENTS
MFS PRIVACY POLICY
- -----------------------------------------------------
LETTER FROM THE CEO 1
- -----------------------------------------------------
MFS ORIGINAL RESEARCH(R) 3
- -----------------------------------------------------
MANAGEMENT REVIEW 4
- -----------------------------------------------------
PERFORMANCE SUMMARY 7
- -----------------------------------------------------
PORTFOLIO OF INVESTMENTS 15
- -----------------------------------------------------
FINANCIAL STATEMENTS 50
- -----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 75
- -----------------------------------------------------
INDEPENDENT AUDITORS' REPORT 93
- -----------------------------------------------------
TRUSTEES AND OFFICERS 94
- -----------------------------------------------------
MONEY MANAGEMENT FOR ALL TYPES
OF INVESTORS 96
- -----------------------------------------------------
FEDERAL TAX INFORMATION 97
- -----------------------------------------------------
CONTACT INFORMATION 98
- -----------------------------------------------------
ASSET ALLOCATION 99
- --------------------------------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
NOT A DEPOSIT NOT INSURED BY ANY GOVERNMENT AGENCY
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
LETTER FROM THE CEO
- -------------------------------------------------------------------------------
Dear Shareholders,
[Photo of Robert J. Manning]
Our firm was built on the strength of MFS Original Research(R), our in-depth
analysis of every security we consider for our portfolios. We've been honing
this process since 1932, when we created one of the mutual fund industry's first
research departments. And we continue to fine-tune this process so that we can
provide strong and consistent long-term investment performance to help you
achieve your financial goals.
While we have achieved strong investment performance in many of our portfolios,
our goal is to achieve the same strong results across all asset classes. To
ensure that our portfolio teams are doing the best possible job for our firm's
clients and shareholders, I am focusing the vast majority of my time on the
three key elements that I believe truly differentiate MFS from its competitors:
people, process, and culture.
PEOPLE
Our people have always been our most valuable resource. Our philosophy is to
deliver consistent, repeatable investment results by hiring the most talented
investors in our industry. We recruit from the nation's top business schools and
hire experienced analysts, both domestically and around the globe.
Our analysts are the engine that powers our entire investment team because their
recommendations have a direct impact on the investment performance of our
portfolios. To demonstrate our ongoing commitment in this area, we increased the
number of equity analysts at MFS from less than 40 at the end of 2000 to over 50
in April 2004. During that same period, we doubled the average investment
experience of our new domestic equity analysts, from 2.6 years to 5.3 years, by
recruiting more seasoned analysts to the firm. Moreover, our international
network of investment personnel now spans key regions of the world with offices
in London, Mexico City, Singapore, and Tokyo, as well as Boston.
One of the major advantages that MFS has over many of its competitors is that
the position of research analyst is a long-term career for many members of our
team, not simply a steppingstone toward becoming a portfolio manager. We have
worked to elevate the stature of the analyst position to be on par with that of
a portfolio manager. In fact, an exceptional research analyst has the
opportunity to earn more at MFS than some portfolio managers.
At the same time, we look within the firm to promote talented analysts who
choose a path toward becoming a portfolio manager. We rarely hire portfolio
managers from our competitors because we believe the best investors are those
steeped in the MFS process and culture. In the past few months, we have
identified four senior research analysts who will assume roles on the management
teams of several of our larger portfolios. MFS is fortunate to have a deep bench
of talented investment personnel, and we welcome the opportunity to put their
skills to work for our clients.
PROCESS
MFS was built on the strength of its bottom-up approach to researching
securities. We have enhanced the mentoring process for our research analysts by
calling on several of our most seasoned portfolio managers to supplement the
work of Director of Global Equity Research David A. Antonelli. These portfolio
managers will be taking a special interest in developing the careers of our
research analysts and strengthening our investment process. Kenneth J. Enright
of our value equity group will work with a team of domestic analysts; David E.
Sette-Ducati of our small- and mid-cap equity team will work with analysts
concentrating on small- and mid-cap companies; and Barnaby Wiener of our
international equity team in London heads the European equity research team.
We have combined the bottom-up approach of our research process with a top- down
approach to risk controls on portfolio composition. We have a very strong
quantitative team under the leadership of industry veteran Deborah H. Miller,
who represents the equity management department on the Management Committee of
the firm. Quantitative analysis helps us generate investment ideas and, more
importantly, assess the appropriate level of risk for each portfolio. The risk
assessment is designed to assure that each portfolio operates within its
investment objectives.
Additionally, we have increased the peripheral vision of our investment
personnel across asset classes through the collaboration of our Equity, Fixed
Income, Quantitative Analysis, and Risk Management teams. We recently codified
this key aspect of our culture by forming an Investment Management Committee,
composed of key members of these teams. This Committee will work to ensure that
all teams are sharing information, actively debating investment ideas, and
creating a unified investment team.
CULTURE
Teamwork is at the heart of our ability to deliver consistent and competitive
investment performance over time. At MFS, each member of our team is involved in
our success; we have no superstars. The collaborative nature of our process
works to assure a consistent investment approach across all of our products and
provides a high level of continuity in portfolio management because our
investment performance never depends on the contributions of just a single
individual. Our culture is based on an environment of teamwork that allows our
investment personnel to be successful. In turn, we demand superior investment
results from every member of our team.
We have created a meritocracy at our firm based on investment results. We hold
all of our portfolio managers accountable for the performance of their
portfolios and their contributions to the team. We also track the equity and
fixed-income ratings of our analysts so we can evaluate them based on the
performance of their recommendations. We align bonus compensation to investment
performance by weighting rewards to those who have created the greatest
long-term benefit for our shareholders and who contribute most successfully to
the Original Research(SM) process.
The strength of our culture has resulted in a tremendous amount of stability,
both in terms of people and assets under management. Although we have dismissed
members of our team whose performance did not meet MFS' high standards, only one
member of our investment team has voluntarily left the firm over the past six
months, based on a decision to retire from the industry. Similarly, our firm's
assets under management have remained remarkably steady. We began the year with
$140 billion in assets and ended the first quarter with $142 billion in assets.
We are very proud to have experienced growth during this period despite the
difficult regulatory environment and the relatively flat performance of the
stock market.
In short, we can help you achieve your financial goals by hiring talented
people, following a disciplined process, and maintaining our firm's unique
culture. The recent enhancements described in this letter reflect the
collaborative spirit and the depth of resources in our investment teams.
As always, we appreciate your confidence in MFS and welcome any questions or
comments you may have.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
CEO, President, and Chief Investment Officer
MFS Investment Management(R)
April 19, 2004
Note to Shareholders: On February 6, 2004, Jeffrey L. Shames retired as
Chairman of MFS. Robert Pozen was named as non-executive Chairman. Also,
on February 6, 2004, Robert J. Manning was appointed Chief Executive Officer,
President, and Chief Investment Officer.
The opinions expressed in this letter are those of MFS, and no forecasts can be
guaranteed.
- -------------------------------------------------------------------------------
MFS ORIGINAL RESEARCH(R)
- -------------------------------------------------------------------------------
THE MFS(R) DIFFERENCE
For 80 years MFS has been offering investors clear paths to pursuing specific
investment objectives. Today, millions of individuals and thousands of
institutions all over the world look to MFS to manage their assets with insight
and care.
Our success, we believe, has to do with the fact that we see investors as people
with plans, not just dollars to invest.
When you invest with MFS, you invest with a company dedicated to helping you
realize your long-term financial goals.
INVESTORS CHOOSE MFS FOR OUR
o global asset management expertise across all asset classes
o time-tested money management process for pursuing consistent results
o full spectrum of investment products backed by MFS Original Research(R)
o resources and services that match real-life needs
TURNING INFORMATION INTO OPPORTUNITY
Sound investments begin with sound information. MFS has been doing its own
research and analyzing findings in-house for decades. The process we use to
uncover opportunity is called MFS Original Research(R).
MFS ORIGINAL RESEARCH INVOLVES:
o meeting with the management of 3,000 companies each year to assess their
business plans and the managers' ability to execute those plans
o making onsite visits to more than 2,000 companies annually to gain first-hand
knowledge of their operations and products
o analyzing financial statements and balance sheets
o talking extensively with companies' customers and competitors
o developing our own proprietary estimates of companies' earnings
- -------------------------------------------------------------------------------
MANAGEMENT REVIEW
- -------------------------------------------------------------------------------
MARKET ENVIRONMENT
For the one year period ended March 31, 2004, as a whole, long-term U.S.
Treasury bond yields were virtually unchanged. High-grade municipal bond yields
declined slightly, allowing municipal bonds in general to modestly outperform
Treasuries. Those facts, however, belie the tremendous volatility in the bond
market over the 12 months ended March 31, 2004.
In early 2003 and into the first half of the period, we saw a confluence of
factors that were positive for bond prices. Geopolitical uncertainty, the
hangover from corporate scandals in 2002, and a weak U.S. economy were among the
factors that prompted a "flight to quality" by many investors and pushed
interest rates down to four-decade lows by June of 2003.
In late June, however, the bond market reversed direction as fixed-income
investors became concerned that the economic recovery was accelerating faster
than expected. Although stocks had been rising since late March, the catalyst
for the bond market appeared to be the Federal Reserve Board's decision on June
25 to lower rates by one-quarter percent rather than one-half percent as many
investors had expected. From that date through early September, bond prices fell
as rates rose sharply.
In the second half of the period, however, bond prices revived as several
factors combined to drive rates down again. Economic reports indicated that
inflation was well contained while job growth remained weak. Although most other
measures indicated the U.S. economy was improving, we believe investors were
concerned that consumer spending might falter because laid-off workers were not
finding new jobs. Statistics indicated that a significant portion of U.S.
production capacity remained idle. The Fed appeared to sum up the situation in
its statements that interest rates could remain low for the foreseeable future.
By period-end, interest rates for 10- and 30-year Treasuries were within just
four basis points of where they had started the period. (A basis point is 0.01%
of interest.)
Municipal bonds generally followed the path of Treasury bonds over the period,
but with somewhat smaller swings in yield. However, long-term municipal bonds
ended the period yielding about 20 basis points less than they had at the start
of the period. Long-term municipal bonds in general saw some price appreciation
over the period and outperformed long-term Treasuries. (The principal value and
interest on U.S. Treasury securities, however, are guaranteed by the U.S.
government if held to maturity.)
We believe the outperformance of municipals was caused by two main factors.
First, municipal bonds appreciated from historically low valuations, relative to
Treasuries, to more normal valuations. This was in part the result of a growing
national debt that put downward pressure on long-term Treasury prices. Second,
we believe a decrease in the supply of new municipal issues late in the period
put upward pressure on municipal prices.
As the economy improved over the period, it also appeared to us that investors
became willing to take on more risk, and the municipal bond market rotated to
favor lower-rated, higher-yielding issues. For the period as a whole, lower-
quality municipal bonds generally outperformed higher-rated bonds.
HOW WE MANAGE THE FUNDS
All of the MFS state municipal funds are managed with a common investment
strategy. There are four key elements to our management strategy: duration,
yield curve positioning, credit quality, and sector allocation.
DURATION is a measure of a fund's sensitivity to changes in interest rates. In
most market environments, we strive to be neutral in duration relative to our
Lipper peers, as we believe that trying to predict the direction of interest
rates is a relatively risky investment strategy. However, at times when we
believe that interest rates have become excessively low - as we felt they did
over the period - and may be about to reverse direction, we may try to protect a
fund's principal by making the fund modestly short on duration relative to its
Lipper peers. (Shorter duration makes a fund less sensitive to changes in
interest rates.)
A YIELD CURVE for bonds shows the relationship between yield and time to
maturity. In a majority of market environments, longer-maturity bonds offer
higher yields but are more exposed to duration risk - the risk that a change in
interest rates may adversely affect a bond's price. In managing the funds, we
try to pick what we believe is the optimal spot on the yield curve - a time to
maturity that optimizes the combination of yield and risk. Our research for some
time has indicated that the 15- to 20-year part of the yield curve is that
optimal spot. For example, in our experience a 20-year bond typically has paid
98% of the yield of a similar 30-year bond but carried only 75%-80% of the
duration risk of that 30-year bond. For that reason, the funds have tended to be
overweighted in bonds with maturities in the 15- to 20-year range.
CREDIT QUALITY refers to the perceived ability of a bond issuer to make interest
payments and repay a bond's principal. Major credit-rating agencies rate bonds
on a scale that usually runs from "AAA" down to "BBB" for investment-grade
bonds, and "BB" and below for lower-quality, noninvestment-grade or so-called
"junk" bonds. In general, lower-rated bonds pay higher rates of interest to
compensate investors for taking on additional risk. The funds historically have
focused on using our bottom-up research to seek out bonds that offer higher
yields than average "AAA"-rated insured bonds, yet also offer what we believe is
reasonable safety of principal and interest payments to maturity.
SECTOR ALLOCATION refers to a fund's weightings in various types of municipal
bond issues, including bonds from industries such as health care, utilities, and
airlines. Our research analysts constantly seek out sectors, and individual
bonds within those sectors, that we believe will benefit in a given market
environment.
FACTORS THAT AFFECTED PERFORMANCE
For the 12-month period ended
March 31, 2004, the following charts indicate the effects of the four factors
mentioned above on individual fund performance. These factors may affect fund
performance in different ways during other periods, depending on market
conditions.
The chart below depicts performance relative to each fund's benchmark, the
Lehman Brothers Municipal Bond Index (the Lehman Index).
o The DURATION column indicates that the fund's duration had a positive effect
("pos"), a negative effect ("neg"), or no meaningful contribution to
relative performance ("neutral"). For the period, all of the funds were
short on duration, relative to the Lehman Index, in anticipation of rising
rates. However, long-term municipal interest rates declined over the period.
Being short on duration thus hurt performance of all of the funds. For most
of the funds, duration was the most significant performance detractor over
the period.
o YIELD CURVE indicates the effect of the fund's yield curve positioning on
performance. Compared with the Lehman Index, all funds were more heavily
weighted in bonds on the long end of the yield curve -- bonds with 10 to 30
years remaining to maturity. That overweighting helped during the period
because long-term municipal rates came down more than short-term rates, so
longer-term bonds experienced more price appreciation. Yield curve
positioning therefore helped relative performance of all funds over the
period.
o The average CREDIT QUALITY of several of the funds was similar to that of
the Lehman Index over the period. The effect of credit quality on relative
performance was therefore neutral for those funds. The California fund had a
relatively higher level of exposure to areas of the credit spectrum that
outperformed over the period, and lower exposure to weaker- performing
areas. (Exposure, defined as portfolio weight times duration, is a measure
of a sector's contribution to the portfolio's overall sensitivity to
interest rate shifts.) The Massachusetts fund had higher exposure to
"AAA"-rated and "BB"-rated bonds, which outperformed over the period. For
those two funds, credit quality thus had a positive effect on relative
performance.
KEY FACTORS IN FUND PERFORMANCE RELATIVE TO BENCHMARK
(THE LEHMAN BROTHERS MUNICIPAL BOND INDEX)
YIELD CREDIT SECTOR
STATE FUND DURATION CURVE QUALITY ALLOCATION
Alabama neg pos neutral neutral
- -----------------------------------------------------------------------------
Arkansas neg pos neutral neg
- -----------------------------------------------------------------------------
California neg pos pos neutral
- -----------------------------------------------------------------------------
Florida neg pos neutral neutral
- -----------------------------------------------------------------------------
Georgia neg pos neutral neg
- -----------------------------------------------------------------------------
Maryland neg pos neutral neg
- -----------------------------------------------------------------------------
Massachusetts neg pos pos neg
- -----------------------------------------------------------------------------
o Funds for which SECTOR ALLOCATION was a negative factor were generally
underweighted in one or more sectors that outperformed over the period. An
underweighting in tobacco bonds, for example, hurt relative performance of
the Arkansas fund. Tobacco bonds are state bonds backed by payments under
the Master Settlement Agreement (MSA) between the states and the major
tobacco companies, in which the states agreed to drop their lawsuits against
the firms in return for a series of payments. For much of 2003, tobacco
bonds underperformed as other lawsuits raised concerns about the tobacco
firms' ability to continue MSA payments. In late 2003 and early 2004,
however, those litigation concerns appeared to subside and tobacco bonds
rallied; for the one-year period ended March 31, 2004, tobacco bonds
outperformed the broad municipal market.
An underweighting in tobacco bonds and an overweighting in housing bonds
detracted from relative results for the Georgia, Maryland, and Massachusetts
funds. As mortgage rates remained low for much of the period, the increased
risk of prepayment -- from homeowners refinancing their mortgages at lower
rates -- caused the housing sector as a whole to underperform the broad
market. (Prepayments are generally bad for investors in housing bonds
because they are forced to reinvest their proceeds at lower prevailing
rates.)
Respectfully,
/s/ Michael L. Dawson /s/ Geoffrey L. Schechter
Michael L. Dawson Geoffrey L. Schechter
Portfolio Manager Portfolio Manager
The views expressed in this report are those of the portfolio managers only
through the end of the period of the report as stated on the cover and do not
necessarily reflect the views of MFS or any other person in the MFS
organization. These views are subject to change at any time based on market and
other conditions, and MFS disclaims any responsibility to update such views.
These views may not be relied upon as investment advice or as an indication of
trading intent on behalf of any MFS Fund. References to specific securities are
not recommendations of such securities, and may not be representative of any MFS
Fund's current or future investments.
- -------------------------------------------------------------------------------
Visit mfs.com for our latest economic and investment outlook.
o Under Updates & Announcements, click Week in Review for a summary of recent
investment-related news.
o From Week in Review, link to MFS Global Perspective for our current view of
the world.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) ALABAMA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
The following information illustrates the historical performance of each fund's
original share class in comparison to various market indicators. Performance
results include the deduction of the maximum applicable sales charge and reflect
the percentage change in net asset value, including reinvestment of dividends
and capital gains distributions. Each fund's results have been compared to the
average relevant state municipal debt fund tracked by Lipper Inc., an
independent firm that reports mutual fund performance. For those states where
Lipper does not track state-specific fund performance, we have provided the
average "other state" municipal debt fund returns. Each fund's results have also
been compared to the Lehman Brothers Municipal Bond Index, a broad measure of
the municipal bond market. However, while this index is considered the benchmark
for the performance of municipal bond funds, it is comprised of municipal bonds
issued nationwide, while each of the funds is limited to investing in the bonds
of a particular state. Benchmark comparisons are unmanaged and do not reflect
any fees or expenses. The performance of other share classes will be greater
than or less than the line shown. (See Notes to Performance Summary.) It is not
possible to invest directly in an index.
VISIT MFS.COM FOR THE MOST RECENT MONTH-END PERFORMANCE RESULTS. MARKET
VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE, AND CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE
OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND
SHARES, WHEN THE DEDUCTION OF TAXES, IF ANY, THAT REDEEMED, MAY BE WORTH MORE OR
LESS A SHAREHOLDER WOULD PAY ON FUND THAN THEIR ORIGINAL COST. THE DISTRIBUTIONS
OR THE REDEMPTION OF PERFORMANCE SHOWN DOES NOT REFLECT FUND SHARES.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/04)
MFS Alabama Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
- ----------------------------------------
3/94 $ 9,525 $10,000
3/96 10,869 11,644
3/98 12,622 13,593
3/00 13,149 14,425
3/02 15,041 16,610
3/04 17,400 19,322
TOTAL RETURNS
- --------------------
Average annual
without sales charge
- --------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 2/1/1990 5.11% 6.03% 5.59% 6.21%
- ------------------------------------------------------------------------------
B 9/7/1993 4.32% 5.24% 4.80% 5.40%
- ------------------------------------------------------------------------------
- --------------------
Average annual
- --------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average Alabama municipal debt fund+ 5.26% 5.85% 4.90% 5.62%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index# 5.86% 6.49% 6.00% 6.81%
- ------------------------------------------------------------------------------
- --------------------
Average annual
with sales charge
- --------------------
- ------------------------------------------------------------------------------
A 0.11% 4.33% 4.57% 5.70%
- ------------------------------------------------------------------------------
B 0.32% 4.33% 4.47% 5.40%
- ------------------------------------------------------------------------------
- --------------------
Cumulative
without sales charge
- --------------------
- ------------------------------------------------------------------------------
A 5.11% 19.22% 31.25% 82.68%
- ------------------------------------------------------------------------------
B 4.32% 16.57% 26.42% 69.16%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) ARKANSAS MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the 10-year period
ended 3/31/04)
MFS Arkansas Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
- ----------------------------------------
3/94 $ 9,525 $10,000
3/96 10,712 11,644
3/98 12,363 13,593
3/00 12,901 14,425
3/02 14,828 16,610
3/04 16,972 19,322
TOTAL RETURNS
- --------------------
Average annual
without sales charge
- --------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 2/3/1992 4.53% 6.00% 5.59% 5.95%
- ------------------------------------------------------------------------------
B 9/7/1993 3.68% 5.15% 4.75% 5.09%
- ------------------------------------------------------------------------------
- --------------------
Average annual
- --------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average "other state" municipal
debt fund+ 4.24% 4.98% 4.48% 5.46%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond
Index# 5.86% 6.49% 6.00% 6.81%
- ------------------------------------------------------------------------------
- --------------------
Average annual
with sales charge
- --------------------
- ------------------------------------------------------------------------------
A -0.44% 4.30% 4.57% 5.43%
- ------------------------------------------------------------------------------
B -0.32% 4.24% 4.42% 5.09%
- ------------------------------------------------------------------------------
- --------------------
Cumulative
without sales charge
- --------------------
- ------------------------------------------------------------------------------
A 4.53% 19.11% 31.24% 78.19%
- ------------------------------------------------------------------------------
B 3.68% 16.27% 26.12% 64.28%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) CALIFORNIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the 10-year period
ended 3/31/04)
MFS California Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
- ----------------------------------------
3/94 $ 9,525 $10,000
3/96 10,772 11,644
3/98 12,559 13,593
3/00 13,197 14,425
3/02 15,074 16,610
3/04 17,413 19,322
TOTAL RETURNS
- --------------------
Average annual
without sales charge
- --------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 6/18/1985 5.22% 6.00% 5.40% 6.22%
- ------------------------------------------------------------------------------
B 9/7/1993 4.38% 5.17% 4.57% 5.33%
- ------------------------------------------------------------------------------
C 1/3/1994 4.27% 5.04% 4.48% 5.23%
- ------------------------------------------------------------------------------
- --------------------
Average annual
- --------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average California municipal
debt fund+ 5.25% 5.28% 4.77% 6.02%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond
Index# 5.86% 6.49% 6.00% 6.81%
- ------------------------------------------------------------------------------
- --------------------
Average annual
with sales charge
- --------------------
- ------------------------------------------------------------------------------
A 0.22% 4.30% 4.38% 5.70%
- ------------------------------------------------------------------------------
B 0.38% 4.25% 4.23% 5.33%
- ------------------------------------------------------------------------------
C 3.27% 5.04% 4.48% 5.23%
- ------------------------------------------------------------------------------
- --------------------
Cumlative
without sales charge
- --------------------
- ------------------------------------------------------------------------------
A 5.22% 19.11% 30.09% 82.82%
- ------------------------------------------------------------------------------
B 4.38% 16.31% 25.04% 68.14%
- ------------------------------------------------------------------------------
C 4.27% 15.89% 24.52% 66.43%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) FLORIDA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the 10-year period ended
3/31/04)
MFS Florida Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
- ----------------------------------------
3/94 $ 9,525 $10,000
3/96 10,893 11,644
3/98 12,411 13,593
3/00 12,883 14,425
3/02 14,765 16,610
3/04 16,993 19,322
TOTAL RETURNS
- --------------------
Average annual
without sales charge
- --------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 2/3/1992 5.20% 6.01% 5.40% 5.96%
- ------------------------------------------------------------------------------
B 9/7/1993 4.36% 5.16% 4.58% 5.09%
- ------------------------------------------------------------------------------
- --------------------
Average annual
- --------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average Florida municipal
debt fund+ 4.61% 5.32% 4.62% 5.90%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond
Index# 5.86% 6.49% 6.00% 6.81%
- ------------------------------------------------------------------------------
- --------------------
Average annual
with sales charge
- --------------------
- ------------------------------------------------------------------------------
A 0.20% 4.30% 4.38% 5.45%
- ------------------------------------------------------------------------------
B 0.36% 4.25% 4.24% 5.09%
- ------------------------------------------------------------------------------
- --------------------
Cumulative
without sales charge
- --------------------
- ------------------------------------------------------------------------------
A 5.20% 19.14% 30.09% 78.41%
- ------------------------------------------------------------------------------
B 4.36% 16.31% 25.10% 64.23%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) GEORGIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the 10-year period ended
3/31/04)
MFS Georgia Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
- ----------------------------------------
3/94 $ 9,525 $10,000
3/96 10,716 11,644
3/98 12,428 13,593
3/00 12,865 14,425
3/02 14,687 16,610
3/04 16,948 19,322
TOTAL RETURNS
- --------------------
Average annual
without sales charge
- --------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 6/6/1988 4.93% 5.94% 5.39% 5.93%
- ------------------------------------------------------------------------------
B 9/7/1993 4.15% 5.14% 4.60% 5.13%
- ------------------------------------------------------------------------------
- --------------------
Average annual
- --------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average Georgia municipal
debt fund+ 4.91% 5.41% 4.84% 5.84%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond
Index# 5.86% 6.49% 6.00% 6.81%
- ------------------------------------------------------------------------------
- --------------------
Average annual
with sales charge
- --------------------
- ------------------------------------------------------------------------------
A -0.05% 4.23% 4.37% 5.42%
- ------------------------------------------------------------------------------
B 0.15% 4.23% 4.26% 5.13%
- ------------------------------------------------------------------------------
- --------------------
Cumulative
without sales charge
- --------------------
- ------------------------------------------------------------------------------
A 4.93% 18.89% 30.00% 77.93%
- ------------------------------------------------------------------------------
B 4.15% 16.24% 25.20% 64.90%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) MARYLAND MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the 10-year period ended
3/31/04)
MFS Maryland Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
- ----------------------------------------
3/94 $ 9,525 $10,000
3/96 10,771 11,644
3/98 12,356 13,593
3/00 12,801 14,425
3/02 14,621 16,610
3/04 16,761 19,322
Total Returns
- --------------------
Average annual
without sales charge
- --------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 10/31/1984 4.96% 5.89% 5.27% 5.81%
- ------------------------------------------------------------------------------
B 9/7/1993 4.37% 5.24% 4.61% 5.12%
- ------------------------------------------------------------------------------
- --------------------
Average annual
- --------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average Maryland municipal debt
fund+ 4.59% 5.34% 4.67% 5.64%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond
Index# 5.86% 6.49% 6.00% 6.81%
- ------------------------------------------------------------------------------
- --------------------
Average annual
with sales charge
- --------------------
- ------------------------------------------------------------------------------
A -0.02% 4.19% 4.25% 5.30%
- ------------------------------------------------------------------------------
B 0.37% 4.33% 4.27% 5.12%
- ------------------------------------------------------------------------------
- --------------------
Cumulative
without sales charge
- --------------------
- ------------------------------------------------------------------------------
A 4.96% 18.75% 29.27% 75.97%
- ------------------------------------------------------------------------------
B 4.37% 16.57% 25.26% 64.79%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) MASSACHUSETTS MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the 10-year period ended
3/31/04)
MFS Massachusetts Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
- ----------------------------------------
3/94 $ 9,525 $10,000
3/96 10,787 11,644
3/98 12,383 13,593
3/00 12,811 14,425
3/02 14,564 16,610
3/04 16,857 19,322
TOTAL RETURNS
- --------------------
Average annual
without sales charge
- --------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 4/9/1985 4.82% 6.01% 5.31% 5.87%
- ------------------------------------------------------------------------------
B 9/7/1993 4.14% 5.35% 4.64% 5.18%
- ------------------------------------------------------------------------------
- --------------------
Average annual
- --------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average Massachusetts municipal
debt fund+ 5.11% 5.69% 4.91% 5.93%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond
Index# 5.86% 6.49% 6.00% 6.81%
- ------------------------------------------------------------------------------
- --------------------
Average annual
with sales charge
- --------------------
- ------------------------------------------------------------------------------
A -0.16% 4.31% 4.29% 5.36%
- ------------------------------------------------------------------------------
B 0.14% 4.44% 4.30% 5.18%
- ------------------------------------------------------------------------------
- --------------------
Cumulative
without sales charge
- --------------------
- ------------------------------------------------------------------------------
A 4.82% 19.14% 29.51% 76.98%
- ------------------------------------------------------------------------------
B 4.14% 16.93% 25.45% 65.77%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
NOTES TO PERFORMANCE SUMMARY AND RISK CONSIDERATIONS
- -------------------------------------------------------------------------------
NOTES TO PERFORMANCE SUMMARY
Class A share performance, including sales charge, reflects the deduction of the
maximum 4.75% sales charge. Class B share performance, including sales charge,
reflects the deduction of the applicable contingent deferred sales charge
(CDSC), which declines over six years from 4% to 0%.
For those funds that offer Class C shares, Class C results, including sales
charge, redeemed within one year from the end of the calendar month of purchase
reflects the deduction of the 1% CDSC.
Performance results reflect any applicable subsidies and waivers in effect
during the periods shown. Without such subsidies and waivers each fund's
performance would be less favorable. Please see the prospectus and financial
statements for complete details.
RISK CONSIDERATIONS
A small portion of income may be subject to state, federal, and/or alternative
minimum tax. Capital gains, if any, are subject to a capital gains tax.
If you are not a resident of the state to which a particular fund is targeted,
the state tax exemption will not apply.
Investments in high yield or lower-rated securities may provide greater returns
but are subject to greater-than-average risk.
By concentrating in one state, the funds are more susceptible to adverse
economic, political or regulatory developments affecting that state than are
funds that invest more broadly.
Because the funds invest in a limited number of companies a change in one
security's value may have a more significant effect on fund values.
These risks may increase share price volatility. Please see the prospectus for
further information regarding these and other risk considerations.
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
- ----------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/04 MFS(R) ALABAMA MUNICIPAL BOND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset
classes.
Municipal Bonds - 96.8%
- ----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 3.3% Alabama Docks Department Facilities Rev., AMBAC, 5.375%, 2017 $1,000 $1,086,040
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Docks Department Facilities Rev., MBIA, 5.5%, 2022 1,000 1,110,220
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Port Authority Docks Facility MBIA, 5.25%, 2026 1,000 1,040,820
- ----------------------------------------------------------------------------------------------------------------------------------
$3,237,080
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 12.3% Gadsden, AL, Warrants, "B", 5.125%, 2028 $1,500 $1,573,500
- ----------------------------------------------------------------------------------------------------------------------------------
Hoover, AL, "B", 6%, 2017 500 569,600
- ----------------------------------------------------------------------------------------------------------------------------------
Houston County, AL, AMBAC, 6.25%, 2019 750 897,862
- ----------------------------------------------------------------------------------------------------------------------------------
Huntsville, AL, "A", 5.5%, 2020 1,000 1,042,170
- ----------------------------------------------------------------------------------------------------------------------------------
Huntsville, AL, School Warrants, "F", 5%, 2012 1,000 1,105,620
- ----------------------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, School Warrants, FSA, 5.5%, 2020 1,750 1,943,498
- ----------------------------------------------------------------------------------------------------------------------------------
Mobile County, AL, 6%, 2014 1,345 1,570,651
- ----------------------------------------------------------------------------------------------------------------------------------
Russell County, AL, Warrants, "A", AMBAC, 5%, 2017 1,000 1,091,420
- ----------------------------------------------------------------------------------------------------------------------------------
Saraland, AL, Warrants, MBIA, 5.25%, 2012 1,000 1,125,620
- ----------------------------------------------------------------------------------------------------------------------------------
Scottsboro, AL, School Warrants, "A", AMBAC, 5%, 2022 1,090 1,150,539
- ----------------------------------------------------------------------------------------------------------------------------------
$12,070,480
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 7.4% Birmingham, AL, 5.75%, 2019 $2,000 $2,274,440
- ----------------------------------------------------------------------------------------------------------------------------------
Birmingham, AL, "A", 5.75%, 2017 1,000 1,159,270
- ----------------------------------------------------------------------------------------------------------------------------------
Birmingham, AL, Refunding & Capital Improvement, "B", AMBAC, 5.25%,
2022 1,000 1,079,510
- ----------------------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, Capital Improvement & Refunding Warrants, "A",
MBIA, 5%, 2023 1,000 1,040,840
- ----------------------------------------------------------------------------------------------------------------------------------
Montgomery, AL, Warrants, MBIA, 5.1%, 2021 1,005 1,062,526
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Municipal Finance Agency, RITES, FSA, 9.6169%, 2017+(+) 500 636,780
- ----------------------------------------------------------------------------------------------------------------------------------
$7,253,366
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 5.2% Bessemer, AL, School Warrants, AMBAC, 5.5%, 2020 $2,015 $2,258,190
- ----------------------------------------------------------------------------------------------------------------------------------
Phenix City, AL, AMBAC, 5.65%, 2021 1,500 1,668,255
- ----------------------------------------------------------------------------------------------------------------------------------
Tuscaloosa, AL, Warrants, 5.7%, 2018 1,000 1,139,980
- ----------------------------------------------------------------------------------------------------------------------------------
$5,066,425
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Alabama Special Care Facilities Financing Authority (Daughters of
Hospitals - 15.6% Charity), AMBAC, 5%, 2025(++) $1,500 $1,527,255
- ----------------------------------------------------------------------------------------------------------------------------------
Baldwin County, AL, Eastern Shore Health Care Authority Rev. (Thomas
Hospital), 6.75%, 2015 500 518,855
- ----------------------------------------------------------------------------------------------------------------------------------
Birmingham Medical Center, East Alabama, Special Health Care
Facilities, Eastern Health Systems, "B", 5%, 2018 500 494,690
- ----------------------------------------------------------------------------------------------------------------------------------
Birmingham, AL, Baptist Health Systems, "A", (Baptist Medical
Center),
5.625%, 2015 300 323,727
- ----------------------------------------------------------------------------------------------------------------------------------
Birmingham, AL, Special Care Facilities (Children's Hospital), "B",
5%, 2016 1,005 1,099,410
- ----------------------------------------------------------------------------------------------------------------------------------
Cullman, AL, Medical Park, South Clinic, "A", 6.5%, 2023 1,000 1,008,040
- ----------------------------------------------------------------------------------------------------------------------------------
DCH Health Care Authority, Alabama Facilities Rev., 5.25%, 2016 1,000 1,060,930
- ----------------------------------------------------------------------------------------------------------------------------------
Houston County, AL, Health Care Authority, AMBAC, 6.125%, 2022 1,000 1,162,100
- ----------------------------------------------------------------------------------------------------------------------------------
Huntsville, AL, Health Care Authority Rev., 5.625%, 2026 950 986,927
- ----------------------------------------------------------------------------------------------------------------------------------
Huntsville, AL, Health Care Authority Rev., "A", MBIA, 5%, 2023 1,000 1,041,560
- ----------------------------------------------------------------------------------------------------------------------------------
Lauderdale County & Florence, AL, Health Care Authority Rev. (Eliza
Coffee Memorial Hospital), MBIA, 5.75%, 2008(++) 1,000 1,149,010
- ----------------------------------------------------------------------------------------------------------------------------------
Lauderdale County & Florence, AL, Health Care Authority Rev., "A",
(Coffee Health Group), MBIA, 5.75%, 2014 1,000 1,143,850
- ----------------------------------------------------------------------------------------------------------------------------------
Marshall County, AL, Health Care Authority Rev., "A", 5.75%, 2032 1,000 1,032,090
- ----------------------------------------------------------------------------------------------------------------------------------
Montgomery, AL, Medical Clinic Board Rev. (Jackson Hospital &
Clinic), AMBAC, 5.875%, 2016 1,000 1,089,750
- ----------------------------------------------------------------------------------------------------------------------------------
Montgomery, AL, Special Care Facilities Financing Authority Rev., "C"
(Baptist Medical Center), FSA, 5.375%, 2019 1,150 1,255,397
- ----------------------------------------------------------------------------------------------------------------------------------
Valley, AL, Special Care Facilities Financing Authority Rev., "A"
(Lanier Memorial Hospital), 5.65%, 2022 425 397,898
- ----------------------------------------------------------------------------------------------------------------------------------
$15,291,489
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Mobile County, AL, Industrial Development Authority Rev. (Ipsco,
Metals - 0.5% Inc.), 6.875%, 2030 $500 $516,600
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Other - 0.5% Fairfield, AL, Environment Improvement Rev. (USX Corp.), 5.4%, 2016 $400 $454,636
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Paper - 3.2% Butler, AL, Solid Waste Disposal Rev. (James River Corp.), 8%, 2028 $150 $154,206
- ----------------------------------------------------------------------------------------------------------------------------------
Camden, AL, Industrial Development Board Exempt Rev., "B",
(Weyerhaeuser), 6.375%, 2024 500 530,370
- ----------------------------------------------------------------------------------------------------------------------------------
Mobile, AL, Industrial Development Board Improvement Rev., "A"
(International Paper Co.), 6.35%, 2016 650 710,418
- ----------------------------------------------------------------------------------------------------------------------------------
Mobile, AL, Industrial Development Board Improvement Rev., "B"
(International Paper Co.), 6.45%, 2019 350 380,440
- ----------------------------------------------------------------------------------------------------------------------------------
Phenix City, AL, Environmental Improvement Rev., 6.35%, 2035 750 793,867
- ----------------------------------------------------------------------------------------------------------------------------------
Selma, AL, Industrial Development Board, "A" (International Paper Co.),
6.7%, 2018 500 554,020
- ----------------------------------------------------------------------------------------------------------------------------------
$3,123,321
- ----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Birmingham, AL, Downtown Redevelopment Authority Rev. (Social
Other - 3.6% Security Administrative Building), 12.5%, 2010(++) $1,830 $2,427,806
- ----------------------------------------------------------------------------------------------------------------------------------
East Cental, AL, Industrial Development Authority Rev., AMBAC, 5.4%,
2015 1,000 1,103,600
- ----------------------------------------------------------------------------------------------------------------------------------
$3,531,406
- ----------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Alabama Housing Finance Authority, Multi-Family Residential
Revenue - 2.5% Development Rev., "K", (South Bay Apartments), FNMA, 5.875%, 2021 $960 $1,015,046
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Housing Finance Authority, Multi-Family Residential
Development Rev., FHA, 7.25%, 2023 1,185 1,196,542
- ----------------------------------------------------------------------------------------------------------------------------------
Birmingham, AL, Multi-Family Housing Rev., "C" (Beaconview
Apartments),
8%, 2030 395 78,577
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Corp., Multi-Family Mortgage Rev., LOC,
7.5%, 2015 200 200,714
- ----------------------------------------------------------------------------------------------------------------------------------
$2,490,879
- ----------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Alabama Housing Finance Authority, Collateral Home Mortgage Bond
State - 2.5% Program II, "B", 5.15%, 2019 $400 $408,824
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Housing Finance Authority, Single Family Mortgage Rev.,
Collateral Home Mortgage Bond Program I, "B", GNMA, 5.7%, 2015 675 705,314
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Housing Finance Authority, Single Family Mortgage Rev.,
Collateral Home Mortgage Bond Program II, "A", 5.4%, 2022 895 913,777
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Housing Finance Authority, Single Family Mortgage Rev.,
Collateral Home Mortgage Bond Program II, "B", 5.15%, 2019 410 419,045
- ----------------------------------------------------------------------------------------------------------------------------------
$2,446,960
- ----------------------------------------------------------------------------------------------------------------------------------
State & Local
Appropriation - 8.2% Alabama Building Renovation Authority, AMBAC, 6%, 2014 $1,515 $1,782,443
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Public School & College, Capital Improvement, FGIC, 5.125%,
2013 1,000 1,105,470
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Public School & College, Capital Improvement, "A", 5%, 2019 500 528,635
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Public School & College, Capital Improvement, "C", 5.75%,
2017 - 2018 2,035 2,328,939
- ----------------------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, Board of Education, "A", FSA, 5.8%, 2020 865 967,632
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2013 - 2016+
(+) 1,000 1,321,080
- ----------------------------------------------------------------------------------------------------------------------------------
$8,034,199
- ----------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.1% Virgin Islands Public Finance Authority, "A", ASST GTY, 5.5%, 2018 $1,000 $1,051,750
- ----------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.5% Childrens Trust Fund, Settlement Rev., PR, 5.375%, 2033 $480 $473,400
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Alabama Board of Education Rev. (Shelton State Community College), MBIA,
3.9% 6%, 2004(++) $1,000 $1,044,730
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Board of Education Rev., Refunding & Improvement (Southern
Union State Community College), MBIA, 5%, 2022 1,000 1,050,720
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama State Board of Education, Tuition Rev. John C. Calhoun
Community College, "A", FGIC, 5.25%, 2023 300 321,537
- ----------------------------------------------------------------------------------------------------------------------------------
Auburn University, AL, General Fee Rev., AMBAC, 5.25%, 2016 750 833,572
- ----------------------------------------------------------------------------------------------------------------------------------
University of Alabama, University Rev., General Fee, FGIC, 5%, 2021 525 557,802
- ----------------------------------------------------------------------------------------------------------------------------------
$3,808,361
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 10.6% Alabama Municipal Electric Power Authority, "A", MBIA, 5%, 2023 $1,000 $1,050,930
- ----------------------------------------------------------------------------------------------------------------------------------
DeKalb & Cherokee County, AL, Gas Rev., AMBAC, 5.4%, 2016 2,000 2,171,320
- ----------------------------------------------------------------------------------------------------------------------------------
Guam Power Authority Rev., RITES, AMBAC, 9.0426%, 2013+(+) 500 619,790
- ----------------------------------------------------------------------------------------------------------------------------------
Guam Power Authority Rev., RITES, AMBAC, 8.5426%, 2018+(+) 4,500 5,051,070
- ----------------------------------------------------------------------------------------------------------------------------------
Southeastern Alabama Gas District Systems Rev., "A", AMBAC, 5.5%, 2020 1,000 1,120,000
- ----------------------------------------------------------------------------------------------------------------------------------
Tuskegee, AL, Utilities Board, AMBAC, 5.5%, 2022 400 441,340
- ----------------------------------------------------------------------------------------------------------------------------------
$10,454,450
- ----------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Alabama Drinking Water Finance Authority, Revolving Fund Loan, "A",
Revenue - 15.9% AMBAC, 6%, 2021 $725 $850,084
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Drinking Water Finance Authority, Revolving Fund Loan, "C",
AMBAC, 5.75%, 2018 1,000 1,146,710
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Water Pollution Control Authority, Revolving Fund Loan, "A",
AMBAC, 5%, 2009 500 561,180
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Water Pollution Control Authority, Revolving Fund Loan, "B",
AMBAC, 5.5%, 2016 - 2020 2,380 2,575,136
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Water Pollution Control Authority, Revolving Fund Loan,
AMBAC, 5.75%, 2019 1,000 1,133,430
- ----------------------------------------------------------------------------------------------------------------------------------
Bessemer, AL, Water Rev., Warrants, "A", 5.75%, 2026 1,000 1,095,450
- ----------------------------------------------------------------------------------------------------------------------------------
Jasper, AL, Waterworks & Sewer Board, "A", AMBAC, 5.2%, 2020 750 804,383
- ----------------------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, Sewer Rev., Capital Improvement Warrants, "A",
FGIC, 5.375%, 2009(++) 1,000 1,143,590
- ----------------------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, Sewer Rev., Warrants, "D", FGIC, 5.7%, 2007(++) 1,000 1,118,980
- ----------------------------------------------------------------------------------------------------------------------------------
Limestone County, AL, Water Authority, FGIC, 5.5%, 2026 2,650 2,893,270
- ----------------------------------------------------------------------------------------------------------------------------------
Madison, AL, Water & Wastewater Board, MBIA, 5.5%, 2019 1,000 1,099,940
- ----------------------------------------------------------------------------------------------------------------------------------
Mobile, AL, Water & Sewer Commission, FGIC, 5.25%, 2016 1,000 1,106,430
- ----------------------------------------------------------------------------------------------------------------------------------
Ozark, AL, Utilities Board Water & Sewer Rev. AMBAC, 5%, 2031 100 103,197
- ----------------------------------------------------------------------------------------------------------------------------------
$15,631,780
- ----------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $86,354,522) $94,936,582
- ----------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 2.1%
- ----------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), due 4/07/04 $200 $200,000
- ----------------------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, CA, Toll Bridge Rev. "A", due 4/07/04 100 100,000
- ----------------------------------------------------------------------------------------------------------------------------------
Illinois Health Facilities Authority Rev. (University of Chicago
Hospital), due 4/01/04 600 600,000
- ----------------------------------------------------------------------------------------------------------------------------------
Jackson County, MS, Pollution Control Rev. (Chevron U.S.A., Inc.),
due 4/01/04 50 50,000
- ----------------------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, Sewer Rev., due 4/07/04 1,115 1,115,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost, $2,065,000) $2,065,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $88,419,522) $97,001,582
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.1% 1,041,279
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $98,042,861
- ----------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/04 MFS(R) ARKANSAS MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Municipal Bonds - 95.3%
- ----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 1.3% Little Rock, AR, Airport Rev., "A", FSA, 5.25%, 2019 $800 $853,424
- ----------------------------------------------------------------------------------------------------------------------------------
Virgin Island Authority Marine Rev., "A", FSA, 5.25%, 2018 1,000 1,071,220
- ----------------------------------------------------------------------------------------------------------------------------------
$1,924,644
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 7.2% Arkansas College Savings, "A", 0%, 2017 $1,840 $1,055,847
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Federal Highway, Grant Anticipation Tax Rev., 5%, 2014 1,500 1,660,425
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Federal Highway, Grant Anticipation Tax Rev., "A", 5.5%, 2011 850 969,187
- ----------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, Infrastructure, RITES, 9.5771%, 2019+
(+) 1,250 1,575,025
- ----------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, RITES, MBIA, 10.0771%, 2020+(+) 3,000 3,991,500
- ----------------------------------------------------------------------------------------------------------------------------------
Sebastian County, AR, Community Refunding & Improvement, AMBAC,
5.6%, 2007(++) 1,500 1,683,570
- ----------------------------------------------------------------------------------------------------------------------------------
$10,935,554
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations - Puerto Rico Municipal Finance Agency, RITES, FSA, 9.6169%, 2017 -
Improvement - 3.3% 2018+(+) $3,985 $5,068,247
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations - Arkansas, Capital Appreciation, College Savings, "B", 0%, 2012 -
Schools - 4.5% 2015 $4,450 $3,074,248
- ----------------------------------------------------------------------------------------------------------------------------------
Little Rock, AR, School District Construction, "C", FSA, 5%, 2017 1,000 1,067,120
- ----------------------------------------------------------------------------------------------------------------------------------
Little Rock, AR, School District, "A", FSA, 5.5%, 2005 490 507,963
- ----------------------------------------------------------------------------------------------------------------------------------
Little Rock, AR, School District, "A", FSA, 5.4%, 2017 1,000 1,089,740
- ----------------------------------------------------------------------------------------------------------------------------------
Rogers, AR, School District, Number 030, Refunding & Construction,
"A", AMBAC, 5%, 2007(++) 1,000 1,105,790
- ----------------------------------------------------------------------------------------------------------------------------------
$6,844,861
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Arkansas Development Finance Authority, Health Care Facilities Rev.
Hospitals - 11.6% (Sisters of Mercy), "A", MBIA, 5%, 2019 $4,000 $4,047,360
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority, Health Refunding (Sister of
Mercy), "A", MBIA, 5%, 2013 4,340 4,836,973
- ----------------------------------------------------------------------------------------------------------------------------------
Batesville, AR, Medical District Rev. (White River Medical Center),
5.5%, 2024 750 765,555
- ----------------------------------------------------------------------------------------------------------------------------------
Baxter County, AR, Hospital Rev., Refunding & Improvement, "B",
5.6%, 2021 1,500 1,536,195
- ----------------------------------------------------------------------------------------------------------------------------------
Crittenden County, AR, 7.15%, 2025 750 744,765
- ----------------------------------------------------------------------------------------------------------------------------------
Jefferson County, AR, Hospital Rev., Refunding & Improvement
(Regional Medical Center), 5.8%, 2021 1,000 1,057,390
- ----------------------------------------------------------------------------------------------------------------------------------
Little Rock, AR, Health Facilities Board, Baptist Health-Bri
Project, 5%, 2014 500 537,415
- ----------------------------------------------------------------------------------------------------------------------------------
Little Rock, AR, Health Facilities Hospital Board Rev. (Baptist
Medical Center), 6.9%, 2009 400 471,736
- ----------------------------------------------------------------------------------------------------------------------------------
North Little Rock, AR, Baptist Health Facilities, 5.7%, 2022 500 523,470
- ----------------------------------------------------------------------------------------------------------------------------------
Pulaski County, AR, Hospital Rev. (Arkansas Children's Hospital), "B",
5.25%, 2015 - 2016 1,500 1,573,810
- ----------------------------------------------------------------------------------------------------------------------------------
Sebastian County, AR, Health Facilities Improvement (Sparks Regional
Medical Center), "A", 5.25%, 2021 1,000 1,025,950
- ----------------------------------------------------------------------------------------------------------------------------------
State of Arkansas, Development Finance Authority Rev. (Washington
Regional Medical Center), 7.25%, 2020 500 559,210
- ----------------------------------------------------------------------------------------------------------------------------------
$17,679,829
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Arkansas Development Finance Authority Rev., Evangelical Lutheran
Term Care - 0.9% Project, "B", AMBAC, 5.375%, 2019 $1,315 $1,442,976
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Jonesboro, AR, Industrial Development Rev., Anheuser Busch Project,
Other - 0.7% 4.6%, 2012 $1,000 $1,072,480
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Arkansas State Development Finance Authority, Industrial Facilities
Paper - 1.3% Rev. (Potlatch Corp.), 7.75%, 2025 $250 $270,402
- ----------------------------------------------------------------------------------------------------------------------------------
Camden, AR, Environmental Improvement (International Paper Co.),
"A", 7.625%, 2018 1,000 1,051,950
- ----------------------------------------------------------------------------------------------------------------------------------
Pine Bluff, AR, Environmental Improvement (International Paper Co.),
"A", 5.55%, 2022 250 255,678
- ----------------------------------------------------------------------------------------------------------------------------------
Pine Bluff, AR, Environmental Refunding (International Paper Co.), "A",
6.7%, 2020 300 333,063
- ----------------------------------------------------------------------------------------------------------------------------------
$1,911,093
- ----------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Fort Smith, AR, Residential Housing (Gorman Towers), "A", GNMA,
Revenue - 2.0% 5.45%, 2037 $1,000 $1,033,310
- ----------------------------------------------------------------------------------------------------------------------------------
Pulaski County, AR, Public Facilities Board, "A", GNMA, 5.75%, 2034 1,910 1,975,761
- ----------------------------------------------------------------------------------------------------------------------------------
$3,009,071
- ----------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Harrison, AR, Residential Housing Facilities Board, Single Family
Local - 5.6% Mortgage Rev., FGIC, 7.4%, 2011(++) $4,000 $5,108,840
- ----------------------------------------------------------------------------------------------------------------------------------
Lonoke County, AR, Residential Housing Facilities, FNMA, 7.9%, 2011 195 204,399
- ----------------------------------------------------------------------------------------------------------------------------------
Pulaski County, AR, Public Facilities Board Rev., "C", FNMA, 0%, 2014 2,750 1,686,988
- ----------------------------------------------------------------------------------------------------------------------------------
Sherwood, AR, Residential Housing Facilities Board, Single Family
Rev., MBIA, 7.5%, 2010(++) 1,250 1,588,863
- ----------------------------------------------------------------------------------------------------------------------------------
$8,589,090
- ----------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 9.8% Arkansas Development Finance Authority Rev., "1", 0%, 2011 $955 $546,289
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority Rev., "A", GNMA, 4.7%, 2024 1,625 1,614,405
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority, Mortgage Backed Securities
Program, "B", 5%, 2029 330 331,135
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority, Mortgage Backed Securities
Program, "C", GNMA, 5.35%, 2027 1,980 2,008,631
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority, Mortgage Backed Securities
Program, "E", GNMA, 5.4%, 2034 1,000 1,017,870
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Finance Authority, Mortgage Backed Securities Program, "B",
GNMA, 4.45%, 2034 1,780 1,820,228
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Finance Authority, Single Family, "F", GNMA, 7.45%, 2027 488 495,485
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Finance Authority, Single Family, Mortgage Backed
Securities Program, 5.3%, 2023 840 863,596
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Finance Authority, Single Family, Mortgage Backed
Securities Program, "B", GNMA, 6.7%, 2027 1,355 1,404,403
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Finance Authority, Single Family, Mortgage Backed
Securities Program, "D", 5.85%, 2024 1,520 1,606,579
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Finance Authority, Single Family, Mortgage Backed
Securities Program, "I", GNMA, 5.3%, 2033 750 762,420
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Housing Development Agency, Single Family Mortgage Program,
8.375%, 2011(++) 1,000 1,345,790
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Authority, Mortgage Backed Securities,
"A", 4.375%, 2017 1,000 1,005,200
- ----------------------------------------------------------------------------------------------------------------------------------
$14,822,031
- ----------------------------------------------------------------------------------------------------------------------------------
State & Local Arkansas Development Finance Authority, Economic Development Rev., "B",
Appropriation - 3.6% 5%, 2018 $175 $181,549
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority, Economic Development Rev.,
"B", AMBAC, 5.8%, 2020 500 549,125
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority, Park Mt. Magazine Project, FSA,
5%, 2019 1,715 1,844,225
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Public Health, Laboratory Project, AMBAC, 5%, 2018 580 621,957
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority Rev. (State Office Building), XCLA,
5.25%, 2025 2,000 2,266,240
- ----------------------------------------------------------------------------------------------------------------------------------
$5,463,096
- ----------------------------------------------------------------------------------------------------------------------------------
Student Loan Revenue - 1.4% Arkansas Student Loan Authority, "B", 6.25%, 2010 $2,000 $2,196,220
- ----------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 3.0% Little Rock, AR, Hotel & Restaurant, 7.375%, 2015 $2,790 $3,542,128
- ----------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev., 5.5%, 2022 1,000 1,034,380
- ----------------------------------------------------------------------------------------------------------------------------------
$4,576,508
- ----------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.2% Childrens Trust Fund, Settlement Rev., PR, 5.375%, 2033 $245 $241,631
- ----------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico Highway & Transportation Authority, "B",
Tax - 2.4% MBIA, 5.875%, 2021 $2,000 $2,340,200
- ----------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico Highway & Transportation Authority, "G",
5%, 2023 750 781,140
- ----------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico Highway & Transportation Authority, "G",
FGIC, 5%, 2022 500 532,870
- ----------------------------------------------------------------------------------------------------------------------------------
$3,654,210
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Arkansas State University, Student Fee-ASU Newport Campus, ABAC, 5%,
10.3% 2028 $700 $719,075
- ----------------------------------------------------------------------------------------------------------------------------------
Conway, AR, Public Facilities Rev. (Hendrix College), 5.85%, 2016 1,000 1,063,400
- ----------------------------------------------------------------------------------------------------------------------------------
Siloam Springs, AR, Public Education Facilities, Capital Improvement
(John Brown University), AMBAC, 5.35%, 2020 500 539,965
- ----------------------------------------------------------------------------------------------------------------------------------
University of Arkansas, University Facilities Rev. (Fayetteville
Campus), FGIC, 5.5%, 2020 2,870 3,212,047
- ----------------------------------------------------------------------------------------------------------------------------------
University of Arkansas, University Facilities Rev. (Fayetteville Campus),
FGIC, 5%, 2027 - 2032 5,655 5,853,510
- ----------------------------------------------------------------------------------------------------------------------------------
University of Arkansas, University Revs. (Fayetteville Campus),
FGIC, 5.5%, 2016 1,765 2,024,349
- ----------------------------------------------------------------------------------------------------------------------------------
University of Arkansas, University Revs. (Fort Smith Campus), FGIC,
5%, 2021 1,000 1,062,110
- ----------------------------------------------------------------------------------------------------------------------------------
University of Central Arkansas, "A", AMBAC, 5%, 2023 1,100 1,142,867
- ----------------------------------------------------------------------------------------------------------------------------------
$15,617,323
- ----------------------------------------------------------------------------------------------------------------------------------
Universities -
Dormitories - 2.2% Arkansas State University Rev., Housing Systems, AMBAC, 5.15%, 2021 $1,240 $1,311,424
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Tech University Rev., Housing Systems, AMBAC, 5.2%, 2026 1,000 1,055,990
- ----------------------------------------------------------------------------------------------------------------------------------
Pope County, AR, Residential Housing, Arkansas Tech University
Project, "A", 6%, 2027 1,000 973,080
- ----------------------------------------------------------------------------------------------------------------------------------
$3,340,494
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Jefferson County, AR, Pollution Control Rev. (Arkansas Power & Light
Owned - 0.7% Co.), 6.3%, 2018 $1,050 $1,073,163
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 7.4% Benton, AR, Utilities Rev., AMBAC, 5%, 2030 $470 $486,022
- ----------------------------------------------------------------------------------------------------------------------------------
North Little Rock, AR, Electric Rev., "A", MBIA, 6.5%, 2010 - 2015 8,000 9,767,040
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., "NN", 5.125%, 2024 1,000 1,050,910
- ----------------------------------------------------------------------------------------------------------------------------------
$11,303,972
- ----------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 15.9% Arkansas Community Public Water Systems, "B", MBIA, 5%, 2017 $1,400 $1,513,890
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority Waste, Revolving Loan Fund, "A",
5%, 2011 - 2012 1,000 1,121,170
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority Waste, Revolving Loan Fund,
"A", 5.5%, 2015 1,500 1,736,370
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority, Economic Development Rev.,
"I", AMBAC, 5.65%, 2014 375 407,074
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority, Revolving Loan Fund, "A",
5.85%, 2006(++) 2,130 2,351,200
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority, Revolving Loan Fund, "A",
5.5%, 2018 1,750 2,026,115
- ----------------------------------------------------------------------------------------------------------------------------------
Beaver, AR, Water District Rev., AMBAC, 5%, 2016 - 2017 2,000 2,168,460
- ----------------------------------------------------------------------------------------------------------------------------------
Fort Smith, AR, Water & Sewer Rev., "C", FSA, 5.25%, 2020 1,315 1,435,625
- ----------------------------------------------------------------------------------------------------------------------------------
Fort Smith, AR, Water & Sewer Rev., AMBAC, 5.65%, 2019 1,000 1,126,010
- ----------------------------------------------------------------------------------------------------------------------------------
Fort Smith, AR, Water & Sewer Rev., Refunding & Construction, "A", FSA,
5%, 2019 - 2021 4,875 5,146,911
- ----------------------------------------------------------------------------------------------------------------------------------
Little Rock, AR, Sewer Rev., Refunding & Construction, 5%, 2022 1,750 1,808,398
- ----------------------------------------------------------------------------------------------------------------------------------
Paragould, AR, Water Sewer & Electric Rev., AMBAC, 5.6%, 2020 765 869,354
- ----------------------------------------------------------------------------------------------------------------------------------
South Sebastian County, AR, Water Refunding, MBIA, 5%, 2038 1,000 1,024,310
- ----------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Water & Power Authority Rev., ASST GTY, 5.3%, 2018 1,250 1,347,600
- ----------------------------------------------------------------------------------------------------------------------------------
$24,082,487
- ----------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $131,347,386) $144,848,980
- ----------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.6%
- ----------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), due 4/07/04 $1,900 $1,900,000
- ----------------------------------------------------------------------------------------------------------------------------------
California State, Department of Water Resources, Power Supply Rev.,
due 4/07/04 200 200,000
- ----------------------------------------------------------------------------------------------------------------------------------
New York City, NY, due 4/01/04 100 100,000
- ----------------------------------------------------------------------------------------------------------------------------------
Oklahoma Industries Authority, Health System Rev. & Refunding
(Integris Baptist Medical Center), "B", due 4/01/04 200 200,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost, $2,400,000) $2,400,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $133,747,386) $147,248,980
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 3.1% 4,638,184
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $151,887,164
- ----------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/04 MFS(R) CALIFORNIA MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Municipal Bonds - 98.8%
- ----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 4.6% Long Beach, CA, Harbor Rev., "A" FGIC, 5.25%, 2018 $3,500 $3,813,740
- ----------------------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Department of Airports Rev. (Ontario International
Airport), "A", FGIC, 6%, 2017 4,100 4,420,620
- ----------------------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Harbor Department Rev., "B", 5.375%, 2023 3,000 3,108,240
- ----------------------------------------------------------------------------------------------------------------------------------
Port Oakland, CA, "K", 5.75%, 2020 4,000 4,414,280
- ----------------------------------------------------------------------------------------------------------------------------------
San Francisco, CA, International Airport Rev., Second Series Issue 5, FGIC,
6.5%, 2019 4,000 4,095,720
- ----------------------------------------------------------------------------------------------------------------------------------
$19,852,600
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations - Commonwealth of Puerto Rico, ROLS, Series II R 124B, XLCA, 9.806%,
General Purpose - 8.0% 2017+(+) $1,500 $1,998,930
- ----------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, ROLS, Series II R 184C, FGIC, 8.4853%,
2020+(+) 3,300 4,445,034
- ----------------------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, RITES, 9.0197%, 2014+(+) 5,405 7,029,094
- ----------------------------------------------------------------------------------------------------------------------------------
Oakland, CA, "A" Measure DD, MBIA, 5%, 2025 2,845 2,960,223
- ----------------------------------------------------------------------------------------------------------------------------------
State of California, 10%, 2007 1,055 1,316,577
- ----------------------------------------------------------------------------------------------------------------------------------
State of California, 7%, 2010 2,000 2,478,000
- ----------------------------------------------------------------------------------------------------------------------------------
State of California, 5.5%, 2016 3,000 3,292,680
- ----------------------------------------------------------------------------------------------------------------------------------
State of California, 5%, 2022 2,000 2,029,380
- ----------------------------------------------------------------------------------------------------------------------------------
State of California, 5.125%, 2025 2,000 2,029,000
- ----------------------------------------------------------------------------------------------------------------------------------
State of California, AMBAC, 7.2%, 2008 1,600 1,899,200
- ----------------------------------------------------------------------------------------------------------------------------------
State of California, AMBAC, 6.3%, 2010 3,000 3,586,590
- ----------------------------------------------------------------------------------------------------------------------------------
State of California, RITES, "B", 9.9967%, 2017+(+) 1,250 1,624,475
- ----------------------------------------------------------------------------------------------------------------------------------
$34,689,183
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 17.8% Antelope Valley, CA (Union High School), "A", MBIA, 5%, 2027 $1,500 $1,560,420
- ----------------------------------------------------------------------------------------------------------------------------------
Butte Glenn Community College District, "A", MBIA, 5%, 2026 1,885 1,962,398
- ----------------------------------------------------------------------------------------------------------------------------------
Campbell, CA, Union High School District, FSA, 5%, 2021 1,280 1,364,339
- ----------------------------------------------------------------------------------------------------------------------------------
Capistrano, CA, Union High School District, "A", FGIC, 5.875%, 2020 1,185 1,347,736
- ----------------------------------------------------------------------------------------------------------------------------------
Centinela Valley, CA, Union High School Election, "C", FGIC, 5.2%,
2032 1,000 1,050,370
- ----------------------------------------------------------------------------------------------------------------------------------
Chaffey, CA, Union High School District, "C", FSA, 5%, 2027 1,000 1,039,400
- ----------------------------------------------------------------------------------------------------------------------------------
Colton, CA, Joint Union School District, "A", FGIC, 5.375%, 2026 1,200 1,305,600
- ----------------------------------------------------------------------------------------------------------------------------------
Coronada, CA, Union School District, "A", 5.7%, 2020 1,285 1,441,076
- ----------------------------------------------------------------------------------------------------------------------------------
Escondido, CA, Union School District, "A", FSA, 5%, 2026 1,000 1,037,300
- ----------------------------------------------------------------------------------------------------------------------------------
Fresno, CA, Union School District, "C", MBIA, 5.9%, 2019 1,960 2,353,686
- ----------------------------------------------------------------------------------------------------------------------------------
Glendale, CA, Union School District, "B", FSA, 5.5%, 2018 4,275 4,797,790
- ----------------------------------------------------------------------------------------------------------------------------------
Inglewood, CA, Union School District, "A", FGIC, 6%, 2019 1,695 1,956,335
- ----------------------------------------------------------------------------------------------------------------------------------
Little Lake, CA, City School District, "A", FSA, 6.125%, 2025 1,035 1,172,510
- ----------------------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Union School District Election of 1997, "E", MBIA,
5.125%, 2027 5,000 5,241,650
- ----------------------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Union School District, RITES, FSA, 9.0197%, 2020+(+) 5,000 5,904,100
- ----------------------------------------------------------------------------------------------------------------------------------
Manhattan Beach, CA, Union High School, Election of 2000, Capital
Appreciation, "A", FGIC, 0%, 2020 2,415 1,096,724
- ----------------------------------------------------------------------------------------------------------------------------------
Manhattan Beach, CA, Union School Election of 2000, "A", FGIC,
5.625%, 2018 - 2019 3,570 4,066,734
- ----------------------------------------------------------------------------------------------------------------------------------
Morgan Hill, CA, Union School District, FGIC, 5.5%, 2020 2,545 2,818,002
- ----------------------------------------------------------------------------------------------------------------------------------
Oak Grove, CA, School District Election of 1995, FGIC, 5.25%, 2025 700 744,093
- ----------------------------------------------------------------------------------------------------------------------------------
Oceanside, CA, Union School District Election of 2000, "C", MBIA,
5.2%, 2025 500 533,430
- ----------------------------------------------------------------------------------------------------------------------------------
Oceanside, CA, Union School District Election of 2000, "C", MBIA,
5.25%, 2032 1,940 2,065,246
- ----------------------------------------------------------------------------------------------------------------------------------
Rowland, CA, Union School District, "A", FSA, 5.5%, 2020 1,250 1,385,550
- ----------------------------------------------------------------------------------------------------------------------------------
Sacramento, CA, City Union School District, "A", 5.875%, 2009(++) 2,075 2,487,323
- ----------------------------------------------------------------------------------------------------------------------------------
San Diego, CA, Union School District, "C", FSA, 5%, 2026 2,150 2,237,591
- ----------------------------------------------------------------------------------------------------------------------------------
San Gabriel, CA, Union School District, "A", FSA, 5%, 2024 2,000 2,081,660
- ----------------------------------------------------------------------------------------------------------------------------------
San Jose, CA, Evergreen Community College District, "B", FGIC, 5.5%,
2020 1,425 1,568,255
- ----------------------------------------------------------------------------------------------------------------------------------
San Ysidro, CA, School District, AMBAC, 6.125%, 2021 960 1,146,931
- ----------------------------------------------------------------------------------------------------------------------------------
Santa Clara, CA, Union School District, FGIC, 5.5%, 2019 2,210 2,454,934
- ----------------------------------------------------------------------------------------------------------------------------------
Santa Maria, CA, Joint Union High School District, "A", FSA,
5.375%, 2020 - 2021 2,330 2,607,154
- ----------------------------------------------------------------------------------------------------------------------------------
Sweetwater, CA, Union High School, FSA, 5%, 2021 - 2022 6,245 6,626,398
- ----------------------------------------------------------------------------------------------------------------------------------
Tehachapi, CA, Union School District, "A", FGIC, 5.625%, 2020 1,100 1,234,574
- ----------------------------------------------------------------------------------------------------------------------------------
Visalia, CA, Union School District, Certificate Participants, MBIA,
0%, 2005 4,655 4,554,685
- ----------------------------------------------------------------------------------------------------------------------------------
Vista, CA, Union School District, "A", FSA, 5%, 2023 1,000 1,048,660
- ----------------------------------------------------------------------------------------------------------------------------------
Walnut Valley, CA, Union School District, "B", AMBAC, 6%, 2011 1,600 1,934,416
- ----------------------------------------------------------------------------------------------------------------------------------
Washington, CA, Union School District Election of 1999, "A", FGIC,
5.625%, 2021 1,000 1,123,350
- ----------------------------------------------------------------------------------------------------------------------------------
$77,350,420
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue -
Hospitals - 7.6% Abag Finance Authority Rev. (San Diego Hospital), "C", 5.375%, 2020 $1,000 $1,015,510
- ----------------------------------------------------------------------------------------------------------------------------------
California Health Facilities Financing Authority Rev. (Marshall
Hospital), "A", 5.25%, 2018 1,000 1,049,150
- ----------------------------------------------------------------------------------------------------------------------------------
California Health Facilities Financing Authority Rev., Health
Facilities (Adventist Health Systems), "A", 5%, 2033 2,000 2,000,600
- ----------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority Rev. (Henry
Mayo Newhall Memorial Hospital), "A", 5%, 2018 2,000 2,068,020
- ----------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority Rev. (Kaiser
Permanente), "A", 5.5%, 2032 2,000 2,080,940
- ----------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority Rev. (Los
Angeles Children's Hospital), 5.125%, 2019 4,000 4,158,600
- ----------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority Rev. (St.
Joseph Health Systems Group), 6.625%, 2004(++) 2,000 2,067,140
- ----------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority Rev., CHFC,
0%, 2007 - 2008(++) 9,990 9,065,396
- ----------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority Rev., Health
Facilities (Memorial Health Services), "A", 6%, 2023 1,500 1,627,545
- ----------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development, "B", 5.625%, 2042 4,000 4,158,880
- ----------------------------------------------------------------------------------------------------------------------------------
Central California Joint Powers Health Financing (Community
Hospitals of Central California), 5.625%, 2021 1,000 1,019,930
- ----------------------------------------------------------------------------------------------------------------------------------
Corona, CA, Certificate of Participants, Corona Community Mand Tnr,
8%, 2005(++) 585 621,703
- ----------------------------------------------------------------------------------------------------------------------------------
Tahoe Forest, CA, Hospital District Rev., "A", 5.85%, 2022 1,000 1,031,940
- ----------------------------------------------------------------------------------------------------------------------------------
Washington Township, CA, Health Care Rev., 5%, 2018 1,000 1,028,650
- ----------------------------------------------------------------------------------------------------------------------------------
$32,994,004
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long California Health Facilities Financing Authority Rev. (Paradise
Term Care - 0.6% Valley Estates), 5.125%, 2022 $1,000 $1,017,360
- ----------------------------------------------------------------------------------------------------------------------------------
La Verne, CA, Certificate Participants (Brethren Hillcrest Homes),
"B",
6.625%, 2025 1,000 1,030,630
- ----------------------------------------------------------------------------------------------------------------------------------
Millbrae, CA, Residential Facilities Rev. (Magnolia of Millbrae),
7.375%, 2027 485 508,537
- ----------------------------------------------------------------------------------------------------------------------------------
$2,556,527
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Abag Finance Authority for Non-Profit Corporations (Rhoda Haas
Other - 0.5% Goldman Plaza), CALIF HL, 5.125%, 2015 $2,000 $2,109,840
- ----------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.4% California Statewide Communities Development Authority Rev. (Prides
Industries), 7.125%, 2016 $1,820 $1,878,113
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Environmental Services - California Pollution Control, Financing Authority, Solid Waste
0.5% Disposal Rev. (Browning Ferris, Inc.), 5.8%, 2016 $2,000 $1,894,280
- ----------------------------------------------------------------------------------------------------------------------------------
California Pollution Control, Financing Authority Rev. (Laidlaw, Inc.), "A",
6.7%, 2007 2,750 123,750
- ----------------------------------------------------------------------------------------------------------------------------------
$2,018,030
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - California Pollution Control, Financing Authority Rev. (Frito-Lay, Inc.),
Other - 0.2% 6.375%, 2004 $1,025 $1,029,715
- ----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment &
Tourism - 0.6% Del Mar, CA, Race Track Authority Rev., 6.2%, 2011 $1,365 $1,462,898
- ----------------------------------------------------------------------------------------------------------------------------------
Del Mar, CA, Race Track Authority Rev., 6.45%, 2013 1,350 1,356,615
- ----------------------------------------------------------------------------------------------------------------------------------
$2,819,513
- ----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - California Infrastruture & Economic Development Rev., MBIA, 5.5%,
Other - 1.0% 2019 $1,000 $1,118,440
- ----------------------------------------------------------------------------------------------------------------------------------
South Coast Air Quality Management District Building Corp.,
California Rev., "B" AMBAC, 0.01%, 2005 3,480 3,424,946
- ----------------------------------------------------------------------------------------------------------------------------------
$4,543,386
- ----------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing California Housing Finance Agency Rev., Multi-Unit Rental Housing,
Revenue - 3.5% "B II", 6.7%, 2015 $2,750 $2,763,283
- ----------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority Rev. (Irvine
Apartments), 5.25%, 2025 6,000 6,246,300
- ----------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority Rev. (Irvine
Apartments), "A3", 5.1%, 2025 2,000 2,104,080
- ----------------------------------------------------------------------------------------------------------------------------------
Palmdale, CA, Multi-Family Housing Rev., "A", FNMA, 7.375%, 2024 1,000 1,023,040
- ----------------------------------------------------------------------------------------------------------------------------------
San Bernardino County, CA, Multi-Family Housing Rev. (Equity
Residential/Redlands), "A", 5.2%, 2028 3,000 3,210,720
- ----------------------------------------------------------------------------------------------------------------------------------
$15,347,423
- ----------------------------------------------------------------------------------------------------------------------------------
Parking - 0.3% San Francisco, CA, Union Square, 6%, 2020 $1,000 $1,146,510
- ----------------------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax Contra Costa, CA, Transportation & Sales Tax Rev., "A", 6.875%, 2007
Revenue - 0.3% (++) $1,350 $1,467,369
- ----------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - California Rural Home Mortgage Finance Authority Rev., GNMA, 7.3%,
Local - 1.2% 2031 $150 $164,010
- ----------------------------------------------------------------------------------------------------------------------------------
California Rural Home Mortgage Finance Authority Rev., Mortgage
Backed Securities Program, "B4", GNMA, 6.35%, 2029 250 255,977
- ----------------------------------------------------------------------------------------------------------------------------------
Pomona, CA, Single Family Mortgage Rev., GNMA, 7.375%, 2010(++) 1,705 1,978,465
- ----------------------------------------------------------------------------------------------------------------------------------
Pomona, CA, Single Family Mortgage Rev., GNMA, 7.5%, 2023(++) 2,000 2,848,460
- ----------------------------------------------------------------------------------------------------------------------------------
San Bernardino County, CA, Single Family Mortgage Rev., GNMA,
7.375%, 2020 90 93,144
- ----------------------------------------------------------------------------------------------------------------------------------
San Bernardino County, CA, Single Family Mortgage Rev., GNMA, 7.65%, 2023 5 5,009
- ----------------------------------------------------------------------------------------------------------------------------------
$5,345,065
- ----------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 1.0% California Housing Finance Agency Rev., Home Mortgage, FSA, 0%, 2019 $4,710 $1,961,244
- ----------------------------------------------------------------------------------------------------------------------------------
California Housing Finance Agency Rev., Home Mortgage, MBIA, 0%,
2028 8,005 2,297,995
- ----------------------------------------------------------------------------------------------------------------------------------
$4,259,239
- ----------------------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 1.0% California Pollution Control Financing Authority, Solid Waste
Disposal Rev. (West County Resource Recovery), "A", 5.125%, 2014 $1,000 $1,032,460
- ----------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority, Solid Waste
Facilities Rev. (Republic Services, Inc.), "A", 4.95%, 2012 1,000 1,019,330
- ----------------------------------------------------------------------------------------------------------------------------------
South Bayside Waste Management Authority, California Solid Waste
System Rev., AMBAC, 5.75%, 2020 2,100 2,379,720
- ----------------------------------------------------------------------------------------------------------------------------------
$4,431,510
- ----------------------------------------------------------------------------------------------------------------------------------
State & Local Anaheim, CA, Public Financing Authority Lease Rev., "A", FSA, 6%,
Appropriation - 12.3% 2024 $1,000 $1,183,450
- ----------------------------------------------------------------------------------------------------------------------------------
Banning, CA, Certificate Participants, Water Systems Improvement
Project, AMBAC, 8%, 2019 1,000 1,342,210
- ----------------------------------------------------------------------------------------------------------------------------------
California Public Works Board Lease Rev., Department of Corrections
State Prison, "A", 7.4%, 2010 5,000 6,123,150
- ----------------------------------------------------------------------------------------------------------------------------------
California Public Works Board, Department of Justice, "D", 5.25%,
2020 1,565 1,629,447
- ----------------------------------------------------------------------------------------------------------------------------------
Fortuna, Parlier, & Susanville, CA, Certificate of Participants,
"B", 7.375%, 2017 720 737,172
- ----------------------------------------------------------------------------------------------------------------------------------
Grossmont, CA, Union High School District, MBIA, 0%, 2006 6,000 5,745,000
- ----------------------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Certificate Participants, Antelope Valley
Courthouse, "A", AMBAC, 5.25%, 2027 3,000 3,174,720
- ----------------------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Certificate Participants, Real Property Program, AMBAC,
5.3%, 2027 3,000 3,228,780
- ----------------------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Convention & Exhibition Center Authority,
Certificate Participants, 9%, 2005(++) 1,900 2,143,846
- ----------------------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Convention & Exhibition Center Authority,
Certificate Participants, AMBAC, 0%, 2005 2,400 2,360,904
- ----------------------------------------------------------------------------------------------------------------------------------
Pasadena CA, Certificate Participants, Old Pasadena Parking
Facilities Project, 6.25%, 2018 3,315 3,864,992
- ----------------------------------------------------------------------------------------------------------------------------------
Pomona, CA, Public Financing Authority Rev., "P", 6.25%, 2010 4,020 4,644,145
- ----------------------------------------------------------------------------------------------------------------------------------
Sacramento County, CA, Certificate Participants, Capital Projects,
AMBAC, 5.75%, 2018 1,500 1,717,680
- ----------------------------------------------------------------------------------------------------------------------------------
Sacramento, CA, City Financing Authority Rev., Capital Improvement,
5.5%, 2021 1,635 1,784,880
- ----------------------------------------------------------------------------------------------------------------------------------
Sacramento, CA, City Financing Authority Rev., City Hall &
Redevelopment Projects, "A", FSA, 5%, 2032 2,000 2,061,180
- ----------------------------------------------------------------------------------------------------------------------------------
Salinas, CA, Certificate Participants, Capital Improvement Projects, "A",
5.7%, 2028 2,200 2,355,254
- ----------------------------------------------------------------------------------------------------------------------------------
San Francisco, CA, City & County Certificate Participants (San Bruno
Jail No 3), AMBAC, 5.25%, 2033 3,930 4,180,852
- ----------------------------------------------------------------------------------------------------------------------------------
Santa Ana, CA, Financing Authority Rev. (South Harbor Boulevard),
"B", MBIA, 5.125%, 2019 4,815 5,193,941
- ----------------------------------------------------------------------------------------------------------------------------------
$53,471,603
- ----------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 3.0% Glendale, CA, Redevelopment Agency Tax Allocation, Central Glendale
Redevelopment Project, MBIA, 5.25%, 2021 $2,605 $2,830,411
- ----------------------------------------------------------------------------------------------------------------------------------
Irvine, CA, School District Special Tax Rev., Community Facilities
District
No. 86-1, AMBAC, 5.8%, 2020 3,500 3,979,640
- ----------------------------------------------------------------------------------------------------------------------------------
Livermore, CA, Redevelopment Agency (Livermore Redev PJ Area), "A",
MBIA, 5%, 2032 920 944,325
- ----------------------------------------------------------------------------------------------------------------------------------
Santa Cruz County, CA, Redevelopment Agency Tax Allocation (Oak/
Soquel Community), 5.6%, 2017 1,455 1,586,459
- ----------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev., 5.875%, 2018 1,600 1,663,856
- ----------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev., 5.5%, 2022 2,000 2,068,760
- ----------------------------------------------------------------------------------------------------------------------------------
$13,073,451
- ----------------------------------------------------------------------------------------------------------------------------------
Tax Assessment - 7.3% Brea, CA, Public Finance Authority Rev., MBIA, 0%, 2005 - 2006 $4,650 $4,517,801
- ----------------------------------------------------------------------------------------------------------------------------------
Concord, CA, Redevelopment Agency Tax Allocation, "3", MBIA, 8%,
2018 40 40,646
- ----------------------------------------------------------------------------------------------------------------------------------
Duarte, CA, Redevelopment Agency Tax Allocation, Davis Addition
Project Area, 6.7%, 2014 650 715,156
- ----------------------------------------------------------------------------------------------------------------------------------
Fontana, CA, Redevelopment Agency Tax Allocation, Jurupa Hills
Redevelopment Project, "A", 5.5%, 2027 3,350 3,441,522
- ----------------------------------------------------------------------------------------------------------------------------------
Huntington Park, CA, Public Financing Rev. Wastewater Systems
Project, "A", 6.2%, 2025 2,000 2,050,340
- ----------------------------------------------------------------------------------------------------------------------------------
La Mirada, CA, Redevelopment Agency, Special Tax Rev., Community
Facilities District No. 89-1, 5.7%, 2020 1,500 1,504,905
- ----------------------------------------------------------------------------------------------------------------------------------
Modesto, CA, Irrigation District, Certificate Participants,
Refunding & Capital Improvements, "B", 5.3%, 2022 1,845 1,851,162
- ----------------------------------------------------------------------------------------------------------------------------------
Modesto, CA, Public Financing Authority (John Thurman Field
Renovation), 6.125%, 2016 1,405 1,511,583
- ----------------------------------------------------------------------------------------------------------------------------------
Orange County, CA, Community Facilities District, Special Tax
(Rancho Santa Margarita), "A", 5.55%, 2017 1,000 1,070,000
- ----------------------------------------------------------------------------------------------------------------------------------
Poway, CA, Community Facilities District, Special Tax (Parkway
Business Center), 6.5%, 2010 715 782,782
- ----------------------------------------------------------------------------------------------------------------------------------
Poway, CA, Community Facilities District, Special Tax (Parkway
Business Center), 6.75%, 2015 775 844,773
- ----------------------------------------------------------------------------------------------------------------------------------
Redwood City, CA, Redevelopment Agency Tax Rev. Capital
Appreciation, Redevelopment Project Area 2 A, AMBAC, 0%, 2021 2,500 1,065,050
- ----------------------------------------------------------------------------------------------------------------------------------
Redwood City, CA, Redevelopment Agency, Capital Appreciation, AMBAC,
0%, 2020 2,500 1,142,325
- ----------------------------------------------------------------------------------------------------------------------------------
Riverside County, CA, Public Financing Authority, Tax Allocation
Rev., Redevelopment Projects, "A", 5.25%, 2016 3,120 3,256,687
- ----------------------------------------------------------------------------------------------------------------------------------
San Diego, CA, Redevelopment Agency, Tax Allocation (Centre City),
"B", AMBAC, 5.3%, 2020 1,250 1,363,937
- ----------------------------------------------------------------------------------------------------------------------------------
Torrance, CA, Redevelopment Agency, Tax Allocation, "C", MBIA,
5.45%, 2018 5,740 6,474,950
- ----------------------------------------------------------------------------------------------------------------------------------
$31,633,619
- ----------------------------------------------------------------------------------------------------------------------------------
Tobacco - 1.9% Golden State Tobacco Securitization, "B", 5.625%, 2038 $5,000 $5,095,500
- ----------------------------------------------------------------------------------------------------------------------------------
Golden State Tobacco Securitization, Asset Backed, "A1", 6.25%, 2033 800 783,152
- ----------------------------------------------------------------------------------------------------------------------------------
Tobacco Securitization Authority, "B", 5%, 2028 1,500 1,308,465
- ----------------------------------------------------------------------------------------------------------------------------------
Tobacco Securitization Authority, Northern California Tobacco
Settlement Rev., Asset Backed Bonds, "A", 5.25%, 2031 1,500 1,272,075
- ----------------------------------------------------------------------------------------------------------------------------------
$8,459,192
- ----------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 0.7% Foothill/Eastern Corridor Agency, California Toll Road Rev., Capital
Appreciation, "A", 1%, 2010(++) $2,500 $2,962,000
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges -
7.0% California Educational Facilities Authority Rev., 5%, 2023 $1,000 $1,021,100
- ----------------------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority Rev. (Fresno Pacific
University), "A", 6.75%, 2019 2,000 2,207,740
- ----------------------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority Rev. (L.A. College of
Chiropractic), 5.6%, 2017 2,100 2,020,221
- ----------------------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority Rev. (Pomona College), "B",
5.875%, 2019 2,000 2,347,720
- ----------------------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority Rev. (Santa Clara
University), "A", MBIA, 5%, 2027 1,340 1,386,485
- ----------------------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority Rev., Pooled College &
University Projects, "B", 6%, 2012 1,400 1,495,354
- ----------------------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority Rev., Pooled College &
University Projects, "B", 6.625%, 2020 1,000 1,099,600
- ----------------------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority Rev., Pooled College &
University Projects, "B", 6.3%, 2021 1,000 1,089,360
- ----------------------------------------------------------------------------------------------------------------------------------
California Infrastructure & Economic Development Rev. (Claremont
University Consortium), 5.125%, 2024 1,595 1,669,566
- ----------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities, Notre Dame De Namur University,
6.625%, 2033 1,000 1,004,970
- ----------------------------------------------------------------------------------------------------------------------------------
Foothill-De Anza, CA, Community College District, Election of 1999,
"B", FGIC, 0%, 2024 - 2025 7,500 2,605,455
- ----------------------------------------------------------------------------------------------------------------------------------
Long Beach, CA, Industrial Development Rev. (CSU Foundation), "A",
5.25%, 2023 1,450 1,482,364
- ----------------------------------------------------------------------------------------------------------------------------------
San Diego County, CA, Certificate Participants, (Burnham Institute),
6.25%, 2029 2,300 2,430,295
- ----------------------------------------------------------------------------------------------------------------------------------
University of California Rev., RITES, MBIA, 8.7697%, 2016+(+) 5,705 6,743,709
- ----------------------------------------------------------------------------------------------------------------------------------
University of California, Certificate Participants, San Diego Campus
Projects, "A", 5.25%, 2032 1,840 1,935,257
- ----------------------------------------------------------------------------------------------------------------------------------
$30,539,196
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Secondary California Statewide Communities Development Authority Rev.
Schools - 0.7% (Escondido Charter High School), 7.5%, 2036 $1,000 $1,016,860
- ----------------------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Certificate Participants, 5.7%, 2018 1,900 2,036,154
- ----------------------------------------------------------------------------------------------------------------------------------
$3,053,014
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor California Pollution Control Financing Authority, Pollution Control
Owned - 1.5% Rev. (Pacific Gas & Electric Co.), 5.85%, 2023 $400 $400,088
- ----------------------------------------------------------------------------------------------------------------------------------
California Pollution Control Financing Authority, Pollution Control
Rev. (Pacific Gas & Electric Co.), MBIA, 5.35%, 2016 3,500 3,827,530
- ----------------------------------------------------------------------------------------------------------------------------------
California Pollution Control Financing Authority, Pollution Control
Rev. (Southern California Edison Co.), 6.4%, 2024 500 507,535
- ----------------------------------------------------------------------------------------------------------------------------------
Chula Vista, CA, Industrial Development Rev. (San Diego Gas &
Electric Co.), "A", 4.9%, 2023 2,000 1,987,580
- ----------------------------------------------------------------------------------------------------------------------------------
$6,722,733
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 6.5% Glendale, CA, Electric Works Rev., MBIA, 5.75%, 2019 - 2020 $2,580 $2,926,152
- ----------------------------------------------------------------------------------------------------------------------------------
Northern California Power Agency Public Power Rev., 5.85%, 2010 880 994,902
- ----------------------------------------------------------------------------------------------------------------------------------
Sacramento, CA, Power Authority, Cogeneration Project Rev., MBIA,
5.875%, 2015 5,500 6,123,645
- ----------------------------------------------------------------------------------------------------------------------------------
San Diego, CA, Industrial Development Rev. (San Diego Gas & Electric
Co.), "A", MBIA, 6.1%, 2018 6,000 6,098,760
- ----------------------------------------------------------------------------------------------------------------------------------
Shasta, CA, Joint Powers Financing Authority, County Administration
Building Project, "A", MBIA, 5.25%, 2023 1,000 1,066,650
- ----------------------------------------------------------------------------------------------------------------------------------
Southern California Public Power Authority, Transmission Project
Rev., "A", 0%, 2005 4,205 4,143,649
- ----------------------------------------------------------------------------------------------------------------------------------
Southern California Public Power Authority, Transmission Project Rev., "A",
0%, 2005(++) 3,795 3,740,542
- ----------------------------------------------------------------------------------------------------------------------------------
Vernon, CA, Electric Systems Rev., Malburg Generating Station Project,
5.5%, 2033 1,000 1,035,030
- ----------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Water & Power Authority Rev., 5.5%, 2017 800 834,960
- ----------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Water & Power Authority Rev., 5.3%, 2018 250 252,178
- ----------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Water & Power Authority Rev., "A", 5.125%, 2013 1,000 1,032,400
- ----------------------------------------------------------------------------------------------------------------------------------
$28,248,868
- ----------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility California Department of Water Resources, Central Valley Project
Revenue - 8.8% Rev., "X", FGIC, 5%, 2029 $2,000 $2,072,780
- ----------------------------------------------------------------------------------------------------------------------------------
California Department of Water Resources, Water Systems Rev., 7%, 2012 1,090 1,386,306
- ----------------------------------------------------------------------------------------------------------------------------------
California Department of Water Resources, Water Systems Rev., 7%, 2012(++) 405 525,512
- ----------------------------------------------------------------------------------------------------------------------------------
Castalic Lake Water Agency, California Rev., Water Systems
Improvement Project, AMBAC, 5.125%, 2030 1,725 1,807,610
- ----------------------------------------------------------------------------------------------------------------------------------
Culver City, CA, Wastewater Facilities Rev, "A", FGIC, 5.6%, 2019 1,000 1,140,820
- ----------------------------------------------------------------------------------------------------------------------------------
El Monte, CA, Water Authority Rev., Water Systems Project, AMBAC,
6%, 2019 1,065 1,231,619
- ----------------------------------------------------------------------------------------------------------------------------------
Fairfield-Suisun, CA, Sewer District Rev., "A", MBIA, 0%, 2006 2,080 2,007,470
- ----------------------------------------------------------------------------------------------------------------------------------
Livermore Amador Valley Water Management Rev., "A", AMBAC, 5%, 2031 4,875 5,022,274
- ----------------------------------------------------------------------------------------------------------------------------------
Long Beach, CA, Water Rev., "B", MBIA, 5%, 2024 5,135 5,357,140
- ----------------------------------------------------------------------------------------------------------------------------------
Los Angeles County, CA, Public Works Rev., Multiple Capital
Facilities Project, "A", AMBAC, 5.5%, 2020 2,970 3,297,205
- ----------------------------------------------------------------------------------------------------------------------------------
Mojave, CA, Water Agency, Improvement District (M Morongo Basin),
FGIC, 5.75%, 2015 2,625 2,939,554
- ----------------------------------------------------------------------------------------------------------------------------------
San Diego, CA, Public Facilities Financing Authority Rev., MBIA, 5%,
2023 1,560 1,630,340
- ----------------------------------------------------------------------------------------------------------------------------------
Southern California Metropolitan Water District Rev., RITES,
10.0197%, 2018+(+) 5,000 6,919,000
- ----------------------------------------------------------------------------------------------------------------------------------
West Sacramento, CA, Financing Authority Rev., Water Systems
Improvement Project, FGIC, 5%, 2032 2,750 2,847,433
- ----------------------------------------------------------------------------------------------------------------------------------
$38,185,063
- ----------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $398,109,886) $430,187,186
- ----------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.7%
- ----------------------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, CA, Toll Bridge Rev. "A", due 4/07/04 $100 $100,000
- ----------------------------------------------------------------------------------------------------------------------------------
California State, Department of Water Resources, Power Supply Rev.,
due 4/07/04 600 600,000
- ----------------------------------------------------------------------------------------------------------------------------------
MSR Public Power Agency, CA, due 4/07/04 2,300 2,300,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost, $3,000,000) $3,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $401,109,886) $433,187,186
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.5% 2,390,439
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $435,577,625
- ----------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/04 MFS(R) FLORIDA MUNICIPAL BOND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
Municipal Bonds - 98.8%
- ----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
Airport & Port Florida Capital Projects Finance Authority Rev., AAAE Airports
Revenue - 4.5% Project, "I", MBIA, 5%, 2020 $500 $528,500
- ----------------------------------------------------------------------------------------------------------------------------------
Greater Orlando Aviation Authority Rev., "A", FGIC, 5.25%, 2018 1,000 1,056,680
- ----------------------------------------------------------------------------------------------------------------------------------
Hillsborough County, FL, Aviation Authority Rev. (Tampa
International Airport), "A", FGIC, 5.875%, 2015 750 819,638
- ----------------------------------------------------------------------------------------------------------------------------------
Lee County, FL, Airport Rev., "A", FSA, 5.875%, 2018 1,000 1,129,840
- ----------------------------------------------------------------------------------------------------------------------------------
Miami-Dade County, FL, Aviation Rev., "C", GNMA, 5.25%, 2018 500 527,530
- ----------------------------------------------------------------------------------------------------------------------------------
Pensacola, FL, Airport Rev., "B", MBIA, 5.625%, 2014 500 548,850
- ----------------------------------------------------------------------------------------------------------------------------------
$4,611,038
- ----------------------------------------------------------------------------------------------------------------------------------
Chemicals - 0.7% Brazos River, TX, Brazoria County Environmental Rev. (Dow Chemical,
Co.), "A", 6.625%, 2033 $500 $546,245
- ----------------------------------------------------------------------------------------------------------------------------------
Sweetwater County, WY, Solid Waste Disposal Rev. (FMC Corp.), 7%,
2024 200 203,080
- ----------------------------------------------------------------------------------------------------------------------------------
$749,325
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 6.2% Commonwealth of Puerto Rico, RITES, 10.0771%, 2019+(+) $1,000 $1,330,500
- ----------------------------------------------------------------------------------------------------------------------------------
Maimi-Dade County, FL, Educational Facilities Authority, "A", AMBAC,
5.5%, 2018 1,400 1,578,332
- ----------------------------------------------------------------------------------------------------------------------------------
State of Florida, RITES, MBIA, 8.4853%, 2017+(+) 3,000 3,404,160
- ----------------------------------------------------------------------------------------------------------------------------------
$6,312,992
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 7.2% Florida Board of Education, Capital Outlay, 9.125%, 2014 $2,600 $3,556,098
- ----------------------------------------------------------------------------------------------------------------------------------
Florida Board of Education, Capital Outlay, 9.125%, 2014(++) 400 557,024
- ----------------------------------------------------------------------------------------------------------------------------------
Florida Board of Education, Capital Outlay, "A", 5.25%, 2024 1,000 1,073,010
- ----------------------------------------------------------------------------------------------------------------------------------
Osceola County, FL, School Board Certificate, "A", AMBAC, 5.25%,
2027 1,950 2,074,274
- ----------------------------------------------------------------------------------------------------------------------------------
$7,260,406
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Brevard County, FL, Health Facilities Authority Rev., "A", MBIA,
Hospitals - 15.2% 6.5%, 2007 $640 $641,696
- ----------------------------------------------------------------------------------------------------------------------------------
Citrus County, FL, Hospital Development Authority Rev. (Citrus
Memorial Hospital), 6.25%, 2023 500 520,285
- ----------------------------------------------------------------------------------------------------------------------------------
Denver, CO, Health & Hospital Authority Rev., 6%, 2023 250 256,608
- ----------------------------------------------------------------------------------------------------------------------------------
District of Columbia, Health & Hospital Authority Rev. (Medstar
University Hospital), 6.875%, 2031(++) 225 257,339
- ----------------------------------------------------------------------------------------------------------------------------------
Highlands County, FL, Health Facilities Authority Rev. (Adventist
Health Systems), 5.25%, 2013 500 531,365
- ----------------------------------------------------------------------------------------------------------------------------------
Hillsborough County, FL, Industrial Development Rev. (Tampa General
Hospital), "A", 5%, 2018 500 506,680
- ----------------------------------------------------------------------------------------------------------------------------------
Hillsborough County, FL, Industrial Development Rev. (University
Community Hospital), MBIA, 6.5%, 2019 1,000 1,262,340
- ----------------------------------------------------------------------------------------------------------------------------------
Indiana Health Facilities Financing Authority, Hospital Rev.
(Munster Medical Research Foundation, Inc.), 6.375%, 2031 500 510,510
- ----------------------------------------------------------------------------------------------------------------------------------
Jacksonville, FL, Health Facilities, Ascension Health, "A", 5.25%,
2032 1,000 1,025,560
- ----------------------------------------------------------------------------------------------------------------------------------
Lakeland, FL, Hospital Systems Rev., Lakeland Regional Health
Systems,
5.5%, 2032 1,000 1,022,950
- ----------------------------------------------------------------------------------------------------------------------------------
Leesburg, FL, Hospital Rev. (Leesburg Regional Medical Center),
5.5%, 2032 1,000 1,017,310
- ----------------------------------------------------------------------------------------------------------------------------------
Marion County, FL, Hospital District Rev., Refunding & Improvement,
Health Systems (Monroe Regional Health System), 5.5%, 2014 1,000 1,070,630
- ----------------------------------------------------------------------------------------------------------------------------------
Marshall County, AL, Health Care Rev., "A", 6.25%, 2022 500 536,485
- ----------------------------------------------------------------------------------------------------------------------------------
Martin County, FL, Health Facilities Rev. (Martin Memorial Medical
Center), "B", 5.75%, 2022 500 510,200
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.
(Medstar Health), 5.5%, 2033 200 201,690
- ----------------------------------------------------------------------------------------------------------------------------------
New Hampshire Health & Higher Educational Facilities Authority Rev.
(Exeter Hospital), 6%, 2024 500 531,180
- ----------------------------------------------------------------------------------------------------------------------------------
Orange County, FL, Health Facilities Authority Hospital Rev.
(Orlando Regional Healthcare), 5.75%, 2032 1,000 1,045,300
- ----------------------------------------------------------------------------------------------------------------------------------
Rhode Island Health & Educational Building Rev., Hospital Financing
(Lifespan Obligated Group), 6.5%, 2032 500 526,035
- ----------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Bon Secours Health Systems, Inc.), "A", 5.625%,
2030 500 509,490
- ----------------------------------------------------------------------------------------------------------------------------------
South Dakota Health & Educational Facilities Authority Rev. (Prairie
Lakes Health Care System), 5.625%, 2032 500 506,675
- ----------------------------------------------------------------------------------------------------------------------------------
Steubenville, OH, Hospital Rev. (Trinity Hospital), 6.375%, 2020 500 535,875
- ----------------------------------------------------------------------------------------------------------------------------------
Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial Healthcare),
6.25%, 2020 300 301,164
- ----------------------------------------------------------------------------------------------------------------------------------
Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial
Regional Medical Center), MBIA, 6.625%, 2013 1,000 1,053,360
- ----------------------------------------------------------------------------------------------------------------------------------
Wisconsin Health & Educational Facilities (Aurora Health Care, Inc.), "A",
5.6%, 2029 500 503,430
- ----------------------------------------------------------------------------------------------------------------------------------
$15,384,157
- ----------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.3% Orange County, FL, Health Facilities Authority Rev. (GF/Orlando),
8.875%, 2021 $300 $304,749
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Red River Authority, TX, Pollution Control Rev. (Celanese), 6.7%,
Chemicals - 0.4% 2030 $375 $403,699
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Environmental Services - Nevada Department of Business (Republic Services, Inc.), 5.625%,
0.3% 2026 $300 $318,087
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Other - 1.7% Hernando County, FL, Water & Sewer Rev., MBIA, 5%, 2029 - 2034 $1,000 $1,048,240
- ----------------------------------------------------------------------------------------------------------------------------------
Park Creek Metropolitan District, Colorado Rev., 7.875%, 2032 160 165,318
- ----------------------------------------------------------------------------------------------------------------------------------
Tooele County, UT, Hazardous Waste Treatment Rev. (Union Pacific
Corp.), 5.7%, 2026 500 510,070
- ----------------------------------------------------------------------------------------------------------------------------------
$1,723,628
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Delta County, MI, Economic Development Corp., Environmental
Paper - 1.3% Improvements Rev. (Mead Westvaco Escanaba), 6.25%, 2027 $500 $534,195
- ----------------------------------------------------------------------------------------------------------------------------------
Escambia County, FL, Industrial Development Rev. (Champion
International Corp.), 6.8%, 2012 750 764,220
- ----------------------------------------------------------------------------------------------------------------------------------
$1,298,415
- ----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment & Capital Trust Agency of Florida Rev. (Seminole Tribe Convention),
Tourism - 1.3% 10%, 2033 $200 $247,540
- ----------------------------------------------------------------------------------------------------------------------------------
Palm Beach County, FL, Industrial Development Rev., South Florida
Fair Project, MBIA, 5.5%, 2020 1,000 1,115,630
- ----------------------------------------------------------------------------------------------------------------------------------
$1,363,170
- ----------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Collier County, FL, Housing Finance Authority Rev., Goodlette Arms
Revenue - 3.5% Housing Project, "A", FNMA, 4.9%, 2032 $500 $538,260
- ----------------------------------------------------------------------------------------------------------------------------------
Florida Housing Finance Corp., Housing Rev. (Augustine Club
Apartments), "D", MBIA, 5.5%, 2020 500 527,730
- ----------------------------------------------------------------------------------------------------------------------------------
Florida Housing Finance Corp., Housing Rev. (Crossing At University
Apartments), AMBAC, 5.1%, 2018 1,240 1,270,839
- ----------------------------------------------------------------------------------------------------------------------------------
Palm Beach County, FL, Housing Finance Rev. (Malibu Bay Apartments),
"A", FSA, 4.9%, 2023 1,000 1,011,450
- ----------------------------------------------------------------------------------------------------------------------------------
Palm Beach County, FL, Housing Finance Rev. (Westlake Apartments
Project), Phase II, FSA, 4.3%, 2012 170 175,834
- ----------------------------------------------------------------------------------------------------------------------------------
$3,524,113
- ----------------------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax
Revenue - 2.8% Escambia County, FL, Sales Tax Rev., AMBAC, 5%, 2022 $1,160 $1,222,188
- ----------------------------------------------------------------------------------------------------------------------------------
Pasco County, FL, Sales Tax Rev., Half Central, AMBAC, 5%, 2023 1,000 1,055,960
- ----------------------------------------------------------------------------------------------------------------------------------
Taylor County, FL, Sales Tax Rev., FGIC, 5.5%, 2020 500 562,225
- ----------------------------------------------------------------------------------------------------------------------------------
$2,840,373
- ----------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
Local - 3.9% Brevard County, FL, Housing Finance Authority, "B", GNMA, 6.5%, 2022 $81 $84,635
- ----------------------------------------------------------------------------------------------------------------------------------
Lee County, FL, Housing Finance Authority Rev., GNMA, 7%, 2031 275 283,863
- ----------------------------------------------------------------------------------------------------------------------------------
Lee County, FL, Housing Finance Authority, Multi-County Program,
"A", GNMA, 7.2%, 2033 95 96,786
- ----------------------------------------------------------------------------------------------------------------------------------
Manatee County, FL, Housing Finance Mortgage Rev., Single Family,
Subordinated Series 3, GNMA, 5.3%, 2028 180 195,241
- ----------------------------------------------------------------------------------------------------------------------------------
Miami-Dade County, FL, Housing Finance Authority Rev. (Home
Ownership Mortgage), "A", 5.2%, 2031 630 657,348
- ----------------------------------------------------------------------------------------------------------------------------------
Palm Beach County, FL, Single Family Rev., "B", GNMA, 5.5%, 2022 520 526,614
- ----------------------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Housing Finance Authority Rev., Multi-County
Program, "A", GNMA, 5.45%, 2034 1,000 1,084,050
- ----------------------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Housing Finance Authority Rev., Multi-County
Program, "B", GNMA, 7.25%, 2029 405 415,141
- ----------------------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Housing Finance Authority Rev., Multi-County
Program, "B", GNMA, 6.2%, 2031 580 604,812
- ----------------------------------------------------------------------------------------------------------------------------------
$3,948,490
- ----------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Florida Housing Finance Corp. Rev., Homeowner Mortgage, "4", FSA,
State - 1.9% 5.85%, 2031 $795 $828,311
- ----------------------------------------------------------------------------------------------------------------------------------
Florida Housing Finance Corp. Rev., Homeowner Mortgage, "5", 5%,
2034 1,000 1,068,140
- ----------------------------------------------------------------------------------------------------------------------------------
$1,896,451
- ----------------------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 0.2% Delaware County, PA, Industrial Development Authority Rev., 6.2%,
2019 $200 $208,186
- ----------------------------------------------------------------------------------------------------------------------------------
State & Local
Appropriation - 4.1% Florida Municipal Loan Council Rev., "A", MBIA, 5.625%, 2020 $1,000 $1,133,540
- ----------------------------------------------------------------------------------------------------------------------------------
Florida Municipal Loan Council Rev., "B", MBIA, 5.625%, 2019 1,000 1,133,810
- ----------------------------------------------------------------------------------------------------------------------------------
Florida Municipal Loan Council Rev., "C", MBIA, 5.25%, 2022 1,000 1,077,510
- ----------------------------------------------------------------------------------------------------------------------------------
Palm Beach County, FL, School Board, "A", AMBAC, 5.5%, 2021 750 840,653
- ----------------------------------------------------------------------------------------------------------------------------------
$4,185,513
- ----------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.6% Orange County, FL, Tourist Development Tax Rev., Subordinated,
AMBAC, 5.25%, 2027 $1,500 $1,590,480
- ----------------------------------------------------------------------------------------------------------------------------------
Tax Assessment - 2.2% Arbor Greene, FL, Community Development District, 5.75%, 2006 $81 $82,356
- ----------------------------------------------------------------------------------------------------------------------------------
Concorde Estates Community Development District, "B", 5%, 2011 350 345,418
- ----------------------------------------------------------------------------------------------------------------------------------
Fishawk Community Development District II, "B", 5%, 2007 180 182,572
- ----------------------------------------------------------------------------------------------------------------------------------
Greyhawk Landing Community Development, 6.25%, 2009 165 169,698
- ----------------------------------------------------------------------------------------------------------------------------------
Heritage Harbor South Community, Capital Improvement, 5.4%, 2008 385 392,295
- ----------------------------------------------------------------------------------------------------------------------------------
Heritage Isles, FL, Community Development District, "A", 5.75%, 2005 315 315,992
- ----------------------------------------------------------------------------------------------------------------------------------
Middle Village Community Development District, "B", 5%, 2009 200 200,434
- ----------------------------------------------------------------------------------------------------------------------------------
Middle Village, FL, Community Development District Rev., 5.8%, 2022 100 100,516
- ----------------------------------------------------------------------------------------------------------------------------------
Panther Trace, FL, Community Development District Rev., 5.4%, 2008 170 171,210
- ----------------------------------------------------------------------------------------------------------------------------------
Panther Trace, FL, Community Development District Rev., 6.5%, 2009 90 92,306
- ----------------------------------------------------------------------------------------------------------------------------------
Renaissance Community Development, "B", 6.25%, 2008 145 149,509
- ----------------------------------------------------------------------------------------------------------------------------------
$2,202,306
- ----------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.4% Iowa Tobacco Settlement Authority, 5.3%, 2025 $250 $218,030
- ----------------------------------------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corp., Asset Backed, "B", 5.875%, 2039 250 226,585
- ----------------------------------------------------------------------------------------------------------------------------------
$444,615
- ----------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 4.0% Florida Mid Bay Bridge Authority Rev., "A", AMBAC, 0%, 2018 $1,000 $503,850
- ----------------------------------------------------------------------------------------------------------------------------------
Florida Turnpike Authority Rev., Department of Transportation, "A",
5.75%, 2018 2,000 2,319,860
- ----------------------------------------------------------------------------------------------------------------------------------
Miami-Dade County, FL, Expressway Authority, FGIC, 6%, 2010(++) 1,000 1,195,450
- ----------------------------------------------------------------------------------------------------------------------------------
$4,019,160
- ----------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico, Highway & Transportation, ROLS,
Tax - 4.4% Railroad II R 227 1, MBIA, 9.896%, 2020+(+) $2,500 $3,363,150
- ----------------------------------------------------------------------------------------------------------------------------------
Polk County, FL, Transportation Improvement Rev., FSA, 5.625%, 2017 1,000 1,152,430
- ----------------------------------------------------------------------------------------------------------------------------------
$4,515,580
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Illinois Educational Facilities Authority Rev. (Augustana College),
1.3% 5.625%, 2022 $300 $313,098
- ----------------------------------------------------------------------------------------------------------------------------------
Miami-Dade County, FL, Educational Rev. (University of Miami), "A",
AMBAC, 5%, 2025 1,000 1,055,100
- ----------------------------------------------------------------------------------------------------------------------------------
$1,368,198
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Florida Board Regents, Housing Rev. (University of Central Florida),
Dormitories - 2.9% FGIC,
5.25%, 2020 $1,185 $1,280,132
- ----------------------------------------------------------------------------------------------------------------------------------
Florida Board Regents, Housing Rev., MBIA, 5.3%, 2020 610 660,886
- ----------------------------------------------------------------------------------------------------------------------------------
Florida Finance Authority, Capital Loan Projects, "F", MBIA, 5.125%,
2021 1,000 1,050,830
- ----------------------------------------------------------------------------------------------------------------------------------
$2,991,848
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Secondary Michigan Municipal Bond Authority Rev. (YMCA Service Learning
Schools - 0.1% Academy), 7.625%, 2021 $100 $101,483
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Brazos River Authority, Pollution Control Rev. (TXU Corp.), 6.3%,
Owned - 0.7% 2032 $120 $126,070
- ----------------------------------------------------------------------------------------------------------------------------------
Brazos River Authority, Pollution Control Rev. (TXU Corp.), 6.75%,
2038 300 325,920
- ----------------------------------------------------------------------------------------------------------------------------------
Port Morrow, OR, Pollution Control Rev. (Portland General Electric),
5.2%, 2033 200 216,428
- ----------------------------------------------------------------------------------------------------------------------------------
$668,418
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 11.5% Deltona, FL, Utility Systems Rev., MBIA, 5%, 2024 - 2033 $2,500 $2,613,025
- ----------------------------------------------------------------------------------------------------------------------------------
Escambia County, FL, Utility Systems Rev., "B", FGIC, 6.25%, 2016 1,500 1,843,455
- ----------------------------------------------------------------------------------------------------------------------------------
Marion County, FL, Utility Systems Rev., "A", MBIA, 5%, 2023 1,000 1,055,960
- ----------------------------------------------------------------------------------------------------------------------------------
Palm Coast, FL, Utility Systems Rev., MBIA, 5%, 2024 250 262,608
- ----------------------------------------------------------------------------------------------------------------------------------
Port St. Lucie, FL, Utility Rev., Capital Appreciation, "A", FGIC,
0%, 2021(++) 1,405 552,404
- ----------------------------------------------------------------------------------------------------------------------------------
Port St. Lucie, FL, Utility Rev., MBIA, 5%, 2022 1,000 1,053,190
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., FSA, 6%, 2004(++) 2,000 2,064,160
- ----------------------------------------------------------------------------------------------------------------------------------
Tampa, FL, Utility Tax & Special Rev., "A", AMBAC, 5.25%, 2020 -
2021 2,000 2,181,190
- ----------------------------------------------------------------------------------------------------------------------------------
$11,625,992
- ----------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 14.2% Bay County, FL, Water Systems Rev., AMBAC, 5.625%, 2019 $1,000 $1,145,700
- ----------------------------------------------------------------------------------------------------------------------------------
Florida Community Services Corp., AMBAC, 5.5%, 2018 1,125 1,274,558
- ----------------------------------------------------------------------------------------------------------------------------------
Jupiter, FL, Water Rev., AMBAC, 5%, 2024 520 546,224
- ----------------------------------------------------------------------------------------------------------------------------------
Lee County, FL, Industrial Development Authority (Bonita Springs
Utilities Project), MBIA, 6.05%, 2015 1,000 1,101,490
- ----------------------------------------------------------------------------------------------------------------------------------
Lee County, FL, Industrial Development Authority (Bonita Springs
Utilities Project), MBIA, 5%, 2027 2,465 2,539,418
- ----------------------------------------------------------------------------------------------------------------------------------
Miami Beach, FL, Stormwater Rev., FGIC, 5.25%, 2020 1,000 1,079,440
- ----------------------------------------------------------------------------------------------------------------------------------
Miramar, FL, Wastewater Improvement Rev., FGIC, 6.75%, 2004(++) 955 991,701
- ----------------------------------------------------------------------------------------------------------------------------------
Polk County, FL, Utility Systems Rev., FGIC, 5%, 2023 1,000 1,055,210
- ----------------------------------------------------------------------------------------------------------------------------------
Seminole County, FL, Water & Sewer Rev., MBIA, 6%, 2019 940 1,133,123
- ----------------------------------------------------------------------------------------------------------------------------------
Seminole County, FL, Water & Sewer Rev., MBIA, 6%, 2019(++) 2,060 2,501,726
- ----------------------------------------------------------------------------------------------------------------------------------
Tohopekaliga Water Authority, Florida Utility System Rev., "A", FSA,
5%, 2024 1,000 1,050,430
- ----------------------------------------------------------------------------------------------------------------------------------
$14,419,020
- ----------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $92,956,788) $100,279,892
- ----------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.3%
- ----------------------------------------------------------------------------------------------------------------------------------
Gulf Breeze, FL, Rev. Local Government, due 4/07/04 $150 $150,000
- ----------------------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Health Facilities Authority Rev., Pooled
Hospital Loan Program, due 4/01/04 140 140,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost, $290,000) $290,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $93,246,788) $100,569,892
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.9% 897,165
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $101,467,057
- ----------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/04 MFS(R) GEORGIA MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Municipal Bonds - 96.0%
- ----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 4.9% Columbia County, GA (Courthouse Detention Center), 5.625%, 2020 $1,490 $1,650,473
- ----------------------------------------------------------------------------------------------------------------------------------
Macon Bibb County, GA, Urban Development Rev., Bibb County Public
Facilities Project, 5.5%, 2022 1,000 1,121,210
- ----------------------------------------------------------------------------------------------------------------------------------
Oconee County, GA, Industrial Development Authority, Oiit Project,
XLCA,
5.25%, 2023 750 801,090
- ----------------------------------------------------------------------------------------------------------------------------------
$3,572,773
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations - Elberton, GA, Combined Utility Systems, Refunding & Improvement,
Improvement - 2.9% AMBAC, 5.5%, 2019 $550 $613,025
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Municipal Finance Agency, RITES, FSA, 10.6246%, 2016+(+) 500 679,780
- ----------------------------------------------------------------------------------------------------------------------------------
Suwanee, GA, MBIA, 5.25%, 2032 750 792,960
- ----------------------------------------------------------------------------------------------------------------------------------
$2,085,765
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 9.6% Forsyth County, GA, School District, 6%, 2015 $750 $881,903
- ----------------------------------------------------------------------------------------------------------------------------------
Fulton County, GA, School District, 6.375%, 2010 - 2016 4,000 4,879,990
- ----------------------------------------------------------------------------------------------------------------------------------
Wilkes County, GA, School District, 5%, 2024 1,115 1,163,246
- ----------------------------------------------------------------------------------------------------------------------------------
$6,925,139
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Athens Clarke County, GA (United Catholic Health East Issue), 5.5%,
Hospitals - 6.4% 2032 $500 $513,220
- ----------------------------------------------------------------------------------------------------------------------------------
Chatham County, GA, Hospital Authority Rev. (Memorial Health Medical
Center), "A", 6%, 2017 350 381,493
- ----------------------------------------------------------------------------------------------------------------------------------
Cobb County, GA, Hospital Authority Revolving, Refunding &
Improvement Rev., Anticipation Certificates, AMBAC, 5.25%, 2023 750 803,993
- ----------------------------------------------------------------------------------------------------------------------------------
Gainesville & Hall County, GA, Hospital Authority Rev. (Northeast
Georgia Health System), 5.5%, 2031 500 513,530
- ----------------------------------------------------------------------------------------------------------------------------------
Royston, GA, Hospital Authority Rev. (Ty Cobb Healthcare System, Inc.),
6.125%, 2009 330 336,164
- ----------------------------------------------------------------------------------------------------------------------------------
Tift County, GA, Hospital Authority Rev., Anticipation Certificates, AMBAC,
5%, 2022 2,000 2,090,960
- ----------------------------------------------------------------------------------------------------------------------------------
$4,639,360
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Fulton County, GA, Residential Care, Canterbury Court Project, "A",
Term Care - 1.9% 6.125%, 2034 $150 $145,901
- ----------------------------------------------------------------------------------------------------------------------------------
Richmond County, GA, Development Authority, Nursing Home Rev.
(Beverly Enterprises Georgia, Inc.), 8.75%, 2011 1,190 1,206,362
- ----------------------------------------------------------------------------------------------------------------------------------
$1,352,263
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Cartersville, GA, Development Authority Waste, Anheuser Busch
Other - 1.8% Project, 5.95%, 2032 $750 $798,728
- ----------------------------------------------------------------------------------------------------------------------------------
De Kalb County, GA, Development Authority (General Motors Corp.), 6%,
2021 500 525,280
- ----------------------------------------------------------------------------------------------------------------------------------
$1,324,008
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Effingham County, GA, Development Authority (Fort James), 5.625%,
Paper - 2.1% 2018 $150 $143,444
- ----------------------------------------------------------------------------------------------------------------------------------
Savannah, GA, Economic Development Authority Rev. (Stone Container
Corp.), 7.4%, 2026 300 305,880
- ----------------------------------------------------------------------------------------------------------------------------------
Savannah, GA, Economic Development Pollution (Union Camp Corp.),
6.15%, 2017 1,000 1,109,880
- ----------------------------------------------------------------------------------------------------------------------------------
$1,559,204
- ----------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Clayton County, GA, Housing Authority, Multi-family Housing Rev.
Revenue - 4.7% (Vineyard Pointe), "A", GNMA, 5.5%, 2032 $995 $1,042,004
- ----------------------------------------------------------------------------------------------------------------------------------
De Kalb County, GA, Housing Authority Multi-family Housing Rev.
(Castaways Apartments), "A", GNMA, 5.4%, 2029 595 620,853
- ----------------------------------------------------------------------------------------------------------------------------------
Hinesville, GA, Leased Housing Corp., "A", FHA, 6.7%, 2017 900 913,626
- ----------------------------------------------------------------------------------------------------------------------------------
Savannah, GA, Housing Authority, Chatham Gardens Project, FNMA,
5.625%, 2031 745 806,671
- ----------------------------------------------------------------------------------------------------------------------------------
$3,383,154
- ----------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 5.5% Georgia Housing & Finance Authority Rev., 5.5%, 2032 $1,000 $1,020,060
- ----------------------------------------------------------------------------------------------------------------------------------
Georgia Housing & Finance Authority Rev., Single Family Mortgage,
5.2%, 2020 545 556,325
- ----------------------------------------------------------------------------------------------------------------------------------
Georgia Housing & Finance Authority Rev., Single Family Mortgage,
5.8%, 2021 750 778,987
- ----------------------------------------------------------------------------------------------------------------------------------
Georgia Housing & Finance Authority Rev., Single Family Mortgage,
5.1%, 2022 750 763,605
- ----------------------------------------------------------------------------------------------------------------------------------
Georgia Housing & Finance Authority Rev., Single Family Mortgage,
5.6%, 2032 745 762,619
- ----------------------------------------------------------------------------------------------------------------------------------
Georgia Housing & Finance Authority Rev., Single Family Mortgage, "B",
6.05%, 2019 85 85,728
- ----------------------------------------------------------------------------------------------------------------------------------
$3,967,324
- ----------------------------------------------------------------------------------------------------------------------------------
State & Local Athens, GA, Student Housing Authority, University of Georgia East
Appropriation - 7.1% Campus, AMBAC, 5.25%, 2022 $1,000 $1,081,780
- ----------------------------------------------------------------------------------------------------------------------------------
Clayton County, GA, Development Authority Rev., "A", 6.25%, 2020 500 592,175
- ----------------------------------------------------------------------------------------------------------------------------------
County Commissioners of Georgia Assoc., Leasing Program, Rockdale
County, GA, Public Purpose Project, AMBAC, 5.625%, 2020 500 565,165
- ----------------------------------------------------------------------------------------------------------------------------------
Fayette County, GA, Public Facilities Authority, Criminal Justice
Center Project, 6.25%, 2010(++) 755 911,481
- ----------------------------------------------------------------------------------------------------------------------------------
Fulton County, GA, Facilities Corp., Fulton County, GA, Public
Purpose Project, AMBAC, 5.5%, 2018 695 790,722
- ----------------------------------------------------------------------------------------------------------------------------------
Fulton County, GA, Facilities Corp., Fulton County, GA, Public
Purpose Project, AMBAC, 5.9%, 2019 1,000 1,178,760
- ----------------------------------------------------------------------------------------------------------------------------------
$5,120,083
- ----------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.5% Virgin Islands Public Finance Authority Rev., ASST GTY, 5.5%, 2018 $1,000 $1,094,520
- ----------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.5% Children's Trust Fund, Settlement Rev., PR, 5.375%, 2033 $390 $384,637
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges -
9.1% Fulton County, GA (Morehouse College), AMBAC, 6.25%, 2021 $980 $1,182,252
- ----------------------------------------------------------------------------------------------------------------------------------
Fulton County, GA, Development Authority Rev. (Georgia Tech
Foundation), "A", 5.75%, 2017 1,000 1,160,970
- ----------------------------------------------------------------------------------------------------------------------------------
Fulton County, GA, Development Authority Rev. (Georgia Tech
Foundation), "A", 5%, 2031 265 275,181
- ----------------------------------------------------------------------------------------------------------------------------------
Private Colleges & University Authority (Emory University), "A",
5.75%, 2016 - 2018 2,000 2,311,370
- ----------------------------------------------------------------------------------------------------------------------------------
Private Colleges & University Authority (Mercer University), 5.75%,
2021 500 538,400
- ----------------------------------------------------------------------------------------------------------------------------------
Private Colleges & University Authority (Spellman College), 5.25%,
2021 500 543,670
- ----------------------------------------------------------------------------------------------------------------------------------
Savannah, GA, Economic Development Authority Rev. (College of Art &
Design, Inc.), 6.2%, 2009 500 556,225
- ----------------------------------------------------------------------------------------------------------------------------------
$6,568,068
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Georgia Private College & University Authority Rev. (Mercer Housing
Dormitories - 3.7% Corp.), 6%, 2021 $500 $522,195
- ----------------------------------------------------------------------------------------------------------------------------------
Marietta, GA, Development Authority Rev., Student Housing (Southern
Polytech University), "A", 6.25%, 2027(++) 1,000 1,169,750
- ----------------------------------------------------------------------------------------------------------------------------------
Milledgeville Baldwin County, GA, Georgia College & State University
Foundation, 5%, 2032 1,000 1,014,820
- ----------------------------------------------------------------------------------------------------------------------------------
$2,706,765
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal Georgia Municipal Electric Authority Power Rev., "A", MBIA, 6.5%,
Owned - 6.5% 2020 $1,250 $1,577,000
- ----------------------------------------------------------------------------------------------------------------------------------
Griffin, GA, Combined Public Utility Rev., Refunding & Improvement,
AMBAC, 5%, 2025 500 513,150
- ----------------------------------------------------------------------------------------------------------------------------------
Griffin, GA, Combined Public Utility Rev., Refunding & Improvement,
5%, 2021 1,000 1,065,480
- ----------------------------------------------------------------------------------------------------------------------------------
Monroe County, GA, Pollution Control Rev. (Oglethorpe Power Corp.), "A",
6.8%, 2012 1,000 1,224,020
- ----------------------------------------------------------------------------------------------------------------------------------
Summerville, GA, Public Utility Rev., Refunding & Improvement, 5.75%,
2026 350 370,986
- ----------------------------------------------------------------------------------------------------------------------------------
$4,750,636
- ----------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 27.8% Atlanta, GA, Water & Wastewater Rev., RITES, FGIC, 9.4853%, 2016+(+) $4,000 $5,365,360
- ----------------------------------------------------------------------------------------------------------------------------------
Atlanta, GA, Water & Wastewater Rev., "A", MBIA, 5%, 2033 500 516,125
- ----------------------------------------------------------------------------------------------------------------------------------
Clayton County, GA, Water Authority, Water & Sewer Rev., 6.25%, 2017 1,000 1,196,110
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia County, GA, Water & Sewer Rev., FGIC, 6.25%, 2010(++) 470 563,431
- ----------------------------------------------------------------------------------------------------------------------------------
Coweta County, GA, Development Authority Rev., Newnan Water Sewer &
Light Commission Project, AMBAC, 5.75%, 2016 1,000 1,152,840
- ----------------------------------------------------------------------------------------------------------------------------------
De Kalb County, GA, Water & Sewer Rev., "A", 5%, 2035 1,500 1,563,765
- ----------------------------------------------------------------------------------------------------------------------------------
Fairburn, GA, Utility Rev., 5.75%, 2020 500 548,605
- ----------------------------------------------------------------------------------------------------------------------------------
Forsyth County, GA, Water & Sewer Authority, 6.25%, 2010(++) 1,105 1,328,630
- ----------------------------------------------------------------------------------------------------------------------------------
Fulton County, GA, Water & Sewer Rev., FGIC, 6.375%, 2014 100 120,625
- ----------------------------------------------------------------------------------------------------------------------------------
Fulton County, GA, Water & Sewer Rev., FGIC, 6.375%, 2014(++) 2,150 2,583,548
- ----------------------------------------------------------------------------------------------------------------------------------
Gainesville, GA, Water & Sewer Rev., FGIC, 5.625%, 2019 1,000 1,135,700
- ----------------------------------------------------------------------------------------------------------------------------------
Jackson County, GA, Water & Sewer Authority, "A", AMBAC, 5.75%, 2017 1,000 1,168,030
- ----------------------------------------------------------------------------------------------------------------------------------
Milledgeville, GA, Water & Sewer Rev., FSA, 6%, 2021 1,500 1,832,280
- ----------------------------------------------------------------------------------------------------------------------------------
Monroe County, GA, Development Authority Rev., Refunding &
Improvement Water & Sewer Project, "A", MBIA, 5%, 2023 1,000 1,046,270
- ----------------------------------------------------------------------------------------------------------------------------------
$20,121,319
- ----------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $62,959,573) $69,555,018
- ----------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.5%
- ----------------------------------------------------------------------------------------------------------------------------------
Atlanta, GA, Water & Wastewater Rev., "C", due 4/01/04, at Identified Cost $1,050 $1,050,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $64,009,573) $70,605,018
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 2.5% 1,813,390
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $72,418,408
- ----------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/04 MFS(R) MARYLAND MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Municipal Bonds - 98.7%
- ----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
Airport & Port Maryland Transportation Authority, Baltimore/Washington
Revenue - 0.6% International Airport, "A", AMBAC, 5%, 2027 $1,000 $1,043,450
- ----------------------------------------------------------------------------------------------------------------------------------
Chemicals - 0.9% Baltimore, MD, Port Facilities Rev., Consolidated Coal Sales, "B",
6.5%, 2011 $1,500 $1,518,975
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 7.0% Baltimore, MD, "B", 7.15%, 2009 $2,120 $2,591,064
- ----------------------------------------------------------------------------------------------------------------------------------
Baltimore, MD, UT, Public Improvement, "A", MBIA, 7%, 2009 1,000 1,232,050
- ----------------------------------------------------------------------------------------------------------------------------------
Frederick County, MD, Public Facilities, 5.25%, 2016 2,000 2,219,860
- ----------------------------------------------------------------------------------------------------------------------------------
Frederick County, MD, Public Facilities, 5.2%, 2019 1,700 1,861,381
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland, State & Local Facilities Loan, First Series, 5.75%, 2014 1,550 1,813,438
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., Commonwealth Appropriations, "A",
MBIA, 5.5%, 2018 1,000 1,140,770
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., Commonwealth Appropriations, "A",
MBIA, 5%, 2021 1,000 1,065,550
- ----------------------------------------------------------------------------------------------------------------------------------
$11,924,113
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 15.9% Anne Arundel County, MD, 5%, 2015 $2,000 $2,183,640
- ----------------------------------------------------------------------------------------------------------------------------------
Howard County, MD, "B", 0%, 2008 1,000 901,880
- ----------------------------------------------------------------------------------------------------------------------------------
Howard County, MD, Consolidated Public Improvement, "A", 5.5%, 2008(++) 3,000 3,408,780
- ----------------------------------------------------------------------------------------------------------------------------------
Montgomery County, MD, Consolidated Public Improvement, 5%, 2020 - 2021 1,500 1,609,135
- ----------------------------------------------------------------------------------------------------------------------------------
Montgomery County, MD, Consolidated Public Improvement, "A",
5.75%, 2010(++) 2,000 2,342,840
- ----------------------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, 0%, 2007 5,110 4,777,237
- ----------------------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, Consolidated Public Improvement, "A",
5%, 2020 - 2023 3,550 3,788,147
- ----------------------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, Consolidated Public Improvement, FSA,
5.375%, 2015 1,500 1,676,175
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Municipal Finance Agency, RITES, FSA, 9.6169%, 2019+(+) 1,000 1,260,860
- ----------------------------------------------------------------------------------------------------------------------------------
Washington, MD, Suburban Sanitation District, General Construction,
"A", 5.25%, 2005(++) 865 906,918
- ----------------------------------------------------------------------------------------------------------------------------------
Worcester County, MD, Public Improvement, 5.625%, 2013 - 2015 3,650 4,187,398
- ----------------------------------------------------------------------------------------------------------------------------------
$27,043,010
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Maryland Health & Higher Educational Facilities Authority Rev.,
Hospitals - 21.0% 5.5%, 2021(++) $4,000 $4,072,520
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.
(Carroll County General Hospital), 6%, 2037 1,000 1,056,650
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.
(Doctors Community Hospital), 5.5%, 2024 1,000 987,060
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.
(Frederick Memorial Hospital), 5.125%, 2035 1,000 1,015,920
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.
(Frederick Memorial Hospital), FGIC, 5.25%, 2013 2,850 3,263,763
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev. (Good
Samaritan Hospital), 5.7%, 2009(++) 1,085 1,254,444
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.
(Johns Hopkins University), 5%, 2021 750 779,498
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.
(Medstar Health), 5.5%, 2033 800 806,760
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.
(Mercy Medical Center), FSA, 5.625%, 2017 1,800 1,966,086
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.
(North Arundel Hospital), 6.5%, 2026 500 558,970
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.
(University of Maryland Medical Systems), 6.625%, 2020 1,000 1,146,510
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev., "A"
(Anne Arundel Health Systems), FSA, 5%, 2034 1,585 1,656,642
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev., "A"
(Lifebridge Health), 5.125%, 2034 1,000 1,006,200
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev., "A"
(Upper Chesapeake Hospital), FSA, 5.5%, 2020 2,000 2,149,940
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev., "B"
(Medalantic/Helix Issue), AMBAC, 5.25%, 2038 3,145 3,503,876
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev., "B"
(University of Maryland Medical Systems), AMBAC, 5%, 2024 1,000 1,048,480
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.,
Adventist Healthcare, "A", 5.75%, 2025 1,000 1,016,060
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev., Anne
Arundel Health Systems, "A", FSA, 5%, 2023 1,000 1,056,170
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.,
Catholic Health Initiatives, "A", 6%, 2020 1,000 1,141,690
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.,
Union Hospital of Cecil County Issue, 5.625%, 2032 1,000 1,037,140
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Rev., Helix Health
Issue, AMBAC, 5%, 2027(++) 2,500 2,683,775
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Industrial Development Authority, Economic Development
Rev., FSA, RIBS, 10.641%, 2022(+) 1,400 2,005,346
- ----------------------------------------------------------------------------------------------------------------------------------
Montgomery County, MD, Economic Development (Trinity Health Credit
Group), 5.125%, 2022 500 520,745
- ----------------------------------------------------------------------------------------------------------------------------------
$35,734,245
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Maryland Health & Higher Educational Facilities Authority Rev.
Term Care - 0.7% (Bradford Oaks Nursing & Rehabilitation Center), 6.375%, 2027 $1,000 $977,870
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev., "A"
(Mercy Ridge), 6%, 2035 150 150,631
- ----------------------------------------------------------------------------------------------------------------------------------
$1,128,501
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Environmental Services - Northeast Maryland Waste Disposal Authority, Resources Recovery
0.4% Rev., Baltimore Resco Retrofit Project, 5%, 2012 $690 $714,695
- ----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment & Maryland Industrial Authority, Economic Development, Baltimore
Tourism - 0.6% Aquarium Project, 5.2%, 2026 $1,000 $1,036,520
- ----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Harford County MD, Economic Development Rev. Battelle Mem Institute
Other - 2.9% PJ, 5.25%, 2034 $1,600 $1,653,312
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Industrial Authority, Economic Development Rev., 8%, 2012(++) 2,825 3,293,441
- ----------------------------------------------------------------------------------------------------------------------------------
$4,946,753
- ----------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing
Revenue - 5.3% Baltimore, MD, City Housing Corp. Rev., "A", FHA, 7.25%, 2023 $1,095 $1,097,497
- ----------------------------------------------------------------------------------------------------------------------------------
Baltimore, MD, City Housing Corp. Rev., FHA, 7.75%, 2009 580 580,354
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration, "A", 5%, 2034 940 947,144
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration, "A", 5.1%, 2044 1,000 1,011,400
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration, Housing, "D", 5%, 2032 1,000 1,004,330
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration, Multi-Family Housing
Insured Mortgage, "B", 5.6%, 2032 1,250 1,301,125
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration, Waters Landing II,
"A", GNMA, 5.875%, 2033 1,500 1,590,570
- ----------------------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, Housing Authority, Fairview & Hillside
Projects, "A", GNMA, 4.85%, 2032 1,500 1,511,490
- ----------------------------------------------------------------------------------------------------------------------------------
$9,043,910
- ----------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Prince George's County, MD, Housing, Single Family Collateral, "A",
Local - 0.6% 7.4%, 2032 $275 $278,399
- ----------------------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, Housing, Single Family Collateral, "A",
GNMA, 5.6%, 2034 230 246,358
- ----------------------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, Housing, Single Family Step Coupon, "A",
GNMA, 5.375%, 2018 485 501,796
- ----------------------------------------------------------------------------------------------------------------------------------
$1,026,553
- ----------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Maryland Community Development Administration, Housing, "A", 5.875%,
State - 6.0% 2016 $1,285 $1,350,933
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration, Residential, "B",
4.75%, 2019 1,500 1,518,420
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration, Residential, "B",
6.05%, 2020 2,045 2,127,925
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration, Single Family
Program, First Series, 5.15%, 2018 2,000 2,054,280
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration, Single Family
Program, Second Series, 4.5%, 2024 1,025 1,047,632
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Authority, 4.75%, 2023 500 500,340
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Authority, Mortgage Backed Securities,
"A", 4.375%, 2017 1,500 1,507,800
- ----------------------------------------------------------------------------------------------------------------------------------
$10,107,330
- ----------------------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 1.9% Northeast Maryland Waste Disposal Authority Rev. (Southwest County
Resource Recovery), MBIA, 7.2%, 2005 $1,000 $1,025,700
- ----------------------------------------------------------------------------------------------------------------------------------
Northeast Maryland Waste Disposal Solid, 6%, 2006 1,100 1,187,021
- ----------------------------------------------------------------------------------------------------------------------------------
Northeast Maryland Waste Disposal Solid, AMBAC, 5.5%, 2016 1,000 1,080,460
- ----------------------------------------------------------------------------------------------------------------------------------
$3,293,181
- ----------------------------------------------------------------------------------------------------------------------------------
State & Local
Appropriation - 9.9% Howard County, MD, Certificates of Participation, 8%, 2019 $1,870 $2,695,380
- ----------------------------------------------------------------------------------------------------------------------------------
Howard County, MD, Certificates of Participation, 8.15%, 2021 450 657,054
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Stadium Authority, Lease RV Convention Center Expansion,
AMBAC, 5.875%, 2012 1,000 1,052,410
- ----------------------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, Certificates of Participation, "A", MBIA,
0%, 2005 - 2006 4,985 4,853,698
- ----------------------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, Lease Development Authority Rev., MBIA,
0%, 2004 - 2009 2,480 2,276,723
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., 5.7%, 2025 1,235 1,358,302
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., Commonwealth Appropriations, "A",
AMBAC, 5.375%, 2018 1,000 1,159,170
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2013 -
2016+(+) 2,020 2,668,337
- ----------------------------------------------------------------------------------------------------------------------------------
$16,721,074
- ----------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.2% Virgin Islands Public Finance Authority Rev., 5.875%, 2018 $1,000 $1,039,910
- ----------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev., 5.5%, 2022 1,000 1,034,380
- ----------------------------------------------------------------------------------------------------------------------------------
$2,074,290
- ----------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.5% Children's Trust Fund, Settlement Rev., PR, 5.375%, 2033 $245 $241,631
- ----------------------------------------------------------------------------------------------------------------------------------
Guam Economic Development Authority, 5.5%, 2041 400 387,180
- ----------------------------------------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corp., 5%, 2021 260 250,900
- ----------------------------------------------------------------------------------------------------------------------------------
$879,711
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Annapolis, MD, Economic Development Rev. (St. John's College), 5.5%,
11.8% 2018 $750 $788,887
- ----------------------------------------------------------------------------------------------------------------------------------
Anne Arundel County, MD, Economic Development, Community College
Project, 5.25%, 2028 1,600 1,671,040
- ----------------------------------------------------------------------------------------------------------------------------------
Frederick County, MD, Educational Facilities Rev., "A" (Mount St.
Mary's College), 5.7%, 2020 850 887,315
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.
(Johns Hopkins University), 5.125%, 2020 1,500 1,630,380
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev.
(Johns Hopkins University), 5.625%, 2027 1,400 1,516,186
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev., "A"
(Johns Hopkins University), 5%, 2032 3,000 3,117,210
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority Rev., "A"
(Loyola College), MBIA, 5.5%, 2016 3,000 3,312,360
- ----------------------------------------------------------------------------------------------------------------------------------
Morgan State University, MD, Academic, "A", FGIC, 5%, 2020 500 534,060
- ----------------------------------------------------------------------------------------------------------------------------------
Morgan State University, MD, Academic, "A", MBIA, 0%, 2006 - 2008
(++) 2,535 2,356,174
- ----------------------------------------------------------------------------------------------------------------------------------
Morgan State University, MD, Academic, "B", FGIC, 5%, 2022 350 369,975
- ----------------------------------------------------------------------------------------------------------------------------------
Morgan State University, MD, Academic, MBIA, 6.05%, 2015 1,500 1,790,400
- ----------------------------------------------------------------------------------------------------------------------------------
University of Maryland, Auxiliary Facilities & Tuition Rev., "B",
0%, 2004 1,000 994,650
- ----------------------------------------------------------------------------------------------------------------------------------
Westminster, MD, Educational Facilities Rev. (McDaniel College),
5.5%, 2032 1,000 1,028,800
- ----------------------------------------------------------------------------------------------------------------------------------
$19,997,437
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Maryland Economic Development Corp., Collegiate Housing Rev. (Towson
Dormitories - 3.0% University), 5.75%, 2029 $1,000 $1,007,410
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Economic Development Corp., Collegiate Housing, "A", 6%,
2019 1,000 1,050,260
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Economic Development Corp., Morgan State University
Project, "A", 6%, 2034 1,000 1,031,530
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Economic Development Corp., University of Maryland College
Park Project, AMBAC, 5%, 2019 1,850 1,968,844
- ----------------------------------------------------------------------------------------------------------------------------------
$5,058,044
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 3.2% Guam Power Authority Rev., RITES, AMBAC, 9.0426%, 2015+(+) $1,680 $2,050,037
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., "NN", 5.125%, 2024 1,500 1,576,365
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., RITES, FSA, 9.0063%,
2015+(+) 1,400 1,706,796
- ----------------------------------------------------------------------------------------------------------------------------------
$5,333,198
- ----------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Baltimore, MD, Project Revenue., Refunding Water Projects, "A",
Revenue - 5.3% FGIC,
5.125%, 2032 $1,000 $1,049,740
- ----------------------------------------------------------------------------------------------------------------------------------
Baltimore, MD, Rev., MBIA, LEVRRS, 10.183%, 2020(+) 3,000 4,032,690
- ----------------------------------------------------------------------------------------------------------------------------------
Baltimore, MD, Wastewater Rev. Project, "A", FGIC, 6%, 2015 1,000 1,218,920
- ----------------------------------------------------------------------------------------------------------------------------------
Baltimore, MD, Wastewater Rev. Project, "A", MBIA, 5.65%, 2020 2,000 2,341,740
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Aqueduct & Sewer Authority Rev., 10.25%, 2009(++) 335 415,926
- ----------------------------------------------------------------------------------------------------------------------------------
$9,059,016
- ----------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $152,881,796) $167,684,006
- ----------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.1%
- ----------------------------------------------------------------------------------------------------------------------------------
California State, Department of Water Resources, Power Supply Rev.,
due 4/07/04 $800 $800,000
- ----------------------------------------------------------------------------------------------------------------------------------
New Castle, PA, Area Hospital Authority (Jameson Memorial Hospital),
due 4/07/04 100 100,000
- ----------------------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Health Facilities Authority Rev., Pooled
Hospital Loan Program, due 4/01/04 100 100,000
- ----------------------------------------------------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority, due 4/07/04 750 750,000
- ----------------------------------------------------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority, Government Public
Improvement II, "B", due 4/07/04 100 100,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost, $1,850,000) $1,850,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $154,731,796) $169,534,006
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.2% 363,445
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $169,897,451
- ----------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF FUND INVESTMENTS 3/31/04 MFS(R) MASSACHUSETTS MUNICIPAL BOND
- ----------------------------------------------------------------------------------------------------------------------------------
Municipal Bonds - 97.7%
- ----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 2.5% Massachusetts Port Authority Rev., 13%, 2013(++) $745 $1,129,673
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Port Authority Rev., 6.125%, 2017 1,460 1,696,710
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Port Authority Rev., "A", 5.125%, 2017 1,275 1,366,507
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Port Authority Rev., "A", FSA, 5%, 2033 1,500 1,551,915
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Port Authority Rev., "C", 6%, 2015 1,000 1,159,610
- ----------------------------------------------------------------------------------------------------------------------------------
$6,904,415
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 19.6% Boston, MA, "A", 5.75%, 2010(++) $3,645 $4,246,498
- ----------------------------------------------------------------------------------------------------------------------------------
Brookline, MA, 5.375%, 2019 1,800 1,989,180
- ----------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Massachusetts, 5.875%, 2009(++) 1,000 1,181,160
- ----------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Massachusetts, FGIC, 7%, 2009 1,150 1,397,975
- ----------------------------------------------------------------------------------------------------------------------------------
Greater Lawrence, MA, San District, MBIA, 5.625%, 2020 1,640 1,865,270
- ----------------------------------------------------------------------------------------------------------------------------------
Lynn, MA, AMBAC, 5.125%, 2018 3,690 3,987,599
- ----------------------------------------------------------------------------------------------------------------------------------
Mansfield, MA, FSA, 5.375%, 2017 1,170 1,290,931
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts State Ref, "B", 5.25%, 2028 2,500 2,752,550
- ----------------------------------------------------------------------------------------------------------------------------------
Middleborough, MA, FGIC, 5.6%, 2014 75 84,529
- ----------------------------------------------------------------------------------------------------------------------------------
Salisbury, MA, MBIA, 5.25%, 2031 2,790 2,962,366
- ----------------------------------------------------------------------------------------------------------------------------------
State of Massachusetts, "A", MBIA, 7.5%, 2004(++) 105 106,073
- ----------------------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Capital Appreciation Consolidated Loan, "C",
0%, 2004 1,080 1,071,911
- ----------------------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Capital Appreciation Consolidated Loan, "C",
0%, 2004(++) 8,170 8,111,421
- ----------------------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Capital Appreciation Consolidated Loan, "C",
0%, 2005(++) 2,000 1,951,760
- ----------------------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Consolidated Loan, "A", 7.5%, 2004(++) 920 929,402
- ----------------------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Consolidated Loan, "A" MBIA, 6%, 2010(++) 3,000 3,560,970
- ----------------------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Consolidated Loan, "B", 5.625%, 2010(++) 2,000 2,321,040
- ----------------------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Consolidated Loan, "B", 5.75%, 2010(++) 1,000 1,167,540
- ----------------------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Consolidated Loan, "C", 5.75%, 2019(++) 2,000 2,338,800
- ----------------------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Consolidated Loan, "D", MBIA, 5%, 2021 1,380 1,553,742
- ----------------------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Consolidated Loan, "E", FSA, 5.25%, 2013(++) 1,000 1,134,750
- ----------------------------------------------------------------------------------------------------------------------------------
State of Massachusetts, MBIA, 5%, 2022 1,000 1,048,660
- ----------------------------------------------------------------------------------------------------------------------------------
Sutton, MA, MBIA, 5.5%, 2017 - 2019 2,000 2,254,180
- ----------------------------------------------------------------------------------------------------------------------------------
Westford, MA, FGIC, 5.25%, 2020 2,250 2,439,675
- ----------------------------------------------------------------------------------------------------------------------------------
Weymouth, MA, MBIA, 5.375%, 2020 1,250 1,369,063
- ----------------------------------------------------------------------------------------------------------------------------------
$53,117,045
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations - Massachusetts Bay Transportation Authority (General Transportation
Improvement - 7.8% Systems), XLCA, 7%, 2021 $5,000 $6,487,150
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Bay Transportation Authority, RITES, 10.7967%, 2016+
(+) 4,835 6,863,959
- ----------------------------------------------------------------------------------------------------------------------------------
Maynard, MA, MBIA, 5.5%, 2021 1,000 1,116,320
- ----------------------------------------------------------------------------------------------------------------------------------
Springfield, MA, FSA, 6.25%, 2019 2,600 3,084,198
- ----------------------------------------------------------------------------------------------------------------------------------
Worcester, MA, "A", FSA, 6%, 2016 2,955 3,499,754
- ----------------------------------------------------------------------------------------------------------------------------------
$21,051,381
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 4.5% Belmont, MA, 5%, 2015 $2,165 $2,261,776
- ----------------------------------------------------------------------------------------------------------------------------------
Dudley-Charlton, MA, Regional School District, RITES, FGIC,
9.0312%, 2015 - 2018+(+) 4,360 5,613,891
- ----------------------------------------------------------------------------------------------------------------------------------
Narragansett, MA, Regional School District, AMBAC, 6%, 2019 1,720 2,023,339
- ----------------------------------------------------------------------------------------------------------------------------------
Tantasquama, MA, Regional School District, FSA, 5.375%, 2016 2,000 2,228,060
- ----------------------------------------------------------------------------------------------------------------------------------
$12,127,066
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Massachusetts Development Finance Agency, Massachusetts Biomedical
Hospitals - 11.6% Research, "C", 6.375%, 2016 $50 $57,200
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev. (Anna
Jacques Hospital), 6.875%, 2012 685 695,207
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Baystate Medical Center), "F", 5.75%, 2033 2,000 2,096,480
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Berkshire Health Systems), 6.25%, 2031 1,350 1,405,256
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Caritas Christi), 6.5%, 2012 500 563,240
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Caritas Christi), 5.7%, 2015 500 515,135
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Caritas Christi), "B", 6.25%, 2022 20 20,876
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Covenant Health Systems, Inc.), 6.5%, 2017 75 83,434
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Covenant Health Systems, Inc.), 6%, 2031 1,000 1,048,040
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev. (Jordan
Hospital), 5.25%, 2018 1,330 1,215,341
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Milford-Whitinsville Hospital), 6.35%, 2032 50 50,994
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Milford-Whitinsville Regional Hospital), "C", 5.25%, 2018 1,500 1,456,470
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev. (Milton
Hospital), "C", 5.5%, 2016 800 830,848
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev. (New
England Medical Center Hospital), "H", FGIC, 5.375%, 2018 - 2019 1,815 1,989,022
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Newton-Wellesley Hospital), "G", MBIA, 6.125%, 2015 1,000 1,137,930
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev. (North
Adams Regional Hospital), 6.625%, 2018 1,010 1,005,041
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Partners Healthcare Systems), 5.75%, 2021 100 108,310
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Partners Healthcare Systems), "A", MBIA, 5.375%, 2018 2,000 2,155,260
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev. (South
Shore Hospital), "F", 5.625%, 2019 2,000 2,084,180
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(University of Massachusetts), 6.5%, 2021 1,000 1,054,610
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev. (New
England Medical Center Hospital), "H", FGIC, 5%, 2025 1,135 1,168,619
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Higher Educational Facilities Authority Rev.,
Catholic Health East Issue, 5.5%, 2032 1,575 1,601,239
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev., Capital Appreciation
(Mass Biomedical Research), 0%, 2004 5,000 4,979,800
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev., Capital Appreciation
(Mass Biomedical Research), "A", 0%, 2010 5,300 4,260,034
- ----------------------------------------------------------------------------------------------------------------------------------
$31,582,566
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Boston, MA, Industrial Development Finance Authority, Alzheimer's
Term Care - 1.0% Center Project, FHA, 5.5%, 2012 $370 $399,644
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev., First Mortgage Loomis
Communities Project, "A", 6.9%, 2032 530 552,997
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Beverly Enterprises),
8.375%, 2009 1,725 1,751,893
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Evanswood 1st
Mortgage), "A", 7.625%, 2015 497 50
- ----------------------------------------------------------------------------------------------------------------------------------
$2,704,584
- ----------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.4% Massachusetts Health & Educational Facilities Authority Rev.
(Learning Center for Deaf Children), 6.1%, 2019 $1,000 $1,010,210
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Massachusetts Port Authority Rev. (Delta Air Lines, Inc.), "A",
Airlines - 2.0% AMBAC, 5.5%, 2019 $2,000 $2,116,120
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Port Authority Rev. (U.S. Airways), MBIA, 5.875%, 2016 1,900 2,029,048
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Port Authority Rev., Special Facilities (U.S.
Airways), "A", MBIA, 5.625%, 2023 1,140 1,225,990
- ----------------------------------------------------------------------------------------------------------------------------------
$5,371,158
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Environmental Services - Massachusetts Development Finance Agency Rev., Resource Recovery
0.4% Rev. (Waste Management, Inc.), 6.9%, 2029 $1,000 $1,168,290
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Massachusetts Development Finance Agency Rev., Resource Recovery
Other - 1.5% Rev. (Flour Corp.), 5.625%, 2019 $1,675 $1,759,772
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Welch Foods, Inc.),
5.6%, 2017 2,100 2,257,101
- ----------------------------------------------------------------------------------------------------------------------------------
$4,016,873
- ----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Massachusetts Development Finance Agency Rev. (Comb Jewish
Other - 1.6% Philanthropies), "A", 5.25%, 2022 $1,000 $1,070,100
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev., (WHGH Educational
Foundation), "A", AMBAC, 5.375%, 2042 3,000 3,197,370
- ----------------------------------------------------------------------------------------------------------------------------------
$4,267,470
- ----------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Massachusetts Development Finance Agency Rev. (Morville House
Revenue - 3.1% Apartments), "A" LOC, 4.95%, 2023 $2,500 $2,484,275
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency Rev., "P", 5%, 2023 1,240 1,251,718
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency Rev., "P", 5.1%, 2033 1,565 1,580,869
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency Rev., "P", 5.2%, 2045 1,445 1,449,075
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency, Housing Rev., Rental Mortgage,
"A", AMBAC, 5.7%, 2020 1,515 1,564,419
- ----------------------------------------------------------------------------------------------------------------------------------
$8,330,356
- ----------------------------------------------------------------------------------------------------------------------------------
Parking - 0.5% Rail Connections, Inc., Massachusetts Rev. (Rte 128 Parking Garage), "A",
6%, 2009(++) $1,200 $1,432,608
- ----------------------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax Route 3 North Transportation Improvement Associates, MBIA, 5.625%,
Revenue - 0.6% 2010(++) $1,500 $1,746,810
- ----------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Massachusetts Housing Finance Agency, Single Family Housing Rev.,
State - 2.4% "102", 5%, 2029 $1,500 $1,513,545
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency, Single Family Housing Rev.,
"32", 6.6%, 2026 305 313,207
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency, Single Family Housing Rev.,
"51", MBIA, 6.35%, 2022 900 934,074
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency, Single Family Housing Rev.,
"79", FSA, 5.85%, 2021 330 344,470
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency, Single Family Housing Rev.,
"91", 5.5%, 2031 2,125 2,169,901
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency, Single Family Housing Rev.,
"93", 5.05%, 2020 1,110 1,128,737
- ----------------------------------------------------------------------------------------------------------------------------------
$6,403,934
- ----------------------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 1.4% Massachusetts Development Finance Agency Rev. (Ogden Haverhill
Associates), 6.7%, 2014 $600 $641,562
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev., Semass Systems, "B",
MBIA, 5.625%, 2016 1,125 1,269,281
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev., Resource Recovery Rev.
(Ogden Haverhill Associates), 5.6%, 2019 1,925 1,914,066
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev., Resource Recovery Rev.
(Ogden Haverhill Associates), 5.5%, 2013 25 25,171
- ----------------------------------------------------------------------------------------------------------------------------------
$3,850,080
- ----------------------------------------------------------------------------------------------------------------------------------
State & Local Massachusetts Development Finance Agency Rev., Visual & Performing
Appropriation - 2.9% Arts Project, 6%, 2015 $1,235 $1,495,462
- ----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2016+(+) 2,500 3,302,100
- ----------------------------------------------------------------------------------------------------------------------------------
University of Massachusetts, Building Authority Project, "B", AMBAC,
5.5%, 2018 1,400 1,585,934
- ----------------------------------------------------------------------------------------------------------------------------------
University of Massachusetts, Building Authority Project, "1", AMBAC,
5.25%, 2023 1,500 1,610,145
- ----------------------------------------------------------------------------------------------------------------------------------
$7,993,641
- ----------------------------------------------------------------------------------------------------------------------------------
Student Loan Revenue - 1.2% Massachusetts Educational Financing Authority, Education Loan Rev.,
"E", AMBAC, 5%, 2013 - 2015 $1,100 $1,160,030
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Educational Financing Authority, Education Loan Rev.,
Issue E, AMBAC, 5.3%, 2016 1,875 1,955,138
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Educational Financing Authority, Education Loan Rev.,
Issue G, "A", AMBAC, 6.05%, 2017 85 88,918
- ----------------------------------------------------------------------------------------------------------------------------------
$3,204,086
- ----------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.7% Virgin Islands Public Finance Authority Rev., 5.875%, 2018 $1,420 $1,476,672
- ----------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev., 5.5%, 2022 2,950 3,051,421
- ----------------------------------------------------------------------------------------------------------------------------------
$4,528,093
- ----------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.3% Children's Trust Fund, Settlement Rev., PR, 5.375%, 2033 $720 $710,100
- ----------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Massachusetts Bay Transportation Authority Prerefunded Assessment,
Tax - 2.8% "A", 5.75%, 2010(++) $3,460 $4,057,680
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Bay Transportation Authority Unrefunded Balance "A",
5.75%, 2018 320 369,315
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Bay Transportation Authority, Assessment, "A", 5.25%,
2030 2,930 3,083,591
- ----------------------------------------------------------------------------------------------------------------------------------
$7,510,586
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Massachusetts College Building Authority Project Rev., "A", MBIA,
17.1% 5.625%, 2009(++) $1,650 $1,921,590
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts College Building Authority Project Rev., Xl Capital
Assurance, "A", XLCA, 5.25%, 2023 1,000 1,062,500
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Boston University),
XLCA,
6%, 2059 1,500 1,779,375
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Deerfield Academy),
"A",
5%, 2028 1,000 1,039,130
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Eastern Nazarene
College), 5.625%, 2019 1,000 905,580
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Massachusetts College
of Pharmacy), 6.625%, 2020 50 54,660
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Massachusetts College
of Pharmacy), "C", 5.75%, 2033 1,000 1,023,540
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Mount Holyoke
College), 5.125%, 2021 1,000 1,065,550
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Suffolk University),
5.75%, 2019 1,000 1,062,430
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Suffolk University),
5.85%, 2029 1,000 1,049,850
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Western New England
College), 6.125%, 2032 1,115 1,148,762
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev., College Issue, "B",
XLCA, 5.25%, 2033 3,000 3,157,620
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev., Higher Education
(Smith College), 5.5%, 2010(++) 1,210 1,411,997
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Authority Rev. (University of
Massachusetts), "A", FGIC, 5.625%, 2018 2,170 2,474,646
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev. (Boston
College), "K", 5.25%, 2023 4,350 4,422,036
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Simmons College), "D", AMBAC, 6.05%, 2010(++) 1,745 2,103,161
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Simmons College), "F", FGIC, 5%, 2023 500 524,815
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(University of Massachusetts, Worcester Campus), "B", FGIC, 5.125%,
2019 1,780 1,921,795
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(University of Massachusetts), "A", FGIC, 5.75%, 2019 2,395 2,766,800
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(University of Massachusetts), "A", FGIC, 5.85%, 2020 1,200 1,397,100
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(University of Massachusetts), "C", MBIA, 5.25%, 2031 3,000 3,177,420
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Wellesley College), "H", 5%, 2033 1,000 1,035,370
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Wheaton College), "C", 5.25%, 2019 1,000 1,026,970
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority Rev.
(Wheelock College), "B", MBIA, 5.5%, 2021 3,275 3,664,299
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Brandeis University),
"C", MBIA, 0%, 2004 - 2010 3,000 2,660,480
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Brandeis University),
"C", MBIA, 1%, 2011 500 386,955
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Lesley College), "A",
CNIE LEE, 6.3%, 2025 2,000 2,157,900
- ----------------------------------------------------------------------------------------------------------------------------------
$46,402,331
- ----------------------------------------------------------------------------------------------------------------------------------
Universities - Secondary Massachusetts Development Finance Agency Rev. (Williston Northampton
Schools - 4.7% School), 6.5%, 2028 $1,300 $1,370,512
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Xaverian Brothers
High School), 5.55%, 2019 1,000 1,060,890
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Xaverian Brothers
High School), 5.65%, 2029 1,000 1,036,020
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev., Middlesex School
Education Project, 5.125%, 2023 500 530,595
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Belmont Hill School),
5.625%, 2020 1,150 1,234,905
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Concord Academy),
5.5%, 2027 2,000 2,060,480
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Dana Hall School),
5.9%, 2027 1,340 1,392,568
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Groton School), "A",
5%, 2018 2,960 3,134,255
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Tabor Academy), 5.4%, 2018 1,000 1,057,030
- ----------------------------------------------------------------------------------------------------------------------------------
$12,877,255
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal Massachusetts Development Finance Agency Rev. (Devens Electric
Owned - 0.3% Systems), 5.625%, 2016 $725 $787,734
- ----------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 5.8% Massachusetts Water Pollution Pool Program, "5", 5.75%, 2017 $1,000 $1,144,770
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Water Pollution Pool Program, "7", 5.25%, 2018 2,000 2,177,240
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Water Pollution Pool Program, "9", 5%, 2023 2,000 2,097,700
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority, "A", FGIC, 6%, 2021 1,000 1,170,380
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority, "C", MBIA, 5.25%, 2004(++) 50 52,412
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority, General, "J", FSA, 5%, 2023 500 522,190
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority, MBIA, 5.25%, 2020 1,535 1,593,146
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority, RITES, FGIC, 11.3149%,
2019+(+) 4,010 5,935,281
- ----------------------------------------------------------------------------------------------------------------------------------
Springfield, MA, Street & Sewer Commission, General, "A", AMBAC, 5%,
2021 1,000 1,066,170
- ----------------------------------------------------------------------------------------------------------------------------------
$15,759,289
- ----------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $241,828,550) $264,857,961
- ----------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.2%
- ----------------------------------------------------------------------------------------------------------------------------------
California State, Department of Water Resources, Power Supply Rev.,
due 4/07/04 $2,400 $2,400,000
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Higher Educational Facilities Authority Rev.,
Capital Assets Program, "D", due 4/01/04 995 995,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost, $3,395,000) $3,395,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $245,223,550) $268,252,961
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.1% 2,923,495
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $271,176,456
- ----------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
Portfolio of Investments - continued
Portfolio Footnotes:
+ Restricted security.
(+) Inverse floating rate security.
(++) Refunded bond.
The following abbreviations for insurers and inverse floaters are used in the Portfolio of Investments and are defined:
Insurers: Inverse Floaters:
AMBAC -- AMBAC Indemnity Corp. RIBS -- Residual Interest Bond
ASST GTY -- Asset Guaranty Insurance Co. RITES -- Residual Interest Tax-Exempt Security
FGIC -- Financial Guaranty Insurance Co. ROLS -- Residual Option Long
FHA -- Federal Housing Administration
FNMA -- Federal National Mortgage Assn.
FSA -- Financial Security Assurance Inc.
GNMA -- Government National Mortgage Assn.
LEVRRS -- Leveraged Reverse Rate Security
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Corp.
XLCA -- XL Capital Insurance Co.
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------------------
This statement represents your fund's balance sheet, which details the assets and liabilities composing the total value of your
fund.
ALABAMA ARKANSAS CALIFORNIA FLORIDA
At 3/31/04 FUND FUND FUND FUND
ASSETS
Investments -
Identified cost $88,419,522 $133,747,386 $401,109,886 $93,246,788
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation 8,582,060 13,501,594 32,077,300 7,323,104
- --------------------------------------------------------------------------------------------------------------------------------
Total, at value $97,001,582 $147,248,980 $433,187,186 $100,569,892
- --------------------------------------------------------------------------------------------------------------------------------
Cash 7,821 74,428 98,620 12,088
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for investments sold 789,400 3,971,918 10,307 505,379
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for fund shares sold 43,874 111,347 670,423 92,696
- --------------------------------------------------------------------------------------------------------------------------------
Interest receivable 1,478,816 2,166,312 5,221,726 1,842,191
- --------------------------------------------------------------------------------------------------------------------------------
Other assets 554 -- 1,779 1,282
- --------------------------------------------------------------------------------------------------------------------------------
Total assets $99,322,047 $153,572,985 $439,190,041 $103,023,528
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable $346,754 $532,315 $1,626,978 $377,130
- --------------------------------------------------------------------------------------------------------------------------------
Payable for fund shares reacquired 470,037 589,711 899,201 609,385
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on interest rate swap agreements 308,937 295,010 609,316 335,653
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on rate lock swap agreements 90,119 183,514 270,355 158,118
- --------------------------------------------------------------------------------------------------------------------------------
Payable to affiliates -
Management fee 808 1,246 3,578 838
- --------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 3,096 7,458 20,864 4,307
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee 1,038 6,796 49,035 2,542
- --------------------------------------------------------------------------------------------------------------------------------
Administrative fee 45 68 198 46
- --------------------------------------------------------------------------------------------------------------------------------
Accrued expenses and other liabilities 58,352 69,703 132,891 68,452
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities $1,279,186 $1,685,821 $3,612,416 $1,556,471
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $98,042,861 $151,887,164 $435,577,625 $101,467,057
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital $90,148,941 $139,775,206 $407,557,406 $96,349,114
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on investments 8,183,004 13,023,070 31,197,629 6,829,333
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) on investments (79,274) (737,776) (1,901,262) (1,544,224)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income (209,810) (173,336) (1,276,148) (167,166)
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $98,042,861 $151,887,164 $435,577,625 $101,467,057
- --------------------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
ALABAMA ARKANSAS CALIFORNIA FLORIDA
FUND FUND FUND FUND
Shares of beneficial interest outstanding
Class A 7,415,844 13,380,975 52,540,569 7,732,496
- --------------------------------------------------------------------------------------------------------------------------------
Class B 1,593,315 1,204,315 14,231,294 2,179,775
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- -- 6,062,123 --
- --------------------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding 9,009,159 14,585,290 72,833,986 9,912,271
- --------------------------------------------------------------------------------------------------------------------------------
Net assets
Class A $80,703,830 $139,333,437 $314,108,314 $79,154,709
- --------------------------------------------------------------------------------------------------------------------------------
Class B 17,339,031 12,553,727 85,106,002 22,312,348
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- -- 36,363,309 --
- --------------------------------------------------------------------------------------------------------------------------------
Total net assets $98,042,861 $151,887,164 $435,577,625 $101,467,057
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares
Net asset value per share
(net assets/shares of beneficial interest outstanding) $10.88 $10.41 $5.98 $10.24
- --------------------------------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25 of net asset value per share) $11.42 $10.93 $6.28 $10.75
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $10.88 $10.42 $5.98 $10.24
- --------------------------------------------------------------------------------------------------------------------------------
Class C shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $-- $-- $6.00 $--
- --------------------------------------------------------------------------------------------------------------------------------
On sales of $100,000 or more, the offering price of Class A shares is reduced. A contingent deferred sales charge may be
imposed on redemptions of Class A, Class B, and Class C shares.
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Assets and Liabilities - continued
GEORGIA MARYLAND MASSACHUSETTS
At 3/31/04 FUND FUND FUND
ASSETS
Investments -
Identified cost $64,009,573 $154,731,796 $245,223,550
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation 6,595,445 14,802,210 23,029,411
- --------------------------------------------------------------------------------------------------------------------------------
Total, at value $70,605,018 $169,534,006 $268,252,961
- --------------------------------------------------------------------------------------------------------------------------------
Cash 80,167 83,717 62,637
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for investments sold -- 2,087,666 892,125
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for fund shares sold 1,514,897 122,097 75,595
- --------------------------------------------------------------------------------------------------------------------------------
Interest receivable 1,240,636 2,229,959 3,805,155
- --------------------------------------------------------------------------------------------------------------------------------
Other assets 472 974 3,386
- --------------------------------------------------------------------------------------------------------------------------------
Total assets $73,441,190 $174,058,419 $273,091,859
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable $243,759 $598,479 $972,318
- --------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 278,500 2,687,137 --
- --------------------------------------------------------------------------------------------------------------------------------
Payable for fund shares reacquired 77,794 369,064 87,354
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on interest rate swap agreements 268,949 360,836 502,162
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on rate lock swap agreements 90,118 44,240 270,355
- --------------------------------------------------------------------------------------------------------------------------------
Payable to affiliates -
Management fee 582 1,397 2,225
- --------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 3,214 7,542 6,816
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee 830 2,195 3,419
- --------------------------------------------------------------------------------------------------------------------------------
Administrative fee 31 78 123
- --------------------------------------------------------------------------------------------------------------------------------
Accrued expenses and other liabilities 59,005 90,000 70,631
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities $1,022,782 $4,160,968 $1,915,403
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $72,418,408 $169,897,451 $271,176,456
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital $66,705,449 $157,218,459 $250,353,925
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on investments 6,236,378 14,397,134 22,256,894
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (320,335) (1,350,812) (855,416)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income (203,084) (367,330) (578,947)
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $72,418,408 $169,897,451 $271,176,456
- --------------------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND
Shares of beneficial interest outstanding
Class A 4,960,925 11,769,015 19,520,368
- --------------------------------------------------------------------------------------------------------------------------------
Class B 1,492,348 2,700,792 4,007,938
- --------------------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding 6,453,273 14,469,807 23,528,306
- --------------------------------------------------------------------------------------------------------------------------------
Net assets
Class A $55,659,141 $138,200,688 $224,923,421
- --------------------------------------------------------------------------------------------------------------------------------
Class B 16,759,267 31,696,763 46,253,035
- --------------------------------------------------------------------------------------------------------------------------------
Total net assets $72,418,408 $169,897,451 $271,176,456
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares
Net asset value per share
(net assets/shares of beneficial interest outstanding) $11.22 $11.74 $11.52
- --------------------------------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25 of net asset value per share) $11.78 $12.33 $12.09
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $11.23 $11.74 $11.54
- --------------------------------------------------------------------------------------------------------------------------------
On sales of $100,000 or more, the offering price of Class A shares is reduced. A contingent deferred sales charge may be
imposed on redemptions of Class A and Class B shares.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENT OF OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
This statement describes how much your fund received in investment income and paid in expenses. It also describes any gains
and/or losses generated by fund operations.
ALABAMA ARKANSAS CALIFORNIA FLORIDA
FUND FUND FUND FUND
For year ended 3/31/04
NET INVESTMENT INCOME
Interest income $5,258,109 $7,591,690 $24,539,037 $5,673,584
- --------------------------------------------------------------------------------------------------------------------------------
Expenses -
Management fee $547,468 $828,132 $2,500,841 $596,017
- --------------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 5,868 6,872 13,193 6,843
- --------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 149,258 229,129 647,871 162,355
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class A) 205,560 137,721 322,006 --
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class B) 171,405 114,834 837,390 189,324
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class C) -- -- 388,832 --
- --------------------------------------------------------------------------------------------------------------------------------
Administrative fee 9,851 14,828 45,184 10,720
- --------------------------------------------------------------------------------------------------------------------------------
Custodian fee 37,156 55,583 155,128 40,477
- --------------------------------------------------------------------------------------------------------------------------------
Printing 6,727 11,707 37,425 7,957
- --------------------------------------------------------------------------------------------------------------------------------
Postage 1,138 2,335 6,891 1,382
- --------------------------------------------------------------------------------------------------------------------------------
Auditing fees 34,040 34,035 34,040 34,045
- --------------------------------------------------------------------------------------------------------------------------------
Legal fees 5,089 3,104 7,818 2,487
- --------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 42,187 58,734 82,423 57,650
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses $1,215,747 $1,497,014 $5,079,042 $1,109,257
- --------------------------------------------------------------------------------------------------------------------------------
Fees paid indirectly (1,818) (3,081) (6,575) (1,946)
- --------------------------------------------------------------------------------------------------------------------------------
Reduction of expenses by investment adviser (203,890) (308,500) (931,068) (221,827)
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses $1,010,039 $1,185,433 $4,141,399 $885,484
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $4,248,070 $6,406,257 $20,397,638 $4,788,100
- --------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) (identified cost basis) -
Investment transactions $343,635 $515 $2,318,412 $1,177,082
- --------------------------------------------------------------------------------------------------------------------------------
Swap transactions (349,154) (591,304) (1,655,587) (428,658)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $(5,519) $(590,789) $662,825 $748,424
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments $786,578 $1,147,936 $757,022 $61,822
- --------------------------------------------------------------------------------------------------------------------------------
Swap transactions (219,111) (404,649) (345,604) (383,831)
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $567,467 $743,287 $411,418 $(322,009)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $561,948 $152,498 $1,074,243 $426,415
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $4,810,018 $6,558,755 $21,471,881 $5,214,515
- --------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Operations - continued
GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND
For year ending 3/31/04
NET INVESTMENT INCOME
Interest income $3,850,603 $9,184,105 $14,892,696
- --------------------------------------------------------------------------------------------------------------------------------
Expenses -
Management fee $401,428 $948,279 $1,527,229
- --------------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 4,857 7,614 12,886
- --------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 110,758 243,711 459,361
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class A) 138,851 485,670 803,655
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class B) 173,109 333,523 475,686
- --------------------------------------------------------------------------------------------------------------------------------
Administrative fee 7,237 16,999 27,534
- --------------------------------------------------------------------------------------------------------------------------------
Custodian fee 27,750 63,065 100,402
- --------------------------------------------------------------------------------------------------------------------------------
Printing 6,313 17,099 24,705
- --------------------------------------------------------------------------------------------------------------------------------
Postage 1,093 3,212 4,261
- --------------------------------------------------------------------------------------------------------------------------------
Auditing fees 34,062 34,040 34,040
- --------------------------------------------------------------------------------------------------------------------------------
Legal fees 6,356 5,455 10,104
- --------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 35,853 76,882 52,403
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses $947,667 $2,235,549 $3,532,266
- --------------------------------------------------------------------------------------------------------------------------------
Fees paid indirectly (1,503) (2,364) (4,742)
- --------------------------------------------------------------------------------------------------------------------------------
Reduction of expenses by investment adviser (149,481) (353,134) (568,746)
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses $796,683 $1,880,051 $2,958,778
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $3,053,920 $7,304,054 $11,933,918
- --------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) (identified cost basis)-
Investment transactions $648,272 $1,239,299 $1,740,063
- --------------------------------------------------------------------------------------------------------------------------------
Swap transactions (517,348) (591,893) (982,729)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments $130,924 $647,406 $757,334
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments $396,885 $406,377 $688,523
- --------------------------------------------------------------------------------------------------------------------------------
Swap transactions (200,002) (172,981) (465,265)
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $196,883 $233,396 $223,258
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $327,807 $880,802 $980,592
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $3,381,727 $8,184,856 $12,914,510
- --------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------------
This statement describes the increases and/or decreases in net assets resulting from operations, any distributions, and any
shareholder transactions.
ALABAMA ARKANSAS CALIFORNIA FLORIDA
FUND FUND FUND FUND
For year ended 3/31/04
OPERATIONS
Net investment income $4,248,070 $6,406,257 $20,397,638 $4,788,100
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (5,519) (590,789) 662,825 748,424
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments 567,467 743,287 411,418 (322,009)
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $4,810,018 $6,558,755 $21,471,881 $5,214,515
- --------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
Class A $(3,664,883) $(5,995,855) $(15,390,933) $(3,890,452)
- --------------------------------------------------------------------------------------------------------------------------------
Class B (634,171) (445,106) (3,690,150) (900,216)
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- -- (1,506,159) --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(4,299,054) $(6,440,961) $(20,587,242) $(4,790,668)
- --------------------------------------------------------------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS
Net proceeds from sale of shares $11,705,214 $16,469,633 $56,968,858 $15,037,651
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in reinvestment
of distributions 2,586,798 3,872,170 11,441,724 2,205,319
- --------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (17,397,541) (15,142,702) (106,758,985) (27,420,465)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from fund share transactions $(3,105,529) $5,199,101 $(38,348,403) $(10,177,495)
- --------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets $(2,594,565) $5,316,895 $(37,463,764) $(9,753,648)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period 100,637,426 146,570,269 473,041,389 111,220,705
- --------------------------------------------------------------------------------------------------------------------------------
At end of period $98,042,861 $151,887,164 $435,577,625 $101,467,057
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income included
in net assets at end of period $(209,810) $(173,336) $(1,276,148) $(167,166)
- --------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Changes in Net Assets - continued
GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND
For year ended 3/31/04
OPERATIONS
Net investment income $3,053,920 $7,304,054 $11,933,918
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 130,924 647,406 757,334
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments 196,883 233,396 223,258
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $3,381,727 $8,184,856 $12,914,510
- --------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
Class A $(2,441,199) $(6,165,774) $(10,281,251)
- --------------------------------------------------------------------------------------------------------------------------------
Class B (630,108) (1,264,155) (1,818,366)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3,071,307) $(7,429,929) $(12,099,617)
- --------------------------------------------------------------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS
Net proceeds from sale of shares $8,749,566 $12,128,709 $26,173,301
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in reinvestment
of distributions 1,959,911 4,597,281 6,120,108
- --------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (14,314,317) (20,282,205) (43,043,815)
- --------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from fund share transactions $(3,604,840) $(3,556,215) $(10,750,406)
- --------------------------------------------------------------------------------------------------------------------------------
Total decrease in net assets $(3,294,420) $(2,801,288) $(9,935,513)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period 75,712,828 172,698,739 281,111,969
- --------------------------------------------------------------------------------------------------------------------------------
At end of period $72,418,408 $169,897,451 $271,176,456
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income included in
net assets at end of period $(203,084) $(367,330) $(578,947)
- --------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Changes in Net Assets - continued
ALABAMA ARKANSAS CALIFORNIA FLORIDA
FUND FUND FUND FUND
For year ended 3/31/03
OPERATIONS
Net investment income $4,315,172 $6,249,872 $20,643,925 $4,654,968
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 43,290 449,903 2,048,802 (24,359)
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain on investments 4,951,882 5,537,435 18,507,096 4,096,366
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $9,310,344 $12,237,210 $41,199,823 $8,726,975
- --------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
Class A $(3,888,526) $(6,237,037) $(15,987,815) $(3,878,441)
- --------------------------------------------------------------------------------------------------------------------------------
Class B (602,448) (413,995) (3,807,377) (1,009,895)
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- -- (1,632,498) --
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (88,213) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Class B (17,098) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(4,596,285) $(6,651,032) $(21,427,690) $(4,888,336)
- --------------------------------------------------------------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS
Net proceeds from sale of shares $17,945,102 $23,428,402 $104,546,628 $35,587,519
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in reinvestment
of distributions 2,724,678 3,731,803 11,607,493 2,200,811
- --------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (21,471,437) (14,204,886) (87,728,801) (22,516,757)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from fund share transactions $(801,657) $12,955,319 $28,425,320 $15,271,573
- --------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets $3,912,402 $18,541,497 $48,197,453 $19,110,212
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period 96,725,024 128,028,772 424,843,936 92,110,493
- --------------------------------------------------------------------------------------------------------------------------------
At end of period $100,637,426 $146,570,269 $473,041,389 $111,220,705
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income included
in net assets at end of period $(206,766) $(191,559) $(1,189,411) $(163,766)
- --------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Changes in Net Assets - continued
GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND
For year ended 3/31/03
OPERATIONS
Net investment income $3,141,171 $7,346,733 $11,932,377
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 423,201 173,271 111,495
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain on investments 3,279,309 6,851,740 13,663,176
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $6,843,681 $14,371,744 $25,707,048
- --------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
Class A $(2,599,347) $(6,249,737) $(10,462,169)
- --------------------------------------------------------------------------------------------------------------------------------
Class B (643,566) (1,319,733) (1,744,658)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3,242,913) $(7,569,470) $(12,206,827)
- --------------------------------------------------------------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS
Net proceeds from sale of shares $11,386,532 $18,299,728 $51,342,873
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in reinvestment
of distributions 2,137,662 4,625,111 6,030,522
- --------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (11,622,400) (17,320,343) (37,517,245)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from fund share transactions $1,901,794 $5,604,496 $19,856,150
- --------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets $5,502,562 $12,406,770 $33,356,371
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period 70,210,266 160,291,969 247,755,598
- --------------------------------------------------------------------------------------------------------------------------------
At end of period $75,712,828 $172,698,739 $281,111,969
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income included in
net assets at end of period $(187,868) $(331,899) $(721,623)
- --------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) ALABAMA MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
The financial highlights table is intended to help you understand the fund's financial performance for the past 5 years. Certain
information reflects financial results for a single fund share. The total returns in the table represent the rate by which an
investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all distributions) held for the
entire period. This information has been audited by the funds' independent auditors, whose report, together with each fund's
financial statements, are included in this report.
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.82 $10.31 $10.53 $10.00 $10.76
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.48 $0.48 $0.51 $0.54 $0.54
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.06 0.54 (0.19) 0.53 (0.64)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.54 $1.02 $0.32 $1.07 $(0.10)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.48) $(0.50) $(0.54) $(0.54) $(0.54)
- -----------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- (0.01) -- -- (0.12)
- -----------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.00)+++ -- --
- -----------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- -- -- (0.00)+++
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.48) $(0.51) $(0.54) $(0.54) $(0.66)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.88 $10.82 $10.31 $10.53 $10.00
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 5.11 10.06 3.05 11.00 (0.82)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.88 0.88 0.88 0.86 0.89
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.38 4.49 4.87 5.25 5.28
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 10 21 20 17 44
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $80,704 $84,474 $83,146 $81,615 $72,736
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for certain of the periods indicated. If this fee had
been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.45 $0.46 $0.49 $0.52 $0.52
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.09 1.08 1.08 1.06 1.07
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.17 4.29 4.67 5.05 5.10
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended
March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and losses
per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment
income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) ALABAMA MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.82 $10.31 $10.53 $10.00 $10.76
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.39 $0.40 $0.43 $0.46 $0.46
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.07 0.54 (0.19) 0.53 (0.64)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.46 $0.94 $0.24 $0.99 $(0.18)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.40) $(0.42) $(0.46) $(0.46) $(0.46)
- -----------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- (0.01) -- -- (0.12)
- -----------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.00)+++ -- --
- -----------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- -- -- (0.00)+++
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.40) $(0.43) $(0.46) $(0.46) $(0.58)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.88 $10.82 $10.31 $10.53 $10.00
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.32 9.14 2.38 10.17 (1.56)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.63 1.63 1.63 1.61 1.64
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.63 3.74 4.09 4.50 4.53
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 10 21 20 17 44
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $17,339 $16,163 $13,579 $12,531 $10,926
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for certain of the periods indicated. If this fee had
been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.37 $0.38 $0.41 $0.46 $0.44
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.83 1.83 1.83 1.81 1.82
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.43 3.54 3.89 4.30 4.35
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended
March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and losses
per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment
income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) ARKANSAS MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.40 $9.97 $10.08 $9.61 $10.14
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.45 $0.47 $0.51 $0.51 $0.50
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.01 0.46 (0.11) 0.47 (0.53)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.46 $0.93 $0.40 $0.98 $(0.03)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.45) $(0.50) $(0.51) $(0.51) $(0.50)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.41 $10.40 $9.97 $10.08 $9.61
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 4.53 9.51 4.06 10.45 (0.24)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.72 0.73 0.72 0.70 0.72
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.31 4.59 5.05 5.25 5.14
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 19 15 15 12 28
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $139,333 $134,521 $119,328 $113,928 $107,111
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for certain of the periods indicated. If these fees had
been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.43 $0.45 $0.49 $0.49 $0.48
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 0.92 0.93 0.92 0.90 0.90
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.11 4.39 4.85 5.05 4.96
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended
March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and losses
per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment
income to average net assets increased by 0.02%. Per share, ratios, and supplemental data for periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) ARKANSAS MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.41 $9.98 $10.09 $9.62 $10.14
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.37 $0.39 $0.43 $0.44 $0.42
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.01 0.46 (0.11) 0.46 (0.53)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.38 $0.85 $0.32 $0.90 $(0.11)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.37) $(0.42) $(0.43) $(0.43) $(0.41)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.42 $10.41 $9.98 $10.09 $9.62
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) 3.68 8.62 3.24 9.59 (1.02)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.53 1.54 1.50 1.47 1.62
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.50 3.77 4.26 4.49 4.33
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 19 15 15 12 28
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $12,554 $12,049 $8,700 $9,822 $9,227
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for certain of the periods indicated. If these fees had
been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.34 $0.37 $0.41 $0.42 $0.40
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.73 1.74 1.70 1.67 1.80
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.30 3.57 4.06 4.29 4.15
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended
March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and losses
per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment
income to average net assets increased by 0.02%. Per share, ratios, and supplemental data for periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) CALIFORNIA MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $5.96 $5.70 $5.81 $5.52 $5.89
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.28 $0.28 $0.28 $0.28 $0.29
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency 0.02 0.27 (0.10) 0.30 (0.38)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.30 $0.55 $0.18 $0.58 $(0.09)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.28) $(0.29) $(0.28) $(0.29) $(0.28)
- -----------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.01) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.28) $(0.29) $(0.29) $(0.29) $(0.28)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.98 $5.96 $5.70 $5.81 $5.52
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 5.22 9.79 3.11 10.78 (1.41)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.67 0.67 0.67 0.62 0.51
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.71 4.73 4.87 5.08 5.21
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 8 22 12 21 40
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $314,108 $333,350 $305,699 $293,137 $196,828
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for certain of the periods indicated. If this fee had
been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.27 $0.27 $0.27 $0.27 $0.27
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 0.87 0.87 0.87 0.87 0.86
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.51 4.53 4.67 4.83 4.86
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began amortizing premium on debt securities. The effect of this change for the year ended March
31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and losses per
share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment income
to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior to April 1, 2001
have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) CALIFORNIA MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $5.96 $5.70 $5.81 $5.52 $5.89
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.23 $0.23 $0.24 $0.24 $0.25
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency 0.03 0.27 (0.11) 0.30 (0.38)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.26 $0.50 $0.13 $0.54 $(0.13)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.24) $(0.24) $(0.23) $(0.25) $(0.24)
- -----------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.01) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.24) $(0.24) $(0.24) $(0.25) $(0.24)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.98 $5.96 $5.70 $5.81 $5.52
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.38 8.93 2.30 9.93 (2.21)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.47 1.46 1.45 1.39 1.31
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.91 3.94 4.09 4.31 4.38
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 8 22 12 21 40
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $85,106 $98,888 $84,123 $80,473 $60,367
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for certain of the periods indicated. If this fee had
been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.22 $0.22 $0.23 $0.23 $0.23
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.67 1.66 1.65 1.64 1.66
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.71 3.74 3.89 4.06 4.03
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began amortizing premium on debt securities. The effect of this change for the year ended March
31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and losses per
share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment income
to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior to April 1, 2001
have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) CALIFORNIA MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS C 2004 2003 2002 2001 2000
Net asset value, beginning of period $5.98 $5.72 $5.83 $5.53 $5.90
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.23 $0.23 $0.23 $0.23 $0.24
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency 0.02 0.27 (0.10) 0.31 (0.38)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.25 $0.50 $0.13 $0.54 $(0.14)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.23) $(0.24) $(0.23) $(0.24) $(0.23)
- -----------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.01) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.23) $(0.24) $(0.24) $(0.24) $(0.23)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.00 $5.98 $5.72 $5.83 $5.53
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.27 8.78 2.17 9.96 (2.29)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.56 1.57 1.57 1.52 1.41
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.81 3.83 3.97 4.21 4.32
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 8 22 12 21 40
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $36,363 $40,804 $35,022 $33,056 $10,482
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for certain of the periods indicated. If this fee had
been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.22 $0.22 $0.22 $0.22 $0.22
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.77 1.77 1.77 1.77 1.76
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.60 3.63 3.77 3.96 3.97
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began amortizing premium on debt securities. The effect of this change for the year ended March
31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and losses per
share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment income
to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior to April 1, 2001
have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) FLORIDA MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.19 $9.78 $9.95 $9.47 $10.12
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.47 $0.48 $0.50 $0.50 $0.50
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency 0.05 0.44 (0.16) 0.49 (0.65)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.52 $0.92 $0.34 $0.99 $(0.15)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.47) $(0.51) $(0.51) $(0.51) $(0.50)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.24 $10.19 $9.78 $9.95 $9.47
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 5.20 9.40 3.41 10.72 (1.38)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.64 0.62 0.63 0.63 0.66
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.58 4.78 5.09 5.23 5.21
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 31 27 16 18 52
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $79,155 $86,045 $69,959 $66,807 $64,107
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for certain of the periods indicated. If this fee had
been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.45 $0.46 $0.48 $0.48 $0.48
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 0.85 0.82 0.83 0.83 0.84
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.37 4.58 4.89 5.03 5.03
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended
March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and losses
per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment
income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) FLORIDA MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.19 $9.78 $9.95 $9.47 $10.11
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.39 $0.40 $0.43 $0.42 $0.43
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency 0.05 0.43 (0.17) 0.49 (0.64)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.44 $0.83 $0.26 $0.91 $(0.21)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.39) $(0.42) $(0.43) $(0.43) $(0.43)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.24 $10.19 $9.78 $9.95 $9.47
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.36 8.64 2.58 9.84 (2.07)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.44 1.42 1.43 1.43 1.45
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.78 3.97 4.29 4.43 4.42
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 31 27 16 18 52
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $22,312 $25,175 $22,151 $23,820 $19,999
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for certain of the periods indicated. If this fee had
been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.37 $0.38 $0.41 $0.41 $0.41
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.64 1.62 1.63 1.63 1.63
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.58 3.77 4.09 4.23 4.24
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended
March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and losses
per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment
income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) GEORGIA MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.17 $10.63 $10.82 $10.26 $10.93
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.49 $0.49 $0.50 $0.52 $0.52
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.05 0.55 (0.17) 0.56 (0.67)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.54 $1.04 $0.33 $1.08 $(0.15)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.49) $(0.50) $(0.51) $(0.52) $(0.52)
- -----------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.01) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.49) $(0.50) $(0.52) $(0.52) $(0.52)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.22 $11.17 $10.63 $10.82 $10.26
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 4.93 9.97 3.03 10.80 (1.32)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.91 0.92 0.93 0.90 0.93
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.35 4.43 4.67 4.95 4.98
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 12 25 19 24 39
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $55,659 $57,636 $54,179 $52,236 $48,054
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for certain of the periods indicated. If this fee had
been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.46 $0.47 $0.48 $0.50 $0.50
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.12 1.12 1.13 1.10 1.11
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.14 4.23 4.47 4.75 4.80
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended
March 31, 2002, was to decrease net investment income per share and increase net realized and unrealized gains and losses
per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment
income to average net assets decreased by 0.03%. Per share, ratios, and supplemental data for periods prior to April 1,
2001, have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) GEORGIA MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.18 $10.64 $10.83 $10.27 $10.93
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.40 $0.40 $0.42 $0.45 $0.44
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.06 0.56 (0.18) 0.55 (0.66)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.46 $0.96 $0.24 $1.00 $(0.22)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.41) $(0.42) $(0.42) $(0.44) $(0.44)
- -----------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.01) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.41) $(0.42) $(0.43) $(0.44) $(0.44)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.23 $11.18 $10.64 $10.83 $10.27
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.15 9.15 2.26 9.97 (2.06)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.66 1.67 1.68 1.65 1.68
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.60 3.68 3.91 4.25 4.24
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 12 25 19 24 39
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $16,759 $18,077 $16,031 $17,376 $14,777
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for certain of the periods indicated. If this fee had
been incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.38 $0.38 $0.40 $0.43 $0.42
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.86 1.87 1.88 1.85 1.86
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.40 3.48 3.71 4.05 4.06
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended
March 31, 2002 was to decrease net investment income per share and increase net realized and unrealized gains and losses
per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment
income to average net assets decreased by 0.03%. Per share, ratios, and supplemental data for periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MARYLAND MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.69 $11.21 $11.35 $10.81 $11.49
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.51 $0.52 $0.54 $0.54 $0.53
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.06 0.50 (0.14) 0.54 (0.68)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.57 $1.02 $0.40 $1.08 $(0.15)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.52) $(0.54) $(0.54) $(0.54) $(0.53)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.74 $11.69 $11.21 $11.35 $10.81
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 4.96 9.21 3.59 10.26 (1.27)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.96 0.95 0.95 0.95 0.96
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.35 4.51 4.73 4.96 4.85
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 21 12 8 14 24
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $138,201 $138,666 $128,750 $125,316 $114,957
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.49 $0.50 $0.52 $0.52 $0.51
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.17 1.15 1.15 1.15 1.14
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.14 4.31 4.53 4.76 4.67
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began amortizing premium on debt securities. The effect of this change for the year ended March
31, 2002 was to increase net investment income per share and decrease net realized and unrealized gains and losses per
share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment income
to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior to April 1, 2001
have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid directly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MARYLAND MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.68 $11.20 $11.34 $10.81 $11.48
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.43 $0.45 $0.46 $0.47 $0.46
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.07 0.49 (0.13) 0.53 (0.67)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.50 $0.94 $0.33 $1.00 $(0.21)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.44) $(0.46) $(0.47) $(0.47) $(0.46)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.74 $11.68 $11.20 $11.34 $10.81
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.37 8.52 2.92 9.46 (1.82)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.61 1.60 1.60 1.60 1.61
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.70 3.86 4.08 4.30 4.21
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 21 12 8 14 24
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $31,697 $34,033 $31,542 $28,859 $26,845
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.41 $0.42 $0.44 $0.47 $0.44
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.81 1.80 1.80 1.80 1.79
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.50 3.66 3.88 4.10 4.03
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began amortizing premium on debt securities. The effect of this change for the year ended March
31, 2002 was to increase net investment income per share and decrease net realized and unrealized gains and losses per
share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment income
to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior to April 1, 2001
have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid directly.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MASSACHUSETTS MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.49 $10.90 $11.11 $10.60 $11.35
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.51 $0.52 $0.53 $0.55 $0.57
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.03 0.60 (0.21) 0.52 (0.76)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.54 $1.12 $0.32 $1.07 $(0.19)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.51) $(0.53) $(0.52) $(0.56) $(0.56)
- -----------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.01) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.51) $(0.53) $(0.53) $(0.56) $(0.56)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.52 $11.49 $10.90 $11.11 $10.60
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 4.82 10.42 2.93 10.44 (1.57)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.95 0.92 0.92 0.92 0.92
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.39 4.56 4.73 5.10 5.29
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 14 15 13 22 35
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $224,923 $233,500 $210,269 $216,272 $207,228
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If these fees had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.48 $0.49 $0.51 $0.53 $0.55
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.16 1.12 1.12 1.12 1.10
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.18 4.36 4.53 4.90 5.11
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended
March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and losses
per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment
income to average net assets increased by $0.01%. Per share, ratios, and supplemental data for periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MASSACHUSETTS MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.51 $10.92 $11.12 $10.60 $11.35
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.43 $0.44 $0.46 $0.48 $0.50
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.04 0.60 (0.20) 0.53 (0.76)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.47 $1.04 $0.26 $1.01 $(0.26)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.44) $(0.45) $(0.45) $(0.49) $(0.49)
- -----------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.01) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.44) $(0.45) $(0.46) $(0.49) $(0.49)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.54 $11.51 $10.92 $11.12 $10.60
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.14 9.69 2.35 (9.82) (2.30)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.60 1.57 1.57 1.57 1.57
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.74 3.91 4.13 4.45 4.64
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 14 15 13 22 35
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $46,253 $47,612 $37,487 $30,057 $25,743
- -----------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If these fees had been
incurred by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.41 $0.42 $0.44 $0.46 $0.48
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.80 1.77 1.77 1.77 1.75
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.54 3.71 3.93 4.25 4.46
- -----------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended
March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and losses
per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net investment
income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(1) BUSINESS AND ORGANIZATION
MFS Alabama Municipal Bond Fund (Alabama Fund), MFS Arkansas Municipal Bond Fund
(Arkansas Fund), MFS California Municipal Bond Fund (California Fund), MFS
Florida Municipal Bond Fund (Florida Fund), MFS Georgia Municipal Bond Fund
(Georgia Fund), MFS Maryland Municipal Bond Fund (Maryland Fund), and MFS
Massachusetts Municipal Bond Fund (Massachusetts Fund) are each a non-
diversified series of MFS Municipal Series Trust (the trust). The trust is
organized as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company.
(2) SIGNIFICANT ACCOUNTING POLICIES
General - The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. Because each fund invests primarily in the securities of a single
state and its political subdivisions, each fund is vulnerable to the effects of
changes in the legal and economic environment of the particular state. Municipal
securities backed by current or anticipated revenues from a specific project or
specific assets can be negatively affected by the discontinuance of the taxation
supporting the projects or assets or the inability to collect revenues for the
project or from the assets. If the Internal Revenue Service determines an issuer
of a municipal security has not complied with applicable tax requirements,
interest from the security could become taxable and the security could decline
in value.
Investment Valuations - Each fund uses independent pricing services approved by
the Board of Trustees wherever possible to value its portfolio securities.
Portfolio securities are valued at current market prices where current market
prices are readily available, or the fund may fair value portfolio securities
under the direction of the Board of Trustees when a determination is made that
current market prices are not readily available. Bonds and other fixed income
securities (other than short-term obligations) in each fund's portfolio are
valued at an evaluated bid price as reported by an independent pricing service,
or to the extent a valuation is not reported by a pricing service, such
securities are valued on the basis of quotes from brokers and dealers. Prices
obtained from pricing services utilize both dealer-supplied valuations and
electronic data processing techniques which take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics,
and other market data without exclusive reliance upon quoted prices or exchange
or over-the-counter prices, since such valuations are believed to reflect more
accurately the fair value of such securities. Bonds and other fixed income
securities for which it is determined that current market prices are not readily
available will be fair valued under the direction of the Board of Trustees.
Futures contracts are valued at the settlement price as reported by an
independent pricing service on the primary exchange on which they are traded.
Short-term obligations with a remaining maturity in excess of 60 days will be
valued upon dealer-supplied valuations. All other short-term obligations in each
of the fund's portfolio are valued at amortized cost, which constitutes market
value as determined by the Board of Trustees.
Futures Contracts - Each fund may enter into futures contracts for the delayed
delivery of securities or currency, or contracts based on financial indices at a
fixed price on a future date. In entering such contracts, each fund is required
to deposit with the broker either in cash or securities an amount equal to a
certain percentage of the contract amount. Subsequent payments are made or
received by the fund each day, depending on the daily fluctuations in the value
of the contract, and are recorded for financial statement purposes as unrealized
gains or losses by the fund. Each fund's investment in futures contracts is
designed to hedge against anticipated future changes in interest rates or
securities prices. Investments in interest rate futures for purposes other than
hedging may be made to modify the duration of the portfolio without incurring
the additional transaction costs involved in buying and selling the underlying
securities. Investments in currency futures for purposes other than hedging may
be made to change the fund's relative position in one or more currencies without
buying and selling portfolio assets. Should interest rates or securities prices
move unexpectedly, the fund may not achieve the anticipated benefits of the
futures contracts and may realize a loss.
Swap Agreements - Each fund may enter into swap agreements. A swap is an
exchange of cash payments between the fund and another party, which is based on
a specific financial index. Cash payments are exchanged at specified intervals
and the expected income or expense is recorded on the accrual basis. The value
of the swap is adjusted daily and the change in value is recorded as unrealized
appreciation or depreciation. Risks may arise upon entering into these
agreements from the potential inability of counterparties to meet the terms of
their contract and from unanticipated changes in the value of the financial
index on which the swap agreement is based. The funds may use swaps for both
hedging and non-hedging purposes. For hedging purposes, the fund may use swaps
to reduce its exposure to interest rate fluctuations. For non- hedging purposes,
the fund may use swaps to take a position on anticipated changes in the
underlying financial index.
Interest Rate Swap Agreements - Interest rate swap agreements are agreements to
exchange cash flows periodically based on a notional principal amount, for
example the exchange of fixed rate interest payments for floating rate interest
payments which are based on a specific financial index or the exchange of two
distinct floating rate payments. The net receivable or payable associated with
these payments is accrued daily and is recorded as net interest income or
expense. For financial statement purposes, the net interest income or expense
periodically recognized for an interest rate swap is recorded in the same line
item as any unrealized and realized gains or losses recognized for that
instrument. The primary risk associated with interest rate swap agreements is
that unfavorable changes in the fluctuation of interest rates could adversely
impact the funds.
Rate Lock Swap Agreements - Each fund may enter into rate lock swap agreements,
which are used to reduce the interest rate risk of the portfolio. A rate lock
swap agreement is a payment or receipt of cash on a specified future date,
calculated as the difference between the strike rate and a specific index yield
on that date. The payment received or made at the end of the measurement period
is recorded as a realized gain or loss in the Statement of Operations. The value
of the swap is adjusted daily and the change in value is recorded as unrealized
appreciation or depreciation.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All premium and
discount is amortized or accreted for financial statement purposes in accordance
with accounting principles generally accepted in the United States of America.
All premium and original issue discount is amortized or accreted for tax
reporting purposes as required by federal income tax regulations. Interest
payments received in additional securities are recorded on the ex- dividend or
ex-interest date in an amount equal to the value of the security on such date.
Legal fees and other related expenses incurred to preserve and protect the value
of a security owned are added to the cost of the security; other legal fees are
expensed. Capital infusions made directly to the security issuer, which are
generally non-recurring, incurred to protect or enhance the value of high-yield
debt securities, are reported as additions to the cost basis of the security.
Costs that are incurred to negotiate the terms or conditions of capital
infusions or that are expected to result in a plan of reorganization are
reported as realized losses. Ongoing costs incurred to protect or enhance an
investment, or costs incurred to pursue other claims or legal actions, are
expensed.
Fees Paid Indirectly - Each fund's custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by the
fund. This amount, for the year ended March 31, 2004, is shown as a reduction of
total expenses on the Statement of Operations.
Tax Matters and Distributions - Each fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net tax-
exempt and taxable net income, including any net realized gain on investments.
Accordingly, no provision for federal income or excise tax is provided.
Distributions paid by each fund from net interest received on tax-exempt
municipal bonds are not includable by shareholders as gross income for federal
income tax purposes because each fund intends to meet certain requirements of
the Code applicable to regulated investment companies, which will enable each
fund to pay exempt-interest dividends. The portion of such interest, if any,
earned on private activity bonds issued after August 7, 1986 may be considered a
tax-preference item to shareholders.
Distributions to shareholders are recorded on the ex-dividend date. Each fund
distinguishes between distributions on a tax basis and a financial reporting
basis and only distributions in excess of tax basis earnings and profits are
reported in the financial statements as distributions from paid-in capital.
Differences in the recognition or classification of income between the financial
statements and tax earnings and profits, which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or net realized gains. Common
types of book and tax differences that could occur include differences in
accounting for derivatives, defaulted bonds, capital losses, and amortization
and accretion on debt securities.
The tax character of distributions paid for the years ended March 31, 2004 and March 31, 2003 was as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
YEAR ENDED 3/31/04 FUND FUND FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------------
Distributions declared from:
Tax-exempt income $4,299,054 $6,440,961 $20,587,242 $4,790,668 $3,071,307 $7,429,929 $12,099,617
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 3/31/03
- ------------------------------------------------------------------------------------------------------------------------------
Distributions declared from:
Tax-exempt income $4,493,757 $6,651,032 $21,427,690 $4,888,336 $3,242,913 $7,569,470 $12,206,827
- --------------------------------------------------------------------------------------------------------------------------------
Ordinary income 59,140 -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Long-term capital gain 43,388 -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared $4,596,285 $6,651,032 $21,427,690 $4,888,336 $3,242,913 $7,569,470 $12,206,827
- --------------------------------------------------------------------------------------------------------------------------------
During the year ended March 31, 2004, the following amounts were reclassified due to differences between book and tax accounting
for amortization and accretion on debt securities, market discount on disposal of securities, capital losses, and utilization of
equalization (a tax basis dividends paid deduction from earnings and profits distributed to shareholders upon redemption of
shares):
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease):
Paid-in-capital $36,356 $(5,673,302) $185,348 $(16,234) $(18,050) $(1,119,842) $(729,602)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on investments (84,296) 5,620,375 (288,215) 17,066 15,879 1,029,398 421,227
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
distributions in excess of net
investment income 47,940 52,927 102,867 (832) 2,171 90,444 308,375
- --------------------------------------------------------------------------------------------------------------------------------
These changes had no effect on the net assets or net asset value per share of the funds.
As of March 31, 2004, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------------
Undistributed tax-exempt income $152,373 $369,349 $452,093 $218,278 $57,013 $248,158 $408,532
- --------------------------------------------------------------------------------------------------------------------------------
Capital loss carryforward (134,683) (815,441) (1,968,114) (1,591,545) (316,767) (1,455,666) (937,774)
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized gain 8,238,413 13,143,642 31,264,481 6,876,654 6,232,810 14,501,988 22,339,252
- --------------------------------------------------------------------------------------------------------------------------------
Other temporary differences (362,183) (585,592) (1,728,241) (385,444) (260,097) (615,488) (987,479)
- --------------------------------------------------------------------------------------------------------------------------------
For federal income tax purposes, the capital loss carryforward may be applied against any net taxable realized gains of each
succeeding year until the earlier of its utilization or expiration on:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
EXPIRATION DATE FUND FUND FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------------
March 31, 2005 $-- $(215,971) $-- $(524,124) $-- $(1,055,172) $(405,183)
- --------------------------------------------------------------------------------------------------------------------------------
March 31, 2006 -- -- -- (781,761) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
March 31, 2007 -- -- -- -- -- -- (242,062)
- --------------------------------------------------------------------------------------------------------------------------------
March 31, 2008 -- (15,757) (87,023) -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
March 31, 2009 -- -- (1,881,091) -- (316,767) (400,494) --
- --------------------------------------------------------------------------------------------------------------------------------
March 31, 2010 -- -- -- (164,025) -- -- (290,529)
- --------------------------------------------------------------------------------------------------------------------------------
March 31, 2011 -- -- -- (121,635) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
March 31, 2012 (134,683) (583,713) -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total $(134,683) $(815,441) $(1,968,114) $(1,591,545) $(316,767) $(1,455,666) $(937,774)
- --------------------------------------------------------------------------------------------------------------------------------
Multiple Classes of Shares of Beneficial Interest - Each fund offers multiple classes of shares, which differ in their
respective distribution and service fees. All shareholders bear the common expenses of the fund based on the value of settled
and estimated shares outstanding of each class, without distinction between share classes. Dividends are declared separately for
each class. Differences in per share dividend rates are due to differences in separate class expenses charged. Class B shares
will convert to Class A shares approximately eight years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
Investment Adviser - The trust has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an annual rate of 0.55% of
each fund's average daily net assets. The investment adviser has contractually
agreed to waive a portion of its fee, which is shown as a reduction of total
expenses in the Statement of Operations. From April 1, 2003 to February 29,
2004, MFS reduced each fund's management fees to 0.35% of average daily net
assets. As part of the settlement agreement with the New York Attorney General
concerning market timing and related matters, MFS has agreed to reduce each
fund's management fee to 0.30% of average daily net assets for the period from
March 1, 2004 through February 28, 2009. During this time period, the Board of
Trustees will continue to review the appropriateness of all advisory fees in
accordance with their oversight responsibilities. After February 28, 2009 the
management fee will be determined in accordance with then existing review
policies approved by the Board of Trustees overseeing the funds. Management fees
incurred for the year ended March 31, 2004 were 0.35% of average daily net
assets on an annualized basis for each fund.
Each fund pays compensation to the Independent Trustees ("Trustees") in the form
of both a retainer and attendance fees, and pays no compensation directly to its
Trustees who are officers of the investment adviser, or to officers of the fund,
all of whom receive remuneration for their services to the fund from MFS.
Certain officers and Trustees of the fund are officers or directors of MFS, MFS
Fund Distributors, Inc. (MFD), and MFS Service Center, Inc. (MFSC). The fund has
an unfunded, defined benefit plan for retired Independent Trustees. Included in
Trustees' compensation is a pension expense for retired Independent Trustees for
the year ended March 31, 2004:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
Pension Expense $2,781 $1,605 $2,535 $1,600 $1,788 $2,327 $2,360
- ---------------------------------------------------------------------------------------------------------------------------------
Administrator - MFS provides certain financial, legal, shareholder
communications, compliance, and other administrative services to certain funds
for which MFS acts as investment adviser. Under an administrative services
agreement between the funds and MFS, MFS is entitled to partial reimbursement of
the costs MFS incurs to provide these services, subject to review and approval
by the Board of Trustees. Each fund is allocated a portion of these
administrative costs based on its size and relative average net assets, subject
to a maximum amount, (i.e., each fund will pay the lesser of its allocated costs
or a maximum amount based on its average daily net assets). For the year ended
March 31, 2004, the maximum amount is based on the following annual percentages
of the fund's average daily net assets:
First $2 billion 0.0175%
- --------------------------------------------------------------------------------
Next $2.5 billion 0.0130%
- --------------------------------------------------------------------------------
Next $2.5 billion 0.0005%
- --------------------------------------------------------------------------------
In excess of $7 billion 0.0000%
- --------------------------------------------------------------------------------
For the year ended March 31, 2004, each fund paid MFS, which is listed below,
that is equivalent to a percentage of average daily net assets, to partially
reimburse MFS for the costs of providing administrative services.
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses Paid $9,851 $14,828 $45,184 $10,720 $7,237 $16,999 $27,534
- ------------------------------------------------------------------------------------------------------------------------------------
Percentage of average daily net
assets 0.0099% 0.0098% 0.0099% 0.0099% 0.0099% 0.0098% 0.0099%
- ------------------------------------------------------------------------------------------------------------------------------------
The maximum amount that could have been charged to the fund during the period for administrative costs equaled the following:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------
$17,483 $26,450 $79,854 $19,032 $12,819 $30,284 $48,771
- ----------------------------------------------------------------------------------------------------------------------------
Effective April 1, 2004 the maximum amount is based on the following annual percentages of each fund's average daily net assets:
First $2 billion 0.01120%
- --------------------------------------------------------------------------------
Next $2.5 billion 0.00832%
- --------------------------------------------------------------------------------
Next $2.5 billion 0.00032%
- --------------------------------------------------------------------------------
In excess of $7 billion 0.00000%
- --------------------------------------------------------------------------------
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received the following amounts as its portion of the sales
charge on sales of Class A shares for the year ended March 31, 2004:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------
$38,678 $74,485 $78,359 $37,475 $19,724 $38,347 $71,117
The Trustees have adopted a distribution plan for Class A, Class B, and Class C shares pursuant to Rule 12b-1 of the Investment
Company Act of 1940 as follows:
Each fund's distribution plan provides that each fund will pay MFD up to 0.35% per annum of its average daily net assets
attributable to Class A shares in order that MFS may pay expenses on behalf of the fund related to the distribution and
servicing of its shares. These expenses include a service fee paid to each securities dealer that enters into a sales agreement
with MFD of up to 0.25% per annum of each fund's average daily net assets attributable to Class A shares which are attributable
to that securities dealer and a distribution fee to MFD of up to 0.10% per annum of each fund's average daily net assets
attributable to Class A shares. For the year ended March 31, 2004, MFD retained the following service fees for accounts not
attributable to a securities dealer:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------
$1,758 $1,261 $3,879 $-- $859 $6,137 $57,144
During the year ended March 31, 2004, fees incurred under the distribution plan as a percentage of each fund's average daily
net assets attributable to Class A shares on an annualized basis were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------
0.25% 0.10% 0.10% 0.00% 0.25% 0.35% 0.35%
Payments of the 0.10% per annum Class A distribution fee will be implemented on such a date as the Trustees of the trust may
determine for the Alabama, Arkansas, California, Florida, and Georgia funds. Payment of the 0.25% per annum Class A service fee
by the Florida Fund will commence on such date as the Trustees of the trust may determine. In the case of the Arkansas and
California Funds, a portion of the service fee is currently being paid by each fund; payment of the remaining portion for the
Class A service fee will become payable on such date as the Trustees of the trust may determine.
Each fund's distribution plan provides that the fund will pay MFD a distribution fee of 0.75% per annum, and a service fee of up
to 0.25% per annum, of the fund's average daily net assets attributable to Class B and Class C shares. MFD will pay to
securities dealers that enter into a sales agreement with MFD all or a portion of the service fee attributable to Class B and
Class C shares, and will pay to such securities dealers all of the distribution fee attributable to Class C shares. The service
fee is intended to be consideration for services rendered by the dealer with respect to Class B and Class C shares. MFD retains
the service fee for accounts not attributable to securities dealers. Class B and Class C service fees during the year ended
March 31, 2004 were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
Class B $84 $7 $395 $-- $20 $122 $302
- ---------------------------------------------------------------------------------------------------------------------------------
Class C N/A N/A $464 N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
During the year ended March 31, 2004, fees incurred under the distribution plan as a percentage of average daily net assets
attributable to Class B and Class C shares on an annualized basis were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
Class B 1.00% 0.91% 0.90% 0.80% 1.00% 1.00% 1.00%
- ---------------------------------------------------------------------------------------------------------------------------------
Class C N/A N/A 1.00% N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Except in the case of the 0.25% per annum first year Class B shares service fee, payments by the Florida Fund will be suspended
until such date as the Trustees of the trust may determine. In the case of the Arkansas and California funds, the 0.25% per
annum Class B service fee for the sale of Class B shares in the first year is currently 0.10%.
Certain Class A and Class C shares are subject to a contingent deferred sales charge in the event of a shareholder redemption
within, for Class A shares, 12 months following the purchase, and, for Class C shares, the first year from the end of the
calendar month of purchase. A contingent deferred sales charge is imposed on shareholder redemptions of Class B shares in the
event of a shareholder redemption within six years from the end of the calendar month of purchase. MFD receives all contingent
deferred sales charges. Contingent deferred sales charges (CDSC) imposed during the year ended March 31, 2004 were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
CDSC IMPOSED FUND FUND FUND FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------------------
Class A $-- $-- $23,994 $847 $-- $-- $8,620
- -------------------------------------------------------------------------------------------------------------------------
Class B 49,063 13,626 269,727 64,261 46,749 77,542 131,590
- -------------------------------------------------------------------------------------------------------------------------
Class C -- -- 26,036 -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Shareholder Servicing Agent - Included in shareholder servicing costs is a fee paid to MFSC, a wholly owned subsidiary of MFS,
for its services as shareholder servicing agent. The fee is calculated as a percentage of each fund's average daily net assets
at an annual rate of 0.11%, for the year ended March 31, 2004. Effective April 1, 2004, the fee is set at 0.10% of each fund's
average net assets. For the year ended March 31, 2004, each fund paid MFSC a fee of the following for shareholder services which
amounted to 0.11% of the fund's average net assets.
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------------------
$109,301 $165,357 $499,229 $118,982 $80,137 $189,327 $304,902
Also included in shareholder servicing costs are out-of-pocket expenses, paid to MFSC, which amounted to the following for the
year ended March 31, 2004, as well as other expenses paid to unaffiliated vendors:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------------------
$6,577 $17,080 $54,534 $11,034 $8,801 $18,320 $101,170
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than U.S. government securities, purchased option transactions, and short-term
obligations were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------
Purchases $9,306,679 $33,305,857 $36,424,161 $32,167,514 $8,840,093 $35,055,583 $36,694,587
- ----------------------------------------------------------------------------------------------------------------------------
Sales 12,033,318 27,260,285 77,683,581 35,383,504 14,262,557 37,615,221 $48,328,200
- ----------------------------------------------------------------------------------------------------------------------------
The cost and unrealized appreciation or depreciation in value of the investments owned by each fund, as computed on a federal
income tax basis, are as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Aggregate cost $88,364,113 $133,626,813 $401,044,179 $93,199,469 $64,013,140 $154,627,009 $245,144,077
- -----------------------------------------------------------------------------------------------------------------------------------
Gross unrealized appreciation $9,036,436 $13,697,810 $35,273,192 $7,495,348 $6,650,701 $15,207,937 $23,838,588
- -----------------------------------------------------------------------------------------------------------------------------------
Gross unrealized depreciation (398,967) (75,643) (3,130,185) (124,925) (58,823) (300,940) (729,704)
- -----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation $8,637,469 $13,622,167 $32,143,007 $7,370,423 $6,591,878 $14,906,997 $23,108,884
- -----------------------------------------------------------------------------------------------------------------------------------
(5) SHARES OF BENEFICIAL INTEREST
The Trust's Declaration permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest.
Transactions in fund shares were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 3/31/04 (000 OMITTED) SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
CLASS A SHARES
Shares sold 726 $7,893 1,380 $14,370 6,490 $38,645 1,178 $12,024
- --------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 207 2,241 348 3,618 1,394 8,298 1791,822
- --------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (1,322) (14,349) (1,283) (13,287) (11,257) (66,990) (2,067) (21,072)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (389) $(4,215) 445 $4,701 (3,373) $(20,047) (710) $(7,226)
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 3/31/03 (000 OMITTED)
Shares sold 1,153 $12,281 1,835 $18,905 10,049 $59,243 2,604 $26,400
- --------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 223 2,376 341 3,504 1,455 8,573 1761,772
- --------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (1,634) (17,350) (1,205) (12,416) (9,209) (54,405) (1,487) (15,017)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (258) $(2,693) 971 $9,993 2,295 $13,411 1,293 $13,155
- --------------------------------------------------------------------------------------------------------------------------------
ALABAMA ARKANSAS CALIFORNIA FLORIDA
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 3/31/04 (000 OMITTED) SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
CLASS B SHARES
Shares sold 350 $3,812 200 $2,100 1,820 $10,917 295 $3,014
- --------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 32 346 25 254 368 2,189 38 383
- --------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (282) (3,048) (178) (1,856) (4,539) (26,957) (624) (6,349)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 100 $1,110 47 $498 (2,351) $(13,851) (291) $(2,952)
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 3/31/03 (000 OMITTED)
Shares sold 528 $5,663 437 $4,523 4,864 $28,766 909 $9,188
- --------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 33 349 22 228 345 2,030 42 429
- --------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (385) (4,121) (174) (1,789) (3,379) (19,889) (745) (7,500)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase 176 $1,891 285 $2,962 1,830 $10,907 206 $2,117
- --------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA
- --------------------------------------------------------------------
YEAR ENDED 3/31/04 (000 OMITTED) SHARES AMOUNT
CLASS C SHARES
Shares sold 1,235 $7,407
- --------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 160 955
- --------------------------------------------------------------------
Shares reacquired (2,154) (12,812)
- --------------------------------------------------------------------
Net decrease (759) $(4,450)
- --------------------------------------------------------------------
YEAR ENDED 3/31/03 (000 OMITTED)
Shares sold 2,792 $16,538
- --------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 170 1,004
- --------------------------------------------------------------------
Shares reacquired (2,264) (13,435)
- --------------------------------------------------------------------
Net increase 698 $4,107
- --------------------------------------------------------------------
GEORGIA MARYLAND MASSACHUSETTS
- ------------------------------------------------------------------------------------------------------------------
YEAR ENDED 3/31/04 (000 OMITTED) SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
CLASS A SHARES
Shares sold 568 $6,339 759 $8,889 1,640 $18,843
- ------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 145 1,614 332 3,885 435 4,994
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (911) (10,174) (1,186) (13,849) (2,878) (33,079)
- ------------------------------------------------------------------------------------------------------------------
Net decrease (198) $(2,221) (95) $(1,075) (803) $(9,242)
- ------------------------------------------------------------------------------------------------------------------
YEAR ENDING 3/31/03 (000 OMITTED)
Shares sold 649 $7,160 1,049 $12,130 3,172 $36,120
- ------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 163 1,794 337 3,890 440 4,975
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (750) (8,271) (1,005) (11,574) (2,576) (29,224)
- ------------------------------------------------------------------------------------------------------------------
Net increase 62 $683 381 $4,446 1,036 $11,871
- ------------------------------------------------------------------------------------------------------------------
GEORGIA MARYLAND MASSACHUSETTS
- ------------------------------------------------------------------------------------------------------------------
YEAR ENDED 3/31/04 (000 OMITTED) SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
CLASS B SHARES
Shares sold 214 $2,410 276 $3,240 635 $7,331
- ------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 31 346 61 712 98 1,126
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (369) (4,140) (550) (6,433) (863) (9,965)
- ------------------------------------------------------------------------------------------------------------------
Net decrease (124) $(1,384) (213) $(2,481) (130) $(1,508)
- ------------------------------------------------------------------------------------------------------------------
YEAR ENDED 3/31/03 (000 OMITTED)
Shares sold 384 $4,226 533 $6,170 1,340 $15,222
- ------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 31 344 64 735 93 1,056
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (305) (3,351) (499) (5,746) (729) (8,293)
- ------------------------------------------------------------------------------------------------------------------
Net increase 110 $1,219 98 $1,159 704 $7,985
- ------------------------------------------------------------------------------------------------------------------
(6) LINE OF CREDIT
The trust and other affiliated funds participate in an $800 million unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. Borrowings may be made for temporary financing needs. Interest is
charged to each fund, based on its borrowings, at a rate equal to the bank's
base rate plus 0.50%. In addition, a commitment fee, based on the average daily,
unused portion of the line of credit, is allocated among the participating funds
at the end of each calendar quarter. The commitment fee allocated to each fund
for the year ended March 31, 2004 ranged from $669 to $3,911. None of the funds
had significant borrowings during the year.
(7) FINANCIAL INSTRUMENTS
The trust trades financial instruments with off-balance-sheet risk in the normal
course of its investing activities in order to manage exposure to market risks
such as interest rates. These financial instruments include swap agreements. The
notional or contractual amounts of these instruments represent the investment
the fund has in particular classes of financial instruments and does not
necessarily represent the amounts potentially subject to risk. The measurement
of the risks associated with these instruments is meaningful only when all
related and offsetting transactions are considered.
Swap Agreements
Interest Rate Swap Agreements
NOTIONAL PRINCIPAL CASH FLOWS UNREALIZED
AMOUNT OF CONTRACT RECEIVED BY CASH FLOWS PAID APPRECIATION
FUND EXPIRATION (000 OMITTED) THE FUND BY THE FUND (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------------------------------------
Alabama Fund Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
10/31/12 1,000 X 78.875% Index $(4,979)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 2 Year
BMA Swap BMA Swap
11/15/04 2,500 Index Index (1.945%) (15,577)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
12/18/12 2,000 X 78.75% Index (10,771)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/25/19 800 Index Index (4.015%) (6,342)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 20 Year
BMA Swap BMA Swap
4/7/24 1,000 Index Index (4.159%) (18,023)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
6/17/16 750 Index Index (4.09%) (30,832)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/9/14 1,900 Index Index (3.73%) (17,458)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
10/27/14 1,900 Index Index (3.444%) 26,161
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
10/27/34 1,000 Index (4.132%) Index (25,294)
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/10/34 1,000 Index (4.200%) Index (17,462)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/10/14 1,900 Index Index (3.576%) 6,529
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/9/34 1,000 Index (4.322%) Index 1,223
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/11/19 500 Index Index (4.069%) (9,315)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/14/19 200 Index Index (4.137%) (5,065)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
6/9/19 2,000 Index Index (4.278%) (123,352)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
5/26/19 2,000 Index Index (4.152%) (63,690)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
9/22/14 500 Index Index (3.443%) 5,310
- ---------------------------------------------------------------------------------------------------------------------------------
Total Alabama Fund $(308,937)
- ---------------------------------------------------------------------------------------------------------------------------------
Arkansas Fund Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
10/31/12 1,400 X 78.875% Index $(6,974)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 2 Year
BMA Swap BMA Swap
11/15/04 3,200 Index Index (1.945%) (19,932)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
12/18/12 2,900 X 78.75% Index (15,621)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/25/19 1,000 Index Index (4.015%) (7,927)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 20 Year
BMA Swap BMA Swap
4/7/24 1,500 Index Index (4.159%) (27,035)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
6/17/16 2,000 Index Index (4.09%) (82,218)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/9/14 2,850 Index Index (3.73%) (26,186)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
10/27/14 2,850 Index Index (3.444%) 39,242
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
10/27/34 1,500 Index (4.132%) Index (37,941)
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/10/34 1,500 Index (4.200%) Index (26,193)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/10/14 2,850 Index Index (3.576%) 9,793
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/9/34 1,500 Index (4.322%) Index 1,834
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/11/19 1,000 Index Index (4.069%) (18,629)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/4/19 1,500 Index Index (4.039%) (18,843)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
5/26/19 2,000 Index Index (4.152%) (63,690)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
9/22/14 500 Index Index (3.443%) 5,310
- ---------------------------------------------------------------------------------------------------------------------------------
Total Arkansas Fund $(295,010)
- ---------------------------------------------------------------------------------------------------------------------------------
California Fund Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
10/31/12 4,600 X 78.875% Index $(22,906)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 2 Year
BMA Swap BMA Swap
11/15/04 10,500 Index Index (1.945%) (65,423)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
12/18/12 9,300 X 78.75% Index (50,086)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/25/19 4,500 Index Index (4.015%) (35,673)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 20 Year
BMA Swap BMA Swap
4/7/24 4,500 Index Index (4.159%) (81,105)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
6/17/16 3,000 Index Index (4.09%) (123,328)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/9/14 9,000 Index Index (3.73%) (82,693)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
10/27/14 9,000 Index Index (3.444%) 123,922
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
10/27/34 4,500 Index (4.132%) Index (113,824)
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/10/34 4,500 Index (4.200%) Index (78,579)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/10/14 8,550 Index Index (3.576%) 29,379
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/9/34 4,500 Index (4.322%) Index 5,504
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/28/19 4,400 Index Index (4.00%) (54,738)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/21/19 4,400 Index Index (4.0495%) (66,301)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/14/19 1,000 Index Index (4.137%) (25,326)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
9/22/14 3,000 Index Index (3.443%) 31,861
- ---------------------------------------------------------------------------------------------------------------------------------
Total California Fund $(609,316)
- ---------------------------------------------------------------------------------------------------------------------------------
Florida Fund Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
10/31/12 1,000 X 78.875% Index $(4,979)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 2 Year
BMA Swap BMA Swap
11/15/04 1,500 Index Index (1.945%) (9,347)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
12/18/12 2,000 X 78.75% Index (10,771)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/25/19 1,000 Index Index (4.015%) (7,927)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 20 Year
BMA Swap BMA Swap
4/7/24 1,000 Index Index (4.159%) (18,023)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
6/17/16 2,000 Index Index (4.09%) (82,218)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/9/14 1,900 Index Index (3.73%) (17,457)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
10/27/14 1,900 Index Index (3.444%) 26,161
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
10/27/34 1,000 Index (4.132%) Index (25,294)
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/10/34 1,000 Index (4.200%) Index (17,462)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/10/14 1,900 Index Index (3.576%) 6,529
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/9/34 1,000 Index (4.322%) Index 1,223
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/11/19 500 Index Index (4.069%) (9,315)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
6/23/19 1,000 Index Index (4.23%) (41,064)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/21/19 1,250 Index Index (4.0495%) (18,836)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/4/19 1,000 Index Index (4.039%) (12,562)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/14/19 1,000 Index Index (4.137%) (25,327)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
5/26/19 3,000 Index Index (4.152%) (95,535)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
9/22/14 2,500 Index Index (3.443%) 26,551
- ---------------------------------------------------------------------------------------------------------------------------------
Total Florida Fund $(335,653)
- ---------------------------------------------------------------------------------------------------------------------------------
Georgia Fund Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
10/31/12 750 X 78.875% Index $(3,735)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 2 Year
BMA Swap BMA Swap
11/15/04 1,750 Index Index (1.945%) (10,903)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
12/18/12 1,500 X 78.75% Index (8,078)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/25/19 700 Index Index (4.015%) (5,549)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 20 Year
BMA Swap BMA Swap
4/7/24 700 Index Index (4.159%) (12,616)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
6/17/16 750 Index Index (4.09%) (30,832)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/9/14 1,425 Index Index (3.73%) (13,093)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
10/27/14 1,425 Index Index (3.444%) 19,621
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
10/27/34 750 Index (4.132%) Index (18,971)
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/10/34 800 Index (4.200%) Index (13,970)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
11/10/14 1,520 Index Index (3.576%) 5,223
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/9/34 750 Index (4.322%) Index 917
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/11/19 500 Index Index (4.069%) (9,315)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
6/23/19 750 Index Index (4.23%) (30,798)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
5/18/19 2,000 Index Index (4.184%) (79,192)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/14/19 600 Index Index (4.137%) (15,196)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
6/9/19 1,000 Index Index (4.278%) (47,772)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
9/22/14 500 Index Index (3.443%) 5,310
- ---------------------------------------------------------------------------------------------------------------------------------
Total Georgia Fund $(268,949)
- ---------------------------------------------------------------------------------------------------------------------------------
Maryland Fund Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
10/31/12 1,650 X 78.875% Index $(8,216)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 2 Year
BMA Swap BMA Swap
11/15/04 2,400 Index Index (1.945%) (14,954)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
12/18/12 3,400 X 78.75% Index (18,311)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/25/19 1,300 Index Index (4.015%) (10,305)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 20 Year
BMA Swap BMA Swap
4/7/24 1,700 Index Index (4.159%) (30,640)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
6/17/16 1,500 Index Index (4.09%) (61,664)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/9/14 3,325 Index Index (3.73%) (30,550)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
10/27/14 3,325 Index Index (3.444%) 45,783
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
10/27/34 1,750 Index (4.132%) Index (44,265)
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/10/34 1,800 Index (4.200%) Index (31,432)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/10/14 3,420 Index Index (3.576%) 11,752
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/9/34 1,750 Index (4.322%) Index 2,140
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/11/19 2,000 Index Index (4.069%) (37,259)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/28/19 1,400 Index Index (4.00%) (17,417)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/21/19 1,400 Index Index (4.0495%) (21,096)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/14/19 500 Index Index (4.137%) (12,663)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
9/22/14 1,300 Index Index (3.443%) 13,806
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
6/9/19 2,000 Index Index (4.278%) (95,545)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Maryland Fund $(360,836)
- ---------------------------------------------------------------------------------------------------------------------------------
Massachusetts Fund Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
10/31/12 2,700 X 78.875% Index $(13,445)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 2 Year
BMA Swap BMA Swap
11/15/04 6,000 Index Index (1.945%) (37,384)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 3M Floating -- 7 Day
LIBOR BMA Swap
12/18/12 5,500 X 78.75% Index (29,620)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/25/19 2,300 Index Index (4.015%) (18,232)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 20 Year
BMA Swap BMA Swap
4/7/24 2,700 Index Index (4.159%) (48,663)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
6/17/16 1,500 Index Index (4.09%) (61,664)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/9/14 5,225 Index Index (3.73%) (48,008)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
10/27/14 5,225 Index Index (3.444%) 71,944
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
10/27/34 2,750 Index (4.132%) Index (69,559)
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/10/34 2,750 Index (4.200%) Index (48,021)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
11/10/14 5,225 Index Index (3.576%) 17,954
- ---------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
11/09/34 2,750 Index (4.322%) Index 3,363
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/11/19 2,000 Index Index (4.069%) (37,259)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/28/19 2,700 Index Index (4.00%) (33,589)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
6/23/19 2,000 Index Index (4.23%) (82,127)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/21/19 2,700 Index Index (4.0495%) (40,685)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
8/4/19 2,000 Index Index (4.039%) (25,124)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 15 Year
BMA Swap BMA Swap
7/14/19 500 Index Index (4.137%) (12,663)
- ---------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
9/22/14 1,000 Index Index (3.443%) 10,620
- ---------------------------------------------------------------------------------------------------------------------------------
Total Massachusetts Fund $(502,162)
- ---------------------------------------------------------------------------------------------------------------------------------
Rate Lock Swap Agreements
Description - Agreement with Goldman Sachs terminating April 14, 2004 to pay the
difference between the notional value and the market value of a bond with a
5.10% coupon maturing on 4/14/25 priced at a yield to maturity equal to the
Municipal Market Data (MMD) general obligation yield curve rate for the
designated maturity year as of the close of business on the termination date, if
negative (received if positive):
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CONTRACT DEPRECIATION
FUND (000 OMITTED) ($)
- -------------------------------------------------------------------------
Alabama Fund 500 (44,240)
- -------------------------------------------------------------------------
California Fund 1,500 (132,720)
- -------------------------------------------------------------------------
Florida Fund 750 (66,360)
- -------------------------------------------------------------------------
Georgia Fund 500 (44,240)
- -------------------------------------------------------------------------
Maryland Fund 500 (44,240)
- -------------------------------------------------------------------------
Massachusetts Fund 1,500 (132,720)
- -------------------------------------------------------------------------
Description - Agreement with Merrill Lynch terminating April 13, 2004 to pay the
difference between the notional value and the market value of a bond with a
5.106% coupon maturing on 4/13/25 priced at a yield to maturity equal to the MMD
general obligation curve rate for the designed maturity year as of the close of
business on the termination date, if negative (received if positive):
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CONTRACT DEPRECIATION
FUND (000 OMITTED) ($)
- -------------------------------------------------------------------------
Alabama Fund 500 (45,879)
- -------------------------------------------------------------------------
Arkansas Fund 2,000 (183,514)
- -------------------------------------------------------------------------
California Fund 1,500 (137,635)
- -------------------------------------------------------------------------
Florida Fund 1,000 (91,758)
- -------------------------------------------------------------------------
Georgia Fund 500 (45,878)
- -------------------------------------------------------------------------
Massachusetts Fund 1,500 (137,635)
- -------------------------------------------------------------------------
TOTAL UNREALIZED DEPRECIATION ON RATE LOCK SWAP AGREEMENTS
UNREALIZED
DEPRECIATION
FUND ($)
- -------------------------------------------------------------------------
Alabama Fund (90,119)
- -------------------------------------------------------------------------
Arkansas Fund (183,514)
- -------------------------------------------------------------------------
California Fund (270,355)
- -------------------------------------------------------------------------
Florida Fund (158,118)
- -------------------------------------------------------------------------
Georgia Fund (90,118)
- -------------------------------------------------------------------------
Maryland Fund (44,240)
- -------------------------------------------------------------------------
Massachusetts Fund (270,355)
- -------------------------------------------------------------------------
At March 31, 2004, the funds had sufficient cash and/or securities to cover any
commitments under these contracts.
(8) RESTRICTED SECURITIES
Each fund may invest not more than 15% of its total assets in securities, which
are subject to legal or contractual restrictions on resale. At March 31, 2004,
the funds owned the following restricted securities, excluding securities issued
under Rule 144A, which may not be publicly sold without registration under the
Securities Act of 1933. Each fund does not have the right to demand that such
securities be registered. The value of these securities is determined by
valuations furnished by dealers or by an independent pricing service, or if not
available, at fair value under the direction of the Trustees.
DATE OF SHARE/PAR
FUND DESCRIPTION ACQUISITION AMOUNT COST VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Alabama Fund Guam Power Authority Rev., RITES, AMBAC, 9.0426%, 2013 5/20/99 500,000 $536,360 $619,790
Guam Power Authority Rev., RITES, AMBAC, 8.5426%, 2018 5/20/99 4,500,000 4,376,790 5,051,070
Puerto Rico Municipal Finance Agency, RITES, FSA, 9.6169%,
2017 1/6/00 500,000 469,080 636,780
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2013 3/31/99 500,000 509,110 660,660
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041, 2016 9/30/99 500,000 569,030 660,420
- ------------------------------------------------------------------------------------------------------------------------------------
$7,628,720
- ------------------------------------------------------------------------------------------------------------------------------------
Arkansas Fund Commonwealth of Puerto Rico, RITES, MBIA, 10.0771%, 2020 3/30/00 3,000,000 $3,067,320 $3,991,500
Commonwealth of Puerto Rico, Infrastructure, RITES, 9.5771%,
2019 10/5/00 1,250,000 1,282,225 1,575,025
Puerto Rico Municipal Finance Agency, RITES, FSA, 9.6169%,
2017 1/6/00 735,000 689,548 936,067
Puerto Rico Municipal Finance Agency, RITES, FSA, 9.6169%,
2018 1/6/00 3,250,000 3,006,835 4,132,180
- ------------------------------------------------------------------------------------------------------------------------------------
$10,634,772
- ------------------------------------------------------------------------------------------------------------------------------------
California Fund Los Angeles, CA, RITES, 9.0197%, 2014 7/20/99 5,405,000 $5,672,548 $7,029,094
Los Angeles, CA, Union School District, RITES, FSA, 9.0197,
2020 3/04/03 5,000,000 5,808,100 5,904,100
Commonwealth of Puerto Rico, ROLS, Series II R 124B, XLCA,
9.8060%, 2017 10/22/01 1,500,000 1,816,140 1,998,930
Commonwealth of Puerto Rico, ROLS, Series II R 184C, FGIC,
8.4853%, 2020 8/05/02 3,300,000 4,269,738 4,445,034
Southern California Metropolitan Water District Rev., RITES,
10.0197%, 2018 5/07/01 5,000,000 5,819,300 6,919,000
State of California, RITES, "B", 9.9967%, 2017 1/3/00 1,250,000 1,273,450 1,624,475
University of California Rev., RITES, MBIA, 8.7697%, 2016 5/21/99 5,705,000 5,873,273 6,743,709
- ------------------------------------------------------------------------------------------------------------------------------------
$34,664,342
- ------------------------------------------------------------------------------------------------------------------------------------
Florida Fund Commonwealth of Puerto Rico, RITES, 10.0771%, 2019 3/30/00 1,000,000 $1,030,240 $1,330,500
Commonwealth of Puerto Rico, Highway & Transportation, ROLS,
Railroad II R 227 1, MBIA, 9.896%, 2020 4/25/03 2,500,000 3,282,600 3,363,150
State of Florida, RITES, MBIA, 8.4853%, 2017 4/9/99 3,000,000 3,042,840 3,404,160
- ------------------------------------------------------------------------------------------------------------------------------------
$8,097,810
- ------------------------------------------------------------------------------------------------------------------------------------
Georgia Fund Atlanta, GA, Water & Wastewater Rev., RITES, FGIC, 9.4853%,
2016 4/20/99 4,000,000 $4,668,400 $5,365,360
Puerto Rico, Municipal Finance Agency, RITES, FSA, 10.6246,
2016 1/06/00 500,000 519,760 679,780
- ------------------------------------------------------------------------------------------------------------------------------------
$6,045,140
- ------------------------------------------------------------------------------------------------------------------------------------
Maryland Fund Guam Power Authority Rev., RITES, AMBAC, 9.0426%, 2015 5/20/99 1,680,000 $1,760,908 $2,050,037
Puerto Rico Electric Power Authority, Power Rev., RITES, FSA,
9.0063%, 2015 9/16/99 1,400,000 1,367,100 1,706,796
Puerto Rico Municipal Finance Agency, RITES, FSA, 9.6169%,
2019 1/6/00 1,000,000 905,080 1,260,860
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2013 9/30/99 500,000 509,110 660,660
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2016 3/31/99 1,520,000 1,729,851 2,007,677
- ------------------------------------------------------------------------------------------------------------------------------------
$7,686,030
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts Fund Dudley-Charlton, MA, Regional School District, RITES, FGIC,
9.0312%, 2015 5/5/99 1,365,000 $1,501,582 $1,768,030
Dudley-Charlton, MA, Regional School District, RITES, FGIC,
9.0312%, 2016 5/5/99 1,430,000 1,558,414 1,846,073
Dudley-Charlton, MA, Regional School District, RITES, FGIC,
9.0312%, 2018 10/26/84 1,565,000 1,687,884 1,999,788
Massachusetts Bay Transportation Authority, RITES, 10.7967%,
2016 4/19/00 4,835,000 5,484,534 6,863,959
Massachusetts Water Resources Authority, RITES, FGIC,
11.3149%, 2019 3/16/00 4,010,000 4,742,707 5,935,281
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041, 2016 3/31/99 2,500,000 2,845,150 3,302,100
- ------------------------------------------------------------------------------------------------------------------------------------
$21,715,231
- ------------------------------------------------------------------------------------------------------------------------------------
At March 31, 2004, restricted securities constituted the following percentages of each fund's net assets:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------
7.78% 7.00% 7.96% 7.98% 8.35% 4.52% 8.01%
(9) CONCENTRATION OF CREDIT RISK
Since each fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to
factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. The
risk associated with such factors is mitigated by the fact that a percentage of securities in a portfolio of investments being
backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. At
year end March 31, 2004, the percentage of holdings that carried such enhancements were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------------
70.91% 77.93% 57.33% 72.86% 47.73% 40.69% 45.82%
- --------------------------------------------------------------------------------------------------------------------------------
For each fund, the greatest exposure to any one institution or agency did not exceed total investments as of year end March 31,
2004, were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------------
38.46% 19.77% 20.00% 17.52% 17.29% 14.97% 14.08%
- --------------------------------------------------------------------------------------------------------------------------------
(10) LEGAL PROCEEDINGS
On March 31, 2004, MFS settled an administrative proceeding regarding disclosure
of brokerage allocation practices in connection with fund sales. Under the terms
of the settlement, in which MFS neither admitted nor denied any wrongdoing, MFS
agreed to pay (one dollar) $1.00 in disgorgement and $50 million in penalty to
certain MFS funds, pursuant to a plan to be approved by an independent
distribution consultant. The agreement with the SEC is reflected in an order of
the SEC. The settlement order states that MFS failed to adequately disclose to
the Boards of Trustees and to shareholders of the MFS funds the specifics of its
preferred arrangements with certain brokerage firms selling MFS fund shares. The
settlement order states that MFS had in place policies designed to obtain best
execution of all fund trades. As part of the settlement, MFS has retained an
independent compliance consultant to review the completeness of its disclosure
to fund trustees and to fund shareholders of strategic alliances between MFS or
its affiliates and broker- dealers and other financial advisers who support the
sale of fund shares. The brokerage allocation practices which were the subject
of this proceeding were discontinued by MFS in November 2003.
In addition, in February, 2004, MFS reached agreement with the Securities and
Exchange Commission ("SEC"), the New York Attorney General ("NYAG") and the
Bureau of Securities Regulation of the State of New Hampshire ("NH") to settle
administrative proceedings alleging false and misleading information in certain
MFS fund prospectuses regarding market timing and related matters (the "February
Settlements"). These regulators alleged that prospectus language for certain MFS
funds was false and misleading because, although the prospectuses for those
funds in the regulators' view indicated that the funds prohibited market timing,
MFS did not limit trading activity in 11 domestic large cap stock, high grade
bond and money market funds. MFS' former Chief Executive Officer, John W.
Ballen, and former President, Kevin R. Parke, also reached agreement with the
SEC in which they agreed to, among other terms, monetary fines and temporary
suspensions from association with any investment adviser or registered
investment company. Messrs. Ballen and Parke have resigned their positions with,
and will not be returning to, MFS and the MFS funds. Under the terms of the
February Settlements, MFS and the executives neither admit nor deny wrongdoing.
Under the terms of the February Settlements, a $225 million pool has been
established for distribution to shareholders in certain of the MFS funds offered
to retail investors ("Retail Funds"), which has been funded by MFS and of which
$50 million is characterized as a penalty. This pool will be distributed in
accordance with a methodology developed by an independent distribution
consultant in consultation with MFS and the Boards of Trustees of the Retail
Funds, and acceptable to the SEC. MFS has further agreed with the NYAG to reduce
its management fees in the aggregate amount of approximately $25 million
annually over the next five years, and not to increase certain management fees
during this period. MFS has also paid an administrative fine to NH in the amount
of $1 million, which will be used for investor education purposes (NH will
retain $250,000 and $750,000 will be contributed to the North American
Securities Administrators Association's Investor Protection Trust). In addition,
under the terms of the February Settlements, MFS is in the process of adopting
certain governance changes and reviewing its policies and procedures.
Since December 2003, MFS, Sun Life Financial Inc., various MFS funds, the
Trustees of these MFS funds, and certain officers of MFS have been named as
defendants in multiple lawsuits filed in federal and state courts. The lawsuits
variously have been commenced as class actions or individual actions on behalf
of investors who purchased, held or redeemed shares of the funds during
specified periods, as class actions on behalf of participants in certain
retirement plan accounts, or as derivative actions on behalf of the MFS funds.
The lawsuits generally allege that some or all of the defendants (i) permitted
or acquiesced in market timing and/or late trading in some of the MFS funds,
inadequately disclosed MFS' internal policies concerning market timing and such
matters, and received excessive compensation as fiduciaries to the MFS funds, or
(ii) permitted or acquiesced in the improper use of fund assets by MFS to
support the distribution of fund shares and inadequately disclosed MFS' use of
fund assets in this manner. The actions assert that some or all of the
defendants violated the federal securities laws, including the Securities Act of
1933 and the Securities Exchange Act of 1934, the Investment Company Act of 1940
and the Investment Advisers Act of 1940, the Employee Retirement Income Security
Act of 1974, as well as fiduciary duties and other violations of common law. The
lawsuits seek unspecified compensatory damages. Insofar as any of the actions is
appropriately brought derivatively on behalf of any of the MFS funds, any
recovery will inure to the benefit of the funds. The defendants are reviewing
the allegations of the multiple complaints and will respond appropriately.
Additional lawsuits based on similar allegations may be filed in the future.
Any potential resolution of these matters may include, but not be limited to,
judgments or settlements for damages against MFS, the MFS funds, or any other
named defendant. As noted above, as part of the regulatory settlements, MFS has
established a restitution pool in the amount of $225 million to compensate
certain shareholders of the Retail Funds for damages that they allegedly
sustained as a result of market timing or late trading in certain of the funds,
and will pay $50 million to compensate certain MFS funds based upon the amount
of brokerage commissions allocated in recognition of fund sales. It is not clear
whether these amounts will be sufficient to compensate shareholders for all of
the damage they allegedly sustained, whether certain shareholders or putative
class members may have additional claims to compensation, or whether the damages
that may be awarded in any of the actions will exceed these amounts. In the
event the MFS funds incur any losses, costs or expenses in connection with such
lawsuits, the Boards of Trustees of the affected funds may pursue claims on
behalf of such funds against any party that may have liability to the funds in
respect thereof.
Review of these matters by the independent Trustees of the MFS funds and their
counsel is continuing. There can be no assurance that these regulatory actions
and lawsuits, or the adverse publicity associated with these developments, will
not result in increased fund redemptions, reduced sales of fund shares, or other
adverse consequences to the funds.
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Trustees of MFS Municipal Series Trust and Shareholders of the Portfolios
of MFS Municipal Series Trust:
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of MFS Alabama Municipal Bond Fund, MFS Arkansas
Municipal Bond Fund, MFS California Municipal Bond Fund, MFS Florida Municipal
Bond Fund, MFS Georgia Municipal Bond Fund, MFS Maryland Municipal Bond Fund,
and MFS Massachusetts Municipal Bond Fund (portfolios of MFS Municipal Series
Trust) as of March 31, 2004, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of the years in
the two-year period then ended, and the financial highlights for each of the
years in the five-year period then ended. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
the securities owned at March 31, 2004 by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of each of the
aforementioned portfolios of MFS Municipal Series Trust as of March 31, 2004,
the results of their operations, the changes in their net assets, and their
financial highlights for the respective stated periods in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 14, 2004
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TRUSTEES AND OFFICERS -- IDENTIFICATION AND BACKGROUND
- ----------------------------------------------------------------------------------------------------------------------------
The Trustees and officers of the Trust are listed below, together with their principal occupations during the past five
years. (Their titles may have varied during that period.) The business address of each Trustee and officer is 500 Boylston
Street, Boston, Massachusetts 02116.
PRINCIPAL OCCUPATIONS & OTHER
POSITION(s) HELD TRUSTEE/OFFICER DIRECTORSHIPS(2) DURING
NAME, DATE OF BIRTH WITH FUND SINCE(1) THE PAST FIVE YEARS
- ------------------- ---------------- --------------- -----------------------------
INTERESTED TRUSTEES
John W. Ballen(3) Trustee and President August 2001 until Massachusetts Financial Services Company,
(born 09/12/59) February 2004 Chief Executive Officer and Director (until
February 2004)
Robert J. Manning(3) Trustee and President February 2004 Massachusetts Financial Services Company,
Chief Executive Officer, President, Chief
(born 10/20/63) Investment Officer and Director
Kevin R. Parke(3) Trustee January 2002 until Massachusetts Financial Services Company,
(born 12/14/59) February 2004 President, Chief Investment Officer and
Director (until February 2004)
Robert C. Pozen(3) Trustee February 2004 Massachusetts Financial Services Company,
(born 08/08/46) Chairman (since February 2004); Harvard Law
School (education), John Olin Visiting
Professor (since July 2002); Secretary of
Economic Affairs, The Commonwealth of
Massachusetts (January 2002 to December
2002); Fidelity Investments, Vice Chairman
(June 2000 to December 2001); Fidelity
Management & Research Company (investment
adviser), President (March 1997 to July
2001); The Bank of New York (financial
services), Director; Bell Canada Enterprises
(telecommunications), Director; Telesat
(satellite communications), Director
Jeffrey L. Shames(3) Trustee October 1993 until Massachusetts Financial Services Company,
(born 06/02/55) February 2004 Chairman (until February 2004)
INDEPENDENT TRUSTEES
J. Atwood Ives Chairman February 1992 Private investor; KeySpan Corporation (energy
(born 05/01/36) related services), Director; Eastern
Enterprises (diversified services company),
Chairman, Trustee and Chief Executive Officer
(until November 2000)
Lawrence H. Cohn, M.D. Trustee August 1993 Brigham and Women's Hospital, Chief of
(born 03/11/37) Cardiac Surgery; Harvard Medical School,
Professor of Surgery
David H. Gunning Trustee January 2004 Cleveland-Cliffs, Inc. (mining products and
(born 05/30/42) service provider), Vice Chairman/ Director
(since April 2001); Encinitos Ventures
(private investment company), Principal (1997
to April 2001); Lincoln Electric Holdings,
Inc. (welding equipment manufacturer),
Director; Southwest Gas Corporation (natural
gas distribution company), Director
William R. Gutow Trustee December 1993 Private investor and real estate consultant;
(born 09/27/41) Capitol Entertainment Management Company
(video franchise), Vice Chairman
Amy B. Lane Trustee January 2004 Retired; Merrill Lynch & Co., Inc., Managing
(born 02/08/53) Director, Investment Banking Group (1997 to
February 2001); Borders Group, Inc. (book and
music retailer), Director; Federal Realty
Investment Trust (real estate investment
trust), Trustee
Lawrence T. Perera Trustee July 1981 Hemenway & Barnes (attorneys), Partner
(born 06/23/35)
William J. Poorvu Trustee August 1982 Private investor; Harvard University Graduate
(born 04/10/35) School of Business Administration, Class of
1961 Adjunct Professor in Entrepreneurship
Emeritus; CBL & Associates Properties, Inc.
(real estate investment trust), Director
J. Dale Sherratt Trustee August 1993 Insight Resources, Inc. (acquisition planning
(born 09/23/38) specialists), President; Wellfleet
Investments (investor in health care
companies), Managing General Partner (since
1993); Cambridge Nutraceuticals (professional
nutritional products), Chief Executive
Officer (until May 2001)
Elaine R. Smith Trustee February 1992 Independent health care industry consultant
(born 04/25/46)
Ward Smith Trustee October 1992 Private investor
(born 09/13/30)
OFFICERS
Robert J. Manning(3) President and Trustee February 2004 Massachusetts Financial Services Company,
(born 10/20/63) Chief Executive Officer, President, Chief
Investment Officer and Director.
John W. Ballen(3) President and Trustee August 2001 until Massachusetts Financial Services Company,
(born 09/12/59) February 2004 Chief Executive Officer and Director (until
February 2004)
James R. Bordewick, Jr.(3) Assistant Secretary September 1990 Massachusetts Financial Services Company,
and Assistant Clerk Senior Vice President and Associate General
(born 03/06/59) Counsel
Stephen E. Cavan(3) Secretary and Clerk December 1989 until Massachusetts Financial Services Company,
(born 11/06/53) March 2004 Senior Vice President, General Counsel and
Secretary (until March 2004)
Stephanie A. DeSisto(3) Assistant Treasurer May 2003 Massachusetts Financial Services Company,
(born 10/01/53) Vice President (since April 2003); Brown
Brothers Harriman & Co., Senior Vice
President (November 2002 to April 2003); ING
Groep N.V./Aeltus Investment Management,
Senior Vice President (prior to November
2002)
Robert R. Flaherty(3) Assistant Treasurer August 2000 Massachusetts Financial Services Company,
(born 09/18/63) Vice President (since August 2000); UAM Fund
Services, Senior Vice President (prior to
August 2000)
Richard M. Hisey(3) Treasurer August 2002 Massachusetts Financial Services Company,
(born 08/29/58) Senior Vice President (since July 2002); The
Bank of New York, Senior Vice President
(September 2000 to July 2002); Lexington
Global Asset Managers, Inc., Executive Vice
President and Chief Financial Officer (prior
to September 2000); Lexington Funds, Chief
Financial Officer (prior to September 2000)
Ellen Moynihan(3) Assistant Treasurer April 1997 Massachusetts Financial Services Company,
(born 11/13/57) Vice President
James O. Yost(3) Assistant Treasurer September 1990 Massachusetts Financial Services Company,
(born 06/12/60) Senior Vice President
- ------------------
(1) Date first appointed to serve as Trustee/Officer of an MFS fund. Each Trustee has served continuously since appointment
unless indicated otherwise.
(2) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., "public
companies").
(3) "Interested person" of MFS within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act) which
is the principal federal law governing investment companies like the series/the fund. The address of MFS is 500 Boylston
Street, Boston, Massachusetts 02116.
The Trust does not hold annual shareholder meetings for the purpose of electing Trustees, and Trustees are not elected for
fixed terms. The Trust will hold a shareholders' meeting in 2005 and at least once every five years thereafter to elect
Trustees. Each Trustee and officer holds office until his or her successor is chosen and qualified or until his or her
earlier death, resignation, retirement or removal.
Each of the Trust's Trustees and officers holds comparable positions with certain other funds of which MFS or a subsidiary
is the investment adviser or distributor, and, in the case of the officers, with certain affiliates of MFS. Each Trustee
serves as a board member of 109 funds within the MFS Family of Funds.
The Statement of Additional Information contains further information about the Trustees and is available without charge upon
request by calling 1-800-225-2606.
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INVESTMENT ADVISER CUSTODIAN
Massachusetts Financial Services Company State Street Bank and Trust Company
500 Boylston Street, Boston, MA 02116-3741 225 Franklin Street, Boston, MA 02110
DISTRIBUTOR AUDITORS
MFS Fund Distributors, Inc. Deloitte & Touche LLP
500 Boylston Street, Boston, MA 02116-3741 200 Berkeley Street, Boston, MA 02116
PORTFOLIO MANAGERS
Michael L. Dawson
Geoffrey L. Schechter
- -------------------------------------------------------------------------------
MONEY MANAGEMENT FOR ALL TYPES OF INVESTORS
- -------------------------------------------------------------------------------
YOUR GOALS ARE IMPORTANT
MFS offers a complete range of investments and investment services to address
specific financial needs over time. When your investing goals change, you can
easily stay with MFS for the products you need, when you need them. Whether
you're investing for college or retirement expenses or for tax management or
estate planning, MFS will be there.
Ask your investment professional how MFS can help you move toward the goals
you've set.
MFS FAMILY OF FUNDS(R)
More than 50 portfolios offer domestic and international equity and
fixed-income investment across the full risk spectrum
VARIABLE ANNUITIES
A selection of annuity products with advantages for
building and preserving wealth
MFS 401(k) AND IRA SUITES
Retirement plans for businesses and individuals
MFS COLLEGE SAVINGS PLANS
Investment products to help meet education expenses
MFS PRIVATE PORTFOLIO SERVICES
Investment advisory services that provide custom products
for high-net-worth individuals
A prospectus for any MFS product can be obtained from your investment
professional. You should read the prospectus carefully before investing as it
contains complete information on the fund's investment objective(s), the risks
associated with an investment in the fund, and the fees, charges, and expenses
involved. These elements, as well as other information contained in the
prospectus, should be considered carefully before investing.
Variable annuities are offered through MFS/Sun Life Financial Distributors, Inc.
- -------------------------------------------------------------------------------
FEDERAL TAX INFORMATION (Unaudited)
- -------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
In January 2005, shareholders will be mailed a Tax Form Summary or Form 1099-
DIV, if applicable, reporting the federal tax status of all distributions paid
during the calendar year 2003.
For federal income tax purposes, approximately 99% of the total dividends paid
by each fund from net investment income during the year ended March 31, 2004 is
designated as an exempt-interest dividend.
The fund has the option to use equalization, which is a tax basis dividends paid
deduction from earnings and profits distributed to shareholders upon redemption
of shares.
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CONTACT INFORMATION
- -------------------------------------------------------------------------------
INVESTOR INFORMATION
For information on MFS mutual funds, call your investment professional or, for
an information kit, call toll free: 1-800-225-2606 any business day from
8 a.m. to 8 p.m. Eastern time.
A general description of the Fund's proxy voting policies and procedures is
available without charge, upon request, by calling 202-547-7071, extension 201,
by visiting www.jmr-financial.com/MFS or by visiting the SEC's website at
http://www.sec. gov.
INVESTOR SERVICE
Write to us at: MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
Type of Information Phone number Hours, Eastern Time
- --------------------------------------------------------------------------------
General information 1-800-225-2606 8 a.m. to 8 p.m., any
business day
- --------------------------------------------------------------------------------
Speech- or hearing-impaired 1-800-637-6576 9 a.m. to 5 p.m., any
business day
- --------------------------------------------------------------------------------
Shares prices, account 1-800-MFS-TALK
balances exchanges (1-800-637-8255) 24 hours a day, 365 days a
or stock and bond outlooks touch-tone required year
- --------------------------------------------------------------------------------
WORLD WIDE WEB
Go to MFS.COM for a clear view of market events, investor education, account
access, and product and performance insights.
Go paperless with EDELIVERY: Join your fellow shareholders who are already
taking advantage of this great new benefit from MFS. With eDelivery, we send you
prospectuses, reports, and proxies electronically. You get timely information
without mailbox clutter (and help your fund save printing and postage costs).
SIGN-UP instructions: If your account is registered with us, go to mfs.com, log
in to your account via MFS Access, and select the eDelivery sign up options.
If you own your MFS fund shares through a financial institution or through a
retirement plan, MFS Talk, MFS Access, and eDelivery may not be available to
you.
[logo] M F S(R)
INVESTMENT MANAGEMENT
500 Boylston Street
Boston, MA 02116-3741
(C) 2004 MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.
500 Boylston Street, Boston, MA 02116
MST-A-ANN-5/04 45M
MFS(R) Mutual Funds
ANNUAL REPORT 3/31/04
MFS(R) MUNICIPAL SERIES TRUST
For the States of: Mississippi,
New York, North Carolina,
Pennsylvania, South Carolina,
Tennessee, Virginia, and West Virginia
A path for pursuing opportunity
[graphic omitted]
[logo] M F S(R)
INVESTMENT MANAGEMENT
- -------------------------------------------------------------------------------
MFS(R) PRIVACY POLICY: A COMMITMENT TO YOU
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Privacy is a concern for every investor today. At MFS Investment Management(R)
and the MFS funds, we take this concern very seriously. We want you to
understand our policies about every MFS investment product and service that we
offer and how we protect the nonpublic personal information of investors who
have a direct relationship with us and our wholly owned subsidiaries.
Throughout our business relationship, you provide us with personal information;
we maintain information and records about you, your investments, and the
services you use. Examples of the nonpublic personal information we maintain
include
o data from investment applications and other forms
o share balances and transactional history with us, our affiliates, or others
o facts from a consumer reporting agency
We do not disclose any nonpublic personal information about our customers or
former customers to anyone except as permitted by law. We may share information
with companies or financial institutions that perform marketing services on our
behalf or to other financial institutions with which we have joint marketing
arrangements.
Access to your nonpublic personal information is limited to appropriate
personnel who provide products, services, or information to you. We maintain
physical, electronic, and procedural safeguards that comply with applicable
federal regulations.
If you have any questions about MFS' privacy policy, please call 1-800-225-2606
any business day between 8 a.m. and 8 p.m. Eastern time.
Note: If you own MFS products or receive MFS services in the name of a third
party such as a bank or broker-dealer, their privacy policy may apply to you
instead of ours.
- -------------------------------------------------------------------------------
MFS(R) MUNICIPAL SERIES TRUST
The investment objective of each fund is to seek current income exempt from
federal income taxes and personal income tax, if any, of the state to which its
name refers.
TABLE OF CONTENTS
MFS PRIVACY POLICY
- ---------------------------------------------------
LETTER FROM THE CEO 1
- ---------------------------------------------------
MFS ORIGINAL RESEARCH(R) 3
- ---------------------------------------------------
MANAGEMENT REVIEW 4
- ---------------------------------------------------
PERFORMANCE SUMMARY 7
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS 16
- ---------------------------------------------------
FINANCIAL STATEMENTS 54
- ---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 83
- ---------------------------------------------------
INDEPENDENT AUDITORS' REPORT 103
- ---------------------------------------------------
TRUSTEES AND OFFICERS 104
- ---------------------------------------------------
MONEY MANAGEMENT FOR ALL TYPES OF INVESTORS 106
- ---------------------------------------------------
FEDERAL TAX INFORMATION 107
- ---------------------------------------------------
CONTACT INFORMATION 108
- ---------------------------------------------------
ASSET ALLOCATION 109
- -------------------------------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
LETTER FROM THE CEO
- -------------------------------------------------------------------------------
Dear Shareholders,
[Photo of Robert J. Manning]
Dear Shareholders,
Our firm was built on the strength of MFS Original Research(R), our in-depth
analysis of every security we consider for our portfolios. We've been honing
this process since 1932, when we created one of the mutual fund industry's
first research departments. And we continue to fine-tune this process so that
we can provide strong and consistent long-term investment performance to help
you achieve your financial goals.
While we have achieved strong investment performance in many of our portfolios,
our goal is to achieve the same strong results across all asset classes. To
ensure that our portfolio teams are doing the best possible job for our firm's
clients and shareholders, I am focusing the vast majority of my time on the
three key elements that I believe truly differentiate MFS from its competitors:
people, process, and culture.
PEOPLE
Our people have always been our most valuable resource. Our philosophy is to
deliver consistent, repeatable investment results by hiring the most talented
investors in our industry. We recruit from the nation's top business schools
and hire experienced analysts, both domestically and around the globe.
Our analysts are the engine that powers our entire investment team because
their recommendations have a direct impact on the investment performance of our
portfolios. To demonstrate our ongoing commitment in this area, we increased
the number of equity analysts at MFS from less than 40 at the end of 2000 to
over 50 in April 2004. During that same period, we doubled the average
investment experience of our new domestic equity analysts, from 2.6 years to
5.3 years, by recruiting more seasoned analysts to the firm. Moreover, our
international network of investment personnel now spans key regions of the
world with offices in London, Mexico City, Singapore, and Tokyo, as well as
Boston.
One of the major advantages that MFS has over many of its competitors is that
the position of research analyst is a long-term career for many members of our
team, not simply a steppingstone toward becoming a portfolio manager. We have
worked to elevate the stature of the analyst position to be on par with that of
a portfolio manager. In fact, an exceptional research analyst has the
opportunity to earn more at MFS than some portfolio managers.
At the same time, we look within the firm to promote talented analysts who
choose a path toward becoming a portfolio manager. We rarely hire portfolio
managers from our competitors because we believe the best investors are those
steeped in the MFS process and culture. In the past few months, we have
identified four senior research analysts who will assume roles on the
management teams of several of our larger portfolios. MFS is fortunate to have
a deep bench of talented investment personnel, and we welcome the opportunity
to put their skills to work for our clients.
PROCESS
MFS was built on the strength of its bottom-up approach to researching
securities. We have enhanced the mentoring process for our research analysts by
calling on several of our most seasoned portfolio managers to supplement the
work of Director of Global Equity Research David A. Antonelli. These portfolio
managers will be taking a special interest in developing the careers of our
research analysts and strengthening our investment process. Kenneth J. Enright
of our value equity group will work with a team of domestic analysts; David E.
Sette-Ducati of our small- and mid-cap equity team will work with analysts
concentrating on small- and mid-cap companies; and Barnaby Wiener of our
international equity team in London heads the European equity research team.
We have combined the bottom-up approach of our research process with a top-down
approach to risk controls on portfolio composition. We have a very strong
quantitative team under the leadership of industry veteran Deborah H. Miller,
who represents the equity management department on the Management Committee of
the firm. Quantitative analysis helps us generate investment ideas and, more
importantly, assess the appropriate level of risk for each portfolio. The risk
assessment is designed to assure that each portfolio operates within its
investment objectives.
Additionally, we have increased the peripheral vision of our investment
personnel across asset classes through the collaboration of our Equity, Fixed
Income, Quantitative Analysis, and Risk Management teams. We recently codified
this key aspect of our culture by forming an Investment Management Committee,
composed of key members of these teams. This Committee will work to ensure that
all teams are sharing information, actively debating investment ideas, and
creating a unified investment team.
CULTURE
Teamwork is at the heart of our ability to deliver consistent and competitive
investment performance over time. At MFS, each member of our team is involved
in our success; we have no superstars. The collaborative nature of our process
works to assure a consistent investment approach across all of our products
and provides a high level of continuity in portfolio management because our
investment performance never depends on the contributions of just a single
individual. Our culture is based on an environment of teamwork that allows our
investment personnel to be successful. In turn, we demand superior investment
results from every member of our team.
We have created a meritocracy at our firm based on investment results. We hold
all of our portfolio managers accountable for the performance of their
portfolios and their contributions to the team. We also track the equity and
fixed-income ratings of our analysts so we can evaluate them based on the
performance of their recommendations. We align bonus compensation to
investment performance by weighting rewards to those who have created the
greatest long-term benefit for our shareholders and who contribute most
successfully to the Original Research(SM) process.
The strength of our culture has resulted in a tremendous amount of stability,
both in terms of people and assets under management. Although we have
dismissed members of our team whose performance did not meet MFS' high
standards, only one member of our investment team has voluntarily left the
firm over the past six months, based on a decision to retire from the
industry. Similarly, our firm's assets under management have remained
remarkably steady. We began the year with $140 billion in assets and ended the
first quarter with $142 billion in assets. We are very proud to have
experienced growth during this period despite the difficult regulatory
environment and the relatively flat performance of the stock market.
In short, we can help you achieve your financial goals by hiring talented
people, following a disciplined process, and maintaining our firm's unique
culture. The recent enhancements described in this letter reflect the
collaborative spirit and the depth of resources in our investment teams.
As always, we appreciate your confidence in MFS and welcome any questions or
comments you may have.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer
MFS Investment Management(R)
April 19, 2004
Note to Shareholders: On February 6, 2004, Jeffrey L. Shames retired as
Chairman of MFS. Robert Pozen was named as non-executive Chairman. Also,
on February 6, 2004, Robert J. Manning was appointed Chief Executive Officer,
President, and Chief Investment Officer.
The opinions expressed in this letter are those of MFS, and no forecasts can
be guaranteed.
- -------------------------------------------------------------------------------
MFS ORIGINAL RESEARCH(R)
- -------------------------------------------------------------------------------
THE MFS(R) DIFFERENCE
For 80 years MFS has been offering investors clear paths to pursuing specific
investment objectives. Today, millions of individuals and thousands of
institutions all over the world look to MFS to manage their assets with
insight and care.
Our success, we believe, has to do with the fact that we see investors as
people with plans, not just dollars to invest.
When you invest with MFS, you
invest with a company dedicated to helping you realize your long-term
financial goals.
INVESTORS CHOOSE MFS FOR OUR
o global asset management expertise across all asset classes
o time-tested money management process for pursuing consistent results
o full spectrum of investment products backed by MFS Original Research(R)
o resources and services that match real-life needs
TURNING INFORMATION INTO OPPORTUNITY
Sound investments begin with sound information. MFS has been doing its own
research and analyzing findings in-house for decades. The process we use to
uncover opportunity is called MFS Original Research(R).
MFS ORIGINAL RESEARCH INVOLVES:
o meeting with the management of 3,000 companies each year to assess their
business plans and the managers' ability to execute those plans
o making onsite visits to more than 2,000 companies annually to gain first-hand
knowledge of their operations and products
o analyzing financial statements and balance sheets
o talking extensively with companies' customers and competitors
o developing our own proprietary estimates of companies' earnings
- -------------------------------------------------------------------------------
MANAGEMENT REVIEW
- -------------------------------------------------------------------------------
MARKET ENVIRONMENT
For the one year period ended March 31, 2004, as a whole, long-term U.S.
Treasury bond yields were virtually unchanged. High-grade municipal bond yields
declined slightly, allowing municipal bonds in general to modestly outperform
Treasuries. Those facts, however, belie the tremendous volatility in the bond
market over the 12 months ended March 31, 2004.
In early 2003 and into the first half of the period, we saw a confluence of
factors that were positive for bond prices. Geopolitical uncertainty, the
hangover from corporate scandals in 2002, and a weak U.S. economy were among
the factors that prompted a "flight to quality" by many investors and pushed
interest rates down to four-decade lows by June of 2003.
In late June, however, the bond market reversed direction as fixed-income
investors became concerned that the economic recovery was accelerating faster
than expected. Although stocks had been rising since late March, the catalyst
for the bond market appeared to be the Federal Reserve Board's decision on June
25 to lower rates by one-quarter percent rather than one-half percent as many
investors had expected. From that date through early September, bond prices
fell as rates rose sharply.
In the second half of the period, however, bond prices revived as several
factors combined to drive rates down again. Economic reports indicated that
inflation was well contained while job growth remained weak. Although most
other measures indicated the U.S. economy was improving, we believe investors
were concerned that consumer spending might falter because laid-off workers
were not finding new jobs. Statistics indicated that a significant portion of
U.S. production capacity remained idle. The Fed appeared to sum up the
situation in its statements that interest rates could remain low for the
foreseeable future. By period-end, interest rates for 10- and 30-year
Treasuries were within just four basis points of where they had started the
period. (A basis point is 0.01% of interest.)
Municipal bonds generally followed the path of Treasury bonds over the period,
but with somewhat smaller swings in yield. However, long-term municipal bonds
ended the period yielding about 20 basis points less than they had at the start
of the period. Long-term municipal bonds in general saw some price appreciation
over the period and outperformed long-term Treasuries. (The principal value and
interest on U.S. Treasury securities, however, are guaranteed by the U.S.
government if held to maturity.)
We believe the outperformance of municipals was caused by two main factors.
First, municipal bonds appreciated from historically low valuations, relative
to Treasuries, to more normal valuations. This was in part the result of a
growing national debt that put downward pressure on long-term Treasury prices.
Second, we believe a decrease in the supply of new municipal issues late in the
period put upward pressure on municipal prices.
As the economy improved over the period, it also appeared to us that investors
became willing to take on more risk, and the municipal bond market rotated to
favor lower-rated, higher-yielding issues. For the period as a whole, lower-
quality municipal bonds generally outperformed higher- rated bonds.
HOW WE MANAGE THE FUNDS
All of the MFS state municipal funds are managed with a common investment
strategy. There are four key elements to our management strategy: duration,
yield curve positioning, credit quality, and sector allocation.
DURATION is a measure of a fund's sensitivity to changes in interest rates. In
most market environments, we strive to be neutral in duration relative to our
Lipper peers, as we believe that trying to predict the direction of interest
rates is a relatively risky investment strategy. However, at times when we
believe that interest rates have become excessively low -- as we felt they did
over the period -- and may be about to reverse direction, we may try to protect
a fund's principal by making the fund modestly short on duration relative to
its Lipper peers. (Shorter duration makes a fund less sensitive to changes in
interest rates.)
A YIELD CURVE for bonds shows the relationship between yield and time to
maturity. In a majority of market environments, longer-maturity bonds offer
higher yields but are more exposed to duration risk -- the risk that a change
in interest rates may adversely affect a bond's price. In managing the funds,
we try to pick what we believe is the optimal spot on the yield curve -- a time
to maturity that optimizes the combination of yield and risk. Our research for
some time has indicated that the 15- to 20-year part of the yield curve is that
optimal spot. For example, in our experience a 20-year bond typically has paid
98% of the yield of a similar 30-year bond but carried only 75%-80% of the
duration risk of that 30-year bond. For that reason, the funds have tended to
be overweighted in bonds with maturities in the 15- to 20-year range.
CREDIT QUALITY refers to the perceived ability of a bond issuer to make
interest payments and repay a bond's principal. Major credit-rating agencies
rate bonds on a scale that usually runs from "AAA" down to "BBB" for
investment-grade bonds, and "BB" and below for lower-quality, noninvestment-
grade or so-called "junk" bonds. In general, lower-rated bonds pay higher rates
of interest to compensate investors for taking on additional risk. The funds
historically have focused on using our bottom-up research to seek out bonds
that offer higher yields than average "AAA"-rated insured bonds, yet also offer
what we believe is reasonable safety of principal and interest payments to
maturity.
SECTOR ALLOCATION refers to a fund's weightings in various types of municipal
bond issues, including bonds from industries such as health care, utilities,
and airlines. Our research analysts constantly seek out sectors, and individual
bonds within those sectors, that we believe will benefit in a given market
environment.
FACTORS THAT AFFECTED PERFORMANCE
For the 12-month period ended March 31, 2004, the following charts indicate the
effects of the four factors mentioned above on individual fund performance.
These factors may affect fund performance in different ways during other
periods, depending on market conditions.
The chart below depicts performance relative to each fund's benchmark, the
Lehman Brothers Municipal Bond Index (the Lehman Index).
o The DURATION column indicates that the fund's duration had a positive effect
("pos"), a negative effect ("neg"), or no meaningful contribution to relative
performance ("neutral"). For the period, all of the funds were short on
duration, relative to the Lehman Index, in anticipation of rising rates.
However, long-term municipal interest rates declined over the period. Being
short on duration thus hurt performance of all of the funds. For most of the
funds, duration was the most significant performance detractor over the
period.
o YIELD CURVE indicates the effect of the fund's yield curve positioning on
performance. Compared with the Lehman Index, all funds were more heavily
weighted in bonds on the long end of the yield curve -- bonds with 10 to 30
years remaining to maturity. That overweighting helped during the period
because long-term municipal rates came down more than short-term rates, so
longer-term bonds experienced more price appreciation. Yield curve
positioning therefore helped relative performance of all funds over the
period.
o The average CREDIT QUALITY of most of the funds was similar to that of the
Lehman Index over the period. The effect of credit quality on relative
performance was therefore neutral. The Virginia fund, however, was
underweighted in "AAA"-rated bonds, which generally underperformed during the
period, and overweighted in "BB"-rated bonds, which outperformed during the
period. For the Virginia fund, credit quality thus had a positive effect on
relative performance.
o In the area of SECTOR ALLOCATION, the North Carolina fund benefited from its
relatively greater exposure to credit-enhanced, or insured, bonds, which
performed well over the period. (Exposure, defined as portfolio weight times
duration, is a measure of a sector's contribution to the portfolio's overall
sensitivity to interest rate shifts.) Insured bonds generally pay a lower
rate of interest but have a high credit rating because the payment of
interest and principal is guaranteed by a highly rated insurance firm as well
as by the original issuer. Most of the insured bonds in the portfolio are
"AAA" rated.
KEY FACTORS IN FUND PERFORMANCE RELATIVE TO BENCHMARK
(THE LEHMAN BROTHERS MUNICIPAL BOND INDEX)
YIELD CREDIT SECTOR
STATE FUND DURATION CURVE QUALITY ALLOCATION
Mississippi neg pos neutral neutral
- ---------------------------------------------------------------------------------------------------------------------
New York neg pos neutral neutral
- ---------------------------------------------------------------------------------------------------------------------
North Carolina neg pos neutral pos
- ---------------------------------------------------------------------------------------------------------------------
Pennsylvania neg pos neutral neg
- ---------------------------------------------------------------------------------------------------------------------
South Carolina neg pos neutral neg
- ---------------------------------------------------------------------------------------------------------------------
Tennessee neg pos neutral neg
- ---------------------------------------------------------------------------------------------------------------------
Virginia neg pos pos neutral
- ---------------------------------------------------------------------------------------------------------------------
West Virginia neg pos neutral neg
- ---------------------------------------------------------------------------------------------------------------------
Funds for which sector allocation was a negative factor were generally
underweighted in one or more sectors that outperformed over the period. The
Pennsylvania fund, for example, was held back by an underweighting in tobacco
bonds. Tobacco bonds are state bonds backed by payments under the Master
Settlement Agreement (MSA) between the states and the major tobacco companies,
in which the states agreed to drop their lawsuits against the firms in return
for a series of payments. For much of 2003, tobacco bonds underperformed as
other lawsuits raised concerns about the tobacco firms' ability to continue MSA
payments. In late 2003 and early 2004, however, those litigation concerns
appeared to subside, tobacco bonds rallied, and the Pennsylvania fund's
underweighting in those issues hurt performance.
The South Carolina fund was hurt by its relatively lower exposure to both
utility and tobacco bonds. (Exposure is defined as portfolio weight times
duration). The Tennessee fund was hurt by an underweighting in tobacco bonds
and an overweighting in housing issues, which underperformed during the period.
The West Virginia fund was held back by an underweighting in tobacco bonds.
Respectfully,
/s/ Michael L. Dawson /s/ Geoffrey L. Schechter
Michael L. Dawson Geoffrey L. Schechter
Portfolio Manager Portfolio Manager
The views expressed in this report are those of the portfolio managers only
through the end of the period of the report as stated on the cover and do not
necessarily reflect the views of MFS or any other person in the MFS
organization. These views are subject to change at any time based on market and
other conditions, and MFS disclaims any responsibility to update such views.
These views may not be relied upon as investment advice or as an indication of
trading intent on behalf of any MFS Fund. References to specific securities are
not recommendations of such securities, and may not be representative of any
MFS Fund's current or future investments.
- -------------------------------------------------------------------------------
Visit mfs.com for our latest economic and investment outlook.
o Under Updates & Announcements, click Week in Review for a summary of recent
investment-related news.
o From Week in Review, link to MFS Global Perspective for our current view of
the world.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) MISSISSIPPI MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
The following information illustrates the historical performance of each fund's
original share class in comparison to various market indicators. Performance
results include the deduction of the maximum applicable sales charge and
reflect the percentage change in net asset value, including reinvestment of
dividends and capital gains distributions. Each fund's results have been
compared to the average relevant state municipal debt fund tracked by Lipper
Inc., an independent firm that reports mutual fund performance. For those
states where Lipper does not track state-specific fund performance, we have
provided the average "other state" municipal debt fund returns. Each fund's
results have also been compared to the Lehman Brothers Municipal Bond Index, a
broad measure of the municipal bond market. However, while this index is
considered the benchmark for the performance of municipal bond funds, it is
comprised of municipal bonds issued nationwide, while each of the funds is
limited to investing in the bonds of a particular state. Benchmark comparisons
are unmanaged and do not reflect any fees or expenses. The performance of other
share classes will be greater than or less than the line shown. (See Notes to
Performance Summary.) It is not possible to invest directly in an index.
VISIT MFS.COM FOR THE MOST RECENT MONTH-END PERFORMANCE RESULTS. MARKET
VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE, AND CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE
OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE
PERFORMANCE SHOWN DOES NOT REFLECT THE DEDUCTION OF TAXES, IF ANY, THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/04)
MFS Mississippi Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
3/94 $ 9,525 $10,000
3/96 10,911 11,644
3/98 12,746 13,593
3/00 13,383 14,425
3/02 15,233 16,610
3/04 17,472 19,322
TOTAL RETURNS
- ----------------------
Average annual
without sales charge
- ----------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- -------------------------------------------------------------------------------
A 8/6/1992 4.77% 5.87% 5.35% 6.25%
- -------------------------------------------------------------------------------
B 9/7/1993 3.80% 5.00% 4.50% 5.39%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
- ----------------------
Comparative Benchmarks
- -------------------------------------------------------------------------------
Average "other state"
municipal debt fund+ 4.24% 4.98% 4.48% 5.46%
- -------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 5.86% 6.49% 6.00% 6.81%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
with sales charge
- ----------------------
- -------------------------------------------------------------------------------
A -0.21% 4.17% 4.33% 5.74%
- -------------------------------------------------------------------------------
B -0.19% 4.08% 4.16% 5.39%
- -------------------------------------------------------------------------------
- ----------------------
Cumulative without
sales charge
- ----------------------
- -------------------------------------------------------------------------------
A 4.77% 18.66% 29.79% 83.43%
- -------------------------------------------------------------------------------
B 3.80% 15.76% 24.63% 69.04%
- -------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) NEW YORK MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/04)
MFS New York Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
3/94 $ 9,525 $10,000
3/96 10,804 11,644
3/98 12,621 13,593
3/00 13,129 14,425
3/02 15,001 16,610
3/04 17,317 19,322
TOTAL RETURNS
- ----------------------
Average annual
without sales charge
- ----------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- -------------------------------------------------------------------------------
A 6/6/1988 4.90% 6.00% 5.47% 6.16%
- -------------------------------------------------------------------------------
B 9/7/1993 4.12% 5.12% 4.61% 5.32%
- -------------------------------------------------------------------------------
C 12/11/2000 4.12% 5.18% 4.65% 5.33%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
- ----------------------
Comparative Benchmarks
- -------------------------------------------------------------------------------
Average New York municipal
debt fund+ 5.45% 5.52% 4.89% 5.89%
- -------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 5.86% 6.49% 6.00% 6.81%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
with sales charge
- ----------------------
- -------------------------------------------------------------------------------
A -0.08% 4.29% 4.45% 5.64%
- -------------------------------------------------------------------------------
B 0.12% 4.21% 4.28% 5.32%
- -------------------------------------------------------------------------------
C 3.12% 5.18% 4.65% 5.33%
- -------------------------------------------------------------------------------
- ----------------------
Cumulative without
sales charge
- ----------------------
- -------------------------------------------------------------------------------
A 4.90% 19.09% 30.50% 81.81%
- -------------------------------------------------------------------------------
B 4.12% 16.16% 25.29% 67.86%
- -------------------------------------------------------------------------------
C 4.12% 16.36% 25.51% 68.16%
- -------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
Performance for share classes offered after class B shares includes the
performance of the fund's class B shares for periods prior to their offering.
Blended class performance has been adjusted to take into account differences
in sales loads, if any, applicable to these share classes, but has not been
adjusted to take into account differences in class-specific operating expenses
(such as Rule 12b-1 fees). Compared to performance these share classes would
have experienced had they been offered for the entire period, the use of
blended performance generally results in higher performance for share classes
with higher operating expenses than the initial share class to which it is
blended, and lower performance for share classes with lower operating expenses
than the initial share class to which it is blended.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) NORTH CAROLINA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/04)
MFS North Carolina Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
3/94 $ 9,525 $10,000
3/96 10,745 11,644
3/98 12,461 13,593
3/00 12,836 14,425
3/02 14,581 16,610
3/04 16,798 19,322
TOTAL RETURNS
- ----------------------
Average annual
without sales charge
- ----------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- -------------------------------------------------------------------------------
A 10/31/1984 5.01% 5.90% 5.17% 5.84%
- -------------------------------------------------------------------------------
B 9/7/1993 4.33% 5.19% 4.49% 5.14%
- -------------------------------------------------------------------------------
C 1/3/1994 4.33% 5.19% 4.49% 5.16%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
- ----------------------
Comparative Benchmarks
- -------------------------------------------------------------------------------
Average North Carolina
municipal debt fund+ 4.77% 5.50% 4.77% 5.66%
- -------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 5.86% 6.49% 6.00% 6.81%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
with sales charge
- ----------------------
- -------------------------------------------------------------------------------
A 0.02% 4.19% 4.15% 5.32%
- -------------------------------------------------------------------------------
B 0.33% 4.27% 4.16% 5.14%
- -------------------------------------------------------------------------------
C 3.33% 5.19% 4.49% 5.16%
- -------------------------------------------------------------------------------
- ----------------------
Cumulative without
sales charge
- ----------------------
- -------------------------------------------------------------------------------
A 5.01% 18.75% 28.68% 76.35%
- -------------------------------------------------------------------------------
B 4.33% 16.38% 24.59% 65.01%
- -------------------------------------------------------------------------------
C 4.33% 16.38% 24.59% 65.33%
- -------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) PENNSYLVANIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/04)
MFS Pennsylvania Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
3/94 $ 9,525 $10,000
3/96 11,006 11,644
3/98 12,862 13,593
3/00 13,553 14,425
3/02 15,602 16,610
3/04 18,059 19,322
TOTAL RETURNS
- ----------------------
Average annual
without sales charge
- ----------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- -------------------------------------------------------------------------------
A 2/1/1993 5.12% 6.33% 5.81% 6.61%
- -------------------------------------------------------------------------------
B 9/7/1993 4.38% 5.45% 4.97% 5.76%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
- ----------------------
Comparative Benchmarks
- -------------------------------------------------------------------------------
Average Pennsylvania municipal
debt fund+ 5.24% 5.69% 4.71% 5.78%
- -------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 5.86% 6.49% 6.00% 6.81%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
with sales charge
- ----------------------
- -------------------------------------------------------------------------------
A 0.12% 4.61% 4.79% 6.09%
- -------------------------------------------------------------------------------
B 0.38% 4.54% 4.63% 5.76%
- -------------------------------------------------------------------------------
- ----------------------
Cumulative without
sales charge
- ----------------------
- -------------------------------------------------------------------------------
A 5.12% 20.20% 32.65% 89.60%
- -------------------------------------------------------------------------------
B 4.38% 17.25% 27.42% 75.03%
- -------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) SOUTH CAROLINA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/04)
MFS South Carolina Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
3/94 $ 9,525 $10,000
3/96 10,816 11,644
3/98 12,498 13,593
3/00 12,743 14,425
3/02 14,568 16,610
3/04 16,799 19,322
TOTAL RETURNS
- ----------------------
Average annual
without sales charge
- ----------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- -------------------------------------------------------------------------------
A 10/31/1984 5.30% 6.14% 5.20% 5.84%
- -------------------------------------------------------------------------------
B 9/7/1993 4.62% 5.45% 4.52% 5.14%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
- ----------------------
Comparative Benchmarks
- -------------------------------------------------------------------------------
Average South Carolina
municipal debt fund+ 5.36% 5.57% 4.79% 5.77%
- -------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 5.86% 6.49% 6.00% 6.81%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
with sales charge
- ----------------------
- -------------------------------------------------------------------------------
A 0.30% 4.43% 4.18% 5.32%
- -------------------------------------------------------------------------------
B 0.62% 4.55% 4.18% 5.14%
- -------------------------------------------------------------------------------
- ----------------------
Cumulative without
sales charge
- ----------------------
- -------------------------------------------------------------------------------
A 5.30% 19.56% 28.84% 76.37%
- -------------------------------------------------------------------------------
B 4.62% 17.27% 24.74% 65.00%
- -------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) TENNESSEE MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/04)
MFS Tennessee Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
3/94 $ 9,525 $10,000
3/96 10,754 11,644
3/98 12,484 13,593
3/00 12,855 14,425
3/02 14,598 16,610
3/04 16,727 19,322
TOTAL RETURNS
- ----------------------
Average annual
without sales charge
- ----------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- -------------------------------------------------------------------------------
A 8/12/1988 4.80% 5.80% 5.04% 5.79%
- -------------------------------------------------------------------------------
B 9/7/1993 4.12% 5.12% 4.36% 5.08%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
- ----------------------
Comparative Benchmarks
- -------------------------------------------------------------------------------
Average Tennessee municipal
debt fund+ 4.75% 5.57% 4.85% 5.75%
- -------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 5.86% 6.49% 6.00% 6.81%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
with sales charge
- ----------------------
- -------------------------------------------------------------------------------
A -0.18% 4.10% 4.02% 5.28%
- -------------------------------------------------------------------------------
B 0.12% 4.21% 4.02% 5.08%
- -------------------------------------------------------------------------------
- ----------------------
Cumulative without
sales charge
- ----------------------
- -------------------------------------------------------------------------------
A
4.80% 18.43% 27.85% 75.61%
- -------------------------------------------------------------------------------
B
4.12% 16.16% 23.78% 64.16%
- -------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) VIRGINIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/04)
MFS Virginia Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
3/94 $ 9,525 $10,000
3/96 10,721 11,644
3/98 12,296 13,593
3/00 12,736 14,425
3/02 14,352 16,610
3/04 16,551 19,322
TOTAL RETURNS
- ----------------------
Average annual
without sales charge
- ----------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- -------------------------------------------------------------------------------
A 10/31/1984 5.70% 5.86% 5.15% 5.68%
- -------------------------------------------------------------------------------
B 9/7/1993 5.02% 5.18% 4.46% 4.98%
- -------------------------------------------------------------------------------
C 1/3/1994 4.93% 5.14% 4.45% 5.00%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
- ----------------------
Comparative Benchmarks
- -------------------------------------------------------------------------------
Average Virginia municipal
debt fund+ 5.08% 5.39% 4.76% 5.76%
- -------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 5.86% 6.49% 6.00% 6.81%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
with sales charge
- ----------------------
- -------------------------------------------------------------------------------
A 0.68% 4.15% 4.13% 5.17%
- -------------------------------------------------------------------------------
B 1.02% 4.26% 4.12% 4.98%
- -------------------------------------------------------------------------------
C 3.93% 5.14% 4.45% 5.00%
- -------------------------------------------------------------------------------
- ----------------------
Cumulative without
sales charge
- ----------------------
- -------------------------------------------------------------------------------
A 5.70% 18.62% 28.54% 73.76%
- -------------------------------------------------------------------------------
B 5.02% 16.35% 24.36% 62.59%
- -------------------------------------------------------------------------------
C 4.93% 16.24% 24.34% 62.85%
- -------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/04 MFS(R) WEST VIRGINIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/04)
MFS West Virginia Lehman
Municipal Bond Brothers
Fund -- Municipal
Class A Bond Index
3/94 $ 9,525 $10,000
3/96 10,768 11,644
3/98 12,395 13,593
3/00 12,737 14,425
3/02 14,547 16,610
3/04 16,630 19,322
TOTAL RETURNS
- ----------------------
Average annual
without sales charge
- ----------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- -------------------------------------------------------------------------------
A 10/31/1984 4.84% 5.87% 5.08% 5.73%
- -------------------------------------------------------------------------------
B 9/7/1993 4.25% 5.21% 4.42% 5.03%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
- ----------------------
Comparative Benchmarks
- -------------------------------------------------------------------------------
Average "other state" municipal
debt fund+ 4.24% 4.98% 4.48% 5.46%
- -------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 5.86% 6.49% 6.00% 6.81%
- -------------------------------------------------------------------------------
- ----------------------
Average annual
with sales charge
- ----------------------
A -0.14% 4.16% 4.06% 5.22%
- -------------------------------------------------------------------------------
B 0.25% 4.30% 4.08% 5.03%
- -------------------------------------------------------------------------------
- ----------------------
Cumulative without
sales charge
- ----------------------
- -------------------------------------------------------------------------------
A 4.84% 18.65% 28.11% 74.59%
- -------------------------------------------------------------------------------
B 4.25% 16.47% 24.12% 63.32%
- -------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
NOTES TO PERFORMANCE SUMMARY AND RISK CONSIDERATIONS
- -------------------------------------------------------------------------------
NOTES TO PERFORMANCE SUMMARY
Class A share performance, including sales charge, reflects the deduction of the
maximum 4.75% sales charge. Class B share performance, including sales charge,
reflects the deduction of the applicable contingent deferred sales charge
(CDSC), which declines over six years from 4% to 0%.
For those funds that offer Class C shares, Class C results, including sales
charge, redeemed within one year from the end of the calendar month of purchase
reflects the deduction of the 1% CDSC.
Performance results reflect any applicable subsidies and waivers in effect
during the periods shown. Without such subsidies and waivers each fund's
performance would be less favorable. Please see the prospectus and financial
statements for complete details.
RISK CONSIDERATIONS
A small portion of income may be subject to state, federal, and/or alternative
minimum tax. Capital gains, if any, are subject to a capital gains tax.
If you are not a resident of the state to which a particular fund is targeted,
the state tax exemption will not apply.
Investments in high yield or lower-rated securities may provide greater returns
but are subject to greater-than-average risk.
By concentrating in one state, the funds are more susceptible to adverse
economic, political or regulatory developments affecting that state than are
funds that invest more broadly.
Because the funds invest in a limited number of companies a change in one
security's value may have a more significant effect on fund values.
These risks may increase share price volatility. Please see the prospectus for
further information regarding these and other risk considerations.
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
- ---------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - 3/31/04 MFS(R) MISSISSIPPI MUNICIPAL BOND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 95.7%
- ---------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 12.1% Commonwealth of Puerto Rico, Public Improvement, 5.25%, 2023 $1,000 $1,068,120
- ---------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, ROLS, FGIC, 9.996%, 2016+(+) 3,110 4,189,108
- ---------------------------------------------------------------------------------------------------------------------------------
Hinds County, MS, MBIA, 6.25%, 2010 - 2011 2,945 3,493,131
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Jackson,
Mississippi) FSA, 5.25%, 2018 - 2020 2,480 2,791,306
- ---------------------------------------------------------------------------------------------------------------------------------
$11,541,665
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 7.5% Puerto Rico Municipal Finance Agency, RITES, FSA, 9.6169%, 2017+(+) $750 $955,170
- ---------------------------------------------------------------------------------------------------------------------------------
State of Mississippi, "B", 6.75%, 2014(++) 1,800 1,868,040
- ---------------------------------------------------------------------------------------------------------------------------------
State of Mississippi, Capital Improvement, 5.5%, 2015(++) 750 874,688
- ---------------------------------------------------------------------------------------------------------------------------------
State of Mississippi, Capital Improvement, 5.25%, 2017(++) 2,000 2,302,600
- ---------------------------------------------------------------------------------------------------------------------------------
State of Mississippi, Capital Improvements, "I", 6%, 2018(++) 1,000 1,186,700
- ---------------------------------------------------------------------------------------------------------------------------------
$7,187,198
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 7.9% Biloxi, MS, Public School District, MBIA, 5%, 2021 $1,000 $1,044,920
- ---------------------------------------------------------------------------------------------------------------------------------
Hinds County, MS, Michigan School District, FSA, 5%, 2018 1,200 1,277,736
- ---------------------------------------------------------------------------------------------------------------------------------
Jackson, MS, Public School District, "B", AMBAC, 5.75%, 2017 1,000 1,157,250
- ---------------------------------------------------------------------------------------------------------------------------------
Jackson, MS, Public School District, "B", AMBAC, 0%, 2022 - 2023 3,000 1,121,180
- ---------------------------------------------------------------------------------------------------------------------------------
Madison County, MS, School District, "A", MBIA, 5.875%, 2016 1,500 1,729,605
- ---------------------------------------------------------------------------------------------------------------------------------
Madison County, MS, School District, FSA, 5%, 2016 1,105 1,199,743
- ---------------------------------------------------------------------------------------------------------------------------------
$7,530,434
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Alcorn County, MS, Corinth Hospital Rev. (Magnolia Regional Health
Hospitals - 17.0% Center), AMBAC, 5.75%, 2013 $1,000 $1,078,480
- ---------------------------------------------------------------------------------------------------------------------------------
Corinth & Alcorn County, MS, Hospital Rev. (Magnolia Regional Health
Center), 5.5%, 2021 400 402,036
- ---------------------------------------------------------------------------------------------------------------------------------
Gulfport, MS, Healthcare Authority Rev. (Memorial Hospital at
Gulfport),
5.75%, 2031 1,000 1,032,670
- ---------------------------------------------------------------------------------------------------------------------------------
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital) MBIA,
6.125%, 2015 2,250 2,319,773
- ---------------------------------------------------------------------------------------------------------------------------------
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital) MBIA,
6.2%, 2018 1,000 1,031,180
- ---------------------------------------------------------------------------------------------------------------------------------
Hinds County, MS, Rev. (Methodist Hospital & Rehabilitation), AMBAC,
5.6%, 2012 2,335 2,623,046
- ---------------------------------------------------------------------------------------------------------------------------------
Jones County, MS, Hospital Rev. (South Central Regional Medical
Center), 5.5%, 2017 1,000 1,007,150
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Adams County
Hospital) FSA, 5.75%, 2016 1,000 1,087,780
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist
Medical Center) MBIA, 6.5%, 2010 1,190 1,274,859
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist
Medical Center) MBIA, 6%, 2013 750 799,507
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Authority Rev. (Forrest
County General Hospital) FSA, 5.625%, 2020 1,000 1,103,370
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Authority Rev., Refunding
& Improvement, 5.5%, 2019 $250 $255,943
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Authority Rev., Refunding
& Improvement, 5.75%, 2023 250 254,513
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Authority Rev. (Rush
Medical Foundation) CONNIE LEE, 6.7%, 2018 2,000 2,007,920
- ---------------------------------------------------------------------------------------------------------------------------------
$16,278,227
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Jones County, MS, Solid Waste Disposal Rev. (International Paper
Paper - 3.2% Co.), "A", 5.8%, 2021 $500 $517,255
- ---------------------------------------------------------------------------------------------------------------------------------
Lowndes County, MS, Solid Waste Disposal & Pollution Control Rev.
(Weyerhauser Co.), 6.8%, 2022 1,250 1,480,362
- ---------------------------------------------------------------------------------------------------------------------------------
Warren County, MS, Solid Waste Disposal (International Paper Co.), "A",
6.6%, 2019 1,000 1,045,350
- ---------------------------------------------------------------------------------------------------------------------------------
$3,042,967
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment &
Tourism - 1.3% Mississippi Development Bank (Diamond Lakes Utilities), 6.25%, 2017 $1,250 $1,280,212
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Gulfport, MS, Community Development Urban Renewal Rev. (Oakview
Revenue - 2.0% Apartments) FNMA, 7.4%, 2025 $1,755 $1,780,395
- ---------------------------------------------------------------------------------------------------------------------------------
Ridgeland, MS, Urban Renewal (Northbrook I & II Apartments), 6.15%, 2019* 300 144,948
- ---------------------------------------------------------------------------------------------------------------------------------
$1,925,343
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 7.0% Mississippi Home Corp. Rev., Single Family Rev., "A", GNMA, 6.3%, 2031 $285 $303,907
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "A-2", GNMA, 5.3%, 2023 1,000 1,008,280
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "A-2", GNMA, 6.95%, 2031 755 807,216
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "A-2", GNMA, 6.5%, 2032 495 553,672
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "B", GNMA, 6.625%, 2027 635 653,942
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "B-2", GNMA, 6.375%, 2032 725 779,774
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "B-2", GNMA, 6.45%, 2033 855 894,065
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "F", GNMA, 7.55%, 2027 369 385,808
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., GNMA, 6.5%, 2024 1,250 1,275,125
- ---------------------------------------------------------------------------------------------------------------------------------
$6,661,789
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local
Appropriation - 13.0% Hinds Community College, MS, Conference & Training Center, 6.5%, 2014(++) $1,320 $1,349,291
- ---------------------------------------------------------------------------------------------------------------------------------
Lamar County, MS, (Jail Project) MBIA, 5.1%, 2021 430 454,170
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Correctional
Facilities), "A", 5.125%, 2025 1,000 1,049,740
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Horn Lake
Recreation Facilities) AMBAC, 4.875%, 2018 495 518,577
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Mississippi, Ltd.
Tax Hospital Rev.), 5.1%, 2020 1,000 1,052,910
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Natchez Mississippi
Convention Center) AMBAC, 6%, 2021 750 879,293
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Public Improvement
Board), 5%, 2023 750 737,940
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Southaven, MS,
Recreation Facilities), 6.2%, 2020 400 453,176
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Southhaven, MS,
Recreation Facilities), 5.875%, 2014 375 416,846
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Tupelo
Fairgrounds), "A", AMBAC, 5%, 2017 785 833,395
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2013+(+) 500 660,660
- ---------------------------------------------------------------------------------------------------------------------------------
State of Mississippi, Certificates of Participation (Rehabilitation
Services), 6.1%, 2014 1,990 2,012,706
- ---------------------------------------------------------------------------------------------------------------------------------
Walnut Grove, MS, Corretional Authority, AMBAC, 6%, 2019 1,750 2,064,807
- ---------------------------------------------------------------------------------------------------------------------------------
$12,483,511
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.6% Childrens Trust Fund, Settlement Rev., PR, 5.375%, 2033 $245 $241,631
- ---------------------------------------------------------------------------------------------------------------------------------
Guam Economic Development Authority, Tobacco Settlement, 5.5%, 2041 350 338,783
- ---------------------------------------------------------------------------------------------------------------------------------
$580,414
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Mississippi Development Bank Special Obligations, Madison County
Tax - 1.3% (Road & Bridge) AMBAC, 5.1%, 2019 $1,175 $1,263,336
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Jackson State University, Educational Building Corp., Student
9.1% Recreation Center, AMBAC, 5.125%, 2027 $750 $779,955
- ---------------------------------------------------------------------------------------------------------------------------------
Medical Center, Educational Building Corp. Rev. (University of
Mississippi Medical Center), "B", AMBAC, 5.5%, 2023 1,000 1,131,060
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi State University Educational Building Corp. Rev.
(Athletic Facilities), "A", 6.2%, 2016(++) 1,000 1,119,810
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi State University Educational Building Corp. Rev. (Power
General Facilities) FGIC, 5%, 2027 2,100 2,181,417
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi State University Educational Building Corp. Rev., AMBAC,
5.5%, 2016 1,000 1,133,120
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi State University Educational Building Corp. Rev., AMBAC,
5%, 2021 250 261,685
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Valley State University, Educational Building Corp.,
MBIA, 5.5%, 2021 890 989,110
- ---------------------------------------------------------------------------------------------------------------------------------
University of Mississippi, Educational Building Corp. (Performing
Arts Center) AMBAC, 5.25%, 2018 1,000 1,072,460
- ---------------------------------------------------------------------------------------------------------------------------------
$8,668,617
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Warren County, MS, Pollution Control Rev. (Mississippi Power & Light
Owned - 2.4% Co), 7%, 2022 $1,000 $1,025,000
- ---------------------------------------------------------------------------------------------------------------------------------
Washington County, MS, Pollution Control Rev. (Mississippi Power &
Light Co.), 7%, 2022 1,230 1,260,750
- ---------------------------------------------------------------------------------------------------------------------------------
$2,285,750
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 2.5% Guam Power Authority Rev., RITES, AMBAC, 9.0426%, 2013+(+) $1,000 $1,239,580
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Okolona Electric
System), 5.2%, 2016 1,010 1,099,435
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority, Power Rev., FSA, 5.25%, 2015 80 88,746
- ---------------------------------------------------------------------------------------------------------------------------------
$2,427,761
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 8.8% Jackson, MS, Water & Sewer Systems Rev., FGIC, 5.25%, 2017 $420 $453,440
- ---------------------------------------------------------------------------------------------------------------------------------
Meridian, MS, Water & Sewer Rev., "A", AMBAC, 6.2%, 2012 - 2013(++) 1,050 1,084,188
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Combined Water
Sewer & Solid Waste Management) FSA, 5.25%, 2021 1,270 1,384,465
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Combined Water
Sewer & Solid Waste Management) FSA, 5.05%, 2027 $1,610 $1,694,702
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Gulfport Water &
Sewer Project), "A", FGIC, 5.25%, 2027 2,000 2,112,360
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Gulfport, MS,
Combined Water & Sewer Project) FSA, 5.625%, 2024 500 555,630
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Wastewater & Solid
Waste Management), "A", FSA, 5.375%, 2017 1,000 1,108,690
- ---------------------------------------------------------------------------------------------------------------------------------
$8,393,475
- ---------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $85,428,091) $91,550,699
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 2.3%
- ---------------------------------------------------------------------------------------------------------------------------------
Jackson County, MS, Pollution Control Rev. (Chevron U.S.A., Inc.),
due 4/01/04, at Identified Cost $2,200 $2,200,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $87,628,091) $93,750,699
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 2.0% 1,933,275
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $95,683,974
- ---------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - 3/31/04 MFS(R) NEW YORK MUNICIPAL BOND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 97.5%
- ---------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 2.2% Port Authority NY & NJ, (131st Street Service), 5%, 2020 $1,500 $1,563,420
- ---------------------------------------------------------------------------------------------------------------------------------
Port Authority NY & NJ, MBIA, 5.5%, 2018 1,500 1,636,560
- ---------------------------------------------------------------------------------------------------------------------------------
Port Authority NY & NJ, Special Obligation Rev. (JFK International),
MBIA, 6.25%, 2015 1,000 1,168,960
- ---------------------------------------------------------------------------------------------------------------------------------
$4,368,940
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 9.5% Commonwealth of Puerto Rico, ROLs, XLCA, 9.806%, 2017+(+) $1,350 $1,799,037
- ---------------------------------------------------------------------------------------------------------------------------------
New York, NY, 7.2%, 2004(++) 1,000 1,032,420
- ---------------------------------------------------------------------------------------------------------------------------------
New York, NY, 7.3%, 2004(++) 5,880 6,072,746
- ---------------------------------------------------------------------------------------------------------------------------------
New York, NY, 7.375%, 2004(++) 1,600 1,652,880
- ---------------------------------------------------------------------------------------------------------------------------------
New York, NY, 5.5%, 2015 1,000 1,109,270
- ---------------------------------------------------------------------------------------------------------------------------------
New York, NY, 5.375%, 2017 1,250 1,345,275
- ---------------------------------------------------------------------------------------------------------------------------------
New York, NY, 6%, 2019 1,000 1,122,130
- ---------------------------------------------------------------------------------------------------------------------------------
New York, NY, FGIC, 5.5%, 2026 2,100 2,256,681
- ---------------------------------------------------------------------------------------------------------------------------------
State of New York, 5.7%, 2005(++) 1,000 1,054,260
- ---------------------------------------------------------------------------------------------------------------------------------
State of New York, AMBAC, 6%, 2004(++) 1,000 1,029,830
- ---------------------------------------------------------------------------------------------------------------------------------
$18,474,529
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 0.1% Erie County, NY, Public Improvement, FGIC, 5%, 2019 $140 $149,555
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 5.9% Arlington, NY, Central School District, FSA, 5%, 2021 $1,000 $1,065,460
- ---------------------------------------------------------------------------------------------------------------------------------
Genesee Valley, NY, Central School District (Angelica Belmont),
FGIC, 5.25%, 2028 1,720 1,839,265
- ---------------------------------------------------------------------------------------------------------------------------------
North Babylon, NY, Union Free School District, FGIC, 5.5%, 2018 2,415 2,715,595
- ---------------------------------------------------------------------------------------------------------------------------------
Port Byron, NY, Central School District, AMBAC,
7.4%, 2012 - 2015 2,000 2,659,490
- ---------------------------------------------------------------------------------------------------------------------------------
Red Hook, NY, Central School District, FSA, 5.125%, 2018 685 751,041
- ---------------------------------------------------------------------------------------------------------------------------------
Rome, NY, City School District, FSA, 5.5%, 2019 1,000 1,118,490
- ---------------------------------------------------------------------------------------------------------------------------------
Washingtonville, NY, Central School Central District, FGIC, 7.35%,
2008 - 2009 1,100 1,341,442
- ---------------------------------------------------------------------------------------------------------------------------------
$11,490,783
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Albany, NY, Industrial Development Agency, Civic Facility Rev.,
Hospitals - 6.9% 8.25%, 2004 $320 $320,810
- ---------------------------------------------------------------------------------------------------------------------------------
Chautauqua County, NY, Civic Facilities Rev. (Women's Christian
Assn.), 6.35%, 2017 180 181,372
- ---------------------------------------------------------------------------------------------------------------------------------
Chautauqua County, NY, Civic Facilities Rev. (Women's Christian
Assn.), 6.4%, 2029 490 472,007
- ---------------------------------------------------------------------------------------------------------------------------------
Chemung County, NY, Industrial Development Agency, Civic Facility
Rev. (Arnot Ogden Medical Center), 5%, 2029 1,750 1,738,420
- ---------------------------------------------------------------------------------------------------------------------------------
Fulton County, NY, Industrial Development Agency, Civic Facility
Rev. (Nathan Littauer Hospital), 5.75%, 2009 750 752,340
- ---------------------------------------------------------------------------------------------------------------------------------
Nassua County, NY, Health Systems Rev. (Nassua County), FSA, 6%, 2014 1,000 1,171,530
- ---------------------------------------------------------------------------------------------------------------------------------
Nassau County, NY, Industrial Development Agency, Civic Facility
Rev. (North Shore Health Systems), 5.625%, 2010 500 554,435
- ---------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Industrial Development Agency, Civic Facilities
Rev. (Staten Island University Hospital), 6.375%, 2031 $500 $503,305
- ---------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Health & Hospital Corp. Rev., 5.25%, 2017 760 793,113
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev. (Montefiore Medical Center),
AMBAC, 5.25%, 2019 950 1,027,606
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev. (North Shore Long Island Jewish
Group), 5.5%, 2033 250 258,578
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev. (St. Vincent's Hospital), FHA,
7.375%, 2011 1,205 1,217,894
- ---------------------------------------------------------------------------------------------------------------------------------
New York Medical Care Facilities Finance Agency Rev., Mental Health
Services (Huntington Hospital Mortgage), 6.5%, 2004(++) 1,250 1,313,975
- ---------------------------------------------------------------------------------------------------------------------------------
New York Medical Facilities Finance Agency Rev. (Montefiore Medical
Center), AMBAC, 6.5%, 2005(++) 1,550 1,654,052
- ---------------------------------------------------------------------------------------------------------------------------------
Suffolk County, NY, Industrial Development Agency Rev. (Huntington
Hospital), 5.875%, 2032 1,000 1,026,940
- ---------------------------------------------------------------------------------------------------------------------------------
Yonkers, NY, Industrial Development Agency, Civic Facilities Rev.
(St. John's Riverside Hospital), 7.125%, 2031 500 512,285
- ---------------------------------------------------------------------------------------------------------------------------------
$13,498,662
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Westchester County, NY, Industrial Development Rev., Continuing Care
Term Care - 0.2% Retirement (Kendal On Hudson), 6.5%, 2034 $300 $303,801
- ---------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.7% Nassau County, NY, Industrial Development Agency, Civic Facility
Rev. (Special Needs Facility), 6.5%, 2017 $205 $213,395
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (Jewish Board of Families & Children),
AMBAC, 5%, 2023 695 730,855
- ---------------------------------------------------------------------------------------------------------------------------------
New York, NY, Industrial Development Agency (PSCH, Inc.), 6.375%,
2033 500 509,350
- ---------------------------------------------------------------------------------------------------------------------------------
$1,453,600
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Environmental Services - New York Environmental Facilities Corp., Solid Waste Disposal Rev.
0.5% (Waste Management), 4%, 2012 $950 $951,644
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Onondaga County, NY, Industrial Development Agency Sewer Facilities
Other - 0.6% Rev. (Bristol-Meyers Squibb Co.), 5.75%, 2024 $1,000 $1,126,670
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Essex County, NY, Industrial Development Agency, Pollution Control
Paper - 1.3% Rev. (International Paper Corp.), 5.55%, 2014 $750 $834,038
- ---------------------------------------------------------------------------------------------------------------------------------
Essex County, NY, Industrial Development Agency, Pollution Control
Rev. (International Paper Corp.), 6.15%, 2021 1,000 1,050,240
- ---------------------------------------------------------------------------------------------------------------------------------
Essex County, NY, Industrial Development Agency, Pollution Control
Rev. (International Paper Corp.), 6.45%, 2023 700 752,283
- ---------------------------------------------------------------------------------------------------------------------------------
$2,636,561
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Other - 0.8% Battery Park City, NY, Miscellaneous Authority Rev., 5%, 2023 $1,500 $1,585,800
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing New York City, NY, Housing Development Corp., Multi-Family Housing
Revenue - 1.3% Rev., 5.6%, 2019 $400 $418,988
- ---------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Housing Development Corp., Multi-Family Housing
Rev., 5.5%, 2034 2,000 2,058,980
- ---------------------------------------------------------------------------------------------------------------------------------
$2,477,968
- ---------------------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax
Revenue - 0.3% Schenectady NY, Metroplex Development Authority Rev., MBIA, 5.375%, 2021 $475 $522,310
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 3.1% New York Mortgage Agency Rev., 4.6%, 2015 $2,865 $2,928,718
- ---------------------------------------------------------------------------------------------------------------------------------
New York Mortgage Agency Rev., 5.85%, 2018 1,445 1,515,227
- ---------------------------------------------------------------------------------------------------------------------------------
New York Mortgage Agency Rev., 5.8%, 2020 1,555 1,628,505
- ---------------------------------------------------------------------------------------------------------------------------------
$6,072,450
- ---------------------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 0.5% Niagara County, NY, Solid Waste Disposal Rev., 5.625%, 2024 $850 $901,128
- ---------------------------------------------------------------------------------------------------------------------------------
Oneida Herkimer, NY, Solid Waste Management Systems Rev., 6.75%, 2014 60 60,766
- ---------------------------------------------------------------------------------------------------------------------------------
Rockland County, NY, Solid Waste Management Systems Rev., 4.8%, 2005 20 21,120
- ---------------------------------------------------------------------------------------------------------------------------------
$983,014
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local
Appropriation - 19.2% New York Dormitory Authority (City University), 5.625%, 2016 $2,450 $2,839,428
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (City University), AMBAC, 5.75%, 2018 800 951,728
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (City University), FSA, 5.75%, 2013 3,000 3,556,260
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (Judicial Institute at Pace), AMBAC,
5.5%, 2020 2,500 2,805,400
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (Master Boces Program), FSA, 5.25%, 2019 1,000 1,088,370
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (Pace University), MBIA, 6%, 2019 1,700 2,002,243
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (Personal Income Tax Education),
5.375%, 2022 1,000 1,078,620
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (School Program), 6.25%, 2020 1,690 2,007,974
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (State University), 5.375%, 2010(++) 1,500 1,744,710
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (State University), 5.875%, 2017 1,130 1,337,988
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (Upstate Community Colleges), FSA, 6%, 2018 1,010 1,192,103
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority, FGIC, 5%, 2024 1,935 2,025,810
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority, Mental Health Services Facilites
Improvement, FSA, 5.25%, 2010(++) 895 1,026,413
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority, Mental Health Services Facilites
Improvement, FSA, 5.25%, 2030 105 109,531
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority, Mental Health Services Facilites
Improvement, MBIA, 5.25%, 2011(++) 785 902,530
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority, Mental Health Services Facilites
Improvement, MBIA, 5.25%, 2031 1,215 1,273,855
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority, Mental Health Services Facilities
Improvement, MBIA, 5.75%, 2020 5 5,549
- ---------------------------------------------------------------------------------------------------------------------------------
New York Medical Care Facilities Finance Agency, 6.375%, 2004(++) 15 15,594
- ---------------------------------------------------------------------------------------------------------------------------------
New York Medical Care Facilities Finance Agency, MBIA, 6%, 2025 20 21,257
- ---------------------------------------------------------------------------------------------------------------------------------
New York Municipal Bond Bank Special Program, AMBAC, 5.25%, 2015 715 788,931
- ---------------------------------------------------------------------------------------------------------------------------------
New York Municipal Bond Bank Special School Purpose Rev., 5.25%, 2022 1,000 1,051,390
- ---------------------------------------------------------------------------------------------------------------------------------
New York State Housing Finance Agency, Income Tax Rev., 5%, 2022 - 2023 2,000 2,080,990
- ---------------------------------------------------------------------------------------------------------------------------------
New York Urban Development Corp. (Correctional Facilities) AMBAC,
0%, 2009 5,000 4,392,900
- ---------------------------------------------------------------------------------------------------------------------------------
New York Urban Development Corp. (State Facilities), AMBAC, 5.6%, 2015 2,750 3,222,973
- ---------------------------------------------------------------------------------------------------------------------------------
$37,522,547
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 2.9% New York City, NY, Transitional Finance Authority Rev., 5.75%, 2009(++) $2,730 $3,218,970
- ---------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Transitional Finance Authority Rev., 5%, 2026 1,000 1,041,060
- ---------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Transitional Finance Authority Rev., MBIA, 5%, 2022 1,400 1,477,910
- ---------------------------------------------------------------------------------------------------------------------------------
$5,737,940
- ---------------------------------------------------------------------------------------------------------------------------------
Tax Assessment - 0.3% Grand Central, NY, Special Assessment Rev., District Management
Assn., Inc., 5%, 2022 $500 $521,285
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 1.7% Guam Economic Development Authority, 5.5%, 2041 $400 $387,180
- ---------------------------------------------------------------------------------------------------------------------------------
New York County Tobacco Trust, 5.625%, 2035 800 765,536
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corp., 5.5%, 2018 2,000 2,205,860
- ---------------------------------------------------------------------------------------------------------------------------------
$3,358,576
- ---------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 7.1% New York City, NY, Dedicated Tax Fund Rev., AMBAC, 5.25%, 2029 $1,335 $1,404,367
- ---------------------------------------------------------------------------------------------------------------------------------
Niagara Falls, NY, Bridge Commision Toll Rev., RITES, FGIC, 9.02%,
2015+(+) 3,500 4,520,460
- ---------------------------------------------------------------------------------------------------------------------------------
Triborough Bridge & Tunnel Authority Rev., NY, 6%, 2012(++) 1,000 1,182,930
- ---------------------------------------------------------------------------------------------------------------------------------
Triborough Bridge & Tunnel Authority Rev., NY, RITES, 9.508%, 2017+(+) 5,000 6,728,500
- ---------------------------------------------------------------------------------------------------------------------------------
$13,836,257
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special
Tax - 11.2% Metropolitan Transportation Authority Rev., NY, 7.375%, 2008(++) $1,720 $1,922,066
- ---------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority Rev., NY, AMBAC, 5.75%, 2013 825 961,884
- ---------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority Rev., NY, Dedicated Tax Fund
Rev., 5.5%, 2015(++) 750 886,050
- ---------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority Rev., NY, Dedicated Tax Fund
Rev., FGIC, 5.25%, 2014 500 556,420
- ---------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority Rev., NY, FGIC, 5.875%, 2010(++) 2,000 2,358,660
- ---------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority Rev., NY, FGIC, 5%, 2025 2,500 2,602,950
- ---------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, NY, Commuter Facilities Rev.,
FGIC, 5.25%, 2011(++) 1,000 1,151,000
- ---------------------------------------------------------------------------------------------------------------------------------
New York Thruway Authority, General Rev., Highway & Bridges, 5.25%, 2015 1,500 1,639,680
- ---------------------------------------------------------------------------------------------------------------------------------
New York Thruway Authority, General Rev., Highway & Bridges, 5%, 2018 1,000 1,067,950
- ---------------------------------------------------------------------------------------------------------------------------------
New York Thruway Authority, General Rev., Highway & Bridges, AMBAC,
5.375%, 2010(++) 2,000 2,320,680
- ---------------------------------------------------------------------------------------------------------------------------------
New York Thruway Authority, General Rev., Highway & Bridges, FGIC,
5.4%, 2017 2,000 2,193,560
- ---------------------------------------------------------------------------------------------------------------------------------
New York Thruway Authority, General Rev., Highway & Bridges, FSA,
5.8%, 2018 20 23,013
- ---------------------------------------------------------------------------------------------------------------------------------
New York Thruway Authority, General Rev., Highway & Bridges, MBIA,
5.75%, 2009(++) 1,000 1,170,650
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Highway & Transportation Authority Rev., 6.25%, 2013 1,000 1,206,270
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Highway & Transportation Authority Rev., 5%, 2036 1,700 1,760,860
- ---------------------------------------------------------------------------------------------------------------------------------
$21,821,693
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Amherst, NY, Industrial Development Agency Rev. (Daemen College),
4.2% 6%, 2021 $1,000 $1,059,600
- ---------------------------------------------------------------------------------------------------------------------------------
Cattaraugus County, NY, Industrial Development Agency Rev.
(Jamestown Community College), 6.4%, 2019 500 560,415
- ---------------------------------------------------------------------------------------------------------------------------------
Hempstead Town, NY, Civic Facility Rev. (Hofstra University), MBIA,
5.8%, 2015 1,500 1,655,985
- ---------------------------------------------------------------------------------------------------------------------------------
Islip, NY, Community Development Agency Rev. (New York Institute of
Technology), 7.5%, 2006(++) 2,000 2,265,480
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (Fordham University), AMBAC, 7.2%, 2015 40 40,167
- ---------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev. (St. John's University), MBIA, 5%, 2017 300 323,301
- ---------------------------------------------------------------------------------------------------------------------------------
Onondaga County, NY, Industrial Development Agency Rev. (Le Moyne
College), 5.625%, 2021 750 806,963
- ---------------------------------------------------------------------------------------------------------------------------------
Tompkins County, NY, Industrial Development Agency Rev. (Cornell
University), 5.625%, 2010(++) 1,000 1,177,220
- ---------------------------------------------------------------------------------------------------------------------------------
Utica, NY, Industrial Development Agency (Utica College), 5.3%, 2008 230 241,001
- ---------------------------------------------------------------------------------------------------------------------------------
$8,130,132
- ---------------------------------------------------------------------------------------------------------------------------------
Universities -
Dormatories - 0.5% New York Dormitory Authority Rev. (Columbia University), 5%, 2022 $1,000 $1,066,530
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Secondary New York City, NY, Industrial Development Agency, Civic Facility
Schools - 0.8% Rev. (Nightingale-Bamford School), AMBAC, 5.25%, 2020 $1,440 $1,566,907
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Cogeneration -
0.5% Port Authority NY & NJ, Special Obligation, 6.75%, 2011 $1,000 $1,049,990
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor
Owned - 2.6% New York Energy Research & Development Rev., 6.1%, 2020 $2,400 $2,543,856
- ---------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities, Water Facilities Rev., 8.85%, 2015 2,500 2,560,000
- ---------------------------------------------------------------------------------------------------------------------------------
$5,103,856
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 2.8% Guam Power Authority Rev., RITES, AMBAC, 9.043%, 2014+(+) $500 $612,800
- ---------------------------------------------------------------------------------------------------------------------------------
Long Island Power Authority, Electrical Systems Rev., 5.5%, 2021 400 430,516
- ---------------------------------------------------------------------------------------------------------------------------------
New York Power Authority Rev., 5%, 2021 1,000 1,057,500
- ---------------------------------------------------------------------------------------------------------------------------------
New York Power Authority Rev., 5.25%, 2040 3,000 3,139,260
- ---------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Water & Power Authority Rev., 5.5%, 2017 200 208,740
- ---------------------------------------------------------------------------------------------------------------------------------
$5,448,816
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 9.8% Erie County, NY, Water Authority Rev., AMBAC, 6.75%, 2014(++) $1,000 $1,243,910
- ---------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
6%, 2010 620 729,380
- ---------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
5%, 2027 1,500 1,564,335
- ---------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
FGIC, 5.25%, 2033 2,000 2,106,280
- ---------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
MBIA, 5.5%, 2027 1,250 1,366,638
- ---------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities, Clean Water & Drinking Rev.,
5%, 2023 - 2025 4,005 4,204,603
- ---------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities, Pollution Control Rev., 5.75%, 2010 175 204,271
- ---------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities, Pollution Control Rev., 5.75%,
2010(++) 2,060 2,419,944
- ---------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities, Pollution Control Rev., 6.875%, 2010 220 221,019
- ---------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities, Pollution Control Rev., 7.25%, 2010 70 70,337
- ---------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities, Water Facilities Rev., 5.25%, 2020 1,000 1,089,050
- ---------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities, Water Facilities Rev., 6%, 2031 1,005 1,058,285
- ---------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities, Water Facilities Rev. (Spring
Valley Water Co.), AMBAC, 6.15%, 2024 1,500 1,553,955
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Aqueduct & Sewer Authority Rev., 9%, 2005(++) 180 193,975
- ---------------------------------------------------------------------------------------------------------------------------------
Suffolk County, NY, Water Authority Rev., MBIA, 5.1%, 2012 895 1,012,317
- ---------------------------------------------------------------------------------------------------------------------------------
$19,038,299
- ---------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $171,930,161) $190,299,115
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.5%
- ---------------------------------------------------------------------------------------------------------------------------------
New York City, NY, due 4/01/04 $1,300 $1,300,000
- ---------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Job Development Authority Rev., due 4/01/04 75 75,000
- ---------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
due 4/01/04 1,500 1,500,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $2,875,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $174,805,161) $193,174,115
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.0% 1,883,690
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $195,057,805
- ---------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF FUND INVESTMENTS - 3/31/04 MFS(R) NORTH CAROLINA MUNICIPAL BOND
- ---------------------------------------------------------------------------------------------------------------------------------
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 98.2%
- ---------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 2.1% Charlotte, NC, "B", MBIA, 5.875%, 2019 - 2020 $4,775 $5,233,886
- ---------------------------------------------------------------------------------------------------------------------------------
Raleigh Durham, NC, Airport Authority Rev., "A", FGIC, 5.25%, 2018 2,700 2,956,284
- ---------------------------------------------------------------------------------------------------------------------------------
$8,190,170
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 0.9% Charlotte, NC, 5.5%, 2016 $3,100 $3,549,996
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 2.5% Durham, NC, 5.9%, 2014 $2,400 $2,543,208
- ---------------------------------------------------------------------------------------------------------------------------------
Mecklenburg County, NC, Public Improvement, "A", 5%, 2017 1,000 1,091,050
- ---------------------------------------------------------------------------------------------------------------------------------
New Hanover County, NC, Public Improvement, 5.75%, 2017(++) 1,000 1,197,950
- ---------------------------------------------------------------------------------------------------------------------------------
New Hanover County, NC, Public Improvement, 5.8%, 2019 4,200 5,043,948
- ---------------------------------------------------------------------------------------------------------------------------------
$9,876,156
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 3.4% Brunswick County, NC, FGIC, 5%, 2020 $2,800 $3,015,152
- ---------------------------------------------------------------------------------------------------------------------------------
Cumberland County, NC, 5.8%, 2019 4,400 5,086,224
- ---------------------------------------------------------------------------------------------------------------------------------
Johnston County, NC, FGIC, 5.6%, 2018 2,000 2,284,700
- ---------------------------------------------------------------------------------------------------------------------------------
New Hanover County, NC, Public Improvement, 5%, 2021 1,435 1,517,814
- ---------------------------------------------------------------------------------------------------------------------------------
New Hanover County, NC, School Improvement, 5%, 2019 1,255 1,350,518
- ---------------------------------------------------------------------------------------------------------------------------------
$13,254,408
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Catawba County, NC, Hospital Rev. (Catawba Memorial Hospital),
Hospitals - 21.2% AMBAC,
5%, 2017 $1,200 $1,275,924
- ---------------------------------------------------------------------------------------------------------------------------------
Charlotte-Mecklenberg, NC, Healthcare Systems Rev. (Carolinas
Healthcare), "A", 5.75%, 2021 1,500 1,566,915
- ---------------------------------------------------------------------------------------------------------------------------------
Charlotte-Mecklenberg, NC, Healthcare Systems Rev. (Carolinas
Healthcare), "A", 5.125%, 2022 1,000 1,022,740
- ---------------------------------------------------------------------------------------------------------------------------------
Charlotte-Mecklenberg, NC, Healthcare Systems Rev. (Carolinas
Healthcare), "A", 5%, 2031 3,500 3,579,380
- ---------------------------------------------------------------------------------------------------------------------------------
Cumberland County, NC, Hospital Facilities Rev. (Cumberland
Hospital), MBIA, 0%, 2009 1,800 1,532,970
- ---------------------------------------------------------------------------------------------------------------------------------
New Hanover County, NC, Hospital Rev. (New Hanover Regional Medical
Center), MBIA, 5%, 2019 6,225 6,606,157
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission (Novant Health), "A", MBIA,
5%, 2018 1,975 2,089,530
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission (Novant Health), Obligations
Group A, 5%, 2020 500 516,430
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Health Care Facilities Rev.
(Deerfield), "A", 5%, 2023 1,000 996,220
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Health Care Facilities Rev.
(Wakemed), AMBAC, 5%, 2021 3,500 3,724,700
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Betsy Johnson
Health Care System), FSA, 5.125%, 2032 1,500 1,568,700
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Duke
University), "C", 5.25%, 2021 5,975 6,102,686
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Gaston
Memorial Hospital), 5.5%, 2015 - 2019 12,290 12,801,586
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Maria Parham
Medical Center), 6.5%, 2026 $1,000 $1,072,950
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Mission-St.
Joseph Health Systems), 5.25%, 2015 2,210 2,396,657
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Mission-St.
Joseph Health Systems), 5.5%, 2021 2,825 3,001,054
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Mission-St.
Joseph Health Systems), MBIA, 5.1%, 2018 1,500 1,593,765
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Pitt County
Memorial Hospital), "B", 5%, 2018 3,000 3,082,920
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Rex
Healthcare), AMBAC, 5%, 2017 5,000 5,304,550
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Southeastern
Regional Medical Center), 5.375%, 2032 3,330 3,402,461
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Wilson
Memorial Hospital), AMBAC, 0%, 2013 - 2015 2,140 1,398,101
- ---------------------------------------------------------------------------------------------------------------------------------
Northern Hospital District Surry County, NC, Health Care Facilities
Rev., ASST GTY, 5.5%, 2019 1,250 1,366,625
- ---------------------------------------------------------------------------------------------------------------------------------
Northern Hospital District Surry County, NC, Health Care Facilities
Rev., ASST GTY, 5.1%, 2021 1,000 1,052,960
- ---------------------------------------------------------------------------------------------------------------------------------
Pitt County, NC, Rev. (Pitt County Memorial Hospital), 5.25%, 2021 10,135 10,510,299
- ---------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, Hospital Rev. (Chapel Hill Hospital),
5.25%, 2019(++) 4,800 5,231,760
- ---------------------------------------------------------------------------------------------------------------------------------
$82,798,040
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long
Term Care - 0.7% Mocksville, NC (Housing Foundation, Inc.), 7.25%, 2029 $960 $834,134
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Health Care Commission,
Health Care Facilities Rev. (Givens Estates), 6.5%, 2032 800 822,624
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Health Care Facilities Rev.
(Arbor Acres Community), 6.375%, 2032 1,000 1,034,880
- ---------------------------------------------------------------------------------------------------------------------------------
$2,691,638
- ---------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.6% Cumberland County, NC, Finance Corp., Installment Payment Rev.
(Detention Center & Mental Health), AMBAC, 5.625%, 2019 $2,125 $2,382,338
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Columbus County, NC, Industrial Facilities & Pollution Control
Paper - 4.7% Financing Authority (International Paper Co.), "A", 5.8%, 2016 $2,000 $2,114,340
- ---------------------------------------------------------------------------------------------------------------------------------
Haywood County, NC, Industrial Facilities & Pollution Control
Financing Authority (Champion International Corp.), "A", 5.75%, 2025 5,400 5,486,508
- ---------------------------------------------------------------------------------------------------------------------------------
Martin County, NC, Industrial Facilities & Pollution Control
Financing Authority Rev. (Solid Waste Disposal Weyerhaeuser), 7.25%,
2014 7,000 7,101,850
- ---------------------------------------------------------------------------------------------------------------------------------
Martin County, NC, Industrial Facilities & Pollution Control
Financing Authority Rev. (Solid Waste Disposal Weyerhaeuser), 6.8%,
2024 3,500 3,582,600
- ---------------------------------------------------------------------------------------------------------------------------------
$18,285,298
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Charlotte, NC, Housing Authority, Mortgage Rocky Branch II, GNMA,
Revenue - 1.5% 4.65%, 2035 $2,300 $2,262,556
- ---------------------------------------------------------------------------------------------------------------------------------
Durham County, NC, Multifamily Rev. (Alston Village Apartments),
FNMA, 5.65%, 2034 2,540 2,762,072
- ---------------------------------------------------------------------------------------------------------------------------------
Mecklenburg County, NC (Little Rock Apartments), FNMA, 5.15%, 2022 1,000 1,033,640
- ---------------------------------------------------------------------------------------------------------------------------------
$6,058,268
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 6.6% North Carolina Housing Finance Agency Rev., "13-A", 4.25%, 2028 $2,820 $2,898,763
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "14-A", AMBAC, 4.35%,
2028 4,780 4,881,049
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "15-A", FSA, 4.85%, 2023 600 604,008
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "15-A", FSA, 4.95%, 2032 500 504,680
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "5-A", 5.55%, 2019 3,910 4,016,782
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "7-A", 6.15%, 2020 900 935,757
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "A", 5.25%, 2020 1,500 1,523,775
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "A", 5.375%, 2023 250 252,408
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency, "H", FHA, 6.05%, 2028 4,460 4,620,025
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "PP", FHA, 6.15%, 2017 1,740 1,824,025
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "RR", 5.85%, 2028 3,625 3,727,261
- ---------------------------------------------------------------------------------------------------------------------------------
$25,788,533
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local
Appropriation - 16.8% Brunswick County, NC, Certificates of Participation, FSA, 5.5%, 2020 $1,000 $1,123,770
- ---------------------------------------------------------------------------------------------------------------------------------
Cabarrus County, NC, Development Corp., AMBAC, 5.3%, 2019 1,250 1,364,750
- ---------------------------------------------------------------------------------------------------------------------------------
Cabarrus County, NC, Installment Financing Contract, 5%, 2021 5,500 5,811,245
- ---------------------------------------------------------------------------------------------------------------------------------
Carteret County, NC, AMBAC, 5.625%, 2020 1,010 1,144,976
- ---------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Certificates of Participation (Convention
Facilities), 5.5%, 2020 3,000 3,377,220
- ---------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Certificates of Participation (Convention
Facilities), AMBAC, 0%, 2004 - 2008 12,320 11,804,578
- ---------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Certificates of Participation (Public Saftey
Facilities), "D",
5.5%, 2020 3,000 3,362,400
- ---------------------------------------------------------------------------------------------------------------------------------
Cumberland County, NC, Certificates of Participation (Civic Center),
"A", AMBAC, 0%, 2011 - 2013 1,425 1,017,691
- ---------------------------------------------------------------------------------------------------------------------------------
Forsyth County, NC, Certificates of Participation (Forsyth County
Public Facilities Equipment), 5.25%, 2023 1,230 1,328,695
- ---------------------------------------------------------------------------------------------------------------------------------
Forsyth County, NC, Certificates of Participation (Public Facilities
& Equipment Project), 5.25%, 2019 775 852,733
- ---------------------------------------------------------------------------------------------------------------------------------
Franklin County, NC, Certificates of Participation (Jail & School
Projects), FGIC, 6.625%, 2014(++) 2,000 2,057,660
- ---------------------------------------------------------------------------------------------------------------------------------
Harnett County, NC, Certificates of Participation, AMBAC, 6.2%, 2006
(++) 1,000 1,054,430
- ---------------------------------------------------------------------------------------------------------------------------------
Harnett County, NC, Certificates of Participation, FSA, 5.25%, 2015 1,020 1,170,899
- ---------------------------------------------------------------------------------------------------------------------------------
Harnett County, NC, Certificates of Participation, FSA, 5.5%, 2016 1,225 1,405,786
- ---------------------------------------------------------------------------------------------------------------------------------
Iredell County, NC, Public Facilities (School Projects), AMBAC,
5.5%, 2019(++) 1,000 1,165,020
- ---------------------------------------------------------------------------------------------------------------------------------
New Hanover County, NC, Certificates of Participation (New Hanover
County Projects), AMBAC, 5.25%, 2018 1,635 1,812,839
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Infrastructure Financial Corp. (Correctional
Facilities Projects),
5%, 2021 2,500 2,638,025
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Infrastructure Financial Corp., Certificates of
Participation (North Carolina State Correctional Facilities), "A",
5%, 2023 1,345 1,404,853
- ---------------------------------------------------------------------------------------------------------------------------------
Pitt County, NC, Certificates of Participation (School Facilities
Improvement), "A", FSA, 5.5%, 2020 1,250 1,404,863
- ---------------------------------------------------------------------------------------------------------------------------------
Pitt County, NC, Certificates of Participation (School Facilities
Improvement), "B", FSA, 5.75%, 2018 - 2019 2,780 3,207,745
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Bank & Finance Agency (Kidder), 7.5%, 2006 7,000 7,575,820
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2013+(+) 1,500 1,981,260
- ---------------------------------------------------------------------------------------------------------------------------------
Randolph County, NC, Certificates of Participation, FSA, 5.6%, 2018 3,000 3,489,360
- ---------------------------------------------------------------------------------------------------------------------------------
Rockingham, NC, Certificates of Participation, AMBAC, 5.125%, 2024 $350 $372,243
- ---------------------------------------------------------------------------------------------------------------------------------
Rutherford County, NC, Certificates of Participation (Rutherford
County School), AMBAC, 5%, 2023 840 883,865
- ---------------------------------------------------------------------------------------------------------------------------------
Winston Salem, NC, Certificates of Participation, "C", 5%, 2018 2,575 2,763,670
- ---------------------------------------------------------------------------------------------------------------------------------
$65,576,396
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.4% Virgin Islands Public Finance Authority Rev., 5.5%, 2022 $1,650 $1,706,727
- ---------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev., ASST GTY, 5.5%, 2018 1,000 1,094,520
- ---------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev., FSA, 5.25%, 2020 1,200 1,322,724
- ---------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev., FSA, 5%, 2022 1,315 1,399,555
- ---------------------------------------------------------------------------------------------------------------------------------
$5,523,526
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.5% Childrens Trust Fund, Settlement Rev., PR, 5.375%, 2033 $1,930 $1,903,463
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico, Highway & Transportation Authority
Tax - 2.0% Rev., RITES, FSA, 10.5541%, 2018+(+) $5,425 $7,828,709
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges -
7.4% Appalachian State University, NC, "A", FGIC, 5.125%, 2022 $1,260 $1,349,485
- ---------------------------------------------------------------------------------------------------------------------------------
Appalachian State University, NC, Rev. (Package Systems), FSA, 5.6%,
2020 2,285 2,592,241
- ---------------------------------------------------------------------------------------------------------------------------------
East Carolina University, NC, Rev., "A", AMBAC, 5.25%, 2021 1,375 1,499,259
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Capital Facilities Finance (Duke University), "A",
5.125%, 2041 4,915 5,111,797
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Capital Facilities Finance (High Point University),
5.125%, 2018 - 2021 810 864,537
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Capital Facilities Finance (Johnson & Wales
University), "A", XLCA, 5.25%, 2021 - 2022 2,645 2,871,254
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Industrial Tourist Authority (University Plaza), "A",
MBIA, 5%, 2020 2,180 2,323,749
- ---------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, Greensboro Rev., "A", FSA, 5%, 2020 2,835 3,029,679
- ---------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, Greensboro Rev., "B", FSA, 5.375%,
2017 325 363,561
- ---------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, Ashville Rev., Refunding General, "A",
AMBAC, 5%, 2019 530 568,171
- ---------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, Greensboro Rev., "B", FSA, 5.375%,
2016 1,085 1,223,077
- ---------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, University Rev., 0%, 2015 3,250 2,066,903
- ---------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, University Rev., 5%, 2028 2,000 2,094,160
- ---------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, Wilmington Rev., "A", AMBAC, 5%, 2019 1,375 1,479,775
- ---------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, Wilmington Rev., AMBAC, 5.25%, 2021 1,380 1,500,101
- ---------------------------------------------------------------------------------------------------------------------------------
$28,937,749
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Wake County, NC, Industrial Facilities & Pollution Control Rev.
Owned - 0.7% (Carolina Power & Light Co.), 5.375%, 2017 $2,500 $2,718,000
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 15.3% North Carolina Eastern Municipal Power Agency, "A", 7.5%, 2010 $2,595 $3,257,659
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power Agency, "A", MBIA, 7.5%, 2010 3,005 3,743,208
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power Agency, "A", MBIA, 5%, 2017 3,120 3,485,227
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power Agency, "B", MBIA, 7.25%, 2007 5,000 5,717,650
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power Agency, AMBAC, 6%, 2018 1,245 1,503,113
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power Agency, RITES, AMBAC,
10.5082%, 2018+(+) 6,500 9,195,160
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, "A", MBIA, 5.5%, 2014 3,000 3,490,320
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, Catawba Electric Rev., 6%, 2011 5,000 5,895,850
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, Catawba Electric Rev.,
6.375%, 2013 1,000 1,141,170
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, Catawba Electric Rev., MBIA,
7%, 2007 $5,000 $5,684,400
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, ROLS, 9.358%, 2020+(+) 3,000 3,485,460
- ---------------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, ROLS, MBIA, 9.358%, 2019+(+) 5,000 5,870,300
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., FSA, 6%, 2016(++) 5,000 5,160,400
- ---------------------------------------------------------------------------------------------------------------------------------
Raleigh, NC, Combined Enterprise Systems Rev., 5.125%, 2022 2,000 2,149,960
- ---------------------------------------------------------------------------------------------------------------------------------
$59,779,877
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 9.9% Broad River, NC, Water Authority Rev., MBIA, 5.75%, 2019 $1,490 $1,724,660
- ---------------------------------------------------------------------------------------------------------------------------------
Buncombe County, NC, Metropolitan Sewer District, MBIA, 5%, 2019 1,245 1,344,737
- ---------------------------------------------------------------------------------------------------------------------------------
Cary, NC, Combined Enterprise Systems Rev., 5%, 2026 1,000 1,037,330
- ---------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Storm Water Fee, 6%, 2020(++) 3,180 3,794,312
- ---------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Water & Sewer Systems Rev., 5.75%, 2016 - 2018(++) 7,075 8,324,633
- ---------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Water & Sewer Systems Rev., 5.5%, 2017 1,650 1,886,049
- ---------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Water & Sewer Systems Rev., 5.25%, 2021 4,000 4,320,040
- ---------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Water & Sewer Systems Rev., 5.25%, 2025(++) 3,000 3,452,820
- ---------------------------------------------------------------------------------------------------------------------------------
Durham County, NC, Enterprise Systems Rev., 5%, 2023 1,675 1,769,872
- ---------------------------------------------------------------------------------------------------------------------------------
Fayetteville, NC, Public Works Commission Rev., FSA, 5.25%, 2016 1,500 1,672,605
- ---------------------------------------------------------------------------------------------------------------------------------
Greensboro, NC, Enterprise Systems Rev., "A", 5.125%, 2018 - 2019 3,240 3,503,166
- ---------------------------------------------------------------------------------------------------------------------------------
Greenville, NC, Combined Enterprise Systems Rev., FSA, 5%, 2016 1,005 1,098,746
- ---------------------------------------------------------------------------------------------------------------------------------
Greenville, NC, Combined Enterprise Systems Rev., FSA, 5.25%, 2019 1,170 1,286,754
- ---------------------------------------------------------------------------------------------------------------------------------
Kannapolis, NC, Water & Sewer Rev., "B", FSA, 5.25%, 2021 1,000 1,073,140
- ---------------------------------------------------------------------------------------------------------------------------------
Winston Salem, NC, Water & Sewer Systems Rev., 5.125%, 2028(++) 2,000 2,285,154
- ---------------------------------------------------------------------------------------------------------------------------------
$38,574,018
- ---------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $349,479,083) $383,716,583
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.8%
- ---------------------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, CA, Toll Bridge Rev. "A", due 4/07/04 $2,000 $2,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
California State, Department of Water Resources, Power Supply Rev.,
due 4/07/04 500 500,000
- ---------------------------------------------------------------------------------------------------------------------------------
Knoxville, TN, Utilities Board Rev., due 4/01/04 75 75,000
- ---------------------------------------------------------------------------------------------------------------------------------
Missouri Development Finance, Board of Cultural Facilities Rev.
(Nelson Gallery), "B", due 4/01/04 400 400,000
- ---------------------------------------------------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority, Local Government
Public Improvement, "II G1", due 4/07/04 115 115,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $3,090,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $352,569,083) $386,806,583
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.0% 3,997,328
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $390,803,911
- ---------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - 3/31/04 MFS(R) PENNSYLVANIA MUNICIPAL BOND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 99.1%
- ---------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port Allegheny County PA, Airport Rev. (Pittsburgh International
Revenue - 1.9% Airport), FGIC, 6.125%, 2017 $500 $550,565
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County PA, Airport Rev. (Pittsburgh International
Airport), MBIA, 5.75%, 2014 1,000 1,124,940
- ---------------------------------------------------------------------------------------------------------------------------------
Susquehanna Area Regional Airport, 5.375%, 2018 200 200,216
- ---------------------------------------------------------------------------------------------------------------------------------
Susquehanna Area Regional Airport, AMBAC, 5.375%, 2023 500 531,035
- ---------------------------------------------------------------------------------------------------------------------------------
$2,406,756
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 9.6% Allegheny County, PA, FGIC, 5.3%, 2018 $500 $543,550
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, FGIC, 5.4%, 2019 500 544,035
- ---------------------------------------------------------------------------------------------------------------------------------
Allentown, PA, FGIC, 5%, 2022 1,350 1,425,614
- ---------------------------------------------------------------------------------------------------------------------------------
Beaver County, PA, MBIA, 5.75%, 2006(++) 250 275,733
- ---------------------------------------------------------------------------------------------------------------------------------
Butler County, PA, FGIC, 5.25%, 2022 675 776,513
- ---------------------------------------------------------------------------------------------------------------------------------
Butler County, PA, FGIC, 5.25%, 2023 645 742,002
- ---------------------------------------------------------------------------------------------------------------------------------
Centre County, PA, MBIA, 5.25%, 2018 1,000 1,097,690
- ---------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, ROLS, FGIC, 9.896%, 2015(+)+ 1,000 1,348,100
- ---------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, ROLS, XLCA, 9.806%, 2017(+)+ 1,000 1,332,620
- ---------------------------------------------------------------------------------------------------------------------------------
Luzerne County, PA, MBIA, 5.25%, 2025 500 532,125
- ---------------------------------------------------------------------------------------------------------------------------------
North Huntingdon Township, PA, AMBAC, 5.25%, 2019 500 535,890
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Finance Rev. (Pennsylvania Hills), FGIC, 5.45%, 2019 500 543,170
- ---------------------------------------------------------------------------------------------------------------------------------
State of Pennsylvania, 6.25%, 2010 300 360,192
- ---------------------------------------------------------------------------------------------------------------------------------
State of Pennsylvania, 6%, 2019 1,000 1,169,820
- ---------------------------------------------------------------------------------------------------------------------------------
Westmoreland County, PA, FGIC, 5%, 2019 580 621,505
- ---------------------------------------------------------------------------------------------------------------------------------
$11,848,559
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 0.5% Pittsburgh, PA, FGIC, 5.75%, 2009(++) $500 $581,675
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 21.2% Butler, PA, School District, FGIC, 5.375%, 2018 $500 $545,385
- ---------------------------------------------------------------------------------------------------------------------------------
Chambersburg, PA, School District, FSA, 5%, 2016 500 538,110
- ---------------------------------------------------------------------------------------------------------------------------------
Dover, PA, School District, FGIC, 5%, 2015 1,510 1,633,820
- ---------------------------------------------------------------------------------------------------------------------------------
Downingtown, PA, School District, AMBAC, 5.65%, 2019 500 561,125
- ---------------------------------------------------------------------------------------------------------------------------------
Exeter Township, PA, School District, FGIC, 5%, 2025 1,000 1,042,920
- ---------------------------------------------------------------------------------------------------------------------------------
Garnet Valley, PA, School District, FGIC, 5.5%, 2015 750 853,373
- ---------------------------------------------------------------------------------------------------------------------------------
Gateway, PA, Alleghany School District, FGIC, 5.2%, 2023 1,000 1,066,070
- ---------------------------------------------------------------------------------------------------------------------------------
Keystone Oaks, PA, School District, FGIC, 5%, 2016 920 978,190
- ---------------------------------------------------------------------------------------------------------------------------------
Mt. Lebanon PA, School District, MBIA, 5%, 2020 1,000 1,063,480
- ---------------------------------------------------------------------------------------------------------------------------------
Norristown, PA, School District, FGIC, 5%, 2021 500 529,580
- ---------------------------------------------------------------------------------------------------------------------------------
North Allegheny, PA, School District, FGIC, 5.05%, 2022 590 619,140
- ---------------------------------------------------------------------------------------------------------------------------------
North Pocono, PA, School District, FGIC, 5%, 2023 500 523,990
- ---------------------------------------------------------------------------------------------------------------------------------
Palmyra, PA, School District, FGIC, 5.375%, 2016 820 919,515
- ---------------------------------------------------------------------------------------------------------------------------------
Pennridge, PA, School District, MBIA, 5%, 2020 500 531,740
- ---------------------------------------------------------------------------------------------------------------------------------
Pennridge, PA, School District, MBIA, 5%, 2021 500 529,450
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev., State
Systems of Higher Education, AMBAC, 5%, 2018 500 531,830
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Public School Building (Garnet Valley School
Disctrict), AMBAC, 5.5%, 2018 $1,005 $1,129,278
- ---------------------------------------------------------------------------------------------------------------------------------
Perkiomen Valley, PA, School District, FSA, 5%, 2019 500 528,030
- ---------------------------------------------------------------------------------------------------------------------------------
Perkiomen Valley, PA, School District, FSA, 5%, 2023 1,000 1,044,410
- ---------------------------------------------------------------------------------------------------------------------------------
Perkiomen Valley, PA, School District, FSA, 5%, 2024 1,000 1,042,890
- ---------------------------------------------------------------------------------------------------------------------------------
Perkiomen Valley, PA, School District, FSA, 5%, 2025 1,260 1,311,194
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, School District, AMBAC, 5.375%, 2019 500 537,710
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, School District, FSA, 5.75%, 2019 500 571,335
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, School District, MBIA, 6%, 2016 500 584,705
- ---------------------------------------------------------------------------------------------------------------------------------
Pittsburgh, PA, School District, 5.5%, 2009(++) 1,320 1,526,263
- ---------------------------------------------------------------------------------------------------------------------------------
Riverside, PA, School District, FGIC, 5.45%, 2017 500 577,900
- ---------------------------------------------------------------------------------------------------------------------------------
Riverside, PA, School District, FGIC, 5.5%, 2020 500 579,380
- ---------------------------------------------------------------------------------------------------------------------------------
South Park, PA, School District, FGIC, 5%, 2019 750 794,265
- ---------------------------------------------------------------------------------------------------------------------------------
Southeastern Area, PA, Special Schools Authority Rev., 0%, 2007 360 330,224
- ---------------------------------------------------------------------------------------------------------------------------------
State Public School Building Authority, Pennsylvania School (Lease
Philadelphia School District), FSA, 5.25%, 2024 1,000 1,066,060
- ---------------------------------------------------------------------------------------------------------------------------------
State Public School Building Authority, Pennsylvania School
(Tuscarora School District), FSA, 5%, 2024 1,000 1,077,980
- ---------------------------------------------------------------------------------------------------------------------------------
Wilson, PA, School District, FGIC, 5.125%, 2017 1,000 1,083,150
- ---------------------------------------------------------------------------------------------------------------------------------
$26,252,492
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Allegheny County, PA, Hospital Development Authority Rev. (South
Hospitals - 10.0% Hills Health System), MBIA, 5.8%, 2016 $500 $546,565
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev. (South
Hills Health Systems), 9.25%, 2022 50 55,421
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev. (UPMC
Health Systems), MBIA, 5%, 2018 500 529,400
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev. (West
Pennsylvania Allegheny Health), 6.75%, 2025 555 567,981
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev. (West
Pennsylvania Allegheny Health), 9.25%, 2030 150 166,263
- ---------------------------------------------------------------------------------------------------------------------------------
Blair County, PA, Hospital Authority Rev. (Altoona), AMBAC, 5.5%, 2008 470 529,403
- ---------------------------------------------------------------------------------------------------------------------------------
Chester County, PA, Health & Education (Main Line Health Systems),
5.5%, 2015 335 342,176
- ---------------------------------------------------------------------------------------------------------------------------------
Cumberland County PA, Municipal Authority Rev. (Carlisle Hospital &
Health Centers), 6.8%, 2004(++) 250 263,778
- ---------------------------------------------------------------------------------------------------------------------------------
Erie County, PA, Hospital Authority Rev. (Hamot Health Foundation),
AMBAC, 5.25%, 2017 675 743,094
- ---------------------------------------------------------------------------------------------------------------------------------
Lancaster County, PA, Hospital Authority Rev., 5.5%, 2026 500 511,690
- ---------------------------------------------------------------------------------------------------------------------------------
Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan
Hospital), 5%, 2018 200 203,932
- ---------------------------------------------------------------------------------------------------------------------------------
Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan
Hospital), 6%, 2035 350 359,135
- ---------------------------------------------------------------------------------------------------------------------------------
Lehigh County, PA, General Purpose Authority (Lehigh Valley
Hospital), 5.25%, 2032 600 608,130
- ---------------------------------------------------------------------------------------------------------------------------------
Lehigh County, PA, General Purpose Authority (Lehigh Valley
Hospital), MBIA, 7%, 2016 250 321,410
- ---------------------------------------------------------------------------------------------------------------------------------
Lehigh County, PA, General Purpose Authority (St. Lukes Bethlehem
Hospital), 5.375%, 2033 600 605,718
- ---------------------------------------------------------------------------------------------------------------------------------
Lehigh County, PA, Hospital Rev. (Lehigh Valley Hospital), FSA,
5.25%, 2019 500 540,730
- ---------------------------------------------------------------------------------------------------------------------------------
Lycoming County, PA, Authority Hospital Rev. (Williamsport Hospital
Obligation Group), CONNIE LEE, 5.375%, 2010 $750 $807,578
- ---------------------------------------------------------------------------------------------------------------------------------
Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center),
6%, 2043 750 780,053
- ---------------------------------------------------------------------------------------------------------------------------------
Mount Lebanon, PA, Hospital Authority Rev. (St. Clair Memorial
Hospital), 5.625%, 2032 400 405,948
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev., 6.25%, 2018 100 111,165
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev., 6%, 2031 650 694,590
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Health & Educational Facilities Rev. (Jeane
Health), 6.6%, 2010 180 191,824
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Health & Educational Facilities Rev. (Temple
University), 6.625%, 2023 250 252,765
- ---------------------------------------------------------------------------------------------------------------------------------
Sayre, PA, Health Care Facilities Authority Rev., 5.875%, 2031 500 524,840
- ---------------------------------------------------------------------------------------------------------------------------------
Sayre, PA, Health Care Facilities Authority Rev. (Latrobe Hospital),
AMBAC, 5.25%, 2015 585 650,760
- ---------------------------------------------------------------------------------------------------------------------------------
Scranton-Lackawanna, PA, Health & Welfare Authority Rev. (Allied
Rehab Hospital), AMBAC, 7.125%, 2005 110 111,432
- ---------------------------------------------------------------------------------------------------------------------------------
Southcentral Pennsylvania General Authority Rev. (York Hospital),
5.625%, 2026 600 630,990
- ---------------------------------------------------------------------------------------------------------------------------------
West Shore, PA, Hospital Authority (Holy Spirit Hospital), 6.25%, 2032 350 362,327
- ---------------------------------------------------------------------------------------------------------------------------------
$12,419,098
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Blair County, PA, Industrial Development Authority Rev. (Village of
Term Care - 0.8% Penn St.), 7%, 2034 $150 $155,766
- ---------------------------------------------------------------------------------------------------------------------------------
Clarion, PA, Industrial Development Authority Rev. (Beverly
Enterprises, Inc.), 7.5%, 2012 150 153,977
- ---------------------------------------------------------------------------------------------------------------------------------
Cumberland County, PA, Retirement Community Rev. (Wesley Affiliated
Services), 7.25%, 2035 150 152,961
- ---------------------------------------------------------------------------------------------------------------------------------
Lancaster County, PA, Hospital Authority Rev. (Willow Valley
Retirement Project), 5.875%, 2031 500 517,565
- ---------------------------------------------------------------------------------------------------------------------------------
$980,269
- ---------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.1% Montgomery County, PA, Industrial Development Authority (Wordsworth
Academy), 8%, 2024 $150 $150,987
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Environmental Services - New Morgan, PA, Industrial Development Authority, Solid Waste
0.8% Disposal Rev. (New Morgan Landfill Co, Inc.), 6.5%, 2019 $500 $480,245
- ---------------------------------------------------------------------------------------------------------------------------------
Westmoreland County, PA, Industrial Development Corp. (Waste
Management), LOC, 5.1%, 2018 500 538,710
- ---------------------------------------------------------------------------------------------------------------------------------
$1,018,955
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Bucks County, PA, Industrial Development Authority Rev. (USX Corp.),
Other - 1.5% 5.4%, 2017 $300 $340,977
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Economic Development Financing Authority Rev. (Amtrak),
6.125%, 2021 150 153,599
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Economic Development Financing Authority, Solid Waste
Disposal Rev. (Proctor & Gamble), 5.375%, 2031 1,000 1,099,920
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Economic Development Financing Authority, Wastewater
Treatment Rev. (Sunoco Co.), 7.6%, 2024 250 263,470
- ---------------------------------------------------------------------------------------------------------------------------------
$1,857,966
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Erie County, PA, Industrial Development Authority (International
Paper - 0.8% Paper Co.), 5.3%, 2012 $650 $716,424
- ---------------------------------------------------------------------------------------------------------------------------------
Erie County, PA, Industrial Development Authority (International
Paper Co.), 7.625%, 2018 250 262,543
- ---------------------------------------------------------------------------------------------------------------------------------
$978,967
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Other - 0.2% Gallery Certificate Trust, PA, Parking Rev., FSA, 4.5%, 2013 $185 $187,540
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Philadelphia, PA, Housing Authority Capital Program Rev., FSA,
Revenue - 0.9% 5.25%, 2014 $1,000 $1,136,620
- ---------------------------------------------------------------------------------------------------------------------------------
Parking - 1.4% Philadelphia, PA, Public Parking Authority Rev., FSA, 5.625%, 2015 $1,000 $1,134,110
- ---------------------------------------------------------------------------------------------------------------------------------
Pittsburgh, PA, Public Parking Authority Rev., AMBAC, 6%, 2020 500 583,395
- ---------------------------------------------------------------------------------------------------------------------------------
$1,717,505
- ---------------------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax Pittsburgh & Allegheny County, PA, Sales Tax Rev. (Public Auditorium
Revenue - 0.4% Hotel Room), AMBAC, 5.25%, 2017 $500 $543,370
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Philadelphia, PA, Redevelopment Authority Home Improvement Loan
Local - 0.3% Rev., FHA, 6.1%, 2010 $60 $62,440
- ---------------------------------------------------------------------------------------------------------------------------------
Pittsburgh, PA, Urban Development Authority Mortgage Rev., 5.5%, 2010 305 310,270
- ---------------------------------------------------------------------------------------------------------------------------------
$372,710
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
State - 5.0% 4.25%, 2012 $500 $511,220
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5.75%, 2013 1,000 1,051,380
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5%, 2014 500 518,695
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5.1%, 2020 1,405 1,433,212
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5.25%, 2021 750 761,108
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5.25%, 2033 795 844,799
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5%, 2034 1,000 1,063,390
- ---------------------------------------------------------------------------------------------------------------------------------
$6,183,804
- ---------------------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 0.3% Delaware County, PA, Industrial Development Authority Rev., 6.2%,
2019 $300 $312,279
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local
Appropriation - 8.2% Delaware Valley, PA, Regional Finance Authority, 5.5%, 2012 $1,000 $1,136,930
- ---------------------------------------------------------------------------------------------------------------------------------
Delaware Valley, PA, Regional Finance Authority, RITES, AMBAC,
9.8655%, 2018(+) 500 657,340
- ---------------------------------------------------------------------------------------------------------------------------------
Northumberland County, PA (Country Careers And Arts Center), 6.65%, 2020 265 276,800
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Convention Center Rev., 6.75%, 2019 250 258,760
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Industrial Development Authority, Economic Development,
AMBAC, 7%, 2007 300 340,632
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Industrial Development Authority, Economic Development,
AMBAC, 5.8%, 2009 400 458,900
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Industrial Development Authority, FSA, 5.125%, 2026 1,000 1,046,030
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Industrial Development Authority, FSA, 5.25%, 2030 750 786,225
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Industrial Development Authority, MBIA, 5.35%, 2012 500 553,115
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority, 5%, 2007 1,585 1,732,310
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., 5.7%, 2025 1,000 1,099,840
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.304%, 2013(+)+ 500 660,660
- ---------------------------------------------------------------------------------------------------------------------------------
State Public School Building Authority, Pennsylvania School
(Brandywine Heights), FGIC, 5%, 2019 1,000 1,069,350
- ---------------------------------------------------------------------------------------------------------------------------------
$10,076,892
- ---------------------------------------------------------------------------------------------------------------------------------
Student Loan Revenue - 1.3% Pennsylvania Higher Education, Capital Acquistion Rev., MBIA, 5%, 2026 $1,500 $1,550,625
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.5% Pittsburgh & Allegheny County, PA, Sales Tax Rev. (Public Auditorium
Hotel Room), AMBAC, 5.25%, 2013 $500 $557,535
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.4% Childrens Trust Fund, Settlement Rev., PR, 5.375%, 2033 $340 $335,325
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corp., 5%, 2021 170 164,050
- ---------------------------------------------------------------------------------------------------------------------------------
$499,375
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special
Tax - 6.8% Allegheny County, PA, Port Authority Special Rev., FGIC, 5%, 2021 $750 $790,073
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Port Authority Special Rev., MBIA, 6.25%, 2009(++) 500 594,300
- ---------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico Highway & Transportation Authority,
5.5%, 2013 500 573,875
- ---------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico Highway & Transportation Authority,
MBIA, 5.5%, 2015 500 587,025
- ---------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico Highway & Transportation Authority,
ROLS, MBIA, 9.896%, 2020+(+) 1,500 2,017,890
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Turnpike Commission, 5.5%, 2015 250 283,203
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Turnpike Commission, AMBAC, 5%, 2041 580 598,369
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Turnpike Commission, MBIA, 5%, 2024 1,775 1,855,727
- ---------------------------------------------------------------------------------------------------------------------------------
Southeastern Pennsylvania Transportation Authority, Special Rev.,
FGIC, 5.25%, 2013 500 556,100
- ---------------------------------------------------------------------------------------------------------------------------------
Southeastern Pennsylvania Transportation Authority, Special Rev.,
FGIC, 5.375%, 2017 500 548,890
- ---------------------------------------------------------------------------------------------------------------------------------
$8,405,452
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Allegheny County, PA, Higher Education Building Authority Rev.
9.9% (Duquesne University), FGIC, 5%, 2034 $1,500 $1,556,265
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, (Carnegie Mellon University), 5.25%, 2032 750 788,648
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, (Chatham College), 5.95%, 2032 335 351,787
- ---------------------------------------------------------------------------------------------------------------------------------
Cumberland County, PA, Municipal Authority (Dickinson College),
AMBAC, 5.55%, 2017 535 591,919
- ---------------------------------------------------------------------------------------------------------------------------------
Delaware County, PA, Authority University Rev. (Villanova
University), FGIC, 5.25%, 2020 1,000 1,089,470
- ---------------------------------------------------------------------------------------------------------------------------------
Delaware County, PA, Authority University Rev. (Villanova
University), FGIC, 5.25%, 2021 1,000 1,084,620
- ---------------------------------------------------------------------------------------------------------------------------------
Lycoming County, PA, (College of Technology), AMBAC, 5.25%, 2032 750 791,438
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev. (Clarion
University Foundation), XLCA, 5%, 2023 1,000 1,049,260
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev. (Drexel
University), 5.2%, 2032 500 520,410
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev.
(Independent Colleges & University), FGIC, 5%, 2024 1,000 1,047,110
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev. (Marywood
University), MBIA, 5.5%, 2018 300 337,530
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev. (Widener
University), 5.375%, 2029 300 305,859
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Public School Building Authority (Delaware County
College), MBIA, 5.75%, 2016 500 581,185
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania State University, 5%, 2029 1,000 1,041,110
- ---------------------------------------------------------------------------------------------------------------------------------
Union County, PA, Higher Educational Facilities Financing Authority,
University Rev. (Bucknell University), 5.25%, 2021 1,000 1,079,800
- ---------------------------------------------------------------------------------------------------------------------------------
$12,216,411
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Pennsylvania Economic Development Financing Authority (Germantown
Dormatories - 0.5% Friends School Project), 5.35%, 2031 $600 $627,426
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Cogeneration - Carbon County, PA, Industrial Development Authority Rev. (Panther
0.2% Creek Partners), 6.65%, 2010 $135 $147,776
- ---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Economic Development Financing Authority, Resources
Recovery Rev. (Northhampton Generating), 6.4%, 2009 150 153,371
- ---------------------------------------------------------------------------------------------------------------------------------
$301,147
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 6.0% Guam Power Authority Rev., RITES, AMBAC, 9.043%, 2014(+)+ $2,170 $2,659,543
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Gas Works Rev., 6%, 2013(++) 1,645 1,965,430
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Gas Works Rev. (1998 General Ordinance), FSA,
5.25%, 2020 1,000 1,081,400
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Gas Works Rev., FSA, 5.5%, 2016 1,000 1,120,890
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Gas Works Rev., FSA, 5.5%, 2018 500 559,335
- ---------------------------------------------------------------------------------------------------------------------------------
$7,386,598
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 9.6% Allegheny County, PA, Sewer Rev., MBIA, 5.75%, 2017 $750 $873,840
- ---------------------------------------------------------------------------------------------------------------------------------
Bucks County, PA, (Suburban Water Co.), FGIC, 5.55%, 2032 1,000 1,063,800
- ---------------------------------------------------------------------------------------------------------------------------------
Delaware County, PA, Water Quality Control Authority, Sewer Rev.,
FGIC, 5%, 2017 1,000 1,067,540
- ---------------------------------------------------------------------------------------------------------------------------------
Delaware County, PA, Water Quality Control Authority, Sewer Rev.,
FGIC, 5%, 2018 750 794,603
- ---------------------------------------------------------------------------------------------------------------------------------
Fairview Township, PA, Sewer Rev., FGIC, 5.05%, 2018 750 797,025
- ---------------------------------------------------------------------------------------------------------------------------------
Lancaster County, PA, Water & Sewer Authority Rev., MBIA, 5%, 2023 1,450 1,526,285
- ---------------------------------------------------------------------------------------------------------------------------------
Lancaster County, PA, Water & Sewer Authority Rev., MBIA, 5%, 2028 440 458,071
- ---------------------------------------------------------------------------------------------------------------------------------
Luzerne County, PA, Industrial Development Authority, 6.05%, 2019 300 307,680
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Water Rev., 5.5%, 2014 1,000 1,072,170
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Water Rev., FGIC, 5.25%, 2014 985 1,111,228
- ---------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Water Rev., MBIA, 6.25%, 2012 550 664,736
- ---------------------------------------------------------------------------------------------------------------------------------
University Area Joint Authority, Sewer Rev., MBIA, 5%, 2023 1,500 1,562,370
- ---------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Water & Power Authority Rev., ASST GTY, 5.3%, 2018 500 539,040
- ---------------------------------------------------------------------------------------------------------------------------------
$11,838,388
- ---------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $114,746,060) $122,409,401
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.5%
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), due 4/07/04 $1,400 $1,400,000
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), due 4/07/04 200 200,000
- ---------------------------------------------------------------------------------------------------------------------------------
New Castle, PA, Area Hospital Authority (Jameson Memorial Hospital),
due 4/07/04 325 325,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $1,925,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $116,671,060) $124,334,401
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (0.6)% (771,220
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $123,563,181
- ---------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF FUND INVESTMENTS - 3/31/04 MFS(R) SOUTH CAROLINA MUNICIPAL BOND
- ---------------------------------------------------------------------------------------------------------------------------------
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 97.1%
- ---------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 3.2% Horry County, SC, "A", FSA, 5.7%, 2027 $2,250 $2,387,565
- ---------------------------------------------------------------------------------------------------------------------------------
Richland Lexington, SC, Airport Rev. (Columbia Airport), "A", AMBAC,
5.7%, 2026 1,000 1,046,500
- ---------------------------------------------------------------------------------------------------------------------------------
Richland Lexington, SC, Airport Rev. (Columbia Airport), "A", FSA,
5%, 2026 1,000 1,030,390
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina State Ports Authority Rev., FSA, 5%, 2016 1,000 1,065,540
- ---------------------------------------------------------------------------------------------------------------------------------
$5,529,995
- ---------------------------------------------------------------------------------------------------------------------------------
Chemicals - 0.5% York County, SC, Industrial Rev., Exempt Facilities Hoechst
Celanese, 5.7%, 2024 $850 $838,857
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 8.1% Berkeley County, SC, Refunding & Improvement, FSA, 5%, 2024 $1,560 $1,635,582
- ---------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, RITES, 9.5771%, 2018 - 2019+(+) 3,750 4,750,155
- ---------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, RITES, MBIA, 10.0771%, 2020+(+) 2,000 2,661,000
- ---------------------------------------------------------------------------------------------------------------------------------
Hilton Head Island, SC, Public Facilities Corp., AMBAC, 5.75%, 2014 1,750 1,854,125
- ---------------------------------------------------------------------------------------------------------------------------------
Hilton Head Island, SC, Rev., MBIA, 5.125%, 2022 1,000 1,068,990
- ---------------------------------------------------------------------------------------------------------------------------------
Horry County, SC, Hospital Fee Special Obligation, 6%, 2015 915 1,050,329
- ---------------------------------------------------------------------------------------------------------------------------------
Richard Lexington Riverbanks, SC, Parks District, FGIC, 5.8%, 2018 1,000 1,143,570
- ---------------------------------------------------------------------------------------------------------------------------------
$14,163,751
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 1.3% Beaufort County, SC, FGIC, 5.25%, 2018 $1,000 $1,081,410
- ---------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, RITES, FSA, 10.6246%, 2016+(+) 850 1,155,626
- ---------------------------------------------------------------------------------------------------------------------------------
$2,237,036
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 10.0% Anderson County, SC, School District, "B", 5.5%, 2018 $1,465 $1,653,589
- ---------------------------------------------------------------------------------------------------------------------------------
Beaufort County, SC, School District, "B", 5.625%, 2018 2,000 2,237,200
- ---------------------------------------------------------------------------------------------------------------------------------
Charleston County, SC, School District, "B", 5%, 2019 735 783,503
- ---------------------------------------------------------------------------------------------------------------------------------
Chesterfield County, SC, School District, FSA, 5%, 2023 3,000 3,139,710
- ---------------------------------------------------------------------------------------------------------------------------------
Georgetown County, SC, School District, 5.25%, 2018 - 2019 2,500 2,721,815
- ---------------------------------------------------------------------------------------------------------------------------------
Orangeburg County, SC, Consolidated School District, FSA, 5.25%, 2020 1,065 1,155,355
- ---------------------------------------------------------------------------------------------------------------------------------
Orangeburg County, SC, Consolidated School District, FSA, 5.375%, 2022 2,050 2,231,138
- ---------------------------------------------------------------------------------------------------------------------------------
Richland County, SC, School District, 5.1%, 2021 1,750 1,853,145
- ---------------------------------------------------------------------------------------------------------------------------------
Spartanburg County, SC, School District 7, 5%, 2019 1,620 1,769,704
- ---------------------------------------------------------------------------------------------------------------------------------
$17,545,159
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue -
Hospitals - 15.3% Charleston County, SC (Care Alliance Health Services), "A", FSA, 5%, 2019 $1,000 $1,065,090
- ---------------------------------------------------------------------------------------------------------------------------------
Charleston County, SC, Hospital Facilities Rev. (Medical Society
Health), MBIA, 5%, 2022(++) 2,450 2,456,076
- ---------------------------------------------------------------------------------------------------------------------------------
Greenville, SC, Hospital Systems, Hospital Facilities Rev., 6%, 2020 3,400 3,987,554
- ---------------------------------------------------------------------------------------------------------------------------------
Greenwood County, SC, Hospital Facilities Rev. (Self Memorial
Hospital), 5.5%, 2021 1,000 1,038,540
- ---------------------------------------------------------------------------------------------------------------------------------
Greenwood County, SC, Hospital Facilities Rev. (Self Regional
Heathcare), "A", FSA, 5%, 2017 1,000 1,077,880
- ---------------------------------------------------------------------------------------------------------------------------------
Horry County, SC, Hospital Facilities Rev. (Conway Hospital, Inc.),
6.75%, 2012 785 795,723
- ---------------------------------------------------------------------------------------------------------------------------------
Lexington County, SC, Health Services District, Inc., Hospital Rev.,
Refunding & Improvement, 5.5%, 2032 1,000 1,035,900
- ---------------------------------------------------------------------------------------------------------------------------------
Lexington County, SC, Health Services District, Inc., Hospital Rev.,
Refunding & Improvement, FSA, 5.125%, 2021 $1,500 $1,587,645
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Anderson Area Medical Center, Inc.), MBIA, 5.25%, 2015 1,750 1,877,418
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Georgetown Memorial Hospital), ASST GTY, 5.25%, 2021 1,500 1,581,915
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Bon Secours Health Systems, Inc.), "A", 5.625%, 2030 1,250 1,273,725
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Georgetown Memorial Hospital), AMBAC, 6%, 2014 1,000 1,183,840
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Georgetown Memorial Hospital), AMBAC, 5%, 2023 1,000 1,031,890
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs Economic Development Authority, Hospital
Facililties Rev. (Palmetto Health Alliance), 6.25%, 2031 750 792,578
- ---------------------------------------------------------------------------------------------------------------------------------
Spartanburg County, SC, Health Service Rev., AMBAC, 5.3%, 2020 - 2025 3,500 3,650,040
- ---------------------------------------------------------------------------------------------------------------------------------
Spartanburg County, SC, Health Service Rev., FSA, 5.25%, 2032 2,250 2,365,988
- ---------------------------------------------------------------------------------------------------------------------------------
$26,801,802
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Greenville County, SC, Hospital Rev., 1st Mortgage Facilities
Term Care - 0.8% Chestnut Hill, "A", 8%, 2015 $1,585 $1,417,006
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Calhoun County, SC, Solid Waste Disposal Facilities Rev. (Carolina
Other - 0.7% Eastman Co.), 6.75%, 2017(++) $1,000 $1,284,250
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Darlington County, SC, Industrial Development Rev. (Sonoco Products
Paper - 2.0% Co.), 6.125%, 2025 $1,500 $1,573,830
- ---------------------------------------------------------------------------------------------------------------------------------
Florence County, SC, Industrial Development Rev. (Stone Container
Corp.), 7.375%, 2007 335 339,439
- ---------------------------------------------------------------------------------------------------------------------------------
Georgetown County, SC, Environmental Improvement Rev. (International
Paper), "A", 5.3%, 2028 500 498,725
- ---------------------------------------------------------------------------------------------------------------------------------
Richland County, SC, Environmental Improvement Rev. (International
Paper), "A", 6.1%, 2023 1,000 1,079,750
- ---------------------------------------------------------------------------------------------------------------------------------
$3,491,744
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment & South Carolina Jobs & Economic Development Authority (Myrtle Beach
Tourism - 1.1% Convention), "B", MBIA, 5.125%, 2018 - 2020 $1,795 $1,915,912
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing South Carolina Housing, Finance & Development Authority (Hunting
Revenue - 1.4% Ridge Apartments), 6.75%, 2025 $1,000 $1,030,910
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Housing, Finance & Development Authority (Runaway Bay
Apartments), 6.125%, 2015 1,300 1,356,121
- ---------------------------------------------------------------------------------------------------------------------------------
$2,387,031
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - South Carolina Housing, Finance & Development Authority Rev., "A",
State - 2.1% AMBAC, 4.85%, 2023 $985 $981,326
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Housing, Finance & Development Authority Rev., "A-2",
FSA, 6%, 2020 560 567,986
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Housing, Finance & Development Authority Rev., "A-2",
FSA, 5.35%, 2024 2,000 2,049,640
- ---------------------------------------------------------------------------------------------------------------------------------
$3,598,952
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local
Appropriation - 8.6% Berkeley County, SC, School District, 5%, 2020 $2,000 $2,124,780
- ---------------------------------------------------------------------------------------------------------------------------------
Berkeley County, SC, School District (Berkeley School Facilities
Group, Inc.), AMBAC, 5%, 2016 500 538,230
- ---------------------------------------------------------------------------------------------------------------------------------
Greenville County, SC (University Center), "A", AMBAC, 5.25%, 2019 1,000 1,079,950
- ---------------------------------------------------------------------------------------------------------------------------------
Greenville County, SC, Public Facilities Corp., Certificates of
Participation (Courthouse Project), AMBAC, 5%, 2017 1,695 1,826,464
- ---------------------------------------------------------------------------------------------------------------------------------
North Charleston, SC, Municipal Golf Course Mortgage Rev., AMBAC,
5.5%, 2019(++) 1,000 1,158,660
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., 5.75%, 2030 1,000 1,070,470
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2013 -
2019+(+) 2,675 3,526,445
- ---------------------------------------------------------------------------------------------------------------------------------
Richland County, SC, Certificates of Participation, 0%, 2005 1,160 1,148,458
- ---------------------------------------------------------------------------------------------------------------------------------
Richland County, SC, Certificates of Participation, FGIC, 0%, 2006 1,160 1,125,780
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Water Resources Authority Rev. (Local Government
Program), "A", 7.25%, 2020 685 691,624
- ---------------------------------------------------------------------------------------------------------------------------------
Spartanburg, SC, Public Facilities Corp. (Renaissance Park), AMBAC,
5.125%, 2025 685 718,229
- ---------------------------------------------------------------------------------------------------------------------------------
$15,009,090
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.6% Virgin Islands Public Finance Authority, FSA, 5.25%, 2021 $1,000 $1,096,880
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.6% South Carolina Tobacco Settlement Rev. Management Authority, 6.375%, 2028 $1,000 $960,050
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special South Carolina Transportation Infrastructure Rev., "A", AMBAC,
Tax - 0.9% 5.375%, 2018 $1,000 $1,102,020
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Transportation Infrastructure Rev., "A", AMBAC, 5%, 2023 500 522,230
- ---------------------------------------------------------------------------------------------------------------------------------
$1,624,250
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges -
8.1% Clemson University, University Rev., AMBAC, 6.25%, 2015 $1,250 $1,472,263
- ---------------------------------------------------------------------------------------------------------------------------------
Coastal Carolina University, SC, Rev., MBIA, 6.875%, 2026(++) 1,000 1,029,220
- ---------------------------------------------------------------------------------------------------------------------------------
College Charleston, SC, Higher Education Facility Rev., "A", FGIC,
5.25%, 2028 2,435 2,583,559
- ---------------------------------------------------------------------------------------------------------------------------------
Greenville County, SC, Certificates of Participation, Greenville
Technical College, AMBAC, 5%, 2017 1,000 1,071,470
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Educational Facilities Authority (Furman University),
AMBAC, 5.375%, 2020 1,245 1,367,284
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Educational Facilities Authority (Furman University),
AMBAC, 5.5%, 2030 2,000 2,204,640
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Student
Housing Rev. (FMU Francis Marion University), "A", MBIA, 5%, 2034 1,945 2,028,577
- ---------------------------------------------------------------------------------------------------------------------------------
University of South Carolina, University Rev., "A", FGIC, 5.625%, 2020 1,555 1,759,374
- ---------------------------------------------------------------------------------------------------------------------------------
University of South Carolina, University Rev., MBIA, 5.75%, 2026 515 561,613
- ---------------------------------------------------------------------------------------------------------------------------------
$14,078,000
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal Camden, SC, Public Utility Rev., Refunding & Improvement, MBIA,
Owned - 10.8% 5.5%, 2017 $1,500 $1,665,345
- ---------------------------------------------------------------------------------------------------------------------------------
Easley, SC, Utility Rev., FSA, 5.25%, 2019 1,315 1,443,646
- ---------------------------------------------------------------------------------------------------------------------------------
Easley, SC, Utility Rev., FSA, 5%, 2021 - 2027 2,000 2,109,750
- ---------------------------------------------------------------------------------------------------------------------------------
Greenwood, SC, Combined Public Utility, Refunding & Improvement
Systems, MBIA, 5%, 2021 - 2023 475 501,411
- ---------------------------------------------------------------------------------------------------------------------------------
Orangeburg County, SC, Solid Waste Disposal Facilities Rev.,
Electric & Gas, 5.7%, 2024 2,000 2,016,740
- ---------------------------------------------------------------------------------------------------------------------------------
Piedmont, SC, Municipal Power Agency, FGIC, 6.25%, 2021 4,600 5,732,106
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority, RITES, FSA, 9.0063%, 2015+(+) $1,000 $1,219,140
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Public Service Authority, "A", MBIA, 5.5%, 2018 200 224,564
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Public Service Authority, "B", AMBAC, 5.5%, 2023 1,000 1,082,600
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Public Service Authority, "B", FGIC, 5.875%, 2023 500 544,495
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Public Service Authority, "B", FSA, 5.125%, 2037 1,500 1,555,740
- ---------------------------------------------------------------------------------------------------------------------------------
South Carolina Public Service Authority, "D", FSA, 5%, 2018 750 803,303
- ---------------------------------------------------------------------------------------------------------------------------------
$18,898,840
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 21.0% Anderson County, SC, Joint Municipal Water, FSA, 5%, 2032 $1,000 $1,035,720
- ---------------------------------------------------------------------------------------------------------------------------------
Anderson, SC, Water & Sewer Systems Rev., FGIC, 5.125%, 2032 2,000 2,097,180
- ---------------------------------------------------------------------------------------------------------------------------------
Anderson, SC, Water & Sewer Systems Rev., MBIA, 5%, 2021 1,690 1,799,766
- ---------------------------------------------------------------------------------------------------------------------------------
Charleston, SC, Waterworks & Sewer Rev., Capital Improvement, "B",
5%, 2028 1,000 1,041,820
- ---------------------------------------------------------------------------------------------------------------------------------
Charleston, SC, Waterworks & Sewer Rev., Refunding Systems, 5.25%, 2018 1,000 1,092,570
- ---------------------------------------------------------------------------------------------------------------------------------
Columbia, SC, Waterworks & Sewer Systems Rev., 0%, 2005 - 2006 11,575 11,273,560
- ---------------------------------------------------------------------------------------------------------------------------------
Columbia, SC, Waterworks & Sewer Systems Rev., 6%, 2015(++) 2,000 2,356,840
- ---------------------------------------------------------------------------------------------------------------------------------
Greenville, SC, Stormwater Systems, FSA, 5%, 2022 595 630,004
- ---------------------------------------------------------------------------------------------------------------------------------
Greenville, SC, Waterworks Rev., 5.25%, 2020 860 937,460
- ---------------------------------------------------------------------------------------------------------------------------------
Greenville, SC, Waterworks Rev., 5.5%, 2022 1,000 1,100,450
- ---------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Aqueduct & Sewer Authority Rev., 9%, 2009(++) 530 571,149
- ---------------------------------------------------------------------------------------------------------------------------------
Rock Hill, SC, Utility Systems Rev., Refunding & Improvement, "A",
FSA, 5.375%, 2023 500 540,805
- ---------------------------------------------------------------------------------------------------------------------------------
Spartanburg, SC, San Sewer District, Sewer Systems Rev., "B", MBIA,
5%, 2034 3,000 3,124,710
- ---------------------------------------------------------------------------------------------------------------------------------
Spartanburg, SC, Waterworks Rev., FGIC, 6.05%, 2018(++) 2,750 3,020,518
- ---------------------------------------------------------------------------------------------------------------------------------
Western Carolina Regional Sewer Authority Rev., AMBAC, 0%, 2007 4,000 3,770,920
- ---------------------------------------------------------------------------------------------------------------------------------
York County, SC, Water & Sewer Rev., Refunding & Capital
Improvement, MBIA, 5%, 2024 - 2027 2,270 2,372,624
- ---------------------------------------------------------------------------------------------------------------------------------
$36,766,096
- ---------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $154,160,925) $169,644,701
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.9%
- ---------------------------------------------------------------------------------------------------------------------------------
California State, Department of Water Resources, Power Supply Rev.,
due 4/01/04 $1,500 $1,500,000
- ---------------------------------------------------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority (Local Government
Public Improvement), due 4/07/04 100 100,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $1,600,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $155,760,925) $171,244,701
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 2.0% 3,483,385
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $174,728,086
- ---------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - 3/31/04 MFS(R) TENNESSEE MUNICIPAL BOND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 98.3%
- ---------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port Memphis-Shelby County, TN, Airport Authority Facilities Rev., AMBAC,
Revenue - 2.0% 6%, 2024 $1,165 $1,292,894
- ---------------------------------------------------------------------------------------------------------------------------------
Memphis-Shelby County, TN, Airport Authority Facilities Rev., FSA,
5.125%, 2021 1,500 1,552,275
- ---------------------------------------------------------------------------------------------------------------------------------
$2,845,169
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 11.9% Commonwealth of Puerto Rico, 5.4%, 2006(++) $3,000 $3,307,140
- ---------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, Refunding Public Improvement, FSA, 5%, 2024 2,000 2,095,080
- ---------------------------------------------------------------------------------------------------------------------------------
Dickson County, TN, FGIC, 5%, 2019 1,430 1,548,890
- ---------------------------------------------------------------------------------------------------------------------------------
Knox County, TN, Health, Education & Housing Facilities Board Rev.,
5%, 2018 1,500 1,619,355
- ---------------------------------------------------------------------------------------------------------------------------------
Lincoln County, TN, FGIC, 5.25%, 2017 - 2018 2,085 2,360,927
- ---------------------------------------------------------------------------------------------------------------------------------
Lincoln County, TN, School Improvement, FGIC, 5.8%, 2007(++) 2,000 2,256,360
- ---------------------------------------------------------------------------------------------------------------------------------
Memphis, TN, 5%, 2017 1,455 1,634,474
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam County, TN, FGIC, 5.25%, 2020 2,000 2,260,260
- ---------------------------------------------------------------------------------------------------------------------------------
$17,082,486
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 5.9% Chattanooga, TN, Public Improvement, 5%, 2021 $2,570 $2,718,983
- ---------------------------------------------------------------------------------------------------------------------------------
Knoxville, TN, Public Improvement, 5%, 2024 350 363,209
- ---------------------------------------------------------------------------------------------------------------------------------
Knoxville, TN, Recreational Facilities Improvement, 5.5%, 2017 645 721,394
- ---------------------------------------------------------------------------------------------------------------------------------
State of Tennessee, FSA, 5%, 2018 1,000 1,077,500
- ---------------------------------------------------------------------------------------------------------------------------------
Williamson County, TN, Public Improvement, 5.375%, 2010(++) 1,500 1,715,880
- ---------------------------------------------------------------------------------------------------------------------------------
Williamson County, TN, Public Improvement, 5%, 2018 1,760 1,893,338
- ---------------------------------------------------------------------------------------------------------------------------------
$8,490,304
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 17.1% Fayette County, TN, School District, MBIA, 5.6%, 2008(++) $1,215 $1,372,270
- ---------------------------------------------------------------------------------------------------------------------------------
Franklin, TN, Special School District, Capital Appreciation, FSA,
0%, 2020 2,000 959,800
- ---------------------------------------------------------------------------------------------------------------------------------
Gibson County, TN, School District, MBIA, 5.75%, 2009(++) 455 527,422
- ---------------------------------------------------------------------------------------------------------------------------------
Gibson County, TN, School District, MBIA, 5.75%, 2016 190 216,070
- ---------------------------------------------------------------------------------------------------------------------------------
Giles County, TN, School Improvement, FGIC, 5.75%, 2010(++) 1,980 2,306,740
- ---------------------------------------------------------------------------------------------------------------------------------
Greene County, TN, Rural School, FGIC, 5%, 2020 - 2021 2,540 2,675,497
- ---------------------------------------------------------------------------------------------------------------------------------
Milan, TN, Special School District, MBIA, 5%, 2021 1,000 1,050,470
- ---------------------------------------------------------------------------------------------------------------------------------
Roane County, TN, Rural School, FGIC, 5.6%, 2019 - 2020 1,890 2,133,337
- ---------------------------------------------------------------------------------------------------------------------------------
Rutherford County, TN, School & Public Improvement, 5%, 2022 1,510 1,582,661
- ---------------------------------------------------------------------------------------------------------------------------------
Rutherford County, TN, School District, 5.875%, 2010(++) 1,100 1,293,930
- ---------------------------------------------------------------------------------------------------------------------------------
Rutherford County, TN, School Improvement, 0%, 2007(++) 1,500 893,580
- ---------------------------------------------------------------------------------------------------------------------------------
Rutherford County, TN, School Improvement, 5.875%, 2010(++) 2,000 2,352,600
- ---------------------------------------------------------------------------------------------------------------------------------
Rutherford County, TN, School Improvement, 5%, 2020 1,000 1,051,710
- ---------------------------------------------------------------------------------------------------------------------------------
State of Tennessee, School Bond Authority (Higher Education
Facilities), FSA, 5%, 2017 1,000 1,074,270
- ---------------------------------------------------------------------------------------------------------------------------------
State of Tennessee, School Bond Authority (Higher Education
Facilities), FSA, 5.25%, 2029 3,000 3,182,490
- ---------------------------------------------------------------------------------------------------------------------------------
Williamson County, TN, Rural School, 6.125%, 2010(++) 1,575 1,865,714
- ---------------------------------------------------------------------------------------------------------------------------------
$24,538,561
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Jackson, TN, Hospital Rev. (Jackson-Madison County General
Hospitals - 11.3% Hospital), AMBAC, 5%, 2018 $1,000 $1,066,110
- ---------------------------------------------------------------------------------------------------------------------------------
Johnson City, TN, Health & Education Financing Authority Rev.
(Johnson City Medical Center Hospital), MBIA, 5.25%, 2016(++) 1,375 1,414,779
- ---------------------------------------------------------------------------------------------------------------------------------
Johnson City, TN, Health & Education Financing Authority Rev.
(Johnson City Medical Center Hospital), MBIA, 5%, 2018 1,500 1,596,045
- ---------------------------------------------------------------------------------------------------------------------------------
Knox County, TN, Health Educational Housing Facilities Board,
Hospital Facilities Rev. (Baptist Health Systems), 6.5%, 2031 800 832,344
- ---------------------------------------------------------------------------------------------------------------------------------
Knox County, TN, Health, Education & Housing Facilities Board Rev.
(Catholic Healthcare Partners), 5.25%, 2030 1,000 1,031,390
- ---------------------------------------------------------------------------------------------------------------------------------
Knox County, TN, Health, Education & Housing Facilities Board Rev.
(East Tennessee Children's Hospital), 5.75%, 2033 450 455,918
- ---------------------------------------------------------------------------------------------------------------------------------
Knox County, TN, Health, Education & Housing Facilities Board Rev.
(Fort Sanders), MBIA, 5.75%, 2014 3,250 3,803,800
- ---------------------------------------------------------------------------------------------------------------------------------
Knox County, TN, Health, Education & Housing Facilities Board Rev.,
FSA, 5%, 2022 1,000 1,044,780
- ---------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN, Health,
Educational & Housing Facilities Board Rev. (Adventist Health
System), 5.25%, 2020 1,000 1,012,500
- ---------------------------------------------------------------------------------------------------------------------------------
Shelby County, TN, Health Educational & Housing Facilities Board
Rev. (St. Judes Children's Research), 5.5%, 2020 1,750 1,850,380
- ---------------------------------------------------------------------------------------------------------------------------------
Shelby County, TN, Health, Educational & Housing Facilities Board
Rev. (Methodist Healthcare), 6.5%, 2021 1,000 1,106,600
- ---------------------------------------------------------------------------------------------------------------------------------
Springfield, TN, Health & Higher Educational Facilities Hospital
Rev. (Northcrest Medical Center), 5.25%, 2013 1,000 1,026,500
- ---------------------------------------------------------------------------------------------------------------------------------
$16,241,146
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Shelby County, TN, Health Educational Rev. (Germantown Village),
Term Care - 0.6% 7.25%, 2034 $500 $502,820
- --------------------------------------------------------------------------------------------------------------------------------
Shelby County, TN, Nursing Home Rev. (Beverly Enterprises, Inc.),
7.4%, 2011 270 270,232
- --------------------------------------------------------------------------------------------------------------------------------
$773,052
- --------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Other - 2.0% Hardeman County, TN, Correctional Facilities Corp., 7.75%, 2017 $1,000 $1,049,480
- --------------------------------------------------------------------------------------------------------------------------------
Humphreys County, TN, Industrial Rev. (Board Inland Container
Corp.), 6.7%, 2024 1,750 1,792,000
- --------------------------------------------------------------------------------------------------------------------------------
$2,841,480
- --------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - McMinn County, TN, Industrial Development Board, Pollution Control
Paper - 0.7% Rev. (Bowater, Inc.), 7.625%, 2016 $1,000 $1,001,510
- --------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Bristol, TN, Industrial Development Authority Rev. (Kmart Corp.),
Retail - 0.7% 7.5%, 2004(++) $875 $916,554
- --------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment & Memphis-Shelby County, TN (Memphis Sports Arena), AMBAC, 5.125%,
Tourism - 2.7% 2028 $2,000 $2,097,140
- --------------------------------------------------------------------------------------------------------------------------------
Memphis-Shelby County, TN (Memphis Sports Arena), AMBAC, 5.35%, 2029 1,665 1,792,056
- --------------------------------------------------------------------------------------------------------------------------------
$3,889,196
- --------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Chattanooga, TN, Health, Educational & Housing Facilities (Rainbow
Revenue - 4.0% Creek), GNMA, 6.125%, 2019 $465 $497,862
- --------------------------------------------------------------------------------------------------------------------------------
Franklin, TN, Industrial Development Rev. (Landings Apartments),
FSA, 6%, 2026 1,000 1,044,640
- --------------------------------------------------------------------------------------------------------------------------------
Franklin, TN, Industrial Development Rev. (Sussex Downs), FHA,
6.75%, 2004(++) 1,000 1,039,010
- --------------------------------------------------------------------------------------------------------------------------------
Memphis, TN, Health & Educational Facilities Board Rev. (Hickory
Point Apartments), MBIA, 5.85%, 2020 1,000 1,048,270
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN, Health,
Educational & Housing Facilities Board Rev. (Berkshire Place), GNMA,
6%, 2023 500 523,465
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN, Health,
Educational & Housing Facilities Board Rev. (Herman Street), FHA,
7.25%, 2032 495 501,192
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Authority, 5%, 2020 1,000 1,062,180
- --------------------------------------------------------------------------------------------------------------------------------
$5,716,619
- --------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 8.9% Tennessee Housing Development Agency Mortgage Finance, 5.2%, 2023 $1,500 $1,547,625
- --------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Mortgage Finance, 5.35%, 2034 2,000 2,028,940
- --------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
5.45%, 2014 2,535 2,658,936
- --------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
4.45%, 2017 1,305 1,303,643
- --------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
4.55%, 2018 1,265 1,263,620
- --------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
6%, 2020 625 650,138
- --------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
5.05%, 2027 1,000 1,011,340
- --------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
FSA, 5.4%, 2032 930 947,196
- --------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
FSA, 4.15%, 2033 905 912,321
- --------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
MBIA, 6.125%, 2020 410 425,859
- --------------------------------------------------------------------------------------------------------------------------------
$12,749,618
- --------------------------------------------------------------------------------------------------------------------------------
State & Local
Appropriation - 3.1% Chattanooga,TN, Industrial Development Board, AMBAC, 5.75%, 2018 $1,000 $1,153,430
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., 5.5%, 2021 1,000 1,139,770
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., 5.75%, 2030 2,000 2,140,940
- --------------------------------------------------------------------------------------------------------------------------------
$4,434,140
- --------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.5% Virgin Islands Public Finance Authority Rev., 5.875%, 2018 $730 $759,134
- --------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.7% Guam Economic Development Authority, 5.5%, 2041 $350 $338,783
- --------------------------------------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corp., 5%, 2031 750 683,723
- --------------------------------------------------------------------------------------------------------------------------------
$1,022,506
- --------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Metropolitan Government of Nashville & Davidson County, TN, Health,
4.2% Educational & Housing Facilities Board Rev. (McKendree Village,
Inc.),
5.125%, 2020 $1,000 $1,041,800
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN, Health,
Educational & Housing Facilities Board Rev. (Meharry Medical
College), AMBAC, 5%, 2024 3,750 3,882,863
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN, Health,
Educational & Housing Facilities Board Rev. (Vanderbilt University),
5%, 2019 1,000 1,056,690
- --------------------------------------------------------------------------------------------------------------------------------
$5,981,353
- --------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 6.8% Dickson, TN, Electrical Systems Rev., FSA, 5%, 2016 $1,490 $1,640,833
- --------------------------------------------------------------------------------------------------------------------------------
Jackson, TN, Electrical Systems Rev., MBIA, 5%, 2018 1,000 1,048,850
- --------------------------------------------------------------------------------------------------------------------------------
Lawrenceburg, TN, Electrical Rev., MBIA, 5.5%, 2009(++) 1,255 1,445,409
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN,
Electrical Rev., 5.125%, 2021 1,500 1,592,070
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN,
Electrical Rev., MBIA, 0%, 2012 3,305 2,440,974
- --------------------------------------------------------------------------------------------------------------------------------
West Knox County Utility District, TN, Water & Sewer Rev.
(Hallsdale-Powell), FGIC, 5%, 2027 1,500 1,557,570
- --------------------------------------------------------------------------------------------------------------------------------
$9,725,706
- --------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 15.2% Clarksville, TN, Water, Sewer & Gas Rev., FSA, 5%, 2022 $445 $464,807
- --------------------------------------------------------------------------------------------------------------------------------
Harpeth Valley, TN, Utilities Improvements Rev., MBIA, 5.05%, 2020 1,925 2,040,943
- --------------------------------------------------------------------------------------------------------------------------------
Hendersonville, TN, Utilities Improvement Rev., FGIC, 5.5%, 2018 1,125 1,255,556
- --------------------------------------------------------------------------------------------------------------------------------
Madison, TN, Utility Waterworks Rev., MBIA, 5%, 2019 2,750 2,900,288
- --------------------------------------------------------------------------------------------------------------------------------
Memphis, TN, Sewage Systems Rev., 5.75%, 2016 - 2020 2,520 2,827,410
- --------------------------------------------------------------------------------------------------------------------------------
Rutherford County, TN, Water Rev., MBIA, 5%, 2027 770 810,494
- --------------------------------------------------------------------------------------------------------------------------------
West Knox Utility District, TN, Water & Sewer Rev., MBIA, 0%, 2004 -
2007(++) 5,760 5,516,641
- --------------------------------------------------------------------------------------------------------------------------------
White House Utility District, TN, Water & Sewer Rev. (Robertson &
Sumner Counties Waterworks), FGIC, 0%, 2014 3,590 2,443,605
- --------------------------------------------------------------------------------------------------------------------------------
White House Utility District, TN, Water & Sewer Rev. (Robertson &
Sumner Counties Waterworks), FSA, 6%, 2010(++) 1,000 1,176,050
- --------------------------------------------------------------------------------------------------------------------------------
White House Utility District, TN, Water & Sewer Rev. (Robertson &
Sumner Counties Waterworks), FSA, 5%, 2021 - 2032 2,300 2,390,581
- --------------------------------------------------------------------------------------------------------------------------------
$21,826,375
- --------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $130,145,968) $140,834,909
- --------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.3%
- --------------------------------------------------------------------------------------------------------------------------------
Knoxville, TN, Utilities Board Rev., due 4/01/04 $190 $190,000
- --------------------------------------------------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority, due 4/07/04 1,245 1,245,000
- --------------------------------------------------------------------------------------------------------------------------------
South Blount County, TN, Utility District Rev., due 4/01/04 400 400,000
- --------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $1,835,000
- --------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $131,980,968) $142,669,909
- --------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.4% 626,073
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $143,295,982
- --------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - 3/31/04 MFS(R) VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 98.2%
- --------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- --------------------------------------------------------------------------------------------------------------------------------
Airport & Port Metropolitan Washington, DC, Airport Authority Rev., "A", FGIC,
Revenue - 7.1% 5.125%, 2024 $1,000 $1,039,530
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Washington, DC, Airport Authority Rev., "A", FGIC, 5%,
2025 705 725,600
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Washington, DC, Airport Authority Rev., "B", 5.5%, 2016 2,465 2,627,320
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Washington, DC, Airport Authority Rev., "B", 5.75%,
2020 11,000 11,739,090
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Washington, DC, Airport Authority Rev., "B", MBIA, 5%,
2018 2,000 2,065,640
- --------------------------------------------------------------------------------------------------------------------------------
Norfolk, VA, Airport Authority Rev., "A", FGIC, 5.375%, 2017 1,755 1,937,889
- --------------------------------------------------------------------------------------------------------------------------------
Norfolk, VA, Airport Authority Rev., "A", FGIC, 5%, 2022 3,000 3,123,600
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority, Airport Rev., "B", 5.125%, 2027 720 741,427
- --------------------------------------------------------------------------------------------------------------------------------
$24,000,096
- --------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 1.0% Bristol, VA, MBIA, 5.3%, 2018 $1,250 $1,368,113
- --------------------------------------------------------------------------------------------------------------------------------
Lebanon, VA, 6.375%, 2006(++) 1,625 1,819,756
- --------------------------------------------------------------------------------------------------------------------------------
$3,187,869
- --------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 14.7% Alexandria, VA, Public Improvement, 5.5%, 2018 $2,980 $3,382,985
- --------------------------------------------------------------------------------------------------------------------------------
Chesterfield County, VA, 5%, 2020 2,015 2,138,338
- --------------------------------------------------------------------------------------------------------------------------------
Chesterfield County, VA, 6%, 2020 1,900 2,236,585
- --------------------------------------------------------------------------------------------------------------------------------
Hampton, VA, Public Improvement, 6%, 2018 3,280 3,849,113
- --------------------------------------------------------------------------------------------------------------------------------
Hampton, VA, Public Improvement, 6%, 2019 3,480 4,073,618
- --------------------------------------------------------------------------------------------------------------------------------
Loudoun County, VA, Public Improvement, "B", 5.375%, 2016 2,650 2,950,484
- --------------------------------------------------------------------------------------------------------------------------------
Lynchburg, VA, Public Improvement, 5.6%, 2020 1,765 1,993,179
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Municipal Finance Agency, RITES, FSA, 10.6246%, 2016+(+) 1,105 1,502,314
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Municipal Finance Agency, RITES, FSA, 9.6169%, 2017+(+) 615 783,239
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, 0%, 2006 1,000 974,130
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, 0%, 2006 2,500 2,435,325
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, 0%, 2008 2,000 1,824,900
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, "A", FSA, 5.125%, 2024 5,000 5,233,700
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, "B", 0%, 2007 5,280 4,982,314
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, "B", 0%, 2008 5,270 4,808,612
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, "B", 0%, 2009 5,175 4,514,101
- --------------------------------------------------------------------------------------------------------------------------------
Suffolk, VA, Public Improvement, 5.5%, 2020 1,880 2,096,632
- --------------------------------------------------------------------------------------------------------------------------------
$49,779,569
- --------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 1.3% Culpeper County, VA, School District, FSA, 6%, 2010(++) $1,000 $1,185,730
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority Rev., "B", 5.25%, 2021 3,075 3,240,681
- --------------------------------------------------------------------------------------------------------------------------------
$4,426,411
- --------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Albemarle County, VA, Industrial Development Authority, Hospital
Hospitals - 15.3% Rev. (Martha Jefferson Hospital), 5.25%, 2023 $3,000 $3,050,070
- --------------------------------------------------------------------------------------------------------------------------------
Arlington County, VA, Industrial Development Authority Rev.
(Virginia, Hospital Center Arlington Health Systems), 5.25%, 2021 2,600 2,697,136
- --------------------------------------------------------------------------------------------------------------------------------
Augusta County, VA, Industrial Development Authority Rev., Augusta
Health Care, Inc., 5.25%, 2020 1,325 1,445,747
- --------------------------------------------------------------------------------------------------------------------------------
Fredericksburg, VA, Industrial Development Rev. (Medicorp Health
Systems), "B", 5.125%, 2033 $750 $756,323
- --------------------------------------------------------------------------------------------------------------------------------
Fredericksburg, VA, Industrial Development Rev. (Medicorp Health
Systems), AMBAC, 5.25%, 2023 11,000 11,728,420
- --------------------------------------------------------------------------------------------------------------------------------
Henrico County, VA, Economic Development Authority Rev. (Bon Secours
Health Systems, Inc.), "A", 5.6%, 2030 2,000 2,075,180
- --------------------------------------------------------------------------------------------------------------------------------
Henrico County, VA, Industrial Development Authority Rev. (Bon
Secours Health Systems, Inc.), MBIA, 6.25%, 2020 1,500 1,855,230
- --------------------------------------------------------------------------------------------------------------------------------
Loudoun County, VA, Industrial Development Authority, Hospital Rev.
(Loudoun Hospital Center), "A", 6.1%, 2032 1,000 1,049,670
- --------------------------------------------------------------------------------------------------------------------------------
Lynchburg, VA, Industrial Development Authority Rev., 5.2%, 2018 1,000 1,035,030
- --------------------------------------------------------------------------------------------------------------------------------
Medical College of Virginia, Hospital Authority Rev., MBIA, 5.125%, 2018 3,000 3,180,810
- --------------------------------------------------------------------------------------------------------------------------------
Peninsula Ports Authority Rev. (Whittaker Memorial), FHA, 8.7%, 2023 2,070 2,576,508
- --------------------------------------------------------------------------------------------------------------------------------
Peninsula Ports Authority, VA, Health Care Rev. (Riverside Health
System), 5%, 2018 3,580 3,704,942
- --------------------------------------------------------------------------------------------------------------------------------
Prince William County, VA, Industrial Development Authority,
Hospital Rev. (Potomac Hospital Corp.), 5.2%, 2026 1,000 1,016,560
- --------------------------------------------------------------------------------------------------------------------------------
Roanoke, VA, Industrial Development Authority, Hospital Rev.
(Roanoke Memorial Hospital), "B", MBIA, 6.125%, 2017 6,000 7,299,600
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Beach, VA, Development Authority Rev. (Sentara Health
System), 4.75%, 2018 3,750 3,851,438
- --------------------------------------------------------------------------------------------------------------------------------
Winchester, VA, Industrial Development Authority Rev. (Winchester
Medical Center), RIBS, AMBAC, 11.831%, 2014(+) 3,900 4,400,526
- --------------------------------------------------------------------------------------------------------------------------------
$51,723,190
- --------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Henrico County, VA, Economic Development Authority, Residential Care
Term Care - 0.2% Facilities (United Methodist Homes), "A", 6.7%, 2027 $750 $770,318
- --------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Environmental Services - Charles City County, VA, Industrial Development Authority, Solid
1.0% Waste Disposal Facility Rev. (Waste Management, Inc.), 6.25%, 2027 $1,500 $1,698,750
- --------------------------------------------------------------------------------------------------------------------------------
Henrico County, VA, Industrial Development Authority Rev. (Browning
Ferris), 5.45%, 2014 1,750 1,632,330
- --------------------------------------------------------------------------------------------------------------------------------
$3,331,080
- --------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Loudoun County, VA, Industrial Development Authority Rev. (Dulles
Other - 0.9% Airport Marriot Hotel), 7.125%, 2015 $2,000 $2,031,960
- --------------------------------------------------------------------------------------------------------------------------------
Peninsula Ports Authority, Virginia Coal (Dominion Terminal
Associates), 6%, 2033 1,000 1,042,560
- --------------------------------------------------------------------------------------------------------------------------------
$3,074,520
- --------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Bedford County, VA, Industrial Development Authority Rev. (Nekooska
Paper - 3.2% Packaging Corp.), 5.6%, 2025 $1,000 $895,730
- --------------------------------------------------------------------------------------------------------------------------------
Hopewell, VA, Industrial Development Authority, Resources Recovery
Rev. (Stone Container Corp.), 8.25%, 2016 1,250 1,266,738
- --------------------------------------------------------------------------------------------------------------------------------
Isle Wight County, VA, Industrial Development Authority, Solid Waste
Disposal Facilities Rev. (Union Camp Corp.), 6.55%, 2024 4,000 4,098,800
- --------------------------------------------------------------------------------------------------------------------------------
Isle Wight County, VA, Industrial Development Authority, Solid Waste
Disposal Facilities Rev. (Union Camp Corp.), 6.1%, 2027 2,750 2,853,345
- --------------------------------------------------------------------------------------------------------------------------------
West Point, VA, Industrial Development Authority, Solid Waste
Disposal Rev. (Chesapeake Corp.), "A", 6.375%, 2019 1,900 1,769,660
- --------------------------------------------------------------------------------------------------------------------------------
$10,884,273
- --------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Rockbridge County, VA, Industrial Development Authority Rev.
Other - 0.1% (Virginia Horse Center), 6.85%, 2021 $500 $474,435
- --------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Alexandria, VA, Redevelopment & Housing Finance Authority Rev.,
Revenue - 5.5% (Portals West Apartments), "B", 9%, 2018 $3,740 $3,738,841
- --------------------------------------------------------------------------------------------------------------------------------
Arlington County, VA, Industrial Development Authority Rev.
(Colonial Village), FNMA, 5.15%, 2031 3,000 3,098,340
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Housing Development Authority Rev., "B", 5.95%, 2016 1,905 2,011,432
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Housing Development Authority Rev., "F", 6.5%, 2013 2,300 2,349,588
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Housing Development Authority Rev., "G", 5.625%, 2020 2,000 2,089,920
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Housing Development Authority Rev., "I", 5.15%, 2017 3,000 3,090,930
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Housing Development Authority Rev., "Z", 4.85%, 2033 2,000 2,021,340
- --------------------------------------------------------------------------------------------------------------------------------
$18,400,391
- --------------------------------------------------------------------------------------------------------------------------------
Parking - 0.5% Norfolk, VA, Parking Systems Rev., MBIA, 5%, 2020 $1,630 $1,725,437
- --------------------------------------------------------------------------------------------------------------------------------
State & Local
Appropriation - 22.7% Blue Ridge, VA, Regional Jail Authority, MBIA, 5.2%, 2021 $1,830 $1,945,876
- --------------------------------------------------------------------------------------------------------------------------------
Caroline County, VA, Industrial Development Authority, Lease Rev.,
AMBAC, 5.125%, 2034 1,000 1,048,500
- --------------------------------------------------------------------------------------------------------------------------------
Chesapeake, VA, Industrial Development Authority (Chesapeake Court
House), MBIA, 6.25%, 2011 3,985 4,547,323
- --------------------------------------------------------------------------------------------------------------------------------
Chesapeake, VA, Industrial Development Authority (Chesapeake Court
House), MBIA, 5.25%, 2017 2,000 2,206,240
- --------------------------------------------------------------------------------------------------------------------------------
Chesterfield County, VA, Industrial Development Authority, Public
Facilities Lease Rev., 7.5%, 2008 1,720 1,723,990
- --------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Certificates of Participation, 6.1%, 2017 3,090 3,698,143
- --------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Economic Development (Laurel Hill Public
Facilities), 5%, 2023 1,690 1,780,111
- --------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Economic Development Authority (Vienna II
Metrorail), 6%, 2017 1,750 2,063,775
- --------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Economic Development Authority, Parking Rev.
(Vienna II Metrorail), 6%, 2016 1,650 1,947,677
- --------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Redevelopment & Housing Authority Rev. (Mott &
Gum Springs Community Centers), 5.5%, 2017 2,225 2,313,310
- --------------------------------------------------------------------------------------------------------------------------------
Henrico County, VA, Industrial Development Authority, Public Lease
Rev., 6.5%, 2005(++) 5,000 5,457,500
- --------------------------------------------------------------------------------------------------------------------------------
King William County VA, Industrial Development Authority (Virginia
Courthouse), AMBAC, 5%, 2023 890 938,202
- --------------------------------------------------------------------------------------------------------------------------------
Middlesex County, VA, Industrial Development Authority Rev., AMBAC,
5.125%, 2027 1,000 1,058,590
- --------------------------------------------------------------------------------------------------------------------------------
Middlesex County, VA, Industrial Development Authority Rev., AMBAC,
5.25%, 2032 2,000 2,141,700
- --------------------------------------------------------------------------------------------------------------------------------
Montgomery County, VA, Industrial Development, "B", AMBAC, 6%, 2017 1,000 1,182,190
- --------------------------------------------------------------------------------------------------------------------------------
Montgomery County, VA, Industrial Development, "C", AMBAC, 6%, 2017 1,120 1,324,053
- --------------------------------------------------------------------------------------------------------------------------------
New River Valley, VA, Regional Jail Authority, MBIA, 5.125%, 2019 6,405 6,822,542
- --------------------------------------------------------------------------------------------------------------------------------
Orange County, VA, Industrial Development Authority (Orange County
Project), AMBAC, 5%, 2034 1,000 1,037,220
- --------------------------------------------------------------------------------------------------------------------------------
Pamunkey, VA, Regional Jail Authority, MBIA, 5.75%, 2006(++) 2,230 2,486,249
- --------------------------------------------------------------------------------------------------------------------------------
Pamunkey, VA, Regional Jail Authority, MBIA, 5.75%, 2006(++) 270 301,026
- --------------------------------------------------------------------------------------------------------------------------------
Powhatan County, VA, Economic Development Authority Lease Rev.
(Virginia Capital Projects), AMBAC, 5.25%, 2033 1,000 1,070,570
- --------------------------------------------------------------------------------------------------------------------------------
Prince William County, VA, Lease Partnerships, 5%, 2021 1,500 1,579,125
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2013+(+) $2,000 $2,642,640
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2016+(+) 500 660,420
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, Public Facilities, Certificates of Participation
(Megahertz Project), "A", AMBAC, 5%, 2022 1,600 1,676,848
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Biotechnology Research Park (Biotech Two), 5.25%, 2018 8,800 9,513,152
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Biotechnology Research Park Lease Rev. (Consolidated
Laboratories), 5%, 2021 1,500 1,582,560
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Public Building Authority Rev., "B", MBIA, 0%, 2007 3,750 3,485,925
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority Rev., "B", FSA, 5.5%, 2019 1,070 1,202,209
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority Rev., ROLS, 8.761%, 2021+(+) 1,390 1,569,282
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority Rev., ROLS, 8.76%, 2023+(+) 1,520 1,691,426
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority Rev., ROLS, 8.816%, 2033+(+) 2,510 2,732,788
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority, Infrastructure Rev., "A", 5%, 2017 1,360 1,461,442
- --------------------------------------------------------------------------------------------------------------------------------
$76,892,604
- --------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.5% Greater Richmond Convention Center Authority, Hotel Tax Rev.
(Convention Center Expansion), 6.125%, 2020 $3,500 $3,954,020
- --------------------------------------------------------------------------------------------------------------------------------
Territory of Virgin Islands, Public Finance Authority Rev., "A",
5.625%, 2025 1,000 1,033,650
- --------------------------------------------------------------------------------------------------------------------------------
$4,987,670
- --------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.3% Childrens Trust Fund, Settlement Rev., Puerto Rico, 5.375%, 2033 $480 $473,400
- --------------------------------------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corp., 5%, 2021 640 617,600
- --------------------------------------------------------------------------------------------------------------------------------
$1,091,000
- --------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 1.8% Chesapeake Bay, Bridge & Tunnel Commission, Virginia District Rev.,
FGIC,
0%, 2005 $4,535 $4,463,891
- --------------------------------------------------------------------------------------------------------------------------------
Pocahontas Parkway Assn., VA, Toll Road Rev., 0%, 2012 1,500 840,600
- --------------------------------------------------------------------------------------------------------------------------------
Pocahontas Parkway Assn., VA, Toll Road Rev., 0%, 2013 1,500 777,345
- --------------------------------------------------------------------------------------------------------------------------------
$6,081,836
- --------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Virginia Transportation Board Rev. (U.S. Route 58), "B", 5.125%,
Tax - 1.7% 2021 $4,000 $4,187,400
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Commonwealth Board Program (Oak Grove Connector), "A",
5.25%, 2022 1,500 1,597,935
- --------------------------------------------------------------------------------------------------------------------------------
$5,785,335
- --------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Danville, VA, Industrial Development Authority, Educational
4.3% Facilities Rev. (Averett University), 6%, 2022 $500 $514,425
- --------------------------------------------------------------------------------------------------------------------------------
Loudoun County, VA, Industrial Development Authority, University
Facilities Rev. (George Washington University), 6.25%, 2012 2,710 2,725,718
- --------------------------------------------------------------------------------------------------------------------------------
Virginia College Building Authority (21st Century College Program),
6%, 2018 2,000 2,310,540
- --------------------------------------------------------------------------------------------------------------------------------
Virginia College Building Authority, Educational Facilities Rev.
(Washington & Lee University), MBIA, 5.25%, 2031 1,000 1,123,040
- --------------------------------------------------------------------------------------------------------------------------------
Virginia College Building Authority, Educational Facilities Rev.
(Hampden Sydney College), 5%, 2016 1,730 1,843,332
- --------------------------------------------------------------------------------------------------------------------------------
Virginia College Building Authority, Educational Facilities Rev.
(Hampton University), 5%, 2018 1,655 1,740,845
- --------------------------------------------------------------------------------------------------------------------------------
Virginia College Building Authority, Educational Facilities Rev.
(Hampton University), 6%, 2020 1,000 1,133,930
- --------------------------------------------------------------------------------------------------------------------------------
Virginia College Building Authority, Educational Facilities Rev.
(Regent University), MBIA, 5.125%, 2031 1,000 1,041,340
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Public School Authority, "B", 6.5%, 2004(++) 1,875 1,946,063
- --------------------------------------------------------------------------------------------------------------------------------
$14,379,233
- --------------------------------------------------------------------------------------------------------------------------------
Utilities - Cogeneration - Mecklenburg County, VA, Industrial Development Authority Rev. (UAE
0.8% Mecklenburg, LP), 6.5%, 2017 $700 $719,446
- --------------------------------------------------------------------------------------------------------------------------------
Pittsylvania County, VA, Industrial Development Authority Rev.
(Multi-trade of Pittsylvania), 7.5%, 2014 2,000 2,007,480
- --------------------------------------------------------------------------------------------------------------------------------
$2,726,926
- --------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Chesapeake VA, Industrial Development Authority Rev. (Pollution
Owned - 1.2% Control), 5.25%, 2008 $750 $788,970
- --------------------------------------------------------------------------------------------------------------------------------
Halifax County, VA, Industrial Development Authority (Old Dominion
Electric Cooperative), AMBAC, 5.625%, 2028 3,000 3,225,630
- --------------------------------------------------------------------------------------------------------------------------------
$4,014,600
- --------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 4.9% Bristol VA, Utility Systems Rev., FSA, 5.75%, 2016(++) $240 $288,972
- --------------------------------------------------------------------------------------------------------------------------------
Guam Power Authority Rev., RITES, AMBAC, 9.0426%, 2015+(+) 1,010 1,232,463
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., RITES, FSA, 10.0771%, 2017+(+) 2,500 3,415,550
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., RITES, FSA, 9.8271%, 2019+(+) 1,270 1,638,046
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., RITES, FSA, 9.1771%, 2020+(+) 1,250 1,535,000
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., "X", 6%, 2005(++) 3,000 3,244,620
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, Public Utilities Rev., FSA, 5%, 2033 5,000 5,169,200
- --------------------------------------------------------------------------------------------------------------------------------
$16,523,851
- --------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 8.2% Fairfax County, VA, Water Authority Rev., 5%, 2027 $4,000 $4,182,600
- --------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Water Authority Rev., 5%, 2032 2,000 2,077,580
- --------------------------------------------------------------------------------------------------------------------------------
Hanover County, VA, Water & Sewer Systems Rev., MBIA, 5.25%, 2026 2,000 2,074,860
- --------------------------------------------------------------------------------------------------------------------------------
Henry County, VA, Public Service Water & Sewer Rev., FSA, 5.5%, 2019 1,000 1,172,900
- --------------------------------------------------------------------------------------------------------------------------------
Prince William County, VA, Water & Sewer Rev., FGIC, 5.5%, 2019 2,000 2,243,860
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Aqueduct & Sewer Authority Rev., 9%, 2005(++) 2,935 3,162,873
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Aqueduct & Sewer Authority Rev., 10.25%, 2009(++) 275 341,432
- --------------------------------------------------------------------------------------------------------------------------------
Spotsylvania County, VA, Water & Sewer Rev., FSA, 5%, 2022 1,450 1,518,252
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Beach, VA, Storm Water Utilities Rev., 6%, 2020 1,000 1,178,070
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority Sewer Systems Rev. (Hopewell Regional
Wastewater), 5.75%, 2021 1,335 1,480,048
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority, Clean Water Rev., 6%, 2017 2,750 3,256,440
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority, Clean Water Rev., 5.4%, 2018 1,135 1,261,269
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority, Infrastructure Rev., "A", MBIA, 5.5%, 2019 1,600 1,804,048
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority, Infrastructure Rev., "A", MBIA, 5.5%, 2020 1,690 1,901,013
- --------------------------------------------------------------------------------------------------------------------------------
$27,655,245
- --------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $303,952,081) $331,915,889
- --------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.2%
- --------------------------------------------------------------------------------------------------------------------------------
Harris County, TX, Health Facilities Development Rev. (University of
Texas Medical Center), due 4/01/04 $100 $100,000
- --------------------------------------------------------------------------------------------------------------------------------
Missouri Development Finance, Board of Cultural Facilities Rev.
(Nelson Gallery), "B", due 4/01/04 300 300,000
- --------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
due 4/01/04 200 200,000
- --------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water Finance Authority, Water & Sewer
Systems Rev., "C", due 4/01/04 200 200,000
- --------------------------------------------------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority, due 4/07/04 80 80,000
- --------------------------------------------------------------------------------------------------------------------------------
State of California, Department of Water Resources, Power Supply
Rev., due 4/07/04 3,200 3,200,000
- --------------------------------------------------------------------------------------------------------------------------------
West Baton Rouge Parish, LA, Industrial District (Dow Chemical Co.),
"B", due 4/01/04 100 100,000
- --------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $4,180,000
- --------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $308,132,081) $336,095,889
- --------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.6% 2,024,381
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $338,120,270
- --------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF FUND INVESTMENTS - 3/31/04 MFS(R) WEST VIRGINIA MUNICIPAL BOND
- --------------------------------------------------------------------------------------------------------------------------------
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 96.0%
- --------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000 Omitted) $ VALUE
- --------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 16.4% Charleston, WV, Public Improvements, 7.2%, 2009 $1,140 $1,396,044
- --------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, Public Improvement, 5.25%, 2023 1,500 1,602,180
- --------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, Public Improvement, FGIC, 5.5%, 2016 1,000 1,173,490
- --------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, Public Improvement, RITES, MBIA,
10.0771%, 2019+(+) 3,000 3,991,500
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Highway Improvements, FGIC, 5.625%, 2019 2,000 2,262,520
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Public Improvements, FGIC, 5%, 2021 4,000 4,212,000
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Sewer Improvements, FGIC, 5.5%, 2017 2,565 2,837,428
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Water Utility Improvements, FGIC, 5.25%, 2026 8,000 8,501,920
- --------------------------------------------------------------------------------------------------------------------------------
$25,977,082
- --------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 1.7% Brooke County, WV, Board of Education, FGIC, 5%, 2016(++) $1,390 $1,493,499
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Municipal Finance Agency, RITES, FSA, 9.6169%, 2017+(+) 900 1,146,204
- --------------------------------------------------------------------------------------------------------------------------------
$2,639,703
- --------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 3.7% Jefferson County, WV, Board of Education, FGIC, 6.85%, 2009 $1,680 $2,045,887
- --------------------------------------------------------------------------------------------------------------------------------
Monongalia County, WV, Board of Education, MBIA, 7%, 2005 500 529,345
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority Rev., "B", 5.25%, 2021 3,115 3,282,836
- --------------------------------------------------------------------------------------------------------------------------------
$5,858,068
- --------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue -
Hospitals - 8.5% Berkeley County, WV, Hospital Rev. (City Hospital, Inc.), 6.5%, 2022 $840 $844,292
- --------------------------------------------------------------------------------------------------------------------------------
Kanawha County, WV, Building Commission Rev. (St. Francis Hospital),
7.5%, 2007 110 123,080
- --------------------------------------------------------------------------------------------------------------------------------
Ohio County, WV, County Commission Health System Rev. (Ohio Valley
Medical Center), 5.75%, 2013 750 692,130
- --------------------------------------------------------------------------------------------------------------------------------
Randolph County, WV, Community Health Systems Rev. (Davis Health
Systems, Inc.), FSA, 5.2%, 2021 1,000 1,070,350
- --------------------------------------------------------------------------------------------------------------------------------
Weirton, WV, Municipal Hospital Building Commission Rev. (Weirton
Hospital Medical Center), 6.375%, 2031 600 590,376
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Hospital Finance Authority, Hospital Rev. (Cabell
Huntington Hospital), AMBAC, 6.25%, 2019 5,000 5,129,450
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Hospital Finance Authority, Hospital Rev. (Charleston
Area Medical Center), 6.5%, 2023 2,000 2,492,240
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Hospital Finance Authority, Hospital Rev. (Fairmont
General Hospital), 6.625%, 2019 500 498,415
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Hospital Finance Authority, Hospital Rev. (General
Division Medical Office Building), 7.25%, 2014 1,890 1,933,432
- --------------------------------------------------------------------------------------------------------------------------------
$13,373,765
- --------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Harrison County, WV, Building Commission Rev. (Maplewood
Term Care - 2.0% Retirement), AMBAC, 5.25%, 2021 $2,625 $2,770,714
- --------------------------------------------------------------------------------------------------------------------------------
Monongalia County, WV, Health Facilities Rev. (Beverly Enterprises,
Inc.), 5.875%, 2007 410 404,891
- --------------------------------------------------------------------------------------------------------------------------------
$3,175,605
- --------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Braxton County, WV, Solid Waste Disposal Rev. (Weyerhaeuser Co.),
Paper - 1.3% 6.5%, 2025 $2,000 $2,083,480
- --------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Retail - 0.6% Kanawha County, WV, Commercial Development Rev. (Kroger Co.), 8%, 2011 $1,000 $1,022,350
- --------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing
Revenue - 0.7% Huntington, WV, Housing Corp. Rev., FNMA, 7.5%, 2024 $800 $801,808
- --------------------------------------------------------------------------------------------------------------------------------
Webster County, WV, Housing Development Rev. (Circlebrook), FHA,
6.35%, 2008 245 249,905
- --------------------------------------------------------------------------------------------------------------------------------
$1,051,713
- --------------------------------------------------------------------------------------------------------------------------------
Parking - 0.9% West Virginia Economic Development Authority, Auto Lease Rev.
(Capitol Parking Garage), AMBAC, 5.8%, 2020 $1,260 $1,439,512
- --------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
Local - 1.0% Charlestown, WV, Residential Mortgage Rev., 6.2%, 2011 $360 $363,784
- --------------------------------------------------------------------------------------------------------------------------------
Kanawha County, WV, 0%, 2015(++) 1,920 1,152,326
- --------------------------------------------------------------------------------------------------------------------------------
$1,516,110
- --------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 3.5% Puerto Rico Housing Finance Authority, 4.75%, 2023 $2,000 $2,001,360
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Housing Development Fund Rev., 5.25%, 2018 1,000 1,021,840
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Housing Development Fund Rev., 5.3%, 2023 1,000 1,017,860
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Housing Development Fund Rev., 0%, 2037 9,000 1,539,180
- --------------------------------------------------------------------------------------------------------------------------------
$5,580,240
- --------------------------------------------------------------------------------------------------------------------------------
State & Local
Appropriation - 21.4% Huntington, WV, Municipal Development Authority, Rev., MBIA, 5.1%, 2018 $1,740 $1,853,344
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority Rev. (State Office Building),
XCLA, 5.25%, 2025 2,000 2,266,240
- --------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority, Rev., 5.25%, 2019 2,000 2,224,800
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Building Commission, "A", RITES, AMBAC, 9.2238%, 2018+(+) 4,520 5,784,063
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Building Commission, "B", RITES, AMBAC, 9.2238%, 2018+(+) 1,250 1,599,575
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Building Commission, Lease Rev. (West Virginia
Regional Jail), AMBAC, 5.375%, 2018 1,000 1,139,830
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Building Commission, Lease Rev., MBIA, 0%, 2007 - 2008 6,200 5,697,435
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Building Commission, Lease Rev., MBIA, 0%, 2009(++) 1,000 864,440
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Economic Development Authority (Correctional Juvenile
& Public), 5%, 2020 1,000 1,045,920
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Economic Development Authority (Correctional Juvenile
& Public), MBIA, 5.5%, 2013 1,000 1,154,780
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Economic Development Authority (Correctional Juvenile
& Public), MBIA, 5%, 2026 2,100 2,175,327
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Economic Development Authority, Auto Lease Rev., 5.2%, 2033 1,000 1,010,470
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Economic Development Authority, Department of
Enviromental Protection, 5.5%, 2022 2,000 2,189,720
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Hospital Finance Authority, Hospital Rev. (Veterans
Nursing Home), 5.5%, 2034 1,000 1,005,040
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Hospital Finance Authority, Hospital Rev. (West
Virginia University Hospital), AMBAC, 5%, 2018 1,000 1,046,850
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia School Building Authority, Miscellaneous Tax Rev.,
FSA, 5.25%, 2021 2,550 2,757,162
- --------------------------------------------------------------------------------------------------------------------------------
$33,814,996
- --------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.3% Territory of Virgin Islands, Public Finance Authority Rev., "A",
5.625%, 2025 $500 $516,825
- --------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.5% Childrens Trust Fund, Settlement Rev., Puerto Rico, 5.375%, 2033 $720 $710,100
- --------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 7.1% West Virginia Parkways, Economic Development & Tourism Authority,
Rev., FGIC, 0%, 2007 $2,000 $1,871,560
- --------------------------------------------------------------------------------------------------------------------------------
West Viriginia Parkways, Economic Development & Tourism Authority,
Rev., FGIC, 0%, 2005 - 2006 4,750 4,626,040
- --------------------------------------------------------------------------------------------------------------------------------
West Viriginia Parkways, Economic Development & Tourism Authority,
Rev., FGIC, 0%, 2008(++) 610 549,946
- --------------------------------------------------------------------------------------------------------------------------------
West Viriginia Parkways, Economic Development & Tourism Authority,
Rev., FGIC, 5.25%, 2014 - 2019 3,760 4,249,187
- --------------------------------------------------------------------------------------------------------------------------------
$11,296,733
- --------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Commonwealth of Puerto Rico, Industrial Tourist Education
13.4% (University Plaza), MBIA, 5%, 2021 $1,270 $1,349,375
- --------------------------------------------------------------------------------------------------------------------------------
Fairmont State College, West Virginia, College Rev., 5.25%, 2022 5,130 5,484,893
- --------------------------------------------------------------------------------------------------------------------------------
Fairmont State College, West Virginia, College Rev., FGIC, 5.375%,
2027 1,500 1,609,590
- --------------------------------------------------------------------------------------------------------------------------------
Fairmont State College, West Virginia, College Rev., FGIC, 5%, 2032 2,250 2,320,470
- --------------------------------------------------------------------------------------------------------------------------------
State of West Virginia, Department of Higher Education (Marshall
University), FGIC, 5.25%, 2019 1,680 1,805,026
- --------------------------------------------------------------------------------------------------------------------------------
State of West Virginia, Department of Higher Education (Student
Union), FGIC, 5.125%, 2022 1,500 1,572,930
- --------------------------------------------------------------------------------------------------------------------------------
State of West Virginia, Department of Higher Education, MBIA, 5%,
2010 1,345 1,504,638
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia University, University Systems Rev. (Marshall
University), FGIC, 6%, 2020 2,705 3,167,690
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia University, University Systems Rev. (West Virginia
University), MBIA, 5.5%, 2013 - 2020 2,125 2,451,464
- --------------------------------------------------------------------------------------------------------------------------------
$21,266,076
- --------------------------------------------------------------------------------------------------------------------------------
Universities -
Dormitories - 1.6% West Liberty State College, Capital Improvement, 6%, 2028 $500 $523,355
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia University, Dormitory Rev., AMBAC, 5%, 2022 2,000 2,075,140
- --------------------------------------------------------------------------------------------------------------------------------
$2,598,495
- --------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Mason County, WV, Pollution Control Rev. (Appalachian Power Co.),
Owned - 0.5% 5.5%, 2022 $750 $764,730
- --------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 10.9% Clarksburg, WV, Water Rev., FGIC, 5.25%, 2019 $2,725 $2,980,115
- --------------------------------------------------------------------------------------------------------------------------------
Fairmont, WV, Waterworks Rev., AMBAC, 5.25%, 2022 200 223,314
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority Rev., 7.1%, 2009(++) 150 172,782
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority Rev., AMBAC, 6.25%, 2020 1,000 1,157,230
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority Rev., AMBAC, 5.25%, 2023 3,545 3,830,408
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority Rev., AMBAC, 5%, 2026 2,100 2,184,882
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority Rev., FSA, 6.2%, 2024(++) 3,000 3,150,210
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority Rev., FSA, 5.25%, 2035 2,000 2,117,260
- --------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority, Infrastructure Rev., FSA,
5.5%, 2018 - 2019 1,285 1,441,830
- --------------------------------------------------------------------------------------------------------------------------------
$17,258,031
- --------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $139,388,317) $151,943,614
- --------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 3.0%
- --------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), due 4/07/04 $1,700 $1,700,000
- --------------------------------------------------------------------------------------------------------------------------------
East Baton Rouge, LA, Pollution Control Rev. (Exxon), due 4/01/04 300 300,000
- --------------------------------------------------------------------------------------------------------------------------------
Harris County, TX, Health Facilities Development Rev. (University of
Texas Medical Center), due 4/01/04 100 100,000
- --------------------------------------------------------------------------------------------------------------------------------
Lincoln County, WY, Pollution Control Rev. (Exxon Mobile Corp.), due
4/01/04 100 100,000
- --------------------------------------------------------------------------------------------------------------------------------
MSR Public Power Agency, CA, due 4/07/04 1,200 1,200,000
- --------------------------------------------------------------------------------------------------------------------------------
New York City, NY, due 4/01/04 1,100 1,100,000
- --------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
due 4/01/04 100 100,000
- --------------------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Health Facilities Authority Rev., Pooled
Hospital Loan Program, due 4/01/04 200 200,000
- --------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $4,800,000
- --------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $144,188,317) $156,743,614
- --------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.0% 1,599,398
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $158,343,012
- --------------------------------------------------------------------------------------------------------------------------------
* Non-income producing security - in default.
+ Restricted security.
(+) Inverse floating rate security.
(++) Refunded bond.
The following abbreviations for insurers and inverse floater are used in the Portfolio of Investments and are defined:
Insurers: Inverse Floaters:
AMBAC -- AMBAC Indemnity Corp. INFLOS -- Inverse Floating Security
ASST GTY -- Asset Guaranty Insurance Co. RIBS -- Residual Interest Bonds
CONNIE LEE -- Connie Lee Insurance Co. RITES -- Residual Interest Tax-Exempt Security
FGIC -- Financial Guaranty Insurance Co. ROLS -- Residual Options Longs
FHA -- Federal Housing Administration
FNMA -- Federal National Mortgage Assn.
FSA -- Financial Security Assurance Inc.
GNMA -- Government National Mortgage Assn.
MBIA -- Municipal Bond Investors Corp.
XLCA -- XL Capital Insurance Co.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------------------------------------------------------
This statement represents your fund's balance sheet, which details the assets
and liabilities composing the total value of your fund.
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA
At 3/31/04 FUND FUND FUND FUND
ASSETS
Investments -
Identified cost $87,628,091 $174,805,161 $352,569,083 $116,671,060
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation 6,122,608 18,368,954 34,237,500 7,663,341
- --------------------------------------------------------------------------------------------------------------------------------
Total, at value $93,750,699 $193,174,115 $386,806,583 $124,334,401
- --------------------------------------------------------------------------------------------------------------------------------
Cash 99,638 97,874 276,163 97,085
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for investments sold 3,443,004 125,000 2,821,497 10,000
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for fund shares sold 54,847 313,175 411,115 191,837
- --------------------------------------------------------------------------------------------------------------------------------
Interest receivable 1,443,940 2,918,442 5,753,962 1,804,813
- --------------------------------------------------------------------------------------------------------------------------------
Receivable from investment adviser -- -- -- 127,043
- --------------------------------------------------------------------------------------------------------------------------------
Other assets 506 968 2,823 264
- --------------------------------------------------------------------------------------------------------------------------------
Total assets $98,792,634 $196,629,574 $396,072,143 $126,565,443
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable $363,831 $667,726 $1,334,425 $389,968
- --------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 2,212,390 -- 2,303,268 1,042,082
- --------------------------------------------------------------------------------------------------------------------------------
Payable for fund shares reacquired 5,334 104,903 546,092 891,979
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on interest rate swap agreements 322,221 485,615 839,815 471,610
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on rate lock swap agreements 139,766 225,296 110,600 114,942
- --------------------------------------------------------------------------------------------------------------------------------
Payable to affiliates -
Management fee 786 1,601 3,208 1,021
- --------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 2,390 4,995 9,360 4,420
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee 1,875 2,636 5,265 17,980
- --------------------------------------------------------------------------------------------------------------------------------
Administrative fee 43 88 177 59
- --------------------------------------------------------------------------------------------------------------------------------
Accrued expenses and other liabilities 60,024 78,909 116,022 68,201
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities $3,108,660 $1,571,769 $5,268,232 $3,002,262
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $95,683,974 $195,057,805 $390,803,911 $123,563,181
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital $90,377,230 $178,506,390 $358,872,690 $117,788,707
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on investments 5,660,621 17,658,043 33,287,085 7,076,789
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net realized loss on investments (217,718) (507,032) (208,152) (1,013,695)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income (136,159) (599,596) (1,147,712) (288,620)
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $95,683,974 $195,057,805 $390,803,911 $123,563,181
- --------------------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA
FUND FUND FUND FUND
Shares of beneficial interest outstanding
Class A 8,232,153 11,419,089 24,811,219 7,281,780
- --------------------------------------------------------------------------------------------------------------------------------
Class B 1,313,167 3,611,166 4,099,316 4,689,726
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- 1,903,078 2,869,332 --
- --------------------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding 9,545,320 16,933,333 31,779,867 11,971,506
- --------------------------------------------------------------------------------------------------------------------------------
Net assets
Class A $82,506,565 $131,642,185 $305,184,936 $75,082,706
- --------------------------------------------------------------------------------------------------------------------------------
Class B 13,177,409 41,508,579 50,363,011 48,480,475
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- 21,907,041 35,255,964 --
- --------------------------------------------------------------------------------------------------------------------------------
Total net assets $95,683,974 $195,057,805 $390,803,911 $123,563,181
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares
Net asset value per share
(net assets/shares of beneficial interest outstanding) $10.02 $11.53 $12.30 $10.31
- --------------------------------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25 of net asset value per share) $10.52 $12.10 $12.91 $10.82
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $10.03 $11.49 $12.29 $10.34
- --------------------------------------------------------------------------------------------------------------------------------
Class C shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $-- $11.51 $12.29 $--
- --------------------------------------------------------------------------------------------------------------------------------
On sales of $100,000 or more, the offering price of Class A shares is reduced.
A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Assets and Liabilities - continued
SOUTH WEST
CAROLINA TENNESSEE VIRGINIA VIRGINIA
At 3/31/04 FUND FUND FUND FUND
ASSETS
Investments -
Identified cost $155,760,925 $131,980,968 $308,132,081 $144,188,317
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation 15,483,776 10,688,941 27,963,808 12,555,297
- --------------------------------------------------------------------------------------------------------------------------------
Total, at value $171,244,701 $142,669,909 $336,095,889 $156,743,614
- --------------------------------------------------------------------------------------------------------------------------------
Cash 13,226 43,583 98,596 60,630
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for investments sold 4,034,587 131,827 -- 25,000
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for fund shares sold 369,128 163,009 109,173 99,744
- --------------------------------------------------------------------------------------------------------------------------------
Interest receivable 2,419,543 1,916,709 5,072,152 2,568,123
- --------------------------------------------------------------------------------------------------------------------------------
Other assets 1,168 837 2,692 961
- --------------------------------------------------------------------------------------------------------------------------------
Total assets $178,082,353 $144,925,874 $341,378,502 $159,498,072
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable $623,273 $457,601 $1,250,635 $539,332
- --------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 2,032,886 811,252 -- --
- --------------------------------------------------------------------------------------------------------------------------------
Payable for fund shares reacquired 187,183 127,982 1,310,313 149,549
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on interest rate swap agreements 263,122 159,330 551,954 386,304
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on rate lock swap agreements 160,001 -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Payable to affiliates -
Management fee 1,434 1,176 2,786 1,300
- --------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 3,909 5,943 9,330 3,972
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee 2,328 1,805 3,907 1,834
- --------------------------------------------------------------------------------------------------------------------------------
Administrative fee 80 65 154 72
- --------------------------------------------------------------------------------------------------------------------------------
Accrued expenses and other liabilities 80,051 64,738 129,153 72,697
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities $3,354,267 $1,629,892 $3,258,232 $1,155,060
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $174,728,086 $143,295,982 $338,120,270 $158,343,012
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital $161,854,422 $132,987,933 $315,973,462 $147,792,537
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on investments 15,060,653 10,529,611 27,411,854 12,168,993
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) on investments (2,110,711) 174,019 (4,313,616) (1,224,324)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income (76,278) (395,581) (951,430) (394,194)
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $174,728,086 $143,295,982 $338,120,270 $158,343,012
- --------------------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
SOUTH WEST
CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND
Shares of beneficial interest outstanding
Class A 10,936,420 10,860,905 25,686,016 11,890,268
- --------------------------------------------------------------------------------------------------------------------------------
Class B 2,921,475 2,219,953 2,010,885 1,501,279
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- -- 1,137,628 --
- --------------------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding 13,857,895 13,080,858 28,834,529 13,391,547
- --------------------------------------------------------------------------------------------------------------------------------
Net assets
Class A $137,911,430 $118,990,189 $301,218,056 $140,599,383
- --------------------------------------------------------------------------------------------------------------------------------
Class B 36,816,656 24,305,793 23,564,146 17,743,629
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- -- 13,338,068 --
- --------------------------------------------------------------------------------------------------------------------------------
Total net assets $174,728,086 $143,295,982 $338,120,270 $158,343,012
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares
Net asset value per share
(net assets/shares of beneficial interest outstanding) $12.61 $10.96 $11.73 $11.82
- --------------------------------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25 of net asset value per share) $13.24 $11.51 $12.31 $12.41
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $12.60 $10.95 $11.72 $11.82
- --------------------------------------------------------------------------------------------------------------------------------
Class C shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $-- $-- $11.72 $--
- --------------------------------------------------------------------------------------------------------------------------------
On sales of $100,000 or more, the price of Class A shares is reduced.
A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------------
This statement describes how much your fund received in investment income and
paid in expenses. It also describes any gains and/or losses generated by fund operations.
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA
FUND FUND FUND FUND
For year ended 3/31/04
NET INVESTMENT INCOME
Interest income $5,276,412 $10,247,908 $20,977,675 $5,859,048
- --------------------------------------------------------------------------------------------------------------------------------
Expenses -
Management fee $552,517 $1,071,579 $2,202,103 $673,690
- --------------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 4,459 7,097 12,988 6,636
- --------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 145,897 280,941 545,247 175,422
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class A) -- 334,531 1,084,168 73,299
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class B) 111,023 422,503 555,201 442,059
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class C) -- 184,580 343,803 --
- --------------------------------------------------------------------------------------------------------------------------------
Administrative fee 9,834 19,182 39,548 12,211
- --------------------------------------------------------------------------------------------------------------------------------
Custodian fee 37,712 71,410 141,667 45,259
- --------------------------------------------------------------------------------------------------------------------------------
Printing 8,281 20,837 33,333 16,519
- --------------------------------------------------------------------------------------------------------------------------------
Postage 1,541 4,076 6,622 2,840
- --------------------------------------------------------------------------------------------------------------------------------
Auditing fees 34,446 33,366 34,046 33,360
- --------------------------------------------------------------------------------------------------------------------------------
Legal fees 4,576 2,270 5,664 5,852
- --------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 36,170 77,303 87,691 75,170
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses $946,456 $2,529,675 $5,092,081 $1,562,317
- --------------------------------------------------------------------------------------------------------------------------------
Fees paid indirectly (1,340) (1,648) (3,868) (1,621)
- --------------------------------------------------------------------------------------------------------------------------------
Reduction of expenses by investment adviser (205,621) (399,065) (819,959) (378,004)
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses $739,495 $2,128,962 $4,268,254 $1,182,692
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $4,536,917 $8,118,946 $16,709,421 $4,676,356
- --------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) (identified cost basis)-
Investment transactions $562,246 $99,833 $721,574 $441,692
- --------------------------------------------------------------------------------------------------------------------------------
Swap transactions (311,262) (506,595) (1,286,022) (612,121)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $250,984 $(406,762) $(564,448) $(170,429)
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments $112,878 $1,618,106 $2,909,917 $1,673,887
- --------------------------------------------------------------------------------------------------------------------------------
Swap transactions (325,124) (516,414) (325,278) (378,199)
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $(212,246) $1,101,692 $2,584,639 $1,295,688
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $38,738 $694,930 $2,020,191 $1,125,259
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $4,575,655 $8,813,876 $18,729,612 $5,801,615
- --------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Operations - continued
SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
FUND FUND FUND FUND
For year ended 3/31/04
NET INVESTMENT INCOME
Interest income $9,156,798 $7,291,872 $18,830,837 $8,268,201
- --------------------------------------------------------------------------------------------------------------------------------
Expenses -
Management fee $941,169 $796,244 $1,890,807 $861,311
- --------------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 7,614 6,972 12,934 7,600
- --------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 238,927 199,249 474,254 212,344
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class A) 464,313 415,855 1,067,806 482,517
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class B) 381,837 257,110 246,641 184,672
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class C) -- -- 134,301 --
- --------------------------------------------------------------------------------------------------------------------------------
Administrative fee 16,781 14,216 33,953 15,589
- --------------------------------------------------------------------------------------------------------------------------------
Custodian fee 61,274 52,516 125,183 56,680
- --------------------------------------------------------------------------------------------------------------------------------
Printing 15,357 9,095 32,052 12,046
- --------------------------------------------------------------------------------------------------------------------------------
Postage 2,832 1,899 5,894 2,367
- --------------------------------------------------------------------------------------------------------------------------------
Auditing fees 34,046 34,166 33,561 32,666
- --------------------------------------------------------------------------------------------------------------------------------
Legal fees 5,692 5,936 4,054 4,867
- --------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 44,983 38,217 93,187 35,356
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses $2,214,825 $1,831,475 $4,154,627 $1,908,015
- --------------------------------------------------------------------------------------------------------------------------------
Fees paid indirectly (2,030) (1,518) (3,018) (1,997)
- --------------------------------------------------------------------------------------------------------------------------------
Reduction of expenses by investment adviser (350,655) (296,509) (704,136) (320,918)
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses $1,862,140 $1,533,448 $3,447,473 $1,585,100
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $7,294,658 $5,758,424 $15,383,364 $6,683,101
- --------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized gain (loss) (identified cost basis)-
Investment transactions $555,192 $555,429 $272,436 $190,091
- --------------------------------------------------------------------------------------------------------------------------------
Swap transactions (573,958) (266,155) (716,117) (294,315)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $(18,766) $289,274 $(443,681) $(104,224)
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments $1,505,374 $580,731 $4,267,328 $1,110,287
- --------------------------------------------------------------------------------------------------------------------------------
Swap transactions (234,807) (119,612) (405,485) (301,935)
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain on investments $1,270,567 $461,119 $3,861,843 $808,352
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $1,251,801 $750,393 $3,418,162 $704,128
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $8,546,459 $6,508,817 $18,801,526 $7,387,229
- --------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
This statement describes the increases and/or decreases in net assets
resulting from operations, any distributions, and any shareholder transactions.
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA
FUND FUND FUND FUND
For year ended 3/31/04
INCREASE IN NET ASSETS
OPERATIONS
Net investment income $4,536,917 $8,118,946 $16,709,421 $4,676,356
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 250,984 (406,762) (564,448) (170,429)
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments (212,246) 1,101,692 2,584,639 1,295,688
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $4,575,655 $8,813,876 $18,729,612 $5,801,615
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
Class A $(4,064,652) $(5,975,204) $(13,419,746) $(3,030,603)
- ----------------------------------------------------------------------------------------------------------------------------------
Class B (520,819) (1,566,640) (2,043,344) (1,629,792)
- ----------------------------------------------------------------------------------------------------------------------------------
Class C -- (682,101) (1,263,628) --
- ----------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- -- (280,664) --
- ----------------------------------------------------------------------------------------------------------------------------------
Class B -- -- (49,717) --
- ----------------------------------------------------------------------------------------------------------------------------------
Class C -- -- (31,261) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(4,585,471) $(8,223,945) $(17,088,360) $(4,660,395)
- ----------------------------------------------------------------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS
Net proceeds from sale of shares $10,655,498 $41,425,831 $37,294,299 $30,601,516
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in reinvestment
of distributions 2,272,543 5,293,059 11,195,687 2,819,570
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (17,857,814) (39,966,408) (66,966,662) (26,644,762)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from fund share transactions $(4,929,773) $6,752,482 $(18,476,676) $6,776,324
- ----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets $(4,939,589) $7,342,413 $(16,835,424) $7,917,544
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period 100,623,563 187,715,392 407,639,335 115,645,637
- ----------------------------------------------------------------------------------------------------------------------------------
At end of period $95,683,974 $195,057,805 $390,803,911 $123,563,181
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income
included in net assets at end of period $(136,159) $(599,596) $(1,147,712) $(288,620)
- ----------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Changes in Net Assets - continued
SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
FUND FUND FUND FUND
For year ended 3/31/04
INCREASE IN NET ASSETS
OPERATIONS
Net investment income $7,294,658 $5,758,424 $15,383,364 $6,683,101
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (18,766) 289,274 (443,681) (104,224)
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain on investments 1,270,567 461,119 3,861,843 808,352
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $8,546,459 $6,508,817 $18,801,526 $7,387,229
- --------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
Class A $(6,047,323) $(4,946,524) $(13,869,373) $(5,969,940)
- --------------------------------------------------------------------------------------------------------------------------------
Class B (1,491,730) (903,219) (960,093) (679,583)
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- -- (522,406) --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(7,539,053) $(5,849,743) $(15,351,872) $(6,649,523)
- --------------------------------------------------------------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS
Net proceeds from sale of shares $29,350,138 $15,937,341 $20,320,016 $14,857,638
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in reinvestment
of distributions 4,689,230 3,214,136 8,573,893 4,326,299
- --------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (27,765,798) (19,879,059) (40,615,202) (20,585,229)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from fund share transactions $6,273,570 $(727,582) $(11,721,293) $(1,401,292)
- --------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets $7,280,976 $(68,508) $(8,271,639) $(663,586)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period 167,447,110 143,364,490 346,391,909 159,006,598
- --------------------------------------------------------------------------------------------------------------------------------
At end of period $174,728,086 $143,295,982 $338,120,270 $158,343,012
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment
income included in net assets at end of period $(76,278) $(395,581) $(951,430) $(394,194)
- --------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Changes in Net Assets - continued
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA
FUND FUND FUND FUND
For year ended 3/31/03
INCREASE IN NET ASSETS
OPERATIONS
Net investment income $4,340,327 $7,663,268 $17,561,632 $3,987,503
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 211,423 284,626 2,016,429 (149,368)
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain on investments 3,809,412 8,095,618 17,099,996 4,464,372
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $8,361,162 $16,043,512 $36,678,057 $8,302,507
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
Class A $(4,058,929) $(6,022,805) $(14,502,430) $(2,791,122)
- ----------------------------------------------------------------------------------------------------------------------------------
Class B (469,269) (1,402,028) (2,353,128) (1,467,283)
- ----------------------------------------------------------------------------------------------------------------------------------
Class C -- (476,288) (1,117,181) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(4,528,198) $(7,901,121) $(17,972,739) $(4,258,405)
- ----------------------------------------------------------------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS
Net proceeds from sale of shares $17,633,153 $43,561,956 $39,282,954 $50,723,478
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in reinvestment
of distributions 2,287,961 5,090,304 11,621,792 2,485,165
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (9,311,035) (30,877,198) (46,495,365) (17,554,351)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from fund share transactions $10,610,079 $17,775,062 $4,409,381 $35,654,292
- ----------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets $14,443,043 $25,917,453 $23,114,699 $39,698,394
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period 86,180,520 164,797,939 384,524,636 75,947,243
- ----------------------------------------------------------------------------------------------------------------------------------
At end of period $100,623,563 $187,715,392 $407,639,335 $115,645,637
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income included
in net assets at end of period $(86,847) $(489,403) $(1,114,375) $(292,552)
- ----------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Changes in Net Assets - continued
SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
FUND FUND FUND FUND
For year ended 3/31/03
INCREASE IN NET ASSETS
OPERATIONS
Net investment income $7,418,489 $5,925,598 $15,689,806 $7,005,287
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 714,730 359,898 239,753 361,090
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain on investments 6,460,467 5,835,725 13,828,605 5,329,668
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $14,593,686 $12,121,221 $29,758,164 $12,696,045
- --------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
Class A $(6,104,336) $(5,116,263) $(14,108,313) $(6,342,674)
- --------------------------------------------------------------------------------------------------------------------------------
Class B (1,485,789) (1,081,818) (1,023,751) (762,988)
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- -- (459,134) --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(7,590,125) $(6,198,081) $(15,591,198) $(7,105,662)
- --------------------------------------------------------------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS
Net proceeds from sale of shares $26,803,450 $27,676,408 $27,785,098 $22,629,845
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in reinvestment
of distributions 4,672,734 3,548,392 8,405,139 4,569,399
- --------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (26,609,520) (21,260,850) (40,642,264) (11,890,910)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from fund share transactions $4,866,664 $9,963,950 $(4,452,027) $15,308,334
- --------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets $11,870,225 $15,887,090 $9,714,939 $20,898,717
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period 155,576,885 127,477,400 336,676,970 138,107,881
- --------------------------------------------------------------------------------------------------------------------------------
At end of period $167,447,110 $143,364,490 $346,391,909 $159,006,598
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions in excess of) net investment
income included in net assets at end of period $128,349 $(335,965) $(949,088) $(479,948)
- --------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MISSISSIPPI MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
The financial highlights table is intended to help you understand each fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single fund share. The total returns in the table
represent the rate by which an investor would have earned (or lost) on an
investment in a fund (assuming reinvestment of all distributions) held for the
entire period. This information has been audited by the fund's independent
auditors, whose report, together with each fund's financial statements, are
included in this report.
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.02 $9.61 $9.78 $9.37 $9.93
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.46 $0.46 $0.49 $0.50 $0.50
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.01 0.44 (0.16) 0.41 (0.56)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.47 $0.90 $0.33 $0.91 $(0.06)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.47) $(0.49) $(0.50) $(0.50) $(0.50)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.02 $10.02 $9.61 $9.78 $9.37
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 4.77 9.48 3.45 10.02 (0.58)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.62 0.64 0.65 0.65 0.66
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.61 4.70 5.05 5.28 5.22
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 12 22 6 19 18
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $82,507 $87,724 $76,004 $67,458 $66,173
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.44 $0.44 $0.47 $0.48 $0.48
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 0.82 0.84 0.85 0.85 0.84
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.41 4.50 4.85 5.08 5.04
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by less than 0.01%. Per share, ratios, and supplemental data for
periods prior to April 1, 2001, have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MISSISSIPPI MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.04 $9.62 $9.79 $9.38 $9.94
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.38 $0.38 $0.42 $0.43 $0.42
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.01)^ 0.44 (0.17) 0.41 (0.56)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.37 $0.82 $0.25 $0.84 $(0.14)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.38) $(0.40) $(0.42) $(0.43) $(0.42)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.03 $10.04 $9.62 $9.79 $9.38
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) 3.80 8.67 2.62 9.17 (1.37)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.44 1.47 1.45 1.43 1.46
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.79 3.86 4.23 4.50 4.41
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 12 22 6 19 18
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $13,177 $12,900 $10,177 $10,986 $10,786
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.36 $0.36 $0.40 $0.41 $0.40
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.64 1.67 1.65 1.63 1.64
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.59 3.66 4.03 4.30 4.23
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by less than 0.01%. Per share, ratios, and supplemental data for
periods prior to April 1, 2001, have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
^ The per share amount is not in accordance with the net realized and unrealized gain/loss for the period because of the
timing of sales of the Fund shares and the amount of per share realized and unrealized gains and losses at such time.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NEW YORK MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.49 $10.94 $11.14 $10.58 $11.27
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.51 $0.52 $0.53 $0.55 $0.55
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.04 0.56 (0.18) 0.57 (0.69)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.55 $1.08 $0.35 $1.12 $(0.14)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.51) $(0.53) $(0.54) $(0.55) $(0.55)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.01) (0.01) --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.51) $(0.53) $(0.55) $(0.56) $(0.55)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.53 $11.49 $10.94 $11.14 $10.58
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 4.90 10.05 3.16 10.75 (1.06)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.86 0.87 0.88 0.86 0.85
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.39 4.56 4.80 5.10 5.14
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 13 17 18 35 38
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $131,642 $132,843 $121,717 $125,917 $101,403
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.48 $0.49 $0.51 $0.52 $0.53
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.06 1.07 1.08 1.06 1.03
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.19 4.36 4.60 4.90 4.96
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the
results would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NEW YORK MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.45 $10.93 $11.13 $10.58 $11.27
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.42 $0.43 $0.45 $0.46 $0.47
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.04 0.54 (0.19) 0.57 (0.69)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.46 $0.97 $0.26 $1.03 $(0.22)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.42) $(0.45) $(0.45) $(0.47) $(0.47)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.01) (0.01) --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.42) $(0.45) $(0.46) $(0.48) $(0.47)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.49 $11.45 $10.93 $11.13 $10.58
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.12 8.96 2.39 9.94 (1.89)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.60 1.62 1.63 1.61 1.60
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.62 3.80 4.05 4.33 4.38
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 13 17 18 35 38
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $41,509 $40,867 $29,903 $25,928 $20,224
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.39 $0.41 $0.43 $0.44 $0.45
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.80 1.82 1.83 1.81 1.78
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.42 3.60 3.85 4.13 4.20
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NEW YORK MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31 Period Ended
2004 2003 2002 3/31/2001*
CLASS C
Net asset value, beginning of period $11.47 $10.93 $11.13 $10.91
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.42 $0.43 $0.45 $0.14
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.04 0.56 (0.18) 0.23
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.46 $0.99 $0.27 $0.37
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.42) $(0.45) $(0.46) $(0.14)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.01) (0.01)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.42) $(0.45) $(0.47) $(0.15)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.51 $11.47 $10.93 $11.13
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.12 9.14 2.39 3.36++
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.60 1.62 1.63 1.61+
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.63 3.81 4.05 4.20+
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 13 17 18 35
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $21,907 $14,005 $10,178 $8,578
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.39 $0.41 $0.43 $0.14
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.80 1.82 1.83 1.81+
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.43 3.61 3.85 4.00+
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
* For the period from the inception of Class C shares, December 11, 2000, through March 31, 2001.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NORTH CAROLINA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $12.24 $11.68 $11.89 $11.35 $12.14
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.53 $0.54 $0.57 $0.58 $0.59
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.07 0.58 (0.21) 0.55 (0.80)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.60 $1.12 $0.36 $1.13 $(0.21)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.53) $(0.56) $(0.57) $(0.58) $(0.58)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.00)+++ (0.01) --
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (0.01) -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.54) $(0.56) $(0.57) $(0.59) $(0.58)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.30 $12.24 $11.68 $11.89 $11.35
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 5.01 9.71 3.08 10.20 (1.67)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.92 0.91 0.92 0.91 0.91
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.30 4.50 4.78 5.03 5.07
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 9 20 13 27 9
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $305,185 $316,687 $303,250 $308,447 $310,624
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.50 $0.52 $0.54 $0.56 $0.57
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.12 1.11 1.12 1.11 1.09
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.10 4.30 4.58 4.83 4.89
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.02%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the
results would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NORTH CAROLINA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $12.23 $11.67 $11.89 $11.35 $12.13
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.45 $0.47 $0.48 $0.50 $0.51
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.07 0.57 (0.20) 0.55 (0.78)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.52 $1.04 $0.28 $1.05 $(0.27)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.45) $(0.48) $(0.49) $(0.50) $(0.51)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.01) (0.01) --
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (0.01) -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.46) $(0.48) $(0.50) $(0.51) $(0.51)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.29 $12.23 $11.67 $11.89 $11.35
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.33 9.01 2.33 9.49 (2.22)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.56 1.56 1.57 1.56 1.56
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.64 3.85 4.07 4.37 4.42
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 9 20 13 27 9
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $50,363 $59,116 $57,534 $60,449 $48,794
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.42 $0.44 $0.46 $0.48 $0.49
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.76 1.76 1.77 1.76 1.74
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.44 3.65 3.87 4.17 4.24
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.02%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NORTH CAROLINA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS C 2004 2003 2002 2001 2000
Net asset value, beginning of period $12.23 $11.67 $11.89 $11.35 $12.13
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.45 $0.46 $0.48 $0.50 $0.51
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.07 0.58 (0.20) 0.55 (0.78)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.52 $1.04 $0.28 $1.05 $(0.27)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.45) $(0.48) $(0.49) $(0.50) $(0.51)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.01) (0.01) --
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (0.01) -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.46) $(0.48) $(0.50) $(0.51) $(0.51)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.29 $12.23 $11.67 $11.89 $11.35
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.33 9.01 2.33 9.49 (2.22)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.57 1.56 1.57 1.56 1.56
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.67 3.84 4.07 4.37 4.42
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 9 20 13 27 9
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $35,256 $31,836 $23,741 $19,099 $14,206
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.43 $0.44 $0.46 $0.48 $0.49
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.77 1.76 1.77 1.76 1.74
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.47 3.64 3.87 4.17 4.24
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.02%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) PENNSYLVANIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.21 $9.73 $9.85 $9.36 $9.90
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.42 $0.45 $0.48 $0.49 $0.50
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.10 0.51 (0.11) 0.49 (0.55)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.52 $0.96 $0.37 $0.98 $(0.05)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.42) $(0.48) $(0.49) $(0.49) $(0.49)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.00)+++ -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.42) $(0.48) $(0.49) $(0.49) $(0.49)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.31 $10.21 $9.73 $9.85 $9.36
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 5.12 10.12 3.85 10.85 (0.45)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.64 0.48 0.36 0.37 0.38
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.12 4.47 4.90 5.17 5.19
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 24 19 19 10 48
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $75,083 $68,705 $47,661 $33,842 $25,494
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually agreed under a temporary expense agreement to pay all of the fund's operating
expenses, exclusive of management, distribution and service fees in excess of 0.20% of average daily net assets. Prior to
January 1, 2003, MFS had contractually agreed, subject to reimbursement, to bear a portion of the fund's "Other Expenses",
which are defined as the fund's operating expenses, exclusive of management, distribution and service fees such that "Other
Expenses" did not exceed 0.40% annually. This arrangement was effected by MFS bearing all of the fund's "Other Expenses"
during the fund's fiscal year and the fund paying MFS an expense reimbursement fee not greater than 0.40% of average daily
net assets. The investment adviser had agreed to waive 0.40% of the reimbursement fee for an indefinite period of time.
This agreement terminated on December 31, 2002. In addition, the investment adviser contractually waived a portion of its
fee for the periods indicated. To the extent actual expenses were over these limitations, the net investment income per
share and the ratios would have been:
Net investment income(S)(S) $0.39 $0.40 $0.43 $0.44 $0.44
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 0.94 0.96 0.89 0.93 0.91
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.82 3.99 4.37 4.61 4.66
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.02%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the
results would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) PENNSYLVANIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.24 $9.75 $9.88 $9.38 $9.92
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.34 $0.36 $0.40 $0.42 $0.42
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.10 0.53 (0.12) 0.50 (0.55)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.44 $0.89 $0.28 $0.92 $(0.13)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.34) $(0.40) $(0.41) $(0.42) $(0.41)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.00)+++ -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.34) $(0.40) $(0.41) $(0.42) $(0.41)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.34 $10.24 $9.75 $9.88 $9.38
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.38 9.21 2.86 10.06 (1.25)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.44 1.30 1.20 1.17 1.19
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.32 3.62 4.06 4.38 4.38
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 24 19 19 10 48
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $48,480 $46,941 $28,286 $20,827 $17,496
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually agreed under a temporary expense agreement to pay all of the fund's operating
expenses, exclusive of management, distribution and service fees in excess of 0.20% of average daily net assets. Prior to
January 1, 2003, MFS had contractually agreed, subject to reimbursement, to bear a portion of the fund's "Other Expenses",
which are defined as the fund's operating expenses, exclusive of management, distribution and service fees such that "Other
Expenses" did not exceed 0.40% annually. This arrangement was effected by MFS bearing all of the fund's "Other Expenses"
during the fund's fiscal year and the fund paying MFS an expense reimbursement fee not greater than 0.40% of average daily
net assets. The investment adviser had agreed to waive 0.40% of the reimbursement fee for an indefinite period of time.
This agreement terminated on December 31, 2002. In addition, the investment adviser contractually waived a portion of its
fee for the periods indicated. To the extent actual expenses were over these limitations, the net investment income per
share and the ratios would have been:
Net investment income(S)(S) $0.31 $0.32 $0.35 $0.36 $0.37
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.74 1.78 1.73 1.73 1.72
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.02 3.14 3.53 3.82 3.85
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.02%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) SOUTH CAROLINA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $12.53 $12.00 $12.15 $11.58 $12.48
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.55 $0.58 $0.60 $0.60 $0.58
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.10 0.54 (0.16) 0.56 (0.86)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.65 $1.12 $0.44 $1.16 $(0.28)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.57) $(0.59) $(0.59) $(0.59) $(0.58)
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- -- -- (0.03)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- -- -- (0.01)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.57) $(0.59) $(0.59) $(0.59) $(0.62)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.61 $12.53 $12.00 $12.15 $11.58
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 5.30 9.51 3.68 10.26 (2.27)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.94 0.95 0.94 0.96 0.94
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.39 4.68 4.91 5.13 4.91
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 16 21 10 33 18
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $137,911 $129,844 $121,438 $120,529 $121,064
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.53 $0.55 $0.57 $0.58 $0.56
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.14 1.15 1.14 1.16 1.12
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.19 4.48 4.71 4.93 4.73
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share, and decrease net realized and unrealized gains
and losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.03%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the
results would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) SOUTH CAROLINA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $12.52 $11.99 $12.14 $11.58 $12.47
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.47 $0.50 $0.52 $0.52 $0.51
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.10 0.54 (0.16) 0.55 (0.86)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.57 $1.04 $0.36 $1.07 $(0.35)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.49) $(0.51) $(0.51) $(0.51) $(0.50)
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- -- -- (0.03)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- -- -- (0.01)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.49) $(0.51) $(0.51) $(0.51) $(0.54)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.60 $12.52 $11.99 $12.14 $11.58
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.62 8.81 3.01 9.46 (2.82)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.59 1.60 1.59 1.61 1.59
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.74 4.03 4.25 4.47 4.26
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 16 21 10 33 18
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $36,817 $37,603 $34,139 $33,302 $31,532
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.45 $0.47 $0.49 $0.50 $0.48
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.79 1.80 1.79 1.81 1.77
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.54 3.83 4.05 4.27 4.08
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.03%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) TENNESSEE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.90 $10.43 $10.58 $10.11 $10.87
- ------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.45 $0.47 $0.49 $0.50 $0.50
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.06 0.49 (0.14) 0.47 (0.69)
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.51 $0.96 $0.35 $0.97 $(0.19)
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.45) $(0.49) $(0.50) $(0.50) $(0.50)
- ------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- -- -- (0.07)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.00)+++ -- --
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- -- -- (0.00)+++
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.45) $(0.49) $(0.50) $(0.50) $(0.57)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.96 $10.90 $10.43 $10.58 $10.11
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 4.80 9.34 3.36 9.87 (1.75)
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.94 0.97 0.94 0.95 0.96
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.08 4.35 4.66 4.87 4.80
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 19 16 12 19 20
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $118,990 $115,819 $101,294 $99,097 $100,251
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.42 $0.45 $0.47 $0.48 $0.48
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.14 1.17 1.14 1.15 1.14
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.88 4.15 4.46 4.67 4.62
- ------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
+++ Per share amount was less than $(0.01).
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the
results would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) TENNESSEE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.89 $10.42 $10.57 $10.10 $10.86
- ------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.38 $0.40 $0.42 $0.43 $0.43
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.06 0.49 (0.14) 0.47 (0.69)
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.44 $0.89 $0.28 $0.90 $(0.26)
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.38) $(0.42) $(0.43) $(0.43) $(0.43)
- ------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- -- -- (0.07)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.00)+++ -- --
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments -- -- -- -- (0.00)+++
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.38) $(0.42) $(0.43) $(0.43) $(0.50)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.95 $10.89 $10.42 $10.57 $10.10
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.12 8.64 2.69 9.17 (2.39)
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.59 1.62 1.59 1.60 1.61
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.43 3.70 4.00 4.22 4.15
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 19 16 12 19 20
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $24,306 $27,546 $26,183 $23,656 $21,321
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.35 $0.38 $0.40 $0.41 $0.41
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.79 1.82 1.79 1.80 1.79
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.23 3.50 3.80 4.02 3.97
- ------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.61 $11.14 $11.36 $10.91 $11.60
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.53 $0.53 $0.54 $0.56 $0.57
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.12 0.47 (0.22) 0.45 (0.70)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.65 $1.00 $0.32 $1.01 $(0.13)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.53) $(0.53) $(0.54) $(0.56) $(0.56)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.00)+++ (0.00)+++ --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.53) $(0.53) $(0.54) $(0.56) $(0.56)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.73 $11.61 $11.14 $11.36 $10.91
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 5.70 9.10 2.87 9.55 (1.09)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.93 0.93 0.92 0.91 0.91
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.53 4.62 4.77 5.06 5.07
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 11 13 14 24 13
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $301,218 $308,164 $299,088 $304,581 $311,934
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.51 $0.51 $0.52 $0.54 $0.54
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.13 1.13 1.12 1.11 1.09
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.33 4.42 4.57 4.86 4.89
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
+++ Per share amount was less than $(0.01).
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charges had been included, the
results would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.60 $11.13 $11.35 $10.91 $11.60
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.45 $0.46 $0.47 $0.48 $0.49
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.12 0.46 (0.22) 0.44 (0.70)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.57 $0.92 $0.25 $0.92 $(0.21)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.45) $(0.45) $(0.47) $(0.48) $(0.48)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.00)+++ (0.00)+++ --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.45) $(0.45) $(0.47) $(0.48) $(0.48)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.72 $11.60 $11.13 $11.35 $10.91
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) 5.02 8.40 2.20 8.76 (1.73)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.57 1.58 1.58 1.56 1.56
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.88 3.97 4.12 4.39 4.42
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 11 13 14 24 13
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $23,564 $25,470 $26,970 $29,872 $29,316
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.43 $0.43 $0.45 $0.46 $0.47
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.77 1.78 1.78 1.76 1.74
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.68 3.77 3.92 4.19 4.24
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
+++ Per share amount was less than $(0.01).
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS C 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.61 $11.13 $11.36 $10.91 $11.60
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.45 $0.45 $0.47 $0.48 $0.49
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.11 0.48 (0.23) 0.45 (0.70)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.56 $0.93 $0.24 $0.93 $(0.21)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.45) $(0.45) $(0.47) $(0.48) $(0.48)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (0.00)+++ (0.00)+++ --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.45) $(0.45) $(0.47) $(0.48) $(0.48)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.72 $11.61 $11.13 $11.36 $10.91
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.93 8.49 2.10 8.85 (1.73)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.57 1.58 1.57 1.56 1.56
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.88 3.97 4.10 4.37 4.42
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 11 13 14 24 13
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $13,338 $12,758 $10,619 $6,965 $5,171
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.43 $0.43 $0.44 $0.46 $0.47
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.77 1.78 1.77 1.76 1.74
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.68 3.77 3.90 4.17 4.24
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
+++ Per share amount was less than $(0.01).
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) WEST VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.77 $11.32 $11.45 $10.95 $11.75
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.51 $0.55 $0.57 $0.57 $0.57
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.05 0.46 (0.14) 0.50 (0.80)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.56 $1.01 $0.43 $1.07 $(0.23)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.51) $(0.56) $(0.56) $(0.57) $(0.57)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.82 $11.77 $11.32 $11.45 $10.95
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+) 4.84 9.04 3.79 10.04 (1.89)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.93 0.96 0.93 0.95 0.95
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.33 4.71 4.97 5.14 5.13
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 17 13 2 9 30
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $140,599 $139,564 $121,860 $118,862 $117,174
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.49 $0.53 $0.55 $0.55 $0.55
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.13 1.16 1.13 1.15 1.13
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.13 4.51 4.77 4.94 4.95
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the
results would have been lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) WEST VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2004 2003 2002 2001 2000
Net asset value, beginning of period $11.76 $11.31 $11.44 $10.94 $11.74
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.43 $0.47 $0.50 $0.50 $0.50
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.06 0.46 (0.15) 0.50 (0.80)
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.49 $0.93 $0.35 $1.00 $(0.30)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.43) $(0.48) $(0.48) $(0.50) $(0.50)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.82 $11.76 $11.31 $11.44 $10.94
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) 4.25 8.34 3.12 9.34 (2.53)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.58 1.61 1.59 1.60 1.60
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.68 4.06 4.31 4.48 4.48
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 17 13 2 9 30
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $17,744 $19,443 $16,248 $16,170 $14,727
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. If this fee had been incurred
by the fund, the net investment income per share and the ratios would have been:
Net investment income(S)(S) $0.41 $0.45 $0.47 $0.48 $0.48
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.78 1.81 1.79 1.80 1.78
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.48 3.86 4.11 4.28 4.30
- --------------------------------------------------------------------------------------------------------------------------------
(S)(S) As required, effective April 1, 2001, the fund has adopted the provisions of the AICPA Audit and Accounting Guide for
Investment Companies and began accreting market discount on debt securities. The effect of this change for the year
ended March 31, 2002, was to increase net investment income per share and decrease net realized and unrealized gains and
losses per share. The impact of this change calculates to less than $0.01 per share. In addition, the ratio of net
investment income to average net assets increased by 0.01%. Per share, ratios, and supplemental data for periods prior
to April 1, 2001, have not been restated to reflect this change in presentation.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
SEE NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
(1) BUSINESS AND ORGANIZATION
MFS Mississippi Municipal Bond Fund (Mississippi Fund), MFS New York Municipal
Bond Fund (New York Fund), MFS North Carolina Municipal Bond Fund (North
Carolina Fund), MFS Pennsylvania Municipal Bond Fund (Pennsylvania Fund), MFS
South Carolina Municipal Bond Fund (South Carolina Fund), MFS Tennessee
Municipal Bond Fund (Tennessee Fund), MFS Virginia Municipal Bond Fund
(Virginia Fund), and MFS West Virginia Municipal Bond Fund (West Virginia Fund)
are each a non-diversified series of MFS Municipal Series Trust (the trust).
The trust is organized as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended, as an open- end
management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
General - The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates. Because each fund invests primarily in the securities of a
single state and its political subdivisions, each fund is vulnerable to the
effects of changes in the legal and economic environment of the particular
state. Municipal securities backed by current or anticipated revenues from a
specific project or specific assets can be negatively affected by the
discontinuance of the taxation supporting the projects or assets or the
inability to collect revenues for the project or from the assets. If the
Internal Revenue Service determines an issuer of a municipal security has not
complied with applicable tax requirements, interest from the security could
become taxable and the security could decline in value.
Investment Valuations - Each fund uses independent pricing services approved by
the Board of Trustees wherever possible to value its portfolio securities.
Portfolio securities are valued at current market prices where current market
prices are readily available, or the fund may fair value portfolio securities
under the direction of the Board of Trustees when a determination is made that
current market prices are not readily available. Bonds and other fixed income
securities (other than short-term obligations) in each fund's portfolio are
valued at an evaluated bid price as reported by an independent pricing service,
or to the extent a valuation is not reported by a pricing service, such
securities are valued on the basis of quotes from brokers and dealers. Prices
obtained from pricing services utilize both dealer-supplied valuations and
electronic data processing techniques which take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics,
and other market data without exclusive reliance upon quoted prices or exchange
or over-the-counter prices, since such valuations are believed to reflect more
accurately the fair value of such securities. Bonds and other fixed income
securities for which it is determined that current market prices are not
readily available will be fair valued under the direction of the Board of
Trustees. Short-term obligations with a remaining maturity in excess of 60 days
will be valued upon dealer-supplied valuations. All other short-term
obligations in each fund's portfolio are valued at amortized cost, which
constitutes market value as determined by the Board of Trustees.
Swap Agreements - Each fund may enter into swap agreements. A swap is an
exchange of cash payments between the fund and another party, which is based on
a specific financial index. Cash payments are exchanged at specified intervals
and the expected income or expense is recorded on the accrual basis. The value
of the swap is adjusted daily and the change in value is recorded as unrealized
appreciation or depreciation. Risks may arise upon entering into these
agreements from the potential inability of counterparties to meet the terms of
their contract and from unanticipated changes in the value of the financial
index on which the swap agreement is based. Each fund may use swaps for both
hedging and non-hedging purposes. For hedging purposes, each fund may use swaps
to reduce its exposure to interest rate fluctuations. For non- hedging
purposes, each fund may use swaps to take a position on anticipated changes in
the underlying financial index.
Interest Rate Swap Agreements - Interest rate swap agreements are agreements to
exchange cash flows periodically based on a notional principal amount, for
example the exchange of fixed rate interest payments for floating rate interest
payments which are based on a specific financial index or the exchange of two
distinct floating rate payments. The net receivable or payable associated with
these payments is accrued daily and is recorded as net interest income or
expense. For financial statement purposes, the net interest income or expense
periodically recognized for an interest rate swap agreement is recorded in the
same line item as any unrealized and realized gains or losses recognized for
that instrument. The primary risk associated with interest rate swap agreements
is that unfavorable changes in the fluctuation of interest rates could
adversely impact the funds.
Rate Lock Swap Agreements - Each fund may enter into rate lock swap agreements,
which are used to reduce the interest rate risk of the portfolio. A rate lock
swap agreement is a payment or receipt of cash on a specified future date,
calculated as the difference between the strike rate and a specific index yield
on that date. The payment received or made at the end of the measurement period
is recorded as a realized gain or loss in the Statement of Operations. The
value of the swap is adjusted daily and the change in value is recorded as
unrealized appreciation or depreciation.
Investment Transactions and Income - Investment transactions are recorded on
the trade date. Interest income is recorded on the accrual basis. All premium
and discount is amortized or accreted for financial statement purposes in
accordance with accounting principles generally accepted in the United States
of America. All premium and original issue discount is amortized or accreted
for tax reporting purposes as required by federal income tax regulations.
Interest payments received in additional securities are recorded on the ex-
interest date in an amount equal to the value of the security on such date.
Some securities may be purchased on a "when-issued" or "forward delivery"
basis, which means that the securities will be delivered to the fund at a
future date, usually beyond customary settlement time.
Legal fees and other related expenses incurred to preserve and protect the
value of a security owned are added to the cost of the security; other legal
fees are expensed. Capital infusions made directly to the security issuer,
which are generally non-recurring, incurred to protect or enhance the value of
high-yield debt securities, are reported as additions to the cost basis of the
security. Costs that are incurred to negotiate the terms or conditions of
capital infusions or that are expected to result in a plan of reorganization
are reported as realized losses. Ongoing costs incurred to protect or enhance
an investment, or costs incurred to pursue other claims or legal actions, are
expensed.
Fees Paid Indirectly - Each fund's custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by the
fund. This amount, for the year ended March 31, 2004, is shown as a reduction
of total expenses on the Statement of Operations.
Tax Matters and Distributions - Each fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net tax-
exempt and taxable net income, including any net realized gain on investments.
Accordingly, no provision for federal income or excise tax is provided.
Distributions paid by each fund from net interest received on tax-exempt
municipal bonds are not includable by shareholders as gross income for federal
income tax purposes because each fund intends to meet certain requirements of
the Code applicable to regulated investment companies, which will enable each
fund to pay exempt-interest dividends. The portion of such interest, if any,
earned on private activity bonds issued after August 7, 1986 may be considered
a tax-preference item to shareholders.
Distributions to shareholders are recorded on the ex-dividend date. Each fund
distinguishes between distributions on a tax basis and a financial reporting
basis and only distributions in excess of tax basis earnings and profits are
reported in the financial statements as distributions from paid-in capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits, which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or net realized gains. Common
types of book and tax differences that could occur include differences in
accounting for derivatives, defaulted bonds, capital losses, and amortization
and accretion on debt securities.
The tax character of distributions declared for the year ended March 31, 2004
was as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions declared from:
Tax-exempt income $4,585,471 $8,223,945 $16,726,718 $4,660,395 $7,539,053 $5,849,743 $15,351,872 $6,649,523
- -----------------------------------------------------------------------------------------------------------------------------------
Long-term capital gain -- -- 361,642 -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions $4,585,471 $8,223,945 $17,088,360 $4,660,395 $7,539,053 $5,849,743 $15,351,872 $6,649,523
- -----------------------------------------------------------------------------------------------------------------------------------
The tax character of distributions declared for the year ended March 31, 2003 was as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions declared from:
Tax-exempt income $4,528,198 $7,901,121 $17,972,739 $4,258,405 $7,590,125 $6,198,081 $15,591,198 $7,105,662
- -----------------------------------------------------------------------------------------------------------------------------------
During the year ended March 31, 2004, the following amounts were reclassified due to differences between book and tax accounting
for amortization and accretion on debt securities, market discount, utilization of equalization (a tax basis dividends paid
deduction from earnings and profits distributed to shareholders upon redemption of shares):
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease):
Paid-in capital $(1,465,782) $(41,270) $12,273 $(905,564) $31,019 $40,964 $(44,941) $(1,541,807)
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated
undistributed net
realized gain (loss)
on investments 1,466,540 46,464 3,767 917,593 (70,787) (72,667) 78,775 1,489,631
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated
distributions in
excess of net
investment income (758) (5,194) (16,040) (12,029) 39,768 31,703 (33,834) 52,176
- -----------------------------------------------------------------------------------------------------------------------------------
As of March 31, 2004, the components of distributable earnings on a tax basis were as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Undistributed tax-
exempt income $276,013 $81,738 $199,849 $113,238 $562,102 $80,464 $315,637 $125,061
- -----------------------------------------------------------------------------------------------------------------------------------
Undistributed ordinary
income -- -- -- -- -- -- -- 35,540
- -----------------------------------------------------------------------------------------------------------------------------------
Undistributed long-
term capital gains -- -- -- -- -- 72,692 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Capital loss
carryforward (228,833) (576,318) (437,200) (1,074,365) (2,259,134) -- (4,501,068) (1,077,400)
- -----------------------------------------------------------------------------------------------------------------------------------
Post October capital
loss deferred -- -- -- -- -- -- (16,414) (215,607)
- -----------------------------------------------------------------------------------------------------------------------------------
Unrealized
appreciation 5,667,802 17,727,329 33,515,393 7,136,961 15,209,030 10,630,938 27,614,345 12,237,676
- -----------------------------------------------------------------------------------------------------------------------------------
Other temporary
differences (408,238) (681,334) (1,346,821) (401,360) (638,334) (476,045) (1,265,692) (554,795)
- -----------------------------------------------------------------------------------------------------------------------------------
Post-October capital loss deferrals represent losses realized during the current fiscal year, but recognized for tax purposes in
the next fiscal year.
For federal income tax purposes, the capital loss carryforward may be applied against any net taxable realized gains of each
succeeding year until the earlier of its utilization or expiration.
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
EXPIRATION DATE FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
March 31, 2005 $(228,833) $-- $-- $(533,472) $-- $-- $(342,289) $(714,690)
- -----------------------------------------------------------------------------------------------------------------------------------
March 31, 2008 -- (125,530) -- (43,665) -- -- -- (58,823)
- -----------------------------------------------------------------------------------------------------------------------------------
March 31, 2009 -- -- -- (175,279) (2,259,134) -- (1,733,400) (220,540)
- -----------------------------------------------------------------------------------------------------------------------------------
March 31, 2010 -- (97,978) -- -- -- -- (2,059,003) (83,347)
- -----------------------------------------------------------------------------------------------------------------------------------
March 31, 2011 -- -- -- (120,267) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
March 31, 2012 -- (352,810) (437,200) (201,682) -- -- (366,376) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total $(228,833) $(576,318) $(437,200) $(1,074,365) $(2,259,134) $-- $(4,501,068) $(1,077,400)
- -----------------------------------------------------------------------------------------------------------------------------------
Multiple Classes of Shares of Beneficial Interest - Each fund offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of each fund based on the value
of settled and estimated shares outstanding of each class, without distinction
between share classes. Dividends are declared separately for each class.
Differences in per share dividend rates are due to differences in separate
class expenses charged. Class B shares will convert to Class A shares
approximately eight years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
Investment Adviser - Each fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an annual rate of 0.55%
of each fund's average daily net assets. The investment adviser has
contractually agreed to waive a portion of its fee, which is shown as a
reduction of total expenses in each fund's Statement of Operations. From April
1, 2003 to February 29, 2004 MFS reduced each fund's management fees to 0.35%
of average daily net assets. As part of the settlement agreement with the New
York Attorney General concerning market timing and related matters, MFS has
agreed to reduce each fund's management fee to 0.30% of average daily net
assets for the period from March 1, 2004 through February 28, 2009. During
this time period, the Board of Trustees will continue to review the
appropriateness of all advisory fees in accordance with their oversight
responsibilities. After February 28, 2009 the management fee will be
determined in accordance with then existing review policies approved by the
Board of Trustees overseeing the funds. Management fees incurred for the year
ended March 31, 2004, were 0.35% of average daily net assets on an annualized
basis for each fund.
For the Pennsylvania Fund, the investment adviser contractually agreed under a
temporary expense agreement to pay all of the fund's operating expenses,
exclusive of management, distribution and service fees in excess of 0.20% of
average daily net assets. Prior to January 1, 2003, MFS had contractually
agreed, subject to reimbursement, to bear a portion of the Pennsylvania Fund's
"Other Expenses", which are defined as the fund's operating expenses,
exclusive of management, distribution and service fees such that "Other
Expenses" did not exceed 0.40% annually. This arrangement was effected by MFS
bearing all of the Pennsylvania Fund's "Other Expenses" during the fund's
fiscal year and the fund paying MFS an expense reimbursement fee not greater
than 0.40% of average daily net assets. The investment adviser agreed to waive
0.40% of the reimbursement fee for an indefinite period of time. This
agreement terminated on
December 31, 2002.
Each fund pays compensation to the Independent Trustees ("Trustees") in the
form of both a retainer and attendance fees, and pays no compensation directly
to its Trustees who are officers of the investment adviser, or to officers of
each fund, all of whom receive remuneration for their services to each fund
from MFS. Certain officers and Trustees of each fund are officers or directors
of MFS, MFS Fund Distributors, Inc. (MFD), and MFS Service Center, Inc.
(MFSC). Each fund has an unfunded, defined benefit plan for retired
Independent Trustees. Included in each fund's Trustees' compensation is a
pension expense for retired Independent Trustees for the year ended
March 31, 2004:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Pension Expense $1,374 $1,799 $2,372 $1,390 $2,330 $1,704 $2,359 $2,324
- -----------------------------------------------------------------------------------------------------------------------------------
Administrator - MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services
to certain funds for which MFS acts as investment adviser. Under an administrative services agreement between the funds and MFS,
MFS is entitled to partial reimbursement of the costs MFS incurs to provide these services, subject to review and approval by the
Board of Trustees. Each fund is allocated a portion of these administrative costs based on its size and relative average net
assets, subject to a maximum amount, (i.e., each fund will pay the lesser of its allocated costs or a maximum amount based on its
average daily net assets). For the year ended March 31, 2004, the maximum amount is based on the following annual percentages of
the fund's average daily net assets:
First $2 billion 0.0175%
- --------------------------------------------------------------------------------------------------------------
Next $2.5 billion 0.0130%
- --------------------------------------------------------------------------------------------------------------
Next $2.5 billion 0.0005%
- --------------------------------------------------------------------------------------------------------------
In excess of $7 billion 0.0000%
- --------------------------------------------------------------------------------------------------------------
For the year ended March 31, 2004, each fund paid MFS, which is listed below, that is equivalent to a percentage of average daily
net assets, to partially reimburse MFS for the costs of providing administrative services.
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses Paid $9,834 $19,182 $39,548 $12,211 $16,781 $14,216 $33,953 $15,589
- -----------------------------------------------------------------------------------------------------------------------------------
Percentage of average
daily net assets 0.0098% 0.0098% 0.0098% 0.0099% 0.0098% 0.0098% 0.0098% 0.0099%
- -----------------------------------------------------------------------------------------------------------------------------------
The maximum amount that could have been charged to the fund during the year ended March 31, 2004 for administrative costs:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
$17,644 $34,226 $70,322 $21,519 $30,061 $25,430 $60,383 $27,506
- -----------------------------------------------------------------------------------------------------------------------------------
Effective April 1, 2004 the maximum amount is based on the following annual percentages of each fund's average daily net assets:
First $2 billion 0.01120%
- ---------------------------------------------------------------------------------------------------------------
Next $2.5 billion 0.00832%
- ---------------------------------------------------------------------------------------------------------------
Next $2.5 billion 0.00032%
- ---------------------------------------------------------------------------------------------------------------
In excess of $7 billion 0.00000%
- ---------------------------------------------------------------------------------------------------------------
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received the following amounts for the year ended March 31,
2004 as its portion of the sales charge on sales of Class A shares of each fund:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
$35,697 $56,875 $78,359 $87,213 $54,929 $36,387 $61,487 $61,271
- -----------------------------------------------------------------------------------------------------------------------------------
The Trustees have adopted a distribution plan for Class A, Class B, and Class C shares pursuant to Rule 12b-1 of the Investment
Company Act of 1940 as follows:
Each fund's distribution plan provides that each fund will pay MFD an annual percentage of up to 0.35% per annum of its average
daily net assets attributable to Class A shares in order that MFD may pay expenses on behalf of each fund related to the
distribution and servicing of its shares. These expenses include a service fee paid to each securities dealer that enters into a
sales agreement with MFD of up to 0.25% per annum of each fund's average daily net assets of accounts attributable to such dealers
and a distribution fee to MFD of up to 0.10% per annum of each fund's average daily net assets attributable to a securities
dealer, which amounted to the following amounts for the year ended March 31, 2004.
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------------
$-- $9,517 $9,858 $308 $2,737 $1,384 $13,328 $5,318
- --------------------------------------------------------------------------------------------------------------------------------
During the year ended March 31, 2004, fees incurred under the distribution
plan as a percentage of each fund's average daily net assets attributable to
Class A shares on an annualized basis were as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------------
-- 0.25% 0.35% 0.10% 0.35% 0.35% 0.35% 0.35%
- --------------------------------------------------------------------------------------------------------------------------------
Payments of the Mississippi Fund's 0.35% per annum Class A distribution and service fee will be implemented on such date as the
Trustees of the Trust may determine. In the case of the New York Fund, payment of the 0.10% per annum Class A distribution fee
will be implemented on such date as the Trustees of the Trust may determine.
Additionally for the Pennsylvania Fund the remaining portion of the 0.25% Class A service fee is not yet implemented and will
become payable on such a date as the Trustees of the Trust may determine.
Each fund's distribution plan provides that each fund will pay MFD an annual percentage of up to 0.75% per annum, and a service
fee of 0.25% per annum, of the fund's average daily net assets attributable to Class B and Class C shares. MFD will pay to
securities dealers that enter into a sales agreement with MFD all or a portion of the service fee attributable to Class B and
Class C shares, and will pay to such securities dealers all of the distribution fee attributable to Class C shares. The service
fee is intended to be consideration for services rendered by the dealer with respect to Class B and Class C shares, MFD retains
the service fee for accounts not attributable to a securities dealer. For Class B and Class C service fees retained for the year
ended March 31, 2004 were as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Class B $-- $132 $64 $397 $459 $-- $52 $103
- -----------------------------------------------------------------------------------------------------------------------------------
Class C N/A $3 $220 N/A N/A N/A $226 N/A
- -----------------------------------------------------------------------------------------------------------------------------------
During the year ended March 31, 2004, fees incurred under the distribution plan as a percentage of average daily net assets
attributable to Class B and Class C shares on an annualized basis were as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 0.82% 1.00% 1.00% 0.90% 1.00% 1.00% 1.00% 1.00%
- -----------------------------------------------------------------------------------------------------------------------------------
Class C N/A 1.00% 1.00% N/A N/A N/A 1.00% N/A
- -----------------------------------------------------------------------------------------------------------------------------------
Except in the case of the 0.25% per annum Class B service fee paid by the Mississippi Fund upon sale of Class B shares in the
first year, payment of the Class B service fee will be suspended until such date as the Trustees of the Trust may determine.
Except in the case of the 0.25% per annum Class B service fee paid by the Pennsylvania Fund upon sale of Class B shares in the
first year, the Class B shares service fee is currently 0.10% until such date as the Trustees of the Trust may determine.
Certain Class A and Class C shares are subject to a contingent deferred sales charge in the event of a shareholder redemption
within, for Class A shares, 12 months following the purchase, and, for Class C shares, the first year from the end of the calendar
month of purchase. A contingent deferred sales charge is imposed on shareholder redemptions of Class B shares in the event of a
shareholder redemption within six years from the end of the calendar month of purchase. MFD receives all contingent deferred sales
charges. Contingent deferred sales charges imposed during the year ended March 31, 2004, were as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
CDSC IMPOSED FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Class A $-- $4,037 $-- $1,870 $48,897 $-- $5 $--
- -----------------------------------------------------------------------------------------------------------------------------------
Class B $10,114 $111,073 $90,519 $111,207 N/A $41,439 $41,151 $46,466
- -----------------------------------------------------------------------------------------------------------------------------------
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Shareholder Servicing
Fee $110,308 $213,973 $439,629 $135,470 $187,929 $158,979 $377,499 $171,962
- -----------------------------------------------------------------------------------------------------------------------------------
Also included in shareholder servicing costs are out-of-pocket expenses, paid to MFSC, for the year ended March 31, 2004, as well
as other expenses paid to unaffiliated vendors. The amounts for the year ended March 31, 2004 are the following:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Out-of-pocket expenses $10,408 $22,131 $40,256 $18,235 $16,754 $17,149 $40,704 $15,763
- -----------------------------------------------------------------------------------------------------------------------------------
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than U.S. government securities and short-term obligations, were as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Purchases $11,966,578 $31,206,979 $37,100,458 $39,866,773 $30,118,136 $26,194,151 $38,624,224 $26,450,145
- -----------------------------------------------------------------------------------------------------------------------------------
Sales $17,971,483 $25,402,813 $57,334,091 $28,648,017 $26,305,424 $27,961,088 $53,103,215 $29,584,390
- -----------------------------------------------------------------------------------------------------------------------------------
The cost and unrealized appreciation and depreciation in the value of the investments owned by each fund, as computed on a federal
income tax basis, are as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
Aggregate cost $87,620,910 $174,735,873 $352,340,775 $116,610,890 $155,612,518 $131,879,641 $307,929,587 $144,119,633
- ----------------------------------------------------------------------------------------------------------------------------------
Gross unrealized
appreciation $6,351,014 $19,090,703 $34,813,245 $8,337,343 $15,758,594 $11,077,665 $29,287,308 $13,146,597
- ----------------------------------------------------------------------------------------------------------------------------------
Gross unrealized
depreciation (221,225) (652,461) (347,437) (613,832) (126,441) (287,397) (1,121,006) (522,616)
- ------------------------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation $6,129,789 $18,438,242 $34,465,808 $7,723,511 $15,632,153 $10,790,268 $28,166,302 $12,623,981
- ------------------------------------------------------------------------------------------------------------------------------------
(5) SHARES OF BENEFICIAL INTEREST
Each fund's Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial
interest. Transactions in each fund's shares were as follows:
MISSISSIPPI FUND NEW YORK FUND NORTH CAROLINA FUND PENNSYLVANIA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Year ended 3/31/04 (000 Omitted) SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold 835 $8,379 1,733 $19,959 1,903 $23,424 2,013 $20,634
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 199 1,999 336 3,864 742 9,087 177 1,812
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (1,553) (15,577) (2,215) (25,477) (3,698) (45,354) (1,636) (16,776)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (519) $(5,199) (146) $(1,654) (1,053) $(12,843) 554 $5,670
- -----------------------------------------------------------------------------------------------------------------------------------
Year ended 3/31/03 (000 Omitted)
Shares sold 1,308 $12,963 1,999 $22,648 1,660 $20,028 2,820 $28,556
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 206 2,042 347 3,932 780 9,413 165 1,663
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (673) (6,672) (1,908) (21,538) (2,539) (30,707) (1,157) (11,682)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 841 $8,333 438 $5,042 (99) $(1,266) 1,828 $18,537
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Year ended 3/31/04 (000 Omitted)
Shares sold 228 $2,276 900 $10,362 380 $4,673 967 $9,968
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 27 273 86 980 96 1,174 98 1,007
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (227) (2,280) (943) (10,800) (1,210) (14,801) (960) (9,869)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 28 $269 43 $542 (734) $(8,954) 105 $1,106
- -----------------------------------------------------------------------------------------------------------------------------------
Year ended 3/31/03 (000 Omitted)
Shares sold 469 $4,670 1,444 $16,373 776 9,368 2,185 $22,167
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 25 246 73 824 116 1,397 81 822
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (267) (2,639) (685) (7,748) (990) (11,945) (581) (5,872)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 227 $2,277 832 $9,449 (98) $(1,180) 1,685 $17,117
- -----------------------------------------------------------------------------------------------------------------------------------
NEW YORK FUND NORTH CAROLINA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Year ended 3/31/04 (000 Omitted) SHARES AMOUNT SHARES AMOUNT
Shares sold 965 $11,104 748 $9,197
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 39 449 76 934
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (322) (3,689) (558) (6,811)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase 682 $7,864 266 $3,320
- -----------------------------------------------------------------------------------------------------------------------------------
Year ended 3/31/03 (000 Omitted)
Shares sold 400 $4,541 819 $9,887
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 30 334 67 811
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (140) (1,591) (318) (3,843)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase 290 $3,284 568 $6,855
- -----------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND WEST VIRGINIA FUND
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Year ended 3/31/04 (000 Omitted) SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold 1,835 $23,147 1,281 $14,063 1,257 $14,684 1,027 $12,116
- ---------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 296 3,724 245 2,675 662 7,719 331 3,896
- ---------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (1,556) (19,575) (1,291) (14,092) (2,781) (32,458) (1,330) (15,638)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 575 $7,296 235 $2,646 (862) $(10,055) 28$374
- ---------------------------------------------------------------------------------------------------------------------------------
Year ending 3/31/03 (000 Omitted)
Shares sold 1,548 $19,226 2,101 $22,622 1,591 $18,255 1,461 $17,040
- ---------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 302 3,742 269 2,902 660 7,573 352 4,100
- ---------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (1,610) (20,054) (1,456) (15,736) (2,560) (29,382) (716) (8,365)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 240 $2,914 914 $9,788 (309) $(3,554) 1,097 $12,775
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Year ended 3/31/04 (000 Omitted)
Shares sold 492 $6,203 171 $1,874 246 $2,882 234 $2,742
- ---------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 77 965 49 539 43 504 36 430
- ---------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (650) (8,191) (529) (5,787) (474) (5,531) (422) (4,947)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (81) $(1,023) (309) $(3,374) (185) $(2,145) (152) $(1,775)
- ---------------------------------------------------------------------------------------------------------------------------------
Year ended 3/31/03 (000 Omitted)
Shares sold 611 $7,578 470 $5,054 449 $5,163 481 $5,590
- ---------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 75 931 60 647 45 519 40 469
- ---------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (530) (6,556) (513) (5,525) (722) (8,269) (304) (3,526)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 156 $1,953 17 $176 (228) $(2,587) 217 $2,533
- ---------------------------------------------------------------------------------------------------------------------------------
VIRGINIA FUND
- -------------------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Year ended 3/31/04 (000 Omitted) SHARES AMOUNT
Shares sold 234 $2,754
- -------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 30 351
- -------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (226) (2,626)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase 38 $479
- -------------------------------------------------------------------------------------------------------------------------------
Year ended 3/31/03 (000 Omitted)
Shares sold 380 $4,367
- -------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 27 313
- -------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (261) (2,991)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase 146 $1,689
- -------------------------------------------------------------------------------------------------------------------------------
(6) LINE OF CREDIT
The trust and other affiliated funds participate in an $800 million unsecured line of credit provided by a syndication of banks
under a line of credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on
its borrowings, at a rate equal to the bank's base rate plus 0.50%. In addition, a commitment fee, based on the average daily,
unused portion of the line of credit, is allocated among the participating funds at the end of each calendar quarter. The
commitment fee allocated to each fund for the year ended March 31, 2004 was between $587 and $2,617. None of the funds had
significant borrowings during the year.
(7) FINANCIAL INSTRUMENTS
Each fund trades financial instruments with off-balance-sheet risk in the normal course of its investing activities in order to
manage exposure to market risks such as interest rates. These financial instruments include swap agreements. The notional or
contractual amounts of these instruments represent the investment each fund has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these
instruments is meaningful only when all related and offsetting transactions are considered.
SWAP AGREEMENTS
- ---------------
Interest Rate Swap Agreements
Interest Rate Swap Agreements - continued
NOTIONAL
PRINCIPAL AMOUNT CASH FLOWS UNREALIZED
OF CONTRACT RECEIVED BY CASH FLOWS PAID APPRECIATION
FUND EXPIRATION (000) THE FUND BY THE FUND (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi Fund Floating -- 7
Day
BMA Swap
11/15/04 2,000 Index Fixed -- 1.945% $(12,462)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
10/31/12 1,000 X 78.875% Index (4,979)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
12/18/12 2,000 X 78.875% Index (10,771)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
9/22/14 500 Index Fixed -- 3.443% 5,310
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/14 1,900 Index Fixed -- 3.444% 26,160
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/14 1,900 Index Fixed -- 3.73% (17,457)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/14 1,900 Index Fixed -- 3.576% 6,529
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/17/16 1,500 Index Fixed -- 4.09% (61,664)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
5/26/19 2,000 Index Fixed -- 4.152% (63,690)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/9/19 1,000 Index Fixed -- 4.278% (47,772)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/23/19 1,000 Index Fixed -- 4.23% (41,063)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/14/19 500 Index Fixed -- 4.137% (12,663)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/11/19 1,000 Index Fixed -- 4.069% (18,629)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/25/19 1,200 Index Fixed -- 4.015% (9,513)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
4/7/24 1,000 Index Fixed -- 4.159% (18,023)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/34 1,000 Fixed -- 4.132% Index (25,295)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/34 1,000 Fixed -- 4.322% Index 1,223
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/34 1,000 Fixed -- 4.200% Index (17,462)
- ------------------------------------------------------------------------------------------------------------------------------------
$(322,221)
- ------------------------------------------------------------------------------------------------------------------------------------
New York Fund Floating -- 7
Day
BMA Swap
11/15/04 4,000 Index Fixed -- 1.945% $(24,869)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
10/31/12 1,750 X 78.875% Index (8,714)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
12/18/12 3,500 X 78.875% Index (18,850)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
9/22/14 800 Index Fixed -- 3.443% 8,496
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/14 3,800 Index Fixed -- 3.444% 52,323
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/14 3,800 Index Fixed -- 3.73% (34,915)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/14 3,800 Index Fixed -- 3.576% 13,057
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/17/16 1,500 Index Fixed -- 4.09% (61,664)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
5/18/19 2,000 Index Fixed -- 4.184% (79,192)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
5/26/19 2,000 Index Fixed -- 4.152% (63,690)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/23/19 1,000 Index Fixed -- 4.23% (41,063)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/14/19 400 Index Fixed -- 4.137% (10,131)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/21/19 1,750 Index Fixed -- 4.0495% (26,370)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/28/19 1,750 Index Fixed -- 4.00% (21,771)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/11/19 2,000 Index Fixed -- 4.069% (37,259)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/25/19 1,500 Index Fixed -- 4.015% (11,891)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
4/7/24 2000 Index Fixed -- 4.159% (36,047)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/34 2,000 Fixed -- 4.132% Index (50,587)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/34 2,000 Fixed -- 4.322% Index 2,446
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/34 2,000 Fixed -- 4.200% Index (34,924)
- ------------------------------------------------------------------------------------------------------------------------------------
$(485,615)
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina Fund Floating -- 7
Day
BMA Swap
11/15/04 5,200 Index Fixed -- 1.945% $(32,390)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
10/31/12 4,000 X 78.75% Index (19,926)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
12/18/12 8,100 X 78.875% Index (43,632)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
9/22/14 1,000 Index Fixed -- 3.443% 10,620
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/14 7,800 Index Fixed -- 3.444% 107,400
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/14 7,800 Index Fixed -- 3.73% (71,667)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/14 7,600 Index Fixed -- 3.576% 26,115
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/17/16 2,000 Index Fixed -- 4.09% (82,218)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
5/18/19 10,000 Index Fixed -- 4.184% (395,960)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/14/19 800 Index Fixed -- 4.137% (20,261)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/11/19 3,000 Index Fixed -- 4.069% (55,888)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/25/19 3,000 Index Fixed -- 4.015% (23,782)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
4/7/24 4,000 Index Fixed -- 4.159% (72,093)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/34 4,000 Fixed -- 4.132% Index (101,177)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/34 4,000 Fixed -- 4.322% Index 4,892
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/34 4,000 Fixed -- 4.200% Index (69,848)
- ------------------------------------------------------------------------------------------------------------------------------------
$(839,815)
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Fund Floating -- 7
Day
BMA Swap
11/15/04 1,800 Index Fixed -- 1.945% $(11,216)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
10/31/12 1,000 X 78.875% Index (4,979)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
12/18/12 2,000 X 78.875% Index (10,771)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
9/22/14 1,500 Index Fixed -- 3.443% 15,930
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/14 2,375 Index Fixed -- 3.444% 32,702
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/14 2,375 Index Fixed -- 3.73% (21,822)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/14 2,470 Index Fixed -- 3.576% 8,487
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/17/16 850 Index Fixed -- 4.09% (34,943)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
5/18/19 2,000 Index Fixed -- 4.184% (79,192)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
5/26/19 2,000 Index Fixed -- 4.152% (63,690)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/9/19 3,000 Index Fixed -- 4.278% (143,317)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/23/19 750 Index Fixed -- 4.23% (30,798)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/14/19 500 Index Fixed -- 4.137% (12,663)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/4/19 1,000 Index Fixed -- 4.039% (12,562)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/11/19 1,000 Index Fixed -- 4.069% (18,629)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/25/19 1,000 Index Fixed -- 4.015% (7,927)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
4/7/24 1,300 Index Fixed -- 4.159% (23,430)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/34 1,250 Fixed -- 4.132% Index (31,619)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/34 1,250 Fixed -- 4.322% Index 1,530
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/34 1,300 Fixed -- 4.200% Index (22,701)
- ------------------------------------------------------------------------------------------------------------------------------------
$(471,610)
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina Fund Floating -- 7
Day
BMA Swap
11/15/04 4,000 Index Fixed -- 1.945% $(24,923)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
10/31/12 1,650 X 78.875% Index (8,216)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
12/18/12 3,400 X 78.75% Index (18,311)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
9/22/14 900 Index Fixed -- 3.443% 9,558
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/14 3,325 Index Fixed -- 3.444% 45,782
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/14 3,325 Index Fixed -- 3.73% (30,550)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/14 3,325 Index Fixed -- 3.576% 11,425
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/17/16 1,500 Index Fixed -- 4.09% (61,664)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/21/19 1,500 Index Fixed -- 4.0495% (22,602)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/28/19 1,500 Index Fixed -- 4.00% (18,661)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/11/19 1,500 Index Fixed -- 4.069% (27,944)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/25/19 1,500 Index Fixed -- 4.015% (11,891)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
4/7/24 1,800 Index Fixed -- 4.159% (32,442)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/34 1,750 Fixed -- 4.132% Index (44,265)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/34 1,750 Fixed -- 4.322% Index 2,140
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/34 1,750 Fixed -- 4.200% Index (30,558)
- ------------------------------------------------------------------------------------------------------------------------------------
$(263,122)
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee Fund Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
10/31/12 1,400 X 78.875% Index $(6,971)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
12/18/12 2,800 X 78.875% Index (15,079)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
9/22/14 1,000 Index Fixed -- 3.443% 10,620
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/14 2,850 Index Fixed -- 3.444% 39,242
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/14 2,850 Index Fixed -- 3.73% (26,186)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/14 2,850 Index Fixed -- 3.576% 9,793
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/17/16 1,000 Index Fixed -- 4.09% (41,109)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/28/19 1,250 Index Fixed -- 4.00% (15,551)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/11/19 1,000 Index Fixed -- 4.069% (18,629)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/25/19 1,000 Index Fixed -- 4.015% (7,927)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
4/7/24 1,400 Index Fixed -- 4.159% (25,233)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/34 1,500 Fixed -- 4.132% Index (37,942)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/34 1,500 Fixed -- 4.322% Index 1,835
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/34 1,500 Fixed -- 4.200% Index (26,193)
- ------------------------------------------------------------------------------------------------------------------------------------
$(159,330)
- ------------------------------------------------------------------------------------------------------------------------------------
Virginia Fund Floating -- 7
Day
BMA Swap
11/15/04 4,000 Index Fixed -- 1.945% $(24,923)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
10/31/12 3,400 X 78.875% Index (16,930)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
12/18/12 6,900 X 78.875% Index (37,161)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
9/22/14 2,000 Index Fixed -- 3.443% 21,241
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/14 7,000 Index Fixed -- 3.444% 96,384
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/14 7,000 Index Fixed -- 3.73% (64,317)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/14 6,650 Index Fixed -- 3.576% 22,850
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/17/16 2,500 Index Fixed -- 4.09% (102,773)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/2/19 5,000 Index Fixed -- 4.103% (146,115)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/21/19 2,500 Index Fixed -- 4.0495% (37,671)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/28/19 2,500 Index Fixed -- 4.00% (31,101)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/25/19 2,900 Index Fixed -- 4.015% (22,989)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
4/7/24 3,500 Index Fixed -- 4.159% (63,082)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/34 3,500 Fixed -- 4.132% Index (88,531)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/34 3,500 Fixed -- 4.322% Index 4,281
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/34 3,500 Fixed -- 4.200% Index (61,117)
- ------------------------------------------------------------------------------------------------------------------------------------
$(551,954)
- ------------------------------------------------------------------------------------------------------------------------------------
West Virginia Fund Floating -- 7
Day
BMA Swap
11/15/04 3,750 Index Fixed -- 1.945% $(23,366)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
10/31/12 1,500 X 78.875% Index (7,469)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Floating -- 3M Day
LIBOR BMA Swap
12/18/12 3,000 X 78.875% Index (16,157)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
9/22/14 1,000 Index Fixed -- 3.443% 10,620
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/14 3,040 Index Fixed -- 3.444% 41,858
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/14 3,040 Index Fixed -- 3.73% (27,932)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/14 3,040 Index Fixed -- 3.576% 10,446
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
6/17/16 2,650 Index Fixed -- 4.09% (108,939)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
5/26/19 2,000 Index Fixed -- 4.152% (63,690)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/14/19 1,500 Index Fixed -- 4.137% (37,990)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/21/19 1,500 Index Fixed -- 4.0495% (22,603)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
7/28/19 1,500 Index Fixed -- 4.00% (18,661)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/11/19 1,000 Index Fixed -- 4.069% (18,629)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
8/25/19 1,300 Index Fixed -- 4.015% (10,305)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
4/7/24 1,500 Index Fixed -- 4.159% (27,035)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
10/27/34 1,600 Fixed -- 4.132% Index (40,471)
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/9/34 1,600 Fixed -- 4.322% Index 1,957
- ------------------------------------------------------------------------------------------------------------------------------------
Floating -- 7
Day
BMA Swap
11/10/34 1,600 Fixed -- 4.200% Index (27,939)
- ------------------------------------------------------------------------------------------------------------------------------------
$(386,304)
- ------------------------------------------------------------------------------------------------------------------------------------
Rate Lock Swap Agreements
Description - Agreement with Merrill Lynch terminating April 13, 2004 to pay the difference between the notional value and the
market value of a bond with a 5.106% coupon maturing on 4/13/25 priced at a yield to maturity equal to the MMD general obligation
yield curve rate for the designated maturity years as of the close of business on the termination date, if negative (received if
positive):
NOTIONAL
PRINCIPAL UNREALIZED
AMOUNT OF DEPRECIATION
FUND CONTRACT (000) ($)
- -----------------------------------------------------------------------------------------------------------------------------------
Mississippi Fund 800 (73,406)
- -----------------------------------------------------------------------------------------------------------------------------------
New York Fund 1,250 (114,696)
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Fund 650 (59,642)
- -----------------------------------------------------------------------------------------------------------------------------------
South Carolina Fund 900 (82,581)
- -----------------------------------------------------------------------------------------------------------------------------------
Description - Agreement with Goldman Sachs terminating April 14, 2004 to pay the difference between the notional value and the
market value of a bond with a 5.10% coupon maturing on 4/14/25 priced at a yield to maturity equal to the MMD general obligation
yield curve rate for the designated maturity year as of the close of business on the termination date, if negative (received if
positive):
NOTIONAL
PRINCIPAL UNREALIZED
AMOUNT OF DEPRECIATION
FUND CONTRACT (000) ($)
- -----------------------------------------------------------------------------------------------------------------------------------
Mississippi Fund 750 (66,360)
- -----------------------------------------------------------------------------------------------------------------------------------
New York Fund 1,250 (110,600)
- -----------------------------------------------------------------------------------------------------------------------------------
North Carolina Fund 1,250 (110,600)
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Fund 625 (55,300)
- -----------------------------------------------------------------------------------------------------------------------------------
South Carolina Fund 875 (77,420)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Unrealized Depreciation on Rate Lock Swap Agreements:
UNREALIZED
DEPRECIATION
FUND ($)
- -----------------------------------------------------------------------------------------------------------------------------------
Mississippi Fund (139,766)
- -----------------------------------------------------------------------------------------------------------------------------------
New York Fund (225,296)
- -----------------------------------------------------------------------------------------------------------------------------------
North Carolina Fund (110,600)
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Fund (114,942)
- -----------------------------------------------------------------------------------------------------------------------------------
South Carolina Fund (160,001)
- -----------------------------------------------------------------------------------------------------------------------------------
At March 31, 2004, each fund had sufficient cash and/or securities to cover any commitments under these contracts.
(8) RESTRICTED SECURITIES
Each fund may invest not more than 15% of its net assets in securities which are subject to legal or contractual restrictions on
resale. At March 31, 2004 the funds owned the following restricted securities, excluding securities issued under Rule 144A, which
may not be publicly sold without registration under the Securities Act of 1933. Each fund does not have the right to demand that
such securities be registered. The value of these securities is determined by an independent valuations furnished by dealers or by
a pricing service, or if not available, at fair value under the direction of the Trustees.
DATE OF
ACQUISITIO SHARE/PAR
FUND DESCRIPTION ACQUISITION AMOUNT COST VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Mississippi Fund Commonwealth of Puerto Rico, ROLS, FGIC, 9.996%, 2016 8/5/02 3,110,000 $4,023,905 $4,189,108
Guam Power Authority Rev., RITES, AMBAC 9.0426%, 2013 5/20/99 1,000,000 1,072,720 1,239,580
Puerto Rico Municipal Finance Agency, RITES, 9.6169%, 2017 1/6/00 750,000 703,620 955,170
Puerto Rico Public Finance Corp., AMBAC, RITES, 9.3041% 9/30/99 500,000 509,110 660,660
- -----------------------------------------------------------------------------------------------------------------------------------
$7,044,518
- -----------------------------------------------------------------------------------------------------------------------------------
New York Fund Commonwealth of Puerto Rico, ROLS, XLCA 9.806%, 2017 10/22/01 1,350,000 $1,634,526 $1,799,037
Guam Power Authority Rev., RITES, AMBAC 9.043%, 2014 5/20/99 500,000 531,950 612,800
Niagara Falls, NY, Bridge Commission Toll Rev., RITES, FGIC,
9.02010%, 2015 5/21/99 3,500,000 3,755,920 4,520,460
Triborough Bridge & Tunnel Authority Rev., NY, RITES,
9.508%, 2017 4/18/00 5,000,000 5,018,300 6,728,500
- -----------------------------------------------------------------------------------------------------------------------------------
$13,660,797
- -----------------------------------------------------------------------------------------------------------------------------------
North Carolina Fund Commonwealth of Puerto Rico, Highway & Transportation
Authority Rev., RITES, FSA, 10.5541%, 2018 2/26/99 5,425,000 $7,037,418 $7,828,709
North Carolina Eastern Municipal Power Agency, RITES, AMBAC,
10.5082%, 2018 5/26/00 6,500,000 6,552,130 9,195,160
North Carolina Municipal Power Agency, MBIA, 9.358%s, 2019 3/3/03 5,000,000 5,726,600 5,870,300
North Carolina Municipal Power Agency, ROLS, 9.358%, 2020 3/3/03 3,000,000 3,376,680 3,485,460
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2016 9/30/99 1,500,000 1,471,890 1,981,260
- -----------------------------------------------------------------------------------------------------------------------------------
$28,360,889
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Fund Commonwealth of Puerto Rico, ROLS, FGIC, 9.896%, 2015 8/5/02 1,000,000 $1,292,920 $1,348,100
Commonwealth of Puerto Rico, ROLS, XLCA 9.806%, 2017 10/22/01 1,000,000 1,210,760 1,332,620
Guam Power Authority Rev., RITES, AMBAC, 9.043%, 2014 5/20/99 2,170,000 2,308,663 2,659,552
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.304%, 2013 9/30/99 500,000 509,110 660,660
Commonwealth of Puerto Rico, ROLS, Highway & Transportation
Authority, MBIA, 9.896%, 2020 4/25/03 1,500,000 1,970,477 2,017,890
- -----------------------------------------------------------------------------------------------------------------------------------
$8,018,822
- -----------------------------------------------------------------------------------------------------------------------------------
South Carolina Fund Commonwealth of Puerto Rico, RITES, 9.5771%, 2018-2019 10/5/00 3,750,000 $3,860,541 $4,750,155
Commonwealth of Puerto Rico, RITES, MBIA, 10.0771%, 2020 3/30/00 2,000,000 2,043,232 2,661,000
Puerto Rico Electric Power Authority, RITES, FSA,
9.0063%, 2015 9/30/99 1,000,000 976,500 1,219,140
Commonwealth of Puerto Rico Municipal, RITES, FSA,
10.6246%, 2016 1/6/00 850,000 882,124 1,155,626
Puerto Rico Public Finance Corp., RITES, AMBAC, 3/31/99 &
9.3041%, 2013-2019 9/30/99 2,675,000 1,610,119 3,526,445
- -----------------------------------------------------------------------------------------------------------------------------------
$13,312,366
- -----------------------------------------------------------------------------------------------------------------------------------
Virginia Fund Guam Power Authority Rev., RITES, AMBAC, 9.0426%, 2015 5/20/99 1,010,000 $1,058,642 $1,232,463
Puerto Rico Electric Power Authority Rev., RITES, FSA,
10.0771%, 2017 8/28/00 2,500,000 2,770,600 3,415,550
Puerto Rico Electric Power Authority Rev., RITES, FSA,
9.8271%, 2019 8/28/00 1,270,000 1,345,006 1,638,046
Puerto Rico Electric Power Authority Rev., RITES, FSA,
9.1771%, 2020 8/28/00 1,250,000 1,240,075 1,535,000
Puerto Rico Municipal Finance Agency, RITES, FSA,
10.6246%, 2016 1/6/00 1,105,000 1,148,670 1,502,314
Puerto Rico Municipal Finance Agency, RITES, FSA,
9.6169%, 2017 1/6/00 615,000 576,968 783,239
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041%, 2013 9/30/99 2,000,000 2,036,440 2,642,640
Puerto Rico Public Finance Corp., RITES, AMBAC, 9.3041, 2016 3/31/99 500,000 560,030 660,420
Virginia Resources Authority Rev., ROLS, 8.761%, 2021 3/12/01 1,520,000 1,508,372 1,691,426
Virginia Resources Authority Rev., ROLS, 8.76%, 2023 3/12/01 2,510,000 1,612,568 2,732,788
Virginia Resources Authority Rev., ROLS, 8.816%, 2033 3/12/01 1,360,000 2,586,057 1,461,442
- -----------------------------------------------------------------------------------------------------------------------------------
$19,295,328
- -----------------------------------------------------------------------------------------------------------------------------------
West Virginia Fund Commonwealth of Puerto Rico, Public Improvement, RITES, MBIA,
10.0771%, 2019 3/30/00 3,000,000 $3,090,720 $3,991,500
Puerto Rico Municipal Finance Agency, RITES, FSA,
9.6169%, 2017 1/6/00 900,000 844,344 1,146,204
West Virginia Building Commission, "A", RITES, AMBAC,
9.2238%, 2018 5/5/99 4,520,000 4,888,560 5,784,063
West Virginia Building Commission, "B", RITES, AMBAC,
9.2238%, 2018 5/5/99 1,250,000 1,351,925 1,599,575
- -----------------------------------------------------------------------------------------------------------------------------------
$12,521,342
- -----------------------------------------------------------------------------------------------------------------------------------
At March 31, 2004, restricted securities constituted the following percentages of each fund's net assets:
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA SOUTH CAROLINA VIRGINIA WEST VIRGINIA
FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
7.4% 7.0% 7.3% 6.5% 7.6% 5.7% 7.9%
- -----------------------------------------------------------------------------------------------------------------------------------
(9) CONCENTRATION OF CREDIT RISK
Since each Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to
factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. The
risk associated with such factors is mitigated by the fact that a percentage of securities in a portfolio of investments are
backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. At year
end, March 31, 2004, the percentage of holdings that carried such enhancements were as follows:
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
69.0% 43.2% 46.8% 68.9% 63.1% 57.4% 37.3% 71.6%
- -----------------------------------------------------------------------------------------------------------------------------------
For each fund, the greatest exposure to any one institution or agency did not exceed total investments as of year end March 31,
2004, were as follows:
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
20.2% 15.0% 14.8% 25.7% 19.2% 20.3% 13.7% 30.2%
- -----------------------------------------------------------------------------------------------------------------------------------
(10) LEGAL PROCEEDINGS
On March 31, 2004, MFS settled an administrative proceeding regarding
disclosure of brokerage allocation practices in connection with fund sales.
Under the terms of the settlement, in which MFS neither admitted nor denied any
wrongdoing, MFS agreed to pay (one dollar) $1.00 in disgorgement and $50
million in penalty to certain MFS funds, pursuant to a plan to be approved by
an independent distribution consultant. The agreement with the SEC is reflected
in an order of the SEC. The settlement order states that MFS failed to
adequately disclose to the Boards of Trustees and to shareholders of the MFS
funds the specifics of its preferred arrangements with certain brokerage firms
selling MFS fund shares. The settlement order states that MFS had in place
policies designed to obtain best execution of all fund trades. As part of the
settlement, MFS has retained an independent compliance consultant to review the
completeness of its disclosure to fund trustees and to fund shareholders of
strategic alliances between MFS or its affiliates and broker- dealers and other
financial advisers who support the sale of fund shares. The brokerage
allocation practices which were the subject of this proceeding were
discontinued by MFS in November 2003.
In addition, in February, 2004, MFS reached agreement with the Securities and
Exchange Commission ("SEC"), the New York Attorney General ("NYAG") and the
Bureau of Securities Regulation of the State of New Hampshire ("NH") to settle
administrative proceedings alleging false and misleading information in certain
MFS fund prospectuses regarding market timing and related matters (the
"February Settlements"). These regulators alleged that prospectus language for
certain MFS funds was false and misleading because, although the prospectuses
for those funds in the regulators' view indicated that the funds prohibited
market timing, MFS did not limit trading activity in 11 domestic large cap
stock, high grade bond and money market funds. MFS' former Chief Executive
Officer, John W. Ballen, and former President, Kevin R. Parke, also reached
agreement with the SEC in which they agreed to, among other terms, monetary
fines and temporary suspensions from association with any investment adviser or
registered investment company. Messrs. Ballen and Parke have resigned their
positions with, and will not be returning to, MFS and the MFS funds. Under the
terms of the February Settlements, MFS and the executives neither admit nor
deny wrongdoing.
Under the terms of the February Settlements, a $225 million pool has been
established for distribution to shareholders in certain of the MFS funds
offered to retail investors ("Retail Funds"), which has been funded by MFS and
of which $50 million is characterized as a penalty. This pool will be
distributed in accordance with a methodology developed by an independent
distribution consultant in consultation with MFS and the Boards of Trustees of
the Retail Funds, and acceptable to the SEC. MFS has further agreed with the
NYAG to reduce its management fees in the aggregate amount of approximately $25
million annually over the next five years, and not to increase certain
management fees during this period. MFS has also paid an administrative fine to
NH in the amount of $1 million, which will be used for investor education
purposes (NH will retain $250,000 and $750,000 will be contributed to the North
American Securities Administrators Association's Investor Protection Trust). In
addition, under the terms of the February Settlements, MFS is in the process of
adopting certain governance changes and reviewing its policies and procedures.
Since December 2003, MFS, Sun Life Financial Inc., various MFS funds, the
Trustees of these MFS funds, and certain officers of MFS have been named as
defendants in multiple lawsuits filed in federal and state courts. The lawsuits
variously have been commenced as class actions or individual actions on behalf
of investors who purchased, held or redeemed shares of the funds during
specified periods, as class actions on behalf of participants in certain
retirement plan accounts, or as derivative actions on behalf of the MFS funds.
The lawsuits generally allege that some or all of the defendants (i) permitted
or acquiesced in market timing and/or late trading in some of the MFS funds,
inadequately disclosed MFS' internal policies concerning market timing and such
matters, and received excessive compensation as fiduciaries to the MFS funds,
or (ii) permitted or acquiesced in the improper use of fund assets by MFS to
support the distribution of fund shares and inadequately disclosed MFS' use of
fund assets in this manner. The actions assert that some or all of the
defendants violated the federal securities laws, including the Securities Act
of 1933 and the Securities Exchange Act of 1934, the Investment Company Act of
1940 and the Investment Advisers Act of 1940, the Employee Retirement Income
Security Act of 1974, as well as fiduciary duties and other violations of
common law. The lawsuits seek unspecified compensatory damages. Insofar as any
of the actions is appropriately brought derivatively on behalf of any of the
MFS funds, any recovery will inure to the benefit of the funds. The defendants
are reviewing the allegations of the multiple complaints and will respond
appropriately. Additional lawsuits based on similar allegations may be filed in
the future.
Any potential resolution of these matters may include, but not be limited to,
judgments or settlements for damages against MFS, the MFS funds, or any other
named defendant. As noted above, as part of the regulatory settlements, MFS has
established a restitution pool in the amount of $225 million to compensate
certain shareholders of the Retail Funds for damages that they allegedly
sustained as a result of market timing or late trading in certain of the funds,
and will pay $50 million to compensate certain MFS funds based upon the amount
of brokerage commissions allocated in recognition of fund sales. It is not
clear whether these amounts will be sufficient to compensate shareholders for
all of the damage they allegedly sustained, whether certain shareholders or
putative class members may have additional claims to compensation, or whether
the damages that may be awarded in any of the actions will exceed these
amounts. In the event the MFS funds incur any losses, costs or expenses in
connection with such lawsuits, the Boards of Trustees of the affected funds may
pursue claims on behalf of such funds against any party that may have liability
to the funds in respect thereof.
Review of these matters by the independent Trustees of the MFS funds and their
counsel is continuing. There can be no assurance that these regulatory actions
and lawsuits, or the adverse publicity associated with these developments, will
not result in increased fund redemptions, reduced sales of fund shares, or
other adverse consequences to the funds.
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- -------------------------------------------------------------------------------
To the Trustees of MFS Municipal Series Trust and Shareholders of the
Portfolios MFS Municipal Series Trust:
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of MFS Mississippi Municipal Bond
Fund, MFS New York Municipal Bond Fund, MFS North Carolina Municipal Bond Fund,
MFS Pennsylvania Municipal Bond Fund, MFS South Carolina Municipal Bond Fund,
MFS Tennessee Municipal Bond Fund, MFS Virginia Municipal Bond Fund, and MFS
West Virginia Municipal Bond Fund (portfolios of MFS Municipal Series Trust) as
of March 31, 2004, the related statements of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of the securities owned at March 31, 2004 by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial positions of each of the
aforementioned portfolios of MFS Municipal Series Trust as of March 31, 2004,
the results of their operations, the changes in their net assets, and their
financial highlights for the respective stated periods in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 14, 2004
- ----------------------------------------------------------------------------------------------------------------------------
TRUSTEES AND OFFICERS -- IDENTIFICATION AND BACKGROUND
- ----------------------------------------------------------------------------------------------------------------------------
The Trustees and officers of the Trust are listed below, together with their principal occupations during the past five
years. (Their titles may have varied during that period.) The business address of each Trustee and officer is 500 Boylston
Street, Boston, Massachusetts 02116.
PRINCIPAL OCCUPATIONS & OTHER
POSITION(s) HELD TRUSTEE/OFFICER DIRECTORSHIPS(2) DURING
NAME, DATE OF BIRTH WITH FUND SINCE(1) THE PAST FIVE YEARS
- ------------------- ---------------- --------------- -----------------------------
INTERESTED TRUSTEES
John W. Ballen(3) Trustee and President August 2001 until Massachusetts Financial Services Company,
(born 09/12/59) February 2004 Chief Executive Officer and Director (until
February 2004)
Robert J. Manning(3) Trustee and President February 2004 Massachusetts Financial Services Company,
(born 10/20/63) Chief Executive Officer, President, Chief
Investment Officer and Director
Kevin R. Parke(3) Trustee January 2002 until Massachusetts Financial Services Company,
(born 12/14/59) February 2004 President, Chief Investment Officer and
Director (until February 2004)
Robert C. Pozen(3) Trustee February 2004 Massachusetts Financial Services Company,
(born 08/08/46) Chairman (since February 2004); Harvard Law
School (education), John Olin Visiting
Professor (since July 2002); Secretary of
Economic Affairs, The Commonwealth of
Massachusetts (January 2002 to December
2002); Fidelity Investments, Vice Chairman
(June 2000 to December 2001); Fidelity
Management & Research Company (investment
adviser), President (March 1997 to July
2001); The Bank of New York (financial
services), Director; Bell Canada Enterprises
(telecommunications), Director; Telesat
(satellite communications), Director
Jeffrey L.Shames(3) Trustee October 1993 until Massachusetts Financial Services Company,
(born 06/02/55) February 2004 Chairman (until February 2004)
INDEPENDENT TRUSTEES
J. Atwood Ives Chairman February 1992 Private investor; KeySpan Corporation (energy
(born 05/01/36) related services), Director; Eastern
Enterprises (diversified services company),
Chairman, Trustee and Chief Executive Officer
(until November 2000)
Lawrence H. Cohn, M.D. Trustee August 1993 Brigham and Women's Hospital, Chief of
(born 03/11/37) Cardiac Surgery; Harvard Medical School,
Professor of Surgery
David H. Gunning Trustee January 2004 Cleveland-Cliffs, Inc. (mining products and
(born 05/30/42) service provider), Vice Chairman/ Director
(since April 2001); Encinitos Ventures
(private investment company), Principal (1997
to April 2001); Lincoln Electric Holdings,
Inc. (welding equipment manufacturer),
Director; Southwest Gas Corporation (natural
gas distribution company), Director
William R. Gutow Trustee December 1993 Private investor and real estate consultant;
(born 09/27/41) Capitol Entertainment Management Company
(video franchise), Vice Chairman
Amy B. Lane Trustee January 2004 Retired; Merrill Lynch & Co., Inc., Managing
(born 02/08/53) Director, Investment Banking Group (1997 to
February 2001); Borders Group, Inc. (book and
music retailer), Director; Federal Realty
Investment Trust (real estate investment
trust), Trustee
Lawrence T. Perera Trustee July 1981 Hemenway & Barnes (attorneys), Partner
(born 06/23/35)
William J. Poorvu Trustee August 1982 Private investor; Harvard University Graduate
(born 04/10/35) School of Business Administration, Class of
1961 Adjunct Professor in Entrepreneurship
Emeritus; CBL & Associates Properties, Inc.
(real estate investment trust), Director
J. Dale Sherratt Trustee August 1993 Insight Resources, Inc. (acquisition planning
(born 09/23/38) specialists), President; Wellfleet
Investments (investor in health care
companies), Managing General Partner (since
1993); Cambridge Nutraceuticals (professional
nutritional products), Chief Executive
Officer (until May 2001)
Elaine R. Smith Trustee February 1992 Independent health care industry consultant
(born 04/25/46)
Ward Smith Trustee October 1992 Private investor
(born 09/13/30)
OFFICERS
Robert J. Manning(3) President and Trustee February 2004 Massachusetts Financial Services Company,
(born 10/20/63) Chief Executive Officer, President, Chief
Investment Officer and Director.
John W. Ballen(3) President and Trustee August 2001 until Massachusetts Financial Services Company,
(born 09/12/59) February 2004 Chief Executive Officer and Director (until
February 2004)
James R. Bordewick, Jr.(3) Assistant Secretary September 1990 Massachusetts Financial Services Company,
(born 03/06/59) and Assistant Clerk Senior Vice President and Associate General
Counsel
Stephen E. Cavan(3) Secretary and Clerk December 1989 until Massachusetts Financial Services Company,
(born 11/06/53) March 2004 Senior Vice President, General Counsel and
Secretary (until March 2004)
Stephanie A. DeSisto(3) Assistant Treasurer May 2003 Massachusetts Financial Services Company,
(born 10/01/53) Vice President (since April 2003); Brown
Brothers Harriman & Co., Senior Vice
President (November 2002 to April 2003); ING
Groep N.V./Aeltus Investment Management,
Senior Vice President (prior to November
2002)
Robert R. Flaherty(3) Assistant Treasurer August 2000 Massachusetts Financial Services Company,
(born 09/18/63) Vice President (since August 2000); UAM Fund
Services, Senior Vice President (prior to
August 2000)
Richard M. Hisey(3) Treasurer August 2002 Massachusetts Financial Services Company,
(born 08/29/58) Senior Vice President (since July 2002); The
Bank of New York, Senior Vice President
(September 2000 to July 2002); Lexington
Global Asset Managers, Inc., Executive Vice
President and Chief Financial Officer (prior
to September 2000); Lexington Funds, Chief
Financial Officer (prior to September 2000)
Ellen Moynihan(3) Assistant Treasurer April 1997 Massachusetts Financial Services Company,
(born 11/13/57) Vice President
James O. Yost(3) Assistant Treasurer September 1990 Massachusetts Financial Services Company,
(born 06/12/60) Senior Vice President
- ------------------
(1) Date first appointed to serve as Trustee/Officer of an MFS fund. Each Trustee has served continuously since appointment
unless indicated otherwise.
(2) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., "public
companies").
(3) "Interested person" of MFS within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act) which is
the principal federal law governing investment companies like the series/the fund. The address of MFS is 500 Boylston
Street, Boston, Massachusetts 02116.
The Trust does not hold annual shareholder meetings for the purpose of electing Trustees, and Trustees are not elected for
fixed terms. The Trust will hold a shareholders' meeting in 2005 and at least once every five years thereafter to elect
Trustees. Each Trustee and officer holds office until his or her successor is chosen and qualified or until his or her earlier
death, resignation, retirement or removal.
Each of the Trust's Trustees and officers holds comparable positions with certain other funds of which MFS or a subsidiary is
the investment adviser or distributor, and, in the case of the officers, with certain affiliates of MFS. Each Trustee serves as
a board member of 109 funds within the MFS Family of Funds.
The Statement of Additional Information contains further information about the Trustees and is available without charge upon
request by calling 1-800-225-2606.
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT ADVISER CUSTODIANS
Massachusetts Financial Services Company State Street Bank and Trust Company
500 Boylston Street, Boston, MA 225 Franklin Street, Boston, MA 02110
02116-3741
AUDITORS
DISTRIBUTOR Deloitte & Touche LLP
MFS Fund Distributors, Inc. 200 Berkeley Street, Boston, MA 02116
500 Boylston Street, Boston, MA
02116-3741
PORTFOLIO MANAGERS
Michael L. Dawson
Geoffrey L. Schechter
- -------------------------------------------------------------------------------
MONEY MANAGEMENT FOR ALL TYPES OF INVESTORS
- -------------------------------------------------------------------------------
YOUR GOALS ARE IMPORTANT
MFS offers a complete range of investments and investment services to address
specific financial needs over time. When your investing goals change, you can
easily stay with MFS for the products you need, when you need them. Whether
you're investing for college or retirement expenses or for tax management or
estate planning, MFS will be there.
Ask your investment professional how MFS can help you move toward the goals
you've set.
MFS FAMILY OF FUNDS(R)
More than 50 portfolios offer domestic and international equity and fixed-
income investment across the full risk spectrum
VARIABLE ANNUITIES
A selection of annuity products with advantages for building and preserving
wealth
MFS 401(k) AND IRA SUITES
Retirement plans for businesses and individuals
MFS COLLEGE SAVINGS PLANS
Investment products to help meet education expenses
MFS PRIVATE PORTFOLIO SERVICES
Investment advisory services that provide custom products for high-net-worth
individuals
A prospectus for any MFS product can be obtained from your investment
professional. You should read the prospectus carefully before investing as it
contains complete information on the fund's investment objective(s), the risks
associated with an investment in the fund, the fees, charges, and expenses
involved. These elements, as well as other information contained in the
prospectus, should be considered carefully before investing.
Variable Annuities are offered through MFS/Sun Life Financial Distributors,
Inc.
- -------------------------------------------------------------------------------
FEDERAL TAX INFORMATION (Unaudited)
- -------------------------------------------------------------------------------
In January 2005, shareholders will be mailed a Tax Form Summary or Form 1099-
DIV, if applicable, reporting the federal tax status of all distributions paid
during the calendar year 2004.
The MFS North Carolina fund has designated $361,642 as a capital gain dividend
for the year ended March 31, 2004.
For federal income tax purposes, approximately 100% of the total dividends
paid by each fund from net investment income during the year ended March 31,
2004, is designated as an exempt-interest dividend.
- -------------------------------------------------------------------------------
CONTACT INFORMATION
- -------------------------------------------------------------------------------
INVESTOR INFORMATION
For information on MFS mutual funds, call your investment professional or, for
an information kit, call toll free: 1-800-225-2606 any business day from 8 a.m.
to 8 p.m. Eastern time.
A general description of the MFS Funds proxy voting policies and procedures is
available without charge, upon request, by calling 1-800-225-2606, by visiting
the About MFS section of mfs.com or by visiting the SEC's website at
http://www.sec.gov.
INVESTOR SERVICE
Write to us at: MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
Type of Information Phone number Hours, Eastern Time
- --------------------------------------------------------------------------------
General information 1-800-225-2606 8 a.m. to 8 p.m., any
business day
- --------------------------------------------------------------------------------
Speech- or hearing-impaired 1-800-637-6576 9 a.m. to 5 p.m., any
business day
- --------------------------------------------------------------------------------
Shares prices, account 1-800-MFS-TALK
balances exchanges (1-800-637-8255) 24 hours a day, 365 days a
or stock and bond outlooks touch-tone required year
- --------------------------------------------------------------------------------
WORLD WIDE WEB
Go to MFS.COM for a clear view of market events, investor education, account
access, and product and performance insights.
Go paperless with EDELIVERY: Join your fellow shareholders who are already
taking advantage of this great new benefit from MFS. With eDelivery, we send
you prospectuses, reports, and proxies electronically. You get timely
information without mailbox clutter (and help your fund save printing and
postage costs).
SIGN-UP instructions: If your account is registered with us, go to mfs.com,
log in to your account via MFS Access, and select the eDelivery sign up
options.
If you own your MFS fund shares through a financial institution or through a
retirement plan, MFS Talk, MFS Access, and eDelivery may not be available to
you.
[logo] M F S(R)
INVESTMENT MANAGEMENT
[Graphic Omitted]
500 Boylston Street
Boston, MA 02116-3741
(C)2004 MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distriutors, Inc.
500 Boylston Street, Boston, MA 02116
MST-B-ANN-5/04 57M
ITEM 2. CODE OF ETHICS.
The Registrant has adopted a Code of Ethics pursuant to Section 406 of the
Sarbanes-Oxley Act and as defined in the instructions to Form N-CSR that
applies to the Registrant's principal executive officer and principal financial
and accounting officer.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Messrs. J. Atwood Ives and Ward Smith, members of the Audit Committee, have
been determined by the Board of Trustees in their reasonable business judgment
to meet the definition of "audit committee financial expert" as such term is
defined in the instructions to Form N-CSR. In addition, Messrs. Ives and Smith
are both "independent" members of the Audit Committee as defined in the
instructions to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
ITEMS 4(A) THROUGH 4(D) AND 4(G):
The Board of Trustees has appointed Deloitte & Touche LLP ("Deloitte") to serve
as independent accountants to the Registrant. In addition, Deloitte may provide
non-audit related services to the Registrant and/or to the Registrant's
investment adviser, Massachusetts Financial Services Company ("MFS") and to
various entities either controlling, controlled by, or under common control
with MFS that provide ongoing services to the Funds ("MFS Related Entities").
For the fiscal years ended March 31, 2004 and 2003, audit fees billed to the
Registrant by Deloitte were as follows:
Registrant
Audit Fees
Fees billed by Deloitte: 2004 2003
---- ----
MFS Alabama Municipal Bond Fund $29,410 $27,000
MFS Arkansas Municipal Bond Fund 29,410 27,000
MFS California Municipal Bond Fund 29,410 27,000
MFS Florida Municipal Bond Fund 29,410 27,000
MFS Georgia Municipal Bond Fund 29,410 27,000
MFS Maryland Municipal Bond Fund 29,410 27,000
MFS Massachusetts Municipal Bond Fund 29,410 27,000
MFS Mississippi Municipal Bond Fund 29,410 27,000
MFS Municipal Income Fund 32,160 29,300
MFS New York Municipal Bond Fund 29,410 27,000
MFS North Carolina Municipal Bond Fund 29,410 27,000
MFS Pennsylvania Municipal Bond Fund 29,410 27,000
MFS South Carolina Municipal Bond Fund 29,410 27,000
MFS Tennessee Municipal Bond Fund 29,410 27,000
MFS Virginia Municipal Bond Fund 29,410 27,000
MFS West Virginia Municipal Bond Fund 29,410 27,000
------ ------
TOTAL $473,310 $434,300
For the fiscal years ended March 31, 2004 and 2003, fees for audit-related, tax
and other services provided to the Registrant, MFS and MFS Related Entities
were as follows:
Total
Audit-Related Fees(1) Tax Fees(2) All Other Fees(3) Non-Audit Fees
Fees billed by Deloitte: 2004 2003 2004 2003 2004 2003 2004 2003
---- ---- ---- ---- ---- ---- ---- ----
MFS Alabama Municipal Bond Fund $3,950 $ 3,400
MFS Arkansas Municipal Bond Fund 3,950 3,400
MFS California Municipal Bond Fund 3,950 3,400
MFS Florida Municipal Bond Fund 3,950 3,400
MFS Georgia Municipal Bond Fund 3,950 3,400
MFS Maryland Municipal Bond Fund 3,950 3,400
MFS Massachusetts Municipal Bond Fund 3,950 3,400
MFS Mississippi Municipal Bond Fund 3,950 3,400
MFS Municipal Income Fund 3,950 3,600
MFS New York Municipal Bond Fund 3,950 3,400
MFS North Carolina Municipal Bond Fund 3,950 3,400
MFS Pennsylvania Municipal Bond Fund 3,950 3,400
MFS South Carolina Municipal Bond Fund 3,950 3,400
MFS Tennessee Municipal Bond Fund 3,950 3,400
MFS Virginia Municipal Bond Fund 3,950 3,400
MFS West Virginia Municipal Bond Fund 3,950 3,400
----- -----
Total fees billed by Deloitte $ 0 $ 0 $ 63,200 $ 54,600 $ 0 $ 0 $ 63,200 $ 54,600
To MFS and MFS Related Entities $ 442,450 $ 170,000 $ 57,195 $ 59,248 $160,500 $223,678 $660,145 $452,926
--------- --------- -------- -------- -------- -------- -------- --------
Total fees billed $ 442,450 $ 170,000 $120,395 $113,848 $160,500 $223,678 $723,345 $507,526
(1) There were no Audit-Related services provided to the Registrant by Deloitte for the fiscal years ended March 31, 2004
and 2003. Audit-Related Fees billed by Deloitte to MFS and MFS Related Entities includes fees for internal control
reviews.
(2) Fees included in the Tax Fees category comprise all services performed by professional staff in the independent
accountant's tax division except those services related to the audit. This category includes fees for tax compliance,
tax planning, and tax advice. Tax compliance, tax advice, and tax planning services include preparation of original and
amended tax returns, and tax advice related to income recognition and distribution policies.
(3) All Other Fees include fees for services related to financial information system implementation, consultation on
internal cost allocations.
ITEM 4(E)(1):
Set forth below are the policies and procedures established by the Audit
Committee of the Board of Trustees relating to the pre-approval of audit and
non-audit related services:
Pre-approval is needed for all planned and anticipated audit and
permissible non-audit services rendered to the Funds and all
permissible non-audit services rendered to MFS or MFS Related Entities
if the services relate directly to the operations and/or financial
reporting of the Registrant. In the event such services arise between
regular meetings of the Audit Committee and it is not practical to
seek pre-approval at the next regular meeting of the Audit Committee,
such services may be referred to the Chair of the Audit Committee for
approval; provided that, the Chair may not approve any individual
engagement for such services exceeding $50,000 or multiple engagements
for such services in the aggregate exceeding $100,000 between such
regular meetings of the Audit Committee. Any engagement approved by
the Chair between regular meetings of the Audit Committee shall be
presented for ratification by the entire Audit Committee at its next
regularly scheduled meeting.
ITEM 4(E)(2):
None, or 0%, of the services relating to the Audit-Related Fees, Tax Fees and
All Other Fees paid by the Registrant and MFS and MFS Related Entities
disclosed above were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee
approval after the start of the engagement with respect to services other than
audit review or attest services, if certain conditions are satisfied).
ITEM 4(F): Not applicable.
ITEM 4(H): Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the Registrant.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable at this time. [Applicable for periods ending on or after July 9,
2004 (beginning with Form N-CSRs filed at the end of September, 2004 for July
31, 2004 reporting period.)]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the Registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
ITEM 10. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form
N-CSR, the registrant's principal financial officer and principal executive
officer have concluded that those disclosure controls and procedures
provide reasonable assurance that the material information required to be
disclosed by the registrant on this report is recorded, processed,
summarized and reported within the time periods specified in the Securities
and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal controls 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 has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 11. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant
intends to satisfy the Item 2 requirements through filing of an
exhibit: Code of Ethics attached hereto.
(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2
under the Act (17 CFR 270.30a-2): Attached hereto.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17
CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title
18 of the United States Code (18 U.S.C. 1350) as an exhibit. A
certification furnished pursuant to this paragraph will not be deemed
"filed" for the purposes of Section 18 of the Exchange Act (15 U.S.C. 78r),
or otherwise subject to the liability of that section. Such certification
will not be deemed to be incorporated by reference into any filing under
the Securities Act of 1933 or the Exchange Act, except to the extent that
the registrant specifically incorporates it by reference: Attached hereto.
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) MFS MUNICIPAL SERIES TRUST
By (Signature and Title)* ROBERT J. MANNING
------------------------------------------
Robert J. Manning, President
Date: May 24, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* ROBERT J. MANNING
------------------------------------------
Robert J. Manning, President (Principal
Executive Officer)
Date: May 24, 2004
By (Signature and Title)* RICHARD M. HISEY
------------------------------------------
Richard M. Hisey, Treasurer (Principal
Financial Officer and Accounting Officer)
Date: May 24, 2004
* Print name and title of each signing officer under his or her signature.