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 F. DesMarais
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
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Date of reporting period: March 31, 2005
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ITEM 1. REPORTS TO STOCKHOLDERS.
MFS(R) MUNICIPAL SERIES TRUST 3/31/05
FOR THE STATES OF ALABAMA,
ARKANSAS, CALIFORNIA, FLORIDA,
GEORGIA, MARYLAND, MASSACHUSETTS
ANNUAL REPORT
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M F S(SM)
INVESTMENT MANAGEMENT(R)
THIS REPORT HAS BEEN PREPARED FOR THE GENERAL INFORMATION OF SHAREHOLDERS. IT
IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY WHEN PRECEDED OR
ACCOMPANIED BY A CURRENT PROSPECTUS.
ANNUAL REPORT
LETTER FROM THE CEO 1
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PORTFOLIO COMPOSITION 2
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MANAGEMENT REVIEW 5
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PERFORMANCE SUMMARY 6
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FUND EXPENSE TABLES 15
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PORTFOLIO OF INVESTMENTS 18
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FINANCIAL STATEMENTS 53
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NOTES TO FINANCIAL STATEMENTS 78
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REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 92
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RESULTS OF SHAREHOLDER MEETING 93
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TRUSTEES AND OFFICERS 94
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PROXY VOTING POLICIES AND INFORMATION 96
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QUARTERLY PORTFOLIO DISCLOSURE 96
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FEDERAL TAX INFORMATION 96
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CONTACT INFORMATION BACK COVER
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LETTER FROM THE CEO
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Dear Shareholders,
[Photo of Robert J. Manning]
Last summer and fall, I wrote to you about enhancements that MFS(R) was making
to its investment process. Our goal, as always, was to deliver strong
performance across all asset classes. I am now happy to report to you that 2004
was a very successful year for MFS, relative to our peers in the mutual fund
industry. While there will always be room for improvement, we believe the
enhancements we have made to our investment process resulted in significantly
improved performance across the MFS Family of Funds(R).
You may remember some of the enhancements I outlined last year. They included
o increasing collaboration and information sharing among our investment
personnel across asset classes, through an Investment Management Committee
with members from our Domestic Equity, International Equity, Fixed Income,
and Quantitative Research teams
o increasing the number of analysts supporting our portfolio managers and
doubling the average investment experience of our domestic equity analyst
staff
o making additional use of our most-seasoned portfolio managers to mentor
research analysts
o combining more quantitative, top-down risk control and security analysis
with our traditional bottom-up research process
o opening a research office in Mexico City to complement our existing staff
in Boston, London, Singapore, and Tokyo
The effect of these enhancements, I believe, is evident in the recent
performance of our funds. For the 12 months ended March 31, 2005, 68% of MFS
domestic equity funds, 88% of MFS international equity funds, and 90% of MFS
fixed-income funds delivered results in the top half of their Lipper peer
groups.
Our longer-term performance also benefited from our ongoing commitment to the
MFS Original Research(R) process: 69% of MFS funds were in the top half of
their respective Lipper categories over the 3-, 5-, and 10-year periods ended
March 31, 2005.
Of course, I cannot offer any guarantees that our performance will repeat
itself. Still, I am confident that the recent enhancements to our investment
process will continue to benefit shareholders in 2005 and beyond.
What I can tell you with certainty is that the way you manage your investments
will determine how well you take advantage of the performance that financial
markets deliver. Historically, individual investors have tended to underperform
the markets. For example, a 2003 study by DALBAR, Inc. showed that over the
nearly two decades from 1984 through 2002, the average U.S. stock investor
earned a 2.6% average annual return at a time when U.S. stocks, as measured by
the Standard & Poor's 500 Stock Index, delivered a 12.2% average annual
return.(1)
This huge discrepancy, in our view, occurred because nonprofessional investors
generally did not adhere to the basic principles followed by most professional
investors: allocate among asset classes, diversify within each asset class, and
rebalance one's portfolio on a routine schedule. I elaborated on this "ADR"
theme in fund reports over the last few months of 2004. For more information on
how to apply a Disciplined Diversification(SM) strategy to your portfolio using
the principles of ADR, I would urge you to contact your own investment
professional. You may also want to refer to information on the subject on our
Web site, MFS.COM.
As always, we appreciate your confidence in MFS, and you can be sure of our
continued commitment to do the best we can to help you pursue your long-term
financial goals.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management
May 16, 2005
It is not possible to invest directly in an index.
Lipper rankings and performance are based on historical average annual returns
of Class A shares, and do not include any sales charges. Past performance is no
guarantee of future results.
Asset allocation and diversification cannot guarantee a profit or protect
against a loss.
The opinions expressed in this letter are those of MFS, and no forecasts can be
guaranteed.
(1) Source: DALBAR July 2003 update to its Quantitative Analysis of Investment
Behavior; DALBAR, Inc., is a financial-services market research firm
headquartered in Boston, MA.
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PORTFOLIO COMPOSITION
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MFS ALABAMA MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE
Bonds 97.9%
Cash & Other Net Assets 2.1%
TOP FIVE BOND INDUSTRIES*
Health/Hospitals 17.2%
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Water/Sewer 15.9%
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Municipal-Owned Utilities 12.7%
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General Obligations/GP 11.2%
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State and Local Approp. 7.3%
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CREDIT QUALITY**
AAA 67.4%
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AA 13.0%
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A 5.7%
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BBB 10.4%
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BB 0.2%
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Not Rated 3.3%
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PORTFOLIO FACTS
Average Duration 6.6
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Average Life 16.3 yrs.
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Average Maturity*** 16.8 yrs.
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Average Credit Quality**** AA
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Average Short-Term Credit Quality A-1
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MFS ARKANSAS MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE
Bonds 98.3%
Cash & Other Net Assets 1.7%
TOP FIVE BOND INDUSTRIES*
Universities/Colleges 16.6%
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Water/Sewer 11.2%
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Single Family Housing/State 10.7%
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General Obligations/GP 10.0%
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Health/Hospitals 9.9%
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CREDIT QUALITY**
AAA 70.0%
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AA 8.5%
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A 12.4%
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BBB 7.9%
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BB 0.8%
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Not Rated 0.4%
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PORTFOLIO FACTS
Average Duration 6.9
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Average Life 15.5 yrs.
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Average Maturity*** 16.4 yrs.
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Average Credit Quality**** AA
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Average Short-Term Credit Quality A-1
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MFS CALIFORNIA MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE
Bonds 99.0%
Cash & Other Net Assets 1.0%
TOP FIVE BOND INDUSTRIES*
General Obligation/Schools 15.6%
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State and Local Approp. 12.2%
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Health/Hospitals 11.2%
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General Obligations/GP 7.8%
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Water/Sewer 7.7%
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CREDIT QUALITY**
AAA 51.5%
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AA 5.3%
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A 13.3%
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BBB 21.0%
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BB 0.6%
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B 0.1%
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CCC 0.5%
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Not Rated 7.7%
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PORTFOLIO FACTS
Average Duration 7.6
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Average Life 15.8 yrs.
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Average Maturity*** 16.5 yrs.
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Average Credit Quality**** AA-
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Average Short-Term Credit Quality A-1
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MFS FLORIDA MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE
Bonds 98.4%
Cash & Other Net Assets 1.6%
TOP FIVE BOND INDUSTRIES*
Health/Hospitals 15.2%
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Water/Sewer 15.1%
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General Obligations/Schools 9.4%
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General Obligations/GP 7.1%
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State and Local Approp. 6.0%
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CREDIT QUALITY**
AAA 62.0%
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AA 14.7%
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A 7.4%
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BBB 8.7%
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BB 0.6%
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B 0.5%
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Not Rated 6.1%
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PORTFOLIO FACTS
Average Duration 7.6
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Average Life 17.8 yrs.
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Average Maturity*** 18.5 yrs.
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Average Credit Quality**** AA
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Average Short-Term Credit Quality A-1
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MFS GEORGIA MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE
Bonds 98.4%
Cash & Other Net Assets 1.6%
TOP FIVE BOND INDUSTRIES*
Water/Sewer 26.6%
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Universities/Colleges 8.9%
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Health/Hospitals 8.8%
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General Obligations/Schools 7.2%
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Municipal-Owned Utilities 6.3%
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CREDIT QUALITY**
AAA 43.9%
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AA 30.4%
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A 8.8%
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BBB 9.8%
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BB 0.8%
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Not Rated 6.3%
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PORTFOLIO FACTS
Average Duration 7.1
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Average Life 16.5 yrs.
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Average Maturity*** 17.2 yrs.
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Average Credit Quality**** AA
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Average Short-Term Credit Quality A-1
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MFS MARYLAND MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE
Bonds 98.6%
Cash & Other Net Assets 2.1%
TOP FIVE BOND INDUSTRIES*
Health/Hospitals 20.5%
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General Obligations/IMPT 16.1%
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Universities/Colleges 10.6%
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Water/Sewer 5.9%
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State & Agency - Other 5.5%
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CREDIT QUALITY**
AAA 51.5%
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AA 18.8%
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A 12.5%
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BBB 10.4%
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B 0.4%
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Not Rated 6.4%
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PORTFOLIO FACTS
Average Duration 7.2
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Average Life 15.6 yrs.
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Average Maturity*** 16.3 yrs.
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Average Credit Quality**** AA
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Average Short-Term Credit Quality A-1
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MFS MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE
Bonds 97.9%
Cash & Other Net Assets 2.1%
TOP FIVE BOND INDUSTRIES*
Universities/Colleges 19.0%
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General Obligations/GP 14.2%
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Health/Hospitals 10.0%
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Tax/Assessment 7.8%
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General Obligations/IMPT 5.7%
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CREDIT QUALITY**
AAA 52.2%
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AA 24.6%
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A 6.4%
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BBB 13.0%
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BB 1.4%
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Not Rated 2.4%
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PORTFOLIO FACTS
Average Duration 7.8
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Average Life 17.1 yrs.
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Average Maturity*** 18.2 yrs.
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Average Credit Quality**** AA
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Average Short-Term Credit Quality A-1
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* For purposes of these graphical presentations, the bond components
include both accrued interest amounts and the equivalent exposure from
any derivative holdings, if applicable.
** Each security is assigned a rating from Moody's Investors Service. If not
rated by Moody's, the rating will be that assigned by Standard & Poor's.
Likewise, if not assigned a rating by Standard & Poor's, it will be based
on the rating assigned by Fitch, Inc. If not rated by any of the three
agencies, the security is considered Not Rated. Percentages are based on
the total market value of investments as of 3/31/05.
*** The average maturity shown is calculated using the final stated maturity
on the portfolio's holdings without taking into account any holdings
which have been pre-refunded to an earlier date or which have a mandatory
put date prior to the stated maturity. The average life shown takes into
account these earlier dates.
**** The Portfolio Average Credit Quality rating is based upon a market
weighted average of portfolio holdings.
Percentages are based on net assets as of 3/31/05, unless otherwise noted.
The portfolios are actively managed, and current holdings may be different.
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MANAGEMENT REVIEW
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INVESTMENT OBJECTIVE
The investment objective of each fund is to provide current income exempt from
federal income tax and personal income tax, if any, of the state to which its
name refers. Each fund invests, under normal market conditions, at least 80%
of its net assets in securities and other investments, the interest on which
is exempt from federal income tax and personal income tax, if any, of the
state to which its name refers. A fund may invest in municipal securities,
which are bonds or other debt obligations of a U.S. state or political
subdivision, such as a country, city, town, village, or authority.
MARKET ENVIRONMENT
The U.S. fixed-income market experienced a dramatic flattening of the yield
curve during the 12-month period. (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.) On
June 30, 2004, the U.S. Federal Reserve Board (the Fed) raised its target
federal funds rate for the first time in four years. For the remainder of the
period, the Fed continued a steady drumbeat of quarter-point rate hikes. But
while the Fed seemed committed to a course of gradually raising short-term
rates, it appeared to us that several factors caused long-term rates to
stagnate or retreat over the period.
Job growth, which had shot up in the spring of 2004, faltered; this helped, in
our opinion, to push down yields on longer-dated bonds. Another factor that we
believe held long-term rates down was overseas demand for U.S. Treasuries,
especially from foreign central banks. However, we felt that moderate gross
domestic product (GDP) growth and inflation concerns kept shorter-term
interest rates moving up. For the period as a whole, the net effect was a
substantial flattening of the yield curve as short-term rates rose
significantly while long-term rates were generally flat to down.
FACTORS THAT AFFECTED PERFORMANCE
During the period our duration positioning in most of the funds was longer
than that of our benchmark, the Lehman Brothers Municipal Bond Index (the
Lehman Index). Duration is a measure of a fund's sensitivity to changes in
interest rates. For all funds - except the Alabama Fund - this longer duration
stance held back relative performance.
Yield curve positioning in all funds was a strong contributor to relative
performance. Compared with our benchmark most of the funds were more heavily
weighted in bonds on the long end of the yield curve - bonds with durations of
11 to 25+ years - and underweighted in bonds on the short end of the curve.
This helped relative results during the period because long-term municipal
rates were relatively unchanged and bonds on the short end of the curve
suffered price declines as their yields increased.
The effect of credit quality on relative performance was positive for all
funds with the exception of the Arkansas fund, in which credit quality had a
neutral effect.
Sector allocation was neutral or positive for all funds - except the Arkansas
Fund whose sector allocation effect was negative. Funds for which sector
allocation was a positive factor were generally overweighted in one or more
sectors that outperformed over the period. Our overweighted positions in the
health care and utilities sectors aided relative results for most of
the funds.
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.
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PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) ALABAMA MUNICIPAL BOND FUND
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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 market-value-weighted index representative of the tax-exempt 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. HIGH
SHORT-TERM RETURNS FOR ANY PERIOD MAY BE AND LIKELY WERE ATTRIBUTABLE TO
FAVORABLE MARKET CONDITIONS DURING THAT PERIOD, WHICH MAY NOT BE
REPEATABLE. 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 3/31/05)
MFS Alabama Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,204 10,838
3/97 10,800 11,429
3/98 11,850 12,653
3/99 12,446 13,438
3/00 12,344 13,427
3/01 13,702 14,893
3/02 14,121 15,461
3/03 15,542 16,990
3/04 16,336 17,986
3/05 16,727 18,465
TOTAL RETURNS
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Average annual
without sales charge
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Share class Inception date 1-yr 3-yr 5-yr 10-yr
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A 2/01/90 2.40% 5.81% 6.27% 5.79%
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B 9/07/93 1.63% 4.99% 5.47% 4.99%
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Average annual
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Comparative benchmarks
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Average Alabama
municipal debt fund+ 1.73% 5.35% 5.88% 5.16%
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Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
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Average annual
with sales charge
- ------------------------
Share class
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A -2.47% 4.11% 5.24% 5.28%
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B -2.27% 4.07% 5.15% 4.99%
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Cumulative without
sales charge
- ------------------------
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A
2.40% 18.46% 35.51% 75.62%
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B
1.63% 15.72% 30.52% 62.74%
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+ Source: Lipper Inc., an independent firm that reports mutual fund performance.
# Source: Standard & Poor's Micropal, Inc.
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PERFORMANCE SUMMARY THROUGH 3/31/05 ARKANSAS MUNICIPAL BOND FUND
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GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS Arkansas Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,115 10,838
3/97 10,607 11,429
3/98 11,674 12,653
3/99 12,211 13,438
3/00 12,182 13,427
3/01 13,455 14,893
3/02 14,001 15,461
3/03 15,332 16,990
3/04 16,026 17,986
3/05 16,368 18,465
Total Returns
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Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
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A 2/03/92 2.14% 5.35% 6.09% 5.56%
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B 9/07/93 1.37% 4.51% 5.25% 4.75%
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- ------------------------
Average annual
- ------------------------
Comparative benchmarks
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Average "other state"
municipal debt fund+ 1.82% 4.68% 5.31% 5.07%
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Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
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- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -2.72% 3.65% 5.06% 5.05%
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B -2.54% 3.59% 4.92% 4.75%
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- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 2.14% 16.91% 34.36% 71.85%
- ------------------------------------------------------------------------------
B 1.37% 14.16% 29.17% 59.10%
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+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
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PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) CALIFRONIA MUNICIPAL BOND FUND
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GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS California Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,274 10,838
3/97 10,741 11,429
3/98 11,978 12,653
3/99 12,767 13,438
3/00 12,586 13,427
3/01 13,944 14,893
3/02 14,377 15,461
3/03 15,784 16,990
3/04 16,607 17,986
3/05 17,129 18,465
Total Returns
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 6/18/85 3.14% 6.01% 6.36% 6.04%
- ------------------------------------------------------------------------------
B 9/07/93 2.38% 5.19% 5.53% 5.19%
- ------------------------------------------------------------------------------
C 1/03/94 2.22% 5.06% 5.43% 5.07%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average California municipal
debt fund+ 2.86% 5.46% 5.82% 5.62%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -1.76% 4.31% 5.33% 5.53%
- ------------------------------------------------------------------------------
B -1.56% 4.28% 5.21% 5.19%
- ------------------------------------------------------------------------------
C 1.24% 5.06% 5.43% 5.07%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 3.14% 19.15% 36.09% 79.83%
- ------------------------------------------------------------------------------
B 2.38% 16.40% 30.90% 65.93%
- ------------------------------------------------------------------------------
C 2.22% 15.95% 30.28% 63.91%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
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PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) FLORIDA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS Florida Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,269 10,838
3/97 10,621 11,429
3/98 11,700 12,653
3/99 12,315 13,438
3/00 12,145 13,427
3/01 13,447 14,893
3/02 13,920 15,461
3/03 15,229 16,990
3/04 16,021 17,986
3/05 16,541 18,465
Total Returns
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 2/03/92 3.25% 5.92% 6.37% 5.67%
- ------------------------------------------------------------------------------
B 9/07/93 2.45% 5.12% 5.53% 4.82%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
Average Florida municipal
debt fund+ 2.17% 4.97% 5.54% 5.38%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -1.66% 4.21% 5.34% 5.16%
- ------------------------------------------------------------------------------
B -1.49% 4.21% 5.21% 4.82%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 3.25% 18.83% 36.19% 73.66%
- ------------------------------------------------------------------------------
B 2.45% 16.16% 30.88% 60.16%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) GEORGIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS Georgia Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,142 10,838
3/97 10,596 11,429
3/98 11,763 12,653
3/99 12,340 13,438
3/00 12,177 13,427
3/01 13,492 14,893
3/02 13,901 15,461
3/03 15,288 16,990
3/04 16,042 17,986
3/05 16,405 18,465
Total Returns
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 6/06/88 2.27% 5.68% 6.14% 5.59%
- ------------------------------------------------------------------------------
B 9/07/93 1.51% 4.89% 5.35% 4.79%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average Georgia municipal
debt fund+ 1.54% 4.96% 5.64% 5.46%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -2.59% 3.98% 5.11% 5.07%
- ------------------------------------------------------------------------------
B -2.41% 3.97% 5.02% 4.79%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 2.27% 18.01% 34.73% 72.23%
- ------------------------------------------------------------------------------
B 1.51% 15.39% 29.75% 59.60%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) MARYLAND MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS Maryland Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,113 10,838
3/97 10,492 11,429
3/98 11,601 12,653
3/99 12,174 13,438
3/00 12,019 13,427
3/01 13,252 14,893
3/02 13,728 15,461
3/03 14,993 16,990
3/04 15,737 17,986
3/05 16,107 18,465
Total Returns
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 10/31/84 2.36% 5.47% 6.03% 5.39%
- ------------------------------------------------------------------------------
B 9/07/93 1.69% 4.82% 5.35% 4.71%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average Maryland municipal
debt fund+ 1.76% 4.95% 5.41% 5.20%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -2.51% 3.78% 5.00% 4.88%
- ------------------------------------------------------------------------------
B -2.22% 3.91% 5.02% 4.71%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 2.36% 17.33% 34.02% 69.11%
- ------------------------------------------------------------------------------
B 1.69% 15.18% 29.75% 58.47%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) MASSACHUSETTS MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS Massachusetts Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,187 10,838
3/97 10,635 11,429
3/98 11,694 12,653
3/99 12,292 13,438
3/00 12,099 13,427
3/01 13,362 14,893
3/02 13,754 15,461
3/03 15,187 16,990
3/04 15,920 17,986
3/05 16,339 18,465
Total Returns
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 4/09/85 2.63% 5.91% 6.19% 5.54%
- ------------------------------------------------------------------------------
B 9/07/93 1.97% 5.22% 5.54% 4.86%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average Massachusetts municipal
debt fund+ 1.94% 5.34% 5.81% 5.38%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -2.24% 4.21% 5.16% 5.03%
- ------------------------------------------------------------------------------
B -1.95% 4.31% 5.22% 4.86%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 2.63% 18.80% 35.05% 71.54%
- ------------------------------------------------------------------------------
B 1.97% 16.49% 30.94% 60.80%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
NOTES TO PERFORMANCE SUMMARY AND KEY RISK CONSIDERATIONS
- -------------------------------------------------------------------------------
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%. For the fund that offers Class C shares,
Class C results including sales charge (assuming redemption within one year
from the end of the prior 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
As with any fixed income security, the prices of municipal securities in each
fund's portfolio will generally fall when interest rates rise. Conversely, when
interest rates fall, the prices of municipal securities in a fund's portfolio
will generally rise.
Interest rate risk will generally affect the price of a municipal security more
if the security has a longer maturity. Municipal securities with longer
maturities will therefore be more volatile than other fixed income securities
with shorter maturities. Conversely, municipal securities with shorter
maturities will be less volatile but generally provide lower returns than
municipal securities with longer maturities. The average maturity of each
fund's municipal security investments will affect the volatility of the fund's
share price.
Credit risk is the risk that the issuer of a municipal security will not be
able to pay principal and interest when due. Rating agencies assign credit
ratings to certain municipal securities to indicate their credit risk. The
price of a municipal security will generally fall if the issuer defaults on its
obligation to pay principal or interest, the rating agencies downgrade the
issuer's credit rating or other news affects the market's perception of the
issuer's credit risk. A participation interest is also subject to the risk of
default by the issuing bank.
Each fund may invest in municipal bonds that are general obligations backed by
the full faith and credit of the municipal issuer. Each fund may also invest in
municipal bonds called revenue obligations which are subject to a higher degree
of credit risk than general obligations. Revenue obligations finance specific
projects (such as building a hospital or toll roads, water and sewer projects,
etc.), and are not backed by the full faith and credit of the municipal issuer.
Each fund may invest in excess of 25% of its assets in revenue bonds relating
to any one specific industry (e.g., housing, healthcare, water and sewer,
etc.). Because revenue obligations are repaid from the revenues from a
facility, they are subject to a risk of default in payments of principal and
interest if the facility does not generate enough income. 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 project or assets or the inability to collect revenues from 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 significantly in value.
Because the portfolio invests at least 80% of its assets in securities of the
named state, it is more susceptible to adverse economic, political or
regulatory developments affecting that state than is a portfolio that invests
more broadly.
Because a fund may invest its assets in a small number of issuers, the fund is
more susceptible to any single economic, political or regulatory event
affecting those issuers than is a diversified fund.
Speculative bonds are subject to a higher risk that the issuer will default on
payments of principal and interest than higher rated investment grade bonds.
Although the issuer's ability to make interest and principal payments appears
adequate, an adverse change in economic conditions or other circumstances is
more likely to cause a default by the issuer of a speculative bond than the
issuer of a higher rated investment grade bond.
The fixed income securities purchased by each fund may be traded in the over-
the-counter market rather than on an organized exchange and are subject to
liquidity risk. This means that they may be harder to purchase or sell at a
fair price. The inability to purchase or sell these fixed income securities at
a fair price could have a negative impact on a fund's performance.
The portfolio may invest in high yield or lower-rated securities (non-rated,
below "BBB"), which may provide greater returns but are subject to greater-
than-average risk.
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 you are not a resident of the state to which the portfolio is targeted, the
state tax exemption will not apply.
Please see the prospectus for further information regarding these and other
risk considerations.
- -------------------------------------------------------------------------------
FUND EXPENSE TABLES
- -------------------------------------------------------------------------------
FUND EXPENSES BORNE BY THE SHAREHOLDERS DURING THE PERIOD,
OCTOBER 1, 2004 THROUGH MARCH 31, 2005
As a shareholder of the fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on certain purchase or redemption
payments and redemption fees on certain exchanges and redemptions, and (2)
ongoing costs, including management fees; distribution and service (12b-1)
fees; and other fund expenses. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the fund and to compare these
costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period October 1, 2004 through March 31,
2005.
ACTUAL EXPENSES
The first line for each share class in the tables below provides information
about actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the first line under the heading entitled "Expenses
Paid During Period" to estimate the expenses you paid on your account during
this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line for each share class in the tables below provides information
about hypothetical account values and hypothetical expenses based on the fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expenses you paid for the period. You may use this information to
compare the ongoing costs of investing in the fund and other funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption fees. Therefore, the second line for each share
class in the table is useful in comparing ongoing costs only, and will not help
you determine the relative total costs of owning different funds. In addition,
if these transactional costs were included, your costs would have been higher.
MFS(R) ALABAMA MUNICIPAL BOND FUND
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- --------------------------------------------------------------------------------
Actual 0.87% $1,000 $1,012 $4.36
A ------------------------------------------------------------------------
Hypothetical* 0.87% $1,000 $1,021 $4.38
- --------------------------------------------------------------------------------
Actual 1.62% $1,000 $1,008 $8.11
B -------------------------------------------------------------------------
Hypothetical* 1.62% $1,000 $1,017 $8.15
- --------------------------------------------------------------------------------
MFS(R) ARKANSAS MUNICIPAL BOND FUND
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- --------------------------------------------------------------------------------
Actual 0.69% $1,000 $1,011 $3.46
A ------------------------------------------------------------------------
Hypothetical* 0.69% $1,000 $1,021 $3.48
- --------------------------------------------------------------------------------
Actual 1.44% $1,000 $1,007 $7.21
B -------------------------------------------------------------------------
Hypothetical* 1.44% $1,000 $1,018 $7.24
- --------------------------------------------------------------------------------
MFS(R) CALIFORNIA MUNICIPAL BOND FUND
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- --------------------------------------------------------------------------------
Actual 0.64% $1,000 $1,014 $3.21
A ------------------------------------------------------------------------
Hypothetical* 0.64% $1,000 $1,022 $3.23
- --------------------------------------------------------------------------------
Actual 1.36% $1,000 $1,010 $6.82
B -------------------------------------------------------------------------
Hypothetical* 1.36% $1,000 $1,018 $6.84
- --------------------------------------------------------------------------------
Actual 1.54% $1,000 $1,009 $7.71
C -------------------------------------------------------------------------
Hypothetical* 1.54% $1,000 $1,017 $7.74
- --------------------------------------------------------------------------------
MFS(R) FLORIDA MUNICIPAL BOND FUND
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- --------------------------------------------------------------------------------
Actual 0.61% $1,000 $1,018 $3.07
A ------------------------------------------------------------------------
Hypothetical* 0.61% $1,000 $1,022 $3.08
- --------------------------------------------------------------------------------
Actual 1.38% $1,000 $1,015 $6.93
B -------------------------------------------------------------------------
Hypothetical* 1.38% $1,000 $1,018 $6.94
- --------------------------------------------------------------------------------
MFS(R) GEORGIA MUNICIPAL BOND FUND
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- --------------------------------------------------------------------------------
Actual 0.89% $1,000 $1,011 $4.46
A ------------------------------------------------------------------------
Hypothetical* 0.89% $1,000 $1,020 $4.48
- --------------------------------------------------------------------------------
Actual 1.64% $1,000 $1,007 $8.21
B -------------------------------------------------------------------------
Hypothetical* 1.64% $1,000 $1,017 $8.25
- --------------------------------------------------------------------------------
MFS(R) MARYLAND MUNICIPAL BOND FUND
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- --------------------------------------------------------------------------------
Actual 0.93% $1,000 $1,012 $4.67
A ------------------------------------------------------------------------
Hypothetical* 0.93% $1,000 $1,020 $4.68
- --------------------------------------------------------------------------------
Actual 1.57% $1,000 $1,010 $7.87
B -------------------------------------------------------------------------
Hypothetical* 1.57% $1,000 $1,017 $7.90
- --------------------------------------------------------------------------------
MFS(R) MASSACHUSETTS MUNICIPAL BOND FUND
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- --------------------------------------------------------------------------------
Actual 0.88% $1,000 $1,012 $4.41
A ------------------------------------------------------------------------
Hypothetical* 0.88% $1,000 $1,021 $4.43
- --------------------------------------------------------------------------------
Actual 1.53% $1,000 $1,008 $7.66
B -------------------------------------------------------------------------
Hypothetical* 1.53% $1,000 $1,017 $7.69
- --------------------------------------------------------------------------------
* 5% class return per year before expenses.
** Expenses paid is equal to each class" annualized expense ratio for the most
recent six month period, as shown above, multiplied by the average account
value over the period, multiplied by the number of days in the period,
divided by the number of days in the year. Expenses paid do not include any
applicable sales charges (loads) or redemption fees. If these transaction
costs had been included, your costs would have been higher.
- ---------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 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 - 96.4%
- ---------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- ---------------------------------------------------------------------------------------------------------------------
Airport & Port Alabama Docks Department Facilities Rev., MBIA,
Revenue - 2.3% 5.5%, 2022 $1,000,000 $1,085,280
- ---------------------------------------------------------------------------------------------------------------------
Alabama Port Authority Docks Facility MBIA,
5.25%, 2026 1,000,000 1,041,220
- ---------------------------------------------------------------------------------------------------------------------
$2,126,500
- ---------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 11.0% Boaz, AL, School Warrants, "A", XLCA, 5%, 2025 $1,000,000 $1,035,860
- ---------------------------------------------------------------------------------------------------------------------
Boaz, AL, School Warrants, "A", XLCA, 5%, 2029 650,000 668,850
- ---------------------------------------------------------------------------------------------------------------------
Fairfield, AL, Refunding Warrants, AMBAC, 5.25%,
2025 1,030,000 1,095,703
- ---------------------------------------------------------------------------------------------------------------------
Gadsden, AL, Warrants, "B", AMBAC, 5.125%, 2028 1,500,000 1,577,640
- ---------------------------------------------------------------------------------------------------------------------
Hoover, AL, "B", 6%, 2010(++) 500,000 563,495
- ---------------------------------------------------------------------------------------------------------------------
Houston County, AL, AMBAC, 6.25%, 2009(++) 750,000 856,980
- ---------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, School Warrants, FSA,
5.5%, 2020 1,750,000 1,880,025
- ---------------------------------------------------------------------------------------------------------------------
Mobile County, AL, 6%, 2009(++) 1,345,000 1,493,528
- ---------------------------------------------------------------------------------------------------------------------
Russell County, AL, Warrants, "A", AMBAC, 5%,
2017 1,000,000 1,046,530
- ---------------------------------------------------------------------------------------------------------------------
$10,218,611
- ---------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 5.3% Birmingham, AL, 5.75%, 2019 $2,000,000 $2,199,640
- ---------------------------------------------------------------------------------------------------------------------
Birmingham, AL, "A", 5.75%, 2017 1,000,000 1,105,870
- ---------------------------------------------------------------------------------------------------------------------
Montgomery, AL, Warrants, MBIA, 5.1%, 2021 1,005,000 1,049,622
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Municipal Finance Agency, RITES,
FSA, 8.129%, 2017+(+) 500,000 588,970
- ---------------------------------------------------------------------------------------------------------------------
$4,944,102
- ---------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 5.3% Bessemer, AL, School Warrants, AMBAC, 5.5%, 2020 $2,015,000 $2,179,544
- ---------------------------------------------------------------------------------------------------------------------
Phenix City, AL, AMBAC, 5.65%, 2021 1,500,000 1,663,620
- ---------------------------------------------------------------------------------------------------------------------
Tuscaloosa, AL, Warrants, 5.7%, 2018 1,000,000 1,094,090
- ---------------------------------------------------------------------------------------------------------------------
$4,937,254
- ---------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Alabama Special Care Facilities Financing
Hospitals - 17.0% Authority (Daughters of Charity), AMBAC, ETM,
5%, 2025(++) $1,500,000 $1,521,825
- ---------------------------------------------------------------------------------------------------------------------
Baldwin County, AL, Eastern Shore Health Care
Authority Rev. (Thomas Hospital), 6.75%, 2015 500,000 512,995
- ---------------------------------------------------------------------------------------------------------------------
Birmingham Medical Center, East Alabama, Special
Health Care Facilities, Eastern Health Systems,
"B", 5%, 2018 500,000 493,770
- ---------------------------------------------------------------------------------------------------------------------
Birmingham, AL, Baptist Health Systems, "A",
(Baptist Medical Center), 5.625%, 2015 300,000 319,344
- ---------------------------------------------------------------------------------------------------------------------
Cullman, AL, Medical Park, South Clinic, "A",
6.5%, 2023 1,000,000 1,003,360
- ---------------------------------------------------------------------------------------------------------------------
DCH Health Care Authority, Alabama Facilities
Rev., 5.25%, 2016 1,000,000 1,064,000
- ---------------------------------------------------------------------------------------------------------------------
Houston County, AL, Health Care Authority,
AMBAC, 6.125%, 2022 1,000,000 1,113,200
- ---------------------------------------------------------------------------------------------------------------------
Huntsville, AL, Health Care Authority Rev.,
5.625%, 2026 950,000 985,863
- ---------------------------------------------------------------------------------------------------------------------
Huntsville, AL, Health Care Authority Rev., "A",
MBIA, 5%, 2023 1,000,000 1,026,440
- ---------------------------------------------------------------------------------------------------------------------
Lauderdale County & Florence, AL, Health Care
Authority Rev. (Eliza Coffee Memorial Hospital),
MBIA, 5.75%, 2008(++) 1,000,000 1,084,230
- ---------------------------------------------------------------------------------------------------------------------
Lauderdale County & Florence, AL, Health Care
Authority Rev., "A", (Coffee Health Group),
MBIA, 5.75%, 2014 1,000,000 1,098,570
- ---------------------------------------------------------------------------------------------------------------------
Marshall County, AL, Health Care Authority Rev.,
"A", 5.75%, 2032 1,000,000 1,033,940
- ---------------------------------------------------------------------------------------------------------------------
Montgomery, AL, Medical Clinic Board Rev.
(Jackson Hospital & Clinic), AMBAC, 5.875%, 2016 1,000,000 1,045,670
- ---------------------------------------------------------------------------------------------------------------------
Montgomery, AL, Special Care Facilities
Financing Authority Rev., "C" (Baptist Medical
Center), FSA, ETM, 5.375%, 2019(++) 1,150,000 1,220,725
- ---------------------------------------------------------------------------------------------------------------------
Montgomery, AL, Special Care Facilities,
Financing Authority Rev. (Baptist Health),
"A-2", MBIA, 0% to 2007, 5% to 2025 1,135,000 1,003,567
- ---------------------------------------------------------------------------------------------------------------------
Montgomery, AL, Special Care Facilities,
Financing Authority Rev. (Baptist Health), "C",
5.25%, 2029 1,000,000 998,570
- ---------------------------------------------------------------------------------------------------------------------
Valley, AL, Special Care Facilities Financing
Authority, "A" (Lanier Memorial Hospital),
5.65%, 2022 225,000 219,285
- ---------------------------------------------------------------------------------------------------------------------
$15,745,354
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Mobile County, AL, Industrial Development
Metals - 0.6% Authority Rev. (Ipsco, Inc.), 6.875%, 2030 $500,000 $542,135
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Fairfield, AL, Environment Improvement Rev. (USX
Other - 0.5% Corp.), 5.4%, 2016 $400,000 $436,212
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Butler, AL, Industrial Development Board, Solid
Paper - 3.5% Waste Disposal Rev. (Pacific Corp.), 5.75%, 2028 $200,000 $199,804
- ---------------------------------------------------------------------------------------------------------------------
Camden, AL, Industrial Development Board Exempt
Rev., "B" (Weyerhaeuser), 6.375%, 2024 500,000 543,030
- ---------------------------------------------------------------------------------------------------------------------
Mobile, AL, Industrial Development Board
Improvement Rev., "A" (International Paper Co.),
6.35%, 2016 650,000 700,330
- ---------------------------------------------------------------------------------------------------------------------
Mobile, AL, Industrial Development Board
Improvement Rev., "B" (International Paper Co.),
6.45%, 2019 350,000 377,178
- ---------------------------------------------------------------------------------------------------------------------
Phenix City, AL, Environmental Improvement Rev.,
6.35%, 2035 750,000 820,710
- ---------------------------------------------------------------------------------------------------------------------
Selma, AL, Industrial Development Board, "A"
(International Paper Co.),
6.7%, 2018 500,000 548,470
- ---------------------------------------------------------------------------------------------------------------------
$3,189,522
- ---------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Birmingham, AL, Downtown Redevelopment Authority
Other - 3.1% Rev. (Social Security Administrative Building),
ETM, 12.5%, 2010(++) $1,635,000 $2,059,429
- ---------------------------------------------------------------------------------------------------------------------
East Central Alabama Industrial Development
Authority Rev., Unrefunded Balance, AMBAC, 5.4%,
2015 790,000 841,429
- ---------------------------------------------------------------------------------------------------------------------
$2,900,858
- ---------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Alabama Housing Finance Authority, Multi-Family
Revenue - 2.5% Residential Development Rev., "K", (South Bay
Apartments), FNMA, 5.875%, 2021 $960,000 $1,006,157
- ---------------------------------------------------------------------------------------------------------------------
Alabama Housing Finance Authority, Multi-Family
Residential Development Rev., FHA, 7.25%, 2023 1,145,000 1,146,100
- ---------------------------------------------------------------------------------------------------------------------
Birmingham, AL, Multi-Family Housing Rev., "C"
(Beaconview Apartments), 8%, 2030+* 395,000 39,500
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Corp., Multi-Family
Mortgage Rev., LOC, 7.5%, 2015 155,000 155,618
- ---------------------------------------------------------------------------------------------------------------------
$2,347,375
- ---------------------------------------------------------------------------------------------------------------------
Single Family Housing - Alabama Housing Finance Authority, Collateral
State - 1.6% Home Mortgage Bond Program II, "B", 5.15%, 2019 $80,000 $80,841
- ---------------------------------------------------------------------------------------------------------------------
Alabama Housing Finance Authority, Single Family
Mortgage Rev., Collateral Home Mortgage Bond
Program I, "B", 5.7%, 2015 500,000 513,055
- ---------------------------------------------------------------------------------------------------------------------
Alabama Housing Finance Authority, Single Family
Mortgage Rev., Collateral Home Mortgage Bond
Program II, "A", GNMA, 5.4%, 2022 785,000 792,983
- ---------------------------------------------------------------------------------------------------------------------
Alabama Housing Finance Authority, Single Family
Mortgage Rev., Collateral Home Mortgage Bond
Program II, "B", 5.15%, 2019 85,000 85,893
- ---------------------------------------------------------------------------------------------------------------------
$1,472,772
- ---------------------------------------------------------------------------------------------------------------------
State & Local Agencies - 7.2% Alabama Building Renovation Authority, AMBAC,
6%, 2014 $1,515,000 $1,707,618
- ---------------------------------------------------------------------------------------------------------------------
Alabama Public School & College, Capital
Improvement, "A", 5%, 2019 500,000 522,545
- ---------------------------------------------------------------------------------------------------------------------
Alabama Public School & College, Capital
Improvement, "C", 5.75%, 2017 1,000,000 1,103,310
- ---------------------------------------------------------------------------------------------------------------------
Alabama Public School & College, Capital
Improvement, "C", 5.75%, 2018 1,035,000 1,141,066
- ---------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, Board of Education, "A",
FSA, 5.8%, 2020 865,000 924,201
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC,
7.839%, 2013+(+) 500,000 620,180
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC,
7.839%, 2016+(+) 500,000 634,000
- ---------------------------------------------------------------------------------------------------------------------
$6,652,920
- ---------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.2% Virgin Islands Public Finance Authority, "A",
ASST GTY, 5.5%, 2018 $1,000,000 $1,056,100
- ---------------------------------------------------------------------------------------------------------------------
Tobacco - 0.5% Childrens Trust Fund, Settlement Rev., PR,
5.375%, 2033 $470,000 $471,725
- ---------------------------------------------------------------------------------------------------------------------
Universities - Colleges - 6.6% Alabama Board of Education Rev., Refunding &
Improvement (Southern Union State Community
College), MBIA, 5%, 2022 $1,000,000 $1,040,920
- ---------------------------------------------------------------------------------------------------------------------
Auburn University, AL, General Fee Rev., AMBAC,
5%, 2034 1,000,000 1,029,550
- ---------------------------------------------------------------------------------------------------------------------
Auburn University, AL, General Fee Rev., AMBAC,
5%, 2029 1,000,000 1,032,570
- ---------------------------------------------------------------------------------------------------------------------
Mobile, AL, Spring Hill College, Educational
Building Authority Rev., "A",
5.25%, 2034 1,360,000 1,429,999
- ---------------------------------------------------------------------------------------------------------------------
University of Alabama, General Rev., "A", MBIA,
5%, 2029 1,000,000 1,033,570
- ---------------------------------------------------------------------------------------------------------------------
University of Alabama, University Rev., General
Fee, FGIC, 5%, 2021 525,000 548,982
- ---------------------------------------------------------------------------------------------------------------------
$6,115,591
- ---------------------------------------------------------------------------------------------------------------------
Utilities - Municipal Alabama Municipal Electric Power Authority, "A",
Owned - 12.5% MBIA, 5%, 2023 $1,000,000 $1,044,980
- ---------------------------------------------------------------------------------------------------------------------
DeKalb & Cherokee County, AL, Gas Rev., AMBAC,
5.4%, 2016 2,000,000 2,085,500
- ---------------------------------------------------------------------------------------------------------------------
Guam Power Authority Rev., RITES, AMBAC, 7.577%,
2013+(+) 500,000 585,500
- ---------------------------------------------------------------------------------------------------------------------
Guam Power Authority Rev., RITES, AMBAC, 7.077%,
2018+(+) 4,500,000 4,892,220
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., "II",
5.25%, 2031 875,000 917,245
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., "RR",
XLCA, 5%, 2030 500,000 519,465
- ---------------------------------------------------------------------------------------------------------------------
Southeastern Alabama Gas District Systems Rev.,
"A", AMBAC, 5.5%, 2020 1,000,000 1,082,580
- ---------------------------------------------------------------------------------------------------------------------
Tuskegee, AL, Utilities Board, AMBAC, 5.5%, 2022 400,000 419,888
- ---------------------------------------------------------------------------------------------------------------------
$11,547,378
- ---------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Alabama Drinking Water Finance Authority,
Revenue - 15.7% Revolving Fund Loan, "A", AMBAC, 6%, 2021 $725,000 $813,240
- ---------------------------------------------------------------------------------------------------------------------
Alabama Drinking Water Finance Authority,
Revolving Fund Loan, "C", AMBAC, 5.75%, 2018 1,000,000 1,103,760
- ---------------------------------------------------------------------------------------------------------------------
Alabama Water Pollution Control Authority,
Revolving Fund Loan, "B", AMBAC, 5.5%, 2016 1,000,000 1,035,230
- ---------------------------------------------------------------------------------------------------------------------
Alabama Water Pollution Control Authority,
Revolving Fund Loan, "B", AMBAC, 5.5%, 2020 1,380,000 1,428,617
- ---------------------------------------------------------------------------------------------------------------------
Alabama Water Pollution Control Authority,
Revolving Fund Loan, AMBAC, 5.75%, 2019 1,000,000 1,095,730
- ---------------------------------------------------------------------------------------------------------------------
Alabaster, AL, Sewer Rev., AMBAC, 5%, 2029 750,000 774,113
- ---------------------------------------------------------------------------------------------------------------------
Bessemer, AL, Water Rev., Warrants, "A", AMBAC,
5.75%, 2026 1,000,000 1,054,570
- ---------------------------------------------------------------------------------------------------------------------
Birmingham, AL, Waterworks & Sewer Board Rev.,
"A", FGIC, 5%, 2034 1,365,000 1,411,014
- ---------------------------------------------------------------------------------------------------------------------
Jasper, AL, Waterworks & Sewer Board, "A",
AMBAC, 5.2%, 2020 750,000 794,468
- ---------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, Sewer Rev., Warrants, "D",
FGIC, 5.7%, 2007(++) 1,000,000 1,058,790
- ---------------------------------------------------------------------------------------------------------------------
Limestone County, AL, Water Authority, FGIC,
5.5%, 2026 2,650,000 2,828,875
- ---------------------------------------------------------------------------------------------------------------------
Madison, AL, Water & Wastewater Board, MBIA,
5.5%, 2019 1,000,000 1,061,430
- ---------------------------------------------------------------------------------------------------------------------
Ozark, AL, Utilities Board Water & Sewer Rev.,
AMBAC, 5%, 2031 100,000 102,482
- ---------------------------------------------------------------------------------------------------------------------
$14,562,319
- ---------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $83,478,388) $89,266,728
- ---------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 2.1%
- ---------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, California Toll Bridge
Rev., "A", 2.22%, due 4/07/05 $700,000 $700,000
- ---------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, Sewer Rev., Capital
Improvement Warrants, "A", 2.3%, due 4/07/05 1,300,000 1,300,000
- ---------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost, $2,000,000) $2,000,000
- ---------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $85,478,388) $91,266,728
- ---------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.5% 1,350,816
- ---------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $92,617,544
- ---------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 MFS(R) ARKANSAS 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 - 96.9%
- ---------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- ---------------------------------------------------------------------------------------------------------------------
Airport & Port Little Rock, AR, Airport Rev., "A", FSA,
Revenue - 1.4% 5.25%, 2019 $800,000 $841,040
- ---------------------------------------------------------------------------------------------------------------------
Virgin Island Authority Marine Rev., "A", FSA,
5.25%, 2018 1,000,000 1,056,100
- ---------------------------------------------------------------------------------------------------------------------
$1,897,140
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - General
Purpose - 9.9% Arkansas College Savings, "A", 0%, 2017 $1,840,000 $1,075,075
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Federal Highway, Grant Anticipation
Tax Rev., 5%, 2014 1,500,000 1,607,100
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Federal Highway, Grant Anticipation
Tax Rev., "A", 5.5%, 2011 850,000 925,675
- ---------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, Infrastructure,
RITES, ETM, 8.112%, 2019+(+),(++) 1,250,000 1,498,150
- ---------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, Public Improvement
Rev., "A", 5%, 2034 1,000,000 1,019,200
- ---------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, RITES, MBIA,
8.612%, 2020+(+) 3,000,000 3,651,420
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority Rev.
(State Office Building), "F", XLCA, 5.25%, 2025 2,000,000 2,266,620
- ---------------------------------------------------------------------------------------------------------------------
Sebastian County, AR, Community Refunding &
Improvement, AMBAC, 5.6%, 2007(++) 1,500,000 1,596,390
- ---------------------------------------------------------------------------------------------------------------------
$13,639,630
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - Puerto Rico Municipal Finance Agency, RITES,
Improvement - 3.4% FSA, 8.129%, 2017+(+) $735,000 $865,815
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Municipal Finance Agency, RITES,
FSA, 8.129%, 2018+(+) 3,250,000 3,820,180
- ---------------------------------------------------------------------------------------------------------------------
$4,685,995
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - Arkansas, Capital Appreciation, College
Schools - 4.5% Savings, "B", 0%, 2012 $1,200,000 $893,148
- ---------------------------------------------------------------------------------------------------------------------
Arkansas, Capital Appreciation, College
Savings, "B", 0%, 2013 1,000,000 713,630
- ---------------------------------------------------------------------------------------------------------------------
Arkansas, Capital Appreciation, College
Savings, "B", 0%, 2014 1,150,000 780,390
- ---------------------------------------------------------------------------------------------------------------------
Arkansas, Capital Appreciation, College
Savings, "B", 0%, 2015 1,100,000 712,668
- ---------------------------------------------------------------------------------------------------------------------
Little Rock, AR, School District Construction,
"C", FSA, 5%, 2017 1,000,000 1,043,510
- ---------------------------------------------------------------------------------------------------------------------
Little Rock, AR, School District, "A", FSA,
5.4%, 2017 1,000,000 1,073,600
- ---------------------------------------------------------------------------------------------------------------------
Rogers, AR, School District, Number 030,
Refunding & Construction, "A", AMBAC, 5%, 2007
(++) 1,000,000 1,048,400
- ---------------------------------------------------------------------------------------------------------------------
$6,265,346
- ---------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Arkansas Development Finance Authority, Health
Hospitals - 9.7% Refunding (Sister of Mercy), "A", MBIA, 5%, 2013 $4,340,000 $4,657,992
- ---------------------------------------------------------------------------------------------------------------------
Batesville, AR, Medical District Rev. (White
River Medical Center), 5.5%, 2024 750,000 769,673
- ---------------------------------------------------------------------------------------------------------------------
Baxter County, AR, Hospital Rev., Refunding &
Improvement, "B", 5.6%, 2021 1,500,000 1,553,685
- ---------------------------------------------------------------------------------------------------------------------
Crittenden County, AR, Hospital Rev., Refunding
& Improvement, 7.15%, 2025 750,000 749,498
- ---------------------------------------------------------------------------------------------------------------------
Jefferson County, AR, Hospital Rev., Refunding
& Improvement (Regional Medical Center), 5.8%,
2021 1,000,000 1,070,820
- ---------------------------------------------------------------------------------------------------------------------
Little Rock, AR, Health Facilities Board
(Baptist Health-Bri Project), 5%, 2014 500,000 526,820
- ---------------------------------------------------------------------------------------------------------------------
Little Rock, AR, Health Facilities Hospital
Board Rev. (Baptist Medical Center),
6.9%, 2009 400,000 450,688
- ---------------------------------------------------------------------------------------------------------------------
North Little Rock, AR, Baptist Health
Facilities, 5.7%, 2022 500,000 521,125
- ---------------------------------------------------------------------------------------------------------------------
Pulaski County, AR, Hospital Rev. (Arkansas
Childrens Hospital), "B", 5.25%, 2015 500,000 521,910
- ---------------------------------------------------------------------------------------------------------------------
Pulaski County, AR, Hospital Rev. (Arkansas
Childrens Hospital), "B", 5.25%, 2016 1,000,000 1,040,230
- ---------------------------------------------------------------------------------------------------------------------
Sebastian County, AR, Health Facilities
Improvement (Sparks Regional Medical Center),
"A", 5.25%, 2021 1,000,000 1,031,450
- ---------------------------------------------------------------------------------------------------------------------
State of Arkansas, Development Finance
Authority Rev. (Washington Regional Medical
Center), 7.25%, 2020 500,000 555,200
- ---------------------------------------------------------------------------------------------------------------------
$13,449,091
- ---------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Term Arkansas Development Finance Authority Rev.
Care - 1.0% (Evangelical Lutheran Project), "B", AMBAC,
5.375%, 2019 $1,315,000 $1,409,128
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Virgin Islands Public Finance Authority,
Other - 0.3% Refinery Facilities Rev. (Hovensa Refinery),
5.875%, 2022 $335,000 $355,100
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Arkansas State Development Finance Authority,
Paper - 1.2% Industrial Facilities Rev. (Potlatch Corp.),
"A", 7.75%, 2025 $250,000 $283,870
- ---------------------------------------------------------------------------------------------------------------------
Camden, AR, Enviornmental Improvement Rev.
(International Paper Co.), "A",
5%, 2018 750,000 746,318
- ---------------------------------------------------------------------------------------------------------------------
Pine Bluff, AR, Environmental Improvement
(International Paper Co.), "A",
5.55%, 2022 250,000 255,673
- ---------------------------------------------------------------------------------------------------------------------
Pine Bluff, AR, Environmental Refunding
(International Paper Co.), "A", 6.7%, 2020 300,000 328,944
- ---------------------------------------------------------------------------------------------------------------------
$1,614,805
- ---------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Fort Smith, AR, Residential Housing (Gorman
Revenue - 0.7% Towers), "A", GNMA, 5.45%, 2037 $1,000,000 $1,021,410
- ---------------------------------------------------------------------------------------------------------------------
Single Family Housing - Harrison, AR, Residential Housing Facilities
Local - 7.4% Board, Single Family Mortgage Rev., FGIC, ETM,
7.4%, 2011(++) $4,000,000 $4,837,000
- ---------------------------------------------------------------------------------------------------------------------
Lonoke County, AR, Residential Housing
Facilities, FNMA, 7.9%, 2011 142,498 146,667
- ---------------------------------------------------------------------------------------------------------------------
Pulaski County, AR, Public Facilities Board
Rev., "C", FNMA, 0%, 2014 2,750,000 1,770,862
- ---------------------------------------------------------------------------------------------------------------------
Pulaski County, AR, Public Facilities Board,
"A", GNMA, 5.75%, 2034 1,890,000 1,939,745
- ---------------------------------------------------------------------------------------------------------------------
Sherwood, AR, Residential Housing Facilities
Board, Single Family Rev., MBIA,
7.5%, 2010(++) 1,250,000 1,502,387
- ---------------------------------------------------------------------------------------------------------------------
$10,196,661
- ---------------------------------------------------------------------------------------------------------------------
Single Family Housing - Arkansas Development Finance Authority Rev.,
State - 10.5% "1", 0%, 2011 $570,000 $350,960
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority,
Mortgage Backed Securities Program, "B", 5%, 2029 285,000 284,193
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority,
Mortgage Backed Securities Program, "C", GNMA,
5.35%, 2027 1,795,000 1,812,017
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority,
Mortgage Backed Securities Program, "E", GNMA,
5.4%, 2034 880,000 886,204
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority, Single
Family Mortgage Rev., "B", GNMA, 5.125%, 2024 500,000 507,515
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority, Single
Family Mortgage Rev., "B", GNMA, 5.25%, 2035 3,495,000 3,555,498
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Finance Authority, Mortgage Backed
Securities Program, "B", GNMA, 4.45%, 2034 1,610,000 1,621,077
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Finance Authority, Single Family, "F",
GNMA, 7.45%, 2027 432,500 435,013
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Finance Authority, Single Family,
Mortgage Backed Securities Program, 5.3%, 2023 690,000 694,892
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Finance Authority, Single Family,
Mortgage Backed Securities Program, "B", GNMA,
6.7%, 2027 995,000 1,017,577
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Finance Authority, Single Family,
Mortgage Backed Securities Program, "D",
5.85%, 2024 1,305,000 1,344,463
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Finance Authority, Single Family,
Mortgage Backed Securities Program, "I", GNMA,
5.3%, 2033 615,000 619,299
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Housing Development Agency, Single
Family Mortgage Program, ETM, 8.375%, 2011(++) $1,000,000 $1,267,810
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Authority, Mortgage
Backed Securities, "A", 4.375%, 2017 165,000 165,718
- ---------------------------------------------------------------------------------------------------------------------
$14,562,236
- ---------------------------------------------------------------------------------------------------------------------
State & Local Agencies - 0.5% Arkansas Development Finance Authority,
Economic Development Rev., "B",
5%, 2018 $175,000 $180,532
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority,
Economic Development Rev., "B", AMBAC,
5.8%, 2020 500,000 523,710
- ---------------------------------------------------------------------------------------------------------------------
$704,242
- ---------------------------------------------------------------------------------------------------------------------
Student Loan Revenue - 1.5% Arkansas Student Loan Authority, "B",
6.25%, 2006(++) $2,000,000 $2,077,820
- ---------------------------------------------------------------------------------------------------------------------
Tax - Other - 3.2% Little Rock, AR, Hotel & Restaurant Gross
Receipts Tax, 7.375%, 2015 $2,790,000 $3,390,687
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev.,
"A", 5.5%, 2022 1,000,000 1,051,760
- ---------------------------------------------------------------------------------------------------------------------
$4,442,447
- ---------------------------------------------------------------------------------------------------------------------
Tobacco - 0.2% Childrens Trust Fund, Settlement Rev., PR,
5.375%, 2033 $240,000 $240,881
- ---------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico Highway &
Tax - 2.6% Transportation Authority, "B", MBIA,
5.875%, 2021 $2,000,000 $2,236,000
- ---------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico Highway &
Transportation Authority, "G", 5%, 2023 750,000 778,140
- ---------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico Highway &
Transportation Authority, "G", FGIC,
5%, 2022 500,000 527,940
- ---------------------------------------------------------------------------------------------------------------------
$3,542,080
- ---------------------------------------------------------------------------------------------------------------------
Universities - Colleges - 16.3% Arkansas State University, Student Fee-ASU
(Newport Campus), AMBAC, 5%, 2028 $700,000 $712,502
- ---------------------------------------------------------------------------------------------------------------------
Conway, AR, Public Facilities Board, Capital
Improvement Rev. (Hendrix College), "B", 5%, 2035 1,000,000 995,340
- ---------------------------------------------------------------------------------------------------------------------
Conway, AR, Public Facilities Rev. (Hendrix
College), 5.85%, 2016 1,000,000 1,034,830
- ---------------------------------------------------------------------------------------------------------------------
Pulaski, AR, Technical College, Student Tuition
& Fee Rev., FGIC, 5%, 2029 1,820,000 1,870,924
- ---------------------------------------------------------------------------------------------------------------------
Siloam Springs, AR, Public Education
Facilities, Capital Improvement (John Brown
University), AMBAC, 5.35%, 2020 500,000 529,940
- ---------------------------------------------------------------------------------------------------------------------
University of Arkansas, University Construction
Rev. (UAMS Campus), "B", MBIA, 5%, 2026 1,405,000 1,459,107
- ---------------------------------------------------------------------------------------------------------------------
University of Arkansas, University Construction
Rev. (UAMS Campus), "B", MBIA, 5%, 2027 1,000,000 1,036,140
- ---------------------------------------------------------------------------------------------------------------------
University of Arkansas, University Facilities
Rev. (Fayetteville Campus), FGIC,
5.5%, 2012(++) 2,870,000 3,211,530
- ---------------------------------------------------------------------------------------------------------------------
University of Arkansas, University Facilities
Rev. (Fayetteville Campus), FGIC, 5%, 2027 3,155,000 3,249,839
- ---------------------------------------------------------------------------------------------------------------------
University of Arkansas, University Facilities
Rev. (Fayetteville Campus), FGIC, 5%, 2032 2,500,000 2,565,400
- ---------------------------------------------------------------------------------------------------------------------
University of Arkansas, University Rev. (UAMS
Campus), "B", MBIA, 5%, 2034 2,500,000 2,586,425
- ---------------------------------------------------------------------------------------------------------------------
University of Arkansas, University Revs.
(Fayetteville Campus), FGIC, 5.5%, 2012(++) 1,765,000 1,975,035
- ---------------------------------------------------------------------------------------------------------------------
University of Central Arkansas, "A", AMBAC,
5%, 2023 1,100,000 1,130,426
- ---------------------------------------------------------------------------------------------------------------------
University of Central Arkansas, Student Housing
Rev., "C", FGIC, 5%, 2034 250,000 256,142
- ---------------------------------------------------------------------------------------------------------------------
$22,613,580
- ---------------------------------------------------------------------------------------------------------------------
Universities - Arkansas State University Rev., Housing
Dormitories - 2.4% Systems, AMBAC, 5.15%, 2021 $1,240,000 $1,298,354
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Tech University Rev., Housing Systems,
AMBAC, 5.2%, 2026 1,000,000 1,056,310
- ---------------------------------------------------------------------------------------------------------------------
Pope County, AR, Residential Housing, Arkansas
Tech University Project, "A",
6%, 2027 500,000 485,855
- ---------------------------------------------------------------------------------------------------------------------
University of Central Arkansas, Student Housing
Rev., "C", FGIC, 5.25%, 2029 $500,000 $518,370
- ---------------------------------------------------------------------------------------------------------------------
$3,358,889
- ---------------------------------------------------------------------------------------------------------------------
Utilities - Investor Jefferson County, AR, Pollution Control Rev.
Owned - 0.8% (Arkansas Power & Light Co.),
6.3%, 2018 $1,050,000 $1,067,115
- ---------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 8.5% Benton, AR, Utilities Rev., AMBAC, 5%, 2030 $470,000 $482,558
- ---------------------------------------------------------------------------------------------------------------------
North Little Rock, AR, Electric Rev., "A",
MBIA, 6.5%, 2010 2,000,000 2,208,640
- ---------------------------------------------------------------------------------------------------------------------
North Little Rock, AR, Electric Rev., "A",
MBIA, 6.5%, 2015 6,000,000 7,181,640
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev.,
"NN", 5.125%, 2024 1,000,000 1,042,560
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev.,
"RR", XLCA, 5%, 2030 775,000 805,171
- ---------------------------------------------------------------------------------------------------------------------
$11,720,569
- ---------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Arkansas Development Finance Authority,
Revenue - 10.9% Economic Development Rev., "I", AMBAC,
5.65%, 2014 $375,000 $389,948
- ---------------------------------------------------------------------------------------------------------------------
Arkansas Development Finance Authority,
Revolving Loan Fund, "A", 5.85%, 2006(++) 2,130,000 2,228,896
- ---------------------------------------------------------------------------------------------------------------------
Fort Smith, AR, Water & Sewer Rev., "C", FSA,
5.25%, 2020 1,315,000 1,402,934
- ---------------------------------------------------------------------------------------------------------------------
Fort Smith, AR, Water & Sewer Rev., AMBAC,
5.65%, 2019 1,000,000 1,089,890
- ---------------------------------------------------------------------------------------------------------------------
Fort Smith, AR, Water & Sewer Rev., Refunding &
Construction, "A", FSA, 5%, 2019 2,125,000 2,207,216
- ---------------------------------------------------------------------------------------------------------------------
Fort Smith, AR, Water & Sewer Rev., Refunding &
Construction, "A", FSA, 5%, 2021 2,750,000 2,843,830
- ---------------------------------------------------------------------------------------------------------------------
Little Rock, AR, Sewer Rev., Refunding &
Construction, 5%, 2022 1,750,000 1,806,315
- ---------------------------------------------------------------------------------------------------------------------
Paragould, AR, Water Sewer & Electric Rev.,
AMBAC, 5.6%, 2020 765,000 834,041
- ---------------------------------------------------------------------------------------------------------------------
South Sebastian County, AR, Water Refunding,
MBIA, 5%, 2038 1,000,000 1,025,440
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Water & Power Authority Rev.,
ASST GTY, 5.3%, 2018 1,250,000 1,321,937
- ---------------------------------------------------------------------------------------------------------------------
$15,150,447
- ---------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $124,693,564) $134,014,612
- ---------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 3.2%
- ---------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, California Toll Bridge
Rev., "A", 2.08%, due 4/04/05 $400,000 $400,000
- ---------------------------------------------------------------------------------------------------------------------
Bell County, TX, Health Facilities Development
Corp. Rev. (Scott & White Memorial Hospital),
"B-1", 2.2%, due 4/01/05 200,000 200,000
- ---------------------------------------------------------------------------------------------------------------------
Harris County, TX, Health Facilities
Development Corp., Special Facilities Rev.
(Texas Medical Center), MBIA, 2.2%, due 4/01/05 400,000 400,000
- ---------------------------------------------------------------------------------------------------------------------
Illinois Development Finance Authority Rev.
(Jewish Federation of Metropolitan Chicago),
2.2%, due 4/01/05 900,000 900,000
- ---------------------------------------------------------------------------------------------------------------------
Irvine, CA, Improvement Building Act 1915,
2.28%, due 4/06/05 1,350,000 1,350,000
- ---------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer
Finance Authority Rev., 2.2%, due 4/01/05 500,000 500,000
- ---------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Health Facilities
Authority Rev., Pooled Hospital Loan Program,
2.22%, due 4/01/05 400,000 400,000
- ---------------------------------------------------------------------------------------------------------------------
San Francisco, CA, City & County Financial
Corp., Lease Rev. (Moscone Center Expansion),
2.1%, due 4/07/05 250,000 250,000
- ---------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost, $4,400,000) $4,400,000
- ---------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $129,093,564) $138,414,612
- ---------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (0.1)% (80,134
- ---------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $138,334,478
- ---------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 MFS(R) CALIFORNIA 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 - 97.8%
- ---------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- ---------------------------------------------------------------------------------------------------------------------
Airport & Port Long Beach, CA, Habor Rev., "A" FGIC,
Revenue - 3.8% 5.25%, 2018 $3,500,000 $3,685,710
- ---------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Department of Airports Rev.
(Ontario International Airport), "A", FGIC,
6%, 2017 4,100,000 4,261,458
- ---------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Habor Department Rev.,"B",
5.375%, 2023 3,000,000 3,078,330
- ---------------------------------------------------------------------------------------------------------------------
Port Oakland, CA, "K", FGIC, 5.75%, 2020 4,000,000 4,269,160
- ---------------------------------------------------------------------------------------------------------------------
$15,294,658
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - General Commonwealth of Puerto Rico, ROLS, Series II R
Purpose - 7.7% 124B, XLCA, 8.543%, 2017+(+) $1,500,000 $1,918,830
- ---------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, ROLS, Series II R
184C, FGIC, 8.633%, 2016+(+) 3,300,000 4,264,260
- ---------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, RITES, 7.566%, 2014+(+) 5,405,000 6,621,017
- ---------------------------------------------------------------------------------------------------------------------
State of California, 10%, 2007 1,055,000 1,224,486
- ---------------------------------------------------------------------------------------------------------------------
State of California, 5.5%, 2010(++) 3,000,000 3,283,560
- ---------------------------------------------------------------------------------------------------------------------
State of California, 5.125%, 2025 2,000,000 2,073,840
- ---------------------------------------------------------------------------------------------------------------------
State of California, 5.25%, 2029 2,000,000 2,083,120
- ---------------------------------------------------------------------------------------------------------------------
State of California, AMBAC, 7.2%, 2008 1,600,000 1,792,688
- ---------------------------------------------------------------------------------------------------------------------
State of California, AMBAC, 6.3%, 2010 3,000,000 3,440,550
- ---------------------------------------------------------------------------------------------------------------------
State of California, AMBAC, 7%, 2010 2,000,000 2,362,140
- ---------------------------------------------------------------------------------------------------------------------
State of California, RITES, "B", 8.543%, 2017+(+) 1,250,000 1,539,725
- ---------------------------------------------------------------------------------------------------------------------
$30,604,216
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - Antelope Valley, CA (Union High School), "A",
Schools - 15.5% MBIA, 5%, 2027 $1,500,000 $1,550,430
- ---------------------------------------------------------------------------------------------------------------------
Butte Glenn Community College District, "A",
MBIA, 5%, 2026 1,885,000 1,951,031
- ---------------------------------------------------------------------------------------------------------------------
Campbell, CA, Union High School District, FSA,
5%, 2021 1,280,000 1,331,942
- ---------------------------------------------------------------------------------------------------------------------
Campbell, CA, Union School District Election of
2002, "B", FGIC, 5.5%, 2033 2,270,000 2,463,676
- ---------------------------------------------------------------------------------------------------------------------
Capistrano, CA, Union High School District,
"A", FGIC, 5.875%, 2020 1,185,000 1,332,829
- ---------------------------------------------------------------------------------------------------------------------
Chaffey, CA, Union High School District, "C",
FSA, 5%, 2027 1,000,000 1,032,810
- ---------------------------------------------------------------------------------------------------------------------
Colton, CA, Joint Union School District, "A",
FGIC, 5.375%, 2026 1,200,000 1,302,540
- ---------------------------------------------------------------------------------------------------------------------
Coronada, CA, Union School District, "A",
5.7%, 2020 1,285,000 1,427,841
- ---------------------------------------------------------------------------------------------------------------------
Escondido, CA, Union School District, "A", FSA,
5%, 2026 1,000,000 1,031,460
- ---------------------------------------------------------------------------------------------------------------------
Glendale, CA, Union School District, "B", FSA,
5.5%, 2018 4,275,000 4,670,138
- ---------------------------------------------------------------------------------------------------------------------
Inglewood, CA, Union School District, "A",
FGIC, 6%, 2019 1,695,000 1,890,857
- ---------------------------------------------------------------------------------------------------------------------
Little Lake, CA, City School District, "A",
FSA, 6.125%, 2010(++) 1,035,000 1,186,503
- ---------------------------------------------------------------------------------------------------------------------
Live Oak, CA, School District, Santa Cruz
County, Election 2004, "A", MBIA, 5%, 2033 1,410,000 1,458,194
- ---------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Union School District Election
of 1997, "E", MBIA, 5.125%, 2027 5,000,000 5,194,050
- ---------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Union School District, RITES,
FSA, 7.566%, 2020+(+) 5,000,000 5,791,300
- ---------------------------------------------------------------------------------------------------------------------
Moreno Valley, CA, Union School District
Election of 2004, "A", FSA, 5%, 2026 1,715,000 1,780,925
- ---------------------------------------------------------------------------------------------------------------------
Moreno Valley, CA, Union School District
Election of 2004, "A", FSA, 5%, 2025 1,075,000 1,118,817
- ---------------------------------------------------------------------------------------------------------------------
Morgan Hill, CA, Union School District, FGIC,
5.5%, 2020 2,545,000 2,777,537
- ---------------------------------------------------------------------------------------------------------------------
Natomas Union School District Election of 2002
"B", FGIC, 5%, 2028 1,430,000 1,483,167
- ---------------------------------------------------------------------------------------------------------------------
Oceanside, CA, Union School District Election
of 2000, "C", MBIA, 5.25%, 2032 1,940,000 2,035,952
- ---------------------------------------------------------------------------------------------------------------------
Rowland, CA, Union School District, "A", FSA,
5.5%, 2020 1,250,000 1,365,675
- ---------------------------------------------------------------------------------------------------------------------
San Diego, CA, Union School District, "C", FSA,
5%, 2026 2,150,000 2,224,670
- ---------------------------------------------------------------------------------------------------------------------
San Gabriel, CA, Union School District, "A",
FSA, 5%, 2024 2,000,000 2,069,240
- ---------------------------------------------------------------------------------------------------------------------
San Ysidro, CA, School District, AMBAC,
6.125%, 2021 960,000 1,104,384
- ---------------------------------------------------------------------------------------------------------------------
Santa Clara, CA, Union School District, FGIC,
5.5%, 2019 2,210,000 2,435,442
- ---------------------------------------------------------------------------------------------------------------------
Santa Maria, CA, Joint Union High School
District, "A", FSA, 5.375%, 2020 1,120,000 1,242,830
- ---------------------------------------------------------------------------------------------------------------------
Santa Maria, CA, Joint Union High School
District, "A", FSA, 5.375%, 2021 1,210,000 1,342,701
- ---------------------------------------------------------------------------------------------------------------------
Tehachapi, CA, Union School District, "A",
FGIC, 5.625%, 2020 1,100,000 1,206,623
- ---------------------------------------------------------------------------------------------------------------------
Visalia, CA, Union School District, COP, MBIA,
0%, 2005 4,655,000 4,578,006
- ---------------------------------------------------------------------------------------------------------------------
Washington, CA, Union School District, Election
of 1999, "A", FGIC, 5.625%, 2021 1,000,000 1,108,940
- ---------------------------------------------------------------------------------------------------------------------
$61,490,510
- ---------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Abag Finance Authority Rev. (San Diego
Hospitals - 11.1% Hospital), "C", 5.375%, 2020 $2,000,000 $2,082,440
- ---------------------------------------------------------------------------------------------------------------------
California Health Facilities Financing
Authority Rev., Catholic Healthcare West, "G",
5.25%, 2023 2,000,000 2,067,880
- ---------------------------------------------------------------------------------------------------------------------
California Health Facilities Financing
Authority Rev., Health Facilities (Adventist
Health Systems), "A", 5%, 2033 1,750,000 1,744,697
- ---------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development
Authority Rev. (Daughters Of Charity Health),
"A", 5.25%, 2030 1,500,000 1,532,055
- ---------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development
Authority Rev. (Henry Mayo Newhall Memorial
Hospital), "A", 5%, 2018 2,000,000 2,071,740
- ---------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development
Authority Rev. (Kaiser Permanente), "A",
5.5%, 2032 2,000,000 2,082,780
- ---------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development
Authority Rev. (Los Angeles Childrens
Hospital), 5.125%, 2019 4,000,000 4,145,200
- ---------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development
Authority Rev., CHFC, ETM,
0%, 2007(++) 3,645,000 3,397,577
- ---------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development
Authority Rev., CHFC, ETM,
0%, 2008(++) 6,345,000 5,696,795
- ---------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development
Authority Rev., Health Facilities (Memorial
Health Services), "A", 6%, 2023 1,500,000 1,648,530
- ---------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development,
"B", 5.625%, 2042 4,000,000 4,157,120
- ---------------------------------------------------------------------------------------------------------------------
California Valley Health Systems, COP,
6.875%, 2023 500,000 500,840
- ---------------------------------------------------------------------------------------------------------------------
Central California Joint Powers Health
Financing (Community Hospitals of Central
California), 5.625%, 2021 1,000,000 1,024,070
- ---------------------------------------------------------------------------------------------------------------------
Kaweah Delta Health Care District Rev., 6%, 2034 2,000,000 2,142,800
- ---------------------------------------------------------------------------------------------------------------------
Rancho Mirage, CA, Joint Powers (Eisenhower
Medical Center), 5.625%, 2029 3,000,000 3,105,690
- ---------------------------------------------------------------------------------------------------------------------
Tahoe Forest, CA, Hospital District Rev., "A",
5.85%, 2022 1,000,000 1,030,590
- ---------------------------------------------------------------------------------------------------------------------
Turlock, CA, Health Facilities Rev. (Emanuel
Medical Center), 5%, 2024 500,000 493,245
- ---------------------------------------------------------------------------------------------------------------------
Turlock, CA, Health Facilities Rev. (Emanuel
Medical Center), 5.375%, 2034 2,000,000 2,011,080
- ---------------------------------------------------------------------------------------------------------------------
Washington Township, CA, Health Care Rev.,
5%, 2018 1,000,000 1,024,680
- ---------------------------------------------------------------------------------------------------------------------
West Contra Costa California Healthcare
District, AMBAC, 5.5%, 2029 2,000,000 2,132,540
- ---------------------------------------------------------------------------------------------------------------------
$44,092,349
- ---------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Term California Health Facilities Financing
Care - 0.7% Authority Rev. (Paradise Valley Estates),
5.125%, 2022 $1,000,000 $1,039,730
- ---------------------------------------------------------------------------------------------------------------------
La Verne, CA, Certificate Participants
(Brethren Hillcrest Homes), "B", 6.625%, 2025 1,000,000 1,070,330
- ---------------------------------------------------------------------------------------------------------------------
Millbrae, CA, Residential Facilities Rev.
(Magnolia of Millbrae), 7.375%, 2027 475,000 498,270
- ---------------------------------------------------------------------------------------------------------------------
$2,608,330
- ---------------------------------------------------------------------------------------------------------------------
Human Services - 0.4% California Statewide Communities Development
Authority (Prides Industries), 7.125%, 2016 $1,735,000 $1,789,670
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - California Pollution Control Financing
Environmental Services - 1.3% Authority, Solid Waste Disposal Rev. (Browning
Ferris, Inc.), 5.8%, 2016 $2,000,000 $1,889,420
- ---------------------------------------------------------------------------------------------------------------------
California Pollution Control Financing
Authority, Solid Waste Disposal Rev. (Waste
Management Project), "A", 5.125%, 2031 2,250,000 2,284,312
- ---------------------------------------------------------------------------------------------------------------------
California Pollution Control Financing Rev.
(Laidlaw, Inc.), "A", 6.7%, 2007* 2,750,000 13,750
- ---------------------------------------------------------------------------------------------------------------------
California Pollution Control Financing
Authority, Solid Waste Disposal Rev. (Waste
Mangement, Inc.), "A-2", 5.4%, 2025 1,000,000 1,012,490
- ---------------------------------------------------------------------------------------------------------------------
$5,199,972
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Virgin Islands Public Finance Authority,
Other - 0.3% Refinery Facilities Rev. (Hovensa Refinery),
5.875%, 2022 $960,000 $1,017,600
- ---------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment & Del Mar, CA, Race Track Authority Rev.,
Tourism - 0.7% 6.2%, 2011 $1,365,000 $1,430,930
- ---------------------------------------------------------------------------------------------------------------------
Del Mar, CA, Race Track Authority Rev.,
6.45%, 2013 1,350,000 1,354,955
- ---------------------------------------------------------------------------------------------------------------------
$2,785,885
- ---------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - South Coast Air Quality Management District
Other - 0.9% Building Corp., California Rev., "B" AMBAC,
0%, 2005 $3,480,000 $3,452,960
- ---------------------------------------------------------------------------------------------------------------------
Multi-Family Housing California Housing Finance Agency Rev., Multi-
Revenue - 3.2% Unit Rental Housing, "B II",
6.7%, 2015 $2,378,000 $2,413,028
- ---------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development
Authority Rev. (Irvine Apartments), 5.25%, 2025 6,000,000 6,231,780
- ---------------------------------------------------------------------------------------------------------------------
Palmdale, CA, Multi-Family Housing Rev., "A",
FNMA, 7.375%, 2024 1,000,000 1,001,690
- ---------------------------------------------------------------------------------------------------------------------
San Bernardino County, CA (Equity Residential/
Redlands), "A", 5.2%, 2029 3,000,000 3,117,600
- ---------------------------------------------------------------------------------------------------------------------
$12,764,098
- ---------------------------------------------------------------------------------------------------------------------
Parking - 0.3% San Francisco, CA, Union Square, MBIA, 6%, 2020 $1,000,000 $1,117,940
- ---------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax Contra Costa, CA, Transportation & Sales Tax
Revenue - 0.2% Rev., "A", ETM, 6.875%, 2007(++) $930,000 $980,081
- ---------------------------------------------------------------------------------------------------------------------
Single Family Housing - California Rural Home Mortgage Finance
Local - 1.1% Authority Rev., GNMA, 7.3%, 2031 $75,000 $76,846
- ---------------------------------------------------------------------------------------------------------------------
California Rural Home Mortgage Finance
Authority Rev., Mortgage Backed Securities
Program, "B4", GNMA, 6.35%, 2029 95,000 95,651
- ---------------------------------------------------------------------------------------------------------------------
Pomona, CA, Single Family Mortgage Rev., GNMA,
ETM, 7.375%, 2010(++) 1,490,000 1,667,504
- ---------------------------------------------------------------------------------------------------------------------
Pomona, CA, Single Family Mortgage Rev., GNMA,
ETM, 7.5%, 2023(++) 2,000,000 2,652,060
- ---------------------------------------------------------------------------------------------------------------------
$4,492,061
- ---------------------------------------------------------------------------------------------------------------------
Single Family Housing - California Housing Finance Agency Rev., Home
State - 0.9% Mortgage, FSA, 0%, 2019 $3,940,000 $1,711,654
- ---------------------------------------------------------------------------------------------------------------------
California Housing Finance Agency Rev., Home
Mortgage, MBIA, 0%, 2028 6,535,000 1,947,887
- ---------------------------------------------------------------------------------------------------------------------
$3,659,541
- ---------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 0.8% California Pollution Control Financing
Authority, Solid Waste Disposal Rev. (West
County Resource Recovery), "A", 5.125%, 2014 $1,000,000 $1,021,220
- ---------------------------------------------------------------------------------------------------------------------
South Bayside Waste Management Authority,
California Solid Waste System Rev., AMBAC,
5.75%, 2020 2,100,000 2,320,710
- ---------------------------------------------------------------------------------------------------------------------
$3,341,930
- ---------------------------------------------------------------------------------------------------------------------
State & Agency - Grossmont, CA, Union High School District,
Other - 2.8% MBIA, 0%, 2006 $6,000,000 $5,738,040
- ---------------------------------------------------------------------------------------------------------------------
Pasadena, CA, COP, Old Pasadena Parking
Facilities Project, 6.25%, 2018 3,160,000 3,600,567
- ---------------------------------------------------------------------------------------------------------------------
Sacramento County, CA, COP, Capital Projects,
AMBAC, 5.75%, 2018 1,500,000 1,673,250
- ---------------------------------------------------------------------------------------------------------------------
$11,011,857
- ---------------------------------------------------------------------------------------------------------------------
State & Local Banning, CA, COP, Water Systems Improvement
Agencies - 12.0% Project, AMBAC, 8%, 2019 $965,000 $1,234,804
- ---------------------------------------------------------------------------------------------------------------------
California Public Works Board Lease Rev.,
Department of Corrections State Prison, "A",
7.4%, 2010 5,000,000 5,904,000
- ---------------------------------------------------------------------------------------------------------------------
California Public Works Board, Department of
Justice, "D", 5.25%, 2020 1,565,000 1,661,451
- ---------------------------------------------------------------------------------------------------------------------
Fortuna, Parlier, & Susanville, CA, COP, "B",
7.375%, 2017 690,000 701,558
- ---------------------------------------------------------------------------------------------------------------------
Golden State Tobacco Securitization, "B",
5.625%, 2038 5,000,000 5,349,200
- ---------------------------------------------------------------------------------------------------------------------
Golden State, CA, Tobacco Securitization Corp.,
Tobacco Settlement Rev., Enhanced, "B", 5.5%, 2043 7,000,000 7,356,860
- ---------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Convention & Exhibition Center
Authority, COP, 9%, 2005(++) 1,900,000 1,980,332
- ---------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, Convention & Exhibition Center
Authority, COP, AMBAC, 0%, 2005 2,400,000 2,379,120
- ---------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, COP, Antelope Valley
Courthouse, "A", AMBAC, 5.25%, 2027 3,000,000 3,130,710
- ---------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, COP, Real Property Program,
AMBAC, 5.3%, 2027 3,000,000 3,196,200
- ---------------------------------------------------------------------------------------------------------------------
Pomona, CA, Public Financing Authority Rev.,
"P", 6.25%, 2010 4,020,000 4,438,884
- ---------------------------------------------------------------------------------------------------------------------
Sacramento, CA, City Financing Authority Rev.,
Capital Improvement, 5.5%, 2021 1,635,000 1,760,682
- ---------------------------------------------------------------------------------------------------------------------
Sacramento, CA, City Financing Authority Rev.,
City Hall & Redevelopment Projects, "A", FSA,
5%, 2032 2,000,000 2,041,960
- ---------------------------------------------------------------------------------------------------------------------
Salinas CA, COP, Capital Improvement Projects,
"A", 5.7%, 2028 2,200,000 2,314,730
- ---------------------------------------------------------------------------------------------------------------------
San Francisco, CA, City & County COP (San Bruno
Jail No 3), AMBAC, 5.25%, 2033 3,930,000 4,110,230
- ---------------------------------------------------------------------------------------------------------------------
$47,560,721
- ---------------------------------------------------------------------------------------------------------------------
Tax - Other - 2.3% Irvine, CA, School District Special Tax Rev.,
Community Facilities District No. 86-1, AMBAC,
5.8%, 2020 $3,500,000 $3,801,035
- ---------------------------------------------------------------------------------------------------------------------
Santa Cruz County, CA, Redevelopment Agency Tax
Allocation (Oak/Soquel Community), 5.6%, 2017 1,455,000 1,549,881
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev.,
"A", 5.5%, 2022 2,000,000 2,103,520
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev.,
"E", 5.875%, 2018 1,600,000 1,649,488
- ---------------------------------------------------------------------------------------------------------------------
$9,103,924
- ---------------------------------------------------------------------------------------------------------------------
Tax Assessment - 7.0% Brea, CA, Public Finance Authority Rev., MBIA,
0%, 2005 $2,235,000 $2,217,634
- ---------------------------------------------------------------------------------------------------------------------
Brea, CA, Public Finance Authority Rev., MBIA,
0%, 2006 2,415,000 2,331,465
- ---------------------------------------------------------------------------------------------------------------------
Duarte, CA, Redevelopment Agency Tax
Allocation, Davis Addition Project Area,
6.7%, 2014 650,000 699,634
- ---------------------------------------------------------------------------------------------------------------------
Fontana, CA, Redevelopment Agency Tax
Allocation, Jurupa Hills Redevelopment Project,
"A", 5.5%, 2027 3,350,000 3,435,526
- ---------------------------------------------------------------------------------------------------------------------
Huntington Park, CA, Public Financing Rev.
Wastewater Systems Project, "A", 6.2%, 2025 2,000,000 2,045,440
- ---------------------------------------------------------------------------------------------------------------------
La Mirada, CA, Redevelopment Agency, Special
Tax Rev., Community Facilities District No.
89-1, 5.7%, 2020 1,500,000 1,506,360
- ---------------------------------------------------------------------------------------------------------------------
Modesto, CA, Irrigation District, COP,
Refunding & Capital Improvements, "B",
5.3%, 2022 1,785,000 1,791,622
- ---------------------------------------------------------------------------------------------------------------------
Modesto, CA, Public Financing Authority (John
Thurman Field Renovation), 6.125%, 2016 1,330,000 1,400,317
- ---------------------------------------------------------------------------------------------------------------------
Orange County, CA, Community Facilities
District, Special Tax (Rancho Santa Margarita),
"A", 5.55%, 2017 1,000,000 1,056,480
- ---------------------------------------------------------------------------------------------------------------------
Poway, CA, Community Facilities District,
Special Tax (Parkway Business Center), 6.5%, 2010 715,000 781,037
- ---------------------------------------------------------------------------------------------------------------------
Poway, CA, Community Facilities District,
Special Tax (Parkway Business Center), 6.75%, 2015 775,000 849,516
- ---------------------------------------------------------------------------------------------------------------------
Riverside County, CA, Public Financing
Authority, Tax Allocation Rev., Redevelopment
Projects, "A", 5.25%, 2016 3,120,000 3,207,953
- ---------------------------------------------------------------------------------------------------------------------
Riverside County, CA, Public Financing
Authority, Tax Allocation Rev., XLCA,
5%, 2037 3,000,000 3,049,860
- ---------------------------------------------------------------------------------------------------------------------
Riverside County, CA, Redevelopment Agency, Tax
Allocation, "A", XLCA, 5%, 2037 2,000,000 2,033,240
- ---------------------------------------------------------------------------------------------------------------------
San Diego, CA, Redevelopment Agency, Tax
Allocation (Centre City), "B", AMBAC, 5.3%, 2020 1,250,000 1,344,013
- ---------------------------------------------------------------------------------------------------------------------
$27,750,097
- ---------------------------------------------------------------------------------------------------------------------
Tobacco - 0.9% Golden State Tobacco Securitization Corp.,
California Tobacco Settlement Rev., "A1",
6.75%, 2039 $1,940,000 $2,042,917
- ---------------------------------------------------------------------------------------------------------------------
Golden State Tobacco Securitization, Asset
Backed, "A1", 6.25%, 2033 1,485,000 1,523,031
- ---------------------------------------------------------------------------------------------------------------------
$3,565,948
- ---------------------------------------------------------------------------------------------------------------------
Toll Roads - 0.7% Foothill/Eastern Corridor Agency, California
Toll Road Rev., Capital Appreciation, "A",
7.1%, 2010(++) $2,500,000 $2,970,850
- ---------------------------------------------------------------------------------------------------------------------
Transportation - Special Alameda Corridor Transportaion Authority,
Tax - 0.5% California Rev., Capital Appreciation, "A",
AMBAC, 0%, 2030 $8,000,000 $2,072,480
- ---------------------------------------------------------------------------------------------------------------------
Universities - Colleges - 7.5% California Educational Facilities Authority
Rev. (Fresno Pacific University), "A", 6.75%,
2019 $2,000,000 $2,188,060
- ---------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority
Rev. (L.A. College of Chiropractic),
5.6%, 2017 2,100,000 2,023,917
- ---------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority
Rev. (Lutheran University), "C", 5%, 2029 2,500,000 2,507,850
- ---------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority
Rev. (Pomona College), "B", 5.875%, 2019 2,000,000 2,227,020
- ---------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority
Rev. (Santa Clara University), "A", MBIA, 5%,
2027 1,340,000 1,374,156
- ---------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority
Rev., Pooled College & University Projects,
"B", 6%, 2012 1,400,000 1,456,896
- ---------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority
Rev., Pooled College & University Projects,
"B", 6.625%, 2020 1,000,000 1,096,940
- ---------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority
Rev., Pooled College & University Projects,
"B", 6.3%, 2007(++) 1,000,000 1,087,190
- ---------------------------------------------------------------------------------------------------------------------
California Statewide Communities, Notre Dame De
Namur University, 6.625%, 2033 1,000,000 1,012,700
- ---------------------------------------------------------------------------------------------------------------------
Foothill-De Anza, CA, Community College
District, Election of 1999, "B", FGIC,
0%, 2024 6,000,000 2,237,820
- ---------------------------------------------------------------------------------------------------------------------
Foothill-De Anza, CA, Community College
District, Election of 1999, "B", FGIC,
0%, 2025 1,500,000 527,415
- ---------------------------------------------------------------------------------------------------------------------
Long Beach, CA, Industrial Development Rev.
(CSU Foundation), "A", 5.25%, 2023 1,450,000 1,477,072
- ---------------------------------------------------------------------------------------------------------------------
San Diego County, CA, COP, (Burnham Institute),
6.25%, 2029 2,300,000 2,404,811
- ---------------------------------------------------------------------------------------------------------------------
University of California Rev., RITES, MBIA,
7.8927%, 2016+(+) 5,705,000 6,367,864
- ---------------------------------------------------------------------------------------------------------------------
University of California, COP, San Diego Campus
Projects, "A", 5.25%, 2032 1,840,000 1,909,092
- ---------------------------------------------------------------------------------------------------------------------
$29,898,803
- ---------------------------------------------------------------------------------------------------------------------
Universities - Secondary California Statewide Communities Development
Schools - 1.0% Authority Rev. Aspire Public Schools, (Oakland
Project), "A", 7.25%, 2031 $985,000 $1,004,661
- ---------------------------------------------------------------------------------------------------------------------
California Statewide Communities, Development
Authority Rev. (Escondido Charter High School),
7.5%, 2036 1,000,000 1,014,080
- ---------------------------------------------------------------------------------------------------------------------
Los Angeles, CA, COP, 5.7%, 2018 1,900,000 2,013,487
- ---------------------------------------------------------------------------------------------------------------------
$4,032,228
- ---------------------------------------------------------------------------------------------------------------------
Utilities - Investor California Pollution Control Financing
Owned - 1.6% Authority, Pollution Control Rev. (Pacific Gas
& Electric Co.), MBIA, 5.35%, 2016 $3,500,000 $3,729,180
- ---------------------------------------------------------------------------------------------------------------------
California Pollution Control Financing
Authority, Pollution Control Rev. (Southern
California Edison Co.), 6.4%, 2024 500,000 502,470
- ---------------------------------------------------------------------------------------------------------------------
Chula Vista, CA, Industrial Development Rev.
(San Diego Gas & Electric Co.), "A", 4.9%, 2023 2,000,000 1,992,820
- ---------------------------------------------------------------------------------------------------------------------
$6,224,470
- ---------------------------------------------------------------------------------------------------------------------
Utilities - Municipal Glendale, CA, Electric Works Rev., MBIA,
Owned - 5.0% 5.75%, 2019 $1,420,000 $1,585,302
- ---------------------------------------------------------------------------------------------------------------------
Glendale, CA, Electric Works Rev., MBIA,
5.75%, 2020 1,160,000 1,283,192
- ---------------------------------------------------------------------------------------------------------------------
Northern California Power Agency Public Power
Rev., 5.85%, 2010 880,000 962,289
- ---------------------------------------------------------------------------------------------------------------------
Sacramento, CA, Power Authority, Cogeneration
Project Rev., MBIA, 5.875%, 2006(++) 5,500,000 5,824,500
- ---------------------------------------------------------------------------------------------------------------------
Southern California Public Power Authority,
Transmission Project Rev., "A", 0%, 2005 4,205,000 4,180,737
- ---------------------------------------------------------------------------------------------------------------------
Southern California Public Power Authority,
Transmission Project Rev., "A", ETM, 0%, 2005(++) 3,795,000 3,773,369
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Water & Power Authority Rev.,
5.5%, 2017 800,000 824,488
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Water & Power Authority Rev.,
5.3%, 2018 250,000 251,340
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Water & Power Authority Rev.,
"A", 5.125%, 2013 1,000,000 1,015,280
- ---------------------------------------------------------------------------------------------------------------------
$19,700,497
- ---------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility California Department of Water Resources,
Revenue - 7.6% Central Valley Project Rev., "X", FGIC, 5%, 2029 $2,000,000 $2,047,120
- ---------------------------------------------------------------------------------------------------------------------
California Department of Water Resources, Water
Systems Rev., 7%, 2012 1,090,000 1,324,590
- ---------------------------------------------------------------------------------------------------------------------
California Department of Water Resources, Water
Systems Rev., ETM, 7%, 2012(++) 405,000 496,396
- ---------------------------------------------------------------------------------------------------------------------
Castalic Lake Water Agency, California Rev.,
Water Systems Improvement Project, AMBAC,
5.125%, 2030 1,725,000 1,794,035
- ---------------------------------------------------------------------------------------------------------------------
Culver City, CA, Wastewater Facilities Rev,
"A", FGIC, 5.6%, 2019 1,000,000 1,106,130
- ---------------------------------------------------------------------------------------------------------------------
El Monte, CA, Water Authority Rev., Water
Systems Project, AMBAC, 6%, 2019 1,065,000 1,193,631
- ---------------------------------------------------------------------------------------------------------------------
Fairfield-Suisun, CA, Sewer District Rev., "A",
MBIA, 0%, 2006 2,080,000 2,022,966
- ---------------------------------------------------------------------------------------------------------------------
Livermore Amador Valley Water Management Rev.,
"A", AMBAC, 5%, 2031 4,875,000 4,951,196
- ---------------------------------------------------------------------------------------------------------------------
Los Angeles County, CA, Public Works Rev.,
Multiple Capital Facilities Project, "A",
AMBAC, 5.5%, 2010(++) 2,970,000 3,290,344
- ---------------------------------------------------------------------------------------------------------------------
Mojave, CA, Water Agency, Improvement District
(M Morongo Basin), FGIC,
5.75%, 2015 2,625,000 2,787,068
- ---------------------------------------------------------------------------------------------------------------------
Southern California Metropolitan Water District
Rev., RITES, 8.577%, 2018+(+) 5,000,000 6,511,100
- ---------------------------------------------------------------------------------------------------------------------
West Sacramento, CA, Financing Authority Rev.,
Water Systems Improvement Project, FGIC, 5%, 2032 2,750,000 2,807,338
- ---------------------------------------------------------------------------------------------------------------------
$30,331,914
- ---------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $368,158,139) $388,915,590
- ---------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.7%
- ---------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, California Toll Bridge
Rev., "A", 2.22%, due 4/07/05 $800,000 $800,000
- ---------------------------------------------------------------------------------------------------------------------
California Health Facilities Financing
Authority Rev. (Adventist Hospital), "B",
2.28%, due 4/01/05 100,000 100,000
- ---------------------------------------------------------------------------------------------------------------------
Irvine, CA, Improvement Building Act 1915,
2.28%, due 4/06/05 1,050,000 1,050,000
- ---------------------------------------------------------------------------------------------------------------------
San Francisco, CA, City & County Financial
Corp., Lease Rev. (Moscone Center Expansion),
2.28%, due 4/07/05 900,000 900,000
- ---------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost, $2,850,000) $2,850,000
- ---------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $371,008,139) $391,765,590
- ---------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.5% 5,869,298
- ---------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $397,634,888
- ---------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 MFS(R) FLORIDA 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 - 96.6%
- ---------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- ---------------------------------------------------------------------------------------------------------------------
Airport & Port Florida Capital Projects Finance Authority Rev.
Revenue - 5.1% (AAAE Airports Project), "I", MBIA, 5%, 2020 $500,000 $521,335
- ---------------------------------------------------------------------------------------------------------------------
Greater Orlando Aviation Authority Rev., "A",
FGIC, 5.25%, 2018 1,000,000 1,046,500
- ---------------------------------------------------------------------------------------------------------------------
Hillsborough County, FL, Aviation Authority Rev.
(Tampa International Airport), "A", FGIC,
5.875%, 2015 750,000 793,590
- ---------------------------------------------------------------------------------------------------------------------
Lee County, FL, Airport Rev., "A", FSA,
5.875%, 2018 1,000,000 1,097,550
- ---------------------------------------------------------------------------------------------------------------------
Miami-Dade County, FL, Aviation Rev., "C", MBIA,
5.25%, 2018 500,000 522,190
- ---------------------------------------------------------------------------------------------------------------------
Pensacola, FL, Airport Rev., "B", MBIA,
5.625%, 2014 500,000 528,985
- ---------------------------------------------------------------------------------------------------------------------
$4,510,150
- ---------------------------------------------------------------------------------------------------------------------
Chemicals - 0.2% Red River Authority, TX, Pollution Control Rev.
(Celanese Project), 6.7%, 2030 $200,000 $207,436
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - General Commonwealth of Puerto Rico, RITES, MBIA,
Purpose - 7.0% 8.612%, 2019+(+) $1,000,000 $1,217,140
- ---------------------------------------------------------------------------------------------------------------------
Maimi-Dade County, FL, Educational Facilities
Authority, "A", AMBAC, 5.5%, 2018 1,400,000 1,520,162
- ---------------------------------------------------------------------------------------------------------------------
State of Florida, RITES, 7.054%, 2017+(+) 3,000,000 3,356,640
- ---------------------------------------------------------------------------------------------------------------------
$6,093,942
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - Florida Board of Education, Capital Outlay,
Schools - 9.2% 9.125%, 2014 $2,600,000 $3,361,020
- ---------------------------------------------------------------------------------------------------------------------
Florida Board of Education, Capital Outlay, ETM,
9.125%, 2014(++) 400,000 531,344
- ---------------------------------------------------------------------------------------------------------------------
Florida Board of Education, Public Education
Capital Outlay, "A", 5.25%, 2024 1,000,000 1,054,640
- ---------------------------------------------------------------------------------------------------------------------
Florida State Board of Education, Public
Education, "J", 5%, 2032 1,000,000 1,033,330
- ---------------------------------------------------------------------------------------------------------------------
Osceola County, FL, School Board Certificate,
"A", AMBAC, 5.25%, 2027 1,950,000 2,067,917
- ---------------------------------------------------------------------------------------------------------------------
$8,048,251
- ---------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Citrus County, FL, Hospital Development
Hospitals - 15.0% Authority Rev. (Citrus Memorial Hospital),
6.25%, 2023 $495,000 $519,691
- ---------------------------------------------------------------------------------------------------------------------
Denver, CO, Health & Hospital Authority Rev.,
"A", 6%, 2023 250,000 256,307
- ---------------------------------------------------------------------------------------------------------------------
Highlands County, FL, Health Facilities
Authority Rev. (Adventist Health Systems),
5.25%, 2013 500,000 523,240
- ---------------------------------------------------------------------------------------------------------------------
Hillsborough County, FL, Industrial Development
Rev. (University Community Hospital), MBIA,
6.5%, 2019 1,000,000 1,225,360
- ---------------------------------------------------------------------------------------------------------------------
Indiana Health Facilities Financing Authority,
Hospital Rev. (Munster Medical Research
Foundation, Inc.), 6.375%, 2031 500,000 520,195
- ---------------------------------------------------------------------------------------------------------------------
Jacksonville, FL, Health Facilities, Ascension
Health, "A", 5.25%, 2032 1,000,000 1,031,380
- ---------------------------------------------------------------------------------------------------------------------
Lakeland, FL, Hospital Systems Rev. (Lakeland
Regional Health Systems), 5.5%, 2032 1,000,000 1,045,970
- ---------------------------------------------------------------------------------------------------------------------
Leesburg, FL, Hospital Rev. (Leesburg Regional
Medical Center), 5.5%, 2032 750,000 768,360
- ---------------------------------------------------------------------------------------------------------------------
Marion County, FL, Hospital District Rev.,
Refunding & Improvement, Health Systems (Monroe
Regional Health System), 5.5%, 2014 500,000 529,435
- ---------------------------------------------------------------------------------------------------------------------
Marshall County, AL, Health Care Rev., "A",
6.25%, 2022 500,000 533,895
- ---------------------------------------------------------------------------------------------------------------------
Martin County, FL, Health Facilities Rev.
(Martin Memorial Medical Center), "B", 5.75%, 2022 500,000 510,165
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Medstar Health), 5.5%, 2033 200,000 207,088
- ---------------------------------------------------------------------------------------------------------------------
Miami Beach, FL, Health Facilities Rev. (Mount
Sinai Medical Center), "A",
6.7%, 2019 250,000 270,577
- ---------------------------------------------------------------------------------------------------------------------
Miami, FL, Health Facilities Authority Rev.
(Catholic Health East), "B", 5.25%, 2028 650,000 660,764
- ---------------------------------------------------------------------------------------------------------------------
New Hampshire Health & Educational Facilities
Authority Rev. (Exeter Hospital),
6%, 2024 500,000 539,980
- ---------------------------------------------------------------------------------------------------------------------
Orange County, FL, Health Facilities Authority
Hospital Rev. (Orlando Regional Healthcare),
5.75%, 2032 1,000,000 1,064,800
- ---------------------------------------------------------------------------------------------------------------------
Rhode Island Health & Education Building Rev.,
Hospital Financing (Lifespan Obligated Group),
6.5%, 2032 500,000 550,850
- ---------------------------------------------------------------------------------------------------------------------
South Dakota Health & Education Facilities
Authority Rev. (Prairie Lakes Health Care
System), 5.625%, 2032 500,000 508,515
- ---------------------------------------------------------------------------------------------------------------------
Tallahassee, FL, Health Facilities Rev.
(Tallahassee Memorial Healthcare), 6.25%, 2020 300,000 309,168
- ---------------------------------------------------------------------------------------------------------------------
Tallahassee, FL, Health Facilities Rev.
(Tallahassee Memorial Regional Medical Center),
MBIA, 6.625%, 2013 1,000,000 1,026,880
- ---------------------------------------------------------------------------------------------------------------------
Wisconsin Health & Educational Facilities
(Aurora Health Care, Inc.), "A", 5.6%, 2029 500,000 506,105
- ---------------------------------------------------------------------------------------------------------------------
$13,108,725
- ---------------------------------------------------------------------------------------------------------------------
Human Services - 0.3% Orange County, FL, Health Facilities Authority
Rev. (GF Project), 8.875%, 2021 $300,000 $303,804
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Brazos River, TX, Brazoria County Environmental
Chemicals - 0.9% Rev. (Dow Chemical, Co.), "A", 6.625%, 2033 $500,000 $557,005
- ---------------------------------------------------------------------------------------------------------------------
Sweetwater County, WY, Solid Waste Disposal Rev.
(FMC Corp.), "A", 7%, 2024 200,000 202,306
- ---------------------------------------------------------------------------------------------------------------------
$759,311
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Nevada Department of Business (Republic
Environmental Services - 0.4% Services, Inc.), 5.625%, 2026 $300,000 $318,789
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Hernando County, FL, Water & Sewer Rev., MBIA,
Other - 1.4% 5%, 2029 $500,000 $518,180
- ---------------------------------------------------------------------------------------------------------------------
Park Creek Metropolitan District, CO, Rev.,
Custodial Receipts, "CR", 7.875%, 2032## 160,000 163,971
- ---------------------------------------------------------------------------------------------------------------------
Tooele County, UT, Hazardous Waste Treatment
Rev. (Union Pacific Corp.), 5.7%, 2026 500,000 518,840
- ---------------------------------------------------------------------------------------------------------------------
$1,200,991
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Delta County, MI, Economic Development Corp.,
Paper - 0.6% Environmental Improvements Rev. (Mead Westvaco
Escanaba), 6.25%, 2027 $500,000 $559,555
- ---------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Palm Beach County, FL, Industrial Development
Entertainment & Rev. (South Florida Fair Project), MBIA,
Tourism - 1.2% 5.5%, 2020 $1,000,000 $1,075,950
- ---------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Collier County, FL, Housing Finance Authority
Revenue - 2.8% Rev. (Goodlette Arms Housing Project), "A",
FNMA, 4.9%, 2032 $500,000 $533,005
- ---------------------------------------------------------------------------------------------------------------------
Florida Housing Finance Corp., Housing Rev.
(Augustine Club Apartments), "D", MBIA, 5.5%, 2020 500,000 522,755
- ---------------------------------------------------------------------------------------------------------------------
Florida Housing Finance Corp., Housing Rev.
(Crossing At University Apartments), AMBAC,
5.1%, 2018 1,180,000 1,200,202
- ---------------------------------------------------------------------------------------------------------------------
Palm Beach County, FL, Housing Finance Rev.
(Westlake Apartments Project), Phase II, FSA,
4.3%, 2012 155,000 157,111
- ---------------------------------------------------------------------------------------------------------------------
$2,413,073
- ---------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax Escambia County, FL, Sales Tax Rev., AMBAC, 5%,
Revenue - 4.2% 2022 $1,160,000 $1,218,916
- ---------------------------------------------------------------------------------------------------------------------
Pasco County, FL, Sales Tax Rev., Half Central,
AMBAC, 5%, 2023 1,000,000 1,047,880
- ---------------------------------------------------------------------------------------------------------------------
Taylor County, FL, Sales Tax Rev., FGIC, 5.5%, 2020 500,000 541,495
- ---------------------------------------------------------------------------------------------------------------------
Volusia County, FL, Tourist Development Tax
Rev., FSA, 5%, 2034 815,000 842,710
- ---------------------------------------------------------------------------------------------------------------------
$3,651,001
- ---------------------------------------------------------------------------------------------------------------------
Single Family Housing - Brevard County, FL, Housing Finance Authority,
Local - 3.3% "B", GNMA, 6.5%, 2022 $59,000 $59,185
- ---------------------------------------------------------------------------------------------------------------------
Lee County, FL, Housing Finance Authority Rev.,
"A", GNMA, 7%, 2031 180,000 182,945
- ---------------------------------------------------------------------------------------------------------------------
Lee County, FL, Housing Finance Authority,
Multi-County Program, "A", GNMA,
7.2%, 2033 60,000 60,243
- ---------------------------------------------------------------------------------------------------------------------
Manatee County, FL, Housing Finance Mortgage
Rev., Single Family, Subordinated, "3", GNMA,
5.3%, 2028 130,000 133,596
- ---------------------------------------------------------------------------------------------------------------------
Miami-Dade County, FL, Housing Finance Authority
Rev. (Home Ownership Mortgage), "A", GNMA,
5.2%, 2031 555,000 568,203
- ---------------------------------------------------------------------------------------------------------------------
Palm Beach County, FL, Single Family Rev., "B",
GNMA, 5.5%, 2022 375,000 376,155
- ---------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Housing Finance Authority
Rev., Multi-County Program, "A", GNMA, 5.45%, 2034 890,000 945,233
- ---------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Housing Finance Authority
Rev., Multi-County Program, "B", GNMA, 7.25%, 2029 140,000 141,823
- ---------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Housing Finance Authority
Rev., Multi-County Program, "B", GNMA, 6.2%, 2031 380,000 391,062
- ---------------------------------------------------------------------------------------------------------------------
$2,858,445
- ---------------------------------------------------------------------------------------------------------------------
Single Family Housing - Florida Housing Finance Corp. Rev., Homeowner
State - 2.0% Mortgage, "4", FSA, 5.85%, 2031 $685,000 $693,761
- ---------------------------------------------------------------------------------------------------------------------
Florida Housing Finance Corp. Rev., Homeowner
Mortgage, "5", 5%, 2034 990,000 1,029,442
- ---------------------------------------------------------------------------------------------------------------------
$1,723,203
- ---------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 0.2% Delaware County, PA, Industrial Development
Authority Rev., Resource Recovery Facilities
(American Ref-Fuel Co.), "A", 6.2%, 2019 $200,000 $207,022
- ---------------------------------------------------------------------------------------------------------------------
State & Local Agencies - 5.9% Florida Municipal Loan Council Rev., "A", MBIA,
5.625%, 2020 $1,000,000 $1,092,420
- ---------------------------------------------------------------------------------------------------------------------
Florida Municipal Loan Council Rev., "B", MBIA,
5.625%, 2019 1,000,000 1,098,020
- ---------------------------------------------------------------------------------------------------------------------
Florida Municipal Loan Council Rev., "C", MBIA,
5.25%, 2022 1,000,000 1,086,300
- ---------------------------------------------------------------------------------------------------------------------
Palm Beach County, FL, School Board, "A", AMBAC,
5.5%, 2011(++) 750,000 840,397
- ---------------------------------------------------------------------------------------------------------------------
St. Augustine, FL, Capital Improvement Rev,
AMBAC, 5%, 2029 1,000,000 1,037,480
- ---------------------------------------------------------------------------------------------------------------------
$5,154,617
- ---------------------------------------------------------------------------------------------------------------------
Tax - Other - 2.0% Orange County, FL, Tourist Development Tax Rev.,
Subordinated, AMBAC, 5.25%, 2027 $1,500,000 $1,584,300
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev.,
"A", 5.25%, 2024 130,000 136,234
- ---------------------------------------------------------------------------------------------------------------------
$1,720,534
- ---------------------------------------------------------------------------------------------------------------------
Tax Assessment - 3.0% Arbor Greene, FL, Community Development
District, 5.75%, 2006 $56,000 $56,409
- ---------------------------------------------------------------------------------------------------------------------
Concorde Estates Community Development District,
Florida Capital Improvement Rev., "B", 5%, 2011 350,000 348,551
- ---------------------------------------------------------------------------------------------------------------------
Fishawk Community Development District II, "B",
5%, 2007 110,000 110,665
- ---------------------------------------------------------------------------------------------------------------------
Greyhawk Landing Community Development, Florida
Special Assessment Rev., "B", 6.25%, 2009 115,000 117,102
- ---------------------------------------------------------------------------------------------------------------------
Heritage Harbour South Community, Development
District Florida Rev., Capital Improvement, "B",
5.4%, 2008 340,000 339,765
- ---------------------------------------------------------------------------------------------------------------------
Heritage Isles, FL, Community Development
District, "A", 5.75%, 2005 210,000 210,004
- ---------------------------------------------------------------------------------------------------------------------
Killarney, FL, Community Development District,
"B", 5.125%, 2009 250,000 250,375
- ---------------------------------------------------------------------------------------------------------------------
Lakes By The Bay South Community Development
District, Florida Special Assessment, "B",
5.3%, 2009 200,000 200,582
- ---------------------------------------------------------------------------------------------------------------------
Middle Village Community Development District,
Florida Special Assessment, "B", 5%, 2009 200,000 199,748
- ---------------------------------------------------------------------------------------------------------------------
Middle Village, FL, Community Development
District Rev., "A", 5.8%, 2022 100,000 101,549
- ---------------------------------------------------------------------------------------------------------------------
Old Palm Community Development District, Special
Assessment (Palm Beach Gardens), "B", 5.375%, 2014 200,000 200,274
- ---------------------------------------------------------------------------------------------------------------------
Panther Trace, FL, Community Development
District Rev., 5.4%, 2008 100,000 100,156
- ---------------------------------------------------------------------------------------------------------------------
Panther Trace, FL, Community Development
District Rev., "B", 6.5%, 2009 35,000 35,560
- ---------------------------------------------------------------------------------------------------------------------
Panther Trace, FL, Community Development
District Rev., "B", 5%, 2010 100,000 100,060
- ---------------------------------------------------------------------------------------------------------------------
Parkway Center, FL, Community Development
District Rev., "B", 5.625%, 2014 100,000 100,629
- ---------------------------------------------------------------------------------------------------------------------
Renaissance Community Development of Florida,
"B", 6.25%, 2008 115,000 117,891
- ---------------------------------------------------------------------------------------------------------------------
$2,589,320
- ---------------------------------------------------------------------------------------------------------------------
Tobacco - 0.5% Iowa Tobacco Settlement Authority, Tobacco
Settlement Rev., Asset Backed, "B", 5.3%, 2025 $250,000 $232,117
- ---------------------------------------------------------------------------------------------------------------------
Louisiana Tobacco Settlement Financing Corp.,
Asset Backed, "B", 5.875%, 2039 250,000 246,945
- ---------------------------------------------------------------------------------------------------------------------
$479,062
- ---------------------------------------------------------------------------------------------------------------------
Toll Roads - 5.0% Florida Turnpike Authority Rev., Department of
Transportation, "A", 5.75%, 2018 $2,000,000 $2,217,080
- ---------------------------------------------------------------------------------------------------------------------
Lee County, FL, Transportation Facilities Rev.,
"A", AMBAC, 5%, 2027 1,000,000 1,041,400
- ---------------------------------------------------------------------------------------------------------------------
Miami-Dade County, FL, Expressway Authority,
FGIC, 6%, 2010(++) 1,000,000 1,135,220
- ---------------------------------------------------------------------------------------------------------------------
$4,393,700
- ---------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico, Highway &
Tax - 4.3% Transportation, ROLS, Railroad II R 227 1, MBIA,
8.633%, 2020+(+) $2,500,000 $3,262,400
- ---------------------------------------------------------------------------------------------------------------------
St. Johns County, FL, Rev. Transportation
Improvement, AMBAC, 5%, 2027 500,000 518,905
- ---------------------------------------------------------------------------------------------------------------------
$3,781,305
- ---------------------------------------------------------------------------------------------------------------------
Universities - Florida Board Regents, Housing Rev. (University
Dormitories - 3.4% of Central Florida), FGIC, 5.25%, 2020 $1,185,000 $1,283,936
- ---------------------------------------------------------------------------------------------------------------------
Florida Board Regents, Housing Rev., MBIA,
5.3%, 2020 610,000 660,484
- ---------------------------------------------------------------------------------------------------------------------
Florida Finance Authority, Capital Loan
Projects, "F", MBIA, 5.125%, 2021 1,000,000 1,014,400
- ---------------------------------------------------------------------------------------------------------------------
$2,958,820
- ---------------------------------------------------------------------------------------------------------------------
Utilities - Investor Brazos River Authority, TX, Pollution Control
Owned - 0.8% Rev. (TXU Energy Co.), "B", 6.3%, 2032 $120,000 $127,463
- ---------------------------------------------------------------------------------------------------------------------
Brazos River Authority, TX, Pollution Control
Rev. (TXU Energy Co.), "C", 6.75%, 2038 215,000 232,178
- ---------------------------------------------------------------------------------------------------------------------
Pennsylvania Economic Development Financing
Authority Rev. (Reliant Energy Seward), "A",
6.75%, 2036 150,000 159,965
- ---------------------------------------------------------------------------------------------------------------------
Port Morrow, OR, Pollution Control Rev.
(Portland General Electric), 5.2%, 2033 200,000 209,812
- ---------------------------------------------------------------------------------------------------------------------
$729,418
- ---------------------------------------------------------------------------------------------------------------------
Utilities - Municipal Palm Coast, FL, Utility Systems Rev., MBIA,
Owned - 3.0% 5%, 2024 $250,000 $260,890
- ---------------------------------------------------------------------------------------------------------------------
Port St. Lucie, FL, Utility Rev., Capital
Appreciation, "A", FGIC, 0%, 2006(++) 1,405,000 554,624
- ---------------------------------------------------------------------------------------------------------------------
Port St. Lucie, FL, Utility Rev., MBIA, 5%, 2022 1,000,000 1,050,340
- ---------------------------------------------------------------------------------------------------------------------
St. Lucie West, FL, Utility Rev., MBIA,
5.25%, 2034 720,000 767,232
- ---------------------------------------------------------------------------------------------------------------------
$2,633,086
- ---------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Revenue - Bay County, FL, Water Systems Rev., AMBAC,
14.9% 5.625%, 2019 $1,000,000 $1,100,660
- ---------------------------------------------------------------------------------------------------------------------
Florida Community Services Corp., AMBAC,
5.5%, 2018 1,125,000 1,226,182
- ---------------------------------------------------------------------------------------------------------------------
Indian Trace Development District, Florida
Special Assessment (Water Management Special
Benefit), MBIA, 5%, 2026 700,000 720,454
- ---------------------------------------------------------------------------------------------------------------------
Lee County, FL, Industrial Development Authority
(Bonita Springs Utilities Project), MBIA,
6.05%, 2015 1,000,000 1,053,640
- ---------------------------------------------------------------------------------------------------------------------
Miami Beach, FL, Stormwater Rev., FGIC,
5.25%, 2020 1,000,000 1,068,740
- ---------------------------------------------------------------------------------------------------------------------
Miami-Dade County, FL, Stormwater Utility Rev.,
MBIA, 5%, 2028 1,000,000 1,040,680
- ---------------------------------------------------------------------------------------------------------------------
Orlando, FL, Utilities Commission, Water &
Electric Rev. "C", 5%, 2027 1,000,000 1,033,410
- ---------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Sewer Rev., FSA, 5%, 2032 1,500,000 1,547,085
- ---------------------------------------------------------------------------------------------------------------------
Polk County, FL, Utility Systems Rev., "A",
FGIC, 5%, 2030 1,000,000 1,035,140
- ---------------------------------------------------------------------------------------------------------------------
Polk County, FL, Utility Systems Rev., FGIC,
5%, 2023 1,000,000 1,047,170
- ---------------------------------------------------------------------------------------------------------------------
Seminole County, FL, Water & Sewer Rev., MBIA,
6%, 2019 940,000 1,093,145
- ---------------------------------------------------------------------------------------------------------------------
Tohopekaliga Water Authority, Florida Utility
System Rev., "A", FSA, 5%, 2024 1,000,000 1,043,560
- ---------------------------------------------------------------------------------------------------------------------
$13,009,866
- ---------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $79,894,379) $84,489,376
- ---------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.5%
- ---------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Health Facilities Authority
Rev., Pooled Hospital Loan Program, 2.3%, due 4/
01/05, at Identified Cost $1,350,000 $1,350,000
- ---------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $81,244,379) $85,839,376
- ---------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.9% 1,624,699
- ---------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $87,464,075
- ---------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 MFS(R) GEORGIA 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 - 96.6%
- ---------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- ---------------------------------------------------------------------------------------------------------------------
Airport & Port Atlanta, GA, Airport Passenger Facilities Rev.,
Revenue - 5.2% "J", FSA, 5%, 2029 $750,000 $771,502
- ---------------------------------------------------------------------------------------------------------------------
Atlanta, GA, Airport Passenger Facilities Rev.,
"J", 5%, 2034 1,250,000 1,278,950
- ---------------------------------------------------------------------------------------------------------------------
Atlanta, GA, Airport Rev., "B", FSA, 5.25%, 2033 1,000,000 1,050,710
- ---------------------------------------------------------------------------------------------------------------------
Augusta, GA, Airport Rev., "B", 5.35%, 2028 350,000 350,497
- ---------------------------------------------------------------------------------------------------------------------
$3,451,659
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - General Columbia County, GA (Courthouse Detention
Purpose - 4.1% Center), 5.625%, 2020 $1,490,000 $1,611,822
- ---------------------------------------------------------------------------------------------------------------------
Macon Bibb County, GA, Urban Development Rev.
(Bibb County Public Facilities Project),
5.5%, 2022 1,000,000 1,083,680
- ---------------------------------------------------------------------------------------------------------------------
$2,695,502
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - Puerto Rico Municipal Finance Agency, RITES,
Improvement - 2.1% FSA, 9.137%, 2016+(+) $500,000 $614,020
- ---------------------------------------------------------------------------------------------------------------------
Suwanee, GA, MBIA, 5.25%, 2032 750,000 786,780
- ---------------------------------------------------------------------------------------------------------------------
$1,400,800
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - Fayette County, GA, School District Rev., 0% to
Schools - 7.1% 2010, 4.90% to 2024 $575,000 $435,344
- ---------------------------------------------------------------------------------------------------------------------
Forsyth County, GA, School District, 6%, 2010(++) 750,000 851,280
- ---------------------------------------------------------------------------------------------------------------------
Fulton County, GA, School District, 6.375%, 2010 2,000,000 2,272,020
- ---------------------------------------------------------------------------------------------------------------------
Wilkes County, GA, School District, 5%, 2024 1,115,000 1,166,803
- ---------------------------------------------------------------------------------------------------------------------
$4,725,447
- ---------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Athens Clarke County, GA (United Catholic Health
Hospitals - 8.6% East Issue), 5.5%, 2032 $500,000 $517,875
- ---------------------------------------------------------------------------------------------------------------------
Chatham County, GA, Hospital Authority Rev.
(Memorial Health Medical Center), "A", 6%, 2017 350,000 379,515
- ---------------------------------------------------------------------------------------------------------------------
Chatham County, GA, Hospital Authority Rev.,
Hospital Improvement (Memorial Health
University), "A", 5.375%, 2026 200,000 206,816
- ---------------------------------------------------------------------------------------------------------------------
Cobb County, GA, Hospital Authority Revolving,
Refunding & Improvement Rev., Anticipation
Certificates, AMBAC, 5.25%, 2023 750,000 811,620
- ---------------------------------------------------------------------------------------------------------------------
Coffee County, GA, Hospital Authority Rev.
(Coffee Regional Medical Center, Inc.), 5%, 2026 350,000 347,368
- ---------------------------------------------------------------------------------------------------------------------
Gainsville & Hall County, GA, Hospital Authority
Rev. (Northeast Georgia Health System, Inc.),
5.5%, 2031 500,000 514,055
- ---------------------------------------------------------------------------------------------------------------------
Royston, GA, Hospital Authority Rev. (Ty Cobb
Healthcare System, Inc.), 6.125%, 2009 330,000 331,766
- ---------------------------------------------------------------------------------------------------------------------
Tift County, GA, Hospital Authority Rev.,
Anticipation Certificates, AMBAC, 5%, 2022 2,000,000 2,086,960
- ---------------------------------------------------------------------------------------------------------------------
Valdosta & Lowdes County, GA, Hospital Authority
Rev. (Southern Georgia Medical Center Project),
AMBAC, 5.25%, 2027 500,000 527,660
- ---------------------------------------------------------------------------------------------------------------------
$5,723,635
- ---------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Term Fulton County, GA, Residential Care Facilities
Care - 2.0% (Canterbury Court), "A", 6.125%, 2034 $150,000 $149,107
- ---------------------------------------------------------------------------------------------------------------------
Richmond County, GA, Development Authority,
Nursing Home Rev. (Beverly Enterprises Georgia,
Inc.), 8.75%, 2011 1,190,000 1,194,617
- ---------------------------------------------------------------------------------------------------------------------
$1,343,724
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Savannah, GA, Economic Development Authority,
Environmental Services - 0.8% Solid Waste Disposal Rev. (Georgia Waste
Management Project), "A", 5.5%, 2016 $500,000 $519,570
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Cartersville, GA, Development Authority Waste
Other - 1.8% (Anheuser Busch Project), 5.95%, 2032 $750,000 $797,820
- ---------------------------------------------------------------------------------------------------------------------
De Kalb County, GA, Development Authority
(General Motors Corp.), 6%, 2021 250,000 252,495
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority,
Refinery Facilities Rev. (Hovensa Refinery),
5.875%, 2022 160,000 169,600
- ---------------------------------------------------------------------------------------------------------------------
$1,219,915
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Effingham County, GA, Development Authority,
Paper - 2.4% Solid Waste Disposal Rev. (Fort James),
5.625%, 2018 $150,000 $153,192
- ---------------------------------------------------------------------------------------------------------------------
Savannah, GA, Economic Development Authority
Rev. (Stone Container Corp.), 7.4%, 2026 300,000 300,123
- ---------------------------------------------------------------------------------------------------------------------
Savannah, GA, Economic Development Pollution
(Union Camp Corp.), 6.15%, 2017 1,000,000 1,107,880
- ---------------------------------------------------------------------------------------------------------------------
$1,561,195
- ---------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Clayton County, GA, Housing Authority, Multi-
Revenue - 5.0% Family Housing Rev. (Vineyard Pointe), "A",
GNMA, 5.5%, 2032 $995,000 $1,033,895
- ---------------------------------------------------------------------------------------------------------------------
De Kalb County, GA, Housing Authority Multi-
Family Housing Rev. (Castaways Apartments), "A",
GNMA, 5.4%, 2029 595,000 615,712
- ---------------------------------------------------------------------------------------------------------------------
Hinesville, GA, Leased Housing Corp., "A", FHA,
6.7%, 2017 900,000 902,655
- ---------------------------------------------------------------------------------------------------------------------
Savannah, GA, Housing Authority (Chatham Gardens
Project), FNMA, 5.625%, 2031 745,000 798,826
- ---------------------------------------------------------------------------------------------------------------------
$3,351,088
- ---------------------------------------------------------------------------------------------------------------------
Single Family Housing - Georgia Housing & Finance Authority Rev.,
State - 5.6% 5.5%, 2032 $1,000,000 $1,006,560
- ---------------------------------------------------------------------------------------------------------------------
Georgia Housing & Finance Authority Rev., Single
Family Mortgage, 5.2%, 2020 350,000 350,364
- ---------------------------------------------------------------------------------------------------------------------
Georgia Housing & Finance Authority Rev., Single
Family Mortgage, "A", 5.6%, 2032 740,000 746,971
- ---------------------------------------------------------------------------------------------------------------------
Georgia Housing & Finance Authority Rev., Single
Family Mortgage, "B", 6.05%, 2019 70,000 70,673
- ---------------------------------------------------------------------------------------------------------------------
Georgia Housing & Finance Authority Rev., Single
Family Mortgage, "C", 5.8%, 2021 750,000 770,745
- ---------------------------------------------------------------------------------------------------------------------
Georgia Housing & Finance Authority Rev., Single
Family Mortgage, "C", 5.1%, 2022 750,000 755,617
- ---------------------------------------------------------------------------------------------------------------------
$3,700,930
- ---------------------------------------------------------------------------------------------------------------------
State & Agency - County Commissioners of Georgia Assoc., Leasing
Other - 2.5% Program, Rockdale County, GA (Public Purpose
Project), AMBAC, 5.625%, 2020 $500,000 $545,555
- ---------------------------------------------------------------------------------------------------------------------
Fulton County, GA, Facilities Corp., Fulton
County, GA (Public Purpose Project), AMBAC,
5.9%, 2019 1,000,000 1,127,680
- ---------------------------------------------------------------------------------------------------------------------
$1,673,235
- ---------------------------------------------------------------------------------------------------------------------
State & Local Agencies - 2.8% Clayton County, GA, Development Authority Rev.,
"A", 6.25%, 2020 $500,000 $567,180
- ---------------------------------------------------------------------------------------------------------------------
Dekalb County, GA, Public Safety & Judicial
Facilities Authority Rev., 5%, 2029 400,000 414,232
- ---------------------------------------------------------------------------------------------------------------------
Fayette County, GA, Public Facilities Authority
(Criminal Justice Center Project), 6.25%, 2010(++) 755,000 866,914
- ---------------------------------------------------------------------------------------------------------------------
$1,848,326
- ---------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.6% Virgin Islands Public Finance Authority Rev.,
ASST GTY, 5.5%, 2018 $1,000,000 $1,067,540
- ---------------------------------------------------------------------------------------------------------------------
Tobacco - 0.6% Childrens Trust Fund, Settlement Rev., PR,
5.375%, 2033 $380,000 $381,395
- ---------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico Highway &
Tax - 1.0% Transportation Authority, "Y", 5.5%, 2036 $610,000 $662,741
- ---------------------------------------------------------------------------------------------------------------------
Universities - Colleges - 8.7% Fulton County, GA (Morehouse College), AMBAC,
6.25%, 2021 $980,000 $1,125,736
- ---------------------------------------------------------------------------------------------------------------------
Fulton County, GA, Development Authority Rev.
(Georgia Tech Foundation Funding), "A", 5%, 2031 265,000 271,649
- ---------------------------------------------------------------------------------------------------------------------
Fulton County, GA, Development Authority Rev.
(Georgia Tech Foundation), "A", 5.75%, 2017 1,000,000 1,112,440
- ---------------------------------------------------------------------------------------------------------------------
Private Colleges & University Authority (Emory
University), "A", 5.75%, 2016 1,000,000 1,106,380
- ---------------------------------------------------------------------------------------------------------------------
Private Colleges & University Authority (Emory
University), "A", 5.75%, 2018 1,000,000 1,112,100
- ---------------------------------------------------------------------------------------------------------------------
Private Colleges & University Authority (Mercer
University), 5.75%, 2021 500,000 538,505
- ---------------------------------------------------------------------------------------------------------------------
Savannah, GA, Economic Development Authority
Rev. (College of Art & Design, Inc.), ETM,
6.2%, 2009(++) 500,000 538,550
- ---------------------------------------------------------------------------------------------------------------------
$5,805,360
- ---------------------------------------------------------------------------------------------------------------------
Universities - Georgia Private College & University Authority
Dormitories - 2.4% Rev. (Mercer Housing Corp.), "A", 6%, 2021 $500,000 $518,560
- ---------------------------------------------------------------------------------------------------------------------
Marietta, GA, Development Authority Rev.,
Student Housing (Southern Polytech University),
"A", 6.25%, 2007(++) 1,000,000 1,098,640
- ---------------------------------------------------------------------------------------------------------------------
$1,617,200
- ---------------------------------------------------------------------------------------------------------------------
Utilities - Municipal Burke County, GA, Development Authority
Owned - 6.2% Pollution Control Rev. (Georgia Power Co., Plant
Vogtle), "1", 4.75%, 2034 $500,000 $494,540
- ---------------------------------------------------------------------------------------------------------------------
Georgia Municipal Electric Authority Power Rev.,
"A", MBIA, 6.5%, 2020 1,250,000 1,549,363
- ---------------------------------------------------------------------------------------------------------------------
Griffin, GA, Combined Public Utility Rev.,
Refunding & Improvement, AMBAC, 5%, 2025 500,000 523,520
- ---------------------------------------------------------------------------------------------------------------------
Monroe County, GA, Pollution Control Rev.
(Oglethorpe Power Corp.), "A", 6.8%, 2012 1,000,000 1,183,990
- ---------------------------------------------------------------------------------------------------------------------
Summerville, GA, Public Utility Rev., Refunding
& Improvement, 5.75%, 2026 350,000 374,595
- ---------------------------------------------------------------------------------------------------------------------
$4,126,008
- ---------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Atlanta, GA, Water & Wastewater Rev., "A", MBIA,
Revenue - 26.1% 5%, 2033 $500,000 $513,155
- ---------------------------------------------------------------------------------------------------------------------
Atlanta, GA, Water & Wastewater Rev., RITES,
FGIC, 8.043%, 2016+(+) 4,000,000 5,084,720
- ---------------------------------------------------------------------------------------------------------------------
Augusta, GA, Water & Sewer Rev., FSA, 5.25%, 2034 1,000,000 1,069,360
- ---------------------------------------------------------------------------------------------------------------------
Clayton County, GA, Water Authority, Water &
Sewer Rev., 6.25%, 2010(++) 1,000,000 1,146,190
- ---------------------------------------------------------------------------------------------------------------------
Columbia County, GA, Water & Sewer Rev., FGIC,
6.25%, 2010(++) 470,000 535,692
- ---------------------------------------------------------------------------------------------------------------------
Coweta County, GA, Development Authority Rev.
(Newnan Water Sewer & Light Commission Project),
AMBAC, 5.75%, 2016 1,000,000 1,103,120
- ---------------------------------------------------------------------------------------------------------------------
De Kalb County, GA, Water & Sewer Rev.,
5.125%, 2031 1,200,000 1,246,584
- ---------------------------------------------------------------------------------------------------------------------
Fairburn, GA, Utility Rev., 5.75%, 2020 500,000 544,695
- ---------------------------------------------------------------------------------------------------------------------
Forsyth County, GA, Water & Sewer Authority,
6.25%, 2010(++) 1,105,000 1,261,556
- ---------------------------------------------------------------------------------------------------------------------
Fulton County, GA, Water & Sewer Rev., FGIC,
6.375%, 2014 100,000 115,882
- ---------------------------------------------------------------------------------------------------------------------
Fulton County, GA, Water & Sewer Rev., FGIC,
ETM, 6.375%, 2014(++) 2,150,000 2,491,463
- ---------------------------------------------------------------------------------------------------------------------
Gainesville, GA, Water & Sew Rev., FGIC,
5.625%, 2019 1,000,000 1,094,670
- ---------------------------------------------------------------------------------------------------------------------
Jackson County, GA, Water & Sewer Authority,
"A", AMBAC, 5.75%, 2017 1,000,000 1,121,210
- ---------------------------------------------------------------------------------------------------------------------
$17,328,297
- ---------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $59,687,761) $64,203,567
- ---------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 2.5%
- ---------------------------------------------------------------------------------------------------------------------
Atlanta, GA, Water & Wastewater Rev., "C",
2.28%, due 4/01/05 $600,000 $600,000
- ---------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, California Toll Bridge
Rev., "A", 2.22%, due 4/07/05 1,000,000 1,000,000
- ---------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Health Facilities Authority
Rev., Pooled Hospital Loan Program, 2.3%,
due 4/01/05 100,000 100,000
- ---------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost, $1,700,000) $1,700,000
- ---------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $61,387,761) $65,903,567
- ---------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.9% 565,932
- ---------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $66,469,499
- ---------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 MFS(R) MARYLAND 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 - 97.3%
- ---------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- ---------------------------------------------------------------------------------------------------------------------
Airport and Port Maryland Transportation Authority (Baltimore/
Revenue - 0.7% Washington International Airport), "A", AMBAC,
5%, 2027 $1,000,000 $1,031,870
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - General
Purpose - 5.1% Baltimore, MD, "B", 7.15%, 2009 $2,120,000 $2,458,712
- ---------------------------------------------------------------------------------------------------------------------
Baltimore, MD, UT, Public Improvement, "A",
MBIA, 7%, 2009 1,000,000 1,158,060
- ---------------------------------------------------------------------------------------------------------------------
Frederick County, MD, Public Facilities, 5.25%,
2016 2,000,000 2,149,000
- ---------------------------------------------------------------------------------------------------------------------
Frederick County, MD, Public Facilities, 5.2%,
2019 1,700,000 1,840,063
- ---------------------------------------------------------------------------------------------------------------------
$7,605,835
- ---------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 16.0% Anne Arundel County, MD, 5%, 2009(++) $2,000,000 $2,155,940
- ---------------------------------------------------------------------------------------------------------------------
Howard County, MD, "B", 0%, 2008 1,000,000 897,900
- ---------------------------------------------------------------------------------------------------------------------
Howard County, MD, Consolidated Public
Improvement, "A", 5.5%, 2008(++) 1,000,000 1,078,920
- ---------------------------------------------------------------------------------------------------------------------
Howard County, MD, Consolidated Public
Improvement, "A", 5.5%, 2008(++) 2,000,000 2,157,840
- ---------------------------------------------------------------------------------------------------------------------
Montgomery County, MD, Consolidated Public
Improvement, 5%, 2020 1,000,000 1,061,510
- ---------------------------------------------------------------------------------------------------------------------
Montgomery County, MD, Consolidated Public
Improvement, 5%, 2021 500,000 529,415
- ---------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, 0%, 2007 5,110,000 4,765,688
- ---------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, Consolidated Public
Improvement, "A", 5%, 2023 2,000,000 2,113,260
- ---------------------------------------------------------------------------------------------------------------------
Prince Georges County, MD, Unrefunded Balance,
Public Improvement, FSA, 5.375%, 2015 80,000 86,762
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Municipal Finance Agency, RITES,
FSA, 8.129%, 2019+(+) 1,000,000 1,172,920
- ---------------------------------------------------------------------------------------------------------------------
Washington Suburban Sanitation District,
General Construction Rev., 5%, 2028 980,000 1,017,916
- ---------------------------------------------------------------------------------------------------------------------
Washington Suburban Sanitation District,
General Construction Rev., 5%, 2027 930,000 968,288
- ---------------------------------------------------------------------------------------------------------------------
Washington Suburban Sanitation District,
General Construction Rev., 5%, 2029 1,025,000 1,062,966
- ---------------------------------------------------------------------------------------------------------------------
Washington, MD, Suburban Sanitation District,
General Construction, "A", 5.25%, 2005(++) 865,000 869,178
- ---------------------------------------------------------------------------------------------------------------------
Worcester County, MD, Public Improvement,
5.625%, 2010(++) 1,620,000 1,804,599
- ---------------------------------------------------------------------------------------------------------------------
Worcester County, MD, Public Improvement,
5.625%, 2010(++) 2,030,000 2,261,319
- ---------------------------------------------------------------------------------------------------------------------
$24,004,421
- ---------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Maryland Health & Higher Educational Facilities
Hospitals - 20.2% Authority Rev. (Adventist Healthcare), "A",
5.75%, 2025 $1,000,000 $1,050,320
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Anne Arundel Health Systems),
"A", FSA, 5%, 2023 1,000,000 1,052,060
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Anne Arundel Health Systems),
"A", FSA, 5%, 2034 1,585,000 1,635,783
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Calvert Health Systems),
5.5%, 2039 1,000,000 1,037,300
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Carroll County General
Hospital), 6%, 2037 1,000,000 1,055,670
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Doctors Community Hospital),
5.5%, 2024 1,000,000 999,860
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Frederick Memorial Hospital),
5.125%, 2035 1,000,000 996,110
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Frederick Memorial Hospital),
FGIC, 5.25%, 2013 1,850,000 2,010,839
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Good Samaritan Hospital), ETM,
5.7%, 2009(++) 1,085,000 1,168,599
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Johns Hopkins University),
5%, 2021 750,000 775,065
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Lifebridge Health), "A",
5.125%, 2034 1,000,000 1,017,230
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Medalantic/Helix Issue), "B",
AMBAC, 5.25%, 2038 1,500,000 1,648,980
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Medstar Health), 5.5%, 2033 800,000 $828,352
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Mercy Medical Center), FSA,
5.625%, 2017 1,800,000 1,892,322
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (North Arundel Hospital),
6.5%, 2026 500,000 566,125
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Suburban Hospital), "A", 5.5%,
2016 1,000,000 1,090,630
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Union Hospital of Cecil County
Issue), 5.625%, 2032 1,000,000 1,041,180
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (University of Maryland Medical
Systems), 6.625%, 2020 1,000,000 1,128,990
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (University of Maryland Medical
Systems), "B", AMBAC, 5%, 2024 1,000,000 1,050,190
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Upper Chesapeake Hospital),
"A", FSA, 5.5%, 2020 2,000,000 2,117,360
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Rev. (Helix Health Issue), AMBAC, ETM, 5%, 2027
(++) 2,500,000 2,641,675
- ---------------------------------------------------------------------------------------------------------------------
Maryland Industrial Development Authority,
Economic Development Rev., RIBS, FSA,
10.058%, 2022(+) 1,400,000 1,917,272
- ---------------------------------------------------------------------------------------------------------------------
Maryland State Health & Higer Educational
Facilities Authority Rev. (Catholic Health),
"A", 6%, 2020 245,000 274,221
- ---------------------------------------------------------------------------------------------------------------------
Maryland State Health & Higher Educational
Facilities Authority Rev. (Catholic Health),
ETM, "A", 6%, 2020(++) 755,000 847,140
- ---------------------------------------------------------------------------------------------------------------------
Montgomery County, MD, Economic Development
(Trinity Healthcare Group), 5.125%, 2022 500,000 518,355
- ---------------------------------------------------------------------------------------------------------------------
$30,361,628
- ---------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Term Maryland Health & Higher Educational Facilities
Care - 1.0% Authority Rev. (Bradford Oaks Nursing &
Rehabilitation Center), 6.375%, 2027 $1,000,000 $1,005,470
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Mercy Ridge), "A", 6%, 2035 150,000 153,114
- ---------------------------------------------------------------------------------------------------------------------
Westminster, MD, Economic Development Rev.
(Carroll Lutheran Village), "A", 6.25%, 2034 400,000 410,968
- ---------------------------------------------------------------------------------------------------------------------
$1,569,552
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Baltimore, MD, Port Facilities Rev.,
Chemicals - 1.1% Consolidated Coal Sales, "B", 6.5%, 2011 $1,500,000 $1,607,715
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Northeast Maryland Waste Disposal Authority,
Environmental Services - 0.5% Resources Recovery Rev. (Baltimore Resco
Retrofit Project), 5%, 2012 $690,000 $698,977
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Virgin Islands Public Finance Authority,
Other - 0.3% Refinery Facilities Rev. (Hovensa Refinery),
5.875%, 2022 $375,000 $397,500
- ---------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Maryland Industrial Development Authority,
Entertainment & Economic Development (Baltimore Aquarium
Tourism - 0.7% Project), 5.2%, 2026 $1,000,000 $1,041,860
- ---------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Harford County MD, Economic Development Rev.
Other - 3.1% (Battelle Memorial Institute Project), 5.25%, 2034 $1,600,000 $1,665,088
- ---------------------------------------------------------------------------------------------------------------------
Maryland Industrial Authority, Economic
Development Rev. (YMCA Baltimore), 8%, 2006(++) 2,825,000 3,070,606
- ---------------------------------------------------------------------------------------------------------------------
$4,735,694
- ---------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Baltimore, MD, City Housing Corp. Rev., "A",
Revenue - 4.9% FHA, 7.25%, 2023 $1,065,000 $1,069,249
- ---------------------------------------------------------------------------------------------------------------------
Baltimore, MD, City Housing Corp. Rev., FHA,
7.75%, 2009 505,000 502,642
- ---------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration
(Waters Landing II Apartments), "A", GNMA,
5.875%, 2033 1,500,000 1,576,335
- ---------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration,
"A", 5%, 2034 940,000 934,210
- ---------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration,
"A", 5.1%, 2044 1,000,000 989,870
- ---------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration,
Housing, "D", 5%, 2032 1,000,000 986,740
- ---------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration,
Multi-Family Housing Insured Mortgage, "B",
5.6%, 2032 1,250,000 1,291,325
- ---------------------------------------------------------------------------------------------------------------------
$7,350,371
- ---------------------------------------------------------------------------------------------------------------------
Parking - 1.0% Maryland Health & Higher Educational Facilities
Authority Rev. (Johns Hopkins Medical
Institutions), AMBAC, 5%, 2034 $1,500,000 $1,564,155
- ---------------------------------------------------------------------------------------------------------------------
Single Family Housing - Prince George's County, MD, Housing, Single
Local - 0.4% Family Collateral, "A", 7.4%, 2032 $120,000 $120,714
- ---------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, Housing, Single
Family Collateral, "A", GNMA,
5.6%, 2034 170,000 173,922
- ---------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, Housing, Single
Family Step Coupon, "A", GNMA, 5.375%, 2018 300,000 307,005
- ---------------------------------------------------------------------------------------------------------------------
$601,641
- ---------------------------------------------------------------------------------------------------------------------
Single Family Housing - Maryland Community Development Administration,
State - 4.1% Housing, "A", 5.875%, 2016 $1,280,000 $1,325,504
- ---------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration,
Residential, "B", 4.75%, 2019 1,500,000 1,501,890
- ---------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration,
Single Family Program, First Series, 5.15%, 2018 2,000,000 2,028,780
- ---------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration,
Single Family Program, Second Series, 4.5%, 2024 820,000 829,643
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Authority, Home
Mortgage Rev., Mortgage Backed Securities, "A",
4.75%, 2023 180,000 181,228
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Authority, Mortgage
Backed Securities, "A", 4.375%, 2017 305,000 306,327
- ---------------------------------------------------------------------------------------------------------------------
$6,173,372
- ---------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 0.8% Northeast Maryland Waste Disposal Authority,
Solid Waste Rev., 6%, 2006 $1,100,000 $1,137,191
- ---------------------------------------------------------------------------------------------------------------------
State & Agency -
Other - 5.4% Howard County, MD, COP, 8%, 2019 $680,000 $958,310
- ---------------------------------------------------------------------------------------------------------------------
Howard County, MD, COP, 8%, 2019 805,000 1,134,470
- ---------------------------------------------------------------------------------------------------------------------
Howard County, MD, COP, 8%, 2019 385,000 542,573
- ---------------------------------------------------------------------------------------------------------------------
Howard County, MD, COP, 8.15%, 2021 450,000 647,685
- ---------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, COP, "A", MBIA,
0%, 2005 2,495,000 2,481,302
- ---------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, COP, "A", MBIA,
0%, 2006 2,490,000 2,407,930
- ---------------------------------------------------------------------------------------------------------------------
$8,172,270
- ---------------------------------------------------------------------------------------------------------------------
State & Local Agencies - 4.2% Maryland Stadium Authority, Lease Rev.
(Convention Center Expansion), AMBAC, 5.875%, 2012 $1,000,000 $1,025,980
- ---------------------------------------------------------------------------------------------------------------------
Prince George's County, MD, Lease Development
Authority Rev., MBIA, 0%, 2009 1,500,000 1,293,345
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., Commonwealth
Appropriation, "E", 5.7%, 2010(++) 1,235,000 1,370,146
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC,
7.839%, 2010+(+) 500,000 620,180
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC,
7.839%, 2016+(+) 1,520,000 1,927,360
- ---------------------------------------------------------------------------------------------------------------------
$6,237,011
- ---------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.4% Virgin Islands Public Finance Authority Rev.,
"A", 5.5%, 2022 $1,000,000 $1,051,760
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev.,
"E", 5.875%, 2018 1,000,000 1,030,930
- ---------------------------------------------------------------------------------------------------------------------
$2,082,690
- ---------------------------------------------------------------------------------------------------------------------
Tax Assessment - 1.1% Anne Arundel County, MD, Special Obligations
(Arundel Mills Project), 5.125%, 2029 $1,555,000 $1,632,501
- ---------------------------------------------------------------------------------------------------------------------
Tobacco - 0.6% Childrens Trust Fund, Settlement Rev., PR,
5.375%, 2033 $240,000 $240,881
- ---------------------------------------------------------------------------------------------------------------------
Guam Economic Development Authority, Tobacco
Settlement, "B", 5.5%, 2041 400,000 384,916
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Tobacco Settlement Financing
Corp., 5%, 2021 250,000 242,618
- ---------------------------------------------------------------------------------------------------------------------
$868,415
- ---------------------------------------------------------------------------------------------------------------------
Toll Roads - 1.1% Maryland State Transportation Authority,
Project Facilities Rev., FSA, 5%, 2034 $1,540,000 $1,599,937
- ---------------------------------------------------------------------------------------------------------------------
Universities - Colleges - 10.5% Annapolis, MD, Economic Development Rev. (St.
John's College), 5.5%, 2018 $750,000 $780,592
- ---------------------------------------------------------------------------------------------------------------------
Anne Arundel County, MD, Economic Development
(Community College Project), 5.25%, 2028 1,600,000 1,683,600
- ---------------------------------------------------------------------------------------------------------------------
Frederick County, MD, Educational Facilities
Rev. (Mount St. Mary's College), "A", 5.7%, 2020 850,000 886,677
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Goucher College), 5.375%, 2025 500,000 529,635
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Johns Hopkins University),
5.625%, 2027 1,400,000 1,466,696
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Johns Hopkins University), "A",
5%, 2032 2,000,000 2,061,060
- ---------------------------------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities
Authority Rev. (Loyola College), "A", MBIA,
5.5%, 2016 3,000,000 3,172,140
- ---------------------------------------------------------------------------------------------------------------------
Morgan State University, MD, Academic, "A",
MBIA, ETM, 0%, 2006(++) 1,135,000 1,097,239
- ---------------------------------------------------------------------------------------------------------------------
Morgan State University, MD, Academic, "A",
MBIA, ETM, 0%, 2008(++) 1,400,000 1,263,206
- ---------------------------------------------------------------------------------------------------------------------
Morgan State University, MD, Academic, MBIA,
6.05%, 2015 1,500,000 1,720,365
- ---------------------------------------------------------------------------------------------------------------------
Westminster, MD, Educational Facilities Rev.
(McDaniel College), 5.5%, 2032 1,000,000 1,035,960
- ---------------------------------------------------------------------------------------------------------------------
$15,697,170
- ---------------------------------------------------------------------------------------------------------------------
Universities - Maryland Economic Development Corp. (Morgan
Dormitories - 3.3% State University Project), "A", 6%, 2034 $1,000,000 $1,029,900
- ---------------------------------------------------------------------------------------------------------------------
Maryland Economic Development Corp. (University
of Maryland College Park Project), AMBAC, 5%, 2019 1,850,000 1,944,887
- ---------------------------------------------------------------------------------------------------------------------
Maryland Economic Development Corp., Collegiate
Housing (Salisbury), "A", 6%, 2019 1,000,000 1,043,200
- ---------------------------------------------------------------------------------------------------------------------
Maryland Economic Development Corp., Collegiate
Housing Rev. (Towson University), "A", 5.75%, 2029 1,000,000 1,003,510
- ---------------------------------------------------------------------------------------------------------------------
$5,021,497
- ---------------------------------------------------------------------------------------------------------------------
Utilities - Municipal Guam Power Authority Rev., RITES, AMBAC,
Owned - 4.0% 7.577%, 2015+(+) $1,680,000 $1,936,670
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev.,
"NN", 5.125%, 2024 1,500,000 1,563,840
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev.,
"RR", XLCA, 5%, 2030 850,000 883,091
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev.,
RITES, FSA, 7.559%, 2015+(+) 1,400,000 1,570,450
- ---------------------------------------------------------------------------------------------------------------------
$5,954,051
- ---------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Revenue - Baltimore, MD, Project Rev. (Wastwater
5.8% Projects), "A", FGIC, 5%, 2033 $1,095,000 $1,133,796
- ---------------------------------------------------------------------------------------------------------------------
Baltimore, MD, Project Revenue., Refunding
Water Projects, "A", FGIC, 5.125%, 2032 1,000,000 1,045,090
- ---------------------------------------------------------------------------------------------------------------------
Baltimore, MD, Rev., LEVRRS, MBIA, 8.77%, 2020(+) 3,000,000 3,941,640
- ---------------------------------------------------------------------------------------------------------------------
Baltimore, MD, Wastewater Rev. Project, "A",
MBIA, 5.65%, 2020 2,000,000 2,313,880
- ---------------------------------------------------------------------------------------------------------------------
Puerto Rico Aqueduct & Sewer Authority Rev.,
ETM, 10.25%, 2009(++) 290,000 340,274
- ---------------------------------------------------------------------------------------------------------------------
$8,774,680
- ---------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $135,924,080) $145,922,004
- ---------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 4.3%
- ---------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, California Toll Bridge
Rev., "A", 2.22%, due 4/07/05 $2,200,000 $2,200,000
- ---------------------------------------------------------------------------------------------------------------------
Bell County, TX, Health Facilities Development
Corp. Rev. (Scott & White Memorial Hospital),
2.3%, due 4/01/05 1,300,000 1,300,000
- ---------------------------------------------------------------------------------------------------------------------
Harris County, TX, Health Facilities
Development Corp., Special Facilities Rev.
(Texas Medical Center), MBIA, 2.3%, due 4/01/05 100,000 100,000
- ---------------------------------------------------------------------------------------------------------------------
Irvine, CA, Improvement Building Act 1915,
2.28%, due 4/06/05 1,000,000 1,000,000
- ---------------------------------------------------------------------------------------------------------------------
New York City, NY, "A-4", 2.28%, due 4/01/05 1,300,000 1,300,000
- ---------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer
Finance Authority Rev., 2.28%, due 4/01/05 300,000 300,000
- ---------------------------------------------------------------------------------------------------------------------
San Francisco, CA, City & County Financial
Corp., Lease Rev. (Moscone Center Expansion),
2.28%, due 4/07/05 200,000 200,000
- ---------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost, $6,400,000) $6,400,000
- ---------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $142,324,080) $152,322,004
- ---------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (1.6)% (2,345,704
- ---------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $149,976,300
- ---------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 MFS(R) MASSACHUSETTS 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 - 96.3%
- ---------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- ---------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 3.3% Massachusetts Port Authority Rev., 6.125%, 2017 $1,460,000 $1,627,477
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Port Authority Rev., "A", FSA,
5.125%, 2017 1,275,000 1,357,556
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Port Authority Rev., "A", MBIA,
5%, 2033 3,000,000 3,058,620
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Port Authority Rev., "C", 6%, 2015 1,000,000 1,111,160
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Port Authority Rev., ETM,
13%, 2013(++) 705,000 1,001,572
- ---------------------------------------------------------------------------------------------------------------------
$8,156,385
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - General
Purpose - 14.1% Boston, MA, "A", 5.75%, 2010(++) $3,645,000 $4,043,362
- ---------------------------------------------------------------------------------------------------------------------
Brookline, MA, 5.375%, 2019 1,800,000 1,966,662
- ---------------------------------------------------------------------------------------------------------------------
Commonwealth of Massachusetts, 5.875%, 2009(++) 1,000,000 1,111,660
- ---------------------------------------------------------------------------------------------------------------------
Commonwealth of Massachusetts, "B", 5.25%, 2028 2,500,000 2,745,950
- ---------------------------------------------------------------------------------------------------------------------
Commonwealth of Massachusetts, FGIC, ETM,
7%, 2009(++) 1,150,000 1,282,238
- ---------------------------------------------------------------------------------------------------------------------
Greater Lawrence, MA, San District, MBIA,
5.625%, 2020 1,640,000 1,800,589
- ---------------------------------------------------------------------------------------------------------------------
Lynn, MA, AMBAC, 5.125%, 2018 3,690,000 3,916,898
- ---------------------------------------------------------------------------------------------------------------------
Mansfield, MA, FSA, 5.375%, 2017 1,170,000 1,272,246
- ---------------------------------------------------------------------------------------------------------------------
Middleborough, MA, FGIC, 5.6%, 2014 75,000 82,297
- ---------------------------------------------------------------------------------------------------------------------
Salisbury, MA, MBIA, MBIA, 5.25%, 2031 2,790,000 2,976,372
- ---------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Capital Appreciation
Consolidated Loan, "C", ETM, 0%, 2005(++) 2,000,000 1,966,040
- ---------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Consolidated Loan, "A",
6%, 2010(++) 3,000,000 3,365,280
- ---------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Consolidated Loan, "B",
5.75%, 2010(++) 1,000,000 1,113,730
- ---------------------------------------------------------------------------------------------------------------------
State of Massachusetts, Consolidated Loan, "C",
5.75%, 2010(++) 1,500,000 1,668,000
- ---------------------------------------------------------------------------------------------------------------------
Sutton, MA, MBIA, 5.5%, 2017 1,000,000 1,092,510
- ---------------------------------------------------------------------------------------------------------------------
Sutton, MA, MBIA, 5.5%, 2019 1,000,000 1,088,690
- ---------------------------------------------------------------------------------------------------------------------
Westford, MA, FGIC, 5.25%, 2020 2,250,000 2,422,013
- ---------------------------------------------------------------------------------------------------------------------
Weymouth, MA, MBIA, 5.375%, 2020 1,250,000 1,344,663
- ---------------------------------------------------------------------------------------------------------------------
$35,259,200
- ---------------------------------------------------------------------------------------------------------------------
General Obligations - Massachusetts Bay Transportation Authority,
Improvement - 5.6% RITES, 9.380%, 2016+(+) $4,835,000 $6,425,038
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Bay Transportation Authority,
Unrefunded Balance "A", 5.75%, 2018 320,000 353,043
- ---------------------------------------------------------------------------------------------------------------------
Maynard, MA, MBIA, 5.5%, 2021 1,000,000 1,103,870
- ---------------------------------------------------------------------------------------------------------------------
Springfield, MA, FSA, 6.25%, 2019 2,600,000 2,934,204
- ---------------------------------------------------------------------------------------------------------------------
Worcester, MA, "A", FSA, 6%, 2016 2,955,000 3,318,229
- ---------------------------------------------------------------------------------------------------------------------
$14,134,384
- ---------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 4.6% Belmont, MA, 5%, 2015 $2,165,000 $2,214,882
- ---------------------------------------------------------------------------------------------------------------------
Dudley-Charlton, MA, Regional School District,
RITES, FGIC, 7.566%, 2015+(+) 1,365,000 1,659,294
- ---------------------------------------------------------------------------------------------------------------------
Dudley-Charlton, MA, Regional School District,
RITES, FGIC, 7.566%, 2016+(+) 1,430,000 1,749,062
- ---------------------------------------------------------------------------------------------------------------------
Dudley-Charlton, MA, Regional School District,
RITES, FGIC, 7.566%, 2018+(+) 1,565,000 1,928,299
- ---------------------------------------------------------------------------------------------------------------------
Narragansett, MA, Regional School District,
AMBAC, 6%, 2019 1,720,000 1,930,322
- ---------------------------------------------------------------------------------------------------------------------
Tantasquama, MA, Regional School District, FSA,
5.375%, 2016 2,000,000 2,186,060
- ---------------------------------------------------------------------------------------------------------------------
$11,667,919
- ---------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Massachusetts Development Finance Agency,
Hospitals - 9.9% Massachusetts Biomedical Research, "C",
6.375%, 2016 $50,000 $55,662
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Baystate Medical Center), "F",
5.75%, 2033 2,000,000 2,096,180
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Berkshire Health Systems),
6.25%, 2031 1,350,000 1,429,245
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Caritas Christi), 6.5%, 2012 500,000 548,535
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Caritas Christi), "B", 6.25%, 2022 20,000 21,185
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Covenant Health Systems, Inc.),
6.5%, 2017 75,000 82,714
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Covenant Health Systems, Inc.),
6%, 2031 1,000,000 1,048,480
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Jordan Hospital), 5.25%, 2018 1,330,000 1,241,143
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Milford Whitinsville Hospital),
6.35%, 2032 50,000 52,587
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Milford-Whitinsville Regional
Hospital), "C", 5.25%, 2018 1,500,000 1,456,605
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Milton Hospital), "C", 5.5%, 2016 800,000 807,912
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (New England Medical Center
Hospital), "H", FGIC, 5.375%, 2018 1,000,000 1,084,970
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (New England Medical Center
Hospital), "H", FGIC, 5.375%, 2019 815,000 885,832
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Newton Wellesley Hospital),
"G", MBIA, 6.125%, 2015 1,000,000 1,081,050
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (North Adams Regional Hospital),
6.625%, 2018 475,000 483,284
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Partners Healthcare Systems),
5.75%, 2021 100,000 109,022
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Partners Healthcare Systems),
"A", MBIA, 5.375%, 2018 2,000,000 2,106,900
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (South Shore Hospital), "F",
5.625%, 2019 2,000,000 2,076,460
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (University of Massachusetts
Memorial Hospital), 6.5%, 2021 1,000,000 1,086,140
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Revenue (New England Medical Center
Hospital), "H", FGIC, 5%, 2025 1,135,000 1,172,648
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Higher Educational
Facilities Authority Rev., Catholic Health East
Issue, 5.5%, 2032 1,575,000 1,626,266
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.,
Capital Appreciation (Mass Biomedical
Research), "A", 0%, 2010 5,300,000 4,272,595
- ---------------------------------------------------------------------------------------------------------------------
$24,825,415
- ---------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Term Boston, MA, Industrial Development Finance
Care - 1.0% Authority, Alzheimers Center Project, FHA,
5.5%, 2012 $240,000 $253,202
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.,
First Mortgage Loomis Communities Project, "A",
6.9%, 2032 530,000 564,185
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.
(Beverly Enterprises), 8.375%, 2009 1,725,000 1,726,604
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.
(Evanswood 1st Mortgage), "A", 7.625%, 2014* 496,655 0
- ---------------------------------------------------------------------------------------------------------------------
$2,543,991
- ---------------------------------------------------------------------------------------------------------------------
Human Services - 0.4% Massachusetts Health & Educational Facilities
Authority Rev. (Learning Center for Deaf
Children), 6.1%, 2019 $1,000,000 $1,009,780
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Massachusetts Port Authority Rev. (Delta Air
Airlines - 2.1% Lines, Inc.), "A", AMBAC, 5.5%, 2019 $2,000,000 $2,087,820
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Port Authority Rev. (U.S.
Airways), MBIA, 5.875%, 2016 1,900,000 2,000,966
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Port Authority Rev., Special
Facilities (U.S. Airways), "A", MBIA, 5.625%, 2011 1,140,000 1,192,520
- ---------------------------------------------------------------------------------------------------------------------
$5,281,306
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Massachusetts Development Finance Agency Rev.
Environmental Services - 0.8% (Waste Management, Inc.), 5.5%, 2027 $750,000 $781,853
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.,
Resource Recovery Rev. (Waste Management,
Inc.), 6.9%, 2029 1,000,000 1,114,110
- ---------------------------------------------------------------------------------------------------------------------
$1,895,963
- ---------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Massachusetts Development Finance Agency Rev.,
Other - 1.8% Resource Recovery Rev. (Flour Corp.),
5.625%, 2019 $1,675,000 $1,755,048
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.
(Welch Foods, Inc.), 5.6%, 2017 2,100,000 2,257,815
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority,
Refinery Facilities Rev. (Hovensa Refinery),
5.875%, 2022 595,000 630,700
- ---------------------------------------------------------------------------------------------------------------------
$4,643,563
- ---------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Martha's Vineyard, MA, Land Bank Rev., AMBAC,
Other - 1.6% 5%, 2029 $785,000 $812,169
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.,
(WHGH Educational Foundation), "A", AMBAC,
5.375%, 2042 3,000,000 3,161,910
- ---------------------------------------------------------------------------------------------------------------------
$3,974,079
- ---------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Massachusetts Development Finance Agency
Revenue - 4.0% (Morville House Apartments), "A" LOC, 4.95%, 2023 $2,500,000 $2,474,575
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Credit Housing-Chelsea Homes), "I-A", 5%, 2024 1,185,000 1,171,739
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency Rev., "F",
5.125%, 2034 720,000 722,196
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency Rev., "P",
5%, 2023 1,240,000 1,235,449
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency Rev., "P",
5.1%, 2033 1,565,000 1,562,543
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency Rev., "P",
5.2%, 2045 1,445,000 1,404,453
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency, Housing
Rev., Rental Mortgage, "A", AMBAC, 5.7%, 2020 1,515,000 1,546,012
- ---------------------------------------------------------------------------------------------------------------------
$10,116,967
- ---------------------------------------------------------------------------------------------------------------------
Parking - 0.5% Rail Connections, Inc., Massachusetts Rev. (Rte
128 Parking Garage), "A", 6%, 2009(++) $450,000 $507,609
- ---------------------------------------------------------------------------------------------------------------------
Rail Connections, Inc., Massachusetts Rev. (Rte
128 Parking Garage), "A", 6%, 2009(++) 500,000 564,010
- ---------------------------------------------------------------------------------------------------------------------
Rail Connections, Inc., Massachusetts Rev. (Rte
128 Parking Garage), "A", 6%, 2009(++) 250,000 282,005
- ---------------------------------------------------------------------------------------------------------------------
$1,353,624
- ---------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax Route 3 North Transportation Improvement
Revenue - 0.7% Associates, MBIA, 5.625%, 2010(++) $1,500,000 $1,666,665
- ---------------------------------------------------------------------------------------------------------------------
Single Family Housing - Massachusetts Housing Finance Agency, Single
State - 1.5% Family Housing Rev., "102",
5%, 2029 $1,500,000 $1,493,655
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency, Single
Family Housing Rev., "51", MBIA, 6.35%, 2022 440,000 450,916
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency, Single
Family Housing Rev., "79", FSA, 5.85%, 2021 210,000 216,439
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency, Single
Family Housing Rev., "91", 5.5%, 2031 1,265,000 1,273,197
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Housing Finance Agency, Single
Family Housing Rev., "93", 5.05%, 2020 265,000 266,797
- ---------------------------------------------------------------------------------------------------------------------
$3,701,004
- ---------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 1.5% Massachusetts Development Finance Agency Rev.
(Ogden Haverhill Associates), 6.7%, 2014 $600,000 $636,756
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.,
Semass Systems, "B", MBIA, 5.625%, 2016 1,125,000 1,234,305
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.,
Resource Recovery Rev. (Ogden Haverhill
Associates), 5.5%, 2013 $25,000 $25,226
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.,
Resource Recovery Rev. (Ogden Haverhill
Associates), 5.6%, 2019 1,925,000 1,934,105
- ---------------------------------------------------------------------------------------------------------------------
$3,830,392
- ---------------------------------------------------------------------------------------------------------------------
State & Agency - Massachusetts Development Finance Agency Rev.,
Other - 0.6% Visual & Performing Arts Project, 6%, 2015 $1,235,000 $1,431,921
- ---------------------------------------------------------------------------------------------------------------------
State & Local Agencies - 2.5% Puerto Rico Public Finance Corp., RITES, AMBAC,
7.839%, 2016+(+) $2,500,000 $3,170,000
- ---------------------------------------------------------------------------------------------------------------------
Univeristy of Massachusetts, Building Authority
Project, "B", AMBAC, 5.5%, 2018 1,400,000 1,523,592
- ---------------------------------------------------------------------------------------------------------------------
University of Massachusetts, Building Authority
Project, "1", AMBAC, 5.25%, 2023 1,500,000 1,607,895
- ---------------------------------------------------------------------------------------------------------------------
$6,301,487
- ---------------------------------------------------------------------------------------------------------------------
Student Loan Revenue - 1.1% Massachusetts Educational Financing Authority,
Education Loan Rev., "E", AMBAC, 5%, 2013 $895,000 $929,135
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Educational Financing Authority,
Education Loan Rev., "E", AMBAC, 5%, 2015 90,000 93,379
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Educational Financing Authority,
Education Loan Rev., "Issue E", AMBAC, 5.3%,
2016 1,490,000 1,544,981
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Educational Financing Authority,
Education Loan Rev., "Isuue G, "A", MBIA,
6.05%, 2017 70,000 72,831
- ---------------------------------------------------------------------------------------------------------------------
$2,640,326
- ---------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.8% Virgin Islands Public Finance Authority Rev.,
"A", 5.5%, 2022 $2,950,000 $3,102,692
- ---------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev.,
"E", 5.875%, 2018 1,420,000 1,463,921
- ---------------------------------------------------------------------------------------------------------------------
$4,566,613
- ---------------------------------------------------------------------------------------------------------------------
Tax Assessment - 7.7% Massachusetts Bay Transportation Authority
Assessment, "A", 5.75%, 2010(++) $3,460,000 $3,857,519
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Bay Transportation Authority
Assessment, "A", 5.25%, 2010(++) 2,315,000 2,504,483
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Bay Transportation Authority
Assessment, "A", 5.25%, 2030 615,000 665,338
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Bay Transportation Authority,
"A", 5%, 2034 3,500,000 3,612,140
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Bay Transportation Authority,
Sales Tax Rev., "A", 5%, 2032 2,020,000 2,069,126
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Special Obligations, Dedicated
Tax Rev., FGIC, 5%, 2034 6,500,000 6,680,180
- ---------------------------------------------------------------------------------------------------------------------
$19,388,786
- ---------------------------------------------------------------------------------------------------------------------
Tobacco - 0.3% Childrens Trust Fund, Settlement Rev., PR,
5.375%, 2033 $700,000 $702,569
- ---------------------------------------------------------------------------------------------------------------------
Universities - Colleges - 18.7% Massachusetts College Building Authority
Project Rev., "A", MBIA, 5.625%, 2009(++) $1,650,000 $1,816,749
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts College Building Authority
Project Rev., "A", XLCA, 5.25%, 2023 1,000,000 1,068,400
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Boston University), XLCA, 6%, 2059 1,500,000 1,762,185
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Eastern Nazarene College), 5.625%, 2019 1,000,000 939,770
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Hampshire College), 5.7%, 2034 1,000,000 1,045,450
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Massachusetts College of Pharmacy),
6.625%, 2010(++) 50,000 57,710
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Massachusetts College of Pharmacy), "C",
5.75%, 2033 1,000,000 1,050,330
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Mount Holyoke College), 5.125%, 2021 1,000,000 1,059,250
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Suffolk University), 5.75%, 2019 1,000,000 1,056,750
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Suffolk University), 5.85%, 2029 1,000,000 1,047,540
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Western New England College), 6.125%, 2032 1,115,000 1,148,126
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.,
Higher Education (Smith College), 5.5%, 2010(++) 1,210,000 1,344,770
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.,
Olin College, "B", XLCA, 5.25%, 2033 3,000,000 3,155,370
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Authority
Rev. (University of Massachusetts), "A", FGIC,
5.625%, 2010(++) 2,170,000 2,396,939
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Boston College), "K", 5.25%, 2023 4,350,000 4,374,447
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Simmons College), "D", AMBAC,
6.05%, 2010(++) 1,745,000 1,994,919
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Simmons College), "F", FGIC,
5%, 2023 500,000 524,310
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (University of Massachusetts
Worcester Campus), "B", FGIC, 5.125%, 2019 1,780,000 1,883,827
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (University of Massachusetts),
"A", FGIC, 5.75%, 2010(++) 2,395,000 2,666,545
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (University of Massachusetts),
"A", FGIC, 5.85%, 2010(++) 1,200,000 1,342,620
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (University of Massachusetts),
"C", MBIA, 5.25%, 2031 3,000,000 3,174,900
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Wellseley College), "H", 5%, 2033 1,000,000 1,027,790
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities
Authority Rev. (Wheelock College), "B", MBIA,
5.5%, 2021 3,275,000 3,558,615
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.
(Brandeis University), "C", MBIA, 0%, 2009 1,000,000 850,880
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.
(Brandeis University), "C", MBIA, 0%, 2010 1,000,000 809,830
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.
(Brandeis University), "C", MBIA, 0%, 2011 500,000 385,460
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.
(Lesley College), "A", CNIE LEE,
6.3%, 2025 $2,000,000 $2,058,160
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts State College Building Authority
Project Rev., "A", XLCA, 5%, 2043 2,110,000 2,156,314
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts State Health & Educational
Facilities Authority Rev. (Williams College),
"H", 5%, 2028 1,000,000 1,034,040
- ---------------------------------------------------------------------------------------------------------------------
$46,791,996
- ---------------------------------------------------------------------------------------------------------------------
Universities - Secondary Massachusetts Development Finance Agency Rev.
Schools - 4.3% (Deerfield Academy), "A", 5%, 2028 $1,000,000 $1,033,240
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Williston Northampton School), 6.5%, 2028 1,300,000 1,388,777
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Xaverian Brothers High School), 5.55%, 2019 1,000,000 1,055,450
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Xaverian Brothers High School), 5.65%, 2029 1,000,000 1,038,010
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.,
Middlesex School Education Project, 5.125%, 2023 500,000 529,185
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.
(Belmont Hill School), 5.625%, 2020 1,150,000 1,222,347
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.
(Concord Academy), 5.5%, 2027 2,000,000 2,064,520
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.
(Dana Hall School), 5.9%, 2007(++) 1,340,000 1,450,671
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev.
(Tabor Academy), 5.4%, 2018 1,000,000 1,049,530
- ---------------------------------------------------------------------------------------------------------------------
$10,831,730
- ---------------------------------------------------------------------------------------------------------------------
Utilities - Municipal Massachusetts Development Finance Agency Rev.
Owned - 0.3% (Devens Electric Systems),
5.625%, 2016 $725,000 $774,539
- ---------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Massachusetts State Water Pollution Abatement
Revenue - 5.6% Trust, (Pool Program Bonds), "10", 5%, 2029 $1,000,000 $1,036,890
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts State Water Pollution Abatement
Trust, MWRA Program, "A",
5%, 2032 1,510,000 1,551,812
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts State Water Resources Authority,
"B", MBIA, 5%, 2035 1,000,000 1,034,380
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Water Pollution Abatement Trust
(Pool Program Bonds), "10",
5%, 2034 1,000,000 1,033,050
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Water Pollution Abatement Trust,
Series "5", 5.75%, 2009(++) 975,000 1,083,488
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Water Pollution Abatement Trust,
Unrefunded Balance, Series "5", 5.75%, 2017 25,000 27,505
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority, "A",
FGIC, 6%, 2010(++) 1,000,000 1,129,220
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority,
General, "J", FSA, 5%, 2023 500,000 523,035
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority, RITES,
FGIC, 9.916%, 2019+(+) 4,010,000 5,663,724
- ---------------------------------------------------------------------------------------------------------------------
Springfield, MA, Street & Sewer Commission,
General, "A", AMBAC, 5%, 2021 1,000,000 1,057,240
- ---------------------------------------------------------------------------------------------------------------------
$14,140,344
- ---------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $225,218,787) $241,630,948
- ---------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 2.8%
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Health & Higher Educational
Facilities Authority Rev., Capital Assets
Program, "D", 2.24%, due 4/01/05 $6,500,000 $6,500,000
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority, 2.23%,
due 4/06/05 200,000 200,000
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority Rev.,
2.23%, due 4/06/05 195,000 195,000
- ---------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes (Identified Cost, $6,895,000) $6,895,000
- ---------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $232,113,787) $248,525,948
- ---------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.9% 2,342,838
- ---------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $250,868,786
- ---------------------------------------------------------------------------------------------------------------------
Portfolio Footnotes:
* Non-income producing security - in default.
(+) Inverse floating rate security.
(++) Refunded bond.
+ Restricted security.
## SEC Rule 144A restriction.
The following abbreviations are used in the Portfolio of Investments and are
defined:
ETM -- Escrowed-to-maturity
COP -- Certificate of Participation
Insurers: Inverse Floaters:
AMBAC -- AMBAC Indemnity Corp. LEVRRS -- Leveraged Reverse Rate Securities
ASST GTY -- Asset Guaranty Insurance Co. RIBS -- Residual Interest Bonds
CHFC -- California Health Facilities Construction Program RITES -- Residual Interest Tax-Exempt Securities
CNIE LEE -- Connie Lee ROLS -- Residual Option Longs
FGIC -- Financial Guaranty Insurance Co.
FHA -- Federal Housing Administration
FNMA -- Federal National Mortgage Assn.
FSA -- Financial Security Assurance, Inc.
GNMA -- Government National Mortgage Assn.
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Corp.
XLCA -- XL Capital Insurance Co.
SEE NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENTS 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 3/31/05 FUND FUND FUND FUND
ASSETS
Investments -
Identified cost $85,478,388 $129,093,564 $371,008,139 $81,244,379
- ---------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation
(depreciation) 5,788,340 9,321,048 20,757,451 4,594,997
- ---------------------------------------------------------------------------------------------------------------------------
Total investments, at value $91,266,728 $138,414,612 $391,765,590 $85,839,376
- ---------------------------------------------------------------------------------------------------------------------------
Cash 29,894 34,783 10,690 57,024
- ---------------------------------------------------------------------------------------------------------------------------
Receivable for investments sold 673,757 6,870 3,512,023 190,199
- ---------------------------------------------------------------------------------------------------------------------------
Receivable for fund shares sold 62,791 44,676 130,348 72,151
- ---------------------------------------------------------------------------------------------------------------------------
Interest receivable 1,330,352 1,911,278 4,816,838 1,540,905
- ---------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on
interest rate swaps 80,896 148,424 88,225 107,019
- ---------------------------------------------------------------------------------------------------------------------------
Other assets 553 -- 1,779 679
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $93,444,971 $140,560,643 $400,325,493 $87,807,353
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable $137,599 $199,586 $697,551 $173,272
- ---------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 518,635 1,805,412 1,000,000 --
- ---------------------------------------------------------------------------------------------------------------------------
Payable for fund shares
reacquired 75,879 101,184 707,620 87,588
- ---------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on
interest rate swaps 4,658 15,924 98,583 4,658
- ---------------------------------------------------------------------------------------------------------------------------
Payable to affiliates -
Management fee 758 1,133 3,262 719
- ---------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 11,643 21,631 38,588 11,608
- ---------------------------------------------------------------------------------------------------------------------------
Distribution and service fee 942 3,866 22,078 953
- ---------------------------------------------------------------------------------------------------------------------------
Administrative fee 41 50 148 32
- ---------------------------------------------------------------------------------------------------------------------------
Accrued expenses and other
liabilities 77,272 77,379 122,775 64,448
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities $827,427 $2,226,165 $2,690,605 $343,278
- ---------------------------------------------------------------------------------------------------------------------------
Net assets $92,617,544 $138,334,478 $397,634,888 $87,464,075
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital $86,963,870 $129,840,266 $377,110,729 $83,930,513
- ---------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on
investments 5,864,578 9,453,548 20,747,093 4,697,359
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net
realized gain (loss) on
investments (45,909) (986,264) 492,646 (1,065,778)
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income (164,995) 26,928 (715,580) (98,019)
- ---------------------------------------------------------------------------------------------------------------------------
Net assets $92,617,544 $138,334,478 $397,634,888 $87,464,075
- ---------------------------------------------------------------------------------------------------------------------------
Statements of Assets and Liabilities - continued
ALABAMA ARKANSAS CALIFORNIA FLORIDA
FUND FUND FUND FUND
Shares of beneficial interest outstanding
Class A 7,294,371 12,500,592 50,215,656 6,843,870
- ---------------------------------------------------------------------------------------------------------------------------
Class B 1,423,066 1,106,332 11,750,779 1,821,054
- ---------------------------------------------------------------------------------------------------------------------------
Class C -- -- 5,619,565 --
- ---------------------------------------------------------------------------------------------------------------------------
Total shares of beneficial
interest outstanding 8,717,437 13,606,924 67,586,000 8,664,924
- ---------------------------------------------------------------------------------------------------------------------------
Net assets
Class A $77,499,361 $127,075,167 $295,331,566 $69,082,330
- ---------------------------------------------------------------------------------------------------------------------------
Class B 15,118,183 11,259,311 69,141,815 18,381,745
- ---------------------------------------------------------------------------------------------------------------------------
Class C -- -- 33,161,507 --
- ---------------------------------------------------------------------------------------------------------------------------
Total net assets $92,617,544 $138,334,478 $397,634,888 $87,464,075
- ---------------------------------------------------------------------------------------------------------------------------
Class A shares
Net asset value per share
(net assets/shares of beneficial
interest outstanding) $10.62 $10.17 $5.88 $10.09
- ---------------------------------------------------------------------------------------------------------------------------
Offering price per share
(100/95.25 of net asset value per
share) $11.15 $10.68 $6.17 $10.59
- ---------------------------------------------------------------------------------------------------------------------------
Class B shares
Net asset value and offering
price per share
(net assets/shares of beneficial
interest outstanding) $10.62 $10.18 $5.88 $10.09
- ---------------------------------------------------------------------------------------------------------------------------
Class C shares
Net asset value and offering
price per share
(net assets/shares of beneficial
interest outstanding) $-- $-- $5.90 $--
- ---------------------------------------------------------------------------------------------------------------------------
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
Statements of Assets and Liabilities - continued
GEORGIA MARYLAND MASSACHUSETTS
At 3/31/05 FUND FUND FUND
ASSETS
Investments -
Identified cost $61,387,761 $142,324,080 $232,113,787
- ----------------------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) 4,515,806 9,997,924 16,412,161
- ----------------------------------------------------------------------------------------------------------------
Total investments, at value $65,903,567 $152,322,004 $248,525,948
- ----------------------------------------------------------------------------------------------------------------
Cash 41,290 7,637 45,919
- ----------------------------------------------------------------------------------------------------------------
Receivable for investments sold -- -- 5,000
- ----------------------------------------------------------------------------------------------------------------
Receivable for fund shares sold 21,623 25,381 117,450
- ----------------------------------------------------------------------------------------------------------------
Interest receivable 1,146,397 1,954,116 3,764,356
- ----------------------------------------------------------------------------------------------------------------
Unrealized appreciation on interest rate swaps 70,383 42,060 199,588
- ----------------------------------------------------------------------------------------------------------------
Other assets 472 974 1,672
- ----------------------------------------------------------------------------------------------------------------
Total assets $67,183,732 $154,352,172 $252,659,933
- ----------------------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable $83,613 $248,329 $451,484
- ----------------------------------------------------------------------------------------------------------------
Payable for investments purchased 490,000 3,924,225 1,032,430
- ----------------------------------------------------------------------------------------------------------------
Payable for fund shares reacquired 53,296 86,165 115,877
- ----------------------------------------------------------------------------------------------------------------
Unrealized depreciation on interest rate swaps 5,308 12,945 73,582
- ----------------------------------------------------------------------------------------------------------------
Payable to affiliates -
Management fee 544 1,230 2,056
- ----------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 10,493 14,625 21,503
- ----------------------------------------------------------------------------------------------------------------
Distribution and service fee 727 1,892 3,123
- ----------------------------------------------------------------------------------------------------------------
Administrative fee 23 56 93
- ----------------------------------------------------------------------------------------------------------------
Accrued expenses and other liabilities 70,229 86,405 90,999
- ----------------------------------------------------------------------------------------------------------------
Total liabilities $714,233 $4,375,872 $1,791,147
- ----------------------------------------------------------------------------------------------------------------
Net assets $66,469,499 $149,976,300 $250,868,786
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital $62,244,767 $140,568,715 $235,163,407
- ----------------------------------------------------------------------------------------------------------------
Unrealized appreciation on investments 4,580,881 10,027,039 16,538,167
- ----------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (173,142) (287,812) (318,252)
- ----------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net
investment income (183,007) (331,642) (514,536)
- ----------------------------------------------------------------------------------------------------------------
Net assets $66,469,499 $149,976,300 $250,868,786
- ----------------------------------------------------------------------------------------------------------------
Statements of Assets and Liabilities - continued
GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND
Shares of beneficial interest outstanding
Class A 4,840,122 10,810,865 18,574,432
- ----------------------------------------------------------------------------------------------------------------
Class B 1,207,294 2,238,535 3,598,262
- ----------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest
outstanding 6,047,416 13,049,400 22,172,694
- ----------------------------------------------------------------------------------------------------------------
Net assets
Class A $53,189,501 $124,260,632 $210,102,898
- ----------------------------------------------------------------------------------------------------------------
Class B 13,279,998 25,715,668 40,765,888
- ----------------------------------------------------------------------------------------------------------------
Total net assets $66,469,499 $149,976,300 $250,868,786
- ----------------------------------------------------------------------------------------------------------------
Class A shares
Net asset value per share
(net assets/shares of beneficial interest
outstanding) $10.99 $11.49 $11.31
- ----------------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25 of net
asset value per share) $11.54 $12.06 $11.87
- ----------------------------------------------------------------------------------------------------------------
Class B shares
Net asset value and offering price per share
(net assets/shares of beneficial interest
outstanding) $11.00 $11.49 $11.33
- ----------------------------------------------------------------------------------------------------------------
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 STATEMENTS 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 3/31/05
NET INVESTMENT INCOME
Interest $5,021,991 $7,198,215 $22,709,308 $4,728,440
- -----------------------------------------------------------------------------------------------------------------------------
Expenses -
Management fee $521,011 $775,862 $2,265,431 $494,950
- -----------------------------------------------------------------------------------------------------------------------------
Trustees" compensation 4,369 6,417 12,681 5,857
- -----------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 113,606 162,354 473,326 106,298
- -----------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class A) 195,922 129,508 301,754 --
- -----------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class B) 163,522 98,531 634,733 152,286
- -----------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class C) -- -- 341,679 --
- -----------------------------------------------------------------------------------------------------------------------------
Administrative fee 7,508 11,243 32,691 7,186
- -----------------------------------------------------------------------------------------------------------------------------
Custodian fee 37,070 53,103 142,251 33,592
- -----------------------------------------------------------------------------------------------------------------------------
Printing 7,375 11,564 36,507 8,476
- -----------------------------------------------------------------------------------------------------------------------------
Postage 3,707 2,954 18,273 1,755
- -----------------------------------------------------------------------------------------------------------------------------
Auditing fees 46,804 44,763 47,014 45,297
- -----------------------------------------------------------------------------------------------------------------------------
Legal fees 5,948 5,234 20,388 2,431
- -----------------------------------------------------------------------------------------------------------------------------
Miscellaneous 52,637 53,340 76,273 36,561
- -----------------------------------------------------------------------------------------------------------------------------
Total expenses $1,159,479 $1,354,873 $4,403,001 $894,689
- -----------------------------------------------------------------------------------------------------------------------------
Fees paid indirectly (2,447) (3,493) (9,208) (3,297)
- -----------------------------------------------------------------------------------------------------------------------------
Reduction of expenses by investment
adviser (237,366) (353,261) (1,031,477) (225,523)
- -----------------------------------------------------------------------------------------------------------------------------
Net expenses $919,666 $998,119 $3,362,316 $665,869
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income $4,102,325 $6,200,096 $19,346,992 $4,062,571
- -----------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) (identified cost basis) -
Investment transactions $637,046 $808,733 $3,172,621 $989,592
- -----------------------------------------------------------------------------------------------------------------------------
Swap transactions (317,176) (831,018) (476,964) (448,208)
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments $319,870 $(22,285) $2,695,657 $541,384
- -----------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments $(2,793,720) $(4,180,546) $(11,319,849) $(2,728,107)
- -----------------------------------------------------------------------------------------------------------------------------
Swap transactions 475,294 611,024 869,313 596,133
- -----------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on
investments $(2,318,426) $(3,569,522) $(10,450,536) $(2,131,974)
- -----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments $(1,998,556) $(3,591,807) $(7,754,879) $(1,590,590)
- -----------------------------------------------------------------------------------------------------------------------------
Change in net assets from
operations $2,103,769 $2,608,289 $11,592,113 $2,471,981
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statements of Operations - continued
GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND
For year ending 3/31/05
NET INVESTMENT INCOME
Interest $3,570,536 $8,462,589 $13,657,506
- -------------------------------------------------------------------------------------------------------------------
Expenses -
Management fee $376,168 $868,154 $1,412,732
- -------------------------------------------------------------------------------------------------------------------
Trustees" compensation 4,304 7,134 12,302
- -------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 82,910 180,788 212,133
- -------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class A) 133,279 449,994 749,983
- -------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class B) 150,768 290,651 425,537
- -------------------------------------------------------------------------------------------------------------------
Administrative fee 5,425 12,519 20,378
- -------------------------------------------------------------------------------------------------------------------
Custodian fee 29,033 57,319 90,218
- -------------------------------------------------------------------------------------------------------------------
Printing 5,423 19,207 24,921
- -------------------------------------------------------------------------------------------------------------------
Postage 1,775 4,945 4,049
- -------------------------------------------------------------------------------------------------------------------
Auditing fees 46,872 46,824 44,295
- -------------------------------------------------------------------------------------------------------------------
Legal fees 6,079 7,605 6,845
- -------------------------------------------------------------------------------------------------------------------
Miscellaneous 42,448 43,035 82,384
- -------------------------------------------------------------------------------------------------------------------
Total expenses $884,484 $1,988,175 $3,085,777
- -------------------------------------------------------------------------------------------------------------------
Fees paid indirectly (2,166) (3,802) (5,881)
- -------------------------------------------------------------------------------------------------------------------
Reduction of expenses by investment adviser (171,316) (395,857) (643,220)
- -------------------------------------------------------------------------------------------------------------------
Net expenses $711,002 $1,588,516 $2,436,676
- -------------------------------------------------------------------------------------------------------------------
Net investment income $2,859,534 $6,874,073 $11,220,830
- -------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) (identified cost basis)-
Investment transactions $513,151 $1,359,552 $1,156,752
- -------------------------------------------------------------------------------------------------------------------
Swap transactions (375,993) (575,000) (577,012)
- -------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $137,158 $784,552 $579,740
- -------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments $(2,079,639) $(4,804,286) $(6,617,250)
- -------------------------------------------------------------------------------------------------------------------
Swap transactions 424,142 434,191 898,523
- -------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $(1,655,497) $(4,370,095) $(5,718,727)
- -------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments $(1,518,339) $(3,585,543) $(5,138,987)
- -------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $1,341,195 $3,288,530 $6,081,843
- -------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
ALABAMA ARKANSAS CALIFORNIA FLORIDA
FUND FUND FUND FUND
For year ended 3/31/05
CHANGE IN NET ASSETS
OPERATIONS
Net investment income $4,102,325 $6,200,096 $19,346,992 $4,062,571
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 319,870 (22,285) 2,695,657 541,384
- -------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on
investments (2,318,426) (3,569,522) (10,450,536) (2,131,974)
- -------------------------------------------------------------------------------------------------------------------------
Change in net assets from
operations $2,103,769 $2,608,289 $11,592,113 $2,471,981
- -------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
Class A $(3,487,315) $(5,765,824) $(14,446,017) $(3,284,555)
- -------------------------------------------------------------------------------------------------------------------------
Class B (604,659) (425,966) (3,065,257) (773,814)
- -------------------------------------------------------------------------------------------------------------------------
Class C -- -- (1,327,738) --
- -------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (270,143) -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Class B (56,021) -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(4,418,138) $(6,191,790) $(18,839,012) $(4,058,369)
- -------------------------------------------------------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS
Net proceeds from sale of shares $8,259,350 $11,546,464 $27,789,022 $11,762,373
- -------------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued
to shareholders in reinvestment
of distributions 2,840,711 4,099,667 11,063,366 2,029,002
- -------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (14,211,009) (25,615,407) (69,550,092) (26,207,969)
- -------------------------------------------------------------------------------------------------------------------------
Change in net assets from fund
share transactions $(3,110,948) $(9,969,276) $(30,697,704) $(12,416,594)
- -------------------------------------------------------------------------------------------------------------------------
Redemption fees $-- $91 $1,866 $--
- -------------------------------------------------------------------------------------------------------------------------
Total change in net assets $(5,425,317) $(13,552,686) $(37,942,737) $(14,002,982)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period 98,042,861 151,887,164 435,577,625 101,467,057
- -------------------------------------------------------------------------------------------------------------------------
At end of period $92,617,544 $138,334,478 $397,634,888 $87,464,075
- -------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net
assets at end of period $(164,995) $26,928 $(715,580) $(98,019)
- -------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statements of Changes in Net Assets - continued
GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND
For year ended 3/31/05
CHANGE IN NET ASSETS
OPERATIONS
Net investment income $2,859,534 $6,874,073 $11,220,830
- ---------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 137,158 784,552 579,740
- ---------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments (1,655,497) (4,370,095) (5,718,727)
- ---------------------------------------------------------------------------------------------------------------
Change in net assets from operations $1,341,195 $3,288,530 $6,081,843
- ---------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
Class A $(2,302,371) $(5,719,390) $(9,525,974)
- ---------------------------------------------------------------------------------------------------------------
Class B (538,120) (1,103,829) (1,614,570)
- ---------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- (49,124) --
- ---------------------------------------------------------------------------------------------------------------
Class B -- (11,124) --
- ---------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(2,840,491) $(6,883,467) $(11,140,544)
- ---------------------------------------------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS
Net proceeds from sale of shares $4,007,035 $7,869,461 $15,147,404
- ---------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to
shareholders in reinvestment
of distributions 1,956,777 4,346,146 5,925,507
- ---------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (10,413,486) (28,541,821) (36,322,806)
- ---------------------------------------------------------------------------------------------------------------
Change in net assets from fund share
transactions $(4,449,674) $(16,326,214) $(15,249,895)
- ---------------------------------------------------------------------------------------------------------------
Redemption fees $61 $-- $926
- ---------------------------------------------------------------------------------------------------------------
Total change in net assets $(5,948,909) $(19,921,151) $(20,307,670)
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period 72,418,408 169,897,451 271,176,456
- ---------------------------------------------------------------------------------------------------------------
At end of period $66,469,499 $149,976,300 $250,868,786
- ---------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net
investment income included in
net assets at end of period $(183,007) $(331,642) $(514,536)
- ---------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENTS 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
CHANGE IN NET ASSETS
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)
- -------------------------------------------------------------------------------------------------------------------------
Change 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)
- -------------------------------------------------------------------------------------------------------------------------
Change in net assets from fund
share transactions $(3,105,529) $5,199,101 $(38,348,403) $(10,177,495)
- -------------------------------------------------------------------------------------------------------------------------
Total change 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
Statements of Changes in Net Assets - continued
GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND
For year ended 3/31/04
CHANGE IN NET ASSETS
OPERATIONS
Net investment income $3,053,920 $7,304,054 $11,933,918
- ---------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 130,924 647,406 757,334
- ---------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments 196,883 233,396 223,258
- ---------------------------------------------------------------------------------------------------------------
Change 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)
- ---------------------------------------------------------------------------------------------------------------
Change in net assets from fund share
transactions $(3,604,840) $(3,556,215) $(10,750,406)
- ---------------------------------------------------------------------------------------------------------------
Total change 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
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) ALABAMA MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------
The financial highlights table is intended to help you understand each funds" 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 funds"
independent registered public accounting firm, whose report, together with each fund's financial statements, are included in
this report.
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of period $10.88 $10.82 $10.31 $10.53 $10.00
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.48 $0.48 $0.48 $0.51 $0.54
- -----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (0.22) 0.06 0.54 (0.19) 0.53
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.26 $0.54 $1.02 $0.32 $1.07
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.48) $(0.48) $(0.50) $(0.54) $(0.54)
- -----------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (0.04) -- (0.01) -- --
- -----------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.00)+++ --
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.52) $(0.48) $(0.51) $(0.54) $(0.54)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.62 $10.88 $10.82 $10.31 $10.53
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 2.40 5.11 10.06 3.05 11.00
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.84 0.88 0.88 0.88 0.86
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.46 4.38 4.49 4.87 5.25
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 17 10 21 20 17
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $77,499 $80,704 $84,474 $83,146 $81,615
- -----------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.45 $0.45 $0.46 $0.49 $0.52
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.09 1.09 1.08 1.08 1.06
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.21 4.17 4.29 4.67 5.05
- -----------------------------------------------------------------------------------------------------------------------------
(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 do not include the applicable sales charge. If the charge had been included, the results would have
been lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) ALABAMA MUNICIPAL BOND FUND
- ---------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of period $10.88 $10.82 $10.31 $10.53 $10.00
- ---------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.40 $0.39 $0.40 $0.43 $0.46
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (0.23) 0.07 0.54 (0.19) 0.53
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.17 $0.46 $0.94 $0.24 $0.99
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.39) $(0.40) $(0.42) $(0.46) $(0.46)
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (0.04) -- (0.01) -- --
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.00)+++ --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.43) $(0.40) $(0.43) $(0.46) $(0.46)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.62 $10.88 $10.82 $10.31 $10.53
- ---------------------------------------------------------------------------------------------------------------------------
Total return (%)& 1.63 4.32 9.14 2.38 10.17
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.59 1.63 1.63 1.63 1.61
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.71 3.63 3.74 4.09 4.50
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 17 10 21 20 17
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $15,118 $17,339 $16,163 $13,579 $12,531
- ---------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.37 $0.37 $0.38 $0.41 $0.46
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.84 1.83 1.83 1.83 1.81
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.46 3.43 3.54 3.89 4.30
- ---------------------------------------------------------------------------------------------------------------------------
(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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) ARKANSAS MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of
period $10.41 $10.40 $9.97 $10.08 $9.61
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.45 $0.45 $0.47 $0.51 $0.51
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (0.23) 0.01 0.46 (0.11) 0.47
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.22 $0.46 $0.93 $0.40 $0.98
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.46) $(0.45) $(0.50) $(0.51) $(0.51)
- ------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in
capital# $0.00+++ $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.17 $10.41 $10.40 $9.97 $10.08
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 2.14 4.53 9.51 4.06 10.45
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.65 0.72 0.73 0.72 0.70
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.47 4.31 4.59 5.05 5.25
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 13 19 15 15 12
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $127,075 $139,333 $134,521 $119,328 $113,928
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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 $0.43 $0.45 $0.49 $0.49
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 0.90 0.92 0.93 0.92 0.90
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.22 4.11 4.39 4.85 5.05
- ------------------------------------------------------------------------------------------------------------------------------
(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 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 do not include the applicable sales charge. If the charge had been included, the results would have been
lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) ARKANSAS MUNICIPAL BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of
period $10.42 $10.41 $9.98 $10.09 $9.62
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.38 $0.37 $0.39 $0.43 $0.44
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (0.24) 0.01 0.46 (0.11) 0.46
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.14 $0.38 $0.85 $0.32 $0.90
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.38) $(0.37) $(0.42) $(0.43) $(0.43)
- ------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in
capital# $0.00+++ $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.18 $10.42 $10.41 $9.98 $10.09
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 1.37 3.68 8.62 3.24 9.59
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.41 1.53 1.54 1.50 1.47
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.71 3.50 3.77 4.26 4.49
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 13 19 15 15 12
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $11,259 $12,554 $12,049 $8,700 $9,822
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.35 $0.34 $0.37 $0.41 $0.42
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.66 1.73 1.74 1.70 1.67
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.46 3.30 3.57 4.06 4.29
- ------------------------------------------------------------------------------------------------------------------------------
(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 amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) CALIFORNIA MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of
period $5.98 $5.96 $5.70 $5.81 $5.52
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.29 $0.28 $0.28 $0.28 $0.28
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (0.11) 0.02 0.27 (0.10) 0.30
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.18 $0.30 $0.55 $0.18 $0.58
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.28) $(0.28) $(0.29) $(0.28) $(0.29)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.01) --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.28) $(0.28) $(0.29) $(0.29) $(0.29)
- ------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in
capital# $0.00+++ $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.88 $5.98 $5.96 $5.70 $5.81
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 3.14 5.22 9.79 3.11 10.78
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.61 0.67 0.67 0.67 0.62
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.91 4.71 4.73 4.87 5.08
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 12 8 22 12 21
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $295,332 $314,108 $333,350 $305,699 $293,137
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.27 $0.27 $0.27 $0.27 $0.27
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 0.86 0.87 0.87 0.87 0.87
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.66 4.51 4.53 4.67 4.83
- ------------------------------------------------------------------------------------------------------------------------------
(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 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 do not include the applicable sales charge. If the charge had been included, the results would have
been lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) CALIFORNIA MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of
period $5.98 $5.96 $5.70 $5.81 $5.52
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.25 $0.23 $0.23 $0.24 $0.24
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (0.11) 0.03 0.27 (0.11) 0.30
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.14 $0.26 $0.50 $0.13 $0.54
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.24) $(0.24) $(0.24) $(0.23) $(0.25)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.01) --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.24) $(0.24) $(0.24) $(0.24) $(0.25)
- ------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in
capital# $0.00+++ $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.88 $5.98 $5.96 $5.70 $5.81
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 2.38 4.38 8.93 2.30 9.93
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.34 1.47 1.46 1.45 1.39
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.17 3.91 3.94 4.09 4.31
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 12 8 22 12 21
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $69,142 $85,106 $98,888 $84,123 $80,473
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.23 $0.22 $0.22 $0.23 $0.23
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.59 1.67 1.66 1.65 1.64
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.92 3.71 3.74 3.89 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 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 amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) CALIFORNIA MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS C 2005 2004 2003 2002 2001
Net asset value, beginning of
period $6.00 $5.98 $5.72 $5.83 $5.53
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.24 $0.23 $0.23 $0.23 $0.23
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (0.11) 0.02 0.27 (0.10) 0.31
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.13 $0.25 $0.50 $0.13 $0.54
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.23) $(0.23) $(0.24) $(0.23) $(0.24)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.01) --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.23) $(0.23) $(0.24) $(0.24) $(0.24)
- ------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in
capital# $0.00+++ $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.90 $6.00 $5.98 $5.72 $5.83
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 2.22 4.27 8.78 2.17 9.97^
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.51 1.56 1.57 1.57 1.52
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.01 3.81 3.83 3.97 4.21
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 12 8 22 12 21
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $33,162 $36,363 $40,804 $35,022 $33,056
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.22 $0.22 $0.22 $0.22 $0.22
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.76 1.77 1.77 1.77 1.77
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.76 3.60 3.63 3.77 3.96
- ------------------------------------------------------------------------------------------------------------------------------
(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 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.
^ The total return previously reported for the year ended March 31, 2001 has been revised, from 9.96% to 9.97%.
+++ 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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) FLORIDA MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of
period $10.24 $10.19 $9.78 $9.95 $9.47
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.47 $0.47 $0.48 $0.50 $0.50
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (0.15) 0.05 0.44 (0.16) 0.49
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.32 $0.52 $0.92 $0.34 $0.99
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.47) $(0.47) $(0.51) $(0.51) $(0.51)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.09 $10.24 $10.19 $9.78 $9.95
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 3.25 5.20 9.40 3.52^ 10.72
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.57 0.64 0.62 0.63 0.63
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.68 4.58 4.78 5.09 5.23
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 18 31 27 16 18
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $69,082 $79,155 $86,045 $69,959 $66,807
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.45 $0.45 $0.46 $0.48 $0.48
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 0.82 0.85 0.82 0.83 0.83
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.43 4.37 4.58 4.89 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.
^ The total return previously reported for the year ended March 31, 2002 has been revised, from 3.41% to 3.52%.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns do not include the applicable sales charge. If the charge had been included, the results would have been lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) FLORIDA MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of
period $10.24 $10.19 $9.78 $9.95 $9.47
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.40 $0.39 $0.40 $0.43 $0.42
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (0.16) 0.05 0.43 (0.17) 0.49
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.24 $0.44 $0.83 $0.26 $0.91
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.39) $(0.39) $(0.42) $(0.43) $(0.43)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.09 $10.24 $10.19 $9.78 $9.95
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 2.45 4.36 8.64 2.58 9.84
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.34 1.44 1.42 1.43 1.43
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.92 3.78 3.97 4.29 4.43
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 18 31 27 16 18
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $18,382 $22,312 $25,175 $22,151 $23,820
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.37 $0.37 $0.38 $0.41 $0.41
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.59 1.64 1.62 1.63 1.63
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.67 3.58 3.77 4.09 4.23
- ------------------------------------------------------------------------------------------------------------------------------
(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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) GEORGIA MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of period $11.22 $11.17 $10.63 $10.82 $10.26
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.48 $0.49 $0.49 $0.50 $0.52
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (0.23) 0.05 0.55 (0.17) 0.56
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.25 $0.54 $1.04 $0.33 $1.08
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.48) $(0.49) $(0.50) $(0.51) $(0.52)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.01) --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.48) $(0.49) $(0.50) $(0.52) $(0.52)
- ------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in
capital# $0.00+++ $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.99 $11.22 $11.17 $10.63 $10.82
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 2.27 4.93 9.97 3.03 10.80
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.88 0.91 0.92 0.93 0.90
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.35 4.35 4.43 4.67 4.95
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 18 12 25 19 24
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $53,190 $55,659 $57,636 $54,179 $52,236
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.45 $0.46 $0.47 $0.48 $0.50
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.13 1.12 1.12 1.13 1.10
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.10 4.14 4.23 4.47 4.75
- ------------------------------------------------------------------------------------------------------------------------------
(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 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 do not include the applicable sales charge. If the charge had been included, the results would have
been lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) GEORGIA MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of period $11.23 $11.18 $10.64 $10.83 $10.27
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.40 $0.40 $0.40 $0.42 $0.45
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (0.24) 0.06 0.56 (0.18) 0.55
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.16 $0.46 $0.96 $0.24 $1.00
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.39) $(0.41) $(0.42) $(0.42) $(0.44)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.01) --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.39) $(0.41) $(0.42) $(0.43) $(0.44)
- ------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in
capital# $0.00+++ $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.00 $11.23 $11.18 $10.64 $10.83
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 1.51 4.15 9.15 2.26 9.97
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.63 1.66 1.67 1.68 1.65
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.60 3.60 3.68 3.91 4.25
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 18 12 25 19 24
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $13,280 $16,759 $18,077 $16,031 $17,376
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.37 $0.38 $0.38 $0.40 $0.43
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.88 1.86 1.87 1.88 1.85
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.35 3.40 3.48 3.71 4.05
- ------------------------------------------------------------------------------------------------------------------------------
(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 amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MARYLAND MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of
period $11.74 $11.69 $11.21 $11.35 $10.81
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.52 $0.51 $0.52 $0.54 $0.54
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (0.25) 0.06 0.50 (0.14) 0.54
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.27 $0.57 $1.02 $0.40 $1.08
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.51) $(0.52) $(0.54) $(0.54) $(0.54)
- ------------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments (0.01) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.52) $(0.52) $(0.54) $(0.54) $(0.54)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.49 $11.74 $11.69 $11.21 $11.35
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 2.36 4.96 9.21 3.59 10.26
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.89 0.96 0.95 0.95 0.95
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.48 4.35 4.51 4.73 4.96
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 12 21 12 8 14
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $124,261 $138,201 $138,666 $128,750 $125,316
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.49 $0.49 $0.50 $0.52 $0.52
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.14 1.17 1.15 1.15 1.15
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.23 4.14 4.31 4.53 4.76
- ------------------------------------------------------------------------------------------------------------------------------
(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 do not include the applicable sales charge. If the charge had been included, the results would have been lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MARYLAND MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of
period $11.74 $11.68 $11.20 $11.34 $10.81
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.44 $0.43 $0.45 $0.46 $0.47
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (0.25) 0.07 0.49 (0.13) 0.53
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.19 $0.50 $0.94 $0.33 $1.00
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.44) $(0.44) $(0.46) $(0.47) $(0.47)
- ------------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments $(0.00)+++ $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.44) $(0.44) $(0.46) $(0.47) $(0.47)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.49 $11.74 $11.68 $11.20 $11.34
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 1.69 4.37 8.52 2.92 9.46
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.54 1.61 1.60 1.60 1.60
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.83 3.70 3.86 4.08 4.30
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 12 21 12 8 14
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $25,716 $31,697 $34,033 $31,542 $28,859
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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 $0.41 $0.42 $0.44 $0.47
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.79 1.81 1.80 1.80 1.80
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.58 3.50 3.66 3.88 4.10
- ------------------------------------------------------------------------------------------------------------------------------
(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 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 amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MASSACHUSETTS MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of
period $11.52 $11.49 $10.90 $11.11 $10.60
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.51 $0.51 $0.52 $0.53 $0.55
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (0.22) 0.03 0.60 (0.21) 0.52
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.29 $0.54 $1.12 $0.32 $1.07
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.50) $(0.51) $(0.53) $(0.52) $(0.56)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.01) --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.50) $(0.51) $(0.53) $(0.53) $(0.56)
- ------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in
capital# $0.00+++ $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.31 $11.52 $11.49 $10.90 $11.11
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 2.63 4.82 10.42 2.93 10.44
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.84 0.95 0.92 0.92 0.92
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.48 4.39 4.56 4.73 5.10
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 11 14 15 13 22
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $210,103 $224,923 $233,500 $210,269 $216,272
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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 $0.48 $0.49 $0.51 $0.53
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.09 1.16 1.12 1.12 1.12
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.23 4.18 4.36 4.53 4.90
- ------------------------------------------------------------------------------------------------------------------------------
(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 do not include the applicable sales charge. If the charge had been included, the results would have been lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MASSACHUSETTS MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of
period $11.54 $11.51 $10.92 $11.12 $10.60
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.43 $0.43 $0.44 $0.46 $0.48
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (0.21) 0.04 0.60 (0.20) 0.53
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.22 $0.47 $1.04 $0.26 $1.01
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.43) $(0.44) $(0.45) $(0.45) $(0.49)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.01) --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.43) $(0.44) $(0.45) $(0.46) $(0.49)
- ------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in
capital# $0.00+++ $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.33 $11.54 $11.51 $10.92 $11.12
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 1.97 4.14 9.69 2.35 9.82^
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.49 1.60 1.57 1.57 1.57
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.83 3.74 3.91 4.13 4.45
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 11 14 15 13 22
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000
Omitted) $40,766 $46,253 $47,612 $37,487 $30,057
- ------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June
7, 2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially
all of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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 $0.41 $0.42 $0.44 $0.46
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.74 1.80 1.77 1.77 1.77
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.58 3.54 3.71 3.93 4.25
- ------------------------------------------------------------------------------------------------------------------------------
(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.
^ The total return previously reported for the year ended March 31, 2001 has been revised, from (9.82)% to 9.82%.
+++ 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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
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 U.S.
generally accepted accounting principles 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 - 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. 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 approximates market value as determined by the Board of
Trustees. When pricing service information or market quotations are not readily
available, securities are priced at fair value as determined under the
direction of 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. The funds may use swaps for both
hedging and non-hedging purposes. For hedging purposes, each fund may use swaps
to reduce its exposure to interest and foreign exchange 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 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 Swaps - Each 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.
Short Term Fees - For purchases made on or after July 1, 2004 and before April
1, 2005, each fund charged a 2% redemption fee (which was retained by each
fund) on proceeds from Class A, Class B, and Class C shares redeemed or
exchanged within 5 business days following their acquisition (either by
purchase or exchange). Effective April 1, 2005, each fund will no longer charge
a redemption fee. See the funds" prospectus for details. Any redemption fees
charged are accounted for as an addition to paid-in-capital.
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 U.S. generally accepted accounting principles. 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.
Each fund may receive proceeds from litigation settlements involving its
portfolio holdings. Any proceeds received are reflected in realized gain/loss
in the statement of operations, or in unrealized gain/loss if the security is
still held by the fund.
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, 2005, 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, net operating losses, expiration
of capital loss carry forward, treating a portion of the proceeds from
redemptions as a distribution for tax purposes, and amortization and accretion
on debt securities.
The tax character of distributions declared for the years ended March 31, 2005
and March 31, 2004 was as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
YEAR ENDED 3/31/05 FUND FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions declared from:
Tax-exempt income $4,028,102 $5,977,001 $18,783,159 $4,058,369 $2,840,491 $6,753,147 $10,888,037
- ----------------------------------------------------------------------------------------------------------------------------------
Long-term capital gain 326,164 -- -- -- -- 60,248 --
- ----------------------------------------------------------------------------------------------------------------------------------
Ordinary income 63,872 214,789 55,853 -- -- 70,072 252,507
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions
declared $4,418,138 $6,191,790 $18,839,012 $4,058,369 $2,840,491 $6,883,467 $11,140,544
- ----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 3/31/04
- ----------------------------------------------------------------------------------------------------------------------------------
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
- ----------------------------------------------------------------------------------------------------------------------------------
During the year ended March 31, 2005, the following amounts were reclassified due to differences between book and tax accounting
for amortization and accretion on debt securities, expiration of capital loss carry forward, derivatives, defaulted bonds, net
operating losses, distributions in excess of realized capital gains, and treating a portion of the proceeds from redemptions as a
distribution for tax purposes:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease):
Paid-in capital $(74,123) $34,245 $249,161 $(2,007) $(11,069) $(323,530) $58,451
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized
gain (loss) on investments 39,659 (226,203) (301,749) (62,938) 10,035 338,696 (42,576)
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
distributions in excess of
net investment income 34,464 191,958 52,588 64,945 1,034 (15,166) (15,875)
- ----------------------------------------------------------------------------------------------------------------------------------
These changes had no effect on the net assets or net asset value per share of the funds.
As of March 31, 2005, 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 $270,804 $550,797 $836,932 $188,923 $67,059 $227,044 $389,414
- ----------------------------------------------------------------------------------------------------------------------------------
Undistributed ordinary
income -- -- -- 49,709 -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Undistributed long-term
capital gain -- -- 657,132 -- -- -- 92,360
- ----------------------------------------------------------------------------------------------------------------------------------
Capital loss carryforward -- (532,845) (229,685) (1,067,421) (171,792) (400,494) --
- ----------------------------------------------------------------------------------------------------------------------------------
Post-October capital loss
deferral (77,028) (490,965) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 5,818,060 9,356,495 20,815,088 4,595,215 4,513,756 10,108,507 15,998,051
- ----------------------------------------------------------------------------------------------------------------------------------
Other temporary differences (358,162) (389,270) (1,555,308) (232,864) (184,291) (527,472) (774,446)
- ----------------------------------------------------------------------------------------------------------------------------------
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 on:
ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND
EXPIRATION DATE FUND FUND* FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------
March 31, 2006 $-- $-- $(781,761) $-- $--
- ------------------------------------------------------------------------------------------------------------------
March 31, 2007 -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------
March 31, 2008 -- (229,685) -- -- --
- ------------------------------------------------------------------------------------------------------------------
March 31, 2009 -- -- -- (171,792) (400,494)
- ------------------------------------------------------------------------------------------------------------------
March 31, 2010 -- -- (164,025) -- --
- ------------------------------------------------------------------------------------------------------------------
March 31, 2011 -- -- (121,635) -- --
- ------------------------------------------------------------------------------------------------------------------
March 31, 2012 (532,845) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------
Total $(532,845) $(229,685) $(1,067,421) $(171,792) $(400,494)
- ------------------------------------------------------------------------------------------------------------------
* The availability of a portion of the capital loss carryforwards which were acquired on March 9, 2001, in connection with the
PaineWebber California Tax Free Fund merger, may be limited in a given year.
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 shares outstanding of each class, without distinction between share
classes. Dividends are declared separately for each class. Differences in per
share dividend rates are generally due to differences in separate class
expenses. 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. In the case of the Massachusetts Fund
the reduction of expenses by the investment adviser includes a non-recurring
reimbursement of prior period out-of-pocket shareholder servicing costs in the
amount of $96,368. As part of a settlement agreement with the New York Attorney
General concerning market timing and related matters (See Legal Proceedings
footnote), MFS has agreed to reduce each fund's management fee to 0.30% of
average daily net assets for the period March 1, 2004 through February 28,
2009, which is shown as a reduction of total expenses in the Statement of
Operations. 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.
Each fund pays compensation to its Independent Trustees in the form of a
retainer, attendance fees, and additional compensation to Board and Committee
chairpersons, and pays no compensation directly to its Trustees who are
officers of the investment adviser, or to officers of the funds, all of whom
receive remuneration for their services to the funds from MFS. Certain officers
and Trustees of the funds 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
Trustees" compensation is a pension expense for retired Independent Trustees
for the year ended March 31, 2005:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
Pension Expense $1,284 $1,177 $1,881 $1,175 $1,281 $1,851 $1,881
- ----------------------------------------------------------------------------------------------------------------------------------
These funds and certain other MFS funds (the "funds") have entered into a
services agreement (the "Agreement") which provides for payment of fees by the
funds to Tarantino LLC in return for the provision of services of an
Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an
officer of the funds and the sole member of Tarantino LLC. MFS has agreed to
reimburse each of the funds for a proportional share of substantially all of
the payments made by the funds to Tarantino LLC and also to provide office
space and other administrative support and supplies to the ICCO. The funds can
terminate the Agreement with Tarantino LLC at any time under the terms of the
Agreement.
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. Each
fund paid MFS an administrative fee up to the following annual percentage rates
of the fund's average daily net assets:
4/01/04
THROUGH
EFFECTIVE DATE 2/28/05 3/01/05
First $2 billion 0.01120% 0.01626%
- -------------------------------------------------------------------------------
Next $2.5 billion 0.00832% 0.01206%
- -------------------------------------------------------------------------------
Next $2.5 billion 0.00032% 0.00056%
- -------------------------------------------------------------------------------
In excess of $7 billion 0.00000% 0.00000%
- -------------------------------------------------------------------------------
For the year ended March 31, 2005, each fund paid MFS the following amounts 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 $7,508 $11,243 $32,691 $7,186 $5,425 $12,519 $20,378
- -----------------------------------------------------------------------------------------------------------------------------------
Percentage of average
daily net assets 0.00793% 0.00799% 0.00794% 0.00799% 0.00793% 0.00794% 0.00793%
- -----------------------------------------------------------------------------------------------------------------------------------
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, 2005:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------------------------
$25,937 $38,856 $53,837 $21,523 $11,780 $25,872 $41,311
- -------------------------------------------------------------------------------------------------------------------------------
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, 2005,
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
- -------------------------------------------------------------------------------------------------------------------------------
$1,313 $1,181 $3,802 $-- $885 $3,681 $48,023
- -------------------------------------------------------------------------------------------------------------------------------
During the year ended March 31, 2005, 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
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, 2005 were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Class B $85 $2 $ 36 $-- $20 $187 $128
- -----------------------------------------------------------------------------------------------------------------------------------
Class C N/A N/A 1,727 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
During the year ended March 31, 2005, 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% 0.86% 0.86% 0.77% 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 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 of purchase. MFD receives all contingent deferred sales charges.
Contingent deferred sales charges imposed during the year ended March 31, 2005
were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
CDSC IMPOSED FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------
Class A $-- $ 9,620 $ 4,570 $ 1,984 $-- $-- $--
- ------------------------------------------------------------------------------------------------------------------------------
Class B 55,153 29,402 166,354 46,758 31,192 51,171 75,883
- ------------------------------------------------------------------------------------------------------------------------------
Class C N/A N/A 5,788 N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------
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 each fund's average daily net assets
is set periodically under the supervision of the fund's Trustees. For the period April 1, 2004 through June 30, 2004, the fee was
set at 0.10% of each fund's average daily net assets. For the period July 1, 2004 through December 31, 2004, each fund was charged
up to 0.0861% of its average daily net assets. For the period January 1, 2005 through February 28, 2005, each fund was charged up
to 0.1035% of its average daily net assets. Effective March 1, 2005, each fund is charged up to 0.1159% of its average daily net
assets. For the year ended March 31, 2005, each fund paid MFSC the following fee for shareholder services:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Expense paid $89,133 $132,745 $387,544 $84,771 $64,346 $148,296 $241,720
- -----------------------------------------------------------------------------------------------------------------------------------
Percentage of average
daily net assets 0.0941% 0.0944% 0.0941% 0.0942% 0.0941% 0.0941% 0.0941%
- -----------------------------------------------------------------------------------------------------------------------------------
Shareholder service costs include out of pocket expenses and sub accounting services expenses paid by MFSC on behalf of the funds
and subsequently reimbursed to MFSC which amounted to the following, as well as other costs paid by the funds directly to
unaffiliated vendors for the year ended March 31, 2005:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
$12,231 $23,533 $32,469 $10,344 $16,159 $24,085 $38,228
- -----------------------------------------------------------------------------------------------------------------------------------
(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 $15,782,284 $17,463,071 $49,873,138 $15,823,105 $12,031,295 $18,604,386 $27,315,483
- -----------------------------------------------------------------------------------------------------------------------------------
Sales 19,273,041 25,029,897 85,909,122 29,798,220 15,727,941 37,761,783 45,971,564
- -----------------------------------------------------------------------------------------------------------------------------------
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:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Aggregate cost $85,448,668 $129,058,117 $370,950,502 $81,244,161 $61,389,811 $142,213,497 $232,527,897
- -----------------------------------------------------------------------------------------------------------------------------------
Gross unrealized
appreciation $6,243,366 $9,424,599 $23,696,193 $4,702,378 $4,556,143 $10,435,465 $16,747,026
- -----------------------------------------------------------------------------------------------------------------------------------
Gross unrealized
depreciation (425,306) (68,104) (2,881,105) (107,163) (42,387) (326,958) (748,975)
- -----------------------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation) $5,818,060 $9,356,495 $20,815,088 $4,595,215 $4,513,756 $10,108,507 $15,998,051
- -----------------------------------------------------------------------------------------------------------------------------------
(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
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Year ended 3/31/05 (000
Omitted) SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold 634 $6,775 996 $10,203 3,679 $21,729 972 $9,841
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment
of distributions 228 2,439 373 3,818 1,399 8,246 164 1,665
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (984) (10,502) (2,249) (22,990) (7,403) (43,515) (2,024) (20,329)
- -----------------------------------------------------------------------------------------------------------------------------------
Net change (122) $(1,288) (880) $(8,969) (2,325) $(13,540) (888) $(8,823)
- -----------------------------------------------------------------------------------------------------------------------------------
Year ended 3/31/04 (000 Omitted)
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 8,298 179 1,822
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (1,322) (14,349) (1,283) (13,287) (11,257) (66,990) (2,067) (21,072)
- -----------------------------------------------------------------------------------------------------------------------------------
Net change (389) $(4,215) 445 $4,701 (3,373) $(20,047) (710) $(7,226)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Year ended 3/31/05 (000 Omitted)
Shares sold 140 $1,484 131 $1,343 386 $2,273 190 $1,921
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment
of distributions 38 402 28 282 330 1,946 36 364
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (348) (3,709) (257) (2,625) (3,196) (18,787) (585) (5,879)
- -----------------------------------------------------------------------------------------------------------------------------------
Net change (170) $(1,823) (98) $(1,000) (2,480) $(14,568) (359) $(3,594)
- -----------------------------------------------------------------------------------------------------------------------------------
Year ended 3/31/04 (000 Omitted)
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 change 100 $1,110 47 $498 (2,351) $(13,851) (291) $(2,952)
- -----------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Year ended 3/31/05 (000
Omitted) SHARES AMOUNT
Shares sold 642 $3,787
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment
of distributions 147 871
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (1,231) (7,248)
- -----------------------------------------------------------------------------------------------------------------------------------
Net change (442) $(2,590)
- -----------------------------------------------------------------------------------------------------------------------------------
Year ended 3/31/04 (000 Omitted)
Shares sold 1,235 $7,407
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment
of distributions 160 955
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (2,154) (12,812)
- -----------------------------------------------------------------------------------------------------------------------------------
Net change (759) $(4,450)
- -----------------------------------------------------------------------------------------------------------------------------------
GEORGIA MARYLAND MASSACHUSETTS
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Year ended 3/31/05 (000
Omitted) SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold 329 $3,642 581 $6,708 1,137 $12,908
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment
of distributions 148 1,635 318 3,668 427 4,841
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (598) (6,574) (1,857) (21,368) (2,510) (28,364)
- -----------------------------------------------------------------------------------------------------------------------------------
Net change (121) $(1,297) (958) $(10,992) (946) $(10,615)
- -----------------------------------------------------------------------------------------------------------------------------------
Year ending 3/31/04 (000 Omitted)
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 change (198) $(2,221) (95) $(1,075) (803) $(9,242)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Year ended 3/31/05 (000 Omitted)
Shares sold 33 $365 101 $1,161 197 $2,239
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment
of distributions 29 322 59 678 95 1,085
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (347) (3,840) (622) (7,173) (702) (7,959)
- -----------------------------------------------------------------------------------------------------------------------------------
Net change (285) $(3,153) (462) $(5,334) (410) $(4,635)
- -----------------------------------------------------------------------------------------------------------------------------------
Year ended 3/31/04 (000 Omitted)
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 change (124) $(1,384) (213) $(2,481) (130) $(1,508)
- -----------------------------------------------------------------------------------------------------------------------------------
(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 Federal
Reserve funds 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, 2005 ranged from $357 to
$2,351, and is included in miscellaneous expense. None of the funds had
significant borrowings during the year ended March 31, 2005.
(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 and foreign currency exchange 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 Swaps
NOTIONAL PRINCIPAL CASH FLOWS UNREALIZED
AMOUNT OF RECEIVED BY CASH FLOWS PAID APPRECIATION
FUND EXPIRATION CURRENCY CONTRACT THE FUND BY THE FUND (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------------------------
Alabama Fund Floating -- 7 Day Fixed -- 3 Year
BMA Swap BMA Swap
12/1/07 USD 2,000,000 Index Index (2.795%) $14,974
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/8/15 USD 2,000,000 Index Index (3.657%) 29,523
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/27/15 USD 2,000,000 Index Index (3.809%) 7,867
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 11 Year
BMA Swap BMA Swap
7/12/16 USD 2,000,000 Index Index (3.777%) 23,874
- ----------------------------------------------------------------------------------------------------------------------------------
Total Alabama Fund $76,238
- ----------------------------------------------------------------------------------------------------------------------------------
Arkansas Fund Floating -- 7 Day Fixed -- 3 Year
BMA Swap BMA Swap
12/1/07 USD 3,000,000 Index Index (2.795%) $22,460
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/8/15 USD 3,000,000 Index Index (3.657%) 44,285
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/15/15 USD 3,000,000 Index Index (3.702%) 34,970
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
9/1/15 USD 3,000,000 Index Index (3.937%) (8,936)
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
4/6/17 USD 1,500,000 Index Index (3.884%) 3,559
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
4/20/17 USD 2,000,000 Index Index (3.714%) 36,162
- ----------------------------------------------------------------------------------------------------------------------------------
Total Arkansas Fund $132,500
- ----------------------------------------------------------------------------------------------------------------------------------
California Fund Floating -- 7 Day Fixed -- 3 Year
BMA Swap BMA Swap
12/1/07 USD 9,000,000 Index Index (2.795%) $67,262
- ----------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
6/1/35 USD 4,000,000 Index (4.172%) Index (62,736)
- ----------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
9/6/35 USD 2,000,000 Index (4.254%) Index (14,884)
- ----------------------------------------------------------------------------------------------------------------------------------
Total California Fund $(10,358)
- ----------------------------------------------------------------------------------------------------------------------------------
Florida Fund Floating -- 7 Day Fixed -- 3 Year
BMA Swap BMA Swap
12/1/07 USD 2,000,000 Index Index (2.795%) $14,947
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/15/15 USD 1,500,000 Index Index (3.702%) 17,485
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/22/15 USD 1,000,000 Index Index (3.628%) 17,735
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/27/15 USD 2,000,000 Index Index (3.809%) 7,867
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 11 Year
BMA Swap BMA Swap
7/12/16 USD 2,000,000 Index Index (3.777%) 23,874
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
4/6/17 USD 1,000,000 Index Index (3.884%) 2,372
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
4/20/17 USD 1,000,000 Index Index (3.714%) 18,081
- ----------------------------------------------------------------------------------------------------------------------------------
Total Florida Fund $102,361
- ----------------------------------------------------------------------------------------------------------------------------------
Georgia Fund Floating -- 7 Day Fixed -- 3 Year
BMA Swap BMA Swap
12/1/07 USD 1,000,000 Index Index (2.795%) $7,487
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/8/15 USD 1,000,000 Index Index (3.657%) 14,762
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/15/15 USD 1,500,000 Index Index (3.702%) 17,485
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/27/15 USD 2,000,000 Index Index (3.809%) 7,867
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
9/1/15 USD 1,000,000 Index Index (3.937%) (2,979)
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
4/6/17 USD 1,000,000 Index Index (3.884%) 2,372
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
4/20/17 USD 1,000,000 Index Index (3.714%) 18,081
- ----------------------------------------------------------------------------------------------------------------------------------
Total Georgia Fund $65,075
- ----------------------------------------------------------------------------------------------------------------------------------
Maryland Fund Floating -- 7 Day Fixed -- 3 Year
BMA Swap BMA Swap
12/1/07 USD 3,000,000 Index Index (2.795%) $22,460
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/27/15 USD 2,000,000 Index Index (3.809%) 7,867
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
9/1/15 USD 2,000,000 Index Index (3.937%) (5,957)
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
4/6/17 USD 2,000,000 Index Index (3.884%) 4,745
- ----------------------------------------------------------------------------------------------------------------------------------
Total Maryland Fund $29,115
- ----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Fund Floating -- 7 Day Fixed -- 3 Year
BMA Swap BMA Swap
12/1/07 USD 5,000,000 Index Index (2.795%) $37,434
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/15/15 USD 5,000,000 Index Index (3.702%) 58,284
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
6/22/15 USD 2,000,000 Index Index (3.628%) 35,470
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 10 Year
BMA Swap BMA Swap
8/3/15 USD 5,000,000 Index Index (3.803%) 30,508
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 11 Year
BMA Swap BMA Swap
7/12/16 USD 2,000,000 Index Index (3.777%) 23,874
- ----------------------------------------------------------------------------------------------------------------------------------
Floating -- 7 Day Fixed -- 12 Year
BMA Swap BMA Swap
4/6/17 USD 1,000,000 Index Index (3.884%) 2,372
- ----------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
6/1/35 USD 3,000,000 Index (4.172%) Index (47,052)
- ----------------------------------------------------------------------------------------------------------------------------------
Fixed -- 30 Year Floating -- 7 Day
BMA Swap BMA Swap
9/6/35 USD 2,000,000 Index (4.254%) Index (14,884)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Massachusetts Fund $126,006
- ----------------------------------------------------------------------------------------------------------------------------------
At March 31, 2005, each fund had sufficient cash and/or securities to cover
any commitments under these contracts.
(8) RESTRICTED SECURITIES
At March 31, 2005, each fund owned the following restricted securities which
are subject to legal or contractual restrictions on resale, 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 a pricing
service, or if not available, in good faith at the direction of the Trustees.
DATE OF PAR
FUND DESCRIPTION ACQUISITION AMOUNT COST VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Alabama Fund Birmingham, AL, Multi-Family Housing Rev., "C" (Beaconview
Apartments), 8%, 2030 7/19/00 $395,000 $395,000 $39,500
Guam Power Authority Rev., RITES, AMBAC, 7.577%, 2013 5/20/99 500,000 536,360 585,500
Guam Power Authority Rev., RITES, AMBAC, 7.077%, 2018 5/20/99 4,500,000 4,376,790 4,892,220
Puerto Rico Municipal Finance Agency, RITES, FSA, 8.129%, 2017 1/6/00 500,000 469,080 588,970
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2013 3/31/99 500,000 509,110 634,000
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2016 9/30/99 500,000 569,030 620,180
- -----------------------------------------------------------------------------------------------------------------------------------
$7,360,370
- -----------------------------------------------------------------------------------------------------------------------------------
Arkansas Fund Commonwealth of Puerto Rico, Infrastructure, RITES, ETM,
8.112%, 2019 10/5/00 $1,250,000 $1,282,225 $1,498,150
Commonwealth of Puerto Rico, RITES, MBIA, 8.612%, 2020 3/30/00 3,000,000 3,067,320 3,651,420
Puerto Rico Municipal Finance Agency, RITES, FSA, 8.129%, 2017 1/6/00 735,000 689,548 865,815
Puerto Rico Municipal Finance Agency, RITES, FSA, 8.129%, 2018 1/6/00 3,250,000 3,006,835 3,820,180
- -----------------------------------------------------------------------------------------------------------------------------------
$9,835,565
- -----------------------------------------------------------------------------------------------------------------------------------
California Fund Los Angeles, CA, RITES, 7.566%, 2014 7/20/99 $5,405,000 $5,672,548 $6,621,017
Los Angeles, CA, Union School District, RITES, FSA,
7.566%, 2020 3/4/03 5,000,000 5,808,100 5,791,300
Commonwealth of Puerto Rico, ROLS, Series II R 124B, XLCA,
8.543%, 2017 10/22/01 1,500,000 1,816,140 1,918,830
Commonwealth of Puerto Rico, ROLS, Series II R 184C,
FGIC, 8.633%, 2016 8/5/02 3,300,000 4,269,738 4,264,260
Southern California Metropolitan Water District Rev., RITES,
8.577%, 2018 5/7/01 5,000,000 5,819,300 6,511,100
State of California, RITES, "B", 8.543%, 2017 1/3/00 1,250,000 1,230,275 1,539,725
University of California Rev., RITES, MBIA, 7.316%, 2016 5/21/99 5,705,000 5,783,273 6,367,864
- -----------------------------------------------------------------------------------------------------------------------------------
$33,014,09
6
- -----------------------------------------------------------------------------------------------------------------------------------
Florida Fund Commonwealth of Puerto Rico, Highway & Transportation, ROLS,
Railroad II R 227 1, MBIA, 8.633%, 2020 4/25/03 $2,500,000 $3,282,600 $3,262,400
Commonwealth of Puerto Rico, RITES, MBIA, 8.612%, 2019 3/30/00 1,000,000 1,030,240 1,217,140
State of Florida, RITES, 7.054%, 2017 4/9/99 3,000,000 3,042,840 3,356,640
- -----------------------------------------------------------------------------------------------------------------------------------
$7,836,180
- -----------------------------------------------------------------------------------------------------------------------------------
Georgia Fund Atlanta, GA, Water & Wastewater Rev., RITES, FGIC,
8.043%, 2016 4/20/99 $4,000,000 $4,668,400 $5,084,720
Puerto Rico Municipal Finance Agency, RITES, FSA, 9.137%, 2016 1/6/00 500,000 519,760 614,020
- -----------------------------------------------------------------------------------------------------------------------------------
$5,698,740
- -----------------------------------------------------------------------------------------------------------------------------------
Maryland Fund Guam Power Authority Rev., RITES, AMBAC, 7.577%, 2015 5/20/99 $1,680,000 $1,760,909 $1,936,670
Puerto Rico Electric Power Authority Rev., RITES, FSA,
7.559%, 2015 9/16/99 1,400,000 1,367,100 1,570,450
Puerto Rico Municipal Finance Agency, RITES, FSA, 8.129%, 2019 1/6/00 1,000,000 905,080 1,172,920
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2010 9/30/99 500,000 509,110 620,180
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2016 3/31/99 1,520,000 1,729,851 1,927,360
- -----------------------------------------------------------------------------------------------------------------------------------
$7,227,580
- -----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Dudley-Charlton, MA, Regional School District, RITES, FGIC,
Fund 7.566%, 2015 5/5/99 $1,365,000 $1,501,582 $1,659,294
Dudley-Charlton, MA, Regional School District, RITES, FGIC,
7.566%, 2016 5/5/99 1,430,000 1,558,414 1,749,062
Dudley-Charlton, MA, Regional School District, RITES, FGIC,
7.566%, 2018 5/5/99 1,565,000 1,687,884 1,928,299
Massachusetts Bay Transportation Authority, RITES,
9.380%, 2016 4/19/00 4,835,000 5,484,534 6,425,038
Massachusetts Water Resources Authority, RITES, FGIC,
9.916%, 2019 3/16/00 4,010,000 4,742,707 5,663,724
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2016 3/31/99 2,500,000 2,845,150 3,170,000
- -----------------------------------------------------------------------------------------------------------------------------------
$20,595,417
- -----------------------------------------------------------------------------------------------------------------------------------
At March 31, 2005, 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
- -------------------------------------------------------------------------------------------------------------------------
7.95% 7.11% 8.30% 8.96% 8.57% 4.82% 8.21%
- -------------------------------------------------------------------------------------------------------------------------
(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 March 31, 2005, 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
- --------------------------------------------------------------------------------------------------------------------------------
69.83% 63.69% 49.43% 60.82% 28.25% 32.22% 47.90%
- --------------------------------------------------------------------------------------------------------------------------------
For each fund, the greatest exposure to any one institution or agency did not exceed the following percentages of total
investments as of March 31, 2005:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------------
38.00% 17.62% 13.15% 24.42% 14.03% 9.16% 15.96%
- --------------------------------------------------------------------------------------------------------------------------------
(10) LEGAL PROCEEDINGS
On March 31, 2004, MFS settled an administrative proceeding with the Securities
and Exchange Commission ("SEC") regarding disclosure of brokerage allocation
practices in connection with MFS fund sales (the term "MFS funds" means the
open-end registered management investment companies sponsored by MFS). 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 developed by an
independent distribution consultant. The brokerage allocation practices which
were the subject of this proceeding were discontinued by MFS in November 2003.
The agreement with the SEC is reflected in an order of the SEC. The SEC
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 SEC
settlement order states that MFS had in place policies designed to obtain best
execution of all MFS fund trades. As part of the settlement, MFS retained an
independent compliance consultant to review the completeness of its current
policies and practices regarding disclosure to MFS fund trustees and to MFS
fund shareholders of strategic alliances between MFS or its affiliates and
broker-dealers and other financial intermediaries who support the sale of MFS
fund shares. Pursuant to the SEC order, on July 28, 2004, MFS transferred these
settlement amounts to the SEC, and those MFS funds entitled to these settlement
amounts accrued an estimate of their pro rata portion of these amounts. The
final distribution plan was approved by the SEC on January 21, 2005, and the
affected MFS funds received the payment on February 16, 2005.
In addition, in February 2004, MFS reached agreement with the 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 open-end retail fund ("MFS retail funds")
prospectuses regarding market timing and related matters (the "February
Settlements"). These regulators alleged that prospectus language for certain
MFS retail funds was false and misleading because, although the prospectuses
for those funds in the regulators" view indicated that they prohibited market
timing, MFS did not limit trading activity in 11 domestic large cap stock, high
grade bond and money market retail funds. MFS" former Chief Executive Officer
and former President 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. These
individuals 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 MFS 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 Board of
Trustees of the MFS retail funds, and acceptable to the SEC. MFS has further
agreed with 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 retained $250,000 and $750,000 was 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, MFS Fund Distributors, Inc., MFS Service Center,
Inc., MFS Corporation Retirement Committee, Sun Life Financial Inc., various
MFS funds, certain current and/or former 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 MFS funds during specified periods, as ERISA
actions by participants in certain retirement plan accounts on behalf of those
accounts, or as derivative actions on behalf of the MFS funds. The lawsuits
relating to market timing and related matters have been transferred to, and
consolidated before, the United States District Court for the District of
Maryland, as part of a multi-district litigation of market timing and related
claims involving several other fund complexes (In re Mutual Funds Investment
Litigation (Alger, Columbia, Janus, MFS, One Group, Putnam, Allianz Dresdner),
No. 1:04-md-15863 (transfer began March 19, 2004)). The market timing cases
related to the MFS complex are Riggs v. MFS et al., Case No. 04-cv-01162-JFM
(direct), Hammerslough v. MFS et al., Case No. 04-md-01620 (derivative) and
Anita Walker v. MFS et al., Case No. 1:04-CV-01758 (ERISA). The plaintiffs in
these consolidated lawsuits generally seek injunctive relief including removal
of the named Trustees, adviser and distributor, rescission of contracts and
12b-1 Plans, disgorgement of fees and profits, monetary damages, punitive
damages, attorney's fees and costs and other equitable and declaratory relief.
Two lawsuits alleging improper brokerage allocation practices and excessive
compensation are pending in the United States District Court for the District
of Massachusetts (Forsythe v. Sun Life Financial Inc., et al., No. 04cv10584
(GAO) (a consolidated action) and Marcus Dumond, et al. v. Massachusetts
Financial Servs. Co., et al., No. 04cv11458 (GAO)). The plaintiffs in these
lawsuits generally seek compensatory damages, punitive damages, recovery of
fees, rescission of contracts, an accounting, restitution, declaratory relief,
equitable and/or injunctive relief and attorney's fees and costs. The various
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 (ii) received excessive compensation as fiduciaries to the MFS funds,
or (iii) permitted or acquiesced in the improper use of fund assets by MFS to
support the distribution of MFS 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. 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 MFS 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 certain MFS retail funds for damages that they
allegedly sustained as a result of market timing or late trading in certain of
the MFS retail funds, and distributed $50 million to affected MFS funds to
compensate those funds based upon the amount of brokerage commissions allocated
in recognition of MFS 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 MFS 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 MFS funds.
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTING FIRM
- -------------------------------------------------------------------------------
To the Trustees and Shareholders of MFS Municipal Series Trust:
We have audited the accompanying statement of assets and liabilities 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, certain of the portfolios of MFS Municipal Series Trust (the "Trust"),
including the portfolio of investments, as of March 31, 2005, and the related
statement of operations for the year then ended, the statement of changes in
net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the 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. The Trust is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Trust's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. Our procedures
included confirmation of securities owned as of March 31, 2005, by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
aforementioned portfolios of MFS Municipal Series Trust as of March 31, 2005,
the results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States
of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 24, 2005
- -------------------------------------------------------------------------------
RESULTS OF SHAREHOLDER MEETING (unaudited) - 3/31/05
- -------------------------------------------------------------------------------
At a special meeting of shareholders 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, which was held on March
23, 2005, the following actions were taken:
ITEM 1. To elect a Board of Trustees:
NUMBER OF DOLLARS
----------------------------------------
NOMINEE AFFIRMATIVE WITHHOLD AUTHORITY
Lawrence H. Cohn 2,338,745,402.20 23,104,899.71
- -------------------------------------------------------------------------------
David H. Gunning 2,340,048,506.07 21,801,795.84
- -------------------------------------------------------------------------------
William R. Gutow 2,339,850,605.62 21,999,696.29
- -------------------------------------------------------------------------------
Michael Hegarty 2,340,213,807.46 21,636,494.45
- -------------------------------------------------------------------------------
J. Atwood Ives 2,338,786,653.70 23,063,648.21
- -------------------------------------------------------------------------------
Amy B. Lane 2,339,960,815.68 21,889,486.23
- -------------------------------------------------------------------------------
Robert J. Manning 2,340,560,593.28 21,289,708.63
- -------------------------------------------------------------------------------
Lawrence T. Perera 2,338,677,013.42 23,173,288.49
- -------------------------------------------------------------------------------
Robert C. Pozen 2,340,797,047.27 21,053,254.64
- -------------------------------------------------------------------------------
J. Dale Sherratt 2,338,746,772.55 23,103,529.36
- -------------------------------------------------------------------------------
Laurie J. Thomsen 2,339,932,511.83 21,917,790.08
- -------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
TRUSTEES AND OFFICERS -- IDENTIFICATION AND BACKGROUND,
- ----------------------------------------------------------------------------------------------------------------------------------
The Trustees and officers of the Trust, as of May 1, 2005, are listed below, together with their principal occupations during the
past five years. (Their titles may have varied during that period.) The address of each Trustee and officer is 500 Boylston
Street, Boston, Massachusetts 02116.
POSITION(s) HELD TRUSTEE/OFFICER PRINCIPAL OCCUPATIONS DURING THE PAST FIVE
NAME, DATE OF BIRTH WITH FUND SINCE(1) YEARS & OTHER DIRECTORSHIPS(2)
- ------------------- ---------------- --------------- ------------------------------------------
INTERESTED TRUSTEES
Robert J. Manning(3) Trustee and President February 2004 Massachusetts Financial Services Company, Chief
(born 10/20/63) Executive Officer, President, Chief Investment
Officer and Director
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); Bell Canada Enterprises
(telecommunication s), Director; Medtronic, Inc.
(medical technology), Director; Telesat
(satellite communications), Director
INDEPENDENT TRUSTEES
J. Atwood Ives Trustee and Chair of February 1992 Private investor; Eastern Enterprises (diversified
(born 05/01/36) Trustees 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 Cardiac
(born 03/11/37) Surgery; Harvard Medical School, Professor of
Surgery
David H. Gunning Trustee January 2004 Cleveland-Cliffs Inc. (mining products and service
(born 05/30/42) 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
Michael Hegarty Trustee December 2004 Retired; AXA Financial (financial services and
(born 12/21/44) insurance), Vice Chairman and Chief Operating
Officer (until May 2001); The Equitable Life
Assurance Society (insurance), President and
Chief Operating Officer (until May 2001)
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)
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)
Laurie J. Thomsen Trustee March 2005 Private investor; Prism Venture Partners (venture
(born 08/05/57) capital), Co- founder and General Partner (until
June 2004); St. Paul Travelers Companies
(commercial property liability insurance),
Director
OFFICERS
Robert J. Manning(3) President and Trustee February 2004 Massachusetts Financial Services Company, Chief
(born 10/20/63) Executive Officer, President, Chief Investment
Officer and Director
Jeffrey N. Carp(3) Secretary and Clerk September 2004 Massachusetts Financial Services Company, Executive
(born 12/1/56) Vice President, General Counsel and Secretary
(since April 2004); Hale and Dorr LLP (law
firm), Partner (prior to April 2004)
Stephanie A. DeSisto(3) Assistant Treasurer May 2003 Massachusetts Financial Services Company, Vice
(born 10/01/53) 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)
James F. DesMarais(3) Assistant Secretary and September 2004 Massachusetts Financial Services Company, Assistant
(born 03/09/61) Assistant Clerk General Counsel
Richard M. Hisey(3) Treasurer August 2002 Massachusetts Financial Services Company, Senior
(born 08/29/58) 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)
Brian T. Hourihan(3) Assistant Secretary and September 2004 Massachusetts Financial Services Company, Vice
(born 11/11/64) Assistant Clerk President, Senior Counsel and Assistant
Secretary (since June 2004); Affiliated Managers
Group, Inc., Chief Legal Officer/ Centralized
Compliance Program (January to April 2004);
Fidelity Research & Management Company,
Assistant General Counsel (prior to January
2004)
Ellen Moynihan(3) Assistant Treasurer April 1997 Massachusetts Financial Services Company, Vice
(born 11/13/57) President
Frank L. Tarantino Independent Chief June 2004 Tarantino LLC (provider of compliance services),
(born 03/07/44) Compliance Officer Principal (since June 2004); CRA Business
Strategies Group (consulting services),
Executive Vice President (April 2003 to June
2004); David L. Babson & Co. (investment
adviser), Managing Director, Chief
Administrative Officer and Director (February
1997 to March 2003)
James O. Yost(3) Assistant Treasurer September 1990 Massachusetts Financial Services Company, Senior
(born 06/12/60) 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 the Trust 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 fund, as a result of position with MFS. The
address of MFS is 500 Boylston Street, Boston, Massachusetts 02116.
Each Trustee has been elected by shareholders and 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. Messrs. Ives and Sherratt and Mses. Lane and
Thomsen are members of the Trust's Audit Committee.
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. As of December 31, 2004,
each Trustee served as a board member of 99 funds within the MFS Family of Funds.
The Trust held a shareholders" meeting in 2005, and will hold a shareholder's meeting at least once every five years thereafter,
to elect Trustees.
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 CUSTODIAN
Massachusetts Financial Services State Street Bank and Trust Company
Company 225 Franklin Street, Boston, MA 02110
500 Boylston Street, Boston, MA
02116-3741 INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
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
- -------------------------------------------------------------------------------
PROXY VOTING POLICIES AND INFORMATION
- -------------------------------------------------------------------------------
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 Web site at
http://www.sec. gov.
Information regarding how the fund voted proxies relating to portfolio
securities during the most recent twelve-month period ended June 30 is
available without charge by visiting the Proxy Voting section of mfs.com or by
visiting the SEC's Web site at http://www.sec.gov.
- -------------------------------------------------------------------------------
QUARTERLY PORTFOLIO DISCLOSURE
- -------------------------------------------------------------------------------
The fund will file a complete schedule of portfolio holdings with the
Securities and Exchange Commission (the Commission) for the first and third
quarters of each fiscal year on Form N-Q. The fund's Form N-Q may be reviewed
and copied at the:
Public Reference Room
Securities and Exchange Commission
Washington, D.C. 20549-0102
Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-800-SEC-0330. The fund's Form N-Q is available on
the EDGAR database on the Commission's Internet website at http://www.sec.gov,
and copies of this information may be obtained, upon payment of a duplicating
fee, by electronic request at the following e-mail address: publicinfo@sec.gov
or by writing the Public Reference Section at the above address.
A shareholder can also obtain the quarterly portfolio holdings report at
mfs.com.
- --------------------------------------------------------------------------------
FEDERAL TAX INFORMATION (UNAUDITED)
In January 2006, 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 2005.
Capital gain dividends designated for the year ended March 31, 2005 was as
follows:
CAPITAL GAIN
DIVIDENDS
- -------------------------------------------------------------------------------
Alabama Fund $326,164
California Fund 227,579
Maryland Fund 60,248
Massachusetts Fund 99,947
For the year ended March 31, 2005, the amount of distributions from income
designated as exempt-interest dividends was as follows:
EXEMPT-INTEREST
DIVIDENDS
- -------------------------------------------------------------------------------
Alabama Fund 98.44%
Arkansas Fund 96.53%
California Fund 99.70%
Florida Fund 100.00%
Georgia Fund 100.00%
Maryland Fund 98.97%
Massachusetts Fund 97.73%
- -------------------------------------------------------------------------------
CONTACT INFORMATION
INVESTOR SERVICE
Write to us at: MFS Service Center, Inc.
P.O. Box 55824
Boston, MA 02205-5824
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
- -------------------------------------------------------------------------------
M F S(SM)
INVESTMENT MANAGEMENT(R)
(C) 2005 MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
MST-A-ANN-05/05 31M
MFS(R) MUNICIPAL SERIES TRUST 3/31/05
FOR THE STATES OF: MISSISSIPPI,
NEW YORK, NORTH CAROLINA,
PENNSYLVANIA, SOUTH CAROLINA,
TENNESSEE, VIRGINIA, AND WEST VIRGINIA
ANNUAL REPORT
- -------------------------------------------------------------------------------
M F S(SM)
INVESTMENT MANAGEMENT(R)
THIS REPORT HAS BEEN PREPARED FOR THE GENERAL INFORMATION OF SHAREHOLDERS. IT
IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY WHEN PRECEDED OR
ACCOMPANIED BY A CURRENT PROSPECTUS.
ANNUAL REPORT
LETTER FROM THE CEO 1
-----------------------------------------------
PORTFOLIO COMPOSITION 2
-----------------------------------------------
MANAGEMENT REVIEW 6
-----------------------------------------------
PERFORMANCE SUMMARY 7
-----------------------------------------------
FUND EXPENSE TABLES 17
-----------------------------------------------
PORTFOLIO OF INVESTMENTS 21
-----------------------------------------------
FINANCIAL STATEMENTS 60
-----------------------------------------------
NOTES TO FINANCIAL STATEMENTS 89
-----------------------------------------------
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 104
-----------------------------------------------
RESULTS OF SHAREHOLDER MEETING 105
-----------------------------------------------
TRUSTEES AND OFFICERS 106
-----------------------------------------------
PROXY VOTING POLICIES AND INFORMATION 108
-----------------------------------------------
QUARTERLY PORTFOLIO DISCLOSURE 108
-----------------------------------------------
FEDERAL TAX INFORMATION 108
-----------------------------------------------
CONTACT INFORMATION BACK COVER
-----------------------------------------------
- --------------------------------------------------------------------------------
LETTER FROM THE CEO
- --------------------------------------------------------------------------------
Dear Shareholders,
[Photo of Robert J. Manning]
Last summer and fall, I wrote to you about enhancements that MFS(R) was making
to its investment process. Our goal, as always, was to deliver strong
performance across all asset classes. I am now happy to report to you that 2004
was a very successful year for MFS, relative to our peers in the mutual fund
industry. While there will always be room for improvement, we believe the
enhancements we have made to our investment process resulted in significantly
improved performance across the MFS Family of Funds(R).
You may remember some of the enhancements I outlined last year. They included
o increasing collaboration and information sharing among our investment
personnel across asset classes, through an Investment Management Committee
with members from our Domestic Equity, International Equity, Fixed Income,
and Quantitative Research teams
o increasing the number of analysts supporting our portfolio managers and
doubling the average investment experience of our domestic equity analyst
staff
o making additional use of our most-seasoned portfolio managers to mentor
research analysts
o combining more quantitative, top-down risk control and security analysis
with our traditional bottom-up research process
o opening a research office in Mexico City to complement our existing staff in
Boston, London, Singapore, and Tokyo
The effect of these enhancements, I believe, is evident in the recent
performance of our funds. For the 12 months ended March 31, 2005, 68% of MFS
domestic equity funds, 88% of MFS international equity funds, and 90% of MFS
fixed-income funds delivered results in the top half of their Lipper peer
groups.
Our longer-term performance also benefited from our ongoing commitment to the
MFS Original Research(R) process: 69% of MFS funds were in the top half of
their respective Lipper categories over the 3-, 5-, and 10-year periods ended
March 31, 2005.
Of course, I cannot offer any guarantees that our performance will repeat
itself. Still, I am confident that the recent enhancements to our investment
process will continue to benefit shareholders in 2005 and beyond.
What I can tell you with certainty is that the way you manage your investments
will determine how well you take advantage of the performance that financial
markets deliver. Historically, individual investors have tended to underperform
the markets. For example, a 2003 study by DALBAR, Inc. showed that over the
nearly two decades from 1984 through 2002, the average U.S. stock investor
earned a 2.6% average annual return at a time when U.S. stocks, as measured by
the Standard & Poor's 500 Stock Index, delivered a 12.2% average annual
return.(1)
This huge discrepancy, in our view, occurred because nonprofessional investors
generally did not adhere to the basic principles followed by most professional
investors: allocate among asset classes, diversify within each asset class, and
rebalance one's portfolio on a routine schedule. I elaborated on this "ADR"
theme in fund reports over the last few months of 2004. For more information on
how to apply a Disciplined Diversification(SM) strategy to your portfolio using
the principles of ADR, I would urge you to contact your own investment
professional. You may also want to refer to information on the subject on our
Web site, MFS.COM.
As always, we appreciate your confidence in MFS, and you can be sure of our
continued commitment to do the best we can to help you pursue your long-term
financial goals.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management
May 16, 2005
It is not possible to invest directly in an index.
Lipper rankings and performance are based on historical average annual returns
of Class A shares, and do not include any sales charges. Past performance is no
guarantee of future results.
Asset allocation and diversification cannot guarantee a profit or protect
against a loss.
The opinions expressed in this letter are those of MFS, and no forecasts can be
guaranteed.
(1) Source: DALBAR July 2003 update to its Quantitative Analysis of Investment
Behavior; DALBAR, Inc., is a financial-services market research firm
headquartered in Boston, MA.
- -------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- -------------------------------------------------------------------------------
MFS MISSISSIPPI MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE*
Bonds 97.0%
Cash & Other Net Assets 3.0%
TOP FIVE BOND INDUSTRIES*
Health/Hospitals 19.0%
------------------------------------------------
State & Local Approp. 11.7%
------------------------------------------------
General Obligations/GP 11.2%
------------------------------------------------
Water/Sewer 10.6%
------------------------------------------------
Universities/Colleges 10.6%
------------------------------------------------
CREDIT QUALITY**
AAA 75.5%
------------------------------------------------
AA 5.4%
------------------------------------------------
A 8.1%
------------------------------------------------
BBB 9.2%
------------------------------------------------
Not Rated 1.8%
------------------------------------------------
PORTFOLIO FACTS
Average Duration 6.6
------------------------------------------------
Average Life 15.3 yrs.
------------------------------------------------
Average Maturity*** 16.1 yrs.
------------------------------------------------
Average Credit Quality**** AA+
------------------------------------------------
Average Credit Quality Short-Term Bonds A-1
------------------------------------------------
MFS NEW YORK MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE*
Bonds 97.5%
Cash & Other Net Assets 2.5%
TOP FIVE BOND INDUSTRIES*
Water/Sewer 12.7%
------------------------------------------------
State & Local Approp. 12.0%
------------------------------------------------
Transportation/Spec Tax 10.7%
------------------------------------------------
Toll Roads 9.2%
------------------------------------------------
General Obligations/GP 8.5%
------------------------------------------------
CREDIT QUALITY**
AAA 51.1%
------------------------------------------------
AA1 7.7%
------------------------------------------------
A 15.3%
------------------------------------------------
BBB 6.8%
------------------------------------------------
BB 1.8%
------------------------------------------------
Not Rated 7.3%
------------------------------------------------
PORTFOLIO FACTS
Average Duration 7.1
------------------------------------------------
Average Life 16.0 yrs.
------------------------------------------------
Average Maturity*** 17.5 yrs.
------------------------------------------------
Average Credit Quality**** AA
------------------------------------------------
Average Credit Quality Short-Term Bonds A-1
------------------------------------------------
MFS NORTH CAROLINA MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE*
Bonds 98.0%
Cash & Other Net Assets 2.0%
TOP FIVE BOND INDUSTRIES*
Health/Hospitals 23.5%
------------------------------------------------
Municipal Owned Utilities 14.2%
------------------------------------------------
State & Agency - Other 9.6%
------------------------------------------------
Water/Sewer 8.5%
------------------------------------------------
Universities/Colleges 8.4%
------------------------------------------------
CREDIT QUALITY**
AAA 38.8%
------------------------------------------------
AA 33.8%
------------------------------------------------
A 8.8%
------------------------------------------------
BBB 18.0%
------------------------------------------------
Not Rated 0.6%
------------------------------------------------
PORTFOLIO FACTS
Average Duration 7.4
------------------------------------------------
Average Life 15.1 yrs.
------------------------------------------------
Average Maturity*** 15.7 yrs.
------------------------------------------------
Average Credit Quality**** AA-
------------------------------------------------
Average Credit Quality Short-Term Bonds A-1
------------------------------------------------
MFS PENNSYLVANIA MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE*
Bonds 98.2%
Cash & Other Net Assets 1.8%
TOP FIVE BOND INDUSTRIES*
General Obligations/Schools 25.9%
------------------------------------------------
Health/Hospitals 11.9%
------------------------------------------------
Universities/Colleges 9.9%
------------------------------------------------
Water/Sewer 9.6%
------------------------------------------------
Transportation/Spec Tax 6.3%
------------------------------------------------
CREDIT QUALITY**
AAA 66.6%
------------------------------------------------
AA 13.4%
------------------------------------------------
A 5.5%
------------------------------------------------
BBB 9.7%
------------------------------------------------
BB 0.1%
------------------------------------------------
B 0.5%
------------------------------------------------
CCC 0.5%
------------------------------------------------
Not Rated 3.7%
------------------------------------------------
PORTFOLIO FACTS
Average Duration 7.7
------------------------------------------------
Average Life 18.2 yrs.
------------------------------------------------
Average Maturity*** 18.5 yrs.
------------------------------------------------
Average Credit Quality**** AA
------------------------------------------------
Average Credit Quality Short-Term Bonds A-1
------------------------------------------------
MFS SOUTH CAROLINA MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE*
Bonds 98.9%
Cash & Other Net Assets 1.1%
TOP FIVE BOND INDUSTRIES*
Water/Sewer 20.3%
------------------------------------------------
Health/Hospitals 19.9%
------------------------------------------------
General Obligations/Schools 10.7%
------------------------------------------------
Universities/Colleges 10.2%
------------------------------------------------
Municipal Owned Utilities 9.7%
------------------------------------------------
CREDIT QUALITY**
AAA 73.2%
------------------------------------------------
AA 14.2%
------------------------------------------------
A 6.7%
------------------------------------------------
BBB 3.8%
------------------------------------------------
B 0.6%
------------------------------------------------
Not Rated 1.5%
------------------------------------------------
PORTFOLIO FACTS
Average Duration 7.8
------------------------------------------------
Average Life 16.6 yrs.
------------------------------------------------
Average Maturity*** 17.8 yrs.
------------------------------------------------
Average Credit Quality**** AA+
------------------------------------------------
Average Credit Quality Short-Term Bonds A-1
------------------------------------------------
MFS TENNESSEE MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE*
Bonds 99.1%
Cash & Other Net Assets 0.9%
TOP FIVE BOND INDUSTRIES*
Water/Sewer 18.4%
------------------------------------------------
General Obligations/Schools 15.2%
------------------------------------------------
Health/Hospitals 12.6%
------------------------------------------------
Single Family Housing/State 11.9%
------------------------------------------------
State & Local Approp. 6.9%
------------------------------------------------
CREDIT QUALITY**
AAA 56.2%
------------------------------------------------
AA 28.7%
------------------------------------------------
A 4.9%
------------------------------------------------
BBB 6.7%
------------------------------------------------
BB 0.8%
------------------------------------------------
Not Rated 2.7%
------------------------------------------------
PORTFOLIO FACTS
Average Duration 7.3
------------------------------------------------
Average Life 14.5 yrs.
------------------------------------------------
Average Maturity*** 16.8 yrs.
------------------------------------------------
Average Credit Quality**** AA+
------------------------------------------------
Average Credit Quality Short-Term Bonds A-1
------------------------------------------------
MFS VIRGINIA MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE*
Bonds 98.9%
Cash & Other Net Assets 1.1%
TOP FIVE BOND INDUSTRIES*
State & Local Approp. 21.5%
------------------------------------------------
General Obligations/IMPT 14.5%
------------------------------------------------
Health/Hospitals 13.3%
------------------------------------------------
Water/Sewer 11.1%
------------------------------------------------
Airport 7.9%
------------------------------------------------
CREDIT QUALITY**
AAA 45.6%
------------------------------------------------
AA 27.3%
------------------------------------------------
A 13.4%
------------------------------------------------
BBB 5.7%
------------------------------------------------
BB 1.4%
------------------------------------------------
B 0.6%
------------------------------------------------
CCC 0.6%
------------------------------------------------
Not Rated 5.4%
------------------------------------------------
PORTFOLIO FACTS
Average Duration 7.4
------------------------------------------------
Average Life 14.7 yrs.
------------------------------------------------
Average Maturity*** 15.9 yrs.
------------------------------------------------
Average Credit Quality**** AA
------------------------------------------------
Average Credit Quality Short-Term Bonds A-1
------------------------------------------------
MFS WEST VIRGINIA MUNICIPAL BOND FUND
PORTFOLIO STRUCTURE*
Bonds 97.6%
Cash & Other Net Assets 2.4%
TOP FIVE BOND INDUSTRIES*
General Obligations/GP 21.7%
------------------------------------------------
State & Local Approp. 20.3%
------------------------------------------------
Universities/Colleges 18.3%
------------------------------------------------
Water/Sewer 7.5%
------------------------------------------------
General Obligations/Schools 5.5%
------------------------------------------------
CREDIT QUALITY**
AAA 79.3%
------------------------------------------------
AA 0.1%
------------------------------------------------
A1 0.9%
------------------------------------------------
BBB 7.1%
------------------------------------------------
BB 0.2%
------------------------------------------------
B 0.5%
------------------------------------------------
Not Rated 1.9%
------------------------------------------------
PORTFOLIO FACTS
Average Duration 7.1
------------------------------------------------
Average Life 16.6 yrs.
------------------------------------------------
Average Maturity*** 16.9 yrs.
------------------------------------------------
Average Credit Quality**** AA+
------------------------------------------------
Average Credit Quality Short-Term Bonds A-1
------------------------------------------------
* For purposes of these graphical presentations, the bond components
include both accrued interest amounts and the equivalent exposure from
any derivative holdings, if applicable.
** Each security is assigned a rating from Moody's Investors Service. If not
rated by Moody's, the rating will be that assigned by Standard & Poor's.
Likewise, if not assigned a rating by Standard & Poor's, it will be based
on the rating assigned by Fitch, Inc. If not rated by any of the three
agencies, the security is considered Not Rated. Percentages are based on
the total market value of investments as of 3/31/05.
*** The average maturity shown is calculated using the final stated maturity
on the portfolio's holdings without taking into account any holdings
which have been pre-refunded to an earlier date or which have a mandatory
put date prior to the stated maturity. The average life shown takes into
account these earlier dates.
**** The Portfolio Average Credit Quality rating is based upon a market
weighted average of portfolio holdings.
Percentages are based on net assets as of 3/31/05, unless otherwise noted.
The portfolios are actively managed, and current holdings may be different.
- -------------------------------------------------------------------------------
MANAGEMENT REVIEW
- -------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of each fund is to provide current income exempt from
federal income tax and personal income tax, if any, of the state to which its
name refers. Each fund invests, under normal market conditions, at least 80% of
its net assets in securities and other investments, the interest on which is
exempt from federal income tax and personal income tax, if any, of the state to
which its name refers. A fund may invest in municipal securities, which are
bonds or other debt obligations of a U.S. state or political subdivision, such
as a country, city, town, village, or authority.
MARKET ENVIRONMENT
The U.S. fixed-income market experienced a dramatic flattening of the yield
curve during the 12-month period. (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.) On June 30, 2004, the
U.S. Federal Reserve Board (the Fed) raised its target federal funds rate for
the first time in four years. For the remainder of the period, the Fed
continued a steady drumbeat of quarter-point rate hikes. But while the Fed
seemed committed to a course of gradually raising short-term rates, it appeared
to us that several factors caused long-term rates to stagnate or retreat over
the period.
Job growth, which had shot up in the spring of 2004, faltered; this helped, in
our opinion, to push down yields on longer-dated bonds. Another factor that we
believe held long-term rates down was overseas demand for U.S. Treasuries,
especially from foreign central banks. However, we feel that moderate gross
domestic product (GDP) growth and inflation concerns kept shorter-term interest
rates moving up. For the period as a whole, the net effect was a substantial
flattening of the yield curve as short-term rates rose significantly while
long-term rates were generally flat to down.
FACTORS THAT AFFECTED PERFORMANCE
During the period, our duration positioning in most of the funds was longer
than that of our benchmark, the Lehman Brothers Municipal Bond Index (the
Lehman Index). Duration is a measure of a fund's sensitivity to changes in
interest rates. For all funds - except the Tennessee fund - this longer
duration stance held back relative performance.
Yield curve positioning in all funds - except for the Virginia fund - was a
strong contributor to relative performance. Compared with our benchmark most of
the funds were more heavily weighted in bonds on the long end of the yield
curve - bonds with durations of 11 to 25+ years- and underweighted in bonds on
the short end of the curve. This helped relative results during the period
because long-term municipal rates were relatively unchanged and bonds on the
short end of the curve suffered price declines as their yields increased.
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 or positive for most funds with the exception
of the South Carolina fund.
Sector allocation was neutral or positive overall. Funds for which sector
allocation was a positive factor were generally overweighted in one or more
sectors that outperformed over the period. Our overweighted positions in the
health care and utilities sectors aided relative results for most of the funds.
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.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/05 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 market-value-weighted index representative of the tax-exempt 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. HIGH
SHORT-TERM RETURNS FOR ANY PERIOD MAY BE AND LIKELY WERE ATTRIBUTABLE TO
FAVORABLE MARKET CONDITIONS DURING THAT PERIOD, WHICH MAY NOT BE
REPEATABLE. 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 3/31/05)
MFS Mississippi Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,286 10,838
3/97 10,822 11,429
3/98 12,015 12,653
3/99 12,690 13,438
3/00 12,616 13,427
3/01 13,880 14,893
3/02 14,359 15,461
3/03 15,721 16,990
3/04 16,470 17,986
3/05 16,925 18,465
TOTAL RETURNS
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 8/06/92 2.76% 5.63% 6.05% 5.92%
- ------------------------------------------------------------------------------
B 9/07/93 2.08% 4.81% 5.22% 5.08%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average other state municipal
debt fund+ 1.82% 4.68% 5.31% 5.07%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -2.12% 3.93% 5.03% 5.40%
- ------------------------------------------------------------------------------
B -1.85% 3.89% 4.90% 5.08%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 2.76% 17.87% 34.16% 77.69%
- ------------------------------------------------------------------------------
B 2.08% 15.15% 28.99% 64.12%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc., an independent firm that reports mutual fund performance.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) NEW YORK MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS New York Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,189 10,838
3/97 10,666 11,429
3/98 11,903 12,653
3/99 12,514 13,438
3/00 12,382 13,427
3/01 13,713 14,893
3/02 14,147 15,461
3/03 15,569 16,990
3/04 16,332 17,986
3/05 16,733 18,465
Total Returns
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 6/06/88 2.45% 5.75% 6.21% 5.80%
- ------------------------------------------------------------------------------
B 9/07/93 1.77% 4.91% 5.38% 4.97%
- ------------------------------------------------------------------------------
C 12/11/00 1.78% 4.97% 5.40% 4.98%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average New York municipal
debt fund+ 2.07% 5.24% 5.83% 5.49%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -2.41% 4.05% 5.18% 5.28%
- ------------------------------------------------------------------------------
B -2.15% 3.99% 5.06% 4.97%
- ------------------------------------------------------------------------------
C 0.79% 4.97% 5.40% 4.98%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A
2.45% 18.28% 35.14% 75.67%
- ------------------------------------------------------------------------------
B
1.77% 15.46% 29.97% 62.44%
- ------------------------------------------------------------------------------
C
1.78% 15.66% 30.06% 62.55%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) NORTH CAROLINA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS North Carolina Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,150 10,838
3/97 10,666 11,429
3/98 11,771 12,653
3/99 12,331 13,438
3/00 12,125 13,427
3/01 13,362 14,893
3/02 13,774 15,461
3/03 15,111 16,990
3/04 15,868 17,986
3/05 16,209 18,465
Total Returns
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
A 10/31/84 2.15% 5.58% 5.98% 5.46%
- ------------------------------------------------------------------------------
B 9/07/93 1.49% 4.90% 5.28% 4.76%
- ------------------------------------------------------------------------------
C 1/03/94 1.49% 4.90% 5.28% 4.78%
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average North Carolina municipal
debt fund+ 1.54% 5.02% 5.58% 5.20%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -2.70% 3.88% 4.95% 4.95%
- ------------------------------------------------------------------------------
B -2.41% 3.98% 4.95% 4.76%
- ------------------------------------------------------------------------------
C 0.51% 4.90% 5.28% 4.78%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 2.15% 17.68% 33.68% 70.17%
- ------------------------------------------------------------------------------
B 1.49% 15.42% 29.32% 59.19%
- ------------------------------------------------------------------------------
C 1.49% 15.42% 29.32% 59.53%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) PENNSYLVANIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS Pennsylvania Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,177 10,838
3/97 10,652 11,429
3/98 11,894 12,653
3/99 12,589 13,438
3/00 12,533 13,427
3/01 13,893 14,893
3/02 14,427 15,461
3/03 15,887 16,990
3/04 16,699 17,986
3/05 17,195 18,465
Total Returns
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 2/01/93 2.97% 6.03% 6.53% 6.08%
- ------------------------------------------------------------------------------
B 9/07/93 2.19% 5.22% 5.69% 5.27%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average Pennsylvania municipal
debt fund+ 2.19% 5.29% 5.72% 5.33%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -1.92% 4.32% 5.50% 5.57%
- ------------------------------------------------------------------------------
B -1.76% 4.31% 5.37% 5.27%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 2.97% 19.19% 37.20% 80.52%
- ------------------------------------------------------------------------------
B 2.19% 16.48% 31.86% 67.05%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) SOUTH CAROLINA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS South Carolina Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,155 10,838
3/97 10,566 11,429
3/98 11,688 12,653
3/99 12,193 13,438
3/00 11,917 13,427
3/01 13,139 14,893
3/02 13,623 15,461
3/03 14,919 16,990
3/04 15,710 17,986
3/05 16,106 18,465
Total Returns
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 10/31/84 2.52% 5.74% 6.21% 5.39%
- ------------------------------------------------------------------------------
B 9/07/93 1.94% 5.09% 5.52% 4.70%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average South Carolina municipal
debt fund+ 2.29% 5.25% 5.80% 5.35%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -2.35% 4.04% 5.18% 4.88%
- ------------------------------------------------------------------------------
B -1.98% 4.17% 5.20% 4.70%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 2.52% 18.22% 35.15% 69.09%
- ------------------------------------------------------------------------------
B 1.94% 16.05% 30.85% 58.30%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) TENNESSEE MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS Tennessee Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,159 10,838
3/97 10,614 11,429
3/98 11,794 12,653
3/99 12,360 13,438
3/00 12,144 13,427
3/01 13,342 14,893
3/02 13,790 15,461
3/03 15,078 16,990
3/04 15,802 17,986
3/05 16,201 18,465
Total Returns
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 8/12/88 2.53% 5.52% 5.94% 5.46%
- ------------------------------------------------------------------------------
B 9/07/93 1.87% 4.84% 5.25% 4.76%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average Tennessee municipal
debt fund+ 1.81% 5.16% 5.60% 5.46%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -2.34% 3.82% 4.91% 4.94%
- ------------------------------------------------------------------------------
B -2.04% 3.92% 4.93% 4.76%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 2.53% 17.48% 33.42% 70.09%
- ------------------------------------------------------------------------------
B 1.87% 15.23% 29.18% 59.27%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) VIRGINIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS Virginia Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,146 10,838
3/97 10,549 11,429
3/98 11,637 12,653
3/99 12,186 13,438
3/00 12,053 13,427
3/01 13,204 14,893
3/02 13,583 15,461
3/03 14,819 16,990
3/04 15,663 17,986
3/05 16,106 18,465
Total Returns
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 10/31/84 2.83% 5.84% 5.97% 5.39%
- ------------------------------------------------------------------------------
B 9/07/93 2.16% 5.16% 5.27% 4.70%
- ------------------------------------------------------------------------------
C 1/03/94 2.25% 5.19% 5.29% 4.73%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average Virginia municipal
debt fund+ 1.87% 5.04% 5.55% 5.41%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -2.06% 4.14% 4.94% 4.88%
- ------------------------------------------------------------------------------
B -1.77% 4.25% 4.94% 4.70%
- ------------------------------------------------------------------------------
C 1.27% 5.19% 5.29% 4.73%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 2.83% 18.58% 33.63% 69.10%
- ------------------------------------------------------------------------------
B 2.16% 16.30% 29.28% 58.34%
- ------------------------------------------------------------------------------
C 2.25% 16.40% 29.37% 58.78%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/05 MFS(R) WEST VIRGINIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended 3/31/05)
MFS West Virginia Lehman Brothers
Municipal Bond Municipal Bond
Fund -- Class A Index
3/95 $ 9,525 $10,000
3/96 10,152 10,838
3/97 10,680 11,429
3/98 11,686 12,653
3/99 12,239 13,438
3/00 12,008 13,427
3/01 13,213 14,893
3/02 13,714 15,461
3/03 14,954 16,990
3/04 15,678 17,986
3/05 16,035 18,465
Total Returns
- ------------------------
Average annual
without sales charge
- ------------------------
Share class Inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 10/31/84 2.28% 5.35% 5.96% 5.35%
- ------------------------------------------------------------------------------
B 9/07/93 1.62% 4.70% 5.29% 4.65%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
- ------------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average other state municipal
debt fund+ 1.82% 4.68% 5.31% 5.07%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- ------------------------
Average annual
with sales charge
- ------------------------
Share class
- ------------------------------------------------------------------------------
A -2.58% 3.66% 4.93% 4.84%
- ------------------------------------------------------------------------------
B -2.30% 3.78% 4.96% 4.65%
- ------------------------------------------------------------------------------
- ------------------------
Cumulative without
sales charge
- ------------------------
- ------------------------------------------------------------------------------
A 2.28% 16.93% 33.54% 68.35%
- ------------------------------------------------------------------------------
B 1.62% 14.77% 29.40% 57.60%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc.
# Source: Standard & Poor's Micropal, Inc.
- -------------------------------------------------------------------------------
NOTES TO PERFORMANCE SUMMARY AND KEY RISK CONSIDERATIONS
- -------------------------------------------------------------------------------
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%. For the fund(s) that offer(s) Class C
shares, Class C results including sales charge (assuming redemption within one
year from the end of the prior month of purchase) reflect the deduction of the
1% CDSC.
For New York fund only. Performance for Class C shares includes the performance
of the fund's Class B shares prior to their offering. This blended class
performance has been adjusted to take into account differences in sales loads,
if any, applicable to Class C shares, but has not been adjusted to take into
account differences in class specific operating expenses (such as Rule 12b-1
fees). Compared to performance Class C shares would have experienced had they
been offered for the entire period, the use of blended performance generally
results in higher performance for Class C shares.
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
As with any fixed income security, the prices of municipal securities in each
fund's portfolio will generally fall when interest rates rise. Conversely, when
interest rates fall, the prices of municipal securities in a fund's portfolio
will generally rise.
Interest rate risk will generally affect the price of a municipal security more
if the security has a longer maturity. Municipal securities with longer
maturities will therefore be more volatile than other fixed income securities
with shorter maturities. Conversely, municipal securities with shorter
maturities will be less volatile but generally provide lower returns than
municipal securities with longer maturities. The average maturity of each
fund's municipal security investments will affect the volatility of the fund's
share price.
Credit risk is the risk that the issuer of a municipal security will not be
able to pay principal and interest when due. Rating agencies assign credit
ratings to certain municipal securities to indicate their credit risk. The
price of a municipal security will generally fall if the issuer defaults on its
obligation to pay principal or interest, the rating agencies downgrade the
issuer's credit rating or other news affects the market's perception of the
issuer's credit risk. A participation interest is also subject to the risk of
default by the issuing bank.
Each fund may invest in municipal bonds that are general obligations backed by
the full faith and credit of the municipal issuer. Each fund may also invest in
municipal bonds called revenue obligations which are subject to a higher degree
of credit risk than general obligations. Revenue obligations finance specific
projects (such as building a hospital or toll roads, water and sewer projects,
etc.), and are not backed by the full faith and credit of the municipal issuer.
Each fund may invest in excess of 25% of its assets in revenue bonds relating
to any one specific industry (e.g., housing, healthcare, water and sewer,
etc.). Because revenue obligations are repaid from the revenues from a
facility, they are subject to a risk of default in payments of principal and
interest if the facility does not generate enough income. 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 project or assets or the inability to collect revenues from 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 significantly in value.
Because the portfolio invests at least 80% of its assets in securities of the
named state, it is more susceptible to adverse economic, political or
regulatory developments affecting that state than is a portfolio that invests
more broadly.
Because a fund may invest its assets in a small number of issuers, the fund is
more susceptible to any single economic, political or regulatory event
affecting those issuers than is a diversified fund.
Speculative bonds are subject to a higher risk that the issuer will default on
payments of principal and interest than higher rated investment grade bonds.
Although the issuer's ability to make interest and principal payments appears
adequate, an adverse change in economic conditions or other circumstances is
more likely to cause a default by the issuer of a speculative bond than the
issuer of a higher rated investment grade bond.
The fixed income securities purchased by each fund may be traded in the over-
the-counter market rather than on an organized exchange and are subject to
liquidity risk. This means that they may be harder to purchase or sell at a
fair price. The inability to purchase or sell these fixed income securities at
a fair price could have a negative impact on a fund's performance.
The portfolio may invest in high yield or lower-rated securities (non-rated,
below "BBB"), which may provide greater returns but are subject to greater-
than-average risk.
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 you are not a resident of the state to which the portfolio is targeted, the
state tax exemption will not apply.
Please see the prospectus for further information regarding these and other
risk considerations.
- -------------------------------------------------------------------------------
FUND EXPENSE TABLES
- -------------------------------------------------------------------------------
FUND EXPENSES BORNE BY THE SHAREHOLDERS DURING THE PERIOD,
OCTOBER 1, 2004 THROUGH MARCH 31, 2005
As a shareholder of the fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on certain purchase or redemption
payments and redemption fees on certain exchanges and redemptions, and (2)
ongoing costs, including management fees; distribution and service (12b-1)
fees; and other fund expenses. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the fund and to compare these
costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period October 1, 2004 through March 31,
2005.
ACTUAL EXPENSES
The first line for each share class in the tables below provides information
about actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the first line under the heading entitled "Expenses
Paid During Period" to estimate the expenses you paid on your account during
this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line for each share class in the tables below provides information
about hypothetical account values and hypothetical expenses based on the fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expenses you paid for the period. You may use this information to
compare the ongoing costs of investing in the fund and other funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption fees. Therefore, the second line for each share
class in the tables is useful in comparing ongoing costs only, and will not
help you determine the relative total costs of owning different funds. In
addition, if these transactional costs were included, your costs would have
been higher.
MFS(R) MISSISSIPPI MUNICIPAL BOND FUND
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- -------------------------------------------------------------------------------
Actual 0.60% $1,000 $1,014 $3.01
A -----------------------------------------------------------------------
Hypothetical* 0.60% $1,000 $1,022 $3.02
- -------------------------------------------------------------------------------
Actual 1.37% $1,000 $1,011 $6.87
B ------------------------------------------------------------------------
Hypothetical* 1.37% $1,000 $1,018 $6.89
- -------------------------------------------------------------------------------
MFS(R) NEW YORK MUNICIPAL BOND FUND
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- -------------------------------------------------------------------------------
Actual 0.79% $1,000 $1,010 $3.96
A -----------------------------------------------------------------------
Hypothetical* 0.79% $1,000 $1,021 $3.98
- -------------------------------------------------------------------------------
Actual 1.54% $1,000 $1,006 $7.70
B ------------------------------------------------------------------------
Hypothetical* 1.54% $1,000 $1,017 $7.74
- -------------------------------------------------------------------------------
Actual 1.54% $1,000 $1,007 $7.71
C -----------------------------------------------------------------------
Hypothetical* 1.54% $1,000 $1,017 $7.74
- -------------------------------------------------------------------------------
MFS(R) NORTH CAROLINA MUNICIPAL BOND FUND
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- -------------------------------------------------------------------------------
Actual 0.88% $1,000 $1,009 $4.41
A -----------------------------------------------------------------------
Hypothetical* 0.88% $1,000 $1,021 $4.43
- -------------------------------------------------------------------------------
Actual 1.53% $1,000 $1,006 $7.65
B ------------------------------------------------------------------------
Hypothetical* 1.53% $1,000 $1,017 $7.69
- -------------------------------------------------------------------------------
Actual 1.53% $1,000 $1,005 $7.65
C -----------------------------------------------------------------------
Hypothetical* 1.53% $1,000 $1,017 $7.69
- -------------------------------------------------------------------------------
MFS(R) PENNSYLVANIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- -------------------------------------------------------------------------------
Actual 0.60% $1,000 $1,016 $3.02
A -----------------------------------------------------------------------
Hypothetical* 0.60% $1,000 $1,022 $3.02
- -------------------------------------------------------------------------------
Actual 1.36% $1,000 $1,013 $6.83
B ------------------------------------------------------------------------
Hypothetical* 1.36% $1,000 $1,018 $6.84
- -------------------------------------------------------------------------------
MFS(R) SOUTH CAROLINA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- -------------------------------------------------------------------------------
Actual 0.93% $1,000 $1,015 $4.67
A -----------------------------------------------------------------------
Hypothetical* 0.93% $1,000 $1,020 $4.68
- -------------------------------------------------------------------------------
Actual 1.57% $1,000 $1,013 $7.88
B ------------------------------------------------------------------------
Hypothetical* 1.57% $1,000 $1,017 $7.90
- -------------------------------------------------------------------------------
MFS(R) TENNESSEE MUNICIPAL BOND FUND
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- -------------------------------------------------------------------------------
Actual 0.91% $1,000 $1,010 $4.56
A -----------------------------------------------------------------------
Hypothetical* 0.91% $1,000 $1,020 $4.58
- -------------------------------------------------------------------------------
Actual 1.56% $1,000 $1,007 $7.81
B ------------------------------------------------------------------------
Hypothetical* 1.56% $1,000 $1,017 $7.84
- -------------------------------------------------------------------------------
MFS(R) VIRGINIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- -------------------------------------------------------------------------------
Actual 0.86% $1,000 $1,014 $4.32
A -----------------------------------------------------------------------
Hypothetical* 0.86% $1,000 $1,021 $4.33
- -------------------------------------------------------------------------------
Actual 1.51% $1,000 $1,010 $7.57
B ------------------------------------------------------------------------
Hypothetical* 1.51% $1,000 $1,017 $7.59
- -------------------------------------------------------------------------------
Actual 1.51% $1,000 $1,011 $7.57
C -----------------------------------------------------------------------
Hypothetical* 1.51% $1,000 $1,017 $7.59
- -------------------------------------------------------------------------------
MFS(R) WEST VIRGINIA MUNICIPAL BOND FUND
- --------------
Share Class
- --------------
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Expense Account Value Account Value 10/01/04-
Ratio 10/01/04 3/31/05 3/31/05
- -------------------------------------------------------------------------------
Actual 0.90% $1,000 $1,011 $4.51
A -----------------------------------------------------------------------
Hypothetical* 0.90% $1,000 $1,020 $4.53
- -------------------------------------------------------------------------------
Actual 1.55% $1,000 $1,009 $7.76
B ------------------------------------------------------------------------
Hypothetical* 1.55% $1,000 $1,017 $7.79
- -------------------------------------------------------------------------------
* 5% class return per year before expenses.
** Expenses paid is equal to each class" annualized expense ratio for the most
recent six month period, as shown above, multiplied by the average account
value over the period, multiplied by the number of days in the period,
divided by the number of days in the year. Expenses paid do not include any
applicable sales charges (loads) or redemption fees. If these transaction
costs had been included, your costs would have been higher.
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 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 - 95.5%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations - General
Purpose - 11.1% Commonwealth of Puerto Rico, ROLS, FGIC, 8.633%, 2016+(+) $3,110,000 $4,018,742
- -------------------------------------------------------------------------------------------------------------------------------
Hinds County, MS, MBIA, 6.25%, 2010 1,660,000 1,870,438
- -------------------------------------------------------------------------------------------------------------------------------
Hinds County, MS, MBIA, 6.25%, 2011 1,285,000 1,467,598
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Jackson,
Mississippi) FSA, 5.25%, 2018 600,000 662,250
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Jackson,
Mississippi) FSA, 5.25%, 2019 1,260,000 1,392,615
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Jackson,
Mississippi) FSA, 5.25%, 2020 620,000 685,019
- -------------------------------------------------------------------------------------------------------------------------------
$10,096,662
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 5.5% Puerto Rico Municipal Finance Agency, RITES, FSA, 8.129%, 2017+(+) $750,000 $883,485
- -------------------------------------------------------------------------------------------------------------------------------
State of Mississippi, Capital Improvement, 5.25%, 2010(++) 2,000,000 2,185,260
- -------------------------------------------------------------------------------------------------------------------------------
State of Mississippi, Capital Improvement, 5.5%, 2010(++) 750,000 828,915
- -------------------------------------------------------------------------------------------------------------------------------
State of Mississippi, Capital Improvement, "I", 6%, 2009(++) 1,000,000 1,115,940
- -------------------------------------------------------------------------------------------------------------------------------
$5,013,600
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 5.5% Biloxi, MS, Public School District, MBIA, 5%, 2021 $1,000,000 $1,036,610
- -------------------------------------------------------------------------------------------------------------------------------
Jackson, MS, Public School District, "B", AMBAC, 5.75%, 2010(++) 1,000,000 1,105,690
- -------------------------------------------------------------------------------------------------------------------------------
Jackson, MS, Public School District, "B", AMBAC, 0%, 2022 2,000,000 807,880
- -------------------------------------------------------------------------------------------------------------------------------
Jackson, MS, Public School District, "B", AMBAC, 0%, 2023 1,000,000 377,840
- -------------------------------------------------------------------------------------------------------------------------------
Madison County, MS, School District, "A", MBIA, 5.875%, 2016 1,500,000 1,664,265
- -------------------------------------------------------------------------------------------------------------------------------
$4,992,285
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Alcorn County, MS, Corinth Hospital Rev. (Magnolia Regional Health
Hospitals - 18.6% Center), AMBAC, 5.75%, 2013 $1,000,000 $1,035,000
- -------------------------------------------------------------------------------------------------------------------------------
Corinth & Alcorn County, MS, Hospital Rev. (Magnolia Regional Health
Center), 5.5%, 2021 400,000 401,208
- -------------------------------------------------------------------------------------------------------------------------------
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital),
5.75%, 2031 1,000,000 1,042,950
- -------------------------------------------------------------------------------------------------------------------------------
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital) MBIA,
6.125%, 2015 2,250,000 2,296,507
- -------------------------------------------------------------------------------------------------------------------------------
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital) MBIA,
6.2%, 2018 1,000,000 1,020,850
- -------------------------------------------------------------------------------------------------------------------------------
Hinds County, MS, Rev. (Methodist Hospital & Rehabilitation) AMBAC,
5.6%, 2012 2,335,000 2,491,959
- -------------------------------------------------------------------------------------------------------------------------------
Jones County, MS, Hospital Rev. (South Central Regional Medical
Center), 5.5%, 2017 1,000,000 1,025,960
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Adams County
Hospital) FSA, 5.75%, 2016 1,000,000 1,043,160
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist
Medical Center) MBIA, 6.5%, 2010 1,190,000 1,217,120
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist
Medical Center) MBIA, 6%, 2013 750,000 766,823
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist
Memorial Heathcare), "B-1", 5%, 2024 1,000,000 1,007,420
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Authority Rev. (Forrest
County General Hospital) FSA, 5.625%, 2020 1,000,000 1,087,270
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Authority Rev., Refunding
& Improvement, Southwest Regional Medical Center, 5.5%, 2019 250,000 260,430
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Authoruty, Refunding &
Improvement, Southwest Regional Medical Center, 5.75%, 2023 250,000 260,500
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Rev. (Rush Medical
Foundation) CONNIE LEE, 6.7%, 2018 2,000,000 2,008,660
- -------------------------------------------------------------------------------------------------------------------------------
$16,965,817
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Virgin Islands Public Finance Authority, Refinery Facilities Rev.
Other - 0.3% (Hovensa Refinery), 5.875%, 2022 $210,000 $222,600
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Jones County, MS, Solid Waste Disposal Rev. (International Paper Co.)
Paper - 4.1% "A", 5.8%, 2021 $500,000 $512,875
- -------------------------------------------------------------------------------------------------------------------------------
Lowndes County, MS, Solid Waste Disposal & Pollution Control Rev.
(Weyerhaeuser Co.), 6.8%, 2022 1,250,000 1,499,112
- -------------------------------------------------------------------------------------------------------------------------------
Warren County, MS, Environmental Improvement Rev. (International
Paper Co.),"A", 4.4%, 2015 750,000 732,893
- -------------------------------------------------------------------------------------------------------------------------------
Warren County, MS, Solid Waste Disposal (International Paper Co.),
"A", 6.6%, 2019 1,000,000 1,021,150
- -------------------------------------------------------------------------------------------------------------------------------
$3,766,030
- -------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment & Mississippi Development Bank, Special Obligation (Diamond Lakes
Tourism - 1.4% Utilities), 6.25%, 2017 $1,250,000 $1,280,687
- -------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Gulfport, MS, Community Development Urban Renewal Rev. (Oakview
Revenue - 2.1% Apartments) FNMA, 7.4%, 2025 $1,755,000 $1,755,632
- -------------------------------------------------------------------------------------------------------------------------------
Ridgeland, MS, Urban Renewal (Northbrook I & II Apartments),
2.5%, 2019** 300,000 144,000
- -------------------------------------------------------------------------------------------------------------------------------
$1,899,632
- -------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Mississippi Home Corp. Rev., Single Family Rev, "B-2", GNMA,
State - 8.3% 6.375%, 2032 $725,000 $777,186
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "A", GNMA,
6.3%, 2031 240,000 252,060
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "A-2", GNMA,
5.3%, 2023 930,000 923,397
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "A-2", GNMA,
6.95%, 2031 480,000 511,085
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "A-2", GNMA,
6.5%, 2032 425,000 447,109
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "B", 5.3%, 2035 935,000 952,475
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "B", GNMA,
6.625%, 2027 430,000 439,335
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "B-2", GNMA,
6.45%, 2033 855,000 928,889
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "C", GNMA,
4.95%, 2025 1,000,000 1,001,330
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., "F", GNMA,
7.55%, 2027 234,000 239,576
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Home Corp. Rev., Single Family Rev., GNMA, 6.5%, 2024 1,090,000 1,097,794
- -------------------------------------------------------------------------------------------------------------------------------
$7,570,236
- -------------------------------------------------------------------------------------------------------------------------------
State & Local
Agencies - 11.5% Lamar County, MS, (Jail Project) MBIA, 5.1%, 2021 $430,000 $450,051
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Correctional
Facilities), "A", AMBAC, 5.125%, 2025 1,000,000 1,048,250
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Mississippi, Ltd.
Tax Hospital Rev.), 5.1%, 2020 1,000,000 1,040,160
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Natchez Mississippi
Convention Center) AMBAC, 6%, 2021 750,000 839,017
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Public Improvement
Board), 5%, 2023 750,000 740,993
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Southaven, MS,
Recreation Facilities), 5.875%, 2014 375,000 404,250
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Southaven, MS,
Recreation Facilities), 6.2%, 2020 400,000 444,336
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Tunica County
Highway Construction Project), FGIC, 5%, 2024 1,000,000 1,044,630
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Tunica County
Highway Construction Project), FGIC, 5%, 2025 1,000,000 1,041,410
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Tupelo
Fairgrounds), "A", AMBAC, 5%, 2017 785,000 819,540
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2013+(+) 500,000 620,180
- -------------------------------------------------------------------------------------------------------------------------------
Walnut Grove, MS, Correctional Authority, AMBAC, 6%, 2009(++) 1,750,000 1,979,093
- -------------------------------------------------------------------------------------------------------------------------------
$10,471,910
- -------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.2% Virgin Islands Public Finance Authority Rev., "A", 5.25%, 2024 $135,000 $141,473
- -------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.6% Childrens Trust Fund, Settlement Rev., PR, 5.375%, 2033 $240,000 $240,881
- -------------------------------------------------------------------------------------------------------------------------------
Guam Economic Development Authority, Tobacco Settlement, "B",
5.5%, 2041 350,000 336,801
- -------------------------------------------------------------------------------------------------------------------------------
$577,682
- -------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Mississippi Development Bank Special Obligations, Madison County
Tax - 1.4% (Road & Bridge) AMBAC, 5.1%, 2019 $1,175,000 $1,243,996
- -------------------------------------------------------------------------------------------------------------------------------
Universities - Jackson State University, Educational Building Corp. Rev., (Campus
Colleges - 10.4% Facilities), "A", FGIC, 5%, 2029 $3,100,000 $3,181,282
- -------------------------------------------------------------------------------------------------------------------------------
Jackson State University, Educational Building Corp. Rev., (Student
Recreation Center), AMBAC, 5.125%, 2027 750,000 778,102
- -------------------------------------------------------------------------------------------------------------------------------
Medical Center, Educational Building Corp. Rev. (University of
Mississippi Medical Center), "B", AMBAC, 5.5%, 2023 1,000,000 1,134,820
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi State University Educational Building Corp. Rev.
(Athletic Facilities), "A", 6.2%, 2006(++) 1,000,000 1,059,500
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi State University Educational Building Corp. Rev., AMBAC,
5.5%, 2016 1,000,000 1,087,660
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi State University Educational Building Corp. Rev., AMBAC,
5%, 2021 250,000 259,583
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Valley State University, Educational Building Corp.,
MBIA, 5.5%, 2021 890,000 958,575
- -------------------------------------------------------------------------------------------------------------------------------
University of Mississippi, Educational Building Corp. (Performing
Arts Center) AMBAC, 5.25%, 2018 1,000,000 1,050,320
- -------------------------------------------------------------------------------------------------------------------------------
$9,509,842
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 4.0% Guam Power Authority Rev., RITES, AMBAC, 7.577%, 2013+(+) $1,000,000 $1,171,000
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Okolona Electric
System), 5.2%, 2016 1,010,000 1,071,115
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., "II", 5.25%, 2031 875,000 917,245
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., "RR", XLCA, 5%, 2030 500,000 519,465
- -------------------------------------------------------------------------------------------------------------------------------
$3,678,825
- -------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 10.5% Jackson, MS, Water & Sewer Systems Rev., FGIC, 5.25%, 2017 $420,000 $442,907
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Combined Water
Sewer & Solid Waste Management) FSA, 5.25%, 2021 1,270,000 1,376,997
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Combined Water
Sewer & Solid Waste Management) FSA, 5.05%, 2027 1,610,000 1,689,582
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Gulfport Water &
Sewer Project) FSA, 5.625%, 2012(++) 500,000 552,770
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Gulfport Water &
Sewer Project), "A", FGIC, 5.25%, 2012(++) 2,000,000 2,100,480
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Jackson Water &
Sewer System Project) FSA, 5%, 2029 2,000,000 2,063,520
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Jackson Water &
Sewer System Project), FGIC, 5%, 2032 250,000 256,363
- -------------------------------------------------------------------------------------------------------------------------------
Mississippi Development Bank Special Obligations (Wastewater & Solid
Waste Management), "A", FSA, 5.375%, 2017 1,000,000 1,085,220
- -------------------------------------------------------------------------------------------------------------------------------
$9,567,839
- -------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $82,712,076) $86,999,116
- -------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 3.9%
- -------------------------------------------------------------------------------------------------------------------------------
Jackson County, MS, Pollution Control Rev. (Chevron USA, Inc.),
2.28%, due 4/01/05 $855,000 $855,000
- -------------------------------------------------------------------------------------------------------------------------------
Jackson County, MS, Pollution Control Rev. (Chevron USA, Inc.),
2.28%, due 4/01/05 1,000,000 1,000,000
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, "A-4", 2.28%, due 4/01/05 1,500,000 1,500,000
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
2.28%, due 4/01/05 200,000 200,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $3,555,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $86,267,076) $90,554,116
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.6% 563,741
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $91,117,857
- -------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 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 - 95.9%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- -------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 2.6% Port Authority NY & NJ, (120th Series) MBIA, 5.5%, 2018 $1,500,000 $1,591,695
- -------------------------------------------------------------------------------------------------------------------------------
Port Authority NY & NJ, (132nd Series), 5%, 2033 2,000,000 2,060,480
- -------------------------------------------------------------------------------------------------------------------------------
Port Authority NY & NJ, Special Obligation Rev. (JFK International),
MBIA, 6.25%, 2015 1,000,000 1,130,480
- -------------------------------------------------------------------------------------------------------------------------------
$4,782,655
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations - General
Purpose - 8.4% Commonwealth of Puerto Rico, ROLS, XLCA, 8.543%, 2017+(+) $1,350,000 $1,726,947
- -------------------------------------------------------------------------------------------------------------------------------
Nassua County, NY, Health Systems Rev. (Nassua County), FSA,
6%, 2009(++) 1,000,000 1,130,010
- -------------------------------------------------------------------------------------------------------------------------------
New York, NY, "D", 5%, 2028 2,000,000 2,048,860
- -------------------------------------------------------------------------------------------------------------------------------
New York, NY, "J", 5%, 2030 2,500,000 2,556,750
- -------------------------------------------------------------------------------------------------------------------------------
New York, NY, "A", 6%, 2010(++) 640,000 725,082
- -------------------------------------------------------------------------------------------------------------------------------
New York, NY, "B", 5.375%, 2017 1,250,000 1,341,713
- -------------------------------------------------------------------------------------------------------------------------------
New York, NY, "C-1", 5.25%, 2025 1,000,000 1,048,930
- -------------------------------------------------------------------------------------------------------------------------------
New York, NY, "G", 5%, 2028 2,000,000 2,049,140
- -------------------------------------------------------------------------------------------------------------------------------
New York, NY, "J", FGIC, 5.5%, 2026 2,100,000 2,179,128
- -------------------------------------------------------------------------------------------------------------------------------
New York, NY, Unrefunded, "A", 6%, 2019 360,000 400,496
- -------------------------------------------------------------------------------------------------------------------------------
$15,207,056
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 0.1% Erie County, NY, Public Improvement, "A", FGIC, 5%, 2019 $140,000 $147,767
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations - Genesee Valley, NY, Central School District (Angelica Belmont), FGIC,
Schools - 5.2% 5.25%, 2028 $1,720,000 $1,843,788
- -------------------------------------------------------------------------------------------------------------------------------
North Babylon, NY, Union Free School District, "A", FGIC, 5.5%, 2018 2,415,000 2,617,884
- -------------------------------------------------------------------------------------------------------------------------------
Port Byron, NY, Central School District, AMBAC, ETM, 7.4%, 2012(++) 500,000 619,805
- -------------------------------------------------------------------------------------------------------------------------------
Port Byron, NY, Central School District, AMBAC, ETM, 7.4%, 2013(++) 500,000 629,710
- -------------------------------------------------------------------------------------------------------------------------------
Port Byron, NY, Central School District, AMBAC, ETM, 7.4%, 2014(++) 500,000 637,650
- -------------------------------------------------------------------------------------------------------------------------------
Port Byron, NY, Central School District, AMBAC, ETM, 7.4%, 2015(++) 500,000 645,030
- -------------------------------------------------------------------------------------------------------------------------------
Rome, NY, City School District, FSA, 5.5%, 2019 1,000,000 1,080,690
- -------------------------------------------------------------------------------------------------------------------------------
Washingtonville, NY, Central School Central District, FGIC,
7.35%, 2008 550,000 619,999
- -------------------------------------------------------------------------------------------------------------------------------
Washingtonville, NY, Central School Central District, FGIC,
7.35%, 2009 550,000 634,920
- -------------------------------------------------------------------------------------------------------------------------------
$9,329,476
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Chautauqua County, NY, Industrial Development Agency, Civic
Hospitals - 5.6% Facilities Rev. (Women's Christian Assn.), "A", 6.35%, 2017 $170,000 $171,569
- -------------------------------------------------------------------------------------------------------------------------------
Chautauqua County, NY, Industrial Development Agency, Civic
Facilities Rev. (Women's Christian Assn.), "A", 6.4%, 2029 490,000 483,762
- -------------------------------------------------------------------------------------------------------------------------------
Chemung County, NY, Industrial Development Agency, Civic Facilities
Rev. (Arnot Ogden Medical Center), 5%, 2029 750,000 746,820
- -------------------------------------------------------------------------------------------------------------------------------
Chemung County, NY, Industrial Development Agency, Civic Facilities
Rev. (Arnot Ogden Medical Center), 5%, 2029 1,000,000 995,760
- -------------------------------------------------------------------------------------------------------------------------------
Fulton County, NY, Industrial Development Agency, Civic Facilities
Rev. (Nathan Littauer Hospital), 5.75%, 2009 750,000 743,932
- -------------------------------------------------------------------------------------------------------------------------------
Nassau County, NY, Industrial Development Agency, Civic Facilities
Rev. (North Shore Health Systems), 5.625%, 2010 500,000 535,310
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Industrial Development Agency, Civic Facilities
Rev. (Staten Island University Hospital), 6.375%, 2031 500,000 490,865
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Health & Hospital Corp. Rev., 5.25%, 2017 760,000 789,298
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev. (Montefiore Medical Center), AMBAC,
5.25%, 2019 850,000 902,386
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev. (North Shore Long Island Jewish
Group), 5.5%, 2033 250,000 261,928
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev. (St. Vincent's Hospital), FHA,
7.375%, 2011 900,000 903,897
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev. (White Plains Hospital), FHA,
5.375%, 2043 1,500,000 1,564,905
- -------------------------------------------------------------------------------------------------------------------------------
Suffolk County, NY, Industrial Development Agency, Civic Facilities
Rev. (Huntington Hospital), "C", 5.875%, 2032 1,000,000 1,041,130
- -------------------------------------------------------------------------------------------------------------------------------
Yonkers, NY, Industrial Development Agency, Civic Facilities Rev.
(St. John's Riverside Hospital), "A", 7.125%, 2031 500,000 513,305
- -------------------------------------------------------------------------------------------------------------------------------
$10,144,867
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Suffolk County, NY, Industrial Development Agency, Civic Facilities
Term Care - 0.4% Rev. (Gurwin Jewish Phase II), 6.7%, 2039 $385,000 $393,689
- -------------------------------------------------------------------------------------------------------------------------------
Westchester County, NY, Industrial Development Agency, Civic
Facilities Rev., Continuing Care Retirement (Kendal On Hudson),
6.5%, 2034 300,000 310,080
- -------------------------------------------------------------------------------------------------------------------------------
$703,769
- -------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.8% Nassau County, NY, Industrial Development Agency, Civic Facility Rev.
(Special Needs Facility), "B-1", 6.5%, 2017 $205,000 $213,464
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev. (Jewish Board of Families &
Children), AMBAC, 5%, 2023 695,000 725,955
- -------------------------------------------------------------------------------------------------------------------------------
New York, NY, Industrial Development Agency (PSCH, Inc.),
6.375%, 2033 500,000 519,435
- -------------------------------------------------------------------------------------------------------------------------------
$1,458,854
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Onondaga County, NY, Industrial Development Agency, Sewer Facilities
Other - 0.9% Rev. (Bristol-Meyers Squibb Co.), 5.75%, 2024 $1,000,000 $1,111,840
- -------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority, Refinery Facilities Rev.
(Hovensa Refinery), 5.875%, 2022 430,000 455,800
- -------------------------------------------------------------------------------------------------------------------------------
$1,567,640
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Essex County, NY, Industrial Development Agency, Pollution Control
Paper - 1.4% Rev. (International Paper Corp.), 5.55%, 2014 $750,000 $805,762
- -------------------------------------------------------------------------------------------------------------------------------
Essex County, NY, Industrial Development Agency, Pollution Control
Rev. (International Paper Corp.), 6.15%, 2021 1,000,000 1,038,870
- -------------------------------------------------------------------------------------------------------------------------------
Essex County, NY, Industrial Development Agency, Pollution Control
Rev. (International Paper Corp.), 6.45%, 2023 700,000 738,591
- -------------------------------------------------------------------------------------------------------------------------------
$2,583,223
- -------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - New York City, NY, Industrial Development Agency, Civic Facilities
Other - 0.6% Rev. (United Jewish Appeal), "A", 5%, 2027 $1,000,000 $1,040,460
- -------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing New York City, NY, Housing Development Corp., Multi-Family Housing
Revenue - 1.4% Rev., 5.6%, 2019 $400,000 $415,268
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Housing Development Corp., Multi-Family Housing
Rev., 5.5%, 2034 2,000,000 2,045,720
- -------------------------------------------------------------------------------------------------------------------------------
$2,460,988
- -------------------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax Schenectady, NY, Metroplex Development Authority Rev., "A", MBIA,
Revenue - 0.3% 5.375%, 2021 $475,000 $516,221
- -------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 3.6% New York Mortgage Agency Rev., 4.6%, 2015 $2,000,000 $2,006,660
- -------------------------------------------------------------------------------------------------------------------------------
New York Mortgage Agency Rev., 5.85%, 2018 945,000 978,056
- -------------------------------------------------------------------------------------------------------------------------------
New York Mortgage Agency Rev., 5.8%, 2020 1,555,000 1,606,548
- -------------------------------------------------------------------------------------------------------------------------------
New York Mortgage Agency Rev., 5.1%, 2024 2,000,000 2,020,100
- -------------------------------------------------------------------------------------------------------------------------------
$6,611,364
- -------------------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 0.5% Niagara County, NY, Industrial Developement Agency, Solid Waste
Disposal Rev., (American Ref-fuel), "C", 5.625%, 2024 $850,000 $897,090
- -------------------------------------------------------------------------------------------------------------------------------
Oneida Herkimer, NY, Solid Waste Management Systems Rev., 6.75%, 2014 60,000 60,199
- -------------------------------------------------------------------------------------------------------------------------------
Rockland County, NY, Solid Waste Management Systems Rev., 4.8%, 2005 20,000 20,289
- -------------------------------------------------------------------------------------------------------------------------------
$977,578
- -------------------------------------------------------------------------------------------------------------------------------
State & Agency -
Other - 5.3% New York Dormitory Authority (City University), AMBAC, 5.75%, 2018 $800,000 $930,208
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (Pace University), MBIA, 6%, 2019 1,700,000 1,908,080
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (School Program), 6.25%, 2020 1,690,000 1,916,866
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (State University), 5.375%, 2010(++) 1,500,000 1,663,155
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (State University), 5.875%, 2017 1,130,000 1,307,026
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (Upstate Community Colleges), FSA,
6%, 2010(++) 1,010,000 1,149,188
- -------------------------------------------------------------------------------------------------------------------------------
New York Municipal Bond Bank Agency, Special Program Rev., AMBAC,
5.25%, 2015 715,000 769,018
- -------------------------------------------------------------------------------------------------------------------------------
$9,643,541
- -------------------------------------------------------------------------------------------------------------------------------
State & Local
Agencies - 11.9% New York Dormitory Authority (City University), "A", 5.625%, 2016 $2,450,000 $2,762,400
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority (Judicial Institute at Pace), AMBAC,
5.5%, 2020 2,500,000 2,724,275
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev., Mental Health Services, "A", MBIA,
5.75%, 2010(++) 5,000 5,562
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev., Mental Health Services, "B", MBIA,
5.25%, 2011(++) 385,000 424,262
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev., Mental Health Services, "D",
5.25%, 2010(++) 35,000 38,345
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev., Mental Health Services,
Unrefunded, "B", MBIA, 5.25%, 2031 830,000 864,520
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev., Mental Health Services,
Unrefunded, "D", FSA, 5.25%, 2030 70,000 72,540
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority, Mental Health Services Facilites
Improvement, 5.25%, 2010(++) 895,000 980,535
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority, Mental Health Services Facilites
Improvement, 5.25%, 2011(++) 785,000 862,699
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority, Mental Health Services Facilities
Improvement, "A", AMBAC, 5%, 2030 2,000,000 2,057,940
- -------------------------------------------------------------------------------------------------------------------------------
New York Municipal Bond Bank Agency, Special School Purpose Rev.,
5.25%, 2022 1,000,000 1,059,770
- -------------------------------------------------------------------------------------------------------------------------------
New York Urban Development Corp. (Correctional Facilities) AMBAC,
0%, 2009 5,000,000 4,399,750
- -------------------------------------------------------------------------------------------------------------------------------
New York Urban Development Corp. (State Facilities), AMBAC,
5.6%, 2015 2,750,000 3,126,393
- -------------------------------------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corp., NY, "A", 5.5%, 2018 2,000,000 2,175,880
- -------------------------------------------------------------------------------------------------------------------------------
$21,554,871
- -------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 2.2% New York City, NY, Transitional Finance Authority Rev., 5.75%, 2009
(++) $2,730,000 $3,042,012
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Transitional Finance Authority Rev., "A", 5%, 2026 1,000,000 1,035,730
- -------------------------------------------------------------------------------------------------------------------------------
$4,077,742
- -------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.6% Guam Economic Development Authority, Tobacco Settlement, "B",
5.5%, 2041 $400,000 $384,916
- -------------------------------------------------------------------------------------------------------------------------------
New York County Tobacco Trust II, 5.625%, 2035 800,000 798,352
- -------------------------------------------------------------------------------------------------------------------------------
$1,183,268
- -------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 9.0% New York Thruway Authority, General Rev., Highway & Bridges,
5.25%, 2015 $1,500,000 $1,593,705
- -------------------------------------------------------------------------------------------------------------------------------
Niagara Falls, NY, Bridge Commision Toll Rev., RITES, FGIC,
7.566%, 2015+(+) 3,500,000 4,180,400
- -------------------------------------------------------------------------------------------------------------------------------
Triborough Bridge & Tunnel Authority Rev., NY, "A", MBIA, 5%, 2032 2,000,000 2,045,760
- -------------------------------------------------------------------------------------------------------------------------------
Triborough Bridge & Tunnel Authority Rev., NY, "B", 5%, 2032 1,000,000 1,024,100
- -------------------------------------------------------------------------------------------------------------------------------
Triborough Bridge & Tunnel Authority Rev., NY, ETM, 6%, 2012(++) 1,000,000 1,121,150
- -------------------------------------------------------------------------------------------------------------------------------
Triborough Bridge & Tunnel Authority Rev., NY, RITES, ETM,
8.054%, 2017(++),+(+) 5,000,000 6,347,500
- -------------------------------------------------------------------------------------------------------------------------------
$16,312,615
- -------------------------------------------------------------------------------------------------------------------------------
Transportation - Special
Tax - 10.5% Metropolitan Transportation Authority Rev., NY, "A", AMBAC, 5%, 2033 $2,000,000 $2,066,480
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority Rev., NY, AMBAC, ETM,
5.75%, 2013(++) 825,000 922,020
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority Rev., NY, Dedicated Tax Fund
Rev., 5.5%, 2015(++) 750,000 849,097
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority Rev., NY, Dedicated Tax Fund
Rev., FGIC, ETM, 5.25%, 2014(++) 500,000 533,835
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority Rev., NY, ETM, 7.375%, 2008(++) 1,425,000 1,531,561
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority Rev., NY, FGIC, 5.875%, 2010(++) 2,000,000 2,241,940
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority Rev., NY, FGIC, 5%, 2025 2,500,000 2,585,700
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, NY, Commuter Facilities Rev.,
FGIC, 5.25%, 2011(++) 1,000,000 1,100,210
- -------------------------------------------------------------------------------------------------------------------------------
New York Thruway Authority, General Rev., Highway & Bridges, 5%, 2018 1,000,000 1,039,080
- -------------------------------------------------------------------------------------------------------------------------------
New York Thruway Authority, General Rev., Highway & Bridges, "B",
FGIC, 5.4%, 2017 2,000,000 2,144,720
- -------------------------------------------------------------------------------------------------------------------------------
New York Thruway Authority, General Rev., Highway & Bridges, "B",
FSA, 5.8%, 2018 20,000 22,131
- -------------------------------------------------------------------------------------------------------------------------------
New York Thruway Authority, General Rev., Highway & Bridges, AMBAC,
5.375%, 2010(++) 2,000,000 2,213,240
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Highway & Transportation Authority Rev., 5%, 2036 1,700,000 1,742,517
- -------------------------------------------------------------------------------------------------------------------------------
$18,992,531
- -------------------------------------------------------------------------------------------------------------------------------
Universities - Amherst, NY, Industrial Development Agency Rev. (Daemen College),
Colleges - 5.4% "A", 6%, 2021 $1,000,000 $1,063,500
- -------------------------------------------------------------------------------------------------------------------------------
Cattaraugus County, NY, Industrial Development Agency Rev. (Jamestown
Community College), "A", 6.4%, 2019 500,000 555,000
- -------------------------------------------------------------------------------------------------------------------------------
Hempstead Town, NY, Industrial Development Agency, Civic Facilities
Rev. (Hofstra University), MBIA, 5.8%, 2015 1,500,000 1,584,660
- -------------------------------------------------------------------------------------------------------------------------------
Islip, NY, Community Development Agency Rev. (New York Institute of
Technology), 7.5%, 2006(++) 2,000,000 2,127,080
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev. (Fordham University), AMBAC,
7.2%, 2015 40,000 40,182
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev. (St. John's University), "A", MBIA,
5%, 2017 300,000 317,322
- -------------------------------------------------------------------------------------------------------------------------------
New York Dormitory Authority Rev. (Yeshiva University), AMBAC,
5.125%, 2034 1,000,000 1,045,980
- -------------------------------------------------------------------------------------------------------------------------------
Onondaga County, NY, Industrial Development Agency Rev. (Le Moyne
College), 5.625%, 2021 750,000 804,938
- -------------------------------------------------------------------------------------------------------------------------------
Schenectady, NY, Industrial Development Agency, Civic Facilities Rev.
(Union College), "A", AMBAC, 5%, 2032 2,000,000 2,054,200
- -------------------------------------------------------------------------------------------------------------------------------
Utica, NY, Industrial Development Agency, Civic Facilities Rev.
(Utica College), 5.3%, 2008 140,000 144,193
- -------------------------------------------------------------------------------------------------------------------------------
$9,737,055
- -------------------------------------------------------------------------------------------------------------------------------
Universities - New York Dormitory Authority Rev. (New York Unversity), "A", FGIC,
Dormatories - 0.6% 5%, 2029 $1,000,000 $1,032,800
- -------------------------------------------------------------------------------------------------------------------------------
Utilities -
Cogeneration - 0.3% Port Authority NY & NJ, Special Obligation Rev., 6.75%, 2011 $500,000 $529,035
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor
Owned - 2.8% New York Energy Research & Development Rev. (Con Edison), 6.1%, 2020 $2,400,000 $2,466,936
- -------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities, Water Facilities Rev. (NY American
Water Co.), 8.85%, 2015 2,500,000 2,532,550
- -------------------------------------------------------------------------------------------------------------------------------
$4,999,486
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 3.0% Guam Power Authority Rev., RITES, AMBAC, 7.577%, 2014+(+) $500,000 $578,980
- -------------------------------------------------------------------------------------------------------------------------------
Long Island Power Authority, Electrical Systems Rev., 5.5%, 2021 400,000 432,956
- -------------------------------------------------------------------------------------------------------------------------------
New York Power Authority Rev., 5%, 2021 1,000,000 1,046,970
- -------------------------------------------------------------------------------------------------------------------------------
New York Power Authority Rev., 5.25%, 2040 3,000,000 3,120,900
- -------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Water & Power Authority Rev., 5.5%, 2017 200,000 206,122
- -------------------------------------------------------------------------------------------------------------------------------
$5,385,928
- -------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 12.5% Erie County, NY, Water Authority Rev., AMBAC, ETM, 6.75%, 2014(++) $1,000,000 $1,189,840
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
5%, 2027 1,500,000 1,549,785
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
5.5%, 2033 1,850,000 1,986,734
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
"B", AMBAC, 5%, 2028 1,500,000 1,553,535
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
"C", 5%, 2031 1,000,000 1,031,370
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
ETM, 6%, 2010(++) 620,000 701,487
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
FGIC, 5.25%, 2033 2,000,000 2,084,560
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
MBIA, 5.5%, 2007(++) 1,250,000 1,333,600
- -------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities Corp., Clean Water & Drinking Rev.,
5%, 2024 1,005,000 1,046,898
- -------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities Corp., Clean Water & Drinking Rev.,
5%, 2025 1,500,000 1,561,260
- -------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities Corp., Clean Water & Drinking Rev.,
5%, 2029 2,000,000 2,065,360
- -------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities Corp., Pollution Control Rev.,
5.75%, 2010 175,000 195,216
- -------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities Corp., Pollution Control Rev.,
6.875%, 2010 220,000 222,235
- -------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities Corp., Pollution Control Rev.,
7.25%, 2010 70,000 70,335
- -------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities Corp., Pollution Control Rev., ETM,
5.75%, 2010(++) 945,000 1,057,994
- -------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities Corp., Pollution Control Rev., ETM,
5.75%, 2010(++) 1,115,000 1,248,321
- -------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities Corp., Water Facilities Rev.,
6%, 2031 1,005,000 1,065,029
- -------------------------------------------------------------------------------------------------------------------------------
New York Environmental Facilities Corp., Water Facilities Rev.
(Spring Valley Water Co.), AMBAC, 6.15%, 2024 1,500,000 1,536,720
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Aqueduct & Sewer Authority Rev., 9%, 2005(++) 150,000 152,369
- -------------------------------------------------------------------------------------------------------------------------------
Suffolk County, NY, Water Authority Rev., MBIA, 5.1%, 2012 895,000 976,033
- -------------------------------------------------------------------------------------------------------------------------------
$22,628,681
- -------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $161,273,041) $173,609,471
- -------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.8%
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Job Development Authority Rev., 2.28%, due 4/01/05 $1,200,000 $1,200,000
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
2.28%, due 4/01/05 2,000,000 2,000,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $3,200,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $164,473,041) $176,809,471
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 2.3% 4,109,660
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $180,919,131
- -------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 MFS(R) NORTH CAROLINA 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 - 96.5%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- -------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 4.5% Charlotte, NC, "B", MBIA, 5.875%, 2019 $1,000,000 $1,083,680
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, "B", MBIA, 5.875%, 2020 3,775,000 4,081,643
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Airport Rev., "A", MBIA, 5%, 2029 2,000,000 2,067,140
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Airport Rev., "A", MBIA, 5%, 2034 4,485,000 4,611,651
- -------------------------------------------------------------------------------------------------------------------------------
Raleigh Durham, NC, Airport Authority Rev., "A", AMBAC, 5%, 2030 1,000,000 1,034,370
- -------------------------------------------------------------------------------------------------------------------------------
Raleigh Durham, NC, Airport Authority Rev., "A", FGIC, 5.25%, 2018 2,700,000 2,895,453
- -------------------------------------------------------------------------------------------------------------------------------
$15,773,937
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations - General
Purpose - 1.0% Charlotte, NC, 5.5%, 2016 $3,100,000 $3,410,899
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 1.4% New Hanover County, NC, Public Improvement, 5.8%, 2010(++) $4,200,000 $4,774,938
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 3.7% Brunswick County, NC, FGIC, 5%, 2020 $2,800,000 $2,981,048
- -------------------------------------------------------------------------------------------------------------------------------
Cumberland County, NC, 5.8%, 2010(++) 4,400,000 4,962,804
- -------------------------------------------------------------------------------------------------------------------------------
Johnston County, NC, FGIC, 5.6%, 2018 2,000,000 2,194,800
- -------------------------------------------------------------------------------------------------------------------------------
New Hanover County, NC, Public Improvement, 5%, 2021 1,435,000 1,505,243
- -------------------------------------------------------------------------------------------------------------------------------
New Hanover County, NC, School Improvement, 5%, 2019 1,255,000 1,335,383
- -------------------------------------------------------------------------------------------------------------------------------
$12,979,278
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Catawba County, NC, Hospital Rev. (Catawba Memorial Hospital), AMBAC,
Hospitals - 23.2% 5%, 2017 $1,200,000 $1,253,868
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte-Mecklenberg, NC, Healthcare Systems Rev. (Carolinas
Healthcare), "A", 5.75%, 2021 1,500,000 1,548,780
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte-Mecklenberg, NC, Healthcare Systems Rev. (Carolinas
Healthcare), "A", 5.125%, 2022 1,000,000 1,023,510
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte-Mecklenberg, NC, Healthcare Systems Rev. (Carolinas
Healthcare), "A", 5%, 2031 3,500,000 3,536,400
- -------------------------------------------------------------------------------------------------------------------------------
Cumberland County, NC, Hospital Facilities Rev. (Cumberland
Hospital), MBIA, 0%, 2009 1,800,000 1,528,218
- -------------------------------------------------------------------------------------------------------------------------------
New Hanover County, NC, Hospital Rev. (New Hanover Regional Medical
Center), MBIA, 5%, 2019 6,225,000 6,507,055
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission (Cleveland County Healthcare),
"A", AMBAC, 5%, 2035 1,305,000 1,334,963
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission (Northeast Medical Center),
5.25%, 2029 2,000,000 2,069,900
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission (Novant Health), "A", MBIA,
5%, 2018 1,975,000 2,057,871
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission (Novant Health), Obligations
Group A, 5%, 2020 500,000 517,960
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Health Care Facilities Rev.
(Wakemed), AMBAC, 5%, 2021 3,500,000 3,680,600
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Betsy Johnson
Health Care System), FSA, 5.125%, 2032 1,500,000 1,561,245
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Duke
University), "C", 5.25%, 2021 5,975,000 6,146,303
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Gaston
Memorial Hospital), 5.5%, 2015 5,790,000 5,971,401
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Gaston
Memorial Hospital), 5.5%, 2019 6,500,000 6,685,185
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Maria Parham
Medical Center), 6.5%, 2026 1,000,000 1,085,800
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Mission-St.
Joseph Health Systems), 5.5%, 2021 2,825,000 3,001,054
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Mission-St.
Joseph Health Systems), MBIA, 5.1%, 2018 1,500,000 1,565,790
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Pitt County
Memorial Hospital), "B", 5%, 2018 3,000,000 3,070,980
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Rex
Healthcare), AMBAC, 5%, 2017 5,000,000 5,205,850
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Southeastern
Regional Medical Center), 5.375%, 2032 3,330,000 3,410,320
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Wilson
Memorial Hospital), AMBAC, 0%, 2013 1,000,000 694,990
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Hospital Rev. (Wilson
Memorial Hospital), AMBAC, 0%, 2015 1,140,000 710,687
- -------------------------------------------------------------------------------------------------------------------------------
Northern Hospital District Surry County, NC, Health Care Facilities
Rev., ASST GTY, 5.5%, 2019 1,250,000 1,331,825
- -------------------------------------------------------------------------------------------------------------------------------
Northern Hospital District Surry County, NC, Health Care Facilities
Rev., ASST GTY, 5.1%, 2021 1,000,000 1,041,650
- -------------------------------------------------------------------------------------------------------------------------------
Pitt County, NC, Rev., Pitt County Memorial Hospital, ETM,
5.25%, 2021(++) 10,135,000 10,204,121
- -------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, Hospital Rev. (Chapel Hill Hospital),
5.25%, 2006(++) 4,800,000 5,005,584
- -------------------------------------------------------------------------------------------------------------------------------
$81,751,910
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long North Carolina Medical Care Commission, Health Care Facilities Rev.
Term Care - 0.8% (Arbor Acres Community), 6.375%, 2032 $1,000,000 $1,039,910
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Health Care Facilities Rev.
(Deerfield), "A", 5%, 2023 1,000,000 1,017,470
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Health Care Facilities Rev.
(Givens Estates), 6.5%, 2032 800,000 828,256
- -------------------------------------------------------------------------------------------------------------------------------
$2,885,636
- -------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.9% Cumberland County, NC, Finance Corp., Installment Payment Rev.
(Detention Center & Mental Health), AMBAC, 5.625%, 2019 $2,125,000 $2,301,928
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Medical Care Commission, Health Care Facilities Rev.
"A", 5.8%, 2034 1,000,000 1,013,320
- -------------------------------------------------------------------------------------------------------------------------------
$3,315,248
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Virgin Islands Public Finance Authority, Refinery Facilities Rev.
Other - 0.3% (Hovensa Refinery), 5.875%, 2022 $860,000 $911,600
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Columbus County, NC, Industrial Facilities & Pollution Control
Paper - 3.1% Financing Authority Rev. (International Paper Co.), "A", 5.8%, 2016 $2,000,000 $2,096,200
- -------------------------------------------------------------------------------------------------------------------------------
Haywood County, NC, Industrial Facilities & Pollution Control
Financing Authority Rev. (Champion International Corp.), "A",
5.75%, 2025 5,400,000 5,433,804
- -------------------------------------------------------------------------------------------------------------------------------
Martin County, NC, Industrial Facilities & Pollution Control
Financing Authority Rev. (Solid Waste Disposal Weyerhaeuser),
6.8%, 2024 3,500,000 3,547,985
- -------------------------------------------------------------------------------------------------------------------------------
$11,077,989
- -------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Charlotte, NC, Housing Authority Rev., Mortgage Rocky Branch II,
Revenue - 2.1% GNMA, 4.65%, 2035 $2,000,000 $1,924,240
- -------------------------------------------------------------------------------------------------------------------------------
Mecklenburg County, NC (Little Rock Apartments), FNMA, 5.15%, 2022 1,000,000 1,025,040
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency, "H", FHA, 6.05%, 2028 4,460,000 4,572,347
- -------------------------------------------------------------------------------------------------------------------------------
$7,521,627
- -------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 5.9% North Carolina Housing Finance Agency Rev., "13-A", 4.25%, 2028 $2,410,000 $2,434,534
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "14-A", AMBAC,
4.35%, 2028 4,300,000 4,339,560
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "15-A", FSA, 4.95%, 2032 500,000 499,225
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "19-A", 5.1%, 2030 2,500,000 2,513,800
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "5-A", 5.55%, 2019 3,530,000 3,589,551
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "7-A", 6.15%, 2020 765,000 794,024
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "A", 5.25%, 2020 1,490,000 1,499,357
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "A", 5.375%, 2023 250,000 254,028
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "PP", FHA, 6.15%, 2017 1,680,000 1,736,263
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Housing Finance Agency Rev., "RR", 5.85%, 2028 3,020,000 3,062,854
- -------------------------------------------------------------------------------------------------------------------------------
$20,723,196
- -------------------------------------------------------------------------------------------------------------------------------
State & Agency -
Other - 9.5% Brunswick County, NC, Certificates of Participation, FSA, 5.5%, 2020 $1,000,000 $1,084,160
- -------------------------------------------------------------------------------------------------------------------------------
Cabarrus County, NC, Installment Financing Contract, 5%, 2021 5,500,000 5,750,415
- -------------------------------------------------------------------------------------------------------------------------------
Carteret County, NC, AMBAC, 5.625%, 2020 1,010,000 1,103,334
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Certificates of Participation (Convention Facilities),
5.5%, 2020 3,000,000 3,255,900
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Certificates of Participation (Convention Facilities),
AMBAC, 0%, 2005 4,810,000 4,730,154
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Certificates of Participation (Convention Facilities),
AMBAC, 0%, 2006 1,075,000 1,026,131
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Certificates of Participation (Convention Facilities),
AMBAC, 0%, 2008 3,000,000 2,655,000
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Certificates of Participation (Public Safety
Facilities), "D", 5.5%, 2020 3,000,000 3,259,830
- -------------------------------------------------------------------------------------------------------------------------------
Harnett County, NC, Certificates of Participation, FSA, 5.25%, 2015 1,020,000 1,135,831
- -------------------------------------------------------------------------------------------------------------------------------
Harnett County, NC, Certificates of Participation, FSA, 5.5%, 2016 1,225,000 1,344,511
- -------------------------------------------------------------------------------------------------------------------------------
Pitt County, NC, Certificates of Participation (School Facilities
Improvement), "A", FSA, 5.5%, 2020 1,250,000 1,352,550
- -------------------------------------------------------------------------------------------------------------------------------
Pitt County, NC, Certificates of Participation (School Facilities
Improvement), "B", FSA, 5.75%, 2018 1,390,000 1,541,691
- -------------------------------------------------------------------------------------------------------------------------------
Pitt County, NC, Certificates of Participation (School Facilities
Improvement), "B", FSA, 5.75%, 2019 1,390,000 1,539,008
- -------------------------------------------------------------------------------------------------------------------------------
Randolph County, NC, Certificates of Participation, FSA,
5.6%, 2009(++) 3,000,000 3,305,460
- -------------------------------------------------------------------------------------------------------------------------------
Rockingham, NC, Certificates of Participation, AMBAC, 5.125%, 2024 350,000 371,777
- -------------------------------------------------------------------------------------------------------------------------------
$33,455,752
- -------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies - 5.4% Cabarrus County, NC, Development Corp., AMBAC, 5.3%, 2019 $1,250,000 $1,341,550
- -------------------------------------------------------------------------------------------------------------------------------
Forsyth County, NC, Certificates of Participation (Forsyth County
Public Facilities Equipment), 5.25%, 2023 1,230,000 1,317,994
- -------------------------------------------------------------------------------------------------------------------------------
Forsyth County, NC, Certificates of Participation (Public Facilities
& Equipment Project), 5.25%, 2019 775,000 835,458
- -------------------------------------------------------------------------------------------------------------------------------
Iredell County, NC, Public Facilities (School Projects), AMBAC,
5.5%, 2010(++) 1,000,000 1,112,920
- -------------------------------------------------------------------------------------------------------------------------------
New Hanover County, NC, Certificates of Participation (New Hanover
County Projects), AMBAC, 5.25%, 2018 1,635,000 1,779,861
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Bank & Finance Agency (Kidder), 7.5%, 2006 7,000,000 7,371,140
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2012+(+) 1,500,000 1,902,000
- -------------------------------------------------------------------------------------------------------------------------------
Rutherford County, NC, Certificates of Participation (Rutherford
County School), AMBAC, 5%, 2023 840,000 881,185
- -------------------------------------------------------------------------------------------------------------------------------
Winston Salem, NC, Certificates of Participation, "C", 5%, 2018 2,575,000 2,698,394
- -------------------------------------------------------------------------------------------------------------------------------
$19,240,502
- -------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.8% Virgin Islands Public Finance Authority Rev., "A", 5.5%, 2022 $1,650,000 $1,735,404
- -------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev., ASST GTY, 5.5%, 2018 1,000,000 1,067,540
- -------------------------------------------------------------------------------------------------------------------------------
$2,802,944
- -------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.5% Childrens Trust Fund, Settlement Rev., PR, 5.375%, 2033 $1,880,000 $1,886,900
- -------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico, Highway & Transportation Authority Rev.,
Tax - 2.1% RITES, FSA, 9.089%, 2018+(+) $5,425,000 $7,512,974
- -------------------------------------------------------------------------------------------------------------------------------
Universities -
Colleges - 8.2% Appalachian State University, NC, "A", FGIC, 5.125%, 2022 $1,260,000 $1,342,606
- -------------------------------------------------------------------------------------------------------------------------------
Appalachian State University, NC, Rev. (Package Systems), FSA,
5.6%, 2020 2,285,000 2,491,747
- -------------------------------------------------------------------------------------------------------------------------------
East Carolina University, NC, Rev., "A", AMBAC, 5.25%, 2021 1,375,000 1,486,114
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Capital Facilities Finance (Duke University), "A",
5.125%, 2041 4,915,000 5,033,402
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Capital Facilities Finance (Duke University), "A",
5.25%, 2042 2,000,000 2,076,420
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Capital Facilities Finance (High Point University),
5.125%, 2018 510,000 543,992
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Capital Facilities Finance (High Point University),
5.125%, 2021 300,000 315,657
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Capital Facilities Finance (Johnson & Wales
University), "A", XLCA, 5.25%, 2021 775,000 835,737
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Capital Facilities Finance (Johnson & Wales
University), "A", XLCA, 5.25%, 2022 1,870,000 2,009,970
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Capital Facilities Finance (Johnson & Wales
University), "A", XLCA, 5%, 2033 2,000,000 2,046,260
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Industrial Tourist Authority (University Plaza), "A",
MBIA, 5%, 2020 2,180,000 2,291,463
- -------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, Greensboro Rev., "A", FSA, 5%, 2020 2,835,000 2,990,443
- -------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, Systems Pool Rev., "C", AMBAC, 5%, 2029 2,000,000 2,064,300
- -------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, University Rev., 5%, 2028 2,000,000 2,069,460
- -------------------------------------------------------------------------------------------------------------------------------
University of North Carolina, Wilmington Rev., "A", AMBAC, 5%, 2019 1,375,000 1,452,536
- -------------------------------------------------------------------------------------------------------------------------------
$29,050,107
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Wake County, NC, Industrial Facilities & Pollution Control Rev.
Owned - 0.8% (Carolina Power & Light Co.), 5.375%, 2017 $2,500,000 $2,674,300
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal North Carolina Eastern Municipal Power Agency, "A", ETM,
Owned - 13.9% 7.5%, 2010(++) $2,595,000 $3,071,831
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power Agency, "A", ETM, 5%, 2017(++) 3,120,000 3,382,049
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power Agency, "A", MBIA, 7.5%, 2010 3,005,000 3,536,945
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power Agency, "B", MBIA, 7.25%, 2007 5,000,000 5,376,550
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power Agency, AMBAC, 6%, 2018 1,245,000 1,457,522
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power Agency, RITES, AMBAC,
9.066%, 2018+(+) 6,500,000 8,716,890
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, Catawba Electric Rev.,
6.375%, 2013 1,000,000 1,111,650
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, Catawba Electric Rev., MBIA,
7%, 2007 5,000,000 5,355,450
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, Catawba Electric Rev., MBIA,
6%, 2011 5,000,000 5,641,750
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, ROLS, 8.096%, 2020+(+) 3,000,000 3,425,160
- -------------------------------------------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, ROLS, MBIA, 8.096%, 2019+(+) 5,000,000 5,688,100
- -------------------------------------------------------------------------------------------------------------------------------
Raleigh, NC, Combined Enterprise Systems Rev., 5.125%, 2022 2,000,000 2,080,900
- -------------------------------------------------------------------------------------------------------------------------------
Raleigh, NC, Combined Enterprise Systems Rev., 5%, 2024 385,000 401,563
- -------------------------------------------------------------------------------------------------------------------------------
$49,246,360
- -------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 8.4% Broad River, NC, Water Authority Rev., MBIA, 5.75%, 2019 $1,490,000 $1,652,574
- -------------------------------------------------------------------------------------------------------------------------------
Cary, NC, Combined Enterprise Systems Rev., 5%, 2026 1,000,000 1,034,820
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Storm Water Fee Rev., 6%, 2010(++) 3,180,000 3,613,943
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Storm Water Fee Rev., 5%, 2034 4,190,000 4,316,999
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Water & Sewer Systems Rev., 5.75%, 2009(++) 2,000,000 2,215,240
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Water & Sewer Systems Rev., 5.75%, 2010(++) 3,075,000 3,458,422
- -------------------------------------------------------------------------------------------------------------------------------
Charlotte, NC, Water & Sewer Systems Rev., 5.5%, 2017 1,650,000 1,806,156
- -------------------------------------------------------------------------------------------------------------------------------
Durham County, NC, Enterprise Systems Rev., MBIA, 5%, 2023 1,675,000 1,763,088
- -------------------------------------------------------------------------------------------------------------------------------
Greensboro, NC, Enterprise Systems Rev., "A", 5.125%, 2018 1,490,000 1,590,575
- -------------------------------------------------------------------------------------------------------------------------------
Greensboro, NC, Enterprise Systems Rev., "A", 5.125%, 2019 1,750,000 1,863,208
- -------------------------------------------------------------------------------------------------------------------------------
Greenville, NC, Combined Enterprise Systems Rev., FSA, 5%, 2016 1,005,000 1,074,345
- -------------------------------------------------------------------------------------------------------------------------------
Greenville, NC, Combined Enterprise Systems Rev., FSA, 5.25%, 2019 1,170,000 1,270,632
- -------------------------------------------------------------------------------------------------------------------------------
Harnett County, NC, Water & Sewer Systems Rev., AMBAC, 5%, 2028 700,000 725,452
- -------------------------------------------------------------------------------------------------------------------------------
Kannapolis, NC, Water & Sewer Rev., "B", FSA, 5.25%, 2021 1,000,000 1,066,580
- -------------------------------------------------------------------------------------------------------------------------------
Winston Salem, NC, Water & Sewer Systems Rev., 5%, 2033 2,000,000 2,074,080
- -------------------------------------------------------------------------------------------------------------------------------
$29,526,114
- -------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $318,233,533) $340,522,211
- -------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 2.1%
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "D", 2.3%, due 4/07/05 $600,000 $600,000
- -------------------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, California Toll Bridge Rev., "A", 2.22%,
due 4/07/05 500,000 500,000
- -------------------------------------------------------------------------------------------------------------------------------
Bell County, TX, Health Facilities Development Corp. Rev. (Scott &
White Memorial Hospital), 2.3%, due 4/01/05 1,530,000 1,530,000
- -------------------------------------------------------------------------------------------------------------------------------
Irvine, CA, Improvement Building Act 1915, 2.28%, due 4/06/05 1,000,000 1,000,000
- -------------------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Health Facilities Authority Rev., Pooled
Hospital Loan Program, 2.3%, due 4/01/05 1,800,000 1,800,000
- -------------------------------------------------------------------------------------------------------------------------------
Sacramento, CA, Unified School District, District Certification
Partnership,
2.28%, due 4/07/05 2,000,000 2,000,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $7,430,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $325,663,533) $347,952,211
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.4% 5,070,100
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $353,022,311
- -------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 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 - 96.6%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- -------------------------------------------------------------------------------------------------------------------------------
Airport & Port Allegheny County PA, Airport Rev. (Pittsburgh International Airport),
Revenue - 2.2% FGIC, 6.125%, 2017 $500,000 $538,780
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County PA, Airport Rev. (Pittsburgh International Airport),
MBIA, 5.75%, 2014 1,000,000 1,087,160
- -------------------------------------------------------------------------------------------------------------------------------
Susquehanna Area Regional Airport, 5.375%, 2018 200,000 205,522
- -------------------------------------------------------------------------------------------------------------------------------
Susquehanna Area Regional Airport, AMBAC, 5.375%, 2023 500,000 526,620
- -------------------------------------------------------------------------------------------------------------------------------
$2,358,082
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations - General
Purpose - 6.0% Allegheny County, PA, Unrefunded Balance, "C53", FGIC, 5.3%, 2018 $285,000 $306,982
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Unrefunded Balance, "C53", FGIC, 5.4%, 2019 290,000 313,763
- -------------------------------------------------------------------------------------------------------------------------------
Beaver County, PA, MBIA, 5.75%, 2006(++) 250,000 261,428
- -------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, ROLS, FGIC, 8.633%, 2015+(+) 1,000,000 1,278,080
- -------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, ROLS, XLCA, 8.543%, 2017+(+) 1,000,000 1,279,220
- -------------------------------------------------------------------------------------------------------------------------------
Luzerne County, PA, MBIA, 5.25%, 2025 500,000 529,865
- -------------------------------------------------------------------------------------------------------------------------------
North Huntingdon Township, PA, AMBAC, 5.25%, 2019 500,000 541,570
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania State Finance Authority Rev. (Penn Hills), "A", FGIC,
5.45%, 2010(++) 85,000 93,847
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania State Finance Authority Rev. (Penn Hills), "A", FGIC,
5.45%, 2019 415,000 448,793
- -------------------------------------------------------------------------------------------------------------------------------
State of Pennsylvania, 6%, 2010(++) 1,000,000 1,127,880
- -------------------------------------------------------------------------------------------------------------------------------
State of Pennsylvania, 6.25%, 2010 300,000 340,695
- -------------------------------------------------------------------------------------------------------------------------------
$6,522,123
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 0.5% Pittsburgh, PA, FGIC, 5.75%, 2009(++) $500,000 $547,895
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 25.5% Allegheny Valley, PA, School District, "A", MBIA, 5%, 2028 $1,000,000 $1,037,720
- -------------------------------------------------------------------------------------------------------------------------------
Ambridge, PA, Area School District, MBIA, 5%, 2034 750,000 774,165
- -------------------------------------------------------------------------------------------------------------------------------
Butler, PA, Area School District, FSA, 5%, 2031 1,000,000 1,030,660
- -------------------------------------------------------------------------------------------------------------------------------
Butler, PA, School District, FGIC, 5.375%, 2018 500,000 533,075
- -------------------------------------------------------------------------------------------------------------------------------
Chambersburg, PA, School District, FSA, 5%, 2016 500,000 526,885
- -------------------------------------------------------------------------------------------------------------------------------
Downingtown, PA, School District, AMBAC, 5.65%, 2008(++) 500,000 541,735
- -------------------------------------------------------------------------------------------------------------------------------
Exeter Township, PA, School District, FGIC, 5%, 2025 1,000,000 1,041,120
- -------------------------------------------------------------------------------------------------------------------------------
Garnet Valley, PA, School District, FGIC, 5.5%, 2015 750,000 828,094
- -------------------------------------------------------------------------------------------------------------------------------
Gateway, PA, Alleghany School District, FGIC, 5.2%, 2023 1,000,000 1,067,350
- -------------------------------------------------------------------------------------------------------------------------------
Gateway, PA, Allegheny School District, FGIC, 5%, 2032 1,390,000 1,429,820
- -------------------------------------------------------------------------------------------------------------------------------
Jim Thorpe, PA, Area School District, FSA, 5%, 2026 2,085,000 2,176,281
- -------------------------------------------------------------------------------------------------------------------------------
Mt. Lebanon PA, School District, MBIA, 5%, 2020 1,000,000 1,052,360
- -------------------------------------------------------------------------------------------------------------------------------
North Allegheny, PA, School District, FGIC, 5.05%, 2022 590,000 615,423
- -------------------------------------------------------------------------------------------------------------------------------
North Pocono, PA, School District, FGIC, 5%, 2023 500,000 522,305
- -------------------------------------------------------------------------------------------------------------------------------
North Schuylkill, PA, School District, FGIC, 5%, 2028 650,000 669,162
- -------------------------------------------------------------------------------------------------------------------------------
Palmyra, PA, School District, FGIC, 5.375%, 2016 820,000 896,219
- -------------------------------------------------------------------------------------------------------------------------------
Pennridge, PA, School District, MBIA, 5%, 2020 500,000 526,180
- -------------------------------------------------------------------------------------------------------------------------------
Pennridge, PA, School District, MBIA, 5%, 2021 500,000 524,810
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Public School Building (Garnet Valley School Disctrict),
AMBAC, 5.5%, 2018 1,005,000 1,086,345
- -------------------------------------------------------------------------------------------------------------------------------
Perkiomen Valley, PA, School District, "A", FSA, 5.25%, 2028 1,000,000 1,057,500
- -------------------------------------------------------------------------------------------------------------------------------
Perkiomen Valley, PA, School District, FSA, 5%, 2019 500,000 521,505
- -------------------------------------------------------------------------------------------------------------------------------
Perkiomen Valley, PA, School District, FSA, 5%, 2023 1,000,000 1,041,410
- -------------------------------------------------------------------------------------------------------------------------------
Perkiomen Valley, PA, School District, FSA, 5%, 2024 1,000,000 1,041,410
- -------------------------------------------------------------------------------------------------------------------------------
Perkiomen Valley, PA, School District, FSA, 5%, 2025 1,260,000 1,308,737
- -------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, School District, AMBAC, 5.375%, 2007(++) 500,000 525,235
- -------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, School District, FSA, 5.75%, 2011(++) 500,000 559,045
- -------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, School District, MBIA, 6%, 2010(++) 500,000 559,945
- -------------------------------------------------------------------------------------------------------------------------------
South Park, PA, School District, FGIC, 5%, 2019 750,000 784,238
- -------------------------------------------------------------------------------------------------------------------------------
Southeastern Area, PA, Special Schools Authority Rev., 0%, 2007 360,000 329,893
- -------------------------------------------------------------------------------------------------------------------------------
State Public School Building Authority, Pennsylvania School (Colonial
Intermediate Unit 20), FGIC, 5%, 2030 500,000 516,000
- -------------------------------------------------------------------------------------------------------------------------------
State Public School Building Authority, Pennsylvania School (Lease
Philadelphia School District), FSA, 5.25%, 2024 1,000,000 1,066,130
- -------------------------------------------------------------------------------------------------------------------------------
State Public School Building Authority, Pennsylvania School
(Tuscarora School District), FSA, 5%, 2024 1,000,000 1,041,410
- -------------------------------------------------------------------------------------------------------------------------------
State Public School Building Authority, Pennsylvania School
(Wattsburg School District), MBIA, 0%, 2027 2,150,000 671,918
- -------------------------------------------------------------------------------------------------------------------------------
$27,904,085
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Allegheny County, PA, Hospital Development Authority Rev. (South
Hospitals - 11.7% Hills Health System), MBIA, 5.8%, 2016 $500,000 $524,665
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev. (South
Hills Health Systems), 6.75%, 2025 555,000 586,319
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev. (UPMC
Health Systems), MBIA, 5%, 2018 500,000 521,665
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev. (West Penn
Allegheny Health), 9.25%, 2022 50,000 57,843
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev. (West Penn
Allegheny Health), 9.25%, 2030 150,000 173,064
- -------------------------------------------------------------------------------------------------------------------------------
Blair County, PA, Hospital Authority Rev. (Altoona), AMBAC,
5.5%, 2008 470,000 503,732
- -------------------------------------------------------------------------------------------------------------------------------
Erie County, PA, Hospital Authority Rev. (Hamot Health Foundation),
AMBAC, 5.25%, 2017 675,000 728,264
- -------------------------------------------------------------------------------------------------------------------------------
Lancaster County, PA, Hospital Authority Rev., 5.5%, 2026 500,000 520,175
- -------------------------------------------------------------------------------------------------------------------------------
Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan
Hospital), 5%, 2018 200,000 203,348
- -------------------------------------------------------------------------------------------------------------------------------
Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan
Hospital), 6%, 2035 350,000 360,161
- -------------------------------------------------------------------------------------------------------------------------------
Lehigh County, PA, General Purpose Authority (Good Shepherd Group),
"A", 5.625%, 2034 350,000 365,113
- -------------------------------------------------------------------------------------------------------------------------------
Lehigh County, PA, General Purpose Authority (Lehigh Valley
Hospital),
5.25%, 2032 600,000 609,456
- -------------------------------------------------------------------------------------------------------------------------------
Lehigh County, PA, General Purpose Authority (Lehigh Valley
Hospital), MBIA, 7%, 2016 250,000 311,670
- -------------------------------------------------------------------------------------------------------------------------------
Lehigh County, PA, General Purpose Authority (St. Lukes Bethlehem
Hospital), 5.375%, 2033 600,000 606,600
- -------------------------------------------------------------------------------------------------------------------------------
Lehigh County, PA, Hospital Rev. (Lehigh Valley Hospital), FSA,
5.25%, 2019 500,000 535,505
- -------------------------------------------------------------------------------------------------------------------------------
Lycoming County, PA, Authority Hospital Rev. (Williamsport Hospital
Obligation Group), CONNIE LEE, 5.375%, 2010 750,000 777,188
- -------------------------------------------------------------------------------------------------------------------------------
Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center),
6%, 2043 750,000 779,888
- -------------------------------------------------------------------------------------------------------------------------------
Mount Lebanon, PA, Hospital Authority Rev. (St. Clair Memorial
Hospital), 5.625%, 2032 400,000 414,504
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev., 6.25%, 2018 100,000 112,569
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev., 6%, 2031 650,000 709,293
- -------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Health & Educational Facilities Rev. (Jeane
Health), 6.6%, 2010 160,000 168,941
- -------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Health & Educational Facilities Rev. (Temple
Universty), 6.625%, 2023 250,000 253,878
- -------------------------------------------------------------------------------------------------------------------------------
Sayre, PA, Health Care Facilities Authority Rev., 5.875%, 2031 500,000 524,270
- -------------------------------------------------------------------------------------------------------------------------------
Sayre, PA, Health Care Facilities Authority Rev. (Latrobe Hospital),
AMBAC, 5.25%, 2015 585,000 632,824
- -------------------------------------------------------------------------------------------------------------------------------
Scranton-Lackawanna, PA, Health & Welfare Authority Rev. (Allied
Rehab Hospital), 7.125%, 2005 55,000 55,115
- -------------------------------------------------------------------------------------------------------------------------------
Southcentral Pennsylvania General Authority Rev. (York Hospital),
5.625%, 2026 600,000 631,338
- -------------------------------------------------------------------------------------------------------------------------------
St. Mary's Hospital Authority, PA, Health Systems Rev. (Catholic
Health East), "B", 5.375%, 2034 750,000 772,365
- -------------------------------------------------------------------------------------------------------------------------------
West Shore, PA, Hospital Authority (Holy Spirit Hospital),
6.25%, 2032 350,000 372,064
- -------------------------------------------------------------------------------------------------------------------------------
$12,811,817
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Clarion, PA, Industrial Development Authority Rev. (Beverly
Term Care - 1.0% Enterprises, Inc.), 7.5%, 2012 $150,000 $152,942
- -------------------------------------------------------------------------------------------------------------------------------
Cumberland County, PA, Retirement Community Rev. (Wesley Affiliated
Services), 7.25%, 2035 150,000 157,545
- -------------------------------------------------------------------------------------------------------------------------------
Lancaster County, PA, Hospital Authority Rev. (Willow Valley
Retirement Project), 5.875%, 2031 500,000 519,315
- -------------------------------------------------------------------------------------------------------------------------------
Montgomery County, PA, Industrial Development Authority Rev.
(Whitemarsh Continuing Care), 6.25%, 2035 250,000 253,938
- -------------------------------------------------------------------------------------------------------------------------------
$1,083,740
- -------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.1% Montgomery County, PA, Industrial Development Authority (Wordsworth
Academy), 8%, 2024 $150,000 $150,501
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - New Morgan, PA, Industrial Development Authority, Solid Waste
Environmental Services - 1.0% Disposal Rev. (New Morgan Landfill Co, Inc./Browning Ferris, Inc.),
6.5%, 2019 $530,000 $521,594
- -------------------------------------------------------------------------------------------------------------------------------
Westmoreland County, PA, Industrial Development Corp. (Waste
Management), LOC, 5.1%, 2018 500,000 516,930
- -------------------------------------------------------------------------------------------------------------------------------
$1,038,524
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Bucks County, PA, Industrial Development Authority Rev. (USX Corp.),
Other - 2.1% 5.4%, 2017 $300,000 $327,159
- -------------------------------------------------------------------------------------------------------------------------------
Lehigh County, PA, Industrial Development Authority Pollution Control
Rev. (PPL Electric Utility Corp.), "A", FGIC, 4.7%, 2029 500,000 490,720
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Economic Development Financing Authority Rev. (Amtrak),
6.125%, 2021 150,000 156,048
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Economic Development Financing Authority, Solid Waste
Disposal Rev. (Proctor & Gamble), 5.375%, 2031 1,000,000 1,060,100
- -------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority, Refinery Facilities Rev.
(Hovensa Refinery), 5.875%, 2022 270,000 286,200
- -------------------------------------------------------------------------------------------------------------------------------
$2,320,227
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Erie County, PA, Industrial Development Authority (International
Paper - 0.6% Paper Co.), 5.3%, 2012 $650,000 $690,086
- -------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Other - 0.2% Gallery Certificate Trust, PA, Parking Rev., FSA, 4.5%, 2013## $165,000 $164,667
- -------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Philadelphia, PA, Housing Authority Capital Program Rev., FSA,
Revenue - 1.0% 5.25%, 2014 $1,000,000 $1,103,680
- -------------------------------------------------------------------------------------------------------------------------------
Parking - 1.5% Philadelphia, PA, Public Parking Authority Rev., FSA, 5.625%, 2015 $1,000,000 $1,091,180
- -------------------------------------------------------------------------------------------------------------------------------
Pittsburgh, PA, Public Parking Authority Rev., AMBAC, 6%, 2020 500,000 557,970
- -------------------------------------------------------------------------------------------------------------------------------
$1,649,150
- -------------------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax Pittsburgh & Allegheny County, PA, Sales Tax Rev. (Public Auditorium
Revenue - 0.5% Hotel Room), AMBAC, 5.25%, 2017 $500,000 $532,250
- -------------------------------------------------------------------------------------------------------------------------------
Single Family Housing
Revenue - Local - 0.2% Pittsburgh, PA, Urban Development Authority Mortgage Rev., 5.5%, 2010 $225,000 $226,096
- -------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
State - 4.2% 5.75%, 2013 $195,000 $201,692
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5%, 2014 500,000 509,360
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5.1%, 2020 1,405,000 1,416,381
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5.25%, 2021 750,000 754,253
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5.25%, 2033 670,000 692,010
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5%, 2034 950,000 986,936
- -------------------------------------------------------------------------------------------------------------------------------
$4,560,632
- -------------------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 0.3% Delaware County, PA, Industrial Development Authority Rev., Resource
Recovery Facilities (American Ref-Fuel Co.), "A", 6.2%, 2019 $300,000 $310,533
- -------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies - 4.1% Delaware Valley, PA, Regional Finance Authority, RITES, AMBAC,
8.952%, 2018(+) $500,000 $634,380
- -------------------------------------------------------------------------------------------------------------------------------
Northumberland County, PA (Country Careers and Arts Center),
6.65%, 2020 255,000 261,357
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Convention Center Rev., 6.75%, 2019 250,000 255,958
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Industrial Development Authority, Economic Development,
AMBAC, 7%, 2007 300,000 321,063
- -------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Industrial Development Authority, FSA, 5.125%, 2026 1,000,000 1,044,530
- -------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Industrial Development Authority, FSA, 5.25%, 2030 750,000 779,625
- -------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Industrial Development Authority, MBIA, 5.35%, 2012 500,000 530,180
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2013+(+) 500,000 620,180
- -------------------------------------------------------------------------------------------------------------------------------
$4,447,273
- -------------------------------------------------------------------------------------------------------------------------------
Student Loan Revenue - 1.4% Pennsylvania Higher Education, Capital Acquistion Rev., MBIA,
5%, 2026 $1,500,000 $1,546,515
- -------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.6% Pittsburgh & Allegheny County, PA, Sales Tax Rev. (Public Auditorium
Hotel Room), AMBAC, 5.25%, 2013 $500,000 $537,845
- -------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority Rev., "A", 5.25%, 2024 135,000 141,473
- -------------------------------------------------------------------------------------------------------------------------------
$679,318
- -------------------------------------------------------------------------------------------------------------------------------
Tax Assessment - 0.3% Allegheny County, PA, Redevelopment Authority Rev. (Pittsburgh
Mills), 5.6%, 2023 $350,000 $362,709
- -------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.4% Childrens Trust Fund, Settlement Rev., PR, 5.375%, 2033 $335,000 $336,229
- -------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Tobacco Settlement Financing Corp., 5%, 2021 160,000 155,275
- -------------------------------------------------------------------------------------------------------------------------------
$491,504
- -------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Allegheny County, PA, Port Authority Special Rev., MBIA,
Tax - 6.2% 6.25%, 2009(++) $500,000 $561,930
- -------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico Highway & Transportation Authority, "Y",
5.5%, 2036 1,020,000 1,108,189
- -------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico Highway & Transportation Authority, ROLS,
MBIA, 8.633%, 2020+(+) 1,500,000 1,957,440
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Turnpike Commission, 5.5%, 2015 250,000 273,373
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Turnpike Commission, MBIA, 5%, 2024 1,775,000 1,853,473
- -------------------------------------------------------------------------------------------------------------------------------
Southeastern Pennsylvania Transportation Authority, Special Rev.,
FGIC, 5.25%, 2013 500,000 537,170
- -------------------------------------------------------------------------------------------------------------------------------
Southeastern Pennsylvania Transportation Authority, Special Rev.,
FGIC, 5.375%, 2017 500,000 530,785
- -------------------------------------------------------------------------------------------------------------------------------
$6,822,360
- -------------------------------------------------------------------------------------------------------------------------------
Universities -
Colleges - 9.7% Allegheny County, PA, (Chatham College), 5.95%, 2032 $335,000 $353,974
- -------------------------------------------------------------------------------------------------------------------------------
Cumberland County, PA, Municipal Authority (Dickinson College),
AMBAC, 5.55%, 2017 535,000 577,977
- -------------------------------------------------------------------------------------------------------------------------------
Lycoming County, PA, (College of Technology), AMBAC, 5.25%, 2032 750,000 781,875
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev. (Clarion
University Foundation), XLCA, 5%, 2023 1,000,000 1,045,950
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev. (Drexel
University), 5.2%, 2032 500,000 519,955
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev. (Drexel
University), MBIA, 5%, 2028 750,000 779,460
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev. (Indepedent
Colleges & University), FGIC, 5%, 2024 1,000,000 1,045,970
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev. (Marywood
University), MBIA, 5.5%, 2010(++) 300,000 331,341
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev. (Mercyhurst
College), "B", 5%, 2023 500,000 499,985
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev. (Widener
University), 5.375%, 2029 300,000 312,270
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Higher Educational Facilities Authority Rev. (Widener
University), 5%, 2031 300,000 300,933
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Public School Building Authority (Delaware County
College), MBIA, 5.75%, 2016 500,000 554,420
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania State University, 5%, 2029 1,000,000 1,032,530
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania State University, 5%, 2029 1,400,000 1,449,350
- -------------------------------------------------------------------------------------------------------------------------------
Union County, PA, Higher Educational Facilities Financing Authority,
University Rev. (Bucknell University), 5.25%, 2021 1,000,000 1,062,960
- -------------------------------------------------------------------------------------------------------------------------------
$10,648,950
- -------------------------------------------------------------------------------------------------------------------------------
Universities - Pennsylvania Economic Development Financing Authority (Germantown
Dormatories - 0.6% Friends School Project), 5.35%, 2031 $600,000 $625,884
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Carbon County, PA, Industrial Development Authority Rev. (Panther
Cogeneration - 0.3% Creek Partners), 6.65%, 2010 $125,000 $134,359
- -------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Economic Development Financing Authority Rev., Resources
Recovery Rev. (Northampton Generating), 6.4%, 2009 150,000 151,278
- -------------------------------------------------------------------------------------------------------------------------------
$285,637
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Pennsylvania Economic Development Financing Authority Rev. (Reliant
Owned - 0.2% Energy Seward), "A", 6.75%, 2036 $250,000 $266,608
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 4.8% Guam Power Authority Rev., RITES, AMBAC, 7.577%, 2014+(+) $2,170,000 $2,512,773
- -------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Gas Works Rev. (1998 General Ordinance), FSA,
5.25%, 2020 1,000,000 1,073,770
- -------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Gas Works Rev., FSA, 5.5%, 2016 1,000,000 1,079,750
- -------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Gas Works Rev., FSA, 5.5%, 2018 500,000 540,630
- -------------------------------------------------------------------------------------------------------------------------------
$5,206,923
- -------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 9.4% Allegheny County, PA, Sewer Rev., MBIA, 5.75%, 2017 $750,000 $833,865
- -------------------------------------------------------------------------------------------------------------------------------
Bucks County, PA, (Suburban Water Co.), FGIC, 5.55%, 2032 1,000,000 1,057,430
- -------------------------------------------------------------------------------------------------------------------------------
Delaware County, PA, Water Quality Control Authority, Sewer Rev.,
FGIC, 5%, 2018 750,000 784,125
- -------------------------------------------------------------------------------------------------------------------------------
Fairview Township, PA, Sewer Rev., FGIC, 5.05%, 2018 750,000 788,460
- -------------------------------------------------------------------------------------------------------------------------------
Johnstown, PA, Redevelopment Authority, Sewer Rev., "A", FSA,
5%, 2034 1,500,000 1,547,445
- -------------------------------------------------------------------------------------------------------------------------------
Lancaster County, PA, Water & Sewer Authority Rev., MBIA, 5%, 2028 440,000 455,787
- -------------------------------------------------------------------------------------------------------------------------------
Philadelphia, PA, Water Rev., MBIA, 5.5%, 2014 1,000,000 1,029,820
- -------------------------------------------------------------------------------------------------------------------------------
Unity Township, PA, Municipal Authority Sewer Rev., FSA, 5%, 2034 1,660,000 1,713,817
- -------------------------------------------------------------------------------------------------------------------------------
University Area Joint Authority, Sewer rev., MBIA, 5%, 2023 1,500,000 1,556,910
- -------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Water & Power Authority Rev., ASST GTY, 5.3%, 2018 500,000 528,775
- -------------------------------------------------------------------------------------------------------------------------------
$10,296,434
- -------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $101,137,600) $105,654,203
- -------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 2.8%
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "A", 2.3%, due 4/07/05 $1,355,000 $1,355,000
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "B", 2.3%, due 4/07/05 870,000 870,000
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "D", 2.3%, due 4/07/05 900,000 900,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $3,125,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $104,262,600) $108,779,203
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.6% 618,493
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $109,397,696
- -------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 MFS(R) SOUTH CAROLINA 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 - 97.4%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- -------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 2.7% Horry County, SC, "A", FSA, 5.7%, 2027 $2,250,000 $2,310,163
- -------------------------------------------------------------------------------------------------------------------------------
Richland Lexington, SC, Airport Rev. (Columbia Airport), "A", AMBAC,
5.7%, 2026 1,000,000 1,024,849
- -------------------------------------------------------------------------------------------------------------------------------
Richland Lexington, SC, Airport Rev. (Columbia Airport), "A", FSA,
5%, 2026 1,000,000 1,023,460
- -------------------------------------------------------------------------------------------------------------------------------
$4,358,472
- -------------------------------------------------------------------------------------------------------------------------------
Chemicals - 0.5% York County, SC, Industrial Rev., Exempt Facilities Hoechst Celanese,
5.7%, 2024 $850,000 $811,036
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations - General
Purpose - 6.3% Commonwealth of Puerto Rico, RITES, ETM, 8.112%, 2009+(+),(++) $2,000,000 $2,401,240
- -------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, RITES, ETM, 8.112%, 2009+(+),(++) 1,750,000 2,097,410
- -------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, RITES, MBIA, 8.612%, 2020+(+) 2,000,000 2,434,280
- -------------------------------------------------------------------------------------------------------------------------------
Hilton Head Island, SC, Rev., MBIA, 5.125%, 2022 1,000,000 1,063,330
- -------------------------------------------------------------------------------------------------------------------------------
Horry County, SC, Hospital Fee Special Obligation, 6%, 2015 915,000 1,016,364
- -------------------------------------------------------------------------------------------------------------------------------
Richard Lexington Riverbanks, SC, Parks District, FGIC, 5.8%, 2018 1,000,000 1,096,590
- -------------------------------------------------------------------------------------------------------------------------------
$10,109,214
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 1.3% Beaufort County, SC, FGIC, 5.25%, 2018 $1,000,000 $1,060,840
- -------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, RITES, FSA, 9.137%, 2016+(+) 850,000 1,043,834
- -------------------------------------------------------------------------------------------------------------------------------
$2,104,674
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 10.6% Anderson County, SC, School District, "B", 5.5%, 2018 $1,465,000 $1,592,426
- -------------------------------------------------------------------------------------------------------------------------------
Beaufort County, SC, School District, "B", 5.625%, 2009(++) 2,000,000 2,184,360
- -------------------------------------------------------------------------------------------------------------------------------
Berkeley County, SC, School District, 5%, 2008(++) 2,000,000 2,153,720
- -------------------------------------------------------------------------------------------------------------------------------
Chesterfield County, SC, School District, FSA, 5%, 2023 3,000,000 3,127,830
- -------------------------------------------------------------------------------------------------------------------------------
Darlington County, SC, School District, FSA, 5%, 2027 2,770,000 2,895,370
- -------------------------------------------------------------------------------------------------------------------------------
Orangeburg County, SC, Consolidated School District, FSA, 5.25%, 2020 1,065,000 1,143,927
- -------------------------------------------------------------------------------------------------------------------------------
Orangeburg County, SC, Consolidated School District, FSA, 5.375%, 2022 2,050,000 2,219,125
- -------------------------------------------------------------------------------------------------------------------------------
Richland County, SC, School District, 5.1%, 2021 1,750,000 1,840,895
- -------------------------------------------------------------------------------------------------------------------------------
$17,157,653
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Charleston County, SC, Hospital Facilities Rev. (Medical Society
Hospitals - 19.5% Health), MBIA, ETM, 5%, 2022(++) $2,450,000 $2,465,754
- -------------------------------------------------------------------------------------------------------------------------------
Florence County, SC, Hospital Rev. (McLeod Regional Medical Center),
"A", 5%, 2031 2,000,000 2,056,640
- -------------------------------------------------------------------------------------------------------------------------------
Florence County, SC, Hospital Rev. (McLeod Regional Medical Center),
"A", FSA, 5.25%, 2034 2,000,000 2,091,780
- -------------------------------------------------------------------------------------------------------------------------------
Greenville, SC, Hospital Systems, Hospital Facilities Rev., 6%, 2020 3,400,000 3,970,010
- -------------------------------------------------------------------------------------------------------------------------------
Greenwood County, SC, Hospital Facilities Rev. (Self Memorial
Hospital), 5.5%, 2021 1,000,000 1,035,810
- -------------------------------------------------------------------------------------------------------------------------------
Lexington County, SC, Health Services District, Inc., 5.5%, 2032 250,000 262,365
- -------------------------------------------------------------------------------------------------------------------------------
Lexington County, SC, Health Services District, Inc., 5.5%, 2037 250,000 261,803
- -------------------------------------------------------------------------------------------------------------------------------
Lexington County, SC, Health Services District, Inc., Hospital Rev.,
Refunding & Improvement, 5.5%, 2032 1,000,000 1,045,110
- -------------------------------------------------------------------------------------------------------------------------------
Lexington County, SC, Health Services District, Inc., Hospital Rev.,
Refunding & Improvement, FSA, 5.125%, 2021 1,500,000 1,571,280
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Anderson Area Medical Center, Inc.), MBIA,
5.25%, 2015 1,750,000 1,817,130
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Georgetown Memorial Hospital), ASST GTY, 5.25%, 2021 1,500,000 1,572,975
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Palmetto Health Alliance), 6.25%, 2031 750,000 804,158
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority (Bon Secours
Health Systems, Inc.), "A", 5.625%, 2030 1,250,000 1,283,750
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Georgetown Memorial Hospital), AMBAC, 5%, 2023 1,000,000 1,026,360
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Hospital
Facilties Rev. (Georgetown Memorial Hospital), AMBAC, 6%, 2014 1,000,000 1,115,530
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Medical University, Hospital Facilities Rev, "A",
MBIA, 5%, 2031 3,100,000 3,167,239
- -------------------------------------------------------------------------------------------------------------------------------
Spartanburg County, SC, Health Service Rev., AMBAC, 5.3%, 2020 2,500,000 2,558,325
- -------------------------------------------------------------------------------------------------------------------------------
Spartanburg County, SC, Health Service Rev., AMBAC, 5.3%, 2025 1,000,000 1,023,250
- -------------------------------------------------------------------------------------------------------------------------------
Spartanburg County, SC, Health Service Rev., FSA, 5.25%, 2032 2,250,000 2,345,175
- -------------------------------------------------------------------------------------------------------------------------------
$31,474,444
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long
Term Care - 1.2% Greenville County, SC, Hospital Rev. (Chestnut Hill) "A", 8%, 2015 $1,505,000 $1,497,761
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Residential
Care Facilities (Episcopal Home), "A", 6.375%, 2032 400,000 408,196
- -------------------------------------------------------------------------------------------------------------------------------
$1,905,957
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Calhoun County, SC, Solid Waste Disposal Facilities Rev. (Carolina
Other - 1.0% Eastman Co.), ETM, 6.75%, 2017(++) $1,000,000 $1,238,790
- -------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority, Refinery Facilities Rev.
(Hovensa Refinery), 5.875%, 2022 385,000 408,100
- -------------------------------------------------------------------------------------------------------------------------------
$1,646,890
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Darlington County, SC, Industrial Development Rev. (Sonoco Products
Paper - 2.0% Co.), 6.125%, 2025 $1,500,000 $1,539,765
- -------------------------------------------------------------------------------------------------------------------------------
Florence County, SC, Industrial Development Rev. (Stone Container
Corp.), 7.375%, 2007 225,000 225,585
- -------------------------------------------------------------------------------------------------------------------------------
Georgetown County, SC, Environmental Improvement Rev., International
Paper, "A", 5.3%, 2028 500,000 491,510
- -------------------------------------------------------------------------------------------------------------------------------
Richland County, SC, Environmental Improvement Rev., International
Paper, "A", 6.1%, 2023 1,000,000 1,050,780
- -------------------------------------------------------------------------------------------------------------------------------
$3,307,640
- -------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment &
Tourism - 1.5% Myrtle Beach, SC, Hospitality Fee Rev., "A", FGIC, 5%, 2036 $510,000 $525,071
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority (Myrtle Beach
Convention), "B", MBIA, 5.125%, 2018 570,000 598,586
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority (Myrtle Beach
Convention), "B", MBIA, 5.125%, 2019 595,000 629,361
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority (Myrtle Beach
Convention), "B", MBIA, 5.125%, 2020 630,000 664,663
- -------------------------------------------------------------------------------------------------------------------------------
$2,417,681
- -------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing South Carolina Housing, Finance & Development Authority (Hunting
Revenue - 1.5% Ridge Apartments), 6.75%, 2025 $1,000,000 $1,021,270
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Housing, Finance & Development Authority (Runaway Bay
Apartments), 6.125%, 2015 1,300,000 1,336,608
- -------------------------------------------------------------------------------------------------------------------------------
$2,357,878
- -------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - South Carolina Housing, Finance & Development Amt, "A-2", FSA,
State - 2.2% 5.2%, 2035 $1,000,000 $1,011,270
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Housing, Finance & Development Authority Rev., "A-2",
FSA, 6%, 2020 460,000 460,147
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Housing, Finance & Development Authority Rev., "A-2",
FSA, 5.35%, 2024 2,000,000 2,037,160
- -------------------------------------------------------------------------------------------------------------------------------
$3,508,577
- -------------------------------------------------------------------------------------------------------------------------------
State & Agency -
Other - 1.8% Greenville County, SC (University Center), "A", AMBAC, 5.25%, 2019 $1,000,000 $1,088,930
- -------------------------------------------------------------------------------------------------------------------------------
Richland County, SC, Certificates of Participation, FGIC, ETM,
0%, 2006(++) 1,160,000 1,135,164
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Water Resources Authority Rev. (Local Government
Program), "A", 7.25%, 2020 685,000 688,644
- -------------------------------------------------------------------------------------------------------------------------------
$2,912,738
- -------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies - 3.9% North Charleston, SC, Municipal Golf Course Mortgage Rev.,
5.5%, 2009(++) $1,000,000 $1,096,330
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., 5.75%, 2007(++) 1,000,000 1,053,830
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2013+(+) 1,375,000 1,705,495
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2019+(+) 1,300,000 1,655,966
- -------------------------------------------------------------------------------------------------------------------------------
Spartanburg, SC, Public Facilities Corp. (Renaissance Park), AMBAC,
5.125%, 2025 685,000 717,113
- -------------------------------------------------------------------------------------------------------------------------------
$6,228,734
- -------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.1% Virgin Islands Public Finance Authority Rev., "A", 5.25%, 2024 $180,000 $188,631
- -------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.6% South Carolina Tobacco Settlement Authority, 6.375%, 2028 $1,000,000 $1,015,500
- -------------------------------------------------------------------------------------------------------------------------------
Transportation - Special South Carolina Transportation Infrastructure Rev., "A", AMBAC,
Tax - 1.0% 5%, 2023 $500,000 $520,205
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Transportation Infrastructure Rev., "A", MBIA,
5.375%, 2018 1,000,000 1,081,530
- -------------------------------------------------------------------------------------------------------------------------------
$1,601,735
- -------------------------------------------------------------------------------------------------------------------------------
Universities - Charleston, SC, Academic & Administrative Facilities Rev., "B", XLCA,
Colleges - 10.0% 5.125%, 2034 $1,510,000 $1,573,465
- -------------------------------------------------------------------------------------------------------------------------------
Clemson University, University Rev., AMBAC, 6.25%, 2015 1,250,000 1,400,850
- -------------------------------------------------------------------------------------------------------------------------------
College Charleston, SC, Higher Education Facility Rev., "A", FGIC,
5.25%, 2028 2,435,000 2,564,347
- -------------------------------------------------------------------------------------------------------------------------------
College of Charleston, SC, Academic & Administrative Facilities Rev.,
"B", XLCA, 5%, 2024 800,000 833,504
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Educational Facilities Authority (Furman University),
AMBAC, 5.375%, 2020 1,245,000 1,347,588
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Educational Facilities Authority (Furman University),
AMBAC, 5.5%, 2030 2,000,000 2,146,260
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority, Student Housing
Rev. (FMU Francis Marion University), "A", MBIA, 5%, 2034 1,945,000 1,995,901
- -------------------------------------------------------------------------------------------------------------------------------
University of South Carolina, University Rev., "A", FGIC, 5.625%, 2020 1,555,000 1,689,679
- -------------------------------------------------------------------------------------------------------------------------------
University of South Carolina, University Rev., MBIA, 5.75%, 2026 515,000 537,063
- -------------------------------------------------------------------------------------------------------------------------------
University of South Carolina, University Rev., "A", 5%, 2034 2,000,000 2,049,300
- -------------------------------------------------------------------------------------------------------------------------------
$16,137,957
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal Camden, SC, Public Utility Rev., Refunding & Improvement, MBIA,
Owned - 9.6% 5.5%, 2017 $1,500,000 $1,594,365
- -------------------------------------------------------------------------------------------------------------------------------
Easley, SC, Utility Rev., FSA, 5%, 2027 1,000,000 1,036,610
- -------------------------------------------------------------------------------------------------------------------------------
Greenwood, SC, Combined Public Utility, Refunding & Improvement
Systems, MBIA, 5%, 2021 175,000 183,895
- -------------------------------------------------------------------------------------------------------------------------------
Orangeburg County, SC, Solid Waste Disposal Facilities Rev., Electric
& Gas, AMBAC, 5.7%, 2024 2,000,000 2,005,860
- -------------------------------------------------------------------------------------------------------------------------------
Piedmont, SC, Municipal Power Agency, FGIC, 6.25%, 2021 2,600,000 3,195,504
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., "RR", XLCA, 5%, 2030 875,000 909,064
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority, RITES, FSA, 7.559%, 2015+(+) 1,000,000 1,121,750
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Public Service Authority, "A", AMBAC, 5%, 2034 2,000,000 2,056,900
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Public Service Authority, "A", MBIA, 5.5%, 2018 200,000 216,550
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Public Service Authority, "B", AMBAC, 5.5%, 2023 1,000,000 1,039,080
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Public Service Authority, "B", FGIC, 5.875%, 2023 500,000 522,075
- -------------------------------------------------------------------------------------------------------------------------------
South Carolina Public Service Authority, "B", FSA, 5.125%, 2037 1,500,000 1,545,960
- -------------------------------------------------------------------------------------------------------------------------------
$15,427,613
- -------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 20.1% Anderson County, SC, Joint Municipal Water, FSA, 5%, 2032 $1,000,000 $1,028,170
- -------------------------------------------------------------------------------------------------------------------------------
Anderson, SC, Water & Sewer Systems Rev., FGIC, 5.125%, 2032 2,000,000 2,086,520
- -------------------------------------------------------------------------------------------------------------------------------
Charleston, SC, Waterworks & Sewer Rev., Capital Improvement, "B",
5%, 2028 1,000,000 1,026,380
- -------------------------------------------------------------------------------------------------------------------------------
Columbia, SC, Waterworks & Sewer Systems Rev., 0%, 2006 9,330,000 9,111,678
- -------------------------------------------------------------------------------------------------------------------------------
Columbia, SC, Waterworks & Sewer Systems Rev., 6%, 2010(++) 2,000,000 2,240,700
- -------------------------------------------------------------------------------------------------------------------------------
Greenville, SC, Stormwater Systems, FSA, 5%, 2022 595,000 625,773
- -------------------------------------------------------------------------------------------------------------------------------
Greenville, SC, Waterworks Rev., 5.5%, 2007(++) 1,000,000 1,067,540
- -------------------------------------------------------------------------------------------------------------------------------
Greenville, SC, Waterworks Rev., 5.25%, 2020 860,000 925,558
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Aqueduct & Sewer Authority Rev., 9%, 2005(++) 445,000 452,027
- -------------------------------------------------------------------------------------------------------------------------------
Rock Hill, SC, Utility Systems Rev., Refunding & Improvement, "A",
FSA, 5.375%, 2023 500,000 539,810
- -------------------------------------------------------------------------------------------------------------------------------
Spartanburg, SC, San Sewer District, Sewer Systems Rev., "B", MBIA,
5%, 2034 4,000,000 4,115,680
- -------------------------------------------------------------------------------------------------------------------------------
Spartanburg, SC, Water & Sewer Authority Rev., "B", MBIA, 5.25%, 2030 1,000,000 1,060,520
- -------------------------------------------------------------------------------------------------------------------------------
Spartanburg, SC, Waterworks Rev., FGIC, 6.05%, 2006(++) 2,750,000 2,857,195
- -------------------------------------------------------------------------------------------------------------------------------
Western Carolina Regional Sewer Authority Rev., AMBAC, 0%, 2007 4,000,000 3,782,920
- -------------------------------------------------------------------------------------------------------------------------------
York County, SC, Water & Sewer Rev., Refunding & Capital Improvement,
MBIA, 5%, 2027 1,490,000 1,549,540
- -------------------------------------------------------------------------------------------------------------------------------
$32,470,011
- -------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $146,548,556) $157,143,035
- -------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.8%
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "A", 2.3%, due 4/07/05 $100,000 $100,000
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "D", 2.3%, due 4/07/05 700,000 700,000
- -------------------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, California Toll Bridge Rev., "A",
2.22%, due 4/07/05 1,300,000 1,300,000
- -------------------------------------------------------------------------------------------------------------------------------
Illinois Health Facilities Authority Rev. (University of Chicago
Hospital), 2.3%, due 4/01/05 600,000 600,000
- -------------------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, Sewer Rev., Warrants, "B-4", 2.3%, due 4/07/05 100,000 100,000
- -------------------------------------------------------------------------------------------------------------------------------
Oklahoma Industries Authority, Health System Rev. (Integris Baptist
Medical Center), "B", 1.10%, 2.3%, due 4/01/05 100,000 100,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $2,900,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $149,448,556) $160,043,035
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.8% 1,330,743
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $161,373,778
- -------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 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 - 97.6%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- -------------------------------------------------------------------------------------------------------------------------------
Airport and Port Memphis-Shelby County, TN, Airport Authority Facilities Rev., FSA,
Revenue - 1.2% 5.125%, 2021 $1,500,000 $1,541,820
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations - General Commonwealth of Puerto Rico, Unrefunded, Public Improvement, FSA,
Purpose - 5.7% 5%, 2024 $770,000 $801,739
- -------------------------------------------------------------------------------------------------------------------------------
Lincoln County, TN, School Improvement, FGIC, 5.8%, 2007(++) 1,000,000 1,068,110
- -------------------------------------------------------------------------------------------------------------------------------
Lincoln County, TN, School Improvement, FGIC, 5.8%, 2007(++) 1,000,000 1,068,110
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth, 5.4%, 2006(++) 3,000,000 3,145,200
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Building Authority, 5.5%, 2021 1,000,000 1,125,370
- -------------------------------------------------------------------------------------------------------------------------------
$7,208,529
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 4.2% Chattanooga, TN, Public Improvement, 5%, 2021 $2,570,000 $2,658,511
- -------------------------------------------------------------------------------------------------------------------------------
Knoxville, TN, Recreational Facilities Improvement, 5.5%, 2008(++) 645,000 697,858
- -------------------------------------------------------------------------------------------------------------------------------
Williamson County, TN, Public Improvement, 5%, 2018 1,760,000 1,867,483
- -------------------------------------------------------------------------------------------------------------------------------
$5,223,852
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 14.9% Fayette County, TN, School District, AMBAC, 5.6%, 2008(++) $1,215,000 $1,301,860
- -------------------------------------------------------------------------------------------------------------------------------
Gibson County, TN, School District, MBIA, 5.75%, 2009(++) 455,000 499,913
- -------------------------------------------------------------------------------------------------------------------------------
Gibson County, TN, School District, MBIA, 5.75%, 2016 190,000 209,055
- -------------------------------------------------------------------------------------------------------------------------------
Giles County, TN, School Improvement, FGIC, 5.75%, 2010(++) 1,980,000 2,196,394
- -------------------------------------------------------------------------------------------------------------------------------
Greene County, TN, Rural School, FGIC, 5%, 2020 1,240,000 1,293,928
- -------------------------------------------------------------------------------------------------------------------------------
Greene County, TN, Rural School, FGIC, 5%, 2021 1,300,000 1,355,107
- -------------------------------------------------------------------------------------------------------------------------------
Milan, TN, Special School District, MBIA, 5%, 2021 1,000,000 1,041,430
- -------------------------------------------------------------------------------------------------------------------------------
Roane County, TN, Rural School, FGIC, 5.6%, 2008(++) 915,000 980,084
- -------------------------------------------------------------------------------------------------------------------------------
Roane County, TN, Rural School, FGIC, 5.6%, 2008(++) 975,000 1,044,352
- -------------------------------------------------------------------------------------------------------------------------------
Rutherford County, TN, School & Public Improvement, 5%, 2022 1,510,000 1,579,445
- -------------------------------------------------------------------------------------------------------------------------------
Rutherford County, TN, School District, 5.875%, 2010(++) 1,100,000 1,230,383
- -------------------------------------------------------------------------------------------------------------------------------
Rutherford County, TN, School Improvement, 0%, 2007(++) 1,500,000 894,150
- -------------------------------------------------------------------------------------------------------------------------------
Rutherford County, TN, School Improvement, 5.875%, 2010(++) 2,000,000 2,237,060
- -------------------------------------------------------------------------------------------------------------------------------
Rutherford County, TN, School Improvement, 5%, 2011(++) 1,000,000 1,083,780
- -------------------------------------------------------------------------------------------------------------------------------
Williamson County, TN, Rural School, 6.125%, 2010(++) 1,575,000 1,772,663
- -------------------------------------------------------------------------------------------------------------------------------
$18,719,604
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Jackson, TN, Hospital Rev. (Jackson-Madison County General Hospital),
Hospitals - 12.4% AMBAC, 5%, 2018 $1,000,000 $1,043,630
- -------------------------------------------------------------------------------------------------------------------------------
Johnson City, TN, Health & Education Financing Authority Rev.
(Johnson City Medical Center Hospital), MBIA, 5.25%, 2016 1,375,000 1,407,299
- -------------------------------------------------------------------------------------------------------------------------------
Johnson City, TN, Health & Education Financing Authority Rev.
(Johnson City Medical Center Hospital), MBIA, ETM, 5%, 2018(++) 1,500,000 1,562,865
- -------------------------------------------------------------------------------------------------------------------------------
Knox County, TN, Health Educational Housing Facilities Board,
Hospital Facilities Rev. (Baptist Health Systems), 6.5%, 2031 300,000 310,233
- -------------------------------------------------------------------------------------------------------------------------------
Knox County, TN, Health, Education & Housing Facilities Board Rev.
(Catholic Healthcare Partners), 5.25%, 2030 1,000,000 1,028,660
- -------------------------------------------------------------------------------------------------------------------------------
Knox County, TN, Health, Education & Housing Facilities Board Rev.
(Covenent Health), FSA, 5%, 2022 1,000,000 1,039,590
- -------------------------------------------------------------------------------------------------------------------------------
Knox County, TN, Health, Education & Housing Facilities Board Rev.
(East Tennessee Children's Hospital), 5.75%, 2033 450,000 468,513
- -------------------------------------------------------------------------------------------------------------------------------
Knox County, TN, Health, Education & Housing Facilities Board Rev.
(Fort Sanders), MBIA, 5.75%, 2014 3,250,000 3,681,145
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN, Health,
Educational & Housing Facilities Board Rev. (Adventist Health
System), 5.25%, 2020 1,000,000 1,028,830
- -------------------------------------------------------------------------------------------------------------------------------
Shelby County, TN, Health Educational & Housing Facilities Board Rev.
(St. Judes Children's Research), 5.5%, 2020 1,750,000 1,842,208
- -------------------------------------------------------------------------------------------------------------------------------
Shelby County, TN, Health Educational & Housing Facilities Hospital
Rev., (Methodist Healthcare), 6.5%, 2012(++) 625,000 737,875
- -------------------------------------------------------------------------------------------------------------------------------
Shelby County, TN, Health Educational & Housing Facilities Hospital
Rev., (Methodist Healthcare), ETM, 6.5%, 2021(++) 375,000 441,458
- -------------------------------------------------------------------------------------------------------------------------------
Springfield, TN, Health & Higher Educational Facilities Hospital Rev.
(Northcrest Medical Center), 5.25%, 2013 1,000,000 1,013,810
- -------------------------------------------------------------------------------------------------------------------------------
$15,606,116
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Shelby County, TN, Health Educational Rev. (Germantown Village),
Term Care - 0.6% 7.25%, 2034 $500,000 $518,855
- -------------------------------------------------------------------------------------------------------------------------------
Shelby County, TN, Nursing Home Rev. (Beverly Enterprises, Inc.),
7.4%, 2006(++) 260,000 281,765
- -------------------------------------------------------------------------------------------------------------------------------
$800,620
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Metropolitan Knoxville, TN, Airport Authority Special Purpose Rev.
Airlines - 0.1% (Northwest Airlines), 8%, 2032 $150,000 $148,312
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Other - 2.5% Hardeman County, TN, Correctional Facilities Rev., 7.75%, 2017 $1,000,000 $1,041,010
- -------------------------------------------------------------------------------------------------------------------------------
Humphreys County, TN, Industrial Rev. DuPont, 6.7%, 2024 1,750,000 1,773,852
- -------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority, Refinery Facilities Rev.
(Hovensa Refinery), 5.875%, 2022 320,000 339,200
- -------------------------------------------------------------------------------------------------------------------------------
$3,154,062
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - McMinn County, TN, Industrial Development Board, Pollution Control
Paper - 0.8% Rev. (Bowater, Inc.), 7.625%, 2016 $1,000,000 $1,008,840
- -------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment &
Tourism - 3.1% Memphis-Shelby County, TN (Memphis Sports Arena), AMBAC, 5.125%, 2028 $2,000,000 $2,084,600
- -------------------------------------------------------------------------------------------------------------------------------
Memphis-Shelby County, TN (Memphis Sports Arena), AMBAC, 5.35%, 2029 1,665,000 1,781,350
- -------------------------------------------------------------------------------------------------------------------------------
$3,865,950
- -------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Chattanooga, TN, Health, Educational & Housing Facilities (Rainbow
Revenue - 3.7% Creek), GNMA, 6.125%, 2019 $445,000 $471,736
- -------------------------------------------------------------------------------------------------------------------------------
Franklin, TN, Industrial Development Rev. (Landings Apartments), FSA,
6%, 2026 1,000,000 1,034,070
- -------------------------------------------------------------------------------------------------------------------------------
Memphis, TN, Health & Educational Facilities Board Rev. (Hickory
Point Apartments), MBIA, 5.85%, 2020 1,000,000 1,039,130
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN, Health &
Educational & Housing Facilities Board Rev. (Berkshire Place), GNMA,
6%, 2023 500,000 524,875
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN, Health,
Educational & Housing Facilities Board Rev. (Herman Street), FHA,
7.25%, 2032 495,000 495,713
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Housing Finance Authority Rev., 5%, 2020 1,000,000 1,054,010
- -------------------------------------------------------------------------------------------------------------------------------
$4,619,534
- -------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 11.8% Tennessee Housing Development Agency Mortgage Finance, 5.2%, 2023 $1,500,000 $1,555,305
- -------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Mortgage Finance, 5.35%, 2034 2,000,000 2,037,160
- -------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
5.45%, 2014 2,535,000 2,602,051
- -------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
4.45%, 2017 645,000 632,816
- -------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
4.45%, 2017 660,000 647,143
- -------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
4.55%, 2018 575,000 564,604
- -------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
4.55%, 2018 690,000 677,173
- -------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
6%, 2020 1,585,000 1,626,670
- -------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
5.05%, 2027 975,000 975,507
- -------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
5.25%, 2034 1,500,000 1,570,635
- -------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
FSA, 5.4%, 2032 855,000 862,122
- -------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
FSA, 4.15%, 2033 745,000 754,454
- -------------------------------------------------------------------------------------------------------------------------------
Tennessee Housing Development Agency Rev., Homeownership Program,
MBIA, 6.125%, 2020 235,000 240,123
- -------------------------------------------------------------------------------------------------------------------------------
$14,745,763
- -------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies - 6.7% Chattanooga,TN, Industrial Development Board, AMBAC, 5.75%, 2018 $1,000,000 $1,102,550
- -------------------------------------------------------------------------------------------------------------------------------
Knoxville, TN, Community Development Corp. 5%, 2024 1,000,000 1,038,150
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., 5.75%, 2007(++) 2,000,000 2,107,660
- -------------------------------------------------------------------------------------------------------------------------------
State of Tennessee, School Bond Authority (Higher Education
Facilities), FSA, 5%, 2017 1,000,000 1,056,000
- -------------------------------------------------------------------------------------------------------------------------------
State of Tennessee, School Bond Authority (Higher Education
Facilities), FSA, 5.25%, 2029 3,000,000 3,153,450
- -------------------------------------------------------------------------------------------------------------------------------
$8,457,810
- -------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.6% Virgin Islands Public Finance Authority Rev., "E", 5.875%, 2018 $730,000 $752,579
- -------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.8% Guam Economic Development Authority, Tobacco Settlement, "B",
5.5%, 2041 $350,000 $336,801
- -------------------------------------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corp., 5%, 2031 750,000 674,385
- -------------------------------------------------------------------------------------------------------------------------------
$1,011,186
- -------------------------------------------------------------------------------------------------------------------------------
Universities - Metropolitan Government of Nashville & Davidson County, TN, Health,
Colleges - 3.9% Educational & Housing Facilities Board Rev. (McKendree Village,
Inc.), 5.125%, 2020 $1,000,000 $1,028,210
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN, Health,
Educational & Housing Facilities Board Rev. (Meharry Medical
College), AMBAC, 5%, 2024 3,750,000 3,878,587
- -------------------------------------------------------------------------------------------------------------------------------
$4,906,797
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 6.4% Jackson, TN, Electrical Systems Rev., MBIA, 5%, 2018 $1,000,000 $1,028,170
- -------------------------------------------------------------------------------------------------------------------------------
Lawrenceburg, TN, Electrical Rev., MBIA, 5.5%, 2009(++) 1,255,000 1,369,029
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN,
Electrical Rev., 5.125%, 2021 1,500,000 1,574,040
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN,
Electrical Rev., "A", AMBAC, 5%, 2029 1,500,000 1,550,940
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Government of Nashville & Davidson County, TN,
Electrical Rev., MBIA, 0%, 2012 3,305,000 2,462,688
- -------------------------------------------------------------------------------------------------------------------------------
$7,984,867
- -------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Hallsdale-Powell Utility District, TN, Water & Sewer Rev., "A", FGIC,
Revenue - 18.2% 5%, 2024 $1,500,000 $1,562,115
- -------------------------------------------------------------------------------------------------------------------------------
Hallsdale-Powell Utility District, TN, Water & Sewer Rev., FGIC,
5%, 2027 3,000,000 3,103,770
- -------------------------------------------------------------------------------------------------------------------------------
Harpeth Valley, TN, Utilities Improvements Rev., MBIA, 5.05%, 2020 1,925,000 2,021,943
- -------------------------------------------------------------------------------------------------------------------------------
Knox County, TN, Hallsdale-Powell Utility District, Water & Sewer
Rev., "B", FGIC, 5%, 2034 500,000 513,580
- -------------------------------------------------------------------------------------------------------------------------------
Madison, TN, Utility Waterworks Rev., MBIA, 5%, 2019 2,750,000 2,845,590
- -------------------------------------------------------------------------------------------------------------------------------
Memphis, TN, Sewage Systems Rev., 5.75%, 2016 625,000 675,406
- -------------------------------------------------------------------------------------------------------------------------------
Memphis, TN, Sewage Systems Rev., 5.75%, 2018 1,145,000 1,237,344
- -------------------------------------------------------------------------------------------------------------------------------
Memphis, TN, Sewage Systems Rev., 5.75%, 2020 750,000 816,465
- -------------------------------------------------------------------------------------------------------------------------------
Rutherford County, TN, Water Rev., MBIA, 5%, 2027 770,000 803,995
- -------------------------------------------------------------------------------------------------------------------------------
West Knox Utility District, TN, Water & Sewer Rev., MBIA, ETM,
0%, 2006(++) 1,920,000 1,832,429
- -------------------------------------------------------------------------------------------------------------------------------
West Knox Utility District, TN, Water & Sewer Rev., MBIA, ETM,
0%, 2007(++) 1,920,000 1,769,856
- -------------------------------------------------------------------------------------------------------------------------------
West Wilson Utility District, TN, Waterworks Rev., MBIA, 5.25%, 2030 2,000,000 2,116,040
- -------------------------------------------------------------------------------------------------------------------------------
White House Utility District, TN, Water & Sewer Rev. (Robertson &
Sumner Counties Waterworks), FSA, 6%, 2010(++) 1,000,000 1,118,420
- -------------------------------------------------------------------------------------------------------------------------------
White House Utility District, TN, Water & Sewer Rev. (Robertson &
Sumner Counties Waterworks), FSA, 5%, 2021 800,000 831,872
- -------------------------------------------------------------------------------------------------------------------------------
White House Utility District, TN, Water & Sewer Rev. (Robertson &
Sumner Counties Waterworks), FSA, 5%, 2032 1,500,000 1,536,075
- -------------------------------------------------------------------------------------------------------------------------------
$22,784,900
- -------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $115,337,691) $122,541,141
- -------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.0%
- -------------------------------------------------------------------------------------------------------------------------------
Pinellas County, FL, Health Facilities Authority Rev., Pooled
Hospital Loan Program, 2.3%, due 4/01/05 $200,000 $200,000
- -------------------------------------------------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority, Government Public
Improvement, 2.31%, due 4/07/05 200,000 200,000
- -------------------------------------------------------------------------------------------------------------------------------
South Blount County, TN, Utility District Rev., 2.32%, due 4/01/05 800,000 800,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $1,200,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $116,537,691) $123,741,141
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.4% 1,784,776
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $125,525,917
- -------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 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 - 97.4%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- -------------------------------------------------------------------------------------------------------------------------------
Airport & Port Metropolitan Washington, DC, Airport Authority Rev., "A", FGIC,
Revenue - 7.8% 5.125%, 2024 $1,000,000 $1,030,170
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Washington, DC, Airport Authority Rev., "A", FGIC,
5%, 2025 705,000 717,683
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Washington, DC, Airport Authority Rev., "A", MBIA,
5%, 2035 3,000,000 3,014,520
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Washington, DC, Airport Authority Rev., "B", 5.5%, 2016 2,465,000 2,575,282
- -------------------------------------------------------------------------------------------------------------------------------
Metropolitan Washington, DC, Airport Authority Rev., "B", 5.75%, 2020 11,000,000 11,556,710
- -------------------------------------------------------------------------------------------------------------------------------
Norfolk, VA, Airport Authority Rev., "A", FGIC, 5.375%, 2017 1,755,000 1,899,031
- -------------------------------------------------------------------------------------------------------------------------------
Norfolk, VA, Airport Authority Rev., "A", FGIC, 5%, 2022 3,000,000 3,108,660
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority, Airport Rev., "B", 5.125%, 2027 720,000 737,381
- -------------------------------------------------------------------------------------------------------------------------------
$24,639,437
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations - General
Purpose - 2.0% Bristol, VA, MBIA, 5.3%, 2008(++) $1,250,000 $1,356,725
- -------------------------------------------------------------------------------------------------------------------------------
Lebanon, VA, 6.375%, 2006(++) 1,625,000 1,744,064
- -------------------------------------------------------------------------------------------------------------------------------
Stafford County, VA, Industrial Development Authority Rev., "B",
MBIA, 5%, 2034 3,060,000 3,163,489
- -------------------------------------------------------------------------------------------------------------------------------
$6,264,278
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 14.4% Chesterfield County, VA, 6%, 2010(++) $1,900,000 $2,126,708
- -------------------------------------------------------------------------------------------------------------------------------
Chesterfield County, VA, 5%, 2020 2,015,000 2,121,090
- -------------------------------------------------------------------------------------------------------------------------------
Hampton, VA, Public Improvement, 6%, 2010(++) 3,280,000 3,730,836
- -------------------------------------------------------------------------------------------------------------------------------
Hampton, VA, Public Improvement, 6%, 2010(++) 3,480,000 3,958,326
- -------------------------------------------------------------------------------------------------------------------------------
Loudoun County, VA, Public Improvement, "B", 5.375%, 2010(++) 2,650,000 2,914,417
- -------------------------------------------------------------------------------------------------------------------------------
Lynchburg, VA, Public Improvement, 5.6%, 2010(++) 1,765,000 1,972,617
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Municipal Finance Agency, RITES, FSA, 9.137%, 2016+(+) 1,105,000 1,356,984
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Municipal Finance Agency, RITES, FSA, 8.129%, 2017+(+) 615,000 724,458
- -------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, 0%, 2006 1,000,000 979,880
- -------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, 0%, 2006 2,500,000 2,449,700
- -------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, 0%, 2008 2,000,000 1,825,180
- -------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, "A", FSA, 5.125%, 2024 5,000,000 5,250,100
- -------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, "B", 0%, 2007 5,280,000 5,014,786
- -------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, "B", 0%, 2008 5,270,000 4,809,349
- -------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, "B", 0%, 2009 5,175,000 4,500,646
- -------------------------------------------------------------------------------------------------------------------------------
Suffolk, VA, Public Improvement, 5.5%, 2020 1,880,000 2,025,362
- -------------------------------------------------------------------------------------------------------------------------------
$45,760,439
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 0.4% Harrisonburg, VA, Public Recreation Facilities, FSA, 5.75%, 2029 $1,000,000 $1,112,880
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Albemarle County, VA, Industrial Development Authority, Hospital Rev.
Hospitals - 13.2% (Martha Jefferson Hospital), 5.25%, 2023 $3,000,000 $3,065,130
- -------------------------------------------------------------------------------------------------------------------------------
Arlington County, VA, Industrial Development Authority Rev.
(Virginia, Hospital Center Arlington Health Systems), 5.25%, 2021 2,600,000 2,700,100
- -------------------------------------------------------------------------------------------------------------------------------
Fredericksburg, VA, Industrial Development Rev. (Medicorp Health
Systems), "B", 5.125%, 2033 750,000 756,000
- -------------------------------------------------------------------------------------------------------------------------------
Fredericksburg, VA, Industrial Development Rev. (Medicorp Health
Systems), AMBAC, 5.25%, 2023 11,000,000 11,486,310
- -------------------------------------------------------------------------------------------------------------------------------
Henrico County, VA, Economic Development Authority Rev. (Bon Secours
Health Systems, Inc.), "A", 5.6%, 2030 2,000,000 2,087,940
- -------------------------------------------------------------------------------------------------------------------------------
Henrico County, VA, Industrial Development Authority Rev. (Bon
Secours Health Systems, Inc.), MBIA, 6.25%, 2020 1,500,000 1,790,130
- -------------------------------------------------------------------------------------------------------------------------------
Loudoun County, VA, Industrial Development Authority, Hospital Rev.
(Loudoun Hospital Center), "A", 6.1%, 2032 1,000,000 1,065,280
- -------------------------------------------------------------------------------------------------------------------------------
Lynchburg, VA, Industrial Development Authority, Healthcare
Facilities Rev. (Central Health), 5.2%, 2008(++) 855,000 912,182
- -------------------------------------------------------------------------------------------------------------------------------
Lynchburg, VA, Industrial Development Authority, Healthcare
Facilities Rev., Unrefunded Balance (Central Health), 5.2%, 2018 145,000 152,307
- -------------------------------------------------------------------------------------------------------------------------------
Medical College of Virginia, Hospital Authority Rev., MBIA,
5.125%, 2018 3,000,000 3,133,380
- -------------------------------------------------------------------------------------------------------------------------------
Peninsula Ports Authority Rev. (Whittaker Memorial), FHA, 8.7%, 2023 2,050,000 2,431,895
- -------------------------------------------------------------------------------------------------------------------------------
Peninsula Ports Authority, VA, Health Care Rev. (Riverside Health
System), 5%, 2018 3,580,000 3,688,510
- -------------------------------------------------------------------------------------------------------------------------------
Prince William County, VA, Industrial Development Authority, Hospital
Rev. (Potomac Hospital Corp.), 5.2%, 2026 1,000,000 1,019,440
- -------------------------------------------------------------------------------------------------------------------------------
Roanoke, VA, Industrial Development Authority, Hospital Rev. (Roanoke
Memorial Hospital), "B", MBIA, 6.125%, 2017 3,000,000 3,551,190
- -------------------------------------------------------------------------------------------------------------------------------
Winchester, VA, Industrial Development Authority Rev. (Winchester
Medical Center), RIBS, AMBAC, 10.057%, 2014(+) 3,600,000 3,899,664
- -------------------------------------------------------------------------------------------------------------------------------
$41,739,458
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Henrico County, VA, Economic Development Authority, Residential Care
Term Care - 0.5% Facilities (United Methodist Homes), "A", 6.7%, 2027 $750,000 $785,693
- -------------------------------------------------------------------------------------------------------------------------------
Norfolk, VA, Redevelopment & Housing Authority Rev. (First Mortgage
Retirement Community), "A", 6.125%, 2035 750,000 743,468
- -------------------------------------------------------------------------------------------------------------------------------
$1,529,161
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Charles City County, VA, Industrial Development Authority, Solid
Environmental Services - 1.0% Waste Disposal Facility Rev. (Waste Management, Inc.), 6.25%, 2027 $1,500,000 $1,639,920
- -------------------------------------------------------------------------------------------------------------------------------
Henrico County, VA, Industrial Development Authority Rev. (Browning
Ferris, Inc.), 5.45%, 2014 1,750,000 1,629,915
- -------------------------------------------------------------------------------------------------------------------------------
$3,269,835
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Loudoun County, VA, Industrial Development Authority Rev. (Dulles
Other - 1.2% Airport Marriot Hotel), 7.125%, 2015 $2,000,000 $2,024,560
- -------------------------------------------------------------------------------------------------------------------------------
Peninsula Ports Authority, Virginia Coal (Dominion Terminal
Associates), 6%, 2033 1,000,000 1,067,210
- -------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Public Finance Authority, Refinery Facilities Rev.
(Hovensa Refinery), 5.875%, 2022 750,000 795,000
- -------------------------------------------------------------------------------------------------------------------------------
$3,886,770
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Bedford County, VA, Industrial Development Authority Rev. (Nekooska
Paper - 3.4% Packaging Corp.), 5.6%, 2025 $1,000,000 $985,370
- -------------------------------------------------------------------------------------------------------------------------------
Hopewell, VA, Industrial Development Authority, Resources Recovery
Rev. (Stone Container Corp.), 8.25%, 2016 1,250,000 1,256,850
- -------------------------------------------------------------------------------------------------------------------------------
Isle Wight County, VA, Industrial Development Authority, Solid Waste
Disposal Facilities Rev. (Union Camp Corp.), 6.55%, 2024 4,000,000 4,050,200
- -------------------------------------------------------------------------------------------------------------------------------
Isle Wight County, VA, Industrial Development Authority, Solid Waste
Disposal Facilities Rev. (Union Camp Corp.), 6.1%, 2027 2,750,000 2,828,485
- -------------------------------------------------------------------------------------------------------------------------------
West Point, VA, Industrial Development Authority, Solid Waste
Disposal Rev. (Chesapeake Corp.), "A", 6.375%, 2019 1,750,000 1,762,303
- -------------------------------------------------------------------------------------------------------------------------------
$10,883,208
- -------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Alexandria, VA, Redevelopment & Housing Finance Authority Rev.
Revenue - 4.4% (Jefferson Village Apartments), "B", 9%, 2018 $3,675,000 $3,652,766
- -------------------------------------------------------------------------------------------------------------------------------
Arlington County, VA, Industrial Development Authority Rev. (Colonial
Village), FNMA, 5.15%, 2031 3,000,000 3,077,220
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Housing Development Authority Rev., "B", 5.95%, 2016 1,905,000 1,970,322
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Housing Development Authority Rev., "G", 5.625%, 2020 2,000,000 2,070,980
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Housing Development Authority Rev., "I", 5.15%, 2017 3,000,000 3,065,490
- -------------------------------------------------------------------------------------------------------------------------------
$13,836,778
- -------------------------------------------------------------------------------------------------------------------------------
Parking - 0.5% Norfolk, VA, Parking Systems Rev., MBIA, 5%, 2020 $1,630,000 $1,702,339
- -------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 0.6% Virginia State Housing Development Authority, "A", 5%, 2031 $2,000,000 $2,019,600
- -------------------------------------------------------------------------------------------------------------------------------
State & Agency -
Other - 1.6% Fairfax County, VA, Certificates of Participation, 6.1%, 2017 $3,090,000 $3,541,140
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Biotechnology Research Park Lease Rev. (Consolidated
Laboratories), 5%, 2021 1,500,000 1,570,155
- -------------------------------------------------------------------------------------------------------------------------------
$5,111,295
- -------------------------------------------------------------------------------------------------------------------------------
State & Local
Agencies - 21.1% Blue Ridge, VA, Regional Jail Authority, MBIA, 5.2%, 2021 $1,830,000 $1,925,252
- -------------------------------------------------------------------------------------------------------------------------------
Caroline County, VA, Industrial Development Authority, Lease Rev.,
AMBAC, 5.125%, 2034 1,000,000 1,042,740
- -------------------------------------------------------------------------------------------------------------------------------
Chesapeake, VA, Industrial Development Authority (Chesapeake Court
House), MBIA, 6.25%, 2011 3,985,000 4,327,072
- -------------------------------------------------------------------------------------------------------------------------------
Chesapeake, VA, Industrial Development Authority (Chesapeake Court
House), MBIA, 5.25%, 2017 2,000,000 2,125,900
- -------------------------------------------------------------------------------------------------------------------------------
Chesterfield County, VA, Industrial Development Authority, Public
Facilities Lease Rev., 7.5%, 2008 1,450,000 1,453,190
- -------------------------------------------------------------------------------------------------------------------------------
Dinwiddie County, VA, Industrial Development Authority Lease Rev.,
"B", MBIA, 5%, 2030 2,500,000 2,586,675
- -------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Economic Development Authority (Vienna II
Metrorail), 6%, 2017 1,750,000 1,971,725
- -------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Economic Development Authority Rev. (U.S. Route
28), MBIA, 5%, 2029 1,000,000 1,036,630
- -------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Economic Development Authority, Parking Rev.
(Vienna II Metrorail), 6%, 2016 1,650,000 1,860,524
- -------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Redevelopment & Housing Authority Rev. (Mott &
Gum Springs Community Centers), 5.5%, 2017 2,225,000 2,287,656
- -------------------------------------------------------------------------------------------------------------------------------
Front Royal & Warren County, VA, Industrial Development Authority
Lease Rev., School & Capital Improvement, "B", FSA, 5%, 2035 2,875,000 2,952,481
- -------------------------------------------------------------------------------------------------------------------------------
Henrico County, VA, Industrial Development Authority, Public Lease
Rev., 6.5%, 2005(++) 5,000,000 5,166,850
- -------------------------------------------------------------------------------------------------------------------------------
King George County, VA, Industrial Development Authority Lease Rev.,
FSA, 5%, 2036 2,000,000 2,057,840
- -------------------------------------------------------------------------------------------------------------------------------
Middlesex County, VA, Industrial Development Authority Rev., AMBAC,
5.125%, 2027 1,000,000 1,055,390
- -------------------------------------------------------------------------------------------------------------------------------
Middlesex County, VA, Industrial Development Authority Rev., AMBAC,
5.25%, 2032 2,000,000 2,114,700
- -------------------------------------------------------------------------------------------------------------------------------
Montgomery County, VA, Industrial Development, "B", AMBAC, 6%, 2017 1,000,000 1,133,380
- -------------------------------------------------------------------------------------------------------------------------------
Montgomery County, VA, Industrial Development, "C", AMBAC, 6%, 2017 1,120,000 1,269,386
- -------------------------------------------------------------------------------------------------------------------------------
New River Valley, VA, Regional Jail Authority, MBIA, 5.125%, 2019 3,405,000 3,620,979
- -------------------------------------------------------------------------------------------------------------------------------
Orange County, VA, Industrial Development Authority (Orange County
Project), AMBAC, 5%, 2034 1,000,000 1,032,340
- -------------------------------------------------------------------------------------------------------------------------------
Pamunkey, VA, Regional Jail Authority, MBIA, 5.75%, 2006(++) 2,230,000 2,358,180
- -------------------------------------------------------------------------------------------------------------------------------
Pamunkey, VA, Regional Jail Authority, MBIA, 5.75%, 2006(++) 270,000 285,520
- -------------------------------------------------------------------------------------------------------------------------------
Powhatan County, VA, Economic Development Authority Lease Rev.
(Virginia Capital Projects), AMBAC, 5.25%, 2033 1,000,000 1,056,460
- -------------------------------------------------------------------------------------------------------------------------------
Prince William County, VA, Lease Partnerships, 5%, 2021 1,500,000 1,567,755
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2013+(+) 2,000,000 2,480,720
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2016+(+) 500,000 634,000
- -------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, Public Facilities, Certificates of Participation
(Megahertz Project), "A", AMBAC, 5%, 2022 1,600,000 1,666,720
- -------------------------------------------------------------------------------------------------------------------------------
Southwest Virginia Regional Jail Authority Rev., MBIA, 5%, 2035 1,720,000 1,771,067
- -------------------------------------------------------------------------------------------------------------------------------
Virginia College Building Authority (21st Century College Program),
6%, 2009(++) 2,000,000 2,225,220
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Public Building Authority Rev., "B", MBIA, 0%, 2007 3,750,000 3,481,088
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority Rev., "B", FSA, 5.5%, 2019 1,070,000 1,161,496
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority Rev., ROLS, 7.589%, 2021+(+) 1,390,000 1,534,921
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority Rev., ROLS, 7.589%, 2023+(+) 1,520,000 1,658,442
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority Rev., ROLS, 7.589%, 2033+(+) 2,510,000 2,673,250
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority, Infrastructure Rev., "A", 5%, 2017 1,360,000 1,428,150
- -------------------------------------------------------------------------------------------------------------------------------
$67,003,699
- -------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.6% Greater Richmond Convention Center Authority, Hotel Tax Rev.
(Convention Center Expansion), 6.125%, 2020 $3,500,000 $3,992,380
- -------------------------------------------------------------------------------------------------------------------------------
Territory of Virgin Islands, Public Finance Authority Rev., "A",
5.625%, 2025 1,000,000 1,050,120
- -------------------------------------------------------------------------------------------------------------------------------
$5,042,500
- -------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.3% Childrens Trust Fund, Settlement Rev., PR, 5.375%, 2033 $470,000 $471,725
- -------------------------------------------------------------------------------------------------------------------------------
Virgin Islands Tobacco Settlement Financing Corp., 5%, 2021 605,000 587,134
- -------------------------------------------------------------------------------------------------------------------------------
$1,058,859
- -------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 1.7% Chesapeake Bay, Bridge & Tunnel Commission, Virginia District Rev.,
FGIC, 0%, 2005 $4,535,000 $4,509,468
- -------------------------------------------------------------------------------------------------------------------------------
Pocahontas Parkway Assn., VA, Toll Road Rev., 0%, 2013 1,500,000 912,465
- -------------------------------------------------------------------------------------------------------------------------------
$5,421,933
- -------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico, Highway & Transportation Authority Rev.,
Tax - 2.2% "J", MBIA, 5%, 2029 $1,210,000 $1,263,615
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Transportation Board Rev. (U.S. Route 58), "B",
5.125%, 2006(++) 4,000,000 4,146,440
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Commonwealth Board Program (Oak Grove Connector), "A",
5.25%, 2022 1,500,000 1,551,015
- -------------------------------------------------------------------------------------------------------------------------------
$6,961,070
- -------------------------------------------------------------------------------------------------------------------------------
Universities - Danville, VA, Industrial Development Authority, Educational
Colleges - 2.1% Facilities Rev. (Averett University), 6%, 2022 $500,000 $513,030
- -------------------------------------------------------------------------------------------------------------------------------
Loudoun County, VA, Industrial Development Authority, University
Facilities Rev. (George Washington University), 6.25%, 2012 2,710,000 2,723,848
- -------------------------------------------------------------------------------------------------------------------------------
Virginia College Building Authority, Educational Facilities Rev.
(Washington & Lee University), MBIA, 5.25%, 2031 1,000,000 1,120,140
- -------------------------------------------------------------------------------------------------------------------------------
Virginia College Building Authority, Educational Facilities Rev.
(Hampton University), 6%, 2020 1,000,000 1,119,010
- -------------------------------------------------------------------------------------------------------------------------------
Virginia College Building Authority, Educational Facilities Rev.
(Regent University), MBIA, 5.125%, 2031 1,000,000 1,035,970
- -------------------------------------------------------------------------------------------------------------------------------
$6,511,998
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Chesapeake, VA, Industrial Development Authority Rev. (VEPCO),
Owned - 2.2% 5.25%, 2008 $750,000 $766,920
- -------------------------------------------------------------------------------------------------------------------------------
Halifax County, VA, Industrial Development Authority (Old Dominion
Electric Cooperative), AMBAC, 5.625%, 2028 3,000,000 3,213,570
- -------------------------------------------------------------------------------------------------------------------------------
Mecklenburg County, VA, Industrial Development Authority Rev. (UAE
Mecklenburg, LP), 6.5%, 2017 700,000 774,431
- -------------------------------------------------------------------------------------------------------------------------------
Pittsylvania County, VA, Industrial Development Authority Rev.
(Multi-trade of Pittsylvania), 7.5%, 2014 2,000,000 2,064,400
- -------------------------------------------------------------------------------------------------------------------------------
$6,819,321
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 4.3% Bristol VA, Utility Systems Rev., FSA, ETM, 5.75%, 2016(++) $240,000 $278,282
- -------------------------------------------------------------------------------------------------------------------------------
Guam Power Authority Rev., RITES, AMBAC, 7.577%, 2015+(+) 1,010,000 1,164,308
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., RITES, FSA,
8.612%, 2017+(+) 2,500,000 3,123,100
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., RITES, FSA,
8.362%, 2019+(+) 1,270,000 1,524,940
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority Rev., RITES, FSA,
7.712%, 2020+(+) 1,250,000 1,475,000
- -------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, Public Utilities Rev., FSA, 5%, 2033 5,000,000 5,129,600
- -------------------------------------------------------------------------------------------------------------------------------
Richmond, VA, Public Utilities Rev., FSA, 5%, 2035 1,000,000 1,036,730
- -------------------------------------------------------------------------------------------------------------------------------
$13,731,960
- -------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 10.9% Fairfax County, VA, Water Authority Rev., 5%, 2012(++) $790,000 $820,178
- -------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Water Authority Rev., 5%, 2026 1,000,000 1,045,660
- -------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Water Authority Rev., 5%, 2027 3,210,000 3,332,622
- -------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Water Authority Rev., 5%, 2027 1,000,000 1,043,390
- -------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Water Authority Rev., 5%, 2032 2,000,000 2,056,980
- -------------------------------------------------------------------------------------------------------------------------------
Fairfax County, VA, Water Authority Rev., "A", 5%, 2030 5,000,000 5,199,350
- -------------------------------------------------------------------------------------------------------------------------------
Hanover County, VA, Water & Sewer Systems Rev., MBIA, 5.25%, 2026 2,000,000 2,078,240
- -------------------------------------------------------------------------------------------------------------------------------
Prince William County, VA, Water & Sewer Rev., FGIC, 5.5%, 2009(++) 2,000,000 2,166,880
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Aqueduct & Sewer Authority Rev., 9%, 2005(++) 2,455,000 2,493,764
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Aqueduct & Sewer Authority Rev., ETM, 10.25%, 2009(++) 235,000 275,740
- -------------------------------------------------------------------------------------------------------------------------------
Spotsylvania County, VA, Water & Sewer Rev., FSA, 5%, 2022 1,450,000 1,509,073
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Beach, VA, Storm Water Utilities Rev., 6%, 2020 1,000,000 1,128,830
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority Sewer Systems Rev. (Hopewell Regional
Wastewater), 5.75%, 2021 1,335,000 1,469,555
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority, Clean Water Rev., 6%, 2017 2,750,000 3,094,988
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority, Clean Water Rev., 5.4%, 2018 1,135,000 1,234,755
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority, Infrastructure Rev., "A", MBIA, 5.5%,
2019 1,600,000 1,740,784
- -------------------------------------------------------------------------------------------------------------------------------
Virginia Resources Authority, Infrastructure Rev., "A", MBIA, 5.5%,
2020 1,690,000 1,834,884
- -------------------------------------------------------------------------------------------------------------------------------
Virginia State Resources Authority, Water & Sewer Systems Rev.
(Tuckahoe Creek Project), 5%, 2035 2,015,000 2,079,923
- -------------------------------------------------------------------------------------------------------------------------------
$34,605,596
- -------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $290,810,220) $308,912,414
- -------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 2.8%
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "A", 2.3%, due 4/07/05 $100,000 $100,000
- -------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "B", 2.3%, due 4/07/05 100,000 100,000
- -------------------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, California Toll Bridge Rev., "A",
2.22%, due 4/07/05 1,500,000 1,500,000
- -------------------------------------------------------------------------------------------------------------------------------
Bell County, TX, Health Facilities Development Corp. Rev. (Scott &
White Memorial Hospital), "B-1", 2.3%, due 4/01/05 6,100,000 6,100,000
- -------------------------------------------------------------------------------------------------------------------------------
Illinois Development Finance Authority Rev. (Jewish Federation of
Metropolitan Chicago), 2.3%, due 4/01/05 800,000 800,000
- -------------------------------------------------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority, 2.31%, due 4/07/05 100,000 100,000
- -------------------------------------------------------------------------------------------------------------------------------
West Baton Rouge Parish, LA, Industrial District (Dow Chemical Co.),
"B", 2.4%, due 4/01/05 100,000 100,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $8,800,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $299,610,220) $317,712,414
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (0.2)% (681,959
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $317,030,455
- -------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 3/31/05 MFS(R) WEST 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 - 95.8%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations - General
Purpose - 21.3% Charleston, WV, Public Improvements, 7.2%, 2009 $1,140,000 $1,311,251
- -------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, Public Improvement, 5.25%, 2023 1,500,000 1,587,210
- -------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, Public Improvement Rev., "A", 5%, 2034 2,000,000 2,038,400
- -------------------------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, Public Improvement, RITES, MBIA,
8.612%, 2019+(+) 3,000,000 3,651,420
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority Rev. (State Office Building),
"F", XLCA, 5.25%, 2025 2,000,000 2,266,620
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Public Buildings Authority Rev., "B", 5.25%, 2007(++) 3,115,000 3,324,671
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Highway Improvements, FGIC, 5.625%, 2019 2,000,000 2,188,740
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Public Improvements, FGIC, 5%, 2021 4,000,000 4,141,640
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Sewer Improvements, FGIC, 5.5%, 2017 2,565,000 2,764,890
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Water Utility Improvements, FGIC, 5.25%, 2026 8,000,000 8,370,080
- -------------------------------------------------------------------------------------------------------------------------------
$31,644,922
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 1.7% Brooke County, WV, Board of Education, FGIC, 5%, 2016 $1,390,000 $1,462,711
- -------------------------------------------------------------------------------------------------------------------------------
Puerto Rico, Municipal Finance Agency, RITES, FSA, 8.129%, 2017+(+) 900,000 1,060,182
- -------------------------------------------------------------------------------------------------------------------------------
$2,522,893
- -------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 5.3% Jefferson County, WV, Board of Education, FGIC, ETM, 6.85%, 2009(++) $1,680,000 $1,921,870
- -------------------------------------------------------------------------------------------------------------------------------
Monongalia County, WV, Board of Education, MBIA, 5%, 2027 2,350,000 2,438,454
- -------------------------------------------------------------------------------------------------------------------------------
Monongalia County, WV, Board of Education, MBIA, 5%, 2033 3,000,000 3,088,440
- -------------------------------------------------------------------------------------------------------------------------------
Monongalia County, WV, Board of Education, MBIA, ETM, 7%, 2005(++) 500,000 500,000
- -------------------------------------------------------------------------------------------------------------------------------
$7,948,764
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Kanawha County, WV, Building Commission Rev. (St. Francis Hospital),
Hospitals - 4.7% ETM, 7.5%, 2007(++) $85,000 $91,170
- -------------------------------------------------------------------------------------------------------------------------------
Ohio County, WV, County Commission Health System Rev. (Ohio Valley
Medical Center), 5.75%, 2013 750,000 701,677
- -------------------------------------------------------------------------------------------------------------------------------
Randolph County, WV, Community Health Systems Rev. (Davis Health
Systems, Inc.), FSA, 5.2%, 2021 1,000,000 1,064,670
- -------------------------------------------------------------------------------------------------------------------------------
Weirton, WV, Municipal Hospital Building, Commission Rev. (Weirton
Hospital Medical Center), 6.375%, 2031 600,000 594,996
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Hospital Finance Authority, Hospital Rev. (Charleston
Area Medical Center), ETM, 6.5%, 2023(++) 2,000,000 2,440,820
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Hospital Finance Authority, Hospital Rev. (Fairmont
General Hospital), 6.625%, 2019 300,000 300,123
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Hospital Finance Authority, Hospital Rev. (General
Division Medical Office Building), 7.25%, 2014 1,770,000 1,792,798
- -------------------------------------------------------------------------------------------------------------------------------
$6,986,254
- -------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Harrison County, WV, Building Commission Rev. (Maplewood Retirement),
Term Care - 2.0% AMBAC, 5.25%, 2021 $2,625,000 $2,743,072
- -------------------------------------------------------------------------------------------------------------------------------
Monongalia County, WV, Health Facilities Rev. (Beverly Enterprises,
Inc.), 5.875%, 2007 270,000 270,548
- -------------------------------------------------------------------------------------------------------------------------------
$3,013,620
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Virgin Islands Public Finance Authority, Refinery Facilities Rev.
Other - 0.2% (Hovensa Refinery), 5.875%, 2022 $350,000 $371,000
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Braxton County, WV, Solid Waste Disposal Rev. (Weyerhaeuser Co.),
Paper - 1.4% 6.5%, 2025 $2,000,000 $2,077,640
- -------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing
Revenue - 0.7% Huntington, WV, Housing Corp. Rev., FNMA, 7.5%, 2024 $800,000 $799,936
- -------------------------------------------------------------------------------------------------------------------------------
Webster County, WV, Housing Development Rev. (Circlebrook), FHA,
6.35%, 2008 185,000 185,764
- -------------------------------------------------------------------------------------------------------------------------------
$985,700
- -------------------------------------------------------------------------------------------------------------------------------
Parking - 0.9% West Virginia Economic Development Authority, Auto Lease Rev.
(Capitol Parking Garage), AMBAC, 5.8%, 2020 $1,260,000 $1,390,347
- -------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
Local - 0.9% Charlestown, WV, Residential Mortgage Rev., 6.2%, 2011 $195,000 $195,577
- -------------------------------------------------------------------------------------------------------------------------------
Kanawha County, WV, 0%, 2014(++) 1,920,000 1,172,986
- -------------------------------------------------------------------------------------------------------------------------------
$1,368,563
- -------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Puerto Rico Housing Finance Authority, Home Mortgage Rev., Mortgage
State - 1.8% Backed Securities, "A", 4.75%, 2023 $695,000 $699,740
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Housing Development Fund Rev., 5.25%, 2018 1,000,000 1,010,590
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia State, Housing Development Fund Rev., 5.3%, 2023 1,000,000 1,008,130
- -------------------------------------------------------------------------------------------------------------------------------
$2,718,460
- -------------------------------------------------------------------------------------------------------------------------------
State & Agency -
Other - 1.7% West Virginia, Higher Education Facilities Rev., "B", FGIC, 5%, 2034 $2,500,000 $2,572,925
- -------------------------------------------------------------------------------------------------------------------------------
State & Local Huntington, WV, Municipal Development Authority, Rev., MBIA, 5.1%,
Agencies - 20.1% 2018 $1,740,000 $1,820,545
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Building Commission, "A", RITES, AMBAC, 7.781%, 2018+(+) 4,520,000 5,539,441
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Building Commission, "B", RITES, AMBAC, 7.781%, 2018+(+) 1,250,000 1,531,925
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Building Commission, Lease Rev., MBIA, ETM, 0%, 2007(++) 3,150,000 2,944,903
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Building Commission, Lease Rev., MBIA, ETM, 0%, 2008(++) 3,050,000 2,751,985
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Building Commission, Lease Rev., MBIA, ETM, 0%, 2009(++) 1,000,000 865,390
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Economic Development Authority (Correctional Juvenile &
Public), 5%, 2020 1,000,000 1,040,510
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Economic Development Authority (Correctional Juvenile &
Public), MBIA, 5.5%, 2013 1,000,000 1,116,550
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Economic Development Authority (Correctional Juvenile &
Public), MBIA, 5%, 2026 2,100,000 2,170,896
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Economic Development Authority State Office Building,
"B", MBIA, 5.25%, 2030 1,355,000 1,425,663
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Economic Development Authority, Auto Lease Rev.,
5.2%, 2033 1,000,000 1,021,190
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Economic Development Authority, Department of
Enviromental Protection, 5.5%, 2022 2,000,000 2,188,080
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Economic Development Authority, Lease Rev. (State
Office Building), "B", MBIA, 5.25%, 2025 645,000 683,416
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Hospital Finance Authority, Hospital Rev. (Veterans
Nursing Home), 5.5%, 2034 1,000,000 1,010,790
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Hospital Finance Authority, Hospital Rev. (West
Virginia University Hospital), AMBAC, 5%, 2018 1,000,000 1,028,160
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia School Building Authority, Miscellaneous Tax Rev., FSA,
5.25%, 2021 2,550,000 2,713,863
- -------------------------------------------------------------------------------------------------------------------------------
$29,853,307
- -------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.3% Territory of Virgin Islands, Public Finance Authority Rev., "A",
5.625%, 2025 $500,000 $525,060
- -------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.5% Childrens Trust Fund, Settlement Rev., PR, 5.375%, 2033 $700,000 $702,569
- -------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 4.8% West Virginia Parkways, Economic Development & Tourism Authority,
Rev., FGIC, ETM, 0%, 2007(++) $2,000,000 $1,869,780
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Parkways, Economic Development & Tourism Authority,
Rev., FGIC, ETM, 0%, 2005(++) 2,250,000 2,237,175
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Parkways, Economic Development & Tourism Authority,
Rev., FGIC, ETM, 0%, 2006(++) 2,500,000 2,416,825
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Parkways, Economic Development & Tourism Authority,
Rev., FGIC, ETM, 0%, 2008(++) 610,000 550,397
- -------------------------------------------------------------------------------------------------------------------------------
$7,074,177
- -------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico, Highway & Transportation Authority Rev.,
Tax - 1.3% "J", MBIA, 5%, 2029 $1,820,000 $1,900,644
- -------------------------------------------------------------------------------------------------------------------------------
Universities - Commonwealth of Puerto Rico, Industrial Tourist Education (University
Colleges - 17.9% Plaza), MBIA, 5%, 2021 $1,270,000 $1,328,801
- -------------------------------------------------------------------------------------------------------------------------------
Fairmont State College, West Virginia, College Rev., "A", FGIC,
5%, 2032 2,000,000 2,044,220
- -------------------------------------------------------------------------------------------------------------------------------
Fairmont State College, West Virginia, College Rev., FGIC,
5.25%, 2022 5,130,000 5,465,605
- -------------------------------------------------------------------------------------------------------------------------------
Fairmont State College, West Virginia, College Rev., FGIC,
5.375%, 2027 1,500,000 1,608,435
- -------------------------------------------------------------------------------------------------------------------------------
Fairmont State College, West Virginia, College Rev., FGIC, 5%, 2032 2,250,000 2,312,032
- -------------------------------------------------------------------------------------------------------------------------------
State of West Virginia, Department of Higher Education (Marshall
University), FGIC, 5.25%, 2019 1,680,000 1,785,655
- -------------------------------------------------------------------------------------------------------------------------------
State of West Virginia, Department of Higher Education (Student Union
James C. Wilson College), 5.125%, 2022 1,500,000 1,576,095
- -------------------------------------------------------------------------------------------------------------------------------
State of West Virginia, Department of Higher Education, "B", FGIC,
5%, 2029 1,000,000 1,032,890
- -------------------------------------------------------------------------------------------------------------------------------
State of West Virginia, Department of Higher Education, MBIA,
5%, 2010 1,345,000 1,441,705
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia University, Dormatory Rev., AMBAC, 5%, 2007(++) 2,000,000 2,122,420
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia University, University Systems Rev. (Marshall
University), FGIC, 6%, 2020 2,705,000 3,040,122
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia University, University Systems Rev. (West Virginia
University), MBIA, 5.5%, 2020 1,700,000 1,925,692
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia, West Virginia University Improvement Rev., "C", FGIC,
5%, 2028 1,000,000 1,029,700
- -------------------------------------------------------------------------------------------------------------------------------
$26,713,372
- -------------------------------------------------------------------------------------------------------------------------------
Universities -
Dormatories - 0.4% West Liberty State College, Capital Improvement, 6%, 2028 $500,000 $527,975
- -------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Mason County, WV, Pollution Control Rev. (Appalachian Power Co.),
Owned - 0.5% 5.5%, 2022 $750,000 $765,562
- -------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 7.4% Fairmont, WV, Waterworks Rev., AMBAC, 5.25%, 2022 $200,000 $222,434
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority Rev., AMBAC, 6.25%, 2020 1,000,000 1,119,990
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority Rev., AMBAC, 5.25%, 2023 1,000,000 1,067,400
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority Rev., AMBAC, 5%, 2026 2,850,000 2,959,754
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority Rev., ETM, 7.1%, 2009(++) 130,000 142,219
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority Rev., FSA, 5.25%, 2035 2,000,000 2,058,740
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority, Infrastructure Rev., "A",
AMBAC, 5%, 2033 1,950,000 2,004,893
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority, Infrastructure Rev., FSA,
5.5%, 2018 390,000 421,964
- -------------------------------------------------------------------------------------------------------------------------------
West Virginia Water Development Authority, Infrastructure Rev., FSA,
5.5%, 2019 895,000 965,598
- -------------------------------------------------------------------------------------------------------------------------------
$10,962,992
- -------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $133,795,461) $142,626,746
- -------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.1%
- -------------------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, California Toll Bridge Rev., "A",
2.22%, due 4/07/05 $800,000 $800,000
- -------------------------------------------------------------------------------------------------------------------------------
California Health Facilities Financing Authority Rev. (Adventist
Hospital), "B", 2.28%, due 4/01/05 100,000 100,000
- -------------------------------------------------------------------------------------------------------------------------------
Missouri Development Finance, Board of Cultural Facilities Rev.
(Nelson Gallery), "B", 2.3%, due 4/01/05 200,000 200,000
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
2.25%, due 4/01/05 100,000 100,000
- -------------------------------------------------------------------------------------------------------------------------------
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
2.28%, due 4/01/05 100,000 100,000
- -------------------------------------------------------------------------------------------------------------------------------
Sevier County, TN, Public Building Authority, Government Public
Improvement, 2.31%, due 4/07/05 300,000 300,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $1,600,000
- -------------------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $135,395,461) $144,226,746
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 3.1% 4,566,404
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $148,793,150
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio Footnotes:
+ Restricted security.
(+) Inverse floating rate security.
(++) Refunded bond.
** Interest received was less than stated coupon rate.
## SEC Rule 144A restriction.
The following abbreviations are used in the Portfolio of Investments and are defined:
ETM -- Escrowed to Maturity
Insurers: Inverse Floaters:
AMBAC -- AMBAC Indemnity Corp. RIBS -- Residual Interest Bonds
ASST GTY -- Asset Guaranty Insurance Co. RITES -- Residual Interest Tax-Exempt Security
CONNIE LEE -- Connie Lee Insurance Co. ROLS -- Residual Option Longs
FGIC -- Financial Guaranty Insurance Co.
FHA -- Federal Housing Administration
FNMA -- Federal National Mortgage Assn.
FSA -- Financial Security Assurance, Inc.
GNMA -- Government National Mortgage Assn.
LOC -- Letter of Credit
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 3/31/05 FUND FUND FUND FUND
ASSETS
Investments -
Identified cost $86,267,076 $164,473,041 $325,663,533 $104,262,600
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) 4,287,040 12,336,430 22,288,678 4,516,603
- --------------------------------------------------------------------------------------------------------------------------------
Total investments, at value $90,554,116 $176,809,471 $347,952,211 $108,779,203
- --------------------------------------------------------------------------------------------------------------------------------
Cash 6,403 75,723 65,883 35,682
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for investments sold 156,101 1,535,242 -- 1,247,173
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for fund shares sold 50,879 243,887 266,177 65,301
- --------------------------------------------------------------------------------------------------------------------------------
Interest receivable 1,289,149 2,709,593 5,457,325 1,658,384
- --------------------------------------------------------------------------------------------------------------------------------
Receivable from investment adviser -- -- -- 37,707
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on interest rate swaps 90,165 123,339 121,069 144,155
- --------------------------------------------------------------------------------------------------------------------------------
Other assets 504 969 2,823 264
- --------------------------------------------------------------------------------------------------------------------------------
Total assets $92,147,317 $181,498,224 $353,865,488 $111,967,869
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable $171,281 $233,139 $436,497 $134,627
- --------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 518,635 -- -- 2,167,165
- --------------------------------------------------------------------------------------------------------------------------------
Payable for fund shares reacquired 258,081 242,208 246,904 145,712
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on interest rate swaps 7,637 6,988 31,188 13,594
- --------------------------------------------------------------------------------------------------------------------------------
Payable to affiliates -
Management fee 749 1,483 2,894 895
- --------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 12,234 21,292 19,702 12,610
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee 723 2,366 4,676 12,735
- --------------------------------------------------------------------------------------------------------------------------------
Administrative fee 34 67 158 49
- --------------------------------------------------------------------------------------------------------------------------------
Accrued expenses and other liabilities 60,086 71,550 101,158 82,786
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities $1,029,460 $579,093 $843,177 $2,570,173
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $91,117,857 $180,919,131 $353,022,311 $109,397,696
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital $87,500,297 $168,331,011 $331,013,769 $105,520,002
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) on investments 4,369,568 12,452,781 22,378,559 4,647,164
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (606,173) 715,267 259,691 (521,854)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income (145,835) (579,928) (629,708) (247,616)
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $91,117,857 $180,919,131 $353,022,311 $109,397,696
- --------------------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA
FUND FUND FUND FUND
Shares of beneficial interest outstanding
Class A 8,101,268 11,136,583 23,338,351 6,680,817
- --------------------------------------------------------------------------------------------------------------------------------
Class B 1,173,720 3,135,959 3,361,084 4,065,877
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- 1,748,275 2,745,295 --
- --------------------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding 9,274,988 16,020,817 29,444,730 10,746,694
- --------------------------------------------------------------------------------------------------------------------------------
Net assets
Class A $79,574,101 $125,861,203 $279,874,640 $67,942,451
- --------------------------------------------------------------------------------------------------------------------------------
Class B 11,543,756 35,328,324 40,250,997 41,455,245
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- 19,729,604 32,896,674 --
- --------------------------------------------------------------------------------------------------------------------------------
Total net assets $91,117,857 $180,919,131 $353,022,311 $109,397,696
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares
Net asset value per share
(net assets/shares of beneficial interest outstanding) $9.82 $11.30 $11.99 $10.17
- --------------------------------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25 of net asset value per share) $10.31 $11.86 $12.59 $10.68
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $9.84 $11.27 $11.98 $10.20
- --------------------------------------------------------------------------------------------------------------------------------
Class C shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $-- $11.29 $11.98 $--
- --------------------------------------------------------------------------------------------------------------------------------
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 CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
At 3/31/05 FUND FUND FUND FUND
ASSETS
Investments -
Identified cost $149,448,556 $116,537,691 $299,610,220 $135,395,461
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) 10,594,479 7,203,450 18,102,194 8,831,285
- --------------------------------------------------------------------------------------------------------------------------------
Total investments, at value $160,043,035 $123,741,141 $317,712,414 $144,226,746
- --------------------------------------------------------------------------------------------------------------------------------
Cash 3,223 78,843 68,763 85,901
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for investments sold -- 314,366 838,898 2,240,157
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for fund shares sold 180,312 65,544 129,097 114,232
- --------------------------------------------------------------------------------------------------------------------------------
Interest receivable 2,405,146 1,842,050 4,761,972 2,450,854
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on interest rate swaps 61,198 23,812 114,431 115,248
- --------------------------------------------------------------------------------------------------------------------------------
Other assets 1,168 837 2,694 961
- --------------------------------------------------------------------------------------------------------------------------------
Total assets $162,694,082 $126,066,593 $323,628,269 $149,234,099
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable $198,680 $209,708 $512,197 $170,481
- --------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 907,611 -- 5,014,520 --
- --------------------------------------------------------------------------------------------------------------------------------
Payable for fund shares reacquired 99,785 202,100 722,780 163,123
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on interest rate swaps 6,988 35,808 229,495 6,987
- --------------------------------------------------------------------------------------------------------------------------------
Payable to affiliates -
Management fee 1,322 1,030 2,600 1,218
- --------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 18,861 13,326 32,346 17,143
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee 2,093 1,571 3,599 1,678
- --------------------------------------------------------------------------------------------------------------------------------
Administrative fee 60 46 141 55
- --------------------------------------------------------------------------------------------------------------------------------
Accrued expenses and other liabilities 84,904 77,087 80,136 80,264
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities $1,320,304 $540,676 $6,597,814 $440,949
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $161,373,778 $125,525,917 $317,030,455 $148,793,150
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital $151,955,124 $118,502,621 $300,996,280 $140,768,426
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) on investments 10,648,689 7,191,454 17,987,130 8,939,546
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (1,125,985) 117,367 (1,090,321) (578,600)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income (104,050) (285,525) (862,634) (336,222)
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $161,373,778 $125,525,917 $317,030,455 $148,793,150
- --------------------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
At 3/31/05 FUND FUND FUND FUND
Shares of beneficial interest outstanding
Class A 10,541,560 9,787,631 24,754,359 11,606,388
- --------------------------------------------------------------------------------------------------------------------------------
Class B 2,511,402 1,932,786 1,705,825 1,237,930
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- -- 1,059,940 --
- --------------------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding 13,052,962 11,720,417 27,520,124 12,844,318
- --------------------------------------------------------------------------------------------------------------------------------
Net assets
Class A $130,341,583 $104,837,222 $285,185,022 $134,458,704
- --------------------------------------------------------------------------------------------------------------------------------
Class B 31,032,195 20,688,695 19,637,046 14,334,446
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- -- 12,208,387 --
- --------------------------------------------------------------------------------------------------------------------------------
Total net assets $161,373,778 $125,525,917 $317,030,455 $148,793,150
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares
Net asset value per share
(net assets/shares of beneficial interest outstanding) $12.36 $10.71 $11.52 $11.58
- --------------------------------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25 of net asset value per share) $12.98 $11.24 $12.09 $12.16
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $12.36 $10.70 $11.51 $11.58
- --------------------------------------------------------------------------------------------------------------------------------
Class C shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $-- $-- $11.52 $--
- --------------------------------------------------------------------------------------------------------------------------------
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 3/31/05
NET INVESTMENT INCOME
Interest $4,874,779 $9,773,657 $19,154,417 $5,525,842
- --------------------------------------------------------------------------------------------------------------------------------
Expenses -
Management fee $507,830 $1,022,390 $2,012,638 $616,390
- --------------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 4,049 6,633 12,576 6,165
- --------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 114,597 237,790 411,873 142,708
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class A) -- 318,311 1,009,796 68,295
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class B) 94,947 380,292 443,632 379,348
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class C) -- 205,175 330,103 --
- --------------------------------------------------------------------------------------------------------------------------------
Administrative fee 7,341 14,737 29,062 8,935
- --------------------------------------------------------------------------------------------------------------------------------
Custodian fee 34,864 66,067 127,120 42,637
- --------------------------------------------------------------------------------------------------------------------------------
Printing 9,152 20,105 24,235 14,400
- --------------------------------------------------------------------------------------------------------------------------------
Postage 3,352 6,278 11,988 6,445
- --------------------------------------------------------------------------------------------------------------------------------
Auditing fees 43,536 44,649 44,031 44,623
- --------------------------------------------------------------------------------------------------------------------------------
Legal fees 6,029 5,536 9,496 13,320
- --------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 36,988 52,169 77,950 47,697
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses $862,685 $2,380,132 $4,544,500 $1,390,963
- --------------------------------------------------------------------------------------------------------------------------------
Fees paid indirectly (2,582) (4,179) (8,211) (2,928)
- --------------------------------------------------------------------------------------------------------------------------------
Reduction of expenses by investment adviser (231,359) (465,497) (916,395) (381,310)
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses $628,744 $1,910,456 $3,619,894 $1,006,725
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $4,246,035 $7,863,201 $15,534,523 $4,519,117
- --------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) (identified cost basis)-
Investment transactions $(32,553) $1,852,400 $3,053,372 $1,216,279
- --------------------------------------------------------------------------------------------------------------------------------
Swap transactions (567,226) (547,082) (751,757) (700,849)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $(599,779) $1,305,318 $2,301,615 $515,430
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments $(1,835,568) $(6,032,524) $(11,948,822) $(3,146,738)
- --------------------------------------------------------------------------------------------------------------------------------
Swap transactions 544,515 827,262 1,040,296 717,113
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $(1,291,053) $(5,205,262) $(10,908,526) $(2,429,625)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $(1,890,832) $(3,899,944) $(8,606,911) $(1,914,195)
- --------------------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $2,355,203 $3,963,257 $6,927,612 $2,604,922
- --------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Operations - continued
SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
FUND FUND FUND FUND
For year ended 3/31/05
NET INVESTMENT INCOME
Interest $8,878,676 $6,675,857 $17,770,397 $7,959,252
- --------------------------------------------------------------------------------------------------------------------------------
Expenses -
Management fee $906,745 $725,770 $1,782,820 $834,680
- --------------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 7,144 6,403 12,450 7,103
- --------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing costs 195,440 152,569 390,544 179,711
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class A) 459,159 384,015 1,015,188 476,346
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class B) 334,572 222,175 216,663 156,489
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and service fee (Class C) -- -- 124,010 --
- --------------------------------------------------------------------------------------------------------------------------------
Administrative fee 13,085 10,495 25,753 12,040
- --------------------------------------------------------------------------------------------------------------------------------
Custodian fee 58,331 50,564 109,855 56,699
- --------------------------------------------------------------------------------------------------------------------------------
Printing 11,657 10,277 20,579 15,080
- --------------------------------------------------------------------------------------------------------------------------------
Postage 5,405 5,572 10,907 3,554
- --------------------------------------------------------------------------------------------------------------------------------
Auditing fees 43,961 44,629 44,697 44,637
- --------------------------------------------------------------------------------------------------------------------------------
Legal fees 7,275 9,328 8,494 7,122
- --------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 55,114 47,305 39,676 45,201
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses $2,097,888 $1,669,102 $3,801,636 $1,838,662
- --------------------------------------------------------------------------------------------------------------------------------
Fees paid indirectly (3,491) (3,237) (5,969) (3,471)
- --------------------------------------------------------------------------------------------------------------------------------
Reduction of expenses by investment adviser (413,517) (330,563) (812,366) (380,133)
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses $1,680,880 $1,335,302 $2,983,301 $1,455,058
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $7,197,796 $5,340,555 $14,787,096 $6,504,194
- --------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized gain (loss) (identified cost basis)-
Investment transactions $1,252,790 $772,415 $3,059,445 $580,887
- --------------------------------------------------------------------------------------------------------------------------------
Swap transactions (322,543) 235,473 239,414 (657,821)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $930,247 $1,007,888 $3,298,859 $(76,934)
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments $(4,889,297) $(3,485,491) $(9,861,614) $(3,724,012)
- --------------------------------------------------------------------------------------------------------------------------------
Swap transactions 477,333 147,334 436,890 494,565
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $(4,411,964) $(3,338,157) $(9,424,724) $(3,229,447)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $(3,481,717) $(2,330,269) $(6,125,865) $(3,306,381)
- --------------------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $3,716,079 $3,010,286 $8,661,231 $3,197,813
- --------------------------------------------------------------------------------------------------------------------------------
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 3/31/05
CHANGE IN NET ASSETS
OPERATIONS
Net investment income $4,246,035 $7,863,201 $15,534,523 $4,519,117
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (599,779) 1,305,318 2,301,615 515,430
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments (1,291,053) (5,205,262) (10,908,526) (2,429,625)
- --------------------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $2,355,203 $3,963,257 $6,927,612 $2,604,922
- --------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
Class A $(3,800,669) $(5,659,906) $(12,575,689) $(2,936,106)
- --------------------------------------------------------------------------------------------------------------------------------
Class B (488,047) (1,405,511) (1,644,629) (1,545,007)
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- (758,214) (1,223,511) --
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- -- (936,801) --
- --------------------------------------------------------------------------------------------------------------------------------
Class B -- -- (140,671) --
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- -- (107,103) --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(4,288,716) $(7,823,631) $(16,628,404) $(4,481,113)
- --------------------------------------------------------------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS
Net proceeds from sale of shares $9,045,267 $14,263,800 $20,817,725 $11,805,847
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in reinvestment
of distributions 2,261,536 5,273,314 11,824,254 3,083,455
- --------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (13,939,448) (29,817,855) (60,722,788) (27,178,617)
- --------------------------------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(2,632,645) $(10,280,741) $(28,080,809) $(12,289,315)
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees $41 $2,441 $1 $21
- --------------------------------------------------------------------------------------------------------------------------------
Total change in net assets $(4,566,117) $(14,138,674) $(37,781,600) $(14,165,485)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period 95,683,974 195,057,805 390,803,911 123,563,181
- --------------------------------------------------------------------------------------------------------------------------------
At end of period $91,117,857 $180,919,131 $353,022,311 $109,397,696
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income
included in net assets at end of period $(145,835) $(579,928) $(629,708) $(247,616)
- --------------------------------------------------------------------------------------------------------------------------------
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 3/31/05
CHANGE IN NET ASSETS
OPERATIONS
Net investment income $7,197,796 $5,340,555 $14,787,096 $6,504,194
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 930,247 1,007,888 3,298,859 (76,934)
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments (4,411,964) (3,338,157) (9,424,724) (3,229,447)
- --------------------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $3,716,079 $3,010,286 $8,661,231 $3,197,813
- --------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
Class A $(5,900,829) $(4,493,724) $(13,347,276) $(5,865,720)
- --------------------------------------------------------------------------------------------------------------------------------
Class B (1,287,235) (765,363) (855,754) (572,534)
- --------------------------------------------------------------------------------------------------------------------------------
Class C -- -- (489,932) --
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- (753,833) --
- --------------------------------------------------------------------------------------------------------------------------------
Class B -- (154,547) -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(7,188,064) $(6,167,467) $(14,692,962) $(6,438,254)
- --------------------------------------------------------------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS
Net proceeds from sale of shares $13,511,576 $9,769,194 $20,694,470 $8,490,937
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in reinvestment
of distributions 4,984,841 3,893,707 9,044,221 4,607,193
- --------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (28,378,740) (28,275,785) (44,797,381) (19,407,595)
- --------------------------------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(9,882,323) $(14,612,884) $(15,058,690) $(6,309,465)
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees $-- $-- $606 $44
- --------------------------------------------------------------------------------------------------------------------------------
Total change in net assets $(13,354,308) $(17,770,065) $(21,089,815) $(9,549,862)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period 174,728,086 143,295,982 338,120,270 158,343,012
- --------------------------------------------------------------------------------------------------------------------------------
At end of period $161,373,778 $125,525,917 $317,030,455 $148,793,150
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment
income included in net assets at end of period $(104,050) $(285,525) $(862,634) $(336,222)
- --------------------------------------------------------------------------------------------------------------------------------
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 3/31/04
CHANGE 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
- --------------------------------------------------------------------------------------------------------------------------------
Change 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)
- --------------------------------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(4,929,773) $6,752,482 $(18,476,676) $6,776,324
- --------------------------------------------------------------------------------------------------------------------------------
Total change 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
CHANGE 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 (loss) on investments 1,270,567 461,119 3,861,843 808,352
- --------------------------------------------------------------------------------------------------------------------------------
Change 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)
- --------------------------------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $6,273,570 $(727,582) $(11,721,293) $(1,401,292)
- --------------------------------------------------------------------------------------------------------------------------------
Total change 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
- --------------------------------------------------------------------------------------------------------------------------------
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 (or, if
shorter, the period of the fund's operations). 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
registered public accounting firm, whose report, together with the fund's financial statements, are included in this report.
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of period $10.02 $10.02 $9.61 $9.78 $9.37
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.46 $0.46 $0.46 $0.49 $0.50
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.19) 0.01 0.44 (0.16) 0.41
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.27 $0.47 $0.90 $0.33 $0.91
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.47) $(0.47) $(0.49) $(0.50) $(0.50)
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.82 $10.02 $10.02 $9.61 $9.78
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 2.76 4.77 9.48 3.45 10.02
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.58 0.62 0.64 0.65 0.65
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.70 4.61 4.70 5.05 5.28
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 19 12 22 6 19
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $79,574 $82,507 $87,724 $76,004 $67,458
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.44 $0.44 $0.44 $0.47 $0.48
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 0.83 0.82 0.84 0.85 0.85
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.45 4.41 4.50 4.85 5.08
- --------------------------------------------------------------------------------------------------------------------------------
(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 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 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 do not include the applicable sales charge. If the charge had been included, the results would have been
lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MISSISSIPPI MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of period $10.03 $10.04 $9.62 $9.79 $9.38
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.39 $0.38 $0.38 $0.42 $0.43
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.19) (0.01)^ 0.44 (0.17) 0.41
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.20 $0.37 $0.82 $0.25 $0.84
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.39) $(0.38) $(0.40) $(0.42) $(0.43)
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.84 $10.03 $10.04 $9.62 $9.79
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 2.08 3.80 8.67 2.62 9.17
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.35 1.44 1.47 1.45 1.43
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.93 3.79 3.86 4.23 4.50
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 19 12 22 6 19
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $11,544 $13,177 $12,900 $10,177 $10,986
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.36 $0.36 $0.36 $0.40 $0.41
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.60 1.64 1.67 1.65 1.63
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.68 3.59 3.66 4.03 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 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 amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
^ 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 2005 2004 2003 2002 2001
Net asset value, beginning of period $11.53 $11.49 $10.94 $11.14 $10.58
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.51 $0.51 $0.52 $0.53 $0.55
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.24) 0.04 0.56 (0.18) 0.57
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.27 $0.55 $1.08 $0.35 $1.12
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.50) $(0.51) $(0.53) $(0.54) $(0.55)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.01) (0.01)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.50) $(0.51) $(0.53) $(0.55) $(0.56)
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.30 $11.53 $11.49 $10.94 $11.14
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 2.45 4.90 10.05 3.16 10.75
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.79 0.86 0.87 0.88 0.86
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.47 4.39 4.56 4.80 5.10
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 20 13 17 18 35
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $125,861 $131,642 $132,843 $121,717 $125,917
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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 $0.48 $0.49 $0.51 $0.52
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.04 1.06 1.07 1.08 1.06
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.22 4.19 4.36 4.60 4.90
- --------------------------------------------------------------------------------------------------------------------------------
(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 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 do not include the applicable sales charge. If the charge had been included, the results would have been
lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NEW YORK MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of period $11.49 $11.45 $10.93 $11.13 $10.58
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.42 $0.42 $0.43 $0.45 $0.46
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.22) 0.04 0.54 (0.19) 0.57
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.20 $0.46 $0.97 $0.26 $1.03
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.42) $(0.42) $(0.45) $(0.45) $(0.47)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.01) (0.01)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.42) $(0.42) $(0.45) $(0.46) $(0.48)
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.27 $11.49 $11.45 $10.93 $11.13
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 1.77 4.12 8.96 2.39 9.94
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.54 1.60 1.62 1.63 1.61
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.70 3.62 3.80 4.05 4.33
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 20 13 17 18 35
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $35,328 $41,509 $40,867 $29,903 $25,928
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.39 $0.39 $0.41 $0.43 $0.44
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.79 1.80 1.82 1.83 1.81
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.45 3.42 3.60 3.85 4.13
- --------------------------------------------------------------------------------------------------------------------------------
(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 amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NEW YORK MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
Years Ended 3/31 Period Ended
2005 2004 2003 2002 3/31/2001*
CLASS C
Net asset value, beginning of period $11.51 $11.47 $10.93 $11.13 $10.91
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.42 $0.42 $0.43 $0.45 $0.14
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.22) 0.04 0.56 (0.18) 0.23
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.20 $0.46 $0.99 $0.27 $0.37
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.42) $(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) $(0.42) $(0.45) $(0.47) $(0.15)
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.29 $11.51 $11.47 $10.93 $11.13
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 1.78 4.12 9.14 2.39 3.36++
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.54 1.60 1.62 1.63 1.61+
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.72 3.63 3.81 4.05 4.20+
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 20 13 17 18 35
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $19,730 $21,907 $14,005 $10,178 $8,578
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.39 $0.39 $0.41 $0.43 $0.14
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.79 1.80 1.82 1.83 1.81+
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.47 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 amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NORTH CAROLINA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of period $12.30 $12.24 $11.68 $11.89 $11.35
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.53 $0.53 $0.54 $0.57 $0.58
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.27) 0.07 0.58 (0.21) 0.55
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.26 $0.60 $1.12 $0.36 $1.13
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.53) $(0.53) $(0.56) $(0.57) $(0.58)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.00)+++ (0.01)
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (0.04) (0.01) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.57) $(0.54) $(0.56) $(0.57) $(0.59)
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.99 $12.30 $12.24 $11.68 $11.89
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 2.15 5.01 9.71 3.08 10.20
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.85 0.92 0.91 0.92 0.91
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.38 4.30 4.50 4.78 5.03
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 9 9 20 13 27
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $279,875 $305,185 $316,687 $303,250 $308,447
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.50 $0.50 $0.52 $0.54 $0.56
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.10 1.12 1.11 1.12 1.11
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.13 4.10 4.30 4.58 4.83
- --------------------------------------------------------------------------------------------------------------------------------
(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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(+) Total returns 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 2005 2004 2003 2002 2001
Net asset value, beginning of period $12.29 $12.23 $11.67 $11.89 $11.35
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.45 $0.45 $0.47 $0.48 $0.50
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.27) 0.07 0.57 (0.20) 0.55
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.18 $0.52 $1.04 $0.28 $1.05
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.45) $(0.45) $(0.48) $(0.49) $(0.50)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.01) (0.01)
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (0.04) (0.01) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.49) $(0.46) $(0.48) $(0.50) $(0.51)
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.98 $12.29 $12.23 $11.67 $11.89
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 1.49 4.33 9.01 2.33 9.49
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.50 1.56 1.56 1.57 1.56
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.72 3.64 3.85 4.07 4.37
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 9 9 20 13 27
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $40,251 $50,363 $59,116 $57,534 $60,449
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.42 $0.42 $0.44 $0.46 $0.48
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.75 1.76 1.76 1.77 1.76
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.47 3.44 3.65 3.87 4.17
- --------------------------------------------------------------------------------------------------------------------------------
(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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NORTH CAROLINA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS C 2005 2004 2003 2002 2001
Net asset value, beginning of period $12.29 $12.23 $11.67 $11.89 $11.35
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.45 $0.45 $0.46 $0.48 $0.50
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.27) 0.07 0.58 (0.20) 0.55
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.18 $0.52 $1.04 $0.28 $1.05
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.45) $(0.45) $(0.48) $(0.49) $(0.50)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.01) (0.01)
- --------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (0.04) (0.01) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.49) $(0.46) $(0.48) $(0.50) $(0.51)
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.98 $12.29 $12.23 $11.67 $11.89
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 1.49 4.33 9.01 2.33 9.49
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.51 1.57 1.56 1.57 1.56
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.76 3.67 3.84 4.07 4.37
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 9 9 20 13 27
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $32,897 $35,256 $31,836 $23,741 $19,099
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.42 $0.43 $0.44 $0.46 $0.48
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.76 1.77 1.76 1.77 1.76
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.51 3.47 3.64 3.87 4.17
- --------------------------------------------------------------------------------------------------------------------------------
(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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) PENNSYLVANIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of period $10.31 $10.21 $9.73 $9.85 $9.36
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.44 $0.42 $0.45 $0.48 $0.49
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.14) 0.10 0.51 (0.11) 0.49
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.30 $0.52 $0.96 $0.37 $0.98
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.44) $(0.42) $(0.48) $(0.49) $(0.49)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.00)+++ --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.44) $(0.42) $(0.48) $(0.49) $(0.49)
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.17 $10.31 $10.21 $9.73 $9.85
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 2.97 5.12 10.12 3.85 10.85
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.60 0.64 0.48 0.36 0.37
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.33 4.12 4.47 4.90 5.17
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 20 24 19 19 10
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $67,942 $75,083 $68,705 $47,661 $33,842
- --------------------------------------------------------------------------------------------------------------------------------
(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 and certain other fees and expenses 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. Effective June 7, 2004, the investment adviser also has voluntarily
agreed to reimburse the fund for its proportional share of substantially all of Independent Chief Compliance Officer service
fees paid to Tarantino LLC. 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) $0.40 $0.39 $0.40 $0.43 $0.44
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 0.94 0.94 0.96 0.89 0.93
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.99 3.82 3.99 4.37 4.61
- --------------------------------------------------------------------------------------------------------------------------------
(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 do not include the applicable sales charge. If the charge had been included, the results would have been
lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) PENNSYLVANIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of period $10.34 $10.24 $9.75 $9.88 $9.38
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.36 $0.34 $0.36 $0.40 $0.42
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.14) 0.10 0.53 (0.12) 0.50
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.22 $0.44 $0.89 $0.28 $0.92
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.36) $(0.34) $(0.40) $(0.41) $(0.42)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.00)+++ --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.36) $(0.34) $(0.40) $(0.41) $(0.42)
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.20 $10.34 $10.24 $9.75 $9.88
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 2.19 4.38 9.21 2.86 10.06
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.37 1.44 1.30 1.20 1.17
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.56 3.32 3.62 4.06 4.38
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 20 24 19 19 10
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $41,455 $48,480 $46,941 $28,286 $20,827
- --------------------------------------------------------------------------------------------------------------------------------
(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 and certain other fees and expenses 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. Effective June 7, 2004, the investment adviser also has voluntarily
agreed to reimburse the fund for its proportional share of substantially all of Independent Chief Compliance Officer service
fees paid to Tarantino LLC. 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) $0.33 $0.31 $0.32 $0.35 $0.36
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.71 1.74 1.78 1.73 1.73
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.22 3.02 3.14 3.53 3.82
- --------------------------------------------------------------------------------------------------------------------------------
(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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) SOUTH CAROLINA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of period $12.61 $12.53 $12.00 $12.15 $11.58
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.56 $0.55 $0.58 $0.60 $0.60
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.25) 0.10 0.54 (0.16) 0.56
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.31 $0.65 $1.12 $0.44 $1.16
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.56) $(0.57) $(0.59) $(0.59) $(0.59)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.36 $12.61 $12.53 $12.00 $12.15
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 2.52 5.30 9.51 3.68 10.26
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA(S):
Expenses## 0.89 0.94 0.95 0.94 0.96
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.50 4.39 4.68 4.91 5.13
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 15 16 21 10 33
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $130,342 $137,911 $129,844 $121,438 $120,529
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.53 $0.53 $0.55 $0.57 $0.58
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.14 1.14 1.15 1.14 1.16
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.25 4.19 4.48 4.71 4.93
- --------------------------------------------------------------------------------------------------------------------------------
(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 amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(+) Total returns 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 2005 2004 2003 2002 2001
Net asset value, beginning of period $12.60 $12.52 $11.99 $12.14 $11.58
- --------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income (loss)(S) $0.48 $0.47 $0.50 $0.52 $0.52
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.24) 0.10 0.54 (0.16) 0.55
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.24 $0.57 $1.04 $0.36 $1.07
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.48) $(0.49) $(0.51) $(0.51) $(0.51)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.36 $12.60 $12.52 $11.99 $12.14
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 1.94 4.62 8.81 3.01 9.46
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.54 1.59 1.60 1.59 1.61
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss)(S)(S) 3.85 3.74 4.03 4.25 4.47
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 15 16 21 10 33
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $31,032 $36,817 $37,603 $34,139 $33,302
- --------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. If these fees had been incurred by the fund, the
net investment income per share and the ratios would have been:
Net investment income (loss)(S)(S) $0.45 $0.45 $0.47 $0.49 $0.50
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.79 1.79 1.80 1.79 1.81
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss)(S)(S) 3.60 3.54 3.83 4.05 4.27
- --------------------------------------------------------------------------------------------------------------------------------
(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 $0.03 per share. In addition, the ratio of net investment
income to average net assets increased by less than 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 amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) TENNESSEE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of period $10.96 $10.90 $10.43 $10.58 $10.11
- -------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.45 $0.45 $0.47 $0.49 $0.50
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.18) 0.06 0.49 (0.14) 0.47
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.27 $0.51 $0.96 $0.35 $0.97
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.44) $(0.45) $(0.49) $(0.50) $(0.50)
- -------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (0.08) -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.00)+++ --
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.52) $(0.45) $(0.49) $(0.50) $(0.50)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.71 $10.96 $10.90 $10.43 $10.58
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 2.53 4.80 9.34 3.36 9.87
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.91 0.94 0.97 0.94 0.95
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.16 4.08 4.35 4.66 4.87
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 11 19 16 12 19
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $104,837 $118,990 $115,819 $101,294 $99,097
- -------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer services paid to Tarantino LLC. 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) $0.42 $0.42 $0.45 $0.47 $0.48
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.16 1.14 1.17 1.14 1.15
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.91 3.88 4.15 4.46 4.67
- -------------------------------------------------------------------------------------------------------------------------------
(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 do not include the applicable sales charge. If the charge had been included, the results would have been
lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) TENNESSEE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of period $10.95 $10.89 $10.42 $10.57 $10.10
- -------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.38 $0.38 $0.40 $0.42 $0.43
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.18) 0.06 0.49 (0.14) 0.47
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.20 $0.44 $0.89 $0.28 $0.90
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.37) $(0.38) $(0.42) $(0.43) $(0.43)
- -------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (0.08) -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.00)+++ --
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.45) $(0.38) $(0.42) $(0.43) $(0.43)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.70 $10.95 $10.89 $10.42 $10.57
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 1.87 4.12 8.64 2.69 9.17
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.56 1.59 1.62 1.59 1.60
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.51 3.43 3.70 4.00 4.22
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 11 19 16 12 19
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $20,689 $24,306 $27,546 $26,183 $23,656
- -------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, Effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.35 $0.35 $0.38 $0.40 $0.41
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.81 1.79 1.82 1.79 1.80
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.26 3.23 3.50 3.80 4.02
- -------------------------------------------------------------------------------------------------------------------------------
(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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of period $11.73 $11.61 $11.14 $11.36 $10.91
- -------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.53 $0.53 $0.53 $0.54 $0.56
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.21) 0.12 0.47 (0.22) 0.45
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.32 $0.65 $1.00 $0.32 $1.01
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.53) $(0.53) $(0.53) $(0.54) $(0.56)
- -------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.00)+++ (0.00)+++
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.53) $(0.53) $(0.53) $(0.54) $(0.56)
- -------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.52 $11.73 $11.61 $11.14 $11.36
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& 2.83 5.70 9.10 2.87 9.55
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.85 0.93 0.93 0.92 0.91
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.63 4.53 4.62 4.77 5.06
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 11 11 13 14 24
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $285,185 $301,218 $308,164 $299,088 $304,581
- -------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.51 $0.51 $0.51 $0.52 $0.54
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.10 1.13 1.13 1.12 1.11
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.38 4.33 4.42 4.57 4.86
- -------------------------------------------------------------------------------------------------------------------------------
(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 the 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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(+) Total returns 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) VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of period $11.72 $11.60 $11.13 $11.35 $10.91
- -------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.46 $0.45 $0.46 $0.47 $0.48
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.21) 0.12 0.46 (0.22) 0.44
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.25 $0.57 $0.92 $0.25 $0.92
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.46) $(0.45) $(0.45) $(0.47) $(0.48)
- -------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.00)+++ (0.00)+++
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.46) $(0.45) $(0.45) $(0.47) $(0.48)
- -------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.51 $11.72 $11.60 $11.13 $11.35
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 2.16 5.02 8.40 2.20 8.76
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.50 1.57 1.58 1.58 1.56
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.98 3.88 3.97 4.12 4.39
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 11 11 13 14 24
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $19,637 $23,564 $25,470 $26,970 $29,872
- -------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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 $0.43 $0.43 $0.45 $0.46
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.75 1.77 1.78 1.78 1.76
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.73 3.68 3.77 3.92 4.19
- -------------------------------------------------------------------------------------------------------------------------------
(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 the 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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS C 2005 2004 2003 2002 2001
Net asset value, beginning of period $11.72 $11.61 $11.13 $11.36 $10.91
- -------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.46 $0.45 $0.45 $0.47 $0.48
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.20) 0.11 0.48 (0.23) 0.45
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.26 $0.56 $0.93 $0.24 $0.93
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.46) $(0.45) $(0.45) $(0.47) $(0.48)
- -------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- (0.00)+++ (0.00)+++
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.46) $(0.45) $(0.45) $(0.47) $(0.48)
- -------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.52 $11.72 $11.61 $11.13 $11.36
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 2.25 4.93 8.49 2.10 8.85
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.50 1.57 1.58 1.57 1.56
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.98 3.88 3.97 4.10 4.37
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 11 11 13 14 24
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $12,208 $13,338 $12,758 $10,619 $6,965
- -------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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 $0.43 $0.43 $0.44 $0.46
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.75 1.77 1.78 1.77 1.76
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.73 3.68 3.77 3.90 4.17
- -------------------------------------------------------------------------------------------------------------------------------
(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 the 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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) WEST VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of period $11.82 $11.77 $11.32 $11.45 $10.95
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.51 $0.51 $0.55 $0.57 $0.57
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.25) 0.05 0.46 (0.14) 0.50
- --------------------------------------------------------------------------------------------
Total from investment operations $0.26 $0.56 $1.01 $0.43 $1.07
- --------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.50) $(0.51) $(0.56) $(0.56) $(0.57)
- --------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- --------------------------------------------------------------------------------------------
Net asset value, end of period $11.58 $11.82 $11.77 $11.32 $11.45
- --------------------------------------------------------------------------------------------
Total return (%)(+)& 2.28 4.84 9.04 3.79 10.04
- --------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 0.89 0.93 0.96 0.93 0.95
- --------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.35 4.33 4.71 4.97 5.14
- --------------------------------------------------------------------------------------------
Portfolio turnover 14 17 13 2 9
- --------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $134,459 $140,599 $139,564 $121,860 $118,862
- --------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer services paid to Tarantino LLC. 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 $0.53 $0.55 $0.55
- --------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.14 1.13 1.16 1.13 1.15
- --------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.10 4.13 4.51 4.77 4.94
- --------------------------------------------------------------------------------------------
(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 do not include the applicable sales charge. If the charge had been included, the results would have been
lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) WEST VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------------------
For years ended 3/31
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of period $11.82 $11.76 $11.31 $11.44 $10.94
- -------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#(S)(S)
Net investment income(S) $0.43 $0.43 $0.47 $0.50 $0.50
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.24) 0.06 0.46 (0.15) 0.50
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.19 $0.49 $0.93 $0.35 $1.00
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.43) $(0.43) $(0.48) $(0.48) $(0.50)
- -------------------------------------------------------------------------------------------------------------------------------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.58 $11.82 $11.76 $11.31 $11.44
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%)& 1.62 4.25 8.34 3.12 9.34
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA(S):
Expenses## 1.54 1.58 1.61 1.59 1.60
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.71 3.68 4.06 4.31 4.48
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 14 17 13 2 9
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $14,334 $17,744 $19,443 $16,248 $16,170
- -------------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for its proportional share of substantially all of
Independent Chief Compliance Officer services paid to Tarantino LLC. 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) $0.40 $0.41 $0.45 $0.47 $0.48
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) TO AVERAGE NET ASSETS:
Expenses## 1.79 1.78 1.81 1.79 1.80
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.46 3.48 3.86 4.11 4.28
- -------------------------------------------------------------------------------------------------------------------------------
(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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
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 U.S.
generally accepted accounting principles 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 - 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. 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 approximates market value as determined by the Board of
Trustees. When pricing service information or market quotations are not readily
available, securities are priced at fair value as determined under the
direction of 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. The funds use swaps for both
hedging and non-hedging purposes. For hedging purposes, the funds may use swaps
to reduce its exposure to interest and foreign exchange rate fluctuations. For
non-hedging purposes, the funds 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 Swaps - Each 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.
Short Term Fees - For purchases made on or after July 1, 2004 and before April
1, 2005, each fund charged a 2% redemption fee (which was retained by each
fund) on proceeds from Class A, Class B, and Class C shares redeemed or
exchanged within 5 business days following their acquisition (either by
purchase or exchange). Effective April 1, 2005, each fund will no longer charge
a redemption fee. See the funds' prospectus for details. Any redemption fees
charged are accounted for as an addition to paid-in-capital.
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 U.S. generally accepted accounting principles. 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. Each fund may receive
proceeds from litigation settlements involving its portfolio holdings. Any
proceeds received are reflected in realized gain/loss in the statement of
operations, or in unrealized gain/loss if the security is still held by the
fund.
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, 2005, 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, expiration of capital loss carry
forward, treating a portion of the proceeds from redemptions as a distribution
for tax purposes and amortization and accretion on debt securities and net
operating losses.
The tax character of distributions declared for the years ended March 31, 2005
and March 31, 2004 was as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
YEAR ENDED 3/31/05 FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions declared from:
Tax-exempt income $4,288,716 $7,823,631 $15,104,858 $4,481,113 $7,152,028 $5,259,087 $14,692,962 $6,402,713
- ------------------------------------------------------------------------------------------------------------------------------------
Ordinary income -- -- 338,971 -- 36,036 194,393 -- 35,541
- ------------------------------------------------------------------------------------------------------------------------------------
Long-term capital gain -- -- 1,184,575 -- -- 713,987 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $4,288,716 $7,823,631 $16,628,404 $4,481,113 $7,188,064 $6,167,467 $14,692,962 $6,438,254
- ------------------------------------------------------------------------------------------------------------------------------------
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
YEAR ENDED 3/31/05 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
- ------------------------------------------------------------------------------------------------------------------------------------
During the year ended March 31, 2005, the following amounts were reclassified due to differences between book and tax accounting
for amortization and accretion on debt securities, expiration of capital loss carry forward, derivatives, defaulted bonds, net
operating losses and treating a portion of the proceeds from redemptions as a distribution for tax purposes:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
YEAR ENDED 3/31/05 FUND FUND FUND FUND FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
Increase (decrease):
Paid-in capital $(244,329) $102,921 $221,887 $20,589 $(16,975) $127,572 $80,902 $(714,690)
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated
undistributed net
realized gain (loss)
on investments 211,324 (83,019) (649,197) (23,589) 54,479 (156,160) (75,564) 722,658
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated
undistributed
(distributions in
excess of) net
investment income 33,005 (19,902) 427,310 3,000 (37,504) 28,588 (5,338) (7,968)
- -----------------------------------------------------------------------------------------------------------------------------------
These changes had no effect on the net assets or net asset value per share of the funds.
As of March 31, 2005, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
YEAR ENDED 3/31/05 FUND FUND FUND FUND FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
Undistributed tax-
exempt income $210,462 $48,816 $626,554 $134,028 $489,563 $139,959 $347,921 $194,988
- -----------------------------------------------------------------------------------------------------------------------------------
Undistributed ordinary
income -- -- -- -- -- 10,961 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Capital loss
carryforward (287,448) -- -- (540,893) (1,301,294) -- (1,228,716) (425,144)
- -----------------------------------------------------------------------------------------------------------------------------------
Undistributed long-
term capital gains -- 641,119 139,770 -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Post-October capital
loss carryforward (328,645) -- -- -- -- -- -- (209,354)
- -----------------------------------------------------------------------------------------------------------------------------------
Unrealized
appreciation
(depreciation) 4,291,618 12,408,479 22,402,961 4,533,706 10,767,643 7,320,817 18,234,990 8,884,754
- -----------------------------------------------------------------------------------------------------------------------------------
Other temporary
differences (268,427) (510,294) (1,160,743) (249,147) (537,258) (448,441) (1,320,020) (420,520)
- -----------------------------------------------------------------------------------------------------------------------------------
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 on:
SOUTH WEST
MISSISSIPPI PENNSYLVANIA CAROLINA VIRGINIA VIRGINIA
EXPIRATION DATE FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
March 31, 2008 $-- $(43,665) $-- $-- $(58,823)
- -----------------------------------------------------------------------------------------------------------------------------------
March 31, 2009 -- (175,279) (1,301,294) -- (220,540)
- -----------------------------------------------------------------------------------------------------------------------------------
March 31, 2010 -- -- -- (862,340) (83,347)
- -----------------------------------------------------------------------------------------------------------------------------------
March 31, 2011 -- (120,267) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
March 31, 2012 -- (201,682) -- (366,376) --
- -----------------------------------------------------------------------------------------------------------------------------------
March 31, 2013 (287,448) -- -- -- (62,434)
- -----------------------------------------------------------------------------------------------------------------------------------
Total $(287,448) $(540,893) $(1,301,294) $(1,228,716) $(425,144)
- -----------------------------------------------------------------------------------------------------------------------------------
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 shares outstanding of each class, without distinction between share
classes. Dividends are declared separately for each class. Differences in per
share dividend rates are generally due to differences in separate class
expenses. 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. As part of a settlement agreement with
the New York Attorney General concerning market timing and related matters (See
Legal Proceedings footnote), MFS has agreed to reduce each fund's management
fee to 0.30% of average daily net assets for the period March 1, 2004 through
February 28, 2009, which is shown as a reduction of total expenses in the
Statement of Operations. 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.
For the Pennsylvania Fund, the investment adviser has contractually agreed to
pay the fund's "other expenses", which are defined as the fund's operating
expenses, exclusive of management, distribution and service fees, and certain
other fees and expenses, such that the fund's other expenses do not exceed
0.20% of average daily net assets on an annualized basis. This is reflected as
a reduction of expenses in the Statement of Operations.
Each fund pays compensation to its Independent Trustees in the form of a
retainer, attendance fees, and additional compensation to Board and Committee
chairpersons, and pays no compensation directly to its Trustees who are
officers of the investment adviser, or to officers of the funds, all of whom
receive remuneration for their services to the funds from MFS. Certain officers
and Trustees of the funds 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
Trustees' compensation is a pension expense for retired Independent Trustees
for the year ended March 31, 2005:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
YEAR ENDED 3/31/05 FUND FUND FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
Pension Expense $969 $1,292 $1,888 $987 $1,853 $1,184 $1,878 $1,850
- ------------------------------------------------------------------------------------------------------------------------------------
These funds and certain other MFS funds (the "funds") have entered into a
services agreement (the "Agreement") which provides for payment of fees by the
funds to Tarantino LLC in return for the provision of services of an
Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an
officer of the funds and the sole member of Tarantino LLC. MFS has agreed to
reimburse each of the funds for a proportional share of substantially all of
the payments made by the funds to Tarantino LLC and also to provide office
space and other administrative support and supplies to the ICCO. The funds can
terminate the Agreement with Tarantino LLC at any time under the terms of the
Agreement.
Administrator - MFS provides certain financial, legal, shareholder
communications, compliance, and other administrative services to certain funds
for which MFS acts as investment advisor. 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. Each
fund paid MFS an administrative fee up to the following annual percentage rates
of the fund's average daily net assets:
4/01/04
THROUGH
EFFECTIVE DATE 2/28/05 3/01/05
First $2 billion 0.01120% 0.01626%
- -------------------------------------------------------------------------------
Next $2.5 billion 0.00832% 0.01206%
- -------------------------------------------------------------------------------
Next $2.5 billion 0.00032% 0.00056%
- -------------------------------------------------------------------------------
In excess of $7 billion 0.00000% 0.00000%
- -------------------------------------------------------------------------------
For the year ended March 31, 2005, each fund paid MFS the following amounts
and 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
YEAR ENDED 3/31/05 FUND FUND FUND FUND FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses paid $7,341 $14,737 $29,062 $8,935 $13,085 $10,495 $25,753 $12,040
- -----------------------------------------------------------------------------------------------------------------------------------
Percentage of average
daily net assets 0.0080% 0.0079% 0.0079% 0.0080% 0.0080% 0.0080% 0.0079% 0.0079%
- -----------------------------------------------------------------------------------------------------------------------------------
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, 2005:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
$22,360 $35,375 $57,124 $43,013 $39,811 $32,599 $49,634 $35,102
- ----------------------------------------------------------------------------------------------------------------------------------
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, 2005, MFD retained the following service fees for accounts not attributable to a
securities dealer:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
$-- $9,220 $9,488 $317 $3,208 $1,038 $13,906 $5,830
- ----------------------------------------------------------------------------------------------------------------------------------
During the year ended March 31, 2005, 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%
- ----------------------------------------------------------------------------------------------------------------------------------
Payment of the Mississippi Fund's 0.35% per annum Class A distribution and service fee will commence on such date as the Trustees
of the Trust may determine. In the case of the New York and Pennsylvania Funds, 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 (0.15%) 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. Class B and Class C service fees retained for the year
ended March 31, 2005 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 $-- $137 $43 $394 $180 $-- $94 $33
- -----------------------------------------------------------------------------------------------------------------------------------
Class C N/A 2 1 N/A N/A N/A $905 N/A
- -----------------------------------------------------------------------------------------------------------------------------------
During the year ended March 31, 2005, 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 0.77% 1.00% 1.00% 0.87% 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, 2005, 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 $9,854 $-- $2,000 $-- $7,431 $10,595 $1,823 $7
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 18,336 98,443 80,261 117,790 60,125 50,314 29,593 76,536
- -----------------------------------------------------------------------------------------------------------------------------------
Class C N/A 2,606 6,554 N/A N/A N/A 4,449 N/A
- -----------------------------------------------------------------------------------------------------------------------------------
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 each fund's average daily net
assets is set periodically under the supervision of the fund's Trustees. For the period April 1, 2004 through June 30, 2004, the
fee was set at 0.10% of each fund's average daily net assets. For the period July 1, 2004 through December 31, 2004, each fund
was charged up to 0.0861% of its average daily net assets. For the period January 1, 2005 through February 28, 2005, each fund
was charged up to 0.1035% of its average daily net assets. Effective March 1, 2005, each fund is charged up to 0.1159% of its
average daily net assets. For the year ended March 31, 2005, each fund paid MFSC the following fee for shareholder services:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses paid $86,911 $174,897 $344,246 $105,536 $154,959 $124,087 $305,026 $142,800
- -----------------------------------------------------------------------------------------------------------------------------------
Percentage of average daily
net assets 0.0941% 0.0941% 0.0941% 0.0942% 0.0941% 0.0941% 0.0941% 0.0941%
- -----------------------------------------------------------------------------------------------------------------------------------
Shareholder service costs include out of pocket expenses and sub accounting services expenses paid by MFSC on behalf of the funds
and subsequently reimbursed to MFSC, as well as other costs paid by the funds directly to unaffiliated vendors. For the year
ended March 31, 2005 the out of pocket expenses and sub accounting services expenses amounted to the following:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
$22,765 $49,439 $49,056 $27,183 $32,462 $22,171 $65,947 $28,986
- -----------------------------------------------------------------------------------------------------------------------------------
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than U.S. government securities, purchased option transactions, 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 $16,502,406 $36,751,958 $31,774,733 $21,968,188 $24,193,168 $14,637,260 $34,746,093 $21,204,835
- -----------------------------------------------------------------------------------------------------------------------------------
Sales $19,139,993 $49,412,789 $66,622,450 $36,614,641 $34,097,048 $30,730,690 $52,521,263 $28,140,075
- -----------------------------------------------------------------------------------------------------------------------------------
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
YEAR ENDED 3/31/05 FUND FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Aggregate cost $86,262,498 $164,400,992 $325,549,250 $104,245,497 $149,275,392 $116,420,324 $299,477,424 $135,341,992
- -----------------------------------------------------------------------------------------------------------------------------------
Gross unrealized
appreciation 4,509,579 12,634,709 22,595,663 4,635,034 10,874,950 7,449,802 18,540,523 9,052,972
- ------------------------------------------------------------------------------------------------------------------------------------
Gross unrealized
depreciation (217,961) (226,230) (192,702) (101,328) (107,307) (128,985) (305,533) (168,218)
- ------------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) $4,291,618 $12,408,479 $22,402,961 $4,533,706 $10,767,643 $7,320,817 $18,234,990 $8,884,754
- ------------------------------------------------------------------------------------------------------------------------------------
(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:
MISSISSIPPI FUND NEW YORK FUND NORTH CAROLINA FUND PENNSYLVANIA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Year ended 3/31/05 (000 Omitted) SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold 849 $8,374 815 $9,247 1,144 $13,852 940 $9,573
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 202 1,995 341 3,877 801 9,698 199 2,028
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (1,182) (11,628) (1,439) (16,300) (3,418) (41,257) (1,740) (17,572)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Change (131) $(1,259) (283) $(3,176) (1,473) $(17,707) (601) $(5,971)
- -----------------------------------------------------------------------------------------------------------------------------------
Year ended 3/31/04 (000 Omitted)
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 Change (519) $(5,199) (146) $(1,654) (1,053) $(12,843) 554 $5,670
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Year ended 3/31/05 (000 Omitted)
Shares sold 68 $671 189 $2,135 226 $2,728 219 $2,233
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 27 266 82 932 91 1,084 104 1,055
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (234) (2,311) (746) (8,419) (1,055) (12,698) (947) (9,607)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Change (139) $(1,374) (475) $(5,352) (738) $(8,886) (624) $(6,319)
- -----------------------------------------------------------------------------------------------------------------------------------
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 Change 28 $269 43 $542 (734) $(8,954) 105 $1,106
- -----------------------------------------------------------------------------------------------------------------------------------
NEW YORK FUND NORTH CAROLINA FUND VIRGINIA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Year ended 3/31/05 (000 Omitted) SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold 254 $2,882 351 $4,238 152 $1,778
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 41 464 86 1,042 30 343
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (450) (5,099) (561) (6,768) (260) (2,996)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Change (155) $(1,753) (124) $(1,488) (78) $(875)
- -----------------------------------------------------------------------------------------------------------------------------------
Year ended 3/31/04 (000 Omitted)
Shares sold 965 $11,104 748 $9,197 234 $2,754
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 39 449 76 934 30 351
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (322) (3,689) (558) (6,811) (226) (2,626)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Change 682 $7,864 266 $3,320 38 $479
- -----------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND WEST VIRGINIA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Year ended 3/31/05 (000 Omitted) SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold 951 $11,758 807 $8,690 1,463 $16,951 650 $7,567
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 331 4,103 305 3,295 708 8,199 363 4,229
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (1,677) (20,680) (2,185) (23,512) (3,103) (35,811) (1,297) (15,045)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Change (395) $(4,819) (1,073) $(11,527) (932) $(10,661) (284) $(3,249)
- -----------------------------------------------------------------------------------------------------------------------------------
Year ending 3/31/04 (000 Omitted)
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 Change 575 $7,296 235 $2,646 (862) $(10,055) 28 $374
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Year ended 3/31/05 (000 Omitted)
Shares sold 142 $1,754 100 $1,079 170 $1,965 79 $924
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of distributions 71 882 56 599 44 502 33 378
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (623) (7,699) (443) (4,764) (519) (5,990) (375) (4,362)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Change (410) $(5,063) (287) $(3,086) (305) $(3,523) (263) $(3,060)
- -----------------------------------------------------------------------------------------------------------------------------------
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 Change (81) $(1,023) (309) $(3,374) (185) $(2,145) (152) $(1,775)
- -----------------------------------------------------------------------------------------------------------------------------------
(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 Federal
Reserve funds 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, 2005 ranged from $414 to
$1,682, and is included in miscellaneous expense. None of the funds had
significant borrowings during the year ended March 31, 2005.
(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 and foreign currency exchange 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 Swaps
NOTIONAL CASH FLOWS UNREALIZED
PRINCIPAL AMOUNT CASH FLOWS PAID RECEIVED BY APPRECIATION
FUND EXPIRATION CURRENCY OF CONTRACT BY THE FUND THE FUND (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------------------------------------
Mississippi Fund Fixed - 3 Year
BMA Swap Index, Floating - 7 Day
12/01/07 USD 2,000,000 (2.795%) BMA Swap Index $14,965
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
6/15/15 USD 2,000,000 (3.702%) BMA Swap Index 23,314
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
6/22/15 USD 1,000,000 (3.628%) BMA Swap Index 17,735
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
9/01/15 USD 1,000,000 (3.937%) BMA Swap Index (2,979)
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 12 Year
BMA Swap Index, Floating - 7 Day
4/06/17 USD 1,000,000 (3.884%) BMA Swap Index 2,372
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 12 Year
BMA Swap Index, Floating - 7 Day
4/20/17 USD 1,500,000 (3.714%) BMA Swap Index 27,121
- -----------------------------------------------------------------------------------------------------------------------------------
Total Mississippi Fund $82,528
- -----------------------------------------------------------------------------------------------------------------------------------
New York Fund Fixed - 3 Year
BMA Swap Index, Floating - 7 Day
12/01/07 USD 3,000,000 (2.795%) BMA Swap Index $22,460
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
6/27/15 USD 2,000,000 (3.809%) BMA Swap Index 7,867
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
8/03/15 USD 2,000,000 (3.803%) BMA Swap Index 12,203
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 11 Year
BMA Swap Index, Floating - 7 Day
7/12/16 USD 2,000,000 (3.777%) BMA Swap Index 23,874
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 12 Year
BMA Swap Index, Floating - 7 Day
4/06/17 USD 2,000,000 (3.884%) BMA Swap Index 4,745
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 12 Year
BMA Swap Index, Floating - 7 Day
4/20/17 USD 2,500,000 (3.714%) BMA Swap Index 45,202
- -----------------------------------------------------------------------------------------------------------------------------------
Total New York Fund $116,351
- -----------------------------------------------------------------------------------------------------------------------------------
North Carolina Fund Fixed - 3 Year
BMA Swap Index, Floating - 7 Day
12/01/07 USD 7,000,000 (2.795%) BMA Swap Index $52,408
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
6/27/15 USD 3,000,000 (3.809%) BMA Swap Index 11,801
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 11 Year
BMA Swap Index, Floating - 7 Day
7/12/16 USD 3,000,000 (3.777%) BMA Swap Index 35,811
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 12 Year
BMA Swap Index, Floating - 7 Day
4/06/17 USD 2,000,000 (3.884%) BMA Swap Index 4,745
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 30 Year
Floating - 7 Day BMA Swap Index,
9/06/35 USD 2,000,000 BMA Swap Index (4.254%) (14,884)
- -----------------------------------------------------------------------------------------------------------------------------------
Total North Carolina Fund $89,881
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Fund Fixed - 3 Year
BMA Swap Index, Floating - 7 Day
12/01/07 USD 2,000,000 (2.795%) BMA Swap Index $14,974
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
6/08/15 USD 2,000,000 (3.657%) BMA Swap Index 29,523
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
6/15/15 USD 2,000,000 (3.702%) BMA Swap Index 23,314
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
6/27/15 USD 2,000,000 (3.809%) BMA Swap Index 7,867
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
8/03/15 USD 3,000,000 (3.803%) BMA Swap Index 18,305
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
9/01/15 USD 3,000,000 (3.937%) BMA Swap Index (8,936)
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 11 Year
BMA Swap Index, Floating - 7 Day
7/12/16 USD 2,000,000 (3.777%) BMA Swap Index 23,874
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 12 Year
BMA Swap Index, Floating - 7 Day
4/06/17 USD 1,500,000 (3.884%) BMA Swap Index 3,559
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 12 Year
BMA Swap Index, Floating - 7 Day
4/20/17 USD 1,000,000 (3.714) BMA Swap Index 18,081
- -----------------------------------------------------------------------------------------------------------------------------------
Total Pennsylvania Fund $130,561
- -----------------------------------------------------------------------------------------------------------------------------------
South Carolina Fund Fixed - 3 Year
BMA Swap Index, Floating - 7 Day
12/01/07 USD 3,000,000 (2.795%) BMA Swap Index $22,460
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 30 Year
Floating - 7 Day BMA Swap Index,
5/10/35 USD 2,000,000 BMA Swap Index (4.374%) 31,750
- -----------------------------------------------------------------------------------------------------------------------------------
Total South Carolina Fund $54,210
- -----------------------------------------------------------------------------------------------------------------------------------
Tennessee Fund Fixed - 30 Year
Floating - 7 Day BMA Swap Index,
5/10/35 USD 1,500,000 BMA Swap Index (4.374%) $23,812
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 30 Year
Floating - 7 Day BMA Swap Index,
5/18/35 USD 2,000,000 BMA Swap Index (4.153%) (35,808)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Tennessee Fund $(11,996)
- -----------------------------------------------------------------------------------------------------------------------------------
Virginia Fund Fixed - 3 Year
BMA Swap Index, Floating - 7 Day
12/01/07 USD 6,000,000 (2.795%) BMA Swap Index $44,894
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 30 Year
Floating - 7 Day BMA Swap Index,
5/10/35 USD 3,500,000 BMA Swap Index (4.374%) 55,562
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 30 Year
Floating - 7 Day BMA Swap Index,
5/17/35 USD 4,000,000 BMA Swap Index (4.019%) (146,923)
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 30 Year
Floating - 7 Day BMA Swap Index,
5/18/35 USD 3,000,000 BMA Swap Index (4.153%) (53,713)
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 30 Year
Floating - 7 Day BMA Swap Index,
9/06/35 USD 2,000,000 BMA Swap Index (4.254%) (14,884)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Virginia Fund $(115,064)
- -----------------------------------------------------------------------------------------------------------------------------------
West Virginia Fund Fixed - 3 Year
BMA Swap Index, Floating - 7 Day
12/01/07 USD 3,000,000 (2.795%) BMA Swap Index $22,460
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
6/15/15 USD 3,000,000 (3.702%) BMA Swap Index 34,971
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
6/22/15 USD 2,000,000 (3.628%) BMA Swap Index 35,470
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 10 Year
BMA Swap Index, Floating - 7 Day
6/27/15 USD 3,000,000 (3.809%) BMA Swap Index 11,801
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed - 12 Year
BMA Swap Index, Floating - 7 Day
4/06/17 USD 1,500,000 (3.884) BMA Swap Index 3,559
- -----------------------------------------------------------------------------------------------------------------------------------
Total West Virginia Fund $108,261
- -----------------------------------------------------------------------------------------------------------------------------------
At March 31, 2005, the funds had sufficient cash and/or securities to cover any commitments under these contracts.
(8) RESTRICTED SECURITIES
At March 31, 2005, each fund owned the following restricted securities which
are subject to legal or contractual restrictions on resale, 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 a pricing
service, or if not available, in good faith at the direction of the Trustees.
DATE OF PAR
FUND DESCRIPTION ACQUISITION AMOUNT COST VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi Fund Commonwealth of Puerto Rico, ROLS, FGIC, 8.633%, 2016 8/05/02 $3,110,000 $4,023,905 $4,018,742
Guam Power Authority Rev., RITES, AMBAC, 7.577%, 2013 5/20/99 1,000,000 1,072,720 1,171,000
Puerto Rico Municipal Finance Agency, RITES, FSA,
8.129%, 2017 1/06/00 750,000 703,620 883,485
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2013 9/30/99 500,000 509,110 620,180
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$6,693,407
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New York Fund Commonwealth of Puerto Rico, ROLS, XLCA, 8.543%, 2017 10/22/01 $1,350,000 $1,634,526 $1,726,947
Guam Power Authority Rev., RITES, AMBAC, 7.577%, 2014 5/20/99 500,000 531,950 578,980
Niagra Falls, NY, Bridge Commission Toll Rev., RITES, FGIC,
7.566%, 2015 5/21/99 3,500,000 3,755,920 4,180,400
Triborough Bridge & Tunnel Authority Rev., NY, RITES, ETM,
8.054%, 2017 4/18/00 5,000,000 5,018,300 6,347,500
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$12,833,827
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North Carolina Fund Commonwealth of Puerto Rico, Highway & Transportation
Authority Rev., RITES, FSA, 9.089%, 2018 2/26/99 $5,425,000 $7,037,418 $7,512,974
North Carolina Eastern Municipal Power Agency, RITES, AMBAC,
9.066%, 2018 5/26/00 6,500,000 6,552,130 8,716,890
North Carolina Municipal Power Agency, ROLS, 8.096%, 2020 3/03/03 3,000,000 3,376,680 3,425,160
North Carolina Municipal Power Agency, ROLS, MBIA,
8.096%, 2019 3/03/03 5,000,000 5,726,600 5,688,100
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2012 9/30/99 1,500,000 1,471,890 1,902,000
- ------------------------------------------------------------------------------------------------------------------------------------
$27,245,124
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Pennsylvania Fund Commonwealth of Puerto Rico Highway & Transportation
Authority, ROLS, MBIA, 8.633%, 2020 4/25/03 $1,500,000 $1,969,560 $1,957,440
Commonwealth of Puerto Rico, ROLS, FGIC, 8.633%, 2015 8/05/02 1,000,000 1,292,920 1,278,080
Commonwealth of Puerto Rico, ROLS, XLCA, 8.543%, 2017 10/22/01 1,000,000 1,210,760 1,279,220
Guam Power Authority Rev., RITES, AMBAC, 7.577%, 2014 5/20/99 2,170,000 2,308,663 2,512,773
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2013 9/30/99 500,000 509,110 620,180
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$7,647,693
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South Carolina Fund Commonwealth of Puerto Rico, RITES, ETM, 8.112%, 2009 10/05/00 $2,000,000 $2,066,433 $2,401,240
Commonwealth of Puerto Rico, RITES, ETM, 8.112%, 2009 10/05/00 1,750,000 1,794,108 2,097,410
Commonwealth of Puerto Rico, RITES, MBIA, 8.612%, 2020 3/30/00 2,000,000 2,043,232 2,434,280
Commonwealth of Puerto Rico, RITES, FSA, 9.137%, 2016 1/06/00 850,000 882,124 1,043,834
Puerto Rico Electric Power Authority, RITES, FSA,
7.559%, 2015 9/30/99 1,000,000 976,500 1,121,750
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2013 9/30/99 1,375,000 1,398,793 1,705,495
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2019 3/31/99 1,300,000 1,470,326 1,655,966
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$12,459,975
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Virginia Fund Guam Power Authority Rev., RITES, AMBAC, 7.577%, 2015 5/20/99 $1,010,000 $1,058,642 $1,164,308
Puerto Rico Electric Power Authority Rev., RITES, FSA,
8.612%, 2017 8/28/00 2,500,000 2,770,600 3,123,100
Puerto Rico Electric Power Authority Rev., RITES, FSA,
8.362%, 2019 8/28/00 1,270,000 1,345,006 1,524,940
Puerto Rico Electric Power Authority Rev., RITES, FSA,
7.712%, 2020 8/28/00 1,250,000 1,240,075 1,475,000
Puerto Rico Municipal Finance Agency, RITES, FSA,
9.137%, 2016 1/06/00 1,105,000 1,148,670 1,356,984
Puerto Rico Municipal Finance Agency, RITES, FSA,
8.129%, 2017 1/06/00 615,000 576,968 724,458
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2013 9/30/99 2,000,000 2,036,440 2,480,720
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.839%, 2016 3/31/99 500,000 569,030 634,000
Virginia Resources Authority Rev., ROLS, 7.589%, 2021 12/01/03 1,390,000 1,508,372 1,534,921
Virginia Resources Authority Rev., ROLS, 7.589%, 2023 12/01/03 1,520,000 1,612,568 1,658,442
Virginia Resources Authority Rev., ROLS, 7.589%, 2033 12/01/03 2,510,000 2,586,957 2,673,250
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$18,350,123
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West Virginia Fund Commonwealth of Puerto Rico, Public Improvement, RITES, MBIA,
8.612%, 2019 3/30/00 $3,000,000 $3,090,720 $3,651,420
Puerto Rico, Municipal Finance Agency, RITES, FSA,
8.129%, 2017 1/06/00 900,000 844,344 1,060,182
West Virginia Building Commission, "A", RITES, AMBAC,
7.781%, 2018 5/05/99 $4,520,000 $4,888,561 $5,539,441
West Virginia Building Commission, "B", RITES, AMBAC,
7.781%, 2018 5/05/99 1,250,000 1,351,925 1,531,925
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$11,782,968
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At March 31, 2005, 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
- ------------------------------------------------------------------------------------------------------------------
7.35% 7.09% 7.72% 6.99% 7.72% 5.79% 7.92%
- ------------------------------------------------------------------------------------------------------------------
(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 March 31, 2005, 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
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83.07% 47.66% 47.43% 69.56% 63.33% 53.44% 34.98% 75.22%
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For each fund, the greatest exposure to any one institution or agency did not exceed the following percentages of total investments
as of March 31, 2005:
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
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20.73% 20.17% 15.53% 20.54% 18.08% 20.21% 14.32% 32.67%
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(10) LEGAL PROCEEDINGS
On March 31, 2004, MFS settled an administrative proceeding with the Securities
and Exchange Commission ("SEC") regarding disclosure of brokerage allocation
practices in connection with MFS fund sales (the term "MFS funds" means the
open-end registered management investment companies sponsored by MFS). 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 developed by an
independent distribution consultant. The brokerage allocation practices which
were the subject of this proceeding were discontinued by MFS in November 2003.
The agreement with the SEC is reflected in an order of the SEC. The SEC
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 SEC
settlement order states that MFS had in place policies designed to obtain best
execution of all MFS fund trades. As part of the settlement, MFS retained an
independent compliance consultant to review the completeness of its current
policies and practices regarding disclosure to MFS fund trustees and to MFS
fund shareholders of strategic alliances between MFS or its affiliates and
broker-dealers and other financial intermediaries who support the sale of MFS
fund shares. Pursuant to the SEC order, on July 28, 2004, MFS transferred these
settlement amounts to the SEC, and those MFS funds entitled to these settlement
amounts accrued an estimate of their pro rata portion of these amounts. The
final distribution plan was approved by the SEC on January 21, 2005, and the
affected MFS funds received the payment on February 16, 2005.
In addition, in February 2004, MFS reached agreement with the 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 open-end retail fund ("MFS retail funds")
prospectuses regarding market timing and related matters (the "February
Settlements"). These regulators alleged that prospectus language for certain
MFS retail funds was false and misleading because, although the prospectuses
for those funds in the regulators' view indicated that they prohibited market
timing, MFS did not limit trading activity in 11 domestic large cap stock, high
grade bond and money market retail funds. MFS' former Chief Executive Officer
and former President 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. These
individuals 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 MFS 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 Board of
Trustees of the MFS retail funds, and acceptable to the SEC. MFS has further
agreed with 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 retained $250,000 and $750,000 was 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, MFS Fund Distributors, Inc., MFS Service Center,
Inc., MFS Corporation Retirement Committee, Sun Life Financial Inc., various
MFS funds, certain current and/or former 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 MFS funds during specified periods, as ERISA
actions by participants in certain retirement plan accounts on behalf of those
accounts, or as derivative actions on behalf of the MFS funds. The lawsuits
relating to market timing and related matters have been transferred to, and
consolidated before, the United States District Court for the District of
Maryland, as part of a multi-district litigation of market timing and related
claims involving several other fund complexes (In re Mutual Funds Investment
Litigation (Alger, Columbia, Janus, MFS, One Group, Putnam, Allianz Dresdner),
No. 1:04-md-15863 (transfer began March 19, 2004)). The market timing cases
related to the MFS complex are Riggs v. MFS et al., Case No. 04-cv-01162-JFM
(direct), Hammerslough v. MFS et al., Case No. 04-md-01620 (derivative) and
Anita Walker v. MFS et al., Case No. 1:04-CV-01758 (ERISA). The plaintiffs in
these consolidated lawsuits generally seek injunctive relief including removal
of the named Trustees, adviser and distributor, rescission of contracts and
12b-1 Plans, disgorgement of fees and profits, monetary damages, punitive
damages, attorney's fees and costs and other equitable and declaratory relief.
Two lawsuits alleging improper brokerage allocation practices and excessive
compensation are pending in the United States District Court for the District
of Massachusetts (Forsythe v. Sun Life Financial Inc., et al., No. 04cv10584
(GAO) (a consolidated action) and Marcus Dumond, et al. v. Massachusetts
Financial Servs. Co., et al., No. 04cv11458 (GAO)). The plaintiffs in these
lawsuits generally seek compensatory damages, punitive damages, recovery of
fees, rescission of contracts, an accounting, restitution, declaratory relief,
equitable and/or injunctive relief and attorney's fees and costs. The various
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 (ii) received excessive compensation as fiduciaries to the MFS funds,
or (iii) permitted or acquiesced in the improper use of fund assets by MFS to
support the distribution of MFS 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. 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 MFS 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 certain MFS retail funds for damages that they
allegedly sustained as a result of market timing or late trading in certain of
the MFS retail funds, and distributed $50 million to affected MFS funds to
compensate those funds based upon the amount of brokerage commissions allocated
in recognition of MFS 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 MFS 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 MFS funds.
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTING FIRM
- -------------------------------------------------------------------------------
To the Trustees and Shareholders of MFS Municipal Series Trust:
We have audited the accompanying statement of assets and liabilities 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, certain of the
portfolios of MFS Municipal Series Trust (the "Trust"), including the portfolio
of investments, as of March 31, 2005, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of
the five years in the 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. The Trust is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Trust's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. Our procedures
included confirmation of securities owned as of March 31, 2005, by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
aforementioned portfolios of MFS Municipal Series Trust as of March 31, 2005,
the results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States
of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 24, 2005
- -------------------------------------------------------------------------------
RESULTS OF SHAREHOLDER MEETING (unaudited) - 3/31/05
- -------------------------------------------------------------------------------
At a special meeting of shareholders of MFS Mississippi Municipal Bond Fund,
MFS New York Municipal Bond Fund, MFS North Carolina Municipal Bond Fund, MFS
Pennsylvannia 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, which was held on March 23, 2005, the following
actions were taken:
ITEM 1. To elect a Board of Trustees:
NUMBER OF DOLLARS
---------------------------------------
NOMINEE AFFIRMATIVE WITHHOLD AUTHORITY
Lawrence H. Cohn 2,338,745,402.20 23,104,899.71
- --------------------------------------------------------------------------------
David H. Gunning 2,340,048,506.07 21,801,795.84
- --------------------------------------------------------------------------------
William R. Gutow 2,339,850,605.62 21,999,696.29
- --------------------------------------------------------------------------------
Michael Hegarty 2,340,213,807.46 21,636,494.45
- --------------------------------------------------------------------------------
J. Atwood Ives 2,338,786,653.70 23,063,648.21
- --------------------------------------------------------------------------------
Amy B. Lane 2,339,960,815.68 21,889,486.23
- --------------------------------------------------------------------------------
Robert J. Manning 2,340,560,593.28 21,289,708.63
- --------------------------------------------------------------------------------
Lawrence T. Perera 2,338,677,013.42 23,173,288.49
- --------------------------------------------------------------------------------
Robert C. Pozen 2,340,797,047.27 21,053,254.64
- --------------------------------------------------------------------------------
J. Dale Sherratt 2,338,746,772.55 23,103,529.36
- --------------------------------------------------------------------------------
Laurie J. Thomsen 2,339,932,511.83 21,917,790.08
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
TRUSTEES AND OFFICERS -- IDENTIFICATION AND BACKGROUND,
- ----------------------------------------------------------------------------------------------------------------------------------
The Trustees and officers of the Trust, as of May 1, 2005, are listed below, together with their principal occupations during the
past five years. (Their titles may have varied during that period.) The address of each Trustee and officer is 500 Boylston
Street, Boston, Massachusetts 02116.
POSITION(s) HELD TRUSTEE/OFFICER PRINCIPAL OCCUPATIONS DURING THE PAST FIVE
NAME, DATE OF BIRTH WITH FUND SINCE(1) YEARS & OTHER DIRECTORSHIPS(2)
- ------------------- ---------------- --------------- ------------------------------------------
INTERESTED TRUSTEES
Robert J. Manning(3) Trustee and President February 2004 Massachusetts Financial Services Company, Chief
(born 10/20/63) Executive Officer, President, Chief Investment
Officer and Director
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); Bell Canada Enterprises
(telecommunication s), Director; Medtronic, Inc.
(medical technology), Director; Telesat
(satellite communications), Director
INDEPENDENT TRUSTEES
J. Atwood Ives Trustee and Chair of February 1992 Private investor; Eastern Enterprises (diversified
(born 05/01/36) Trustees 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 Cardiac
(born 03/11/37) Surgery; Harvard Medical School, Professor of
Surgery
David H. Gunning Trustee January 2004 Cleveland-Cliffs Inc. (mining products and service
(born 05/30/42) 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
Michael Hegarty Trustee December 2004 Retired; AXA Financial (financial services and
(born 12/21/44) insurance), Vice Chairman and Chief Operating
Officer (until May 2001); The Equitable Life
Assurance Society (insurance), President and
Chief Operating Officer (until May 2001)
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)
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)
Laurie J. Thomsen Trustee March 2005 Private investor; Prism Venture Partners (venture
(born 08/05/57) capital), Co- founder and General Partner (until
June 2004); St. Paul Travelers Companies
(commercial property liability insurance),
Director
OFFICERS
Robert J. Manning(3) President and Trustee February 2004 Massachusetts Financial Services Company, Chief
(born 10/20/63) Executive Officer, President, Chief Investment
Officer and Director
Jeffrey N. Carp(3) Secretary and Clerk September 2004 Massachusetts Financial Services Company, Executive
(born 12/1/56) Vice President, General Counsel and Secretary
(since April 2004); Hale and Dorr LLP (law
firm), Partner (prior to April 2004)
Stephanie A. DeSisto(3) Assistant Treasurer May 2003 Massachusetts Financial Services Company, Vice
(born 10/01/53) 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)
James F. DesMarais(3) Assistant Secretary and September 2004 Massachusetts Financial Services Company, Assistant
(born 03/09/61) Assistant Clerk General Counsel
Richard M. Hisey(3) Treasurer August 2002 Massachusetts Financial Services Company, Senior
(born 08/29/58) 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)
Brian T. Hourihan(3) Assistant Secretary and September 2004 Massachusetts Financial Services Company, Vice
(born 11/11/64) Assistant Clerk President, Senior Counsel and Assistant
Secretary (since June 2004); Affiliated Managers
Group, Inc., Chief Legal Officer/ Centralized
Compliance Program (January to April 2004);
Fidelity Research & Management Company,
Assistant General Counsel (prior to January
2004)
Ellen Moynihan(3) Assistant Treasurer April 1997 Massachusetts Financial Services Company, Vice
(born 11/13/57) President
Frank L. Tarantino Independent Chief June 2004 Tarantino LLC (provider of compliance services),
(born 03/07/44) Compliance Officer Principal (since June 2004); CRA Business
Strategies Group (consulting services),
Executive Vice President (April 2003 to June
2004); David L. Babson & Co. (investment
adviser), Managing Director, Chief
Administrative Officer and Director (February
1997 to March 2003)
James O. Yost(3) Assistant Treasurer September 1990 Massachusetts Financial Services Company, Senior
(born 06/12/60) 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 the Trust 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 fund, as a result of position with MFS. The
address of MFS is 500 Boylston Street, Boston, Massachusetts 02116.
Each Trustee has been elected by shareholders and 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. Messrs. Ives and Sherratt and Mses. Lane and
Thomsen are members of the Trust's Audit Committee.
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. As of December 31, 2004,
each Trustee served as a board member of 99 funds within the MFS Family of Funds.
The Trust held a shareholders" meeting in 2005, and will hold a shareholder's meeting at least once every five years thereafter,
to elect Trustees.
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 CUSTODIAN
Massachusetts Financial Services Company State Street Bank and Trust Company
500 Boylston Street, 225 Franklin Street, Boston, MA 02110
Boston, MA 02116-3741
INDEPENDENT REGISTERED PUBLIC
DISTRIBUTOR ACCOUNTING FIRM
MFS Fund Distributors, Inc. Deloitte & Touche LLP
500 Boylston Street, 200 Berkeley Street, Boston, MA 02116
Boston, MA 02116-3741
PORTFOLIO MANAGERS
Michael L. Dawson
Geoffrey L. Schechter
- -------------------------------------------------------------------------------
PROXY VOTING POLICIES AND INFORMATION
- -------------------------------------------------------------------------------
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 Web site at
http://www.sec. gov.
Information regarding how the fund voted proxies relating to portfolio
securities during the most recent twelve-month period ended June 30 is
available without charge by visiting the Proxy Voting section of mfs.com or by
visiting the SEC's Web site at http://www.sec.gov.
- -------------------------------------------------------------------------------
QUARTERLY PORTFOLIO DISCLOSURE
- -------------------------------------------------------------------------------
The fund will file a complete schedule of portfolio holdings with the
Securities and Exchange Commission (the Commission) for the first and third
quarters of each fiscal year on Form N-Q. The fund's Form N-Q may be reviewed
and copied at the:
Public Reference Room
Securities and Exchange Commission
Washington, D.C. 20549-0102
Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-800-SEC-0330. The fund's Form N-Q is available on
the EDGAR database on the Commission's Internet website at http://www.sec.gov,
and copies of this information may be obtained, upon payment of a duplicating
fee, by electronic request at the following e-mail address: publicinfo@sec.gov
or by writing the Public Reference Section at the above address.
A shareholder can also obtain the quarterly portfolio holdings report at
mfs.com.
- -------------------------------------------------------------------------------
FEDERAL TAX INFORMATION (UNAUDITED)
In January 2006, 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 2005.
The following funds have designated capital gain dividends for the year ended
March 31, 2005:
CAPITAL GAIN
DIVIDENDS
----------------------------------------------------------------
North Carolina Fund $1,238,232
Tennessee Fund 713,987
New York Fund 130,202
For the year ended March 31, 2005, the amount of distributions from income
designated as exempt-interest dividends was as follows:
EXEMPT-INTEREST
DIVIDENDS
----------------------------------------------------------------
Mississippi Fund 100.00%
New York Fund 100.00%
North Carolina Fund 97.81%
Pennsylvania Fund 100.00%
South Carolina Fund 99.50%
Tennessee Fund 96.44%
Virginia Fund 100.00%
West Virginia Fund 99.45%
----------------------------------------------------------------
CONTACT INFORMATION
INVESTOR SERVICE
Write to us at: MFS Service Center, Inc.
P.O. Box 55824
Boston, MA 02205-5824
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
- -------------------------------------------------------------------------------
M F S(SM)
INVESTMENT MANAGEMENT(R)
(C) 2005 MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
MST-B-ANN-05/05 40M
MFS(R) MUNICIPAL INCOME FUND 3/31/05
ANNUAL REPORT
- -------------------------------------------------------------------------------
[GRAPHIC OMITTED]
M F S(SM)
INVESTMENT MANAGEMENT(R)
THIS REPORT HAS BEEN PREPARED FOR THE GENERAL INFORMATION TO SHAREHOLDERS. IT
IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY WHEN PRECEDED OR
ACCOMPANIED BY A CURRENT PROSPECTUS.
ANNUAL REPORT
LETTER FROM THE CEO 1
------------------------------------------------------
PORTFOLIO COMPOSITION 4
------------------------------------------------------
MANAGEMENT REVIEW 5
------------------------------------------------------
PERFORMANCE SUMMARY 8
------------------------------------------------------
EXPENSE TABLE 13
------------------------------------------------------
PORTFOLIO OF INVESTMENTS 15
------------------------------------------------------
FINANCIAL STATEMENTS 35
------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 45
------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 58
------------------------------------------------------
RESULTS OF SHAREHOLDER MEETING 59
------------------------------------------------------
TRUSTEES AND OFFICERS 60
------------------------------------------------------
PROXY VOTING POLICIES AND INFORMATION 64
------------------------------------------------------
QUARTERLY PORTFOLIO DISCLOSURE 64
------------------------------------------------------
FEDERAL TAX INFORMATION 64
------------------------------------------------------
CONTACT INFORMATION BACK COVER
------------------------------------------------------
- -------------------------------------------------------------------------------
LETTER FROM THE CEO
- -------------------------------------------------------------------------------
Dear Shareholders,
[Photo of Robert J. Manning]
Last summer and fall, I wrote to you about enhancements that MFS(R) was making
to its investment process. Our goal, as always, was to deliver strong
performance across all asset classes. I am now happy to report to you that 2004
was a very successful year for MFS, relative to our peers in the mutual fund
industry. While there will always be room for improvement, we believe the
enhancements we have made to our investment process resulted in significantly
improved performance across the MFS Family of Funds(R).
You may remember some of the enhancements I outlined last year.
They included
o increasing collaboration and information sharing among our investment
personnel across asset classes, through an Investment Management Committee
with members from our Domestic Equity, International Equity, Fixed Income,
and Quantitative Research teams
o increasing the number of analysts supporting our portfolio managers and
doubling the average investment experience of our domestic equity analyst
staff
o making additional use of our most-seasoned portfolio managers to mentor
research analysts
o combining more quantitative, top-down risk control and security analysis
with our traditional bottom-up research process
o opening a research office in Mexico City to complement our existing staff
in Boston, London, Singapore, and Tokyo
The effect of these enhancements, I believe, is evident in the recent
performance of our funds. For the 12 months ended March 31, 2005, 68% of MFS
domestic equity funds, 88% of MFS international equity funds, and 90% of MFS
fixed-income funds delivered results in the top half of their Lipper peer
groups.
Our longer-term performance also benefited from our ongoing commitment to the
MFS Original Research(R) process: 69% of MFS funds were in the top half of
their respective Lipper categories over the 3-, 5-, and 10-year periods ended
March 31, 2005.
Of course, I cannot offer any guarantees that our performance will repeat
itself. Still, I am confident that the recent enhancements to our investment
process will continue to benefit shareholders in 2005 and beyond.
What I can tell you with certainty is that the way you manage your investments
will determine how well you take advantage of the performance that financial
markets deliver. Historically, individual investors have tended to underperform
the markets. For example, a 2003 study by DALBAR, Inc. showed that over the
nearly two decades from 1984 through 2002, the average U.S. stock investor
earned a 2.6% average annual return at a time when U.S. stocks, as measured by
the Standard & Poor's 500 Stock Index, delivered a 12.2% average annual
return.(1)
This huge discrepancy, in our view, occurred because nonprofessional investors
generally did not adhere to the basic principles followed by most professional
investors: allocate among asset classes, diversify within each asset class, and
rebalance one's portfolio on a routine schedule. I elaborated on this "ADR"
theme in fund reports over the last few months of 2004. For more information on
how to apply a Disciplined Diversification(SM) strategy to your portfolio using
the principles of ADR, I would urge you to contact your own investment
professional. You may also want to refer to information on the subject on our
Web site, MFS.COM.
As always, we appreciate your confidence in MFS, and you can be sure of our
continued commitment to do the best we can to help you pursue your long-term
financial goals.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management(R)
May 16, 2005
It is not possible to invest directly in an index.
Lipper rankings and performance are based on historical average annual returns
of Class A shares, and do not include any sales charges. Past performance is
no guarantee of future results.
Asset allocation and diversification cannot guarantee a profit or protect
against a loss.
The opinions expressed in this letter are those of MFS, and no forecasts can
be guaranteed.
(1) Source: DALBAR July 2003 update to its Quantitative Analysis of Investment
Behavior; DALBAR, Inc., is a financial-services market research firm
headquartered in Boston, MA.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
PORTFOLIO STRUCTURE*
Bonds 99.0%
Cash & Other Net Assets 1.0%
TOP 5 BOND INDUSTRIES*
Health/Hospitals 20.1%
------------------------------------------------
General Obligations/Schools 8.5%
------------------------------------------------
General Obligations/GP 6.7%
------------------------------------------------
Municipal Owned Utilities 6.4%
------------------------------------------------
State and Local Approp. 6.1%
------------------------------------------------
CREDIT QUALITY OF BONDS**
AAA 32.3%
------------------------------------------------
AA 11.6%
------------------------------------------------
A 15.7%
------------------------------------------------
BBB 22.5%
------------------------------------------------
BB 4.6%
------------------------------------------------
B 1.5%
------------------------------------------------
CCC 1.0%
------------------------------------------------
Not Rated 10.8%
------------------------------------------------
PORTFOLIO FACTS
Average Duration 6.3
------------------------------------------------
Average Life 15.3 yrs.
------------------------------------------------
Average Maturity*** 16.9 yrs.
------------------------------------------------
Average Credit Quality**** A+
------------------------------------------------
Average Credit Quality
Short Term Bonds A-1
------------------------------------------------
* For purposes of this graphical presentation, the bond component includes
both accrued interest amounts and the equivalent exposure from any
derivative holdings, if applicable.
** Each security is assigned a rating from Moody's Investors Service. If not
rated by Moody's, the rating will be that assigned by Standard & Poor's.
Likewise, if not assigned a rating by Standard & Poor's, it will be based
on the rating assigned by Fitch, Inc. If not rated by any of the three
agencies, the security is considered Not Rated. Percentages are based on
the total market value of investments as of 3/31/05.
*** The average maturity shown is calculated using the final stated maturity
on the portfolio's holdings without taking into account any holdings which
have been pre-refunded to an earlier date or which have a mandatory put
date prior to the stated maturity. The average life shown takes into
account these earlier dates.
**** The Portfolio Average Credit Quality rating is based upon a market
weighted average of portfolio holdings.
Percentages are based on net assets as of 3/31/05, unless otherwise noted.
The portfolio is actively managed, and current holdings may be different.
- -------------------------------------------------------------------------------
MANAGEMENT REVIEW
- -------------------------------------------------------------------------------
SUMMARY OF RESULTS
For the twelve months ended March 31, 2005, Class A shares of the MFS Municipal
Income Fund provided a total return of 3.49%, at net asset value. In
comparison, the fund's benchmark, the Lehman Brothers Municipal Bond Index (the
Lehman Index), returned 2.67%. The fund's investment objective is to provide as
high a level of current income exempt from federal income tax as is considered
consistent with prudent investing while seeking protection of shareholders"
capital. The fund invests, under normal market conditions, at least 80% of its
net assets in securities and other investments, the interest on which is exempt
from federal income tax. The fund may invest in municipal securities, which are
bonds or other debt obligations of a U.S. state or political subdivision, such
as a county, city, town, village or authority.
MARKET ENVIRONMENT
The U.S. fixed-income market experienced a dramatic flattening of the yield
curve during the 12-month period. (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.) On June 30, 2004, the
U.S. Federal Reserve Board (the Fed) raised its target federal funds rate for
the first time in four years. For the remainder of the period, the Fed
continued a steady drumbeat of quarter-point rate hikes. But while the Fed
seemed committed to a course of gradually raising short-term rates, we believe
several factors caused long-term rates to stagnate or retreat over the period.
Job growth, which had shot up in the spring of 2004, faltered; this helped, in
our opinion, to push down yields on longer-dated bonds. Another factor that we
believe held long-term rates down was overseas demand for U.S. Treasuries,
especially from foreign central banks. However, we feel that moderate GDP
growth and inflation concerns kept shorter-term interest rates moving up. For
the period as a whole, the net effect was a substantial flattening of the yield
curve as short-term rates rose significantly while long-term rates were
generally flat to down.
CONTRIBUTORS TO PERFORMANCE
Yield curve positioning was a strong contributor to the fund's relative
performance. (A yield curve graphically depicts the yields of different
maturity bonds of the same credit quality and type. A normal yield curve is
upward sloping, with short-term rates lower than long-term rates.) Compared
with our benchmark, the Lehman Brothers Municipal Bond Index (the Lehman
Index), the fund was more heavily weighted in bonds on the long end of the
curve (represented by bonds with durations of 14-to-25+ years) and
underweighted in bonds on the short end of the curve (represented by bonds with
durations of 0-to-4 years). (Duration is a measure of a fund's sensitivity to
changes in interest rates.)
On a relative basis, our overweighting in longer-maturity bonds helped during
the period because long-term municipal rates were relatively unchanged.
Conversely, our underweighting in bonds on the short end of the curve, which
suffered price declines as their yields increased, enhanced relative results.
In the area of credit quality, relative performance benefited from the fund's
exposure to high yield debt, as the sector outperformed the benchmark, the
Lehman Index. While the fund had some holdings in below-investment-grade debt
(bonds rated lower than "BBB" or unrated), the index does not contain bonds
rated below "BBB".
An overweighting in bonds within the strong-performing health care sector also
helped relative results during the period. Our selection of individual bonds
within the sector also boosted relative returns.
Security selection in the utilities sector aided relative performance during the
period. In addition, our underweighted position in credit-enhanced bonds also
helped results as these high-quality bonds underperformed the overall benchmark.
DETRACTORS FROM PERFORMANCE
During the period, our duration stance detracted from relative performance. In
a period when rates rose and bond prices retreated, our slightly longer
duration stance modestly hurt performance. Most of that negative effect on
results occurred in the first half of the period, as we later shortened
duration and actually ended the period with a lower duration than our
benchmark.
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.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY THROUGH 3/31/05
- -------------------------------------------------------------------------------
The following chart illustrates the historical performance of the fund's
original share class in comparison to its benchmark. 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. 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. HIGH
SHORT-TERM RETURNS FOR ANY PERIOD MAY BE AND LIKELY WERE ATTRIBUTABLE TO
FAVORABLE MARKET CONDITIONS DURING THAT PERIOD, WHICH MAY NOT BE REPEATABLE. 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
MFS Lehman
Municipal Brothers
Income Fund Municipal
- Class B Bond Index
3/95 $10,000 $10,000
3/96 10,587 10,838
3/97 10,952 11,429
3/98 12,131 12,653
3/99 12,662 13,438
3/00 12,423 13,427
3/01 13,447 14,893
3/02 13,716 15,461
3/03 14,702 16,990
3/04 15,623 17,986
3/05 16,030 18,465
TOTAL RETURNS
- --------------------
Average annual
without sales charge
- --------------------
Class
Share class inception date 1-yr 3-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 9/07/93 3.49% 6.13% 6.02% 5.64%
- ------------------------------------------------------------------------------
B 12/29/86 2.60% 5.33% 5.23% 4.83%
- ------------------------------------------------------------------------------
C 1/03/94 2.72% 5.37% 5.25% 4.86%
- ------------------------------------------------------------------------------
- --------------------
Average annual
- --------------------
Comparative benchmarks
- ------------------------------------------------------------------------------
Average general municipal debt fund+ 2.05% 5.27% 5.67% 5.34%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index# 2.67% 6.10% 6.58% 6.33%
- ------------------------------------------------------------------------------
- --------------------
Average annual
with sales charge
- --------------------
Share class
- ------------------------------------------------------------------------------
A -1.43% 4.42% 5.00% 5.13%
- ------------------------------------------------------------------------------
B -1.34% 4.42% 4.90% 4.83%
- ------------------------------------------------------------------------------
C 1.73% 5.37% 5.25% 4.86%
- ------------------------------------------------------------------------------
- --------------------
Cumulative
without sales charge
- --------------------
- ------------------------------------------------------------------------------
A 3.49% 19.53% 33.98% 73.12%
- ------------------------------------------------------------------------------
B 2.60% 16.87% 29.03% 60.30%
- ------------------------------------------------------------------------------
C 2.72% 16.99% 29.15% 60.79%
- ------------------------------------------------------------------------------
+ Source: Lipper Inc., an independent firm that reports mutual fund performance.
# Source: Standard & Poor's Micropal, Inc.
INDEX DEFINITION
Lehman Brothers Municipal Bond Index - a market-value-weighted index
representative of the tax-exempt 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
(assuming redemption within one year from the end of the prior 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
When interest rates rise, the prices of municipal securities in the portfolio
will generally fall. Conversely, when interest rates fall, the prices of
municipal securities in the portfolio will generally rise.
Interest rate risk will generally affect the price of a municipal security more
if the security has a longer maturity. Municipal securities with longer
maturities will therefore be more volatile than other fixed income securities
with shorter maturities. Conversely, municipal securities with shorter
maturities will be less volatile but generally provide lower returns than
municipal securities with longer maturities. The average maturity of the fund's
municipal security investments will affect the volatility of the fund's share
price.
Credit risk is the risk that the issuer of a municipal security will not be
able to pay principal and interest when due. Rating agencies assign credit
ratings to certain municipal securities to indicate their credit risk. The
price of a municipal security will generally fall if the issuer defaults on its
obligation to pay principal or interest, the rating agencies downgrade the
issuer's credit rating or other news affects the market's perception of the
issuer's credit risk. A participation interest is also subject to the risk of
default by the issuing bank.
The portfolio may invest in municipal bonds that are general obligations backed
by the full faith and credit of the municipal issuer. The portfolio may also
invest in municipal bonds called revenue obligations which are subject to a
higher degree of credit risk than general obligations. Revenue obligations
finance specific projects (such as building a hospital or toll roads, water and
sewer projects, etc.), and are not backed by the full faith and credit of the
municipal issuer. The portfolio may invest in excess of 25% of its assets in
revenue bonds relating to any one specific industry (e.g., housing, healthcare,
water and sewer, etc.). Because revenue obligations are repaid from the
revenues from a facility, they are subject to a risk of default in payments of
principal and interest if the facility does not generate enough income.
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 project or assets or the inability to collect
revenues from 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 significantly in value.
The portfolio's investments in municipal securities may include municipal lease
obligations. Municipal lease obligations are undivided interests issued by a
state or municipality in a lease or installment purchase which generally
relates to equipment or facilities. When the portfolio invests in municipal
lease obligations, it may have limited recourse in the event of default or
termination. In some cases, payments under municipal leases do not have to be
made unless the appropriate legislative body specifically approves money for
that purpose.
Speculative bonds are subject to a higher risk that the issuer will default on
payments of principal and interest than higher rated investment grade bonds.
Although the issuer's ability to make interest and principal payments appears
adequate, an adverse change in economic conditions or other circumstances is
more likely to cause a default by the issuer of a speculative bond than the
issuer of a higher rated investment grade bond.
The fixed income securities purchased by the portfolio may be traded in the
over-the-counter market rather than on an organized exchange and are subject to
liquidity risk. This means that they may be harder to purchase or sell at a
fair price. The inability to purchase or sell these fixed income securities at
a fair price could have a negative impact on the portfolio's performance.
The portfolio may invest in high yield or lower-rated securities (non-rated,
below "BBB"), which may provide greater returns but are subject to greater than
average risk.
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.
Please see the prospectus for further information regarding these and other
risk considerations.
- -------------------------------------------------------------------------------
EXPENSE TABLE
- -------------------------------------------------------------------------------
FUND EXPENSES BORNE BY SHAREHOLDERS DURING THE PERIOD FROM OCTOBER 1, 2004,
THROUGH MARCH 31, 2005.
As a shareholder of the fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on certain purchase or redemption
payments and redemption fees on certain exchanges and redemptions, and (2)
ongoing costs, including management fees; distribution and service (12b-1)
fees; and other fund expenses. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the fund and to compare these
costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period October 1, 2004 through March 31,
2005.
ACTUAL EXPENSES
The first line for each share class in the table on the following page provides
information about actual account values and actual expenses. You may use the
information in this line, together with the amount you invested, to estimate
the expenses that you paid over the period. Simply divide your account value by
$1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then
multiply the result by the number in the first line under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line for each share class in the table on the following page
provides information about hypothetical account values and hypothetical
expenses based on the fund's actual expense ratio and an assumed rate of return
of 5% per year before expenses, which is not the fund's actual return. The
hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption fees. Therefore, the second line for each share
class in the table is useful in comparing ongoing costs only, and will not help
you determine the relative total costs of owning different funds. In addition,
if these transactional costs were included, your costs would have been higher.
- -----------------
Share Class
- -----------------
- --------------------------------------------------------------------------------
Beginning Ending Expenses
Annualized Account Account Paid During
Expense Value Value Period**
Ratio 10/01/04 3/31/05 10/01/04-3/31/05
- --------------------------------------------------------------------------------
Actual 0.80% $1,000 $1,018 $4.02
A -------------------------------------------------------------------------
Hypothetical* 0.80% $1,000 $1,021 $4.03
- --------------------------------------------------------------------------------
Actual 1.55% $1,000 $1,015 $7.79
B -------------------------------------------------------------------------
Hypothetical* 1.55% $1,000 $1,017 $7.79
- --------------------------------------------------------------------------------
Actual 1.55% $1,000 $1,016 $7.79
C -------------------------------------------------------------------------
Hypothetical* 1.55% $1,000 $1,017 $7.79
- --------------------------------------------------------------------------------
* 5% class return per year before expenses.
** Expenses paid is equal to each class" annualized expense ratio for the
most recent six month period, as shown above, multiplied by the average
account value over the period, multiplied by the number of days in the
period, divided by the number of days in the year. Expenses paid do not
include any applicable sales charges (loads) or redemption fees. If these
transaction costs had been included, your costs would have been higher.
- ----------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - 3/31/05
- ----------------------------------------------------------------------------------------------
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 - 97.4%
- ----------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- ----------------------------------------------------------------------------------------------
Airport & Port Revenue - 2.1%
- ----------------------------------------------------------------------------------------------
Chicago, IL (O'Hare International Airport), RITES, FSA,
8.474%, 2022+(+) $1,500,000 $1,796,365
- ----------------------------------------------------------------------------------------------
Chicago, IL, O'Hare International Airport Rev. (2nd Lien
Passenger Facility D), AMBAC, 5.5%, 2019 350,000 376,644
- ----------------------------------------------------------------------------------------------
Louisville & Jefferson County, KY, Regional Airport
Authority, "A", MBIA, 6.5%, 2017 3,000,000 3,263,155
- ----------------------------------------------------------------------------------------------
Oklahoma City, OK, Airport Trust, "B", FSA, 5.75%, 2017 1,080,000 1,158,954
- ----------------------------------------------------------------------------------------------
$6,595,118
- ----------------------------------------------------------------------------------------------
Chemicals - 0.3%
- ----------------------------------------------------------------------------------------------
Red River Authority, TX, Pollution Control Rev. (Celanese
Project), 6.7%, 2030 $1,000,000 $1,037,175
- ----------------------------------------------------------------------------------------------
General Obligations - General Purpose - 6.6%
- ----------------------------------------------------------------------------------------------
Chicago IL, (Lakefront Millenium Parking Facilities), MBIA,
5.7%, 2025 $645,000 $662,022
- ----------------------------------------------------------------------------------------------
Chicago, IL (Lakefront Millennium Package Facilities),
MBIA, 5%, 2018 4,000,000 4,159,400
- ----------------------------------------------------------------------------------------------
Commonwealth of Massachusetts, 5.875%, 2009(++) 3,205,000 3,562,870
- ----------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico, ROLs, FGIC, 8.633%, 2015+(+) 3,000,000 3,834,240
- ----------------------------------------------------------------------------------------------
Cranston, RI, FGIC, 6.375%, 2014 200,000 227,818
- ----------------------------------------------------------------------------------------------
Houston County, AL, AMBAC, 6.25%, 2009(++) 850,000 971,244
- ----------------------------------------------------------------------------------------------
Interlocken Metropolitan District, CO, Improvement, "C",
XLCA, 0%, 2027 510,000 139,633
- ----------------------------------------------------------------------------------------------
Mobile County, AL, 6%, 2009(++) 800,000 888,344
- ----------------------------------------------------------------------------------------------
New York, NY, "J", 5%, 2030 320,000 327,264
- ----------------------------------------------------------------------------------------------
New York, NY, "J", MBIA, 5%, 2017 2,000,000 2,095,140
- ----------------------------------------------------------------------------------------------
San Antonio, TX, 5%, 2020 700,000 723,247
- ----------------------------------------------------------------------------------------------
Southlake, TX, AMBAC, 0%, 2009(++) 3,185,000 1,195,394
- ----------------------------------------------------------------------------------------------
Southlake, TX, AMBAC, 0%, 2009(++) 3,150,000 1,105,776
- ----------------------------------------------------------------------------------------------
State of Wisconsin, "C", 6%, 2010(++) 1,200,000 1,351,344
- ----------------------------------------------------------------------------------------------
$21,243,736
- ----------------------------------------------------------------------------------------------
General Obligations - Improvement - 1.6%
- ----------------------------------------------------------------------------------------------
Birmingham, AL, "A", 5.75%, 2017 $1,000,000 $1,105,870
- ----------------------------------------------------------------------------------------------
Worcester, MA, FSA, 6%, 2017 3,475,000 3,895,336
- ----------------------------------------------------------------------------------------------
$5,001,206
- ----------------------------------------------------------------------------------------------
General Obligations - Schools - 8.4%
- ----------------------------------------------------------------------------------------------
Detroit, MI, City School District, "B", FGIC, 5%, 2021 $2,000,000 $2,080,680
- ----------------------------------------------------------------------------------------------
Dudley-Charlton, MA, Regional School District, RITES, FGIC,
7.566%, 2017+(+) 1,495,000 1,833,677
- ----------------------------------------------------------------------------------------------
Ferris, TX, Independent School District, PSF, 5.5%, 2034 640,000 683,405
- ----------------------------------------------------------------------------------------------
Florida State Board of Education Capital Outlay, Public
Education, "A", 5%, 2019 1,000,000 1,043,340
- ----------------------------------------------------------------------------------------------
Forsyth County, GA, School District, 6%, 2010(++) 400,000 454,016
- ----------------------------------------------------------------------------------------------
Fresno, CA, Unified School District, MBIA, 6.55%, 2020 1,225,000 1,444,422
- ----------------------------------------------------------------------------------------------
Goose Creek, TX, Consolidated School District, PSF, 5%, 2020 2,500,000 2,586,875
- ----------------------------------------------------------------------------------------------
Houston, TX, Independent School District, RITES, PSF,
7.543%, 2017+(+) 2,325,000 2,618,694
- ----------------------------------------------------------------------------------------------
Keller, TX, Independent School District, PSF,
6%, 2017 225,000 251,219
- ----------------------------------------------------------------------------------------------
Knox County, KY, Independent School District, XLCA,
5.5%, 2029 640,000 695,379
- ----------------------------------------------------------------------------------------------
Lancaster, TX, Independent School District, Capital
Appreciation, FSA, 0%, 2026 485,000 146,354
- ----------------------------------------------------------------------------------------------
Lancaster, TX, Independent School District, Capital
Appreciation, FSA, 0%, 2027 430,000 121,694
- ----------------------------------------------------------------------------------------------
Leander, TX, Independent School District, PSF, 0%, 2018 2,500,000 1,201,450
- ----------------------------------------------------------------------------------------------
Manchester, NH, School Facilities Rev., MBIA, 5.5%, 2027 215,000 245,595
- ----------------------------------------------------------------------------------------------
Manchester, NH, School Facilities Rev., MBIA, 5.5%, 2028 215,000 245,377
- ----------------------------------------------------------------------------------------------
Manistee, MI, Area Public Schools, FGIC, 5.75%, 2009(++) 700,000 767,347
- ----------------------------------------------------------------------------------------------
Marshall, MI, Public School District, 5.5%, 2018 500,000 540,625
- ----------------------------------------------------------------------------------------------
Phenix City, AL, AMBAC, 5.65%, 2021 1,500,000 1,663,620
- ----------------------------------------------------------------------------------------------
Philadelphia, PA, School District, MBIA, 6%, 2010(++) 750,000 839,918
- ----------------------------------------------------------------------------------------------
Roma, TX, Independent School District, PSF, 5.875%, 2020 1,705,000 1,891,629
- ----------------------------------------------------------------------------------------------
Wattsburg, PA, Public School Building Authority Rev.,
Capital Appreciation, MBIA, 0%, 2029 2,150,000 597,765
- ----------------------------------------------------------------------------------------------
Williamson County, TN, Rural School, 6.125%, 2010(++) 1,665,000 1,873,958
- ----------------------------------------------------------------------------------------------
Williamson County, TN, Rural School, 6.125%, 2010(++) 1,765,000 1,986,508
- ----------------------------------------------------------------------------------------------
Wylie, TX, Independent School District, PSF, 5.25%, 2029 1,080,000 1,126,094
- ----------------------------------------------------------------------------------------------
$26,939,641
- ----------------------------------------------------------------------------------------------
Healthcare Revenue - Hospitals - 19.8%
- ----------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(West Penn Allegheny Health), 9.25%, 2022 $350,000 $404,901
- ----------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(West Penn Allegheny Health), 9.25%, 2030 650,000 749,944
- ----------------------------------------------------------------------------------------------
Baldwin County, AL, Eastern Shore Health Care Authority
Rev. (Thomas Hospital), 5.75%, 2027 600,000 583,884
- ----------------------------------------------------------------------------------------------
Baxter County, AR, Hospital Rev., 5.375%, 2014 1,000,000 1,039,430
- ----------------------------------------------------------------------------------------------
Chemung County, NY, Civic Facilities Rev. (St. Joseph's
Hospital-Elmira), 6%, 2013 665,000 665,665
- ----------------------------------------------------------------------------------------------
Colorado Health Facilities Authority Rev. (Parkview
Hospital), 6%, 2005(++) 670,000 693,061
- ----------------------------------------------------------------------------------------------
Colorado Health Facilities Authority Rev. (Parkview
Hospital), 6%, 2016 330,000 341,276
- ----------------------------------------------------------------------------------------------
Colorado Health Facilities Authority Rev. (Portercare
Adventist Health Systems), 6.625%, 2026 500,000 552,100
- ----------------------------------------------------------------------------------------------
Cullman, AL, Cullman Medical Park South, Medical Clinic
Board Rev. (Cullman Regional Medical Center), 6.5%, 2013 330,000 331,323
- ----------------------------------------------------------------------------------------------
Cuyahoga County, OH, Hospital Facilities Rev. (Canton,
Inc.), 7.5%, 2030 900,000 1,005,021
- ----------------------------------------------------------------------------------------------
Denver, CO, Health & Hospital Authority Rev., 5.375%, 2018 300,000 305,973
- ----------------------------------------------------------------------------------------------
Denver, CO, Health & Hospital Authority Rev., "A", 6%, 2023 500,000 512,615
- ----------------------------------------------------------------------------------------------
District of Columbia, Health & Hospital Authority Rev.
(Medstar University Hospital), "D", 6.875%, 2007(++) 700,000 752,080
- ----------------------------------------------------------------------------------------------
Fulton County, NY, Industrial Development Agency, Civic
Facilities Rev. (Nathan Littauer Hospital), 5.75%, 2009 250,000 247,978
- ----------------------------------------------------------------------------------------------
Gainsville & Hall County, GA, Hospital Authority Rev.
(Northeast Georgia Health System, Inc.), 5.5%, 2031 445,000 457,509
- ----------------------------------------------------------------------------------------------
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital),
5.75%, 2031 500,000 521,475
- ----------------------------------------------------------------------------------------------
Henrico County, VA, Industrial Development Authority Rev.
(Bon Secours) RIBS, FSA, 9.647%, 2027(+) 5,000,000 6,582,200
- ----------------------------------------------------------------------------------------------
Highlands County, FL, Health Facilities Authority Rev.
(Adventist/Sunbelt Hospital), 6%, 2031 350,000 376,915
- ----------------------------------------------------------------------------------------------
Illinois Health Facilities Authority Rev. (Condell Medical
Center), 6.35%, 2015 1,000,000 1,079,190
- ----------------------------------------------------------------------------------------------
Illinois Health Facilities Authority Rev. (Decatur Memorial
Hospital), 5.75%, 2024 350,000 364,588
- ----------------------------------------------------------------------------------------------
Illinois Health Facilities Authority Rev. (Passavant
Memorial Area Hospital Associates), 6%, 2024 335,000 363,013
- ----------------------------------------------------------------------------------------------
Illinois Health Facilities Authority Rev. (Riverside Health
Systems), 5.75%, 2022 650,000 669,312
- ----------------------------------------------------------------------------------------------
Illinois Health Facilities Authority Rev. (Sinai Health),
FHA, 5.15%, 2037 640,000 653,030
- ----------------------------------------------------------------------------------------------
Indiana Health Facilities Financing Authority, Hospital
Rev. (Munster Medical Research Foundation, Inc.), 6.375%, 2031 500,000 520,195
- ----------------------------------------------------------------------------------------------
Indiana Health Facilities Financing Authority, Hospital
Rev. (Munster Medicial Research Foundation, Inc.), 6.375%, 2021 1,700,000 1,752,207
- ----------------------------------------------------------------------------------------------
Indiana Health Facilities Financing Authority, Hospital
Rev. (Riverview Hospital), 5.25%, 2014 400,000 411,760
- ----------------------------------------------------------------------------------------------
Indiana Health Facilities Financing Authority, Hospital
Rev. (Riverview Hospital), 6.125%, 2031 250,000 259,455
- ----------------------------------------------------------------------------------------------
Indiana Health Facilities Hospital Rev. (Deaconess
Hospital) "A", AMBAC, 5.375%, 2034 565,000 598,793
- ----------------------------------------------------------------------------------------------
Kentucky Economic Development Finance Authority, Health
Systems Rev. (Norton Healthcare, Inc.), 6.5%, 2020 1,250,000 1,371,238
- ----------------------------------------------------------------------------------------------
Kentucky Economic Development Finance Authority, Health
Systems Rev. (Norton Healthcare, Inc.), 6.625%, 2028 250,000 271,320
- ----------------------------------------------------------------------------------------------
Kentucky Economic Development Finance Authority, Refunding
& Improvement, "A", MBIA, 5%, 2018 2,400,000 2,536,200
- ----------------------------------------------------------------------------------------------
Knox County, TN, Health Educational Hospital Facility
(Baptist Health Systems, East Tennessee), 6.375%, 2022 1,000,000 1,034,620
- ----------------------------------------------------------------------------------------------
Lauderdale County & Florence, AL (Coffee Health Group),
"A", MBIA, 5.25%, 2019 1,100,000 1,164,559
- ----------------------------------------------------------------------------------------------
Lufkin, TX, Health Facilities Rev. (Memorial Health System
of East Texas), 6.875%, 2026 320,000 335,050
- ----------------------------------------------------------------------------------------------
Macomb County, MI, Hospital Finance Authority Rev. (Mount
Clemens General Hospital), 5.75%, 2025 1,000,000 941,030
- ----------------------------------------------------------------------------------------------
Marion County, FL, Hospital District Rev. (Monroe
Hospital), 5.625%, 2019 750,000 785,805
- ----------------------------------------------------------------------------------------------
Marshall County, AL, Health Care Rev., "A", 6.25%, 2022 500,000 533,895
- ----------------------------------------------------------------------------------------------
Martin County, FL, Health Facilities Rev. (Martin Memorial
Medical Center), "B", 5.75%, 2022 850,000 867,281
- ----------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority
Rev. (Medstar Health), 5.5%, 2033 305,000 315,809
- ----------------------------------------------------------------------------------------------
Maryland Health & Higher Educational Facilities Authority
Rev. (University of Maryland Medical System), 6.75%, 2030 1,000,000 1,128,270
- ----------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority
Rev. (Caritas Christi), 6.5%, 2012 400,000 438,828
- ----------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority
Rev. (Caritas Christi), 5.7%, 2015 1,000,000 1,030,450
- ----------------------------------------------------------------------------------------------
Massachusetts Health & Educational Facilities Authority
Rev. (Partners Healthcare Systems), 5.75%, 2021 400,000 436,088
- ----------------------------------------------------------------------------------------------
Mecosta County, MI, General Hospital Rev., 6%, 2018 300,000 297,348
- ----------------------------------------------------------------------------------------------
Miami Beach, FL, Health Facilities Rev. (Mount Sinai
Medical Center), "A", 6.7%, 2019 750,000 811,733
- ----------------------------------------------------------------------------------------------
Michigan Hospital Finance Authority Rev. (Memorial
Healthcare Center), 5.75%, 2015 800,000 844,960
- ----------------------------------------------------------------------------------------------
Mississippi Hospital Equipment & Facilities Rev. (Rush
Medical Foundation) CONNIE LEE, 6.7%, 2018 1,000,000 1,004,330
- ----------------------------------------------------------------------------------------------
Montgomery, AL, Special Care Facilities, Financing
Authority Rev. (Baptist Health), "A-2", MBIA, 0% to 2007,
5% to 2022 1,270,000 1,137,183
- ----------------------------------------------------------------------------------------------
Mount Lebanon, PA, Hospital Authority Rev. (St. Clair
Memorial Hospital), 5.625%, 2032 375,000 388,598
- ----------------------------------------------------------------------------------------------
Nassau County, NY, Industrial Development Agency, Civic
Facilities Rev. (North Shore Health System), 5.875%, 2011 375,000 407,149
- ----------------------------------------------------------------------------------------------
New Hampshire Health & Educational Facilities Authority
Rev. (Covenant Health), 6.5%, 2017 915,000 1,021,415
- ----------------------------------------------------------------------------------------------
New Hampshire Health & Educational Facilities Authority
Rev. (Exeter Hospital), 6%, 2024 500,000 539,980
- ----------------------------------------------------------------------------------------------
New Jersey Health Care Facilities (Palisades Medical
Center), 6.5%, 2021 500,000 531,805
- ----------------------------------------------------------------------------------------------
North Texas Health Facilities Development Corp. Rev.
(United Regional Health Care System, Inc.), 6%, 2023 1,000,000 1,057,350
- ----------------------------------------------------------------------------------------------
Ohio County, WV, County Commission Health System Rev. (Ohio
Valley Medical Center), 5.75%, 2013 900,000 842,013
- ----------------------------------------------------------------------------------------------
Oklahoma Development Finance Authority Rev. (Comanche
County Hospital), 6%, 2014 600,000 664,194
- ----------------------------------------------------------------------------------------------
Oklahoma Development Finance Authority Rev. (Comanche
County Hospital), 6.6%, 2031 255,000 278,417
- ----------------------------------------------------------------------------------------------
Palm Beach County, FL, Health Facilities Rev. (Boca Raton
Hospital), 5.5%, 2021 500,000 521,845
- ----------------------------------------------------------------------------------------------
Rhode Island Health & Education Building Rev., Hospital
Financing (Lifespan Obligated Group), 6.5%, 2032 1,500,000 1,652,550
- ----------------------------------------------------------------------------------------------
Richardson, TX, Hospital Authority Rev. (Baylor-
Richardson), 5.25%, 2013 600,000 631,476
- ----------------------------------------------------------------------------------------------
Royston, GA, Hospital Authority Rev. (Ty Cobb Healthcare
Systems, Inc.), 6.5%, 2027 290,000 280,624
- ----------------------------------------------------------------------------------------------
Shelby County, TN, Educational & Housing Facilities Board
Hospital Rev. (Methodist Healthcare), 6%, 2012(++) 500,000 574,230
- ----------------------------------------------------------------------------------------------
Shelby County, TN, Educational & Housing Facilities Board
Hospital Rev. (Methodist Healthcare), ETM, 6%, 2016(++) 300,000 342,075
- ----------------------------------------------------------------------------------------------
South Carolina Jobs & Economic Development Authority,
Hospital Facilities Rev. (Palmetto Health Alliance),
6.25%, 2031 500,000 536,105
- ----------------------------------------------------------------------------------------------
Steubenville, OH, Hospital Rev. (Trinity Hospital),
6.375%, 2020 300,000 333,084
- ----------------------------------------------------------------------------------------------
Stillwater, OK, Medical Center Authority (Stillwater
Medical Center), 6.5%, 2019 1,000,000 1,077,800
- ----------------------------------------------------------------------------------------------
Suffolk County, NY, Industrial Development Agency Rev.
(Southampton Hospital), 7.25%, 2020 720,000 735,257
- ----------------------------------------------------------------------------------------------
Suffolk County, NY, Industrial Development Agency Rev.
(Southampton Hospital), 7.625%, 2030 245,000 255,065
- ----------------------------------------------------------------------------------------------
Suffolk County, NY, Industrial Development Agency, Civic
Facilities Rev. (Huntington Hospital), "C", 5.875%, 2032 1,000,000 1,041,130
- ----------------------------------------------------------------------------------------------
Tallahassee, FL, Health Facilities Rev. (Tallahassee
Memorial Healthcare), 6.25%, 2020 1,000,000 1,030,560
- ----------------------------------------------------------------------------------------------
Tom Green County, TX, Health Facilities Rev. (Shannon
Health System), 6.75%, 2021 400,000 428,572
- ----------------------------------------------------------------------------------------------
Upper Illinois River Valley Development, Health Facilities
Rev. (Morris Hospital), 6.625%, 2031 500,000 543,165
- ----------------------------------------------------------------------------------------------
Valley, AL, Special Care Facilities Financing (Lanier
Memorial Hospital), 5.5%, 2007 500,000 503,905
- ----------------------------------------------------------------------------------------------
Wapello County, IA, Hospital Authority Rev. (Ottumwa
Regional Health Center), 6.375%, 2031 750,000 785,153
- ----------------------------------------------------------------------------------------------
Weirton, WV, Municipal Hospital Building, Commission Rev.
(Weirton Hospital Medical Center), 6.375%, 2031 500,000 495,830
- ----------------------------------------------------------------------------------------------
West Plains, MO, Industrial Development Authority Rev.
(Ozarks Medical Center), 6.75%, 2024 195,000 199,142
- ----------------------------------------------------------------------------------------------
West Shore, PA, Hospital Authority (Holy Spirit Hospital),
6.25%, 2032 1,000,000 1,063,040
- ----------------------------------------------------------------------------------------------
Wichita, KS, Hospital Authority Rev. (Via Christi Health
System), 6.25%, 2019 1,500,000 1,677,090
- ----------------------------------------------------------------------------------------------
Wisconsin Health & Educational Facilities Authority Rev.
(Agnesian Healthcare, Inc.), 6%, 2017 325,000 348,316
- ----------------------------------------------------------------------------------------------
Wisconsin Health & Educational Facilities Authority Rev.
(Aurora Health Care, Inc.), 6.875%, 2030 750,000 858,563
- ----------------------------------------------------------------------------------------------
Wisconsin Health & Educational Facilities Authority Rev.
(Wheaton Franciscan Services), 6.25%, 2022 1,000,000 1,093,520
- ----------------------------------------------------------------------------------------------
Yonkers, NY, Industrial Development Agency, Civic
Facilities Rev. (St. John's Riverside Hospital), 6.8%, 2016 435,000 449,151
- ----------------------------------------------------------------------------------------------
$63,269,059
- ----------------------------------------------------------------------------------------------
Healthcare Revenue - Long Term Care - 2.1%
- ----------------------------------------------------------------------------------------------
Bell County, TX, Health Facilities Development Rev.
(Advanced Living Technology), 7.75%, 2006 $65,000 $62,980
- ----------------------------------------------------------------------------------------------
Bell County, TX, Health Facilities Development Rev.
(Advanced Living Technology), 8.125%, 2016 505,000 442,643
- ----------------------------------------------------------------------------------------------
Bell County, TX, Health Facilities Development Rev.
(Advanced Living Technology), 8.5%, 2026 1,130,000 975,145
- ----------------------------------------------------------------------------------------------
Colorado Health Facilities Authority Rev. (Evangelical
Lutheran), 6.9%, 2025 500,000 570,575
- ----------------------------------------------------------------------------------------------
Cumberland County, PA, Retirement Community Rev. (Wesley
Affiliated Services), 7.25%, 2035 375,000 393,863
- ----------------------------------------------------------------------------------------------
Eden Prairie, MN, Multi-Family Housing Rev. (Coll-Rolling
Hills), "A", GNMA, 6%, 2021 200,000 215,668
- ----------------------------------------------------------------------------------------------
Indiana Health Facilities Financing Authority Rev. (Hoosier
Care), 7.125%, 2034 815,000 697,257
- ----------------------------------------------------------------------------------------------
Iowa Finance Authority, Health Care Facilities Rev. (Care
Initiatives Project), 9.25%, 2025 490,000 590,842
- ----------------------------------------------------------------------------------------------
Jefferson County, KY, Health Care Authority Rev. (Beverly
Enterprises, Inc.), 5.875%, 2007 120,000 120,244
- ----------------------------------------------------------------------------------------------
Luzerne County, PA, Industrial Development Authority Rev.
(Beverly Enterprise, Inc.), 6.75%, 2008 245,000 245,054
- ----------------------------------------------------------------------------------------------
Millbrae, CA, Residential Facilities Rev. (Magnolia of
Millbrae), 7.375%, 2027 960,000 1,007,030
- ----------------------------------------------------------------------------------------------
Shelby County, TN, Health Educational Rev. (Germantown
Village), 7.25%, 2034 385,000 399,518
- ----------------------------------------------------------------------------------------------
Tennessee Veterans Home Board Rev. (Humboldt),
6.75%, 2006(++) 1,000,000 1,053,920
- ----------------------------------------------------------------------------------------------
$6,774,739
- ----------------------------------------------------------------------------------------------
Human Services - 0.4%
- ----------------------------------------------------------------------------------------------
Nassau County, NY, Industrial Development Civic (Special
Needs Facilities), 6.1%, 2012 $295,000 $304,328
- ----------------------------------------------------------------------------------------------
Orange County, FL, Health Facilities Authority Rev. (GF/
Orlando Healthcare Facilities), 9%, 2031 1,000,000 1,021,120
- ----------------------------------------------------------------------------------------------
$1,325,448
- ----------------------------------------------------------------------------------------------
Industrial Revenue - Airlines - 0.6%
- ----------------------------------------------------------------------------------------------
Cleveland, OH, Airport Special Rev. (Continental Airlines,
Inc.), 5.7%, 2019 $1,000,000 $789,270
- ----------------------------------------------------------------------------------------------
Los Angeles, CA, Regional Airport Lease Rev. (American
Airlines, Inc.), 7%, 2012 300,000 292,119
- ----------------------------------------------------------------------------------------------
Tulsa, OK, Municipal Airport Trust Rev. (American Airlines,
Inc.) "B", 5.65%, 2035 1,000,000 943,200
- ----------------------------------------------------------------------------------------------
$2,024,589
- ----------------------------------------------------------------------------------------------
Industrial Revenue - Chemicals - 0.7%
- ----------------------------------------------------------------------------------------------
Brazos River, TX, Harbor Navigation District (Dow Chemical
Co.), 5.7%, 2033 $1,000,000 $1,087,500
- ----------------------------------------------------------------------------------------------
Sweetwater County, WY, Solid Waste Disposal Rev. (FMC
Corp.), "A", 7%, 2024 1,000,000 1,011,530
- ----------------------------------------------------------------------------------------------
$2,099,030
- ----------------------------------------------------------------------------------------------
Industrial Revenue - Environmental Services - 1.7%
- ----------------------------------------------------------------------------------------------
California Pollution Control Financing Authority, Solid
Waste Disposal Rev. (Waste Management, Inc.), "A-2",
5.4%, 2025 $215,000 217,685
- ----------------------------------------------------------------------------------------------
Carbon County, UT, Solid Waste Disposal Rev. (Laidlaw
Environmental), 7.45%, 2017 2,500,000 2,568,425
- ----------------------------------------------------------------------------------------------
Charles City County, VA, Industrial Development Authority,
Solid Waste Disposal Facility Rev. (Waste Management,
Inc.), 6.25%, 2027 500,000 546,640
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority, Solid Waste Rev.
(Waste Management, Inc.), 5.7%, 2018 230,000 241,438
- ----------------------------------------------------------------------------------------------
Gloucester County, NJ, Solid Waste Resource Recovery Rev.
(Waste Management, Inc.), 6.85%, 2029 150,000 166,802
- ----------------------------------------------------------------------------------------------
Henrico County, VA, Industrial Development Authority Rev.
(Browning Ferris, Inc.), 5.3%, 2011 1,000,000 1,003,270
- ----------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev., Resource
Recovery Rev. (Waste Management, Inc.), 6.9%, 2029 300,000 334,233
- ----------------------------------------------------------------------------------------------
Nevada Department of Business (Republic Services, Inc.),
5.625%, 2026 450,000 478,184
- ----------------------------------------------------------------------------------------------
$5,556,677
- ----------------------------------------------------------------------------------------------
Industrial Revenue - Metals - 0%
- ----------------------------------------------------------------------------------------------
Burns Harbor, IN, Solid Waste Disposal Facilities Rev.
(Bethlehem Steel), 8%, 2024* $3,000,000 $3,000
- ----------------------------------------------------------------------------------------------
Industrial Revenue - Other - 2.6%
- ----------------------------------------------------------------------------------------------
Bucks County, PA, Industrial Development Authority Rev.
(USX Corp.), 5.4%, 2017 $500,000 $545,265
- ----------------------------------------------------------------------------------------------
Gulf Coast, TX, Industrial Development Authority (Valero
Energy Corp.), 5.6%, 2031 500,000 504,855
- ----------------------------------------------------------------------------------------------
Hardeman County, TN, Correctional Facilities Corp.
(Corrections Corp. of America), 7.375%, 2017 500,000 513,240
- ----------------------------------------------------------------------------------------------
Lehigh County, PA, Industrial Development Authority
Pollution Control Rev. (PPL Electric Utility Corp.), "A",
FGIC, 4.7%, 2029 320,000 314,061
- ----------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev., Resource
Recovery Rev. (Flour Corp.), 5.625%, 2019 2,895,000 3,033,352
- ----------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev. (Welch Foods,
Inc.), 5.6%, 2017 1,300,000 1,397,695
- ----------------------------------------------------------------------------------------------
Park Creek Metropolitan District, CO, Rev., Custodial
Receipts, "CR", 7.875%, 2032## 400,000 409,928
- ----------------------------------------------------------------------------------------------
Pennsylvania Economic Development Financing Authority Rev.
(Amtrak), 6.125%, 2021 550,000 572,176
- ----------------------------------------------------------------------------------------------
Tooele County, UT, Hazardous Waste Treatment Rev. (Union
Pacific Corp.), 5.7%, 2026 980,000 1,016,926
- ----------------------------------------------------------------------------------------------
$8,307,498
- ----------------------------------------------------------------------------------------------
Industrial Revenue - Paper - 2.4%
- ----------------------------------------------------------------------------------------------
Beauregard Parish, LA (Boise Cascade Corp.), 6.8%, 2027 $500,000 $534,085
- ----------------------------------------------------------------------------------------------
Butler, AL, Industrial Development Board, Solid Waste
Disposal Rev. (Georgia Pacific Corp.), 5.75%, 2028 260,000 259,745
- ----------------------------------------------------------------------------------------------
Delta County, MI, Economic Development Corp., Environmental
Improvements Rev. (Mead Westvaco Escanaba), 6.25%, 2027 900,000 1,007,199
- ----------------------------------------------------------------------------------------------
Mobile, AL, Industrial Development Board Improvement Rev.,
"B" (International Paper Co.), 6.45%, 2019 2,000,000 2,155,300
- ----------------------------------------------------------------------------------------------
Navajo County, AZ, Industrial Development Authority (Stone
Container Corp.), 7.4%, 2026 1,500,000 1,546,980
- ----------------------------------------------------------------------------------------------
Navajo County, AZ, Industrial Development Authority (Stone
Container Corp.), 7.2%, 2027 500,000 519,885
- ----------------------------------------------------------------------------------------------
Onondaga County, NY, Industrial Development Authority Rev.,
Solid Waste Disposal Rev. (Solvay Paperboard LLC),
6.8%, 2014 1,000,000 1,056,060
- ----------------------------------------------------------------------------------------------
West Point, VA, Industrial Development Authority, Solid
Waste Disposal Rev. (Chesapeake Corp.), "A", 6.375%, 2019 550,000 553,867
- ----------------------------------------------------------------------------------------------
$7,633,121
- ----------------------------------------------------------------------------------------------
Miscellaneous Revenue - Entertainment & Tourism - 0.5%
- ----------------------------------------------------------------------------------------------
Capital Trust Agency of Florida Rev. (Seminole Tribe
Convention), 10%, 2033 $700,000 $785,316
- ----------------------------------------------------------------------------------------------
Harris County-Houston, TX, Sports Authority Rev., MBIA,
0%, 2032 1,595,000 349,082
- ----------------------------------------------------------------------------------------------
Sandoval County, NM (Santa Ana Pueblo), 7.75%, 2015## 320,000 327,574
- ----------------------------------------------------------------------------------------------
$1,461,972
- ----------------------------------------------------------------------------------------------
Miscellaneous Revenue - Other - 0.5%
- ----------------------------------------------------------------------------------------------
Austin, TX, Convention Center (Convention Enterprises,
Inc.), 6.6%, 2021 $300,000 $320,886
- ----------------------------------------------------------------------------------------------
Austin, TX, Convention Center (Convention Enterprises,
Inc.), 6.7%, 2028 400,000 428,172
- ----------------------------------------------------------------------------------------------
Gallery Certificate Trust, PA, Parking Rev., FSA,
4.5%, 2013## 710,000 708,566
- ----------------------------------------------------------------------------------------------
$1,457,624
- ----------------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 3.1%
- ----------------------------------------------------------------------------------------------
California Statewide Communities Development Authority Rev.
(Irvine Apartments), 5.25%, 2025 $1,000,000 $1,038,630
- ----------------------------------------------------------------------------------------------
Charter Mac Equity Issuer Trust, 6.625%, 2009 2,000,000 2,138,220
- ----------------------------------------------------------------------------------------------
Eaglebend, CO, Affordable Housing Corp., 6.2%, 2012 1,000,000 981,640
- ----------------------------------------------------------------------------------------------
GMAC Municipal Mortgage Trust, "C-1", 5.7%, 2040## 500,000 494,735
- ----------------------------------------------------------------------------------------------
GMAC Municipal Mortgage Trust, "B-1", 5.6%, 2039## 1,000,000 1,005,900
- ----------------------------------------------------------------------------------------------
Munimae TE Bond Subsidiary LLC, "A-2", 4.9%, 2049## 2,000,000 1,929,780
- ----------------------------------------------------------------------------------------------
Newark, NJ, Housing Authority Port Authority (Newark Marine
Terminal), MBIA, 5.5%, 2028 215,000 233,288
- ----------------------------------------------------------------------------------------------
Panhandle, TX, Regional Housing Finance Rev., 6.625%, 2020 330,000 345,860
- ----------------------------------------------------------------------------------------------
Panhandle, TX, Regional Housing Finance Rev., 6.75%, 2031 1,245,000 1,300,714
- ----------------------------------------------------------------------------------------------
Ridgeland, MS, Urban Renewal (Northbrook I & II
Apartments), 6.15%, 2019** 1,250,000 600,000
- ----------------------------------------------------------------------------------------------
$10,068,767
- ----------------------------------------------------------------------------------------------
Parking - 0.1%
- ----------------------------------------------------------------------------------------------
Rail Connections, Inc., MA Rev., 0%, 2009(++) $100,000 $56,678
- ----------------------------------------------------------------------------------------------
Rail Connections, Inc., MA Rev., 0%, 2009(++) 210,000 111,292
- ----------------------------------------------------------------------------------------------
Rail Connections, Inc., MA Rev., 0%, 2009(++) 300,000 148,905
- ----------------------------------------------------------------------------------------------
$316,875
- ----------------------------------------------------------------------------------------------
Sales & Excise Tax Revenue - 0.4%
- ----------------------------------------------------------------------------------------------
Austin, TX, Town Community Events Center Venue, FGIC,
6%, 2019 $1,015,000 $1,127,624
- ----------------------------------------------------------------------------------------------
Single Family Housing - Local - 3.1%
- ----------------------------------------------------------------------------------------------
Adams County, CO, Single Family Mortgage Rev., ETM,
8.875%, 2011(++) $2,510,000 $3,227,860
- ----------------------------------------------------------------------------------------------
Brevard County, FL, Housing Finance Authority, "B", GNMA,
6.5%, 2022 236,000 236,739
- ----------------------------------------------------------------------------------------------
Calcasieu Parish, LA, Public Trust Authority, Single Family
Mortgage Rev. "A", GNMA, 6.05%, 2032 540,000 571,558
- ----------------------------------------------------------------------------------------------
California Rural Home Mortgage Finance Authority Rev.,
GNMA, 6.55%, 2030 170,000 178,947
- ----------------------------------------------------------------------------------------------
Chicago, IL, Single Family Mortgage Rev., GNMA,
7.05%, 2030 15,000 15,068
- ----------------------------------------------------------------------------------------------
Cook County, IL, Single Family Mortgage Rev., "A", 0%, 2015 550,000 106,651
- ----------------------------------------------------------------------------------------------
Jefferson Parish, LA, Single Family Mortgage Rev., GNMA,
6.625%, 2023 370,000 392,300
- ----------------------------------------------------------------------------------------------
Jefferson Parish, LA, Single Family Mortgage Rev., GNMA,
6.75%, 2030 180,000 190,858
- ----------------------------------------------------------------------------------------------
Lee County, FL, Housing Finance Authority Rev., "A", GNMA,
7%, 2031 35,000 35,573
- ----------------------------------------------------------------------------------------------
Maricopa County, AZ, Single Family Mortgage Rev. "B", GNMA,
6.2%, 2034 290,000 301,325
- ----------------------------------------------------------------------------------------------
Phoenix, AZ, Single Family Mortgage Rev., GNMA,
6.1%, 2028 5,000 5,052
- ----------------------------------------------------------------------------------------------
Pima County, AZ, Industrial Development Authority, GNMA,
7.05%, 2030 465,000 495,997
- ----------------------------------------------------------------------------------------------
Sedgwick & Shawnee Counties, KS, Single Family Housing
Rev., "A", GNMA, 4% to 2005, 5.8% to 2036 645,000 692,285
- ----------------------------------------------------------------------------------------------
Sedgwick & Shawnee Counties, KS, Single Family Housing
Rev., "A-5", GNMA, 3% to 2005, 5.8% to 2027 325,000 346,401
- ----------------------------------------------------------------------------------------------
Sedgwick & Shawnee Counties, KS, Single Family Housing
Rev., "A-5", GNMA, 4% to 2005, 5.7% to 2036 665,000 703,617
- ----------------------------------------------------------------------------------------------
Sedgwick & Shawnee Counties, KS, Single Family Housing
Rev., "B", GNMA, 5.45%, 2027 390,000 410,693
- ----------------------------------------------------------------------------------------------
Sedgwick & Shawnee Counties, KS, Single Family Housing
Rev., GNMA, 6.875%, 2026 185,000 191,292
- ----------------------------------------------------------------------------------------------
Sedgwick & Shawnee Counties, KS, Single Family Housing
Rev., GNMA, 6.45%, 2029 795,000 834,623
- ----------------------------------------------------------------------------------------------
Sedgwick & Shawnee Counties, KS, Single Family Housing
Rev., GNMA, 6.45%, 2033 455,000 482,996
- ----------------------------------------------------------------------------------------------
Sedgwick & Shawnee Counties, KS, Single Family Housing
Rev., GNMA, 6%, 2035 480,000 518,650
- ----------------------------------------------------------------------------------------------
$9,938,485
- ----------------------------------------------------------------------------------------------
Single Family Housing - State - 2.3%
- ----------------------------------------------------------------------------------------------
California Housing Finance Agency Rev., Home Mortgage,
MBIA, 0%, 2028 $2,170,000 $646,812
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 7.15%, 2014 12,000 12,155
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 7.45%, 2016 45,000 45,180
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.75%, 2021 55,000 57,036
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 5.9%, 2023 205,000 210,746
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.1%, 2023 120,000 123,983
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 7.4%, 2027 30,000 30,050
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.875%, 2028 130,000 133,182
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.8%, 2030 115,000 118,801
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.6%, 2032 210,000 214,845
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.375%, 2033 115,000 119,204
- ----------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., 6.55%, 2033 125,000 130,518
- ----------------------------------------------------------------------------------------------
Louisiana Housing Finance Agency, Single Family Mortgage
Rev., GNMA, 7.55%, 2031 185,000 197,882
- ----------------------------------------------------------------------------------------------
Louisiana Housing Finance Agency, Single Family Mortgage
Rev., GNMA, 6.4%, 2032 260,000 269,004
- ----------------------------------------------------------------------------------------------
Minnesota Housing Finance Agency Rev., Residential Housing
Finance "B", 4.8%, 2023 255,000 258,838
- ----------------------------------------------------------------------------------------------
Missouri State Housing Development Commission, Single
Family Mortgage Rev. (Home Loan Program), 6.35%, 2032 260,000 271,250
- ----------------------------------------------------------------------------------------------
Missouri State Housing Development Commission, Single
Family Mortgage Rev. (Home Loan Program), GNMA,
6.7%, 2030 255,000 260,908
- ----------------------------------------------------------------------------------------------
Missouri State Housing Development Commission, Single
Family Mortgage Rev. (Home Loan Program), GNMA,
6.85%, 2032 225,000 234,493
- ----------------------------------------------------------------------------------------------
Missouri State Housing Development Commission, Single
Family Mortgage Rev. (Home Loan Program), GNMA,
6.75%, 2034 135,000 138,706
- ----------------------------------------------------------------------------------------------
New Hampshire Housing Finance Authority Rev., 5.875%, 2030 125,000 127,673
- ----------------------------------------------------------------------------------------------
New Hampshire Housing Finance Authority Rev., 6.3%, 2031 125,000 127,210
- ----------------------------------------------------------------------------------------------
New Mexico Mortgage Finance Authority Rev., GNMA,
7.1%, 2030 100,000 104,815
- ----------------------------------------------------------------------------------------------
New Mexico Mortgage Finance Authority Rev., GNMA, 6.25%, 2032 450,000 467,942
- ----------------------------------------------------------------------------------------------
New Mexico Mortgage Finance Authority Rev., GNMA, 6.35%, 2033 210,000 217,610
- ----------------------------------------------------------------------------------------------
North Dakota Housing Finance Agency Rev., Housing Finance,
5%, 2033 480,000 483,518
- ----------------------------------------------------------------------------------------------
Oklahoma Housing Finance Agency, 6.65%, 2029 1,045,000 1,114,984
- ----------------------------------------------------------------------------------------------
Texas Housing & Community Affairs, Residential Mortgage
Rev., GNMA, 7.1%, 2021 905,000 969,662
- ----------------------------------------------------------------------------------------------
Vermont Housing Finance Agency Rev., FSA, 4.95%, 2032 355,000 361,628
- ----------------------------------------------------------------------------------------------
$7,448,635
- ----------------------------------------------------------------------------------------------
Solid Waste Revenue - 1.0%
- ----------------------------------------------------------------------------------------------
Delaware County, PA, Industrial Development Authority Rev.,
Resource Recovery Facilities (American Ref-Fuel Co.), "A",
6.2%, 2019 $500,000 $517,555
- ----------------------------------------------------------------------------------------------
Hudson County, NJ, Solid Waste System Rev., 5.9%, 2015 855,000 854,171
- ----------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Ogden
Haverhill Associates), 6.7%, 2014 700,000 742,882
- ----------------------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency Rev., Resource
Recovery Rev. (Ogden Haverhill Associates), 5.6%, 2019 1,000,000 1,004,730
- ----------------------------------------------------------------------------------------------
$3,119,338
- ----------------------------------------------------------------------------------------------
State & Agency - Other - 0.8%
- ----------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency (Visual &
Performing Arts), 6%, 2021 $1,000,000 $1,182,270
- ----------------------------------------------------------------------------------------------
Michigan State Certificates of Participation, AMBAC,
5.5%, 2020 1,250,000 1,344,938
- ----------------------------------------------------------------------------------------------
$2,527,208
- ----------------------------------------------------------------------------------------------
State & Local Agencies - 6.1%
- ----------------------------------------------------------------------------------------------
Alabama Building Renovation Authority, AMBAC, 6%, 2018 $760,000 $855,289
- ----------------------------------------------------------------------------------------------
Alabama State Public School & College, Capital Improvement,
"D", 6%, 2015 2,850,000 3,187,212
- ----------------------------------------------------------------------------------------------
Chicago, IL, Public Building Commission Rev., RITES, FGIC,
8.981%, 2016+(+) 1,500,000 1,822,050
- ----------------------------------------------------------------------------------------------
Chicago, IL, Public Building Commission Rev., RITES, FGIC,
8.981%, 2017+(+) 1,250,000 1,517,950
- ----------------------------------------------------------------------------------------------
Golden State, CA, Tobacco Securitization Corp., Tobacco
Settlement Rev., Enhanced, "B", 5.375%, 2028 1,500,000 1,558,530
- ----------------------------------------------------------------------------------------------
Golden State, CA, Tobacco Securitization Corp., Tobacco
Settlement Rev., Enhanced, "B", 5.5%, 2043 1,075,000 1,129,804
- ----------------------------------------------------------------------------------------------
Houston, TX, Certificates of Participation, 6.3%, 2020 1,000,000 1,083,390
- ----------------------------------------------------------------------------------------------
Indianapolis, IN, Public Improvement Bond Bank, "C", AMBAC,
6%, 2017 500,000 556,970
- ----------------------------------------------------------------------------------------------
New Mexico Finance Authority Rev., Court Facilities Fee
Rev., MBIA, 5.5%, 2020 475,000 514,264
- ----------------------------------------------------------------------------------------------
New York State Urban Development Corp., Correctional
Facilities Service Contract C, AMBAC, 5.875%, 2009(++) 1,000,000 1,107,990
- ----------------------------------------------------------------------------------------------
Stafford, TX, Economic Development Corp., FGIC, 6%, 2015 525,000 611,688
- ----------------------------------------------------------------------------------------------
Virginia College Building Authority, VA, Public Higher
Education Financing, "A", 5.75%, 2009(++) 2,295,000 2,534,621
- ----------------------------------------------------------------------------------------------
Warren Township, IN (Vision 2005 School Building Corp.),
FGIC, 5.5%, 2011(++) 2,600,000 2,878,330
- ----------------------------------------------------------------------------------------------
$19,358,088
- ----------------------------------------------------------------------------------------------
Student Loan Revenue - 0.9%
- ----------------------------------------------------------------------------------------------
Access to Loans for Learning, California Student Loan Rev.,
7.95%, 2030 $650,000 $681,870
- ----------------------------------------------------------------------------------------------
Arizona Student Loan Acquisition Authority Rev., 5.8%, 2016 675,000 721,886
- ----------------------------------------------------------------------------------------------
Arizona Student Loan Acquisition Authority Rev., 5.85%,
2017 700,000 748,251
- ----------------------------------------------------------------------------------------------
Massachusetts Educational Financing Authority, Refunding
Issue G, "A", MBIA, 6.1%, 2018 700,000 728,854
- ----------------------------------------------------------------------------------------------
$2,880,861
- ----------------------------------------------------------------------------------------------
Tax - Other - 1.1%
- ----------------------------------------------------------------------------------------------
New Jersey Economic Development Authority Rev. Cigarette
Tax, 5.5%, 2024 $250,000 $257,143
- ----------------------------------------------------------------------------------------------
New Jersey Economic Development Authority Rev. Cigarette
Tax, 5.75%, 2029 450,000 467,973
- ----------------------------------------------------------------------------------------------
New Jersey Economic Development Authority Rev. Cigarette
Tax, 5.5%, 2031 200,000 203,196
- ----------------------------------------------------------------------------------------------
New Jersey Economic Development Authority Rev. Cigarette
Tax, 5.75%, 2034 300,000 309,543
- ----------------------------------------------------------------------------------------------
New York, NY, Transitional, Future Tax Secured, "A",
6%, 2009(++) 2,000,000 2,248,800
- ----------------------------------------------------------------------------------------------
$3,486,655
- ----------------------------------------------------------------------------------------------
Tax Assessment - 2.3%
- ----------------------------------------------------------------------------------------------
Allegheny County, PA, Redevelopment Authority Rev.
(Pittsburgh Mills), 5.1%, 2014 $75,000 $76,358
- ----------------------------------------------------------------------------------------------
Allegheny County, PA, Redevelopment Authority Rev.
(Pittsburgh Mills), 5.6%, 2023 50,000 51,816
- ----------------------------------------------------------------------------------------------
Broadview, IL, Tax Increment Rev., 5.25%, 2012 1,000,000 1,033,490
- ----------------------------------------------------------------------------------------------
Capital Region Community Development District of FL,
Capital Improvement Rev., 5.95%, 2006 100,000 100,695
- ----------------------------------------------------------------------------------------------
Fishhawk Community Development District of FL, 5.125%, 2009 440,000 440,128
- ----------------------------------------------------------------------------------------------
Greyhawk Landing Community Development, FL Special
Assessment Rev., "B", 6.25%, 2009 285,000 290,210
- ----------------------------------------------------------------------------------------------
Katy, TX, Development Authority Rev., 5.8%, 2011 915,000 949,889
- ----------------------------------------------------------------------------------------------
Katy, TX, Development Authority Rev., 6%, 2018 1,200,000 1,245,996
- ----------------------------------------------------------------------------------------------
Killarney, FL, Community Development District, "B",
5.125%, 2009 310,000 310,465
- ----------------------------------------------------------------------------------------------
Lakes By The Bay South Community Development District,
Florida Special Assessment, "B", 5.3%, 2009 285,000 285,829
- ----------------------------------------------------------------------------------------------
Panther Trace, FL, Community Development District Rev.,
"B", 6.5%, 2009 145,000 147,319
- ----------------------------------------------------------------------------------------------
Panther Trace, FL, Community Development District Rev.,
"B", 5%, 2010 525,000 525,315
- ----------------------------------------------------------------------------------------------
Parkway Center, FL, Community Development District Rev.,
"B", 5.625%, 2014 935,000 940,881
- ----------------------------------------------------------------------------------------------
Preserve At Wilderness Lake, FL, Community Development
District, Capital Improvement,"B", 5%, 2009 525,000 520,238
- ----------------------------------------------------------------------------------------------
Renaissance Community Development of Florida, "B",
6.25%, 2008 480,000 492,067
- ----------------------------------------------------------------------------------------------
$7,410,696
- ----------------------------------------------------------------------------------------------
Tobacco - 1.3%
- ----------------------------------------------------------------------------------------------
Badger Tobacco, WI (Asset Securitization Corp.),
6.125%, 2027 $1,115,000 $1,131,223
- ----------------------------------------------------------------------------------------------
District of Columbia, Tobacco Settlement, 6.25%, 2024 420,000 426,418
- ----------------------------------------------------------------------------------------------
Guam Economic Development Authority, 5%, 2022 165,000 166,884
- ----------------------------------------------------------------------------------------------
Iowa Tobacco Settlement Authority, Tobacco Settlement Rev.,
Asset Backed, "B", 5.3%, 2025 750,000 696,353
- ----------------------------------------------------------------------------------------------
Louisiana Tobacco Settlement Authority, 5.5%, 2030 415,000 405,613
- ----------------------------------------------------------------------------------------------
New Jersey Tobacco Settlement Authority, 5.75%, 2032 710,000 706,152
- ----------------------------------------------------------------------------------------------
South Carolina Tobacco Settlement Authority, 6.375%, 2028 500,000 507,750
- ----------------------------------------------------------------------------------------------
Washington Tobacco Settlement Authority, 6.5%, 2026 70,000 72,892
- ----------------------------------------------------------------------------------------------
$4,113,285
- ----------------------------------------------------------------------------------------------
Toll Roads - 0.5%
- ----------------------------------------------------------------------------------------------
New Jersey Turnpike Authority Rev., MBIA, 6.5%, 2016 $315,000 $376,034
- ----------------------------------------------------------------------------------------------
Northwest Parkway Public Highway Authority Co. Rev.,
Capital Appreciation "B", AMBAC, 0%, 2018 750,000 383,858
- ----------------------------------------------------------------------------------------------
San Joaquin Hills, CA, Transportation Corridor Agency, Toll
Road Rev., ETM, 0%, 2009(++) 1,000,000 879,950
- ----------------------------------------------------------------------------------------------
$1,639,842
- ----------------------------------------------------------------------------------------------
Transportation - Special Tax - 1.1%
- ----------------------------------------------------------------------------------------------
Allegheny County, PA, Port Authority Special Rev., MBIA,
6.25%, 2009(++) $1,000,000 $1,123,860
- ----------------------------------------------------------------------------------------------
New Jersey Economic Development Authority Rev.,
Transportation Project Sublease "A", FSA, 6%, 2009(++) 325,000 358,953
- ----------------------------------------------------------------------------------------------
Pennsylvania State Turnpike Commission Oil, "A", AMBAC,
5.25%, 2018 850,000 908,072
- ----------------------------------------------------------------------------------------------
Pennsylvania State Turnpike Commission Oil, "A", AMBAC,
ETM, 5.25%, 2018(++) 1,150,000 1,231,029
- ----------------------------------------------------------------------------------------------
$3,621,914
- ----------------------------------------------------------------------------------------------
Universities - Colleges - 4.3%
- ----------------------------------------------------------------------------------------------
Amherst, NY, Industrial Development Agency Rev. (Daemen
College), "A", 6%, 2021 $1,000,000 $1,063,500
- ----------------------------------------------------------------------------------------------
California Educational Facilities Authority Rev. (L.A.
College of Chiropractic), 5.6%, 2017 250,000 240,943
- ----------------------------------------------------------------------------------------------
Houston, TX, Community College Systems, MBIA,
7.875%, 2025 1,650,000 2,087,481
- ----------------------------------------------------------------------------------------------
Illinois Finance Authority Rev. (Univeristy of Chicago),
"A", 5%, 2034 215,000 219,773
- ----------------------------------------------------------------------------------------------
Islip, NY, Community Development Agency Rev. (New York
Institute of Technology), 7.5%, 2006(++) 2,000,000 2,127,080
- ----------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev. (Boston
University), XLCA, 6%, 2059 1,250,000 1,468,488
- ----------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev.
(Massachusetts College of Pharmacy), 6.625%, 2010(++) 100,000 115,421
- ----------------------------------------------------------------------------------------------
Massachusetts Development Finance Agency Rev., (Olin
College), "B", XLCA, 5.25%, 2033 2,000,000 2,103,580
- ----------------------------------------------------------------------------------------------
Northern Illinois University Rev., Auxiliary Facilities
Systems, AMBAC, 5.875%, 2018 1,370,000 1,499,766
- ----------------------------------------------------------------------------------------------
Savannah, GA, Economic Development Authority Rev. (College
of Art & Design, Inc.), 6.5%, 2009(++) 500,000 567,010
- ----------------------------------------------------------------------------------------------
St. Joseph County, IN, Educational Facilities Rev.
(University of Notre Dame), 6.5%, 2026 1,000,000 1,277,050
- ----------------------------------------------------------------------------------------------
Upland, IN, Economic Development Rev. (Taylor University),
6%, 2018 435,000 483,985
- ----------------------------------------------------------------------------------------------
Upland, IN, Economic Development Rev. (Taylor University),
6.25%, 2023 520,000 573,134
- ----------------------------------------------------------------------------------------------
$13,827,211
- ----------------------------------------------------------------------------------------------
Universities - Secondary Schools - 1.8%
- ----------------------------------------------------------------------------------------------
California Statewide Communities, Development Authority
Rev. (Escondido Charter High School), 7.5%, 2036 $500,000 $507,040
- ----------------------------------------------------------------------------------------------
Clark County, NV, Economic Development Rev. (Alexander
Dawson School), 5.5%, 2020 1,500,000 1,578,525
- ----------------------------------------------------------------------------------------------
Maine Finance Authority, Educational Rev. (Waynflete
School), 6.4%, 2019 1,000,000 1,079,590
- ----------------------------------------------------------------------------------------------
Maine Finance Authority, Educational Rev. (Waynflete
School), 6.5%, 2029 1,000,000 1,074,920
- ----------------------------------------------------------------------------------------------
Michigan Municipal Bond Authority Rev. (Detroit Academy of
Arts & Sciences), 8%, 2031 300,000 314,838
- ----------------------------------------------------------------------------------------------
Michigan Municipal Bond Authority Rev. (YMCA Service
Learning Academy), 7.625%, 2021 400,000 427,768
- ----------------------------------------------------------------------------------------------
New Hampshire Health & Education (Derryfield School),
6.5%, 2010 360,000 364,079
- ----------------------------------------------------------------------------------------------
Pima County, AZ, Industrial Development Authority Education
Rev. (Arizona Charter Schools), "C", 6.75%, 2031 500,000 522,460
- ----------------------------------------------------------------------------------------------
$5,869,220
- ----------------------------------------------------------------------------------------------
Utilities - Cogeneration - 0.7%
- ----------------------------------------------------------------------------------------------
Carbon County, PA, Industrial Development Authority Rev.
(Panther Creek Partners), 6.65%, 2010 $635,000 $682,542
- ----------------------------------------------------------------------------------------------
Klamath Falls, OR, Electric Rev. (Klamath Cogeneration),
6%, 2025 1,475,000 1,476,106
- ----------------------------------------------------------------------------------------------
$2,158,648
- ----------------------------------------------------------------------------------------------
Utilities - Investor Owned - 5.5%
- ----------------------------------------------------------------------------------------------
Apache County, AZ, Industrial Development Authority,
Pollution Control Rev. (Tucson Electric Power Co.),
5.875%, 2033 $1,000,000 $997,890
- ----------------------------------------------------------------------------------------------
Brazos River Authority, TX, Pollution Control Rev. (Texas
Utility Co.), "B", 6.3%, 2032 250,000 265,548
- ----------------------------------------------------------------------------------------------
California Pollution Control Financing Authority, Pollution
Control Rev. (Pacific Gas & Electric Co.), MBIA, 5.35%, 2016 1,600,000 1,704,768
- ----------------------------------------------------------------------------------------------
California Pollution Control Financing Authority, Pollution
Control Rev. (Southern California Edison Co.), 6.4%, 2024 500,000 502,470
- ----------------------------------------------------------------------------------------------
Connecticut Development Authority, Pollution Control Rev.
(Connecticut Light & Power Co.), 5.85%, 2028 1,000,000 1,058,590
- ----------------------------------------------------------------------------------------------
Farmington, NM, Pollution Control Rev. (New Mexico Public
Service), 5.8%, 2022 500,000 509,785
- ----------------------------------------------------------------------------------------------
Farmington, NM, Pollution Control Rev. (New Mexico Public
Service), 6.375%, 2022 1,000,000 1,076,250
- ----------------------------------------------------------------------------------------------
Farmington, NM, Pollution Control Rev. (New Mexico Public
Service), "A", 6.3%, 2016 565,000 603,618
- ----------------------------------------------------------------------------------------------
Matagorda County, TX, Pollution Control Rev. (Central Power
& Light Co.), 4.55%, 2029 1,000,000 1,022,530
- ----------------------------------------------------------------------------------------------
Matagorda County, TX, Pollution Control Rev. (Reliant
Energy), 5.95%, 2030 750,000 754,155
- ----------------------------------------------------------------------------------------------
Mecklenburg County, VA, Industrial Development Authority
Rev. (UAE Mecklenburg, LP), 6.5%, 2017 700,000 774,431
- ----------------------------------------------------------------------------------------------
New Hampshire Industrial Development Authority, Pollution
Control (CT Light and Power), 5.9%, 2016 500,000 519,270
- ----------------------------------------------------------------------------------------------
Pennsylvania Economic Development Financing Authority Rev.
(Reliant Energy Seward), "A", 6.75%, 2036 560,000 597,201
- ----------------------------------------------------------------------------------------------
Pima County, AZ, Industrial Development Authority Rev.
(Tucson Electric Power Co.), 6.1%, 2025 2,000,000 2,000,600
- ----------------------------------------------------------------------------------------------
Pittsylvania County, VA, Industrial Development Authority
Rev. (Multi-trade of Pittsylvania), 7.5%, 2014 2,000,000 2,064,400
- ----------------------------------------------------------------------------------------------
Port Morrow, OR, Pollution Control Rev. (Portland General
Electric), 5.2%, 2033 350,000 367,171
- ----------------------------------------------------------------------------------------------
Sabine River Authority, TX, Pollution Control Rev. (TXU
Electric Co.) "A", 5.5%, 2022 500,000 534,540
- ----------------------------------------------------------------------------------------------
West Feliciana Parish, LA, Pollution Control Rev. (Energy
Gulf States), 6.6%, 2028 1,665,000 1,689,908
- ----------------------------------------------------------------------------------------------
West Feliciana Parish, LA, Pollution Control Rev. (Gulf
States Utilities Co.), 7.7%, 2014 450,000 453,416
- ----------------------------------------------------------------------------------------------
$17,496,541
- ----------------------------------------------------------------------------------------------
Utilities - Municipal Owned - 6.3%
- ----------------------------------------------------------------------------------------------
Austin, TX, Utility Systems Rev., AMBAC, 6.75%, 2011 $1,500,000 $1,765,095
- ----------------------------------------------------------------------------------------------
California State, Department of Water Resources Power
Supply Rev., "A", 5.125%, 2018 750,000 791,280
- ----------------------------------------------------------------------------------------------
Georgia Municipal Electric Power Authority Rev., MBIA,
6.375%, 2016 2,000,000 2,407,360
- ----------------------------------------------------------------------------------------------
Georgia Municipal Electric Power Authority Rev., MBIA,
6.5%, 2020 7,350,000 9,110,252
- ----------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, Catawba Electric
Rev., 6.375%, 2013 750,000 833,738
- ----------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, Catawba Electric
Rev., MBIA, 7%, 2007 3,250,000 3,481,043
- ----------------------------------------------------------------------------------------------
North Carolina Municipal Power Agency, ROLs, MBIA,
8.096%, 2019+(+) 1,500,000 1,706,430
- ----------------------------------------------------------------------------------------------
$20,095,198
- ----------------------------------------------------------------------------------------------
Water & Sewer Utility Revenue - 4.4%
- ----------------------------------------------------------------------------------------------
Atlanta, GA, Water & Wastewater Rev., RITES, FGIC,
8.043%, 2016+(+) $1,000,000 $1,271,180
- ----------------------------------------------------------------------------------------------
Augusta, GA, Water & Sewer Rev., FSA, 5.25%, 2039 430,000 456,389
- ----------------------------------------------------------------------------------------------
Forsyth County, GA, Water & Sewage Authority, 6.25%, 2010(++) 1,170,000 1,335,766
- ----------------------------------------------------------------------------------------------
Massachusetts Water Resources Authority, 6.5%, 2019 5,965,000 7,183,053
- ----------------------------------------------------------------------------------------------
New York State Environmental Facilities, 5%, 2016 430,000 454,145
- ----------------------------------------------------------------------------------------------
New York State Environmental Facilities, ETM, 5%, 2016(++) 570,000 607,837
- ----------------------------------------------------------------------------------------------
Pittsburgh, PA, Water & Sewer Authority Rev., "C", FSA,
5.25%, 2022 2,000,000 2,081,220
- ----------------------------------------------------------------------------------------------
Spartanburg, SC, Water & Sewer Authority Rev., "B", MBIA,
5.25%, 2030 255,000 270,433
- ----------------------------------------------------------------------------------------------
West Wilson Utility District, TN, Waterworks Rev., MBIA,
5.25%, 2030 480,000 507,850
- ----------------------------------------------------------------------------------------------
$14,167,873
- ----------------------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $291,155,371) $311,402,597
- ----------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.4%
- ----------------------------------------------------------------------------------------------
Bay Area Toll Authority, California Toll Bridge Rev., "A",
2.22%, due 4/07/05 $900,000 $900,000
- ----------------------------------------------------------------------------------------------
Bell County, TX, Health Facilities Development Corp. Rev.
(Scott & White Hospital), 2.3%, due 4/01/05 600,000 600,000
- ----------------------------------------------------------------------------------------------
Irvine, CA, Improvement Building Act 1915, 2.28%, due 4/06/05 1,850,000 1,850,000
- ----------------------------------------------------------------------------------------------
Pinellas County, FL, Health Facilities Authority Rev.,
Pooled Hospital Loan Program, 2.3%, due 4/01/05 400,000 400,000
- ----------------------------------------------------------------------------------------------
San Francisco, CA, City & County Financial Corp., Lease
Rev. (Moscone Center Expansion), 2.28%, due 4/07/05 800,000 800,000
- ----------------------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $4,550,000
- ----------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $295,705,371) $315,952,597
- ----------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.2% 3,738,238
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $319,690,835
- ----------------------------------------------------------------------------------------------
* Non-income producing security - in default.
+ Restricted security.
(+) Inverse floating rate security.
(++) Refunded bond.
## SEC Rule 144A restriction.
** Interest received was less than stated coupon rate.
The following abbreviations are used in the Portfolio of Investments and are defined:
ETM = Escrowed to Maturity
Insurers
AMBAC = AMBAC Indemnity Corp.
CONNIE LEE = Connie Lee Insurance Co.
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.
Inverse Floaters
RIBS = Residual Interest Bonds
RITES = Residual Interest Tax-Exempt Security
ROLS = Residual Option Longs
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 the fund.
AT 3/31/05
ASSETS
Investments, at value (identified cost, $295,705,371) $315,952,597
- ---------------------------------------------------------------------------------------------------
Cash 20,729
- ---------------------------------------------------------------------------------------------------
Receivable for investments sold 201,144
- ---------------------------------------------------------------------------------------------------
Receivable for fund shares sold 222,764
- ---------------------------------------------------------------------------------------------------
Interest receivable 4,675,701
- ---------------------------------------------------------------------------------------------------
Unrealized appreciation on interest rate swap agreements 511,419
- ---------------------------------------------------------------------------------------------------
Other assets 2,558
- ---------------------------------------------------------------------------------------------------
Total assets $321,586,912
- ---------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable $538,175
- ---------------------------------------------------------------------------------------------------
Payable for investments purchased 907,859
- ---------------------------------------------------------------------------------------------------
Payable for fund shares reacquired 261,140
- ---------------------------------------------------------------------------------------------------
Unrealized depreciation on interest rate swap agreements 13,975
- ---------------------------------------------------------------------------------------------------
Payable to affiliates
- ---------------------------------------------------------------------------------------------------
Management fee 2,572
- ---------------------------------------------------------------------------------------------------
Shareholder servicing costs 34,239
- ---------------------------------------------------------------------------------------------------
Distribution and service fee 3,781
- ---------------------------------------------------------------------------------------------------
Administrative fee 118
- ---------------------------------------------------------------------------------------------------
Accrued expenses and other liabilities 134,218
- ---------------------------------------------------------------------------------------------------
Total liabilities $1,896,077
- ---------------------------------------------------------------------------------------------------
Net assets $319,690,835
- ---------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Paid-in capital $303,498,127
- ---------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) on investments 20,744,670
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (4,335,816)
- ---------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment
income (216,146)
- ---------------------------------------------------------------------------------------------------
Net assets $319,690,835
- ---------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 37,233,628
- ---------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
Class A shares
Net assets $241,849,769
- ---------------------------------------------------------------------------------------------------
Shares outstanding 28,181,232
- ---------------------------------------------------------------------------------------------------
Net asset value per share $8.58
- ---------------------------------------------------------------------------------------------------
Offering price per share (100/95.25X$8.58) $9.01
- ---------------------------------------------------------------------------------------------------
Class B shares
Net assets $43,930,363
- ---------------------------------------------------------------------------------------------------
Shares outstanding 5,111,814
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per share $8.59
- ---------------------------------------------------------------------------------------------------
Class C shares
Net assets $33,910,703
- ---------------------------------------------------------------------------------------------------
Shares outstanding 3,940,582
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per share $8.61
- ---------------------------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------------------------
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.
YEAR ENDED 3/31/05
NET INVESTMENT INCOME
- --------------------------------------------------------------------------------------------------
Interest income $18,855,772
- --------------------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------------------
Management fee $1,823,568
- --------------------------------------------------------------------------------------------------
Trustees" compensation 14,315
- --------------------------------------------------------------------------------------------------
Shareholder servicing costs 397,578
- --------------------------------------------------------------------------------------------------
Distribution and service fee (Class A) 624,686
- --------------------------------------------------------------------------------------------------
Distribution and service fee (Class B) 469,881
- --------------------------------------------------------------------------------------------------
Distribution and service fee (Class C) 346,586
- --------------------------------------------------------------------------------------------------
Administrative fee 26,315
- --------------------------------------------------------------------------------------------------
Custodian fee 114,058
- --------------------------------------------------------------------------------------------------
Printing 46,891
- --------------------------------------------------------------------------------------------------
Postage 7,324
- --------------------------------------------------------------------------------------------------
Auditing fees 46,379
- --------------------------------------------------------------------------------------------------
Legal fees 8,338
- --------------------------------------------------------------------------------------------------
Miscellaneous 132,247
- --------------------------------------------------------------------------------------------------
Total expenses $4,058,166
- --------------------------------------------------------------------------------------------------
Fees paid indirectly (7,275)
- --------------------------------------------------------------------------------------------------
Reduction of expenses by investment adviser (830,332)
- --------------------------------------------------------------------------------------------------
Net expenses $3,220,559
- --------------------------------------------------------------------------------------------------
Net investment income $15,635,213
- --------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) (identified cost basis)
- --------------------------------------------------------------------------------------------------
Investment transactions $3,782,435
- --------------------------------------------------------------------------------------------------
Swap transactions (1,906,963)
- --------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $1,875,472
- --------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
- --------------------------------------------------------------------------------------------------
Investments $(8,742,866)
- --------------------------------------------------------------------------------------------------
Swap transactions 1,512,184
- --------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $(7,230,682)
- --------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $(5,355,210)
- --------------------------------------------------------------------------------------------------
Change in net assets from operations $10,280,003
- --------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENTS 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.
YEAR ENDED YEAR ENDED
3/31/05 3/31/04
CHANGE IN NET ASSETS
FROM OPERATIONS
Net investment income $15,635,213 $16,994,651
- --------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 1,875,472 (1,682,213)
- --------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments (7,230,682) 8,784,137
- --------------------------------------------------------- ------------ ------------
Change in net assets from operations $10,280,003 $24,096,575
- --------------------------------------------------------- ------------ ------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
- --------------------------------------------------------------------------------------------------
Class A $(12,056,821) $(13,264,818)
- --------------------------------------------------------------------------------------------------
Class B (1,913,952) (2,354,471)
- --------------------------------------------------------------------------------------------------
Class C (1,411,847) (1,644,710)
- --------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(15,382,620) $(17,263,999)
- --------------------------------------------------------- ------------ ------------
Change in net assets from fund share transactions $(30,106,846) $(25,385,914)
- --------------------------------------------------------- ------------ ------------
Redemption fees $691 $--
- --------------------------------------------------------- ------------ ------------
Total change in net assets $(35,208,772) $(18,553,338)
- --------------------------------------------------------- ------------ ------------
NET ASSETS
At beginning of period $354,899,607 $373,452,945
- --------------------------------------------------------------------------------------------------
At end of period (including accumulated
distributions in excess of net investment income of
$216,146 and $575,902, respectively) $319,690,835 $354,899,607
- --------------------------------------------------------------------------------------------------
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 registered public accounting firm, whose report, together with the fund's financial statements, are included in
this report.
YEARS ENDED 3/31
---------------------------------------------------------------------------------
CLASS A 2005 2004 2003 2002 2001
Net asset value, beginning of period $8.70 $8.54 $8.32 $8.54 $8.33
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS(S)(S)#
Net investment income(S) $0.42 $0.41 $0.41 $0.44 $0.46
- -----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (0.13) 0.17 0.25 (0.20) 0.27
- --------------------------------------------- ------ ------ ------ ------ ------
Total from investment operations $0.29 $0.58 $0.66 $0.24 $0.73
- --------------------------------------------- ------ ------ ------ ------ ------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
From net investment income $(0.41) $(0.42) $(0.44) $(0.46) $(0.47)
- -----------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- (0.02)
- -----------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain
on investments -- -- -- -- (0.03)
- --------------------------------------------- ------ ------ ------ ------ ------
Total distributions declared
to shareholders $(0.41) $(0.42) $(0.44) $(0.46) $(0.52)
- --------------------------------------------- ------ ------ ------ ------ ------
Redemption fees added to
paid-in capital# $0.00+++ $-- $-- $-- $--
- --------------------------------------------- ------ ------ ------ ------ ------
Net asset value, end of period $8.58 $8.70 $8.54 $8.32 $8.54
- --------------------------------------------- ------ ------ ------ ------ ------
Total return (%)(+)& 3.49 6.94 8.00 2.78 9.06
- -----------------------------------------------------------------------------------------------------------------------------
Financial Highlights - continued
YEARS ENDED 3/31
---------------------------------------------------------------------------------
CLASS A (CONTINUED) 2005 2004 2003 2002 2001
RATIOS (%) TO AVERAGE NET ASSETS
AND SUPPLEMENTAL DATA(S):
Expenses## 0.79 0.88 0.90 0.91 0.89
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.90 4.80 4.85 5.12 5.55
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 8 9 13 15 15
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(000 Omitted) $241,850 $264,797 $274,442 $276,719 $255,799
- -----------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for substantially all of its proportional share
of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.40 $0.40 $0.40 $0.41 $0.44
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS):
Expenses## 1.04 1.04 1.05 1.15 1.20
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.65 4.64 4.70 4.88 5.24
- -----------------------------------------------------------------------------------------------------------------------------
(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 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 do not include the applicable sales charge. If the charge had been included, the results would have been
lower.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
YEARS ENDED 3/31
-----------------------------------------------------------------------------
CLASS B 2005 2004 2003 2002 2001
Net asset value, beginning of period $8.72 $8.55 $8.33 $8.55 $8.34
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS(S)(S)#
Net investment income(S) $0.36 $0.35 $0.35 $0.37 $0.40
- -----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (0.14) 0.18 0.24 (0.20) 0.27
- --------------------------------------------- ------ ------ ------ ------ ------
Total from investment operations $0.22 $0.53 $0.59 $0.17 $0.67
- --------------------------------------------- ------ ------ ------ ------ ------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.35) $(0.36) $(0.37) $(0.39) $(0.41)
- -----------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- -- -- (0.02)
- -----------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain
on investments -- -- -- -- (0.03)
- --------------------------------------------- ------ ------ ------ ------ ------
Total distributions declared to shareholders $(0.35) $(0.36) $(0.37) $(0.39) $(0.46)
- --------------------------------------------- ------ ------ ------ ------ ------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- --------------------------------------------- ------ ------ ------ ------ ------
Net asset value, end of period $8.59 $8.72 $8.55 $8.33 $8.55
- --------------------------------------------- ------ ------ ------ ------ ------
Total return (%)& 2.60 6.27 7.19 2.00 8.24
- -----------------------------------------------------------------------------------------------------------------------------
Financial Highlights - continued
YEARS ENDED 3/31
----------------------------------------------------------------------------
CLASS B (CONTINUED) 2005 2004 2003 2002 2001
RATIOS (%) TO AVERAGE NET ASSETS
AND SUPPLEMENTAL DATA(S):
Expenses## 1.54 1.63 1.65 1.66 1.64
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.15 4.05 4.10 4.37 4.82
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 8 9 13 15 15
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $43,930 $52,594 $59,591 $61,627 $75,858
- -----------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for substantially all of its proportional share
of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.33 $0.34 $0.34 $0.35 $0.38
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS):
Expenses## 1.79 1.79 1.80 1.90 1.95
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.90 3.89 3.95 4.13 4.51
- -----------------------------------------------------------------------------------------------------------------------------
(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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
YEARS ENDED 3/31
-----------------------------------------------------------------------------
CLASS C 2005 2004 2003 2002 2001
Net asset value, beginning of period $8.73 $8.56 $8.34 $8.56 $8.35
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS(S)(S)#
Net investment income(S) $0.36 $0.35 $0.35 $0.37 $0.40
- -----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (0.13) 0.18 0.24 (0.20) 0.27
- --------------------------------------------- ------ ------ ------ ------ ------
Total from investment operations $0.23 $0.53 $0.59 $0.17 $0.67
- --------------------------------------------- ------ ------ ------ ------ ------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income $(0.35) $(0.36) $(0.37) $(0.39) $(0.41)
- -----------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- -- -- (0.02)
- -----------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain
on investments -- -- -- -- (0.03)
- --------------------------------------------- ------ ------ ------ ------ ------
Total distributions declared to shareholders $(0.35) $(0.36) $(0.37) $(0.39) $(0.46)
- --------------------------------------------- ------ ------ ------ ------ ------
Redemption fees added to paid-in capital# $0.00+++ $-- $-- $-- $--
- --------------------------------------------- ------ ------ ------ ------ ------
Net asset value, end of period $8.61 $8.73 $8.56 $8.34 $8.56
- --------------------------------------------- ------ ------ ------ ------ ------
Total return (%)& 2.72 6.27 7.18 2.00 8.23
- -----------------------------------------------------------------------------------------------------------------------------
Financial Highlights - continued
YEARS ENDED 3/31
----------------------------------------------------------------------------
CLASS C (CONTINUED) 2005 2004 2003 2002 2001
RATIOS (%) TO AVERAGE NET ASSETS
AND SUPPLEMENTAL DATA(S):
Expenses## 1.54 1.63 1.65 1.66 1.64
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 4.15 4.05 4.10 4.37 4.80
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 8 9 13 15 15
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $33,911 $37,508 $39,420 $36,146 $29,257
- -----------------------------------------------------------------------------------------------------------------------------
(S) The investment adviser contractually waived a portion of its fee for the periods indicated. In addition, effective June 7,
2004, the investment adviser has voluntarily agreed to reimburse the fund for substantially all of its proportional share
of Independent Chief Compliance Officer service fees paid to Tarantino LLC. 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) $0.33 $0.34 $0.34 $0.35 $0.37
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS):
Expenses## 1.79 1.79 1.80 1.90 1.95
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income(S)(S) 3.90 3.89 3.95 4.13 4.49
- -----------------------------------------------------------------------------------------------------------------------------
(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.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
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 U.S.
generally accepted accounting principles 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 - 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. 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 approximates market value as determined by the Board of
Trustees. When pricing service information or market quotations are not readily
available, securities are priced at fair value as determined under the
direction of 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 and foreign exchange 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 fund.
RATE LOCK SWAPS - 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.
SHORT TERM FEES - For purchases made on or after July 1, 2004 and before April
1, 2005, the fund will charge a 2% redemption fee (which is retained by the
fund) on proceeds from Class A, Class B, and Class C shares redeemed or
exchanged within 5 business days following their acquisition (either by
purchase or exchange). Effective April 1, 2005, the fund will no longer charge
a redemption fee. See the fund's prospectus for details. Any redemption fees
charged are accounted for as an addition to paid-in capital.
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 and accreted for financial statement purposes in
accordance with generally accepted accounting principles. All premium and
original issue discount is amortized or accreted for tax reporting purposes as
required by federal income tax regulations. The fund may receive proceeds from
litigation settlements involving its portfolio holdings. Any proceeds received
are reflected in realized gain/loss in the statement of operations, or in
unrealized gain/loss if the security is still held by the fund.
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, 2005, 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, defaulted bonds, amortization and accretion on debt
securities and treating a portion of the proceeds from redemptions as a
distribution for tax purposes.
The tax character of distributions declared for the years ended March 31, 2005
and March 31, 2004 was as follows:
3/31/05 3/31/04
Distributions declared from:
------------------------------------------------------------------
Tax-exempt income $15,355,366 $17,263,999
------------------------------------------------------------------
Ordinary income 27,254 --
------------------------------------------------------------------
Total distributions declared $15,382,620 $17,263,999
------------------------------------------------------------------
During the year ended March 31, 2005, accumulated distributions in excess of net
investment income decreased by $107,163 and accumulated net realized loss on
investments and paid-in capital increased by $145,643 and $38,480, respectively
due to differences between book and tax accounting for derivatives, defaulted
bonds, amortization and accretion on debt securities and the treatment of a
portion of the proceeds from redemptions as a distribution for tax purposes.
This change had no effect on the net assets or net asset value per share.
As of March 31, 2005, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
Undistributed tax-exempt income $1,116,179
--------------------------------------------------------
Capital loss carryforward (4,741,158)
--------------------------------------------------------
Unrealized appreciation (depreciation) 20,590,564
--------------------------------------------------------
Other temporary differences (772,877)
--------------------------------------------------------
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 as follows: March 31, 2011, ($655,485) 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 generally due to differences in separate class
expenses. 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. As part of a settlement agreement with the
New York Attorney General concerning market timing and related matters (See
Legal Proceedings footnote), MFS has agreed to reduce the management fee to
0.30% of average daily net assets for the period March 1, 2004 through February
28, 2009, which is shown as a reduction of total expenses in the Statement of
Operations. 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.
The fund pays compensation to its Independent Trustees in the form of a
retainer, attendance fees, and additional compensation to Board and Committee
chairpersons, 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 $3,705 for retired Independent Trustees for
the year ended March 31, 2005.
This fund and certain other MFS funds (the "funds") have entered into a services
agreement (the "Agreement") which provides for payment of fees by the funds to
Tarantino LLC in return for the provision of services of an Independent Chief
Compliance Officer (ICCO) for the funds. The ICCO is an officer of the funds and
the sole member of Tarantino LLC. MFS has agreed to reimburse each of the funds
for a proportional share of substantially all of the payments made by the funds
to Tarantino LLC and also to provide office space and other administrative
support and supplies to the ICCO. The funds can terminate the Agreement with
Tarantino LLC at any time under the terms of the Agreement.
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.
The fund paid MFS an administrative fee up to the following annual percentage
rates of the fund's average daily net assets:
4/01/04
THROUGH
EFFECTIVE DATE 2/28/05 3/01/05
First $2 billion 0.01120% 0.01626%
- ---------------------------------------------------------------------------
Next $2.5 billion 0.00832% 0.01206%
- ---------------------------------------------------------------------------
Next $2.5 billion 0.00032% 0.00056%
- ---------------------------------------------------------------------------
In excess of $7 billion 0.00000% 0.00000%
- ---------------------------------------------------------------------------
For the year ended March 31, 2005, the fund paid MFS $26,315 equivalent to
0.00794% of average daily net assets, to partially reimburse MFS for the costs
of providing administrative services.
DISTRIBUTOR - MFD, a wholly owned subsidiary of MFS, as distributor, received
$28,629 for the year ended March 31, 2005, 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
as compensation for services provided by MFD and financial intermediaries in
connection with the distribution and servicing of its shares. One component of
the plan is a distribution fee and another is a service fee paid by MFD to
financial intermediaries that enter into sales or service agreements with MFD or
its affiliates based on the average daily net assets of accounts attributable to
such intermediaries. The 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 may retain all or a portion of the service fee, including for accounts for
which there is no financial intermediary of record. Service fees retained by
MFD for the year ended March 31, 2005, amounted to:
CLASS A CLASS B CLASS C
Service Fee Retained by MFD $19,770 $367 $140
- ------------------------------------------------------------------------------
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.
Fees incurred under the distribution plan during the year ended March 31, 2005
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 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 of purchase. MFD receives all contingent deferred sales charges.
Contingent deferred sales charges imposed during the year ended March 31, 2005
were as follows:
CLASS A CLASS B CLASS C
Contingent Deferred Sales Charges Imposed $3,310 $80,573 $10,670
- ------------------------------------------------------------------------------
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 fund's
Trustees. For the period April 1, 2004 through June 30, 2004, the fee was set at
0.10% of the fund's average daily net assets. For the period July 1, 2004
through December 31, 2004, the fund was charged up to 0.0861% of its average
daily net assets. For the period January 1, 2005 through February 28, 2005, the
fund is charged up to 0.1035% of its average daily net assets. Effective March
1, 2005, the fund is charged up to 0.1159% of its average daily net assets. For
the year ended March 31, 2005, the fund paid MFSC a fee of $311,912 for
shareholder services which equated to 0.0941% of the fund's average daily net
assets. Shareholder service costs include out of pocket expenses and sub
accounting services expenses paid by MFSC on behalf of the fund and subsequently
reimbursed to MFSC which amounted to $62,465 and other costs paid by the fund
directly to unaffiliated vendors for the year ended March 31, 2005.
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations, aggregated
$26,916,168 and $61,862,191, 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 $295,362,033
----------------------------------------------------------
Gross unrealized appreciation $25,086,288
----------------------------------------------------------
Gross unrealized depreciation (4,495,724)
----------------------------------------------------------
Net unrealized appreciation (depreciation) $20,590,564
----------------------------------------------------------
(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 3/31/05 Year ended 3/31/04
SHARES AMOUNT SHARES AMOUNT
CLASS A SHARES
Shares sold 1,567,579 $ 13,461,021 3,923,574 $ 33,678,836
- ------------------------------------------------------------------------------
Shares issued to
shareholders
in reinvestment of
distributions 849,343 7,292,898 867,292 7,450,143
- ------------------------------------------------------------------------------
Shares reacquired (4,659,350) (39,924,894) (6,505,143) (55,872,881)
- ------------------------------------------------------------------------------
Net change (2,242,428) $(19,170,975) $ (1,714,277) (14,743,902)
- ------------------------------------------------------------------------------
CLASS B SHARES
Shares sold 454,146 $ 3,903,573 534,325 $ 4,621,956
- ------------------------------------------------------------------------------
Shares issued
to shareholders
in reinvestment of
distributions 118,406 1,017,998 133,556 1,149,141
- ------------------------------------------------------------------------------
Shares reacquired (1,495,083) (12,809,285) (1,602,274) (13,788,797)
- ------------------------------------------------------------------------------
Net change (922,531) $ (7,887,714) (934,393) $ (8,017,700)
- ------------------------------------------------------------------------------
CLASS C SHARES
Shares sold 544,452 $ 4,690,961 1,083,331 $ 9,355,388
- ------------------------------------------------------------------------------
Shares issued
to shareholders
in reinvestment of
distributions 119,904 1,032,616 125,956 1,084,943
- ------------------------------------------------------------------------------
Shares reacquired (1,021,41) (8,771,734) (1,515,353) (13,064,643)
- ------------------------------------------------------------------------------
Net change (357,135) $ (3,048,157) (306,066) $ (2,624,312)
- ------------------------------------------------------------------------------
(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 Federal
Reserve funds 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, 2005 was $1,430 and is
included in miscellaneous expense. The fund had no significant borrowings
during the year ended March 31, 2005.
(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 and foreign currency exchange 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 Swaps
UNREALIZED
NOTIONAL PRINCIPAL CASH FLOWS PAID CASH FLOWS RECEIVED APPRECIATION
EXPIRATION AMOUNT OF CONTRACT BY THE FUND BY THE FUND (DEPRECIATION)
12/01/07 USD 6,000,000 Fixed - 3 Year BMA Floating - 7 day BMA $44,921
Swap Index - 2.795% Swap Index
- ---------------------------------------------------------------------------------------------------------
6/22/15 USD 8,000,000 Fixed - 10 Year BMA Floating - 7 day BMA 141,878
Swap Index - 3.628% Swap Index
- ---------------------------------------------------------------------------------------------------------
4/06/17 USD 9,000,000 Fixed - 12 Year BMA Floating - 7 day BMA 21,352
Swap Index - 3.884% Swap Index
- ---------------------------------------------------------------------------------------------------------
4/20/17 USD 16,000,000 Fixed - 12 Year BMA Floating - 7 day BMA 289,293
Swap Index - 3.714% Swap Index
- ---------------------------------------------------------------------------------------------------------
$497,444
- ---------------------------------------------------------------------------------------------------------
At March 31, 2005, the fund had sufficient cash and/or securities to cover any
commitments under these contracts.
(8) RESTRICTED SECURITIES
At March 31, 2005, the fund owned the following restricted securities which are
subject to legal or contractual restrictions on resale, excluding securities
issued under Rule 144A, constituting 5.1% 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 a
pricing service, or if not available, in good faith at the direction of the
Trustees.
DATE OF
DESCRIPTION ACQUISITION PAR AMOUNT COST VALUE
Atlanta, GA, Water & Wastewater
Rev., RITES, FGIC, 8.043%, 2016 4/20/99 1,000,000 $1,167,100 $1,271,180
- ------------------------------------------------------------------------------
Chicago, IL (O'Hare
International Airport), RITES,
FSA, 8.474%, 2022 8/21/03 1,500,000 1,599,510 1,796,365
- ------------------------------------------------------------------------------
Chicago, IL, Public Building
Commission Rev., RITES, FGIC,
8.981%, 2016 3/10/99 1,500,000 1,619,550 1,822,050
- ------------------------------------------------------------------------------
Chicago, IL, Public Building
Commission Rev., RITES, FGIC,
8.981%, 2017 3/10/99 1,250,000 1,337,550 1,517,950
- ------------------------------------------------------------------------------
Commonwealth of Puerto Rico,
ROLs, FGIC, 8.633% 2015 8/15/02 3,000,000 3,878,760 3,834,240
- ------------------------------------------------------------------------------
Dudley-Charlton, MA, Regional
School District, RITES, FGIC,
7.566%, 2017 5/05/99 1,495,000 1,615,945 1,833,677
- ------------------------------------------------------------------------------
Houston, TX, Independent School
District, RITES, PSF, 7.543%,
2017 2/26/99 2,325,000 2,440,832 2,618,694
- ------------------------------------------------------------------------------
North Carolina Municipal Power
Agency, ROLs, MBIA, 8.096%,
2019 3/03/03 1,500,000 1,717,980 1,706,430
- ------------------------------------------------------------------------------
$16,400,586
- ------------------------------------------------------------------------------
(9) CONCENTRATION OF CREDIT RISK
At March 31, 2005, 34.0% 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 13.7% of total investments.
(10) LEGAL PROCEEDINGS
On March 31, 2004, MFS settled an administrative proceeding with the Securities
and Exchange Commission ("SEC") regarding disclosure of brokerage allocation
practices in connection with MFS fund sales (the term "MFS funds" means the
open-end registered management investment companies sponsored by MFS). 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 developed by an
independent distribution consultant. The brokerage allocation practices which
were the subject of this proceeding were discontinued by MFS in November 2003.
The agreement with the SEC is reflected in an order of the SEC. The SEC
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 SEC
settlement order states that MFS had in place policies designed to obtain best
execution of all MFS fund trades. As part of the settlement, MFS retained an
independent compliance consultant to review the completeness of its current
policies and practices regarding disclosure to MFS fund trustees and to MFS
fund shareholders of strategic alliances between MFS or its affiliates and
broker-dealers and other financial intermediaries who support the sale of MFS
fund shares. Pursuant to the SEC order, on July 28, 2004, MFS transferred these
settlement amounts to the SEC, and those MFS funds entitled to these settlement
amounts accrued an estimate of their pro rata portion of these amounts. The
final distribution plan was approved by the SEC on January 21, 2005, and the
affected MFS funds received the payment on February 16, 2005.
In addition, in February 2004, MFS reached agreement with the 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 open-end retail fund ("MFS retail funds")
prospectuses regarding market timing and related matters (the "February
Settlements"). These regulators alleged that prospectus language for certain
MFS retail funds was false and misleading because, although the prospectuses
for those funds in the regulators" view indicated that they prohibited market
timing, MFS did not limit trading activity in 11 domestic large cap stock, high
grade bond and money market retail funds. MFS' former Chief Executive Officer
and former President 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. These
individuals 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 MFS 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 Board of
Trustees of the MFS retail funds, and acceptable to the SEC. MFS has further
agreed with 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 retained $250,000 and $750,000 was 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, MFS Fund Distributors, Inc., MFS Service Center,
Inc., MFS Corporation Retirement Committee, Sun Life Financial Inc., various
MFS funds, certain current and/or former 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 MFS funds during specified periods, as ERISA
actions by participants in certain retirement plan accounts on behalf of those
accounts, or as derivative actions on behalf of the MFS funds. The lawsuits
relating to market timing and related matters have been transferred to, and
consolidated before, the United States District Court for the District of
Maryland, as part of a multi-district litigation of market timing and related
claims involving several other fund complexes (In re Mutual Funds Investment
Litigation (Alger, Columbia, Janus, MFS, One Group, Putnam, Allianz Dresdner),
No. 1:04-md-15863 (transfer began March 19, 2004)). The market timing cases
related to the MFS complex are Riggs v. MFS et al., Case No. 04-cv-01162-JFM
(direct), Hammerslough v. MFS et al., Case No. 04-md-01620 (derivative) and
Anita Walker v. MFS et al., Case No. 1:04-CV-01758 (ERISA). The plaintiffs in
these consolidated lawsuits generally seek injunctive relief including removal
of the named Trustees, adviser and distributor, rescission of contracts and
12b-1 Plans, disgorgement of fees and profits, monetary damages, punitive
damages, attorney's fees and costs and other equitable and declaratory relief.
Two lawsuits alleging improper brokerage allocation practices and excessive
compensation are pending in the United States District Court for the District
of Massachusetts (Forsythe v. Sun Life Financial Inc., et al., No. 04cv10584
(GAO) (a consolidated action) and Marcus Dumond, et al. v. Massachusetts
Financial Servs. Co., et al., No. 04cv11458 (GAO)). The plaintiffs in these
lawsuits generally seek compensatory damages, punitive damages, recovery of
fees, rescission of contracts, an accounting, restitution, declaratory relief,
equitable and/or injunctive relief and attorney's fees and costs. The various
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 (ii) received excessive compensation as fiduciaries to the MFS funds,
or (iii) permitted or acquiesced in the improper use of fund assets by MFS to
support the distribution of MFS 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. 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 MFS 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 certain MFS retail funds for damages that they
allegedly sustained as a result of market timing or late trading in certain of
the MFS retail funds, and distributed $50 million to affected MFS funds to
compensate those funds based upon the amount of brokerage commissions allocated
in recognition of MFS 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 MFS 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 MFS funds.
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- -------------------------------------------------------------------------------
To the Trustees and the Shareholders of MFS Municipal Income Fund:
We have audited the accompanying statement of assets and liabilities of MFS
Municipal Income Fund, one of the series comprising MFS Series Trust IV (the
"Trust"), including the portfolio of investments, as of March 31, 2005, and the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the 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. The Trust is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Trust's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. Our procedures
included confirmation of securities owned as of March 31, 2005, by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of MFS
Municipal Income Fund as of March 31, 2005, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the five years
in the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 24, 2005
- ------------------------------------------------------------------------------
RESULTS OF SHAREHOLDER MEETING (unaudited) - 3/31/05
- ------------------------------------------------------------------------------
At a special meeting of shareholders of MFS Municipal Income Fund, which was
held on March 23, 2005, the following actions were taken:
ITEM 1. To elect a Board of Trustees:
NUMBER OF DOLLARS
--------------------------------------
NOMINEE AFFIRMATIVE WITHHOLD AUTHORITY
Lawrence H. Cohn 2,338,745,402.20 23,104,899.71
- ------------------------------------------------------------------------------
David H. Gunning 2,340,048,506.07 21,801,795.84
- ------------------------------------------------------------------------------
William R. Gutow 2,339,850,605.62 21,999,696.29
- ------------------------------------------------------------------------------
Michael Hegarty 2,340,213,807.46 21,636,494.45
- ------------------------------------------------------------------------------
J. Atwood Ives 2,338,786,653.70 23,063,648.21
- ------------------------------------------------------------------------------
Amy B. Lane 2,339,960,815.68 21,889,486.23
- ------------------------------------------------------------------------------
Robert J. Manning 2,340,560,593.28 21,289,708.63
- ------------------------------------------------------------------------------
Lawrence T. Perera 2,338,677,013.42 23,173,288.49
- ------------------------------------------------------------------------------
Robert C. Pozen 2,340,797,047.27 21,053,254.64
- ------------------------------------------------------------------------------
J. Dale Sherratt 2,338,746,772.55 23,103,529.36
- ------------------------------------------------------------------------------
Laurie J. Thomsen 2,339,932,511.83 21,917,790.08
- ------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
TRUSTEES AND OFFICERS -- IDENTIFICATION AND BACKGROUND
- ---------------------------------------------------------------------------------------------------------------
The Trustees and officers of the Trust, as of May 1, 2005, are listed below, together with their principal
occupations during the past five years. (Their titles may have varied during that period.) The address of each
Trustee and officer is 500 Boylston Street, Boston, Massachusetts 02116.
PRINCIPAL OCCUPATIONS DURING
POSITION(s) HELD TRUSTEE/OFFICER THE PAST FIVE YEARS &
NAME, DATE OF BIRTH WITH FUND SINCE(1) OTHER DIRECTORSHIPS(2)
- ------------------- ---------------- --------------- ----------------------------
INTERESTED TRUSTEES
Robert J. Manning(3) Trustee and February 2004 Massachusetts Financial Services
(born 10/20/63) President Company, Chief Executive Officer,
President, Chief Investment
Officer and Director
Robert C. Pozen(3) Trustee February 2004 Massachusetts Financial Services
(born 08/08/46) Company, 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); Bell Canada
Enterprises (telecommunications),
Director; Medtronic, Inc. (medical
technology), Director; Telesat
(satellite communications),
Director
INDEPENDENT TRUSTEES
J. Atwood Ives Trustee and Chair February 1992 Private investor; Eastern
(born 05/01/36) of Trustees 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,
(born 03/11/37) Chief of Cardiac Surgery; Harvard
Medical School, Professor of
Surgery
David H. Gunning Trustee January 2004 Cleveland-Cliffs Inc. (mining
(born 05/30/42) products and 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
(born 09/27/41) consultant; Capitol Entertainment
Management Company (video
franchise), Vice Chairman
Michael Hegarty Trustee December 2004 Retired; AXA Financial (financial
(born 12/21/44) services and insurance), Vice
Chairman and Chief Operating
Officer (until May 2001); The
Equitable Life Assurance Society
(insurance), President and Chief
Operating Officer (until May 2001)
Amy B. Lane Trustee January 2004 Retired; Merrill Lynch & Co.,
(born 02/08/53) Inc., Managing 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),
(born 06/23/35) Partner
J. Dale Sherratt Trustee August 1993 Insight Resources, Inc.
(born 09/23/38) (acquisition planning
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)
Laurie J. Thomsen Trustee March 2005 Private investor; Prism Venture
(born 08/05/57) Partners (venture capital), Co-
founder and General Partner (until
June 2004); St. Paul Travelers
Companies (commercial property
liability insurance), Director
OFFICERS
Robert J. Manning(3) President and February 2004 Massachusetts Financial Services
(born 10/20/63) Trustee Company, Chief Executive Officer,
President, Chief Investment
Officer and Director
Jeffrey N. Carp(3) Secretary and September 2004 Massachusetts Financial Services
(born 12/1/56) Clerk Company, Executive Vice President,
General Counsel and Secretary
(since April 2004); Hale and Dorr
LLP (law firm), Partner (prior to
April 2004)
Stephanie A. DeSisto(3) Assistant May 2003 Massachusetts Financial Services
(born 10/01/53) Treasurer Company, 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)
James F. DesMarais(3) Assistant September 2004 Massachusetts Financial Services
(born 03/09/61) Secretary and Company, Assistant General Counsel
Assistant Clerk
Richard M. Hisey(3) Treasurer August 2002 Massachusetts Financial Services
(born 08/29/58) Company, 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)
Brian T. Hourihan(3) Assistant September 2004 Massachusetts Financial Services
(born 11/11/64) Secretary and Company, Vice President, Senior
Assistant Clerk Counsel and Assistant Secretary
(since June 2004); Affiliated
Managers Group, Inc., Chief Legal
Officer/Centralized Compliance
Program (January to April 2004);
Fidelity Research & Management
Company, Assistant General Counsel
(prior to January 2004)
Ellen Moynihan(3) Assistant April 1997 Massachusetts Financial Services
(born 11/13/57) Treasurer Company, Vice President
Frank L. Tarantino Independent Chief June 2004 Tarantino LLC (provider of
(born 03/07/44) Compliance compliance services), Principal
Officer (since June 2004); CRA Business
Strategies Group (consulting
services), Executive Vice
President (April 2003 to June
2004); David L. Babson & Co.
(investment adviser), Managing
Director, Chief Administrative
Officer and Director (February
1997 to March 2003)
James O. Yost(3) Assistant September 1990 Massachusetts Financial Services
(born 06/12/60) Treasurer Company, 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 the Trust 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 fund, as a
result of position with MFS. The address of MFS is 500 Boylston Street, Boston, Massachusetts 02116.
Each Trustee has been elected by shareholders and 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.
Messrs. Ives and Sherratt and Mses. Lane and Thomsen are members of the Trust's Audit Committee.
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. As of December 31, 2004, each Trustee served as a board member of 99 funds within the MFS
Family of Funds.
The Trust held a shareholders' meeting in 2005, and will hold a shareholder's meeting at least once every five
years thereafter, to elect Trustees.
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 CUSTODIAN
Massachusetts Financial Services Company State Street Bank and Trust Company
500 Boylston Street, Boston, MA 02116-3741 225 Franklin Street, Boston, MA 02110
INDEPENDENT REGISTERED PUBLIC
DISTRIBUTOR ACCOUNTING FIRM
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
- ------------------------------------------------------------------------------
PROXY VOTING POLICIES AND INFORMATION
- ------------------------------------------------------------------------------
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 Web site at
http://www.sec. gov.
Information regarding how the fund voted proxies relating to portfolio
securities during the most recent twelve-month period ended June 30 is
available without charge by visiting the Proxy Voting section of mfs.com or by
visiting the SEC's Web site at http://www.sec.gov.
- ------------------------------------------------------------------------------
QUARTERLY PORTFOLIO DISCLOSURE
- ------------------------------------------------------------------------------
The fund will file a complete schedule of portfolio holdings with the
Securities and Exchange Commission (the Commission) for the first and third
quarters of each fiscal year on Form N-Q. The fund's Form N-Q may be reviewed
and copied at the:
Public Reference Room
Securities and Exchange Commission
Washington, D.C. 20549-0102
Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-800-SEC-0330. The fund's Form N-Q is available on
the EDGAR database on the Commission's Internet website at http://www.sec.gov,
and copies of this information may be obtained, upon payment of a duplicating
fee, by electronic request at the following e-mail address: publicinfo@sec.gov
or by writing the Public Reference Section at the above address.
A shareholder can also obtain the quarterly portfolio holdings report at
mfs.com.
- --------------------------------------------------------------------------------
FEDERAL TAX INFORMATION (UNAUDITED)
In January 2006, 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 2005.
For the year ended 3/31/05, 99.82% of the distributions from income are
designated as exempt-interest dividends.
- --------------------------------------------------------------------------------
CONTACT INFORMATION
INVESTOR SERVICE
Write to us at: MFS Service Center, Inc.
P.O. Box 55824
Boston, MA 02205-5824
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
- -------------------------------------------------------------------------------
M F S(SM)
INVESTMENT MANAGEMENT(R)
(C) 2005 MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
LMB-ANN-05/05 12M
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 Form N-CSR that applies to the Registrant's
principal executive officer and principal financial and accounting officer. The
Registrant has amended its Code of Ethics to reflect that the Registrant's
Principal Financial Officer has changed.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Mr. J. Atwood Ives and Mses. Amy B. Lane and Laurie J. Thomsen, 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 Form N-CSR. In addition, Mr. Ives
and Mses. Lane and Thomsen are "independent" members of the Audit Committee as
defined in 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 each series (the "Funds") of the Registrant
(hereinafter the "Registrant"). The tables below set forth the audit fees billed
to the Funds as well as fees for non-audit services provided to the Funds and/or
to the Funds' 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, 2005 and 2004, audit fees billed to the
Funds by Deloitte were as follows:
Audit Fees
FEES BILLED BY DELOITTE: 2005 2004
---- ----
MFS Alabama Municipal Bond $33,754 $30,490
Fund
MFS Arkansas Municipal 33,754 30,490
Bond Fund
MFS California Municipal 33,754 30,490
Bond Fund
MFS Florida Municipal Bond 33,754 30,490
Fund
MFS Georgia Municipal Bond 33,754 30,490
Fund
MFS Maryland Municipal 33,754 30,490
Bond Fund
MFS Massachusetts Municipal 33,754 30,490
Bond Fund
MFS Mississippi Municipal 33,754 30,490
Bond Fund
MFS Municipal Income Fund 36,917 33,365
MFS New York Municipal 33,754 30,490
Bond Fund
MFS North Carolina Municipal 33,754 30,490
Bond Fund
MFS Pennsylvania Municipal 33,754 30,490
Bond Fund
MFS South Carolina Municipal 33,754 30,490
Bond Fund
MFS Tennessee Municipal 33,754 30,490
Bond Fund
MFS Virginia Municipal 33,754 30,490
Bond Fund
MFS West Virginia Municipal 33,754 30,490
Bond Fund
TOTAL $543,227 $490,715
For the fiscal years ended March 31, 2005 and 2004, fees billed by Deloitte for
audit-related, tax and other services provided to the Funds and for
audit-related, tax and other services provided to MFS and MFS Related Entities
were as follows:
AUDIT-RELATED FEES(1) TAX FEES(2) ALL OTHER FEES(3)
FEES BILLED BY DELOITTE: 2005 2004 2005 2004 2005 2004
---- ---- ---- ---- ---- ----
To MFS Alabama $0 $0 $9,550 $4,950 $0 $0
Municipal Bond Fund
To MFS Arkansas 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS California 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS Florida 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS Georgia 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS Maryland 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS Massachusetts 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS Mississippi 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS Municipal 0 0 9,550 4,950 0 0
Income Fund
To MFS New York 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS North Carolina 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS Pennsylvania 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS South Carolina 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS Tennessee 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS Virginia 0 0 9,550 4,950 0 0
Municipal Bond Fund
To MFS West Virginia 0 0 9,550 4,950 0 0
Municipal Bond Fund
TOTAL FEES BILLED BY DELOITTE $0 $0 $152,800 $79,200 $0 $0
TO ABOVE FUNDS
To MFS and MFS Related $1,277,066 $356,150 $62,000 $55,000 $602,500 $0
Entities of MFS
Alabama Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
Arkansas Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
California Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
Florida Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
Georgia Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
Maryland Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
Massachusetts Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
Mississippi Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
Municipal Income Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
New York Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
North Carolina Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
Pennsylvania Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
South Carolina Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
Tennessee Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
Virginia Municipal
Bond Fund*
To MFS and MFS Related 1,277,066 356,150 62,000 55,000 602,500 0
Entities of MFS
West Virginia Municipal
Bond Fund*
AGGREGATE FEES FOR NON-AUDIT
SERVICES:
2005 2004
---- ----
$1,988,717 $526,295
To MFS Alabama Municipal
Bond Fund, MFS and MFS
Related Entities#
To MFS Arkansas 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS California 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS Florida 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS Georgia 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS Maryland 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS Massachusetts 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS Mississippi 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS Municipal 1,988,717 526,295
Income Fund, MFS
and MFS Related Entities#
To MFS New York 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS North Carolina 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS Pennsylvania 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS South Carolina 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS Tennessee 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS Virginia 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
To MFS West Virginia 1,988,717 526,295
Municipal Bond Fund,
MFS and MFS Related
Entities#
* This amount reflects the fees billed to MFS and MFS Related Entities for non-audit services relating directly to the
operations and financial reporting of the Funds (portions of which services also related to the operations and
financial reporting of other funds within the MFS Funds complex).
# This amounts reflects the aggregate fees billed by Deloitte for non-audit services rendered to the Funds and for
non-audit services rendered to MFS and the MFS Related Entities.
(1) The fees included under "Audit-Related Fees" are fees related to assurance and related services that are reasonably
related to the performance of the audit or review of financial statements, but not reported under "Audit Fees,"
including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters and internal
control reviews.
(2) The fees included under "Tax Fees" are fees associated with tax compliance, tax advice and tax planning, including
services relating to the filing or amendment of federal, state or local income tax returns, regulated investment
company qualification reviews and tax distribution and analysis.
(3) The fees included under "All Other Fees" are fees for products and services provided by Deloitte other than those
reported under "Audit Fees," "Audit-Related Fees" and "Tax Fees."
For periods prior to May 6, 2003, the amounts shown above under "Audit-Related
Fees," "Tax Fees" and "All Other Fees" relate to permitted non-audit services
that would have been subject to pre-approval if the Securities and Exchange
Commission's rules relating to pre-approval of non-audit services had been in
effect.
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: To the extent required by applicable law,
pre-approval by the Audit Committee of the Board is needed for all 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 financial reporting of the Registrant.
Pre-approval is currently on an engagement-by-engagement basis. In the event
pre-approval of such services is necessary between regular meetings of the Audit
Committee and it is not practical to wait to seek pre-approval at the next
regular meeting of the Audit Committee, pre-approval of such services may be
referred to the Chair of the Audit Committee for approval; provided that the
Chair may not pre-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
pre-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 Fund and MFS and MFS Related Entities relating
directly to the operations and financial reporting of the Registrant disclosed
above were approved by the audit committee pursuant to paragraphs (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): The Registrant's Audit Committee has considered whether the provision
by a Registrant's independent registered public accounting firm of non-audit
services to MFS and MFS Related Entities that were not pre-approved by the
Committee (because such services were provided prior to the effectiveness of SEC
rules requiring pre-approval or because such services did not relate directly to
the operations and financial reporting of the Registrant) was compatible with
maintaining the independence of the independent registered public accounting
firm as the Registrant's principal auditors.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the Registrant.
ITEM 6. SCHEDULE OF INVESTMENTS
A schedule of investments of the Registrant is included as part of the report to
shareholders of such series under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the Registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no material changes to the procedures by which shareholders may send
recommendations to the Board for nominees to the Registrant's Board since the
Registrant last provided disclosure as to such procedures in response to the
requirements of Item 7(d)(2)(ii)(G) of Schedule 14A or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Act) 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 second fiscal quarter covered by the report that has materially
affected, or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 12. 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, 2005
------------
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, 2005
------------
By (Signature and Title)* MARIA F. DWYER
-----------------------------------------------------
Maria F. Dwyer, Treasurer (Principal
Financial Officer and Accounting Officer)
Date: May 24, 2005
------------
* Print name and title of each signing officer under his or her signature.