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 811-21780
- -------------------------------------------------------------------------------
MFS SERIES TRUST XII
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Susan S. Newton
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
- -------------------------------------------------------------------------------
(Name and address of agents for service)
Registrant's telephone number, including area code: (617) 954-5000
- -------------------------------------------------------------------------------
Date of fiscal year end: April 30
- -------------------------------------------------------------------------------
Date of reporting period: April 30, 2006
- -------------------------------------------------------------------------------
This Form N-CSR is being filed for the purpose of amending and restating the
Form N-CSR filed on July 7, 2006 (Accession No. 0000950156-06-000290), which
as a result of a filing error, contained the report of another registrant.
M F S(SM)
INVESTMENT MANAGEMENT(R)
ITEM 1. REPORTS TO STOCKHOLDERS.
MFS(R) Mutual Funds 04/30/06
ANNUAL REPORT
- ----------------------- ---------------------------
4/30/06 MFS(R) Lifetime Funds
- ----------------------- ---------------------------
- ----------------------------------------------------------
- ----------------------------------------------------------
- --------------------------------------------------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK OR CREDIT UNION GUARANTEE NOT A DEPOSIT
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF
- --------------------------------------------------------------------------------------------------
MFS(R) LIFETIME FUNDS 4/30/06
MFS Lifetime Retirement Income Fund
The fund seeks total return through a combination of current income and
capital appreciation.
MFS Lifetime 2010 Fund
The fund seeks a high level of total return consistent with its asset
allocation until the approximate retirement year in the fund's name;
thereafter, the fund will seek total return through a combination of current
income and capital appreciation.
MFS Lifetime 2020 Fund
The fund seeks a high level of total return consistent with its asset
allocation until the approximate retirement year in the fund's name;
thereafter, the fund will seek total return through a combination of current
income and capital appreciation.
MFS Lifetime 2030 Fund
The fund seeks a high level of total return consistent with its asset
allocation until the approximate retirement year in the fund's name;
thereafter, the fund will seek total return through a combination of current
income and capital appreciation.
MFS Lifetime 2040 Fund
The fund seeks a high level of total return consistent with its asset
allocation until the approximate retirement year in the fund's name;
thereafter, the fund will seek total return through a combination of current
income and capital appreciation.
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.
TABLE OF CONTENTS
----------------------------------------------------
LETTER FROM THE CEO 1
----------------------------------------------------
PORTFOLIO COMPOSITION 2
----------------------------------------------------
MANAGEMENT REVIEW 4
----------------------------------------------------
PERFORMANCE SUMMARY 6
----------------------------------------------------
EXPENSE TABLES 12
----------------------------------------------------
PORTFOLIO OF INVESTMENTS 16
----------------------------------------------------
FINANCIAL STATEMENTS 19
----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 28
----------------------------------------------------
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 36
----------------------------------------------------
TRUSTEES AND OFFICERS 37
----------------------------------------------------
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT 39
----------------------------------------------------
PROXY VOTING POLICIES AND INFORMATION 39
----------------------------------------------------
QUARTERLY PORTFOLIO DISCLOSURE 39
----------------------------------------------------
FEDERAL TAX INFORMATION 39
----------------------------------------------------
CONTACT INFORMATION BACK COVER
LETTER FROM THE CEO
[Photo of Robert J. Manning]
Dear Shareholders,
It has been said that change is the only constant in life. As investors have
seen, that theme is still accurate today as we recently have experienced
shifting economic cycles because of natural disasters and political
instability around the globe.
Markets worldwide have fluctuated in the past year as devastating hurricanes
had a dramatic effect on the international economy, particularly on oil
prices. We witnessed political unrest in the Middle East, highlighted by
instability in Iraq, and in Africa, the usually stable Nigeria also
experienced violence. As a result, energy prices have bounced up and down,
with crude oil prices at one point topping a record $70 per barrel.
Such cycles are not uncommon and in fact have almost become the norm in our
everyday lives. What does all of this mean to you as an investor? In times
like these, it helps to know that you're working with a seasoned investment
professional who has experience to guide you through difficult times. At
MFS(R), we believe our investment management team has the knowledge and
confidence to navigate through difficult cycles and at the same time see
through adversity to find investment opportunities for our clients and
shareholders.
Our investment management process, honed over 80 years, combines a unique
concept of teamwork with our unwavering focus on the long term. We firmly
believe that the best way to realize long-term financial goals - be it a
college education, a comfortable retirement, or a secure family legacy - is to
follow a three-pronged approach that focuses on longer time horizons. Allocate
holdings across the major asset classes - including stocks, bonds, and cash.
Diversify within each class to take advantage of different market segments and
investing styles. Rebalance assets regularly to maintain a desired asset
allocation. Of course, these strategies cannot guarantee a profit or protect
against a loss. This long-term approach requires diligence and patience, two
traits that in our experience are essential to capitalizing on the many
opportunities the financial markets can offer - through both up and down
economic cycles.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management(R)
June 15, 2006
The opinions expressed in this letter are those of MFS, and no forecasts can
be guaranteed.
PORTFOLIO COMPOSITION
MFS Lifetime Retirement Income Fund
PORTFOLIO TARGET ALLOCATION
U.S. Bond Funds 70.0%
U.S. Stock Funds 20.0%
Money Market Funds 10.0%
PORTFOLIO ACTUAL ALLOCATION
U.S. Bond Funds 70.8%
U.S. Stock Funds 20.2%
Money Market Funds 10.1%
Cash & Other Net Assets -1.1%
PORTFOLIO HOLDINGS
MFS Limited Maturity Fund 20.2%
------------------------------------------------
MFS Intermediate Investment Grade
Bond Fund 15.2%
------------------------------------------------
MFS Money Market Fund 10.1%
------------------------------------------------
MFS Inflation-Adjusted Bond Fund 10.1%
------------------------------------------------
MFS Government Securities Fund 10.1%
------------------------------------------------
MFS Floating Rate High Income Fund 10.1%
------------------------------------------------
MFS Value Fund 10.1%
------------------------------------------------
MFS Research Fund 10.1%
------------------------------------------------
MFS Research Bond Fund 5.1%
------------------------------------------------
Cash & Other Net Assets -1.1%
------------------------------------------------
MFS Lifetime 2010 Fund
PORTFOLIO TARGET ALLOCATION
U.S. Bond Funds 52.3%
U.S. Stock Funds 33.3%
Money Market Funds 10.0%
International Stock Funds 4.4%
PORTFOLIO ACTUAL ALLOCATION
U.S. Bond Funds 52.5%
U.S. Stock Funds 33.4%
Money Market Funds 10.0%
International Stock Funds 4.4%
Cash & Other Net Assets -0.3%
PORTFOLIO HOLDINGS
MFS Limited Maturity Fund 20.1%
------------------------------------------------
MFS Intermediate Investment Grade
Bond Fund 15.0%
------------------------------------------------
MFS Value Fund 14.5%
------------------------------------------------
MFS Research Fund 14.5%
------------------------------------------------
MFS Government Securities Fund 10.0%
------------------------------------------------
MFS Money Market Fund 10.0%
------------------------------------------------
MFS Research Bond Fund 5.0%
------------------------------------------------
MFS Strategic Growth Fund 4.4%
------------------------------------------------
MFS Research International Fund 4.4%
------------------------------------------------
MFS Floating Rate High Income Fund 1.2%
------------------------------------------------
MFS Inflation-Adjusted Bond Fund 1.2%
------------------------------------------------
Cash & Other Net Assets -0.3%
------------------------------------------------
MFS Lifetime 2020 Fund
PORTFOLIO TARGET ALLOCATION
U.S. Bond Funds 58.9%
U.S. Stock Funds 21.7%
International Stock Funds 18.8%
Money Market Funds 0.6%
PORTFOLIO ACTUAL ALLOCATION
U.S. Bond Funds 58.9%
U.S. Stock Funds 21.8%
International Stock Funds 18.9%
Money Market Funds 0.6%
Cash & Other Net Assets -0.2%
PORTFOLIO HOLDINGS
MFS Value Fund 15.0%
------------------------------------------------
MFS Stategic Growth Fund 14.5%
------------------------------------------------
MFS Research International Fund 14.5%
------------------------------------------------
MFS Research Fund 10.6%
------------------------------------------------
MFS Research Bond Fund 10.0%
------------------------------------------------
MFS Mid Cap Growth Fund 9.4%
------------------------------------------------
MFS Mid Cap Value Fund 9.4%
------------------------------------------------
MFS Government Securities Fund 5.6%
------------------------------------------------
MFS High Income Fund 5.0%
------------------------------------------------
MFS International New Discovery Fund 4.4%
------------------------------------------------
MFS Intermediate Investment Grade
Bond Fund 1.2%
------------------------------------------------
MFS Money Market Fund 0.6%
------------------------------------------------
Cash & Other Net Assets -0.2%
------------------------------------------------
PORTFOLIO COMPOSITION
MFS Lifetime 2030 Fund
PORTFOLIO TARGET ALLOCATION
U.S. Stock Funds 78.9%
International Stock Funds 20.0%
U.S. Bond Funds 1.1%
PORTFOLIO ACTUAL ALLOCATION
U.S. Stock Funds 79.3%
International Stock Funds 20.2%
U.S. Bond Funds 1.2%
Cash & Other Net Assets -0.7%
PORTFOLIO HOLDINGS
MFS Strategic Growth Fund 19.8%
------------------------------------------------
MFS Value Fund 15.1%
------------------------------------------------
MFS Mid Cap Growth Fund 14.8%
------------------------------------------------
MFS Mid Cap Value Fund 14.8%
------------------------------------------------
MFS Research International Fund 10.4%
------------------------------------------------
MFS Research Fund 10.1%
------------------------------------------------
MFS International New Discovery Fund 9.8%
------------------------------------------------
MFS New Discovery Fund 4.7%
------------------------------------------------
MFS Research Bond Fund 0.6%
------------------------------------------------
MFS Government Securities Fund 0.3%
------------------------------------------------
MFS High Income Fund 0.3%
------------------------------------------------
Cash & Other Net Assets -0.7%
------------------------------------------------
MFS Lifetime 2040 Fund
PORTFOLIO TARGET ALLOCATION
U.S. Stock Funds 80.0%
International Stock Funds 20.0%
PORTFOLIO ACTUAL ALLOCATION
U.S. Stock Funds 80.6%
International Stock Funds 20.2%
Cash & Other Net Assets -0.8%
PORTFOLIO HOLDINGS
MFS Strategic Growth Fund 20.2%
------------------------------------------------
MFS Value Fund 15.1%
------------------------------------------------
MFS Mid Cap Growth Fund 15.1%
------------------------------------------------
MFS Mid Cap Value Fund 15.1%
------------------------------------------------
MFS International New Discovery Fund 10.1%
------------------------------------------------
MFS Research International Fund 10.1%
------------------------------------------------
MFS Research Fund 10.1%
------------------------------------------------
MFS New Discovery Fund 5.0%
------------------------------------------------
Cash & Other Net Assets -0.8%
------------------------------------------------
From time to time "Cash & Other Net Assets" may be negative due to timing of
cash receipts.
Percentages are based on net assets as of 4/30/06.
The portfolios are actively managed, and current holdings may be different.
MANAGEMENT REVIEW
MFS LIFETIME RETIREMENT INCOME FUND
SUMMARY OF RESULTS
For the period ended April 30, 2006, Class A shares of the MFS Lifetime
Retirement Income Fund provided a total return of 2.27%, at net asset value. In
comparison, the fund's benchmark, the Lehman Brothers U.S. Aggregate Bond
Index, returned -0.54%. The fund's other benchmark, a blended benchmark (MFS
Lifetime Retirement Income Fund Custom Blend) comprised at period end of 70%
Lehman Brothers U.S. Aggregate Bond Index, 20% Standard & Poor's 500 Stock
Index, and 10% Lehman Brothers Three-Month Treasury Bill Index, returned 1.60%.
CONTRIBUTORS TO PERFORMANCE
During the period the fund benefited from its allocation to equity funds. The
major contributors to performance relative to the blended benchmark over the
period were our investments in large capitalization core and value funds. Our
positions in the MFS Value Fund and MFS Research Fund led to positive relative
results. Other funds that contributed to relative results included the MFS
Floating Rate High Income Fund and the MFS Limited Maturity Fund, both of which
outperformed the broad fixed income market, as measured by the Lehman Brothers
U.S. Aggregate Bond Index, as interest rates rose during the period.
DETRACTORS FROM PERFORMANCE
The primary detractors from relative performance over the period were our
allocations to fixed income funds, as equity markets outperformed fixed income
and cash markets. Our positioning in the MFS Inflation-Adjusted Bond Fund, a
longer duration(d) fund, hurt results as interest rates rose during the period.
MFS LIFETIME 2010 FUND
SUMMARY OF RESULTS
For the period ended April 30, 2006, Class A shares of the MFS Lifetime 2010
Fund provided a total return of 4.67%, at net asset value. In comparison, the
fund's benchmark, the Lehman Brothers U.S. Aggregate Bond Index, returned
- -0.54%. The fund's other benchmark, a blended benchmark (MFS Lifetime Fund 2010
Custom Blend) comprised at period end of 52% Lehman Brothers U.S. Aggregate
Bond Index, 33.5% Standard & Poor's 500 Stock Index, 4.5% MSCI EAFE Index, and
10% Lehman Brothers Three-Month Treasury Bill Index, returned 3.88%.
CONTRIBUTORS TO PERFORMANCE
During the period the fund benefited from its allocation to equity funds. The
major contributors to performance relative to the blended benchmark over the
period were our investments in large capitalization growth, value, core, and
particularly international funds. Our positions in the MFS Strategic Growth
Fund, MFS Value Fund, MFS Research Fund, and MFS Research International Fund
led to positive relative results. Other funds that contributed to relative
results included the MFS Floating Rate High Income Fund and the MFS Limited
Maturity Fund, both of which outperformed the broad fixed income market, as
measured by the Lehman Brothers U.S. Aggregate Bond Index, as interest rates
rose during the period.
DETRACTORS FROM PERFORMANCE
The primary detractors from relative performance over the period were our
allocations to fixed income funds, as equity markets outperformed fixed income
and cash markets. Our positioning in the MFS Inflation-Adjusted Bond Fund, a
longer duration fund, hurt results as interest rates rose during the period.
MFS LIFETIME 2020 FUND
SUMMARY OF RESULTS
For the period ended April 30, 2006, Class A shares of the MFS Lifetime 2020
Fund provided a total return of 10.14%, at net asset value. In comparison, the
fund's benchmark, the Standard & Poor's 500 Stock Index, returned 8.87%. The
fund's other benchmark, a blended benchmark (MFS Lifetime Fund 2020 Custom
Blend) comprised at period end of 59% Standard & Poor's 500 Stock Index, 19%
MSCI EAFE Index, 21.5% Lehman Brothers U.S. Aggregate Bond Index, and 0.5%
Lehman Brothers Three-Month Treasury Bill Index, returned 9.00%.
CONTRIBUTORS TO PERFORMANCE
During the period the fund benefited from its allocation to equity funds. The
major contributors to performance relative to the blended benchmark over the
period were our investments in international funds. Our positions in the MFS
Research International Fund and the MFS International New Discovery Fund were
the largest contributors to relative results. Performance of international
funds was aided by the depreciation of the U.S. dollar relative to foreign
currencies over the time period. Other equity funds that added to results
included the MFS Value Fund, MFS Mid Cap Growth Fund, and the MFS Mid Cap Value
Fund.
Management review - continued
DETRACTORS FROM PERFORMANCE
The primary detractor from relative performance over the period was our
positioning in fixed income funds that underperformed the broad equity markets.
MFS LIFETIME 2030 FUND
SUMMARY OF RESULTS
For the period ended April 30, 2006, Class A shares of the MFS Lifetime 2030
Fund provided a total return of 12.73%, at net asset value. In comparison, the
fund's benchmark, the Standard & Poor's 500 Stock Index, returned 8.87%. The
fund's other benchmark, a blended benchmark (MFS Lifetime Fund 2030 Custom
Blend) comprised at period end of 79% Standard & Poor's 500 Stock Index, 20%
MSCI EAFE Index, and 1.00% Lehman Brothers U.S. Aggregate Bond Index, returned
11.08%.
CONTRIBUTORS TO PERFORMANCE
The major contributors to performance relative to the blended benchmark over
the period were the fund's investments in international funds. The fund's
allocations to MFS Research International Fund and MFS International New
Discovery Fund bolstered relative results. Performance of international funds
was aided by the depreciation of the U.S. dollar relative to foreign currencies
over the time period.
DETRACTORS FROM PERFORMANCE
Detractors from relative performance included equity funds that underperformed
their respective segments of the market. Although these funds had positive
absolute returns, on a relative basis they held back performance. These funds
included MFS Research Fund, MFS Mid Cap Value Fund, and MFS Strategic Growth
Fund.
MFS LIFETIME 2040 FUND
SUMMARY OF RESULTS
For the period ended April 30, 2006, Class A shares of the MFS Lifetime 2040
Fund provided a total return of 12.76%, at net asset value. In comparison, the
fund's benchmark, the Standard & Poor's 500 Stock Index, returned 8.87%. The
fund's other benchmark, a blended benchmark (MFS Lifetime Fund 2040 Custom
Blend) comprised at period end of 80% Standard & Poor's 500 Stock Index and 20%
MSCI EAFE Index, returned 11.14%.
CONTRIBUTORS TO PERFORMANCE
Major contributors to performance relative to the blended benchmark over the
period were the fund's investments in international funds. The fund's
allocations to MFS Research International Fund and MFS International New
Discovery Fund were the largest contributors to relative results. Performance
of international funds was aided by the depreciation of the U.S. dollar
relative to foreign currencies over the time period.
DETRACTORS FROM PERFORMANCE
Detractors from relative performance included equity funds that underperformed
their respective segments of the market. Although these funds had positive
absolute returns, on a relative basis they held back performance. These funds
included MFS Research Fund, MFS Mid Cap Value Fund, and MFS Strategic Growth
Fund.
Respectfully,
Joseph C. Flaherty, Jr.
Portfolio Manager
(d) Duration is a measure of how much a bond's price is likely to fluctuate
with general changes in interest rates, e.g., if rates rise 1.00%, a bond
with a 5-year duration is likely to lose about 5.00% of its value.
The views expressed in this report are those of the portfolio manager only
through the end of the period of the report as stated on the cover and do not
necessarily reflect the views of MFS or any other person in the MFS
organization. These views are subject to change at any time based on market
and other conditions, and MFS disclaims any responsibility to update such
views. These views may not be relied upon as investment advice or an
indication of trading intent on behalf of any MFS portfolio. References to
specific securities are not recommendations of such securities, and may not be
representative of any MFS portfolio's current or future investments.
The portfolios are actively managed, and current holdings may be different.
PERFORMANCE SUMMARY THROUGH 4/30/06
The following charts illustrate the historical performance of each fund's
Class A shares in comparison to its benchmarks. 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. The performance of other share classes will be
greater than or less than that of the class depicted below. Benchmark
comparisons are unmanaged; do not reflect sales charges, commissions or
expenses; and cannot be invested in directly. (See Notes to Performance
Summary.)
PERFORMANCE DATA SHOWN REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF
FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE FLUCTUATE SO YOUR
SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST; CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN QUOTED. FOR MOST RECENT MONTH-END
PERFORMANCE, PLEASE VISIT MFS.COM. (FOR THE MOST RECENT MONTH-END PERFORMANCE
FOR CLASS I SHARES CALL 1-888-808-6374.) 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.
MFS LIFETIME RETIREMENT INCOME FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
MFS Lifetime
Retirement Income Lehman Brothers MFS Lifetime
Fund Custom U.S. Aggregate Retirement Income
Blend Bond Index Fund -- Class A
9/05 $10,000 $10,000 $ 9,500
4/06 10,160 9,946 9,639
TOTAL RETURNS THROUGH 4/30/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date Life (t)
- --------------------------------------------------------------------------
A 9/29/05 2.27%
- --------------------------------------------------------------------------
B 9/29/05 1.88%
- --------------------------------------------------------------------------
C 9/29/05 1.88%
- --------------------------------------------------------------------------
I 9/29/05 2.48%
- --------------------------------------------------------------------------
R1 9/29/05 1.82%
- --------------------------------------------------------------------------
R2 9/29/05 2.03%
- --------------------------------------------------------------------------
R3 9/29/05 2.09%
- --------------------------------------------------------------------------
R4 9/29/05 2.24%
- --------------------------------------------------------------------------
R5 9/29/05 2.42%
- --------------------------------------------------------------------------
AVERAGE ANNUAL
Comparative benchmarks
- --------------------------------------------------------------------------
Lehman Brothers U.S. Aggregate Bond Index (f) -0.54%
- --------------------------------------------------------------------------
MFS Lifetime Retirement Income Fund Custom Blend (f)* 1.60%
- --------------------------------------------------------------------------
AVERAGE ANNUAL WITH SALES CHARGE
Share class
- --------------------------------------------------------------------------
A -3.61%
With Initial Sales Charge (5.75%)
- --------------------------------------------------------------------------
B -2.12%
With CDSC (Declining over six years from 4% to 0%)
- --------------------------------------------------------------------------
C 0.88%
With CDSC (1% for 12 months)
- --------------------------------------------------------------------------
Class I, R1, R2, R3, R4 and R5 shares do not have a sales charge. Please see
Notes to Performance Summary for more details.
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(t) For the period from the commencement of the fund's investment operations,
September 29, 2005 through the stated period end.
* The weights of the components of the blended benchmark (MFS Income Fund
Custom Blended Index) are 70% Lehman Brothers U.S. Aggregate Bond Index,
20% Standard & Poor's 500 Stock Index, and 10% Lehman Brothers Three-Month
Treasury Bill Index.
Performance Summary - continued
MFS LIFETIME 2010 FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
MFS Lifetime Lehman Brothers MFS Lifetime
Fund 2010 U.S. Aggregate 2010 Fund --
Custom Blend Bond Index Class A
9/05 $ 9,425 $10,000 $10,000
4/06 9,865 9,946 10,388
TOTAL RETURNS THROUGH 4/30/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date Life (t)
- --------------------------------------------------------------------------
A 9/29/05 4.67%
- --------------------------------------------------------------------------
B 9/29/05 4.32%
- --------------------------------------------------------------------------
C 9/29/05 4.28%
- --------------------------------------------------------------------------
I 9/29/05 4.94%
- --------------------------------------------------------------------------
R1 9/29/05 4.26%
- --------------------------------------------------------------------------
R2 9/29/05 4.45%
- --------------------------------------------------------------------------
R3 9/29/05 4.47%
- --------------------------------------------------------------------------
R4 9/29/05 4.71%
- --------------------------------------------------------------------------
R5 9/29/05 4.81%
- --------------------------------------------------------------------------
AVERAGE ANNUAL
Comparative benchmarks
- --------------------------------------------------------------------------
Lehman Brothers U.S. Aggregate Bond Index (f) -0.54%
- --------------------------------------------------------------------------
MFS Lifetime Fund 2010 Custom Blend (f)* 3.88%
- --------------------------------------------------------------------------
AVERAGE ANNUAL WITH SALES CHARGE
Share class
- --------------------------------------------------------------------------
A -1.35%
With Initial Sales Charge (5.75%)
- --------------------------------------------------------------------------
B 0.32%
With CDSC (Declining over six years from 4% to 0%)
- --------------------------------------------------------------------------
C 3.28%
With CDSC (1% for 12 months)
- --------------------------------------------------------------------------
Class I, R1, R2, R3, R4 and R5 shares do not have a sales charge. Please see
Notes to Performance Summary for more details.
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(t) For the period from the commencement of the fund's investment operations,
September 29, 2005 through the stated period end.
* The weights of the components of the blended benchmark (MFS Fund 2010
Custom Blended Index) are designed to change systematically over time on a
preset schedule. The table below depicts the individual component weights
(in percent) at the beginning and at the end of the reporting period:
10/31/2005 4/30/2006
Lehman Brothers U.S. Aggregate Bond Index 50.00 52.00
Standard & Poor's 500 Stock Index 35.00 33.50
Lehman Brothers Three-Month Treasury Bill Index 10.00 10.00
MSCI EAFE Index 5.00 4.50
Performance Summary - continued
MFS LIFETIME 2020 FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
MFS Lifetime Standard & MFS Lifetime
Fund 2020 Poor's 500 2020 Fund --
Custom Blend Stock Index Class A
9/05 $ 9,425 $ 10,000 $10,000
4/06 10,380 10,887 10,900
TOTAL RETURNS THROUGH 4/30/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date Life (t)
- --------------------------------------------------------------------------
A 9/29/05 10.14%
- --------------------------------------------------------------------------
B 9/29/05 9.71%
- --------------------------------------------------------------------------
C 9/29/05 9.79%
- --------------------------------------------------------------------------
I 9/29/05 10.38%
- --------------------------------------------------------------------------
R1 9/29/05 9.68%
- --------------------------------------------------------------------------
R2 9/29/05 9.97%
- --------------------------------------------------------------------------
R3 9/29/05 9.99%
- --------------------------------------------------------------------------
R4 9/29/05 10.24%
- --------------------------------------------------------------------------
R5 9/29/05 10.35%
- --------------------------------------------------------------------------
AVERAGE ANNUAL
Comparative benchmarks
- --------------------------------------------------------------------------
Standard & Poor's 500 Stock Index (f) 8.87%
- --------------------------------------------------------------------------
MFS Lifetime Fund 2020 Custom Blend (f)* 9.00%
- --------------------------------------------------------------------------
AVERAGE ANNUAL WITH SALES CHARGE
Share class
- --------------------------------------------------------------------------
A 3.80%
With Initial Sales Charge (5.75%)
- --------------------------------------------------------------------------
B 5.71%
With CDSC (Declining over six years from 4% to 0%)
- --------------------------------------------------------------------------
C 8.79%
With CDSC (1% for 12 months)
- --------------------------------------------------------------------------
Class I, R1, R2, R3, R4 and R5 shares do not have a sales charge. Please see
Notes to Performance Summary for more details.
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(t) For the period from the commencement of the fund's investment operations,
September 29, 2005 through the stated period end.
* The weights of the components of the blended benchmark (MFS Fund 2020
Custom Blended Index) are designed to change systematically over time on a
preset schedule. The table below depicts the individual component weights
(in percent) at the beginning and at the end of the reporting period:
10/31/2005 4/30/2006
Standard & Poor's 500 Stock Index 60.00 59.00
MSCI EAFE Index 20.00 19.00
Lehman Brothers U.S. Aggregate Bond Index 20.00 21.50
Lehman Brothers Three-Month Treasury Bill Index 0.00 0.50
Performance Summary - continued
MFS LIFETIME 2030 FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
MFS Lifetime Standard & MFS Lifetime
Fund 2030 Poor's 500 2030 Fund --
Custom Blend Stock Index Class A
9/05 $ 9,425 $10,000 $10,000
4/06 10,625 10,887 11,108
TOTAL RETURNS THROUGH 4/30/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date Life (t)
- --------------------------------------------------------------------------
A 9/29/05 12.73%
- --------------------------------------------------------------------------
B 9/29/05 12.36%
- --------------------------------------------------------------------------
C 9/29/05 12.39%
- --------------------------------------------------------------------------
I 9/29/05 12.99%
- --------------------------------------------------------------------------
R1 9/29/05 12.29%
- --------------------------------------------------------------------------
R2 9/29/05 12.49%
- --------------------------------------------------------------------------
R3 9/29/05 12.56%
- --------------------------------------------------------------------------
R4 9/29/05 12.72%
- --------------------------------------------------------------------------
R5 9/29/05 12.97%
- --------------------------------------------------------------------------
AVERAGE ANNUAL
Comparative benchmarks
- --------------------------------------------------------------------------
Standard & Poor's 500 Stock Index (f) 8.87%
- --------------------------------------------------------------------------
MFS Lifetime Fund 2030 Custom Blend (f)* 11.08%
- --------------------------------------------------------------------------
AVERAGE ANNUAL WITH SALES CHARGE
Share class
- --------------------------------------------------------------------------
A 6.25%
With Initial Sales Charge (5.75%)
- --------------------------------------------------------------------------
B 8.36%
With CDSC (Declining over six years from 4% to 0%)
- --------------------------------------------------------------------------
C 11.39%
With CDSC (1% for 12 months)
- --------------------------------------------------------------------------
Class I, R1, R2, R3, R4 and R5 shares do not have a sales charge. Please see
Notes to Performance Summary for more details.
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(t) For the period from the commencement of the fund's investment operations,
September 29, 2005 through the stated period end.
* The weights of the components of the blended benchmark (MFS Fund 2030
Custom Blended Index) are designed to change systematically over time on a
preset schedule. The table below depicts the individual component weights
(in percent) at the beginning and at the end of the reporting period:
10/31/2005 4/30/2006
Standard & Poor's 500 Stock Index 80.00 79.00
MSCI EAFE Index 20.00 20.00
Lehman Brothers U.S. Aggregate Bond Index 0.00 1.00
Performance Summary - continued
MFS LIFETIME 2040 FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
2040
MFS Lifetime Standard & MFS Lifetime
Fund 2040 Poor's 500 2040 Fund --
Custom Blend Stock Index Class A
9/05 $ 9,425 $10,000 $10,000
4/06 10,628 10,887 11,114
TOTAL RETURNS THROUGH 4/30/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date Life (t)
- --------------------------------------------------------------------------
A 9/29/05 12.76%
- --------------------------------------------------------------------------
B 9/29/05 12.45%
- --------------------------------------------------------------------------
C 9/29/05 12.38%
- --------------------------------------------------------------------------
I 9/29/05 13.01%
- --------------------------------------------------------------------------
R1 9/29/05 12.31%
- --------------------------------------------------------------------------
R2 9/29/05 12.61%
- --------------------------------------------------------------------------
R3 9/29/05 12.70%
- --------------------------------------------------------------------------
R4 9/29/05 12.84%
- --------------------------------------------------------------------------
R5 9/29/05 12.99%
- --------------------------------------------------------------------------
AVERAGE ANNUAL
Comparative benchmarks
- --------------------------------------------------------------------------
Standard & Poor's 500 Stock Index (f) 8.87%
- --------------------------------------------------------------------------
MFS Lifetime Fund 2040 Custom Blend (f)* 11.14%
- --------------------------------------------------------------------------
AVERAGE ANNUAL WITH SALES CHARGE
Share class
- --------------------------------------------------------------------------
A 6.28%
With Initial Sales Charge (5.75%)
- --------------------------------------------------------------------------
B 8.45%
With CDSC (Declining over six years from 4% to 0%)
- --------------------------------------------------------------------------
C 11.38%
With CDSC (1% for 12 months)
- --------------------------------------------------------------------------
Class I, R1, R2, R3, R4 and R5 shares do not have a sales charge. Please see
Notes to Performance Summary for more details.
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(t) For the period from the commencement of the fund's investment operations,
September 29, 2005 through the stated period end.
* The weights of the components of the blended benchmark (MFS Fund 2040
Custom Blended Index) are 80% Standard & Poor's 500 Stock Index and 20%
MSCI EAFE Index.
Performance Summary - continued
INDEX DEFINITIONS
Lehman Brothers Three-Month Treasury Bill Index - derived from secondary
market Treasury bill rates published by the Federal Reserve Bank.
Lehman Brothers U.S. Aggregate Bond Index - measures the U.S. investment
grade, fixed rate bond market, with index components for government and
corporate securities, mortgage pass-through securities, and asset-backed
securities.
MSCI EAFE (Europe, Australasia, Far East) Index - a market capitalization
index that is designed to measure developed market equity performance,
excluding the U.S. & Canada.
Standard & Poor's 500 Stock Index - a capitalization-weighted index of 500
widely held equity securities, designed to measure broad U.S. equity
performance.
It is not possible to invest directly in an index.
NOTES TO PERFORMANCE SUMMARY
Class I shares are only available to certain eligible investors, and Class R1,
R2, R3, R4, and R5 shares are only available to certain retirement plans.
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
Each portfolio is a "portfolio of portfolios", meaning that the portfolio
seeks to achieve its objective by investing the majority of its assets in
other MFS mutual portfolios, referred to as underlying portfolios. The risks
listed below are associated with the underlying portfolios. Stock markets are
volatile and can decline due to adverse issuer, political, regulatory or
economic conditions. The value of the portfolio's equity investments will
fluctuate in response to many factors including company specific factors as
well as general market conditions. Foreign investments can be more volatile
than U.S. investments. Investing in emerging markets can involve risks in
addition to those generally associated with investing in more developed
foreign markets. The portfolio's yield and share prices change daily based on
the credit quality of its investments and changes in interest rates. In
general, the value of debt securities will decline when interest rates rise
and will increase when interest rates fall. Debt securities with longer
maturity dates will be subject to greater price fluctuations than those with
shorter maturities. Derivatives involve risks different from, and greater
than, those of the underlying indicator's in whose value the derivative is
based. The value of the derivative can move in unexpected ways and result in
unanticipated losses and increased volatility if the value of the underlying
indicator(s) does not move in the direction or the extent anticipated. Lower
quality debt securities involve substantially greater risk of default and
their value can decline significantly over time. When you sell your shares,
they may be worth more or less than the amount you paid for them.
Please see the prospectus for further information regarding these and other
risk considerations.
EXPENSE TABLES
FUND EXPENSES BORNE BY THE SHAREHOLDERS DURING THE PERIOD,
NOVEMBER 1, 2005 THROUGH APRIL 30, 2006.
As a shareholder of the funds, 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. These examples are intended to help you
understand your ongoing costs (in dollars) of investing in the funds and to
compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of
the period and held for the entire period November 1, 2005 through April 30,
2006.
ACTUAL EXPENSES
The first line for each share class in the following tables 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 following tables provides
information about hypothetical account values and hypothetical expenses based
on each fund's actual expense ratio and an assumed rate of return of 5% per
year before expenses, which is not each 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 each 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.
In addition to the fees and expenses which each fund bears directly, each fund
indirectly bears a pro rata share of the fees and expenses of the underlying
funds in which each fund invests. Because the underlying funds have varied
expenses and fee levels and each fund may own different proportions of the
underlying funds at different times, the amount of fees and expenses incurred
indirectly by each fund will vary. If these transactional and indirect costs
were included, your costs would have been higher.
Expense Tables - continued
MFS LIFETIME RETIREMENT INCOME FUND
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period(p)
Share Expense Account Value Account Value 11/01/05-
Class Ratio 11/01/05 4/30/06 4/30/06
- --------------------------------------------------------------------------------
Actual 0.45% $1,000.00 $1,027.40 $2.26
A ------------------------------------------------------------------------
Hypothetical (h) 0.45% $1,000.00 $1,022.56 $2.26
- --------------------------------------------------------------------------------
Actual 1.10% $1,000.00 $1,024.10 $5.52
B -------------------------------------------------------------------------
Hypothetical (h) 1.10% $1,000.00 $1,019.34 $5.51
- --------------------------------------------------------------------------------
Actual 1.10% $1,000.00 $1,024.10 $5.52
C ------------------------------------------------------------------------
Hypothetical (h) 1.10% $1,000.00 $1,019.34 $5.51
- --------------------------------------------------------------------------------
Actual 0.10% $1,000.00 $1,029.20 $0.50
I ------------------------------------------------------------------------
Hypothetical (h) 0.10% $1,000.00 $1,024.30 $0.50
- --------------------------------------------------------------------------------
Actual 1.20% $1,000.00 $1,023.60 $6.02
R1 ------------------------------------------------------------------------
Hypothetical (h) 1.20% $1,000.00 $1,018.84 $6.01
- --------------------------------------------------------------------------------
Actual 0.85% $1,000.00 $1,025.40 $4.27
R2 ------------------------------------------------------------------------
Hypothetical (h) 0.85% $1,000.00 $1,020.58 $4.26
- --------------------------------------------------------------------------------
Actual 0.75% $1,000.00 $1,025.90 $3.77
R3 ------------------------------------------------------------------------
Hypothetical (h) 0.75% $1,000.00 $1,021.08 $3.76
- --------------------------------------------------------------------------------
Actual 0.50% $1,000.00 $1,027.20 $2.51
R4 ------------------------------------------------------------------------
Hypothetical (h) 0.50% $1,000.00 $1,022.32 $2.51
- --------------------------------------------------------------------------------
Actual 0.20% $1,000.00 $1,028.70 $1.01
R5 ------------------------------------------------------------------------
Hypothetical (h) 0.20% $1,000.00 $1,023.80 $1.00
- --------------------------------------------------------------------------------
MFS LIFETIME 2010 FUND
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period(p)
Share Expense Account Value Account Value 11/01/05-
Class Ratio 11/01/05 4/30/06 4/30/06
- --------------------------------------------------------------------------------
Actual 0.45% $1,000.00 $1,050.90 $2.29
A ------------------------------------------------------------------------
Hypothetical (h) 0.45% $1,000.00 $1,022.56 $2.26
- --------------------------------------------------------------------------------
Actual 1.10% $1,000.00 $1,048.40 $5.59
B -------------------------------------------------------------------------
Hypothetical (h) 1.10% $1,000.00 $1,019.34 $5.51
- --------------------------------------------------------------------------------
Actual 1.10% $1,000.00 $1,048.10 $5.59
C ------------------------------------------------------------------------
Hypothetical (h) 1.10% $1,000.00 $1,019.34 $5.51
- --------------------------------------------------------------------------------
Actual 0.10% $1,000.00 $1,053.60 $0.51
I ------------------------------------------------------------------------
Hypothetical (h) 0.10% $1,000.00 $1,024.30 $0.50
- --------------------------------------------------------------------------------
Actual 1.20% $1,000.00 $1,047.80 $6.09
R1 ------------------------------------------------------------------------
Hypothetical (h) 1.20% $1,000.00 $1,018.84 $6.01
- --------------------------------------------------------------------------------
Actual 0.85% $1,000.00 $1,049.70 $4.32
R2 ------------------------------------------------------------------------
Hypothetical (h) 0.85% $1,000.00 $1,020.58 $4.26
- --------------------------------------------------------------------------------
Actual 0.75% $1,000.00 $1,050.00 $3.81
R3 ------------------------------------------------------------------------
Hypothetical (h) 0.75% $1,000.00 $1,021.08 $3.76
- --------------------------------------------------------------------------------
Actual 0.50% $1,000.00 $1,051.30 $2.54
R4 ------------------------------------------------------------------------
Hypothetical (h) 0.50% $1,000.00 $1,022.32 $2.51
- --------------------------------------------------------------------------------
Actual 0.20% $1,000.00 $1,052.30 $1.02
R5 ------------------------------------------------------------------------
Hypothetical (h) 0.20% $1,000.00 $1,023.80 $1.00
- --------------------------------------------------------------------------------
Expense Tables - continued
MFS LIFETIME 2020 FUND
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period(p)
Share Expense Account Value Account Value 11/01/05-
Class Ratio 11/01/05 4/30/06 4/30/06
- --------------------------------------------------------------------------------
Actual 0.45% $1,000.00 $1,111.40 $2.36
A ------------------------------------------------------------------------
Hypothetical (h) 0.45% $1,000.00 $1,022.56 $2.26
- --------------------------------------------------------------------------------
Actual 1.10% $1,000.00 $1,107.10 $5.75
B -------------------------------------------------------------------------
Hypothetical (h) 1.10% $1,000.00 $1,019.34 $5.51
- --------------------------------------------------------------------------------
Actual 1.10% $1,000.00 $1,107.90 $5.75
C ------------------------------------------------------------------------
Hypothetical (h) 1.10% $1,000.00 $1,019.34 $5.51
- --------------------------------------------------------------------------------
Actual 0.10% $1,000.00 $1,112.70 $0.52
I ------------------------------------------------------------------------
Hypothetical (h) 0.10% $1,000.00 $1,024.30 $0.50
- --------------------------------------------------------------------------------
Actual 1.20% $1,000.00 $1,106.80 $6.27
R1 ------------------------------------------------------------------------
Hypothetical (h) 1.20% $1,000.00 $1,018.84 $6.01
- --------------------------------------------------------------------------------
Actual 0.85% $1,000.00 $1,109.70 $4.45
R2 ------------------------------------------------------------------------
Hypothetical (h) 0.85% $1,000.00 $1,020.58 $4.26
- --------------------------------------------------------------------------------
Actual 0.75% $1,000.00 $1,109.90 $3.92
R3 ------------------------------------------------------------------------
Hypothetical (h) 0.75% $1,000.00 $1,021.08 $3.76
- --------------------------------------------------------------------------------
Actual 0.50% $1,000.00 $1,112.50 $2.62
R4 ------------------------------------------------------------------------
Hypothetical (h) 0.50% $1,000.00 $1,022.32 $2.51
- --------------------------------------------------------------------------------
Actual 0.20% $1,000.00 $1,112.40 $1.05
R5 ------------------------------------------------------------------------
Hypothetical (h) 0.20% $1,000.00 $1,023.80 $1.00
- --------------------------------------------------------------------------------
MFS LIFETIME 2030 FUND
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period(p)
Share Expense Account Value Account Value 11/01/05-
Class Ratio 11/01/05 4/30/06 4/30/06
- --------------------------------------------------------------------------------
Actual 0.45% $1,000.00 $1,136.40 $2.38
A ------------------------------------------------------------------------
Hypothetical (h) 0.45% $1,000.00 $1,022.56 $2.26
- --------------------------------------------------------------------------------
Actual 1.10% $1,000.00 $1,133.80 $5.82
B -------------------------------------------------------------------------
Hypothetical (h) 1.10% $1,000.00 $1,019.34 $5.51
- --------------------------------------------------------------------------------
Actual 1.10% $1,000.00 $1,134.10 $5.82
C ------------------------------------------------------------------------
Hypothetical (h) 1.10% $1,000.00 $1,019.34 $5.51
- --------------------------------------------------------------------------------
Actual 0.10% $1,000.00 $1,139.00 $0.53
I ------------------------------------------------------------------------
Hypothetical (h) 0.10% $1,000.00 $1,024.30 $0.50
- --------------------------------------------------------------------------------
Actual 1.20% $1,000.00 $1,133.10 $6.35
R1 ------------------------------------------------------------------------
Hypothetical (h) 1.20% $1,000.00 $1,018.84 $6.01
- --------------------------------------------------------------------------------
Actual 0.85% $1,000.00 $1,133.90 $4.50
R2 ------------------------------------------------------------------------
Hypothetical (h) 0.85% $1,000.00 $1,020.58 $4.26
- --------------------------------------------------------------------------------
Actual 0.75% $1,000.00 $1,134.70 $3.97
R3 ------------------------------------------------------------------------
Hypothetical (h) 0.75% $1,000.00 $1,021.08 $3.76
- --------------------------------------------------------------------------------
Actual 0.50% $1,000.00 $1,136.30 $2.65
R4 ------------------------------------------------------------------------
Hypothetical (h) 0.50% $1,000.00 $1,022.32 $2.51
- --------------------------------------------------------------------------------
Actual 0.20% $1,000.00 $1,138.80 $1.06
R5 ------------------------------------------------------------------------
Hypothetical (h) 0.20% $1,000.00 $1,023.80 $1.00
- --------------------------------------------------------------------------------
Expense Tables - continued
MFS LIFETIME 2040 FUND
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period(p)
Share Expense Account Value Account Value 11/01/05-
Class Ratio 11/01/05 4/30/06 4/30/06
- --------------------------------------------------------------------------------
Actual 0.45% $1,000.00 $1,136.70 $2.38
A ------------------------------------------------------------------------
Hypothetical (h) 0.45% $1,000.00 $1,022.56 $2.26
- --------------------------------------------------------------------------------
Actual 1.10% $1,000.00 $1,134.70 $5.82
B -------------------------------------------------------------------------
Hypothetical (h) 1.10% $1,000.00 $1,019.34 $5.51
- --------------------------------------------------------------------------------
Actual 1.10% $1,000.00 $1,134.00 $5.82
C ------------------------------------------------------------------------
Hypothetical (h) 1.10% $1,000.00 $1,019.34 $5.51
- --------------------------------------------------------------------------------
Actual 0.10% $1,000.00 $1,139.30 $0.53
I ------------------------------------------------------------------------
Hypothetical (h) 0.10% $1,000.00 $1,024.30 $0.50
- --------------------------------------------------------------------------------
Actual 1.20% $1,000.00 $1,133.30 $6.35
R1 ------------------------------------------------------------------------
Hypothetical (h) 1.20% $1,000.00 $1,018.84 $6.01
- --------------------------------------------------------------------------------
Actual 0.85% $1,000.00 $1,135.20 $4.50
R2 ------------------------------------------------------------------------
Hypothetical (h) 0.85% $1,000.00 $1,020.58 $4.26
- --------------------------------------------------------------------------------
Actual 0.75% $1,000.00 $1,136.10 $3.97
R3 ------------------------------------------------------------------------
Hypothetical (h) 0.75% $1,000.00 $1,021.08 $3.76
- --------------------------------------------------------------------------------
Actual 0.50% $1,000.00 $1,137.50 $2.65
R4 ------------------------------------------------------------------------
Hypothetical (h) 0.50% $1,000.00 $1,022.32 $2.51
- --------------------------------------------------------------------------------
Actual 0.20% $1,000.00 $1,139.00 $1.06
R5 ------------------------------------------------------------------------
Hypothetical (h) 0.20% $1,000.00 $1,023.80 $1.00
- --------------------------------------------------------------------------------
(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS - 4/30/06 MFS(R) LIFETIME RETIREMENT INCOME FUND
The Portfolio of Investments is a complete list of all securities owned by your fund.
Mutual Funds - 101.1%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- -------------------------------------------------------------------------------------------------------------------------------
MFS Floating Rate High Income Fund - Class I 20,431 $ 206,558
MFS Government Securities Fund - Class I 22,259 206,786
MFS Inflation-Adjusted Bond Fund - Class I 21,787 207,409
MFS Intermediate Investment Grade Bond Fund - Class I 31,832 310,047
MFS Limited Maturity Fund - Class I 64,990 413,336
MFS Money Market Fund 206,561 206,561
MFS Research Bond Fund - Class I 10,473 103,364
MFS Research Fund - Class I 8,910 206,530
MFS Value Fund - Class I 8,223 206,798
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL MUTUAL FUNDS (IDENTIFIED COST, $2,067,347) $2,067,389
- -------------------------------------------------------------------------------------------------------------------------------
Short-Term Obligations - 2.1%
- -------------------------------------------------------------------------------------------------------------------------------
UBS Finance Delaware LLC, 4.82%, due 5/01/06, at Amortized Cost and Value (y) $ 43,000 $ 43,000
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $2,110,347) $2,110,389
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (3.2)% (65,753)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $2,044,636
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - 4/30/06 MFS(R) LIFETIME 2010 FUND
Mutual Funds - 100.3%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- -------------------------------------------------------------------------------------------------------------------------------
MFS Floating Rate High Income Fund - Class I 2,310 $ 23,354
MFS Government Securities Fund - Class I 21,653 201,157
MFS Inflation-Adjusted Bond Fund - Class I 2,453 23,355
MFS Intermediate Investment Grade Bond Fund - Class I 30,979 301,736
MFS Limited Maturity Fund - Class I 63,257 402,315
MFS Money Market Fund 201,158 201,158
MFS Research Bond Fund - Class I 10,191 100,579
MFS Research Fund - Class I 12,513 290,059
MFS Research International Fund - Class I 4,445 88,901
MFS Strategic Growth Fund - Class I (n) 4,305 88,901
MFS Value Fund - Class I 11,533 290,060
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL MUTUAL FUNDS (IDENTIFIED COST, $1,989,911) $2,011,575
- -------------------------------------------------------------------------------------------------------------------------------
Short-Term Obligations - 8.5% (y)
- -------------------------------------------------------------------------------------------------------------------------------
General Electric Capital Corp., 4.82%, due 5/01/06 $ 14,000 $ 14,000
New Center Asset Trust, 4.82%, due 5/01/06 78,000 78,000
UBS Finance Delaware LLC, 4.82%, due 5/01/06 78,000 78,000
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS, AT AMORTIZED COST AND VALUE $ 170,000
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $2,159,911) $2,181,575
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (8.8)% (177,285)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $2,004,290
- -------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 4/30/06 MFS(R) LIFETIME 2020 FUND
Mutual Funds - 100.2%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- -------------------------------------------------------------------------------------------------------------------------------
MFS Government Securities Fund - Class I 45,982 $ 427,177
MFS High Income Fund - Class I 99,932 382,740
MFS Intermediate Investment Grade Bond Fund - Class I 9,125 88,873
MFS International New Discovery Fund - Class I 12,065 338,304
MFS Mid Cap Growth Fund - Class I (n) 72,686 721,044
MFS Mid Cap Value Fund - Class I 50,921 721,044
MFS Money Market Fund 44,438 44,438
MFS Research Bond Fund - Class I 77,557 765,483
MFS Research Fund - Class I 34,940 809,917
MFS Research International Fund - Class I 55,190 1,103,790
MFS Strategic Growth Fund - Class I (n) 53,452 1,103,784
MFS Value Fund - Class I 45,655 1,148,221
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL MUTUAL FUNDS (IDENTIFIED COST, $7,444,689) $7,654,815
- -------------------------------------------------------------------------------------------------------------------------------
Short-Term Obligations - 1.0%
- -------------------------------------------------------------------------------------------------------------------------------
UBS Finance Delaware LLC, 4.82%, due 5/01/06, at Amortized Cost and Value (y) $ 78,000 $ 78,000
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $7,522,689) $7,732,815
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (1.2)% (94,314)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $7,638,501
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - 4/30/06 MFS(R) LIFETIME 2030 FUND
Mutual Funds - 100.7%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- -------------------------------------------------------------------------------------------------------------------------------
MFS Government Securities Fund - Class I 941 $ 8,742
MFS High Income Fund - Class I 2,282 8,742
MFS International New Discovery Fund - Class I 10,432 292,500
MFS Mid Cap Growth Fund - Class I (n) 44,674 443,162
MFS Mid Cap Value Fund - Class I 31,297 443,160
MFS New Discovery Fund - Class I (n) 7,193 142,136
MFS Research Bond Fund - Class I 1,771 17,483
MFS Research Fund - Class I 12,997 301,276
MFS Research International Fund - Class I 15,499 309,989
MFS Strategic Growth Fund - Class I (n) 28,752 593,737
MFS Value Fund - Class I 17,969 451,909
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL MUTUAL FUNDS (IDENTIFIED COST, $2,899,249) $3,012,836
- -------------------------------------------------------------------------------------------------------------------------------
Short-Term Obligations - 2.0%
- -------------------------------------------------------------------------------------------------------------------------------
UBS Finance Delaware LLC, 4.82%, due 5/01/06, at Amortized Cost and Value (y) $ 61,000 $ 61,000
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $2,960,249) $3,073,836
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (2.7)% (81,152)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $2,992,684
- -------------------------------------------------------------------------------------------------------------------------------
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 4/30/06 MFS(R) LIFETIME 2040 FUND
Mutual Funds - 100.8%
- -------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- -------------------------------------------------------------------------------------------------------------------------------
MFS International New Discovery Fund - Class I 8,861 $ 248,462
MFS Mid Cap Growth Fund - Class I (n) 37,570 372,693
MFS Mid Cap Value Fund - Class I 26,320 372,693
MFS New Discovery Fund - Class I (n) 6,287 124,231
MFS Research Fund - Class I 10,719 248,462
MFS Research International Fund - Class I 12,423 248,462
MFS Strategic Growth Fund - Class I (n) 24,064 496,926
MFS Value Fund - Class I 14,819 372,708
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL MUTUAL FUNDS (IDENTIFIED COST, $2,362,314) $2,484,637
- -------------------------------------------------------------------------------------------------------------------------------
Short-Term Obligations - 2.6%
- -------------------------------------------------------------------------------------------------------------------------------
UBS Finance Delaware LLC, 4.82%, due 5/01/06, at Amortized Cost and Value (y) $ 63,000 $ 63,000
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $2,425,314) $2,547,637
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (3.4)% (82,697)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $2,464,940
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO FOOTNOTES:
(n) Non-income producing security.
(y) The rate shown represents an annualized yield at time of purchase.
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 comprising the total value of the fund.
MFS
LIFETIME MFS MFS MFS MFS
RETIREMENT LIFETIME LIFETIME LIFETIME LIFETIME
AT 4/30/06 INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
Investments, at value (identified cost, $2,110,347,
$2,159,911, $7,522,689, $2,960,249 and $2,425,314,
respectively) $2,110,389 $2,181,575 $7,732,815 $3,073,836 $2,547,637
Cash 777 719 747 347 204
Receivable for investments sold 2,101 -- -- 3,583 --
Receivable for fund shares sold 1,621 31,850 290,037 13,010 28,796
Dividends receivable 6,203 4,275 6,564 137 --
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets $2,121,091 $2,218,419 $8,030,163 $3,090,913 $2,576,637
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions payable $617 $-- $-- $-- $--
Payable for investments purchased 7,668 147,372 326,358 30,687 44,418
Payable for fund shares reacquired -- -- -- -- 371
Payable to affiliates
Investment adviser 30,745 26,801 22,802 27,989 28,892
Shareholder servicing costs 34 53 128 74 70
Distribution and service fees 108 68 291 108 93
Administrative services fee 144 144 144 144 144
Retirement plan administration and services fees 14 16 51 20 12
Payable for independent trustees' compensation 206 355 300 182 206
Accrued expenses and other liabilities 36,919 39,320 41,588 39,025 37,491
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities $76,455 $214,129 $391,662 $98,229 $111,697
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets $2,044,636 $2,004,290 $7,638,501 $2,992,684 $2,464,940
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- ------------------------------------------------------------------------------------------------------------------------------------
Paid-in capital $2,043,243 $1,962,670 $7,377,215 $2,864,519 $2,338,081
Unrealized appreciation (depreciation) on investments 42 21,664 210,126 113,587 122,323
Accumulated net realized gain (loss) on investments 1,002 6,527 38,412 14,578 4,536
Undistributed net investment income 349 13,429 12,748 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets $2,044,636 $2,004,290 $7,638,501 $2,992,684 $2,464,940
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets
Class A $723,677 $467,879 $2,718,238 $686,219 $599,113
Class B 367,363 137,690 1,009,030 381,790 466,069
Class C 378,735 95,719 142,582 114,090 86,066
Class I 51,236 264,441 324,136 700,945 581,555
Class R1 127,277 85,521 548,807 305,875 127,003
Class R2 51,014 90,277 89,710 62,081 56,280
Class R3 240,860 260,854 1,270,621 330,961 323,018
Class R4 53,266 549,488 1,480,197 354,251 169,342
Class R5 51,208 52,421 55,180 56,472 56,494
- ------------------------------------------------------------------------------------------------------------------------------------
Total net assets $2,044,636 $2,004,290 $7,638,501 $2,992,684 $2,464,940
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Assets and Liabilities - continued
MFS
LIFETIME MFS MFS MFS MFS
RETIREMENT LIFETIME LIFETIME LIFETIME LIFETIME
AT 4/30/06 INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
Shares of beneficial interest outstanding
Class A 72,358 45,028 250,487 61,797 53,956
Class B 36,733 13,278 93,240 34,479 42,074
Class C 37,860 9,229 13,168 10,298 7,767
Class I 5,124 25,406 29,811 63,017 52,285
Class R1 12,731 8,249 50,673 27,599 11,459
Class R2 5,102 8,696 8,270 5,596 5,072
Class R3 24,075 25,126 117,188 29,846 29,112
Class R4 5,327 52,901 136,340 31,907 15,247
Class R5 5,121 5,039 5,076 5,079 5,080
- -----------------------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding 204,431 192,952 704,253 269,618 222,052
- -----------------------------------------------------------------------------------------------------------------------------------
Class A shares
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value per share
(net assets/shares of beneficial interest outstanding) $10.00 $10.39 $10.85 $11.10 $11.10
- -----------------------------------------------------------------------------------------------------------------------------------
Offering price per share (100/94.25Xnet asset value per
share) $10.61 $11.02 $11.51 $11.78 $11.78
- -----------------------------------------------------------------------------------------------------------------------------------
Class B shares
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $10.00 $10.37 $10.82 $11.07 $11.08
- -----------------------------------------------------------------------------------------------------------------------------------
Class C shares
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $10.00 $10.37 $10.83 $11.08 $11.08
- -----------------------------------------------------------------------------------------------------------------------------------
Class I shares
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share (net assets/shares of beneficial interest outstanding) $10.00 $10.41 $10.87 $11.12 $11.12
- -----------------------------------------------------------------------------------------------------------------------------------
Class R1 shares
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share (net assets/shares of beneficial interest outstanding) $10.00 $10.37 $10.83 $11.08 $11.08
- -----------------------------------------------------------------------------------------------------------------------------------
Class R2 shares
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share (net assets/shares of beneficial interest outstanding) $10.00 $10.38 $10.85 $11.09 $11.10
- -----------------------------------------------------------------------------------------------------------------------------------
Class R3 shares
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share (net assets/shares of beneficial interest outstanding) $10.00 $10.38 $10.84 $11.09 $11.10
- -----------------------------------------------------------------------------------------------------------------------------------
Class R4 shares
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share (net assets/shares of beneficial interest outstanding) $10.00 $10.39 $10.86 $11.10 $11.11
- -----------------------------------------------------------------------------------------------------------------------------------
Class R5 shares
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share (net assets/shares of beneficial interest outstanding) $10.00 $10.40 $10.87 $11.12 $11.12
- -----------------------------------------------------------------------------------------------------------------------------------
On sales of $50,000 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 STATEMENTS OF OPERATIONS
This is a summary of the investment income your fund earned as well as gains
and (losses) for the period. Fund expenses are spelled out.
MFS
LIFETIME MFS MFS MFS MFS
RETIREMENT LIFETIME LIFETIME LIFETIME LIFETIME
FOR THE PERIOD ENDED 4/30/06 (c) INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
NET INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------------------------------------
Income
Dividends $23,172 $19,989 $30,521 $3,399 $3,333
Interest 1,813 2,014 4,549 2,281 2,061
- -----------------------------------------------------------------------------------------------------------------------------------
Total investment income $24,985 $22,003 $35,070 $5,680 $5,394
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses
Distribution and service fees $3,309 $2,326 $8,250 $3,237 $3,156
Shareholder servicing costs 103 166 378 276 289
Administrative services fee 6,526 6,451 6,529 6,455 6,540
Retirement plan administration and services fees 527 746 2,028 754 645
Independent trustees' compensation 1,051 1,200 1,147 1,027 1,051
Custodian fee 5,577 5,857 7,020 6,868 5,639
Shareholder communications 2,868 3,637 3,997 3,256 3,962
Auditing fees 29,800 29,800 29,800 29,800 29,800
Legal fees 1,726 1,995 2,010 1,996 1,390
Registration fees 31,498 30,289 32,533 32,227 30,047
Miscellaneous 986 4,604 5,496 1,044 3,386
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses $83,971 $87,071 $99,188 $86,940 $85,905
- -----------------------------------------------------------------------------------------------------------------------------------
Fees paid indirectly (23) (14) (32) (65) (9)
- -----------------------------------------------------------------------------------------------------------------------------------
Reduction of expenses by investment adviser (79,695) (83,490) (87,512) (82,391) (81,526)
- -----------------------------------------------------------------------------------------------------------------------------------
Net expenses $4,253 $3,567 $11,644 $4,484 $4,370
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $20,732 $18,436 $23,426 $1,196 $1,024
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis)
Investment transactions $(1,660) $(102) $(3,390) $(602) $(10,446)
- -----------------------------------------------------------------------------------------------------------------------------------
Capital gain distributions from underlying funds 2,824 8,511 69,714 26,512 30,987
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $1,164 $8,409 $66,324 $25,910 $20,541
- -----------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) on investments $42 $21,664 $210,126 $113,587 $122,323
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $1,206 $30,073 $276,450 $139,497 $142,864
- -----------------------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $21,938 $48,509 $299,876 $140,693 $143,888
- -----------------------------------------------------------------------------------------------------------------------------------
(c) For the period from the commencement of the funds' investment operations, September 29, 2005, through April 30, 2006.
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.
MFS
LIFETIME MFS MFS MFS MFS
RETIREMENT LIFETIME LIFETIME LIFETIME LIFETIME
FOR THE PERIOD ENDED 4/30/06 (c) INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
CHANGE IN NET ASSETS
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $20,732 $18,436 $23,426 $1,196 $1,024
Net realized gain (loss) on investments 1,164 8,409 66,324 25,910 20,541
Net unrealized gain (loss) on investments 42 21,664 210,126 113,587 122,323
- -----------------------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $21,938 $48,509 $299,876 $140,693 $143,888
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income
Class A $(6,552) $(781) $(4,841) $(1,295) $(1,878)
Class B (3,895) (359) (4,609) (2,096) (1,753)
Class C (1,999) (284) (1,235) (1,286) (864)
Class I (1,243) (408) (3,274) (2,768) (3,837)
Class R1 (1,217) (271) (650) (692) (663)
Class R2 (1,021) (315) (694) (736) (707)
Class R3 (2,268) (327) (5,359) (1,374) (2,011)
Class R4 (1,134) (3,749) (17,153) (1,464) (1,542)
Class R5 (1,216) (395) (775) (817) (788)
- -----------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A $-- $-- $-- $-- $(94)
Class B -- -- -- -- (94)
Class C -- -- -- -- (49)
Class I -- -- -- -- (186)
Class R1 -- -- -- -- (39)
Class R2 -- -- -- -- (39)
Class R3 -- -- -- -- (104)
Class R4 -- -- -- -- (78)
Class R5 -- -- -- -- (39)
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(20,545) $(6,889) $(38,590) $(12,528) $(14,765)
- -----------------------------------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $2,043,243 $1,962,670 $7,377,215 $2,864,519 $2,335,817
- -----------------------------------------------------------------------------------------------------------------------------------
Total change in net assets $2,044,636 $2,004,290 $7,638,501 $2,992,684 $2,464,940
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
At end of period $2,044,636 $2,004,290 $7,638,501 $2,992,684 $2,464,940
- -----------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income included in net assets at
end of period $349 $13,429 $12,748 $-- $--
- -----------------------------------------------------------------------------------------------------------------------------------
(c) For the period from the commencement of the funds' investment operations, September 29, 2005, through April 30, 2006.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) LIFETIME RETIREMENT INCOME FUND
The financial highlights table is intended to help you understand the fund's financial performance for the past 5 years (or life
of a particular share class, if shorter). 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 share
class (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.
YEAR ENDED 4/30/06 (c)
CLASS A CLASS B CLASS C CLASS I
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.24 $0.20 $0.19 $0.25
Net realized and unrealized gain (loss) on investments (0.02)(g) (0.01)(g) 0.00(w) (0.01)(g)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.22 $0.19 $0.19 $0.24
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.22) $(0.19) $(0.19) $(0.24)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.00 $10.00 $10.00 $10.00
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r) 2.27(n)(t) 1.88(n)(t) 1.88(n)(t) 2.48(n)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f)(h) 14.17(a) 14.82(a) 14.82(a) 13.82(a)
Expenses after expense reductions (f)(h) 0.45(a) 1.10(a) 1.10(a) 0.10(a)
Net investment income 3.87(a) 3.21(a) 3.14(a) 4.24(a)
Portfolio turnover 14 14 14 14
Net assets at end of period (000 Omitted) $724 $367 $379 $51
- -----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 4/30/06 (c)
CLASS R1 CLASS R2 CLASS R3 CLASS R4 CLASS R5
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00 $10.00
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.18 $0.20 $0.20 $0.22 $0.24
Net realized and unrealized gain (loss) on investments 0.00(w) (0.00)(g)(w) 0.01 (0.00)(g)(w) 0.00(w)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.18 $0.20 $0.21 $0.22 $0.24
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.18) $(0.20) $(0.21) $(0.22) $(0.24)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.00 $10.00 $10.00 $10.00 $10.00
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r) 1.82(n) 2.03(n) 2.09(n) 2.24(n) 2.42(n)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f)(h) 15.02(a) 14.72(a) 14.57(a) 14.22(a) 13.92(a)
Expenses after expense reductions (f)(h) 1.20(a) 0.85(a) 0.75(a) 0.50(a) 0.20(a)
Net investment income 3.15(a) 3.49(a) 3.54(a) 3.84(a) 4.14(a)
Portfolio turnover 14 14 14 14 14
Net assets at end of period (000 Omitted) $127 $51 $241 $53 $51
- -----------------------------------------------------------------------------------------------------------------------------------
(a) Annualized.
(c) For the period from the commencement of the fund's investment operations, September 29, 2005, through April 30, 2006.
(d) Per share data are based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly.
(g) 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 fund shares and the amount of per share realized and unrealized gains and losses at such time.
(h) In addition to the fees and expenses which the fund bears directly, the fund indirectly bears a pro rata share of the fees
and expenses of the underlying funds in which the fund invests. Because the underlying funds have varied expense and fee
levels and the fund may own different proportions of the underlying funds at different times, the amount of fees and
expenses incurred directly by the fund will vary.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount was less than $0.01.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) LIFETIME 2010 FUND
The financial highlights table is intended to help you understand the fund's financial performance for the past 5 years (or life
of a particular share class, if shorter). 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 share
class (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.
YEAR ENDED 4/30/06 (c)
CLASS A CLASS B CLASS C CLASS I
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
- --------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.18 $0.14 $0.14 $0.22
Net realized and unrealized gain (loss) on investments 0.29 0.29 0.29 0.27
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.47 $0.43 $0.43 $0.49
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.08) $(0.06) $(0.06) $(0.08)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.39 $10.37 $10.37 $10.41
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r) 4.67(n)(t) 4.32(n)(t) 4.28(n)(t) 4.94(n)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f)(h) 13.57(a) 14.22(a) 14.22(a) 13.22(a)
Expenses after expense reductions (f)(h) 0.45(a) 1.10(a) 1.10(a) 0.10(a)
Net investment income 2.96(a) 2.32(a) 2.33(a) 3.26(a)
Portfolio turnover 3 3 3 3
Net assets at end of period (000 Omitted) $468 $138 $96 $264
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 4/30/06 (c)
CLASS R1 CLASS R2 CLASS R3 CLASS R4 CLASS R5
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00 $10.00
- --------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.13 $0.15 $0.14 $0.22 $0.19
Net realized and unrealized gain (loss) on investments 0.29 0.29 0.31 0.25 0.29
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.42 $0.44 $0.45 $0.47 $0.48
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.05) $(0.06) $(0.07) $(0.08) $(0.08)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.37 $10.38 $10.38 $10.39 $10.40
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r) 4.26(n) 4.45(n) 4.47(n) 4.71(n) 4.81(n)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f)(h) 14.42(a) 14.12(a) 13.97(a) 13.62(a) 13.32(a)
Expenses after expense reductions (f)(h) 1.20(a) 0.85(a) 0.75(a) 0.50(a) 0.20(a)
Net investment income 2.21(a) 2.58(a) 2.71(a) 3.08(a) 3.22(a)
Portfolio turnover 3 3 3 3 3
Net assets at end of period (000 Omitted) $86 $90 $261 $549 $52
- --------------------------------------------------------------------------------------------------------------------------------
(a) Annualized.
(c) For the period from the commencement of the fund's investment operations, September 29, 2005, through April 30, 2006.
(d) Per share data are based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly.
(h) In addition to the fees and expenses which the fund bears directly, the fund indirectly bears a pro rata share of the fees
and expenses of the underlying funds in which the fund invests. Because the underlying funds have varied expense and fee
levels and the fund may own different proportions of the underlying funds at different times, the amount of fees and
expenses incurred directly by the fund will vary.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been lower.
(t) Total returns do not include any applicable sales charges.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) LIFETIME 2020 FUND
The financial highlights table is intended to help you understand the fund's financial performance for the past 5 years (or life
of a particular share class, if shorter). 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 share
class (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.
YEAR ENDED 4/30/06 (c)
CLASS A CLASS B CLASS C CLASS I
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
- --------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.08 $0.06 $0.06 $0.10
Net realized and unrealized gain (loss) on investments 0.92 0.90 0.91 0.93
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.00 $0.96 $0.97 $1.03
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.15) $(0.14) $(0.14) $(0.16)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.85 $10.82 $10.83 $10.87
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r) 10.14(n)(t) 9.71(n)(t) 9.79(n)(t) 10.38(n)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f)(h) 5.30(a) 5.95(a) 5.95(a) 4.95(a)
Expenses after expense reductions (f)(h) 0.45(a) 1.10(a) 1.10(a) 0.10(a)
Net investment income 1.34(a) 0.84(a) 0.96(a) 1.60(a)
Portfolio turnover 4 4 4 4
Net assets at end of period (000 Omitted) $2,718 $1,009 $143 $324
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 4/30/06 (c)
CLASS R1 CLASS R2 CLASS R3 CLASS R4 CLASS R5
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00 $10.00
- --------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.04 $0.07 $0.08 $0.12 $0.11
Net realized and unrealized gain (loss) on investments 0.92 0.92 0.91 0.89 0.91
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.96 $0.99 $0.99 $1.01 $1.02
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.13) $(0.14) $(0.15) $(0.15) $(0.15)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.83 $10.85 $10.84 $10.86 $10.87
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r) 9.68(n) 9.97(n) 9.99(n) 10.24(n) 10.35(n)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f)(h) 6.14(a) 5.85(a) 5.69(a) 5.35(a) 5.05(a)
Expenses after expense reductions (f)(h) 1.20(a) 0.85(a) 0.75(a) 0.50(a) 0.20(a)
Net investment income 0.58(a) 1.19(a) 1.28(a) 1.63(a) 1.87(a)
Portfolio turnover 4 4 4 4 4
Net assets at end of period (000 Omitted) $549 $90 $1,271 $1,480 $55
- --------------------------------------------------------------------------------------------------------------------------------
(a) Annualized.
(c) For the period from the commencement of the fund's investment operations, September 29, 2005, through April 30, 2006.
(d) Per share data are based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly.
(h) In addition to the fees and expenses which the fund bears directly, the fund indirectly bears a pro rata share of the fees
and expenses of the underlying funds in which the fund invests. Because the underlying funds have varied expense and fee
levels and the fund may own different proportions of the underlying funds at different times, the amount of fees and
expenses incurred directly by the fund will vary.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been lower.
(t) Total returns do not include any applicable sales charges.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) LIFETIME 2030 FUND
The financial highlights table is intended to help you understand the fund's financial performance for the past 5 years (or life
of a particular share class, if shorter). 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 share
class (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.
YEAR ENDED 4/30/06 (c)
CLASS A CLASS B CLASS C CLASS I
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
- --------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.01 $(0.03) $(0.01) $0.04
Net realized and unrealized gain (loss) on investments 1.25 1.25 1.24 1.25
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.26 $1.22 $1.23 $1.29
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.16) $(0.15) $(0.15) $(0.17)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.10 $11.07 $11.08 $11.12
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r) 12.73(n)(t) 12.36(n)(t) 12.39(n)(t) 12.99(n)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f)(h) 11.40(a) 12.05(a) 12.05(a) 11.05(a)
Expenses after expense reductions (f)(h) 0.45(a) 1.10(a) 1.10(a) 0.10(a)
Net investment income (loss) 0.20(a) (0.41)(a) (0.13)(a) 0.67(a)
Portfolio turnover 4 4 4 4
Net assets at end of period (000 Omitted) $686 $382 $114 $701
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 4/30/06 (c)
CLASS R1 CLASS R2 CLASS R3 CLASS R4 CLASS R5
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00 $10.00
- --------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $(0.03) $0.00(w) $0.01 $0.02 $0.04
Net realized and unrealized gain (loss) on investments 1.25 1.24 1.23 1.24 1.24
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.22 $1.24 $1.24 $1.26 $1.28
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.14) $(0.15) $(0.15) $(0.16) $(0.16)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.08 $11.09 $11.09 $11.10 $11.12
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r) 12.29(n) 12.49(n) 12.56(n) 12.72(n) 12.97(n)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f)(h) 12.25(a) 11.95(a) 11.80(a) 11.45(a) 11.15(a)
Expenses after expense reductions (f)(h) 1.20(a) 0.85(a) 0.75(a) 0.50(a) 0.20(a)
Net investment income (loss) (0.49)(a) 0.05(a) 0.10(a) 0.33(a) 0.71(a)
Portfolio turnover 4 4 4 4 4
Net assets at end of period (000 Omitted) $306 $62 $331 $354 $56
- --------------------------------------------------------------------------------------------------------------------------------
(a) Annualized.
(c) For the period from the commencement of the fund's investment operations, September 29, 2005, through April 30, 2006.
(d) Per share data are based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly.
(h) In addition to the fees and expenses which the fund bears directly, the fund indirectly bears a pro rata share of the fees
and expenses of the underlying funds in which the fund invests. Because the underlying funds have varied expense and fee
levels and the fund may own different proportions of the underlying funds at different times, the amount of fees and
expenses incurred directly by the fund will vary.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount is less than $0.01.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) LIFETIME 2040 FUND
The financial highlights table is intended to help you understand the fund's financial performance for the past 5 years (or life
of a particular share class, if shorter). 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 share
class (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.
YEAR ENDED 4/30/06 (c)
CLASS A CLASS B CLASS C CLASS I
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
- --------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.01 $(0.03) $(0.02) $0.04
Net realized and unrealized gain (loss) on investments 1.26 1.27 1.25 1.25
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.27 $1.24 $1.23 $1.29
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.16) $(0.15) $(0.14) $(0.16)
From net realized gain on investments (0.01) (0.01) (0.01) (0.01)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.17) $(0.16) $(0.15) $(0.17)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.10 $11.08 $11.08 $11.12
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r) 12.76(n)(t) 12.45(n)(t) 12.38(n)(t) 13.01(n)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f)(h) 11.32(a) 11.97(a) 11.97(a) 10.97(a)
Expenses after expense reductions (f)(h) 0.45(a) 1.10(a) 1.10(a) 0.10(a)
Net investment income (loss) 0.10(a) (0.45)(a) (0.26)(a) 0.62(a)
Portfolio turnover 33 33 33 33
Net assets at end of period (000 Omitted) $599 $466 $86 $582
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 4/30/06 (c)
CLASS R1 CLASS R2 CLASS R3 CLASS R4 CLASS R5
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00 $10.00
- --------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $(0.03) $0.00(w) $0.01 $0.03 $0.04
Net realized and unrealized gain (loss) on investments 1.25 1.25 1.25 1.24 1.25
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.22 $1.25 $1.26 $1.27 $1.29
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.13) $(0.14) $(0.15) $(0.15) $(0.16)
From net realized gain on investments (0.01) (0.01) (0.01) (0.01) (0.01)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.14) $(0.15) $(0.16) $(0.16) $(0.17)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.08 $11.10 $11.10 $11.11 $11.12
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r) 12.31(n) 12.61(n) 12.70(n) 12.84(n) 12.99(n)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f)(h) 12.17(a) 11.87(a) 11.72(a) 11.37(a) 11.07(a)
Expenses after expense reductions (f)(h) 1.20(a) 0.85(a) 0.75(a) 0.50(a) 0.20(a)
Net investment income (loss) (0.42)(a) 0.02(a) 0.08(a) 0.38(a) 0.67(a)
Portfolio turnover 33 33 33 33 33
Net assets at end of period (000 Omitted) $127 $56 $323 $169 $56
- --------------------------------------------------------------------------------------------------------------------------------
(a) Annualized.
(c) For the period from the commencement of the fund's investment operations, September 29, 2005, through April 30, 2006.
(d) Per share data are based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly.
(h) In addition to the fees and expenses which the fund bears directly, the fund indirectly bears a pro rata share of the fees
and expenses of the underlying funds in which the fund invests. Because the underlying funds have varied expense and fee
levels and the fund may own different proportions of the underlying funds at different times, the amount of fees and
expenses incurred directly by the fund will vary.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount is less than $0.01.
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
(1) BUSINESS AND ORGANIZATION
MFS Lifetime Retirement Income Fund, MFS Lifetime 2010 fund, MFS Lifetime 2020
Fund, MFS Lifetime 2030 Fund, and MFS Lifetime 2040 Fund (the funds) are each
a series of MFS Series Trust XII (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.
Each fund is a "fund of funds", which invests the majority of its assets in
other MFS equity, fixed income, international and money market mutual funds
(underlying funds), which in turn may engage in a number of investment
techniques and practices, which involve certain risks. Each underlying fund's
accounting policies are outlined in the underlying fund's financial statements
and are available upon request.
Investment Valuations - Open-end investment companies are generally valued at
their net asset value per share. The underlying investments of open-end
investment companies managed by the adviser are valued as described below.
Equity securities, including restricted equity securities, are generally
valued at the last sale or official closing price as reported by an
independent pricing service on the market or exchange on which they are
primarily traded. For securities for which there were no sales reported that
day, equity securities are generally valued at the last quoted daily bid
quotation as reported by an independent pricing service on the market or
exchange on which they are primarily traded. Debt instruments (other than
short-term instruments), including restricted debt instruments, are generally
valued at an evaluated or composite bid as reported by an independent pricing
service. Values of debt instruments obtained from pricing services can utilize
both dealer-supplied valuations and electronic data processing techniques,
which take into account 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. Short-term instruments with a
maturity at issuance of 397 days or less are generally valued at amortized
cost, which approximates market value. Exchange-traded options are generally
valued at the last sale or official closing price as reported by an
independent pricing service on the exchange on which they are primarily
traded. For exchange-traded options in which there were no sales reported that
day, exchange-traded options are generally valued at the last daily bid
quotation as reported by an independent pricing service on the exchange on
which they are primarily traded. Options not traded on an exchange are
generally valued at a broker-dealer bid quotation. Foreign currency options
are generally valued using an external pricing model that uses market data
from an independent source. Futures contracts are generally valued at last
posted settlement price as reported by an independent pricing service on the
market on which they are primarily traded. Futures contracts for which there
were no trades that day for a particular position are generally valued at the
closing bid quotation as reported by an independent pricing service on the
market on which they are primarily traded. Forward foreign currency contracts
are generally valued at the mean of bid and asked prices for the time period
interpolated from rates reported by an independent pricing service for
proximate time periods. Swaps are generally valued at a broker-dealer bid
quotation. Securities and other assets generally valued on the basis of
information from an independent pricing service may also be valued at a
broker-dealer bid quotation. The values of foreign securities and other assets
and liabilities expressed in foreign currencies are converted to U.S. dollars
using the mean of bid and asked prices for rates reported by an independent
pricing service. The Board of Trustees has delegated primary responsibility
for determining or causing to be determined the value of each fund's
investments (including any fair valuation) to the adviser pursuant to
valuation policies and procedures approved by the Board. If the adviser
determines that reliable market quotations are not readily available,
investments are valued at fair value as determined in good faith by the
adviser in accordance with such procedures under the oversight of the Board of
Trustees. Under each fund's valuation policies and procedures, market
quotations are not considered to be readily available for many types of debt
instruments. These investments are generally valued at fair value based on
information from independent pricing services. These valuations can be based
on both dealer-supplied valuations and electronic data processing techniques,
which take into account 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. The adviser may rely on
independent pricing services or other information (such as the correlation
with price movements of similar securities in the same or other markets; the
type, cost and investment characteristics of the security; the business and
financial condition of the issuer; and trading and other market data) to
assist in determining whether to fair value and at what value to fair value an
investment. The value of an investment for purposes of calculating each fund's
net asset value can differ depending on the source and method used to
determine value. When fair valuation is used, the value of investments used to
determine each fund's net asset value may differ from quoted or published
prices for the same investments. In addition, investments may be valued at
fair value if the adviser determines that an investment's value has been
materially affected by events occurring after the close of the exchange or
market on which the investment is principally traded (such as foreign exchange
or market) and prior to the determination of each fund's net asset value, or
after the halting of trading of a specific security where trading does not
resume prior to the close of the exchange or market on which the security is
principally traded. Events that occur on a frequent basis after foreign
markets close (such as developments in foreign markets and significant
movements in the U.S. markets) and prior to the determination of each fund's
net asset value may be deemed to have a material affect on the value of
securities traded in foreign markets. Accordingly, each fund's foreign equity
securities may often be valued at fair value.
Investment Transactions and Income - Investment transactions are recorded on
the trade date. Interest income is recorded on an accrual basis. All discount
is accreted for tax reporting purposes as required by federal income tax
regulations. Distributions of income and capital gains from the underlying
funds are recorded on the ex-dividend date. In determining the net gain or
loss on securities sold, the cost of securities is determined on the
identified cost basis.
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
each fund. This amount, for the period ended April 30, 2006, is shown as a
reduction of total expenses on the Statement of Operations.
Tax Matters and Distributions - Each fund intends to continue to qualify as a
regulated investment company, as defined under Subchapter M of the Internal
Revenue Code, and to distribute all of its taxable income, including realized
capital gains. Accordingly, no provision for federal income tax is required in
the financial statements. Foreign taxes, if any, have been accrued by each
fund in the accompanying financial statements.
Distributions to shareholders are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations, which may differ from generally accepted accounting principles.
Certain capital accounts in the financial statements are periodically adjusted
for permanent differences in order to reflect their tax character. These
adjustments have no impact on net assets or net asset value per share.
Temporary differences which arise from recognizing certain items of income,
expense, gain or loss in different periods for financial statement and tax
purposes will reverse at some time in the future. Distributions in excess of
net investment income or net realized gains are temporary overdistributions
for financial statement purposes resulting from differences in the recognition
or classification of income or distributions for financial statement and tax
purposes.
Book/tax differences primarily relate to wash sale loss deferrals, short-term
capital gain distributions received from underlying funds and treating a
portion of the proceeds from redemptions as a distribution for tax purposes.
The tax character of distributions declared to shareholders is as follows:
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
Ordinary income (including any short-term
capital gains) $20,545 $6,889 $38,590 $12,044 $14,043
Long-term capital gain -- -- -- 484 722
- -----------------------------------------------------------------------------------------------------------------------------------
$20,545 $6,889 $38,590 $12,528 $14,765
The federal tax cost and the tax basis
components of distributable earnings
were as follows:
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
AS OF APRIL 30, 2006
Cost of investments $2,112,079 $2,160,218 $7,526,104 $2,960,909 $2,436,331
- -----------------------------------------------------------------------------------------------------------------------------------
Gross appreciation $15,706 $33,990 $225,255 $113,264 $111,306
Gross depreciation (17,396) (12,633) (18,544) (337) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $(1,690) $21,357 $206,711 $112,927 $111,306
Undistributed ordinary income $5,354 $13,429 $12,748 $-- $319
Undistributed long-term capital gain 2,734 6,834 41,827 15,238 15,234
Other temporary differences (5,005) -- -- -- --
Multiple Classes of Shares of Beneficial Interest - Each fund offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of each fund based on daily
net assets 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, respectively approximately eight years
after purchase.
(3) TRANSACTIONS WITH AFFILIATES
Investment Adviser - Each fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. MFS
receives no compensation under this agreement.
The investment adviser has contractually agreed to pay a portion of each
fund's operating expenses, exclusive of distribution and service, retirement
plan administration and services, and certain other fees and expenses, such
that each fund's operating expenses do not exceed 0.10% annually of each
fund's average daily net assets. This contractual fee arrangement will
continue until September 1, 2006. For the period ended April 30, 2006, this
reduction amounted to the following amounts for each fund and is reflected as
a reduction of total expenses in the Statements of Operations:
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
$79,545 $83,360 $87,088 $82,196 $81,347
In addition to the fees and expenses which each fund bears directly, each fund
indirectly bears a pro rata share of the fees and expenses of the underlying
funds in which a fund invests.
Distributor - MFS Fund Distributors, Inc. (MFD), a wholly owned subsidiary of
MFS, as distributor, received the following amounts for the period ended April
30, 2006, as its portion of the initial sales charge on sales of Class A
shares of each fund.
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
$306 $1,128 $4,037 $2,541 $1,181
The Board of Trustees has adopted a distribution plan for certain class shares
pursuant to Rule 12b-1 of the Investment Company Act of 1940.
Each fund's distribution plan provides that the fund will pay MFD for services
provided by MFD and financial intermediaries in connection with the
distribution and servicing of certain share classes. One component of the plan
is a distribution fee paid to MFD and another component of the plan is a
service fee paid to MFD. MFD may subsequently pay all, or a portion, of the
distribution and/or service fees to financial intermediaries.
Distribution Fee Plan Table:
CLASS A
---------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
MFS Lifetime Retirement Income Fund 0.10% 0.25% 0.35% 0.35% $605
MFS Lifetime 2010 Fund 0.10% 0.25% 0.35% 0.35% 387
MFS Lifetime 2020 Fund 0.10% 0.25% 0.35% 0.35% 1,495
MFS Lifetime 2030 Fund 0.10% 0.25% 0.35% 0.35% 516
MFS Lifetime 2040 Fund 0.10% 0.25% 0.35% 0.35% 555
CLASS B
---------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
MFS Lifetime Retirement Income Fund 0.75% 0.25% 1.00% 1.00% $1,225
MFS Lifetime 2010 Fund 0.75% 0.25% 1.00% 1.00% 419
MFS Lifetime 2020 Fund 0.75% 0.25% 1.00% 1.00% 2,752
MFS Lifetime 2030 Fund 0.75% 0.25% 1.00% 1.00% 1,022
MFS Lifetime 2040 Fund 0.75% 0.25% 1.00% 1.00% 1,160
CLASS C
---------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
MFS Lifetime Retirement Income Fund 0.75% 0.25% 1.00% 1.00% $645
MFS Lifetime 2010 Fund 0.75% 0.25% 1.00% 1.00% 348
MFS Lifetime 2020 Fund 0.75% 0.25% 1.00% 1.00% 508
MFS Lifetime 2030 Fund 0.75% 0.25% 1.00% 1.00% 485
MFS Lifetime 2040 Fund 0.75% 0.25% 1.00% 1.00% 393
CLASS R1
---------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
MFS Lifetime Retirement Income Fund 0.50% 0.25% 0.75% 0.75% $294
MFS Lifetime 2010 Fund 0.50% 0.25% 0.75% 0.75% 286
MFS Lifetime 2020 Fund 0.50% 0.25% 0.75% 0.75% 748
MFS Lifetime 2030 Fund 0.50% 0.25% 0.75% 0.75% 515
MFS Lifetime 2040 Fund 0.50% 0.25% 0.75% 0.75% 294
CLASS R2
---------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
MFS Lifetime Retirement Income Fund 0.25% 0.25% 0.50% 0.50% $148
MFS Lifetime 2010 Fund 0.25% 0.25% 0.50% 0.50% 161
MFS Lifetime 2020 Fund 0.25% 0.25% 0.50% 0.50% 164
MFS Lifetime 2030 Fund 0.25% 0.25% 0.50% 0.50% 159
MFS Lifetime 2040 Fund 0.25% 0.25% 0.50% 0.50% 155
CLASS R3
---------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
MFS Lifetime Retirement Income Fund 0.25% 0.25% 0.50% 0.50% $318
MFS Lifetime 2010 Fund 0.25% 0.25% 0.50% 0.50% 198
MFS Lifetime 2020 Fund 0.25% 0.25% 0.50% 0.50% 1,330
MFS Lifetime 2030 Fund 0.25% 0.25% 0.50% 0.50% 375
MFS Lifetime 2040 Fund 0.25% 0.25% 0.50% 0.50% 448
CLASS R4
---------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
MFS Lifetime Retirement Income Fund -- 0.25% 0.25% 0.25% $74
MFS Lifetime 2010 Fund -- 0.25% 0.25% 0.25% 527
MFS Lifetime 2020 Fund -- 0.25% 0.25% 0.25% 1,253
MFS Lifetime 2030 Fund -- 0.25% 0.25% 0.25% 165
MFS Lifetime 2040 Fund -- 0.25% 0.25% 0.25% 151
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIMEMFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
Total Distribution and Service Fees $3,309 $2,326 $8,250 $3,237 $3,156
(1) In accordance with the distribution plan for certain classes, each fund pays distribution and/or service fees up to these
annual percentage rates of each class' average daily net assets.
(2) The annual effective rates represent actual fees incurred under the distribution plan for the period ended April 30, 2006
based on each class' average daily net assets.
Certain Class A and Class C shares are subject to a contingent deferred sales charge in the event of a shareholder redemption
within 12 months of purchase. Class B shares are subject to a contingent deferred sales charge in the event of a shareholder
redemption within six years of purchase. All contingent deferred sales charges are paid to MFD and during the period ended April
30, 2006, were as follows:
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
CDSC IMPOSED INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
Class A $-- $-- $-- $-- $--
Class B -- -- -- -- 104
Class C -- -- -- -- --
Shareholder Servicing Agent - MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives payment from each fund
for out-of-pocket and sub- accounting expenses paid by MFSC on behalf of each fund. For the period ended April 30, 2006, these
costs amounted to the following:
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
$57 $95 $220 $125 $135
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, the funds may partially
reimburse MFS the costs incurred to provide these services, subject to review and approval by the Board of Trustees. Each fund is
charged a fixed amount and, until March 31, 2006, a fee based on calendar year average net assets. From July 1, 2005 through March
31, 2006, each fund's annual fixed amount was $10,000. Effective April 1, 2006, each fund pays an annual fixed amount of $17,500.
The administrative services fee incurred for the period ended April 30, 2006 was equivalent to the following annual effective
rates of each fund's average daily net assets:
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
1.1254% 1.0153% 0.3632% 0.8600% 0.8739%
In addition to the administrative services provided by MFS to each fund as described above, MFS is responsible for providing
certain retirement plan administration and services with respect to certain shares. These services include various administrative,
recordkeeping, and communication/educational services with respect to the retirement plans which invest in these shares, and may
be provided directly by MFS or by a third party. MFS may subsequently pay all, or a portion, of the retirement plan administration
and services fee to affiliated or unaffiliated third parties. For the period ended April 30, 2006, each fund paid MFS an annual
retirement plan administration and services fee up to the following annual percentage rates of each class' average daily net
assets:
CLASS R1
-----------------------------------------------------
ANNUAL
EFFECTIVE TOTAL
FEE RATE RATE(1) AMOUNT
MFS Lifetime Retirement Income Fund 0.45% 0.35% $176
MFS Lifetime 2010 Fund 0.45% 0.35% 172
MFS Lifetime 2020 Fund 0.45% 0.35% 449
MFS Lifetime 2030 Fund 0.45% 0.35% 309
MFS Lifetime 2040 Fund 0.45% 0.35% 177
CLASS R2
-----------------------------------------------------
ANNUAL
EFFECTIVE TOTAL
FEE RATE RATE(1) AMOUNT
MFS Lifetime Retirement Income Fund 0.40% 0.25% $118
MFS Lifetime 2010 Fund 0.40% 0.25% 129
MFS Lifetime 2020 Fund 0.40% 0.25% 131
MFS Lifetime 2030 Fund 0.40% 0.25% 127
MFS Lifetime 2040 Fund 0.40% 0.25% 123
CLASS R3
-----------------------------------------------------
ANNUAL
EFFECTIVE TOTAL
FEE RATE RATE(1) AMOUNT
MFS Lifetime Retirement Income Fund 0.25% 0.15% $159
MFS Lifetime 2010 Fund 0.25% 0.15% 99
MFS Lifetime 2020 Fund 0.25% 0.15% 665
MFS Lifetime 2030 Fund 0.25% 0.15% 188
MFS Lifetime 2040 Fund 0.25% 0.15% 223
CLASS R4
-----------------------------------------------------
ANNUAL
EFFECTIVE TOTAL
FEE RATE RATE(1) AMOUNT
MFS Lifetime Retirement Income Fund 0.15% 0.15% $44
MFS Lifetime 2010 Fund 0.15% 0.15% 316
MFS Lifetime 2020 Fund 0.15% 0.15% 752
MFS Lifetime 2030 Fund 0.15% 0.15% 99
MFS Lifetime 2040 Fund 0.15% 0.15% 91
CLASS R5
-----------------------------------------------------
ANNUAL
EFFECTIVE TOTAL
FEE RATE RATE(1) AMOUNT
MFS Lifetime Retirement Income Fund 0.10% 0.10% $30
MFS Lifetime 2010 Fund 0.10% 0.10% 30
MFS Lifetime 2020 Fund 0.10% 0.10% 31
MFS Lifetime 2030 Fund 0.10% 0.10% 31
MFS Lifetime 2040 Fund 0.10% 0.10% 31
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
Total Retirement Plan Administration and
Services Fees $527 $746 $2,028 $754 $645
(1) MFS has contractually agreed to waive a portion of the retirement plan administration and services fee equal to 0.10% for
Class R1 shares, 0.15% for Class R2 shares, and 0.10% for Class R3 shares. This agreement will continue until at least
September 30, 2007. For the period ended April 30, 2006, this waiver amounted to the following and is reflected as a reduction
of total expenses in the Statements of Operations:
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
$147 $126 $416 $191 $175
Trustees' and Officers' Compensation - Each fund pays compensation to Independent Trustees in the form of a retainer, attendance
fees, and additional compensation to Board and Committee chairpersons. The funds do not pay compensation directly to Trustees or
officers of the funds who are also officers of the investment adviser, 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, MFD, and MFSC.
Other - Each 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. The funds can terminate
the Agreement with Tarantino LLC at any time under the terms of the Agreement. For the period ended April 30, 2006, the fees paid
to Tarantino LLC amounted to the following:
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
$4 $4 $10 $4 $4
MFS has agreed to reimburse each fund for a portion of the payments made by the funds to Tarantino LLC in the following amounts,
which are shown as a reduction of total expenses in the Statements of Operations. Additionally, MFS has agreed to bear all
expenses associated with office space, other administrative support, and supplies provided to the ICCO.
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
$3 $4 $8 $4 $4
(4) PORTFOLIO SECURITIES
Purchases and sales of shares of funds, within the MFS Family of Funds, were as follows:
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
Purchases $2,206,225 $2,023,933 $7,558,100 $2,948,892 $2,778,758
- -----------------------------------------------------------------------------------------------------------------------------------
Sales $137,219 $33,920 $116,341 $49,041 $405,997
- -----------------------------------------------------------------------------------------------------------------------------------
(5) SHARES OF BENEFICIAL INTEREST
Each fund's Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial
interest. Transactions in each fund's shares were as follows:
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
---------------------- -------------------- -------------------- -------------------- --------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
APRIL 30, 2006 (c) APRIL 30, 2006 (c) APRIL 30, 2006 (c) APRIL 30, 2006 (c) APRIL 30, 2006 (c)
---------------------- -------------------- -------------------- -------------------- --------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 71,702 $715,408 44,951 $459,461 266,782 $2,826,407 63,790 $682,234 82,181 $876,457
Class B 36,355 363,854 13,486 137,304 93,083 964,228 35,228 372,134 44,731 473,676
Class C 37,691 376,725 9,201 93,225 13,049 134,132 10,173 104,654 7,693 78,848
Class I 5,000 50,030 25,366 257,291 29,490 305,076 63,055 669,639 62,701 659,424
Class R1 12,802 128,015 8,222 83,117 50,609 533,361 27,532 295,018 11,391 119,614
Class R2 5,000 50,030 12,329 125,897 11,352 118,843 5,525 56,085 5,000 50,436
Class R3 33,990 339,959 26,212 268,562 118,802 1,247,921 35,959 383,143 29,722 313,299
Class R4 5,214 52,171 52,530 532,643 134,660 1,393,818 31,765 342,452 15,789 164,396
Class R5 5,000 50,030 5,000 50,116 5,000 50,322 5,000 50,436 5,000 50,436
- -----------------------------------------------------------------------------------------------------------------------------------
212,754 $2,126,222 197,297 $2,007,616 722,827 $7,574,108 278,027 $2,955,795 264,208 $2,786,586
Shares issued to shareholders in reinvestment of distributions
Class A 656 $6,550 77 $781 462 $4,714 126 $1,295 192 $1,972
Class B 380 3,790 36 359 452 4,609 204 2,096 180 1,847
Class C 171 1,706 28 284 121 1,235 125 1,286 89 913
Class I 124 1,236 40 408 321 3,274 269 2,768 391 4,023
Class R1 121 1,206 27 271 64 650 67 692 68 702
Class R2 102 1,014 31 315 68 694 71 736 72 746
Class R3 214 2,143 32 327 526 5,359 133 1,374 206 2,115
Class R4 113 1,126 371 3,749 1,680 17,153 142 1,464 157 1,620
Class R5 121 1,209 39 395 76 775 79 817 80 827
- -----------------------------------------------------------------------------------------------------------------------------------
2,002 $19,980 681 $6,889 3,770 $38,463 1,216 $12,528 1,435 $14,765
Shares reacquired
Class A -- $-- -- $-- (16,757) $(175,479) (2,119) $(22,808) (28,417) $(300,142)
Class B (2) (15) (244) (2,472) (295) (3,134) (953) (10,395) (2,837) (30,501)
Class C (2) (15) -- -- (2) (15) -- -- (15) (166)
Class I -- -- -- -- -- -- (307) (3,328) (10,807) (118,436)
Class R1 (192) (1,917) -- -- -- -- -- -- -- --
Class R2 -- -- (3,664) (37,891) (3,150) (33,987) -- -- -- --
Class R3 (10,129) (101,012) (1,118) (11,472) (2,140) (22,741) (6,246) (67,273) (816) (8,801)
Class R4 -- -- -- -- -- -- -- -- (699) (7,488)
- -----------------------------------------------------------------------------------------------------------------------------------
(10,325) $(102,959) (5,026) $(51,835) (22,344) $(235,356) (9,625) $(103,804) (43,591) $(465,534)
Net change
Class A 72,358 $721,958 45,028 $460,242 250,487 $2,655,642 61,797 $660,721 53,956 $578,287
Class B 36,733 367,629 13,278 135,191 93,240 965,703 34,479 363,835 42,074 445,022
Class C 37,860 378,416 9,229 93,509 13,168 135,352 10,298 105,940 7,767 79,595
Class I 5,124 51,266 25,406 257,699 29,811 308,350 63,017 669,079 52,285 545,011
Class R1 12,731 127,304 8,249 83,388 50,673 534,011 27,599 295,710 11,459 120,316
Class R2 5,102 51,044 8,696 88,321 8,270 85,550 5,596 56,821 5,072 51,182
Class R3 24,075 241,090 25,126 257,417 117,188 1,230,539 29,846 317,244 29,112 306,613
Class R4 5,327 53,297 52,901 536,392 136,340 1,410,971 31,907 343,916 15,247 158,528
Class R5 5,121 51,239 5,039 50,511 5,076 51,097 5,079 51,253 5,080 51,263
- -----------------------------------------------------------------------------------------------------------------------------------
204,431 $2,043,243 192,952 $1,962,670 704,253 $7,377,215 269,618 $2,864,519 222,052 $2,335,817
(c) For the period from the commencement of the fund's investment operations, September 29, 2005, through April 30, 2006.
(6) LINE OF CREDIT
Each fund and other affiliated funds participate in a $1 billion unsecured line of credit provided by a syndication of banks under
a 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 0.35%. 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 period ended April 30, 2006, was equal to the following and is included in
miscellaneous expense on the Statements of Operations. None of the funds had significant borrowings during the period ended April
30, 2006.
MFS LIFETIME
RETIREMENT MFS LIFETIME MFS LIFETIME MFS LIFETIME MFS LIFETIME
INCOME FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
$5 $4 $13 $5 $5
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of MFS Series Trust XII and
Shareholders of MFS Lifetime Funds:
We have audited the accompanying statements of assets and liabilities of MFS
Lifetime Retirement Income Fund, MFS Lifetime 2010 Fund, MFS Lifetime 2020
Fund, MFS Lifetime 2030 Fund and MFS Lifetime 2040 Fund (the "MFS Lifetime
Funds") (the five funds constituting MFS Series Trust XII), including the
portfolios of investments, as of April 30, 2006, and the related statements of
operations, the statements of changes in net assets, and the financial
highlights for the period September 29, 2005 (commencement of operations)
through April 30, 2006. These financial statements and financial highlights
are the responsibility of the MFS Lifetime Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the MFS Lifetime
Funds' 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 MFS
Lifetime Funds' internal control over financial reporting. Accordingly, we
express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements
and financial highlights, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. Our procedures included confirmation of securities
owned as of April 30, 2006, by correspondence with the custodian and brokers
or by other appropriate auditing procedures where replies from brokers were
not received. 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 the
MFS Lifetime Funds at April 30, 2006, the results of their operations, the
changes in their net assets, and their financial highlights for the period
September 29, 2005 (commencement of operations) through April 30, 2006, in
conformity with U.S. generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
June 12, 2006
TRUSTEES AND OFFICERS -- IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust, as of June 1, 2006, 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 YEARS &
NAME, DATE OF BIRTH WITH FUND SINCE(H) OTHER DIRECTORSHIPS(J)
- ------------------- ---------------- --------------- -------------------------------------------------------------------
INTERESTED TRUSTEES
Robert J. Manning(k) Trustee February 2004 Massachusetts Financial Services Company, Chief Executive Officer,
(born 10/20/63) President, Chief Investment Officer and Director
Robert C. Pozen(k) Trustee February 2004 Massachusetts Financial Services Company, Chairman (since February
(born 08/08/46) 2004); 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 of February 1992 Private investor; Eastern Enterprises (diversified services
(born 05/01/36) Trustees company), Chairman, Trustee and Chief Executive Officer (until
November 2000)
Robert E. Butler(n) Trustee January 2006 Consultant - regulatory and compliance matters (since July 2002);
(born 11/29/41) PricewaterhouseCoopers LLP (professional services firm), Partner
(November 2000 until June 2002)
Lawrence H. Cohn, M.D. Trustee August 1993 Brigham and Women's Hospital, Senior Cardiac Surgeon, Chief of
(born 03/11/37) Cardiac Surgery (until 2005); Harvard Medical School, Professor of
Surgery; Brigham and Women's Hospital Physicians' Organization,
Chair (2000 to 2004)
David H. Gunning Trustee January 2004 Cleveland-Cliffs Inc. (mining products and service provider), Vice
(born 05/30/42) Chairman/Director (since April 2001); Encinitos Ventures (private
investment company), Principal (1997 to April 2001); Lincoln
Electric Holdings, Inc. (welding equipment manufacturer), Director
William R. Gutow Trustee December 1993 Private investor and real estate consultant; Capitol Entertainment
(born 09/27/41) Management Company (video franchise), Vice Chairman
Michael Hegarty Trustee December 2004 Retired; AXA Financial (financial services and insurance), Vice
(born 12/21/44) Chairman and Chief Operating Officer (until May 2001); The Equitable
Life Assurance Society (insurance), President and Chief Operating
Officer (until May 2001)
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 specialists),
(born 09/23/38) 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 capital),
(born 08/05/57) Co-founder and General Partner (until June 2004); St. Paul Travelers
Companies (commercial property liability insurance), Director
Robert W. Uek Trustee January 2006 Retired (since 1999); PricewaterhouseCoopers LLP (professional
(born 05/18/41) services firm), Partner (until 1999); Consultant to investment
company industry (since 2000); TT International Funds (mutual fund
complex), Trustee (2000 until 2005); Hillview Investment Trust II
Funds (mutual fund complex), Trustee (2000 until 2005)
OFFICERS
Maria F. Dwyer(k) President November 2005 Massachusetts Financial Services Company, Executive Vice President
(born 12/01/58) and Chief Regulatory Officer (since March 2004); Fidelity Management
& Research Company, Vice President (prior to March 2004); Fidelity
Group of Funds, President and Treasurer (prior to March 2004)
Tracy Atkinson(k) Treasurer September 2005 Massachusetts Financial Services Company, Senior Vice President
(born 12/30/64) (since September 2004); PricewaterhouseCoopers LLP, Partner (prior
to September 2004)
Christopher R. Bohane(k) Assistant Secretary July 2005 Massachusetts Financial Services Company, Vice President and Senior
(born 1/18/74) and Assistant Clerk Counsel (since April 2003); Kirkpatrick & Lockhart LLP (law firm),
Associate (prior to April 2003); Nvest Services Company, Assistant
Vice President and Associate Counsel (prior to January 2001)
Ethan D. Corey(k) Assistant Secretary July 2005 Massachusetts Financial Services Company, Special Counsel (since
(born 11/21/63) and Assistant Clerk December 2004); Dechert LLP (law firm), Counsel (prior to
December 2004)
David L. DiLorenzo(k) Assistant Treasurer July 2005 Massachusetts Financial Services Company, Vice President (since
(born 8/10/68) June 2005); JP Morgan Investor Services, Vice President (January
2001 to June 2005); State Street Bank, Vice President and Corporate
Audit Manager (prior to January 2001)
Timothy M. Fagan(k) Assistant Secretary September 2005 Massachusetts Financial Services Company, Vice President and Senior
(born 7/10/68) and Assistant Clerk Counsel (since September 2005); John Hancock Advisers, LLC, Vice
President and Chief Compliance Officer (September 2004 to August
2005), Senior Attorney(prior to September 2004); John Hancock Group
of Funds, Vice President and Chief Compliance Officer (September
2004 to December 2004)
Mark D. Fischer(k) Assistant Treasurer July 2005 Massachusetts Financial Services Company, Vice President (since
(born 10/27/70) May 2005); JP Morgan Investment Management Company, Vice President
(prior to May 2005)
Ellen Moynihan(k) Assistant Treasurer April 1997 Massachusetts Financial Services Company, Senior Vice President
(born 11/13/57)
Susan S. Newton(k) Assistant Secretary May 2005 Massachusetts Financial Services Company, Senior Vice President and
(born 03/07/50) and Assistant Clerk Associate General Counsel (since April 2005); John Hancock Advisers,
LLC, Senior Vice President, Secretary and Chief Legal Officer
(prior to April 2005); John Hancock Group of Funds, Senior Vice
President, Secretary and Chief Legal Officer (prior to April 2005)
Susan A. Pereira(k) Assistant Secretary July 2005 Massachusetts Financial Services Company, Vice President and Senior
(born 11/05/70) and Assistant Clerk Counsel (since June 2004); Bingham McCutchen LLP (law firm),
Associate (January 2001 to June 2004); Preti, Flaherty, Beliveau,
Pachios & Haley, LLC, Associate (prior to January 2001)
Mark N. Polebaum(k) Secretary and Clerk January 2006 Massachusetts Financial Services Company, Executive Vice President,
(born 05/01/52) General Counsel and Secretary (since January 2006); Wilmer Cutler
Pickering Hale and Dorr LLP (law firm), Partner (prior to January
2006)
Frank L. Tarantino Independent Chief June 2004 Tarantino LLC (provider of compliance services), Principal (since
(born 03/07/44) Compliance Officer 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(k) Assistant Treasurer September 1990 Massachusetts Financial Services Company, Senior Vice President
(born 06/12/60)
- --------------
(h) Date first appointed to serve as Trustee/officer of an MFS fund. Each Trustee has served continuously since appointment unless
indicated otherwise.
(j) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., "public
companies").
(k) "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.
(n) In 2004 and 2005, Mr. Butler provided consulting services to the independent compliance consultant retained by MFS pursuant to
its settlement with the SEC concerning market timing and related matters. The terms of that settlement required that
compensation and expenses related to the independent compliance consultant be borne exclusively by MFS and, therefore, MFS
paid Mr. Butler for the services he rendered to the independent compliance consultant. In 2004 and 2005, MFS paid Mr. Butler a
total of $351,119.29.
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. Butler, Sherratt and Uek and Ms. 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, 2005, each
Trustee served as a board member of 98 funds within the MFS Family of Funds.
The Statement of Additional Information contains further information about the Trustees and is available without charge upon
request by calling 1-800-225-2606.
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT ADVISER CUSTODIAN
Massachusetts Financial Services Company State Street Bank and Trust Company
500 Boylston Street, Boston, MA 225 Franklin Street, Boston, MA 02110
02116-3741
INDEPENDENT REGISTERED PUBLIC
DISTRIBUTOR ACCOUNTING FIRM
MFS Fund Distributors, Inc. Ernst & Young LLP
500 Boylston Street, Boston, MA 200 Clarendon Street, Boston, MA 02116
02116-3741
PORTFOLIO MANAGER
Joseph C. Flaherty, Jr.
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
A discussion regarding the Board's most recent review and renewal of the
Fund's investment advisory agreement is available by clicking on the fund's
name under "Select a fund" on the MFS Web site (mfs.com).
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 Proxy Voting 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
100 F Street, NE, Room 1580
Washington, D.C. 20549
Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-202-551-5850. The fund's Form N-Q is available on
the EDGAR database on the Commission's Internet Web site 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)
The funds will notify shareholders of amounts for use in preparing 2006 income
tax forms in January 2007. The following information is provided pursuant to
provisions of the Internal Revenue Code.
The funds designate the maximum amount allowable as qualified dividend income
eligible for the 15% tax rate.
MFS Lifetime 2030 Fund and MFS Lifetime 2040 Fund designate $484 and $2,986,
respectively, as capital gain dividends paid during the fiscal year.
For corporate shareholders, the percentages of the ordinary income dividends
paid during the fiscal year that qualify for the corporate dividends received
deduction are as follows:
DIVIDENDS
RECEIVED
DEDUCTIONS
MFS Lifetime Retirement Income Fund 5.11%
MFS Lifetime 2010 Fund 8.39%
MFS Lifetime 2020 Fund 7.58%
MFS Lifetime 2030 Fund 14.86%
MFS Lifetime 2040 Fund 12.94%
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)
MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
LTF-ANN-06/06 1M
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 not amended any provision in its Code of Ethics
(the "Code") that relates to an element of the Code's definitions enumerated in
paragraph (b) of Item 2 of this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Messrs. Robert E. Butler and Robert W. Uek and Ms. 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, Messrs.
Butler, and Uek and Ms. Thomsen are "independent" members of the Audit
Committee (as such term has been defined by the Securities and Exchange
Commission in regulations implementing Section 407 of the Sarbanes-Oxley Act of
2002). The Securities and Exchange Commission has stated that the designation
of a person as an audit committee financial expert pursuant to this Item 3 on
Form N-CSR does not impose on such a person any duties, obligations or
liability that are greater than the duties, obligations or liability imposed on
such person as a member of the Audit Committee and the Board of Trustees in the
absence of such designation or identification.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
ITEMS 4(a) THROUGH 4(d) AND 4(g):
The Board of Trustees has appointed Ernst & Young LLP ("E&Y") to serve as
independent registered public accounting firm to each series of the Registrant
(the series referred to collectively as the "Funds" and singularly as a
"Fund"). 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 April 30, 2006 and 2005, audit fees billed to the
Funds by E&Y were as follows:
Audit Fees
FEES BILLED BY E&Y: 2006 2005
---- ----
MFS Lifetime Retirement Income $22,920 NA*
Fund
MFS Lifetime 2010 Fund 22,920 NA*
MFS Lifetime 2020 Fund 22,920 NA*
MFS Lifetime 2030 Fund 22,920 NA*
MFS Lifetime 2040 Fund 22,920 NA*
-------- ---
TOTAL $114,600 NA
* The Fund commenced operations on September 29, 2005 and therefore no audit
fees were billed to the Fund for the period May 1, 2004 through April 30,
2005.
For the fiscal years ended April 30, 2006 and 2005, fees billed by E&Y 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 E&Y: 2006 2005 2006 2005 2006 2005
---- ---- ---- ---- ---- ----
To MFS Lifetime $0 NA** $6,880 NA** $0 NA**
Retirement Income Fund
To MFS Lifetime 2010 Fund 0 NA** 6,880 NA** 0 NA**
To MFS Lifetime 2020 Fund 0 NA** 6,880 NA** 0 NA**
To MFS Lifetime 2030 Fund 0 NA** 6,880 NA** 0 NA**
To MFS Lifetime 2040 Fund 0 NA** 6,880 NA** 0 NA**
TOTAL FEES BILLED BY E&Y $0 NA** $34,400 NA** $0 NA**
TO ABOVE FUNDS:
To MFS and MFS Related $0 $0 $15,500 $0 $581,599 $123,800
Entities of MFS Lifetime
Retirement Income Fund*
To MFS and MFS Related 0 0 15,500 0 581,599 123,800
Entities of MFS
Lifetime 2010 Fund*
To MFS and MFS Related 0 0 15,500 0 581,599 123,800
Entities of MFS Lifetime
2020 Fund*
To MFS and MFS Related 0 0 15,500 0 581,599 123,800
Entities of MFS Lifetime
2030 Fund*
To MFS and MFS Related 0 0 15,500 0 581,599 123,800
Entities of MFS Lifetime
2040 Fund*
AGGREGATE FEES FOR NON-AUDIT SERVICES:
2006 2005
---- ----
To MFS Lifetime Retirement $668,947 $129,300
Income Fund, MFS and MFS
Related Entities#
To MFS Lifetime 2010 668,947 129,300
Fund, MFS and MFS
Related Entities#
To MFS Lifetime 2020 668,947 129,300
Fund, MFS and MFS
Related Entities#
To MFS Lifetime 2030 668,947 129,300
Fund, MFS and MFS
Related Entities#
To MFS Lifetime 2040 668,947 129,300
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 Fund (portions of which services also related to the operations and
financial reporting of other funds within the MFS Funds complex).
** The Fund commenced operations on September 29, 2005 and therefore no audit fees were billed to the Fund for the period
May 1, 2004 through April 30, 2005.
# This amount reflects the aggregate fees billed by E&Y 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 E&Y other than those reported
under "Audit Fees," "Audit-Related Fees" and "Tax Fees," including fees for services related to analysis of fund
administrative expenses, compliance program and records management projects.
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 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 effectiveness of the registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940 (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 of the period covered by the report that have
materially affected, or are 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.
NOTICE
A copy of the Amended and Restated Declaration of Trust of the Registrant is on
file with the Secretary of State of the Commonwealth of Massachusetts and
notice is hereby given that this instrument is executed on behalf of the
Registrant by an officer of the Registrant as an officer and not individually
and the obligations of or arising out of this instrument are not binding upon
any of the Trustees or shareholders individually, but are binding only upon the
assets and property of the respective constituent series of the Registrant.
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 SERIES TRUST XII
------------------------------------------------------------------
By (Signature and Title)* MARIA F. DWYER
-----------------------------------------------------
Maria F. Dwyer, President
Date: June 23, 2006
-------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* MARIA F. DWYER
-----------------------------------------------------
Maria F. Dwyer, President (Principal Executive
Officer)
Date: June 23, 2006
-------------
By (Signature and Title)* TRACY ATKINSON
-----------------------------------------------------
Tracy Atkinson, Treasurer (Principal Financial Officer
and Accounting Officer)
Date: June 23, 2006
-------------
* Print name and title of each signing officer under his or her signature.