<Page>
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 811-03942
LORD ABBETT TAX-FREE INCOME FUND, INC.
--------------------------------------
(Exact name of Registrant as specified in charter)
90 Hudson Street, Jersey City, NJ 07302
---------------------------------------
(Address of principal executive offices) (zip code)
Christina T. Simmons, Vice President & Assistant Secretary
90 Hudson Street, Jersey City, NJ 07302
---------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 201-6984
--------------
Date of fiscal year end: 9/30
----
Date of reporting period: 9/30/03
-------
<Page>
ITEM 1: Report to Shareholders.
<Page>
[LORD ABBETT LOGO]
2003
ANNUAL
REPORT
LORD ABBETT
TAX-FREE INCOME FUND
TAX-FREE INCOME TRUST
NATIONAL TAX-FREE FUND
CALIFORNIA TAX-FREE FUND
CONNECTICUT TAX-FREE FUND
HAWAII TAX-FREE FUND
MINNESOTA TAX-FREE FUND
MISSOURI TAX-FREE FUND
NEW JERSEY TAX-FREE FUND
NEW YORK TAX-FREE FUND
TEXAS TAX-FREE FUND
WASHINGTON TAX-FREE FUND
INSURED INTERMEDIATE TAX-FREE FUND
FLORIDA TAX-FREE TRUST
GEORGIA TAX-FREE TRUST
MICHIGAN TAX-FREE TRUST
PENNSYLVANIA TAX-FREE TRUST
FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Page>
- --------------------------------------------------------------------------------
LORD ABBETT TAX-FREE INCOME FUND AND LORD ABBETT
TAX-FREE INCOME TRUST ANNUAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2003
DEAR SHAREHOLDERS: We are pleased to provide you with this twelve-month overview
of the Fund's and Trust's strategies and performance for the fiscal year ended
September 30, 2003. On this and the following pages, we discuss the major
factors that influenced performance.
Thank you for investing in Lord Abbett Mutual Funds. We value the trust that
you place in us and look forward to serving your investment needs in the years
to come.
BEST REGARDS,
/s/ Robert S. Dow
ROBERT S. DOW
CHAIRMAN
- --------------------------------------------------------------------------------
Q. WHAT WERE THE MOST SIGNIFICANT FACTORS AFFECTING PERFORMANCE?
A. Both the Fund and the Trust benefited from portfolio structures designed to
manage volatility. Contributing to performance were essential service revenue
bonds, which outperformed tax-based general obligation bonds, as tax revenues
declined in the economic slowdown.
Insured bonds added to performance. Also adding to performance were
pre-refunded bonds,(1) a sector of the municipal bond market that we feel is an
important component of a defensive position over the long term.
As long-term investment managers, our focus is consistent throughout the
interest-rate cycle: we remain largely invested in the high-quality end of the
municipal bond market. High-quality bonds tend to be less volatile and more
liquid than lower-quality bonds.
The portfolios' concentration in the high-quality market contributed to
performance early in the year, as investors sought quality amid geopolitical
uncertainty. Later in the year, positions in liquid, high-quality credits also
enabled us to make strategic changes to take advantage of the opportunities
created by increased market volatility. However, our lack of participation in
the low-quality end of the market detracted from performance overall, as
investors were attracted to the high yield offered in that segment of the
market, boosting prices, especially in the second half of the year.
Q. PLEASE DESCRIBE THE OVERALL MARKET CONDITIONS DURING THE REPORTING PERIOD.
A. Geopolitical uncertainties surrounding the war with Iraq were the key drivers
of financial markets in the first half of the fiscal year, generating a flight
to quality on the part of investors. Fixed-income markets grew more volatile as
the year progressed, reflecting mixed economic data and lack of clarity on the
future direction of interest rates.
1
<Page>
- --------------------------------------------------------------------------------
Municipal bond markets also faced a mix of fundamental challenges, including
budget shortfalls, as tax revenue fell in the sluggish economic environment.
States seeking to take advantage of historically low borrowing costs helped to
increase the volume of new issues. New issuances were not without credit-quality
concerns in some areas.
On the demand side, institutional buyers were attracted to the relative
value of municipals compared with Treasuries. Retail buyers bought
intermittently when yields were attractive but retreated just as quickly when
yields fell.
(1) Pre-refunded bonds are older, tax-free bonds that typically pay coupons
higher than current market rates and that have been refinanced or "prepaid" by
the proceeds of a second bond issue. The proceeds of this second issuance are
used to "call" or pay off the original issue at its first call date. Until that
time, the monies are held in escrow and are usually invested in U.S. Treasuries.
As a result, pre-refunded bonds are generally deemed to have virtually no
default risk. Typically, when a bond becomes pre-refunded, it appreciates in
value because of its higher credit quality and improved marketability.
IMPORTANT PERFORMANCE AND OTHER INFORMATION
THE VIEWS OF THE FUND'S AND TRUST'S MANAGEMENT AND THE PORTFOLIO HOLDINGS
DESCRIBED IN THIS REPORT ARE AS OF SEPTEMBER 30, 2003; THESE VIEWS AND HOLDINGS
MAY HAVE CHANGED SUBSEQUENT TO THIS DATE AND THEY DO NOT GUARANTEE THE FUTURE
PERFORMANCE OF THE MARKETS OR THE FUND/TRUST. INFORMATION PROVIDED IN THIS
REPORT SHOULD NOT BE CONSIDERED A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
A NOTE ABOUT RISK: See Notes to Financial Statements for a discussion of
investment risks. For a more detailed discussion of the risks associated with
the Fund/Trust, please see the Fund's/Trust's Prospectus.
PERFORMANCE: PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. BECAUSE OF
ONGOING MARKET VOLATILITY, FUND/TRUST PERFORMANCE MAY BE SUBJECT TO SUBSTANTIAL
FLUCTUATION. The investment return and principal value of an investment in the
Fund/Trust will fluctuate so that shares, on any given day or when redeemed, may
be worth more or less than their original cost. The Fund/Trust offers additional
classes of shares with distinct pricing options. For a full description of the
differences in pricing alternatives, please see the Prospectus.
The Fund's/Trust's portfolios are actively managed and, therefore, allocations
are subject to change.
MUTUAL FUNDS ARE NOT INSURED BY THE FDIC, ARE NOT DEPOSITS OR OTHER OBLIGATIONS
OF, OR GUARANTEED BY BANKS AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. For more complete information about
this or any Lord Abbett Mutual Fund, including risks, charges and ongoing
expenses, please call your Investment Professional or Lord Abbett Distributor
LLC at 888-522-2388 for a Prospectus. An investor should read the Prospectus
carefully before investing.
2
<Page>
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of General Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The performance of
other classes will be greater than or less than the performance shown in the
graph below due to different sales loads and expenses applicable to such
classes. The graph and performance table below do not reflect the deduction of
taxes that a shareholder would pay on fund distributions or the redemption of
fund shares. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND
THE FUND (CLASS A SHARES) LEHMAN MUNICIPAL LIPPER AVERAGE OF
(CLASS A SHARES) AT MAXIMUM LEHMAN MUNICIPAL LONG CURRENT GENERAL MUNICIPAL
AT NET ASSET VALUE OFFERING PRICE(2) BOND INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
1993 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
1994 $ 9,437 $ 9,130 $ 9,756 $ 9,275 $ 9,628
1995 $ 10,366 $ 10,029 $ 10,847 $ 10,040 $ 10,569
1996 $ 11,020 $ 10,662 $ 11,502 $ 10,730 $ 11,167
1997 $ 12,044 $ 11,653 $ 12,539 $ 11,694 $ 12,136
1998 $ 13,200 $ 12,771 $ 13,632 $ 12,879 $ 13,134
1999 $ 12,691 $ 12,279 $ 13,536 $ 12,436 $ 12,733
2000 $ 13,328 $ 12,895 $ 14,371 $ 13,051 $ 13,332
2001 $ 14,749 $ 14,270 $ 15,866 $ 14,338 $ 14,609
2002 $ 16,013 $ 15,493 $ 17,283 $ 15,605 $ 15,718
2003 $ 16,410 $ 15,877 $ 17,955 $ 15,970 $ 16,173
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS LIFE OF CLASS
Class A(4) -0.81% 3.77% 4.73% --
Class B(5) -2.06% 3.66% -- 5.30%
Class C(6) 1.80% 3.79% -- 5.40%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
(5) The Class B shares were first offered on 8/1/96. Performance reflects the
deduction of a CDSC of 4% for 1 year, 1% for 5 years and 0% for the life of the
Class.
(6) The Class C shares were first offered on 7/15/96. The 1% CDSC for Class C
shares normally applies before the first anniversary of the purchase date.
Performance is at net asset value.
3
<Page>
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of California Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The performance of
the other class will be greater than or less than the performance shown in the
graph below due to different sales loads and expenses applicable to such class.
The graph and performance table below do not reflect the deduction of taxes that
a shareholder would pay on fund distributions or the redemption of fund shares.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND LIPPER AVERAGE OF
THE FUND (CLASS A SHARES) LEHMAN LEHMAN MUNICIPAL CALIFORNIA
(CLASS A SHARES) AT MAXIMUM MUNICIPAL LONG CURRENT MUNICIPAL
AT NET ASSET VALUE OFFERING PRICE(2) BOND INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
1993 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
1994 $ 9,342 $ 9,038 $ 9,756 $ 9,275 $ 9,613
1995 $ 10,148 $ 9,818 $ 10,847 $ 10,040 $ 10,537
1996 $ 10,703 $ 10,355 $ 11,502 $ 10,730 $ 11,247
1997 $ 11,601 $ 11,224 $ 12,539 $ 11,694 $ 12,256
1998 $ 12,629 $ 12,219 $ 13,632 $ 12,879 $ 13,342
1999 $ 12,111 $ 11,718 $ 13,536 $ 12,436 $ 12,951
2000 $ 12,913 $ 12,494 $ 14,371 $ 13,051 $ 13,762
2001 $ 14,348 $ 13,882 $ 15,866 $ 14,338 $ 15,036
2002 $ 15,445 $ 14,943 $ 17,283 $ 15,605 $ 16,174
2003 $ 15,591 $ 15,084 $ 17,955 $ 15,970 $ 16,433
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS LIFE OF CLASS
Class A(4) -2.38% 3.62% 4.19% --
Class C(5) 0.26% 3.65% -- 5.06%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance. Each index is composed of municipal bonds from many states while
the Fund is a single-state municipal bond portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
(5) The Class C shares were first offered on 7/15/96. The 1% CDSC for Class C
shares normally applies before the first anniversary of the purchase date.
Performance is at net asset value.
4
<Page>
CONNECTICUT TAX-FREE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of Connecticut Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The graph and
performance table below do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND
THE FUND (CLASS A SHARES) LEHMAN MUNICIPAL LIPPER AVERAGE OF
(CLASS A SHARES) AT MAXIMUM LEHMAN MUNICIPAL LONG CURRENT CONNECTICUT MUNICIPAL
AT NET ASSET VALUE OFFERING PRICE(2) BOND INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
1993 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
1994 $ 9,487 $ 9,179 $ 9,756 $ 9,275 $ 9,528
1995 $ 10,485 $ 10,144 $ 10,847 $ 10,040 $ 10,459
1996 $ 11,083 $ 10,722 $ 11,502 $ 10,730 $ 11,022
1997 $ 12,031 $ 11,640 $ 12,539 $ 11,694 $ 11,941
1998 $ 13,032 $ 12,609 $ 13,632 $ 12,879 $ 12,898
1999 $ 12,636 $ 12,226 $ 13,536 $ 12,436 $ 12,643
2000 $ 13,182 $ 12,754 $ 14,371 $ 13,051 $ 13,242
2001 $ 14,589 $ 14,114 $ 15,866 $ 14,338 $ 14,540
2002 $ 15,871 $ 15,355 $ 17,283 $ 15,605 $ 15,708
2003 $ 16,339 $ 15,808 $ 17,955 $ 15,970 $ 16,143
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
Class A(4) -0.40% 3.94% 4.68%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance. Each index is composed of municipal bonds from many states while
the Fund is a single-state municipal bond portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
5
<Page>
HAWAII TAX-FREE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of Hawaii Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The graph and
performance table below do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND
THE FUND (CLASS A SHARES) LEHMAN MUNICIPAL LIPPER AVERAGE OF
(CLASS A SHARES) AT MAXIMUM OFFERING LEHMAN MUNICIPAL LONG CURRENT HAWAII MUNICIPAL
AT NET ASSET VALUE PRICE(2) BOND INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
1993 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
1994 $ 9,446 $ 9,139 $ 9,756 $ 9,275 $ 9,676
1995 $ 10,418 $ 10,079 $ 10,847 $ 10,040 $ 10,510
1996 $ 11,036 $ 10,677 $ 11,502 $ 10,730 $ 11,121
1997 $ 11,965 $ 11,576 $ 12,539 $ 11,694 $ 12,016
1998 $ 12,993 $ 12,571 $ 13,632 $ 12,879 $ 12,957
1999 $ 12,563 $ 12,154 $ 13,536 $ 12,436 $ 12,654
2000 $ 13,183 $ 12,755 $ 14,371 $ 13,051 $ 13,266
2001 $ 14,357 $ 13,890 $ 15,866 $ 14,338 $ 14,551
2002 $ 15,617 $ 15,110 $ 17,283 $ 15,605 $ 15,732
2003 $ 15,908 $ 15,391 $ 17,955 $ 15,970 $ 16,246
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
Class A(4) -1.37% 3.43% 4.40%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance. Each index is composed of municipal bonds from many states while
the Fund is a single-state municipal bond portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
6
<Page>
MINNESOTA TAX-FREE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of Minnesota Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The graph and
performance table below do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND THE FUND LEHMAN MUNICIPAL LIPPER AVERAGE
(CLASS A SHARES) (CLASS A SHARES) LEHMAN MUNICIPAL LONG CURRENT OF MINNESOTA MUNICIPAL
AT NET ASSET VALUE AT MAXIMUM OFFERING PRICE(2) BOND INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
27-Dec-94 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
30-Sep-95 $ 11,023 $ 10,665 $ 11,280 $ 11,139 $ 11,073
30-Sep-96 $ 11,512 $ 11,138 $ 11,961 $ 11,905 $ 11,645
30-Sep-97 $ 12,545 $ 12,137 $ 13,040 $ 12,974 $ 12,563
30-Sep-98 $ 13,564 $ 13,123 $ 14,176 $ 14,289 $ 13,546
30-Sep-99 $ 13,195 $ 12,766 $ 14,077 $ 13,798 $ 13,248
30-Sep-00 $ 13,897 $ 13,445 $ 14,945 $ 14,480 $ 13,796
30-Sep-01 $ 15,367 $ 14,868 $ 16,500 $ 15,908 $ 15,040
30-Sep-02 $ 16,682 $ 16,140 $ 17,973 $ 17,314 $ 16,161
30-Sep-03 $ 17,278 $ 16,717 $ 18,672 $ 17,719 $ 16,701
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS LIFE OF FUND
Class A(4) 0.27% 4.28% 6.04%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses
and is calculated from December 31, 1994. The performance of the indices is not
necessarily representative of the Fund's performance. Each index is composed of
municipal bonds from many states while the Fund is a single-state municipal bond
portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc. Calculated from December 31, 1994.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return. The Class A share inception date is 12/27/94.
7
<Page>
MISSOURI TAX-FREE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of Missouri Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The graph and
performance table below do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND THE FUND LEHMAN MUNICIPAL LIPPER AVERAGE OF
(CLASS A SHARES) (CLASS A SHARES) AT LEHMAN MUNICIPAL LONG CURRENT MISSOURI MUNICIPAL
AT NET ASSET VALUE MAXIMUM OFFERING PRICE(2) BOND INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
30-Sep-93 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
30-Sep-94 $ 9,478 $ 9,170 $ 9,756 $ 9,275 $ 9,578
30-Sep-95 $ 10,445 $ 10,105 $ 10,847 $ 10,040 $ 10,565
30-Sep-96 $ 11,023 $ 10,665 $ 11,502 $ 10,730 $ 11,162
30-Sep-97 $ 11,930 $ 11,542 $ 12,539 $ 11,694 $ 12,087
30-Sep-98 $ 12,855 $ 12,437 $ 13,632 $ 12,879 $ 13,039
30-Sep-99 $ 12,566 $ 12,158 $ 13,536 $ 12,436 $ 12,716
30-Sep-00 $ 13,147 $ 12,719 $ 14,371 $ 13,051 $ 13,305
30-Sep-01 $ 14,610 $ 14,135 $ 15,866 $ 14,338 $ 14,634
30-Sep-02 $ 15,730 $ 15,219 $ 17,283 $ 15,605 $ 15,777
30-Sep-03 $ 16,231 $ 15,703 $ 17,955 $ 15,970 $ 16,247
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
Class A(4) -0.15% 4.08% 4.61%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance. Each index is composed of municipal bonds from many states while
the Fund is a single-state municipal bond portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
8
<Page>
NEW JERSEY TAX-FREE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of New Jersey Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The graph and
performance table below do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND THE FUND LEHMAN MUNICIPAL LIPPER AVERAGE OF
(CLASS A SHARES) (CLASS A SHARES) AT LEHMAN MUNICIPAL LONG CURRENT MISSOURI MUNICIPAL
AT NET ASSET VALUE MAXIMUM OFFERING PRICE(2) BOND INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
September 30,1993 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
September 30,1994 $ 9,610 $ 9,298 $ 9,756 $ 9,275 $ 9,582
September 30,1995 $ 10,569 $ 10,226 $ 10,847 $ 10,040 $ 10,517
September 30,1996 $ 11,234 $ 10,869 $ 11,502 $ 10,730 $ 11,089
September 30,1997 $ 12,161 $ 11,765 $ 12,539 $ 11,694 $ 11,998
September 30,1998 $ 13,295 $ 12,863 $ 13,632 $ 12,879 $ 12,968
September 30,1999 $ 12,799 $ 12,383 $ 13,536 $ 12,436 $ 12,653
September 30,2000 $ 13,479 $ 13,041 $ 14,371 $ 13,051 $ 13,216
September 30,2001 $ 14,884 $ 14,400 $ 15,866 $ 14,338 $ 14,461
September 30,2002 $ 16,068 $ 15,546 $ 17,283 $ 15,605 $ 15,515
September 30,2003 $ 16,279 $ 15,750 $ 17,955 $ 15,970 $ 15,970
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
Class A(4) -1.97% 3.43% 4.64%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance. Each index is composed of municipal bonds from many states while
the Fund is a single-state municipal bond portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
9
<Page>
NEW YORK TAX-FREE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of New York Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The performance of
the other class will be greater than or less than the performance shown in the
graph below due to different sales loads and expenses applicable to such class.
The graph and performance table below do not reflect the deduction of taxes that
a shareholder would pay on fund distributions or the redemption of fund shares.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART
<Table>
<Caption>
THE FUND THE FUND LEHMAN MUNICIPAL LIPPER AVERAGE OF
(CLASS A SHARES) (CLASS A SHARES) AT LEHMAN MUNICIPAL LONG CURRENT MISSOURI MUNICIPAL
AT NET ASSET VALUE MAXIMUM OFFERING PRICE(2) BOND INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
30-Sep-93 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
30-Sep-94 $ 9,478 $ 9,170 $ 9,756 $ 9,275 $ 9,578
30-Sep-95 $ 10,445 $ 10,105 $ 10,847 $ 10,040 $ 10,565
30-Sep-96 $ 11,023 $ 10,665 $ 11,502 $ 10,730 $ 11,162
30-Sep-97 $ 11,930 $ 11,542 $ 12,539 $ 11,694 $ 12,087
30-Sep-98 $ 12,855 $ 12,437 $ 13,632 $ 12,879 $ 13,039
30-Sep-99 $ 12,566 $ 12,158 $ 13,536 $ 12,436 $ 12,716
30-Sep-00 $ 13,147 $ 12,719 $ 14,371 $ 13,051 $ 13,305
30-Sep-01 $ 14,610 $ 14,135 $ 15,866 $ 14,338 $ 14,634
30-Sep-02 $ 15,730 $ 15,219 $ 17,283 $ 15,605 $ 15,777
30-Sep-03 $ 16,231 $ 15,703 $ 17,955 $ 15,970 $ 16,247
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS LIFE OF CLASS
Class A(4) -0.77% 4.35% 4.57% --
Class C(5) 1.88% 4.40% -- 5.53%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance. Each index is composed of municipal bonds from many states while
the Fund is a single-state municipal bond portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
(5) The Class C shares were first offered on 7/15/96. The 1% CDSC for
Class C shares normally applies before the first anniversary of the purchase
date. Performance is at net asset value.
10
<Page>
TEXAS TAX-FREE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of Texas Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The graph and
performance table below do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND THE FUND LEHMAN MUNICIPAL LIPPER AVERAGE OF
(CLASS A SHARES) (CLASS A SHARES) AT LEHMAN MUNICIPAL LONG CURRENT MISSOURI MUNICIPAL
AT NET ASSET VALUE MAXIMUM OFFERING PRICE(2) BOND INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
30-Sep-93 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
30-Sep-94 $ 9,541 $ 9,231 $ 9,756 $ 9,275 $ 9,732
30-Sep-95 $ 10,604 $ 10,259 $ 10,847 $ 10,040 $ 10,778
30-Sep-96 $ 11,251 $ 10,885 $ 11,502 $ 10,730 $ 11,455
30-Sep-97 $ 12,291 $ 11,892 $ 12,539 $ 11,694 $ 12,452
30-Sep-98 $ 13,427 $ 12,991 $ 13,632 $ 12,879 $ 13,493
30-Sep-99 $ 12,761 $ 12,346 $ 13,536 $ 12,436 $ 13,015
30-Sep-00 $ 13,289 $ 12,858 $ 14,371 $ 13,051 $ 13,472
30-Sep-01 $ 14,792 $ 14,312 $ 15,866 $ 14,338 $ 14,764
30-Sep-02 $ 16,205 $ 15,678 $ 17,283 $ 15,605 $ 15,906
30-Sep-03 $ 16,743 $ 16,199 $ 17,955 $ 15,970 $ 16,455
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
Class A(4) -0.02% 3.83% 4.95%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance. Each index is composed of municipal bonds from many states while
the Fund is a single-state municipal bond portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%
(3) Source: Lipper, Inc.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
11
<Page>
WASHINGTON TAX-FREE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of Other State Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The graph and
performance table below do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND
THE FUND (CLASS A SHARES) AT LEHMAN MUNICIPAL LIPPER AVERAGE OF
(CLASS A SHARES) MAXIMUM OFFERING LEHMAN MUNICIPAL BOND LONG CURRENT OTHER STATE MUNICIPAL
AT NET ASSET VALUE PRICE(2) INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
30-Sep-93 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
30-Sep-94 $ 9,435 $ 9,128 $ 9,756 $ 9,275 $ 9,694
30-Sep-95 $ 10,423 $ 10,084 $ 10,847 $ 10,040 $ 10,561
30-Sep-96 $ 11,132 $ 10,770 $ 11,502 $ 10,730 $ 11,169
30-Sep-97 $ 12,225 $ 11,827 $ 12,539 $ 11,694 $ 12,061
30-Sep-98 $ 13,384 $ 12,949 $ 13,632 $ 12,879 $ 13,000
30-Sep-99 $ 12,826 $ 12,409 $ 13,536 $ 12,436 $ 12,702
30-Sep-00 $ 13,454 $ 13,017 $ 14,371 $ 13,051 $ 13,288
30-Sep-01 $ 14,924 $ 14,439 $ 15,866 $ 14,338 $ 14,503
30-Sep-02 $ 16,224 $ 15,697 $ 17,283 $ 15,605 $ 15,566
30-Sep-03 $ 16,671 $ 16,129 $ 17,955 $ 15,970 $ 15,939
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
Class A(4) -0.61% 3.81% 4.90%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance. Each index is composed of municipal bonds from many states while
the Fund is a single-state municipal bond portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
12
<Page>
INSURED INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of Insured Municipal Debt Funds and the Lehman
3-10 Year Insured Tax-Exempt Bond Index, assuming reinvestment of all dividends
and distributions.(1) The performance of other classes will be greater than or
less than the performance shown in the graph below due to different sales loads
and expenses applicable to such classes. The graph and performance table below
do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND THE FUND LIPPER AVERAGE
(CLASS A SHARES) (CLASS A SHARES) LEHMAN 3-10 YEAR OF INSURED
AT NET ASSET VALUE AT MAXIMUM OFFERING PRICE(2) INSURED TAX-EXEMPT BOND INDEX(1) MUNICIPAL DEBT FUNDS(3)
30-Jun-03 $ 10,000 $ 9,675 $ 10,000 $ 10,000
31-Jul-03 $ 9,640 $ 9,327 $ 9,586 $ 9,696
31-Aug-03 $ 9,723 $ 9,407 $ 9,683 $ 9,774
30-Sep-03 $ 10,017 $ 9,691 $ 9,978 $ 10,055
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIOD ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
LIFE OF CLASS
Class A(4) -3.13%
Class B(5) -4.94%
Class C(6) -1.03%
Class P(7) 0.11%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for period shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
(5) The Class B shares were first offered on 6/30/03. Performance
reflects the deduction of a CDSC of 5% for the life of the Class.
(6) The Class C shares were first offered on 6/30/03. The 1% CDSC for Class C
shares normally applies before the first anniversary of the purchase date.
(7) The Class P shares were first offered on 6/30/03. Performance is at net
asset value.
13
<Page>
FLORIDA TAX-FREE TRUST
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of Florida Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The performance of
the other class will be greater than or less than the performance shown in the
graph below due to different sales loads and expenses applicable to such class.
The graph and performance table below do not reflect the deduction of taxes that
a shareholder would pay on fund distributions or the redemption of fund shares.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND
THE FUND (CLASS A SHARES) LEHMAN MUNICIPAL LIPPER AVERAGE
(CLASS A SHARES) AT MAXIMUM LEHMAN MUNICIPAL LONG CURRENT OF FLORIDA MUNICIPAL
AT NET ASSET VALUE OFFERING PRICE(2) BOND INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
1993 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
1994 $ 9,406 $ 9,100 $ 9,756 $ 9,275 $ 9,549
1995 $ 10,338 $ 10,002 $ 10,847 $ 10,040 $ 10,573
1996 $ 10,851 $ 10,498 $ 11,502 $ 10,730 $ 11,181
1997 $ 11,676 $ 11,296 $ 12,539 $ 11,694 $ 12,085
1998 $ 12,632 $ 12,221 $ 13,632 $ 12,879 $ 13,083
1999 $ 12,172 $ 11,776 $ 13,536 $ 12,436 $ 12,713
2000 $ 12,687 $ 12,275 $ 14,371 $ 13,051 $ 13,314
2001 $ 14,043 $ 13,587 $ 15,866 $ 14,338 $ 14,587
2002 $ 15,181 $ 14,687 $ 17,283 $ 15,605 $ 15,661
2003 $ 15,578 $ 15,072 $ 17,955 $ 15,970 $ 16,095
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS LIFE OF CLASS
Class A(4) -0.77% 3.59% 4.18% --
Class C(5) 1.97% 3.63% -- 4.83%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance. Each index is composed of municipal bonds from many states while
the Fund is a single-state municipal bond portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
(5) The Class C shares were first offered on 7/15/96. The 1% CDSC for
Class C shares normally applies before the first anniversary of the purchase
date. Performance is at net asset value.
14
<Page>
GEORGIA TAX-FREE TRUST
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of Georgia Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The graph and
performance table below do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND
THE FUND (CLASS A SHARES) LEHMAN MUNICIPAL LIPPER AVERAGE
(CLASS A SHARES) AT MAXIMUM LEHMAN MUNICIPAL LONG CURRENT OF GEORGIA
AT NET ASSET VALUE OFFERING PRICE(2) BOND INDEX(1) COUPON INDEX(1) MUNICIPAL DEBT FUNDS(3)
27-Dec-94 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
30-Sep-95 $ 11,127 $ 10,765 $ 11,280 $ 11,139 $ 11,193
30-Sep-96 $ 11,944 $ 11,556 $ 11,961 $ 11,905 $ 11,858
30-Sep-97 $ 13,107 $ 12,681 $ 13,040 $ 12,974 $ 12,920
30-Sep-98 $ 14,475 $ 14,005 $ 14,176 $ 14,289 $ 14,007
30-Sep-99 $ 13,995 $ 13,540 $ 14,077 $ 13,798 $ 13,567
30-Sep-00 $ 14,932 $ 14,447 $ 14,945 $ 14,480 $ 14,270
30-Sep-01 $ 16,830 $ 16,283 $ 16,500 $ 15,908 $ 15,650
30-Sep-02 $ 18,391 $ 17,793 $ 17,973 $ 17,314 $ 16,896
30-Sep-03 $ 18,981 $ 18,364 $ 18,672 $ 17,719 $ 17,391
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS LIFE OF FUND
Class A(4) -0.12% 4.89% 7.18%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses
and is calculated from December 31, 1994. The performance of the indices is not
necessarily representative of the Fund's performance. Each index is composed of
municipal bonds from many states while the Fund is a single-state municipal bond
portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc. Calculated from December 31, 1994.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return. The Class A share inception date is 12/27/94.
15
<Page>
MICHIGAN TAX-FREE TRUST
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of Michigan Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The graph and
performance table below do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND
THE FUND (CLASS A SHARES) LEHMAN MUNICIPAL LIPPER AVERAGE
(CLASS A SHARES) AT MAXIMUM LEHMAN MUNICIPAL LONG CURRENT OF MICHIGAN MUNICIPAL
AT NET ASSET VALUE OFFERING PRICE(2) BOND INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
30-Sep-93 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
30-Sep-94 $ 9,497 $ 9,188 $ 9,756 $ 9,275 $ 9,694
30-Sep-95 $ 10,550 $ 10,207 $ 10,847 $ 10,040 $ 10,661
30-Sep-96 $ 11,157 $ 10,794 $ 11,502 $ 10,730 $ 11,271
30-Sep-97 $ 12,152 $ 11,757 $ 12,539 $ 11,694 $ 12,194
30-Sep-98 $ 13,206 $ 12,776 $ 13,632 $ 12,879 $ 13,180
30-Sep-99 $ 12,823 $ 12,406 $ 13,536 $ 12,436 $ 12,848
30-Sep-00 $ 13,625 $ 13,183 $ 14,371 $ 13,051 $ 13,469
30-Sep-01 $ 15,290 $ 14,793 $ 15,866 $ 14,338 $ 14,769
30-Sep-02 $ 16,754 $ 16,209 $ 17,283 $ 15,605 $ 15,924
30-Sep-03 $ 17,283 $ 16,721 $ 17,955 $ 15,970 $ 16,378
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
Class A(4) -0.15% 4.82% 5.27%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance. Each index is composed of municipal bonds from many states while
the Fund is a single-state municipal bond portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc. Calculated from November 30, 1992.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
16
<Page>
PENNSYLVANIA TAX-FREE TRUST
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in Lipper's Average of Pennsylvania Municipal Debt Funds, the Lehman
Municipal Bond Index and the Lehman Municipal Long Current Coupon Index,
assuming reinvestment of all dividends and distributions.(1) The graph and
performance table below do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND THE FUND LEHMAN MUNICIPAL LIPPER AVERAGE OF
(CLASS A SHARES) (CLASS A SHARES) LEHMAN MUNICIPAL LONG CURRENT PENNSYLVANIA MUNICIPAL
AT NET ASSET VALUE AT MAXIMUM OFFERING PRICE(2) BOND INDEX(1) COUPON INDEX(1) DEBT FUNDS(3)
30-Sep-93 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
30-Sep-94 $ 9,485 $ 9,177 $ 9,756 $ 9,275 $ 9,636
30-Sep-95 $ 10,487 $ 10,146 $ 10,847 $ 10,040 $ 10,568
30-Sep-96 $ 11,105 $ 10,744 $ 11,502 $ 10,730 $ 11,187
30-Sep-97 $ 12,087 $ 11,694 $ 12,539 $ 11,694 $ 12,119
30-Sep-98 $ 13,198 $ 12,769 $ 13,632 $ 12,879 $ 13,069
30-Sep-99 $ 12,816 $ 12,400 $ 13,536 $ 12,436 $ 12,702
30-Sep-00 $ 13,473 $ 13,035 $ 14,371 $ 13,051 $ 13,258
30-Sep-01 $ 14,964 $ 14,478 $ 15,866 $ 14,338 $ 14,522
30-Sep-02 $ 16,246 $ 15,718 $ 17,283 $ 15,605 $ 15,640
30-Sep-03 $ 16,656 $ 16,115 $ 17,955 $ 15,970 $ 16,114
</Table>
FISCAL YEAR-END 9/30
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE YEAR ENDED SEPTEMBER 30, 2003
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
Class A(4) -0.81% 4.07% 4.89%
</Table>
(1) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indices is not necessarily representative of the Fund's
performance. Each index is composed of municipal bonds from many states while
the Fund is a single-state municipal bond portfolio.
(2) Reflects the deduction of the maximum initial sales charge of 3.25%.
(3) Source: Lipper, Inc.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% applicable to Class A
shares, with all dividends and distributions reinvested for periods shown ended
September 30, 2003 using the SEC required uniform method to compute total
return.
17
<Page>
SCHEDULE OF INVESTMENTS
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 97.86%
EDUCATION 16.45%
CA Ed Fac Auth Rev Ref
Pepperdine Univ Ser A(10) 5.00% 9/1/2033 AAA $ 10,000 $ 10,085,400
CA Ed Fac Auth Rev USC 5.00% 10/1/2033 AA+ 10,000 10,097,900
Delaware St Econ Dev Auth Rev
DE Tech Pk Univ De Proj(2) 6.00% 2/1/2021 AAA 900 1,030,590
District of Columbia Rev
James F Oyster Elem Sch Pilot(1) 6.25% 11/1/2021 A 450 494,802
Forest Hills MI Pub Schs(10) 5.25% 5/1/2020 Aaa 3,200 3,442,656
Glendale AZ Ind Dev Auth
Midwestern Univ Ser A 5.75% 5/15/2021 BBB+ 1,000 1,074,200
Glendale AZ Ind Dev Auth
Midwestern Univ Ser A 5.875% 5/15/2031 BBB+ 1,000 1,040,700
IA Higher Ed Ln Auth Rev Prv
Clg Fac Central College Pj(16) 5.45% 10/1/2026 AA 250 258,337
IA Higher Ed Ln Auth Rev
Warthburg College(1) 5.50% 10/1/2033 A 1,500 1,564,830
Indiana St Ed Fac Auth Rev 6.65% 3/1/2019 Aaa 10,740 11,191,510
Louisiana St Univ & Agric &
Mech Clg Hlth Sciences Ctr Pj(15) 6.375% 5/1/2031 AAA 2,290 2,649,599
MA St Dev Fin Agy Rev Boston
Univ Ser P 5.375% 5/15/2039 A3 1,000 999,150
MA St Dev Fin Agy Rev Boston
Univ Ser P 6.00% 5/15/2059 A3 1,000 1,092,490
Maricopa Cnty AZ Sch Dist #69
Paradise VY Ref-Second Ser(10) 5.00% 7/1/2013 AAA 2,150 2,404,797
Massachusetts St Hlth & Ed
Facs Auth Rev Boston College(15)(14) 5.125% 6/1/2033 AAA 3,810 3,886,848
NC Cap Facs Fin Agy Rev
RITES-PA-1149 RIBs 9.129% 7/1/2042 AA+ 6,950 7,402,584
New York St Dorm Auth Rev
Fashion Inst Tech(11) 5.50% 7/1/2030 AAA 400 431,792
Ohio St Higher Edl Fac Rev
Commn Oberlin College Proj 5.00% 10/1/2033 AA 5,000 5,043,050
Oregon St Hlth Hsg Ed & Cul
Fac Auth Reed Clg Pj Ser A 5.75% 7/1/2032 AA- 3,800 4,159,556
Rhode Island St Hlth & Ed Bldg
Corp Rev Hgh Ed Fac Brown Univ 6.00% 9/1/2025 AA+ 7,070 7,751,972
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
TN St Sch Brd Auth Higher Ed
Fac Ser A(11) 5.125% 5/1/2021 AAA $ 615 $ 648,800
TN St Sch Brd Auth Higher Ed
Fac Ser A 5.625% 5/1/2030 AA- 150 158,985
Tulsa OK Ind Auth Rev Ser A(15) 5.375% 10/1/2020 Aaa 3,170 3,407,623
Univ Central AR Rev Hsg Sys(11) 6.50% 1/1/2031 AAA 2,425 2,832,958
Univ VT & St Agric College Univ VT(2) 5.125% 10/1/2037 AAA 1,150 1,178,727
University NC Sys Pool Rev Ser A(2) 5.00% 4/1/2027 AAA 1,900 1,941,420
University VA Univ Rev Gen-Ser B 5.00% 6/1/2033 AAA 5,000 5,095,650
University VA Univ Rev
Residuals Ser 856 RIBs(d) 8.68% 6/1/2019 Aaa 1,925 2,173,594
University VA Univ Rev
Residuals Ser 856 RIBs(d) 8.68% 6/1/2020 Aaa 2,022 2,250,759
University VA Univ Rev
Residuals Ser 856 RIBs(d) 8.68% 6/1/2021 Aaa 2,122 2,327,788
West Virginia Univ Rev Univ
Sys WV Pj Ser A(2) Zero Coupon 4/1/2024 AAA 2,880 1,007,712
West Virginia Univ Rev Univ
Sys WV Pj Ser A(2) Zero Coupon 4/1/2026 AAA 800 247,184
-------------
TOTAL 99,373,963
-------------
GENERAL OBLIGATION 17.20%
Akron OH Impt 5.80% 11/1/2020 AA- 575 651,699
Athens OH City Sch Dist Fac
Constr & Impt(11) 6.00% 12/1/2024 AAA 500 577,975
Bessemer AL School(2) 5.60% 2/1/2030 Aaa 2,000 2,142,640
Bremerton WA(2) 5.25% 12/1/2027 Aaa 1,000 1,032,970
California St Drivers-Ser 352 RIBs 9.288% 2/1/2030 AAA 2,000 2,086,280
Canton OH Sch Dist Ser A(15) 5.625% 12/1/2023 AAA 2,900 3,188,869
Cassia & Twin Falls Cntys
Idaho Jt Sch Dist No 151 Ref(10) 5.50% 8/1/2012 Aaa 950 1,088,158
Chesapeake VA Wtr & Swr-Ser B(10) 5.00% 6/1/2033 AAA 1,000 1,014,480
Clear Creek CO Sch Dist #
Re I Ref(11) 5.00% 12/1/2019 AAA 650 691,717
Dallas TX 5.75% 2/15/2020 AAA 1,615 1,800,224
Delaware Valley PA Regl Fin
Auth Loc Govt Rev Ser C(2) 7.75% 7/1/2027 AAA 1,000 1,383,120
Fairfield OH City Sch Dist
Ref Sch Impt(10) 5.375% 12/1/2020 AAA 1,410 1,525,409
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Florida St Brd Ed Ref Cap
Outlay Ser A(15) 5.00% 6/1/2013 AAA $ 2,500 $ 2,789,825
Foothill De Anza CA Cmnty
College Dist Cap Apprec(15) Zero Coupon 8/1/2030 AAA 4,505 1,059,080
Georgetown Cnty SC Sch Dist(11) 5.25% 3/1/2020 AAA 2,485 2,651,247
Hawaii St Ref Ser DB(15) 5.25% 9/1/2013 AAA 3,400 3,870,118
Jefferson Cnty AL Sch(11) 5.50% 2/15/2020 AAA 1,000 1,091,740
Lake Orion MI Cmnty Sch Dist
Ser B 5.25% 5/1/2025 AAA 4,900 5,107,074
Linn Cnty OR Sch Dist #55
Sweet Home(11) 5.50% 6/15/2020 AAA 1,000 1,096,420
Linn Cnty OR Sch Dist #55
Sweet Home(11) 5.50% 6/15/2025 AAA 2,245 2,415,283
Los Angeles Calif Uni Sch
Dist Ser A(15) 5.00% 1/1/2028 AAA 5,000 5,072,850
Marion OH City Sch Dist Sch
Fac Constr & Impt(11) 5.625% 12/1/2022 AAA 500 555,215
New Jersey St Var Purp
Ref-Ser J(15)(14) 5.00% 7/15/2009 AAA 6,400 7,237,952
New York NY Ser A 6.00% 5/15/2030 A 2,175 2,365,573
Omaha NE Ser B 5.25% 12/1/2025 AAA 11,900 11,941,769
Oregon St Alternate Energy Pj
Ser A AMT 5.00% 1/1/2015 AA 1,415 1,496,348
Oregon St Alternate Energy Pj
Ser A AMT 5.05% 1/1/2016 AA 1,795 1,893,689
Oregon St Alternate Energy Pj
Ser A AMT 5.10% 1/1/2017 AA 980 1,029,539
Paw Paw MI Pub Sch Dist Sch
Bldg & Site 6.00% 5/1/2030 AAA 550 620,164
Philadelphia PA Sch Dist Ser A(11) 5.75% 2/1/2030 AAA 1,200 1,316,196
Powell Ohio(10) 5.50% 12/1/2032 AAA 1,280 1,358,362
Richland Cnty SC 5.375% 3/1/2030 Aa1 1,140 1,211,307
Richland Cnty SC 5.375% 3/1/2031 Aa1 1,195 1,268,803
Richland Cnty SC 5.375% 3/1/2032 Aa1 1,255 1,330,538
Richland Cnty SC 5.375% 3/1/2033 Aa1 1,320 1,398,408
Richmond VA(11) 5.50% 1/15/2018 AAA 500 559,100
South Wash Cnty MN Indpt Sch
Dist #833 Ser A(15) 5.50% 2/1/2018 AAA 5,065 5,586,898
South Wash Cnty MN Indpt Sch
Dist #833 Ser A(15) 5.50% 2/1/2019 AAA 2,990 3,280,389
Sunman Dearborn IN Inter Sch
Bldg Corp First Mtg(10) 5.00% 1/15/2021 AAA 1,105 1,149,753
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Teays Valley OH Loc Sch Dist
Sch Fac Constr 2 Impt(10) 5.375% 12/1/2020 Aaa $ 500 $ 536,620
Tennessee St Ser A(11) 5.00% 8/1/2009 AAA 2,465 2,789,616
Texas St Wtr Dev Brd 7.15% 8/1/2035 Aa1 1,915 2,000,696
Washtenaw Cnty MI Multi Lake
San Sew Sys Sylvan Twp Wtr(15) 4.75% 5/1/2021 AAA 700 715,071
Weber Cnty UT Sch Dist Ser B 5.00% 6/15/2021 Aaa 1,485 1,539,618
West Virginia St Pub Svc of Pj(15) 5.75% 6/1/2025 AAA 1,800 1,980,792
West Virginia St Ser D(10) 6.50% 11/1/2026 AAA 2,000 2,385,720
Weston CT 5.00% 8/1/2023 Aaa 420 433,234
Whitehall MI Dist Sch 5.50% 5/1/2019 AAA 1,400 1,548,778
Wood Cnty OH Pub Libr Impt(15) 5.875% 12/1/2022 Aaa 1,000 1,140,100
Wyandotte Cnty KS Sch 204
Bonner Springs Ser A(11) 5.60% 9/1/2020 Aaa 855 944,459
-------------
TOTAL 103,951,885
-------------
HEALTHCARE 12.75%
Abag Fin Auth for Nonprofit
Corp CA Ctfs Partn Woods Oblig(1) 6.20% 11/1/2029 A 1,000 1,083,790
AZ Hlth Fac Auth Rev AZ
Hlthcare Pooled Fin-C(10) 5.50% 6/1/2014 AAA 1,130 1,302,404
Cape Girardeau Cnty MO Ind
Dev Auth Health Care Facs Rev 5.75% 6/1/2032 A-(c) 500 510,550
Clackamas Cnty OR Hosp Fac
Legacy Hlth Sys(15)(14) 5.00% 2/15/2015 AAA 1,600 1,739,280
Clackamas Cnty OR Hosp Fac
Legacy Hlth Sys(15)(14) 5.00% 2/15/2016 AAA 1,000 1,078,210
Colorado Hlth Fac Auth Rev
Catholic Hlth 5.25% 9/1/2024 AA 5,065 5,226,776
Colorado Hlth Fac Auth Rev
Portercare Adventis Hlth 6.625% 11/15/2026 A 2,000 2,179,000
Erie Cnty Ohio Hosp Facs Rev
Firelands Regl Med Ctr Ser A 5.50% 8/15/2022 A 1,000 1,025,190
Fargo ND Health Sys Rev
Meritcare Obligated Group A(15) 5.375% 6/1/2027 AAA 1,000 1,030,640
Fargo ND Health Sys Rev
Meritcare Obligated Ser A(2) 5.125% 6/1/2027 AAA 2,905 2,940,267
Harris Cnty TX Hlth Fac Mem
Hermann Hlthcare Ser A 6.375% 6/1/2029 A 1,750 1,874,145
Highlands Cnty FL Fac Auth Rev
Hosp Adventist Health Sys D(d) 5.875% 11/15/2029 A 5,500 5,762,405
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Highlands Cnty FL Fac Auth Rev
Hosp Adventist/Sunbelt Ser A 6.00% 11/15/2031 A $ 2,750 $ 2,906,502
Jackson OH Hosp Fac Rev
Cons Hlth Sys Jackson Hosp(16) 6.125% 10/1/2023 AA 680 746,082
Kentucky Economic Dev Fin
Auth Norton Hlthcare Inc Ser A(15) Zero Coupon 10/1/2025 AAA 4,300 1,349,211
Knox Cnty TN Health Edl & Hsg
Facs Brd Hosp Facs Rev Ref(11) Zero Coupon 1/1/2023 AAA 2,735 928,615
KS St Dev-Susan-Ser Z-Ks
Susan B Allen Mem Hosp(16) 5.125% 12/15/2023 AA 1,025 1,047,171
Lauderdale Cnty & Florence AL
Hlthcare Rev Coffee Hlth Ser A(15) 6.00% 7/1/2029 AAA 1,000 1,133,080
Louisiana Pub Facs Auth Rev
Ochsner Clinic Ser A(15) 5.00% 5/15/2022 Aaa 1,000 1,032,320
Lubbock TX Hlth Fac Dev Corp
Rev Sears Plains Pj(12) 5.70% 1/20/2041 AAA 2,490 2,618,882
MD St Hlth & Higher Ed Fac
Auth Rev North Arundel Hosp 6.50% 7/1/2026 Baa1 1,000 1,084,880
MD St Hlth & Higher Ed Fac
Catholic Hlth Initiative Ser A 6.00% 12/1/2024 AA 100 110,686
MD St Hlth & Higher Ed Fac
Johns Hopkins 5.00% 11/15/2028 AA- 3,500 3,524,675
MD St Hlth & Higher Ed Fac
Univ Maryland Med Sys 6.75% 7/1/2030 Baa1 1,950 2,168,946
Mesa AZ Ind Dev Auth
Discovery Hlth Sys Ser A(15) 5.75% 1/1/2025 AAA 750 814,267
Mississippi Hosp Equip & Fac
Forrest Cnty Auth Gen Hosp Pj(11) 6.00% 1/1/2030 Aaa 615 694,612
Missouri St Hlth & Ed Fac
Auth BJC Hlth 5.25% 5/15/2032 AA 2,000 2,057,700
Missouri St Hlth & Ed Fac
Auth Rites PA-1049 RIBs(2) 16.885% 6/1/2010 AAA 855 1,063,603
New Hampshire Hlth & Ed Fac
Auth Rev 6.00% 10/1/2024 A+ 250 263,597
New Hampshire Hlth & Ed Fac
Dartmouth-Hitchcock Oblig Gr(11) 5.50% 8/1/2027 AAA 3,500 3,736,670
New Hampshire Hlth & Ed Fac
Exeter Pj 5.75% 10/1/2031 A+ 1,550 1,602,359
New Hampshire St Hlth & Ed
Concord Hosp(11) 5.50% 10/1/2021 Aaa 710 773,183
NJ Hlthcare Fac Fin Auth Rev
Robert Wood Johnson Univ Hosp 5.75% 7/1/2031 A+ 700 740,761
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
NM St Hosp Equip Ln Council
Presbyterian Hlthcare Ser A 5.50% 8/1/2025 A+ $ 2,000 $ 2,061,880
North Carolina Med Care Comm 5.50% 1/1/2020 A 565 587,719
Orange Cnty FL Hlth Fac Auth
Rev Hosp Orlando Regl 5.75% 12/1/2027 A2 1,000 1,030,780
Oregon St Hlth Hsg Ed &
Cultural Fac Auth Rev(2) 5.25% 11/15/2019 AAA 2,000 2,171,740
Plymouth MN Hlth Fac Rev West
Hlth Pj Ser A(11) 6.125% 6/1/2024 AAA 2,990 3,134,238
Rhode Island St Hlth & Ed
Bldg RI Health 6.50% 8/15/2032 BBB 1,000 1,023,550
Rhode Island St Hlth & Ed
Bldg Roger Williams Rlty(8) 6.50% 8/1/2029 AAA 1,240 1,359,127
South Carolina Jobs Economic
Dev Auth Hosp Facs Rev 6.375% 8/1/2034 BBB 2,000 2,023,780
St. Cloud MN Hlthcare Rev
Hosp Oblig Group Ser A(11) 6.25% 5/1/2018 Aaa 3,320 3,908,603
Sullivan Cnty TN Hlth Ed &
Hsg Fac Brd Rev Hosp 6.25% 9/1/2022 BBB+ 2,000 2,065,480
Tyler TX Hlth Fac Dev Corp
Hosp Rev Mother Frances Hosp 6.00% 7/1/2027 Baa1 1,500 1,540,890
-------------
TOTAL 77,058,246
-------------
HOUSING 5.90%
Colorado Hsg Fin Auth Multi
Fam Hsg Ser A AMT 6.80% 10/1/2037 AA+ 2,325 2,428,765
GA St Hsg & Fin Auth Rev Sing
Fam Mtg Ser A Sub A-2 AMT(8) 6.40% 12/1/2015 AAA 105 105,250
Idaho Hsg & Fin Assn SF Mtg AMT 5.25% 7/1/2033 Aaa 1,000 1,020,860
Idaho Hsg Agy
Sing Fam Mtg Ser F AMT(8) 7.45% 7/1/2015 Aaa 315 325,480
Illinois Hsg Dev Auth Multi
Fam Hsg Lawndale AMT(8) 6.80% 12/1/2016 AAA 1,000 1,062,600
Illinois Hsg Dev Auth Multi
Fam Hsg Lawndale AMT(8) 7.10% 12/1/2034 AAA 1,500 1,591,545
Kansas City MO Ind Dev Auth
N Oak Crossing Sr Ser A-1 AMT(2) 5.30% 12/1/2020 AAA 1,170 1,204,257
Kentucky Hsg Corp Hsg Rev
Ser D AMT 5.25% 7/1/2022 AAA 500 517,195
MA St Hsg Fin Agy Hsg Rev
Rental Mtg Ser A AMT(2)(8) 7.35% 1/1/2035 AAA 1,375 1,435,995
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
MA St Hsg Fin Agy Hsg Rev
Sing Fam Ser 29 AMT 6.75% 6/1/2026 AA $ 685 $ 704,536
Maryland St Cmnty Dev Admin
Dept Hsg & Cmnty Dev Ser B AMT 5.375% 9/1/2022 Aa2 4,160 4,279,392
Maryland St Cmnty Dev Admin
Residential Ser F AMT 5.50% 9/1/2022 Aa2 2,500 2,588,700
Minneapolis & St. Paul MN Hsg
Redev Auth Hlthcare Sys Pj 6.90% 10/15/2022 BBB+ 700 711,081
Minneapolis St Paul MN Hsg
Fin Rev Sing Fam Mtg Ser AB AMT(13) 6.25% 11/1/2030 AAA 720 770,357
Minnesota St Hsg Fin Agy
Sing Fam Mtg Ser G-1 AMT 5.60% 7/1/2022 AA+ 470 489,820
MO St Hsg Dev Cmnty Mtg Rev
Sing Fam Hmownr Ln Ser B-1 AMT(13) 6.25% 3/1/2031 AAA 425 443,632
MO St Hsg Dev Cmnty Mtg Rev
Sing Fam Ser E-1 AMT(13) Zero Coupon 3/1/2029 AAA 1,075 258,365
Montana St Brd Hsg Sing Fam
Mtg Ser A-1(8) 6.05% 12/1/2037 AA+ 4,255 4,433,923
NE Invt Fin Auth Sing Fam
Ser D AMT(13)(7) 5.25% 9/1/2022 AAA 725 744,698
New Orleans LA Fin Auth Mtg
Rev Ser B-2 AMT(13) 6.00% 12/1/2018 Aaa 410 432,857
North Carolina Hsg Fin Agy
Sing Fam Rev Ser BB AMT 6.25% 3/1/2012 AA 800 831,080
Oklahoma Hsg Fin Agy Sing Fam
Mtg Ser B-1(13) 5.30% 9/1/2026 Aaa 115 119,232
Oklahoma Hsg Fin Agy Sing Fam
Rev Cap Apprec Ser D-1(13) Zero Coupon 3/1/2029 Aaa 4,505 1,140,125
Oklahoma Hsg Fin Agy Sing Fam
Rev Mtg Homeowner Ser B-1 Zero Coupon 3/1/2029 Aaa 2,590 646,309
Oklahoma Hsg Fin Agy Sing Fam
Rev Mtg Homeowner Ser D-2 AMT(13) Zero Coupon 9/1/2030 Aaa 2,600 496,626
Prince Georges Cnty MD Hsg
Single Fam Ser A AMT(13)(7) 6.15% 8/1/2019 AAA 60 63,838
Vermont Hsg Fin Agy Sing Fam
Hsg Ser 16A AMT(11) 5.50% 11/1/2021 AAA 3,300 3,411,276
Washington St Hsg Fin Cmnty
Sing Fam Prog Ser A-2 AMT(13)(7) 6.30% 12/1/2027 Aaa 425 443,407
West Virginia St Hsg Dev Fd
Hsg Fin Ser B AMT 5.25% 11/1/2018 AAA 2,345 2,403,836
Wyoming Cmnty Dev Auth Hsg
Rev Ser 5 5.90% 6/1/2017 AA 500 533,760
-------------
TOTAL 35,638,797
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL 1.78%
Clark Cnty NV Ind Dev Rev
Ser C AMT(2) 5.95% 12/1/2038 AAA $ 3,320 $ 3,613,222
Connecticut St Dev Auth Solid
Wst Dsp Fac Rev Pfizer Inc AMT 7.00% 7/1/2025 AAA 2,500 2,724,575
Jacksonville FL Swr & Solid
Wst Disp Fac Rev Anheuser AMT 5.875% 2/1/2036 A+ 500 518,765
Moraine OH Solid Waste Disp
General Motors Corp Pj AMT 5.65% 7/1/2024 Baa1 450 447,782
Rhode Island St Eco Dev
Providence Place Mall(16) 6.125% 7/1/2020 AA 550 625,911
Texas City TX Ind Dev Corp
Marine Term Rev Arco Pipe Line 7.375% 10/1/2020 AA+ 650 859,248
Wyandotte Cnty KS City KS
Univ Govt Ref GM Grp Pj 6.00% 6/1/2025 Baa1 1,900 1,970,376
-------------
TOTAL 10,759,879
-------------
LEASE 5.69%
Arizona ST Ctfs Partn Ser A(15) 5.00% 11/1/2020 AAA 200 211,270
Bemidji MN Lease Rev MN St
Bureau Criminal Appreh(15) 5.75% 12/1/2018 Aaa 555 624,902
Bemidji MN Lease Rev MN St
Bureau Criminal Appreh(15) 5.75% 12/1/2019 Aaa 315 352,762
Boise City ID Lease Rev Urban
Renewal ADA Cnty Courts(2) 6.25% 8/15/2019 AAA 7,385 8,611,870
Charlotte NC C Partn Govtl
Facs Projs-Ser G 5.375% 6/1/2026 AA+ 2,250 2,368,485
Grand Rapids MI Pub Sch(15) 5.00% 11/1/2021 AAA 250 261,307
Greenville Cnty SC Sch Dist
Installment Pur Ref Bldg 5.50% 12/1/2028 AA- 5,500 5,759,545
Henrico Cnty VA Econ Dev Auth
Pub Fac Lease Rev Jail Pj 6.125% 11/1/2019 Aa1 1,000 1,178,680
Murray City UT Mun Bldg Auth
Ser A(2) 5.30% 12/1/2021 Aaa 2,925 3,105,736
Omaha Convention Hotel Corp.
Convention Ctr - Ser A(2) 5.125% 4/1/2032 AAA 1,250 1,272,825
Providence RI Redev Agy Rev
Pub Safety & Mun Bldgs Ser A(2) 5.75% 4/1/2029 Aaa 415 455,890
Spartanburg Cnty SC Sch Dist
McCarthy Teszler Pj(18) 5.00% 3/1/2022 AAA 1,000 1,039,480
St Paul MN Port Auth Lease
Rev Office Bldg 5.00% 12/1/2022 AA+ 1,000 1,038,660
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
State Pub Sch Bldg Auth PA
Sch Rev Lease-Philadelphia Sch(11) 5.00% 6/1/2033 AAA $ 3,000 $ 3,034,200
West Vy City Utah Mun Bldg(2) 5.50% 8/1/2027 AAA 1,000 1,061,640
Wyoming Bldg Corp Rev(2) 6.00% 10/1/2019 AAA 1,425 1,659,370
Wyoming Bldg Corp Rev(2) 6.00% 10/1/2021 AAA 2,000 2,308,720
-------------
TOTAL 34,345,342
-------------
MISCELLANEOUS 10.31%
AZ Tourism & Sports Auth Tax
Multipurpose Stadium(15) 5.375% 7/1/2022 Aaa 5,000 5,448,800
BI State Dev Agy MO Met Dist
Metrolink Cross Cnty Proj-B(11) 5.00% 10/1/2032 AAA 5,000 5,070,700
Cache Cnty UT Sales Tax Rev(10) 5.00% 12/15/2022 AAA 1,470 1,516,952
Chicago IL Spl Transn Rev(2) 5.25% 1/1/2031 AAA 12,500 12,973,125
CO Ed & Cultural Fac Auth Rev
Colorado Public Radio 5.625% 7/1/2022 BBB 100 106,047
FL St Dept Environmental
Protn Preservation Rev FL Forever(15) 5.00% 7/1/2012 AAA 2,500 2,788,250
George L Smith II GA World
Congress Ctr Auth Rev AMT(15) 5.75% 7/1/2015 AAA 1,500 1,670,865
George L Smith II GA World
Congress Ctr Rev AMT(15) 5.50% 7/1/2020 AAA 700 754,782
Indiana Bd Bk Rev St
Revolving Fund Prog Ser A 6.75% 2/1/2017 AAA 500 543,125
Larimer Cnty CO Sales & Use
Tax Rev Fairgrounds & Events(15) 5.00% 12/15/2019 AAA 750 798,292
Louisiana Loc Govt Envir Fac
Pkg Fac Garage Pj Ser A(2) 5.375% 10/1/2026 AAA 1,500 1,578,045
Memphis-Shelby Cnty TN Sports
Memphis Arena Pj(2) 5.25% 11/1/2023 AAA 1,765 1,865,393
MI St Bldg Auth Rev Ref-Facs
Prog-Ser I(11) 5.00% 10/15/2009 AAA 5,285 5,995,304
Michigan St Environmental Ref(15)(14) 5.50% 12/1/2013 AAA 1,000 1,162,290
MS Dev Bk Spl Oblig Cap Pjs &
Equip Acquisition(2) 5.00% 7/1/2024 AAA 2,000 2,095,120
Omaha Convention Hotel Corp.
Rite-PA 1078 RIBs(2) 8.859% 4/1/2010 AAA 5,000 5,182,600
Pittsburgh & Allegheny Cnty
PA Auditorium Regl Asset Dist(2) 5.00% 2/1/2029 AAA 2,500 2,525,750
Regional Transn Dist CO Sales(11) 5.00% 11/1/2009 AAA 3,335 3,782,224
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
St. Louis MO Ind Dev Auth Rev
Kiel Ctr Multi Purp Arena AMT 7.875% 12/1/2024 BB(b) $ 3,500 $ 3,597,440
UT Tran Auth Sales Tax Rev Ser A(11) 5.00% 6/15/2025 AAA 1,000 1,013,920
Virginia St Pub Bldg Auth Pub
Fac Rev Ser A 5.75% 8/1/2020 AA+ 600 675,510
Westminister CO Sales & Use
Tax Ref Rev(2) 5.25% 12/1/2022 AAA 1,090 1,168,513
-------------
TOTAL 62,313,047
-------------
POWER 0.90%
Grant Cnty WA Pub Util
Dist #2 Pr Rap Hydro 2nd Ser B AMT(15) 5.375% 1/1/2018 AAA 300 321,309
HI St Dept Bdg & Fin Spl Purp
Mtg Rev HI Elec Co Ser A AMT(15) 6.60% 1/1/2025 AAA 135 143,924
Los Angeles CA Wtr & Pwr Rev
Pwr Sys Ser A-A1(11) 5.25% 7/1/2020 AAA 2,600 2,775,188
North Carolina Muni Pwr Agy
#1 Catawba Elec Rev(1)(4) 5.00% 1/1/2015 A 1,125 1,139,726
South Carolina St Pub Svc(11) 5.25% 1/1/2019 AAA 950 1,035,994
-------------
TOTAL 5,416,141
-------------
PRE-REFUNDED 12.78%
Baltimore MD Rev Water Pj Ser A(11) 6.00% 7/1/2018 AAA 285 340,683
Baltimore MD Rev Water Pj Ser A(11) 6.00% 7/1/2020 AAA 275 328,729
Cobb Cnty GA Kennestone Hosp
Auth Rev Ctfs Ser 86 A ETM(15) Zero Coupon 8/1/2015 AAA 1,000 521,880
Culpeper Cnty VA Sch(11) 6.00% 1/15/2021 AAA 690 822,170
Cumberland Cnty NC Ctfs Partn
Civic Ctr Proj Ser A(2) 6.40% 12/1/2019 AAA 2,800 3,031,140
Dallas TX Indpt Sch Dist
Prerefunded PSF 5.50% 2/15/2017 AAA 8,700 10,102,788
Delaware Transn Auth Trans
Sys Rev Sr 6.00% 7/1/2020 AA 6,215 7,429,287
Detroit MI Wtr Supply Sys
Prerefunded Sr Lien Ser A(10) 5.25% 7/1/2033 AAA 6,420 7,377,864
Detroit MI Wtr Supply Sys Sr
Lien Ser A(10) 5.75% 7/1/2028 AAA 1,500 1,786,980
Fayette Cnty GA Pub Fac Auth
Criminal Justice Center Pj 6.00% 6/1/2030 AA 3,500 4,205,215
Glendale AZ Dev Auth Ed Fac
Rev Amer Graduate Sch Intl(5) 7.125% 7/1/2020 AAA 1,000 1,115,460
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Houston TX Wtr & Swr Sys Rev
Ser D(15) 6.125% 12/1/2029 AAA $ 1,400 $ 1,483,440
Indiana St Ed Fac Auth Rev 6.65% 3/1/2019 Aaa 860 897,376
Iowa Fin Auth Rev ETM 5.25% 8/15/2021 Aa2 235 248,818
Iowa Fin Auth Rev IA St
Revolving Fd Comb Ser 6.25% 5/1/2024 A+ 3,400 3,537,360
Kilmarnock VA Pub Impt 6.25% 3/1/2027 BBB 1,430 1,622,235
Lane Cnty OR Sch Dist #052 5.625% 6/15/2020 Aa3 800 937,160
Lauderdale Cnty & Florence AL
Hlthcare Auth Rev(15) 5.75% 7/1/2019 AAA 2,000 2,329,900
Linn Cnty OR Cmnty Sch Dist
#9 Lebanon(15) 6.125% 6/15/2025 AAA 5,000 6,008,950
Miami-Dade Cnty FL Expwy Auth
Toll Sys Rev(10) 6.375% 7/1/2029 AAA 1,000 1,226,560
Missouri St Envr Impt & Enrg
Prerefunded St Revolv FD Ser B 7.20% 7/1/2016 Aaa 1,965 2,095,653
NJ St Transn Tr Fd Auth
Transn Sys Ser B 6.00% 6/15/2019 AA- 2,550 3,045,235
North Providence RI Ser A(15) 6.125% 7/1/2016 AAA 1,410 1,660,712
Ohio St 6.20% 8/1/2013 AA+ 750 835,177
Phoenix AZ Civic Impt Corp(10) 6.00% 7/1/2024 AAA 2,400 2,888,808
Puerto Rico Comwlth Pub Impt RIBs 10.54% 7/1/2029 A- 750 891,330
Puerto Rico Comwlth Ser A ETM 5.50% 10/1/2040 AAA 1,000 1,090,640
South Carolina Jobs Economic
Dev Auth Hosp Fac Rev 7.375% 12/15/2021 BBB 2,000 2,564,880
University NM Tech Dev Corp
Lease Rev Univ Ctr Res Ser A(15) 6.55% 8/15/2025 AAA 1,410 1,506,585
Virginia St Pub Sch Auth Ser A 6.20% 8/1/2014 Aa1 1,450 1,542,003
Weber Cnty UT Mun Bldg Auth
Lease Rev(16) 7.50% 12/15/2019 Aaa 2,250 2,469,870
White Hsg Util Dist TN
Robertson/Sumner Cntys Wtr/Swr(11) 6.00% 1/1/2026 Aaa 1,090 1,288,500
-------------
TOTAL 77,233,388
-------------
RESOURCE RECOVERY 0.38%
Cobb Cnty GA Solid Waste Mgmt
Auth Rev AMT 6.40% 1/1/2015 AAA 900 945,180
Missouri St Envr Impt & Enrg
Unrefunded Bal St Revolving B 7.20% 7/1/2016 Aaa 1,285 1,364,092
-------------
TOTAL 2,309,272
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
SPECIAL TAX 1.51%
Ernest N Morial New Orleans
LA Exhibit Hall Auth Spl Tax(2) 5.00% 7/15/2010 AAA $ 3,675 $ 4,122,909
Los Angeles CA Cmnty Facs
Dist Playa Vista(2) 4.50% 9/1/2021 AAA 1,825 1,813,831
Portland OR Urb Ren & Redev
Downtown Waterfront Ser A(2) 5.50% 6/15/2020 Aaa 650 715,377
Portland OR Urb Ren & Redev
Downtown Waterfront Ser A(2) 5.75% 6/15/2019 Aaa 1,500 1,712,790
Salida CA Area Pub Fac Fin Agy
Cmnty Fac Dist Spl Tax #1998-1(11) 5.25% 9/1/2028 AAA 355 365,331
San Juan Cnty NM Tax / Motor
Ref & Impt(15)(14) 5.25% 5/15/2022 AAA 390 413,548
-------------
TOTAL 9,143,786
-------------
TRANSPORTATION 6.81%
Billings MT Arpt Rev AMT(15) 6.10% 7/1/2016 AAA 190 218,842
Billings MT Arpt Rev AMT(15) 6.20% 7/1/2020 AAA 2,775 3,146,767
Houston TX Arpt Sys Rev Sub
Lien Ser A AMT(10) 5.50% 7/1/2012 AAA 1,610 1,784,041
Houston TX Arpt Sys Rev Sub
Lien Ser A AMT(11) 5.70% 7/1/2030 AAA 2,615 2,669,523
Metropolitan Trans Auth NY
Rev Ser U(10)(17) 5.125% 11/15/2031 AAA 5,000 5,107,450
Metropolitan Washington DC
Arpt Auth Sys Ref Ser A AMT(d)(10) 5.125% 10/1/2029 AAA 5,700 5,751,015
New Jersey St Tpk Auth Rev Ser A(2) 5.00% 1/1/2030 AAA 10,000 10,176,900
North TX Thruway Auth Dallas
North Twy Sys Rev Ref Ser C(11) 3.00% 1/1/2006 AAA 900 933,318
Pennsylvania St Tpk Comm Oil
Franchise Tax Rev Sub-Ser B(15) 5.00% 12/1/2031 AAA 4,750 4,810,135
Port Kalama WA Rev Ser B AMT 5.625% 12/1/2015 A3 1,025 1,073,011
Puerto Rico Comwlth Hwy &
Transn Auth Rev PMD Ser B 6.00% 7/1/2026 A 1,500 1,588,230
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser PMD RIBs(11)(6) 10.68% 7/1/2026 Aaa 500 589,650
Rhode Island St Eco Corp
Arpt Rev Ser B(10) 6.00% 7/1/2020 AAA 1,210 1,391,173
Rhode Island St Eco Corp Arpt
Rev Ser B(10) 6.00% 7/1/2028 AAA 1,200 1,361,928
San Francisco CA City & Cnty
Arpt Lease SFO Fuel Ser A AMT(11) 6.125% 1/1/2027 AAA 500 550,550
-------------
TOTAL 41,152,533
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
WATER/SEWER 5.40%
Brighton Township MI San Sew
Drainage Dist(11) 5.25% 10/1/2018 AAA $ 1,615 $ 1,745,928
Broad River NC Wtr Auth(15) 5.375% 6/1/2026 Aaa 400 424,324
Chisholm Creek Util Auth KS
Bel Aire & Park City KS Proj(15) 5.25% 9/1/2020 Aaa 320 346,234
Chisholm Creek Util Auth KS
Bel Aire & Park City KS Proj(15) 5.25% 9/1/2021 Aaa 1,025 1,101,916
Detroit MI Disp Rev Ref-Sr
Lien-Ser A(11) 5.00% 7/1/2028 AAA 3,680 3,730,747
Gainesville GA Wtr & Sew Rev(11) 5.375% 11/15/2020 AAA 2,900 3,146,703
Gautier MI Util Dist Util Sys
Rev Ref(10) 5.125% 3/1/2019 Aaa 425 451,052
Grand Forks ND Wtr Rev Ser D(15) 5.375% 9/1/2020 Aaa 1,150 1,235,272
Iowa City IA Swr Rev(11) 5.375% 7/1/2020 Aaa 620 663,983
Kansas St Dev Fin Auth Rev
Pub Wtr Supply Revolving Ln-2 4.75% 4/1/2018 Aa3 1,180 1,210,220
Midlothian TX Wtr Dist(11) Zero Coupon 9/1/2022 AAA 2,000 763,160
New York City Muni Wtr Fin 5.125% 6/15/2031 AA 5,000 5,074,250
New York NY City Muni Wtr Fin
Auth Wtr & Swr Sys Rev Ser A 5.50% 6/15/2023 AA 1,050 1,106,564
Oregon St Brd Bk Rev OR Econ
Cmnty Dev Dept Ser A(15) 5.50% 1/1/2017 AAA 570 627,502
Paragould AR Wtr Swr & Elec Rev(2) 5.65% 12/1/2025 AAA 615 675,602
Rockingham NC Ctfs Partn(2) 5.00% 4/1/2020 AAA 1,205 1,286,651
South Dakota Conservancy Dist(2) 5.00% 8/1/2022 Aaa 2,700 2,789,883
South Dakota Conservancy Dist
Rev Clean Wtr St Revolving Fd(2) 5.00% 8/1/2022 Aaa 500 513,985
Utah Wtr Fin Agy Rev Pooled
LN Fin Prog(2) 5.125% 7/1/2023 Aaa 1,000 1,031,560
Whittier CA Util Auth Wtr Wtr Rev(15) 5.00% 6/1/2033 AAA 1,000 1,009,860
WV St Wtr Dev Auth Rev Loan
Prog III Ser A AMT(2) 6.25% 7/1/2030 AAA 1,470 1,652,706
WV Wtr Dev Auth Infrastucture
Rev Ser A(11) 5.625% 10/1/2026 AAA 1,555 1,679,291
York Cnty VA Swr Rev 5.875% 6/1/2024 Aa3 330 364,746
-------------
TOTAL 32,632,139
-------------
TOTAL MUNICIPAL BONDS (COST $559,381,110) 591,328,418
=============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING:
INTEREST MATURITY S&P OR SHARES
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 2.44%
MONEY MARKET MUTUAL FUNDS 2.44%
Dreyfus Municipal Cash Management Plus 13,254 $ 13,254,053
SSgA Tax Free Money Market Fund 1,500 1,500,000
-------------
TOTAL SHORT-TERM INVESTMENTS (Cost $14,754,053) 14,754,053
-------------
TOTAL INVESTMENTS 100.30% (Cost $574,135,163) $ 606,082,471
==============================================================================================================================
</Table>
SCHEDULE OF INVESTMENTS
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000)
------------
MUNICIPAL BONDS 97.62%
EDUCATION 11.15%
Abag Fin Auth For Nonprofit
Corps CA Rev Sch of Mech Arts 5.25% 10/1/2026 A3 $ 500 503,345
CA Ed Fac Auth Rev
Loyola-Marymount Univ(15) 5.00% 10/1/2024 Aaa 775 786,214
CA Ed Fac Auth Rev Pepperdine Univ 5.75% 9/15/2030 A1 2,000 2,111,240
CA Ed Fac Auth Rev Res Ctfs
Ser 113 RIBs 9.015% 12/1/2027 AAA 2,525 2,622,970
CA Ed Fac Auth Rev Scripps College 5.25% 8/1/2021 A1 425 439,569
CA Ed Fac Auth Rev Scripps College 5.25% 8/1/2026 A1 1,145 1,162,530
CA Ed Fac Auth Rev Univ of
Southern CA 5.50% 10/1/2027 AA+ 1,160 1,215,529
California Ed Fac Auth Rev
Univ of San Diego(2) 5.00% 10/1/2028 Aaa 1,250 1,263,950
California Ed Fac Auth Rev
Univ of San Francisco(15) 6.00% 10/1/2016 AAA 75 84,410
California Ed Fac Auth Rev
Univ of San Francisco(15) 6.00% 10/1/2026 AAA 2,565 2,846,381
California St Univ Fndtn Rev
Monterey Bay(15) 5.30% 6/1/2022 AAA 250 264,985
California St Univ Fndtn Rev
Sacramento Auxiliary Ser A(15) 5.50% 10/1/2027 AAA 400 427,184
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
California St Univ Rev &
Colleges Hsg Sys(10) 5.90% 11/1/2021 AAA $ 1,045 $ 1,151,653
California Statewide Cmntys
Dev Auth Aux Fndtn CA St Univ(15) 5.20% 6/1/2024 AAA 525 539,831
Inglewood Calif Uni Sch Dist
1998 Election- Ser C(d)(11) 4.75% 10/1/2024 AAA 500 500,000
Los Angeles Calif Uni Sch
Dist Ser A(11) 5.00% 7/1/2022 AAA 1,500 1,550,160
Los Angeles Calif Uni Sch
Dist Ser D(10) 5.375% 7/1/2025 AAA 1,000 1,039,720
Pleasanton CA Uni Sch Dist
Ctfs Partn Fin Proj(2) 4.75% 5/1/2021 AAA 360 362,416
Sonoma Cnty CA Jr College
Dist Election 2002-Ser A(11) 5.25% 8/1/2022 AAA 1,140 1,210,030
University CA Rev Multi Purp Ser K 5.25% 9/1/2024 Aa2 1,545 1,589,990
-------------
TOTAL 21,672,107
-------------
GENERAL OBLIGATION 25.11%
Anaheim CA Unified High Sch
Dist Ser A(11) 5.00% 8/1/2025 AAA 785 797,270
Antelope Valley CA Unified High Sch(15) 5.00% 8/1/2022 AAA 2,180 2,253,422
Barstow CA Unified Sch Dist Ser A(10) 5.00% 8/1/2026 Aaa 2,500 2,533,675
Berryessa CA Unified Sch Dist
Election of 1999 Ser B(11) 5.25% 8/1/2019 AAA 1,015 1,098,392
Beverly Hills CA Uni Sch Dist Ser A 5.00% 8/1/2026 AA 1,140 1,151,275
California St(10) 5.25% 9/1/2030 AAA 890 913,282
California St Ref(15) 5.00% 2/1/2022 AAA 2,700 2,766,339
California St Ser B AMT 5.70% 12/1/2032 A 640 656,442
Capistrano CA Unified Sch
Dist Fac Impt Dist #1 Ser A(10) 6.00% 8/1/2024 AAA 2,500 2,808,700
Centinela Valley CA High Sch
Election 2000 Ser D(10) 5.25% 8/1/2024 AAA 1,145 1,198,620
Centralia CA Sch Dist
Election of 2002 Ser A(10) 5.00% 8/1/2023 AAA 1,070 1,097,510
Centralia CA Sch Dist
Election of 2002 Ser A(10) 5.00% 8/1/2024 AAA 580 591,246
El Monte CA City Sch Dist Ser A(11) 6.25% 5/1/2025 AAA 1,230 1,403,467
Escondido CA Un Sch Dist Ser A(11) 5.25% 8/1/2022 AAA 2,000 2,112,640
Franklin-McKinley CA Sch Dist Ser B(11) 5.00% 8/1/2027 AAA 675 684,376
Fremont CA Unified High Sch
Dist Santa Clara Cnty Ser B(10) 5.25% 9/1/2025 AAA 1,000 1,033,280
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
32
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Lincoln CA Pub Fing Auth Pub
Safety & Corp Yard Proj(15) 5.00% 8/1/2028 AAA $ 1,000 $ 1,010,900
Los Angeles CA Cmnty College
Ser A(15) 5.00% 6/1/2026 AAA 2,375 2,407,086
Los Angeles Calif Uni Sch
Dist MBIA-Ser A(11) 5.00% 7/1/2024 AAA 1,000 1,020,810
Mojave CA Unified Sch Dist
Sch Fac Impt Dist #001(10) 5.00% 8/1/2024 AAA 1,060 1,078,857
Mojave CA Unified Sch Dist
Sch Facs Impt Dist No 001(10) 5.25% 8/1/2022 AAA 1,230 1,299,274
Montebello CA Unified Sch Dist(11) 5.00% 8/1/2020 AAA 350 367,293
Mount Pleasant CA Elem Sch
Dist 1998 Election Ser C(11) 5.50% 3/1/2026 AAA 465 495,234
Oxnard CA Unified High Sch
Dist Ref Ser A(15) 6.00% 2/1/2020 AAA 650 760,819
Oxnard CA Unified High Sch
Dist Ref Ser A(15) 6.20% 8/1/2030 AAA 3,000 3,447,570
Pittsburgh CA Unified Sch Dist
Ser E(11) 6.00% 8/1/2024 AAA 1,380 1,535,167
Pittsburgh CA Redev Agy Los
Medanos Cmnty Dev Pj(2) Zero Coupon 8/1/2026 AAA 3,500 1,030,190
Pomona CA Unified Sch Dist(15) 6.15% 8/1/2030 AAA 1,000 1,166,660
Pomona CA Unified Sch Dist
Ser A(15) 6.55% 8/1/2029 AAA 1,000 1,267,900
San Gabriel CA Unified Sch
Dist Ser A(11) 5.00% 8/1/2024 AAA 2,725 2,773,478
Santa Cruz CA City Elem Sch
Dist Ser B(10) 6.00% 8/1/2029 AAA 2,500 2,829,325
South Pasadena CA Uni Sch
Dist Election of 2002-Ser A(10) 5.125% 5/1/2028 AAA 1,600 1,636,480
Southwestern Cmnty College(2) 5.375% 8/1/2025 AAA 1,500 1,580,130
-------------
TOTAL 48,807,109
-------------
HEALTHCARE 2.39%
CA Infrastructure & Econ Dev
Bk Rev Kaiser Hosp Ser A 5.50% 8/1/2031 A 1,300 1,337,674
CA Infrastructure & Econ Dev
Bk Rev Kaiser Hosp Ser B 5.55% 8/1/2031 A 650 666,776
CA Infrastructure & Econ
Scripps Research Inst Ser A 5.75% 7/1/2030 Aa3 1,500 1,593,975
Torrance CA Hosp Rev Torrance
Memorial Med Ctr Ser A 5.50% 6/1/2031 A+ 500 509,965
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
33
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Torrance CA Hosp Rev Torrance
Memorial Med Ctr Ser A 6.00% 6/1/2022 A+ $ 500 $ 538,525
-------------
TOTAL 4,646,915
-------------
HOUSING 3.25%
California Hsg Fin Agy Rev
Home Mtg Ser K AMT**(15)(8) 0.00%/5.70% 2/1/2012 AAA 5,295 3,506,720
& 2015
California Hsg Fin Agy Rev
Home Mtg Ser K AMT(15)(8) Zero Coupon 2/1/2022 AAA 5,000 1,797,650
Cathedral City CA Pub Fin
Tax Alloc Hsg(15) 5.00% 8/1/2026 AAA 1,000 1,011,610
-------------
TOTAL 6,315,980
-------------
INDUSTRIAL 5.47%
California Poll Ctrl Fin Auth
Rev Southern CA Ser B AMT(2)(17) 6.40% 12/1/2024 AAA 10,435 10,630,343
-------------
LEASE 10.40%
California St Pub Wk Brd
Lease Rev Dept Gen Svcs Teale Data(2) 5.25% 3/1/2020 AAA 1,000 1,057,740
Chula Vista CA Ctfs Partn(15) 5.00% 8/1/2023 AAA 1,205 1,238,415
Inglewood CA Pub Fin Auth Rev
Ser A(2) 5.25% 8/1/2021 AAA 600 640,800
Orange Cnty CA Recovery Ctfs
Partn Residual Ser 128 RIBs(15) 10.365% 7/1/2019 AAA(c) 2,500 3,092,200
Orange Cnty CA Recovery Ctfs
Partn Ser A(15) 6.00% 7/1/2026 AAA 750 833,182
Plumas Cnty CA CTFS Partn Cap
Impt Prog-Ser A(2) 5.25% 6/1/2023 AAA 1,365 1,436,662
Sacramento CA City Fin Auth
Rev Cap Impt Ser A(2) 5.00% 12/1/2020 AAA 2,000 2,087,780
Sacramento CA City Fin Auth
Rev Cap Impt Ser A(2) 5.00% 12/1/2026 AAA 900 910,791
San Buenaventura CA Ctfs
Partn Ser C(2) 5.25% 2/1/2031 AAA 2,575 2,668,962
San Francisco CA City & Cnty
San Bruno Jail No 3(2) 5.25% 10/1/2033 AAA 5,000 5,156,300
Santa Ana CA Unified Sch Dist
Ctfs Partn Fin Pj(11) Zero Coupon 4/1/2019 AAA 2,295 1,097,194
-------------
TOTAL 20,220,026
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
34
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
MISCELLANEOUS 2.43%
CA Infrastructure & Econ Bk
Rev Asian Museum Fdtn(15) 5.25% 6/1/2030 AAA $ 115 $ 119,246
CA Infrastructure & Econ Bk
Rev YMCA Metropolitan LA Pj(2) 5.25% 2/1/2026 AAA 2,000 2,087,120
Loma Linda CA Redev Agy Tax
Allocation Ref-Loma Linda(15) 5.125% 7/1/2030 AAA 1,000 1,024,330
Oakland CA JT Pwrs Fin Auth
Reassmt Rev 5.50% 9/2/2024 A- 410 426,785
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.50% 8/1/2029 BBB+ 1,000 1,054,540
-------------
TOTAL 4,712,021
-------------
POWER 4.42%
CA St Dept Wtr Res Pwr Supply
Rev Insured Series(18) 5.375% 5/1/2017 AAA 1,000 1,097,690
Los Angeles CA Wtr & Pwr Rev
Pwr Sys-A-1(15)(14) 5.00% 7/1/2024 AAA 850 862,648
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN(15) 5.00% 7/1/2032 AAA 1,500 1,538,295
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN 5.125% 7/1/2029 A- 2,750 2,797,273
Puerto Rico Elec Pwr Auth Rev
Ser II(11) 5.125% 7/1/2026 AAA 500 519,995
Sacramento CA Muni Util Dist
Ref-Ser Q(11) 5.25% 8/15/2022 AAA 1,000 1,056,530
Shasta CA Jt Pwrs Fin Auth
Cnty Admin Bldg PJ-A(15) 5.25% 4/1/2023 AAA 675 710,032
-------------
TOTAL 8,582,463
-------------
PRE-REFUNDED 7.48%
CA Ed Fac Auth Rev Pooled
College/Univ Ser C ETM 6.50% 6/1/2020 Baa3 3,000 3,585,870
California St Pub Wks Brd
Lease Rev Dept Corrections(2) 5.80% 1/1/2013 AAA 5,000 5,607,450
M-S-R Pub Pwr Agy CA San Juan
Pj Rev Ser D ETM(15) 6.75% 7/1/2020 AAA 980 1,239,808
Sacramento CA Muni Util Dist
Elec Rev Ser M 5.25% 7/1/2028 A 1,885 1,963,680
Sacramento CA Muni Util Dist
Ser M(15)(14) 5.25% 7/1/2028 AAA 275 286,583
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
35
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Sacramento CA Muni Util Dist
Ser M(15)(14) 5.25% 7/1/2028 AAA $ 700 $ 729,484
Santa Cruz CA City High Sch
Ser B(10) 6.00% 8/1/2029 AAA 1,000 1,131,730
-------------
TOTAL 14,544,605
-------------
RESOURCE RECOVERY 1.37%
California Poll Ctrl Fin Auth
Rev Pacific Gas/Elec Ser A AMT(15) 5.35% 12/1/2016 AAA 2,000 2,154,200
San Joaquin Cnty CA Rev Ctfs
Partn Solid Waste Sys Facs PJS(15) 5.00% 4/1/2022 AAA 500 516,410
-------------
TOTAL 2,670,610
-------------
SPECIAL TAX 6.93%
Concord CA Redev Agy Tax
Alloc Ser 3(3) 8.00% 7/1/2018 AAA 35 35,558
CSUCI Fin Auth Rev CA East
Campus Cmnty Ser A(15) 5.25% 9/1/2026 AAA 5,500 5,727,205
Los Angeles Cnty CA Met Trans
Auth Sales Prop A-1St Sr-Ser A(11) 5.00% 7/1/2027 AAA 400 405,060
Riverside Cnty CA Redev Agy
Tax Alloc Jupura Valley Proj(2) 5.25% 10/1/2035 AAA 2,000 2,057,980
Rnr Sch Fin Auth CA Spl Tax
Cmnty Fac Dist #92-1 Ser A(2) 5.625% 9/1/2030 AAA 3,985 4,307,187
Salida CA Area Pub Fac Fin Agy
Cmnty Fac Dist Spl Tax #1998-1(11) 5.25% 9/1/2028 AAA 900 926,190
-------------
TOTAL 13,459,180
-------------
TRANSPORTATION 12.52%
Bay Area Govt Assn CA Rev
Bart SFO Extn-Arpt Premium-A(2) 5.00% 8/1/2026 AAA 2,000 2,026,940
Fresno CA Arpt Rev Ser A(11) 5.50% 7/1/2030 AAA 1,500 1,577,025
Port Oakland CA Port Rev Ser J(15) 5.50% 11/1/2026 AAA 5,000 5,333,300
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser D 5.75% 7/1/2041 A 4,000 4,321,840
Puerto Rico Comwlth Hwy &
Transn Auth Ser G(10) 5.25% 7/1/2021 AAA 1,000 1,084,030
San Francisco CA City & Cnty
Arpt Commn Rev Ser Issue 6 AMT(2) 6.50% 5/1/2018 AAA 4,500 4,699,800
San Francisco CA City & Cnty
Aprt Commn Ser 2 Issue 15A AMT(11) 5.00% 5/1/2017 AAA 2,000 2,080,280
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
36
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
San Francisco CA City & Cnty
Arpt Lease SFO Fuel Ser A AMT(11) 6.125% 1/1/2027 AAA $ 500 $ 550,550
San Francisco CA City & Cnty
Commn Intl Arpt Rev AMT(11) 5.75% 1/1/2014 AAA 500 556,190
San Francisco CA City & Cnty
Ref Second Ser 28B(15) 5.25% 5/1/2023 AAA 2,000 2,095,540
-------------
TOTAL 24,325,495
-------------
WATER/SEWER 4.70%
El Monte CA Wtr Auth Rev(2) 5.60% 9/1/2029 AAA 2,000 2,153,800
Imperial CA Ctfs Partn Ref Wtr Fac(10) 5.00% 10/15/2020 AAA 3,250 3,414,840
Palo Alto CA Util Rev Ser A 6.25% 6/1/2020 AA+ 1,610 1,688,649
San Luis Opispo Cnty CA Ser A(15) 5.375% 8/1/2030 AAA 1,800 1,875,474
-------------
TOTAL 9,132,763
-------------
TOTAL MUNICIPAL BONDS (Cost $181,141,516) 189,719,617
=============
<Caption>
SHARES
(000)
------------
SHORT-TERM INVESTMENT 1.37%
MONEY MARKET MUTUAL FUND 1.37%
Dreyfus General CA Fund Class A (Cost $2,653,744) 2,654 2,653,744
-------------
TOTAL INVESTMENTS 98.99% (Cost $183,795,260) $ 192,373,361
==============================================================================================================================
</Table>
SCHEDULE OF INVESTMENTS
CONNECTICUT TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000)
------------
MUNICIPAL BONDS 98.10%
EDUCATION 19.78%
CT St Hlth & Ed Fac Auth Rev
CT College Ser E(15) 5.25% 7/1/2022 AAA $ 400 427,664
CT St Hlth & Ed Fac Auth Rev
Fairfield Univ Ser I(15) 5.25% 7/1/2019 AAA 600 646,740
CT St Hlth & Ed Fac Auth Rev
Fairfield Univ Ser I(15) 5.50% 7/1/2029 AAA 1,235 1,319,313
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
37
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CONNECTICUT TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
CT St Hlth & Ed Fac Auth Rev
Gunnery Sch(16) 5.35% 7/1/2031 AA $ 695 $ 711,298
CT St Hlth & Ed Fac Auth Rev
Loomis Chaffee Sch Ser D 5.25% 7/1/2031 A2 2,750 2,825,460
CT St Hlth & Ed Fac Auth Rev
Miss Porters Sch Ser A 5.75% 7/1/2029 A+ 3,200 3,424,000
CT St Hlth & Ed Fac Auth Rev
Quinnipiac College Ser E(1)(11) 4.75% 7/1/2028 AAA 500 501,685
CT St Hlth & Ed Fac Auth Rev
Suffield Academy Ser A(15) 5.40% 7/1/2027 AAA 1,350 1,424,750
CT St Hlth & Ed Fac Auth Rev
Trinity College Ser E(15) 5.875% 7/1/2026 AAA 1,000 1,094,690
CT St Hlth & Ed Fac Auth Rev
Trinity College Ser G(2) 5.00% 7/1/2021 AAA 1,000 1,048,100
CT St Hlth & Ed Fac Auth Rev
Univ CT Fndtn Ser A 5.375% 7/1/2029 Aa3 210 216,409
CT St Hlth & Ed Fac Auth Rev
Univ Hartford Ser E(16) 5.25% 7/1/2032 AA 2,900 2,969,165
CT St Hlth & Ed Fac Auth Rev
Univ New Haven Issue D(1)(4) 6.70% 7/1/2026 A 1,000 1,061,780
CT St Hlth & Ed Fac Auth Rev
Unrefunded Bal Sacrd Hrt Ser C 6.50% 7/1/2016 BBB- 275 293,895
University CT Ser A(10) 5.625% 3/1/2020 AAA 1,000 1,113,210
-------------
TOTAL 19,078,159
-------------
GENERAL OBLIGATION 25.11%
Bridgeport CT Ser C(10) 4.75% 8/15/2021 AAA 1,000 1,020,340
Bridgeport CT Ser C(10) 5.00% 8/15/2020 AAA 500 524,145
Cromwell CT(d)(10) 4.50% 6/15/2023 AAA 800 790,680
CT St Ser A 5.625% 4/15/2020 AA 1,000 1,114,970
CT St Ser B 5.60% 6/15/2020 AA 250 277,005
CT St Ser D 5.125% 11/15/2018 AA 1,500 1,614,840
Hartford CT 6.50% 12/15/2005 A1 730 814,081
Monroe CT 6.60% 4/15/2005 Aa2 100 108,371
Montville CT 6.70% 6/15/2009 Aa3 550 672,963
Montville CT 6.70% 6/15/2010 Aa3 575 707,543
New Haven CT(10) 5.00% 11/1/2019 AAA 1,085 1,145,641
New Haven CT Ser A(2) 5.00% 11/1/2021 AAA 1,000 1,049,050
Puerto Rico Comwlth Pub Impt Zero Coupon 7/1/2018 A- 2,035 1,045,257
Puerto Rico Comwlth Pub Impt Ref(11) 5.125% 7/1/2030 AAA 2,450 2,524,774
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
38
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CONNECTICUT TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Comwlth Pub Impt Ser A 5.00% 7/1/2027 A- $ 1,170 $ 1,179,805
Puerto Rico Comwlth Pub Impt Ser A(10) 5.00% 7/1/2032 AAA 4,285 4,382,184
Redding CT 6.60% 4/15/2010 Aa1 100 122,410
Regional Sch Dist # 16 CT(10) 5.00% 2/1/2020 Aaa 115 121,236
Waterbury CT(11) 5.125% 4/1/2022 AAA 2,250 2,354,828
Waterbury CT Ser A(11) 5.00% 4/1/2019 AAA 1,250 1,324,488
West Haven CT(15) 6.50% 6/15/2006 AAA 100 113,521
Westport CT Lot A 4.50% 2/1/2021 Aaa 720 729,446
Westport CT Lot A 4.625% 2/1/2023 Aaa 485 487,134
-------------
TOTAL 24,224,712
-------------
HEALTHCARE 7.12%
CT St Dev Auth Rev Duncaster Inc Pj(16) 5.125% 8/1/2022 AA 235 243,183
CT St Hlth & Ed Fac Auth Rev
Bridgeport Hosp Ser A(15) 6.625% 7/1/2018 AAA 1,250 1,290,250
CT St Hlth & Ed Fac Auth Rev
Bristol Hosp Ser B(16) 5.50% 7/1/2021 AA 1,000 1,084,380
CT St Hlth & Ed Fac Auth Rev
Catholic Hlth East Ser F(15) 5.625% 11/15/2020 AAA 325 359,856
CT St Hlth & Ed Fac Auth Rev
Child Care Fac Prog Ser C(2) 5.625% 7/1/2029 AAA 1,000 1,079,740
CT St Hlth & Ed Fac Auth Rev
CT College Ser E(15) 5.00% 7/1/2032 AAA 1,050 1,067,755
CT St Hlth & Ed Fac Auth Rev
St. Francis Hosp & Med(16) 5.00% 7/1/2022 AA 1,000 1,036,630
CT St Hlth & Ed Fac Auth Rev
Waterbury Hosp Issue Ser C(16) 5.75% 7/1/2029 AA 650 704,984
-------------
TOTAL 6,866,778
-------------
HOUSING 6.99%
CT St Hsg Fin Auth Fin Prog
Subser A-2 AMT 5.50% 11/15/2022 AAA 1,000 1,039,050
CT St Hsg Fin Auth Hsg Mtg
Fin Prog Ser D 2 AMT 5.15% 11/15/2022 AAA 555 567,909
CT St Hsg Fin Auth Hsg Mtg
Fin Prog Subser A-2 5.35% 11/15/2022 AAA 500 519,985
CT St Hsg Fin Auth Hsg Mtg
Fin Ser C - 2 AMT 6.00% 11/15/2020 AAA 760 809,734
CT St Hsg Fin Auth Spl
Oblig-Grp Home Mtg-G-h5(2) 5.85% 6/15/2030 AAA 500 531,710
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
39
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CONNECTICUT TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
CT St Hsg Fin Auth Spl
Oblig-Spl Needs Hsg-SN-h1(2) 5.00% 6/15/2032 AAA $ 750 $ 764,273
CT St Hsg Fin Auth Subser B - 2 AMT 5.75% 11/15/2021 AAA 2,405 2,507,910
-------------
TOTAL 6,740,571
-------------
INDUSTRIAL 3.37%
Connecticut St Dev Auth Govt
Lease Rev(15) 6.60% 6/15/2014 AAA 500 528,705
Connecticut St Dev Auth Solid
Wst Dsp Fac Rev Pfizer Inc AMT 7.00% 7/1/2025 AAA 2,500 2,724,575
-------------
TOTAL 3,253,280
-------------
MISCELLANEOUS 1.09%
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.50% 8/1/2029 BBB+ 1,000 1,054,540
-------------
POWER 10.06%
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN(15) 5.00% 7/1/2032 AAA 1,500 1,538,295
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN 5.125% 7/1/2029 A- 3,000 3,051,570
Puerto Rico Elec Pwr Auth Rev
Ser II(11) 5.125% 7/1/2026 AAA 2,925 3,041,971
Puerto Rico Elec Pwr Auth Rev
Ser II 5.25% 7/1/2031 A- 1,000 1,026,000
Puerto Rico Elec Pwr Auth Ser HH(11) 5.25% 7/1/2029 AAA 1,000 1,046,520
-------------
TOTAL 9,704,356
-------------
PRE-REFUNDED 16.12%
Connecticut St Clean Wtr Fd Rev 5.125% 9/1/2013 AAA 1,870 2,150,949
CT St Hlth & Ed Fac Auth Rev
Auth Rev Sacred Heart Ser C 6.50% 7/1/2016 BBB- 725 837,505
CT St Ser A 6.00% 4/15/2015 AA 1,000 1,198,180
CT St Ser B 5.375% 10/1/2011 AA 1,000 1,093,890
CT St Ser S FSA(11)(6) 5.00% 11/15/2009 AAA 1,600 1,822,608
CT St Spl Tax Oblig Rev(10) 6.10% 10/1/2011 AAA 1,000 1,061,280
CT St Spl Tax Oblig Rev
Transn Infrastructure-Ser A(10) 6.00% 12/1/2018 AAA 1,000 1,205,340
Municipal Secs Trust Ctfs Ser
7005 Cl B RIBs ETM+ 9.757% 10/1/2040 Aaa 1,000 1,181,280
Puerto Rico Comwlth 6.00% 7/1/2026 AAA 1,000 1,170,600
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
40
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CONNECTICUT TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth Rev Ser X 6.125% 7/1/2021 Aaa $ 750 $ 831,728
Puerto Rico Elec Pwr Auth
Ser T RIBs(11) 11.486% 7/1/2018 AAA 1,500 1,677,135
University CT Rev Student Fee Ser A(10) 5.75% 11/15/2020 AAA 205 243,989
University CT Rev Student Fee Ser A 6.00% 11/15/2021 AA- 390 470,402
University CT Rev Student Fee Ser A(10) 6.00% 11/15/2025 AAA 500 603,080
-------------
TOTAL 15,547,966
-------------
TRANSPORTATION 5.44%
CT St Spl Tax Oblig Rev Rite
PA 1039 R-A RIBs(11) 9.448% 1/1/2010 AAA 500 593,610
CT St Spl Tax Oblig Rev Rite
PA 1039 R-B RIBs(11) 9.448% 1/1/2010 AAA 785 919,942
CT St Spl Tax Oblig Rev Rite
PA 1039 R-C RIBs(11) 8.698% 7/1/2017 AAA 2,250 2,453,895
Puerto Rico Comwlth Hwy & Ser D(11) 5.00% 7/1/2032 AAA 1,250 1,279,250
-------------
TOTAL 5,246,697
-------------
WATER/SEWER 3.02%
Connecticut St Dev Auth Wtr
Bridgeport AMT(2)(17) 6.15% 4/1/2035 AAA 500 556,470
Connecticut St Dev Auth Wtr
Fac Rev CT Wtr Co Ser A AMT(2) 5.75% 7/1/2028 AAA 250 250,950
South Cent CT Regl Wtr Auth
16th Ser(2) 5.375% 8/1/2030 AAA 1,000 1,054,640
South Cent CT Regl Wtr Auth
Sys Rev 16th Ser(2) 5.375% 8/1/2025 AAA 1,000 1,052,230
-------------
TOTAL 2,914,290
-------------
TOTAL MUNICIPAL BONDS (Cost $89,348,851) 94,631,349
=============
<Caption>
SHARES
(000)
------------
SHORT-TERM INVESTMENT 1.84%
MONEY MARKET MUTUAL FUND 1.84%
Dreyfus CT Muni Cash Management (Cost $1,777,379) 1,777 1,777,379
=============
TOTAL INVESTMENTS 99.94% (Cost $91,126,230) $ 96,408,728
==============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
41
<Page>
SCHEDULE OF INVESTMENTS
HAWAII TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 97.57%
EDUCATION 6.90%
HI St Hsg Fin & Dev Corp Rev
Univ of HI Faculty Hsg Pj(2) 5.65% 10/1/2016 AAA $ 1,000 $ 1,087,840
HI St Hsg Fin & Dev Corp Rev
Univ of HI Faculty Hsg Pj(2) 5.70% 10/1/2025 AAA 380 405,437
University HI Univ Sys Rev(10) 5.125% 7/15/2032 AAA 1,000 1,025,880
University HI Univ Sys Rev
Ser A(10) 5.50% 7/15/2029 AAA 2,500 2,664,600
-------------
TOTAL 5,183,757
-------------
GENERAL OBLIGATION 25.73%
Hawaii Cnty HI Ser A(11) 5.00% 7/15/2023 AAA 1,000 1,036,750
Hawaii Cnty HI Ser A(10) 5.50% 7/15/2017 AAA 1,045 1,169,637
Hawaii Cnty HI Ser A(10) 5.60% 5/1/2013 AAA 1,780 2,069,321
Hawaii Cnty HI Ser A(11) 5.625% 5/15/2019 AAA 545 604,519
Hawaii St Ser BZ 6.00% 10/1/2010 AA- 500 594,700
Hawaii St Ser BZ 6.00% 10/1/2012 AA- 500 597,445
Hawaii St Ser CA(10) 8.00% 1/1/2013 AAA 2,000 2,681,000
Hawaii St Ser CP(10) 5.00% 10/1/2016 AAA 900 960,876
Hawaii St Ser CZ(11) 5.25% 7/1/2018 AAA 3,000 3,295,140
Honolulu HI City & Cnty Ser A(11) 5.125% 9/1/2021 AAA 600 629,592
Honolulu HI City & Cnty Ser A(10) 5.50% 9/1/2016 AAA 5 5,546
Honolulu HI City & Cnty Ser B(10) 5.00% 11/1/2016 AAA 265 283,216
Kauai Cnty HI Pub Impt Ser B(15) 5.25% 8/1/2017 AAA 95 104,352
Kauai Cnty HI Ser A(15) 5.50% 8/1/2021 AAA 2,495 2,712,789
Puerto Rico Comwlth Pub Impt
Ser A 5.00% 7/1/2027 A- 500 504,190
Puerto Rico Comwlth Pub Impt
Ser A 5.375% 7/1/2028 A- 2,000 2,074,800
-------------
TOTAL 19,323,873
-------------
HEALTHCARE 9.07%
HI St Dept Bdg & Fin Spl Purp
Mtg Rev St Francis Med Ctrs(11) 6.50% 7/1/2022 AAA 1,200 1,215,156
HI St Dept Bdg & Fin Spl Purp
Rev Kaiser Permanente Ser A 5.15% 3/1/2015 A 1,250 1,283,237
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
42
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HAWAII TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
HI St Dept Bdg & Fin Spl Purp
Rev Kapiolani Hlth 6.20% 7/1/2016 BBB+ $ 1,000 $ 1,045,160
HI St Dept Bdg & Fin Spl Purp
Rev Kapiolani Hlth 6.25% 7/1/2021 BBB+ 2,000 2,060,840
HI St Dept Bdg & Fin Spl Purp
Rev The Queens Hlth Sys Ser B(15) 5.25% 7/1/2023 AAA 1,000 1,050,260
Puerto Rico Ind Tourist Ed
Med Mutuo Oblig Grp Ser A(15) 6.25% 7/1/2024 AAA 150 161,537
------------
TOTAL 6,816,190
------------
HOUSING 6.40%
HI St Hsg Fin & Dev Corp Sing
Fam Mtg Purp Rev Ser A AMT(9) 7.10% 7/1/2024 AAA 880 888,650
HI St Hsg Fin & Dev Corp Sing
Fam Mtg Purp Rev Ser B(9) 5.30% 7/1/2028 AAA 850 868,768
HI St Hsg Fin & Dev Corp Sing
Fam Mtg Purp Rev Ser B(9) 5.45% 7/1/2017 AAA 1,000 1,043,950
Honolulu HI City & Cnty Mtg
Rev FHA Smith Beretania 8A(15)(8) 5.45% 1/1/2025 Aaa 500 503,940
Puerto Rico Hsg Fin Auth Home
Mtg Rev AMT-Mtg Bkd Secs-Ser A 4.875% 6/1/2034 AAA 1,500 1,502,190
-------------
TOTAL 4,807,498
-------------
LEASE 0.70%
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.75% 8/1/2030 BBB+ 500 524,595
-------------
MISCELLANEOUS 5.47%
HI St Ctfs Partn Cap Dist
Kapolei St Office Ser A(2) 5.00% 5/1/2018 AAA 475 507,048
HI St Ctfs Partn Cap Dist
St Office(15) 5.50% 5/1/2020 AAA 500 541,180
Puerto Rico Pub Bldg Auth Rev
Govt Fac Ser B(2) 5.00% 7/1/2027 AAA 1,000 1,019,420
Puerto Rico Pub Bldg Auth Rev
Gtd Govt Fac Ser D 5.25% 7/1/2036 A- 2,000 2,039,160
-------------
TOTAL 4,106,808
-------------
POWER 7.39%
HI St Dept Bdg & Fin Spl Purp
HI Elec Co Inc PJS-Ser A AMT(2) 5.10% 9/1/2032 AAA 1,500 1,504,185
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
43
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HAWAII TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
HI St Dept Bdg & Fin Spl Purp
Mtg Rev HI Elec Co Ser A AMT(15) 6.60% 1/1/2025 AAA $ 2,500 $ 2,665,250
Puerto Rico Elec Pwr Auth Rev
Ser II(11) 5.125% 7/1/2026 AAA 1,330 1,383,187
-------------
TOTAL 5,552,622
-------------
PRE-REFUNDED 23.77%
Hawaii St Ser CT(11) 5.875% 9/1/2019 AAA 1,175 1,399,637
Hawaii St Ser CU(15) 5.25% 10/1/2020 AAA 1,700 1,951,277
Honolulu HI City & Cnty Brd
Wtr Supply Wtr Sys Rev 5.80% 7/1/2021 AA 1,000 1,131,150
Honolulu HI City & Cnty Ser A(15) 5.00% 11/1/2015 AAA 405 455,390
Honolulu HI City & Cnty Ser A(15) 5.00% 11/1/2015 AAA 1,095 1,169,701
Honolulu HI City & Cnty Ser A(10) 5.50% 9/1/2016 AAA 555 640,365
Honolulu HI City & Cnty Ser A(10) 5.50% 9/1/2016 AAA 440 499,730
Honolulu HI City & Cnty Ser B(10) 5.00% 11/1/2016 AAA 235 266,422
Honolulu HI City & Cnty
Wtr ETM(10)(17) 6.00% 12/1/2015 AAA 1,000 1,220,250
Kauai Cnty HI(10) 6.125% 8/1/2024 AAA 580 699,068
Maui Cnty HI Ser A(15) 5.00% 3/1/2022 AAA 750 776,520
Maui Cnty HI Ser A(15) 5.75% 6/1/2016 AAA 1,035 1,165,648
Maui Cnty HI Ser A(10) 6.10% 3/1/2020 AAA 500 600,385
Municipal Secs Trust Ctfs Ser
7005 Cl B RIBs ETM+ 9.757% 10/1/2040 Aaa 1,250 1,476,600
Puerto Rico Comwlth 6.00% 7/1/2026 AAA 1,000 1,170,600
Puerto Rico Comwlth 6.50% 7/1/2023 AAA 1,250 1,320,425
Puerto Rico Comwlth Infra Fin
Auth Spl Ser A ETM 5.375% 10/1/2024 AAA 300 327,225
Puerto Rico Comwlth Infra Fin
Auth Spl Ser A ETM 5.50% 10/1/2032 AAA 200 218,894
Puerto Rico Ind Med & Envr
Poll Ctrl St. Luke Hosp Ser A 6.25% 6/1/2010 NR 1,250 1,367,450
-------------
TOTAL 17,856,737
-------------
TRANSPORTATION 12.00%
Hawaii St Hwy Rev(11) 5.50% 7/1/2020 AAA 1,100 1,192,565
HI St Hbr Cap Impt Rev AMT(10) 6.25% 7/1/2015 AAA 500 525,885
HI St Hbr Cap Impt Rev AMT(10) 6.375% 7/1/2024 AAA 500 526,150
Puerto Rico Comwlth Hwy &
Transn Auth Rev PMD Ser B 6.00% 7/1/2026 A 1,000 1,058,820
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
44
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
HAWAII TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites RIBs 9.853% 1/1/2010 NR $ 1,000 $ 1,160,920
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser D 5.75% 7/1/2041 A 1,000 1,080,460
Puerto Rico Comwlth Hwy &
Transn Auth Transn Sub PR Rev 5.00% 7/1/2022 A- 20 20,423
Puerto Rico Comwlth Hwy
Transn Auth Hwy Rev Ser Y(15)(14) 5.50% 7/1/2036 AAA 250 274,795
Puerto Rico Comwlth Hwy
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2036 A 3,000 3,177,660
-------------
TOTAL 9,017,678
-------------
WATER/SEWER 0.14%
Honolulu HI City & Cnty Brd
Wtr Supply Wtr Sys Rev(11) 5.25% 7/1/2031 AAA 100 103,594
-------------
TOTAL MUNICIPAL BONDS (Cost $68,141,741) $ 73,293,352
==============================================================================================================================
</Table>
SCHEDULE OF INVESTMENTS
MINNESOTA TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
MUNICIPAL BONDS 92.30%
EDUCATION 13.04%
MN St Higher Ed Fac Auth Rev
Hamline Univ Ser 5-B 6.00% 10/1/2029 Baa1 500 523,515
MN St Higher Ed Fac Auth Rev
Macalester College Ser 4-J 5.55% 3/1/2017 Aa3 260 282,217
MN St Higher Ed Fac Auth Rev
Univ of St Thomas Ser 4-A1 5.625% 10/1/2016 A2 250 264,102
MN St Higher Ed Fac Auth Rev
Univ of St Thomas Ser 4-M 5.35% 4/1/2017 A2 250 262,403
Pequot Lakes MN Indpt Sch
Dist No 186(10) 5.25% 2/1/2022 AAA 1,550 1,645,372
Prior Lake MN Indpt Sch Dist
No 719 Ser A(10) 5.25% 2/1/2023 Aaa 1,470 1,550,997
University MN Ser A 5.75% 7/1/2018 AA 250 298,050
-------------
TOTAL 4,826,656
-------------
GENERAL OBLIGATION 21.71%
Buffalo MN Cap Impt Ser B(d)(15) 5.00% 2/1/2024 Aaa 150 153,585
Elk River MN Sch Dist(15) 5.50% 2/1/2021 Aaa 500 547,865
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
45
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MINNESOTA TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Hennepin Cnty MN 4.00% 12/1/2007 AAA $ 1,000 $ 1,086,120
Lake Superior MN Indpt Sch
Dist #381 Ser A(11) 5.00% 4/1/2023 Aaa 500 515,245
Medford MN Indpt Sch Dist
#763 Ser A(11) 5.50% 2/1/2031 Aaa 500 537,990
Minneapolis MN Ser E 5.00% 3/1/2026 AAA 500 511,385
Minnesota St 5.25% 8/1/2014 AAA 265 280,375
Minnesota St 6.00% 11/1/2006 AAA 1,000 1,138,730
Morris MN Indp Sch Dist
#769 Bldg(15) 5.00% 2/1/2028 AAA 1,000 1,022,380
North St. Paul Maplewood MN
Indpt Sch Dist #622 5.125% 2/1/2025 AA+ 400 410,980
North St. Paul Maplewood MN
Indpt Sch Dist #622 Ser A 5.125% 2/1/2020 AA+ 100 104,642
Princeton MN Indpt Sch
Dist #477(11) 5.125% 2/1/2024 Aaa 1,000 1,035,300
Puerto Rico Comwlth Pub Impt
Unrefunded-Pub Impt(15)(14) 5.00% 7/1/2028 AAA 175 178,805
Ramsey Cnty MN ST Aid Str-Ser C 5.00% 2/1/2024 AAA 500 511,950
-------------
TOTAL 8,035,352
-------------
HEALTHCARE 7.20%
Bemidji Minn Hlthcare Fac
North Country Health Svcs(16) 5.00% 9/1/2024 AA 1,000 1,021,590
Hastings MN Hlthcare Fac Rev
Regina Med Ctr(1) 5.30% 9/15/2028 A 400 404,844
Minneapolis & St. Paul MN Hsg
Redev Auth Hlthcare Sys Ser A(11) 5.70% 8/15/2016 AAA 150 161,130
Minneapolis MN Hlthcare Sys Rev(15) 5.00% 5/15/2021 AAA 250 260,875
MN Agric & Econ Dev Bd Rev
Hlthcare Fairview Hosp Ser A(15) 5.50% 11/15/2017 AAA 220 240,361
Rochester MN Hlthcare Fac Rev(15)(14) 5.50% 11/15/2027 AAA 500 525,535
St. Paul MN Hsg & Redev Auth
Franciscan Hlth Pj(12)(8) 5.30% 11/20/2022 AAA 50 51,970
-------------
TOTAL 2,666,305
-------------
HOUSING 17.06%
Dakota Cnty MN Hsg & Redev
Auth Sing Fam Mtg Rev AMT(13) 5.85% 10/1/2030 AAA 472 489,837
Eden Prairie MN Multi Fam Hsg
Rev Lincoln Parc Pj Ser A-1(12)(8) 6.40% 12/20/2020 Aaa 300 328,839
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
46
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MINNESOTA TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Fairbault MN Hsg & Redev Auth
Govt Trails Edge Apts Ser A 5.25% 2/1/2028 A3 $ 300 $ 300,939
Minneapolis MN Multi Fam Hsg
Rev Mtg East Village South(12)(8) 6.10% 7/20/2020 Aaa 1,000 1,080,140
Minneapolis MN Multifamily
Rev Hsg GNMA Coll East
Phillips AMT(d)(12) 5.25% 8/20/2044 Aaa 300 301,590
Minnesota St Hsg Fin Agy
Residential Hsg Fin Ser F AMT 5.40% 7/1/2030 AA+ 1,500 1,533,180
Minnesota St Hsg Fin Agy Sing
Fam Mtg Ser D AMT 5.85% 7/1/2019 AA+ 175 181,998
Minnesota St Hsg Fin Agy Sing
Fam Mtg Ser D AMT 6.40% 7/1/2015 AA+ 135 140,061
Minnesota St Hsg Fin Agy Sing
Fam Mtg Ser E 5.90% 7/1/2025 AA+ 130 133,727
Minnesota St Hsg Fin Agy Sing
Fam Mtg Ser G AMT 6.25% 7/1/2026 AA+ 105 108,817
Robbinsdale MN Hsg Dev Sr Hsg
Pj Ser B(10) 5.75% 1/1/2023 Aaa 250 261,565
Scott Cnty MN Hsg & Redev
Savage City Hamilton Apts Pj(2) 5.60% 2/1/2019 Aaa 80 83,421
St. Louis Park MN Multi Fam
Hsg Mtg Cmnty Hsg(8) 6.15% 12/1/2016 Aa2 100 105,256
St. Paul MN Hsg & Redev Auth
Multifamily Hsg Rev Selby AMT(12)(8) 5.50% 9/20/2044 Aaa 750 759,742
St. Paul MN Port Auth Hsg
Burlington Apt(12) 5.35% 5/1/2031 AAA 500 504,160
-------------
TOTAL 6,313,272
-------------
LEASE 5.24%
Olmsted Cnty MN Hsg & Redev 5.00% 2/1/2023 AAA 275 279,700
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.75% 8/1/2030 BBB+ 500 524,595
Rochester MN Indpt Sch Dist
#535 Ctfs Partn(11) 5.125% 2/1/2020 AAA 85 90,406
St Paul MN Port Auth Lease
Rev Office Bldg 5.25% 12/1/2027 AA+ 1,000 1,043,520
-------------
TOTAL 1,938,221
-------------
MISCELLANEOUS 4.29%
Bemidji MN Lease Rev MN St
Bureau Crim Appreh(15) 5.80% 12/1/2021 Aaa 460 510,223
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
47
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MINNESOTA TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Douglas Cnty MN Hsg & Redev
Governmental Hsg Ser A(15) 5.50% 1/1/2032 Aaa $ 560 $ 585,609
Minnesota St Retirement Sys
Bldg Rev 6.00% 6/1/2030 AAA 250 283,027
St. Cloud MN Ctfs Partn 5.90% 12/1/2017 A+ 200 207,696
------------
TOTAL 1,586,555
------------
POWER 9.64%
Chaska MN Elec Rev Ser A 6.00% 10/1/2025 A3 250 267,340
Puerto Rico Elec Pwr Auth Rev
Ser DD(11) 4.50% 7/1/2019 AAA 95 97,270
Rochester MN Elec Util Rev(2)(17) 5.25% 12/1/2030 AAA 1,000 1,046,040
South MN Muni Agy Supply Sys
Rev Ser A(15) Zero Coupon 1/1/2021 AAA 1,135 504,303
Western MN Mun Pwr Agy Pj
Ser A(2) 5.50% 1/1/2016 Aaa 565 632,885
Western MN Muni Pwr Agy(15) 5.00% 1/1/2026 Aaa 1,000 1,022,210
-------------
TOTAL 3,570,048
-------------
PRE-REFUNDED 5.77%
Minneapolis MN Spl Sch
Dist #001(10) 5.375% 2/1/2014 AAA 250 253,340
Minneapolis MN Spl Sch
Dist #001 Ctfs Partn 5.75% 2/1/2015 AA+ 100 115,111
Minneapolis MN Spl Sch
Dist #001 Ctfs Partn 5.75% 2/1/2017 AA+ 1,120 1,289,243
Minnesota Pub Fac Auth Wtr
Poll Ctrl Rev Ser A 6.25% 3/1/2016 AAA 100 107,337
Puerto Rico Comwlth Pub Impt
Prerefunded-Pub Impt(15)(14) 5.00% 7/1/2028 AAA 325 371,394
-------------
TOTAL 2,136,425
-------------
TRANSPORTATION 8.35%
Minneapolis & St. Paul MN Met
Comm Arpt Rev Sub Ser C(10) 5.25% 1/1/2026 AAA 2,000 2,063,020
Minneapolis & St. Paul MN Met
Sub Ser A(15) 5.00% 1/1/2023 AAA 1,000 1,028,260
-------------
TOTAL 3,091,280
-------------
TOTAL MUNICIPAL BONDS (Cost $32,576,883) $ 34,164,114
==============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
48
<Page>
SCHEDULE OF INVESTMENTS
MISSOURI TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 98.15%
EDUCATION 7.65%
Bowling Green MO Sch Dist R-I
Bldg Corp Leasehold Rev(15) 5.85% 3/1/2020 Aaa $ 1,000 $ 1,124,100
Kansas Cnty MO Met Cmnty
Colleges Bldg Corp Rev Ref(10) 5.00% 7/1/2021 Aaa 1,000 1,046,300
Mehville MO Sch Dist #R9 Ctfs
Partn MO Cap Impt(11) 5.25% 9/1/2013 AAA 1,000 1,131,310
Missouri St Hlth & Ed Fac
Auth Ref Washington Univ Ser B 5.00% 3/1/2030 AA+ 1,800 1,822,158
Missouri St Hlth & Ed Fac
Auth Washington Univ Ser A 4.75% 11/15/2037 AA+ 2,050 2,009,164
Missouri St Hlth & Ed Fac
Auth Webster Univ(15) 5.25% 4/1/2021 Aaa 2,000 2,128,540
University MO Univ Rev
Ref-Sys Facs-Ser B(15)(14) 5.00% 11/1/2027 AAA 1,500 1,524,855
University MO Univ Rev Sys Fac 5.50% 11/1/2017 AA+ 950 962,141
-------------
TOTAL 11,748,568
-------------
GENERAL OBLIGATION 20.28%
Belton MO Sch Dist No 124 MO
Direct Deposit Prog(11) 6.00% 3/1/2020 AAA 1,770 2,026,455
Boone Cnty MO Reorg Sch Dist #R-6 6.00% 3/1/2020 AA+ 500 570,905
Franklin Cnty MO Reorg Sch
Dist # R-XV 6.00% 3/1/2020 AA+ 390 445,306
Hazelwood MO Sch Dist Impt-Mo
Direct Deposit PG 5.25% 3/1/2020 Aaa 630 682,492
Ladue MO Sch Dist 5.25% 3/1/2016 AAA 2,180 2,369,878
Puerto Rico Comwlth Pub Impt
Pub Impt-Ser A(15)(14) 5.50% 7/1/2029 AAA 1,000 1,146,470
Puerto Rico Comwlth Pub Impt
Pub Impt-Ser B(10) 5.50% 7/1/2011 AAA 3,985 4,632,841
Puerto Rico Comwlth Pub Impt
Ref Pub Impt Ser C(11) 5.00%# 7/1/2021 AAA 3,000 3,370,620
Puerto Rico Comwlth Pub Impt Ser A 5.125% 7/1/2031 A- 3,595 3,644,036
Springfield MO Sch Dist #R12
Direct Deposit Prog 5.85% 3/1/2020 AA+ 500 562,355
St. Louis Cnty MO Pattonville
#R-3 Sch Dist(10) 6.00% 3/1/2019 AAA 845 976,854
St. Louis Cnty MO Sch Dist
#R-8 Lindbergh(15) Zero Coupon 3/1/2017 AAA 2,940 1,642,196
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
49
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MISSOURI TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
St. Louis Cnty MO Sch Dist
#R-8 Lindbergh(15) Zero Coupon 3/1/2018 AAA $ 3,015 $ 1,598,945
St. Louis MO Brd Ed MO Direct
Dep Prog-Ser A 5.25% 4/1/2019 AA+ 2,975 3,233,884
St. Louis MO Pub Safety(10) 5.125% 2/15/2018 AAA 270 289,229
University City MO Sch Dist(15) 10.00% 2/15/2008 AAA 1,175 1,548,204
Wentzville MO Sch Dist No
R 04 Ser A(10) 4.50% 3/1/2023 Aaa 2,400 2,384,544
-------------
TOTAL 31,125,214
-------------
HEALTHCARE 8.87%
Cape Girardeau Cnty MO Ind
Dev Auth Health Care Facs Rev 5.75% 6/1/2032 A-(c) 1,900 1,940,090
Hannibal MO Ind Dev Auth Hlth
Fac Rev Regl Hosp Ser A(11) 5.625% 3/1/2012 AAA 2,170 2,384,179
Missouri St Hlth & Ed Fac
Auth BJC Hlth 5.25% 5/15/2032 AA 5,000 5,144,250
Missouri St Hlth & Ed Fac Auth Rev(2) 5.25% 6/1/2028 AAA 2,000 2,058,740
Missouri St Hlth & Ed Fac
Auth Rites PA-1049 RIBs(2) 16.885% 6/1/2010 AAA 855 1,063,603
North Kansas City MO Hosp Rev
North Kans City Hosp- Ser A(11) 5.125% 11/15/2033 AAA 1,000 1,016,930
-------------
TOTAL 13,607,792
-------------
HOUSING 5.63%
MO St Dev Fin Brd Multi Fam
Rev Quality Hill Pj Ser A(16) 5.60% 9/15/2028 AA 2,115 2,160,303
MO St Dev Fin Brd Solid Waste
Disp Rev P & G Paper Pj AMT 5.20% 3/15/2029 AA- 1,000 1,056,870
MO St Hsg Dev Cmnty Mtg Rev
Sing Fam Mtg AMT(12)(8) 6.22% 3/1/2026 AAA 2,735 2,825,611
MO St Hsg Dev Cmnty Mtg Rev
Sing Fam Mtg Rev AMT(13) 5.375% 9/1/2022 AAA 1,915 1,980,340
MO St Hsg Dev Cmnty Mtg Rev
Sing Fam Mtg Ser A AMT(12) 6.75% 6/1/2024 AAA 105 105,724
MO St Hsg Dev Cmnty Mtg Rev
Sing Fam Ser E-1 AMT(13) Zero Coupon 3/1/2029 AAA 2,110 507,117
-------------
TOTAL 8,635,965
-------------
LEASE 5.52%
Gladstone MO Ctfs Partn Ser A(2) 5.35% 6/15/2016 Aaa 1,095 1,204,018
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
50
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MISSOURI TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Grandview MO Ctfs Partn(10) 5.00% 1/1/2027 Aaa $ 2,500 $ 2,546,150
MO Dev Fin Brd Cultural Facs
Nelson Gallery Fndtn Ser A(15) 5.00% 12/1/2030 AAA 4,650 4,730,724
-------------
TOTAL 8,480,892
-------------
MISCELLANEOUS 16.31%
BI State Dev Agy MO Met Dist
Metrolink Cross Cnty Proj-B(11) 5.00% 10/1/2032 AAA 5,000 5,070,700
Kansas City MO Muni Assistance
Corp Rev Leasehold-Ser 2001A(2) 5.00% 3/1/2019 AAA 1,500 1,591,635
Kansas City MO Muni
Assistance Corp Rev Ser A 5.125% 3/1/2019 A2 1,100 1,172,391
Kansas City MO Muni
Assistance Leasehold Bartle(15) 5.00% 4/15/2020 AAA 1,500 1,553,745
Missouri St Brd Pub Bldgs Spl Ser A 5.00% 10/15/2027 AA+ 3,000 3,056,850
MO Dev Fin Brd Cultural Facs
Nelson Gallery(15) 5.25% 12/1/2013 AAA 2,305 2,583,882
MO St Ctfs Partn Bonne Terre
Prison Pj Ser A(2) 5.15% 6/1/2018 AAA 1,015 1,086,293
MO St Dev Fin Brd Infra Fac
Rev Hartman Hrtge Ctr Ser A(2) 5.875% 4/1/2020 Aaa 1,000 1,120,960
Puerto Rico Pub Bldg Auth Rev
Gtd Govt Fac Ser D 5.25% 7/1/2036 A- 1,250 1,274,475
Puerto Rico Pub Bldg Auth Rev
Ref-Govt Facs-Ser C 5.75% 7/1/2018 A- 1,000 1,148,760
St Louis MO Mun Fin Corp
Lease Carnahan Courthouse-Ser A(10) 5.125% 2/15/2027 Aaa 1,500 1,538,370
St Louis MO Mun Fin Corp
Lease Impt City Justice Ctr Ser A(2) 6.00% 2/15/2020 Aaa 760 873,187
St. Louis MO Ind Dev Auth Rev
Convention Ctr Hotel(2) Zero Coupon 7/15/2020 AAA 2,000 914,100
St. Louis MO Ind Dev Auth Rev
Kiel Ctr Multi Purp Arena AMT 7.875% 12/1/2024 BB+(b) 2,000 2,055,680
-------------
TOTAL 25,041,028
-------------
POWER 1.33%
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN(15) 5.00% 7/1/2032 AAA 500 512,765
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN 5.125% 7/1/2029 A- 1,500 1,525,785
-------------
TOTAL 2,038,550
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
51
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MISSOURI TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
PRE-REFUNDED 17.86%
Clay Cnty MO Pub Bldg Auth
Leasehold Rev(10) 7.00% 5/15/2014 AAA $ 1,000 $ 1,037,410
Missouri Sch Brds Assoc Lease
Partn NIXA Reorg Sch Dist R-2(16) 5.40% 3/1/2020 AA 850 916,784
Missouri St Envr Impt & Enrg
Prerefunded St Revolv FD Ser B 7.20% 7/1/2016 Aaa 1,130 1,205,134
Missouri St Envr Impt & Enrg
Prerefunded St Revolving FD-D 5.90% 1/1/2019 Aaa 1,860 2,067,557
Missouri St Envr Impt & Enrg
Prerefunded St Revolving FD-E 5.625% 7/1/2016 Aaa 630 715,743
Missouri St Hlth & Ed Fac
Auth BJC Hlth Sys Ser A ETM 6.50% 5/15/2020 Aa2 4,900 5,148,381
Missouri St Hlth & Ed Fac
Auth St Louis Univ High Sch 6.35% 10/1/2014 A2 1,750 1,860,653
Missouri St Hlth & Ed Fac
Auth Washington Univ Ser A 6.00% 3/1/2030 Aaa 850 1,012,945
Municipal Secs Trust Ctfs Ser
7005 Cl B RIBs ETM+ 9.757% 10/1/2040 Aaa 3,050 3,602,904
Puerto Rico Comwlth Ser A ETM 5.50% 10/1/2040 AAA 2,700 2,944,728
St Louis MO Mun Fin Corp
Lease Rev City Justice Ctr Ser A(2) 6.00% 2/15/2019 AAA 3,500 3,951,745
St. Louis MO Pkg Fac Rev ETM(15) 5.375% 12/15/2021 AAA 10 10,866
St. Louis MO Sch Dist(10) 6.00% 4/1/2012 AAA 645 647,012
University MO Univ Rev Sys Facs 5.80% 11/1/2027 AA+ 1,975 2,296,649
-------------
TOTAL 27,418,511
-------------
RESOURCE RECOVERY 2.15%
Missouri St Envr Impt & Enrg
Unrefunded Bal St Revolving A 6.55% 7/1/2014 Aaa 560 567,084
Missouri St Envr Impt & Enrg
Unrefunded Bal St Revolving B 7.20% 7/1/2016 Aaa 1,120 1,188,936
Missouri St Envr Impt & Enrg
Unrefunded Bal St Revolving D 5.625% 7/1/2016 Aaa 220 243,769
Missouri St Envr Impt & Enrg
Unrefunded Bal St Revolving E 5.90% 1/1/2019 Aaa 240 262,397
St. Louis MO Ind Dev Auth
Anheuser-Busch Pj AMT 5.875% 11/1/2026 A+ 1,005 1,032,185
-------------
TOTAL 3,294,371
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
52
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MISSOURI TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION 10.55%
Columbia MO Spl Oblig Cap Impt 5.50% 2/1/2016 AA- $ 330 $ 355,585
Missouri St Hwy & Trans Comm Ser A 5.00% 2/1/2021 AA 1,680 1,755,499
Missouri St Hwy & Trans Comm
St Rd Rev Ser A 5.00% 2/1/2022 AA 1,970 2,045,983
Missouri St Hwy & Trans Comm
St Rd Rev Ser A 5.25% 2/1/2020 AA 1,830 1,957,148
Puerto Rico Comwlth Hwy & Ser E(11) 5.50% 7/1/2013 AAA 750 874,927
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites RIBs 9.853% 1/1/2010 NR 2,500 2,902,300
St. Louis MO Arpt Rev Airport
Dev Prog Ser A(15) 5.25% 7/1/2031 AAA 2,000 2,060,100
St. Louis MO Arpt Rev Airport Ser A(15) 5.125% 7/1/2022 AAA 2,000 2,083,500
St. Louis MO Arpt Rev Cap
Impt Prog-Ser A(15) 5.00% 7/1/2032 AAA 1,500 1,521,105
St. Louis MO Arpt Rev Lambert
Intl Ser B AMT(10) 5.25% 7/1/2027 AAA 625 633,913
-------------
TOTAL 16,190,060
-------------
WATER/SEWER 2.00%
St. Charles Cnty MO Pub Wtr
Supply Dist #2 Ctfs Partn(15) 5.125% 12/1/2027 Aaa 3,000 3,075,180
-------------
TOTAL MUNICIPAL BONDS (Cost $142,763,494) $ 150,656,131
==============================================================================================================================
SCHEDULE OF INVESTMENTS
NEW JERSEY TAX-FREE FUND SEPTEMBER 30, 2003
MUNICIPAL BONDS 99.52%
EDUCATION 15.91%
Higher Ed Student Assist Auth
NJ Student Loan Rev Ser A AMT(15) 6.15% 6/1/2019 AAA 960 1,028,160
New Jersey St Ed Fac Auth Rev
Higher Ed Cap Impt-Ser A(2) 5.25% 9/1/2019 AAA 2,000 2,165,520
New Jersey St Ed Fac Auth Rev
Princeton Ser B 5.125% 7/1/2019 AAA 355 376,602
New Jersey St Ed Fac Auth Rev
Princeton Ser H 5.25% 7/1/2017 AAA 700 765,072
New Jersey St Ed Fac Auth Rev
Princeton Ser H 5.25% 7/1/2022 AAA 2,560 2,705,510
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
53
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW JERSEY TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
New Jersey St Ed Fac Auth Rev
Princeton Ser H 5.25% 7/1/2026 AAA $ 2,350 $ 2,436,151
New Jersey St Ed Fac Auth Rev
Princeton Ser H 5.375% 7/1/2024 AAA 2,550 2,701,190
New Jersey St Ed Fac Auth Rev
Ser H-Ramapo Clg Of NJ(10) 5.00% 7/1/2019 AAA 1,875 1,986,525
New Jersey St Ed Fac Auth Rev
Wm Paterson Ser E(18) 5.00% 7/1/2027 AAA 2,500 2,547,700
New Jersey St Edl Facs Auth
Kean Univ Ser D(10) 5.00% 7/1/2033 AAA 2,500 2,540,325
New Jersey St Edl Facs Auth
Princeton Theological Seminary 5.00% 7/1/2026 AAA 2,500 2,565,800
Rutgers St Univ NJ Ser A 5.20% 5/1/2027 AA 750 764,497
Rutgers St Univ NJ Ser B(10) 4.75% 5/1/2034 AAA 1,395 1,375,024
University Medicine & Dentist
NJ CTFS Partn(2) 5.00% 4/15/2025 AAA 500 511,410
-------------
TOTAL 24,469,486
-------------
GENERAL OBLIGATION 16.63%
Chatham Dist NJ Brd Ed(15) 5.00% 1/15/2019 Aaa 1,020 1,073,295
Chatham Dist NJ Brd Ed(15) 5.125% 1/15/2024 Aaa 595 612,618
Chatham Dist NJ Brd Ed(15) 5.25% 1/15/2026 Aaa 1,500 1,554,960
Millburn Township NJ Sch Dist 5.35% 7/15/2018 Aa1 1,050 1,219,764
Millburn Township NJ Sch Dist 5.35% 7/15/2019 Aa1 250 289,200
Montville Township NJ Fire
Dist No 23 5.25% 7/15/2016 A2 410 460,438
Morristown NJ(11) 6.50% 8/1/2019 AAA 3,440 3,805,844
New Jersey St Var Purp
Ref-Ser J(15)(14) 5.00% 7/15/2009 AAA 3,500 3,958,255
Ocean Cnty NJ Gen Impt 5.125% 9/1/2020 Aa1 1,800 1,920,240
Paterson NJ(11) 9.30% 2/15/2004 AAA 4,200 4,326,210
Pohatcong Township NJ Sch Dist(11) 5.25% 7/15/2026 AAA 1,335 1,450,664
Puerto Rico Comwlth Pub Impt(11)(6) 4.50% 7/1/2023 AAA 1,000 1,001,670
Puerto Rico Comwlth Pub Impt Ser A 5.125% 7/1/2031 A- 1,840 1,865,098
Washington Township NJ Brd Ed(10) 5.00% 1/1/2027 Aaa 2,000 2,039,100
-------------
TOTAL 25,577,356
-------------
HEALTHCARE 7.35%
NJ Econ Dev Auth Rev Masonic
Charity Fndtn Pj 6.00% 6/1/2025 A+ 1,000 1,090,000
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
54
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW JERSEY TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
NJ Hlthcare Fac Fin Auth Rev
Bayonne Hosp(11) 6.25% 7/1/2012 AAA $ 1,370 $ 1,444,309
NJ Hlthcare Fac Fin Auth Rev
Mtg Englewood Hosp(15)(8) 5.25% 8/1/2013 AAA 1,445 1,623,877
NJ Hlthcare Fac Fin Auth Rev
Robert Wood Johnson Univ Hosp 5.75% 7/1/2031 A+ 3,500 3,703,805
NJ Hlthcare Fac Fin Auth Rev
Spectrum For Living Ser B(8) 6.50% 2/1/2022 AAA 795 810,065
Puerto Rico Ind Tourist Ed
Med & Envr Ctrl Fac Hosp Ser A 6.125% 11/15/2030 AA 1,000 1,097,560
Puerto Rico Ind Tourist Ed
Med Envr Ctrl Fac Hosp Ser A 6.125% 11/15/2025 AA 415 456,815
Puerto Rico Ind Tourist Ed
Med Mutuo Oblig Grp Ser A(15) 6.25% 7/1/2024 AAA 1,000 1,076,910
-------------
TOTAL 11,303,341
-------------
HOUSING 0.11%
Virgin Islands Hsg Fin Auth
Sing Fam Rev Ser A AMT(12) 6.50% 3/1/2025 AAA 165 170,714
-------------
INDUSTRIAL 5.03%
New Jersey Economic Dev Auth
Amer Wtr Co Inc Ser B AMT(10) 5.375% 5/1/2032 AAA 5,000 5,171,700
New Jersey Economic Dev Auth
Middlesex Wtr Co Pj AMT(15) 5.35% 2/1/2038 AAA 2,500 2,564,500
-------------
TOTAL 7,736,200
-------------
LEASE 1.66%
Monmouth Cnty NJ Impt Auth
Rev Govtl Ln(11) 5.00% 12/1/2021 AAA 500 523,540
Union Cnty Impt Auth Rev
Lease Madison Redev(11) 5.00% 3/1/2034 Aaa 2,000 2,023,880
-------------
TOTAL 2,547,420
-------------
MISCELLANEOUS 7.01%
Carteret NJ Brd Ed Ctfs Partn(15) 5.75% 1/15/2030 Aaa 80 88,048
Carteret NJ Brd Ed Ctfs Partn(15) 6.00% 1/15/2024 Aaa 430 491,503
Casino Reinvestment Dev Ath
NJ Ser A(11) 5.25% 10/1/2015 AAA 100 109,594
Hudson Cnty NJ Impt Auth
Hudson Regl Fire/Rescue Ser A(2) 5.625% 9/1/2019 Aaa 100 111,163
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
55
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW JERSEY TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Middlesex Cnty NJ Impt Auth
Cnty-Gtd Open Space Tr Fd 5.25% 9/15/2022 AAA $ 1,910 $ 2,044,407
Middlesex Cnty NJ Impt Auth
Rev Cnty-Gtd Open Space Tr Fd 5.25% 9/15/2021 AAA 2,000 2,157,480
Monmouth Cnty NJ Impt Auth
Rev Unrefunded Bal Govtl Ln(15) 6.40% 12/1/2009 AAA 195 209,572
New Jersey Econ Dev Auth Rev
Mun Rehab(2) 5.00% 4/1/2028 AAA 1,600 1,631,504
NJ Envr Infrastructure 5.25% 9/1/2020 AAA 2,000 2,148,480
North Bergen Twp NJ Brd Ed
CTFS Partn(11) 6.125% 12/15/2022 Aaa 1,185 1,383,203
Rahway NJ Ctfs Partn(15) 5.625% 2/15/2020 Aaa 365 403,248
-------------
TOTAL 10,778,202
-------------
POWER 3.32%
Brick Twp NJ Muni Util Auth(10) 5.00% 12/1/2025 Aaa 2,000 2,044,120
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN(15) 5.00% 7/1/2032 AAA 2,000 2,051,060
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN 5.125% 7/1/2029 A- 1,000 1,017,190
-------------
TOTAL 5,112,370
-------------
PRE-REFUNDED 16.62%
Essex Cnty NJ Impt Auth Rev
Orange Muni Util & Lease(15) 6.80% 7/1/2014 AAA 1,710 1,914,670
LaFayette Yard NJ Cmnty Dev(15) 5.625% 4/1/2021 Aaa 200 235,008
Monmouth Cnty NJ Impt Auth
Rev Prerefuned-Govtl Ln(15) 6.40% 12/1/2009 AAA 880 952,644
Municipal Secs Trust Ctfs Ser
7005 Cl B RIBs ETM+ 9.757% 10/1/2040 Aaa 1,000 1,181,280
New Jersey St Hwy Auth Garden
St Pkwy Gen Rev(10) 5.75% 1/1/2015 AAA 200 235,257
NJ Bldg Auth St Bldg Rev 5.375% 6/15/2019 AA- 450 520,127
NJ Bldg Auth St Bldg Ser A(11) 5.25% 12/15/2019 AAA 1,000 1,146,750
NJ Hlthcare Fac Fin Auth Rev
Bayonne Hosp Oblig(11) 6.25% 7/1/2012 AAA 230 243,676
NJ St Transn Tr Fd Auth
Transn Sys Ser B 6.00% 6/15/2019 AA- 6,500 7,762,365
Pohatcong Township NJ Sch Dist(11) 5.95% 7/15/2023 AAA 650 745,271
Pohatcong Township NJ Sch Dist(11) 5.95% 7/15/2026 AAA 250 286,643
Puerto Rico Comwlth Pub Impt RIBs 10.54% 7/1/2029 A- 750 891,330
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
56
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW JERSEY TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth
Ser T RIBs(11) 11.486% 7/1/2018 AAA $ 7,000 $ 7,826,630
South Brunswick Township NJ(10) 5.625% 12/1/2023 AAA 45 52,898
Summit NJ 5.70% 6/1/2020 AAA 325 380,881
Trenton NJ Pkg Auth Pkg Rev(10) 6.00% 4/1/2017 Aaa 1,000 1,188,820
-------------
TOTAL 25,564,250
-------------
RESOURCE RECOVERY 0.35%
Cape May Cnty NJ Ind Poll
Ctrl Fin Auth Rev Atlan City Ser B(15) 7.00% 11/1/2029 AAA 500 538,955
-------------
SPECIAL TAX 1.97%
New Jersey St Var Purp Tax &
Rev Antic Nts 2.00% 6/25/2004 MIG1 3,000 3,022,350
-------------
TRANSPORTATION 21.35%
Delaware Riv & Bay Auth Rev(15) 5.00% 1/1/2033 AAA 1,000 1,018,460
Delaware River Port Auth PA &
NJ Ref Port Dist Pj Ser B(11) 5.10% 1/1/2021 AAA 1,435 1,514,901
Delaware River Port Auth PA &
NJ Ref Port Dist Pj Ser B(11) 5.20% 1/1/2025 AAA 1,700 1,770,397
Delaware River Port Auth PA &
NJ Rev(10) 5.50% 1/1/2026 AAA 1,000 1,061,930
New Jersey St Tpk Auth Rev Ser A(2) 5.00% 1/1/2030 AAA 3,500 3,561,915
New Jersey St Tpk Auth Rev Ser A 5.50% 1/1/2027 A 3,000 3,141,570
New Jersey St Tpk Auth Rev Ser A(15) 5.50% 1/1/2030 AAA 1,500 1,605,180
Port Auth NY & NJ(11) 5.00% 4/15/2032 AAA 5,125 5,230,113
Port Auth NY & NJ Cons 109th Ser 5.375% 1/15/2032 AA- 500 513,030
Port Auth NY & NJ Cons 119th
Ser AMT(10) 5.50% 9/15/2019 AAA 150 159,647
Port Auth NY & NJ Cons 125th Ser(11) 5.00% 10/15/2027 AAA 5,000 5,127,600
Puerto Rico Comwlth Hwy &
Transn Auth Rev PMD Ser B 6.00% 7/1/2026 A 1,000 1,058,820
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites RIBs 9.853% 1/1/2010 NR 2,750 3,192,530
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser PMD RIBs(11)(6) 10.68% 7/1/2026 Aaa 500 589,650
Puerto Rico Comwlth Hwy &
Transn Auth Ser B(15)(14) 6.00% 7/1/2026 AAA 3,015 3,285,295
-------------
TOTAL 32,831,038
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
57
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW JERSEY TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
WATER/SEWER 2.21%
Middlesex Cnty NJ Impt Auth
Util Sys Rev Cap Apprec Ser B(2) Zero Coupon 9/1/2023 AAA $ 3,000 $ 1,100,610
North Hudson Swr Auth NJ Rev Ser C(15) 5.00% 8/1/2022 Aaa 1,025 1,060,485
Ocean Twp NJ Swr Auth Ref Ser B(10) 5.25% 12/1/2011 Aaa 170 194,849
Passaic Valley NJ Sew Commrs
Swr SYs-Ser F(10) 5.00% 12/1/2020 Aaa 1,000 1,050,350
-------------
TOTAL 3,406,294
-------------
TOTAL MUNICIPAL BONDS (Cost $143,721,432) $ 153,057,976
-------------
- ------------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2003
MUNICIPAL BONDS 99.14%
EDUCATION 9.31%
Geneva NY Indl Dev Agy Civic
Fac Rev Hobart & William Smith(10) 4.25% 2/1/2017 AAA 370 376,549
Hempstead Town NY Ind Dev Agy
Civic Fac Rev Hofstra Univ Pj(15) 5.80% 7/1/2015 AAA 750 838,627
New York NY City Ind Dev Agy
NY Institute of Tech(15) 5.25% 3/1/2023 AAA 100 105,385
New York St Dorm Auth Lease
Rev Court Fac Zero Coupon 8/1/2021 AA+ 3,600 1,572,588
New York St Dorm Auth Lease
St Univ 5.375% 7/1/2022 AA- 1,000 1,061,860
New York St Dorm Auth Lease
St Univ Dorm Facs Ser A 6.00% 7/1/2030 AA- 3,500 3,972,290
New York St Dorm Auth Lease
St Univ Dorm Facs Ser A 6.25% 7/1/2020 AA- 1,250 1,462,263
New York St Dorm Auth Rev
4201 Schools Program 6.25% 7/1/2020 AA- 1,685 1,965,620
New York St Dorm Auth Rev
Colgate Univ(15) 6.00% 7/1/2016 AAA 1,000 1,219,410
New York St Dorm Auth Rev
New York Univ Ser A(2) 5.75% 7/1/2015 AAA 2,000 2,377,040
New York St Dorm Auth Rev
Pace Univ(15) 6.00% 7/1/2029 AAA 1,610 1,837,557
New York St Dorm Auth Rev
Pratt Institute(16) 6.00% 7/1/2024 AA 1,000 1,130,290
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
58
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
New York St Dorm Auth Rev
Pratt Institute(16) 6.00% 7/1/2028 AA $ 2,000 $ 2,259,460
New York St Dorm Auth Rev Sp
Act Sch Dist Pj(15) 6.00% 7/1/2016 AAA 1,400 1,536,598
New York St Dorm Auth Rev
Upstate Cmnty Colleges Ser A(11) 6.00% 7/1/2015 AAA 300 354,603
Rensselaer Cnty NY Ind Dev
Polytech Inst Ser B(2)(17) 5.50% 8/1/2022 AAA 200 218,560
Schenectady NY Ind Dev Agy
Civic Fac Rev Union College(2) 5.625% 7/1/2031 Aaa 1,500 1,615,875
St. Lawrence Cnty NY Ind Civic
Fac Rev Clarkson Univ Proj 5.125% 7/1/2021 A3 250 261,418
-------------
TOTAL 24,165,993
-------------
GENERAL OBLIGATION 10.96%
Bethlehem NY AMT(15) 7.20% 3/1/2022 AAA 1,080 1,175,224
Erie Cnty NY Indl Dev Agy
Schfac Rev City of Buffalo Pj(11) 5.75% 5/1/2023 AAA 1,250 1,387,350
New York NY 5.625% 3/15/2020 A 1,000 1,068,180
New York NY Ref - Ser B 5.75% 8/1/2016 A 1,000 1,103,970
New York NY Ser A(10)(17) 6.00% 5/15/2030 AAA 5,000 5,528,500
New York NY Ser C(11) 5.75% 3/15/2027 AAA 5,000 5,520,200
New York St Urban Dev Corp
Rev Personal Income Tax Ser C 5.00% 3/15/2033 AA 185 186,241
New York NY City Transitional Fin
Auth Future Tax Secd-Ser D(15) 5.00% 2/1/2022 AAA 5,000 5,176,850
Puerto Rico Comwlth Pub Impt 5.25% 7/1/2018 A- 2,000 2,189,680
Puerto Rico Comwlth Pub Impt Ser A 5.00% 7/1/2027 A- 1,500 1,512,570
Puerto Rico Comwlth Pub Impt Ser A(10) 5.00% 7/1/2032 AAA 1,250 1,278,350
Puerto Rico Comwlth Pub Impt Ser A 5.375% 7/1/2028 A- 1,645 1,706,523
Puerto Rico Comwlth Pub Impt
Unrefunded-Pub Impt(15)(14) 5.00% 7/1/2028 AAA 605 618,153
-------------
TOTAL 28,451,791
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
59
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE 8.13%
Cortland Cnty NY Ind Dev Agy
Cortland Mem Hosp Pj(16) 5.625% 7/1/2024 AA $ 1,750 $ 1,856,977
New York NY City Hlth & Hosp
Corp Rev Health Sys-Ser A(2) 5.25% 2/15/2022 AAA 3,000 3,163,230
New York NY City Ind Dev Agy
Rev Harbor House Pj A(12) 5.875% 5/20/2044 AAA 610 668,133
New York St Dorm Auth Rev
Insd NY St Rehab Assn Ser A(2) 5.50% 7/1/2016 AAA 935 1,061,449
New York St Dorm Auth Rev
Lenox Hill Hosp Oblig Group 5.375% 7/1/2020 A3 1,000 1,037,700
New York St Dorm Auth Rev
Mental Hlth Svc Fac(15)(14) 6.00% 8/15/2012 AAA 1,460 1,731,210
New York St Dorm Auth Rev
Mental Hlth Svc Fac Impt Ser B(15) 6.00% 2/15/2025 AAA 1,000 1,126,940
New York St Dorm Auth Rev
Mental Hlth Svc Fac Impt Ser B(15) 6.00% 2/15/2030 AAA 1,000 1,173,730
New York St Dorm Auth Rev
Mental Hlth Svc Fac Ser D(15)(14) 6.00% 8/15/2021 AAA 1,000 1,114,120
New York St Dorm Auth Rev Mtg
Nursing Home A(8)(15) 5.40% 2/1/2031 AAA 300 311,556
New York St Dorm Auth Rev Mtg
Nursing Home A(8)(15) 5.50% 8/1/2030 AAA 1,000 1,071,020
New York St Dorm Auth Rev Mtg
Nursing Home A(8)(15) 5.50% 8/1/2038 AAA 1,000 1,064,620
New York St Dorm Auth Rev Utd
Cerebral Palsy Aff #1-A(2) 5.75% 7/1/2018 AAA 1,000 1,148,640
New York St Dorm Auth Revs
Mem Sloan Kettering Ctr Ser 1(15) 5.00% 7/1/2024 AAA 2,500 2,532,550
New York St Dorm Auth Revs
Mem Sloan Kettering CTR-Ser 1 5.00% 7/1/2034 AA 2,000 2,021,380
-------------
TOTAL 21,083,255
-------------
HOUSING 1.96%
New York City Hsg Dev Corp
Multifamily Hsg Rev Ser A AMT 5.50% 11/1/2034 AA 1,500 1,537,005
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
60
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
New York St Dorm Auth Lease
Rev Court Facs Zero Coupon 8/1/2022 AA+ $ 480 $ 195,792
New York St Dorm Auth Lease
Rev Court Facs Ser A 5.50% 5/15/2020 A 1,180 1,270,270
New York St Dorm Auth Revs
Insd Jewish Brd Fam & Children(d)(2) 5.00% 7/1/2023 AAA 500 513,945
New York St Mtg Agy Rev Home
Owner Mtg Ser 70 5.40% 4/1/2022 Aa1 70 72,499
Puerto Rico Hsg Fin Auth Home
Mtg Rev AMT-Mtg Bkd Secs-Ser A 4.875% 6/1/2034 AAA 1,500 1,502,190
-------------
TOTAL 5,091,701
-------------
INDUSTRIAL 0.43%
New York Ind Dev Agy Pkg
Royal Charter Properties, Inc.(11) 5.75% 12/15/2029 AAA 1,000 1,109,670
-------------
LEASE 2.45%
New York St Urban Dev Corp
Rev St Fac 5.70% 4/1/2020 AA- 4,150 4,772,749
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.75% 8/1/2030 BBB+ 1,500 1,573,785
-------------
TOTAL 6,346,534
-------------
MISCELLANEOUS 4.22%
New York NY City Transitional
Fin Auth Rev Ser A 5.00% 11/15/2026 AA+ 730 738,490
New York NY City Tr Cultr Res
Rev Museum of American Art(1) 6.00% 7/1/2022 A 500 545,960
New York NY City Transitional Fin
Future Tax Secd-Ser E(15) 5.25% 2/1/2022 AAA 2,000 2,124,080
Puerto Rico Pub Bldg Auth Rev
Govt Fac 5.00% 7/1/2026 A- 2,000 2,018,180
Puerto Rico Pub Bldg Auth Rev
Govt Fac Ser D 5.25% 7/1/2027 A- 1,000 1,026,000
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.50% 8/1/2029 BBB+ 2,250 2,372,715
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.70% 8/1/2025 BBB+ 2,000 2,136,420
-------------
TOTAL 10,961,845
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
61
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
POWER 7.30%
NY St Enrg Res & Dev Auth Fac
Rev Con Edison Inc Ser A AMT(15)(14) 7.125% 12/1/2029 AAA $ 2,500 $ 2,693,875
NY St Enrg Res & Dev Auth Gas
Fac Rev Brklyn Ser B RIBs AMT 12.504% 7/1/2026 A+ 4,000 4,981,160
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN(15) 5.00% 7/1/2032 AAA 1,500 1,538,295
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN 5.125% 7/1/2029 A- 3,000 3,051,570
Puerto Rico Elec Pwr Auth Rev
Ser II 5.25% 7/1/2031 A- 3,625 3,719,250
Puerto Rico Elec Pwr Auth Rev Ser X 5.50% 7/1/2025 A- 2,915 2,965,604
-------------
TOTAL 18,949,754
-------------
PRE-REFUNDED 27.89%
Albany NY Muni Wtr Fin Auth
Wtr & Swr Sys Rev Ser A(10) 6.375% 12/1/2017 AAA 650 799,383
Metropolitan Transn Auth NY
Commuter Fac Rev Ser A(10) 6.00% 7/1/2016 AAA 2,000 2,357,340
Metropolitan Transn Auth NY
Commuter Fac Rev Ser A(10) 6.00% 7/1/2021 AAA 5,000 5,738,250
Metropolitan Transn Auth NY
Commuter Fac Rev Ser A(10) 6.10% 7/1/2026 AAA 2,000 2,300,680
Metropolitan Transn Auth NY
Dedicated Tax Fd Ser A(10) 4.75% 4/1/2028 AAA 2,500 2,757,525
Metropolitan Transn Auth NY
Dedicated Tax Fd Ser A(11) 5.00% 4/1/2029 AAA 2,000 2,254,300
Metropolitan Transn Auth NY
Dedicated Tax Fd Ser A(10) 6.00% 4/1/2030 AAA 3,800 4,529,942
Metropolitan Transn Auth NY
Svc Cntrct Trans Fac Ser O ETM 5.75% 7/1/2008 AAA 1,000 1,167,420
Metropolitan Transn Auth NY
Tran Fac Rev Svc Cntrct Ser R 5.50% 7/1/2017 AAA 1,000 1,172,230
Municipal Secs Trust Ctfs Ser
7005 Cl B RIBs ETM+ 9.757% 10/1/2040 Aaa 2,000 2,362,560
New York City Muni Wtr Fin
Wtr & Sew Sys Rev Ser B 6.00% 6/15/2033 AA 3,360 4,051,858
New York City Transitional
Fin Auth Rev Future Tax 2nd Ser A 6.00% 8/15/2029 AA+ 200 241,158
New York City Transitional
Fin Auth Rev Future Tax 2nd Ser B 6.00% 11/15/2024 AA+ 950 1,143,515
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
62
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
New York City Transitional
Fin Auth Rev Future Tax 2nd Ser B 6.00% 11/15/2029 AA+ $ 2,000 $ 2,407,400
New York City Transitional
Fin Auth Rev Future Tax 5.50% 5/1/2025 AA+ 555 596,936
New York City Transitional
Fin Prerefunded Future Tax Secd C 5.50% 5/1/2025 AA+ 445 521,010
New York NY City Muni Wtr Fin Ser A 6.125% 6/15/2020 AAA 1,000 1,096,890
New York St Dorm Auth Lease
Rev St Univ Dorm Facs Ser A 5.50% 5/15/2026 AA- 75 84,673
New York St Dorm Auth Rev
City Univ 3rd Gen Res Ser 2(15) 6.875% 7/1/2014 AAA 5,650 6,012,052
New York St Dorm Auth Rev
City Univ Sys Cons 4th Gen A 5.50% 7/1/2023 AA- 1,215 1,421,635
New York St Dorm Auth Rev Ser B(11) 5.75% 5/15/2017 AAA 395 469,525
New York St Dorm Auth Rev
Upstate Cmnty Colleges Ser A 6.20% 7/1/2015 AAA 1,000 1,110,270
New York NY City Transitional Fin
Auth Prerefunded-Future Tax 6.25% 11/15/2017 AA+ 2,000 2,437,460
New York St Enviro Fac Poll Ctrl
Rev St Wtr Ser E 6.875% 6/15/2014 AAA 2,795 2,952,890
NY St Environmental Facscorp
St Clean Wtr & Drinking 6.00% 6/15/2019 AAA 80 95,348
Puerto Rico Comwlth 5.375% 7/1/2025 A- 1,640 1,856,431
Puerto Rico Comwlth Aqueduct &
Swr Auth Rev ETM 10.25% 7/1/2009 AAA 715 898,319
Puerto Rico Comwlth Hwy &
Prerefunded-Ser B(15) 5.875% 7/1/2035 NR 265 316,047
Puerto Rico Comwlth Hwy
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2026 A 1,000 1,127,910
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser B 6.50% 7/1/2027 A 2,000 2,468,400
Puerto Rico Comwlth Pub Impt(15) 5.00% 7/1/2024 AAA 1,000 1,142,750
Puerto Rico Comwlth Pub Impt(15) 5.75% 7/1/2026 AAA 3,000 3,550,440
Puerto Rico Comwlth Pub Impt
Prerefunded-Pub Impt(15)(14) 5.00% 7/1/2028 AAA 1,130 1,291,307
Puerto Rico Comwlth Pub Impt RIBs 10.54% 7/1/2029 A- 1,000 1,188,440
Puerto Rico Elec Pwr Auth Rev Ser X 6.00% 7/1/2015 Aaa 2,375 2,628,697
Puerto Rico Elec Pwr Auth
Ser T RIBs(11) 11.486% 7/1/2018 AAA 3,500 3,913,315
Tompkins Cnty NY Ind Dev Agy
Civic Fac Cornell Univ Lake 5.625% 7/1/2020 AA+ 115 136,177
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
63
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Tompkins Cnty NY Ind Dev Agy
Civic Fac Cornell Univ Lake 5.75% 7/1/2030 AA+ $ 1,500 $ 1,787,700
-------------
TOTAL 72,388,183
-------------
RESOURCE RECOVERY 5.91%
NY St Enrg Res & Dev Auth
Poll Ctrl Rev Niagara Mohawk Ser A(10) 7.20% 7/1/2029 AAA 11,750 12,473,212
NY St Enviro Fac Poll Ctrl
Rev St Wtr Revolving Fd Ser A 7.50% 6/15/2012 AAA 780 783,744
NY St Enviro Fac Poll Ctrl
Rev St Wtr Ser E 6.875% 6/15/2014 AAA 1,985 2,092,905
-------------
TOTAL 15,349,861
-------------
SPECIAL TAX 0.74%
New York NY City Transitional
Fin Unrefunded-Future Tax Secd-C 5.00% 5/1/2029 AA+ 1,905 1,920,469
-------------
TRANSPORTATION 17.44%
Metropolitan Trans Auth NY
Rev Ref-Transn-Ser E 5.25% 11/15/2031 A 2,730 2,797,404
Metropolitan Transn Auth NY Ser B 5.25% 1/1/2031 AA- 1,700 1,740,562
New York NY City Transn Auth RIBs(2) 10.43% 1/1/2030 Aaa 5,000 6,069,400
Niagara NY Frontier Auth Arpt
Buffalo Niagara Int Arpt Ser B(15) 5.50% 4/1/2019 AAA 690 754,004
Port Auth NY & NJ Cons 106th
Ser AMT 6.00% 7/1/2015 AA- 350 382,225
Port Auth NY & NJ Cons 127th
Ser AMT(2) 5.125% 6/15/2037 AAA 1,280 1,288,819
Port Auth NY & NJ Cons 132nd Ser 5.00% 9/1/2029 AA- 4,310 4,359,996
Port Auth NY & NJ Cons 93rd Ser 6.125% 6/1/2094 AA- 7,500 8,695,500
Port Auth NY & NJ Sp Oblig
Rev 5th Instllmnt Spl Pj Ser 4 AMT 6.75% 10/1/2019 NR 2,970 3,075,227
Puerto Rico Comwlth Hwy &
Transn Auth Rev PMD Ser B 6.00% 7/1/2026 A 6,000 6,352,920
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites RIBs 9.853% 1/1/2010 NR 2,000 2,321,840
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser D 5.75% 7/1/2041 A 2,000 2,160,920
Puerto Rico Comwlth Hwy &
Transn Auth Sub P R St Infras 5.00% 7/1/2028 A- 1,000 1,006,180
Puerto Rico Comwlth Hwy &
Unrefunded Balance-Ser B(15) 5.875% 7/1/2035 NR 485 546,260
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
64
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Comwlth Hwy
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2036 A $ 3,500 $ 3,707,270
-------------
TOTAL 45,258,527
-------------
WATER/SEWER 2.40%
Buffalo NY Muni Wtr Fin Auth
Wtr Sys Rev(10) 5.75% 7/1/2021 AAA 500 547,665
Buffalo NY Muni Wtr Fin Auth
Wtr Sys Rev(11) 6.00% 7/1/2029 AAA 500 569,445
New York NY City Muni Wtr Fin Ser E 5.00% 6/15/2034 AA 1,000 1,007,570
New York NY City Muni Wtr Fin
Unrefunded Balance Ser B 6.00% 6/15/2033 AA 1,470 1,718,548
NY St Environmental Facscorp
St Clean Wtr & Drinking 6.00% 6/15/2019 AAA 1,420 1,652,908
Upper Mohawk NY Regl Wtr Fin
Auth NY Wtr Sys Rev(2) 5.75% 4/1/2020 Aaa 650 733,434
-------------
TOTAL 6,229,570
-------------
TOTAL MUNICIPAL BONDS (Cost $239,634,808) 257,307,153
=============
<Caption>
SHARES
(000)
------------
SHORT-TERM INVESTMENT 0.17%
MONEY MARKET MUTUAL FUND 0.17%
Dreyfus New York Muni Cash Management (Cost $431,392) 431 431,392
-------------
TOTAL INVESTMENTS 99.31% (Cost $240,066,200) $ 257,738,545
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
SCHEDULE OF INVESTMENTS
TEXAS TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000)
------------
MUNICIPAL BONDS 98.70%
EDUCATION 12.61%
Houston TX Higher Ed Fin Corp
Rice Univ 5.375% 11/15/2029 AAA $ 1,000 1,035,480
Rockwall TX Indpt Sch Dist
Sch Bldg PSF 5.25% 2/15/2029 AAA 3,000 3,112,170
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
65
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
TEXAS TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Southwest Higher Ed Auth Inc
Southern Methodist Univ(2) 5.125% 10/1/2032 AAA $ 750 $ 755,783
University TX Univ Rev Fin
Sys Ser A 5.375% 8/15/2017 AAA 3,030 3,325,455
University TX Univ Rev Fin
Sys Ser B 5.00% 8/15/2033 AAA 1,750 1,759,380
-------------
TOTAL 9,988,268
-------------
GENERAL OBLIGATION 31.64%
Azle TX Indpt Sch Dist Ser A PSF 6.00% 2/15/2022 Aaa 250 250,572
Blanco TX Ctfs Oblig(18) 5.50% 8/15/2027 AAA 665 701,695
Dallas Cnty TX Ref & Impt Ser A 5.00% 8/15/2020 AAA 450 468,680
Dallas TX Indpt Sch Dist Ref PSF 5.00% 2/15/2021 AAA 300 312,471
Gregory Portland TX Indpt Sch
Dist PSF 5.50% 8/15/2020 AAA 1,075 1,180,404
Harris Cnty TX Ctfs Oblig 5.00% 8/15/2019 AA+ 100 104,557
Katy TX Indpt Sch Dist Ltd Tax PSF 6.125% 2/15/2032 AAA 1,000 1,126,330
Laredo TX Indpt Sch Dist PSF 5.25% 8/1/2024 AAA 1,000 1,033,860
Mansfield TX Indpt Sch Dist PSF 5.25% 2/15/2023 AAA 1,000 1,043,340
Pearland TX Indpt Sch Dist Bd
Ser A PSF 5.875% 2/15/2019 AAA 1,000 1,134,940
Pearland TX Indpt Sch Dist PSF 5.125% 2/15/2022 AAA 1,500 1,550,670
Pflugerville TX Indpt Sch Dist PSF 5.00% 8/15/2026 AAA 1,000 1,014,880
Puerto Rico Comwlth Pub Impt Ser A 5.125% 7/1/2031 A- 1,000 1,013,640
San Antonio TX Indpt Sch Dist PSF 5.50% 8/15/2024 AAA 1,000 1,071,220
Socorro TX Indpt Sch Dist Ref PSF 6.00% 2/15/2015 AAA 920 1,031,228
Texas St Ser B RIBs 10.95% 9/30/2011 Aa1 5,500 7,647,750
Texas St Wtr Dev Brd 7.15% 8/1/2035 Aa1 1,600 1,671,600
United Indpt Sch Dist TX PSF 5.125% 8/15/2026 AAA 1,000 1,029,010
Webster TX Ctfs Oblig Ser A(11) 6.00% 3/1/2017 AAA 1,440 1,663,862
-------------
TOTAL 25,050,709
-------------
HEALTHCARE 4.92%
Harris Cnty TX Hlth Fac Dev
St. Lukes Episcopal Hosp Ser A 5.375% 2/15/2026 AA- 1,000 1,018,870
Harris Cnty TX Hlth Fac Mem
Hermann Hlthcare Ser A 6.375% 6/1/2029 A 1,750 1,874,145
Puerto Rico Ind Tourist Ed
Med Envr Ctrl Fac Hosp Ser A 6.125% 11/15/2025 AA 910 1,001,692
-------------
TOTAL 3,894,707
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
66
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
TEXAS TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL 13.78%
Cass Cnty TX Ind Dev Corp
Envr Impt Rev Ser A AMT 6.00% 9/1/2025 BBB $ 1,000 $ 1,024,180
Orange Cnty TX Nav & Port
Dist Ind Dev Rev North Star Steel 6.375% 2/1/2017 A+ 2,400 2,619,192
Texas City TX Ind Dev Corp
Marine Term Rev Arco Pipe Line 7.375% 10/1/2020 AA+ 5,500 7,270,560
-------------
TOTAL 10,913,932
-------------
LEASE 1.34%
Harris Cnty Houston TX Sports
Auth Rev Sr Lien Ser G(15) 5.25% 11/15/2021 AAA 1,000 1,061,650
POWER 4.38%
Fort Bend Cnty TX Muni Util
Dist #25(15) 6.00% 10/1/2028 AAA 2,170 2,454,378
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN 5.125% 7/1/2029 A- 1,000 1,017,190
-------------
TOTAL 3,471,568
-------------
PRE-REFUNDED 9.73%
Austin TX Indpt Sch Dist
Prerefunded PSF 5.75% 8/1/2015 AAA 500 561,865
Burleson Tex Indpt Sch Dist
Prerefunded PSF 6.75% 8/1/2024 AAA 2,000 2,302,820
Municipal Secs Trust Ctfs Ser
7005 Cl B RIBs ETM+ 9.757% 10/1/2040 Aaa 500 590,640
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser B 6.00% 7/1/2031 A 1,980 2,383,266
Puerto Rico Comwlth Pub Impt RIBs(15) 10.18% 7/1/2026 Aaa 500 683,480
San Antonio TX Indpt Sch Dist PSF 5.75% 8/15/2015 AAA 1,000 1,180,470
-------------
TOTAL 7,702,541
-------------
RESOURCE RECOVERY 4.79%
Gulf Coast Waste Disp Auth TX
Sew & Solid Waste Disp Rev AMT 5.90% 4/1/2036 A+ 1,500 1,581,885
Harris Cnty TX Ind Dev Corp
Marine Term & Wtr Poll Ctrl 6.625% 2/1/2024 BBB+ 1,100 1,146,244
Red River Auth TX Pollutn Ctl AMT 6.70% 11/1/2030 BBB 1,000 1,065,370
-------------
TOTAL 3,793,499
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
67
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
TEXAS TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION 7.55%
Austin TX Arpt Sys Rev Prior
Lien Ser A AMT(15) 6.125% 11/15/2025 AAA $ 2,500 $ 2,726,525
Houston TX Arpt Sys Rev Sub
Lien Ser B(11) 5.50% 7/1/2030 AAA 1,000 1,037,510
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser C 6.00% 7/1/2029A 1,000 1,096,810
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser PMD RIBs(11)(6) 10.68% 7/1/2026 Aaa 950 1,120,335
-------------
TOTAL 5,981,180
-------------
WATER/SEWER 7.96%
Dallas TX Wtr Wks & Swr Sys Rev Ref 5.00% 10/1/2012 AA+ 750 824,393
El Paso TX Wtr & Swr Rev Ref &
Impt Ser A(11) 5.25% 3/1/2027 AAA 1,000 1,034,290
San Antonio TX Wtr Rev Ref Sys(11) 5.00% 5/15/2028 AAA 1,000 1,008,310
Upper Trinity Regl Wtr Dist
TX Wtr Rev Sys Ser 4(10) 6.00% 8/1/2026 AAA 3,025 3,433,405
-------------
TOTAL 6,300,398
-------------
TOTAL MUNICIPAL BONDS (Cost $70,295,761) 78,158,452
=============
<Caption>
SHARES
(000)
------------
SHORT-TERM INVESTMENT 0.11%
MONEY MARKET MUTUAL FUND 0.11%
Dreyfus Municipal Cash Management Plus (Cost $82,570) 83 82,570
-------------
TOTAL INVESTMENTS 98.81% (Cost $70,378,331) $ 78,241,022
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
SCHEDULE OF INVESTMENTS
WASHINGTON TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000)
------------
MUNICIPAL BONDS 95.30%
EDUCATION 7.81%
Univ WA Ed Resh Rev Roosevelt Pj(15)(14) 5.375% 6/1/2029 AAA $ 1,100 1,139,776
Univ WA Rev Student Fac Fee(11) 5.50% 6/1/2019 AAA 810 890,101
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
68
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
WASHINGTON TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Washington St Higher Ed Fac
Auth Rev Gonzaga Univ Pj(15) 4.75% 4/1/2022 AAA $ 1,000 $ 1,007,240
Western WA Univ Rev Student Rec Fee(15) 5.00% 5/1/2033 AAA 900 905,580
-------------
TOTAL 3,942,697
-------------
GENERAL OBLIGATION 20.13%
Bremerton WA(2) 5.25% 12/1/2027 Aaa 1,440 1,487,477
King Cnty WA Sch Dist #405 Bellevue(10) 5.00% 12/1/2020 AAA 2,000 2,100,340
King Cnty WA Sch Dist #414
Lake Washington(11)(6) 5.50% 12/1/2019 AAA 1,000 1,106,970
King Cnty WA Ser B 4.50% 1/1/2024 AA+ 320 314,550
King Cnty WA Ser B(15) 5.00% 1/1/2030 AAA 1,000 1,005,780
Port Seattle WA Ser B AMT 5.75% 12/1/2025 AA+ 750 807,277
Port Tacoma WA(2) 5.00% 12/1/2033 AAA 400 402,828
Puerto Rico Comwlth Pub Impt
Ref Pub Impt(11) 5.00% 7/1/2024 AAA 1,000 1,029,030
Puerto Rico Pub Fin Corp
Comwlth App Ser A(2) 5.125% 6/1/2024 AAA 750 813,645
Thurston & Pierce Cntys WA
Cmnty Schs Yelm(11) 5.25% 12/1/2017 Aaa 1,000 1,097,620
-------------
TOTAL 10,165,517
-------------
HEALTHCARE 2.17%
Puerto Rico Ind Tourist Ed
Med & Envr Ctrl Fac Hosp Ser A 6.125% 11/15/2030 AA 1,000 1,097,560
-------------
HOUSING 2.35%
Skagit Cnty WA Hsg Auth Low
Income Hsg Assist Rev Mtg Ln(12) 7.00% 6/20/2035 AAA 750 792,232
WA St Hsg Fin Cmnty Sing Fam
Mtg Rev Mtg Ser A AMT(13) 7.05% 7/1/2022 AAA 385 394,198
-------------
TOTAL 1,186,430
-------------
MISCELLANEOUS 3.10%
Bellevue WA Convention Ctr
Auth Sp Oblig Rev(15) Zero Coupon 2/1/2024 AAA 1,400 470,204
Spokane WA Pub Fac Dist Hotel
Motel & Sales Use Tax(15) 5.75% 12/1/2028 AAA 1,000 1,094,990
-------------
TOTAL 1,565,194
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
69
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
WASHINGTON TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
POWER 17.20%
Chelan Cnty WA Pub Util Dist
#1 Cons Rev Ser A AMT(15) 6.40% 7/1/2017 AAA $ 1,000 $ 1,135,490
Clark Cnty WA Pub Util Dist #1 Rev(11) 5.125% 1/1/2020 AAA 400 419,568
Douglas Cnty WA Pub Util Dist
#1 Wells Hydro 8.75% 9/1/2018 AA 350 432,394
Douglas Cnty WA Pub Util Dist
#1 Wells Hydro 2 Tier Ser B(2) 8.75% 9/1/2006 AAA 2,085 2,338,890
Energy Northwest WA Wind Proj Rev(2) 5.00% 7/1/2023 AAA 1,000 1,022,680
Grant Cnty WA Pub Util
Dist #002 Elec Rev Ser H(11) 5.00% 1/1/2022 AAA 1,000 1,020,310
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN 5.125% 7/1/2029 A- 1,500 1,525,785
Seattle WA Mun Lt & Pwr Rev Ser A(15) 5.625% 9/1/2015 AAA 720 789,732
-------------
TOTAL 8,684,849
-------------
PRE-REFUNDED 25.13%
Douglas Cnty WA Pub Util Dist
#1 Wells Hydro 8.75% 9/1/2018 Aaa 150 189,729
Mount Vernon WA(2) 6.85% 12/1/2014 AAA 1,285 1,372,316
Municipal Secs Trust Ctfs Ser
7005 Cl B RIBs ETM+ 9.757% 10/1/2040 Aaa 1,000 1,181,280
Ocean Shores WA Wtr & Swr(11) 5.50% 12/1/2021 Aaa 1,000 1,164,730
Port Seattle WA Spl Fac Rev
Prerefunded AMT Ser C(15) 6.00% 9/1/2029 AAA 915 1,084,485
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser B 6.00% 7/1/2031 A 1,000 1,203,670
Puerto Rico Comwlth Pub Impt RIBs 10.54% 7/1/2029 A- 1,000 1,188,440
Renton WA Wtr & Swr Rev 6.55% 11/1/2013 A1 1,000 1,059,900
Tacoma WA Sewer Rev Ser B(10) 6.375% 12/1/2015 AAA 1,000 1,112,330
Vancouver WA Ltd Tax(2) 5.50% 12/1/2025 AAA 1,255 1,464,585
Washington St Higher Ed Fac
Auth Rev Whitworth College(5) 7.00% 10/1/2015 AAA 250 265,063
Washington St Ser A 5.75% 9/1/2019 AA+ 250 260,975
Washington St Ser B 5.75% 5/1/2016 AA+ 15 15,418
Washington St Ser B 5.75% 5/1/2016 AA+ 985 1,012,462
Whatcom Cnty WA 5.75% 12/1/2012 A1 115 115,884
-------------
TOTAL 12,691,267
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
70
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
WASHINGTON TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION 11.99%
Central Puget Sound WA Regl
Transit Auth Sales Tax & Motor(10) 5.25% 2/1/2021 AAA $ 1,750 $ 1,926,680
Port Kalama WA Rev Ser B AMT 5.625% 12/1/2015 A3 400 418,736
Port Seattle WA Spl Fac Rev
Unrefunded Balance AMT Ser C(15) 6.00% 9/1/2029 AAA 1,085 1,191,135
Puerto Rico Comwlth Hwy &
Transn Auth Rev PMD Ser B 6.00% 7/1/2026A 1,000 1,058,820
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites RIBs 9.853% 1/1/2010 NR 750 870,690
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser PMD RIBs(11)(6) 10.68% 7/1/2026 Aaa 500 589,650
-------------
TOTAL 6,055,711
-------------
WATER/SEWER 5.42%
King Cnty WA Swr Rev Ref-Ser A(10) 5.00% 1/1/2027 AAA 150 151,719
Pierce Cnty WA Swr Rev(2) 5.00% 8/1/2021 AAA 1,100 1,140,293
Seattle WA Wtr Sys Rev(10) 5.00% 11/1/2026 AAA 300 303,165
Vancouver WA Wtr & Swr Rev(10) 6.00% 6/1/2020 AAA 1,000 1,139,990
-------------
TOTAL 2,735,167
-------------
TOTAL MUNICIPAL BONDS (Cost $44,659,720) 48,124,392
=============
<Caption>
SHARES
(000)
----------
SHORT-TERM INVESTMENT 1.97%
MONEY MARKET MUTUAL FUND 1.97%
Dreyfus Municipal
Cash Management Plus (Cost $993,118) 993 993,118
-------------
TOTAL INVESTMENTS 97.27% (Cost $45,652,838) $ 49,117,510
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
71
<Page>
SCHEDULE OF INVESTMENTS
INSURED INTERMEDIATE TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 88.60%
EDUCATION 12.78%
Appalachian St Univ NC Rev
Ref-Util Sys(15) 5.00% 5/15/2010 AAA $ 100 $ 113,007
Maricopa Cnty AZ Sch Dist #69
Paradise VY Ref-Second Ser(10) 5.00% 7/1/2013 AAA 100 111,851
New York St Dorm Auth Rev
Insured-Fordham Univ(10) 5.00% 7/1/2011 AAA 100 112,037
Pickens Cnty SC Sch Dist Ref Ser B(10) 2.25% 3/1/2005 AAA 100 101,563
University CO Univ Revs
Enterprise Sys-Ser A(15) 5.00% 6/1/2011 AAA 100 111,924
-------------
TOTAL 550,382
-------------
GENERAL OBLIGATION 23.42%
Dayton OH City Sch Dist Sch
Facs Constr & Impt-Ser D(10) 5.00% 12/1/2010 AAA 100 113,211
Harnett Cnty NC Ctfs Partn
Ref-Harnett Cnty Projs(11) 5.00% 10/1/2008 AAA 100 113,580
Hawaii St Ref Ser DB(15) 5.25% 9/1/2013 AAA 100 113,827
Marlboro TWP NJ Brd Ed(11) 5.00% 7/15/2009 AAA 100 113,208
New Jersey St Var Purp
Ref-Ser J(15)(14) 5.00% 7/15/2009 AAA 100 113,093
Oseola WI Corp Purp(15) 3.45% 12/1/2007 AAA 100 106,213
Tennessee St Ser A(11) 5.00% 8/1/2009 AAA 100 113,169
Wayne Cnty MI Cmnty College
Cmnty College Impt(10) 5.25% 7/1/2010 Aaa 100 114,034
West Windsor Plainsboro NJ
Regl Sch Dist Ref(11) 4.00% 12/1/2007 AAA 100 108,571
-------------
TOTAL 1,008,906
-------------
HEALTHCARE 2.35%
Wayne Cnty PA Hosp & Hlth
Facs Wayne Mem Hosp Proj(15) 2.00% 7/1/2005 AAA 100 101,307
-------------
LEASE 2.68%
OH St Bldg Auth Ref-St
Facs-Adult Correction-A(11) 5.50% 10/1/2008 AAA 100 115,579
-------------
MISCELLANEOUS 21.04%
CT St Spl Tax Oblig Rev
Ref-Transn Infrastructure-B(11) 5.00% 10/1/2006 AAA 100 110,552
FL St Dept Environmental
Protn Preservation Rev FL Forever(15) 5.00% 7/1/2012 AAA 100 111,530
Lee Cnty FL Ref-Ser A(15) 5.75% 10/1/2011 AAA 100 117,707
Michigan St Environmental Ref(15)(14) 5.50% 12/1/2013 AAA 100 116,229
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
72
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
INSURED INTERMEDIATE TAX-FREE FUND SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
MO Dev Fin Brd Cultural Facs
Nelson Gallery(15) 5.25% 12/1/2013 AAA $ 100 $ 112,099
OR St Dept Administrative Svcs(11) 5.00% 9/1/2012 AAA 100 112,127
Phoenix AZ Str & Hwy User Rev
Ref-Jr Lien(10) 5.00% 7/1/2008 AAA 100 112,498
Regional Transn Dist CO Sales(11) 5.00% 11/1/2009 AAA 100 113,410
-------------
TOTAL 906,152
-------------
POWER 2.66%
Puerto Rico Elec Pwr Auth Ref
Ser JJ(15) 5.25% 7/1/2013 AAA 100 114,605
-------------
PRE-REFUNDED 8.06%
Chicago IL Met Wtr Reclamation
Dist Gtr Chicago Cap Impt ETM 5.50% 12/1/2010 Aaa 100 116,700
Detroit MI Wtr Supply Sys
Prerefunded Sr Lien Ser A(10) 5.25% 7/1/2033 AAA 100 114,920
Muhlenberg PA Sch Dist(10) 5.40% 9/1/2012 AAA 100 115,552
-------------
TOTAL 347,172
-------------
SPECIAL TAX 2.61%
Ernest N Morial New Orleans
LA Exhibit Hall Auth Spl Tax(2) 5.00% 7/15/2010 AAA 100 112,188
-------------
TRANSPORTATION 7.77%
New Haven CT Air Rights Pkg Ref(2) 5.375% 12/1/2012 AAA 100 115,260
North TX Thruway Auth Dallas
North Twy Sys Rev Ref Ser C(11) 3.00% 1/1/2006 AAA 100 103,702
Puerto Rico Comwlth Hwy & Ser E(11) 5.50% 7/1/2013 AAA 100 115,849
-------------
TOTAL 334,811
-------------
WATER/SEWER 5.23%
Columbus GA Wtr & Sew Rev Ref(11) 5.25% 5/1/2013 AAA 100 113,611
Shreveport La Wtr & Swr Rev
Ref-Ser A(10) 5.00% 12/1/2012 AAA 100 111,832
-------------
TOTAL 225,443
-------------
TOTAL MUNICIPAL BONDS (Cost $3,730,586) 3,816,545
=============
<Caption>
SHARES
(000)
----------
SHORT-TERM INVESTMENT 4.42%
MONEY MARKET MUTUAL FUND 4.42%
Dreyfus Municipal Cash
Management Plus (Cost $190,383) 190 190,383
-------------
TOTAL INVESTMENTS 93.02% (Cost $3,920,969) $ 4,006,928
==============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
73
<Page>
SCHEDULE OF INVESTMENTS
FLORIDA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 102.23%
EDUCATION 2.70%
Miami-Dade Cnty FL Ed Fac
Auth Rev Ser A(2) 6.00% 4/1/2023 AAA $ 2,000 $ 2,287,880
-------------
GENERAL OBLIGATION 13.49%
Boca Raton FL 5.25% 7/1/2016 AAA 1,615 1,769,636
Boca Raton FL 5.25% 7/1/2017 AAA 1,000 1,089,220
Florida St Brd Ed Cap Outlay
Pub Ed Ser E 5.625% 6/1/2025 AA+ 1,000 1,075,080
Florida St Brd Ed Cap Outlay Ser A 5.25% 6/1/2024 AA+ 2,000 2,079,080
Florida St Brd Ed Ref Cap
Outlay Ser A(15) 5.00% 6/1/2013 AAA 2,500 2,789,825
Hillsborough Cnty FL Sch Brd
Ctfs Partn(15) 5.00% 7/1/2029 AAA 1,000 1,014,570
Puerto Rico Comwlth Pub Impt 5.25% 7/1/2017 A- 1,475 1,624,019
------------
TOTAL 11,441,430
------------
HEALTHCARE 10.45%
Highlands Cnty FL Fac Auth
Rev Hosp Adventist Health Sys D(d) 5.875% 11/15/2029 A 2,000 2,095,420
Highlands Cnty FL Fac Auth
Rev Hosp Adventist/Sunbelt Ser A 6.00% 11/15/2031 A 2,000 2,113,820
Orange Cnty FL Hlth Fac Auth
Rev Hosp Orlando Regl 5.75% 12/1/2032 A2 1,000 1,027,130
Puerto Rico Ind Tourist Ed
Med Envr Ctrl Fac Hosp 6.50% 11/15/2020 AA 410 462,156
Sarasota Cnty FL Pub Hosp Brd
Rev Sarasota Mem Hosp Ser B(15) 5.50% 7/1/2028 AAA 2,875 3,164,398
-------------
TOTAL 8,862,924
-------------
HOUSING 1.87%
Lee Cnty FL Hsg Fin Auth Sing
Fam Mtg Rev AMT(13)(7) 6.40% 3/1/2029 Aaa 1,290 1,379,255
Orange Cnty FL Hsg Fin Auth
Ser A-1 AMT(13) Zero Coupon 3/1/2028 Aaa 785 208,268
-------------
TOTAL 1,587,523
-------------
INDUSTRIAL 1.56%
Lee Cnty FL Ind Dev Auth Ref
Bonita Springs Util Pj AMT(2) 5.125% 11/1/2019 AAA 1,250 1,321,450
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
74
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
FLORIDA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
LEASE 1.27%
Collier Cnty Fla Sch Brd(11) 5.375% 2/15/2021 Aaa $ 1,000 $ 1,076,270
-------------
MISCELLANEOUS 14.20%
Florida St Dept Environmental
Protn Preservation Rev FL Forever(15) 5.00% 7/1/2012 AAA 2,400 2,676,720
Florida Muni Ln Council Rev(15) Zero Coupon 4/1/2020 AAA 4,000 1,808,760
Jacksonville FL Excise Taxes
Ref Ser C AMT(15) 5.25% 10/1/2020 AAA 1,000 1,051,610
Jacksonville FL Sales Tax Rev
Ref & Impt Loc Govt(10) 5.375% 10/1/2018 AAA 1,000 1,102,220
Miami-Dade Cnty FL Spl Oblig
Sub Ser A(15) Zero Coupon 10/1/2024 AAA 3,000 948,930
Miami-Dade Cnty FL Spl Oblig
Sub Ser B(15) 5.00% 10/1/2037 AAA 1,000 1,007,710
Orange Cnty FL Tourist Dev Sub(2) 5.125% 10/1/2025 AAA 1,445 1,480,475
Osceola Cnty Tourist Dev Tax
Rev Ser A(10) 5.00% 10/1/2032 AAA 1,400 1,419,236
Tampa FL Sports Auth Rev
Tampa Bay Arena Pj(15) 6.00% 10/1/2015 AAA 450 545,625
-------------
TOTAL 12,041,286
-------------
POWER 1.21%
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN(15) 5.00% 7/1/2032 AAA 1,000 1,025,530
-------------
PRE-REFUNDED 31.44%
Miami-Dade Cnty FL Expwy Auth
Toll Sys Rev(10) 6.375% 7/1/2029 AAA 2,250 2,759,760
Municipal Secs Trust Ctfs Ser
7005 Cl B RIBs ETM+ 9.757% 10/1/2040 Aaa 1,250 1,476,600
Orange Cnty FL Tourist Dev
Tax Rev ETM(2) 6.00% 10/1/2016 AAA 710 723,582
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser B 6.00% 7/1/2031 A 1,000 1,203,670
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser B 6.50% 7/1/2027 A 1,000 1,234,200
Puerto Rico Comwlth Pub Impt RIBs(15) 10.18% 7/1/2026 Aaa 3,500 4,784,360
Puerto Rico Comwlth Pub Impt RIBs 10.54% 7/1/2029 A- 2,000 2,376,880
Puerto Rico Muni Fin Agy Ser A 6.50% 7/1/2019 AAA 2,915 3,076,958
Tampa Bay Wtr FL Util Sys Rev(10) 6.00% 10/1/2024 AAA 3,000 3,595,410
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
75
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
FLORIDA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Tampa FL Rev Allegany Hlth
Sys St. Joseph(15) 6.70% 12/1/2018 AAA $ 5,000 $ 5,430,000
-------------
TOTAL 26,661,420
-------------
RESOURCE RECOVERY 0.91%
Jacksonville FL Pollution Rev
Anheuser-Busch Pj 5.70% 8/1/2031 A+ 750 770,145
-------------
SPECIAL TAX 1.93%
Tampa FL Util Tax & Spl Rev
Ref-Ser A(2) 5.25% 10/1/2020 AAA 1,505 1,637,440
-------------
TRANSPORTATION 10.47%
Florida Ports Fin Commn Rev
St Transn TR FD Intermodal Pg AMT(10) 5.50% 10/1/2029 AAA 1,295 1,375,096
Jacksonville FL Port Auth
Arpt Rev Ser A AMT(10) 6.25% 10/1/2024 AAA 1,000 1,096,510
Miami-Dade Cnty FL Aviation
Ser A AMT(11) 5.125% 10/1/2035 AAA 1,900 1,914,288
Miami-Dade Cnty FL Expwy Auth
Toll Sys Rev Ref(10) 5.125% 7/1/2025 Aaa 750 771,502
Pensacola FL Arpt Rev Ser A AMT(15) 6.125% 10/1/2018 AAA 1,250 1,409,725
Puerto Rico Comwlth Hwy & Ser E(11) 5.50% 7/1/2013 AAA 650 758,271
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser C 6.00% 7/1/2029 A 880 965,193
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser PMD RIBs(11)(6) 10.68% 7/1/2026 Aaa 500 589,650
-------------
TOTAL 8,880,235
-------------
WATER/SEWER 10.73%
Jea FL Wtr & Swr Sys Rev Ser A(15) 5.375% 10/1/2030 AAA 1,000 1,031,590
Lee Cnty FL Wtr & Swr Rev Ref-Ser A(15) 5.00% 10/1/2019 Aaa 1,525 1,623,744
Melbourne FL Wtr & Swr Rev
Ref & Impt Ser A(10) 5.00% 10/1/2032 AAA 1,810 1,834,869
Miami Beach FL Stormwater Rev(10) 5.25% 9/1/2020 AAA 1,000 1,073,000
Miami Beach FL Wtr & Swr Rev(2) 5.25% 9/1/2020 AAA 1,000 1,074,240
Miami Beach FL Wtr & Swr Rev(2) 5.50% 9/1/2027 AAA 1,000 1,085,370
Ocala FL Wtr & Swr Rev(10) 5.25% 10/1/2027 Aaa 800 831,376
Sebring FL Wtr & Wastewtr Rev Ref(10) 5.25% 1/1/2020 AAA 500 539,845
-------------
TOTAL 9,094,034
-------------
TOTAL MUNICIPAL BONDS (Cost $79,256,910) $ 86,687,567
=============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
76
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
FLORIDA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING:
INTEREST MATURITY S&P OR SHARES
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT 2.83%
MONEY MARKET MUTUAL FUND 2.83%
Dreyfus FL Muni Cash Management (Cost $2,395,643) 2,396 $ 2,395,643
-------------
TOTAL INVESTMENTS 105.06% (Cost $81,652,553) $ 89,083,210
==============================================================================================================================
</Table>
SCHEDULE OF INVESTMENTS
GEORGIA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000)
------------
MUNICIPAL BONDS 97.82%
EDUCATION 19.50%
Athens - Clarke Cnty GA Uni
Govt UGA ref Ccrc Bldg LLC Pj(2) 5.00% 12/15/2032 AAA $ 1,800 1,838,484
Athens GA Hsg Auth Student
Hsg Univ of Georgia East Campus(2) 5.00% 12/1/2027 Aaa 3,000 3,075,180
Bulloch Cnty GA Dev Auth GA
So Univ Pj(2) 5.00% 8/1/2021 Aaa 500 523,210
Fulton Cnty GA Dev Auth Rev
GA Tech Athletic Assn(2) 5.50% 10/1/2017 AAA 1,000 1,130,180
Fulton Cnty GA Dev Auth Rev
GA Tech Fndtn Fdg Ser A 5.00% 11/1/2031 AA+ 1,400 1,419,446
Fulton Cnty GA Dev Auth Rev
GA Tech Fndtn Sac II Pj Ser A 5.125% 11/1/2021 AA+ 750 788,685
Fulton Cnty GA Dev Auth Rev
Morehouse College Pj(2) 5.875% 12/1/2030 AAA 1,850 2,076,736
Fulton Cnty GA Dev Auth Rev
Tuff Morehouse Pj Ser A(2) 5.50% 2/1/2022 AAA 1,000 1,090,500
Private Colleges & Univ Auth
GA Emory Univ Pj Ser A 5.50% 11/1/2020 AA 1,000 1,108,320
Private Colleges & Univ Auth
GA Emory Univ Pj Ser A 5.50% 11/1/2025 AA 1,000 1,089,740
Private Colleges & Univ Auth
Ga Rev Emory Univ PJ-Ser A 5.75% 11/1/2018 AA 500 573,545
Private Colleges & Univ Auth
GA Rev Mercer Univ Pj 5.75% 10/1/2031 Baa1 500 515,325
Private Colleges & Univ Auth
Spelman College 5.25% 6/1/2021 Aa3 1,340 1,433,130
-------------
TOTAL 16,662,481
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
77
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GEORGIA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
GENERAL OBLIGATION 9.80%
Forsyth Cnty GA Sch Dist 6.00% 2/1/2016 Aa2 $ 2,000 $ 2,346,060
Georgia St Ser C 7.25% 7/1/2005 AAA 1,500 1,656,705
Georgia St Ser C 7.25% 7/1/2006 AAA 1,000 1,155,760
Georgia ST Ser F 5.00% 11/1/2018 AAA 1,000 1,079,420
Puerto Rico Comwlth Pub Impt Ser A 5.00% 7/1/2027 A- 330 332,765
Puerto Rico Comwlth Pub Impt Ser A 5.375% 7/1/2028 A- 1,735 1,799,889
-------------
TOTAL 8,370,599
-------------
HEALTHCARE 5.44%
Athens - Clarke Cnty GA Uni
Govt Catholic Health East Issue 5.50% 11/15/2032 A 1,000 1,015,690
Clarke Cnty GA Hosp Auth Rev
Ctfs Athens Regl Med Ctr Pj(15) 5.125% 1/1/2032 AAA 500 511,605
Cobb Cnty GA Hosp Auth Rev
Ref & Impt-Rev Antic(2) 5.25% 4/1/2024 AAA 1,000 1,053,030
Glynn Brunswick GA Mem Hosp
Auth Rev Southeast GA Hlth(15) 6.00% 8/1/2016 AAA 400 447,896
Puerto Rico Ind Tourist Ed
Med Envr Ctrl Fac Hosp 6.50% 11/15/2020 AA 410 462,156
Tift Cnty GA Dev Auth Rev
First Abac LLC Proj-Ser A(2) 5.00% 9/1/2026 Aaa 595 610,887
Ware Cnty GA Hosp Auth Rev
Antic Ctfs(15) 5.50% 3/1/2021 Aaa 500 544,010
-------------
TOTAL 4,645,274
-------------
HOUSING 4.49%
Clayton Cnty GA Hsg Auth
Multi Fam Hsg Rev(12) 5.60% 12/20/2024 Aaa 500 527,725
DeKalb Cnty GA Hsg Auth Multi
Fam Lakes At Indian Creek AMT(11) 7.15% 1/1/2025 AAA 500 523,770
Georgia St Hsg & Fin Auth Rev Sing
Fam Mtg Ser A Sub A-2 AMT(8) 6.40% 12/1/2015 AAA 80 80,190
Georgia St Hsg & Fin Auth Rev Sing
Fam Sub Ser D-2 AMT 5.75% 12/1/2031 AAA 1,160 1,197,085
Georgia St Hsg & Fin Auth Rev
AMT-Subseries A-2 4.875% 12/1/2024 AAA 1,000 1,001,340
Savannah GA Economic Dev Auth
Mltfmly Hsg Rev AMT(12) 5.15% 11/20/2022 AAA 500 509,735
-------------
TOTAL 3,839,845
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
78
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GEORGIA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL 0.86%
Albany Dougherty GA Payroll
Dev Auth Procter & Gamble AMT 5.20% 5/15/2028 AA- $ 500 $ 527,185
Monroe Cnty GA Dev Auth Poll
GA Pwr Co Plant(2) 5.25% 7/1/2031 AAA 205 208,385
-------------
TOTAL 735,570
-------------
LEASE 4.12%
College Park GA Business
Civic Ctr Pj(2) 5.75% 9/1/2026 AAA 450 502,227
Georgia Mun Assn Inc Ctfs
City Court Atlanta Pj(2) 5.25% 12/1/2026 AAA 750 787,035
Puerto Rico Pub Fin Corp
Comwlth Approp Ser A(15) 5.50% 8/1/2020 AAA 1,500 1,662,615
Richmond Cnty GA Pub Fac Cnty
Brd Ed Pj(2) 6.00% 11/1/2024 Aaa 500 567,850
-------------
TOTAL 3,519,727
-------------
MISCELLANEOUS 8.47%
Association Cnty GA Leasing
Pj Rockdale Cnty GA Pub Purp Pj(2) 5.625% 7/1/2020 AAA 25 27,742
Cobb Marietta GA Coliseum &
Exhibit Hall Auth Rev(15) 5.625% 10/1/2026 AAA 1,000 1,133,750
Fayette Cnty GA Pub Fac Auth
Rev Criminal Justice Center Pj 5.00% 6/1/2026 AA 750 763,140
George L Smith II GA World
Congress Ctr Auth Rev AMT(15) 5.75% 7/1/2015 AAA 500 556,955
Puerto Rico Pub Bldg Auth Rev
Gtd Govt Fac Ser D 5.25% 7/1/2036 A- 1,250 1,274,475
Puerto Rico Pub Bldg Auth Rev
Gtd Govt Fac Ser D 5.375% 7/1/2033 A- 1,300 1,346,189
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.70% 8/1/2025 BBB+ 2,000 2,136,420
-------------
TOTAL 7,238,671
-------------
POWER 4.90%
Georgia Muni Elec Auth Pwr R
Ser FF(15)(14) 5.00% 1/1/2026 AAA 1,300 1,327,898
Municipal Elec Auth GA
Combustion Turbine Pj Ser A(15) 5.25% 11/1/2022 AAA 1,445 1,541,627
Puerto Rico Elec Pwr Auth Ref
Ser FF(15) 5.25% 7/1/2005 AAA 250 268,053
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
79
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GEORGIA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth Ser HH(11) 5.25% 7/1/2029 AAA $ 1,000 $ 1,046,520
-------------
TOTAL 4,184,098
-------------
PRE-REFUNDED 20.62%
Atlanta GA Arpt Fac Rev
Ref-Gen-Ser A(10) 5.50% 1/1/2026 AAA 3,645 4,235,709
Atlanta GA Arpt Fac Rev Ser A(10) 5.60% 1/1/2030 AAA 1,500 1,751,625
Atlanta GA ETM 5.60% 12/1/2015 AA- 95 97,458
Cobb Cnty GA Kennestone Hosp
Auth Rev Ctfs Ser 86 A ETM(15) Zero Coupon 8/1/2015 AAA 395 206,142
Fayette Cnty GA Pub Fac Auth
Criminal Justice Center Pj 6.00% 6/1/2030 AA 1,000 1,201,490
Forsyth Cnty GA Wtr & Sew Auth Rev 6.25% 4/1/2021 AA 750 908,940
Municipal Secs Trust Ctfs Ser
7005 Cl B RIBs ETM+ 9.757% 10/1/2040 Aaa 1,000 1,181,280
Puerto Rico Comwlth Hwy
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2026 A 2,000 2,255,820
Puerto Rico Comwlth Pub Impt(11)(6) 5.50% 7/1/2017 AAA 500 564,685
Puerto Rico Comwlth Pub Impt(15) 5.75% 7/1/2026 AAA 1,990 2,355,125
Puerto Rico Comwlth Pub Impt RIBs 10.54% 7/1/2029 A- 1,125 1,336,995
Puerto Rico Elec Pwr Auth
Ser T RIBs(11) 11.486% 7/1/2018 AAA 1,000 1,118,090
Savannah GA Econ Dev Auth Rev
Sub Ser C ETM Zero Coupon 12/1/2021 Aaa 1,000 408,560
-------------
TOTAL 17,621,919
-------------
RESOURCE RECOVERY 2.62%
Atlanta GA Wtr & Waste Wtr
Rev Ser A-Unrefunded Balance(10) 5.00% 11/1/2029 AAA 2,090 2,132,176
Cobb Cnty GA Solid Waste Mgmt
Auth Rev AMT 6.40% 1/1/2015 AAA 100 105,020
-------------
TOTAL 2,237,196
-------------
TRANSPORTATION 10.96%
Atlanta GA Arpt Fac Rev AMT(15) Zero Coupon 1/1/2010 AAA 1,500 1,085,580
Macon Bibb Cnty GA Indl Auth
Arpt Impt Rev Ref Atlantic AMT(2) 5.00% 4/1/2018 AAA 500 529,060
Metropolitan Atlanta GA Rapid
Ref Second Indenture Ser A(15) 6.25% 7/1/2005 AAA 500 544,635
Puerto Rico Comwlth Hwy & Ser D(11) 5.00% 7/1/2032 AAA 475 486,115
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites RIBs 9.853% 1/1/2010 NR 1,750 2,031,610
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
80
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GEORGIA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser B(15) 5.875% 7/1/2020 AAA $ 1,000 $ 1,148,780
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser C 6.00% 7/1/2029 A 250 274,203
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser D 5.75% 7/1/2041 A 1,985 2,144,713
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser PMD RIBs(11)(6) 10.68% 7/1/2026 Aaa 500 589,650
Puerto Rico Comwlth Hwy &
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2036 A 500 529,610
-------------
TOTAL 9,363,956
-------------
WATER/SEWER 6.04%
Augusta GA Wtr & Swr Rev(11) 5.25% 10/1/2022 AAA 500 535,120
Augusta GA Wtr & Swr Rev(11) 5.25% 10/1/2030 AAA 1,110 1,154,788
Carroll Cnty GA Wtr Auth Wtr &
Swr Rev(2) 5.25% 7/1/2021 Aaa 500 540,765
Elberton GA Combined Util Sys
Rev Ref & Impt(2) 5.50% 1/1/2019 Aaa 550 609,862
Glynn Cnty GA Wtr & Swr Rev
Ref & Impt(2) 5.00% 4/1/2023 Aaa 750 778,718
Henry Cnty GA Wtr & Sew Auth Rev(10) 5.625% 2/1/2030 AAA 1,050 1,122,870
Woodstock GA Wtr & Swr Rev
Ref & Impt(15) 5.00% 7/1/2022 AAA 400 417,216
-------------
TOTAL 5,159,339
-------------
TOTAL MUNICIPAL BONDS (Cost $79,694,919) $ 83,578,675
==============================================================================================================================
</Table>
SCHEDULE OF INVESTMENTS
MICHIGAN TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
MUNICIPAL BONDS 97.76%
EDUCATION 8.65%
Eastern MI Univ Rev Gen Ser B(10) 5.60% 6/1/2025 AAA 1,430 1,552,980
Forest Hills MI Pub Schs(10) 5.25% 5/1/2020 Aaa 2,000 2,151,660
Grand Valley MI St Univ Rev(10) 5.50% 2/1/2018 AAA 1,150 1,301,225
University MI Univ Rev
Student Fee Ser A 6.00% 4/1/2007 Aaa 250 285,680
Wayne Cnty MI Cmnty College Impt(2) 5.50% 7/1/2019 AAA 565 611,968
-------------
TOTAL 5,903,513
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
81
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MICHIGAN TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
GENERAL OBLIGATION 27.35%
Belding MI Area Sch(2) 5.00% 5/1/2026 AAA $ 400 $ 404,220
Bloomingdale MI Pub Sch Dist # 16 5.50% 5/1/2021 AAA 450 491,278
Caledonia MI Cmnty Schs Ref(11)(6) 5.25% 5/1/2022 AAA 1,025 1,090,815
Carman-Ainsworth Cmnty Sch(10) 5.00% 5/1/2027 AAA 1,000 1,013,890
Central Montcalm MI Pub Sch(15) 5.90% 5/1/2019 AAA 1,000 1,127,640
Constantine Mich Pub Schs(11)(6) 5.00% 5/1/2025 AAA 1,000 1,017,490
Crawford Ausable MI Sch Dist
Sch Bldg & Site 5.00% 5/1/2021 AAA 350 363,394
Detroit MI City Sch Dist Sch
Bldg & Site Impt Ser A(10) 5.25% 5/1/2028 AAA 1,000 1,040,420
Elkton Pigeon Bay Port MI Sch Dist 5.375% 5/1/2025 AAA 700 736,547
Huron MI Sch Dist(11) 5.25% 5/1/2021 AAA 250 265,378
Kaleva Norman Etc MI Sch Dist
Bldg & Site(10) 6.00% 5/1/2025 Aaa 600 711,090
Laingsburg MI Cmnty Sch Dist
Sch Bldg & Site Bd 5.25% 5/1/2026 AAA 450 469,395
Lake Orion MI Cmnty Sch Dist Ref 5.125% 5/1/2022 AAA 550 574,217
Memphis MI Cmnty Sch(10) 5.25% 5/1/2029 Aaa 150 153,705
Paw Paw MI Pub Sch Dist Sch
Bldg & Site 6.00% 5/1/2030 AAA 1,325 1,494,030
Saline MI Area Sch(10) 5.50% 5/1/2015 AAA 750 804,533
South Lyon MI Cmnty Sch(11) 5.50% 5/1/2023 AAA 1,425 1,524,551
South Lyon MI Cmnty Sch Sch
Bldg and Site(10) 5.25% 5/1/2022 AAA 1,000 1,061,480
Southfield MI Pub Schs Sch
Bldg & Site-Ser A(10) 5.25% 5/1/2021 AAA 1,025 1,113,324
Warren MI Cons Sch Dist Sch
Bldg & Site(10) 5.00% 5/1/2027 AAA 1,000 1,015,170
Wayne Charter Cnty MI Arpt
Hotel-Detroit Met Arpt-A(15) 5.50% 12/1/2018 AAA 1,500 1,661,700
Wayne Cnty MI Bldg Auth Cap
Impt Ser A(15) 5.25% 6/1/2016 AAA 500 544,395
-------------
TOTAL 18,678,662
-------------
HEALTHCARE 1.66%
Michigan St Hosp Fin Auth Rev
Ref Trinity Hlth Ser A(2)(17) 6.00% 12/1/2027 AAA 1,000 1,134,950
-------------
HOUSING 0.95%
Michigan St Hsg Dev Auth Ser D 5.95% 12/1/2016 AA+ 500 528,275
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
82
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MICHIGAN TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Michigan St Hsg Dev Auth Ser E AMT 6.20% 12/1/2027 AA+ $ 115 $ 119,506
-------------
TOTAL 647,781
-------------
LEASE 3.38%
Grand Rapids MI Pub Sch(15) 5.00% 11/1/2021 AAA 250 261,308
Michigan St Ctfs Partn(2) Zero Coupon 6/1/2022 AAA 2,000 807,460
Michigan St Hse
Representative Ctfs Partn(2) Zero Coupon 8/15/2024 AAA 3,565 1,241,404
-------------
TOTAL 2,310,172
-------------
MISCELLANEOUS 4.66%
MI St Bldg Auth Rev Ref-Facs
Prog-Ser I(11) 5.00% 10/15/2009 AAA 1,500 1,701,600
Michigan Muni Bd Auth Rev(2) 6.75% 11/1/2014 AAA 295 318,033
Michigan St Environmental Ref(15)(14) 5.50% 12/1/2013 AAA 1,000 1,162,290
-------------
TOTAL 3,181,923
-------------
POWER 4.56%
Lowell MI Elec Supply Sys Rev(15) 5.00% 8/1/2027 AAA 1,000 1,014,190
MI St Strategic Fd Ltd Oblig(2) 7.00% 5/1/2021 AAA 500 651,420
MI St Strategic Fd Ltd Oblig
Rev Detroit Fd Ser BB(15) 7.00% 7/15/2008 AAA 350 422,856
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN(15) 5.00% 7/1/2032 AAA 1,000 1,025,530
-------------
TOTAL 3,113,996
-------------
PRE-REFUNDED 27.98%
Alpena MI Pub Sch(15) 5.625% 5/1/2022 AAA 200 226,984
Alpena MI Pub Sch(15) 5.625% 5/1/2022 AAA 300 340,476
Anchor Bay MI Sch Dist Sch
Bldg & Site Ser I(10) 6.00% 5/1/2023 AAA 1,100 1,303,665
Eastern MI Univ Rev(10) 5.50% 6/1/2027 AAA 500 567,950
Greenville MI Pub Sch Ref(11) 6.00% 5/1/2025 AAA 1,000 1,185,150
Hartland MI Cons Sch Dist(10) 6.00% 5/1/2021 AAA 1,950 2,322,450
Howell MI Pub Sch(15) 6.00% 5/1/2025 AAA 1,100 1,262,668
Huron Valley MI Sch Dist(10) 5.75% 5/1/2022 AAA 250 284,810
Kalamazoo MI Hosp Fin Auth
Fac Rev Hosp Rev RIBs ETM(10) 9.408% 6/1/2011 AAA 2,000 2,156,040
Lake Orion MI Cmnty Sch Dist(2) 7.00% 5/1/2020 AAA 1,050 1,158,696
Lake Orion MI Cmnty Sch Dist Ser A(10) 6.00% 5/1/2017 AAA 1,335 1,589,985
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
83
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MICHIGAN TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Lakeview MI Cmnty Sch(10) 5.60% 5/1/2022 AAA $ 210 $ 238,153
Michigan Muni Bd Auth Rev Ser G(2) 6.75% 11/1/2014 AAA 1,205 1,303,605
Potterville MI Pub Sch(11) 6.00% 5/1/2029 AAA 1,000 1,185,150
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser B 6.50% 7/1/2027 A 1,000 1,234,200
Puerto Rico Comwlth Pub Impt RIBs 10.54% 7/1/2029 A- 925 1,099,307
Puerto Rico Comwlth Ser A ETM 5.50% 10/1/2040 AAA 1,000 1,090,640
Puerto Rico Elec Pwr Auth
Ser T RIBs(11) 11.486% 7/1/2018 AAA 500 559,045
-------------
TOTAL 19,108,974
-------------
TRANSPORTATION 6.04%
Kent Cnty MI Arpt Fac Rev Ref
Kent Cnty Intl Arpt 5.00% 1/1/2020 AAA 700 721,126
Michigan St Comprehensive Ser B(11) 5.25% 5/15/2020 AAA 1,000 1,080,460
Michigan St Comprehensive
Transn Ref Ser A(11) 5.00% 11/1/2021 AAA 700 728,749
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites RIBs 9.853% 1/1/2010 NR 500 580,460
Wayne Charter Cnty MI Arpt
Hotel-Detroit Met Arpt-A(15) 5.00% 12/1/2030 AAA 1,000 1,009,450
-------------
TOTAL 4,120,245
-------------
WATER/SEWER 12.53%
Detroit MI Disp Rev Ref Ser B(15) 5.25% 7/1/2021 AAA 805 844,010
Detroit MI Disp Rev Ref-Sr
Lien-Ser A(11) 5.00% 7/1/2028 AAA 1,000 1,013,790
Detroit MI Wtr Supply Sys SR
Lien-Ser A(15) 5.00% 7/1/2034 AAA 1,000 1,006,060
Grand Rapids MI San Swr Sys
Rev Ref & Impt Ser A(10) 4.75% 1/1/2028 AAA 1,050 1,039,479
Lansing MI Brd Wtr & Lt Wtr
Supply Steam & Elec Util Sys(11) 5.00% 7/1/2022 AAA 1,865 1,934,807
Michigan Muni Bd Auth Rev
Drinking Wtr St Revolving FD 5.00% 10/1/2024 AAA 1,000 1,022,530
Muskegon Heights MI Wtr Sys Ser A(15) 5.625% 11/1/2020 Aaa 300 331,533
Muskegon Heights MI Wtr Sys Ser A(15) 5.625% 11/1/2025 Aaa 320 350,736
Ypsilanti MI Wtr Supply & Sew
Disp Sys Rev Ser C(2) 5.00% 9/1/2027 AAA 1,000 1,014,320
-------------
TOTAL 8,557,265
-------------
TOTAL MUNICIPAL BONDS (Cost $61,724,411) $ 66,757,481
==============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
84
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
PENNSYLVANIA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 97.91%
EDUCATION 15.96%
Lehigh Cnty PA Gen Purp Auth
Rev Desales University Pj(16) 5.125% 12/15/2023 AA $ 1,000 $ 1,026,120
Lycoming Cnty PA Auth College
Rev College of Technology(2) 5.25% 5/1/2032 Aaa 700 724,395
Pennsylvania St Higher Ed Facs Auth Rev
Auth Rev Lafayette College Pj 6.00% 5/1/2030 AA- 1,425 1,606,787
Pennsylvania St Higher Ed Facs Auth Rev
Auth Rev Univ Sciences Phil(15) 5.25% 11/1/2025 AAA 1,000 1,029,550
Pennsylvania St Higher Ed Facs Auth Rev
Clarion Univ(18) 5.00% 7/1/2033 AAA 1,000 1,007,600
Pennsylvania St Higher Ed Facs Auth Rev
Drexel Univ-Ser A 5.20% 5/1/2032 A 600 609,084
Pennsylvania St Higher Ed Facs Auth Rev
Univ of Scranton(2) 5.75% 11/1/2017 AAA 1,000 1,143,590
Pennsylvania St Higher Ed Fac
Auth Drexel Univ 6.00% 5/1/2029 A 800 860,216
Pennsylvania St Higher Ed Fac
Auth Moravian College Pj 5.375% 7/1/2031 AA 1,000 1,027,630
Pennsylvania St Higher Ed Fac
Auth Univ of the Arts(16) 5.625% 3/15/2025 AA 1,000 1,045,840
Pennsylvania St Higher Ed Fac
Auth Univ of the Arts(16) 5.75% 3/15/2030 AA 500 534,350
Philadelphia PA Auth Ind Dev
Rev Ed Cmnty Foreign Med Grads(15) 5.00% 6/1/2015 AAA 250 267,988
State Pub Sch Bldg Auth PA
College Rev(2) Zero Coupon 7/15/2014 AAA 295 188,039
State Pub Sch Bldg Auth PA
College Rev(2) Zero Coupon 7/15/2015 AAA 295 178,280
State Pub Sch Bldg Auth PA
College Rev(2) Zero Coupon 7/15/2016 AAA 295 168,486
State Pub Sch Bldg Auth PA
Daniel Boone Sch Dist B(15) 5.00% 4/1/2028 AAA 500 507,550
State Pub Sch Bldg Auth PA
Northhampton Area Cmnty Coll(2) 5.75% 3/1/2020 AAA 1,775 2,000,816
State Pub Sch Bldg Auth PA
Rev Del Cnty Cmnty College Pj(15) 5.50% 10/1/2020 AAA 800 873,096
State Pub Sch Bldg Auth PA
Sch Rev Lease-Philadelphia Sch(11) 5.25% 6/1/2027 AAA 1,000 1,043,830
-------------
Total 15,843,247
-------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
85
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
PENNSYLVANIA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
GENERAL OBLIGATION 20.53%
Delaware Valley PA Regl Fin
Auth Loc Govt Rev Ser C(2) 7.75% 7/1/2027 AAA $ 1,000 $ 1,383,120
Mifflin Cnty PA(10) 5.625% 9/1/2031 AAA 2,500 2,661,400
Montgomery Cnty PA 5.00% 9/15/2022 Aaa 625 646,944
Pennsbury PA Sch Dist(10) 5.50% 1/15/2020 Aaa 1,000 1,099,230
Philadelphia PA Sch Dist Ser A(11) 5.50% 2/1/2031 AAA 500 529,390
Philadelphia PA Sch Dist Ser A(11) 5.75% 2/1/2019 AAA 450 506,866
Philadelphia PA Sch Dist Ser A(11) 5.75% 2/1/2020 AAA 250 279,047
Philadelphia PA Sch Dist Ser A(11) 5.75% 2/1/2021 AAA 500 556,415
Philadelphia PA Sch Dist Ser A(11) 5.75% 2/1/2030 AAA 1,250 1,371,038
Philadelphia PA Sch Dist Ser B(10) 5.625% 8/1/2021 AAA 1,000 1,097,180
Philadelphia PA Sch Dist Ser B(10) 5.625% 8/1/2022 AAA 1,000 1,091,810
Philadelphia, PA Tax & Rev
Antic Nts 2.00% 6/30/2004 MIG1 1,000 1,007,340
Plum Boro PA Sch Dist(10) 5.25% 9/15/2030 AAA 1,000 1,030,760
Puerto Rico Comwlth Pub Impt Ser A(10) 5.00% 7/1/2032 AAA 750 767,010
Puerto Rico Comwlth Pub Impt Ser A 5.375% 7/1/2028 A- 2,750 2,852,850
Radnor Twp PA Sch Dist 5.75% 3/15/2026 Aa3 1,200 1,292,268
Riverside PA Sch Dist(10) 5.50% 10/15/2020 AAA 1,000 1,091,800
Tredyffrin-Easttown PA Sch Dist 5.50% 2/15/2017 Aaa 1,000 1,116,570
-------------
TOTAL 20,381,038
-------------
HEALTHCARE 7.64%
Allegheny Cnty PA Hosp Dev
Catholic Health East Issue 5.50% 11/15/2032 A 1,750 1,763,615
Chester Cnty PA Hlth & Ed Fac
Auth Hlth Sys Rev RIBs(2) 10.20% 5/15/2020 AAA 2,600 2,791,724
Delaware Cnty PA Auth Hosp
Rev Crozer Chester Med Ctr(1)(4) 5.375% 12/1/2018 A 1,000 1,042,430
Puerto Rico Ind Tourist Ed
Med Mutuo Oblig Grp Ser A(15) 6.25% 7/1/2024 AAA 850 915,373
York Cnty PA Hosp Auth Rev
York Hosp(2) 5.25% 7/1/2017 AAA 1,000 1,071,830
-------------
TOTAL 7,584,972
-------------
HOUSING 1.09%
Pennsylvania Hsg Fin Agy Sing
Fam Mtg Ser 41-B AMT 6.65% 4/1/2025 AA+ 510 522,770
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
86
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
PENNSYLVANIA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Hsg Fin Agy Sing
Fam Mtg Ser 42 AMT 6.85% 4/1/2025 AA+ $ 540 $ 557,615
-------------
TOTAL 1,080,385
-------------
INDUSTRIAL 4.97%
Allegheny Cnty PA Ind Dev
Auth Rev Envr Impt USX Pj 6.10% 7/15/2020 BBB+ 1,000 1,027,090
Bradford Cnty PA Ind Dev Auth
Intl Paper Co Pj Ser A AMT 6.60% 3/1/2019 BBB 1,250 1,302,087
Philadelphia PA Auth For Ind
Dev Lease Rev Ser B(11) 5.125% 10/1/2026 AAA 1,000 1,021,310
York Cnty PA Ind Dev Auth
Poll Ctrl Rev Svc Elec & Gas Ser A(15) 6.45% 10/1/2019 AAA 1,475 1,579,238
-------------
TOTAL 4,929,725
-------------
LEASE 1.85%
West Middlesex Area Sch Dist
PA Cap Apprec Ser A(11) Zero Coupon 6/15/2032 AAA 935 204,887
York PA Gen Auth Gtd Rev York
City Recreation Corp(2) 5.50% 5/1/2018 AAA 1,475 1,635,642
-------------
TOTAL 1,840,529
-------------
MISCELLANEOUS 5.26%
Allegheny Cnty PA Redev Auth
Tax Inc Rev Wtrfrt Pj Ser A 6.30% 12/15/2018 A-(c) 1,000 1,112,270
Montgomery Cnty PA Ind Dev
Auth Rev Hill Sch Pj(15) 5.35% 8/15/2027 Aaa 2,250 2,314,643
Washington Cnty PA Auth Rev
Cap Fdg Rev Pj & Equip Prog(2) 6.15% 12/1/2029 AAA 1,525 1,799,225
-------------
TOTAL 5,226,138
-------------
PRE-REFUNDED 18.42%
Allegheny Cnty PA Port Auth
Sp Rev Transn(15) 6.00% 3/1/2013 AAA 2,000 2,377,480
Allegheny Cnty PA Port Auth
Sp Rev Transn(15) 6.125% 3/1/2029 AAA 500 597,520
Bethlehem PA Area Sch Dist(15) 6.00% 3/1/2016 AAA 1,000 1,111,700
Childrens Trust Fund PR 6.00% 7/1/2026 AAA 750 893,993
Pennsylvania Conv Ctr Auth
Rev Ser A ETM(10) 6.70% 9/1/2016 AAA 855 1,064,877
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
87
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
PENNSYLVANIA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Intergovt Coop
Auth Spl Tax Rev Funding Prog(10) 6.75% 6/15/2021 AAA $ 2,000 $ 2,193,320
Philadelphia PA Gas Wks Rev
Twelfth Ser B ETM(15) 7.00% 5/15/2020 AAA 2,220 2,840,113
Puerto Rico Comwlth 6.45% 7/1/2017 AAA 1,900 2,006,343
Puerto Rico Comwlth(15)(14) 6.45% 7/1/2017 AAA 700 739,179
Puerto Rico Comwlth Hwy
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2026 A 1,000 1,127,910
Puerto Rico Elec Pwr Auth Rev Ser X 6.00% 7/1/2015 Aaa 1,000 1,106,820
Puerto Rico Elec Pwr Auth Rev Ser X 6.125% 7/1/2021 Aaa 500 554,485
Puerto Rico Elec Pwr Auth
Ser T RIBs(11) 11.486% 7/1/2018 AAA 1,500 1,677,135
-------------
TOTAL 18,290,875
-------------
TRANSPORTATION 17.70%
Allegheny Cnty PA Arpt Rev(15) 5.00% 1/1/2017 AAA 1,000 1,039,630
Delaware River Port Auth PA &
NJ Ref Port Dist Pj Ser A(11) 5.20% 1/1/2027 AAA 1,000 1,035,160
Delaware River Port Auth PA &
NJ Rev(11) 6.00% 1/1/2019 AAA 1,000 1,144,510
Pennsylvania St Tpk Comm Oil
Franchise Tax Rev Sub-Ser B(15) 5.00% 12/1/2031 AAA 1,000 1,012,660
Pennsylvania St Tpk Commn(2) 5.50% 7/15/2033 AAA 3,000 3,240,780
Puerto Rico Comwlth Hwy & Ser G(10) 5.25% 7/1/2020 AAA 1,000 1,093,230
Puerto Rico Comwlth Hwy &
Transn Auth Rev PMD Ser B 6.00% 7/1/2026 A 500 529,410
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites RIBs 9.853% 1/1/2010 NR 2,750 3,192,530
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser D 5.75% 7/1/2041 A 2,000 2,160,920
Puerto Rico Comwlth Hwy
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2036 A 2,000 2,118,440
Puerto Rico Port Auth Rev Ser D AMT(10) 7.00% 7/1/2014 AAA 1,000 1,002,890
-------------
TOTAL 17,570,160
-------------
WATER/SEWER 4.49%
Allegheny Cnty PA San Auth Swr Rev(15) 5.375% 12/1/2024 AAA 2,000 2,109,640
Bucks Cnty PA Wtr & Swr Auth
Neshaminy Interceptor Swr Sys(2) 5.50% 6/1/2017 Aaa 465 513,118
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
88
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
PENNSYLVANIA TAX-FREE TRUST SEPTEMBER 30, 2003
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Bucks Cnty PA Wtr & Swr Auth
Rev Ser A(2) 5.00% 6/1/2024 AAA $ 1,000 $ 1,021,080
North Huntingdon Township PA(2) 5.25% 4/1/2019 AAA 760 810,350
-------------
TOTAL 4,454,188
-------------
TOTAL MUNICIPAL BONDS (Cost $91,066,532) $ 97,201,257
==============================================================================================================================
</Table>
(a) Unaudited.
(b) This investment has not been rated by an independent ratings service but is,
in Lord, Abbett & Co. LLC's opinion, of comparable quality to the rating
shown.
(c) This investment has been rated by Fitch IBCA.
(d) Security purchased on a when-issued basis.
** Deferred-interest municipals pay no interest for a stipulated number of
years, after which they pay a predetermined interest rate.
# Variable rate security. This interest rate represents the rate at September
30, 2003.
+ Restricted security under Rule 144A.
AMT-Income from the security may be subject to Alternative Minimum Tax.
ETM-Escrow to Maturity.
GTD-Guaranteed.
Pre-refunded Bonds-A second bond has been issued in order to pay off the first
bond issue. Proceeds from the sale of the second bond are held in an "escrow
fund" consisting of U.S. Government debt until the first bond issue reaches
maturity.
PSF-Permanent School Fund.
RIBs-Residual Interest Bond. The interest rate is subject to change
periodically and inversely to the prevailing market rate. The interest rate
represents the rate at September 30, 2003.
NR-Not Rated.
Insured or guaranteed by the indicated municipal bond insurance corporation or
Federal agency:
(1) American Capital Asset
(2) American Municipal Bond Assurance Corporation
(3) Bond Investors Guaranty
(4) Certificate Bond Insurance
(5) College Construction Loan Insurance Association
(6) Custodian Receipt
(7) Federal Home Loan Mortgage Corporation
(8) Federal Housing Administration
(9) Federal National Mortgage Association
(10) Financial Guaranty Insurance Company
(11) Financial Security Assurance, Inc.
(12) Government National Mortgage Association
(13) Government National Mortgage Association/Federal National Mortgage
Association
(14) Insurance Bond Certificate
(15) Municipal Bond Investors Assurance
(16) Radian Asset Assurance
(17) Temporary Custodian Receipts
(18) XL Capital Assurance, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
89
<Page>
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 2003
<Table>
<Caption>
NATIONAL CALIFORNIA
ASSETS:
Investment in securities, at cost $ 574,135,163 $ 183,795,260
- -----------------------------------------------------------------------------
Investment in securities, at value $ 606,082,471 $ 192,373,361
Cash 921,709 5,282
Receivables:
Interest and dividends 8,366,393 2,619,429
Investment securities sold 34,767,185 3,539,939
Capital shares sold 164,799 50,155
Prepaid expenses and other assets 41,694 19,953
- -----------------------------------------------------------------------------
TOTAL ASSETS 650,344,251 198,608,119
- -----------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 42,394,733 2,967,686
Capital shares reacquired 670,903 178,513
Management fees 245,351 78,623
12b-1 distribution fees 282,708 93,456
Fund administration 20,924 6,755
Directors' fees 293,927 172,814
To bank - -
Dividends payable 1,964,535 644,073
Accrued expenses and other liabilities 181,509 127,132
- -----------------------------------------------------------------------------
TOTAL LIABILITIES 46,054,590 4,269,052
=============================================================================
NET ASSETS $ 604,289,661 $ 194,339,067
- -----------------------------------------------------------------------------
COMPOSITION OF NET ASSETS:
Paid-in capital $ 589,993,940 $ 190,369,553
Distributions in excess of net investment income (1,835,360) (139,549)
Accumulated net realized loss on investments (15,816,227) (4,469,038)
Net unrealized appreciation on investments 31,947,308 8,578,101
- -----------------------------------------------------------------------------
NET ASSETS $ 604,289,661 $ 194,339,067
=============================================================================
NET ASSETS BY CLASS:
Class A Shares $ 515,694,305 $ 178,155,855
Class B Shares $ 39,121,677 -
Class C Shares $ 49,473,679 $ 16,183,212
OUTSTANDING SHARES BY CLASS:
Class A Shares 44,832,960 16,501,997
Class B Shares 3,393,938 -
Class C Shares 4,295,184 1,498,124
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE (NET ASSETS DIVIDED BY OUTSTANDING
SHARES):
Class A Shares-Net asset value $ 11.50 $ 10.80
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 3.25%) $ 11.89 $ 11.16
Class B Shares-Net asset value $ 11.53 -
Class C Shares-Net asset value $ 11.52 $ 10.80
=============================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
90
<Page>
<Table>
<Caption>
CONNECTICUT HAWAII MINNESOTA MISSOURI NEW JERSEY
ASSETS:
Investment in securities, at cost $ 91,126,230 $ 68,141,741 $ 32,576,883 $ 142,763,494 $ 143,721,432
- --------------------------------------------------------------------------------------------------------------------------
Investment in securities, at value $ 96,408,728 $ 73,293,352 $ 34,164,114 $ 150,656,131 $ 153,057,976
Cash 2,976 979,797 2,970,303 2,005,600 -
Receivables:
Interest and dividends 1,403,541 1,070,959 403,002 2,201,211 2,110,755
Investment securities sold - 81,420 12,000 215,756 40,977
Capital shares sold 554 22,570 65,970 31,101 134,365
Prepaid expenses and other assets 4,837 26,275 92 32,283 23,972
- --------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 97,820,636 75,474,373 37,615,481 155,142,082 155,368,045
- --------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 780,144 - 453,517 879,409 -
Capital shares reacquired 109,217 2,967 - 95,024 316,626
Management fees 39,375 31,468 14,533 62,145 62,969
12b-1 distribution fees 42,900 28,248 - 53,346 72,046
Fund administration 2,939 2,608 1,244 5,309 5,373
Directors' fees 25,699 18,849 1,567 29,359 43,375
To bank - - - - 477,296
Dividends payable 316,106 244,376 113,342 481,606 538,535
Accrued expenses and other liabilities 34,936 28,924 15,529 47,806 54,803
- --------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,351,316 357,440 599,732 1,654,004 1,571,023
==========================================================================================================================
NET ASSETS $ 96,469,320 $ 75,116,933 $ 37,015,749 $ 153,488,078 $ 153,797,022
- --------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS:
Paid-in capital $ 93,400,696 $ 73,884,177 $ 36,246,432 $ 146,691,481 $ 150,631,633
Distributions in excess of net investment income (164,899) (252,486) (114,910) (171,343) (439,953)
Accumulated net realized loss on investments (2,048,975) (3,666,369) (703,004) (924,697) (5,731,202)
Net unrealized appreciation on investments 5,282,498 5,151,611 1,587,231 7,892,637 9,336,544
- --------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 96,469,320 $ 75,116,933 $ 37,015,749 $ 153,488,078 $ 153,797,022
==========================================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 96,469,320 $ 75,116,933 $ 37,015,749 $ 153,488,078 $ 153,797,022
Class B Shares - - - - -
Class C Shares - - - - -
OUTSTANDING SHARES BY CLASS:
Class A Shares 9,145,143 14,775,064 7,198,342 28,654,507 29,555,813
Class B Shares - - - - -
Class C Shares - - - - -
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE (NET ASSETS DIVIDED BY OUTSTANDING
SHARES):
Class A Shares-Net asset value $ 10.55 $ 5.08 $ 5.14 $ 5.36 $ 5.20
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 3.25%) $ 10.90 $ 5.25 $ 5.31 $ 5.54 $ 5.37
Class B Shares-Net asset value - - - - -
Class C Shares-Net asset value - - - - -
==========================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
91
<Page>
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
September 30, 2003
<Table>
<Caption>
NEW YORK TEXAS
ASSETS:
Investment in securities, at cost $ 240,066,200 $ 70,378,331
- ---------------------------------------------------------------------------------
Investment in securities, at value $ 257,738,545 $ 78,241,022
Cash 9,235 4,567
Receivables:
Interest and dividends 3,742,047 1,293,024
Investment securities sold - -
Capital shares sold 124,565 64,899
From Lord, Abbett & Co. LLC - -
Prepaid expenses and other assets 12,327 19,369
- ---------------------------------------------------------------------------------
TOTAL ASSETS 261,626,719 79,622,881
- ---------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 506,505 -
Capital shares reacquired 229,718 7,200
Management fees 104,937 32,045
12b-1 distribution fees 122,873 67,022
Fund administration 8,963 2,831
Directors'/Trustees' fees 144,878 31,691
Dividends payable 896,670 267,164
Accrued expenses and other liabilities 80,078 29,444
- ---------------------------------------------------------------------------------
TOTAL LIABILITIES 2,094,622 437,397
=================================================================================
NET ASSETS $ 259,532,097 $ 79,185,484
=================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 246,729,575 $ 75,399,683
Undistributed (distributions in excess of)
net investment income (920,238) (189,178)
Accumulated net realized loss on investments (3,949,585) (3,887,712)
Net unrealized appreciation on investments 17,672,345 7,862,691
- ---------------------------------------------------------------------------------
NET ASSETS $ 259,532,097 $ 79,185,484
=================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 247,153,418 $ 79,185,484
Class B Shares - -
Class C Shares $ 12,378,679 -
Class P Shares - -
OUTSTANDING SHARES BY CLASS:
Class A Shares 21,643,637 7,644,705
Class B Shares - -
Class C Shares 1,084,265 -
Class P Shares - -
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE (NET ASSETS DIVIDED BY
OUTSTANDING SHARES):
Class A Shares-Net asset value $ 11.42 $ 10.36
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 3.25%) $ 11.80 $ 10.71
Class B Shares-Net asset value - -
Class C Shares-Net asset value $ 11.42 -
Class P Shares-Net asset value - -
=================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
92
<Page>
<Table>
<Caption>
INSURED
WASHINGTON INTERMEDIATE FLORIDA
ASSETS:
Investment in securities, at cost $ 45,652,838 $ 3,920,969 $ 81,652,553
- -------------------------------------------------------------------------------------------------
Investment in securities, at value $ 49,117,510 $ 4,006,928 $ 89,083,210
Cash 29,678 276,159 36,896
Receivables:
Interest and dividends 754,276 41,781 1,487,685
Investment securities sold 770,100 - 4,829,691
Capital shares sold 102,800 305,292 20,322
From Lord, Abbett & Co. LLC - 47,630 -
Prepaid expenses and other assets 159 350 515
- -------------------------------------------------------------------------------------------------
TOTAL ASSETS 50,774,523 4,678,140 95,458,319
- -------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased - 326,337 10,198,291
Capital shares reacquired 37,951 - 23,803
Management fees 21,279 1,286 34,680
12b-1 distribution fees - 1,322 44,487
Fund administration 1,726 114 2,931
Directors'/Trustees' fees 16,155 663 38,812
Dividends payable 178,752 6,905 280,478
Accrued expenses and other liabilities 22,095 33,748 42,946
- -------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 277,958 370,375 10,666,428
=================================================================================================
NET ASSETS $ 50,496,565 $ 4,307,765 $ 84,791,891
=================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 49,135,533 $ 4,294,816 $ 85,104,740
Undistributed (distributions in excess of)
net investment income 386,456 1,658 (167,738)
Accumulated net realized loss on investments (2,490,096) (74,668) (7,575,768)
Net unrealized appreciation on investments 3,464,672 85,959 7,430,657
- -------------------------------------------------------------------------------------------------
NET ASSETS $ 50,496,565 $ 4,307,765 $ 84,791,891
=================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 50,496,565 $ 3,672,488 $ 78,277,738
Class B Shares - $ 311,808 -
Class C Shares - $ 313,486 $ 6,514,153
Class P Shares - $ 9,983 -
OUTSTANDING SHARES BY CLASS:
Class A Shares 9,699,730 369,499 16,045,904
Class B Shares - 31,397 -
Class C Shares - 31,576 1,333,072
Class P Shares - 1,004 -
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE (NET ASSETS DIVIDED BY
OUTSTANDING SHARES):
Class A Shares-Net asset value $ 5.21 $ 9.94 $ 4.88
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 3.25%) $ 5.39 $ 10.27 $ 5.04
Class B Shares-Net asset value - $ 9.93 -
Class C Shares-Net asset value - $ 9.93 $ 4.89
Class P Shares-Net asset value - $ 9.94 -
=================================================================================================
<Caption>
GEORGIA MICHIGAN PENNSYLVANIA
ASSETS:
Investment in securities, at cost $ 79,694,919 $ 61,724,411 $ 91,066,532
- -------------------------------------------------------------------------------------------------
Investment in securities, at value $ 83,578,675 $ 66,757,481 $ 97,201,257
Cash 967,278 929,180 1,054,771
Receivables:
Interest and dividends 1,331,803 1,159,902 1,388,680
Investment securities sold 104,171 - 65,000
Capital shares sold 13,317 100,868 86,666
From Lord, Abbett & Co. LLC - - -
Prepaid expenses and other assets 236 - 2,667
- -------------------------------------------------------------------------------------------------
TOTAL ASSETS 85,995,480 68,947,431 99,799,041
- -------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased - - -
Capital shares reacquired 207,735 362,778 37,718
Management fees 34,419 27,779 40,202
12b-1 distribution fees - - 46,295
Fund administration 2,953 2,367 3,429
Directors'/Trustees' fees 1,734 9,579 20,360
Dividends payable 265,339 218,450 323,582
Accrued expenses and other liabilities 42,653 36,905 47,833
- -------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 554,833 657,858 519,419
=================================================================================================
NET ASSETS $ 85,440,647 $ 68,289,573 $ 99,279,622
=================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 81,667,279 $ 65,391,301 $ 94,552,129
Undistributed (distributions in excess of)
net investment income 41,241 (228,030) (343,942)
Accumulated net realized loss on investments (151,629) (1,906,768) (1,063,290)
Net unrealized appreciation on investments 3,883,756 5,033,070 6,134,725
- -------------------------------------------------------------------------------------------------
NET ASSETS $ 85,440,647 $ 68,289,573 $ 99,279,622
=================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 85,440,647 $ 68,289,573 $ 99,279,622
Class B Shares - - -
Class C Shares - - -
Class P Shares - - -
OUTSTANDING SHARES BY CLASS:
Class A Shares 15,181,731 12,746,023 18,837,413
Class B Shares - - -
Class C Shares - - -
Class P Shares - - -
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE (NET ASSETS DIVIDED BY
OUTSTANDING SHARES):
Class A Shares-Net asset value $ 5.63 $ 5.36 $ 5.27
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 3.25%) $ 5.82 $ 5.54 $ 5.45
Class B Shares-Net asset value - - -
Class C Shares-Net asset value - - -
Class P Shares-Net asset value - - -
=================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
93
<Page>
STATEMENTS OF OPERATIONS
For the Year Ended September 30, 2003
<Table>
<Caption>
NATIONAL CALIFORNIA
INVESTMENT INCOME:
Interest $ 32,121,068 $ 10,507,826
Dividends 132,304 26,448
- -----------------------------------------------------------------------------
Total investment income 32,253,372 10,534,274
- -----------------------------------------------------------------------------
EXPENSES:
Management fees 3,038,541 1,001,875
12b-1 distribution plan-Class A 1,797,559 662,145
12b-1 distribution plan-Class B 387,857 -
12b-1 distribution plan-Class C 469,697 155,630
Shareholder servicing 306,960 94,455
Market data 51,371 17,439
Professional 96,824 37,604
Reports to shareholders 56,404 19,126
Fund accounting 17,292 12,107
Fund administration 180,534 59,536
Custody 35,094 14,273
Directors' fees 19,710 6,460
Registration 60,297 9,228
Other - 2,031
- -----------------------------------------------------------------------------
Gross expenses 6,518,140 2,091,909
Expense reductions (10,749) (4,575)
- -----------------------------------------------------------------------------
NET EXPENSES 6,507,391 2,087,334
- -----------------------------------------------------------------------------
NET INVESTMENT INCOME 25,745,981 8,446,940
- -----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on investments (3,633,689) (1,186,273)
Net change in unrealized
appreciation/depreciation on investments (7,999,689) (5,697,202)
=============================================================================
NET REALIZED AND UNREALIZED LOSS (11,633,378) (6,883,475)
=============================================================================
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 14,112,603 $ 1,563,465
=============================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
94
<Page>
<Table>
<Caption>
CONNECTICUT HAWAII MINNESOTA MISSOURI NEW JERSEY
INVESTMENT INCOME:
Interest $ 5,273,061 $ 3,952,587 $ 1,474,500 $ 7,700,032 $ 8,733,600
Dividends 7,835 - - - 14,424
- --------------------------------------------------------------------------------------------------------------------------
Total investment income 5,280,896 3,952,587 1,474,500 7,700,032 8,748,024
- --------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 494,330 380,865 156,207 741,604 797,266
12b-1 distribution plan-Class A 351,430 268,236 - 529,899 572,390
12b-1 distribution plan-Class B - - - - -
12b-1 distribution plan-Class C - - - - -
Shareholder servicing 48,487 35,539 18,048 88,325 76,454
Market data 8,638 5,889 2,665 9,818 13,963
Professional 21,849 18,344 10,853 28,676 31,647
Reports to shareholders 9,362 7,116 2,572 13,282 15,345
Fund accounting 11,701 9,127 11,696 11,251 13,936
Fund administration 29,320 22,655 9,321 44,102 47,452
Custody 7,253 11,474 7,260 13,030 11,574
Directors' fees 3,059 2,215 774 4,022 5,000
Registration 5,336 2,653 4,592 8,550 4,535
Other 4,586 - - - -
- --------------------------------------------------------------------------------------------------------------------------
Gross expenses 995,351 764,113 223,988 1,492,559 1,589,562
Expense reductions (2,313) (10,400) (9,750) (18,931) (3,290)
- --------------------------------------------------------------------------------------------------------------------------
NET EXPENSES 993,038 753,713 214,238 1,473,628 1,586,272
- --------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 4,287,858 3,198,874 1,260,262 6,226,404 7,161,752
- --------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on investments (337,794) (1,515,044) (135,034) (64,372) (2,262,823)
Net change in unrealized
appreciation/depreciation on investments (1,137,773) (307,015) (12,332) (1,636,391) (2,907,312)
==========================================================================================================================
NET REALIZED AND UNREALIZED LOSS (1,475,567) (1,822,059) (147,366) (1,700,763) (5,170,135)
==========================================================================================================================
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 2,812,291 $ 1,376,815 $ 1,112,896 $ 4,525,641 $ 1,991,617
==========================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
95
<Page>
STATEMENTS OF OPERATIONS (CONTINUED)
For the Year Ended September 30, 2003
<Table>
<Caption>
NEW YORK TEXAS
INVESTMENT INCOME:
Interest $ 14,051,454 $ 4,336,281
Dividends 32,954 27,863
- ----------------------------------------------------------------------------------
Total investment income 14,084,408 4,364,144
- ----------------------------------------------------------------------------------
EXPENSES:
Management fees 1,281,043 399,392
12b-1 distribution plan-Class A 799,751 292,554
12b-1 distribution plan-Class B - -
12b-1 distribution plan-Class C 105,421 -
12b-1 distribution plan-Class P - -
Shareholder servicing 133,450 42,599
Market data 22,115 7,004
Professional 45,554 18,843
Reports to shareholders 24,321 7,511
Fund accounting 12,019 11,646
Fund administration 76,314 23,736
Custody 12,250 4,160
Directors'/Trustees' fees 7,785 2,415
Registration 9,197 5,650
Offering - -
Other - 3,061
- ----------------------------------------------------------------------------------
Gross expenses 2,529,220 818,571
Expense reductions (4,519) (2,063)
12b-1 distribution plan-Class A reimbursement - -
Expenses assumed by Lord, Abbett & Co. LLC - -
Management fee waived - -
- ----------------------------------------------------------------------------------
NET EXPENSES 2,524,701 816,508
- ----------------------------------------------------------------------------------
NET INVESTMENT INCOME 11,559,707 3,547,636
- ----------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on investments (106,572) (545,423)
Net change in unrealized
appreciation/depreciation on investments (4,912,170) (462,922)
==================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) (5,018,742) (1,008,345)
==================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 6,540,965 $ 2,539,291
==================================================================================
</Table>
*For the period June 23,2003 (commencement of investment operations) to
September 30,2003.
SEE NOTES TO FINANCIAL STATEMENTS.
96
<Page>
<Table>
<Caption>
INSURED
WASHINGTON INTERMEDIATE* FLORIDA
INVESTMENT INCOME:
Interest $ 2,645,982 $ 20,826 $ 4,672,675
Dividends 17,553 384 22,047
- --------------------------------------------------------------------------------------------------
Total investment income 2,663,535 21,210 4,694,722
- --------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 248,504 3,590 437,411
12b-1 distribution plan-Class A - 2,483 270,100
12b-1 distribution plan-Class B - 253 -
12b-1 distribution plan-Class C - 606 60,030
12b-1 distribution plan-Class P - 12 -
Shareholder servicing 32,823 482 53,323
Market data 4,378 298 7,887
Professional 14,034 34,550 35,593
Reports to shareholders 4,534 6,982 8,340
Fund accounting 8,608 - 11,661
Fund administration 14,781 319 25,971
Custody 2,756 1,153 6,321
Directors'/Trustees' fees 1,427 667 2,821
Registration 6,833 1,070 4,489
Offering - 17,280 -
Other - 2,981 27,259
- --------------------------------------------------------------------------------------------------
Gross expenses 338,678 72,726 951,206
Expense reductions (1,903) - (2,257)
12b-1 distribution plan-Class A reimbursement - (709) -
Expenses assumed by Lord, Abbett & Co. LLC - (65,782) -
Management fee waived - (3,590) -
- --------------------------------------------------------------------------------------------------
NET EXPENSES 336,775 2,645 948,949
- --------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,326,760 18,565 3,745,773
- --------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on investments (536,677) (74,668) (1,142,594)
Net change in unrealized
appreciation/depreciation on investments (528,302) 85,959 (558,447)
==================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) (1,064,979) 11,291 (1,701,041)
==================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 1,261,781 $ 29,856 $ 2,044,732
==================================================================================================
<Caption>
GEORGIA MICHIGAN PENNSYLVANIA
INVESTMENT INCOME:
Interest $ 3,868,767 $ 3,242,063 $ 5,302,381
Dividends - - -
- --------------------------------------------------------------------------------------------------
Total investment income 3,868,767 3,242,063 5,302,381
- --------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 391,842 324,518 499,671
12b-1 distribution plan-Class A - - 246,366
12b-1 distribution plan-Class B - - -
12b-1 distribution plan-Class C - - -
12b-1 distribution plan-Class P - - -
Shareholder servicing 47,423 47,907 65,456
Market data 6,282 5,367 8,734
Professional 30,057 26,274 39,824
Reports to shareholders 6,152 5,398 9,365
Fund accounting 12,311 9,740 10,662
Fund administration 23,316 19,274 29,707
Custody 10,155 10,891 8,079
Directors'/Trustees' fees 1,380 1,522 3,121
Registration 5,461 6,549 5,105
Offering - - -
Other 4,681 13,972 19,564
- --------------------------------------------------------------------------------------------------
Gross expenses 539,060 471,412 945,654
Expense reductions (9,601) (15,453) (8,523)
12b-1 distribution plan-Class A reimbursement - - -
Expenses assumed by Lord, Abbett & Co. LLC - - -
Management fee waived - - -
- --------------------------------------------------------------------------------------------------
NET EXPENSES 529,459 455,959 937,131
- --------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 3,339,308 2,786,104 4,365,250
- --------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on investments (151,629) (128,687) (299,948)
Net change in unrealized
appreciation/depreciation on investments (636,285) (587,723) (1,645,092)
==================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) (787,914) (716,410) (1,945,040)
==================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 2,551,394 $ 2,069,694 $ 2,420,210
==================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
97
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended September 30, 2003
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS NATIONAL CALIFORNIA
OPERATIONS:
Net investment income $ 25,745,981 $ 8,446,940
Net realized loss on investments (3,633,689) (1,186,273)
Net change in unrealized
appreciation/depreciation on investments (7,999,689) (5,697,202)
- -----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 14,112,603 1,563,465
=============================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (23,106,774) (8,268,393)
Class B (1,475,958) -
Class C (1,798,412) (602,949)
- -----------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (26,381,144) (8,871,342)
=============================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 87,871,238 21,862,214
Reinvestment of distributions 17,228,752 4,746,343
Cost of shares reacquired (100,082,141) (31,432,216)
- -----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE TRANSACTIONS 5,017,849 (4,823,659)
=============================================================================
NET INCREASE (DECREASE) IN NET ASSETS (7,250,692) (12,131,536)
=============================================================================
NET ASSETS:
Beginning of year 611,540,353 206,470,603
- -----------------------------------------------------------------------------
END OF YEAR $ 604,289,661 $ 194,339,067
=============================================================================
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME $ (1,835,360) $ (139,549)
=============================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
98
<Page>
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS CONNECTICUT HAWAII MINNESOTA MISSOURI NEW JERSEY
OPERATIONS:
Net investment income $ 4,287,858 $ 3,198,874 $ 1,260,262 $ 6,226,404 $ 7,161,752
Net realized loss on investments (337,794) (1,515,044) (135,034) (64,372) (2,262,823)
Net change in unrealized
appreciation/depreciation on investments (1,137,773) (307,015) (12,332) (1,636,391) (2,907,312)
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 2,812,291 1,376,815 1,112,896 4,525,641 1,991,617
==========================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (4,356,708) (3,177,488) (1,329,120) (6,009,033) (7,202,044)
Class B - - - - -
Class C - - - - -
- --------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (4,356,708) (3,177,488) (1,329,120) (6,009,033) (7,202,044)
==========================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 8,277,443 5,689,315 13,529,899 21,797,533 12,943,621
Reinvestment of distributions 2,133,051 1,718,249 1,074,347 4,742,370 4,120,036
Cost of shares reacquired (12,755,193) (10,478,031) (4,940,488) (16,574,053) (22,789,599)
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE TRANSACTIONS (2,344,699) (3,070,467) 9,663,758 9,965,850 (5,725,942)
==========================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS (3,889,116) (4,871,140) 9,447,534 8,482,458 (10,936,369)
==========================================================================================================================
NET ASSETS:
Beginning of year 100,358,436 79,988,073 27,568,215 145,005,620 164,733,391
- --------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 96,469,320 $ 75,116,933 $ 37,015,749 $ 153,488,078 $ 153,797,022
==========================================================================================================================
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME $ (164,899) $ (252,486) $ (114,910) $ (171,343) $ (439,953)
==========================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
99
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended September 30, 2003
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS NEW YORK TEXAS
OPERATIONS:
Net investment income $ 11,559,707 $ 3,547,636
Net realized loss on investments (106,572) (545,423)
Net change in unrealized
appreciation/depreciation on investments (4,912,170) (462,922)
- ----------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 6,540,965 2,539,291
==================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (11,283,897) (3,451,579)
Class B - -
Class C (421,949) -
Class P - -
Net realized gain
Class A - -
- ----------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (11,705,846) (3,451,579)
==================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 39,026,822 5,794,790
Reinvestment of distributions 6,958,868 2,443,223
Cost of shares reacquired (42,918,061) (9,508,780)
- ----------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE TRANSACTIONS 3,067,629 (1,270,767)
==================================================================================
NET INCREASE (DECREASE) IN NET ASSETS (2,097,252) (2,183,055)
==================================================================================
NET ASSETS:
Beginning of period 261,629,349 81,368,539
- ----------------------------------------------------------------------------------
END OF PERIOD $ 259,532,097 $ 79,185,484
==================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME $ (920,238) $ (189,178)
==================================================================================
</Table>
*For the period June 23,2003 (commencement of investment operations) to
September 30,2003.
SEE NOTES TO FINANCIAL STATEMENTS.
100
<Page>
<Table>
<Caption>
INSURED
INCREASE (DECREASE) IN NET ASSETS WASHINGTON INTERMEDIATE* FLORIDA
OPERATIONS:
Net investment income $ 2,326,760 $ 18,565 $ 3,745,773
Net realized loss on investments (536,677) (74,668) (1,142,594)
Net change in unrealized
appreciation/depreciation on investments (528,302) 85,959 (558,447)
- --------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 1,261,781 29,856 2,044,732
==================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (2,382,580) (17,525) (3,594,847)
Class B - (538) -
Class C - (1,178) (226,244)
Class P - (60) -
Net realized gain
Class A - - -
- --------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (2,382,580) (19,301) (3,821,091)
==================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 7,523,395 4,290,634 8,839,350
Reinvestment of distributions 1,662,262 11,784 1,593,473
Cost of shares reacquired (6,616,919) (5,208) (14,116,455)
- --------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE TRANSACTIONS 2,568,738 4,297,210 (3,683,632)
==================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS 1,447,939 4,307,765 (5,459,991)
==================================================================================================
NET ASSETS:
Beginning of period 49,048,626 - 90,251,882
- --------------------------------------------------------------------------------------------------
END OF PERIOD $ 50,496,565 $ 4,307,765 $ 84,791,891
==================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME $ 386,456 $ 1,658 $ (167,738)
==================================================================================================
<Caption>
INCREASE (DECREASE) IN NET ASSETS GEORGIA MICHIGAN PENNSYLVANIA
OPERATIONS:
Net investment income $ 3,339,308 $ 2,786,104 $ 4,365,250
Net realized loss on investments (151,629) (128,687) (299,948)
Net change in unrealized
appreciation/depreciation on investments (636,285) (587,723) (1,645,092)
- --------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 2,551,394 2,069,694 2,420,210
==================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (3,203,266) (2,853,218) (4,360,779)
Class B - - -
Class C - - -
Class P - - -
Net realized gain
Class A (214,585) - -
- --------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (3,417,851) (2,853,218) (4,360,779)
==================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 29,415,648 19,167,974 9,858,382
Reinvestment of distributions 2,740,742 1,886,197 2,139,148
Cost of shares reacquired (15,685,717) (10,612,775) (12,279,254)
- --------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE TRANSACTIONS 16,470,673 10,441,396 (281,724)
==================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS 15,604,216 9,657,872 (2,222,293)
==================================================================================================
NET ASSETS:
Beginning of period 69,836,431 58,631,701 101,501,915
- --------------------------------------------------------------------------------------------------
END OF PERIOD $ 85,440,647 $ 68,289,573 $ 99,279,622
==================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME $ 41,241 $ (228,030) $ (343,942)
==================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
101
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended September 30, 2002
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS NATIONAL CALIFORNIA
OPERATIONS:
Net investment income $ 27,146,448 $ 9,507,076
Net realized gain on investments 3,472,516 245,780
Net change in unrealized
appreciation/depreciation on investments 17,539,926 4,841,134
- -----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 48,158,890 14,593,990
=============================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM NET
INVESTMENT INCOME:
Class A (24,360,519) (8,729,491)
Class B (1,306,098) -
Class C (1,629,500) (501,001)
- -----------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (27,296,117) (9,230,492)
=============================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 112,022,029 25,394,908
Reinvestment of distributions 17,554,600 5,008,377
Cost of shares reacquired (117,659,510) (33,511,579)
- -----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 11,917,119 (3,108,294)
=============================================================================
NET INCREASE (DECREASE) IN NET ASSETS 32,779,892 2,255,204
=============================================================================
NET ASSETS:
Beginning of year 578,760,461 204,215,399
- -----------------------------------------------------------------------------
END OF YEAR $ 611,540,353 $ 206,470,603
=============================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME $ (1,909,201) $ 284,853
=============================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
102
<Page>
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS CONNECTICUT HAWAII MINNESOTA MISSOURI NEW JERSEY
OPERATIONS:
Net investment income $ 4,751,298 $ 3,411,857 $ 1,220,309 $ 5,963,454 $ 7,597,934
Net realized gain on investments 749,305 382,498 30,099 1,018,147 977,977
Net change in unrealized
appreciation/depreciation on investments 2,855,223 2,514,391 883,643 3,322,968 3,901,863
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 8,355,826 6,308,746 2,134,051 10,304,569 12,477,774
==========================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM NET
INVESTMENT INCOME:
Class A (4,666,381) (3,493,168) (1,196,122) (5,909,705) (7,410,189)
Class B - - - - -
Class C - - - - -
- --------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (4,666,381) (3,493,168) (1,196,122) (5,909,705) (7,410,189)
==========================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 8,823,698 12,019,332 4,846,903 17,602,461 16,690,884
Reinvestment of distributions 2,147,736 1,827,196 956,958 4,539,731 4,254,272
Cost of shares reacquired (15,544,316) (7,695,736) (3,881,976) (11,653,711) (21,450,389)
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (4,572,882) 6,150,792 1,921,885 10,488,481 (505,233)
==========================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS (883,437) 8,966,370 2,859,814 14,883,345 4,562,352
==========================================================================================================================
NET ASSETS:
Beginning of year 101,241,873 71,021,703 24,708,401 130,122,275 160,171,039
- --------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 100,358,436 $ 79,988,073 $ 27,568,215 $ 145,005,620 $ 164,733,391
==========================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME $ (96,049) $ (242,424) $ (40,680) $ (388,714) $ (401,641)
==========================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
103
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended September 30, 2002
<Table>
<Caption>
INCREASE IN NET ASSETS NEW YORK TEXAS
OPERATIONS:
Net investment income $ 11,836,535 $ 3,481,721
Net realized gain on investments 2,480,435 362,090
Net change in unrealized
appreciation/depreciation on investments 8,324,389 3,392,827
- -----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 22,641,359 7,236,638
=============================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM NET
INVESTMENT INCOME:
Class A (11,318,011) (3,456,519)
Class C (306,953) -
- -----------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (11,624,964) (3,456,519)
=============================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 34,088,342 6,622,967
Reinvestment of distributions 6,992,893 2,413,147
Cost of shares reacquired (39,497,523) (9,308,122)
- -----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 1,583,712 (272,008)
- -----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS 12,600,107 3,508,111
=============================================================================
NET ASSETS:
Beginning of year 249,029,242 77,860,428
- -----------------------------------------------------------------------------
END OF YEAR $ 261,629,349 $ 81,368,539
=============================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME $ (823,882) $ (285,235)
=============================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
104
<Page>
<Table>
<Caption>
INCREASE IN NET ASSETS WASHINGTON FLORIDA GEORGIA MICHIGAN PENNSYLVANIA
OPERATIONS:
Net investment income $ 2,377,355 $ 4,125,652 $ 2,321,307 $ 2,475,098 $ 4,416,932
Net realized gain on investments 175,857 353,938 461,293 357,663 386,036
Net change in unrealized
appreciation/depreciation on investments 1,398,877 2,398,830 2,505,000 2,088,011 3,159,831
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 3,952,089 6,878,420 5,287,600 4,920,772 7,962,799
==========================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM NET
INVESTMENT INCOME:
Class A (2,369,030) (3,898,923) (2,298,082) (2,503,130) (4,405,152)
Class C - (223,468) - - -
- --------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (2,369,030) (4,122,391) (2,298,082) (2,503,130) (4,405,152)
==========================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 4,893,708 6,485,650 28,219,929 10,510,102 9,381,743
Reinvestment of distributions 1,554,802 1,552,170 1,872,091 1,630,447 2,088,771
Cost of shares reacquired (4,866,363) (9,570,166) (9,480,146) (5,256,754) (8,076,736)
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 1,582,147 (1,532,346) 20,611,874 6,883,795 3,393,778
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS 3,165,206 1,223,683 23,601,392 9,301,437 6,951,425
==========================================================================================================================
NET ASSETS:
Beginning of year 45,883,420 89,028,199 46,235,039 49,330,264 94,550,490
- --------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 49,048,626 $ 90,251,882 $ 69,836,431 $ 58,631,701 $ 101,501,915
==========================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME $ 486,493 $ (49,177) $ (98,258) $ (171,755) $ (289,776)
==========================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
105
<Page>
FINANCIAL HIGHLIGHTS
NATIONAL TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.73 $ 11.33 $ 10.76 $ 10.79 $ 11.98
========== ========== ========== ========== ==========
Investment operations
Net investment income .50(a) .54(a) .53(a) .51(a) .59
Net realized and unrealized gain (loss) (.22) .40 .59 .01 (1.03)
---------- ---------- ---------- ---------- ----------
Total from investment operations .28 .94 1.12 .52 (.44)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.51) (.54) (.55) (.55) (.56)
Net realized gain - - - - (.19)
---------- ---------- ---------- ---------- ----------
Total distributions (.51) (.54) (.55) (.55) (.75)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 11.50 $ 11.73 $ 11.33 $ 10.76 $ 10.79
========== ========== ========== ========== ==========
Total Return(b) 2.48% 8.57% 10.64% 5.02% (3.85)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions .98% 1.03% 1.01% .98% .95%
Expenses, excluding expense
reductions .98% 1.04% 1.06% .99% .95%
Net investment income 4.33% 4.74% 4.78% 4.85% 5.10%
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 515,694 $ 530,563 $ 512,426 $ 487,188 $ 542,601
Portfolio turnover rate 209.07% 63.74% 77.46% 185.25% 254.13%
==============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
106
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
NATIONAL TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.76 $ 11.36 $ 10.79 $ 10.82 $ 11.98
========== ========== ========== ========== ==========
Investment operations
Net investment income .42(a) .47(a) .46(a) .44(a) .51
Net realized and unrealized gain (loss) (.21) .40 .60 .01 (.99)
---------- ---------- ---------- ---------- ----------
Total from investment operations .21 .87 1.06 .45 (.48)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.44) (.47) (.49) (.48) (.49)
Net realized gain - - - - (.19)
---------- ---------- ---------- ---------- ----------
Total distributions (.44) (.47) (.49) (.48) (.68)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 11.53 $ 11.76 $ 11.36 $ 10.79 $ 10.82
========== ========== ========== ========== ==========
Total Return(b) 1.86% 7.88% 9.96% 4.32% (4.30)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 1.63% 1.65% 1.64% 1.63% 1.54%
Expenses, excluding expense
reductions 1.63% 1.66% 1.69% 1.63% 1.54%
Net investment income 3.68% 4.12% 4.15% 4.15% 4.41%
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 39,122 $ 36,250 $ 28,531 $ 17,594 $ 16,053
Portfolio turnover rate 209.07% 63.74% 77.46% 185.25% 254.13%
==============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
107
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
NATIONAL TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.76 $ 11.35 $ 10.77 $ 10.81 $ 11.99
========== ========== ========== ========== ==========
Investment operations
Net investment income .42(a) .47(a) .46(a) .45(a) .50
Net realized and unrealized gain (loss) (.22) .41 .60 (.01) (1.01)
---------- ---------- ---------- ---------- ----------
Total from investment operations .20 .88 1.06 .44 (.51)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.44) (.47) (.48) (.48) (.48)
Net realized gain - - - - (.19)
---------- ---------- ---------- ---------- ----------
Total distributions (.44) (.47) (.48) (.48) (.67)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 11.52 $ 11.76 $ 11.35 $ 10.77 $ 10.81
========== ========== ========== ========== ==========
Total Return(b) 1.80% 7.95% 10.04% 4.23% (4.45)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 1.63% 1.61% 1.68% 1.63% 1.63%
Expenses, excluding expense
reductions 1.63% 1.62% 1.73% 1.64% 1.63%
Net investment income 3.68% 4.16% 4.11% 4.19% 4.38%
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 49,474 $ 44,727 $ 37,803 $ 34,999 $ 38,409
Portfolio turnover rate 209.07% 63.74% 77.46% 185.25% 254.13%
==============================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
SEE NOTES TO FINANCIAL STATEMENTS.
108
<Page>
FINANCIAL HIGHLIGHTS
CALIFORNIA TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.19 $ 10.89 $ 10.29 $ 10.16 $ 11.12
========== ========== ========== ========== ==========
Investment operations
Net investment income .46(a) .52(a) .51(a) .53(a) .54
Net realized and unrealized gain (loss) (.36) .29 .61 .12 (.98)
---------- ---------- ---------- ---------- ----------
Total from investment operations .10 .81 1.12 .65 (.44)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from
net investment income (.49) (.51) (.52) (.52) (.52)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 10.80 $ 11.19 $ 10.89 $ 10.29 $ 10.16
========== ========== ========== ========== ==========
Total Return(b) .94% 7.65% 11.09% 6.62% (4.09)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions .99% 1.03% 1.00% .94% .93%
Expenses, excluding expense
reductions .99% 1.04% 1.04% .94% .93%
Net investment income 4.27% 4.82% 4.81% 5.30% 4.96%
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 178,156 $ 192,181 $ 192,624 $ 186,041 $ 207,113
Portfolio turnover rate 86.47% 45.31% 72.84% 100.22% 185.43%
==============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
109
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
CALIFORNIA TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.20 $ 10.91 $ 10.30 $ 10.16 $ 11.12
========== ========== ========== ========== ==========
Investment operations
Net investment income .39(a) .46(a) .45(a) .47(a) .46
Net realized and unrealized gain (loss) (.37) .27 .61 .12 (.98)
---------- ---------- ---------- ---------- ----------
Total from investment operations .02 .73 1.06 .59 (.52)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from
net investment income (.42) (.44) (.45) (.45) (.44)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 10.80 $ 11.20 $ 10.91 $ 10.30 $ 10.16
========== ========== ========== ========== ==========
Total Return(b) .26% 6.94% 10.53% 6.02% (4.77)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 1.63% 1.61% 1.55% 1.55% 1.60%
Expenses, excluding expense
reductions 1.63% 1.62% 1.59% 1.55% 1.60%
Net investment income 3.63% 4.22% 4.26% 4.70% 4.28%
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 16,183 $ 14,290 $ 11,591 $ 10,646 $ 12,767
Portfolio turnover rate 86.47% 45.31% 72.84% 100.22% 185.43%
==============================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
SEE NOTES TO FINANCIAL STATEMENTS.
110
<Page>
FINANCIAL HIGHLIGHTS
CONNECTICUT TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 10.71 $ 10.32 $ 9.79 $ 9.89 $ 10.73
========== ========== ========== ========== ==========
Investment operations
Net investment income .46(a) .50(a) .49(a) .49(a) .54
Net realized and unrealized gain (loss) (.16) .38 .53 (.08) (.86)
---------- ---------- ---------- ---------- ----------
Total from investment operations .30 .88 1.02 .41 (.32)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from
net investment income (.46) (.49) (.49) (.51) (.52)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 10.55 $ 10.71 $ 10.32 $ 9.79 $ 9.89
========== ========== ========== ========== ==========
Total Return(b) 2.95% 8.79% 10.65% 4.32% (3.04)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 1.01% 1.03% 1.01% 1.02% .95%
Expenses, excluding expense
reductions 1.01% 1.04% 1.03% 1.02% .95%
Net investment income 4.33% 4.82% 4.85% 5.10% 5.12%
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 96,469 $ 100,358 $ 101,242 $ 96,901 $ 111,758
Portfolio turnover rate 41.50% 48.64% 21.52% 37.92% 53.76%
==============================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
SEE NOTES TO FINANCIAL STATEMENTS.
111
<Page>
FINANCIAL HIGHLIGHTS
HAWAII TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.20 $ 5.01 $ 4.83 $ 4.84 $ 5.25
========== ========== ========== ========== ==========
Investment operations
Net investment income .21(a) .23(a) .22(a) .24(a) .26
Net realized and unrealized gain (loss) (.12) .20 .20 (.01) (.43)
---------- ---------- ---------- ---------- ----------
Total from investment operations .09 .43 .42 .23 (.17)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders
from net investment income (.21) (.24) (.24) (.24) (.24)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 5.08 $ 5.20 $ 5.01 $ 4.83 $ 4.84
========== ========== ========== ========== ==========
Total Return(b) 1.86% 8.78% 8.88% 4.94% (3.31)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions .99% 1.05% 1.04% .99% .97%
Expenses, excluding expense
reductions 1.00% 1.06% 1.07% .99% .97%
Net investment income 4.20% 4.60% 4.49% 5.03% 5.03%
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 75,117 $ 79,988 $ 71,022 $ 70,190 $ 71,619
Portfolio turnover rate 27.90% 30.99% 32.38% 30.06% 27.63%
==============================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
SEE NOTES TO FINANCIAL STATEMENTS.
112
<Page>
FINANCIAL HIGHLIGHTS
MINNESOTA TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.18 $ 5.00 $ 4.76 $ 4.78 $ 5.18
========== ========== ========== ========== ==========
Investment operations
Net investment income .21(a) .24(a) .25(a) .23(a) .27
Net realized and unrealized gain (loss) (.03) .18 .24 .01 (.41)
---------- ---------- ---------- ---------- ----------
Total from investment operations .18 .42 .49 .24 (.14)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders
from net investment income (.22) (.24) (.25) (.26) (.26)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 5.14 $ 5.18 $ 5.00 $ 4.76 $ 4.78
========== ========== ========== ========== ==========
Total Return(b) 3.57% 8.56% 10.57% 5.32% (2.72)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including waivers
and expense reductions .69% .46% .19% .24% .23%
Expenses, excluding waivers
and expense reductions .72% .75% .82% .74% .73%
Net investment income 4.03% 4.79% 5.16% 5.00% 5.43%
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 37,016 $ 27,568 $ 24,708 $ 20,864 $ 19,843
Portfolio turnover rate 35.15% 22.33% 24.34% 50.37% 22.87%
==============================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
SEE NOTES TO FINANCIAL STATEMENTS.
113
<Page>
FINANCIAL HIGHLIGHTS
MISSOURI TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.41 $ 5.25 $ 4.96 $ 4.99 $ 5.36
========== ========== ========== ========== ==========
Investment operations
Net investment income .22(a) .23(a) .25(a) .24(a) .25
Net realized and unrealized gain (loss) (.05) .16 .29 (.02) (.37)
---------- ---------- ---------- ---------- ----------
Total from investment operations .17 .39 .54 .22 (.12)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders
from net investment income (.22) (.23) (.25) (.25) (.25)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 5.36 $ 5.41 $ 5.25 $ 4.96 $ 4.99
========== ========== ========== ========== ==========
Total Return(b) 3.18% 7.67% 11.11% 4.63% (2.25)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including waivers
and expense reductions 1.00% 1.03% .89% 1.02% .99%
Expenses, excluding waivers
and expense reductions 1.01% 1.06% 1.08% 1.02% .99%
Net investment income 4.19% 4.44% 4.80% 4.98% 4.84%
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 153,488 $ 145,006 $ 130,122 $ 120,058 $ 125,775
Portfolio turnover rate 48.47% 80.04% 43.75% 43.30% 78.85%
==============================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
SEE NOTES TO FINANCIAL STATEMENTS.
114
<Page>
FINANCIAL HIGHLIGHTS
NEW JERSEY TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.37 $ 5.21 $ 4.96 $ 4.97 $ 5.54
========== ========== ========== ========== ==========
Investment operations
Net investment income .24(a) .25(a) .25(a) .25(a) .27
Net realized and unrealized gain (loss) (.17) .15 .26 -(c) (.47)
---------- ---------- ---------- ---------- ----------
Total from investment operations .07 .40 .51 .25 (.20)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.24) (.24) (.26) (.26) (.26)
Net realized gain - - - - (.11)
---------- ---------- ---------- ---------- ----------
Total distributions (.24) (.24) (.26) (.26) (.37)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 5.20 $ 5.37 $ 5.21 $ 4.96 $ 4.97
========== ========== ========== ========== ==========
Total Return(b) 1.31% 7.96% 10.41% 5.31% (3.73)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including waivers
and expense reductions 1.00% 1.03% .90% .97% .93%
Expenses, excluding waivers
and expense reductions 1.00% 1.05% 1.06% .98% .93%
Net investment income 4.49% 4.77% 4.93% 5.03% 5.11%
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 153,797 $ 164,733 $ 160,171 $ 151,048 $ 163,237
Portfolio turnover rate 70.02% 97.76% 101.02% 125.73% 185.16%
==============================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Amount is less than $0.01.
SEE NOTES TO FINANCIAL STATEMENTS.
115
<Page>
FINANCIAL HIGHLIGHTS
NEW YORK TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.66 $ 11.16 $ 10.53 $ 10.51 $ 11.43
========== ========== ========== ========== ==========
Investment operations
Net investment income .52(a) .54(a) .53(a) .55(a) .58
Net realized and unrealized gain (loss) (.24) .49 .64 .02 (.94)
---------- ---------- ---------- ---------- ----------
Total from investment operations .28 1.03 1.17 .57 (.36)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders
from net investment income (.52) (.53) (.54) (.55) (.56)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 11.42 $ 11.66 $ 11.16 $ 10.53 $ 10.51
========== ========== ========== ========== ==========
Total Return(b) 2.55% 9.50% 11.35% 5.65% (3.23)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions .96% 1.03% 1.01% .96% .93%
Expenses, excluding expense
reductions .96% 1.04% 1.04% .97% .93%
Net investment income 4.54% 4.80% 4.80% 5.28% 5.21%
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 247,153 $ 252,831 $ 242,367 $ 228,362 $ 248,456
Portfolio turnover rate 47.94% 51.72% 70.03% 76.33% 52.67%
==============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
116
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
NEW YORK TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.67 $ 11.17 $ 10.54 $ 10.51 $ 11.42
========== ========== ========== ========== ==========
Investment operations
Net investment income .44(a) .48(a) .46(a) .49(a) .50
Net realized and unrealized gain (loss) (.23) .49 .65 .02 (.93)
---------- ---------- ---------- ---------- ----------
Total from investment operations .21 .97 1.11 .51 (.43)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders
from net investment income (.46) (.47) (.48) (.48) (.48)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 11.42 $ 11.67 $ 11.17 $ 10.54 $ 10.51
========== ========== ========== ========== ==========
Total Return(b) 1.88% 8.90% 10.74% 5.07% (3.93)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 1.63% 1.51% 1.62% 1.55% 1.62%
Expenses, excluding expense
reductions 1.63% 1.52% 1.65% 1.56% 1.62%
Net investment income 3.87% 4.32% 4.19% 4.72% 4.49%
<Caption>
YEAR ENDED 9/30
--------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 12,379 $ 8,798 $ 6,662 $ 5,278 $ 6,577
Portfolio turnover rate 47.94% 51.72% 70.03% 76.33% 52.67%
==============================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
SEE NOTES TO FINANCIAL STATEMENTS.
117
<Page>
FINANCIAL HIGHLIGHTS
TEXAS TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 10.47 $ 9.99 $ 9.43 $ 9.55 $ 10.69
========== ========== ========== ========== ==========
Investment operations
Net investment income .46(a) .45(a) .46(a) .51(a) .52
Net realized and unrealized gain (loss) (.13) .48 .57 (.13) (1.03)
---------- ---------- ---------- ---------- ----------
Total from investment operations .33 .93 1.03 .38 (.51)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.44) (.45) (.47) (.50) (.52)
Net realized gain - - - - (.11)
---------- ---------- ---------- ---------- ----------
Total distributions (.44) (.45) (.47) (.50) (.63)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 10.36 $ 10.47 $ 9.99 $ 9.43 $ 9.55
========== ========== ========== ========== ==========
Total Return(b) 3.32% 9.55% 11.30% 4.14% (4.96)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including waivers
and expense reductions 1.02% 1.00% .64% .99% .94%
Expenses, excluding waivers
and expense reductions 1.02% 1.05% 1.09% 1.01% .94%
Net investment income 4.44% 4.49% 4.70% 5.47% 5.12%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 79,185 $ 81,369 $ 77,860 $ 74,405 $ 84,491
Portfolio turnover rate 58.09% 89.30% 108.27% 163.39% 168.04%
=============================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
SEE NOTES TO FINANCIAL STATEMENTS.
118
<Page>
FINANCIAL HIGHLIGHTS
WASHINGTON TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.32 $ 5.15 $ 4.89 $ 4.91 $ 5.38
========== ========== ========== ========== ==========
Investment operations
Net investment income .24(a) .26(a) .26(a) .27(a) .28
Net realized and unrealized gain (loss) (.10) .17 .26 (.04) (.50)
---------- ---------- ---------- ---------- ----------
Total from investment operations .14 .43 .52 .23 (.22)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders
from net investment income (.25) (.26) (.26) (.25) (.25)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 5.21 $ 5.32 $ 5.15 $ 4.89 $ 4.91
========== ========== ========== ========== ==========
Total Return(b) 2.75% 8.71% 10.92% 4.90% (4.17)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions .68% .71% .70% .71% .66%
Expenses, excluding expense
reductions .68% .72% .73% .71% .66%
Net investment income 4.68% 5.14% 5.22% 5.58% 5.42%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 50,497 $ 49,049 $ 45,883 $ 44,512 $ 51,849
Portfolio turnover rate 58.05% 40.20% 52.09% 152.63% 180.42%
=============================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
SEE NOTES TO FINANCIAL STATEMENTS.
119
<Page>
FINANCIAL HIGHLIGHTS
INSURED INTERMEDIATE TAX-FREE FUND
<Table>
<Caption>
6/23/2003(a)
TO
9/30/2003
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
============
Unrealized depreciation on investments (.01)
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 9.99
============
Investment operations
Net investment income(b) .06
Net realized and unrealized loss (.05)
------------
Total from investment operations .01
------------
Distributions to shareholders from net investment income (.06)
------------
NET ASSET VALUE, END OF PERIOD $ 9.94
============
Total Return(c) .16%(d)(e)
RATIOS TO AVERAGE NET ASSETS
Expenses, including waivers and expense reductions .07%(d)(+)
Expenses, excluding waivers and expense reductions 2.47%(d)(+)
Net investment income .66%(d)(+)
<Caption>
6/23/2003(a)
TO
SUPPLEMENTAL DATA: 9/30/2003
- -------------------------------------------------------------------------
Net assets, end of period (000) $ 3,673
Portfolio turnover rate 107.99%
=========================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
120
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
INSURED INTERMEDIATE TAX-FREE FUND
<Table>
<Caption>
6/23/2003(a)
TO
9/30/2003
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
============
Unrealized depreciation on investments (.02)
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 9.98
============
Investment operations
Net investment income(b) .05
Net realized and unrealized loss (.05)
------------
Total from investment operations -
------------
Distributions to shareholders from net investment income (.05)
------------
NET ASSET VALUE, END OF PERIOD $ 9.93
============
Total Return(c) .04%(d)(e)
RATIOS TO AVERAGE NET ASSETS
Expenses, including waivers and expense reductions .27%(d)(+)
Expenses, excluding waivers and expense reductions 2.64%(d)(+)
Net investment income .46%(d)(+)
<Caption>
6/23/2003(a)
TO
SUPPLEMENTAL DATA: 9/30/2003
- -------------------------------------------------------------------------
Net assets, end of period (000) $ 312
Portfolio turnover rate 107.99%
=========================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
121
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
INSURED INTERMEDIATE TAX-FREE FUND
<Table>
<Caption>
6/23/2003(a)
TO
9/30/2003
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
============
Unrealized depreciation on investments (.02)
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 9.98
============
Investment operations
Net investment income(b) .05
Net realized and unrealized loss (.05)
------------
Total from investment operations -
------------
Distributions to shareholders from net investment income (.05)
------------
NET ASSET VALUE, END OF PERIOD $ 9.93
============
Total Return(c) (.04)%(d)(e)
RATIOS TO AVERAGE NET ASSETS
Expenses, including waivers and expense reductions .27%(d)(+)
Expenses, excluding waivers and expense reductions 2.64%(d)(+)
Net investment income .46%(d)(+)
<Caption>
6/23/2003(a)
TO
SUPPLEMENTAL DATA: 9/30/2003
- -------------------------------------------------------------------------
Net assets, end of period (000) $ 313
Portfolio turnover rate 107.99%
=========================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
122
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
INSURED INTERMEDIATE TAX-FREE FUND
<Table>
<Caption>
6/23/2003(a)
TO
9/30/2003
PER SHARE OPERATING PERFORMANCE (CLASS P SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
Unrealized depreciation on investments (.01)
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 9.99
============
Investment operations
Net investment income(b) .06
Net realized and unrealized loss (.05)
------------
Total from investment operations .01
------------
Distributions to shareholders from net investment income (.06)
------------
NET ASSET VALUE, END OF PERIOD $ 9.94
============
Total Return(c) .11%(d)(e)
RATIOS TO AVERAGE NET ASSETS
Expenses, including waivers and expense reductions .12%(d)(+)
Expenses, excluding waivers and expense reductions 2.49%(d)(+)
Net investment income .61%(d)(+)
<Caption>
6/23/2003(a)
TO
SUPPLEMENTAL DATA: 9/30/2003
- -------------------------------------------------------------------------
Net assets, end of period (000) $ 10
Portfolio turnover rate 107.99%
=========================================================================
</Table>
(+) The ratios have been determined on a Fund basis.
(a) Commencement of investment operations; SEC effective date and date shares
first became available to the public is June 30, 2003.
(b) Calculated using average shares outstanding during the period.
(c) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(d) Not annualized.
(e) Total return for the period June 30, 2003 (SEC effective date) to
September 30, 2003.
SEE NOTES TO FINANCIAL STATEMENTS.
123
<Page>
FINANCIAL HIGHLIGHTS
FLORIDA TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30 11/1/1999 YEAR ENDED 10/31
-------------------------------------- TO ------------------------
2003 2002 2001 9/30/2000* 1999 1998
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE,
BEGINNING OF PERIOD $ 4.97 $ 4.82 $ 4.57 $ 4.52 $ 4.98 $ 4.87
========== ========== ========== ========== ========== ==========
Investment operations
Net investment income .21(a) .23(a) .23(a) .23(a) .23 .24
Net realized and
unrealized gain (loss) (.09) .15 .25 .03 (.46) .11
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations .12 .38 .48 .26 (.23) .35
---------- ---------- ---------- ---------- ---------- ----------
Distributions to shareholders
from net investment income (.21) (.23) (.23) (.21) (.23) (.24)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 4.88 $ 4.97 $ 4.82 $ 4.57 $ 4.52 $ 4.98
========== ========== ========== ========== ========== ==========
Total Return(b) 2.62% 8.10% 10.68% 5.86%(c) (4.74)% 7.30%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 1.04% 1.07% .99% .89%(c) .97% .89%
Expenses, excluding expense
reductions 1.04% 1.08% 1.05% .89%(c) .97% .89%
Net investment income 4.33% 4.74% 4.77% 5.00%(c) 4.73% 4.79%
<Caption>
YEAR ENDED 9/30 11/1/1999 YEAR ENDED 10/31
-------------------------------------- TO ------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 9/30/2000* 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 78,278 $ 84,325 $ 83,798 $ 94,817 $ 100,924 $ 127,292
Portfolio turnover rate 86.95% 82.90% 84.37% 169.02% 191.12% 140.61%
=================================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
124
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
FLORIDA TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30 11/1/1999 YEAR ENDED 10/31
-------------------------------------- TO ------------------------
2003 2002 2001 9/30/2000* 1999 1998
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE,
BEGINNING OF PERIOD $ 4.98 $ 4.83 $ 4.58 $ 4.52 $ 4.98 $ 4.87
========== ========== ========== ========== ========== ==========
Investment operations
Net investment income .18(a) .20(a) .20(a) .20(a) .20 .20
Net realized and
unrealized gain (loss) (.09) .14 .25 .04 (.46) .11
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations .09 .34 .45 .24 (.26) .31
---------- ---------- ---------- ---------- ---------- ----------
Distributions to shareholders
from net investment income (.18) (.19) (.20) (.18) (.20) (.20)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 4.89 $ 4.98 $ 4.83 $ 4.58 $ 4.52 $ 4.98
========== ========== ========== ========== ========== ==========
Total Return(b) 1.97% 7.32% 9.99% 5.44%(c) (5.43)% 6.52%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 1.71% 1.73% 1.64% 1.42%(c) 1.62% 1.58%
Expenses, excluding expense
reductions 1.71% 1.74% 1.70% 1.43%(c) 1.62% 1.58%
Net investment income 3.66% 4.08% 4.13% 4.52%(c) 4.07% 4.09%
<Caption>
YEAR ENDED 9/30 11/1/1999 YEAR ENDED 10/31
-------------------------------------- TO ------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 9/30/2000* 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 6,514 $ 5,927 $ 5,230 $ 4,706 $ 6,046 $ 7,275
Portfolio turnover rate 86.95% 82.90% 84.37% 169.02% 191.12% 140.61%
=================================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
*The Trust changed its fiscal year-end.
SEE NOTES TO FINANCIAL STATEMENTS.
125
<Page>
FINANCIAL HIGHLIGHTS
GEORGIA TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30 11/1/1999 YEAR ENDED 10/31
-------------------------------------- TO ------------------------
2003 2002 2001 9/30/2000* 1999 1998
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE,
BEGINNING OF PERIOD $ 5.70 $ 5.44 $ 5.07 $ 4.91 $ 5.43 $ 5.31
========== ========== ========== ========== ========== ==========
Investment operations
Net investment income .24(a) .23(a) .26(a) .21(a) .28 .27
Net realized and
unrealized gain (loss) (.06) .26 .37 .19 (.50) .19
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations .18 .49 .63 .40 (.22) .46
---------- ---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.23) (.23) (.26) (.24) (.26) (.27)
Net realized gain (.02) - - - (.04) (.07)
---------- ---------- ---------- ---------- ---------- ----------
Total distributions (.25) (.23) (.26) (.24) (.30) (.34)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 5.63 $ 5.70 $ 5.44 $ 5.07 $ 4.91 $ 5.43
========== ========== ========== ========== ========== ==========
Total Return(b) 3.21% 9.27% 12.69% 8.59%(c) 4.36% 9.00%
RATIOS TO AVERAGE NET ASSETS
Expenses, including waivers
and expense reductions .68% .69% .31% .17%(c) .18% .24%
Expenses, excluding waivers
and expense reductions .69% .72% .78% .63%(c) .68% .74%
Net investment income 4.26% 4.24% 4.81% 4.30%(c) 5.32% 5.07%
<Caption>
YEAR ENDED 9/30 11/1/1999 YEAR ENDED 10/31
-------------------------------------- TO ------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 9/30/2000* 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 85,441 $ 69,836 $ 46,235 $ 29,245 $ 27,432 $ 19,764
Portfolio turnover rate 34.13% 48.66% 43.50% 122.44% 115.87% 126.52%
=================================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
*The Trust changed its fiscal year-end.
SEE NOTES TO FINANCIAL STATEMENTS.
126
<Page>
FINANCIAL HIGHLIGHTS
MICHIGAN TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30 11/1/1999 YEAR ENDED 10/31
-------------------------------------- TO ------------------------
2003 2002 2001 9/30/2000* 1999 1998
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE,
BEGINNING OF PERIOD $ 5.43 $ 5.20 $ 4.87 $ 4.75 $ 5.18 $ 5.06
========== ========== ========== ========== ========== ==========
Investment operations
Net investment income .23(a) .25(a) .25(a) .21(a) .26 .26
Net realized and
unrealized gain (loss) (.07) .23 .33 .14 (.44) .12
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations .16 .48 .58 .35 (.18) .38
---------- ---------- ---------- ---------- ---------- ----------
Distributions to shareholders
from net investment income (.23) (.25) (.25) (.23) (.25) (.26)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 5.36 $ 5.43 $ 5.20 $ 4.87 $ 4.75 $ 5.18
========== ========== ========== ========== ========== ==========
Total Return(b) 3.16% 9.57% 12.21% 7.57%(c) (3.55)% 7.59%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions .71% .73% .69% .67%(c) .69% .69%
Expenses, excluding expense
reductions .73% .75% .74% .67%(c) .69% .69%
Net investment income 4.28% 4.77% 4.91% 4.37%(c) 5.21% 4.98%
<Caption>
YEAR ENDED 9/30 11/1/1999 YEAR ENDED 10/31
-------------------------------------- TO ------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 9/30/2000* 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 68,290 $ 58,632 $ 49,330 $ 45,666 $ 49,356 $ 53,139
Portfolio turnover rate 59.46% 48.09% 100.27% 111.48% 186.97% 82.33%
=================================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
*The Trust changed its fiscal year-end.
SEE NOTES TO FINANCIAL STATEMENTS.
127
<Page>
FINANCIAL HIGHLIGHTS
PENNSYLVANIA TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30 11/1/1999 YEAR ENDED 10/31
-------------------------------------- TO ------------------------
2003 2002 2001 9/30/2000* 1999 1998
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE,
BEGINNING OF PERIOD $ 5.37 $ 5.18 $ 4.90 $ 4.81 $ 5.28 $ 5.14
========== ========== ========== ========== ========== ==========
Investment operations
Net investment income .23(a) .24(a) .25(a) .22(a) .26 .27
Net realized and
unrealized gain (loss) (.10) .19 .28 .10 (.47) .14
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations .13 .43 .53 .32 (.21) .41
---------- ---------- ---------- ---------- ---------- ----------
Distributions to shareholders
from net investment income (.23) (.24) (.25) (.23) (.26) (.27)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 5.27 $ 5.37 $ 5.18 $ 4.90 $ 4.81 $ 5.28
========== ========== ========== ========== ========== ==========
Total Return(b) 2.52% 8.57% 11.06% 6.83%(c) (4.13)% 8.12%
RATIOS TO AVERAGE NET ASSETS
Expenses, including waivers
and expense reductions .94% 1.08% .90% .88%(c) .96% .72%
Expenses, excluding waivers
and expense reductions .95% 1.10% 1.06% .88%(c) .96% .72%
Net investment income 4.37% 4.66% 4.88% 4.54%(c) 5.02% 5.05%
<Caption>
YEAR ENDED 9/30 11/1/1999 YEAR ENDED 10/31
-------------------------------------- TO ------------------------
SUPPLEMENTAL DATA: 2003 2002 2001 9/30/2000* 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 99,280 $ 101,502 $ 94,550 $ 91,750 $ 93,835 $ 102,907
Portfolio turnover rate 29.76% 60.87% 65.63% 61.00% 40.76% 65.20%
=================================================================================================================================
</Table>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
*The Trust changed its fiscal year-end.
SEE NOTES TO FINANCIAL STATEMENTS.
128
<Page>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Lord Abbett Tax-Free Income Fund, Inc. (the "Company") and Lord Abbett Tax-Free
Income Trust (the "Trust") are registered under the Investment Company Act of
1940 (the "Act") as open-end management investment companies. The Company was
organized as a Maryland corporation on December 27, 1983. The Trust was
organized as a Massachusetts Business Trust on September 11, 1991 and was
reorganized as a Delaware Business Trust on July 22, 2002.
The Company consists of the following ten portfolios and their respective
classes (separately, a "Fund" and collectively, the "Funds"): Lord Abbett
National Tax-Free Income Fund ("National"), Class A, B, C and P shares;
Lord Abbett California Tax-Free Income Fund ("California") and Lord Abbett New
York Tax-Free Income Fund ("New York"), Class A, C and P shares; Lord Abbett
Connecticut Tax-Free Income Fund ("Connecticut"), Lord Abbett Hawaii Tax-Free
Income Fund ("Hawaii"), Lord Abbett Minnesota Tax-Free Income Fund
("Minnesota"), Lord Abbett Missouri Tax-Free Income Fund ("Missouri"),
Lord Abbett New Jersey Tax-Free Income Fund ("New Jersey"), Lord Abbett Texas
Tax-Free Income Fund ("Texas") and Lord Abbett Washington Tax-Free Income Fund
("Washington"), Class A and P shares. The Trust consists of the following five
portfolios and their respective classes (separately, a "Fund" and collectively,
the "Funds"): Florida Series ("Florida"), Class A, C and P shares; Georgia
Series ("Georgia"), Michigan Series ("Michigan"), Pennsylvania Series
("Pennsylvania"), Class A and P shares, and Lord Abbett Insured Intermediate
Tax-Free Fund ("Insured"), Class A, B, C and P. Insured commenced investment
operations and was capitalized with a $2,230,000 investment from Lord, Abbett &
Co. LLC ("Lord Abbett") on June 23, 2003. Shares first became available to the
public on June 30, 2003. Each Fund is non-diversified as defined under the Act,
except for National and Insured. As of the date of this report, only Insured has
issued class P shares.
The investment objective of each Fund is to seek the maximum amount of interest
income exempt from federal income tax as is consistent with reasonable risk.
Each Fund (except for National and Insured) also seeks as high a level of
interest income exempt from the personal income tax of its state as is
consistent with reasonable risk. New York also seeks as high a level of interest
income exempt from New York City personal income tax as is consistent with
reasonable risk. Each class has different expenses and dividends. A front-end
sales charge is normally added to the NAV for Class A shares. There is no
front-end sales charge in the case of the Class B, C and P shares, although
there may be a contingent deferred sales charge ("CDSC") as follows: certain
redemptions of Class A shares made within 24 months following any purchases made
without a sales charge; Class B shares redeemed before the sixth anniversary of
purchase; and Class C shares redeemed before the first anniversary of purchase.
Class B shares will convert to Class A shares on the eighth anniversary of the
original purchase of Class B shares.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results could
differ from those estimates.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) INVESTMENT VALUATION-Securities are valued at prices supplied by
independent pricing services approved by the Directors/Trustees. Such
prices reflect broker/dealer supplied
129
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
valuations and electronic data processing techniques. Prices reflect the
mean of the bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value, as determined by
management and approved in good faith by the Board of Directors/Trustees.
Short-term securities with 60 days or less remaining to maturity are valued
using the amortized cost method, which approximates current market value.
(b) SECURITY TRANSACTIONS-Security transactions are recorded as of the date
that the securities are purchased or sold (trade date). Realized gains and
losses from sales of portfolio securities are calculated using the
identified-cost method. Realized and unrealized gains or losses are
allocated to each class of shares, based upon the relative proportion of
net assets at the beginning of the day.
(c) INVESTMENT INCOME-Dividend income is recorded on the ex-dividend date.
Interest income is recorded on the accrual basis. Discounts are accreted
and premiums are amortized using the effective interest method. Investment
income is allocated to each class of shares based upon the relative
proportion of net assets at the beginning of the day.
(d) FEDERAL TAXES-It is the policy of each Fund to meet the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all taxable income and
capital gains to its shareholders. Therefore, no federal income tax
provision is required.
(e) EXPENSES-Expenses incurred by the Company and Trust that do not
specifically relate to an individual Fund are allocated to the Funds on a
pro-rata basis. Expenses, excluding class specific expenses, are allocated
to each class of shares based upon the relative proportion of net assets at
the beginning of the day. Class A, Class B, Class C and Class P shares bear
all expenses and fees relating to their respective 12b-1 Distribution
Plans.
(f) OFFERING COSTS-Lord Abbett incurred initial offering costs on behalf of
Insured which will be reimbursed by the Fund in the full amount thereof.
Such expenses were deferred and are being amortized on the straight-line
method over a period of one year from the commencement of operations.
(g) WHEN-ISSUED MUNICIPAL BONDS-Each Fund may purchase new issues of municipal
bonds, which are generally offered on a when-issued basis, with delivery
and payment normally taking place approximately one month after the
purchase date.
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES
The Company and Trust each have a management agreement with Lord Abbett,
pursuant to which Lord Abbett supplies each Fund with investment management
services and executive and other personnel, pays the remuneration of officers,
provides office space and pays for ordinary and necessary office and clerical
expenses relating to research and statistical work and supervision of each
Fund's investment portfolio. The management fee is based on each Fund's average
daily net assets for each month at an annual rate of .50% for all Funds,
excluding Insured. The management fee for Insured is based on average daily net
assets at the following annual rates:
- -----------------------------------
First $2 Billion .45%
Next $3 Billion .425%
Over $5 Billion .40%
130
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the period June 23, 2003 (commencement of investment operations) to
September 30, 2003, Lord Abbett waived its management fee and reimbursed all
other expenses (excluding 12b-1 fees) for Insured.
In addition, effective January 1, 2003, Lord Abbett began providing certain
administrative services to each Fund pursuant to an Administrative Services
Agreement at an annual rate of .04% of each Fund's average daily net assets.
This results in Lord Abbett paying fund accounting expenses that were previously
charged to the Funds.
12b-1 DISTRIBUTION PLAN
Each Fund has adopted a distribution plan (the "Plan") with respect to one or
more classes of shares pursuant to Rule 12b-1 of the Act, which provides for the
payment of ongoing distribution and service fees to Lord Abbett Distributor LLC
("Distributor"), an affiliate of Lord Abbett. The fees are accrued daily at
annual rates based upon average daily net assets as follows:
<Table>
<Caption>
FEE CLASS A(1) CLASS B CLASS C CLASS P
- -----------------------------------------------------------------------------------
Service .25%(2) .25% .25% .25%
Distribution .10%(3)(4)(5) .75% .75% .20%
</Table>
(1) The Class A Plans of Minnesota, Washington, Georgia and Michigan will not
go into effect until the quarter subsequent to the net assets of each of
these Funds reaching $100 million. As of September 30, 2003, the net assets
of each such Fund have not reached $100 million.
(2) Annual service fee is .15% of the average daily net assets attributable to
Class A shares sold prior to the following dates:
<Table>
<Caption>
DATE
- -------------------------------------------------------------------------
National, New York, Texas June 1, 1990
Hawaii January 1, 1993
New Jersey July 1, 1992
Florida October 1, 1992
Pennsylvania March 31, 1998
</Table>
(3) In addition, until January 1, 2003, the Company and Trust paid an
incremental marketing expense of approximately .03% of average daily net
assets attributable to Class A.
(4) In addition, the Company and Trust pay a one-time distribution fee of up to
1% on certain qualifying purchases, which is generally amortized over a
two-year period.
(5) For the period June 23, 2003 (commencement of investment operations) to
September 30, 2003, Lord Abbett waived its distribution fee for Insured.
131
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
COMMISSIONS
Distributor received the following commissions on sales of Class A shares of the
Funds after concessions were paid to authorized dealers for the year ended
September 30, 2003:
<Table>
<Caption>
DISTRIBUTOR DEALERS'
COMMISSIONS CONCESSIONS
- --------------------------------------------------------------------------------
National $ 117,973 $ 551,461
California 35,559 162,008
Connecticut 29,369 140,879
Hawaii 16,752 76,666
Minnesota 42,791 213,233
Missouri 81,368 387,118
New Jersey 31,291 145,271
New York 39,177 187,694
Texas 11,727 61,828
Washington 28,488 133,883
Insured* 593 3,000
Florida 22,344 105,445
Georgia 112,811 531,744
Michigan 66,846 347,792
Pennsylvania 36,890 169,544
</Table>
*For the period June 23, 2003 (commencement of investment operations) to
September 30, 2003.
One Director/Trustee and certain of the Company's and Trust's officers have an
interest in Lord Abbett.
4. DISTRIBUTIONS AND CAPITAL LOSS CARRYFORWARDS
Dividends from net investment income, if any, are declared daily and paid
monthly. Taxable net realized gains from investment transactions, reduced by
capital loss carryforwards, if any, are declared and distributed to shareholders
at least annually. The capital loss carryforward amount is available to offset
future net capital gains. Dividends and distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions from
net investment income and net realized capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. These book/tax
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the components of net assets based on their federal tax basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for tax purposes are reported as distributions of paid-in capital.
132
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The tax character of the distributions paid during the years ended September 30,
2003 and September 30, 2002 are as follows:
<Table>
<Caption>
NATIONAL CALIFORNIA
- --------------------------------------------------------------------------------------------------------
9/30/2003 9/30/2002 9/30/2003 9/30/2002
- --------------------------------------------------------------------------------------------------------
Distributions paid from:
Tax exempt income $ 26,381,144 $ 27,296,117 $ 8,871,342 $ 9,230,492
Ordinary income - - - -
Net long term capital gains - - - -
- --------------------------------------------------------------------------------------------------------
Total distributions paid $ 26,381,144 $ 27,296,117 $ 8,871,342 $ 9,230,492
========================================================================================================
<Caption>
CONNECTICUT HAWAII
- --------------------------------------------------------------------------------------------------------
9/30/2003 9/30/2002 9/30/2003 9/30/2002
- --------------------------------------------------------------------------------------------------------
Distributions paid from:
Tax exempt income $ 4,356,708 $ 4,666,381 $ 3,177,488 $ 3,493,168
Ordinary income - - - -
Net long term capital gains - - - -
- --------------------------------------------------------------------------------------------------------
Total distributions paid $ 4,356,708 $ 4,666,381 $ 3,177,488 $ 3,493,168
========================================================================================================
<Caption>
MINNESOTA MISSOURI
- --------------------------------------------------------------------------------------------------------
9/30/2003 9/30/2002 9/30/2003 9/30/2002
- --------------------------------------------------------------------------------------------------------
Distributions paid from:
Tax exempt income $ 1,329,120 $ 1,196,122 $ 6,009,033 $ 5,909,705
Ordinary income - - - -
Net long term capital gains - - - -
- --------------------------------------------------------------------------------------------------------
Total distributions paid $ 1,329,120 $ 1,196,122 $ 6,009,033 $ 5,909,705
========================================================================================================
<Caption>
NEW JERSEY NEW YORK
- --------------------------------------------------------------------------------------------------------
9/30/2003 9/30/2002 9/30/2003 9/30/2002
- --------------------------------------------------------------------------------------------------------
Distributions paid from:
Tax exempt income $ 7,202,044 $ 7,410,189 $ 11,705,846 $ 11,624,964
Ordinary income - - - -
Net long term capital gains - - - -
- --------------------------------------------------------------------------------------------------------
Total distributions paid $ 7,202,044 $ 7,410,189 $ 11,705,846 $ 11,624,964
========================================================================================================
<Caption>
TEXAS WASHINGTON
- --------------------------------------------------------------------------------------------------------
9/30/2003 9/30/2002 9/30/2003 9/30/2002
- --------------------------------------------------------------------------------------------------------
Distributions paid from:
Tax exempt income $ 3,451,579 $ 3,456,519 $ 2,382,580 $ 2,369,030
Ordinary income - - - -
Net long term capital gains - - - -
- --------------------------------------------------------------------------------------------------------
Total distributions paid $ 3,451,579 $ 3,456,519 $ 2,382,580 $ 2,369,030
========================================================================================================
</Table>
133
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
FLORIDA GEORGIA
- --------------------------------------------------------------------------------------------------------
9/30/2003 9/30/2002 9/30/2003 9/30/2002
- --------------------------------------------------------------------------------------------------------
Distributions paid from:
Tax exempt income $ 3,821,091 $ 4,122,391 $ 3,203,266 $ 2,298,082
Ordinary income - - - -
Net long term capital gains - - 214,585 -
- --------------------------------------------------------------------------------------------------------
Total distributions paid $ 3,821,091 $ 4,122,391 $ 3,417,851 $ 2,298,082
========================================================================================================
<Caption>
MICHIGAN PENNSYLVANIA
- --------------------------------------------------------------------------------------------------------
9/30/2003 9/30/2002 9/30/2003 9/30/2002
- --------------------------------------------------------------------------------------------------------
Distributions paid from:
Tax exempt income $ 2,853,218 $ 2,503,130 $ 4,360,779 $ 4,405,152
Ordinary income - - - -
Net long term capital gains - - - -
- --------------------------------------------------------------------------------------------------------
Total distributions paid $ 2,853,218 $ 2,503,130 $ 4,360,779 $ 4,405,152
========================================================================================================
<Caption>
INSURED
- ------------------------------------------------------------------------
9/30/2003*
- ------------------------------------------------------------------------
Distributions paid from:
Tax exempt income $ 19,301
Ordinary income -
Net long term capital gains -
- ------------------------------------------------------------------------
Total distributions paid $ 19,301
========================================================================
</Table>
* For the period June 23, 2003 (commencement of investment operations) to
September 30, 2003.
As of September 30, 2003, the components of accumulated earnings (losses) on a
tax basis are as follows:
<Table>
<Caption>
NATIONAL CALIFORNIA
- --------------------------------------------------------------------------------------------------------
Capital loss carryforwards* $ (12,040,281) $ (3,317,755)
Temporary differences (5,972,726) (1,431,942)
Unrealized gains - net 32,308,728 8,719,211
- --------------------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 14,295,721 $ 3,969,514
========================================================================================================
<Caption>
CONNECTICUT HAWAII
- --------------------------------------------------------------------------------------------------------
Capital loss carryforwards* $ (1,464,195) $ (1,986,981)
Temporary differences (749,796) (1,931,874)
Unrealized gains - net 5,282,615 5,151,611
- --------------------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 3,068,624 $ 1,232,756
========================================================================================================
<Caption>
MINNESOTA MISSOURI
- --------------------------------------------------------------------------------------------------------
Capital loss carryforwards* $ (560,978) $ (753,091)
Temporary differences (249,944) (309,257)
Unrealized gains - net 1,580,239 7,858,945
- --------------------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 769,317 $ 6,796,597
========================================================================================================
<Caption>
NEW JERSEY NEW YORK
- --------------------------------------------------------------------------------------------------------
Capital loss carryforwards* $ (3,872,596) $ (3,869,006)
Temporary differences (2,396,696) (1,000,817)
Unrealized gains - net 9,434,681 17,672,345
- --------------------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 3,165,389 $ 12,802,522
========================================================================================================
</Table>
134
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
TEXAS WASHINGTON
- --------------------------------------------------------------------------------------------------------
Undistributed tax exempt income - net $ - $ 402,610
- --------------------------------------------------------------------------------------------------------
Total undistributed earnings $ - $ 402,610
========================================================================================================
Capital loss carryforwards* (3,318,831) (1,996,112)
Temporary differences (762,834) (510,138)
Unrealized gains - net 7,867,466 3,464,672
- --------------------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 3,785,801 $ 1,361,032
========================================================================================================
<Caption>
INSURED FLORIDA
- --------------------------------------------------------------------------------------------------------
Undistributed tax exempt income - net $ 1,658 $ -
- --------------------------------------------------------------------------------------------------------
Total undistributed earnings $ 1,658 $ -
========================================================================================================
Capital loss carryforwards* - (7,197,061)
Temporary differences (74,668) (546,445)
Unrealized gains - net 85,959 7,430,657
- --------------------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 12,949 $ (312,849)
========================================================================================================
<Caption>
GEORGIA MICHIGAN
- --------------------------------------------------------------------------------------------------------
Undistributed tax exempt income - net $ 42,975 $ -
- --------------------------------------------------------------------------------------------------------
Total undistributed earnings $ 42,975 $ -
- --------------------------------------------------------------------------------------------------------
Capital loss carryforwards* (92,644) (1,710,242)
Temporary differences (60,719) (424,556)
Unrealized gains - net 3,883,756 5,033,070
- --------------------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 3,773,368 $ 2,898,272
========================================================================================================
<Caption>
PENNSYLVANIA
- ------------------------------------------------------------------------
Capital loss carryforwards* $ (764,273)
Temporary differences (641,935)
Unrealized gains - net 6,133,701
- ------------------------------------------------------------------------
Total accumulated earnings - net $ 4,727,493
========================================================================
</Table>
* At September 30, 2003, the capital loss carryforwards along with the related
expiration dates are as follows:
<Table>
<Caption>
2004 2005 2006 2007
- ---------------------------------------------------------------------------------
National $ - $ - $ - $ -
California - - - -
Connecticut 268,469 - - -
Hawaii 1,096,898 - - 37,384
Minnesota - - - -
Missouri 484,385 31,063 - -
New Jersey - - - -
New York 1,668,796 - - -
Texas - - - -
Washington 295,103 - - -
Florida 1,035,870 - - 3,917,644
Georgia - - - -
Michigan - - - 998,605
Pennsylvania - - - -
<Caption>
2008 2009 2010 2011 TOTAL
- ------------------------------------------------------------------------------------------------
National $ 11,399,772 $ 385,136 $ - $ 255,373 $ 12,040,281
California 3,282,765 - - 34,990 3,317,755
Connecticut 677,619 518,107 - - 1,464,195
Hawaii 584,699 268,000 1,986,981
Minnesota - 560,978 - - 560,978
Missouri 151,236 86,407 - - 753,091
New Jersey 3,467,129 - - 405,467 3,872,596
New York 983,645 1,190,572 - 25,993 3,869,006
Texas 2,739,564 579,267 - - 3,318,831
Washington 947,474 710,842 - 42,693 1,996,112
Florida 1,479,660 - - 763,887 7,197,061
Georgia - - - 92,644 92,644
Michigan 711,637 - - - 1,710,242
Pennsylvania 762,318 - - 1,955 764,273
</Table>
135
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Capital losses incurred after October 31 ("post-October losses), within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. Each Fund incurred and will elect to defer net capital losses
during fiscal 2003 as follows:
<Table>
<Caption>
POST-OCTOBER
LOSSES
- ---------------------------------------
National $ 3,714,264
California 1,151,283
Connecticut 579,824
Hawaii 1,679,388
Minnesota 135,034
Missouri 70,139
New Jersey 1,814,786
New York 80,579
Texas 568,881
Washington 493,984
Insured 74,668
Florida 378,707
Georgia 58,985
Michigan 196,526
Pennsylvania 297,993
</Table>
As of September 30, 2003, the aggregate security unrealized gains and losses
based on cost for U.S. Federal income tax purposes are as follows:
<Table>
<Caption>
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
TAX COST GAIN LOSS GAIN
- -------------------------------------------------------------------------------------
National $ 573,773,743 $ 32,883,556 $ (574,828) $ 32,308,728
California 183,654,150 8,961,788 (242,577) 8,719,211
Connecticut 91,126,113 5,328,983 (46,368) 5,282,615
Hawaii 68,141,741 5,182,955 (31,344) 5,151,611
Minnesota 32,583,875 1,635,910 (55,671) 1,580,239
Missouri 142,797,186 7,882,430 (23,485) 7,858,945
New Jersey 143,623,295 9,464,835 (30,154) 9,434,681
New York 240,066,200 18,085,583 (413,238) 17,672,345
Texas 70,373,556 7,867,466 - 7,867,466
Washington 45,652,838 3,480,242 (15,570) 3,464,672
Insured 3,920,969 85,959 - 85,959
Florida 81,652,553 7,455,885 (25,228) 7,430,657
Georgia 79,694,919 4,033,771 (150,015) 3,883,756
Michigan 61,724,411 5,056,222 (23,152) 5,033,070
Pennsylvania 91,067,556 6,246,063 (112,362) 6,133,701
</Table>
The difference between book-basis and tax-basis unrealized gains (losses) is
primarily attribtable to wash sales, and other temporary tax adjustments.
136
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Permanent items identified during the year ended September 30, 2003 have been
reclassified among the components of net assets based on their tax basis
treatment as follows:
<Table>
<Caption>
UNDISTRIBUTED/
(DISTRIBUTIONS
IN EXCESS OF ACCUMULATED
NET INVESTMENT NET REALIZED
INCOME) LOSS PAID-IN CAPITAL
- ---------------------------------------------------------------------------------
National $ 709,004 $ - $ (709,004)
California - 5,761,785 (5,761,785)
Hawaii (31,448) - 31,448
Minnesota (5,372) - 5,372
New Jersey 1,980 - (1,980)
New York 49,783 5,779,167 (5,828,950)
Washington (44,217) - 44,217
Insured* 2,394 - (2,394)
Florida (43,243) 2,642,077 (2,598,834)
Georgia 3,457 (86) (3,371)
Michigan 10,839 - (10,839)
Pennsylvania (58,637) - 58,637
</Table>
*For the period June 23, 2003 (commencement of investment operations) to
September 30, 2003.
5. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and sales of investment securities (other than short-term investments)
are as follows:
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30, 2003
- -------------------------------------------------------------
PURCHASES SALES
- -------------------------------------------------------------
National $ 1,250,874,003 $ 1,250,273,149
California 169,618,403 176,814,243
Connecticut 40,146,420 45,677,367
Hawaii 20,471,257 22,511,573
Minnesota 18,776,830 10,287,695
Missouri 77,574,928 70,023,210
New Jersey 108,969,843 112,633,737
New York 123,630,530 120,507,755
Texas 44,858,040 46,421,237
Washington 30,279,143 27,595,874
Insured* 6,943,419 3,129,747
Florida 73,303,827 73,144,225
Georgia 40,027,374 26,068,063
Michigan 47,205,923 36,699,492
Pennsylvania 29,142,369 31,588,306
</Table>
* For the period June 23, 2003 (commencement of investment operations) to
September 30, 2003.
There were no purchases or sales of U.S. Government securities for the year
ended September 30, 2003.
137
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. DIRECTORS'/TRUSTEES' REMUNERATION
The Company's and Trust's officers and the one Director/Trustee who are
associated with Lord Abbett do not receive any compensation from the Company or
Trust for serving in such capacities. Outside Directors'/Trustees' fees are
allocated among all Lord Abbett-sponsored funds based on the net assets of each
fund. There is an equity based plan available to all outside Directors/Trustees
under which outside Directors/Trustees must defer receipt of a portion of, and
may elect to defer receipt of an additional portion of Directors'/Trustees'
fees. The deferred amounts are treated as though equivalent dollar amounts have
been invested proportionately in the Company or Trust. Such amounts and earnings
accrued thereon are included in Directors'/Trustees' fees on the Statements of
Operations and in Directors'/Trustees' fees payable on the Statements of Assets
and Liabilities and are not deductible for federal income tax purposes until
such amounts are paid.
7. EXPENSE REDUCTIONS
The Funds have entered into agreements with their transfer agent and/or
custodian whereby credits realized as a result of uninvested cash balances are
used to reduce a portion of the Funds' expenses.
8. CUSTODIAN AND ACCOUNTING AGENT
State Street Bank and Trust Company ("SSB") is the Funds' custodian and
accounting agent. SSB performs custodian, accounting and record keeping
functions relating to portfolio transactions and calculating each Fund's net
asset value.
9. INVESTMENT RISKS
Each Fund's performance and the value of its investments will vary in response
to changes in interest rates and other market factors. As interest rates rise, a
Fund's investments typically will lose value. This risk is usually greater for
long-term bonds than for short-term bonds. As a result, the Funds, which tend to
invest in longer-term bonds than many other municipal bond funds, normally will
have more price volatility than those other funds.
Additional risks that could reduce each Fund's performance or increase
volatility include call risk, governmental risk, legislative risk, management
risk and credit risk. Credit risk varies among states based upon the economic
and fiscal conditions of each state and the municipalities within the state.
Each Fund (except National and Insured) is non-diversified which means that it
may invest a greater portion of its assets in a single issuer than a diversified
fund. Thus, it may be exposed to greater risk.
Because each Fund other than National and Insured invests primarily in issuers
of its particular state, its performance may be more affected by local, state
and regional factors than a fund investing in municipal bonds issued in many
states, such as National and Insured. These factors may include economic,
political or state legislative developments, erosion of the tax base and the
possibility of credit problems. In addition, downturns or developments in the
U.S. economy or in foreign economies may harm the performance of each Fund, and
may do so disproportionately as a result of the corresponding disproportionate
impact of such occurrences on particular state, territory, or local economies.
138
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Each Fund may invest up to 20% of its net assets in residual interest bonds
("RIBs"). RIBs, sometimes referred to as inverse floaters, are debt instruments
with a floating or variable interest rate that moves in the opposite direction
of the interest rate on another security or the value of an index. Changes in
the interest rate on the other security or index inversely affect the residual
interest paid on the RIB, with the result that when interest rates rise, RIBs
make lower interest payments and their values fall faster than fixed-rate bonds.
But when interest rates fall, not only do RIBs make higher interest payments,
their values also rise faster than fixed-rate bonds.
Each Fund may purchase securities on a forward commitment or when-issued basis.
Delivery and payment for such securities can take place a month or more after
the transaction date. During this period such securities are subject to market
fluctuations.
10. SUMMARY OF CAPITAL TRANSACTIONS
The Company has 1,000,000,000 authorized shares of capital stock (par value
$.001) of which 900,000,000 are issued and allocated as follows: 150,000,000 to
National, 110,000,000 to each of California, New Jersey, and New York, and
70,000,000 to each of Connecticut, Hawaii, Minnesota, Missouri, Texas, and
Washington. The Trust has an unlimited number of shares of beneficial interest
authorized.
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30, 2003
--------------------------------------------------------------------------------
CONNECTICUT HAWAII MINNESOTA MISSOURI NEW JERSEY
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 784,378 1,118,700 2,634,465 4,063,538 2,469,761
REINVESTMENT OF DISTRIBUTIONS 202,793 338,450 209,576 888,995 786,255
SHARES REACQUIRED (1,212,005) (2,073,364) (963,379) (3,103,766) (4,363,119)
- ------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) (224,834) (616,214) 1,880,662 1,848,767 (1,107,103)
- ------------------------------------------------------------------------------------------------------------------
<Caption>
YEAR ENDED SEPTEMBER 30, 2003
--------------------------------------------------------------------------------
TEXAS WASHINGTON GEORGIA MICHIGAN PENNSYLVANIA
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 562,546 1,436,340 5,253,056 3,578,052 1,876,842
REINVESTMENT OF DISTRIBUTIONS 237,487 318,921 491,682 353,430 407,087
SHARES REACQUIRED (923,282) (1,270,360) (2,815,614) (1,989,612) (2,336,153)
- ------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) (123,249) 484,901 2,929,124 1,941,870 (52,224)
- ------------------------------------------------------------------------------------------------------------------
<Caption>
YEAR ENDED SEPTEMBER 30, 2002
--------------------------------------------------------------------------------
CONNECTICUT HAWAII MINNESOTA MISSOURI NEW JERSEY
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 853,997 2,390,770 962,671 3,364,100 3,202,830
REINVESTMENT OF DISTRIBUTIONS 208,106 365,054 190,599 868,887 817,964
SHARES REACQUIRED (1,502,754) (1,535,997) (773,983) (2,234,491) (4,127,923)
- ------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) (440,651) 1,219,827 379,287 1,998,496 (107,129)
- ------------------------------------------------------------------------------------------------------------------
</Table>
139
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30, 2002
--------------------------------------------------------------------------------
TEXAS WASHINGTON GEORGIA MICHIGAN PENNSYLVANIA
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 662,436 945,389 5,149,300 2,017,019 1,803,527
REINVESTMENT OF DISTRIBUTIONS 241,267 302,561 342,996 313,339 404,088
SHARES REACQUIRED (928,704) (947,446) (1,736,593) (1,012,841) (1,561,369)
- ------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) (25,001) 300,504 3,755,703 1,317,517 646,246
- ------------------------------------------------------------------------------------------------------------------
</Table>
Transactions (both shares and dollars) in Funds with multiple classes are as
follows:
<Table>
<Caption>
YEAR ENDED YEAR ENDED
NATIONAL SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
- ------------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 5,669,665 $ 65,071,288 7,751,014 $ 87,781,034
REINVESTMENT OF DISTRIBUTIONS 1,359,829 15,627,071 1,428,874 16,160,809
SHARES REACQUIRED (7,418,567) (85,075,942) (9,175,849) (103,951,138)
- ------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) (389,073) $ (4,377,583) 4,039 $ (9,295)
- ------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 980,446 $ 11,338,944 1,127,290 $ 12,857,643
REINVESTMENT OF DISTRIBUTIONS 58,692 675,936 48,216 546,813
SHARES REACQUIRED (727,080) (8,357,818) (605,266) (6,875,994)
- ------------------------------------------------------------------------------------------------------------------
INCREASE 312,058 $ 3,657,062 570,240 $ 6,528,462
- ------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 988,068 $ 11,461,006 1,002,981 $ 11,383,352
REINVESTMENT OF DISTRIBUTIONS 80,448 925,745 74,735 846,978
SHARES REACQUIRED (577,892) (6,648,381) (605,076) (6,832,378)
- ------------------------------------------------------------------------------------------------------------------
INCREASE 490,624 $ 5,738,370 472,640 $ 5,397,952
- ------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED YEAR ENDED
CALIFORNIA SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
- ------------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 1,492,737 $ 16,255,433 2,019,108 $ 21,727,564
REINVESTMENT OF DISTRIBUTIONS 413,818 4,507,517 448,801 4,840,005
SHARES REACQUIRED (2,583,054) (28,071,598) (2,972,942) (31,999,921)
- ------------------------------------------------------------------------------------------------------------------
DECREASE (676,499) $ (7,308,648) (505,033) $ (5,432,352)
- ------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 510,721 $ 5,606,781 338,503 $ 3,667,344
REINVESTMENT OF DISTRIBUTIONS 21,919 238,826 15,597 168,372
SHARES REACQUIRED (310,511) (3,360,618) (141,033) (1,511,658)
- ------------------------------------------------------------------------------------------------------------------
INCREASE 222,129 $ 2,484,989 213,067 $ 2,324,058
- ------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED YEAR ENDED
NEW YORK SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
- ------------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 2,926,447 $ 33,217,359 2,823,672 $ 31,478,472
REINVESTMENT OF DISTRIBUTIONS 594,191 6,775,806 613,701 6,853,956
SHARES REACQUIRED (3,567,933) (40,743,765) (3,456,554) (38,511,864)
- ------------------------------------------------------------------------------------------------------------------
DECREASE (47,295) $ (750,600) (19,181) $ (179,436)
- ------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 506,318 $ 5,809,463 233,172 $ 2,609,870
REINVESTMENT OF DISTRIBUTIONS 16,052 183,062 12,420 138,937
SHARES REACQUIRED (192,259) (2,174,296) (88,141) (985,659)
- ------------------------------------------------------------------------------------------------------------------
INCREASE 330,111 $ 3,818,229 157,451 $ 1,763,148
- ------------------------------------------------------------------------------------------------------------------
</Table>
140
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
FLORIDA
- ------------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 1,544,362 $ 7,546,963 1,145,637 $ 5,514,044
REINVESTMENT OF DISTRIBUTIONS 314,963 1,533,647 312,748 1,501,638
SHARES REACQUIRED (2,768,788) (13,472,904) (1,887,030) (9,058,564)
- ------------------------------------------------------------------------------------------------------------------
DECREASE (909,463) $ (4,392,294) (428,645) $ (2,042,882)
- ------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- ------------------------------------------------------------------------------------------------------------------
SHARES SOLD 262,470 $ 1,292,387 202,583 $ 971,606
REINVESTMENT OF DISTRIBUTIONS 12,271 59,826 10,502 50,532
SHARES REACQUIRED (131,233) (643,551) (107,063) (511,602)
- ------------------------------------------------------------------------------------------------------------------
INCREASE 143,508 $ 708,662 106,022 $ 510,536
- ------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
FOR THE PERIOD ENDED
INSURED SEPTEMBER 30, 2003*
- ----------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT
- ----------------------------------------------------------------------------------
SHARES SOLD 368,851 $ 3,663,501
REINVESTMENT OF DISTRIBUTIONS 1,182 11,397
SHARES REACQUIRED (534) (5,208)
- ----------------------------------------------------------------------------------
INCREASE 369,499 $ 3,669,690
- ----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CLASS B SHARES SHARES AMOUNT
- ----------------------------------------------------------------------------------
SHARES SOLD 31,393 $ 307,348
REINVESTMENT OF DISTRIBUTIONS 4 38
SHARES REACQUIRED - -
- ----------------------------------------------------------------------------------
INCREASE 31,397 $ 307,386
- ----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CLASS C SHARES SHARES AMOUNT
- ----------------------------------------------------------------------------------
SHARES SOLD 31,544 $ 309,785
REINVESTMENT OF DISTRIBUTIONS 32 307
SHARES REACQUIRED - -
- ----------------------------------------------------------------------------------
INCREASE 31,576 $ 310,092
- ----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CLASS P SHARES SHARES AMOUNT
- ----------------------------------------------------------------------------------
SHARES SOLD 1,000 $ 10,000
REINVESTMENT OF DISTRIBUTIONS 4 42
SHARES REACQUIRED - -
- ----------------------------------------------------------------------------------
INCREASE 1,004 $ 10,042
- ----------------------------------------------------------------------------------
</Table>
* For the period June 23, 2003 (commencement of investment operations) to
September 30, 2003.
The majority of the outstanding capital shares of Insured are held by Lord
Abbett and partners and employees of Lord Abbett.
141
<Page>
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
LORD ABBETT TAX-FREE INCOME FUND, INC.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Lord Abbett Tax-Free Income Fund, Inc. (the
"Fund"), comprising Lord Abbett National Tax-Free Income Fund, Lord Abbett
California Tax-Free Income Fund, Lord Abbett Connecticut Tax-Free Income Fund,
Lord Abbett Hawaii Tax-Free Income Fund, Lord Abbett Minnesota Tax-Free Income
Fund, Lord Abbett Missouri Tax-Free Income Fund, Lord Abbett New Jersey Tax-Free
Income Fund, Lord Abbett New York Tax-Free Income Fund, Lord Abbett Texas
Tax-Free Income Fund, and Lord Abbett Washington Tax-Free Income Fund, as of
September 30, 2003, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 2003 by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the portfolios constituting Lord Abbett Tax-Free Income Fund, Inc., as of
September 30, 2003, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and the financial highlights for each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the United
States of America.
/s/ Deloitte & Touche LLP
New York, New York
November 18, 2003
142
<Page>
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS,
LORD ABBETT TAX-FREE INCOME TRUST:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Lord Abbett Tax-Free Income Trust (the
"Trust"), comprising Florida Series, Georgia Series, Michigan Series,
Pennsylvania Series and Lord Abbett Insured Intermediate Tax-Free Fund, as of
September 30, 2003, and the related statements of operations, the statements of
changes in net assets and the financial highlights for each of the periods
presented. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 2003 by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the portfolios constituting Lord Abbett Tax-Free Income Trust as of September
30, 2003, the results of their operations, the changes in their net assets, and
the financial highlights for each of the periods presented, in conformity with
accounting principles generally accepted in the United States of America.
/s/ Deloitte & Touche LLP
New York, New York
November 18, 2003
143
<Page>
BASIC INFORMATION ABOUT MANAGEMENT
The Company's Board of Directors and the Trust's Board of Trustees are
responsible for the management of the business and affairs of the Company and
Trust in accordance with the laws of the States of Maryland and Delaware. Each
Board appoints officers who are responsible for the day-to-day operations of the
Company and Trust and who execute policies authorized by the Boards. Each Board
also approves an investment adviser to the Company and the Trust and continues
to monitor the cost and quality of the services provided by the investment
adviser, and annually considers whether to renew the contract with the adviser.
Lord, Abbett & Co. LLC ("Lord Abbett"), a Delaware limited liability company, is
the investment adviser of the Company and Trust.
The following Director/Trustee is the Managing Partner of Lord Abbett and is an
"interested person" as defined in the Act. Mr. Dow is also an officer, director,
or trustee of each of the fourteen Lord Abbett-sponsored funds, which consist of
48 portfolios or series.
<Table>
<Caption>
CURRENT POSITION
LENGTH OF SERVICE
NAME, ADDRESS AND WITH COMPANY PRINCIPAL OCCUPATION OTHER
DATE OF BIRTH AND TRUST DURING PAST FIVE YEARS DIRECTORSHIPS
- ---------------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Director since 1989; Managing Partner and Chief N/A
Lord, Abbett & Co. LLC Trustee since 1991 Investment Officer of Lord
90 Hudson Street and Chairman since Abbett since 1996.
Jersey City, NJ 1996
Date of Birth: 3/8/1945
</Table>
-----------------
The following outside Directors/Trustees are also directors or trustees of each
of the fourteen Lord Abbett-sponsored funds, which consist of 48 portfolios or
series.
<Table>
<Caption>
CURRENT POSITION
LENGTH OF SERVICE
NAME, ADDRESS AND WITH COMPANY PRINCIPAL OCCUPATION OTHER
DATE OF BIRTH AND TRUST DURING PAST FIVE YEARS DIRECTORSHIPS
- ---------------------------------------------------------------------------------------------------------------------
E. THAYER BIGELOW Director/Trustee since Managing General Currently serves as
Bigelow Media, LLC 1994 Partner, Bigelow director of Adelphia
41 Madison Ave., Media, LLC (since Communications Inc.,
Suite 3810 2000); Senior Adviser, Crane Co. and Huttig
New York, NY Time Warner Inc. (1998 Building Products Inc.
Date of Birth: 10/22/1941 - 2000); Acting Chief
Executive Officer of
Courtroom Television
Network (1997 - 1998);
President and Chief
Executive Officer of
Time Warner Cable
Programming, Inc.
(1991 - 1997).
WILLIAM H.T. BUSH Director/Trustee since Co-founder and Currently serves as
Bush-O'Donnell & Co., Inc. 1998 Chairman of the Board director of Wellpoint
101 South Hanley Road of the financial Health Network, Inc.,
Suite 1250 advisory firm of DT Industries Inc.,
St. Louis, MO Bush-O'Donnell & and Engineered Support
Date of Birth: 7/14/1938 Company (since 1986). Systems, Inc.
</Table>
144
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
<Table>
<Caption>
CURRENT POSITION
LENGTH OF SERVICE
NAME, ADDRESS AND WITH COMPANY PRINCIPAL OCCUPATION OTHER
DATE OF BIRTH AND TRUST DURING PAST FIVE YEARS DIRECTORSHIPS
- ---------------------------------------------------------------------------------------------------------------------
ROBERT B. CALHOUN, JR. Director/Trustee since Managing Director of Currently serves as
Monitor Clipper Partners 1998 Monitor Clipper director of Avondale,
650 Madison Ave., 9th Fl. Partners (since 1997) Inc. and Interstate
New York, NY and President of Bakeries Corp.
Date of Birth: 10/25/1942 Clipper Asset
Management Corp.
(since 1991), both
private equity
investment funds.
STEWART S. DIXON Director/Trustee Partner in the law N/A
Wildman, Harrold, Allen & Dixon since 1976, retired firm of Wildman,
225 W. Wacker Drive, Suite 2800 12/31/2002 Harrold, Allen & Dixon
Chicago, IL (since 1967).
Date of Birth: 11/5/1930
FRANKLIN W. HOBBS Director/Trustee since Senior Advisor (since Currently serves as
Houlihan Lokey 2000 April 2003) and Former director of Adolph
Howard & Zukin Chief Executive Coors Company.
685 Third Ave. Officer of Houlihan
New York, NY Lokey Howard & Zukin,
Date of Birth: 7/30/1947 an investment bank
(January 2002 - April
2003); Chairman of
Warburg Dillon Read
(1999 - 2001); Global
Head of Corporate
Finance of SBC Warburg
Dillon Read (1997 -
1999); Chief Executive
Officer of Dillon,
Read & Co. (1994 -
1997).
C. ALAN MACDONALD Director/Trustee since Retired - General Currently serves as
415 Round Hill Road 1988 Business and director of
Greenwich, CT Governance Consulting Fountainhead Water
Date of Birth: 5/19/1933 (since 1992); formerly Company, Lincoln
President and CEO of Snacks, H.J. Baker,
Nestle Foods. and Seix Fund, Inc.*
THOMAS J. NEFF Director/Trustee since Chairman of Spencer Currently serves as
Spencer Stuart 1982 Stuart, an executive director of Ace, Ltd.
277 Park Avenue search consulting firm and Exult, Inc.
New York, NY (since 1996);
Date of Birth: 10/2/1937 President of Spencer
Stuart (1979-1996).
</Table>
145
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
<Table>
<Caption>
CURRENT POSITION
LENGTH OF SERVICE
NAME, ADDRESS AND WITH COMPANY PRINCIPAL OCCUPATION OTHER
DATE OF BIRTH AND TRUST DURING PAST FIVE YEARS DIRECTORSHIPS
- ---------------------------------------------------------------------------------------------------------------------
JAMES F. ORR, III Director/Trustee President and CEO of Currently serves as
80 Pinckney Street since 2002; retired LandingPoint Capital Chairman of
Boston, MA 3/3/2003 (since 2002); Chairman Rockefeller
Date of Birth: 3/5/1943 and CEO of United Foundation, Director
Asset Management of Nashua Corp. and
Corporation (2000 to SteelPoint
2001); Chairman and Technologies.
CEO of UNUM Provident
Corporation (1999 -
merger); Chairman and
CEO of UNUM
Corporation (1988 -
1999).
</Table>
- ----------
* Seix Fund, Inc. is a registered investment company that is advised by Seix
Investment Advisors Inc. Seix Investment Advisors Inc.'s Chairman, CEO, and
Chief Investment Officer is married to Robert Dow, the Company's and Trust's
Chairman, CEO, and President and the Managing Partner of Lord Abbett.
----------
None of the officers listed below have received compensation from the Company or
Trust. All the officers of the Company and Trust may also be officers of the
other Lord Abbett-sponsored funds and maintain offices at 90 Hudson Street,
Jersey City, New Jersey 07302.
<Table>
<Caption>
CURRENT POSITION LENGTH OF PRINCIPAL OCCUPATION
NAME, AND WITH COMPANY SERVICE OF DURING PAST
(DATE OF BIRTH) AND TRUST CURRENT POSITION FIVE YEARS
- ---------------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Chairman, CEO and Elected in 1996 Managing Partner and
(3/8/1945) President Chief Investment
Officer of Lord Abbett
since 1996.
RICHARD D. SMOLA Executive Vice Elected in 2003 Partner and Investment
(10/27/1956) President Manager, joined Lord
Abbett in 1991.
TRACIE E. AHERN Vice President and Elected in 1999 Partner and Director
(1/12/1968) Treasurer of Portfolio
Accounting and
Operations, joined
Lord Abbett in 1999,
prior thereto Vice
President - Head of
Fund Administration of
Morgan Grenfell.
JOAN A. BINSTOCK Chief Financial Elected in 1999 Partner and Chief
(3/4/1954) Officer and Vice Operations Officer,
President joined Lord Abbett in
1999, prior thereto
Chief Operating
Officer of Morgan
Grenfell.
LINA BRANDOW Vice President Elected in 2002 Municipal Research
(8/18/1959) Analyst, joined Lord
Abbett in 1998,
formerly Senior Vice
President and
Municipal Analyst at
Lehman Brothers.
</Table>
146
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
<Table>
<Caption>
CURRENT POSITION LENGTH OF PRINCIPAL OCCUPATION
NAME, AND WITH COMPANY SERVICE OF DURING PAST
(DATE OF BIRTH) AND TRUST CURRENT POSITION FIVE YEARS
- ---------------------------------------------------------------------------------------------------------------------
DANIEL E. CARPER Vice President Elected in 1998 Partner, joined
(1/22/1952) (Company) Lord Abbett in 1979.
1991 (Trust)
PHILIP P. FANG Vice President Elected in 1994 Investment Manager,
(6/19/1965) joined Lord Abbett in
1991.
PAUL A. HILSTAD Vice President and Elected in 1995 Partner and General
(12/13/1942) Secretary Counsel, joined Lord
Abbett in 1995.
LAWRENCE H. KAPLAN Vice President and Elected in 1997 Partner and Deputy
(1/16/1957) Assistant Secretary General Counsel,
joined Lord Abbett in
1997.
A. EDWARD OBERHAUS, III Vice President Elected in 1996 Partner and Manager of
(12/21/1959) Equity Trading, joined
Lord Abbett in 1983.
CHRISTINA T. SIMMONS Vice President and Elected in 2000 Assistant General
(11/12/1957) Assistant Secretary Counsel, joined Lord
Abbett in 1999,
formerly Assistant
General Counsel of
Prudential Investments
from 1998 to 1999,
prior thereto Counsel
of Drinker, Biddle &
Reath LLP, a law firm.
BERNARD J. GRZELAK Assistant Treasurer Elected in 2003 Director of Fund
(6/12/1971) Administration, joined
Lord Abbett in 2003,
formerly Vice
President, Lazard
Asset Management from
2000 to 2003, prior
thereto Manager of
Deloitte & Touche LLP.
PETER SCOTT SMITH Vice President Elected in 2000 Investment Manager,
(9/15/1966) joined Lord Abbett in
1992.
</Table>
Please call 1-888-522-2388 for a copy of the Statement of Additional Information
(SAI), which contains further information about the Company's Directors and the
Trust's Trustees. It is available free upon request.
147
<Page>
HOUSEHOLDING
The Company and Trust have adopted a policy that allows them to send only one
copy of the Funds' Prospectus, proxy material, annual report and semi-annual
report to certain shareholders residing at the same "household." This reduces
Fund expenses, which benefits you and other shareholders. If you need additional
copies or do not want your mailings to be "householded," please call Lord Abbett
at 800-821-5129 or send a written request with your name, the name of your fund
or funds and your account number or numbers to Lord Abbett Family of Funds, P.O.
Box 219100, Kansas City, MO 64121.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that Lord Abbett uses to vote
proxies relating to the Funds' portfolio securities is available without charge,
upon request, by calling 888-522-2388 or on Lord Abbett's web site at
www.LordAbbett.com.
148
<Page>
[LORD ABBETT(R) LOGO]
<Table>
Lord Abbett Tax-Free Income Fund Inc.
Lord Abbett National Tax-Free Income Fund
Lord Abbett California Tax-Free Income Fund
Lord Abbett Connecticut Tax-Free Income Fund
Lord Abbett Hawaii Tax-Free Income Fund
Lord Abbett Minnesota Tax-Free Income Fund
Lord Abbett Missouri Tax-Free Income Fund
Lord Abbett New Jersey Tax-Free Income Fund
Lord Abbett New York Tax-Free Income Fund
Lord Abbett Texas Tax-Free Income Fund
Lord Abbett Washington Tax-Free Income Fund
This report when not used for the general Lord Abbett Tax-Free Income Trust
information of shareholders of the Fund, is to Lord Abbett Insured Intermediate Tax-Free Fund
be distributed only if preceded or accompanied Florida Series
by a current Fund Prospectus. Georgia Series
Michigan Series
Lord Abbett Mutual Fund shares are distributed by: Pennsylvania Series
LORD ABBETT DISTRIBUTOR LLC
90 Hudson Street - Jersey City, New Jersey 07302-3973
</Table>
LATFI-2-903
(11/03)
<Page>
ITEM 2: Code of Ethics.
(a) In accordance with applicable requirements, the Registrant
adopted a Sarbanes-Oxley Code of Ethics on June 19, 2003 that
applies to the principal executive officer and senior financial
officers of the Registrant ("Code of Ethics"). The Code of
Ethics was in effect from June 19, 2003 through the end of the
reporting period on September 30, 2003 (the "Period").
(b) Not applicable.
(c) The Registrant has not amended the Code of Ethics as described
in Form N-CSR during the Period.
(d) The Registrant has not granted any waiver, including an
implicit waiver, from a provision of the Code of Ethics as
described in Form N-CSR during the Period.
(e) Not applicable.
(f) See Item 10(a) concerning the filing of the Code of Ethics.
ITEM 3: Audit Committee Financial Expert.
The Registrant's Board of Directors has determined that each of
the independent Trustees who comprise the audit committee are
audit committee financial experts. The members of the audit
committee are E. Thayer Bigelow, Robert B. Calhoun, and
Franklin W. Hobbs. Each audit committee member is independent
within the meaning of the Form N-CSR.
ITEM 4: Principal Accountant Fees and Services.
Not applicable.
ITEM 5: Audit Committee of Listed Registrants
Not applicable.
ITEM 6: [Reserved]
ITEM 7: Disclosure of Proxy Voting Policies and Procedures for
Closed-End Management Investment Companies.
Not applicable.
<Page>
ITEM 8: [Reserved]
ITEM 9: Controls and Procedures.
(a) Based on their evaluation of the Registrant's disclosure
controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940) as of November 18, 2003, the
Chief Executive Officer and Chief Financial Officer of the
Registrant have concluded that such disclosure controls and
procedures are reasonably designed and effective to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to them by others
within those entities.
(b) There were no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the
Investment Company Act of 1940) that occurred during the
Registrant's last fiscal half-year that have materially
affected, or are reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
ITEM 10: Exhibits.
ITEM 10(a): Code of Ethics, as required by Item 2, is attached hereto as
part of EX-99.CODEETH.
ITEM 10(b):
(i) Certification of each principal executive officer and principal
financial officer of the Registrant as required by
Rule 30a-2(a) under the Act (17 CFR 270.30a-2) is attached
hereto as a part of EX-99.CERT.
(ii) Certification of each principal executive officer and principal
financial officer of the Registrant as required by Section 906
of the Sarbanes-Oxley Act of 2002 is attached hereto as a part
of EX-99.906CERT.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities and 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.
LORD ABBETT TAX-FREE INCOME
FUND, INC.
/s/ Robert S. Dow
-----------------
Robert S. Dow
Chief Executive Officer,
Chairman and President
/s/ Joan A. Binstock
--------------------
Joan A. Binstock
Chief Financial Officer and Vice President
Date: November 18, 2003
<Page>
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
LORD ABBETT TAX-FREE INCOME
FUND, INC.
/s/ Robert S. Dow
-----------------
Robert S. Dow
Chief Executive Officer,
Chairman and President
/s/ Joan A. Binstock
--------------------
Joan A. Binstock
Chief Financial Officer and Vice President
Date: November 18, 2003