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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act File Number 811-03942
LORD ABBETT MUNICIPAL INCOME FUND, INC.;
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(Exact name of Registrant as specified in charter)
90 Hudson Street, Jersey City, NJ 07302
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(Address of principal executive offices) (zip code)
Christina T. Simmons, Vice President & Assistant Secretary
90 Hudson Street, Jersey City, NJ 07302
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(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 201-6984
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Date of fiscal year end: 9/30
Date of reporting period: September 30, 2005
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ITEM 1: REPORT TO SHAREHOLDERS.
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[LORD ABBETT LOGO]
2005
ANNUAL
REPORT
LORD ABBETT
MUNICIPAL INCOME FUND
MUNICIPAL 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
HIGH YIELD MUNICIPAL BOND FUND
MICHIGAN TAX-FREE TRUST
PENNSYLVANIA TAX-FREE TRUST
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005
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LORD ABBETT MUNICIPAL INCOME FUND AND
LORD ABBETT MUNICIPAL INCOME TRUST
ANNUAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005
DEAR SHAREHOLDERS: We are pleased to provide you with this overview of the
strategies and performance of each fund of Lord Abbett Municipal Income Fund and
Lord Abbett Municipal Income Trust (formerly known as Lord Abbett Tax-Free
Income Fund and Lord Abbett Tax-Free Income Trust, respectively) for the fiscal
year ended September 30, 2005. On this and the following pages, we discuss the
major factors that influenced performance.
On January 3, 2005, we began to publicly offer our first high-yield product
in the municipal bond market: Lord Abbett High Yield Municipal Bond Fund. With
the addition of this fund, Lord Abbett now has broad capabilities in the
municipal bond area - high quality, high yield, long-term maturity, intermediate
maturity, and individual state funds - that provide shareholders with the
opportunity to diversify the municipal bond portion of their portfolios or focus
in one area, as they wish.
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 OVERALL MARKET CONDITIONS DURING THE FISCAL YEAR ENDED
SEPTEMBER 30, 2005?
A: The Federal Reserve Board (the Fed) continued to increase the fed funds rate
at a measured pace, bringing the key rate to 3.75 percent by period-end. The Fed
has raised the fed funds rate 11 times since June 2004. (The fed funds rate is
the rate charged by the Fed to banks needing overnight loans to meet reserve
requirements.)
Interest rates moved higher across the maturity spectrum - from short-term
bonds to long-term bonds - but the bulk of the movement was in short-term rates.
In bond market terms, the yield curve (a graphic picture of short-term interest
rates versus long-term rates) "flattened," which means the difference between
the yields of short-term bonds and those of long-term bonds diminished.
During the period, short-term bond prices fell (prices move inversely to
yield), resulting in weaker performance at the short end versus the long end of
the maturity curve. In general, long-term bonds outperformed intermediate
maturity bonds, which in turn outperformed short-term bonds. Also
1
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providing strong performance in the period were high-yield municipal bonds,
which generally outperformed higher-quality issues, reflecting investors'
continued search for yield in an environment of still relatively low interest
rates.
Supply in the municipal bond market was robust, as municipalities rushed to
refund older, more expensive debt (in terms of interest paid) at lower cost. The
Fed's continued rate hikes provided incentive to lock in the relatively low
rates while they lasted. The numbers tell the story: for the calendar year
through August 30, 2005, refunding issuance was up 62.1 percent over the similar
2004 period; supply overall (refundings plus new issues) was running 3.8 percent
above calendar 2003's record issuance.
More than 60 percent of the bonds issued in calendar 2005 (as of August 30,
2005) carried insurance. The popularity of insured bonds has been growing in
recent years, as leveraged buyers, largely hedge funds, seek the increased
liquidity that an insured bond can provide as well as protection against credit
risk. In calendar 2000, only 39.5 percent of new issues were insured.
State fiscal health improved during the fiscal year, reflecting increases
in tax revenues. The 46 states beginning their fiscal year 2006 on July 1, 2005,
reported combined surplus balances of $35.7 billion. In fiscal 2001, revenue
shortfalls totaled $235 billion. Reflecting this trend, Standard & Poor's
upgraded California general obligation (GO) bonds from BBB to A. Moody's
current rating for California GOs is A2. Spreads remained tight, reflecting a
perception of lower risk in the municipal market.
Investor demand was largely concentrated at the long end - maturities of 22
years or longer - and in the high-yield market, where yields were more
attractive relative to those available in the short-term market. In the
high-yield market, however, demand far outstripped supply, as a $2 billion
refunding of New Jersey tobacco bonds expected for third quarter calendar 2005
was held up in the courts. Inflows into high-yield municipal bond funds were
strong, as investors continued to search for yield.
In the high-yield municipal bond market, the automotive and airline sectors
suffered in the second and third calendar quarters, reflecting a host of issues,
some of which affected each in common - such as higher energy costs and
unfavorable labor negotiations - and others that were unique to either industry.
In the airline industry, Delta and Northwest (neither of which was held in Lord
Abbett High Yield Municipal Bond Fund's portfolio) filed for bankruptcy
protection in third quarter calendar 2005, causing a ripple effect in bonds
throughout the industry. Meanwhile, the U.S. auto industry in general continues
to feel the heat of competition from Japanese automakers. The High Yield
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Municipal Bond portfolio has a modest exposure (less than 2% of portfolio
weighting) to the auto sector.
In general, high-yield municipal bond investors enter the automotive sector
through tax-free pollution control revenue bonds, which provide the necessary
funding for manufacturing and production plants to meet Environmental Protection
Agency air- and water-quality standards. In the case of airlines, special
facility bonds issued by state authorities provide the funding vehicle for this
sector in the municipal market.
Q: HOW DID EACH FUND PERFORM OVER THE FISCAL YEAR ENDED SEPTEMBER 30, 2005?
A: Each fund's Class A shares (other than those of Lord Abbett Insured
Intermediate Tax-Free Fund and Lord Abbett High Yield Municipal Bond Fund, which
are benchmarked against different indexes) underperformed their long-only
benchmark, the Lehman Brothers Municipal Long Current Coupon Bond(1) Index,
while exhibiting, for the most part, more favorable performance against their
peer groups, as represented by the Lipper Funds Average.(2)
LORD ABBETT INSURED INTERMEDIATE TAX-FREE FUND (Class A shares)
underperformed its benchmark, the Lehman Brothers 3-10 Year Insured Tax-Exempt
Bond(3) Index, and its peer group, as represented by the Lipper Funds Average.
Since inception on December 30, 2004, and through September 30, 2005, LORD
ABBETT HIGH YIELD MUNICIPAL BOND FUND outperformed its benchmark, the Lehman
Brothers Municipal Bond 50-50 Investment Grade/High Yield(4) Index, and its peer
group, as represented by the Lipper Funds Average.
MUNICIPAL INCOME PERFORMANCE SUMMARY
<Table>
<Caption>
CLASS A SHARES LEHMAN BROTHERS LEHMAN BROTHERS
@NAV 9/30/05 LIPPER FUNDS MUNICIPAL LONG CURRENT MUNICIPAL
1 YEAR RETURN AVERAGE(2) COUPON BOND(1) INDEX BOND(5) INDEX
-------------- ------------ ---------------------- ---------------
NATIONAL TAX-FREE FUND 4.53% 3.49% 8.58% 4.05%
CALIFORNIA TAX-FREE FUND 4.88% 4.52% 8.58% 4.05%
CONNECTICUT TAX-FREE FUND 3.74% 3.00% 8.58% 4.05%
HAWAII TAX-FREE FUND 3.28% 2.46% 8.58% 4.05%
MINNESOTA TAX-FREE FUND 4.74% 3.57% 8.58% 4.05%
MISSOURI TAX-FREE FUND 4.26% 3.53% 8.58% 4.05%
NEW JERSEY TAX-FREE FUND 4.42% 4.05% 8.58% 4.05%
NEW YORK TAX-FREE FUND 3.43% 3.65% 8.58% 4.05%
TEXAS TAX-FREE FUND 3.35% 2.99% 8.58% 4.05%
WASHINGTON TAX-FREE FUND 4.24% 2.73% 8.58% 4.05%
INSURED INTERMEDIATE TAX-FREE FUND 1.36% 2.91% 1.86%+ 4.05%
FLORIDA TAX-FREE TRUST 3.48% 3.74% 8.58% 4.05%
GEORGIA TAX-FREE TRUST 4.24% 2.83% 8.58% 4.05%
HIGH YIELD MUNICIPAL BOND FUND 5.79%* 4.78%** 4.51%++** 2.77%**
MICHIGAN TAX-FREE TRUST 3.60% 2.92% 8.58% 4.05%
PENNSYLVANIA TAX-FREE TRUST 4.57% 3.85% 8.58% 4.05%
</Table>
*SEC effective date December 30, 2004.
**Calculated for the period beginning December 31, 2004.
+Lehman Brothers 3-10 Year Insured Tax-Exempt Bond Index.
++Lehman Brothers Municipal Bond 50-50 Investment Grade/High Yield Index.
The Lipper Funds Average for each fund consists of "Municipal Debt Funds"
for the particular state involved, except for the National Tax-Free Fund,
Washington Tax-Free Fund, and Insured Intermediate Tax-Free Fund. In the case of
those funds, the applicable Lipper Funds Averages are "General Municipal Debt
Funds," "Other States Municipal Debt Funds," and "Insured Municipal Debt Funds,"
respectively.
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STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
10 YEARS/
1 YEAR 5 YEARS SINCE INCEPTION
------ ------- ---------------
NATIONAL TAX-FREE FUND 1.10% 5.33% 5.24%
CALIFORNIA TAX-FREE FUND 1.51% 5.10% 5.03%
CONNECTICUT TAX-FREE FUND 0.33% 5.47% 5.08%
HAWAII TAX-FREE FUND -0.06% 4.67% 4.75%
MINNESOTA TAX-FREE FUND 1.39% 5.60% 5.17%
MISSOURI TAX-FREE FUND 0.86% 5.25% 4.99%
NEW JERSEY TAX-FREE FUND 1.10% 4.84% 4.93%
NEW YORK TAX-FREE FUND 0.10% 5.48% 5.13%
TEXAS TAX-FREE FUND -0.05% 5.47% 5.04%
WASHINGTON TAX-FREE FUND 0.91% 5.35% 5.30%
INSURED INTERMEDIATE TAX-FREE FUND* -1.89% N/A 0.43%
FLORIDA TAX-FREE TRUST 0.16% 4.88% 4.52%
GEORGIA TAX-FREE TRUST 0.85% 6.03% 6.04%
HIGH YIELD MUNICIPAL BOND FUND** N/A N/A 2.35%
MICHIGAN TAX-FREE TRUST 0.21% 5.66% 5.45%
PENNSYLVANIA TAX-FREE TRUST 1.12% 5.52% 5.31%
</Table>
*SEC effective date June 30, 2003.
**SEC effective date December 30, 2004.
*Standardized average annual total returns, as of September 30, 2005, which
reflect performance at the maximum 3.25 percent sales charge applicable to
Class A share investments returns include the reinvestment of all
distributions.
Class A shares purchased subject to a front-end sales charge have no
contingent deferred sales charge (CDSC). However, certain purchases of Class A
shares made without a front-end sales charge may be subject to a CDSC of 1
percent if the shares are redeemed within 12 months of the purchase.
PERFORMANCE DATA QUOTED REFLECT PAST PERFORMANCE AND ARE NO GUARANTEE OF FUTURE
RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE QUOTED.
THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN EACH FUND WILL
FLUCTUATE SO THAT SHARES, ON ANY GIVEN DAY OR WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. YOU CAN OBTAIN PERFORMANCE DATA CURRENT TO THE
MOST RECENT MONTH-END BY CALLING LORD ABBETT AT 800-821-5129 OR REFERRING TO OUR
WEBSITE AT www.LordAbbett.com.
Q: WHAT WERE THE MOST SIGNIFICANT FACTORS AFFECTING PERFORMANCE?
A: In general, each fund reflected the major trends of the municipal market in
the period, with performance in long-term bonds (maturities of 22 years or
longer) outperforming intermediate-term and short-term bonds, and
intermediate-term bonds outperforming short-term bonds. Revenue bonds
outperformed GOs, reflecting the improved revenue position of most states.
(Revenue bonds are bonds that depend on specific revenues collected - such as
tolls and electric rates - for repayment, while GOs are repaid through the full
faith and credit or taxing power of
4
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the municipality.) Insured bonds also added to performance.
Positions in the high-quality investment-grade segment of the market hurt
performance somewhat as lower-quality assets outperformed during the period.
Also detracting from performance were small positions in short-maturity bonds, a
largely defensive strategy.
The same factors, both those that contributed positively to performance and
those that detracted from performance, were also applicable in the case of Lord
Abbett High Yield Municipal Bond Fund. Following are other factors more specific
to the high-yield municipal market.
Contributing significantly to performance in Lord Abbett High Yield
Municipal Bond Fund were the portfolio's positions in tobacco bonds and in the
securities of continuing care retirement communities, as favorable court rulings
in the former and strong demographics in the latter supported prices. Also
adding to performance were the portfolio's holdings in tax increment financing
bonds. Typically, these bonds are issued to finance basic infrastructure needs
of land under development for commercial or residential use. The tax revenues
derived from the developed property are then used to pay off the bondholders.
Sometimes called "special assessment financing," this type of tax-free bond is
most prevalent in Florida, Arizona, and California. The portfolio has exposure
in all three states. The portfolio's modest exposure to correctional facility
bonds and certain utility bonds also contributed to performance.
Pollution control revenue bonds in general - including those issued to
finance improved air quality standards in so-called "smokestack" or basic
industries, distributors, paper companies, and even some electric utilities -
made a strong contribution to the performance of Lord Abbett High Yield
Municipal Bond Fund. Basic industries benefited from the underlying strength in
the economy, which provided support for the prices of their bonds.
Detracting from performance in Lord Abbett High Yield Municipal Bond Fund
were the portfolio's holdings in airline bonds. The bankruptcy filings of Delta
and Northwest dampened sentiment in the sector overall, although the portfolio
itself did not hold the bonds of either carrier. The portfolio's modest exposure
to the auto sector also detracted from performance.
Strong fund inflows were temporarily invested in investment-grade bonds, as
the portfolio manager sought out appropriate high-yield securities from a broad
spectrum of new issues. (Under normal market conditions, the fund's portfolio
holds up to 50-70 percent of its assets in bonds rated investment-grade or
below.) As interest rates rose, the prices of these investment-grade bonds
deteriorated faster than those of riskier credits, detracting from fund
performance.
5
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EACH FUND'S PORTFOLIO IS ACTIVELY MANAGED AND, THEREFORE, ITS HOLDINGS AND
THE WEIGHTINGS OF A PARTICULAR ISSUER OR PARTICULAR SECTOR AS A PERCENTAGE OF
PORTFOLIO ASSETS ARE SUBJECT TO CHANGE.
A PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT A FUND, INCLUDING ITS
INVESTMENT OBJECTIVES, RISKS, CHARGES, AND ONGOING EXPENSES, WHICH AN INVESTOR
SHOULD CAREFULLY CONSIDER BEFORE INVESTING. TO OBTAIN A PROSPECTUS OF ANY LORD
ABBETT MUTUAL FUND, PLEASE CONTACT YOUR INVESTMENT PROFESSIONAL OR LORD ABBETT
DISTRIBUTOR LLC AT 800-874-3733 OR VISIT OUR WEBSITE AT www.LordAbbett.com. READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
(1) Lehman Brothers Municipal Long Current Coupon Bond Index is a total return
benchmark designed for long-term municipal assets. The index includes bonds with
a minimum credit rating of BAA3, bonds issued as part of a deal of at least $50
million, with an amount outstanding of at least $5 million, a maturity of 22
years or longer, and have been issued after December 31, 1990.
(2) Lipper Funds Average: Lipper, Inc. is a nationally recognized organization
that reports on mutual fund total return performance and calculates fund
rankings. Peer averages are based on universes of funds with similar investment
objectives. Peer group averages include reinvested dividends and capital gains,
if any, and exclude sales charges. (Copyright(C) 2005 by Reuters. All rights
reserved. Any copying, republication, or redistribution of Lipper content is
expressly prohibited without the prior written consent of Lipper.) An investor
cannot invest directly in an average.
(3) The Lehman Brothers 3-10 Year Insured Tax-Exempt Bond Index consists of
insured tax-free municipal bonds ranging in maturity from 3-10 years.
(4) The Lehman Brothers Municipal Bond 50-50 Investment Grade/High Yield Index
is a total return benchmark designed for municipal portfolios which contain both
investment and non-investment-grade tax-exempt bonds. The index contains an
equal weighting of the Lehman Brothers Municipal Bond Index and the Lehman
Brothers Municipal Non-Investment Grade Index.
(5) The Lehman Brothers Municipal Bond Index is a broad measure of the municipal
bond market with maturities of at least one year. To be included in this index,
bonds must have a minimum credit rating of at least Baa, an outstanding par
value of at least $3 million, and be issued as part of a transaction of at least
$50 million. The Index includes both zero coupon bonds and bonds subject to the
Alternative Minimum Tax.
Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are
not available for direct investment.
IMPORTANT PERFORMANCE AND OTHER INFORMATION
The views of each fund's management and the portfolio holdings described in this
report are as of September 30, 2005; these views and holdings may have changed
subsequent to this date, and they do not guarantee the future performance of the
markets or the funds. 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
each fund, please see the prospectus.
PERFORMANCE DATA QUOTED ABOVE ARE HISTORICAL. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE
PERFORMANCE DATA QUOTED. Because of ongoing market volatility, each fund's
performance may be subject to substantial fluctuation. Except where noted,
comparative fund performance does not account for the deduction of sales
charges, and would be different if sales charges were included. Each fund offers
additional classes of shares with distinct pricing options. For a full
description of the differences in pricing alternatives, please see the
prospectus.
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.
6
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NATIONAL TAX-FREE FUND
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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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER GENERAL
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,631 $ 10,285 $ 10,604 $ 10,688 $ 10,977
9/30/1997 $ 11,620 $ 11,242 $ 11,560 $ 11,647 $ 11,598
9/30/1998 $ 12,734 $ 12,320 $ 12,567 $ 12,828 $ 12,605
9/30/1999 $ 12,244 $ 11,846 $ 12,479 $ 12,387 $ 13,641
9/30/2000 $ 12,858 $ 12,440 $ 13,249 $ 12,999 $ 13,225
9/30/2001 $ 14,229 $ 13,767 $ 14,627 $ 14,282 $ 13,847
9/30/2002 $ 15,449 $ 14,946 $ 15,934 $ 15,543 $ 15,173
9/30/2003 $ 15,832 $ 15,317 $ 16,553 $ 15,907 $ 16,325
9/30/2004 $ 16,481 $ 15,945 $ 17,315 $ 16,871 $ 16,798
9/30/2005 $ 17,227 $ 16,667 $ 18,016 $ 18,318 $ 17,385
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS LIFE OF CLASS
CLASS A(4) 1.10% 5.33% 5.24% --
CLASS B(5) -0.17% 5.18% -- 4.93%
CLASS C(6) 3.93% 5.36% -- 5.01%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes is not necessarily representative of the Fund's
performance.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
(5) Class B shares were first offered on August 1, 1996. 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) Class C shares were first offered on July 15, 1996. The 1% CDSC for Class C
shares normally applies before the first anniversary of the purchase date.
Performance is at net asset value.
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CALIFORNIA TAX-FREE FUND
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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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER CALIFORNIA
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,547 $ 10,204 $ 10,604 $ 10,688 $ 10,674
9/30/1997 $ 11,432 $ 11,060 $ 11,560 $ 11,647 $ 11,631
9/30/1998 $ 12,445 $ 12,040 $ 12,567 $ 12,828 $ 12,662
9/30/1999 $ 11,935 $ 11,547 $ 12,479 $ 12,387 $ 12,291
9/30/2000 $ 12,725 $ 12,311 $ 13,249 $ 12,999 $ 13,060
9/30/2001 $ 14,138 $ 13,679 $ 14,627 $ 14,282 $ 14,270
9/30/2002 $ 15,220 $ 14,725 $ 15,934 $ 15,543 $ 15,350
9/30/2003 $ 15,363 $ 14,864 $ 16,553 $ 15,907 $ 15,596
9/30/2004 $ 16,090 $ 15,567 $ 17,315 $ 16,871 $ 16,319
9/30/2005 $ 16,875 $ 16,326 $ 18,016 $ 18,318 $ 17,057
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS LIFE OF CLASS
CLASS A(4) 1.51% 5.10% 5.03% --
CLASS C(5) 4.20% 5.16% -- 4.87%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
(5) Class C shares were first offered on July 15, 1996. The 1% CDSC for Class C
shares normally applies before the first anniversary of the purchase date.
Performance is at net asset value.
8
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CONNECTICUT TAX-FREE FUND
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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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER CONNECTICUTT
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,570 $ 10,226 $ 10,604 $ 10,688 $ 10,538
9/30/1997 $ 11,475 $ 11,102 $ 11,560 $ 11,647 $ 11,417
9/30/1998 $ 12,429 $ 12,026 $ 12,567 $ 12,828 $ 12,333
9/30/1999 $ 12,052 $ 11,660 $ 12,479 $ 12,387 $ 12,088
9/30/2000 $ 12,572 $ 12,164 $ 13,249 $ 12,999 $ 12,661
9/30/2001 $ 13,914 $ 13,462 $ 14,627 $ 14,282 $ 13,902
9/30/2002 $ 15,137 $ 14,645 $ 15,934 $ 15,543 $ 15,018
9/30/2003 $ 15,583 $ 15,077 $ 16,553 $ 15,907 $ 15,434
9/30/2004 $ 16,350 $ 15,819 $ 17,315 $ 16,871 $ 15,996
9/30/2005 $ 16,961 $ 16,410 $ 18,016 $ 18,318 $ 16,476
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
CLASS A(4) 0.33% 5.47% 5.08%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
9
<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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER HAWAII
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,593 $ 10,249 $ 10,604 $ 10,688 $ 10,581
9/30/1997 $ 11,485 $ 11,112 $ 11,560 $ 11,647 $ 11,433
9/30/1998 $ 12,471 $ 12,066 $ 12,567 $ 12,828 $ 12,328
9/30/1999 $ 12,059 $ 11,667 $ 12,479 $ 12,387 $ 12,039
9/30/2000 $ 12,654 $ 12,243 $ 13,249 $ 12,999 $ 12,622
9/30/2001 $ 13,781 $ 13,333 $ 14,627 $ 14,282 $ 13,845
9/30/2002 $ 14,991 $ 14,503 $ 15,934 $ 15,543 $ 14,968
9/30/2003 $ 15,269 $ 14,773 $ 16,553 $ 15,907 $ 15,458
9/30/2004 $ 15,908 $ 15,391 $ 17,315 $ 16,871 $ 16,039
9/30/2005 $ 16,429 $ 15,895 $ 18,016 $ 18,318 $ 16,433
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
CLASS A(4) -0.06% 4.67% 4.75%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
10
<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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER MINNESOTA
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,444 $ 10,105 $ 10,604 $ 10,688 $ 10,517
9/30/1997 $ 11,381 $ 11,011 $ 11,560 $ 11,647 $ 11,346
9/30/1998 $ 12,305 $ 11,905 $ 12,567 $ 12,828 $ 12,233
9/30/1999 $ 11,970 $ 11,581 $ 12,479 $ 12,387 $ 11,964
9/30/2000 $ 12,607 $ 12,197 $ 13,249 $ 12,999 $ 12,459
9/30/2001 $ 13,941 $ 13,488 $ 14,627 $ 14,282 $ 13,583
9/30/2002 $ 15,134 $ 14,642 $ 15,934 $ 15,543 $ 14,595
9/30/2003 $ 15,675 $ 15,165 $ 16,553 $ 15,907 $ 15,082
9/30/2004 $ 16,339 $ 15,808 $ 17,315 $ 16,871 $ 15,705
9/30/2005 $ 17,114 $ 16,557 $ 18,016 $ 18,318 $ 16,266
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
CLASS A(4) 1.39% 5.60% 5.17%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
11
<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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER MISSOURI
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,554 $ 10,211 $ 10,604 $ 10,688 $ 10,566
9/30/1997 $ 11,422 $ 11,050 $ 11,560 $ 11,647 $ 11,441
9/30/1998 $ 12,308 $ 11,908 $ 12,567 $ 12,828 $ 12,342
9/30/1999 $ 12,031 $ 11,640 $ 12,479 $ 12,387 $ 12,036
9/30/2000 $ 12,587 $ 12,178 $ 13,249 $ 12,999 $ 12,594
9/30/2001 $ 13,988 $ 13,533 $ 14,627 $ 14,282 $ 13,852
9/30/2002 $ 15,061 $ 14,571 $ 15,934 $ 15,543 $ 14,934
9/30/2003 $ 15,539 $ 15,034 $ 16,553 $ 15,907 $ 15,379
9/30/2004 $ 16,125 $ 15,601 $ 17,315 $ 16,871 $ 15,948
9/30/2005 $ 16,812 $ 16,266 $ 18,016 $ 18,318 $ 16,510
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
CLASS A(4) 0.86% 5.25% 4.99%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
12
<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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER NEW JERSEY
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,629 $ 10,284 $ 10,604 $ 10,688 $ 10,544
9/30/1997 $ 11,506 $ 11,132 $ 11,560 $ 11,647 $ 11,408
9/30/1998 $ 12,579 $ 12,171 $ 12,567 $ 12,828 $ 12,330
9/30/1999 $ 12,110 $ 11,717 $ 12,479 $ 12,387 $ 12,031
9/30/2000 $ 12,753 $ 12,339 $ 13,249 $ 12,999 $ 12,566
9/30/2001 $ 14,082 $ 13,624 $ 14,627 $ 14,282 $ 13,750
9/30/2002 $ 15,203 $ 14,709 $ 15,934 $ 15,543 $ 14,752
9/30/2003 $ 15,402 $ 14,902 $ 16,553 $ 15,907 $ 15,185
9/30/2004 $ 16,001 $ 15,481 $ 17,315 $ 16,871 $ 15,772
9/30/2005 $ 16,709 $ 16,166 $ 18,016 $ 18,318 $ 16,411
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
CLASS A(4) 1.10% 4.84% 4.93%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
13
<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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER NEW YORK
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,488 $ 10,147 $ 10,604 $ 10,688 $ 10,570
9/30/1997 $ 11,327 $ 10,959 $ 11,560 $ 11,647 $ 11,474
9/30/1998 $ 12,350 $ 11,949 $ 12,567 $ 12,828 $ 12,440
9/30/1999 $ 11,951 $ 11,563 $ 12,479 $ 12,387 $ 12,059
9/30/2000 $ 12,626 $ 12,216 $ 13,249 $ 12,999 $ 12,680
9/30/2001 $ 14,061 $ 13,604 $ 14,627 $ 14,282 $ 13,937
9/30/2002 $ 15,396 $ 14,896 $ 15,934 $ 15,543 $ 15,074
9/30/2003 $ 15,789 $ 15,276 $ 16,553 $ 15,907 $ 15,489
9/30/2004 $ 16,473 $ 15,937 $ 17,315 $ 16,871 $ 16,099
9/30/2005 $ 17,038 $ 16,484 $ 18,016 $ 18,318 $ 16,686
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS INCEPTION
CLASS A(4) 0.10% 5.48% 5.13% --
CLASS C(5) 2.87% 5.53% -- 5.03%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
(5) Class C shares were first offered on July 15, 1996. 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>
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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER TEXAS
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,610 $ 10,265 $ 10,604 $ 10,688 $ 10,628
9/30/1997 $ 11,591 $ 11,215 $ 11,560 $ 11,647 $ 11,553
9/30/1998 $ 12,662 $ 12,251 $ 12,567 $ 12,828 $ 12,518
9/30/1999 $ 12,034 $ 11,643 $ 12,479 $ 12,387 $ 12,075
9/30/2000 $ 12,533 $ 12,125 $ 13,249 $ 12,999 $ 12,499
9/30/2001 $ 13,950 $ 13,497 $ 14,627 $ 14,282 $ 13,698
9/30/2002 $ 15,282 $ 14,786 $ 15,934 $ 15,543 $ 14,758
9/30/2003 $ 15,790 $ 15,277 $ 16,553 $ 15,907 $ 15,267
9/30/2004 $ 16,361 $ 15,830 $ 17,315 $ 16,871 $ 15,789
9/30/2005 $ 16,909 $ 16,360 $ 18,016 $ 18,318 $ 16,261
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
1 YEAR 5 YEARS 10 YEARS
CLASS A(4) -0.05% 5.47% 5.04%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
15
<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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER OTHER STATES
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,680 $ 10,333 $ 10,604 $ 10,688 $ 10,576
9/30/1997 $ 11,729 $ 11,348 $ 11,560 $ 11,647 $ 11,421
9/30/1998 $ 12,841 $ 12,423 $ 12,567 $ 12,828 $ 12,310
9/30/1999 $ 12,305 $ 11,905 $ 12,479 $ 12,387 $ 12,028
9/30/2000 $ 12,908 $ 12,489 $ 13,249 $ 12,999 $ 12,582
9/30/2001 $ 14,319 $ 13,854 $ 14,627 $ 14,282 $ 13,733
9/30/2002 $ 15,566 $ 15,060 $ 15,934 $ 15,543 $ 14,740
9/30/2003 $ 15,994 $ 15,474 $ 16,553 $ 15,907 $ 15,092
9/30/2004 $ 16,594 $ 16,055 $ 17,315 $ 16,871 $ 15,606
9/30/2005 $ 17,298 $ 16,735 $ 18,016 $ 18,318 $ 16,032
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
CLASS A(4) 0.91% 5.35% 5.30%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
16
<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
Brothers 3-10 Year Insured Tax-Exempt Bond Index, assuming reinvestment of all
dividends and distributions. 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 BROTHERS 3-10 YR LIPPER INSURED
(CLASS A SHARES) AT MAXIMUM INSURED TAX-EXEMPT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) BOND INDEX(2) FUNDS AVERAGE(3)
7/1/2003 $ 10,000 $ 9,675 $ 10,000 $ 10,000
9/30/2003 $ 10,027 $ 9,701 $ 10,055 $ 9,978
12/31/2003 $ 10,126 $ 9,797 $ 10,134 $ 10,094
3/31/2004 $ 10,242 $ 9,909 $ 10,263 $ 10,218
6/30/2004 $ 10,013 $ 9,688 $ 10,038 $ 9,948
9/30/2004 $ 10,312 $ 9,977 $ 10,378 $ 10,318
12/31/2004 $ 10,358 $ 10,021 $ 10,452 $ 10,417
3/31/2005 $ 10,267 $ 9,933 $ 10,356 $ 10,368
6/30/2005 $ 10,497 $ 10,156 $ 10,601 $ 10,670
9/30/2005 $ 10,453 $ 10,113 $ 10,570 $ 10,618
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR LIFE OF CLASS
CLASS A(4) -1.89% 0.43%
CLASS B(5) -3.39% -0.11%
CLASS C(6) 0.61% 1.16%
CLASS P(7) 1.16% 1.74%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes is not necessarily representative of the Fund's
performance.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return. The Class A share inception date is June 30, 2003.
(5) Class B shares were first offered on June 30, 2003. Performance reflects the
deduction of a CDSC of 4% for 1 year and 3% for the life of the Class.
(6) Class C shares were first offered on June 30, 2003. The 1% CDSC for Class C
shares normally applies before the first anniversary of the purchase date.
Performance is at net asset value.
(7) Class P shares were first offered on June 30, 2003. Performance is at net
asset value.
17
<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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER FLORIDA
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,496 $ 10,155 $ 10,604 $ 10,688 $ 10,575
9/30/1997 $ 11,294 $ 10,927 $ 11,560 $ 11,647 $ 11,431
9/30/1998 $ 12,219 $ 11,822 $ 12,567 $ 12,828 $ 12,375
9/30/1999 $ 11,774 $ 11,391 $ 12,479 $ 12,387 $ 12,024
9/30/2000 $ 12,272 $ 11,873 $ 13,249 $ 12,999 $ 12,593
9/30/2001 $ 13,584 $ 13,142 $ 14,627 $ 14,282 $ 13,797
9/30/2002 $ 14,684 $ 14,207 $ 15,934 $ 15,543 $ 14,813
9/30/2003 $ 15,069 $ 14,579 $ 16,553 $ 15,907 $ 15,223
9/30/2004 $ 15,540 $ 15,035 $ 17,315 $ 16,871 $ 15,789
9/30/2005 $ 16,081 $ 15,559 $ 18,016 $ 18,318 $ 16,380
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS LIFE OF CLASS
CLASS A(4) 0.16% 4.88% 4.52% --
CLASS C(5) 2.65% 4.83% -- 4.33%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect
any fees or expenses. The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
(5) Class C shares were first offered on July 15, 1996. The 1% CDSC for Class C
shares normally applies before the first anniversary of the purchase date.
Performance is at net asset value.
18
<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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER GEORGIA
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,734 $ 10,385 $ 10,604 $ 10,688 $ 10,594
9/30/1997 $ 11,779 $ 11,397 $ 11,560 $ 11,647 $ 11,543
9/30/1998 $ 13,009 $ 12,586 $ 12,567 $ 12,828 $ 12,514
9/30/1999 $ 12,577 $ 12,169 $ 12,479 $ 12,387 $ 12,121
9/30/2000 $ 13,420 $ 12,984 $ 13,249 $ 12,999 $ 12,749
9/30/2001 $ 15,126 $ 14,634 $ 14,627 $ 14,282 $ 13,982
9/30/2002 $ 16,528 $ 15,991 $ 15,934 $ 15,543 $ 15,095
9/30/2003 $ 17,058 $ 16,504 $ 16,553 $ 15,907 $ 15,537
9/30/2004 $ 17,833 $ 17,253 $ 17,315 $ 16,871 $ 16,034
9/30/2005 $ 18,589 $ 17,985 $ 18,016 $ 18,318 $ 16,488
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
CLASS A(4) 0.85% 6.03% 6.04%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
19
<Page>
HIGH YIELD MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares to the same
investment in the Lehman Brothers Municipal Bond 50-50 Investment Grade/High
Yield Index, the Lehman Brothers Municipal Bond Index, and the Lipper High Yield
Municipal Debt Funds Average, assuming reinvestment of all dividends and
distributions. 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 BROTHERS MUNICIPAL LIPPER HIGH YIELD
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS BOND 50-50 INVESTMENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) GRADE/HIGH YIELD INDEX(2) FUNDS AVERAGE(3)
12/30/2004 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
12/31/2004 $ 10,016 $ 9,690 $ 10,010
1/31/2005 $ 10,178 $ 9,847 $ 10,103 $ 10,106 $ 10,095
2/28/2005 $ 10,210 $ 9,878 $ 10,070 $ 10,122 $ 10,125
3/31/2005 $ 10,190 $ 9,859 $ 10,006 $ 10,093 $ 10,113
4/30/2005 $ 10,343 $ 10,007 $ 10,164 $ 10,275 $ 10,249
5/31/2005 $ 10,425 $ 10,086 $ 10,237 $ 10,371 $ 10,337
6/30/2005 $ 10,549 $ 10,206 $ 10,300 $ 10,462 $ 10,423
7/31/2005 $ 10,569 $ 10,226 $ 10,254 $ 10,466 $ 10,453
8/31/2005 $ 10,710 $ 10,362 $ 10,357 $ 10,553 $ 10,547
9/30/2005 $ 10,580 $ 10,236 $ 10,278 $ 10,451 $ 10,479
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
LIFE OF CLASS
CLASS A(4) 2.35%
CLASS B(5) 0.80%
CLASS C(6) 4.79%
CLASS P(7) 5.86%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes is not necessarily representative of the Fund's
performance. Indexes and average are calculated from December 31, 2004 to
September 30, 2005.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using SEC required uniform method to compute total return.
The Class A inception date is December 30, 2004.
(5) Class B shares were first offered on December 30, 2004. Performance reflects
the deduction of a CDSC of 5% for the life of Class.
(6) Class C shares were first offered on December 30, 2004. Performance reflects
a 1% CDSC for Class C shares for life of Class.
(7) Class P shares were first offered on December 30, 2004. Performance is at
net asset value.
20
<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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER MICHIGAN
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,575 $ 10,231 $ 10,604 $ 10,688 $ 10,572
9/30/1997 $ 11,518 $ 11,144 $ 11,560 $ 11,647 $ 11,438
9/30/1998 $ 12,517 $ 12,110 $ 12,567 $ 12,828 $ 12,362
9/30/1999 $ 12,154 $ 11,759 $ 12,479 $ 12,387 $ 12,051
9/30/2000 $ 12,915 $ 12,495 $ 13,249 $ 12,999 $ 12,634
9/30/2001 $ 14,493 $ 14,022 $ 14,627 $ 14,282 $ 13,853
9/30/2002 $ 15,880 $ 15,364 $ 15,934 $ 15,543 $ 14,936
9/30/2003 $ 16,382 $ 15,849 $ 16,553 $ 15,907 $ 15,362
9/30/2004 $ 16,952 $ 16,401 $ 17,315 $ 16,871 $ 15,884
9/30/2005 $ 17,562 $ 16,991 $ 18,016 $ 18,318 $ 16,348
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
CLASS A(4) 0.21% 5.66% 5.45%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
21
<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
Brothers Municipal Bond Index, and the Lehman Brothers Municipal Long Current
Coupon Bond Index, assuming reinvestment of all dividends and distributions. 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 BROTHERS LIPPER PENNSYLVANIA
(CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS MUNICIPAL LONG CURRENT MUNICIPAL DEBT
AT NET ASSET VALUE OFFERING PRICE(1) MUNICIPAL BOND INDEX(2) COUPON BOND INDEX(2) FUNDS AVERAGE(3)
10/1/1995 $ 10,000 $ 9,675 $ 10,000 $ 10,000 $ 10,000
9/30/1996 $ 10,590 $ 10,246 $ 10,604 $ 10,688 $ 10,586
9/30/1997 $ 11,526 $ 11,152 $ 11,560 $ 11,647 $ 11,468
9/30/1998 $ 12,585 $ 12,176 $ 12,567 $ 12,828 $ 12,367
9/30/1999 $ 12,222 $ 11,824 $ 12,479 $ 12,387 $ 12,019
9/30/2000 $ 12,847 $ 12,430 $ 13,249 $ 12,999 $ 12,546
9/30/2001 $ 14,270 $ 13,806 $ 14,627 $ 14,282 $ 13,741
9/30/2002 $ 15,493 $ 14,989 $ 15,934 $ 15,543 $ 14,800
9/30/2003 $ 15,883 $ 15,367 $ 16,553 $ 15,907 $ 15,248
9/30/2004 $ 16,595 $ 16,055 $ 17,315 $ 16,871 $ 15,814
9/30/2005 $ 17,353 $ 16,789 $ 18,016 $ 18,318 $ 16,422
</Table>
AVERAGE ANNUAL TOTAL RETURNS AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
CLASS A(4) 1.12% 5.52% 5.31%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 3.25%.
(2) Performance for each unmanaged index does not reflect any fees or expenses.
The performance of the indexes 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.
(3) Source: Lipper, Inc.
(4) 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,
2005, is calculated using the SEC required uniform method to compute total
return.
22
<Page>
- --------------------------------------------------------------------------------
EXPENSE EXAMPLE
As a shareholder of a Fund, you incur two types of costs: (1) transaction
costs, including sales charges on purchase payments (these charges vary among
the share classes); and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees (these charges vary among the share
classes; also, certain Funds do not yet have effective Rule 12b-1 plans under
which distribution and service fees are paid); and other Fund expenses. This
Example is intended to help you understand your ongoing costs (in dollars) of
investing in each Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning
of the period and held for the entire period (April 1, 2005 through September
30, 2005).
ACTUAL EXPENSES
For each class of each Fund, the first line of the applicable table on the
following pages provides information about actual account values and actual
expenses. You may use the information in this line, together with the amount you
invested, to estimate the expenses that you paid over the period. Simply divide
your account value by $1,000 (for example, an $8,600 account value divided by
$1,000 = 8.6), then multiply the result by the number in the first line under
the heading entitled "Expenses Paid During the Period 4/1/05 - 9/30/05" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
For each class of each Fund, the second line of the applicable table on the
following pages provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use this information to compare the ongoing costs of investing in each Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
23
<Page>
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,028.70 $ 4.68
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.46 $ 4.66
CLASS B
Actual $ 1,000.00 $ 1,025.30 $ 7.97
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.20 $ 7.94
CLASS C
Actual $ 1,000.00 $ 1,025.40 $ 7.97
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.20 $ 7.94
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (0.92% for Class A, and 1.57% for Classes B and C)
multiplied by the average account value over the period, multiplied by
183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 59.99%
AA+ 8.67%
Aa1 0.40%
AA 5.53%
Aa2 1.21%
AA- 3.90%
Aa3 2.14%
A+ 3.47%
A 5.89%
A- 0.74%
A3 0.95%
BBB+ 3.90%
Baa1 0.27%
BBB 1.46%
Short-Term Investments 1.48%
Total 100.00%
</Table>
* Represents percent of total investments.
24
<Page>
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,030.70 $ 4.78
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.36 $ 4.76
CLASS C
Actual $ 1,000.00 $ 1,027.40 $ 8.08
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.10 $ 8.04
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (0.94% for Class A, and 1.59% for Class C) multiplied
by the average account value over the period, multiplied by 183/365 (to
reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 76.71%
AA 0.88%
AA- 0.36%
Aa3 0.88%
A+ 1.72%
A1 2.09%
A 2.50%
A- 2.46%
A3 0.29%
BBB+ 3.45%
BBB 1.68%
Baa3 1.86%
SP-1+ 2.21%
Not Rated 0.93%
Short-Term Investment 1.98%
Total 100.00%
</Table>
* Represents percent of total investments.
25
<Page>
CONNECTICUT TAX-FREE FUND
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,025.00 $ 3.71
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,021.41 $ 3.70
</Table>
+ Expenses are equal to the Fund's annualized expense ratio of 0.73%
multiplied by the average account value over the period, multiplied by
183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 66.44%
AA+ 1.14%
Aa1 0.12%
AA 8.70%
AA- 0.48%
Aa3 5.70%
A+ 3.76%
A 0.80%
A2 3.19%
A- 1.15%
BBB+ 2.32%
BBB 5.07%
BBB- 1.13%
Short-Term Investment 0.00%(a)
Total 100.00%
</Table>
* Represents percent of total investments.
(a) Amount is less than 0.01%.
26
<Page>
HAWAII TAX-FREE FUND
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,022.50 $ 4.82
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.31 $ 4.81
</Table>
+ Expenses are equal to the Fund's annualized expense ratio of 0.95%
multiplied by the average account value over the period, multiplied by
183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 78.38%
AA 1.38%
Aa2 1.52%
AA- 1.42%
A- 2.15%
BBB+ 13.24%
BBB 1.91%
Total 100.00%
</Table>
* Represents percent of total investments.
27
<Page>
MINNESOTA TAX-FREE FUND
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,027.50 $ 3.61
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,021.51 $ 3.60
</Table>
+ Expenses are equal to the Fund's annualized expense ratio of 0.71%
multiplied by the average account value over the period, multiplied by
183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 66.82%
AA+ 8.49%
AA 3.13%
Aa2 0.24%
Aa3 0.63%
A+ 0.47%
A 0.95%
A2 2.96%
A3 5.02%
A- 7.26%
BBB+ 1.30%
Baa1 2.12%
Baa2 0.61%
Total 100.00%
</Table>
* Represents percent of total investments.
28
<Page>
MISSOURI TAX-FREE FUND
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,027.90 $ 3.35
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,021.76 $ 3.34
</Table>
+ Expenses are equal to the Fund's annualized expense ratio of 0.66%
multiplied by the average account value over the period, multiplied by
183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 71.72%
AA+ 6.24%
AA 8.47%
AA- 0.90%
A+ 0.64%
A2 0.72%
A- 3.82%
BBB+ 5.11%
BBB 2.38%
Total 100.00%
</Table>
* Represents percent of total investments.
29
<Page>
NEW JERSEY TAX-FREE FUND
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,027.80 $ 4.83
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.31 $ 4.81
</Table>
+ Expenses are equal to the Fund's annualized expense ratio of 0.95%
multiplied by the average account value over the period, multiplied by
183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AA 75.82%
AA+ 1.53%
Aa1 2.50%
AA 4.00%
AA- 2.62%
A+ 0.80%
A 5.46%
A2 0.32%
A- 0.76%
BBB+ 3.65%
Baa1 1.49%
BBB 0.96%
Short-Term Investment 0.09%
Total 100.00%
</Table>
* Represents percent of total investments.
30
<Page>
NEW YORK TAX-FREE FUND
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,024.80 $ 3.15
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,021.96 $ 3.14
CLASS C
Actual $ 1,000.00 $ 1,021.70 $ 6.49
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.65 $ 6.48
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (0.62% for Class A and 1.28% for Class C) multiplied by
the average account value over the period, multiplied by 183/365 (to reflect
one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 41.97%
AA+ 5.68%
Aa1 0.03%
AA 5.73%
Aa2 1.60%
AA- 11.88%
A+ 11.81%
A 1.20%
A- 1.94%
A3 0.11%
BBB+ 8.47%
BBB 6.40%
BBB- 0.31%
Ba2 0.44%
Not Rated 1.38%
Short-Term Investment 1.05%
Total 100.00%
</Table>
* Represents percent of total investments.
31
<Page>
TEXAS TAX-FREE FUND
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,021.70 $ 4.81
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.31 $ 4.81
</Table>
+ Expenses are equal to the Fund's annualized expense ratio of 0.95%
multiplied by the average account value over the period, multiplied by
183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 60.32%
AA+ 10.68%
Aa1 10.62%
AA 1.35%
AA- 1.47%
A+ 5.42%
A 2.57%
BBB+ 4.44%
BBB 2.40%
Not Rated 0.73%
Short-Term Investment 0.00%(a)
Total 100.00%
</Table>
* Represents percent of total investments.
(a) Amount is less than 0.01%.
32
<Page>
WASHINGTON TAX-FREE FUND
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,025.00 $ 3.35
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,021.76 $ 3.34
</Table>
+ Expenses are equal to the Fund's annualized expense ratio of 0.66%
multiplied by the average account value over the period, multiplied by
183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 77.10%
AA+ 2.29%
AA 3.44%
A- 3.22%
A3 0.84%
BBB+ 7.39%
BBB 2.19%
Baa3 1.59%
Short-Term Investment 1.94%
Total 100.00%
</Table>
* Represents percent of total investments.
33
<Page>
INSURED INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,018.10 $ 1.26
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,023.82 $ 1.27
CLASS B
Actual $ 1,000.00 $ 1,013.80 $ 5.05
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.05 $ 5.06
CLASS C
Actual $ 1,000.00 $ 1,013.80 $ 5.05
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.05 $ 5.06
CLASS P
Actual $ 1,000.00 $ 1,017.10 $ 2.28
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,022.81 $ 2.28
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (0.25% for Class A, 1.00% for Classes B and C, and
0.45% for Class P) multiplied by the average account value over the period,
multiplied by 183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 99.41%
Short-Term Investments 0.59%
Total 100.00%
</Table>
* Represents percent of total investments.
34
<Page>
FLORIDA TAX-FREE TRUST
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,023.70 $ 3.71
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,021.41 $ 3.70
CLASS C
Actual $ 1,000.00 $ 1,020.70 $ 6.74
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.40 $ 6.73
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (0.73% for Class A, and 1.33% for Class C) multiplied
by the average account value over the period, multiplied by 183/365 (to
reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 79.86%
AA 0.63%
AA- 2.91%
A+ 8.26%
A1 0.32%
A 1.45%
BBB+ 4.39%
BBB 1.78%
Short-Term Investment 0.40%
Total 100.00%
</Table>
* Represents percent of total investments.
35
<Page>
GEORGIA TAX-FREE TRUST
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,025.60 $ 3.10
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,022.01 $ 3.09
</Table>
+ Expenses are equal to the Fund's annualized expense ratio of 0.61%
multiplied by the average account value over the period, multiplied by
183/365 (to reflect one-half year period).
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 56.64%
AA+ 2.24%
AA 13.54%
AA- 0.63%
Aa3 1.44%
A1 1.05%
A 1.01%
A2 1.04%
A- 2.84%
A3 2.22%
BBB+ 13.65%
Baa1 0.53%
BBB 3.07%
Not Rated 0.10%
Total 100.00%
</Table>
* Represents percent of total investments.
36
<Page>
HIGH YIELD MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,038.30 $ --
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,025.07 $ --
CLASS B
Actual $ 1,000.00 $ 1,038.30 $ --
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,025.07 $ --
CLASS C
Actual $ 1,000.00 $ 1,038.30 $ --
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,025.07 $ --
CLASS P
Actual $ 1,000.00 $ 1,038.90 $ --
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,025.07 $ --
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (0.00% for Classes A, B, C, and P) multiplied by the
average account value over the period, multiplied by 183/365 (to reflect
one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 13.71%
AA+ 0.25%
Aa1 0.57%
AA 0.35%
Aa2 3.04%
AA- 0.58%
Aa3 0.13%
A+ 3.61%
A1 0.58%
A 0.84%
A- 4.70%
A3 2.35%
BBB+ 2.98%
Baa1 1.23%
BBB 16.18%
Baa2 0.06%
BBB- 2.67%
Baa3 1.27%
BB+ 6.31%
Ba1 1.99%
BB 2.95%
Ba2 0.57%
BB- 0.50%
B1 0.25%
B 1.88%
B2 1.21%
B- 0.23%
CCC 1.10%
Not Rated 27.91%
Short-Term Investments 0.00%(a)
Total 100.00%
</Table>
* Represents percent of total investments.
(a) Amount is less than 0.01%.
37
<Page>
MICHIGAN TAX-FREE TRUST
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,024.70 $ 3.20
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,021.91 $ 3.19
</Table>
+ Expenses are equal to the Fund's annualized expense ratio of 0.63%
multiplied by the average account value over the period, multiplied by
183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 86.70%
AA+ 1.43%
AA 7.06%
BBB+ 4.81%
Total 100.00%
</Table>
* Represents percent of total investments.
38
<Page>
PENNSYLVANIA TAX-FREE TRUST
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE THE PERIOD+
----- ----- -----------
4/1/05 -
4/1/05 9/30/05 9/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 1,026.50 $ 4.47
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.66 $ 4.46
</Table>
+ Expenses are equal to the Fund's annualized expense ratio of 0.88%
multiplied by the average account value over the period, multiplied by
183/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY CREDIT RATING
SEPTEMBER 30, 2005
CREDIT RATING:
<Table>
<Caption>
S&P OR MOODY'S %*
AAA 69.85%
AA 5.94%
AA- 1.61%
Aa3 1.28%
A1 2.70%
A 2.61%
A- 1.12%
BBB+ 10.24%
BBB 4.65%
Total 100.00%
</Table>
* Represents percent of total investments.
39
<Page>
SCHEDULE OF INVESTMENTS
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 100.51%
EDUCATION 12.66%
Allegheny Cnty PA Higher Ed
Bldg Auth Carnegie Mellon Univ 5.125% 3/1/2032 AA- $ 2,000 $ 2,093,740
CA Edl Facs Auth Rev Univ South
CA Ser A 5.00% 10/1/2033 AA+ 10,000 10,444,100
DE St Econ Dev Auth Rev DE
Tech Pk Univ DE Pj(2) 6.00% 2/1/2021 AAA 900 999,900
Dist of Columbia Rev James F
Oyster Elem Sch Pilot(1) 6.25% 11/1/2021 A 450 484,479
Glendale AZ Ind Dev Auth
Midwestern Univ Ser A 5.75% 5/15/2021 A- 1,000 1,093,560
Glendale AZ Ind Dev Auth
Midwestern Univ Ser A 5.875% 5/15/2031 A- 1,000 1,078,350
LA St Univ & Agric & Mech
College Hlth Sciences Ctr Pj(16) 6.375% 5/1/2031 AAA 2,290 2,565,831
Los Angeles CA Unif Sch Dist Ser A(16) 5.00% 1/1/2028 AAA 12,950 13,575,356
MA St Dev Fin Agy Rev Boston
Univ Ser P 5.375% 5/15/2039 A3 1,000 1,090,550
MA St Dev Fin Agy Rev Boston
Univ Ser P 6.00% 5/15/2059 A3 1,000 1,181,480
MA St Hlth & Edl Facs Auth Rev
Boston College Ser N(15)(16) 5.125% 6/1/2033 AAA 3,810 4,005,377
Milledgeville-Baldwin Cnty GA Fndtn
GA St College & St Univ 6.00% 9/1/2033 BBB 3,000 3,194,790
NY St Dorm Auth Rev Fashion
Inst Tech(12) 5.50% 7/1/2030 AAA 400 432,920
OR St Hlth Hsg Ed & Cul Facs
Auth Reed College Pj Ser A 5.75% 7/1/2032 AA- 3,800 4,124,292
TN St Sch Bd Auth Higher Edl Facs
Ser A(12) 5.125% 5/1/2021 AAA 615 654,255
Tulsa OK Ind Auth Rev Ser A(16) 5.375% 10/1/2020 Aaa 3,170 3,430,859
Univ Central AR Rev Hsg Sys(12) 6.50% 1/1/2031 AAA 2,425 2,750,993
Univ MA Bldg Auth Sen Comwlth
Ser 4-A(16) 5.125% 11/1/2034 AAA 5,000 5,291,600
Univ NC Sys Pool Rev Ser A(2) 5.00% 4/1/2027 AAA 1,800 1,888,650
Univ NC Univ Rev Gen 5.00% 12/1/2028 AA+ 2,015 2,119,558
Univ VA Univ Rev Residuals
Ser 856 RIBs 6.99% 6/1/2019 Aaa 1,925 2,194,885
Univ VA Univ Rev Residuals
Ser 856 RIBs 6.99% 6/1/2020 Aaa 2,022 2,297,762
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
40
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Univ VA Univ Rev Residuals
Ser 856 RIBs 6.99% 6/1/2021 Aaa $ 2,122 $ 2,411,372
Univ VT & St Agric College VT(2) 5.125% 10/1/2037 AAA 1,150 1,206,741
WV Univ Rev Univ Sys WV Pj
Ser A(2) Zero Coupon 4/1/2024 AAA 2,880 1,215,619
WV Univ Rev Univ Sys WV Pj Ser A(2) Zero Coupon 4/1/2026 AAA 800 302,704
--------------
TOTAL 72,129,723
--------------
GENERAL OBLIGATION 12.77%
Bessemer AL School Warrants(2) 5.60% 2/1/2030 Aaa 2,000 2,176,120
CA St 5.10% 2/1/2034 A 4,655 4,790,647
CA St 5.25% 4/1/2034 A 7,500 7,947,525
CA St Rep 5.25% 2/1/2029 A 10,000 10,610,100
Campbell CA Union Sch Dist
Election 2002 Ser B(11) 5.50% 8/1/2033 AAA 5,000 5,504,150
Cook Cnty IL Cap Impt Ser B(16) 5.00% 11/15/2029 AAA 5,000 5,230,600
Delaware Vly PA Regl Fin Auth
Loc Govt Rev Ser C(2) 7.75% 7/1/2027 AAA 1,000 1,417,650
Fairfield OH City Sch Dist
Ref Sch Impt(11) 5.375% 12/1/2020 AAA 1,410 1,549,463
Foothill-De Anza CA Cmnty
College Dist Cap Apprec(16) Zero Coupon 8/1/2030 AAA 4,505 1,351,410
Jefferson Cnty AL Sch Warrants(12) 5.50% 2/15/2020 AAA 1,000 1,072,250
Lake Orion MI Cmnty Sch Dist Ser B 5.25% 5/1/2025 AA 4,900 5,171,901
Linn Cnty OR Sch Dist No 55
Unrefunded Bal(12) 5.50% 6/15/2025 AAA 310 337,237
Marion OH City Sch Dist Sch
Fac Constr & Impt(12) 5.625% 12/1/2022 AAA 500 548,170
New York NY Ser K 5.00% 8/1/2023 A+ 4,140 4,332,758
New York NY Unrefunded
Bal Ser A 6.00% 5/15/2030 A+ 240 264,898
OR St Alternate Energy Pj Ser A AMT 5.00% 1/1/2015 AA- 1,315 1,354,897
OR St Alternate Energy Pj Ser A AMT 5.05% 1/1/2016 AA- 1,795 1,857,681
OR St Alternate Energy Pj Ser A AMT 5.10% 1/1/2017 AA- 980 1,013,888
Powell OH(11) 5.50% 12/1/2032 AAA 1,280 1,393,395
Richland Cnty SC 5.375% 3/1/2030 AA 1,140 1,236,524
Richland Cnty SC 5.375% 3/1/2031 AA 1,195 1,293,803
Richland Cnty SC 5.375% 3/1/2032 AA 1,255 1,356,266
Richland Cnty SC 5.375% 3/1/2033 AA 1,320 1,424,755
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
41
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Richmond VA(12) 5.50% 1/15/2018 AAA $ 500 $ 546,380
Sunnyvale TX Sch Dist Sch
Bldg PSF GTD 5.25% 2/15/2028 AAA 1,000 1,068,250
Sunnyvale TX Sch Dist Sch
Bldg PSF GTD 5.25% 2/15/2031 AAA 1,100 1,174,272
Washtenaw Cnty MI Multi Lake
Santn Swr Sys Sylvan Twp Wtr(16) 4.75% 5/1/2021 AAA 700 716,576
Whitehall MI Dist Sch 5.50% 5/1/2019 AA 1,400 1,516,886
Wood Cnty OH Pub Libr Impt(16) 5.875% 12/1/2022 Aaa 1,000 1,127,550
WV St Ser D(11) 6.50% 11/1/2026 AAA 2,000 2,465,400
Wyandotte Cnty KS Sch 204
Bonner Springs Ser A(12) 5.60% 9/1/2020 Aaa 855 925,640
--------------
TOTAL 72,777,042
--------------
HEALTHCARE 16.21%
Abag Fin Auth for Nonprofit
Corp CA Woods Oblig COP(1) 6.20% 11/1/2029 A 1,000 1,068,610
AZ Hlth Fac Auth Rev AZ
Hlthcare Pooled Fin C(11) 5.50% 6/1/2014 Aaa 1,130 1,266,967
CA Statewide Cmntys Dev Auth
Rev Daughters of Charity Hlth A 5.25% 7/1/2035 BBB+ 5,000 5,161,250
Chatham Cnty GA Hosp Auth Rev
Hosp Impt Mem Hlth Univ A 5.50% 1/1/2034 A- 1,990 2,111,509
Clackamas Cnty OR Hosp Fac
Legacy Hlth Sys(15)(16) 5.00% 2/15/2015 AAA 1,600 1,692,752
Clackamas Cnty OR Hosp Fac
Legacy Hlth Sys(15)(16) 5.00% 2/15/2016 AAA 1,000 1,052,790
CO Hlth Fac Auth Rev Catholic Hlth 5.25% 9/1/2024 AA 5,065 5,294,596
CO Hlth Fac Auth Rev Hosp
Poudre Vly Hlthcare F 5.00% 3/1/2025 BBB+ 5,560 5,630,501
CT St Hlth & Edl Facs Auth
Rev Kent Sch Ser D(16) 4.375% 7/1/2023 Aaa 350 350,641
Erie Cnty OH Hosp Facs Rev
Firelands Regl Med Ctr Ser A 5.50% 8/15/2022 A 1,000 1,056,720
Fargo ND Hlth Sys Rev
Meritcare Oblig Grp A(16) 5.375% 6/1/2027 AAA 1,000 1,048,410
Hamilton Cnty OH Hosp Facs
Cincinnati Childrens Hosp J(11) 5.25% 5/15/2034 AAA 3,395 3,589,839
Harris Cnty TX Hlth Fac Mem
Hermann Hlthcare Ser A 6.375% 6/1/2029 A 2,500 2,768,175
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
42
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2005
<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 $ 2,992,138
Highlands Cnty FL Fac Auth
Rev Hosp Adventist Hlth Ser D(d) 5.00%# 11/15/2035 A+ 5,500 5,613,520
IL Fin Auth Rev Northwestern
Mem Hosp Ser A 5.25% 8/15/2034 AA+ 10,000 10,580,000
KY Econ Dev Fin Auth Norton
Hlthcare Inc Ser A(16) Zero Coupon 10/1/2025 AAA 4,300 1,669,346
Lauderdale Cnty & Florence AL
Hlthcare Rev Coffee Hlth Ser A(16) 6.00% 7/1/2029 AAA 1,000 1,106,190
Lubbock TX Hlth Fac Dev Corp
Rev Sears Plains Pj(13) 5.70% 1/20/2041 AAA 2,490 2,656,058
MD St Hlth & Higher Edl Facs
Auth Rev North Arundel Hosp 6.50% 7/1/2026 A 1,000 1,123,910
MD St Hlth & Higher Edl Facs
Univ MD Med Sys 6.75% 7/1/2030 A3 1,950 2,205,333
Minneapolis & St Paul MN Hsg
Hlthpartners Oblig Grp Pj 5.875% 12/1/2029 BBB+ 2,100 2,239,041
MO St Hlth & Edl Facs Auth
Rites PA 1049 RIBs(2) 11.987% 6/1/2010 AAA(b) 855 1,101,813
MS Hosp Equip & Fac Forrest
Cnty Auth Gen Hosp Pj(12) 6.00% 1/1/2030 Aaa 615 678,800
NH Hlth & Edl Facs Auth Rev 6.00% 10/1/2024 A+ 250 272,233
NH Hlth & Edl Facs
Dartmouth-Hitchcock Oblig Grp(12) 5.50% 8/1/2027 AAA 3,500 3,841,180
NH Hlth & Edl Facs Exeter Pj 5.75% 10/1/2031 A+ 1,550 1,645,821
NH St Hlth & Ed Concord Hosp(12) 5.50% 10/1/2021 Aaa 710 770,236
NJ Hlthcare Fac Fin Auth Rev
Robert Wood Johnson Univ Hosp 5.75% 7/1/2031 A 3,065 3,303,856
OR St Hlth Hsg Ed & Cultural
Fac Auth Rev(2) 5.25% 11/15/2019 AAA 2,000 2,157,860
Orange Cnty FL Hlth Fac Auth
Rev Hosp Orlando Regl 5.75% 12/1/2027 A 1,000 1,078,860
Plymouth MN Hlth Fac Rev West
Hlth Pj Ser A(12) 6.125% 6/1/2024 AAA 2,990 3,034,282
RI St Hlth & Ed Bldg RI Hlth 6.50% 8/15/2032 BBB+ 1,000 1,113,130
RI St Hlth & Ed Bldg Roger
Williams Rlty(9) 6.50% 8/1/2029 AA 1,240 1,393,648
SC Jobs Econ Dev Auth Hosp Facs Rev 6.375% 8/1/2034 BBB+ 2,000 2,188,240
St Cloud MN Hlthcare Rev Hosp
Oblig Grp Ser A(12) 6.25% 5/1/2018 Aaa 3,320 3,727,895
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
43
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Sullivan Cnty TN Hlth Ed &
Hsg Fac Bd Rev Hosp 6.25% 9/1/2022 BBB+ $ 2,000 $ 2,179,360
Tyler TX Hlth Fac Dev Corp
Hosp Rev Mother Frances Hosp 6.00% 7/1/2027 Baa1 1,500 1,578,660
--------------
TOTAL 92,344,170
--------------
HOUSING 5.58%
ID Hsg Agy Sing Fam Mtg Ser F AMT(7)(9) 7.45% 7/1/2015 Aaa 135 136,701
ID Hsg & Fin Assn SF Mtg AMT 5.25% 7/1/2033 Aaa 395 401,869
Kansas City MO Ind Dev Auth
No Oak Crossing Sr Ser A-1 AMT(2) 5.30% 12/1/2020 AAA 1,170 1,203,918
KY Hsg Corp Hsg Rev Ser D AMT 5.25% 7/1/2022 AAA 500 514,685
LA Hsg Fin Agy Mtg Rev Sing
Fam Hmownr B AMT(14) 5.80% 6/1/2036 Aaa 2,000 2,158,580
MD St Cmnty Dev Admin Dept
Hsg & Cmnty Dev Ser B AMT 5.375% 9/1/2022 Aa2 4,160 4,228,723
MD St Cmnty Dev Admin
Residential Ser F AMT 5.50% 9/1/2022 Aa2 2,500 2,562,000
Minneapolis St Paul MN Hsg
Fin Rev Sing Fam Mtg Ser AB AMT(14) 6.25% 11/1/2030 AAA 230 243,848
MN St Hsg Fin Agy Sing Fam
Mtg Ser G-1 AMT 5.60% 7/1/2022 AA+ 220 225,795
MO St Hsg Dev Cmnty Mtg Rev
Sing Fam Hmownr Ln Pg A-1 AMT(14) 5.90% 9/1/2035 AAA 2,000 2,154,540
MO St Hsg Dev Cmnty Mtg Rev
Sing Fam Hmownr Ln Ser B-1 AMT(14) 6.25% 3/1/2031 AAA 150 153,122
MO St Hsg Dev Cmnty Mtg Rev
Sing Fam Ser E-1 AMT(14) Zero Coupon 3/1/2029 AAA 465 130,777
MT St Bd Hsg Sing Fam Mtg Ser A-1(7)(9) 6.05% 12/1/2037 AA+ 4,255 4,402,180
MT St Bd Hsg Sing Fam Mtg
Ser A-1 AMT 5.60% 12/1/2035 AA+ 5,000 5,327,100
NC Hsg Fin Agy Sing Fam Rev
Ser BB AMT 6.25% 3/1/2012 AA 460 465,258
New Orleans LA Fin Auth Mtg
Rev Ser B-2 AMT(14) 6.00% 12/1/2018 Aaa 300 301,083
OK Hsg Fin Agy Sing Fam Mtg
Ser B-1(14) 5.30% 9/1/2026 Aaa 75 76,882
OK Hsg Fin Agy Sing Fam Rev
Cap Apprec Ser D-1(14) Zero Coupon 3/1/2029 Aaa 2,610 752,071
OK Hsg Fin Agy Sing Fam Rev
Mtg Hmownr Ser B-1 Zero Coupon 3/1/2029 Aaa 1,325 372,881
OK Hsg Fin Agy Sing Fam Rev
Mtg Hmownr Ser D-2 AMT(14) Zero Coupon 9/1/2030 Aaa 1,265 270,040
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
44
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Pinellas Cnty FL Hsg Fin Auth Sing Fam
Hsg Rev Multi Cnty Pg Ser A-1 AMT(14) 5.50% 9/1/2035 Aaa $ 980 $ 1,036,566
Prince Georges Cnty MD Hsg
Sing Fam Ser A AMT(8)(14) 6.15% 8/1/2019 AAA 15 15,639
VT Hsg Fin Agy Sing Fam Hsg
Ser 16-A AMT(12) 5.50% 11/1/2021 AAA 2,210 2,282,333
WV St Hsg Dev Fd Hsg Fin Ser B AMT 5.25% 11/1/2018 AAA 2,345 2,382,004
--------------
TOTAL 31,798,595
--------------
INDUSTRIAL 0.99%
Clark Cnty NV Indl Dev Rev
Ser C AMT(2) 5.95% 12/1/2038 AAA 3,320 3,637,525
Jacksonville FL Swr & Solid
Wst Disp Fac Rev Anheuser AMT 5.875% 2/1/2036 A+ 500 514,320
RI St Econ Dev Providence
Place Mall(17) 6.125% 7/1/2020 AA 550 611,881
Texas City TX Indl Dev Corp
Marine Term Rev Arco Pipe Line 7.375% 10/1/2020 AA+ 650 858,045
--------------
TOTAL 5,621,771
--------------
LEASE 3.33%
AZ St Ser A COP(16) 5.00% 11/1/2020 AAA 200 210,390
Bemidji MN Lease Rev MN St
Bureau Criminal Appreh(16) 5.75% 12/1/2018 Aaa 555 596,098
Bemidji MN Lease Rev MN St
Bureau Criminal Appreh(16) 5.75% 12/1/2019 Aaa 315 338,326
Charlotte NC Govt Fac Pj Ser G COP 5.375% 6/1/2026 AA+ 2,250 2,456,820
Grand Rapids MI Pub Sch(16) 5.00% 11/1/2021 AAA 250 263,527
Greenville Cnty SC Sch Dist
Installment Pur Ref Bldg 5.50% 12/1/2028 AA- 5,500 5,935,985
Henrico Cnty VA Econ Dev Auth
Pub Fac Lease Rev Jail Pj 6.125% 11/1/2019 Aa1 1,000 1,120,220
Lancaster Edl Assistance Sch
Dist Lancaster Cnty Pj 5.00% 12/1/2029 BBB+ 1,750 1,756,265
Murray City UT Muni Bldg Auth
Lease Rev Ser A(2) 5.30% 12/1/2021 Aaa 2,925 3,120,653
Spartanburg Cnty SC Sch Dist
McCarthy Teszler Pj(19) 5.00% 3/1/2022 AAA 1,000 1,049,630
St Paul MN Port Auth Lease
Rev Office Bldg 5.00% 12/1/2022 AA+ 1,000 1,049,580
West Vly City UT Muni Bldg(2) 5.50% 8/1/2027 AAA 1,000 1,085,620
--------------
TOTAL 18,983,114
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
45
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MISCELLANEOUS 7.96%
AZ Tourism & Sports Auth Tax Rev
Multipurpose Stadium Fac Ser A(16) 5.00% 7/1/2031 Aaa $ 670 $ 701,450
George L Smith II GA World
Congress Ctr Auth Rev AMT(16) 5.75% 7/1/2015 AAA 1,500 1,617,885
George L Smith II GA World
Congress Ctr Rev AMT(16) 5.50% 7/1/2020 AAA 700 747,859
LA Loc Govt Env Fac Pkg Fac
Garage Pj Ser A(2) 5.375% 10/1/2026 AAA 1,500 1,591,650
Larimer Cnty CO Sales & Use
Tax Rev Fairgrounds & Events(16) 5.00% 12/15/2019 AAA 750 793,560
Liberty NY Dev Corp. Rev
Goldman Sachs Headquarters(d) 5.25% 10/1/2035 Aa3 10,000 11,174,500
MA St Wtr Pollutn Abatement
Tr Rites PA 1221 RIBs 7.512% 8/1/2011 AAA(c) 4,500 5,136,390
Memphis-Shelby Cnty TN Sports
Memphis Arena Pj(2) 5.25% 11/1/2023 AAA 1,765 1,895,186
Miami-Dade Cnty FL Spl Oblig
Fltg Rate Cap Asset Acq Ser A RIBs(11) 4.789% 4/1/2014 AAA 3,300 3,302,706
Omaha Convention Hotel Corp
Rites PA 1078 RIBs(2) 7.242% 4/1/2010 AAA(b) 5,000 5,445,500
Portland OR Urb Ren & Redev
Downtown Wtrfront Ref Ser A(2) 5.50% 6/15/2020 Aaa 650 705,724
Portland OR Urb Ren & Redev
Downtown Wtrfront Ref Ser A(2) 5.75% 6/15/2019 Aaa 1,500 1,652,805
Puerto Rico Pub Bldgs Auth
Rev Govt Facs Ser I GTD 5.25% 7/1/2033 BBB 5,000 5,297,800
Univ FL Res Fndtn Inc Cap Impt Rev(2) 5.125% 9/1/2033 Aaa 4,000 4,128,920
Westminster CO Sales & Use
Tax Ref Rev(2) 5.25% 12/1/2022 AAA 1,090 1,170,486
--------------
TOTAL 45,362,421
--------------
POWER 2.52%
Clark Cnty NV Indl Dev Rev
Southwest Gas Corp Pj Ser A AMT(d)(2) 4.85% 10/1/2035 AAA 5,000 5,003,900
Grant Cnty WA Pub Util Dist
No 2 Pr Rap Hydro 2nd Ser B AMT(16) 5.375% 1/1/2018 AAA 300 316,770
Los Angeles CA Wtr & Pwr Rev
Pwr Sys Ser A-A1(12) 5.25% 7/1/2020 AAA 2,600 2,787,044
Sacramento CA Muni Util Dist
Ref Ser T(11) 5.00% 5/15/2030 AAA 5,000 5,238,450
SC St Pub Svc(12) 5.25% 1/1/2019 AAA 950 1,030,019
--------------
TOTAL 14,376,183
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
46
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
PRE-REFUNDED 14.48%
Akron OH Impt 5.80% 11/1/2020 AA- $ 575 $ 646,202
Athens OH City Sch Dist Fac
Constr & Impt(12) 6.00% 12/1/2024 AAA 500 567,465
Baltimore MD Rev Wtr Pj Ser A(12) 6.00% 7/1/2018 AAA 285 318,750
Baltimore MD Rev Wtr Pj Ser A(12) 6.00% 7/1/2020 AAA 275 307,566
Boise City ID Lease Rev Urban
Renewal ADA Cnty Courts(2) 6.25% 8/15/2019 AAA 7,385 8,276,296
Broad River NC Wtr Auth Wtr Sys
Rev(16) 5.375% 6/1/2026 Aaa 400 439,328
Canton OH Sch Dist Var Purp
Ser A(16) 5.625% 12/1/2023 AAA 2,900 3,215,665
Chisholm Creek Util Auth KS
Bel Aire & Park City KS Pj(16) 5.25% 9/1/2020 Aaa 320 353,664
CO Hlth Facs Auth Rev Hosp
Portercare Adventist Hlth 6.625% 11/15/2026 A+ 2,000 2,358,480
Cobb Cnty GA Kennestone Hosp
Auth Rev Ctfs Ser 86-A ETM(16) Zero Coupon 8/1/2015 AAA 1,000 558,410
Culpeper Cnty VA Sch(12) 6.00% 1/15/2021 AAA 690 771,475
Dallas TX 5.75% 2/15/2020 AA+ 1,615 1,775,111
Dallas TX Indpt Sch Dist PSF GTD 5.50% 2/15/2017 AAA 5,000 5,571,650
DE Transn Auth Transn Sys Rev Sr 6.00% 7/1/2020 AA 6,215 6,950,980
Detroit MI Wtr Supply Sys Sr
Lien Ser A(11) 5.75% 7/1/2028 AAA 1,500 1,692,150
Fayette Cnty GA Pub Fac Auth
Criminal Justice Ctr Pj 6.00% 6/1/2030 AA 3,500 3,937,850
Georgetown Cnty SC Sch Dist(12) 5.25% 3/1/2020 AAA 2,485 2,711,458
IA Fin Auth Rev ETM 5.25% 8/15/2021 Aa2 235 241,535
Jackson OH Hosp Fac Rev Cons
Hlth Sys Jackson Hosp(17) 6.125% 10/1/2023 AA 680 761,274
Lane Cnty OR Sch Dist No 052 5.625% 6/15/2020 Aa3 800 880,968
Lauderdale Cnty & Florence AL
Hlthcare Auth Rev(16) 5.75% 7/1/2019 AAA 2,000 2,140,760
Linn Cnty OR Sch Dist No 55(12) 5.50% 6/15/2025 AAA 1,935 2,145,780
Linn Cnty OR Sch Dist No 55
Sweet Home(12) 5.50% 6/15/2020 AAA 1,000 1,108,930
MD St Hlth & Higher Edl Facs
Catholic Hlth Initiative Ser A ETM 6.00% 12/1/2024 AA 100 110,501
Mesa AZ Indl Dev Auth
Discovery Hlth Sys Ser A(16) 5.75% 1/1/2025 AAA 750 827,363
New York NY Ser A 6.00% 5/15/2030 A+ 1,935 2,178,655
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
47
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
NJ St Transn Tr Fd Auth
Transn Sys Ser B 6.00% 6/15/2019 AAA $ 2,550 $ 2,849,370
NM St Hosp Equip Ln Council
Hosp Rev
Presbyterian Hlthcare Ser A 5.50% 8/1/2025 AA- 2,000 2,238,740
North Providence RI Ser A(16) 6.125% 7/1/2016 AAA 1,410 1,512,817
Paw Paw MI Pub Sch Dist Sch
Bldg & Site 6.00% 5/1/2030 AA 550 614,014
Philadelphia PA Sch Dist Ser A(12) 5.75% 2/1/2030 AAA 1,200 1,339,884
Phoenix AZ Civic Impt Corp(11) 6.00% 7/1/2024 AAA 2,400 2,704,776
Providence RI Redev Agy Rev
Pub Safety & Muni Bldgs Ser A(2) 5.75% 4/1/2029 Aaa 415 459,949
RI St Econ Dev Corp Arpt Rev Ser B(11) 6.00% 7/1/2020 AAA 1,210 1,349,549
RI St Econ Dev Corp Arpt Rev Ser B(11) 6.00% 7/1/2028 AAA 1,200 1,332,840
SC Jobs Econ Dev Auth Hosp Fac Rev 7.375% 12/15/2021 BBB+ 2,000 2,397,380
South Washington Cnty MN Indpt Sch
Dist No 833 Ser A(16) 5.50% 2/1/2018 AAA 5,065 5,488,940
South Washington Cnty MN Indpt Sch
Dist No 833 Ser A(16) 5.50% 2/1/2019 AAA 2,990 3,240,263
Sunman Dearborn IN Inter Sch
Bldg Corp First Mtg(11) 5.00% 1/15/2021 AAA 1,105 1,198,925
Teays Vly OH Loc Sch Dist Sch
Facs Constr & Impt(11) 5.375% 12/1/2020 Aaa 500 548,545
TN St Sch Bd Auth Higher Edl
Facs Ser A 5.625% 5/1/2030 AA- 150 165,085
VA St Pub Bldg Auth Pub Fac
Rev Ser A 5.75% 8/1/2020 AA+ 600 661,350
White Hsg Util Dist TN
Robertson/Sumner Cntys Wtr/Swr(12) 6.00% 1/1/2026 Aaa 1,090 1,208,200
WV St St Road(16) 5.75% 6/1/2025 AAA 1,800 2,001,762
York Cnty VA Swr Rev 5.875% 6/1/2024 Aa3 330 364,112
--------------
TOTAL 82,524,767
--------------
RESOURCE RECOVERY 0.22%
MO St Envr Impt & Enrg
Unrefunded Bal St Revolving B 7.20% 7/1/2016 Aaa 1,245 1,265,393
--------------
SALES TAX 0.98%
Grand Forks ND Sales Tax Rev
Ref Alerus Pj Ser A(16) 4.50% 12/15/2029 Aaa 5,640 5,590,368
--------------
SPECIAL TAX 3.21%
Ernest N Morial New Orleans
LA Exhibit Hall Auth Spl Tax RIBs 7.626% 7/15/2028 AAA 5,000 5,574,300
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
48
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Sales Tax Asset Receivable Corp NY
Ser A(2) 5.00% 10/15/2032 AAA $ 11,325 $ 11,930,095
Salida CA Area Pub Fac Fin
Agy Cmnty Fac Dist Spl
Tax B No 1998-1(12) 5.25% 9/1/2028 AAA 355 374,546
San Juan Cnty NM Tax/Motor
Ref & Impt(15)(16) 5.25% 5/15/2022 AAA 390 419,882
--------------
TOTAL 18,298,823
--------------
TOLL ROADS 1.31%
NJ St Tpk Auth Rev Rols RR II
R 323 RIBs(2) 7.129% 1/1/2035 Aaa 7,000 7,429,800
--------------
TRANSPORTATION 8.88%
Billings MT Arpt Rev AMT(16) 6.10% 7/1/2016 AAA 190 211,077
Billings MT Arpt Rev AMT(16) 6.20% 7/1/2020 AAA 2,775 3,089,630
FL St Tpk Auth Tpk Rev RIBs 6.992% 7/1/2033 AA-(c) 3,000 3,240,780
Houston TX Arpt Sys Rev Sub
Lien Ser A AMT(11) 5.50% 7/1/2012 AAA 1,610 1,751,342
LA St Transn Auth Toll Rev Sr
Lien LA 1 Pj Ser A(2) 4.50% 12/1/2030 AAA 7,420 7,234,055
Metropolitan Transn Auth NY
Rev Ser B(16) 5.00% 11/15/2035 AAA 10,000 10,510,000
Metropolitan Washington DC
Arpt Auth Sys Ser A AMT(16) 5.00% 10/1/2035 AAA 5,000 5,146,600
Muni Secs Trust Ctfs Ser 7006
Tr Ctf Cl B RIBs(2) 7.559% 1/1/2031 Aaa 6,250 7,168,500
NY St Twy Auth Gen Rev Ser G(12) 5.00% 1/1/2030 AAA 5,000 5,263,550
PA St Tpk Commn Tpk Rev Ser A(2) 5.25% 12/1/2032 AAA 5,000 5,415,100
Port Kalama WA Rev Ser B AMT 5.625% 12/1/2015 A3 1,025 1,043,337
San Francisco CA City & Cnty
Arpt Lease SFO Fuel Ser A AMT(12) 6.125% 1/1/2027 AAA 495 525,348
--------------
TOTAL 50,599,319
--------------
WATER/SEWER 9.41%
Brighton Twp MI San Sew
Drainage Dist(12) 5.25% 10/1/2018 AAA 1,615 1,701,629
Chisholm Creek Util Auth KS
Bel Aire & Park City KS Pj(16) 5.25% 9/1/2021 Aaa 1,025 1,100,327
CO Wtr Res & Pwr Dev Parker
Wtr & San Dist(16) 5.125% 9/1/2034 AAA 8,350 8,835,887
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
49
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
NATIONAL TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Gainesville GA Wtr & Sew Rev(12) 5.375% 11/15/2020 AAA $ 2,900 $ 3,166,713
Gautier MI Util Dist Util Sys
Rev Ref(11) 5.125% 3/1/2019 Aaa 425 451,274
Grand Forks ND Wtr Rev Ser D(16) 5.375% 9/1/2020 Aaa 1,150 1,240,471
Iowa City IA Swr Rev(12) 5.375% 7/1/2020 Aaa 620 661,273
KS St Dev Fin Auth Rev Pub
Wtr Supply Revolving Ln 2 4.75% 4/1/2018 Aa1 1,180 1,202,160
Midlothian TX Wtr Dist(12) Zero Coupon 9/1/2022 AAA 2,000 920,980
NY New York City Muni Wtr Fin 5.125% 6/15/2031 AA+ 5,000 5,213,750
OR St Bd Bk Rev OR Econ Cmnty
Dev Dept Ser A(16) 5.50% 1/1/2017 AAA 570 607,671
Paragould AR Wtr Swr & Elec Rev(2) 5.65% 12/1/2025 AAA 615 666,881
Prince William Cnty VA Svc
Aut Wtr & Swr Sys Rev 5.00% 7/1/2032 AA+ 5,045 5,306,836
Raleigh NC Comb Entrprse 5.00% 3/1/2031 AAA 11,980 12,540,065
Rockingham NC COP(2) 5.00% 4/1/2020 AAA 1,205 1,283,120
SD Conservancy Dist(2) 5.00% 8/1/2022 Aaa 2,700 2,826,009
SD Conservancy Dist Rev Clean
Wtr St Revolving Fd(2) 5.00% 8/1/2022 Aaa 500 521,230
UT Wtr Fin Agy Rev Pooled Ln Fin Pg(2) 5.125% 7/1/2023 Aaa 1,000 1,054,940
WV St Wtr Dev Auth Rev Loan
Pg III Ser A AMT(2) 6.25% 7/1/2030 AAA 1,470 1,641,784
WV Wtr Dev Auth Infra Rev Ser A(2) 5.50% 10/1/2023 AAA 900 996,795
WV Wtr Dev Auth Infra Rev Ser A(12) 5.625% 10/1/2026 AAA 1,555 1,691,700
--------------
TOTAL 53,631,495
--------------
TOTAL MUNICIPAL BONDS (cost $539,506,095) 572,732,984
==============
<Caption>
SHARES
(000)
---------
SHORT-TERM INVESTMENTS 1.51%
MONEY MARKET MUTUAL FUNDS 1.51%
Dreyfus Municipal Cash Management Plus 8,618 8,618,413
SSgA Tax Free Money Market Fund 6 5,547
--------------
TOTAL SHORT-TERM INVESTMENTS (cost $8,623,960) 8,623,960
==============
TOTAL INVESTMENTS IN SECURITIES 102.02% (cost $548,130,055) 581,356,944
==============
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS (2.02%) (11,515,698)
--------------
NET ASSETS 100.00% $ 569,841,246
==============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
50
<Page>
SCHEDULE OF INVESTMENTS
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MUNICIPAL NOTES & BONDS 99.46%
EDUCATION 12.54%
Abag Fin Auth For Nonprofit
Corp CA Rev Sch of Mech Arts 5.25% 10/1/2026 A3 $ 500 $ 522,970
CA Edl Facs Auth Rev Res Ctfs
Ser 113 RIBs 7.365% 12/1/2027 AAA 2,525 2,738,716
CA Edl Facs Auth Rev Scripps College 5.25% 8/1/2021 A1 425 448,711
CA Edl Facs Auth Rev Scripps College 5.25% 8/1/2026 A1 1,145 1,202,239
CA Edl Facs Auth Rev Univ of
San Diego(2) 5.00% 10/1/2028 Aaa 1,250 1,298,825
CA Edl Facs Auth Rev
Unrefunded Univ San Francisco(16) 6.00% 10/1/2016 NR 45 47,257
CA Edl Facs Auth Rev
Unrefunded Univ San Francisco(16) 6.00% 10/1/2026 NR 1,575 1,653,986
CA St Univ Fndtn Rev Monterey Bay(16) 5.30% 6/1/2022 AAA 250 269,437
CA Statewide Cmntys Dev Auth
Aux Fndtn CA St Univ(16) 5.20% 6/1/2024 AAA 525 550,090
Golden Vly Unif Sch Dist Fin Pj(2) 5.35% 7/1/2027 AAA 2,250 2,358,292
Los Angeles CA Unif Sch Dist
Admin Bldg Pj Ser COP(2) 5.00% 10/1/2031 AAA 3,025 3,129,302
Los Angeles CA Unif Sch Dist Ser A(12) 5.00% 7/1/2022 AAA 1,500 1,587,630
San Rafael CA City Elem Sch(d)(11) 4.50% 2/1/2030 AAA 680 666,169
San Ysidro CA Sch Dist Cap
Apprec Election 1997 Ser D(11) Zero Coupon 8/1/2028 AAA 1,000 332,010
Univ CA Rev Multi Purp Ser K 5.25% 9/1/2024 AA 1,545 1,615,097
Univ CA Revs Res Facs Ser E(2) 5.00% 9/1/2031 AAA 2,000 2,085,760
Univ CA Revs Res Multiple Purp Pj
Ser Q(12) 5.00% 9/1/2031 AAA 2,000 2,094,200
--------------
TOTAL 22,600,691
--------------
GENERAL OBLIGATION 21.97%
Antelope Vly CA Unif High Sch(16) 5.00% 8/1/2022 AAA 2,080 2,202,637
Barstow CA Unif Sch Dist Ser A(11) 5.00% 8/1/2026 Aaa 2,500 2,621,950
Berryessa CA Unif Sch Dist
Election of 1999 Ser B(12) 5.25% 8/1/2019 AAA 1,015 1,107,101
CA St 5.10% 2/1/2034 A 3,900 4,013,646
CA St Previous Veterans Ser B J AMT 5.70% 12/1/2032 AA- 640 651,923
CA St Ref(11) 5.25% 9/1/2030 AAA 890 935,835
CA St Var Purp 5.25% 11/1/2027 A 520 555,568
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
51
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Capistrano CA Unif Sch Dist
Fac Impt Dist No 001 Ser A(11) 6.00% 8/1/2024 AAA $ 2,500 $ 2,811,525
Escondido CA Unif Sch Dist Ser A(12) 5.25% 8/1/2022 AAA 2,000 2,159,020
Franklin-McKinley CA Sch Dist Ser B(12) 5.00% 8/1/2027 AAA 675 708,811
Marina CA Election 2002(2) 5.25% 8/1/2035 AAA 1,000 1,087,260
Mojave CA Unif Sch Dist Sch
Facs Impt Dist No 001(11) 5.00% 8/1/2024 AAA 1,060 1,112,353
Mojave CA Unif Sch Dist Sch
Facs Impt Dist No 001(11) 5.25% 8/1/2022 AAA 1,230 1,331,623
Montebello CA Unif Sch Dist(12) 5.00% 8/1/2020 AAA 350 372,844
Mount Pleasant CA Elem Sch
Dist 1998 Election Ser C(12) 5.50% 3/1/2026 AAA 465 507,789
Oxnard CA Unif High Sch Dist
Ref Ser A(16) 6.00% 2/1/2020 AAA 650 763,932
Oxnard CA Unif High Sch Dist
Ref Ser A(16) 6.20% 8/1/2030 AAA 3,000 3,528,420
Pittsburg CA Redev Agy Los
Medanos Cmnty Dev Pj(2) Zero Coupon 8/1/2026 AAA 3,500 1,287,755
Pomona CA Unif Sch Dist(16) 6.15% 8/1/2030 AAA 1,000 1,218,150
Pomona CA Unif Sch Dist Ser A(16) 6.55% 8/1/2029 AAA 1,000 1,293,860
Puerto Rico Comwlth
Unrefunded Bal Pub Impt Ser A 5.375% 7/1/2028 BBB 995 1,053,486
Rincon Valley Calif Unif Elem
Sch Dist Election 2004(11) 5.00% 8/1/2036 AAA 500 521,660
Riverside CA Cmnty College Dist
Unrefunded Bal Ser A(16) 5.50% 8/1/2029 AAA 15 16,576
San Gabriel CA Unif Sch Dist Ser A(12) 5.00% 8/1/2024 AAA 2,725 2,859,588
Ventura CA Unif Sch Dist Ref(12) 5.125% 8/1/2028 AAA 750 809,723
Visalia CA Unif Sch Dist
Tax & Rev Antic Notes 4.00% 9/27/2006 SP-1+ 4,000 4,045,880
--------------
TOTAL 39,578,915
--------------
HEALTHCARE 2.64%
CA Infrastr & Econ Dev Bk Rev
Kaiser Hosp Ser A 5.50% 8/1/2031 A+ 1,300 1,376,921
CA Infrastr & Econ Dev Bk Rev
Kaiser Hosp Ser B 5.55% 8/1/2031 A+ 650 690,573
CA Infrastr & Econ Scripps
Res Instl Ser A 5.75% 7/1/2030 Aa3 1,500 1,603,815
Torrance CA Hosp Rev Torrance
Memorial Med Ctr Ser A 5.50% 6/1/2031 A+ 500 523,180
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
52
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2005
<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 $ 559,250
--------------
TOTAL 4,753,739
--------------
INDUSTRIAL 1.69%
Golden St Tob Sec Corp CA Tob
Sttlmnt Rev Enhanced Asset Bkd Ser A 5.00% 6/1/2045 A- 3,000 3,045,750
--------------
LEASE 9.05%
CA St Pub Wk Bd Lease Rev
Dept Gen Svcs Teale Data(2) 5.25% 3/1/2020 AAA 1,000 1,065,910
Inglewood CA Pub Fin Auth Rev Ser A(2) 5.25% 8/1/2021 AAA 600 649,542
Orange Cnty CA Recovery Partn
Residual Ser 128 COP RIBs(16) 8.715% 7/1/2019 AAA(c) 2,500 2,711,650
Palm Springs CA Fin Auth
Convention Ctr Pj Ser A(16) 5.50% 11/1/2035 AAA 1,000 1,110,920
Plumas Cnty CA Cap Impt Pg
Ser A COP(2) 5.25% 6/1/2023 AAA 1,365 1,477,176
San Buenaventura CA Ser C COP(2) 5.25% 2/1/2031 AAA 2,575 2,730,839
San Francisco CA City & Cnty
San Bruno Jail No 3(2) 5.25% 10/1/2033 AAA 5,000 5,312,500
Santa Ana CA Unif Sch Dist
Fin Pj COP(12) Zero Coupon 4/1/2019 AAA 2,295 1,254,217
--------------
TOTAL 16,312,754
--------------
MISCELLANEOUS 2.03%
CA Infrastr & Econ Bk Rev
YMCA Metropolitan LA Pj(2) 5.25% 2/1/2026 AAA 2,000 2,140,000
Fontana CA Pub Fin Auth Tax
North Fontana Redev Pj Ser A(2) 5.50% 9/1/2032 AAA 1,000 1,083,340
Oakland CA JT Pwrs Fin Auth
Reassmt Rev 5.50% 9/2/2024 A- 405 431,775
--------------
TOTAL 3,655,115
--------------
POWER 2.06%
Los Angeles CA Wtr & Pwr Rev
Pwr Sys Ser A(15)(16) 5.00% 7/1/2024 AAA 850 890,630
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN(16) 5.00% 7/1/2032 AAA 1,500 1,570,410
Puerto Rico Elec Pwr Auth Ref
Rev Ser II(12) 5.125% 7/1/2026 AAA 500 532,635
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
53
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Shasta CA JT Pwrs Fin Auth
Cnty Admin Bldg Pj Ser A(16) 5.25% 4/1/2023 AAA $ 675 $ 722,371
--------------
TOTAL 3,716,046
--------------
PRE-REFUNDED 21.20%
Anaheim CA Unif High Sch Dist
Ser A(12) 5.00% 8/1/2025 AAA 785 859,866
CA Edl Facs Auth Rev Pepperdine Univ 5.75% 9/15/2030 A1 2,000 2,172,180
CA Edl Facs Auth Rev Pooled
College/Univ Ser C ETM 6.50% 6/1/2020 Baa3 3,000 3,393,720
CA Edl Facs Auth Rev
Univ San Francisco(16) 6.00% 10/1/2016 AAA(b) 30 31,532
CA Edl Facs Auth Rev
Univ San Francisco(16) 6.00% 10/1/2026 AAA(b) 990 1,040,549
CA Infrastr & Econ Dev Bk Rev
Asian Museum Fndtn(16) 5.25% 6/1/2030 AAA 115 120,659
CA St Univ Fndtn Rev
Sacramento Auxiliary Ser A(16) 5.50% 10/1/2027 AAA 400 451,332
CA St Univ Rev & Colleges Hsg
Sys Ser AV(11) 5.90% 11/1/2021 AAA 1,045 1,068,293
Centinela Vly CA Unif High
Sch Election 2000 Ser D ETM(11) 5.25% 8/1/2024 AAA 1,145 1,248,061
El Monte CA City Sch Dist Ser A(12) 6.25% 5/1/2025 AAA 1,230 1,402,372
Fremont CA Unif High Sch Dist
Santa Clara Cnty Ser B(11) 5.25% 9/1/2025 AAA 1,000 1,093,310
Los Angeles CA Unif Sch Dist Ser D(11) 5.375% 7/1/2025 AAA 1,000 1,095,800
MSR Pub Pwr Agy CA San Juan
Pj Rev Ser D ETM(16) 6.75% 7/1/2020 AAA 915 1,100,233
Oakland CA Ser C Measure K(16) 5.80% 12/15/2018 AAA 1,300 1,371,539
Orange Cnty CA Recovery Partn Ser A(16) 6.00% 7/1/2026 AAA 750 782,430
Pittsburg CA Unif Sch Dist Ser E(12) 6.00% 8/1/2024 AAA 1,380 1,505,815
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser D 5.75% 7/1/2041 BBB+ 5,400 6,099,246
Puerto Rico Comwlth
Infrastr Fin Auth Sp Ser A(2) 5.00% 7/1/2014 AAA 1,600 1,684,752
Puerto Rico Pub Impt Comwlth
Pub Impt Ser A 5.375% 7/1/2028 AAA 505 558,515
Puerto Rico Pub Fin Corp Approp E 5.50% 8/1/2029 Aaa 750 830,790
Riverside CA Cmnty College Ser A(16) 5.50% 8/1/2029 AAA 1,340 1,527,640
Sacramento CA City Fin Auth
Rev Cap Impt Ser A(2) 5.00% 12/1/2020 AAA 2,000 2,176,180
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
54
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Sacramento CA City Fin Auth
Rev Cap Impt Ser A(2) 5.00% 12/1/2026 AAA $ 900 $ 979,281
Santa Cruz CA City Elem Sch
Dist Ser B(11) 6.00% 8/1/2029 AAA 2,500 2,808,600
Santa Cruz CA City High Sch Ser B(11) 6.00% 8/1/2029 AAA 1,000 1,123,440
Southwestern Cmnty College Dist CA(2) 5.375% 8/1/2025 AAA 1,500 1,677,660
--------------
TOTAL 38,203,795
--------------
RESOURCE RECOVERY 2.32%
CA Pollutn Ctrl Fin Auth Rev
Pacific Gas/Elec Ser A AMT(16) 5.35% 12/1/2016 AAA 2,000 2,164,060
CA Pollutn Ctrl Fin Auth Solid
Waste Disp Rev Waste Mgmt Inc Pj
Ser A2 AMT 5.40% 4/1/2025 BBB 1,000 1,029,040
CA Pollutn Ctrl Fin Auth Solid Waste
Disp Rev Waste Mgmt Inc Pj Ser B AMT 5.00% 7/1/2027 BBB 1,000 988,170
--------------
TOTAL 4,181,270
--------------
SPECIAL TAX 6.87%
CSUCI Fin Auth Rev CA East
Campus Cmnty Ser A(16) 5.25% 9/1/2026 AAA 5,500 5,816,745
Riverside Cnty CA Redev Agy
Tax Alloc Jupura Vly Pj(2) 5.25% 10/1/2035 AAA 2,000 2,134,280
RNR Sch Fin Auth CA Spl Tax
Cmnty Fac Dist No 92-1 Ser A(2) 5.625% 9/1/2030 AAA 3,985 4,417,373
--------------
TOTAL 12,368,398
--------------
TRANSPORTATION 7.51%
Bay Area Govt Assn CA Rev
Bart SFO Extn Arpt Premium A(2) 5.00% 8/1/2026 AAA 2,000 2,079,500
Fresno CA Arpt Rev Ser A(12) 5.50% 7/1/2030 AAA 1,500 1,630,935
Port Oakland CA Port Rev Ser J(16) 5.50% 11/1/2026 AAA 5,000 5,320,200
Puerto Rico Comwlth Hwy &
Transn Auth Hwy Rev Ser Y 5.00% 7/1/2036 BBB+ 210 217,400
Puerto Rico Comwlth Hwy &
Transn Auth Ser G(11) 5.25% 7/1/2021 AAA 1,000 1,087,980
San Francisco CA City & Cnty
Arpt Lease SFO Fuel Ser A AMT(12) 6.125% 1/1/2027 AAA 490 520,042
San Francisco CA City & Cnty
Commn Intl Arpt Rev AMT(12) 5.75% 1/1/2014 AAA 500 538,775
San Francisco CA City & Cnty
Ref Second Ser 28B(16) 5.25% 5/1/2023 AAA 2,000 2,131,280
--------------
TOTAL 13,526,112
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
55
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
CALIFORNIA TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
WATER/SEWER 9.58%
CA Statewide Cmntys Dev Auth
Wtr Rev Pooled Fin Pg Ser C(12) 5.25% 10/1/2034 AAA $ 500 $ 535,315
Clovis CA Pub Fin Auth Wastewtr Rev(16) 5.25% 8/1/2030 Aaa 1,305 1,405,563
El Monte CA Wtr Auth Rev(2) 5.60% 9/1/2029 AAA 2,000 2,210,000
Imperial CA Ref Wtr Fac COP(11) 5.00% 10/15/2020 AAA 3,250 3,450,622
Orange Cnty CA Santn Dist COP(11) 5.25% 2/1/2027 AAA 4,265 4,578,350
Oxnard CA Fin Auth Wastewtr
Redwood Trunk Swr & Headwk A(11) 5.25% 6/1/2034 AAA 2,000 2,136,000
San Luis Opispo Cnty CA Ser A(16) 5.375% 8/1/2030 AAA 1,800 1,913,148
Western Riverside Cnty CA Wtr &
Wastewtr Fin Auth Eastern Muni
Wtr Dist Impt A 5.00% 9/1/2030 A- 1,000 1,029,090
--------------
TOTAL 17,258,088
--------------
TOTAL MUNICIPAL NOTES & BONDS (cost $169,797,915) 179,200,673
==============
<Caption>
SHARES
(000)
---------
SHORT-TERM INVESTMENT 2.00%
MONEY MARKET MUTUAL FUND 2.00%
Dreyfus General CA Municipal Money
Market Fund Class A (cost $3,612,872) 3,613 3,612,872
==============
TOTAL INVESTMENTS IN SECURITIES 101.46% (cost $173,410,787) 182,813,545
==============
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS (1.46%) (2,633,949)
--------------
NET ASSETS 100.00% $ 180,179,596
==============
</Table>
SCHEDULE OF INVESTMENTS
CONNECTICUT TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000)
---------
MUNICIPAL BONDS 100.83%
EDUCATION 23.79%
CT St Hlth & Edl Facs Auth
Rev CT College Ser E(16) 5.25% 7/1/2022 AAA $ 400 433,800
CT St Hlth & Edl Facs Auth
Rev Fairfield Univ Ser I(16) 5.25% 7/1/2019 AAA 600 641,520
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
56
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CONNECTICUT TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
CT St Hlth & Edl Facs Auth
Rev Fairfield Univ Ser I(16) 5.50% 7/1/2029 AAA $ 1,235 $ 1,326,242
CT St Hlth & Edl Facs Auth
Rev Gunnery Sch(17) 5.35% 7/1/2031 AA 695 735,699
CT St Hlth & Edl Facs Auth
Rev Loomis Chaffee Sch Ser D 5.25% 7/1/2031 A2 2,750 2,931,885
CT St Hlth & Edl Facs Auth
Rev Miss Porters Sch Ser A 5.75% 7/1/2029 A+ 3,200 3,453,696
CT St Hlth & Edl Facs Auth
Rev Norwich Free Academy Ser A(2) 5.00% 7/1/2034 AAA 1,250 1,311,238
CT St Hlth & Edl Facs Auth
Rev Ser G(12) 5.00% 11/1/2019 AAA 2,100 2,270,835
CT St Hlth & Edl Facs Auth Rev
Suffield Academy Ser A(16) 5.40% 7/1/2027 AAA 1,350 1,422,725
CT St Hlth & Edl Facs Auth
Rev Trinity College Ser G(2) 5.00% 7/1/2021 AAA 1,000 1,055,040
CT St Hlth & Edl Facs Auth
Rev Univ CT Fndtn Ser A 5.25% 7/1/2019 Aa3 200 214,112
CT St Hlth & Edl Facs Auth
Rev Univ CT Fndtn Ser A 5.375% 7/1/2029 Aa3 210 220,592
CT St Hlth & Edl Facs Auth
Rev Univ Hartford Ser E(17) 5.25% 7/1/2032 AA 2,900 3,053,410
CT St Hlth & Edl Facs Auth Rev
Unrefunded Bal Sacrd Hrt Ser C 6.50% 7/1/2016 BBB- 275 284,578
CT St Hlth & Edl Facs Auth
Rev Yale Univ Ser Y-1(d) 5.00% 7/1/2035 AAA 1,500 1,583,955
Univ CT Ser A(16) 5.125% 2/15/2021 AAA 675 723,863
--------------
TOTAL 21,663,190
--------------
GENERAL OBLIGATION 18.81%
Bridgeport CT Ser C(11) 4.75% 8/15/2021 AAA 1,000 1,026,700
Bridgeport CT Ser C(11) 5.00% 8/15/2020 AAA 500 523,210
CT St Ser D(16) 5.00% 12/1/2024 AAA 1,000 1,062,580
Hartford Cnty CT Met Dist(2) 5.00% 5/1/2024 AAA 500 531,845
Hartford CT 6.50% 12/15/2005 A 730 735,132
Montville CT 6.70% 6/15/2009 Aa3 550 615,725
Montville CT 6.70% 6/15/2010 Aa3 575 657,996
New Haven CT(11) 5.00% 11/1/2019 AAA 560 601,283
New Haven CT Ser A(2) 5.00% 11/1/2021 AAA 1,000 1,062,310
New Haven CT Ser C(16) 5.00% 11/1/2021 AAA 1,670 1,780,638
Puerto Rico Comwlth Pub Impt Zero Coupon 7/1/2018 BBB 2,035 1,165,994
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
57
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CONNECTICUT TAX-FREE FUND SEPTEMBER 30, 2005
<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 5.25% 7/1/2023 BBB $ 2,300 $ 2,442,393
Puerto Rico Comwlth
Unrefunded Bal Pub Impt(12) 5.125% 7/1/2030 AAA 945 997,485
Redding CT 6.60% 4/15/2010 Aa1 100 114,043
Waterbury CT(12) 5.125% 4/1/2022 AAA 2,250 2,392,087
Waterbury CT Ser A(12) 5.00% 4/1/2019 AAA 1,250 1,324,475
West Haven CT(16) 6.50% 6/15/2006 AAA 100 102,501
--------------
TOTAL 17,136,397
--------------
HEALTHCARE 11.58%
CT St Dev Auth Rev Duncaster Inc Pj(17) 5.125% 8/1/2022 AA 235 247,533
CT St Hlth & Edl Facs Auth Rev
Bridgeport Hosp Ser A(16) 6.625% 7/1/2018 AAA 1,250 1,284,575
CT St Hlth & Edl Facs Auth
Rev Bristol Hosp Ser B(17) 5.50% 7/1/2021 AA 1,000 1,094,190
CT St Hlth & Edl Facs Auth
Rev Catholic Hlth East Ser F(16) 5.625% 11/15/2020 AAA 325 352,865
CT St Hlth & Edl Facs Auth
Rev Child Care Fac Pg Ser C(2) 5.625% 7/1/2029 AAA 1,000 1,087,320
CT St Hlth & Edl Facs Auth
Rev CT College Ser E(16) 5.00% 7/1/2032 AAA 1,050 1,098,583
CT St Hlth & Edl Facs Auth
Rev Griffin Hosp Ser B(17) 5.00% 7/1/2023 Aa3 500 523,520
CT St Hlth & Edl Facs Auth
Rev Kent Sch Ser D(16) 4.375% 7/1/2023 Aaa 500 500,915
CT St Hlth & Edl Facs Auth
Rev St Francis Hosp & Med(17) 5.00% 7/1/2022 AA 1,000 1,046,270
CT St Hlth & Edl Facs Auth
Rev Waterbury Hosp Issue Ser C(17) 5.75% 7/1/2029 AA 650 691,672
CT St Hlth & Edl Facs Auth
Rev William W Backus Hosp Ser G(12) 5.00% 7/1/2035 AAA 2,500 2,621,650
--------------
TOTAL 10,549,093
--------------
HOUSING 0.58%
CT St Hsg Fin Auth Spl Oblig
Grp Home Mtg(2) 5.85% 6/15/2030 AAA 500 530,300
--------------
INDUSTRIAL 0.56%
CT St Dev Auth Govt Lease Rev(16) 6.60% 6/15/2014 AAA 500 508,430
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
58
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
CONNECTICUT TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MISCELLANEOUS 2.32%
CT St Hlth & Edl Facs Auth
Rev Trinity College Ser H(16) 4.75% 7/1/2023 AAA $ 1,030 $ 1,067,203
Puerto Rico Pub Bldg Auth Rev
Unrefunded Bal Govt Facs Ser D GTD 5.25% 7/1/2036 BBB 1,000 1,044,290
--------------
TOTAL 2,111,493
--------------
POWER 7.48%
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN(16) 5.00% 7/1/2032 AAA 1,500 1,570,410
Puerto Rico Elec Pwr Auth
Rev Ser II(12) 5.125% 7/1/2026 AAA 2,925 3,115,915
Puerto Rico Elec Pwr Auth
Rev Ser II 5.25% 7/1/2031 A- 1,000 1,054,500
Puerto Rico Elec Pwr Auth
Ser HH(12) 5.25% 7/1/2029 AAA 1,000 1,074,700
--------------
TOTAL 6,815,525
--------------
PRE-REFUNDED 24.55%
CT St Hlth & Edl Facs Auth
Rev Sacred Heart Ser C 6.50% 7/1/2016 BBB- 725 757,603
CT St Hlth & Edl Facs Auth Rev
Trinity College Ser E(16) 5.875% 7/1/2026 AAA 1,090 1,135,311
CT St Hlth & Edl Facs Auth
Rev Univ New Haven Issue D(b)(1)(3) 6.70% 7/1/2026 AAA(b) 1,000 1,047,180
CT St Ser A 5.625% 4/15/2020 Aa3 1,000 1,103,880
CT St Ser A 6.00% 4/15/2015 AA 1,000 1,119,510
CT St Ser B 5.60% 6/15/2020 Aa3 250 273,325
CT St Ser D 5.125% 11/15/2018 Aa3 1,500 1,625,280
Muni Secs Trust Ctfs Ser 7005
Cl B ETM RIBs+ 8.148% 10/1/2040 Aaa 1,000 1,184,060
New Haven CT(11) 5.375% 2/15/2011 AAA 1,500 1,543,620
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser D 5.25% 7/1/2038 BBB+ 1,000 1,099,780
Puerto Rico Comwlth 6.00% 7/1/2026 AAA 1,000 1,066,060
Puerto Rico Comwlth Bal Pub Impt(12) 5.125% 7/1/2030 AAA 1,505 1,644,980
Puerto Rico Comwlth Pub Impt Ser A 5.00% 7/1/2027 AAA 670 731,091
Puerto Rico Comwlth Pub Impt Ser A(11) 5.00% 7/1/2032 AAA 4,285 4,675,706
Puerto Rico Pub Fin Corp Approp E 5.50% 8/1/2029 Aaa 750 830,790
Stamford CT Parking Garage 5.25% 2/1/2023 AAA 155 172,066
Univ CT Rev Student Fee Ser A(11) 5.75% 11/15/2020 AAA 205 230,067
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
59
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
CONNECTICUT TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Univ CT Rev Student Fee Ser A 6.00% 11/15/2021 AA- $ 390 $ 442,241
Univ CT Rev Student Fee Ser A(11) 6.00% 11/15/2025 AAA 500 566,975
Univ CT Ser A(11) 5.625% 3/1/2020 AAA 1,000 1,105,830
--------------
TOTAL 22,355,355
--------------
RESOURCE RECOVERY 1.15%
Stamford CT Wtr Pollutn Ctl
Sys & Fac Rev Ser A 5.00% 11/15/2032 AA+ 1,000 1,046,070
--------------
TRANSPORTATION 6.72%
CT St Spl Tax Oblig Rev Rites
PA 1039 R-A RIBs(12) 7.771% 1/1/2010 AAA 500 610,370
CT St Spl Tax Oblig Rev Rites
PA 1039 R-B RIBs(12) 7.771% 1/1/2010 AAA 785 934,605
CT St Spl Tax Oblig Rev Rites
PA 1039 R-C RIBs(12) 7.021% 7/1/2017 AAA 2,250 2,507,805
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser D(12) 5.00% 7/1/2032 AAA 1,000 1,042,290
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser G 5.00% 7/1/2033 BBB+ 1,000 1,027,040
--------------
TOTAL 6,122,110
--------------
WATER/SEWER 3.29%
CT St Dev Auth Wtr Bridgeport AMT(2)(18) 6.15% 4/1/2035 AAA 500 528,855
South Cent CT Regl Wtr Auth
Wtr Sys Rev 18th Ser A(16) 5.00% 8/1/2025 AAA 300 316,251
South Cent CT Regl Wtr Auth
Sys Rev 16th Ser(2) 5.375% 8/1/2025 AAA 1,000 1,076,630
South Cent CT Regl Wtr Auth
Sys Rev 16th Ser(2) 5.375% 8/1/2030 AAA 1,000 1,075,710
--------------
TOTAL 2,997,446
--------------
TOTAL MUNICIPAL BONDS (cost $86,623,186) 91,835,409
==============
<Caption>
SHARES
(000)
---------
SHORT-TERM INVESTMENT 0.01%
MONEY MARKET MUTUAL FUND 0.01%
Dreyfus CT Muni Cash Management
(cost $3,282) 3 3,282
==============
TOTAL INVESTMENTS IN SECURITIES 100.84% (cost $86,626,468) 91,838,691
==============
LIABILITIES IN EXCESS OF OTHER ASSETS (0.84%) (760,655)
--------------
NET ASSETS 100.00% $ 91,078,036
==============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
60
<Page>
SCHEDULE OF INVESTMENTS
HAWAII TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 95.65%
EDUCATION 6.61%
HI St Hsg Fin & Dev Corp Rev
Univ of HI Faculty Hsg Pj(2) 5.65% 10/1/2016 AAA $ 1,000 $ 1,013,800
HI St Hsg Fin & Dev Corp Rev
Univ of HI Faculty Hsg Pj(2) 5.70% 10/1/2025 AAA 380 385,259
Univ HI Univ Sys Rev(11) 5.125% 7/15/2032 AAA 1,000 1,046,800
Univ HI Univ Sys Rev Ser A(11) 5.50% 7/15/2029 AAA 2,500 2,720,550
--------------
TOTAL 5,166,409
--------------
GENERAL OBLIGATION 25.51%
HI Cnty HI Ser A(12) 5.00% 7/15/2023 AAA 1,000 1,053,230
HI Cnty HI Ser A(16) 5.00% 7/15/2024 AAA 1,000 1,055,160
HI Cnty HI Ser A(16) 5.25% 7/15/2023 AAA 595 645,432
HI Cnty HI Ser A(11) 5.50% 7/15/2017 AAA 1,045 1,136,877
HI Cnty HI Ser A(11) 5.60% 5/1/2013 AAA 1,780 2,007,787
HI Cnty HI Ser A(12) 5.625% 5/15/2019 AAA 545 588,943
HI St Ser BZ 6.00% 10/1/2010 Aa2 500 561,385
HI St Ser BZ 6.00% 10/1/2012 Aa2 500 574,895
HI St Ser CA(11) 8.00% 1/1/2013 AAA 2,000 2,534,320
HI St Ser CZ(12) 5.25% 7/1/2018 AAA 1,000 1,078,040
HI St Ser DE(16) 5.00% 10/1/2024 AAA 1,000 1,056,310
HI St Ser DF(2) 5.00% 7/1/2025 AAA 2,000 2,118,480
HI St Unrefunded Ser CP(11) 5.00% 10/1/2016 AAA 260 271,697
Kauai Cnty HI Pub Impt Ser B(16) 5.25% 8/1/2017 AAA 95 99,347
Kauai Cnty HI Ser A(16) 5.50% 8/1/2021 AAA 2,495 2,706,401
Maui Cnty HI(16) 5.00% 3/1/2025 AAA 1,000 1,057,610
Puerto Rico Comwlth
Unrefunded Bal Pub Impt Ser A 5.375% 7/1/2028 BBB 1,330 1,408,178
--------------
TOTAL 19,954,092
--------------
HEALTHCARE 1.55%
HI St Dept Bldg & Fin Spl
Purp Rev The Queens Hlth Sys Ser B(16) 5.25% 7/1/2023 AAA 1,000 1,058,050
Puerto Rico Indl Tourist Ed
Mutuo Oblig Grp Ser A(16) 6.25% 7/1/2024 AAA 150 152,856
--------------
TOTAL 1,210,906
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
61
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HAWAII TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
HOUSING 3.06%
HI St Hsg Fin & Dev Corp Sing
Fam Mtg Purp Rev Ser B(10) 5.30% 7/1/2028 AAA $ 850 $ 863,795
HI St Hsg Fin & Dev Corp Sing
Fam Mtg Purp Rev Ser B(10) 5.45% 7/1/2017 AAA 1,000 1,031,480
Honolulu HI City & Cnty Mtg
Rev Smith Beretania 8A(6)(9)(16) 5.45% 1/1/2025 Aaa 500 500,230
--------------
TOTAL 2,395,505
--------------
MISCELLANEOUS 1.33%
HI St Cap Dist Kapolei St
Office Ser A COP(2) 5.00% 5/1/2018 AAA 475 501,833
HI St Cap Dist St Office COP(16) 5.50% 5/1/2020 AAA 500 537,740
--------------
TOTAL 1,039,573
--------------
POWER 3.10%
HI St Dept Budget & Fin Spl
Purp Rev Ref Elec Co & Subsidiaries A
AMT(11) 4.80% 1/1/2025 AAA 1,000 1,007,360
Puerto Rico Elec Pwr Auth Rev Ser II(12) 5.125% 7/1/2026 AAA 1,330 1,416,809
--------------
TOTAL 2,424,169
--------------
PRE-REFUNDED 38.80%
HI St Dept Budget & Fin Spl
Purp Rev Kaiser Permanente Ser A ETM 5.15% 3/1/2015 AAA 1,250 1,323,425
HI St Dept Budget & Fin Spl
Purp Rev Kapiolani Hlth 6.20% 7/1/2016 BBB+ 1,000 1,043,170
HI St Dept Budget & Fin Spl
Purp Rev Kapiolani Hlth 6.25% 7/1/2021 BBB+ 2,000 2,087,080
HI St Hwy Rev(12) 5.50% 7/1/2020 AAA 1,100 1,206,315
HI St Ser CP(11) 5.00% 10/1/2016 AAA 640 671,578
HI St Ser CT(12) 5.875% 9/1/2019 AAA 1,175 1,302,159
HI St Ser CU(16) 5.25% 10/1/2020 AAA 1,700 1,852,966
Honolulu HI City & Cnty Bd
Wtr Supply Wtr Sys Rev 5.80% 7/1/2021 AA 1,000 1,031,240
Honolulu HI City & Cnty Ser A(16) 5.00% 11/1/2015 AAA 1,500 1,529,591
Honolulu HI City & Cnty Ser A(12) 5.125% 9/1/2021 AAA 600 655,608
Honolulu HI City & Cnty Ser A(11) 5.50% 9/1/2016 AAA 1,000 1,056,688
Honolulu HI City & Cnty Ser A ETM 6.00% 1/1/2008 AA- 1,000 1,063,990
Honolulu HI City & Cnty Ser B(11) 5.00% 11/1/2016 AAA 265 278,496
Honolulu HI City & Cnty Ser B(11) 5.00% 11/1/2016 AAA 235 246,969
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
62
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HAWAII TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Honolulu HI City & Cnty Wtr ETM(11)(18) 6.00% 12/1/2015 AAA $ 1,000 $ 1,182,020
Kauai Cnty HI(11) 6.125% 8/1/2024 AAA 580 653,010
Maui Cnty HI Ser A(16) 5.00% 3/1/2022 AAA 750 785,077
Maui Cnty HI Ser A(16) 5.75% 6/1/2016 AAA 1,035 1,064,539
Maui Cnty HI Ser A(11) 6.10% 3/1/2020 AAA 500 562,595
Muni Secs Trust Ctfs Ser 7005
Cl B ETM RIBs+ 8.148% 10/1/2040 Aaa 1,250 1,480,075
Puerto Rico Comwlth 6.00% 7/1/2026 AAA 1,000 1,066,060
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser D 5.25% 7/1/2038 BBB+ 1,000 1,099,780
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser D 5.75% 7/1/2041 BBB+ 1,000 1,129,490
Puerto Rico Comwlth Infra Fin
Auth Spl Ser A ETM 5.375% 10/1/2024 AAA 300 328,788
Puerto Rico Comwlth Infra Fin
Auth Spl Ser A ETM 5.50% 10/1/2032 AAA 200 219,846
Puerto Rico Comwlth Pub Impt Ser A 5.00% 7/1/2027 AAA 500 545,590
Puerto Rico Comwlth Ser A 5.375% 7/1/2028 AAA 670 741,000
Puerto Rico Indl Med & Envr
Pollutn Ctrl St Luke Hosp Ser A 6.25% 6/1/2010 AAA(b) 950 970,225
Puerto Rico Pub Bldgs Auth
Rev Govt Facs Ser B(2) 5.00% 7/1/2027 AAA 1,000 1,049,230
Puerto Rico Pub Bldgs Auth
Rev Govt Facs Ser D GTD 5.25% 7/1/2036 A- 1,465 1,606,578
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.75% 8/1/2030 Aaa 500 517,470
--------------
TOTAL 30,350,648
--------------
TRANSPORTATION 7.55%
HI St Hwy Rev Ser A(12) 5.00% 7/1/2024 AAA 1,000 1,060,060
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites PA 1052 RIBs 8.225% 1/1/2010 BBB+(b) 1,000 1,258,980
Puerto Rico Comwlth Hwy &
Transn Auth Transn Sub PR 5.00% 7/1/2022 BBB 20 20,524
Puerto Rico Comwlth Hwy &
Transn Auth Hwy Rev Ser Y(15)(16) 5.50% 7/1/2036 AAA 250 282,228
Puerto Rico Comwlth Hwy &
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2036 BBB+ 3,000 3,285,180
--------------
TOTAL 5,906,972
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
63
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
HAWAII TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
WATER/SEWER 8.14%
Honolulu HI City & Cnty Bd
Wtr Supply Wtr Sys Rev(12) 5.25% 7/1/2031 AAA $ 100 $ 106,294
Honolulu HI City & Cnty Bd
Wtr Supply Wtr Sys Rev Ser A(11) 5.00% 7/1/2033 AAA 1,000 1,043,810
Honolulu HI City & Cnty Wastewtr
Sys Rev Sr Ser A(11) 5.00% 7/1/2035 AAA 5,000 5,219,100
--------------
TOTAL 6,369,204
--------------
TOTAL INVESTMENTS IN MUNICIPAL BONDS 95.65%
(cost $70,650,006) 74,817,478
==============
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES 4.35% 3,399,951
--------------
NET ASSETS 100.00% $ 78,217,429
==============
</Table>
SCHEDULE OF INVESTMENTS
MINNESOTA TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
MUNICIPAL BONDS 98.62%
EDUCATION 15.35%
Bloomington MN Indpt Sch Dist Ser A(12) 5.125% 2/1/2024 Aaa 1,000 1,056,520
MN St Higher Edl Facs Auth Rev
Augsburg Coll Ser 6-C 5.00% 5/1/2023 Baa2 250 257,725
MN St Higher Edl Facs Auth Rev
Hamline Univ Ser 5-B 6.00% 10/1/2029 Baa1 500 528,975
MN St Higher Edl Facs Auth Rev
Univ of St Thomas Ser 4-A1 5.625% 10/1/2016 A2 250 256,668
MN St Higher Edl Facs Auth Rev
Univ of St Thomas Ser 4-M 5.35% 4/1/2017 A2 250 257,828
MN St Higher Edl Facs Auth
Rev St John Univ Ser 6-G 4.50% 10/1/2026 A2 750 743,955
Pequot Lakes MN Indpt Sch Dist No 186(11) 5.25% 2/1/2022 AAA 1,550 1,661,677
Prior Lake MN Indpt Sch
Dist No 719 Ser A(11) 5.25% 2/1/2023 Aaa 1,470 1,572,518
University MN Ser A 5.75% 7/1/2018 AA 250 292,497
--------------
TOTAL 6,628,363
--------------
ELECTRIC POWER 2.40%
MN St Muni Pwr Agy Elec Rev 5.00% 10/1/2035 A3 1,000 1,034,170
--------------
GENERAL OBLIGATION 13.11%
Elk River MN Sch Dist(16) 5.50% 2/1/2021 Aaa 500 542,335
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
64
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MINNESOTA TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Lake Superior MN Indpt Sch
Dist No 381 Ser A(12) 5.00% 4/1/2023 Aaa $ 500 $ 528,435
Medford MN Indpt Sch
Dist No 763 Ser A(12) 5.50% 2/1/2031 Aaa 500 537,340
Minneapolis MN Ser E 5.00% 3/1/2026 AAA 500 514,310
Morris MN Indpt Sch Dist No 769 Bldg(16) 5.00% 2/1/2028 AAA 1,000 1,046,070
North St Paul Maplewood MN
Indpt Sch Dist No 622 5.125% 2/1/2025 AAA 400 406,596
North St Paul Maplewood MN
Indpt Sch Dist No 622 Ser A 5.125% 2/1/2020 AAA 100 102,142
Princeton MN Indpt Sch Dist
No 477 Ref Sch Bldg Ser A(12) 5.00% 2/1/2024 Aaa 585 620,761
Puerto Rico Comwlth
Unrefunded Pub Impt(15)(16) 5.00% 7/1/2028 AAA 175 180,183
Ramsey Cnty MN Cap Impt Ser A 6.25% 2/1/2006 AAA 650 657,183
Ramsey Cnty MN St Aid Str Ser C 5.00% 2/1/2024 AAA 500 526,570
--------------
TOTAL 5,661,925
--------------
HEALTH CARE SYSTEM 0.98%
MN Agric & Econ Dev Bd Rev
Unrefunded Bal Hlthcare Sys A(16) 5.50% 11/15/2017 AAA 45 47,841
Virginia MN Hsg & Redev Auth
Hlthcare Fac Lease Rev 5.375% 10/1/2030 Baa1 365 374,213
--------------
TOTAL 422,054
--------------
HEALTHCARE 12.47%
Bemidji MN Hlthcare Fac North
Country Hlth Svcs(17) 5.00% 9/1/2024 AA 500 518,585
Breckenridge MN Rev Catholic
Hlth Initiatives A 5.00% 5/1/2030 AA 500 521,580
Duluth MN Econ Dev
Benedictine Hlth Sys St Marys 5.25% 2/15/2028 A- 1,000 1,037,610
Duluth MN Econ Dev
Benedictine Hlth Sys St Marys 5.25% 2/15/2033 A- 1,000 1,036,210
Hastings MN Hlthcare Fac Rev
Regina Med Ctr(1) 5.30% 9/15/2028 A 400 404,324
Minneapolis MN Hlthcare Sys Rev(16) 5.00% 5/15/2021 AAA 250 264,517
Rochester MN Hlthcare Fac Rev(15)(16) 5.50% 11/15/2027 AAA 500 530,840
St Paul MN Hsg & Redev Auth
Franciscan Hlth Pj(9)(13) 5.30% 11/20/2022 AAA 50 52,382
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
65
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MINNESOTA TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Stillwater MN Hlthcare Rev
Hlth Sys Oblig Grp 5.00% 6/1/2035 A- $ 1,000 $ 1,019,120
--------------
TOTAL 5,385,168
--------------
HOUSING 12.70%
Crow Wing Cnty MN Hsg Ser A GTD(16) 4.90% 1/1/2034 Aaa 490 502,657
Dakota Cnty MN Hsg & Redev
Auth Sing Fam Mtg Rev AMT(14) 5.85% 10/1/2030 AAA 76 77,924
Fairbault MN Hsg & Redev Auth
Govt Trails Edge Apts Ser A 5.25% 2/1/2028 A3 300 307,782
Minneapolis MN Multi Fam Hsg
Rev Mtg East Village South(9)(13) 6.10% 7/20/2020 Aaa 1,000 1,066,920
Minneapolis MN Multi Fam Rev
Hsg East Phillips AMT(13) 5.25% 8/20/2044 Aaa 300 303,840
MN St Hsg Fin Agy Residential
Hsg Fin Ser F AMT 5.40% 7/1/2030 AA+ 1,265 1,287,340
MN St Hsg Fin Agy Sing Fam
Mtg Ser D AMT 5.85% 7/1/2019 AA+ 65 65,693
MN St Hsg Fin Agy Sing Fam
Mtg Ser E 5.90% 7/1/2025 AA+ 125 126,534
MN St Hsg Fin Agy Sing Fam
Mtg Ser G AMT 6.25% 7/1/2026 AA+ 35 35,667
Robbinsdale MN Hsg Dev Sr Hsg
Pj Ser B(11) 5.75% 1/1/2023 Aaa 250 259,087
Scott Cnty MN Hsg & Redev
Savage City Hamilton Apts Pj(2) 5.60% 2/1/2019 Aaa 80 82,656
St Louis Park MN Multi Fam
Hsg Mtg Cmnty Hsg(9) 6.15% 12/1/2016 Aa2 100 102,239
St Paul MN Hsg & Redev Auth
Multi Fam Hsg Rev Selby AMT(9)(13) 5.50% 9/20/2044 Aaa 750 764,490
St Paul MN Port Auth Hsg
Burlington Apt(13) 5.35% 5/1/2031 AAA 500 501,460
--------------
TOTAL 5,484,289
--------------
LEASE 3.33%
Olmsted Cnty MN Hsg & Redev 5.00% 2/1/2023 AAA 275 287,317
Rochester MN Indpt Sch Dist
No 535 COP(12) 5.125% 2/1/2020 AAA 85 89,956
St Paul MN Port Auth Lease
Rev Office Bldg 5.25% 12/1/2027 AA+ 1,000 1,061,090
--------------
TOTAL 1,438,363
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
66
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MINNESOTA TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MISCELLANEOUS 3.65%
Bemidji MN Lease Rev MN St
Bureau Crim Appreh(16) 5.80% 12/1/2021 Aaa $ 460 $ 492,747
Douglas Cnty MN Hsg & Redev
Governmental Hsg Ser A(16) 5.50% 1/1/2032 Aaa 560 607,869
MN St Retirement Sys Bldg Rev 6.00% 6/1/2030 AAA 250 276,623
St Cloud MN COP 5.90% 12/1/2017 A+ 200 200,806
--------------
TOTAL 1,578,045
--------------
POWER 6.25%
Chaska MN Elec Rev Ref
Generating Facs Ser A 5.00% 10/1/2030 A3 500 515,065
Puerto Rico Elec Pwr Auth
Rev Ser DD(12) 4.50% 7/1/2019 AAA 95 97,151
Rochester MN Elec Util Rev(2)(18) 5.25% 12/1/2030 AAA 1,000 1,051,950
Western MN Muni Pwr Agy(16) 5.00% 1/1/2026 Aaa 400 419,516
Western MN Muni Pwr Agy Pj Ser A(2) 5.50% 1/1/2016 Aaa 565 614,963
--------------
TOTAL 2,698,645
--------------
PRE-REFUNDED 10.36%
Chaska MN Elec Rev Ser A 6.00% 10/1/2025 A3 250 280,447
Minneapolis MN Spl Sch Dist No 1 COP 5.75% 2/1/2015 AAA 100 106,073
Minneapolis MN Spl Sch Dist No 1 COP 5.75% 2/1/2017 AAA 1,120 1,188,018
MN Agric & Econ Dev Bd Rev
Hlthcare Sys A(16) 5.50% 11/15/2017 AAA 175 187,465
MN St Higher Edl Facs Auth Rev
Macalester College Ser 4-J 5.55% 3/1/2017 Aa3 260 268,289
Princeton MN Indpt Sch Dist No 477(12) 5.125% 2/1/2024 Aaa 1,000 1,026,520
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser D 5.375% 7/1/2036 BBB+ 500 553,605
Puerto Rico Comwlth Pub Impt(15)(16) 5.00% 7/1/2028 AAA 325 344,948
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.75% 8/1/2030 Aaa 500 517,470
--------------
TOTAL 4,472,835
--------------
TRANSPORTATION 13.36%
Minneapolis & St Paul MN Met
Comm Arpt Rev Sub Ser C(11) 5.25% 1/1/2026 AAA 2,000 2,117,960
Minneapolis & St Paul MN Met
Comm Arpt Rev Ref Sub Ser C(11) 5.00% 1/1/2031 AAA 500 521,770
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
67
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
MISSOURI TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Minneapolis & St Paul MN Met
Comm Arpt Rev Sub Ser A(2) 5.00% 1/1/2035 AAA $ 1,000 $ 1,040,460
Minneapolis & St Paul MN Met
Sub Ser A(16) 5.00% 1/1/2023 AAA 1,000 1,046,250
St Paul MN Port Auth Lease
Rev Office Bldg at Robnert St 3-11 5.00% 12/1/2027 AA+ 1,000 1,040,690
--------------
TOTAL 5,767,130
--------------
WATER/SEWER 4.66%
MN Pub Facs Auth Ser A 4.40% 3/1/2024 AAA 2,000 2,013,920
--------------
TOTAL INVESTMENTS IN MUNICIPAL BONDS 98.62%
(cost $40,889,234) 42,584,907
==============
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES 1.38% 597,347
--------------
NET ASSETS 100.00% $ 43,182,254
==============
</Table>
SCHEDULE OF INVESTMENTS
MISSOURI TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
MUNICIPAL BONDS 98.85%
EDUCATION 14.19%
Bowling Green MO Sch Dist R-I
Bldg Corp Leasehold Rev(16) 5.85% 3/1/2020 Aaa 1,000 1,096,420
Curators Univ MO Sys Facs Rev Ser A 5.00% 11/1/2031 AA 3,000 3,133,530
Kansas Cnty MO Met Cmnty
Colleges Bldg Corp Rev Ref(11) 5.00% 7/1/2021 Aaa 1,000 1,051,290
MO St Hlth & Edl Facs Auth Ref
Washington Univ Ser B 5.00% 3/1/2030 AAA 1,800 1,863,648
MO St Hlth & Edl Facs Auth Rev
Edl Facs Washington Univ 5.00% 2/15/2033 AAA 6,995 7,269,484
MO St Hlth & Edl Facs Auth
Washington Univ Ser A 4.75% 11/15/2037 AAA 2,050 2,066,564
MO St Hlth & Edl Facs Auth
Washington Univ Ser A 5.00% 2/15/2022 AAA 600 638,718
MO St Hlth & Edl Facs Auth
Webster Univ(16) 5.25% 4/1/2021 Aaa 2,000 2,131,240
Puerto Rico Comwlth
Pub Impt Rites PA 1280 RIBs 6.795% 7/1/2034 AA+ 2,000 2,119,600
University MO Univ Rev Ref
Sys Facs Ser B(15)(16) 5.00% 11/1/2027 AAA 1,500 1,561,230
--------------
TOTAL 22,931,724
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
68
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MISSOURI TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
GENERAL OBLIGATION 15.39%
Belton MO Sch Dist No 124 MO
Direct Deposit Pg(12) 6.00% 3/1/2020 AAA $ 1,770 $ 1,952,186
Franklin Cnty MO Reorg Sch
Dist No R-XV 6.00% 3/1/2020 AA+ 390 430,478
Hazelwood MO Sch Dist Impt MO
Direct Dep Pg 5.25% 3/1/2020 AA+ 630 686,341
Marion Cnty MO Sch Dist No 060
Ref & Impt MO Direct Dep(12) 5.00% 3/1/2025 AAA 1,900 2,020,061
North Kansas City MO Sch Dist No 74
Ref & Impt MO Direct Dep 5.00% 3/1/2025 AA+ 2,000 2,102,540
Puerto Rico Comwlth
Pub Impt Ser A ETM(15)(16) 5.50% 7/1/2029 AAA 1,000 1,184,000
Puerto Rico Comwlth Pub Impt Ser B(11) 5.50% 7/1/2011 AAA 3,985 4,428,730
Puerto Rico Muni Fin Agy Ser A(12) 5.75% 8/1/2012 AAA 4,500 4,952,790
St Louis Cnty MO Pkwy Sch Ser A 5.00% 3/1/2024 AA+ 3,320 3,525,674
St Louis Cnty MO Sch Dist
No R-8 Lindbergh(16) Zero Coupon 3/1/2018 AAA 2,080 1,204,861
St Louis MO Bd Ed Ref MO
Direct Dep Pg(16) 5.00% 4/1/2013 AAA 1,000 1,088,440
University City MO Sch Dist(16) 10.00% 2/15/2008 AAA 1,175 1,301,512
--------------
TOTAL 24,877,613
--------------
HEALTH CARE SYSTEM 1.66%
Joplin MO Indl Dev Auth
Hlthfacs Rev Freeman Hlth Pj 5.75% 2/15/2035 BBB+ 2,500 2,685,550
--------------
HEALTHCARE 8.11%
Cape Girardeau Cnty MO Ind
Dev Auth Hlthcare Facs Rev 5.75% 6/1/2032 A-(c) 1,600 1,674,480
Hannibal MO Ind Dev Auth Hlth
Fac Rev Regl Hosp Ser A(12) 5.625% 3/1/2012 AAA 2,170 2,234,579
MO St Hlth & Edl Facs Auth BJC Hlth 5.25% 5/15/2032 AA 5,000 5,239,150
MO St Hlth & Edl Facs Auth Rev
Sr Living Facs Lutheran Sr-A 5.375% 2/1/2035 A-(c) 2,750 2,852,878
MO St Hlth & Edl Facs Auth
Rites PA 1049 RIBs(2) 11.987% 6/1/2010 AAA(b) 855 1,101,813
--------------
TOTAL 13,102,900
--------------
HOUSING 3.38%
MO St Dev Fin Bd Multi Fam
Rev Quality Hill Pj Ser A(17) 5.60% 9/15/2028 AA 2,115 2,147,973
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
69
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MISSOURI TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MO St Dev Fin Bd Solid Waste
Disp Rev P & G Paper Pj AMT 5.20% 3/15/2029 AA- $ 1,000 $ 1,100,730
MO St Hsg Dev Cmnty Sing Fam
Mtg Rev Hmownr Ln Pg A 1 AMT(14) 5.90% 9/1/2035 AAA 1,000 1,077,270
MO St Hsg Dev Cmnty Mtg Rev
Sing Fam Mtg Rev AMT(14) 5.375% 9/1/2022 AAA 870 872,445
MO St Hsg Dev Cmnty Mtg Rev
Sing Fam Ser E-1 AMT(14) Zero Coupon 3/1/2029 AAA 915 257,334
--------------
TOTAL 5,455,752
--------------
LEASE 7.96%
Gladstone MO Ser A COP(2) 5.35% 6/15/2016 Aaa 1,095 1,180,465
Grandview MO COP(11) 5.00% 1/1/2027 Aaa 1,700 1,780,784
Kansas City MO Muni Assistance Corp
Var Leasehold Impt H Roe A(2) 2.73%# 4/15/2034 AAA 1,600 1,600,000
Kansas City MO Sch Dist Bldg
Ref Elem Sch Pj Ser B(11) 5.00% 2/1/2012 Aaa 1,090 1,179,391
MO Dev Fin Bd Cultural Facs
Nelson Gallery Fndtn Ser A(16) 5.00% 12/1/2030 AAA 3,300 3,427,215
MO St Regl Convtn & Sports
Complex Auth Ref Convtn(2) 5.25% 8/15/2016 AAA 2,405 2,646,822
St Francois Cnty MO COP(11) 5.00% 2/1/2025 AAA 1,000 1,054,810
--------------
TOTAL 12,869,487
--------------
MISCELLANEOUS 8.82%
Kansas City MO Muni Assistance Corp
Rev Leasehold Ser 2001A(2) 5.00% 3/1/2019 AAA 1,500 1,585,830
Kansas City MO Muni Assistance Corp
Rev Ser A 5.125% 3/1/2019 A2 1,100 1,152,910
Kansas City MO Muni
Assistance Leasehold Bartle(16) 5.00% 4/15/2020 AAA 1,500 1,529,475
MO Dev Fin Bd Cultural Facs
Nelson Gallery(16) 5.25% 12/1/2013 AAA 2,305 2,519,849
MO St Dev Fin Bd Infra Fac
Rev Hartman Hrtge Ctr Ser A(2) 5.875% 4/1/2020 Aaa 1,000 1,079,070
Puerto Rico Pub Bldgs Auth
Rev Govt Facs Ser I GTD 5.25% 7/1/2033 BBB 2,500 2,648,900
Puerto Rico Pub Bldgs Auth
Rev Ref Govt Facs Ser C GTD 5.75% 7/1/2018 BBB 1,000 1,149,500
St Louis MO Ind Dev Auth Rev
Convtn Ctr Hotel(2) Zero Coupon 7/15/2020 AAA 2,000 1,021,300
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
70
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MISSOURI TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
St Louis MO Muni Fin Corp
Leas Carnahan Courthouse Ser A(11) 5.125% 2/15/2027 Aaa $ 1,500 $ 1,574,970
--------------
TOTAL 14,261,804
--------------
POWER 2.29%
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN 5.125% 7/1/2029 A- 1,500 1,568,565
Puerto Rico Elec Pwr Auth Pwr
Rev Ser RR(19) 5.00% 7/1/2025 AAA 2,000 2,126,680
--------------
TOTAL 3,695,245
--------------
PRE-REFUNDED 19.61%
Boone Cnty MO Reorg Sch Dist
No R-6 6.00% 3/1/2020 AA+ 500 551,680
Mehlville MO Sch Dist No R9 MO
Cap Impt Pj COP(12) 5.25% 9/1/2013 AAA 1,000 1,105,200
MO Sch Bds Assoc Lease Partn
NIXA Reorg Sch Dist R-2(17) 5.40% 3/1/2020 AA 850 912,126
MO St Bonne Terre Prison Pj
Ser A COP(2) 5.15% 6/1/2018 AAA 1,015 1,085,624
MO St Envr Impt & Enrg St
Revolving FD-D 5.90% 1/1/2019 Aaa 1,860 1,892,159
MO St Envr Impt & Enrg St
Revolving FD-E 5.625% 7/1/2016 Aaa 630 655,049
MO St Hlth & Edl Facs Auth Rev Ser A(2) 5.25% 6/1/2028 AAA 5,000 5,518,800
MO St Hlth & Edl Facs Auth
Washington Univ Ser A 6.00% 3/1/2030 Aaa 850 951,082
Muni Secs Trust Ctfs Ser 7005
Cl B ETM RIBs+ 8.148% 10/1/2040 Aaa 3,050 3,611,383
Puerto Rico Comwlth Ser A ETM 5.50% 10/1/2040 AAA 2,700 2,948,481
Puerto Rico Comwlth Pub Impt Ser A 5.125% 7/1/2031 AAA 1,210 1,322,542
Springfield MO Sch Dist No R12
MO Direct Deposit Pg 5.85% 3/1/2020 AA+ 500 548,640
St Louis Cnty MO Pattonville
No R-3 Sch Dist(11) 6.00% 3/1/2019 AAA 845 945,487
St Louis MO Arpt Rev Arpt
Dev Pg Ser A(16) 5.25% 7/1/2031 AAA 2,000 2,193,520
St Louis MO Muni Fin Corp
Lease Rev City Justice Ctr Ser A(2) 6.00% 2/15/2019 AAA 3,500 3,609,550
St Louis MO Muni Fin Corp
Lease Rev City Justice Ctr Ser A(2) 6.00% 2/15/2020 Aaa 760 851,246
St Louis MO Pkg Fac Rev ETM(16) 5.375% 12/15/2021 AAA 10 10,450
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
71
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MISSOURI TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
St Louis MO Pub Safety(11) 5.125% 2/15/2018 AAA $ 270 $ 289,235
St Louis MO Sch Dist(11) 6.00% 4/1/2012 AAA 575 583,815
University MO Univ Rev Sys Facs 5.80% 11/1/2027 AA 1,975 2,105,054
--------------
TOTAL 31,691,123
--------------
RESOURCE RECOVERY 1.61%
MO St Envr Impt & Enrg
Unrefunded Bal St Revolving B 7.20% 7/1/2016 Aaa 1,085 1,102,772
MO St Envr Impt & Enrg
Unrefunded Bal St Revolving D 5.625% 7/1/2016 Aaa 220 226,395
MO St Envr Impt & Enrg
Unrefunded Bal St Revolving E 5.90% 1/1/2019 Aaa 240 244,054
St Louis MO Ind Dev Auth
Anheuser-Busch Pj AMT 5.875% 11/1/2026 A+ 1,005 1,025,854
--------------
TOTAL 2,599,075
--------------
TRANSPORTATION 10.05%
Bi State Dev Agy MO Met Dist
Rev Metrolink Cross Cnty Pj B(12) 5.00% 10/1/2032 AAA 3,500 3,640,140
Columbia MO Spl Oblig Cap Impt 5.50% 2/1/2016 AA- 330 332,600
MO St Hwy & Trans Commn St Rd
Rev Ser A 5.00% 2/1/2022 AAA 1,970 2,077,858
MO St Hwy & Trans Commn St Rd
Rev Ser A 5.25% 2/1/2020 AAA 1,830 1,968,549
Puerto Rico Comwlth Hwy &
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2036 BBB+ 500 547,530
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites PA 1052 RIBs 8.225% 1/1/2010 BBB+(b) 2,500 3,147,450
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser K(d) 5.00% 7/1/2045 BBB+ 1,750 1,787,783
St Louis MO Arpt Rev Airport Ser A(16) 5.125% 7/1/2022 AAA 2,000 2,110,040
St Louis MO Arpt Rev Lambert
Int'l Ser B AMT(11) 5.25% 7/1/2027 AAA 625 638,812
--------------
TOTAL 16,250,762
--------------
WATER/SEWER 5.78%
Metropolitan St Louis MO Swr
Dist Wastewtr Sys Rev Ser A(16) 5.00% 5/1/2034 AAA 3,900 4,079,634
MO St Envr Impt & Enrg Res
Auth Wtr Pollutn Ref Rev Pg A 5.00% 7/1/2014 Aaa 1,000 1,096,260
MO St Ref Wtr Pollutn Ctl Ser B 4.00% 10/1/2007 AAA 1,000 1,020,330
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
72
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
MISSOURI TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
St Charles Cnty MO Pub Wtr
Supply Dist No 2 COP(16) 5.125% 12/1/2027 Aaa $ 3,000 $ 3,148,980
--------------
TOTAL 9,345,204
--------------
TOTAL INVESTMENTS IN MUNICIPAL BONDS 98.85%
(cost $152,387,509) 159,766,239
==============
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES 1.15% 1,857,628
--------------
NET ASSETS 100.00% $ 161,623,867
==============
</Table>
SCHEDULE OF INVESTMENTS
NEW JERSEY TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
MUNICIPAL BONDS 100.81%
EDUCATION 13.72%
Higher Ed Stud Assist Auth NJ
Student Loan Rev Ser A AMT(16) 6.15% 6/1/2019 AAA 695 710,922
NJ Econ Dev Auth
Rev Sch Facs Constr Ser 0(d) 5.125% 3/1/2030 AA- 2,500 2,622,550
NJ St Edl Facs Auth Rev
Kean Univ Ser D(11) 5.00% 7/1/2033 AAA 2,500 2,603,975
NJ St Edl Facs Auth Rev
Princeton Theological Seminary 5.00% 7/1/2026 AAA 2,500 2,639,275
NJ St Edl Facs Auth Rev
Ref Rowan Univ Ser D(2) 4.50% 7/1/2030 AAA 1,100 1,096,678
NJ St Edl Facs Auth Rev Ser I Rowan(11) 5.125% 7/1/2030 AAA 2,650 2,804,972
NJ St Edl Facs Auth Rev
William Paterson Ser E(19) 5.00% 7/1/2027 AAA 2,500 2,619,150
Puerto Rico Comwlth
Rites PA 1280 RIBs 6.795% 7/1/2034 AA+ 2,000 2,119,600
Rutgers St Univ NJ COP(2) 5.00% 1/1/2024 AAA 800 846,992
Rutgers St Univ NJ Ser A 5.20% 5/1/2027 AA 750 782,348
--------------
TOTAL 18,846,462
--------------
GENERAL OBLIGATION 3.27%
Millburn Twp NJ Sch Dist 5.35% 7/15/2018 Aa1 1,050 1,205,431
Millburn Twp NJ Sch Dist 5.35% 7/15/2019 Aa1 250 288,053
Montville Twp NJ Fire Dist No 23 5.25% 7/15/2016 A2 410 447,802
Pohatcong Twp NJ Sch Dist(12) 5.25% 7/15/2026 AAA 1,335 1,527,948
Puerto Rico Comwlth Pub Impt(5)(12) 4.50% 7/1/2023 AAA 1,000 1,015,290
--------------
TOTAL 4,484,524
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
73
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW JERSEY TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
HEALTHCARE 14.27%
NJ Econ Dev Auth Rev
Masonic Charity Fndtn Pj 6.00% 6/1/2025 A+ $ 1,000 $ 1,114,100
NJ Hlthcare Fac Fin Auth Rev
Bayonne Hosp(12) 6.25% 7/1/2012 AAA 1,370 1,387,618
NJ Hlthcare Fac Fin Auth Rev
Mtg Englewood Hosp(9)(16) 5.25% 8/1/2013 AAA 1,445 1,580,700
NJ Hlthcare Fac Fin Auth Rev
Robert Wood Johnson Univ Hosp 5.75% 7/1/2031 A 4,000 4,311,720
NJ Hlthcare Fac Fin Auth Rev
Spectrum For Living Ser B(9) 6.50% 2/1/2022 AAA 735 739,006
NJ Hlthcare Facs Fin Auth Rev
Cap Hlth Sys Oblig Grp Ser A 5.375% 7/1/2033 Baa1 2,000 2,069,540
NJ Hlthcare Facs Fin Auth Rev
St Clare's Hosp Ser A(17) 4.75% 7/1/2025 AA 1,100 1,102,266
NJ Hlthcare Facs Fin Auth Rev
RWJ Hlthcare Corp Ser B(17) 5.00% 7/1/2035 AA 1,000 1,034,220
Passaic Cnty NJ Impt Auth Lease Rev
Preakness Hlthcare Ctr Pj(2) 5.00% 5/1/2035 Aaa 1,500 1,568,445
Puerto Rico Indl Tourist Ed &
Envr Ctrl Fac Hosp Ser A 6.125% 11/15/2030 AA 1,000 1,119,740
Puerto Rico Indl Tourist Ed
Envr Ctrl Fac Hosp Ser A 6.125% 11/15/2025 AA 415 466,136
Puerto Rico Indl Tourist Ed
Mutuo Oblig Grp Ser A(16) 6.25% 7/1/2024 AAA 1,000 1,019,040
Univ Medicine & Dentistry NJ COP(16) 5.00% 6/15/2036 AAA 2,000 2,079,920
--------------
TOTAL 19,592,451
--------------
HOUSING 0.07%
Virgin Islands Hsg Fin Auth
Sing Fam Rev Ser A AMT(13) 6.50% 3/1/2025 AAA 100 101,102
--------------
INDUSTRIAL 5.68%
NJ Econ Dev Auth Amer Wtr
Co Inc Ser B AMT(11) 5.375% 5/1/2032 AAA 5,000 5,208,150
NJ Econ Dev Auth Middlesex
Wtr Co Pj AMT(16) 5.35% 2/1/2038 AAA 2,500 2,585,425
--------------
TOTAL 7,793,575
--------------
LEASE 2.27%
Morris-Union Jointure Commn NJ COP(17) 5.00% 5/1/2027 AA 1,000 1,037,720
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
74
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW JERSEY TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Rutgers St Univ NJ COP(2) 5.00% 1/1/2038 AAA $ 2,000 $ 2,080,640
--------------
TOTAL 3,118,360
--------------
MISCELLANEOUS 6.19%
Carteret NJ Bd Ed COP(16) 5.75% 1/15/2030 Aaa 80 87,478
Carteret NJ Bd Ed COP(16) 6.00% 1/15/2024 Aaa 430 476,771
Hudson Cnty NJ Impt Auth
Hudson Regl Fire/Rescue Ser A(2) 5.625% 9/1/2019 Aaa 100 108,373
Middlesex Cnty NJ Impt Auth
Cnty Open Space Tr Fd GTD 5.25% 9/15/2022 AAA 1,910 2,073,783
Monmouth Cnty NJ Impt Auth
Rev Unrefunded Bal Govtl Ln(16) 6.40% 12/1/2009 AAA 195 198,142
NJ Econ Dev Auth Rev
Motor Vehicle Sur Rev Ser A(16) 5.00% 7/1/2034 AAA 485 505,535
NJ Econ Dev Auth Rev
Muni Rehab(2) 5.00% 4/1/2028 AAA 1,130 1,187,562
NJ Envr Infra Ser 2004A 5.25% 9/1/2020 AAA 2,000 2,148,020
Puerto Rico Pub Bldgs Auth Rev
Govt Facs Ser I GTD 5.25% 7/1/2033 BBB 1,250 1,324,450
Rahway NJ COP(16) 5.625% 2/15/2020 Aaa 365 396,766
--------------
TOTAL 8,506,880
--------------
POWER 7.01%
Brick Twp NJ Muni Util Auth(11) 5.00% 12/1/2025 Aaa 2,000 2,110,540
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN(16) 5.00% 7/1/2032 AAA 2,000 2,093,880
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN 5.125% 7/1/2029 A- 1,000 1,045,710
Puerto Rico Elec Pwr Auth Pwr
Rev Ser RR(19) 5.00% 7/1/2025 AAA 1,625 1,727,928
Puerto Rico Elec Pwr Auth Pwr
Rev Ser RR(19) 5.00% 7/1/2026 AAA 2,500 2,652,200
--------------
TOTAL 9,630,258
--------------
PRE-REFUNDED 28.75%
Casino Reinvestment Dev Auth
NJ Parking Fee Rev Ser A(12) 5.25% 10/1/2015 AAA 100 104,470
Chathams Dist NJ Bd Ed(16) 5.00% 1/15/2019 Aaa 1,020 1,101,263
Chathams Dist NJ Bd Ed(16) 5.125% 1/15/2024 Aaa 595 645,974
Chathams Dist NJ Bd Ed(16) 5.25% 1/15/2026 Aaa 1,500 1,637,505
LaFayette Yard NJ Cmnty Dev GTD(16) 5.625% 4/1/2021 Aaa 200 221,510
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
75
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW JERSEY TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Muni Secs Trust Ctfs Ser 7005
Cl B ETM RIBs+ 8.148% 10/1/2040 Aaa $ 1,000 $ 1,184,060
NJ Bldg Auth St Bldg Rev 5.375% 6/15/2019 AA- 450 484,641
NJ Bldg Auth St Bldg Ser A(12) 5.25% 12/15/2019 AAA 1,000 1,107,720
NJ Econ Dev Auth Rev Sch
Facs Constr Ser A(2) 5.25% 6/15/2015 AAA 2,500 2,740,200
NJ St Edl Facs Auth Rev
Princeton Univ Ser B 5.125% 7/1/2019 AAA 355 379,531
NJ St Edl Facs Auth Rev
Princeton Univ Ser H 5.25% 7/1/2017 AAA 700 760,032
NJ St Edl Facs Auth Rev
Princeton Univ Ser H 5.25% 7/1/2022 AAA 2,560 2,779,546
NJ St Edl Facs Auth Rev
Princeton Univ Ser H 5.25% 7/1/2026 AAA 2,350 2,551,536
NJ St Edl Facs Auth Rev
Princeton Univ Ser H 5.375% 7/1/2024 AAA 2,550 2,782,560
NJ St Hwy Auth Garden St Pkwy
Gen Rev Ref Sr Pkwy(11) 5.75% 1/1/2015 AAA 200 221,468
NJ St Tpk Auth Rev Ser A 5.50% 1/1/2027 A 3,000 3,260,160
NJ St Tpk Auth Rev Ser A(16) 5.50% 1/1/2030 AAA 1,500 1,633,185
NJ St Transn Tr Fd Auth
Transn Sys Ser B 6.00% 6/15/2019 AAA 6,500 7,263,100
North Bergen Twp NJ Bd Ed COP(12) 6.125% 12/15/2022 Aaa 1,185 1,352,926
Ocean Cnty NJ Gen Impt 5.125% 9/1/2020 Aa1 1,800 1,964,646
Pohatcong Twp NJ Sch Dist(12) 5.95% 7/15/2023 AAA 650 678,126
Pohatcong Twp NJ Sch Dist(12) 5.95% 7/15/2026 AAA 250 260,817
Puerto Rico Comwlth Pub Impt Ser A 5.125% 7/1/2031 AAA 620 677,666
South Brunswick Twp NJ(11) 5.625% 12/1/2023 AAA 45 49,231
Summit NJ 5.70% 6/1/2020 AAA 325 353,743
Trenton NJ Pkg Auth Pkg Rev GTD(11) 6.00% 4/1/2017 Aaa 1,000 1,114,440
Washington Twp NJ Bd Ed Mercer Cnty(11) 5.00% 1/1/2027 Aaa 2,000 2,169,060
--------------
TOTAL 39,479,116
--------------
TOLL ROADS 2.31%
NJ St Tpk Auth Rev Rols RR II
R 323 RIBs(2) 7.129% 1/1/2035 Aaa 2,000 2,122,800
Puerto Rico Comwlth Hwy &
Trans Auth Transn Rev Ser G 5.00% 7/1/2042 BBB+ 1,025 1,049,364
--------------
TOTAL 3,172,164
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
76
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
NEW JERSEY TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
TRANSPORTATION 14.96%
Delaware River Port Auth PA &
NJ Ref Port Dist Pj Ser B(12) 5.10% 1/1/2021 AAA $ 1,435 $ 1,538,492
Delaware River Port Auth PA &
NJ Ref Port Dist Pj Ser B(12) 5.20% 1/1/2025 AAA 1,700 1,818,320
Delaware River Port Auth PA &
NJ Rev(11) 5.50% 1/1/2026 AAA 1,000 1,026,010
NJ St Tpk Auth Rev Ser C-1(2) 5.00% 1/1/2035 AAA 1,200 1,236,840
Port Auth NY & NJ(12) 5.00% 4/15/2032 AAA 4,725 4,958,273
Port Auth NY & NJ Cons 109th Ser 5.375% 1/15/2032 AA- 500 517,520
Port Auth NY & NJ Cons 119th
Ser AMT(11) 5.50% 9/15/2019 AAA 150 154,467
Port Auth NY & NJ Cons 125th Ser(12) 5.00% 10/15/2027 AAA 5,000 5,279,050
Puerto Rico Comwlth Hwy &
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2036 BBB+ 500 547,530
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites PA 1052 RIBs 8.225% 1/1/2010 BBB+(b) 2,750 3,462,195
--------------
TOTAL 20,538,697
--------------
WATER/SEWER 2.31%
NJ Wtr Supply Auth
Rev Manasquan Reservoir Wtr(16) 5.00% 8/1/2031 AAA 1,810 1,909,043
North Hudson Swr Auth NJ Rev Ser C(16) 5.00% 8/1/2022 Aaa 1,025 1,072,837
Ocean Twp NJ Swr Auth Ref Ser B(11) 5.25% 12/1/2011 Aaa 170 186,634
--------------
TOTAL 3,168,514
--------------
TOTAL MUNICIPAL BONDS (cost $129,665,845) 138,432,103
==============
<Caption>
SHARES
(000)
---------
SHORT-TERM INVESTMENT 0.10%
MONEY MARKET MUTUAL FUND 0.10%
Dreyfus NJ Municipal Cash Management (Cost $131,420) 131 131,420
==============
TOTAL INVESTMENTS IN SECURITIES 100.91% (Cost $129,797,265) 138,563,523
==============
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS (0.91%) (1,244,132)
--------------
NET ASSETS 100.00% $ 137,319,391
==============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
77
<Page>
SCHEDULE OF INVESTMENTS
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 96.94%
EDUCATION 10.70%
Albany Cnty NY Indl Dev Agy
Albany College of Pharmacy A 5.625% 12/1/2034 BBB- $ 700 $ 742,329
Erie Cnty NY Indl Dev Agy
City Sch Dist Buffalo Pj(12) 5.75% 5/1/2026 AAA 1,000 1,127,460
Hempstead Town NY Ind Dev Agy
Civic Fac Rev Hofstra Univ Pj(16) 5.80% 7/1/2015 AAA 750 780,375
NY New York City Indl Dev Agy
NY Institute of Tech(16) 5.25% 3/1/2023 AAA 100 107,940
NY St Dorm Auth Lease
Rev Cap Apprec Court Fac Zero Coupon 8/1/2021 AA+ 3,515 1,768,185
NY St Dorm Auth Rev 4201 Schools Pg 6.25% 7/1/2020 AA- 1,685 1,894,412
NY St Dorm Auth Rev Colgate Univ(16) 6.00% 7/1/2016 AAA 1,000 1,174,100
NY St Dorm Auth Rev
New York Univ Ser A(2) 5.75% 7/1/2015 AAA 2,000 2,314,860
NY St Dorm Auth Rev Pratt Institute(17) 6.00% 7/1/2024 AA 1,000 1,100,320
NY St Dorm Auth Rev Pratt Institute(17) 6.00% 7/1/2028 AA 2,000 2,197,680
NY St Dorm Auth Rev Sp Act
Sch Dist Pj(16) 6.00% 7/1/2016 AAA 1,400 1,437,996
NY St Dorm Auth Revs
New York Univ A(11) 5.00% 7/1/2034 AAA 3,125 3,266,531
NY St Dorm Auth Revs Non St
Suptd Debt NYSARC Inc Ser A(12) 5.00% 7/1/2034 AAA 1,000 1,049,470
NY St Dorm Auth Revs St Univ
Suptd Debt Dorm Facs Ser B(d)(16) 4.375% 7/1/2030 AAA 1,000 961,360
NY St Dorm Auth Revs
Unrefunded Bal City Univ 2nd B 5.375% 7/1/2007 AA- 3,915 4,069,173
Rensselaer Cnty NY Indl Dev
Polytech Inst Ser B(2)(18) 5.50% 8/1/2022 AAA 200 214,524
Schenectady NY Indl Dev Agy
Civic Fac Rev Union College(2) 5.625% 7/1/2031 Aaa 1,500 1,654,200
St Lawrence Cnty NY Indl
Civic Fac Rev Clarkson Univ Pj 5.125% 7/1/2021 A3 250 260,050
--------------
TOTAL 26,120,965
--------------
GENERAL OBLIGATION 14.95%
Erie Cnty NY Indl Dev Agy Sch
Fac Rev City of Buffalo Pj(12) 5.75% 5/1/2023 AAA 1,250 1,385,950
New York NY Ref Ser B 5.75% 8/1/2016 A+ 1,000 1,107,930
New York NY Ser E 5.25% 8/1/2014 A+ 1,000 1,084,590
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
78
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
New York NY Ser J 5.50% 6/1/2022 A+ $ 5,095 $ 5,534,902
New York NY Ser O 5.00% 6/1/2030 A+ 10,000 10,363,700
New York NY Sub Ser C-1 5.25% 8/15/2026 A+ 2,500 2,669,525
New York NY Unrefunded Bal C(12) 5.75% 3/15/2027 AAA 1,560 1,728,636
New York NY Unrefunded
Bal Ser A(11)(18) 6.00% 5/15/2030 AAA 900 1,005,120
New York NY Unrefunded Bal Ser C 5.625% 3/15/2020 NR 155 169,548
New York NY Unrefunded Bal Ser G 5.875% 8/1/2019 A+ 510 569,150
Puerto Rico Comwlth Pub Impt 5.25% 7/1/2018 BBB 2,000 2,201,260
Puerto Rico Comwlth Pub Impt Ser A 5.00% 7/1/2033 BBB 500 513,520
Puerto Rico Comwlth Pub Impt Ser A 5.00% 7/1/2034 BBB 4,645 4,783,886
Puerto Rico Comwlth Pub Impt Ser A 5.25% 7/1/2024 BBB 1,500 1,589,820
Puerto Rico Comwlth
Unrefunded Bal Pub Impt Ser A 5.375% 7/1/2028 BBB 1,090 1,154,070
Puerto Rico Comwlth
Unrefunded Pub Impt(15)(16) 5.00% 7/1/2028 AAA 605 622,920
--------------
TOTAL 36,484,527
--------------
HEALTHCARE 5.40%
Cortland Cnty NY Indl Dev Agy
Cortland Mem Hosp Pj(17) 5.625% 7/1/2024 AA 1,750 1,903,843
NY New York City Indl Dev Agy
Rev Harbor House Pj A(13) 5.875% 5/20/2044 AA+ 610 689,690
NY St Dorm Auth Rev Insd NY
St Rehab Assn Ser A(2) 5.50% 7/1/2016 AAA 935 1,025,676
NY St Dorm Auth Rev Lenox
Hill Hosp Oblig Group 5.375% 7/1/2020 Ba2 1,000 1,044,990
NY St Dorm Auth Rev Mental
Hlth Svc Fac(15)(16) 6.00% 8/15/2012 AAA 1,460 1,668,415
NY St Dorm Auth Rev Mtg
Nursing Home A(9)(16) 5.40% 2/1/2031 AAA 300 319,167
NY St Dorm Auth Rev Mtg
Nursing Home A(9)(16) 5.50% 8/1/2030 AAA 1,000 1,072,480
NY St Dorm Auth Rev Mtg
Nursing Home A(9)(16) 5.50% 8/1/2038 AAA 1,000 1,068,850
NY St Dorm Auth Rev Utd
Cerebral Palsy Aff No 1-A(2) 5.75% 7/1/2018 AAA 1,000 1,119,500
NY St Dorm Auth Revs
Mtg Hosp Spl Surgery(d)(9)(16) 5.00% 8/15/2033 AAA 1,700 1,781,464
NY St Dorm Auth Revs Non St Suptd
Debt Rochester Gen Hosp(17) 5.00% 12/1/2035 AA 1,400 1,448,398
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
79
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
NY St Dorm Auth Revs
Unrefunded Mental Hlth Svcs B(16) 6.00% 2/15/2025 AAA $ 15 $ 16,421
NY St Dorm Auth Revs
Unrefunded Mental Hlth Svcs B(16) 6.00% 2/15/2030 AAA 15 16,390
--------------
TOTAL 13,175,284
--------------
HOUSING 3.06%
NY New York City Hsg Dev Corp
Multi Fam Hsg Rev Ser A AMT 5.50% 11/1/2034 AA 1,500 1,544,895
NY New York City Hsg Dev Corp
Mult Fam Hsg Ser A-1 4.50% 11/1/2027 AA 1,530 1,519,367
NY New York City Hsg Dev Corp
Ser B-2 AMT 5.30% 5/1/2036 AA 2,000 2,058,200
NY St Dorm Auth Revs Ref Dept
of Hlth 5.00% 7/1/2023 AA- 400 420,488
NY St Dorm Auth Revs Insd
Jewish Bd Fam & Children(2) 5.00% 7/1/2023 AAA 500 527,515
NY St Dorm Auth Revs Upstate
Cmnty Colleges Ser B 5.25% 7/1/2021 AA- 1,000 1,083,690
NY St Mtg Agy Rev Hmownr Mtg
Ser 70 5.40% 4/1/2022 Aa1 70 72,501
NY St Mtg Agy Rev Hmownr Mtg
Ser 111 AMT(16) 4.55% 4/1/2023 AAA 250 247,620
--------------
TOTAL 7,474,276
--------------
INDUSTRIAL 1.21%
Broome Cnty NY Indl Dev Agy
Univ Plaza Phase II Pj Ser B(1) 5.10% 8/1/2036 A 500 510,650
NY Indl Dev Agy Pkg Royal
Charter Properties Inc(12) 5.75% 12/15/2029 AAA 1,000 1,116,620
NY New York City Indl Dev Agy
United Jewish Appeal Fed Pj A 5.00% 7/1/2027 Aa2 1,250 1,322,437
--------------
TOTAL 2,949,707
--------------
LEASE 1.99%
NY St Urban Dev Corp Rev St Fac 5.70% 4/1/2020 AA- 4,150 4,865,004
--------------
MISCELLANEOUS 2.24%
Broome Cnty NY Indl Dev Agy
Univ Plaza LLC Phase 1 Pj A(1) 5.20% 8/1/2030 A 750 774,585
Broome Cnty NY Indl Dev Agy
Univ Plaza LLC Phase 1 Pj A(1) 5.20% 8/1/2036 A 1,000 1,029,150
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
80
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
New York City Transn Fin Auth
Rev Ser A 5.00% 11/15/2026 AAA $ 730 $ 765,091
NY New York City Tr Cultr Res
Rev Museum of American Art(1) 6.00% 7/1/2022 A 500 544,855
Puerto Rico Pub Bldgs Auth
Rev Govt Fac Ser G GTD 5.00% 7/1/2026 BBB 2,000 2,066,840
Puerto Rico Pub Bldgs Auth
Rev Unrefunded Bal Govt Facs Ser D 5.25% 7/1/2027 BBB 265 279,416
--------------
TOTAL 5,459,937
--------------
MULTI FAMILY REVENUE BONDS 0.90%
New York City Transn Fin Auth
Unrefunded Bal Fut Tax 2005 C 5.50% 5/1/2025 AAA 220 236,515
NY New York City Hsg Dev Corp
Mult Fam Hsg Rev Ser A1 4.60% 5/1/2035 AA 1,955 1,939,321
NY St Dorm Auth Revs
Unrefunded 05 Mental D(15)(16) 6.00% 8/15/2021 AAA 20 21,114
--------------
TOTAL 2,196,950
--------------
POWER 4.87%
NY St Enrg Res & Dev Auth Gas
Fac Rev Bklyn Ser B RIBs AMT 10.73% 7/1/2026 A+ 4,000 4,370,800
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN(16) 5.00% 7/1/2032 AAA 1,500 1,570,410
Puerto Rico Elec Pwr Auth Ref
Ser PP(11) 5.00% 7/1/2025 AAA 2,000 2,115,900
Puerto Rico Elec Pwr Auth Ref
Rev Ser II 5.25% 7/1/2031 A- 3,625 3,822,563
--------------
TOTAL 11,879,673
--------------
PRE-REFUNDED 33.95%
Albany NY Muni Wtr Fin Auth
Wtr & Swr Sys Rev Ser A(11) 6.375% 12/1/2017 AAA 650 737,002
Buffalo NY Muni Wtr Fin Auth
Wtr Sys Rev(11) 5.75% 7/1/2021 AAA 500 520,335
Buffalo NY Muni Wtr Fin Auth
Wtr Sys Rev(12) 6.00% 7/1/2029 AAA 500 555,245
Metropolitan Transn Auth NY
Commuter Fac Rev Ser A(11) 6.00% 7/1/2016 AAA 2,000 2,156,520
Metropolitan Transn Auth NY
Commuter Fac Rev Ser A(11) 6.00% 7/1/2021 AAA 5,000 5,212,400
Metropolitan Transn Auth NY
Commuter Fac Rev Ser A(11) 6.10% 7/1/2026 AAA 2,000 2,086,400
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
81
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Metropolitan Transn Auth NY
Dedicated Tax Fd Ser A(11) 4.75% 4/1/2028 AAA $ 2,500 $ 2,691,550
Metropolitan Transn Auth NY
Tran Fac Rev Svc Cntrct Ser R 5.50% 7/1/2017 AAA 1,000 1,135,500
Muni Secs Trust Ctfs Ser 7005
Cl B ETM RIBs+ 8.148% 10/1/2040 Aaa 2,000 2,368,120
Muni Assistance Corp City
New York NY Ser E 6.00% 7/1/2006 AAA 2,125 2,173,641
New York City Transn
Fin Auth Fut Tax 2004 Ser C 5.50% 5/1/2025 AAA 5 5,453
New York City Transn
Fin Auth Fut Tax 2005 C 5.50% 5/1/2025 AAA 330 359,888
New York City Transn Fin Auth
Fut Tax Secd C 5.50% 5/1/2025 AAA 445 485,304
New York City Transn Fin Auth
Rev Fut Tax 2nd Ser A 6.00% 8/15/2029 AAA 200 222,720
New York City Transn Fin Auth
Rev Fut Tax 2nd Ser B 6.00% 11/15/2024 AAA 950 1,071,800
New York City Transn Fin Auth
Rev Fut Tax 2nd Ser B 6.00% 11/15/2029 AAA 2,000 2,256,420
New York NY C(12) 5.75% 3/15/2027 AAA 3,440 3,897,864
New York NY Ser C 5.625% 3/15/2020 A+ 845 948,808
New York NY Ser G 5.875% 8/1/2019 A+ 240 274,001
NY New York City Muni Wtr Fin Auth
Wtr & Swr Sys Rev Ser A(12) 5.375% 6/15/2026 AAA 3,000 3,081,210
NY New York City Muni Wtr Fin Auth
Wtr & Swr Sys Rev Unrefunded Bal Ser B 6.00% 6/15/2033 AA+ 1,470 1,644,974
NY New York City Muni Wtr Fin
Wtr & Sew Sys Rev Ser B 6.00% 6/15/2033 AA+ 3,360 3,791,122
NY St Dorm Auth Lease Rev
Court Facs Ser A 5.50% 5/15/2020 A+ 1,180 1,328,892
NY St Dorm Auth Lease Rev
St Univ Dorm Facs Ser A 5.50% 5/15/2026 AA- 75 77,686
NY St Dorm Auth Lease St Univ
Dorm Facs Ser A 6.00% 7/1/2030 AA- 3,500 3,952,725
NY St Dorm Auth Lease St Univ
Dorm Facs Ser A 6.25% 7/1/2020 AA- 1,250 1,422,350
NY St Dorm Auth Rev City Univ
Sys Cons 4th Gen A 5.50% 7/1/2023 AA- 1,215 1,348,286
NY St Dorm Auth Rev Pace Univ(16) 6.00% 7/1/2029 AAA 1,610 1,818,254
NY St Dorm Auth Rev St Univ
Adl Facs Ser B(12) 5.75% 5/15/2017 AAA 395 441,440
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
82
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
NY St Dorm Auth Rev Upstate
Cmnty Colleges Ser A(12) 6.00% 7/1/2015 AAA $ 300 $ 338,805
NY St Dorm Auth Revs Mental D(15)(16) 6.00% 8/15/2021 AAA 130 137,872
NY St Dorm Auth Revs Mental
Hlth Svcs B(16) 6.00% 2/15/2025 AAA 100 111,352
NY St Dorm Auth Revs Mental
Hlth Svcs B(16) 6.00% 2/15/2030 AAA 100 111,352
NY St Dorm Auth Revs Suptd
Debt Mental D(15)(16) 6.00% 8/15/2021 AAA 850 901,467
NY St Dorm Auth Revs Suptd
Debt Mental Hlth Svcs(16) 6.00% 2/15/2025 AAA 885 985,465
NY St Dorm Auth Revs Suptd
Debt Mental Hlth Svcs B(16) 6.00% 2/15/2030 AAA 885 985,465
NY St Envr Fac Corp St Clean
Wtr & Drinking 6.00% 6/15/2019 AAA 80 88,035
Puerto Rico Comwlth Aqueduct
& Swr Auth Rev ETM 10.25% 7/1/2009 AAA 545 623,028
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser B(16) 5.875% 7/1/2035 Aaa 485 545,087
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser B(16) 5.875% 7/1/2035 AAA 265 297,831
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser B 6.50% 7/1/2027 BBB+ 2,000 2,292,800
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser D 5.25% 7/1/2038 BBB+ 6,000 6,598,680
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser D 5.375% 7/1/2036 BBB+ 1,000 1,107,210
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser D 5.75% 7/1/2041 BBB+ 2,000 2,258,980
Puerto Rico Comwlth Hwy &
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2026 BBB+ 1,000 1,033,210
Puerto Rico Comwlth Pub Impt(16) 5.00% 7/1/2024 AAA 1,000 1,061,380
Puerto Rico Comwlth Pub Impt(15)(16) 5.00% 7/1/2028 AAA 1,130 1,199,359
Puerto Rico Comwlth Pub Impt 5.375% 7/1/2025 BBB 1,640 1,704,862
Puerto Rico Comwlth Pub Impt(16) 5.75% 7/1/2026 AAA 3,000 3,308,760
Puerto Rico Comwlth Pub Impt Ser A 5.375% 7/1/2028 AAA 555 613,813
Puerto Rico Pub Bldgs Auth
Rev Govt Facs Ser D GTD 5.25% 7/1/2027 A- 735 806,030
Puerto Rico Pub Fin Corp Approp E 5.50% 8/1/2029 Aaa 1,000 1,107,720
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.70% 8/1/2025 Aaa 2,000 2,192,620
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
83
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.75% 8/1/2030 Aaa $ 2,500 $ 2,587,350
Tompkins Cnty NY Indl Dev Agy
Civic Fac Cornell Univ Lake 5.625% 7/1/2020 AA+ 115 127,994
Tompkins Cnty NY Indl Dev Agy
Civic Fac Cornell Univ Lake 5.75% 7/1/2030 AA+ 1,500 1,677,660
--------------
TOTAL 82,870,097
--------------
SPECIAL TAX 0.80%
New York City Transn Fin
Unrefunded Fut Tax Secd C 5.00% 5/1/2029 AAA 1,905 1,967,579
--------------
TRANSPORTATION 12.63%
Niagara NY Frontier Auth Arpt
Buffalo Niagara Intl Ser B(16) 5.50% 4/1/2019 AAA 690 742,951
NY New York City Transn Auth RIBs(2) 8.70% 1/1/2030 Aaa 5,000 6,143,600
NY St Twy Auth Gen Rev Ser F(2) 5.00% 1/1/2030 AAA 1,000 1,050,510
Port Auth NY & NJ Cons 106th
Ser AMT 6.00% 7/1/2015 AA- 350 360,654
Port Auth NY & NJ Cons 93rd Ser 6.125% 6/1/2094 AA- 7,500 8,921,475
Port Auth NY & NJ Sp Oblig
Rev 5th Instllmnt Spl Pj Ser 4 AMT 6.75% 10/1/2019 NR 2,970 3,121,589
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites PA 1052 RIBs 8.225% 1/1/2010 BBB+(b) 2,000 2,517,960
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser G 5.00% 7/1/2033 BBB+ 605 621,359
Puerto Rico Comwlth Hwy &
Transn Auth Sub PR St Infra 5.00% 7/1/2028 BBB 1,000 1,023,090
Puerto Rico Comwlth Hwy &
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2036 BBB+ 3,500 3,832,710
Triborough Brdg & Tunl Auth
NY Gen Purp Ser A 5.25% 1/1/2020 Aa2 2,335 2,506,599
--------------
TOTAL 30,842,497
--------------
WATER/SEWER 4.24%
Niagara Falls NY Pub Wtr Auth
Wtr & Swr Sys Rev(19) 5.50% 7/15/2034 AAA 1,000 1,104,140
NY New York City Muni Wtr Fin 5.50% 6/15/2033 AA+ 3,585 3,882,663
NY St Envr Fac Corp St Clean
Wtr & Drinking 6.00% 6/15/2019 AAA 1,420 1,547,090
Puerto Rico Comwlth Infra Fin
Auth Spl Cap Apprec Ser A(11) Zero Coupon 7/1/2030 AAA 9,890 3,111,196
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
84
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
NEW YORK TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Upper Mohawk NY Regl Wtr Fin
Auth NY Wtr Sys Rev(2) 5.75% 4/1/2020 Aaa $ 650 $ 715,539
--------------
TOTAL 10,360,628
--------------
TOTAL MUNICIPAL BONDS (cost $222,625,187) 236,647,124
==============
</Table>
<Table>
<Caption>
SHARES
(000)
---------
SHORT-TERM INVESTMENT 1.03%
MONEY MARKET MUTUAL FUND 1.03%
Dreyfus NY Municipal Cash Management
(cost $2,508,831) 2,509 2,508,831
==============
TOTAL INVESTMENTS IN SECURITIES 97.97%
(cost $225,134,018) 239,155,955
==============
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES 2.03% 4,944,281
--------------
NET ASSETS 100.00% $ 244,100,236
==============
</Table>
SCHEDULE OF INVESTMENTS
TEXAS TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000)
---------
MUNICIPAL BONDS 99.19%
EDUCATION 7.77%
Fort Bend TX Indpt Sch Dist
Ref Ser A PSF GTD 5.25% 8/15/2027 AAA $ 500 535,045
Houston TX Higher Ed Fin Corp
Rice Univ 5.375% 11/15/2029 AAA 1,000 1,065,590
Lake Worth TX Indpt Sch Dist
Sch Bldg Ser A(2) 5.25% 2/15/2031 AAA 1,020 1,083,464
Raven Hills TX Higher Ed Corp
Cardinal Vlg LLC Lamar Univ(16) 5.50% 8/1/2028 Aaa 1,000 1,089,330
Rockwall TX Indpt Sch Dist
Sch Bldg PSF GTD 5.25% 2/15/2029 AAA 2,000 2,132,980
--------------
TOTAL 5,906,409
--------------
GENERAL OBLIGATION 26.12%
Aledo TX Indpt Sch Dist
Sch Bldg Ser A PSF GTD 5.125% 2/15/2033 AAA 1,000 1,050,380
Argyle TX Indpt Sch Dist Ref(12) 5.25% 8/15/2040 AAA 1,000 1,062,520
Azle TX Indpt Sch Dist Ser A
PSF GTD 6.00% 2/15/2022 Aaa 250 251,200
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
85
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
TEXAS TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Blanco TX COP(19) 5.50% 8/15/2027 AAA $ 665 $ 722,636
Comal TX Indpt Sch Dist Ref
Ser A PSF GTD 5.00% 2/1/2028 Aaa 1,000 1,039,050
Corsicana TX Indpt Sch Dist PSF GTD 5.125% 2/15/2034 AAA 500 527,150
Dallas Cnty TX Ref & Impt Ser A 5.00% 8/15/2020 AAA 250 264,005
Dallas TX Indpt Sch Dist Ref
PSF GTD 5.00% 2/15/2021 AAA 300 315,141
Mansfield TX Indpt Sch Dist PSF GTD 5.25% 2/15/2023 AAA 1,000 1,062,700
Pearland TX Indpt Sch Dist PSF GTD 5.125% 2/15/2022 AAA 1,500 1,568,835
Pflugerville TX Indpt Sch Dist PSF GTD 5.00% 8/15/2026 AAA 1,000 1,043,770
Puerto Rico Comwlth
Unrefunded Bal Pub Impt Ser A 5.125% 7/1/2031 BBB 745 769,406
Snyder TX Indpt Sch Dist Sch Bldg(2) 5.25% 2/15/2030 AAA 500 533,875
Socorro TX Indpt Sch Dist
Unrefunded Bal PSF GTD 6.00% 2/15/2015 AAA 35 36,303
TX St Transn Cmnty
Mobility Fd Ser A 4.75% 4/1/2035 Aa1 1,000 1,014,500
TX St Ser B RIBs 9.338% 9/30/2011 Aa1 5,500 6,991,270
United Indpt Sch Dist TX PSF GTD 5.125% 8/15/2026 AAA 1,000 1,051,550
Webster TX Bal Cfts Oblig Ser A(12) 6.00% 3/1/2017 NR 500 551,035
--------------
TOTAL 19,855,326
--------------
HEALTHCARE 3.89%
Harris Cnty TX Hlth Fac Mem
Hermann Hlthcare Ser A 6.375% 6/1/2029 A 1,750 1,937,723
Puerto Rico Indl Tourist Ed
Envr Ctrl Fac Hosp Ser A 6.125% 11/15/2025 AA 910 1,022,130
--------------
TOTAL 2,959,853
--------------
INDUSTRIAL 14.17%
Cass Cnty TX Ind Dev Corp
Envr Impt Rev Ser A AMT 6.00% 9/1/2025 BBB 1,000 1,040,570
Orange Cnty TX Nav & Port
Dist Ind Dev Rev North Star Steel Pj 6.375% 2/1/2017 A+ 2,400 2,473,920
Texas City TX Indl Dev Corp
Marine Term Rev Arco Pipe Line 7.375% 10/1/2020 AA+ 5,500 7,260,385
--------------
TOTAL 10,774,875
--------------
LEASE 1.40%
Harris Cnty Houston TX Sports
Auth Rev Sr Lien Ser G(16) 5.25% 11/15/2021 AAA 1,000 1,066,570
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
86
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
TEXAS TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
POWER 1.38%
Houston TX Util Sys Rev
Ref Comb First Lien(12) 5.00% 11/15/2035 AAA $ 1,000 $ 1,045,170
--------------
PRE-REFUNDED 30.01%
Austin TX Arpt Sys Rev 2003
Prior Lien AMT(16) 6.125% 11/15/2025 AAA 415 424,798
Austin TX Arpt Sys Rev
Bal 2003 Prior A AMT(16) 6.125% 11/15/2025 AAA 2,085 2,131,579
Fort Bend Cnty TX Muni Util
Dist No 25(16) 6.00% 10/1/2028 AAA 2,170 2,298,225
Gregory Portland TX Indpt Sch
Dist PSF GTD 5.50% 8/15/2020 AAA 1,075 1,181,382
Harris Cnty TX Hlth Fac Dev
St Lukes Episcopal Hosp Ser A 5.375% 2/15/2026 AA- 1,000 1,105,230
Katy TX Indpt Sch Dist Ltd
Tax PSF GTD 6.125% 2/15/2032 AAA 1,000 1,095,140
Laredo TX Indpt Sch Dist PSF GTD 5.25% 8/1/2024 AAA 1,000 1,075,020
Muni Secs Trust Ctfs Ser 7005
Cl B ETM RIBs+ 8.148% 10/1/2040 Aaa 500 592,030
Pearland TX Indpt Sch Dist Bd
Ser A PSF GTD 5.875% 2/15/2019 AAA 1,000 1,123,440
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser B 6.00% 7/1/2031 BBB+ 1,980 2,226,807
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser C 6.00% 7/1/2029 BBB+ 1,000 1,124,650
Puerto Rico Comwlth
Pub Impt RIBs(16) 8.45% 7/1/2026 Aaa 500 602,920
Puerto Rico Comwlth
Pub Impt Ser A 5.125% 7/1/2031 AAA 380 415,344
San Antonio TX Indpt Sch Dist
PSF GTD 5.50% 8/15/2024 AAA 1,000 1,084,770
San Antonio TX Indpt Sch Dist
PSF GTD 5.75% 8/15/2015 AAA 1,000 1,093,790
Socorro TX Indpt Sch Dist PSF GTD 6.00% 2/15/2015 AAA 885 921,559
University TX Univ Rev Fin
Sys Ser A 5.375% 8/15/2017 AAA 3,030 3,273,188
Webster TX Ctfs Oblig Ser A(12) 6.00% 3/1/2017 AAA(b) 940 1,045,684
--------------
TOTAL 22,815,556
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
87
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
TEXAS TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
RESOURCE RECOVERY 2.12%
Gulf Coast Waste Disp Auth TX
Swr & Solid Waste Disp Rev AMT 5.90% 4/1/2036 A+ $ 1,500 $ 1,611,795
--------------
TRANSPORTATION 4.11%
Dallas Fort Worth TX Intl
Arpt Impt Jt Ser B AMT(12) 5.00% 11/1/2035 AAA 1,000 1,012,440
Houston TX Arpt Sys Rev Sub
Lien Ser B(12) 5.50% 7/1/2030 AAA 1,000 1,070,790
North TX Thruway Auth Dallas
North Thruway Sys Rev Ref Ser A(11) 5.375% 1/1/2016 AAA 1,000 1,044,820
--------------
TOTAL 3,128,050
--------------
WATER/SEWER 8.22%
Dallas TX Wtr Wks & Swr Sys Rev Ref 5.00% 10/1/2012 AA+ 750 794,123
El Paso TX Wtr & Swr Rev Ref &
Impt Ser A(12) 5.25% 3/1/2027 AAA 1,000 1,054,380
San Antonio TX Wtr Rev Ref Sys(12) 5.00% 5/15/2028 AAA 1,000 1,035,210
Upper Trinity Regl Wtr Dist
TX Wtr Rev Sys Ser 4(11) 6.00% 8/1/2026 AAA 3,025 3,361,985
--------------
TOTAL 6,245,698
--------------
TOTAL MUNICIPAL BONDS (cost $68,950,527) 75,409,302
==============
</Table>
<Table>
<Caption>
SHARES
(000)
---------
SHORT-TERM INVESTMENT 0.00%
MONEY MARKET MUTUAL FUND 0.00%
Dreyfus Municipal Cash Management Plus
(cost $1,913) 2 1,913
==============
TOTAL INVESTMENTS IN SECURITIES 99.19%
(cost $68,952,440) 75,411,215
==============
OTHER ASSETS IN EXCESS OF
LIABILITIES 0.81% 613,429
--------------
NET ASSETS 100.00% $ 76,024,644
==============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
88
<Page>
SCHEDULE OF INVESTMENTS
WASHINGTON TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 100.15%
EDUCATION 12.66%
Central WA Univ Sys Rev(11) 5.00% 5/1/2034 Aaa $ 1,000 $ 1,036,640
Univ WA Ed Resh Rev Roosevelt Pj(15)(16) 5.375% 6/1/2029 AAA 1,100 1,161,248
WA St Higher Ed Fac Auth Rev
Gonzaga Univ Pj(16) 4.75% 4/1/2022 AAA 1,000 1,011,690
WA St Higher Ed Fac Gonzaga
Univ Pj(16) 5.125% 4/1/2034 AAA 2,080 2,181,337
Western WA Univ Rev
Unrefunded Bal Student Rec Fee(16) 5.00% 5/1/2033 AAA 630 648,453
--------------
TOTAL 6,039,368
--------------
GENERAL OBLIGATION 18.36%
Bremerton WA(2) 5.25% 12/1/2027 Aaa 1,440 1,526,141
King Cnty WA Pub Transn Sales Tax(16) 5.375% 6/1/2029 AAA 1,000 1,082,960
King Cnty WA Sch Dist No 405
Bellevue(11) 5.00% 12/1/2020 AAA 2,000 2,106,740
King Cnty WA Ser B 4.50% 1/1/2024 AA+ 320 320,061
King Cnty WA Ser B(16) 5.00% 1/1/2030 AAA 1,000 1,021,450
Port Seattle WA Ser B AMT 5.75% 12/1/2025 AA+ 750 798,338
Puerto Rico Pub Fin Corp
Comwlth App Ser A(2) 5.125% 6/1/2024 AAA 750 841,867
Skagit Cnty WA Pub Hosp
Dist No 002(16) 5.25% 12/1/2026 Aaa 1,000 1,064,210
--------------
TOTAL 8,761,767
--------------
HEALTHCARE 3.97%
Puerto Rico Indl Tourist Ed &
Envr Ctrl Fac Hosp Ser A 6.125% 11/15/2030 AA 1,000 1,119,740
Skagit Cnty WA Pub Hosp
Dist No 1 Rev Skagit Vly Hosp 5.50% 12/1/2030 Baa3 750 775,897
--------------
TOTAL 1,895,637
--------------
HOUSING 1.60%
Skagit Cnty WA Hsg Auth Low
Income Hsg Assist Rev Mtg Ln(13) 7.00% 6/20/2035 AAA 738 761,092
--------------
LEASE 2.18%
Broadway Office Pptys WA
Lease Rev King Cnty WA(16) 5.00% 12/1/2027 AAA 1,000 1,040,170
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
89
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
WASHINGTON TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MISCELLANEOUS 5.82%
Bellevue WA Convtn Ctr Auth
Spl Oblig Rev(16) Zero Coupon 2/1/2024 AAA $ 1,400 $ 586,026
Puerto Rico Pub Bldg Auth
Rev Govt Facs Ser I GTD 5.375% 7/1/2034 BBB 1,000 1,068,540
Spokane WA Pub Fac Dist Hotel
Motel & Sales Use Tax(16) 5.75% 12/1/2028 AAA 1,000 1,124,400
--------------
TOTAL 2,778,966
--------------
POWER 12.62%
Chelan Cnty WA Pub Util
Dist No 1 Cons Rev Ser A AMT(16) 6.40% 7/1/2017 AAA 1,000 1,067,450
Clark Cnty WA Pub Util
Dist No 1 Rev(12) 5.125% 1/1/2020 AAA 400 419,512
Douglas Cnty WA Pub Util
Dist No 1 Wells Hydro 8.75% 9/1/2018 AA 350 388,066
Douglas Cnty WA Pub Util
Dist No 1 Wells Hydro 2 Tier Ser B(2) 8.75% 9/1/2006 AAA 485 509,798
Douglas Cnty WA Pub Util
Dist No 1 Wells Hydro Ref Ser B(11) 5.00% 9/1/2030 AAA 1,000 1,046,080
Grant Cnty WA Pub Util
Dist No 2 Elec Rev Ser H(12) 5.00% 1/1/2022 AAA 1,000 1,019,440
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN 5.125% 7/1/2029 A- 1,500 1,568,565
--------------
TOTAL 6,018,911
--------------
PRE-REFUNDED 19.08%
Douglas Cnty WA Pub Util
Dist No 1 Wells Hydro 8.75% 9/1/2018 AA 150 166,563
King Cnty WA Sch Dist No 414
Lake Washington(5)(12) 5.50% 12/1/2019 AAA 1,000 1,102,970
Muni Secs Trust Ctfs Ser 7005
Cl B ETM RIBs+ 8.148% 10/1/2040 Aaa 1,000 1,184,060
Ocean Shores WA Wtr & Swr(12) 5.50% 12/1/2021 Aaa 1,000 1,108,260
Port Seattle WA Spl Fac Rev
Ser C AMT(16) 6.00% 9/1/2029 AAA 915 1,019,832
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser B 6.00% 7/1/2031 BBB+ 1,000 1,124,650
Univ WA Univ Revs Student Facs Fee(12) 5.50% 6/1/2019 AAA 810 893,981
Vancouver WA Ltd Tax(2) 5.50% 12/1/2025 AAA 1,255 1,384,227
Vancouver WA Wtr & Swr Rev(11) 6.00% 6/1/2020 AAA 1,000 1,098,720
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
90
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
WASHINGTON TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Western WA Univ Rev Student
Rec Fee(16) 5.00% 5/1/2033 AAA $ 20 $ 21,772
--------------
TOTAL 9,105,035
--------------
TRANSPORTATION 21.45%
Central Puget Sound WA Regl
Transit Auth Sales Tax & Motor(11) 5.25% 2/1/2021 AAA 1,750 1,954,522
Port Kalama WA Rev Ser B AMT 5.625% 12/1/2015 A3 400 407,156
Port Seattle WA Rev Ref
Intermediate Lien Ser A(16) 5.00% 3/1/2035 AAA 2,000 2,086,840
Port Seattle WA Spl Fac Rev
Unrefunded Bal Ser C AMT(16) 6.00% 9/1/2029 AAA 1,085 1,183,681
Port Tacoma WA Ser A(2) 5.25% 12/1/2034 AAA 2,000 2,125,300
Puerto Rico Comwlth Hwy &
Auth Transn Ser Rev K(d) 5.00% 7/1/2045 BBB+ 1,500 1,532,385
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites PA 1052 RIBs 8.225% 1/1/2010 BBB+(b) 750 944,235
--------------
TOTAL 10,234,119
--------------
WATER/SEWER 2.41%
Pierce Cnty WA Swr Rev(2) 5.00% 8/1/2021 AAA 1,100 1,148,433
--------------
TOTAL MUNICIPAL BONDS (cost $44,603,675) 47,783,498
==============
</Table>
<Table>
<Caption>
SHARES
(000)
---------
SHORT-TERM INVESTMENT 1.98%
MONEY MARKET MUTUAL FUND 1.98%
Dreyfus Municipal Cash Management Plus
(cost $943,809) 944 943,809
--------------
TOTAL INVESTMENTS IN SECURITIES 102.13%
(cost $45,547,484) 48,727,307
==============
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS (2.13%) (1,018,082)
--------------
NET ASSETS 100.00% $ 47,709,225
==============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
91
<Page>
SCHEDULE OF INVESTMENTS
INSURED INTERMEDIATE TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 95.77%
EDUCATION 13.27%
Allegheny Cnty PA Higher Ed
Duquesne Univ Ser A(11) 5.00% 3/1/2013 AAA $ 150 $ 163,134
Appalachian St Univ NC Rev
Ref Util Sys(16) 5.00% 5/15/2010 AAA 100 107,523
Delaware Cnty PA Auth Univ
Rev Ref Villanova Univ(11) 5.00% 8/1/2010 AAA 200 215,218
NY St Dorm Auth Lease Ref
Master Boces Pg Ser A GTD(12) 5.00% 8/15/2008 AAA 150 157,908
NY St Dorm Auth Rev City Univ
Sys Cons 4th Gen A(16) 5.25% 7/1/2009 AAA 350 375,459
Univ NC Sys Pool Rev Ser A(2) 4.00% 4/1/2007 AAA 250 253,795
University TX Univ Rev Fin
Sys Ser D 5.25% 8/15/2016 AAA 350 385,648
--------------
TOTAL 1,658,685
--------------
GENERAL OBLIGATION 28.09%
Anaheim CA Unif High Sch Dist Ref(12) 5.00% 8/1/2015 Aaa 350 385,350
Anoka Cnty MN Ref Cap Impt C(16) 4.40% 2/1/2007 AAA 300 305,706
Austin TX Indpt Sch Dist Ref
PSF GTD 5.25% 8/1/2015 AAA 250 277,093
Davie Cnty NC Sch(2) 4.00% 5/1/2012 AAA 200 205,940
Detroit MI City Sch Dist Sch
Bldg & Site Impt Ser A(11) 5.00% 5/1/2008 AAA 150 156,990
Hemet CA Univ Sch Dist 2002
Election Ser C(16) 5.00% 8/1/2011 AAA 200 218,200
La Crosse WI Ref Ser A(12) 5.00% 12/1/2007 AAA 200 208,068
NC St Ref Ser A 5.00% 6/1/2010 AAA 150 161,182
North Hempstead NY Ref(16) 5.00% 1/15/2013 Aaa 250 271,553
OK St Ref Bldg Ser A(11) 5.00% 7/15/2014 AAA 200 218,076
Pasadena CA Sch Dist Ser A Ref(11) 5.00% 11/1/2015 AAA 250 275,785
Salem Keizer OR Sch Dist No 24J Ref(12) 5.00% 6/15/2011 AAA 200 216,216
St Louis Park MN Indpt Sch
Dist No 283 Ref Sch Bldg Ser B(12) 5.00% 2/1/2015 Aaa 300 325,464
Wayne Cnty MI Cmnty College Impt(11) 5.25% 7/1/2010 Aaa 100 108,576
WI St Transn Rev Ref Ser 1(2) 5.25% 7/1/2006 AAA 175 177,989
--------------
TOTAL 3,512,188
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
92
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
INSURED INTERMEDIATE TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
LEASE 5.41%
CA St Pub Wks Bd Dept Hlth
Svcs Richmond Lab B(19) 5.00% 11/1/2017 AAA $ 315 $ 337,116
Kansas City MO Sch Dist Bldg
Ref Elem Sch Pj Ser B(11) 5.00% 2/1/2012 Aaa 100 108,201
OH St Bldg Auth Ref St Facs
Adult Correction A(12) 5.50% 10/1/2010 AAA 210 230,786
--------------
TOTAL 676,103
--------------
MISCELLANEOUS 14.51%
CA St Econ Recovery Ser A(11) 5.25% 7/1/2014 AAA 200 222,798
IL St Sales Tax Rev First Ser(12) 5.25% 6/15/2013 AAA 100 110,362
IN Bd Bk Rev Spl Pg South
Bend TIF Ser E(16) 5.00% 9/1/2014 AAA 100 107,288
Los Angeles CA Santn Equip
Rev Ser A(2) 5.00% 2/1/2007 AAA 250 257,080
Mercer Cnty NJ Impt Auth Ref
Regl Sludge Pj(11) 5.00% 12/15/2014 AAA 200 216,606
MI St Envr Ref(15)(16) 5.50% 12/1/2013 AAA 100 112,642
Miami-Dade Cnty FL Spl Oblig
Fltg Rate Cap Asset Acq Ser A RIBs(11) 4.789% 4/1/2014 AAA 200 200,164
MO Dev Fin Bd Cultural Facs
Nelson Gallery(16) 5.25% 12/1/2013 AAA 100 109,321
OR St Dept Admin Svcs(12) 5.00% 9/1/2012 AAA 100 108,872
SC Transn Infrastr Ser A(2) 5.00% 10/1/2008 Aaa 250 263,825
WI St Petroleum Inspect Fee
Rev Ref Ser 1(12) 5.00% 7/1/2008 AAA 100 104,813
--------------
TOTAL 1,813,771
--------------
POWER 7.43%
Houston TX Util Sys Rev Ref
Comb First Lien(12) 5.00% 11/15/2016 AAA 250 273,415
MI Pub Pwr Agy Rev Ref
Belle River Pj Ser A(16) 5.25% 1/1/2016 AAA 250 277,138
Puerto Rico Elec Pwr Auth Ref
Ref Ser JJ(16) 5.25% 7/1/2013 AAA 100 111,196
South MN Muni Pwr Agy Supply
Rev Ref Ser A(16) 5.00% 1/1/2010 AAA 250 266,772
--------------
TOTAL 928,521
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
93
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
INSURED INTERMEDIATE TAX-FREE FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
PRE-REFUNDED 4.78%
Muhlenberg PA Sch Dist(11) 5.40% 9/1/2012 AAA $ 100 $ 109,531
Muncy PA Sch Dist(11) 5.00% 5/15/2020 Aaa 250 271,322
NY St Dorm Auth Mental D(15)(16) 5.25% 8/15/2024 AAA 200 217,302
--------------
TOTAL 598,155
--------------
SPECIAL TAX 2.03%
Broward Cnty FL Spl Oblig Ref(2) 5.00% 1/1/2012 AAA 250 253,675
--------------
TRANSPORTATION 8.59%
DE River & Bay Auth Rev Ser B(2) 2.71%# 1/1/2030 AAA 400 400,000
MA St Port Auth Rev Ser C(2) 5.00% 7/1/2011 AAA 200 216,112
New Haven CT Air Rights Pkg Ref(2) 5.375% 12/1/2012 AAA 100 111,305
PA St Tpk Commn Oil Sr Ser A(16) 5.25% 12/1/2012 AAA 100 110,389
Washington DC Met Area Transn
Auth Gross Rev Ref(16) 5.00% 1/1/2007 AAA 230 235,600
--------------
TOTAL 1,073,406
--------------
WATER/SEWER 11.66%
Columbus GA Wtr & Sew Rev Ref(12) 5.25% 5/1/2013 AAA 100 110,569
Houston TX Util Sys Rev Ref
Comb First Lien Ser A(16) 5.00% 5/15/2009 AAA 200 211,828
Lansing MI Sew Disp Sys Ref(11) 5.00% 5/1/2014 AAA 150 163,747
Las Cruces NM Jt Util Ref &
Impt Rev Ser A(16) 5.50% 7/1/2016 AAA 300 317,346
Phoenix AZ Civic Impt Corp
Wtr Sys Rev Jr Lien(16) 5.00% 7/1/2016 AAA 300 327,273
Pima Cnty AZ Swr Rev Ref(12) 5.00% 7/1/2014 AAA 200 218,626
Shreveport LA Wtr & Swr Rev
Ref Ser A(11) 5.00% 12/1/2012 AAA 100 107,842
--------------
TOTAL 1,457,231
--------------
TOTAL MUNICIPAL BONDS (cost $11,957,258) 11,971,735
==============
<Caption>
SHARES
(000)
---------
SHORT-TERM INVESTMENT 0.57%
MONEY MARKET MUTUAL FUND 0.57%
Dreyfus Municipal Cash Management Plus
(cost $71,643) 72 71,643
==============
TOTAL INVESTMENTS IN SECURITIES 96.34%
(cost $12,028,901) 12,043,378
==============
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES 3.66% 457,983
--------------
NET ASSETS 100.00% $ 12,501,361
==============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
94
<Page>
SCHEDULE OF INVESTMENTS
FLORIDA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 97.94%
EDUCATION 2.94%
Miami-Dade Cnty FL Edl Facs
Auth Rev Ser A(2) 6.00% 4/1/2023 AAA $ 2,000 $ 2,220,500
--------------
ELECTRIC POWER 1.39%
Ocala FL Util Sys Rev Ref Ser A(11) 5.00% 10/1/2031 Aaa 1,000 1,050,550
--------------
GENERAL OBLIGATION 7.01%
FL St Bd of Ed Cap Pub Ed
Outlay Ser A 5.25% 6/1/2024 AAA 2,000 2,149,120
Hillsborough Cnty FL Sch Bd COP(16) 5.00% 7/1/2029 AAA 1,000 1,040,260
Miami-Dade Cnty Fl Bldg Better
Cmnty Pg(11) 5.00% 7/1/2031 AAA 2,000 2,102,180
--------------
TOTAL 5,291,560
--------------
HEALTHCARE 13.68%
Highlands Cnty FL Facs Auth
Rev Hosp Adventist Hlth Ser D(d) 5.00%# 11/15/2035 A+ 1,000 1,020,640
Highlands Cnty FL Facs Auth
Rev Hosp Adventist Hlth Sys D 5.875% 11/15/2029 A+ 2,000 2,169,480
Highlands Cnty FL Facs Auth
Rev Hosp Adventist/Sunbelt Ser A 6.00% 11/15/2031 A+ 2,000 2,176,100
Miami FL Hlth Facs Auth
Catholic Hlth East Ser B 5.25% 11/15/2033 A1 225 234,333
Orange Cnty FL Hlth Facs Auth
Rev Hosp Orlando Regl 5.75% 12/1/2032 A 1,000 1,078,860
Orange Cnty FL Hlth Facs Auth
Rev Nemours Foundation Pj 5.00% 1/1/2035 AAA 1,000 1,039,690
Puerto Rico Indl Tourist Eds
Med Envr Ctrl Facs Hosp 6.50% 11/15/2020 AA 410 469,073
Sarasota Cnty FL Pub Hosp Bd
Rev Sarasota Mem Hosp Ser B(16) 5.50% 7/1/2028 AAA 1,875 2,140,050
--------------
TOTAL 10,328,226
--------------
HOUSING 3.77%
Lee Cnty FL Hsg Fin Auth Sing
Fam Mtg Rev AMT(8)(14) 6.40% 3/1/2029 Aaa 625 645,669
Orange Cnty FL Hsg Fin Auth
Hmowner Rev Cap App Ser A-1 AMT(14) Zero Coupon 3/1/2028 Aaa 425 125,745
Pinellas Cnty FL Hsg Fin Auth
Hsg Rev Multi Cnty Pg Ser A-1 AMT(14) 5.50% 9/1/2035 Aaa 1,960 2,073,131
--------------
TOTAL 2,844,545
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
95
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
FLORIDA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
INDUSTRIAL 1.75%
Lee Cnty FL Indl Dev Auth Ref
Bonita Springs Util Pj AMT(2) 5.125% 11/1/2019 AAA $ 1,250 $ 1,323,038
--------------
LEASE 4.15%
Broward Cnty FL Sch Bd
Ser A COP(12) 5.00% 7/1/2030 AAA 3,000 3,133,890
--------------
MISCELLANEOUS 18.55%
Jacksonville FL Excise Taxes
Ref Ser C AMT(16) 5.25% 10/1/2020 AAA 1,000 1,086,180
Jacksonville FL Sales Tax Rev
Ref & Impt Loc Govt(11) 5.375% 10/1/2018 AAA 1,000 1,095,870
Miami-Dade Cnty FL Spl Oblig
Fltg Rate Cap Asset Acq Ser A RIBs(11) 4.789% 4/1/2014 AAA 1,500 1,501,230
Miami-Dade Cnty FL Spl Oblig
Sub Ser A(16) Zero Coupon 10/1/2024 AAA 3,000 1,106,190
Miami-Dade Cnty FL Spl Oblig
Sub Ser B(16) 5.00% 10/1/2037 AAA 1,000 1,024,190
Orange Cnty FL Sales Tax Rev
Ref Ser B(11) 5.125% 1/1/2032 AAA 1,425 1,499,186
Orange Cnty FL Tourist Dev Sub(2) 5.125% 10/1/2025 AAA 1,445 1,531,165
Orange Cnty FL Tourist Dev
Tax Rev Ref(2) 5.00% 10/1/2031 AAA 1,780 1,872,916
Osceola Cnty Tourist Dev Tax
Rev Ser A(11) 5.00% 10/1/2032 AAA 1,400 1,453,480
Puerto Rico Pub Bldgs Auth
Rev Govt Facs Ser I GTD 5.25% 7/1/2033 BBB 1,250 1,324,450
Tampa FL Sports Auth Rev
Tampa Bay Arena Pj(16) 6.00% 10/1/2015 AAA 450 516,955
--------------
TOTAL 14,011,812
--------------
POWER 1.41%
Puerto Rico Elec Pwr Auth Pwr
Rev Ser RR(19) 5.00% 7/1/2025 AAA 1,000 1,063,340
--------------
PRE-REFUNDED 24.46%
Boca Raton FL 5.25% 7/1/2016 AAA 1,615 1,748,028
Boca Raton FL 5.25% 7/1/2017 AAA 1,000 1,082,370
FL St Bd of Ed Cap Outlay Pub
Ed Ser E 5.625% 6/1/2025 AAA 1,000 1,109,030
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
96
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
FLORIDA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Miami-Dade Cnty FL Expwy Auth
Toll Sys Rev(11) 6.375% 7/1/2029 AAA $ 1,250 $ 1,429,162
Muni Secs Trust Ctfs Ser 7005
Cl B ETM RIBs+ 8.148% 10/1/2040 Aaa 1,250 1,480,075
Orange Cnty FL Tourist Dev
Tax Rev ETM(2) 6.00% 10/1/2016 AAA 710 721,715
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser B 6.00% 7/1/2031 BBB+ 1,000 1,124,650
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser B 6.50% 7/1/2027 BBB+ 1,000 1,146,400
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser C 6.00% 7/1/2029 BBB+ 880 989,692
Puerto Rico Comwlth Pub Impt RIBs(16) 8.45% 7/1/2026 Aaa 3,500 4,220,440
Tampa Bay Wtr FL Util Sys Rev(11) 6.00% 10/1/2024 AAA 3,000 3,422,910
--------------
TOTAL 18,474,472
--------------
RESOURCE RECOVERY 1.01%
Jacksonville FL Pollutn Rev
Anheuser-Busch Pj 5.70% 8/1/2031 A+ 750 764,602
--------------
TRANSPORTATION 8.90%
FL Ports Fin Commn Rev St
Transn TR FD Intermodal Pg AMT(11) 5.50% 10/1/2029 AAA 1,295 1,364,283
FL St Tpk Auth Tpk Rev RIBs 6.992% 7/1/2033 AA-(c) 2,000 2,160,520
Lee Cnty FL Transn Facs
Sanibel Brdgs & Causeway Ser B(4) 5.00% 10/1/2035 AAA 1,000 1,045,600
Miami-Dade Cnty FL Expwy Auth
Toll Sys Rev Ref(11) 5.125% 7/1/2025 Aaa 750 796,035
Pensacola FL Arpt Rev Ser A AMT(16) 6.125% 10/1/2018 AAA 1,250 1,350,387
--------------
TOTAL 6,716,825
--------------
WATER/SEWER 8.92%
Melbourne FL Wtr & Swr Rev
Ref & Impt Ser A(11) 5.00% 10/1/2032 AAA 1,000 1,038,200
Miami Beach FL Stormwater Rev(11) 5.25% 9/1/2020 AAA 1,000 1,082,420
Miami Beach FL Wtr & Swr Rev(2) 5.25% 9/1/2020 AAA 1,000 1,082,420
Miami Beach FL Wtr & Swr Rev(2) 5.50% 9/1/2027 AAA 1,000 1,079,050
Miami-Dade Cnty FL Stormwater
Util Rev(16) 5.00% 4/1/2027 Aaa 1,000 1,055,660
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
97
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
FLORIDA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Ocala FL Wtr & Swr Rev(11) 5.25% 10/1/2027 Aaa $ 800 $ 859,536
Sebring FL Wtr & Wastewtr Rev Ref(11) 5.25% 1/1/2020 AAA 500 542,510
--------------
TOTAL 6,739,796
--------------
TOTAL MUNICIPAL BONDS (cost $68,857,833) 73,963,156
==============
<Caption>
SHARES
(000)
---------
SHORT-TERM INVESTMENT 0.40%
MONEY MARKET MUTUAL FUND 0.40%
Dreyfus FL Muni Cash Management (cost $300,600) 301 300,600
--------------
TOTAL INVESTMENTS IN SECURITIES 98.34% (cost $69,158,433) 74,263,756
==============
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES 1.66% 1,254,747
--------------
NET ASSETS 100.00% $ 75,518,503
==============
</Table>
SCHEDULE OF INVESTMENTS
GEORGIA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
(000)
---------
MUNICIPAL BONDS 97.10%
ACUTE CARE HOSPITAL 0.10%
Glynn-Brunswick Mem Hosp Auth GA Rev
Unrefunded Bal 2005 Antic Ctfs(16) 6.00% 8/1/2016 NR $ 100 104,231
--------------
EDUCATION 20.66%
Albany-Dougherty GA Inner
City Auth Rev Albany St Univ
Student Hsg A(19) 5.00% 7/1/2031 AAA 2,000 2,068,440
Athens-Clarke Cnty GA Univ
Govt UGA Rev CCRC Bldg LLC Pj(2) 5.00% 12/15/2032 AAA 1,050 1,089,081
Athens GA Hsg Auth Student
Hsg Univ of GA East Campus(2) 5.00% 12/1/2027 Aaa 2,000 2,087,840
Athens GA Hsg Auth Student
Hsg Univ of GA East Campus(2) 5.25% 12/1/2023 Aaa 775 831,234
Atlanta GA Dev Auth Rev Tuff
ATDC Pj Ser C 4.625% 1/1/2035 A3 1,000 969,530
Bulloch Cnty GA Dev Auth GA
South Univ Pj(2) 5.00% 8/1/2021 Aaa 400 421,456
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
98
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GEORGIA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Cobb Cnty GA Dev Auth Pkg Rev
Kennesaw St Univ Fdtn Inc Pj(16) 5.00% 7/15/2029 Aaa $ 1,250 $ 1,313,338
Fulton Cnty GA Dev Auth Rev
GA Tech Athletic Assoc(2) 5.50% 10/1/2017 AAA 1,000 1,107,240
Fulton Cnty GA Dev Auth Rev
GA Tech Fndtn Fdg Ser A 5.00% 11/1/2031 AA+ 1,400 1,456,364
Fulton Cnty GA Dev Auth Rev
GA Tech Fndtn Sac II Pj Ser A 5.125% 11/1/2021 AA+ 750 802,155
Fulton Cnty GA Dev Auth Rev
Molecular Science Bldg Pj(16) 5.00% 5/1/2034 AAA 2,000 2,080,520
Fulton Cnty GA Dev Auth Rev
Morehouse College Pj(2) 5.875% 12/1/2030 AAA 1,850 2,053,426
Fulton Cnty GA Dev Auth Rev
Tuff Morehouse Pj Ser A(2) 5.50% 2/1/2022 AAA 1,000 1,092,930
Marietta GA Dev Auth Rev Ser
Student Hsg SPSU Student Hsg I 5.125% 9/15/2023 A2 1,000 1,053,530
Private Colleges & Univ Auth
GA Rev Mercer Univ Pj 5.75% 10/1/2031 Baa1 500 536,325
Private Colleges & Univ Auth
GA Rev Spelman College 5.25% 6/1/2021 Aa3 1,340 1,451,287
Richmond Cnty GA Dev Auth Edl
Facs Rev ASU Jaguar Student Ctr Ser A(19) 5.00% 7/1/2034 Aaa 1,000 1,044,630
--------------
TOTAL 21,459,326
--------------
GENERAL OBLIGATION 3.38%
GA St Ser F 5.00% 11/1/2018 AAA 1,000 1,076,350
Puerto Rico Comwlth Pub Impt Ser A 5.25% 7/1/2024 BBB 500 529,940
Puerto Rico Comwlth
Unrefunded Bal Pub Impt Ser A 5.125% 7/1/2031 BBB 665 686,785
Puerto Rico Comwlth
Unrefunded Bal Pub Impt Ser A 5.375% 7/1/2028 BBB 1,155 1,222,891
--------------
TOTAL 3,515,966
--------------
HEALTHCARE 4.56%
Athens-Clarke Cnty GA Univ
Govt Catholic Hlth East Issue 5.50% 11/15/2032 A1 1,000 1,055,250
Clarke Cnty GA Hosp Auth Rev
Ctfs Athens Regl Med Ctr Pj(16) 5.125% 1/1/2032 AAA 500 520,970
Cobb Cnty GA Hosp Auth Rev
Ref & Impt Rev Antic Ctfs(2) 5.25% 4/1/2024 AAA 1,000 1,081,140
Liberty Cnty GA Hosp Auth Rev
Antic Ctfs Ref GTD(2) 5.00% 8/1/2026 Aaa 1,000 1,069,400
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
99
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GEORGIA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Puerto Rico Indl Tourist Edl
Med Envr Ctrl Fac Hosp 6.50% 11/15/2020 AA $ 410 $ 469,073
Ware Cnty GA Hosp Auth Rev
Antic Ctfs GTD(16) 5.50% 3/1/2021 Aaa 500 538,350
--------------
TOTAL 4,734,183
--------------
HOUSING 1.42%
GA St Hsg & Fin Auth Rev Sing
Fam Sub Ser D-2 AMT 5.75% 12/1/2031 AAA 835 857,370
GA St Hsg & Fin Auth Rev Sub
Ser A-2 AMT 4.875% 12/1/2024 AAA 100 101,429
Savannah GA Econ Dev Auth
Multi Fam Hsg Rev AMT(13) 5.15% 11/20/2022 AAA 500 516,515
--------------
TOTAL 1,475,314
--------------
INDUSTRIAL 0.72%
Albany Dougherty GA Payroll
Dev Auth Procter & Gamble AMT 5.20% 5/15/2028 AA- 500 543,350
Monroe Cnty GA Dev Auth Pollutn
GA Pwr Co Plant(2) 5.25% 7/1/2031 AAA 205 207,899
--------------
TOTAL 751,249
--------------
LEASE 3.53%
Atlanta GA Dev Auth Rev Tuff
ATDC Pj Ser A 5.00% 1/1/2035 A3 1,250 1,266,525
College Park GA Business
Civic Ctr Pj(2) 5.75% 9/1/2026 AAA 450 496,399
Fayette Cnty GA Pub Facs Auth
Rev Ref Criminal Justice Center Pj 5.00% 6/1/2026 AA 1,040 1,092,749
GA Muni Assn Inc Ctfs City
Court Atlanta Pj(2) 5.25% 12/1/2026 AAA 750 805,935
--------------
TOTAL 3,661,608
--------------
MISCELLANEOUS 3.29%
Assoc Cnty GA Leasing Pj
Rockdale Cnty GA Pub Purp Pj(2) 5.625% 7/1/2020 AAA 25 27,237
Cobb Marietta GA Coliseum &
Exhibit Hall Auth Rev(16) 5.625% 10/1/2026 AAA 1,000 1,149,620
Downtown Savannah Auth GA Rev
Ref & Impt 5.00% 1/1/2026 AA 1,000 1,050,510
George L Smith II GA World
Congress Ctr Auth Rev AMT(16) 5.75% 7/1/2015 AAA 500 539,295
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
100
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GEORGIA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldgs Auth
Rev Unrefunded Bal Govt Facs Ser D GTD 5.375% 7/1/2033 BBB $ 615 $ 652,540
--------------
TOTAL 3,419,202
--------------
POWER 4.61%
Burke Cnty GA Dev Auth Pollutn Ctl Rev
GA Pwr Co Plt Vogtle 2nd Ser(11) 4.625% 5/1/2034 AAA 1,000 992,910
Muni Elec Auth GA Combustion
Cycle Pj Ser A 5.00% 11/1/2023 A 1,000 1,021,070
Muni Elec Auth GA Combustion
Turbine Pj Ser A(16) 5.25% 11/1/2022 AAA 1,445 1,552,508
Puerto Rico Elec Pwr Auth
Ser HH(12) 5.25% 7/1/2029 AAA 1,135 1,219,784
--------------
TOTAL 4,786,272
--------------
PRE-REFUNDED 33.81%
Atlanta GA Arpt Facs Rev Ref
Gen Ser A(11) 5.50% 1/1/2026 AAA 1,645 1,805,404
Atlanta GA Arpt Facs Rev Ser A(11) 5.60% 1/1/2030 AAA 1,500 1,652,160
Atlanta GA ETM 5.60% 12/1/2015 AA- 95 97,257
Cobb Cnty GA Kennestone Hosp
Auth Rev Ctfs Ser 86 A ETM(16) Zero Coupon 8/1/2015 AAA 395 220,572
Fayette Cnty GA Pub Facs Auth
Criminal Justice Ctr Pj 6.00% 6/1/2030 AA 1,000 1,125,100
Forsyth Cnty GA Sch Dist 6.00% 2/1/2016 AA 2,000 2,251,340
Forsyth Cnty GA Wtr & Swr Auth Rev 6.25% 4/1/2021 AA 750 848,415
Glynn-Brunswick Mem Hosp Auth GA Rev
2005 Antic Ctfs(16) 6.00% 8/1/2016 AAA 240 250,800
Glynn-Brunswick Mem Hosp Auth GA Rev
Antic Ctfs(16) 6.00% 8/1/2016 AAA 60 62,700
Muni Secs Trust Ctfs Ser 7005
Cl B ETM RIBs+ 8.148% 10/1/2040 Aaa 1,000 1,184,060
Private Colleges & Univs Auth
GA Rev Emory Univ Pj Ser A 5.50% 11/1/2020 AA 1,000 1,109,930
Private Colleges & Univs Auth
GA Rev Emory Univ Pj Ser A 5.50% 11/1/2025 AA 1,000 1,096,330
Private Colleges & Univs Auth
GA Rev Emory Univ Pj Ser A 5.75% 11/1/2018 AA 500 560,755
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser B(16) 5.875% 7/1/2020 AAA 1,000 1,123,890
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser C 6.00% 7/1/2029 BBB+ 250 281,162
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
101
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GEORGIA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser D 5.25% 7/1/2038 BBB+ $ 1,500 $ 1,649,670
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser D 5.375% 7/1/2036 BBB+ 1,405 1,555,630
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser D 5.75% 7/1/2041 BBB+ 3,385 3,823,324
Puerto Rico Comwlth Hwy &
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2026 BBB+ 2,000 2,066,420
Puerto Rico Comwlth Pub Impt(5)(12) 5.50% 7/1/2017 AAA 500 516,980
Puerto Rico Comwlth Pub Impt(16) 5.75% 7/1/2026 AAA 1,990 2,194,811
Puerto Rico Comwlth Pub Impt Ser A 5.00% 7/1/2027 AAA 370 403,737
Puerto Rico Comwlth
Pub Impt Ser A 5.125% 7/1/2031 AAA 335 366,158
Puerto Rico Comwlth
Pub Impt Ser A 5.375% 7/1/2028 AAA 580 641,463
Puerto Rico Pub Bldgs Auth
Rev Govt Facs Ser D 5.25% 7/1/2036 A- 915 1,003,425
Puerto Rico Pub Bldgs Auth
Rev Govt Facs Ser D 5.375% 7/1/2033 A- 1,685 1,860,341
Puerto Rico Pub Fin Corp
Comwlth Approp Ser A(16) 5.50% 8/1/2020 AAA 1,500 1,670,910
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.70% 8/1/2025 Aaa 2,000 2,192,620
Puerto Rico Pub Fin Corp
Comwlth Approp Ser E 5.75% 8/1/2030 Aaa 1,000 1,034,940
Savannah GA Econ Dev Auth Rev
Sub Ser C ETM Zero Coupon 12/1/2021 Aaa 1,000 473,610
--------------
TOTAL 35,123,914
--------------
RESOURCE RECOVERY 2.07%
Atlanta GA Wtr & Wastewtr Rev
Ser A Unrefunded Bal(11) 5.00% 11/1/2029 AAA 2,090 2,152,345
--------------
SPECIAL TAX 2.02%
Dekalb Cnty Ga Pub
Safety & Judicial Facs Pj GTD 5.00% 12/1/2034 Aaa 2,000 2,094,120
--------------
TRANSPORTATION 5.71%
Atlanta GA Arpt Facs Rev AMT(16) Zero Coupon 1/1/2010 AAA 990 785,515
Macon Bibb Cnty GA Indl Auth
Arpt Impt Rev Ref Atlantic AMT(2) 5.00% 4/1/2018 AAA 500 520,495
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
102
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
GEORGIA TAX-FREE TRUST SEPTEMBER 30, 2005
<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 PA 1052 RIBs 8.225% 1/1/2010 BBB+(b) $ 1,750 $ 2,203,215
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser D(12) 5.00% 7/1/2032 AAA 225 234,515
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser G 5.00% 7/1/2033 BBB+ 1,065 1,093,798
Puerto Rico Comwlth Hwy &
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2036 BBB+ 1,000 1,095,060
--------------
TOTAL 5,932,598
--------------
WATER/SEWER 11.22%
Atlanta GA Wtr & Wastewtr Rev(12) 5.00% 11/1/2034 AAA 1,000 1,046,740
Augusta GA Wtr & Swr Rev(12) 5.25% 10/1/2022 AAA 500 538,410
Augusta GA Wtr & Swr Rev(12) 5.25% 10/1/2030 AAA 1,110 1,190,142
Augusta GA Wtr & Swr Rev(12) 5.25% 10/1/2034 AAA 1,000 1,077,160
Carroll Cnty GA Wtr Auth Wtr &
Swr Rev(2) 5.25% 7/1/2021 Aaa 500 540,705
Coweta Cnty GA Wtr & Sew Auth Ref(12) 5.00% 6/1/2026 Aaa 500 552,650
DeKalb Cnty GA Wtr & Swr 5.00% 10/1/2028 AA 1,240 1,289,885
DeKalb Cnty GA Wtr & Swr Ser A 5.00% 10/1/2035 AA 2,650 2,761,539
Elberton GA Combined Util Sys
Rev Ref & Impt(2) 5.50% 1/1/2019 Aaa 550 602,745
Fulton Cnty GA Wtr & Swr Rev(11) 5.00% 1/1/2035 AAA 400 416,408
Glynn Cnty GA Wtr & Swr Rev
Ref & Impt(2) 5.00% 4/1/2023 Aaa 750 789,683
Lowndes Cnty GA Pub Facs Auth
Rev Wtr & Swr Pj(2) 5.00% 6/1/2025 AAA 805 854,330
--------------
TOTAL 11,660,397
--------------
TOTAL INVESTMENTS IN MUNICIPAL BONDS 97.10% (cost $96,785,621) 100,870,725
==============
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES 2.90% 3,016,054
--------------
NET ASSETS 100.00% $ 103,886,779
==============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
103
<Page>
SCHEDULE OF INVESTMENTS
HIGH YIELD MUNICIPAL BOND FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 99.00%
ACUTE CARE HOSPITAL 8.04%
CA Health Facs Fin Auth Rev
Ref Cedars Sinai Med Ctr 5.00% 11/15/2034 A3 $ 10,000 $ 10,198,400
Hilsborough Cnty FL Indl Dev Auth
Tampa Gen Hosp Pj Ser A 5.00% 10/1/2018 Baa1 1,000 1,033,240
IL Fin Auth Rev Northwestern
Mem Hosp Ser A 5.50% 8/15/2043 AA+ 1,000 1,076,140
MA St Hlth & Edl Facs Auth
Rev UMass Mem Issue Ser D 5.00% 7/1/2033 BBB 2,000 1,993,900
MI St Hosp Fin Auth Rev
Chelsea Cmnty Hosp Oblig 5.00% 5/15/2030 BBB 3,175 3,165,919
Monongalia Cnty WV Bldg Cmnty
Hosp Rev Monongalia Gen Hosp Ser A 5.00% 7/1/2030 A- 8,515 8,566,601
NY St Dorm Auth Revs Mt Sinai
NYU Hlth Rmkt 5.50% 7/1/2026 BB 1,500 1,525,680
St Paul MN Hsg & Redev Auth
Hosp Rev Healtheast Pj 6.00% 11/15/2035 BB+ 5,750 6,173,315
Washington Cnty AR Hosp Rev
Ref Regl Med Ctr Ser B 5.00% 2/1/2030 BBB 1,500 1,501,005
--------------
TOTAL 35,234,200
--------------
AIRLINES 0.10%
NJ Econ Dev Auth Continental
Airlines Inc Pj AMT 7.20%# 11/15/2030 B 500 440,845
--------------
AIRPORT PASSENGER FACILITY CHARGE 0.56%
Augusta GA Arpt Rev Gen Ser C AMT 5.45% 1/1/2031 Baa3 2,410 2,450,006
--------------
AIRPORT SPECIAL FACILITY 2.12%
NJ Econ Dev Auth Spl Fac Rev
Continental Airlines Inc Pj AMT 6.25% 9/15/2029 B 8,620 6,937,117
NJ Econ Dev Auth Continental
Airlines Inc Pj AMT 6.625% 9/15/2012 B 850 787,738
Wayne Cnty MI Arpt Auth Rev
Detroit Met Wayne Cnty Arpt AMT(16) 5.00% 12/1/2034 AAA 1,500 1,551,855
--------------
TOTAL 9,276,710
--------------
CHARTER SCHOOLS 1.12%
Detroit Cmnty High Sch MI
Pub Sch Academy Rev 5.65% 11/1/2025 BB 1,000 996,390
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
104
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH YIELD MUNICIPAL BOND FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Detroit Cmnty High Sch MI
Pub Sch Academy Rev 5.75% 11/1/2030 BB $ 1,255 $ 1,256,832
Milwaukee WI Redev Auth Rev
Science Ed Consortium Pj Ser A 5.625% 8/1/2025 BB+ 1,715 1,679,757
Milwaukee WI Redev Auth Rev
Science Ed Consortium Pj Ser A 5.75% 8/1/2035 BB+ 1,000 966,730
--------------
TOTAL 4,899,709
--------------
CONTINUING CARE RETIREMENT
COMMUNITIES 6.77%
Bremer Cnty IA Retirement Fac Rev
Bremer Lutheran Ser A(d) 5.00% 11/15/2017 NR 1,140 1,127,699
Bremer Cnty IA Retirement Fac Rev
Bartels Lutheran Ser A(d) 5.125% 11/15/2020 NR 400 397,028
Bremer Cnty IA Retirement Fac Rev
Bartels Lutheran Ser A(d) 5.375% 11/15/2027 NR 700 693,259
Director St NV Dept Business &
Industry Las Ventanas Retirement Pj A 7.00% 11/15/2034 NR 6,000 6,261,900
Director St NV Dept Business &
Industry Las Ventanas Retirement Pj B 6.00% 11/15/2014 NR 3,655 3,748,532
IL Fin Auth Rev Friendship
Vlg Schaumburg A 5.375% 2/15/2025 BB+(c) 3,000 3,016,230
IL Fin Auth Rev Friendship
Vlg Schaumburg A 5.625% 2/15/2037 BB+(c) 2,000 2,022,320
James City Cnty VA Econ Dev Auth Resdl
Care Fac First Mtg Williamsburg Ldg A 5.50% 9/1/2034 NR 1,000 1,002,210
Lebanon Cnty PA Hlth Facs Auth
Hlth Ctr Rev Pleasant View Rt Ser A 5.125% 12/15/2020 NR 1,000 1,002,470
Lebanon Cnty PA Hlth Facs Auth
Hlth Ctr Rev Pleasant View Rt Ser A 5.30% 12/15/2026 NR 500 497,440
MI St Hosp Fin Auth Rev Ref
Presbyterian Vlg 5.25% 11/15/2025 BBB-(c) 1,500 1,481,565
NC Med Care Commn Retirement
Facs Rev Ref First Mtg UTD Methodist C 5.25% 10/1/2024 NR 750 756,375
NC Med Care Commn Retirement
Facs Rev Ref First Mtg UTD Methodist C 5.50% 10/1/2032 NR 1,600 1,624,688
Virginia Beach VA Dev Auth Resdl
Care Fac Mtg Rev Ref Westminster
Canterbury(d) 5.25% 11/1/2026 NR 3,000 3,019,230
Virginia Beach VA Dev Auth Resdl
Care Fac Mtg Rev Ref Westminster
Canterbury(d) 5.375% 11/1/2032 NR 1,000 1,009,330
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
105
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH YIELD MUNICIPAL BOND FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Winchester VA Indl Dev Auth Resdl
Care Fac Rev Westminster Canterbury Ser A 5.20% 1/1/2027 NR $ 1,000 $ 1,008,610
Winchester VA Indl Dev Auth Resdl Care
Fac Rev Westminster Canterbury Ser A 5.30% 1/1/2035 NR 1,000 1,004,990
--------------
TOTAL 29,673,876
--------------
CORRECTIONAL FACILITIES 0.29%
Madison Cnty FL Rev First
Mtg Twin Oaks Pj Ser A 6.00% 7/1/2025 NR 1,300 1,285,050
--------------
DIRT BONDS, TAX INCREMENT/ALLOCATION 4.44%
Allegheny Cnty PA Redev
Auth Rev Pittsburgh Mills Pj 5.60%# 7/1/2023 NR 500 526,350
Atlanta GA Tax Allocation
Eastside Pj Ser A AMT 5.625% 1/1/2016 NR 1,000 1,024,210
Atlanta GA Tax Allocation
Eastside Pj Ser B 5.60% 1/1/2030 NR 1,000 1,006,170
Beaumont CA Fin Auth Loc Agy
Rev Ser D 5.80% 9/1/2035 NR 500 526,005
Branson MO Indl Dev Auth Tax
Increment Rev Branson Landing Retail Pj 5.50% 6/1/2029 NR 5,000 5,104,750
Etiwanda Sch Dist CA Spl Tax
Cmnty Facs Dist No 2004-1 5.45% 9/1/2029 NR 1,000 1,008,370
Indio CA Cmnty Facs Dist No 04-3
Terra Lago Impt Area 1 5.15% 9/1/2035 NR 1,825 1,797,534
Poway CA Unif Sch Dist Spl
Tax Cmnty Facs Dist No 11 Area B 5.00% 9/1/2030 NR 1,000 964,090
San Francisco CA City & Cnty Red
Agy Dist No 6 Mission Bay South Ser A 5.15% 8/1/2035 NR 1,500 1,496,250
Temecula Vly CA Unif Sch Dist
Cmnty Facs Dist Spl Tax No 02-1 5.125% 9/1/2035 NR 1,000 984,160
Tern Bay Cmnty Dev Dist FL
Cap Impt Rev Ser A 5.375% 5/1/2037 NR 5,000 5,008,300
--------------
TOTAL 19,446,189
--------------
EDUCATION 0.60%
PA St Higher Edl Facs Auth
College & Univ Rev Geneva College 5.375% 4/1/2015 BBB- 2,000 2,087,660
Private Colleges & Univ Auth
GA Rev Spelman College 5.25% 6/1/2021 Aa3 500 541,525
--------------
TOTAL 2,629,185
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
106
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH YIELD MUNICIPAL BOND FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
ELECTRIC REVENUE BONDS 1.36%
MS Business Fin Corp MS
Pollutn Ctrl Sys Energy Res Inc Pj 5.875% 4/1/2022 BBB- $ 5,875 $ 5,969,588
--------------
GAMING 1.44%
Mohegan Tribe Indians CT
Gaming Auth Pub Impt Priority Dist 5.375% 1/1/2011 BB+ 1,400 1,474,522
Mohegan Tribe Indians CT Pub
Impt Priority Dist 5.125% 1/1/2023 BB+ 3,350 3,355,293
Mohegan Tribe Indians CT Pub
Impt Priority Dist 5.25% 1/1/2033 BB+ 1,500 1,499,880
--------------
TOTAL 6,329,695
--------------
GENERAL AIRPORT REVENUE BONDS 1.09%
Dallas-Fort Worth TX Intl Arpt Fac Impt
Corp Rev Ref A Sub Ser 1 Rmkt AMT 8.50%# 5/1/2029 CCC 1,000 989,520
Dallas-Fort Worth TX Intl Arpt Fac Impt
Corp Rev Ref A Sub Ser 2 Rmkt AMT 9.00%# 5/1/2029 CCC 2,500 2,369,725
Dallas-Fort Worth TX Intl Arpt Fac Impt
Corp Rev Ref A Sub Ser 3 Rmkt AMT 9.125% 5/1/2029 CCC 1,500 1,403,415
--------------
TOTAL 4,762,660
--------------
GENERAL OBLIGATION 5.91%
CA St Ref 5.00% 8/1/2028 A 3,500 3,645,950
CA St Rites PA 1300 RIBs 7.252% 11/1/2024 NR 5,000 5,579,700
FL St Bd of Ed Pub Ed Ser D 5.00% 6/1/2033 AAA 725 759,184
New York NY Ser M 5.00% 4/1/2022 A+ 10,000 10,485,000
New York NY Ser O 5.00% 6/1/2030 A+ 5,000 5,181,850
Todd Morrison Cass & Wadena Cntys
MN Hlthcare Fac Lakewood 5.00% 12/1/2034 Baa2 250 254,580
--------------
TOTAL 25,906,264
--------------
HEALTH CARE SYSTEM 6.94%
CA Statewide Cmntys Dev Auth
Rev Daughters of Charity Hlth A 5.25% 7/1/2030 BBB+ 10,000 10,361,800
Franklin Cnty OH Hlthcare Facs
Rev OH Presbyterian Svcs A 5.00% 7/1/2026 BBB 1,200 1,211,892
Hilsborough Cnty FL Indl Ref
Tampa Gen Hosp Pj Ser A 5.25% 10/1/2024 Baa1 1,000 1,043,040
Joplin MO Indl Dev Auth
Hlthfacs Rev Freeman Hlth Sys Pj 5.75% 2/15/2035 BBB+ 500 537,110
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
107
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH YIELD MUNICIPAL BOND FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
KY Econ Dev Fin Auth Hlth
Sys Norton Hlthcare Inc Ser A 6.50% 10/1/2020 BBB+(c) $ 1,400 $ 1,541,008
MA St Hlth & Edl Facs Auth
Rev Caritas Christi Oblig Grp A 5.625% 7/1/2020 BBB 1,005 1,026,125
Miami Beach FL Hlth Facs Rev
Hosp Auth Mt Sinai Med Ctr FL Pj 5.375% 11/15/2028 BB+ 1,510 1,517,610
NC Med Care Cmnty Hlthcare Facs
Rev Ref 1st Mtg Presbyterian Ser A 5.125% 7/1/2018 NR 1,000 1,002,580
NJ Hlthcare Fac Fin Auth Rev
Somerset Med Ctr 5.50% 7/1/2033 Baa3 1,700 1,736,346
NY St Dorm Auth Revs Non St Supported
Debt Mt Sinai NYU Hlth C Rmkt 5.50% 7/1/2026 Ba1 4,000 4,068,680
Orange Cnty FL Hlth Fac Auth
Ref Hlthcare Orlando Lutheran 5.375% 7/1/2020 NR 1,100 1,098,240
Orange Cnty FL Hlth Fac Auth
Ref Hlthcare Orlando Lutheran 5.70% 7/1/2026 NR 1,000 1,003,610
St Mary Hosp Auth PA Hlth Sys
Rev Catholic Hlth Ser B 5.375% 11/15/2034 A1 500 526,270
St Paul MN Port Auth Lease
Rev Healtheast Midway Campus 03 A 5.75% 5/1/2025 BB 1,520 1,529,926
VA MN Hsg & Redev Auth
Hlthcare Fac Lease Rev 5.375% 10/1/2030 Baa1 2,165 2,219,645
--------------
TOTAL 30,423,882
--------------
HEALTHCARE 1.93%
Knox Cnty TN Hlth Ed & Hsg
Fac Bd Rev Univ Hlth Sys Inc 5.625% 4/1/2029 Baa1 1,000 1,029,160
NC Med Care Cmnty Hlthcare Facs
Rev Ref 1st Mtg Presbyterian Ser A 5.25% 7/1/2021 NR 1,720 1,727,671
St Paul MN Hsg & Redev Auth
Hosp Rev Healtheast Pj 6.00% 11/15/2030 BB+ 2,500 2,692,250
Sylacauga AL Health Care
Auth Rev Ser A Coosa Vly Med Ctr 6.00% 8/1/2035 NR 3,000 3,028,500
--------------
TOTAL 8,477,581
--------------
HOUSING 0.34%
MA St Hsg Fin Agy Hsg Ser E AMT 5.00% 12/1/2028 AA- 1,500 1,503,180
--------------
INDUSTRIAL 4.92%
Courtland AL Indl Dev Bd Solid Waste
Disp Rev Ref Int'l Paper Co Pj A AMT 5.20% 6/1/2025 BBB 5,500 5,466,120
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
108
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH YIELD MUNICIPAL BOND FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Courtland AL Indl Dev Bd Solid Waste
Disp Rev Ref Int'l Paper Co Pj B AMT 5.20% 6/1/2025 BBB $ 2,305 $ 2,290,801
IL Fin Auth Solid Waste Disp
Waste Mgmt Inc Pj AMT 5.05% 8/1/2029 NR 1,500 1,492,890
NJ Econ Dev Auth Rev Glimcher
Pptys Lp Pj AMT 6.00% 11/1/2028 NR 5,000 5,067,200
OH St Environmental Facs Rev
Ford Motor Co Pj AMT 6.15% 6/1/2030 BB+ 2,000 1,994,760
Port Corpus Christi Auth TX
Celanese Pj Ser A 6.45% 11/1/2030 B2 4,900 5,240,991
--------------
TOTAL 21,552,762
--------------
LEASE 1.20%
Plainfield Ind Cmnty High Sch
Bldg Corp First Mtg-Ser A(11) 5.00% 1/15/2030 AAA 5,000 5,268,700
--------------
MISCELLANEOUS 0.09%
Maury Cnty TN Indl Dev Bd Pollutn
Ctl Multi Modal Saturn Corp Pj 6.50% 9/1/2024 BB 395 397,101
--------------
MULTI-FAMILY HOUSING 1.27%
El Paso Cnty TX Hsg Fin Corp Multi
Fam Hsg Rev Las Lomas Apts Ser A 6.375% 12/1/2029 Ba1 3,280 3,078,543
El Paso Cnty TX Hsg Fin Corp Multi
Fam Hsg Rev Las Lomas Apts Ser A 6.45% 12/1/2019 Ba1 1,515 1,475,140
MA St Hsg Fin Agy Hsg Ser B 5.00% 6/1/2030 AA- 1,000 1,021,500
--------------
TOTAL 5,575,183
--------------
MULTI-FAMILY REVENUE BONDS 3.01%
MD St Cmnty Dev Admin Dept
Hsg & Cmnty Dev Ser A AMT 5.22% 7/1/2045 Aa2 12,890 13,183,376
--------------
NURSING HOME CONTINUING CARE
RETIREMENT COMMUNITIES 1.01%
CO Hlth Facs Auth Rev Covenant
Retirement Cmntys Inc 5.00% 12/1/2035 BBB 4,000 3,938,480
WI Hlth & Edl Facs Hlth Facs
Three Pillars Sr Living A 5.50% 8/15/2034 A-(c) 500 511,575
--------------
TOTAL 4,450,055
--------------
POWER 0.25%
PA Econ Dev Fin Auth Rev
Reliant Energy A AMT 6.75%# 12/1/2036 B1 1,000 1,077,500
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
109
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH YIELD MUNICIPAL BOND FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
RESOURCE RECOVERY 4.32%
Burlington KS Pollutn Ctrl
Rev RI TRS Ser K RIBs+ 9.78% 6/1/2031 AAA $ 4,500 $ 5,436,090
CA Pollutn Ctrl Fin Auth
Solid Wst Mgmt Inc Pj Ser A-2 AMT 5.40% 4/1/2025 BBB 1,000 1,029,040
Fort Wayne IN Pollutn Ctrl Rev
Ref Gen Mtrs Corp Pj 6.20% 10/15/2025 BB 2,030 2,033,654
Gaston Cnty NC Facs & Pollutn Ctrl Fin
Auth Rev Exempt Facs Natl Gypsum Co
Pj AMT 5.75% 8/1/2035 NR 2,000 2,083,600
Independence Cnty AR Pollutn
Ctrl Rev Ref Entergy AR Inc 5.00% 1/1/2021 A- 1,000 1,018,070
Little River Cnty AR Rev Ref
Georgia Pacific Corp Pj AMT 5.60% 10/1/2026 Ba2 2,475 2,487,251
Moraine OH Solid Wst Disp Rev
General Motors Corp Pj AMT 6.75% 7/1/2014 BB 2,000 2,093,700
Niagara Cnty NY Indl Dev Agy
Solid Wst Disposal Ser B AMT 5.55%# 11/15/2024 Baa3 750 795,090
OH St Polltn Ctrl Rev Ref
General Motors Corp Pj 5.625% 3/1/2015 BB 2,000 1,964,840
--------------
TOTAL 18,941,335
--------------
SALES TAX 1.63%
NJ Econ Dev Auth Rev Rites PA
1304 RIBs(12) 10.554% 9/1/2025 AAA 3,350 5,070,359
Wyandotte Cnty Kansas City KS Uni Govt
Spl Oblig Rev Ref Sales Tax 2nd
Lien Area B 5.00% 12/1/2020 BBB-(c) 2,000 2,056,020
--------------
TOTAL 7,126,379
--------------
SECONDARY SCHOOLS 1.70%
FL St Ed Sys Fac Rev FL Ed Sys Ser A(16) 5.00% 5/1/2027 AAA 7,020 7,464,436
--------------
SINGLE FAMILY HOUSING 1.21%
ID Hsg & Fin Assn Sing Fam Mtg Rev
Ser D Cl III AMT 4.90% 1/1/2026 A1 2,000 1,994,760
NJ St Hsg & Mtg Fin Agy Rev
Sing Fam Ser M AMT 5.00% 10/1/2036 AA 1,480 1,512,530
Puerto Rico Hsg Fin Corp
Rev Hmownr Mtg Ser A AMT(13) 5.20% 12/1/2032 AAA 1,745 1,779,063
--------------
TOTAL 5,286,353
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
110
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH YIELD MUNICIPAL BOND FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
SINGLE FAMILY REVENUE BONDS 1.89%
AK St Hsg Fin Corp Rites
PA 1298 RIBs(16) 7.531% 12/1/2025 NR $ 5,000 $ 5,817,600
ND St Hsg Fin Agy Rev Hsg
Fin Prog Home Mtg Fin C AMT(d) 4.70% 1/1/2029 Aa1 2,500 2,471,950
--------------
TOTAL 8,289,550
--------------
SPECIAL ASSESSMENT 7.13%
Arborwood Cmnty Dev Dist FL
Cap Impt Rev Master Infras Pj A 5.35% 5/1/2036 NR 5,000 5,007,600
Bartram Pk Cmnty
Dev Dist FL Spl Assmt 5.30% 5/1/2035 NR 2,000 2,007,940
Brentwood Calif
Infrastr Fin Auth CIFP-1 5.00% 9/2/2025 NR 2,500 2,499,875
Brentwood Calif
Infrastr Fin Auth CIFP-1 5.15% 9/2/2035 NR 1,000 999,950
East Homestead Cmnty Dev Dist
FL Spl Assmt Rev 5.45% 5/1/2036 NR 1,000 1,008,750
Fulton Cnty GA Dev Auth Loc Dist Cooling
Fac Rev Sr Maxon Atlantic Station A AMT 5.125%# 3/1/2026 BBB 1,000 983,180
Lake Elsinore CA Unif Sch
Cmnty Facs Dist Spl Tax No 2004-3 5.25% 9/1/2029 NR 1,650 1,647,690
Murrieta CA Cmnty Facs Dist Spl
Tax No 3 Creekside Vlg Impt Area 1 5.20% 9/1/2035 NR 1,500 1,475,325
Palma Sola Trace Cmnty Dev
Dist FL Cap Impt Rev 5.75% 5/1/2035 NR 885 893,894
Panther Trace II FL Cmnty Dev
Dist Rev Spl Assmt Ser A 5.60% 5/1/2035 NR 1,875 1,883,775
Pine Isl Cmnty Dev Dist FL Spl 5.75% 5/1/2035 NR 3,250 3,321,793
Prince Georges Cnty MD Spl Oblig
Natl Harbor Pj Rmkt 5.20% 7/1/2034 NR 1,750 1,768,515
Prince Georges Cnty Md Spl
Tax Victoria Falls Pj 5.25% 7/1/2035 NR 1,250 1,255,263
River Bend Cmnty Dev Dist FL
Cap Impt Rev 5.45% 5/1/2035 NR 960 963,475
Roseville CA Spl Tax Cmnty
Facs Dist No 1 Westpark 5.15% 9/1/2030 NR 2,000 2,008,380
Roseville CA Spl Tax Cmnty
Facs Dist No 1 Westpark 5.20% 9/1/2036 NR 3,500 3,515,960
--------------
TOTAL 31,241,365
--------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
111
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH YIELD MUNICIPAL BOND FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
SPECIAL TAX 1.84%
Lake Elsinore CA Spl Tax
Cmnty Facs Dist 3 Impt Area 1 5.25% 9/1/2030 NR $ 1,195 $ 1,198,083
Menifee CA Unif Sch Dist Spl
Tax Cmnty Facs Dist No 2002-5 5.50% 9/1/2034 NR 500 500,955
Midtown Miami FL Cmnty Dev FL
Spl Assmt Rev Ser A 6.25% 5/1/2037 NR 500 532,360
Roseville CA Spl Tax Cmnty
Facs Dist No 1 Fiddyment 5.10% 9/1/2036 NR 3,000 2,934,990
South Fork East Cmnty Dev
Dist FL Cap Impt Rev 5.35% 5/1/2036 NR 2,925 2,898,763
--------------
TOTAL 8,065,151
--------------
STUDENT HOUSING 0.24%
Cleveland Cuyahoga Cnty OH
Student Hsg Euclid Ave Fenn Pj(2) 5.00% 8/1/2021 AAA 1,000 1,061,310
--------------
TOBACCO 13.21%
Badger Tob Asset Securitization
Corp WI Asset Bkd 6.375% 6/1/2032 BBB 3,340 3,626,505
Golden St Tob Securitization Corp CA
Tob Settlmnt Res Int Tr
Rcpts F C1 144 A RIBs 6.76% 6/1/2045 A- 10,000 10,305,000
Golden St Tob Securitization Corp
CA Tob Settlmnt Rev Ser 2003 A-1 6.75% 6/1/2039 BBB 1,290 1,483,319
NY Cntys Tob Tr IV
Settlmnt Pass Thru Ser A 5.00% 6/1/2042 BBB 10,000 9,753,200
Northern Tob Securitization Corp AK
Tob Settlmnt Asset Bkd Bds 6.50% 6/1/2031 BBB 1,125 1,187,066
Tob Securitization Auth So CA Tob
Settlmnt Asset Bkd Bds Sr Ser A 5.25% 6/1/2027 BBB 865 887,490
Tob Settlmnt Auth IA Tob Settlmnt
Asset Bkd Ser B 5.60% 6/1/2035 BBB 3,635 3,746,558
Tob Settlmnt Fin Corp NJ 6.75% 6/1/2039 BBB 1,000 1,163,980
Tob Settlmnt Fin Corp RI
Asset Bkd Ser A 6.00% 6/1/2023 BBB 4,075 4,310,087
Tob Settlmnt Fin Corp RI
Asset Bkd Ser A 6.125% 6/1/2032 BBB 1,410 1,497,124
Tob Settlmnt Fin Corp RI
Asset Bkd-Ser A 6.25% 6/1/2042 BBB 2,905 3,096,352
Tob Settlmnt Fin Corp VA Asset Bkd 5.50% 6/1/2026 BBB 3,500 3,635,205
Tob Settlmnt Fin Corp VA Asset Bkd 5.625% 6/1/2037 BBB 9,755 10,133,397
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
112
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH YIELD MUNICIPAL BOND FUND SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Tob Settlmnt Rev Mgmt
Auth SC Sec B 6.375% 5/15/2028 BBB $ 1,850 $ 1,996,446
Westchester Tob Asset
Securitization Corp NY 5.125% 6/1/2038 BBB 1,060 1,067,558
--------------
TOTAL 57,889,287
--------------
TOLL ROADS 0.74%
NJ St Tpk Auth Rev Rols RR II
R 323 RIBs(2) 7.129% 1/1/2035 Aaa 500 530,700
Pocahontas Pkwy Assoc VA Toll
Rd Rev Ser A 5.50% 8/15/2028 BB- 2,105 2,180,633
Puerto Rico Comwlth Hwy &
Trans Auth Rev Ser G 5.00% 7/1/2042 BBB+ 500 511,885
--------------
TOTAL 3,223,218
--------------
TRANSPORTATION 6.37%
Augusta GA Arpt Rev Gen Arprt
Passenger B AMT 5.35% 1/1/2028 Baa3 500 507,235
Metropolitan Transn Auth NY
Rev Res Int Tr Rcpts K3 RIBs+ 7.03% 11/15/2035 NR 10,000 11,020,000
Minneapolis & St Paul MN Met
Arpt Comm Rev Sub Ser A(2) 5.00% 1/1/2035 AAA 13,800 14,358,348
St Paul MN Port Auth Lease
Rev Healtheast Midway Campus 03 A 5.875% 5/1/2030 BB 1,000 1,011,990
Tulsa OK Muni Arpt Tr Rev Ref
Ser A Rmkt AMT 7.75%# 6/1/2035 B- 1,000 1,006,340
--------------
TOTAL 27,903,913
--------------
UNIVERSITIES 2.61%
MA St Dev Fin Agy Rev Boston
Univ Ser T-1(2) 5.00% 10/1/2035 AAA 10,000 10,456,000
MA St Dev Fin Agy Rev Eastern
Nazarene College 5.625% 4/1/2029 BB+ 1,000 998,050
--------------
TOTAL 11,454,050
--------------
WATER/SEWER 1.31%
Austin TX Wtr & Wstwtr Sys Rev Ref(16) 5.00% 5/15/2030 AAA 5,000 5,234,200
NY New York City Muni Wtr Fin
Auth Wtr & Swr Sys Rev Ser B(12) 5.00% 6/15/2036 AAA 500 523,610
--------------
TOTAL 5,757,810
--------------
TOTAL MUNICIPAL BONDS (cost $433,745,905) 433,917,454
==============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
113
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
HIGH YIELD MUNICIPAL BOND FUND SEPTEMBER 30, 2005
<Table>
<Caption>
SHARES
INVESTMENTS (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 0.00%
MONEY MARKET MUTUAL FUNDS 0.00%
Dreyfus Municipal Cash Management Plus 1 $ 1,339
SSgA Tax Free Money Market Fund 13 12,577
--------------
TOTAL SHORT-TERM INVESTMENTS (cost $13,916) 13,916
==============
TOTAL INVESTMENTS IN SECURITIES 99.00% (cost $433,759,821) 433,931,370
==============
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES 1.00% 4,356,598
--------------
NET ASSETS 100.00% $ 438,287,968
==============
</Table>
SCHEDULE OF INVESTMENTS
MICHIGAN TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
RATE DATE MOODY'S(a) (000)
--------------------------------------------------
MUNICIPAL BONDS 97.65%
EDUCATION 8.59%
Eastern MI Univ Rev Gen Ser B(11) 5.60% 6/1/2025 AAA $ 1,430 1,551,507
Grand Vly MI St Univ Rev(11) 5.50% 2/1/2018 AAA 1,150 1,288,748
MI Muni Bd Auth Rev Ref Sch
Dist City of Detroit(12) 5.00% 6/1/2020 AAA 1,000 1,061,280
MI St Grant Antic Notes Ser B(12) 2.74%# 9/15/2009 AAA 690 690,000
Puerto Rico Comwlth
Pub Impt Rites PA 1280 RIBs 6.795% 7/1/2034 AA+ 1,000 1,059,800
Univ MI Univ Rev Student Fee Ser A 6.00% 4/1/2007 AAA 250 260,802
Wayne Cnty MI Cmnty College Impt(2) 5.50% 7/1/2019 AAA 565 607,149
--------------
TOTAL 6,519,286
--------------
GENERAL OBLIGATION 22.15%
Adrian MI City Sch Dist(12) 5.00% 5/1/2034 AAA 1,500 1,561,470
Anchor Bay MI Sch Dist Sch
Bldg & Site 5.00% 5/1/2033 AA 1,000 1,033,500
Belding MI Area Sch(2) 5.00% 5/1/2026 AAA 400 412,636
Birmingham MI City Sch Dist
Sch Bldg & Site(12) 5.00% 11/1/2033 AAA 1,000 1,044,450
Caledonia MI Cmnty Schs Ref(5)(12) 5.25% 5/1/2022 AAA 1,025 1,104,489
Carman-Ainsworth MI Cmnty Sch(11) 5.00% 5/1/2027 AAA 1,000 1,040,840
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
114
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MICHIGAN TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Grand Blanc MI Cmnty Schs Sch
Bldg & Site(12) 5.00% 5/1/2021 AAA $ 500 $ 531,120
Grand Rapids MI Smartzone Loc
Dev Auth(2) 5.375% 6/1/2028 AAA 1,125 1,225,148
Huron MI Sch Dist(12) 5.25% 5/1/2021 AAA 250 265,978
Kaleva Norman ETC MI Sch Dist
Bldg & Site Ref(11) 6.00% 5/1/2025 Aaa 600 657,966
Kenowa Hills MI Pub Schs Ref(11) 5.00% 5/1/2026 AAA 1,305 1,376,018
Lake Orion MI Cmnty Sch Dist Ref 5.125% 5/1/2022 AA 550 582,824
Saginaw MI City Sch Dist Sch
Bldg & Site(12) 5.00% 5/1/2034 AAA 1,125 1,171,912
South Lyon MI Cmnty Schs Sch
Bldg & Site(11) 5.25% 5/1/2022 AAA 1,000 1,078,220
Southfield MI Pub Schs Sch
Bldg & Site Ser A(11) 5.25% 5/1/2021 AAA 1,025 1,107,266
Southfield MI Pub Schs Sch
Bldg & Site Ser B(12) 5.00% 5/1/2029 AAA 1,000 1,048,250
Warren MI Cons Sch Dist Sch
Bldg & Site(11) 5.00% 5/1/2027 AAA 1,000 1,046,120
Wayne Cnty MI Bldg Auth Cap
Impt Ser A(16) 5.25% 6/1/2016 AAA 500 517,200
--------------
TOTAL 16,805,407
--------------
HEALTHCARE 6.25%
MI St Hosp Fin Auth Rev(16) 5.00% 11/15/2036 AAA 3,500 3,635,170
MI St Hosp Fin Auth Rev Ref
Trinity Hlth Ser A(2)(18) 6.00% 12/1/2027 AAA 1,000 1,107,330
--------------
TOTAL 4,742,500
--------------
LEASE 3.52%
Grand Rapids MI Pub Sch(16) 5.00% 11/1/2021 AAA 250 263,528
MI St COP(2) Zero Coupon 6/1/2022 AAA 2,000 924,060
MI St Hse Reps Cap Apprec COP(2) Zero Coupon 8/15/2024 AAA 3,565 1,478,833
--------------
TOTAL 2,666,421
--------------
MISCELLANEOUS 7.77%
MI Muni Bd Auth Rev Ref Sch
Ln Ser A(15)(16) 5.25% 6/1/2010 AAA 2,500 2,710,925
MI St Bldg Auth Rev Ref Facs
Pg Ser I(12) 5.00% 10/15/2009 AAA 1,500 1,601,265
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
115
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
MICHIGAN TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MI St Bldg Auth Rev Ref Facs
Pg Ser I(2) 5.00% 10/15/2033 AAA $ 1,500 $ 1,579,785
--------------
TOTAL 5,891,975
--------------
POWER 3.46%
MI St Strategic Fd Ltd Oblig(2) 7.00% 5/1/2021 AAA 500 652,070
MI St Strategic Fd Ltd Oblig
Rev Detroit Fd Ser BB(16) 7.00% 7/15/2008 AAA 350 385,060
Puerto Rico Elec Pwr Auth Pwr
Rev Ser NN(16) 5.00% 7/1/2032 AAA 500 523,470
Puerto Rico Elec Pwr Auth Pwr
Rev Ser RR(19) 5.00% 7/1/2025 AAA 1,000 1,063,340
--------------
TOTAL 2,623,940
--------------
PRE-REFUNDED 32.74%
Alpena MI Pub Schs(16) 5.625% 5/1/2022 AAA 500 520,940
Anchor Bay MI Sch Dist Sch
Bldg & Site Ser I(11) 6.00% 5/1/2023 AAA 1,100 1,206,271
Bloomingdale MI Pub Sch Dist No 16 5.50% 5/1/2021 AA 450 499,037
Central Montcalm MI Pub Schs(16) 5.90% 5/1/2019 AAA 1,000 1,093,260
Crawford Ausable MI Sch Dist
Sch Bldg & Site 5.00% 5/1/2021 AA 350 378,385
Detroit MI City Sch Dist Sch
Bldg & Site Impt Ser A(11) 5.25% 5/1/2028 AAA 1,000 1,105,690
Eastern MI Univ Rev(11) 5.50% 6/1/2027 AAA 500 519,835
Elkton Pigeon Bay Port MI Sch Dist 5.375% 5/1/2025 AA 700 763,021
Forest Hills MI Pub Schs(11) 5.25% 5/1/2020 Aaa 2,000 2,169,520
Greenville MI Pub Sch Ref(12) 6.00% 5/1/2025 AAA 1,000 1,096,610
Hartland MI Cons Sch Dist(11) 6.00% 5/1/2021 AAA 1,950 2,176,960
Howell MI Pub Sch(16) 6.00% 5/1/2025 AAA 1,100 1,152,360
Huron Vly MI Sch Dist(11) 5.75% 5/1/2022 AAA 250 260,945
Kalamazoo MI Hosp Fin Auth
Fac Rev Hosp Rev ETM RIBs(11) 7.708% 6/1/2011 AAA 2,000 2,056,520
Laingsburg MI Cmnty Sch Dist
Sch Bldg & Site Bd 5.25% 5/1/2026 AA 450 493,362
Lake Orion MI Cmnty Sch Dist Ser A(11) 6.00% 5/1/2017 AAA 1,335 1,484,386
Lakeview MI Cmnty Sch(11) 5.60% 5/1/2022 AAA 210 218,713
Memphis MI Cmnty Sch Ref(11) 5.25% 5/1/2029 Aaa 150 160,717
MI St Comprehensive Transn Ser B(12) 5.25% 5/15/2020 AAA 1,000 1,103,690
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
116
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
MICHIGAN TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Paw Paw MI Pub Sch Dist Sch
Bldg & Site 6.00% 5/1/2030 AA $ 1,325 $ 1,479,217
Potterville MI Pub Sch(12) 6.00% 5/1/2029 AAA 1,000 1,096,610
Puerto Rico Comwlth Hwy &
Transn Auth Rev Ser B 6.50% 7/1/2027 BBB+ 1,000 1,146,400
Puerto Rico Comwlth Ser A ETM 5.50% 10/1/2040 AAA 1,000 1,092,030
South Lyon MI Cmnty Schs(12) 5.50% 5/1/2023 AAA 1,425 1,560,803
--------------
TOTAL 24,835,282
--------------
TRANSPORTATION 4.15%
MI St Comprehensive Transn
Ref Ser A(12) 5.00% 11/1/2021 AAA 700 733,922
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites PA 1052 RIBs 8.225% 1/1/2010 BBB+(b) 500 629,490
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser K(d) 5.00% 7/1/2045 BBB+ 1,750 1,787,782
--------------
TOTAL 3,151,194
--------------
WATER/SEWER 9.02%
Detroit MI Disp Rev Ref Sr
Lien Ser A(12) 5.00% 7/1/2028 AAA 1,000 1,042,930
Detroit MI Wtr Supply Sys Sr
Lien Ser A(16) 5.00% 7/1/2034 AAA 1,000 1,038,260
Grand Rapids MI Santn Swr Sys
Rev Ref & Impt Ser A(11) 4.75% 1/1/2028 AAA 1,050 1,061,036
Lansing MI Bd Wtr & Lt Wtr
Supply Steam & Elec Util Sys(12) 5.00% 7/1/2022 AAA 1,865 1,972,704
MI Muni Bd Auth Rev Drinking
Wtr St Revolving Fd 5.00% 10/1/2024 AAA 1,000 1,054,830
Muskegon Heights MI Wtr Sys Ser A(16) 5.625% 11/1/2020 Aaa 300 327,345
Muskegon Heights MI Wtr Sys Ser A(16) 5.625% 11/1/2025 Aaa 320 348,550
--------------
TOTAL 6,845,655
--------------
TOTAL INVESTMENTS IN MUNICIPAL BONDS 97.65% (cost $69,836,627) 74,081,660
==============
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES 2.35% 1,780,650
--------------
NET ASSETS 100.00% $ 75,862,310
==============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
117
<Page>
SCHEDULE OF INVESTMENTS
PENNSYLVANIA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 100.53%
EDUCATION 15.72%
Lehigh Cnty PA Gen Purp Auth Rev
Desales Univ Pj(17) 5.125% 12/15/2023 AA $ 1,000 $ 1,051,790
PA St Higher Edl Facs Auth Rev
Drexel Univ Ser A 5.20% 5/1/2032 A 600 631,488
PA St Higher Edl Facs Auth Rev
Lafayette College Pj 6.00% 5/1/2030 AA- 1,425 1,568,583
PA St Higher Edl Facs Auth
Moravian College Pj(17) 5.375% 7/1/2031 AA 1,000 1,047,870
PA St Higher Edl Facs Auth Rev
Slippery Rock Univ Fndtn Ser A(19) 5.00% 7/1/2037 AAA 1,000 1,042,210
PA St Higher Edl Facs Auth Rev
Univ of Scranton(2) 5.75% 11/1/2017 AAA 1,000 1,106,580
PA St Higher Edl Facs Auth
Univ of the Arts(17) 5.75% 3/15/2030 AA 500 531,320
PA St Higher Edl Facs Auth
Univ of the Arts(17) 5.625% 3/15/2025 AA 1,000 1,051,410
PA St Higher Edl Facs Auth Rev
Ursinus College(17) 5.50% 1/1/2024 AA 1,000 1,077,530
Philadelphia PA Auth Indl Dev
Rev Ed Cmnty Fgn Med Grads(16) 5.00% 6/1/2015 AAA 250 259,935
Philadelphia PA Sch Dist(11) 5.25% 6/1/2034 AAA 3,000 3,195,060
State Pub Sch Bldg Auth PA
College Rev(2) Zero Coupon 7/15/2014 AAA 295 205,172
State Pub Sch Bldg Auth PA
College Rev(2) Zero Coupon 7/15/2015 AAA 295 195,169
State Pub Sch Bldg Auth PA
College Rev(2) Zero Coupon 7/15/2016 AAA 295 186,110
State Pub Sch Bldg Auth PA
Jefferson Cnty Dubois Tech Sch(11) 5.00% 2/1/2029 AAA 1,000 1,046,400
State Pub Sch Bldg Auth PA
Sch Rev Lease Phil Sch(12) 5.25% 6/1/2027 AAA 1,000 1,066,730
--------------
TOTAL 15,263,357
--------------
GENERAL OBLIGATION 9.08%
Annville Cleona PA Sch Dist(12) 6.00% 3/1/2031 Aaa 500 576,880
Bristol Boro PA Sch Dist(12) 5.25% 3/1/2031 AAA 500 541,325
Delaware Vly PA Regl Fin Auth
Loc Govt Rev Ser C(2) 7.75% 7/1/2027 AAA 1,000 1,417,650
Montgomery Cnty PA 5.00% 9/15/2022 Aaa 625 657,088
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
118
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
PENNSYLVANIA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Pennsbury PA Sch Dist(11) 5.50% 1/15/2020 Aaa $ 1,000 $ 1,096,300
Puerto Rico Comwlth
Pub Impt Ser A 5.00% 7/1/2034 BBB 1,500 1,544,850
Puerto Rico Comwlth
Unrefunded Bal Ser A 5.375% 7/1/2028 BBB 1,825 1,932,273
West Middlesex Area Sch Dist PA(11) 5.15% 12/15/2030 AAA 1,000 1,044,620
--------------
TOTAL 8,810,986
--------------
HEALTHCARE 5.74%
Allegheny Cnty PA Hosp Dev
Catholic Hlth East Issue 5.50% 11/15/2032 A1 1,500 1,581,015
Delaware Cnty PA Auth Hosp
Rev Crozer Chester Med Ctr(1)(3) 5.375% 12/1/2018 A 1,000 1,035,610
Montgomery Cnty PA Higher Ed &
Hlth Sys Catholic Hlth East C 5.375% 11/15/2034 A1 1,000 1,054,820
Puerto Rico Indl Tourist Ed
Mutuo Oblig Grp Ser A(16) 6.25% 7/1/2024 AAA 850 866,184
Southcentral PA Gen Auth Rev
Hosp Hanover Hosp Inc(d)(17) 5.00% 12/1/2027 AA 1,000 1,032,920
--------------
TOTAL 5,570,549
--------------
INDUSTRIAL 3.71%
Allegheny Cnty PA Indl Dev
Auth Rev Envr Impt USX Pj 6.10% 7/15/2020 BBB+ 1,000 1,049,860
Philadelphia PA Auth For Indl
Dev Lease Rev Ser B(12) 5.125% 10/1/2026 AAA 1,000 1,053,660
York Cnty PA Ind Dev Auth
Pollutn Ctrl Rev Svc Elec & Gas Ser A(16) 6.45% 10/1/2019 AAA 1,475 1,494,013
--------------
TOTAL 3,597,533
--------------
LEASE 1.65%
York PA Gen Auth Rev York
City Recreation Corp(2) 5.50% 5/1/2018 AAA 1,475 1,602,130
--------------
MISCELLANEOUS 4.28%
Allegheny Cnty PA Redev Auth
Tax Inc Rev Wtrfrt Pj Ser A 6.30% 12/15/2018 A-(c) 1,000 1,096,250
Erie Cnty PA Convention Ctr GTD(11) 5.00% 1/15/2036 AAA 1,170 1,222,018
Puerto Rico Pub Bldgs Auth
Rev Govt Facs Ser I GTD 5.375% 7/1/2034 BBB 1,000 1,068,540
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
119
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
PENNSYLVANIA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Washington Cnty PA Auth Rev
Cap Fdg Rev Pj & Equip Pg(2) 6.15% 12/1/2029 AAA $ 730 $ 763,887
--------------
TOTAL 4,150,695
--------------
PRE-REFUNDED 41.81%
Allegheny Cnty PA Port Auth
Spl Rev Transn(16) 6.00% 3/1/2013 AAA 2,000 2,202,660
Allegheny Cnty PA Port Auth
Spl Rev Transn(16) 6.125% 3/1/2029 AAA 500 552,670
Allegheny Cnty PA San Auth Swr Rev(16) 5.375% 12/1/2024 AAA 2,000 2,130,640
Bethlehem PA Area Sch Dist(16) 6.00% 3/1/2016 AAA 1,000 1,012,930
Bucks Cnty PA Wtr & Swr Auth
Neshaminy Interceptor Swr Sys(2) 5.50% 6/1/2017 Aaa 465 502,935
Childrens Tr Fd Puerto Rico
Tob Set Rev 6.00% 7/1/2026 AAA 750 837,075
Mifflin Cnty PA(11) 5.625% 9/1/2031 AAA 2,500 2,798,100
Montgomery Cnty PA Indl Dev
Auth Rev Hill Sch Pj(16) 5.35% 8/15/2027 Aaa 2,250 2,348,258
PA Conv Ctr Auth Rev Ser A ETM(11) 6.70% 9/1/2016 AAA 855 1,013,628
PA St Higher Edl Facs Auth Rev
Drexel Univ 6.00% 5/1/2029 A 800 875,872
PA St Higher Edl Facs Auth Rev
Univ Sciences Phil(16) 5.25% 11/1/2025 AAA 1,000 1,064,030
PA St Tpk Commn(2) 5.50% 7/15/2033 AAA 3,000 3,355,830
Philadelphia PA Gas Wks Rev
Twelfth Ser B ETM(16) 7.00% 5/15/2020 AAA 2,220 2,704,715
Philadelphia PA Sch Dist Ser A(12) 5.50% 2/1/2031 AAA 500 555,350
Philadelphia PA Sch Dist Ser A(12) 5.75% 2/1/2019 AAA 450 502,457
Philadelphia PA Sch Dist Ser A(12) 5.75% 2/1/2020 AAA 250 279,142
Philadelphia PA Sch Dist Ser A(12) 5.75% 2/1/2021 AAA 500 558,285
Philadelphia PA Sch Dist Ser A(12) 5.75% 2/1/2030 AAA 1,250 1,395,712
Philadelphia PA Sch Dist Ser B(11) 5.625% 8/1/2021 AAA 1,000 1,123,400
Philadelphia PA Sch Dist Ser B(11) 5.625% 8/1/2022 AAA 1,000 1,123,400
Plum Boro PA Sch Dist(11) 5.25% 9/15/2030 AAA 1,000 1,099,920
Puerto Rico Comwlth Hwy &
Transn Auth Transn Rev Ser D 5.75% 7/1/2041 BBB+ 2,000 2,258,980
Puerto Rico Comwlth Hwy &
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2026 BBB+ 1,000 1,033,210
Puerto Rico Comwlth
Pub Impt Ser A 5.375% 7/1/2028 AAA 925 1,023,022
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
120
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
PENNSYLVANIA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Quaker Vly PA Sch Dist(12) 5.50% 4/1/2025 Aaa $ 800 $ 904,080
Radnor Twp PA Sch Dist 5.75% 3/15/2026 Aa3 1,200 1,248,360
Riverside PA Sch Dist(11) 5.50% 10/15/2020 AAA 1,000 1,097,260
State Pub Sch Bldg Auth PA
Northhampton Area Cmnty College(2) 5.75% 3/1/2020 AAA 1,775 1,972,114
State Pub Sch Bldg Auth PA
Rev Del Cnty Cmnty College Pj(16) 5.50% 10/1/2020 AAA 800 866,184
Tredyffrin Easttown PA Sch Dist 5.50% 2/15/2017 Aaa 1,000 1,098,960
York Cnty PA Hosp Auth Rev
York Hosp(2) 5.25% 7/1/2017 AAA 1,000 1,048,690
--------------
TOTAL 40,587,869
--------------
RESOURCE RECOVERY 1.09%
Allegheny Cnty PA San Auth
Swr Rev Ref Ser A(16) 5.00% 12/1/2025 AAA 1,000 1,054,530
--------------
TRANSPORTATION 13.40%
Allegheny Cnty PA Arpt Rev(16) 5.00% 1/1/2017 AAA 1,000 1,027,890
Delaware River Port Auth PA &
NJ Ref Port Dist Pj Ser A(12) 5.20% 1/1/2027 AAA 1,000 1,061,650
Delaware River Port Auth PA &
NJ Rev(12) 6.00% 1/1/2019 AAA 1,000 1,100,940
PA St Tpk Commn Tpk Rev Ser A(2) 5.25% 12/1/2032 AAA 1,000 1,083,020
Philadelphia PA Arpt Rev Ser A AMT(16) 4.75% 6/15/2035 AAA 1,000 990,500
Puerto Rico Comwlth Hwy &
Tran Ser G(11) 5.25% 7/1/2020 AAA 1,000 1,090,770
Puerto Rico Comwlth Hwy &
Transn Auth Hwy Rev Ser Y 5.50% 7/1/2036 BBB+ 2,000 2,190,120
Puerto Rico Comwlth Hwy &
Transn Auth Rev Rites PA 1052 RIBs 8.225% 1/1/2010 BBB+(b) 2,750 3,462,195
Puerto Rico Port Auth Rev Ser D AMT(11) 7.00% 7/1/2014 AAA 1,000 1,006,290
--------------
TOTAL 13,013,375
--------------
WATER/SEWER 4.05%
Bucks Cnty PA Wtr & Swr Auth
Rev Ser A(2) 5.00% 6/1/2024 AAA 1,000 1,045,980
Delaware Cnty PA Indl Dev Auth Wtr
Facs Aqua PA Inc Pj Ser A AMT(11) 5.00% 11/1/2036 AAA 1,000 1,031,110
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
121
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
PENNSYLVANIA TAX-FREE TRUST SEPTEMBER 30, 2005
<Table>
<Caption>
RATING: PRINCIPAL
INTEREST MATURITY S&P OR AMOUNT
INVESTMENTS RATE DATE MOODY'S(a) (000) VALUE
- ---------------------------------------------------------------------------------------------------------------
Luzerne Cnty PA Indl Dev Auth
PA Amern Wtr Co Ser A AMT(2) 5.10% 9/1/2034 AAA $ 1,000 $ 1,031,730
North Huntingdon Twp PA GTD(2) 5.25% 4/1/2019 AAA 760 823,528
--------------
TOTAL 3,932,348
--------------
TOTAL INVESTMENTS IN MUNICIPAL BONDS 100.53% (cost $91,115,498) 97,583,372
==============
LIABILITIES IN EXCESS OF OTHER ASSETS (0.53%) (514,545)
--------------
NET ASSETS 100.00% $ 97,068,827
==============
</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.
+ Security is exempt from registration under Rule 144A of the Securities
Act of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
# Variable Rate Security. The interest rate represents the rate at
September 30, 2005.
AMT Income from this security may be subject to Alternative Minimum Tax.
COP Certificates of Participation.
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.
RITES Residual Interest Tax-Exempt Security. The interest rate is subject to
change periodically and inversely to the prevailing market rate.
RIBs Residual Interest Bond. The interest rate is subject to change
periodically and inversely to the prevailing market rate. The interest
rate shown is the rate in effect at September 30, 2005.
NR Not Rated.
Insured or guaranteed by the indicated municipal bond insurance corporation or
Federal agency:
(1) American Capital Access Holdings Ltd.
(2) AMBAC Assurance Corporation
(3) Certified Bond Insurance
(4) CIFG Guaranty
(5) Custodian Receipt
(6) Department of Housing and Urban Development
(7) Department of Veterans Affairs
(8) Federal Home Loan Mortgage Corporation
(9) Federal Housing Administration
(10) Federal National Mortgage Association
(11) Financial Guaranty Insurance Company
(12) Financial Security Assurance Inc.
(13) Government National Mortgage Association
(14) Government National Mortgage Association/Federal National Mortgage
Association
(15) Insurance Bond Certificate
(16) Municipal Bond Investors Assurance Corporation
(17) Radian Asset Assurance Inc.
(18) Temporary Custodial Receipts
(19) XL Capital Assurance Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
122
<Page>
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2005
<Table>
<Caption>
NATIONAL CALIFORNIA
ASSETS:
Investment in securities, at cost $ 548,130,055 $ 173,410,787
- ---------------------------------------------------------------------------------------------------------
Investment in securities, at value $ 581,356,944 $ 182,813,545
Cash 5,530,792 20,577
Receivables:
Interest and dividends 7,735,375 2,152,108
Investment securities sold 4,536,501 -
Capital shares sold 1,002,331 132,415
From advisor - -
Prepaid expenses and other assets 23,133 5,661
- ---------------------------------------------------------------------------------------------------------
TOTAL ASSETS 600,185,076 185,124,306
- ---------------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 27,094,483 3,753,765
Capital shares reacquired 607,945 252,467
Management fees 211,931 66,424
12b-1 distribution fees 267,069 87,640
Fund administration 20,157 6,381
Directors' fees 320,087 181,417
To bank - -
Dividends payable 1,630,990 493,607
Accrued expenses and other liabilities 191,168 103,009
- ---------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 30,343,830 4,944,710
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $ 569,841,246 $ 180,179,596
=========================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 553,638,632 $ 173,613,295
Distributions in excess of net investment income (1,327,652) (70,560)
Accumulated net realized gain (loss) on investments (15,696,623) (2,765,897)
Net unrealized appreciation on investments 33,226,889 9,402,758
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $ 569,841,246 $ 180,179,596
=========================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 497,310,203 $ 166,226,513
Class B Shares $ 31,209,401 -
Class C Shares $ 41,321,642 $ 13,953,083
OUTSTANDING SHARES BY CLASS*:
Class A Shares 43,067,002 15,160,472
Class B Shares 2,695,632 -
Class C Shares 3,572,599 1,271,623
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(NET ASSETS DIVIDED BY OUTSTANDING SHARES):
Class A Shares-Net asset value $ 11.55 $ 10.96
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 3.25%) $ 11.94 $ 11.33
Class B Shares-Net asset value $ 11.58 -
Class C Shares-Net asset value $ 11.57 $ 10.97
</Table>
*Lord Abbett Municipal Income Fund, Inc. 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. Lord Abbett Municipal Income
Trust has an unlimited number of shares of benefical interest authorized.
SEE NOTES TO FINANCIAL STATEMENTS.
124
<Page>
<Table>
<Caption>
CONNECTICUT HAWAII MINNESOTA
ASSETS:
Investment in securities, at cost $ 86,626,468 $ 70,650,006 $ 40,889,234
- ----------------------------------------------------------------------------------------------------------------------------
Investment in securities, at value $ 91,838,691 $ 74,817,478 $ 42,584,907
Cash - 2,410,342 1,251,808
Receivables:
Interest and dividends 1,250,536 1,029,983 500,679
Investment securities sold - - 28,000
Capital shares sold 37,119 361,256 61,670
From advisor 50,981 - -
Prepaid expenses and other assets 3,936 2,931 1,892
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 93,181,263 78,621,990 44,428,956
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 1,582,725 - 1,058,046
Capital shares reacquired 56,873 56,681 5,150
Management fees 34,085 28,540 15,681
12b-1 distribution fees 41,417 36,858 -
Fund administration 2,822 2,692 1,478
Directors' fees 30,766 22,933 3,206
To bank 22,505 - -
Dividends payable 281,041 224,540 125,906
Accrued expenses and other liabilities 50,993 32,317 37,235
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 2,103,227 404,561 1,246,702
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 91,078,036 $ 78,217,429 $ 43,182,254
============================================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 87,755,703 $ 76,602,141 $ 42,161,978
Distributions in excess of net investment income (298,911) (228,848) (24,402)
Accumulated net realized gain (loss) on investments (1,590,979) (2,323,336) (650,995)
Net unrealized appreciation on investments 5,212,223 4,167,472 1,695,673
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 91,078,036 $ 78,217,429 $ 43,182,254
============================================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 91,078,036 $ 78,217,429 $ 43,182,254
Class B Shares - - -
Class C Shares - - -
OUTSTANDING SHARES BY CLASS*:
Class A Shares 8,626,856 15,527,490 8,327,092
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 $ 10.56 $ 5.04 $ 5.19
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 3.25%) $ 10.91 $ 5.21 $ 5.36
Class B Shares-Net asset value - - -
Class C Shares-Net asset value - - -
<Caption>
MISSOURI NEW JERSEY NEW YORK
ASSETS:
Investment in securities, at cost $ 152,387,509 $ 129,797,265 $ 225,134,018
- ----------------------------------------------------------------------------------------------------------------------------
Investment in securities, at value $ 159,766,239 $ 138,563,523 $ 239,155,955
Cash 2,324,474 124,999 245,631
Receivables:
Interest and dividends 2,048,293 1,957,640 3,247,496
Investment securities sold 20,089 - 8,052,917
Capital shares sold 84,898 - 136,297
From advisor 9,224 - 257,792
Prepaid expenses and other assets 4,861 3,601 6,542
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 164,258,078 140,649,763 251,102,630
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 1,797,408 2,628,450 5,481,312
Capital shares reacquired 161,277 75,719 333,378
Management fees 59,826 51,185 90,005
12b-1 distribution fees 56,686 70,856 120,450
Fund administration 5,662 4,889 8,580
Directors' fees 36,256 50,339 153,808
To bank - - -
Dividends payable 465,871 391,793 729,870
Accrued expenses and other liabilities 51,225 57,141 84,991
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 2,634,211 3,330,372 7,002,394
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 161,623,867 $ 137,319,391 $ 244,100,236
============================================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 154,548,792 $ 134,047,030 $ 231,612,213
Distributions in excess of net investment income (466,214) (367,648) (861,779)
Accumulated net realized gain (loss) on investments 162,559 (5,126,249) (672,135)
Net unrealized appreciation on investments 7,378,730 8,766,258 14,021,937
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 161,623,867 $ 137,319,391 $ 244,100,236
============================================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 161,623,867 $ 137,319,391 $ 229,598,290
Class B Shares - - -
Class C Shares - - $ 14,501,946
OUTSTANDING SHARES BY CLASS*:
Class A Shares 30,223,008 26,396,826 20,273,580
Class B Shares - - -
Class C Shares - - 1,280,860
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(NET ASSETS DIVIDED BY OUTSTANDING SHARES):
Class A Shares-Net asset value $ 5.35 $ 5.20 $ 11.32
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 3.25%) $ 5.53 $ 5.37 $ 11.70
Class B Shares-Net asset value - - -
Class C Shares-Net asset value - - $ 11.32
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
125
<Page>
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
SEPTEMBER 30, 2005
<Table>
<Caption>
TEXAS WASHINGTON
ASSETS:
Investment in securities, at cost $ 68,952,440 $ 45,547,484
- ---------------------------------------------------------------------------------------------------------
Investment in securities, at value $ 75,411,215 $ 48,727,307
Cash - 53,580
Receivables:
Interest and dividends 1,202,230 695,449
Investment securities sold 1,118,670 -
Capital shares sold 33,373 27
From advisor 9,982 -
Prepaid expenses and other assets 2,763 520
- ---------------------------------------------------------------------------------------------------------
TOTAL ASSETS 77,778,233 49,476,883
- ---------------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 1,106,870 1,540,635
Capital shares reacquired 2,013 1,042
Management fees 28,233 18,485
12b-1 distribution fees 67,008 -
Fund administration 2,781 1,662
Directors'/Trustees' fees 35,147 18,302
To bank 236,027 -
Dividends payable 234,287 147,860
Accrued expenses and other liabilities 41,223 39,672
- ---------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,753,589 1,767,658
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $ 76,024,644 $ 47,709,225
=========================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 73,644,269 $ 46,746,096
Undistributed (distributions in excess of) net investment income (224,065) 219,243
Accumulated net realized loss on investments (3,854,335) (2,435,937)
Net unrealized appreciation on investments 6,458,775 3,179,823
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $ 76,024,644 $ 47,709,225
=========================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 76,024,644 $ 47,709,225
Class B Shares - -
Class C Shares - -
Class P Shares - -
OUTSTANDING SHARES BY CLASS*:
Class A Shares 7,467,338 9,283,759
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 $ 10.18 $ 5.14
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 3.25%) $ 10.52 $ 5.31
Class B Shares-Net asset value - -
Class C Shares-Net asset value - -
Class P Shares-Net asset value - -
</Table>
*Lord Abbett Municipal Income Fund, Inc. 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. Lord Abbett Municipal Income Trust
has anunlimited number of shares of benefical interest authorized.
SEE NOTES TO FINANCIAL STATEMENTS.
126
<Page>
<Table>
<Caption>
INSURED
INTERMEDIATE FLORIDA GEORGIA
ASSETS:
Investment in securities, at cost $ 12,028,901 $ 69,158,433 $ 96,785,621
- ----------------------------------------------------------------------------------------------------------------------------
Investment in securities, at value $ 12,043,378 $ 74,263,756 $ 100,870,725
Cash 36,010 162,678 1,301,220
Receivables:
Interest and dividends 152,605 1,313,957 1,547,430
Investment securities sold - 1,020,000 -
Capital shares sold 330,056 136,110 592,513
From advisor 25,578 18,141 -
Prepaid expenses and other assets 29,368 20,625 3,226
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 12,616,995 76,935,267 104,315,114
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased - 1,022,200 -
Capital shares reacquired 48,941 630 37,428
Management fees 3,930 28,576 37,674
12b-1 distribution fees 6,800 45,391 -
Fund administration 394 2,697 3,555
Directors'/Trustees' fees 4,421 42,485 5,251
To bank - - -
Dividends payable 19,851 225,042 295,901
Accrued expenses and other liabilities 31,297 49,743 48,526
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 115,634 1,416,764 428,335
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 12,501,361 $ 75,518,503 $ 103,886,779
============================================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 12,605,692 $ 76,782,160 $ 99,775,608
Undistributed (distributions in excess of) net investment income 19,158 (246,382) 89,562
Accumulated net realized loss on investments (137,966) (6,122,598) (63,495)
Net unrealized appreciation on investments 14,477 5,105,323 4,085,104
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 12,501,361 $ 75,518,503 $ 103,886,779
============================================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 7,940,551 $ 68,632,925 $ 103,886,779
Class B Shares $ 775,059 - -
Class C Shares $ 3,775,380 $ 6,885,578 -
Class P Shares $ 10,371 - -
OUTSTANDING SHARES BY CLASS*:
Class A Shares 809,955 14,369,841 18,344,173
Class B Shares 79,150 - -
Class C Shares 385,581 1,439,655 -
Class P Shares 1,058 - -
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(NET ASSETS DIVIDED BY OUTSTANDING SHARES):
Class A Shares-Net asset value $ 9.80 $ 4.78 $ 5.66
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 3.25%) $ 10.13 $ 4.94 $ 5.85
Class B Shares-Net asset value $ 9.79 - -
Class C Shares-Net asset value $ 9.79 $ 4.78 -
Class P Shares-Net asset value $ 9.80 - -
<Caption>
HIGH YIELD MICHIGAN PENNSYLVANIA
ASSETS:
Investment in securities, at cost $ 433,759,821 $ 69,836,627 $ 91,115,498
- ----------------------------------------------------------------------------------------------------------------------------
Investment in securities, at value $ 433,931,370 $ 74,081,660 $ 97,583,372
Cash 6,701,875 2,632,501 -
Receivables:
Interest and dividends 5,817,764 1,305,664 1,296,354
Investment securities sold 1,027,639 - 246,225
Capital shares sold 12,831,596 66,820 70,124
From advisor 424,147 - 7,970
Prepaid expenses and other assets 15,660 3,385 2,853
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 460,750,051 78,090,030 99,206,898
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 19,381,920 1,797,408 1,034,398
Capital shares reacquired 1,147,334 117,359 115,048
Management fees 154,085 28,074 36,190
12b-1 distribution fees 177,695 - 48,406
Fund administration 12,453 2,643 3,435
Directors'/Trustees' fees 6,273 12,919 24,904
To bank - - 537,739
Dividends payable 1,498,518 225,986 287,036
Accrued expenses and other liabilities 83,805 43,331 50,915
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 22,462,083 2,227,720 2,138,071
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 438,287,968 $ 75,862,310 $ 97,068,827
============================================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 439,315,681 $ 73,780,815 $ 91,804,497
Undistributed (distributions in excess of) net investment income (461,975) (215,682) (291,303)
Accumulated net realized loss on investments (737,287) (1,947,856) (912,241)
Net unrealized appreciation on investments 171,549 4,245,033 6,467,874
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 438,287,968 $ 75,862,310 $ 97,068,827
============================================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 312,947,744 $ 75,862,310 $ 97,068,827
Class B Shares $ 10,678 - -
Class C Shares $ 125,318,863 - -
Class P Shares $ 10,683 - -
OUTSTANDING SHARES BY CLASS*:
Class A Shares 20,302,602 14,328,196 18,322,331
Class B Shares 693 - -
Class C Shares 8,130,916 - -
Class P Shares 693 - -
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(NET ASSETS DIVIDED BY OUTSTANDING SHARES):
Class A Shares-Net asset value $ 15.41 $ 5.29 $ 5.30
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 3.25%) $ 15.93 $ 5.47 $ 5.48
Class B Shares-Net asset value $ 15.41 - -
Class C Shares-Net asset value $ 15.41 - -
Class P Shares-Net asset value $ 15.42 - -
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
127
<Page>
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
NATIONAL CALIFORNIA
INVESTMENT INCOME:
Interest $ 28,483,404 $ 8,911,131
Dividends 79,280 19,874
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 28,562,684 8,931,005
- ---------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 2,593,332 810,980
12b-1 distribution plan-Class A 1,742,810 597,641
12b-1 distribution plan-Class B 329,918 -
12b-1 distribution plan-Class C 416,781 137,652
Shareholder servicing 308,044 64,409
Professional 65,352 42,497
Reports to shareholders 75,415 11,829
Fund administration 230,518 72,087
Custody 50,394 31,992
Directors' fees 34,281 11,383
Registration 27,456 5,301
Other 18,479 3,059
- ---------------------------------------------------------------------------------------------------------
Gross expenses 5,892,780 1,788,830
Expense reductions (See Note 7) (15,199) (3,418)
Expenses assumed by advisor (See Note 3) (48,640) -
- ---------------------------------------------------------------------------------------------------------
NET EXPENSES 5,828,941 1,785,412
- ---------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 22,733,743 7,145,593
- ---------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments 2,290,948 1,322,239
Net change in unrealized appreciation (depreciation) on investments 28,933 55,949
=========================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) 2,319,881 1,378,188
=========================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 25,053,624 $ 8,523,781
=========================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
128
<Page>
<Table>
<Caption>
CONNECTICUT HAWAII MINNESOTA
INVESTMENT INCOME:
Interest $ 4,451,286 $ 3,537,786 $ 1,909,436
Dividends 9,818 - -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 4,461,104 3,537,786 1,909,436
- ----------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 409,866 323,215 182,114
12b-1 distribution plan-Class A 320,127 244,079 -
12b-1 distribution plan-Class B - - -
12b-1 distribution plan-Class C - - -
Shareholder servicing 38,643 30,022 25,597
Professional 35,766 34,896 33,811
Reports to shareholders 13,142 8,477 7,209
Fund administration 36,432 28,730 16,188
Custody 11,153 11,452 6,732
Directors' fees 5,650 3,942 2,181
Registration 3,517 2,349 1,758
Other 4,413 1,287 1,263
- ----------------------------------------------------------------------------------------------------------------------------
Gross expenses 878,709 688,449 276,853
Expense reductions (See Note 7) (2,579) (7,564) (7,319)
Expenses assumed by advisor (See Note 3) (160,459) - -
- ----------------------------------------------------------------------------------------------------------------------------
NET EXPENSES 715,671 680,885 269,534
- ----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 3,745,433 2,856,901 1,639,902
- ----------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments 66,847 157,963 32,645
Net change in unrealized appreciation (depreciation) on investments (523,627) (836,876) 103,849
============================================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) (456,780) (678,913) 136,494
============================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,288,653 $ 2,177,988 $ 1,776,396
============================================================================================================================
<Caption>
MISSOURI NEW JERSEY NEW YORK
INVESTMENT INCOME:
Interest $ 7,470,872 $ 6,952,059 $ 12,193,973
Dividends - 16,458 23,639
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 7,470,872 6,968,517 12,217,612
- ----------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 717,448 631,825 1,113,906
12b-1 distribution plan-Class A 572,056 489,488 797,133
12b-1 distribution plan-Class B - - -
12b-1 distribution plan-Class C - - 135,537
Shareholder servicing 78,333 66,223 106,855
Professional 39,174 38,494 46,802
Reports to shareholders 12,466 22,238 31,015
Fund administration 63,773 56,162 99,014
Custody 9,567 15,343 52,650
Directors' fees 8,622 7,678 13,373
Registration 5,600 2,981 4,912
Other 3,584 3,245 4,289
- ----------------------------------------------------------------------------------------------------------------------------
Gross expenses 1,510,623 1,333,677 2,405,486
Expense reductions (See Note 7) (11,922) (3,500) (4,834)
Expenses assumed by advisor (See Note 3) (431,469) - (424,538)
- ----------------------------------------------------------------------------------------------------------------------------
NET EXPENSES 1,067,232 1,330,177 1,976,114
- ----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 6,403,640 5,638,340 10,241,498
- ----------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments 539,000 488,086 1,951,497
Net change in unrealized appreciation (depreciation) on investments (263,132) 20,011 (3,675,093)
============================================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) 275,868 508,097 (1,723,596)
============================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 6,679,508 $ 6,146,437 $ 8,517,902
============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
129
<Page>
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE PERIOD ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
TEXAS WASHINGTON
INVESTMENT INCOME:
Interest $ 3,979,858 $ 2,405,055
Dividends 16,527 12,610
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 3,996,385 2,417,665
- ---------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 344,093 217,195
12b-1 distribution plan-Class A 276,717 -
12b-1 distribution plan-Class B - -
12b-1 distribution plan-Class C - -
12b-1 distribution plan-Class P - -
Shareholder servicing 33,614 26,401
Professional 35,382 33,956
Reports to shareholders 8,503 5,440
Fund administration 30,586 19,306
Custody 8,992 5,899
Directors'/Trustees' fees 4,168 2,636
Registration 2,223 1,627
Other 2,004 1,708
- ---------------------------------------------------------------------------------------------------------
Gross expenses 746,282 314,168
Expense reductions (See Note 7) (2,345) (1,999)
Expenses assumed by advisor (See Note 3) (17,517) -
- ---------------------------------------------------------------------------------------------------------
NET EXPENSES 726,420 312,169
- ---------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 3,269,965 2,105,496
- ---------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 3,114 80,130
Net change in unrealized appreciation (depreciation) on investments (737,907) (239,466)
=========================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) (734,793) (159,336)
=========================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,535,172 $ 1,946,160
=========================================================================================================
</Table>
*For the period 12/1/2004 (commencement of investment operations) to 9/30/2005.
SEE NOTES TO FINANCIAL STATEMENTS.
130
<Page>
<Table>
<Caption>
INSURED
INTERMEDIATE FLORIDA GEORGIA
INVESTMENT INCOME:
Interest $ 348,929 $ 3,814,284 $ 4,343,821
Dividends 3,444 16,142 -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 352,373 3,830,426 4,343,821
- ----------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 43,143 347,491 425,450
12b-1 distribution plan-Class A 23,283 267,715 -
12b-1 distribution plan-Class B 5,401 - -
12b-1 distribution plan-Class C 35,856 63,137 -
12b-1 distribution plan-Class P 47 - -
Shareholder servicing 3,562 40,822 52,725
Professional 31,710 38,835 38,249
Reports to shareholders 2,221 9,267 14,699
Fund administration 4,314 30,888 37,818
Custody 3,828 6,817 7,925
Directors'/Trustees' fees 604 4,218 5,071
Registration 20,157 2,646 3,327
Other 5,621 2,482 1,854
- ----------------------------------------------------------------------------------------------------------------------------
Gross expenses 179,747 814,318 587,118
Expense reductions (See Note 7) (2,340) (2,511) (8,224)
Expenses assumed by advisor (See Note 3) (119,478) (187,319) -
- ----------------------------------------------------------------------------------------------------------------------------
NET EXPENSES 57,929 624,488 578,894
- ----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 294,444 3,205,938 3,764,927
- ----------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 2,164 305,623 212,639
Net change in unrealized appreciation (depreciation) on investments (165,184) (896,541) (134,845)
============================================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) (163,020) (590,918) 77,794
============================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 131,424 $ 2,615,020 $ 3,842,721
============================================================================================================================
<Caption>
HIGH YIELD* MICHIGAN PENNSYLVANIA
INVESTMENT INCOME:
Interest $ 6,183,236 $ 3,527,895 $ 4,837,533
Dividends 63,279 - -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 6,246,515 3,527,895 4,837,533
- ----------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 640,840 337,568 441,369
12b-1 distribution plan-Class A 327,998 - 300,049
12b-1 distribution plan-Class B 87 - -
12b-1 distribution plan-Class C 332,652 - -
12b-1 distribution plan-Class P 39 - -
Shareholder servicing 50,720 45,395 61,923
Professional 50,915 35,584 36,780
Reports to shareholders 54,057 10,766 6,854
Fund administration 51,393 30,006 39,233
Custody 17,194 3,764 8,054
Directors'/Trustees' fees 6,905 4,056 5,347
Registration 4,939 3,226 2,697
Other 4,803 2,066 2,544
- ----------------------------------------------------------------------------------------------------------------------------
Gross expenses 1,542,542 472,431 904,850
Expense reductions (See Note 7) (14,910) (4,849) (8,112)
Expenses assumed by advisor (See Note 3) (1,525,410) - (37,454)
- ----------------------------------------------------------------------------------------------------------------------------
NET EXPENSES 2,222 467,582 859,284
- ----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 6,244,293 3,060,313 3,978,249
- ----------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments (737,293) 69,684 78,667
Net change in unrealized appreciation (depreciation) on investments 171,549 (470,326) 226,197
============================================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) (565,744) (400,642) 304,864
============================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,678,549 $ 2,659,671 $ 4,283,113
============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
131
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS NATIONAL CALIFORNIA
OPERATIONS:
Net investment income $ 22,733,743 $ 7,145,593
Net realized gain (loss) on investments 2,290,948 1,322,239
Net change in unrealized appreciation (depreciation) on investments 28,933 55,949
- ---------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 25,053,624 8,523,781
=========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (19,625,604) (6,411,414)
Class B (1,070,508) -
Class C (1,353,655) (441,459)
- ---------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (22,049,767) (6,852,873)
=========================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 51,842,238 17,495,318
Reinvestment of distributions 14,994,262 4,038,026
Cost of shares reacquired (78,189,654) (22,248,071)
- ---------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS (11,353,154) (714,727)
=========================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS (8,349,297) 956,181
=========================================================================================================
NET ASSETS:
Beginning of year 578,190,543 179,223,415
- ---------------------------------------------------------------------------------------------------------
END OF YEAR $ 569,841,246 $ 180,179,596
=========================================================================================================
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME $ (1,327,652) $ (70,560)
=========================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
132
<Page>
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS CONNECTICUT HAWAII MINNESOTA
OPERATIONS:
Net investment income $ 3,745,433 $ 2,856,901 $ 1,639,902
Net realized gain (loss) on investments 66,847 157,963 32,645
Net change in unrealized appreciation (depreciation) on investments (523,627) (836,876) 103,849
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 3,288,653 2,177,988 1,776,396
============================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (3,778,140) (2,890,561) (1,561,827)
Class B - - -
Class C - - -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (3,778,140) (2,890,561) (1,561,827)
============================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 10,013,892 15,258,859 8,422,579
Reinvestment of distributions 2,046,626 1,726,144 1,370,007
Cost of shares reacquired (10,477,934) (7,652,681) (5,312,810)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS 1,582,584 9,332,322 4,479,776
============================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS 1,093,097 8,619,749 4,694,345
============================================================================================================================
NET ASSETS:
Beginning of year 89,984,939 69,597,680 38,487,909
- ----------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 91,078,036 $ 78,217,429 $ 43,182,254
============================================================================================================================
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME $ (298,911) $ (228,848) $ (24,402)
============================================================================================================================
<Caption>
INCREASE (DECREASE) IN NET ASSETS MISSOURI NEW JERSEY NEW YORK
OPERATIONS:
Net investment income $ 6,403,640 $ 5,638,340 $ 10,241,498
Net realized gain (loss) on investments 539,000 488,086 1,951,497
Net change in unrealized appreciation (depreciation) on investments (263,132) 20,011 (3,675,093)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 6,679,508 6,146,437 8,517,902
============================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (6,364,236) (5,542,184) (9,760,245)
Class B - - -
Class C - - (479,301)
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (6,364,236) (5,542,184) (10,239,546)
============================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 16,167,260 10,342,291 15,718,365
Reinvestment of distributions 5,356,878 3,087,893 6,319,031
Cost of shares reacquired (16,121,749) (16,176,894) (25,881,447)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS 5,402,389 (2,746,710) (3,844,051)
============================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS 5,717,661 (2,142,457) (5,565,695)
============================================================================================================================
NET ASSETS:
Beginning of year 155,906,206 139,461,848 249,665,931
- ----------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 161,623,867 $ 137,319,391 $ 244,100,236
============================================================================================================================
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME $ (466,214) $ (367,648) $ (861,779)
============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
133
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE PERIOD ENDED SEPTEMBER 30, 2005
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS TEXAS WASHINGTON
OPERATIONS:
Net investment income $ 3,269,965 $ 2,105,496
Net realized gain (loss) on investments 3,114 80,130
Net change in unrealized appreciation (depreciation) on investments (737,907) (239,466)
- ---------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,535,172 1,946,160
=========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (3,272,796) (2,194,346)
Class B - -
Class C - -
Class P - -
- ---------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (3,272,796) (2,194,346)
=========================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 4,539,764 4,413,729
Reinvestment of distributions 2,472,778 1,669,761
Cost of shares reacquired (5,836,564) (6,960,562)
- ---------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS 1,175,978 (877,072)
=========================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS 438,354 (1,125,258)
=========================================================================================================
NET ASSETS:
Beginning of year 75,586,290 48,834,483
- ---------------------------------------------------------------------------------------------------------
END OF YEAR $ 76,024,644 $ 47,709,225
=========================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME $ (224,065) $ 219,243
=========================================================================================================
</Table>
*For the period 12/1/2004 (commencement of investment operations) to 9/30/2005.
SEE NOTES TO FINANCIAL STATEMENTS.
134
<Page>
<Table>
<Caption>
INSURED
INCREASE (DECREASE) IN NET ASSETS INTERMEDIATE FLORIDA GEORGIA
OPERATIONS:
Net investment income $ 294,444 $ 3,205,938 $ 3,764,927
Net realized gain (loss) on investments 2,164 305,623 212,639
Net change in unrealized appreciation (depreciation) on investments (165,184) (896,541) (134,845)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 131,424 2,615,020 3,842,721
============================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (190,340) (3,022,602) (3,756,535)
Class B (10,816) - -
Class C (76,343) (231,091) -
Class P (276) - -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (277,775) (3,253,693) (3,756,535)
============================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 6,773,004 6,471,601 23,571,680
Reinvestment of distributions 191,241 1,662,964 3,147,985
Cost of shares reacquired (4,294,792) (10,896,560) (12,399,318)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS 2,669,453 (2,761,995) 14,320,347
============================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS 2,523,102 (3,400,668) 14,406,533
============================================================================================================================
NET ASSETS:
Beginning of year 9,978,259 78,919,171 89,480,246
- ----------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 12,501,361 $ 75,518,503 $ 103,886,779
============================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME $ 19,158 $ (246,382) $ 89,562
============================================================================================================================
<Caption>
INCREASE (DECREASE) IN NET ASSETS HIGH YIELD* MICHIGAN PENNSYLVANIA
OPERATIONS:
Net investment income $ 6,244,293 $ 3,060,313 $ 3,978,249
Net realized gain (loss) on investments (737,293) 69,684 78,667
Net change in unrealized appreciation (depreciation) on investments 171,549 (470,326) 226,197
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 5,678,549 2,659,671 4,283,113
============================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (4,944,903) (3,079,723) (4,015,282)
Class B (442) - -
Class C (1,760,470) - -
Class P (447) - -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (6,706,262) (3,079,723) (4,015,282)
============================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 448,982,126 8,951,088 8,199,297
Reinvestment of distributions 3,142,187 2,186,282 2,248,356
Cost of shares reacquired (12,808,632) (8,145,069) (9,600,486)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS 439,315,681 2,992,301 847,167
============================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS 438,287,968 2,572,249 1,114,998
============================================================================================================================
NET ASSETS:
Beginning of year - 73,290,061 95,953,829
- ----------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 438,287,968 $ 75,862,310 $ 97,068,827
============================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME $ (461,975) $ (215,682) $ (291,303)
============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
135
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEAR ENDED SEPTEMBER 30, 2004
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS NATIONAL CALIFORNIA
OPERATIONS:
Net investment income $ 23,733,025 $ 7,299,577
Net realized gain (loss) on investments (2,244,311) 357,488
Net change in unrealized appreciation (depreciation) on investments 1,250,648 768,708
- ---------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 22,739,362 8,425,773
=========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (21,073,022) (6,995,209)
Class B (1,257,674) -
Class C (1,609,329) (504,685)
- ---------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (23,940,025) (7,499,894)
=========================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 47,752,580 15,171,634
Reinvestment of distributions 15,773,645 4,213,091
Cost of shares reacquired (88,424,680) (35,426,256)
- ---------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS (24,898,455) (16,041,531)
=========================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS (26,099,118) (15,115,652)
=========================================================================================================
NET ASSETS:
Beginning of year 604,289,661 194,339,067
- ---------------------------------------------------------------------------------------------------------
END OF YEAR $ 578,190,543 $ 179,223,415
=========================================================================================================
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME $ (1,980,040) $ (356,004)
=========================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
136
<Page>
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS CONNECTICUT HAWAII MINNESOTA
OPERATIONS:
Net investment income $ 3,768,694 $ 2,941,820 $ 1,540,498
Net realized gain (loss) on investments 129,772 84,687 18,867
Net change in unrealized appreciation (depreciation) on investments 453,352 (147,263) 4,593
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 4,351,818 2,879,244 1,563,958
============================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (3,902,944) (2,906,371) (1,527,568)
Class B - - -
Class C - - -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (3,902,944) (2,906,371) (1,527,568)
============================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 4,868,025 3,261,628 6,617,392
Reinvestment of distributions 1,979,132 1,615,420 1,293,734
Cost of shares reacquired (13,780,412) (10,369,174) (6,475,356)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS (6,933,255) (5,492,126) 1,435,770
============================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS (6,484,381) (5,519,253) 1,472,160
============================================================================================================================
NET ASSETS:
Beginning of year 96,469,320 75,116,933 37,015,749
- ----------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 89,984,939 $ 69,597,680 $ 38,487,909
============================================================================================================================
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME $ (291,576) $ (218,057) $ (102,188)
============================================================================================================================
<Caption>
INCREASE (DECREASE) IN NET ASSETS MISSOURI NEW JERSEY
OPERATIONS:
Net investment income $ 5,927,602 $ 6,117,617
Net realized gain (loss) on investments 3,280 (7,949)
Net change in unrealized appreciation (depreciation) on investments (250,775) (590,297)
- ---------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 5,680,107 5,519,371
=========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (6,263,326) (6,146,663)
Class B - -
Class C - -
- ---------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (6,263,326) (6,146,663)
=========================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 17,433,306 9,433,698
Reinvestment of distributions 5,111,920 3,509,645
Cost of shares reacquired (19,543,879) (26,651,225)
- ---------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS 3,001,347 (13,707,882)
=========================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS 2,418,128 (14,335,174)
=========================================================================================================
NET ASSETS:
Beginning of year 153,488,078 153,797,022
- ---------------------------------------------------------------------------------------------------------
END OF YEAR $ 155,906,206 $ 139,461,848
=========================================================================================================
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME $ (509,947) $ (458,689)
=========================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
137
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEAR ENDED SEPTEMBER 30, 2004
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS NEW YORK TEXAS
OPERATIONS:
Net investment income $ 10,759,314 $ 3,344,064
Net realized gain (loss) on investments (345,225) 31,927
Net change in unrealized appreciation (depreciation) on investments 24,685 (666,009)
- ---------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 10,438,774 2,709,982
=========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (10,434,743) (3,377,784)
Class B - -
Class C (476,777) -
Class P - -
- ---------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (10,911,520) (3,377,784)
=========================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 17,285,278 4,368,880
Reinvestment of distributions 6,459,408 2,453,832
Cost of shares reacquired (33,138,106) (9,754,104)
- ---------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS (9,393,420) (2,931,392)
=========================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS (9,866,166) (3,599,194)
=========================================================================================================
NET ASSETS:
Beginning of year 259,532,097 79,185,484
- ---------------------------------------------------------------------------------------------------------
END OF YEAR $ 249,665,931 $ 75,586,290
=========================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME $ (974,204) $ (221,234)
=========================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
138
<Page>
<Table>
<Caption>
INSURED
INCREASE (DECREASE) IN NET ASSETS WASHINGTON INTERMEDIATE FLORIDA
OPERATIONS:
Net investment income $ 2,252,113 $ 177,437 $ 3,448,793
Net realized gain (loss) on investments (321,373) (65,122) 138,092
Net change in unrealized appreciation (depreciation) on investments (45,383) 93,702 (1,428,793)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,885,357 206,017 2,158,092
============================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (2,330,177) (131,284) (3,280,783)
Class B - (6,968) -
Class C - (38,441) (228,100)
Class P - (253) -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (2,330,177) (176,946) (3,508,883)
============================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 5,215,055 7,648,050 11,334,926
Reinvestment of distributions 1,700,051 124,479 1,656,626
Cost of shares reacquired (8,132,368) (2,131,106) (17,513,481)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS (1,217,262) 5,641,423 (4,521,929)
============================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS (1,662,082) 5,670,494 (5,872,720)
============================================================================================================================
NET ASSETS:
Beginning of year 50,496,565 4,307,765 84,791,891
- ----------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 48,834,483 $ 9,978,259 $ 78,919,171
============================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME $ 308,094 $ 2,489 $ (200,992)
============================================================================================================================
<Caption>
INCREASE (DECREASE) IN NET ASSETS GEORGIA MICHIGAN PENNSYLVANIA
OPERATIONS:
Net investment income $ 3,658,412 $ 3,003,520 $ 4,094,678
Net realized gain (loss) on investments (125,302) (111,469) 71,748
Net change in unrealized appreciation (depreciation) on investments 336,193 (317,711) 106,952
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 3,869,303 2,574,340 4,273,378
============================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (3,617,686) (2,991,011) (4,086,719)
Class B - - -
Class C - - -
Class P - - -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (3,617,686) (2,991,011) (4,086,719)
============================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 20,338,939 12,764,741 7,107,514
Reinvestment of distributions 3,005,354 2,051,281 2,149,255
Cost of shares reacquired (19,556,311) (9,398,863) (12,769,221)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS 3,787,982 5,417,159 (3,512,452)
============================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS 4,039,599 5,000,488 (3,325,793)
============================================================================================================================
NET ASSETS:
Beginning of year 85,440,647 68,289,573 99,279,622
- ----------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 89,480,246 $ 73,290,061 $ 95,953,829
============================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME $ 81,301 $ (216,216) $ (331,017)
============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
139
<Page>
FINANCIAL HIGHLIGHTS
NATIONAL TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.49 $ 11.50 $ 11.73 $ 11.33 $ 10.76
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .47 .47 .50 .54 .53
Net realized and unrealized gain (loss) .05 (.01) (.22) .40 .59
------------ ------------ ------------ ------------ ------------
Total from investment operations .52 .46 .28 .94 1.12
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.46) (.47) (.51) (.54) (.55)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 11.55 $ 11.49 $ 11.50 $ 11.73 $ 11.33
============ ============ ============ ============ ============
Total Return(b) 4.53% 4.10% 2.48% 8.57% 10.64%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses assumed .93% .96% .98% 1.03% 1.01%
Expenses, excluding expense
reductions and expenses assumed .94% 1.00% .98% 1.04% 1.06%
Net investment income 4.03% 4.07% 4.33% 4.74% 4.78%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 497,310 $ 500,519 $ 515,694 $ 530,563 $ 512,426
Portfolio turnover rate 129.11% 183.06% 209.07% 63.74% 77.46%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
140
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
NATIONAL TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.52 $ 11.53 $ 11.76 $ 11.36 $ 10.79
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .39 .39 .42 .47 .46
Net realized and unrealized gain (loss) .05 (.01) (.21) .40 .60
------------ ------------ ------------ ------------ ------------
Total from investment operations .44 .38 .21 .87 1.06
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.38) (.39) (.44) (.47) (.49)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 11.58 $ 11.52 $ 11.53 $ 11.76 $ 11.36
============ ============ ============ ============ ============
Total Return(b) 3.83% 3.40% 1.86% 7.88% 9.96%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses assumed 1.58% 1.61% 1.63% 1.65% 1.64%
Expenses, excluding expense
reductions and expenses assumed 1.59% 1.65% 1.63% 1.66% 1.69%
Net investment income 3.38% 3.42% 3.68% 4.12% 4.15%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 31,209 $ 34,263 $ 39,122 $ 36,250 $ 28,531
Portfolio turnover rate 129.11% 183.06% 209.07% 63.74% 77.46%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
141
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
NATIONAL TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.50 $ 11.52 $ 11.76 $ 11.35 $ 10.77
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .39 .39 .42 .47 .46
Net realized and unrealized gain (loss) .06 (.02) (.22) .41 .60
------------ ------------ ------------ ------------ ------------
Total from investment operations .45 .37 .20 .88 1.06
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.38) (.39) (.44) (.47) (.48)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 11.57 $ 11.50 $ 11.52 $ 11.76 $ 11.35
============ ============ ============ ============ ============
Total Return(b) 3.93% 3.32% 1.80% 7.95% 10.04%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses assumed 1.58% 1.61% 1.63% 1.61% 1.68%
Expenses, excluding expense
reductions and expenses assumed 1.59% 1.65% 1.63% 1.62% 1.73%
Net investment income 3.38% 3.42% 3.68% 4.16% 4.11%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 41,322 $ 43,409 $ 49,474 $ 44,727 $ 37,803
Portfolio turnover rate 129.11% 183.06% 209.07% 63.74% 77.46%
</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.
SEE NOTES TO FINANCIAL STATEMENTS.
142
<Page>
FINANCIAL HIGHLIGHTS
CALIFORNIA TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 10.86 $ 10.80 $ 11.19 $ 10.89 $ 10.29
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .44 .43 .46 .52 .51
Net realized and unrealized gain (loss) .08 .07 (.36) .29 .61
------------ ------------ ------------ ------------ ------------
Total from investment operations .52 .50 .10 .81 1.12
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.42) (.44) (.49) (.51) (.52)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 10.96 $ 10.86 $ 10.80 $ 11.19 $ 10.89
============ ============ ============ ============ ============
Total Return(b) 4.88% 4.73% .94% 7.65% 11.09%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions .94% .99% .99% 1.03% 1.00%
Expenses, excluding expense
reductions .94% .99% .99% 1.04% 1.04%
Net investment income 4.01% 3.97% 4.27% 4.82% 4.81%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 166,227 $ 165,270 $ 178,156 $ 192,181 $ 192,624
Portfolio turnover rate 43.42% 28.81% 86.47% 45.31% 72.84%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
143
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
CALIFORNIA TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 10.87 $ 10.80 $ 11.20 $ 10.91 $ 10.30
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .37 .36 .39 .46 .45
Net realized and unrealized gain (loss) .08 .08 (.37) .27 .61
------------ ------------ ------------ ------------ ------------
Total from investment operations .45 .44 .02 .73 1.06
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.35) (.37) (.42) (.44) (.45)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 10.97 $ 10.87 $ 10.80 $ 11.20 $ 10.91
============ ============ ============ ============ ============
Total Return(b) 4.20% 4.14% .26% 6.94% 10.53%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions 1.58% 1.63% 1.63% 1.61% 1.55%
Expenses, excluding expense
reductions 1.58% 1.63% 1.63% 1.62% 1.59%
Net investment income 3.37% 3.32% 3.63% 4.22% 4.26%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 13,953 $ 13,953 $ 16,183 $ 14,290 $ 11,591
Portfolio turnover rate 43.42% 28.81% 86.47% 45.31% 72.84%
</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.
SEE NOTES TO FINANCIAL STATEMENTS.
144
<Page>
FINANCIAL HIGHLIGHTS
CONNECTICUT TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 10.61 $ 10.55 $ 10.71 $ 10.32 $ 9.79
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .44 .43 .46 .50 .49
Net realized and unrealized gain (loss) (.05) .08 (.16) .38 .53
------------ ------------ ------------ ------------ ------------
Total from investment operations .39 .51 .30 .88 1.02
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.44) (.45) (.46) (.49) (.49)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 10.56 $ 10.61 $ 10.55 $ 10.71 $ 10.32
============ ============ ============ ============ ============
Total Return(b) 3.74% 4.92% 2.95% 8.79% 10.65%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses assumed .79% 1.00% 1.01% 1.03% 1.01%
Expenses, excluding expense
reductions and expenses assumed .96% 1.00% 1.01% 1.04% 1.03%
Net investment income 4.11% 4.09% 4.33% 4.82% 4.85%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 91,078 $ 89,985 $ 96,469 $ 100,358 $ 101,242
Portfolio turnover rate 10.25% 20.16% 41.50% 48.64% 21.52%
</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.
SEE NOTES TO FINANCIAL STATEMENTS.
145
<Page>
FINANCIAL HIGHLIGHTS
HAWAII TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.08 $ 5.08 $ 5.20 $ 5.01 $ 4.83
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .20 .21 .21 .23 .22
Net realized and unrealized gain (loss) (.04) -(c) (.12) .20 .20
------------ ------------ ------------ ------------ ------------
Total from investment operations .16 .21 .09 .43 .42
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.20) (.21) (.21) (.24) (.24)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 5.04 $ 5.08 $ 5.08 $ 5.20 $ 5.01
============ ============ ============ ============ ============
Total Return(b) 3.28% 4.18% 1.86% 8.78% 8.88%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions .95% 1.01% .99% 1.05% 1.04%
Expenses, excluding expense
reductions .96% 1.01% 1.00% 1.06% 1.07%
Net investment income 3.98% 4.13% 4.20% 4.60% 4.49%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 78,217 $ 69,598 $ 75,117 $ 79,988 $ 71,022
Portfolio turnover rate 18.80% 6.31% 27.90% 30.99% 32.38%
</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) Amount is less than $0.01.
SEE NOTES TO FINANCIAL STATEMENTS.
146
<Page>
FINANCIAL HIGHLIGHTS
MINNESOTA TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.15 $ 5.14 $ 5.18 $ 5.00 $ 4.76
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .21 .20 .21 .24 .25
Net realized and unrealized gain (loss) .03 .01 (.03) .18 .24
------------ ------------ ------------ ------------ ------------
Total from investment operations .24 .21 .18 .42 .49
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.20) (.20) (.22) (.24) (.25)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 5.19 $ 5.15 $ 5.14 $ 5.18 $ 5.00
============ ============ ============ ============ ============
Total Return(b) 4.74% 4.24% 3.57% 8.56% 10.57%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions .67% .68% .69% .46% .19%
Expenses, excluding expense
reductions .68% .68% .72% .75% .82%
Net investment income 4.05% 4.00% 4.03% 4.79% 5.16%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 43,182 $ 38,488 $ 37,016 $ 27,568 $ 24,708
Portfolio turnover rate 17.42% 24.67% 35.15% 22.33% 24.34%
</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.
SEE NOTES TO FINANCIAL STATEMENTS.
147
<Page>
FINANCIAL HIGHLIGHTS
MISSOURI TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.34 $ 5.36 $ 5.41 $ 5.25 $ 4.96
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .22 .20 .22 .23 .25
Net realized and unrealized gain (loss) -(c) -(c) (.05) .16 .29
------------ ------------ ------------ ------------ ------------
Total from investment operations .22 .20 .17 .39 .54
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.21) (.22) (.22) (.23) (.25)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 5.35 $ 5.34 $ 5.36 $ 5.41 $ 5.25
============ ============ ============ ============ ============
Total Return(b) 4.26% 3.77% 3.18% 7.67% 11.11%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses assumed .67% 1.02% 1.00% 1.03% .89%
Expenses, excluding expense
reductions and expenses assumed .95% 1.01% 1.01% 1.06% 1.08%
Net investment income 4.02% 3.85% 4.19% 4.44% 4.80%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 161,624 $ 155,906 $ 153,488 $ 145,006 $ 130,122
Portfolio turnover rate 29.31% 41.82% 48.47% 80.04% 43.75%
</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) Amount is less than $0.01.
SEE NOTES TO FINANCIAL STATEMENTS.
148
<Page>
FINANCIAL HIGHLIGHTS
NEW JERSEY TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.18 $ 5.20 $ 5.37 $ 5.21 $ 4.96
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .21 .22 .24 .25 .25
Net realized and unrealized gain (loss) .02 (.02) (.17) .15 .26
------------ ------------ ------------ ------------ ------------
Total from investment operations .23 .20 .07 .40 .51
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.21) (.22) (.24) (.24) (.26)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 5.20 $ 5.18 $ 5.20 $ 5.37 $ 5.21
============ ============ ============ ============ ============
Total Return(b) 4.42% 3.89% 1.31% 7.96% 10.41%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions .95% 1.00% 1.00% 1.03% .90%
Expenses, excluding expense
reductions .95% 1.00% 1.00% 1.05% 1.06%
Net investment income 4.02% 4.18% 4.49% 4.77% 4.93%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 137,319 $ 139,462 $ 153,797 $ 164,733 $ 160,171
Portfolio turnover rate 36.15% 32.57% 70.02% 97.76% 101.02%
</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.
SEE NOTES TO FINANCIAL STATEMENTS.
149
<Page>
FINANCIAL HIGHLIGHTS
NEW YORK TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.41 $ 11.42 $ 11.66 $ 11.16 $ 10.53
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .48 .48 .52 .54 .53
Net realized and unrealized gain (loss) (.09) -(c) (.24) .49 .64
------------ ------------ ------------ ------------ ------------
Total from investment operations .39 .48 .28 1.03 1.17
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.48) (.49) (.52) (.53) (.54)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 11.32 $ 11.41 $ 11.42 $ 11.66 $ 11.16
============ ============ ============ ============ ============
Total Return(b) 3.43% 4.33% 2.55% 9.50% 11.35%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses assumed .76% .94% .96% 1.03% 1.01%
Expenses, excluding expense
reductions and expenses assumed .94% .99% .96% 1.04% 1.04%
Net investment income 4.16% 4.27% 4.54% 4.80% 4.80%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 229,598 $ 237,349 $ 247,153 $ 252,831 $ 242,367
Portfolio turnover rate 60.01% 48.17% 47.94% 51.72% 70.03%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
150
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
NEW YORK TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.40 $ 11.42 $ 11.67 $ 11.17 $ 10.54
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .40 .41 .44 .48 .46
Net realized and unrealized gain (loss) (.08) (.01) (.23) .49 .65
------------ ------------ ------------ ------------ ------------
Total from investment operations .32 .40 .21 .97 1.11
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.40) (.42) (.46) (.47) (.48)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 11.32 $ 11.40 $ 11.42 $ 11.67 $ 11.17
============ ============ ============ ============ ============
Total Return(b) 2.87% 3.57% 1.88% 8.90% 10.74%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses assumed 1.41% 1.59% 1.63% 1.51% 1.62%
Expenses, excluding expense
reductions and expenses assumed 1.59% 1.64% 1.63% 1.52% 1.65%
Net investment income 3.51% 3.62% 3.87% 4.32% 4.19%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 14,502 $ 12,317 $ 12,379 $ 8,798 $ 6,662
Portfolio turnover rate 60.01% 48.17% 47.94% 51.72% 70.03%
</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) Amount is less than $0.01.
SEE NOTES TO FINANCIAL STATEMENTS.
151
<Page>
FINANCIAL HIGHLIGHTS
TEXAS TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 10.28 $ 10.36 $ 10.47 $ 9.99 $ 9.43
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .44 .44 .46 .45 .46
Net realized and unrealized gain (loss) (.10) (.07) (.13) .48 .57
------------ ------------ ------------ ------------ ------------
Total from investment operations .34 .37 .33 .93 1.03
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.44) (.45) (.44) (.45) (.47)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 10.18 $ 10.28 $ 10.36 $ 10.47 $ 9.99
============ ============ ============ ============ ============
Total Return(b) 3.35% 3.62% 3.32% 9.55% 11.30%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses assumed .95% 1.06% 1.02% 1.00% .64%
Expenses, excluding expense
reductions and expenses assumed .98% 1.06% 1.02% 1.05% 1.09%
Net investment income 4.28% 4.29% 4.44% 4.49% 4.70%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 76,025 $ 75,586 $ 79,185 $ 81,369 $ 77,860
Portfolio turnover rate 44.71% 21.33% 58.09% 89.30% 108.27%
</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.
SEE NOTES TO FINANCIAL STATEMENTS.
152
<Page>
FINANCIAL HIGHLIGHTS
WASHINGTON TAX-FREE FUND
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.16 $ 5.21 $ 5.32 $ 5.15 $ 4.89
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .23 .23 .24 .26 .26
Net realized and unrealized gain (loss) (.01) (.04) (.10) .17 .26
------------ ------------ ------------ ------------ ------------
Total from investment operations .22 .19 .14 .43 .52
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.24) (.24) (.25) (.26) (.26)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 5.14 $ 5.16 $ 5.21 $ 5.32 $ 5.15
============ ============ ============ ============ ============
Total Return(b) 4.24% 3.75% 2.75% 8.71% 10.92%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions .65% .70% .68% .71% .70%
Expenses, excluding expense reductions .65% .70% .68% .72% .73%
Net investment income 4.36% 4.49% 4.68% 5.14% 5.22%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 47,709 $ 48,834 $ 50,497 $ 49,049 $ 45,883
Portfolio turnover rate 39.36% 49.05% 58.05% 40.20% 52.09%
</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.
SEE NOTES TO FINANCIAL STATEMENTS.
153
<Page>
FINANCIAL HIGHLIGHTS
INSURED INTERMEDIATE TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30 6/23/2003(a)
---------------------------- TO
2005 2004 9/30/2003
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.95 $ 9.94 $ 10.00
============ ============ ==============
Unrealized depreciation on investments (.01)
--------------
NET ASSET VALUE ON SEC EFFECTIVE DATE, JUNE 30, 2003 $ 9.99
==============
Investment operations:
Net investment income(b) .30 .27 .06
Net realized and unrealized gain (loss) (.17) .01 (.05)
------------ ------------ --------------
Total from investment operations .13 .28 .01
------------ ------------ --------------
Distributions to shareholders from
net investment income (.28) (.27) (.06)
------------ ------------ --------------
NET ASSET VALUE, END OF PERIOD $ 9.80 $ 9.95 $ 9.94
============ ============ ==============
Total Return(d) (.10)%(e)(f)
Total Return(d) 1.36% 2.84% .16%(e)(g)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and expenses assumed .25% .25%+ .07%(e)+
Expenses, excluding expense reductions and expenses assumed 1.42% 2.35%+ 2.47%(e)+
Net investment income 3.01% 2.70%+ .66%(e)+
<Caption>
YEAR ENDED 9/30 6/23/2003(a)
---------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 9/30/2003
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 7,941 $ 6,360 $ 3,673
Portfolio turnover rate 42.10% 60.08% 107.99%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
154
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
INSURED INTERMEDIATE TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30 6/23/2003(a)
---------------------------- TO
2005 2004 9/30/2003
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.94 $ 9.93 $ 10.00
============ ============ ==============
Unrealized depreciation on investments (.02)
--------------
NET ASSET VALUE ON SEC EFFECTIVE DATE, JUNE 30, 2003 $ 9.98
==============
Investment operations:
Net investment income(b) .21 .20 .05
Net realized and unrealized gain (loss) (.16) -(c) (.05)
------------ ------------ --------------
Total from investment operations .05 .20 -
------------ ------------ --------------
Distributions to shareholders from
net investment income (.20) (.19) (.05)
------------ ------------ --------------
NET ASSET VALUE, END OF PERIOD $ 9.79 $ 9.94 $ 9.93
============ ============ ==============
Total Return(d) (.20)%(e)(f)
Total Return(d) .55% 2.09% .04%(e)(g)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and expenses assumed 1.00% 1.00%+ .27%(e)+
Expenses, excluding expense reductions and expenses assumed 2.11% 3.00%+ 2.64%(e)+
Net investment income 2.15% 1.95%+ .46%(e)+
<Caption>
YEAR ENDED 9/30 6/23/2003(a)
---------------------------- TO
SUPPLEMENTAL DATA: 2004 2004 9/30/2003
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 775 $ 311 $ 312
Portfolio turnover rate 42.10% 60.08% 107.99%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
155
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
INSURED INTERMEDIATE TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30 6/23/2003(a)
---------------------------- TO
2005 2004 9/30/2003
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.94 $ 9.93 $ 10.00
============ ============ ==============
Unrealized depreciation on investments (.02)
--------------
NET ASSET VALUE ON SEC EFFECTIVE DATE, JUNE 30, 2003 $ 9.98
==============
Investment operations:
Net investment income(b) .23 .20 .05
Net realized and unrealized gain (loss) (.17) -(c) (.05)
------------ ------------ --------------
Total from investment operations .06 .20 -
------------ ------------ --------------
Distributions to shareholders from
net investment income (.21) (.19) (.05)
------------ ------------ --------------
NET ASSET VALUE, END OF PERIOD $ 9.79 $ 9.94 $ 9.93
============ ============ ==============
Total Return(d) (.20)%(e)(f)
Total Return(d) .61% 2.05% (.04)%(e)(g)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and expenses assumed 1.00% 1.00%+ .27%(e)+
Expenses, excluding expense reductions and expenses assumed 2.06% 3.00%+ 2.64%(e)+
Net investment income 2.28% 1.95%+ .46%(e)+
<Caption>
YEAR ENDED 9/30 6/23/2003(a)
---------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 9/30/2003
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 3,775 $ 3,297 $ 313
Portfolio turnover rate 42.10% 60.08% 107.99%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
156
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
INSURED INTERMEDIATE TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30 6/23/2003(a)
---------------------------- TO
2005 2004 9/30/2003
PER SHARE OPERATING PERFORMANCE (CLASS P SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.95 $ 9.94 $ 10.00
============ ============ ==============
Unrealized depreciation on investments (.01)
--------------
NET ASSET VALUE ON SEC EFFECTIVE DATE, JUNE 30, 2003 $ 9.99
==============
Investment operations:
Net investment income(b) .28 .25 .06
Net realized and unrealized gain (loss) (.17) .01 (.05)
------------ ------------ --------------
Total from investment operations .11 .26 .01
------------ ------------ --------------
Distributions to shareholders from
net investment income (.26) (.25) (.06)
------------ ------------ --------------
NET ASSET VALUE, END OF PERIOD $ 9.80 $ 9.95 $ 9.94
============ ============ ==============
Total Return(d) (.10)%(e)(f)
Total Return(d) 1.16% 2.65% .11%(e)(g)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and expenses assumed .45% .45%+ .12%(e)+
Expenses, excluding expense reductions and expenses assumed 1.50% 2.45%+ 2.49%(e)+
Net investment income 2.83% 2.50%+ .61%(e)+
<Caption>
YEAR ENDED 9/30 6/23/2003(a)
---------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 9/30/2003
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 10 $ 10 $ 10
Portfolio turnover rate 42.10% 60.08% 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 was 6/30/2003.
(b) Calculated using average shares outstanding during the period.
(c) Amount is less than $0.01.
(d) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(e) Not annualized.
(f) Total return for the period 6/23/2003 through 6/30/2003.
(g) Total return for the period 6/30/2003 through 9/30/2003.
SEE NOTES TO FINANCIAL STATEMENTS.
157
<Page>
FINANCIAL HIGHLIGHTS
FLORIDA TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 4.82 $ 4.88 $ 4.97 $ 4.82 $ 4.57
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .20 .20 .21 .23 .23
Net realized and unrealized gain (loss) (.03) (.05) (.09) .15 .25
------------ ------------ ------------ ------------ ------------
Total from investment operations .17 .15 .12 .38 .48
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.21) (.21) (.21) (.23) (.23)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 4.78 $ 4.82 $ 4.88 $ 4.97 $ 4.82
============ ============ ============ ============ ============
Total Return(b) 3.48% 3.13% 2.62% 8.10% 10.68%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses assumed .76% 1.02% 1.04% 1.07% .99%
Expenses, excluding expense
reductions and expenses assumed 1.00% 1.02% 1.04% 1.08% 1.05%
Net investment income 4.21% 4.24% 4.33% 4.74% 4.77%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 68,633 $ 72,995 $ 78,278 $ 84,325 $ 83,798
Portfolio turnover rate 52.43% 74.33% 86.95% 82.90% 84.37%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
158
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
FLORIDA TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 4.83 $ 4.89 $ 4.98 $ 4.83 $ 4.58
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .17 .17 .18 .20 .20
Net realized and unrealized gain (loss) (.04) (.05) (.09) .14 .25
------------ ------------ ------------ ------------ ------------
Total from investment operations .13 .12 .09 .34 .45
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.18) (.18) (.18) (.19) (.20)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 4.78 $ 4.83 $ 4.89 $ 4.98 $ 4.83
============ ============ ============ ============ ============
Total Return(b) 2.65% 2.44% 1.97% 7.32% 9.99%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses assumed 1.40% 1.67% 1.71% 1.73% 1.64%
Expenses, excluding expense
reductions and expenses assumed 1.62% 1.67% 1.71% 1.74% 1.70%
Net investment income 3.55% 3.59% 3.66% 4.08% 4.13%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 6,886 $ 5,924 $ 6,514 $ 5,927 $ 5,230
Portfolio turnover rate 52.43% 74.33% 86.95% 82.90% 84.37%
</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.
SEE NOTES TO FINANCIAL STATEMENTS.
159
<Page>
FINANCIAL HIGHLIGHTS
GEORGIA TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.65 $ 5.63 $ 5.70 $ 5.44 $ 5.07
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .23 .23 .24 .23 .26
Net realized and unrealized gain (loss) .01 .02 (.06) .26 .37
------------ ------------ ------------ ------------ ------------
Total from investment operations .24 .25 .18 .49 .63
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income (.23) (.23) (.23) (.23) (.26)
Net realized gain - - (.02) - -
------------ ------------ ------------ ------------ ------------
Total distributions (.23) (.23) (.25) (.23) (.26)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 5.66 $ 5.65 $ 5.63 $ 5.70 $ 5.44
============ ============ ============ ============ ============
Total Return(b) 4.24% 4.54% 3.21% 9.27% 12.69%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions .61% .67% .68% .69% .31%
Expenses, excluding expense
reductions .62% .67% .69% .72% .78%
Net investment income 3.98% 4.14% 4.26% 4.24% 4.81%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 103,887 $ 89,480 $ 85,441 $ 69,836 $ 46,235
Portfolio turnover rate 26.01% 21.27% 34.13% 48.66% 43.50%
</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.
SEE NOTES TO FINANCIAL STATEMENTS.
160
<Page>
FINANCIAL HIGHLIGHTS
HIGH YIELD MUNICIPAL BOND FUND
<Table>
<Caption>
12/1/2004(a)
TO
9/30/2005
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.00
==============
Investment operations:
Net investment income(b) .03
Net realized and unrealized gain .17
--------------
Total from investment operations .20
--------------
Distributions to shareholders from:
Net investment income (.03)
--------------
NET ASSET VALUE ON SEC EFFECTIVE DATE, DECEMBER 30, 2004 $ 15.17
==============
Investment operations:
Net investment income(b) .56
Net realized and unrealized gain .31
--------------
Total from investment operations .87
--------------
Distributions to shareholders from:
Net investment income (.63)
--------------
NET ASSET VALUE, END OF PERIOD $ 15.41
==============
Total Return(c) 1.36%(d)(e)
Total Return(c) 5.79%(d)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and expenses assumed .00%(d)(g)
Expenses, excluding expense reductions and expenses assumed 1.00%(h)
Net investment income 4.80%(h)
<Caption>
12/1/2004(a)
TO
SUPPLEMENTAL DATA: 9/30/2005
- ---------------------------------------------------------------------------------
Net assets, end of period (000) $ 312,948
Portfolio turnover rate 112.47%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
161
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
HIGH YIELD MUNICIPAL BOND FUND
<Table>
<Caption>
12/1/2004(a)
TO
9/30/2005
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.00
==============
Investment operations:
Net investment income(b) .02
Net realized and unrealized gain .17
--------------
Total from investment operations .19
--------------
Distributions to shareholders from:
Net investment income (.02)
--------------
NET ASSET VALUE ON SEC EFFECTIVE DATE, DECEMBER 30, 2004 $ 15.17
==============
Investment operations:
Net investment income(b) .58
Net realized and unrealized gain .29
--------------
Total from investment operations .87
--------------
Distributions to shareholders from:
Net investment income (.63)
--------------
NET ASSET VALUE, END OF PERIOD $ 15.41
==============
Total Return(c) 1.29%(d)(e)
Total Return(c) 5.80%(d)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and expenses assumed .07%(d)
Expenses, excluding expense reductions and expenses assumed 1.71%(h)
Net investment income 4.74%(h)
<Caption>
12/1/2004(a)
TO
SUPPLEMENTAL DATA: 9/30/2005
- ---------------------------------------------------------------------------------
Net assets, end of period (000) $ 10
Portfolio turnover rate 112.47%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
162
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
HIGH YIELD MUNICIPAL BOND FUND
<Table>
<Caption>
12/1/2004(a)
TO
9/30/2005
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.00
==============
Investment operations:
Net investment income(b) .02
Net realized and unrealized gain .17
--------------
Total from investment operations .19
--------------
Distributions to shareholders from:
Net investment income (.02)
--------------
NET ASSET VALUE ON SEC EFFECTIVE DATE, DECEMBER 30, 2004 $ 15.17
==============
Investment operations:
Net investment income(b) .56
Net realized and unrealized gain .31
--------------
Total from investment operations .87
--------------
Distributions to shareholders from:
Net investment income (.63)
--------------
NET ASSET VALUE, END OF PERIOD $ 15.41
==============
Total Return(c) 1.29%(d)(e)
Total Return(c) 5.79%(d)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and expenses assumed .00%(d)(g)
Expenses, excluding expense reductions and expenses assumed 1.64%(h)
Net investment income 4.79%(h)
<Caption>
12/1/2004(a)
TO
SUPPLEMENTAL DATA: 9/30/2005
- ---------------------------------------------------------------------------------
Net assets, end of period (000) $ 125,319
Portfolio turnover rate 112.47%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
163
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
HIGH YIELD MUNICIPAL BOND FUND
<Table>
<Caption>
12/1/2004(a)
TO
9/30/2005
PER SHARE OPERATING PERFORMANCE (CLASS P SHARES)
Net asset value, beginning of period $ 15.00
==============
Investment operations:
Net investment income(b) .03
Net realized and unrealized gain .17
--------------
Total from investment operations .20
--------------
Distributions to shareholders from:
Net investment income (.03)
--------------
NET ASSET VALUE ON SEC EFFECTIVE DATE, DECEMBER 30, 2004 $ 15.17
==============
Investment operations:
Net investment income(b) .58
Net realized and unrealized gain .30
--------------
Total from investment operations .88
--------------
Distributions to shareholders from:
Net investment income (.63)
--------------
NET ASSET VALUE, END OF PERIOD $ 15.42
==============
Total Return(c) 1.34%(d)(e)
Total Return(c) 5.86%(d)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and expenses assumed .03%(d)
Expenses, excluding expense reductions and expenses assumed 1.20%(h)
Net investment income 4.80%(h)
<Caption>
12/1/2004(a)
TO
SUPPLEMENTAL DATA: 9/30/2005
- ---------------------------------------------------------------------------------
Net assets, end of period (000) $ 11
Portfolio turnover rate 112.47%
</Table>
(a) Commencement of investment operations was 12/1/2004; SEC effective date was
12/30/2004; date shares first became available to the public was 1/3/2005.
(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 12/1/2004 through 12/30/2004.
(f) Total return for the period 12/30/2004 through 9/30/2005.
(g) Amount is less than 0.01%.
(h) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
164
<Page>
FINANCIAL HIGHLIGHTS
MICHIGAN TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.32 $ 5.36 $ 5.43 $ 5.20 $ 4.87
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .22 .22 .23 .25 .25
Net realized and unrealized gain (loss) (.03) (.04) (.07) .23 .33
------------ ------------ ------------ ------------ ------------
Total from investment operations .19 .18 .16 .48 .58
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.22) (.22) (.23) (.25) (.25)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 5.29 $ 5.32 $ 5.36 $ 5.43 $ 5.20
============ ============ ============ ============ ============
Total Return(b) 3.60% 3.48% 3.16% 9.57% 12.21%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions .62% .67% .71% .73% .69%
Expenses, excluding expense
reductions .63% .67% .73% .75% .74%
Net investment income 4.08% 4.19% 4.28% 4.77% 4.91%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 75,862 $ 73,290 $ 68,290 $ 58,632 $ 49,330
Portfolio turnover rate 39.37% 34.92% 59.46% 48.09% 100.27%
</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.
SEE NOTES TO FINANCIAL STATEMENTS.
165
<Page>
FINANCIAL HIGHLIGHTS
PENNSYLVANIA TAX-FREE TRUST
<Table>
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF YEAR $ 5.28 $ 5.27 $ 5.37 $ 5.18 $ 4.90
============ ============ ============ ============ ============
Investment operations:
Net investment income(a) .22 .22 .23 .24 .25
Net realized and unrealized gain (loss) .02 .01 (.10) .19 .28
------------ ------------ ------------ ------------ ------------
Total from investment operations .24 .23 .13 .43 .53
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from
net investment income (.22) (.22) (.23) (.24) (.25)
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF YEAR $ 5.30 $ 5.28 $ 5.27 $ 5.37 $ 5.18
============ ============ ============ ============ ============
Total Return(b) 4.57% 4.48% 2.52% 8.57% 11.06%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses assumed .88% .97% .94% 1.08% .90%
Expenses, excluding expense
reductions and expenses assumed .92% .97% .95% 1.10% 1.06%
Net investment income 4.06% 4.20% 4.37% 4.66% 4.88%
<Caption>
YEAR ENDED 9/30
----------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 97,069 $ 95,954 $ 99,280 $ 101,502 $ 94,550
Portfolio turnover rate 21.18% 27.80% 29.76% 60.87% 65.63%
</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.
SEE NOTES TO FINANCIAL STATEMENTS.
166
<Page>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Lord Abbett Municipal Income Fund, Inc. (the "Company") and Lord Abbett
Municipal 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 Company was
formerly known as Lord Abbett Tax-Free Income Fund, Inc. and changed its name
effective January 28, 2005. 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 Trust was formerly known as Lord Abbett Tax-Free Income Trust
and changed its name effective December 30, 2004.
The Company consists of the following ten portfolios and their respective
classes (separately, a "Fund" and collectively, the "Funds"):
<Table>
<Caption>
FUNDS CLASSES OFFERED
- --------------------------------------------------------------------------------
Lord Abbett National Tax-Free Income Fund ("National") A,B,C and P
Lord Abbett California Tax-Free Income Fund ("California") A,C, and P
Lord Abbett New York Tax-Free Income Fund ("New York") A,C and P
Lord Abbett Connecticut Tax-Free Income Fund ("Connecticut") A and P
Lord Abbett Hawaii Tax-Free Income Fund ("Hawaii") A and P
Lord Abbett Minnesota Tax-Free Income Fund ("Minnesota") A and P
Lord Abbett Missouri Tax-Free Income Fund ("Missouri") A and P
Lord Abbett New Jersey Tax-Free Income Fund ("New Jersey") A and P
Lord Abbett Texas Tax-Free Income Fund ("Texas") A and P
Lord Abbett Washington Tax-Free Income Fund ("Washington") A and P
</Table>
The Trust consists of the following six portfolios and their respective classes
(separately, a "Fund" and collectively, the "Funds"):
<Table>
<Caption>
FUNDS CLASSES OFFERED
- --------------------------------------------------------------------------------
Lord Abbett Insured Intermediate Tax-Free Fund ("Insured") A,B,C and P
Lord Abbett High Yield Municipal Bond Fund ("High Yield") A,B,C and P
Florida Series ("Florida") A,C and P
Georgia Series ("Georgia") A and P
Michigan Series ("Michigan") A and P
Pennsylvania Series ("Pennsylvania") A and P
</Table>
High Yield commenced investment operations on December 1, 2004. The SEC
effective date was December 30, 2004 and shares first became available to the
public on January 3, 2005. Each Fund is non-diversified as defined under the
Act, except for National and Insured. As of the date of this report, only
Insured and High Yield have issued Class P shares.
The investment objective of each Fund (except for High Yield) 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, Insured and
High Yield) also seeks as high a level of interest income exempt from the
personal income tax of its state as is consistent with reasonable risk. The
investment objective of High Yield is to seek a high level of income exempt from
Federal income tax. 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 Net Asset Value ("NAV") for Class A shares. There is no
front-end sales charge in the case of the Classes B, C and P shares, although
there may be a contingent deferred sales charge ("CDSC")
167
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
as follows: certain redemptions of Class A shares made within 24 months (12
months if shares were purchased on or after November 1, 2004) 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 Board of Directors/Trustees. Such prices
reflect broker/dealer supplied 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 generally 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. Classes A, B, C and P shares bear all expenses and
fees relating to their respective 12b-1 Distribution Plans.
(f) 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.
(g) OFFERING COSTS-Lord, Abbett & Co. LLC ("Lord Abbett") incurred initial
offering costs on behalf of High Yield.
168
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 the following annual rates, for all Funds,
other than Insured and High Yield:
<Table>
First $1 Billion .45%
Next $1 Billion .40%
Over $2 Billion .35%
</Table>
The management fee for Insured is based on average daily net assets at the
following annual rates:
<Table>
First $2 Billion .40%
Next $3 Billion .375%
Over $5 Billion .35%
</Table>
The management fee for High Yield is based on average daily net assets at the
following annual rates:
<Table>
First $1 Billion .50%
Next $1 Billion .45%
Over $2 Billion .40%
</Table>
For the fiscal year ended September 30, 2005, Lord Abbett contractually agreed
to reimburse expenses for each fund, other than Insured and High Yield, to the
extent necessary so that each class' total annual net operating expenses did not
exceed the following annual rates:
<Table>
<Caption>
CLASS % OF AVERAGE DAILY NET ASSETS
- -------------------------------------------------------
A 0.95%
B 1.60%
C 1.60%
P 1.05%
</Table>
For the fiscal year ended September 30, 2005, Lord Abbett voluntarily reimbursed
an additional $149,604, $150,000, $431,469, $424,538, and $35,000 of expenses
for Connecticut, Florida, Missouri, New York, and Pennsylvania, respectively.
For the fiscal year ended September 30, 2005, Lord Abbett contractually agreed
to reimburse expenses for Insured and High Yield to the extent necessary so that
each class' net operating expenses did not exceed the following annual rates:
<Table>
<Caption>
CLASS % OF AVERAGE DAILY NET ASSETS
- -------------------------------------------------------
A 0.25%
B 1.00%
C 1.00%
P 0.45%
</Table>
169
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Effective January 26, 2005, Lord Abbett is voluntarily reimbursing all expenses
for High Yield. Lord Abbett may stop reimbursing such expenses at any time.
Lord Abbett provides 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.
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% .20%
Distribution .10%(3) .75% .75% .25%
</Table>
(1) The Class A Plans of Minnesota, Washington and Michigan will not go into
effect until the quarter subsequent to the net assets of each of these Funds
reaching $100 million. During the quarter ended September 30, 2005, the net
assets of Georgia reached $100 million. As a result, on October 1, 2005,
the Fund's Class A Plan became effective.
(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) Until October 1, 2004, the Funds (except High Yield) paid a one-time
distribution fee of up to 1.00% on certain qualifying purchases of Class A
shares. Effective October 1, 2004, the Distributor commenced payment of such
one-time distribution fee. The Funds will continue to amortize the prepaid
distribution fee balance outstanding at September 30, 2004, which is
generally amortized over a two-year period. The unamortized prepaid
distribution fees balances, as of September 30, 2005, are $448 for Hawaii
and $18,346 for Florida. No other Funds have any unamortized prepaid
distribution fees.
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, 2005:
<Table>
<Caption>
DISTRIBUTOR DEALERS'
COMMISSIONS CONCESSIONS
- --------------------------------------------------------------------------------
National $ 107,276 $ 483,529
California 29,604 138,576
Connecticut 28,584 134,711
Hawaii 47,701 236,375
Minnesota 30,351 143,128
Missouri 67,349 318,251
New Jersey 18,537 86,076
New York 23,378 112,503
Texas 9,949 46,470
Washington 16,577 77,905
Insured 9,093 43,332
Florida 11,365 55,313
Georgia 101,983 459,446
High Yield 731,133 3,446,893
Michigan 36,050 169,027
Pennsylvania 35,374 151,192
</Table>
One Director/Trustee and certain of the Company's and Trust's officers have an
interest in Lord Abbett.
170
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, if any, 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 earnings and profits for tax purposes are reported as
a tax return of capital.
The tax character of the distributions paid during the fiscal years ended
September 30, 2005 and 2004 are as follows:
<Table>
<Caption>
NATIONAL CALIFORNIA
- ------------------------------------------------------------------------------------------
9/30/2005 9/30/2004 9/30/2005 9/30/2004
- ------------------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income $ 22,049,767 $ 23,940,025 $ 6,852,873 $ 7,499,894
- ------------------------------------------------------------------------------------------
Total distributions paid $ 22,049,767 $ 23,940,025 $ 6,852,873 $ 7,499,894
==========================================================================================
<Caption>
CONNECTICUT HAWAII
- ------------------------------------------------------------------------------------------
9/30/2005 9/30/2004 9/30/2005 9/30/2004
- ------------------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income $ 3,778,140 $ 3,902,944 $ 2,890,561 $ 2,906,371
- ------------------------------------------------------------------------------------------
Total distributions paid $ 3,778,140 $ 3,902,944 $ 2,890,561 $ 2,906,371
==========================================================================================
<Caption>
MINNESOTA MISSOURI
- ------------------------------------------------------------------------------------------
9/30/2005 9/30/2004 9/30/2005 9/30/2004
- ------------------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income $ 1,561,827 $ 1,527,568 $ 6,364,236 $ 6,263,326
- ------------------------------------------------------------------------------------------
Total distributions paid $ 1,561,827 $ 1,527,568 $ 6,364,236 $ 6,263,326
==========================================================================================
<Caption>
NEW JERSEY NEW YORK
- ------------------------------------------------------------------------------------------
9/30/2005 9/30/2004 9/30/2005 9/30/2004
- ------------------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income $ 5,542,184 $ 6,146,663 $ 10,239,546 $ 10,911,520
- ------------------------------------------------------------------------------------------
Total distributions paid $ 5,542,184 $ 6,146,663 $ 10,239,546 $ 10,911,520
==========================================================================================
<Caption>
TEXAS WASHINGTON
- ------------------------------------------------------------------------------------------
9/30/2005 9/30/2004 9/30/2005 9/30/2004
- ------------------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income $ 3,272,796 $ 3,377,784 $ 2,194,346 $ 2,330,177
- ------------------------------------------------------------------------------------------
Total distributions paid $ 3,272,796 $ 3,377,784 $ 2,194,346 $ 2,330,177
==========================================================================================
</Table>
171
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
INSURED FLORIDA
- ------------------------------------------------------------------------------------------
9/30/2005 9/30/2004 9/30/2005 9/30/2004
- ------------------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income $ 277,775 $ 176,946 $ 3,253,693 $ 3,508,883
- ------------------------------------------------------------------------------------------
Total distributions paid $ 277,775 $ 176,946 $ 3,253,693 $ 3,508,883
==========================================================================================
<Caption>
GEORGIA HIGH YIELD
- ------------------------------------------------------------------------------------------
9/30/2005 9/30/2004 9/30/2005* 9/30/2004
- ------------------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income $ 3,756,535 $ 3,617,686 $ 6,706,262 -
- ------------------------------------------------------------------------------------------
Total distributions paid $ 3,756,535 $ 3,617,686 $ 6,706,262 -
==========================================================================================
<Caption>
MICHIGAN PENNSYLVANIA
- ------------------------------------------------------------------------------------------
9/30/2005 9/30/2004 9/30/2005 9/30/2004
- ------------------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income $ 3,079,723 $ 2,991,011 $ 4,015,282 $ 4,086,719
- ------------------------------------------------------------------------------------------
Total distributions paid $ 3,079,723 $ 2,991,011 $ 4,015,282 $ 4,086,719
==========================================================================================
</Table>
* For the period December 1, 2004 (commencement of investment operations) to
September 30, 2005.
As of September 30, 2005, the components of accumulated earnings (losses) on a
tax-basis are as follows:
<Table>
<Caption>
NATIONAL CALIFORNIA
- ------------------------------------------------------------------------------------------
Undistributed tax-exempt income - net $ - $ 98,290
- ------------------------------------------------------------------------------------------
Total undistributed earnings $ - $ 98,290
==========================================================================================
Capital loss carryforwards* $(15,676,840) $ (2,765,897)
Temporary differences (1,488,410) (181,417)
Unrealized gains - net 33,367,864 9,415,325
- ------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 16,202,614 $ 6,566,301
==========================================================================================
<Caption>
CONNECTICUT HAWAII
- ------------------------------------------------------------------------------------------
Capital loss carryforwards* $ (1,586,023) $ (2,323,336)
Temporary differences (311,807) (247,473)
Unrealized gains - net 5,220,163 4,186,097
- ------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 3,322,333 $ 1,615,288
==========================================================================================
<Caption>
MINNESOTA MISSOURI
- ------------------------------------------------------------------------------------------
Undistributed ordinary income - net $ - $ 14,346
Undistributed long-term capital gains - 209,059
- ------------------------------------------------------------------------------------------
Total undistributed earnings $ - $ 223,405
==========================================================================================
Capital loss carryforwards* $ (644,003) -
Temporary differences (36,098) $ (502,127)
Unrealized gains - net 1,700,377 7,353,797
- ------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 1,020,276 $ 7,075,075
==========================================================================================
<Caption>
NEW JERSEY NEW YORK
- ------------------------------------------------------------------------------------------
Capital loss carryforwards* $ (5,124,120) $ (672,135)
Temporary differences (414,533) (883,678)
Unrealized gains - net 8,811,014 14,043,836
- ------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 3,272,361 $ 12,488,023
==========================================================================================
</Table>
172
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
TEXAS WASHINGTON
- ------------------------------------------------------------------------------------------
Undistributed tax-exempt income - net $ - $ 215,107
- ------------------------------------------------------------------------------------------
Total undistributed earnings $ - $ 215,107
==========================================================================================
Capital loss carryforwards* $ (3,830,254) $ (2,435,937)
Temporary differences (264,347) (18,302)
Unrealized gains - net 6,474,976 3,202,261
- ------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 2,380,375 $ 963,129
==========================================================================================
<Caption>
INSURED FLORIDA
- ------------------------------------------------------------------------------------------
Undistributed tax-exempt income - net $ 23,579 $ -
- ------------------------------------------------------------------------------------------
Total undistributed earnings $ 23,579 $ -
==========================================================================================
Capital loss carryforwards* $ (137,966) $ (6,122,598)
Temporary differences (4,421) (267,527)
Unrealized gains - net 14,477 5,126,468
- ------------------------------------------------------------------------------------------
Total accumulated earnings (loss) - net $ (104,331) $ (1,263,657)
==========================================================================================
<Caption>
GEORGIA HIGH YIELD
- ------------------------------------------------------------------------------------------
Undistributed tax-exempt income - net $ 91,338 $ -
- ------------------------------------------------------------------------------------------
Total undistributed earnings $ 91,338 $ -
==========================================================================================
Capital loss carryforwards* $ (62,979) $ -
Temporary differences (5,251) (1,210,321)
Unrealized gains - net 4,088,063 182,608
- ------------------------------------------------------------------------------------------
Total accumulated earnings (loss) - net $ 4,111,171 $ (1,027,713)
==========================================================================================
<Caption>
MICHIGAN PENNSYLVANIA
- ------------------------------------------------------------------------------------------
Capital loss carryforwards* $ (1,947,856) $ (911,217)
Temporary differences (238,905) (311,940)
Unrealized gains - net 4,268,256 6,487,487
- ------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 2,081,495 $ 5,264,330
==========================================================================================
</Table>
* As of September 30, 2005, the capital loss carryforwards, along with the
related expiration dates, are as follows:
<Table>
<Caption>
2007 2008 2009 2011 2012 2013 TOTAL
- ---------------------------------------------------------------------------------------------------------------------
National $ - $ 11,236,555 $ 385,136 $ 255,373 $ 3,799,776 $ - $ 15,676,840
California - 1,953,250 - 34,990 777,657 - 2,765,897
Connecticut - 610,291 518,107 - 457,625 - 1,586,023
Hawaii - 461,655 268,000 - 1,593,681 - 2,323,336
Minnesota - - 535,589 - 108,414 - 644,003
New Jersey - 3,141,664 - 405,467 1,576,989 - 5,124,120
New York - - 505,114 25,993 141,028 - 672,135
Texas - 2,722,282 579,267 - 528,705 - 3,830,254
Washington - 947,474 710,842 42,693 496,718 238,210 2,435,937
Insured - - - - 74,668 63,298 137,966
Florida 3,752,714 1,479,660 - 763,887 126,337 - 6,122,598
Georgia - - - - 62,979 - 62,979
Michigan 998,605 711,637 - - 204,581 33,033 1,947,856
Pennsylvania - 683,645 - 1,955 225,617 - 911,217
</Table>
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 2005 as follows:
<Table>
<Caption>
POST-OCTOBER
LOSSES
- ---------------------------------------
Texas $ 24,081
High Yield 737,287
</Table>
173
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As of September 30, 2005, the aggregate unrealized security 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 $ 547,989,080 $ 33,678,208 $ (310,344) $ 33,367,864
California 173,398,220 9,503,648 (88,323) 9,415,325
Connecticut 86,618,528 5,324,871 (104,708) 5,220,163
Hawaii 70,631,381 4,285,275 (99,178) 4,186,097
Minnesota 40,884,530 1,717,382 (17,005) 1,700,377
Missouri 152,412,442 7,477,288 (123,491) 7,353,797
New Jersey 129,752,509 8,912,092 (101,078) 8,811,014
New York 225,112,119 14,394,218 (350,382) 14,043,836
Texas 68,936,239 6,505,996 (31,020) 6,474,976
Washington 45,525,046 3,244,310 (42,049) 3,202,261
Insured 12,028,901 66,711 (52,234) 14,477
Florida 69,137,288 5,226,078 (99,610) 5,126,468
Georgia 96,782,662 4,321,830 (233,767) 4,088,063
High Yield 433,748,762 3,570,521 (3,387,913) 182,608
Michigan 69,813,404 4,321,246 (52,990) 4,268,256
Pennsylvania 91,095,885 6,589,225 (101,738) 6,487,487
</Table>
The difference between book-basis and tax-basis unrealized gains (losses) is
primarily attributable to wash sales and the tax treatment of certain
securities.
Permanent items identified during the year ended September 30, 2005 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 PAID-IN
INCOME) LOSS CAPITAL
- --------------------------------------------------------------------------------
National $ (31,588) $ 31,588 $ -
California (7,276) 7,276 -
Connecticut 25,372 481 (25,853)
Hawaii 22,869 2,465 (25,334)
Minnesota (289) 289 -
Missouri 4,329 3,006 (7,335)
New Jersey (5,115) 5,115 -
New York 110,473 729 (111,202)
Washington (1) 1 -
Florida 2,365 421 (2,786)
Georgia (131) 131 -
High Yield (6) 6 -
Michigan 19,944 2 (19,946)
Pennsylvania 76,747 6 (76,753)
</Table>
The permanent differences are primarily attributable to the tax treatment of
accretion and the tax treatment of certain distributions.
174
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
are as follows:
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30, 2005
- ----------------------------------------------------------------
PURCHASES SALES
- ----------------------------------------------------------------
National $ 745,240,992 $ 746,512,305
California 77,244,605 77,495,637
Connecticut 13,233,318 9,204,468
Hawaii 20,900,876 13,329,065
Minnesota 11,500,161 6,943,848
Missouri 57,062,138 45,889,259
New Jersey 50,144,894 49,991,248
New York 147,515,144 156,338,111
Texas 35,990,481 34,089,823
Washington 18,645,456 19,182,800
Insured 7,037,706 4,457,526
Florida 39,904,084 42,803,182
Georgia 36,960,773 24,179,749
High Yield 627,911,037 193,012,102
Michigan 31,945,387 28,735,220
Pennsylvania 23,598,224 20,523,014
</Table>
There were no purchases or sales of U.S. Government securities for the fiscal
year ended September 30, 2005.
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 had
been invested proportionately in the funds. 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 U.S. Federal income tax purposes
until such amounts are paid.
7. EXPENSE REDUCTIONS
The Company and Trust have entered into agreements with their transfer agent and
custodian whereby credits realized as a result of uninvested cash balances are
used to reduce a portion of each Fund's expenses.
8. LINE OF CREDIT
High Yield, along with certain other funds managed by Lord Abbett, has available
a $200,000,000 unsecured revolving credit facility ("Facility") from a
consortium of banks, to be used for temporary or emergency purposes as an
additional source of liquidity to fund redemptions of
175
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
investor shares. Any borrowings under this Facility will bear interest at
current market rates as defined in the agreement. The fee for this Facility is
at an annual rate of .08%. At September 30, 2005, there were no loans
outstanding pursuant to this Facility nor was the Facility utilized at any time
during the fiscal year ended September 30, 2005.
9. CUSTODIAN AND ACCOUNTING AGENT
State Street Bank & Trust Company ("SSB") is the Funds' custodian and accounting
agent. SSB performs custodial, accounting and recordkeeping functions, relating
to portfolio transactions and calculating each Fund's NAV.
10. 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 and particularly for inverse floaters than for short-term bonds.
As a result, the Funds, which tend to invest in longer-term bonds and inverse
floaters to a greater degree than some municipal bond funds, normally will have
greater market risk than those 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.
There is the risk that an issuer of a municipal bond may fail to make timely
payments of principal or interest to a Fund, a risk that is greater with
municipal bonds rated below investment grade (sometimes called "lower rated
bonds" or "junk bonds.") High Yield invests a significant portion of its assets
in such bonds. Some issuers, particularly of junk bonds, may default as to
principal and/or interest payments after a Fund purchases their securities. A
default, or concerns in the market about an increase in risk of default or the
deterioration in the creditworthiness of an issuer, may result in losses to the
Fund. Junk bonds are considered predominantly speculative by traditional
investment standards. In addition, the market for lower rated municipal bonds
generally is less liquid than the market for higher rated bonds, subjecting them
to greater price fluctuations which could result in losses.
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, Insured and High Yield, focuses on a
particular state or territory, each Fund's performance may be more affected by
local, state and regional factors than a fund that invests in municipal bonds
issued in many states, such as National, Insured and High Yield. These factors
may, for example, include economic or political 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 or significant world
events 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.
Each Fund may invest up to 20% of its net assets in private activity bonds
(sometimes called "AMT paper") except High Yield which may invest up to 100% in
AMT paper. The credit quality of such bonds usually is directly related to the
credit standing of the private user of the facilities.
176
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Each Fund may invest in residual interest bonds ("RIBs") although each Fund
other than High Yield may invest no more than 20% of its assets in such bonds. A
RIB, sometimes referred to as an inverse floater, is a type of "derivative" debt
instrument with a floating or variable interest rate that moves in the opposite
direction of the interest rate on another specific fixed-rate security
("specific fixed-rate security"). Changes in the interest rate on the specific
fixed-rate security inversely affect the residual interest paid on the RIB, with
the result that when interest rates rise, RIBs' interest payments are lowered
and their value falls faster than securities similar to the specific fixed-rate
security. When interest rates fall, not only do RIBs provide interest payments
that are higher than securities similar to the specific fixed-rate security, but
their values also rise faster than such similar securities.
In addition, loss may result from a Fund's investments in certain derivative
transactions such as inverse floaters. These instruments may be leveraged so
that small changes may produce disproportionate and substantial losses to the
Fund. They also may increase a Fund's interest rate risk.
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.
11. SUMMARY OF CAPITAL TRANSACTIONS
Transactions in shares of capital stock or shares of beneficial interest are as
follows:
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30, 2005
-------------------------------------------------------------------
CONNECTICUT HAWAII MINNESOTA MISSOURI NEW JERSEY
- -------------------------------------------------------------------------------------------------------------
Shares sold 942,888 3,005,809 1,617,199 3,011,985 1,987,138
Reinvestment of distributions 192,640 339,910 263,779 999,869 592,791
Shares reacquired (986,441) (1,507,010) (1,022,538) (3,004,221) (3,100,677)
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) 149,087 1,838,709 858,440 1,007,633 (520,748)
- -------------------------------------------------------------------------------------------------------------
<Caption>
YEAR ENDED SEPTEMBER 30, 2005
-------------------------------------------------------------------
TEXAS WASHINGTON GEORGIA MICHIGAN PENNSYLVANIA
- -------------------------------------------------------------------------------------------------------------
Shares sold 441,641 851,879 4,142,897 1,679,661 1,541,500
Reinvestment of distributions 240,825 322,452 554,608 410,376 423,203
Shares reacquired (568,912) (1,347,358) (2,184,770) (1,529,104) (1,807,266)
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) 113,554 (173,027) 2,512,735 560,933 157,437
- -------------------------------------------------------------------------------------------------------------
<Caption>
YEAR ENDED SEPTEMBER 30, 2004
-------------------------------------------------------------------
CONNECTICUT HAWAII MINNESOTA MISSOURI NEW JERSEY
- -------------------------------------------------------------------------------------------------------------
Shares sold 461,995 644,322 1,287,335 3,267,692 1,822,812
Reinvestment of distributions 188,655 319,980 253,164 962,770 680,491
Shares reacquired (1,318,024) (2,050,585) (1,270,189) (3,669,594) (5,141,542)
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) (667,374) (1,086,283) 270,310 560,868 (2,638,239)
- -------------------------------------------------------------------------------------------------------------
<Caption>
YEAR ENDED SEPTEMBER 30, 2004
-------------------------------------------------------------------
TEXAS WASHINGTON GEORGIA MICHIGAN PENNSYLVANIA
- -------------------------------------------------------------------------------------------------------------
Shares sold 423,921 1,007,594 3,616,190 2,395,641 1,352,917
Reinvestment of distributions 239,032 330,135 538,249 386,785 410,056
Shares reacquired (953,874) (1,580,673) (3,504,732) (1,761,186) (2,435,492)
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) (290,921) (242,944) 649,707 1,021,240 (672,519)
- -------------------------------------------------------------------------------------------------------------
</Table>
177
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Transactions (both shares and dollars) in Funds with multiple classes are as
follows:
<Table>
<Caption>
YEAR ENDED YEAR ENDED
NATIONAL SEPEMBER 30, 2005 SEPTEMBER 30, 2004
- -------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
Shares sold 3,618,865 $ 41,899,432 3,541,591 $ 40,681,581
Reinvestment of distributions 1,182,800 13,685,145 1,250,563 14,283,407
Shares reacquired (5,302,289) (61,390,981) (6,057,488) (69,157,006)
- -------------------------------------------------------------------------------------------------------------
Decrease (500,624) $ (5,806,404) (1,265,334) $ (14,192,018)
- -------------------------------------------------------------------------------------------------------------
CLASS B SHARES
- -------------------------------------------------------------------------------------------------------------
Shares sold 384,421 $ 4,462,574 244,614 $ 2,815,682
Reinvestment of distributions 49,453 573,512 54,551 624,686
Shares reacquired (713,322) (8,274,368) (718,023) (8,215,944)
- -------------------------------------------------------------------------------------------------------------
Decrease (279,448) $ (3,238,282) (418,858) $ (4,775,576)
- -------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- -------------------------------------------------------------------------------------------------------------
Shares sold 471,773 $ 5,480,232 369,180 $ 4,255,317
Reinvestment of distributions 63,502 735,605 75,657 865,552
Shares reacquired (736,018) (8,524,305) (966,679) (11,051,730)
- -------------------------------------------------------------------------------------------------------------
Decrease (200,743) $ (2,308,468) (521,842) $ (5,930,861)
- -------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED YEAR ENDED
CALIFORNIA SEPTEMBER 30, 2005 SEPTEMBER 30, 2004
- -------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
Shares sold 1,400,162 $ 15,358,552 1,227,944 $ 13,306,351
Reinvestment of distributions 353,603 3,872,266 373,383 4,018,098
Shares reacquired (1,808,892) (19,818,278) (2,887,725) (31,067,978)
- -------------------------------------------------------------------------------------------------------------
Decrease (55,127) $ (587,460) (1,286,398) $ (13,743,529)
- -------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- -------------------------------------------------------------------------------------------------------------
Shares sold 194,458 $ 2,136,766 172,641 $ 1,865,283
Reinvestment of distributions 15,129 165,760 18,107 194,993
Shares reacquired (221,629) (2,429,793) (405,207) (4,358,278)
- -------------------------------------------------------------------------------------------------------------
Decrease (12,042) $ (127,267) (214,459) $ (2,298,002)
- -------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED YEAR ENDED
NEW YORK SEPTEMBER 30, 2005 SEPTEMBER 30, 2004
- -------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
Shares sold 1,027,449 $ 11,714,924 1,231,417 $ 13,986,025
Reinvestment of distributions 533,770 6,083,437 553,520 6,264,285
Shares reacquired (2,098,029) (23,928,159) (2,618,184) (29,632,409)
- -------------------------------------------------------------------------------------------------------------
Decrease (536,810) $ (6,129,798) (833,247) $ (9,382,099)
- -------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- -------------------------------------------------------------------------------------------------------------
Shares sold 351,373 $ 4,003,441 290,075 $ 3,299,253
Reinvestment of distributions 20,674 235,594 17,248 195,123
Shares reacquired (171,253) (1,953,288) (311,522) (3,505,697)
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) 200,794 $ 2,285,747 (4,199) $ (11,321)
- -------------------------------------------------------------------------------------------------------------
</Table>
178
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED YEAR ENDED
INSURED SEPTEMBER 30, 2005 SEPTEMBER 30, 2004
- -------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
Shares sold 493,199 $ 4,864,004 392,666 $ 3,876,261
Reinvestment of distributions 16,319 161,254 12,009 118,627
Shares reacquired (338,719) (3,356,769) (135,018) (1,353,364)
- -------------------------------------------------------------------------------------------------------------
Increase 170,799 $ 1,668,489 269,657 $ 2,641,524
- -------------------------------------------------------------------------------------------------------------
CLASS B SHARES
- -------------------------------------------------------------------------------------------------------------
Shares sold 70,689 $ 696,503 37,806 $ 372,998
Reinvestment of distributions 597 5,890 151 1,486
Shares reacquired (23,434) (231,254) (38,056) (368,409)
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) 47,852 $ 471,139 (99) $ 6,075
- -------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- -------------------------------------------------------------------------------------------------------------
Shares sold 123,369 $ 1,212,497 341,011 $ 3,398,791
Reinvestment of distributions 2,417 23,819 418 4,115
Shares reacquired (71,966) (706,769) (41,244) (409,333)
- -------------------------------------------------------------------------------------------------------------
Increase 53,820 $ 529,547 300,185 $ 2,993,573
- -------------------------------------------------------------------------------------------------------------
CLASS P SHARES
- -------------------------------------------------------------------------------------------------------------
Reinvestment of distributions 28 $ 278 26 $ 251
- -------------------------------------------------------------------------------------------------------------
Increase 28 $ 278 26 $ 251
- -------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED YEAR ENDED
FLORIDA SEPTEMBER 30, 2005 SEPTEMBER 30, 2004
- -------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
Shares Sold 980,633 $ 4,723,476 2,229,086 $ 10,937,349
Reinvestment of distributions 328,051 1,579,023 328,273 1,579,417
Shares reacquired (2,095,723) (10,087,661) (3,446,383) (16,529,032)
- -------------------------------------------------------------------------------------------------------------
Decrease (787,039) $ (3,785,162) (889,024) $ (4,012,266)
- -------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- -------------------------------------------------------------------------------------------------------------
Shares Sold 361,986 $ 1,748,125 81,716 $ 397,577
Reinvestment of distributions 17,402 83,941 16,008 77,209
Shares reacquired (167,552) (808,899) (202,977) (984,449)
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) 211,836 $ 1,023,167 (105,253) $ (509,663)
- -------------------------------------------------------------------------------------------------------------
</Table>
179
<Page>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
<Table>
<Caption>
PERIOD ENDED
HIGH YIELD SEPTEMBER 30, 2005*
- ------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT
- ------------------------------------------------------------------------
Shares sold 20,819,162 $ 321,556,851
Reinvestment of distributions 167,915 2,603,530
Shares reacquired (684,475) (10,614,735)
- ------------------------------------------------------------------------
Increase 20,302,602 $ 313,545,646
- ------------------------------------------------------------------------
CLASS B SHARES
- ------------------------------------------------------------------------
Shares sold 667 $ 10,000
Reinvestment of distributions 26 401
- ------------------------------------------------------------------------
Increase 693 $ 10,401
- ------------------------------------------------------------------------
CLASS C SHARES
- ------------------------------------------------------------------------
Shares sold 8,238,022 $ 127,405,275
Reinvestment of distributions 34,624 537,851
Shares reacquired (141,730) (2,193,897)
- ------------------------------------------------------------------------
Increase 8,130,916 $ 125,749,229
- ------------------------------------------------------------------------
CLASS P SHARES
- ------------------------------------------------------------------------
Shares sold 667 $ 10,000
Reinvestment of distributions 26 405
- ------------------------------------------------------------------------
Increase 693 $ 10,405
- ------------------------------------------------------------------------
</Table>
* For the period December 1, 2004 (commencement of investment operations) to
September 30, 2005.
180
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
LORD ABBETT MUNICIPAL INCOME FUND, INC.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Lord Abbett Municipal Income Fund, Inc.
(formerly known as Lord Abbett Tax-Free Income Fund, Inc.) (the "Company"),
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, 2005, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Company'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 standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of September 30, 2005 by correspondence with the
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the portfolios constituting Lord Abbett Municipal Income Fund, Inc. as of
September 30, 2005, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and their financial highlights for each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the United
States of America.
DELOITTE & TOUCHE LLP
New York, New York
November 28, 2005
181
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF TRUSTEES AND SHAREHOLDERS,
LORD ABBETT MUNICIPAL INCOME TRUST:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Lord Abbett Municipal Income Trust (formerly
known as Lord Abbett Tax-Free Income Trust) (the "Trust"), comprising Florida
Series, Georgia Series, Michigan Series, Pennsylvania Series, Lord Abbett
Insured Intermediate Tax-Free Fund, and Lord Abbett High Yield Municipal Bond
Fund, as of September 30, 2005, and the related statement of operations for the
year then ended, the 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 standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Trust
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Trust's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of September 30, 2005 by correspondence with the
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the portfolios constituting Lord Abbett Municipal Income Trust as of
September 30, 2005, the results of their operations for the year then ended, the
changes in their net assets, and their financial highlights for each of the
periods presented, in conformity with accounting principles generally accepted
in the United States of America.
DELOITTE & TOUCHE LLP
New York, New York
November 28, 2005
182
<Page>
BASIC INFORMATION ABOUT MANAGEMENT
The 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 State of Delaware and Maryland. Each Board appoints
officers who are responsible for the day-to-day operations of the Company and
Trust who execute policies authorized by the Board. Each Board also approves an
investment adviser to the Company and 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. Generally, each
Director and Trustee holds office until his/her successor is elected and
qualified or until his/her earlier resignation or removal, as provided in the
Company's and Trust's organizational documents.
Lord, Abbett & Co. LLC ("Lord Abbett"), a Delaware limited liability company, is
the investment adviser of the Company and Trust.
INTERESTED TRUSTEE/DIRECTOR
The following Trustee/Director 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
53 portfolios or series.
<Table>
<Caption>
CURRENT POSITION
LENGTH OF SERVICE
NAME,ADDRESS AND WITH COMPANY PRINCIPAL OCCUPATION OTHER
YEAR 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; Executive Officer of
90 Hudson Street and Chairman since Lord Abbett since 1996.
Jersey City, NJ 07302 1996
(1945)
</Table>
-------------------
INDEPENDENT TRUSTEES/DIRECTORS
The following independent or outside Trustees/Directors are also directors or
trustees of each of the fourteen Lord Abbett-sponsored funds, which consist of
53 portfolios or series.
<Table>
<Caption>
CURRENT POSITION
LENGTH OF SERVICE
NAME,ADDRESS AND WITH COMPANY PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH AND TRUST DURING PAST FIVE YEARS DIRECTORSHIPS
- ----------------------------------------------------------------------------------------------------------
E. THAYER BIGELOW Trustee/Director Managing General Partner, Currently serves as
Lord, Abbett & Co. LLC since 1994 Bigelow Media, LLC director of Adelphia
c/o Legal Dept. (since 2000); Senior Adviser, Communications, Inc.,
90 Hudson Street Time Warner Inc. (1998 - Crane Co., and Huttig
Jersey City, NJ 07302 2000); Acting Chief Executive Building Products Inc.
(1941) Officer of Courtroom
Television Network (1997 -
1998); President and Chief
Executive Officer of Time
Warner Cable Programming,
Inc. (1991 - 1997).
</Table>
183
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
<Table>
<Caption>
CURRENT POSITION
LENGTH OF SERVICE
NAME,ADDRESS AND WITH COMPANY PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH AND TRUST DURING PAST FIVE YEARS DIRECTORSHIPS
- ----------------------------------------------------------------------------------------------------------
WILLIAM H.T. BUSH Trustee/Director Co-founder and Chairman Currently serves as
Lord, Abbett & Co. LLC since 1998 of the Board of the financial director of WellPoint
c/o Legal Dept. advisory firm of Health Networks Inc.
90 Hudson Street Bush-O'Donnell & Company (since 2002), and
Jersey City, NJ 07302 (since 1986). Engineered Support
(1938) Systems, Inc. (since
2000).
ROBERT B. CALHOUN, JR. Trustee/Director Managing Director of Monitor Currently serves as
c/o Legal Dept. since 1998 Clipper Partners (since 1997) director of Avondale,
Lord, Abbett & Co. LLC and President of Clipper Inc. and Interstate
90 Hudson Street Asset Management Corp. (since Bakeries Corp.
Jersey City, NJ 07302 1991), both private equity
(1942) investment funds.
JULIE A. HILL Trustee/Director Owner and CEO of the Currently serves as
Lord, Abbett & Co. LLC since 2004 Hillsdale Companies, a director of WellPoint
c/o Legal Dept. business consulting firm Health Networks Inc.;
90 Hudson Street (since 1998); Founder, Resources Connection
Jersey City, NJ 07302 President and Owner of the Inc.; and Holcim (US)
(1946) Hiram-Hill and Hillsdale Inc. (a subsidiary of
Development Companies (1998 - Holcim Ltd.).
2000).
FRANKLIN W. HOBBS Trustee/Director Former Chief Executive Currently serves as
Lord, Abbett & Co. LLC since 2000 Officer of Houlihan Lokey director of Adolph
c/o Legal Dept. Howard & Zukin, an investment Coors Company.
90 Hudson Street bank (January 2002 - April
Jersey City, NJ 07302 2003); Chairman of Warburg
(1947) 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 Trustee/Director Retired - General Business Currently serves as
Lord, Abbett & Co. LLC since 1988 and Governance Consulting director of H.J. Baker
c/o Legal Dept. (since 1992); formerly (since 2003).
90 Hudson Street President and CEO of Nestle
Jersey City, NJ 07302 Foods.
(1933)
THOMAS J. NEFF Trustee/Director Chairman of Spencer Stuart Currently serves as
Lord, Abbett & Co. LLC since 1982 (U.S.), an executive search director of Ace, Ltd.
c/o Legal Dept. consulting firm (since 1996); (since 1997) and
90 Hudson Street President of Spencer Stuart Hewitt Associates, Inc.
Jersey City, NJ 07302 (1979-1996).
(1937)
</Table>
184
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
OFFICERS
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, NJ 07302.
<Table>
<Caption>
CURRENT POSITION
NAME AND WITH COMPANY LENGTH OF SERVICE PRINCIPAL OCCUPATION
YEAR OF BIRTH AND TRUST OF CURRENT POSITION DURING PAST FIVE YEARS
- -------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Chief Executive Elected in 1996 Managing Partner and
(1945) Officer and President Chief Executive Officer
of Lord Abbett
(since 1996).
JAMES COLBY* Executive Vice Elected in 2005 Investment Manager,
(1949) President joined Lord Abbett in
2005; formerly Vice
President and Senior
Portfolio Manager at John
Hancock Funds (2003 -
2005); prior thereto
Principal Consultant at
Old Harbor Capital
Management (2001 - 2003);
prior thereto Vice
President and Senior
Portfolio Manager at
Evergreen Investment
Management (1992 - 2001).
RICHARD D. SMOLA Executive Vice Elected in 2003 Partner and Investment
(1956) President Manager, joined Lord
Abbett in 1991.
JAMES BERNAICHE Chief Compliance Elected in 2005 Chief Compliance Officer,
(1956) Officer joined Lord Abbett in
2001; formerly Vice
President and Chief
Compliance Officer with
Credit Suisse Asset
Management.
JOAN A. BINSTOCK Chief Financial Elected in 1999 Partner and Chief
(1954) Officer and Vice Operations Officer,
President joined Lord Abbett in
1999.
PHILIP P. FANG Vice President Elected in 1994 Investment Manager,
(1965) joined Lord Abbett in
1991.
JOHN K. FORST Vice President and Elected in 2005 Deputy General Counsel,
(1960) Assistant Secretary joined Lord Abbett in
2004; prior thereto
Managing Director and
Associate General Counsel
at New York Life
Investment Management LLC
(2002-2003); formerly
Attorney at Dechert LLP
(2000-2002).
</Table>
185
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONCLUDED)
<Table>
<Caption>
CURRENT POSITION
NAME AND WITH COMPANY LENGTH OF SERVICE PRINCIPAL OCCUPATION
YEAR OF BIRTH AND TRUST OF CURRENT POSITION DURING PAST FIVE YEARS
- -------------------------------------------------------------------------------------------------------------
LAWRENCE H. KAPLAN Vice President and Elected in 1997 Partner and General
(1957) Secretary Counsel, joined Lord
Abbett in 1997.
ROBERT G. MORRIS Vice President Elected in 2005 Partner and Chief
(1944) Investment Officer,
joined Lord Abbett in
1991.
A. EDWARD OBERHAUS, III Vice President Elected in 1996 Partner and Manager of
(1959) Equity Trading, joined
Lord Abbett in 1983.
CHRISTINA T. SIMMONS Vice President and Elected in 2000 Assistant General
(1957) Assistant Secretary Counsel, joined Lord
Abbett in 1999.
PETER SCOTT SMITH Vice President Elected in 2000 Investment Manager,
(1966) joined Lord Abbett in
1992.
BERNARD J. GRZELAK Treasurer Elected in 2003 Director of Fund
(1971) Administration, joined
Lord Abbett in 2003;
formerly Vice President,
Lazard Asset Management
LLC (2000-2003); prior
thereto Manager of
Deloitte & Touche LLP.
</Table>
Please call 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.
- ----------
* James Colby is an officer of Lord Abbett Municipal Income Trust only.
186
<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 semiannual
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 219336, Kansas City, MO 64121.
PROXY VOTING POLICIES, PROCEDURES AND RECORDS
A description of the policies and procedures that Lord Abbett uses to vote
proxies related to each Fund's portfolio securities, and information on how Lord
Abbett voted each Fund's proxies during the 12-month period ended June 30, 2005
are available without charge, upon request, (i) by calling 888-522-2388; (ii) on
Lord Abbett's website at www.LordAbbett.com; or (iii) on the Securities and
Exchange Commission's ("SEC") website at www.sec.gov.
SHAREHOLDER REPORTS AND QUARTERLY PORTFOLIO DISCLOSURE
The Company and Trust are required to file their complete schedule of portfolio
holdings with the SEC for their first and third fiscal quarters on Form N-Q.
Copies of the filings are available without charge, upon request on the SEC's
website at www.sec.gov and may be available by calling Lord Abbett at
800-821-5129. You can also obtain copies of Form N-Q by (i) visiting the SEC's
Public Reference Room in Washington, DC (information on the operation of the
Public Reference Room may be obtained by calling 800-SEC-0330); (ii) sending
your request and duplicating fee to the SEC's Public Reference Room, Washington,
DC 20549-0102; or (iii) sending your request electronically to
publicinfo@sec.gov.
TAX INFORMATION
100% of the income distributions paid by each Fund during the fiscal year 2005
is tax-exempt dividend income.
187
<Page>
<Table>
[LORD ABBETT(R) LOGO]
Lord Abbett Municipal 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 Municipal 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
High Yield Municipal Bond Fund
Lord Abbett Mutual Fund shares are distributed by Michigan Series LATFI-2-905
LORD ABBETT DISTRIBUTOR LLC Pennsylvania Series (11/05)
</Table>
<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 during
the fiscal year ended September 30, 2005 (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 12(a)1 concerning the filing of the Code of Ethics. The
Registrant will provide a copy of the Code of Ethics to any person
without charge, upon request. To obtain a copy, please call Lord
Abbett at 800-821-5129.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT.
The Registrant's Board of Directors has determined that each of the
following independent Directors who are members of the audit committee
are audit committee financial experts: E. Thayer Bigelow, Robert B.
Calhoun, and Franklin W. Hobbs. Each of these persons is independent
within the meaning of the Form N-CSR.
ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES.
In response to sections (a), (b), (c) and (d) of Item 4, the aggregate
fees billed to the Registrant for the fiscal years ended September 30,
2005 and 2004 by the Registrant's principal accounting firm, Deloitte
& Touche LLP, the member firms of Deloitte Touche Tohmatsu and their
respective affiliates (collectively, "Deloitte") were as follows:
<Table>
<Caption>
FISCAL YEAR ENDED:
2005 2004
Audit Fees {a} $261,000 $229,000
Audit-Related Fees {b} 212 347
--------------------------------
Total audit and audit-related fees 261,212 229,347
--------------------------------
Tax Fees {c} 60,235 65,882
All Other Fees -0- -0-
--------------------------------
Total Fees $321,447 $295,229
--------------------------------
</Table>
- --------
{a} Consists of fees for audits of the Registrant's annual financial
statements.
{b} Consists of the Registrant's proportionate share of fees for
performing certain agreed-upon procedures regarding compliance with the
provisions of Rule 17a-7 of the Investment Company Act of 1940 and
related Board approved procedures.
{c} Fees for the fiscal year ended September 30, 2005 and 2004 consist
of fees for preparing the U.S. Income Tax Return for Regulated Investment
Companies, New Jersey Corporation Business Tax Return, New Jersey Annual
Report Form, U.S. Return of Excise Tax on Undistributed Income of
Investment Companies, IRS Forms 1099-MISC and 1096 Annual Summary and
Transmittal of U.S. Information Returns.
(e) (1) Pursuant to Rule 2-01(c) (7) of Regulation S-X, the Registrant's
Audit Committee has adopted pre-approval policies and procedures. Such
policies and procedures generally provide that the Audit Committee must
pre-approve:
- any audit, audit-related, tax, and other services to be
provided to the Lord Abbett Funds, including the Registrant,
and
- any audit-related, tax, and other services to be provided to
the Registrant's investment adviser and any entity controlling,
controlled by or under common control with the investment
adviser that provides ongoing services to one or more Funds
comprising the Registrant if the engagement relates directly to
<Page>
operations and financial reporting of a Fund, by the
independent auditor to assure that the provision of such
services does not impair the auditor's independence.
The Audit Committee has delegated pre-approval authority to its Chairman,
subject to a fee limit of $10,000 per event, and not to exceed $25,000
annually. The Chairman will report any pre-approval decisions to the Audit
Committee at its next scheduled meeting. Unless a type of service to be
provided by the independent auditor has received general pre-approval, it
must be pre-approved by the Audit Committee. Any proposed services exceeding
pre-approved cost levels will require specific pre-approval by the Audit
Committee.
(e) (2) The Registrant's Audit Committee has approved 100% of the services
described in this Item 4 (b) through (d).
(f) Not applicable.
(g) The aggregate non-audit fees billed by Deloitte for services rendered to
the Registrant are shown above in the response to Item 4 (a), (b), (c) and
(d) as "All Other Fees".
The aggregate non-audit fees billed by Deloitte for services rendered to the
Registrant's investment adviser, Lord, Abbett & Co. LLC ("Lord Abbett"), for
the fiscal years ended September 30, 2005 and 2004 were:
<Table>
<Caption>
FISCAL YEAR ENDED:
2005 2004
All Other Fees {a} $165,650 $81,900
</Table>
- --------
{a} Consist of fees for Independent Services Auditors' Report on Controls
Placed in Operation and Tests of Operating Effectiveness related to Lord
Abbett's Asset Management Services ("SAS 70 Report").
The aggregate non-audit fees billed by Deloitte for services rendered to
entities under the common control of Lord Abbett (i.e., Lord Abbett
Distributor LLC, the Registrant's principal underwriter) for the fiscal years
ended September 30, 2005 and 2004 were:
<Table>
<Caption>
FISCAL YEAR ENDED:
2005 2004
All Other Fees $- 0 - $- 0 -
</Table>
- --------
<Page>
(h) The Registrant's Audit Committee has considered the provision of
non-audit services that were rendered to the Registrant's investment adviser,
and any entity controlling, controlled by or under common control with the
investment adviser that provides ongoing services to the Registrant, that
were not pre-approved pursuant to Rule 2-01 (c)(7)(ii) of Regulation S-X and
has determined that the provision of such services is compatible with
maintaining Deloitte's independence.
<Page>
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6: SCHEDULE OF INVESTMENTS.
<Page>
Not applicable.
ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8: PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9: PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11: 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 a date within 90 days prior to the filing date of
this report, 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 significant 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 second fiscal
quarter of the period covered by this report that have materially
affected, or are reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
ITEM 12: EXHIBITS.
(a)(1) Amendments to Code of Ethics - Not applicable.
(a)(2) Certification of each principal executive officer and principal
financial officer of the Registrant as required by Rule 30a-2 under
the Act (17 CFR 270.30a-2) is attached hereto as a part of
EX-99.CERT.
<Page>
(a)(3) 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 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 MUNICIPAL 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 21, 2005
<Page>
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
LORD ABBETT MUNICIPAL 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 21, 2005