-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BON5lC328PUgUu5RaGtHSAbmBOY5yTwQHyhSY1/bC6ApJMMm/JvHEd/xZblsYDm5 RkJph09dRxTuEI5VyDv97w== 0000082693-96-000048.txt : 19960509 0000082693-96-000048.hdr.sgml : 19960509 ACCESSION NUMBER: 0000082693-96-000048 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960229 FILED AS OF DATE: 19960508 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN MUNICIPAL TRUST CENTRAL INDEX KEY: 0000836375 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05579 FILM NUMBER: 96557731 BUSINESS ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9146942020 MAIL ADDRESS: STREET 1: 2500 WESTCHESTER AVENUE CITY: PURCHASE STATE: NY ZIP: 10577 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN INVESTMENT TRUST CENTRAL INDEX KEY: 0000757440 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046599663 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04154 FILM NUMBER: 96557732 BUSINESS ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9146412305 MAIL ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION FUNDS/ DATE OF NAME CHANGE: 19940628 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION HIGH GRADE TAX FREE PORT DATE OF NAME CHANGE: 19940519 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION FUNDS DATE OF NAME CHANGE: 19921230 N-30D 1 EVERGREEN STATE TAX-FREE FUNDS EVERGREEN(SM) STATE TAX-FREE FUNDS (Drawings of the states of Georgia, North Carolina, South Carolina, Virginia, Florida, and Florida) Semi-Annual Report February 29, 1996 (Picture of Pine Tree) Evergreen Funds EVERGREEN STATE TAX-FREE FUNDS TABLE OF CONTENTS Economic Overview......................................................... 1 A Report From Your Portfolio Manager -- Florida High Income Municipal Bond Fund....................................................... 3 A Report From Your Portfolio Managers..................................... 5 (Drawing of Florida) FLORIDA Statement of Investments.................................................. 6 HIGH INCOME Statement of Assets and Liabilities....................................... 9 MUNICIPAL BOND FUND Statement of Operations................................................... 10 Statement of Changes in Net Assets........................................ 11 Financial Highlights...................................................... 12 (Drawing of Florida) FLORIDA MUNICIPAL Statement of Investments.................................................. 13 BOND FUND Statement of Assets and Liabilities....................................... 17 Statement of Operations................................................... 18 Statement of Changes in Net Assets........................................ 19 Financial Highlights...................................................... 20 (Drawing of Georgia) GEORGIA Statement of Investments.................................................. 22 MUNICIPAL BOND Statement of Assets and Liabilities....................................... 24 FUND Statement of Operations................................................... 25 Statement of Changes in Net Assets........................................ 26 Financial Highlights...................................................... 27 (Drawing of North Carolina) NORTH CAROLINA Statement of Investments.................................................. 29 MUNICIPAL BOND Statement of Assets and Liabilities....................................... 31 FUND Statement of Operations................................................... 32 Statement of Changes in Net Assets........................................ 33 Financial Highlights...................................................... 34 (Drawing of South Carolina) SOUTH CAROLINA Statement of Investments.................................................. 36 MUNICIPAL BOND Statement of Assets and Liabilities....................................... 38 FUND Statement of Operations................................................... 39 Statement of Changes in Net Assets........................................ 40 Financial Highlights...................................................... 41 (Drawing of Virginia) VIRGINIA Statement of Investments.................................................. 43 MUNICIPAL BOND Statement of Assets and Liabilities....................................... 45 FUND Statement of Operations................................................... 46 Statement of Changes in Net Assets........................................ 47 Financial Highlights...................................................... 48 Combined Notes to Financial Statements.................................... 50 Trustees and Officers..........................................Inside Back Cover
EVERGREEN(SM) is a Service Mark of Evergreen Asset Management Corp. Copyright 1995, Evergreen Asset Management Corp. EVERGREEN STATE TAX-FREE FUNDS ECONOMIC OVERVIEW BY EVERGREEN ASSET MANAGEMENT CHAIRMAN STEPHEN A. LIEBER The volatility of investment markets during the (Photo of first quarter of 1996 reflected a virtually constant Stephen A. reappraisal of economic prospects. The prospects of sporadic Lieber) commodity inflation, evidence of resurgent employment trends, failure of political negotiations to achieve a balanced budget agreement, declining demand in personal computer-based technological products, sizable consumer credit growth and greater credit card losses, the increase in imports without concomitant increases in exports, and the rise of the dollar, all drove the markets to mirror the fast changing trends of new statistics. The question of whether inflation might be reappearing was central to the investor reaction to these concerns. Fears of inflation increased through the first quarter, as evidenced by the sizable rise in bond market yields. By early April, long-term U.S. Treasury bond yields reached 7%, a level last seen in August 1995, and up more than one full percentage point from the beginning of the year. Clearly, investors were demanding more of an inflation premium in interest rates. The background with which this year has begun is inconclusive in its trends. We have previously held to the view that a wage-driven inflation is unlikely in the present economic environment due to the easy substitution of imported goods for many domestic goods, while competitive pressures for U.S. and world markets mount from the broadening dispersion of technology, capital, and capital goods. The strength of American industry, it is generally held, must come from its product innovation, its quality, and the rising productivity of its work force. These internal and external pressures have had a major impact in restraining wage-driven inflation. Monetary inflation has shown improving trends as the budget deficit, as a percentage of gross domestic product, continues to decline. Attention, however, must still be given to the longer term issues of potentially destabilized Federal budgeting due to entitlements. While no solution to this issue of government deficit control emerged from this year's political negotiations, it is at least better established on the political agenda than ever before. Investment markets demand a risk premium when faced with elements of uncertainty. The risk premium lately built into the fixed income markets not only reflects the arguable issue of whether there is a risk of wage inflation in the United States, but also the sharp recent increases in some key commodity prices. The combination of a dearth of rainfall and reduced acreage in key agricultural states has spiked up major food commodity prices. Similarly, the draining of oil inventories because of the heat requirements of the abnormally long and cold winter in northern states, together with the cautious inventory policies of the oil industry faced with the possibility that Iraqi supplies might return to the market, has caused prices of oil and refined products to rise. Many watchers for inflationary trends have jumped on these commodity rises, which have lead them to conclude that the inflation rate will rise and, therefore, that bond yields have to go up. The dissent is widespread, arguing that these are temporary interruptions, which will in the long run serve more to shrink profit margins than to raise prices and arguing that these are only interruptions to a fundamentally steady low inflation trend. They point to the 2.8% increase in the Consumer Price Index for the twelve months ended March 31. More important in the analysis of the potentials for bond yields, many economists argue, is the current trend toward the reduction of interest rates in Europe, led by the recent half percent discount rate cut by the German Bundesbank. The revival of economic growth in Europe, it is felt, requires lower interest rates which in turn will facilitate a decline in rates in the United States, merely from reduced competitive investment pressures. We conclude that negative trends which have dominated the bond market in the first months of the year, as marked by the sharp rise in yields, may well reflect shorter-term factors rather than long-term trends. Federal Reserve Bank Governors in numerous recent speeches and interviews have made the point that they are confident about the underlying trend of well-controlled inflation, suggesting that they are not aiming to increase the discount rates or to put any pressures to slow the economy. We conclude that the Federal Reserve is not aiming to stimulate the 1 EVERGREEN STATE TAX-FREE FUNDS ECONOMIC OVERVIEW -- (CONTINUED) economy at this time, but will act to sustain a reasonable growth in the better than 2% range if there is any further evidence of broadly slowing economic activity. International competitive interest rate pressures are diminishing, the trade balance is improving and the economy has remained resilient in the recent period of inventory correction. These are all factors suggesting a period of comparative stability for the months ahead. The tax-exempt securities markets in late 1994 and 1995, and again in early 1996, were negatively affected by the flat tax proposals. The differential between the yields of taxable fixed income debt and tax-exempt debt shrank to record lows for recent years. For those who were convinced that a flat tax, or a substantially reduced income tax level, was not to be expected in the near-term, the tax-exempt fixed income market presented an outstanding comparative investment opportunity. The loss in the Presidential primaries of the one candidacy which featured a flat tax has already restored considerable confidence in the continuation of the present tax structure, and increased the spread between taxable and tax-exempt bonds. As the fall election campaign nears, the comparative strength of the tax-exempt market will reflect the positions of the candidates. Unless there is a major surprise in the conventions, tax-exempt obligations seem favorably situated. Credit issues in the tax-exempt market have not been paramount since the rare case of the Orange County, California default. The ripple effect of that default was shorter lived than many expected, and the resolution of Orange County's fiscal difficulties is well underway. Its positive impact was to develop pressure for many municipalities and agencies to tighten their controls on cash management policies and shift to a more prudent, credit worthy structure than had often been used. With our overall expectation of a gradual reduction in interest rates as the inflation premium recently built into the market is reduced, we anticipate an attractive total return for high-quality fixed income investments, and further relative gains for the tax-exempt securities market. 2 EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND A REPORT FROM YOUR PORTFOLIO MANAGER RICHARD K. MARRONE Investors of tax exempt securities who were able to maintain a long-term investment perspective as 1994 came to an end and (Photo of 1995 began, were amply rewarded for their foresight and Richard K. patience. After suffering through the worst bond market on Marrone) record in 1994, the municipal market rebounded sharply and produced its best total return performance since 1986. As 1994 came to close, we expected 1995 to produce good news for municipals due to continuing interest rate declines and strong supply/demand technicals. This combination was expected to lift municipals to all-time highs, and very optimistic forecasts for the market were commonplace. This rosy scenario did not immediately materialize, however. During the second quarter of 1995, the issue of the tax exempt status of municipal securities began to haunt the market as various tax reform/flat tax alternatives were proposed. In mid-April, just before tax reform talk began, ten-year municipals yielded approximately 73% of the yield of ten-year treasuries. Prices then began to reflect the fears of the flat tax and by year-end, this ratio had risen to more than 82%. Similarly, but not quite to the same degree, the ratio of 20-year municipals yielded approximately 83% of the yield of the comparable Treasury. This ratio had risen to approximately 87% by the end of the year. During this period (May to late August/early September), municipal yields were rising more quickly than their taxable counterparts. Many investors were shifting their municipal investments down the yield curve to reduce risk from the increasing likelihood of a flat tax. By doing so, negative price movement was minimized. They were anticipating that real tax reform probably would not be enacted until after the 1996 election, maybe even not until early 1997, by which time some of these bonds would have matured. It appeared at the time, that the tax reform premium attached to long municipal yields indicated there existed significant concern from the investing public. The shorter maturities performed better because of this demand shift. These actions resulted in a significant steepening of the municipal yield curve. During the fourth quarter, this steepening trend reversed. Municipal investors, particularly mutual fund portfolio mangers, accepted the flat tax risk rather than risk underperforming their benchmarks. As interest rates continued to decline again, the rally in bond prices regained momentum and many portfolio managers lengthened their durations. This reversal in demand caused the municipal to Treasury ratio for five-year maturities to increase by approximately six percentage points from late September, while the ratio for long maturities increased by only one percentage point. This whipsaw action exhibits the follies of "trading the market" or taking a short-term perspective. We manage Evergreen Florida High Income Municipal Bond Fund with a long-term perspective. The focus of this Fund is to provide a high yield and a high level of tax-exempt income that is not subject to Florida's intangibles tax. The Fund has exhibited great growth since 1995. Assets have increased by approximately 24% since the end of fiscal 1995, most of which has come from new money into the Fund. The inflow of cash into the Fund enabled us to take advantage of the rise in rates, and therefore yields, that occcured in late 3 EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND A REPORT FROM YOUR PORTFOLIO MANAGER -- (CONTINUED) summer and early fall, by allowing us to purchase several high yielding new issues that provide good coupon income. The best performing sector of the municipal market during 1995 was lower rated credits, of which this Fund is primarily composed. As a result of continuing strong performance by the economy, several credits, such as airlines, exhibited improved economic fundamentals (strong revenue growth and low cost increases due to low inflation). This served to contribute to ratings upgrades, as happened with several Fund holdings, and consolidation where a stronger entity bought a weaker one. In addition, increasing demand for high yield securities as interest rates continued to decline also boosted the performance of lower rated credits. These actions put this Fund in a very enviable position versus its peers. Evergreen Florida High Income Municipal Bond Fund (Class A shares) received Morningstar's highest rating of five-stars as of February 29, 1996*. The Fund's three-year total return through December 31, 1995, ranked #1 among the 22 Florida Municipal Debt Funds tracked by Lipper Analytical Servces during that time**. For the twelve months ended December 31, the Fund ranked #24 among the 73 Florida Municipal Debt Funds tracked by Lipper. The Fund's total return for the three-year period ended February 29, 1996, ranked #1 among the 29 Florida Municipal Debt Funds tracked by Lipper during that time. The Fund's 12-month total return ended February 29, ranked #4 among the 73 Florida Municipal Debt Funds tracked by Lipper during that time. We will continue too search out and research credits to supply the Fund with good yield and coupon income. There are diamonds in the rough out there and we can find them through our emphasis on credit research. The Fund's Florida-based analyst enables us to uncover attractive investments quickly and efficiently so we can help provide the Fund's shareholders with the high yield and income they have come to expect. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. * MORNINGSTAR PROPRIETARY RATINGS REFLECT HISTORICAL RISK-ADJUSTED PERFORMANCE AS OF 2/29/96. THE RATINGS ARE SUBJECT TO CHANGE EVERY MONTH. MORNINGSTAR RATINGS ARE CALCULATED FROM THE FUND'S THREE-YEAR AVERAGE ANNUAL RETURN IN EXCESS OF 90-DAY TREASURY BILL MONTHLY RETURNS WITH APPROPRIATE FEE ADJUSTMENTS AND A RISK FACTOR THAT REFLECTS FUND PERFORMANCE BELOW 90-DAY TREASURY BILL MONTHLY RETURNS. TEN PERCENT OF THE FUNDS IN AN INVESTMENT CATEGORY RECEIVE FIVE STARS, 22.5% RECEIVE FOUR STARS, 35% RECEIVE THREE STARS, 22.5% RECEIVE TWO STARS, AND 10% RECEIVE ONE STAR. THE FUND WAS RATED WITH 835 OTHER MUNICIPAL BOND FUNDS. ** LIPPER ANALYTICAL SERVICES, INC., IS AN INDEPENDENT MUTUAL FUNDS PERFORMANCE MONITOR. THE FUND'S CLASS B SHARES WERE NOT RANKED AS THEY WERE NOT IN EXISTENCE FOR THE FULL 12 MONTHS ENDED 2/29/96. LIPPER RANKINGS DO NOT INCLUDE THE EFFECT OF SALES CHARGES. IF INCLUDED, RANKINGS COULD BE DIFFERENT. 4 EVERGREEN STATE MUNICIPAL BOND FUNDS A REPORT FROM YOUR PORTFOLIO MANAGERS ROBERT EVANS, RICHARD K. MARRONE, ROBERT DRYE, CHARLES JEANNE During most of the past six months, the market enjoyed (Photo of impressive performance. Yields on long-term municipal bonds were Robert Evans) lower by as much as 65 basis points in January as they were at the end of August 1995, but gave back as much as 30 basis points (Photo of by the end of February. In February, the government reported Richard K. stronger than expected housing starts and consumer confidence Marrone) numbers, along with lower than expected initial jobless claims. Consumer Price Index (CPI) and Producer Price Index (PPI) (Photo of numbers showed that inflation seemed to be under control, Robert Drye) however, the economy appeared to be moving along faster than expected, and the hopes of another interest rate (Photo of cut by the Federal Reserve faded. Charles Jeanne) Throughout this period, however, municipal bonds outperformed treasuries by a good margin. In fact, municipal yields as a percentage of treasuries were trading near the richer end of their three-month range. For example, ten-year municipals were 77.1% of treasuries, and 20-year municipals were 84.9% of treasuries. We also began to see the municipal yield curve steepen from its flatter posture in January, by about 30 basis points. In addition, concerns about tax reform pushed the long-term yield ratios between treasuries and municipals to around 90%, the most attractive levels seen in a long time, and we took advantage of this by lengthening the portfolios durations. Now the fears of tax reform's negative impact on the municipal market have begun to recede as the difficulty of passing this legislation have become more apparent. Municipal bond funds have experienced flat to negative cash flows during the past six months. Much of this was the result of tax reform proposals and competition from a booming stock market. The total outstanding supply of municipal debt is expected to decrease by about $22 billion due to low issuance, advanced refunding, and principal redemptions. The declining municipal supply should help to support the market. During the past six months, we set our durations and made structural changes to the Funds' portfolios such that we would be able to take advantage of an environment of declining interest rates. We purchased lower coupon, longer maturity bonds, and better call protection. As the year progressed and rates declined, our strategy was rewarded with continued outperformance. For Class A shares, the total returns of Evergreen North Carolina Municipal Bond Fund, Evergreen South Carolina Municipal Bond Fund, and Evergreen Virginia Municipal Bond Fund ranked, respectively, #1 out of 31, #1 out of 14, and #1 out of 30, state-specific municipal bond funds tracked by Lipper Analytical Services for the 12 months ended December 31, 1995*. For the Class B shares of these Funds, the 12-month total returns through December 31, ranked #4, #2, and #6, respectively. For the 12 months ended February 29, 1996, these Funds ranked #4 out of 32, #2 out of 15, and #13 out of 30 state municipal bond funds in their respective Lipper universes. The 12-month total returns through February 29 for these Funds' Class B shares, ranked #11, #5, and #22, respectively. (The Funds' Class A shares are subject to a maximum 4.75% front-end sales charge. Class B shares are subject to a maximum 5% contingent deferred sales charge). The Funds continue to focus on purchasing investment grade issues, with yields higher than those on standard general obligation bonds, that provide good value relative to historic norms. Examples of such purchases include Industrial Development Revenue Bonds or Housing Bonds that provide lower volatility with additional yield pickup. New purchases made during this period were usually financed by the sale of shorter, lower yielding, high grade bonds. Our municipal credit analyst carefully monitors existing holdings and seeks out new investment opportunities. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. * LIPPER ANALYTICAL SERVICES, INC., IS AN INDEPENDENT MUTUAL FUNDS PERFORMANCE MONITOR. LIPPER RANKINGS DO NOT INCLUDE THE EFFECT OF SALES CHARGES. IF INCLUDED, RANKINGS COULD BE DIFFERENT. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE. INVESTORS' SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. 5 EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Florida)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- 97.9% FLORIDA -- 97.9% $ 660 Alachua Cnty., Health Facs. Auth. RB, (Santa Fe Healthcare Facs. Proj.), 7.60%, 11/15/13....................... $ 762,115 825 Alachua Cnty., Health Facs. RB, (Beverly Enterprises Proj.), 10.125%, 4/1/10....................... 915,783 1,000 Bay Cnty., Hosp. Sys. RB, (Bay Med. Ctr. Proj.), 8.00%, 10/1/12........................ 1,112,850 300 Baytree Cmnty., Dev. Dist. Spl. Assmt. RB, 8.75%, 5/1/12......................... 321,354 1,875 Brevard Cnty., Health Facs. Auth. RB, (Courtenay Springs Vlg.), 7.50%, 11/15/12....................... 1,923,937 1,000 Brevard Cnty., Tourist Dev. Tax RB, (Marlins Spring), 6.875%, 3/1/13........................ 1,061,620 1,000 Broward Cnty., Hsg. Fin. Auth. (Ser A.),RB, 7.35%, 3/1/23, (GNMA)................. 1,048,940 1,125 Crossings at Fleming Is., Cmnty. Dev. Dist. Util. RB, 7.375%, 10/1/19....................... 1,086,311 2,240 Dade Cnty. IDA, (Miami Cerebral Palsy Svcs. Proj.), 8.00%, 6/1/22......................... 2,299,853 2,310 Duval Cnty., Hsg. Fin. Auth. RB, (St. Augustine Apts. Proj.), 6.00%, 3/1/21......................... 2,307,020 485 Escambia Cnty., Health Facs. Auth. RB, (Azalea Trace Inc.), 8.50%, 1/1/19......................... 506,587 535 Escambia Cnty., Health Facs. Auth. RB, (Azalea Trace Inc.), 9.25%, 1/1/06......................... 578,603 235 Escambia Cnty., Health Facs. Auth. RB, (Azalea Trace Inc.), 9.25%, 1/1/12......................... 254,153 PRINCIPAL AMOUNT (000) VALUE $ 1,500 Escambia Cnty., Health Facs. Auth. (Ser. B), RB, (Baptist Hosp. Inc.), 6.00%, 10/1/14........................ $ 1,459,005 2,000 Escambia Cnty. PCR, (Champion Intl. Corp. Proj.), 6.90%, 8/1/22......................... 2,141,060 1,000 Florida, Hsg. Fin. Agy. (Ser. H), RB, (The Vinyards Proj.), 6.50%, 11/1/25........................ 1,011,300 1,710 Hernando Cnty. IDR, (Florida Crushed Stone Co.), 8.50%, 12/1/14........................ 1,896,476 1,545 Hialeah Gardens, IDR, (Waterford Convalescent-A), 7.875%, 12/1/07....................... 1,607,866 600 Hillsborough Cnty., Aviation Auth. RB, (US Air Proj.), 8.60%, 1/15/22........................ 646,146 1,150 Hillsborough Cnty., Cap. Impt. (Ser. 2), RB, (Cnty. Ctr. Proj.), 6.75%, 7/1/22......................... 1,321,661 3,430 Homestead, IDR, (Cmnty. Rehab. Providers Prog-A) 7.95%, 11/1/18........................ 3,579,788 2,500 Indian Trace Cmnty. GO, (Wtr. Mgmt. Spl. Benefit Sub-B) 8.25%, 5/1/11......................... 2,669,025 750 Jacksonville, Health Facs. Auth. RB, (Cypress Vlg. Proj.), 7.00%, 12/1/14........................ 778,943 1,000 Jacksonville, Health Facs. Auth. IDR, (Cypress Vlg. Proj.), 7.00%, 12/1/22........................ 1,036,560 850 Lee Cnty. IDA, (Encore Nursing Ctr. Partner), 8.125%, 12/1/07....................... 920,737 2,920 Leon Cnty., Ed. Facs. Auth. (Ser. A), RB, 8.25%, 5/1/14......................... 2,995,978 1,175 Martin Cnty. IDR, Indiantown Cogeneration PJ-A, 7.875%, 12/15/25...................... 1,343,765
6 EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Florida)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- CONTINUED $ 1,245 Meadow Pointe II, Cmnty. Dev. Dist., Cap. Impt. RB, 7.75%, 5/1/18......................... $ 1,262,716 1,310 North Springs, Impt. Dist. Wtr. Mgmt., (Ser. A), Spl. Assmt., 8.20%, 5/1/24......................... 1,411,263 500 Northern Palm Beach Cnty., Wtr Ctl. Dist. Spl. Assmt., 6.875%, 11/1/13....................... 529,440 500 Northern Palm Beach Cnty., Wtr Ctl. Dist. Spl. Assmt., 7.00%, 8/1/15......................... 532,965 1,500 Northwood, Cmnty. Dev. Dist., Spl. Assmt. RB, 7.60%, 5/1/17......................... 1,506,435 1,040 Orange Cnty., Health Facs. Auth. RB, (Lakeside Alts. Inc.), 6.50%, 7/1/13......................... 1,058,938 2,000 Osceola Cnty. IDA, (Cmnty. Provider Pooled Ln. Pg. A) 7.75%, 7/1/17......................... 2,072,180 2,000 Palm Beach Cnty., Solid Waste, IDR, (Okeelanta Pwr. LP Proj. A) 6.85%, 2/15/21........................ 2,039,800 1,000 Palm Beach Cnty., Solid Waste, IDR, (Osceola Pwr. Proj. A) 6.95%, 1/1/22......................... 1,018,850 685 Pinellas Cnty., Edl. Facs. Auth. RB, (Eckerd College,) 7.75%, 7/1/14......................... 752,582 PRINCIPAL AMOUNT (000) VALUE $ 5,000 Polk Cnty. IDA, 7.525%, 1/1/15........................ $ 5,273,100 1,000 Port Everglades, (Ser. A), RB, 7.50%, 9/1/12......................... 1,059,790 1,710 Quantum Cmnty., Dev. Dist. Spl. Assmt. 7.75%, 3/1/14......................... 1,736,693 2,100 Riverwood Cmnty., Swr. Sys. RB, 7.75%, 10/1/14........................ 2,134,629 2,500 St. Johns Cnty., (Ser. A), IDA, (Vicars Landing Proj.), 6.75%, 2/15/12........................ 2,502,600 1,500 Sarasota Cnty., Health Fac. Auth. RB, (Manatee Jewish), 6.70%, 7/1/25......................... 1,406,115 1,000 Sarasota Cnty., Health Fac. Auth. RB, (Sunnyside Properties), 6.00%, 5/15/10........................ 953,950 1,500 South Indian River, Wtr. Ctl. Dist. RB, (Egret Landing Phase I) 7.50%, 11/1/18........................ 1,629,510 3,000 Tampa, (Aquarium Inc. Proj.), RB, 7.75%, 5/1/27......................... 3,186,660 1,000 Tarpon Springs, Health Facs. Auth. RB, (Helen Ellis Mem. Hosp. Proj.), 7.50%, 5/1/11......................... 1,045,700
7 EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Florida)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- CONTINUED $ 2,000 Virgin Islands, Wtr. & Pwr. Auth. (Ser. B), RB, 7.60%, 1/1/12......................... $ 2,192,820 1,775 Westchase East, Cmnty. Dev. Dist., Cap. Impt. RB, 7.50%, 5/1/17......................... 1,769,480 1,000 Winter Garden, IDR, (Beverly Enterprises), 8.75%, 7/1/12......................... 1,119,930 250 Winter Haven, Hsg. Auth. (Ser. C), (Abbey Lane Apts.) 7.00%, 7/1/12, (FNMA)................. 266,188 250 Winter Haven, Hsg. Auth. (Ser. C), (Abbey Lane Apts.), 7.00%, 7/1/24, (FNMA)................. 262,345 TOTAL INVESTMENTS (COST $73,929,180)....... 97.9% $76,312,115 OTHER ASSETS AND LIABILITIES -- NET....... 2.1 1,656,139 NET ASSETS.................. 100.0% $77,968,254
Summary of Abbreviations: FNMA -- Federal National Mortgage Association GNMA -- Government National Mortgage Association GO -- General Obligation Bond IDA -- Industrial Development Authority IDR -- Industrial Development Revenue Bond PCR -- Pollution Control Revenue Bond RB -- Revenue Bond See accompanying notes to financial statements. 8 EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Florida)
ASSETS: Investments at value (identified cost $73,929,180)............................................................. $76,312,115 Cash........................................................................................................... 1,673,068 Receivable for securities sold................................................................................. 3,097,548 Interest receivable............................................................................................ 1,478,759 Receivable for Fund shares sold................................................................................ 167,568 Deferred organization expenses and other assets................................................................ 19,150 Total assets............................................................................................. 82,748,208 LIABILITIES: Payable for securities purchased............................................................................... 4,421,622 Dividends payable.............................................................................................. 222,575 Accrued expenses............................................................................................... 51,695 Payable for Fund shares redeemed............................................................................... 42,121 Distribution fee payable....................................................................................... 23,690 Accrued advisory fee........................................................................................... 18,251 Total liabilities........................................................................................ 4,779,954 NET ASSETS........................................................................................................ $77,968,254 NET ASSETS CONSIST OF: Paid-in capital................................................................................................ $76,908,948 Distributions in excess of net investment income............................................................... (7,223) Accumulated net realized loss on investment transactions....................................................... (1,316,406) Net unrealized appreciation of investments..................................................................... 2,382,935 Net assets............................................................................................... $77,968,254 CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE: Class A Shares ($65,871,624 (division sign) 6,202,769 shares of beneficial interest outstanding)............... $ 10.62 Sales charge -- 4.75% of offering price........................................................................ .53 Maximum offering price................................................................................... $ 11.15 Class B Shares ($11,179,145 (division sign) 1,052,686 shares of beneficial interest outstanding)............... $ 10.62 Class Y Shares ($917,485 (division sign) 86,396 shares of beneficial interest outstanding)..................... $ 10.62
See accompanying notes to financial statements. 9 EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND STATEMENT OF OPERATIONS FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Florida)
INVESTMENT INCOME: Interest........................................................................................... $2,448,605 EXPENSES: Advisory fee....................................................................................... $213,830 Administrative personnel and service fees.......................................................... 18,897 Distribution fee -- Class A Shares................................................................. 80,543 Distribution fee -- Class B Shares................................................................. 23,900 Shareholder services fee -- Class B Shares......................................................... 7,966 Registration and filing fees....................................................................... 21,986 Custodian fee...................................................................................... 20,548 Transfer agent fee................................................................................. 18,788 Professional fees.................................................................................. 14,678 Reports and notices to shareholders................................................................ 8,807 Trustees' fees and expenses........................................................................ 5,933 Amortization of organizational expense............................................................. 974 Miscellaneous...................................................................................... 3,228 440,078 Less: Fee waivers..................................................................................... (106,915) Net expenses....................................................................................... 333,163 Net investment income................................................................................. 2,115,442 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investment transactions....................................................... 41,341 Net change in unrealized appreciation of investments............................................... 1,376,565 Net gain on investments............................................................................ 1,417,906 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................................. $3,533,348
See accompanying notes to financial statements. 10 EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND STATEMENT OF CHANGES IN NET ASSETS (Drawing of the state of Florida)
SIX MONTHS ENDED FOUR MONTHS FEBRUARY 29, ENDED 1996 AUGUST 31, (UNAUDITED) 1995 INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income....................................................................... $ 2,115,442 $ 1,225,081 Net realized gain on investment transactions................................................ 41,341 150,049 Net change in unrealized appreciation of investments........................................ 1,376,565 1,449,591 Net increase in net assets resulting from operations..................................... 3,533,348 2,824,721 DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A Shares.............................................................................. (1,933,150) (1,214,190) Class B Shares.............................................................................. (167,589) (10,891) Class Y Shares.............................................................................. (14,703) -- Total distributions to shareholders from net investment income.............................. (2,115,442) (1,225,081) IN EXCESS OF NET INVESTMENT INCOME: Class A Shares.............................................................................. -- (8,411) Class B Shares.............................................................................. -- (76) Total distributions to shareholders in excess of net investment income...................... -- (8,487) Total distributions to shareholders...................................................... (2,115,442) (1,233,568) FUND SHARE TRANSACTIONS: Proceeds from shares sold................................................................... 25,068,330 10,600,090 Proceeds from reinvestment of distributions................................................. 754,131 307,200 Payment for shares redeemed................................................................. (11,960,344) (14,853,087) Net increase (decrease) from Fund share transactions..................................... 13,862,117 (3,945,797) Net increase (decrease) in net assets.................................................... 15,280,023 (2,354,644) NET ASSETS: Beginning of period......................................................................... 62,688,231 65,042,875 End of period (includes distributions in excess of net investment income of ($7,223), at February 29, 1996 and August 31, 1995).................................................... $ 77,968,254 $ 62,688,231
See accompanying notes to financial statements. 11 EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS (Drawing of the state of Florida)
CLASS A SHARES SIX MONTHS FOUR MONTHS CLASS B SHARES ENDED ENDED YEAR ENDED APRIL JUNE 17, 1992* SIX MONTHS ENDED FEBRUARY 29, 1996 AUGUST 31, 30, THROUGH FEBRUARY 29, 1996 (UNAUDITED) 1995# 1995 1994 APRIL 30, 1993 (UNAUDITED) PER SHARE DATA: Net asset value, beginning of period.................... $10.40 $10.16 $10.08 $10.36 $10.00 $10.40 Income (loss) from investment operations: Net investment income..... .32 .21 .65 .68 .61 .28 Net realized and unrealized gain (loss) on investments.......... .22 .24 .08 (.26) .39 .22 Total from investment operations............ .54 .45 .73 .42 1.00 .50 Less distributions to shareholders from: Net investment income..... (.32) (.21) (.65) (.68) (.61) (.28) Net realized gain on investments............. -- -- -- (.02) (.03) -- Total distributions..... (.32) (.21) (.65) (.70) (.64) (.28) Net asset value, end of period.................... $10.62 $10.40 $10.16 $10.08 $10.36 $10.62 TOTAL RETURN+............... 5.2% 4.4% 7.6% 3.3% 10.3% 4.8% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)........... $65.872 $59,551 $65,043 $72,683 $33,541 $11,179 Ratios to average net assets: Expenses.................. .87%++** 1.07%++** .60%** .14%** .00%** 1.62%++** Net investment income..... 6.00%++** 5.92%++** 6.52%** 6.16%** 5.92%++** 5.26%++** Portfolio turnover rate..... 21% 14% 28% 31% 50% 21%
CLASS Y SHARES SEPTEMBER 20, 1995* JULY 10, 1995* THROUGH THROUGH FEBRUARY 29, 1996 AUGUST 31, 1995 (UNAUDITED) PER SHARE DATA: Net asset value, beginning of period.................... $10.41 $ 10.40 Income (loss) from investment operations: Net investment income..... .08 0.29 Net realized and unrealized gain (loss) on investments.......... (.01) 0.22 Total from investment operations............ .07 0.51 Less distributions to shareholders from: Net investment income..... (.08) (0.29) Net realized gain on investments............. -- -- Total distributions..... (.08) (.29) Net asset value, end of period.................... $10.40 $ 10.62 TOTAL RETURN+............... .6% 5.0% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)........... $3,137 $917 Ratios to average net assets: Expenses.................. 1.09%++ .61%++** Net investment income..... 3.40%++ 6.26%++** Portfolio turnover rate..... 14% 21%
# The Fund changed its fiscal year end from April 30 to August 31. * Commencement of class operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. Initial sales charges or contingent deferred sales charges are not reflected. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income to average net assets would have been the following:
CLASS B CLASS Y CLASS A SHARES SHARES SHARES SIX MONTHS FOUR MONTHS SIX MONTHS SEPTEMBER 20, 1995* ENDED ENDED YEAR ENDED JUNE 17, 1992* ENDED THROUGH FEBRUARY 29, 1996 AUGUST 31, APRIL 30, THROUGH FEBRUARY 29, 1996 FEBRUARY 29, 1996 (UNAUDITED) 1995# 1995 1994 APRIL 30, 1993 (UNAUDITED) (UNAUDITED) Expenses............... 1.17% 1.42% 1.26% 1.12% 1.12% 1.92% .91% Net investment income.. 5.70% 5.57% 5.86% 5.18% 4.80% 4.96% 5.96%
See accompanying notes to financial statements. 12 EVERGREEN FLORIDA MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Florida)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- 92.1% FLORIDA -- 92.1% $1,500 Alachua Cnty., Health Fac. RB, (Mental Health Svcs. Proj. A) 7.75%, 7/1/10, (FSA)............... $ 1,700,805 2,000 Altamonte Springs, Health Fac. Auth. Hosp. (Ser. B), RB, (Adventis Health Sunbelt) 5.125%, 11/15/18, (AMBAC).......... 1,861,580 1,600 Boynton Beach, Wtr. & Swr. RB, Prerefunded @ $102 7.40%, 11/1/15, (AMBAC)............ 1,848,032 795 Brevard Cnty., Hsg. Fin. Auth. (Ser. B), RB, 7.00%, 3/1/13, (FSA)............... 845,435 1,375 Broward Cnty., Hsg. Fin. Auth. (Ser. B), RB, 7.125%, 3/1/17, (GNMA)............. 1,461,488 205 Broward Cnty., Hsg. Fin. Auth. (Ser. B), RB, 7.55%, 3/1/15, (GNMA).............. 218,253 2,925 Broward Cnty., Health Care Facs. RB, (North Beach Hosp. Proj.) 7.00%, 8/15/11, (MBIA)............. 3,297,089 105 Charlotte Cnty., Peachland Muni. Ser. Tax & Ben. Unit, 7.25%, 10/1/10, (MBIA)............. 118,278 1,000 Charlotte Cnty., Util. RB, Prefunded @ $102 7.00%, 10/1/14, (FGIC)............. 1,153,450 500 Collier Cnty., Health Facs. Auth. RB, (The Moorings, Inc. Proj.) 7.00%, 12/1/19..................... 518,085 1,000 Cooper City, Sales Tax RB, 7.25%, 10/1/11..................... 1,110,180 1,000 Dade Cnty., Courthouse Ctr. Proj. RB, 6.25%, 4/1/09,..................... 1,076,680 2,070 Dade Cnty., Edl. Facs. Auth. RB, (Florida Intl. Univ. N. Miami Proj.), Prerefunded @ $102 7.10%, 10/1/16..................... 2,397,867 PRINCIPAL AMOUNT (000) VALUE $2,000 Dade Cnty., Edl. Facs. Auth. RB, St. Thomas Univ., 6.00%, 1/1/14, (LOC: Sun Bank Miami).............. $ 2,016,060 1,000 Dade Cnty., Edl. Facs. Auth. RB, St. Thomas Univ., 6.125%, 1/1/19, (LOC: Sun Bank Miami).............. 1,013,540 1,600 Dade Cnty., Edl. Facs. Auth. RB, St. Thomas Univ, Prerefunded @ $102 7.65%, 1/1/14, (LOC: Sun Bank Miami).............. 1,824,048 5,280 Dade Cnty., Gtd. Entitlement RB, Cap Apprec. Ref. (Ser. A), Zero Coupon, 2/1/08, (MBIA)........ 2,813,606 245 Dade Cnty., Health Fac. Auth. Hosp. RB, (South Shore Hosp. & Med. Center) 7.60%, 8/1/24...................... 267,239 500 Dade Cnty., Hsg. Fin. Auth. (Ser. D), RB, 6.95%, 12/15/12, (FSA)............. 532,045 135 Dade Cnty., Hsg. Fin. Auth. (Ser. A), RB, 7.10%, 3/1/17, (GNMA).............. 143,354 270 Dade Cnty., Hsg. Fin. Auth. (Ser A), RB, 7.50%, 9/1/13, (GNMA).............. 287,736 2,000 Dade Cnty., (Miami Cerebral Palsy Svcs. Proj.), IDR, 8.00%, 6/1/22...................... 2,053,440 3,815 Dade Cnty., Pub. Facs. (Ser. A), RB, (Jackson Memorial Hosp. Proj.) 4.875%, 6/1/15, (MBIA)............. 3,520,864 840 Duval Cnty., Hsg. Fin. Auth. RB, 7.35%, 7/1/24, (FGIC).............. 894,449 215 Duval Cnty., Hsg. Fin. Auth. RB, 7.50%, 6/1/15, (GNMA).............. 229,074 4,615 Escambia Cnty. PCR, (Champion Intl. Corp. Proj.) 5.875%, 6/1/22..................... 4,499,440
13 EVERGREEN FLORIDA MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Florida)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- CONTINUED $1,000 Escambia Cnty., Health Facs. Auth. (Ser. B), RB, (Baptist Hosp. Inc.) 6.00%, 10/1/14..................... $ 972,670 3,000 Escambia Cnty. PCR, (Gulf Power Co. Proj.) 8.25%, 6/1/17...................... 3,197,610 2,000 FSU Financial Assistance, Inc., Edl. & Athletic Facs. (Ser. A), RB, Prerefunded @ $102 6.75%, 10/1/16 (LOC- Sun Bank Orlando)............ 2,282,240 1,895 Florida, Hsg. Fin. Agy. (Ser. A), RB, 6.875%, 10/1/12.................... 1,978,096 3,600 Florida, Hsg. Fin. Agy. RB, 8.00%, 12/1/20, (GMNA)............. 3,788,028 2,000 Florida State, Brd. of Ed. Cap.Outlay (Ser. E), RB, 5.25%, 6/1/23...................... 1,878,680 2,500 Florida State, Brd. Regt. Univ. Sys. RB, 6.70%, 7/1/12, (AMBAC)............. 2,767,475 2,000 Florida State, Div. Bd. Fin. Dept. RB, 6.75%, 7/1/13, (AMBAC)............. 2,220,660 4,000 Florida State, Muni. Pwr. Agy. RB, (Stanton II Proj.), 4.50%, 10/1/27, (AMBAC)............ 3,366,920 1,235 Hialeah, Cap. Impt. RB, 5.50%, 10/1/13..................... 1,183,920 1,000 Hillsborough Cnty., Fla. Aviation Auth. (Ser. A), RB, (Tampa Intl. Airport) 6.90%, 10/1/11, (FGIC)............. 1,097,470 2,000 Hillsborough Cnty. IDR, (Univ. Community Hosp.), 6.50%, 8/15/19, (MBIA)............. 2,290,640 1,000 Homestead, Excise Tax RB, 7.15%, 10/1/11, (MBIA)............. 1,122,360 2,500 Jacksonville, Elec. Auth. RB, (Bulk Pwr. Supply Scherer) Prerefunded @ $101.5 6.75%, 10/1/21..................... 2,804,475 PRINCIPAL AMOUNT (000) VALUE $2,135 Jacksonville, Elec. Auth. RB, (Bulk Pwr. Supply Scherer) Prerefunded @ $101.5 7.00%, 10/1/12..................... $ 2,417,119 4,085 Jacksonville, Elec. Auth. RB, Elec. Sys, (Ser. 3-A) 5.25%, 10/1/28..................... 3,796,885 2,000 Jacksonville, Health Facs. Auth. RB, Prerefunded @ $102 7.50%, 11/1/15..................... 2,318,460 1,500 Jacksonville, Health Facs. Auth. Hosp. RB, (St. Lukes Hosp. Assn. Proj.) 6.75%, 11/15/13.................... 1,611,150 1,500 Jacksonville, Health Facs. Auth. Hosp. RB, (St. Lukes Hosp. Assn. Proj.) 7.125%, 11/15/20................... 1,639,140 1,025 Leon Cnty., Hsg. Fin. Auth. (Ser. B), RB, (Multi-Cnty. Prog.), 6.25%, 7/1/19, (GNMA).............. 1,036,316 1,510 Manatee Cnty. GO, 4.75%, 10/1/13, (FGIC)............. 1,391,314 1,000 Manatee Cnty., Community Redevelopment, RB, (Admin. Center Proj.) 7.00%, 4/1/08, (MBIA).............. 1,106,660 3,500 Manatee Cnty., Pub. Utils. (Ser. 1991A), RB, Prerefunded @ $102 6.75%, 10/1/13, (MBIA)............. 3,993,920 1,500 Martin Cnty., Hosp. (Ser. B), RB, 7.10%, 11/15/20, (MBIA)............ 1,674,510 2,000 Miami Beach, Redevelopment Agy., Tax Increment RB, (City Center-Historic Convention Vlg.) 5.625%, 12/1/09.................... 1,987,520 3,000 Miami Beach, Redevelopment Agy., Tax Increment RB, (City Center-Historic Convention Vlg.) 5.80%, 12/1/13..................... 2,915,550
14 EVERGREEN FLORIDA MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Florida)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- CONTINUED $2,000 Miami Beach, Redevelopment Agy., Tax Increment RB, (City Center-Historic Convention Vlg.) 5.875%, 12/1/22.................... $ 1,912,900 2,400 Miami, Sports & Exhibit Auth. RB, Prerefunded @ $102 7.20%, 10/1/20, (FGIC)............. 2,717,040 1,000 North Tampa, Hsg. Dev. Corp. (Ser. A), RB, (Country Oaks Apts.), 6.90%, 1/1/24, (FNMA).............. 1,043,650 1,000 Okaloosa Cnty., Wtr. & Swr. RB, 6.00%, 7/1/11, (AMBAC)............. 1,088,190 3,000 Orange Cnty., Health Facs. Auth. RB, Lakeside Alternatives, Inc., 6.50%, 7/1/13...................... 3,054,630 1,000 Orlando, Util. Comm. Wtr. & Elec., (Ser. D), RB, 6.75%, 10/1/17..................... 1,182,210 3,000 Palm Beach Cnty., Criminal Justice Facs. RB, 7.20%, 6/1/15, (FGIC).............. 3,686,490 1,000 Palm Beach Cnty., Hsg. Fin. Auth. (Ser. A), RB, 6.50%, 10/1/21, (GNMA)............. 1,018,340 4,440 Palm Beach Cnty., Hsg. Fin. Auth. (Ser. B), RB, 7.60%, 3/1/23, (GNMA).............. 4,725,359 5,000 Pensacola, Health Facs. Auth. RB, (Daughters Charity Natl. Health) 5.25%, 1/1/11...................... 4,839,450 2,195 Palm Beach Cnty., Health Facs. Auth. RB, (Good Samaritan Health Sys.) 6.20%, 10/1/11..................... 2,240,941 6,000 Palm Beach Cnty., Health Facs. Auth. RB, (Good Samaritan Health Sys.) 6.30%, 10/1/22..................... 6,138,180 PRINCIPAL AMOUNT (000) VALUE $860 Polk Cnty., Hsg. Fin. Auth. (Ser. A), RB, 7.00%, 9/1/15...................... $ 894,168 1,000 Port Everglades, Port Auth. RB, (Escrowed to Maturity), 7.125%, 11/1/16.................... 1,203,720 1,500 Reedy Creek, Impt. Dist. Util. (Ser. 1), RB, 5.00%, 10/1/19, (MBIA)............. 1,392,135 750 St. Johns Cnty., Solid Waste Disp. RB, 7.25%, 11/1/10, (FGIC)............. 846,120 1,000 St. Petersburg, Health Facs. Auth. RB, (St. Mary's Allegheny Health Sys.) 7.00%, 12/1/21, (MBIA)............. 1,125,700 1,955 Sanford, Wtr. & Swr. RB, 4.50%, 10/1/21, (AMBAC)............ 1,683,333 1,740 Sanford, Wtr. & Swr. RB, 4.75%, 10/1/18, (AMBAC)............ 1,568,140 1,800 Sarasota Cnty., Health Fac. Auth. RB, Sunnyside Pptys., 6.00%, 5/15/10..................... 1,717,110 1,000 Sarasota Cnty., Util. Sys. RB, 6.50%, 10/1/14, (FGIC)............. 1,149,350 3,590 Seacoast, Util. Auth. Wtr. & Swr. (Ser. A), RB, 5.50%, 3/1/18, (FGIC).............. 3,659,143 750 Tampa, Gtd. Entitlement RB, 7.05%, 10/1/07, (AMBAC)............ 849,255 540 University Community, Hosp. Inc. RB, Prerefunded @ $102 7.50%, 9/1/11, (FSA)............... 623,587
15 EVERGREEN FLORIDA MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Florida)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- CONTINUED $850 Winter Haven, Hsg. Auth. (Ser. C), RB, (Abbey Lane Apts.) 7.00%, 7/1/12, (FNMA).............. $ 905,038 1,750 Winter Haven Hsg. Auth. (Ser. C), RB, (Abbey Lane Apts.) 7.00%, 7/1/24, (FNMA).............. 1,836,415 TOTAL LONG-TERM MUNICIPAL SECURITIES (COST $136,275,876)........... 147,642,499
SHARES (000) MUTUAL FUND SHARES -- 4.7% 7,578 Lehman Municipal Money Market Fund (COST $7,578,000)............... 7,578,000 TOTAL INVESTMENTS (COST $143,853,876)........ 96.8% 155,220,499 OTHER ASSETS AND LIABILITIES -- NET......... 3.2 5,102,415 NET ASSETS.................... 100.0% $160,322,914
Summary of Abbreviations: AMBAC -- American Municipal Bond Assurance Corporation FGIC -- Financial Guaranty Insurance Company FNMA -- Federal National Mortgage Association FSA -- Financial Security Assurance GNMA -- Government National Mortgage Association GO -- General Obligation Bond IDR -- Industrial Development Revenue Bond LOC -- Letter of Credit MBIA -- Municipal Bond Investors Assurance PCR -- Pollution Control Revenue Bond RB -- Revenue Bond See accompanying notes to financial statements. 16 EVERGREEN FLORIDA MUNICIPAL BOND FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Florida)
ASSETS: Investments at value (identified cost $143,853,876)........................................................... $155,220,499 Cash.......................................................................................................... 241 Receivable for securities sold................................................................................ 5,828,615 Interest receivable........................................................................................... 2,804,423 Receivable for Fund shares sold............................................................................... 67,742 Prepaid expenses.............................................................................................. 11,472 Total assets............................................................................................ 163,932,992 LIABILITIES: Payable for securities purchased.............................................................................. 2,866,106 Dividends payable............................................................................................. 461,269 Payable for Fund shares redeemed.............................................................................. 178,801 Accrued expenses.............................................................................................. 39,440 Distribution fee payable...................................................................................... 35,928 Accrued advisory fee.......................................................................................... 28,534 Total liabilities....................................................................................... 3,610,078 NET ASSETS....................................................................................................... $160,322,914 NET ASSETS CONSIST OF: Paid-in capital............................................................................................... $149,129,959 Undistributed net investment income........................................................................... 106,659 Accumulated net realized loss on investment transactions...................................................... (280,327) Net unrealized appreciation of investments.................................................................... 11,366,623 Net assets.............................................................................................. $160,322,914 CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE: Class A Shares ($124,223,358 (division sign) 12,484,840 shares of beneficial interest outstanding)............ $ 9.95 Sales charge -- 4.75% of offering price....................................................................... .50 Maximum offering price.................................................................................. $ 10.45 Class B Shares ($29,499,068 (division sign) 2,965,083 shares of beneficial interest outstanding).............. $ 9.95 Class Y Shares ($6,600,488 (division sign) 663,372 shares of beneficial interest outstanding)................. $ 9.95
See accompanying notes to financial statements. 17 EVERGREEN FLORIDA MUNICIPAL BOND FUND STATEMENT OF OPERATIONS SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Florida)
INVESTMENT INCOME: Interest........................................................................................... $4,929,626 EXPENSES: Advisory fee....................................................................................... $406,765 Administrative personnel and service fees.......................................................... 43,116 Distribution fee -- Class A Shares................................................................. 150,004 Distribution fee -- Class B Shares................................................................. 106,170 Shareholder services fee -- Class B Shares......................................................... 35,390 Transfer agent fee................................................................................. 54,740 Custodian fee...................................................................................... 35,119 Registration and filing fees....................................................................... 28,654 Professional fees.................................................................................. 20,699 Reports and notices to shareholders................................................................ 13,587 Amortization of organizational expense............................................................. 8,235 Trustees' fees and expenses........................................................................ 2,606 Insurance expense.................................................................................. 2,080 Miscellaneous...................................................................................... 3,927 911,092 Less: Fee waivers and expense reimbursements....................................................... (278,822) Net expenses................................................................................. 632,270 Net investment income................................................................................. 4,297,356 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investment transactions....................................................... 1,103,058 Net change in unrealized appreciation of investments............................................... 2,347,535 Net gain on investments............................................................................ 3,450,593 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................................. $7,747,949
See accompanying notes to financial statements. 18 EVERGREEN FLORIDA MUNICIPAL BOND FUND STATEMENT OF CHANGES IN NET ASSETS (Drawing of the state of Florida)
SIX MONTHS ENDED FOUR MONTHS FEBRUARY 29, ENDED 1996 AUGUST 31, (UNAUDITED) 1995 INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income.................................................................... $ 4,297,356 $ 2,976,370 Net realized gain on investment transactions............................................. 1,103,058 865,584 Net change in unrealized appreciation of investments..................................... 2,347,535 2,620,594 Net increase in net assets resulting from operations.................................. 7,747,949 6,462,548 DISTRIBUTIONS TO SHAREHOLDERS: FROM NET INVESTMENT INCOME: Class A Shares........................................................................... (3,449,102) (2,733,700) Class B Shares........................................................................... (624,013) (211,396) Class Y Shares........................................................................... (140,244) (31,274) Total distributions from net investment income..................................... (4,213,359) (2,976,370) IN EXCESS OF NET INVESTMENT INCOME: Class A Shares........................................................................... -- (210,099) FROM NET REALIZED GAINS: Class A Shares........................................................................... -- (820,461) Total distributions to shareholders................................................... (4,213,359) (4,006,930) FUND SHARE TRANSACTIONS: Proceeds from shares sold................................................................ 10,630,686 4,227,591 Proceeds from shares issued in acquisition of First Union Florida Municipal Bond Portfolio...................................................... -- 38,045,323 Proceeds from reinvestment of distributions.............................................. 1,342,780 1,604,983 Payment for shares redeemed.............................................................. (22,587,313) (47,473,841) Net decrease resulting from Fund share transactions................................... (10,613,847) (3,595,944) Net decrease in net assets............................................................ (7,079,257) (1,140,326) NET ASSETS: Beginning of period...................................................................... 167,402,171 168,542,497 End of period (includes undistributed net investment income of $106,659 and $22,662, respectively).......................................................................... $ 160,322,914 $ 167,402,171
See accompanying notes to financial statements. 19 EVERGREEN FLORIDA MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS (Drawing of the state of Florida)
CLASS A SHARES SIX MONTHS ENDED FOUR MONTHS FEBRUARY 29, ENDED 1996 AUGUST 31, YEAR ENDED APRIL 30, (UNAUDITED) 1995*| 1995| 1994| 1993| PER SHARE DATA: Net asset value, beginning of period.................... $9.74 $9.61 $9.52 $9.95 $9.35 Income (loss) from investment operations: Net investment income................................. .27 .19 .54 .56 .56 Net realized and unrealized gain (loss) on investments......................................... .21 .22 .11 (.36) .67 Total from investment operations.................... .48 .41 .65 .20 1.23 Less distributions to shareholders from: Net investment income................................. (.27) (.19) (.54) (.56) (.56) In excess of net investment income.................... -- (.03) -- -- -- Net realized gain on investments...................... -- (.06) (.02) (.07) (.07) Paid-in capital....................................... -- -- -- -- -- Total distributions................................. (.27) (.28) (.56) (.63) (.63) Net asset value, end of period.......................... $9.95 $9.74 $9.61 $9.52 $9.95 TOTAL RETURN+........................................... 4.9% 4.2% 7.1% 1.9% 13.6% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)............... $124,223 $136,449 $168,542 $199,612 $198,286 Ratios to average net assets: Expenses.............................................. .61%++** .82%++** .61% .56% .58% Net investment income................................. 5.45%++** 4.89%++** 5.73% 5.37% 5.66% Portfolio turnover rate................................. 5% 29% 53% 32% 24%
1992| PER SHARE DATA: Net asset value, beginning of period.................... $9.21 Income (loss) from investment operations: Net investment income................................. .61 Net realized and unrealized gain (loss) on investments......................................... .22 Total from investment operations.................... .83 Less distributions to shareholders from: Net investment income................................. (.61) In excess of net investment income.................... -- Net realized gain on investments...................... (.04) Paid-in capital....................................... (.04) Total distributions................................. (.69) Net asset value, end of period.......................... $9.35 TOTAL RETURN+........................................... 9.3% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)............... $147,996 Ratios to average net assets: Expenses.............................................. .41%** Net investment income................................. 6.12%** Portfolio turnover rate................................. 24%
* The Fund changed its fiscal year end from April 30 to August 31. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. Initial sale charge is not reflected. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income to average net assets would have been the following:
CLASS A SHARES SIX MONTHS ENDED FOUR MONTHS FEBRUARY 29, ENDED YEAR ENDED 1996 AUGUST 31, APRIL 30, (UNAUDITED) 1995* 1992 Expenses............................................................ .79% 1.05% .68% Net investment income............................................... 5.27% 4.66% 5.85%
| On June 30, 1995, ABT Florida Tax-Free Fund sold its net assets to First Union Florida Municipal Bond Portfolio which was subsequently renamed Evergreen Florida Municipal Bond Fund. ABT Florida Tax-Free Fund was the accounting survivor in the combination. Accordingly, the information stated in the above table prior to the combination reflects the results of ABT Florida Tax-Free Fund. The net asset values per share and related per share data have been restated to reflect the conversion of shares. See accompanying notes to financial statements. 20 EVERGREEN FLORIDA MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS -- (CONTINUED) (Drawing of the state of Florida)
CLASS Y CLASS B SHARES SHARES SIX MONTHS SIX MONTHS ENDED JUNE 30, 1995* ENDED FEBRUARY 29, THROUGH FEBRUARY 29, 1996 AUGUST 31, 1996 (UNAUDITED) 1995#| (UNAUDITED) PER SHARE DATA: Net asset value, beginning of period................................. $9.74 $9.67 $9.74 Income from investment operations: Net investment income.............................................. .22 .07 .27 Net realized and unrealized gain on investments.................... .21 .10 .21 Total from investment operations................................. .43 .17 .48 Less distributions to shareholders from: Net investment income.............................................. (.22) (.07) (.27) In excess of net investment income................................. -- (.03) -- Total distributions.............................................. (.22) (.10) (.27) Net asset value, end of period....................................... $9.95 $9.74 $9.95 TOTAL RETURN+........................................................ 4.4% 1.5% 4.9% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)............................ $29,499 $27,351 $6,600 Ratios to average net assets: Expenses........................................................... 1.56%++ 1.44%++ .56%++ Net investment income.............................................. 4.50%++ 3.22%++ 5.49%++ Portfolio turnover rate.............................................. 5% 29% 5%
JUNE 30, 1995* THROUGH AUGUST 31, 1995#| PER SHARE DATA: Net asset value, beginning of period................................. $9.67 Income from investment operations: Net investment income.............................................. .09 Net realized and unrealized gain on investments.................... .10 Total from investment operations................................. .19 Less distributions to shareholders from: Net investment income.............................................. (.09) In excess of net investment income................................. (.03) Total distributions.............................................. (.12) Net asset value, end of period....................................... $9.74 TOTAL RETURN+........................................................ 1.7% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)............................ $3,602 Ratios to average net assets: Expenses........................................................... .59%++ Net investment income.............................................. 4.93%++ Portfolio turnover rate.............................................. 29%
# The Fund changed its fiscal year end from April 30 to August 31. * Commencement of class operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. Contingent deferred sales charges are not reflected. ++ Annualized. | On June 30, 1995, ABT Florida Tax-Free Fund sold its net assets to First Union Florida Municipal Bond Portfolio which was subsequently renamed Evergreen Florida Municipal Bond Fund. ABT Florida Tax-Free Fund was the accounting survivor in the combination. Accordingly, the information stated in the above table prior to the combination reflects the results of ABT Florida Tax-Free Fund. The net asset values per share and related per share data have been restated to reflect the conversion of shares. See accompanying notes to financial statements. 21 EVERGREEN GEORGIA MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Georgia)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- 98.6% GEORGIA -- 96.3% $ 500 Appling Cnty. Dev. Auth. PCR, 7.15%, 1/1/21, (MBIA)........................ $ 571,660 160 Atlanta, Arpt. Facs. RB, 7.25%, 1/1/17, (AMBAC)................ 177,152 1,750 Atlanta, Urban Res. Fin. Auth., Zero Coupon, 10/1/16, (FNMA).......... 506,835 500 Burke Cnty. Dev. Auth. PCR, 8.00%, 1/1/22, (MBIA)........................ 609,395 300 Butts Cnty. COP, 6.75%, 12/1/14, (MBIA)................ 340,263 350 Cartersville, Dev. Auth. RB, Wtr. & Waste Facs., 7.40%, 11/1/10........................ 422,867 120 Cartersville, GO, 6.70%, 1/1/12......................... 137,147 500 Cherokee Cnty. Wtr. & Swr. Auth. Ref. & Impt. RB, 5.50%, 8/1/18, (MBIA)................. 505,780 500 Clayton Cnty. Hsg. Auth. Mtg. RB, 7.125%, 12/1/25, (FHA/VA)............. 531,005 500 Columbia Cnty. Wtr. & Swr. RB, 6.25%, 6/1/12................................ 532,900 250 Crisp Cnty. Hosp. Auth. RANS, 5.45%, 7/1/15, (FSA)......................... 246,455 500 DeKalb Cnty. Hsg. Auth. RB, (The Lakes at Indian Creek Proj.) 7.15%, 1/1/25, (FSA).................. 528,130 500 DeKalb Cnty. School Dist. (Ser. A), GO 6.25%, 7/1/11......................... 552,180 345 Douglasville Cnty. Wtr. & Swr. Auth. RB, 5.625%, 6/1/15, (AMBAC)............... 353,356 500 Forsyth Cnty. School Dist. GO, 6.75%, 7/1/16................................ 582,660 $ 300 Fulton Cnty. Dev. Auth. RB, (Clark Atlanta Univ. Proj.) 5.375%, 1/1/20........................ $ 283,617 400 Fulton Cnty. Wtr. & Swr. RB, 6.375%, 1/1/14, (FGIC)........................ 444,268 500 George L. Smith ll, World Congress Ctr. Auth. RB, (Domed Stadium Proj.) 7.875%, 7/1/20........................ 553,745 400 Georgia State, Hsg. & Fin. Auth. (Ser. A), RB, 6.55%, 12/1/27, (FHA/VA).............. 407,532 400 Georgia State, Muni. Elec. Auth. Pwr. (Series EE), RB 7.25%, 1/1/24, (AMBAC)................ 503,176 500 Hall Cnty., Georgia School Dist. GO, 6.70%, 12/1/14........................ 563,830 330 Metro Atlanta Rapid Tran. Auth., Sales Tax RB, 7.00%, 7/1/11, (FGIC)................. 393,000 500 Putnam Cnty. School Dist. GO, 6.90%, 2/1/14, (AMBAC)....................... 572,165 500 Savannah, Eco. Dev. Auth. IDR, (Hershey Foods Corp. Proj.) 6.60%, 6/1/12......................... 546,280 500 Savannah, Hosp. Auth. RB, (St. Joseph's Hosp. Proj.) 6.125%, 7/1/12........................ 514,085 500 Savannah, Hosp. Auth. RB, (St. Joseph's Hosp. Proj.) 6.20%, 7/1/23......................... 500,300 300 Washington Cnty. School Dist. GO, 6.875%, 1/1/14, (AMBAC)............... 342,483 12,222,266
22 EVERGREEN GEORGIA MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Georgia)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- (CONTINUED) PUERTO RICO -- 2.3% $ 265 Puerto Rico Commonwealth, GO, 6.25%, 7/1/11, (MBIA)........................ $ 296,230 TOTAL LONG-TERM MUNICIPAL SECURITIES (COST $11,730,556)............... 12,518,496 SHARES MUTUAL FUND SHARES -- .5% 59,000 Lehman Municipal Money Market Fund (COST $59,000)............. 59,000 TOTAL INVESTMENTS (COST $11,789,556).......... 99.1% 12,577,496 OTHER ASSETS AND LIABILITIES-NET....... .9 115,011 NET ASSETS............... 100.0% $12,692,507
Summary of Abbreviations: AMBAC -- American Municipal Bond Assurance Corporation COP -- Certificates of Participation FGIC -- Financial Guaranty Insurance Company FHA/VA -- Federal Housing Authority/Veteran Administration FNMA -- Federal National Mortgage Association FSA -- Financial Security Assurance GO -- General Obligation Bond IDR -- Industrial Development Revenue Bond MBIA -- Municipal Bond Investors Assurance PCR -- Pollution Control Revenue Bond RANS -- Revenue Anticipation Notes RB -- Revenue Bond See accompanying notes to financial statements. 23 EVERGREEN GEORGIA MUNICIPAL BOND FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Georgia)
ASSETS: Investments at value (identified cost $11,789,556)............................................................. $12,577,496 Cash........................................................................................................... 515 Interest receivable............................................................................................ 138,894 Receivable for Fund shares sold................................................................................ 22,052 Prepaid expenses............................................................................................... 7,118 Total assets............................................................................................. 12,746,075 LIABILITIES: Accrued expenses............................................................................................... 30,575 Dividends payable.............................................................................................. 18,467 Distribution fee payable....................................................................................... 4,526 Total liabilities........................................................................................ 53,568 NET ASSETS........................................................................................................ $12,692,507 NET ASSETS CONSIST OF: Paid-in capital................................................................................................ $12,582,429 Undistributed net investment income............................................................................ 4,756 Accumulated net realized loss on investment transactions....................................................... (682,618) Net unrealized appreciation of investments..................................................................... 787,940 Net assets............................................................................................... $12,692,507 CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE: Class A Shares ($2,080,276 (division sign) 211,995 shares of beneficial interest outstanding).................. $ 9.81 Sales charge -- 4.75% of offering price........................................................................ .49 Maximum offering price................................................................................... $ 10.30 Class B Shares ($8,508,391 (division sign) 866,963 shares of beneficial interest outstanding).................. $ 9.81 Class Y Shares ($2,103,840 (division sign) 214,400 shares of beneficial interest outstanding).................. $ 9.81
See accompanying notes to financial statements. 24 EVERGREEN GEORGIA MUNICIPAL BOND FUND STATEMENT OF OPERATIONS FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Georgia)
INVESTMENT INCOME: Interest............................................................................................ $343,239 EXPENSES: Advisory fee........................................................................................ $29,470 Administrative personnel and services fees.......................................................... 3,161 Distribution fee -- Class A Shares.................................................................. 2,529 Distribution fee -- Class B Shares.................................................................. 29,788 Shareholder services fee -- Class B Shares.......................................................... 9,930 Transfer agent fee.................................................................................. 32,440 Registration and filing fees........................................................................ 31,591 Custodian fee....................................................................................... 29,129 Professional fees................................................................................... 12,716 Reports and notices to shareholders................................................................. 9,295 Amortization of organizational expense.............................................................. 2,704 Insurance expense................................................................................... 1,487 Miscellaneous....................................................................................... 4,332 198,572 Less: Fee waivers and expense reimbursements........................................................ (120,486) Net expenses.................................................................................. 78,086 Net investment income.................................................................................. 265,153 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investment transactions........................................................ 30,052 Net change in unrealized appreciation of investments................................................ 367,804 Net gain on investments................................................................................ 397,856 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................... $663,009
See accompanying notes to financial statements. 25 EVERGREEN GEORGIA MUNICIPAL BOND FUND STATEMENT OF CHANGES IN NET ASSETS (Drawing of the state of Georgia)
SIX MONTHS EIGHT ENDED MONTHS FEBRUARY 29, ENDED 1996 AUGUST 31, (UNAUDITED) 1995 INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income........................................................................ $ 265,153 $ 315,309 Net realized gain on investment transactions................................................. 30,052 178,194 Net change in unrealized appreciation of investments......................................... 367,804 571,056 Net increase in net assets resulting from operations...................................... 663,009 1,064,559 DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A Shares............................................................................... (50,033) (61,558) Class B Shares............................................................................... (166,566) (232,039) Class Y Shares............................................................................... (47,205) (21,712) Total distributions to shareholders....................................................... (263,804) (315,309) FUND SHARE TRANSACTIONS: Proceeds from shares sold.................................................................... 2,552,411 2,941,604 Proceeds from reinvestment of distributions.................................................. 164,000 212,632 Payment for shares redeemed.................................................................. (1,397,700) (1,511,506) Net increase resulting from Fund share transactions....................................... 1,318,711 1,642,730 Net increase in net assets................................................................ 1,717,916 2,391,980 NET ASSETS: Beginning of period.......................................................................... 10,974,591 8,582,611 End of period (includes undistributed net investment income of $4,756 and $3,407, respectively).............................................................................. $ 12,692,507 $10,974,591
See accompanying notes to financial statements. 26 EVERGREEN GEORGIA MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS
CLASS A SHARES CLASS B SHARES SIX MONTHS JULY 2, SIX MONTHS ENDED EIGHT MONTHS 1993* ENDED EIGHT MONTHS FEBRUARY 29, ENDED YEAR ENDED THROUGH FEBRUARY 29, ENDED YEAR ENDED 1996 AUGUST 31, DECEMBER 31, DECEMBER 31, 1996 AUGUST 31, DECEMBER 31, (UNAUDITED) 1995# 1994 1993 (UNAUDITED) 1995# 1994 PER SHARE DATA: Net asset value, beginning of period....................... $9.47 $8.74 $10.19 $10.00 $9.47 $8.74 $10.19 Income (loss) from investment operations: Net investment income........ .24 .33 .48 .20 .20 .28 .43 Net realized and unrealized gain (loss) on investments................ .34 .73 (1.45) .19 .34 .73 (1.45) Total from investment operations................. .58 1.06 (.97) .39 .54 1.01 (1.02) Less distributions to shareholders from net investment income............ (.24) (.33) (.48) (.20) (.20) (.28) (.43) Net asset value, end of period....................... $9.81 $9.47 $8.74 $10.19 $9.81 $9.47 $8.74 TOTAL RETURN+.................. 6.2% 12.3% (9.6%) 4.0% 5.8% 11.7% (10.2%) RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted).............. $2,080 $2,098 $1,387 $817 $8,508 $7,538 $6,912 Ratios to average net assets: Expenses **.................. .86%++ .71%++ .53% .25%++ 1.61%++ 1.46%++ 1.13% Net investment income **.................. 4.97%++ 5.39%++ 5.26% 4.71%++ 4.22%++ 4.64%++ 4.66% Portfolio turnover rate........ 8% 91% 147% 15% 8% 91% 147%
JULY 2, 1993* THROUGH DECEMBER 31, 1993 PER SHARE DATA: Net asset value, beginning of period....................... $10.00 Income (loss) from investment operations: Net investment income........ .18 Net realized and unrealized gain (loss) on investments................ .19 Total from investment operations................. .37 Less distributions to shareholders from net investment income............ (.18) Net asset value, end of period....................... $10.19 TOTAL RETURN+.................. 3.7% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted).............. $3,692 Ratios to average net assets: Expenses **.................. .75%++ Net investment income **.................. 4.15%++ Portfolio turnover rate........ 15%
# The Fund changed its fiscal year end from December 31 to August 31. * Commencement of class operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. Initial sales charge or contingent deferred sales charges are not reflected. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income to average net assets, exclusive of any applicable state expense limitations, would have been the following:
CLASS A SHARES CLASS B SHARES SIX MONTHS JULY 2, SIX MONTHS ENDED EIGHT MONTHS 1993* ENDED EIGHT MONTHS FEBRUARY 29, ENDED YEAR ENDED THROUGH FEBRUARY 29, ENDED YEAR ENDED 1996 AUGUST 31, DECEMBER 31, DECEMBER 31, 1996 AUGUST 31, DECEMBER 31, (UNAUDITED) 1995# 1994 1993 (UNAUDITED) 1995# 1994 Expenses........... 2.90% 2.83% 3.61% 6.82% 3.65% 3.58% 4.21% Net investment income (loss).... 2.93% 3.27% 2.18% (1.86%) 2.18% 2.52% 1.58%
JULY 2, 1993* THROUGH DECEMBER 31, 1993 Expenses........... 7.32% Net investment income (loss).... (2.42%)
See accompanying notes to financial statements. 27 EVERGREEN GEORGIA MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS -- (CONTINUED) (Drawing of the state of Georgia)
CLASS Y SHARES SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 29, ENDED 1996 AUGUST 31, (UNAUDITED) 1995# PER SHARE DATA: Net asset value, beginning of period..................................................... $9.47 $8.74 Income (loss) from investment operations: Net investment income.................................................................. .25 .35 Net realized and unrealized gain (loss) on investments................................. .34 .73 Total from investment operations....................................................... .59 1.08 Less distributions to shareholders from net investment income............................ (.25) (.35) Net asset value, end of period........................................................... $9.81 $9.47 TOTAL RETURN+............................................................................ 6.3% 12.5% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)................................................ $2,104 $1,339 Ratios to average net assets: Expenses **............................................................................ .61%++ .46%++ Net investment income **............................................................... 5.21%++ 5.64%++ Portfolio turnover rate.................................................................. 8% 91%
FEBRUARY 28, 1994* THROUGH DECEMBER 31, 1994 PER SHARE DATA: Net asset value, beginning of period..................................................... $ 9.83 Income (loss) from investment operations: Net investment income.................................................................. .42 Net realized and unrealized gain (loss) on investments................................. (1.09) Total from investment operations....................................................... (.67) Less distributions to shareholders from net investment income............................ (.42) Net asset value, end of period........................................................... $ 8.74 TOTAL RETURN+............................................................................ (6.9%) RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)................................................ $284 Ratios to average net assets: Expenses **............................................................................ .31%++ Net investment income **............................................................... 5.68%++ Portfolio turnover rate.................................................................. 147%
# The Fund changed its fiscal year end from December 31 to August 31. * Commencement of class operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income to average net assets, exclusive of any applicable state expense limitations, would have been the following:
CLASS Y SHARES SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 28, FEBRUARY 29, ENDED 1994* THROUGH 1996 AUGUST 31, DECEMBER 31, (UNAUDITED) 1995# 1994 Expenses.......................................................................... 2.65% 2.58% 3.39% Net investment income............................................................. 3.17% 3.52% 2.60%
See accompanying notes to financial statements. 28 EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of North Carolina)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- 101.1% NORTH CAROLINA -- 94.8% $1,410 Burlington, Hsg. Auth. Mtg. RB Burlington Homes (Sec 8-A), 6.00%, 8/1/09......................... $ 1,422,338 1,000 Chapel Hill, Parking Fac. COP, 6.35%, 12/1/18........................ 1,060,310 1,480 Charlotte, Hsg. Dev. Corp. Mtg. RB (Vantage 78 Apts), 6.60%, 7/15/21........................ 1,510,873 1,000 Concord, Util. Sys. RB, 5.50%, 12/1/14 (MBIA)................. 1,002,480 2,390 Cumberland Cnty., Civic Center Proj. (Ser. A), COP, 6.40%, 12/1/24 (AMBAC)................ 2,580,794 1,390 Durham, GO, 5.10%, 2/1/14......................... 1,353,318 2,000 Forsyth Cnty. GO, 4.75%, 2/1/13......................... 1,882,280 955 Fremont, Hsg. Dev. Corp. First Lien RB, (Torhunta Apts.) 6.75%, 7/15/22, (FHA)................. 982,790 1,000 Gastonia, Combined Util. Sys. RB, 6.00%, 5/1/14, (MBIA)................. 1,042,430 3,000 Greensboro, Enterprise Sys. (Ser. A) RB, 5.30%, 6/1/15, (MBIA)................. 2,894,490 1,000 Harnett Cnty. COP, 6.40%, 12/1/14, (AMBAC)............... 1,090,280 1,000 Haywood Cnty., Indl. Facs. & Poll. Control Fing. Auth., Champion Intl. Corp. Proj. RB, 6.25%, 9/1/25......................... 1,029,770 1,000 Haywood Cnty., Indl. Facs. & Poll. Control Fing. Auth., Champion Intl. Corp. Proj. RB, (Ser. A), 5.75%, 12/1/25........................ 970,800 4,750 Martin Cnty., Indl. Facs. & Poll. Control Fing. Auth., (Solid Waste Weyerhaeuser Co.) RB, 6.80%, 5/1/24......................... 5,125,772 PRINCIPAL AMOUNT (000) VALUE $ 360 Monroe, Combined Enterprise Sys. RB, 6.00%, 3/1/14......................... $ 373,147 4,000 North Carolina Eastn. Muni., Pwr. Sys. Agy. (Ser. A), RB, 5.00%, 1/1/21......................... 3,803,280 2,500 North Carolina Eastn. Muni., Pwr. Sys. Agy, Elec. RRB, (Ser. C), RB, 6.00%, 1/1/18, (AMBAC)................ 2,677,425 2,500 North Carolina Eastn. Muni., Pwr. Sys. Agy. (Ser. B) RB, 6.00%, 1/1/22......................... 2,539,375 3,750 North Carolina Eastn. Muni., Pwr. Sys. Agy. (Ser. A), RB, 6.50%, 1/1/18 (ETM)................... 4,067,475 1,300 North Carolina Eastn Muni., Pwr. Sys. Agy. (Ser. A) RB, 7.00%, 1/1/24......................... 1,360,099 2,200 North Carolina, GO, 4.75%, 2/1/12......................... 2,093,608 2,000 North Carolina, Ed. Fac. Fin. Agy. (Ser. B), RB, 5.00%, 10/1/17........................ 1,863,460 500 North Carolina, Med Care Comm. Hlth. Care Fac. RB, 6.875%, 10/1/09....................... 522,685 1,500 North Carolina, Med Care Comm. Hosp. RB, (Gaston Mem. Hosp. Proj.), 5.50%, 2/15/19........................ 1,466,685 2,000 North Carolina, Med Care Comm. Hosp. RB, (Rex Hosp. Proj.) 6.25%, 6/1/17......................... 2,128,340 3,000 North Carolina, Muni. Pwr. Agy.Catawba Elec. RB, 5.00%, 1/1/20......................... 2,855,400 1,000 North Carolina, Med Care Comm. Hosp. RB, (Alamance Health Ser. Inc.) 6.375%, 8/15/12....................... 1,079,260 500 North Carolina, Muni. Pwr. Agy. (Ser. B), RB Catawba Elec. 6.00%, 1/1/20......................... 496,815 2,000 North Carolina, Student Ed. Assist. Auth. (Ser. A), RB 6.30%, 7/1/15......................... 2,030,560
29 EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of North Carolina)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- CONTINUED $ 1,000 Onslow Cnty., Combined Enterprise Sys. RB, 6.00%, 6/1/15, (MBIA)................. $ 1,043,480 1,000 Pitt Cnty., Mem. Hosp. RB, 5.50%, 12/1/15........................ 990,400 1,500 Rowan Cnty., Justice Center Proj. COP, 6.25%, 12/1/07........................ 1,644,015 870 Shelby, Comb Enterprise Sys. (Ser. A), RB, 5.50%, 5/1/17......................... 854,984 1,500 Thomasville, Cityhall & Util. Impts. Projs. COP, 6.00%, 6/1/17, (FSA).................. 1,564,740 59,403,958 PUERTO RICO -- 6.3% 2,000 Puerto Rico, Commonwealth, GO 6.25%, 7/1/11, (MBIA)................. 2,235,700 600 Puerto Rico, Commonwealth, Hwy. & Tran. Auth. (Ser. W), RB, 5.50%, 7/1/15......................... 597,126 1,000 Puerto Rico, Univ. (Ser. N), RB, 6.25%, 06/1/17........................ 1,130,120 3,962,946 TOTAL LONG-TERM MUNICIPAL SECURITIES (COST $60,071,574).................. 63,366,904
SHARES VALUE MUTUAL FUND SHARES -- 0.0%* 13,000 Lehman Municipal Money Market Fund (COST $13,000)............... $ 13,000 TOTAL INVESTMENTS (COST $60,084,574)....... 101.1% 63,379,904 OTHER ASSETS AND LIABILITIES -- NET...... (1.1) (686,334) NET ASSETS................. 100.0% $62,693,570
Summary of Abbreviations: AMBAC -- American Municipal Bond Assurance Corporation COP -- Certificates of Participation ETM -- Escrowed to Maturity FHA -- Federal Housing Authority GO -- General Obligation Bond MBIA -- Municipal Bond Investors Assurance RB -- Revenue Bond RRB -- Revenue Refunding Bond *Less than one-tenth of a percent. See accompanying notes to financial statements. 30 EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of North Carolina)
ASSETS: Investments at value (identified cost $60,084,574)............................................................. $63,379,904 Cash........................................................................................................... 319 Interest receivable............................................................................................ 780,821 Receivable for securities sold................................................................................. 505,641 Receivable for Fund shares sold................................................................................ 201,931 Prepaid expenses............................................................................................... 19,628 Total assets............................................................................................. 64,888,244 LIABILITIES: Payable for securities purchased............................................................................... 1,936,300 Accrued expenses............................................................................................... 78,715 Dividends payable.............................................................................................. 68,839 Payable for Fund shares redeemed............................................................................... 54,228 Distribution fee payable....................................................................................... 47,277 Accrued advisory fee........................................................................................... 9,315 Total liabilities........................................................................................ 2,194,674 NET ASSETS........................................................................................................ $62,693,570 NET ASSETS CONSIST OF: Paid-in capital................................................................................................ $62,642,494 Undistributed net investment income............................................................................ 83,986 Accumulated net realized loss on investment transactions....................................................... (3,328,240) Net unrealized appreciation of investments..................................................................... 3,295,330 Net assets............................................................................................... $62,693,570 CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE: Class A Shares ($8,635,514 (division sign) 834,607 shares of beneficial interest outstanding).................. $ 10.35 Sales charge -- 4.75% of offering price........................................................................ .52 Maximum offering price................................................................................... $ 10.87 Class B Shares ($51,147,600 (division sign) 4,943,382 shares of beneficial interest outstanding)............... $ 10.35 Class Y Shares ($2,910,456 (division sign) 281,251 shares of beneficial interest outstanding).................. $ 10.35
See accompanying notes to financial statements. 31 EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND STATEMENT OF OPERATIONS SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of North Carolina)
INVESTMENT INCOME: Interest.......................................................................................... $1,770,333 EXPENSES: Advisory fee...................................................................................... $ 152,346 Administrative personnel and service fees......................................................... 16,354 Distribution fee -- Class A Shares................................................................ 10,439 Distribution fee -- Class B Shares................................................................ 188,550 Shareholder services fee -- Class B Shares........................................................ 62,850 Reports and notices to shareholders............................................................... 59,719 Custodian fee..................................................................................... 39,682 Professional fees................................................................................. 24,781 Transfer agent fee................................................................................ 21,784 Registration and filing fees...................................................................... 16,462 Amortization of organizational expense............................................................ 2,229 Trustees' fees and expenses....................................................................... 1,519 Insurance expense................................................................................. 640 Miscellaneous..................................................................................... 23,832 621,187 Less: Fee waivers................................................................................. (127,619) Net expenses................................................................................... 493,568 Net investment income................................................................................ 1,276,765 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investment transactions...................................................... 966,932 Net change in unrealized appreciation of investments.............................................. 1,356,326 Net gain on investments.............................................................................. 2,323,258 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................. $3,600,023
See accompanying notes to financial statements. 32 EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND STATEMENT OF CHANGES IN NET ASSETS (Drawing of the state of North Carolina)
SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 29, ENDED 1996 AUGUST 31, (UNAUDITED) 1995 INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income........................................................................ $ 1,276,765 $ 1,697,080 Net realized gain on investment transactions................................................. 966,932 668,311 Net change in unrealized appreciation of investments......................................... 1,356,326 3,902,872 Net increase in net assets resulting from operations...................................... 3,600,023 6,268,263 DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A Shares............................................................................... (195,816) (279,937) Class B Shares............................................................................... (990,325) (1,389,260) Class Y Shares............................................................................... (56,773) (27,883) Total distributions to shareholders....................................................... (1,242,914) (1,697,080) FUND SHARE TRANSACTIONS: Proceeds from shares sold.................................................................... 6,043,557 6,832,112 Proceeds from reinvestment of distributions.................................................. 864,638 1,191,861 Payment for shares redeemed.................................................................. (4,896,232) (7,507,588) Net increase resulting from Fund share transactions....................................... 2,011,963 516,385 Net increase in net assets................................................................ 4,369,072 5,087,568 NET ASSETS: Beginning of period.......................................................................... 58,324,498 53,236,930 End of period (includes undistributed net investment income of $83,986 and $50,135, respectively).............................................................................. $ 62,693,570 $ 58,324,498
See accompanying notes to financial statements. 33 EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS (Drawing of the state of North Carolina)
CLASS A SHARES SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 29, ENDED YEAR ENDED 1996 AUGUST 31, DECEMBER 31, (UNAUDITED) 1995# 1994 PER SHARE DATA: Net asset value, beginning of period...................................... $9.95 $9.16 $10.61 Income (loss) from investment operations: Net investment income................................................... .25 .33 .49 Net realized and unrealized gain (loss) on investments.................. .39 .79 (1.45) Total from investment operations........................................ .64 1.12 (.96) Less distributions to shareholders from: Net investment income................................................... (.24) (.33) (.49) Net realized gain on investments........................................ -- -- -- Total distributions..................................................... (.24) (.33) (.49) Net asset value, end of period............................................ $10.35 $9.95 $9.16 TOTAL RETURN+............................................................. 6.5% 12.3% (9.1%) RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)................................. $8,636 $8,279 $7,979 Ratios to average net assets: Expenses **............................................................. 1.01%++ .92%++ .79% Net investment income **................................................ 4.80%++ 5.09%++ 5.11% Portfolio turnover rate................................................... 45% 117% 126%
JANUARY 11, 1993* THROUGH DECEMBER 31, 1993 PER SHARE DATA: Net asset value, beginning of period...................................... $10.00 Income (loss) from investment operations: Net investment income................................................... .46 Net realized and unrealized gain (loss) on investments.................. .64 Total from investment operations........................................ 1.10 Less distributions to shareholders from: Net investment income................................................... (.46) Net realized gain on investments........................................ (.03) Total distributions..................................................... (.49) Net asset value, end of period............................................ $10.61 TOTAL RETURN+............................................................. 11.3% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)................................. $12,739 Ratios to average net assets: Expenses **............................................................. .32%++ Net investment income **................................................ 4.91%++ Portfolio turnover rate................................................... 57%
# The Fund changed its fiscal year end from December 31 to August 31. * Commencement of class operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. Initial sales charge or contingent deferred sales charges are not reflected. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income to average net assets would have been the following:
CLASS A SHARES SIX MONTHS ENDED EIGHT MONTHS JANUARY 11, FEBRUARY 29, ENDED YEAR ENDED 1993* THROUGH 1996 AUGUST 31, DECEMBER 31, DECEMBER 31, (UNAUDITED) 1995# 1994 1993 Expenses............................................. 1.43% 1.27% 1.18% 1.25% Net investment income................................ 4.38% 4.74% 4.72% 3.98%
See accompanying notes to financial statements. 34 EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS -- (CONTINUED) (Drawing of the state of North Carolina)
CLASS B SHARES CLASS Y SHARES SIX MONTHS SIX MONTHS ENDED EIGHT MONTHS JANUARY 11, ENDED EIGHT MONTHS FEBRUARY 29, ENDED YEAR ENDED 1993* THROUGH FEBRUARY 29, ENDED 1996 AUGUST 31, DECEMBER 31, DECEMBER 31, 1996 AUGUST 31, (UNAUDITED) 1995# 1994 1993 (UNAUDITED) 1995# PER SHARE DATA: Net asset value, beginning of period........ $9.95 $9.16 $10.61 $10.00 $9.95 $9.16 Income (loss) from investment operations: Net investment income..................... .21 .28 .44 .42 .25 .35 Net realized and unrealized gain (loss) on investments............................. .39 .79 (1.45) .64 .40 .79 Total from investment operations.......... .60 1.07 (1.01) 1.06 .65 1.14 Less distributions to shareholders from: Net investment income..................... (.20) (.28) (.44) (.42) (.25) (.35) Net realized gain on investments.......... -- -- -- (.03) -- -- Total distributions....................... (.20) (.28) (.44) (.45) (.25) (.35) Net asset value, end of period.............. $10.35 $9.95 $9.16 $10.61 $10.35 $9.95 TOTAL RETURN+............................... 6.1% 11.8% (9.6%) 10.8% 6.6% 12.5% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)... $51,148 $49,040 $44,616 $45,168 $2,910 $1,006 Ratios to average net assets: Expenses **............................... 1.76%++ 1.67%++ 1.37% .79%++ .76%++ .67%++ Net investment income **.................. 4.05%++ 4.34%++ 4.53% 4.47%++ 5.03%++ 5.34%++ Portfolio turnover rate..................... 45% 117% 126% 57% 45% 117%
FEBRUARY 28, 1994* THROUGH DECEMBER 31, 1994 PER SHARE DATA: Net asset value, beginning of period........ $10.31 Income (loss) from investment operations: Net investment income..................... .43 Net realized and unrealized gain (loss) on investments............................. (1.15) Total from investment operations.......... (.72) Less distributions to shareholders from: Net investment income..................... (.43) Net realized gain on investments.......... -- Total distributions....................... (.43) Net asset value, end of period.............. $9.16 TOTAL RETURN+............................... (7.0%) RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)... $642 Ratios to average net assets: Expenses **............................... .59%++ Net investment income **.................. 5.58%++ Portfolio turnover rate..................... 126%
# The Fund changed its fiscal year end from December 31 to August 31. * Commencement of class operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. Contingent deferred sales charges are not reflected. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income to average net assets would have been the following:
CLASS B SHARES CLASS Y SHARES SIX MONTHS SIX MONTHS ENDED EIGHT MONTHS JANUARY 11, ENDED EIGHT MONTHS FEBRUARY 28, FEBRUARY 29, ENDED YEAR ENDED 1993* THROUGH FEBRUARY 29, ENDED 1994* THROUGH 1996 AUGUST 31, DECEMBER 31, DECEMBER 31, 1996 AUGUST 31, DECEMBER 31, (UNAUDITED) 1995# 1994 1993 (UNAUDITED) 1995# 1994 Expenses................................ 2.18% 2.02% 1.76% 1.74% 1.17% 1.02% .98% Net investment income................... 3.63% 3.99% 4.14% 3.52% 4.63% 4.99% 5.19%
See accompanying notes to financial statements. 35 EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of South Carolina)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- 94.6% SOUTH CAROLINA -- 93.4% $ 540 Aiken Cnty., (Beloit Corp. Proj.), RB, 6.00%, 12/1/11......................... $ 549,601 100 Barnwell Cnty., School Dist. #45, GO, 5.50%, 2/1/11, (AMBAC)................. 101,059 200 Bennettsville, Combined Util. Sys. (Ser. B), RB, 6.00%, 7/1/09, (MBIA).................. 213,810 300 Charleston Cnty., Health Facs. RB, First Mtg. Episcopal Church, 7.125%, 4/1/20......................... 307,500 250 Charleston Cnty., Wtr. & Swr. Fac. RB, 6.00%, 1/1/18.......................... 257,530 200 Citadel Military College, Student & Faculty Hsg. RB, 5.50%, 10/1/14,........................ 199,758 100 Coastal Carolina Univ. RB, 6.80%, 6/1/19, (MBIA).................. 112,720 100 Colleton Cnty. GO, 5.60%, 3/1/09.......................... 100,227 100 Columbia, Wtr. & Swr. Sys. RB, 5.70%, 2/1/10.......................... 105,413 500 Darlington Cnty., (Nucor Corp. Proj.), (Ser. A), RB, 5.75%, 8/1/23.......................... 491,510 200 Georgetown Cnty., Wtr. & Swr. Dist. RB, 6.50%, 6/1/17.......................... 204,136 250 Laurens, Pub. Util. Sys. RB, 5.00, 1/1/18, (FGIC)................... 231,510 300 Marion Cnty., Hosp. Dist. RB, 5.50%, 11/1/10......................... 294,648 650 Marion Cnty., Hosp. Dist. RB, 5.50%, 11/1/15......................... 638,456 100 Medical Univ., Hosp. Facs. (Ser. A), RB, 7.00%, 7/1/01.......................... 111,018 200 Oconee Cnty., School Dist. RB, 5.10%, 9/1/12.......................... 193,076 350 Piedmont, Pwr. Agy. Elec. RB, 5.50%, 1/1/12.......................... 362,996 PRINCIPAL AMOUNT (000) VALUE $ 100 Piedmont, Pwr. Agy. Elec. RB, 6.05%, 1/1/04.......................... $ 102,226 350 Richland Cnty., Solid Waste Disp. Facs. (Ser. A), RB, (Union Camp Corp. Proj.) 6.75%, 5/1/22.......................... 370,311 300 South Carolina Jobs, Eco. Dev. Auth. Hosp. Facs. RB, (Anderson Area Med. Center Inc.), 5.25%, 2/1/15.......................... 286,146 200 South Carolina Jobs, Eco. Dev. Auth. Hosp. Facs. RB, (Oconee Mem. Hosp.) 6.15%, 3/1/15,......................... 209,784 200 South Carolina Jobs, Eco. Dev. Auth. Hosp. Facs. (Ser. A), (Tuomey Regl. Med. Center), 5.75%, 11/1/15......................... 201,674 250 South Carolina State, Ed. Assist. Auth. RB, 5.875%, 9/1/07......................... 258,412 100 South Carolina State, Hsg. Fin. & Dev. Auth. (Ser. A), RB, 6.80%, 11/15/11.................... 105,579 100 South Carolina State, Hsg. Fin. & Dev. Auth. Mtg. (Ser. A) RB, 6.55%, 7/1/15.......................... 102,931 595 South Carolina State, Hsg. Fin. & Dev. Auth. Mtg. RB, (Heritage Crt. Apts.) 6.15%, 7/1/25.......................... 601,503 200 South Carolina State, Hsg. Fin. & Dev. Auth. (Ser. A), RB, (Homeownership Mtg.) 7.55%, 7/1/11.......................... 211,850 265 South Carolina State, Hsg Fin & Dev. Auth. RB, (Hunting Ridge Apts.) 6.75%, 6/1/25.......................... 269,993 300 South Carolina State, Hsg. Fin. & Dev. Auth. RB, (Runaway Bay Apts.), 6.125%, 12/1/15........................ 296,748 200 South Carolina State, Pub. Service Auth. (Ser. C), RB, 5.125%, 1/1/21......................... 185,304
36 EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of South Carolina)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- (CONTINUED) $ 500 York Cnty., Indl. RB, (Exempt Fac. Hoechst Celanese), 5.70%, 1/1/24.......................... $ 482,395 8,159,824 PUERTO RICO -- 1.2% 100 Puerto Rico, Commonwealth GO, 5.65%, 7/1/15.......................... 104,071 TOTAL LONG-TERM MUNICIPAL SECURITIES (COST $7,979,672)................. 8,263,895
SHARES MUTUAL FUND SHARES -- 3.7% 315,000 Lehman Municipal Money Market Fund.......................... 315,000 12,000 Lehman Tax Free Money Market Fund.......................... 12,000 TOTAL MUTUAL FUND SHARES (COST $327,000).......... 327,000 TOTAL INVESTMENTS (COST $8,306,672)........ 98.3% 8,590,895 OTHER ASSETS AND LIABILITIES -- NET....... 1.7% 145,208 NET ASSETS.................. 100.0% $8,736,103
Summary of abbreviations: AMBAC -- American Municipal Bond Assurance Corp. FGIC -- Financial Guaranty Insurance Co. GO -- General Obligation IDR -- Industrial Development Revenue MBIA -- Municipal Bond Investors Assurance RB -- Revenue Bond See accompanying notes to financial statements. 37 EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of South Carolina)
ASSETS: Investments at value (identified cost $8,306,672)................................................................ $8,590,895 Cash............................................................................................................. 336 Interest receivable.............................................................................................. 122,374 Receivable for Fund shares sold.................................................................................. 47,751 Prepaid expenses................................................................................................. 12,511 Total assets............................................................................................... 8,773,867 LIABILITIES: Accrued expenses................................................................................................. 22,413 Dividends payable................................................................................................ 11,543 Distribution fee payable......................................................................................... 3,808 Total liabilities.......................................................................................... 37,764 NET ASSETS.......................................................................................................... $8,736,103 NET ASSETS CONSIST OF: Paid-in capital.................................................................................................. $8,435,312 Undistributed net investment income.............................................................................. 1,111 Accumulated net realized gain on investment transactions......................................................... 15,457 Net unrealized appreciation of investments....................................................................... 284,223 Net assets................................................................................................. $8,736,103 CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE: Class A Shares ($833,607 (division sign) 84,426 shares of beneficial interest outstanding)....................... $ 9.87 Sales charge -- 4.75% of offering price.......................................................................... .49 Maximum offering price..................................................................................... $ 10.36 Class B Shares ($4,018,780 (division sign) 406,968 shares of beneficial interest outstanding).................... $ 9.87 Class Y Shares ($3,883,716 (division sign) 393,290 shares of beneficial interest outstanding).................... $ 9.87
See accompanying notes to financial statements. 38 EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND STATEMENT OF OPERATIONS SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of South Carolina)
INVESTMENT INCOME: Interest............................................................................................ $208,671 EXPENSES: Advisory fee........................................................................................ $ 17,961 Administrative personnel and service fees........................................................... 1,896 Distribution fee -- Class A Shares.................................................................. 892 Distribution fee -- Class B Shares.................................................................. 14,265 Shareholder services fee -- Class B Shares.......................................................... 4,755 Custodian fee....................................................................................... 36,865 Transfer agent fee.................................................................................. 29,138 Professional fees................................................................................... 13,743 Reports and notices to shareholders................................................................. 11,076 Registration and filing fees........................................................................ 10,676 Amortization of organizational expense.............................................................. 10,363 Insurance expense................................................................................... 1,233 Trustees' fees and expenses......................................................................... 242 Miscellaneous....................................................................................... 5,966 159,071 Less: Fee waivers and expense reimbursements........................................................ (118,818) Net expenses.................................................................................. 40,253 Net investment income.................................................................................. 168,418 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investment transactions........................................................ 20,705 Net change in unrealized appreciation of investments................................................ 173,743 Net gain on investments................................................................................ 194,448 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................... $362,866
See accompanying notes to financial statements. 39 EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND STATEMENT OF CHANGES IN NET ASSETS (Drawing of the state of South Carolina)
SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 29, ENDED 1996 AUGUST 31, (UNAUDITED) 1995 INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income.................................................................. $ 168,418 $ 128,517 Net realized gain on investment transactions........................................... 20,705 29,060 Net change in unrealized appreciation of investments................................... 173,743 330,261 Net increase in net assets resulting from operations................................ 362,866 487,838 DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A Shares......................................................................... (17,791) (17,293) Class B Shares......................................................................... (80,668) (94,373) Class Y Shares......................................................................... (69,747) (16,851) Total distributions to shareholders................................................. (168,206) (128,517) FUND SHARE TRANSACTIONS: Proceeds from shares sold.............................................................. 2,956,856 2,853,928 Proceeds from reinvestment of distributions............................................ 107,886 83,256 Payment for shares redeemed............................................................ (348,391) (332,153) Net increase resulting from Fund share transactions.............................. 2,716,351 2,605,031 Net increase in net assets....................................................... 2,911,011 2,964,352 NET ASSETS: Beginning of period.................................................................... 5,825,092 2,860,740 End of period (includes undistributed net investment income of $1,111 and $899, respectively)........................................................................ $ 8,736,103 $ 5,825,092
See accompanying notes to financial statements. 40 EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS (Drawing of the state of South Carolina)
CLASS A SHARES CLASS B SHARES SIX MONTHS SIX MONTHS ENDED EIGHT MONTHS JANUARY 3, ENDED EIGHT MONTHS FEBRUARY 29, ENDED 1994* THROUGH FEBRUARY 29, ENDED 1996 AUGUST 31, DECEMBER 31, 1996 AUGUST 31, (UNAUDITED) 1995# 1994 (UNAUDITED) 1995# PER SHARE DATA: Net asset value, beginning of period...................... $ 9.59 $ 8.62 $ 10.00 $ 9.59 $ 8.62 Income (loss) from investment operations: Net investment income................................... .24 .34 .46 .21 .29 Net realized and unrealized gain (loss) on investments........................................... .28 .97 (1.38) .28 .97 Total from investment operations.......................................... .52 1.31 (.92) .49 1.26 Less distributions to shareholders from net investment income.................................................. (.24) (.34) (.46) (.21) (.29) Net asset value, end of period............................ $ 9.87 $ 9.59 $ 8.62 $ 9.87 $ 9.59 TOTAL RETURN+............................................. 5.5% 15.4% (9.3%) 5.1% 14.8% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)................. $834 $610 $312 $4,019 $3,542 Ratios to average net assets: Expenses**.............................................. .82%++ .53%++ .25%++ 1.56%++ 1.28%++ Net investment income**................................. 4.99%++ 5.41%++ 5.57%++ 4.25%++ 4.66%++ Portfolio turnover rate................................... 25% 66% 23% 25% 66%
JANUARY 3, 1994* THROUGH DECEMBER 31, 1994 PER SHARE DATA: Net asset value, beginning of period...................... $ 10.00 Income (loss) from investment operations: Net investment income................................... .41 Net realized and unrealized gain (loss) on investments........................................... (1.38) Total from investment operations.......................................... (.97) Less distributions to shareholders from net investment income.................................................. (.41) Net asset value, end of period............................ $ 8.62 TOTAL RETURN+............................................. (9.8%) RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)................. $ 2,456 Ratios to average net assets: Expenses**.............................................. .87%++ Net investment income**................................. 4.88%++ Portfolio turnover rate................................... 23%
# The Fund changed its fiscal year end from December 31 to August 31. * Commencement of class operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. Initial sales charge or contingent deferred sales charges are not reflected. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income (loss) to average net assets, exclusive of any applicable state expense limitations, would have been the following:
CLASS A SHARES CLASS B SHARES SIX MONTHS SIX MONTHS ENDED EIGHT MONTHS JANUARY 3, ENDED EIGHT MONTHS JANUARY 3, FEBRUARY 29, ENDED 1994* THROUGH FEBRUARY 29, ENDED 1994* THROUGH 1996 AUGUST 31, DECEMBER 31, 1996 AUGUST 31, DECEMBER 31, (UNAUDITED) 1995# 1994 (UNAUDITED) 1995# 1994 Expenses.................................... 4.12% 6.50% 10.71% 4.87% 7.25% 11.33% Net investment income (loss)................ 1.69% (.56%) (4.89%) .94% (1.31%) (5.58%)
See accompanying notes to financial statements. 41 EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS -- (CONTINUED) (Drawing of the state of South Carolina)
CLASS Y SHARES SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 29, 1996 ENDED (UNAUDITED) AUGUST 31, 1995# PER SHARE DATA: Net asset value, beginning of period........................................ $ 9.59 $ 8.62 Income (loss) from investment operations: Net investment income..................................................... .26 .35 Net realized and unrealized gain (loss) on investments.................... .28 .97 Total from investment operations........................................ .54 1.32 Less distributions to shareholders from net investment income............... (.26) (.35) Net asset value, end of period.............................................. $ 9.87 $ 9.59 TOTAL RETURN+............................................................... 5.6% 15.5% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)................................... $ 3,884 $1,673 Ratios to average net assets: Expenses**................................................................ .57%++ .28%++ Net investment income**................................................... 5.24%++ 5.66%++ Portfolio turnover rate..................................................... 25% 66%
FEBRUARY 28, 1994* THROUGH DECEMBER 31, 1994 PER SHARE DATA: Net asset value, beginning of period........................................ $ 9.74 Income (loss) from investment operations: Net investment income..................................................... .43 Net realized and unrealized gain (loss) on investments.................... (1.12) Total from investment operations........................................ (.69) Less distributions to shareholders from net investment income............... (.43) Net asset value, end of period.............................................. $ 8.62 TOTAL RETURN+............................................................... (7.1%) RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)................................... $92 Ratios to average net assets: Expenses**................................................................ .00%++ Net investment income**................................................... 5.92%++ Portfolio turnover rate..................................................... 23%
# The Fund changed its fiscal year end from December 31 to August 31. * Commencement of class operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income (loss) to average net assets, exclusive of any applicable state expense limitations, would have been the following:
CLASS Y SHARES SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 28, FEBRUARY 29, 1996 ENDED 1994* THROUGH (UNAUDITED) AUGUST 31, 1995# DECEMBER 31, 1994 Expenses...................................... 3.88%++ 6.25%++ 10.46%++ Net investment income (loss).................. 1.93%++ (.31%)++ (4.54%)++
See accompanying notes to financial statements. 42 EVERGREEN VIRGINIA MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Virginia)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- 93.7% VIRGINIA -- 84.4% $ 100 Albemarle Cnty. Res. Care Fac. IDA, 6.45%, 7/1/15......................... $ 100,748 145 Albemarle Cnty. Res. Care Fac. IDA, 6.625%, 7/1/21........................ 146,132 475 Alexandria, IDA, PCR, Potomac Elec. Proj., 5.375%, 2/15/24 (MBIA)................ 456,736 100 Arlington Cnty., Hosp. Fac. IDA, 5.30%, 9/1/15......................... 94,988 250 Charlottesville Albermarle, Arpt. Auth. RB, 6.125%, 12/1/13....................... 252,095 250 Fairfax Cnty. Inova Health Sys. Proj. IDA, 5.25%, 8/15/19........................ 232,485 200 Fairfax Cnty. Redev. & Hsg. Auth. RB, Multi-Family Hsg. 6.625%, 9/20/20, (GNMA)............... 208,182 700 Fairfax Cnty. Wtr. Auth. RB, 6.00%, 4/1/22......................... 726,348 500 Hanover Cnty. Mem. Regl. Med. Ctr. Proj. IDA 6.375%, 8/15/18, (MBIA)............... 556,705 400 Henrico Cnty. Pub. Fac. Lease IDA, 7.00%, 8/1/13......................... 457,684 350 Isle Wright Cnty. Solid Waste Disp. Facs. IDA, 6.55%, 4/1/24......................... 367,360 250 Prince William Cnty. Park Auth. RB, 6.875%, 10/15/16...................... 273,935 300 Prince William Cnty. Potomac Hosp. Corp. IDA, 6.75%, 10/1/15........................ 327,438 400 Riverside, Regl. Jail Auth. Fac. RB, 6.00%, 7/1/25, (MBIA)................. 417,360 500 Upper Occoquan, Swr. Auth. (Ser. A), RB, 5.15%, 7/1/20, (MBIA)................. 477,930 95 Virginia, Gtd. Student Loan Prog. (Ser. C), RB, 5.75%, 9/1/10......................... 101,404 175 Virginia Beach, Dev. Auth. Hosp. Fac. RB, 6.00%, 2/15/09, (AMBAC)............... 191,366 100 Virginia Beach, Dev. Auth. Hosp. Fac. RB, 6.00%, 2/15/12, (AMBAC)............... 107,923 PRINCIPAL AMOUNT (000) VALUE $ 200 Virginia Beach, (Ser. C), GO, 6.6%, 8/1/08.......................... $ 224,834 200 Virginia Beach, GO, 5.45%, 7/15/10........................ 206,894 100 Virginia College, Bldg. Auth. Edl. Facs. RB, 5.75%, 1/1/14......................... 101,872 200 Virginia College, Bldg. Auth. Edl. Facs. RB, 5.75%, 4/1/14......................... 200,690 100 Virginia State, Hsg. Dev. Auth. Commonwealth Mtg. (Ser. A), RB, 6.95%, 1/1/10......................... 104,013 100 Virginia State, Hsg. Dev. Auth. Commonwealth Mtg. (Ser. A), RB, 7.10%, Due 1/1/17..................... 105,955 300 Virginia State, Hsg. Dev. Auth. (Ser. D), RB, 6.10%, 1/1/19......................... 302,658 300 Virginia State, Hsg. Dev. Auth. (Ser. F), RB, 6.25%, 7/1/12......................... 305,880 255 Virginia State, Hsg. Dev. Auth. (Ser. K), RB, Multi-Family Hsg. 5.90%, Due 5/1/11..................... 257,331 300 Virginia State, Multi-Family Hsg. (Ser. H), RB 6.35%, 11/1/11........................ 305,553 300 Virginia State, Pub. School Auth. (Ser. A), RB, 6.20%, 8/1/13......................... 321,147 100 Virginia State, Pub. School. Auth. (Ser. B), GO, 6.50%, 8/1/15......................... 108,850 200 Virginia State, Res. Auth. Wtr. & Swr. Sys. RB, 5.25%, 10/1/14........................ 194,442 300 West Point Solid Waste Disp. (Ser. B), IDA, 6.25%, 3/1/19......................... 303,555 8,540,493 PUERTO RICO -- 4.9% 300 Puerto Rico Commonwealth GO, 6.25%, 7/1/13, (MBIA)........................ 334,944 150 Puerto Rico Commonwealth GO, 6.45%, 7/1/17................................ 162,102 497,046
43 EVERGREEN VIRGINIA MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Virginia)
PRINCIPAL AMOUNT (000) VALUE LONG-TERM MUNICIPAL SECURITIES -- (CONTINUED) WASHINGTON, D.C. -- 4.4% $ 100 Met. Area Tran. Auth. RB, 6.00%, 7/1/07, (FGIC)........................ $ 109,566 300 Met. Arpts. Auth. (Ser. A), RB, 7.60%, 10/1/14............................... 332,871 442,437 TOTAL INVESTMENTS (COST $9,094,973)............ 93.7% 9,479,976 OTHER ASSETS AND LIABILITIES -- NET..... 6.3 639,910 NET ASSETS................ 100.0% $10,119,886
Summary of Abbreviations: AMBAC -- American Municipal Bond Assurance Corporation FGIC -- Federal Guaranty Insurance Corporation GNMA -- Government National Mortgage Association GO -- General Obligations Bond IDA -- Industrial Development Authority MBIA -- Municipal Bond Investors Assurance PCR -- Pollution Control Revenue Bond RB -- Revenue Bond See accompanying notes to financial statements. 44 EVERGREEN VIRGINIA MUNICIPAL BOND FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Virginia)
ASSETS: Investments at value (identified cost $9,094,973).............................................................. $ 9,479,976 Cash........................................................................................................... 213,652 Receivable for securities sold................................................................................. 370,561 Receivable for Fund shares sold................................................................................ 210,199 Interest receivable............................................................................................ 141,290 Prepaid expenses............................................................................................... 9,241 Total assets............................................................................................. 10,424,919 LIABILITIES: Payable for securities purchased............................................................................... 226,081 Payable for Fund shares redeemed............................................................................... 32,965 Accrued expenses............................................................................................... 28,837 Dividends payable.............................................................................................. 10,402 Distribution fee payable....................................................................................... 6,748 Total liabilities........................................................................................ 305,033 NET ASSETS........................................................................................................ $10,119,886 NET ASSETS CONSIST OF: Paid-in capital................................................................................................ $10,004,290 Undistributed net investment income............................................................................ 5,878 Accumulated net realized loss on investment transactions....................................................... (275,285) Net unrealized appreciation of investments..................................................................... 385,003 Net assets............................................................................................... $10,119,886 CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE: Class A Shares ($2,474,679 (division sign) 248,594 shares of beneficial interest outstanding).................. $ 9.95 Sales charge -- 4.75% of offering price........................................................................ .50 Maximum offering price................................................................................... $ 10.45 Class B Shares ($5,954,393 (division sign) 598,188 shares of beneficial interest outstanding).................. $ 9.95 Class Y Shares ($1,690,814 (division sign) 169,864 shares of beneficial interest outstanding).................. $ 9.95
See accompanying notes to financial statements. 45 EVERGREEN VIRGINIA MUNICIPAL BOND FUND STATEMENT OF OPERATIONS SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED) (Drawing of the state of Virginia)
INVESTMENT INCOME: Interest............................................................................................. $256,383 EXPENSES: Advisory fee......................................................................................... $ 21,132 Administrative personnel and service fees............................................................ 2,256 Distribution fee -- Class A Shares................................................................... 2,625 Distribution fee -- Class B Shares................................................................... 20,522 Shareholder services fee -- Class B Shares........................................................... 6,841 Registration and filing fees......................................................................... 31,833 Custodian fee........................................................................................ 26,854 Transfer agent fee................................................................................... 26,034 Professional fees.................................................................................... 15,442 Amortization of organization expense................................................................. 10,041 Reports and notices to shareholders.................................................................. 7,622 Insurance expense.................................................................................... 329 Trustees' fees and expenses.......................................................................... 231 Miscellaneous........................................................................................ 2,583 174,345 Less: Fee waivers and expense reimbursements......................................................... (117,217) Net expenses................................................................................... 57,128 Net investment income................................................................................... 199,255 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investment transactions......................................................... 1,715 Net change in unrealized appreciation of investments................................................. 227,489 Net gain on investments................................................................................. 229,204 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................................... $428,459
See accompanying notes to financial statements. 46 EVERGREEN VIRGINIA MUNICIPAL BOND FUND STATEMENT OF CHANGES IN NET ASSETS (Drawing of the state of Virginia)
SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 29, ENDED 1996 AUGUST 31, (UNAUDITED) 1995 INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income........................................................................ $ 199,255 $ 218,052 Net realized gain (loss) on investment transactions.......................................... 1,715 (13,951) Net change in unrealized appreciation of investments......................................... 227,489 567,181 Net increase in net assets resulting from operations...................................... 428,459 771,282 DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A Shares............................................................................... (51,978) (64,808) Class B Shares............................................................................... (114,904) (133,946) Class Y Shares............................................................................... (30,991) (19,298) Total distributions to shareholders.......................................................... (197,873) (218,052) FUND SHARE TRANSACTIONS: Proceeds from shares sold.................................................................... 1,963,731 2,276,843 Proceeds from reinvestment of distributions.................................................. 148,052 172,095 Payment for shares redeemed.................................................................. (254,490) (737,002) Net increase resulting from Fund share transactions.................................... 1,857,293 1,711,936 Net increase in net assets............................................................. 2,087,879 2,265,166 NET ASSETS: Beginning of period.......................................................................... 8,032,007 5,766,841 End of period (includes undistributed net investment income of $5,878 and $4,496, respectively............................................................................... $ 10,119,886 $ 8,032,007
See accompanying notes to financial statements. 47 EVERGREEN VIRGINIA MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS (Drawing of the state of Virginia)
CLASS A SHARES CLASS B SHARES SIX MONTHS JULY 2, SIX MONTHS ENDED EIGHT MONTHS 1993* ENDED EIGHT MONTHS FEBRUARY 29, ENDED YEAR ENDED THROUGH FEBRUARY 29, ENDED 1996 AUGUST 31, DECEMBER 31, DECEMBER 31, 1996 AUGUST 31, (UNAUDITED) 1995# 1994 1993 (UNAUDITED) 1995# PER SHARE DATA: Net asset value, beginning of period..................... $9.67 $8.85 $10.19 $10.00 $9.67 $8.85 Income (loss) from investment operations: Net investment income........ .24 .33 .47 .20 .21 .28 Net realized and unrealized gain (loss) on investments................ .28 .82 (1.34 ) .19 .28 .82 Total from investment operations............... .52 1.15 (.87 ) .39 .49 1.10 Less distributions to shareholders from net investment income.......... (.24 ) (.33 ) (.47 ) (.20 ) (.21 ) (.28 ) Net asset value, end of period..................... $9.95 $9.67 $8.85 $10.19 $9.95 $9.67 TOTAL RETURN+................ 5.5% 13.1% (8.6% ) 3.9% 5.1% 12.5% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)............ $2,475 $1,983 $1,606 $1,306 $5,954 $5,083 Ratios to average net assets: Expenses**................. .87% ++ .72% ++ .53% .25% ++ 1.62% ++ 1.47% ++ Net investment income**................. 4.98% ++ 5.17% ++ 5.11% 4.64% ++ 4.23% ++ 4.42% ++ Portfolio turnover rate...... 26% 87% 59% 0% 26% 87%
1993* YEAR ENDED THROUGH DECEMBER 31, DECEMBER 31, 1994 1993 PER SHARE DATA: Net asset value, beginning of period..................... $10.19 $10.00 Income (loss) from investment operations: Net investment income........ .42 .17 Net realized and unrealized gain (loss) on investments................ (1.34 ) .19 Total from investment operations............... (.92 ) .36 Less distributions to shareholders from net investment income.......... (.42 ) (.17 ) Net asset value, end of period..................... $8.85 $10.19 TOTAL RETURN+................ (9.1% ) 3.7% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)............ $3,817 $2,235 Ratios to average net assets: Expenses**................. 1.12% .75% ++ Net investment income**................. 4.54% 4.25% ++ Portfolio turnover rate...... 59% 0% JULY 2,
# The Fund changed its fiscal year end from December 31 to August 31. * Commencement of class operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. Initial sales charge or contingent deferred sales charges are not reflected. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income (loss) to average net assets, exclusive of any applicable state expense limitations, would have been the following:
CLASS A SHARES CLASS B SHARES SIX MONTHS JULY 2, SIX MONTHS JULY 2, ENDED EIGHT MONTHS 1993* ENDED EIGHT MONTHS 1993* FEBRUARY 29, ENDED YEAR ENDED THROUGH FEBRUARY 29, ENDED YEAR ENDED THROUGH 1996 AUGUST 31, DECEMBER 31, DECEMBER 31, 1996 AUGUST 31, DECEMBER 31, DECEMBER 31, (UNAUDITED) 1995# 1994 1993 (UNAUDITED) 1995# 1994 1993 Expenses............. 3.54% 3.83% 5.14% 7.75% 4.29% 4.58% 5.73% 8.25% Net investment income (loss)............. 2.31% 2.06% .50% (2.86%) 1.56% 1.31% (.07%) (3.25%)
See accompanying notes to financial statements. 48 EVERGREEN VIRGINIA MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS -- (CONTINUED) (Drawing of the state of Virginia)
CLASS Y SHARES SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 29, ENDED 1996 AUGUST 31, (UNAUDITED) 1995# PER SHARE DATA: Net asset value, beginning of period.......................................................... $ 9.67 $8.85 Income (loss) from investment operations: Net investment income......................................................................... .26 .34 Net realized and unrealized gain (loss) on investments........................................ .28 .82 Total from investment operations............................................................ .54 1.16 Less distributions to shareholders from net investment income................................. (.26 ) (.34 ) Net asset value, end of period................................................................ $9.95 $9.67 TOTAL RETURN+................................................................................. 5.6% 13.3% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)..................................................... $1,691 $965 Ratios to average net assets: Expenses**.................................................................................. .62% ++ .47%++ Net investment income**..................................................................... 5.23% ++ 5.42%++ Portfolio turnover rate....................................................................... 26% 87%
1994* THROUGH DECEMBER 31, 1994 PER SHARE DATA: Net asset value, beginning of period.......................................................... $9.83 Income (loss) from investment operations: Net investment income......................................................................... .41 Net realized and unrealized gain (loss) on investments........................................ (.98 ) Total from investment operations............................................................ (.57 ) Less distributions to shareholders from net investment income................................. (.41 ) Net asset value, end of period................................................................ $8.85 TOTAL RETURN+................................................................................. (5.8% ) RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)..................................................... $344 Ratios to average net assets: Expenses**.................................................................................. .28% ++ Net investment income**..................................................................... 5.54% ++ Portfolio turnover rate....................................................................... 59% FEBRUARY 28,
# The Fund changed its fiscal year end from December 31 to August 31. * Commencement of class operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income to average net assets, exclusive of any applicable state expense limitations, would have been the following:
CLASS Y SHARES SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 28, FEBRUARY 29, ENDED 1994* THROUGH 1996 AUGUST 31, DECEMBER 31, (UNAUDITED) 1995# 1994 Expenses.......................................................................... 3.30% 3.58% 4.89% Net investment income............................................................. 2.55% 2.31% .93%
See accompanying notes to financial statements. 49 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 1 -- ORGANIZATION AND NATURE OF OPERATIONS The Evergreen State Tax-Free Funds (the "Funds") are separate series of Evergreen Investment Trust except for Evergreen Florida High Income Municipal Bond Fund, which is a series of Evergreen Municipal Trust, both open-end management companies registered under the Investment Company Act of 1940, as amended (the "Act"). The Evergreen State Tax-Free Funds included herein consist of Evergreen Florida Municipal Bond Fund ("Florida"), Evergreen Florida High Income Municipal Bond Fund ("Florida High Income"), Evergreen Georgia Municipal Bond Fund ("Georgia"), Evergreen North Carolina Municipal Bond Fund ("North Carolina"), Evergreen South Carolina Municipal Bond Fund ("South Carolina") and Evergreen Virginia Municipal Bond Fund ("Virginia"), known collectively as the Funds. The investment objective of Florida, Georgia, North Carolina, South Carolina and Virginia is to seek current income exempt from federal income tax and where applicable, state income taxes, consistent with the preservation of capital. Florida High Income seeks to provide a high level of current income which is exempt from federal income tax. ACQUISITION INFORMATION -- Effective June 30, 1995, Florida acquired substantially all of the net assets of ABT Florida Tax-Free Fund ("ABT Florida's net assets") through the issuance of 15,518,259 of its Class A shares in exchange for ABT Florida's net assets valued at $150,061,560. The aggregate net assets immediately after the acquisition was $188,106,885. The acquired net assets, in this non-taxable transaction, consisted primarily of portfolio securities with unrealized appreciation of $8,245,724. ABT Florida Tax-Free Fund's fiscal year ended April 30. Since both Florida and ABT Florida Tax-Free Fund were similar funds, and ABT Florida Tax-Free Fund contributed the majority of the net assets and shareholders, its basis of accounting for assets and liabilities and its operating results for prior periods have been carried forward as the accounting survivor. Effective June 30, 1995, Florida High Income, a new series of the Evergreen Municipal Trust formed for the purpose of acquiring substantially all of ABT Florida High Income Municipal Bond Fund's net assets ("ABT's net assets"), issued 5,728,125 of its Class A shares at $10.30 per share in exchange for ABT's net assets valued at $59,053,062. The acquired net assets, in this nontaxable transaction, primarily consisted of portfolio securities with an identified cost basis of $58,111,824 and unrealized appreciation of $367,404. ABT Florida High Income Municipal Bond Fund's fiscal year ended April 30. Because ABT Florida High Income Municipal Bond Fund contributed substantially all of Florida High Income's net assets and shareholders, its basis of accounting for assets and liabilities and its operating results for prior periods are carried forward as the accounting survivor. NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. These policies are in conformity with generally accepted accounting principles. SECURITY VALUATIONS -- Municipal bonds are valued by an independent pricing service taking into consideration yield, liquidity, risk, credit quality, coupon, maturity, type of issue and any other factors or market data it deems relevant in determining valuations for normal institutional size trading units of debt securities which it believes to reflect the current value of securities. The independent pricing service does not rely exclusively on quoted prices. Short-term securities purchased with remaining maturities of sixty days or less are stated at amortized cost which approximates market value. SECURITY TRANSACTIONS -- Security transactions are accounted for on the date purchased or sold. Net realized gains or losses are determined on the identified cost basis. INVESTMENT INCOME AND EXPENSES -- Interest income and expenses are accrued daily. Premiums and discounts paid on securities are amortized or accreted into interest income. 50 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES -- continued WHEN ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Funds record when-issued or delayed delivery transactions on the trade date and maintain security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income are declared daily and paid monthly. Distributions from net realized capital gains on investments, if any, will be distributed at least annually. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from the amounts available for distribution under generally accepted accounting principles. To the extent these differences are permanent in nature, such amounts are reclassified within the components of net assets. USE OF ESTIMATES -- The preparation of financial statements is in accordance with generally accepted accounting principles which requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. INCOME TAXES -- It is each Fund's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable and other net income to its shareholders. Accordingly, no provisions for Federal income or excise taxes are necessary. To the extent that realized net capital gains can be offset by capital loss carryforwards, it is each Fund's policy not to distribute such gains. At August 31, 1995, the Fund's most recent fiscal year end, the Funds had capital loss carryforwards as follows:
EXPIRATION 2002 2003 Florida High Income $ 723,137 $634,610 Florida 1,383,385 -- Georgia 681,269 -- North Carolina 3,831,798 -- South Carolina 5,094 -- Virginia 258,553 --
Capital losses incurred after October 31, within each Fund's fiscal year, are deemed to arise on the first business day of the following fiscal year. The Fund's incurred and have selected to defer the following capital losses at August 31, 1995: North Carolina $463,374 South Carolina 154 Virginia 18,447
DEFERRED EXPENSES -- The costs incurred by Florida, Georgia, North Carolina, South Carolina and Virginia with respect to registration of their shares in their first fiscal year, excluding the initial expense of registering the shares, have been deferred and are being amortized using the straight-line method not to exceed a period of five years from each Fund's commencement. ALLOCATION OF EXPENSES -- Expenses specifically identifiable to a class of shares or a specific fund are charged to that class or fund. Expenses common to a Trust as a whole are allocated to the funds in that Trust. Net investment income (other than class specific expenses) and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class. DEFERRED ORGANIZATION EXPENSES -- The expenses of Florida High Income incurred in connection with its organization are being deferred and amortized over a period of benefit not to exceed 60 months from June 30, 1995. 51 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 3 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT ADVISORY AGREEMENTS -- First Union National Bank of North Carolina ("First Union") is entitled to an annual fee of .50 of 1% of Florida's, Georgia's, North Carolina's, South Carolina's and Virginia's average daily net assets pursuant to each Funds investment advisory agreement. First Union is entitled to an annual fee of .60 of 1% of average daily net assets of Florida High Income pursuant to its agreement. First Union has agreed to voluntarily limit its advisory fee for Florida and Florida High Income to an annual fee of .30 of 1% until June 30, 1996. In addition, First Union voluntarily waived its advisory fee and reimbursed operating expenses for the six months ended February 29, 1996 as noted below:
ADVISORY FEE EXPENSE WAIVERS REIMBURSEMENTS Florida High Income $106,915 $ -- Florida 162,706 116,116 Georgia 29,470 88,339 North Carolina 127,619 -- South Carolina 17,961 99,277 Virginia 49,311 61,760
ADMINISTRATION AGREEMENT -- Evergreen Asset Management Corp. ("Evergreen Asset"), a wholly owned subsidiary of First Union, is the Funds' Administrator and Furman Selz LLC ("Furman Selz") is the sub-administrator. Officers of Furman Selz are officers of the Funds. Evergreen Asset's and Furman Selz' fees are based on the average daily net assets of all the funds administered by Evergreen Asset for which First Union or Evergreen Asset is also investment adviser. These fees are calculated at the following annual rates:
ADMINISTRATION FEE AVERAGE DAILY NET ASSETS 0.050% on the first $7 billion 0.035% on the next $3 billion 0.030% on the next $5 billion 0.020% on the next $10 billion 0.015% on the next $5 billion 0.010% in excess of $30 billion
SUB-ADMINISTRATION FEE AVERAGE DAILY NET ASSETS 0.0100% on the first $7 billion 0.0075% on the next $3 billion 0.0050% on the next $15 billion 0.0040% in excess of $25 billion
At February 29, 1996, assets for which Evergreen Asset was the administrator for which either Evergreen Asset or First Union was investment adviser totaled approximately $14.4 billion. For the Funds listed below, Evergreen Asset waived the following amounts of its administration fee for the six months ended February 29, 1996: Georgia $2,677 South Carolina 1,580 Virginia 6,146
PLANS OF DISTRIBUTION -- The Funds have adopted for their Class A shares and Class B Shares, Distribution Plans (the "Plans") pursuant to Rule 12b-1 under the Act. Under the terms of the Plans, the Funds may incur distribution-related and shareholder servicing expenses which may not exceed an annual fee of .75 of 1% for Class A and Class B Shares. For each of the Funds except Florida, the payments for Class A were voluntarily limited to an annual fee of .25 of 1% of average daily net assets. For Florida, Rule 12b-1 fees for Class A shares were limited to the extent such payment would make Florida's 52 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 3 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -- continued ratio of expenses to average daily net assets for Class A shares exceed .61 of 1%. For the six-month period ended February 29, 1996, Rule 12b-1 fees, net of reimbursement, charged to Florida were approximately an annual fee of .07 of 1% of average daily net assets. Rule 12b-1 fees are accrued daily and paid monthly. The Funds have entered into distribution agreements with Evergreen Funds Distributor ("EFD"), a subsidiary of Furman Selz, whereby they will compensate EFD for its services at a rate which may not exceed an annual fee of .25 of 1% of Class A average daily net assets and an annual fee of .75 of 1% of Class B average daily net assets. The Funds have entered into a Shareholder Services Agreement with First Union Brokerage Services ("FUBS"), an affiliate of First Union, whereby they will compensate FUBS up to an annual fee of .25 of 1% for certain services provided to shareholders and/or maintenance of shareholder accounts relating to each of the Fund's Class B Shares. ORGANIZATIONAL EXPENSES -- Organizational expenses of Florida, Georgia, North Carolina, South Carolina and Virginia were initially borne by the Funds' prior administrator. These Funds agreed to reimburse such expenses during the five-year period following each Funds' commencement of operations. As a result of a change in the administration agreement, First Union purchased the remaining unreimbursed organizational expenses from the prior administrator. At February 29, 1996, the Funds have a remaining liability to First Union as follows: Florida $24,960 Georgia 22,530 North Carolina 39,446 South Carolina 65,693 Virginia 21,531
SALES CHARGES -- EFD has advised the Funds that it has retained the following amounts from front-end sales charges resulting from sales of Class A Shares during the period ended February 29, 1996:
FRONT-END SALES CHARGES Florida High Income $24,672 Florida 8,953 Georgia 951 North Carolina 778 South Carolina 552 Virginia 1,912
NOTE 4 -- SHARES OF BENEFICIAL INTEREST Each of the Funds has an unlimited number of $0.0001 par shares authorized. Each of the Funds' shares are divided into classes which are designated Class Y, Class A and Class B Shares. Class Y Shares are available only to investment advisory clients of First Union and its affiliates, certain institutional investors or Class Y shareholders of record of certain other funds managed by First Union and its affiliates as of December 30, 1994. The classes have identical voting, dividend, liquidation and other rights, except that Class A and Class B Shares bear distribution expenses (see Note 3) and have exclusive voting rights with respect to their distribution plans. 53 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 4 -- SHARES OF BENEFICIAL INTEREST -- continued Transactions in shares of beneficial interest were as follows:
SIX MONTHS FEBRUARY 29, 1996 FOUR MONTHS (UNAUDITED) AUGUST 31, 1995 SHARES DOLLARS SHARES DOLLARS FLORIDA HIGH INCOME CLASS A Shares sold................................................. 1,523,581 $16,083,514 730,828 $ 7,497,799 Shares issued on reinvestment of distributions.............. 61,310 650,718 29,262 301,952 Shares redeemed............................................. (1,107,012) (11,755,380) (1,434,175) (14,852,986) Net increase (decrease)..................................... 477,879 4,978,852 (674,085) (7,053,235) CLASS B* Shares sold................................................. 755,150 8,011,419 301,146 3,102,089 Shares issued on reinvestment of distributions.............. 9,260 98,389 505 5,248 Shares redeemed............................................. (13,375) (141,662) -- -- Net increase................................................ 751,035 7,968,146 301,651 3,107,337 CLASS Y** Shares sold................................................. 91,833 973,397 10 101 Shares issued on reinvestment of distributions.............. 471 5,024 -- -- Shares redeemed............................................. (5,918) (63,302) -- -- Net increase................................................ 86,386 915,119 10 101 Total net increase (decrease) resulting from Fund share transactions.............................................. 1,315,300 $13,862,117 (372,424) $ (3,945,797)
* For Class B shares, the Fund share transaction activity is for the period July 11, 1995 (commencement of class operation) through February 29, 1996. ** For Class Y shares, the Fund share transaction activity is for the period September 30, 1995 (commencement of class operations) through February 29, 1996. The Fund share transaction, for the four months ended August 31, 1995, reflects the initial seed purchase of ten shares. 54 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 4 -- SHARES OF BENEFICIAL INTEREST -- continued
SIX MONTHS ENDED FEBRUARY 29, 1996 FOUR MONTHS ENDED (UNAUDITED) AUGUST 31, 1995* SHARES AMOUNT SHARES AMOUNT FLORIDA CLASS A Shares sold................................................... 270,045 $ 2,690,322 148,921 $ 1,551,451 Shares issued in acquisition of First Union Florida Municipal Bond Portfolio.............................................. -- -- 876,413 8,475,749 Shares issued on reinvestment of distributions................ 99,587 993,163 136,011 1,447,315 Shares redeemed............................................... (1,892,525) (18,785,759) (4,679,881) (45,809,078) Net decrease.................................................. (1,522,893) (15,102,274) (3,518,536) (34,334,563) CLASS B Shares sold................................................... 436,250 4,341,815 179,340 1,737,203 Shares issued in acquisition of First Union Florida Municipal Bond Portfolio.............................................. -- -- 2,722,202 26,328,175 Shares issued on reinvestment of distributions................ 32,948 328,761 15,662 151,941 Shares redeemed............................................... (312,217) (3,102,044) (109,102) (1,054,568) Net increase.................................................. 156,981 1,568,532 2,808,102 27,162,751 CLASS Y Shares sold................................................... 361,228 3,598,549 97,604 938,937 Shares issued in acquisition of First Union Florida Municipal Bond Portfolio.............................................. -- -- 335,151 3,241,399 Shares issued on reinvestment of distributions................ 2,080 20,856 591 5,727 Shares redeemed............................................... (69,772) (699,510) (63,509) (610,195) Net increase.................................................. 293,536 2,919,895 369,837 3,575,868 Total net decrease resulting from Fund share transactions..... (1,072,376) ($10,613,847) (340,597) ($3,595,944)
* For Class Y shares and Class B shares, the Fund share transaction activity is for the period June 30, 1995 (commencement of class operations) through August 31, 1995. 55 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 4 -- SHARES OF BENEFICIAL INTEREST -- continued
SIX MONTHS ENDED FEBRUARY 29, 1996 EIGHT MONTHS ENDED (UNAUDITED) AUGUST 31, 1995 SHARES AMOUNT SHARES AMOUNT GEORGIA CLASS A Shares sold.......................................................... 20,190 $ 196,455 76,707 $ 721,680 Shares issued on reinvestment of distributions....................... 4,007 39,127 4,524 42,316 Shares redeemed...................................................... (33,740) (324,331) (18,364) (172,931) Net increase (decrease).............................................. (9,543) (88,749) 62,867 591,065 CLASS B Shares sold.......................................................... 132,376 1,296,756 128,136 1,196,824 Shares issued on reinvestment of distributions....................... 11,994 117,160 17,586 164,250 Shares redeemed...................................................... (73,061) (713,197) (140,930) (1,336,278) Net increase......................................................... 71,309 700,719 4,792 24,796 CLASS Y Shares sold.......................................................... 110,158 1,059,200 108,389 1,023,100 Shares issued on reinvestment of distributions....................... 787 7,713 647 6,066 Shares redeemed...................................................... (37,870) (360,172) (244) (2,297) Net increase......................................................... 73,075 706,741 108,792 1,026,869 Total net increase resulting from Fund share transactions............ 134,841 $ 1,318,711 176,451 $ 1,642,730 NORTH CAROLINA CLASS A Shares sold........................................................ 49,992 $ 520,726 125,332 $ 1,232,452 Shares issued on reinvestment of distributions..................... 13,262 136,745 19,270 189,699 Shares redeemed.................................................... (60,880) (624,882) (183,513) (1,800,044) Net increase (decrease)............................................ 2,374 32,589 (38,911) (377,893) CLASS B Shares sold........................................................ 339,320 3,488,139 521,981 5,146,189 Shares issued on reinvestment of distributions..................... 70,263 724,396 101,358 997,747 Shares redeemed.................................................... (395,748) (4,065,593) (565,861) (5,555,413) Net increase....................................................... 13,835 146,942 57,478 588,523 CLASS Y Shares sold........................................................ 199,611 2,034,692 45,992 453,471 Shares issued on reinvestment of distributions..................... 339 3,497 448 4,415 Shares redeemed.................................................... (19,778) (205,757) (15,523) (152,131) Net increase....................................................... 180,172 1,832,432 30,917 305,755 Total net increase resulting from Fund share transactions.......... 196,381 $ 2,011,963 49,484 $ 516,385
56 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 4 -- SHARES OF BENEFICIAL INTEREST -- continued
SIX MONTHS ENDED FEBRUARY 29, 1996 EIGHT MONTHS ENDED (UNAUDITED) AUGUST 31, 1995 SHARES AMOUNT SHARES AMOUNT SOUTH CAROLINA CLASS A Shares sold............................................................. 23,936 $ 235,452 28,494 $ 267,216 Shares issued on reinvestment of distributions.......................... 881 8,669 754 7,119 Shares redeemed......................................................... (4,009) (39,805) (1,851) (17,235) Net increase............................................................ 20,808 204,316 27,397 257,100 CLASS B Shares sold............................................................. 48,750 476,800 100,143 941,168 Shares issued on reinvestment of distributions.......................... 6,273 61,704 7,356 69,043 Shares redeemed......................................................... (17,612) (173,187) (22,831) (214,174) Net increase............................................................ 37,411 365,317 84,668 796,037 CLASS Y Shares sold............................................................. 228,689 2,244,604 173,778 1,645,544 Shares issued on reinvestment of distributions.......................... 3,807 37,513 745 7,094 Shares redeemed......................................................... (13,753) (135,399) (10,674) (100,744) Net increase............................................................ 218,743 2,146,718 163,849 1,551,894 Total net increase resulting from Fund share transactions............... 276,962 $2,716,351 275,914 $2,605,031 VIRGINIA CLASS A Shares sold............................................................ 42,158 $ 424,622 48,742 $ 465,071 Shares issued on reinvestment of distributions......................... 4,461 44,401 5,890 56,155 Shares redeemed........................................................ (3,206) (31,811) (30,945) (295,864) Net increase........................................................... 43,413 437,212 23,687 225,362 CLASS B Shares sold............................................................ 75,534 750,060 105,642 1,013,607 Shares issued on reinvestment of distributions......................... 9,293 92,502 11,096 105,855 Shares redeemed........................................................ (12,480) (124,051) (22,448) (212,617) Net increase........................................................... 72,347 718,511 94,290 906,845 CLASS Y Shares sold............................................................ 78,785 789,049 83,741 798,165 Shares issued on reinvestment of distributions......................... 1,125 11,149 1,057 10,084 Shares redeemed........................................................ (9,892) (98,628) (23,858) (228,520) Net increase........................................................... 70,018 701,570 60,940 579,729 Total net increase resulting from Fund share transactions.............. 185,778 $1,857,293 178,917 $ 1,711,936
57 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 5 -- INVESTMENT TRANSACTIONS The cost of purchases and proceeds from sales of investments, excluding short-term securities for the six-month period ended February 29, 1996 were as follows:
PURCHASES SALES Florida High Income...................................... $28,428,711 $14,557,269 Florida.................................................. 8,369,708 28,202,615 Georgia.................................................. 2,279,466 872,055 North Carolina........................................... 31,400,048 29,966,782 South Carolina........................................... 4,186,918 1,725,500 Virginia................................................. 3,783,089 2,287,086
On February 29, 1996, the aggregate cost of investments for federal tax purposes was the same as for financial reporting purposes. The composition of unrealized appreciation and depreciation of investment securities was as follows:
APPRECIATION DEPRECIATION NET Florida High Income............... $ 2,545,917 $162,982 $ 2,382,935 Florida........................... 11,565,456 198,833 11,366,623 Georgia........................... 795,187 7,247 787,940 North Carolina.................... 3,510,099 214,769 3,295,330 South Carolina.................... 295,865 11,642 284,223 Virginia.......................... 418,396 33,393 385,003
NOTE 6 -- CONCENTRATION OF CREDIT RISK Since the Funds invest a substantial portion of their assets in issuers located in a single state, they may be more affected by economic and political developments in a specific state or region than would be a comparable general tax-exempt mutual fund. Certain debt obligations held by each of the Funds are entitled to the benefit of insurance, standby letters of credit or other guarantees of banks or other financial institutions. 58 (This Page Left Blank Intentionally) 59 (This Page Left Blank Intentionally) 60 TRUSTEES AND OFFICERS TRUSTEES: Laurence B. Ashkin* Foster Bam* James S. Howell, Chairman Robert J. Jeffries* Gerald M. McDonnell Thomas L. McVerry William W. Pettit Russell A. Salton, III M.D. Michael S. Scofield OFFICERS: John J. Pileggi President and Treasurer Joan V. Fiore Secretary Sheryl Hirschfeld Assistant Secretary Donald E. Brostrom Assistant Treasurer Stephen W. St. Clair Assistant Treasurer * Trustees for Evergreen Florida High Income Municipal Bond Fund only. NOT May lose value FDIC No bank guarantee Insured Evergreen Funds Distributor, Inc. 538359 42609 4/96 -----END PRIVACY-ENHANCED MESSAGE-----