-----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, LBH5Fgn1m45oOEKJMSQPi7HmqQqfyGr0NRXODX1YdQKYmPUWyVH1dOkTDlSN26MH HNnjQxHXcK7K0Bdiu+/G7A== 0000791049-99-000009.txt : 19990603 0000791049-99-000009.hdr.sgml : 19990603 ACCESSION NUMBER: 0000791049-99-000009 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990602 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CASCADES TRUST CENTRAL INDEX KEY: 0000791049 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 136868231 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-04626 FILM NUMBER: 99638933 BUSINESS ADDRESS: STREET 1: 380 MADISON AVE STE 2300 CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2126976666 MAIL ADDRESS: STREET 1: 380 MADISON AVENUE STREET 2: # 2300 CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: TAX FREE TRUST OF OREGON DATE OF NAME CHANGE: 19890810 N-30D 1 MANAGER AND FOUNDER AQUILA MANAGEMENT CORPORATION 380 Madison Avenue, Suite 2300 New York, New York 10017 INVESTMENT SUB-ADVISOR U.S. BANK NATIONAL ASSOCIATION 111 S.W. Fifth Avenue U.S. Bancorp Tower Portland, Oregon 97204 BOARD OF TRUSTEES Lacy B. Herrmann, Chairman Vernon R. Alden Warren C. Coloney David B. Frohnmayer James A. Gardner Diana P. Herrmann Raymond H. Lung John W. Mitchell Richard C. Ross OFFICERS Diana P. Herrmann, President Kerry A. Lemert, Vice President Christine L. Neimeth, Vice President Rose F. Marotta, Chief Financial Officer Richard F. West, Treasurer Edward M.W. Hines, Secretary DISTRIBUTOR AQUILA DISTRIBUTORS, INC. 380 Madison Avenue, Suite 2300 New York, New York 10017 TRANSFER AND SHAREHOLDER SERVICING AGENT PFPC INC. 400 Bellevue Parkway Wilmington, Delaware 19809 CUSTODIAN BANK ONE TRUST COMPANY, N.A. 100 East Broad Street Columbus, Ohio 43271 INDEPENDENT AUDITORS KPMG LLP 345 Park Avenue New York, New York 10154 Further information is contained in the Prospectus, which must precede or accompany this report. SEMI-ANNUAL REPORT MARCH 31, 1999 TAX-FREE TRUST OF OREGON A TAX-FREE INCOME INVESTMENT (Logo of the Tax-Free Trust of Oregon: Square box with 2 fir trees in front of a mountain and the sun) ONE OF THE AQUILAsm GROUP OF FUNDS (Logo of the Aquila Group of Funds: An eagle's head) (Logo of the Tax-Free Trust of Oregon: Square box with 2 fir trees in front of a mountain and the sun) SERVING OREGON INVESTORS FOR OVER A DECADE TAX-FREE TRUST OF OREGON SEMI-ANNUAL REPORT "THE BEST THINGS IN LIFE CAN BE TAX-FREE" April 12, 1999 Dear Fellow Shareholder: When you compare TAX-FREE municipal bonds with similar maturity high quality taxable U.S. Treasuries, we think it is fair to say, "THE BEST THINGS IN LIFE CAN BE TAX-FREE." You actually get to keep more of your return - in dollars and cents - - with the TAX-FREE investment, when you take into consideration the effect of taxes you pay with a TAXABLE bond. SEEING IS BELIEVING Let us show you the mathematics of how this works out. Let's suppose you purchase a $1,000 15-year U.S. Treasury bond yielding 5% and a $1,000 tax-free municipal bond with a maturity of 15 years yielding 4.4%. Your investments would look as follows: U.S. TREASURY* TAX-FREE* Interest Income $50.00 $44.00 Federal Tax Bracket 28% 28% Federal Tax Paid $14.00 $-0- Net Income Retained $36.00 $44.00 Even though on the surface the U.S. Treasury appears to be yielding higher than the TAX-FREE municipal, once the effect of Federal taxes is taken into consideration, the TAX-FREE investment allows you to keep more money in your pocket. State taxes are not applicable to either investment. Obviously, investors in income tax brackets higher than 28% will obtain an even greater advantage. Only you can make the decision as to the right asset allocation for your investment money. However, given the fact that there is an increased supply of high quality municipal bonds available and a favorable ratio of taxable vs. tax-free bonds, we believe it is fair to say that, "THE BEST THINGS IN LIFE CAN BE TAX-FREE." THE TAX-FREE BONDS IN THE TRUST'S PORTFOLIO The portfolio of Tax-Free Trust of Oregon contains only high quality tax-free municipal bonds. Additionally, the maturity of the overall portfolio of the Trust has an INTERMEDIATE character. Each of these factors with the tax-free bonds in the Trust's portfolio lends itself to the kind of investment with the Trust that allows you to "SLEEP WELL AT NIGHT." THE OTHER BENEFITS OF YOUR INVESTMENT There are other benefits inherent in your investment in Tax-Free Trust of Oregon. In these benefits, you can take pride and say, "THE BEST THINGS IN LIFE CAN TRULY BE TAX-FREE." The tax-free bonds in the Trust help finance a variety of public purpose projects throughout the State. These are the kind of projects that benefit you and your neighbors. For example, do you: * use Max Light Rail service in Portland to go shopping or to basketball games? * have a child or grandchild attending Reed College? * fly out of Portland International Airport for business or vacation? * attend conferences and exhibits at the Oregon Convention Center? If so, that's your money in the Trust at work with these projects. The money that you and other shareholders have invested in the Trust has helped build each of these projects and many more projects throughout the State. Just remember how proud and excited you were the day you sat behind the wheel of your first car or walked into your first home. It was your hard-earned dollars that paid for these comforts. Well, in another sense, you can be equally proud and excited about the projects you have helped finance in your community and throughout the State of Oregon. It is your hard-earned dollars that have helped build the Oregon Convention Center, the airport, and all the various other projects throughout the State that the Trust has helped finance. It was truly with your investment and that of other shareholders that Tax-Free Trust of Oregon helped build the benefits that you can see and touch. In a very real sense, these projects belong to you and came to fruition through your hard work. Thus, not only do you get income advantages through your investment in Tax-Free Trust of Oregon, but, also, you can literally take pride in saying that through the benefits of these projects, "THE BEST THINGS IN LIFE CAN BE TAX-FREE." YOUR CONFIDENCE APPRECIATED You can be assured that all those associated with the management of your investment in Tax-Free Trust of Oregon are consistently working in your best interest. We very much value you as a shareholder and appreciate the confidence you have shown in the Trust. Sincerely, Diana P. Herrmann President Lacy B. Herrmann Chairman, Board of Trustees * The investment examples given, while realistic, are for illustrative purposes only, and are strictly hypothetical in nature. They do not represent the performance of any particular investment. For simplicity, a stable net asset value has been assumed over the life of each investment and the effect of dividend reinvestment was not taken into account. Of course, the actual rate of return and share price of a municipal bond fund, such as Tax-Free Trust of Oregon, will fluctuate with general interest rate changes. Thus, redemption price may be more or less than original purchase price. TAX-FREE TRUST OF OREGON STATEMENT OF INVESTMENTS MARCH 31, 1999 (unaudited) 960,000 6.050%, 04/01/2004 Aa3/AA- 1,016,400 1,020,000 6.150%, 04/01/2005 Aa3/AA- 1,079,925 1,080,000 6.250%, 04/01/2006 Aa3/AA- 1,146,150 Clackamas County School District #115 (AMBAC Indemnity Corporation Insured) 600,000 5.600%, 06/01/2006 Aaa/AAA 657,750 615,000 5.700%, 06/01/2007 Aaa/AAA 676,500 1,000,000 6.150%, 06/01/2014 Aaa/AAA 1,121,250 Clackamas County School District #12 (Financial Guaranty Insurance Corporation) 2,000,000 5.250%, 06/01/2015 Aaa/AAA 2,072,500 9,000,000 4.800%, 06/01/2018 Aaa/AAA 8,831,250 Clackamas and Washington County School District #3J 2,000,000 5.850%, 08/01/2006 A1/AAA 2,132,500 1,150,000 5.875%, 10/01/2009 A1/A+ 1,221,875 Clackamas, Multnomah and Washington County School District #7J 1,000,000 7.100%, 06/15/2009 Aaa/NR 1,043,750 250,000 7.100%, 06/15/2010 Aaa/NR 260,937 1,500,000 5.700%, 06/15/2010 Aa2/NR 1,593,750 Columbia Gorge Community College District (Financial Security Assurance Insured) 1,200,000 5.400%, 06/01/2013 Aaa/AAA 1,275,000 Deschutes and Jefferson County School District #2J (MBIA Corporation Insured) 3,700,000 5.600%, 06/01/2009 Aaa/AAA 3,875,750 Hood River County School District (AMBAC Indemnity Corporation Insured) 2,000,000 5.650%, 06/01/2008 Aaa/AAA 2,130,000 Jackson County School District #5, Ashland (Financial Security Assurance Insured) 1,400,000 5.100%, 06/01/2005 Aaa/AAA 1,485,750 Jackson County School District #549C, (Financial Security Assurance Insured) 1,000,000 5.300%, 06/01/2008 Aaa/AAA 1,057,500 Jefferson County School District #509J (Financial Security Assurance Insured) 1,750,000 5.500%, 06/15/2013 Aaa/AAA 1,841,875 Josephine County School District #7 (Grants Pass) (Financial Guaranty Insurance Corporation) 2,700,000 5.700%, 06/01/2013 Aaa/AAA 2,899,125 Lane County School District #4J 2,000,000 5.375%, 07/01/2009 Aa3/NR 2,080,000 1,000,000 5.375%, 07/01/2013 Aa3/NR 1,028,750 Lane County School District #52J (Financial Guaranty Insurance Corporation Insured) 750,000 6.400%, 12/01/2009 Aaa/AAA 850,313 Lincoln County Oregon School District (Financial Guaranty Insurance Corporation) 1,245,000 5.250%, 06/15/2012 Aaa/AAA 1,305,694 Lincoln County (MBIA Corporation Insured) 1,000,000 5.375%, 02/01/2010 Aaa/AAA 1,032,500 Malheur County Jail Bonds (MBIA Corporation Insured) 1,345,000 6.300%, 12/01/2012 Aaa/AAA 1,494,631 Marion and Clackamas County Union High School District #7J (Financial Security Assurance Insured) 1,000,000 7.000%, 06/01/2010 Aaa/AAA 1,150,000 1,340,000 6.000%, 06/01/2013 Aaa/AAA 1,482,375 Metropolitan Oregon Open Space Program 2,340,000 5.250%, 09/01/2013 Aa2/AA+ 2,416,050 Metropolitan Service District Refunding (Oregon Convention Center) 4,320,000 6.250%, 01/01/2013 Aa2/AA+ 4,490,812 Multnomah County 1,245,000 5.100%, 10/01/2007 Aa1/NR 1,316,587 1,000,000 5.200%, 10/01/2008 Aa1/NR 1,062,500 Multnomah County Drainage District #1 Assessment Bond (MBIA Corporation Insured) 1,000,000 5.250%, 07/01/2017 Aaa/AAA 1,022,500 Multnomah County School District #4 1,330,000 5.900%, 01/01/2005 A1/A+ 1,404,812 Multnomah County School District #40 5,100,000 5.625%, 06/01/2012 NR/AA- 5,406,000 Northern Oregon Correctional (AMBAC Indemnity Corporation Insured) 2,000,000 5.400%, 09/15/2016 Aaa/AAA 2,080,000 Oak Lodge Water District (AMBAC Indemnity Corporation Insured) 215,000 7.300%, 12/01/2005 Aaa/AAA 250,206 215,000 7.300%, 12/01/2006 Aaa/AAA 250,206 215,000 7.400%, 12/01/2007 Aaa/AAA 249,669 Puerto Rico Commonwealth Infrastructure (MBIA Corporation Insured) 1,500,000 4.875% , 07/01/2023 Aaa/AAA 1,485,000 State of Oregon Alternate Energy Project Series A 1,000,000 6.400%, 01/01/2008 Aa2/AA 1,002,800 State of Oregon Board of Higher Education 900,000 6.200%, 10/15/2007 Aa2/AA 961,875 3,195,000 6.400%, 10/01/2011 Aa2/AA 3,374,719 2,000,000 6.250%, 10/15/2012 Aa2/AA 2,140,000 2,150,000 6.500%, 10/01/2017 Aa2/AA 2,279,000 2,890,000 6.000%, 10/15/2018 Aa2/AA 3,067,012 3,000,000 4.875%, 08/01/2019 Aa2/AA 2,943,750 8,000,000 5.000%, 08/01/2022 Aa2/AA 8,010,000 1,500,000 5.000%, 08/01/2022 Aa2/AA 1,501,875 1,655,000 5.600%, 08/01/2023 Aa2/AA 1,743,956 1,500,000 5.600%, 08/01/2023 Aa2/AA 1,580,625 6,300,000 6.000%, 08/01/2026 Aa2/AA 7,126,875 State of Oregon Elderly & Disabled Housing 725,000 6.250%, 08/01/2013 Aa2/AA 785,719 State of Oregon Veterans' Welfare 505,000 9.000%, 04/01/2008 Aa2/AA 593,375 700,000 9.200%, 10/01/2008 Aa2/AA 960,750 1,200,000 5.200%, 10/01/2018 Aa2/AA 1,215,000 Polk County School District #2 (Financial Security Assurance Insured) 1,000,000 5.400%, 06/01/2012 Aaa/AAA 1,036,250 Polk, Marion, and Benton County School District #13J (Financial Guaranty Insurance Corporation Insured) 1,000,000 5.500%, 12/01/2008 Aaa/AAA 1,071,250 City of Portland 1,000,000 4.500%, 11/01/2004 Aaa/NR 1,015,000 1,480,000 5.100%, 10/01/2009 Aaa/NR 1,529,950 2,790,000 5.750%, 06/01/2013 Aaa/NR 2,992,275 2,000,000 5.600%, 06/01/2015 Aa2/NR 2,110,000 1,645,000 5.250%, 06/01/2015 Aa2/NR 1,684,069 Portland Community College District 3,500,000 6.000%, 07/01/2012 Aa3/AA 3,736,250 Port of Portland 1,000,000 4.500%, 03/01/2006 Aa2/AA+ 1,021,250 City of Salem 1,000,000 5.875%, 01/01/2007 A1/AA- 1,041,250 Salem-Keizer Oregon School District #24, (Financial Security Assurance Insured) 2,000,000 4.875%, 06/01/2014 Aaa/AAA 2,017,500 Tri-County Metropolitan Transportation District 6,100,000 6.000%, 07/01/2012 Aa2/AA+ 6,496,500 Tualatin Hills Park and Recreation District (MBIA Corporation Insured) 2,970,000 5.750%, 03/01/2012 Aaa/AAA 3,237,300 2,000,000 5.750%, 03/01/2015 Aaa/AAA 2,180,000 Umatilla County Oregon (Financial Guaranty Insurance Corporation Insured) 2,000,000 5.600%, 10/01/2015 Aaa/AAA 2,140,000 Umatilla County School District #8R (AMBAC Indemnity Corporation Insured) 700,000 6.100%, 12/01/2012 Aaa/AAA 777,875 Umatilla County School District #6R (AMBAC Indemnity Corporation Insured) 325,000 5.050%, 06/15/2022 Aaa/AAA 344,906 2,675,000 5.050%, 06/15/2022 Aaa/AAA 2,671,656 Washington County 2,500,000 6.200%, 12/01/2007 Aa1/AA 2,640,625 1,625,000 5.000%, 12/01/2011 Aa1/AA 1,679,844 3,110,000 6.000%, 12/01/2013 Aa1/AA 3,432,662 Washington County School District #88J (Financial Security Assurance Insured) 2,315,000 6.100%, 06/01/2012 Aaa/AAA 2,581,225 585,000 6.100%, 06/01/2012 Aaa/AAA 639,844 Washington and Clackamas County School District #23J 1,000,000 5.650%, 06/01/2015 A1/NR 1,068,750 720,000 6.625%, 01/01/2008 NR/NR* 737,755 2,000,000 5.400%, 01/01/2010 A1/NR 2,097,500 Washington & Multnomah County School District #48J 1,175,000 5.500%, 06/01/2006 Aa2/AA- 1,254,312 1,130,000 5.600%, 06/01/2007 Aa2/AA- 1,211,925 1,000,000 6.150%, 06/01/2008 Aa2/AA- 1,030,000 1,415,000 5.700%, 06/01/2008 Aa2/AA- 1,508,744 525,000 6.300%, 09/01/2009 Aaa/AAA 558,469 1,440,000 6.000%, 06/01/2011 Aa2/AA- 1,549,800 2,010,000 6.500%, 09/01/2011 Aaa/AAA 2,145,675 Washington & Yamhill County School District #58J (AMBAC Indemnity Corporation Insured) 70,000 6.600%, 11/01/2004 Aaa/AAA 70,137 80,000 6.600%, 11/01/2005 Aaa/AAA 80,151 90,000 6.600%, 11/01/2006 Aaa/AAA 90,162 Yamhill County School District #29J (Financial Security Assurance Insured) 2,000,000 5.350%, 06/01/2006 Aaa/AAA 2,117,500 500,000 6.100%, 06/01/2011 Aaa/AAA 554,375 Total State of Oregon General Obligation Bonds 173,683,947 STATE OF OREGON REVENUE BONDS - 47.0% AIRPORT REVENUE BONDS- 2.6% Port of Portland Airport (Financial Guaranty Insurance Corporation Insured) 500,000 5.500%, 07/01/2006 Aaa/AAA 524,375 Port of Portland Airport (MBIA Corporation Insured) 205,000 6.400%, 07/01/2003 NR/AAA 219,606 395,000 6.400%, 07/01/2003 Aaa/AAA 423,637 1,210,000 6.750%, 07/01/2009 NR/AAA 1,303,775 2,320,000 6.750%, 07/01/2009 Aaa/AAA 2,470,800 1,595,000 6.750%, 07/01/2015 Aaa/AAA 1,702,662 830,000 6.750%, 07/01/2015 NR/AAA 894,325 1,295,000 5.000%, 07/01/2028 Aaa/AAA 1,270,719 Total Airport Revenue Bonds 8,809,899 CERTIFICATE OF PARTICIPATION REVENUE BONDS - 11.1% Marion County Certificate of Participation (MBIA Corporation Insured) 1,000,000 5.000%, 06/01/2023 Aaa/AAA 985,000 Multnomah County Certificate of Participation 1,000,000 5.200%, 07/01/2005 Aa3/NR 1,048,750 3,100,000 6.000%, 08/01/2012 Aa/A 3,344,125 State of Oregon Certificate of Participation (AMBAC Indemnity Corporation Insured) 2,100,000 7.500%, 09/01/2015 Aaa/AAA 2,257,500 Oregon State Department Of Administration Services (AMBAC Indemnity Corporation Insured) 950,000 5.000%, 11/01/2019 Aaa/AAA 944,062 1,500,000 5.800%, 05/01/2024 Aaa/AAA 1,676,250 2,500,000 5.000%, 05/01/2024 Aaa/AAA 2,478,125 Oregon State Department Of Administration Services (MBIA Corporation Insured) 1,000,000 5.750%, 05/01/2017 Aaa/AAA 1,076,250 5,805,000 5.500%, 11/01/2020 Aaa/AAA 6,044,456 1,450,000 5.375%, 11/01/2016 Aaa/AAA 1,498,938 State of Oregon Certificate of Participation (MBIA Corporation Insured) 2,150,000 7.050%, 01/15/2006 Aaa/AAA 2,255,522 1,250,000 5.700%, 01/15/2010 Aaa/AAA 1,304,688 2,750,000 6.200%, 11/01/2012 Aaa/AAA 3,000,938 1,150,000 7.200%, 01/15/2015 Aaa/AAA 1,207,753 1,000,000 5.500%, 01/15/2015 Aaa/AAA 1,041,250 550,000 5.500%, 01/15/2015 Aaa/AAA 572,688 500,000 5.800%, 03/01/2015 Aaa/AAA 526,875 600,000 7.200%, 03/01/2015 Aaa/AAA 627,270 1,000,000 5.800%, 03/01/2015 Aaa/AAA 1,053,750 2,000,000 6.250%, 11/01/2019 Aaa/AAA 2,187,500 Southwestern Oregon Community College District (AMBAC Indemnity Corporation Insured) 1,000,000 5.600%, 06/01/2016 Aaa/AAA 1,053,750 Washington County Educational Services, Certificates of Participation 645,000 5.625%, 06/01/2016 A1/NR 666,769 Washington County Educational Services, Certificates of Participation, (MBIA Corporation Insured) 830,000 5.750%, 06/01/2025 Aaa/AAA 876,688 Total Certificate of Participation Revenue Bonds 37,728,897 HOSPITAL REVENUE BONDS - 4.9% Clackamas Hospital Facilities Authority (Adventist Health System/West) (MBIA Corporation Insured) 2,000,000 6.350%, 03/01/2009 Aaa/AAA 2,142,500 Clackamas Hospital Facilites Authority (Kaiser Permanente) 2,400,000 6.500%, 04/01/2011 A3/A 2,544,000 Clackamas Hospital Facilites Authority (Sisters of Providence Hospital) 500,000 6.375%, 10/01/2004 A1/AA- 543,750 Douglas County Hospital Facilities Authority (Catholic Health) (MBIA Corporation Insured) 535,000 5.600%, 11/15/2005 Aaa/AAA 581,813 Medford Hosptial Authority (Asante Health Systems) (MBIA Corporation Insured) 1,000,000 5.000%, 08/15/2018 Aaa/AAA 985,000 500,000 5.000%, 08/15/2024 Aaa/AAA 490,625 3,000,000 5.125%, 08/15/2028 Aaa/AAA 3,003,750 Salem Oregon Hospital Facilites Authority 1,500,000 5.000%, 08/15/2018 NR/AA- 1,468,125 Western Lane County Hospital Facilities Authority (Sisters of St. Joseph Hospital) (MBIA Corporation Insured) 1,000,000 5.625%, 08/01/2007 Aaa/AAA 1,078,750 3,765,000 5.750%, 08/01/2019 Aaa/AAA 4,033,256 Total Hospital Revenue Bonds 16,871,569 HOUSING, EDUCATIONAL, AND CULTURAL REVENUE BONDS - 9.0% Clackamas Community College District Revenue (MBIA Corporation Insured) 1,865,000 5.700%, 06/01/2016 Aaa/AAA 2,051,500 Portland Oregon Housing Authority 4,140,000 5.100%, 01/01/2027 NR/A 4,108,950 State of Oregon Housing Finance Agency, 1,000,000 6.800%, 07/01/2013 A1/A+ 1,055,000 State of Oregon Housing and Community Services, 1,670,000 5.200%, 07/01/2009 Aa2/NR 1,722,188 705,000 5.900%, 07/01/2012 Aa2/NR 742,894 455,000 6.750%, 07/01/2012 Aa2/NR 482,869 500,000 6.700%, 07/01/2013 Aa2/NR 522,500 445,000 6.350%, 07/01/2014 Aa2/NR 470,588 35,000 6.750%, 07/01/2016 Aa2/NR 35,000 815,000 6.800%, 07/01/2016 Aa2/NR 862,881 3,500,000 6.875%, 07/01/2028 Aa2/NR 3,701,250 State of Oregon Housing and Community Services, (MBIA Corporation Insured) 1,500,000 5.450%, 07/01/2024 Aaa/AAA 1,535,625 State of Oregon Housing, Educational and Cultural Facilities Authority (George Fox University) (LOC: Bank of America) 1,000,000 5.700%, 03/01/2017 NR/AA- 1,051,250 State of Oregon Housing, Educational and Cultural Facilities Authority (Lewis & Clark College) (MBIA Corporation Insured) 1,130,000 7.125%, 07/01/2020 Aaa/AAA 1,203,450 State of Oregon Housing, Educational and Cultural Facilities Authority (Reed College), 2,145,000 6.750%, 07/01/2021 NR/A+ 2,327,325 Oregon Health Sciences University Revenue (MBIA Corporation Insured) 4,500,000 5.250%, 07/15/2015 Aaa/AAA 4,657,500 City of Salem Educational Facilities (Willamette University), 1,000,000 6.000%, 04/01/2010 A2/NR 1,068,750 1,740,000 6.750%, 04/01/2011 NR/NR* 1,846,575 Yamhill County Educational Services (AMBAC Indemnity Corporation Insurance) 1,000,000 5.150%, 07/01/2019 NR/AAA 1,010,000 Total Housing, Educational, and Cultural Revenue Bonds 30,456,095 TRANSPORTATION REVENUE BONDS - 3.4% Port of Morrow, 2,600,000 6.375%, 04/01/2008 Aaa/NR 2,795,000 State of Oregon Department of Transportation (Light Rail) (MBIA Corporation Insured), 2,000,000 6.000%, 06/01/2005 Aaa/AAA 2,212,500 1,500,000 6.100%, 06/01/2007 Aaa/AAA 1,651,875 Port St. Helens, Oregon Polution 80,000 7.750%, 02/01/2006 A3/NR 88,400 1,000,000 4.800%, 04/01/2010 NR/A- 1,012,500 Tri-County Metropolitan Transportation District 3,680,000 5.700%, 08/01/2013 A1/AA+ 3,841,000 Total Transportation Revenue Bonds 11,601,275 URBAN RENEWAL REVENUE BONDS - .1% City of Portland Urban Renewal, 300,000 9.000%, 12/01/2002 A/NR 304,059 Total Urban Renewal Revenue Bonds 304,059 UTILITY REVENUE BONDS - 4.9% Emerald Peoples Utility District (AMBAC Indemnity Corporation Insured), 700,000 6.700%, 11/01/2005 Aaa/AAA 742,000 Emerald Peoples Utility District Electic Systems (Financial Security Assurance Insured) 1,000,000 6.750%, 11/01/2016 Aaa/AAA 1,077,500 City of Eugene Electric Utility (Financial Security Assurance Insured) 640,000 4.850%, 08/01/2013 Aaa/AAA 637,600 1,700,000 5.000%, 08/01/2018 Aaa/AAA 1,689,375 1,340,000 5.050%, 08/01/2022 Aaa/AAA 1,341,675 1,200,000 5.000%, 08/01/2023 Aaa/AAA 1,176,000 City of Eugene Electric Utility 610,000 6.650%, 08/01/2009 A1/AA 651,175 660,000 6.650%, 08/01/2010 A1/AA 704,550 1,000,000 6.000%, 08/01/2011 A1/AA 1,046,250 700,000 6.700%, 08/01/2011 A1/AA 748,125 500,000 5.000%, 08/01/2017 A1/AA 496,875 1,400,000 5.800%, 08/01/2019 A1/AA 1,536,500 City of Eugene Trojan Nuclear Project 3,865,000 5.900%, 09/01/2009 Aa1/AA- 3,874,663 Northern Wasco County Public Utility Development (AMBAC Indemnity Corporation Insured), 1,000,000 5.625%, 12/01/2022 Aaa/AAA 1,055,000 Total Utility Revenue Bonds 16,777,288 WATER AND SEWER REVENUE BONDS - 10.0% City of Canby Sewer (Financial Security Assurance Insured), 500,000 6.250%, 12/01/2017 Aaa/AAA 542,500 City of Klamath Falls Water (Financial Security Assurance Insured), 1,100,000 6.100%, 06/01/2014 Aaa/AAA 1,208,625 City of Oregon City Sewer, 750,000 6.875%, 10/01/2019 NR/NR* 873,750 City of Portland Sewer 1,500,000 6.050%, 06/01/2009 A1/A+ 1,659,375 City of Portland Sewer, (MBIA Corporation Insured) 2,500,000 5.250%, 06/01/2016 Aaa/AAA 2,559,375 2,000,000 4.500%, 06/02/2015 Aaa/AAA 1,925,000 City of Portland Sewer (Financial Guaranty Insurance Corporation Insured), 2,725,000 6.000%, 10/01/2008 Aaa/AAA 2,977,063 500,000 6.000%, 10/01/2012 Aaa/AAA 545,000 1,000,000 5.000%, 06/01/2014 Aaa/AAA 1,013,750 4,435,000 5.000%, 06/01/2015 Aaa/AAA 4,468,263 2,855,000 6.250%, 06/01/2015 Aaa/AAA 3,190,463 Portland Water System Revenue 3,000,000 5.500%, 08/01/2014 Aa1/NR 3,131,250 1,440,000 5.500%, 08/01/2015 Aa1/NR 1,497,600 Washington County Unified Sewer Agency (AMBAC Indemnity Corporation Insured), 1,040,000 6.800%, 11/01/2004 Aaa/AAA 1,061,819 2,120,000 5.900%, 10/01/2006 Aaa/AAA 2,329,350 800,000 5.900%, 10/01/2006 Aaa/AAA 879,000 315,000 5.900%, 10/01/2006 Aaa/AAA 342,169 2,500,000 6.125%, 10/01/2012 Aaa/AAA 2,775,000 750,000 6.125%, 10/01/2012 Aaa/AAA 832,500 Total Water and Sewer Revenue Bonds 33,811,852 OTHER REVENUE BONDS - 1.0% Baker County Pollution Control (Ash Grove Cement West Project) (Small Business Administration Insured), 355,000 6.200%, 07/01/2004 Aaa/NR 357,197 380,000 6.300%, 07/01/2005 Aaa/NR 382,440 Oregon Economic Development Commission (Consolidated Freightways) 1,500,000 7.000%, 04/01/2004 A1/BBB 1,502,430 Multnomah County School District #1J , Special Obligations 1,000,000 5.000%, 03/01/2007 Aa3/A+ 1,028,750 Total Other Revenue Bonds 3,270,817 Total State of Oregon Revenue Bonds 159,631,751 PUERTO RICO - 0.6% Puerto Rico Commonwealth Infrastructure, (AMBAC Indemnity Corp. Insured) 2,100,000 5.000% , 07/01/2028 Aaa/AAA 2,097,375 Total Puerto Rico 2,097,375 Total Municipal Bonds (cost $ 317,918,413**) 98.7% 335,413,073 Other assets in excess of liabilities 1.3 4,407,407 Net Assets 100.0% $339,820,480 (*) Any security not rated has been determined by the Investment Adviser to have sufficient quality to be ranked in the top four credit ratings if a credit rating were to be assigned by a rating service. (**) Cost for Federal tax purposes is identical.
RATING FACE MOODY'S/ AMOUNT STATE OF OREGON GENERAL OBLIGATION BONDS - 51.1% S&P VALUE
TAX-FREE TRUST OF OREGON STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1999 (UNAUDITED) ASSETS Investments at value (cost $317,918,413) $335,413,073 Interest receivable 5,347,595 Receivable for Trust shares sold 442,082 Other assets 6,946 Total assets 341,209,696 LIABILITIES Payable for Trust shares redeemed 539,225 Dividends payable 341,144 Cash overdraft 178,104 Distribution fees payable 124,994 Management fees payable 115,112 Accrued expenses 90,637 Total liabilities 1,389,216 NET ASSETS $339,820,480 Net Assets consist of: Capital Stock - Authorized an unlimited number of shares, par value $.01 per share 316,716 Additional paid-in capital 321,339,349 Net unrealized appreciation on investments 17,494,660 Accumulated net realized gain on investments 414,866 Undistributed net investment income 254,889 $339,820,480 CLASS A Net Assets $325,801,634 Capital shares outstanding 30,364,312 Net asset value and redemption price per share $ 10.73 Offering price per share (100/96 of $10.73 adjusted to nearest cent) $ 11.18 CLASS C Net Assets $ 2,389,369 Capital shares outstanding 222,840 Net asset value and offering price per share $ 10.72 Redemption price per share (* a charge of 1% is imposed on the redemption proceeds of the shares, or on the original price, whichever is lower, if redeemed during the first 12 months after purchase) $ 10.72* CLASS Y Net Assets $ 11,629,477 Capital shares outstanding 1,084,427 Net asset value, offering and redemption price per share $ 10.72
See accompanying notes to financial statements. TAX-FREE TRUST OF OREGON STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 1999 (UNAUDITED) INVESTMENT INCOME Interest income $ 9,030,003 EXPENSES: Management fees (note 3) $ 672,954 Distribution and service fees (note 3) 250,614 Transfer and shareholder servicing agent fees 105,000 Trustees' fees and expenses 44,000 Shareholders' reports and proxy statements 32,000 Legal fees 30,000 Custodian fees 12,000 Audit and accounting fees 11,000 Registration fees and dues 11,000 Insurance 6,000 Miscellaneous 22,419 1,196,987 Expenses paid indirectly (note 7) (40,000) Net expenses 1,156,987 Net investment income 7,873,016 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain from securities transactions 1,041,242 Change in unrealized appreciation on investments (4,385,000) Net realized and unrealized gain (loss) on investments (3,343,758) Net increase in net assets resulting from operations $ 4,529,258
See accompanying notes to financial statements. TAX-FREE TRUST OF OREGON STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) OPERATIONS: Net investment income $ 7,873,016 $ 15,855,970 Net realized gain from securities transactions 1,041,242 898,940 Change in unrealized appreciation on investments (4,385,000) 5,060,852 Change in net assets resulting from operations 4,529,258 21,815,762 DISTRIBUTIONS TO SHAREHOLDERS (NOTE 6): Class A Shares: Net investment income (7,695,318) (15,702,552) Net realized gain on investments (603,490) (222,521) Class C Shares: Net investment income (29,189) (40,552) Net realized gain on investments (2,451) (571) Class Y Shares: Net investment income (268,285) (409,309) Net realized gain on investments (20,435) (4,740) Change in net assets from distributions (8,619,168) (16,380,245) CAPITAL SHARE TRANSACTIONS (NOTE 8): Proceeds from shares sold 19,969,005 34,355,105 Reinvested dividends and distributions 5,242,367 9,925,195 Cost of shares redeemed (15,601,249) (32,251,564) Change in net assets from capital share transactions 9,610,123 12,028,736 Change in net assets 5,520,213 17,464,253 NET ASSETS: Beginning of period 334,300,267 316,836,014 End of period $ 339,820,480 $ 334,300,267
SIX MONTHS ENDED YEAR ENDED MARCH 31, 1999 SEPT. 30, 1998
See accompanying notes to financial statements. TAX-FREE TRUST OF OREGON NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. ORGANIZATION Tax-Free Trust of Oregon (the "Trust") is a separate portfolio of The Cascades Trust. The Cascades Trust (the "Business Trust") is an open-end investment company, which was organized on October 17, 1985, as a Massachusetts business trust and is authorized to issue an unlimited number of shares. The Trust is a non-diversified portfolio which commenced operations on June 16, 1986 and until April 5, 1996, offered only one class of shares. On that date, the Trust began offering two additional classes of shares, Class C and Class Y shares. All shares outstanding prior to that date were designated as Class A shares and are sold with a front-payment sales charge and bear an annual service fee. Class C shares are sold with a level-payment sales charge with no payment at time of purchase but level service and distribution fees from date of purchase through a period of six years thereafter. A contingent deferred sales charge of 1% is assessed to any Class C shareholder who redeems shares of this Class within one year from the date of purchase. The Class Y shares are only offered to institutions acting for an investor in a fiduciary, advisory, agency, custodian or similar capacity and are not offered directly to retail investors. Class Y shares are sold at net asset value without any sales charge, redemption fees, contingent deferred sales charge or distribution or service fees. On January 31, 1998 the Trust established Class I shares, which are offered and sold only through financial intermediaries and are not offered directly to retail investors. At March 31, 1999 there were no Class I shares outstanding. All classes of shares represent interests in the same portfolio of investments in the Trust and are identical as to rights and privileges. They differ only with respect to the effect of sales charges, the distribution and/or service fees borne by the respective class, expenses specific to each class, voting rights on matters affecting a single class and the exchange privileges of each class. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles for investment companies. a) PORTFOLIO VALUATION: Municipal securities which have remaining maturities of more than 60 days are valued at fair value each business day based upon information provided by a nationally prominent independent pricing service and periodically verified through other pricing services; in the case of securities for which market quotations are readily available, securities are valued at the mean of bid and asked quotations and, in the case of other securities, at fair value determined under procedures established by and under the general supervision of the Board of Trustees. Securities which mature in 60 days or less are valued at amortized cost if their term to maturity at purchase was 60 days or less, or by amortizing their unrealized appreciation or depreciation on the 61st day prior to maturity, if their term to maturity at purchase exceeded 60 days. b) SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME: Securities transactions are recorded on the trade date. Realized gains and losses from securities transactions are reported on the identified cost basis. Interest income is recorded daily on the accrual basis and is adjusted for amortization of premium and accretion of original issue discount. Market discount is recognized upon disposition of the security. c) FEDERAL INCOME TAXES: It is the policy of the Trust to qualify as a regulated investment company by complying with the provisions of the Internal Revenue Code applicable to certain investment companies. The Trust intends to make distributions of income and securities profits sufficient to relieve it from all, or substantially all, Federal income and excise taxes. d) ALLOCATION OF EXPENSES: Expenses, other than class-specific expenses, are allocated daily to each class of shares based on the relative net assets of each class. Class-specific expenses, which include distribution and service fees and any other items that are specifically attributed to a particular class, are charged directly to such class. e) USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. 3. FEES AND RELATED PARTY TRANSACTIONS (a) MANAGEMENT ARRANGEMENTS: Aquila Management Corporation (the "Manager"), the Trust's founder and sponsor, serves as the Manager for the Trust under an Advisory and Administration Agreement with the Trust. The portfolio management of the Trust has been delegated to a sub-adviser as described below. Under the Advisory and Administrative Agreement, the Manager provides all administrative services to the Trust, other than those relating to the day-to-day portfolio management. The Manager's services include providing the office of the Trust and all related services as well as overseeing the activities of the sub-adviser and all the various support organizations to the Trust such as the shareholder servicing agent, custodian, legal counsel, auditors and distributor and additionally maintaining the Trust's accounting books and records. For its services, the Manager is entitled to receive a fee which is payable monthly and computed as of the close of business each day at the annual rate of 0.40 of 1% on the Trust's net assets. U.S. Bank National Association (the "Sub-Adviser"), serves as the Investment Sub-Adviser for the Trust under a Sub-Advisory Agreement between the Manager and the Sub-Adviser. Under this agreement, the Sub-Adviser continuously provides, subject to oversight of the Manager and the Board of Trustees of the Trust, the investment program of the Trust and the composition of its portfolio, arranges for the purchases and sales of portfolio securities, and provides for daily pricing of the Trust's portfolio. For its services, the Sub-Adviser is entitled to receive a fee from the Manager which is payable monthly and computed as of the close of business each day at the annual rate of 0.18 of 1% on the Trust's net assets. For the six months ended March 31, 1999, the Trust incurred fees for advisory and administrative services of $672,954. Specific details as to the nature and extent of the services provided by the Manager and the Sub-Adviser are more fully defined in the Trust's Prospectus and Statement of Additional Information. b) DISTRIBUTION AND SERVICE FEES: The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 (the "Rule") under the Investment Company Act of 1940. Under one part of the Plan, with respect to Class A Shares, the Trust is authorized to make service fee payments to broker-dealers or others ("Qualified Recipients") selected by Aquila Distributors, Inc. (the "Distributor"), including, but not limited to, any principal underwriter of the Trust, with which the Distributor has entered into written agreements contemplated by the Rule and which have rendered assistance in the distribution and/or retention of the Trust's shares or servicing of shareholder accounts. The Trust makes payment of this service fee at the annual rate of 0.15% of the Trust's average net assets represented by Class A Shares. For the six months ended March 31, 1999, service fees on Class A Shares amounted to $243,005, of which the Distributor received $7,607. Under another part of the Plan, the Trust is authorized to make payments with respect to Class C Shares to Qualified Recipients which have rendered assistance in the distribution and/or retention of the Trust's Class C shares or servicing of shareholder accounts. These payments are made at the annual rate of 0.75% of the Trust's net assets represented by Class C Shares and for the six months ended March 31, 1999, amounted to $5,707. In addition, under a Shareholder Services Plan, the Trust is authorized to make service fee payments with respect to Class C Shares to Qualified Recipients for providing personal services and/or maintenance of shareholder accounts. These payments are made at the annual rate of 0.25% of the Trust's net assets represented by Class C Shares and for the six months ended March 31, 1999, amounted to $1,902. The total of these payments made with respect to Class C Shares amounted to $7,609, of which the Distributor received $5,120. Specific details about the Plans are more fully defined in the Trust's Prospectus and Statement of Additional Information. Under a Distribution Agreement, the Distributor serves as the exclusive distributor of the Trust's shares. Through agreements between the Distributor and various broker-dealer firms ("dealers"), the Trust's shares are sold primarily through the facilities of these dealers having offices within Oregon, with the bulk of sales commissions inuring to such dealers. For the six months ended March 31, 1999, the Distributor received commissions of $85,078 on sales of Class A Shares. 4. PURCHASES AND SALES OF SECURITIES During the six months ended March 31, 1999, purchases of securities and proceeds from the sales of securities aggregated $36,140,631 and $29,555,356, respectively. At March 31, 1999, aggregate gross unrealized appreciation for all securities in which there is an excess of market value over tax cost amounted to $17,687,869, and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over market value amounted to $193,209, for a net unrealized appreciation of $17,494,660. 5. PORTFOLIO ORIENTATION Since the Trust invests principally and may invest entirely in double tax-free municipal obligations of issuers within Oregon, it is subject to possible risks associated with economic, political, or legal developments or industrial or regional matters specifically affecting Oregon and whatever effects these may have upon Oregon issuers' ability to meet their obligations. Two such developments, Measure 5, a 1990 amendment to the Oregon Constitution, as well as measures 47 and 50, limit the taxing and spending authority of certain Oregon governmental entities. Although they may have an adverse effect on the general financial condition of these entities and may impair the ability of certain Oregon issuer's to pay interest and principal on their obligations, experience over the history of such amendments would indicate a low probability of this happening. 6. DISTRIBUTIONS The Trust declares dividends daily from net investment income and makes payments monthly in additional shares at the net asset value per share or in cash, at the shareholder's option. Net realized capital gains, if any, are distributed annually. The Trust intends to maintain, to the maximum extent possible, the tax-exempt status of interest payments received from portfolio municipal securities in order to allow dividends paid to shareholders from net investment income to be exempt from regular Federal and State of Oregon income taxes. However, due to differences between financial statement reporting and Federal income tax reporting requirements, distributions made by the Trust may not be the same as the Trust's net investment income, and/or net realized securities gains. Further, a small portion of the dividends may, under some circumstances, be subject to taxes at ordinary income and/or capital gain rates. Also, annual capital gains distributions, if any, are taxable. 7. EXPENSES The Trust has negotiated an expense offset arrangement with its custodian, wherein it receives credit toward the reduction of custodian fees and other Trust expenses whenever there are uninvested cash balances.The Statement of Operations reflects the total expenses before any offset, the amount of offset and the net expenses. It is the general intention of the Trust to invest, to the extent practicable, some or all of cash balances in income-producing assets rather than leave cash on deposit. 8. CAPITAL SHARE TRANSACTIONS Transactions in Capital Shares of the Trust were as follows: CLASS A SHARES: Proceeds from shares sold 1,609,153 $ 17,379,193 2,478,110 $ 26,612,757 Reinvested dividends and distributions 475,947 5,137,066 907,937 9,756,708 Cost of shares redeemed (1,413,324) (15,255,277) (2,903,272) (31,179,164) Net change 671,776 7,260,982 482,775 5,190,301 CLASS C SHARES: Proceeds from shares sold 115,602 1,245,202 50,665 544,808 Reinvested dividends and distributions 1,596 17,211 1,209 12,994 Cost of shares redeemed (1,229) (13,335) (19,993) (213,501) Net change 115,969 1,249,078 31,881 344,301 CLASS Y SHARES: Proceeds from shares sold 124,668 1,344,610 670,706 7,197,540 Reinvested dividends and distributions 8,155 88,090 14,468 155,493 Cost of shares redeemed (30,891) (332,637) (80,210) (858,899) Net change 101,932 1,100,063 604,964 6,494,134 Total transactions in Trust shares 889,677 $ 9,610,123 1,119,620 $ 12,028,736
SIX MONTHS ENDED YEAR ENDED MARCH 31, 1999 SEPTEMBER 30, 1998 SHARES AMOUNT SHARES AMOUNT
TAX-FREE TRUST OF OREGON FINANCIAL HIGHLIGHTS (UNAUDITED) FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD Net Asset Value, Beginning of Period $10.86 $10.68 $10.49 $10.55 $10.20 $10.95 Income from Investment Operations: Net investment income 0.25 0.53 0.53 0.54 0.55 0.56 Net gain (loss) on securities (both realized and unrealized) (.08) 0.19 0.21 (0.05) 0.39 (0.75) Total from Investment Operations 0.17 0.72 0.74 0.49 0.94 (0.19) Less Distributions (note 6): Dividends from net investment income (0.28) (0.53) (0.54) (0.54) (0.55) (0.56) Distributions from capital gains (0.02) (0.01) (0.01) (0.01) (0.04) - Total Distributions (0.30) (0.54) (0.55) (0.55) (0.59) (0.56) Net Asset Value, End of Period $10.73 $10.86 $10.68 $10.49 $10.55 $10.20 Total Return (not reflecting sales charge)(%) 1.37+ 6.90 7.21 4.76 9.52 (1.77) Ratios/Supplemental Data Net Assets, End of Period ($ millions) 325.8 322 312 305 311 316 Ratio of Expenses to Average Net Assets (%) 0.71* 0.71 0.73 0.73 0.73 0.70 Ratio of Net Investment Income to Average Net Assets (%) 4.66* 4.83 5.01 5.15 5.37 5.26 Portfolio Turnover Rate (%) 8+ 7 5 10 13 11 The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of Expenses to Average Net Assets (%) 0.69* 0.69 0.72 0.72 0.71 0.68
CLASS A(1) SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/99 1998 1997 1996 1995 1994
(1) Designated as Class A Shares on April 5, 1996. + Not annualized. * Annualized. See accompanying notes to financial statements. FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD Net Asset Value, Beginning of Period $10.85 $10.67 $10.49 $10.34 $10.85 $10.68 $10.49 $10.34 Income from Investment Operations: Net investment income 0.20 0.43 0.43 0.22 0.26 0.54 0.54 0.27 Net gain (loss) on securities (both realized and unrealized) (0.08) 0.20 0.21 0.15 (0.09) 0.19 0.21 0.15 Total from Investment Operations 0.12 0.63 0.64 0.37 0.17 0.73 0.75 0.42 Less Distributions (note 6): Dividends from net investment income (0.23) (0.44) (0.45) (0.22) (0.28) (0.55) (0.55) (0.27) Distributions from capital gains (0.02) (0.01) (0.01) - (0.02) (0.01) (0.01) - Total Distributions (0.25) (0.45) (0.46) (0.22) (0.30) (0.56) (0.56) (0.27) Net Asset Value, End of Period $10.72 $10.85 $10.67 $10.49 $10.72 $10.85 $10.68 $10.49 Total Return (not reflecting sales charge) (%) 0.93+ 6.00 6.20 3.61+ 1.43+ 6.96 7.37 4.14+ Ratios/Supplemental Data Net Assets, End of Period ($ millions) 2.4 1.2 .8 .3 11.6 10.7 4.0 .2 Ratio of Expenses to Average Net Assets (%) 1.56* 1.56 1.58 1.56* 0.56* 0.55 0.58 0.58* Ratio of Net Investment Income to Average Net Assets (%) 3.74* 3.98 4.14 4.17* 4.80* 4.95 5.21 5.35* Portfolio Turnover Rate (%) 8+ 7 5 10+ 8+ 7 5 10+ The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of Expenses to Average Net Assets (%) 1.53* 1.54 1.57 1.56* 0.54* 0.53 0.57 0.57*
CLASS C(1) CLASS Y(1) SIX MONTHS YEAR YEAR PERIOD(2) SIX MONTHS YEAR YEAR PERIOD(2) ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED 3/31/99 9/30/98 9/30/97 9/30/96 3/31/99 9/30/98 9/30/97 9/30/96
(1) New Class of Shares established on April 5, 1996. (2) From April 5, 1996 to September 30, 1996. + Not annualized. * Annualized. See accompanying notes to financial statements. PREPARING FOR YEAR 2000 (UNAUDITED) The Trustees and officers of the Trust have been monitoring issues involving preparedness for the turn of the century for some time in an effort to minimize or eliminate any potential impact upon the Trust and its shareholders. Our officers have focussed significant time and effort in order that the various computerized functions that could affect the Trust are ready by the beginning of the year 2000. The Trust is highly reliant on certain mission-critical suppliers' services. Each supplier of these services has provided the Trust's officers with assurances that it is actively addressing potential problems relating to the year 2000. The officers, in turn, are monitoring and will continue to monitor the progress of its suppliers. As you can well understand, we cannot directly control our supplier operations. We assure you, however, that we recognize a responsibility to inform our shareholders if in the future we become aware of any developments which would lead us to believe that the Trust will be significantly affected by year 2000 problems. We will continue to keep you up-to-date through future communications. -----END PRIVACY-ENHANCED MESSAGE-----