0001045969-01-501180.txt : 20011009 0001045969-01-501180.hdr.sgml : 20011009 ACCESSION NUMBER: 0001045969-01-501180 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010731 FILED AS OF DATE: 20010928 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMSOUTH MUTUAL FUNDS CENTRAL INDEX KEY: 0000832544 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05551 FILM NUMBER: 1747729 BUSINESS ADDRESS: STREET 1: 3435 STELZER RD STREET 2: STE 1000 CITY: COLUMBUS STATE: OH ZIP: 43219 BUSINESS PHONE: 8004518382 MAIL ADDRESS: STREET 1: 3435 STELZER RD STREET 2: STE 1000 CITY: COLUMBUS STATE: OH ZIP: 43219 FORMER COMPANY: FORMER CONFORMED NAME: ASO OUTLOOK GROUP DATE OF NAME CHANGE: 19920703 N-30D 1 dn30d.txt AMSOUTH FUNDS ANNUAL REPORT ANNUAL REPORT CLASS A SHARES CLASS B SHARES TRUST SHARES JULY 31, 2001 AMSOUTH FUNDS AMSOUTH INVESTMENT MANAGEMENT COMPANY, LLC, INVESTMENT ADVISOR BISYS FUND SERVICES, DISTRIBUTOR NOT FDIC INSURED WWW.AMSOUTHFUNDS.COM AmSouth(R) Funds Table of Contents Management Discussion of Performance Message from the Chairman and Investment Advisor......................................... 3 Fund Summary Value Fund....................................... 4 Growth Fund...................................... 6 Capital Growth Fund.............................. 8 Large Cap Fund................................... 10 Mid Cap Fund..................................... 12 Small Cap Fund................................... 14 Equity Income Fund............................... 16 Balanced Fund.................................... 18 Select Equity Fund............................... 20 Enhanced Market Fund............................. 22 International Equity Fund........................ 24 Strategic Portfolios............................. 26 Bond Fund........................................ 32 Limited Term Bond Fund........................... 34 Government Income Fund........................... 36 Limited Term U.S. Government Fund................ 38 Municipal Bond Fund.............................. 40 Florida Tax-Exempt Fund.......................... 42 Tennessee Tax-Exempt Fund........................ 44 Limited Term Tennessee Tax-Exempt Fund........... 46 Money Market Funds............................... 48 Financial Statements Value Fund....................................... 49 Growth Fund...................................... 56 Capital Growth Fund.............................. 62 Large Cap Fund................................... 69 Mid Cap Fund..................................... 76 Small Cap Fund................................... 81 Equity Income Fund............................... 88 Balanced Fund.................................... 95 Select Equity Fund............................... 102 Enhanced Market Fund............................. 108 International Equity Fund........................ 118 Strategic Portfolios: Aggressive Growth Portfolio....................................... 125 Strategic Portfolios: Growth Portfolio........... 131 Strategic Portfolios: Growth and Income Portfolio....................................... 137 Strategic Portfolios: Moderate Growth and Income Portfolio....................................... 143 Bond Fund........................................ 149 Limited Term Bond Fund........................... 157 Government Income Fund........................... 164 Limited Term U.S. Government Fund................ 170 Municipal Bond Fund.............................. 176 Florida Tax-Exempt Fund.......................... 185 Tennessee Tax-Exempt Fund........................ 192 Limited Term Tennessee Tax-Exempt Fund........... 199 Prime Money Market Fund.......................... 204 U.S. Treasury Money Market Fund.................. 209 Treasury Reserve Money Market Fund............... 213 Tax-Exempt Money Market Fund..................... 217 Institutional Prime Obligations Money Market Fund............................................ 223 Notes to Financial Statements...................... 228 Report of Independent Auditors..................... 264
1 [This Page Intentionally Left Blank] 2 Message From the Chairman and Investment Advisor Dear Shareholders: We are pleased to send you this annual report for the 12 months ended July 31, 2001, a time that tested the patience of many equity investors, while most fixed-income shareholders were positively elated. It was also a year that proved, again, the value of portfolio diversification. As March 2000 dawned on Wall Street, stock investors, especially those owning shares of technology and telecommunications companies, were euphoric about the paper profits they had realized during the historic Bull Run of the market. Early that month, the Nasdaq Composite Index,/1/ home to most technology is- sues, reached an all-time high. Two weeks later, the S&P 500 Stock Index,/2/ a benchmark for the market as a whole, touched its highest levels ever. As we write this letter in early August 2001, such glories are simply footnotes in the stock market's volatile history. As of July 31, 2001, the S&P 500 Index lost 14.32%. Nasdaq had an even rougher time of it, plunging 46.19% during the fiscal year. Still, while many growth stocks, especially those in the technology and tele- communications sectors, retreated under the weight of unsustainable valuations and depressed earnings, other areas of the market prospered. Value stocks--for years, considered stodgy relics of a bygone, less technologically driven era-- regained their luster, and rewarded their faithful backers with handsome re- turns. Shareholders in a number of AmSouth's equity funds profited, as well. The AmSouth Value Fund, for example, had a splendid year. All four of our Stra- tegic Portfolios, whose managers shrewdly increased their allocation to the Value Fund as an underlying component, also did well. The AmSouth Select Equity Fund, which employs a "stable growth" style, produced a robust performance, ranking the Fund among the top 9% of all domestic equity mutual funds during the period. In contrast, for this period the Growth, Capital Growth and Mid Cap Funds--with their emphasis on technology stocks--experienced negative returns typical of the average mutual fund investing in the growth sector./3/ For all of the stock market's inconsistency over the last 12 months, the fixed- income arena was a haven for bond investors. Conditions were virtually perfect. Economic growth slowed dramatically, inflation remained benign, disillusioned equity investors fled to bonds for a measure of relative security and stabili- ty, and the Federal Reserve Board lowered short-term interest rates six times through July 31, 2001. All these elements produced a recipe for historically strong returns in nearly every type of fixed-income security, with the excep- tion of money market instruments, which perform better when short-term rates rise, not fall. So, what now? Without a doubt, the last 12 months have been unusually turbulent though not unprecedented, especially for equity investors who were spoiled by uncommonly strong returns in the last half of the 1990s. Bond investors have enjoyed the other side of these circumstances. Nevertheless, making money in the financial markets requires investors to look forward. With our eyes fixed on the horizon for the next six to 12 months, and beyond, we see signs that conditions could be changing for the better. Despite the lag- ging economy, worker productivity continues to be strong, indicating that gains created by new technologies over the last few years truly might be enduring, not transitory. In addition, corporate profits are not uniformly disappointing, especially outside the technology sector. The yield curve has returned to a positive slope, where longer bonds yield more than shorter securities. Whichever way the markets move, the last 12 months have reaffirmed the wisdom of using portfolio diversification to support your financial goals. We do this by allocating your assets among both stocks and bonds, and by owning shares of value equity funds as well as growth funds. While no investment strategy guar- antees success, history has shown us that diversification can potentially re- duce volatility, while producing positive price appreciation. In the months and years ahead, we will remain committed to helping you achieve your investment goals. We thank you for your past and future support. Sincerely, /s/ J David Huber J. David Huber Chairman AmSouth Funds Brian B. Sullivan President, AmSouth Investment Management Co., LLC Chief Investment Officer, AmSouth Bank Editor's note: This message and the re- ports that follow were written prior to the events of September 11, 2001. While it is far too early to assess the impact on the finan- cial sector, we join the nation in ex- tending our sympa- thies to those who were most deeply af- fected by the trage- dies of that day. /1/The Nasdaq Composite Index is a market capitalization price-only index that tracks the performance of domestic common stocks traded on the regular NASDAQ market as well as National Market System-traded foreign common stocks and ADR's. /2/The Standard & Poor's 500 Stock Index is an unmanaged index generally representative of the U.S. stock market as a whole. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. Investors cannot invest directly in an index, although they can invest in its underlying securities. /3/The AmSouth Select Equity Fund ranked 43 out of 514 funds in the domestic equity funds category for the one-year period, but was not ranked for the five- and 10-year periods. Lipper rankings are based on total return and do not include the effect of a sales charge. All rankings are as of 7/31/01. Investments in the Funds are neither guaranteed by, nor obligations of, AmSouth Bank or any other bank and are not insured by the FDIC or any other government agency. Investment in mutual funds involves risk, including the possible loss of principal. This material must be preceded or accompanied by a current pro- spectus. 3 AmSouth Value Fund Portfolio Manager Richard H. Calvert, CFA Vice President AmSouth Bank AmSouth Investment Management Company, LLC Richard has been a portfolio manager and analyst for more than seven years. He is a member of AmSouth Bank's value strategy group and the asset allocation committee. He holds a B.S. in economics. PORTFOLIO MANAGERS' PERSPECTIVE "The AmSouth Value Fund uses a 'value investing' aproach. Rather than pursue hot stocks that are in high demand, we search for solid companies with good fundamentals that are available at attractive prices. By adhering to this investment approach through entire market cycles, we seek to achieve above average long-term results with less volatility than the overall market." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the AmSouth Value Fund produced a to- tal return of 21.10% (Class A Shares at NAV). In comparison, the S&P 500 Stock Index produced a -14.32% return, while the Lipper Multi-Cap Value Funds Index gained 14.03%.+ Q. What factors affected your performance? A. However we look at it, the Fund enjoyed a spectacular year. We not only rode the "value wave" to performance that far exceeded the negative return of the S&P 500 Stock Index, but we outperformed our value benchmark, as well. The speculative bubble that inflated prices in many technology and telecommunica- tions stocks damaged the overall market during the past year. At the same time, the value sector performed admirably. Value investing prospered precisely be- cause it does focus on fundamental valuations, as opposed to the false promise of future profits that was floated by many technology companies. The Fund profited from our energy holdings, several of our specialty chemical stocks and selected business equipment names. In addition, some of the technol- ogy stocks we own also did well. From our perspective, a "value" stock does not have to be a low-growth company; it just has to present us with good valuation. Some of the technology stocks we bought during the period included Keane, Inc. (1.30% of net assets), Computer Associates International, Inc. (3.00%), and Cabletron Systems, Inc. (3.29%).++ As of July 31, 2001, the Fund's top five holdings were Cabletron Systems, Inc. (3.29% of net assets), Washington Mutual, Inc. (3.23%), Marsh & McLennan Cos., Inc. (3.06%), Computer Associates International, Inc. (3.00%), and St. Paul Cos., Inc. (2.77%).++ Q. What is your outlook for the next six to 12 months? A. We do not try to guess which way the market is going to go. We do continue to believe that the next 12 months will be much like the last 12, in that it's going to be a stock picker's market. We produced above-average returns in the last year and we hope to continue our success going forward. + The Lipper Multi-Cap Value Funds Index consists of managed mutual funds that, by portfolio practice, invest in a variety of market capitalization ranges, without concentrating more than 75% of their equity assets in any one market capitalization range over an extended period of time. ++The Fund's portfolio composition is subject to change. 4 AmSouth Value Fund Value of a $10,000 Investment [CHART] AmSouth Value AmSouth Value AmSouth Value Fund Fund Fund S&P 500 (Class A Shares)* (Class B Shares) (Trust Shares) Stock Index 7/31/1991 $ 9,451 $10,000 $10,000 $10,000 8/31/1991 9,476 10,021 10,027 10,235 9/30/1991 9,336 9,863 9,878 10,067 10/31/1991 9,424 9,947 9,971 10,202 11/30/1991 8,976 9,472 9,498 9,790 12/31/1991 9,889 10,422 10,463 10,909 1/31/1992 10,000 10,528 10,581 10,706 2/29/1992 10,207 10,739 10,799 10,843 3/31/1992 9,981 10,496 10,561 10,630 4/30/1992 10,385 10,908 10,988 10,940 5/31/1992 10,455 10,971 11,062 10,999 6/30/1992 10,247 10,750 10,842 10,839 7/31/1992 10,673 11,183 11,293 11,276 8/31/1992 10,289 10,771 10,887 11,048 9/30/1992 10,446 10,929 11,053 11,176 10/31/1992 10,490 10,961 11,099 11,216 11/30/1992 10,858 11,341 11,489 11,594 12/31/1992 10,910 11,383 11,544 11,746 1/31/1993 11,201 11,679 11,851 11,831 2/28/1993 11,362 11,837 12,022 11,991 3/31/1993 11,741 12,218 12,423 12,249 4/30/1993 11,777 12,249 12,461 11,949 5/31/1993 12,130 12,608 12,834 12,271 6/30/1993 12,101 12,566 12,804 12,312 7/31/1993 12,146 12,598 12,851 12,254 8/31/1993 12,606 13,073 13,339 12,721 9/30/1993 12,433 12,883 13,155 12,627 10/31/1993 12,643 13,083 13,377 12,883 11/30/1993 12,564 12,988 13,293 12,762 12/31/1993 12,916 13,347 13,666 12,919 1/31/1994 13,501 13,939 14,285 13,352 2/28/1994 13,180 13,601 13,945 12,991 3/31/1994 12,556 12,946 13,286 12,426 4/30/1994 12,625 12,999 13,358 12,588 5/31/1994 12,919 13,295 13,670 12,793 6/30/1994 12,746 13,105 13,487 12,477 7/31/1994 13,107 13,464 13,868 12,890 8/31/1994 13,509 13,865 14,294 13,414 9/30/1994 13,224 13,559 13,992 13,091 10/31/1994 13,376 13,706 14,153 13,391 11/30/1994 12,800 13,105 13,543 12,900 12/31/1994 12,964 13,263 13,717 13,088 1/31/1995 13,208 13,506 13,975 13,428 2/28/1995 13,772 14,065 14,572 13,949 3/31/1995 14,179 14,467 15,004 14,362 4/30/1995 14,718 15,005 15,573 14,780 5/31/1995 15,127 15,417 16,006 15,364 6/30/1995 15,150 15,428 16,031 15,725 7/31/1995 15,631 15,903 16,539 16,248 8/31/1995 15,661 15,913 16,572 16,292 9/30/1995 15,985 16,230 16,914 16,975 10/31/1995 15,698 15,924 16,611 16,916 11/30/1995 16,321 16,547 17,270 17,660 12/31/1995 16,515 16,727 17,475 17,987 1/31/1996 17,009 17,212 17,998 18,605 2/29/1996 17,223 17,413 18,224 18,784 3/31/1996 17,671 17,856 18,698 18,964 4/30/1996 18,222 18,395 19,281 19,243 5/31/1996 18,425 18,585 19,496 19,739 6/30/1996 18,264 18,405 19,326 19,820 7/31/1996 17,362 17,487 18,372 18,938 8/31/1996 17,957 18,068 19,001 19,340 9/30/1996 18,353 18,458 19,420 20,427 10/31/1996 18,280 18,363 19,343 20,987 11/30/1996 19,355 19,430 20,481 22,579 12/31/1996 19,114 19,176 20,227 22,137 1/31/1997 19,848 19,894 21,002 23,512 2/28/1997 20,505 20,539 21,698 23,702 3/31/1997 20,086 20,095 21,255 22,716 4/30/1997 20,566 20,560 21,762 24,072 5/31/1997 22,086 22,059 23,371 25,550 6/30/1997 22,919 22,872 24,252 26,690 7/31/1997 24,715 24,646 26,153 28,809 8/31/1997 23,853 23,770 25,241 27,207 9/30/1997 25,339 25,238 26,818 28,697 10/31/1997 24,036 23,945 25,445 27,739 11/30/1997 24,818 24,703 26,278 29,023 12/31/1997 25,288 25,157 26,746 29,522 1/31/1998 25,368 25,225 26,847 29,850 2/28/1998 27,188 27,013 28,768 32,003 3/31/1998 28,641 28,434 30,314 33,642 4/30/1998 28,379 28,170 30,055 33,980 5/31/1998 28,291 28,056 29,968 33,396 6/30/1998 28,591 28,336 30,280 34,752 7/31/1998 27,765 27,499 29,411 34,382 8/31/1998 24,050 23,808 25,488 29,411 9/30/1998 25,568 25,287 27,093 31,295 10/31/1998 27,745 27,429 29,409 33,841 11/30/1998 29,080 28,725 30,832 35,892 12/31/1998 29,742 29,357 31,595 37,960 1/31/1999 29,769 29,367 31,630 39,548 2/28/1999 29,115 28,704 30,941 38,318 3/31/1999 29,896 29,457 31,778 39,852 4/30/1999 32,124 31,639 34,152 41,395 5/31/1999 32,210 31,701 34,248 40,418 6/30/1999 32,943 32,393 35,035 42,661 7/31/1999 31,907 31,358 33,949 41,329 8/31/1999 30,873 30,315 32,843 41,124 9/30/1999 29,295 28,751 31,186 39,997 10/31/1999 30,589 30,000 32,555 42,528 11/30/1999 30,295 29,689 32,249 43,393 12/31/1999 30,891 30,275 32,864 45,949 1/31/2000 29,116 28,506 30,977 43,640 2/29/2000 27,136 26,551 28,877 42,814 3/31/2000 30,472 29,805 32,423 47,003 4/30/2000 30,113 29,437 32,057 45,588 5/31/2000 30,621 29,903 32,586 44,653 6/30/2000 28,831 28,138 30,699 45,754 7/31/2000 29,295 28,580 31,194 45,038 8/31/2000 31,365 30,578 33,404 47,836 9/30/2000 31,492 30,669 33,527 45,311 10/31/2000 32,237 31,377 34,325 45,119 11/30/2000 31,101 30,257 33,082 41,562 12/31/2000 32,460 31,556 34,552 41,765 1/31/2001 34,336 33,361 36,554 43,247 2/28/2001 33,669 32,687 35,829 39,303 3/31/2001 32,659 31,699 34,775 36,814 4/30/2001 34,959 33,897 37,213 39,674 5/31/2001 35,986 34,868 38,313 39,940 6/30/2001 35,717 34,595 38,032 38,968 7/31/2001 35,477 34,323 37,777 38,585 The Class B contingent deferred sales charge (CDSC) is not included in the above graph, since the performance is for more than six years and the CDSC would no longer apply. Average Annual Total Return As of Inception 1 5 10 July 31, 2001 Date Year Year Year ----------------------------------------------------------------- Class A Shares* 12/1/88 14.42% 14.06% 13.50% ----------------------------------------------------------------- Class B Shares** 9/3/97/1/ 15.09% 14.20% 13.12% ----------------------------------------------------------------- Trust Shares 9/2/97/1/ 21.10% 15.51% 14.21% ----------------------------------------------------------------- *Reflects maximum 5.50% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 7/31/91 to 7/31/01 versus a similar investment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Value Fund is measured against the S&P 500 Stock Index, an unmanaged index generally representative of the U.S. stock market as a whole. The index does not reflect the deduction of fees associ- ated with a mutual fund, such as investment management fees. The Fund's per- formance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisor waived and/or re- imbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. /1/Performance for the Class B and Trust Shares, which commenced operations on 9/3/97 and 9/2/97, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Effective 12/1/99, the Classic and Premier Shares were renamed Class A and Trust Shares, respectively. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 5 AmSouth Growth Fund Portfolio Manager Dennis A. Johnson, CFA President and Chief Investment Officer, Peachtree Asset Management (sub- advisor) Dennis has a B.S. in economics and an M.S. in finance. His 20 years of investment experience are backed by an investment team with an average of 11 years of experience. PORTFOLIO MANAGER'S PERSPECTIVE "The AmSouth Growth Fund uses a well defined and rigorously proven investment process to select domestic large capitalization growth stocks. We buy companies we feel can sustain above average growth in operating earnings per share. We sell a stock when we feel it is overvalued or when it experiences sustained deterioration in its earnings or fundamentals." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund produced a total return of -32.44% (Class A Shares at NAV). In comparison, the S&P 500 Stock Index pro- duced a -14.32% return. Q. What factors affected your performance? A. The past year was difficult for the market in general, and especially tough on growth stocks. The Fund's performance was hurt by three sectors in particu- lar: consumer cyclicals, financials, and technology. Each area had a signifi- cant, negative impact on our portfolio, which offset the success we enjoyed from our health-care, utility and consumer staples holdings. We are, however, long-term investors with investment horizons that stretch out three to five years, and longer. With this in mind, we have viewed selected de- clines in the market as excellent buying opportunities; we continue to seek out attractive companies in industries that have been beaten down in recent months. Specifically, we think technology continues to be an area that remains high on our list. We are positioning the technology portion of the portfolio to capi- talize on what we anticipate to be the next move. It is also important to point out that our investments in technology, as well as in other sectors, are extremely diversified. We have exposure to semiconduc- tor, software, network and Internet-related companies. The same broad diversi- fication is evident in our financial holdings, which include brokerage compa- nies, regional banks, money center banks and credit card companies. As of July 31, 2001, the Fund's top five holdings were MBNA Corp. (3.30% of net assets), Boeing Co. (3.23%), AOL-Time Warner, Inc. (3.20%), Capital One Finan- cial Corp. (3.10%), and Lehman Brothers Holdings, Inc. (2.65%).++ Q. What is your outlook for the next six to 12 months? A. Going forward, we believe the market will do better than it did over the last 12 months. Obviously, there is a great deal of pessimism among many in- vestors related to the economic environment and corporate profits; these con- cerns are no surprise to anyone, in light of the Fed's tightening throughout 2000. However, at some point in the near future, we will look back at this par- ticular juncture and realize that circumstances were not as dire as stock prices are suggesting. We anticipate that the economic backdrop should improve; and the liquidity that is being provided by the Fed could help the domestic economy. This should be positive for stocks in general, and we believe that the areas of the market on which we are focusing have the opportunity to do well. ++The Fund's portfolio composition is subject to change. 6 AmSouth Growth Fund Value of a $10,000 Investment [CHART] AmSouth Growth AmSouth Growth Fun AmSouth Growth Fund Fund Fund Fund S&P 500 (Class A Shares)* (Class B Shares)** (Trust Shares) Stock Index 8/3/1997 $ 9,452 $10,000 $10,000 $10,000 8/31/1997 9,026 9,540 9,550 9,440 9/30/1997 9,499 10,040 10,050 9,957 10/31/1997 9,093 9,600 9,620 9,624 11/30/1997 9,338 9,860 9,890 10,070 12/31/1997 9,546 10,070 10,110 10,242 1/31/1998 9,584 10,110 10,150 10,356 2/28/1998 10,425 10,980 11,040 11,103 3/31/1998 10,888 11,470 11,540 11,671 4/30/1998 10,851 11,420 11,500 11,789 5/31/1998 10,595 11,140 11,230 11,586 6/30/1998 11,115 11,690 11,790 12,057 7/31/1998 10,983 11,540 11,650 11,928 8/31/1998 8,885 9,330 9,430 10,206 9/30/1998 9,820 10,300 10,410 10,857 10/31/1998 10,709 11,230 11,360 11,741 11/30/1998 11,399 11,950 12,100 12,453 12/31/1998 12,802 13,404 13,594 13,170 1/31/1999 13,497 14,120 14,330 13,720 2/28/1999 12,678 13,263 13,463 13,294 3/31/1999 13,135 13,727 13,947 13,826 4/30/1999 13,040 13,626 13,856 14,361 5/31/1999 12,525 13,071 13,302 14,022 6/30/1999 13,754 14,351 14,622 14,800 7/31/1999 13,373 13,958 14,219 14,338 8/31/1999 13,249 13,827 14,098 14,267 9/30/1999 13,116 13,676 13,957 13,876 10/31/1999 14,240 14,845 15,156 14,754 11/30/1999 14,640 15,248 15,579 15,057 12/31/1999 15,162 15,780 16,131 15,941 1/31/2000 14,500 15,079 15,431 15,140 2/29/2000 15,132 15,728 16,110 14,853 3/31/2000 16,604 17,244 17,677 16,306 4/30/2000 16,120 16,742 17,176 15,816 5/31/2000 14,944 15,508 15,922 15,491 6/30/2000 15,270 15,832 16,267 15,873 7/31/2000 14,747 15,278 15,713 15,625 8/31/2000 16,149 16,721 17,207 16,596 9/30/2000 15,201 15,728 16,204 15,719 10/31/2000 15,043 15,561 16,037 15,653 11/30/2000 12,396 12,810 13,206 14,419 12/31/2000 12,320 12,731 13,150 14,489 1/31/2001 13,030 13,149 13,899 15,004 2/28/2001 10,761 11,109 11,491 13,637 3/31/2001 9,481 9,785 10,127 12,773 4/30/2001 10,926 11,258 11,665 13,765 5/31/2001 10,584 10,893 11,290 13,857 6/30/2001 10,571 10,879 11,277 13,520 7/31/2001 9,962 10,017 10,635 13,388 Average Annual Total Return As of Inception 1 Since July 31, 2001 Date Year Inception -------------------------------------------------------- Class A Shares* 8/3/97 -36.16% -0.09% -------------------------------------------------------- Class B Shares** 9/3/97/1/ -35.54% 0.04% -------------------------------------------------------- Trust Shares 9/2/97/1/ -32.32% 1.56% -------------------------------------------------------- *Reflects maximum 5.50% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 8/3/97 to 7/31/01 in the indicated share class, versus a similar in- vestment in the Fund's benchmark, and represents the reinvestment of divi- dends and capital gains in the Fund. The performance of the AmSouth Growth Fund is measured against the S&P 500 Stock Index, an unmanaged index generally representative of the U.S. stock market as a whole. The index does not reflect the deduction of fees associ- ated with a mutual fund, such as investment management fees. The Fund's per- formance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reim- bursements not been in effect, performance quoted would have been lower. /1/Performance for the Class B and Trust Shares, which commenced operations on 9/3/97 and 9/2/97, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Effective 12/1/99, the Classic and Premier Shares were renamed Class A and Trust Shares, respectively. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 7 AmSouth Capital Growth Fund Portfolio Manager Charles E. Winger, Sr., CFA Senior Vice President AmSouth Bank AmSouth Investment Management Company, LLC Charley has more than 30 years of investment management experience. He earned a Chartered Financial Analyst designation and holds his M.B.A. and a B.A. in psychology from the University of Tennessee. PORTFOLIO MANAGER'S PERSPECTIVE "As a growth-oriented fund, the Capital Growth Fund focuses on industry leaders with high earnings per share. We generally look for annual earnings growth of 15% or higher. After identifying strong themes, such as technology or health care, we select companies that have financial strength, good return on equity, reasonable debt-to-equity ratios and strong revenue growth. We apply sell discipline through price targets and downside alerts." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund's total return was -21.27% (Class A Shares at NAV). In comparison, the S&P 500 Stock Index produced a -14.32% return, and the Lipper Growth Funds Index returned -22.92%.+ Q. What factors affected your performance? A. Several factors affected our performance: On one side was the disaster in technology and telecommunication stocks, and on the other side, most sectors-- apart from technology and telecommunications--produced a modestly positive re- turn. Not surprisingly, what hurt the Fund was our weighting in technology. At the end of the period, we were overweighted in technoloy; this reflected our growth style of investing and our belief that select tech- nology issues offer attractive, long-term potential. On the positive side, the Fund profited from overweightings in health-care, capital industrials and consumer discretionary (specialty retail) names. Those three areas did well for us during the period. As of July 31, 2001, the Fund's top five holdings were Pfizer, Inc. (2.90% of net assets), Forest Laboratories, Inc. (2.88%), Cardinal Health, Inc. (2.81%), Citigroup, Inc. (2.68%) and Stryker Corp. (2.65%).++ Q. What is your outlook for the next six to 12 months? A. We are optimistic. The conditions we see in the stock market today are com- pletely opposite to what we had 12 months ago. First, instead of higher inter- est rates in our faces, we have significantly lower rates, which should stimu- late the economy and lead to higher stock prices. Second, a year ago, a tax cut was only a possibility, and now we have it. And third, energy prices are much lower than they were in the summer of 2000; the reduction in energy prices is like putting money in the consumer's pocket. The weakness in the economy has been confined pretty much to the manufacturing sector, specifically technology. The consumer has been holding up well, contin- uing to spend. We believe consumer spending will remain strong, particularly with the tax cut proceeds now available for spending. By year-end, we expect to see firm evidence of an economic recovery, though the technology sector might take another six months to get back on track. + The Lipper Growth Funds Index consists of managed mutual funds that nor- mally invest in companies with long-term earnings expected to grow signifi- cantly faster than the earnings of the stocks represented in the major un- managed stock indices. ++The Fund's portfolio composition is subject to change. 8 AmSouth Capital Growth Fund Value of a $10,000 Investment [CHART] AmSouth AmSouth AmSouth Capital Capital Capital Growth Fund Growth Fund Growth Fund S&P 500 (Class A Shares)* (Class B Shares) (Trust Shares) Stock Index 7/31/1991 $ 9,447 $10,000 $10,000 $10,000 8/31/1991 9,652 10,218 10,217 10,235 9/30/1991 9,352 9,891 9,900 10,067 10/31/1991 9,558 10,091 10,117 10,202 11/30/1991 9,226 9,746 9,766 9,790 12/31/1991 10,221 10,780 10,819 10,909 1/31/1992 9,953 10,490 10,535 10,706 2/29/1992 10,000 10,526 10,585 10,843 3/31/1992 9,795 10,309 10,368 10,630 4/30/1992 9,858 10,363 10,435 10,940 5/31/1992 9,921 10,417 10,502 10,999 6/30/1992 9,526 10,000 10,084 10,839 7/31/1992 9,810 10,290 10,385 11,276 8/31/1992 9,652 10,109 10,217 11,048 9/30/1992 9,968 10,436 10,552 11,176 10/31/1992 10,190 10,653 10,786 11,216 11/30/1992 10,616 11,089 11,237 11,594 12/31/1992 10,885 11,361 11,522 11,746 1/31/1993 11,074 11,561 11,722 11,831 2/28/1993 11,011 11,488 11,656 11,991 3/31/1993 11,327 11,797 11,990 12,249 4/30/1993 10,821 11,270 11,455 11,949 5/31/1993 11,027 11,470 11,672 12,271 6/30/1993 10,964 11,397 11,605 12,312 7/31/1993 11,011 11,434 11,656 12,254 8/31/1993 11,248 11,670 11,906 12,721 9/30/1993 11,311 11,724 11,973 12,627 10/31/1993 11,185 11,579 11,839 12,883 11/30/1993 11,090 11,470 11,739 12,762 12/31/1993 11,264 11,652 11,923 12,919 1/31/1994 11,706 12,087 12,391 13,352 2/28/1994 11,548 11,924 12,224 12,991 3/31/1994 11,058 11,397 11,706 12,426 4/30/1994 10,979 11,307 11,622 12,588 5/31/1994 11,043 11,361 11,689 12,793 6/30/1994 10,695 10,998 11,321 12,477 7/31/1994 10,964 11,270 11,605 12,890 8/31/1994 11,469 11,779 12,140 13,414 9/30/1994 11,248 11,543 11,906 13,091 10/31/1994 11,374 11,670 12,040 13,391 11/30/1994 10,995 11,270 11,639 12,900 12/31/1994 11,216 11,488 11,873 13,088 1/31/1995 11,517 11,779 12,191 13,428 2/28/1995 11,959 12,214 12,659 13,949 3/31/1995 12,243 12,505 12,960 14,362 4/30/1995 12,227 12,468 12,943 14,780 5/31/1995 12,670 12,922 13,411 15,364 6/30/1995 12,844 13,085 13,595 15,725 7/31/1995 13,491 13,739 14,281 16,248 8/31/1995 13,365 13,593 14,147 16,292 9/30/1995 13,870 14,102 14,682 16,975 10/31/1995 13,776 13,993 14,582 16,916 11/30/1995 14,534 14,737 15,385 17,660 12/31/1995 14,629 14,828 15,485 17,987 1/31/1996 15,197 15,390 16,087 18,605 2/29/1996 15,577 15,771 16,488 18,784 3/31/1996 15,798 15,971 16,722 18,964 4/30/1996 16,224 16,388 17,174 19,243 5/31/1996 16,509 16,661 17,475 19,739 6/30/1996 16,493 16,642 17,458 19,820 7/31/1996 15,482 15,608 16,388 18,938 8/31/1996 15,782 15,898 16,706 19,340 9/30/1996 16,651 16,751 17,625 20,427 10/31/1996 17,362 17,459 18,378 20,987 11/30/1996 18,389 18,475 19,465 22,579 12/31/1996 17,883 17,949 18,930 22,137 1/31/1997 18,847 18,893 19,950 23,512 2/28/1997 18,562 18,603 19,649 23,702 3/31/1997 17,705 17,731 18,742 22,716 4/30/1997 18,828 18,838 19,930 24,072 5/31/1997 19,998 19,982 21,168 25,550 6/30/1997 20,782 20,762 21,998 26,690 7/31/1997 22,570 22,523 23,891 28,809 8/31/1997 21,447 21,379 22,702 27,207 9/30/1997 22,575 22,486 23,897 28,697 10/31/1997 22,084 21,978 23,377 27,739 11/30/1997 22,734 22,613 24,064 29,023 12/31/1997 23,389 23,249 24,547 29,522 1/31/1998 23,517 23,358 24,683 29,850 2/28/1998 25,363 24,936 26,637 32,003 3/31/1998 26,550 26,098 27,899 33,642 4/30/1998 26,459 25,989 27,802 33,980 5/31/1998 25,418 24,955 26,719 33,396 6/30/1998 26,715 26,207 28,079 34,752 7/31/1998 26,952 26,407 28,330 34,382 8/31/1998 23,371 22,886 24,576 29,411 9/30/1998 25,186 24,652 26,500 31,295 10/31/1998 26,559 25,979 27,934 33,841 11/30/1998 27,840 27,215 29,291 35,892 12/31/1998 30,887 30,162 32,502 37,960 1/31/1999 32,453 31,701 34,163 39,548 2/28/1999 31,583 30,834 33,240 38,318 3/31/1999 32,496 31,701 34,209 39,852 4/30/1999 32,279 31,462 34,001 41,395 5/31/1999 31,126 30,335 32,802 40,418 6/30/1999 33,540 32,676 35,339 42,661 7/31/1999 32,931 32,069 34,693 41,329 8/31/1999 32,431 31,571 34,186 41,124 9/30/1999 31,806 30,948 33,547 39,997 10/31/1999 33,271 32,342 35,077 42,528 11/30/1999 34,581 33,603 36,466 43,393 12/31/1999 37,637 36,530 39,681 45,949 1/31/2000 36,275 35,193 38,263 43,640 2/29/2000 36,248 35,167 38,263 42,814 3/31/2000 39,863 38,654 42,078 47,003 4/30/2000 38,841 37,658 41,021 45,588 5/31/2000 37,768 36,583 39,881 44,653 6/30/2000 39,287 38,025 41,466 45,754 7/31/2000 39,208 37,920 41,410 45,038 8/31/2000 41,661 40,298 44,015 47,836 9/30/2000 41,096 39,731 43,444 45,311 10/31/2000 40,800 39,407 43,101 45,119 11/30/2000 38,243 36,926 40,443 41,562 12/31/2000 37,378 36,058 39,524 41,765 1/31/2001 37,406 36,087 39,554 43,247 2/28/2001 33,285 32,090 35,206 39,303 3/31/2001 29,476 28,407 31,190 36,814 4/30/2001 32,574 31,376 34,451 39,674 5/31/2001 32,603 31,376 34,481 39,940 6/30/2001 31,693 30,491 33,545 38,968 7/31/2001 30,869 29,663 32,670 38,585 The Class B contingent deferred sales charge (CDSC) is not included in the above graph, since the performance is for more than six years and the CDSC would no longe apply. ------------------------------------------------------------------------------- - Average Annual Total Return ------------------------------------------------------------------------------- - As of Inception 1 5 10 July 31, 2001 Date Year Year Year ----------------------------------------------------------------- Class A Shares* 4/1/96/1/ -25.59% 13.51% 11.93% ----------------------------------------------------------------- Class B Shares** 2/5/98/2/ -25.37% 13.46% 11.49% ----------------------------------------------------------------- Trust Shares 10/3/97/2/ -21.11% 14.80% 12.57% ----------------------------------------------------------------- *Reflects maximum 5.50% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 7/31/91 to 7/31/01 in the indicated share class versus a similar in- vestment in the Fund's benchmark, and represents the reinvestment of divi- dends and capital gains in the Fund. Performance of the AmSouth Capital Growth Fund is measured against the S&P 500 Stock Index, an unmanaged index generally representative of the U.S. stock market as a whole. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. The quoted returns reflect the performance from 4/1/96 to 3/12/00 of the ISG Capital Growth Fund, an open-end investment company that was the predecessor fund to the AmSouth Capital Growth Fund. /1/The ISG Capital Growth Fund commenced operations on 4/1/96, through a transfer of assets from certain collective trust fund ("commingled") ac- counts managed by First American National Bank, using substantially the same investment objective, policies and methodologies as the Fund. The quoted performance of the Fund includes performance of the commingled ac- counts for periods dating back to 7/31/91, and prior to the mutual fund's commencement of operations, as adjusted to reflect the expenses associ- ated with the Fund. The commingled accounts were not registered with the Securities and Exchange Commission and, therefore, were not subject to the investment restrictions imposed by law on registered mutual funds. If the commingled accounts had been registered, the commingled accounts' performance may have been adversely affected. /2/Performance for the Class B and Trust Shares, which commenced operations on 2/5/98 and 10/3/97, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 9 AmSouth Large Cap Fund Portfolio Manager Ronald E. Lindquist Senior Vice President AmSouth Bank AmSouth Investment Management Company, LLC Ron has more than 30 years of investment management experience. He has a master's degree in management from Florida International University and a B.S. in finance from Florida State University. PORTFOLIO MANAGER'S PERSPECTIVE "The AmSouth Large Cap Fund is managed in a classic large-cap growth style. Our goal is to outperform the S&P 500 over multiple market cycles. We look for industry leaders that have relatively predictable 3-to-5 year earnings streams. We select large-company stocks with superior earnings rates and appropriate price/earnings ratios. We sell when a stock's relative price/earnings levels are well in excess of the market or when a significant earnings stream deterioration is in forecast." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund's total return was -11.72% (Class A Shares at NAV). In comparison, the S&P's 500 Stock Index produced a -14.32% return. Q. What factors affected your performance? A. This was a very challenging period for the market as a whole, and for large- cap growth stocks in particular. Nonetheless, although we are classic growth managers, and despite the fact that we bought more technology shares during the period--when the technology sector was languishing--we were able to preserve shareholder value, relative to our benchmark. Our relatively good performance was due partly to good fortune and partly to judicious stock selection in the sectors we favored. For example, we benefited from our significant holdings among consumer discretionary and consumer staple stocks. We did well with Philip Morris Cos., Inc. (0.74% of net assets), along with health care names such as Johnson & Johnson (4.39%), Abbott Laboratories (2.61%), and American Home Products Corp. (1.96%).++ During the last six months, we sold our modest position in Heinz and added some new holdings to the portfolio: Citigroup, Inc. (0.41%), AFLAC, Inc. (0.48%), Bristol-Myers Squibb Co. (1.15%), and General Dynamics Corp. (0.98%), and with these changes, the Fund now owns 69 stocks.++ As of July 31, 2001, the Fund's top five holdings were Johnson & Johnson (4.39% of net assets), IBM Corp. (3.41%), Merck & Co., Inc. (3.31%), Home Depot, Inc. (2.86%), and Schering-Plough Corp. (2.85%).++ Q. What is your outlook for the next six to 12 months? A. Looking forward, we believe it's going to be some time before the gross do- mestic product growth rate perks up to the level we experienced the last few years. However, on the positive side, we do not expect interest rates or in- flation to be a problem any time soon. From our point of view, the overall en- vironment looks pretty good, except for the lack of "visibility" of earnings, especially in the technology sector. Investors' lack of confidence in future earnings could continue to be a drag on stocks for several more calendar quar- ters. When investor confidence improves and the market does recover, our sig- nificant technology exposure should greatly benefit our investors, but the wait seems just maddening. ++The Fund's portfolio composition is subject to change. 10 AmSouth Large Cap Fund Value of a $10,000 Investment [CHART] AmSouth AmSouth AmSouth Large Cap Large Cap Large Cap Fund (Class Fund (Class Fund (Trust S&P 500 A Shares)* B Shares) Shares) Stock Index 8/3/1992 $ 9,452 $10,000 $10,000 $10,000 8/31/1992 9,329 9,862 9,870 9,795 9/30/1992 9,440 9,965 9,988 9,910 10/31/1992 9,526 10,046 10,078 9,945 11/30/1992 9,924 10,461 10,500 10,283 12/31/1992 9,980 10,507 10,559 10,410 1/31/1993 9,961 10,484 10,539 10,497 2/28/1993 10,057 10,576 10,640 10,640 3/31/1993 10,129 10,645 10,716 10,864 4/30/1993 9,746 10,230 10,311 10,601 5/31/1993 10,062 10,553 10,646 10,885 6/30/1993 9,881 10,357 10,454 10,917 7/31/1993 9,823 10,288 10,393 10,873 8/31/1993 10,179 10,645 10,769 11,286 9/30/1993 9,943 10,392 10,519 11,199 10/31/1993 10,376 10,841 10,978 11,431 11/30/1993 10,415 10,864 11,019 11,322 12/31/1993 10,539 10,991 11,150 11,459 1/31/1994 10,704 11,152 11,325 11,848 2/28/1994 10,558 10,991 11,171 11,527 3/31/1994 10,135 10,541 10,723 11,024 4/30/1994 10,174 10,576 10,764 11,165 5/31/1994 10,262 10,657 10,857 11,349 6/30/1994 9,977 10,346 10,555 11,071 7/31/1994 10,124 10,495 10,711 11,434 8/31/1994 10,586 10,968 11,200 11,903 9/30/1994 10,379 10,737 10,981 11,612 10/31/1994 10,764 11,129 11,388 11,873 11/30/1994 10,527 10,876 11,137 11,440 12/31/1994 10,726 11,071 11,348 11,610 1/31/1995 11,047 11,394 11,687 11,911 2/28/1995 11,427 11,774 12,090 12,375 3/31/1995 11,714 12,062 12,393 12,740 4/30/1995 12,075 12,431 12,776 13,116 5/31/1995 12,387 12,742 13,106 13,640 6/30/1995 12,661 13,007 13,396 13,957 7/31/1995 13,126 13,479 13,887 14,419 8/31/1995 12,964 13,295 13,716 14,456 9/30/1995 13,561 13,894 14,347 15,066 10/31/1995 13,854 14,182 14,657 15,012 11/30/1995 14,350 14,689 15,182 15,671 12/31/1995 14,479 14,804 15,319 15,973 1/31/1996 15,091 15,415 15,966 16,516 2/29/1996 15,280 15,599 16,167 16,670 3/31/1996 15,024 15,323 15,896 16,830 4/30/1996 15,236 15,530 16,120 17,078 5/31/1996 15,564 15,853 16,466 17,519 6/30/1996 15,562 15,829 16,465 17,585 7/31/1996 14,894 15,138 15,758 16,808 8/31/1996 15,138 15,369 16,016 17,163 9/30/1996 16,137 16,371 17,073 18,130 10/31/1996 16,201 16,429 17,140 18,629 11/30/1996 17,475 17,707 18,489 20,037 12/31/1996 17,031 17,235 18,019 19,640 1/31/1997 18,119 18,329 19,170 20,867 2/28/1997 18,152 18,341 19,205 21,031 3/31/1997 17,498 17,673 18,513 20,167 4/30/1997 18,752 18,917 19,839 21,370 5/31/1997 19,842 20,012 20,993 22,672 6/30/1997 20,663 20,818 21,861 23,689 7/31/1997 22,377 22,523 23,675 25,573 8/31/1997 21,220 21,348 22,451 24,140 9/30/1997 22,166 22,281 23,451 25,461 10/31/1997 21,520 21,613 22,769 24,611 11/30/1997 22,811 22,903 24,134 25,750 12/31/1997 23,150 23,226 24,493 26,193 1/31/1998 23,767 23,825 25,146 26,482 2/28/1998 25,366 25,415 26,837 28,392 3/31/1998 26,087 26,094 27,600 29,847 4/30/1998 26,297 26,290 27,822 30,147 5/31/1998 25,910 25,887 27,413 29,629 6/30/1998 27,185 27,143 28,761 30,832 7/31/1998 27,118 27,051 28,691 30,504 8/31/1998 23,927 23,848 25,315 26,100 9/30/1998 25,568 25,472 27,051 27,765 10/31/1998 27,771 27,638 29,381 30,024 11/30/1998 29,607 29,447 31,324 31,845 12/31/1998 31,917 31,731 33,758 33,678 1/31/1999 33,470 33,252 35,401 35,086 2/28/1999 32,265 32,042 34,126 33,996 3/31/1999 32,806 32,549 34,697 35,357 4/30/1999 32,620 32,342 34,501 36,725 5/31/1999 32,076 31,777 33,925 35,858 6/30/1999 34,328 33,978 36,307 37,848 7/31/1999 33,771 33,402 35,718 36,666 8/31/1999 33,748 33,356 35,694 36,485 9/30/1999 32,994 32,584 34,895 35,485 10/31/1999 34,269 33,828 36,257 37,730 11/30/1999 36,112 35,614 38,194 38,506 12/31/1999 37,933 37,373 40,118 40,765 1/31/2000 36,714 36,147 38,829 38,716 2/29/2000 35,712 35,137 37,784 37,984 3/31/2000 38,305 37,656 40,518 41,699 4/30/2000 38,576 37,898 40,804 40,445 5/31/2000 38,305 37,602 40,518 39,615 6/30/2000 39,646 38,895 41,951 40,592 7/31/2000 38,102 37,359 40,317 39,957 8/31/2000 39,708 38,916 42,031 42,439 9/30/2000 38,328 37,527 40,571 40,199 10/31/2000 38,932 38,100 41,210 40,029 11/30/2000 37,293 36,468 39,491 36,873 12/31/2000 37,092 36,253 39,279 37,053 1/31/2001 37,647 36,775 39,866 38,368 2/28/2001 34,904 34,071 36,981 34,873 3/31/2001 32,384 31,589 34,299 32,665 4/30/2001 34,429 33,565 36,463 35,200 5/31/2001 34,920 34,024 36,999 35,436 6/30/2001 33,462 32,569 35,456 34,575 7/31/2001 33,636 32,727 35,641 34,236 The Class B contingent deferred sales charge (CDSC) is not included in the above graph, since the performance is for more than six years and the CDSC would no longer apply. Average Annual Total Return As of Inception 1 5 Since July 31, 2001 Date Year Year Inception ----------------------------------------------------------------- Class A Shares* 8/3/92 -16.58% 16.37% 14.43% ----------------------------------------------------------------- Class B Shares** 12/15/98/1/ -16.13% 16.46% 14.09% ----------------------------------------------------------------- Trust Shares 12/14/98/1/ -11.60% 17.73% 15.17% ----------------------------------------------------------------- *Reflects maximum 5.50% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 8/3/92 to 7/31/91 in the indicated share class versus a similar invest- ment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Large Cap Fund is measured against the S&P 500 Stock Index, an unmanaged index generally representative of the U.S. stock market as a whole. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. The quoted returns reflect the performance from 8/3/92 to 12/13/98 of the DG Equity Fund and from 12/14/98 to 3/12/00 of the ISG Large Cap Equity Fund, which were open-end investment companies that were predecessor funds to the AmSouth Large Cap Fund. /1/Performance for the Class B and Trust Shares, which commenced operations on 12/15/98 and 12/14/98, respectively, are based on the historical per- formance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 11 AmSouth Mid Cap Fund Portfolio Managers Van Schreiber, Chief Portfolio Manager Robert Deaton, CFA, Portfolio Manager Bennett Lawrence Management, LLC (sub-advisor) Van has 35 years of investment management experience. He holds an M.B.A. from New York University and an undergraduate degree from Williams College. Robert is a Chartered Financial Analyst with 14 years of experience in the securities business. He has an M.B.A. from Vanderbilt University and a B.A. from Davidson College. PORTFOLIO MANAGER'S PERSPECTIVE "The AmSouth Mid Cap Fund uses a two-step investment process. First, we identify major demand trends that present powerful investment opportunities. Then, we select companies that are best positioned to benefit from these trends. Before a company is selected, our analysts conduct extensive analysis of the business and its associated risks. The outcome of this process is a portfolio invested in a relatively small number of highly profitable companies." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund's total return was -27.65% (Class A Shares at NAV). In comparison, the Russell MidCap(R) Growth Index pro- duced a -31.81% return. Q. What factors affected your performance? A. While our overall performance for this period was disappointing, we did outperform our benchmark by being underweighted, relative to the index, in the shares of technology and health care companies. Traditionally, these two sec- tors have very high valuations, so they were hit particularly hard during the period as valuations corrected almost across the board. Keeping our exposure to technology and health care relatively low was a con- scious effort. In the case of technology companies, we felt that the fallout from the "dot-com" implosion--for a growth-oriented fund--would work its way up and down the supply chain with a far-reaching impact on the semiconductor, telecommunication equipment, and networking businesses. In health care, we stayed away from biotechnology companies. We are primarily interested in companies with above-average revenue and earnings growth, which prevents us from owning most of the biotech names. We have enjoyed very good results from Forest Laboratories, Inc. (4.16% of net assets), a well-positioned pharmaceutical company that is marketing a new drug for depression. Varian Med- ical Systems, Inc. (3.82%), which has developed a promising treatment for can- cer, also has performed well for us. Our holdings of the financial-services stocks, were profitable as they were big beneficiaries of lower interest rates. Nonetheless, the last year was a difficult one for growth-oriented funds, and we did not escape the strong negative pull of the market on growth stocks. We are, however, long-term investors with investment horizons that stretch out three to five years and longer. We continue to seek out attractive companies that will deliver solid returns over a market cycle.++ As of July 31, 2001, the Fund's top five holdings were Laboratory Corporation of America (4.81%), Eclipsys Corp. (4.46%), Forest Laboratories, Inc. (4.16%), Microchip Technology, Inc. (3.95%) and Varian Medical Systems, Inc. (3.82%).++ Q. What is your outlook for the next six to 12 months? A. We believe that corporate profits will continue to decline, with the economy not starting to improve until the first calendar quarter of 2002. However, while we are not economic prognosticators, we feel that the downside for the stock market is limited. As has been the case in recent months, this will be a stock picker's market, with sector rotation continuing to be swift. We will re- main focused on companies that we believe are capable of delivering good oper- ating results. ++The Fund's portfolio composition is subject to change. 12 AmSouth Mid Cap Fund Value of a $10,000 Investment [CHART]
AmSouth Mid Cap Fund AmSouth Mid Cap AmSouth Mid Cap Fund Russell Mid-Cap Class A Shares Fund Class B Shares Trust Shares Growth Index 5/4/1999 $ 9,452 $10,000 $10,000 $10,000 5/31/1999 9,338 9,880 9,880 9,871 6/30/1999 10,331 10,920 10,940 10,561 7/31/1999 10,567 11,170 11,190 10,224 8/31/1999 10,614 11,210 11,240 10,118 9/30/1999 10,851 11,450 11,490 10,032 10/31/1999 11,786 12,440 12,490 10,808 11/30/1999 13,696 14,450 14,510 11,927 12/31/1999 16,380 17,280 17,370 13,992 1/31/2000 16,304 17,160 17,270 13,989 2/29/2000 19,026 20,010 20,150 16,930 3/31/2000 18,507 19,450 19,600 16,947 4/30/2000 16,153 16,960 17,110 15,302 5/31/2000 14,792 15,530 15,670 14,187 6/30/2000 16,115 16,900 17,070 15,692 7/31/2000 15,756 16,520 16,700 14,698 8/31/2000 17,656 18,500 18,720 16,915 9/30/2000 16,928 17,730 17,950 16,088 10/31/2000 15,794 16,530 16,740 14,987 11/30/2000 13,327 13,940 14,130 11,730 12/31/2000 13,932 14,560 14,780 12,348 1/31/2001 13,894 14,520 14,750 13,053 2/28/2001 12,628 13,190 13,400 10,795 3/31/2001 11,399 11,860 12,060 9,250 4/30/2001 12,524 13,020 13,250 10,792 5/31/2001 12,694 13,190 13,430 10,742 6/30/2001 12,231 12,700 12,940 10,747 7/31/2001 11,399 11,530 12,060 10,023
------------------------------------------------------------------------- Average Annual Total Return ------------------------------------------------------------------------- As of Inception 1 Since July 31, 2001 Date Year Inception ------------------------------------------------------------------------- Class A Shares* 5/4/99 -31.63% 6.02% ------------------------------------------------------------------------- Class B Shares ** 5/4/99 -31.97% 6.56% ------------------------------------------------------------------------- Trust Shares 5/4/99 -27.78% 8.72% ------------------------------------------------------------------------- *Reflects maximum 5.05% sales charge **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 5/4/99 to 7/31/01 in the indicated share class versus a similar invest- ment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Mid Cap Fund is measured against the Russell MidCap(R) Growth Index, an unmanaged index representative of the performance of a basket of more than 430 mid-cap growth stocks. The index does not re- flect the deduction of fees associated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. The total returns reflect the performance from 5/4/99 to 3/12/00 of the ISG Mid-Cap Fund, an open-end investment company that was predecessor to the AmSouth Mid Cap Fund. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 13 AmSouth Small Cap Fund+ Portfolio Manager Dean McQuiddy, CFA Principal and Director of Equity Investments Sawgrass Asset Management, LLC (sub-advisor) Dean McQuiddy, Portfolio Manager to the AmSouth Small Cap Fund, has 19 years of experience in investment management and a B.S. in finance. He created and managed the small- cap growth product at Barnett Capital Advisors for 11 years. PORTFOLIO MANAGER'S PERSPECTIVE "For the AmSouth Small Cap Fund, we use a disciplined investment process to identify 60 to 80 fundamentally attractive small companies that share certain attributes: above-market sales and earnings growth, increasing estimates of future earnings and reasonable valuations. We aim to buy these companies in the early stages of their growth--before their stocks get overvalued in the marketplace." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund produced a total return of - 10.33% (Class A Shares at NAV). In comparison, the Russell 2000(R) Growth Index produced a -23.31% return. Q. What factors affected your performance? A. Over the last 12 months, we were challenged by a very tough environment for most types of growth stocks, especially small caps. We were not immune to these market realities despite the outperformance of our benchmark. We are in the middle or, hopefully, close to the end, of a true bear market. Thanks to some strong stock selection, we were able to keep losses modest on a relative basis. Factors that benefited the Fund included our significant underweighting in technology, a sector that fell precipitously during the period; only about 15% of the portfolio was invested in technology stocks, compared to our benchmark's 30% technology weighting. More specifically, we had no exposure to Internet and telecommunications equipment stocks, and managed to avoid the massive losses suffered by those areas, each of which was down more than 70% for the year. We primarily seek small companies, which are profitable, and whose earnings growth appears to be unusually strong and attractive. We believe this invest- ment discipline enabled us to reduce risk. We were also helped by solid gains in such consumer cyclical areas as retail, homebuilders, and education service companies. As of July 31, 2001, the Fund's top five holdings were Career Education Corp. (3.34% of net assets), Pharmaceutical Product Development, Inc. (3.20%), New York Community Bancorp, Inc. (2.94%), First Health Group Corp. (2.91%) and AdvancePCS (2.76%).++ Q. What is your outlook for the next six to 12 months? A. The Fed is working hard to provide liquidity, and we believe they will win this battle. Historically, when the Fed has cut rates as they have done this year, stocks in general, and small stocks in particular, have risen over the next 12 months. Overall, we are encouraged that stocks with positive earnings are still selling at a discount to the market, despite higher, historical and projected earnings growth rates. We believe that this is a very attractive sec- tor going forward. + Small-capitalization funds typically carry additional risks since smaller companies generally have a higher risk of failure. Historically, smaller companies' stocks have experienced a greater degree of market volatility than large company stocks on average. ++The Fund's portfolio composition is subject to change. 14 AmSouth Small Cap Fund [CHART] Value of a $10,000 Investment
AmSouth Small Cap AmSouth Small Cap AmSouth Small Cap Russell 2000 Fund (Class A Shares)* Fund (Class B Shares)** Fund (Trust Shares) Growth Index 3/2/1998 $ 9,450 $10,000 $10,000 $10,000 3/31/1998 9,764 10,290 10,302 10,419 4/30/1998 9,764 10,290 10,302 10,483 5/31/1998 9,063 9,540 9,572 9,722 6/30/1998 9,328 9,810 9,852 9,821 7/31/1998 8,664 9,110 9,152 9,001 8/31/1998 6,712 7,050 7,091 6,923 9/30/1998 7,479 7,860 7,911 7,625 10/31/1998 7,261 7,630 7,681 8,023 11/30/1998 7,840 8,220 8,281 8,645 12/31/1998 8,901 9,340 9,422 9,427 1/31/1999 8,456 8,860 8,941 9,852 2/28/1999 7,698 8,060 8,141 8,950 3/31/1999 7,186 7,520 7,601 9,269 4/30/1999 7,091 7,420 7,511 10,088 5/31/1999 7,299 7,630 7,731 10,104 6/30/1999 8,001 8,360 8,481 10,636 7/31/1999 7,963 8,310 8,441 10,307 8/31/1999 7,925 8,270 8,401 9,922 9/30/1999 8,105 8,450 8,591 10,113 10/31/1999 8,134 8,480 8,631 10,372 11/30/1999 8,958 9,330 9,502 11,469 12/31/1999 10,323 10,740 10,952 13,490 1/31/2000 10,295 10,720 10,942 13,364 2/29/2000 12,390 12,890 13,162 16,474 3/31/2000 12,523 13,020 13,302 14,742 4/30/2000 12,238 12,720 13,002 13,254 5/31/2000 11,565 12,000 12,282 12,093 6/30/2000 12,561 13,040 13,352 13,655 7/31/2000 11,869 12,310 12,612 12,485 8/31/2000 12,940 13,410 13,752 13,798 9/30/2000 12,911 13,370 13,722 13,113 10/31/2000 12,902 13,350 13,712 12,048 11/30/2000 11,262 11,650 11,972 9,861 12/31/2000 12,251 12,664 13,026 10,464 1/31/2001 11,536 11,608 12,262 11,311 2/28/2001 11,031 11,385 11,729 9,760 3/31/2001 10,390 10,718 11,053 8,873 4/30/2001 11,315 11,674 12,040 9,959 5/31/2001 11,105 11,441 11,818 10,190 6/30/2001 10,947 11,285 11,652 10,468 7/31/2001 10,642 10,656 11,330 9,576
-------------------------------------------------------------------------- Average Annual Total Return -------------------------------------------------------------------------- As of Inception 1 Since July 31, 2001 Date Year Inception -------------------------------------------------------------------------- Class A Shares* 3/2/98 -15.27% 1.84% -------------------------------------------------------------------------- Class B Shares** 3/2/98 -15.03% 1.88% -------------------------------------------------------------------------- Trust Shares 3/2/98 -10.16% 3.73% -------------------------------------------------------------------------- *Reflects maximum 5.50% sales charge. **Reflects applicable contingent sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 3/2/98 to 7/31/01 in the indicated share class versus a similar invest- ment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Small Cap Fund is measured against the Russell 2000(R) Growth Index, an unmanaged index generally representative of domesti- cally traded common stocks of small to mid-sized companies. The index does not reflect the deduction of fees associated with a mutual fund, such as in- vestment management fees. The Fund's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. Effective 12/1/99, the Classic and Premier Shares were renamed Class A and Trust Shares, respectively. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 15 AmSouth Equity Income Fund Portfolio Manager Christopher Wiles, CFA President and Chief Investment Officer Rockhaven Asset Management, LLC (sub-advisor) Chris has more than 15 years of investment management experience and holds an M.B.A. and a bachelor's degree in finance. Previously, he was affiliated with Federated Investments and Mellon Bank. PORTFOLIO MANAGER'S PERSPECTIVE "With the AmSouth Equity Income Fund, we try to reduce risk through a disciplined portfolio construction limited, under normal conditions, to 50 stocks. Then we select the most attractive securities on a risk/reward basis in each sector. Rather than trying to time the market or guess which sector may offer the greatest return, we put our emphais on investing in what we believe are the best-yielding, best dividend-growing securities, sector by sector." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund's total return was -12.96% (Class A Shares at NAV). In comparison, the S&P 500 Index produced a -14.32% return, and the Lipper Equity Income Funds Index returned 6.97%.+ Q. What factors affected your performance? A. The last 12 months, really the last 18 months, have been a true bear market in every sense of the term. Technology, telecommunications, and a majority of other industrial companies continued to come under pressure from an economic slowdown, and a tight monetary policy, although the Fed did reverse course and has eased interest rates considerably since the first of the year. Clearly, we have had a bear market in a large segment of the U.S. stock market. It is now apparent that the S&P 500 Stock Index is not immune, and neither were we. In hindsight, the reason we did not outperform our Lipper Equity Income bench- mark was that we owned good companies, run by good managers, but we held them longer than we should have; fundamentally, the companies were doing very well, but their stock prices were overvalued relative to the marketplace. What differentiates us from a lot of our peers in the equity income sector, is that we are sector-neutral to the S&P 500, rather than concentrating simply on value-oriented companies. Our goal is to provide shareholders with market per- formance, while delivering above-average income and below-average risk. Over the last three years, we have achieved this goal. During the most recent 12 months, however, the classic equity income fund--which buys stocks based on yield--profited from gains in such high-yield sectors as financials, utilities and energy. Being sector-neutral, we were not overweighted in these sectors, and this in turn hurt performance during the period. As of July 31, 2001, the Fund's top five holdings Citigroup, Inc., common shares (3.17% of net assets); Washington Mutual, Inc., convertible shares (2.82%); L-3 Communications, Inc., convertible bond (2.42%); Exxon Mobil Corp., common shares (2.40%); and EOG Resources, convertible shares (2.39%).++ Q. What is your outlook for the next six to 12 months? A. We believe the economy will begin to show some recovery in the beginning of 2002, evident by a couple of positive signs on the horizon. One is that there are many healthy paradoxes in the stock market and the economy; one of those paradoxes is that whenever industrial production falls, the stock market usu- ally stages a powerful rally over the next 12 months. We are already seeing signs that companies are making bottoms in announcing bad news and building on a base for future growth. Do not underestimate the resolve of corporate America to respond to changing economic realities. + The Lipper Equity Income Funds Index is an index comprised of managed mu- tual funds that seek relatively high current income and growth of income through investing 65% or more of their portfolio in dividend-paying equity securities. ++The Fund's portfolio composition is subject to change. 16 AmSouth Equity Income Fund Value of a $10,000 Investment [CHART] AmSouth AmSouth AmSouth Equity Equity Equity Income Income Income Fund Fund Fund S&P 500 (Class A (Class (Trust Stock Shares)* B Shares)** Shares) Index 3/20/1997 $ 9,452 $10,000 $10,000 $10,000 3/31/1997 9,293 9,829 9,832 9,589 4/30/1997 9,618 10,171 10,175 10,162 5/31/1997 10,168 10,742 10,758 10,780 6/30/1997 10,482 11,063 11,090 11,264 7/31/1997 11,136 11,745 11,781 12,160 8/31/1997 10,805 11,384 11,432 11,478 9/30/1997 11,291 11,871 11,948 12,107 10/31/1997 10,878 11,434 11,514 11,703 11/30/1997 11,129 11,693 11,781 12,244 12/31/1997 11,331 11,898 11,999 12,455 1/31/1998 11,457 12,025 12,134 12,592 2/28/1998 12,221 12,812 12,935 13,501 3/31/1998 12,664 13,271 13,407 14,192 4/30/1998 12,635 13,234 13,390 14,335 5/31/1998 12,351 12,929 13,092 14,088 6/30/1998 12,394 12,967 13,140 14,661 7/31/1998 11,947 12,490 12,669 14,504 8/31/1998 10,428 10,901 11,061 12,411 9/30/1998 10,839 11,314 11,488 13,202 10/31/1998 11,634 12,139 12,345 14,276 11/30/1998 12,383 12,914 13,142 15,142 12/31/1998 12,707 13,244 13,489 16,014 1/31/1999 13,113 13,655 13,912 16,683 2/28/1999 12,718 13,235 13,506 16,165 3/31/1999 13,050 13,583 13,862 16,812 4/30/1999 13,586 14,124 14,435 17,463 5/31/1999 13,231 13,749 14,048 17,050 6/30/1999 13,911 14,449 14,785 17,997 7/31/1999 13,640 14,156 14,497 17,435 8/31/1999 13,601 14,106 14,459 17,348 9/30/1999 13,289 13,782 14,141 16,873 10/31/1999 14,234 14,738 15,137 17,941 11/30/1999 14,647 15,158 15,580 18,309 12/31/1999 15,854 16,402 16,882 19,384 1/31/2000 16,049 16,589 17,090 18,410 2/29/2000 16,541 17,101 17,617 18,061 3/31/2000 17,276 17,849 18,406 19,828 4/30/2000 16,726 17,260 17,810 19,231 5/31/2000 16,271 16,778 17,328 18,837 6/30/2000 16,889 17,409 18,000 19,301 7/31/2000 16,248 16,738 17,331 18,999 8/31/2000 17,928 18,454 19,112 20,180 9/30/2000 17,017 17,505 18,143 19,114 10/31/2000 16,466 16,938 17,558 19,033 11/30/2000 14,741 15,145 15,723 17,533 12/31/2000 15,624 16,049 16,665 17,619 1/31/2001 16,181 16,606 17,261 18,244 2/28/2001 14,827 15,210 15,820 16,582 3/31/2001 13,986 14,334 14,925 15,532 4/30/2001 14,954 15,323 15,959 16,737 5/31/2001 15,068 15,431 16,095 16,850 6/30/2001 14,312 14,639 15,278 16,440 7/31/2001 14,142 14,255 15,098 16,279 Average Annual Total Return As of Inception 1 Since July 31, 2001 Date Year Inception -------------------------------------------------------- Class A Shares* 3/20/97 -17.76% 8.26% -------------------------------------------------------- Class B Shares** 9/3/97/1/ -17.93% 8.46% -------------------------------------------------------- Trust Shares 9/2/97/1/ -12.88% 9.90% -------------------------------------------------------- *Reflects maximum 5.50% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 3/20/97 to 7/31/01 in the indicated share class versus a similar invest- ment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Equity Income Fund is measured against the S&P 500 Stock Index, an unmanaged index generally representative of the U.S. stock market as a whole. The index does not reflect the deduction of fees as- sociated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added servic- es. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. /1/Performance for the Class B and Trust Shares, which commenced operations on 9/3/97 and 9/2/97, respectively, are based on the historical performance of the Class A Shares (without sales charge) prior to that date. The his- torical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Effective 12/1/99, the Classic and Premier Shares were renamed Class A and Trust Shares, respectively. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 17 AmSouth Balanced Fund Portfolio Managers Richard H. Calvert, CFA, Vice Preident John P. Boston, CFA, Senior Vice President AmSouth Bank AmSouth Investment Management Company, LLC Richard has been a portfolio manager and analyst for more than seven years. He is a member of AmSouth Bank's value strategy group and the asset allocation committee. Richard also manages the AmSouth Value Fund. He holds a B.S. in economics. John manages the AmSouth Government Income Fund, the Limited Term Bond Fund and co-manages the AmSouth Bond Fund. He has more than 10 years of experience as a fixed- income manager. He holds a bachelor's degree in finance and political science. PORTFOLIO MANAGER PERSPECTIVE "The AmSouth Balanced Fund is a diversified fund that offers investors a simple and easy way to balance their investments in stock as well as in bonds. Within our equity components, we follow a value strategy, seeking to buy solid companies at attractive prices. We also assess market opportunities to allocate assets where we feel they have the best prospects for risk-adjusted returns." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund produced a total return of 13.93% (Class A Shares at NAV). In comparison, the S&P 500 Stock Index produced a -14.32%, the Lehman Brothers Government/Credit Bond Index gained 12.71%, and the Lipper Balanced Funds Index had a -0.85% return.+ Q. What factors affected your performance? A. We had a great year, outdistancing our benchmarks, the S&P 500 and the Leh- man Brothers Government/Credit Bond Index, and strongly outperforming our peers in the Lipper Balanced Funds Index. During a period when stocks generally sank and bonds rose in value, a Fund such as ours--with significant weighting in fixed-income securities--had no trouble outperforming the major equity aver- ages. However, it was our judicious stock picking and sizable allocation to value stocks that helped us post a very attractive positive return. We feel the speculative bubble that inflated prices in the technology and tele- communications sectors damaged the overall market. Valuations went beyond ex- treme levels; in fact, we feel this could have been the largest speculative bubble the U.S. stock market has ever seen, and the results of the bubble's de- flation could last for years. At the same time, the value sector performed admirably. Value investing pros- pered precisely because it does focus on fundamental valuations, as opposed to the false promise of future profits that was floated by many technology compa- nies. Among our value-oriented holdings, the Fund profited from investments in ener- gy, specialty chemical, and business equipment stocks. We also saw several of our growth stocks rise in value and contribute to the Fund's performance. We believe that our mandate as a "balanced" portfolio obliges us to employ a bal- anced approach that includes growth stocks offering attractive valuations. As of July 31, 2001, the Fund's top five equity holdings were Washington Mutu- al, Inc (2.28% of net assets), Engelhard Corp. (2.03%), First Data Corp. (1.88%), Texaco, Inc. (1.87%) and St. Paul Cos., Inc. (1.58%).++ On the fixed-income side, this was a very good time for investors to have expo- sure to bonds. There was a marked slowdown in economic growth, and we have seen four consecutive quarters of below-average growth in the Gross Domestic Prod- uct.++ Additionally, the Fed has lowered interest rates six times since the first of the year through July 31, 2001. We now have a Fed that has moved to a stimulative monetary policy, and we have in place a stimulative fiscal policy, namely, a tax cut. Over the last 12 months, we have seen almost unprecedented easing of monetary policy. Such an environment is always productive for bonds. As of July 31, 2001, the fixed-income securities within the Fund maintained an average credit quality of AAA (as rated by Standard & Poor's), with an average maturity of 7.0 years. Approximately 49.4% of the Fund's assets were invested in stocks, with 48.0% invested in bonds and 1.8% in cash equivalents.++ Q. What is your outlook for the next six to 12 months? A. With regard to stocks, we don't try to guess which way the market is going to go. We do continue to believe that the next 12 months will be much like the last 12, in that it's going to be a stock picker's market. In the fixed-income arena, we wouldn't be surprised to see the bond market just tread water, with yields and prices hovering in a fairly narrow trading range. The Fed could cut rates a little lower, to protect further against economic recession, but we don't believe there is much more room on the downside for rates. + The Lipper Balanced Funds Index consists of mutual funds whose primary ob- jective is to conserve principal by maintaining at all times a balanced portfolio of both stocks and bonds. Typically, the stock/bond ratio ranges around 60%/40%. ++ The Gross Domestic Product (GDP) is the measure of market value of the goods and services produced by labor and property in the United States. The GDP is made up of consumer and government purchases, private domestic investments, and net exports of goods and services. ++ The Fund's portfolio composition is subject to change. 18 AmSouth Balanced Fund [CHART] Value of a $10,000 Investment Lehman Brothers AmSouth AmSouth AmSouth Government/ Balanced Balanced Balanced Credit Fund (Class Fund (Class Fund (Trust Bond S&P 500 A Shares)* B Shares) Shares) Index Stock Index 12/19/1991 $ 9,452 $10,000 $10,000 $10,000 $10,000 12/31/1991 10,064 10,655 10,647 10,337 11,144 1/31/1992 10,084 10,655 10,669 10,184 10,936 2/29/1992 10,217 10,799 10,810 10,238 11,078 3/31/1992 10,084 10,642 10,669 10,182 10,862 4/30/1992 10,303 10,865 10,901 10,243 11,181 5/31/1992 10,420 10,983 11,024 10,441 11,236 6/30/1992 10,377 10,931 10,979 10,595 11,069 7/31/1992 10,746 11,311 11,369 10,866 11,521 8/31/1992 10,602 11,140 11,216 10,963 11,285 9/30/1992 10,774 11,311 11,399 11,112 11,418 10/31/1992 10,704 11,232 11,325 10,942 11,457 11/30/1992 10,869 11,402 11,499 10,932 11,847 12/31/1992 10,942 11,468 11,576 11,120 11,993 1/31/1993 11,191 11,717 11,840 11,363 12,093 2/28/1993 11,384 11,913 12,045 11,599 12,258 3/31/1993 11,614 12,136 12,288 11,638 12,516 4/30/1993 11,688 12,202 12,366 11,728 12,214 5/31/1993 11,880 12,398 12,569 11,722 12,541 6/30/1993 11,944 12,451 12,636 11,988 12,577 7/31/1993 11,977 12,477 12,672 12,065 12,527 8/31/1993 12,335 12,844 13,051 12,342 13,002 9/30/1993 12,253 12,739 12,964 12,386 12,902 10/31/1993 12,388 12,870 13,106 12,436 13,169 11/30/1993 12,312 12,779 13,026 12,296 13,044 12/31/1993 12,513 12,975 13,239 12,350 13,201 1/31/1994 12,912 13,381 13,661 12,535 13,650 2/28/1994 12,645 13,093 13,378 12,262 13,280 3/31/1994 12,198 12,621 12,906 11,962 12,701 4/30/1994 12,223 12,634 12,932 11,862 12,864 5/31/1994 12,407 12,818 13,126 11,841 13,075 6/30/1994 12,301 12,700 13,014 11,814 12,754 7/31/1994 12,591 12,988 13,322 12,050 13,173 8/31/1994 12,831 13,224 13,575 12,055 13,713 9/30/1994 12,585 12,962 13,315 11,873 13,378 10/31/1994 12,676 13,041 13,411 11,860 13,678 11/30/1994 12,330 12,674 13,045 11,838 13,180 12/31/1994 12,465 12,805 13,188 11,916 13,376 1/31/1995 12,688 13,014 13,424 12,145 13,723 2/28/1995 13,134 13,473 13,896 12,427 14,257 3/31/1995 13,390 13,722 14,167 12,510 14,678 4/30/1995 13,769 14,102 14,568 12,684 15,110 5/31/1995 14,220 14,548 15,045 13,216 15,714 6/30/1995 14,277 14,587 15,105 13,321 16,079 7/31/1995 14,511 14,823 15,353 13,269 16,613 8/31/1995 14,593 14,889 15,439 13,439 16,654 9/30/1995 14,831 15,125 15,691 13,576 17,357 10/31/1995 14,772 15,046 15,629 13,776 17,295 11/30/1995 15,209 15,478 16,091 14,003 18,054 12/31/1995 15,396 15,662 16,289 14,209 18,402 1/31/1996 15,737 15,990 16,650 14,297 19,028 2/29/1996 15,690 15,924 16,600 13,994 19,205 3/31/1996 15,853 16,081 16,772 13,877 19,390 4/30/1996 16,051 16,265 16,982 13,781 19,676 5/31/1996 16,110 16,317 17,045 13,757 20,184 6/30/1996 16,147 16,343 17,083 13,942 20,260 7/31/1996 15,724 15,898 16,636 13,974 19,365 8/31/1996 15,959 16,121 16,885 13,940 19,773 9/30/1996 16,283 16,435 17,227 14,188 20,887 10/31/1996 16,478 16,619 17,434 14,519 21,462 11/30/1996 17,126 17,261 18,119 147,86 230,85 12/31/1996 16,891 17,012 17,871 14,622 22,627 1/31/1997 17,253 17,353 18,254 14,640 24,041 2/28/1997 17,518 17,615 18,535 14,670 24,229 3/31/1997 17,179 17,261 18,175 14,496 23,234 4/30/1997 17,550 17,615 18,568 14,707 24,621 5/31/1997 18,295 18,349 19,357 14,844 26,120 6/30/1997 18,761 18,794 19,850 15,022 27,292 7/31/1997 19,877 19,895 21,030 15,482 29,462 8/31/1997 19,353 191358 20,475 15,309 27,811 9/30/1997 20,160 20,150 21,334 15,549 29,334 10/31/1997 19,759 19,741 20,914 15,798 28,354 11/30/1997 20,116 20,089 21,296 15,881 29,667 12/31/1997 20,412 20,372 21,615 16,048 30,176 1/31/1998 20,617 20,553 21,822 16,274 30,510 2/28/1998 21,350 21,288 22,617 16,242 32,711 3/31/1998 22,007 21,919 23,304 16,292 34,386 4/30/1998 21,907 21,806 23,217 16,374 34,732 5/31/1998 21,945 21,835 23,263 16,549 34,135 6/30/1998 22,144 22,006 23,463 16,718 35,522 7/31/1998 21,774 21,625 23,076 16,731 35,143 8/31/1998 20,400 20,245 21,623 17,057 30,070 9/30/1998 21,374 21,215 22,677 17,545 31,988 10/31/1998 22,261 22,084 23,622 17,421 34,591 11/30/1998 22,914 22,721 24,320 17,525 36,689 12/31/1998 23,091 22,866 24,515 17,567 38,800 1/31/1999 23,098 22,861 24,528 17,692 40,423 2/28/1999 22,594 22,364 23,997 17,271 39,167 3/31/1999 22,957 22,692 24,388 17,357 40,735 4/30/1999 24,015 23,742 25,517 17,401 42,311 5/31/1999 24,013 23,701 25,519 17,221 41,312 6/30/1999 24,223 23,893 25,746 17,168 43,605 7/31/1999 23,820 23,497 25,324 17,120 42,243 8/31/1999 23,471 23,121 24,959 17,106 42,034 9/30/1999 22,950 22,608 24,410 17,260 40,882 10/31/1999 23,385 23,023 24,877 17,305 43,469 11/30/1999 23,280 22,904 24,771 17,295 44,362 12/31/1999 23,397 22,999 24,887 17,189 46,965 1/31/2000 22,767 22,356 24,217 17,184 44,605 2/29/2000 22,304 21,902 23,730 17,399 43,761 3/31/2000 23,688 23,249 25,209 17,649 48,042 4/30/2000 23,572 23,121 25,088 17,563 46,596 5/31/2000 23,726 23,258 25,276 17,547 45,640 6/30/2000 23,214 22,740 24,714 17,905 46,766 7/31/2000 23,570 23,075 25,097 18,095 46,034 8/31/2000 24,545 24,016 26,139 18,350 48,894 9/30/2000 24,645 24,081 26,248 18,420 46,313 10/31/2000 24,995 24,409 26,625 18,536 46,117 11/30/2000 24,953 24,370 26,583 18,853 42,481 12/31/2000 25,780 25,166 27,467 19,224 42,689 1/31/2001 26,118 25,480 27,830 19,547 44,203 2/28/2001 26,059 25,387 27,772 19,748 40,176 3/31/2001 25,801 25,120 27,499 19,839 37,633 4/30/2001 26,502 25,809 28,250 19,690 40,554 5/31/2001 26,952 26,212 28,735 19,805 40,825 6/30/2001 26,712 25,960 28,481 19,900 39,833 7/31/2001 26,853 26,082 28,634 20,395 39,443 The Class B contingent deferred sales charge (CDSC) is not included in the above graph, since the performance is for more than six years and the CDSC would no longer apply. Average Annual Total Return As of Inception 1 5 Since July 31, 2001 Date Year Year Inception --------------------------------------------------------------------------- Class A Shares* 12/19/91 7.63% 10.04% 10.82% --------------------------------------------------------------------------- Class B Shares** 9/2/97/1/ 8.05% 10.14% 10.48% --------------------------------------------------------------------------- Trust Shares 9/2/97/1/ 14.09% 11.47% 11.56% --------------------------------------------------------------------------- *Reflects maximum 5.50% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 12/19/91 to 7/31/01 in the indicated share class versus a similar in- vestment in the Fund's benchmark, and represents the reinvestment of divi- dends and capital gains in the Fund. The performance of the AmSouth Balanced Fund is measured against the S&P 500 Stock Index, an unmanaged index generally representative of the U.S. stock market as a whole; and the Lehman Brothers Government/Credit Bond Index, an unmanaged broad-based index representative of the total return of long-term government and corporate bonds. The indices do not reflect the deduction of fees associated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can in- vest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. /1/ Performance for the Class B and Trust Shares, which commenced operations on 9/2/97, are based on the historical performance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Effective 12/1/99, the Classic and Premier Shares were renamed Class A and Trust Shares, respectively. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 19 AmSouth Select Equity Fund Portfolio Managers Neil Wright, President and Chief Investment Officer Janna Sampson, Director of Portfolio Management Peter Jankovskis, Director of Research OakBrook Investments, LLC (sub- advisor) As Portfolio Managers of the AmSouth Select Equity Fund and the AmSouth Enhanced Market Fund, Neil, Janna and Peter have 50 years of combined experience. Neil and Peter have Ph.D.s in economics, and Janna holds an M.A. in economics. They have worked together for the past nine years. PORTFOLIO MANAGER'S PERSPECTIVE "Our goal in managing the AmSouth Select Equity Fund is to outperform the S&P 500 over a complete market cycle while experiencing less volatility than the broad stock market. We look for 20 to 25 leading companies that have a dominant market position, or a well-known brand name, yet whose stock price is undervalued. To make this 'growth at a reasonable price' strategy work, we use economic theory to determine whether a company is likely to recover its dominant position after a dip. We believe our patient, long-term approach offers excellent defensive protection, which can reduce losses when the market is weak." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund's total return was 28.96% (Class A Shares at NAV). In comparison, the S&P 500 Index produced a -14.32% return.+ This was a tremendous year for the Fund, outperforming the S&P 500 Stock Index by more than 43%. This performance ranked among the top 9% of all domestic eq- uity mutual funds during the period.++ Q. What factors affected your performance? A. The Fund benefited from its stable growth investment style, which became more attractive to investors during the last 12 months, and strong stock selec- tion within the stable growth category. The dramatic decline in the value of technology shares during the period caused investors to seek out stocks with records of stable earnings growth. We feel our market power analysis enabled us to identify many of the best-performing stocks within the stable growth style. For example, four of our holdings rose more than 50%: H&R Block, Inc. (6.83% of net assets), up 129%; Waste Management, Inc. (8.06%), up 67%; Ralston Purina Group (4.83%), up 61%; and J.M. Smucker Co. (2.28%), up 54%.++ As of July 31, 2001, the Fund's top five holdings were Waste Management, Inc. (8.06% of net assets), SYSCO Corp. (7.31%), H&R Block, Inc. (6.83%), General Mills, Inc. (6.73%) and Moody's Corp. (6.24%).++ Q. What is your outlook for the next six to 12 months? A. Looking ahead, we are hopeful that the market in general can regain its equilibrium. Taking out the disastrous declines in technology and communication services, the rest of the market actually rose by about 6% during the period. We believe the core of the U.S. economy remains intact, and that the rest of the market has a chance to move forward. We feel our strategy has served our shareholders and us very well during the last 12 months, and we hope to main- tain our advantage going forward. + The recent growth rate in the stock market has helped to produce short-term returns that are not typical and may not continue in the future. ++ The AmSouth Select Equity Fund ranked 43 out of 514 funds in the domestic equity funds category for the one-year period, but was not ranked for the five- and 10-year periods. Lipper rankings are based on total return and do not include the effect of a sales charge. All rankings are as of 7/31/01. ++The Fund's portfolio composition is subject to change. 20 AmSouth Select Equity Fund [CHART] Value of a $10,000 Investment
AmSouth Select Equity AmSouth Select Equity AmSouth Select Equity S&P 500 Fund (Class A Shares)* Fund (Class B Shares)** Fund (Trust Shares) Stock Index 9/1/1998 $ 9,452 $10,000 $10,000 $10,000 9/30/1998 9,928 10,500 10,504 10,638 10/31/1998 10,772 11,390 11,396 11,503 11/30/1998 11,052 11,670 11,693 12,201 12/31/1998 11,400 12,026 12,051 12,903 1/31/1999 11,286 11,895 11,941 13,443 2/28/1999 11,003 11,590 11,643 13,025 3/31/1999 10,994 11,574 11,636 13,547 4/30/1999 11,924 12,556 12,631 14,071 5/31/1999 11,488 12,085 12,159 13,738 6/30/1999 11,973 12,591 12,686 14,501 7/31/1999 11,289 11,859 11,962 14,048 8/31/1999 10,919 11,468 11,569 13,979 9/30/1999 10,409 10,914 11,022 13,596 10/31/1999 10,514 11,024 11,143 14,456 11/30/1999 10,057 10,542 10,659 14,753 12/31/1999 10,246 10,733 10,863 15,619 1/31/2000 9,537 9,984 10,123 14,834 2/29/2000 8,803 9,199 9,337 14,553 3/31/2000 9,346 9,776 9,915 15,977 4/30/2000 9,170 9,590 9,741 15,496 5/31/2000 9,606 10,027 10,191 15,178 6/30/2000 9,461 9,868 10,039 15,552 7/31/2000 9,048 9,431 9,602 15,309 8/31/2000 9,516 9,911 10,101 16,260 9/30/2000 9,840 10,250 10,457 15,402 10/31/2000 10,261 10,697 10,893 15,336 11/30/2000 10,711 11,156 11,372 14,127 12/31/2000 11,543 12,018 12,266 14,196 1/31/2001 11,075 11,227 11,771 14,700 2/28/2001 11,159 11,592 11,848 13,361 3/31/2001 10,826 11,254 11,506 12,515 4/30/2001 11,107 11,538 11,804 13,486 5/31/2001 11,522 11,953 12,244 13,577 6/30/2001 11,439 11,865 12,156 13,247 7/31/2001 11,668 11,795 12,399 13,117
-------------------------------------------------------------------------- Average Annual Total Return -------------------------------------------------------------------------- As of Inception 1 Since July 31, 2001 Date Year Inception -------------------------------------------------------------------------- Class A Shares* 9/1/98 21.83% 5.44% -------------------------------------------------------------------------- Class B Shares** 9/2/98/1/ 23.24% 5.83% -------------------------------------------------------------------------- Trust Shares 12/3/98/1/ 29.12% 7.66% -------------------------------------------------------------------------- *Reflects maximum 5.50% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 9/1/98 to 7/31/01 in the indicated share class versus a similar invest- ment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Select Equity Fund is measured against the S&P 500 Stock Index, an unmanaged index generally representative of the U.S. stock market as a whole. The index does not reflect the deduction of fees as- sociated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added servic- es. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisors waived and/or reimbursed fees for various expenses. Had these waivers and/or reim- bursements not been in effect, performance quoted would have been lower. /1/Performance for the Class B and Trust Shares, which commenced operations on 9/2/98 and 12/3/98, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Effective 12/1/99, the Classic and Premier Shares were renamed Class A and Trust Shares, respectively. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 21 AmSouth Enhanced Market Fund Portfolio Managers Neil Wright, President and Chief Investment Officer Janna Sampson, Director of Portfolio Management Peter Jankovskis, Director of Research OakBrook Investments, LLC (sub- advisor) As Portfolio Managers of the AmSouth Enhanced Market Fund and the AmSouth Select Equity Fund, Neil, Janna and Peter have 50 years of combined experience. Neil and Peter have Ph.D.s in economics, and Janna holds an M.A. in economics. They have worked together for the past nine years. Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund's total return was -14.60% (Class A Shares at NAV). In comparison, the S&P 500 Stock Index produced a - 14.32% return. Q. What factors affected your performance? A. The decline of the overall market was largely due to continued weakness in the communication and technology services sectors--which were down more than 20% and 50%, respectively, for the period as a whole. Demand for computers and related technology surged during 1999--as the world prepared to cope with the Y2K situation--leading many investors to believe that the sales of technology companies would continue to grow at 1999's high rate for several years. Howev- er, after Y2K passed, corporate buyers began to slow their rate of new orders, depressing earnings and leading to a tremendous drop-off in the stock prices of technology and communication companies. The Fund benefited from strong selection throughout the year, demonstrating the value of the disciplined stock picking that is the hallmark of our active man- agement style. Examples included our decisions to overweight SBC Communica- tions, Inc. (1.54% of net assets), a stalwart in the communications services sector, and IBM Corp. (1.89%), which held most of its value in the face of withering losses in the technology sector. We also preserved shareholder value by underweighting American International Group, Inc. (1.97%), which was a lag- gard in the financial services sector.++ Unfortunately, our strong individual selections were not enough to overcome the dramatic decline in the value of technology shares. As with the S&P 500 Index, on which our portfolio is based, falling technology prices were responsible for most of the decline in the Fund's value during the period. As of July 31, 2001, the Fund's top five holdings were General Electric Co. (3.65% of net assets), Microsoft Corp. (3.38%), Exxon Mobil Corp. (2.89%), Pfi- zer, Inc. (2.52%) and Citigroup, Inc. (2.47%).++ Q. What is your outlook for the next six to 12 months? A. Looking ahead, we are hopeful that the market in general can regain its equilibrium. Taking out the disastrous declines in technology and communication services, the rest of the market actually rose by about 6% during the period. We believe the core of the U.S. economy remains intact, and the remainder of the market has a chance to move forward. ++The Fund's portfolio composition is subject to change. 22 AmSouth Enhanced Market Fund Value of a $10,000 Investment [CHART] AmSouth AmSouth AmSouth Enhanced Enhanced Enhanced Market Fund Market Fund Market Fund S&P 500 (Class A Shares)* (Class B Shares)** (Trust Shares) Stock Index 9/1/1998 $ 9,452 $10,000 $10,000 $10,000 9/30/1998 10,048 10,623 10,631 10,638 10/31/1998 10,841 11,447 11,470 11,503 11/30/1998 11,535 12,173 12,204 12,201 12/31/1998 12,130 12,799 12,834 12,903 1/31/1999 12,624 13,305 13,358 13,443 2/28/1999 12,195 12,845 12,906 13,025 3/31/1999 12,746 13,410 13,482 13,547 4/30/1999 13,222 13,912 14,000 14,071 5/31/1999 12,901 13,568 13,651 13,738 6/30/1999 13,624 14,322 14,430 14,501 7/31/1999 13,226 13,890 14,010 14,048 8/31/1999 13,233 13,890 14,021 13,979 9/30/1999 12,840 13,469 13,608 13,596 10/31/1999 13,588 14,243 14,403 14,456 11/30/1999 13,884 14,536 14,710 14,753 12/31/1999 14,684 15,381 15,573 15,619 1/31/2000 14,025 14,675 14,875 14,834 2/29/2000 13,747 14,375 14,573 14,553 3/31/2000 15,070 15,755 15,990 15,977 4/30/2000 14,674 15,330 15,571 15,496 5/31/2000 14,368 14,988 15,248 15,178 6/30/2000 14,635 15,268 15,531 15,552 7/31/2000 14,477 15,092 15,374 15,309 8/31/2000 15,397 16,046 16,352 16,260 9/30/2000 14,546 15,144 15,451 15,402 10/31/2000 14,530 15,123 15,436 15,336 11/30/2000 13,405 13,930 14,233 14,127 12/31/2000 13,474 14,001 14,319 14,196 1/31/2001 13,927 14,155 14,789 14,700 2/28/2001 12,615 13,092 13,408 13,361 3/31/2001 11,799 12,237 12,541 12,515 4/30/2001 12,766 13,240 13,569 13,486 5/31/2001 12,796 13,261 13,601 13,577 6/30/2001 12,504 12,944 13,290 13,247 7/31/2001 12,363 12,486 13,141 13,117 Average Annual Total Return As of Inception 1 Since July 31, 2001 Date Year Inception -------------------------------------------------------- Class A Shares* 9/1/98 -19.29% 7.56% -------------------------------------------------------- Class B Shares** 9/2/98/1/ -19.44% 7.92% -------------------------------------------------------- Trust Shares 12/11/98/1/ -14.53% 9.83% -------------------------------------------------------- *Reflects maximum 5.50% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 9/1/98 to 7/31/01 in the indicated share class versus a similar invest- ment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Enhanced Market Fund is measured against the S&P 500 Stock Index, an unmanaged index generally representative of the U.S. stock market as a whole. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. /1/Performance for the Class B and Trust Shares, which commenced operations on 9/2/98 and 12/11/98, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Effective 12/1/99, the Classic and Premier Shares were renamed Class A and Trust Shares, respectively. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 23 AmSouth International Equity Fund+ Portfolio Managers Herbert Gullquist, Chief Investment Officer John Reinsberg, Managing Director International Equity Management Lazard Asset Management (Sub- Advisor) Herbert and John have 37 years and 17 years of investment experience, respectively. Herbert has a B.A. from Northwestern University. John holds an M.B.A. from Columbia University and a B.A. from the University of Pennsylvania. PORTFOLIO MANAGER'S PERSPECTIVE "The AmSouth International Equity Fund selects undervalued companies in global markets, primarily in Europe and the Pacific Basin. Our team of global analysts uses fundamental research to assess the strengths and weaknesses of individual companies and their competitors, applying both quantitative and qualitative reviews. We seek to manage portfolio risk through security, market, country and regional diversification. We maintain a strict discipline of selling stocks when they reach our valuation targets." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund's total return was -20.62% (Class A Shares at NAV). In comparison, the Morgan Stanley Capital Interna- tional Europe, Australasia and Far East Index(R) produced a -21.88% return. Q. What factors affected your performance? A. While absolute performance was disappointing, our relative performance was, however, some consolation, as we modestly outperformed our benchmark in a dif- ficult environment for foreign stocks. Going back a year ago, the beginning of a sharp decline in international mar- kets in many ways mirrored the difficulties of the U.S. market--specifically, heavy selling and negative momentum of technology, media and telecommunica- tions ("TMT") stocks. This downturn reflected the unusual degree to which the stock market had "overcapitalized" TMT companies, whose sales and earnings in large part could not sustain the growth rates on which their valuations were based. The decline of the euro had a significant negative impact on the performance of international markets, as investors continued to favor dollars in light of global economic uncertainty. In addition--and somewhat because of the decline in TMT--we are now in the midst of a global economic slowdown. The Gross Do- mestic Product++ activity is lower; earnings are weaker or even negative; and stock prices have reacted to this reality and headed sharply lower. We believe the primary reasons the Fund outperformed its benchmark was stock selection--particularly the holdings of technology and telecommunications stocks--and adherence to our value discipline. An integral part of the story of global markets is Japan, which has been struggling for a decade with perpetually weak economic fundamentals (including deflation). In our opinion, the election of a new Prime Minister earlier this year could lead to necessary reforms, though such reforms could be painful in the short term. As of July 31, 2001, 22.0% of the Fund's assets were invested in Japan, 19.6% in the United Kingdom, 14.7% in France, 11.9% in the Netherlands, 6.3% in Ger- many, 4.0% in Italy, 3.1% in Sweden, 3.1% in Spain, 2.5% in Singapore, and 2.3% in Switzerland. A total of 4.3% of assets were diversified across a num- ber of developed and emerging countries, and the remaining 6.2% was allocated to cash equivalents.++ Q. What is your outlook for the next six to 12 months? A. Despite the bad economic news around the world, we pay more attention to the merits of individual companies than we do to larger economic issues we can not control. We continue to see selected European companies as attractive, due to improving return-on-equity and low relative valuations, as stock prices have fallen more than corporate earnings. Valuations in Japan are also compel- ling, particularly in an environment of increasing financial and corporate re- form under the new Prime Minister. + International investing involves increased risk and volatility. ++ The Gross Domestic Product (GDP) is the measure of market value of the goods and services produced by labor and property in a country. The GDP is made up of consumer and government purchases, private domestic invest- ments, and net exports of goods and services. ++The Fund's portfolio composition is subject to change. 24 AmSouth International Equity Fund+ [CHART] Value of a $10,000 Investment
AmSouth International AmSouth International AmSouth International Equity Fund Equity Fund Equity Fund (Class A Shares)* (Class B Shares)** (Trust Shares) MSCI EAFE Index 8/5/1997 9,452 10,000 10,000 10,000 8/31/1997 9,149 9,673 9,680 9,253 9/30/1997 9,773 10,327 10,340 9,772 10/31/1997 8,998 9,504 9,520 9,020 11/30/1997 9,093 9,594 9,620 8,928 12/31/1997 9,168 9,663 9,700 9,006 1/31/1998 9,395 9,901 9,940 9,418 2/28/1998 9,897 10,426 10,471 10,023 3/31/1998 10,493 11,041 11,102 10,331 4/30/1998 10,673 11,219 11,292 10,413 5/31/1998 10,730 11,278 11,352 10,362 6/30/1998 10,474 11,001 11,082 10,441 7/31/1998 10,588 11,110 11,202 10,547 8/31/1998 8,875 9,306 9,390 9,240 9/30/1998 8,449 8,850 8,939 8,957 10/31/1998 9,149 9,574 9,680 9,890 11/30/1998 9,679 10,129 10,241 10,397 12/31/1998 10,037 10,496 10,619 10,807 1/31/1999 9,952 10,396 10,529 10,775 2/28/1999 9,705 10,149 10,258 10,519 3/31/1999 10,028 10,476 10,609 10,958 4/30/1999 10,559 11,021 11,161 11,402 5/31/1999 10,170 10,605 10,750 10,815 6/30/1999 10,654 11,110 11,262 11,236 7/31/1999 10,995 11,457 11,633 11,570 8/31/1999 11,166 11,625 11,804 11,612 9/30/1999 11,147 11,596 11,784 11,729 10/31/1999 11,422 11,873 12,075 12,169 11/30/1999 11,754 12,210 12,426 12,591 12/31/1999 12,724 13,210 13,456 13,721 1/31/2000 11,794 12,240 12,473 12,850 2/29/2000 11,852 12,290 12,534 13,196 3/31/2000 12,389 12,830 13,102 13,707 4/30/2000 11,852 12,270 12,544 12,986 5/31/2000 11,670 12,070 12,341 12,669 6/30/2000 12,197 12,610 12,909 13,164 7/31/2000 11,861 12,260 12,554 12,612 8/31/2000 11,855 12,243 12,547 12,722 9/30/2000 11,279 11,642 11,938 12,102 10/31/2000 11,135 11,482 11,785 11,816 11/30/2000 10,808 11,142 11,440 11,373 12/31/2000 11,262 11,607 11,924 11,777 1/31/2001 11,262 11,296 11,924 11,781 2/28/2001 10,627 10,935 11,251 10,900 3/31/2001 9,843 10,120 10,421 10,160 4/30/2001 10,359 10,636 10,968 10,858 5/31/2001 10,120 10,388 10,716 10,456 6/30/2001 9,813 10,068 10,390 10,026 7/31/2001 9,416 9,377 9,980 9,853
-------------------------------------------------------------------- Average Annual Total Return -------------------------------------------------------------------- As of Inception 1 Since July 31, 2001 Date Year Inception -------------------------------------------------------------------- Class A Shares* 8/15/97 -24.98% -1.51% -------------------------------------------------------------------- Class B Shares** 2/2/99/1/ -35.06% -1.62% -------------------------------------------------------------------- Trust Shares 12/14/98/1/ -20.50% -0.05% -------------------------------------------------------------------- *Reflects maximum 5.50% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 8/15/97 to 7/31/01 in the indicated share class versus a similar in- vestment in the Fund's benchmark, and represents the reinvestment of divi- dends and capital gains in the Fund. The performance of the AmSouth International Equity Fund is measured against the Morgan Stanley Capital International, MSCI (Europe, Australasia and Far East) EAFE(R) Index, which is unmanaged index that is comprised of a sample of companies representative of the market structure of 20 European and Pa- cific Basin countries. The index does not reflect the deduction of fees as- sociated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added servic- es. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reim- bursements not been in effect, performance quoted would have been lower. The quoted returns reflect the performance from 8/15/97 to 12/13/98 of the DG International Equity Fund and from 12/14/98 to 3/12/00 of the ISG Inter- national Equity Fund, which were open-end investment companies that were the predecessor funds to the AmSouth International Equity Fund. /1/Performance for the Class B and Trust Shares, which commenced operations on 2/2/99 and 12/14/98, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 25 AmSouth Strategic Portfolios Aggressive Growth Growth Growth and Income Moderate Growth and Income The AmSouth Strategic Portfolios are managed by a team of AmSouth investment managers, including both equity and fixed-income specialists, with more than 40 years of combined investment management experience. PORTFOLIO MANAGERS' PERSPECTIVE The Funds seek to provide investors with the potential to achieve a variety of long- and short-term goals, commensurate with investors' specific time horizons and tolerance for risk. Each of the four Strategic Portfolios invests in a combination of underlying mutual funds from the AmSouth Fund Family. Based on each Portfolio's asset-allocation target, the managers periodically rebalance stock, bond and money-market holdings--based on analysis of economic market trends. [LOGO] Q&A Q. How did the Funds perform during the period? A. For the 12 months ended July 31, 2001, the Funds' total returns and compara- tive benchmark returns were as follows: AmSouth Aggressive Growth Portfolio (Class A Shares at NAV): -3.42% Lipper Growth Funds Index/1/: -22.92% S&P 1500 Stock Index: -12.46% Merrill Lynch Government/Corporate Master Index: 12.76% MSCI EAFE(R) Index: -21.88% AmSouth Growth Portfolio (Class A Shares at NAV): -2.04% Lipper Balanced Funds Index/2/: -0.85% S&P 1500 Stock Index: -12.46% Merrill Lynch Government/Corporate Master Index: 12.76% MSCI EAFE(R) Index: -21.88% AmSouth Growth and Income Portfolio (Class A Shares at NAV): 1.61% Lipper Balanced Funds Index/2/: -0.85% S&P 1500 Stock Index: -12.46% Merrill Lynch Government/Corporate Master Index: 12.76% MSCI EAFE(R) Index: -21.88% AmSouth Moderate Growth and Income Portfolio (Class A Shares at NAV): 4.91% Lipper Balanced Funds Index/2/: -0.85% S&P 1500 Stock Index: -12.46% Merrill Lynch Government/Corporate Master Index: 12.76% Q. What factors affected the Funds' performance? A. Performance was affected by the stock markets' reaction to the incredibly sharp contraction in corporate earnings and the continued dismal outlook for earnings. We also saw an unwinding of the excesses that had been overbuilt in the technology and telecommunications sectors. On the positive side--and why our Strategic Portfolios did a good job of preserving shareholder value were the Portfolios' fixed-income holdings and, on the equity side, value investing's return to favor. Not only has the value investing style in general been productive over the last 12 months, but the execution of the AmSouth Value Fund enabled it to deliver returns considerably in excess of the average value fund's numbers. Because the Strategic Portfolios are actively managed, with asset allocation a key component of our investing discipline, we were able to take full advantage of the Value Fund's success to enhance performance. Approximately 40% of the equity portion of each of our four portfolios, including the Aggressive Growth Portfolio, were invested in the underlying Value Fund.++ As of July 31, 2001, the Funds' portfolios were allocated as follows:++ Aggressive Growth: 90% stocks, 0% bonds, 10% money market. Growth: 65% stocks, 23% bonds, 12% money market. Growth and Income: 50% stocks, 45% bonds, 5% money market. Moderate Growth and Income: 40% stocks, 55% bonds, 5% money market. Q. What is your outlook for the next six to 12 months? A. Since the beginning of calendar year 2001, we have increased the equity weighting of all four portfolios by 5% to 10%, as we anticipate an eventual re- covery in stock prices. We expect to see some improvement in smaller- to mid- size companies; they appear to have greater potential for earnings. For the most part, these companies are not caught up in the international currency fluctuations that are dampening returns for larger, multi-national corpora- tions. We also anticipate additional easing in interest rates from the Fed. While long-term rates might not fall any further, our sense is the Fed has some more work to do on the short-end of the yield curve. /1/The Lipper Growth Funds Index consists of managed mutual funds that nor- mally invest in companies with long-term earnings expected to grow signifi- cantly faster than the earnings of the stocks represented in the major un- managed stock indices. /2/The Lipper Balanced Funds Index consists of mutual funds whose primary ob- jective is to conserve principal by maintaining at all times a balanced portfolio of both stocks and bonds. Typically, the stock/bond ratio ranges around 60%/40%. ++The Fund's portfolio composition is subject to change. 26 AmSouth Aggressive Growth Portfolio [CHART] Value of a $10,000 Investment
AmSouth Aggressive Growth S&P 1500 Merrill Lynch Government/ Portfolio (Class A Shares)* Stock Index Corporate Master Index MSCI/(R)/ EAFE Index 1/13/99 9,452 10,000 10,000 10,000 1/31/99 9,518 10,000 10,072 9,970 2/28/99 9,253 9,656 9,818 9,733 3/31/99 9,395 10,026 9,880 10,139 4/30/99 9,565 10,451 9,913 10,550 5/31/99 9,348 10,239 9,805 10,007 6/30/99 9,773 10,806 9,775 10,397 7/31/99 9,707 10,484 9,747 10,706 8/31/99 9,612 10,397 9,740 10,745 9/30/99 9,528 10,119 9,830 10,853 10/31/99 9,813 10,732 9,849 11,260 11/30/99 10,353 10,980 9,844 11,651 12/31/99 11,051 11,634 9,795 12,696 1/31/00 10,678 11,073 9,792 11,890 2/29/00 10,870 10,978 9,910 12,210 3/31/00 11,389 11,993 10,064 12,683 4/30/00 11,162 11,632 10,011 12,016 5/31/00 10,943 11,397 10,000 11,722 6/30/00 11,235 11,682 10,199 12,181 7/31/00 11,058 11,520 10,301 11,670 8/31/00 11,568 12,280 10,446 11,771 9/30/00 11,443 11,677 10,490 11,198 10/31/00 11,495 11,607 10,559 10,934 11/30/00 11,011 10,687 10,750 10,524 12/31/00 11,217 10,822 10,965 10,898 1/31/01 11,465 11,198 11,127 10,901 2/28/01 10,872 11,278 11,440 10,086 3/31/01 10,238 10,611 10,783 9,401 4/30/01 10,939 11,335 11,522 10,047 5/31/01 11,068 11,459 11,647 9,675 6/30/01 10,842 11,222 11,419 9,277 7/31/01 10,680 10,760 11,249 9,117
------------------------------------------------------------ Average Annual Total Return ------------------------------------------------------------ As of Inception 1 Since July 31, 2001 Date Year Inception ------------------------------------------------------------ Class A Shares* 1/13/99 -8.72% 2.62% ------------------------------------------------------------ Class B Shares** 1/27/99 -8.34% 2.97% ------------------------------------------------------------ Trust Shares 1/28/99 -3.30% 4.81% ------------------------------------------------------------ *Reflects maximum 5.50% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison to a hypothetical $10,000 investment from 1/13/99 to 7/31/01 in the Class A Shares class versus a similar invest- ment in the Fund's benchmark. The Portfolio's performance is compared to the Morgan Stanley Capital Inter- national (Europe, Australasia and Far East) MSCI EAFE/(R)/ Index, which is gen- erally representative of stock markets in those regions; the Merrill Lynch Government/Corporate Master Index, which is generally representative of the performance of corporate and U.S. Government bonds; and the S&P 1500 Index, which is generally representative of the performance of large and small com- panies in the U.S. stock market. These indices are unmanaged and do not re- flect the expenses associated with a mutual fund, such as investment manage- ment fees. The Portfolio's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, al- though they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. The quoted returns reflect the performance from 1/13/99 to 3/12/00 of the ISG Aggressive Growth Portfolio, which was an open-end investment company and predecessor fund to the AmSouth Aggressive Growth Portfolio. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. 27 AmSouth Growth Portfolio [CHART] Value of a $10,000 Investment
AmSouth Growth Portfolio S&P 1500 Merrill Lynch Government/ (Class A Shares)* Stock Index Corporate Master Index MSCI EAFE(R) Index 2/11/99 9,448 10,000 10,000 10,000 2/28/99 9,286 10,000 9,748 9,762 3/31/99 9,239 10,384 9,809 10,169 4/30/99 9,429 10,824 9,842 10,581 5/31/99 9,286 10,604 9,735 10,036 6/30/99 9,605 11,192 9,705 10,428 7/31/99 9,538 10,858 9,677 10,738 8/31/99 9,414 10,768 9,670 10,777 9/30/99 9,355 10,480 9,759 10,885 10/31/99 9,566 11,115 9,778 11,293 11/30/99 9,845 11,371 9,774 11,685 12/31/99 10,284 12,049 9,724 12,734 1/31/00 10,022 11,468 9,722 11,925 2/29/00 10,100 11,370 9,839 12,246 3/31/00 10,495 12,420 9,992 12,721 4/30/00 10,291 12,047 9,939 12,051 5/31/00 10,118 11,804 9,928 11,757 6/30/00 10,375 12,099 10,126 12,217 7/31/00 10,240 11,931 10,227 11,705 8/31/00 10,706 12,718 10,371 11,806 9/30/00 10,542 12,094 10,415 11,231 10/31/00 10,537 12,021 10,483 10,966 11/30/00 10,157 11,068 10,673 10,555 12/31/00 10,345 11,208 10,886 10,930 1/31/01 10,505 11,598 11,047 10,934 2/28/01 10,125 10,681 10,709 10,116 3/31/01 9,724 10,250 10,276 9,429 4/30/01 10,150 10,707 10,737 10,077 5/31/01 10,224 10,779 10,815 9,704 6/30/01 10,076 10,614 10,659 9,305 7/31/01 10,032 10,266 10,613 9,144
------------------------------------------------------------------------ Average Annual Total Return ------------------------------------------------------------------------ As of Inception 1 Since July 31, 2001 Date Year Inception ------------------------------------------------------------------------ Class A Shares* 2/11/99 -7.43% 0.13% ------------------------------------------------------------------------ Class B Shares** 2/15/99 -7.29% 1.08% ------------------------------------------------------------------------ Trust Shares 2/1/99 -1.98% 2.41% ------------------------------------------------------------------------ *Reflects maximum 5.50% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison to a hypothetical $10,000 investment from 2/11/99 to 7/31/01 in the Class A Shares versus a similar investment in the Fund's benchmark. The Portfolio's performance is compared to the Morgan Stanley Capital Inter- national (Europe, Australasia and Far East) MSCI EAFE(R) Index, which is gen- erally representative of stock markets in those regions; the Merrill Lynch Government/Corporate Master Index, which is generally representative of the performance of corporate and U.S. Government bonds; and the S&P 1500 Index, which is generally representative of the performance of large and small com- panies in the U.S. stock market. These indices are unmanaged and do not re- flect the expenses associated with a mutual fund, such as investment manage- ment fees. The Portfolio's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, al- though they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. The quoted returns reflect the performance from 2/1/99 to 3/12/00 of the ISG Growth Portfolio, which was an open-end investment company and predecessor fund to the AmSouth Growth Portfolio. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 28 AmSouth Growth and Income Portfolio Value of a $10,000 Investment [CHART] Merrill Lynch AmSouth Growth & Government Income Portfolio S&P 1500 /Corp Master (Class A Shares)* Stock Index Index MSCI EAFE(R) Index 3/8/99 9,448 10,000 10,000 10,000 3/31/99 9,392 10,384 10,063 10,417 4/30/99 9,495 10,824 10,096 10,840 5/31/99 9,355 10,604 9,986 10,281 6/30/99 9,508 11,192 9,956 10,682 7/31/99 9,424 10,858 9,928 11,000 8/31/99 9,377 10,768 9,920 11,040 9/30/99 9,304 10,480 10,011 11,151 10/31/99 9,473 11,115 10,031 11,569 11/30/99 9,708 11,371 10,026 11,971 12/31/99 9,940 12,049 9,976 13,045 1/31/00 9,770 11,468 9,973 12,216 2/29/00 9,751 11,370 10,093 12,545 3/31/00 10,109 12,420 10,250 13,031 4/30/00 10,066 12,047 10,196 12,345 5/31/00 10,000 11,804 10,185 12,044 6/30/00 10,212 12,099 10,387 12,515 7/31/00 10,109 11,931 10,491 11,990 8/31/00 10,422 12,718 10,639 12,094 9/30/00 10,343 12,094 10,684 11,505 10/31/00 10,368 12,021 10,754 11,234 11/30/00 10,179 11,068 10,949 10,812 12/31/00 10,359 11,208 11,167 11,197 1/31/01 10,526 11,597 11,332 11,200 2/28/01 10,248 10,845 11,182 10,363 3/31/01 9,980 10,544 10,891 9,659 4/30/01 10,303 10,891 11,244 10,323 5/31/01 10,365 10,950 11,323 9,941 6/30/01 10,260 10,832 11,198 9,532 7/31/01 10,271 10,554 11,221 9,367 Average Annual Total Return As of Inception 1 Since July 31, 2001 Date Year Inception ------------------------------------------------------------------------------- Class A Shares* 3/8/99 -3.95% 1.12% ------------------------------------------------------------------------------- Class B Shares** 1/27/99 -3.55% 2.17% ------------------------------------------------------------------------------- Trust Shares 2/8/99 1.84% 4.77% ------------------------------------------------------------------------------- * Reflects maximum 5.50% sales charge. ** Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison to a hypothetical $10,000 investment from 3/8/99 to 7/31/01 in the Class A Shares versus a similar investment in the Fund's benchmark. The Portfolio's performance is compared to the Morgan Stanley Capital Inter- national (Europe, Australasia and Far East) MSCI EAFE(R) Index, which is gen- erally representative of stock markets in those regions; the Merrill Lynch Government/Corporate Master Index, which is generally representative of the performance of corporate and U.S. Government bonds and the S&P 1500 Index, which is generally representative of the performance of large and small com- panies in the U.S. stock market. These indices are unmanaged and do not re- flect the expenses associated with a mutual fund, such as investment manage- ment fees. The Portfolio's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, al- though they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. The quoted returns reflect the performance from 1/27/99 to 3/12/00 of the ISG Growth & Income Portfolio, which was an open-end investment company and pred- ecessor fund to the AmSouth Growth and Income Portfolio. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than original cost. 29 AmSouth Moderate Growth and Income Portfolio [CHART] Value of a $10,000 Investment AmSouth Moderate Growth S&P 1500 Merrill Lynch Government/ Fund (Class A Shares)* Stock Index Corporate Master Index 2/9/1999 $ 9,454 $10,000 $10,000 2/28/1999 9,473 10,000 9,748 3/31/1999 9,513 10,384 9,809 4/30/1999 9,561 10,824 9,842 5/31/1999 9,446 10,604 9,735 6/30/1999 9,525 11,192 9,705 7/31/1999 9,457 10,858 9,677 8/31/1999 9,428 10,768 9,670 9/30/1999 9,399 10,480 9,759 10/31/1999 9,515 11,115 9,778 11/30/1999 9,660 11,371 9,774 12/31/1999 9,772 12,049 9,724 1/31/2000 9,654 11,468 9,722 2/29/2000 9,625 11,370 9,839 3/31/2000 9,932 12,420 9,992 4/30/2000 9,907 12,047 9,939 5/31/2000 9,873 11,804 9,928 6/30/2000 10,031 12,099 10,126 7/31/2000 10,009 11,931 10,227 8/31/2000 10,268 12,718 10,371 9/30/2000 10,235 12,094 10,415 10/31/2000 10,273 12,021 10,483 11/30/2000 10,186 11,068 10,673 12/31/2000 10,343 11,208 10,886 1/31/2001 10,545 11,598 11,047 2/28/2001 10,342 10,658 10,978 3/31/2001 10,145 10,448 10,770 4/30/2001 10,404 10,709 11,044 5/31/2001 10,492 10,793 11,138 6/30/2001 10,420 10,700 11,062 7/31/2001 10,500 10,484 11,147 --------------------------------------------------------------------- Average Annual Total Return --------------------------------------------------------------------- As of Inception 1 Since July 31, 2001 Date Year inception --------------------------------------------------------------------- Class A Shares* 2/9/99 -0.90% 1.99% --------------------------------------------------------------------- Class B Shares** 1/28/99 -0.75% 1.91% --------------------------------------------------------------------- Trust Shares 2/10/99 4.93% 4.50% --------------------------------------------------------------------- *Reflects maximum 5.50% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison to a hypothetical $10,000 investment from 2/9/99 to 7/31/01 in the Class A Shares versus a similar investment in the Fund's benchmark. The Portfolio's performance is compared to the Merrill Lynch Government/Corporate Master Index, which is generally representative of the performance of corporate and U.S. Government bonds, and the S&P 1500 Index, which is generally representative of the performance of large and small com- panies in the U.S. stock market. These indices are unmanaged and do not re- flect the expenses associated with a mutual fund, such as investment manage- ment fees. The Portfolio's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, al- though they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. The quoted returns reflect the performance from 1/28/99 to 3/12/00 of the ISG Moderate Growth & Income Portfolio, which was an open-end investment company and predecessor fund to the AmSouth Moderate Growth and Income Portfolio. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 30 [This Page Intentionally Left Blank] 31 AmSouth Bond Fund Portfolio Managers Brian B. Sullivan, CFA, Chief Investment Officer John P. Boston, CFA, Senior Vice President AmSouth Bank AmSouth Investment Management Company, LLC The AmSouth Bond Fund is co-managed by Brian Sullivan, CFA, and John Boston, CFA. Brian has 16 years of fixed-income investment management experience and holds an M.B.A. in finance and a bachelor's degree in economics. John has more than 11 years of experience as a fixed- income manager. He holds a bachelor's degree in finance and political science. PORTFOLIO MANAGER'S PERSPECTIVE "The AmSouth Bond Fund seeks to take advantage of changes in interest rates to pursue strong returns. We buy longer bonds when interest rates are high and expected to fall and shorter bonds when interest rates are low and expected to rise. The change in the average maturity or duration is one of the most powerful determinants of return. Through the active use of high-quality investments, we strive to obtain excellent returns." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund produced a total return of 11.63% (Class A Shares at NAV). In comparison, the Lehman Brothers Government/Credit Bond Index rose 12.71%, and the Lipper Corporate A-Rated Debt Funds Index gained 12.32%.+ Q. What factors affected your performance? A. This was a very good time for investors to have exposure to bonds. There was a marked slowdown in economic growth, and we saw four consecutive quarters of below-average growth in the Gross Domestic Product.++ Additionally, the Fed has lowered interest rates six times since the first of the year through July 31, 2001. We now have a Fed that has moved to a stimulative monetary policy, and we have in place a stimulative fiscal policy, namely, a tax cut. Over the last 12 months, we have seen almost unprecedented easing of monetary policy. With the slowdown we are talking about, interest rates dropped dramatically in the short- and intermediate areas of the yield curve. Although there was not much of a decline in longer interest rates, declines in interest rates are al- ways good for bonds. This was especially true for corporate bonds. During the period, the best- performing area of the bond market was the corporate sector. How did we react to the changing environment? We made substantial changes to the structure of the Bond Fund. We reduced the portfolio's average maturity; we do not feel there is much room left for rates to decline, and we are reluctant to take undue risk. We also reduced our exposure to Treasury securities. If we are correct in our analysis that the U.S. economy is at a trough and could pick up in the near term, we believe the best place to be is in the middle part of the yield curve, with an emphasis on corporate bonds. As of July 31, 2001, approximately 47.8% of the portfolio was invested in cor- porate issues, 27.7% in securities issued by the U.S. Treasury, 22% in U.S. government agency paper, 0.1% in municipal securities, and the remainder in cash equivalents. The securities within the Fund maintained an average credit quality of AAA (as rated by Standard & Poor's), with an average maturity of 6.9 years.++ Q. What is your outlook for the next six to 12 months? A. For at least the next few months, and perhaps longer, we would not be sur- prised to see the bond market just tread water, with yields and prices hovering in a narrow trading range. We believe the Fed could cut rates a little lower, to further protect against an economic recession, but we do not believe there is much more room on the downside for rates. Therefore, we do not anticipate the kind of robust gains we enjoyed over the last 12 months. + The Lipper Corporate A-Rated Debt Funds Index is an index comprised of man- aged funds that invest at least 65% of their assets in corporate debt is- sues rated "A" or better or government issues. ++ The Gross Domestic Product (GDP) is the measure of market value of the goods and services produced by labor and property in the United States. The GDP is made up of consumer and government purchases, private domestic investments, and net exports of goods and services. ++The Fund's portfolio composition is subject to change. 32 AmSouth Bond Fund [CHART] Value of a $10,000 Investment AmSouth AmSouth AmSouth Lehman Brothers Bond Fund Bond Fund Bond Fund Government/Credit (Class A Shares)* (Class B Shares) (Trust Shares) Bond Index 7/31/1991 $ 9,604 $10,000 $10,000 $10,000 8/31/1991 9,829 10,224 10,234 10,230 9/30/1991 10,027 10,435 10,440 10,444 10/31/1991 10,159 10,561 10,578 10,537 11/30/1991 10,305 10,701 10,730 10,642 12/31/1991 10,627 11,024 11,066 11,001 1/31/1992 10,444 10,827 10,875 10,838 2/29/1992 10,493 10,870 10,926 10,895 3/31/1992 10,420 10,785 10,850 10,835 4/30/1992 10,505 10,856 10,939 10,900 5/31/1992 10,696 11,052 11,137 11,112 6/30/1992 10,867 11,220 11,316 11,275 7/31/1992 11,175 11,529 11,637 11,564 8/31/1992 11,298 11,641 11,764 11,667 9/30/1992 11,537 11,879 12,013 11,826 10/31/1992 11,330 11,655 11,798 11,645 11/30/1992 11,258 11,571 11,722 11,634 12/31/1992 11,403 11,711 11,874 11,834 1/31/1993 11,676 11,978 12,158 12,092 2/28/1993 11,907 12,216 12,156 12,344 3/31/1993 11,968 12,258 12,462 12,386 4/30/1993 12,073 12,356 12,571 12,481 5/31/1993 12,049 12,328 12,546 12,475 6/30/1993 12,252 12,525 12,589 12,758 7/31/1993 12,274 12,539 12,780 12,840 8/31/1993 12,491 12,749 13,007 13,135 9/30/1993 12,546 12,791 13,064 13,181 10/31/1993 12,568 12,805 13,086 13,235 11/30/1993 12,490 12,707 13,006 13,085 12/31/1993 12,530 12,735 13,047 13,143 1/31/1994 12,687 12,889 13,211 13,340 2/28/1994 12,482 12,679 12,997 13,049 3/31/1994 12,230 12,412 12,735 12,730 4/30/1994 12,125 12,286 12,626 12,624 5/31/1994 12,134 12,286 12,634 12,601 6/30/1994 12,096 12,244 12,596 12,572 7/31/1994 12,301 12,440 12,809 12,824 8/31/1994 12,322 12,440 12,830 12,829 9/30/1994 12,120 12,230 12,621 12,635 10/31/1994 12,094 12,202 12,593 12,621 11/30/1994 12,055 12,146 12,553 12,599 12/31/1994 12,125 12,202 12,626 12,682 1/31/1995 12,339 12,412 12,848 12,925 2/28/1995 12,643 12,707 13,165 13,225 3/31/1995 12,707 12,763 13,231 13,314 4/30/1995 12,892 12,931 13,424 13,499 5/31/1995 13,435 13,464 13,990 14,064 6/30/1995 13,536 13,562 14,095 14,177 7/31/1995 13,489 13,506 14,046 14,121 8/31/1995 13,642 13,647 14,205 14,302 9/30/1995 13,763 13,759 14,331 14,448 10/31/1995 13,958 13,941 14,534 14,661 11/30/1995 14,179 14,151 14,764 14,902 12/31/1995 14,357 14,306 14,949 15,121 1/31/1996 14,456 14,404 15,052 15,215 2/29/1996 14,195 14,123 14,781 14,893 3/31/1996 14,038 13,955 14,617 14,768 4/30/1996 13,908 13,815 14,482 14,666 5/31/1996 13,872 13,773 14,445 14,641 6/30/1996 14,048 13,941 14,628 14,837 7/31/1996 14,079 13,955 14,660 14,871 8/31/1996 14,009 13,871 14,587 14,835 9/30/1996 14,265 14,109 14,854 15,099 10/31/1996 14,637 14,474 15,241 15,451 11/30/1996 14,930 14,755 15,546 15,736 12/31/1996 14,724 14,530 15,332 15,561 1/31/1997 14,716 14,516 15,324 15,580 2/28/1997 14,729 14,516 15,337 15,612 3/31/1997 14,506 14,278 15,105 15,427 4/30/1997 14,744 14,502 15,352 15,652 5/31/1997 14,875 14,614 15,489 15,797 6/30/1997 15,051 14,783 15,672 15,987 7/31/1997 15,553 15,259 16,195 16,476 8/31/1997 15,341 15,035 15,974 16,292 9/30/1997 15,605 15,275 16,235 16,547 10/31/1997 15,866 15,544 16,524 16,812 11/30/1997 15,930 15,600 16,592 16,901 12/31/1997 16,089 15,728 16,744 17,079 1/31/1998 16,325 15,962 17,005 17,319 2/28/1998 16,260 15,877 16,940 17,285 3/31/1998 16,315 15,920 16,998 17,338 4/30/1998 16,374 15,966 17,061 17,425 5/31/1998 16,536 16,113 17,231 17,612 6/30/1998 16,691 16,254 17,394 17,791 7/31/1998 16,711 16,263 17,417 17,805 8/31/1998 17,100 16,618 17,823 18,153 9/30/1998 17,604 17,096 18,350 18,672 10/31/1998 17,543 17,026 18,288 18,539 11/30/1998 17,523 16,997 18,269 18,650 12/31/1998 17,567 17,026 18,317 18,695 1/31/1999 17,639 17,085 18,394 18,828 2/28/1999 17,267 16,713 18,007 18,380 3/31/1999 17,360 16,789 18,105 18,472 4/30/1999 17,387 16,804 18,135 18,518 5/31/1999 17,195 16,610 17,935 18,327 6/30/1999 17,163 16,568 17,904 18,270 7/31/1999 17,143 16,521 17,885 18,219 8/31/1999 17,103 16,468 17,844 18,205 9/30/1999 17,243 16,606 17,992 18,368 10/31/1999 17,265 16,600 18,016 18,416 11/30/1999 17,240 16,578 17,991 18,405 12/31/1999 17,118 16,442 17,867 18,293 1/31/2000 17,102 16,408 17,852 18,287 2/29/2000 17,358 16,657 18,120 18,516 3/31/2000 17,652 16,921 18,431 18,783 4/30/2000 17,560 16,822 18,337 18,691 5/31/2000 17,533 16,787 18,311 18,674 6/30/2000 17,877 17,107 18,673 19,055 7/31/2000 18,018 17,231 18,822 19,257 8/31/2000 18,269 17,460 19,087 19,528 9/30/2000 18,363 17,540 19,188 19,602 10/31/2000 18,464 17,626 19,314 19,726 11/30/2000 18,794 17,930 19,643 20,063 12/31/2000 19,182 18,275 20,051 20,458 1/31/2001 19,411 18,482 20,292 20,802 2/28/2001 19,586 18,658 20,496 21,016 3/31/2001 19,705 18,745 20,604 21,113 4/30/2001 19,513 18,565 20,424 20,955 5/31/2001 19,580 18,618 20,478 21,076 6/30/2001 19,670 18,674 20,575 21,177 7/31/2001 20,114 19,086 21,041 21,705 The Class B contingent deferred sales charge (CDSC) is not included in the above graph, since the performance is for more than six years and the CDSC would no longer apply. Average Annual Total Return As of Inception 1 5 10 July 31, 2001 Date Year Year Year --------------------------------------------------------------------------- Class A Shares* 12/1/88 7.15% 6.52% 7.24% --------------------------------------------------------------------------- Class B Shares** 9/16/97/1/ 5.77% 6.15% 6.68% --------------------------------------------------------------------------- Trust Shares 9/2/97/1/ 11.79% 7.50% 7.72% --------------------------------------------------------------------------- *Reflects maximum 4.00% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 7/31/91 to 7/31/01 in the indicated share class versus a similar in- vestment in the Fund's benchmark, and represents the reinvestment of divi- dends and capital gains in the Fund. The performance of the AmSouth Bond Fund is measured against the Lehman Brothers Government/Credit Bond Index, an unmanaged broad-based index repre- sentative of the total return of long-term government and corporate bonds. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management fees. The Fund's performance does re- flect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying se- curities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. /1/Performance for the Class B and Trust Shares, which commenced operations on 9/16/97 and 9/2/97, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Effective 12/1/99 the Classic and Premier Shares were renamed Class A and Trust Shares, respectively. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 33 AmSouth Limited Term Bond Fund Portfolio Manager John P. Boston, CFA Senior Vice President AmSouth Bank AmSouth Investment Management Company, LLC John manages the AmSouth Limited Term Bond Fund and the AmSouth Government Income Fund and co- manages the AmSouth Bond Fund. He has more than 11 years of experience as a fixed-income manager. He holds a bachelor's degree in finance and political science and is a Chartered Financial Analyst. PORTFOLIO MANAGER'S PERSPECTIVE "The AmSouth Limited Term Bond Fund was designed to fill the gap between money market funds and long term bond funds. For investors looking for a diversified bond fund, this Fund represents the first step out on the 'risk/return' spectrum from the money market arena." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund produced a total return of 10.12% (Class A Shares at NAV). In comparison, the Merrill Lynch 1-5-Year Government/Corporate Bond Index rose 11.18%, and the Lipper Short Intermediate Investment Grade Debt Funds Index gained 11.05%.+ Q. What factors affected your performance? A. This was a very good time for investors to have exposure to bonds. There was a marked slowdown in economic growth, and we saw four consecutive quarters of below-average growth in the Gross Domestic Product.++ Additionally, the Fed has lowered interest rates six times since the first of the year through July 31, 2001. We now have a Fed that has moved to a stimulative monetary policy, and we have in place a stimulative fiscal policy, namely, a tax cut. Over the last 12 months, we have seen almost unprecedented easing of monetary policy. With the slowdown we are talking about, interest rates dropped dramatically in the short- and intermediate areas of the yield curve, though there was not as much of a decline in longer interest rates; declines in interest rates are al- ways good for bonds. This was especially true for corporate bonds. During the period, the best-performing area of the bond market was the corporate sector. How did we react to the changing environment? Among other things, we increased our allocation of corporate bonds to 79.4% of the portfolio's assets, from 72% a year ago. If we are correct in our analysis that the U.S. economy is at a trough and could pick up in the near term, we believe the best place to be is in the middle part of the yield curve, with an emphasis on corporate bonds.++ As of July 31, 2001, approximately 79.4% of the portfolio was invested in cor- porate issues, 7.9% in securities issued by the U.S. Treasury, 10.6% in U.S. government agency paper, and the remainder in cash equivalents. The securities within the Fund maintained an average credit quality of AAA (as rated by Stan- dard & Poor's), with an average maturity of 2.7 years.++ Q. What is your outlook for the next six to 12 months? A. For at least the next few months, and perhaps longer, we would not be sur- prised to see the bond market just tread water, with yields and prices hovering in a narrow trading range. We believe the Fed could cut rates a little lower, to further protect against an economic recession; even if the Fed does not act, short-term rates should remain low. Therefore, we have not changed the average maturity of the Fund. We believe we are positioned to take full advantage of a relatively static fixed-income environment. + The Lipper Short Intermediate Investment Grade Debt Funds Index is com- prised of managed funds that invest at least 65% of their assets in invest- ment-grade debt issues (rated in the top four grades) with dollar-weighted average maturities of one to five years. ++ The Gross Domestic Product (GDP) is the measure of market value of the goods and services produced by labor and property in the United States. The GDP is made up of consumer and government purchases, private domestic investments, and net exports of goods and services. ++The Fund's portfolio composition is subject to change. 34 AmSouth Limited Term Bond Fund [CHART] AmSouth AmSouth AmSouth Merrill Lynch Class A Class B Trust 1-5-Year Shares Limited Shares Limited Shares Limited Government/ Term Bond Term Bond Term Bond Corp Bond Fund Fund Fund Index 7/31/1991 9,604 10,000 10,000 10,000 8/31/1991 9,744 10,140 10,146 10,162 9/30/1991 9,849 10,238 10,254 10,299 10/31/1991 9,959 10,350 10,369 10,419 11/30/1991 10,064 10,448 10,478 10,536 12/31/1991 10,242 10,616 10,664 10,731 1/31/1992 10,220 10,588 10,641 10,681 2/29/1992 10,278 10,644 10,701 10,715 3/31/1992 10,268 10,616 10,691 10,696 4/30/1992 10,330 10,672 10,756 10,801 5/31/1992 10,410 10,756 10,839 10,932 6/30/1992 10,577 10,910 11,012 11,074 7/31/1992 10,704 11,036 11,145 11,242 8/31/1992 10,783 11,106 11,227 11,359 9/30/1992 10,917 11,232 11,367 11,494 10/31/1992 10,825 11,134 11,270 11,386 11/30/1992 10,796 11,092 11,241 11,345 12/31/1992 10,860 11,148 11,307 11,470 1/31/1993 11,011 11,289 11,465 11,646 2/28/1993 11,133 11,415 11,592 11,788 3/31/1993 11,172 11,443 11,632 11,834 4/30/1993 11,256 11,513 11,720 11,926 5/31/1993 11,229 11,485 11,692 11,894 6/30/1993 11,382 11,625 11,851 12,017 7/31/1993 11,423 11,653 11,894 12,043 8/31/1993 11,573 11,807 12,050 12,188 9/30/1993 11,610 11,835 12,088 12,233 10/31/1993 11,616 11,821 12,094 12,260 11/30/1993 11,588 11,793 12,065 12,238 12/31/1993 11,638 11,835 12,117 12,288 1/31/1994 11,751 11,933 12,235 12,392 2/28/1994 11,634 11,807 12,113 12,269 3/31/1994 11,474 11,639 11,946 12,157 4/30/1994 11,389 11,541 11,858 12,086 5/31/1994 11,381 11,527 11,850 12,103 6/30/1994 11,380 11,513 11,849 12,128 7/31/1994 11,512 11,639 11,986 12,257 8/31/1994 11,541 11,653 12,016 12,300 9/30/1994 11,469 11,569 11,942 12,236 10/31/1994 11,475 11,569 11,948 12,253 11/30/1994 11,414 11,499 11,884 12,189 12/31/1994 11,428 11,499 11,898 12,221 1/31/1995 11,596 11,653 12,074 12,407 2/28/1995 11,801 11,863 12,287 12,619 3/31/1995 11,882 11,933 12,372 12,695 4/30/1995 12,000 12,031 12,494 12,825 5/31/1995 12,292 12,325 12,798 13,126 6/30/1995 12,360 12,381 12,869 13,205 7/31/1995 12,392 12,395 12,902 13,239 8/31/1995 12,475 12,465 12,989 13,330 9/30/1995 12,545 12,535 13,062 13,406 10/31/1995 12,651 12,619 13,172 13,538 11/30/1995 12,779 12,745 13,305 13,682 12/31/1995 12,881 12,829 13,412 13,804 1/31/1996 12,983 12,927 13,518 13,928 2/29/1996 12,898 12,829 13,429 13,832 3/31/1996 12,842 12,759 13,371 13,792 4/30/1996 12,827 12,731 13,355 13,778 5/31/1996 12,838 12,731 13,366 13,788 6/30/1996 12,927 12,815 13,459 13,907 7/31/1996 12,976 12,857 13,510 13,956 8/31/1996 12,991 12,857 13,526 13,990 9/30/1996 13,112 12,969 13,652 14,143 10/31/1996 13,265 13,109 13,811 14,339 11/30/1996 13,380 13,207 13,931 14,479 12/31/1996 13,356 13,179 13,907 14,442 1/31/1997 13,402 13,207 13,954 14,507 2/28/1997 13,421 13,221 13,974 14,531 3/31/1997 13,351 13,137 13,901 14,497 4/30/1997 13,487 13,263 14,042 14,637 5/31/1997 13,576 13,333 14,135 14,743 6/30/1997 13,676 13,417 14,239 14,858 7/31/1997 13,916 13,655 14,489 15,077 8/31/1997 13,860 13,585 14,431 15,056 9/30/1997 14,010 13,711 14,588 15,196 10/31/1997 14,145 13,838 14,731 15,332 11/30/1997 14,162 13,852 14,750 15,361 12/31/1997 14,265 13,936 14,858 15,476 1/31/1998 14,443 14,104 15,045 15,657 2/28/1998 14,422 14,076 15,010 15,654 3/31/1998 14,457 14,090 15,063 15,715 4/30/1998 14,523 14,146 15,131 15,790 5/31/1998 14,616 14,230 15,230 15,885 6/30/1998 14,700 14,300 15,318 15,978 7/31/1998 14,743 14,328 15,365 16,048 8/31/1998 14,977 14,552 15,610 16,281 9/30/1998 15,242 14,790 15,887 16,573 10/31/1998 15,250 14,790 15,901 16,627 11/30/1998 15,243 14,776 15,895 16,604 12/31/1998 15,282 14,790 15,937 16,665 1/31/1999 15,340 14,846 15,999 16,749 2/28/1999 15,214 14,720 15,869 16,597 3/31/1999 15,326 14,806 15,987 16,733 4/30/1999 15,350 14,823 15,998 16,789 5/31/1999 15,273 14,743 15,934 16,723 6/30/1999 15,313 14,757 15,977 16,771 7/31/1999 15,334 14,769 16,001 16,790 8/31/1999 15,367 14,788 16,020 16,823 9/30/1999 15,466 14,887 16,141 16,960 10/31/1999 15,477 14,888 16,153 16,999 11/30/1999 15,511 14,894 16,190 17,027 12/31/1999 15,490 14,873 16,170 17,029 1/31/2000 15,475 14,841 16,155 16,991 2/29/2000 15,585 14,947 16,271 17,113 3/31/2000 15,699 15,051 16,408 17,246 4/30/2000 15,706 15,034 16,401 17,258 5/31/2000 15,749 15,080 16,448 17,308 6/30/2000 15,947 15,260 16,657 17,538 7/31/2000 16,039 15,338 16,754 17,662 8/31/2000 16,166 15,450 16,890 17,826 9/30/2000 16,302 15,569 17,033 17,987 10/31/2000 16,349 15,589 17,084 18,068 11/30/2000 16,525 15,762 17,270 18,276 12/31/2000 16,763 15,980 17,521 18,542 1/31/2001 17,004 16,184 17,775 18,810 2/28/2001 17,129 16,309 17,907 18,957 3/31/2001 17,255 16,404 18,040 19,130 4/30/2001 17,290 16,427 18,080 19,142 5/31/2001 17,367 16,490 18,161 19,255 6/30/2001 17,403 16,530 18,219 19,327 7/31/2001 17,662 16,749 18,474 19,636 The Class B contingent deferred sales charge (CDSC) is not included in the above graph, since the performance is for more than six years and the CDSC would no longer apply. Average Annual Total Return As of Inception 1 5 10 July 31, 2001 Date Year Year Year -------------------------------------------------------------------------- Class A Shares* 2/1/89 5.74% 5.49% 5.85% -------------------------------------------------------------------------- Class B Shares** 1/21/99/1/ 4.20% 5.11% 5.29% -------------------------------------------------------------------------- Trust Shares 9/2/97/1/ 10.26% 6.46% 6.33% -------------------------------------------------------------------------- *Reflects maximum 4.00% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 7/31/91 to 7/31/01 in the indicated share class versus a similar in- vestment in the Fund's benchmark, and represents the reinvestment of divi- dends and capital gains in the Fund. The performance of the AmSouth Limited Term Bond Fund is measured against the Merrill Lynch 1-5-Year Government/Corporate Bond Index, an unmanaged in- dex generally representative of the total return of short-term government and corporate bonds. The index does not reflect the deduction of fees asso- ciated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added servic- es. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reim- bursements not been in effect, performance quoted would have been lower. /1/Performance for the Class B and Trust Shares, which commenced operations on 1/21/99 and 9/2/97, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Effective 12/1/99, the Classic and Premier Shares were renamed Class A and Trust Shares, respectively. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 35 AmSouth Government Income Fund Portfolio Managers John P. Boston, CFA, Senior Vice President John Mark McKenzie, Senior Vice President AmSouth Bank The AmSouth Government Income Fund is co-managed by John Boston, CFA, and John Mark McKenzie. John Boston also manages the AmSouth Limited Term Bond Fund, and co-manages the AmSouth Bond Fund. He has more than 11 years of experience as a fixed- income manager. He holds a bachelor's degree in finance and political science and is a Chartered Financial Analyst. John Mark McKenzie has more than 14 years of investment management experience. In addition to co- managing the AmSouth Government Income Fund, he manages the AmSouth Limited Term U.S. Government Fund and four of the AmSouth Money Market Funds: U.S. Treasury, Treasury Reserve, Prime, and Institutional Prime Obligations. He holds bachelor's degrees in banking and finance and earned a law degree from the University of Mississippi School of Law. PORTFOLIO MANAGER'S PERSPECTIVE "The AmSouth Government Income Fund is more suitable for investors who seek income but also demand the safety of U.S. government securities. Although we attempt to consistently generate a high level of income, investors should be aware that yields and principal values vary and that the Fund is not guaranteed by the U.S. government." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund produced a total return of 11.25% (Class A Shares at NAV). In comparison, the Lehman Brothers Mortgage In- dex rose 12.54%, while the Lipper U.S. Mortgage Funds Index gained 11.48%.+ Q. What factors affected your performance? A. Traditionally, the AmSouth Government Income Funds returns are based, to a large extent, on the performance of the U.S. Treasury and mortgage-backed secu- rities. During the most recent, 12-month period, we benefited from an overall rally in Treasury securities, continuing Treasury buy backs--which boost the price of these securities--and a contraction in mortgage spreads. With the Fed lowering interest rates during the last seven months, we saw a ma- jor shift in yields, especially at the short end of the yield curve. Generally, yield declines in the bond market increases proportionally the value of compa- rable bonds held in our portfolio. For example, from July 2000 to July 2001, yields on one-year securities tumbled 265 basis points (2.65%); five-year paper fell 160 basis points (1.60%); and the 30-year bond's yield declined 35 basis points (0.35%). We feel that this disparity between long- and short-securities' yields was expected. The Fed policy affects short-term rates, while the market sets long-term rates. Consequently, most price appreciation took place among the short- and intermediate-term securities we owned. A slower economy and benign inflation in general also helped bonds; although inflation picked up slightly during the period, we feel it was not considered a major concern by bond investors. As of July 31, 2001, the Fund's average maturity was 6.0 years, and its average credit quality was AAA (as rated by the Standard & Poor's). Approximately 38.6% of the Fund was invested in government agency securities, 20.6% in U.S. Trea- suries, 38.5% in mortgage-backed securities, and 0.9% in cash equivalents.++ Q. What is your outlook for the next six to 12 months? A. In recent months, we have become a bit more defensive in positioning the portfolio; we believe much of the bond-market rally is over. We anticipate the economy will bounce back sometime toward the end of this year or the beginning of 2002. We see interest rates either stabilizing or, when the economy picks up, even rising somewhat. In response, we began shortening the Fund's average maturity. + The Lipper U.S. Mortgage Funds Index consists of managed mutual funds that invest at least 65% of their assets in mortgages/securities issued or guar- anteed as to principal and interest by the U.S. government and certain fed- eral agencies. ++The Fund's portfolio composition is subject to change. 36 AmSouth Government Income Fund [CHART] Value of a $10,000 Investment AmSouth AmSouth AmSouth Lehman Government Government Government Brothers Income Fund Income Fund Income Fund Mortgage (Class A Shares)* (Class B Shares) (Trust Shares) Index 10/1/1993 9,597 10,000 10,000 10,000 10/31/1993 9,573 9,958 9,975 10,029 11/30/1993 9,549 9,930 9,950 10,009 12/31/1993 9,598 9,972 10,001 10,090 1/31/1994 9,656 10,028 10,061 10,190 2/28/1994 9,597 9,958 10,000 10,119 3/31/1994 9,460 9,804 9,858 9,855 4/30/1994 9,411 9,748 9,806 9,783 5/31/1994 9,431 9,762 9,827 9,822 6/30/1994 9,461 9,776 9,858 9,800 7/31/1994 9,572 9,888 9,973 9,996 8/31/1994 9,603 9,916 10,005 10,028 9/30/1994 9,552 9,846 9,952 9,886 10/31/1994 9,552 9,846 9,952 9,880 11/30/1994 9,511 9,790 9,909 9,849 12/31/1994 9,562 9,832 9,962 9,928 1/31/1995 9,720 9,986 10,125 10,140 2/28/1995 9,904 10,168 10,318 10,399 3/31/1995 9,926 10,182 10,340 10,448 4/30/1995 10,027 10,280 10,445 10,596 5/31/1995 10,309 10,559 10,737 10,930 6/30/1995 10,376 10,615 10,807 10,992 7/31/1995 10,379 10,615 10,810 11,011 8/31/1995 10,476 10,699 10,911 11,125 9/30/1995 10,558 10,783 10,996 11,223 10/31/1995 10,672 10,881 11,114 11,323 11/30/1995 10,807 11,021 11,255 11,452 12/31/1995 10,936 11,133 11,388 11,595 1/31/1996 11,000 11,189 11,454 11,682 2/29/1996 10,864 11,049 11,314 11,586 3/31/1996 10,820 10,993 11,269 11,544 4/30/1996 10,767 10,923 11,213 11,511 5/31/1996 10,739 10,895 11,183 11,478 6/30/1996 10,847 10,993 11,295 11,636 7/31/1996 10,888 11,021 11,337 11,680 8/31/1996 10,909 11,035 11,359 11,680 9/30/1996 11,072 11,189 11,529 11,875 10/31/1996 11,308 11,427 11,774 12,107 11/30/1996 11,494 11,594 11,968 12,280 12/31/1996 11,381 11,483 11,850 12,217 1/31/1997 11,428 11,510 11,899 12,307 2/28/1997 11,446 11,524 11,917 12,348 3/31/1997 11,339 11,399 11,806 12,232 4/30/1997 11,494 11,552 11,968 12,426 5/31/1997 11,598 11,650 12,075 12,548 6/30/1997 11,737 11,776 12,221 12,695 7/31/1997 12,001 12,028 12,495 12,933 8/31/1997 11,937 11,958 12,429 12,902 9/30/1997 12,103 12,112 12,603 13,066 10/31/1997 12,252 12,252 12,760 13,211 11/30/1997 12,309 12,308 12,820 13,255 12/31/1997 12,445 12,434 12,963 13,375 1/31/1998 12,580 12,559 13,105 13,508 2/28/1998 12,600 12,559 13,127 13,536 3/31/1998 12,643 12,601 13,173 13,593 4/30/1998 12,691 12,629 13,223 13,670 5/31/1998 12,787 12,727 13,325 13,761 6/30/1998 12,861 12,783 13,390 13,827 7/31/1998 12,910 12,825 13,442 13,897 8/31/1998 13,056 12,965 13,609 14,024 9/30/1998 13,273 13,161 13,823 14,193 10/31/1998 13,253 13,133 13,803 14,175 11/30/1998 13,314 13,189 13,882 14,246 12/31/1998 13,334 13,203 13,904 14,307 1/31/1999 13,417 13,273 13,978 14,409 2/28/1999 13,284 13,133 13,854 14,351 3/31/1999 13,343 13,175 13,917 14,447 4/30/1999 13,400 13,217 13,978 14,514 5/31/1999 13,334 13,147 13,910 14,432 6/30/1999 13,291 13,091 13,866 14,382 7/31/1999 13,248 13,049 13,807 14,284 8/31/1999 13,226 13,007 13,815 14,284 9/30/1999 13,381 13,147 13,964 14,515 10/31/1999 13,436 13,203 14,022 14,600 11/30/1999 13,454 13,203 14,042 14,607 12/31/1999 13,418 13,161 14,006 14,572 1/31/2000 13,389 13,119 13,976 14,445 2/29/2000 13,527 13,245 14,121 14,613 3/31/2000 13,716 13,413 14,320 14,772 4/30/2000 13,664 13,368 14,268 14,782 5/31/2000 13,655 13,335 14,261 14,790 6/30/2000 13,877 13,558 14,494 15,106 7/31/2000 13,983 13,654 14,623 15,203 8/31/2000 14,178 13,835 14,828 15,434 9/30/2000 14,242 13,889 14,897 15,594 10/31/2000 14,365 14,002 15,012 15,707 11/30/2000 14,592 14,214 15,267 15,942 12/31/2000 14,850 14,442 15,522 16,199 1/31/2001 15,020 14,598 15,702 16,452 2/28/2001 15,145 14,712 15,835 16,545 3/31/2001 15,211 14,769 15,906 16,641 4/30/2001 15,156 14,707 15,851 16,665 5/31/2001 15,223 14,764 15,922 16,775 6/30/2001 15,259 14,789 15,962 16,810 7/31/2001 15,556 15,069 16,275 17,109 The Class B contingent deferred sales charge (CDSC) is not included in the above graph, since the performance is for more than six years and the CDSC would no longer apply. ------------------------------------------------------------------------------- - Average Annual Total Return ------------------------------------------------------------------------------- - As of Inception 1 5 Since July 31, 2000 Date Year Year Inception ------------------------------------------------------------------------------- - Class A Shares* 10/1/93 6.80% 6.53% 5.81% ------------------------------------------------------------------------------- - Class B Shares** 3/13/00/1/ 5.36% 6.14% 5.38% ------------------------------------------------------------------------------- - Trust Shares 9/2/97/1/ 11.30% 7.50% 6.42% ------------------------------------------------------------------------------- - *Reflects maximum 4.00% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%) The chart above represents a comparison of a hypothetical $10,000 investment from 10/1/93 to 7/31/01 in the indicated share class versus a similar invest- ment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Government Income Fund is measured against the Lehman Brothers Mortgage Index, an unmanaged index generally representative of the mortgage bond market as a whole. The index does not reflect the deduc- tion of fees associated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. /1/Performance for the Class B and Trust Shares, which commenced operations on 3/13/00 and 9/2/97, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Effective 12/1/99, the Classic and Premier Shares were renamed Class A and Trust Shares, respectively. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 37 AmSouth Limited Term U.S. Government Fund Portfolio Manager John Mark McKenzie Senior Vice President AmSouth Bank AmSouth Investment Management Company, LLC John Mark has more than 14 years of investment management experience. In addition to managing the AmSouth Limited Term U.S. Government Fund, he co-manages the AmSouth Government Income Fund and manages four of the AmSouth Money Market Funds: U.S.Treasury, Treasury Reserve, Prime, and Institutional Prime Obligations. He holds bachelors' degrees in banking and finance and earned a law degree from the University of Mississippi School of Law. PORTFOLIO MANAGER'S PROSPECTIVE "The AmSouth Limited Term U.S. Government Fund seeks to provide current income from high grade securities while limiting shape price fluctuations. We minimize share price movements by investing in securities with short maturities. While we generally track the Merrill Lynch 1 to 5 Year Government Bond Index, we seek to outperform it through an occasional contrarian stance to prevailing market sentiment." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund produced a total return of 8.71% (Class A Shares at NAV). In comparison, the Merrill Lynch 1-5-Year Gov- ernment Bond Index gained 10.46%. Q. What factors affected your performance? A. Traditionally, the AmSouth Limited Term U.S. Government Funds returns are based, to a large extent, on the performance of the U.S. Treasury and mortgage- backed securities. During the most recent, 12-month period, we benefited from an overall rally in Treasury securities, continuing Treasury buy backs--which boost the price of these securities--and a contraction in mortgage spreads. With the Fed lowering interest rates during the last seven months, we saw a ma- jor shift in yields, especially at the short end of the yield curve. Generally, yield declines in the bond market increase proportionally the value of compara- ble bonds held in our portfolio. For example, from July 2000 to July 2001, yields on one-year securities tumbled 265 basis points (2.65%); five-year paper fell 160 basis points (1.60%); and the 30-year bond's yield declined 35 basis points (0.35%). We feel that this disparity between long- and short-securities' yields was ex- pected. The Fed policy affects short-term rates, while the market sets long- term rates. Consequently, the short-term holdings of the portfolio helped to produce significant price appreciation. We responded to prevailing conditions by lengthening the average maturity of the portfolio slightly, and continued to emphasize agency paper. As of July 31, 2001, the Fund's average maturity was 2.8 years, and its average credit quality was AAA (as rated by the Standard & Poor's). Approximately 35.5% of the Fund were invested in government agency securities, 42.4% in U.S. Trea- suries, 17.7% in mortgage-backed securities, and 2.9% in cash.++ Q. What is your outlook for the next six to 12 months? A. In recent months, we have become a bit more defensive in positioning the portfolio; we believe much of the bond-market rally is over. We anticipate the economy will bounce back sometime toward the end of this year or the beginning of 2002. We see interest rates either stabilizing or, when the economy picks up, even rising somewhat. Still, we have not lowered the Fund's average maturi- ty; with its short structure, we feel the interest-rate risk of the portfolio should be minimal. ++The Fund's portfolio composition is subject to change. 38 AmSouth Limited Term U.S. Government Fund Value of a $10,000 Investment [CHART] AmSouth Limited AmSouth Limited AmSouth Limited Merrill Lynch Term U.S. Term U.S. Term U.S. 1-5-Year Government Fund Government Fund Government Fund Government (Class A Shares)* (Class B Shares) (Trust Shares) Bond Index 7/31/91 9,601 10,000 10,000 10,000 8/31/91 9,787 10,192 10,194 10,163 9/30/91 9,947 10,356 10,361 10,326 10/31/91 10,067 10,466 10,485 10,462 11/30/91 10,173 10,575 10,596 10,581 12/31/91 10,399 10,795 10,832 10,701 1/31/92 10,280 10,658 10,707 10,899 2/29/92 10,306 10,685 10,735 10,843 3/31/92 10,253 10,616 10,680 10,879 4/30/92 10,346 10,699 10,777 10,853 5/31/92 10,493 10,849 10,929 10,959 6/30/92 10,626 10,973 11,068 11,087 7/31/92 10,799 11,151 11,248 11,229 8/31/92 10,919 11,260 11,373 11,393 9/30/92 11,079 11,411 11,540 11,516 10/31/92 10,905 11,233 11,359 11,654 11/30/92 10,826 11,137 11,276 11,538 12/31/92 10,972 11,274 11,429 11,495 1/31/93 11,185 11,479 11,650 11,623 2/28/93 11,358 11,658 11,831 11,798 3/31/93 11,385 11,671 11,859 11,938 4/30/93 11,478 11,753 11,956 11,980 5/31/93 11,425 11,699 11,900 12,071 6/30/93 11,545 11,808 12,025 12,035 7/31/93 11,558 11,808 12,039 12,157 8/31/93 11,691 11,932 12,178 12,181 9/30/93 11,731 11,973 12,219 12,328 10/31/93 11,744 11,973 12,233 12,372 11/30/93 11,704 11,918 12,191 12,396 12/31/93 11,744 11,945 12,233 12,375 1/31/94 11,824 12,027 12,316 12,423 2/28/94 11,704 11,890 12,191 12,523 3/31/94 11,598 11,767 12,080 12,400 4/30/94 11,531 11,699 12,011 12,287 5/31/94 11,531 11,685 12,011 12,215 6/30/94 11,545 11,685 12,025 12,232 7/31/94 11,651 11,781 12,136 12,256 8/31/94 11,678 11,808 12,164 12,383 9/30/94 11,625 11,740 12,108 12,426 10/31/94 11,638 11,740 12,122 12,361 11/30/94 11,598 11,699 12,080 12,378 12/31/94 11,625 11,712 12,108 12,312 1/31/95 11,758 11,836 12,247 12,344 2/28/95 11,931 12,000 12,427 12,531 3/31/95 11,997 12,055 12,497 12,741 4/30/95 12,104 12,151 12,607 12,813 5/31/95 12,330 12,370 12,843 12,942 6/30/95 12,397 12,425 12,913 13,238 7/31/95 12,397 12,411 12,913 13,313 8/31/95 12,477 12,479 12,996 13,348 9/30/95 12,543 12,548 13,065 13,439 10/31/95 12,663 12,658 13,190 13,514 11/30/95 12,783 12,767 13,315 13,644 12/31/95 12,889 12,863 13,426 13,785 1/31/96 12,969 12,932 13,509 13,904 2/29/96 12,850 12,795 13,384 14,028 3/31/96 12,783 12,712 13,315 13,933 4/30/96 12,743 12,671 13,273 13,893 5/31/96 12,743 12,658 13,273 13,879 6/30/96 12,836 12,740 13,370 13,888 7/31/96 12,876 12,767 13,412 14,006 8/31/96 12,876 12,753 13,412 14,054 9/30/96 12,996 12,863 13,537 14,088 10/31/96 13,156 13,014 13,703 14,240 11/30/96 13,289 13,137 13,842 14,431 12/31/96 13,236 13,068 13,786 14,567 1/31/97 13,289 13,110 13,842 14,531 2/28/97 13,316 13,123 13,870 14,596 3/31/97 13,265 13,068 13,817 14,620 4/30/97 13,369 13,164 13,925 14,585 5/31/97 13,447 13,219 14,007 14,724 6/30/97 13,538 13,301 14,101 14,828 7/31/97 13,719 13,466 14,290 14,941 8/31/97 13,677 13,425 14,246 15,153 9/30/97 13,805 13,548 14,379 15,135 10/31/97 13,922 13,644 14,501 15,273 11/30/97 13,945 13,671 14,525 15,411 12/31/97 14,053 13,767 14,638 15,443 1/31/98 14,200 13,890 14,791 15,559 2/28/98 14,202 13,890 14,793 15,738 3/31/98 14,237 13,929 14,830 15,736 4/30/98 14,299 13,963 14,894 15,795 5/31/98 14,376 14,027 14,975 15,868 6/30/98 14,438 14,088 15,039 15,961 7/31/98 14,487 14,124 15,090 16,053 8/31/98 14,693 14,313 15,305 16,123 9/30/98 14,956 14,557 15,579 16,374 10/31/98 14,962 14,549 15,584 16,660 11/30/98 14,950 14,527 15,572 16,726 12/31/98 14,993 14,556 15,610 16,684 1/31/99 15,056 14,606 15,675 16,743 2/28/99 14,923 14,467 15,536 16,820 3/31/99 15,015 14,546 15,633 16,668 4/30/99 15,061 14,580 15,680 16,794 5/31/99 15,004 14,515 15,621 16,846 6/30/99 15,004 14,505 15,621 16,790 7/31/99 15,007 14,497 15,624 16,839 8/31/99 15,025 14,503 15,642 16,866 9/30/99 15,135 14,599 15,757 16,908 10/31/99 15,153 14,606 15,775 17,036 11/30/99 15,168 14,611 15,792 17,073 12/31/99 15,155 14,588 15,778 17,098 1/31/00 15,127 14,536 15,733 17,096 2/29/00 15,219 14,614 15,829 17,060 3/31/00 15,322 14,707 15,954 17,180 4/30/00 15,315 14,706 15,948 17,313 5/31/00 15,364 14,729 15,986 17,341 6/30/00 15,541 14,889 16,188 17,402 7/31/00 15,627 14,977 16,280 17,622 8/31/00 15,749 15,084 16,409 17,736 9/30/00 15,874 15,179 16,524 17,895 10/31/00 15,941 15,249 16,613 18,042 11/30/00 16,091 15,366 16,771 18,153 12/31/00 16,279 15,553 16,969 18,364 1/31/01 16,461 15,702 17,162 18,626 2/28/01 16,586 15,811 17,277 18,865 3/31/01 16,681 15,900 17,395 19,003 4/30/01 16,664 15,882 17,379 19,161 5/31/01 16,723 15,928 17,443 19,171 6/30/01 16,768 15,946 17,493 19,270 7/31/01 16,989 16,162 17,726 19,334 Average Annual Total Return As of Inception 1 5 10 July 31, 2001 Date Year Year Year -------------------------------------------------------------------------- Class A Shares* 2/28/97/1/ 4.38% 4.85% 5.44% -------------------------------------------------------------------------- Class B Shares** 3/3/98/2/ 2.91% 4.50% 4.92% -------------------------------------------------------------------------- Trust Shares 12/14/98/2/ 8.88% 5.74% 5.89% -------------------------------------------------------------------------- * Reflects maximum 4.00% sales charge. ** Reflects applicable contingent deferred sales charge (maximum 5.00%). The Class B contingent deferred sales charge (CDSC) is not included in the above graph, since the performance is for more than six years and the CDSC would no longer apply. The chart above represents a comparison of a hypothetical $10,000 investment 7/31/91 to 7/31/01 in the indicated share class versus a similar investment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Limited Term U.S. Government Fund is measured against the Merrill Lynch 1-5-Year Government Bond Index, which is generally representative of the performance of government bonds in that maturity range with a rating of at least Baa. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can in- vest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. The quoted returns reflect the performance from 2/28/97 to 3/12/00 of the ISG Limited Term U.S. Government Fund, an open-end investment company that was the predecessor fund to the AmSouth Limited Term U.S. Government Fund. /1/The ISG Limited Term U.S. Government Fund commenced operations on 2/28/97, through a transfer of assets from certain collective trust fund ("commin- gled") accounts managed by First American National Bank, using substan- tially the same investment objective, policies and methodologies as the Fund. The quoted performance of the Fund includes performance of the com- mingled accounts for periods dating back to 7/31/91, and prior to the mu- tual fund's commencement of operations, as adjusted to reflect the ex- penses associated with the Fund. The commingled accounts were not regis- tered with the Securities and Exchange Commission and, therefore, were not subject to the investment restrictions imposed by law on registered mutual funds. If the commingled accounts had been registered, the commingled ac- counts' performance may have been adversely affected. /2/Performance for the Class B and Trust Shares, which commenced operations on 3/3/98 and 12/14/98, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 39 AmSouth Municipal Bond Fund+ Portfolio Manager Dorothy E. Thomas, CFA Senior Vice President AmSouth Bank AmSouth Investment Management Company, LLC Dorothy has more than 17 years of experience as an investment portfolio manager. She holds a M.B.A and a B.A. in economics. She also serves as manager of tax- exempt, fixed-income investments. PORTFOLIO MANAGER'S PERSPECTIVE With the AmSouth Municipal Bond Fund, we concentrate on high quality muncipal bonds those in the top three rating classes, or of comparable quality. As with other AmSouth bond funds, we strive to achieve strong returns by taking advantage of anticipated changes in interest rates." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund produced a total return of 8.36% (Class A Shares at NAV). In comparison, the Merrill Lynch 3-7-Year Munic- ipal Bond Index and the Merrill Lynch 1-12-Year Municipal Bond Index rose 9.21% and 9.52%, respectively, while the Lipper Intermediate Municipal Debt Funds In- dex gained 8.77%.++ It is also important to recognize income yield to shareholders. As of July 31, 2001, the Fund's 30-day SEC yield (Class A Shares) was 3.33%. For investors in the 39.1% federal income tax bracket, that is equivalent to a taxable yield of 5.47% (shareholders who are residents of Alabama could realize a higher tax- able-equivalent yield. The yield percentage is annualized.) We achieved our objectives while maintaining an average credit quality of AA1 (as rated by Standard & Poor's). As of July 31, 2001, the Fund's average matu- rity was 5.5 years.++ Q. What factors affected your performance? A. The 12-month period offered conditions that were very accommodating to the fortunes of fixed-income securities, and the municipal bond market. The Fund benefited from this constructive environment. While debt securities at the short end of the yield curve were appreciably affected by the Fed's six rate cuts in 2001 through July 31, 2001, yields on the intermediate-term securities we favor were not impacted as significantly. In fact, much of our positive price performance, driven higher by a decline in yields, took place at the end of 2000 and the beginning of 2001. With the majority of our shareholders living in Alabama, we maintained a signifi- cant allocation to municipal debt securities issued in the state (46.9% as of July 31, 2001). Therefore, Alabama shareholders enjoyed a tax- equivalent yield higher than the Funds' stated yield, because the interest from securities issued in Alabama generally was tax free to Alabama residents.++ Q. What is your outlook for the next six to 12 months? A. With an eye toward the future, we are positioned defensively. Usually, when there is a rebound in the economy--and we anticipate a modest recovery in the next year--that tends to put some pressure on bond prices. We also believe that the decline in interest rates is much closer to the end than the beginning. Therefore, we do not expect the type of huge boost from falling rates that we enjoyed during the last fiscal year. + The Fund's income may be subject to certain state and local taxes and, de- pending on one's tax status, the federal alternative minimum tax. ++ The Lipper Intermediate Municipal Debt Funds Index consists of managed mu- tual funds that invest in municipal debt issues with dollar-weighted aver- age maturities of five to ten years. ++The Fund's portfolio composition is subject to change. 40 AmSouth Municipal Bond Fund+ Value of a $10,000 Investment [CHART] AmSouth AmSouth AmSouth Merrill Lynch Merrill Lynch Municipal Municipal Municipal 3-7 Year 1-12 Year Bond Fund Bond Fund Bond Fund Municipal Municipal (Class A (Class B (Trust Bond Bond Shares)* Shares) Shares) Index Index 7/31/1991 $ 9,594 $10,000 $10,000 $10,000 $10,000 8/31/1991 9,725 10,123 10,136 10,166 10,181 9/30/1991 9,817 10,219 10,232 10,265 10,266 10/31/1991 9,935 10,329 10,355 10,335 10,350 11/30/1991 9,935 10,315 10,355 10,365 10,363 12/31/1991 10,131 10,521 10,559 10,530 10,521 1/31/1992 10,144 10,521 10,573 10,620 10,576 2/29/1992 10,105 10,466 10,532 10,578 10,514 3/31/1992 10,079 10,438 10,505 10,568 10,517 4/30/1992 10,131 10,479 10,559 10,662 10,618 5/31/1992 10,249 10,589 10,682 10,699 10,655 6/30/1992 10,406 10,753 10,846 10,900 10,883 7/31/1992 10,615 10,959 11,064 11,095 11,154 8/31/1992 10,563 10,890 11,010 11,031 11,030 9/30/1992 10,576 10,890 11,023 11,107 11,103 10/31/1992 10,576 10,890 11,023 11,012 10,976 11/30/1992 10,720 11,027 11,173 11,303 11,242 12/31/1992 10,733 11,027 11,187 11,355 11,321 1/31/1993 10,785 11,068 11,241 11,445 11,449 2/28/1993 11,060 11,342 11,528 11,682 11,739 3/31/1993 10,969 11,247 11,432 11,664 11,682 4/30/1993 11,021 11,288 11,487 11,728 11,786 5/31/1993 11,060 11,315 11,528 11,814 11,818 6/30/1993 11,152 11,397 11,623 11,907 11,958 7/31/1993 11,191 11,438 11,664 11,884 11,956 8/31/1993 11,322 11,562 11,801 12,004 12,133 9/30/1993 11,427 11,658 11,910 12,120 12,228 10/31/1993 11,453 11,671 11,937 12,187 12,323 11/30/1993 11,387 11,589 11,869 12,089 12,214 12/31/1993 11,545 11,740 12,033 12,262 12,407 1/31/1994 11,597 11,795 12,087 12,384 12,530 2/28/1994 11,427 11,603 11,910 12,176 12,252 3/31/1994 11,139 11,301 11,610 11,836 11,926 4/30/1994 11,178 11,329 11,651 11,913 11,977 5/31/1994 11,204 11,356 11,678 11,995 12,031 6/30/1994 11,243 11,384 11,719 12,000 12,021 7/31/1994 11,387 11,521 11,869 12,220 12,278 8/31/1994 11,414 11,534 11,896 12,231 12,309 9/30/1994 11,335 11,452 11,814 12,132 12,169 10/31/1994 11,257 11,356 11,733 12,056 12,087 11/30/1994 11,126 11,219 11,596 11,939 11,936 12/31/1994 11,243 11,329 11,719 12,049 12,092 1/31/1995 11,335 11,411 11,814 12,128 12,270 2/28/1995 11,558 11,630 12,046 12,383 12,598 3/31/1995 11,662 11,712 12,156 12,459 12,659 4/30/1995 11,702 11,753 12,196 12,542 12,709 5/31/1995 11,911 11,945 12,415 12,826 13,074 6/30/1995 11,924 11,959 12,428 12,839 13,049 7/31/1995 12,068 12,082 12,578 12,943 13,149 8/31/1995 12,147 12,151 12,660 13,060 13,288 9/30/1995 12,160 12,164 12,674 13,058 13,300 10/31/1995 12,304 12,288 12,824 13,120 13,411 11/30/1995 12,369 12,342 12,892 13,302 13,634 12/31/1995 12,408 12,370 12,933 13,333 13,710 1/31/1996 12,461 12,411 12,988 13,489 13,877 2/29/1996 12,500 12,452 13,029 13,464 13,745 03/31/1996 12,369 12,301 12,892 13,351 13,735 4/30/1996 12,343 12,274 12,865 13,349 13,736 5/31/1996 12,330 12,247 12,851 13,340 13,738 6/30/1996 12,408 12,315 12,933 13,395 13,817 7/31/1996 12,500 12,397 13,029 13,509 13,948 8/31/1996 12,552 12,438 13,083 13,529 13,960 9/30/1996 12,605 12,479 13,138 13,647 14,086 10/31/1996 12,709 12,575 13,247 13,772 14,220 11/30/1996 12,866 12,712 13,411 13,932 14,399 12/31/1996 12,840 12,685 13,383 13,915 14,381 1/31/1997 12,814 12,644 13,356 13,945 14,426 2/28/1997 12,906 12,726 13,452 14,044 14,526 3/31/1997 12,762 12,575 13,301 13,903 14,374 4/30/1997 12,788 12,589 13,329 13,931 14,432 5/31/1997 12,945 12,726 13,492 14,096 14,638 6/30/1997 13,089 12,863 13,643 14,260 14,787 7/31/1997 13,333 13,096 13,896 14,502 15,116 8/31/1997 13,219 12,973 13,779 14,411 14,994 9/30/1997 13,374 13,110 13,940 14,560 15,163 10/31/1997 13,424 13,151 13,993 14,614 15,225 11/30/1997 13,452 13,164 14,037 14,671 15,287 12/31/1997 13,634 13,329 14,228 14,817 15,487 1/31/1998 13,745 13,438 14,331 14,931 15,616 2/28/1998 13,733 13,411 14,333 14,953 15,642 3/31/1998 13,720 13,384 14,321 14,975 15,662 4/30/1998 13,643 13,301 14,242 14,914 15,590 5/31/1998 13,851 13,493 14,460 15,105 15,817 6/30/1998 13,885 13,521 14,497 15,145 15,861 7/31/1998 13,906 13,534 14,520 15,199 15,911 8/31/1998 14,142 13,753 14,752 15,417 16,156 9/30/1998 14,301 13,890 14,935 15,562 16,330 10/31/1998 14,308 13,890 14,929 15,594 16,351 11/30/1998 14,325 13,890 14,948 15,612 16,375 12/31/1998 14,373 13,932 14,999 15,698 16,457 1/31/1999 14,570 14,110 15,206 15,883 16,685 2/28/1999 14,456 13,979 15,088 15,828 16,586 3/31/1999 14,427 13,957 15,060 15,840 16,572 4/30/1999 14,474 13,977 15,109 15,894 16,619 5/31/1999 14,360 13,861 14,991 15,830 16,527 6/30/1999 14,108 13,624 14,744 15,651 16,291 7/31/1999 14,227 13,716 14,854 15,781 16,431 8/31/1999 14,177 13,665 14,819 15,785 16,412 9/30/1999 14,197 13,660 14,826 15,800 16,435 10/31/1999 14,085 13,545 14,710 15,746 16,347 11/30/1999 14,195 13,654 14,842 15,844 16,495 12/31/1999 14,133 13,568 14,763 15,801 16,456 1/31/2000 14,054 13,489 14,681 15,774 16,399 2/29/2000 14,165 13,587 14,798 15,838 16,518 3/31/2000 14,370 13,769 15,014 15,989 16,730 4/30/2000 14,268 13,678 14,925 15,942 16,668 5/31/2000 14,211 13,600 14,852 15,938 16,622 6/30/2000 14,543 13,926 15,217 16,258 17,009 7/31/2000 14,742 14,094 15,426 16,447 17,237 8/31/2000 14,925 14,260 15,605 16,622 17,455 9/30/2000 14,852 14,196 15,546 16,592 17,392 10/31/2000 14,961 14,278 15,662 16,711 17,550 11/30/2000 15,040 14,343 15,747 16,780 17,634 12/31/2000 15,379 14,659 16,104 17,105 18,042 1/31/2001 15,597 14,858 16,317 17,405 18,310 2/28/2001 15,631 14,896 16,370 17,421 18,333 3/31/2001 15,742 14,979 16,488 17,586 18,503 4/30/2001 15,589 14,824 16,315 17,472 18,296 5/31/2001 15,747 14,951 16,482 17,670 18,509 6/30/2001 15,814 15,020 16,554 17,772 18,641 7/31/2001 15,975 15,164 16,741 17,962 18,877 The Class B contingent deferred sales charge (CDSC) is not included in the above graph, since the performance is for more than six years and the CDSC would no longer apply. Average Annual Total Return As of Inception 1 5 10 July 31, 2001 Date Year Year Year -------------------------------------------------------------------------- Class A Shares* 7/1/97/1/ 3.99% 4.17% 4.80% -------------------------------------------------------------------------- Class B Shares** 2/3/99/2/ 2.60% 3.77% 4.25% -------------------------------------------------------------------------- Trust Shares 9/2/97/2/ 8.52% 5.14% 5.29% -------------------------------------------------------------------------- * Reflects maximum 4.00% sales charge. ** Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 7/31/91 to 7/31/01 in the indicated share class versus a similar invest- ment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Municipal Bond Fund is measured against the Merrill Lynch 3-7-Year Municipal Bond Index and the Merrill Lynch 1-12-Year Municipal Bond Index, which are unmanaged indices that are generally repre- sentative of municipal bonds with intermediate maturities. The indices do not reflect the deduction of fees associated with a mutual fund, such as invest- ment management fees. The Fund's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the pe- riod shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. /1/The quoted performance of the AmSouth Municipal Bond Fund ("Mutual Fund") includes performance of common and collective trust fund ("commingled") accounts advised by AmSouth Bank for periods dating back to 7/31/91 for the Municipal Bond Fund and prior to the Mutual Fund's commencement of op- erations on 7/1/97, as adjusted to reflect the expenses associated with the Mutual Funds. The commingled accounts were not registered with the Se- curities and Exchange Commission and, therefore, were not subject to the investment restrictions imposed by law on registered mutual funds. If the commingled account had been registered, the commingled accounts' perfor- mance may have been adversely affected. /2/Performance for the Class B and Trust Shares, which commenced operations on 2/3/99 and 9/2/97, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 41 AmSouth Florida Tax-Exempt Fund+ Portfolio Manager Dorothy E. Thomas, CFA Senior Vice President AmSouth Bank AmSouth Investment Management Company, LLC Dorothy has more than 17 years of experience as an investment portfolio manager. She holds a M.B.A. and a B.A. in economics. She also serves as manager of tax- exempt, fixed-income investments. PORTFOLIO MANAGER'S PERSPECTIVE "The AmSouth Florida Tax Exempt Fund has a portfolio of high quality issues in a fast growing state with a strong economic base. Interest on the bonds is exempt from both Federal income tax and the Florida intangibles tax. This portfolio is managed to benefit from expected interest rate moves." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund produced a total return of 7.46% (Class A Shares at NAV). In comparison, the Merrill Lynch 3-7-Year Munic- ipal Bond Index rose 9.21%. It is also important to recognize income yield to shareholders. As of July 31, 2001, the Fund's 30-day SEC yield (Class A Shares) was 3.23%. For investors in the 39.1% federal income tax bracket, that is equivalent to a taxable yield of 5.30% (shareholders who are residents of Florida could realize a higher tax- able-equivalent yield. The yield percentage is annualized.) We achieved our objectives while maintaining an average credit quality of AA1 (as rated by Standard & Poor's). As of July 31, 2001, the Fund's average matu- rity was 5.3 years.++ Q. What factors affected your performance? A. The 12-month period offered conditions that were very accommodating to the fortunes of fixed-income securities, and the municipal bond market. The Fund benefited from this constructive environment. While debt securities at the short end of the yield curve were appreciably affected by the Fed's six rate cuts in 2001 through July 31, 2001, yields on the intermediate-term securities we favor were not impacted as significantly. In fact, much of our positive price performance, driven higher by a decline in yields, took place at the end of 2000 and the beginning of 2001. On a state-specific basis, the Florida municipal market remained very active. With the majority of our shareholders living in Florida, we maintained a sig- nificant allocation to municipal debt securities issued in the state (96.4% as of July 31, 2001). As a result, Florida shareholders enjoyed a higher tax-equivalent yield.++ Q. What is your outlook for the next six to 12 months? A. With an eye toward the future, we are positioned defensively. Usually, when there is a rebound in the economy--and we anticipate a modest recovery in the next year--that tends to put some pressure on bond prices. We also believe that the decline in interest rates is much closer to the end than the beginning. Therefore, we do not expect the type of huge boost from falling rates that we enjoyed during the last fiscal year. + The Fund's income may be subject to certain state and local taxes and, de- pending on one's tax status, the federal alternative minimum tax. ++The Fund's portfolio composition is subject to change. 42 AmSouth Florida Tax-Exempt Fund+ Value of a $10,000 Investment [CHART] AmSouth AmSouth AmSouth Florida Florida Florida Tax-Exempt Tax-Exempt Tax-Exempt Merrill Lynch Merrill Lynch Fund Fund Fund 3-7-Year 1-12-Year (Class A (Class B (Trust Municipal Municipal Shares)* Shares)** Shares) Bond Index Bond Index 9/30/94 9,597 10,000 10,000 10,000 10,000 10/31/94 9,530 9,918 9,930 9,937 9,933 11/30/94 9,414 9,790 9,809 9,841 9,808 12/31/94 9,497 9,860 9,896 9,932 9,936 1/31/95 9,633 10,000 10,038 9,997 10,083 2/28/95 9,841 10,210 10,254 10,207 10,352 3/31/95 9,915 10,269 10,331 10,269 10,403 4/30/95 9,950 10,304 10,368 10,338 10,444 5/31/95 10,142 10,491 10,568 10,572 10,744 6/30/95 10,149 10,491 10,575 10,582 10,723 7/31/95 10,223 10,561 10,652 10,668 10,806 8/31/95 10,288 10,619 10,720 10,765 10,919 9/30/95 10,304 10,619 10,737 10,763 10,929 10/31/95 10,390 10,701 10,827 10,814 11,020 11/30/95 10,476 10,783 10,916 10,964 11,204 12/31/95 10,545 10,841 10,988 10,990 11,266 1/31/96 10,637 10,935 11,084 11,118 11,403 2/29/96 10,627 10,911 11,073 11,098 11,295 3/31/96 10,512 10,783 10,953 11,005 11,286 4/30/96 10,518 10,783 10,960 11,003 11,288 5/31/96 10,515 10,771 10,956 10,995 11,289 6/30/96 10,553 10,806 10,997 11,041 11,354 7/31/96 10,655 10,900 11,102 11,135 11,462 8/31/96 10,655 10,888 11,102 11,151 11,471 9/30/96 10,722 10,946 11,172 11,248 11,575 10/31/96 10,804 11,016 11,257 11,351 11,685 11/30/96 10,938 11,145 11,398 11,483 11,833 12/31/96 10,925 11,121 11,384 11,469 11,817 1/31/97 10,943 11,133 11,402 11,494 11,854 2/28/97 11,020 11,203 11,483 11,576 11,937 3/31/97 10,910 11,086 11,368 11,459 11,812 4/30/97 10,944 11,110 11,403 11,482 11,860 5/31/97 11,069 11,227 11,534 11,618 12,028 6/30/97 11,163 11,308 11,631 11,753 12,151 7/31/97 11,389 11,530 11,867 11,954 12,422 8/31/97 11,297 11,425 11,772 11,878 12,321 9/30/97 11,416 11,542 11,896 12,001 12,460 10/31/97 11,468 11,589 11,952 12,046 12,511 11/30/97 11,504 11,612 11,990 12,093 12,562 12/31/97 11,640 11,741 12,145 12,213 12,726 1/31/98 11,722 11,811 12,220 12,307 12,832 2/28/98 11,725 11,811 12,236 12,325 12,854 3/31/98 11,736 11,811 12,237 12,343 12,871 4/30/98 11,673 11,741 12,172 12,292 12,811 5/31/98 11,858 11,916 12,365 12,451 12,998 6/30/98 11,876 11,928 12,397 12,483 13,034 7/31/98 11,897 11,939 12,420 12,528 13,075 8/31/98 12,083 12,114 12,604 12,708 13,276 9/30/98 12,204 12,231 12,731 12,827 13,419 10/31/98 12,199 12,208 12,727 12,853 13,436 11/30/98 12,225 12,231 12,755 12,868 13,456 12/31/98 12,273 12,266 12,806 12,939 13,524 1/31/99 12,424 12,407 12,964 13,092 13,711 2/28/99 12,330 12,301 12,868 13,047 13,629 3/31/99 12,307 12,275 12,856 13,056 13,618 4/30/99 12,347 12,295 12,887 13,100 13,657 5/31/99 12,254 12,197 12,803 13,048 13,581 6/30/99 12,079 12,027 12,622 12,900 13,387 7/31/99 12,142 12,072 12,688 13,008 13,502 8/31/99 12,115 12,035 12,660 13,011 13,487 9/30/99 12,108 12,020 12,655 13,023 13,506 10/31/99 12,053 11,946 12,586 12,979 13,433 11/30/99 12,146 12,041 12,697 13,059 13,555 12/31/99 12,109 11,991 12,647 13,024 13,523 1/31/00 12,040 11,920 12,588 13,001 13,476 2/29/00 12,169 12,025 12,711 13,054 13,573 3/31/00 12,326 12,172 12,877 13,179 13,748 4/30/00 12,266 12,117 12,815 13,140 13,697 5/31/00 12,211 12,044 12,760 13,137 13,659 6/30/00 12,474 12,308 13,050 13,401 13,977 7/31/00 12,626 12,451 13,197 13,557 14,164 8/31/00 12,771 12,573 13,350 13,700 14,344 9/30/00 12,709 12,505 13,288 13,676 14,292 10/31/00 12,815 12,601 13,399 13,774 14,422 11/30/00 12,870 12,660 13,459 13,831 14,491 12/31/00 13,122 12,901 13,737 14,098 14,826 1/31/01 13,252 13,020 13,875 14,346 15,047 2/28/01 13,292 13,051 13,918 14,359 15,065 3/31/01 13,385 13,123 14,018 14,495 15,204 4/30/01 13,264 13,009 13,892 14,401 15,305 5/31/01 13,369 13,094 14,005 14,565 15,210 6/30/01 13,437 13,153 14,064 14,649 15,318 7/31/01 13,568 13,274 14,216 14,805 15,512 Average Annual Total Return As of Inception 1 5 Since July 31, 2001 Date Year Year Inception --------------------------------------------------------------------------- Class A Shares* 9/30/94 3.19% 4.10% 4.57% --------------------------------------------------------------------------- Class B Shares** 3/16/99/1/ 1.61% 3.68% 4.23% --------------------------------------------------------------------------- Trust Shares 9/2/97/1/ 7.72% 5.07% 5.28% --------------------------------------------------------------------------- *Reflects maximum 4.00% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 9/30/94 to 7/31/01 in the indicated share class versus a similar invest- ment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Florida Tax-Exempt Fund is measured against the Merrill Lynch 3-7-Year Municipal Bond Index and the Merrill Lynch 1-12- Year Municipal Bond Index, which are unmanaged indices generally representa- tive of municipal bonds with intermediate maturities. The indices do not re- flect the deduction of fees associated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. /1/Performance for the Class B and Trust Shares, which commenced operations on 3/16/99 and 9/2/97, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Effective 12/1/99, the Classic and Premier Shares were renamed Class A and Trust Shares, respectively. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 43 AmSouth Tennessee Tax-Exempt Fund+ Portfolio Manager Sharon Brown Senior Vice President AmSouth Funds AmSouth Investment Management Company, LLC Sharon Brown manages three of the AmSouth Funds: the Tennessee Tax- Exempt Fund, the Limited Term Tennessee Tax-Exempt Fund and the Tax-Exempt Money Market Fund. She has 22 years of investment management experience and holds a bachelor's degree in business administration from the University of Tennessee. PORTFOLIO MANAGER'S PERSPECTIVE "The AmSouth Tennessee Tax-Exempt Fund holds a portfolio of high-quality Tennessee municipal bonds. The Fund buys only bonds rated "A" and above, while attempting to provide a steady flow of tax-free income. We hold bonds of intermediate duration in our search for higher yields. We generally extend durations slightly as interest rates drop. Average duration is 7 to 12 years." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund produced a total return of 7.55% (Class A Shares at NAV). In comparison, the Fund's benchmark, the Lehman Brothers Municipal 10-Year Bond Index, produced a total return of 9.48%. It is also important to recognize income yield to shareholders. As of July 31, 2001, the Fund's 30-day SEC yield at (Class A Shares) was 3.27%. For investors in the 39.1% federal income tax bracket, that is equivalent to a taxable yield of 5.37% (shareholders who are residents of Tennessee could realize a higher taxable-equivalent yield. The yield percentage is annualized). We achieved our objectives while maintaining an average credit quality of AA (as rated by Standard & Poor's). As of July 31, 2001, the Fund's average matu- rity was 6.6 years.++ Q. What factors affected your performance? A. The past 12 months were profitable for just about every type of bond and bond fund, and our portfolio was no exception. With economic conditions unusu- ally conducive to fixed-income securities, and the stock market moving lower, many investors found profitable refuge in funds such as ours. Our emphasis on securities producing income tax free to Tennessee residents further benefited shareholders who live in that state. The municipal market "piggybacked" on the success of the taxable bond market, with bonds helped by the Fed's persistent rate-cutting policy. Because our Fund operates mostly in the short and intermediate portions of the yield curve, and Fed policy directly influences shorter securities, the value of our holdings was enhanced. A lack of supply within the state of Tennessee also worked to lower rates and boost bond prices. Q. What are a few of your favorite bonds in the Fund? A. Among our favorite bonds are City of Memphis bonds yielding 5.25%, due in 2014 (2.11% of net assets). This is a good, solid, noncallable bond that tends to perform well in most types of markets. We also like a Rutherford County is- sue yielding 6.25%, due in 2004 (2.61%). With its high coupon and short maturi- ty, it offers some protection should the market move against us.++ Q. What is your outlook for the next six to 12 months? A. We would not say we are necessarily at the end of the rate-cutting road, but we may be close to the bottom in yields; the Fed may not have much more room to lower rates. On the positive side, we do not see an imminent resurgence of in- flationary pressures. We believe the most likely scenario over the short- and mid-term, is that the municipal market could experience a narrow trading range, with most performance coming from our tax-free yields. + The Fund's income may be subject to certain state and local taxes and, de- pending on one's tax status, the federal alternative minimum tax. ++The Fund's portfolio composition is subject to change. 44 AmSouth Tennessee Tax-Exempt Fund+ Value of a $10,000 Investment [CHART] AmSouth AmSouth AmSouth Merrill Lehman TN Tax TN Tax TN Tax Lynch Brothers Exempt Exempt Exempt 1-12-Year Municipal Fund Class Fund Class Fund Trust Municipal 10-Year A Shares B Shares Shares Bond Index Index 7/31/91 9,603 10,000 10,000 10,000 10,000 8/31/91 9,757 10,152 10,161 10,181 10,135 9/30/91 9,812 10,203 10,218 10,266 10,291 10/31/91 9,989 10,381 10,402 10,350 10,374 11/30/91 9,945 10,318 10,356 10,363 10,391 12/31/91 10,110 10,483 10,529 10,521 10,612 1/31/92 10,143 10,508 10,563 10,576 10,635 2/29/92 10,077 10,432 10,494 10,514 10,619 3/31/92 10,055 10,407 10,471 10,517 10,603 4/30/92 10,099 10,445 10,517 10,618 10,703 5/31/92 10,265 10,597 10,690 10,655 10,829 6/30/92 10,430 10,762 10,862 10,883 11,016 7/31/92 10,706 11,042 11,149 11,154 11,377 8/31/92 10,530 10,851 10,966 11,030 11,243 9/30/92 10,530 10,839 10,966 11,103 11,336 10/31/92 10,408 10,699 10,839 10,976 11,221 11/30/92 10,651 10,940 11,092 11,242 11,426 12/31/92 10,662 10,953 11,103 11,321 11,559 1/31/93 10,795 11,080 11,241 11,449 11,754 2/28/93 11,115 11,398 11,575 11,739 12,184 3/31/93 11,015 11,283 11,471 11,682 12,006 4/30/93 11,148 11,410 11,609 11,786 12,120 5/31/93 11,203 11,461 11,667 11,818 12,163 6/30/93 11,325 11,576 11,793 11,958 12,402 7/31/93 11,313 11,550 11,782 11,956 12,433 8/31/93 11,534 11,766 12,011 12,133 12,691 9/30/93 11,689 11,919 12,172 12,228 12,847 10/31/93 11,678 11,893 12,161 12,323 12,867 11/30/93 11,545 11,741 12,023 12,214 12,762 12/31/93 11,755 11,944 12,241 12,407 13,034 1/31/94 11,843 12,033 12,333 12,530 13,194 2/28/94 11,545 11,715 12,023 12,252 12,833 3/31/94 10,800 10,953 11,247 11,926 12,342 4/30/94 10,851 10,991 11,300 11,977 12,478 5/31/94 10,926 11,055 11,378 12,031 12,578 6/30/94 10,856 10,978 11,305 12,021 12,524 7/31/94 11,033 11,156 11,489 12,278 12,734 8/31/94 11,073 11,182 11,532 12,309 12,784 9/30/94 10,923 11,017 11,375 12,169 12,611 10/31/94 10,740 10,813 11,184 12,087 12,427 11/30/94 10,544 10,610 10,980 11,936 12,192 12/31/94 10,747 10,813 11,192 12,092 12,412 1/31/95 11,021 11,080 11,477 12,270 12,733 2/28/95 11,291 11,334 11,758 12,598 13,094 3/31/95 11,382 11,423 11,853 12,659 13,270 4/30/95 11,379 11,398 11,850 12,709 13,286 5/31/95 11,646 11,652 12,127 13,074 13,708 6/30/95 11,526 11,525 12,003 13,049 13,623 7/31/95 11,583 11,576 12,062 13,149 13,823 8/31/95 11,720 11,703 12,205 13,288 14,011 9/30/95 11,773 11,741 12,260 13,300 14,100 10/31/95 11,912 11,868 12,404 13,411 14,263 11/30/95 12,084 12,033 12,584 13,634 14,454 12/31/95 12,187 12,122 12,691 13,710 14,542 1/31/96 12,267 12,198 12,775 13,877 14,689 2/29/96 12,140 12,058 12,642 13,745 14,629 3/31/96 11,944 11,855 12,438 13,735 14,447 4/30/96 11,877 11,779 12,369 13,736 14,397 5/31/96 11,847 11,741 12,337 13,738 14,356 6/30/96 11,938 11,804 12,431 13,817 14,493 7/31/96 12,016 11,881 12,513 13,948 14,632 8/31/96 11,973 11,830 12,469 13,960 14,632 9/30/96 12,090 11,931 12,590 14,086 14,782 10/31/96 12,221 12,046 12,726 14,220 14,969 11/30/96 12,437 12,249 12,951 14,399 15,271 12/31/96 12,356 12,160 12,867 14,381 15,202 1/31/97 12,362 12,160 12,874 14,426 15,262 2/28/97 12,439 12,211 12,953 14,526 15,405 3/31/97 12,245 12,008 12,751 14,374 15,199 4/30/97 12,300 12,046 12,809 14,432 15,311 5/31/97 12,457 12,198 12,973 14,638 15,529 6/30/97 12,550 12,274 13,070 14,787 15,699 7/31/97 12,887 12,592 13,420 15,116 16,141 8/31/97 12,738 12,440 13,265 14,994 15,984 9/30/97 12,896 12,579 13,429 15,163 16,187 10/31/97 12,965 12,643 13,501 15,225 16,273 11/30/97 13,008 12,668 13,549 15,287 16,348 12/31/97 13,237 12,884 13,789 15,487 16,606 1/31/98 13,368 12,999 13,928 15,616 16,790 2/28/98 13,326 13,010 13,873 15,642 16,789 3/31/98 13,288 12,976 13,850 15,662 16,777 4/30/98 13,157 12,839 13,716 15,590 16,685 5/31/98 13,393 13,061 13,966 15,817 16,968 6/30/98 13,392 13,052 13,967 15,861 17,031 7/31/98 13,404 13,055 13,983 15,911 17,058 8/31/98 13,628 13,265 14,220 16,156 17,355 9/30/98 13,785 13,409 14,387 16,330 17,614 10/31/98 13,782 13,397 14,386 16,351 17,621 11/30/98 13,791 13,398 14,399 16,375 17,674 12/31/98 13,800 13,398 14,411 16,457 17,728 1/31/99 13,973 13,558 14,581 16,685 18,000 2/28/99 13,843 13,426 14,462 16,586 17,838 3/31/99 13,825 13,403 14,447 16,572 17,829 4/30/99 13,862 13,431 14,488 16,619 17,877 5/31/99 13,735 13,315 14,359 16,527 17,752 6/30/99 13,498 13,066 14,113 16,291 17,421 7/31/99 13,550 13,109 14,170 16,431 17,538 8/31/99 13,477 13,032 14,097 16,412 17,473 9/30/99 13,491 13,040 14,101 16,435 17,533 10/31/99 13,365 12,912 13,972 16,347 17,410 11/30/99 13,474 13,010 14,103 16,495 17,600 12/31/99 13,376 12,909 14,004 16,456 17,508 1/31/00 13,307 12,835 13,934 16,399 17,436 2/29/00 13,416 12,935 14,051 16,518 17,574 3/31/00 13,601 13,107 14,246 16,730 17,915 4/30/00 13,516 13,004 14,144 16,668 17,826 5/31/00 13,448 12,944 14,090 16,622 17,720 6/30/00 13,764 13,239 14,423 17,009 18,202 7/31/00 13,932 13,392 14,600 17,237 18,454 8/31/00 14,097 13,527 14,759 17,455 18,740 9/30/00 14,010 13,449 14,684 17,392 18,653 10/31/00 14,142 13,567 14,825 17,550 18,844 11/30/00 14,218 13,629 14,905 17,634 18,945 12/31/00 14,534 13,925 15,239 18,042 19,391 1/31/01 14,664 14,027 15,363 18,310 19,641 2/28/01 14,691 14,059 15,408 18,333 19,674 3/31/01 14,793 14,149 15,517 18,503 19,841 4/30/01 14,604 13,959 15,321 18,296 19,597 5/31/01 14,736 14,076 15,461 18,509 19,811 6/30/01 14,809 14,137 15,540 18,641 19,930 7/31/01 14,984 14,296 15,725 18,877 20,203 Average Annual Total Return As of Inception 1 5 Since July 31, 2001 Date Year Year Inception ----------------------------------------------------------------- Class A Shares* 3/28/94/1/ 3.21% 3.66% 4.13% ----------------------------------------------------------------- Class B Shares** 2/24/98/2/ 1.75% 3.42% 3.64% ----------------------------------------------------------------- Trust Shares 10/03/97/2/ 7.70% 4.68% 4.63% ----------------------------------------------------------------- *Reflects maximum 4.00% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The Class B contingent deferred sales charge (CDSC) is not included in the above graph, since the performance is for more than six years and the CDSC would no longer apply. The chart above represents a comparison of a hypothetical $10,000 investment from 7/31/91 to 7/31/01 in the indicated share class versus a similar invest- ment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Tennessee Tax-Exempt Fund is measured against the Merrill Lynch 1-12-Year Municipal Bond Index, which is unmanaged and is generally representative of municipal bonds with intermediate maturities. The Lehman Brothers Municipal 10-Year Index is an unmanaged index that includes municipal bonds issued within the last five years by municipalities through- out the United States, with maturities of at least one year, but no more than 12 years, and a credit quality of at least Baa. The indices do not reflect the deduction of fees associated with a mutual fund, such as investment man- agement fees. The Fund's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, al- though they can invest in its underlying securities. During the period shown, the Advisor waived and/or reimbursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. The quoted returns reflect the performance from 3/28/94 to 3/12/00 of the ISG Tennessee Tax-Exempt Fund, an open-end investment company that was the prede- cessor fund to the AmSouth Tennessee Tax-Exempt Fund. /1/The ISG Tennessee Tax-Exempt Fund commenced operations on 3/28/94, through a transfer of assets from certain collective trust fund ("commingled") ac- counts managed by First American National Bank, using substantially the same investment objective, policies and methodologies as the Fund. The quoted performance of the Fund includes performance of the commingled ac- counts for periods dating back to 7/31/91, and prior to the mutual fund's commencement of operations, as adjusted to reflect the expenses associated with the Fund. The commingled accounts were not registered with the Securi- ties and Exchange Commission and, therefore, were not subject to the in- vestment restrictions imposed by law on registered mutual funds. If the commingled accounts had been registered, the commingled accounts' perfor- mance may have been adversely affected. /2/Performance for the Class B and Trust Shares, which commenced operations on 2/24/98 and 10/3/97, respectively, are based on the historical perfor- mance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 45 AmSouth Limited Term Tennessee Tax-Exempt Fund+ Portfolio Manager Sharon Brown Senior Vice President AmSouth Bank AmSouth Investment Management Company, LLC Sharon Brown manages three of the AmSouth Funds: the Tennessee Tax- Exempt Fund, the Limited Term Tennessee Tax-Exempt Fund and the Tax-Exempt Money Market Fund. She has 22 years of investment management experience and holds a bachelor's degree in business administration from the University of Tennessee. PORTFOLIO MANAGER'S PERSPECTIVE "The AmSouth Limited Term Tennessee Tax-Exempt Fund holds a portfolio of high quality, short term Tennessee municipal bonds. The Fund buys only bonds rated 'A' and above, while attempting to provide a reliable flow of tax free income. By investing in high quality bonds and keeping bond durations short, we strive to limit fluctuations in the Fund's market value." [LOGO] Q&A Q. How did the Fund perform during the period? A. For the 12 months ended July 31, 2001, the Fund produced a total return of 6.28% (Class A Shares at NAV). In comparison, the Fund's benchmark, Merrill Lynch 3-7-Year Municipal Bond Index, produced a total return of 9.21%. It is also important to recognize income yield to shareholders. As of July 31, 2001, the Fund's 30-day SEC yield (Class A Shares) was 2.38%. For investors in the 39.1% federal income tax bracket, that is equivalent to a taxable yield of 3.91% (shareholders who are residents of Tennessee could realize a higher tax- able-equivalent yield. The yield percentage is annualized). We achieved our objectives while maintaining an average credit quality of AA (as rated by Standard & Poor's). As of July 31, 2001, the Fund's average matu- rity was 4.1 years.++ Q. What factors affected your performance? A. The past 12 months were profitable for just about every type of bond and bond fund, and our portfolio was no exception. With economic conditions unusu- ally conducive to fixed-income securities, and the stock market moving lower, many investors found profitable refuge in funds such as ours. Our emphasis on securities producing income tax-free to Tennessee residents further benefited shareholders who live in that state. The municipal market "piggybacked" on the success of the taxable bond market, with bonds helped by the Fed's persistent rate-cutting policy. Because our Fund operates mostly on the short end of the yield curve, and Fed policy directly influences shorter securities, the value of our holdings was enhanced. A lack of supply within the state of Tennessee also worked to lower rates and boost bond prices. Q. What are a few of your favorite bonds in the Fund? A. We especially like Rutherford County bonds yielding 6.00%, due in 2004 (8.03% of net assets). It offers a good coupon rate for such a short maturity. On the longer end of the yield curve are bonds issued by Shelby County yielding 5.50%, due in 2009 (4.12%). These securities are noncallable and give us par- ticipation in the intermediate segment of the yield curve.++ Q. What is your outlook for the next six to 12 months? A. We would not say we are necessarily at the end of the rate-cutting road, but we may be close to the bottom in yields; the Fed may not have much more room to lower rates. On the positive side, we do not see an imminent resurgence of in- flationary pressures. We believe the most likely scenario over the short- and mid-term, is that the municipal market could experience a narrow trading range, with most performance coming from our tax-free yields. + The Fund's income may be subject to certain state and local taxes and, de- pending on one's tax status, the federal alternative minimum tax. ++The Fund's portfolio composition is subject to change. 46 AmSouth Limited Term Tennessee Tax-Exempt Fund [CHART] Value of a $10,000 Investment AmSouth Limited AmSouth Limited Term Term Tennessee Tennessee Merrill Lynch Tax-Exempt Fund Tax-Exempt Fund 3-7 Year (Class A Shares)* (Class B Shares) Municipal Bond Index 7/31/91 9,595 10,000 10,000 8/31/91 9,755 10,161 10,166 9/30/91 9,828 10,235 10,265 10/31/91 9,914 10,309 10,335 11/30/91 9,914 10,297 10,365 12/31/91 10,110 10,495 10,530 1/31/92 10,147 10,532 10,620 2/29/92 10,110 10,483 10,578 3/31/92 10,123 10,483 10,568 4/30/92 10,135 10,483 10,662 5/31/92 10,221 10,569 10,699 6/30/92 10,356 10,693 10,900 7/31/92 10,503 10,842 11,095 8/31/92 10,491 10,817 11,031 9/30/92 10,442 10,755 11,107 10/31/92 10,466 10,780 11,012 11/30/92 10,577 10,879 11,303 12/31/92 10,577 10,866 11,355 1/31/93 10,687 10,978 11,445 2/28/93 10,896 11,188 11,682 3/31/93 10,834 11,114 11,664 4/30/93 10,908 11,176 11,728 5/31/93 10,933 11,188 11,814 6/30/93 11,018 11,275 11,907 7/31/93 11,018 11,262 11,884 8/31/93 11,117 11,349 12,004 9/30/93 11,190 11,423 12,120 10/31/93 11,178 11,399 12,187 11/30/93 11,129 11,337 12,089 12/31/93 11,252 11,448 12,262 1/31/94 11,350 11,547 12,384 2/28/94 11,190 11,374 12,176 3/31/94 10,920 11,089 11,836 4/30/94 10,969 11,126 11,913 5/31/94 10,994 11,139 11,995 6/30/94 10,969 11,114 12,000 7/31/94 11,043 11,176 12,220 8/31/94 11,104 11,225 12,231 9/30/94 11,043 11,151 12,132 10/31/94 10,994 11,101 12,056 11/30/94 10,883 10,978 11,939 12/31/94 10,957 11,040 12,049 1/31/95 11,043 11,114 12,128 2/28/95 11,178 11,250 12,383 3/31/95 11,252 11,312 12,459 4/30/95 11,301 11,349 12,542 5/31/95 11,497 11,535 12,826 6/30/95 11,472 11,498 12,839 7/31/95 11,583 11,609 12,943 8/31/95 11,656 11,671 13,060 9/30/95 11,681 11,683 13,058 10/31/95 11,718 11,708 13,120 11/30/95 11,816 11,795 13,302 12/31/95 11,877 11,844 13,333 1/31/96 11,951 11,918 13,489 2/29/96 11,926 11,881 13,464 3/31/96 11,816 11,757 13,351 4/30/96 11,791 11,720 13,349 5/31/96 11,779 11,708 13,340 6/30/96 11,840 11,757 13,395 7/31/96 11,902 11,807 13,509 8/31/96 11,877 11,770 13,529 9/30/96 11,951 11,832 13,647 10/31/96 12,049 11,918 13,772 11/30/96 12,184 12,042 13,932 12/31/96 12,135 11,980 13,915 1/31/97 12,184 12,030 13,945 2/28/97 12,270 12,104 14,044 3/31/97 12,143 11,968 13,903 4/30/97 12,176 11,993 13,931 5/31/97 12,284 12,079 14,096 6/30/97 12,343 12,129 14,260 7/31/97 12,539 12,314 14,502 8/31/97 12,463 12,228 14,411 9/30/97 12,561 12,314 14,560 10/31/97 12,623 12,364 14,614 11/30/97 12,663 12,389 14,671 12/31/97 12,793 12,512 14,817 1/31/98 12,905 12,611 14,931 2/28/98 12,886 12,584 14,953 3/31/98 12,871 12,561 14,975 4/30/98 12,815 12,483 14,914 5/31/98 12,951 12,618 15,105 6/30/98 12,972 12,628 15,145 7/31/98 12,994 12,638 15,199 8/31/98 13,117 12,747 15,417 9/30/98 13,205 12,822 15,562 10/31/98 13,225 12,831 15,594 11/30/98 13,245 12,839 15,612 12/31/98 13,274 12,844 15,698 1/31/99 13,374 12,944 15,883 2/28/99 13,338 12,901 15,828 3/31/99 13,332 12,886 15,840 4/30/99 13,364 12,908 15,894 5/31/99 13,305 12,842 15,830 6/30/99 13,153 12,686 15,651 7/31/99 13,201 12,723 15,781 8/31/99 13,169 12,683 15,785 9/30/99 13,205 12,696 15,800 10/31/99 13,119 12,617 15,746 11/30/99 13,180 12,666 15,844 12/31/99 13,141 12,607 15,801 1/31/00 13,095 12,567 15,774 2/29/00 13,183 12,643 15,838 3/31/00 13,262 12,713 15,989 4/30/00 13,213 12,658 15,942 5/31/00 13,183 12,622 15,938 6/30/00 13,415 12,833 16,258 7/31/00 13,551 12,953 16,447 8/31/00 13,619 13,009 16,622 9/30/00 13,597 12,980 16,592 10/31/00 13,689 13,060 16,711 11/30/00 13,727 13,098 16,780 12/31/00 13,956 13,296 17,105 1/31/01 14,132 13,460 17,405 2/28/01 14,166 13,484 17,421 3/31/01 14,231 13,551 17,586 4/30/01 14,141 13,443 17,472 5/31/01 14,247 13,536 17,670 6/30/01 14,293 13,571 17,772 7/31/01 14,403 13,667 17,962 The Class B contingent deferred sales charge (CDSC) is not included in the above graph, since the performance is for more than six years and the CDSC would no longer apply. -------------------------------------------------------------------------- Average Annual Total Return -------------------------------------------------------------------------- As of Inception 1 5 10 July 31, 2001 Date Year Year Year -------------------------------------------------------------------------- Class A Shares* 2/28/97/1/ 2.02% 3.05% 3.72% -------------------------------------------------------------------------- Class B Shares** 2/3/98/2/ 0.51% 2.61% 3.17% -------------------------------------------------------------------------- *Reflects 4.00% sales charge. **Reflects applicable contingent deferred sales charge (maximum 5.00%). The chart above represents a comparison of a hypothetical $10,000 investment from 7/31/91 to 7/31/01 in the indicated share class versus a similar invest- ment in the Fund's benchmark, and represents the reinvestment of dividends and capital gains in the Fund. The performance of the AmSouth Limited Term Tennessee Tax-Exempt Fund is mea- sured against the Merrill Lynch 3-7-Year Municipal Bond Index, an unmanaged index that is generally representative of municipal bonds with intermediate maturities. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management fees. The Fund's performance does reflect the deduction of fees for these value-added services. Investors cannot invest directly in an index, although they can invest in its under- lying securities. During the period shown, the Advisor waived and/or reim- bursed fees for various expenses. Had these waivers and/or reimbursements not been in effect, performance quoted would have been lower. The quoted returns reflect the performance from 2/28/97 to 3/12/00 of the ISG Limited Term Tennessee Tax-Exempt Fund, an open-end investment company that was the predecessor fund to the AmSouth Limited Term Tennessee Tax-Exempt Fund. /1/The ISG Limited Term Tennessee Tax-Exempt Fund commenced operations on 2/28/97, through a transfer of assets from certain collective trust fund ("commingled") accounts managed by First American National Bank, using sub- stantially the same investment objective, policies and methodologies as the Fund. The quoted performance of the Fund includes performance of the com- mingled accounts for periods dating back to 7/31/91, and prior to the mu- tual Fund's commencement of operations, as adjusted to reflect the expenses associated with the Fund. The commingled accounts were not registered with the Securities and Exchange Commission and, therefore, were not subject to the investment restrictions imposed by law on registered mutual funds. If the commingled accounts had been registered, the commingled accounts' per- formance may have been adversely affected. /2/Performance for the Class B Shares, which commenced operations on 2/3/98, respectively, are based on the historical performance of the Class A Shares (without sales charge) prior to that date. The historical performance for the Class B Shares has been adjusted to reflect the higher 12b-1 fees and the contingent deferred sales charge (CDSC). Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 47 The AmSouth Money Market Funds Portfolio Manager John Mark McKenzie, Senior Vice President Sharon Brown, Senior Vice President AmSouth Bank AmSouth Investment Management Company, LLC. John Mark has more than 14 years of law degree from the University of investment management experience. Mississippi School of Law. Sharon In addition to managing the AmSouth Brown manages three of the AmSouth Limited Term U.S. Government Fund, Funds: the Tennessee Tax-Exempt he co-manages the AmSouth Fund, the Limited Term Tennessee Government Income Fund and manages Tax-Exempt Fund and the Tax-Exempt four of the AmSouth Money Market Money Market Fund. She has Funds: U.S. Treasury, Treasury 22 years of investment management Reserve, Prime and Institutional experience and holds a bachelor's Prime Obligations. He holds degree in business administration bachelors' degrees in banking and from the University of Tennessee. finance, and he earned a [LOGO] Q&A Q. What factors affected the performance of the money market funds? A. Since the first of the year, the Fed has lowered short-term interest rates six times through July 31, 2001, dropping the Fed Funds rate 275 basis points (2.75%). While lower rates are productive for most types of fixed-interest se- curities, they have the effect of lowering yields on the short-term paper we buy for our money-market funds. With yields dropping, corporate treasurers were reluctant to issue new debt; they concluded that they could wait 60 days and get a better (lower) rate. We have also seen the credit ratings of a significant number of companies down- graded or put on watch. We believe this has driven investors to hunt for quality, and has made it more difficult to find creditworthy commercial debt available at rates that were attractive to us. Rather than stretch for yield or take undo credit risks, we have simply pur- chased overnight repurchase agreements. Although repo rates continued to fall, we have maintained a competitive position by holding an above- average weight- ing in this type of debt, where it has been available. When the economy recovers, we would expect yields to begin to rise modestly. . As of July 31, 2001, the Prime Fund's weighted average maturity was 38 days, compared to 35 days on January 31, 2001, and 39 days on July 31, 2000.++ . As of July 31, 2001, the U.S. Treasury Fund's weighted average maturity was 51 days, compared to 53 days on January 31, 2001, and 56 days on July 31, 2000.++ . As of July 31, 2001, the Tax-Exempt Fund's+ weighted average maturity was 19 days, compared to 78 days on January 31, 2001, and 87 days on July 31, 2000.++ . As of July 31, 2001, the Treasury Reserve Fund's weighted average maturity was 43 days, compared to 47 days on January 31, 2001, and 54 days on July 31, 2000.++ . As of July 31, 2001, the Institutional Prime Obligations Money Market Fund's weighted average maturity was 36 days, compared to 34 days on January 31, 2001, and 31 days on July 31, 2000.++ + The Fund's income may be subject to certain state and local taxes and, de- pending on one's tax status, the federal alternative minimum tax. ++The composition of the Fund's holdings is subject to change. Investments in the Prime, the U.S. Treasury, the Tax-Exempt, Treasury Reserve and the Institutional Prime Obligations Money Market Funds are neither in- sured or guaranteed by the FDIC or any other government agency. Although the Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Funds. Past performance is no guarantee of future results. Investment return and net asset value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original cost. 48 AMSOUTH FUNDS Schedule of Portfolio Investments Value Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks (99.2%)
Shares Value --------- -------- Aerospace/Defense (0.5%) General Dynamics Corp. ..................................... 9,600 $ 777 Raytheon Company............................................ 100,000 2,888 Rockwell Collins............................................ 3,100 64 -------- 3,729 -------- Automotive (0.1%) Ford Motor Co. ............................................. 29,817 759 -------- Automotive Parts (0.8%) Genuine Parts Co. .......................................... 160,000 5,267 -------- Banking (3.5%) Bank of America Corp. ...................................... 277,184 17,634 First Union Corp. .......................................... 155,000 5,487 PNC Financial Service Group................................. 11,000 730 U.S. Bancorp................................................ 12,000 285 -------- 24,136 -------- Business Services (3.7%) Modis Professional Services, Inc. (b)....................... 2,343,500 14,928 Reynolds & Reynolds Co., Class A............................ 459,000 10,511 -------- 25,439 -------- Chemicals -- Speciality (3.0%) Dow Chemical Co. ........................................... 57,800 2,104 Engelhard Corp. ............................................ 706,300 18,399 -------- 20,503 -------- Computer Hardware (3.6%) Compaq Computer Corp. ...................................... 438,100 6,545 Gateway, Inc. (b)........................................... 100,000 1,049 Hewlett-Packard Co. ........................................ 6,400 158 IBM Corp. .................................................. 160,000 16,834 -------- 24,586 -------- Computer Software (1.3%) Keane, Inc. (b)............................................. 483,400 8,943 -------- Computer Software & Services (6.3%) Cabletron Systems, Inc. (b)................................. 1,220,000 22,655 Computer Associates International, Inc. .................... 600,000 20,688 -------- 43,343 -------- Data Processing/Management (0.4%) Certegy Inc. (b)............................................ 92,500 3,054 -------- Electrical & Electronic (2.6%) Avnet, Inc. ................................................ 750,000 17,917 Rockwell International Corp. ............................... 3,100 50 -------- 17,967 -------- Financial Services (5.1%) Citigroup, Inc. ............................................ 97,732 4,907 Equifax, Inc. .............................................. 185,000 4,377 Freddie Mac................................................. 10,000 684 J.P. Morgan Chase & Co. .................................... 13,500 585 Lehman Brothers Holdings, Inc. ............................. 18,800 1,354 Morgan Stanley Dean Witter & Co. ........................... 11,600 694 Washington Mutual, Inc. .................................... 550,000 22,286 -------- 34,887 --------
Common Stocks, continued
Shares Value --------- -------- Food Products, Processing & Packaging (2.7%) Kellogg Co.................................................. 50,000 $ 1,504 Sara Lee Corp............................................... 591,000 11,920 Sensient Technologies Corp.................................. 250,000 5,125 -------- 18,549 -------- Forest & Paper Products (4.3%) Georgia Pacific Corp........................................ 105,100 3,847 International Paper Co...................................... 200,000 8,172 Weyerhaeuser Co............................................. 175,000 10,452 Willamette Industries, Inc.................................. 145,000 7,207 -------- 29,678 -------- Health Care (3.3%) HCA-The Healthcare Co....................................... 22,500 1,034 Health Management Assoc., Inc., Class A (b)................. 776,953 15,352 UnitedHealth Group, Inc..................................... 91,600 6,176 -------- 22,562 -------- Hotels & Lodging (0.9%) Hilton Hotels Corp. ........................................ 500,000 6,055 -------- Insurance (9.0%) ACE Ltd. ................................................... 90,000 3,142 American General Corp. ..................................... 8,200 379 American International Group, Inc. ......................... 5,550 462 Chubb Corp. ................................................ 250,000 17,543 Marsh & McLennan Cos., Inc. ................................ 210,000 21,083 St. Paul Cos., Inc. ........................................ 435,000 19,075 -------- 61,684 -------- Medical Supplies (3.3%) C.R. Bard, Inc. ............................................ 320,000 18,928 Guidant Corp. (b)........................................... 110,000 3,507 -------- 22,435 -------- Metals & Mining (0.1%) Alcoa, Inc. ................................................ 9,800 384 -------- Newspapers (0.9%) Gannett Co., Inc. .......................................... 96,000 6,435 -------- Oil & Gas Exploration, Production, & Services (15.4%) BP Amoco, PLC, ADR.......................................... 6,396 316 Burlington Resources, Inc. ................................. 153,000 6,617 Chevron Corp. .............................................. 4,200 384 Exxon Mobil Corp. .......................................... 19,672 822 Kerr-McGee Corp. ........................................... 235,000 14,847 Noble Affiliates............................................ 300,000 10,881 Royal Dutch Petroleum Co. .................................. 15,300 887 Sunoco, Inc. ............................................... 420,000 14,524 Texaco, Inc. ............................................... 241,700 16,738 Ultramar Diamond Shamrock Corp. ............................ 335,000 15,829 USX-Marathon Group.......................................... 521,600 15,476 Valero Energy Corp. ........................................ 275,000 9,708 -------- 107,029 --------
Continued 49 AMSOUTH FUNDS Schedule of Portfolio Investments Value Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks, continued
Shares Value --------- -------- Pharmaceuticals (5.0%) Baxter International, Inc. ................................. 195,000 $ 9,711 Pharmacia Corp. ............................................ 294,450 13,138 Schering-Plough Corp. ...................................... 300,000 11,715 -------- 34,564 -------- Photography & Imaging (0.0%) Eastman Kodak Co. .......................................... 6,000 260 -------- Railroads (0.1%) Union Pacific Corp. ........................................ 7,800 419 -------- Restaurants (0.6%) McDonald's Corp. ........................................... 150,000 4,371 -------- Retail (4.1%) CVS Corp. .................................................. 300,000 10,804 Gap (The), Inc. ............................................ 100,000 2,731 Limited (The), Inc. ........................................ 6,800 115 May Department Stores Co. .................................. 154,500 5,129 Target Corp. ............................................... 243,000 9,404 -------- 28,183 -------- Telecommunications -- Equipment (4.1%) Harris Corp. ............................................... 345,000 10,357 Lucent Technologies, Inc. .................................. 2,025,000 13,568 Nortel Networks Corp., ADR.................................. 509,200 4,048 -------- 27,973 -------- Telecommunications -- Wireless (0.4%) AT&T Wireless Services Inc. (b)............................. 157,682 2,947 -------- Toys/Games/Hobbies (0.4%) Hasbro, Inc. ............................................... 150,000 2,415 -------- Transportation Leasing & Trucking (0.8%) Ryder System, Inc. ......................................... 300,000 5,700 -------- Travel (0.0%) Carnival Corp. ............................................. 3,200 107 -------- Utilities -- Electric & Gas (6.3%) Constellation Energy Group.................................. 250,000 7,360 Duke Energy Corp. .......................................... 6,264 242 Exelon Corp. ............................................... 6,400 362 Mirant Corp. (b)............................................ 344,284 10,649 Reliant Energy, Inc. ....................................... 508,000 16,001 Southern Co. ............................................... 170,000 3,995 Xcel Energy, Inc. .......................................... 188,500 5,078 -------- 43,687 -------- Utilities -- Telecommunications (6.6%) AT&T Corp. ................................................. 490,000 9,903 BellSouth Corp. ............................................ 225,000 9,158 SBC Communications, Inc. ................................... 195,000 8,781 Verizon Communications...................................... 330,000 17,869 -------- 45,711 -------- TOTAL COMMON STOCKS......................................... 683,761 --------
Investment Companies (1.3%)
Shares Value --------- -------- AmSouth Prime Money Market Fund............................. 8,857,484 $ 8,857 AmSouth U.S. Treasury Money Market Fund..................... 503 1 -------- TOTAL INVESTMENT COMPANIES.................................. 8,858 -------- TOTAL INVESTMENTS (Cost $485,643) (a) -- 100.5%.............................. 692,619 Liabilities in excess of other assets -- (0.5%)............. (3,649) -------- NET ASSETS -- 100.0%........................................ $688,970 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation............................................. $223,545 Unrealized depreciation............................................. (16,569) -------- Net unrealized appreciation......................................... $206,976 ========
(b) Represents non-income producing security. ADR -- American Depositary Receipt See notes to financial statements 50 AMSOUTH FUNDS Value Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $485,643)....................... $692,619 Interest and dividends receivable........................... 633 Receivable for capital shares issued........................ 142 Receivable for investments sold............................. 2,549 Collateral for securities loaned, at fair value............. 122,209 Prepaid expenses and other assets........................... 24 -------- Total Assets............................................... 818,176 Liabilities: Payable for investments purchased........................... $ 6,610 Payable for capital shares redeemed......................... 16 Payable upon return of securities loaned.................... 122,209 Accrued expenses and other payables: Investment advisory fees................................... 194 Administration fees........................................ 22 Shareholder servicing and distribution fees................ 77 Custodian fees............................................. 16 Other...................................................... 62 -------- Total Liabilities.......................................... 129,206 -------- Net Assets: Capital..................................................... 423,409 Accumulated net realized gains from investment transactions............................................... 58,585 Unrealized appreciation from investments.................... 206,976 -------- Net Assets.................................................. $688,970 ======== Class A Shares (b) Net Assets................................................. $113,164 Shares outstanding......................................... 5,553 Redemption price per share................................. $ 20.38 ======== Class A Shares -- Maximum Sales Charge...................... 5.50% -------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)..................................................... $ 21.57 ======== Class B Shares Net Assets................................................. $ 10,322 Shares outstanding......................................... 512 Offering price per share*.................................. $ 20.15 ======== Trust Shares (c) Net Assets................................................. $565,484 Shares outstanding......................................... 27,800 Offering and redemption price per share.................... $ 20.34 ========
* Redemption price per share varies by length of time shares are held. (a) Formerly AmSouth Equity Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income............................................... $ 6 Dividend income............................................... 12,125 Securities lending income..................................... 195 -------- Total Investment Income...................................... 12,326 Expenses: Investment advisory fees...................................... $5,069 Administration fees........................................... 1,267 Distribution fees -- Class B Shares........................... 63 Shareholder servicing fees -- Class A Shares (b).............. 138 Shareholder servicing fees -- Class B Shares.................. 21 Shareholder servicing fees -- Trust shares (c)................ 855 Custodian fees................................................ 174 Accounting fees............................................... 109 Transfer agent fees........................................... 183 Other fees.................................................... 186 ------ Total expenses before fee reductions......................... 8,065 Expenses reduced by Distributor.............................. (285) Expenses reduced by Fund Accountant.......................... (76) -------- Net expenses................................................. 7,704 -------- Net Investment Income......................................... 4,622 -------- Realized/Unrealized Gains from Investments: Net realized gains from investment transactions............... 95,732 Change in unrealized appreciation/depreciation from investments.................................................. 25,846 -------- Net realized/unrealized gains on investments.................. 121,578 -------- Change in net assets resulting from operations................ $126,200 ========
See notes to financial statements 51 AMSOUTH FUNDS Value Fund (a) Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income.................................. $ 4,622 $ 10,150 Net realized gains from investment transactions........ 95,732 60,783 Change in unrealized appreciation/depreciation from investments........................................... 25,846 (151,006) -------- ---------- Change in net assets resulting from operations.......... 126,200 (80,073) -------- ---------- Distributions to Class A Shareholders (b): From net investment income............................. (353) (628) From net realized gains on investment transactions..... (5,678) (9,331) Distributions to Class B Shareholders: From net investment income............................. (16) (51) From net realized gains on investment transactions..... (1,012) (1,626) Distributions to Trust Shareholders (c): From net investment income............................. (4,657) (9,589) From net realized gains on investment transactions..... (73,415) (123,978) -------- ---------- Change in net assets from shareholder distributions..... (85,131) (145,203) -------- ---------- Change in net assets from capital transactions.......... 33,893 (204,510) -------- ---------- Change in net assets.................................... 74,962 (429,786) Net Assets: Beginning of period.................................... 614,008 1,043,794 -------- ---------- End of period.......................................... $688,970 $ 614,008 ======== ==========
(a) Formerly AmSouth Equity Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. See notes to financial statements 52 AMSOUTH FUNDS Value Fund (a) Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (b) 1997 ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period.... $ 19.54 $ 25.25 $ 24.60 $ 23.35 $ 17.62 -------- ------- ------- ------- -------- Investment Activities Net investment income.. 0.11 0.23 0.20 0.21 0.30 Net realized and unrealized gains (losses) from investments........... 3.64 (2.21) 3.11 2.54 6.77 -------- ------- ------- ------- -------- Total from Investment Activities............ 3.75 (1.98) 3.31 2.75 7.07 -------- ------- ------- ------- -------- Distributions Net investment income.. (0.14) (0.23) (0.19) (0.25) (0.30) Net realized gains from investment transactions.......... (2.77) (3.50) (2.47) (1.25) (1.04) -------- ------- ------- ------- -------- Total Distributions.... (2.91) (3.73) (2.66) (1.50) (1.34) -------- ------- ------- ------- -------- Change in Net Asset Value.................. 0.84 (5.71) 0.65 1.25 5.73 -------- ------- ------- ------- -------- Net Asset Value, End of Period................. $ 20.38 $ 19.54 $ 25.25 $ 24.60 $ 23.35 ======== ======= ======= ======= ======== Total Return (excludes sales charge).......... 21.10% (8.19)% 14.92% 12.34% 42.35% Ratios/Supplemental Data: Net Assets at end of period (000)........... $113,164 $45,255 $70,740 $73,165 $974,985 Ratio of expenses to average net assets..... 1.34% 1.35% 1.33% 1.19% 1.06% Ratio of net investment income to average net assets................. 0.53% 1.07% 0.82% 0.89% 1.52% Ratio of expenses to average net assets*.... 1.35% 1.35% 1.34% 1.19% 1.10% Portfolio turnover**.... 43% 17% 18% 17% 24%
/\ Formerly Classic Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly AmSouth Equity Fund. (b) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. See notes to financial statements 53 AMSOUTH FUNDS Value Fund (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (b) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period......................... $ 19.41 $25.14 $ 24.55 $23.15 ------- ------ ------- ------ Investment Activities Net investment income (loss)... (0.03) 0.07 0.02 0.09 Net realized and unrealized gains (losses) from investments................... 3.58 (2.19) 3.10 2.68 ------- ------ ------- ------ Total from Investment Activities.................... 3.55 (2.12) 3.12 2.77 ------- ------ ------- ------ Distributions Net investment income.......... (0.04) (0.11) (0.06) (0.12) Net realized gains from investment transactions....... (2.77) (3.50) (2.47) (1.25) ------- ------ ------- ------ Total Distributions............ (2.81) (3.61) (2.53) (1.37) ------- ------ ------- ------ Change in Net Asset Value....... 0.74 (5.73) 0.59 1.40 ------- ------ ------- ------ Net Asset Value, End of Period.. $ 20.15 $19.41 $ 25.14 $24.55 ======= ====== ======= ====== Total Return (excludes redemption charge)............. 20.09% (8.86)% 14.03% 12.49%(c) Ratios/Supplemental Data: Net Assets at end of period (000).......................... $10,322 $7,949 $12,394 $7,929 Ratio of expenses to average net assets......................... 2.09% 2.10% 2.08% 2.11%(d) Ratio of net investment income to average net assets.......... (0.16)% 0.32% 0.05% 0.26%(d) Ratio of expenses to average net assets*........................ 2.10% 2.11% 2.09% 2.11%(d) Portfolio turnover**............ 43% 17% 18% 17%
+ Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly AmSouth Equity Fund. (b) For the period from September 3, 1997 (commencement of operations) through July 31, 1998. (c) Not annualized. (d) Annualized. See notes to financial statements 54 AMSOUTH FUNDS Value Fund (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (b) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period....................... $ 19.53 $ 25.27 $ 24.57 $ 22.51 -------- -------- -------- -------- Investment Activities Net investment income........ 0.15 0.28 0.26 0.28 Net realized and unrealized gains (losses) from investments................. 3.59 (2.24) 3.16 3.31 -------- -------- -------- -------- Total from Investment Activities.................. 3.74 (1.96) 3.42 3.59 -------- -------- -------- -------- Distributions Net investment income........ (0.16) (0.28) (0.25) (0.28) Net realized gains from investment transactions..... (2.77) (3.50) (2.47) (1.25) -------- -------- -------- -------- Total Distributions.......... (2.93) (3.78) (2.72) (1.53) -------- -------- -------- -------- Change in Net Asset Value..... 0.81 (5.74) 0.70 2.06 -------- -------- -------- -------- Net Asset Value, End of Period....................... $ 20.34 $ 19.53 $ 25.27 $ 24.57 ======== ======== ======== ======== Total Return.................. 21.10% (8.11)% 15.43% 12.46%(c) Ratios/Supplemental Data: Net Assets at end of period (000)........................ $565,484 $560,804 $960,660 $947,575 Ratio of expenses to average net assets................... 1.19% 1.13% 1.08% 1.09%(d) Ratio of net investment income to average net assets........ 0.76% 1.30% 1.07% 1.26%(d) Ratio of expenses to average net assets*.................. 1.25% 1.15% 1.09% 1.10%(d) Portfolio turnover**.......... 43% 17% 18% 17%
/\ Formerly Premier Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly AmSouth Equity Fund. (b) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. (c) Represents total return based on the activity of Classic Shares for the period from August 1, 1997 to September 1, 1997 and the activity of Premier Shares for the period from September 2, 1997 to July 31, 1998. Total return for the Premier Shares for the period from September 2, 1997 (commencement of operations) through July 31, 1998 was 16.52%. (d) Annualized. See notes to financial statements 55 AMSOUTH FUNDS Schedule of Portfolio Investments Growth Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks (98.3%)
Shares Value ------ ------- Consumer Discretionary (9.0%) AOL-Time Warner, Inc. (b)........................................ 15,300 $ 696 General Motors Corp. ............................................ 8,000 509 Kohl's Corp. (b)................................................. 8,000 458 Omnicom Group, Inc. ............................................. 3,300 288 ------ 1,951 ------ Consumer Staples (2.4%) Anheuser-Busch Cos., Inc. ....................................... 12,000 520 ------ Financials (21.7%) American Express Co. ............................................ 11,000 444 Bank of America Corp. ........................................... 7,000 445 Capital One Financial Corp. ..................................... 10,500 674 Freddie Mac...................................................... 6,000 411 Lehman Brothers Holdings, Inc. .................................. 8,000 576 MBNA Corp. ...................................................... 20,300 718 Merrill Lynch & Co., Inc. ....................................... 8,900 483 Morgan Stanley Dean Witter & Co. ................................ 8,000 479 SouthTrust Corp. ................................................ 19,000 488 ------ 4,718 ------ Health Care (8.2%) Cephalon, Inc. (b)............................................... 6,000 383 IVAX Corp. (b)................................................... 10,125 344 Pfizer, Inc. .................................................... 12,000 495 Pharmacia Corp. ................................................. 12,380 553 ------ 1,775 ------ Industrials (11.3%) Boeing Co. ...................................................... 12,000 702 Caterpillar, Inc. ............................................... 8,000 441 Norfolk Southern Corp. .......................................... 27,000 543 PACCAR, Inc. .................................................... 8,000 471 Tyco International, Ltd. ........................................ 5,500 293 ------ 2,450 ------ Technology (41.6%) Advanced Micro Devices, Inc. (b)................................. 17,000 310 Apple Computer, Inc. (b)......................................... 20,000 376 Applied Micro Circuits Corp. (b)................................. 9,100 156 Ariba, Inc. (b).................................................. 5,700 23 Atmel Corp. (b).................................................. 48,200 482 Autodesk, Inc. .................................................. 15,000 559 BMC Software, Inc. (b)........................................... 20,000 400
Common Stocks, continued
Shares Value ------ ------- Technology, continued Celestica, Inc. (b)............................................. 11,500 $ 555 Cirrus Logic, Inc. (b).......................................... 15,000 278 Cisco Systems, Inc. (b)......................................... 23,000 442 Commerce One, Inc. (b).......................................... 21,700 81 Earthlink Network, Inc. (b)..................................... 11,085 181 EMC Corp. (b)................................................... 8,000 158 Harris Corp..................................................... 11,100 333 Intuit, Inc. (b)................................................ 14,000 481 JDS Uniphase Corp. (b).......................................... 7,600 70 Juniper Networks, Inc. (b)...................................... 5,600 144 Linear Technology Corp. ........................................ 10,300 449 Micron Technology, Inc. (b)..................................... 11,000 462 NVIDIA Corp. (b)................................................ 4,500 364 Oracle Corp. (b)................................................ 23,800 430 Polycom, Inc. (b)............................................... 19,000 484 Sanmina Corp. (b)............................................... 16,800 366 Siebel Systems, Inc. (b)........................................ 9,000 310 Sun Microsystems, Inc. (b)...................................... 24,100 393 Tektronix, Inc. (b)............................................. 25,300 574 Vitesse Semiconductor Corp. (b)................................. 10,300 204 ------- 9,065 ------- Utilities (4.1%) Enron Corp. .................................................... 8,000 363 Williams Cos., Inc.............................................. 16,100 539 ------- 902 ------- TOTAL COMMON STOCKS............................................. 21,381 ------- TOTAL INVESTMENTS (Cost $29,282) (a) -- 98.3%.................................... 21,381 ------- Other assets in excess of liabilities -- 1.7%................... 375 ------- NET ASSETS -- 100.0%............................................ $21,756 =======
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized depreciation of securities as follows: Unrealized appreciation............................................ $ 554 Unrealized depreciation............................................ (8,455) ------- Net unrealized depreciation........................................ $(7,901) =======
(b) Represents non-income producing security. See notes to financial statements 56 AMSOUTH FUNDS Growth Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $29,282)...... $21,381 Cash........... 819 Interest and dividends receivable.... 4 Receivable for capital shares issued........ 6 Collateral for securities loaned, at fair value.... 1,862 Prepaid expenses and other assets.. 4 ------- Total Assets.. 24,076 Liabilities: Payable for investments purchased..... $ 404 Payable for capital shares redeemed...... 33 Payable upon return of securities loaned........ 1,862 Accrued expenses and other payables: Investment advisory fees......... 6 Administration fees......... 1 Shareholder servicing and distribution fees......... 7 Custodian fees......... 1 Other......... 6 ------ Total Liabilities.. 2,320 ------- Net Assets: Capital........ 36,116 Distributions in excess of net investment income........ (3) Accumulated net realized losses from investment transactions.. (6,456) Unrealized depreciation from investments... (7,901) ------- Net Assets..... $21,756 ======= Class A Shares (b) Net Assets.... $ 6,312 Shares outstanding.. 803 Redemption price per share........ $ 7.86 ======= Class A Shares -- Maximum Sales Charge........ 5.50% ------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)........ $ 8.32 ======= Class B Shares Net Assets.... $ 4,991 Shares outstanding.. 658 Offering price per share*... $ 7.58 ======= Trust Shares (c) Net Assets.... $10,453 Shares outstanding.. 1,315 Offering and redemption price per share........ $ 7.95 =======
* Redemption price per share varies by length of time shares are held. (a) Formerly AmSouth Capital Growth Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Dividend income................................................. $ 158 Securities lending income....................................... 8 -------- Total Investment Income........................................ 166 Expenses: Investment advisory fees........................................ $278 Administration fees............................................. 69 Distribution fees -- Class B Shares............................. 53 Shareholder servicing fees -- Class A Shares (b)................ 24 Shareholder servicing fees -- Class B Shares.................... 18 Shareholder servicing fees -- Trust Shares (c).................. 27 Custodian fees.................................................. 10 Accounting fees................................................. 8 Transfer agent fees............................................. 63 Other fees...................................................... 23 ---- Total expenses before fee reductions........................... 573 Expenses reduced by Administrator.............................. (17) Expenses reduced by Transfer Agent............................. (25) Expenses reduced by Distributor................................ (9) Expenses reduced by Fund Accountant............................ (3) -------- Net expenses................................................... 519 -------- Net Investment Loss............................................. (353) -------- Realized/Unrealized Losses from Investments: Net realized losses from investment transactions................ (3,520) Change in unrealized appreciation/depreciation from investments.................................................... (9,095) -------- Net realized/unrealized losses from investments................. (12,615) -------- Change in net assets resulting from operations.................. $(12,968) ========
See notes to financial statements 57 AMSOUTH FUNDS Growth Fund (a) Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment loss..................................... $ (353) $ (307) Net realized gains (losses) from investment transactions........................................... (3,520) 7,075 Change in unrealized appreciation/depreciation from investments............................................ (9,095) (2,745) -------- ------- Change in net assets resulting from operations........... (12,968) 4,023 -------- ------- Distributions to Class A Shareholders (b): From net realized gains on investment transactions...... (2,235) (495) Distributions to Class B Shareholders: From net realized gains on investment transactions...... (1,645) (311) Distributions to Trust Shareholders (c): From net realized gains on investment transactions...... (4,132) (794) -------- ------- Change in net assets from shareholder distributions...... (8,012) (1,600) -------- ------- Change in net assets from capital transactions........... (7,651) 8,406 -------- ------- Change in net assets..................................... (28,631) 10,829 Net Assets: Beginning of period..................................... 50,387 39,558 -------- ------- End of period........................................... $ 21,756 $50,387 ======== =======
(a) Formerly AmSouth Capital Growth Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. See notes to financial statements 58 AMSOUTH FUNDS Growth Fund (a) Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (b)(c) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period........................ $ 14.93 $ 14.04 $ 11.62 $10.00 ------- ------- ------- ------ Investment Activities Net investment loss........... (0.10) (0.09) (0.06) (0.03) Net realized and unrealized gains (losses) from investments.................. (4.16) 1.53 2.57 1.65 ------- ------- ------- ------ Total from Investment Activities................... (4.26) 1.44 2.51 1.62 ------- ------- ------- ------ Distributions Net realized gains from investment transactions...... (2.81) (0.55) (0.09) -- ------- ------- ------- ------ Total Distributions........... (2.81) (0.55) (0.09) -- ------- ------- ------- ------ Change in Net Asset Value...... (7.07) 0.89 2.42 1.62 ------- ------- ------- ------ Net Asset Value, End of Period........................ $ 7.86 $ 14.93 $ 14.04 $11.62 ======= ======= ======= ====== Total Return (excludes sales charge)....................... (32.44)% 10.27% 21.76% 16.20%(d) Ratios/Supplemental Data: Net Assets at end of period (000)......................... $ 6,312 $13,665 $14,040 $9,720 Ratio of expenses to average net assets.................... 1.42% 1.35% 1.23% 1.40%(e) Ratio of net investment income to average net assets......... (0.94)% (0.59)% (0.50)% (0.42)%(e) Ratio of expenses to average net assets*................... 1.55% 1.55% 1.74% 2.37%(e) Portfolio turnover**........... 161% 111% 79% 77%
/\ Formerly Classic Shares. + Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly AmSouth Capital Growth Fund. (b) For the period from August 3, 1997 (commencement of operations) through July 31, 1998. (c) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. (d) Not annualized. (e) Annualized. See notes to financial statements 59 AMSOUTH FUNDS Growth Fund (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (b) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period........................ $ 14.61 $13.85 $11.54 $ 9.82 ------- ------ ------ ------ Investment Activities Net investment loss........... (0.18) (0.19) (0.12) (0.06) Net realized and unrealized gains (losses) from investments.................. (4.04) 1.50 2.52 1.78 ------- ------ ------ ------ Total from Investment Activities................... (4.22) 1.31 2.40 1.72 ------- ------ ------ ------ Distributions Net realized gains from investment transactions...... (2.81) (0.55) (0.09) -- ------- ------ ------ ------ Total Distributions........... (2.81) (0.55) (0.09) -- ------- ------ ------ ------ Change in Net Asset Value...... (7.03) 0.76 2.31 1.72 ------- ------ ------ ------ Net Asset Value, End of Period........................ $ 7.58 $14.61 $13.85 $11.54 ======= ====== ====== ====== Total Return (excludes redemption charge)............ (32.95)% 9.46% 20.96% 17.52%(c) Ratios/Supplemental Data: Net Assets at end of period (000)......................... $ 4,991 $9,223 $7,463 $3,477 Ratio of expenses to average net assets.................... 2.17% 2.10% 1.97% 2.05%(d) Ratio of net investment income to average net assets......... (1.70)% (1.34)% (1.26)% (1.10)%(d) Ratio of expenses to average net assets*................... 2.30% 2.30% 2.48% 3.11%(d) Portfolio turnover**........... 161% 111% 79% 77%
+ Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly AmSouth Capital Growth Fund. (b) For the period from September 3, 1997 (commencement of operations) through July 31, 1998. (c) Not annualized. (d) Annualized. See notes to financial statements 60 AMSOUTH FUNDS Growth Fund (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (b)(c) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period......................... $ 15.04 $ 14.11 $ 11.65 $ 9.55 ------- ------- ------- ------ Investment Activities Net investment loss............ (0.09) (0.06) (0.02) -- Net realized and unrealized gains (losses) from investments................... (4.19) 1.54 2.57 2.10 ------- ------- ------- ------ Total from Investment Activities.................... (4.28) 1.48 2.55 2.10 ------- ------- ------- ------ Distributions Net realized gains from investment transactions....... (2.81) (0.55) (0.09) -- ------- ------- ------- ------ Total Distributions............ (2.81) (0.55) (0.09) -- ------- ------- ------- ------ Change in Net Asset Value...... (7.09) 0.93 2.46 2.10 ------- ------- ------- ------ Net Asset Value, End of Period.. $ 7.95 $ 15.04 $ 14.11 $11.65 ======= ======= ======= ====== Total Return.................... (32.32)% 10.51% 22.05% 16.50%(d) Ratios/Supplemental Data: Net Assets at end of period (000).......................... $10,453 $27,499 $18,055 $2,824 Ratio of expenses to average net assets......................... 1.27% 1.15% 0.96% 0.99%(e) Ratio of net investment income to average net assets.......... (0.79)% (0.40)% (0.28)% 0.00%(e) Ratio of expenses to average net assets*........................ 1.45% 1.37% 1.47% 2.05%(e) Portfolio turnover**............ 161% 111% 79% 77%
/\ Formerly Premier Shares. + Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly AmSouth Capital Growth Fund. (b) For the period from August 3, 1997 (commencement of operations) through July 31, 1998. (c) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. (d) Represents total return based on the activity of Classic Shares for the period from August 4, 1997 to September 1, 1997 and the activity of Premier Shares for the period from September 2, 1997 to July 31, 1998. Total return for the Premier Shares for the period from September 2, 1997 (commencement of operations) through July 31, 1998 was 21.99%. (e) Annualized. See notes to financial statements 61 AMSOUTH FUNDS Schedule of Portfolio Investments Capital Growth Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks (94.3%)
Shares Value --------- -------- Aerospace/Defense (2.8%) Boeing Co. ................................................. 75,000 $ 4,390 United Technologies Corp. .................................. 65,000 4,771 -------- 9,161 -------- Banks (4.0%) Fifth Third Bancorp......................................... 118,000 7,436 Northern Trust Corp. ....................................... 90,000 5,742 -------- 13,178 -------- Business Equipment & Services (3.8%) Cintas Corp. ............................................... 116,000 5,820 Paychex, Inc. .............................................. 170,000 6,681 -------- 12,501 -------- Computer Hardware (3.9%) IBM Corp. .................................................. 70,000 7,365 Network Appliance, Inc. (b)................................. 90,000 1,123 Sun Microsystems, Inc. (b).................................. 260,000 4,235 -------- 12,723 -------- Computer Software & Services (17.0%) Adobe Systems, Inc. ........................................ 50,000 1,875 AOL-Time Warner, Inc. (b)................................... 130,000 5,909 Automatic Data Processing, Inc. ............................ 160,000 8,151 BEA Systems, Inc. (b)....................................... 70,500 1,555 Cisco Systems, Inc. (b)..................................... 215,000 4,132 DST Systems, Inc. (b)....................................... 128,000 6,048 EMC Corp. (b)............................................... 200,000 3,944 Emulex Corp. (b)............................................ 65,000 1,526 Juniper Networks, Inc. (b).................................. 75,000 1,927 Microsoft Corp. (b)......................................... 100,000 6,618 Oracle Corp. (b)............................................ 150,000 2,712 Sungard Data Systems, Inc. (b).............................. 240,000 6,545 Symantec Corp. (b).......................................... 40,000 1,928 Veritas Software Corp. (b).................................. 60,500 2,566 -------- 55,436 -------- Cosmetics/Toiletries (0.3%) Colgate-Palmolive Co. ...................................... 20,000 1,084 -------- Diversified Manufacturing (4.4%) General Electric Co. ....................................... 150,000 6,525 Tyco International, Ltd. ................................... 150,020 7,981 -------- 14,506 -------- Educational Services (2.2%) DeVry, Inc. (b)............................................. 188,300 7,347 -------- Electronic Components (2.2%) Altera Corp. (b)............................................ 140,000 4,208 QLogic Corp. (b)............................................ 55,000 2,113 Solectron Corp. (b)......................................... 50,000 874 -------- 7,195 -------- Financial Services (4.8%) Citigroup, Inc. ............................................ 175,000 8,787 Fannie Mae.................................................. 85,000 7,076 -------- 15,863 -------- Food Distributors & Wholesalers (1.7%) Costco Wholesale Corp. (b).................................. 130,000 5,597 --------
Common Stocks, continued
Shares Value --------- -------- Food Products, Processing & Packaging (2.0%) SYSCO Corp. ................................................ 245,200 $ 6,581 -------- Health Care (5.1%) Cardinal Health, Inc. ...................................... 125,000 9,204 Johnson & Johnson........................................... 140,000 7,574 -------- 16,778 -------- Health Care -- Drugs (0.9%) Amgen, Inc. (b)............................................. 45,000 2,822 -------- Insurance (1.1%) American International Group, Inc. ......................... 45,000 3,746 -------- Medical Equipment & Supplies (4.1%) Medtronic, Inc. ............................................ 102,000 4,899 Stryker Corp. .............................................. 145,000 8,697 -------- 13,596 -------- Metals & Mining (0.9%) Alcoa, Inc. ................................................ 75,000 2,942 -------- Oil & Gas Exploration, Production, & Services (1.0%) Calpine Corp. (b)........................................... 10,000 360 Enron Corp. ................................................ 50,000 2,267 Schlumberger Ltd. .......................................... 5,000 269 Shaw Group (The), Inc. (b).................................. 10,000 325 -------- 3,221 -------- Pharmaceuticals (7.5%) Elan Corp., PLC-ADR (b)..................................... 100,000 5,775 Forest Laboratories, Inc. (b)............................... 120,000 9,426 Pfizer, Inc. ............................................... 230,250 9,491 -------- 24,692 -------- Retail (18.7%) Abercrombie & Fitch Co. (b)................................. 120,000 4,658 Best Buy Co., Inc. (b)...................................... 115,000 7,700 Chico's FAS, Inc. (b)....................................... 82,000 3,056 CVS Corp. .................................................. 95,000 3,421 Dollar General Corp. ....................................... 270,000 5,300 Home Depot, Inc. ........................................... 150,000 7,556 Kohl's Corp. (b)............................................ 30,000 1,718 Lowe's Cos., Inc. .......................................... 170,000 6,491 Safeway, Inc. (b)........................................... 105,000 4,637 Target Corp. ............................................... 100,000 3,870 Wal-Mart Stores, Inc. ...................................... 135,000 7,547 Walgreen Co. ............................................... 150,000 5,055 -------- 61,009 -------- Semiconductors (3.9%) Applied Materials, Inc. (b)................................. 100,000 4,586 Broadcom Corp., Class A (b)................................. 70,000 3,054 Intel Corp. ................................................ 175,000 5,217 -------- 12,857 -------- Technology (1.6%) Agilent Technologies (b).................................... 1 --* Novellus Systems, Inc. (b).................................. 99,700 5,082 -------- 5,082 --------
Continued 62 AMSOUTH FUNDS Schedule of Portfolio Investments Capital Growth Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks, continued
Shares Value --------- -------- Telecommunications -- Equipment (0.4%) Ciena Corp. (b).............................................. 35,000 $ 1,160 -------- TOTAL COMMON STOCKS.......................................... 309,077 --------
Investment Companies (5.4%) AIM Liquid Assets Money Market Fund......................... 2,050,871 2,051 AmSouth Prime Money Market Fund............................. 5,947,332 5,947 S & P 500 Depositary Receipt................................ 80,000 9,708 -------- TOTAL INVESTMENT COMPANIES.................................. 17,706 -------- TOTAL INVESTMENTS (Cost $323,011) (a) -- 99.7%............................... 326,783 Other assets in excess of liabilities -- 0.3%............... 935 -------- NET ASSETS -- 100.0%........................................ $327,718 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation............................................. $ 36,788 Unrealized depreciation............................................. (33,016) -------- Net unrealized appreciation......................................... $ 3,772 ========
(b) Represents non-income producing security. * Due to rounding, figure is below thousand-dollar threshold. ADR -- American Depositary Receipt PLC -- Public Limited Company See notes to financial statements 63 AMSOUTH FUNDS Capital Growth Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $323,011)........................ $326,783 Interest and dividends receivable............................ 88 Receivable for capital shares issued......................... 9 Receivable for investments sold.............................. 6,476 Receivable from investment advisor........................... 9 Collateral for securities loaned, at fair value.............. 88,415 Prepaid expenses and other assets............................ 26 -------- Total Assets................................................ 421,806 Liabilities: Payable for investments purchased............................ $ 5,440 Payable for capital shares redeemed.......................... 39 Payable upon return of securities loaned..................... 88,415 Accrued expenses and other payables: Investment advisory fees.................................... 93 Administration fees......................................... 8 Shareholder servicing and distribution fees................. 36 Custodian fees.............................................. 8 Other....................................................... 49 ------- Total Liabilities........................................... 94,088 -------- Net Assets: Capital...................................................... 357,381 Distributions in excess of net investment income............. (3) Accumulated net realized losses from investment transactions................................................ (33,432) Unrealized appreciation from investments..................... 3,772 -------- Net Assets................................................... $327,718 ======== Class A Shares Net Assets.................................................. $ 19,574 Shares outstanding.......................................... 1,803 Redemption price per share.................................. $ 10.86 ======== Class A Shares -- Maximum Sales Charge....................... 5.50% -------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent).............................. $ 11.49 ======== Class B Shares Net Assets.................................................. $ 8,967 Shares outstanding.......................................... 863 Offering price per share*................................... $ 10.39 ======== Trust Shares (b) Net Assets.................................................. $299,177 Shares outstanding.......................................... 27,653 Offering and redemption price per share..................... $ 10.82 ========
* Redemption price per share varies by length of time shares are held. (a) Formerly ISG Capital Growth Fund. (b) Formerly Institutional Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Dividend income.............................................. $ 1,797 Securities lending income.................................... 222 -------- Total Investment Income..................................... 2,019 Expenses: Investment advisory fees..................................... $2,656 Administration fees.......................................... 664 Distribution fees -- Class B Shares.......................... 70 Shareholder servicing fees -- Class A Shares................. 34 Shareholder servicing fees -- Class B Shares................. 23 Shareholder servicing fees -- Trust Shares (b)............... 464 Custodian fees............................................... 92 Accounting fees.............................................. 42 Transfer agent fees.......................................... 112 Other fees................................................... 123 ------ Total expenses before fee reductions/reimbursements......... 4,280 Expenses reimbursed by Investment Advisor................... (130) Expenses reduced by Administrator........................... (166) Expenses reduced by Distributor............................. (155) Expenses reduced by Fund Accountant......................... (38) -------- Net expenses................................................ 3,791 -------- Net Investment Loss.......................................... (1,772) -------- Realized/Unrealized Losses from Investments: Net realized losses from investment transactions............. (32,670) Change in unrealized appreciation/depreciation from investments................................................. (44,201) -------- Net realized/unrealized losses from investments.............. (76,871) -------- Change in net assets resulting from operations............... $(78,643) ========
See notes to financial statements 64 AMSOUTH FUNDS Capital Growth Fund (a) Statements of Changes in Net Assets
Year Ended Period Ended Year Ended July 31, July 31, December 31, 2001 2000 (b) 1999 ---------- ------------ ------------ (Amounts in thousands) From Investment Activities: Operations: Net investment loss...................... $ (1,772) $ (527) $ (265) Net realized gains (losses) from investment transactions................. (32,670) 18,488 46,657 Change in unrealized appreciation/depreciation from investments............................. (44,201) (3,450) 466 -------- -------- -------- Change in net assets resulting from operations............................... (78,643) 14,511 46,858 -------- -------- -------- Distributions to Class A Shareholders: From net realized gains on investment transactions............................ (1,143) -- (1,690) Distributions to Class B Shareholders: From net realized gains on investment transactions............................ (798) -- (1,261) Distributions to Trust Shareholders (c): From net investment income............... -- (35) -- From net realized gains on investment transactions............................ (25,149) -- (39,425) -------- -------- -------- Change in net assets from shareholder distributions............................ (27,090) (35) (42,376) -------- -------- -------- Change in net assets from capital transactions............................. 111,604 47,546 74,316 -------- -------- -------- Change in net assets...................... 5,871 62,022 78,798 Net Assets: Beginning of period...................... 321,847 259,825 181,027 -------- -------- -------- End of period............................ $327,718 $321,847 $259,825 ======== ======== ========
(a) Formerly ISG Capital Growth Fund. (b) For the period from January 1, 2000 through July 31, 2000. (c) Formerly Institutional Shares. See notes to financial statements 65 AMSOUTH FUNDS Capital Growth Fund (a) Financial Highlights, Class A Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Year Ended Year Ended Period Ended July 31, July 31, December 31, December 31, December 31, December 31, 2001 + 2000 (b) 1999+ 1998 1997 1996 (c) ---------- ------------ ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Period.... $ 14.97 $ 14.37 $ 14.20 $12.80 $11.32 $ 10.00 ------- ------- ------- ------ ------ ------- Investment Activities Net investment income (loss)................ (0.09) (0.04) (0.04) (0.01) 0.06 -- Net realized and unrealized gains (losses) from investments........... (2.86) 0.64 2.97 3.89 3.40 1.32 ------- ------- ------- ------ ------ ------- Total from Investment Activities............ (2.95) 0.60 2.93 3.88 3.46 1.32 ------- ------- ------- ------ ------ ------- Distributions Net investment income.. -- -- -- -- (0.06) -- Net realized gains from investment transactions.......... (1.16) -- (2.76) (2.48) (1.92) -- ------- ------- ------- ------ ------ ------- Total Distributions.... (1.16) -- (2.76) (2.48) (1.98) -- ------- ------- ------- ------ ------ ------- Change in Net Asset Value.................. (4.11) 0.60 0.17 1.40 1.48 1.32 ------- ------- ------- ------ ------ ------- Net Asset Value, End of Period................. $ 10.86 $ 14.97 $ 14.37 $14.20 $12.80 $ 11.32 ======= ======= ======= ====== ====== ======= Total Return (excludes sales charge).......... (21.27)% 4.18%(d) 21.85% 32.05% 30.79% 13.20%(d) Ratios/Supplemental Data: Net Assets at end of period (000)........... $19,574 $14,137 $10,310 $4,631 $ 858 $49,008 Ratio of expenses to average net assets..... 1.30% 1.32%(e) 1.32% 1.28% 0.93% 1.20%(e) Ratio of net investment income to average net assets................. (0.67)% (0.49)%(e) (0.33)% (0.19)% 0.42% (0.02)%(e) Ratio of expenses to average net assets*.... 1.36% 1.37%(e) 1.33% 1.29% 1.18% 1.39%(e) Portfolio turnover**.... 100% 91% 178% 152% 116% 69%
+ Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Capital Growth Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from April 1, 1996 (commencement of operations) through December 31, 1996. (d) Not annualized. (e) Annualized. See notes to financial statements 66 AMSOUTH FUNDS Capital Growth Fund (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Period Ended July 31, July 31, December 31, December 31, 2001 + 2000 (b) 1999 + 1998 (c) ---------- ------------ ------------ ------------ Net Asset Value, Beginning of Period..... $ 14.46 $13.93 $13.92 $13.10 ------- ------ ------ ------ Investment Activities Net investment loss..... (0.17) (0.09) (0.14) (0.05) Net realized and unrealized gains (losses) from investments............ (2.74) 0.62 2.91 3.35 ------- ------ ------ ------ Total from Investment Activities............. (2.91) 0.53 2.77 3.30 ------- ------ ------ ------ Distributions Net realized gains from investment transactions........... (1.16) -- (2.76) (2.48) ------- ------ ------ ------ Total Distributions..... (1.16) -- (2.76) (2.48) ------- ------ ------ ------ Change in Net Asset Value................... (4.07) 0.53 0.01 0.82 ------- ------ ------ ------ Net Asset Value, End of Period.................. $ 10.39 $14.46 $13.93 $13.92 ======= ====== ====== ====== Total Return (excludes redemption charge)...... (21.77)% 3.80%(d) 21.11% 26.86%(d) Ratios/Supplemental Data: Net Assets at end of period (000)............ $ 8,967 $8,939 $7,704 $2,854 Ratio of expenses to average net assets...... 1.96% 1.96%(e) 1.92% 2.04%(e) Ratio of net investment income to average net assets.................. (1.35)% (1.11)%(e) (0.93)% (0.95)%(e) Ratio of expenses to average net assets*..... 2.11% 2.07%(e) 1.93% (f) Portfolio turnover**..... 100% 91% 178% 152%
+ Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Capital Growth Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from February 5, 1998 (commencement of operations) through December 31, 1998. (d) Not annualized. (e) Annualized. (f) There was no fee reduction in this period. See notes to financial statements 67 AMSOUTH FUNDS Capital Growth Fund (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Year Ended Period Ended July 31, July, 31 December 31, December 31, December 31, 2001 + 2000 (b) 1999 + 1998 1997 (c) ---------- ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Period.... $ 14.89 $ 14.27 $ 14.09 $ 12.69 $ 14.51 -------- -------- -------- -------- -------- Investment Activities Net investment income (loss)................ (0.06) (0.02) (0.01) 0.01 0.02 Net realized and unrealized gains (losses) from investments........... (2.85) 0.64 2.95 3.88 0.10 -------- -------- -------- -------- -------- Total from Investment Activities............ (2.91) 0.62 2.94 3.89 0.12 -------- -------- -------- -------- -------- Distributions Net investment income.. -- -- -- (0.01) (0.02) Net realized gains from investment transactions.......... (1.16) -- (2.76) (2.48) (1.92) -------- -------- -------- -------- -------- Total Distributions.... (1.16) -- (2.76) (2.49) (1.94) -------- -------- -------- -------- -------- Change in Net Asset Value.................. (4.07) 0.62 0.18 1.40 (1.82) -------- -------- -------- -------- -------- Net Asset Value, End of Period................. $ 10.82 $ 14.89 $ 14.27 $ 14.09 $ 12.69 ======== ======== ======== ======== ======== Total Return............ (21.11)% 4.36%(d) 22.09% 32.40% 0.88%(d) Ratios/Supplemental Data: Net Assets at end of period (000)........... $299,177 $298,771 $241,810 $173,542 $141,761 Ratio of expenses to average net assets..... 1.11% 1.11%(e) 1.07% 1.02% 0.58%(e) Ratio of net investment income to average net assets................. (0.50)% (0.26)%(e) (0.09)% 0.07% 0.80%(e) Ratio of expenses to average net assets*.... 1.26% 1.22%(e) 1.08% 1.03% 0.99%(e) Portfolio turnover**.... 100% 91% 178% 152% 116%
/\ Formerly Institutional Shares. + Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Capital Growth Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from October 3, 1997 (commencement of operations) through December 31, 1997. (d) Not annualized. (e) Annualized. See notes to financial statements 68 AMSOUTH FUNDS Schedule of Portfolio Investments Large Cap Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks (98.9%)
Shares Value --------- -------- Advertising (0.9%) The Interpublic Group of Companies, Inc. ................... 200,000 $ 5,474 -------- Aerospace/Defense (1.0%) General Dynamics Corp. ..................................... 75,000 6,067 -------- Beverages (3.5%) Coca-Cola Co. .............................................. 220,000 9,812 PepsiCo, Inc. .............................................. 250,000 11,658 -------- 21,470 -------- Business Equipment & Services (1.3%) Paychex, Inc. .............................................. 200,000 7,860 -------- Computer Hardware (7.4%) Compaq Computer Corp. ...................................... 300,000 4,482 Dell Computer Corp. (b)..................................... 200,000 5,386 Hewlett-Packard Co. ........................................ 500,000 12,330 IBM Corp. .................................................. 200,000 21,042 Network Appliance, Inc. (b)................................. 200,000 2,496 -------- 45,736 -------- Computer Software & Services (6.7%) Automatic Data Processing, Inc. ............................ 300,000 15,285 Electronic Data Systems Corp. .............................. 150,000 9,578 Microsoft Corp. (b)......................................... 250,000 16,547 -------- 41,410 -------- Consumer Goods (2.1%) Gillette Co. ............................................... 200,000 5,574 Procter & Gamble Co. ....................................... 100,000 7,102 -------- 12,676 -------- Diversified Manufacturing (4.6%) General Electric Co. ....................................... 400,000 17,400 Honeywell International, Inc. .............................. 100,000 3,687 Illinois Tool Works, Inc. .................................. 120,000 7,560 -------- 28,647 -------- Entertainment (1.5%) Walt Disney (The) Co. ...................................... 350,000 9,223 -------- Financial Services (0.4%) Citigroup, Inc. ............................................ 50,000 2,511 -------- Financials (0.5%) American Express Co. ....................................... 75,000 3,025 -------- Food Products, Processing & Packaging (3.2%) Sara Lee Corp. ............................................. 300,000 6,051 SYSCO Corp. ................................................ 500,000 13,420 -------- 19,471 -------- Health Care (11.7%) American Home Products Corp. ............................... 200,000 12,062 Cardinal Health, Inc. ...................................... 150,000 11,045 Johnson & Johnson........................................... 500,000 27,049 Pfizer, Inc. ............................................... 350,000 14,427 UnitedHealth Group, Inc. ................................... 100,000 6,742 -------- 71,325 -------- Health Care -- Drugs (2.0%) Amgen, Inc. (b)............................................. 200,000 12,542 --------
Common Stocks, continued
Shares Value --------- -------- Household Products/Wares (0.6%) Clorox Corp. ............................................... 100,000 $ 3,738 -------- Industrials (3.7%) Boeing Co. ................................................. 120,000 7,024 Tyco International, Ltd. ................................... 300,000 15,960 -------- 22,984 -------- Insurance (1.3%) AFLAC, Inc. ................................................ 100,000 2,958 American International Group, Inc. ......................... 60,000 4,995 -------- 7,953 -------- Machinery & Equipment (2.3%) Dover Corp. ................................................ 400,000 14,460 -------- Media (1.0%) McGraw Hill Cos., Inc. ..................................... 100,000 6,137 -------- Medical Equipment & Supplies (3.2%) IMS Health, Inc. ........................................... 200,000 5,140 Medtronic, Inc. ............................................ 300,000 14,409 -------- 19,549 -------- Office Equipment & Services (2.0%) Pitney Bowes, Inc. ......................................... 300,000 12,060 -------- Pharmaceuticals (9.9%) Abbott Laboratories......................................... 300,000 16,077 Bristol-Myers Squibb Co. ................................... 120,000 7,097 Merck & Co., Inc. .......................................... 300,000 20,393 Schering-Plough Corp. ...................................... 450,000 17,573 -------- 61,140 -------- Raw Materials (0.7%) Avery Dennison Corp. ....................................... 90,000 4,613 -------- Restaurants (2.8%) McDonald's Corp. ........................................... 600,000 17,484 -------- Retail (11.5%) Albertson's, Inc. .......................................... 100,000 3,273 Dollar General Corp. ....................................... 300,000 5,889 Gap (The), Inc. ............................................ 250,000 6,828 Home Depot, Inc. ........................................... 350,000 17,629 TJX Cos., Inc. ............................................. 300,000 10,203 Wal-Mart Stores, Inc. ...................................... 300,000 16,769 Walgreen Co. ............................................... 300,000 10,110 -------- 70,701 -------- Semiconductors (3.7%) Applied Materials, Inc. (b)................................. 300,000 13,758 Intel Corp. ................................................ 300,000 8,943 -------- 22,701 -------- Technology (5.7%) Agilent Technologies (b).................................... 68,651 1,964 BMC Software, Inc. (b)...................................... 100,000 2,000 Cisco Systems, Inc. (b)..................................... 350,000 6,727 EMC Corp. (b)............................................... 200,000 3,944 Linear Technology Corp. .................................... 100,000 4,358 Oracle Corp. (b)............................................ 500,000 9,040 Sun Microsystems, Inc. (b).................................. 450,000 7,331 -------- 35,364 --------
Continued 69 AMSOUTH FUNDS Schedule of Portfolio Investments Large Cap Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks, continued
Shares Value --------- -------- Telecommunications -- Equipment (0.8%) Lucent Technologies, Inc. .................................. 150,000 $ 1,005 Motorola, Inc. ............................................. 120,000 2,243 Tellabs, Inc. (b)........................................... 100,000 1,647 -------- 4,895 -------- Telecommunications -- Wireless (0.1%) AT&T Wireless Services Inc. (b)............................. 32,180 601 -------- Tobacco (0.7%) Philip Morris Cos., Inc. ................................... 100,000 4,550 -------- Utilities -- Telecommunications (2.1%) AT&T Corp. ................................................. 100,000 2,021 BellSouth Corp. ............................................ 150,000 6,105 SBC Communications, Inc. ................................... 110,000 4,953 -------- 13,079 -------- TOTAL COMMON STOCKS......................................... 609,446 --------
Investment Companies (1.1%)
Shares Value --------- -------- AIM Liquid Assets Money Market Fund......................... 1,271 $ 1 AmSouth Prime Money Market Fund............................. 6,880,724 6,881 -------- TOTAL INVESTMENT COMPANIES.................................. 6,882 -------- TOTAL INVESTMENTS (Cost $360,562) (a) -- 100.0%.............................. 616,328 Other assets in excess of liabilities -- 0.0%............... 15 -------- NET ASSETS -- 100.0%........................................ $616,343 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation............................................. $296,686 Unrealized depreciation............................................. (40,920) -------- Net unrealized appreciation......................................... $255,766 ========
(b) Represents non-income producing security. See notes to financial statements 70 AMSOUTH FUNDS Large Cap Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $360,562)............................. $616,328 Interest and dividends receivable................................. 307 Receivable for capital shares issued.............................. 131 Collateral for securities loaned, at fair value................... 233,832 Prepaid expenses and other assets................................. 43 -------- Total Assets..................................................... 850,641
Liabilities: Payable for capital shares redeemed......................... $ 125 Payable upon return of securities loaned.................... 233,832 Accrued expenses and other payables: Investment advisory fees................................... 164 Administration fees........................................ 15 Shareholder servicing and distribution fees................ 81 Custodian fees............................................. 15 Other...................................................... 66 -------- Total Liabilities.......................................... 234,298 -------- Net Assets: Capital..................................................... 320,420 Accumulated net realized gains from investment transactions............................................... 40,157 Unrealized appreciation from investments.................... 255,766 -------- Net Assets.................................................. $616,343 ======== Class A Shares Net Assets................................................. $ 66,813 Shares outstanding......................................... 3,149 Redemption price per share................................. $ 21.22 ======== Class A Shares -- Maximum Sales Charge...................... 5.50% -------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)..................................................... $ 22.46 ======== Class B Shares Net Assets................................................. $ 28,118 Shares outstanding......................................... 1,358 Offering price per share*.................................. $ 20.70 ======== Trust Shares (b) Net Assets................................................. $521,412 Shares outstanding......................................... 24,533 Offering and redemption price per share.................... $ 21.25 ========
* Redemption price per share varies by length of time shares are held. (a) Formerly ISG Large-Cap Equity Fund. (b) Formerly Institutional Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Dividend income.............................................. $ 6,963 Securities lending income.................................... 493 --------- Total Investment Income..................................... 7,456 Expenses: Investment advisory fees..................................... $5,469 Administration fees.......................................... 1,367 Distribution fees -- Class B Shares.......................... 198 Shareholder servicing fees -- Class A Shares................. 188 Shareholder servicing fees -- Class B Shares................. 66 Shareholder servicing fees -- Trust Shares (b)............... 873 Custodian fees............................................... 189 Accounting fees.............................................. 106 Transfer agent fees.......................................... 256 Other fees................................................... 187 ------ Total expenses before fee reductions........................ 8,899 Expenses reduced by Investment Advisor...................... (342) Expenses reduced by Administrator........................... (342) Expenses reduced by Distributor............................. (291) Expenses reduced by Fund Accountant......................... (74) --------- Net expenses................................................ 7,850 --------- Net Investment Loss.......................................... (394) --------- Realized/Unrealized Gains (Losses) from Investments: Net realized gains from investment transactions.............. 53,004 Change in unrealized appreciation/depreciation from investments................................................. (133,341) --------- Net realized/unrealized losses on investments................ (80,337) --------- Change in net assets resulting from operations............... $ (80,731) =========
See notes to financial statements 71 AMSOUTH FUNDS Large Cap Fund (a) Statements of Changes in Net Assets
Year Ended Period Ended Year Ended July 31, July 31, December 31, 2001 2000 (b) 1999 ---------- ------------ ------------ (Amounts in thousands) From Investment Activities: Operations: Net investment income (loss)............ $ (394) $ (160) $ 729 Net realized gains from investment transactions........................... 53,004 56,300 205,658 Change in unrealized appreciation/depreciation from investments............................ (133,341) (52,282) (70,611) --------- -------- --------- Change in net assets resulting from operations.............................. (80,731) 3,858 135,776 --------- -------- --------- Distributions to Class A Shareholders: From net investment income.............. -- (15) (74) From net realized gains on investment transactions........................... (12,126) -- (11,381) Distributions to Class B Shareholders: From net realized gains on investment transactions........................... (3,952) -- (2,572) Distributions to Trust Shareholders (c): From net investment income.............. (17) (236) (660) From net realized gains on investment transactions........................... (96,106) -- (104,281) --------- -------- --------- Change in net assets from shareholder distributions........................... (112,201) (251) (118,968) --------- -------- --------- Change in net assets from capital transactions............................ 9,414 (7,854) (57,034) --------- -------- --------- Change in net assets..................... (183,518) (4,247) (40,226) Net Assets: Beginning of period..................... 799,861 804,108 844,334 --------- -------- --------- End of period........................... $ 616,343 $799,861 $ 804,108 ========= ======== =========
(a) Formerly ISG Large-Cap Equity Fund. (b) For the period from January 1, 2000 through July 31, 2000. (c) Formerly Institutional Shares. See notes to financial statements 72 AMSOUTH FUNDS Large Cap Fund (a) Financial Highlights, Class A Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Period Ended Year Ended Year Ended Year Ended July 31, July 31, December 31, December 31, February 28, February 28, February 28, 2001 + 2000 (b) 1999 + 1998 (c) 1998 1997 1996 ---------- ------------ ------------ ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Period.... $ 28.14 $ 28.02 $ 27.55 $ 23.01 $ 16.68 $ 14.49 $ 11.41 ------- ------- ------- ------- -------- -------- -------- Investment Activities Net investment income (loss)................ (0.04) (0.01) 0.03 0.05 0.11 0.14 0.16 Net realized and unrealized gains (losses) from investments........... (2.82) 0.14 5.07 5.79 6.48 2.54 3.63 ------- ------- ------- ------- -------- -------- -------- Total from Investment Activities............ (2.86) 0.13 5.10 5.84 6.59 2.68 3.79 ------- ------- ------- ------- -------- -------- -------- Distributions Net investment income.. -- (0.01) (0.03) (0.05) (0.11) (0.14) (0.17) Net realized gains from investment transactions.......... (4.06) -- (4.60) (1.25) (0.15) (0.35) (0.54) ------- ------- ------- ------- -------- -------- -------- Total Distributions.... (4.06) (0.01) (4.63) (1.30) (0.26) (0.49) (0.71) ------- ------- ------- ------- -------- -------- -------- Change in Net Asset Value.................. (6.92) 0.12 0.47 4.54 6.33 2.19 3.08 ------- ------- ------- ------- -------- -------- -------- Net Asset Value, End of Period................. $ 21.22 $ 28.14 $ 28.02 $ 27.55 $ 23.01 $ 16.68 $ 14.49 ======= ======= ======= ======= ======== ======== ======== Total Return (excludes sales charge).......... (11.72)% 0.45%(d) 18.85% 25.83%(d) 39.74% 18.79% 33.73% Ratios/Supplemental Data: Net Assets at end of period (000)........... $66,813 $81,099 $79,211 $57,772 $715,631 $490,392 $385,145 Ratio of expenses to average net assets..... 1.25% 1.14%(e) 1.04% 1.03%(e) 0.99% 0.92% 0.94% Ratio of net investment income to average net assets................. (0.16)% (0.07)%(e) 0.12% 0.21%(e) 0.54% 0.95% 1.24% Ratio of expenses to average net assets*.... 1.36% 1.37%(e) 1.39% 1.03%(e) (f) (f) (f) Portfolio turnover**.... 10% 10% 15% 3% 6% 7% 15%
+ Net investment income (loss) is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Large-Cap Equity Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from March 1, 1998 through December 31, 1998. In conjunction with the reorganization of the ISG Funds, the Fund changed its fiscal year end to December 31. (d) Not annualized. (e) Annualized. (f) There were no fee reductions in this period. See notes to financial statements 73 AMSOUTH FUNDS Large Cap Fund (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Period Ended July 31, July 31, December 31, December 31, 2001 + 2000 (b) 1999 + 1998 (c) ---------- ------------ ------------ ------------ Net Asset Value, Beginning of Period................ $ 27.74 $ 27.75 $ 27.54 $25.98 ------- ------- ------- ------ Investment Activities Net investment loss...... (0.21) (0.13) (0.23) -- Net realized and unrealized gains (losses) from investments............. (2.77) 0.12 5.04 1.56 ------- ------- ------- ------ Total from Investment Activities.............. (2.98) (0.01) 4.81 1.56 ------- ------- ------- ------ Distributions Net realized gains from investment transactions............ (4.06) -- (4.60) -- ------- ------- ------- ------ Total Distributions...... (4.06) -- (4.60) -- ------- ------- ------- ------ Change in Net Asset Value.................... (7.04) (0.01) 0.21 1.56 ------- ------- ------- ------ Net Asset Value, End of Period................... $ 20.70 $ 27.74 $ 27.75 $27.54 ======= ======= ======= ====== Total Return (excludes redemption charge)....... (12.40)% (0.04)%(d) 17.78% 6.02%(d) Ratios/Supplemental Data: Net Assets at end of period (000)............. $28,118 $24,655 $18,584 $ 100 Ratio of expenses to average net assets....... 2.00% 2.00%(e) 1.98% 1.10%(e) Ratio of net investment income to average net assets................... (0.91)% (0.93)%(e) (0.79)% 0.23%(e) Ratio of expenses to average net assets*...... 2.11% 2.07%(e) 2.00% 2.11%(e) Portfolio turnover**...... 10% 10% 15% 3%
+ Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Large-Cap Equity Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from December 15, 1998 (commencement on operations) through December 31, 1998. (d) Not annualized. (e) Annualized. See notes to financial statements 74 AMSOUTH FUNDS Large Cap Fund (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Year Ended July 31, July 31, December 31, December 31, 2001 + 2000 (b) 1999 + 1998 (c) ---------- ------------ ------------ ------------ Net Asset Value, Beginning of Period.... $ 28.14 $ 28.01 $ 27.54 $ 25.52 -------- -------- -------- -------- Investment Activities Net investment income.. --* -- 0.03 -- Net realized and unrealized gains (losses) from investments........... (2.83) 0.14 5.07 2.02 -------- -------- -------- -------- Total from Investment Activities............ (2.83) 0.14 5.10 2.02 -------- -------- -------- -------- Distributions Net investment income.. --* (0.01) 0.03 -- Net realized gains from investment transactions.......... (4.06) -- (4.60) -- -------- -------- -------- -------- Total Distributions.... (4.06) (0.01) (4.63) -- -------- -------- -------- -------- Change in Net Asset Value.................. (6.89) 0.13 0.47 2.02 -------- -------- -------- -------- Net Asset Value, End of Period................. $ 21.25 $ 28.14 $ 28.01 $ 27.54 ======== ======== ======== ======== Total Return............ (11.60)% (0.50)%(d) 18.84% 7.92%(d) Ratios/Supplemental Data: Net Assets at end of period (000)........... $521,412 $694,107 $706,313 $786,462 Ratio of expenses to average net assets..... 1.10% 1.07%(e) 1.04% 1.04%(e) Ratio of net investment income to average net assets................. (0.01)% 0.00%(e) 0.11% 0.20%(e) Ratio of expenses to average net assets**... 1.26% 1.22%(e) 1.14% 1.09%(e) Portfolio turnover***... 10% 10% 15% 3%
/\ Formerly Institutional Shares. + Net investment income is based on average shares outstanding during the period. * Less than $0.005. ** During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. *** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Large-Cap Equity Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from December 14, 1998 (commencement on operations) through December 31, 1998. (d) Not annualized. (e) Annualized. See notes to financial statements 75 AMSOUTH FUNDS Schedule of Portfolio Investments Mid Cap Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks (90.8%)
Shares Value --------- ------- Cable Television (4.9%) Cablevision Systems Corp. -- Rainbow Media Group (b)......... 65,500 $ 1,693 Cox Communications, Inc., Class A (b)........................ 37,150 1,521 ------- 3,214 ------- Communications Equipment (5.2%) Comcast Corp., Special Class A (b)........................... 30,000 1,141 L-3 Communications Holdings, Inc. (b)........................ 30,000 2,238 ------- 3,379 ------- Computer Software & Services (19.3%) Affiliated Computer Services, Inc., Class A (b).............. 29,000 2,402 BEA Systems, Inc. (b)........................................ 53,300 1,175 Eclipsys Corp. (b)........................................... 110,000 2,923 International Game Technology (b)............................ 28,000 1,455 Parametric Technology Corp. (b).............................. 160,000 1,515 Peregrine Systems, Inc. (b).................................. 79,300 2,169 Veritas Software Corp. (b)................................... 24,175 1,025 ------- 12,664 ------- Data Processing & Reproduction (3.5%) Fiserv, Inc. (b)............................................. 40,000 2,295 ------- E-Commerce (3.0%) eBay, Inc. (b)............................................... 31,500 1,971 ------- Electronic Components (5.5%) Microchip Technology, Inc. (b)............................... 71,200 2,584 QLogic Corp. (b)............................................. 27,150 1,043 ------- 3,627 ------- Entertainment (2.6%) MGM Mirage, Inc. (b)......................................... 55,000 1,700 ------- Financial Services (8.9%) BB&T Corp.................................................... 60,000 2,214 National Commerce Financial Corp. ........................... 45,000 1,184 Washington Mutual, Inc. ..................................... 59,850 2,424 ------- 5,822 ------- Health Care (7.2%) Laboratory Corporation of America Holdings (b)............... 35,000 3,149 Tenet Healthcare Corp. (b)................................... 28,000 1,554 ------- 4,703 ------- Human Resources (3.8%) Robert Half International, Inc. (b).......................... 95,200 2,480 ------- Insurance (2.9%) XL Capital, Ltd. ............................................ 25,000 1,919 ------- Medical Equipment & Supplies (3.8%) Varian Medical Systems, Inc. (b)............................. 35,000 2,503 -------
Common Stocks, continued
Shares Value --------- ------- Oil & Gas Exploration, Production, & Services (4.9%) Nabors Industries, Inc. (b).................................. 32,200 $ 943 Shaw Group (The), Inc. (b)................................... 26,950 876 Smith International, Inc. (b)................................ 25,200 1,371 ------- 3,190 ------- Pharmaceuticals (4.2%) Forest Laboratories, Inc. (b)................................ 34,700 2,726 ------- Retail (8.0%) Barnes & Noble, Inc. (b)..................................... 51,400 2,015 Kohl's Corp. (b)............................................. 34,050 1,950 Tiffany & Co. ............................................... 36,000 1,271 ------- 5,236 ------- Schools & Educational Services (3.1%) Apollo Group, Inc. (b)....................................... 46,500 2,025 ------- TOTAL COMMON STOCKS.......................................... 59,454 ------- Investment Companies (8.6%) AmSouth Prime Money Market Fund.............................. 2,950,625 2,951 AmSouth U.S. Treasury Money Market Fund...................... 2,700,000 2,700 ------- TOTAL INVESTMENT COMPANIES................................... 5,651 ------- TOTAL INVESTMENTS (Cost $62,631) (a) -- 99.4%................................. 65,105 Other assets in excess of liabilities -- 0.6%................ 375 ------- NET ASSETS -- 100.0%......................................... $65,480 =======
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation.............................................. $ 6,064 Unrealized depreciation.............................................. (3,590) ------- Net unrealized appreciation.......................................... $ 2,474 =======
(b) Represents non-income producing security. See notes to financial statements 76 AMSOUTH FUNDS Mid Cap Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $62,631)......................... $ 65,105 Cash......................................................... 6 Interest and dividends receivable............................ 42 Receivable for capital shares issued......................... 29 Receivable for investments sold.............................. 1,825 Collateral for securities loaned, at fair value.............. 16,433 Prepaid expenses and other assets............................ 36 -------- Total Assets................................................ 83,476 Liabilities: Payable for investments purchased............................ $ 1,501 Payable for capital shares redeemed.......................... 8 Payable upon return of securities loaned..................... 16,433 Accrued expenses and other payables: Investment advisory fees.................................... 23 Administration fees......................................... 2 Shareholder servicing and distribution fees................. 16 Custodian fees.............................................. 2 Other....................................................... 11 ------- Total Liabilities........................................... 17,996 -------- Net Assets: Capital...................................................... 84,800 Accumulated net realized losses from investment transactions................................................ (21,794) Unrealized appreciation from investments..................... 2,474 -------- Net Assets................................................... $ 65,480 ======== Class A Shares Net Assets.................................................. $ 12,546 Shares outstanding.......................................... 1,040 Redemption price per share.................................. $ 12.06 ======== Class A Shares -- Maximum Sales Charge....................... 5.50% -------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)...................................................... $ 12.76 ======== Class B Shares Net Assets.................................................. $ 11,323 Shares outstanding.......................................... 957 Offering price per share*................................... $ 11.83 ======== Trust Shares (b) Net Assets.................................................. $ 41,611 Shares outstanding.......................................... 3,449 Offering and redemption price per share..................... $ 12.06 ========
* Redemption price per share varies by length of time shares are held. (a) Formerly ISG Mid-Cap Fund. (b) Formerly Institutional Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Dividend income................................................. $ 278 Securities lending income....................................... 48 -------- Total Investment Income........................................ 326 Expenses: Investment advisory fees........................................ $824 Administration fees............................................. 165 Distribution fees -- Class B Shares............................. 98 Shareholder servicing fees -- Class A Shares.................... 33 Shareholder servicing fees -- Class B Shares.................... 33 Shareholder servicing fees -- Trust Shares (b).................. 84 Custodian fees.................................................. 23 Accounting fees................................................. 15 Transfer agent fees............................................. 87 Other fees...................................................... 43 ---- Total expenses before fee reductions........................... 1,405 Expenses reduced by Administrator.............................. (41) Expenses reduced by Transfer Agent............................. (18) Expenses reduced by Distributor................................ (28) Expenses reduced by Fund Accountant............................ (9) -------- Net expenses................................................... 1,309 -------- Net Investment Loss............................................. (983) -------- Realized/Unrealized Losses from Investments: Net realized losses from investment transactions................ (17,839) Change in unrealized appreciation/depreciation from investments.................................................... (7,445) -------- Net realized/unrealized losses from investments................. (25,284) -------- Change in net assets resulting from operations.................. $(26,267) ========
See notes to financial statements 77 AMSOUTH FUNDS Mid Cap Fund (a) Statements of Changes in Net Assets
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 2000 (b) 1999 (c) ---------- ------------ ------------ (Amounts in thousands) From Investment Activities: Operations: Net investment loss...................... $ (983) $ (515) $ (155) Net realized losses from investment transactions............................ (17,839) (3,386) (570) Change in unrealized appreciation/depreciation from investments............................. (7,445) (2,489) 12,408 -------- ------- ------- Change in net assets resulting from operations............................... (26,267) (6,390) 11,683 -------- ------- ------- Change in net assets from capital transactions............................. 3,603 52,813 30,038 -------- ------- ------- Change in net assets...................... (22,664) 46,423 41,721 Net Assets: Beginning of period...................... 88,144 41,721 -- -------- ------- ------- End of period............................ $ 65,480 $88,144 $41,721 ======== ======= =======
(a) Formerly ISG Mid-Cap Fund. (b) For the period from January 1, 2000 through July 31, 2000. (c) For the period from May 4, 1999 (commencement of operations) through December 31, 1999. See notes to financial statements 78 AMSOUTH FUNDS Mid Cap Fund (a) Financial Highlights, Class A Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 + 2000 (b)+ 1999 (c)+ ---------- ------------ ------------ Net Asset Value, Beginning of Period.. $ 16.67 $ 17.33 $10.00 ------- ------- ------ Investment Activities Net investment loss.................. (0.17) (0.13) (0.14) Net realized and unrealized gains (losses) from investments........... (4.44) (0.53) 7.47 ------- ------- ------ Total from Investment Activities..... (4.61) (0.66) 7.33 ------- ------- ------ Change in Net Asset Value............. (4.61) (0.66) 7.33 ------- ------- ------ Net Asset Value, End of Period........ $ 12.06 $ 16.67 $17.33 ======= ======= ====== Total Return (excludes sales charge).. (27.65)% (3.81)%(d) 73.30%(d) Ratios/Supplemental Data: Net Assets at end of period (000)..... $12,546 $11,536 $2,357 Ratio of expenses to average net assets............................... 1.57% 1.62%(e) 2.28%(e) Ratio of net investment income to average net assets................... (1.17)% (1.27)%(e) (1.62)%(e) Ratio of expenses to average net assets*.............................. 1.65% 1.65%(e) 2.29%(e) Portfolio turnover**.................. 120% 39% 20%
+ Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Mid-Cap Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from May 4, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 + 2000 (b)+ 1999 (c)+ ---------- ------------ ------------ Net Asset Value, Beginning of Period.. $ 16.52 $ 17.28 $10.00 ------- ------- ------ Investment Activities Net investment loss.................. (0.27) (0.20) (0.19) Net realized and unrealized gains (losses) from investments........... (4.42) (0.56) 7.47 ------- ------- ------ Total from Investment Activities..... (4.69) (0.76) 7.28 ------- ------- ------ Change in Net Asset Value............. (4.69) (0.76) 7.28 ------- ------- ------ Net Asset Value, End of Period........ $ 11.83 $ 16.52 $17.28 ======= ======= ====== Total Return (excludes redemption charge).............................. (28.39)% (4.40)%(d) 72.80%(d) Ratios/Supplemental Data: Net Assets at end of period (000)..... $11,323 $12,912 $2,177 Ratio of expenses to average net assets............................... 2.32% 2.33%(e) 2.86%(e) Ratio of net investment income to average net assets................... (1.91)% (2.00)%(e) (2.17)%(e) Ratio of expenses to average net assets*.............................. 2.41% 2.37%(e) 2.86%(e) Portfolio turnover**.................. 120% 39% 20%
+ Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Mid-Cap Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from May 4, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 79 AMSOUTH FUNDS Mid Cap Fund (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 + 2000 (b)+ 1999 (c)+ ---------- ------------ ------------ Net Asset Value, Beginning of Period.. $ 16.70 $ 17.37 $ 10.00 ------- ------- ------- Investment Activities Net investment loss.................. (0.15) (0.11) (0.12) Net realized and unrealized gains (losses) from investments........... (4.49) (0.56) 7.49 ------- ------- ------- Total from Investment Activities..... (4.64) (0.67) 7.37 ------- ------- ------- Change in Net Asset Value............. (4.64) (0.67) 7.37 ------- ------- ------- Net Asset Value, End of Period........ $ 12.06 $ 16.70 $ 17.37 ======= ======= ======= Total Return.......................... (27.78)% (3.86)%(d) 73.70%(d) Ratios/Supplemental Data: Net Assets at end of period (000)..... $41,611 $63,696 $37,186 Ratio of expenses to average net assets............................... 1.42% 1.46%(e) 2.18%(e) Ratio of net investment income to average net assets................... (1.03)% (1.08)%(e) (1.47)%(e) Ratio of expenses to average net assets*.............................. 1.55% 1.53%(e) 2.18%(e) Portfolio turnover**.................. 120% 39% 20%
/\ Formerly Institutional Shares. + Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Mid-Cap Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from May 4, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 80 AMSOUTH FUNDS Schedule of Portfolio Investments Small Cap Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks (96.4%)
Shares Value --------- -------- Airlines (2.5%) Atlantic Coast Airlines Holdings, Inc. (b).................. 156,100 $ 4,535 -------- Casino Services (3.5%) Anchor Gaming (b)........................................... 52,900 2,750 Mandalay Resort Group (b)................................... 99,200 2,505 Shuffle Master, Inc. (b).................................... 72,100 1,260 -------- 6,515 -------- Computers & Peripherals (3.7%) Electronics for Imaging, Inc. (b)........................... 124,600 2,746 Jack Henry & Associates, Inc. .............................. 146,800 4,150 -------- 6,896 -------- Construction (7.7%) Beazer Homes USA, Inc. (b).................................. 24,300 1,773 Centex Corp. .............................................. 65,100 3,062 D. R. Horton, Inc. ......................................... 72,300 1,992 Lennar Corp. .............................................. 77,600 3,561 Pulte Homes, Inc. .......................................... 90,500 3,757 -------- 14,145 -------- Consulting Services (0.5%) MAXIMUS, Inc. (b)........................................... 22,000 975 -------- Educational Services (7.8%) Career Education Corp. (b).................................. 100,900 6,155 Corinthian Colleges, Inc. (b)............................... 94,000 4,363 Education Management Corp. (b).............................. 93,100 3,798 -------- 14,316 -------- Financial Services (7.8%) AmeriCredit Corp. (b)....................................... 58,800 3,616 Metris Co., Inc. ........................................... 52,500 1,822 New York Community Bancorp, Inc. ........................... 127,100 5,405 Roslyn Bancorp, Inc. ....................................... 57,600 1,728 UCBH Holdings, Inc. ........................................ 58,200 1,802 -------- 14,373 -------- Food Processing & Packaging (1.0%) Smithfield Foods, Inc. (b).................................. 40,900 1,800 -------- Hazardous Waste Disposal (1.8%) Stericycle, Inc. (b)........................................ 67,500 3,324 -------- Health Care (4.9%) Apria Healthcare Group, Inc. (b)............................ 78,500 1,864 First Health Group Corp. (b)................................ 201,500 5,358 LifePoint Hospitals, Inc. (b)............................... 41,500 1,777 -------- 8,999 -------- Manufacturing (6.2%) Alliant Techsystems, Inc. (b)............................... 6,000 595 BE Aerospace, Inc. (b)...................................... 64,300 1,194 Columbia Sportswear Co. (b)................................. 62,950 2,445 Direct Focus, Inc. (b)...................................... 101,700 4,912 PLATO Learning, Inc. (b).................................... 21,600 711 Precision Castparts Corp. ................................. 30,000 1,095 Quiksilver, Inc. (b)........................................ 20,800 438 -------- 11,390 --------
Common Stocks, continued
Shares Value --------- -------- Medical Equipment & Supplies (3.8%) Mentor Corp. ............................................... 76,200 $ 2,250 Varian Medical Systems, Inc. (b)............................ 65,900 4,712 -------- 6,962 -------- Medical Services (11.7%) AdvancePCS (b).............................................. 81,700 5,073 AmeriPath, Inc. (b)......................................... 79,400 2,384 AmSurg Corp. (b)............................................ 105,600 2,956 Beverly Enterprises, Inc. (b)............................... 136,100 1,422 DaVita, Inc. (b)............................................ 216,400 4,640 Henry Schein, Inc. (b)...................................... 136,100 5,035 -------- 21,510 -------- Oil & Gas Exploration, Production, & Services (7.5%) Energen Corp. .............................................. 20,800 530 Equitable Resources, Inc. ................................. 47,500 1,703 Key Energy Services, Inc. (b)............................... 71,700 667 Ocean Energy, Inc. ......................................... 108,100 2,123 Offshore Logistics, Inc. (b)................................ 92,900 1,798 Shaw Group (The), Inc. (b).................................. 112,700 3,662 Valero Energy Corp. ........................................ 52,400 1,850 Western Gas Resources, Inc. ............................... 50,900 1,513 -------- 13,846 -------- Pharmaceuticals (3.9%) First Horizon Pharmaceutical Corp. (b)...................... 36,500 1,250 Pharmaceutical Product Development, Inc. (b)................ 166,500 5,896 -------- 7,146 -------- Restaurants (0.7%) Ruby Tuesday, Inc. ......................................... 68,500 1,274 -------- Retail (16.5%) Chico's FAS, Inc. (b)....................................... 130,950 4,880 Christopher & Banks Corp. (b)............................... 27,800 745 Copart, Inc. (b)............................................ 161,900 4,595 Fleming Co., Inc............................................ 80,600 2,855 Genesco, Inc. (b)........................................... 118,200 3,847 Hot Topic, Inc. (b)......................................... 79,800 2,139 O'Reilly Automotive, Inc. (b)............................... 115,800 4,041 Oakley, Inc. (b)............................................ 230,500 4,310 Pathmark Stores, Inc. (b)................................... 73,000 1,810 Skechers U.S.A., Inc. (b)................................... 52,200 1,101 -------- 30,323 -------- Semiconductors (1.3%) Ultratech Stepper, Inc. (b)................................. 105,200 2,421 -------- Telecom Services (3.6%) Lightbridge, Inc. (b)....................................... 20,100 217 Metro One Telecommunications, Inc. (b)...................... 104,200 3,961 UTStarcom, Inc. (b)......................................... 119,200 2,465 -------- 6,643 -------- TOTAL COMMON STOCKS......................................... 177,393 --------
Continued 81 AMSOUTH FUNDS Schedule of Portfolio Investments Small Cap Fund July 31, 2001 (Amounts in thousands, except shares) Investment Companies (3.8%)
Shares Value --------- -------- AmSouth Prime Money Market Fund............................. 7,004,574 $ 7,005 -------- TOTAL INVESTMENT COMPANIES.................................. 7,005 -------- TOTAL INVESTMENTS (Cost $164,802) (a) -- 100.2%.............................. 184,398 Liabilities in excess of other assets -- (0.2%)........................................... (342) -------- NET ASSETS -- 100.0%........................................ $184,056 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation.............................................. $26,296 Unrealized depreciation.............................................. (6,700) ------- Net unrealized appreciation.......................................... $19,596 =======
(b) Represents non-income producing security. See notes to financial statements 82 AMSOUTH FUNDS Small Cap Fund Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $164,802)........................ $184,398 Interest and dividends receivable............................ 17 Receivable for capital shares issued......................... 27 Collateral for securities loaned, at fair value.............. 28,396 Prepaid expenses and other assets............................ 11 -------- Total Assets................................................ 212,849 Liabilities: Payable for investments purchased............................ $ 260 Payable for capital shares redeemed.......................... 9 Payable upon return of securities loaned..................... 28,396 Accrued expenses and other payables: Investment advisory fees.................................... 72 Administration fees......................................... 5 Shareholder servicing and distribution fees................. 19 Custodian fees.............................................. 4 Other....................................................... 28 ------- Total Liabilities........................................... 28,793 -------- Net Assets: Capital...................................................... 195,778 Accumulated net realized losses from investment transactions................................................ (31,318) Unrealized appreciation from investments..................... 19,596 -------- Net Assets................................................... $184,056 ======== Class A Shares (a) Net Assets.................................................. $ 8,346 Shares outstanding.......................................... 825 Redemption price per share.................................. $ 10.12 ======== Class A Shares -- Maximum Sales Charge....................... 5.50% -------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net assets value adjusted to the nearest cent)...................................................... $ 10.71 ======== Class B Shares Net Assets.................................................. $ 2,975 Shares outstanding.......................................... 302 Offering price per share*................................... $ 9.85 ======== Trust Shares (b) Net Assets.................................................. $172,735 Shares outstanding.......................................... 16,902 Offering and redemption price per share..................... $ 10.22 ========
* Redemption price per share varies by length of time shares are held. (a) Formerly Classic Shares. (b) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income............................................... $ 100 Dividend income............................................... 553 Securities lending income..................................... 57 -------- Total Investment Income...................................... 710 Expenses: Investment advisory fees...................................... $2,200 Administration fees........................................... 367 Distribution fees -- Class B Shares........................... 23 Shareholder servicing fees -- Class A Shares (a)................................................... 24 Shareholder servicing fees -- Class B Shares.................. 8 Shareholder servicing fees -- Trust Shares (b)................ 256 Custodian fees................................................ 50 Accounting fees............................................... 33 Transfer agent fees........................................... 78 Other fees.................................................... 66 ------ Total expenses before fee reductions......................... 3,105 Expenses reduced by Investment Advisor....................... (183) Expenses reduced by Administrator............................ (92) Expenses reduced by Transfer Agent........................... (2) Expenses reduced by Distributor.............................. (85) Expenses reduced by Fund Accountant.......................... (21) -------- Net expenses................................................. 2,722 -------- Net Investment Loss........................................... (2,012) -------- Realized/Unrealized Gains (Losses) from Investments: Net realized losses from investment transactions.............. (30,693) Change in unrealized appreciation/depreciation from investments.................................................. 12,883 -------- Net realized/unrealized losses from investments............... (17,810) -------- Change in net assets resulting from operations................ $(19,822) ========
See notes to financial statements 83 AMSOUTH FUNDS Small Cap Fund Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment loss..................................... $ (2,012) $ (860) Net realized gains (losses) from investment transactions........................................... (30,693) 23,232 Change in unrealized appreciation/depreciation from investments............................................ 12,883 (16,813) -------- -------- Change in net assets resulting from operations........... (19,822) 5,559 -------- -------- Distributions to Class A Shareholders (a): From net realized gains on investment transactions...... (901) -- Distributions to Class B Shareholders: From net realized gains on investment transactions...... (326) -- Distributions to Trust Shareholders (b): From net realized gains on investment transactions...... (16,743) -- -------- -------- Change in net assets from shareholder distributions...... (17,970) -- -------- -------- Change in net assets from capital transactions........... 48,606 143,904 -------- -------- Change in net assets..................................... 10,814 149,463 Net Assets: Beginning of period..................................... 173,242 23,779 -------- -------- End of period........................................... $184,056 $173,242 ======== ========
(a) Formerly Classic Shares. (b) Formerly Premier Shares. See notes to financial statements 84 AMSOUTH FUNDS Small Cap Fund Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period........................ $ 12.52 $ 8.40 $ 9.14 $ 9.97 ------- ------ ------ ------ Investment Activities Net investment loss........... (0.14) (0.08) (0.10) (0.03) Net realized and unrealized gains (losses) from investments.................. (1.05) 4.20 (0.64) (0.80) ------- ------ ------ ------ Total from Investment Activities................... (1.19) 4.12 (0.74) (0.83) ------- ------ ------ ------ Distributions Net realized gains from investment transactions...... (1.21) -- -- -- ------- ------ ------ ------ Total Distributions........... (1.21) -- -- -- ------- ------ ------ ------ Change in Net Asset Value...... (2.40) 4.12 (0.74) (0.83) ------- ------ ------ ------ Net Asset Value, End of Period........................ $ 10.12 $12.52 $ 8.40 $ 9.14 ======= ====== ====== ====== Total Return (excludes sales charge)....................... (10.33)% 49.05% (8.10)% (8.31)%(b) Ratios/Supplemental Data: Net Assets at end of period (000)......................... $ 8,346 $8,408 $1,073 $1,372 Ratio of expenses to average net assets.................... 1.61% 1.53% 1.66% 1.78%(c) Ratio of net investment income to average net assets......... (1.22)% (1.11)% (1.07)% (0.92)%(c) Ratio of expenses to average net assets*................... 1.77% 1.85% 2.68% 4.23%(c) Portfolio turnover**........... 220% 318% 208% 71%
/\ Formerly Classic Shares. + Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from March 2, 1998 (commencement of operations) through July 31, 1998. (b) Not annualized. (c) Annualized. See notes to financial statements 85 AMSOUTH FUNDS Small Cap Fund Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period........................ $ 12.31 $ 8.31 $ 9.11 $10.00 ------- ------ ------ ------ Investment Activities Net investment loss........... (0.22) (0.14) (0.14) (0.04) Net realized and unrealized gains (losses) from investments.................. (1.03) 4.14 (0.66) (0.85) ------- ------ ------ ------ Total from Investment Activities................... (1.25) 4.00 (0.80) (0.89) ------- ------ ------ ------ Distributions Net realized gains from investment transactions...... (1.21) -- -- -- ------- ------ ------ ------ Total Distributions........... (1.21) -- -- -- ------- ------ ------ ------ Change in Net Asset Value...... (2.46) 4.00 (0.80) (0.89) ------- ------ ------ ------ Net Asset Value, End of Period........................ $ 9.85 $12.31 $ 8.31 $ 9.11 ======= ====== ====== ====== Total Return (excludes redemption charge)............ (11.03)% 48.13% (8.78)% (8.90)%(b) Ratios/Supplemental Data: Net Assets at end of period (000)......................... $ 2,975 $2,619 $ 929 $ 871 Ratio of expenses to average net assets.................... 2.36% 2.39% 2.41% 2.54%(c) Ratio of net investment income to average net assets......... (1.97)% (1.99)% (1.83)% (1.69)%(c) Ratio of expenses to average net assets*................... 2.52% 2.59% 3.42% 4.98%(c) Portfolio turnover**........... 220% 318% 208% 71%
+ Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from March 2, 1998 (commencement of operations) through July 31, 1998. (b) Not annualized. (c) Annualized. See notes to financial statements 86 AMSOUTH FUNDS Small Cap Fund Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period...................... $ 12.61 $ 8.44 $ 9.15 $10.00 -------- -------- ------- ------ Investment Activities Net investment loss......... (0.12) (0.07) (0.03) (0.02) Net realized and unrealized gains (losses) from investments................ (1.06) 4.24 (0.68) (0.83) -------- -------- ------- ------ Total from Investment Activities................. (1.18) 4.17 (0.71) (0.85) -------- -------- ------- ------ Distributions Net realized gains from investment transactions.... (1.21) -- -- -- -------- -------- ------- ------ Total Distributions......... (1.21) -- -- -- -------- -------- ------- ------ Change in Net Asset Value.... (2.39) 4.17 (0.71) (0.85) -------- -------- ------- ------ Net Asset Value, End of Period...................... $ 10.22 $ 12.61 $ 8.44 $ 9.15 ======== ======== ======= ====== Total Return................. (10.16)% 49.41% (7.76)% (8.48)%(b) Ratios/Supplemental Data: Net Assets at end of period (000)....................... $172,735 $162,215 $21,777 $5,072 Ratio of expenses to average net assets.................. 1.46% 1.42% 1.39% 1.50%(c) Ratio of net investment income to average net assets...................... (1.07)% (1.01)% (0.82)% (0.52)%(c) Ratio of expenses to average net assets*................. 1.67% 1.70% 2.38% 3.94%(c) Portfolio turnover**......... 220% 318% 208% 71%
/\ Formerly Premier Shares. + Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from March 2, 1998 (commencement of operations) through July 31, 1998. (b) Not annualized. (c) Annualized. See notes to financial statements 87 AMSOUTH FUNDS Schedule of Portfolio Investments Equity Income Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks & Securities Convertible to Common Stocks (98.0%)
Shares or Principal Amount Value --------- -------- Consumer Discretionary (13.1%) Costco Co., 0.00%, CVT. BD., 8/19/02........................ $ 3,380 $ 3,397 Ford Motor Co............................................... 129,600 3,301 Limited (The), Inc.......................................... 104,000 1,765 Omnicom Group, 2.25%, CVT. BD., 1/6/13...................... $ 1,660 3,017 Tiffany & Co................................................ 74,000 2,612 Tribune Co./AOL, 2.00%, CVT. BD., 5/15/29................... $ 26 2,762 Walt Disney (The) Co........................................ 101,000 2,661 -------- 19,515 -------- Consumer Staples (7.4%) Anheuser-Busch Cos., Inc.................................... 80,800 3,499 Estee Lauder, 6.25%, CVT. PFD., 2/23/02..................... 29,500 2,235 Quaker Oats Co.............................................. 28,900 2,543 Suiza Capital Trust II, 5.50%, CVT. PFD., 4/1/28............ 63,500 2,675 -------- 10,952 -------- Energy (6.5%) Chevron Corp................................................ 28,000 2,559 EOG Resources, 7.00%, CVT. PFD., 7/31/02.................... 112,300 3,543 Exxon Mobil Corp............................................ 85,486 3,570 -------- 9,672 -------- Finance (17.3%) American Express Co......................................... 76,000 3,065 American International Group, Inc........................... 20,300 1,690 Citigroup, Inc.............................................. 93,837 4,713 J.P. Morgan Chase & Co...................................... 75,622 3,274 Lehman Brothers Holdings, Inc............................... 48,100 3,463 Merrill Lynch & Co., Inc.................................... 48,200 2,614 Metlife Capital Trust I, 8.00%, CVT. PFD., 5/15/03.......... 29,100 2,730 Washington Mutual, Inc., 8.00%, CVT. PFD., 8/16/04 (PIES)... 46,050 4,192 -------- 25,741 -------- Health Care (13.4%) Abbott Laboratories......................................... 56,600 3,033 Amerisource Health Corp., 5.00%, CVT. BD., 12/1/07.......... $ 2,590 3,412 Johnson & Johnson........................................... 57,174 3,093 Merck & Co., Inc............................................ 49,000 3,331 Pfizer, Inc................................................. 69,900 2,881 Pharmacia Corp., 6.50%, CVT. PFD., 11/30/01................. 57,900 2,322 Schering-Plough Corp........................................ 45,750 1,787 -------- 19,859 -------- Industrials (10.9%) General Electric Co......................................... 65,600 2,854 Honeywell International, Inc................................ 67,000 2,470 Illinois Tool Works, Inc.................................... 38,300 2,413 L-3 Communications, Inc., 5.25%, CVT. BD., 6/1/09........... $ 3,150 3,591 Raytheon Co., 8.25%, CVT. PFD., 5/15/06..................... 48,800 2,574
continued
Shares or Principal Amount Value --------- -------- Industrials, continued W.W. Grainger, Inc......................................... 53,000 $ 2,231 -------- 16,133 -------- Materials (2.4%) Rohm & Haas Co............................................. 102,800 3,530 -------- Technology (17.6%) Affiliated Computer Services, 3.50%, CVT. BD., 2/15/06..... $ 3,025 3,529 Amdocs, Ltd., 6.75%, CVT. PFD., 9/11/02.................... 74,450 2,971 Burr-Brown Corp./TXN, 4.25%, CVT. BD., 2/15/07............. $ 1,635 1,864 Dell Computer Corp. (b).................................... 74,100 1,996 Electronic Data Systems, 7.63%, CVT. PFD., 8/17/04......... 63,000 3,383 Microsoft Corp. (b)........................................ 43,000 2,846 Peregrine Systems, Inc., 5.50%, CVT. BD., 11/15/07......... $ 1,950 2,596 Semtech Corp., 4.50%, CVT. BD., 2/1/07..................... $ 2,610 2,838 Solectron Corp. (b)........................................ 37,900 662 Solectron Corp., 0.00%, CVT. BD., 5/8/20................... $ 4,350 2,213 Texas Instruments, Inc..................................... 31,480 1,086 -------- 25,984 -------- Telecom Services (5.9%) BellSouth Corp............................................. 64,600 2,629 Qwest Trends Trust, 5.75%, CVT. PFD., 11/17/03 (c)......... 64,400 3,011 SBC Communications, Inc.................................... 70,750 3,186 -------- 8,826 -------- Utilities (3.5%) Calpine Capital Trust II, 5.50%, CVT. PFD., 2/1/05......... 35,200 2,693 Nisource, Inc., 7.75%, CVT. PFD., 2/19/03 (PIES)........... 52,200 2,561 -------- 5,254 -------- TOTAL COMMON STOCKS & SECURITIES CONVERTIBLE TO COMMON STOCKS.................................................... $145,466 --------
Continued 88 AMSOUTH FUNDS Schedule of Portfolio Investments Equity Income Fund July 31, 2001 (Amounts in thousands, except shares) Investment Companies (1.4%)
Shares or Principal Amount Value --------- -------- AmSouth Prime Money Market Fund............................. 576,987 $ 577 S & P 500 Depositary Receipt................................ 12,200 1,480 -------- TOTAL INVESTMENT COMPANIES.................................. 2,057 -------- TOTAL INVESTMENTS (Cost $146,774) (a) -- 99.4%............................... 147,523 Other assets in excess of liabilities -- 0.6%........................................ 932 -------- NET ASSETS -- 100.0%........................................ $148,455 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation.............................................. $ 7,930 Unrealized depreciation.............................................. (7,181) ------- Net unrealized appreciation.......................................... $ 749 =======
(b) Represents a non-income producing security. (c) Represents a restricted security, purchased under Rule 144A, which is exempt from registration under the Security Act of 1933, as amended. These securities have been deemed liquid under guidelines established by the Board of Trustees. PIES -- Premium Income Equity Securities CVT. BD. -- Convertible Bond CVT. PFD. -- Convertible Preferred Stock
Number of Contracts Value --------- ----- Written options outstanding at July 31, 2001: Covered Call Options: Microsoft Corp. (strike price $80 per share, expires on 8/20/01)...................................................... 225 $(1) --- Total written covered call options (premium received $30)....... $(1) ===
Breakdown of Sectors (as a % of net assests) -------------------------------------------- --- Common Stocks......................................................... 54.8% Convertible Preferred Stocks.......................................... 23.5% Convertible Bonds..................................................... 19.7% Investment Companies.................................................. 1.4% ---- Total................................................................. 99.4% ====
See notes to financial statements 89 AMSOUTH FUNDS Equity Income Fund Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $146,774)........................ $147,523 Interest and dividends receivable............................ 302 Receivable for capital shares issued......................... 24 Receivable for investments sold.............................. 7,667 Collateral for securities loaned, at fair value.............. 31,495 Prepaid expenses and other assets............................ 10 -------- Total Assets................................................ 187,021 Liabilities: Options written, at value (premiums received $30)............ $ 1 Payable for investments purchased............................ 6,813 Payable for capital shares redeemed.......................... 150 Payable upon return of securities loaned..................... 31,495 Accrued expenses and other payables: Investment advisory fees.................................... 42 Administration fees......................................... 4 Shareholder servicing and distribution fees................. 40 Custodian fees.............................................. 4 Other....................................................... 17 ------- Total Liabilities........................................... 38,566 -------- Net Assets: Capital...................................................... 169,006 Distributions in excess of net investment income............. (3) Accumulated net realized losses from investment transactions................................................ (21,326) Unrealized appreciation from investments and option contracts................................................... 778 -------- Net Assets................................................... $148,455 ======== Class A Shares (a) Net Assets.................................................. $ 42,699 Shares outstanding.......................................... 3,417 Redemption price per share.................................. $ 12.50 ======== Class A Shares -- Maximum Sales Charge....................... 5.50% -------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)...................................................... $ 13.23 ======== Class B Shares Net Assets.................................................. $ 28,678 Shares outstanding.......................................... 2,309 Offering price per share*................................... $ 12.42 ======== Trust Shares (b) Net Assets.................................................. $ 77,078 Shares outstanding.......................................... 6,164 Offering and redemption price per share..................... $ 12.51 ========
* Redemption price per share varies by length of time shares are held. (a) Formerly Classic Shares. (b) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income.......................................... $ 2,501 Dividend income.......................................... 1,891 Securities lending income................................ 26 -------- Total Investment Income................................. 4,418 Expenses: Investment advisory fees................................. $1,400 Administration fees...................................... 350 Distribution fees -- Class B Shares...................... 233 Shareholder servicing fees -- Class A Shares (a)......... 98 Shareholder servicing fees -- Class B Shares............. 78 Shareholder servicing fees -- Trust Shares (b)........... 157 Custodian fees........................................... 48 Accounting fees.......................................... 25 Transfer agent fees...................................... 92 Other fees............................................... 61 ------ Total expenses before fee reductions/reimbursements..... 2,542 Expenses reduced/reimbursed by Investment Advisor....... (5) Expenses reduced by Administrator....................... (88) Expenses reduced by Transfer Agent...................... (4) Expenses reduced by Distributor......................... (52) Expenses reduced by Fund Accountant..................... (19) -------- Net expenses............................................ 2,374 -------- Net Investment Income.................................... 2,044 -------- Realized/Unrealized Losses from Investments: Net realized losses from investment transactions and option contracts........................................ (18,316) Change in unrealized appreciation/depreciation from investments and option contracts........................ (7,979) -------- Net realized/unrealized losses on investments............ (26,295) -------- Change in net assets resulting from operations........... $(24,251) ========
See notes to financial statements 90 AMSOUTH FUNDS Equity Income Fund Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................... $ 2,044 $ 1,096 Net realized losses from investment transactions and option contracts....................................... (18,316) (1,441) Change in unrealized appreciation/depreciation from investments and option contracts....................... (7,979) 4,396 -------- -------- Change in net assets resulting from operations........... (24,251) 4,051 -------- -------- Distributions to Class A Shareholders (a): From net investment income.............................. (511) (317) From net realized gains on investment transactions...... -- (1,241) Distributions to Class B Shareholders: From net investment income.............................. (211) (64) From net realized gains on investment transactions...... -- (485) Distributions to Trust Shareholders (b): From net investment income.............................. (1,515) (600) From net realized gains on investment transactions...... -- (796) -------- -------- Change in net assets from shareholder distributions...... (2,237) (3,503) -------- -------- Change in net assets from capital transactions........... 468 133,574 -------- -------- Change in net assets..................................... (26,020) 134,122 Net Assets: Beginning of period..................................... 174,475 40,353 -------- -------- End of period........................................... $148,455 $174,475 ======== ========
(a) Formerly Classic Shares. (b) Formerly Premier Shares. See notes to financial statements 91 AMSOUTH FUNDS Equity Income Fund Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) 1997 (b) ---------- ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period.... $ 14.56 $ 13.10 $ 11.89 $ 11.72 $ 10.00 ------- ------- ------- ------- ------- Investment Activities Net investment income.. 0.17 0.17 0.17 0.24 0.07 Net realized and unrealized gains (losses) from investments........... (2.05) 2.26 1.46 0.59 1.71 ------- ------- ------- ------- ------- Total from Investment Activities............ (1.88) 2.43 1.63 0.83 1.78 ------- ------- ------- ------- ------- Distributions Net investment income.. (0.18) (0.16) (0.16) (0.25) (0.06) Net realized gains from investment transactions.......... -- (0.81) (0.26) (0.41) -- ------- ------- ------- ------- ------- Total Distributions.... (0.18) (0.97) (0.42) (0.66) (0.06) ------- ------- ------- ------- ------- Change in Net Asset Value.................. (2.06) 1.46 1.21 0.17 1.72 ------- ------- ------- ------- ------- Net Asset Value, End of Period................. $ 12.50 $ 14.56 $ 13.10 $ 11.89 $ 11.72 ======= ======= ======= ======= ======= Total Return (excludes sales charge).......... (12.96)% 19.12% 14.17% 7.29% 17.81%(c) Ratios/Supplemental Data: Net Assets at end of period (000)........... $42,699 $39,201 $21,526 $26,686 $22,273 Ratio of expenses to average net assets..... 1.31% 1.38% 1.41% 1.42% 1.30%(d) Ratio of net investment income to average net assets................. 1.22% 1.22% 1.37% 2.03% 2.13%(d) Ratio of expenses to average net assets*.... 1.38% 1.45% 1.58% 1.57% 1.51%(d) Portfolio turnover**.... 209% 168% 134% 83% 27%
/\ Formerly Classic Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. (b) For the period from March 20, 1997 (commencement of operations) through July 31, 1997. (c) Not annualized. (d) Annualized. See notes to financial statements 92 AMSOUTH FUNDS Equity Income Fund Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period......................... $ 14.48 $ 13.05 $11.86 $11.60 ------- ------- ------ ------ Investment Activities Net investment income.......... 0.07 0.07 0.07 0.15 Net realized and unrealized gains (losses) from investments................... (2.04) 2.24 1.47 0.68 ------- ------- ------ ------ Total from Investment Activities.................... (1.97) 2.31 1.54 0.83 ------- ------- ------ ------ Distributions Net investment income.......... (0.09) (0.07) (0.09) (0.16) Net realized gains from investment transactions....... -- (0.81) (0.26) (0.41) ------- ------- ------ ------ Total Distributions............ (0.09) (0.88) (0.35) (0.57) ------- ------- ------ ------ Change in Net Asset Value....... (2.06) 1.43 1.19 0.26 ------- ------- ------ ------ Net Asset Value, End of Period.. $ 12.42 $ 14.48 $13.05 $11.86 ======= ======= ====== ====== Total Return (excludes redemption charge)............. (13.64)% 18.24% 13.34% 7.26%(b) Ratios/Supplemental Data: Net Assets at end of period (000).......................... $28,678 $28,153 $7,919 $7,733 Ratio of expenses to average net assets......................... 2.05% 2.09% 2.16% 2.19%(c) Ratio of net investment income to average net assets.......... 0.49% 0.49% 0.61% 1.29%(c) Ratio of expenses to average net assets*........................ 2.13% 2.20% 2.33% 2.35%(c) Portfolio turnover**............ 209% 168% 134% 83%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from September 3, 1997 (commencement of operations) through July 31, 1998. (b) Not annualized. (c) Annualized. See notes to financial statements 93 AMSOUTH FUNDS Equity Income Fund Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period......................... $ 14.57 $ 13.10 $ 11.89 $11.35 ------- -------- ------- ------ Investment Activities Net investment income.......... 0.19 0.20 0.19 0.25 Net realized and unrealized gains (losses) from investments................... (2.05) 2.27 1.47 0.95 ------- -------- ------- ------ Total from Investment Activities.................... (1.86) 2.47 1.66 1.20 ------- -------- ------- ------ Distributions Net investment income.......... (0.20) (0.19) (0.19) (0.25) Net realized gains from investment transactions....... -- (0.81) (0.26) (0.41) ------- -------- ------- ------ Total Distributions............ (0.20) (1.00) (0.45) (0.66) ------- -------- ------- ------ Change in Net Asset Value....... (2.06) 1.47 1.21 0.54 ------- -------- ------- ------ Net Asset Value, End of Period.. $ 12.51 $ 14.57 $ 13.10 $11.89 ======= ======== ======= ====== Total Return.................... (12.88)% 19.55% 14.43% 7.54%(b) Ratios/Supplemental Data: Net Assets at end of period (000).......................... $77,078 $107,121 $10,908 $8,087 Ratio of expenses to average net assets......................... 1.17% 1.19% 1.16% 1.19%(c) Ratio of net investment income to average net assets.......... 1.38% 1.35% 1.59% 2.34%(c) Ratio of expenses to average net assets*........................ 1.28% 1.32% 1.33% 1.35%(c) Portfolio turnover**............ 209% 168% 134% 83%
/\ Formerly Premier Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. (b) Represents total return based on the activity of Classic Shares for the period from August 1, 1997 to September 1, 1997 and the activity of Premier Shares for the period from September 2, 1997 to July 31, 1998. Total return for the Premier Shares for the period from September 2, 1997 (commencement of operations) through July 31, 1998 was 10.82%. (c) Annualized. See notes to financial statements 94 AMSOUTH FUNDS Schedule of Portfolio Investments Balanced Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks (49.4%)
Shares or Principal Amount Value ---------- -------- Automotive (0.0%) Ford Motor Co. ........................................... 8 $ --* -------- Banking (1.6%) Bank of America Corp. .................................... 10,000 636 First Union Corp. ........................................ 15,000 531 U.S. Bancorp.............................................. 37,770 896 Wells Fargo & Co. ........................................ 13,450 620 -------- 2,683 -------- Business Services (1.2%) Modis Professional Services, Inc. (b)..................... 61,500 392 Reynolds & Reynolds Co., Class A.......................... 73,000 1,671 -------- 2,063 -------- Chemicals -- Speciality (2.0%) Engelhard Corp. .......................................... 130,000 3,387 -------- Computer Hardware (1.3%) Compaq Computer Corp. .................................... 40,000 598 IBM Corp. ................................................ 15,000 1,578 -------- 2,176 -------- Computer Software & Services (3.6%) Automatic Data Processing, Inc. .......................... 15,130 771 Cabletron Systems, Inc. (b)............................... 100,000 1,857 Cisco Systems, Inc. (b)................................... 29,840 574 Computer Associates International, Inc. .................. 40,000 1,379 EMC Corp. (b)............................................. 18,410 363 McDATA Corp. ............................................. 338 6 Microsoft Corp. (b)....................................... 17,040 1,128 -------- 6,078 -------- Diversified Manufacturing (1.0%) General Electric Co. ..................................... 18,940 824 Tyco International, Ltd. ................................. 16,580 882 -------- 1,706 -------- Electrical & Electronic (1.1%) Avnet, Inc. .............................................. 79,000 1,887 -------- Financial Services (3.7%) Citigroup, Inc. .......................................... 17,650 886 Moody's Corp. ............................................ 45,000 1,497 Washington Mutual, Inc. .................................. 93,750 3,799 -------- 6,182 -------- Food Products, Processing & Packaging (1.6%) Sara Lee Corp. ........................................... 46,000 928 Sensient Technologies Corp. .............................. 46,000 943 SYSCO Corp. .............................................. 31,650 849 -------- 2,720 -------- Forest & Paper Products (2.6%) International Paper Co. .................................. 35,000 1,430 Weyerhaeuser Co. ......................................... 15,000 896 Willamette Industries, Inc. .............................. 40,000 1,988 -------- 4,314 -------- Health Care (1.1%) Cardinal Health, Inc. .................................... 13,245 975
Common Stocks, continued
Shares or Principal Amount Value ---------- -------- Health Care, continued Health Management Assoc., Inc., Class A (b) .............................................. 35,000 $ 692 Johnson & Johnson.......................................... 3,380 183 -------- 1,850 -------- Insurance (4.1%) ACE Ltd. .................................................. 10,000 349 American International Group, Inc. ........................ 9,700 808 Chubb Corp. ............................................... 20,000 1,403 Marsh & McLennan Cos., Inc. ............................... 15,000 1,506 St. Paul Cos., Inc. ....................................... 60,000 2,631 -------- 6,697 -------- Media (0.6%) McGraw Hill Cos., Inc. .................................... 15,250 936 -------- Medical Supplies (3.0%) Apogent Technologies, Inc. (b)............................. 43,450 1,045 C.R. Bard, Inc. ........................................... 44,200 2,614 DENTSPLY International, Inc. .............................. 30,000 1,329 -------- 4,988 -------- Newspapers (1.2%) Gannett Co., Inc. ......................................... 30,000 2,011 -------- Oil & Gas Exploration, Production, & Services (8.2%) Burlington Resources, Inc. ................................ 37,200 1,609 Kerr-McGee Corp. .......................................... 30,000 1,895 Noble Affiliates........................................... 25,000 907 Sunoco, Inc. .............................................. 65,000 2,248 Texaco, Inc. .............................................. 45,000 3,115 Ultramar Diamond Shamrock Corp. ........................... 30,000 1,418 USX-Marathon Group......................................... 83,000 2,462 -------- 13,654 -------- Pharmaceuticals (3.2%) Baxter International, Inc. ................................ 50,000 2,491 Merck & Co., Inc. ......................................... 10,730 729 Pfizer, Inc. .............................................. 9,230 380 Pharmacia Corp. ........................................... 40,000 1,785 -------- 5,385 -------- Retail (2.3%) CVS Corp. ................................................. 20,000 720 Home Depot, Inc. .......................................... 16,890 852 May Department Stores Co. ................................. 25,500 847 Safeway, Inc. (b).......................................... 3,770 166 Wal-Mart Stores, Inc. ..................................... 7,890 441 Walgreen Co. .............................................. 22,180 747 -------- 3,773 -------- Semiconductors (0.5%) Intel Corp. ............................................... 28,010 835 -------- Telecommunications -- Equipment (0.1%) Lucent Technologies, Inc. ................................. 20,000 134 -------- Telecommunications -- Wireless (0.1%) AT&T Wireless Services Inc. (b)............................ 11,263 211 --------
Continued 95 AMSOUTH FUNDS Schedule of Portfolio Investments Balanced Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks, continued
Shares or Principal Amount Value ---------- -------- Transportation Leasing & Trucking (0.6%) US Freightways Corp. ...................................... 28,000 $ 967 -------- Utilities -- Electric & Gas (3.0%) Constellation Energy Group................................. 35,000 1,030 Mirant Corp. (b)........................................... 31,809 984 Southern Co. .............................................. 80,000 1,880 Xcel Energy, Inc. ......................................... 38,750 1,044 -------- 4,938 -------- Utilities -- Telecommunications (1.7%) AT&T Corp. ................................................ 35,000 707 Verizon Communications..................................... 38,400 2,080 -------- 2,787 -------- TOTAL COMMON STOCKS........................................ 82,362 -------- Corporate Bonds (20.8%) Banking (2.2%) SunTrust Banks, Inc., 7.38%, 7/1/06........................ $ 2,000 2,143 Wachovia Corp., 6.63%, 11/15/06............................ 1,475 1,532 -------- 3,675 -------- Brokerage Services (2.6%) Bear Stearns & Co., Inc., 6.50%, 8/1/02.................... 2,000 2,044 Morgan Stanley Group, Inc., 8.10%, 6/24/02................. 2,000 2,071 -------- 4,115 -------- Consumer Goods (1.2%) Procter & Gamble Co., 5.25%, 9/15/03....................... 2,000 2,035 -------- Data Processing/Management (1.9%) First Data Corp., 6.75%, 7/15/05........................... 3,000 3,135 -------- Diversified Manufacturing (1.5%) Avnet Inc., 6.45%, 8/15/03................................. 2,500 2,497 -------- Electronic Components/ Instruments (1.2%) Honeywell, Inc., 6.75%, 3/15/02............................ 2,000 2,031 -------- Financial Services (0.6%) Commercial Credit Co., 7.88%, 7/15/04...................... 1,000 1,080 -------- Forest & Paper Products (0.6%) Mead Corp., 6.60%, 3/1/02.................................. 1,000 1,012 -------- Industrial Goods & Services (2.4%) Caterpillar Financial Services, 6.02%, 4/15/02............................................ 2,000 2,032 Illinois Tool Works, 5.75%, 3/1/09......................... 2,000 1,978 -------- 4,010 -------- Oil & Gas Exploration, Production, & Services (0.9%) Conoco Inc., 6.35%, 4/15/09................................ 1,500 1,518 -------- Retail (2.4%) Sears, Roebuck and Co., 6.00%, 3/20/03..................... 2,000 2,035 Wal-Mart Stores, Inc., 6.75%, 5/15/02...................... 2,000 2,041 -------- 4,076 -------- Tools (1.4%) Stanley Works, 7.38%, 12/15/02............................. 2,200 2,286 --------
Corporate Bonds, continued
Shares or Principal Amount Value ---------- -------- Utilities -- Telecommunications (1.9%) AT&T Corp., 7.13%, 1/15/02................................. $ 1,000 $ 1,011 BellSouth Telecommunications, 6.00%, 6/15/02............................................ 2,200 2,232 -------- 3,243 -------- TOTAL CORPORATE BONDS...................................... 34,713 -------- Municipal Bonds (2.4%) Illinois (2.4%) Chicago Public Building, 7.00%, 1/1/06..................... 3,800 4,043 -------- TOTAL MUNICIPAL BONDS...................................... 4,043 -------- U.S. Government Agencies (12.1%) Fannie Mae (3.1%) 6.21%, 11/7/07............................................. 5,000 5,235 -------- Freddie Mac (4.4%) 5.83%, 2/9/06.............................................. 7,000 7,212 -------- Government National Mortgage Assoc. (4.6%) 6.50%, 11/20/28............................................ 7,613 7,644 -------- TOTAL U.S. GOVERNMENT AGENCIES............................. 20,091 -------- U.S. Treasury Bonds (10.8%) 7.50%, 11/15/16............................................ 8,000 9,630 7.25%, 8/15/22............................................. 7,000 8,400 -------- TOTAL U.S. TREASURY BONDS.................................. 18,030 -------- U.S. Treasury Notes (1.9%) 6.00%, 8/15/09............................................. 3,000 3,203 -------- TOTAL U.S. TREASURY NOTES.................................. 3,203 -------- Investment Companies (1.8%) AmSouth Prime Money Market Fund............................ 2,986,507 2,986 AmSouth U.S. Treasury Money Market Fund.................... 13,814 14 -------- TOTAL INVESTMENT COMPANIES................................. 3,000 -------- TOTAL INVESTMENTS (Cost $134,648) (a) -- 99.2%.............................. 165,442 Other assets in excess of liabilities -- 0.8%....................................... 1,320 -------- NET ASSETS -- 100.0%....................................... $166,762 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation.............................................. $33,782 Unrealized depreciation.............................................. (2,988) ------- Net unrealized appreciation.......................................... $30,794 =======
(b) Represents non-income producing security. * Due to rounding, figure is below thousand dollar threshold. See notes to financial statements. 96 AMSOUTH FUNDS Balanced Fund Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $134,648)........................ $165,442 Interest and dividends receivable............................ 1,395 Receivable for capital shares issued......................... 91 Collateral for securities loaned, at fair value.............. 27,752 Prepaid expenses and other assets............................ 5 -------- Total Assets................................................ 194,685 Liabilities: Payable for capital shares redeemed.......................... $ 69 Payable upon return of securities loaned..................... 27,752 Accrued expenses and other payables: Investment advisory fees.................................... 47 Administration fees......................................... 4 Shareholder servicing and distribution fees................. 27 Custodian fees.............................................. 4 Other....................................................... 20 ------- Total Liabilities........................................... 27,923 -------- Net Assets: Capital...................................................... 127,640 Accumulated net investment income............................ 89 Accumulated net realized gains from investment transactions.. 8,239 Unrealized appreciation from investments..................... 30,794 -------- Net Assets................................................... $166,762 ======== Class A Shares (a) Net Assets.................................................. $ 54,978 Shares outstanding.......................................... 4,413 Redemption price per share.................................. $ 12.46 ======== Class A Shares -- Maximum Sales Charge....................... 5.50% -------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)...................................................... $ 13.19 ======== Class B Shares Net Assets.................................................. $ 9,004 Shares outstanding.......................................... 725 Offering price per share*................................... $ 12.42 ======== Trust Shares (b) Net Assets.................................................. $102,780 Shares outstanding.......................................... 8,253 Offering and redemption price per share..................... $ 12.45 ========
* Redemption price per share varies by length of time shares are held. (a) Formerly Classic Shares. (b) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income................................................ $ 5,592 Dividend income................................................ 1,701 Securities lending income...................................... 51 ------- Total Investment Income....................................... 7,344 Expenses: Investment advisory fees....................................... $1,368 Administration fees............................................ 342 Distribution fees -- Class B Shares............................ 55 Shareholder servicing fees -- Class A Shares (a).................................................... 78 Shareholder servicing fees -- Class B Shares................... 19 Shareholder servicing fees -- Trust Shares (b)................. 199 Accounting fees................................................ 34 Transfer agent fees............................................ 77 Other fees..................................................... 103 ------ Total expenses before fee reductions.......................... 2,275 Expenses reduced by Administrator............................. (85) Expenses reduced by Transfer Agent............................ (4) Expenses reduced by Distributor............................... (66) Expenses reduced by Fund Accountant........................... (19) ------- Net expenses.................................................. 2,101 ------- Net Investment Income.......................................... 5,243 ------- Realized/Unrealized Gains from Investments: Net realized gains from investment transactions................ 15,011 Change in unrealized appreciation/depreciation from investments................................................... 3,005 ------- Net realized/unrealized gains from investments................. 18,016 ------- Change in net assets resulting from operations................. $23,259 =======
See notes to financial statements 97 AMSOUTH FUNDS Balanced Fund Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................... $ 5,243 $ 9,820 Net realized gains from investment transactions......... 15,011 10,788 Change in unrealized appreciation/depreciation from investments............................................ 3,005 (27,415) -------- --------- Change in net assets resulting from operations........... 23,259 (6,807) -------- --------- Distributions to Class A Shareholders (a): From net investment income.............................. (953) (1,119) From net realized gains on investment transactions...... (3,214) (4,396) Distributions to Class B Shareholders: From net investment income.............................. (172) (246) From net realized gains on investment transactions...... (668) (1,214) Distributions to Trust Shareholders (b): From net investment income.............................. (4,280) (9,214) From net realized gains on investment transactions...... (12,951) (35,672) -------- --------- Change in net assets from shareholder distributions...... (22,238) (51,861) -------- --------- Change in net assets from capital transactions........... (30,079) (117,882) -------- --------- Change in net assets..................................... (29,058) (176,550) Net Assets: Beginning of period..................................... 195,820 372,370 -------- --------- End of period........................................... $166,762 $ 195,820 ======== =========
(a) Formerly Classic Shares. (b) Formerly Premier Shares. See notes to financial statements 98 AMSOUTH FUNDS Balanced Fund Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) 1997 ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period.... $ 12.48 $ 14.93 $ 15.19 $ 15.21 $ 13.03 ------- ------- ------- ------- -------- Investment Activities Net investment income.. 0.36 0.44 0.41 0.38 0.48 Net realized and unrealized gains (losses) from investments........... 1.28 (0.64) 0.93 0.98 2.78 ------- ------- ------- ------- -------- Total from Investment Activities............ 1.64 (0.20) 1.34 1.36 3.26 ------- ------- ------- ------- -------- Distributions Net investment income.. (0.39) (0.47) (0.40) (0.41) (0.50) Net realized gains from investment transactions.......... (1.27) (1.78) (1.20) (0.97) (0.58) ------- ------- ------- ------- -------- Total Distributions.... (1.66) (2.25) (1.60) (1.38) (1.08) ------- ------- ------- ------- -------- Change in Net Asset Value.................. (0.02) (2.45) (0.26) (0.02) 2.18 ------- ------- ------- ------- -------- Net Asset Value, End of Period................. $ 12.46 $ 12.48 $ 14.93 $ 15.19 $ 15.21 ======= ======= ======= ======= ======== Total Return (excludes sales charge).......... 13.93% (1.05)% 9.40% 9.54% 26.42% Ratios/Supplemental Data: Net Assets at end of period (000)........... $54,978 $21,951 $43,223 $46,814 $372,769 Ratio of expenses to average net assets..... 1.31% 1.35% 1.34% 1.24% 1.05% Ratio of net investment income to average net assets................. 2.90% 3.28% 2.67% 2.77% 3.49% Ratio of expenses to average net assets*.... 1.38% 1.37% 1.35% 1.24% 1.10% Portfolio turnover**.... 14% 16% 23% 25% 25%
/\ Formerly Classic Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. See notes to financial statements 99 AMSOUTH FUNDS Balanced Fund Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period......................... $12.45 $14.90 $ 15.16 $14.99 ------ ------ ------- ------ Investment Activities Net investment income.......... 0.28 0.34 0.29 0.28 Net realized and unrealized gains (losses) from investments................... 1.26 (0.64) 0.95 1.15 ------ ------ ------- ------ Total from Investment Activities.................... 1.54 (0.30) 1.24 1.43 ------ ------ ------- ------ Distributions Net investment income.......... (0.30) (0.37) (0.30) (0.29) Net realized gains from investment transactions....... (1.27) (1.78) (1.20) (0.97) ------ ------ ------- ------ Total Distributions............ (1.57) (2.15) (1.50) (1.26) ------ ------ ------- ------ Change in Net Asset Value....... (0.03) (2.45) (0.26) 0.17 ------ ------ ------- ------ Net Asset Value, End of Period.. $12.42 $12.45 $ 14.90 $15.16 ====== ====== ======= ====== Total Return (excludes redemption charge)............. 13.03% (1.80)% 8.66% 10.07%(b) Ratios/Supplemental Data: Net Assets at end of period (000).......................... $9,004 $7,072 $10,131 $5,309 Ratio of expenses to average net assets......................... 2.06% 2.10% 2.09% 2.12%(c) Ratio of net investment income to average net assets.......... 2.20% 2.54% 1.93% 1.83%(c) Ratio of expenses to average net assets*........................ 2.12% 2.12% 2.10% 2.12%(c) Portfolio turnover**............ 14% 16% 23% 25%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from September 2, 1997 (commencement of operations) through July 31, 1998. (b) Not annualized. (c) Annualized. See notes to financial statements 100 AMSOUTH FUNDS Balanced Fund Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period....................... $ 12.47 $ 14.93 $ 15.18 $ 14.77 -------- -------- -------- -------- Investment Activities Net investment income........ 0.40 0.46 0.44 0.41 Net realized and unrealized gains (losses) from investments................. 1.26 (0.64) 0.95 1.38 -------- -------- -------- -------- Total from Investment Activities.................. 1.66 (0.18) 1.39 1.79 -------- -------- -------- -------- Distributions Net investment income........ (0.41) (0.50) (0.44) (0.41) Net realized gains from investment transactions..... (1.27) (1.78) (1.20) (0.97) -------- -------- -------- -------- Total Distributions.......... (1.68) (2.28) (1.64) (1.38) -------- -------- -------- -------- Change in Net Asset Value..... (0.02) (2.46) (0.25) 0.41 -------- -------- -------- -------- Net Asset Value, End of Period....................... $ 12.45 $ 12.47 $ 14.93 $ 15.18 ======== ======== ======== ======== Total Return.................. 14.09% (0.90)% 9.74% 9.73%(b) Ratios/Supplemental Data: Net Assets at end of period (000)........................ $102,780 $166,797 $319,016 $329,626 Ratio of expenses to average net assets................... 1.16% 1.13% 1.09% 1.10%(c) Ratio of net investment income to average net assets........ 3.16% 3.50% 2.93% 2.95%(c) Ratio of expenses to average net assets*.................. 1.27% 1.17% 1.10% 1.10%(c) Portfolio turnover**.......... 14% 16% 23% 25%
/\ Formerly Premier Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. (b) Represents total return based on the activity of Classic Shares for the period from August 1, 1997 to September 1, 1997 and the activity of Premier Shares for the period from September 2, 1997 to July 31, 1998. Total return for the Premier Shares for the period from September 2, 1997 (commencement of operations) through July 31, 1998 was 12.70%. (c) Annualized. See notes to financial statements 101 AMSOUTH FUNDS Schedule of Portfolio Investments Select Equity Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks (98.3%)
Shares Value ------- ------- Computer Software & Services (7.2%) Automatic Data Processing, Inc. ............................... 9,300 $ 474 Microsoft Corp. (b)............................................ 5,200 344 ------- 818 ------- Consumer Goods (4.3%) Gillette Co. .................................................. 17,400 485 ------- Electronic Components/Instruments (6.0%) Emerson Electric Co. .......................................... 11,900 683 ------- Financial Services (16.7%) Dun & Bradstreet Corp. (b)..................................... 14,950 414 H & R Block, Inc. ............................................. 10,800 771 Moody's Corp. ................................................. 21,200 705 ------- 1,890 ------- Food Products, Processing & Packaging (29.4%) General Mills, Inc. ........................................... 17,300 760 Hershey Foods Corp. ........................................... 7,500 453 International Flavors & Fragrances, Inc. ...................... 15,900 463 J.M. Smucker Co. .............................................. 9,500 258 Ralston Purina Group........................................... 17,000 546 SYSCO Corp. ................................................... 30,800 826 ------- 3,306 ------- Machinery & Equipment (3.6%) Briggs & Stratton Corp. ....................................... 4,500 187 Snap-On, Inc. ................................................. 8,300 224 ------- 411 ------- Newspapers (8.7%) Gannett Co., Inc. ............................................. 8,100 544 Lee Enterprises................................................ 6,200 209 Washington Post, Class B....................................... 401 234 ------- 987 ------- Office Equipment & Services (4.0%) Pitney Bowes, Inc. ............................................ 11,200 450 ------- Pharmaceuticals (5.8%) Bristol-Myers Squibb Co. ...................................... 11,000 651 ------- Pollution Control Services & Equipment (8.1%) Waste Management, Inc. ........................................ 29,360 910 ------- Restaurants (4.5%) McDonald's Corp................................................ 17,500 510 ------- TOTAL COMMON STOCKS............................................ 11,101 -------
Investment Companies (2.5%)
Shares Value ------- ------- AmSouth Prime Money Market Fund................................ 280,947 $ 281 AmSouth U.S. Treasury Money Market Fund........................ 1,036 1 ------- TOTAL INVESTMENT COMPANIES..................................... 282 ------- TOTAL INVESTMENTS (Cost $9,985) (a) -- 100.8%................................... 11,383 Liabilities in excess of other assets -- (0.8%)................ (89) ------- NET ASSETS -- 100.0%........................................... $11,294 =======
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation............................................... $1,867 Unrealized depreciation............................................... (469) ------ Net unrealized appreciation........................................... $1,398 ======
(b) Represents non-income producing security. See notes to financial statements 102 AMSOUTH FUNDS Select Equity Fund Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $9,985).............................. $11,383 Interest and dividends receivable................................ 12 Receivable for investments sold.................................. 74 Prepaid expenses and other assets................................ 2 ------- Total Assets.................................................... 11,471 Liabilities: Payable for investments purchased................................ $162 Accrued expenses and other payables: Investment advisory fees........................................ 3 Shareholder servicing and distribution fees..................... 2 Other........................................................... 10 ---- Total Liabilities............................................... 177 ------- Net Assets: Capital.......................................................... 11,692 Accumulated net realized losses from investment transactions..... (1,796) Unrealized appreciation from investments......................... 1,398 ------- Net Assets....................................................... $11,294 ======= Class A Shares (a) Net Assets...................................................... $ 2,665 Shares outstanding.............................................. 237 Redemption price per share...................................... $ 11.23 ======= Class A Shares -- Maximum Sales Charge........................... 5.50% ------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent).............................................. $ 11.88 ======= Class B Shares Net Assets...................................................... $ 1,586 Shares outstanding.............................................. 143 Offering price per share*....................................... $ 11.08 ======= Trust Shares (b) Net Assets...................................................... $ 7,043 Shares outstanding.............................................. 626 Offering and redemption price per share......................... $ 11.25 =======
* Redemption price per share varies by length of time shares are held. (a) Formerly Classic Shares. (b) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Dividend income..................................................... $ 168 ------ Expenses: Investment advisory fees............................................ $77 Administration fees................................................. 19 Distribution fees -- Class B Shares................................. 7 Shareholder servicing fees -- Class A Shares (a).................... 6 Shareholder servicing fees -- Class B Shares........................ 2 Shareholder servicing fees -- Trust Shares (b)...................... 9 Custodian fees...................................................... 3 Accounting fees..................................................... 4 Transfer agent fees................................................. 53 Audit............................................................... 9 Other fees.......................................................... 11 --- Total expenses before fee reductions............................... 200 Expenses reduced by Administrator.................................. (5) Expenses reduced by Transfer Agent................................. (29) Expenses reduced by Distributor.................................... (3) Expenses reduced by Fund Accountant................................ (1) ------ Net expenses....................................................... 162 ------ Net Investment Income............................................... 6 ------ Realized/Unrealized Gains (Losses) from Investments: Net realized losses from investment transactions.................... (148) Change in unrealized appreciation/depreciation from investments..... 2,462 ------ Net realized/unrealized gains from investments...................... 2,314 ------ Change in net assets resulting from operations...................... $2,320 ======
See notes to financial statements 103 AMSOUTH FUNDS Select Equity Fund Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................... $ 6 $ 95 Net realized losses from investment transactions........ (148) (1,118) Change in unrealized appreciation/depreciation from investments............................................ 2,462 (2,445) ------- ------- Change in net assets resulting from operations........... 2,320 (3,468) ------- ------- Distributions to Class A Shareholders (a): From net investment income.............................. (3) (35) From net realized gains on investment transactions...... -- (450) Distributions to Class B Shareholders: From net investment income.............................. -- (4) From net realized gains on investment transactions...... -- (114) Distributions to Trust Shareholders (b): From net investment income.............................. (11) (58) From net realized gains on investment transactions...... -- (552) ------- ------- Change in net assets from shareholder distributions...... (14) (1,213) ------- ------- Change in net assets from capital transactions........... 661 (9,603) ------- ------- Change in net assets..................................... 2,967 (14,284) Net Assets: Beginning of period..................................... 8,327 22,611 ------- ------- End of period........................................... $11,294 $ 8,327 ======= =======
(a) Formerly Classic Shares. (b) Formerly Premier Shares. See notes to financial statements 104 AMSOUTH FUNDS Select Equity Fund Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended July 31, July 31, July 31, 2001 + 2000 + 1999 (a) ---------- ---------- ------------ Net Asset Value, Beginning of Period....... $ 8.72 $11.88 $ 10.00 ------ ------ ------- Investment Activities Net investment income..................... 0.01 0.07 0.04 Net realized and unrealized gains (losses) from investments......................... 2.51 (2.35) 1.91 ------ ------ ------- Total from Investment Activities.......... 2.52 (2.28) 1.95 ------ ------ ------- Distributions Net investment income..................... (0.01) (0.07) (0.06) Net realized gains from investment transactions............................. -- (0.81) (0.01) ------ ------ ------- Total Distributions....................... (0.01) (0.88) (0.07) ------ ------ ------- Change in Net Asset Value.................. 2.51 (3.16) 1.88 ------ ------ ------- Net Asset Value, End of Period............. $11.23 $ 8.72 $ 11.88 ====== ====== ======= Total Return (excludes sales charge)....... 28.96% (19.86)% 19.44%(b) Ratios/Supplemental Data: Net Assets at end of period (000).......... $2,665 $2,512 $10,258 Ratio of expenses to average net assets.... 1.71% 1.44% 1.13%(c) Ratio of net investment income to average net assets................................ 0.05% 0.67% 0.43%(c) Ratio of expenses to average net assets*... 2.07% 1.96% 1.81%(c) Portfolio turnover**....................... 19% 25% 10%
/\ Formerly Classic Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from September 1, 1998 (commencement of operations) through July 31, 1999. (b) Not annualized. (c) Annualized. See notes to financial statements 105 AMSOUTH FUNDS Select Equity Fund Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended July 31, July 31, July 31, 2001 + 2000 + 1999 (a) ---------- ---------- ------------ Net Asset Value, Beginning of Period...... $ 8.64 $ 11.83 $ 9.98 ------ ------- ------ Investment Activities Net investment income (loss)............. (0.08) (0.01) 0.02 Net realized and unrealized gains (losses) from investments............... 2.52 (2.34) 1.86 ------ ------- ------ Total from Investment Activities......... 2.44 (2.35) 1.88 ------ ------- ------ Distributions Net investment income.................... -- (0.03) (0.02) Net realized gains from investment transactions............................ -- (0.81) (0.01) ------ ------- ------ Total Distributions...................... -- (0.84) (0.03) ------ ------- ------ Change in Net Asset Value................. 2.44 (3.19) 1.85 ------ ------- ------ Net Asset Value, End of Period............ $11.08 $ 8.64 $11.83 ====== ======= ====== Total Return (excludes redemption charge).................................. 28.24% (20.47)% 18.83%(b) Ratios/Supplemental Data: Net Assets at end of period (000)......... $1,586 $ 715 $1,933 Ratio of expenses to average net assets... 2.44% 2.21% 1.99%(c) Ratio of net investment income to average net assets............................... (0.75)% (0.08)% (0.49)%(c) Ratio of expenses to average net assets*.. 2.80% 2.72% 2.58%(c) Portfolio turnover**...................... 19% 25% 10%
+ Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from September 2, 1998 (commencement of operations) through July 31, 1999. (b) Not annualized. (c) Annualized. See notes to financial statements 106 AMSOUTH FUNDS Select Equity Fund Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended July 31, July 31, July 31, 2001 + 2000 + 1999 (a) ---------- ---------- ------------ Net Asset Value, Beginning of Period....... $ 8.73 $11.89 $ 11.52 ------ ------ ------- Investment Activities Net investment income..................... 0.02 0.09 0.04 Net realized and unrealized gains (losses) from investments......................... 2.52 (2.36) 0.38 ------ ------ ------- Total from Investment Activities.......... 2.54 (2.27) 0.42 ------ ------ ------- Distributions Net investment income..................... (0.02) (0.08) (0.04) Net realized gains from investment transactions............................. -- (0.81) (0.01) ------ ------ ------- Total Distributions....................... (0.02) (0.89) (0.05) ------ ------ ------- Change in Net Asset Value.................. 2.52 (3.16) 0.37 ------ ------ ------- Net Asset Value, End of Period............. $11.25 $ 8.73 $ 11.89 ====== ====== ======= Total Return............................... 29.12% (19.72)% 3.63%(b) Ratios/Supplemental Data: Net Assets at end of period (000).......... $7,043 $5,100 $10,420 Ratio of expenses to average net assets.... 1.56% 1.25% 0.99%(c) Ratio of net investment income to average net assets................................ 0.19% 0.88% 0.65%(c) Ratio of expenses to average net assets*... 1.97% 1.78% 1.58%(c) Portfolio turnover**....................... 19% 25% 10%
/\ Formerly Premier Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from December 3, 1998 (commencement of operations) through July 31, 1999. (b) Not annualized. (c) Annualized. See notes to financial statements 107 AMSOUTH FUNDS Schedule of Portfolio Investments Enhanced Market Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks (100.1%)
Shares Value ------ ------ Aerospace/Defense (1.9%) Boeing Co. ...................................................... 5,200 $ 305 General Dynamics Corp. .......................................... 2,000 162 Lockheed Martin Corp. ........................................... 4,300 170 Northrop Grumman Corp. .......................................... 800 64 Rockwell Collins................................................. 1,800 37 United Technologies Corp. ....................................... 3,800 279 ------ 1,017 ------ Agriculture (0.2%) Archer-Daniels-Midland Co. ...................................... 6,411 86 ------ Airlines (0.4%) AMR Corp. (b).................................................... 1,500 53 Delta Air Lines, Inc. ........................................... 100 4 Southwest Airlines Co. .......................................... 7,500 150 ------ 207 ------ Appliances (0.0%) Maytag Corp. .................................................... 400 13 Whirlpool Corp. ................................................. 100 7 ------ 20 ------ Automotive (1.1%) Ford Motor Co. .................................................. 11,400 290 General Motors Corp. ............................................ 4,500 286 Navistar International Corp. .................................... 300 10 ------ 586 ------ Automotive Parts (0.2%) Cooper Tire & Rubber Co. ........................................ 400 6 Delphi Automotive Systems........................................ 2,837 46 Eaton Corp. ..................................................... 300 22 Genuine Parts Co. ............................................... 900 30 Visteon Corp. ................................................... 691 15 ------ 119 ------ Banking (4.4%) Bank of America Corp. ........................................... 4,600 293 Bank of New York Co., Inc. ...................................... 5,600 251 Bank One Corp. .................................................. 600 23 Comerica, Inc. .................................................. 100 6 First Union Corp. ............................................... 4,900 173 FleetBoston Financial Corp. ..................................... 8,218 309 Huntington Bancshares, Inc. ..................................... 1,286 24 J.P. Morgan Chase & Co., Inc. ................................... 10,920 474 Keycorp.......................................................... 4,200 112 Northern Trust Corp. ............................................ 1,100 70 PNC Financial Services Group..................................... 2,900 192 Regions Financial Corp. ......................................... 1,200 38 SouthTrust Corp. ................................................ 1,600 41 SunTrust Banks, Inc. ............................................ 1,500 104 Wachovia Corp. .................................................. 1,000 71 Wells Fargo Co. ................................................. 4,300 198 ------ 2,379 ------ Beverages (1.8%) Adolph Coors Co., Class B........................................ 400 20 Anheuser-Busch Cos., Inc. ....................................... 4,500 195 Brown-Forman Corp. .............................................. 100 7 Coca Cola Enterprises, Inc. ..................................... 1,300 19 Coca-Cola Co. ................................................... 8,800 392
Common Stocks, continued
Shares Value ------ ------ Beverages, continued PepsiCo, Inc. ................................................... 7,200 $ 336 ------ 969 ------ Biotechnology (0.9%) Amgen, Inc. (b).................................................. 6,200 389 Biogen, Inc. (b)................................................. 700 40 MedImmune, Inc. (b).............................................. 1,100 42 ------ 471 ------ Brokerage Services (1.6%) Bear Stearns Cos. (The), Inc. ................................... 200 12 Lehman Brothers Holdings, Inc. .................................. 2,200 158 Merrill Lynch & Co., Inc. ....................................... 5,200 282 Morgan Stanley Dean Witter & Co. ................................ 6,700 401 ------ 853 ------ Chemicals (1.2%) Air Products and Chemicals, Inc. ................................ 2,300 94 E.I. du Pont de Nemours & Co. ................................... 7,278 311 Eastman Chemical Co. ............................................ 800 35 FMC Corp. (b).................................................... 300 20 PPG Industries, Inc. ............................................ 600 33 Praxair, Inc. ................................................... 1,600 73 Rohm & Haas Co. ................................................. 400 14 Sherwin Williams Co. ............................................ 1,600 37 Sigma Aldrich Corp. ............................................. 400 17 ------ 634 ------ Chemicals -- Speciality (0.1%) Ashland, Inc. ................................................... 700 28 Engelhard Corp. ................................................. 1,300 33 ------ 61 ------ Commercial Services (0.2%) Deluxe Corp. .................................................... 700 22 Ecolab, Inc. .................................................... 600 24 Fluor Corp. ..................................................... 400 16 Quintiles Transnational Corp. (b)................................ 600 11 R.R. Donnelley & Sons Co. ....................................... 100 3 Robert Half International, Inc. ................................. 900 23 Sabre Holdings Group, Inc. (b)................................... 400 20 ------ 119 ------ Computer Hardware (3.8%) Apple Computer, Inc. (b)......................................... 1,700 32 Compaq Computer Corp. ........................................... 13,300 199 Dell Computer Corp. (b).......................................... 16,100 434 Gateway, Inc. ................................................... 700 7 IBM Corp. ....................................................... 9,700 1,020 Sun Microsystems, Inc. (b)....................................... 21,200 345 ------ 2,037 ------ Computer Software (5.9%) Adobe Systems, Inc. ............................................. 2,400 90 Autodesk, Inc. .................................................. 300 11 Avaya, Inc. (b).................................................. 1,379 17 BMC Software, Inc. (b)........................................... 1,900 38 BroadVision, Inc. (b)............................................ 1,400 5 Citrix Systems, Inc. (b)......................................... 900 30 Computer Associates International, Inc. ......................... 5,600 193 Compuware Corp. (b).............................................. 1,900 26
Continued 108 AMSOUTH FUNDS Schedule of Portfolio Investments Enhanced Market Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks, continued
Shares Value ------ ------ Computer Software, continued Intuit, Inc. (b)................................................. 1,000 $ 34 Mercury Interactive Corp. (b).................................... 400 15 Microsoft Corp. (b).............................................. 27,500 1,821 Novell, Inc. (b)................................................. 1,700 8 Oracle Corp. (b)................................................. 33,100 599 Parametric Technology Corp. (b).................................. 1,400 13 Peoplesoft, Inc. (b)............................................. 2,900 127 Siebel Systems, Inc. (b)......................................... 4,000 138 ------ 3,165 ------ Computers & Peripherals (3.3%) Cabletron Systems, Inc. (b)...................................... 1,900 35 Cisco Systems, Inc. (b).......................................... 41,200 792 Convergys Corp. (b).............................................. 800 25 Electronic Data Systems Corp. ................................... 3,300 211 EMC Corp. (b).................................................... 13,062 258 Hewlett-Packard Co. ............................................. 11,900 293 Jabil Circuit, Inc. (b).......................................... 1,900 62 NCR Corp. ....................................................... 200 8 Network Appliance Corp. (b)...................................... 1,600 20 Palm, Inc. (b)................................................... 2,836 15 Sapient Corp. (b)................................................ 600 4 Seagate Technology, Inc. ........................................ 2,400 --* Unisys Corp. (b)................................................. 2,900 33 ------ 1,756 ------ Consumer Goods (0.3%) American Greetings Corp., Class A................................ 300 3 Brunswick Corp. ................................................. 400 9 Nike, Inc., Class B.............................................. 2,700 128 ------ 140 ------ Containers & Packaging (0.0%) Ball Corp. ...................................................... 100 5 Pactiv Corp. (b)................................................. 800 12 ------ 17 ------ Cosmetics/Personal Care (1.2%) Gillette Co. .................................................... 5,200 145 Kimberly Clark Corp. ............................................ 3,800 231 Procter & Gamble Co. ............................................ 3,800 270 ------ 646 ------ Data Processing & Reproduction (0.3%) First Data Corp. ................................................ 2,000 139 Fiserv, Inc. (b)................................................. 600 34 ------ 173 ------ Diversified Manufacturing (6.0%) Crane Co. ....................................................... 300 9 Danaher Corp. ................................................... 400 23 General Electric Co. ............................................ 45,200 1,965 Goodrich Corp. .................................................. 1,000 35 Honeywell International, Inc. ................................... 6,200 229 ITT Industries, Inc. ............................................ 900 40 Minnesota Mining & Manufacturing Co. ............................ 2,900 324 National Service Industries, Inc. ............................... 200 5 Textron, Inc. ................................................... 400 23 Tyco International, Ltd. ........................................ 10,469 557 ------ 3,210 ------
Common Stocks, continued
Shares Value ------ ------ Electronic Components (1.3%) Agilent Technologies, Inc. (b)................................... 2,279 $ 65 Altera Corp. (b)................................................. 4,000 120 Analog Devices, Inc. (b)......................................... 3,300 152 Applied Micro Circuits Corp. (b)................................. 1,500 26 Broadcom Corp., Class A (b)...................................... 2,400 105 Cooper Industries................................................ 900 37 Millipore Corp. ................................................. 200 13 Mirant Corp. (b)................................................. 1,651 51 Molex, Inc. ..................................................... 1,000 34 Power-One, Inc. (b).............................................. 400 6 QLogic Corp. (b)................................................. 500 19 Sanmina Corp. (b)................................................ 1,500 33 Tektronix, Inc. (b).............................................. 1,000 23 Vitesse Semiconductor Corp. (b).................................. 900 18 ------ 702 ------ Electronic Components/Instruments (0.6%) American Power Conversion Corp. (b).............................. 1,000 13 Johnson Controls, Inc. .......................................... 900 72 Parker-Hannifin Corp. ........................................... 1,200 54 PerkinElmer, Inc. ............................................... 1,000 32 Rockwell International Corp. .................................... 1,800 29 Teradyne, Inc. (b)............................................... 1,700 58 Thermo Electron Corp. (b)........................................ 1,500 34 Thomas & Betts Corp. ............................................ 300 6 ------ 298 ------ Entertainment (1.8%) AOL-Time Warner, Inc. (b)........................................ 18,300 831 Walt Disney (The) Co. ........................................... 5,000 132 ------ 963 ------ Financial Services (7.3%) Ambac Financial Group, Inc. ..................................... 1,100 63 American Express Co. ............................................ 8,300 335 Capital One Financial Corp. ..................................... 1,000 64 Charter One Financial, Inc. ..................................... 425 14 Citigroup, Inc. ................................................. 26,466 1,330 Concord EFS, Inc. ............................................... 2,100 120 Equifax, Inc. ................................................... 300 7 Fannie Mae....................................................... 6,200 517 Freddie Mac...................................................... 4,900 336 Golden West Financial Corp. ..................................... 1,600 103 H & R Block, Inc. ............................................... 200 14 Household International, Inc. ................................... 2,300 152 MBIA, Inc. ...................................................... 250 14 MBNA Corp. ...................................................... 6,300 223 Mellon Financial Corp. .......................................... 4,700 179 Moody's Corp. ................................................... 400 13 State Steet Corp. ............................................... 3,200 172 Stilwell Financial, Inc. ........................................ 1,100 33 Synovus Financial Corp. ......................................... 600 20 T. Rowe Price Group, Inc. ....................................... 600 23 U.S. Bancorp..................................................... 407 10 Washington Mutual, Inc. ......................................... 4,350 176 ------ 3,918 ------
Continued 109 AMSOUTH FUNDS Schedule of Portfolio Investments Enhanced Market Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks, continued
Shares Value ------ ------ Food Products, Processing & Packaging (1.0%) Hershey Foods Corp. ............................................. 500 $ 30 International Flavors & Fragrances, Inc. ........................ 1,000 29 Quaker Oats Co. ................................................. 1,300 114 Ralston Purina Group............................................. 1,500 48 Sara Lee Corp. .................................................. 7,800 157 Unilever NV ADR.................................................. 2,850 172 ------ 550 ------ Forest & Paper Products (0.5%) Boise Cascade Corp. ............................................. 600 22 Georgia Pacific Corp. ........................................... 400 15 International Paper Co. ......................................... 2,400 97 Louisiana Pacific Corp. ......................................... 500 5 Mead Corp. ...................................................... 1,000 30 Temple-Inland, Inc. ............................................. 500 31 Westvaco Corp. .................................................. 1,000 27 Willamette Industries, Inc. ..................................... 1,100 55 ------ 282 ------ Gas Distribution (0.6%) El Paso Energy Corp. ............................................ 2,453 128 KeySpan Corp. ................................................... 700 21 Kinder Morgan, Inc. ............................................. 600 31 Nicor, Inc. ..................................................... 200 7 Oneok, Inc. ..................................................... 200 4 Sempra Energy.................................................... 1,000 25 Williams Cos., Inc. ............................................. 2,400 81 ------ 297 ------ Health Care (0.1%) HEALTHSOUTH Corp. (b)............................................ 3,100 53 Humana, Inc. (b)................................................. 1,700 19 ------ 72 ------ Health Care Services (0.6%) IMS Health, Inc. ................................................ 900 23 Manor Care, Inc. (b)............................................. 1,000 32 McKesson HBOC, Inc. ............................................. 700 29 Tenet Healthcare Corp. (b)....................................... 3,100 173 Wellpoint Health Networks, Inc. (b).............................. 600 64 ------ 321 ------ Home Builders (0.1%) Centex Corp. .................................................... 300 14 KB Home.......................................................... 200 7 Pulte Homes, Inc. ............................................... 400 16 ------ 37 ------ Hotels & Lodging (0.5%) Carnival Corp. .................................................. 5,600 187 Hilton Hotels Corp. ............................................. 3,700 45 Starwood Hotels & Resorts Worldwide, Inc. ....................... 1,000 36 ------ 268 ------ Household Products (0.2%) Clorox (The) Co. ................................................ 1,200 45 Fortune Brands, Inc. ............................................ 1,500 55 Newell Rubbermaid, Inc. ......................................... 800 17 Tupperware Corp. ................................................ 300 7 ------ 124 ------
Common Stocks, continued
Shares Value ------ ------ Insurance (5.7%) AFLAC, Inc. ..................................................... 4,900 $ 145 Allstate (The) Corp. ............................................ 5,900 206 American General Corp. .......................................... 5,000 231 American International Group, Inc. .............................. 12,737 1,061 Aon Corp. ....................................................... 100 4 Chubb Corp. ..................................................... 1,700 119 Cigna Corp. ..................................................... 1,500 150 Cincinnati Financial Corp. ...................................... 800 32 Conseco, Inc. ................................................... 700 10 Hartford Financial Services Group................................ 2,300 152 Jefferson Pilot Corp. ........................................... 1,500 71 Lincoln National Corp. .......................................... 1,900 97 Loews Corp. ..................................................... 2,000 114 Marsh & McLennan Cos., Inc. ..................................... 2,400 241 MetLife, Inc. ................................................... 3,800 113 MGIC Investment Corp. ........................................... 1,100 83 Progressive Corp. ............................................... 200 27 Safeco Corp. .................................................... 600 19 St. Paul Cos. (The), Inc. ....................................... 2,200 96 Torchmark Corp. ................................................. 1,300 54 UnumProvident Corp. ............................................. 1,200 34 ------ 3,059 ------ Machinery & Equipment (0.5%) Black & Decker Corp. ............................................ 800 34 Caterpillar, Inc. ............................................... 1,700 94 Deere & Co. ..................................................... 1,200 50 Dover Corp. ..................................................... 600 22 Ingersoll Rand Co. .............................................. 300 13 PACCAR, Inc. .................................................... 400 24 Snap-on, Inc. ................................................... 600 16 Stanley Works (The).............................................. 400 17 ------ 270 ------ Media (0.7%) Comcast Corp., Special Class A (b)............................... 1,000 38 McGraw Hill Cos., Inc. .......................................... 1,000 61 Viacom, Inc., Class B (b)........................................ 5,524 275 ------ 374 ------ Medical Supplies (1.3%) Allergan, Inc. .................................................. 1,300 98 Applied Biosystems Group......................................... 2,100 59 Becton, Dickinson & Co. ......................................... 2,500 86 Biomet, Inc. .................................................... 900 44 Boston Scientific Corp. (b)...................................... 1,100 20 C.R. Bard, Inc. ................................................. 500 30 Guidant Corp. (b)................................................ 1,500 48 Medtronic, Inc. ................................................. 6,000 288 St. Jude Medical, Inc. (b)....................................... 700 49 ------ 722 ------ Metals & Mining (0.3%) Alcan Aluminum, Ltd. ............................................ 1,600 60 Allegheny Technologies, Inc. .................................... 400 8 Barrick Gold Corp. .............................................. 2,000 30 Freeport-McMoRran Copper & Gold, Inc. (b)........................ 700 8 Homestake Mining................................................. 1,300 10 Inco Ltd. (b).................................................... 900 15
Continued 110 AMSOUTH FUNDS Schedule of Portfolio Investments Enhanced Market Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks, continued
Shares Value ------ ------ Metals & Mining, continued Phelps Dodge Corp. .............................................. 405 $ 16 Placer Dome, Inc. ............................................... 1,700 17 ------ 164 ------ Newspapers (0.2%) Dow Jones & Co., Inc. ........................................... 200 11 Gannett Co., Inc. ............................................... 1,300 88 Knight-Ridder, Inc. ............................................. 100 6 New York Times Co. .............................................. 500 23 ------ 128 ------ Office Equipment & Services (0.6%) Avery Dennison Corp. ............................................ 1,100 56 Cintas Corp. .................................................... 800 40 Lexmark International Group, Inc., Class A (b)................... 600 27 Paychex, Inc. ................................................... 1,900 75 Pitney Bowes, Inc. .............................................. 2,500 101 Xerox Corp. ..................................................... 3,400 27 ------ 326 ------ Oil & Gas Exploration, Production, & Services (6.8%) Amerada Hess Corp. .............................................. 900 70 Apache Corp. .................................................... 1,200 62 Baker Hughes, Inc. .............................................. 3,352 119 Burlington Resources, Inc. ...................................... 2,100 91 Chevron Corp. ................................................... 1,200 110 Conoco, Inc., Class B............................................ 3,190 99 Enron Corp. ..................................................... 3,700 168 EOG Resources, Inc. ............................................. 100 4 Exxon Mobil Corp. ............................................... 37,264 1,555 McDermott International, Inc. ................................... 300 3 Nabors Industries, Inc. (b)...................................... 400 12 Noble Drilling Corp. (b)......................................... 700 21 Progress Energy, Inc., (b)....................................... 500 --* Rowan Cos., Inc. (b)............................................. 1,000 19 Royal Dutch Petroleum Co. ....................................... 10,600 614 Schlumberger Ltd. ............................................... 2,800 151 Sunoco, Inc. .................................................... 900 31 Texaco, Inc. .................................................... 4,400 305 Tosco Corp. ..................................................... 1,400 63 Unocal Corp. .................................................... 2,400 86 USX-Marathon Group............................................... 3,100 92 ------ 3,675 ------ Pharmaceuticals (11.6%) Abbott Laboratories.............................................. 7,700 413 American Home Products Corp. .................................... 7,600 458 Baxter International, Inc. ...................................... 5,400 269 Bristol-Myers Squibb Co. ........................................ 11,700 692 Chiron Corp. (b)................................................. 1,000 43 Eli Lilly & Co. ................................................. 6,400 507 Forest Laboratories, Inc. (b).................................... 1,800 141 Johnson & Johnson................................................ 13,800 747 King Pharmaceuticals, Inc. (b)................................... 1,067 48 Merck & Co., Inc. ............................................... 12,900 878 Pfizer, Inc. .................................................... 32,850 1,355 Pharmacia Corp. ................................................. 8,074 360 Schering-Plough Corp. ........................................... 9,000 351 Watson Pharmaceuticals, Inc. (b)................................. 200 13 ------ 6,275 ------
Common Stocks, continued
Shares Value ------ ------ Pollution Control Services & Equipment (0.2%) Waste Management, Inc. .......................................... 3,100 $ 96 ------ Railroads (0.5%) Burlington Northern Santa Fe..................................... 4,000 108 Norfolk Southern Corp. .......................................... 3,900 78 Union Pacific Corp. ............................................. 1,200 64 ------ 250 ------ Restaurants (0.2%) Darden Restaurants, Inc. ........................................ 1,200 37 McDonald's Corp. ................................................ 600 17 Starbucks Corp. (b).............................................. 1,800 32 Tricon Global Restaurants (b).................................... 400 18 Wendy's International, Inc. ..................................... 600 16 ------ 120 ------ Retail (6.2%) Bed Bath & Beyond, Inc. (b)...................................... 1,400 45 Best Buy Co., Inc. (b)........................................... 1,000 67 Big Lots, Inc. (b)............................................... 600 8 Circuit City Stores, Inc. ....................................... 2,000 38 Costco Wholesale Corp. .......................................... 2,200 95 CVS Corp. ....................................................... 3,600 130 Dillard's Inc., Class A.......................................... 400 6 Dollar General Corp. ............................................ 600 12 Federated Department Stores, Inc. ............................... 500 19 Gap (The), Inc................................................... 6,800 186 Home Depot, Inc. ................................................ 13,000 655 Kmart Corp. (b).................................................. 600 7 Limited (The), Inc. ............................................. 4,200 71 Liz Claiborne, Inc. ............................................. 300 16 May Department Stores Co. ....................................... 3,000 100 Office Depot, Inc. (b)........................................... 3,000 38 RadioShack Corp. ................................................ 1,800 51 Safeway, Inc. (b)................................................ 4,800 212 Staples, Inc. (b)................................................ 2,300 34 SUPERVALU, Inc. ................................................. 1,300 27 Target Corp. .................................................... 6,300 244 TJX Cos. (The), Inc. ............................................ 800 27 Toys R Us, Inc. (b).............................................. 2,000 46 Wal-Mart Stores, Inc. ........................................... 18,400 1,028 Walgreen Co. .................................................... 5,100 172 ------ 3,334 ------ Semiconductors (4.0%) Advanced Micro Devices, Inc. (b)................................. 1,600 29 Applied Materials, Inc. (b)...................................... 4,000 183 Conexant Systems, Inc. (b)....................................... 1,200 11 Intel Corp. ..................................................... 36,500 1,089 KLA-Tencor Corp. (b)............................................. 900 49 Linear Technology Corp. ......................................... 3,100 135 LSI Logic Corp. (b).............................................. 1,600 35 Micron Technology, Inc. (b)...................................... 4,500 189 National Semiconductor Corp. (b)................................. 1,700 54 Novellus Systems, Inc. (b)....................................... 700 36 Texas Instruments, Inc. ......................................... 10,500 362 ------ 2,172 ------
Continued 111 AMSOUTH FUNDS Schedule of Portfolio Investments Enhanced Market Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks, continued
Shares Value ------ ------ Steel (0.0%) Timken Co. ...................................................... 300 $ 5 USX-U.S. Steel Group, Inc. ...................................... 400 8 Worthington Industries, Inc. .................................... 400 6 ------ 19 ------ Telecommunications -- Equipment (1.4%) ADC Telecommunications, Inc. (b)................................. 3,900 19 Andrew Corp. (b)................................................. 400 9 Corning, Inc. ................................................... 7,600 119 JDS Uniphase Corp. (b)........................................... 10,500 97 Lucent Technologies, Inc. ....................................... 25,450 171 Motorola, Inc. ................................................. 15,231 284 Scientific-Atlanta, Inc. ........................................ 1,100 28 Tellabs, Inc. (b)................................................ 2,000 33 ------ 760 ------ Telecommunications -- Wireless (1.2%) AT&T Wireless Services, Inc. .................................... 6,021 113 Nextel Communications, Inc. ..................................... 3,800 63 Nortel Networks Corp., ADR....................................... 15,800 126 Qualcomm, Inc. (b)............................................... 5,200 328 ------ 630 ------ Tobacco (1.2%) Philip Morris Cos., Inc. ........................................ 13,800 628 UST, Inc. ....................................................... 400 12 ------ 640 ------ Toys/Games/Hobbies (0.0%) Mattel, Inc. .................................................... 1,265 23 ------ Transportation Leasing & Trucking (0.0%) Ryder System, Inc. .............................................. 300 6 ------ Utilities -- Electric & Gas (2.4%) Allegheny Energy, Inc. ......................................... 600 26 Ameren Corp. ................................................... 700 28 American Electric Power Co. ..................................... 1,620 73 Cinergy Corp. ................................................... 800 25 CMS Energy Corp. ................................................ 600 16 Consolidated Edison, Inc. ....................................... 1,100 44 Constellation Energy Group....................................... 800 24 Dominion Resources, Inc. ........................................ 1,204 73 DTE Energy Co. .................................................. 700 30 Duke Energy Corp. ............................................... 3,800 146 Dynergy Inc., Class A............................................ 1,600 74 Edison International............................................. 1,700 24 Entergy Corp. ................................................... 1,100 41 Exelon Corp. .................................................... 1,575 88 Firstenergy Corp. ............................................... 1,100 33 FPL Group, Inc. ................................................. 900 49 GPU, Inc. ....................................................... 600 22 Niagara Mohawk Holdings, Inc. (b)................................ 800 14 Nisource, Inc. .................................................. 1,000 26 Peoples Energy Corp. ............................................ 200 8 PG&E Corp. ...................................................... 2,000 30 Pinnacle West Capital Corp. ..................................... 400 17 PPL Corp. ....................................................... 750 34 Progress Energy, Inc. ........................................... 1,037 44 Public Service Enterprise Group, Inc. ........................... 1,100 51 Reliant Energy, Inc. ............................................ 1,500 47
Common Stocks, continued
Shares Value ------ ------- Utilities -- Electric & Gas, continued Southern Co. ................................................... 3,400 $ 80 TXU Corp. ...................................................... 1,300 60 Xcel Energy, Inc. .............................................. 1,685 45 ------- 1,272 ------- Utilities -- Telecommunications (5.7%) Alltel Corp. ................................................... 1,600 99 AT&T Corp. ..................................................... 18,711 378 BellSouth Corp. ................................................ 9,300 379 Centurytel, Inc. ............................................... 1,400 43 Citizens Communications Co. (b)................................. 100 1 Global Crossing, Ltd. (b)....................................... 4,530 30 Qwest Communications International, Inc. ....................... 3,427 89 SBC Communications, Inc. ....................................... 18,380 827 Sprint Corp. ................................................... 7,500 175 Sprint Corp. (PCS Group) (b).................................... 4,700 122 Verizon Communications.......................................... 13,406 726 WorldCom, Inc. (b).............................................. 14,300 200 ------- 3,069 ------- TOTAL COMMON STOCKS............................................. 53,881 -------
Investment Companies (0.0%) AmSouth Prime Money Market Fund.................................. 5,117 5 ------- TOTAL INVESTMENT COMPANIES....................................... 5 ------- TOTAL INVESTMENTS (Cost $58,956) (a) -- 100.1%.................................... 53,886 Liabilities in excess of other assets -- (0.1%).................. (38) ------- NET ASSETS -- 100.0%............................................. $53,848 =======
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized depreciation of securities as follows: Unrealized appreciation........................................... $ 5,257 Unrealized depreciation........................................... (10,327) -------- Net unrealized depreciation....................................... $ (5,070) ========
(b) Represents non-income producing security. * Due to rounding, figure is below thousand dollar threshold. ADR -- American Depositary Receipt Continued 112 AMSOUTH FUNDS Enhanced Market Fund Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $58,956)............................... $53,886 Interest and dividends receivable.................................. 35 Receivable for capital shares issued............................... 11 Collateral for securities loaned, at fair value.................... 2,359 Prepaid expenses and other assets.................................. 5 ------- Total Assets...................................................... 56,296
Liabilities: Payable to custodian........................................... $ 46 Payable for capital shares redeemed............................ 5 Payable upon return of securities loaned....................... 2,359 Accrued expenses and other payables: Investment advisory fees...................................... 9 Administration fees........................................... 1 Shareholder servicing and distribution fees................... 18 Custodian fees................................................ 1 Other......................................................... 9 ------ Total Liabilities............................................. 2,448 ------- Net Assets: Capital........................................................ 57,884 Distributions in excess of net investment income............... (2) Accumulated net realized gains from investment transactions and futures....................................................... 1,036 Unrealized depreciation from investments....................... (5,070) ------- Net Assets..................................................... $53,848 ======= Class A Shares (a) Net Assets.................................................... $24,666 Shares outstanding............................................ 2,011 Redemption price per share.................................... $ 12.27 ======= Class A Shares -- Maximum Sales Charge......................... 5.50% ------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)..... $ 12.98 ======= Class B Shares Net Assets.................................................... $13,713 Shares outstanding............................................ 1,132 Offering price per share*..................................... $ 12.11 ======= Trust Shares (b) Net Assets.................................................... $15,469 Shares outstanding............................................ 1,260 Offering and redemption price per share....................... $ 12.28 =======
* Redemption price per share varies by length of time shares are held. (a) Formerly Classic Shares. (b) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income................................................. $ 23 Dividend income................................................. 782 Securities lending income....................................... 8 -------- Total Investment Income........................................ 813 Expenses: Investment advisory fees........................................ $277 Administration fees............................................. 123 Distribution fees -- Class B Shares............................. 117 Shareholder servicing fees -- Class A Shares (a)................ 46 Shareholder servicing fees -- Class B Shares.................... 39 Shareholder servicing fees -- Trust Shares (b).................. 42 Custodian fees.................................................. 17 Accounting fees................................................. 29 Transfer agent fees............................................. 72 Other fees...................................................... 31 ---- Total expenses before fee reductions........................... 793 Expenses reduced by Administrator.............................. (31) Expenses reduced by Transfer Agent............................. (21) Expenses reduced by Distributor................................ (14) Expenses reduced by Fund Accountant............................ (7) -------- Net expenses................................................... 720 -------- Net Investment Income........................................... 93 -------- Realized/Unrealized Gains (Losses) from Investments: Net realized gains from investment transactions and futures..... 1,497 Change in unrealized appreciation/depreciation from investments.................................................... (11,257) -------- Net realized/unrealized losses from investments................. (9,760) -------- Change in net assets resulting from operations.................. $ (9,667) ========
See notes to financial statements 113 AMSOUTH FUNDS Enhanced Market Fund Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................... $ 93 $ 227 Net realized gains from investment transactions and futures................................................ 1,497 769 Change in unrealized appreciation/depreciation from investments............................................ (11,257) 3,755 -------- ------- Change in net assets resulting from operations........... (9,667) 4,751 -------- ------- Distributions to Class A Shareholders (a): From net investment income.............................. (44) (88) From net realized gains on investment transactions...... (287) (614) Distributions to Class B Shareholders: From net investment income.............................. (21) (4) From net realized gains on investment transactions...... (260) (326) Distributions to Trust Shareholders (b): From net investment income.............................. (94) (156) From net realized gains on investment transactions...... (457) (754) -------- ------- Change in net assets from shareholder distributions...... (1,163) (1,942) -------- ------- Change in net assets from capital transactions........... (4,594) 31,693 -------- ------- Change in net assets..................................... (15,424) 34,502 Net Assets: Beginning of period..................................... 69,272 34,770 -------- ------- End of period........................................... $ 53,848 $69,272 ======== =======
(a) Formerly Classic Shares. (b) Formerly Premier Shares. See notes to financial statements 114 AMSOUTH FUNDS Enhanced Market Fund Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended July 31, July 31, July 31, 2001 + 2000 1999 (a) ---------- ---------- ------------ Net Asset Value, Beginning of Period....... $ 14.64 $ 13.86 $ 10.00 ------- ------- ------- Investment Activities Net investment income..................... 0.03 0.07 0.09 Net realized and unrealized gains (losses) from investments and futures............. (2.15) 1.23 3.89 ------- ------- ------- Total from Investment Activities.......... (2.12) 1.30 3.98 ------- ------- ------- Distributions Net investment income..................... (0.03) (0.07) (0.09) Net realized gains from investment transactions............................. (0.22) (0.45) (0.03) ------- ------- ------- Total Distributions....................... (0.25) (0.52) (0.12) ------- ------- ------- Change in Net Asset Value.................. (2.37) 0.78 3.86 ------- ------- ------- Net Asset Value, End of Period............. $ 12.27 $ 14.64 $ 13.86 ======= ======= ======= Total Return (excludes sales charge)....... (14.60)% 9.46% 39.93%(b) Ratios/Supplemental Data: Net Assets at end of period (000).......... $24,666 $20,555 $14,365 Ratio of expenses to average net assets.... 1.04% 1.01% 0.88%(c) Ratio of net investment income to average net assets................................ 0.26% 0.48% 0.79%(c) Ratio of expenses to average net assets*... 1.14% 1.22% 1.52%(c) Portfolio turnover**....................... 42% 30% 36%
/\ Formerly Classic Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from September 1, 1998 (commencement of operations) through July 31, 1999. (b) Not annualized. (c) Annualized. See notes to financial statements 115 AMSOUTH FUNDS Enhanced Market Fund Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended July 31, July 31, July 31, 2001 + 2000 1999 (a) ---------- ---------- ------------ Net Asset Value, Beginning of Period...... $ 14.55 $ 13.82 $10.30 ------- ------- ------ Investment Activities Net investment income (loss)............. (0.06) (0.04) 0.03 Net realized and unrealized gains (losses) from investments and futures... (2.14) 1.22 3.55 ------- ------- ------ Total from Investment Activities......... (2.20) 1.18 3.58 ------- ------- ------ Distributions Net investment income.................... (0.02) -- (0.03) Net realized gains from investment transactions............................ (0.22) (0.45) (0.03) ------- ------- ------ Total Distributions...................... (0.24) (0.45) (0.06) ------- ------- ------ Change in Net Asset Value................. (2.44) 0.73 3.52 ------- ------- ------ Net Asset Value, End of Period............ $ 12.11 $ 14.55 $13.82 ======= ======= ====== Total Return (excludes redemption charge).................................. (15.28)% 8.65% 34.85%(b) Ratios/Supplemental Data: Net Assets at end of period (000)......... $13,713 $17,095 $6,132 Ratio of expenses to average net assets... 1.80% 1.77% 1.73%(c) Ratio of net investment income to average net assets............................... (0.48)% (0.31)% (0.12)%(c) Ratio of expenses to average net assets*.. 1.89% 1.93% 2.28%(c) Portfolio turnover**...................... 42% 30% 36%
+ Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from September 2, 1998 (commencement of operations) through July 31, 1999. (b) Not annualized. (c) Annualized. See notes to financial statements 116 AMSOUTH FUNDS Enhanced Market Fund Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended July 31, July 31, July 31, 2001 + 2000 1999 (a) ---------- ---------- ------------ Net Asset Value, Beginning of Period....... $ 14.65 $ 13.86 $ 12.18 ------- ------- ------- Investment Activities Net investment income..................... 0.06 0.10 0.07 Net realized and unrealized gains (losses) from investments and futures............. (2.17) 1.23 1.71 ------- ------- ------- Total from Investment Activities.......... (2.11) 1.33 1.78 ------- ------- ------- Distributions Net investment income..................... (0.04) (0.09) (0.07) Net realized gains from investment transactions............................. (0.22) (0.45) (0.03) ------- ------- ------- Total Distributions....................... (0.26) (0.54) (0.10) ------- ------- ------- Change in Net Asset Value.................. (2.37) 0.79 1.68 ------- ------- ------- Net Asset Value, End of Period............. $ 12.28 $ 14.65 $ 13.86 ======= ======= ======= Total Return............................... (14.53)% 9.73% 14.71%(b) Ratios/Supplemental Data: Net Assets at end of period (000).......... $15,469 $31,622 $14,273 Ratio of expenses to average net assets.... 0.90% 0.81% 0.74%(c) Ratio of net investment income to average net assets................................ 0.43% 0.65% 0.90%(c) Ratio of expenses to average net assets*... 1.04% 0.98% 1.29%(c) Portfolio turnover**....................... 42% 30% 36%
/\ Formerly Premier Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from December 11, 1998 (commencement of operations) through July 31, 1999. (b) Not annualized. (c) Annualized. See notes to financial statements 117 AMSOUTH FUNDS Schedule of Portfolio Investments International Equity Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks (98.5%)
Shares Value --------- -------- Brazil (1.5%) Banking (0.6%) Banco Bradesco S.A. -- ADR (b).............................. 192,700 $ 926 -------- Beverages (0.5%) Companhia de Bebidas das Americas --ADR..................... 36,000 733 -------- Telecommunications (0.4%) Tele Norte Leste Participacoes S.A. --ADR................... 46,109 579 -------- 2,238 -------- China (0.7%) Telecommunications (0.7%) China Mobile, Ltd. -- ADR (b)............................... 48,300 1,070 -------- Finland (1.0%) Forest Products & Paper (1.0%) UPM-Kymmene OYJ............................................. 49,100 1,461 -------- France (14.7%) Banking (1.5%) BNP Paribas................................................. 25,420 2,209 -------- Chemicals (1.3%) Aventis S.A................................................. 24,551 1,887 -------- Diversified (1.6%) Lagardere S.C.A............................................. 46,200 2,435 -------- Electrical & Electronics (0.5%) Alcatel Alsthom............................................. 40,700 725 -------- Insurance (1.8%) AXA......................................................... 91,160 2,668 -------- Materials & Commodities (0.7%) Compagnie de St. Gobain..................................... 6,940 1,023 -------- Multi-Industry (4.9%) Alstom...................................................... 71,890 2,003 Suez SA..................................................... 87,800 2,963 Vivendi Universal SA........................................ 40,838 2,394 -------- 7,360 -------- Oil & Gas Production & Services (2.4%) TotalFinaElf S.A............................................ 25,541 3,634 -------- 21,941 -------- Germany (6.3%) Banking (1.9%) Bayerische Hypo-und Vereinsbank............................. 65,160 2,896 -------- Insurance (2.5%) Allianz AG.................................................. 13,422 3,764 -------- Multi-Industry (1.9%) E.On AG..................................................... 33,000 1,799 Thyssen Krupp AG............................................ 71,200 979 -------- 2,778 -------- 9,438 -------- Hong Kong (0.9%) Diversified (0.9%) Hutchison Whampoa, Ltd...................................... 143,000 1,380 --------
Common Stocks, continued
Shares Value --------- -------- Ireland (1.2%) Pharmaceutical (1.2%) Elan Corp., PLC -- ADR (b).................................. 30,700 $ 1,773 -------- Italy (4.0%) Banking (1.1%) San Paolo -- IMI SpA........................................ 134,300 1,664 -------- Insurance (0.8%) Alleanza Assicurazioni SpA.................................. 102,430 1,139 -------- Oil & Gas Production & Services (2.1%) ENI S.p.A................................................... 260,400 3,165 -------- 5,968 -------- Japan (22.0%) Automobile (3.8%) Nissan Motor Co., Ltd. ..................................... 470,000 3,229 Toyota Motor Corp. ......................................... 72,200 2,382 -------- 5,611 -------- Banking (3.6%) Mizuho Holdings, Inc. ...................................... 388 1,491 Sumitomo Mitsui Banking Corp. .............................. 336,600 2,410 Sumitomo Trust & Banking, Ltd. ............................. 258,000 1,496 -------- 5,397 -------- Computer Systems (1.6%) Fujitsu Ltd. ............................................... 260,000 2,426 -------- Electrical & Electronics (3.7%) Hitachi Ltd. ............................................... 301,000 2,533 Kyocera Corp. .............................................. 7,500 562 Sony Corp. ................................................. 47,700 2,349 -------- 5,444 -------- Financial Services (3.1%) Acom Co., Ltd. ............................................. 11,600 946 Nikko Securities Co. (The), Ltd. ........................... 367,000 2,304 Orix Corp. ................................................. 15,400 1,301 -------- 4,551 -------- Food & Household Products (1.4%) Kao Corp. .................................................. 89,000 2,081 -------- Office Equipment (1.2%) Canon, Inc. ................................................ 51,000 1,723 -------- Pharmaceutical (1.7%) Yamanouchi Pharmaceutical Co., Ltd. ........................ 92,000 2,549 -------- Railroads (0.8%) East Japan Railway Co. ..................................... 219 1,173 -------- Telecommunications (1.1%) NTT DoCoMo.................................................. 123 1,704 -------- Tobacco (0.0%) Japan Tobacco, Inc. ........................................ 7 51 -------- 32,710 -------- Mexico (0.6%) Telecommunications (0.6%) Telefonos de Mexico SA de CV -- Class L, ADR................ 23,900 829 --------
Continued 118 AMSOUTH FUNDS Schedule of Portfolio Investments International Equity Fund July 31, 2001 (Amounts in thousands, except shares) Common Stocks, continued
Shares Value --------- -------- Netherlands (11.9%) Banking (2.5%) ABN-AMRO Holding NV......................................... 208,200 $ 3,678 -------- Beverages (1.5%) Heineken NV................................................. 58,206 2,297 -------- Chemicals (2.2%) Akzo Nobel NV............................................... 78,550 3,281 -------- Electrical & Electronics (2.5%) Philips Electronics NV...................................... 133,432 3,731 -------- Financial Services (2.2%) Fortis NV................................................... 50,800 1,325 ING Groep NV................................................ 58,000 1,889 -------- 3,214 -------- Publishing (1.0%) Wolters Kluwer NV -- CVA.................................... 55,900 1,481 -------- 17,682 -------- Portugal (1.4%) Telecommunications (1.4%) Portugal Telecom, SGPS, S.A., Bonus Rights.................. 284,948 2,042 -------- Singapore (2.5%) Banking (2.5%) Oversea-Chinese Banking Corp., Ltd. ........................ 226,050 1,430 United Overseas Bank, Ltd. ................................. 401,632 2,341 -------- 3,771 -------- South Korea (1.0%) Telecommunications (1.0%) Korea Telecom Corp. -- ADR.................................. 48,100 1,020 SK Telecom Co., Ltd. -- ADR................................. 21,600 396 -------- 1,416 -------- Spain (3.1%) Energy Sources (1.9%) Endesa S.A. ................................................ 167,300 2,730 -------- Telecommunications (1.2%) Telefonica de Espana (b).................................... 152,243 1,854 -------- 4,584 -------- Sweden (3.1%) Appliances & Household Durables (1.2%) Electrolux AB, Class B...................................... 121,200 1,819 -------- Investment Company (1.9%) Investor AB, B Shares....................................... 226,400 2,812 -------- 4,631 -------- Switzerland (2.3%) Insurance (0.9%) Zurich Financial Services AG................................ 4,220 1,400 -------- Machinery & Engineering (0.1%) ABB Ltd. ................................................... 9,513 105 -------- Pharmaceutical (1.3%) Roche Holding AG............................................ 24,900 1,896 -------- 3,401 -------- Taiwan (0.7%) Semiconductors (0.7%) Taiwan Semiconductor Manufacturing Co., Ltd. -- ADR......... 65,660 1,070 --------
Common Stocks, continued
Shares Value --------- -------- United Kingdom (19.6%) Aerospace & Military Technology (1.3%) British Aerospace PLC....................................... 363,000 $ 1,931 -------- Banking (2.7%) HSBC Holdings PLC........................................... 351,300 4,068 -------- Beverages (2.8%) Diageo PLC.................................................. 281,768 2,891 South African Breweries PLC................................. 164,000 1,227 -------- 4,118 -------- Electrical & Electronics (1.0%) Invensys PLC................................................ 1,238,500 1,505 -------- Energy Sources (2.6%) BP Amoco PLC................................................ 472,700 3,934 -------- Food & Household Products (1.4%) Cadbury Schweppes PLC....................................... 305,800 2,085 -------- Food Retailer (1.4%) Tesco PLC................................................... 572,400 2,044 -------- Pharmaceutical (0.9%) GlaxoSmithKline PLC......................................... 48,638 1,405 -------- Retail (1.1%) Great Universal Stores PLC.................................. 176,620 1,571 -------- Telecommunications (3.5%) British Telecommunications PLC.............................. 459,640 3,195 Vodafone Airtouch PLC....................................... 974,000 2,131 -------- 5,326 -------- Utilities -- Electrical & Gas (0.9%) National Grid Group PLC..................................... 188,000 1,273 -------- 29,260 -------- TOTAL COMMON STOCKS......................................... 146,665 --------
Cash Equivalents (6.2%) Bank of New York Deposit Account............................ 17 --* BT Institutional Liquid Assets Fund......................... 9,271,723 9,272 -------- TOTAL CASH EQUIVALENTS...................................... 9,272 -------- TOTAL INVESTMENTS (Cost $180,968) (a) -- 104.7%.............................. 155,937 Liabilities in excess of other assets -- (4.7)%............. (6,992) -------- NET ASSETS -- 100.0%........................................ $148,945 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized depreciation of securities as follows: Unrealized appreciation........................................... $ 3,827 Unrealized depreciation........................................... (28,858) -------- Net unrealized depreciation....................................... $(25,031) ========
(b) Represents non-income producing securities. ADR -- American Depositary Receipt PLC -- Public Limited Company * Due to rounding, figure is below thousand-dollar threshold. See notes to financial statements 119 AMSOUTH FUNDS International Equity Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $180,968)......................... $155,937 Foreign currency (cost $35)................................... 35 Interest and dividends receivable............................. 185 Receivable for capital shares issued.......................... 2 Receivable for investments sold............................... 2,296 Receivable for reclaims....................................... 194 Prepaid expenses and other assets............................. 15 -------- Total Assets................................................. 158,664 Liabilities: Payable for investments purchased............................. $8,349 Payable for capital shares redeemed........................... 1,257 Accrued expenses and other payables: Investment advisory fees..................................... 54 Administration fees.......................................... 4 Shareholder servicing and distribution fees.................. 13 Other........................................................ 42 ------ Total Liabilities............................................ 9,719 -------- Net Assets: Capital....................................................... 177,817 Accumulated net investment income............................. 144 Accumulated net realized losses from investments and foreign currency transactions........................................ (3,987) Unrealized depreciation from investments and translation of assets and liabilities denominated in foreign currencies..... (25,029) -------- Net Assets.................................................... $148,945 ======== Class A Shares Net Assets................................................... $ 2,685 Shares outstanding........................................... 283 Redemption price per share................................... $ 9.49 ======== Class A Shares -- Maximum Sales Charge........................ 5.50% -------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net assets value adjusted to the nearest cent)... $ 10.04 ======== Class B Shares Net Assets................................................... $ 516 Shares outstanding........................................... 55 Offering price per share*.................................... $ 9.35 ======== Trust Shares (b) Net Assets................................................... $145,744 Shares outstanding........................................... 15,346 Offering and redemption price per share...................... $ 9.50 ========
* Redemption price per share varies by length of time shares are held. (a) Formerly ISG International Equity Fund. (b) Formerly Institutional Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Dividend income................................................ $ 2,665 Interest income................................................ 348 Foreign withholding tax expense................................ (297) -------- Total Investment Income....................................... 2,716 Expenses: Investment advisory fees....................................... $1,649 Administration fees............................................ 264 Distribution fees -- Class B Shares............................ 4 Shareholder servicing fees -- Class A Shares................... 6 Shareholder servicing fees -- Class B Shares................... 1 Shareholder servicing fees -- Trust Shares (b)................. 194 Custodian fees................................................. 86 Accounting fees................................................ 29 Transfer agent fees............................................ 63 Other fees..................................................... 76 ------ Total expenses before fee reductions.......................... 2,372 Expenses reduced by Investment Advisor........................ (264) Expenses reduced by Administrator............................. (66) Expenses reduced by Transfer Agent............................ (10) Expenses reduced by Distributor............................... (65) Expenses reduced by Fund Accountant........................... (16) -------- Net expenses.................................................. 1,951 -------- Net Investment Income.......................................... 765 -------- Realized/Unrealized Losses from Investments: Net realized losses from investments and foreign currency transactions.................................................. (4,238) Change in unrealized appreciation/depreciation from investments and translation of assets and liabilities denominated in foreign currencies............................................ (26,049) -------- Net realized/unrealized losses from investments................ (30,287) -------- Change in net assets resulting from operations................. $(29,522) ========
See notes to financial statements 120 AMSOUTH FUNDS International Equity Fund (a) Statements of Changes in Net Assets
Year Ended Period Ended Year Ended July 31, July 31, December 31, 2001 2000 (b) 1999 ---------- ------------ ------------ (Amounts in thousands) From Investment Activities: Operations: Net investment income................... $ 765 $ 378 $ 258 Net realized gains (losses) from investment and foreign currency transactions........................... (4,238) 4,009 1,721 Change in unrealized appreciation/depreciation from investments and translation of assets and liabilities in foreign currencies.. (26,049) (8,547) 6,624 -------- -------- ------- Change in net assets resulting from operations.............................. (29,522) (4,160) 8,603 -------- -------- ------- Distributions to Class A Shareholders: From net investment income.............. (4) -- (11) From net realized gains on investment transactions........................... (58) -- -- Distributions to Class B Shareholders: From net investment income.............. -- -- (2)(c) From net realized losses on investment transactions........................... (18) -- -- Distributions to Trust Shareholders (d): From net investment income.............. (448) -- (475) From net realized gains on investment transactions........................... (3,891) -- -- -------- -------- ------- Change in net assets from shareholder distributions........................... (4,419) -- (488) -------- -------- ------- Change in net assets from capital transactions............................ 75,458 64,224 11,123 -------- -------- ------- Change in net assets..................... 41,517 60,064 19,238 Net Assets: Beginning of period..................... 107,428 47,364 28,126 -------- -------- ------- End of period........................... $148,945 $107,428 $47,364 ======== ======== =======
(a) Formerly ISG International Equity Fund. (b) For the period from January 1, 2000 through July 31, 2000. (c) For the period from February 2, 1999 (commencement of operations) through December 31, 1999. (d) Formerly Institutional Shares. See notes to financial statements 121 AMSOUTH FUNDS International Equity Fund (a) Financial Highlights, Class A Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Period Ended Period Ended July 31, July 31, December 31, December 31, February 28, 2001 + 2000 (b)+ 1999 1998 (c) 1998 (d) ---------- ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Period.... $ 12.36 $13.27 $10.58 $10.46 $ 10.00 ------- ------ ------ ------ ------- Investment Activities Net investment income (loss)................ 0.06 0.05 0.02 0.03 (0.02) Net realized and unrealized gains (losses) from investments and foreign currencies.... (2.54) (0.96) 2.81 0.12 0.49 ------- ------ ------ ------ ------- Total from Investment Activities............ (2.48) 0.91 2.83 0.15 0.47 ------- ------ ------ ------ ------- Distributions Net investment income.. (0.03) -- (0.14) (0.03) (0.01) Net realized gains from investment transactions.......... (0.36) -- -- -- -- ------- ------ ------ ------ ------- Total Distributions.... (0.39) -- (0.14) (0.03) (0.01) ------- ------ ------ ------ ------- Change in Net Asset Value.................. (2.87) 0.91 2.69 0.12 0.46 ------- ------ ------ ------ ------- Net Asset Value, End of Period................. $ 9.49 $12.36 $13.27 $10.58 $ 10.46 ======= ====== ====== ====== ======= Total Return (excludes sales charge).......... (20.62)% (6.78)%(e) 26.77% 1.42%(e) 4.71%(e) Ratios/Supplemental Data: Net Assets at end of period (000)........... $ 2,685 $1,799 $1,033 $ 149 $26,533 Ratio of expenses to average net assets..... 1.62% 1.69%(f) 1.59% 1.81%(f) 1.77%(f) Ratio of net investment income to average net assets................. 0.52% 0.69%(f) 0.26% 0.71%(f) (0.48)%(f) Ratio of expenses to average net assets*.... 1.89% 2.01%(f) 2.12% 2.16%(f) 2.27%(f) Portfolio turnover**.... 45% 32% 40% 62% 21%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG International Equity Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from March 1, 1998 through December 31, 1998. In conjunction with the reorganization of the ISG Funds, the Fund changed its fiscal year end to December 31. (d) For the period from August 15, 1997 (commencement of operations) through February 28, 1998. (e) Not annualized. (f) Annualized. See notes to financial statements 122 AMSOUTH FUNDS International Equity Fund (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 + 2000 (b)+ 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period.. $ 12.25 $13.21 $10.66 ------- ------ ------ Investment Activities Net investment loss.................. (0.05) -- (0.02) Net realized and unrealized gains (losses) from investments and foreign currencies.................. (2.49) (0.96) 2.69 ------- ------ ------ Total from Investment Activities..... (2.54) (0.96) 2.67 ------- ------ ------ Distributions Net investment income................ -- -- (0.12) Net realized gains from investment transactions........................ (0.36) -- -- ------- ------ ------ Total Distributions.................. (0.36) -- (0.12) ------- ------ ------ Change in Net Asset Value............. (2.90) (0.96) 2.55 ------- ------ ------ Net Asset Value, End of Period........ $ 9.35 $12.25 $13.21 ======= ====== ====== Total Return (excludes redemption charge).............................. (21.25)% (7.19)%(d) 25.98%(d) Ratios/Supplemental Data: Net Assets at end of period (000)..... $ 516 $ 595 $ 228 Ratio of expenses to average net assets............................... 2.38% 2.47%(e) 2.45%(e) Ratio of net investment income to average net assets................... (0.44)% (0.04)%(e) (0.54)%(e) Ratio of expenses to average net assets*.............................. 2.65% 2.72%(e) 2.73%(e) Portfolio turnover**.................. 45% 32% 40%
+ Net investment loss is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG International Equity Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from February 2, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 123 AMSOUTH FUNDS International Equity Fund (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Period Ended July 31, July, 31 December 31, December 31, 2001 + 2000 (b)+ 1999 1998 (c) ---------- ------------ ------------ ------------ Net Asset Value, Beginning of Period.... $ 12.37 $ 13.27 $ 10.58 $ 10.05 -------- -------- ------- ------- Investment Activities Net investment income (loss)................ 0.06 0.06 0.08 (0.01) Net realized and unrealized gains (losses) from investments and foreign currencies.... (2.53) (0.96) 2.75 0.54 -------- -------- ------- ------- Total from Investment Activities............ (2.47) (0.90) 2.83 0.53 -------- -------- ------- ------- Distributions Net investment income.. (0.04) -- (0.14) -- Net realized gains from investment transactions.......... (0.36) -- -- -- -------- -------- ------- ------- Total Distributions.... (0.40) -- (0.14) -- -------- -------- ------- ------- Change in Net Asset Value.................. (2.87) (0.90) 2.69 0.53 -------- -------- ------- ------- Net Asset Value, End of Period................. $ 9.50 $ 12.37 $ 13.27 $ 10.58 ======== ======== ======= ======= Total Return............ (20.50)% (6.71)%(d) 26.72% 5.27%(d) Ratios/Supplemental Data: Net Assets at end of period (000)........... $145,744 $105,034 $46,104 $27,977 Ratio of expenses to average net assets..... 1.47% 1.59%(e) 1.56% 1.61%(e) Ratio of net investment income to average net assets................. 0.59% 0.83%(e) 0.80% (1.47)%(e) Ratio of expenses to average net assets*.... 1.79% 1.88%(e) 1.84% 1.89%(e) Portfolio turnover**.... 45% 32% 40% 62%
/\ Formerly Institutional Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG International Equity Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from December 14, 1998 (commencement of operations) through December 31, 1998. (d) Not annualized. (e) Annualized. See notes to financial statements 124 AMSOUTH FUNDS Schedule of Portfolio Investments Strategic Portfolios: Aggressive Growth Portfolio July 31, 2001 (Amounts in thousands, except shares) Investments in Affiliates (100.1%)
Shares Value --------- ------- Investment Companies (100.1%) AmSouth Capital Growth Fund, Trust Shares (b)................ 417,465 $ 4,517 AmSouth International Equity Fund, Trust Shares.............. 233,770 2,221 AmSouth Large Cap Fund, Trust Shares......................... 211,715 4,499 AmSouth Mid Cap Fund, Trust Shares (b)....................... 94,847 1,144 AmSouth Prime Money Market Fund, Trust Shares................ 2,481,410 2,481 AmSouth Small Cap Fund, Trust Shares (b)..................... 110,495 1,129 AmSouth Value Fund, Trust Shares............................. 448,138 9,115 ------- 25,106 ------- TOTAL INVESTMENTS IN AFFILIATES.............................. 25,106 ------- TOTAL INVESTMENTS (Cost $27,730) (a) -- 100.1%................................ 25,106 Liabilities in excess of other assets --(0.1%)............... (14) ------- NET ASSETS -- 100.0%......................................... $25,092 =======
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized depreciation of securities as follows: Unrealized appreciation............................................. $ 280 Unrealized depreciation............................................. (2,904) ------- Net unrealized depreciation......................................... $(2,624) =======
(b) Represents non-income producing security. See notes to financial statements 125 AMSOUTH FUNDS Strategic Portfolios: Aggressive Growth Portfolio (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments in affiliates, at value (cost $27,730)................ $25,106 Dividends receivable.............................................. 7 Prepaid expenses and other assets................................. 1 ------- Total Assets..................................................... 25,114 Liabilities: Payable for capital shares redeemed............................... $ 1 Accrued expenses and other payables: Investment advisory fees......................................... 1 Shareholder servicing and distribution fees...................... 2 Custodian fees................................................... 1 Other............................................................ 17 --- Total Liabilities................................................ 22 ------- Net Assets: Capital........................................................... 26,576 Accumulated net realized gains from investment transactions....... 1,140 Unrealized depreciation from investments.......................... (2,624) ------- Net Assets........................................................ $25,092 ======= Class A Shares Net Assets....................................................... $ 1,393 Shares outstanding............................................... 140 Redemption price per share....................................... $ 9.91 ======= Class A Shares -- Maximum Sales Charge............................ 5.50% ------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)........ $ 10.49 ======= Class B Shares Net Assets....................................................... $ 386 Shares outstanding............................................... 40 Offering price per share*........................................ $ 9.77 ======= Trust Shares (b) Net Assets....................................................... $23,313 Shares outstanding............................................... 2,355 Offering and redemption price per share.......................... $ 9.90 =======
* Redemption price per share varies by length of time shares are held. (a) Formerly ISG Aggressive Growth Portfolio. (b) Formerly Institutional Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Dividend income from affiliates................................... $ 520 ------- Expenses: Investment advisory fees.......................................... $51 Administration fees............................................... 51 Distribution fees -- Class B Shares............................... 3 Shareholder servicing fees -- Class A Shares...................... 2 Shareholder servicing fees -- Class B Shares...................... 1 Shareholder servicing fees -- Trust Shares (b).................... 36 Custodian fees.................................................... 7 Accounting fees................................................... 4 Transfer agent fees............................................... 70 Registration and filing fees...................................... 40 Other fees........................................................ 13 --- Total expenses before fee reductions............................. 278 Expenses reduced by Investment Advisor........................... (25) Expenses reduced by Administrator................................ (25) Expenses reduced by Transfer Agent............................... (26) Expenses reduced by Distributor.................................. (13) Expenses reduced by Fund Accountant.............................. (3) ------- Net expenses..................................................... 186 ------- Net Investment Income............................................. 334 ------- Realized/Unrealized Gains (Losses) from Investments: Net realized gains from investment transactions with affiliates... 1,011 Realized gain distributions from underlying funds................. 798 Change in unrealized appreciation/depreciation from investments... (3,202) ------- Net realized/unrealized losses from investments................... (1,393) ------- Change in net assets resulting from operations.................... $(1,059) =======
See notes to financial statements 126 AMSOUTH FUNDS Strategic Portfolios: Aggressive Growth Portfolio (a) Statements of Changes in Net Assets
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 2000 (b) 1999 (c) ---------- ------------ ------------ (Amounts in thousands) From Investment Activities: Operations: Net investment income................... $ 334 $ 43 $ 200 Net realized gains (losses) from investment transactions with affiliates............................. 1,011 (96) 190 Realized gain distributions from underlying funds....................... 798 -- 1,545 Change in unrealized appreciation/depreciation from investments............................ (3,202) 55 523 ------- ------- ------- Change in net assets resulting from operations.............................. (1,059) 2 2,458 ------- ------- ------- Distributions to Class A Shareholders: From net investment income.............. (8) (1) (4) From net realized gains on investment transactions........................... (54) -- (1) Distributions to Class B Shareholders: From net investment income.............. (4) -- (4)(d) From net realized gains on investment transactions........................... (39) -- (1)(d) Distributions to Trust Shareholders (f): From net investment income.............. (345) (38) (192)(e) From net realized gains on investment transactions........................... (2,158) -- (36)(e) ------- ------- ------- Change in net assets from shareholder distributions........................... (2,608) (39) (238) ------- ------- ------- Change in net assets from capital transactions............................ 7,408 1,635 17,533 ------- ------- ------- Change in net assets..................... 3,741 1,598 19,753 Net Assets: Beginning of period..................... 21,351 19,753 -- ------- ------- ------- End of period........................... $25,092 $21,351 $19,753 ======= ======= =======
(a) Formerly ISG Aggressive Growth Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. (c) For the period from January 13, 1999 (commencement of operations) December 31, 1999. (d) For the period from January 27, 1999 (commencement of operations) December 31, 1999. (e) For the period from January 28, 1999 (commencement of operations) December 31, 1999. (f) Formerly Institutional Shares. See notes to financial statements 127 AMSOUTH FUNDS Strategic Portfolios: Aggressive Growth Portfolio (a) Financial Highlights, Class A Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 + 2000 (b) 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period.... $ 11.53 $11.54 $10.00 ------- ------ ------ Investment Activities Net investment income.................. 0.08 0.02 0.09 Net realized and unrealized gains (losses) from investments with affiliates............................ (0.39) (0.01) 1.60 ------- ------ ------ Total from Investment Activities....... (0.31) 0.01 1.69 ------- ------ ------ Distributions Net investment income.................. (0.15) (0.02) (0.11) Net realized gains from investment transactions.......................... (1.16) -- (0.04) ------- ------ ------ Total Distributions.................... (1.31) (0.02) (0.15) ------- ------ ------ Change in Net Asset Value............... (1.62) (0.01) 1.54 ------- ------ ------ Net Asset Value, End of Period.......... $ 9.91 $11.53 $11.54 ======= ====== ====== Total Return (excludes sales charge).... (3.42%) 0.06%(d) 16.92%(d) Ratios/Supplemental Data: Net Assets at end of period (000)....... $ 1,393 $ 476 $ 450 Ratio of expenses to average net assets................................. 0.79% 0.86%(e) 0.96%(e) Ratio of net investment income to average net assets..................... 0.78% 0.26%(e) 1.65%(e) Ratio of expenses to average net assets*................................ 1.20% 1.24%(e) 6.10%(e) Portfolio turnover**.................... 36% 22% 95%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole with out distinguishing between the classes of shares issued. (a) Formerly ISG Aggressive Growth Portfolio. (b) For the period January 1, 2000 through July 31, 2000. In conjuction with the reorganization of the AmSouth Funds, the fund changed its fiscal year end to July 31. (c) For the period from January 13, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 128 AMSOUTH FUNDS Strategic Portfolios: Aggressive Growth Portfolio (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 + 2000 (b) 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period... $11.42 $11.47 $10.03 ------ ------ ------ Investment Activities Net investment income (loss).......... 0.06 (0.03) 0.07 Net realized and unrealized gains (losses) from investments with affiliates........................... (0.44) (0.02) 1.50 ------ ------ ------ Total from Investment Activities...... (0.38) (0.05) 1.57 ------ ------ ------ Distributions Net investment income................. (0.11) -- (0.09) Net realized gains from investment transactions......................... (1.16) -- (0.04) ------ ------ ------ Total Distributions................... (1.27) -- (0.13) ------ ------ ------ Change in Net Asset Value.............. (1.65) (0.05) 1.44 ------ ------ ------ Net Asset Value, End of Period......... $ 9.77 $11.42 $11.47 ====== ====== ====== Total Return (excludes redemption charge)............................... (4.06)% (0.43)%(d) 15.70%(d) Ratios/Supplemental Data: Net Assets at end of period (000)...... $ 386 $ 390 $ 456 Ratio of expenses to average net assets................................ 1.52% 1.56%(e) 1.52%(e) Ratio of net investment income to average net assets.................... 0.58% (0.44)%(e) 0.92%(e) Ratio of expenses to average net assets*............................... 1.93% 1.94%(e) 7.86%(e) Portfolio turnover**................... 36% 22% 95%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Aggressive Growth Portfolio. (b) For the period January 1, 2000 through July 31, 2000. In conjuction with the reorganization of the AmSouth Funds, the fund changed its fiscal year end to July 31. (c) For the period from January 27, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 129 AMSOUTH FUNDS Strategic Portfolios: Aggressive Growth Portfolio (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July, 31 December 31, 2001 + 2000 (b) 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period.... $ 11.51 $ 11.53 $ 10.05 ------- ------- ------- Investment Activities Net investment income.................. 0.14 0.02 0.12 Net realized and unrealized gains (losses) from investments with affiliates............................ (0.44) (0.02) 1.52 ------- ------- ------- Total from Investment Activities....... (0.30) -- 1.64 ------- ------- ------- Distributions Net investment income.................. (0.15) (0.02) (0.12) Net realized gains from investment transactions.......................... (1.16) -- (0.04) ------- ------- ------- Total Distributions.................... (1.31) (0.02) (0.16) ------- ------- ------- Change in Net Asset Value............... (1.61) (0.02) 1.48 ------- ------- ------- Net Asset Value, End of Period.......... $ 9.90 $ 11.51 $ 11.53 ======= ======= ======= Total Return............................ (3.30%) 0.01%(d) 16.31%(d) Ratios/Supplemental Data: Net Assets at end of period (000)....... $23,313 $20,485 $18,847 Ratio of expenses to average net assets................................. 0.72% 0.75%(e) 0.73%(e) Ratio of net investment income to average net assets..................... 1.34% 0.38%(e) 3.23%(e) Ratio of expenses to average net assets*................................ 1.08% 1.09%(e) 2.10%(e) Portfolio turnover**.................... 36% 22% 95%
/\ Formerly Institutional Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Aggressive Growth Portfolio. (b) For the period January 1, 2000 through July 31, 2000. In conjuction with the reorganization of the AmSouth Funds, the fund changed its fiscal year end to July 31. (c) For the period from January 28, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 130 AMSOUTH FUNDS Schedule of Portfolio Investments Strategic Portfolios: Growth Portfolio July 31, 2001 (Amounts in thousands, except shares) Investments in Affiliates (100.0%)
Shares Value --------- ------- Investment Companies (100.0%) AmSouth Capital Growth Fund, Trust Shares (b)................ 249,770 $ 2,703 AmSouth Equity Income Fund, Trust Shares..................... 78,957 988 AmSouth Government Income Fund, Trust Shares................. 471,421 4,761 AmSouth International Equity Fund, Trust Shares.............. 142,874 1,357 AmSouth Large Cap Fund, Trust Shares......................... 127,477 2,709 AmSouth Mid Cap Fund, Trust Shares (b)....................... 56,279 679 AmSouth Prime Money Market Fund, Trust Shares................ 2,470,465 2,470 AmSouth Small Cap Fund, Trust Shares (b)..................... 65,767 672 AmSouth Value Fund, Trust Shares............................. 216,397 4,402 ------- 20,741 ------- TOTAL INVESTMENTS IN AFFILIATES.............................. 20,741 ------- TOTAL INVESTMENTS (Cost $22,431) (a) -- 100.0%................................ 20,741 Liabilities in excess of other assets -- (0.0%).............. (2) ------- NET ASSETS -- 100.0%......................................... $20,739 =======
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized depreciation of securities as follows: Unrealized appreciation............................................. $ 432 Unrealized depreciation............................................. (2,122) ------- Net unrealized depreciation......................................... $(1,690) =======
(b) Represents non-income producing security. See notes to financial statements 131 AMSOUTH FUNDS Strategic Portfolios: Growth Portfolio (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments in affiliates, at value (cost $22,431)................ $20,741 Dividends receivable.............................................. 8 Receivable for capital shares issued.............................. 6 ------- Total Assets..................................................... 20,755 Liabilities: Accrued expenses and other payables: Investment advisory fees......................................... $ 1 Shareholder servicing and distribution fees...................... 3 Other............................................................ 12 --- Total Liabilities................................................ 16 ------- Net Assets: Capital........................................................... 22,117 Accumulated net investment income................................. 19 Accumulated net realized gains from investment transactions....... 293 Unrealized depreciation from investments.......................... (1,690) ------- Net Assets........................................................ $20,739 ======= Class A Shares Net Assets....................................................... $ 981 Shares outstanding............................................... 105 Redemption price per share....................................... $ 9.38 ======= Class A Shares -- Maximum Sales Charge............................ 5.50% ------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)........ $ 9.93 ======= Class B Shares Net Assets....................................................... $ 1,710 Shares outstanding............................................... 183 Offering price per share*........................................ $ 9.34 ======= Trust Shares (b) Net Assets....................................................... $18,048 Shares outstanding............................................... 1,916 Offering and redemption price per share.......................... $ 9.42 =======
* Redemption price per share varies by length of time shares are held. (a) Formerly ISG Growth Portfolio. (b) Formerly Institutional Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Dividend income from affiliates................................... $ 661 ------- Expenses: Investment advisory fees.......................................... $42 Administration fees............................................... 42 Distribution fees -- Class B Shares............................... 10 Shareholder servicing fees -- Class A Shares...................... 2 Shareholder servicing fees -- Class B Shares...................... 3 Shareholder servicing fees -- Trust Shares (b).................... 29 Custodian fees.................................................... 6 Accounting fees................................................... 3 Transfer agent fees............................................... 59 Registration and filing fees...................................... 40 Other fees........................................................ 13 --- Total expenses before fee reductions............................. 249 Expenses reduced by Investment Advisor........................... (21) Expenses reduced by Administrator................................ (21) Expenses reduced by Transfer Agent............................... (27) Expenses reduced by Distributor.................................. (12) Expenses reduced by Fund Accountant.............................. (2) ------- Net expenses..................................................... 166 ------- Net Investment Income............................................. 495 ------- Realized/Unrealized Gains (Losses) from Investments: Net realized gains from investment transactions with affiliates... 169 Realized gain distributions from underlying funds................. 543 Change in unrealized appreciation/depreciation from investments... (1,603) ------- Net realized/unrealized losses from investments................... (891) ------- Change in net assets resulting from operations.................... $ (396) =======
See notes to financial statements 132 AMSOUTH FUNDS Strategic Portfolios: Growth Portfolio (a) Statements of Changes in Net Assets
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 2000 (b) 1999 (c) ---------- ------------ ------------ (Amounts in thousands) From Investment Activities: Operations: Net investment income................... $ 495 $ 142 $ 163 Net realized gains from investment transactions with affiliates........... 169 377 6 Realized gain distributions from underlying funds....................... 543 6 624 Change in unrealized appreciation/depreciation from investments............................ (1,603) (250) 163 ------- ------- ------- Change in net assets resulting from operations.............................. (396) 275 956 ------- ------- ------- Distributions to Class A Shareholders: From net investment income.............. (18) (2) (2)(d) From net realized gains on investment transactions........................... (49) -- (1)(d) Distributions to Class B Shareholders: From net investment income.............. (21) (5) (11)(e) From net realized gains on investment transactions........................... (80) -- (6)(e) Distributions to Trust Shareholders (f): From net investment income.............. (456) (116) (149) From net realized gains on investment transactions........................... (1,262) -- (35) ------- ------- ------- Change in net assets from shareholder distributions........................... (1,886) (123) (204) ------- ------- ------- Change in net assets from capital transactions............................ 1,522 8,813 11,782 ------- ------- ------- Change in net assets..................... (760) 8,965 12,534 Net Assets: Beginning of period..................... 21,499 12,534 -- ------- ------- ------- End of period........................... $20,739 $21,499 $12,534 ======= ======= =======
(a) Formerly ISG Growth Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. (c) For the period from February 1, 1999 (commencement of operations) through December 31, 1999. (d) For the period from February 11, 1999 (commencement of operations) through December 31, 1999. (e) For the period from February 15, 1999 (commencement of operations) through December 31, 1999. (f) Formerly Institutional Shares. See notes to financial statements 133 AMSOUTH FUNDS Strategic Portfolios: Growth Portfolio (a) Financial Highlights, Class A Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 + 2000 (b) 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period... $10.47 $10.58 $ 9.93 ------ ------ ------ Investment Activities Net investment income................. 0.23 0.07 0.14 Net realized and unrealized gains (losses) from investments with affiliates........................... (0.42) (0.11) 0.73 ------ ------ ------ Total from Investment Activities...... (0.19) (0.04) 0.87 ------ ------ ------ Distributions Net investment income................. (0.23) (0.07) (0.14) Net realized gains from investment transactions......................... (0.67) -- (0.08) ------ ------ ------ Total Distributions................... (0.90) (0.07) (0.22) ------ ------ ------ Change in Net Asset Value.............. (1.09) (0.11) 0.65 ------ ------ ------ Net Asset Value, End of Period......... $ 9.38 $10.47 $10.58 ====== ====== ====== Total Return (excludes sales charge)... (2.04%) (0.43%)(d) 8.85%(d) Ratios/Supplemental Data: Net Assets at end of period (000)...... $ 981 $ 763 $ 164 Ratio of expenses to average net assets................................ 0.78% 0.86%(e) 0.94%(e) Ratio of net investment income to average net assets.................... 2.31% 1.27%(e) 2.44%(e) Ratio of expenses to average net assets*............................... 1.22% 1.25%(e) 9.41%(e) Portfolio turnover**................... 38% 97% 76%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Growth Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from February 11, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 134 AMSOUTH FUNDS Strategic Portfolios: Growth Portfolio (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 + 2000 (b) 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period... $10.44 $10.57 $ 9.84 ------ ------ ------ Investment Activities Net investment income................. 0.15 0.03 0.12 Net realized and unrealized gains (losses) from investments with affiliates........................... (0.41) (0.12) 0.81 ------ ------ ------ Total from Investment Activities...... (0.26) (0.09) 0.93 ------ ------ ------ Distributions Net investment income................. (0.17) (0.04) (0.12) Net realized gains from investment transactions......................... (0.67) -- (0.08) ------ ------ ------ Total Distributions................... (0.84) (0.04) (0.20) ------ ------ ------ Change in Net Asset Value.............. (1.10) (0.13) 0.73 ------ ------ ------ Net Asset Value, End of Period......... $ 9.34 $10.44 $10.57 ====== ====== ====== Total Return (excludes redemption charge)............................... (2.82%) (0.84%)(d) 9.48%(d) Ratios/Supplemental Data: Net Assets at end of period (000)...... $1,710 $1,241 $ 998 Ratio of expenses to average net assets................................ 1.53% 1.56%(e) 1.55%(e) Ratio of net investment income to average net assets.................... 1.53% 0.46%(e) 2.14%(e) Ratio of expenses to average net assets*............................... 1.97% 1.97%(e) 6.75%(e) Portfolio turnover**................... 38% 97% 76%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Growth Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from February 15, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 135 AMSOUTH FUNDS Strategic Portfolios: Growth Portfolio (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July, 31 December 31, 2001 + 2000 (b) 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period... $ 10.51 $ 10.61 $ 10.00 ------- ------- ------- Investment Activities Net investment income................. 0.24 0.08 0.16 Net realized and unrealized gains (losses) from investments with affiliates........................... (0.42) (0.11) 0.69 ------- ------- ------- Total from Investment Activities...... (0.18) (0.03) 0.85 ------- ------- ------- Distributions Net investment income................. (0.24) (0.07) (0.16) Net realized gains from investment transactions......................... (0.67) -- (0.08) ------- ------- ------- Total Distributions................... (0.91) (0.07) (0.24) ------- ------- ------- Change in Net Asset Value.............. (1.09) (0.10) 0.61 ------- ------- ------- Net Asset Value, End of Period......... $ 9.42 $ 10.51 $ 10.61 ======= ======= ======= Total Return........................... (1.98%) (0.29%)(d) 8.59%(d) Ratios/Supplemental Data: Net Assets at end of period (000)...... $18,048 $19,495 $11,372 Ratio of expenses to average net assets................................ 0.73% 0.76%(e) 0.73%(e) Ratio of net investment income to average net assets.................... 2.40% 1.28%(e) 4.82%(e) Ratio of expenses to average net assets*............................... 1.12% 1.10%(e) 3.14%(e) Portfolio turnover**................... 38% 97% 76%
/\ Formerly Institutional Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Growth Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from February 1, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 136 AMSOUTH FUNDS Schedule of Portfolio Investments Strategic Portfolios: Growth and Income Portfolio July 31, 2001 (Amounts in thousands, except shares) Investments in Affiliates (100.0%)
Shares Value --------- ------- Investment Companies (100.0%) AmSouth Capital Growth Fund, Trust Shares (b)................ 769,237 $ 8,323 AmSouth Equity Income Fund, Trust Shares..................... 251,897 3,151 AmSouth Government Income Fund, Trust Shares................. 2,629,963 26,563 AmSouth International Equity Fund, Trust Shares.............. 434,180 4,125 AmSouth Large Cap Fund, Trust Shares......................... 395,788 8,410 AmSouth Limited Term Bond Fund, Trust Shares................. 1,021,290 10,775 AmSouth Mid Cap Fund, Trust Shares (b)....................... 174,916 2,109 AmSouth Prime Money Market Fund, Trust Shares................ 4,137,608 4,138 AmSouth Small Cap Fund, Trust Shares (b)..................... 202,587 2,070 AmSouth Value Fund, Trust Shares............................. 660,312 13,431 ------- 83,095 ------- TOTAL INVESTMENTS IN AFFILIATES.............................. 83,095 ------- TOTAL INVESTMENTS (Cost $86,576) (a) -- 100.0%................................ 83,095 Liabilities in excess of other assets --(0.0%)............... (26) ------- NET ASSETS -- 100.0%......................................... $83,069 =======
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized depreciation of securities as follows: Unrealized appreciation............................................. $ 2,284 Unrealized depreciation............................................. (5,765) ------- Net unrealized depreciation......................................... $(3,481) =======
(b) Represents non-income producing security. See notes to financial statements 137 AMSOUTH FUNDS Strategic Portfolios: Growth and Income Portfolio (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments in affiliates, at value (cost $86,576)................ $83,095 Dividends receivable.............................................. 12 Receivable for capital shares issued.............................. 2 Prepaid expenses and other assets................................. 1 ------- Total Assets..................................................... 83,110 Liabilities: Payable for capital shares redeemed............................... $ 6 Accrued expenses and other payables: Investment advisory fees......................................... 3 Administration fees.............................................. 3 Shareholder servicing and distribution fees...................... 8 Other............................................................ 21 --- Total Liabilities................................................ 41 ------- Net Assets: Capital........................................................... 85,390 Accumulated net investment income................................. 157 Accumulated net realized gains from investment transactions....... 1,003 Unrealized depreciation from investments.......................... (3,481) ------- Net Assets........................................................ $83,069 ======= Class A Shares Net Assets....................................................... $ 6,535 Shares outstanding............................................... 669 Redemption price per share....................................... $ 9.76 ======= Class A Shares -- Maximum Sales Charge............................ 5.50% ------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)............................................ $ 10.33 ======= Class B Shares Net Assets....................................................... $ 1,656 Shares outstanding............................................... 170 Offering price per share*........................................ $ 9.77 ======= Trust Shares (b) Net Assets....................................................... $74,878 Shares outstanding............................................... 7,641 Offering and redemption price per share.......................... $ 9.80 =======
* Redemption price per share varies by length of time shares are held. (a) Formerly ISG Growth & Income Portfolio. (b) Formerly Institutional Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Dividend income from affiliates.............. $3,295 ------ Expenses: Investment advisory fees.................... $173 Administration fees...... 173 Distribution fees -- Class B Shares......... 12 Shareholder servicing fees -- Class A Shares.. 4 Shareholder servicing fees -- Class B Shares.. 4 Shareholder servicing fees -- Trust Shares (b)..................... 125 Custodian fees........... 24 Accounting fees.......... 13 Transfer agent fees...... 73 Registration and filing fees.................... 39 Other fees............... 27 ---- Total expenses before fee reductions......... 667 Expenses reduced by Investment Advisor..... (87) Expenses reduced by Transfer Agent......... (17) Expenses reduced by Distributor............ (45) Expenses reduced by Fund Accountant............. (10) ------ Net expenses............ 508 ------ Net Investment Income.... 2,787 ------ Realized/Unrealized Gains (Losses) from Investments: Net realized losses from investment transactions with affiliates......... (547) Realized gain distributions from underlying funds........ 2,374 Change in unrealized appreciation/depreciation from investments........ (2,996) ------ Net realized/unrealized losses from investments............. (1,169) ------ Change in net assets resulting from operations.............. $1,618 ======
See notes to financial statements 138 AMSOUTH FUNDS Strategic Portfolios: Growth and Income Portfolio (a) Statements of Changes in Net Assets
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 2000 (b) 1999 (c) ---------- ------------ ------------ (Amounts in thousands) From Investment Activities: Operations: Net investment income................... $ 2,787 $ 1,254 $ 839 Net realized gains (losses) from investment transactions with affiliates............................. (547) (486) 363 Realized gain distributions from underlying funds....................... 2,374 4 4,971 Change in unrealized appreciation/depreciation from investments............................ (2,996) 744 (1,229) ------- ------- ------- Change in net assets resulting from operations.............................. 1,618 1,516 4,944 ------- ------- ------- Distributions to Class A Shareholders: From net investment income.............. (42) (4) (5)(d) From net realized gains on investment transactions........................... (16) -- (2)(d) Distributions to Class B Shareholders: From net investment income.............. (40) (15) (12) From net realized gains on investment transactions........................... (94) -- (5) Distributions to Trust Shareholders (f): From net investment income.............. (2,740) (1,043) (822)(e) From net realized gains on investment transactions........................... (5,462) -- (97)(e) ------- ------- ------- Change in net assets from shareholder distributions........................... (8,394) (1,062) (943) ------- ------- ------- Change in net assets from capital transactions............................ 508 (77) 84,959 ------- ------- ------- Change in net assets..................... (6,268) 377 88,960 Net Assets: Beginning of period..................... 89,337 88,960 -- ------- ------- ------- End of period........................... $83,069 $89,337 $88,960 ======= ======= =======
(a) Formerly ISG Growth & Income Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. (c) For the period from January 27, 1999 (commencement of operations) through December 31, 1999. (d) For the period from March 8, 1999 (commencement of operations) through December 31, 1999. (e) For the period from February 8, 1999 (commencement of operations) through December 31, 1999. (f) Formerly Institutional Shares. See notes to financial statements 139 AMSOUTH FUNDS Strategic Portfolios: Growth and Income Portfolio (a) Financial Highlights, Class A Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 + 2000 (b) 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period.... $10.54 $10.48 $10.10 ------ ------ ------ Investment Activities Net investment income.................. 0.24 0.14 0.11 Net realized and unrealized gains (losses) from investments with affiliates............................ (0.07) 0.04 0.41 ------ ------ ------ Total from Investment Activities....... 0.17 0.18 0.52 ------ ------ ------ Distributions Net investment income.................. (0.32) (0.12) (0.11) Net realized gains from investment transactions.......................... (0.63) -- (0.03) ------ ------ ------ Total Distributions.................... (0.95) (0.12) (0.14) ------ ------ ------ Change in Net Asset Value............... (0.78) 0.06 0.38 ------ ------ ------ Net Asset Value, End of Period.......... $ 9.76 $10.54 $10.48 ====== ====== ====== Total Return (excludes sales charge).... 1.61% 1.69%(d) 5.21%(d) Ratios/Supplemental Data: Net Assets at end of period (000)....... $6,535 $ 271 $ 535 Ratio of expenses to average net assets................................. 0.63% 0.72%(e) 0.95%(e) Ratio of net investment income to average net assets..................... 2.44% 2.15%(e) 2.44%(e) Ratio of expenses to average net assets*................................ 0.87% 0.88%(e) 2.27%(e) Portfolio turnover**.................... 51% 21% 57%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Growth & Income Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from March 8, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 140 AMSOUTH FUNDS Strategic Portfolios: Growth and Income Portfolio (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended July 31, July 31, December 31, 2001 + 2000 (b) 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period.... $10.53 $10.50 $10.00 ------ ------ ------ Investment Activities Net investment income.................. 0.24 0.10 0.08 Net realized and unrealized gains (losses) from investments with affiliates............................ (0.12) 0.02 0.53 ------ ------ ------ Total from Investment Activities....... 0.12 0.12 0.61 ------ ------ ------ Distributions Net investment income.................. (0.25) (0.09) (0.08) Net realized gains from investment transactions.......................... (0.63) -- (0.03) ------ ------ ------ Total Distributions.................... (0.88) (0.09) (0.11) ------ ------ ------ Change in Net Asset Value............... (0.76) 0.03 0.50 ------ ------ ------ Net Asset Value, End of Period.......... $ 9.77 $10.53 $10.50 ====== ====== ====== Total Return (excludes redemption charge)................................ 1.09% 1.13%(d) 6.10%(d) Ratios/Supplemental Data: Net Assets at end of period (000)....... $1,656 $1,613 $1,725 Ratio of expenses to average net assets................................. 1.37% 1.40%(e) 1.52%(e) Ratio of net investment income to average net assets..................... 2.40% 1.58%(e) 1.74%(e) Ratio of expenses to average net assets*................................ 1.60% 1.57%(e) 4.26%(e) Portfolio turnover**.................... 51% 21% 57%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Growth & Income Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from January 27, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 141 AMSOUTH FUNDS Strategic Portfolios: Growth and Income Portfolio (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July, 31 December 31, 2001 + 2000 (b) 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period.... $ 10.56 $ 10.51 $ 9.85 ------- ------- ------- Investment Activities Net investment income.................. 0.32 0.14 0.13 Net realized and unrealized gains (losses) from investments with affiliates............................ (0.12) 0.03 0.69 ------- ------- ------- Total from Investment Activities....... 0.20 0.17 0.82 ------- ------- ------- Distributions Net investment income.................. (0.33) (0.12) (0.13) Net realized gains from investment transactions.......................... (0.63) -- (0.03) ------- ------- ------- Total Distributions.................... (0.96) (0.12) (0.16) ------- ------- ------- Change in Net Asset Value............... (0.76) 0.05 0.66 ------- ------- ------- Net Asset Value, End of Period.......... $ 9.80 $ 10.56 $ 10.51 ======= ======= ======= Total Return............................ 1.84% 1.64%(d) 8.40%(d) Ratios/Supplemental Data: Net Assets at end of period (000)....... $74,878 $87,453 $86,700 Ratio of expenses to average net assets................................. 0.57% 0.58%(e) 0.70%(e) Ratio of net investment income to average net assets..................... 3.25% 2.39%(e) 3.43%(e) Ratio of expenses to average net assets*................................ 0.75% 0.72%(e) 0.98%(e) Portfolio turnover**.................... 51% 21% 57%
/\ Formerly Institutional Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Growth & Income Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from February 8, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 142 AMSOUTH FUNDS Schedule of Portfolio Investments Strategic Portfolios: Moderate Growth and Income Portfolio July 31, 2001 (Amounts in thousands, except shares) Investments in Affiliates (100.0%)
Shares Value --------- ------- Investment Companies (100.0%) AmSouth Capital Growth Fund, Trust Shares (b)................ 201,645 $ 2,182 AmSouth Equity Income Fund, Trust Shares..................... 51,249 641 AmSouth Government Income Fund, Trust Shares................. 751,495 7,590 AmSouth Large Cap Fund, Trust Shares......................... 103,280 2,195 AmSouth Limited Term Bond Fund, Trust Shares................. 407,891 4,303 AmSouth Prime Money Market Fund, Trust Shares................ 1,060,185 1,060 AmSouth Value Fund, Trust Shares............................. 185,055 3,764 ------- 21,735 ------- TOTAL INVESTMENTS IN AFFILIATES.............................. 21,735 ------- TOTAL INVESTMENTS (Cost $21,925) (a) -- 100.0%................................ 21,735 Liabilities in excess of other assets -- (0.0%).............. (9) ------- NET ASSETS -- 100.0%......................................... $21,726 =======
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized depreciation of securities as follows: Unrealized appreciation............................................... $ 669 Unrealized depreciation............................................... (859) ----- Net unrealized depreciation........................................... $(190) =====
(a) Represents non-income producing security. See notes to financial statements 143 AMSOUTH FUNDS Strategic Portfolios: Moderate Growth and Income Portfolio (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments in affiliates, at value (cost $21,925)................. $21,735 Dividends receivable............................................... 3 Receivable for capital shares issued............................... 1 Prepaid expenses and other assets.................................. 2 ------- Total Assets...................................................... 21,741 Liabilities: Accrued expenses and other payables: Investment advisory fees.......................................... $ 1 Shareholder sevicing and distribution fees........................ 3 Other............................................................. 11 --- Total Liabilities................................................. 15 ------- Net Assets: Capital............................................................ 21,762 Accumulated net investment income.................................. 49 Accumulated net realized gains from investment transactions........ 105 Unrealized depreciation from investments........................... (190) ------- Net Assets......................................................... $21,726 ======= Class A Shares Net Assets........................................................ $ 231 Shares outstanding................................................ 24 Redemption price per share........................................ $ 9.74 ======= Class A Shares -- Maximum Sales Charge............................. 5.50% ------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)................. $ 10.31 ======= Class B Shares Net Assets........................................................ $ 1,231 Shares outstanding................................................ 127 Offering price per share*......................................... $ 9.71 ======= Trust Shares (b) Net Assets........................................................ $20,264 Shares outstanding................................................ 2,076 Offering and redemption price per share........................... $ 9.76 =======
* Redemption price per share varies by length of time shares are held. (a) Formerly ISG Moderate Growth & Income Portfolio. (b) Formerly Institutional Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Dividend income from affiliates..................................... $ 907 ------ Expenses: Investment advisory fees............................................ $43 Administration fees................................................. 43 Distribution fees -- Class B Shares................................. 7 Shareholder servicing fees -- Class B Shares........................ 3 Shareholder servicing fees -- Trust Shares (b)...................... 31 Custodian fees...................................................... 6 Accounting fees..................................................... 3 Transfer agent fees................................................. 59 Registration and filing fees........................................ 37 Other fees.......................................................... 15 --- Total expenses before fee reductions............................... 247 Expenses reduced by Investment Advisor............................. (22) Expenses reduced by Administrator.................................. (22) Expenses reduced by Transfer Agent................................. (27) Expenses reduced by Distributor.................................... (11) Expenses reduced by Fund Accountant................................ (3) ------ Net expenses....................................................... 162 ------ Net Investment Income............................................... 745 ------ Realized/Unrealized Gains (Losses) from Investments: Net realized gains from investment transactions with affiliates..... 59 Realized gain distributions from underlying funds................... 316 Change in unrealized appreciation/depreciation from investments..... (88) ------ Net realized/unrealized gains from investments...................... 287 ------ Change in net assets resulting from operations...................... $1,032 ======
See notes to financial statements 144 AMSOUTH FUNDS Strategic Portfolios: Moderate Growth and Income Portfolio (a) Statements of Changes in Net Assets
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 2000 (b) 1999 (c) ---------- ------------ ------------ (Amounts in thousands) From Investment Activities: Operations: Net investment income................... $ 745 $ 388 $ 274 Net realized gains (losses) from investment transactions with affiliates............................. 59 (129) (40) Realized gain distributions from underlying funds....................... 316 1 897 Change in unrealized appreciation/depreciation from investments............................ (88) 268 (370) ------- ------- ------- Change in net assets resulting from operations.............................. 1,032 528 761 ------- ------- ------- Distributions to Class A Shareholders: From net investment income.............. (3) (1) (3)(d) From net realized gains on investment transactions........................... (2) -- (1)(d) Distributions to Class B Shareholders: From net investment income.............. (27) (10) (11) From net realized gains on investment transactions........................... (38) -- (5) Distributions to Trust Shareholders (f): From net investment income.............. (729) (314) (260)(e) From net realized gains on investment transactions........................... (885) -- (68)(e) ------- ------- ------- Change in net assets from shareholder distributions........................... (1,684) (325) (348) ------- ------- ------- Change in net assets from capital transactions............................ 1,417 (1,739) 22,084 ------- ------- ------- Change in net assets..................... 765 (1,536) 22,497 Net Assets: Beginning of period..................... 20,961 22,497 -- ------- ------- ------- End of period........................... $21,726 $20,961 $22,497 ======= ======= =======
(a) Formerly ISG Moderate Growth & Income Portfolio. (b) For the period January 1, 2000 through July 31, 2000. (c) For the period from January 28, 1999 (commencement of operations) through December 31, 1999. (d) For the period from February 9, 1999 (commencement of operations) through December 31, 1999. (e) For the period from February 10, 1999 (commencement of operations) through December 31, 1999. (f) Formerly Institutional Shares. See notes to financial statements 145 AMSOUTH FUNDS Strategic Portfolios: Moderate Growth and Income Portfolio (a) Financial Highlights, Class A Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 + 2000 (b) 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period..... $10.06 $ 9.96 $9.86 ------ ------ ----- Investment Activities Net investment income................... 0.32 0.14 0.17 Net realized and unrealized gains from investments with affiliates............ 0.15 0.10 0.16 ------ ------ ----- Total from Investment Activities........ 0.47 0.24 0.33 ------ ------ ----- Distributions Net investment income................... (0.34) (0.14) (0.17) Net realized gains from investment transactions........................... (0.45) -- (0.06) ------ ------ ----- Total Distributions..................... (0.79) (0.14) (0.23) ------ ------ ----- Change in Net Asset Value................ (0.32) 0.10 0.10 ------ ------ ----- Net Asset Value, End of Period........... $ 9.74 $10.06 $9.96 ====== ====== ===== Total Return (excludes sales charge)..... 4.91% 2.43%(d) 3.37%(d) Ratios/Supplemental Data: Net Assets at end of period (000)........ $ 231 $ 48 $ 172 Ratio of expenses to average net assets.. 0.77% 0.91%(e) 0.93%(e) Ratio of net investment income to average net assets.............................. 3.26% 2.85%(e) 3.32%(e) Ratio of expenses to average net assets*................................. 1.20% 1.26%(e) 9.78%(e) Portfolio turnover**..................... 62% 21% 124%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Moderate Growth & Income Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from February 9, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 146 AMSOUTH FUNDS Strategic Portfolios: Moderate Growth and Income Portfolio (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 + 2000 (b) 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period.... $10.04 $ 9.96 $10.00 ------ ------ ------ Investment Activities Net investment income.................. 0.25 0.13 0.13 Net realized and unrealized gains from investments with affiliates........... 0.15 0.07 0.02 ------ ------ ------ Total from Investment Activities....... 0.40 0.20 0.15 ------ ------ ------ Distributions Net investment income.................. (0.28) (0.12) (0.13) Net realized gains from investment transactions.......................... (0.45) -- (0.06) ------ ------ ------ Total Distributions.................... (0.73) (0.12) (0.19) ------ ------ ------ Change in Net Asset Value............... (0.33) 0.08 (0.04) ------ ------ ------ Net Asset Value, End of Period.......... $ 9.71 $10.04 $ 9.96 ====== ====== ====== Total Return (excludes redemption charge)................................ 4.09% 2.00%(d) 1.50%(d) Ratios/Supplemental Data: Net Assets at end of period (000)....... $1,231 $ 832 $ 941 Ratio of expenses to average net assets................................. 1.51% 1.55%(e) 1.54%(e) Ratio of net investment income to average net assets..................... 2.59% 2.19%(e) 2.80%(e) Ratio of expenses to average net assets*................................ 1.92% 1.88%(e) 6.90%(e) Portfolio turnover**.................... 62% 21% 124%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Moderate Growth & Income Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from January 28, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 147 AMSOUTH FUNDS Strategic Portfolios: Moderate Growth and Income Portfolio (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Period Ended July 31, July 31, December 31, 2001 + 2000 (b) 1999 (c) ---------- ------------ ------------ Net Asset Value, Beginning of Period.... $ 10.08 $ 9.98 $ 9.88 ------- ------- ------- Investment Activities Net investment income.................. 0.34 0.18 0.20 Net realized and unrealized gains from investments with affiliates........... 0.14 0.07 0.16 ------- ------- ------- Total from Investment Activities....... 0.48 0.25 0.36 ------- ------- ------- Distributions Net investment income.................. (0.35) (0.15) (0.20) Net realized gains from investment transactions.......................... (0.45) -- (0.06) ------- ------- ------- Total Distributions.................... (0.80) (0.15) (0.26) ------- ------- ------- Change in Net Asset Value............... (0.32) 0.10 0.10 ------- ------- ------- Net Asset Value, End of Period.......... $ 9.76 $ 10.08 $ 9.98 ======= ======= ======= Total Return............................ 4.93% 2.50%(d) 3.64%(d) Ratios/Supplemental Data: Net Assets at end of period (000)....... $20,264 $20,081 $21,384 Ratio of expenses to average net assets................................. 0.71% 0.74%(e) 0.73%(e) Ratio of net investment income to average net assets..................... 3.48% 3.03%(e) 4.46%(e) Ratio of expenses to average net assets*................................ 1.09% 1.03%(e) 1.87%(e) Portfolio turnover**.................... 62% 21% 124%
/\ Formerly Institutional Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Moderate Growth & Income Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from February 10, 1999 (commencement of operations) through December 31, 1999. (d) Not annualized. (e) Annualized. See notes to financial statements 148 AMSOUTH FUNDS Schedule of Portfolio Investments Bond Fund July 31, 2001 (Amounts in thousands, except shares) Corporate Bonds (47.8%)
Shares or Principal Amount Value ---------- -------- Aerospace/Defense (1.6%) Boeing Corp., 6.88%, 11/1/06............................... $ 3,000 $ 3,165 United Technologies Corp., 6.40%, 9/15/01.................. 1,775 1,779 United Technologies Corp., 7.13%, 11/15/10................. 5,000 5,369 -------- 10,313 -------- Agricultural Biotech (0.4%) Pharmacia Corp., 5.75%, 12/1/05............................ 2,600 2,642 -------- Aluminum (0.7%) Alcoa, Inc., 7.38%, 8/1/10................................. 4,000 4,330 -------- Automotive -- Finance (2.5%) Ford Motor Credit Co., 6.25%, 12/8/05...................... 3,485 3,546 Ford Motor Credit Co., 7.35%, 11/7/11, MTN................. 1,750 1,759 General Motors Acceptance Corp., 7.50%, 7/15/05............ 3,000 3,199 General Motors Acceptance Corp., 6.15%, 4/7/07............. 2,000 2,005 Toyota Motor Credit Corp., 5.65%, 1/15/07.................. 5,000 5,043 -------- 15,552 -------- Banking (4.4%) ABN AMRO Bank, 6.63%, 10/31/01............................. 1,575 1,585 Bank One Corp., 7.00%, 7/15/05............................. 3,157 3,311 Bank One, Texas, 6.25%, 2/15/08............................ 1,000 1,008 Fifth Third Bank, 6.75%, 7/15/05........................... 4,000 4,184 First Union Corp., 6.18%, 2/15/36.......................... 1,500 1,530 J.P. Morgan & Co., 7.63%, 9/15/04.......................... 3,856 4,160 NationsBank Corp., 7.75%, 8/15/15.......................... 1,100 1,205 State Street Boston, 7.65%, 6/15/10........................ 5,000 5,487 SunTrust Banks, Inc., 7.38%, 7/1/06........................ 3,159 3,384 Wachovia Corp., 6.61%, 10/1/25............................. 1,875 1,936 -------- 27,790 -------- Beverages (0.6%) Coca-Cola Co., 5.75%, 3/15/11.............................. 4,000 3,940 -------- Brokerage Services (1.3%) Bear Stearns & Co., Inc., 6.63%, 10/1/04................... 2,910 3,015 Dean Witter Discover & Co., 6.50%, 11/1/05................. 3,500 3,606 Merrill Lynch & Co., Inc., 6.00%, 2/12/03.................. 1,450 1,486 -------- 8,107 -------- Building Products (0.6%) Vulcan Materials Co., 5.75%, 4/1/04........................ 2,000 2,025 Vulcan Materials Co., 6.00%, 4/1/09........................ 2,000 1,963 -------- 3,988 -------- Chemicals (0.8%) Dow Chemical Corp., 5.25%, 5/14/04......................... 5,000 5,056 -------- Computers & Peripherals (1.0%) IBM Corp., 5.38%, 2/1/09................................... 5,000 4,875 IBM Corp., 6.50%, 1/15/28.................................. 1,750 1,693 -------- 6,568 --------
Corporate Bonds, continued
Shares or Principal Amount Value ---------- -------- Consumer Goods (1.7%) Procter & Gamble Co., 6.88%, 9/15/09....................... $ 5,000 $ 5,313 Unilever Capital Corp., 7.13%, 11/1/10..................... 5,000 5,350 -------- 10,663 -------- Cosmetics/Personal Care (1.0%) Colgate-Palmolive Co., 5.34%, 3/27/06...................... 4,400 4,406 Kimberly-Clark Corp., 7.10%, 8/1/07........................ 1,700 1,840 -------- 6,246 -------- Data Processing/Management (0.3%) First Data Corp., 6.75%, 7/15/05........................... 2,000 2,090 -------- Electric -- Integrated (0.6%) Alabama Power Co., 7.13%, 8/15/04.......................... 2,000 2,113 Alabama Power Co., 7.13%, 10/1/07.......................... 1,700 1,787 -------- 3,900 -------- Electronic Components/Instruments (0.3%) Honeywell, Inc., 7.00%, 3/15/07............................ 2,000 2,113 -------- Entertainment (0.5%) Walt Disney (The) Co., 5.13%, 12/15/03..................... 3,000 3,041 -------- Financial Services (4.5%) Associates Corp. N.A., 7.32%, 1/13/03, MTN................. 800 832 Associates Corp. N.A., 5.75%, 10/15/03..................... 2,000 2,045 Associates Corp. N.A., 5.75%, 11/1/03...................... 3,000 3,068 Boeing Capital Corp., 7.38%, 9/27/10....................... 4,000 4,360 Commercial Credit Co., 7.38%, 3/15/02...................... 3,000 3,064 Commercial Credit Co., 6.50%, 8/1/04....................... 3,000 3,131 Countrywide Home Loan, 6.84%, 10/22/04, MTN................ 2,125 2,218 Household Finance Corp., 6.50%, 1/24/06.................... 5,000 5,180 Mellon Funding Corp., 6.40%, 5/14/11....................... 2,000 2,030 Norwest Financial, Inc., 6.63%, 7/15/04.................... 2,000 2,098 -------- 28,026 -------- Food Products & Services (1.6%) Campbell Soup Co., 6.15%, 12/1/02.......................... 2,750 2,805 H.J. Heinz Co., 6.38%, 7/15/28............................. 2,000 1,828 Sara Lee Corp., 6.15%, 6/19/08, MTN........................ 5,625 5,681 -------- 10,314 -------- Forest & Paper Products (0.5%) Mead Corp., 6.60%, 3/1/02.................................. 3,000 3,034 -------- Industrial Goods & Services (2.1%) Air Products & Chemicals, Inc., 8.35%, 1/15/02............. 3,000 3,049 E. I. Dupont de Nemours & Co., 6.50%, 9/1/02............... 2,000 2,050 E. I. Dupont de Nemours & Co., 6.75%, 10/15/02............. 2,570 2,647 Reliance Electric Co., 6.80%, 4/15/03...................... 1,850 1,931 Rockwell International Corp., 6.63%, 6/1/05................ 3,456 3,585 -------- 13,262 --------
Continued 149 AMSOUTH FUNDS Schedule of Portfolio Investments Bond Fund July 31, 2001 (Amounts in thousands, except shares) Corporate Bonds, continued
Shares or Principal Amount Value ---------- -------- Insurance (0.7%) Chubb Corp., 6.15%, 8/15/05............................... $ 1,000 $ 1,021 Hartford Life, Inc., 6.90%, 6/15/04....................... 3,100 3,255 -------- 4,276 -------- Machinery -- Construction and Mining (0.2%) Caterpillar, Inc., 6.55%, 5/1/11.......................... 1,000 1,031 -------- Manufacturing (0.3%) PPG Industries, Inc., 7.05%, 8/15/09...................... 2,000 2,040 -------- Meat Packing Plants (1.1%) Hormel Foods Corp., 6.63%, 6/1/11......................... 7,000 7,131 -------- Newspapers (0.3%) New York Times, 7.63%, 3/15/05............................ 2,000 2,155 -------- Oil & Gas Exploration, Production, & Services (2.1%) Atlantic Richfield, 5.90%, 4/15/09........................ 4,250 4,282 Conoco Inc., 5.90%, 4/15/04............................... 1,500 1,534 Conoco Inc., 6.35%, 4/15/09............................... 1,000 1,013 Phillips Petroleum Co., 6.38%, 3/30/09.................... 2,000 2,028 Texaco Capital, 7.09%, 2/1/07............................. 4,000 4,304 -------- 13,161 -------- Pharmaceuticals (2.7%) Abbott Laboratories, 5.63%, 7/1/06........................ 4,000 4,060 Eli Lilly & Co., 5.50%, 7/15/06........................... 6,000 6,060 Pfizer Inc., 5.63%, 2/1/06................................ 3,900 3,973 Warner-Lambert Co., 5.75%, 1/15/03........................ 3,000 3,053 -------- 17,146 -------- Photography (0.5%) Eastman Kodak Co., 9.38%, 3/15/03......................... 3,100 3,317 -------- Retail (3.5%) May Department Stores Co., 7.15%, 8/15/04................. 1,000 1,058 May Department Stores Co., 7.90%, 10/15/07................ 1,000 1,103 Nike, Inc., 6.38%, 12/1/03................................ 3,000 3,083 Sears Credit Account Master Trust, 6.75%, 9/16/09......... 5,000 5,283 Target Corp., 7.50%, 2/15/05.............................. 2,000 2,148 Wal-Mart Stores, Inc., 6.38%, 3/1/03...................... 5,000 5,168 Wal-Mart Stores, Inc., 5.45%, 8/1/06...................... 4,500 4,534 -------- 22,377 -------- Tools (0.3%) Stanley Works, 5.75%, 3/1/04.............................. 2,000 2,040 -------- Utilities -- Electric & Gas (6.0%) Baltimore Gas & Electric, 7.50%, 1/15/07.................. 3,100 3,317 Cincinnati Gas & Electric Co., 6.45%, 2/15/04............. 1,500 1,538 Consolidated Edison Co. of New York, Inc., 6.63%, 2/1/02.. 2,000 2,020 Florida Power Corp., 6.54%, 7/1/02, MTN................... 1,325 1,347 National Rural Utilities Corp., Series C, 6.49%, 7/10/02, MTN...................................................... 1,425 1,461
Corporate Bonds, continued
Shares or Principal Amount Value ---------- -------- Utilities -- Electric & Gas, continued National Rural Utilities Corp., 5.00%, 10/1/02............ $ 3,500 $ 3,534 National Rural Utilities Corp., 6.38%, 10/15/04........... 3,100 3,220 Northern States Power Co., 7.88%, 10/1/01................. 2,750 2,764 Northern States Power Co., 6.88%, 8/1/09.................. 1,750 1,800 SCANA Corp., Series B, 6.25%, 7/8/03, MTN................. 2,225 2,281 Smith Enron, 5.97%, 12/15/06.............................. 1,591 1,619 Tampa Electric Co., 7.38%, 9/1/02......................... 2,000 2,060 Tampa Electric Co., 6.13%, 5/1/03......................... 2,000 2,050 Virginia Electric & Power Co., 6.63%, 4/1/03.............. 2,000 2,060 Virginia Electric & Power Co., 8.00%, 3/1/04.............. 2,500 2,669 Wisconsin Electric Power, 6.63%, 11/15/06................. 3,500 3,643 -------- 37,383 -------- Utilities -- Telecommunications (3.1%) BellAtlantic Corp., 6.25%, 2/15/04........................ 2,000 2,065 BellSouth Telecommunications, 6.50%, 6/15/05.............. 3,500 3,640 Chesapeake & Potomac Telephone, 6.00%, 5/1/03............. 2,009 2,064 GTE California, Inc., 6.70%, 9/1/09....................... 1,500 1,539 Southern New England Telecommunications Corp., 6.50%, 2/15/02.................................................. 2,000 2,028 Southwestern Bell Telephone, 6.63%, 4/1/05................ 2,000 2,078 US West Communications Group, 6.63%, 9/15/05.............. 4,000 4,085 WorldCom, Inc., 6.13%, 8/15/01............................ 2,000 2,000 -------- 19,499 -------- TOTAL CORPORATE BONDS..................................... 302,531 -------- Municipal Bonds (0.1%) Georgia (0.1%) Atlanta Downtown Development Lease Revenue Bond, 6.88%, 2/1/21................................................... 800 819 -------- TOTAL MUNICIPAL BONDS..................................... 819 -------- U.S. Government Agencies (22.0%) Fannie Mae (9.6%) 6.59%, 5/21/02............................................ 3,000 3,063 7.05%, 11/12/02........................................... 7,500 7,806 5.13%, 2/13/04............................................ 17,600 17,904 5.25%, 6/15/06............................................ 14,000 14,070 7.13%, 3/15/07............................................ 10,000 10,910 6.56%, 11/26/07........................................... 7,300 7,495 -------- 61,248 --------
Continued 150 AMSOUTH FUNDS Schedule of Portfolio Investments Bond Fund July 31, 2001 (Amounts in thousands, except shares) U.S. Government Agencies, continued
Shares or Principal Amount Value ---------- -------- Federal Home Loan Bank (0.5%) 4.88%, 4/16/04............................................. $ 3,000 $ 3,030 -------- Freddie Mac (6.3%) 6.88%, 1/15/05............................................. 25,000 26,652 7.14%, 3/12/07............................................. 700 715 7.10%, 4/10/07............................................. 2,000 2,180 10,000 10,625 -------- 40,172 -------- Government National Mortgage Assoc. (4.5%) 6.50%, 8/15/11 - 12/15/30.................................. 19,667 19,787 7.00%, 9/15/11 - 11/20/28.................................. 7,606 7,785 7.50%, 8/15/11............................................. 430 449 8.00%, 5/15/10............................................. 235 246 -------- 28,267 -------- Tennessee Valley Authority (1.1%) 5.38%, 11/13/08............................................ 7,000 6,976 -------- TOTAL U.S. GOVERNMENT AGENCIES............................. 139,693 -------- U.S. Treasury Bonds (6.5%) 7.50%, 11/15/16............................................ 34,000 40,928 -------- TOTAL U.S. TREASURY BONDS.................................. 40,928 -------- U.S. Treasury Notes (21.2%) 6.75%, 5/15/05............................................. 1,000 1,081 6.50%, 10/15/06............................................ 11,000 11,941 6.13%, 8/15/07............................................. 54,000 57,882 6.00%, 8/15/09............................................. 59,500 63,529 -------- TOTAL U.S. TREASURY NOTES.................................. 134,433 -------- Investment Companies (0.6%) AmSouth Prime Money Market Fund............................ 4,106,454 4,106 AmSouth U.S. Treasury Money Market Fund.................... 7 --* TOTAL INVESTMENT COMPANIES................................. 4,106 -------- TOTAL INVESTMENTS (Cost $597,343) (a) -- 98.2%.............................. 622,510 Other assets in excess of liabilities -- 1.8%.............. 11,417 -------- NET ASSETS -- 100.0%....................................... $633,927 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation................................................ $26,196 Unrealized depreciation................................................ (1,029) ------- Net unrealized appreciation............................................ $25,167 =======
*Due to rounding, figure was below thousand-dollar threshold. MTN -- Medium Term Note See notes to financial statements 151 AMSOUTH FUNDS Bond Fund Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $597,343)....................... $622,510 Cash........................................................ 121 Interest and dividends receivable........................... 10,790 Receivable for capital shares issued........................ 757 Collateral for securities loaned, at fair value............. 276,746 Prepaid expenses and other assets........................... 24 -------- Total Assets............................................... 910,948 Liabilities: Payable for capital shares redeemed......................... $ 3 Payable upon return of securities loaned.................... 276,746 Accrued expenses and other payables: Investment advisory fees................................... 112 Administration fees........................................ 16 Shareholder servicing and distribution fees................ 61 Custodian fees............................................. 15 Other...................................................... 68 -------- Total Liabilities.......................................... 277,021 -------- Net Assets: Capital..................................................... 607,228 Accumulated net investment income........................... 973 Accumulated net realized gains from investment transactions............................................... 559 Unrealized appreciation from investments.................... 25,167 -------- Net Assets.................................................. $633,927 ======== Class A Shares (a) Net Assets................................................. $ 16,877 Shares outstanding......................................... 1,517 Redemption price per share................................. $ 11.13 ======== Class A Shares -- Maximum Sales Charge...................... 4.00% -------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)..................................................... $ 11.59 ======== Class B Shares Net Assets................................................. $ 7,342 Shares outstanding......................................... 661 Offering price per share*.................................. $ 11.10 ======== Trust Shares (b) Net Assets................................................. $609,708 Shares outstanding......................................... 54,781 Offering and redemption price per share.................... $ 11.13 ========
* Redemption price per share varies by length of time shares are held. (a) Formerly Classic Shares. (b) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income................................................ $37,059 Dividend income................................................ 526 Securities lending income...................................... 416 ------- Total Investment Income....................................... 38,001 Expenses: Investment advisory fees....................................... $3,917 Administration fees............................................ 1,205 Distribution fees -- Class B Shares............................ 38 Shareholder servicing fees -- Class A Shares (a)............... 29 Shareholder Servicing fees -- Class B Shares................... 13 Shareholder servicing fees -- Trust Shares (b)................. 879 Custodian fees................................................. 166 Accounting fees................................................ 116 Transfer agent fees............................................ 147 Other fees..................................................... 164 ------ Total expenses before fee reductions.......................... 6,674 Expenses reduced by Investment Advisor........................ (904) Expenses reduced by Administrator............................. (301) Expenses reduced by Distributor............................... (293) Expenses reduced by Fund Accountant........................... (72) ------- Net expenses.................................................. 5,104 ------- Net Investment Income.......................................... 32,897 ------- Realized/Unrealized Gains from Investments: Net realized gains from investment transactions................ 2,129 Change in unrealized appreciation/depreciation from investments................................................... 31,821 ------- Net realized/unrealized gains from investments................. 33,950 ------- Change in net assets resulting from operations................. $66,847 =======
See notes to financial statements 152 AMSOUTH FUNDS Bond Fund Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................... $ 32,897 $ 24,461 Net realized gains from investment transactions......... 2,129 151 Change in unrealized appreciation/depreciation from investments............................................ 31,821 (118) -------- -------- Change in net assets resulting from operations........... 66,847 24,494 -------- -------- Distributions to Class A Shareholders (a): From net investment income.............................. (618) (467) From net realized gains on investment transactions...... -- (15) Distributions to Class B Shareholders: From net investment income.............................. (239) (141) From net realized gains on investment transactions...... -- (5) Distributions to Trust Shareholders (b): From net investment income.............................. (32,336) (24,939) From net realized gains on investment transactions...... -- (795) -------- -------- Change in net assets from shareholder distributions...... (33,193) (26,362) -------- -------- Change in net assets from capital transactions........... 85,587 126,737 -------- -------- Change in net assets..................................... 119,241 124,869 Net Assets: Beginning of period..................................... 514,686 389,817 -------- -------- End of period........................................... $633,927 $514,686 ======== ========
(a) Formerly Classic Shares. (b) Formerly Premier Shares. See notes to financial statements 153 AMSOUTH FUNDS Bond Fund Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) 1997 ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period.... $ 10.52 $10.63 $11.05 $10.92 $ 10.54 ------- ------ ------ ------ -------- Investment Activities Net investment income.. 0.58 0.58 0.61 1.41 0.65 Net realized and unrealized gains (losses) from investments........... 0.62 (0.06) (0.32) (0.62) 0.42 ------- ------ ------ ------ -------- Total from Investment Activities............ 1.20 0.52 0.29 0.79 1.07 ------- ------ ------ ------ -------- Distributions Net investment income.. (0.59) (0.61) (0.58) (0.63) (0.69) Net realized gains from investment transactions.......... -- (0.02) (0.13) (0.03) -- ------- ------ ------ ------ -------- Total Distributions.... (0.59) (0.63) (0.71) (0.66) (0.69) ------- ------ ------ ------ -------- Change in Net Asset Value.................. 0.61 (0.11) (0.42) 0.13 0.38 ------- ------ ------ ------ -------- Net Asset Value, End of Period................. $ 11.13 $10.52 $10.63 $11.05 $ 10.92 ======= ====== ====== ====== ======== Total Return (excludes sales charge).......... 11.63% 5.10% 2.58% 7.45% 10.48% Ratios/Supplemental Data: Net Assets at end of period (000)........... $16,877 $9,500 $7,070 $7,032 $311,881 Ratio of expenses to average net assets..... 0.99% 0.91% 0.81% 0.73% 0.75% Ratio of net investment income to average net assets................. 5.30% 5.54% 5.46% 5.78% 6.10% Ratio of expenses to average net assets*.... 1.20% 1.21% 1.20% 0.95% 0.98% Portfolio turnover**.... 24% 27% 18% 40% 35%
/\ Formerly Classic Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. See notes to financial statements 154 AMSOUTH FUNDS Bond Fund Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period......................... $10.50 $10.60 $11.04 $10.88 ------ ------ ------ ------ Investment Activities Net investment income.......... 0.50 0.49 0.50 0.46 Net realized and unrealized gains (losses) from investments................... 0.61 (0.05) (0.31) 0.24 ------ ------ ------ ------ Total from Investment Activities.................... 1.11 0.44 0.19 0.70 ------ ------ ------ ------ Distributions Net investment income.......... (0.51) (0.52) (0.50) (0.51) Net realized gains from investment transactions....... -- (0.02) (0.13) (0.03) ------ ------ ------ ------ Total Distributions............ (0.51) (0.54) (0.63) (0.54) ------ ------ ------ ------ Change in Net Asset Value....... 0.60 (0.10) (0.44) 0.16 ------ ------ ------ ------ Net Asset Value, End of Period.. $11.10 $10.50 $10.60 $11.04 ====== ====== ====== ====== Total Return (excludes redemption charge)............. 10.77% 4.30% 1.58% 6.58%(b) Ratios/Supplemental Data: Net Assets at end of period (000).......................... $7,342 $3,636 $2,521 $ 442 Ratio of expenses to average net assets......................... 1.73% 1.74% 1.71% 1.74%(c) Ratio of net investment income to average net assets.......... 4.55% 4.72% 4.63% 4.75%(c) Ratio of expenses to average net assets*........................ 1.95% 1.96% 1.95% 1.99%(c) Portfolio turnover**............ 24% 27% 18% 40%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from September 16, 1997 (commencement of operations) through July 31, 1998. (b) Not annualized. (c) Annualized. See notes to financial statements 155 AMSOUTH FUNDS Bond Fund Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period........................ $ 10.52 $ 10.63 $ 11.05 $ 10.72 -------- -------- -------- -------- Investment Activities Net investment income......... 0.60 0.59 0.61 0.57 Net realized and unrealized gains (losses) from investments.................. 0.61 (0.06) (0.30) 0.38 -------- -------- -------- -------- Total from Investment Activities................... 1.21 0.53 0.31 0.95 -------- -------- -------- -------- Distributions Net investment income......... (0.60) (0.62) (0.60) (0.59) Net realized gains from investment transactions...... -- (0.02) (0.13) (0.03) -------- -------- -------- -------- Total Distributions........... (0.60) (0.64) (0.73) (0.62) -------- -------- -------- -------- Change in Net Asset Value...... 0.61 (0.11) (0.42) 0.33 -------- -------- -------- -------- Net Asset Value, End of Period........................ $ 11.13 $ 10.52 $ 10.63 $ 11.05 ======== ======== ======== ======== Total Return................... 11.79% 5.24% 2.68% 7.54%(b) Ratios/Supplemental Data: Net Assets at end of period (000)......................... $609,708 $501,550 $380,226 $327,930 Ratio of expenses to average net assets.................... 0.84% 0.78% 0.71% 0.73%(c) Ratio of net investment income to average net assets......... 5.47% 5.66% 5.57% 5.72%(c) Ratio of expenses to average net assets*................... 1.10% 1.03% 0.95% 0.97%(c) Portfolio turnover**........... 24% 27% 18% 40%
/\ Formerly Premier Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. (b) Represents total return based on the activity of Classic Shares for the period from August 1, 1997 to September 1, 1997 and the activity of Premier Shares for the period from September 2, 1997 to July 31, 1998. Total return for the Premier Shares for the period from September 2, 1997 (commencement of operations) through July 31, 1998 was 9.03%. (c) Annualized. See notes to financial statements 156 AMSOUTH FUNDS Schedule of Portfolio Investments Limited Term Bond Fund July 31, 2001 (Amounts in thousands, except shares) Corporate Bonds (79.4%)
Shares or Principal Amount Value ---------- ---------- Automotive -- Finance (8.3%) Ford Motor Credit Co., 6.70%, 7/16/04.................... $ 7,000 $ 7,254 General Motors Acceptance Corp., 7.13%, 5/1/03........... 3,500 3,644 Toyota Motor Credit Corp., 5.65%, 1/15/07................ 3,000 3,026 ---------- 13,924 ---------- Banking (3.3%) ABN AMRO Bank, 6.63%, 10/31/01........................... 2,500 2,515 Bankers Trust, 6.75%, 10/3/01............................ 1,500 1,508 Firstar Bank, 6.25%, 12/1/02............................. 1,500 1,538 ---------- 5,561 ---------- Beverages (1.2%) Coca-Cola Co., 6.00%, 7/15/03............................ 2,000 2,060 ---------- Building Products (1.2%) Vulcan Materials Co., 5.75%, 4/1/04...................... 2,000 2,025 ---------- Chemicals (0.9%) Dow Chemical Corp., 5.25%, 5/14/04 (b)................... 1,500 1,517 ---------- Consumer Goods (3.1%) Procter & Gamble Co., 5.25%, 9/15/03..................... 2,000 2,035 Unilever Capital Corp., 6.88%, 11/1/05................... 3,000 3,188 ---------- 5,223 ---------- Cosmetics/Personal Care (1.2%) Colgate-Palmolive Co., 5.34%, 3/27/06.................... 2,000 2,003 ---------- Electronic Components/Instruments (1.8%) Emerson Electric Co., 7.88%, 6/1/05...................... 2,000 2,185 Honeywell, Inc., 6.75%, 3/15/02.......................... 850 863 ---------- 3,048 ---------- Farm Equipment (1.2%) John Deere Capital Corp., 5.90%, 4/8/03.................. 2,000 2,038 ---------- Financial Services (13.8%) Ameritech Capital Funding, 6.13%, 10/15/01............... 3,000 3,015 Bear Stearns & Co., Inc., 6.13%, 2/1/03.................. 3,500 3,574 CIT Group Holdings, 6.38%, 10/1/02....................... 2,000 2,050 Commercial Credit Co., 8.26%, 11/1/01.................... 1,000 1,010 General Electric Capital Corp., 6.15%, 11/5/01........... 2,500 2,516 Household Netherlands, 6.20%, 12/1/03.................... 2,500 2,563 Merrill Lynch & Co., 6.00%, 11/15/04..................... 4,000 4,104 Northern Trust Co., 6.70%, 9/15/05....................... 1,000 1,046 Norwest Financial Inc., 6.70%, 9/22/04................... 3,000 3,150 ---------- 23,028 ---------- Food Products & Services (2.6%) Campbell Soup Co., 6.15%, 12/1/02........................ 1,000 1,020 Hershey Foods Corp., 6.70%, 10/1/05...................... 1,710 1,798 McDonald's Corp., 6.00%, 6/23/02......................... 1,500 1,524 ---------- 4,342 ----------
Corporate Bonds, continued
Shares or Principal Amount Value ---------- ---------- Forest & Paper Products (0.6%) Mead Corp., 6.60%, 3/1/02............................... $ 1,000 $ 1,011 ---------- Health Care (1.2%) McKesson Corp., 6.88%, 3/1/02........................... 2,000 2,010 ---------- Industrial Goods & Services (5.7%) Air Products & Chemicals, Inc., 8.35%, 1/15/02.......... 2,000 2,033 Archer Daniels Midland, 6.25%, 5/15/03.................. 2,100 2,184 Caterpillar Financial Services, 6.02%, 4/15/02.......... 1,000 1,016 E. I. Dupont de Nemours & Co., 6.50%, 9/1/02............ 3,000 3,075 Imperial Oil, Ltd., 8.75%, 10/15/19, Callable 10/15/01 @ 103.................................................... 1,178 1,222 ---------- 9,530 ---------- Insurance (1.7%) American General Finance, 5.75%, 11/1/03................ 2,000 2,047 Marsh & McLennan Cos., Inc., 6.63%, 6/15/04............. 750 782 ---------- 2,829 ---------- Newspapers (1.3%) New York Times, 7.63%, 3/15/05.......................... 2,000 2,155 ---------- Oil & Gas Exploration, Production, & Services (3.3%) Amoco Co., 6.25%, 10/15/04.............................. 3,200 3,344 Chevron Corp., 6.63%, 10/1/04........................... 2,000 2,113 ---------- 5,457 ---------- Pharmaceuticals (3.5%) Abbott Laboratories, 5.63%, 7/1/06...................... 2,000 2,030 Eli Lilly & Co., 5.50%, 7/15/06......................... 2,000 2,020 Warner-Lambert Co., 5.75%, 1/15/03...................... 1,850 1,882 ---------- 5,932 ---------- Retail (8.2%) Dayton Hudson Co., 6.40%, 2/15/03....................... 2,500 2,581 May Department Stores Co., 7.15%, 8/15/04............... 1,750 1,851 Sears Credit Account Master Trust, 6.75%, 9/16/09....... 5,000 5,284 Sears, Roebuck and Co., 6.00%, 3/20/03.................. 1,000 1,018 Target Corp., 7.50%, 2/15/05............................ 1,000 1,074 Wal-Mart Stores, Inc., 5.45%, 8/1/06.................... 2,000 2,015 ---------- 13,823 ---------- Technology (0.6%) IBM Corp., 5.95%, 6/2/03................................ 1,000 1,028 ---------- Tools (0.6%) Stanley Works, 7.38%, 12/15/02.......................... 500 519 Stanley Works, 5.75%, 3/1/04............................ 500 510 ---------- 1,029 ----------
Continued 157 AMSOUTH FUNDS Schedule of Portfolio Investments Limited Term Bond Fund July 31, 2001 (Amounts in thousands, except shares) Corporate Bonds, continued
Shares or Principal Amount Value ---------- ---------- Utilities -- Electric & Gas (11.6%) Alabama Power Corp., 5.35%, 11/15/03................... $ 3,750 $ 3,801 Baltimore Gas & Electric Co., 6.50%, 2/15/03........... 2,500 2,574 Cincinnati Gas & Electric Co., 6.45%, 2/15/04.......... 1,300 1,333 Florida Power Corp., 6.54%, 7/1/02, MTN................ 2,000 2,033 MidAmerican Energy, 6.50%, 12/15/01.................... 2,500 2,521 National Rural Utilities Corp., Series C, 6.49%, 7/10/02, MTN.......................................... 2,000 2,050 SCANA Corp., Series B, 6.25%, 7/8/03, MTN.............. 2,000 2,050 Smith Enron, 5.97%, 12/15/06........................... 1,025 1,043 Tampa Electric Co., 7.38%, 9/1/02...................... 2,000 2,060 ---------- 19,465 ---------- Utilities -- Telecommunications (2.5%) AT&T Corp., 5.63%, 3/15/04............................. 1,500 1,513 BellSouth Telecommunications, 6.00%, 6/15/02........... 2,585 2,624 ---------- 4,137 ---------- TOTAL CORPORATE BONDS.................................. 133,175 ---------- U.S. Government Agencies (10.6%) Fannie Mae (3.2%) 7.00%, 7/15/05......................................... 5,000 5,369 ---------- Freddie Mac (3.2%) 6.88%, 1/15/05......................................... 5,000 5,330 ---------- Government National Mortgage Assoc. (3.0%) 7.50%, 4/15/09 - 6/15/09............................... 1,749 1,828 8.00%, 12/15/07 - 4/15/10.............................. 2,507 2,619 8.50%, 9/15/09 - 12/15/09.............................. 637 664 ---------- 5,111 ---------- Tennessee Valley Authority (1.2%) 6.00%, 9/24/02......................................... 2,000 2,048 ---------- TOTAL U.S. GOVERNMENT AGENCIES......................... 17,858 ---------- U.S. Treasury Notes (7.9%) 6.88%, 5/15/06......................................... 12,000 13,177 ---------- TOTAL U.S. TREASURY NOTES.............................. 13,177 ----------
Investment Companies (0.3%)
Shares or Principal Amount Value --------- -------- AmSouth Prime Money Market Fund............................. 558,761 $ 559 AmSouth U.S. Treasury Money Market Fund..................... 373 --* -------- TOTAL INVESTMENT COMPANIES.................................. 559 -------- TOTAL INVESTMENTS (Cost $160,521) (a) -- 98.2%............................... 164,769 Other assets in excess of liabilities -- 1.8%............... 3,024 -------- NET ASSETS -- 100.0%........................................ $167,793 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation............................................... $4,414 Unrealized depreciation............................................... (166) ------ Net unrealized appreciation........................................... $4,248 ======
* Due to rounding, figure is below thousand dollar threshold. (b) Represents a restricted security, purchased under Rule 144A, which is exempt from registration under the Security Act of 1933, as amended. These securities have been deemed liquid under guidelines established by the Board of Trustees. MTN -- Medium Term Note See notes to financial statements 158 AMSOUTH FUNDS Limited Term Bond Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $160,521)........................ $164,769 Cash......................................................... 77 Interest and dividends receivable............................ 2,332 Receivable for capital shares issued......................... 684 Collateral for securities loaned, at fair value.............. 14,770 Prepaid expenses and other assets............................ 7 -------- Total Assets................................................ 182,639 Liabilities: Payable upon return of securities loaned..................... $14,770 Accrued expenses and other payables: Investment advisory fees.................................... 30 Administration fees......................................... 4 Shareholder servicing and distribution fees................. 17 Custodian fees.............................................. 4 Other....................................................... 21 ------- Total Liabilities........................................... 14,846 -------- Net Assets: Capital...................................................... 165,494 Accumulated net investment income............................ 175 Accumulated net realized losses from investment transactions................................................ (2,124) Unrealized appreciation from investments..................... 4,248 -------- Net Assets................................................... $167,793 ======== Class A Shares (b) Net Assets.................................................. $ 9,918 Shares outstanding.......................................... 941 Redemption price per share.................................. $ 10.55 ======== Class A Shares -- Maximum Sales Charge....................... 4.00% -------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)...................................................... $ 10.99 ======== Class B Shares Net Assets.................................................. $ 2,614 Shares outstanding.......................................... 248 Offering price per share*................................... $ 10.54 ======== Trust Shares (c) Net Assets.................................................. $155,261 Shares outstanding.......................................... 14,718 Offering and redemption price per share..................... $ 10.55 ========
* Redemption price per share varies by length of time shares are held. (a) Formerly AmSouth Limited Maturity Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income................................................ $11,250 Dividend income................................................ 117 Securities lending income...................................... 48 ------- Total Investment Income....................................... 11,415 Expenses: Investment advisory fees....................................... $1,152 Administration fees............................................ 354 Distribution fees -- Class B Shares............................ 15 Shareholder servicing fees -- Class A Shares (b)............... 19 Shareholder servicing fees -- Class B Shares................... 5 Shareholder servicing fees -- Trust Shares (c)................. 252 Custodian fees................................................. 49 Accounting fees................................................ 39 Transfer agent fees............................................ 66 Other fees..................................................... 57 ------ Total expenses before fee reductions.......................... 2,008 Expenses reduced by Investment Advisor........................ (266) Expenses reduced by Administrator............................. (89) Expenses reduced by Transfer Agent............................ (3) Expenses reduced by Distributor............................... (84) Expenses reduced by Fund Accountant........................... (20) ------- Net expenses.................................................. 1,546 ------- Net Investment Income.......................................... 9,869 ------- Realized/Unrealized Gains from Investments: Net realized gains from investment transactions................ 355 Change in unrealized appreciation/depreciation from investments................................................... 7,097 ------- Net realized/unrealized gains from investments................. 7,452 ------- Change in net assets resulting from operations................. $17,321 =======
See notes to financial statements 159 AMSOUTH FUNDS Limited Term Bond Fund (a) Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................... $ 9,869 $ 8,032 Net realized gains (losses) from investment transactions........................................... 355 (687) Change in unrealized appreciation/depreciation from investments............................................ 7,097 (51) -------- -------- Change in net assets resulting from operations........... 17,321 7,294 -------- -------- Distributions to Class A Shareholders (b): From net investment income.............................. (420) (264) Distributions to Class B Shareholders: From net investment income.............................. (98) (102) Distributions to Trust Shareholders (c): From net investment income.............................. (9,609) (7,951) -------- -------- Change in net assets from shareholder distributions...... (10,127) (8,317) -------- -------- Change in net assets from capital transactions........... (26,452) 74,205 -------- -------- Change in net assets..................................... (19,258) 73,182 Net Assets: Beginning of period..................................... 187,051 113,869 -------- -------- End of period........................................... $167,793 $187,051 ======== ========
(a) Formerly AmSouth Limited Maturity Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. See notes to financial statements 160 AMSOUTH FUNDS Limited Term Bond Fund (a) Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (b) 1997 ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period.... $10.13 $10.29 $10.43 $10.42 $ 10.31 ------ ------ ------ ------ -------- Investment Activities Net investment income.. 0.57 0.59 0.57 0.85 0.58 Net realized and unrealized gains (losses) from investments........... 0.43 (0.13) (0.15) (0.25) 0.14 ------ ------ ------ ------ -------- Total from Investment Activities............ 1.00 0.46 0.42 0.60 0.72 ------ ------ ------ ------ -------- Distributions Net investment income.. (0.58) (0.62) (0.56) (0.59) (0.61) ------ ------ ------ ------ -------- Total Distributions.... (0.58) (0.62) (0.56) (0.59) (0.61) ------ ------ ------ ------ -------- Change in Net Asset Value.................. 0.42 (0.16) (0.14) 0.01 0.11 ------ ------ ------ ------ -------- Net Asset Value, End of Period................. $10.55 $10.13 $10.29 $10.43 $ 10.42 ====== ====== ====== ====== ======== Total Return (excludes sales charge).......... 10.12% 4.59% 4.01% 5.94% 7.25% Ratios/Supplemental Data: Net Assets at end of period (000)........... $9,918 $7,913 $2,716 $3,531 $138,675 Ratio of expenses to average net assets..... 1.00% 0.96% 0.81% 0.74% 0.77% Ratio of net investment income to average net assets................. 5.43% 5.60% 5.49% 5.65% 5.65% Ratio of expenses to average net assets*.... 1.22% 1.24% 1.23% 0.96% 1.02% Portfolio turnover**.... 44% 34% 39% 39% 65%
/\ Formerly Classic Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly AmSouth Limited Maturity Fund. (b) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. See notes to financial statements 161 AMSOUTH FUNDS Limited Term Bond Fund (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended July 31, July 31, July 31, 2001 + 2000 1999 (b) ---------- ---------- ------------ Net Asset Value, Beginning of Period...... $10.13 $10.27 $10.58 ------ ------ ------ Investment Activities Net investment income.................... 0.49 0.48 0.27 Net realized and unrealized gains (losses) from investments............... 0.42 (0.10) (0.30) ------ ------ ------ Total from Investment Activities......... 0.91 0.38 (0.03) ------ ------ ------ Distributions Net investment income.................... (0.50) (0.52) (0.28) ------ ------ ------ Total Distributions...................... (0.50) (0.52) (0.28) ------ ------ ------ Change in Net Asset Value................. 0.41 (0.14) (0.31) ------ ------ ------ Net Asset Value, End of Period............ $10.54 $10.13 $10.27 ====== ====== ====== Total Return (excludes redemption charge).................................. 9.20% 3.85% (0.33)%(c) Ratios/Supplemental Data: Net Assets at end of period (000)......... $2,614 $1,815 $1,599 Ratio of expenses to average net assets... 1.75% 1.76% 1.69%(d) Ratio of net investment income to average net assets............................... 4.66% 4.79% 4.61%(d) Ratio of expenses to average net assets*.. 1.97% 1.99% 1.96%(d) Portfolio turnover**...................... 44% 34% 39%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly AmSouth Limited Maturity Fund. (b) For the period from January 21, 1999 (commencement of operations) through July 31, 1999. (c) Not annualized. (d) Annualized. See notes to financial statements 162 AMSOUTH FUNDS Limited Term Bond Fund (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (b) ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period......................... $ 10.13 $ 10.29 $ 10.43 $ 10.34 -------- -------- -------- -------- Investment Activities Net investment income.......... 0.58 0.59 0.59 0.55 Net realized and unrealized gains (losses) from investments................... 0.43 (0.12) (0.16) 0.10 -------- -------- -------- -------- Total from Investment Activities.................... 1.01 0.47 0.43 0.65 -------- -------- -------- -------- Distributions Net investment income.......... (0.59) (0.63) (0.57) (0.56) -------- -------- -------- -------- Total Distributions............ (0.59) (0.63) (0.57) (0.56) -------- -------- -------- -------- Change in Net Asset Value....... 0.42 (0.16) (0.14) 0.09 -------- -------- -------- -------- Net Asset Value, End of Period.. $ 10.55 $ 10.13 $ 10.29 $ 10.43 ======== ======== ======== ======== Total Return.................... 10.26% 4.71% 4.14% 6.04%(c) Ratios/Supplemental Data: Net Assets at end of period (000).......................... $155,261 $177,323 $109,554 $106,953 Ratio of expenses to average net assets......................... 0.86% 0.82% 0.71% 0.73%(d) Ratio of net investment income to average net assets.......... 5.59% 5.74% 5.60% 5.70%(d) Ratio of expenses to average net assets*........................ 1.12% 1.07% 0.98% 0.98%(d) Portfolio turnover**............ 44% 34% 39% 39%
/\ Formerly Premier Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly AmSouth Limited Maturity Fund. (b) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. (c) Represents total return based on the activity of Classic Shares for the period from August 1, 1997 to September 1, 1997 and the activity of Premier Shares for the period from September 2, 1997 to July 31, 1998. Total return for the Premier Shares for the period from September 2, 1997 (commencement of operations) through July 31, 1998 was 6.37%. (d) Annualized. See notes to financial statements 163 AMSOUTH FUNDS Schedule of Portfolio Investments Government Income Fund July 31, 2001 (Amounts in thousands, except shares) U.S. Government Agencies (77.1%)
Shares or Principal Amount Value ----------- -------- Fannie Mae (10.4%) 5.75%, 4/15/03............................................ $ 2,000 $ 2,057 5.65%, 3/21/06, Callable 3/21/03 @ 100.................... 5,000 5,069 6.94%, 9/5/07, Callable 9/5/02 @ 100...................... 2,000 2,066 6.27%, 2/5/08, Callable 2/5/03 @ 100, MTN................. 5,000 5,106 6.00%, 5/15/08............................................ 7,000 7,231 7.50%, 4/1/15 - 6/1/15.................................... 6,668 6,912 8.00%, 7/1/15............................................. 3,542 3,681 -------- 32,122 -------- Federal Farm Credit Bank (10.5%) 6.20%, 7/1/02............................................. 10,000 10,233 5.07%, 12/15/03........................................... 15,000 15,244 5.70%, 9/3/08............................................. 7,000 7,101 -------- 32,578 -------- Federal Government Loan Mortgage Corporation (1.0%) 6.50%, 5/1/31............................................. 2,986 2,990 -------- Federal Home Loan Bank (11.8%) 5.35%, 12/1/03............................................ 3,000 3,067 5.30%, 2/18/04............................................ 5,000 5,105 6.34%, 6/29/04............................................ 2,250 2,359 7.25%, 5/13/05............................................ 10,000 10,815 5.80%, 9/2/08............................................. 10,000 10,193 5.89%, 3/30/09............................................ 5,000 5,090 -------- 36,629 -------- Freddie Mac (9.7%) 5.00%, 1/15/04............................................ 10,000 10,138 5.75%, 3/15/09............................................ 10,000 10,100 6.00%, 6/1/16 - 8/1/18.................................... 6,123 6,134 7.00%, 6/1/31............................................. 3,498 3,569 -------- 29,941 -------- Government National Mortgage Assoc. (27.1%) 5.50%, 2/15/14............................................ 2,031 2,007 6.00%, 5/15/16 - 6/15/31.................................. 7,675 7,679 6.50%, 7/15/14 - 5/15/31.................................. 10,408 10,561 7.00%, 12/15/26 - 2/20/29................................. 15,010 15,370 7.50%, 9/20/15 - 8/20/30.................................. 31,524 32,635 8.00%, 7/15/26 - 6/20/30.................................. 13,991 14,595 8.50%, 12/15/19 - 2/15/23................................. 116 120 9.00%, 6/15/18 - 9/15/22.................................. 495 521 9.50%, 5/15/18 - 8/15/21.................................. 375 395 -------- 83,883 -------- Private Export Funding (4.4%) 6.31%, 9/30/04, Series C.................................. 2,000 2,098 5.53%, 4/30/06............................................ 2,500 2,544 6.49%, 7/15/07, Series B.................................. 2,000 2,120 5.75%, 1/15/08............................................ 3,800 3,880 5.87%, 7/31/08, Series D.................................. 3,000 3,071 -------- 13,713 --------
U.S. Government Agencies, continued
Shares or Principal Amount Value ----------- -------- Tennessee Valley Authority (2.2%) 5.38%, 11/13/08........................................... $ 1,500 $ 1,495 6.75%, 11/1/25............................................ 5,000 5,269 -------- 6,764 -------- TOTAL U.S. GOVERNMENT AGENCIES............................ 238,620 ========
U.S. Treasury Bonds (8.6%) 7.50%, 11/15/16............................................. 7,900 9,510 7.25%, 8/15/22.............................................. 7,000 8,400 7.63%, 11/15/22............................................. 7,000 8,730 -------- TOTAL U.S. TREASURY BONDS................................... 26,640 -------- U.S. Treasury Notes (12.0%) 7.88%, 8/15/01.............................................. 7,000 7,013 7.50%, 5/15/02.............................................. 10,000 10,316 5.75%, 8/15/03.............................................. 10,000 10,374 5.75%, 8/15/10.............................................. 9,000 9,470 -------- TOTAL U.S. TREASURY NOTES................................... 37,173 -------- Investment Companies (0.9%) AIM Treasury Money Market Fund.............................. 1,000 1 AmSouth Treasury Reserve Money Market Fund.................. 2,748,330 2,748 -------- TOTAL INVESTMENT COMPANIES.................................. 2,749 -------- TOTAL INVESTMENTS (Cost $292,517) (a) -- 98.6%............................... 305,182 Other assets in excess of liabilities -- 1.4%............... 4,224 -------- NET ASSETS -- 100.0%........................................ $309,406 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation............................................. $12,868 Unrealized depreciation............................................. (203) ------- Net unrealized appreciation......................................... $12,665 =======
MTN -- Medium Term Note See notes to financial statements 164 AMSOUTH FUNDS Government Income Fund Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $292,517)....................... $305,182 Interest and dividends receivable........................... 3,887 Receivable for capital shares issued........................ 451 Collateral for securities loaned, at fair value............. 135,404 Prepaid expenses and other assets........................... 17 -------- Total Assets............................................... 444,941 Liabilities: Payable upon return of securities loaned.................... $135,404 Accrued expenses and other payables: Investment advisory fees................................... 55 Administration fees........................................ 8 Shareholder servicing and distribution fees................ 28 Custodian fees............................................. 7 Other...................................................... 33 -------- Total Liabilities.......................................... 135,535 -------- Net Assets: Capital..................................................... 299,849 Accumulated net investment income........................... 213 Accumulated net realized losses from investment transactions............................................... (3,321) Unrealized appreciation from investments.................... 12,665 -------- Net Assets.................................................. $309,406 ======== Class A Shares (a) Net Assets................................................. $ 5,672 Shares outstanding......................................... 562 Redemption price per share................................. $ 10.10 ======== Class A Shares -- Maximum Sales Charge...................... 4.00% -------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)..................................................... $ 10.52 ======== Class B Shares Net Assets................................................. $ 1,635 Shares outstanding......................................... 162 Offering price per share*.................................. $ 10.10 ======== Trust Shares (b) Net Assets................................................. $302,099 Shares outstanding......................................... 29,913 Offering and redemption price per share.................... $ 10.10 ========
* Redemption price per share varies by length of time shares are held. (a) Formerly Classic Shares. (b) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income................................................ $20,487 Dividend income................................................ 654 Securities lending income...................................... 158 ------- Total Investment Income....................................... 21,299 Expenses: Investment advisory fees....................................... $2,143 Administration fees............................................ 659 Distribution fees -- Class B Shares............................ 6 Shareholder servicing fees -- Class A Shares (a).................................................... 14 Shareholder servicing fees -- Class B Shares................... 2 Shareholder servicing fees -- Trust Shares (b)................. 485 Custodian fees................................................. 91 Accounting fees................................................ 65 Transfer agent fees............................................ 91 Other fees..................................................... 92 ------ Total expenses before fee reductions.......................... 3,648 Expenses reduced by Investment Advisor........................ (495) Expenses reduced by Administrator............................. (165) Expenses reduced by Distributor............................... (162) Expenses reduced by Fund Accountant........................... (37) ------- Net expenses.................................................. 2,789 ------- Net Investment Income.......................................... 18,510 ------- Realized/Unrealized Gains from Investments: Net realized gains from investment transactions................ 2,946 Change in unrealized appreciation/depreciation from investments................................................... 14,200 ------- Net realized/unrealized gains from investments................. 17,146 ------- Change in net assets resulting from operations................. $35,656 =======
See notes to financial statements 165 AMSOUTH FUNDS Government Income Fund Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................ $ 18,510 $ 8,422 Net realized gains (losses) from investment transactions........................................ 2,946 (3,175) Change in unrealized appreciation/depreciation from investments......................................... 14,200 7,276 -------- -------- Change in net assets resulting from operations........ 35,656 12,523 -------- -------- Distributions to Class A Shareholders (a): From net investment income........................... (320) (276) Distributions to Class B Shareholders: From net investment income........................... (41) (8)(c) Distributions to Trust Shareholders (b): From net investment income........................... (18,578) (7,506) -------- -------- Change in net assets from shareholder distributions... (18,939) (7,790) -------- -------- Change in net assets from capital transactions........ (70,352) 349,722 -------- -------- Change in net assets.................................. (53,635) 354,455 Net Assets: Beginning of period.................................. 363,041 8,586 -------- -------- End of period........................................ $309,406 $363,041 ======== ========
(a) Formerly Classic Shares. (b) Formerly Premier Shares. (c) For the period from March 13, 2000 (commencement of operations) through July 31, 2000. See notes to financial statements 166 AMSOUTH FUNDS Government Income Fund Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) 1997 ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period.... $ 9.60 $ 9.62 $ 9.88 $ 9.75 $ 9.40 ------ ------ ------ ------ ------- Investment Activities Net investment income.. 0.55 0.56 0.54 0.63 0.58 Net realized and unrealized gains (losses) from investments........... 0.50 (0.04) (0.28) 0.09 0.35 ------ ------ ------ ------ ------- Total from Investment Activities............ 1.05 0.52 0.26 0.72 0.93 ------ ------ ------ ------ ------- Distributions Net investment income.. (0.55) (0.54) (0.52) (0.59) (0.58) ------ ------ ------ ------ ------- Total Distributions.... (0.55) (0.54) (0.52) (0.59) (0.58) ------ ------ ------ ------ ------- Change in Net Asset Value.................. 0.50 (0.02) (0.26) 0.13 0.35 ------ ------ ------ ------ ------- Net Asset Value, End of Period................. $10.10 $ 9.60 $ 9.62 $ 9.88 $ 9.75 ====== ====== ====== ====== ======= Total Return (excludes sales charge).......... 11.25% 5.55% 2.62% 7.58% 10.21% Ratios/Supplemental Data: Net Assets at end of period (000)........... $5,672 $5,879 $5,436 $8,176 $11,622 Ratio of expenses to average net assets..... 0.99% 0.85% 0.70% 0.71% 0.69% Ratio of net investment income to average net assets................. 5.47% 5.77% 5.35% 5.95% 5.98% Ratio of expenses to average net assets*.... 1.20% 1.30% 1.90% 1.77% 1.29% Portfolio turnover**.... 25% 42% 27% 35% 3%
/\ Formerly Classic Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. See notes to financial statements 167 AMSOUTH FUNDS Government Income Fund Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended July 31, July 31, 2001 + 2000 (a) ---------- ---------- Net Asset Value, Beginning of Period................... $ 9.61 $9.48 ------ ----- Investment Activities Net investment income................................. 0.47 0.18 Net realized and unrealized gains from investments.... 0.51 0.10 ------ ----- Total from Investment Activities...................... 0.98 0.28 ------ ----- Distributions Net investment income................................. (0.49) (0.15) ------ ----- Total Distributions................................... (0.49) (0.15) ------ ----- Change in Net Asset Value.............................. 0.49 0.13 ------ ----- Net Asset Value, End of Period......................... $10.10 $9.61 ====== ===== Total Return (excludes redemption charge).............. 10.36% 2.98%(b) Ratios/Supplemental Data: Net Assets at end of period (000)...................... $1,635 $ 520 Ratio of expenses to average net assets................ 1.74% 1.75%(c) Ratio of net investment income to average net assets... 4.65% 4.77%(c) Ratio of expenses to average net assets*............... 1.95% 1.98%(c) Portfolio turnover**................................... 25% 42%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period from March 13, 2000 (commencement of operations) through July 31, 2000. (b) Not annualized. (c) Annualized. See notes to financial statements 168 AMSOUTH FUNDS Government Income Fund Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period......................... $ 9.61 $ 9.62 $ 9.87 $ 9.66 -------- -------- ------ ------ Investment Activities Net investment income.......... 0.56 0.57 0.54 0.59 Net realized and unrealized gains (losses) from investments................... 0.50 (0.03) (0.26) 0.17 -------- -------- ------ ------ Total from Investment Activities.................... 1.06 0.54 0.28 0.76 -------- -------- ------ ------ Distributions Net investment income.......... (0.57) (0.55) (0.53) (0.55) -------- -------- ------ ------ Total Distributions............ (0.57) (0.55) (0.53) (0.55) -------- -------- ------ ------ Change in Net Asset Value....... 0.49 (0.01) (0.25) 0.21 -------- -------- ------ ------ Net Asset Value, End of Period.. $ 10.10 $ 9.61 $ 9.62 $ 9.87 ======== ======== ====== ====== Total Return.................... 11.30% 5.91% 2.72% 7.58%(b) Ratios/Supplemental Data: Net Assets at end of period (000).......................... $302,099 $356,642 $3,150 $2,521 Ratio of expenses to average net assets......................... 0.84% 0.85% 0.60% 0.63%(c) Ratio of net investment income to average net assets.......... 5.62% 5.68% 5.44% 5.72%(c) Ratio of expenses to average net assets*........................ 1.10% 1.13% 1.65% 1.80%(c) Portfolio turnover**............ 25% 42% 27% 35%
/\ Formerly Premier Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. (b) Represents total return based on the activity of Classic Shares for the period from August 1, 1997 to September 1, 1997 and the activity of Premier Shares for the period from September 2, 1997 to July 31, 1998. Total return for the Premier Shares for the period from September 2, 1997 (commencement of operations) through July 31, 1998 was 8.04%. (c) Annualized. See notes to financial statements 169 AMSOUTH FUNDS Schedule of Portfolio Investments Limited Term U.S. Government Fund July 31, 2001 (Amounts in thousands, except shares) U.S. Government Agencies (53.2%)
Shares or Principal Amount Value ---------- -------- Fannie Mae (9.3%) 5.38%, 3/15/02............................................. $ 1,000 $ 1,012 5.98%, 11/12/02............................................ 500 512 5.63%, 5/14/04............................................. 500 515 5.75%, 6/15/05............................................. 250 257 6.44%, 8/14/07............................................. 500 530 6.65%, 11/14/07............................................ 500 514 -------- 3,340 -------- Federal Farm Credit Bank (6.4%) 5.76%, 7/7/03.............................................. 750 772 5.07%, 12/15/03............................................ 1,000 1,016 5.75%, 9/1/05, MTN......................................... 500 512 -------- 2,300 -------- Federal Home Loan Bank (5.0%) 5.82%, 3/30/09............................................. 1,000 1,014 6.34%, 6/29/04............................................. 750 786 -------- 1,800 -------- Freddie Mac (7.0%) 5.00%, 1/15/04............................................. 1,000 1,014 6.16%, 9/25/02............................................. 500 514 6.53%, 3/3/08.............................................. 1,000 1,001 -------- 2,529 -------- Government National Mortgage Assoc. (8.4%) 5.50%, 3/15/16, Pool #523055............................... 983 972 7.00%, 8/15/11, Pool #423984............................... 418 432 7.00%, 9/15/11, Pool #423923............................... 397 411 7.50%, 5/15/10, Pool #407408............................... 369 385 7.50%, 8/15/11, Pool #423914............................... 430 449 7.50%, 10/15/11, Pool #431451.............................. 324 338 9.00%, 12/15/01, Pool #152718.............................. 1 1 9.00%, 2/15/03, Pool #248038............................... 37 39 -------- 3,027 -------- Private Export Funding (7.2%) 6.45%, 9/30/04............................................. 1,000 1,052 5.53%, 4/30/06............................................. 1,000 1,018 5.75%, 1/15/08............................................. 500 511 -------- 2,581 -------- Tennessee Valley Authority (9.9%) 6.50%, 8/20/01............................................. 1,000 1,001 5.28%, 9/14/01............................................. 1,000 1,001 6.00%, 9/24/02............................................. 1,000 1,023 5.38%, 11/13/08............................................ 600 598 -------- 3,623 -------- TOTAL U.S. GOVERNMENT AGENCIES............................. 19,200 --------
U.S. Treasury Notes (42.4%)
Shares or Principal Amount Value ---------- -------- 7.50%, 11/15/01............................................ $ 3,500 $ 3,540 6.63%, 4/30/02............................................. 1,500 1,535 7.50%, 5/15/02............................................. 1,000 1,032 6.25%, 6/30/02............................................. 750 769 5.63%, 12/31/02............................................ 1,000 1,028 6.50%, 8/15/05............................................. 2,000 2,152 5.63%, 2/15/06............................................. 2,000 2,094 6.50%, 10/15/06............................................ 2,000 2,171 4.75%, 11/15/08............................................ 1,000 991 -------- TOTAL U.S. TREASURY NOTES.................................. 15,312 -------- Investment Companies (2.9%) AIM Treasury Money Market Fund............................. 4,334 4 AmSouth Treasury Reserve Money Market Fund................. 1,046,634 1,047 -------- TOTAL INVESTMENT COMPANIES................................. 1,051 -------- TOTAL INVESTMENTS (Cost $34,931) (a) -- 98.5%............................... 35,563 Other assets in excess of liabilities -- 1.5%.............. 528 -------- NET ASSETS -- 100.0%....................................... $ 36,091 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation................................................. $646 Unrealized depreciation................................................. (14) ---- Net unrealized appreciation............................................. $632 ====
MTN -- Medium Term Note See notes to financial statements 170 AMSOUTH FUNDS Limited Term U.S. Government Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $34,931)........................... $35,563 Interest and dividends receivable.............................. 542 Collateral for securities loaned, at fair value................ 3,638 Prepaid expenses and other assets.............................. 8 ------- Total Assets.................................................. 39,751 Liabilities: Payable upon return of securities loaned....................... $3,638 Accrued expenses and other payables: Investment advisory fees...................................... 6 Administration fees........................................... 1 Shareholder servicing and distribution fees................... 4 Custodian fees................................................ 1 Other......................................................... 10 ------ Total Liabilities............................................. 3,660 ------- Net Assets: Capital........................................................ 36,633 Accumulated net investment income.............................. 40 Accumulated net realized losses from investment transactions... (1,214) Unrealized appreciation from investments....................... 632 ------- Net Assets..................................................... $36,091 ======= Class A Shares Net Assets.................................................... $ 3,003 Shares outstanding............................................ 292 Redemption price per share.................................... $ 10.26 ======= Class A Shares -- Maximum Sales Charge......................... 4.00% ------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)............................................ $ 10.69 ======= Class B Shares Net Assets.................................................... $ 737 Shares outstanding............................................ 72 Offering price per share* .................................... $ 10.27 ======= Trust Shares (b) Net Assets.................................................... $32,351 Shares outstanding............................................ 3,153 Offering and redemption price per share....................... $ 10.26 =======
* Redemption price per share varies by length of time shares are held. (a) Formerly ISG Limited Term U.S. Government Fund. (b) Formerly Institutional Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income.................................................... $2,107 Dividend income.................................................... 55 Securities lending income.......................................... 1 ------ Total Investment Income........................................... 2,163 Expenses: Investment advisory fees........................................... $244 Administration fees................................................ 75 Distribution fees -- Class B Shares................................ 4 Shareholder servicing fees -- Class A Shares....................... 8 Shareholder servicing fees -- Class B Shares....................... 1 Shareholder servicing fees -- Trust Shares (b)..................... 50 Custodian fees..................................................... 10 Accounting fees.................................................... 12 Transfer agent fees................................................ 54 Registration and filing fees....................................... 30 Other fees......................................................... 17 ---- Total expenses before fee reductions.............................. 505 Expenses reduced by Investment Advisor............................ (56) Expenses reduced by Administrator................................. (19) Expenses reduced by Transfer Agent................................ (24) Expenses reduced by Distributor................................... (17) Expenses reduced by Fund Accountant............................... (4) ------ Net expenses...................................................... 385 ------ Net Investment Income.............................................. 1,778 ------ Realized/Unrealized Gains from Investments: Net realized gains from investment transactions.................... 16 Change in unrealized appreciation/depreciation from investments.... 1,398 ------ Net realized/unrealized gains on investments....................... 1,414 ------ Change in net assets resulting from operations..................... $3,192 ======
See notes to financial statements 171 AMSOUTH FUNDS Limited Term U.S. Government Fund (a) Statements of Changes in Net Assets
Year Ended Period Ended Year Ended July 31, July 31, December 31, 2001 2000 (b) 1999 ---------- ------------ ------------ (Amounts in thousands) From Investment Activities: Operations: Net investment income.................... $ 1,778 $ 1,280 $ 2,342 Net realized gains (losses) from investment transactions................. 16 (77) 22 Change in unrealized appreciation/depreciation from investments............................. 1,398 153 (1,865) ------- ------- ------- Change in net assets resulting from operations............................... 3,192 1,356 499 ------- ------- ------- Distributions to Class A Shareholders: From net investment income............... (160) (98) (144) From net realized gains on investment transactions............................ -- -- (5) Distributions to Class B Shareholders: From net investment income............... (20) (9) (20) Distributions to Trust Shareholders (c): From net investment income............... (1,622) (1,091) (2,178) From net realized gains on investment transactions............................ -- -- (54) ------- ------- ------- Change in net assets from shareholder distributions............................ (1,802) (1,198) (2,401) ------- ------- ------- Change in net assets from capital transactions............................. (7,116) (4,655) (995) ------- ------- ------- Change in net assets...................... (5,726) (4,497) (2,897) Net Assets: Beginning of period...................... 41,817 46,314 49,211 ------- ------- ------- End of period............................ $36,091 $41,817 $46,314 ======= ======= =======
(a) Formerly ISG Limited Term U.S. Government Fund. (b) For the period from January 1, 2000 through July 31, 2000. (c) Formerly Institutional Shares. See notes to financial statements 172 AMSOUTH FUNDS Limited Term U.S. Government Fund (a) Financial Highlights, Class A Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Year Ended Period Ended July 31, July 31, December 31, December 31, December 31, 2001 + 2000 (b) 1999 1998 1997 (c) ---------- ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Period.... $ 9.89 $ 9.85 $10.25 $10.12 $ 10.00 ------ ------ ------ ------ ------- Investment Activities Net investment income.. 0.47 0.28 0.50 0.53 0.42 Net realized and unrealized gain (losses) from investments........... 0.37 0.02 (0.39) 0.14 0.12 ------ ------ ------ ------ ------- Total from Investment Activities............ 0.84 0.30 0.11 0.67 0.54 ------ ------ ------ ------ ------- Distributions Net investment income.. (0.47) (0.26) (0.50) (0.53) (0.42) Net realized gains from investment transactions.......... -- -- (0.01) (0.01) -- ------ ------ ------ ------ ------- Total Distributions.... (0.47) (0.26) (0.51) (0.54) (0.42) ------ ------ ------ ------ ------- Change in Net Asset Value.................. 0.37 0.04 (0.40) 0.13 0.12 ------ ------ ------ ------ ------- Net Asset Value, End of Period................. $10.26 $ 9.89 $ 9.85 $10.25 $ 10.12 ====== ====== ====== ====== ======= Total Return (excludes sales charge).......... 8.71% 3.11%(d) 1.08% 6.69% 5.54%(d) Ratios/Supplemental Data: Net Assets at end of period (000)........... $3,003 $3,791 $3,571 $2,437 $20,103 Ratio of expenses to average net assets..... 1.15% 1.09%(e) 0.98% 1.02% 1.00%(e) Ratio of net investment income to average net assets................. 4.63% 4.89%(e) 4.93% 5.16% 5.34%(e) Ratio of expenses to average net assets*.... 1.42% 1.36%(e) 1.40% 1.54% 1.62%(e) Portfolio turnover**.... 31% 4% 17% 86% 52%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Limited Term U.S. Government Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from February 28, 1997 (commencement of operations) through December 31, 1997. (d) Not annualized. (e) Annualized. See notes to financial statements 173 AMSOUTH FUNDS Limited Term U.S. Government Fund (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Period Ended July 31, July 31, December 31, December 31, 2001 + 2000 (b) 1999 1998 (c) ---------- ------------ ------------ ------------ Net Asset Value, Beginning of Period................. $ 9.90 $ 9.86 $10.26 $10.12 ------ ------ ------ ------ Investment Activities Net investment income..... 0.38 0.25 0.41 0.35 Net realized and unrealized gains (losses) from investments......... 0.39 0.01 (0.39) 0.15 ------ ------ ------ ------ Total from Investment Activities............... 0.77 0.26 0.02 0.50 ------ ------ ------ ------ Distributions Net investment income..... (0.40) (0.22) (0.41) (0.35) Net realized gains from investment transactions.. -- -- (0.01) (0.01) ------ ------ ------ ------ Total Distributions....... (0.40) (0.22) (0.42) (0.36) ------ ------ ------ ------ Change in Net Asset Value.. 0.37 0.04 (0.40) 0.14 ------ ------ ------ ------ Net Asset Value, End of Period.................... $10.27 $ 9.90 $ 9.86 $10.26 ====== ====== ====== ====== Total Return (excludes redemption charge)........ 7.91% 2.67%(d) 0.22% 4.98%(d) Ratios/Supplemental Data: Net Assets at end of period (000)..................... $ 737 $ 378 $ 462 $ 430 Ratio of expenses to average net assets........ 1.90% 1.88%(e) 1.83% 1.97%(e) Ratio of net investment income to average net assets.................... 3.75% 4.13%(e) 4.06% 4.01%(e) Ratio of expenses to average net assets*....... 2.17% 2.06%(e) 1.99% 2.24%(e) Portfolio turnover**....... 31% 4% 17% 86%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Limited Term U.S. Government Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from March 3, 1998 (commencement of operations) through December 31, 1998. (d) Not annualized. (e) Annualized. See notes to financial statements 174 AMSOUTH FUNDS Limited Term U.S. Government Fund (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Period Ended July 31, July 31, December 31, December 31, 2001 + 2000 (b) 1999 1998 (c) ---------- ------------ ------------ ------------ Net Asset Value, Beginning of Period................ $ 9.89 $ 9.85 $ 10.25 $ 10.29 ------- ------- ------- ------- Investment Activities Net investment income.... 0.48 0.29 0.50 0.03 Net realized and unrealized gains (losses) from investments............. 0.38 0.02 (0.39) (0.04) ------- ------- ------- ------- Total from Investment Activities.............. 0.86 0.31 0.11 (0.01) ------- ------- ------- ------- Distributions Net investment income.... (0.49) (0.27) (0.50) (0.03) Net realized gains from investment transactions............ -- -- (0.01) -- ------- ------- ------- ------- Total Distributions...... (0.49) (0.27) (0.51) (0.03) ------- ------- ------- ------- Change in Net Asset Value.................... 0.37 0.04 (0.40) (0.04) ------- ------- ------- ------- Net Asset Value, End of Period................... $ 10.26 $ 9.89 $ 9.85 $ 10.25 ======= ======= ======= ======= Total Return.............. 8.88% 3.18%(d) 1.08% (0.14%)(d) Ratios/Supplemental Data: Net Assets at end of period (000)............. $32,351 $37,648 $42,281 $46,344 Ratio of expenses to average net assets....... 1.00% 0.99%(e) 0.98% 0.69%(e) Ratio of net investment income to average net assets................... 4.76% 5.00%(e) 4.94% 5.29%(e) Ratio of expenses to average net assets*...... 1.32% 1.21%(e) 1.14% 0.96%(e) Portfolio turnover**...... 31% 4% 17% 86%
/\ Formerly Institutional Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Limited Term U.S. Government Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from December 14, 1998 (commencement of operations) through December 31, 1998. (d) Not annualized. (e) Annualized. See notes to financial statements 175 AMSOUTH FUNDS Schedule of Portfolio Investments Municipal Bond Fund July 31, 2001 (Amounts in thousands, except shares) Municipal Bonds (95.3%)
Shares or Principal Amount Value ---------- -------- Alabama (46.9%) Alabama 21st Century Authority, Tobacco Settlement Revenue, 5.13%, 12/1/05.................................. $ 1,000 $ 1,025 Alabama 21st Century Authority, Tobacco Settlement Revenue, 5.25%, 12/1/06.................................. 1,000 1,031 Alabama State Agriculture & Mechanical University, Revenue, 4.55%, 11/1/09, Callable 5/1/08 @ 102, MBIA..... 2,245 2,309 Alabama State Agriculture & Mechanical University, Revenue, 4.65%, 11/1/10, Callable 5/1/08 @ 102, MBIA..... 2,355 2,426 Alabama State Agriculture & Mechanical University, Revenue, 6.50%, 11/1/25, Callable 11/1/05 @ 102, MBIA.... 2,035 2,320 Alabama State Corrections Institution, Series A, 4.90%, 4/1/03, MBIA............................................. 3,060 3,155 Alabama State Judicial Building Authority, Judicial Facilities Project, 4.75%, 1/1/05, AMBAC................. 3,700 3,853 Alabama State Judicial Building Authority, Judicial Facilities Project, 4.85%, 1/1/06, AMBAC................. 3,880 4,071 Alabama State Mental Health Finance Authority, Special Tax, 4.88%, 5/1/03, MBIA................................. 2,000 2,065 Alabama State Public School & College Authority, 5.00%, 12/1/05, Callable 6/1/03 @ 103........................... 3,390 3,578 Alabama State Public School & College Authority, 5.13%, 11/1/14, Callable 11/1/08 @ 101.5, FSA................... 8,000 8,309 Alabama State Public School & College Authority, Revenue, Series A, 4.38%, 8/1/04............................................ 10,000 10,317 Alabama State Public School & College Authority, Capital Improvement, 4.75%, 11/1/06, Callable 11/1/05 @ 101...... 5,000 5,259 Alabama State Water Pollution Control Authority, Revolving Fund, Series B, 5.25%, 8/15/08, Callable 8/15/06 @ 100, AMBAC.................................................... 1,095 1,157 Alabama State Water Pollution Control Authority, Revolving Fund, Series B, 5.38%, 8/15/10, Callable 8/15/06 @ 100, AMBAC.................................................... 860 904 Alabama State Water Pollution Control Authority, Revolving Fund, Series B, 5.40%, 8/15/11, Callable 8/15/06 @ 100, AMBAC.................................................... 1,840 1,930 Alabama State Water Pollution Control Authority, Revolving Fund, Series B, 5.50%, 8/15/16, Callable 8/15/06 @ 100, AMBAC.................................................... 3,890 4,015 Alabama State, Series A, GO, 4.60%, 10/1/05............... 3,500 3,657
Municipal Bonds, continued
Shares or Principal Amount Value ---------- -------- Alabama, continued Auburn University, University Revenues, General Fee, 5.25%, 6/1/06, Callable 6/1/03 @ 102, MBIA............... $ 1,000 $ 1,047 Birmingham, GO, 4.90%, 7/1/06............................. 1,500 1,585 Birmingham, Capital Improvements, Series A, GO, 4.75%, 10/1/10, Callable 4/1/08 @ 102............................................. 1,340 1,392 Birmingham, Capital Improvements, Series A, GO, 4.85%, 10/1/11, Callable 4/1/08 @ 102............................................. 1,430 1,484 Birmingham, Capital Improvements, Series B, GO, 4.80%, 10/1/08, Callable 4/1/07 @ 102............................................. 1,040 1,094 Birmingham Industrial Water Board, Industrial Water Supply, 5.30%, 3/1/04, Callable 3/1/03 @ 102, ETM........ 1,100 1,157 Birmingham Industrial Water Board, Industrial Water Supply, 5.40%, 3/1/05, Callable 3/1/03 @ 102, ETM........ 1,000 1,067 Birmingham Industrial Water Board, Industrial Water Supply, 5.50%, 3/1/06, Prerefunded 3/1/05 @ 100.......... 1,300 1,392 Birmingham Industrial Water Board, Industrial Water Supply, 6.20%, 7/1/08, Prerefunded 1/1/07 @ 100.......... 3,105 3,364 Birmingham Special Care Facilities Funding Authority, Series D, 4.95%, 11/1/14, Prerefunded 11/1/07 @ 100...... 2,900 3,072 Birmingham Waterworks & Sewer Board, Water & Sewer Revenue, 5.90%, 1/1/03, Callable 1/1/02 @ 102............ 1,375 1,421 Clark & Mobile County Gas District, 5.60%, 12/1/17, Callable 12/1/06 @ 102, MBIA............................. 1,045 1,096 Daphne Special Care Facilities Financing Authority, Presbyterian Retirement Corp., 7.30%, 8/15/18, Prerefunded 8/15/01 @ 100................................ 9,500 9,515 Dothan, GO, 5.05%, 9/1/09, FSA............................ 905 965 Dothan, GO, 5.10%, 9/1/10, Callable 9/1/09 @ 101, FSA..... 1,515 1,619 Florence Water, Series B, 4.70%, 12/1/13, Callable 12/1/08 @ 102, FSA............................................... 1,025 1,038 Florence, Warrants, Series A, GO, 4.65%, 9/1/03, MBIA..... 2,180 2,253 Florence, Warrants, Series A, GO, 4.35%, 12/1/07, FSA..... 390 402 Florence, Warrants, Series A, GO, 4.40%, 12/1/08.......... 405 417 Florence, Warrants, Series A, GO, 4.50%, 12/1/09.......... 425 437 Florence, Warrants, Series A, GO, 4.60%, 12/1/10, Callable 12/1/08 @ 102............................................ 445 459 Florence, Warrants, Series B, GO, 4.35%, 12/1/07, FSA..... 790 814
Continued 176 AMSOUTH FUNDS Schedule of Portfolio Investments Municipal Bond Fund July 31, 2001 (Amounts in thousands, except shares) Municipal Bonds, continued
Shares or Principal Amount Value ---------- -------- Alabama, continued Florence, Warrants, Series B, GO, 4.40%, 12/1/08, FSA...... $ 825 $ 849 Florence, Warrants, Series B, GO, 4.50%, 12/1/09, Callable 12/1/08 @ 102, FSA........................................ 865 889 Florence, Warrants, Series B, GO, 4.60%, 12/1/10, Callable 12/1/08 @ 102, FSA........................................ 900 928 Gadsden East Alabama Medical Clinic Board, Baptist Hospital of Gadsden, Inc., Series A, 7.80%, 11/1/21, Prerefunded 11/1/01 @ 102............................................. 3,950 4,077 Hoover, Warrants, GO, 4.50%, 3/1/13, Prerefunded 3/1/03 @ 100....................................................... 5,450 5,398 Huntsville, Series A, GO, 4.75%, 11/1/18, Callable 11/1/08 @ 101..................................................... 1,445 1,404 Huntsville Electric, 4.60%, 12/1/09, Callable 12/1/07 @ 102....................................................... 550 568 Huntsville Electric, 4.70%, 12/1/10, Callable 12/1/07 @ 102....................................................... 660 681 Huntsville Electric, 4.80%, 12/1/11, Callable 12/1/07 @ 102....................................................... 680 702 Huntsville, Warrants, Series B, GO, 4.00%, 11/1/05............................................ 3,120 3,187 Huntsville, Warrants, Series B, GO, 4.00%, 11/1/06............................................ 3,245 3,301 Huntsville, Warrants, Series B, GO, 4.10%, 11/1/07............................................ 3,380 3,433 Huntsville Water System, Warrants, 5.00%, 5/1/02, AMBAC.... 2,000 2,034 Jefferson County, GO, 5.30%, 4/1/09, Prerefunded 4/1/03 @ 102....................................................... 4,000 4,144 Jefferson County Board of Education, Capital Outlay, 5.40%, 2/15/10, Callable 2/15/03 @ 102, AMBAC.................... 1,000 1,056 Jefferson County, Sewer Revenue Warrants, 5.40%, 9/1/04, Prerefunded 3/1/03 @ 102, MBIA............................ 2,400 2,548 Jefferson County, Warrants, GO, 5.00%, 4/1/04, Callable 4/1/03 @ 102.............................................. 5,000 5,212 Jefferson County, Warrants, GO, 5.10%, 2/15/10, FSA.............................................. 1,000 1,065 Madison Water & Wastewater Board, Water & Sewer Revenue,, 4.60%, 12/1/11, AMBAC..................................... 725 738 Mobile County, Series A, GO, 5.00%, 2/1/04, Callable 2/1/03 @ 102..................................................... 1,350 1,406 Mobile County, Warrants, Series A, Limited GO, 5.10%, 2/1/05, Callable 2/1/03 @ 102............................. 5,000 5,211 Mobile, Warrants, GO, 6.50%, 2/15/05, AMBAC................ 1,630 1,793 Mobile, Warrants, GO, 6.50%, 2/15/06, AMBAC................ 1,685 1,884 Mobile, Warrants, GO, 4.85%, 2/15/09, GO................... 2,250 2,297 Mobile Water & Sewer Commissioners, Water & Sewer Revenue, 5.00%, 1/1/05, FGIC....................................... 3,250 3,411
Municipal Bonds, continued
Shares or Principal Amount Value ---------- -------- Alabama, continued Montgomery County, Warrants, GO, 5.00%, 11/1/04, Callable 11/1/02 @ 102.................................... $ 1,500 $ 1,561 Montgomery, Warrants, Series A, GO, 5.00%, 5/1/05, Callable 5/1/03 @ 102.............................................. 1,040 1,086 Montgomery, Warrants, Series A, GO, 5.00%, 5/1/06, Callable 5/1/03 @ 102.............................................. 1,000 1,041 Montgomery Waterworks & Sanitary Sewer Board, 5.50%, 9/1/08, Callable 9/1/06 @ 101, MBIA....................... 3,000 3,235 Montgomery Waterworks & Sanitary Sewer Board, Series B, 5.70%, 9/1/02............................................. 1,000 1,030 Montgomery Waterworks & Sanitary Sewer Board, Series B, 6.25%, 9/1/08, Callable 9/1/02 @ 102..................................... 2,500 2,634 Montgomery, Waterworks & Sanitary Sewer Board, Series B, 6.30%, 9/1/10, Callable 9/1/02 @ 102..................................... 3,565 3,758 Shelby County Board of Education, Warrants, Capital Outlay, 4.80%, 2/1/10, Callable 2/1/09 @ 101, AMBAC.............................. 1,005 1,047 Shelby County, Warrants, Series A, 5.60%, 8/1/02, AMBAC.... 1,990 2,046 Shelby County, Warrants, Series A, 5.70%, 2/1/03, AMBAC.... 1,830 1,902 Talladega County Industrial Development Board, Cyprus 1 Project, 9.75%, 12/1/13................................... 335 337 University of Alabama, General Fee, 4.60%, 6/1/09, Callable 6/1/07 @ 102, MBIA........................................ 1,200 1,239 University of Alabama, General Fee, 4.70%, 6/1/10, Callable 6/1/07 @ 102, MBIA........................................ 1,300 1,342 University of Alabama, General Fee, 4.75%, 6/1/11, Callable 6/1/07 @ 102, MBIA........................................ 1,500 1,542 University of South Alabama, University Revenues, Tuition, 4.70%, 11/15/08, Callable 5/15/06 @ 102, AMBAC............ 2,185 2,280 -------- 182,767 -------- Arizona (0.3%) Pima County School District No.16, Catalina Foothills, GO, 5.75%, 7/1/06, MBIA....................................... 1,200 1,314 -------- California (1.6%) Franklin-McKinley School District, Refunding, GO, 6.00%, 7/1/16, FSA............................................... 1,000 1,153 San Mateo County Transit District, Sales Tax Revenue, Series A, 5.25%, 6/1/16, Callable 6/1/09 @ 101, FSA....... 4,765 4,952 -------- 6,105 -------- Florida (7.5%) Dade County, Series DD, GO, 7.70%, 10/1/08, AMBAC.......... 1,760 2,162
Continued 177 AMSOUTH FUNDS Schedule of Portfolio Investments Municipal Bond Fund July 31, 2001 (Amounts in thousands, except shares) Municipal Bonds, continued
Shares or Principal Amount Value ---------- -------- Florida, continued Dade County, Series DD, GO, 7.70%, 10/1/12, AMBAC......... $ 1,000 $ 1,273 Florida State Board of Education, Capital Outlay, Series A, GO, 5.00%, 6/1/08..................................... 6,500 6,903 Jacksonville Water & Sewer District, Revenue, 5.00%, 10/1/20, MBIA............................................ 9,550 10,204 Reedy Creek Improvement District, Series 1, 5.50%, 10/1/08, Callable 10/1/07 @ 101, AMBAC................... 8,070 8,819 -------- 29,361 -------- Georgia (0.3%) Georgia State, Series A, GO, 6.10%, 2/1/03, Callable 9/10/01 @ 102............................................ 1,000 1,023 -------- Hawaii (1.0%) Hawaii State, GO, 5.50%, 3/1/16, Prerefunded 3/1/07 @ 102, FGIC..................................................... 3,625 4,004 -------- Illinois (2.6%) Chicago Metropolitan Water Reclamation District, Greater Chicago Capital Improvements, GO, 6.90%, 1/1/07.......... 7,830 8,982 Will County Forest Preservation District, Series B, GO, 0.00%, 12/1/18, FGIC..................................... 3,000 1,218 -------- 10,200 -------- Kentucky (0.5%) Carrollton & Henderson Public Energy Authority, Gas Revenue, Series A, 5.00%, 1/1/09, FSA.................... 2,000 2,040 -------- Louisiana (0.3%) Louisiana Local Government Environmental Facilities, Community Development Authority, Revenue, Capital Projects & Equipment Acquisition, 5.25%, 12/1/18, AMBAC.. 1,085 1,139 -------- Minnesota (0.6%) Centennial Independent School District, No. 12, Series A, GO, 5.60%, 2/1/07, MBIA.................................. 2,175 2,368 -------- Mississippi (1.4%) Medical Center Educational Building Corp. of Mississippi, Revenue, University of Mississippi Medical Center Project, 5.90%, 12/1/23, Prerefunded 12/1/04 @ 102, MBIA- IBC...................................................... 2,075 2,289 Mississippi State, Series B, GO, 5.90%, 11/15/09.......... 1,000 1,126 Mississippi State, Capital Improvements, Series A, GO, 5.20%, 8/1/11, Callable 8/1/03 @ 100.................................... 2,000 2,087 -------- 5,502 -------- Missouri (0.1%) Missouri State, Water Pollution, Series B, GO, 5.00%, 8/1/07, Callable 8/1/03 @ 102............................ 390 407 --------
Municipal Bonds, continued
Shares or Principal Amount Value ---------- -------- Ohio (2.7%) Ohio State Higher Education, Series A, GO, 5.20%, 2/1/10.. $ 9,700 $ 10,420 -------- Oklahoma (0.4%) Moore, Refunding, GO, 5.75%, 4/1/12, MBIA................. 1,530 1,687 -------- Oregon (2.0%) Salem, GO, 4.45%, 12/1/10, Callable 6/1/09 @ 100, FSA..... 2,365 2,406 Washington County Criminal Justice Facilities, GO, 5.00%, 12/1/09, Callable 12/1/07 @ 100.......................... 5,285 5,559 -------- 7,965 -------- Pennsylvania (0.4%) Bethlehem Area School District, GO, 6.00%, 3/1/16, Prerefunded 3/1/06 @ 100, State Aid Withholding, MBIA.... 1,500 1,653 -------- Rhode Island (1.1%) Rhode Island Port Authority & Economic Development Corp., Revenue, Shepard Building Project, Series B, 6.75%, 6/1/25, Prerefunded 6/1/04 @ 102, AMBAC.................. 1,000 1,114 Rhode Island State, Series A, GO, 5.75%, 9/1/13, Callable 9/1/09 @ 101, FGIC....................................... 3,065 3,367 -------- 4,481 -------- South Carolina (2.5%) Beaufort County School District, Series B, GO, 4.10%, 2/1/09, Callable 2/1/07 @ 101, SCSDE..................... 5,525 5,522 Beaufort County School District, Series B, GO, 4.90%, 3/1/09, Callable 3/1/05 @ 101............................ 4,125 4,275 -------- 9,797 -------- Tennessee (3.0%) Jackson, Improvements, 5.00%, 3/1/10, Prerefunded 3/1/05 @ 102...................................................... 2,000 2,078 Metropolitan Government, Nashville & Davidson County, Industrial Development Board, Revenue, Multi-Family Housing, Arbor, Series C, 7.50%, 11/15/12, Prerefunded 5/15/12 @ 100................................ 1,000 1,264 Metropolitan Government, Nashville & Davidson County Industrial Development Board, Revenue, Multi-Family Housing, Arbor, Series B, 7.50%, 11/15/10, Prerefunded 5/15/10 @ 100................................ 1,000 1,242 Tennessee State, Series B, GO, 5.00%, 5/1/15, Callable 5/1/08 @ 100............................................. 1,500 1,526 Tennessee State, Series B, GO, 4.60%, 5/1/07, Callable 5/1/06 @ 100............................................. 5,495 5,688 -------- 11,798 --------
Continued 178 AMSOUTH FUNDS Schedule of Portfolio Investments Municipal Bond Fund July 31, 2001 (Amounts in thousands, except shares) Municipal Bonds, continued
Shares or Principal Amount Value ---------- -------- Texas (9.0%) Cypress-Fairbanks Independent School District, Series A, GO, 6.13%, 8/1/10, Prerefunded 8/1/03 @ 100, PSF-GTD...... $ 2,830 $ 3,003 Dallas County, Series A, GO, 5.25%, 8/15/09................ 3,000 3,225 El Paso, Limited GO, 6.10%, 8/15/03, FGIC.................. 855 885 El Paso, Limited GO, 6.10%, 8/15/03, FGIC.................. 145 150 Harris County, Housing Financial Corp., Multi-Family Housing Revenue, Breton Mill Partners, 7.00%, 3/1/07, Prerefunded 2/15/07 @ 100................................. 1,000 1,160 Katy Independent School District, Series A, GO, 4.50%, 2/15/20, Callable 2/15/08 @ 100, PSF-GTD........................... 3,600 3,292 Lubbock Health Facilities Development Corp., Hospital Revenue, Methodist Hospital, Series B, 6.75%, 12/1/10, AMBAC..................................................... 1,000 1,197 Mesquite Independent School District, Series A, GO, 4.70%, 8/15/08, Callable 8/15/07 @ 100........................... 4,000 4,139 Richardson Independent School District, Series C, 4.75%, 2/15/22, Callable 2/15/08 @ 100, PSF-GTD........................... 1,000 950 San Antonio, Series A, GO, 4.75%, 2/1/19, Callable 2/1/09 @ 100....................................................... 1,590 1,524 Texas State, Series B, GO, 5.25%, 10/1/08, Callable 10/1/03 @ 100..................................................... 5,000 5,240 University of Texas, 4.60%, 7/1/08, Callable 7/1/06 @ 100.. 3,575 3,677 University of Texas, Series B, 4.25%, 8/15/09, Callable 8/15/07 @ 100............................................. 5,455 5,489 Whitehouse Independent School District, GO, 4.80%, 2/15/12, Callable 2/15/08 @ 100.................................... 1,000 1,016 -------- 34,947 -------- Utah (5.1%) Davis County School District, GO, 4.38%, 6/1/08, School Board Guaranty............................................ 4,805 4,919 Jordan School District, GO, 4.80%, 6/15/08, Callable 6/15/07 @ 100............................................. 3,810 3,973 Utah State, Series F, GO, 5.00%, 7/1/09, Callable 7/1/07 @ 100..................................... 5,000 5,440 Utah State, Series F, GO, 5.00%, 7/1/09, Callable 7/1/07 @ 100..................................... 5,200 5,441 -------- 19,773 -------- Virginia (2.9%) Virginia College Building Authority, Series A, 5.00%, 9/1/12, Callable 9/1/07 @ 101............................. 2,000 2,080 Virginia State, GO, 5.00%, 6/1/08, Callable 6/1/07 @ 100... 5,000 5,302 Virginia State Public School Authority, Series S, 5.25%, 8/1/09.................................................... 3,500 3,791 -------- 11,173 --------
Municipal Bonds, continued
Shares or Principal Amount Value ---------- -------- Washington (2.1%) King County Public Hospital District No. 002, GO, 5.25%, 12/1/13, MBIA............................................. $ 1,095 $ 1,145 Washington State, GO, 5.75%, 9/1/08........................ 6,500 7,197 -------- 8,342 -------- West Virginia (0.3%) Raleigh Fayette & Nicholas Counties, 6.20%, 8/1/04......... 1,000 1,086 -------- Wisconsin (0.7%) Wisconsin State Health & Educational Facilities Authority, Revenue, Wheaton Franciscan Services, Inc., 6.10%, 8/15/09, MBIA............................................. 2,420 2,718 -------- TOTAL MUNICIPAL BONDS...................................... 372,070 -------- Investment Companies (3.2%) Federated Tax-Free Money Market Fund....................... 4,807 5 Goldman Sachs Tax-Free Money Market Fund................... 12,366,267 12,366 -------- TOTAL INVESTMENT COMPANIES................................. 12,371 -------- TOTAL INVESTMENTS (Cost $368,576) (a) -- 98.5%.............................. 384,441 Other assets in excess of liabilities --1.5%.............. 5,688 -------- NET ASSETS -- 100.0%....................................... $390,129 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation.............................................. $15,948 Unrealized depreciation.............................................. (83) ------- Net unrealized appreciation.......................................... $15,865 =======
AMBAC -- Insured by AMBAC Indemnity Corp. ETM -- Escrowed to Maturity FGIC -- Insured by Financial Guaranty Insurance Corp. FSA -- Insured by Financial Security Assurance Inc. GO -- General Obligation MBIA -- Insured by Municipal Bond Insurance Assoc. MBIA-IBC -- MBIA Insured Bond Certificates PSF-GTD -- Permanent School Fund Guarantee SCSDE -- South Carolina School District Enhancement Continued 179 AMSOUTH FUNDS Municipal Bond Fund Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $368,576)............................ $384,441 Interest and dividends receivable................................ 5,822 Prepaid expenses and other assets................................ 12 -------- Total Assets.................................................... 390,275 Liabilities: Accrued expenses and other payables: Investment advisory fees........................................ $55 Administration fees............................................. 10 Shareholder servicing and distribution fees..................... 35 Custodian fees.................................................. 9 Other........................................................... 37 --- Total Liabilities............................................... 146 -------- Net Assets: Capital.......................................................... 373,113 Accumulated net investment income................................ 875 Accumulated net realized gains from investment transactions...... 276 Unrealized appreciation from investments......................... 15,865 -------- Net Assets....................................................... $390,129 ======== Class A Shares (a) Net Assets...................................................... $ 8,022 Shares outstanding.............................................. 788 Redemption price per share...................................... $ 10.18 ======== Class A Shares -- Maximum Sales Charge........................... 4.00% -------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)....... $ 10.60 ======== Class B Shares Net Assets...................................................... $ 1,777 Shares outstanding.............................................. 175 Offering price per share*....................................... $ 10.17 ======== Trust Shares (b) Net Assets...................................................... $380,330 Shares outstanding.............................................. 37,330 Offering and redemption price per share......................... $ 10.19 ========
* Redemption price per share varies by length of time shares are held. (a) Formerly Classic Shares. (b) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income................................................ $18,568 Dividend income................................................ 153 ------- Total Investment Income....................................... 18,721 Expenses: Investment advisory fees....................................... $2,546 Administration fees............................................ 784 Distribution fees -- Class B Shares............................ 9 Shareholder servicing fees -- Class A Shares (a)............... 17 Shareholder servicing fees -- Class B Shares................... 3 Shareholder servicing fees -- Trust Shares (b)................. 576 Custodian fees................................................. 108 Accounting fees................................................ 85 Transfer agent fees............................................ 99 Other fees..................................................... 104 ------ Total expenses before fee reductions.......................... 4,331 Expenses reduced by Investment Advisor........................ (979) Expenses reduced by Administrator............................. (196) Expenses reduced by Distributor............................... (192) Expenses reduced by Fund Accountant........................... (45) ------- Net expenses.................................................. 2,919 ------- Net Investment Income.......................................... 15,802 ------- Realized/Unrealized Gains from Investments: Net realized gains from investment transactions................ 638 Change in unrealized appreciation/depreciation from investments................................................... 15,672 ------- Net realized/unrealized gains on investments................... 16,310 ------- Change in net assets resulting from operations................. $32,112 =======
See notes to financial statements 180 AMSOUTH FUNDS Municipal Bond Fund Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................... $ 15,802 $ 15,180 Net realized gains (losses) from investment transactions........................................... 638 (26) Change in unrealized appreciation/depreciation from investments............................................ 15,672 12 -------- -------- Change in net assets resulting from operations........... 32,112 15,166 -------- -------- Distributions to Class A Shareholders (a): From net investment income.............................. (261) (169) From net realized gains on investment transactions...... -- (15) Distributions to Class B Shareholders: From net investment income.............................. (37) (13) From net realized gains on investment transactions...... -- (1) Distributions to Trust Shareholders (b): From net investment income.............................. (15,232) (14,994) From net realized gains on investment transactions...... -- (1,647) -------- -------- Change in net assets from shareholder distributions...... (15,530) (16,839) -------- -------- Change in net assets from capital transactions........... (21,369) 72,586 -------- -------- Change in net assets..................................... (4,787) 70,913 Net Assets: Beginning of period..................................... 394,916 324,003 -------- -------- End of period........................................... $390,129 $394,916 ======== ========
(a) Formerly Classic Shares. (b) Formerly Premier Shares. See notes to financial statements 181 AMSOUTH FUNDS Municipal Bond Fund Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) 1997 (b) ---------- ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period.... $ 9.76 $ 9.87 $10.13 $10.15 $ 10.00 ------ ------ ------ ------ -------- Investment Activities Net investment income.. 0.39 0.40 0.41 0.86 0.04 Net realized and unrealized gains (losses) from investments........... 0.41 (0.06) (0.17) (0.43) 0.15 ------ ------ ------ ------ -------- Total from Investment Activities............ 0.80 0.34 0.24 0.43 0.19 ------ ------ ------ ------ -------- Distributions Net investment income.. (0.38) (0.40) (0.39) (0.42) (0.04) Net realized gains from investment transactions.......... -- (0.05) (0.11) (0.03) -- ------ ------ ------ ------ -------- Total Distributions.... (0.38) (0.45) (0.50) (0.45) (0.04) ------ ------ ------ ------ -------- Change in Net Asset Value.................. 0.42 (0.11) (0.26) (0.02) 0.15 ------ ------ ------ ------ -------- Net Asset Value, End of Period................. $10.18 $ 9.76 $ 9.87 $10.13 $ 10.15 ====== ====== ====== ====== ======== Total Return (excludes sales charge).......... 8.36% 3.62% 2.31% 4.30% 1.86%(c) Ratios/Supplemental Data: Net Assets at end of period (000)........... $8,022 $6,516 $2,694 $2,689 $337,933 Ratio of expenses to average net assets..... 0.89% 0.82% 0.71% 0.62% 0.71%(d) Ratio of net investment income to average net assets................. 3.88% 4.12% 4.01% 4.26% 4.31%(d) Ratio of expenses to average net assets*.... 1.20% 1.20% 1.20% 0.92% 1.04%(d) Portfolio turnover**.... 5% 9% 21% 29% 2%
/\ Formerly Classic Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (September 2, 1997) are being reflected as Classic Shares. (b) For the period from July 1, 1997 (commencement of operations) through July 31, 1997. (c) Not annualized. (d) Annualized. See notes to financial statements 182 AMSOUTH FUNDS Municipal Bond Fund Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended July 31, July 31, July 31, 2001 + 2000 1999 (a) ---------- ---------- ------------ Net Asset Value, Beginning of Period...... $ 9.75 $9.87 $10.28 ------ ----- ------ Investment Activities Net investment income.................... 0.32 0.31 0.14 Net realized and unrealized gains (losses) from investments............... 0.41 (0.05) (0.41) ------ ----- ------ Total from Investment Activities......... 0.73 0.26 (0.27) ------ ----- ------ Distributions Net investment income.................... (0.31) (0.33) 0.14 Net realized gains from investment transactions............................ -- (0.05) -- ------ ----- ------ Total Distributions...................... (0.31) (0.38) 0.14 ------ ----- ------ Change in Net Asset Value................. 0.42 (0.12) (0.41) ------ ----- ------ Net Asset Value, End of Period............ $10.17 $9.75 $ 9.87 ====== ===== ====== Total Return (excludes redemption charge).................................. 7.60% 2.75% (2.60)%(b) Ratios/Supplemental Data: Net Assets at end of period (000)......... $1,777 $ 889 $ 16 Ratio of expenses to average net assets... 1.64% 1.64% 1.60%(c) Ratio of net investment income to average net assets............................... 3.12% 3.30% 3.17%(c) Ratio of expenses to average net assets*.. 1.95% 1.96% 1.87%(c) Portfolio turnover**...................... 5% 9% 21%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) For the period form February 3, 1999 (commencement of operations) through July 31, 1999. (b) Not annualized. (c) Annualized. See notes to financial statements 183 AMSOUTH FUNDS Municipal Bond Fund Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (a) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period........................ $ 9.77 $ 9.87 $ 10.14 $ 10.04 -------- -------- -------- -------- Investment Activities Net investment income......... 0.41 0.41 0.42 0.39 Net realized and unrealized gain (losses) from investments.................. 0.41 (0.05) (0.18) 0.14 -------- -------- -------- -------- Total from Investment Activities................... 0.82 0.36 0.24 0.53 -------- -------- -------- -------- Distributions Net investment income......... (0.40) (0.41) (0.40) (0.40) Net realized gains from investment transactions...... -- (0.05) (0.11) (0.03) -------- -------- -------- -------- Total Distributions........... (0.40) (0.46) (0.51) (0.43) -------- -------- -------- -------- Change in Net Asset Value...... 0.42 (0.10) (0.27) 0.10 -------- -------- -------- -------- Net Asset Value, End of Period........................ $ 10.19 $ 9.77 $ 9.87 $ 10.14 ======== ======== ======== ======== Total Return................... 8.52% 3.85% 2.30% 4.49%(b) Ratios/Supplemental Data: Net Assets at end of period (000)......................... $380,330 $387,511 $321,293 $326,464 Ratio of expenses to average net assets.................... 0.74% 0.68% 0.61% 0.64%(c) Ratio of net investment income to average net assets......... 4.04% 4.25% 4.11% 4.23%(c) Ratio of expenses to average net assets*................... 1.10% 1.02% 0.95% 0.97%(c) Portfolio turnover**........... 5% 9% 21% 29%
/\ Formerly Premier Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (September 2, 1997) are being reflected as Classic Shares. (b) Represents total return based on the activity of Classic Shares for the period from August 1, 1997 to September 1, 1997 and the activity of Premier Shares for the period from September 2, 1997 to July 31, 1998. Total return for the Municipal Bond Fund Premier Shares for the period from September 2, 1997 (commencement of operations) through July 31, 1998 was 5.27%. (c) Annualized. See notes to financial statements 184 AMSOUTH FUNDS Schedule of Portfolio Investments Florida Tax-Exempt Fund July 31, 2001 (Amounts in thousands, except shares) Municipal Bonds (96.5%)
Shares or Principal Amount Value ---------- -------- Florida (96.5%) Altamonte Springs, Health Facilities Authority, Hospital Revenue, 5.60%, 10/1/10, ETM.............................. $ 545 $ 608 Broward County Gas Tax Revenue, 5.25%, 9/1/09.............. 500 540 Broward County School District, GO, 5.60%, 2/15/07, Callable 2/15/03 @ 102.................................... 1,500 1,568 Broward County School District, GO, 6.00%, 2/15/07, Callable 2/15/02 @ 102.................................... 2,000 2,062 Clearwater Utility Revenue, 6.10%, 12/1/07, ETM............ 700 794 Dade County School Board, Certificates of Participation, Series C, 5.25%, 8/1/06, FSA.............................. 750 805 Dade County School District, 5.75%, 8/1/03, AMBAC.......... 1,000 1,055 Dade County School District, GO, 6.00%, 7/15/06............ 1,000 1,107 Dade County School District, GO, 5.00%, 2/15/14, Callable 2/15/07 @ 101, MBIA....................................... 1,000 1,024 Dade County Aviation Authority, Series 1994 B, 6.25%, 10/1/04, AMBAC............................................ 1,000 1,089 Escambia County Utility Authority, Utility System Revenue, 5.00%, 1/1/08, FGIC....................................... 1,000 1,059 Florida Housing Finance Agency, Homeowner Mortgages, Series 1995 A-1, 5.65%, 1/1/09, Callable 1/1/06 @ 102............ 665 713 Florida State, GO, 5.00%, 7/1/11, Callable 7/1/07 @ 101, OID....................................................... 220 230 Florida State, GO, 5.00%, 7/1/11, Callable 7/1/07 @ 101, ETM, OID.................................................. 780 815 Florida State Board of Education, Lottery Revenue, Series B, 5.25%, 7/1/09, Callable 7/1/08 @ 101, FGIC............. 1,000 1,077 Florida State Board of Education, Series A, GO, 5.00%, 1/1/15, Callable 1/1/08 @ 101............................. 1,000 1,017 Florida State Board of Education, Series B, GO, 5.38%, 6/1/08, Callable 6/1/07 @ 101............................. 2,000 2,159 Florida State Department of Transportation, Right of Way, Series B, GO, 5.50%, 7/1/08, Callable 7/1/07 @ 101........ 3,310 3,606 Florida State Division of Bond Finance, Department of General Services, Preservation 2000, Series A, 5.50%, 7/1/08, FSA............................................... 1,000 1,093 Florida State Division of Bond Finance, Department of General Services, Preservation 2000, Series A, 5.70%, 7/1/09, Callable 7/1/05 @ 101, AMBAC...................... 1,000 1,066
Municipal Bonds, continued
Shares or Principal Amount Value ---------- -------- Florida, continued Florida State Division of Bond Finance, Department of General Services, Preservation 2000, Series A, 5.00%, 7/1/12, Callable 7/1/07 @ 101, AMBAC..................... $ 1,000 $ 1,033 Florida State Division of Bond Finance, Department of General Services, Series B, 5.50%, 7/1/05, AMBAC......... 2,000 2,149 Florida State Division of Bond Finance, Department of Natural Resources, Preservation 2000, Series A, 5.40%, 7/1/07, Callable 7/1/03 @ 101, FSA....................... 1,000 1,045 Florida State Turnpike Authority, Turnpike Revenue, Series A, 5.50%, 7/1/11, Callable 7/1/05 @ 101, FGIC............ 1,000 1,051 Florida State, Senior Lien, Jacksonville Transportation, GO, 6.25%, 7/1/06........................................ 890 992 Florida State, Senior Lien, Jacksonville Transportation, GO, 5.25%, 7/1/15, Callable 7/1/07 @ 101................. 1,000 1,031 Florida Water Pollution Control Revenue, 5.50%, 1/15/14, Callable 7/15/11 @ 100................................... 1,000 1,080 Ft. Lauderdale Park Improvement Project, GO, 5.50%, 7/1/17, Callable 1/1/04 @ 101............................ 1,250 1,279 Hillsborough County, Capital Improvement, County Center Project, Series B, 5.00%, 7/1/13, Callable 7/1/06 @ 102, MBIA..................................................... 1,000 1,026 Jacksonville Electric Authority, St. John's River Issue 2, Series 16, 5.00%, 10/1/10, Callable 10/1/03 @ 101........ 1,000 1,024 Jacksonville, Excise Tax Revenue, Series A, 5.50%, 10/1/05, FGIC............................................ 1,010 1,090 Lee County Florida Transportation Facilities, Revenue, Series A, 5.50%, 10/1/11, AMBAC.......................... 1,500 1,653 Manatee County School Board, Certificates of Participation, 7/1/09, Callable 7/1/06 @ 102, MBIA....... 500 558 Miami Beach Florida Water & Sewer Revenue, 5.38%, 9/1/08, Callable 9/7/01 @ 101, FSA, OID.......................... 1,000 1,069 Miami-Dade County Educational Facilities Authority Revenue, Series A, 5.75%, 4/1/13, Callable 4/1/10 @ 101, AMBAC.................................................... 1,060 1,168 Okeechobee Utility Authority, Utility System Revenue, 5.25%, 10/1/14, Callable 10/1/09 @ 101, FSA.............. 1,675 1,759 Orange County, Sales Tax Revenue, 4.80%, 1/1/17, Callable 1/1/07 @ 101, FGIC....................................... 1,000 986 Orange County, Tourist Development, Tax Revenue, 5.00%, 10/1/08, AMBAC........................................... 1,500 1,599
Continued 185 AMSOUTH FUNDS Schedule of Portfolio Investments Florida Tax-Exempt Fund July 31, 2001 (Amounts in thousands, except shares) Municipal Bonds, continued
Shares or Principal Amount Value ---------- -------- Florida, continued Orlando Utilities Commission, Water & Electric Revenue, Series B, 5.10%, 10/1/11, Callable 10/1/06 @ 100.......... $ 1,500 $ 1,554 Palm Beach County, Criminal Justice Facilities, 5.38%, 6/1/10, FGIC.............................................. 1,000 1,089 Pasco County, Water & Sewer Revenue, Series A, 5.50%, 10/1/03, Callable 10/1/02 @ 102, FGIC..................... 1,000 1,048 Pinellas County, Capital Improvement, 4.50%, 1/1/07........ 1,000 1,036 Port of Palm Beach, 6.25%, 9/1/08, Callable 9/1/02 @ 102, MBIA...................................................... 1,000 1,056 Reedy Creek, Improvement District, Series A, GO, 5.60%, 6/1/10, Callable 6/1/05 @ 100, MBIA....................... 1,000 1,079 St. Johns River Management District, Land Acquisition, 5.10%, 7/1/09, Callable 7/1/05 @ 100, FSA................. 1,000 1,035 Sunshine Skyway Revenue, 6.60%, 7/1/08, Callable 7/1/02 @ 100....................................................... 1,000 1,013 Tallahassee Consolidated Utility System, Revenue, 5.80%, 10/1/08, Callable 10/1/03 @ 102........................... 1,000 1,079 Tampa Water & Sewer Revenue, 5.25%, 10/1/12, Callable 10/1/05 @ 102, FGIC....................................... 750 783 Tampa Sports Authority, Local Option Sales Tax Revenue, Stadium Project, 6.00%, 1/1/06, MBIA...................... 1,550 1,700 Tampa-Hillsborough County, Expressway, 5.00%, 7/1/10, Callable 7/1/07 @ 101..................................... 1,000 1,050 Volusia County, Sales Tax Revenue, 5.00%, 10/1/13, Callable 10/1/08 @ 101, MBIA....................................... 1,000 1,033 -------- 59,634 -------- TOTAL MUNICIPAL BONDS...................................... 59,634 --------
Investment Companies (2.5%)
Shares or Principal Amount Value ---------- -------- AmSouth Tax-Exempt Money Market Fund....................... 5,066 $ 5 Dreyfus Florida Money Market Fund.......................... 1,563,230 1,563 -------- TOTAL INVESTMENT COMPANIES................................. 1,568 -------- TOTAL INVESTMENTS (Cost $59,139) (a) -- 99.0%............................... 61,202 Other assets in excess of liabilities -- 1.0%.............. 631 -------- NET ASSETS -- 100.0%....................................... $ 61,833 ========
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation.............................................. $2,075 Unrealized depreciation.............................................. (12) ------ Net unrealized appreciation.......................................... $2,063 ======
AMBAC -- Insured by AMBAC Indemnity Corp. ETM -- Escrowed to Maturity FGIC -- Insured by Financial Guaranty Insurance Corp. FSA -- Insured by Financial Security Assurance Inc. GO -- General Obligation MBIA -- Insured by Municipal Bond Insurance Assoc. OID -- Original Issue Discount See notes to financial statements 186 AMSOUTH FUNDS Florida Tax-Exempt Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $59,139).............................. $61,202 Interest and dividends receivable................................. 641 Receivable for capital shares issued.............................. 15 Prepaid expenses and other assets................................. 4 ------- Total Assets..................................................... 61,862 Liabilities: Accrued expenses and other payables: Investment advisory fees......................................... $ 9 Administration fees.............................................. 1 Shareholder servicing and distribution fees...................... 7 Custodian fees................................................... 1 Other............................................................ 11 --- Total Liabilities................................................ 29 ------- Net Assets: Capital........................................................... 60,047 Accumulated net investment income................................. 74 Accumulated net realized losses from investment transactions...... (351) Unrealized appreciation from investments.......................... 2,063 ------- Net Assets........................................................ $61,833 ======= Class A Shares (b) Net Assets....................................................... $ 3,267 Shares outstanding............................................... 311 Redemption price per share....................................... $ 10.51 ======= Class A Shares -- Maximum Sales Charge............................ 4.00% ------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)............................................ $ 10.95 ======= Class B Shares Net Assets....................................................... $ 1,385 Shares outstanding............................................... 132 Offering price per share*........................................ $ 10.49 ======= Trust Shares (c) Net Assets....................................................... $57,181 Shares outstanding............................................... 5,436 Offering and redemption price per share.......................... $ 10.52 =======
* Redemption price per share varies by length of time shares are held. (a) Formerly AmSouth Florida Tax-Free Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income.................................................... $2,868 Dividend income.................................................... 53 ------ Total Investment Income........................................... 2,921 Expenses: Investment advisory fees........................................... $405 Administration fees................................................ 125 Distribution fees -- Class B Shares................................ 6 Shareholder servicing fees -- Class A Shares (b)................... 7 Shareholder servicing fees -- Class B Shares....................... 2 Shareholder servicing fees -- Trust Shares (c)..................... 88 Custodian fees..................................................... 17 Accounting fees.................................................... 19 Transfer agent fees................................................ 54 Other fees......................................................... 28 ---- Total expenses before fee reductions.............................. 751 Expenses reduced by Investment Advisor............................ (156) Expenses reduced by Administrator................................. (62) Expenses reduced by Transfer Agent................................ (21) Expenses reduced by Distributor................................... (29) Expenses reduced by Fund Accountant............................... (7) ------ Net expenses...................................................... 476 ------ Net Investment Income.............................................. 2,445 ------ Realized/Unrealized Gains from Investments: Net realized gains from investment transactions.................... 48 Change in unrealized appreciation/depreciation from investments.... 2,088 ------ Net realized/unrealized gains from investments..................... 2,136 ------ Change in net assets resulting from operations..................... $4,581 ======
See notes to financial statements 187 AMSOUTH FUNDS Florida Tax-Exempt Fund (a) Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................... $ 2,445 $ 2,910 Net realized gains (losses) from investment transactions........................................... 48 (399) Change in unrealized appreciation/depreciation from investments............................................ 2,088 50 ------- ------- Change in net assets resulting from operations........... 4,581 2,561 ------- ------- Distributions to Class A Shareholders (b): From net investment income.............................. (113) (253) From net realized gains on investment transactions...... -- (17) Distributions to Class B Shareholders: From net investment income.............................. (26) (23) From net realized gains on investment transactions...... -- (2) Distributions to Trust Shareholders (c): From net investment income.............................. (2,311) (2,685) From net realized gains on investment transactions...... -- (176) ------- ------- Change in net assets from shareholder distributions...... (2,450) (3,156) ------- ------- Change in net assets from capital transactions........... (5,559) (10,456) ------- ------- Change in net assets..................................... (3,428) (11,051) Net Assets: Beginning of period..................................... 65,261 76,312 ------- ------- End of period........................................... $61,833 $65,261 ======= =======
(a) Formerly AmSouth Florida Tax-Free Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. See notes to financial statements 188 AMSOUTH FUNDS Florida Tax-Exempt Fund (a) Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (b) 1997 ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period.... $10.16 $10.22 $ 10.45 $10.50 $ 10.30 ------ ------ ------- ------ ------- Investment Activities Net investment income.. 0.40 0.44 0.41 0.45 0.45 Net realized and unrealized gains (losses) from investments........... 0.35 (0.06) (0.18) 0.01 0.24 ------ ------ ------- ------ ------- Total from Investment Activities............ 0.75 0.38 0.23 0.46 0.69 ------ ------ ------- ------ ------- Distributions Net investment income.. (0.40) (0.41) (0.40) (0.44) (0.48) Net realized gains from investment transactions.......... -- (0.03) (0.06) (0.07) (0.01) ------ ------ ------- ------ ------- Total Distributions.... (0.40) (0.44) (0.46) (0.51) (0.49) ------ ------ ------- ------ ------- Change in Net Asset Value.................. 0.35 (0.06) (0.23) (0.05) 0.20 ------ ------ ------- ------ ------- Net Asset Value, End of Period................. $10.51 $10.16 $ 10.22 $10.45 $ 10.50 ====== ====== ======= ====== ======= Total Return (excludes sales charge).......... 7.46% 3.99% 2.06% 4.46% 6.89% Ratios/Supplemental Data: Net Assets at end of period (000)........... $3,267 $2,655 $12,195 $8,663 $53,688 Ratio of expenses to average net assets..... 0.90% 0.74% 0.59% 0.55% 0.57% Ratio of net investment income to average net assets................. 3.79% 4.10% 4.00% 4.24% 4.36% Ratio of expenses to average net assets*.... 1.29% 1.30% 1.26% 1.06% 1.06% Portfolio turnover**.... 7% 11% 34% 30% 24%
/\ Formerly Classic Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly AmSouth Florida Tax-Free Fund. (b) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. See notes to financial statements 189 AMSOUTH FUNDS Florida Tax-Exempt Fund (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended July 31, July 31, July 31, 2001 + 2000 1999 (b) ---------- ---------- ------------ Net Asset Value, Beginning of Period....... $10.15 $10.20 $10.52 ------ ------ ------ Investment Activities Net investment income..................... 0.32 0.32 0.12 Net realized and unrealized gains (losses) from investments......................... 0.34 (0.01) (0.30) ------ ------ ------ Total from Investment Activities.......... 0.66 0.31 (0.18) ------ ------ ------ Distributions Net investment income..................... (0.32) (0.33) (0.14) Net realized gains from investment transactions............................. -- (0.03) -- ------ ------ ------ Total Distributions....................... (0.32) (0.36) (0.14) ------ ------ ------ Change in Net Asset Value.................. 0.34 (0.05) (0.32) ------ ------ ------ Net Asset Value, End of Period............. $10.49 $10.15 $10.20 ====== ====== ====== Total Return (excludes redemption charge).. 6.61% 3.14% 1.77%(c) Ratios/Supplemental Data: Net Assets at end of period (000).......... $1,385 $ 729 $ 569 Ratio of expenses to average net assets.... 1.64% 1.62% 1.49%(d) Ratio of net investment income to average net assets................................ 3.03% 3.22% 3.06%(d) Ratio of expenses to average net assets*... 2.04% 2.05% 2.00%(d) Portfolio turnover**....................... 7% 11% 34%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly AmSouth Florida Tax-Free Fund. (b) For the period from March 16, 1999 (commencement of operations) through July 31, 1999. (c) Not annualized. (d) Annualized. See notes to financial statements 190 AMSOUTH FUNDS Florida Tax-Exempt Fund (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Period Ended July 31, July 31, July 31, July 31, 2001 + 2000 1999 1998 (b) ---------- ---------- ---------- ------------ Net Asset Value, Beginning of Period......................... $ 10.16 $ 10.22 $ 10.46 $ 10.39 ------- ------- ------- ------- Investment Activities Net investment income.......... 0.41 0.42 0.43 0.41 Net realized and unrealized gains (losses) from investments................... 0.36 (0.02) (0.20) 0.14 ------- ------- ------- ------- Total from Investment Activities.................... 0.77 0.40 0.23 0.55 ------- ------- ------- ------- Distributions Net investment income.......... (0.41) (0.43) (0.41) (0.41) Net realized gains from investment transactions....... -- (0.03) (0.06) (0.07) ------- ------- ------- ------- Total Distributions............ (0.41) (0.46) (0.47) (0.48) ------- ------- ------- ------- Change in Net Asset Value....... 0.36 (0.06) (0.24) 0.07 ------- ------- ------- ------- Net Asset Value, End of Period.. $ 10.52 $ 10.16 $ 10.22 $ 10.46 ======= ======= ======= ======= Total Return.................... 7.72% 4.02% 2.16% 4.66%(c) Ratios/Supplemental Data: Net Assets at end of period (000).......................... $57,181 $61,877 $63,548 $55,369 Ratio of expenses to average net assets......................... 0.75% 0.65% 0.49% 0.49%(d) Ratio of net investment income to average net assets.......... 3.95% 4.19% 4.10% 4.30%(d) Ratio of expenses to average net assets*........................ 1.19% 1.11% 1.01% 1.04%(d) Portfolio turnover**............ 7% 11% 34% 30%
/\ Formerly Premier Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly AmSouth Florida Tax-Free Fund. (b) Effective September 2, 1997, the Fund's existing shares, which were previously unclassified, were designated either Classic Shares or Premier Shares. For reporting purposes, past performance numbers (prior to September 2, 1997) are being reflected as Classic Shares. (c) Represents total return based on the activity of Classic Shares for the period from August 1, 1997 to September 1, 1997 and the activity of Premier Shares for the period from September 2, 1997 to July 31, 1998. Total return for the Premier Shares for the period from September 2, 1997 (commencement of operations) through July 31, 1998 was 5.40%. (d) Annualized. See notes to financial statements 191 AMSOUTH FUNDS Schedule of Portfolio Investments Tennessee Tax-Exempt Fund July 31, 2001 (Amounts in thousands, except shares) Municipal Bonds (89.3%)
Shares or Principal Amount Value ---------- ------- Tennessee (89.3%) Bristol Health & Educational Facilities, Revenue, Bristol Memorial Hospital, 6.75%, 9/1/07, FGIC..................... $ 3,000 $ 3,450 Chattanooga, GO, 5.38%, 9/1/09, Callable 9/1/06 @101, FGIC.. 2,000 2,122 Chattanooga-Hamilton County Hospital Authority, Hospital Revenue, 5.63%, 10/1/09, FSA............................... 1,000 1,103 Hamilton County, GO, 5.00%, 11/1/11, Callable 11/1/08 @ 101........................................................ 1,000 1,051 Jackson, Hospital Revenue, Refunding and Improvement, 6.00%, 4/1/05, AMBAC.............................................. 1,000 1,086 Johnson City Health & Educational Facilities Board, Hospital Revenue, Refunded-1st, MTG-MTN, States Health-A, 6.50%, 7/1/14, MBIA............................................... 1,000 1,171 Johnson City Health & Educational Facilities Board, Refunding & Improvement, Medical Center Hospital, 5.00%, 7/1/18, Callable 1/1/09 @ 101, MBIA........................ 1,000 1,010 Knox County Health Education & Housing Facilities Board, Hospital Facilities Revenue, Fort Sanders Alliance, 7.25%, 1/1/09, MBIA............................................... 2,000 2,389 Knox County Health Education & Housing Facilities Board, Hospital Facilities Revenue, Fort Sanders Alliance, 6.25%, 1/1/13, MBIA............................................... 1,000 1,142 Knox County, Refunding, GO, 6.50%, 4/1/04, Callable 4/1/03 @ 102........................................................ 1,500 1,607 Knox County, Refunding, GO, 5.50%, 4/1/11................... 2,000 2,199 Knox County, GO, 5.00%, 2/1/12, Callable 2/1/04 @ 101, OID.. 2,000 2,105 Knoxville, Water Revenue, 5.00%, 3/1/13, Callable 3/1/10 @ 100, MBIA.................................................. 1,000 1,035 Marion County, GO, 5.00%, 4/1/11, AMBAC..................... 1,280 1,347 Memphis, Water Revenue, 5.90%, 1/1/04, OID.................. 1,000 1,061 Memphis, GO, 6.25%, 7/1/04.................................. 1,000 1,084 Memphis, GO, 6.00%, 11/1/06................................. 1,000 1,113 Memphis, GO, 5.25%, 4/1/14, Callable 4/1/08 @ 101, OID...... 1,250 1,306 Memphis, GO, 5.00%, 10/1/15, Callable 10/1/06 @ 101......... 1,000 1,015 Metropolitan Government, Nashville & Davidson County Health & Educational Facilities Board, Revenue & Refunding, Vanderbilt University, Series B, 5.00%, 10/1/11, Callable 4/1/11 @ 100............................................... 1,000 1,056
Municipal Bonds, continued
Shares or Principal Amount Value ---------- ------- Tennessee, continued Metropolitan Government, Nashville & Davidson County Energy Production Facility, 5.25%, 7/1/13, Callable 7/1/07 @ 101, OID, AMBAC................................................. $ 1,000 $ 1,046 Metropolitan Government, Nashville & Davidson County, Refunding & Improvement, Series A & B, GO, 5.00%, 10/15/08................................................... 1,000 1,066 Metropolitan Government, Nashville & Davidson County, Refunding & Improvement, Series A & B, GO, 5.25%, 10/15/09................................................... 1,000 1,081 Metropolitan Government, Nashville & Davidson County, Refunding, GO, 6.00%, 12/1/09.............................. 1,500 1,700 Oak Ridge, GO, 5.00%, 4/1/13, Callable 4/1/11 @ 100, AMBAC.. 1,975 2,051 Rutherford County, Capital Outlay, Series A, GO, 6.25%, 5/1/04..................................................... 1,500 1,617 Shelby County Health Education & Housing Facilities Board, Hospital Revenue, Methodist Healthcare, 5.10%, 4/1/12, Callable 4/1/08 @ 101, MBIA................................ 1,000 1,042 Shelby County Health Education, & Housing Facilities Board, Hospital Revenue, Methodist Health Systems, Inc., 6.25%, 8/1/07, MBIA............................................... 3,500 3,934 Shelby County Schools, Series A, GO, 5.88%, 6/1/19, Prerefunded 6/1/06 @ 100................................... 1,000 1,103 Shelby County, Series A, GO, 6.75%, 4/1/05.................. 1,000 1,113 Tennessee Housing Development Agency Homeownership Program- 1D, 4.70%, 7/1/15, Callable 1/1/11 @ 100................... 1,000 1,009 Tennessee State, Series B, GO, 6.00%, 5/1/05................ 1,500 1,634 Tennessee State, Series B, GO, 5.50%, 5/1/23, Callable 5/1/07 @ 101.5............................................. 1,500 1,562 Tennessee State, GO, 5.00%, 5/1/12.......................... 1,000 1,057 Tennessee State, Series A, GO, 5.10%, 3/1/16, Callable 3/1/10 @ 100, OID.......................................... 1,000 1,023 Williamson County, GO, 5.00%, 3/1/11........................ 1,165 1,232 Williamson County, GO, 5.00%, 3/1/15, Callable 3/1/11 @ 100........................................................ 1,000 1,023 Wilson County, Certificate of Participation Refunding, 5.25%, 6/30/15, Callable 6/30/09 @ 101, FSA................ 1,500 1,553 ------- 55,298 ------- TOTAL MUNICIPAL BONDS....................................... 55,298 =======
Continued 192 AMSOUTH FUNDS Schedule of Portfolio Investments Tennessee Tax-Exempt Fund July 31, 2001 (Amounts in thousands, except shares) Investment Companies (5.6%)
Shares or Principal Amount Value ---------- ------- AIM Tax-Free Money Market Fund.............................. 480,555 $ 481 AmSouth Tax-Exempt Money Market Fund........................ 2,954,699 2,954 ------- TOTAL INVESTMENT COMPANIES.................................. 3,435 ------- TOTAL INVESTMENTS (Cost $57,449) (a) -- 94.9%................................ 58,733 Other assets in excess of liabilities -- 5.1%............... 3,156 ------- NET ASSETS -- 100.0%........................................ $61,889 =======
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation.............................................. $1,295 Unrealized depreciation.............................................. (11) ------ Net unrealized appreciation.......................................... $1,284 ======
AMBAC -- Insured by AMBAC Indemnity Corp. FGIC -- Insured by Financial Guaranty Insurance Corp. FSA -- Insured by Financial Security Assurance Inc. GO -- General Obligation MBIA -- Insured by Municipal Bond Insurance Assoc. MTN -- Medium Term Note OID -- Original Issue Discount See notes to financial statements 193 AMSOUTH FUNDS Tennessee Tax-Exempt Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $57,449)........................... $58,733 Interest and dividends receivable.............................. 855 Receivable for investments sold................................ 3,675 Prepaid expenses and other assets.............................. 12 ------- Total Assets.................................................. 63,275 Liabilities: Payable for investments purchased.............................. $1,350 Payable for capital shares redeemed............................ 3 Accrued expenses and other payables: Investment advisory fees...................................... 11 Administration fees........................................... 2 Shareholder servicing and distribution fees................... 7 Custodian fees................................................ 1 Other......................................................... 12 ------ Total Liabilities............................................. 1,386 ------- Net Assets: Capital........................................................ 61,475 Accumulated net investment income.............................. 71 Accumulated net realized losses from investment transactions... (941) Unrealized appreciation from investments....................... 1,284 ------- Net Assets..................................................... $61,889 ======= Class A Shares Net Assets.................................................... $ 3,764 Shares outstanding............................................ 373 Redemption price per share.................................... $ 10.10 ======= Class A Shares -- Maximum Sales Charge......................... 4.00% ------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net asset value adjusted to the nearest cent)..... $ 10.52 ======= Class B Shares Net Assets.................................................... $ 1,432 Shares outstanding............................................ 142 Offering price per share*..................................... $ 10.12 ======= Trust Shares (b) Net Assets.................................................... $56,693 Shares outstanding............................................ 5,613 Offering and redemption price per share....................... $ 10.10 =======
* Redemption price per share varies by length of time shares are held. (a) Formerly ISG Tennessee Tax-Exempt Fund. (b) Formerly Institutional Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income.................................................... $2,984 Dividend income.................................................... 67 ------ Total Investment Income........................................... 3,051 Expenses: Investment advisory fees........................................... $421 Administration fees................................................ 130 Distribution fees -- Class B Shares................................ 8 Shareholder servicing fees -- Class A Shares....................... 10 Shareholder servicing fees -- Class B Shares....................... 3 Shareholder servicing fees -- Trust Shares (b)..................... 90 Custodian fees..................................................... 18 Accounting fees.................................................... 17 Transfer agent fees................................................ 54 Other fees......................................................... 60 ---- Total expenses before fee reductions.............................. 811 Expenses reduced by Investment Advisor............................ (97) Expenses reduced by Administrator................................. (32) Expenses reduced by Transfer Agent................................ (20) Expenses reduced by Distributor................................... (30) Expenses reduced by Fund Accountant............................... (7) ------ Net expenses...................................................... 625 ------ Net Investment Income.............................................. 2,426 ------ Realized/Unrealized Gains from Investments: Net realized gains from investment transactions.................... 789 Change in unrealized appreciation/depreciation from investments.... 1,589 ------ Net realized/unrealized gains on investments....................... 2,378 ------ Change in net assets resulting from operations..................... $4,804 ======
See notes to financial statements 194 AMSOUTH FUNDS Tennessee Tax-Exempt Fund (a) Statements of Changes in Net Assets
Year Ended Period Ended Year Ended July 31, July 31, December 31, 2001 2000 (b) 1999 ---------- ------------ ------------ (Amounts in thousands) From Investment Activities: Operations: Net investment income.................... $ 2,426 $ 1,700 $ 3,167 Net realized gains (losses) from investment transactions................. 789 (444) (1,286) Change in unrealized appreciation/depreciation from investments............................. 1,589 1,811 (4,484) ------- ------- ------- Change in net assets resulting from operations............................... 4,804 3,067 (2,603) ------- ------- ------- Distributions to Class A Shareholders: From net investment income............... (146) (66) (103) From net realized gains on investment transactions............................ -- -- (1) Distributions to Class B Shareholders: From net investment income............... (32) (19) (38) Distributions to Trust Shareholders (c): From net investment income............... (2,262) (1,536) (3,025) From net realized gains on investment transactions............................ -- -- (28) ------- ------- ------- Change in net assets from shareholder distributions............................ (2,440) (1,621) (3,195) ------- ------- ------- Change in net assets from capital transactions............................. (9,608) (12,462) (10,055) ------- ------- ------- Change in net assets...................... (7,244) (11,016) (15,853) Net Assets: Beginning of period...................... 69,133 80,149 96,002 ------- ------- ------- End of period............................ $61,889 $69,133 $80,149 ======= ======= =======
(a) Formerly ISG Tennessee Tax-Exempt Fund. (b) For the period from January 1, 2000 through July 31, 2000. (c) Formerly Institutional Shares. See notes to financial statements 195 AMSOUTH FUNDS Tennessee Tax-Exempt Fund (a) Financial Highlights, Class A Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, December 31, December 31, December 31, December 31, 2001 + 2000 (b) 1999 1998 1997 1996 ---------- ------------ ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Period.... $ 9.74 $ 9.55 $10.19 $10.18 $ 9.90 $ 10.19 ------ ------ ------ ------ ------ ------- Investment Activities Net investment income.. 0.36 0.21 0.33 0.35 0.44 0.42 Net realized and unrealized gains (losses) from investments........... 0.36 0.18 (0.64) 0.08 0.25 (0.29) ------ ------ ------ ------ ------ ------- Total from Investment Activities............ 0.72 0.39 (0.31) 0.43 0.69 0.13 ------ ------ ------ ------ ------ ------- Distributions Net investment income.. (0.36) (0.20) (0.33) (0.35) (0.41) (0.42) Net realized gains from investment transactions.......... -- -- -- (0.07) -- -- ------ ------ ------ ------ ------ ------- Total Distributions.... (0.36) (0.20) (0.33) (0.42) (0.41) (0.42) ------ ------ ------ ------ ------ ------- Change in Net Asset Value.................. 0.36 0.19 (0.64) 0.01 0.28 (0.29) ------ ------ ------ ------ ------ ------- Net Asset Value, End of Period................. $10.10 $ 9.74 $ 9.55 $10.19 $10.18 $ 9.90 ====== ====== ====== ====== ====== ======= Total Return (excludes sales charge).......... 7.55% 4.15%(c) (3.07%) 4.25% 7.13% 1.39% Ratios/Supplemental Data: Net Assets at end of period (000)........... $3,764 $2,919 $3,324 $2,919 $1,669 $88,084 Ratio of expenses to average net assets..... 1.09% 1.13%(d) 1.25% 1.20% 0.84% 0.86% Ratio of net investment income to average net assets................. 3.63% 3.78%(d) 3.34% 3.37% 4.13% 4.29% Ratio of expenses to average net assets*.... 1.33% 1.27%(d) 1.26% 1.20% 1.09% 1.11% Portfolio turnover**.... 123% 23% 64% 155% 253% 219%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Tennessee Tax-Exempt Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) Not annualized. (d) Annualized. See notes to financial statements 196 AMSOUTH FUNDS Tennessee Tax-Exempt Fund (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Period Ended July 31, July December 31, December 31, 2001 + 2000 (b) 1999 1998 (c) ---------- ------------ ------------ ------------ Net Asset Value, Beginning of Period................. $ 9.76 $ 9.57 $10.21 $10.22 ------ ------ ------ ------ Investment Activities Net investment income..... 0.29 0.17 0.27 0.26 Net realized and unrealized gains (losses) from investments......... 0.36 0.18 (0.64) 0.06 ------ ------ ------ ------ Total from Investment Activities............... 0.65 0.35 (0.37) 0.32 ------ ------ ------ ------ Distributions Net investment income..... (0.29) (0.16) (0.27) (0.26) Net realized gains from investment transactions.. -- -- -- (0.07) ------ ------ ------ ------ Total Distributions....... (0.29) (0.16) (0.27) (0.33) ------ ------ ------ ------ Change in Net Asset Value.. 0.36 0.19 (0.64) (0.01) ------ ------ ------ ------ Net Asset Value, End of Period.................... $10.12 $ 9.76 $ 9.57 $10.21 ====== ====== ====== ====== Total Return (excludes redemption charge)........ 6.75% 3.74%(d) (3.65)% 3.17%(d) Ratios/Supplemental Data: Net Assets at end of period (000)..................... $1,432 $1,054 $1,288 $1,397 Ratio of expenses to average net assets........ 1.84% 1.83%(e) 1.84% 1.95%(e) Ratio of net investment income to average net assets.................... 2.85% 3.07%(e) 2.72% 2.50%(e) Ratio of expenses to average net assets*....... 2.08% 1.96%(e) 1.85% (f) Portfolio turnover**....... 123% 23% 64% 155%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Tennessee Tax-Exempt Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from February 24, 1998 (commencement of operations) through December 31, 1998. (d) Not annualized. (e) Annualized. (f) There were no fee reductions in this period. See notes to financial statements 197 AMSOUTH FUNDS Tennessee Tax-Exempt Fund (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Year Ended Period Ended July 31, July 31, December 31, December 31, December 31, 2001 + 2000 (b) 1999 1998 1997 (c) ---------- ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Period.... $ 9.74 $ 9.55 $ 10.19 $ 10.18 $ 10.05 ------- ------- ------- ------- -------- Investment Activities Net investment income.. 0.38 0.22 0.35 0.37 0.10 Net realized and unrealized gains (losses) from investments........... 0.36 0.18 (0.64) 0.08 0.13 ------- ------- ------- ------- -------- Total from Investment Activities............ 0.74 0.40 (0.29) 0.45 0.23 ------- ------- ------- ------- -------- Distributions Net investment income.. (0.38) (0.21) (0.35) (0.37) (0.10) Net realized gains from investment transactions.......... -- -- -- (0.07) -- ------- ------- ------- ------- -------- Total Distributions.... (0.38) (0.21) (0.35) (0.44) (0.10) ------- ------- ------- ------- -------- Change in Net Asset Value.................. 0.36 0.19 (0.64) 0.01 0.13 ------- ------- ------- ------- -------- Net Asset Value, End of Period................. $ 10.10 $ 9.74 $ 9.55 $ 10.19 $ 10.18 ======= ======= ======= ======= ======== Total Return............ 7.70% 4.26%(d) (2.83)% 4.52% 2.35%(d) Ratios/Supplemental Data: Net Assets at end of period (000)........... $56,693 $65,160 $75,537 $91,687 $100,742 Ratio of expenses to average net assets..... 0.94% 0.95%(e) 1.00% 0.95% 0.56%(e) Ratio of net investment income to average net assets................. 3.77% 3.95%(e) 3.57% 3.65% 4.22%(e) Ratio of expenses to average net assets*.... 1.23% 1.11%(e) 1.00% 0.95% 0.87%(e) Portfolio turnover**.... 123% 23% 64% 155% 253%
/\ Formerly Institutional Shares. + Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Tennessee Tax-Exempt Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from October 3, 1997 (commencement of operations) through December 31, 1997. (d) Not annualized. (e) Annualized. See notes to financial statements 198 AMSOUTH FUNDS Schedule of Portfolio Investments Limited Term Tennessee Tax-Exempt Fund July 31, 2001 (Amounts in thousands, except shares) Municipal Bonds (85.8%)
Shares or Principal Amount Value --------- ------- Tennessee (85.8%) Chattanooga Health Education & Housing Facilities Board, Revenue, Series A, 5.25%, 12/1/02.......................... $ 900 $ 924 Chattanooga Health Education & Housing Facilities Board, Revenue, Catholic Health Initiatives, Refunding, 5.50%, 12/1/05.................................................... 500 533 Clarksville Water, Sewer & Gas, Refunding, 6.13%, 2/1/12, Callable 2/1/02 @ 102, OID, MBIA........................... 500 518 Knox County Health Education & Housing Facilities Board, Hospital Revenue, Refunding, 7.25%, 1/1/08, MBIA........... 750 883 Memphis, Electrical Systems Revenue, Refunding, 6.00%, 1/1/05, OID................................................ 500 540 Memphis, GO, 6.00%, 7/1/03.................................. 500 528 Memphis, GO, 6.25%, 7/1/04.................................. 500 542 Memphis, Refunding, GO, 6.00%, 11/1/03...................... 500 533 Metropolitan Government, Nashville & Davidson County, Health & Education Facilities Board, Revenue, The Vanderbilt University, Series A, 6.00%, 7/1/07........................ 500 557 Metropolitan Government, Nashville & Davidson County, Water & Sewer Revenue, 6.00%, 1/1/06, MBIA....................... 750 822 Metropolitan Nashville Airport Authority, Airport Revenue, Refunding, Series A, 6.63%, 7/1/07, FGIC................... 500 572 Rutherford County Capital Outlay Notes, GO, 6.00%, 4/1/04... 1,000 1,069 Shelby County, Refunding, Series B, GO, 5.50%, 8/1/09....... 500 548 Tennessee State, Refunding, Series A, GO, 5.00%, 5/1/05..... 500 527 Tennessee State, Refunding, Series A, GO, 5.00%, 5/1/08..... 655 696 Tennessee State, Refunding, Series B, GO, 5.50%, 5/1/04..... 500 530 Tennessee State, Refunding, Series B, GO, 6.00%, 5/1/06..... 500 551 Williamson County, GO, 6.00%, 3/1/08........................ 500 559 ------- 11,432 ------- TOTAL MUNICIPAL BONDS....................................... 11,432 =======
Investment Companies (1.1%)
Shares or Principal Amount Value --------- ------- AIM Tax-Free Money Market Fund............................... 106,599 $ 107 AmSouth Tax-Exempt Money Market Fund......................... 35,132 35 ------- TOTAL INVESTMENT COMPANIES 142 ------- TOTAL INVESTMENTS (Cost $11,338) (a) -- 86.9%................................. 11,574 Other assets in excess of liabilities -- 13.1%............... 1,738 ------- NET ASSETS -- 100.0%......................................... $13,312 =======
--------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: Unrealized appreciation................................................ $236 Unrealized depreciation................................................ -- ---- Net unrealized appreciation............................................ $236 ====
FGIC -- Financial Guaranty Insurance Corp. GO -- General Obligation MBIA -- Insured by Municipal Bond Insurance Assoc. OID -- Original Issue Discount See notes to financial statements 199 AMSOUTH FUNDS Limited Term Tennessee Tax-Exempt Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value (cost $11,338).............................. $11,574 Interest and dividends receivable................................. 124 Receivable for investments sold................................... 1,618 Prepaid expenses and other assets................................. 10 ------- Total Assets..................................................... 13,326 Liabilities: Accrued expenses and other payables: Investment advisory fees.......................................... $ 2 Shareholder servicing and distribution fees....................... 3 Other............................................................. 9 --- Total Liabilities................................................ 14 ------- Net Assets: Capital........................................................... 13,290 Accumulated net investment income................................. 9 Accumulated net realized losses from investment transactions...... (223) Unrealized appreciation from investments.......................... 236 ------- Net Assets........................................................ $13,312 ======= Class A Shares Net Assets....................................................... $12,886 Shares outstanding............................................... 1,274 Redemption price per share....................................... $ 10.12 ======= Class A Shares -- Maximum Sales Charge............................ 4.00% ------- Maximum Offering Price Per Share (100%/(100% -- Maximum Sales Charge) of net assets value adjusted to the nearest cent)................................... $ 10.54 ======= Class B Shares Net Assets....................................................... $ 426 Shares outstanding............................................... 42 Offering price per share*........................................ $ 10.12 =======
* Redemption price per share varies by length of time shares are held. (a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income....................................................... $588 Dividend income....................................................... 24 ---- Total Investment Income.............................................. 612 Expenses: Investment advisory fees.............................................. $94 Administration fees................................................... 29 Distribution fees -- Class B Shares................................... 2 Shareholder servicing fees -- Class A Shares.......................... 35 Shareholder servicing fees -- Class B Shares.......................... 1 Custodian fees........................................................ 4 Accounting fees....................................................... 6 Transfer agent fees................................................... 31 Registration and filing fees.......................................... 29 Other fees............................................................ 14 --- Total expenses before fee reductions................................. 245 Expenses reduced by Investment Advisor............................... (22) Expenses reduced by Administrator.................................... (15) Expenses reduced by Transfer Agent................................... (18) Expenses reduced by Fund Accountant.................................. (2) ---- Net expenses......................................................... 188 ---- Net Investment Income................................................. 424 ---- Realized/Unrealized Gains from Investments: Net realized gains from investment transactions....................... 70 Change in unrealized appreciation/depreciation from investments....... 374 ---- Net realized/unrealized gains from investments........................ 444 ---- Change in net assets resulting from operations........................ $868 ====
See notes to financial statements 200 AMSOUTH FUNDS Limited Term Tennessee Tax-Exempt Fund (a) Statements of Changes in Net Assets
Year Ended Period Ended Year Ended July 31, July 31, December 31, 2001 2000 (b) 1999 ---------- ------------ ------------ (Amounts in thousands) From Investment Activities: Operations: Net investment income.................... $ 424 $ 338 $ 612 Net realized gains (losses) from investment transactions................. 70 (202) (60) Change in unrealized appreciation/depreciation from investments............................. 374 380 (765) ------- ------- ------- Change in net assets resulting from operations............................... 868 516 (213) ------- ------- ------- Distributions to Class A Shareholders: From net investment income............... (424) (316) (628) Distributions to Class B Shareholders: From net investment income............... (7) (6) (18) ------- ------- ------- Change in net assets from shareholder distributions............................ (431) (322) (646) ------- ------- ------- Change in net assets from capital transactions............................. (2,903) (4,388) 660 ------- ------- ------- Change in net assets...................... (2,466) (4,194) (199) Net Assets: Beginning of period...................... 15,778 19,972 20,171 ------- ------- ------- End of period............................ $13,312 $15,778 $19,972 ======= ======= =======
(a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund. (b) For the period from January 1, 2000 through July 31, 2000. See notes to financial statements 201 AMSOUTH FUNDS Limited Term Tennessee Tax-Exempt Fund (a) Financial Highlights, Class A Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Year Ended Period Ended July 31, July 31, December 31, December 31, December 31, 2001 + 2000 (b)+ 1999 1998 1997 (c) ---------- ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Period.... $ 9.81 $ 9.69 $ 10.11 $ 10.13 $ 10.00 ------- ------- ------- ------- ------- Investment Activities Net investment income.. 0.30 0.19 0.30 0.32 0.29 Net realized and unrealized gains (losses) from investments........... 0.31 0.11 (0.40) 0.06 0.13 ------- ------- ------- ------- ------- Total from Investment Activities............ 0.61 0.30 (0.10) 0.38 0.42 ------- ------- ------- ------- ------- Distributions Net investment income.. (0.30) (0.18) (0.30) (0.32) (0.29) Net realized gains from investment transactions.......... -- -- (0.02) (0.08) -- ------- ------- ------- ------- ------- Total Distributions.... (0.30) (0.18) (0.32) (0.40) (0.29) ------- ------- ------- ------- ------- Change in Net Asset Value.................. 0.31 0.12 (0.42) (0.02) 0.13 ------- ------- ------- ------- ------- Net Asset Value, End of Period................. $ 10.12 $ 9.81 $ 9.69 $ 10.11 $ 10.13 ======= ======= ======= ======= ======= Total Return (excludes sales charge).......... 6.28% 3.12%(d) (1.00)% 3.76% 4.26%(d) Ratios/Supplemental Data: Net Assets at end of period (000)........... $12,886 $15,489 $19,361 $19,439 $22,893 Ratio of expenses to average net assets..... 1.28% 1.16%(e) 1.08% 1.05% 0.98%(e) Ratio of net investment income to average net assets................. 2.95% 3.29%(e) 3.07% 3.11% 3.48%(e) Ratio of expenses to average net assets*.... 1.66% 1.49%(e) 1.55% 1.52% 1.52%(e) Portfolio turnover**.... 111% 20% 52% 189% 179%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from February 28, 1997 (commencement of operations) through December 31, 1997. (d) Not annualized. (e) Annualized. See notes to financial statements 202 AMSOUTH FUNDS Limited Term Tennessee Tax-Exempt Fund (a) Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Period Ended July 31, July 31, December 31, December 31, 2001 + 2000 (b)+ 1999 1998 (c) ---------- ------------ ------------ ------------ Net Asset Value, Beginning of Period................. $ 9.81 $ 9.68 $10.10 $10.18 ------ ------ ------ ------ Investment Activities Net investment income..... 0.22 0.15 0.22 0.20 Net realized and unrealized gains (losses) from investments......... 0.31 0.11 (0.40) -- ------ ------ ------ ------ Total from Investment Activities............... 0.53 0.26 (0.18) 0.20 ------ ------ ------ ------ Distributions Net investment income..... (0.22) (0.13) (0.22) (0.20) Net realized gains from investment transactions.. -- -- (0.02) (0.08) ------ ------ ------ ------ Total Distributions....... (0.22) (0.13) (0.24) (0.28) ------ ------ ------ ------ Change in Net Asset Value.. 0.31 0.13 (0.42) (0.08) ------ ------ ------ ------ Net Asset Value, End of Period.................... $10.12 $ 9.81 $ 9.68 $10.10 ====== ====== ====== ====== Total Return (excludes redemption charge)........ 5.51% 2.74%(d) (1.84)% 1.94%(d) Ratios/Supplemental Data: Net Assets at end of period (000)..................... $ 426 $ 289 $ 612 $ 732 Ratio of expenses to average net assets........ 2.03% 1.97%(e) 1.93% 2.05%(e) Ratio of net investment income to average net assets.................... 2.13% 2.50%(e) 2.21% 2.02%(e) Ratio of expenses to average net assets*....... 2.41% 2.21%(e) 2.15% 2.27%(e) Portfolio turnover**....... 111% 20% 52% 189%
+ Net investment income is based on average shares outstanding during the period. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. ** Portfolio turnover is calculated on the basis of the fund as a whole without distinguishing between the classes of shares issued. (a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from February 3, 1998 (commencement of operations) through December 31, 1998. (d) Not annualized. (e) Annualized. See notes to financial statements 203 AMSOUTH FUNDS Schedule of Portfolio Investments Prime Money Market Fund July 31, 2001 (Amounts in thousands, except shares) Commercial Paper -- Domestic* (48.4%)
Principal Amount Value ---------- -------- Aircraft Leasing (3.2%) International Lease Finance Corp., 3.69%, 10/3/01.......... $ 42,000 $ 41,732 -------- Banking (3.1%) Wells Fargo & Co., 3.57%, 10/26/01......................... 41,000 40,653 -------- Beverages (3.0%) Coca-Cola Co., 3.80%, 8/30/01.............................. 39,000 38,882 -------- Chemicals (3.0%) E.I. Du Pont De Nemours and Co., 3.60%, 8/23/01............ 39,000 38,915 -------- Consumer Goods (5.3%) Gillette Co., 3.65%, 10/11/01.............................. 29,000 28,793 Kimberly-Clark Corp., 3.68%, 9/13/01....................... 22,000 21,904 Kimberly-Clark Corp., 3.57%, 10/24/01...................... 19,000 18,843 -------- 69,540 -------- Financial Services (22.3%) American Express Credit Corp., 3.90%, 8/27/01.............. 40,000 39,888 American General Finance Corp., 3.94%, 8/16/01............. 40,000 39,935 Chevron USA, Inc., 3.73%, 8/6/01........................... 46,000 45,976 GE Capital Investment Advisors, 3.76%, 9/6/01.............. 53,000 52,803 General Motors Acceptance Corp., 3.72%, 9/17/01............ 39,000 38,812 General Re Funding Corp., 3.57%, 10/29/01.................. 34,000 33,702 IBM Credit Corp., 3.63%, 9/25/01........................... 42,000 41,769 -------- 292,885 -------- Oil & Gas Exploration, Production, & Services (3.0%) Texaco, Inc., 3.64%, 9/19/01............................... 40,000 39,803 -------- Pharmaceuticals (3.1%) Merck & Co., Inc., 3.66%, 9/11/01.......................... 41,000 40,830 -------- Telecommunications (2.4%) BellSouth Corp., 3.60%, 10/12/01........................... 32,000 31,772 -------- TOTAL COMMERCIAL PAPER --DOMESTIC.......................... 635,012 --------
Commercial Paper -- Foreign* (3.2%) Pharmaceuticals (3.2%) Glaxo Wellcome PLC, 3.95%, 8/20/01................................ 41,700 41,614 ------ TOTAL COMMERCIAL PAPER --FOREIGN.................................. 41,614 ------
U.S. Government Agencies* (22.5%)
Principal Amount Value ---------- ---------- Fannie Mae (4.5%) 4.15%, 8/1/01........................................... $ 59,000 $ 59,000 ---------- Federal Farm Credit Bank (4.9%) 4.68%, 11/8/01.......................................... 66,000 65,176 ---------- Federal Home Loan Bank (4.1%) 3.61%, 1/4/02........................................... 35,000 34,461 3.70%, 1/11/02.......................................... 20,000 19,679 ---------- 54,140 ---------- Freddie Mac (4.0%) 4.68%, 8/3/01........................................... 52,750 52,737 ---------- Private Export Funding (2.0%) 3.54%, 11/26/01......................................... 26,000 25,704 ---------- Tennessee Valley Authority (3.0%) 3.65%, 8/14/01.......................................... 39,000 38,949 ---------- TOTAL U.S. GOVERNMENT AGENCIES.......................... 295,706 ---------- Repurchase Agreements (26.2%) Cantor Fitzgerald, 3.90%, 8/1/01, dated 7/31/01, with maturity value of $114,238 (Collateralized by various U.S. Treasury and Government backed Securities)........ 114,225 114,225 Goldman Sachs, 3.90%, 8/1/01, dated 7/31/01, with a maturity value of $58,006 (Collateralized by various U.S. Government backed Securities)..................... 58,000 58,000 Prudential, 3.90%, 8/1/01, dated 7/31/01, with a maturity value of $58,006 (Collateralized by various U.S. Treasury and Government backed Securities)........ 58,000 58,000 Salomon Smith Barney, 3.90%, 8/1/01, dated 7/31/01, with maturity value of $114,238 (Collateralized by various U.S. Treasury and Government backed Securities)........ 114,225 114,225 ---------- TOTAL REPURCHASE AGREEMENTS............................. 344,450 ---------- TOTAL INVESTMENTS (Cost $1,316,782) (a) -- 100.3%........................ 1,316,782 Liabilities in excess of other assets --(0.3)%.......... (4,235) ---------- NET ASSETS -- 100.0%.................................... $1,312,547 ==========
--------- (a) Cost and value for federal income tax and financial reporting purposes are the same. * Rates disclosed represent yield effective at purchase. PLC -- Public Limited Company See notes to financial statements 204 AMSOUTH FUNDS Prime Money Market Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value...................................... $ 972,332 Repurchase agreements, at cost............................. 344,450 ---------- Total Investments......................................... 1,316,782 Interest receivable........................................ 37 Receivable for capital shares issued....................... 106 Prepaid expenses and other assets.......................... 56 ---------- Total Assets.............................................. 1,316,981 Liabilities: Distributions payable...................................... $3,674 Accrued expenses and other payables: Investment advisory fees.................................. 396 Administration fees....................................... 22 Shareholder servicing and distribution fees............... 187 Custodian fees............................................ 31 Other..................................................... 124 ------ Total Liabilities......................................... 4,434 ---------- Net Assets: Capital.................................................... 1,312,604 Accumulated net realized losses from investment transactions.............................................. (57) ---------- Net Assets................................................. $1,312,547 ========== Class A Shares (b) Net Assets................................................ $ 564,977 Shares outstanding........................................ 565,025 Offering and redemption price per share................... $ 1.00 ========== Class B Shares Net Assets................................................ $ 1,908 Shares outstanding........................................ 1,908 Offering price per share*................................. $ 1.00 ========== Trust Shares (c) Net Assets................................................ $ 745,662 Shares outstanding........................................ 745,695 Offering and redemption price per share................... $ 1.00 ==========
* Redemption price per share varies by length of time shares are held. (a) Formerly AmSouth Prime Obligations Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income................................................. $78,474 ------- Expenses: Investment advisory fees........................................ $5,502 Administration fees............................................. 2,750 Distribution fees -- Class B Shares............................. 9 Shareholder servicing fees -- Class A Shares (b)................ 1,467 Shareholder servicing fees -- Class B Shares.................... 3 Shareholder servicing fees -- Trust Shares (c).................. 1,181 Custodian fees.................................................. 378 Accounting fees................................................. 159 Transfer agent fees............................................. 311 Other fees...................................................... 368 ------ Total expenses before fee reductions/reimbursements............ 12,128 Expenses reduced by Investment Advisor......................... (688) Expenses reimbursed by Investment Advisor...................... (45) Expenses reduced by Administrator.............................. (1,375) Expenses reduced by Distributor................................ (394) Expenses reduced by Fund Accountant............................ (158) ------- Net expenses................................................... 9,468 ------- Net Investment Income........................................... 69,006 ------- Change in net assets resulting from operations.................. $69,006 =======
See notes to financial statements 205 AMSOUTH FUNDS Prime Money Market Fund (a) Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................. $ 69,006 $ 52,032 ---------- ---------- Change in net assets resulting from operations......... 69,006 52,032 ---------- ---------- Distributions to Class A Shareholders (b): From net investment income............................ (29,126) (18,553) Distributions to Class B Shareholders: From net investment income............................ (46) (29) Distributions to Trust Shareholders (c): From net investment income............................ (39,834) (33,450) ---------- ---------- Change in net assets from shareholder distributions.... (69,006) (52,032) ---------- ---------- Change in net assets from capital transactions......... (65,217) 704,563 ---------- ---------- Change in net assets................................... (65,217) 704,563 Net Assets: Beginning of period................................... 1,377,764 673,201 ---------- ---------- End of period......................................... $1,312,547 $1,377,764 ========== ==========
(a) Formerly AmSouth Prime Obligations Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. See notes to financial statements 206 AMSOUTH FUNDS Prime Money Market Fund (a) Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, July 31, 2001 2000 1999 1998 1997 ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 -------- -------- -------- -------- -------- Investment Activities Net investment income.. 0.049 0.051 0.044 0.049 0.048 -------- -------- -------- -------- -------- Total from Investment Activities............ 0.049 0.051 0.044 0.049 0.048 -------- -------- -------- -------- -------- Distributions Net investment income.. (0.049) (0.051) (0.044) (0.049) (0.048) -------- -------- -------- -------- -------- Total Distributions.... (0.049) (0.051) (0.044) (0.049) (0.048) -------- -------- -------- -------- -------- Change in Net Asset Value.................. -- -- -- -- -- Net Asset Value, End of Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ======== ======== ======== ======== ======== Total Return............ 5.03% 5.20% 4.48% 4.99% 4.90% Ratios/Supplemental Data: Net Assets at end of period (000)........... $564,977 $645,275 $136,078 $116,960 $111,027 Ratio of expenses to average net assets..... 0.77% 0.75% 0.78% 0.79% 0.78% Ratio of net investment income to average net assets................. 4.96% 5.35% 4.40% 4.88% 4.79% Ratio of expenses to average net assets*.... 0.94% 0.94% 0.94% 0.95% 0.93%
/\ Formerly Classic Shares. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. (a) Formerly AmSouth Prime Obligations Fund. Financial Highlights, Class B Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, 2001 2000 1999 1998 (b) ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period......................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 ------- ------- ------- ------- Investment Activities Net investment income.......... 0.042 0.042 0.035 0.005 ------- ------- ------- ------- Total from Investment Activities.................... 0.042 0.042 0.035 0.005 ------- ------- ------- ------- Distributions Net investment income.......... (0.042) (0.042) (0.035) (0.005) ------- ------- ------- ------- Total Distributions............ (0.042) (0.042) (0.035) (0.005) ------- ------- ------- ------- Change in Net Asset Value....... -- -- -- -- ------- ------- ------- ------- Net Asset Value, End of Period.. $ 1.000 $ 1.000 $ 1.000 $ 1.000 ======= ======= ======= ======= Total Return (excludes redemption charge)............. 4.25% 4.31% 3.55% 0.49%(c) Ratios/Supplemental Data: Net Assets at end of period (000).......................... $ 1,908 $ 727 $ 224 $ 1 Ratio of expenses to average net assets......................... 1.52% 1.61% 1.69% 1.85%(d) Ratio of net investment income to average net assets.......... 3.75% 4.35% 4.51% 3.83%(d) Ratio of expenses to average net assets*........................ 1.69% 1.69% 1.70% 1.88%(d)
* During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. (a) Formerly AmSouth Prime Obligations Fund. (b) For the period from June 15, 1998 (commencement of operations) through July 31, 1998. (c) Not annualized. (d) Annualized. See notes to financial statements 207 AMSOUTH FUNDS Prime Money Market Fund (a) Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, July 31, 2001 2000 1999 1998 1997 ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 -------- -------- -------- -------- -------- Investment Activities Net investment income.. 0.051 0.052 0.045 0.050 0.049 -------- -------- -------- -------- -------- Total from Investment Activities............ 0.051 0.052 0.045 0.050 0.049 -------- -------- -------- -------- -------- Distributions Net investment income.. (0.051) (0.052) (0.045) (0.050) (0.049) -------- -------- -------- -------- -------- Total Distributions.... (0.051) (0.052) (0.045) (0.050) (0.049) -------- -------- -------- -------- -------- Change in Net Asset Value.................. -- -- -- -- -- -------- -------- -------- -------- -------- Net Asset Value, End of Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ======== ======== ======== ======== ======== Total Return............ 5.18% 5.31% 4.59% 5.09% 5.00% Ratios/Supplemental Data: Net Assets at end of period (000)........... $745,662 $731,762 $536,899 $479,974 $416,966 Ratio of expenses to average net assets..... 0.63% 0.67% 0.68% 0.69% 0.68% Ratio of net investment income to average net assets................. 5.06% 5.24% 4.51% 4.98% 4.89% Ratio of expenses to average net assets*.... 0.84% 0.76% 0.69% 0.70% (b)
/\ Formerly Premier Shares. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. (a) Formerly AmSouth Prime Obligations Fund. (b) There were no fee reductions in this period. See notes to financial statements 208 AMSOUTH FUNDS Schedule of Portfolio Investments U.S. Treasury Money Market Fund July 31, 2001 (Amounts in thousands) U.S. Treasury Bills* (44.0%)
Principal Amount Value ---------- ------- 4.18%, 8/16/01.............................................. $ 21,000 $20,964 3.56%, 8/23/01.............................................. 14,000 13,970 3.70%, 9/6/01............................................... 14,000 13,950 4.13%, 9/13/01.............................................. 19,000 18,908 3.77%, 9/27/01.............................................. 16,000 15,906 3.74%, 10/11/01............................................. 12,000 11,913 3.89%, 10/25/01............................................. 13,000 12,883 3.42%, 12/13/01............................................. 12,000 11,850 3.46%, 1/10/02.............................................. 12,000 11,816 ------- TOTAL U.S. TREASURY BILLS................................... 132,160 ------- U.S. Treasury Notes (22.1%) 5.50%, 8/31/01.............................................. 15,000 15,005 6.25%, 10/31/01............................................. 11,000 11,067 7.50%, 11/15/01............................................. 12,000 12,128 5.88%, 11/30/01............................................. 11,000 11,078 6.13%, 12/31/01............................................. 17,000 17,172 ------- TOTAL U.S. TREASURY NOTES................................... 66,450 -------
Repurchase Agreements (33.9%)
Principal Amount Value ---------- -------- Goldman Sachs, 3.81%, 8/1/01, dated 7/31/01, with maturity value of $50,943 (Collateralized by U.S. Treasury Securities)............................................... $ 50,937 $ 50,937 Salomon Smith Barney, 3.83%, 8/1/01, dated 7/31/01, with a maturity value of $50,943 (Collateralized by U.S. Treasury Securities)............................................... 50,937 50,937 -------- TOTAL REPURCHASE AGREEMENTS................................ 101,874 -------- TOTAL INVESTMENTS (Cost $300,484) (a) -- 100.0%............................. 300,484 Other assets in excess of liabilities --0.0%............... 57 -------- NET ASSETS -- 100.0%....................................... $300,541 ========
--------- (a) Cost and value for federal income tax and financial reporting purposes are the same. * Rates disclosed represent yield effective at purchase. See notes to financial statements 209 AMSOUTH FUNDS U.S. Treasury Money Market Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value......................................... $198,610 Repurchase agreements, at cost................................ 101,874 -------- Total Investments............................................ 300,484 Interest receivable........................................... 921 Receivable for capital shares issued.......................... 135 Collateral for securities loaned, at fair value............... 52,000 Prepaid expenses and other assets............................. 22 -------- Total Assets................................................. 353,562 Liabilities: Distributions payable......................................... $ 780 Payable upon return of securities loaned...................... 52,000 Payable for capital shares redeemed........................... 64 Accrued expenses and other payables: Investment advisory fees..................................... 87 Administration fees.......................................... 10 Shareholder servicing fees................................... 37 Custodian fees............................................... 7 Other........................................................ 36 ------- Total Liabilities............................................ 53,021 -------- Net Assets: Capital....................................................... 300,533 Accumulated net investment income............................. 7 Accumulated net realized gains from investment transactions... 1 -------- Net Assets.................................................... $300,541 ======== Class A Shares (b) Net Assets................................................... $101,125 Shares outstanding........................................... 101,124 Offering and redemption price per share...................... $ 1.00 ======== Trust Shares (c) Net Assets................................................... $199,416 Shares outstanding........................................... 199,409 Offering and redemption price per share...................... $ 1.00 ========
(a) Formerly AmSouth U.S. Treasury Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income................................................. $16,505 Securities lending income....................................... 49 ------- Total Investment Income........................................ 16,554 Expenses: Investment advisory fees........................................ $1,207 Administration fees............................................. 604 Shareholder servicing fees -- Class A Shares (b)................ 72 Shareholder servicing fees -- Trust Shares (c).................. 410 Custodian fees.................................................. 83 Accounting fees................................................. 53 Transfer agent fees............................................. 70 Other fees...................................................... 156 ------ Total expenses before fee reductions........................... 2,655 Expenses reduced by Investment Advisor......................... (151) Expenses reduced by Distributor................................ (137) Expenses reduced by Fund Accountant............................ (37) ------- Net expenses................................................... 2,330 ------- Net Investment Income........................................... 14,224 ------- Change in net assets resulting from operations.................. $14,224 =======
See notes to financial statements 210 AMSOUTH FUNDS U.S. Treasury Money Market Fund (a) Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................... $ 14,224 $ 13,697 -------- -------- Change in net assets resulting from operations........... 14,224 13,697 -------- -------- Distributions to Class A Shareholders (b): From net investment income.............................. (1,068) (291) Distributions to Trust Shareholders (c): From net investment income.............................. (13,156) (13,406) -------- -------- Change in net assets from shareholder distributions...... (14,224) (13,697) -------- -------- Change in net assets from capital transactions........... 1,852 (26,548) -------- -------- Change in net assets..................................... 1,852 (26,548) Net Assets: Beginning of period..................................... 298,689 325,237 -------- -------- End of period........................................... $300,541 $298,689 ======== ========
(a) Formerly AmSouth U.S. Treasury Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. See notes to financial statements 211 AMSOUTH FUNDS U.S. Treasury Money Market Fund (a) Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, July 31, 2001 2000 1999 1998 1997 ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period.... $ 1.000 $ 1.000 $1.000 $1.000 $1.000 -------- ------- ------ ------ ------ Investment Activities Net investment income.. 0.046 0.046 0.040 0.046 0.045 -------- ------- ------ ------ ------ Total from Investment Activities............ 0.046 0.046 0.040 0.046 0.045 -------- ------- ------ ------ ------ Distributions Net investment income.. (0.046) (0.046) (0.040) (0.046) (0.045) -------- ------- ------ ------ ------ Total Distributions.... (0.046) (0.046) (0.040) (0.046) (0.045) -------- ------- ------ ------ ------ Change in Net Asset Value.................. -- -- -- -- -- -------- ------- ------ ------ ------ Net Asset Value, End of Period................. $ 1.000 $ 1.000 $1.000 $1.000 $1.000 ======== ======= ====== ====== ====== Total Return............ 4.71% 4.73% 4.06% 4.67% 4.60% Ratios/Supplemental Data: Net Assets at end of period (000)........... $101,125 $11,817 $4,390 $8,070 $9,885 Ratio of expenses to average net assets..... 0.92% 0.85% 0.79% 0.80% 0.79% Ratio of net investment income to average net assets................. 3.73% 4.72% 4.03% 4.57% 4.50% Ratio of expenses to average net assets*.... 0.98% 0.96% 0.95% 0.95% 0.94%
/\ Formerly Classic Shares. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. (a) Formerly AmSouth U.S. Treasury Fund. Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, July 31, 2001 2000 1999 1998 1997 ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 -------- -------- -------- -------- -------- Investment Activities Net investment income.. 0.048 0.048 0.041 0.047 0.046 -------- -------- -------- -------- -------- Total from Investment Activities............ 0.048 0.048 0.041 0.047 0.046 -------- -------- -------- -------- -------- Distributions Net investment income.. (0.048) (0.048) (0.041) (0.047) (0.046) -------- -------- -------- -------- -------- Total Distributions.... (0.048) (0.048) (0.041) (0.047) (0.046) -------- -------- -------- -------- -------- Change in Net Asset Value.................. -- -- -- -- -- -------- -------- -------- -------- -------- Net Asset Value, End of Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ======== ======== ======== ======== ======== Total Return............ 4.87% 4.86% 4.16% 4.77% 4.70% Ratios/Supplemental Data: Net Assets at end of period (000)........... $199,416 $286,872 $320,847 $352,055 $309,361 Ratio of expenses to average net assets..... 0.76% 0.73% 0.69% 0.70% 0.69% Ratio of net investment income to average net assets................. 4.82% 4.74% 4.10% 4.67% 4.60% Ratio of expenses to average net assets*.... 0.87% 0.77% 0.70% 0.70% (b)
/\ Formerly Premier Shares. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. (a) Formerly AmSouth U.S. Treasury Fund. (b) There were no fee reductions in this period. See notes to financial statements 212 AMSOUTH FUNDS Schedule of Portfolio Investments Treasury Reserve Money Market Fund July 31, 2001 (Amounts in thousands) U.S. Treasury Bills* (29.3%)
Principal Amount Value ----------- -------- 4.14%, 8/16/01............................................ $ 18,000 $ 17,969 4.41%, 9/13/01............................................ 19,000 18,902 3.68%, 9/27/01............................................ 14,000 13,920 3.51%, 10/11/01........................................... 18,000 17,877 3.54%, 10/25/01........................................... 11,000 10,909 3.44%, 12/13/01........................................... 18,000 17,773 3.54%, 12/27/01........................................... 10,000 9,860 -------- TOTAL U.S. TREASURY BILLS................................. 107,210 -------- U.S. Treasury Notes (22.8%) 7.88%, 8/15/01............................................ 10,000 10,015 5.50%, 8/31/01............................................ 23,000 23,013 7.50%, 11/15/01........................................... 13,000 13,139 5.88%, 11/30/01........................................... 22,000 22,153 6.25%, 1/31/02............................................ 15,000 15,204 -------- TOTAL U.S. TREASURY NOTES................................. 83,524 --------
Repurchase Agreements (47.9%) Goldman Sachs, 3.81%, 8/1/01, dated 7/31/01, with maturity value of $87,846 (Collateralized by U.S. Treasury Note).. 87,836 87,836 Salomon Smith Barney, 3.83%, 8/1/01, dated 7/31/01, with maturity value of $87,846 (Collateralized by U.S. Treasury Note)........................................... 87,836 87,836 ----------- -------- TOTAL REPURCHASE AGREEMENTS............................... 175,672 -------- TOTAL INVESTMENTS (Cost $366,406) (a) -- 100.0%............................ 366,406 Other assets in excess of liabilities -- 0.0%...................................... 109 -------- NET ASSETS -- 100.0%...................................... $366,515 ========
--------- (a) Cost and value for federal income tax and financial reporting purposes are the same. * Rates disclosed represent yield effective at purchase. See notes to financial statements 213 AMSOUTH FUNDS Treasury Reserve Money Market Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value....................................... $190,734 Repurchase agreements, at cost.............................. 175,672 -------- Total Investments.......................................... 366,406 Interest receivable......................................... 1,340 Receivable for capital shares issued........................ 1 Receivable from investment advisor.......................... 7 Collateral for securities loaned, at fair value............. 48,000 Prepaid expenses and other assets........................... 29 -------- Total Assets............................................... 415,783 Liabilities: Distributions payable....................................... $ 1,035 Payable upon return of securities loaned.................... 48,000 Accrued expenses and other payables: Investment advisory fees................................... 110 Administration fees........................................ 6 Shareholder servicing fees................................. 45 Custodian fees............................................. 9 Other...................................................... 63 ------- Total Liabilities.......................................... 49,268 -------- Net Assets: Capital..................................................... 366,518 Accumulated net investment income........................... 4 Accumulated net realized losses from investment transactions............................................... (7) -------- Net Assets.................................................. $366,515 ======== Class A Shares Net Assets................................................. $ 99,777 Shares outstanding......................................... 99,784 Offering and redemption price per share.................... $ 1.00 ======== Trust Shares (b) Net Assets................................................. $266,738 Shares outstanding......................................... 266,752 Offering and redemption price per share.................... $ 1.00 ========
(a) Formerly ISG Treasury Money Market Fund. (b) Formerly Institutional Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income................................................. $22,433 Securities lending income....................................... 57 ------- Total Investment Income........................................ 22,490 Expenses: Investment advisory fees........................................ $1,603 Administration fees............................................. 801 Shareholder servicing fees -- Class A Shares.................... 266 Shareholder servicing fees -- Trust Shares (b).................. 441 Custodian fees.................................................. 110 Accounting fees................................................. 47 Transfer agent fees............................................. 109 Other fees...................................................... 143 ------ Total expenses before fee reductions/reimbursements............ 3,520 Expenses reduced by Investment Advisor......................... (200) Expenses reimbursed by Investment Advisor...................... (136) Expenses reduced by Administrator.............................. (401) Expenses reduced by Distributor................................ (147) Expenses reduced by Fund Accountant............................ (45) ------- Net expenses................................................... 2,591 ------- Net Investment Income........................................... 19,899 ------- Change in net assets resulting from operations.................. $19,899 =======
See notes to financial statements 214 AMSOUTH FUNDS Treasury Reserve Money Market Fund (a) Statements of Changes in Net Assets
Year Ended Period Ended Year Ended July 31, July 31, December 31, 2001 2000 (b) 1999 ---------- ------------ ------------ (Amounts in thousands) From Investment Activities: Operations: Net investment income................... $ 19,899 $ 13,999 $ 20,806 -------- -------- -------- Change in net assets resulting from operations.............................. 19,899 13,999 20,806 -------- -------- -------- Distributions to Class A Shareholders: From net investment income.............. (5,219) (4,361) (6,819) Distributions to Trust Shareholders (c): From net investment income.............. (14,680) (9,638) (13,987) -------- -------- -------- Change in net assets from shareholder distributions........................... (19,899) (13,999) (20,806) -------- -------- -------- Change in net assets from capital transactions............................ (57,932) (60,565) 7,558 -------- -------- -------- Change in net assets..................... (57,932) (60,565) 7,558 Net Assets: Beginning of period..................... 424,447 485,012 477,454 -------- -------- -------- End of period........................... $366,515 $424,447 $485,012 ======== ======== ========
(a) Formerly ISG Treasury Money Market Fund. (b) For the period from January 1, 2000 through July 31, 2000. (c) Formerly Institutional Shares. See notes to financial statements 215 AMSOUTH FUNDS Treasury Reserve Money Market Fund (a) Financial Highlights, Class A Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, December 31, December 31, December 31, December 31, 2001 2000 (b) 1999 1998 1997 1996 ---------- ------------ ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ------- -------- -------- -------- ------- ------- Investment Activities Net investment income.. 0.048 0.030 0.043 0.046 0.047 0.047 ------- -------- -------- -------- ------- ------- Total from Investment Activities............ 0.048 0.030 0.043 0.046 0.047 0.047 ------- -------- -------- -------- ------- ------- Distributions Net investment income.. (0.048) (0.030) (0.043) (0.046) (0.047) (0.047) ------- -------- -------- -------- ------- ------- Total Distributions.... (0.048) (0.030) (0.043) (0.046) (0.047) (0.047) ------- -------- -------- -------- ------- ------- Change in Net Asset Value.................. -- -- -- -- -- -- ------- -------- -------- -------- ------- ------- Net Asset Value, End of Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ======= ======== ======== ======== ======= ======= Total Return............ 4.95% 3.07%(c) 4.38% 4.68% 4.78% 4.78% Ratios/Supplemental Data: Net Assets at end of period (000)........... $99,777 $143,901 $143,208 $167,475 $77,065 $78,308 Ratio of expenses to average net assets..... 0.72% 0.65%(d) 0.60% 0.77% 0.75% 0.56% Ratio of net investment income to average net assets................. 4.90% 5.21%(d) 4.28% 4.56% 4.68% 4.72% Ratio of expenses to average net assets*.... 0.95% 0.86%(d) 0.70% 0.78% (e) 0.74%
* During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. (a) Formerly ISG Treasury Money Market Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) Not annualized. (d) Annualized. (e) There were no fee reductions in this period. Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Period Ended Year Ended Year Ended Year Ended Period Ended July 31, July 31, December 31, December 31, December 31, December 31, 2001 2000 (b) 1999 1998 1997 1996 (c) ---------- ------------ ------------ ------------ ------------ ------------ Net Asset Value, Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 -------- -------- -------- -------- -------- -------- Investment Activities Net investment income.. 0.049 0.031 0.043 0.048 0.049 0.024 -------- -------- -------- -------- -------- -------- Total from Investment Activities............ 0.049 0.031 0.043 0.048 0.049 0.024 -------- -------- -------- -------- -------- -------- Distributions Net investment income.. (0.049) (0.031) (0.043) (0.048) (0.049) (0.024) -------- -------- -------- -------- -------- -------- Total Distributions.... (0.049) (0.031) (0.043) (0.048) (0.049) (0.024) -------- -------- -------- -------- -------- -------- Change in Net Asset Value.................. -- -- -- -- -- -- -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ======== ======== ======== ======== ======== ======== Total Return............ 5.06% 3.10%(d) 4.39% 4.93% 5.05% 2.43%(d) Ratios/Supplemental Data: Net Assets at end of period (000)........... $266,738 $280,546 $341,803 $309,979 $114,175 $109,698 Ratio of expenses to average net assets..... 0.62% 0.61%(e) 0.59% 0.53% 0.50% 0.52%(e) Ratio of net investment income to average net assets................. 4.99% 5.24%(e) 4.31% 4.78% 4.94% 4.78%(e) Ratio of expenses to average net assets*.... 0.85% 0.76%(e) 0.60% (f) (f) (f)
/\ Formerly Institutional Shares. * During the period, certain fees were reduced/reimbursed. If such fee reductions/reimbursements had not occurred, the ratios would have been as indicated. (a) Formerly ISG Treasury Money Market Fund. (b) For the period from January 1, 2000 through July 31, 2000. In conjunction with the reorganization of the AmSouth Funds, the Fund changed its fiscal year end to July 31. (c) For the period from July 1, 1996 (commencement of operations) through December 31, 1996. (e) Not annualized. (e) Annualized. (f) There were no fee reductions in this period. See notes to financial statements 216 AMSOUTH FUNDS Schedule of Portfolio Investments Tax-Exempt Money Market Fund July 31, 2001 (Amounts in thousands, except shares) Demand Notes (65.9%)
Shares or Principal Amount Value ----------- -------- Alabama (20.8%) Alabama State Housing Finance Authority, Multi Family Housing Revenue, Rime Village Hoover Project, Series A, 2.70%*, 8/1/01**, FNMA............................ $ 2,000 $ 2,000 Alabama State Housing Finance Authority, Multi Family Housing Revenue, Rime Village Huntsville Project, Series B, 2.70%*, 8/1/01**, FNMA..................... 1,500 1,500 Bessemer Alabama Medical Clinic Board, Revenue, Lloyd Noland Foundation, Series A, 2.85%*, 8/2/01**, LOC: Allied Irish Bank PLC................................ 9,600 9,600 City of Birmingham, Series 1992A, GO, 2.65%*, 8/1/01**............................................. 2,000 2,000 Columbia Alabama Industrial Development Board, PCR, Alabama Power Co. Project, Series A, 2.80%*, 8/1/01**..................................... 1,600 1,600 Columbia Alabama Industrial Development Board, PCR, Alabama Power Co. Project, Series D, 2.75%*, 8/1/01**..................................... 350 350 Daphne-Villa Mercy Alabama Special Care Facilities Financing Authority, Revenue, Mercy Medical Project, 2.60%*, 8/1/01**, LOC: Southtrust Bank N.A........... 5,000 5,000 Eutaw Alabama Industrial Development Board, PCR, Refunding, Alabama Power Co., 2.80%*, 8/1/01**....... 4,000 4,000 Homewood Educational Building Authority, Revenue, Educational Facilities, Samford University, 2.80%*, 8/1/01**..................................... 5,700 5,700 Jacksonville Industrial Development Board, Industrial Revenue, Parker Hannifin Corp., 2.65%*, 8/2/01**..... 1,000 1,000 Mobile Industrial Development Board, PCR, Alabama Power Co. Project, Series B, 2.69%*, 8/2/01**........ 2,000 2,000 Port City Medical Clinic Board of Mobile Alabama, Revenue, Infirmary Health, 2.65%*, 8/2/01**, SPA: The Bank of Nova Scotia and KBC Bank N.V................. 2,000 2,000 Stevenson Alabama Industrial Development Board, Environmental Improvement Revenue, Mead Corp. Project, 2.70%*, 8/1/01**............................ 3,565 3,565 -------- 40,315 -------- Arizona (1.8%) Phoenix Industrial Development Authority, Multi Family Housing Revenue, Del Mar Terrace, Series A, 2.70%*, 8/1/01**, FHLMC...................................... 3,450 3,450 --------
Demand Notes, continued
Shares or Principal Amount Value --------- -------- Connecticut (2.6%) Connecticut State Health & Educational Facilities Authority, Revenue, Yale University, Series T-1, 2.50%*, 8/2/01**.......................................... $ 5,000 $ 5,000 -------- Georgia (3.1%) Cobb County Housing Authority, Multi Family Housing Revenue, Post Mill Project, 2.70%*, 8/1/01**, FNMA........ 1,000 1,000 Municipal Electric Authority, Georgia, Revenue, Project One, Subseries D, 2.65%*, 8/1/01**, MBIA.................. 5,000 5,000 -------- 6,000 -------- Illinois (5.0%) Elmhurst Revenue, Joint Common Accreditation, 2.65%*, 8/2/01**.................................................. 4,665 4,665 Illinois Developmental Finance Authority, Revenue, Provena Health, Series C, 3.00%*, 8/1/01**........................ 5,000 5,000 -------- 9,665 -------- Michigan (0.5%) Delta County Economic Development Corp., Environmental Improvement Revenue, Mead Escanaba Paper, Series C, 2.70%*, 8/1/01**.......................................... 900 900 -------- Nevada (1.9%) Reno Nevada, Hospital Revenue, St. Mary's Regional Medical Center, Series B, 2.75%*, 8/1/01**, MBIA.................. 3,600 3,600 -------- New York (3.2%) New York, Series F-3, GO, 2.50%*, 8/1/01**................. 5,000 5,000 New York, Subseries A-10, GO, 2.60%*, 8/1/01**, LOC: Morgan Guaranty Trust............................................ 1,100 1,100 -------- 6,100 -------- North Carolina (3.6%) University of North Carolina Hospital Chapel Hill, Revenue, Series A, 2.75%*, 8/1/01**, SPA: Landesbank Hessen........ 7,000 7,000 -------- North Dakota (0.8%) Grand Forks Health Care Facilities, Revenue, United Hospital Obligation Group, Series A, 2.75%*, 8/1/01**, LOC: LaSalle National Bank................................ 1,500 1,500 -------- Ohio (2.6%) Montgomery County Ohio, Revenue, Catholic Health Initiatives, Series B, 2.80%*, 8/1/01**, SPA: Morgan Guaranty Trust............................................ 5,000 5,000 --------
Continued 217 AMSOUTH FUNDS Schedule of Portfolio Investments Tax-Exempt Money Market Fund July 31, 2001 (Amounts in thousands, except shares) Demand Notes, continued
Shares or Principal Amount Value ----------- -------- Oregon (1.7%) Port of Portland Oregon, Reynolds Metals, PCR, 2.70%*, 8/1/01**, LOC: San Paolo Bank........................... $ 3,200 $ 3,200 -------- Pennsylvania (2.9%) Lehigh County Pennsylvania General Purpose Authority, Revenue, Lehigh Valley Hospital, Series A, 2.75%*, 8/1/01**, AMBAC................................. 4,200 4,200 Lehigh County Pennsylvania General Purpose Authority, Revenue, Lehigh Valley Hospital, Series B, 2.75%*, 8/1/01**, MBIA.................................. 1,300 1,300 -------- 5,500 -------- Tennessee (7.3%) Metropolitan Government, Nashville & Davidson County, Industrial Development Board, Revenue, Country Music Hall of Fame, 2.65%*, 8/2/01**.......................... 5,000 5,000 Shelby County Health, Educational, & Housing Facilities Board Revenue, Multi Family Housing, Wyndridge, 2.67%*, 8/1/01**................................................ 8,000 8,000 Sullivan County Industrial Development Board, PCR, Mead Corporation Project, 2.70%*, 8/1/01**, LOC: Union Bank of Switzerland.......................................... 1,190 1,190 -------- 14,190 -------- Texas (4.3%) Harris County Health Facilities Development Corporation, Revenue, 2.75%*, 8/1/01**, SPA: Morgan Guaranty Trust... 2,900 2,900 Lone Star Texas Airport Improvement Authority, 2.75%*, 8/1/01**, LOC: Royal Bank of Canada..................... 1,000 1,000 Lone Star Texas Airport Improvement Authority, 2.75%*, 8/1/01**, LOC: Royal Bank Of Canada..................... 3,000 3,000 North Central Texas Health Facilities Development Corporation, Revenue, Presbytarian Medical Center, Series C, 2.75%*, 8/1/01**, MBIA........................ 1,400 1,400 -------- 8,300 -------- Washington (2.6%) Washington State, Series VR 96B, GO, 2.50%*, 8/1/01**.... 5,000 5,000 -------- Wyoming (1.2%) Green River Wyoming, PCR, Rhone-Poulene Inc. Project, 2.70%*, 8/1/01**, LOC: ABN AMRO Bank N.V................ 2,300 2,300 -------- TOTAL DEMAND NOTES....................................... 127,020 --------
Municipal Bonds (26.7%)
Shares or Principal Amount Value ----------- -------- California (5.0%) Brea California Public Finance Authority, Revenue, 7.00%, 8/1/15, OID, Prerefunded 8/1/01 @ 102, MBIA............. $ 9,580 $ 9,771 -------- Colorado (0.3%) Colorado Springs Colorado, Utilities Revenue, Refunding and Improvements, Series A, 4.50%, 11/15/01............. 615 618 -------- Connecticut (0.9%) New Haven Connecticut, GO, 7.40%, 8/15/11, Prerefunded 8/15/01 @ 102........................................... 1,605 1,640 -------- Florida (1.9%) Fort Lauderdale Florida, Water & Sewer Revenue, 5.50%, 9/1/01, OID, ETM........................................ 1,000 1,002 Miami Beach Florida, Park Improvement Projects, 4.00%, 9/1/01, OID, FGIC....................................... 300 300 Palm Beach County Florida School District, GO, 4.80%, 8/1/01, OID, FGIC....................................... 1,000 1,000 Reedy Creek Florida Improvement District, Utilities Revenue, Series 1991-1, OID, 6.50%, 10/1/16, Prerefunded 10/1/01 @ 101, MBIA..................................... 850 864 Tampa Florida, Utility Tax & Special Revenue, 6.90%, 10/1/09, OID, Prerefunded 10/1/01 @ 102, AMBAC, MBIA- IBC..................................................... 530 544 -------- 3,710 -------- Georgia (1.6%) Dougherty County Georgia School District, Tax Anticipation Notes, 3.50%, 12/31/01..................... 3,000 3,009 -------- Indiana (0.5%) Indiana University, Revenue, Student Fees, Series H, 6.80%, 8/1/04, OID, Prerefunded 8/1/01 @ 102............ 1,000 1,020 -------- Massachusetts (4.6%) Chelsea Massachusetts, GO, 4.10%, 9/1/01, FGIC........... 297 297 Massachusetts State, Series C, GO, 6.75%, 8/1/06, OID, Prerefunded 8/1/01 @ 102................................ 500 510 Pittsfield Massachusetts, Bond Anticipation Notes, 5.00%, 10/12/01................................................ 8,000 8,030 -------- 8,837 -------- Michigan (2.8%) Michigan State Hospital Finance Authority, Revenue, Detroit Medical Center, Series A, 7.50%, 8/15/11, OID, Prerefunded 8/15/01 @ 102............................... 5,000 5,109 Washtenaw County Michigan Building Authority, Revenue, 4.80%, 9/1/01, AMBAC.................................... 350 351 -------- 5,460 --------
Continued 218 AMSOUTH FUNDS Schedule of Portfolio Investments Tax-Exempt Money Market Fund July 31, 2001 (Amounts in thousands, except shares) Municipal Bonds, continued
Shares or Principal Amount Value ----------- -------- Minnesota (0.1%) Minnesota State Higher Education Facilities Authority, Revenue, University of St. Thomas, Series 4-A1, 4.45%, 10/1/01.................................................. $ 100 $ 100 -------- Missouri (0.3%) Independence Missouri, Water Utility Revenue, 3.60%, 11/1/01, AMBAC........................................... 600 601 -------- New Jersey (2.2%) Bridgewater Township New Jersey, Bond Anticipation Notes, 3.25%, 1/30/02........................................... 4,213 4,225 -------- New York (2.6%) Monroe Woodbury New York Central School District, Tax Anticipation Notes, 3.05%, 9/28/01....................... 5,000 5,003 -------- Ohio (0.5%) Cuyahoga County Ohio, Hospital Revenue, Meridia Health System, 7.00%, 8/15/23, OID, Prerefunded 8/15/01 @ 102... 500 511 Hilliard Ohio School District, School Improvements, Series B, GO, 4.00%, 12/1/01.................................... 515 517 -------- 1,028 -------- Pennsylvania (1.8%) Upper Merion Pennsylvania Area School District, GO, 6.90%, 9/1/16, Prerefunded 9/1/01 @ 100, State Aid Withholding.. 3,500 3,513 -------- South Carolina (0.1%) Florence County South Carolina, Hospital Revenue, McLeod Regional Medical Center Project, 4.60%, 11/1/01, OID, FGIC..................................................... 215 216 -------- South Dakota (0.3%) South Dakota State Building Authority, Lease Revenue, Series A, 4.60%, 12/1/01, AMBAC.......................... 500 502 -------- Texas (0.6%) Round Rock Texas Independent School District, GO, 3.40%, 8/1/01, OID, PSF-GTD..................................... 500 500 Texas State, Water Financial Assistance, GO, 5.00%, 8/1/01................................................... 600 600 -------- 1,100 -------- Virginia (0.3%) Virginia College Building Authority, Educational Facilities Revenue, 21st Century College Program, 4.25%, 8/1/01............................................ 500 500 -------- Wisconsin (0.3%) Wisconsin State, Refunding, Series 3, GO, 5.25%, 11/1/01.. 500 503 -------- TOTAL MUNICIPAL BONDS..................................... 51,356 --------
Tax Exempt Commercial Paper (5.2%)
Shares or Principal Amount Value ----------- -------- LPFA, 2.55%, 8/13/01...................................... $ 5,000 $ 5,000 Texas Municipal Power, 2.60%, 8/14/01..................... 5,000 5,000 -------- TOTAL TAX EXEMPT COMMERCIAL PAPER......................... 10,000 -------- Investment Companies (2.2%) AIM Tax-Free Money Market Fund............................ 1,347,498 1,348 Goldman Sachs Tax-Free Money Market Fund.................. 2,928,155 2,928 -------- TOTAL INVESTMENT COMPANIES................................ 4,276 -------- TOTAL INVESTMENTS (Cost $192,652) (a) -- 100.0%............................ 192,652 Liabilities in excess of other assets -- (0.0%)......................................... (19) -------- NET ASSETS -- 100.0%...................................... $192,633 ========
--------- (a) Cost and value for federal income tax and financial reporting purposes are the same. * Variable rate security. Rate presented represents rate in effect at July 31, 2001. Date presented reflects next rate change date. ** Put and demand features exist allowing the fund to require the repurchase of the instrument within variable time periods including daily, weekly, monthly, and semiannually. AMBAC -- Insured by AMBAC Indemnity Corp. ETM -- Escrowed to Maturity FGIC -- Insured by Financial Guaranty Insurance Corp. FHLMC -- Insured by Federal Home Loan Mortgage Corp. FNMA -- Insured by Federal National Mortgage Assoc. GO -- General Obligation LOC -- Line of Credit MBIA -- Insured by Municipal Bond Insurance Assoc. MBIA-IBC -- MBIA Insured Bond Certificates OID -- Original Issue Discount PCR -- Pollution Control Revenue PLC -- Public Limited Company PSF-GTD -- Permanent School Fund Guarantee SPA -- Standby Purchase Agreement See notes to financial statements 219 AMSOUTH FUNDS Tax-Exempt Money Market Fund (a) Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value......... $192,652 Interest and dividends receivable.... 1,525 Prepaid expenses and other assets.. 29 -------- Total Assets.. 194,206 Liabilities: Distributions payable....... $ 300 Payable for investments purchased..... 1,176 Accrued expenses and other payables: Investment advisory fees......... 41 Administration fees......... 6 Shareholder servicing fees......... 22 Custodian fees......... 5 Other......... 23 ------ Total Liabilities.. 1,573 -------- Net Assets: Capital........ 192,923 Accumulated net realized losses from investment transactions.. (290) -------- Net Assets..... $192,633 ======== Class A Shares (b) Net Assets.... $ 40,728 Shares outstanding.. 40,786 Offering and redemption price per share........ $ 1.00 ======== Trust Shares (c) Net Assets.... $151,905 Shares outstanding.. 152,138 Offering and redemption price per share........ $ 1.00 ========
(a) Formerly AmSouth Tax-Exempt Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income.................................................... $6,934 Dividend income.................................................... 319 ------ Total Investment Income........................................... 7,253 Expenses: Investment advisory fees........................................... $805 Administration fees................................................ 403 Shareholder servicing fees -- Class A Shares (b)................... 110 Shareholder servicing fees -- Trust Shares (c)..................... 236 Custodian fees..................................................... 55 Accounting fees.................................................... 39 Transfer agent fees................................................ 51 Other fees......................................................... 77 ---- Total expenses before fee reductions.............................. 1,776 Expenses reduced by Investment Advisor............................ (302) Expenses reduced by Distributor................................... (79) Expenses reduced by Fund Accountant............................... (23) ------ Net expenses...................................................... 1,372 ------ Net Investment Income.............................................. 5,881 ------ Realized Gains from Investments: Net realized gains from investment transactions.................... 97 ------ Change in net assets resulting from operations..................... $5,978 ======
See notes to financial statements 220 AMSOUTH FUNDS Tax-Exempt Money Market Fund (a) Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................... $ 5,881 $ 4,385 Net realized gains (losses) from investment transactions........................................... 97 (172) -------- -------- Change in net assets resulting from operations........... 5,978 4,213 -------- -------- Distributions to Class A Shareholders (b): From net investment income.............................. (1,243) (1,179) Distributions to Trust Shareholders (c): From net investment income.............................. (4,638) (3,206) -------- -------- Change in net assets from shareholder distributions...... (5,881) (4,385) -------- -------- Change in net assets from capital transactions........... (598) 96,582 -------- -------- Change in net assets..................................... (501) 96,410 Net Assets: Beginning of period..................................... 193,134 96,724 -------- -------- End of period........................................... $192,633 $193,134 ======== ========
(a) Formerly AmSouth Tax-Exempt Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. See notes to financial statements 221 AMSOUTH FUNDS Tax-Exempt Money Market Fund (a) Financial Highlights, Class A Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, July 31, 2001 2000 1999 1998 1997 ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period.... $ 0.998 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ------- ------- ------- ------- ------- Investment Activities Net investment income.. 0.028 0.031 0.026 0.030 0.030 Net realized and unrealized gain (losses) from investments........... 0.001 (0.002) -- -- -- ------- ------- ------- ------- ------- Total from Investment Activities............ 0.029 0.029 0.026 0.030 0.030 ------- ------- ------- ------- ------- Distributions Net investment income.. (0.028) (0.031) (0.026) (0.030) (0.030) ------- ------- ------- ------- ------- Total Distributions.... (0.028) (0.031) (0.026) (0.030) (0.030) ------- ------- ------- ------- ------- Change in Net Asset Value.................. 0.001 (0.002) -- -- -- ------- ------- ------- ------- ------- Net Asset Value, End of Period................. $ 0.999 $ 0.998 $ 1.000 $ 1.000 $ 1.000 ======= ======= ======= ======= ======= Total Return............ 2.83% 3.11% 2.66% 3.03% 3.04% Ratios/Supplemental Data: Net Assets at end of period (000)........... $40,728 $51,260 $22,844 $28,657 $27,926 Ratio of expenses to average net assets..... 0.80% 0.71% 0.59% 0.60% 0.62% Ratio of net investment income to average net assets................. 2.84% 3.14% 2.64% 2.97% 3.00% Ratio of expenses to average net assets*.... 0.96% 0.97% 0.98% 0.98% 0.97%
/\ Formerly Classic Shares. * During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. (a) Formerly AmSouth Tax-Exempt Fund. Financial Highlights, Trust Shares/\ Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, July 31, 2001 2000 1999 1998 1997 ---------- ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period.... $ 0.998 $ 1.000 $ 1.000 $ 1.000 $ 1.000 -------- -------- ------- ------- ------- Investment Activities Net investment income.. 0.029 0.032 0.027 0.031 0.031 Net realized and unrealized gains (losses) from investments........... --* (0.002) -- -- -- -------- -------- ------- ------- ------- Total from Investment Activities............ 0.029 0.030 0.027 0.031 0.031 -------- -------- ------- ------- ------- Distributions Net investment income.. (0.029) (0.032) (0.027) (0.031) (0.031) -------- -------- ------- ------- ------- Total Distributions.... (0.029) (0.032) (0.027) (0.031) (0.031) -------- -------- ------- ------- ------- Change in Net Asset Value.................. -- (0.002) -- -- -- -------- -------- ------- ------- ------- Net Asset Value, End of Period................. $ 0.998 $ 0.998 $ 1.000 $ 1.000 $ 1.000 ======== ======== ======= ======= ======= Total Return............ 2.98% 3.23% 2.76% 3.13% 3.15% Ratios/Supplemental Data: Net Assets at end of period (000)........... $151,905 $141,874 $73,880 $62,084 $55,429 Ratio of expenses to average net assets..... 0.65% 0.59% 0.49% 0.50% 0.52% Ratio of net investment income to average net assets................. 2.95% 3.28% 2.71% 3.07% 3.10% Ratio of expenses to average net assets**... 0.86% 0.80% 0.73% 0.73% 0.72%
/\ Formerly Premier Shares. * Less than $0.0005 ** During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. (a) Formerly AmSouth Tax-Exempt Fund. See notes to financial statements 222 AMSOUTH FUNDS Schedule of Portfolio Investments Institutional Prime Obligations Money Market Fund July 31, 2001 (Amounts in thousands, except shares) Commercial Paper -- Domestic* (46.3%)
Shares or Principal Amount Value ---------- -------- Aircraft Leasing (3.0%) International Lease Finance Corp., 3.69%, 10/3/01.......... $ 23,000 $ 22,853 -------- Banking (2.9%) Wells Fargo & Co., 3.57%, 10/26/01......................... 22,000 21,814 -------- Beverages (2.8%) Coca-Cola Co., 3.80%, 8/30/01.............................. 21,000 20,936 -------- Chemicals (2.8%) E.I. Du Pont De Nemours and Co., 3.60%, 8/23/01............ 21,000 20,954 -------- Consumer Goods (5.0%) Gillette Co., 3.65%, 10/11/01.............................. 16,000 15,886 Kimberly-Clark Corp., 3.68%, 9/13/01....................... 11,000 10,952 Kimberly-Clark Corp., 3.57%, 10/24/01...................... 11,000 10,909 -------- 37,747 -------- Financial Services (21.6%) American Express Credit Corp., 3.90%, 8/27/01.............. 23,000 22,936 American General Finance Corp., 3.94%, 8/16/01............. 22,000 21,964 Chevron USA, Inc., 3.73%, 8/6/01........................... 26,000 25,987 GE Capital Investment Advisors, 3.76%, 9/6/01.............. 29,000 28,891 General Motors Acceptance Corp., 3.72%, 9/17/01............ 21,000 20,899 General Re Funding Corp., 3.57%, 10/29/01.................. 19,000 18,834 IBM Credit Corp., 3.63%, 9/25/01........................... 23,000 22,874 -------- 162,385 -------- Oil & Gas Exploration, Production, & Services (2.9%) Texaco, Inc., 3.64%, 9/19/01............................... 22,000 21,892 -------- Pharmaceuticals (2.9%) Merck & Co., Inc., 3.66%, 9/11/01.......................... 22,000 21,909 -------- Telecommunications (2.4%) BellSouth Corp., 3.60%, 10/12/01........................... 18,000 17,871 -------- TOTAL COMMERCIAL PAPER -- DOMESTIC......................... 348,361 -------- Commercial Paper -- Foreign* (3.0%) Pharmaceuticals (3.0%) Glaxo Wellcome PLC, 3.95%, 8/20/01......................... 23,000 22,953 -------- TOTAL COMMERCIAL PAPER -- FOREIGN.......................... 22,953 -------- U.S. Government Agencies* (20.2%) Fannie Mae (4.5%) 4.67%, 8/9/01.............................................. 34,000 33,965 -------- Federal Farm Credit Bank (3.8%) 4.68%, 11/8/01............................................. 29,000 28,638 --------
U.S. Government Agencies*, continued
Shares or Principal Amount Value ---------- -------- Federal Home Loan Bank (3.8%) 3.61%, 1/4/02............................................. $ 19,344 $ 19,047 3.70%, 1/11/02............................................ 10,000 9,839 -------- 28,886 -------- Freddie Mac (3.5%) 4.68%, 8/3/01............................................. 26,000 25,994 -------- Private Export Funding (1.8%) 3.54%, 11/26/01........................................... 14,000 13,841 -------- Tennessee Valley Authority (2.8%) 3.65%, 8/14/01............................................ 21,000 20,972 -------- TOTAL U.S. GOVERNMENT AGENCIES............................ 152,296 -------- Investment Companies (0.0%) AmSouth Prime Money Market Fund........................... 20,429 20 AmSouth U.S. Treasury Money Market Fund................... 16,826 17 -------- TOTAL INVESTMENT COMPANIES................................ 37 -------- Repurchase Agreements (30.8%) Cantor Fitzgerald, 3.90%, 8/1/01, dated 7/31/01, with maturity value of $81,990 (Collateralized by various U.S. Treasury and Government backed Securities)............... 81,981 81,981 Goldman Sachs, 3.90%, 8/1/01, dated 7/31/01, with a maturity value of $34,004 (Collateralized by various U.S. Government backed Securities)............................ 34,000 34,000 Prudential, 3.90%, 8/1/01, dated 7/31/01, with a maturity value of $34,004 (Collateralized by various U.S. Treasury and Government backed Securities)........................ 34,000 34,000 Salomon Smith Barney, 3.90%, 8/1/01, dated 7/31/01, with a maturity value of $81,990 (Collateralized by various U.S. Treasury and Government backed Securities)............... 81,981 81,981 -------- TOTAL REPURCHASE AGREEMENTS............................... 231,962 -------- TOTAL INVESTMENTS (Cost $755,609) (a) -- 100.3%............................ 755,609 Liabilities in excess of other assets -- (0.3)%........... (2,428) -------- NET ASSETS -- 100.0%...................................... $753,181 ========
--------- (a) Cost and value for federal income tax and financial reporting purposes are the same. * Rates disclosed represent yield effective at purchase. PLC -- Public Limited Company 223 AMSOUTH FUNDS Institutional Prime Obligations Money Market Fund Statement of Assets and Liabilities July 31, 2001 (Amounts in thousands, except per share amounts) Assets: Investments, at value......... $523,647 Repurchase agreements, at cost.......... 231,962 -------- Total Investments.. 755,609 Interest and dividends receivable.... 25 Prepaid expenses and other assets.. 23 -------- Total Assets.. 755,657 Liabilities: Distributions payable....... $2,146 Accrued expenses and other payables: Investment advisory fees......... 44 Administration fees......... 12 Distribution fees......... 139 Custodian fees......... 17 Other......... 118 ------ Total Liabilities.. 2,476 -------- Net Assets: Capital........ 753,177 Accumulated net investment income........ 5 Accumulated net realized losses from investment transactions.. (1) -------- Net Assets..... $753,181 ======== Class I Shares Net Assets.... $221,876 Shares outstanding.. 221,876 Offering and redemption price per share........ $ 1.00 ======== Class II Shares Net Assets.... $361,629 Shares outstanding.. 361,629 Offering and redemption price per share........ $ 1.00 ======== Class III Shares Net Assets.... $169,676 Shares outstanding.. 169,677 Offering and redemption price per share........ $ 1.00 ========
Statement of Operations For the year ended July 31, 2001 (Amounts in thousands) Investment Income: Interest income................................................. $32,056 Dividend income................................................. 2 ------- Total Investment Income........................................ 32,058 Expenses: Investment advisory fees........................................ $1,172 Administration fees............................................. 586 Distribution fees -- Class II Shares............................ 616 Distribution fees -- Class III Shares........................... 722 Custodian fees.................................................. 161 Accounting fees................................................. 109 Transfer agent fees............................................. 135 Other fees...................................................... 187 ------ Total expenses before fee reductions........................... 3,688 ------- Expenses reduced by Investment Advisor......................... (762) Expenses reduced by Administrator.............................. (52) Expenses reduced by Fund Accountant............................ (78) ------- Net expenses................................................... 2,796 ------- Net Investment Income........................................... 29,262 ------- Change in net assets resulting from operations.................. $29,262 =======
See notes to financial statements 224 AMSOUTH FUNDS Institutional Prime Obligations Money Market Fund Statements of Changes in Net Assets
Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- (Amounts in thousands) From Investment Activities: Operations: Net investment income................................... $ 29,262 $ 14,515 Net realized losses from investment transactions........ -- (1) -------- -------- Change in net assets resulting from operations........... 29,262 14,514 -------- -------- Distributions to Class I Shareholders: From net investment income.............................. (9,991) (7,471) Distributions to Class II Shareholders: From net investment income.............................. (12,372) (4,334) Distributions to Class III Shareholders: From net investment income.............................. (6,899) (2,710) -------- -------- Change in net assets from shareholder distributions...... (29,262) (14,515) -------- -------- Change in net assets from capital transactions........... 319,128 325,021 -------- -------- Change in net assets..................................... 319,128 325,020 Net Assets: Beginning of period..................................... 434,053 109,033 -------- -------- End of period........................................... $753,181 $434,053 ======== ========
See notes to financial statements 225 AMSOUTH FUNDS Institutional Prime Obligations Money Market Fund Financial Highlights, Class I Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended July 31, July 31, July 31, 2001 2000 1999 (a) ---------- ---------- ------------ Net Asset Value, Beginning of Period...... $ 1.000 $ 1.000 $ 1.000 -------- -------- ------- Investment Activities Net investment income.................... 0.054 0.057 0.042 -------- -------- ------- Total from Investment Activities......... 0.054 0.057 0.042 -------- -------- ------- Distributions Net investment income.................... (0.054) (0.057) (0.042) -------- -------- ------- Total Distributions...................... (0.054) (0.057) (0.042) -------- -------- ------- Change in Net Asset Value................. -- -- -- -------- -------- ------- Net Asset Value, End of Period............ $ 1.000 $ 1.000 $ 1.000 ======== ======== ======= Total Return.............................. 5.57% 5.82% 4.31%(b) Ratios/Supplemental Data: Net Assets at end of period (000)......... $221,876 $138,779 $69,458 Ratio of expenses to average net assets... 0.25% 0.21% 0.22%(c) Ratio of net investment income to average net assets............................... 5.12% 5.73% 4.82%(c) Ratio of expenses to average net assets*.. 0.40% 0.41% 0.45%(c)
* During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. (a) For the period from September 15, 1998 (commencement of operations) through July 31, 1999. (b) Not annualized. (c) Annualized. Financial Highlights, Class II Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended July 31, July 31, July 31, 2001 2000 1999 (a) ---------- ---------- ------------ Net Asset Value, Beginning of Period...... $ 1.000 $ 1.000 $ 1.000 -------- -------- ------- Investment Activities Net investment income.................... 0.052 0.054 0.020 -------- -------- ------- Total from Investment Activities......... 0.052 0.054 0.020 -------- -------- ------- Distributions Net investment income.................... (0.052) (0.054) (0.020) -------- -------- ------- Total Distributions...................... (0.052) (0.054) (0.020) -------- -------- ------- Change in Net Asset Value................. -- -- -- -------- -------- ------- Net Asset Value, End of Period............ $ 1.000 $ 1.000 $ 1.000 ======== ======== ======= Total Return.............................. 5.31% 5.55% 1.96%(b) Ratios/Supplemental Data: Net Assets at end of period (000)......... $361,629 $180,873 $26,000 Ratio of expenses to average net assets... 0.50% 0.45% 0.49%(c) Ratio of net investment income to average net assets............................... 5.00% 5.69% 4.45%(c) Ratio of expenses to average net assets*.. 0.65% 0.66% 0.72%(c)
* During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. (a) For the period from February 19, 1999 (commencement of operations) through July 31, 1999. (b) Not annualized. (c) Annualized. See notes to financial statements 226 AMSOUTH FUNDS Institutional Prime Obligations Money Market Fund Financial Highlights, Class III Shares Selected data for a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended July 31, July 31, July 31, 2001 2000 1999 (a) ---------- ---------- ------------ Net Asset Value, Beginning of Period...... $ 1.000 $ 1.000 $ 1.000 -------- -------- ------- Investment Activities Net investment income.................... 0.049 0.052 0.018 -------- -------- ------- Total from Investment Activities......... 0.049 0.052 0.018 -------- -------- ------- Distributions Net investment income.................... (0.049) (0.052) (0.018) -------- -------- ------- Total Distributions...................... (0.049) (0.052) (0.018) -------- -------- ------- Change in Net Asset Value................. -- -- -- -------- -------- ------- Net Asset Value, End of Period............ $ 1.000 $ 1.000 $ 1.000 ======== ======== ======= Total Return.............................. 5.04% 5.29% 1.84%(b) Ratios/Supplemental Data: Net Assets at end of period (000)......... $169,676 $114,401 $13,575 Ratio of expenses to average net assets... 0.75% 0.71% 0.74%(c) Ratio of net investment income to average net assets............................... 4.81% 5.43% 4.22%(c) Ratio of expenses to average net assets*.. 0.90% 0.91% 0.97%(c)
* During the period, certain fees were reduced. If such fee reductions had not occurred, the ratios would have been as indicated. (a) For the period from February 22, 1999 (commencement of operations) through July 31, 1999. (b) Not annualized. (c) Annualized. See notes to financial statements 227 AMSOUTH FUNDS Notes to Financial Statements July 31, 2001 1. Organization: AmSouth Funds (the "Trust") was organized on October 1, 1987, and is registered under the Investment Company Act of 1940, as amended ("the 1940 Act"), as a diversified, open-end investment company established as a Massachusetts business trust. The Trust is authorized to issue an unlimited number of shares without par value. The Trust currently offers shares of the AmSouth Value Fund, the AmSouth Growth Fund, the AmSouth Capital Growth Fund, the AmSouth Large Cap Fund, the AmSouth Mid Cap Fund, the AmSouth Small Cap Fund, the AmSouth Equity Income Fund, the AmSouth Balanced Fund, the AmSouth Select Equity Fund, the AmSouth Enhanced Market Fund, the AmSouth International Equity Fund, the AmSouth Strategic Portfolios: Aggressive Growth Portfolio, the AmSouth Strategic Portfolios: Growth Portfolio, the AmSouth Strategic Portfolios: Growth and Income Portfolio, the AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio, the AmSouth Bond Fund, the AmSouth Limited Term Bond Fund, the AmSouth Government Income Fund, the AmSouth Limited Term U.S. Government Fund, the AmSouth Municipal Bond Fund, the AmSouth Florida Tax-Exempt Fund, the AmSouth Tennessee Tax-Exempt Fund, the AmSouth Limited Term Tennessee Tax- Exempt Fund, (collectively, "the variable net asset funds"), the AmSouth Prime Money Market Fund, the AmSouth U.S. Treasury Money Market Fund, the AmSouth Treasury Reserve Money Market Fund, the AmSouth Tax-Exempt Money Market Fund and the AmSouth Institutional Prime Obligations Money Market Fund (collectively, "the money market funds") (collectively, "the Funds" and individually "a Fund"). 2. Reorganization: The Funds entered into an Agreement and Plan of Reorganization with the ISG Funds pursuant to which all of the assets and liabilities of each ISG Fund transferred to a corresponding AmSouth Fund in exchange for shares of the AmSouth Fund. Each ISG Fund listed below transferred all of its assets and liabilities to the corresponding AmSouth Fund identified opposite its name in exchange for shares of such ISG Fund and changed its fiscal year end to July 31:
ISG Funds AmSouth Funds --------- ------------- ISG Capital Growth Fund AmSouth Capital Growth Fund ISG Large-Cap Equity Fund AmSouth Large Cap Fund ISG Mid-Cap Fund AmSouth Mid Cap Fund ISG Small-Cap Opportunity Fund AmSouth Small Cap Fund ISG Equity Income Fund AmSouth Equity Income Fund ISG International Equity Fund AmSouth International Equity Fund ISG Aggressive Growth Portfolio AmSouth Strategic Portfolios: Aggressive Growth Portfolio ISG Growth Portfolio AmSouth Strategic Portfolios: Growth Portfolio ISG Growth & Income Portfolio AmSouth Strategic Portfolios: Growth and Income Portfolio ISG Moderate Growth & Income Portfolio AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio ISG Income Fund AmSouth Bond Fund ISG Limited Term Income Fund AmSouth Limited Term Bond Fund ISG Government Income Fund AmSouth Government Income Fund ISG Limited Term U.S. Government Fund AmSouth Limited Term U.S. Government Fund ISG Municipal Income Fund AmSouth Municipal Bond Fund ISG Tennessee Tax-Exempt Fund AmSouth Tennessee Tax-Exempt Fund ISG Limited Term Tennessee Tax-Exempt Fund AmSouth Limited Term Tennessee Tax-Exempt Fund ISG Prime Money Market Fund AmSouth Prime Money Market Fund ISG Treasury Money Market Fund AmSouth Treasury Reserve Money Market Fund ISG Tax-Exempt Money Market Fund AmSouth Tax-Exempt Money Market Fund
Continued 228 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001 The reorganization, which qualified as a tax-free exchange for federal income tax purposes, was completed on March 13, 2000 and was approved by shareholders of the ISG Funds at a Special Meeting of Shareholders held on February 11, 2000. The following is a summary of shares outstanding, net assets, net asset value per share and unrealized appreciation (depreciation) immediately before and after the reorganization:
After Before Reorganization Reorganization --------------------------- -------------- ISG Capital AmSouth AmSouth Growth Capital Growth Capital Growth Fund Fund Fund ------------ -------------- -------------- Class A Shares ........................... 779,629 -- 779,629 Net Assets ....................... $ 10,814,963 $ -- $ 10,814,963 Net Asset Value................... $ 13.87 $ -- $ 13.87 Class B Shares ........................... 591,438 -- 591,438 Net Assets ....................... $ 7,949,059 $ -- $ 7,949,059 Net Asset Value................... $ 13.44 $ -- $ 13.44 Trust Shares ........................... 19,602,706 -- 19,602,706 Net Assets ....................... $270,349,507 $ -- $270,349,507 Net Asset Value................... $ 13.79 $ -- $ 13.79 Unrealized Appreciation ............ $ 35,279,850 $ -- $ 35,279,850 After Before Reorganization Reorganization --------------------------- -------------- ISG Large- Cap Equity AmSouth Large AmSouth Fund Cap Fund Large Cap Fund ------------ -------------- -------------- Class A Shares ........................... 2,806,201 -- 2,806,201 Net Assets ....................... $ 74,684,236 $ -- $ 74,684,236 Net Asset Value................... $ 26.61 $ -- $ 26.61 Class B Shares ........................... 771,877 -- 771,877 Net Assets ....................... $ 20,304,387 $ -- $ 20,304,387 Net Asset Value................... $ 26.31 $ -- $ 26.31 Trust Shares ........................... 25,140,642 -- 25,140,642 Net Assets ....................... $668,933,544 $ -- $668,933,544 Net Asset Value................... $ 26.61 $ -- $ 26.61 Unrealized Appreciation ............ $378,072,734 $ -- $378,072,734
Continued 229 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
After Before Reorganization Reorganization ------------------------- -------------- ISG AmSouth AmSouth Mid-Cap Mid Cap Mid Cap Fund Fund Fund ------------- ----------- -------------- Class A Shares ............................ 380,582 -- 380,582 Net Assets ........................ $ 8,292,145 $ -- $ 8,292,145 Net Asset Value.................... $ 21.79 $ -- $ 21.79 Class B Shares ............................ 364,887 -- 364,887 Net Assets ........................ $ 7,901,180 $ -- $ 7,901,180 Net Asset Value.................... $ 21.65 $ -- $ 21.65 Trust Shares ............................ 3,166,614 -- 3,166,614 Net Assets ........................ $69,051,431 $ -- $ 69,051,431 Net Asset Value.................... $ 21.81 $ -- $ 21.81 Unrealized Appreciation ............. $27,860,513 $ -- $ 27,860,513 After Before Reorganization Reorganization ------------------------- -------------- ISG Small-Cap AmSouth AmSouth Opportunity Small Cap Small Cap Fund Fund Fund ------------- ----------- -------------- Class A Shares ............................ 506,220 142,537 707,025 Net Assets ........................ $ 7,699,370 $ 1,943,789 $ 9,643,158 Net Asset Value.................... $ 15.21 $ 13.64 $ 13.64 Class B Shares ............................ 29,990 100,342 133,766 Net Assets ........................ $ 449,620 $ 1,349,633 $ 1,799,253 Net Asset Value.................... $ 14.99 $ 13.45 $ 13.45 Trust Shares ............................ 5,915,519 4,366,516 10,898,145 Net Assets ........................ $89,677,800 $59,967,533 $149,645,333 Net Asset Value.................... $ 15.16 $ 13.73 $ 13.73 Unrealized Appreciation.............. $20,902,693 $17,944,996 $ 38,847,689 Accumulated Net Realized Gains (Losses)............................ $(2,255,510) $ 1,300,016 $ (955,554)
The AmSouth Small Cap Fund retained its investment objective and financial history after the reorganization. Continued 230 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
After Before Reorganization Reorganization --------------------------- -------------- ISG Equity AmSouth Income Equity Income AmSouth Equity Fund Fund Income Fund ------------- ------------- -------------- Class A Shares........................... 569,793 1,954,224 2,277,671 Net Assets....................... $ 4,902,199 $29,607,765 $ 34,509,964 Net Asset Value.................. $ 8.60 $ 15.15 $ 15.15 Class B Shares........................... 727,946 878,275 1,293,141 Net Assets....................... $ 6,258,959 $13,249,379 $ 19,508,338 Net Asset Value.................. $ 8.60 $ 15.09 $ 15.09 Trust Shares........................... 7,905,530 2,210,708 6,700,591 Net Assets....................... $68,064,110 $33,514,860 $101,578,970 Net Asset Value.................. $ 8.61 $ 15.16 $ 15.16 Unrealized Appreciation............ $ 268,340 $10,112,984 $ 10,381,324 Undistributed Net Investment Income............................ $ 8,124 $ 11,205 $ 19,329 Accumulated Net Realized Gains (Losses).......................... $(1,414,076) $ 4,409,413 $ 2,995,337 The AmSouth Equity Income Fund retained its investment objective and financial history after the reorganization. After Before Reorganization Reorganization --------------------------- -------------- ISG AmSouth AmSouth International International International Equity Fund Equity Fund Equity Fund ------------- ------------- -------------- Class A Shares........................... 100,618 -- 100,618 Net Assets....................... $ 1,258,163 $ -- $ 1,258,163 Net Asset Value.................. $ 12.50 $ -- $ 12.50 Class B Shares........................... 34,916 -- 34,916 Net Assets....................... $ 433,831 $ -- $ 433,831 Net Asset Value.................. $ 12.43 $ -- $ 12.43 Trust Shares........................... 5,322,071 -- 5,322,071 Net Assets....................... $66,536,927 $ -- $ 66,536,927 Net Asset Value.................. $ 12.50 $ -- $ 12.50 Unrealized Appreciation............ $ 5,213,330 $ -- $ 5,213,330
Continued 231 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
After Before Reorganization Reorganization -------------------------------- ----------------- AmSouth Strategic AmSouth Strategic ISG Aggressive Portfolios: Portfolios: Growth Aggressive Growth Aggressive Growth Portfolio Portfolio Portfolio -------------- ----------------- ----------------- Class A Shares..................... 42,393 -- 42,393 Net Assets................. $ 491,154 $ -- $ 491,154 Net Asset Value............ $ 11.59 $ -- $ 11.59 Class B Shares..................... 45,939 -- 45,939 Net Assets................. $ 528,039 $ -- $ 528,039 Net Asset Value............ $ 11.49 $ -- $ 11.49 Trust Shares..................... 1,661,023 -- 1,661,023 Net Assets................. $19,221,990 $ -- $19,221,990 Net Asset Value............ $ 11.57 $ -- $ 11.57 Unrealized Appreciation...... $ 703,404 $ -- $ 703,404 After Before Reorganization Reorganization -------------------------------- ----------------- AmSouth Strategic AmSouth Strategic ISG Portfolios: Portfolios: Growth Growth Growth Portfolio Portfolio Portfolio -------------- ----------------- ----------------- Class A Shares..................... 23,006 -- 23,006 Net Assets................. $ 242,623 $ -- $ 242,623 Net Asset Value............ $ 10.55 $ -- $ 10.55 Class B Shares..................... 111,334 -- 111,334 Net Assets................. $ 1,171,560 $ -- $ 1,171,560 Net Asset Value............ $ 10.52 $ -- $ 10.52 Trust Shares..................... 2,835,625 -- 2,835,625 Net Assets................. $30,021,188 $ -- $30,021,188 Net Asset Value............ $ 10.59 $ -- $ 10.59 Unrealized Appreciation...... $ 291,685 $ -- $ 291,685
Continued 232 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
After Before Reorganization Reorganization --------------------------------- ----------------- AmSouth Strategic AmSouth Strategic ISG Portfolios: Portfolios: Growth & Income Growth and Income Growth and Income Portfolio Portfolio Portfolio --------------- ----------------- ----------------- Class A Shares.................... 49,048 -- 49,048 Net Assets................ $ 508,979 $ -- $ 508,979 Net Asset Value........... $ 10.38 $ -- $ 10.38 Class B Shares.................... 167,417 -- 167,417 Net Assets................ $ 1,737,834 $ -- $ 1,737,834 Net Asset Value........... $ 10.38 $ -- $ 10.38 Trust Shares.................... 8,303,516 -- 8,303,516 Net Assets................ $86,414,873 $ -- $86,414,873 Net Asset Value........... $ 10.41 $ -- $ 10.41 Unrealized Depreciation..... $(2,411,311) $ -- $(2,411,311) After Before Reorganization Reorganization --------------------------------- ----------------- AmSouth Strategic AmSouth Strategic Portfolios: Portfolios: ISG Moderate Moderate Growth Moderate Growth Growth & Income and Income and Income Portfolio Portfolio Portfolio --------------- ----------------- ----------------- Class A Shares.................... 14,049 -- 14,049 Net Assets................ $ 138,570 $ -- $ 138,570 Net Asset Value........... $ 9.86 $ -- $ 9.86 Class B Shares.................... 83,357 -- 83,357 Net Assets................ $ 821,149 $ -- $ 821,149 Net Asset Value........... $ 9.85 $ -- $ 9.85 Trust Shares.................... 2,194,361 -- 2,194,361 Net Assets................ $21,690,023 $ -- $21,690,023 Net Asset Value........... $ 9.88 $ -- $ 9.88 Unrealized Depreciation..... $ (656,338) $ -- $ (656,338)
Continued 233 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
After Before Reorganization Reorganization ------------------------- -------------- ISG Income AmSouth Bond AmSouth Bond Fund Fund Fund ----------- ------------ -------------- Class A Shares............................. 318,629 667,565 960,642 Net Assets......................... $ 3,032,083 $ 6,911,513 $ 9,943,596 Net Asset Value.................... $ 9.52 $ 10.35 $ 10.35 Class B Shares............................. 129,214 228,292 347,249 Net Assets......................... $ 1,228,472 $ 2,358,638 $ 3,587,110 Net Asset Value.................... $ 9.51 $ 10.33 $ 10.33 Trust Shares............................. 9,630,807 36,878,722 45,727,898 Net Assets......................... $91,584,025 $381,774,047 $473,358,072 Net Asset Value.................... $ 9.51 $ 10.35 $ 10.35 Unrealized Depreciation.............. $(4,461,982) $ (8,912,776) $(13,374,758) Accumulated Net Realized Losses...... $ (788,888) $ (986,569) $ (1,775,457) The AmSouth Bond Fund retained its investment objective and financial history after the reorganization. After Before Reorganization Reorganization ------------------------- -------------- ISG Limited AmSouth AmSouth Term Income Limited Term Limited Term Fund Bond Fund Bond Fund ----------- ------------ -------------- Class A Shares............................. 662,971 191,162 823,819 Net Assets......................... $ 6,362,409 $ 1,923,376 $ 8,285,785 Net Asset Value.................... $ 9.60 $ 10.06 $ 10.06 Class B Shares............................. 73,432 154,285 224,282 Net Assets......................... $ 703,619 $ 1,550,600 $ 2,254,219 Net Asset Value.................... $ 9.58 $ 10.05 $ 10.05 Trust Shares............................. 9,495,898 9,607,645 18,669,337 Net Assets......................... $91,125,732 $ 96,671,893 $187,797,625 Net Asset Value.................... $ 9.60 $ 10.06 $ 10.06 Unrealized Depreciation.............. $(2,282,663) $ (2,304,972) $ (4,587,635) Accumulated Net Realized Losses...... $ (455,223) $ (1,097,215) $ (1,522,438)
The AmSouth Limited Term Bond Fund retained its investment objective and financial history after the reorganization. Continued 234 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
After Before Reorganization Reorganization ----------------------------- --------------- ISG AmSouth AmSouth Government Government Government Income Fund Income Fund Income Fund ------------ --------------- --------------- Class A Shares.................. 339,412 384,924 728,990 Net Assets.............. $ 3,262,174 $3,649,318 $ 6,911,491 Net Asset Value......... $ 9.61 $ 9.48 $ 9.48 Class B Shares.................. 57,876 -- 58,486 Net Assets.............. $ 554,307 $ -- $ 554,307 Net Asset Value......... $ 9.58 $ -- $ 9.48 Trust Shares.................. 37,941,780 477,690 38,899,745 Net Assets.............. $364,289,541 $4,529,465 $368,819,006 Net Asset Value......... $ 9.60 $ 9.48 $ 9.48 Unrealized Depreciation... $ (8,765,840) $ (132,256) $ (8,898,096) Accumulated Net Realized Losses................... $ (2,904,252) $ (363,265) $ (3,267,517) The AmSouth Government Income Fund retained its investment objective and financial history after the reorganization. After Before Reorganization Reorganization ----------------------------- --------------- ISG Limited AmSouth Limited AmSouth Limited Term U.S. Term Term Government U.S. Government U.S. Government Fund Fund Fund ------------ --------------- --------------- Class A Shares.................. 364,995 -- 364,995 Net Assets.............. $ 3,585,943 $ -- $ 3,585,943 Net Asset Value......... $ 9.82 $ -- $ 9.82 Class B Shares.................. 42,704 -- 42,704 Net Assets.............. $ 419,745 $ -- $ 419,745 Net Asset Value......... $ 9.83 $ -- $ 9.83 Trust Shares.................. 4,158,949 -- 4,158,949 Net Assets.............. $ 40,856,623 $ -- $ 40,856,623 Net Asset Value......... $ 9.82 $ -- $ 9.82 Unrealized Depreciation... $ (1,117,721) $ -- $ (1,117,721)
Continued 235 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
After Before Reorganization Reorganization ------------------------------ --------------- ISG Municipal AmSouth AmSouth Income Municipal Municipal Fund Bond Fund Bond Fund -------------- --------------- --------------- Class A Shares....................... 210,434 417,146 635,513 Net Assets................... $ 2,084,576 $ 3,983,416 $ 6,067,992 Net Asset Value.............. $ 9.91 $ 9.55 $ 9.55 Class B Shares....................... 32,044 28,789 61,975 Net Assets................... $ 316,500 $ 274,706 $ 591,206 Net Asset Value.............. $ 9.88 $ 9.54 $ 9.54 Trust Shares....................... 3,549,511 37,084,082 40,767,397 Net Assets................... $35,161,855 $354,205,658 $389,367,513 Net Asset Value.............. $ 9.91 $ 9.55 $ 9.55 Unrealized Depreciation........ $(1,940,180) $ (6,216,118) $ (8,156,298) Accumulated Net Realized Gains (Losses)...................... $ (307,415) $ (26,244) $ (281,171) The AmSouth Municipal Bond Fund retained its investment objective and financial history after the reorganization. After Before Reorganization Reorganization ------------------------------ --------------- ISG AmSouth AmSouth Tennessee Tennessee Tennessee Tax-Exempt Tax-Exempt Tax-Exempt Fund Fund Fund -------------- --------------- --------------- Class A Shares....................... 333,704 -- 333,704 Net Assets................... $ 3,188,308 $ -- $ 3,188,308 Net Asset Value.............. $ 9.55 $ -- $ 9.55 Class B Shares....................... 114,856 -- 114,856 Net Assets................... $ 1,099,417 $ -- $ 1,099,417 Net Asset Value.............. $ 9.57 $ -- $ 9.57 Trust Shares....................... 7,645,018 -- 7,645,018 Net Assets................... $73,037,977 $ -- $ 73,037,977 Net Asset Value.............. $ 9.55 $ -- $ 9.55 Unrealized Depreciation........ $(2,069,545) $ -- $ (2,069,545) After Before Reorganization Reorganization ------------------------------ --------------- ISG Limited AmSouth Limited AmSouth Limited Term Tennessee Term Tennessee Term Tennessee Tax-Exempt Tax-Exempt Tax-Exempt Fund Fund Fund -------------- --------------- --------------- Class A Shares....................... 1,904,316 -- 1,904,316 Net Assets................... $18,428,450 $ -- $ 18,428,450 Net Asset Value.............. $ 9.68 $ -- $ 9.68 Class B Shares....................... 54,544 -- 54,544 Net Assets................... $ 527,557 $ -- $ 527,557 Net Asset Value.............. $ 9.67 $ -- $ 9.67 Unrealized Depreciation........ $ (562,144) $ -- $ (562,144)
Continued 236 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Before Reorganization After Reorganization ------------------------------- -------------------- ISG Prime AmSouth Prime Money Market Money Market AmSouth Prime Money Fund Fund Market Fund -------------- ---------------- -------------------- Class A Shares................. 454,104,522 216,565,899 670,670,421 Net Assets............. $454,062,155 $216,560,228 $670,622,383 Net Asset Value........ $ 1.00 $ 1.00 $ 1.00 Class B Shares................. 568,390 659,801 1,228,191 Net Assets............. $ 568,348 $ 659,801 $ 1,228,149 Net Asset Value........ $ 1.00 $ 1.00 $ 1.00 Trust Shares................. 280,189,093 556,247,163 836,436,256 Net Assets............. $280,170,931 $556,231,936 $836,402,867 Net Asset Value........ $ 1.00 $ 1.00 $ 1.00 Accumulated Net Realized Losses.................. $ (56,577) $ (6,231) $ (62,808) The AmSouth Prime Money Market Fund retained its investment objective and financial history after the reorganization. Before Reorganization After Reorganization ------------------------------- -------------------- ISG Treasury AmSouth Treasury AmSouth Treasury Money Market Reserve Money Reserve Money Market Fund Market Fund Fund -------------- ---------------- -------------------- Class A Shares................. 141,304,610 -- 141,304,610 Net Assets............. $141,297,122 $ -- $141,297,122 Net Asset Value........ $ 1.00 $ -- $ 1.00 Trust Shares................. 321,301,450 -- 321,301,450 Net Assets............. $321,287,256 $ -- $321,287,256 Net Asset Value........ $ 1.00 $ -- $ 1.00 Before Reorganization After Reorganization ------------------------------- -------------------- ISG Tax-Exempt AmSouth Tax- Money Market Exempt Money AmSouth Tax-Exempt Fund Market Fund Money Market Fund -------------- ---------------- -------------------- Class A Shares................. 4,913,597 51,851,926 56,765,523 Net Assets............. $ 4,901,137 $ 51,784,617 $ 56,685,754 Net Asset Value........ $ 1.00 $ 1.00 $ 1.00 Trust Shares................. 96,647,934 57,128,168 153,776,102 Net Assets............. $ 96,445,861 $ 57,010,917 $153,456,778 Net Asset Value........ $ 1.00 $ 1.00 $ 1.00 Accumulated Net Realized Losses.................. $ (213,700) $ (184,560) $ (398,260)
The AmSouth Tax-Exempt Money Market Fund retained its investment objective and financial history after the reorganization. The Funds also entered into an Agreement and Plan of Reorganization pursuant to which all of the assets and liabilities of the AmSouth Regional Equity Fund transferred to the AmSouth Value Fund in exchange for shares of the AmSouth Value Fund. Continued 237 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001 The reorganization, which qualified as a tax-free exchange for federal income tax purposes, was completed on March 13, 2000 and was approved by shareholders of the AmSouth Regional Equity Fund at a Special Meeting of Shareholders held on February 22, 2000. The following is a summary of shares outstanding, net assets, net asset value per share and unrealized appreciation (depreciation) immediately before and after the reorganization:
After Before Reorganization Reorganization ------------------------- -------------- AmSouth Regional AmSouth AmSouth Equity Fund Value Fund Value Fund ----------- ------------ -------------- Class A Shares............................. 615,920 2,511,863 2,926,161 Net Assets......................... $ 7,617,190 $ 46,196,200 $ 53,813,390 Net Asset Value.................... $ 12.37 $ 18.39 $ 18.39 Class B Shares............................. 29,790 473,298 493,136 Net Assets......................... $ 362,872 $ 8,657,687 $ 9,020,559 Net Asset Value.................... $ 12.18 $ 18.29 $ 18.29 Trust Shares............................. 1,786,915 31,177,615 32,378,290 Net Assets......................... $22,071,696 $572,917,610 $594,989,306 Net Asset Value.................... $ 12.35 $ 18.38 $ 18.38 Unrealized Appreciation.............. $ 633,400 $122,964,346 $123,597,746 Accumulated Net Realized Gains (Losses)............................ $ (2,981) $ 75,074 $ 72,093
The AmSouth Value Fund retained its investment objective and financial history after the reorganization. 3. 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 accounting principles generally accepted in the United States of America. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. Securities Valuation: Investments of the money market funds are valued at either amortized cost, which approximates market value, or at original cost which, combined with accrued interest, approximates market value. Under the amortized cost method, discount or premium is amortized on a constant basis to the maturity of the security. Investments in common stocks, corporate bonds, municipal bonds, commercial paper and U.S. Government securities of the variable net asset value funds are valued on the basis of valuations provided by dealers or an independent pricing service approved by the Board of Trustees. Investments in investment companies are valued at their net asset values as reported by such companies. The differences between cost and market values of such investments are reflected as unrealized appreciation or depreciation. Securities Transactions and Related Income: Securities transactions are accounted for on the date the security is purchased or sold (trade date). Interest income is recognized on the accrual basis and includes, where applicable, the pro rata amortization of premium or discount. Dividend income is recorded on the ex-dividend date. Realized gains or losses from sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds. Continued 238 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001 Financial Futures Contracts: The Enhanced Market Fund may invest in financial futures contracts for the purpose of hedging its existing portfolio securities, or securities that it intends to purchase, against fluctuations in fair value caused by changes in prevailing market interest rates. Upon entering into a financial futures contract, a Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as "variation margin," are made or received by a Fund each day, depending on the daily fluctuations in the fair value of the underlying security. A Fund recognizes a gain or loss equal to the daily variation margin. Should market conditions move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the underlying hedged assets. Repurchase Agreements: The Funds may acquire repurchase agreements from member banks of the Federal Deposit Insurance Corporation and from registered broker/dealers which AmSouth Investment Management Company, LLC ("AIMCO"), deems creditworthy under guidelines approved by the Board of Trustees, subject to the seller's agreement to repurchase such securities at a mutually agreed upon date and price. The repurchase price generally equals the price paid by the Funds plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller, under a repurchase agreement, is required to maintain the value of collateral held pursuant to the agreement at not less than the repurchase price (including accrued interest). Securities subject to repurchase agreements are held by the Funds' custodian or another qualified custodian or in the Federal Reserve/Treasury book-entry system. Foreign Currency Translation: The market value of investment securities, other assets and liabilities of the International Equity Fund denominated in a foreign currency are translated into U.S. dollars at the current exchange rate. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the exchange rate on the dates of the transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gains or losses from investments. Reported net realized foreign exchange gains or losses arise from sales and maturities of fund securities, sales of foreign currencies, currency exchange fluctuations between the trade and settlement dates of securities transactions, and the difference between the amounts of assets and liabilities recorded and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, including investments in securities, resulting from changes in currency exchange rates. Risks Associated with Foreign Securities and Currencies: Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of domestic issuers. Such risks include future political and economic developments and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability or diplomatic developments which could adversely affect investments in those countries. Certain countries may also impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers or industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available to the International Equity Fund or result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries. Continued 239 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001 Forward Currency Contracts: The International Equity Fund may enter into a forward currency contract ("forward") which is an agreement between two parties to buy and sell a currency at a set price on a future date. The market value of the forward fluctuates with changes in currency exchange rates. The forward is marked-to- market daily and the change in market value is recorded by the Fund as unrealized appreciation or depreciation. When the forward is closed, the Fund records a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. The Fund could be exposed to risk if a counterparty is unable to meet the terms of a forward or if the value of the currency changes unfavorably. Forwards may involve market or credit risk in excess of the amounts reflected on the Fund's statement of assets and liabilities. The gain or loss from the difference between the cost of original contracts and the amount realized upon the closing of such contracts is included in net realized gains/losses from investment and foreign currency transactions. Fluctuations in the value of forwards held are recorded for financial reporting purposes as unrealized gains and losses by the Fund. Financial Instruments: The Balanced Fund, Enhanced Market Fund, Equity Income Fund, Select Equity Fund, Bond Fund, International Equity Fund, Mid Cap Equity, Capital Growth Fund, and Large Cap Equity may write call options only on securities that are owned by the Fund ("covered calls"). A written call option gives a specified counter-party the right to require the writer of the option to deliver the agreed upon securities, at the agreed upon price, up until the expiration date specified in the contract. For this right, a premium is paid to the writer of the option. The premium received by the Fund for writing the option is booked as realized gains to the Fund. The risks associated with writing a covered call option are diminished compared to writing an uncovered call. The Fund does not bear the risk of having to purchase the securities in the open market at a price greater than the call price should the call option be exercised. Since the Fund owns the securities on which the call has been written, the Fund bears the risk of not receiving the fair market value of a security if the option is exercised. They would be required to sell the securities at the agreed upon price, which would presumably be lower than the fair market value of the securities if the option is exercised. The table below reflects the Equity Income Fund's activity in covered calls, all of which were for purposes of earning additional income, during the year ended July 31, 2001. The premiums column represents the premiums paid by the option counterparties to the Fund in connection with entering into the covered calls. Option activities for the year ended July 31, 2001:
Covered Call Options ------------------ Number of Options Premiums Contracts Received --------- -------- Contracts outstanding at July 31, 2000....................... 40 $49,378 Options written.............................................. 225 $29,699 Options expired.............................................. -- -- Options closed............................................... -- -- Options exercised............................................ 40 -- --- ------- Contracts outstanding at July 31, 2001....................... 225 $29,699 === =======
Securities Lending: To generate additional income, the Funds may lend up to 33 1/3% of total assets pursuant to agreements requiring that the loan be continuously secured by cash, U.S. government or U.S. government agency securities, shares of an investment trust or mutual fund, or any combination of cash and such securities as collateral equal at all times to at least 100% of the market value plus accrued interest on the securities loaned based on prior days closing market value. The Funds continue to earn interest and dividends on securities loaned while simultaneously seeking to earn interest on the investment of collateral. Continued 240 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001 When cash is received as collateral for securities loaned, the Funds may invest such cash in short-term U.S. government securities, repurchase agreements, or other short-term corporate securities. The cash or subsequent short-term investments are recorded as assets of the Funds, offset by a corresponding liability to repay the cash at the termination of the loan. Fixed income securities received as collateral are not recorded as an asset or liability of the Fund because the Fund does not have effective control of such securities. There may be risks of delay in recovery of the securities or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans will be made only to borrowers deemed by the Advisor to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in the judgment of the Advisor, the consideration which can be earned currently from such securities loans justifies the attendant risks. Loans are subject to termination by the Funds or the borrower at any time, and are, therefore, not considered to be illiquid investments. As of July 31, 2001, the following Funds had securities with the following market values on loan (amounts in thousands):
Market Market Value Value of of Loaned Collateral Securities ---------- ------------ Value Fund.............................................. $122,209 $118,250 Growth Fund............................................. 1,862 1,807 Capital Growth Fund..................................... 88,415 87,745 Large Cap Fund.......................................... 233,832 226,907 Mid Cap Fund............................................ 16,433 14,044 Small Cap Fund.......................................... 28,396 27,261 Equity Income Fund...................................... 31,495 27,983 Balanced Fund........................................... 27,752 27,093 Enhanced Market Fund.................................... 2,359 2,290 Bond Fund............................................... 276,746 224,662 Limited Term Bond Fund.................................. 14,770 14,480 Government Income Fund.................................. 135,404 65,202 Limited Term U.S. Government Fund....................... 3,618 3,584 U.S. Treasury Money Market Fund......................... 52,000 51,757 Treasury Reserve Money Market Fund...................... 48,000 47,778
The loaned securities were collateralized by cash which was invested in U.S. governement securities, commercial paper, investment companies, and repurchase agreements at July 31, 2001. Dividends to Shareholders: Dividends from net investment income are declared daily and paid monthly for the money market funds. Dividends from net investment income are declared and paid monthly for the variable net asset value funds, except for the International Equity Fund, which dividends are declared and paid annually. Distributable net realized gains, if any, are declared and distributed at least annually. The amounts of dividends from net investment income and of distributions from net realized gains are determined in accordance with federal income tax regulations which may differ from accounting principles generally accepted in the United States of America. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences do not require reclassification. To the extent they exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Continued 241 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001 Federal Income Taxes: It is the policy of each Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code (the "Code"), and to make distributions of net investment income and net realized capital gains sufficient to relieve it from all, or substantially all, federal income taxes. Other: Expenses that are directly related to one of the Funds are charged directly to that Fund. Other operating expenses for the Trust are prorated to all the Funds on the basis of relative net assets. Fees paid under a Fund's shareholder servicing or distribution plans are borne by the specific class of shares to which they apply. New Accounting Pronouncement: In November 2000 the American Institute of Certified Public Accountants (AICPA) issued a revised version of the AICPA Audit and Accounting Guide for Investment Companies ("the Guide"). The revised version of the Guide is effective for financial statements issued for fiscal years beginning after December 15, 2000. One of the new provisions in the Guide requires investment companies to amortize premiums and accrete discounts on fixed income securities. The Trust currently does not amortize premiums or accrete discounts in all cases. Upon adoption, the Funds will be required to record a cumulative effect adjustment to conform with accounting principles generally accepted in the United States of America. The effect of this adjustment will be to either increase or decrease net investment income with an offsetting decrease or increase on unrealized appreciation (depreciation) of securities. This adjustment will therefore have no effect on the net assets of the Funds. The Trust has completed an analysis of the change and deemed it immaterial to the Funds. 4.Purchases and Sales of Securities: Purchases and sales of securities (excluding short-term securities) for the year ended July 31, 2001 were as follows (amounts in thousands):
Purchases Sales --------- -------- Value Fund.................................................. $266,471 $326,947 Growth Fund................................................. 55,963 72,235 Capital Growth.............................................. 423,148 329,905 Large Cap Equity............................................ 68,382 162,872 Mid Cap Equity.............................................. 94,642 90,641 Small Cap Fund.............................................. 423,750 393,741 Equity Income Fund.......................................... 361,241 363,034 Balanced Fund............................................... 23,544 72,693 Select Equity Fund.......................................... 2,299 1,815 Enhanced Market Fund........................................ 25,514 30,179 International Equity Fund................................... 129,704 56,653 Aggressive Growth Portfolio................................. 16,534 7,665 Growth Portfolio............................................ 8,253 6,673 Growth and Income Portfolio................................. 42,084 41,057 Moderate Growth and Income Portfolio........................ 13,476 12,854 Bond Fund................................................... 243,793 140,632 Limited Term Bond Fund...................................... 75,946 96,765 Government Income Fund...................................... 78,681 104,952 Limited Term U.S. Government Fund........................... 11,002 17,274 Municipal Bond Fund......................................... 17,391 43,724 Florida Tax-Exempt Fund..................................... 4,256 9,842 Tennessee Tax-Exempt Fund................................... 76,339 89,825 Limited Term Tennessee Tax-Exempt........................... 15,066 18,867
Continued 242 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001 5.Capital Share Transactions: The Trust has issued three classes of Fund shares: Class A Shares, Trust Shares, and Class B Shares in the Prime Money Market Fund and the variable net asset funds. The Trust has issued three classes of fund shares in the Institutional Prime Obligations Money Market Fund: Class I, Class II and Class III. The Trust has issued two classes of Fund shares: Class A and Trust Shares in the Limited Term Tennessee Tax-Exempt Fund and the money market funds. Each class of shares in a Fund has identical rights and privileges except with respect to fees paid under shareholder servicing or distribution plans, expenses allocable exclusively to each class of shares, voting rights on matters affecting a single class of shares, and the exchange privilege of each class of shares. Continued 243 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001 Transactions in capital shares for the Funds were as follows (amounts in thousands):
Value Fund (a) Growth Fund (d) ---------------------- --------------------- Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, 2001 2000 2001 2000 ---------- ---------- ---------- ---------- CAPITAL TRANSACTIONS: Class A Shares (b): Proceeds from shares issued....... $ 75,760 $ 7,669 $ 981 $ 4,756 Proceeds from shares issued in connection with AmSouth Fund merger........................... -- 7,617 -- -- Dividends reinvested.............. 5,314 8,862 1,910 431 Cost of shares redeemed........... (16,930) (34,656) (4,414) (6,452) --------- --------- -------- -------- 64,144 (10,508) (1,523) (1,265) --------- --------- -------- -------- Class B Shares: Proceeds from shares issued....... 2,982 1,238 408 2,904 Proceeds from shares issued in connection with AmSouth Fund merger........................... -- 363 -- -- Dividends reinvested.............. 977 1,580 1,584 299 Cost of shares redeemed........... (2,052) (4,882) (1,771) (1,843) --------- --------- -------- -------- 1,907 (1,701) 221 1,360 --------- --------- -------- -------- Trust Shares (c): Proceeds from shares issued....... 145,846 105,206 6,895 24,237 Proceeds from shares issued in connection with AmSouth Common Trust Fund conversion............ 23,684 -- -- -- Proceeds from shares issued in connection with AmSouth Fund merger........................... -- 22,072 -- -- Dividends reinvested.............. 22,238 25,799 1,863 348 Cost of shares redeemed........... (223,926) (345,378) (15,107) (16,274) --------- --------- -------- -------- (32,158) (192,301) (6,349) 8,311 --------- --------- -------- -------- Total net increase (decrease) from capital transactions.............. $ 33,893 $(204,510) $ (7,651) $ 8,406 ========= ========= ======== ======== SHARE TRANSACTIONS: Class A Shares (b): Issued............................ 3,805 344 81 313 Issued in connection with AmSouth Fund merger...................... -- 414 -- -- Reinvested........................ 292 438 193 29 Redeemed.......................... (859) (1,682) (386) (427) --------- --------- -------- -------- 3,238 (486) (112) (85) --------- --------- -------- -------- Class B Shares: Issued............................ 151 55 37 194 Issued in connection with AmSouth Fund merger...................... -- 20 -- -- Reinvested........................ 54 79 165 21 Redeemed.......................... (103) (237) (175) (123) --------- --------- -------- -------- 102 (83) 27 92 --------- --------- -------- -------- Trust Shares (c): Issued............................ 7,809 5,000 617 1,587 Issued in connection with AmSouth Common Trust Fund conversion..... 1,283 -- -- -- Issued in connection with AmSouth Fund merger...................... -- 1,201 -- -- Reinvested........................ 1,226 1,275 186 24 Redeemed.......................... (11,236) (16,782) (1,317) (1,061) --------- --------- -------- -------- (918) (9,306) (514) 550 --------- --------- -------- -------- Total net increase (decrease) from share transactions................ 2,422 (9,875) (599) 557 ========= ========= ======== ========
--------- (a) Formerly AmSouth Equity Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. (d) Formerly AmSouth Capital Growth Fund. Continued 244 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Capital Growth Fund (a) ------------------------------------ Year Ended Period Ended Year Ended July 31, July 31, December 31, 2001 2000 (b) 1999 ---------- ------------ ------------ CAPITAL TRANSACTIONS: Class A Shares: Proceeds from shares issued.............. $ 60,744 $ 27,710 $ 6,307 Dividends reinvested..................... 1,060 -- 1,521 Cost of shares redeemed.................. (52,195) (24,349) (2,149) -------- -------- -------- 9,609 3,361 5,679 -------- -------- -------- Class B Shares: Proceeds from shares issued.............. 3,972 1,774 4,808 Dividends reinvested..................... 704 -- 1,079 Cost of shares redeemed.................. (1,553) (865) (938) -------- -------- -------- 3,123 909 4,949 -------- -------- -------- Trust Shares (c): Proceeds from shares issued.............. 156,398 116,255 79,575 Dividends reinvested..................... 18,101 12 37,171 Cost of shares redeemed.................. (75,627) (72,991) (53,058) -------- -------- -------- 98,872 43,276 63,688 -------- -------- -------- Total net increase (decrease) from capital transactions.................... $111,604 $ 47,546 $ 74,316 ======== ======== ======== SHARE TRANSACTIONS: Class A Shares: Issued................................... 4,871 1,838 428 Reinvested............................... 76 -- 110 Redeemed................................. (4,089) (1,611) (147) -------- -------- -------- 858 227 391 -------- -------- -------- Class B Shares: Issued................................... 321 126 332 Reinvested............................... 53 -- 81 Redeemed................................. (129) (61) (65) -------- -------- -------- 245 65 348 -------- -------- -------- Trust Shares (c): Issued................................... 12,384 8,063 5,482 Reinvested............................... 1,314 1 2,719 Redeemed................................. (6,116) (4,933) (3,581) -------- -------- -------- 7,582 3,131 4,620 -------- -------- -------- Total net increase (decrease) from share transactions............................. 8,685 3,423 5,359 ======== ======== ========
--------- (a) Formerly ISG Capital Growth Fund. (b) For the period from January 1, 2000 through July 31, 2000. (c) Formerly Institutional Shares. Continued 245 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Large Cap Fund (a) Mid Cap Fund (e) ------------------------------------- ------------------------------------- Year Ended Period Ended Year Ended Year Ended Period Ended Period Ended July 31, July 31, December 31, July 31, July 31, December 31, 2001 2000 (b) 1999 2001 2000 (b) 1999 (c) ---------- ------------ ------------ ---------- ------------ ------------ CAPITAL TRANSACTIONS: Class A Shares: Proceeds from shares issued................ $ 43,006 $ 26,077 $ 22,544 $ 104,956 $11,322 $ 1,820 Dividends reinvested... 10,043 33 8,796 -- -- -- Cost of shares redeemed.............. (45,828) (24,193) (11,009) (100,350) (1,254) (177) --------- --------- --------- --------- ------- ------- 7,221 1,917 20,331 4,606 10,068 1,643 --------- --------- --------- --------- ------- ------- Class B Shares: Proceeds from shares issued................ 11,911 8,640 17,650 5,046 12,303 1,738 Dividends reinvested... 3,613 -- 2,255 -- -- -- Cost of shares redeemed.............. (4,590) (2,555) (992) (2,156) (584) 28 --------- --------- --------- --------- ------- ------- 10,934 6,085 18,913 2,890 11,719 1,710 --------- --------- --------- --------- ------- ------- Trust Shares (d): Proceeds from shares issued................ 83,513 91,011 170,115 22,470 37,775 27,414 Dividends reinvested... 64,827 314 69,492 -- -- -- Cost of shares redeemed.............. (157,081) (107,181) (335,885) (26,363) (6,749) (729) --------- --------- --------- --------- ------- ------- (8,741) (15,856) (96,278) (3,893) 31,026 26,685 --------- --------- --------- --------- ------- ------- Total net increase (decrease) from capital transactions........... $ 9,414 $ (7,854) $ (57,034) $ 3,603 $52,813 $30,038 ========= ========= ========= ========= ======= ======= SHARE TRANSACTIONS: Class A Shares: Issued................. 1,780 906 791 7,497 629 150 Reinvested............. 407 1 320 -- -- -- Redeemed............... (1,920) (852) (381) (7,149) (73) (14) --------- --------- --------- --------- ------- ------- 267 55 730 348 556 136 --------- --------- --------- --------- ------- ------- Class B Shares: Issued................. 522 312 618 330 689 128 Reinvested............. 149 -- 83 -- -- -- Redeemed............... (202) (93) (35) (155) (33) (2) --------- --------- --------- --------- ------- ------- 469 219 666 175 656 126 --------- --------- --------- --------- ------- ------- Trust Shares (d): Issued................. 3,546 3,253 5,916 1,553 2,051 2,193 Reinvested............. 2,615 11 2,527 -- -- -- Redeemed............... (6,293) (3,813) (11,784) (1,919) (377) (52) --------- --------- --------- --------- ------- ------- (132) (549) (3,341) (366) 1,674 2,141 --------- --------- --------- --------- ------- ------- Total net increase (decrease) from share transactions........... 604 (275) (1,945) 157 2,886 2,403 ========= ========= ========= ========= ======= =======
--------- (a) Formerly ISG Large-Cap Equity Fund. (b) For the period from January 1, 2000 through July 31, 2000. (c) For the period from May 4, 1999 (commencement of operations) through December 31, 1999. (d) Formerly Institutional Shares. (e) Formerly ISG Mid-Cap Fund. Continued 246 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Small Cap Fund Equity Income Fund --------------------- --------------------- Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, 2001 2000 2001 2000 ---------- ---------- ---------- ---------- CAPITAL TRANSACTIONS: Class A Shares (a): Proceeds from shares issued....... $128,298 $ 77,911 $97,599 $ 22,503 Proceeds from shares issued in connection with ISG Fund merger.. -- 7,699 -- 4,902 Dividends reinvested.............. 725 -- 395 1,354 Cost of shares redeemed........... (126,966) (78,345) (89,043) (12,935) -------- -------- ------- -------- 2,057 7,265 8,951 15,824 -------- -------- ------- -------- Class B Shares: Proceeds from shares issued....... 1,529 1,400 11,721 15,851 Proceeds from shares issued in connection with ISG Fund merger.. -- 450 6,259 Dividends reinvested.............. 303 -- 188 524 Cost of shares redeemed........... (772) (439) (6,345) (2,667) -------- -------- ------- -------- 1,060 1,411 5,564 19,967 -------- -------- ------- -------- Trust Shares (b): Proceeds from shares issued....... 81,137 60,648 30,234 46,423 Proceeds from shares issued in connection with ISG Fund merger.. -- 89,678 -- 68,064 Dividends reinvested.............. 8,763 -- 331 431 Cost of shares redeemed........... (44,411) (15,098) (44,612) (17,135) -------- -------- ------- -------- 45,489 135,228 (14,047) 97,783 -------- -------- ------- -------- Total net increase (decrease) from capital transactions.............. $ 48,606 $143,904 $ 468 $133,574 ======== ======== ======= ======== SHARE TRANSACTIONS: Class A Shares (a): Issued............................ 10,745 6,120 7,143 1,502 Issued in connection with ISG Fund merger........................... -- 564 -- 324 Reinvested........................ 65 -- 29 100 Redeemed.......................... (10,657) (6,140) (6,448) (876) -------- -------- ------- -------- 153 544 724 1,050 -------- -------- ------- -------- Class B Shares: Issued............................ 132 109 824 1,067 Issued in connection with ISG Fund merger........................... -- 34 -- 415 Reinvested........................ 28 -- 13 39 Redeemed.......................... (71) (42) (472) (184) -------- -------- ------- -------- 89 101 365 1,337 -------- -------- ------- -------- Trust Shares (b): Issued............................ 7,197 4,995 2,096 3,157 Issued in connection with ISG Fund merger........................... -- 6,531 -- 4,490 Reinvested........................ 783 -- 24 32 Redeemed.......................... (3,941) (1,244) (3,310) (1,157) -------- -------- ------- -------- 4,039 10,282 (1,190) 6,522 -------- -------- ------- -------- Total net increase (decrease) from share transactions................ 4,281 10,927 (101) 8,909 ======== ======== ======= ========
--------- (a) Formerly Classic Shares. (b) Formerly Premier Shares. Continued 247 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Balanced Fund Select Equity Fund --------------------- --------------------- Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, 2001 2000 2001 2000 ---------- ---------- ---------- ---------- CAPITAL TRANSACTIONS: Class A Shares (a): Proceeds from shares issued..... $ 36,618 $ 1,091 $ 973 $ 436 Dividends reinvested............ 4,005 5,207 3 462 Cost of shares redeemed......... (7,226) (21,295) (1,428) (6,784) -------- --------- ------- ------- 33,397 (14,997) (452) (5,886) -------- --------- ------- ------- Class B Shares: Proceeds from shares issued..... 3,026 2,135 939 174 Dividends reinvested............ 791 1,412 -- 112 Cost of shares redeemed......... (1,941) (4,908) (267) (1,067) -------- --------- ------- ------- 1,876 (1,361) 672 (781) -------- --------- ------- ------- Trust Shares (b): Proceeds from shares issued..... 27,158 49,753 455 946 Dividends reinvested............ 5,486 20,079 11 516 Cost of shares redeemed......... (97,996) (171,356) (25) (4,398) -------- --------- ------- ------- (65,352) (101,524) 441 (2,936) -------- --------- ------- ------- Total net increase (decrease) from capital transactions....... $(30,079) $(117,882) $ 661 $(9,603) ======== ========= ======= ======= SHARE TRANSACTIONS: Class A Shares (a): Issued.......................... 2,898 80 92 44 Reinvested...................... 332 412 -- 48 Redeemed........................ (576) (1,628) (143) (667) -------- --------- ------- ------- 2,654 (1,136) (51) (575) -------- --------- ------- ------- Class B Shares: Issued.......................... 246 159 87 18 Reinvested...................... 66 112 -- 12 Redeemed........................ (155) (383) (27) (110) -------- --------- ------- ------- 157 (112) 60 (80) -------- --------- ------- ------- Trust Shares (b): Issued.......................... 2,206 3,819 43 85 Reinvested...................... 454 1,589 1 54 Redeemed........................ (7,782) (13,401) (2) (432) -------- --------- ------- ------- (5,122) (7,993) 42 (293) -------- --------- ------- ------- Total net increase (decrease) from share transactions......... (2,311) (9,241) 51 (948) ======== ========= ======= =======
--------- (a) Formerly Classic Shares. (b) Formerly Premier Shares. Continued 248 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Enhanced Market Fund International Equity Fund (c) --------------------- ------------------------------------ Year Ended Year Ended Year Ended Period Ended Year Ended July 31, July 31, July 31, July 31, December 31, 2001 2000 2001 2000 (d) 1999 ---------- ---------- ---------- ------------ ------------ CAPITAL TRANSACTIONS: Class A Shares (a): Proceeds from shares issued................ $ 12,063 $ 14,020 $ 24,793 $ 1,082 $ 926 Dividends reinvested... 285 635 51 3 -- Cost of shares redeemed.............. (5,181) (9,467) (23,561) (233) (185) -------- -------- -------- ------- ------- 7,167 5,188 1,283 852 741 -------- -------- -------- ------- ------- Class B Shares: Proceeds from shares issued................ 2,920 12,747 195 489 206(e) Dividends reinvested... 258 299 16 1 -- Cost of shares redeemed.............. (3,629) (2,613) (138) (98) -- -------- -------- -------- ------- ------- (451) 10,433 73 392 206 -------- -------- -------- ------- ------- Trust Shares (b): Proceeds from shares issued................ 7,190 27,362 130,169 68,781 16,408 Dividends reinvested... 235 465 2,396 296 -- Cost of shares redeemed.............. (18,735) (11,755) (58,463) (6,097) (6,232) -------- -------- -------- ------- ------- (11,310) 16,072 74,102 62,980 10,176 -------- -------- -------- ------- ------- Total net increase (decrease) from capital transactions........... $ (4,594) $ 31,693 $ 75,458 $64,224 $11,123 ======== ======== ======== ======= ======= SHARE TRANSACTIONS: Class A Shares (a): Issued................. 974 980 2,346 86 80 Reinvested............. 21 45 4 -- -- Redeemed............... (388) (657) (2,212) (19) (16) -------- -------- -------- ------- ------- 607 368 138 67 64 -------- -------- -------- ------- ------- Class B Shares: Issued................. 218 890 18 39 17(e) Reinvested............. 19 21 1 -- -- Redeemed............... (280) (179) (12) (8) -- -------- -------- -------- ------- ------- (43) 732 7 31 17 -------- -------- -------- ------- ------- Trust Shares (b): Issued................. 517 1,901 12,408 5,477 1,371 Reinvested............. 18 32 216 22 -- Redeemed............... (1,434) (804) (5,769) (482) (541) -------- -------- -------- ------- ------- (899) 1,129 6,855 5,017 830 -------- -------- -------- ------- ------- Total net increase (decrease) from share transactions........... (335) 2,229 7,000 5,115 911 ======== ======== ======== ======= =======
--------- (a) Formerly Classic Shares for Enhanced Market Fund. (b) Formerly Premier Shares for Enhanced Market Fund; formerly Institutional shares for International Equity Fund. (c) Formerly ISG International Equity Fund. (d) For the period from January 1, 2000 through July 31, 2000. (e) For the period from February 2, 1999 (commencement of operations) through December 31, 1999. Continued 249 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Strategic Portfolios: Strategic Portfolios: Aggressive Growth Portfolio (a) Growth Portfolio (g) ------------------------------------ ------------------------------------ Year Ended Period Ended Period Ended Year Ended Period Ended Period Ended July 31, July 31, December 31, July 31, July 31, December 31, 2001 2000 (b) 1999 (c) 2001 2000 (b) 1999 (h) ---------- ------------ ------------ ---------- ------------ ------------ CAPITAL TRANSACTIONS: Class A Shares: Proceeds from shares issued................ $ 1,378 $ 86 $ 413 $ 446 $ 760 $ 162(i) Dividends reinvested... 57 5 1 66 3 -- Cost of shares redeemed.............. (444) (66) (8) (206) (149) (9)(i) ------- ------- ------- ------- -------- ------- 991 25 406 306 614 153 ------- ------- ------- ------- -------- ------- Class B Shares: Proceeds from shares issued................ 88 99 504(d) 606 353 987(j) Dividends reinvested... 43 4 1(d) 99 15 6(j) Cost of shares redeemed.............. (76) (168) (117)(d) (100) (111) (54)(j) ------- ------- ------- ------- -------- ------- 55 (65) 388 605 257 939 ------- ------- ------- ------- -------- ------- Trust Shares (f): Proceeds from shares issued................ 11,576 4,011 21,605(e) 3,450 26,486 12,019 Dividends reinvested... 2,295 229 37(e) 1,287 235 41 Cost of shares redeemed.............. (7,509) (2,565) (4,903)(e) (4,126) (18,779) (1,370) ------- ------- ------- ------- -------- ------- 6,362 1,675 16,739 611 7,942 10,690 ------- ------- ------- ------- -------- ------- Total net increase (decrease) from capital transactions........... $ 7,408 $ 1,635 $17,533 $ 1,522 $ 8,813 $11,782 ======= ======= ======= ======= ======== ======= SHARE TRANSACTIONS: Class A Shares: Issued................. 138 7 40 47 71 16(i) Reinvested............. 5 -- -- 7 -- -- Redeemed............... (44) (5) -- (22) (14) -- ------- ------- ------- ------- -------- ------- 99 2 40 32 57 16 ------- ------- ------- ------- -------- ------- Class B Shares: Issued................. 9 9 51(d) 64 34 99(j) Reinvested............. 4 -- -- 10 1 -- Redeemed............... (7) (15) (11)(d) (10) (11) (5)(j) ------- ------- ------- ------- -------- ------- 6 (6) 40 64 24 94 ------- ------- ------- ------- -------- ------- Trust Shares (f): Issued................. 1,084 347 2,101(e) 351 2,518 1,205 Reinvested............. 213 20 4(e) 129 22 4 Redeemed............... (721) (223) (470)(e) (419) (1,756) (138) ------- ------- ------- ------- -------- ------- 576 144 1,635 61 784 1,071 ------- ------- ------- ------- -------- ------- Total net increase (decrease) from share transactions........... 681 140 1,715 157 865 1,181 ======= ======= ======= ======= ======== =======
--------- (a) Formerly ISG Aggressive Growth Portfolio. (b) For the period January 1, 2000 through July 31, 2000. (c) For the period from January 13, 1999 (commencement of operations) through December 31, 1999. (d) For the period from January 27, 1999 (commencement of operations) through December 31, 1999. (e) For the period from January 28, 1999 (commencement of operations) through December 31, 1999. (f) Formerly Institutional Shares. (g) Fomerly ISG Growth Portfolio. (h) For the period from February 1, 1999 (commencement of operations) through December 31, 1999. (i) For the period from February 11, 1999 (commencement of operations) through December 31, 1999. (j) For the period from February 15, 1999 (commencement of operations) through December 31, 1999. Continued 250 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Strategic Portfolios: Strategic Portfolios: Moderate Growth and Income Portfolio Growth and Income Portfolio (a) (g) ------------------------------------ ------------------------------------ Year Ended Period Ended Period Ended Year Ended Period Ended Period Ended July 31, July 31, December 31, July 31, July 31, December 31, 2001 2000 (b) 1999 (c) 2001 2000 (b) 1999 (h) ---------- ------------ ------------ ---------- ------------ ------------ CAPITAL TRANSACTIONS: Class A Shares: Proceeds from shares issued................ $ 6,905 $ 35 $ 542(d) $ 214 $ 8 $ 171(i) Dividends reinvested... 58 9 2(d) 4 1 -- Cost of shares redeemed.............. (623) (313) (31)(d) (32) (134) -- -------- -------- ------- ------- ------- ------- 6,340 (269) 513 186 (125) 171 -------- -------- ------- ------- ------- ------- Class B Shares: Proceeds from shares issued................ 292 152 1,975 470 152 1,027 Dividends reinvested... 113 22 4 59 17 8 Cost of shares redeemed.............. (244) (297) (318) (109) (282) (100) -------- -------- ------- ------- ------- ------- 161 (123) 1,661 420 (113) 935 -------- -------- ------- ------- ------- ------- Trust Shares (f): Proceeds from shares issued................ 13,644 15,744 88,893(e) 4,064 3,506 27,552(j) Dividends reinvested... 6,995 1,749 140(e) 1,529 522 93(j) Cost of shares redeemed.............. (26,632) (17,178) (6,248)(e) (4,782) (5,529) (6,667)(j) -------- -------- ------- ------- ------- ------- (5,993) 315 82,785 811 (1,501) 20,978 -------- -------- ------- ------- ------- ------- Total net increase (decrease) from capital transactions........... $ 508 $ (77) $84,959 $ 1,417 $(1,739) $22,084 ======== ======== ======= ======= ======= ======= SHARE TRANSACTIONS: Class A Shares: Issued................. 700 3 54(d) 22 1 17(i) Reinvested............. 6 1 -- -- -- -- Redeemed............... (63) (29) (3)(d) (3) (13) -- -------- -------- ------- ------- ------- ------- 643 (25) 51 19 (12) 17 -------- -------- ------- ------- ------- ------- Class B Shares: Issued................. 30 15 195 49 15 104 Reinvested............. 11 2 -- 6 2 1 Redeemed............... (24) (28) (31) (11) (29) (10) -------- -------- ------- ------- ------- ------- 17 (11) 164 44 (12) 95 -------- -------- ------- ------- ------- ------- Trust Shares (f): Issued................. 1,330 1,495 8,840(e) 416 352 2,818(j) Reinvested............. 693 165 14(e) 156 52 9(j) Redeemed............... (2,662) (1,630) (604)(e) (489) (554) (684)(j) -------- -------- ------- ------- ------- ------- (639) 30 8,250 83 (150) 2,143 -------- -------- ------- ------- ------- ------- Total net increase (decrease) from share transactions........... 21 (6) 8,465 146 (174) 2,255 ======== ======== ======= ======= ======= =======
--------- (a) Formerly ISG Growth & Income Portfolio. (b) For the period from January 1, 2000 through July 31, 2000. (c) For the period from January 27, 1999 (commencement of operations) through December 31, 1999. (d) For the period from March 8, 1999 (commencement of operations) through December 31, 1999. (e) For the period from February 8, 1999 (commencement of operations) through December 31, 1999. (f) Formerly Institutional Shares. (g) Fomerly ISG Moderate Growth & Income Portfolio. (h) For the period from January 28, 1999 (commencement of operations) through December 31, 1999. (i) For the period from February 9, 1999 (commencement of operations) through December 31, 1999. (j) For the period from February 10, 1999 (commencement of operations) through December 31, 1999. Continued 251 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Bond Fund ---------------------- Year Ended Year Ended July 31, July 31, 2001 2000 ---------- ---------- CAPITAL TRANSACTIONS: Class A Shares (a): Proceeds from shares issued............................. $ 11,752 $ 2,266 Proceeds from shares issued in connection with ISG Fund merger................................................. -- 3,032 Dividends reinvested.................................... 477 351 Cost of shares redeemed................................. (5,478) (3,188) --------- -------- 6,751 2,461 --------- -------- Class B Shares: Proceeds from shares issued............................. 5,266 1,265 Proceeds from shares issued in connection with ISG Fund merger................................................. -- 1,228 Dividends reinvested.................................... 143 89 Cost of shares redeemed................................. (1,954) (1,468) --------- -------- 3,455 1,114 --------- -------- Trust Shares (b): Proceeds from shares issued............................. 196,661 112,521 Proceeds from shares issued in connection with ISG Fund merger................................................. -- 91,584 Dividends reinvested.................................... 8,356 5,659 Cost of shares redeemed................................. (129,636) (86,602) --------- -------- 75,381 123,162 --------- -------- Total net increase (decrease) from capital transactions.. $ 85,587 $126,737 ========= ======== SHARE TRANSACTIONS: Class A Shares (a): Issued.................................................. 1,073 216 Issued in connection with ISG Fund merger............... -- 293 Reinvested.............................................. 44 34 Redeemed................................................ (503) (305) --------- -------- 614 238 --------- -------- Class B Shares: Issued.................................................. 480 121 Issued in connection with ISG Fund merger............... -- 119 Reinvested.............................................. 13 9 Redeemed................................................ (178) (141) --------- -------- 315 108 --------- -------- Trust Shares (b): Issued.................................................. 18,210 10,782 Issued in connection with ISG Fund merger............... -- 8,849 Reinvested.............................................. 770 542 Redeemed................................................ (11,865) (8,285) --------- -------- 7,115 11,888 --------- -------- Total net increase (decrease) from share transactions.... 8,044 12,234 ========= ========
--------- (a) Formerly Classic Shares. (b) Formerly Premier Shares. Continued 252 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Limited Term Bond Government Income Fund (a) Fund --------------------- ---------------------- Year Ended Year Ended Year Ended Year Ended July 31, July 31, July 31, July 31, 2001 2000 2001 2000 ---------- ---------- ---------- ---------- CAPITAL TRANSACTIONS: Class A Shares (b): Proceeds from shares issued.... $ 4,178 $ 929 $ 3,268 $ 589 Proceeds from shares issued in connection with ISG Fund merger........................ -- 6,362 -- 3,262 Dividends reinvested........... 310 229 185 165 Cost of shares redeemed........ (2,803) (2,319) (3,955) (3,604) -------- -------- --------- -------- 1,685 5,201 (502) 412 -------- -------- --------- -------- Class B Shares: Proceeds from shares issued.... 976 950 1,369 109(d) Proceeds from shares issued in connection with ISG Fund merger........................ -- 704 -- 554(d) Dividends reinvested........... 62 79 23 5(d) Cost of shares redeemed........ (315) (1,484) (313) (154)(d) -------- -------- --------- -------- 723 249 1,079 514 -------- -------- --------- -------- Trust Shares (c): Proceeds from shares issued.... 41,363 18,012 51,502 23,598 Proceeds from shares issued in connection with ISG Fund merger........................ -- 91,126 -- 364,290 Dividends reinvested........... 2,521 1,363 10,410 4,392 Cost of shares redeemed........ (72,744) (41,746) (132,841) (43,484) -------- -------- --------- -------- (28,860) 68,755 (70,929) 348,796 -------- -------- --------- -------- Total net increase (decrease) from capital transactions...... $(26,452) $ 74,205 $ (70,352) $349,722 ======== ======== ========= ======== SHARE TRANSACTIONS: Class A Shares (b): Issued......................... 401 91 328 62 Issued in connection with ISG Fund merger................... -- 633 -- 344 Reinvested..................... 30 23 19 17 Redeemed....................... (271) (230) (397) (376) -------- -------- --------- -------- 160 517 (50) 47 -------- -------- --------- -------- Class B Shares: Issued......................... 93 93 137 12(d) Issued in connection with ISG Fund merger................... -- 70 -- 58(d) Reinvested..................... 6 8 2 -- Redeemed....................... (31) (147) (31) (16)(d) -------- -------- --------- -------- 68 24 108 54 -------- -------- --------- -------- Trust Shares (c): Issued......................... 3,976 1,781 5,182 2,474 Issued in connection with ISG Fund merger................... -- 9,061 -- 38,422 Reinvested..................... 244 135 1,054 461 Redeemed....................... (7,003) (4,123) (13,453) (4,555) -------- -------- --------- -------- (2,783) 6,854 (7,217) 36,802 -------- -------- --------- -------- Total net increase (decrease) from share transactions........ (2,555) 7,395 (7,159) 36,903 ======== ======== ========= ========
--------- (a) Formerly AmSouth Limited Maturity Fund. (b) Formerly Classic Shares. (c) Formerly Premier Shares. (d) For the period from March 13, 2000 (commencement of operations) through July 31, 2000. Continued 253 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Limited Term U.S. Government Fund (a) Municipal Bond Fund ------------------------------------ --------------------- Year Ended Period Ended Year Ended Year Ended Year Ended July 31, July 31, December 31, July 31, July 31, 2001 2000 (b) 1999 2001 2000 ---------- ------------ ------------ ---------- ---------- CAPITAL TRANSACTIONS: Class A Shares (c): Proceeds from shares issued................ $ 221 $ 769 $ 2,403 $ 4,656 $ 3,905 Proceeds from shares issued in connection with ISG Fund merger.. -- -- -- -- 2,085 Dividends reinvested... 74 61 95 165 129 Cost of shares redeemed.............. (1,212) (626) (1,248) (3,578) (2,348) -------- ------- -------- -------- -------- (917) 204 1,250 1,243 3,771 -------- ------- -------- -------- -------- Class B Shares: Proceeds from shares issued................ 705 16 379 1,207 554 Proceeds from shares issued in connection with ISG Fund merger.. -- -- -- -- 317 Dividends reinvested... 14 6 14 26 10 Cost of shares redeemed.............. (374) (107) (341) (389) (20) -------- ------- -------- -------- -------- 345 (85) 52 844 861 -------- ------- -------- -------- -------- Trust Shares (d): Proceeds from shares issued................ 3,313 1,347 8,315 39,296 91,946 Proceeds from shares issued in connection with ISG Fund merger.. -- -- -- -- 35,162 Dividends reinvested... 645 566 765 280 334 Cost of shares redeemed.............. (10,502) (6,687) (11,377) (63,032) (59,488) -------- ------- -------- -------- -------- (6,544) (4,774) (2,297) (23,456) 67,954 -------- ------- -------- -------- -------- Total net increase (decrease) from capital transactions........... $ (7,116) $(4,655) $ (995) $(21,369) $ 72,586 ======== ======= ======== ======== ======== SHARE TRANSACTIONS: Class A Shares (c): Issued................. 22 78 240 461 406 Issued in connection with ISG Fund merger.. -- -- -- -- 219 Reinvested............. 7 6 9 17 13 Redeemed............... (120) (64) (125) (357) (244) -------- ------- -------- -------- -------- (91) 20 124 121 394 -------- ------- -------- -------- -------- Class B Shares: Issued................. 69 2 38 120 57 Issued in connection with ISG Fund merger.. -- -- -- -- 33 Reinvested............. 1 -- 1 3 1 Redeemed............... (36) (11) (34) (39) (2) -------- ------- -------- -------- -------- 34 (9) 5 84 89 -------- ------- -------- -------- -------- Trust Shares (d): Issued................. 329 137 826 3,916 9,577 Issued in connection with ISG Fund merger.. -- -- -- -- 3,683 Reinvested............. 64 58 76 28 35 Redeemed............... (1,047) (681) (1,129) (6,285) (6,181) -------- ------- -------- -------- -------- (654) (486) (227) (2,341) 7,114 -------- ------- -------- -------- -------- Total net increase (decrease) from share transactions........... (711) (475) (98) (2,136) 7,597 ======== ======= ======== ======== ========
--------- (a) Formerly ISG Limited Term U.S. Government Fund. (b) For the period from January 1, 2000 through July 31, 2000. (c) Formerly Classic Shares for Municipal Bond Fund. (d) Formerly Institutional Shares for Limited Term U.S. Government Fund; formerly Premier Shares for Municipal Bond Fund. Continued 254 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Florida Tax-Exempt Tennessee Tax-Exempt Fund (a) Fund (e) --------------------- ------------------------------------ Year Ended Year Ended Year Ended Period Ended Year Ended July 31, July 31, July 31, July 31, December 31, 2001 2000 2001 2000 (f) 1999 ---------- ---------- ---------- ------------ ------------ CAPITAL TRANSACTIONS: Class A Shares (b): Proceeds from shares issued................ $ 673 $ 83 $ 2,899 $ 1,040 $ 1,950 Dividends reinvested... 100 236 39 35 44 Cost of shares redeemed.............. (266) (9,694) (2,234) (1,545) (1,382) -------- -------- -------- -------- -------- 507 (9,375) 704 (470) 612 -------- -------- -------- -------- -------- Class B Shares: Proceeds from shares issued................ 653 255 624 16 288 Dividends reinvested... 7 6 24 15 21 Cost of shares redeemed.............. (31) (100) (302) (285) (322) -------- -------- -------- -------- -------- 629 161 346 (254) (13) -------- -------- -------- -------- -------- Trust Shares (c): Proceeds from shares issued................ 6,891 13,793 3,296 803 5,061 Dividends reinvested... 18 8 24 256 107 Cost of shares redeemed.............. (13,604) (15,043) (13,978) (12,797) (15,822) -------- -------- -------- -------- -------- (6,695) (1,242) (10,658) (11,738) (10,654) -------- -------- -------- -------- -------- Total net increase (decrease) from capital transactions........... $ (5,559) $(10,456) $ (9,608) $(12,462) $(10,055) ======== ======== ======== ======== ======== SHARE TRANSACTIONS: Class A Shares (b): Issued................. 65 8 293 108 196 Reinvested............. 9 24 4 4 4 Redeemed............... (25) (964) (224) (160) (139) -------- -------- -------- -------- -------- 49 (932) 73 (48) 61 -------- -------- -------- -------- -------- Class B Shares: Issued................. 62 25 62 2 29 Reinvested............. 1 1 3 1 2 Redeemed............... (3) (10) (31) (30) (33) -------- -------- -------- -------- -------- 60 16 34 (27) (2) -------- -------- -------- -------- -------- Trust Shares (c): Issued................. 662 1,375 333 84 503 Reinvested............. 2 1 2 27 11 Redeemed............... (1,315) (1,507) (1,410) (1,336) (1,599) -------- -------- -------- -------- -------- (651) (131) (1,075) (1,225) (1,085) -------- -------- -------- -------- -------- Total net increase (decrease) from share transactions.......... (542) (1,047) (968) (1,300) (1,026) ======== ======== ======== ======== ========
--------- (a) Formerly AmSouth Florida Tax-Free Fund. (b) Formerly Classic Shares for Florida Tax-Exempt Fund. (c) Formerly Premier Shares for Florida Tax-Exempt Fund; formerly Institutional Shares for Tennessee Tax-Exempt Fund. (d) For the period from March 16, 1999 (commencement of operations) through July 31, 1999. (e) Formerly ISG Tennessee Tax-Exempt Fund. (f) For the period from January 1, 2000 through July 31, 2000. Continued 255 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Limited Term Tennessee Tax- Prime Exempt Fund (a) Money Market Fund (c) ------------------------------------ ------------------------ Year Ended Period Ended Year Ended Year Ended Year Ended July 31, July 31, December 31, July 31, July 31, 2001 2000 (b) 1999 2001 2000 ---------- ------------ ------------ ----------- ----------- CAPITAL TRANSACTIONS: Class A Shares (d): Proceeds from shares issued................ $ 1,307 $ 1,283 $ 5,159 $ 1,013,766 $ 656,332 Proceeds from shares issued in connection with ISG Fund merger.. -- -- -- -- 454,062 Dividends reinvested... 23 64 32 27,872 15,105 Cost of shares redeemed.............. (4,364) (5,408) (4,446) (1,121,937) (616,302) ------- ------- ------- ----------- ----------- (3,034) (4,061) 745 (80,299) 509,197 ------- ------- ------- ----------- ----------- Class B Shares: Proceeds from shares issued................ 281 -- 205 2,139 1,043 Proceeds from shares issued in connection with ISG Fund merger.. -- -- -- -- 568 Dividends reinvested... 6 5 11 40 23 Cost of shares redeemed.............. (156) (332) (301) (997) (1,131) ------- ------- ------- ----------- ----------- 131 (327) (85) 1,182 503 ------- ------- ------- ----------- ----------- Trust Shares (e): Proceeds from shares issued................ -- -- -- 2,684,111 2,189,421 Proceeds from shares issued in connection with ISG Fund merger.. -- -- -- -- 280,171 Dividends reinvested... -- -- -- 4,155 3,036 Cost of shares redeemed.............. -- -- -- (2,674,366) (2,277,765) ------- ------- ------- ----------- ----------- -- -- -- 13,900 194,863 ------- ------- ------- ----------- ----------- Total net increase (decrease) from capital transactions........... $(2,903) $(4,388) $ 660 $ (65,217) $ 704,563 ======= ======= ======= =========== =========== SHARE TRANSACTIONS: Class A Shares (d): Issued................. 131 132 518 1,013,768 656,329 Issued in connection with ISG Fund merger.. -- -- -- -- 454,104 Reinvested............. 2 7 3 27,872 15,105 Redeemed............... (438) (559) (446) (1,121,936) (616,302) ------- ------- ------- ----------- ----------- (305) (420) 75 (80,296) 509,236 ------- ------- ------- ----------- ----------- Class B Shares: Issued................. 28 -- 20 2,138 1,043 Issued in connection with ISG Fund merger.. -- -- -- -- 568 Reinvested............. 1 1 1 40 23 Redeemed............... (16) (35) (31) (997) (1,131) ------- ------- ------- ----------- ----------- 13 (34) (10) 1,181 503 ------- ------- ------- ----------- ----------- Trust Shares (e): Issued................. -- -- -- 2,684,112 2,189,421 Issued in connection with ISG Fund merger.. -- -- -- -- 280,189 Reinvested............. -- -- -- 4,155 3,036 Redeemed............... -- -- -- (2,674,366) (2,277,765) ------- ------- ------- ----------- ----------- -- -- -- 13,901 194,881 ------- ------- ------- ----------- ----------- Total net increase (decrease) from share transactions........... (292) (454) 65 (65,214) 704,620 ------- ------- ------- ----------- -----------
--------- (a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund. (b) For the period from January 1, 2000 through July 31, 2000. (c) Formerly AmSouth Prime Obligations Fund. (d) Formerly Classic Shares for Prime Money Market Fund. (e) Formerly Premier Shares for Prime Money Market Fund. Continued 256 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
U.S. Treasury Treasury Reserve Money Market Money Market Fund (a) Fund (d) ---------------------- ------------------------------------- Year Ended Year Ended Year Ended Period Ended Year Ended July 31, July 31, July 31, July 31, December 31, 2001 2000 2001 2000 (e) 1999 ---------- ---------- ---------- ------------ ------------ CAPITAL TRANSACTIONS: Class A Shares (b): Proceeds from shares issued................ $ 176,331 $ 31,035 $ 461,649 $ 191,826 $ 541,860 Dividends reinvested... 513 265 627 790 893 Cost of shares redeemed.............. (87,536) (23,874) (506,401) (191,924) (567,020) --------- --------- --------- --------- --------- 89,308 7,426 (44,125) 692 (24,267) --------- --------- --------- --------- --------- Trust Shares (c): Proceeds from shares issued................ 589,335 705,296 640,341 299,903 605,138 Dividends reinvested... 216 191 862 1,412 277 Cost of shares redeemed.............. (677,007) (739,461) (655,010) (362,572) (573,590) --------- --------- --------- --------- --------- (87,456) (33,974) (13,807) (61,257) 31,825 --------- --------- --------- --------- --------- Total net increase (decrease) from capital transactions........... $ 1,852 $ (26,548) $ (57,932) $ (60,565) $ 7,558 ========= ========= ========= ========= ========= SHARE TRANSACTIONS: Class A Shares (b): Issued................. 176,331 31,035 461,649 191,826 541,860 Reinvested............. 513 265 627 790 893 Redeemed............... (87,536) (23,874) (506,401) (191,924) (567,020) --------- --------- --------- --------- --------- 89,308 7,426 (44,125) 692 (24,267) --------- --------- --------- --------- --------- Trust Shares (c): Issued................. 589,336 705,296 640,341 299,903 605,138 Reinvested............. 216 191 862 1,412 277 Redeemed............... (677,007) (739,461) (655,012) (362,572) (573,590) --------- --------- --------- --------- --------- (87,455) (33,974) (13,809) (61,257) 31,825 --------- --------- --------- --------- --------- Total net increase (decrease) from share transactions........... 1,853 (26,548) (57,934) (60,565) 7,558 ========= ========= ========= ========= =========
--------- (a) Formerly AmSouth U.S. Treasury Fund. (b) Formerly Classic Shares for U.S. Treasury Money Market Fund. (c) Formerly Premier Shares for U.S. Treasury Money Market Fund; formerly Institutional Shares for Treasury Reserve Money Market Fund. (d) Formerly ISG Treasury Money Market Fund. (e) For the period from January 1, 2000 through July 31, 2000. Continued 257 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Tax-Exempt Institutional Prime Obligations Money Market Fund (a) Money Market Fund ---------------------- --------------------------------- Year Ended Year Ended Year Ended July July 31, July 31, 31, Year Ended July 2001 2000 2001 31, 2000 ---------- ---------- ---------------- --------------- CAPITAL TRANSACTIONS: Class A Shares (b):* Proceeds from shares issued................ $ 71,509 $ 88,657 $ 799,661 $ 436,175 Proceeds from shares issued in connection with ISG Fund merger.. -- 4,901 -- -- Dividends reinvested... 1,308 1,064 143 -- Cost of shares redeemed.............. (83,369) (66,142) (716,707) (366,854) --------- --------- ---------------- -------------- (10,552) 28,480 83,097 69,321 --------- --------- ---------------- -------------- Class B Shares:** Proceeds from shares issued................ -- -- 1,241,105 463,214 Dividends reinvested... -- -- 30 -- Cost of shares redeemed.............. -- -- (1,060,379) (308,340) --------- --------- ---------------- -------------- -- -- 180,756 154,874 --------- --------- ---------------- -------------- Trust Shares (c):*** Proceeds from shares issued................ 288,198 289,623 $ 577,379 305,090 Proceeds from shares issued in connection with ISG Fund merger.. -- 96,446 -- -- Dividends reinvested... 62 167 -- -- Cost of shares redeemed.............. (278,306) (318,134) (522,104) (204,264) --------- --------- ---------------- -------------- 9,954 68,102 55,275 100,826 --------- --------- ---------------- -------------- Total net increase (decrease) from capital transactions........... $ (598) $ 96,582 $ 319,128 $ 325,021 ========= ========= ================ ============== SHARE TRANSACTIONS: Class A Shares (b):* Issued................. 71,509 88,656 799,661 436,175 Issued in connection with ISG Fund merger.. -- 4,914 -- -- Reinvested............. 1,308 1,065 143 -- Redeemed............... (83,369) (66,142) (716,707) (366,854) --------- --------- ---------------- -------------- (10,552) 28,493 83,097 69,321 --------- --------- ---------------- -------------- Class B Shares:** Issued................. -- -- 1,241,104 463,214 Reinvested............. -- -- 30 -- Redeemed............... -- -- (1,060,379) (308,340) --------- --------- ---------------- -------------- -- -- 180,755 154,874 --------- --------- ---------------- -------------- Trust Shares (c):*** Issued................. 288,197 289,624 577,379 305,090 Issued in connection with ISG Fund merger.. -- 96,648 -- -- Reinvested............. 62 167 -- -- Redeemed............... (278,306) (318,134) (522,103) (204,264) --------- --------- ---------------- -------------- 9,953 68,305 55,276 100,826 --------- --------- ---------------- -------------- Total net increase (decrease) from share transactions........... (599) 96,798 319,128 325,021 ========= ========= ================ ==============
--------- (a) Formerly AmSouth Tax-Exempt Fund. (b) Formerly Classic Shares for Tax-Exempt Money Market Fund. (c) Formerly Premier Shares for Tax-Exempt Money Market Fund. * Represents Class I Shares for Institutional Prime Obligations Money Market Fund. ** Represents Class II Shares for Institutional Prime Obligations Money Market Fund. *** Represents Class III Shares for Institutional Prime Obligations Money Market Fund. Continued 258 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001 6.Related Party Transactions: AmSouth Bank ("AmSouth") has reorganized its investment advisory division to form AIMCO, a separate, wholly owned subsidiary of AmSouth Bank. On May 12, 2001, AIMCO succeeded AmSouth Bank as the investment advisor to the AmSouth Funds. The management and investment advisory personnel of AmSouth Bank that provided investment management services to AmSouth Funds continue to do so as the personnel of AIMCO. Under the terms of the investment advisory agreement, AIMCO is entitled to receive fees based on a percentage of the average daily net assets of each of the Funds as follows:
Annual Fee as a Percentage of Average Daily Net Assets --------------------- Value Fund................................................ 0.80% Growth Fund............................................... 0.80% Capital Growth............................................ 0.80% Large Cap................................................. 0.80% Mid Cap Equity............................................ 1.00% Small Cap Fund............................................ 1.20% Equity Income Fund........................................ 0.80% Balanced Fund............................................. 0.80% Select Equity Fund........................................ 0.80% Enhanced Market Fund...................................... 0.45% International Equity Fund................................. 1.25% Aggressive Growth Portfolio............................... 0.20% Growth Portfolio.......................................... 0.20% Growth and Income Portfolio............................... 0.20% Moderate Growth and Income Portfolio...................... 0.20% Bond Fund................................................. 0.65% Limited Term Bond Fund.................................... 0.65% Government Income Fund.................................... 0.65% Limited Term U.S. Government Fund......................... 0.65% Municipal Bond Fund....................................... 0.65% Florida Tax-Exempt Fund................................... 0.65% Tennessee Tax-Exempt Fund................................. 0.65% Limited Term Tennessee Tax-Exempt Fund.................... 0.65% Prime Money Market Fund................................... 0.40% U.S. Treasury Money Market Fund........................... 0.40% Treasury Reserve Money Market Fund........................ 0.40% Tax-Exempt Money Market Fund.............................. 0.40% Institutional Prime Obligations Money Market Fund......... 0.20%
AmSouth also serves as Custodian for the Trust, with the exception of the International Equity Fund. Pursuant to the Custodian Agreement with the Trust, AmSouth receives compensation from each Fund for such services in an amount equal to an asset-based fee plus fixed fees charged for certain portfolio transactions and out-of-pocket expenses. Deutsche Bank serves the International Equity Fund as the custodian. BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"), an Ohio Limited Partnership, BISYS Fund Services Ohio, Inc. ("BISYS Ohio"), and BISYS Fund Services, Inc. ("BISYS Inc.") are subsidiaries of the BISYS Group, Inc. ASO Services Company ("ASO"), a wholly owned subsidiary of the BISYS Group, Inc., serves the Funds as Administrator ("Administrator"). Under the terms of the administration agreement, the Administrator receives a fee based on the average daily net assets of each of the Funds. AmSouth and BISYS Ohio, with whom certain officers and trustees of the Trust are affiliated, serve as the Funds' sub-administrators. Such officers and trustees are paid no fees directly by the Funds for serving as officers Continued 259 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001 and trustees of the Trust. Pursuant to its current agreement with the Administrator, AmSouth has assumed certain Administration duties, for which AmSouth receives a fee, paid by the Administrator, based on a percentage of each Fund's daily average net assets. ASO also serves the Funds as Fund Accountant for whom ASO receives a fee based on a percentage of each Fund's average daily net assets. Pursuant to its agreement with the Administrator, BISYS Ohio, as sub- administrator, is entitled to compensation as mutually agreed upon from time to time by it and the Administrator. BISYS serves as the Funds' distributor and is entitled to receive commissions on sales of shares of the variable net asset value funds. For the year ended July 31, 2001, BISYS received $1,001,380 from commissions earned on sales of shares of the Funds' variable net asset value funds. BISYS reallowed $4,469 to affiliated broker dealers of the Fund's shares. BISYS receives no fees from the Funds for providing distribution services to the Funds. BISYS Ohio, serves the Funds as Transfer Agent. Under the terms of the Transfer Agent Agreement, BISYS Ohio, receives a fee based on a percentage of each Fund's average daily net assets, plus out of pocket charges. Class A and Trust Shares of the Trust are subject to a Shareholder Servicing Plan (the "Servicing Plan") permitting payment of compensation to financial institutions that agree to provide certain administrative support services for their customers or account holders. Each Fund has entered into a specific arrangement with BISYS for the provision of such services and reimburses BISYS for its cost of providing these services, subject to a maximum rate of 0.25% of the Class A Shares and 0.15% of the Trust Shares of the average daily net assets of each of the Funds. Class B Shares, Class II Shares and Class III Shares of the Trust are subject to a Distribution and Shareholder Servicing Plan (the "Distribution Plan") permitting payment of compensation to a participating organization as payment for its services or expenses in connection with distribution assistance of the Funds' Class B Shares, Class II Shares and Class III Shares to the participating organizations customers. Each Fund has entered into a specific arrangement with BISYS for the provision of such services and pays BISYS for its cost of providing such services, subject to a maximum rate of 1.00% of the average daily net assets of the Class B Shares of each of the Funds, which includes a Shareholder Servicing Fee of 0.25% of the average daily net assets of the Class B Shares of each Fund. Class II Shares and Class III Shares are subject to a maximum rate of 0.25% and 0.50% of daily average net assets, respectively, for such services. BISYS Ohio also serves the Funds as administrator for Securities Lending, and for the year ended July 31, 2001, received $928,199 in fees for its services. 7. Concentration of Credit Risk The Tennessee Tax-Exempt Fund and Limited Term Tennessee Tax-Exempt Fund invest substantially all of their assets in a non-diversified portfolio of tax- exempt debt obligations primarily consisting of securities issued by the State of Tennessee, its municipalities, counties and other taxing districts. The issuers' abilities to meet their obligations may be affected by Tennessee's economic, regional, and political developments. The Florida Tax-Exempt Fund invests substantially all of its assets in a non- diversified portfolio of tax-exempt debt obligations primarily consisting of securities issued by the State of Florida, its municipalities, counties and other taxing districts. The issuers' abilities to meet their obligations may be affected by Florida's economic, regional, and political developments. The Municipal Bond Fund invests a large portion of its assets in tax-exempt debt obligations issued by the State of Alabama, its municipalities, counties, and other taxing districts. The issuers' abilities to meet their obligations may be affected by Alabama's economic, regional, and political developments. Continued 260 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001 8. Common Trust Conversion On December 11, 2000, the Value Fund issued shares to acquire all of the assets and liabilities of a certain common trust fund of AmSouth Bank. The following is a summary of shares issued by the Value Fund, net assets converted, net asset value per share of the Value Fund, and unrealized appreciation from the common trust fund as of the conversion date (amounts in thousands, except per share amounts):
Net Asset Net Value Per Unrealized Shares Assets Share Appreciation ------ ------- --------- ------------ Value Fund................................ 1,283 $23,654 $18.44 $6,315
9. Eligible Distributions: (Unaudited) The AmSouth Funds designate the following eligible distributions for the dividends received deductions for corporations for the year ended July 31, 2001:
Percentage ---------- Value Fund........................................................... 100.00% Growth Fund.......................................................... 10.40% Capital Growth Fund.................................................. 12.10% Large Cap Fund....................................................... 100.00% Equity Income Fund................................................... 100.00% Balanced Fund........................................................ 29.35% Select Equity Fund................................................... 100.00% Enhanced Market Fund................................................. 100.00% Strategic Portfolios: Aggressive Growth Portfolio.................... 10.77% Strategic Portfolios: Growth Portfolio............................... 4.92% Strategic Portfolios: Growth and Income Portfolio.................... 4.88% Strategic Portfolios: Moderate Growth and Income Portfolio........... 4.96%
10. Exempt-Interest Income Designations (Unaudited): The AmSouth Funds designate the following exempt-interest dividends for the taxable year ended July 31, 2001 (amounts in thousands):
Tax-Exempt Distribution ------------ Municipal Bond Fund................................................ $15,530 Florida Tax-Exempt Fund............................................ 2,451 Tennessee Tax-Exempt Fund.......................................... 2,432 Limited Term Tennessee Tax-Exempt Fund............................. 427 Tax-Exempt Money Market Fund....................................... 6,077
Continued 261 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001 11. Federal Income Tax Information (Unaudited): The accompanying table details distributions from long-term capital gains for the following funds for the year ended July 31, 2001 (amounts in thousands):
Long-Term Capital Gains --------- Value Fund............................................................ $ 80,149 Growth Fund........................................................... 3,890 Capital Growth Fund................................................... 10,624 Large Cap Fund........................................................ 112,147 Small Cap Fund........................................................ 4,411 Balanced Fund......................................................... 16,833 Enhanced Market Fund.................................................. 1,003 International Equity Fund............................................. 2,855 Strategic Portfolios: Aggressive Growth Portfolio..................... 399 Strategic Portfolios: Growth Portfolio................................ 177 Strategic Portfolios: Growth and Income Portfolio..................... 266 Strategic Portfolios: Moderate Growth and Income Portfolio............ 19
At July 31, 2001, the following Funds have capital loss carryforwards, which are available to offset future capital gains, if any on securities transactions to the extent provided for in the Code (amounts in thousands):
Amount Expires ------- ------- Value Fund...................................................... $ 451 2007 Capital Growth Fund............................................. 1,283 2009 Mid Cap Fund.................................................... 315 2007 3,640 2008 3,898 2009 Small Cap Fund.................................................. 10,492 2009 Equity Income Fund.............................................. 1,059 2007 283 2008 4,006 2009 Select Equity Fund.............................................. 1,796 2009 International Equity Fund....................................... 37 2009 Limited Term Bond Fund.......................................... 65 2002 730 2003 4 2004 304 2005 117 2006 338 2007 50 2008 518 2009
Continued 262 AMSOUTH FUNDS Notes to Financial Statements, Continued July 31, 2001
Amount Expires ------ ------- Government Income Fund........................................... $468 2002 498 2003 973 2004 278 2005 858 2007 227 2009 Limited Term U.S. Government Fund................................ 759 2002 379 2003 77 2008 Florida Tax-Exempt Fund.......................................... 147 2008 204 2009 Tennessee Tax-Exempt Fund........................................ 26 2007 898 2008 Limited Term Tennessee Tax-Exempt Fund........................... 224 2008 Prime Money Market Fund.......................................... 4 2005 52 2006 Treasury Reserve Money Market Fund............................... 6 2003 Tax-Exempt Money Market Fund..................................... $123 2006 92 2007 75 2009 Institutional Prime Obligations Money Market Fund................ 1 2009
Under current tax law, capital losses realized after October 31, within the Fund's fiscal year may be deferred and treated as occurring on the first day of the following fiscal year. The following deferred losses will be treated as arising on the first day of the fiscal year ended July 31, 2002 (amounts in thousands): Growth Fund............................................................ $ 6,351 Capital Growth Fund.................................................... 20,393 Mid Cap Fund........................................................... 12,327 Small Cap Fund......................................................... 20,673 Equity Income Fund..................................................... 12,842 International Equity Fund.............................................. 2,972
Continued 263 Report of Independent Auditors The Board of Trustees and Shareholders AmSouth Funds We have audited the accompanying statements of assets and liabilities, including the schedules of portfolio investments, of AmSouth Funds (comprised of AmSouth Value Fund, AmSouth Growth Fund, AmSouth Capital Growth Fund, AmSouth Large Cap Fund, AmSouth Mid Cap Fund, AmSouth Small Cap Fund, AmSouth Equity Income Fund, AmSouth Balanced Fund, AmSouth Select Equity Fund, AmSouth Enhanced Market Fund, AmSouth International Equity Fund, AmSouth Strategic Portfolios: Aggressive Growth Portfolio, AmSouth Strategic Portfolios: Growth Portfolio, AmSouth Strategic Portfolios: Growth and Income Portfolio, AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio, AmSouth Bond Fund, AmSouth Limited Term Bond Fund, AmSouth Government Income Fund, AmSouth Limited Term U.S. Government Fund, AmSouth Municipal Bond Fund, AmSouth Florida Tax- Exempt Fund, AmSouth Tennessee Tax-Exempt Fund, AmSouth Limited Term Tennessee Tax-Exempt Fund, AmSouth Prime Money Market Fund, AmSouth U.S. Treasury Money Market Fund, AmSouth Treasury Reserve Money Market Fund, AmSouth Tax-Exempt Money Market Fund and AmSouth Institutional Prime Obligations Money Market Fund) (the Funds) as of July 31, 2001, the related statements of operations for the year then ended, and the related statements of changes in net assets and financial highlights for each of the two years or periods then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The statements of changes in net assets and the financial highlights presented herein for each of the respective years or periods ended July 31, 1999 were audited by other auditors whose report dated September 21, 1999 expressed an unqualified opinion. The statements of changes in net assets and the financial highlights presented herein for each of the respective years or periods ended December 31, 1999 were audited by other auditors whose report dated February 22, 2000 expressed an unqualified opinion. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of July 31, 2001, by correspondence with the custodians and others. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective portfolios comprising AmSouth Funds at July 31, 2001, the results of their operations, the changes in their net assets and their financial highlights for each of the two years or periods then ended, in conformity with accounting principles generally accepted in the United States. [LOGO OF ERNST & YOUNG LLP] Columbus, Ohio September 13, 2001 264 AMSOUTH FUNDS ANNUAL REPORT JULY 31, 2001 [Investment Advisor] ------------------------------------------ AmSouth Investment Management Company, LLC 1901 Sixth Avenue North Birmingham, AL 35203 [Investment Sub-Advisors] ------------------------------------------ (Capital Growth Fund Only) Peachtree Asset Management A Division of Salomon Smith Barney Fund Management, LLC One Peachtree Center Atlanta, GA 30308 (Mid Cap Fund Only) Bennett Lawrence Management, LLC 757 3rd Avenue, 19th Floor New York, NY 10017 (Small Cap Fund Only) Sawgrass Asset Management, LLC 1579 The Greens Way, Suite 20 Jacksonville, FL 32224 (Equity Income Fund Only) Rockhaven Asset Management, LLC 100 First Avenue, Suite 1050 Pittsburgh, PA 15222 (Select Equity and Enhanced Market Funds) Oakbrook Investments, LLC 701 Warrenville Road, Suite 135 Lisle, IL 60532 (International Equity Fund Only) Lazard Asset Management 30 Rockefeller Plaza New York, NY 10112 [Distributor] -------------------- BISYS Fund Services 3435 Stelzer Road Columbus, OH 43219 [Legal Counsel] -------------------- Ropes & Gray One Franklin Square 1301 K Street, N.W. Suite 800 East Washington, DC 20005 [Transfer Agent] -------------------- BISYS Fund Services Ohio, Inc. 3435 Stelzer Road Columbus, OH 43219 Auditors -------------------- Ernst & Young LLP 41 S. High St. Columbus, OH 43215 9/01