N-30D 1 g75296nv30d.txt NATIONS FUND TRUST / NATIONS MUNICIPAL BOND FUND Nations Short-Term Municipal Income Fund Nations Intermediate Municipal Bond Fund Nations Municipal Income Fund Nations CA Municipal Bond Fund Nations FL Intermediate Municipal Bond Fund Nations FL Municipal Bond Fund Nations GA Intermediate Municipal Bond Fund Nations GA Municipal Bond Fund Nations KS Municipal Income Fund Nations MD Intermediate Municipal Bond Fund Nations MD Municipal Bond Fund MUNICIPAL BOND FUNDS Nations NC Intermediate --------------------------------- Municipal Bond Fund Annual report for the year ended March 31, 2002 Nations NC Municipal Bond Fund Nations SC Intermediate Municipal Bond Fund Nations SC Municipal Bond Fund Nations TN Intermediate Municipal Bond Fund Nations TN Municipal Bond Fund Nations TX Intermediate Municipal Bond Fund Nations TX Municipal Bond Fund Nations VA Intermediate Municipal Bond Fund Nations VA Municipal Bond Fund [NATIONS FUNDS LOGO] This Report is submitted for the general information of shareholders of Nations Funds. This material must be preceded or accompanied by a current Nations Funds prospectus. Nations Funds distributor: Stephens Inc., which is not affiliated with Bank of America Corporation, is not a bank, and securities offered by it are not guaranteed by any bank or insured by the FDIC. Stephens Inc., member NYSE, SIPC. Nations Funds Investment Adviser: Banc of America Advisors, LLC. NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE PRESIDENTS' MESSAGE Dear Shareholder: The 12-month period ending March 31, 2002 marked a year of remarkable volatility, uncertainty and change in the markets. The tragic events of September 11, 2001 -- a terrorist attack of unspeakable magnitude -- shocked the United States and the world, sending markets worldwide into a short-term free fall. These events helped push the already fragile U.S. economy into recession for the first time after almost a decade of uninterrupted economic growth. The debacle of Enron and new concerns about corporate accounting also caused growing investor uncertainty. To aid the sagging economy and begin the recovery process from recession, the Federal Reserve Board cut interest rates a record eight times during this reporting period, bringing them to their lowest level in nearly 40 years. For the 12-month period, the three major stock market indexes -- the Dow Jones Industrial Average, Standard & Poor's 500 Composite Stock Price Index (S&P 500) and Nasdaq Composite Index(1) -- had modest, positive returns. Bond results for the same period, represented by the Lehman Aggregate Bond Index(2), were more muted than the prior 12-month period. Since the start of the year 2002, however, many economic indicators suggest we may be well along the path to recovery. The growth rate of the Gross Domestic Product, for example, increased from 1.7% for the fourth quarter of 2001 to 5.8% for first quarter of 2002, the fastest growth rate in more than two years. OPPORTUNITIES ABOUND One strongly advised investment approach, we believe, is to remain focused on long-term investment goals and not on short-term profits or losses. Investors who see the potential in "buying low" and "selling high" may also see the opportunities that a down or volatile market may present. In our view, now may be a good time to capture value by buying -- at a discount -- stocks or bonds of some of the most widely regarded companies. During these volatile times, buying small-, mid-cap and value prospects, in our view, may be an opportunity to acquire some respected companies at a discount, and corporate bonds appear particularly attractive as credit spreads relative to Treasuries narrow. DIVERSIFICATION AND DISCIPLINE These past two years could not have provided a more vivid example of the importance of having a diversified investment strategy. We believe that a carefully selected portfolio of stocks and bonds is a sensible way to reduce some of the risk associated with investing, particularly during uncertain times. It takes discipline to weather market uncertainty. It may be wise for you to meet with your investment professional to review your long-term financial goals, not just during volatile times, but on a more regular, disciplined basis. --------------- (1)The Dow Jones Industrial Average is a price-weighted index of 30 of the largest, most widely held stocks traded on the New York Stock Exchange. The Standard & Poor's 500 Composite Stock Price Index is an unmanaged index of 500 widely held common stocks. The Nasdaq Composite Index tracks the performance of domestic common stocks traded on the regular Nasdaq market as well as National Market System traded foreign stocks and ADRs. The indices are unavailable for investment and do not reflect fees, brokerage commissions or other expenses of investing. (2)The Lehman Aggregate Bond Index is an unmanaged index made up of the Lehman Government/ Corporate Index, the Asset-Backed Securities Index and the Mortgage-Backed Securities Index and includes U.S. government agency and U.S. Treasury securities, corporate bonds and mortgage-backed securities. All dividends are reinvested. The indices are unavailable for investment and do not reflect fees, brokerage commissions or other expenses of investing. Source for all statistical data -- Banc of America Capital Management, LLC PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. PRESIDENTS' MESSAGE CONTINUED... OUR NEAR-TERM OUTLOOK While the U.S. economy suffered its first downturn in a decade, we look for more positive signs from economic indicators in the coming months, which may provide a favorable backdrop for longer-term equity returns. Interest rates seem to have stabilized, inflation is quiescent and manufacturing data is looking better. We remain cautious, however, realizing that a number of risks could impact the markets, such as the continued war on terrorism, escalating conflict within the Middle East or an increase in oil prices, which has historically been a major contributing factor to the state of global economic conditions. We also continue to look for opportunities on the fixed-income side. With the improving economy, declining default rates and wider spreads, we believe high-yield and corporate bonds may look favorable. INSIGHTS AND ANALYSIS Please read through your annual report to see what your Nations Funds portfolio managers have to say about the markets, the economy and how your investment has fared over the past 12 months. Should you have any questions or comments on your annual report, please contact your investment professional or call us at 1.800.321.7854. If you do not have an investment professional and would like us to put you in contact with one, just let us know. You can visit us online anytime at www.nationsfunds.com for the most current performance and other information about your fund. Thank you for being a part of the Nations Funds family. Sincerely, /S/ A. MAX WALKER A. MAX WALKER PRESIDENT AND CHAIRMAN OF THE BOARD NATIONS FUNDS /S/ ROBERT H. GORDON ROBERT H. GORDON PRESIDENT BANC OF AMERICA ADVISORS, LLC March 31, 2002 TABLE OF CONTENTS ECONOMIC OVERVIEW 3 MUNICIPAL BOND MARKET OVERVIEW 5 PORTFOLIO COMMENTARY Nations Short-Term Municipal Income Fund 7 Nations Intermediate Municipal Bond Fund 11 Nations Municipal Income Fund 15 Nations CA Municipal Bond Fund 19 Nations FL Intermediate Municipal Bond Fund 23 Nations FL Municipal Bond Fund 27 Nations GA Intermediate Municipal Bond Fund 31 Nations GA Municipal Bond Fund 35 Nations KS Municipal Income Fund 39 Nations MD Intermediate Municipal Bond Fund 43 Nations MD Municipal Bond Fund 47 Nations NC Intermediate Municipal Bond Fund 51 Nations NC Municipal Bond Fund 56 Nations SC Intermediate Municipal Bond Fund 61 Nations SC Municipal Bond Fund 65 Nations TN Intermediate Municipal Bond Fund 69 Nations TN Municipal Bond Fund 73 Nations TX Intermediate Municipal Bond Fund 77 Nations TX Municipal Bond Fund 81 Nations VA Intermediate Municipal Bond Fund 85 Nations VA Municipal Bond Fund 89 FINANCIAL STATEMENTS Statements of net assets 93 Statements of operations 230 Statements of changes in net assets 234 Schedules of capital stock activity 242 Financial highlights 264 Notes to financial statements 306 Tax information 316 Fund governance 318
NATIONS FUNDS [DALBAR LOGO] RECOGNIZED FOR OUTSTANDING DALBAR, Inc. is a well-respected SHAREHOLDER AND research firm that measures INTERMEDIARY SERVICE customer service levels and establishes benchmarks in the IN RECOGNITION OF ITS COMMITMENT financial services industry. TO PROVIDE SHAREHOLDERS AND INVESTMENT PROFESSIONALS WITH THE HIGHEST LEVEL OF SERVICE IN THE MUTUAL FUND INDUSTRY, NATIONS FUNDS RECEIVED THE DALBAR MUTUAL FUND SERVICE AWARD AND THE DALBAR KEY HONORS AWARD IN 2001.
[This page intentionally left blank.] ECONOMIC OVERVIEW BANC OF AMERICA CAPITAL MANAGEMENT* THE YEAR IN REVIEW Over the past year, the U.S. economy suffered its first recession in more than a decade as well as the trauma of an unprecedented attack from terrorism. The ability of the U.S. financial markets to cope with these shocks demonstrates the resilience of our economic system. While stock market performance varied by investment style and sector, most measures remained relatively flat or posted gains for the 12 months ended March 31, 2002. The Standard & Poor's 500 Composite Stock Price Index** remained essentially stable, with a total return of almost 0.2%. In contrast, gains by smaller companies pushed the total return of the Russell 2000 Index*** to nearly 14%. Stock market performance across industry segments diverged widely over the past year. Anticipation of an economic recovery gave a sizable boost to basic material stocks, while investors also sought the safety of the consumer staples sector. Excess capacity, however, drove the share prices of many telecommunications service companies sharply lower. The fixed-income markets faced pressure from rising long-term interest rates in early 2002, yet still managed to post a moderate return over the 12 months ending March 31, 2002. U.S. Treasury securities achieved a 3% return, as measured by the Lehman U.S. Treasury Index.+ Meanwhile, the Lehman Corporate Bond Index++ recorded a 5% gain. After the longest expansion in U.S. history, the U.S. economy slipped into recession in March 2001, according to the Business Cycle Dating Committee of the National Bureau of Economic Research. The prior year's tightening of monetary policy, higher energy costs and the contraction in the stock market all acted to slow the economy, especially the "hard-hit" manufacturing sector. The September 11, 2001 terrorist attacks extended the downturn to other sectors, such as travel and tourism. By historical standards, the past year's recession has been relatively short and mild. Real Gross Domestic Product (GDP) declined in only one quarter, the July through September 2001 period. Housing remained strong throughout the downturn and --------------- *Banc of America Capital Management is the investment management group of Bank of America, N.A. and includes Banc of America Capital Management, LLC, investment sub-adviser to many Nations Funds, and other non-bank affiliates of Bank of America. **The Standard & Poor's 500 Composite Stock Price Index is an unmanaged index of 500 widely held common stocks. It is not available for investment and does not reflect fees, brokerage commissions or other expenses of investing. ***The Russell 2000 Index is an unmanaged index of 2,000 of the smallest stocks representing approximately 11% of the U.S. equity market. The index is weighted by market capitalization, and is not available for investment and does not reflect fees, brokerage commissions or other expenses of investing. +The Lehman U.S. Treasury Index is an index consisting of U.S. Treasury debt obligations and is generally considered to be representative of U.S. Treasury market activity. It is not available for investment and does not reflect fees, brokerage commissions or other expenses of investing. ++The Lehman Corporate Bond Index is an unmanaged market value-weighted index of investment- grade corporate fixed-rate debt issues with maturities of one year or more. It is not available for investment and does not reflect fees, brokerage commissions or other expenses of investing. Source of all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 3 ECONOMIC OVERVIEW CONTINUED... consumer spending held up relatively well. However, corporate profits plunged and businesses slashed their capital spending budgets. As 2001 drew to a close, forces were converging to produce an economic upswing in 2002. Eleven interest-rate cuts by the Federal Reserve Board (the "Fed") combined with tax cuts and increases in federal spending helped to refuel the U.S. economic engine. Meanwhile, businesses reacted quickly by bringing inventories in line with demand, and Americans displayed a remarkable ability to recover from last September's shock. THE YEAR AHEAD Recent economic statistics indicate that the recession has ended and an economic recovery has taken hold. With companies no longer able to fill sales with goods already on the shelf, production and real GDP turned sharply higher in the first quarter. Although significant risks persist, we believe the recovery should continue over the balance of 2002. We also believe a gradual improvement in the job market, personal income gains and rising home equity values should support a further rise in consumer spending. Companies have been reluctant to increase their spending on technology products and other capital goods, but by the latter part of 2002 we believe many companies could grow more confident in a sustained economic recovery. Some improvement in operating margins and higher sales volumes, we feel, would allow profits to rebound over the next few quarters. Favorable long-term productivity trends remain intact, which we believe should put the economy on track for expansion in 2002. We anticipate that the Fed will raise interest rates from today's extraordinarily low levels to keep inflation in check. However, even by year-end, interest rates may continue to be at moderate levels. Looking ahead, investors may continue to face formidable risks that have recently been exacerbated by the worldwide war against terrorism and violence in the Middle East. Valuation levels also may remain a constraint. Yet, we believe that the fundamentals of the U.S. economy remain strong and the U.S. appears to be leading the rest of the world into recovery. LYNN REASER, PH.D. CHIEF ECONOMIST AND SENIOR MARKET STRATEGIST BANC OF AMERICA CAPITAL MANAGEMENT March 31, 2002 4 MUNICIPAL BOND MARKET OVERVIEW Over the last one-, three- and five-year periods, the taxable-equivalent returns on the Lehman Municipal Bond Index* have outperformed many taxable fixed-income asset classes and generally performed very well against the major equity market benchmarks. The Lehman Municipal Bond Index returned 3.81% for the 12-month period ended March 31, 2002. This lagged the primary taxable bond index, the Lehman Aggregate Bond Index,** which returned 5.35% for the same period. The municipal bond market has benefited in the last 12 months from the poor performance of the equity markets as a whole. Many investors over the last year have renewed their interest in income-producing investments and sought investments with potentially lower volatility. The municipal market was not totally spared from higher market volatility in 2001. Given the events of September 11, 2001, it is not surprising that the transportation sector was the hardest hit sector of the Lehman Revenue Bond Index.*** Prices on airline-related credits backed by Continental Airlines, United Airlines, USAirways, and to a lesser extent Delta Airlines and American Airlines, have shown few signs of rebounding despite the progress which has been made in securing U.S. airports and restoring America's confidence in air travel. The instability that has occurred in the Middle East over the past several months has also added to the length of recovery for the transportation sector. Rising oil prices in our view are likely to apply further fiscal stress on the airline industry. In a reversal of the prior year's performance, the hospital and industrial development revenue/pollution control revenue (IDR/PCR) sectors were the top- performing sectors of the Lehman Revenue Bond Index for the period ended March 31, 2002. The hospital sector finished first, returning 5.72% for the period followed by the IDR/PCR sector, which finished second, returning 4.88% for the same time frame. Municipal market investors watched short rates fall significantly from the beginning of 2001 into the first two months of 2002 as the Federal Reserve Board (the "Fed") steadily lowered interest rates throughout the year. This led to a dramatic steepening of the yield curve from two to 15 years. The municipal yield curve from 15 to 30 years is, however, quite flat with investors picking up 94% of the 30-year yield by extending only 15 years. The municipal yield curve from two to 15 years was extremely steep in February 2002 with 245 basis points (2.45%) and flattened considerably -- but not to the same extent as the Treasury curve -- to 204 basis points (2.04%) in March 2002. We believe a continued flattening of the yield curve from the levels may be expected pending a potentially more restrictive policy from the Fed. Many economists are anticipating that a tightening cycle may begin mid- year at the earliest. --------------- *The Lehman Municipal Bond Index is a broad-based index of over 40,000 tax-free, investment grade bonds, with a maturity of one year or greater. All interest is reinvested. It is unmanaged, not available for investment and does not reflect fees, brokerage commissions or other expenses of investing. **The Lehman Aggregate Bond Index is an unmanaged index made up of the Lehman Government/ Corporate Index, the Asset-Backed Securities Index and the Mortgage-Backed Securities Index. These indices include U.S. government agency and U.S. Treasury securities, corporate bonds and mortgage- backed securities. All dividends are reinvested. It is not available for investment and does not reflect fees, brokerage commissions or other expenses of investing. ***The Lehman Revenue Bond Index is an unmanaged index for the long-term, investment grade, revenue bond market. Returns and attributes for the index are calculated semi-monthly. It is not available for investment and does not reflect fees, brokerage commissions or other expenses of investing. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 5 MUNICIPAL BOND MARKET OVERVIEW CONTINUED... In general, we would look to maintain a slightly short to neutral duration by utilizing bonds with more of a defensive structure as we anticipate the absolute level of interest rates to rise in 2002. We also continue to look for opportunities to "trade up" in credit quality, as state and local governments are likely to see budget surpluses evaporate and the need to issue additional debt may likely increase throughout 2002. This is especially true for New York and California, where a tremendous amount of supply is already expected in mid- to late-2002. MUNICIPAL FIXED INCOME MANAGEMENT TEAM BANC OF AMERICA CAPITAL MANAGEMENT, LLC March 31, 2002 6 NATIONS SHORT-TERM MUNICIPAL INCOME FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal income tax consistent with minimal fluctuation of principal. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Short-Term Municipal Income Fund Investor A Shares provided shareholders with a total return of 3.27%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS SHORT-TERM MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues for their additional yield potential. By maintaining a well-diversified portfolio, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As a short-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of less than three years and a duration between 1.25 and 2.75 years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.27%, Nations Short-Term Municipal Income Fund (Investor A Shares) underperformed its peer group, the Lipper Short Municipal Debt Funds Average, which returned 3.35% for the 12-month period ending March 31, 2002. While the Fund benefited from a longer duration than its peers for the last nine months of 2001, the longer duration hurt the Fund's performance as interest rates rose in the first quarter of 2002. The Fund has been moving to a more defensive mode as we have been adding floating rate securities and higher premium cushion bonds (bonds containing some call protection). The Fund has seen good growth over the past fiscal year. The Fund's higher than usual cash equivalent balance has caused the Fund's distribution yield to underperform its peers. However, we feel the structure could provide excellent flexibility to capture higher yields on future purchases. --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 1.00%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds included in the Lipper Short Municipal Debt Funds Average invest in municipal debt issues with dollar-weighted average maturities of less than three years. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 7 NATIONS SHORT-TERM MUNICIPAL INCOME FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? In terms of price performance, April has historically been the second worst-performing month of the year for municipal securities (March being the worst). In our opinion, three factors that could potentially exacerbate this underperformance include a rather low coupon/redemption payment level leading to less demand, the richness of the intermediate and long-term portions of the municipal market in relationship to taxables and, finally, the perceived overall bearish sentiment of most market participants toward municipals. Offsetting these factors is a general feeling that the sell-off in March was overdone and some amount of retracement needs to occur before we settle into a more gradual trend toward higher rates. Additionally, the visible supply in the coming months appears to be light. Over the next 12 months, we will look to maintain a slightly short to neutral duration by utilizing bonds with more of a defensive structure (shorter duration and/or a higher coupon), as we expect the absolute level of interest rates to rise in 2002. We currently favor bonds maturing inside 10-years, where we believe municipal securities are somewhat cheap compared to U.S. Treasuries. Also, we continue to look for opportunities to trade up in credit quality where possible, as state and local governments may likely see budget surpluses evaporate and the need to issue additional debt increase throughout 2002. 8 NATIONS SHORT-TERM MUNICIPAL INCOME FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 23.7% General obligation 20.3% Industrial development revenue/Pollution control revenue 11.2% Education 9.7% Hospital 7.8% Electric 6.2% Transportation 3.5% Prerefunded 3.5% Housing 14.1% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Burke County, Georgia, Development Authority, PCR, (Oglethorpe Power Corporation) Series 1993A , (FGIC Insured, Bayerische Landesbank SBA), 1.450% 01/01/16 4.8% ------------------------------------------------- 2 Utah State, GO, Series 2001B, 4.500% 07/01/04 2.0% ------------------------------------------------- 3 Tippecanoe, Indiana, Independent School Corporation, Temporary Loan Notes, Series 2002, 2.100% 12/27/02 1.7% ------------------------------------------------- 4 Arkansas State, GO, Series 2001A, 4.000% 08/01/05 1.7% ------------------------------------------------- 5 Chester County, Pennsylvania, Industrial Development Authority, Revenue, (Malvern Prep School Project) Series 2001, (First Union National Bank LOC), 1.550% 04/01/31 1.6% ------------------------------------------------- 6 Richmond County, Georgia, Development Authority, IDR Refunding, (Archer Daniels Midland Project) Series 1993, 5.300% 05/01/05 1.3% ------------------------------------------------- 7 Mississippi State, Gaming County Highway Improvements Project, GO, Series 2001B, 5.000% 10/01/06 1.2% ------------------------------------------------- 8 California State, GO, Series 2000A-10-Reg-D, (Bayerische Hypotheken-Und Vereinsbank SBPA), 1.950% 03/01/03 1.2% ------------------------------------------------- 9 Michigan State, Housing Development Authority, Rental Housing Revenue, Series 2000B, (MBIA Insured, Morgan Guaranty Trust), 1.500% 04/01/24 1.1% ------------------------------------------------- 10 Cook County, Illinois, Township High School District Number 211 Palatine and Schaumb GO, Series 2001, 5.000% 12/01/05 1.1% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
9 NATIONS SHORT-TERM MUNICIPAL INCOME FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS SHORT-TERM MUNICIPAL LEHMAN 3-YEAR MUNICIPAL BOND INCOME FUND INDEX ---------------------------- ---------------------------- Nov. 2 1993 9900.00 10000.00 1993 10005.00 10092.00 1994 10032.00 10161.00 1995 10839.00 11062.00 1996 11269.00 11554.00 1997 11781.00 12187.00 1998 12315.00 12822.00 1999 12599.00 13074.00 2000 13275.00 13889.00 2001 13938.00 14804.00 Mar. 31 2002 13974.00 14879.00
[INVESTOR A SHARES AT NAV** (AS IF 3/31/02) RETURN CHART]
NATIONS SHORT-TERM MUNICIPAL LEHMAN 3-YEAR MUNICIPAL BOND INCOME FUND INDEX ---------------------------- ---------------------------- Nov. 2, 1993 10000.00 10000.00 1993 10106.00 10092.00 1994 10133.00 10161.00 1995 10948.00 11062.00 1996 11383.00 11554.00 1997 11900.00 12187.00 1998 12439.00 12822.00 1999 12726.00 13074.00 2000 13409.00 13889.00 2001 14079.00 14804.00 Mar. 31, 2002 14115.00 14879.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (11/2/93 through 3/31/02) 4.18% 4.06%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Short-Term Municipal Income Fund from the inception of the share class. The Lehman 3-Year Municipal Bond Index is a broad-based, unmanaged index of investment grade bonds with maturities of 2 to 3 years. All dividends are reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 10/7/93 11/2/93 10/12/93 5/19/94 --------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.54% 3.27% 2.26% 2.51% -2.48% 2.47% 1.47% --------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.23% 3.97% 3.63% 3.34% 2.40% 3.18% 3.18% 5 YEARS 4.54% 4.31% 4.10% 3.87% 3.52% 3.76% 3.76% SINCE INCEPTION 4.36% 4.18% 4.06% 3.82% 3.82% 4.04% 4.04%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 1.00%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 10 NATIONS INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal income tax consistent with moderate fluctuation of principal. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Intermediate Municipal Bond Fund Investor A Shares provided shareholders with a total return of 2.91%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS INTERMEDIATE MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk, and lower quality, investment grade issues for their additional yield potential. By maintaining a well-diversified portfolio, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As an intermediate-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of between three and ten years and a duration between three and six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 2.91%, Nations Intermediate Municipal Bond Fund (Investor A Shares) underperformed its peer group, the Lipper Intermediate Municipal Debt Funds Average, which returned 3.06% for the 12-month period ended March 31, 2002. The Fund's overweighted position in industrial revenue issues hurt performance as the economic recession put pressure on credit spreads. In addition, the Fund's exposure to a toll road project in Virginia, which encountered construction delays, also negatively impacted performance. Partially offsetting these issues was strong performance in the hospital sector in which the Fund had an overweighted position. WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? In terms of price performance, April has historically been the second worst-performing month of the year for municipal securities (March being the worst). In our opinion, three factors that could potentially exacerbate this underperformance include a rather low coupon/redemption payment level leading to less demand, the --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 3.25%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Intermediate Municipal Debt Funds Average invest in municipal debt issues with dollar-weighted average maturities of five to ten years. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 11 NATIONS INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued richness of the intermediate and long-term portions of the municipal market in relationship to taxables and, finally, the perceived overall bearish sentiment of most market participants toward municipals. Offsetting these factors is a general feeling that the sell-off in March was overdone and some amount of retracement needs to occur before we settle into a more gradual trend toward higher rates. Additionally, the visible supply in the coming months appears to be light. Over the next 12 months, we will look to maintain a slightly short to neutral duration by utilizing bonds with more of a defensive structure (shorter duration and/or a higher coupon), as we expect the absolute level of interest rates to rise in 2002. We currently favor bonds maturing inside 10-years, where we believe municipal securities are somewhat cheap compared to U.S. Treasuries. Also, we continue to look for opportunities to trade up in credit quality where possible, as state and local governments may likely see budget surpluses evaporate and the need to issue additional debt increase throughout 2002. 12 NATIONS INTERMEDIATE MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 28.5% General obligation 12.6% Hospital 11.3% Industrial development revenue/Pollution control revenue 8.4% Transportation 6.5% Housing 6.4% Prerefunded 6.3% Education 6.1% Electric 4.0% Water 9.9% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Illinois State, Sales Tax Revenue Refunding, Series 1993S, 6.000% 06/15/03 1.2% ------------------------------------------------- 2 Massachusetts State, GO Refunding, Series 1993C, (AMBAC Insured), 4.950% 08/01/05 1.0% ------------------------------------------------- 3 Maryland State, Transportation Department, Series 2002, 5.500% 02/01/10 1.0% ------------------------------------------------- 4 Chicago, Illinois, Park District, GO, Series 1995, 6.600% 11/15/14 1.0% ------------------------------------------------- 5 Harris County, Texas, GO, Series 2001, 5.000% 10/01/12 1.0% ------------------------------------------------- 6 Arkansas State, GO, Series 2000A, 5.500% 08/01/11 0.9% ------------------------------------------------- 7 Oregon State, Department Administrative Services, Certificates of Participation, Series 2002C, (MBIA Insured), 5.250% 11/01/10 0.9% ------------------------------------------------- 8 Texas State, Water Development GO, Series 1997D, 5.000% 08/01/19 0.9% ------------------------------------------------- 9 Washington State, GO Refunding, Series 1993R-93B, 5.125% 10/01/04 0.9% ------------------------------------------------- 10 Chicago, Illinois, GO Refunding, Series 1999A, (FGIC Insured), 5.000% 01/01/08 0.9% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
13 NATIONS INTERMEDIATE MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS INTERMEDIATE MUNICIPAL LEHMAN 7-YEAR MUNICIPAL BOND BOND FUND INDEX ------------------------------ ---------------------------- Aug. 17| 1993 9675.00 10000.00 1993 9979.00 10413.00 1994 9502.00 10125.00 1995 10884.00 11557.00 1996 11301.00 12061.00 1997 12111.00 12987.00 1998 12747.00 13806.00 1999 12560.00 13786.00 2000 13551.00 15040.00 2001 14170.00 15822.00 Mar. 31| 2002 14250.00 15972.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS INTERMEDIATE MUNICIPAL LEHMAN 7-YEAR MUNICIPAL BOND BOND FUND INDEX ------------------------------ ---------------------------- Aug. 17| 1993 10000.00 10000.00 1993 10314.00 10413.00 1994 9821.00 10125.00 1995 11250.00 11557.00 1996 11681.00 12061.00 1997 12518.00 12987.00 1998 13175.00 13806.00 1999 12982.00 13786.00 2000 14006.00 15040.00 2001 14646.00 15822.00 Mar. 31| 2002 14729.00 15972.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (8/17/93 through 3/31/02) 4.60% 4.19%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Intermediate Municipal Bond Fund from the inception of the share class. The Lehman 7-Year Municipal Bond Index is a broad-based, unmanaged index of investment grade bonds with maturities of 7 to 8 years. All dividends are reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 7/30/93 8/17/93 12/2/93 11/3/94 --------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.17% 2.91% -0.43% 2.14% -0.82% 2.03% 1.04% --------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 3.84% 3.59% 2.44% 2.83% 2.53% 2.82% 2.82% 5 YEARS 5.00% 4.76% 4.07% 4.08% 4.08% 4.16% 4.16% SINCE INCEPTION 4.93% 4.60% 4.19% 4.04% 4.04% 5.20% 5.20%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 3.25%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 14 NATIONS MUNICIPAL INCOME FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal income tax with the potential for principal fluctuation associated with investments in long-term municipal securities. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Municipal Income Fund Investor A Shares provided shareholders with a total return of 1.95%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues for their additional yield potential. By maintaining a well-diversified portfolio, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As a long-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of greater than seven years and a duration of greater than six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 1.95%, Nations Municipal Income Fund (Investor A Shares) underperformed its peer group, the Lipper General Municipal Debt Funds Average, which returned 2.75%, for the 12-month period ended March 31, 2002. The underperformance of the Fund can be attributed to the overweighting in the transportation sector of the market. Bonds backed by United Airlines, American Airlines and Emery Worldwide dramatically underperformed in terms of price performance in the latter half of 2001. We remain confident, however, that the bonds continue to be secure. We believe the value that was lost in 2001 may be recovered over time, as the transportation sector returns to historical capacity levels. WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? In terms of price performance, April has historically been the second worst-performing month of the year for municipal securities (March being the worst). In our opinion, three factors that could potentially exacerbate this underperformance include a rather low coupon/redemption payment level leading to less demand, the --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 4.75%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper General Municipal Debt Funds Average invest in at least 65% of their assets in municipal debt issues in the top four credit ratings. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 15 NATIONS MUNICIPAL INCOME FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued richness of the intermediate and long-term portions of the municipal market in relationship to taxables and, finally, the perceived overall bearish sentiment of most market participants toward municipals. Offsetting these factors is a general feeling that the sell-off in March was overdone and some amount of retracement needs to occur before we settle into a more gradual trend toward higher rates. Additionally, the visible supply in the coming months appears to be light. Over the next 12 months, we will look to maintain a slightly short to neutral duration by utilizing bonds with more of a defensive structure (shorter duration and/or a higher coupon), as we expect the absolute level of interest rates to rise in 2002. We currently favor bonds maturing inside 10-years, where we believe municipal securities are somewhat cheap compared to U.S. Treasuries. Also, we continue to look for opportunities to trade up in credit quality where possible, as state and local governments may likely see budget surpluses evaporate and the need to issue additional debt increase throughout 2002. 16 NATIONS MUNICIPAL INCOME FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 26.7% General obligation 17.7% Prerefunded 10.2% Industrial development revenue/Pollution control revenue 9.9% Hospital 8.3% Water 7.0% Transportation 6.1% Education 4.3% Housing 3.0% Electric 6.8% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Washington State, GO, Series 2000A, 5.625% 07/01/21 2.2% ------------------------------------------------- 2 Washington State, GO, Series 1990A, 6.750% 02/01/15 1.8% ------------------------------------------------- 3 Murray City, Utah, Hospital Revenue Refunding, (IHC Health Services, Inc. Project) Series 1996, (MBIA Insured), 5.000% 05/15/22 1.7% ------------------------------------------------- 4 Chicago, Illinois, O'Hare International Airport, Revenue, Refunding Second Lien, Series 1999, AMT, (AMBAC Insured), 5.500% 01/01/10 1.6% ------------------------------------------------- 5 Illinois, Metropolitan Pier & Exposition Authority, Capital Appreciation, Dedicated State Tax Revenue, (McCormick Place Exposition Project) Series 1993A, (FGIC Insured), 5.174% 06/15/13 1.3% ------------------------------------------------- 6 Pilchuck, Washington, Public Development Corporation, Special Airport Facilities Revenue, (Tramco Inc. Project) Series 1993, AMT, 6.000% 08/01/23 1.3% ------------------------------------------------- 7 Montgomery County, Ohio, Hospital Revenue, Series 1999, 6.750% 04/01/22 1.2% ------------------------------------------------- 8 Wyoming, Student Loan Corporation, Revenue Refunding, Series 1999A, 6.250% 06/01/29 1.2% ------------------------------------------------- 9 Chelan County, Washington, Development Corporation, PCR Refunding, (Alcoa, Inc. Project) Series 1995, 5.850% 12/01/31 1.2% ------------------------------------------------- 10 Huntsville, Alabama, Health Care Authority, Revenue, Series 2001A, 5.750% 06/01/31 1.1% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
17 NATIONS MUNICIPAL INCOME FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS MUNICIPAL INCOME FUND LEHMAN MUNICIPAL BOND INDEX ----------------------------- --------------------------- Mar. 31 1992 9525.00 10000.00 1993 10757.00 11252.00 1994 10941.00 11513.00 1995 11688.00 12368.00 1996 12704.00 13405.00 1997 13444.00 14136.00 1998 14910.00 15651.00 1999 15687.00 16621.00 2000 15330.00 16608.00 2001 16794.00 18421.00 Mar. 31 2002 17121.00 19123.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS MUNICIPAL INCOME FUND LEHMAN MUNICIPAL BOND INDEX ----------------------------- --------------------------- Mar. 31 1992 10000.00 10000.00 1993 11293.00 11252.00 1994 11487.00 11513.00 1995 12271.00 12368.00 1996 13338.00 13405.00 1997 14114.00 14136.00 1998 15654.00 15651.00 1999 16469.00 16621.00 2000 16095.00 16608.00 2001 17631.00 18421.00 Mar. 31 2002 17975.00 19123.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
10-YEAR NAV** MOP* (3/31/92 through 3/31/02) 6.04% 5.53%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Municipal Income Fund over the last 10 years. The Lehman Municipal Bond Index is a broad-based, unmanaged index consisting of over 40,000 tax-free, investment grade bonds with a maturity of one year or greater. All interest is reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR C INVESTOR A INVESTOR B PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 2/1/91 2/1/91 6/7/93 6/17/92 ------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 2.21% 1.95% -2.93% 1.28% -2.61% 1.28% 0.31% ------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 3.19% 2.96% 1.31% 2.19% 1.28% 2.21% 2.21% 5 YEARS 5.18% 4.96% 3.94% 4.23% 4.06% 4.28% 4.28% 10 YEARS 6.25% 6.04% 5.53% -- -- -- -- SINCE INCEPTION 6.53% 6.34% 5.88% 4.46% 4.46% 5.22% 5.22%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 4.75%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 18 NATIONS CALIFORNIA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks as high a level of current interest income free of federal income tax and California state individual income tax as is consistent with prudent investment management and preservation of capital. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations California Municipal Bond Fund Investor A Shares provided shareholders with a total return of 2.45%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS CALIFORNIA MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio, generally within the universe of California municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As a long-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity greater than seven years and a duration of more than six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 2.45%, Nations California Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper California Municipal Debt Funds Average, which returned 2.31% for the 12-month period ended March 31, 2002. The Fund maintained a more conservative duration than its peers during a period in which longer-term interest rates increased. In addition, the Fund's higher than average credit quality proved beneficial, as credit spreads remained wider than normal. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN CALIFORNIA? The state of California is rated "A1" by Moody's Investors Services, "A+" by Standard & Poor's Corporation and "AA" by Fitch, Inc. The ratings reflect California's large, broad-based economy and moderate debt load, tempered by expectations of budgetary shortfalls in fiscal years 2002 and 2003. They also reflect --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 4.75%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper California Municipal Debt Funds Average limit their assets to those securities that are exempt from taxation in California. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 19 NATIONS CALIFORNIA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued the structural budget imbalances in the foreseeable future as well as a weak cash position that is exacerbated by delays in issuing power revenue bonds to reimburse the general fund for power purchased during the height of the energy crisis. California faced a mild recession in 2001. Job losses were relatively mild compared to the nation as a whole but were disproportionately concentrated in the San Francisco Bay area due to the severe slowdown in the high-tech sector. A drop in exports, soaring energy prices, threats of rolling blackouts and a post-September 11, 2001 decline in tourism and travel also challenged the state's economy. The resulting fiscal impact was severe, as declines in the stock market and personal income levels led to a sharp drop in wages and option-related income for the state. California's general fund cash position declined by $5.1 billion to $3.6 billion at the state's fiscal year end. WHAT IS YOUR OUTLOOK FOR CALIFORNIA AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? The state of California's economy, we believe, may begin a recovery by mid-2002 and accelerate in 2003. A key challenge for the state in the near term will be addressing projected budgetary deficits while still meeting minimum education funding requirements mandated under the state constitution. Nevertheless, we feel the state has significant financial flexibility, and economic growth is expected to eventually help stabilize the state's financial position. Local government units could be impacted by state budget cuts in local aid, but these units are currently in better financial condition in general than they were following the last recession. Longer- term challenges include meeting the population's water demands, health care, affordable housing and infrastructure needs. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain a slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to U.S. Treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. We believe this is especially true for California where a tremendous amount of supply may be expected in mid- to late-2002. 20 NATIONS CALIFORNIA MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 15.0% Water 13.7% Lease 11.1% Electric 10.5% General obligation 9.7% Transportation 9.5% Hospital 9.3% Housing 6.7% Prerefunded 6.6% Special tax 7.9% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Fresno, California, Sewer Revenue, Series 1993A-1, (AMBAC Insured), 6.250% 09/01/14 2.7% ------------------------------------------------- 2 Puerto Rico, Electric Power Authority, Revenue, 6.000% 07/01/14 2.5% ------------------------------------------------- 3 Port Oakland, California, Port Revenue Refunding, Series 1997H, AMT, (MBIA Insured), 5.500% 11/01/15 2.4% ------------------------------------------------- 4 Beverly Hills, California, Public Financing Authority, Lease Revenue, (Capital Imports Project) Series 1998A, 5.000% 06/01/23 2.3% ------------------------------------------------- 5 Southern California, Public Power Authority, Power Revenue, Series 1989, 6.750% 07/01/13 2.2% ------------------------------------------------- 6 California State, Public Works Board, Lease Revenue, (Department of Corrections State Prison Project) Series 1993E, 5.500% 06/01/19 1.9% ------------------------------------------------- 7 University of California, Hospital Revenue, (University of California Medical Center Project) Series 1996, (AMBAC Insured), 5.750% 07/01/24 1.9% ------------------------------------------------- 8 San Jose Redevelopment Agency, California, Tax Allocation, (Merged Area Redevelopment Project) Series 1993, (MBIA Insured), 6.000% 08/01/15 1.9% ------------------------------------------------- 9 California, Statewide Communities Development Authority, Apartment Development Revenue Refunding, (Irvine Apartment Communities Project) Series 1998A-4, Mandatory Put 05/15/13 @ 100, 5.250% 05/15/25 1.9% ------------------------------------------------- 10 Puerto Rico, Electric Power Authority, Power Revenue, Series 2000HH, (FSA Insured), 5.250% 07/01/29 1.9% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
21 NATIONS CALIFORNIA MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS CALIFORNIA MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX --------------------------------- --------------------------- Mar. 31|1992 9525.00 10000.00 1993 10743.00 11252.00 1994 10979.00 11513.00 1995 11607.00 12368.00 1996 12401.00 13405.00 1997 13017.00 14136.00 1998 14408.00 15651.00 1999 15362.00 16621.00 2000 15150.00 16608.00 2001 16655.00 18421.00 Mar. 31|2002 17063.00 19123.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS CALIFORNIA MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX --------------------------------- --------------------------- Mar. 31|1992 10000.00 10000.00 1993 11279.00 11252.00 1994 11526.00 11513.00 1995 12186.00 12368.00 1996 13019.00 13405.00 1997 13666.00 14136.00 1998 15126.00 15651.00 1999 16128.00 16621.00 2000 15906.00 16608.00 2001 17486.00 18421.00 Mar. 31|2002 17914.00 19123.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
10-YEAR NAV** MOP* (3/31/92 through 3/31/02) 6.00% 5.49%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations California Municipal Bond Fund over the last 10 years. The Lehman Municipal Bond Index is a broad-based, unmanaged index consisting of over 40,000 tax-free, investment grade bonds with a maturity of one year or greater. All interest is reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B++ INVESTOR C PRIMARY A+ NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 5/21/99 3/30/84 7/15/98 7/29/99 ------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 2.85% 2.45% -2.39% 1.68% -3.20% 1.82% 0.84% ------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 3.74% 3.56% 1.89% 2.83% 1.92% -- -- 5 YEARS 5.67% 5.56% 4.54% 4.94% 4.60% -- -- 10 YEARS 6.06% 6.00% 5.49% 5.69% 5.69% -- -- SINCE INCEPTION 7.39% 7.36% 7.07% 7.18% 7.18% 4.08% 4.08%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 4.75%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. +Primary A Shares commenced operations on May 21, 1999 and have no performance prior to that date. Performance prior to May 21, 1999 is that of Investor A Shares at NAV, which reflect 12b-1 fees of 0.25%. These 12b-1 fees are not applicable to Primary A Shares. Inception date for Investor A Shares is March 30, 1984. ++Investor B Shares commenced operations on July 15, 1998 and have no performance prior to that date. Performance prior to July 15, 1998 is that of Investor A Shares at NAV, which reflect 12b-1 fees of 0.25%. If Investor B Shares 12b-1 fees had been reflected, total returns would have been lower. Inception date for Investor A Shares is March 30, 1984. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 22 NATIONS FLORIDA INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal income and the Florida state intangibles taxes consistent with moderate fluctuation of principal. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Florida Intermediate Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.03%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS FLORIDA INTERMEDIATE MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of Florida municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As an intermediate-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity between three and ten years and a duration of between three and six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.03%, Nations Florida Intermediate Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper Florida Intermediate Municipal Debt Funds Average, which returned 2.99% for the 12-month period ended March 31, 2002. The Fund benefited from a longer duration stance than its peer group and an over-weighting in general obligation and hospital revenue bonds. The Fund has been moving to a more defensive mode, as we have been adding higher premium cushion bonds (bonds containing some call protection) and trading up in quality where possible. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN FLORIDA? The state of Florida has been rated "Aa" by Moody's Investors Services with a negative outlook, "AA+" by Standard & Poor's Corporation with a stable outlook and "AA" by Fitch, Inc. The key factors in the state's long-term creditworthiness --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 3.25%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Florida Intermediate Municipal Debt Funds Average invest at least 65% of their assets in municipal debt issues that are exempt from taxation in Florida, with dollar-weighted average maturities of five to ten years. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 23 NATIONS FLORIDA INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued are a growing and diversifying economy, excellent prospects for future growth, and despite recent pressures, a long history of strong financial management. The largest sectors in the state's economy are retail trade, health services, finance, insurance and real estate and construction. Tourism, while not considered a formal sector is a leading industry in the state and drives collections of the gross receipts tax (sales tax), the state's principal source of revenue. Tourism has fallen off as a result of the recession and the events of September 11, 2001. There are, however, some significant signs of a turnaround, including an increase in airline traffic. Also, from a long-term perspective both employment and population numbers have been increasing. Concern is often expressed about the relatively large percentage of people over the age of 65. Based on the 2000 census, this population is only 17.6% versus 12.4% for the nation. Additionally, these retirees have brought a stable source of income of transfer payments, which help insulate the state's economy from business cycles. As of January 2002, the state had a budget reserve of $941 million, which is approximately 5% of the estimated 2003 budget. For the 2002 fiscal year, the state anticipates a deficit of $930 million. During the later part of 2001, the state held a special session of the legislature to address this deficit. As a result, the budget was balanced with $1 billion in expense cuts, a delay in cutting the intangibles tax and a reserve draw down (from reserves other than the budget reserve) of $300 million. These actions left the budget reserve untouched and intact. WHAT IS YOUR OUTLOOK FOR FLORIDA AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? A key challenge for the state is rapid population growth, which requires infrastructure spending -- particularly for schools. Ideally, expenses may be met without impairing state finances. The state responded to this need by establishing a public education bond program, which is funded using a first and second lien on utility gross receipts tax. The state has exhibited a long history of coping successfully with growth pressures and cost containment issues, as evidenced by their ability to accumulate large reserves. It is hoped that this success continues. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain a slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rate. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat cheap compared to U.S. Treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible since we think that state and local governments may likely see budget surpluses evaporate and, consequently, the need to issue additional debt increase throughout 2002. 24 NATIONS FLORIDA INTERMEDIATE MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 15.7% General Obligation 15.2% Prerefunded 14.3% Hospital 12.0% Transportation 10.7% Housing 9.7% Water 7.4% Special tax 4.4% Electric 3.1% Industrial development revenue/Pollution control revenue 7.5% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Orange County, Florida, Tourist Development Tax Revenue Refunding, Series 1998A, (AMBAC Insured), 4.750% 10/01/24 3.2% ------------------------------------------------- 2 Orlando, Florida, Utilities Commission, Water and Electric Revenue Refunding, Series 2001, 5.000% 10/01/09 2.7% ------------------------------------------------- 3 Florida State, Division of Bond Financing, Department of General Services Revenue, (Department of Natural Resources -- Preservation 2000 Project) Series 1993A, (FSA Insured), Prerefunded 07/01/03 @ 101, 5.300% 07/01/06 2.5% ------------------------------------------------- 4 Orange County, Florida, Health Facilities Authority, Revenue, (Orlando Regional Healthcare Project) Series 1996A, (MBIA Insured), 6.250% 10/01/08 2.3% ------------------------------------------------- 5 Palm Beach County, Florida, Housing Finance Authority, Single-Family Mortgage Revenue Refunding, Series 1999A, AMT, (GNMA/FNMA COLL), 4.850% 04/01/32 1.9% ------------------------------------------------- 6 Jacksonville, Florida, Health Facilities Authority, Hospital Revenue, Series 1997B, 5.400% 08/15/18 1.9% ------------------------------------------------- 7 Arlington County, Virginia, Industrial Development Authority, Hospital Facility Revenue, (Virginia Hospital Arlington Health Systems Project), Series 2001, 5.500% 07/01/14 1.9% ------------------------------------------------- 8 Florida, Housing Finance Agency, Multi-Family Housing Revenue Refunding, (Altamonte Project) Series 1994C, Mandatory Put 12/01/03 @ 100, 7.000% 12/01/24 1.8% ------------------------------------------------- 9 Florida State, Board of Education, Public Education Capital Outlay GO, Series 1993D, 5.200% 06/01/11 1.8% ------------------------------------------------- 10 Dade County, Florida, Aviation Revenue, (Miami International Airport Project) Series 1997B, AMT, (FSA Insured), 5.000% 10/01/06 1.7% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
25 NATIONS FLORIDA INTERMEDIATE MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS FLORIDA INTERMEDIATE LEHMAN 7-YEAR MUNICIPAL BOND MUNICIPAL BOND FUND INDEX ---------------------------- ---------------------------- Dec. 14| 1992 9675.00 10000.00 1993 10793.00 11136.00 1994 10329.00 10828.00 1995 11783.00 12359.00 1996 12199.00 12898.00 1997 13053.00 13888.00 1998 13727.00 14764.00 1999 13604.00 14743.00 2000 14693.00 16083.00 2001 15358.00 16920.00 Mar. 31|2002 15435.00 17080.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS FLORIDA INTERMEDIATE LEHMAN 7-YEAR MUNICIPAL BOND MUNICIPAL BOND FUND INDEX ---------------------------- ---------------------------- Dec. 14| 1992 10000 10000 1993 11156 11136 1994 10676 10828 1995 12179 12359 1996 12609 12898 1997 13491 13888 1998 14188 14764 1999 14061 14743 2000 15187 16083 2001 15874 16920 Mar. 31|2002 15953 17080
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (12/14/92 through 3/31/02) 5.15% 4.78%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Florida Intermediate Municipal Bond Fund from the inception of the share class. The Lehman 7-Year Municipal Bond Index is a broad-based, unmanaged index of investment grade bonds with maturities of 7 to 8 years. All dividends are reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 12/11/92 12/14/92 6/7/93 12/17/92 --------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.28% 3.03% -0.33% 2.26% -0.70% 2.12% 1.14% --------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.08% 3.80% 2.67% 3.08% 2.77% 3.07% 3.07% 5 YEARS 5.14% 4.88% 4.19% 4.21% 4.21% 4.20% 4.20% SINCE INCEPTION 5.37% 5.15% 4.78% 4.28% 4.28% 4.60% 4.60%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 3.25%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 26 NATIONS FLORIDA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal income and the Florida state intangibles taxes with the potential for principal fluctuation associated with investments in long-term municipal securities. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Florida Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.29%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS FLORIDA MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of Florida municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As a long-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity greater than seven years and a duration of more than six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.29%, Nations Florida Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper Florida Municipal Debt Funds Average, which returned 3.14% for the 12-month period ended March 31, 2002. The Fund benefited from a longer duration stance than its peer group and an over-weighting in general obligation and hospital revenue bonds. The Fund has been moving to a more defensive mode, as we have been adding higher-premium cushion bonds (bonds containing some call protection) and "trading up" in quality where possible. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN FLORIDA? The state of Florida has been rated "Aa" by Moody's Investors Services with a negative outlook, "AA+" by Standard & Poor's Corporation with a stable outlook and "AA" by Fitch, Inc. The key factors in the state's long-term creditworthiness --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 4.75%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Florida Municipal Debt Funds Average limit their assets to those securities that are exempt from taxation in Florida. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 27 NATIONS FLORIDA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued are a growing and diversifying economy, excellent prospects for future growth and, despite recent pressures, a long history of strong financial management. The largest sectors in the state's economy are retail trade, health services, finance, insurance and real estate and construction. Tourism, while not considered a formal sector, is a leading industry in the state and drives collections of the gross receipts tax, or sales tax, the state's principal source of revenue. Tourism has fallen off as a result of the recession and the events of September 11, 2001. However, there are, we believe, significant signs of an economic turnaround. For example, airline traffic has been rising. Also, from a long-term perspective, both employment and population have been increasing. Concern is often expressed about the relatively large percentage of people over the age of 65. Based on the 2000 census, this population is only 17.6% versus 12.4% for the nation. In addition, these retirees have brought a stable source of income of transfer payments, which help insulate the state's economy from business cycles. As of January 2002, the state had a budget reserve of $941 million, which is approximately 5% of the estimated 2003 budget. For the fiscal year 2002, the state anticipates a deficit of $930 million. During the later part 2001 the state held a special session of the legislature to address this deficit. As a result, the budget was balanced with $1 billion in expense cuts, a delay in cutting the intangibles tax and a reserve draw down (from reserves other than the budget reserve) of $300 million. These actions left the budget reserve untouched and intact. WHAT IS YOUR OUTLOOK FOR FLORIDA AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? A key challenge for the state is rapid population growth, which requires infrastructure spending -- particularly for schools. Ideally, expenses may be met without impairing state finances. The state responded to this need by establishing a public education bond program, which is funded using a first and second lien on utility gross receipts tax. The state has exhibited a long history of coping successfully with growth pressures and cost containment issues, as evidenced by their ability to accumulate large reserves. It is hoped that this success continues. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat cheap compared to U.S. Treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible since we think that state and local governments may likely see budget surpluses evaporate and, consequently, the need to issue additional debt increase throughout 2002. 28 NATIONS FLORIDA MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 21.2% Prerefunded 13.7% Hospital 11.2% General obligation 9.5% Transportation 9.1% Electric 7.5% Housing 7.4% Special tax 5.1% Resource recovery 3.4% Industrial development revenue/Pollution control revenue 11.9% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Palm Beach County, Florida, Solid Waste Authority, Revenue, Unrefunded Balance, Series 1997A, (AMBAC Insured), 6.000% 10/01/10 4.3% ------------------------------------------------- 2 Okaloosa County, Florida, Gas Distribution Revenue Refunding, Series 1994, (MBIA Insured), Prerefunded 10/01/04 @ 102, 6.875% 10/01/19 4.3% ------------------------------------------------- 3 Jacksonville, Florida, Sales Tax Revenue, (River City Renaissance Project) Series 1995, (FGIC Insured), Prerefunded 10/01/05 @ 101, 5.650% 10/01/14 4.2% ------------------------------------------------- 4 Collier County, Florida, Health Facilities Authority, Revenue Refunding, (Moorings, Inc. Project) Series 1994, 7.000% 12/01/19 4.2% ------------------------------------------------- 5 Puerto Rico Commonwealth, GO, Series 1997, (MBIA Insured), 6.500% 07/01/15 3.8% ------------------------------------------------- 6 Pinellas County, Florida, Capital Improvement Revenue, Series 2000, 4.500% 01/01/06 3.2% ------------------------------------------------- 7 South Miami, Florida, Health Facilities Authority, Hospital Revenue Refunding, (Baptist Health Systems Obligation Group Project) Series 1995, (MBIA Insured), 5.375% 10/01/16 3.1% ------------------------------------------------- 8 Orange County, Florida, Health Facilities Authority, Revenue, Series 1996A, (MBIA Insured), 6.250% 10/01/16 2.9% ------------------------------------------------- 9 Gainesville, Florida, Utility Systems Revenue, Series 1992B, 6.500% 10/01/11 2.7% ------------------------------------------------- 10 Miami-Dade County, Florida, Aviation Revenue, Series 1998C, AMT, (MBIA Insured), 5.250% 10/01/15 2.7% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
29 NATIONS FLORIDA MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS FLORIDA MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX ------------------------------ --------------------------- Dec. 10| 1993 9525.00 10000.00 1993 9522.00 10211.00 1994 8739.00 9683.00 1995 10456.00 11374.00 1996 10765.00 11877.00 1997 11704.00 12969.00 1998 12362.00 13808.00 1999 12020.00 13524.00 2000 13348.00 15103.00 2001 13955.00 15878.00 Mar. 31|2002 14053.00 16027.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS FLORIDA MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX ------------------------------ --------------------------- Dec. 10| 1993 10000.00 10000.00 1993 9997.00 10211.00 1994 9174.00 9683.00 1995 10977.00 11374.00 1996 11302.00 11877.00 1997 12288.00 12969.00 1998 12979.00 13808.00 1999 12619.00 13524.00 2000 14014.00 15103.00 2001 14651.00 15878.00 Mar. 31|2002 14754.00 16027.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (12/10/93 through 3/31/02) 4.80% 4.18%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Florida Municipal Bond Fund from the inception of the share class. The Lehman Municipal Bond Index is a broad-based, unmanaged index consisting of over 40,000 tax-free, investment grade bonds with a maturity of one year or greater. All interest is reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 12/13/93 12/10/93 10/22/93 11/3/94 --------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.55% 3.29% -1.64% 2.52% -1.41% 2.51% 1.53% --------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.57% 4.32% 2.63% 3.56% 2.63% 3.49% 3.49% 5 YEARS 5.81% 5.58% 4.56% 4.85% 4.68% 4.83% 4.83% SINCE INCEPTION 5.09% 4.80% 4.18% 4.11% 4.11% 6.41% 6.41%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 4.75%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 30 NATIONS GEORGIA INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal and Georgia state income taxes consistent with moderate fluctuation of principal. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Georgia Intermediate Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.24%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS GEORGIA INTERMEDIATE MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of Georgia municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As an intermediate-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of between three and ten years and a duration of between three and six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.24%, Nations Georgia Intermediate Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper Other States Intermediate Municipal Debt Funds Average, which returned 2.78% for the 12-month period ended March 31, 2002. The Fund benefited from a longer duration stance than its peer group and an over-weighting in general obligation and hospital revenue bonds. The Fund has been moving to a more defensive mode, as we have been adding higher premium cushion bonds (bonds containing some call protection) and "trading up" in quality where possible. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN GEORGIA? The state of Georgia has earned the highest possible credit rating from Moody's Investors Services of "Aaa," "AAA" from Standard & Poor's Corporation and "AAA" from Fitch, Inc. The rating is based on the state's economic strength and diversification, which is a product of consistent population and employment growth --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 3.25%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Other States Intermediate Municipal Debt Funds Average invest in municipal debt issues with dollar-weighted average maturities of five to ten years and are exempt from taxation on a specified state basis. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 31 NATIONS GEORGIA INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued trends. Growth ratios for both trends have outperformed the national averages over the past twenty years. Georgia's employment growth has ranged between 2.8% to 3.0% during this period. Recent data shows a 2.7% decline in employment over twelve months, with the manufacturing sector experiencing the largest fall while comprising only 14% of the employment base. Georgia's strength is its services sector, comprising 80% of the employment base, including business and health, which are expected to remain the dominant job creators. Employment growth has been projected to slow over the next five years, but both employment and economic growth trends, we believe, are expected to continue to outpace the nation over the same five-year period. Atlanta continues to serve as Georgia's growth engine and accounts for 54% of Georgia's population and jobs. The state of Georgia's financial performance remains strong despite a lag in revenue collections from its fiscal 2001. The 2002 budget forecasted a 1.7% decline in revenue collections and a $700 million structural deficit, compelling the governor to balance the budget by directing state agencies to reduce spending by 2.5% for the remainder of the state's fiscal year 2002 and to cut 5% from the state's 2003 budget requests. These remedies appear to have balanced the state's current fiscal year's budget, but future uncertainties exist and new actions may be required. In addition, the state maintains over $1.0 billion in reserves, which reduces cyclical pressures. Recent legislation further expanded the state's reserve maximum to 5% from 4% of revenues. WHAT IS YOUR OUTLOOK FOR GEORGIA AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? Future challenges for Georgia include keeping pace with expected future population growth (even though it is projected to slow down), keeping stable financial performance and maintaining adequate reserve levels. Short-term pressure may remain if revenue collections -- which are anticipated to recover an estimated 5% in the state's fiscal year 2002 -- continue to lag. We expect that the services sectors may perform well if the economy improves and could provide Georgia with stable revenue collections. Atlanta will continue to serve Georgia and the Southeast region as an economic hub even with cyclical changes. We believe the long-term challenges of the state will be met successfully. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain a slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 32 NATIONS GEORGIA INTERMEDIATE MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 27.2% General obligation 11.7% Hospital 11.6% Industrial development revenue/ Pollution control revenue 10.5% Prerefunded 9.2% Water 8.6% Transportation 5.7% Education 4.5% Electric 3.0% Housing 8.0% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 DeKalb County, Georgia, Development Authority, Revenue, (Emory University Project) Series 1994A, 6.000% 10/01/14 2.7% ------------------------------------------------- 2 Georgia, George L. Smith II World Congress Center Authority, Revenue Refunding, (Domed Stadium Project) Series 2000, AMT, (MBIA Insured), 6.000% 07/01/05 2.7% ------------------------------------------------- 3 Effingham County, Georgia, Development Authority, Solid Waste Disposal Revenue, (Fort James Corporation Project) Series 1998, AMT, 5.625% 07/01/18 2.5% ------------------------------------------------- 4 Monroe County, Georgia, Development Authority, PCR, (Georgia Power Company Plant Scherer Project) Series 2001, (AMBAC Insured), Mandatory Put 12/01/08 @ 100, 4.200% 01/01/12 2.5% ------------------------------------------------- 5 Atlanta, Georgia, Airport Facilities Revenue Refunding, Series 2000A, (FGIC Insured), 5.600% 01/01/30 2.3% ------------------------------------------------- 6 Clayton County, Georgia, Hospital Authority, Revenue Anticipation Certificates, (Southern Regional Medical Center Project) Series 1998A, (MBIA Insured), 5.250% 08/01/09 2.1% ------------------------------------------------- 7 Fulton County, Georgia, Housing Authority, Multi-Family Housing Revenue, (Concorde Place Apartments Project) Series 1996A, AMT, Prerefunded 07/01/08 @ 100, 6.375% 01/01/27 2.1% ------------------------------------------------- 8 Metropolitan Atlanta Rapid Transit Authority, Georgia, Revenue Refunding, Series 1992P, (AMBAC Insured), 5.900% 07/01/03 2.0% ------------------------------------------------- 9 Georgia State, GO, Series 1993C, 6.500% 07/01/05 1.9% ------------------------------------------------- 10 Bibb County, Georgia, GO, Series 1993, 5.500% 01/01/08 1.8% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
33 NATIONS GEORGIA INTERMEDIATE MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS GEORGIA INTERMEDIATE LEHMAN 7-YEAR MUNICIPAL BOND MUNICIPAL BOND FUND INDEX ---------------------------- ---------------------------- May 4 1992 9675.00 10000.00 1993 11528.00 11839.00 1994 10976.00 11511.00 1995 12521.00 13139.00 1996 12953.00 13712.00 1997 13856.00 14765.00 1998 14602.00 15696.00 1999 14374.00 15673.00 2000 15528.00 17098.00 2001 16350.00 17987.00 Mar. 31 2002 16404.00 18158.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS GEORGIA INTERMEDIATE LEHMAN 7-YEAR MUNICIPAL BOND MUNICIPAL BOND FUND INDEX ---------------------------- ---------------------------- May 4 1992 10000.00 10000.00 1993 11915.00 11839.00 1994 11345.00 11511.00 1995 12942.00 13139.00 1996 13388.00 13712.00 1997 14321.00 14765.00 1998 15092.00 15696.00 1999 14857.00 15673.00 2000 16050.00 17098.00 2001 16899.00 17987.00 Mar. 31 2002 16955.00 18158.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (5/4/92 through 3/31/02) 5.47% 5.12%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Georgia Intermediate Municipal Bond Fund from the inception of the share class. The Lehman 7-Year Municipal Bond Index is a broad-based, unmanaged index of investment grade bonds with maturities of 7 to 8 years. All dividends are reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 3/1/92 5/4/92 6/7/93 6/17/92 --------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.50% 3.24% -0.09% 2.47% -0.50% 2.46% 1.47% --------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.07% 3.81% 2.67% 3.06% 2.75% 3.03% 3.03% 5 YEARS 5.16% 4.92% 4.22% 4.23% 4.23% 4.21% 4.21% 10 YEARS 5.70% -- -- -- -- -- -- SINCE INCEPTION 5.66% 5.47% 5.12% 4.23% 4.23% 4.75% 4.75%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 3.25%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 34 NATIONS GEORGIA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal and Georgia state income taxes with the potential for principal fluctuation associated with investments in long-term municipal securities. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Georgia Municipal Bond Fund Investor A Shares provided shareholders with a total return of 2.62%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS GEORGIA MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of Georgia municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As long-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity greater than seven years and a duration of more than six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 2.62%, Nations Georgia Municipal Bond Fund (Investor A Shares) slightly underperformed its peer group average, the Lipper Georgia Municipal Debt Funds Average, which returned 2.73% for the 12-month period ended March 31, 2002. The Fund benefited from a longer duration stance than its peer group and an overweighting in general obligation and hospital revenue bonds. The Fund has been moving to a more defensive mode as we have been adding higher premium cushion bonds (bonds containing some call protection) and "trading up" in quality where possible. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN GEORGIA? The state of Georgia has earned the highest possible credit rating from Moody's Investors Services of "Aaa," "AAA" from Standard & Poor's Corporation and "AAA" from Fitch, Inc. The rating is based on the state's economic strength and diversification, which is a product of consistent population and employment growth --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 4.75%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Georgia Municipal Debt Funds Average limit their assets to those securities that are exempt from taxation in Georgia. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 35 NATIONS GEORGIA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued trends. Growth ratios for both trends have outperformed the national averages over the past twenty years. Georgia's employment growth has ranged between 2.8% to 3.0% during this period. Recent data shows a 2.7% decline in employment over twelve months, with the manufacturing sector experiencing the largest fall while comprising only 14% of the employment base. Georgia's strength is its services sector, comprising 80% of the employment base, including business and health, which are expected to remain the dominant job creators. Employment growth has been projected to slow over the next five years, but both employment and economic growth trends, we believe, are expected to continue to outpace the nation over the same five-year period. Atlanta continues to serve as Georgia's growth engine and accounts for 54% of Georgia's population and jobs. The state of Georgia's financial performance remains strong despite a lag in revenue collections from the state's fiscal 2001. The 2002 budget forecasted a 1.7% decline in revenue collections and a $700 million structural deficit, compelling the governor to balance the budget by directing state agencies to reduce spending by 2.5% for the remainder of the state's fiscal year 2002 and to cut 5% from the state's 2003 budget requests. These remedies appear to have balanced the state's current fiscal year's budget, but future uncertainties exist and new actions may be required. In addition, the state maintains over $1.0 billion in reserves, which reduces cyclical pressures. Recent legislation further expanded the state's reserve maximum to 5% from 4% of revenues. WHAT IS YOUR OUTLOOK FOR GEORGIA AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? Future challenges for Georgia include keeping pace with expected future population growth (even though it is projected to slow down), keeping stable financial performance and maintaining adequate reserve levels. Short-term pressure may remain if revenue collections -- which are anticipated to recover an estimated 5% in the state's fiscal year 2002 -- continue to lag. We expect that the services sectors may perform well, if the economy improves and could provide Georgia with stable revenue collections. Atlanta will continue to serve Georgia and the Southeast region as an economic hub even with cyclical changes. We believe the long-term challenges of the state will be met successfully. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain a slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to U.S. Treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 36 NATIONS GEORGIA MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 20.0% Housing 16.6% Hospital 15.6% General obligation 12.2% Industrial development revenue/ Pollution control revenue 10.4% Transportation 8.7% Prerefunded 4.4% Education 4.3% Water 4.0% Electric 3.8% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Clayton County, Georgia Housing Authority, Multifamily Housing Revenue Refunding, (Tara Court II Apartments Project) Series 2001, (FNMA Liquidity Facility), Mandatory Put 12/01/11 @ 100, 4.350% 12/01/31 7.9% ------------------------------------------------- 2 Atlanta, Georgia, Airport Facilities Revenue Refunding, Series 2000A, (FGIC Insured), 5.600% 01/01/30 6.2% ------------------------------------------------- 3 Forsyth County, Georgia, School District, GO, Series 1999, 6.000% 02/01/15 4.5% ------------------------------------------------- 4 Georgia State, GO, Series 1999D, 5.800% 11/01/13 4.4% ------------------------------------------------- 5 Georgia State, Housing and Finance Authority, Single-Family Mortgage Revenue, Series 1999B-2, AMT, 6.100% 06/01/31 4.4% ------------------------------------------------- 6 DeKalb County, Georgia, Development Authority, Revenue, (Emory University Project) Series 1994A, 6.000% 10/01/14 4.4% ------------------------------------------------- 7 Henry County, Georgia, Hospital Authority, Revenue, (Henry Medical Center Project) Series 1997, (AMBAC Insured), 6.000% 07/01/29 4.3% ------------------------------------------------- 8 Roswell, Georgia, GO, Series 1995, 5.600% 02/01/10 4.3% ------------------------------------------------- 9 Fulco, Georgia, Hospital Authority, Revenue Anticipation Certificates, (St. Joseph Hospital Project) Series 1994, 5.500% 10/01/14 4.3% ------------------------------------------------- 10 Clayton County, Georgia, Water and Sewer Authority, Revenue, Series 2000, 5.600% 05/01/18 4.3% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
37 NATIONS GEORGIA MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS GEORGIA MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX ------------------------------ --------------------------- Dec. 30 1993 9525.00 10000.00 1994 8705.00 9483.00 1995 10396.00 11139.00 1996 10729.00 11632.00 1997 11646.00 12701.00 1998 12377.00 13523.00 1999 11915.00 13244.00 2000 13230.00 14791.00 2001 13802.00 15550.00 Mar. 31 2002 13853.00 15696.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS GEORGIA MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX ------------------------------ --------------------------- Dec. 30 1993 10000.00 10000.00 1994 9139.00 9483.00 1995 10915.00 11139.00 1996 11264.00 11632.00 1997 12227.00 12701.00 1998 12994.00 13523.00 1999 12509.00 13244.00 2000 13890.00 14791.00 2001 14490.00 15550.00 Mar. 31 2002 14544.00 15696.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (12/30/93 through 3/31/02) 4.65% 4.03%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Georgia Municipal Bond Fund from the inception of the share class. The Lehman Municipal Bond Index is a broad-based, unmanaged index consisting of over 40,000 tax-free, investment grade bonds with a maturity of one year or greater. All interest is reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 1/13/94 12/30/93 10/21/93 11/3/94 ------------------------------------------------------------------------------------------------------------------------------ 1 YEAR PERFORMANCE 2.98% 2.62% -2.25% 1.96% -1.97% 1.96% 0.97% ------------------------------------------------------------------------------------------------------------------------------ AVERAGE ANNUAL RETURNS 3 YEARS 3.92% 3.64% 1.98% 2.91% 1.99% 2.87% 2.87% 5 YEARS 5.59% 5.33% 4.32% 4.63% 4.46% 4.61% 4.61% SINCE INCEPTION 4.85% 4.65% 4.03% 4.00% 4.00% 6.30% 6.30%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 4.75%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 38 NATIONS KANSAS MUNICIPAL INCOME FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal and Kansas state income taxes consistent with moderate fluctuation of principal. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Kansas Municipal Income Fund Investor A Shares provided shareholders with a total return of 2.49%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS KANSAS MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of Kansas municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As an intermediate-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of between three and ten years and a duration of between three and eight years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 2.49%, Nations Kansas Municipal Income Fund (Investor A Shares) underperformed its peer group average, the Lipper Other States Intermediate Municipal Debt Funds Average, which returned 2.78% for the 12-month period ended March 31, 2002. The underperformance of the Fund can be attributed to the overweighting in the transportation sector of the market. Bonds backed by American Airlines and Emery Worldwide dramatically underperformed in terms of price performance in the latter half of 2001. We continue to feel confident, however, that the bonds will remain secure. We expect the value that was lost in 2001 may be recovered over time as the transportation sector returns to historical capacity levels. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN KANSAS? The state of Kansas does not directly issue general obligation bonds and, therefore, does not have a general obligation rating. Standard & Poor's Corporation does assign the state an issuer rating of "AA+" based on a relatively diverse economic --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 3.25%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effects of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total reviews would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Other States Intermediate Municipal Debt Funds Average invest in municipal debt issues with dollar-weighted average maturities of five to ten years and are exempt from taxation on a specified state basis. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 39 NATIONS KANSAS MUNICIPAL INCOME FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued base, conservative financial management, a low yet growing debt burden and good liquidity ensured by mandated cash reserves. Moody's Investors Services rating of "Aa2" and Fitch, Inc.'s rating of "AA" of the state's Department of Transportation (issues bonds to fulfill state goals) may serve as an indication of the credit opinion of the state by those rating agencies. Although much of the state is rural and the state accounts for 20% of the nation's wheat production, agriculture now accounts for only a small part of the state's overall economy. Transportation equipment, particularly airplane manufacturing, maintains a strong presence in the economy with Cessna, Raytheon, Boeing, and Bombadier, although this sector has been hurt by the events of September 11, 2001. Cutbacks at Sprint have also hurt the state's telecommunications sector. The state has a long history of sound finances, but in recent years tax cuts and rising expenditures have finally led to deficits made worse by the national recession. As a result, the governor has proposed major budget cuts and various tax hikes in order to return reserve levels back to mandated levels of 7.5% -- from 4% -- of expenditures. WHAT IS YOUR OUTLOOK FOR KANSAS AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? The state has recognized the key issues of balancing the need to provide government services while looking to bring the budget back into balance and maintain strong cash reserves. It may continue to struggle with weakness in its agricultural, airplane manufacturing and telecommunications sectors. Individual localities, as well, may continue to struggle due to their heavy reliance on agriculture. We believe the state could successfully meet these challenges. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to U.S. Treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 40 NATIONS KANSAS MUNICIPAL INCOME FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 26.2% General obligation 19.1% Prerefunded 18.2% Hospital 10.1% Lease 6.9% Water 5.5% Transportation 3.5% Education 3.1% Industrial development revenue/Pollution control revenue 2.1% Housing 5.3% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Kansas State, Development Financing Authority, Revenue, (Board of Regents Rehabilitation Project) Series 1997G-2, 5.000% 10/01/10 10.1% ------------------------------------------------- 2 Kansas State, Development Financing Authority, Health Facilities Revenue, (Sisters of Charity Project) Series 2000J, 6.250% 12/01/28 4.3% ------------------------------------------------- 3 Johnson County, Kansas, Unified School District Number 233, GO, Series 1999A, (FGIC Insured), 5.375% 09/01/14 2.8% ------------------------------------------------- 4 Kansas State, Development Financing Authority, Revenue, (Public Water Supply Revolving Project) Series 1997, (AMBAC Insured), 5.000% 04/01/17 2.4% ------------------------------------------------- 5 Kansas City, Kansas, Utilities System Revenue, Series 1994, (FGIC Insured), Prerefunded 09/01/04@102, 6.375% 09/01/23 2.4% ------------------------------------------------- 6 Calhoun County, South Carolina, Solid Waste Disposal Facility Revenue, (Carolina Eastman Company Project) Series 1992, AMT, 6.750% 05/01/17 2.3% ------------------------------------------------- 7 Sabine River, Texas, Pollution Control Authority, Revenue Refunding, (Texas University Electric Company Project) Series 2001A, Mandatory Put 11/01/11@100, 5.500% 05/01/22 2.3% ------------------------------------------------- 8 Kansas State, Development Financing Authority, Revenue, (Regents-Wichita University Project) Series 2000B, (AMBAC Insured), 5.900% 04/01/15 2.1% ------------------------------------------------- 9 Leavenworth County, Kansas, GO, Series 1997A, (AMBAC Insured), 4.900% 12/01/06 2.1% ------------------------------------------------- 10 Oklahoma, Housing Development Authority, Revenue, Series 2000A, (FHLMC COLL), 5.100% 11/01/05 2.0% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
41 NATIONS KANSAS MUNICIPAL INCOME FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS KANSAS MUNICIPAL INCOME LEHMAN 7-YEAR MUNICIPAL BOND FUND INDEX ------------------------------- ---------------------------- Aug. 14 2000 9525.00 10000.00 9539.00 10000.00 9866.00 10909.00 2001 10064.00 11193.00 10128.00 11274.00 10312.00 11584.00 10240.00 11477.00 Mar. 31 2002 10314.00 11586.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS KANSAS MUNICIPAL INCOME LEHMAN 7-YEAR MUNICIPAL BOND FUND INDEX ------------------------------- ---------------------------- Aug. 14 2000 10000.00 10000.00 10015.00 10000.00 10358.00 10909.00 2001 10566.00 11193.00 10633.00 11274.00 10826.00 11584.00 10751.00 11477.00 Mar. 31 2002 10828.00 11586.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (8/14/00 through 3/31/02) 5.01% 2.88%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Kansas Municipal Income Fund from the inception of the share class. The Lehman 7-Year Municipal Bond Index is a broad-based, unmanaged index of investment grade bonds with maturities of 7 to 8 years. All dividends are reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A and Investor B Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B PRIMARY A NAV** MOP* NAV** CDSC*** Inception date 7/17/00 8/14/00 8/29/00 ---------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 2.84% 2.49% -0.87% 1.62% -3.28% ---------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS SINCE INCEPTION 5.53% 5.01% 2.88% 4.04% 1.56%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 3.25%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 42 NATIONS MARYLAND INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal and Maryland state income taxes consistent with moderate fluctuation of principal. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Maryland Intermediate Municipal Bond Fund Investor A Shares provided shareholders with a total return of 2.76%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS MARYLAND INTERMEDIATE MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of Maryland municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As an intermediate-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of between three and ten years and a duration of between three and six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 2.76%, Nations Maryland Intermediate Municipal Bond Fund (Investor A Shares) slightly underperformed its peer group, the Lipper Other States Intermediate Municipal Debt Funds Average, which returned 2.78% for the 12-month period ended March 31, 2002. The Fund benefited from a slightly shorter duration stance than its peer group and an over-weighting in hospital, industrial development revenue/pollution control revenue (IDR/PCR) bonds and general obligation bonds. The Fund has been moving to a more defensive structure as we have been adding bonds with a higher coupon and/or shorter duration and "trading up" in quality where possible. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN MARYLAND? The state of Maryland has earned the highest possible credit rating from Moody's Investors Services of "Aaa," "AAA" from Standard & Poor's Corporation and "AAA" from Fitch, Inc. Maryland has a diverse economy and is among the --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 3.25%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. *** Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Other States Intermediate Municipal Debt Funds Average invest in municipal debt issues with dollar-weighted average maturities of five to ten years and are exempt from taxation on a specified state basis. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 43 NATIONS MARYLAND INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued wealthiest states in the country. Service, trade and government sectors figure prominently into the state's economy. The 2001 state unemployment rate averaged 3.7%, which is better than national average, which rose to 4.5% after September 11, 2001. The state of Maryland's finances have historically been sound. For the last eight years, the state has been operating at a surplus. These surpluses have now accumulated to a $1 billion reserve fund which can prudently cushion the state against foreseeable, yet manageable, budget gaps expected for the next three years. The beginning of this trend has already occurred. For the state's fiscal year 2001, the general fund produced a surplus of $86 million, down from $392 million in the prior year. Revenues for the state's fiscal year 2002 have, to date, been slightly off of budgetary estimates. Some of the measures being discussed to make up the shortfall in revenue are modest expenditure cutbacks, the drawdown of a sizable portion of reserves and transitioning to funding capital projects. Maryland's legislature has also recommended, at the time of this writing, deferring scheduled personal income tax reductions for the fiscal year 2003. WHAT IS YOUR OUTLOOK FOR MARYLAND AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? A key challenge for the state and its local government units is to maintain infrastructure and economic development in light of spending reductions. As a high-wealth state, capital gains reported are below estimates made a year ago, and expenditures may need to be adjusted accordingly. Like many of its mid-Atlantic neighbors, Maryland is also experiencing one of the worst extended droughts seen since the 1930s. While this eased transportation and safety costs during the "light" winter, the less than anticipated rainfall is beginning to show signs of stressing the system. Over the long term, we believe these slumps are merely part of the normal course of the economic cycle and, we believe the state is positioned well to effectively meet these challenges. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 44 NATIONS MARYLAND INTERMEDIATE MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 39.4% General obligation 11.4% Transportation 10.2% Housing 7.9% Industrial development revenue/Pollution control revenue 6.7% Hospital 5.8% Water 5.2% Education 4.3% Prerefunded 9.1% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Maryland State, Department of Transportation, Series 2002, 5.500% 02/01/14 2.7% ------------------------------------------------- 2 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 2001, (FGIC Insured), 5.250% 12/01/11 2.6% ------------------------------------------------- 3 Prince Georges County, Maryland, GO, Construction Public Improvements, Series 2001, (FGIC Insured), 5.250% 12/01/12 2.5% ------------------------------------------------- 4 Maryland State, Transportation Authority, Transportation Revenue, Series 1992, 5.700% 07/01/05 2.1% ------------------------------------------------- 5 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 2001, (FGIC Insured), 5.250% 12/01/19 2.0% ------------------------------------------------- 6 Maryland State, Community Development Administration, Department of Housing and Community Development, Revenue, (Single-Family Program) Series 1998-3, AMT, 4.500% 04/01/08 2.0% ------------------------------------------------- 7 Crossett, Arkansas, PCR, (Georgia Pacific Corporation Project) Series 1984, 4.875% 10/01/07 1.9% ------------------------------------------------- 8 Montgomery County, Maryland, Consolidated Public Improvement GO, Series 1993A, 4.900% 10/01/07 1.8% ------------------------------------------------- 9 Washington Suburban Sanitation District Authority, Maryland, Water Supply GO Refunding, Series 1993, 5.100% 12/01/07 1.7% ------------------------------------------------- 10 University of Maryland, Systems Auxiliary Facilities and Tuition Revenue, Series 1996A, 5.600% 04/01/14 1.6% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
45 NATIONS MARYLAND INTERMEDIATE MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS MARYLAND INTERMEDIATE LEHMAN 7-YEAR MUNICIPAL BOND MUNICIPAL BOND FUND INDEX ----------------------------- ---------------------------- Mar. 31 1992 9675.00 10000.00 3/93 10652.00 11159.00 3/94 10866.00 11493.00 3/95 11450.00 12222.00 3/96 12255.00 13208.00 3/97 12698.00 13818.00 3/98 13665.00 15078.00 3/99 14344.00 15971.00 3/00 14335.00 16065.00 3/01 15599.00 17699.00 Mar. 31 2002 16030.00 18320.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS MARYLAND INTERMEDIATE LEHMAN 7-YEAR MUNICIPAL BOND MUNICIPAL BOND FUND INDEX ----------------------------- ---------------------------- Mar. 31 1992 10000.00 10000.00 3/93 11010.00 11159.00 3/94 11231.00 11493.00 3/95 11835.00 12222.00 3/96 12667.00 13208.00 3/97 13125.00 13818.00 3/98 14124.00 15078.00 3/99 14826.00 15971.00 3/00 14817.00 16065.00 3/01 16123.00 17699.00 Mar. 31 2002 16568.00 18320.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
10-YEAR NAV** MOP* (3/31/92 through 3/31/02) 5.18% 4.83%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Maryland Intermediate Municipal Bond Fund over the last 10 years. The Lehman 7-Year Municipal Bond Index is a broad-based, unmanaged index of investment grade bonds with maturities of 7 to 8 years. All dividends are reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 9/1/90 9/1/90 6/8/93 6/17/92 -------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.02% 2.76% -0.58% 1.99% -0.96% 1.98% 0.99% -------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.02% 3.77% 2.64% 3.02% 2.71% 2.99% 2.99% 5 YEARS 5.01% 4.77% 4.08% 4.08% 4.08% 4.06% 4.06% 10 YEARS 5.39% 5.18% 4.83% -- -- -- -- SINCE INCEPTION 5.89% 5.71% 5.40% 4.06% 4.06% 4.44% 4.44%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 3.25%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 46 NATIONS MARYLAND MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal and Maryland state income taxes with the potential for principal fluctuations associated with investments in long-term municipal securities. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Maryland Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.27%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS MARYLAND MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of Maryland municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As a long-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of greater than seven years and a duration of more than six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.27%, Nations Maryland Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper Maryland Municipal Debt Funds Average, which returned 3.01% for the 12-month period ended March 31, 2002. The Fund benefited from a longer duration stance than its peer group and an overweighting in general obligation and education bonds. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN MARYLAND? The state of Maryland has earned the highest possible credit rating from Moody's Investors Services of "Aaa," "AAA" from Standard & Poor's Corporation and "AAA" from Fitch, Inc. Maryland has a diverse economy and is among the wealthiest states in the country. Services, trade and government sectors figure prominently in the state's economy. The 2001 state unemployment rate averaged 3.7%, which is better than national average which rose to 4.5% after September 11, 2001. --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 4.75%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Maryland Municipal Debt Funds Average limit their assets to those securities that are exempt from taxation in Maryland. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 47 NATIONS MARYLAND MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued The state of Maryland's finances have historically been sound. For the last eight years, the state has been operating at a surplus. These surpluses have now accumulated to a $1 billion reserve fund which can prudently cushion the state against foreseeable, yet manageable, budget gaps expected for the next three years. The beginning of this trend has already occurred. For the state's fiscal year 2001, the general fund produced a surplus of $86 million, down from $392 million in the prior year. Revenues for the state's fiscal year 2002 have, to date, been slightly off of budgetary estimates. Some of the measures being discussed to make up the shortfall in revenue are modest expenditure cutbacks, the drawdown of a sizable portion of reserves and transitioning to funding capital projects. Maryland's legislature has also recommended, at the time of this writing, deferring scheduled personal income tax reductions for the fiscal year 2003. WHAT IS YOUR OUTLOOK FOR MARYLAND AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? A key challenge for the state and its local government units is to maintain infrastructure and economic development in light of spending reductions. As a high-wealth state, capital gains reported are below estimates made a year ago, and expenditures may need to be adjusted accordingly. Like many of its mid-Atlantic neighbors, Maryland is also experiencing one of the worst extended droughts seen since the 1930s. While this eased transportation and safety costs during the "light" winter, the less than anticipated rainfall is beginning to show signs of stressing the system. Over the long term, we believe these slumps are merely part of the normal course of the economic cycle and, we believe the state is positioned well to effectively meet these challenges. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 48 NATIONS MARYLAND MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 38.3% General obligation 17.9% Education 14.9% Housing 8.4% Hospital 6.4% Industrial development revenue/Pollution control revenue 3.8% Transportation 3.0% Prerefunded 2.5% Resource recovery 2.1% Electric 2.7% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 University of Maryland, Systems Auxiliary Facilities and Tuition Revenue, Series 1996A, 5.600% 04/01/13 6.7% ------------------------------------------------- 2 Maryland State, Health and Higher Education Facilities Authority, Revenue, (Johns Hopkins University Project) Series 1999, Prerefunded 07/01/09 @ 101, 6.000% 07/01/39 5.7% ------------------------------------------------- 3 Maryland State, Economic Development Corporation, Student Housing Revenue, (Salisbury Collegiate Housing Project) Series 1999A, 5.750% 06/01/29 5.1% ------------------------------------------------- 4 Howard County, Maryland, Consolidated Public Improvement GO, Series 2000A, 5.250% 02/15/17 5.0% ------------------------------------------------- 5 Montgomery County, Maryland, Consolidated Public Improvement GO, Series 1992A, 5.800% 07/01/07 4.2% ------------------------------------------------- 6 Maury County, Tennessee, Industrial Development Board, Multi-Modal PCR Refunding, (General Motors Corporation - Saturn Corporation Project) Series 1994, 6.500% 09/01/24 3.6% ------------------------------------------------- 7 Maryland State, Department of Transportation, Series 2002, 5.500% 02/01/11 3.5% ------------------------------------------------- 8 Wicomico County, Maryland, Public Improvement GO, Series 1997, (MBIA Insured), 4.800% 12/01/10 3.4% ------------------------------------------------- 9 Maryland State, Economic Development Corporation, Student Housing Revenue, (Salisbury Collegiate Housing Project) Series 1999A, 6.000% 06/01/30 3.0% ------------------------------------------------- 10 Harford County, Maryland, GO, Series 1997, 5.500% 12/01/07 2.8% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
49 NATIONS MARYLAND MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS MARYLAND MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX ------------------------------- --------------------------- Nov. 4 1993 9525.00 10000.00 1993 9767.00 10121.00 1994 8863.00 9598.00 1995 10551.00 11273.00 1996 10869.00 11773.00 1997 11848.00 12854.00 1998 12503.00 13687.00 1999 12202.00 13404.00 2000 13507.00 14970.00 2001 14174.00 15738.00 Mar. 31 2002 14240.00 15886.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS MARYLAND MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX ------------------------------- --------------------------- Nov. 4 1993 10000.00 10000.00 1993 10254.00 10121.00 1994 9305.00 9598.00 1995 11077.00 11273.00 1996 11411.00 11773.00 1997 12439.00 12854.00 1998 13126.00 13687.00 1999 12811.00 13404.00 2000 14181.00 14970.00 2001 14881.00 15738.00 Mar. 31 2002 14950.00 15886.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (11/4/93 through 3/31/02) 4.90% 4.29%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Maryland Municipal Bond Fund from the inception of the share class. The Lehman Municipal Bond Index is a broad-based, unmanaged index consisting of over 40,000 tax-free, investment grade bonds with a maturity of one year or greater. All interest is reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 9/20/94 11/4/93 10/21/93 11/3/94 ------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.52% 3.27% -1.61% 2.50% -1.46% 2.60% 1.61% ------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.62% 4.37% 2.68% 3.60% 2.67% 3.59% 3.59% 5 YEARS 5.86% 5.62% 4.60% 4.89% 4.72% 4.90% 4.90% SINCE INCEPTION 6.42% 4.90% 4.29% 3.97% 3.97% 6.33% 6.33%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 4.75%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 50 NATIONS NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal and North Carolina state income taxes consistent with moderate fluctuation of principal. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations North Carolina Intermediate Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.04%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of North Carolina municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As an intermediate-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of between three and ten years and a duration of between three and six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.04%, Nations North Carolina Intermediate Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper Other States Intermediate Municipal Debt Funds Average, which returned 2.78% for the 12-month period ending March 31, 2002. The Fund benefited from an overweighting in general obligation and hospital revenue bonds. The Fund has been moving to a more defensive mode as we have been adding higher premium cushion bonds and "trading up" in quality where possible. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN NORTH CAROLINA? The state of North Carolina is currently rated "Aaa" with a negative outlook by Moody's Investors Services, "AAA" with a stable outlook from Standard & Poor's Corporation and "AAA" by Fitch, Inc. From a long-term perspective, the state's economy remains very strong and continues to grow despite recent recession-related losses. The state's total --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 3.25%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Other States Intermediate Municipal Debt Funds Average invest in municipal debt issues with dollar-weighted average maturities of five to ten years and are exempt from taxation on a specified state basis. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 51 NATIONS NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued employment rate declined during the last year by a relatively small 1.5% despite significant losses of almost 7% in the manufacturing sector related to textiles. These textile job losses, while painful for the individual workers, represent a long-term shift away from this sector with growth in other portions of the economy expected to more than make up for these losses. This continuing trend has resulted in a stronger, more diverse economy that is now less reliant on volatile textile manufacturing. The high level of economic diversity in North Carolina is illustrated by the four largest sectors: services at 27%, trade at 23%, manufacturing at 18.2% and government at 16.3%. The size of the manufacturing sector as a percentage of total employment has declined over the last ten years. In 1992, manufacturing accounted for 24.8% of total jobs, in 1997 it was 22.5% and in early 2002 it had fallen to 18.2%. During this same ten-year period, the total number of jobs increased 13% from 3.325 million in 1992 to 3.756 million in early 2002 despite sizeable losses in the manufacturing sector. During the last several years, the state has needed to tap into fund balance reserves. These reserve reductions were due in large measure to non-recurring expense items such as litigation settlements and Hurricane Floyd damage. These reduced reserves have made it somewhat more difficult for the state to meet current recession-related budget pressures. During the state's fiscal year 2001, the state experienced revenue shortfalls of about $600 million. The Governor then declared a state of fiscal emergency and took various actions to cover a potential deficit of $1 billion, including tax increases and delaying payment of funds due to various local government units. While the final accounting is not yet complete, it seems this will be sufficient to balance the budget. For the early part of 2002, revenue collections still seem to be falling to an annual amount of about $400 million under estimates -- consequently, the state is expecting a shortfall of between $875 million and $1.1 billion. In February 2002, the Governor again issued an Executive Order, which identifies about $1.3 billion in potential funds, including further reserve drawdowns, delays, and other expenditure cuts, to reduce this deficit. The state has, however, a longstanding track record of successful financial management, as witnessed by the Governor's and the legislature's prompt action in correcting problems over the last few years. We believe these actions will ultimately prove adequate to keep finances strong for the long term. WHAT IS YOUR OUTLOOK FOR NORTH CAROLINA AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? Paying for infrastructure such as roads, water and sewer by the state and its local government units without damaging financial operations remains a concern. Of particular importance is the continued funding of education in order to attract new employees from out of the state. Due to very low historical unemployment rates in the state, it is important to maintain this steady flow of workers into the state and provide training for the current labor pool. Based on past performance of the economy and the state and its local government units, we feel that infrastructure goals can be achieved over the long term. 52 NATIONS NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 53 NATIONS NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 32.3% General obligation 15.0% Hospital 11.2% Prerefunded 9.1% Housing 7.2% Lease 5.3% Water 4.8% Education 2.4% Electric 2.1% Industrial development revenue/Pollution control revenue 10.6% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 North Carolina State, GO, Series 2001A, 4.750% 03/01/14 2.6% ------------------------------------------------- 2 North Carolina State, GO, Series 1994A, 4.700% 02/01/10 2.5% ------------------------------------------------- 3 Orange County, North Carolina, GO, Series 2000, 5.300% 04/01/18 2.4% ------------------------------------------------- 4 Charlotte-Mecklenburg Hospital Authority, Revenue, (Carolinas Healthcare System Project) Series 1997A, 5.125% 01/15/22 2.2% ------------------------------------------------- 5 North Carolina State, GO, Series 1997A, 5.100% 03/01/06 2.2% ------------------------------------------------- 6 North Carolina, Housing Finance Agency, Single-Family Housing Revenue, (Home Ownership Project) Series 1998A-1, AMT, 5.350% 01/01/17 2.0% ------------------------------------------------- 7 University of North Carolina, University Utilities Systems Revenue Refunding, Series 1993, 5.200% 08/01/06 1.8% ------------------------------------------------- 8 Wake County, North Carolina, Hospital Revenue, Series 1993, (MBIA Insured), 5.125% 10/01/26 1.6% ------------------------------------------------- 9 Haywood County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Solid Waste Disposal Revenue Refunding, (Champion International Corporation Project) Series 1999, AMT, 6.400% 11/01/24 1.6% ------------------------------------------------- 10 North Carolina, Medical Care Commission, Health Care Facilities Revenue Refunding, (Presbyterian Health Care Services Project) Series 1993, 5.500% 10/01/14 1.6% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
54 NATIONS NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS NORTH CAROLINA LEHMAN 7-YEAR MUNICIPAL BOND INTERMEDIATE MUNICIPAL BOND FUND INDEX -------------------------------- ---------------------------- Dec. 14 1992 9675.00 10000.00 1993 10702.00 11136.00 1994 10244.00 10828.00 1995 11669.00 12359.00 1996 12095.00 12898.00 1997 12942.00 13888.00 1998 13610.00 14764.00 1999 13395.00 14743.00 2000 14509.00 16083.00 2001 15156.00 16920.00 Mar. 31 2002 15241.00 17080.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS NORTH CAROLINA LEHMAN 7-YEAR MUNICIPAL BOND INTERMEDIATE MUNICIPAL BOND FUND INDEX -------------------------------- ---------------------------- Dec. 14 1992 10000.00 10000.00 1993 11061.00 11136.00 1994 10588.00 10828.00 1995 12061.00 12359.00 1996 12501.00 12898.00 1997 13376.00 13888.00 1998 14067.00 14764.00 1999 13845.00 14743.00 2000 14996.00 16083.00 2001 15665.00 16920.00 Mar. 31 2002 15753.00 17080.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (12/14/92 through 3/31/02) 5.01% 4.63%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations North Carolina Intermediate Municipal Bond Fund from the inception of the share class. The Lehman 7-Year Municipal Bond Index is a broad-based, unmanaged index of investment grade bonds with maturities of 7 to 8 years. All dividends are reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 12/11/92 12/14/92 6/7/93 12/16/92 --------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.20% 3.04% -0.35% 2.17% -0.78% 2.25% 1.27% --------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 3.89% 3.67% 2.54% 2.89% 2.58% 2.89% 2.89% 5 YEARS 5.00% 4.79% 4.09% 4.08% 4.08% 4.08% 4.08% SINCE INCEPTION 5.23% 5.01% 4.63% 4.15% 4.15% 4.46% 4.46%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 3.25%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 55 NATIONS NORTH CAROLINA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal and North Carolina state income taxes with the potential for principal fluctuation associated with investments in long-term municipal securities. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations North Carolina Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.25%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS NORTH CAROLINA MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of North Carolina municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As a long-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of greater than seven years and a duration of more than six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.25%, Nations North Carolina Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper North Carolina Municipal Debt Funds Average, which returned 2.83% for the 12-month period ending March 31, 2002. The Fund benefited from an overweighting in general obligation and hospital revenue bonds. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN NORTH CAROLINA? The state of North Carolina is currently rated "Aaa" with a negative outlook by Moody's Investors Services, "AAA" with a stable outlook from Standard & Poor's Corporation and "AAA" by Fitch, Inc. From a long-term perspective, the state's economy remains very strong and continues to grow despite recent recession-related losses. The state's total employment declined during the last year by a relatively small 1.5% despite significant losses of almost 7% in the manufacturing sector related to textiles. These textile job losses, while painful for the individual workers, represent a long- --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 4.75%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper North Carolina Municipal Debt Funds Average limit their assets to those securities that are exempt from taxation in North Carolina. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 56 NATIONS NORTH CAROLINA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued term shift from this sector with growth in other portions of the economy expected to more than make up for these losses. This continuing trend has resulted in a stronger, more diverse economy that is now less reliant on volatile textile manufacturing. The high level of economic diversity in North Carolina is illustrated by the four largest sectors: services at 27%, trade at 23%, manufacturing at 18.2% and government at 16.3%. The size of the manufacturing sector as a percentage of total employment has declined over the last ten years. In 1992, manufacturing accounted for 24.8% of total jobs, in 1997 it was 22.5% and in early 2002 it had fallen to 18.2%. During this same ten-year period, the total number of jobs increased 13% from 3.325 million in 1992 to 3.756 million in early 2002 despite sizeable losses in the manufacturing sector. During the last several years the state has needed to tap into fund balance reserves. These reserve reductions were due in large measure to non-recurring expense items such as litigation settlements and Hurricane Floyd damage. These reduced reserves have made it somewhat more difficult for the state to meet current recession-related budget pressures. During the state's fiscal year 2001, the state experienced revenue shortfalls of about $600 million. The Governor then declared a state of fiscal emergency and took various actions to cover a potential deficit of $1 billion, including tax increases and delaying payment of funds due various local government units. While the final accounting is not yet complete, it seems this will be sufficient to balance the budget. For the early part of 2002, revenue collections still seem to be falling to an annual amount of about $400 million under estimates -- consequently, the state is expecting a shortfall of between $875 million and $1.1 billion. In February 2002, the Governor again issued an Executive Order which identifies about $1.3 billion in potential funds, including further reserve drawdowns, delays and other expenditure cuts, to reduce this deficit. The state has, however, a longstanding track record of successful financial management, as witnessed by the Governor's and the legislature's prompt action in correcting problems over the last few years. We believe these actions will ultimately prove adequate to keep finances strong for the long term. WHAT IS YOUR OUTLOOK FOR NORTH CAROLINA AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? Paying for infrastructure such as roads, water and sewer by the state and its local government units without damaging financial operations remains a concern. Of particular importance is the continued funding of education in order to attract new employees from out of the state. Due to very low historical unemployment rates in the state, it is important to maintain this steady flow of workers into the state and provide training for the current labor pool. Based on past performance of the economy and the state and its local government units, we feel that infrastructure goals can be achieved over the long term. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rates hikes, we will attempt to utilize bonds with shorter durations and/or 57 NATIONS NORTH CAROLINA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 58 NATIONS NORTH CAROLINA MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 23.5% General obligation 10.3% Hospital 10.2% Resource recovery 10.1% Prerefunded 9.8% Water 7.5% Lease 7.4% Industrial development revenue/Pollution control revenue 5.0% Electric 2.8% Housing 2.4% Education 11.0% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Johnston County, North Carolina, GO, Series 2000, (FGIC Insured), 5.500% 03/01/15 4.9% ------------------------------------------------- 2 Mecklenburg County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Revenue Refunding, (Fluor Corporation Project) Series 1993, 5.250% 12/01/09 4.9% ------------------------------------------------- 3 Onslow County, North Carolina, Combined Enterprise Systems, Revenue, Series 1994, (MBIA Insured), 5.875% 06/01/09 3.9% ------------------------------------------------- 4 Greensboro, North Carolina, Enterprise Systems Revenue, Series 1998A, 5.500% 06/01/08 3.4% ------------------------------------------------- 5 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Pitt County Memorial Hospital Project) Series 1998B, 4.750% 12/01/28 3.2% ------------------------------------------------- 6 Martin County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Solid Waste Disposal Revenue, (Weyerhaeuser Company Project) Series 1993, AMT, 5.650% 12/01/23 3.0% ------------------------------------------------- 7 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Gaston Memorial Hospital Project) Series 1995, (AMBAC-TCRS Insured), 5.250% 02/15/07 2.9% ------------------------------------------------- 8 North Carolina, Housing Finance Agency, Revenue, (Home Ownership Project) Series 1998A-2, AMT, 5.200% 01/01/20 2.8% ------------------------------------------------- 9 Mecklenburg County, North Carolina, GO Refunding, Series 1993, 6.000% 04/01/11 2.7% ------------------------------------------------- 10 Monroe, North Carolina, Combined Enterprise Systems, Revenue, Series 1994, Prerefunded 03/01/04 @ 102, 6.000% 03/01/14 2.6% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
59 NATIONS NORTH CAROLINA MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS NORTH CAROLINA MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX -------------------------------- --------------------------- Nov. 1 1993 9525.00 10000.00 1993 9673.00 10121.00 1994 8781.00 9598.00 1995 10550.00 11273.00 1996 10814.00 11773.00 1997 11770.00 12854.00 1998 12472.00 13687.00 1999 12048.00 13404.00 2000 13296.00 14970.00 2001 13931.00 15738.00 Mar. 31 2002 14034.00 15886.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS NORTH CAROLINA MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX -------------------------------- --------------------------- Nov. 1 1993 10000.00 10000.00 1993 10155.00 10121.00 1994 9219.00 9598.00 1995 11076.00 11273.00 1996 11353.00 11773.00 1997 12357.00 12854.00 1998 13094.00 13687.00 1999 12649.00 13404.00 2000 13959.00 14970.00 2001 14626.00 15738.00 Mar. 31 2002 14734.00 15886.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (11/1/93 through 3/31/02) 4.72% 4.11%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations North Carolina Municipal Bond Fund from the inception of the share class. The Lehman Municipal Bond Index is a broad-based, unmanaged index consisting of over 40,000 tax-free, investment grade bonds with a maturity of one year or greater. All interest is reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 1/11/94 11/1/93 10/21/93 11/3/94 --------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.51% 3.25% -1.67% 2.48% -1.47% 2.48% 1.49% --------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.13% 3.88% 2.21% 3.12% 2.19% 3.12% 3.12% 5 YEARS 5.70% 5.46% 4.44% 4.74% 4.57% 4.75% 4.75% SINCE INCEPTION 4.81% 4.72% 4.11% 4.01% 4.01% 6.34% 6.34%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 4.75%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 60 NATIONS SOUTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal and South Carolina state income taxes consistent with moderate fluctuation of principal. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations South Carolina Intermediate Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.39%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS SOUTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of South Carolina municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As an intermediate-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of between three and ten years and a duration of between three and six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.39%, Nations South Carolina Intermediate Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper Other States Intermediate Municipal Debt Funds Average, which returned 2.78% for the 12-month period ended March 31, 2002. The Fund benefited from an overweighting in general obligation and hospital revenue bonds. The Fund has been moving to a more defensive mode as we have been adding higher premium cushion bonds (bonds containing some call protection) and "trading up" in quality where possible. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN SOUTH CAROLINA? The state of South Carolina has earned the highest possible credit rating from Moody's Investors Services of "Aaa," "AAA" from Standard & Poor's Corporation and "AAA" from Fitch, Inc. Although South Carolina has had a strong reliance on the economically depressed non-durable manufacturing sector, --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 3.25%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Other States Intermediate Municipal Debt Funds Average invest in municipal debt issues with dollar-weighted average maturities of five to ten years and are exempt from taxation on a specified state basis. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 61 NATIONS SOUTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued the state continues to diversify itself through increases in the trade (24% of employment) and services (25% of employment) sectors and gains in durable manufacturing. This trend has helped South Carolina outpace the nation in employment gains for the fourth consecutive year. South Carolina has enjoyed strong economic growth along with other southeastern states, but has recently seen a slowdown along with the rest of the nation. The state has enjoyed strong population growth, particularly by retirees attracted to coastal areas and the state's low cost of living. Although the state has experienced growth in jobs and higher wages, the national slowdown has affected South Carolina's revenues. Revenue collections were recently 2.3% lower than prior year results and about 5.2% lower than the 2002 budgeted receipts. In response to the revenue shortfall, the governor's proposals to prevent a budget deficit include cutting spending across agencies by 4%, reducing local government allocations to the previous year's levels, and sequestering $100 million from the state's Capital Reserve Fund. These remedies appear to have balanced the current state's fiscal year's budget. However, future uncertainties exist and new actions may be required. South Carolina for the first time in five years recorded a negative fund balance at $20.7 million. WHAT IS YOUR OUTLOOK FOR SOUTH CAROLINA AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? One challenge facing the state and localities is to improve educational levels. A better-educated work force should attract businesses and help diversify the state's economy. Other challenges include balancing the state's budget without use of non- recurring revenues and restoring the required 3% fund reserve, thereby removing the state's negative fund balance. We anticipate an economic rebound for the state, along with the national economy. Additionally, we believe a continued focus on education as well as employment diversification could help the state achieve its long-term goals. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 62 NATIONS SOUTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 22.3% General obligation 20.1% Hospital 16.4% Water 9.9% Prerefunded 9.3% Electric 6.9% Industrial development revenue/Pollution control revenue 4.9% Housing 3.1% Transportation 7.1% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Charleston, South Carolina, Waterworks and Sewer Capital Improvement Revenue Refunding, Series 1998, (FGIC Insured), 4.500% 01/01/24 3.5% ------------------------------------------------- 2 South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, (South Carolina Baptist Hospital Project) Series 1993, (AMBAC Insured), 5.450% 08/01/15 2.8% ------------------------------------------------- 3 South Carolina State, Capital Improvement GO, Series 1996A, 3.500% 07/01/06 2.6% ------------------------------------------------- 4 Columbia, South Carolina, Waterworks and Sewer Systems Revenue Refunding, Series 1993, 5.500% 02/01/09 2.5% ------------------------------------------------- 5 Charleston, South Carolina, Waterworks and Sewer Capital Improvement Revenue Refunding, Series 1998, 5.250% 01/01/08 2.4% ------------------------------------------------- 6 Richland County, South Carolina, School District Number 1, GO, Series 1996, (SCSDE), 4.625% 03/01/22 2.3% ------------------------------------------------- 7 South Carolina State, Housing Finance and Development Authority, Multi-Family Housing Revenue, (United Dominion Realty Trust Project) Series 1994, AMT, Mandatory Put 05/01/04 @ 100, 6.500% 05/01/24 2.1% ------------------------------------------------- 8 South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, (Palmetto Health Alliance Project) Series 2000A, 7.125% 12/15/15 2.0% ------------------------------------------------- 9 South Carolina State, Port Authority, Revenue, Series 1998, AMT, (FSA Insured), 5.250% 07/01/03 1.9% ------------------------------------------------- 10 South Carolina State, Housing Finance and Development Authority, Revenue Refunding, Series 1992A, (FNMA/FHA COLL), 6.800% 11/15/11 1.9% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
63 NATIONS SOUTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS SOUTH CAROLINA LEHMAN 7-YEAR MUNICIPAL BOND INTERMEDIATE MUNICIPAL BOND FUND INDEX -------------------------------- ---------------------------- May 5 1992 9675.00 10000.00 1993 11261.00 11839.00 1994 10910.00 11511.00 1995 12377.00 13139.00 1996 12842.00 13712.00 1997 13692.00 14765.00 1998 14421.00 15696.00 1999 14230.00 15673.00 2000 15432.00 17098.00 2001 16166.00 17987.00 Mar. 31 2002 16260.00 18158.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS SOUTH CAROLINA LEHMAN 7-YEAR MUNICIPAL BOND INTERMEDIATE MUNICIPAL BOND FUND INDEX -------------------------------- ---------------------------- May 5 1992 10000.00 10000.00 1993 11639.00 11839.00 1994 11276.00 11511.00 1995 12793.00 13139.00 1996 13273.00 13712.00 1997 14152.00 14765.00 1998 14906.00 15696.00 1999 14708.00 15673.00 2000 15950.00 17098.00 2001 16709.00 17987.00 Mar. 31 2002 16806.00 18158.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (5/5/92 through 3/31/02) 5.38% 5.03%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations South Carolina Intermediate Municipal Bond Fund from the inception of the share class. The Lehman 7-Year Municipal Bond Index is a broad-based, unmanaged index of investment grade bonds with maturities of 7 to 8 years. All dividends are reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 1/6/92 5/5/92 6/8/93 6/17/92 ------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.65% 3.39% 0.01% 2.62% -0.34% 2.71% 1.72% ------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.13% 3.88% 2.75% 3.13% 2.82% 3.13% 3.13% 5 YEARS 5.09% 4.86% 4.17% 4.17% 4.17% 4.17% 4.17% 10 YEARS 5.62% -- -- -- -- -- -- SINCE INCEPTION 5.55% 5.38% 5.03% 4.30% 4.30% 4.73% 4.73%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 3.25%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 64 NATIONS SOUTH CAROLINA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal and South Carolina state income taxes with the potential for principal fluctuation associated with investments in long-term municipal securities. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations South Carolina Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.56%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS SOUTH CAROLINA MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of South Carolina municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As a long-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity greater than seven years and a duration of more than six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.56%, Nations South Carolina Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper South Carolina Municipal Debt Funds Average, which returned 3.05% for the 12-month period ended March 31, 2002. The Fund benefited from an over-weighting in general obligation and hospital revenue bonds. The Fund has been moving to a more defensive mode as we have been adding higher premium cushion bonds (bonds containing some call protection) and "trading up" in quality where possible. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN SOUTH CAROLINA? The state of South Carolina has earned the highest possible credit rating from Moody's Investors Services of "Aaa," "AAA" from Standard & Poor's Corporation and "AAA" from Fitch, Inc. Although South Carolina has had a strong reliance on the economically depressed non-durable manufacturing sector, the state continues to diversify itself through increases in the trade (24% of employment) and services (25% of employment) sectors and gains in durable --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 4.75%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper South Carolina Municipal Debt Funds Average limit their assets to those securities that are exempt from taxation in South Carolina. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 65 NATIONS SOUTH CAROLINA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued manufacturing. This trend has helped South Carolina outpace the nation in employment gains for the fourth consecutive year. South Carolina has enjoyed strong economic growth along with other southeastern states, but has recently seen a slowdown along with the rest of the nation. The state has enjoyed strong population growth, particularly from retirees attracted to coastal areas and the state's low cost of living. Although the state has experienced growth in jobs and higher wages, the national slowdown has affected South Carolina's revenues. Revenue collections were recently 2.3% lower than prior year results and about 5.2% lower than the 2002 budgeted receipts. In response to the revenue shortfall, the governor's proposals to prevent a budget deficit include cutting spending across agencies by 4%, reducing local government allocations to the previous year's levels, and sequestering $100 million from the state's Capital Reserve Fund. These remedies appear to have balanced the state's current fiscal year's budget. However, future uncertainties exist and new actions may be required. South Carolina for the first time in five years recorded a negative fund balance at $20.7 million. WHAT IS YOUR OUTLOOK FOR SOUTH CAROLINA AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? One challenge facing the state and localities is to improve educational levels. A better-educated work force should attract businesses and help diversify the state's economy. Other challenges include balancing the state's budget without use of non- recurring revenues and restoring the required 3% fund reserve, thereby removing the state's negative fund balance. We anticipate an economic rebound for the state, along with the national economy. Additionally, we believe a continued focus on education as well as employment diversification could help the state achieve its long-term goals. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 66 NATIONS SOUTH CAROLINA MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 27.0% Water 26.4% Hospital 17.4% Industrial development revenue/ Pollution control revenue 12.3% Electric 7.2% General obligation 4.0% Transportation 3.9% Education 1.8% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Columbia, South Carolina, Waterworks and Sewer Systems Revenue, Series 1991, 2.334% 02/01/03 10.3% ------------------------------------------------- 2 South Carolina State, Public Service Authority, Revenue, Series 1999A, (MBIA Insured), 5.625% 01/01/13 8.3% ------------------------------------------------- 3 South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, Series 1999, (FSA Insured), 5.300% 02/01/14 7.9% ------------------------------------------------- 4 Georgetown County, South Carolina, PCR Refunding, (International Paper Company Project) Series 1999A, 5.125% 02/01/12 7.6% ------------------------------------------------- 5 Medical University, South Carolina, Hospital Facilities Revenue, Series 1999, 5.500% 07/01/09 6.3% ------------------------------------------------- 6 Columbia, South Carolina, Waterworks and Sewer Systems Revenue Refunding, Series 1993, 5.500% 02/01/09 6.2% ------------------------------------------------- 7 Greenville, South Carolina, Water Utility Improvement, Waterworks Revenue, Series 1997, 5.500% 02/01/22 5.9% ------------------------------------------------- 8 Darlington County, South Carolina, IDR, (Sonoco Products Company Project) Series 1995, AMT, 6.125% 06/01/25 5.8% ------------------------------------------------- 9 Spartanburg, South Carolina, Sanitary Sewer District, Sewer System Revenue Refunding, Series 1999B, (MBIA Insured), 5.000% 03/01/26 4.6% ------------------------------------------------- 10 Horry County, South Carolina, Hospital Facilities Revenue, (Conway Hospital, Inc. Project) Series 1998, (AMBAC Insured), 4.750% 07/01/10 4.3% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
67 NATIONS SOUTH CAROLINA MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS SOUTH CAROLINA MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX -------------------------------- --------------------------- Nov. 8 1993 9525 10000 1993 9753 10121 1994 9144 9598 1995 10918 11273 1996 11274 11773 1997 12224 12854 1998 12866 13687 1999 12426 13404 2000 13866 14970 2001 14568 15738 Mar. 31 2002 14673 15886
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS SOUTH CAROLINA MUNICIPAL LEHMAN MUNICIPAL BOND INDEX BOND FUND $15,405 $15,886 -------------------------------- --------------------------- Nov. 8 1993 10000 10000 1993 10239 10121 1994 9600 9598 1995 11462 11273 1996 11836 11773 1997 12834 12854 1998 13508 13687 1999 13046 13404 2000 14557 14970 2001 15295 15738 Mar. 31 2002 15405 15886
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (11/8/93 through 3/31/02) 5.28% 4.68%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations South Carolina Municipal Bond Fund from the inception of the share class. The Lehman Municipal Bond Index is a broad-based, unmanaged index consisting of over 40,000 tax-free, investment grade bonds with a maturity of one year or greater. All interest is reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 12/27/93 11/8/93 10/21/93 11/3/94 --------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.72% 3.56% -1.33% 2.69% -1.27% 2.67% 1.68% --------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.52% 4.27% 2.60% 3.51% 2.58% 3.48% 3.48% 5 YEARS 5.72% 5.49% 4.46% 4.76% 4.59% 4.77% 4.77% SINCE INCEPTION 5.32% 5.28% 4.68% 4.44% 4.44% 6.38% 6.38%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 4.75%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 68 NATIONS TENNESSEE INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal income tax and the Tennessee Hall Income Tax on unearned income consistent with moderate fluctuation of principal. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Tennessee Intermediate Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.28%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS TENNESSEE INTERMEDIATE MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of Tennessee municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As an intermediate-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of between three and ten years and a duration of between three and six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.28%, Nations Tennessee Intermediate Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper Other States Intermediate Municipal Debt Funds Average, which returned 2.78% for the 12-month period ending March 31, 2002. The Fund benefited from a longer duration stance than its peer group and an overweighting in general obligation and hospital revenue bonds. The Fund has been moving to a more defensive mode as we have been adding higher premium cushion bonds (bonds containing some call protection) and "trading up" in quality where possible. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN TENNESSEE? The state of Tennessee is rated "Aa2" by Moody's Investors Services with a negative outlook, "AA" by Standard & Poor's Corporation with a negative "CreditWatch" and "AA" by Fitch, Inc. Both the negative outlook and "CreditWatch," in our opinion, indicate the ratings are under pressure and could be downgraded due to the state's financial performance in recent years. Tennessee's --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 3.25%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Other States Intermediate Municipal Debt Funds Average invest in municipal debt issues with dollar-weighted average maturities of five to ten years and are exempt from taxation on a specified state basis. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 69 NATIONS TENNESSEE INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued main source of revenue, the sales tax, has not kept up with expenditures, which have been most severe during the recent economic downturn. The state so far has neither raised additional revenues nor added new revenue sources, such as an income tax to balance the budget. The state has, however, resorted to one-time, non-recurring sources of money, such as funds from the recent tobacco settlement to balance the budget. This is generally viewed as a weakness, as it permits the state to sustain programs and projects for which there is no recurring revenue. This does not solve the budget problem -- it merely postpones it. Preliminary data for the first couple months of the state's fiscal 2002 indicate that general fund revenues are down about $150 million below forecasted levels. Some estimates indicate that revenue shortfalls for the year could be about $400 million -- particularly if weakness continues in the state's manufacturing sector. A $178 million reserve fund is available to the state to balance the budget. Other options that have proved either politically contentious and/or difficult to implement are raising current taxes, instituting a state income tax, and cutting expenditures further, such as the state's Medicaid program, Tenncare. At this time, we believe it seems likely that the state's financial problems may continue. WHAT IS YOUR OUTLOOK FOR TENNESSEE AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? In the short term, the state is likely to encounter financial stresses that could cause a rating downgrade. However, from a long-term perspective, we believe the economy -- despite drops in the manufacturing sector -- remains strong and well diversified. In our opinion, in the long run the state may stabilize its finances and may attain a high-quality credit rating. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 70 NATIONS TENNESSEE INTERMEDIATE MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 32.7% General obligation 21.5% Hospital 13.3% Housing 7.0% Industrial development revenue/ Pollution control revenue 5.0% Electric 4.0% Prerefunded 3.9% Resource recovery 3.0% Water 9.6% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Maury County, Tennessee, Industrial Development Board, Multi-Modal PCR Refunding, (General Motors Corporation - Saturn Corporation Project) Series 1994, 6.500% 09/01/24 5.0% ------------------------------------------------- 2 Memphis, Tennessee, GO, Series 2000, 5.000% 04/01/17 4.0% ------------------------------------------------- 3 Shelby County, Tennessee, Health Educational and Housing Facilities Board, Revenue, (St. Jude's Childrens Research Project) Series 1999, 5.375% 07/01/24 3.7% ------------------------------------------------- 4 Tennessee, Housing Development Agency, Revenue, (Home Ownership Program) Series 1997-3A, AMT, 5.298% 01/01/08 3.5% ------------------------------------------------- 5 Chattanooga-Hamilton County, Tennessee, Hospital Authority, Revenue Refunding, (Erlanger Medical Center Project) Series 1993, (FSA Insured), 5.375% 10/01/04 3.4% ------------------------------------------------- 6 Rutherford County, Tennessee, Public Improvement GO, Series 1996, 6.000% 04/01/06 3.4% ------------------------------------------------- 7 Metropolitan Government, Nashville and Davidson County, Tennessee, Electric Revenue, Series 1998B, 5.500% 05/15/13 3.3% ------------------------------------------------- 8 Knox County, Tennessee, Health Educational and Housing Facilities Board, Hospital Facilities Improvement Revenue Refunding, (Baptist Health System of East Tennessee, Inc. Project) Series 1996, (CONNIE LEE Insured), 5.500% 04/15/11 3.2% ------------------------------------------------- 9 Anderson County, Tennessee, GO Refunding, Series 2001, (FSA Insured), 5.000% 04/01/13 3.0% ------------------------------------------------- 10 Tennergy Corporation, Tennessee, Gas Revenue, Series 1999, (MBIA Insured), 5.000% 06/01/07 3.0% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
71 NATIONS TENNESSEE INTERMEDIATE MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS TENNESSEE INTERMEDIATE LEHMAN 7-YEAR MUNICIPAL BOND MUNICIPAL BOND FUND INDEX ------------------------------ ---------------------------- Nov. 4 1993 9675 10000 1993 10325 10703 1994 9846 10407 1995 11217 11878 1996 11634 12397 1997 12415 13348 1998 13060 14190 1999 12869 14170 2000 13890 15458 2001 14623 16262 Mar. 31 2002 14701 16416
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS TENNESSEE INTERMEDIATE LEHMAN 7-YEAR MUNICIPAL BOND MUNICIPAL BOND FUND INDEX ------------------------------ ---------------------------- Nov. 4 1993 10000 10000 1993 10672 10703 1994 10177 10407 1995 11594 11878 1996 12025 12397 1997 12832 13348 1998 13499 14190 1999 13301 14170 2000 14357 15458 2001 15114 16262 Mar. 31 2002 15195 16416
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (4/2/93 through 3/31/02) 4.76% 4.37%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Tennessee Intermediate Municipal Bond Fund from the inception of the share class. The Lehman 7-Year Municipal Bond Index is a broad-based, unmanaged index of investment grade bonds with maturities of 7 to 8 years. All dividends are reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 4/13/93 4/2/93 6/10/93 11/3/94 ------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.54% 3.28% -0.10% 2.61% -0.36% 2.52% 1.53% ------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.05% 3.79% 2.66% 3.08% 2.77% 2.92% 2.92% 5 YEARS 5.05% 4.81% 4.12% 4.15% 4.15% 4.05% 4.05% SINCE INCEPTION 4.92% 4.76% 4.37% 4.21% 4.21% 5.12% 5.12%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 3.25%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 72 NATIONS TENNESSEE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal income tax and the Tennessee Hall Income Tax on unearned income with the potential for principal fluctuation associated with investments in long-term municipal securities. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Tennessee Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.03%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS TENNESSEE MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of Tennessee municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As a long-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity greater than seven years and a duration of more than six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.03%, Nations Tennessee Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper Tennessee Municipal Debt Funds Average, which returned 2.96% for the 12-month period ending March 31, 2002. The Fund benefited from a longer duration stance than its peer group and an over-weighting in hospital revenue bonds. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN TENNESSEE? The state of Tennessee is rated "Aa2" by Moody's Investors Services with a negative outlook, "AA" by Standard & Poor's Corporation with a negative "CreditWatch" and "AA" by Fitch, Inc. Both the negative outlook and "CreditWatch," in our opinion, indicate the ratings are under pressure and could be downgraded due to the state's financial performance in recent years. Tennessee's main source of revenue, the sales tax, has not kept up with expenditures, which --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 4.75%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Tennessee Municipal Debt Funds Average limit their assets to those securities that are exempt from taxation in Tennessee. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 73 NATIONS TENNESSEE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued have been most severe during the recent economic downturn. The state so far has neither raised additional revenues nor added new revenue sources, such as an income tax to balance the budget. The state has, however, resorted to one-time, non-recurring sources of money, such as funds from the recent tobacco settlement to balance the budget. This is generally viewed as a weakness, as it permits the state to sustain programs and projects for which there is no recurring revenue. This does not solve the budget problem -- it merely postpones it. Preliminary data for the first couple months of the state's fiscal year 2002 indicate that general fund revenues are down about $150 million below forecasted levels. Some estimates indicate that revenue shortfalls for the year could be about $400 million -- particularly if weakness continues in the state's manufacturing sector. A $178 million reserve fund is available to the state to balance the budget. Other options that have proved either politically contentious and/or difficult to implement are raising current taxes, instituting a state income tax, and cutting expenditures further, such as the state's Medicaid program, Tenncare. At this time, we believe it seems likely that the state's financial problems may continue. WHAT IS YOUR OUTLOOK FOR TENNESSEE AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? In the short term, the state is likely to encounter financial stresses that could cause a rating downgrade. However, from a long-term perspective, we believe the economy -- despite drops in the manufacturing sector -- remains strong and well diversified. In our opinion, in the long run the state may stabilize its finances and may attain a high-quality credit rating. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 74 NATIONS TENNESSEE MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 23.5% General obligation 14.9% Hospital 14.4% Industrial development revenue/ Pollution control revenue 10.1% Education 9.3% Resource recovery 7.6% Prerefunded 3.6% Water 3.5% Electric 3.4% Housing 9.7% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Hamilton County, Tennessee, GO Refunding, Series 1998B, 5.100% 08/01/24 8.2% ------------------------------------------------- 2 Humphreys County, Tennessee, Industrial Development Board, Solid Waste Disposal Revenue, (E.I. duPont de Nemours and Company Project) Series 1994, AMT, 6.700% 05/01/24 6.9% ------------------------------------------------- 3 Metropolitan Government, Nashville and Davidson County, Tennessee, Health and Educational Facilities Board, Improvement Revenue Refunding, (Meharry Medical College Project) Series 1996, (AMBAC Insured), 6.000% 12/01/16 6.2% ------------------------------------------------- 4 Maury County, Tennessee, Industrial Development Board, Multi-Modal PCR Refunding, (General Motors Corporation - Saturn Corporation Project) Series 1994, 6.500% 09/01/24 5.9% ------------------------------------------------- 5 Williamson County, Tennessee, GO, Series 2000, 5.350% 03/01/17 5.7% ------------------------------------------------- 6 Memphis-Shelby County, Tennessee, Airport Authority, Special Facilities and Project Revenue Refunding, (Federal Express Corporation Project) Series 1997, 5.350% 09/01/12 5.5% ------------------------------------------------- 7 Blount County, Tennessee, Public Building Authority, Public Facility Revenue, Series 1998, (FGIC Insured), 5.000% 04/01/19 5.4% ------------------------------------------------- 8 Metropolitan Government, Nashville and Davidson County, Tennessee, Electric Revenue, Series 1998B, 5.500% 05/15/13 4.8% ------------------------------------------------- 9 Knox County, Tennessee, Health Educational and Housing Facilities Board, Hospital Facilities Improvement Revenue Refunding, (Baptist Health System of East Tennessee, Inc. Project) Series 1996, (CONNIE LEE Insured), 5.500% 04/15/11 4.7% ------------------------------------------------- 10 Memphis, Tennessee, GO, Series 2000, 5.000% 04/01/17 4.4% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
75 NATIONS TENNESSEE MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS TENNESSEE MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX -------------------------------- --------------------------- Nov. 2 1993 9525.00 10000.00 12/93 9692.00 10121.00 12/94 9045.00 9598.00 12/95 10782.00 11273.00 12/96 11166.00 11773.00 12/97 12175.00 12854.00 12/98 12848.00 13687.00 12/99 12366.00 13404.00 12/00 13766.00 14970.00 12/01 14408.00 15738.00 Mar. 31 2002 14510.00 15886.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS TENNESSEE MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX -------------------------------- --------------------------- Nov. 2 1993 10000.00 10000.00 12/93 10175.00 10121.00 12/94 9496.00 9598.00 12/95 11320.00 11273.00 12/96 11723.00 11773.00 12/97 12782.00 12854.00 12/98 13489.00 13687.00 12/99 12983.00 13404.00 12/00 14452.00 14970.00 12/01 15127.00 15738.00 Mar. 31 2002 15234.00 15886.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (11/2/93 through 3/31/02) 5.13% 4.53%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Tennessee Municipal Bond Fund from the inception of the share class. The Lehman Municipal Bond Index is a broad-based, unmanaged index consisting of over 40,000 tax-free, investment grade bonds with a maturity of one year or greater. All interest is reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 3/2/94 11/2/93 10/21/93 11/3/94 ------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.29% 3.03% -1.86% 2.27% -1.67% 2.26% 1.27% ------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.22% 3.96% 2.30% 3.21% 2.28% 3.18% 3.18% 5 YEARS 5.70% 5.46% 4.45% 4.74% 4.57% 4.73% 4.73% SINCE INCEPTION 5.74% 5.13% 4.53% 4.31% 4.31% 6.40% 6.40%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 4.75%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 76 NATIONS TEXAS INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal income tax consistent with moderate fluctuation of principal. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Texas Intermediate Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.10%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS TEXAS INTERMEDIATE MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of Texas municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As an intermediate-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of between three and ten years and a duration of between three and six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.10%, Nations Texas Intermediate Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper Other States Intermediate Municipal Debt Funds Average, which returned 2.78% for the 12-month period ending March 31, 2002. Maintaining a slightly shorter duration stance than its peer group enhanced the Fund's performance. The quality of the Fund's holdings is generally high with over 85% of the Fund's assets invested in "AAA" and "AA" rated securities. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN TEXAS? The state of Texas is currently rated "Aa1" by Moody's Investors Services, "AA" by Standard & Poor's Corporation and "AA+" by Fitch, Inc. The ratings reflect a sizeable and diverse economy, showing long-term growth patterns, conservative financial management and a manageable debt burden. Over the last ten to 15 years, the Texas economy has achieved a significant level of diversification away from the --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 3.25%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Other States Intermediate Municipal Debt Funds Average invest in municipal debt issues with dollar-weighted average maturities of five to ten years and are exempt from taxation on a specified state basis. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 77 NATIONS TEXAS INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued oil and gas sector that caused so much difficulty in the mid-80s. This new level of diversification is headlined by the growth of the high technology, services, manufacturing and business sectors due in part to the North American Free Trade Act. While most states have been struggling to deal with budget deficits resulting from revenue shortfalls, Texas has been hit less hard as the state relied on fairly conservative revenue projections. It is expected to escape having a budget deficit in the state's fiscal year 2002, but there could be as much as a $5.5 billion shortfall next year. The state closed its fiscal year 2001 with a healthy cash balance of $3.9 billion (net of cash flow borrowings). This was up from the $3.8 billion balance the year before. The annual growth rate for the state's gross domestic product was recently revised from 4.1% to 3.6% for the period between 2002 and 2003, which is down substantially from the double-digit growth rates it experienced in the 1990s. WHAT IS YOUR OUTLOOK FOR TEXAS AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? Looking forward, perhaps the biggest challenge the state may face is the contentious issue of how to equalize the finances of its poor and wealthy school districts. If the state decides to shift school funding from local to state districts, which we believe may be unlikely, the state's historically low-debt burden is apt to increase dramatically. We suspect, however, that the state may hammer out a plan that relies on local district financing with some form of state subsidization. This could result in improved district credit profiles. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 78 NATIONS TEXAS INTERMEDIATE MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 38.3% General obligation 12.1% Water 9.6% Industrial development revenue/ Pollution control revenue 9.3% Prerefunded 8.7% Hospital 8.5% Electric 3.7% Transportation 3.0% Education 6.8% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Texas, Municipal Power Agency, Revenue Refunding, Series 1993, (MBIA Insured), 5.250% 09/01/05 5.7% ------------------------------------------------- 2 Houston, Texas, Water and Sewer Systems Revenue, Junior Lien, Series 1996A, (FGIC Insured), 5.250% 12/01/25 3.5% ------------------------------------------------- 3 Houston, Texas, Water and Sewer Systems Revenue Refunding, Junior Lien, Series 1997A, (FGIC Insured), 5.375% 12/01/27 2.9% ------------------------------------------------- 4 Texas State, College Student Loan Authority, GO, Series 1997, AMT, (GTD STD LNS), 5.250% 08/01/07 2.6% ------------------------------------------------- 5 Red River Authority, Texas, PCR, (Hoechst Celanese Corporation Project) Series 1992, AMT, 6.875% 04/01/17 2.4% ------------------------------------------------- 6 Houston, Texas, Water and Sewer Systems Revenue, Unrefunded Balance, Prior Lien, Series 1992B, 5.900% 12/01/03 2.3% ------------------------------------------------- 7 Austin, Texas, GO Refunding, Series 1993, 5.500% 09/01/04 2.2% ------------------------------------------------- 8 Dallas-Fort Worth, Texas, Regional Airport Revenue Refunding, (Dallas-Forth Worth Airport Project) Series 1994A, (MBIA Insured), 5.400% 11/01/03 1.9% ------------------------------------------------- 9 North Central, Texas, Health Facilities Development Corporation, Health Facilities Revenue, (Presbyterian Healthcare Residential Project) Series 1996B, (MBIA Insured), 5.500% 06/01/16 1.9% ------------------------------------------------- 10 Texas State, Public Finance Authority, Building Revenue Refunding, Series 1992B, (AMBAC Insured), 6.100% 02/01/04 1.9% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
79 NATIONS TEXAS INTERMEDIATE MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS TEXAS INTERMEDIATE LEHMAN 7-YEAR MUNICIPAL BOND MUNICIPAL BOND FUND INDEX -------------------------- ---------------------------- Feb. 4 1993 9675.00 10000.00 12/93 10365.00 10887.00 12/94 10000.00 10586.00 12/95 11271.00 12082.00 12/96 11658.00 12610.00 12/97 12464.00 13578.00 12/98 13111.00 14434.00 12/99 12928.00 14413.00 12/00 13996.00 15724.00 12/01 14657.00 16541.00 Mar. 31 2002 14723.00 16698.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS TEXAS INTERMEDIATE LEHMAN 7-YEAR MUNICIPAL BOND MUNICIPAL BOND FUND INDEX -------------------------- ---------------------------- Feb. 4 1993 10000.00 10000.00 12/93 10713.00 10887.00 12/94 10336.00 10586.00 12/95 11650.00 12082.00 12/96 12050.00 12610.00 12/97 12882.00 13578.00 12/98 13552.00 14434.00 12/99 13362.00 14413.00 12/00 14466.00 15724.00 12/01 15149.00 16541.00 Mar. 31 2002 15218.00 16698.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (2/4/93 through 3/31/02) 4.70% 4.32%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Texas Intermediate Municipal Bond Fund from the inception of the share class. The Lehman 7-Year Municipal Bond Index is a broad-based, unmanaged index of investment grade bonds with maturities of 7 to 8 years. All dividends are reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 1/12/93 2/4/93 6/22/93 11/3/94 ------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.36% 3.10% -0.27% 2.33% -0.62% 2.16% 1.18% ------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.04% 3.79% 2.66% 3.04% 2.74% 2.94% 2.94% 5 YEARS 5.03% 4.79% 4.11% 4.11% 4.11% 4.04% 4.04% SINCE INCEPTION 5.09% 4.70% 4.32% 4.05% 4.05% 4.99% 4.99%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 3.25%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 80 NATIONS TEXAS MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal income tax with the potential for principal fluctuation associated with investments in long-term municipal securities. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Texas Municipal Bond Fund Investor A Shares provided shareholders with a total return of 2.85%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS TEXAS MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio generally within the universe of Texas municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As a long-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity greater than seven years and a duration of more than six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 2.85%, Nations Texas Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper Texas Municipal Debt Funds Average, which returned 2.59% for the 12-month period ending March 31, 2002. The Fund benefited from an overweighting in prerefunded bonds. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN TEXAS? The state of Texas is currently rated "Aa1" by Moody's Investors Services, "AA" by Standard & Poor's Corporation and "AA+" by Fitch, Inc. The ratings reflect a sizeable and diverse economy, showing long-term growth patterns, conservative financial management and a manageable debt burden. Over the last ten to 15 years, the Texas economy has achieved a significant level of diversification away from the oil and gas sector that caused so much difficulty in the mid-80s. This new level of diversification is headlined by the growth of the high technology, services, manufacturing and business sectors due in part to the North American Free Trade Act. --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 4.75%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Texas Municipal Debt Funds Average limit their assets to those securities that are exempt from taxation in Texas. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 81 NATIONAL TEXAS MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued While most states have been struggling to deal with budget deficits resulting from revenue shortfalls, Texas has been hit less hard as the state relied on fairly conservative revenue projections. It is expected to escape having a budget deficit in the state's fiscal year 2002, but there could be as much as a $5.5 billion shortfall next year. The state closed its fiscal year 2001 with a healthy cash balance of $3.9 billion (net of cash flow borrowings). This was up from the $3.8 billion balance the year before. The annual growth rate for the state's gross domestic product was recently revised from 4.1% to 3.6% for the period between 2002 and 2003, which is down substantially from the double-digit growth rates it experienced in the 1990s. WHAT IS YOUR OUTLOOK FOR TEXAS AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? Looking forward, perhaps the biggest challenge the state may face is the contentious issue of how to equalize the finances of its poor and wealthy school districts. If the state decides to shift school funding from local to state districts, which we believe may be unlikely, the state's historically low-debt burden is apt to increase dramatically. We suspect, however, that the state may hammer out a plan that relies on local district financing with some form of state subsidization. This could result in improved district credit profiles. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 82 NATIONS TEXAS MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 3.4% Water 10.7% Hospital 3.2% Education 8.5% Industrial development revenue/Pollution control revenue 11.0% Transportation 22.2% Prerefunded 39.4% General obligation 1.6% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Tarrant County, Texas, Health Facilities Development Corporation, Health Systems Revenue, (Harris Methodist Health Systems Project) Series 1994, (MBIA-IBC Insured), 6.000% 09/01/10 9.0% ------------------------------------------------- 2 Lucas County, Ohio, Hospital Revenue, (Flower Hospital Project) Series 1993, Prerefunded 12/01/04 @ 101, 6.125% 12/01/13 8.7% ------------------------------------------------- 3 Harris County, Texas, Health Facilities Development Corporation, Revenue, (St. Lukes Episcopal Hospital Project) Series 2001A, 5.625% 02/15/16 6.4% ------------------------------------------------- 4 Harris County, Texas, Port Houston Authority, Revenue Refunding, Series 2000B, AMT, 5.500% 10/01/07 6.4% ------------------------------------------------- 5 Round Rock, Texas, Independent School District, GO, Series 2000, 5.000% 08/01/18 4.7% ------------------------------------------------- 6 Dallas-Fort Worth, Texas, Regional Airport Revenue Refunding, Series 1994A, (MBIA Insured), 6.000% 11/01/09 4.3% ------------------------------------------------- 7 Travis County, Texas, Health Facilities Development Corporation, Revenue, (Ascension Health Credit Project) Series 1999A, (AMBAC Insured), 5.875% 11/15/24 4.2% ------------------------------------------------- 8 Harris County, Texas, Health Facilities Development Corporation, Hospital Revenue, (Texas Childrens Hospital Project) Series 1995, 5.500% 10/01/19 4.2% ------------------------------------------------- 9 Trinity River Authority, Texas, PCR, (Texas Instruments Inc. Project) Series 1996, AMT, 6.200% 03/01/20 4.2% ------------------------------------------------- 10 Red River Authority, Texas, PCR, (Hoechst Celanese Corporation Project) Series 1992, AMT, 6.875% 04/01/17 4.2% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
83 NATIONS TEXAS MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS TEXAS MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX --------------------------------- --------------------------- Dec. 17 1993 9525.00 10000.00 1994 8722.00 9483.00 1995 10431.00 11139.00 1996 10805.00 11632.00 1997 11758.00 12701.00 1998 12483.00 13524.00 1999 12044.00 13246.00 2000 13439.00 14793.00 2001 14016.00 15552.00 Mar. 31 2002 14127.00 15574.00
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART] Nations Texas Municipal Bond Fund Lehman Municipal Bond Index --------------------------------- --------------------------- Dec 17 1993 10000.00 10000.00 1994 9157.00 9483.00 1995 10951.00 11139.00 1996 11344.00 11632.00 1997 12344.00 12701.00 1998 13106.00 13524.00 1999 12645.00 13246.00 2000 14109.00 14793.00 2001 14715.00 15552.00 Mar. 31 2002 14831.00 15574.00
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (12/17/93 through 3/31/02) 4.87% 4.26%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Texas Municipal Bond Fund from the inception of the share class. The Lehman Municipal Bond Index is a broad-based, unmanaged index consisting of over 40,000 tax-free, investment grade bonds with a maturity of one year or greater. All interest is reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 2/3/94 12/17/93 10/21/93 11/3/94 ------------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.11% 2.85% -2.02% 2.09% -1.84% 3.28% 2.29% ------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.27% 4.02% 2.36% 3.26% 2.33% 3.64% 3.64% 5 YEARS 5.84% 5.60% 4.58% 4.87% 4.70% 5.12% 5.12% SINCE INCEPTION 4.98% 4.87% 4.26% 4.11% 4.11% 6.60% 6.60%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 4.75%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 84 NATIONS VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal and Virginia state income taxes consistent with moderate fluctuation of principal. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Virginia Intermediate Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.18%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio, generally within the universe of Virginia municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As an intermediate-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity of between three and ten years and a duration of between three and six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.18%, Nations Virginia Intermediate Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper Other States Intermediate Municipal Debt Funds Average, which returned 2.78% for the 12-month period ended March 31, 2002. The Fund benefited from a shorter duration stance than its peer group and an over-weighting in hospital, industrial development revenue/pollution control revenue (IDR/PCR) and general obligation bonds. The Fund has been moving to a more defensive structure as we have been adding bonds with a higher coupon and/or shorter duration and "trading up" in quality where possible. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN VIRGINIA? The Commonwealth of Virginia earned a "Aaa" credit rating from Moody's Investors Services, with a negative outlook, "AAA" from Standard & Poor's Corporation and "AAA" from and Fitch, Inc. --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 3.25%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. *** Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Other States Intermediate Municipal Debt Funds Average invest in municipal debt issues with dollar-weighted average maturities of five to ten years and are exempt from taxation on a specified state basis. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 85 NATIONS VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued The Commonwealth's economy is broad and continues to see diversification away from manufacturing and into the trade, services and government sectors. Virginia's labor force continues to grow despite the national economic downturn, with the government sector seeing positive job growth. While manufacturing jobs fell 6%, overall jobs fell only 1.5%. This was due to positive growth in the government sector and stable- to small-job losses in the services and trade sectors. The investment sector experienced a 0.5% job increase. The recent downturn has caused the state to anticipate a combined deficit of $2.5 billion for the state's fiscal years 2002 and 2003. To close the budget gap, the governor has asked for budget cuts of 3% and 7% in 2002 and 2003, respectively. Also, the car tax repeal has been frozen at 70%. The Commonwealth did dip into reserves for the 2002-2003 budget but did not deplete the funds. We believe these actions may close the budget gap. However, it is still early in the budget cycle. WHAT IS YOUR OUTLOOK FOR VIRGINIA AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? We believe key challenges for the Commonwealth will be to bridge the budget gap in the short-term, build adequate future reserves and continue meeting infrastructure needs which promotes economic growth for the long-term. The Commonwealth is experiencing short-term stress, but we believe prudent fiscal management can resolve this concern. We believe Virginia will return to a more sound fiscal footing and will maintain strong creditworthiness in the future. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 86 NATIONS VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 4.8% Hospital 5.4% Education 5.2% Industrial development revenue/Pollution control revenue 8.1% Housing 6.0% Prerefunded 11.1% Resource recovery 10.9% Transportation 13.8% Water 28.0% General obligation 6.8% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Fairfax County, Virginia, Economic Development Authority, Resource Recovery, Revenue Refunding, Series 1998A, AMT, (AMBAC Insured), 5.950% 02/01/07 4.2% ------------------------------------------------- 2 Chesapeake, Virginia, GO Refunding, Series 1993, 5.125% 12/01/05 2.2% ------------------------------------------------- 3 Loudoun County, Virginia, Industrial Development Authority, Revenue, (Air Force Retired Officers -- Falcons Landing Project) Series 1994A, Prerefunded 11/01/04 @ 103, 8.750% 11/01/24 2.0% ------------------------------------------------- 4 Virginia State, Transportation Board Authority, Transportation Revenue Refunding, (U.S. Route 58 Corridor Development Program) Series 1993A, 5.500% 05/15/09 1.9% ------------------------------------------------- 5 Newport News, Virginia, Public Improvement GO Refunding, Series 1993B, (State Aid Withholding), 5.200% 11/01/04 1.8% ------------------------------------------------- 6 Virginia College Building Authority, Virginia Educational Facilities Revenue, (University Richmond Project) Series 2002A, Mandatory Put 03/01/09 @ 100, 5.000% 03/01/32 1.8% ------------------------------------------------- 7 Virginia State, Transportation Board Authority, Transportation Contract Revenue, (Northern Virginia Transportation District Project) Series 1996A, 5.125% 05/15/21 1.8% ------------------------------------------------- 8 Virginia, Southeastern Public Service Authority, Revenue Refunding, Series 1993A, (MBIA Insured), 5.100% 07/01/08 1.8% ------------------------------------------------- 9 Goochland County, Virginia, Industrial Development Authority, (Old Dominion Electric Cooperative Project) Series 1998, AMT, 4.250% 12/01/02 1.7% ------------------------------------------------- 10 Washington State, Motor Vehicle Fuel Tax, GO, Series 1997F, 5.375% 07/01/22 1.7% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
87 NATIONS VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS VIRGINIA INTERMEDIATE LEHMAN 7-YEAR MUNICIPAL BOND MUNICIPAL BOND FUN INDEX ----------------------------- ---------------------------- Mar. 31 1992 9675 10000 1993 10641 11159 1994 10909 11493 1995 11432 12222 1996 12231 13208 1997 12685 13818 1998 13688 15078 1999 14373 15971 2000 14382 16065 2001 15625 17699 Mar. 31 2002 16122 18320
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS VIRGINIA INTERMEDIATE LEHMAN 7-YEAR MUNICIPAL BOND MUNICIPAL BOND FUND INDEX ----------------------------- ---------------------------- Mar. 31 1992 10000 10000 1993 10998 11159 1994 11275 11493 1995 11816 12222 1996 12642 13208 1997 13111 13818 1998 14148 15078 1999 14856 15971 2000 14865 16065 2001 16150 17699 Mar 31 2002 16664 18320
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
10-YEAR NAV** MOP* (3/31/92 through 3/31/02) 5.24% 4.89%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Virginia Intermediate Municipal Bond Fund over the last 10 years. The Lehman 7-Year Municipal Bond Index is a broad-based, unmanaged index of investment grade bonds with maturities of 7 to 8 years. All dividends are reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 9/20/89 12/5/89 6/7/93 6/17/92 ----------------------------------------------------------------------------------------------------------------------------- 1 YEAR PERFORMANCE 3.44% 3.18% -0.20% 2.40% -0.57% 2.41% 1.42% ----------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS 3 YEARS 4.15% 3.90% 2.76% 3.15% 2.84% 3.12% 3.12% 5 YEARS 5.15% 4.91% 4.21% 4.22% 4.22% 4.21% 4.21% 10 YEARS 5.45% 5.24% 4.89% -- -- -- -- SINCE INCEPTION 5.85% 5.65% 5.37% 4.12% 4.12% 4.51% 4.51%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 3.25%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 88 NATIONS VIRGINIA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY* PORTFOLIO MANAGEMENT The Fund is managed by the Municipal Fixed Income Management Team of Banc of America Capital Management, LLC, investment sub-adviser to the Fund. INVESTMENT OBJECTIVE The Fund seeks high current income exempt from federal and Virginia state income taxes with the potential for principal fluctuation associated with investments in long-term municipal securities. PERFORMANCE REVIEW For the 12-month period ended March 31, 2002, Nations Virginia Municipal Bond Fund Investor A Shares provided shareholders with a total return of 3.34%.** IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS VIRGINIA MUNICIPAL BOND FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 2002 AND ITS OUTLOOK FOR THE FUTURE. BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH OF THE FUND. The Fund balances its investments between high quality, investment grade issues through which it seeks to reduce credit and liquidity risk and lower quality, investment grade issues, for their additional yield potential. By maintaining a well- diversified portfolio, generally within the universe of Virginia municipal securities, we aim to limit the Fund's exposure to any single credit or market sector. In addition, we use a combination of investment strategies, including duration management (managing the Fund's sensitivity to interest rates), market sector selection and individual credit reviews. We also seek to limit the distribution of capital gains when appropriate. As a long-term portfolio, the Fund seeks to maintain an average dollar-weighted maturity greater than seven years and a duration of more than six years. PLEASE COMMENT ON THE FUND'S PERFORMANCE.*** With a total return of 3.34%, Nations Virginia Municipal Bond Fund (Investor A Shares) outperformed its peer group, the Lipper Virginia Municipal Debt Funds Average, which returned 2.81% for the 12-month period ended March 31, 2002. The Fund benefited from a longer duration stance than its peer group and an over-weighting in general obligation and hospital revenue bonds. WHAT WERE THE ECONOMIC AND MARKET CONDITIONS IN VIRGINIA? The Commonwealth of Virginia earned a "Aaa" credit rating from Moody's Investors Services, along with a negative outlook, "AAA" from Standard & Poor's Corporation and "AAA" from and Fitch, Inc. The Commonwealth's economy is broad and continues to see diversification away from manufacturing and into the trade, services and government sectors. Virginia's labor force continues to grow despite the national economic downturn, with the government sector seeing positive job growth. While manufacturing jobs fell 6%, --------------- *The outlook for this Fund may differ from that presented for other Nations Funds mutual funds. **The performance shown does not reflect the maximum front-end sales charge of 4.75%, which may apply to purchases of Investor A Shares. For standardized performance, please refer to the Performance table. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. ***Lipper, Inc. is an independent mutual fund performance monitor. Funds in the Lipper Virginia Municipal Debt Funds Average limit their assets to those securities that are exempt from taxation in Virginia. Source for all statistical data -- Banc of America Capital Management, LLC. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 89 NATIONS VIRGINIA MUNICIPAL BOND FUND MUNICIPAL FIXED INCOME MANAGEMENT TEAM COMMENTARY continued overall jobs fell only 1.5%. This was due to positive growth in the government sector and stable- to small-job losses in services and trade sectors. The investment sector experienced a 0.5% job increase. The recent downturn has caused the state to anticipate a combined deficit of $2.5 billion for the state's fiscal years 2002 and 2003. To close the budget gap, the governor has asked for budget cuts of 3% and 7% in 2002 and 2003, respectively. Also, the car tax repeal has been frozen at 70%. The Commonwealth did dip into reserves for the 2002-2003 budget but did not deplete the funds. We believe these actions may close the budget gap. However, it is still early in the budget cycle. WHAT IS YOUR OUTLOOK FOR VIRGINIA AND THE MUNICIPAL BOND MARKET FOR THE COMING YEAR? We believe key challenges for the Commonwealth will be to bridge the budget gap in the short-term, build adequate future reserves and continue meeting infrastructure needs which promotes economic growth for the long-term. The Commonwealth is experiencing short-term stress, but we believe prudent fiscal management can resolve this concern. We believe Virginia will return to a more sound fiscal footing and will maintain strong creditworthiness in the future. From a national municipal bond market perspective, as the market continues into 2002, we seek to maintain slightly defensive positioning. In anticipation of potential interest rate hikes, we will attempt to utilize bonds with shorter durations and/or higher coupon rates. We currently favor bonds maturing in less than ten years because we view these municipals as somewhat inexpensive compared to treasuries. Additionally, we continue to look for opportunities to "trade up" in credit quality where possible, since we think that state and local governments may likely see budget surpluses evaporate. Consequently, the need to issue additional debt may increase throughout 2002. 90 NATIONS VIRGINIA MUNICIPAL BOND FUND PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/02) [PIE CHART] 21.7% Hospital 16.8% Water 14.8% General obligation 10.6% Housing 9.3% Lease 7.8% Resource recovery 5.5% Industrial development revenue/ Pollution control revenue 3.4% Prerefunded 3.2% Eduction 6.9% Other
PORTFOLIO HOLDINGS WERE CURRENT AS OF MARCH 31, 2002, ARE SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE OF CURRENT HOLDINGS. TOP 10 HOLDINGS ------------------------------------------------- 1 Montgomery County, Virginia, Industrial Development Lease Authority, Revenue, Series 2000B, (AMBAC Insured), 5.500% 01/15/22 6.2% ------------------------------------------------- 2 West Point, Virginia, Industrial Development Authority, Solid Waste Disposal Revenue, (Chesapeake Corporation Project) Series 1994A, AMT, 6.375% 03/01/19 4.7% ------------------------------------------------- 3 Suffolk, Virginia, Redevelopment and Housing Authority, Multi-Family Housing Revenue Refunding, (Windsor Ltd. Partnership Project) Series 2001, (FNMA Insured), Mandatory Put 07/01/11 @ 100, 4.850% 07/01/31 4.6% ------------------------------------------------- 4 Mississippi State, Hospital Facilities and Equipment Authority, Revenue, (Forrest County General Hospital Project) Series 2000, (FSA Insured), 5.625% 01/01/20 4.0% ------------------------------------------------- 5 Miami-Dade County, Florida, Health Authority, Hospital Revenue Refunding, (Miami Childrens Hospital Project) Series 2001, (AMBAC Insured), 4.375% 08/15/10 3.6% ------------------------------------------------- 6 Virginia State, Residential Authority, Infrastructure Revenue, Series 2000A, (MBIA Insured), 5.500% 05/01/21 3.3% ------------------------------------------------- 7 Virginia Beach, Virginia, Public Improvement GO, Series 2000, 5.500% 03/01/18 3.2% ------------------------------------------------- 8 Fairfax County, Virginia, Water Authority, Water Revenue, Unrefunded Balance, Series 1992, 6.000% 04/01/22 3.2% ------------------------------------------------- 9 Staunton, Virginia, Industrial Development Authority, Educational Facilities Revenue, (Mary Baldwin College Project) Series 1996, 6.600% 11/01/14 3.2% ------------------------------------------------- 10 Fairfax County, Virginia, Public Improvement GO, Series 1999B, 5.500% 12/01/16 3.2% ------------------------------------------------- THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND SECURITIES IN WHICH THE FUND MAY INVEST.
91 NATIONS VIRGINIA MUNICIPAL BOND FUND PERFORMANCE GROWTH OF A $10,000 INVESTMENT [INVESTOR A SHARES AT MOP* (AS OF 3/31/02) RETURN CHART]
NATIONS VIRGINIA MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX ------------------------------- --------------------------- Nov. 8 1993 9525 10000 1994 8833 9483 1995 10559 11139 1996 10928 11632 1997 11938 12701 1998 12620 13524 1999 12210 13246 2000 13427 14793 2001 14035 15552 Mar. 31 2002 14094 15886
[INVESTOR A SHARES AT NAV** (AS OF 3/31/02) RETURN CHART]
NATIONS VIRGINIA MUNICIPAL BOND FUND LEHMAN MUNICIPAL BOND INDEX ------------------------------- --------------------------- Nov. 8 1993 10000 10000 1994 9273 9483 1995 11086 11139 1996 11473 11632 1997 12533 12701 1998 13249 13524 1999 12819 13246 2000 14097 14793 2001 14735 15552 Mar. 31 2002 14797 15886
AVERAGE ANNUAL TOTAL RETURN Investor A Shares
SINCE INCEPTION NAV** MOP* (11/8/93 through 3/31/02) 4.78% 4.18%
The charts to the left show the growth in value of a hypothetical $10,000 investment in Investor A Shares of Nations Virginia Municipal Bond Fund from the inception of the share class. The Lehman Municipal Bond Index is a broad-based, unmanaged index consisting of over 40,000 tax-free, investment grade bonds with a maturity of one year or greater. All interest is reinvested. It is unavailable for investment and does not reflect fees, brokerage commissions or other expenses of investing. The performance of Primary A, Investor B and Investor C Shares may vary based on the differences in sales loads and fees paid by the shareholders investing in each class. [CHART LEGEND] TOTAL RETURN (AS OF 3/31/02)
INVESTOR A INVESTOR B INVESTOR C PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC*** Inception date 1/11/94 11/8/93 10/21/93 11/3/94 ------------------------------------------------------------------------------------------------------------------------------ 1 YEAR PERFORMANCE 3.59% 3.34% -1.58% 2.57% -1.38% 2.46% 1.47% ------------------------------------------------------------------------------------------------------------------------------ AVERAGE ANNUAL RETURNS 3 YEARS 4.04% 3.75% 2.08% 3.03% 2.11% 3.00% 3.00% 5 YEARS 5.65% 5.39% 4.37% 4.68% 4.52% 4.66% 4.66% SINCE INCEPTION 4.80% 4.78% 4.18% 3.92% 3.92% 6.34% 6.34%
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS AND DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are historical in nature and measure net investment income and capital gain or loss from portfolio investments assuming reinvestment of distributions. *Figures at maximum offering price (MOP) reflect the maximum front-end sales charge of 4.75%. **Figures at net asset value (NAV) do not reflect any sales charges. Investor A Shares are available with a reduced or waived sales charge only under certain circumstances as described in the prospectus. ***Figures at CDSC reflect the maximum applicable contingent deferred sales charge. The performance shown includes the effect of fee waivers and/or expense reimbursements by the investment adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower. 92 NATIONS FUNDS Nations Short-Term Municipal Income Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 97.6% ALABAMA -- 0.6% $ 1,000 Alabama State, Public School and College Authority, Revenue, Series 1996, (MBIA Insured), 5.250% 11/01/05....... Aaa AAA $ 1,054 2,000 Butler, Alabama, Industrial Development Board, PCR Refunding, (James River Project) Series 1993, 5.500% 12/01/05....... Baa3 NR 1,997 -------- 3,051 -------- ALASKA -- 1.8% 1,000 Alaska, Student Loan Corporation, Student Loan Revenue, Series 1995A, AMT, (AMBAC Insured), 5.250% 07/01/03....... Aaa AAA 1,030 2,250 Anchorage, Alaska, Telephone Utilities Revenue Refunding, Series 1994A, (AMBAC Insured), 4.500% 12/01/02....... Aaa AAA 2,289 1,500 North Slope Borough, Alaska, GO, Series 2001A, (MBIA Insured), 4.493%& 06/30/07...... Aaa AAA 1,188 5,000 Valdez, Alaska, Marine Terminal Revenue Refunding, (Arco Transportation Alaska, Inc. Project) Series 1994B, (Atlantic Richfield Company Guarantee), Mandatory Put 01/01/03 @ 100, 3.100% 05/01/31....... VMIG1 A1+ 4,999 -------- 9,506 -------- ARIZONA -- 1.8% 3,000 Glendale, Arizona, Water and Sewer Revenue, Series 2000, (FGIC Insured), 4.750% 07/01/02....... Aaa AAA 3,022 1,035 Maricopa County, Arizona, Unified School District Number 48, GO Refunding, Series 1991B, 6.300% 07/01/04....... Aa2 AA 1,109
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- ARIZONA -- (CONTINUED) $ 5,000 Salt River, Arizona, Agriculture Improvement and Power District Electric System Revenue Refunding, (Salt River Project) Series 2001A, 5.000% 01/01/05....... Aa2 AA $ 5,206 -------- 9,337 -------- ARKANSAS -- 3.7% 1,500 Arkansas State, Development Finance Authority, Facilities Revenue, (Waste Management Project) Series 2001, AMT, 3.500% 08/01/21....... NR BBB 1,499 8,550 Arkansas State, GO, Series 2001A, 4.000% 08/01/05....... Aa2 AA 8,696 4,500 Crossett, Arkansas, PCR, (Georgia Pacific Corporation Project) Series 1984, 4.875% 10/01/07....... Baa3 NR 4,349 5,000 Pope County, Arkansas, Revenue Refunding, (Entergy Arkansas Incorporated Project) Series 2001, AMT, Mandatory Put 09/01/05 @ 100, 5.050% 09/01/28....... Baa3 BBB- 4,970 -------- 19,514 -------- CALIFORNIA -- 2.5% 6,000 California State, GO, Series 2000A-10-Reg-D, (Bayerische Hypotheken-Und Vereinsbank SBPA), 1.950%&& 03/01/03..... VMIG1 NR 6,000 5,000 California State, Revenue Anticipation Notes, Series 2001C, 1.503%&& 06/28/02..... MIG1 SP1+ 5,000 2,015 Riverside County, California, Asset Leasing Corporation Leasehold Revenue, Series 1993C, Mandatory Put 12/01/02 @100, 7.940% 06/01/19....... Aa3 A1 2,073 -------- 13,073 --------
SEE NOTES TO FINANCIAL STATEMENTS. 93 NATIONS FUNDS Nations Short-Term Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- COLORADO -- 0.4% $ 2,275 Denver City and County, Colorado, Airport Revenue Refunding, Series 2001D, AMT, (FSA Insured), 5.000% 11/15/05....... Aaa AAA $ 2,358 -------- CONNECTICUT -- 0.2% 1,000 Connecticut State, GO, Series 1996, 6.000% 05/15/03....... Aa2 AA 1,041 -------- DELAWARE -- 0.3% 1,330 Wilmington, Delaware, GO, (AMBAC Insured), 3.250% 12/01/03....... Aaa AAA 1,345 -------- DISTRICT OF COLUMBIA -- 1.4% 3,000 District Columbia, Revenue, (Field School Project) Series 2001A, (First Union National Bank-LOC), 1.500%&& 07/01/31..... NR A1 3,000 2,200 Metropolitan Washington, District of Columbia, Airport Authority, Virginia General Airport Revenue, Series 1992A, AMT, (MBIA Insured), 6.500% 10/01/05....... Aaa AAA 2,284 2,085 Metropolitan Washington, District of Columbia, Airport Authority, Virginia General Airport Revenue, Series 1997B, AMT, (FGIC Insured), 5.750% 10/01/03....... Aaa AAA 2,169 -------- 7,453 -------- FLORIDA -- 6.8% 5,000 Alachua County, Florida, Health Facilities Authority, Health Facilities Revenue, (Shands Teaching Hospital Project) Series 2002A, (SunTrust Bank LOC), 1.500%&& 12/01/12..... VMIG1 NR 5,000 2,500 Dade County, Florida Aviation Revenue, Series 1984A, (Morgan Guaranty Trust LOC), 1.510%&& 10/01/09..... VMIG1 A1+ 2,500
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $ 1,000 Florida, Housing Finance Agency, Multi-Family Housing Revenue Refunding, (Altamonte Project) Series 1994C, Mandatory Put 12/01/03 @ 100, 7.000% 12/01/24....... NR BBB+ $ 1,038 3,500 Hillsborough County, Florida, Industrial Development Authority, IDR, (Goodwill Industries Suncoast Project) Series 2001, (SunTrust Bank LOC), 1.500%&& 11/01/21..... VMIG1 NR 3,500 1,000 Jacksonville, Florida, Electric Authority Revenue Refunding, (St. John River-Issue 2 Project) Series 1993, 5.000% 10/01/05....... Aa2 AA 1,031 2,000 Jacksonville, Florida, Sales Tax Revenue, (River City Renaissance Project) Series 1995, (FGIC Insured), Prerefunded 10/01/05 @ 101, 5.375% 10/01/18....... Aaa AAA 2,141 1,380 Kissimmee, Florida, Utilities Authority Electric System Revenue Refunding, Series 2001, (AMBAC Insured), 5.000% 10/01/06....... Aaa NR 1,451 5,000 Miami-Dade County, Florida, Aviation Revenue Refunding, Series 1998A, AMT, 5.250% 10/01/07....... Aaa AAA 5,211 3,870 Miami-Dade County, Florida, Aviation Revenue, Series 2000-SG141, (FGIC Insured, Societe Generale SPA), 1.570%&& 10/01/29..... NR A1+ 3,870 1,000 Nassau County, Florida, PCR Refunding, (ITT Rayonier Inc. Project) Series 1992, 6.100% 06/01/05....... Baa2 BBB- 1,023 4,250 Pinellas County, Florida, Capital Improvement Revenue, Series 2000, 4.500% 01/01/06....... Aa3 AA- 4,367
SEE NOTES TO FINANCIAL STATEMENTS. 94 NATIONS FUNDS Nations Short-Term Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $ 1,000 Pinellas County, Florida, Research Recovery Revenue, Series 1996, AMT, (MBIA Insured), 5.100% 10/01/03....... Aaa AAA $ 1,031 880 St. Johns County, Florida, Industrial Development Authority, Hospital Revenue, (Flagler Hospital Project) Series 1992, 5.800% 08/01/03....... A2 A- 905 3,000 Tampa, Florida, Utility Tax and Special Revenue Refunding, Series 2001, (AMBAC Insured), 6.000% 10/01/05....... Aaa AAA 3,251 -------- 36,319 -------- GEORGIA -- 13.8% 2,000 Athens-Clarke County, Georgia, Unified Government Authority, Revenue, (University of Georgia Athletic Association Project) Series 2001, (SunTrust Bank LOC), 1.500%&& 09/01/31..... VMIG1 NR 2,000 25,990 Burke County, Georgia, Development Authority, PCR, (Oglethorpe Power Corporation) Series 1993A, (FGIC Insured, Bayerische Landesbank SBA), 1.450%&& 01/01/16..... VMIG1 A1+ 25,991 2,200 Burke County, Georgia, Development Authority, PCR, (Georgia Power Company Plant Vogtle Project) Series 2000, Mandatory Put 03/03/03 @ 100, 1.750%&& 09/01/30..... A2 A1 2,192 3,450 Clayton County, Georgia Housing Authority, Multifamily Housing Revenue Refunding, (Tara Court II Apartments Project) Series 2001, (FNMA Liquidity Facility), Mandatory Put 12/01/11 @ 100, 4.350% 12/01/31....... NR AAA 3,357 2,000 Cobb County, Georgia, Water and Sewer Revenue Refunding, Series 1996, 5.000% 07/01/02....... Aaa AAA 2,016
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $ 1,300 Dalton, Georgia, Building Authority, Revenue, Series 2001, 5.000% 07/01/03....... Aa3 A+ $ 1,339 2,000 Dalton, Georgia, Building Authority, Revenue, Series 2001, 5.000% 07/01/05....... Aa3 A+ 2,087 2,300 DeKalb County, Georgia, Development Authority, Industrial Development Revenue, (Rock-Tenn Converting Company Project) Series 1995, (SunTrust Bank, Atlanta), 1.600%&& 04/01/10..... Aa3 NR 2,300 6,500 Forsyth County, Georgia, Development Authority, Revenue, (Pinecrest Academy Inc. Project) Series 2000, (SunTrust Bank LOC), 1.500%&& 09/01/25..... VMIG1 NR 6,501 1,000 Georgia, George L. Smith II World Congress Center Authority, Revenue Refunding, (Domed Stadium Project) Series 2000, AMT, (MBIA Insured), 6.000% 07/01/05....... Aaa AAA 1,064 1,500 Georgia, Medical Center Hospital Authority, Revenue, Unrefunded Balance, Series 1992C, (MBIA Insured), 6.400% 08/01/06....... Aaa AAA 1,551 2,000 Georgia, Municipal Electric Authority Power Revenue, Series 1993D, (MBIA Insured), 4.600% 01/01/03....... A2 A 2,034 2,685 Gwinnett County, Georgia, Development Authority, IDR, (Maltese Signs Inc. Project) Series 2000, AMT, (Suntrust Banks Inc. LOC), 1.650%&& 02/01/15..... VMIG1 NR 2,685 4,000 Houston County, Georgia, School District, GO, Series 2002, (State Aid Withholding), 4.000% 09/01/06....... Aa2 AA 4,035
SEE NOTES TO FINANCIAL STATEMENTS. 95 NATIONS FUNDS Nations Short-Term Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $ 3,750 Monroe County, Georgia, Development Authority, PCR, (Georgia Power Company Plant Scherer Project) Series 2001, (AMBAC Insured), Mandatory Put 12/01/08 @ 100, 4.200% 01/01/12....... Aaa AAA $ 3,696 7,000 Richmond County, Georgia, Development Authority, IDR Refunding, (Archer Daniels Midland Project) Series 1993, 5.300% 05/01/05....... NR A+ 7,334 1,000 Richmond County, Georgia, GO, Board of Education, Series 2002,(State Aid Withholding) 5.000% 11/01/05....... Aa2 AA 1,047 2,450 Savannah, Georgia, Hospital Authority, Hospital Improvement Revenue, (St. Joseph's Hospital Project) Series 1993, Prerefunded 07/01/03 @ 102, 6.125% 07/01/12....... A2 NR 2,608 -------- 73,837 -------- GUAM -- 0.7% 3,820 Guam, Airport Authority, Revenue, Series 1993A, 6.375% 10/01/10....... NR BBB 3,907 -------- HAWAII -- 0.5% 2,500 Hawaii State, GO Refunding, Series 2002CY, (FSA Insured), 5.250% 02/01/07....... Aaa AAA 2,626 -------- ILLINOIS -- 7.0% 1,260 Broadview, Illinois, Tax Increment Revenue, Series 1999, 4.750% 07/01/05....... NR NR 1,276 3,210 Chicago, Illinois, Single Family Mortgage Revenue, Series 2001, AMT, (FNMA/GNMA/ FHLMC COLL, Merrill Lynch Capital Services SBA), 1.630%&& 04/01/21..... NR A1+ 3,210
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- ILLINOIS -- (CONTINUED) $ 5,580 Cook County, Illinois, Township High School District Number 211 Palatine and Schaumb GO, Series 2001, 5.000% 12/01/05....... NR AA $ 5,836 4,500 Illinois State, GO, Series 2001, 5.000% 11/01/05....... Aa2 AA 4,707 4,600 Illinois, Development Finance Authority, Revenue Refunding, (Olin Corporation Project) Series 2002A, 4.500% 06/01/04....... Baa3 BBB 4,588 3,855 Illinois, Educational Facilities Authority, Revenue, (National Louis University) Series 1999A, (American National B&T LOC), 1.500%&& 06/01/29..... NR A1 3,855 2,500 Illinois, Educational Facilities Authority, Revenue, (University of Chicago Project) Series 2001B-1, Mandatory Put 07/01/03 @ 100, 2.700% 07/01/36....... Aa1 AA 2,505 2,500 Illinois, Educational Facility Authority, Revenue, (University of Chicago Project) Series 1998B, Mandatory Put 07/01/04 @ 100, 4.400% 07/01/25....... Aa1 AA 2,557 5,000 Illinois, Health Facilities Authority, Revenue, (Rockford Memorial Hospital Group Project) Series 1994, (AMBAC Insured), 1.350%&& 09/16/24..... Aaa AAA 5,000 1,125 Kane MC Henry Cook And DeKalb County, Illinois, (United School District Number 300 Project) Series 2002, (AMBAC Insured), 2.828%& 12/01/03...... Aaa NR 1,074 1,100 Rosemont, Illinois, GO, Series 1991B, (FGIC Insured), 6.400% 02/01/03....... Aaa AAA 1,127
SEE NOTES TO FINANCIAL STATEMENTS. 96 NATIONS FUNDS Nations Short-Term Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- ILLINOIS -- (CONTINUED) $ 1,540 Winnebago Boone Etc County, Illinois, GO, Series 1999, (FSA Insured), 5.750% 01/01/03....... Aaa NR $ 1,582 -------- 37,317 -------- INDIANA -- 3.9% 1,830 Fremont, Indiana, Middle School Building Corporation, Revenue Refunding, Series 1994A, (AMBAC Insured), 4.650% 07/15/04....... Aaa AAA 1,888 5,400 Merrillville, Indiana, Community School Corporation, Tax Anticipation Notes, Series 2002, 2.500% 12/31/02....... NR NR 5,401 1,500 Rockport, Indiana, PCR Refunding, (AEP Generating Company Project) Series 1995A, Mandatory Put 07/13/06 @ 100, 4.050% 07/01/25....... Aaa AAA 1,500 2,500 Rockport, Indiana, PCR Refunding, (AEP Generating Company Project) Series 1995B, (AMBAC Insured, Bank of New York SBPA), Mandatory Put 07/13/06 @ 100, 4.050% 07/01/25....... Aaa AAA 2,553 9,300 Tippecano, Indiana, Independent School Corporation, Temporary Loan Notes, Series 2002, 2.100% 12/27/02....... NR NR 9,272 -------- 20,614 -------- IOWA -- 0.2% 1,000 Des Moines, Iowa, GO Refunding, Series 1996F, 5.000% 06/01/06....... Aa2 AA+ 1,035 -------- KANSAS -- 0.2% 1,000 Johnson County, Kansas, Unified School District Number 512, GO, Series 1997, 4.200% 10/01/02....... Aa1 AA 1,011 --------
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- LOUISIANA -- 1.7% $ 5,000 Calcasieu Parish, Lousiana, Industrial Development Board, PCR Refunding, (Occidental Petroleum Project) Series 2001, 4.800% 12/01/06....... Baa2 BBB $ 5,121 2,000 De Soto Parish, Louisiana, PCR Refunding, (International Paper Company Project) Series 1993A, 5.050% 12/01/02....... Baa2 BBB 2,016 2,000 Louisiana State, Gas and Fuels Tax Revenue Refunding, Series 1999A, (FSA Insured), 5.000% 11/15/04....... Aaa AAA 2,091 -------- 9,228 -------- MAINE -- 0.6% 3,500 Baileyville, Maine, PCR, (Georgia-Pacific Corporation Project) Series 1998, 4.750% 06/01/05....... Baa3 NR 3,459 -------- MASSACHUSETTS -- 0.3% 1,495 Massachusetts State, Industrial Financing Agency Revenue, Series 1994, Prerefunded 11/15/03 @ 102, 7.100% 11/15/18....... Aaa AAA 1,627 -------- MICHIGAN -- 2.8% 1,000 Kent County, Michigan, Airport Facilities Revenue, (Kent County International Airport Project) Series 1995, AMT, Prerefunded 01/01/05 @ 102, 6.100% 01/01/25....... Aaa AAA 1,080 1,000 Michigan State, Hospital Finance Authority, Revenue, (Ascension Health Credit Project) Series 1999B, Mandatory Put 11/15/05 @ 100, 5.200% 11/15/33....... Aa2 AA 1,029 1,800 Michigan State, Hospital Finance Authority, Revenue, Mandatory Put 11/15/06 @ 100, 5.300% 11/15/33....... Aa2 AA 1,847
SEE NOTES TO FINANCIAL STATEMENTS. 97 NATIONS FUNDS Nations Short-Term Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MICHIGAN -- (CONTINUED) $ 5,900 Michigan State, Housing Development Authority, Rental Housing Revenue, Series 2000B, (MBIA Insured, Morgan Guaranty Trust), 1.500%&& 04/01/24..... VMIG1 A1+ $ 5,900 5,330 Oakland, Michigan University of Michigan, Revenue, Series 2001, (FGIC Insured), 1.500%&& 03/01/31..... VMIG1 NR 5,330 -------- 15,186 -------- MISSISSIPPI -- 1.7% 2,820 Jackson, Mississippi, Redevelopment Authority, Urban Renewal Revenue, (Jackson Medical Mall Foundation Project) Series 1997A, (Bank One Louisiana LOC), Mandatory Put 11/01/01 @ 100, 4.600% 11/01/12....... NR A1 2,825 6,000 Mississippi State, Gaming County Highway Improvements Project, GO, Series 2001B, 5.000% 10/01/06....... Aa3 AA 6,287 -------- 9,112 -------- MISSOURI -- 1.3% 1,000 Missouri State, Environmental and Energy Resource Authority, Environmental Improvement Revenue, (Kansas City Power and Light Project) Series 1993, Mandatory Put 09/01/04 @ 100, 3.900% 01/02/12....... A2 A2 1,005 1,000 Missouri State, Environmental Improvement and Energy Resource Authority, PCR Refunding, (Associated Electrical Cooperation -- Thomas Hill Project) Series 1996, 5.750% 12/01/02....... A1 AA 1,025 2,250 Missouri State, Health and Educational Facilities Authority, Revenue, (Saint Lukes Episcopal- Presbyterian Hospital Project) Series 2001, (FSA Insured), 3.850% 12/01/05....... Aaa AAA 2,264
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MISSOURI -- (CONTINUED) $ 2,470 Missouri State, Health and Educational Facilities Authority, Revenue, (Saint Lukes Episcopal- Presbyterian Hospital Project) Series 2001, (FSA Insured), 4.000% 12/01/06....... Aaa AAA $ 2,471 -------- 6,765 -------- NEVADA -- 0.9% 3,690 Clark County, Nevada, Airport Refunding GO, Series 1993, 5.250% 06/01/07....... Aaa AAA 3,817 1,035 Henderson, Nevada, GO Refunding, Series 2001, 4.000% 06/01/05....... Aa3 AA- 1,048 -------- 4,865 -------- NEW HAMPSHIRE -- 0.7% 3,500 New Hampshire State, Business Financial Authority PCR Refunding, (United Illuminating Company) Series 1997A, AMT, Mandatory Put 02/01/04 @ 100, 3.750% 07/01/27....... A3 NR 3,485 -------- NEW MEXICO -- 0.5% 2,900 New Mexico State, Hospital Equipment Loan Council Hospital Revenue, (Presbyterian Healthcare Project) Series 2001A, 4.600% 08/01/08....... A1 A 2,872 -------- NORTH CAROLINA -- 2.5% 1,000 Durham, North Carolina, GO Refunding, Series 1992, 5.700% 02/01/05....... Aaa AAA 1,018 1,005 North Carolina, Medical Care Commission, Gaston Health Care Hospital Revenue, Series 1998, 4.500% 02/15/05....... A1 A+ 1,023 1,000 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Halifax Regional Medical Center, Inc. Project) Series 1998, 4.300% 08/15/02....... Baa1 NR 1,004
SEE NOTES TO FINANCIAL STATEMENTS. 98 NATIONS FUNDS Nations Short-Term Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $ 1,560 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Halifax Regional Medical Center, Inc. Project) Series 1998, 4.300% 08/15/03....... Baa1 NR $ 1,573 1,630 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Halifax Regional Medical Center, Inc. Project) Series 1998, 4.400% 08/15/04....... Baa1 NR 1,638 1,725 North Carolina, Medical Care Commission, Hospital Revenue, (Gaston Health Care Project) Series 1998, 4.300% 02/15/03....... A1 A+ 1,753 5,095 Winston-Salem, North Carolina Risk Acceptance Management Corporation Certificates of Participation, Series 1988, (Wachovia Bank, N.A. SBPA), 1.500%&& 07/01/09..... VMIG1 A1 5,095 -------- 13,104 -------- OHIO -- 2.6% 1,545 Akron/Bath/Copely, Ohio, Joint Township Hospital District, Revenue, (Summa Health Systems Project) Series 1993A, 5.300% 11/15/02....... Baa1 NR 1,564 2,015 Akron/Bath/Copley, Ohio, Joint Township Hospital District, Revenue, (Summa Health Systems Project) Series 1993A, 5.750% 11/15/08....... Baa1 NR 2,061 2,500 Dayton, Ohio, Special Facilities Revenue Refunding, Series 1993, 6.050% 10/01/09....... NR BB+ 2,159 5,000 Ohio State, Public Facilities Commission, Revenue, (Higher Education Capital Facilities Project) Series 1996 II-A, 4.375% 11/01/05....... Aaa AAA 5,125 2,960 Ohio, Housing Financing Agency, Mortgage Revenue, Series 2000D, AMT, (GNMA COLL), 4.800% 09/01/02....... Aaa NR 2,990 -------- 13,899 --------
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- OKLAHOMA -- 1.5% $ 1,545 Oklahoma State, Industry Authority, Revenue Refunding, (Integris Baptist Medical Center Project) Series 1995D, 5.000% 08/15/03....... Aaa AAA $ 1,590 2,000 Oklahoma, Housing Development Authority, Revenue, Series 2000A, (FHLMC COLL), 5.100% 11/01/05....... Aa3 NR 2,079 2,385 Tulsa County, Oklahoma, Independent School District Number 001, GO, Series 2000A, 5.000% 03/01/03....... Aa2 AA 2,447 2,000 Tulsa, Oklahoma, Public Facilities Authority Solid Waste Steam and Electric Revenue Refunding, (Ogden Martin System Tulsa Project) Series 1994, (AMBAC Insured), 5.250% 11/01/02....... Aaa AAA 2,036 -------- 8,152 -------- PENNSYLVANIA -- 2.6% 8,450 Chester County, Pennsylvania, Industrial Development Authority, Revenue, (Malvern Prep School Project) Series 2001, (First Union National Bank LOC), 1.550%&& 04/01/31..... NR NR 8,451 1,535 Delaware County, Pennsylvania Authority, Health Care Revenue, Series 1993B, Prerefunded 11/15/05 @ 100, 6.000% 11/15/07....... Aaa NR 1,647 1,415 Southeastern Pennsylvania, Transportation Authority, Pennsylvania Special Revenue, Unrefunded Balance, (Series) 1995A, (FGIC Insured), 6.500% 03/01/04....... Aaa AAA 1,505 2,200 Washington County, Pennsylvania, Industrial Development Authority, PCR, (West Pennsylvania Power Company Project) Series 1993F, (MBIA- IBC Insured), 4.950% 03/01/03....... Aaa AAA 2,238 -------- 13,841 --------
SEE NOTES TO FINANCIAL STATEMENTS. 99 NATIONS FUNDS Nations Short-Term Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- 4.4% $ 1,950 Aiken County, South Carolina, Construction School District, GO, Series 2000, (SCSDE), 5.000% 04/01/02....... Aa1 AA+ $ 1,950 1,950 Aiken County, South Carolina, Construction School District, GO, Series 2000, (SCSDE), 5.125% 04/01/03....... Aa1 AA+ 2,006 1,370 Greenville, South Carolina, Hospital System Authority, Hospital Facilities Revenue Refunding, Series 1993C, 5.250% 05/01/03....... Aa3 AA 1,407 3,965 Richland County, South Carolina, PCR Refunding, (Union Camp Corporation Project) Series 1992C, 5.875% 11/01/02....... Baa2 BBB 4,033 2,370 South Carolina State, Education Assistance Authority Revenue Refunding, (Guaranteed Student Loan Senior Lien Project) Series 1993A-3, AMT, (GTD STD LNS), 5.200% 09/01/05....... NR AAA 2,461 2,520 South Carolina, Jobs Economic Development Authority, Economic Development Revenue, (Bennettsville Printing Project) Series 1995, (First Union National Bank LOC), 1.600%&& 09/01/10..... NR A1 2,520 1,010 South Carolina, Jobs Economic Development Authority, Economic Development Revenue, (Valley Proteins Inc. Project) Series 1995, (Harris Bank LOC), 1.600%&& 04/01/10..... NR A1+ 1,010 5,000 South Carolina, Jobs Economic Development Authority, Economic Development Revenue, (Waste Management South Carolina Inc. Project) Series 2001, AMT, Mandatory Put 11/01/04 @ 100, 4.100% 11/01/16....... NR BBB 4,966
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $ 1,000 South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, (Palmetto Health Alliance Project) Series 2000A, 6.125% 12/15/02....... Baa2 BBB $ 1,015 1,000 South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, (Palmetto Health Alliance Project) Series 2000A, 6.300% 12/15/03....... Baa2 BBB 1,035 1,030 South Carolina, Jobs Economic Development Authority, IDR, Series 1998, (First Union National Bank LOC), 1.700%&& 09/01/19..... NR NR 1,030 -------- 23,433 -------- SOUTH DAKOTA -- 0.2% 1,100 Rapid City, South Dakota, Sales Tax Revenue Refunding, Series 2002, (AMBAC Insured), 5.500% 06/01/05....... Aaa NR 1,163 -------- TENNESSEE -- 0.9% 5,000 Memphis-Shelby County, Tennessee, Airport Authority, Special Facilities Revenue Refunding, (Federal Express Corporation Project) Series 2001, 5.000% 09/01/09....... Baa2 BBB 5,028 -------- TEXAS -- 13.8% 1,000 Arlington, Texas, Waterworks and Sewer Revenue, (AMBAC Insured), 5.500% 06/01/04....... Aaa AAA 1,049 2,830 Austin, Texas, GO, Series 1995, Prerefunded 09/01/05 @ 100, 5.500% 09/01/12....... Aa2 AA+ 3,007 4,000 Austin, Texas, Utilities System Revenue Refunding, Series 1992A, (MBIA Insured), 6.000% 11/15/06....... Aaa AAA 4,339
SEE NOTES TO FINANCIAL STATEMENTS. 100 NATIONS FUNDS Nations Short-Term Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 2,275 Austin, Texas, Utilities System Revenue Refunding, Series 1993A, (FGIC-TCRS Insured), 5.375% 05/15/05....... Aaa AAA $ 2,363 3,000 Austin, Texas, Water and Wastewater System Revenue Refunding, Series 2001A&B, (FSA Insured), 6.500% 05/15/05....... Aaa AAA 3,253 1,000 Brazos River Authority, Texas, PCR Refunding, (Texas Electric Company Project) Series 2001A, AMT, Mandatory Put 04/01/04 @ 100, 4.950% 10/01/30....... NR BBB+ 1,008 5,000 Brazos River Authority, Texas, PCR Refunding, (Texas Electric Company Project) Series 2001B, Mandatory Put 11/01/06 @ 100, 4.750% 05/01/29....... Baa1 BBB+ 4,969 2,000 Brazos River Authority, Texas, PCR Refunding, (Texas Utilities Electric Company Project) Series 1999A, AMT, Mandatory Put 04/01/03 @ 100, 4.800% 04/01/33....... NR NR 2,010 1,000 Carroll, Texas, Independent School District, GO, Series 2000, (PSF-GTD), 1.700%&& 08/15/32..... VMIG1 A1+ 1,000 1,000 Central Texas, Higher Education Authority, Revenue Refunding, Series 1993, AMT, (GTD STD LNS), 5.200% 12/01/04....... Aaa NR 1,046 1,000 Clear Creek, Texas, Independent School District, GO Refunding, Series 1998, (PSF-GTD), 2.368%& 02/15/03...... Aaa AAA 980 1,000 Dallas, Texas, Independent School District, GO Refunding, Series 2002, (PSF-GTD), 2.439%& 02/15/03...... Aaa AAA 979 1,000 Dallas, Texas, Waterworks and Sewer System Revenue Refunding, Series 2001, 5.000% 10/01/06....... Aa2 AA+ 1,046
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 2,500 Dallas-Fort Worth, Texas, International Airport Facilities Improvement, Corporate Revenue Refunding, (American Airlines Project) Series 2000A, AMT, Mandatory Put 11/01/03 @ 100, 5.950% 05/01/29....... B1 BB $ 2,444 4,000 Gulf Coast Waste Disposal Authority, Texas Environmental Facility Revenue Refunding, (Occidental Chemical Corporation Project) Series 2001, 4.200% 11/01/06....... Baa2 BBB 3,957 1,115 Harris County, Texas, Flood Control District, GO, Series 1992A, 5.800% 10/01/03....... Aa1 AA+ 1,135 4,000 Harris County, Texas, Health Facilities Development Authority, Hospital Revenue, (Memorial Hospital Systems Project) Series 1997A, (MBIA Insured), 4.875% 06/01/05....... Aaa AAA 4,128 2,000 Harris County, Texas, Health Facilities Development Corporation Revenue, (St. Lukes Episcopal Hospital Project) Series 2001A, 5.250% 02/15/06....... NR AA 2,067 1,000 Lewisville, Texas, Independent School District, GO Refunding, Series 1992, (PSF-GTD), 6.100% 08/15/02....... Aaa NR 1,016 3,750 Matagorda County, Texas Naval District No 1, PCR Refunding, (Central Power & Light Company Project) Series 1999A, Mandatory Put 11/01/03 @ 100, 3.750% 05/01/30....... Baa2 NR 3,725 1,000 Mesquite, Texas, Independent School District, GO Refunding, Series 1997A (PSF-GTD), 5.000% 08/15/04....... Aaa AAA 1,041
SEE NOTES TO FINANCIAL STATEMENTS. 101 NATIONS FUNDS Nations Short-Term Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 5,000 Red River Authority, Texas, Education Financing Revenue, (Parish Day School Project) Series 2001A, (Allied Irish Bank plc-LOC), Mandatory Put 12/01/04 @ 100, 3.400% 12/01/31....... VMIG1 NR $ 4,981 4,940 Red River Authority, Texas, PCR Refunding, (Hoechst Celanese Corporation Project) Series 1994, 5.200% 05/01/07....... Baa2 BBB 4,951 2,800 Richardson, Texas, Independent School District, GO Refunding, Series 1998, (PSF-GTD), 5.000% 02/15/03....... Aaa AAA 2,869 2,000 San Antonio, Texas, Electric and Gas, Unrefunded Balance, Series 1994, 4.700% 02/01/05....... Aa1 AA 2,060 2,000 Texas State, College Student Loan Authority, Revenue, Series 1995, AMT, 5.300% 08/01/03....... Aa1 AA 2,060 3,030 Texas, Texas A&M University, Revenue, Series 1996, 5.750% 05/15/05....... Aa1 AA+ 3,223 4,000 University of Texas, Permian University Revenue Refunding, Series 2002A, 5.000% 07/01/06....... Aaa AAA 4,180 2,555 University of Texas, University Financing Systems Revenue, Series 2001C, 4.000% 08/15/05....... Aaa AAA 2,585 -------- 73,471 -------- UTAH -- 2.4% 2,370 Jordan, Utah, School District, GO, Series 1997, (SCH BD GTY), 5.000% 06/15/02....... NR AAA 2,386 10,000 Utah State, GO, Series 2001B, 4.500% 07/01/04....... Aaa AAA 10,321 -------- 12,707 --------
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- 3.1% $ 2,000 Arlington County, Virginia Industrial Development Authority, Hospital Facilities Revenue, (Virginia Hospital Center Project) Series 2001, 5.500% 07/01/05....... A2 NR $ 2,090 1,080 Chesterfield County, Virginia, GO Refunding, Series 1991, 5.900% 07/15/02....... Aaa AAA 1,093 4,000 Fairfax County, Virginia, Economic Development Authority, Resource Recovery, Revenue Refunding, Series 1998A, AMT, (AMBAC Insured), 5.950% 02/01/07....... Aaa AAA 4,299 3,350 Richmond, Virginia, GO, Series 2000, (FSA Insured), 5.125% 01/15/04....... Aaa AAA 3,481 1,500 Virginia State, GO, Series 1993B, 5.200% 12/01/09....... Aaa AAA 1,579 675 Virginia, Education Loan Authority, Guaranteed Student Loan Revenue, Series 1992G, AMT, (GTD STD LNS), 6.625% 09/01/03....... Aaa NR 703 1,635 Virginia, Port Authority CommonWealth Revenue, Series 1996, AMT, 5.750% 07/01/04....... Aa1 AA+ 1,720 1,730 Virginia, Port Authority CommonWealth Revenue, Series 1996, AMT, 5.750% 07/01/05....... Aa1 AA+ 1,835 -------- 16,800 -------- WASHINGTON -- 2.8% 2,605 Seattle, Washington, GO, Series 2001, 4.000% 08/01/05....... Aa1 AAA 2,636 3,500 Seattle, Washington, Municipal Light and Power Revenue, Series 1992A, Prerefunded 08/01/02 @ 102, 5.750% 08/01/16....... Aa3 A+ 3,616 1,765 Spokane County, Washington, School District Number 354 Mead, GO Refunding, Series 1993, (MBIA Insured), 5.100% 12/01/05....... Aaa AAA 1,847
SEE NOTES TO FINANCIAL STATEMENTS. 102 NATIONS FUNDS Nations Short-Term Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- WASHINGTON -- (CONTINUED) $ 1,500 Washington State, GO, Series 2001B, 5.000% 09/01/06....... Aa1 AA+ $ 1,567 5,000 Washington State, GO, Series 2001R-A, 5.250% 09/01/05....... Aa1 AA+ 5,261 -------- 14,927 -------- WEST VIRGINIA -- 0.7% 3,625 Cabell County, West Virginia, Board of Education GO Refunding, Series 1997, 5.500% 05/01/04....... NR AA- 3,787 -------- WISCONSIN -- 3.8% 5,000 Kaukauna, Wisconsin, PCR, Refunding, (International Paper Project) Series 1997A, 5.150% 07/01/06....... Baa2 BBB 5,097 5,000 Marinette County, Wisconsin, BAN, Series 2002, 3.350% 09/01/04....... MIG1 NR 5,017 1,000 Milwaukee, Wisconsin, Metropolitan Sewer District, GO, Series 1992A, 6.125% 10/01/03....... Aa1 AA+ 1,052 2,250 Wisconsin State, GO Refunding, Series 1993, 4.900% 11/01/06....... Aa3 AA 2,345 4,600 Wisconsin State, GO Refunding, Series 1998, 5.000% 05/01/05....... Aa3 AA 4,792 1,000 Wisconsin State, GO, Series 2001A, 6.000% 05/01/04....... Aa3 AA 1,059 1,000 Wisconsin, State, Transportation Revenue, Series 1992A, 5.400% 07/01/04....... Aa3 AA- 1,008 -------- 20,370 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $521,209)...................... 520,625 -------- SHARES VALUE (000) (000) --------------------------------------------------------------- INVESTMENT COMPANIES -- 3.1% (Cost $16,489) 16,489 Nations Tax Exempt Fund, Primary A Class#...................... $ 16,489 -------- TOTAL INVESTMENTS (Cost $537,698*)............... 100.7% 537,114 -------- OTHER ASSETS AND LIABILITIES (NET).......................... (0.7)% Receivable for Fund shares sold......... $ 6,926 Dividends receivable.................... 48 Interest receivable..................... 5,888 Payable for Fund shares redeemed........ (5,566) Investment advisory fee payable......... (77) Administration fee payable.............. (89) Shareholder servicing and distribution fees payable.......................... (61) Distributions payable................... (845) Payable for investment securities purchased............................. (9,872) Accrued Trustees' fees and expenses..... (48) Accrued expenses and other liabilities........................... (78) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................................. (3,774) -------- NET ASSETS....................... 100.0% $533,340 ======== NET ASSETS CONSIST OF: Undistributed net investment income..... $ 142 Accumulated net realized loss on investments sold...................... (413) Net unrealized depreciation of investments........................... (584) Paid-in capital......................... 534,195 -------- NET ASSETS.............................. $533,340 ========
SEE NOTES TO FINANCIAL STATEMENTS. 103 NATIONS FUNDS Nations Short-Term Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
VALUE --------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($364,371,843 / 35,969,933 shares outstanding).......................... $10.13 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($125,261,895 / 12,363,985 shares outstanding)................... $10.13 ======== Maximum sales charge.................... 1.00% Maximum offering price per share........ $10.23 INVESTOR B SHARES: Net asset value and offering price per share** ($1,884,086 / 185,990 shares outstanding).......................... $10.13 ======== INVESTOR C SHARES: Net asset value and offering price per share** ($41,821,717 / 4,128,456 shares outstanding).......................... $10.13 ========
--------------- *Federal Income Tax Information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. &Zero coupon security. The rate shown reflects the yield to maturity. &&Floating rate note. The interest rate shown reflects the rate in effect at March 31, 2002. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Short-Term Municipal Income Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Industrial Development Revenue/Pollution Control Revenue 20.28% Education Revenue 11.23% SEE NOTES TO FINANCIAL STATEMENTS. 104 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 98.0% ALABAMA -- 2.2% $ 3,265 Alabama, Special Care Facilities Financing Authority, Hospital Revenue, (Charity Obligation Group Project) Series 1999A, (MBIA Insured, Escrowed to Maturity), 4.625% 11/01/10...... Aaa NR $ 3,306 2,500 Birmingham, Alabama, Industrial Water Board, Industrial Water Supply Revenue, Series 1978, (MBIA Insured), 6.000% 07/01/07...... NR AAA 2,727 2,500 Birmingham, Alabama, Revenue, (Baptist Medical Center of Birmingham Project) Series 1993A, (MBIA Insured), 5.500% 08/15/05...... Aaa AAA 2,586 9,240 Courtland, Alabama, Industrial Development Board, Solid Waste Disposal Revenue, (Champion International Corporation Project) Series 1992, AMT, 7.000% 06/01/22...... Baa2 BBB 9,455 5,750 Courtland, Alabama, Industrial Development Board, Solid Waste Disposal Revenue, (Champion International Corporation Project) Series 1993A, AMT, 6.375% 03/01/29...... Baa2 BBB 5,796 2,320 Prichard, Alabama, Waterworks and Sewer Board, Water and Sewer Revenue Refunding, Series 1994, (AMBAC Insured), 5.650% 11/15/04...... Aaa AAA 2,466 ---------- 26,336 ---------- ALASKA -- 1.0% 1,505 Alaska State, Housing Finance Corporation, Revenue, Series 1995A, (MBIA Insured), 5.400% 06/01/08...... Aaa AAA 1,540
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- ALASKA -- (CONTINUED) $ 3,345 Alaska, Industrial Development and Export Authority, Revenue Refunding, Series 1998A, AMT, (MBIA Insured), 5.250% 04/01/12...... Aaa AAA $ 3,382 3,280 Alaska, Student Loan Corporation, Student Loan Revenue, Series 1995A, AMT, (AMBAC Insured), 5.250% 07/01/03...... Aaa AAA 3,379 1,250 Alaska, Student Loan Corporation, Student Loan Revenue, Series 1997A, AMT, (AMBAC Insured), 5.200% 07/01/06...... Aaa AAA 1,299 2,000 Anchorage, Alaska, GO, Series 1996A, (AMBAC Insured), 5.100% 08/01/07...... Aaa AAA 2,072 ---------- 11,672 ---------- ARIZONA -- 1.5% 725 Maricopa County, Arizona, Unified High School District Number 210, GO, Series 1993F, Prerefunded 07/01/03 @ 101, 5.450% 07/01/08...... Aa3 AA 759 2,125 Pima County, Arizona, Unified School District, GO, Series 1995G, (MBIA Insured), 7.300% 07/01/05...... Aaa AAA 2,369 1,500 Salt River, Arizona, Agricultural Improvement and Power District, Electric Systems Revenue Refunding, (Salt River Project) Series 1993B, 5.050% 01/01/06...... Aa2 AA 1,570 8,000 Salt River, Arizona, Agricultural Improvement and Power District, Electric Systems Revenue Refunding, (Salt River Project) Series 2001A, 5.250% 01/01/06...... Aa2 AA 8,431
SEE NOTES TO FINANCIAL STATEMENTS. 105 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- ARIZONA -- (CONTINUED) $ 3,000 Tucson and Pima County, Arizona, Industrial Development Authority, Single Family Mortgage Revenue, Series 2001A-1, AMT, (GNMA/FNMA/FHLMC COLL), 4.650% 07/01/21...... NR AAA $ 3,110 2,000 Tucson & Pima County, Arizona, Industrial Development Authority, Single Family Mortgage Revenue, Series 2001A1, AMT, (GNMA/FNMA/FHLMC COLL), 4.650% 01/01/34...... NR AAA 2,100 ---------- 18,339 ---------- ARKANSAS -- 1.5% 10,000 Arkansas State, GO, Series 2000A, 5.500% 08/01/11...... Aa2 AA 10,651 7,000 Hot Springs, Arkansas, IDR Refunding, (Willamette Industries Project) Series 1991, 6.650% 12/01/02...... NR BBB 7,181 ---------- 17,832 ---------- CALIFORNIA -- 1.2% 3,000 ABAG Finance Authority for NonProfit Corporations, California, Multi-Family Revenue Refunding, Series 2000B, (GTY-AGMT), Mandatory Put 8/15/08 @ 100, 6.250% 08/15/30...... BBa3 BBB- 3,243 2,000 California State, GO, Series 1990, 7.000% 08/01/04...... A1 A+ 2,178 3,265 California State, GO, Series 2000, 5.000% 12/01/16...... A1 A+ 3,221 5,500 California Statewide Communities Development Authority, Revenue Certificates of Participation, Series 1993, 5.400% 11/01/15...... A3 NR 5,537 ---------- 14,179 ----------
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- COLORADO -- 1.1% $10,000 Colorado, E-470 Public Highway Authority, Revenue, Series 1997B, (MBIA Insured), 5.740%& 09/01/12..... Aaa AAA $ 5,934 4,000 Colorado, Northwest Parkway Public Highway Authority, Revenue, Series 2001C, (0.000)% due 06/15/21 5.700% beginning 6/15/11.............. Aaa AAA 2,428 3,075 Denver City and County, Colorado, Airport Revenue Refunding, Series 2000A, AMT, (AMBAC Insured), 6.000% 11/15/15...... Aaa AAA 3,270 1,630 Denver, Colorado, Health and Hospital Authority, Healthcare Revenue, Series 2001A, 6.000% 12/01/23...... Baa2 BBB+ 1,622 ---------- 13,254 ---------- CONNECTICUT -- 1.1% 1,500 Connecticut State, GO Refunding, Series 1998B, 5.375% 08/15/03...... Aa2 AA 1,559 6,465 Connecticut State, Housing Finance Authority, Revenue, (Housing Mortgage Finance Program) Series 1997D-2, AMT, 5.600% 11/15/21...... Aaa AAA 6,476 5,000 Stamford, Connecticut, Housing Authority, Multifamily Revenue Refunding, (Fairfield Apartments Project) Series 1998, AMT, Mandatory Put 12/01/08 @ 100, 4.750% 12/01/28...... A3 BBB+ 4,965 ---------- 13,000 ---------- DISTRICT OF COLUMBIA -- 0.9% 1,000 District of Columbia, Hospital Revenue Refunding, (Medlantic Healthcare Group Project) Series 1997A, (MBIA Insured), 6.000% 08/15/06...... Aaa AAA 1,085
SEE NOTES TO FINANCIAL STATEMENTS. 106 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- DISTRICT OF COLUMBIA -- (CONTINUED) $ 1,350 District of Columbia, Hospital Revenue Refunding, (Medlantic Healthcare Group Project) Series 1997A, (MBIA Insured), 6.000% 08/15/07...... Aaa AAA $ 1,468 3,050 District of Columbia, Revenue, (Georgetown University Project) Series 1988C, (MBIA Insured), 5.050% 04/01/11...... Aaa AAA 3,113 4,000 District of Columbia, Revenue, (The Smithsonian Institute Project) Series 1997, 5.000% 02/01/17...... Aaa AAA 3,898 1,500 Metropolitan Washington, District of Columbia, Airport Revenue, Series 1994A, AMT, (MBIA Insured), 5.600% 10/01/06...... Aaa AAA 1,574 ---------- 11,138 ---------- FLORIDA -- 5.9% 1,000 Deerfield Beach, Florida, Water and Sewer Revenue Refunding, Series 1992, (FGIC Insured), 6.125% 10/01/03...... Aaa AAA 1,037 2,700 Duval County, Florida, Housing Finance Authority, Multi-Family Housing Revenue Refunding, (United Dominion Realty Trust - Greentree Place Project) Series 1995, Mandatory Put 04/01/15 @ 100, 6.750% 04/01/25...... NR BBB- 2,795 4,490 Duval County, Florida, Housing Finance Authority, Multi-Family Mortgage Revenue Refunding, (The Cove Project) Series 1992, 6.100% 10/01/02...... NR AAA 4,577 4,545 Escambia County, Florida, Housing Finance Authority, Single-Family Mortgage, Revenue, Series 1999, AMT, (FNMA/GNMA COLL), 4.500% 10/01/09...... Aaa NR 4,491
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $ 3,035 Florida State, Board of Education, Public Education Capital Outlay GO, Series 1995A, 5.400% 01/01/06...... Aa2 AA+ $ 3,192 5,575 Florida State, Board of Education, Public Education Capital Outlay GO, Series 1996A, 5.500% 06/01/06...... Aa2 AA+ 5,946 4,000 Florida State, Division of Bond Financing, Department of General Services, Revenue, (Department of Natural Resources - Preservation 2000 Project) Series 1995A, (AMBAC Insured), Prerefunded 07/01/05 @ 101, 5.500% 07/01/06...... Aaa AAA 4,285 7,440 Florida, Housing Finance Agency, Multi-Family Housing Revenue Refunding, (Altamonte Project) Series 1994C, Mandatory Put 12/01/03 @ 100, 7.000% 12/01/24...... NR BBB+ 7,724 2,000 Florida, Housing Finance Agency, Multi-Family Housing Revenue Refunding, (United Dominion Realty Trust - Andover Project) Series 1996E, AMT, Mandatory Put 05/01/08 @ 100, 6.350% 05/01/26...... NR BBB+ 2,085 4,000 Jacksonville, Florida, Electric Authority, Revenue Refunding, (St. John River Project) Series 1993-10, 6.500% 10/01/03...... Aa2 AA 4,205 2,500 Lakeland, Florida, Electrical and Water Revenue, Series 1996, Prerefunded 10/01/06 @ 102, 5.500% 10/01/26...... NR AAA 2,721 2,000 Lee County, Florida, Water and Sewer Revenue, Series 1999A, (AMBAC Insured), 4.750% 10/01/19...... Aaa AAA 1,893
SEE NOTES TO FINANCIAL STATEMENTS. 107 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $ 1,000 Manatee County, Florida, Public Utilities Revenue Refunding, Series 1991B, (MBIA Insured), 6.400% 10/01/03...... Aaa AAA $ 1,023 4,075 North Broward, Florida, Hospital District Revenue Refunding, Series 1997, 5.250% 01/15/11...... Aaa AAA 4,226 2,000 Orange County, Florida, Public Facilities Revenue, Series 1994A, (AMBAC Insured), 5.450% 10/01/05...... Aaa AAA 2,130 3,060 Orlando and Orange County, Florida, Expressway Authority, Revenue Refunding, Senior Lien, Series 1993, (AMBAC Insured), 5.375% 07/01/08...... Aaa AAA 3,211 4,000 Orlando, Florida, Utilities Commission, Water and Electric Revenue Refunding, Series 1992, 5.600% 10/01/03...... Aa1 AA 4,182 1,000 Palm Beach County, Florida, Criminal Justice Facilities Revenue, Series 1994, (FGIC Insured), 5.850% 06/01/07...... Aaa AAA 1,073 5,000 Tampa, Florida, Health Systems Revenue, (Catholic Health East Project) Series 1998A-1, (MBIA Insured), 5.500% 11/15/13...... Aaa AAA 5,300 4,000 Tampa, Florida, Health Systems Revenue, (Catholic Health East Project) Series 1998A-1, (MBIA Insured), 5.500% 11/15/14...... Aaa AAA 4,224 ---------- 70,320 ---------- GEORGIA -- 1.3% 3,000 Cartersville, Georgia, Development Authority, Sewer Facilities Revenue Refunding, (Anheuser- Busch Companies, Inc. Project) Series 1997, AMT, 5.625% 05/01/09...... A1 A+ 3,129
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $ 5,000 Fulton and DeKalb Counties, Georgia, Hospital Authority, GO Refunding Certificates, (Grady Memorial Hospital Project) Series 1993, (MBIA Insured), 5.250% 01/01/04...... Aaa AAA $ 5,179 1,105 Fulton County, Georgia, Development Authority, Revenue, (Clark Atlanta University Project) Series 1995, (CONNIE LEE Insured), 5.100% 01/01/05...... NR AAA 1,152 1,000 Georgia State, GO, Series 1991C, 6.500% 04/01/04...... Aaa AAA 1,068 4,400 Georgia State, GO, Series 1997C, 6.250% 08/01/09...... Aaa AAA 4,935 ---------- 15,463 ---------- HAWAII -- 0.2% 2,500 Honolulu City and County, Hawaii, GO Refunding, Series 1990A, 7.350% 07/01/07...... Aa3 AA- 2,857 ---------- ILLINOIS -- 9.6% 2,370 Chicago, Illinois, Board of Education GO, Series 1997, (AMBAC Insured), 5.250% 12/01/05...... Aaa AAA 2,497 2,500 Chicago, Illinois, Gas Supply Revenue, (Peoples Gas Light and Coke Project) Series 1985A, 6.875% 03/01/15...... Aa3 AA- 2,559 5,650 Chicago, Illinois, GO Refunding, Series 1999, (FGIC Insured), 5.000% 01/01/15...... Aaa AAA 5,613 7,105 Chicago, Illinois, GO Refunding, Series 1999, (FGIC Insured), 5.250% 01/01/18...... Aaa AAA 7,242 10,000 Chicago, Illinois, GO Refunding, Series 1999A, (FGIC Insured), 5.000% 01/01/08...... Aaa AAA 10,348
SEE NOTES TO FINANCIAL STATEMENTS. 108 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- ILLINOIS -- (CONTINUED) $ 5,000 Chicago, Illinois, Housing Authority, Capital Program Revenue, Series 2001, 5.375% 07/01/13...... Aa3 AA $ 5,137 3,750 Chicago, Illinois, Metropolitan Water Reclamation District, Greater Chicago Capital Improvement GO, Series 1993, 5.000% 12/01/02...... Aa1 AA+ 3,826 10,200 Chicago, Illinois, Park District, GO, Series 1995, 6.600% 11/15/14...... Aa3 AA 11,299 2,000 Chicago, Illinois, School Finance Authority, GO, Series 1994A, (MBIA Insured), 4.800% 06/01/04...... Aaa AAA 2,067 1,160 Chicago, Illinois, School Finance Authority, GO, Series 1994A, (MBIA Insured), 4.900% 06/01/05...... Aaa AAA 1,203 2,000 Chicago, Illinois, Water Revenue Refunding, Series 1992, (AMBAC Insured), 5.600% 11/01/04...... Aaa AAA 2,078 4,000 Chicago, Illinois, Water Revenue, Series 1992, (AMBAC Insured), 5.400% 11/01/02...... Aaa AAA 4,079 2,000 Cook County, Illinois, Community College District Number 508, Certificates of Participation, Series 1990, (FGIC Insured), 8.750% 01/01/07...... Aaa AAA 2,383 1,145 Du Page County, Illinois, School District, GO, Series 1997, (FGIC Insured), 6.750% 02/01/11...... Aaa NR 1,319 4,000 Illinois State, GO, Series 1994, 5.500% 08/01/03...... Aa2 AA 4,152 3,000 Illinois State, GO, Series 1994, (MBIA Insured), 5.500% 08/01/04...... Aaa AAA 3,159 6,850 Illinois State, GO, Series 2000, 5.750% 06/01/15...... Aaa AAA 7,271
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- ILLINOIS -- (CONTINUED) $12,500 Illinois State, Sales Tax Revenue Refunding, Series 1993S, 6.000% 06/15/03...... Aa2 AAA $ 13,020 4,000 Illinois State, Sales Tax Revenue, Series 1994, 5.625% 06/15/02...... Aa2 AAA 4,032 4,160 Illinois, Development Financial Authority, Solid Waste Disposal Revenue, (Waste Management Inc. Project) Series 1997, AMT, 5.050% 01/01/10...... NR BBB 4,002 1,000 Illinois, Health Facilities Authority, Revenue Refunding, (Lutheran General Health Systems Project) Series 1993C, 5.250% 04/01/02...... A1 A+ 1,000 6,320 Illinois, Health Facilities Authority, Revenue, (Highland Park Hospital Project) Series 1991B, (FGIC Insured), Prerefunded 10/01/07 @ 102, 5.900% 10/01/12...... Aaa AAA 6,962 2,400 Illinois, Metropolitan Pier and Exposition Authority, Revenue, Series 1992, (MBIA-IBC Insured), 6.500% 06/01/05...... Aaa AAA 2,602 1,580 Illinois, Metropolitan Pier and Exposition Authority, Revenue, Series 1996A, (AMBAC Insured), 6.000% 12/15/06...... Aaa AAA 1,717 530 Lansing, Illinois, Sales Tax Increment Revenue Refunding, (Landings Redevelopment Project) Series 1992, 6.500% 12/01/02...... NR BBB 542 3,300 Regional Transportation Authority of Illinois, Revenue, Series 1994A, (AMBAC Insured), 5.800% 06/01/05...... Aaa AAA 3,510 ---------- 113,619 ----------
SEE NOTES TO FINANCIAL STATEMENTS. 109 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- INDIANA -- 1.7% $ 6,000 Indiana State, Development Finance Authority, PCR Refunding, (Southern Indiana Gas and Electric Project) Series 1998C, AMT, Mandatory Put 03/01/06 @ 100, 5.000% 03/01/30...... A2 BBB+ $ 6,065 1,040 Indiana, Health Facilities Financing Authority, Hospital Revenue Refunding, (Methodist Hospital of Indiana, Inc. Project) Series 1992, 6.500% 09/15/02...... A1 NR 1,062 4,390 Indiana, Health Facilities Financing Authority, Hospital Revenue, (Clarian Health Partners, Inc. Project) Series 1996A, 5.000% 02/15/04...... Aa3 AA 4,501 2,880 Indiana, Health Facilities Financing Authority, Hospital Revenue, (Methodist Hospital of Indiana, Inc. Project) Series 1992A, (Escrowed to Maturity), 5.750% 09/01/15...... NR AA- 3,136 3,000 Indiana, Municipal Power Agency, Power Supply Systems Revenue Refunding, Series 1993B, (MBIA Insured), 5.375% 01/01/03...... Aaa AAA 3,073 2,500 Indianapolis, Indiana, Airport Authority, Special Facilities Revenue, (Federal Express Corporation Project) Series 1994, AMT, 7.100% 01/15/17...... Baa2 BBB 2,631 ---------- 20,468 ---------- IOWA -- 0.8% 9,650 Iowa, Student Loan Liquidity Corporation, Student Loan Revenue Refunding, Series 1998J, AMT, (AMBAC Insured), 4.800% 06/01/09...... Aaa AAA 9,708 ----------
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- KANSAS -- 1.8% $ 5,000 Kansas State, Department of Transportation, Highway Revenue, Series 1992, 7.250% 03/01/05...... Aa2 AA+ $ 5,511 5,000 Kansas State, Development Finance Authority, Revenue, (Board of Regents - Rehabilitation Project) Series 1997G-2, (AMBAC Insured), 5.500% 10/01/06...... Aaa AAA 5,343 4,500 Kansas State, Development Finance Authority, Revenue, Series 1998A, 4.800% 06/01/13...... NR A- 4,507 2,175 Labette County, Kansas, Single-Family Mortgage Revenue, Zero Coupon Capital Accumulator Bonds, Series 1982, (Escrowed to Maturity), 5.153%& 12/01/14..... Aaa A- 1,142 5,000 Wichita, Kansas, Hospital Revenue Refunding, Series 2001-III, 6.250% 11/15/18...... NR A+ 5,294 ---------- 21,797 ---------- LOUISIANA -- 0.5% 4,000 Plaquemines, Louisiana, Port Harbor and Terminal District Marine, Terminal Facility Revenue Refunding, Series 2001, 5.000% 09/01/07...... A3 A- 3,989 2,080 St. Charles Parish, Louisiana, PCR Refunding, (Union Carbide Corporation Project) Series 1999, 5.100% 01/01/12...... A2 A 2,068 ---------- 6,057 ---------- MARYLAND -- 2.0% 1,500 Baltimore, Maryland, Port Facilities Revenue, (E.I. duPont de Nemours and Company Project) Series 1985, 6.500% 12/01/10...... Aa3 AA- 1,556 4,890 Maryland State, GO Refunding, Series 1991-3, 6.250% 07/15/02...... Aaa AAA 4,908 10,925 Maryland State, Transportation Department, Series 2002 5.500% 02/01/10...... Aa2 AA 11,759
SEE NOTES TO FINANCIAL STATEMENTS. 110 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $ 35 Prince Georges County, Maryland, Solid Waste Management System Revenue, Series 1993, (FSA Insured), Prerefunded 06/15/03 @ 102, 5.200% 06/15/06...... Aaa AAA $ 37 3,465 Prince Georges County, Maryland, Solid Waste Management System Revenue, Unrefunded Balance, Series 1993, 5.200% 06/15/06...... Aaa AAA 3,590 2,500 Washington County, Maryland, Suburban Sanitation District Authority, Water Supply GO Refunding, Series 1993, 4.900% 12/01/05...... Aaa AAA 2,607 ---------- 24,457 ---------- MASSACHUSETTS -- 3.6% 5,000 Massachusetts State, GO Refunding, Series 1993C, 5.000% 08/01/07...... Aa2 AA- 5,117 11,840 Massachusetts State, GO Refunding, Series 1993C, (AMBAC Insured), 4.950% 08/01/05...... Aaa AAA 12,339 4,000 Massachusetts State, GO Refunding, Series 1996A, 5.000% 11/01/09...... Aa2 AA- 4,158 1,000 Massachusetts State, Industrial Financing Agency, Revenue, (Babson College Issue Project) Series 1998A, (MBIA Insured), 5.000% 10/01/18...... Aaa AAA 980 6,000 Massachusetts State, Water Resources Authority, General Revenue Refunding, Series 1993B, 5.125% 03/01/04...... Aa3 AA 6,226 3,655 Massachusetts, Educational Financing Authority, Educational Loan Revenue Refunding, Series 1999A, AMT, (AMBAC Insured), 4.750% 07/01/11...... Aaa AAA 3,604
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MASSACHUSETTS -- (CONTINUED) $ 3,490 Massachusetts, Educational Financing Authority, Educational Revenue, Series 1998C, AMT, (MBIA Insured), 4.600% 12/01/08...... Aaa AAA $ 3,498 3,100 Massachusetts, Educational Financing Authority, Educational Revenue, Series 1998C, AMT, (MBIA Insured), 4.700% 12/01/09...... Aaa AAA 3,090 2,000 Massachusetts, University of Lowell Building Authority, Revenue, Series 1995A, (AMBAC Insured), 5.700% 11/01/09...... Aaa AAA 2,165 2,000 New England Education Loan Marketing Company of Massachusetts, Student Loan Revenue Refunding, Series 1993A, AMT, 5.700% 07/01/05...... Aa2 AA 2,112 ---------- 43,289 ---------- MICHIGAN -- 2.5% 7,500 Detroit, Michigan, Convention Facilities, Revenue Refunding, (Cobo Hall Expansion Project) Series 1993, (FSA Insured), 5.100% 09/30/04...... Aaa AAA 7,849 2,000 Detroit, Michigan, GO Refunding, Series 1995B, 7.000% 04/01/04...... Baa1 A- 2,142 5,000 Michigan State, Hospital Finance Authority, Revenue, (Ascension Health Credit Project) Series 1999A, 5.750% 11/15/18...... Aaa AAA 5,074 7,000 Michigan State, Hospital Finance Authority, Revenue, (Ascension Health Credit Project) Series 1999B, Mandatory Put 11/15/04 @ 100, 5.050% 11/15/33...... Aa2 AA 7,198
SEE NOTES TO FINANCIAL STATEMENTS. 111 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MICHIGAN -- (CONTINUED) $ 4,000 Michigan State, Hospital Finance Authority, Revenue, (Ascension Health Credit Project) Series 1999B, Mandatory Put 11/15/05 @ 100, 5.200% 11/15/33...... Aa2 AA $ 4,116 3,195 Royal Oak, Michigan, Hospital Financing Authority, Hospital Revenue, (William Beaumont Hospital Project) Series 1997, 5.025%& 11/15/07..... Aa3 A- 2,417 2,000 Royal Oak, Michigan, Hospital Financing Authority, Hospital Revenue, (William Beaumont Hospital Project) Series 1997K, 4.696%& 11/15/06..... Aa3 AA- 1,614 ---------- 30,410 ---------- MINNESOTA -- 1.5% 6,285 Minneapolis and St. Paul, Minnesota, MetroAirport Community Airport Revenue, Series 2001D, AMT, (FGIC Insured), 5.750% 01/01/13...... Aaa AAA 6,588 5,000 Minnesota State, GO, Series 1994, Prerefunded 10/01/04 @ 100, 5.600% 10/01/05...... Aaa AAA 5,306 2,150 Southern Minnesota Municipal Power Agency, Power Supply Systems Revenue, Refunded Balance, Series 1992B, 5.800% 01/01/07...... Aaa AAA 2,219 3,850 Southern Minnesota Municipal Power Agency, Power Supply Systems Revenue, Unrefunded Balance, Series 1992B, 5.800% 01/01/07...... A2 A+ 3,967 ---------- 18,080 ---------- MISSISSIPPI -- 1.1% 3,000 Adams County, Mississippi, PCR, (International Paper Company Project) Series 1994A, 5.500% 12/01/05...... Baa2 BBB 3,097
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MISSISSIPPI -- (CONTINUED) $ 7,000 Mississippi State, GO Refunding, Series 2000, 5.000% 12/01/08...... Aa3 AA $ 7,323 2,370 Mississippi, Higher Education Authority, Revenue, Series 1992C, AMT, (GTD STD LNS), 6.400% 01/01/03...... NR A 2,431 ---------- 12,851 ---------- MISSOURI -- 0.6% 1,590 Kansas City, Missouri, Water Revenue, Series 1994, 5.900% 12/01/05...... Aa3 AA 1,685 2,980 Missouri State, Environmental Improvement and Energy Resource Authority, PCR Refunding, (Associated Electrical Cooperation - Thomas Hill Project ) Series 1996, 5.500% 12/01/05...... A1 AA 3,150 2,000 Missouri State, Health and Educational Facilities Authority, Health Facilities Revenue, (BJC Health Systems Project) Series 1994A, 5.900% 05/15/04...... Aa3 NR 2,116 ---------- 6,951 ---------- MONTANA -- 0.6% 6,000 Forsyth, Montana, PCR Refunding, (Portland General Electric Company Project) Series 1998A, Mandatory Put 05/01/03 @ 100, 4.600% 05/01/33...... Baa1 BBB 5,783 4,475 Lewis and Clark County, Montana, Environmental Facilities Revenue, (Asarco, Inc. Project) Series 1998, AMT, 5.850% 10/01/33...... Ca CCC 1,308 ---------- 7,091 ---------- NEBRASKA -- 0.1% 1,000 Lincoln, Nebraska, Electric Systems Revenue Refunding, Series 1993A, 5.000% 09/01/06...... Aa2 AA 1,034 ----------
SEE NOTES TO FINANCIAL STATEMENTS. 112 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NEVADA -- 1.5% $ 1,000 Clark County, Nevada, GO Refunding, Series 1991, (MBIA Insured), Prerefunded 04/01/02 @ 101, 6.200% 10/01/03...... Aaa AAA $ 1,010 6,175 Clark County, Nevada, School District, GO Refunding, Series 1993B, (FGIC Insured), 5.375% 05/01/05...... Aaa AAA 6,404 1,000 Clark County, Nevada, School District, GO, Series 1991A, (MBIA Insured), 6.500% 06/01/02...... Aaa AAA 1,008 1,255 Nevada State, GO, Series 1995A, 5.200% 11/01/08...... Aa2 AA 1,304 6,570 Nevada State, GO, Series 1998A, 5.250% 05/15/16...... Aa2 AA 6,649 1,000 Nevada State, Municipal Board, GO, (Bank Project Number 28-31) Series 1989C, 7.000% 01/01/03...... Aaa AAA 1,033 ---------- 17,408 ---------- NEW JERSEY -- 2.2% 4,000 Bergen County, New Jersey, Utilities Authority, Water PCR, Series 1992B, (FGIC Insured), 5.500% 12/15/02...... Aaa AAA 4,100 3,340 New Jersey State Housing and Mortgage Finance Agency, Revenue, (Home Buyer Project) Series 1999, AMT, 5.300% 04/01/08...... Aaa AAA 3,454 3,440 New Jersey State Housing and Mortgage Finance Agency, Revenue, (Home Buyer Project) Series 1999, AMT, 5.400% 04/01/09...... Aaa AAA 3,561 5,000 New Jersey State, GO Refunding, Series 1992D, 5.500% 02/15/04...... Aa2 AA+ 5,237
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NEW JERSEY -- (CONTINUED) $10,000 New Jersey State, Transportation Trust Fund Authority, Transportation Systems Revenue, Series 1997A, 5.000% 06/15/14...... Aa3 AA $ 10,127 ---------- 26,479 ---------- NEW MEXICO -- 2.4% 3,000 Bernalillo County, New Mexico, Gross Receipts Tax Revenue Refunding, Series 1998, 5.250% 04/01/27...... Aa3 AA 2,989 9,500 Lordburg, New Mexico, PCR Refunding, (Phelps Dodge Corporation Project) Series 1993, 6.500% 04/01/13...... Baa3 BBB- 9,253 6,000 New Mexico State, Highway Community Tax Revenue, Series 2000A, 6.000% 06/15/10...... Aa2 AA+ 6,651 4,000 New Mexico, Mortgage Finance Authority, Single Family Mortgage Revenue, Series 2001B-2, AMT, (GNMA/FNMA/FHLMC COLL), 6.200% 09/01/32...... NR AAA 4,167 2,850 New Mexico, Mortgage Finance Authority, Single Family Mortgage Revenue, Series 2002B-2, AMT, (GNMA/FNMA/FHLMC COLL), 3.500% 03/01/33...... NR AAA 3,054 1,190 New Mexico, Mortgage Finance Authority, Single-Family Mortgage Revenue, Series 1997C-2, AMT, (GNMA/FNMA/FHLMC COLL), 5.950% 07/01/17...... Aaa NR 1,216 1,845 New Mexico, Mortgage Finance Authority, Single-Family Mortgage Revenue, Series 1997E-2, AMT, (GNMA/FNMA/FHLMC COLL), 5.600% 07/01/17...... NR AAA 1,853 ---------- 29,183 ----------
SEE NOTES TO FINANCIAL STATEMENTS. 113 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NEW YORK -- 3.3% $ 8,500 Dutchess County, New York, Industrial Development Agency, Industrial Development Revenue, (IBM Project) Series 1999, AMT, Mandatory Put 12/01/09 @ 100, 5.450% 12/01/29...... A1 A+ $ 8,817 5,000 New York State, Dormitory Authority, Revenue, (City University Project) Series 1993B, 5.250% 07/01/06...... A3 AA- 5,284 7,000 New York State, Dormitory Authority, State University Educational Facilities Revenue, Series 1993A, 5.400% 05/15/04...... A3 AA- 7,341 2,260 New York, New York, GO, Series 1993E, (MBIA-IBC Insured), Prerefunded 05/15/03 @ 101.5, 5.800% 05/15/05...... Aaa AAA 2,382 855 New York, New York, GO, Series 1995D, Prerefunded 02/15/05 @ 101, 5.750% 02/15/07...... Aaa A 925 3,500 New York, New York, GO, Series 1997, (MBIA Insured), 6.250% 04/15/07...... Aaa AAA 3,845 7,645 New York, New York, GO, Unrefunded Balance, Series 1995D, 5.750% 02/15/07...... A2 A 8,015 3,000 Niagara County, New York, Individual Development Agency, Solid Waste Disposal, Revenue, Series 2001B, AMT, Mandatory Put 11/15/13 @ 100, 5.550% 11/15/24...... Baa1 BBB 3,048 ---------- 39,657 ---------- NORTH CAROLINA -- 2.3% 4,300 Cary, North Carolina, Water and Public Improvement, GO, Series 2001, 5.000% 03/01/13...... Aaa AAA 4,431
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $ 3,000 Charlotte, North Carolina, Airport Revenue, Series 1999B, AMT, (MBIA Insured), 6.000% 07/01/24...... Aaa AAA $ 3,123 2,000 Cumberland County, North Carolina, GO, Series 1998, (FGIC Insured), 5.000% 03/01/17...... Aaa AAA 1,992 1,895 North Carolina, Housing Finance Agency, (Single-Family Program) Series 1997RR, AMT, (FHA Insured), 5.850% 09/01/28...... Aa2 AA 1,915 4,000 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Carolina Medicorp, Inc. Project) Series 1996, 5.125% 05/01/16...... A1 AA- 3,915 3,135 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Pitt County Memorial Hospital Project) Series 1998A, 4.400% 12/01/08...... Aa3 AA- 3,117 3,000 North Carolina, Medical Care Commission, Hospital Revenue, (Pitt County Memorial Hospital Project) Series 1998B, 5.000% 12/01/18...... Aa3 AA- 2,863 5,000 North Carolina, Medical Care Community Hospital Revenue, (Duke University Hospital Project) Series 1996C, (MBIA-IBC Insured), 5.250% 06/01/26...... Aaa AAA 4,892 1,200 Winston-Salem, North Carolina, Water and Sewer Systems Revenue Refunding, Series 1997, 4.600% 06/01/11...... Aa2 AAA 1,208 ---------- 27,456 ---------- OHIO -- 2.2% 2,000 Akron/Bath/Copley, Ohio, Joint Township Hospital District, Revenue, (Summa Health Systems Project) Series 1993A, 5.750% 11/15/08...... Baa1 NR 2,046
SEE NOTES TO FINANCIAL STATEMENTS. 114 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- OHIO -- (CONTINUED) $ 6,135 Lorain County, Ohio, Hospital Revenue Refunding, (Catholic Healthcare Project) Series 2001A, 5.625% 10/01/14...... A1 AA- $ 6,294 6,060 Montgomery County, Ohio, Hospital Revenue, (Kettering Medical Center Project) Series 1999, 6.500% 04/01/13...... Baa1 BBB+ 6,422 5,000 Ohio State, Common Schools, GO, Series 2001A, 5.000% 06/15/12...... Aa1 AA+ 5,152 2,500 Ohio State, Public Facilities Commission, Revenue, (Higher Education Capital Facilities Project) Series 1995A-II, (AMBAC Insured), 5.200% 05/01/05...... Aaa AAA 2,621 1,620 Ohio, Housing Finance Agency, Mortgage Revenue, (Residential Project) Series 1998B-2, AMT, (GNMA COLL), 4.800% 09/01/07...... Aaa NR 1,639 2,500 Scioto County, Ohio, Marine Terminal Revenue Refunding, (Norfolk Southern Corporation Project) Series 1998, 5.300% 08/15/13...... Baa1 BBB 2,457 ---------- 26,631 ---------- OKLAHOMA -- 0.7% 4,670 Oklahoma City, Oklahoma, Airport Trust Revenue, Series 2000B, AMT, (FSA Insured), 5.375% 07/01/11...... Aaa AAA 4,784 5,000 Oklahoma, Development Finance Authority, Revenue Refunding, (Hillcrest Healthcare Center Inc. Project) Series 1999A, 5.625% 08/15/19...... B2 B- 3,767 ---------- 8,551 ---------- OREGON -- 1.8% 6,000 Multnomah County, Oregon, School District Number 1J - Portland, GO, Series 1996, 5.500% 06/01/05...... Aa3 A+ 6,355
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- OREGON -- (CONTINUED) $10,000 Oregon State, Department Administrative Services, Certificates of Participation, Series 2002C, (MBIA Insured), 5.250% 11/01/10...... Aaa AAA $ 10,544 4,300 Portland, Oregon, Sewer Systems Revenue, Series 1994A, 5.450% 06/01/03...... A1 A+ 4,451 ---------- 21,350 ---------- PENNSYLVANIA -- 2.5% 5,000 Allegheny County, Pennsylvania, Airport Revenue Refunding, (Pittsburgh International Airport Project) Series 1997A-1, AMT, (MBIA Insured), 5.750% 01/01/08...... Aaa AAA 5,285 2,600 Delaware County, Pennsylvania Authority, Health Care Revenue, Series 1993B, Prerefunded 11/15/05 @ 100, 6.000% 11/15/07...... Aaa NR 2,790 10,000 Pennsylvania State, GO, Series 2001, 5.125% 01/15/16...... Aa2 AA 10,112 9,180 Pennsylvania, Housing Finance Agency, Single-Family Mortgage Revenue, Series 1997A-61, AMT, 5.450% 10/01/21...... Aa2 AA+ 9,018 2,500 Philadelphia, Pennsylvania, Industrial Development Authority, IDR Refunding, (Ashland Oil Inc. Project) Series 1993, 5.700% 06/01/05...... Baa2 NR 2,610 ---------- 29,815 ---------- RHODE ISLAND -- 0.0%+ 55 Rhode Island State, GO, Series 1992A, 5.400% 08/01/06...... Aa3 AA- 56 ---------- SOUTH CAROLINA -- 2.5% 2,195 Cherokee County, South Carolina, School District Number 001, GO, Series 1997, (SCSDE), 5.500% 03/01/06...... Aa1 AA+ 2,337
SEE NOTES TO FINANCIAL STATEMENTS. 115 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $ 3,600 Cherokee County, South Carolina, School District Number 001, GO, Series 1997, (SCSDE), 5.000% 03/01/16...... Aa1 AA+ $ 3,596 3,210 Greenville Hospital Systems of South Carolina, Hospital Facilities Revenue, Series 1996B, (GTY-AGMT), 5.500% 05/01/08...... Aa3 AA 3,362 5,160 Piedmont Municipal Power Agency, South Carolina, Electric Revenue, Series 1996B, (FGIC Insured), 6.000% 01/01/07...... Aaa AAA 5,552 2,580 Piedmont Municipal Power Agency, South Carolina, Electric Revenue, Unrefunded Balance, Series 1991A, (FGIC Insured), 6.125% 01/01/03...... Aaa AAA 2,640 3,665 Richland County, South Carolina, Solid Waste Disposal Facilities Revenue, (Union Camp Corporation Project) Series 1992A, AMT, 6.750% 05/01/22...... Baa2 BBB 3,746 8,890 York County, South Carolina, Exempt Facilities IDR, (Hoechst Celanese Corporation Project) Series 1994, AMT, 5.700% 01/01/24...... Baa2 BBB 8,282 ---------- 29,515 ---------- SOUTH DAKOTA -- 0.9% 11,000 Education Loans Inc., South Dakota, Student Loan Revenue, Series 1998, AMT, (GTD STD LNS), 4.950% 06/01/10...... Aaa NR 11,117 ---------- TENNESSEE -- 3.8% 5,000 Knox County, Tennessee, GO Refunding, Series 2001, 5.000% 04/01/09...... Aa2 AA 5,185
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TENNESSEE -- (CONTINUED) $ 5,000 Knox County, Tennessee, Health Educational and Housing Facilities Board, Revenue, (University Health System Inc. Project) Series 1999, 5.625% 04/01/29...... Baa1 NR $ 4,757 6,270 McMinn County, Tennessee, Industrial Development Board, Recycling Facilities Revenue, (Bowater Inc. Project) Series 1992, AMT, 7.400% 12/01/22...... Baa3 BBB 6,483 1,000 Memphis, Tennesse, Electric System Revenue Refunding, Series 1992, 5.800% 01/01/03...... Aa3 AA 1,028 5,000 Memphis-Shelby County, Tennessee, Airport Authority, Special Facilities Revenue Refunding, (Federal Express Corporation Project) Series 2001, 5.000% 09/01/09...... Baa2 BBB 5,028 1,925 Metropolitan Government, Nashville and Davidson County, Tennessee, Electric Revenue, Series 1992B, 5.625% 05/15/03...... Aa3 AA 1,972 1,000 Metropolitan Government, Nashville and Davidson County, Tennessee, Health and Educational Facilities Board, Improvement Revenue Refunding, (Meharry Medical College Project) Series 1996, (AMBAC Insured), 6.000% 12/01/08...... Aaa AAA 1,096 6,450 Shelby County, Tennessee, GO Refunding, Series 1997B, 5.500% 08/01/08...... Aa3 AA+ 6,908 8,000 Shelby County, Tennessee, Health Educational and Housing Facilities Board, Revenue, (St. Jude's Childrens Research Project) Series 1999, 5.375% 07/01/24...... NR AA 7,752
SEE NOTES TO FINANCIAL STATEMENTS. 116 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TENNESSEE -- (CONTINUED) $ 1,190 Tennessee State, Housing Development Agency, Revenue, Series 1998, AMT, 4.950% 07/01/10...... Aa2 AA $ 1,183 4,000 Tennessee, Gas Revenue, (Tennergy Corporation Project) Series 1999, (MBIA Insured), 5.000% 06/01/05...... Aaa AAA 4,159 ---------- 45,551 ---------- TEXAS -- 13.5% 2,175 Aldine, Texas, Independent School District, GO Refunding, Series 1997, (PSF-GTD), 4.408%& 02/15/07..... Aaa AAA 1,759 2,555 Austin, Texas, Utilities Systems Revenue, Series 1977-2, (Escrowed to Maturity), 5.600% 10/01/03...... Aaa AAA 2,666 2,585 Belton, Texas, Independent School District, GO Refunding, Series 1998, (PSF-GTD), 5.250% 08/15/08...... Aaa AAA 2,724 975 Brazos, Texas, Higher Education Authority Inc., Revenue Refunding, Senior Lien, Series 1994A-2, AMT, (GTD STD LNS), 6.050% 06/01/03...... Aaa NR 981 2,575 Carrollton, Texas, Farmers Branch Independent School District, GO, Series 1996, (PSF-GTD), Prerefunded 02/15/06 @ 100, 5.700% 02/15/17...... Aaa AAA 2,753 2,190 Fort Worth, Texas, Higher Education Financial Corporation, Higher Education Revenue, (Texas Christian University Project) Series 1997, 5.000% 03/15/17...... Aa3 AA- 2,134 1,050 Galena Park, Texas, Independent School District, GO, Series 1997, (PSF-GTD), 5.000% 08/15/21...... Aaa NR 1,005
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 3,120 Garland, Texas, Certificates of Obligation, GO, Series 2000, 5.500% 02/15/12...... Aa2 AA $ 3,265 10,650 Guadalupe Blanco River Authority, Texas, Sewer and Solid Waste Disposal Facility, Revenue, (E.I. duPont de Nemours and Company Project) Series 1999, AMT, 5.500% 05/01/29...... Aa3 AA- 10,188 2,730 Harris County, Texas, GO, Series 1996, 5.150% 10/01/07...... Aa1 AA+ 2,841 1,000 Harris County, Texas, GO, Series 1996, 5.375% 10/01/09...... Aa1 AA+ 1,040 10,990 Harris County, Texas, GO, Series 2001, 5.000% 10/01/12...... Aa1 AA+ 11,257 2,350 Harris County, Texas, Health Facilities Development Authority, Hospital Revenue Refunding, (Texas Childrens Hospital Project) Series 1995, (MBIA Insured, Escrowed to Maturity), 6.000% 10/01/05...... Aaa AAA 2,541 5,000 Harris County, Texas, Health Facilities Development Authority, Revenue, Series 1999A, (MBIA Insured), 5.375% 07/01/19...... Aaa AAA 4,817 5,790 Harris County, Texas, Health Facility Development Corporation, Revenue, Series 1999A, (MBIA Insured), 5.625% 07/01/11...... Aaa AAA 5,996 7,000 Houston, Texas, Airport System Revenue, Sub- Lien, Series 1998B, AMT, (FGIC Insured), 5.250% 07/01/12...... Aaa AAA 7,054 6,755 Houston, Texas, Airport System Revenue, Sub- Lien, Series 2000A, AMT, (FSA Insured), 6.000% 07/01/09...... Aaa AAA 7,229 7,320 Houston, Texas, GO, Series 2001A, (FSA Insured), 5.500% 03/01/10...... Aaa AAA 7,793
SEE NOTES TO FINANCIAL STATEMENTS. 117 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 7,000 Houston, Texas, Water and Sewer Systems Revenue Refunding, Junior Lien, Series 1997D, (FGIC Insured), 5.000% 12/01/25...... Aaa AAA $ 6,539 6,215 Houston, Texas, Water Systems Revenue, Series 1979, 6.400% 12/01/14...... Aaa AAA 6,859 4,000 Jefferson County, Texas, Health Facilities Development Corporation Revenue, (Baptist Hospitals Project) Series 2001, (AMBAC Insured), 5.200% 08/15/21...... Aaa AAA 3,876 1,000 Lewisville, Texas, Independent School District, GO, Series 1997, (PSF-GTD), 6.750% 08/15/08...... Aaa NR 1,134 5,210 North Central Texas, Health Facilities Development Corporation, Revenue Refunding, (Baylor Healthcare Systems Project) Series 1995, (AMBAC - TCRS Insured), 5.500% 05/15/13...... Aaa AAA 5,343 5,000 North Central, Texas, Health Facilities Development Corporation, Health Facilities Revenue, (Presbyterian Healthcare Residential Project) Series 1996B, (MBIA Insured), 5.500% 06/01/16...... Aaa AAA 5,319 6,000 Red River Authority, Texas, PCR Refunding, Series 1991, (AMBAC Insured), 5.200% 07/01/11...... Aaa NR 6,196 2,110 Richardson, Texas, GO Refunding, Series 1998, 5.250% 02/15/07...... Aa1 AA+ 2,217
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 4,805 Tarrant County, Texas, Health Facilities Development Corporation, Health Systems Revenue, (Texas Health Resources Systems Project) Series 1997A, (MBIA Insured), 5.750% 02/15/10...... Aaa AAA $ 5,008 5,000 Tarrant County, Texas, Health Facilities Development Corporation, Health Systems Revenue, (Texas Health Resources Systems Project) Series 1997A, (MBIA Insured), 5.250% 02/15/17...... Aaa AAA 4,924 3,200 Texas A&M University, Financing Systems Revenue, Series 1995, 5.950% 05/15/05...... Aa1 AA+ 3,421 3,000 Texas State, GO Refunding, Series 1992A, 5.700% 10/01/03...... Aa1 AA 3,136 5,000 Texas State, Turnpike Authority, Dallas North Tollway Revenue, (President George Bush Turnpike Project) Series 1995, (FGIC Insured), 5.000% 01/01/25...... Aaa AAA 4,677 1,000 Texas State, Veterans Housing Assistance, GO, Series 1994B-4, AMT, 6.100% 12/01/06...... Aa1 AA 1,030 10,910 Texas State, Water Development GO, Series 1997D, 5.000% 08/01/19...... Aa1 AA 10,541 4,790 Texas, Municipal Power Agency, Revenue, Refunded Balance, Series 1992, (MBIA Insured), Prerefunded 09/01/02 @ 100, 5.750% 09/01/12...... Aaa AAA 4,870
SEE NOTES TO FINANCIAL STATEMENTS. 118 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 2,000 Texas, Southwest Higher Education Authority Inc., Higher Education Revenue Refunding, (Southern Methodist University Project) Series 1995, (FSA Insured), 5.125% 10/01/16...... Aaa AAA $ 1,991 4,500 Travis County, Texas, Health Facilities Development Corporation, Revenue, (Ascension Health Credit Project) Series 1999A, (AMBAC Insured), 5.875% 11/15/24...... Aaa AAA 4,602 ---------- 159,726 ---------- UTAH -- 1.5% 2,145 Cache County, Utah, School District, (Utah School Board Guaranty Program) GO Refunding, Series 1997, (SCH BD GTY), 5.500% 06/15/07...... NR AAA 2,287 1,000 Jordan, Utah, School District, GO Refunding, Series 1993, 5.600% 06/15/02...... Aa1 NR 1,008 8,000 Tooele County, Utah, Hazardous Waste Treatment Revenue, (Union Pacific Project) Series 1992, AMT, 5.700% 11/01/26...... Baa3 BBB- 7,403 2,500 Utah State, Student Loan Revenue, Series 1995N, AMT, (AMBAC Insured, GTD STD LNS), 5.900% 11/01/07...... Aaa AAA 2,661 5,000 Utah, Intermountain Power Agency, Power Supply Revenue Refunding, Series 1993C, 5.000% 07/01/05...... A1 A+ 5,166 ---------- 18,525 ----------
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- 3.4% $ 4,680 Charles City County, Virginia, Industrial Development Authority, Solid Waste Disposal Facility Revenue Refunding, (Waste Management Virginia Incorporated Project) Series 1999, AMT, 4.875% 02/01/09...... NR BBB $ 4,512 6,170 Chesapeake, Virginia, GO Refunding, Series 1993, 5.000% 12/01/03...... Aa2 AA 6,424 975 Chesterfield County, Virginia, Improvement GO Refunding, Series 1991, 6.250% 07/15/05...... Aaa AAA 1,004 6,000 Covington-Allegheny County, Virginia, Industrial Development Authority, PCR Refunding, (Westvaco Corporation Project) Series 1994, 5.900% 03/01/05...... Baa2 BBB 6,315 2,500 Newport News, Virginia, GO Refunding, Series 1993B, (State Aid Withholding), 5.400% 11/01/06...... Aa2 AA 2,611 3,000 Virginia Beach, Virginia, GO Refunding, Series 1993, 5.100% 07/15/05...... Aa1 AA+ 3,157 1,100 Virginia State, Higher Educational Institutions, GO, Series 1992C, Prerefunded 06/01/02 @ 100, 5.900% 06/01/05...... Aaa AAA 1,108 1,500 Virginia State, Public Facilities GO, Series 1993A, 5.400% 06/01/05...... Aaa AAA 1,563 7,000 Virginia State, Public School Authority, Revenue Refunding, Series 1993B, (State Aid Withholding), 5.250% 01/01/07...... Aa1 AA 7,279 2,600 Virginia, College Building Authority, Educational Facilities Revenue Refunding, (University of Richmond Project) Series 1992, 5.625% 11/01/02...... Aa1 AA 2,621
SEE NOTES TO FINANCIAL STATEMENTS. 119 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $ 7,300 Virginia, Pocahontas Parkway Association Toll Road, Revenue, Series 1998B, 9.266%& 08/15/15..... Baa3 BBB- $ 2,174 9,100 Virginia, Pocahontas Parkway Association Toll Road, Revenue, Series 1998B, 9.265%& 08/15/19..... Baa3 BBB- 1,887 ---------- 40,655 ---------- WASHINGTON -- 5.6% 1,610 Clark County, Washington, Sewer Revenue, Series 1996, (MBIA Insured), 5.500% 12/01/04...... Aaa AAA 1,703 2,500 King County, Washington, GO Refunding, Series 1993C, 5.625% 06/01/02...... Aaa AA+ 2,516 1,000 King County, Washington, GO Refunding, Series 1998B, 4.750% 01/01/17...... Aa1 AA+ 945 1,310 King County, Washington, School District Number 415, GO, (FSA Insured), 5.200% 06/01/05...... Aaa AAA 1,372 2,500 Northwest, Washington, Revenue, (Energy Wind Project), Series 2001B, 6.000% 07/01/23...... Baa1 NR 2,398 5,365 Seattle, Washington, Municipal Light and Power Revenue Refunding, Series 2001 5.250% 03/01/11...... Aaa AAA 5,594 1,400 Seattle, Washington, Water Systems Revenue Refunding, Series 1993, 5.500% 06/01/18...... Aa2 AA 1,412 7,800 Spokane County, Washington, School District Number 354 GO, Series 1998, (FGIC Insured), 5.500% 12/01/10...... Aaa AAA 8,314 2,195 Tacoma, Washington, Electric Systems Revenue, Series 1992, (AMBAC Insured), 5.900% 01/01/05...... Aaa AAA 2,246 1,000 Tacoma, Washington, GO, Series 1992A, 5.750% 07/01/02...... A1 AA- 1,009
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- WASHINGTON -- (CONTINUED) $ 2,100 Tacoma, Washington, Sewer Revenue Refunding, Series 1994B, (FGIC Insured), 5.500% 12/01/03...... Aaa AAA $ 2,197 10,000 Washington State, GO Refunding, Series 1993R-93B, 5.125% 10/01/04...... Aa1 AA+ 10,467 6,645 Washington State, GO Refunding, Series 1997R-98A, 5.000% 07/01/15...... Aa1 AA+ 6,625 3,260 Washington State, GO, Series 1997E, 5.000% 07/01/22...... Aa1 AA+ 3,124 2,500 Washington State, Public Power Supply Systems Revenue Refunding, (Nuclear Project Number 1) Series 1996A, (AMBAC Insured), 6.000% 07/01/05...... Aaa AAA 2,677 1,150 Washington State, Public Power Supply Systems Revenue Refunding, Series 1993A, 5.800% 07/01/07...... Aa1 AA- 1,229 3,000 Washington State, Public Power Supply Systems Revenue Refunding, Series 1993B, (FSA Insured), 5.400% 07/01/05...... Aaa AAA 3,160 8,000 Washington State, Public Power Supply Systems Revenue Refunding, Series 1996A, (AMBAC Insured), 5.500% 07/01/04...... Aaa AAA 8,399 2,000 Yakima County, Washington, School District Number 7, GO, Series 1994, (MBIA Insured), 5.500% 12/01/03...... Aaa AAA 2,091 ---------- 67,478 ---------- WEST VIRGINIA -- 0.6% 6,500 West Virginia State, Hospital Financing Authority Revenue, (Charleston Area Medical Center Project) Series 2000A, 6.750% 09/01/22...... A2 NR 6,914 ----------
SEE NOTES TO FINANCIAL STATEMENTS. 120 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- WISCONSIN -- 3.0% $ 2,500 Milwaukee County, Wisconsin, GO, Series 2001A, 5.000% 10/01/12...... Aa3 AA $ 2,561 2,500 Milwaukee County, Wisconsin, GO, Series 2001A, 5.000% 10/01/13...... Aa3 AA 2,544 5,790 Milwaukee, Wisconsin, Metropolitan Sewer District, GO Refunding, Series 1997A, 5.125% 10/01/16...... Aa1 AA+ 5,814 3,070 Sun Prairie, Wisconsin, Area School District, GO, Promissory Notes, Series 1996, (FGIC Insured, Escrowed to Maturity), 5.500% 04/01/03...... Aaa AAA 3,170 1,000 Wisconsin State, GO Refunding, Series 1995-2, 5.200% 11/01/07...... Aa3 AA 1,034 4,745 Wisconsin State, GO, Series 1996A, 5.000% 05/01/16...... Aa3 AA 4,721 4,525 Wisconsin State, GO, Series 2002A, 5.000% 05/01/07...... Aa3 AA 4,710 8,000 Wisconsin State, Petroleum Revenue, Series 2000A, 5.750% 07/01/08...... Aa3 AA- 8,463 2,735 Wisconsin, Housing and Economic Development Authority, Revenue, Series 1997G, 5.350% 03/01/12...... Aa2 AA 2,795 ---------- 35,812 ---------- TOTAL MUNICIPAL BONDS AND NOTES (Cost $1,153,492).................... 1,172,081 ----------
SHARES VALUE (000) (000) ---------------------------------------------------------------- INVESTMENT COMPANIES -- 1.0% (Cost $11,850) 11,850 Nations Tax Exempt Fund, Primary A Class#............................... $ 11,850 ---------- TOTAL INVESTMENTS (Cost $1,165,342*)........... 99.0% 1,183,931 ---------- OTHER ASSETS AND LIABILITIES (NET)........................ 1.0% Cash................................... $ 1 Receivable for investment securities sold................................. 943 Receivable for Fund shares sold........ 1,444 Dividends receivable................... 16 Interest receivable.................... 18,486 Payable for Fund shares redeemed....... (897) Investment advisory fee payable........ (252) Administration fee payable............. (204) Shareholder servicing and distribution fees payable......................... (11) Distributions payable.................. (4,550) Payable for investment securities purchased............................ (3,070) Accrued Trustees' fees and expenses.... (49) Accrued expenses and other liabilities.......................... (245) ---------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................................ 11,612 ---------- NET ASSETS..................... 100.0% $1,195,543 ========== NET ASSETS CONSIST OF: Undistributed net investment income.... $ 2,397 Accumulated net realized gain on investments sold..................... 228 Net unrealized appreciation of investments.......................... 18,589 Paid-in capital........................ 1,174,329 ---------- Net assets............................. $1,195,543 ==========
SEE NOTES TO FINANCIAL STATEMENTS. 121 NATIONS FUNDS Nations Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
VALUE ---------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($1,160,559,346 / 116,051,561 shares outstanding)......................... $10.00 ========== INVESTOR A SHARES: Net asset value and redemption price per share ($28,867,865 / 2,886,823 shares outstanding).................. $10.00 ========== 3.25% Maximum sales charge................... $10.34 Maximum offering price per share....... INVESTOR B SHARES: Net asset value and offering price per share** ($4,109,872 / 411,082 shares outstanding)......................... $10.00 ========== INVESTOR C SHARES: Net asset value and offering price per share** ($2,006,358 / 200,637 shares outstanding)......................... $10.00 ==========
--------------- *Federal Income Tax Information (see Note 7). ** The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. &Zero coupon security. The rate shown reflects the yield to maturity. +Amount represents less than 0.1% #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Intermediate Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): MBIA 10.46% Nations Intermediate Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Hospital Revenue 12.59% Industrial Development Revenue/Pollution Control Revenue 11.25% SEE NOTES TO FINANCIAL STATEMENTS. 122 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 97.3% ALABAMA -- 4.3% $ 2,000 Alabama, 21ST Century Authority Tobacco Settlement Revenue, Series 2001, 5.500% 12/01/21........ Aa1 A $ 1,883 2,000 Birmingham, Alabama, GO Refunding, Series 1992B, Prerefunded 04/01/02 @ 102, 6.250% 04/01/12........ Aa3 AA 2,041 3,000 Butler County, Alabama, Industrial Development Board, Solid Waste Disposal Revenue, (James River Corporation of Virginia Project) Series 1994, AMT, 8.000% 09/01/28........ NR BBB- 3,149 2,750 Courtland, Alabama, Industrial Development Board, Solid Waste Disposal Revenue Refunding, (Champion International Corporation Project) Series 1997, AMT, 5.750% 11/01/27........ Baa2 NR 2,585 1,100 Huntsville, Alabama, GO, Series 1995A, 5.750% 02/01/14........ Aa2 AA 1,144 10,000 Huntsville, Alabama, Health Care Authority, Revenue, Series 2001A, 5.750% 06/01/31........ A2 NR 9,846 3,600 Jefferson County, Alabama, Sewer Revenue Refunding, Series 1997A, (FGIC Insured), 5.625% 02/01/18........ Aaa AAA 3,706 2,000 Jefferson County, Alabama, Sewer Revenue Refunding, Series 1997A, (FGIC Insured), 5.625% 02/01/22........ Aaa AAA 2,039 1,000 Mcintosh, Alabama, Industrial Development Board, Environmental Improvement Revenue, Series 1998C, 5.375% 06/01/28........ A2 A 946 1,000 Morgan County-Decatur, Alabama, Health Care Authority, Hospital Revenue Refunding, (Decatur General Hospital Project) Series 1994, (CONNIE LEE Insured), 6.250% 03/01/13........ NR AAA 1,067
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- ALABAMA -- (CONTINUED) $ 9,750 Phoenix County, Alabama, Industrial Development Board, Environmental Import Revenue Refunding, (Mead Coated Board Project) Series 1998B, (GTY-AGMT), 5.250% 04/01/28........ Baa2 BBB $ 8,958 -------- 37,364 -------- ALASKA -- 2.4% 2,500 Alaska, Student Loan Corporation, Student Loan Revenue, Series 1999A, AMT, (AMBAC Insured), 4.900% 07/01/08........ Aaa AAA 2,539 1,000 Anchorage, Alaska, Electric Utilities Revenue Refunding, Senior Lien, Series 1993, (MBIA Insured), 8.000% 12/01/09........ Aaa AAA 1,223 7,000 Anchorage, Alaska, Electric Utilities Revenue, Senior Lien, Series 1996B, (MBIA Insured), 5.500% 02/01/26........ Aaa AAA 7,017 1,000 North Slope Borough, Alaska, Capital Appreciation GO, Series 1995A, (MBIA Insured), 4.075%& 06/30/06....... Aaa AAA 842 15,000 North Slope Borough, Alaska, Capital Appreciation GO, Series 2000B, (MBIA Insured), 4.993%& 06/30/11....... Aaa AAA 9,506 -------- 21,127 -------- ARIZONA -- 1.1% 1,000 Maricopa County, Arizona, Unified School District Number 48, GO Refunding, Series 1991B, 6.300% 07/01/04........ Aa2 AA 1,072 1,300 Maricopa County, Arizona, Unified School District Number 48, GO Refunding, Series 1993B, 4.600% 07/01/11........ Aa2 AA 1,308 3,000 Maricopa County, Arizona, Unified School District Number 48, GO, Series 1995, 5.000% 07/01/14........ Aa2 AA 3,031
SEE NOTES TO FINANCIAL STATEMENTS. 123 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- ARIZONA -- (CONTINUED) $ 1,600 Pima County, Arizona, United School District Number 1, GO, Series 1992D, (FGIC Insured), Prerefunded 07/01/02 @ 102, 6.100% 07/01/11........ Aaa AAA $ 1,650 5,000 Tucson and Pima County, Arizona, Industrial Development Authority, Single-Family Mortgage Revenue, Series 1983A, 5.193%& 12/01/14....... Aaa AAA 2,612 -------- 9,673 -------- ARKANSAS -- 1.2% 1,300 Arkansas State, Development Finance Authority, Revolving Loan Fund, Wastewater Systems Revenue, Series 1996A, Prerefunded 06/01/06 @ 101, 5.700% 12/01/12........ NR AA 1,407 3,425 Blytheville, Arkansas, Solid Waste Recycling and Sewer Treatment Revenue, (Nucor Corporation Project) Series 1993, AMT, 6.375% 01/01/23........ A1 AA- 3,498 6,000 Crossett, Arkansas, PCR, (Georgia Pacific Corporation Project) Series 1984, 4.875% 10/01/07........ Baa3 NR 5,799 -------- 10,704 -------- CALIFORNIA -- 3.0% 5,000 ABAG Finance Authority for NonProfit Corporations, California, Multi-Family Revenue Refunding, Series 2000A, AMT, (GTY-AGMT), Mandatory Put 8/15/08 @ 100, 6.400% 08/15/30........ Baa3 BBB- 5,389 2,000 ABAG Finance Authority for NonProfit Corporations, California, Multi-Family Revenue Refunding, Series 2000B, (GTY-AGMT), Mandatory Put 8/15/08 @ 100, 6.250% 08/15/30........ Baa3 BBB- 2,162 1,000 California State, GO, Series 1983, 9.000% 06/01/02........ A1 A+ 1,012
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- CALIFORNIA -- (CONTINUED) $ 1,000 California State, GO, Series 1983, 9.000% 10/01/03........ A1 AA- $ 1,094 1,000 California State, GO, Series 1983, 9.000% 04/01/05........ NR AA- 1,153 1,000 California State, GO, Series 1984, 9.100% 10/01/02........ A1 AA- 1,036 1,000 California State, GO, Series 1989, 7.200% 04/01/05........ A1 A+ 1,104 1,600 California State, GO, Series 1989, 7.100% 03/01/07........ A1 A+ 1,809 4,000 California State, GO, Series 1990, 7.000% 08/01/04........ A1 A+ 4,356 3,300 California State, GO, Series 1990, 7.000% 08/01/05........ A1 A+ 3,656 2,500 San Francisco, California, Bay Area Rapid Transit District, Sales Tax Revenue Refunding, (AMBAC Insured), 6.750% 07/01/11........ Aaa AAA 2,959 -------- 25,730 -------- COLORADO -- 0.5% 1,500 Arapahoe County, Colorado, Capital Improvement Transportation Federal Highway Revenue, Series 1986E-470, Prerefunded 08/31/05 @ 103, 6.900% 08/31/15........ Aaa AAA 1,703 2,500 Douglas County, Colorado, Sales and Use Tax Revenue, Series 1996, (MBIA Insured), 5.500% 10/15/11........ Aaa AAA 2,593 -------- 4,296 -------- CONNECTICUT -- 0.7% 5,000 Connecticut State, Health and Educational Facilities Authority, Revenue, (Eastern Connecticut Health Network Project) Series 2000A, 6.000% 07/01/25........ NR AA 5,161
SEE NOTES TO FINANCIAL STATEMENTS. 124 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- CONNECTICUT -- (CONTINUED) $ 470 Connecticut State, Housing Finance Authority, Revenue, (Housing Mortgage Finance Program) Series 1994A, 6.100% 05/15/13........ Aaa AAA $ 488 -------- 5,649 -------- DISTRICT OF COLUMBIA -- 3.7% 9,000 District of Columbia, Hospital Revenue Refunding, (Medlantic Healthcare Group Project) Series 1997A, (MBIA Insured), Prerefunded 08/15/07 @ 102, 5.375% 08/15/15........ Aaa AAA 9,326 3,905 District of Columbia, Revenue Refunding, (Howard University Project) Series 1996, (MBIA Insured), 5.750% 10/01/12........ Aaa AAA 4,110 3,985 District of Columbia, Revenue Refunding, (Howard University Project) Series 1996, (MBIA Insured), 5.750% 10/01/17........ Aaa AAA 4,129 4,200 District of Columbia, Revenue, (Association of American Medical Colleges Project) Series 1997A, (AMBAC Insured), 5.375% 02/15/17........ Aaa AAA 4,237 10,400 District of Columbia, Revenue, (Carnegie Endowment Project) Series 1996, 5.750% 11/15/26........ Aa3 NR 10,517 -------- 32,319 -------- FLORIDA -- 0.8% 1,735 Florida State, Board of Education, Capital Outlay GO, Unrefunded Balance, Series 1985, 9.125% 06/01/14........ Aa2 AA+ 2,333 5,000 Orange County, Florida, Tourist Development Tax Revenue Refunding, Series 1998A, (AMBAC Insured), 4.750% 10/01/24........ Aaa AAA 4,573 -------- 6,906 --------
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- 7.2% $ 5,000 Atlanta, Georgia, Airport Facilities Revenue Refunding, Series 2000A, (FGIC Insured), 5.600% 01/01/30(a)..... Aaa AAA $ 5,086 3,000 Chatham County, Georgia, Hospital Medical Authority, Revenue, (Memorial Health Medical Center Project) Series 2001A, 6.125% 01/01/24........ A3 A- 3,048 1,000 DeKalb County, Georgia, School District GO, Series 1993A, 6.250% 07/01/09........ Aa2 AA 1,120 1,500 Effingham County, Georgia, Development Authority, Solid Waste Disposal Revenue, (Fort James Corporation Project) Series 1998, AMT, 5.625% 07/01/18........ Baa3 BBB- 1,335 4,750 Fulco, Georgia, Hospital Authority, Revenue Anticipation Certificates, (St. Josephs Hospital Project) Series 1994, 5.500% 10/01/18........ Aaa NR 4,843 1,435 Gainesville & Hall County, Georgia, Hospital Authority, Revenue Anticipation Certificates, (Northeast Georgia Health System Income Project) Series 2001, 5.000% 05/15/11........ NR A- 1,418 1,610 Gainesville & Hall County, Georgia, Hospital Authority, Revenue Anticipation Certificates, (Northeast Georgia Health System Income Project) Series 2001, 5.000% 05/15/12........ NR A- 1,577 1,560 Gainesville & Hall County, Georgia, Hospital Authority, Revenue Anticipation Certificates, (Northeast Georgia Health System Income Project) Series 2001, 5.000% 05/15/13........ NR A- 1,515 1,600 Georgia State, GO, Series 1991C, 6.500% 04/01/04........ Aaa AAA 1,708 3,000 Georgia State, GO, Series 1992B, 6.250% 03/01/11........ Aaa AAA 3,385
SEE NOTES TO FINANCIAL STATEMENTS. 125 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $ 1,700 Georgia State, GO, Series 1993F, 6.500% 12/01/05........ Aaa AAA $ 1,871 3,000 Georgia State, GO, Series 1996B, 6.250% 04/01/07........ Aaa AAA 3,298 6,445 Georgia State, GO, Series 1998B, 5.500% 07/01/10........ Aaa AAA 6,959 9,790 Georgia State, Housing and Finance Authority, Single-Family Mortgage Revenue, Series 1999B-2, AMT, 6.100% 06/01/31........ Aa2 AAA 10,046 1,945 Henry County, Georgia, School District GO, Series 1994, (MBIA Insured), Prerefunded 08/01/04 @ 102, 6.000% 08/01/14........ Aaa AAA 2,111 1,000 Metropolitan Atlanta, Rapid Transit Authority of Georgia, Revenue Refunding, Series 1992P, (AMBAC Insured), 6.000% 07/01/04........ Aaa AAA 1,063 1,000 Metropolitan Atlanta, Rapid Transit Authority of Georgia, Revenue Refunding, Series 1992P, (AMBAC Insured), 6.100% 07/01/05........ Aaa AAA 1,077 2,000 Metropolitan Atlanta, Rapid Transit Authority of Georgia, Revenue Refunding, Series 1992P, (AMBAC Insured), 6.250% 07/01/20........ Aaa AAA 2,279 2,000 Monroe County, Georgia Development Authority, PCR, (Oglethorpe Power Corporation Project) Series 1992A, 6.800% 01/01/11........ A3 A 2,259 3,000 Savannah, Georgia, Hospital Authority, Hospital Improvement Revenue Refunding, (Candler Hospital Project) Series 1992, Prerefunded 01/01/03 @ 102, 7.000% 01/01/23........ Ba1 BB 3,168
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $ 2,690 Union County, Georgia, Housing Authority, Multi-Family Housing Revenue Refunding, (Hidden Lake Apartments Ltd. Project) Series 1994A, (FHA/FNMA COLL), 7.125% 12/01/25........ Aaa NR $ 2,805 -------- 61,971 -------- HAWAII -- 0.2% 1,180 Honolulu City and County, Hawaii, GO Refunding, Series 1993B, 8.000% 10/01/10........ Aa3 AA- 1,463 -------- ILLINOIS -- 11.2% 1,600 Chicago, Illinois, GO, Series 1993, (FGIC Insured), 5.375% 01/01/13........ Aaa AAA 1,630 3,030 Chicago, Illinois, Metropolitan Water Reclamation District GO, Series 1993, 5.500% 12/01/12........ Aa1 AA+ 3,245 3,385 Chicago, Illinois, Metropolitan Water Reclamation District, Capital Improvement GO, Series 1991, 6.900% 01/01/07........ Aa1 AA+ 3,783 3,000 Chicago, Illinois, O'Hare International Airport, Revenue Refunding, Second Lien, Series 1993C, (MBIA Insured), 5.000% 01/01/18........ Aaa AAA 2,892 2,640 Chicago, Illinois, O'Hare International Airport, Revenue Refunding, Senior Lien, Series 1993A, 5.000% 01/01/16........ A1 A+ 2,482 13,000 Chicago, Illinois, O'Hare International Airport, Revenue, Refunding Second Lien, Series 1999, AMT, (AMBAC Insured), 5.500% 01/01/10........ Aaa AAA 13,471 1,500 Chicago, Illinois, O'Hare International Airport, Special Facilities Revenue Refunding, (American Airlines Inc. Project) Series 1994, (GTY-AGMT), 8.200% 12/01/24........ B1 BB 1,509
SEE NOTES TO FINANCIAL STATEMENTS. 126 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- ILLINOIS -- (CONTINUED) $ 5,735 Chicago, Illinois, O'Hare International Airport, Special Facilities Revenue Refunding, (United Air Lines Project) Series 1999B, AMT, 5.200% 04/01/11........ NR B+ $ 3,441 5,000 Chicago, Illinois, O'Hare International Airport, Special Facilities Revenue, (United Air Lines Project) Series 1999A, 5.350% 09/01/16........ NR B+ 3,000 2,000 Chicago, Illinois, Park District, GO, Series 1996, (MBIA Insured), 5.500% 01/01/16........ Aaa AAA 2,050 4,800 Chicago, Illinois, Water Revenue, Senior Lien, Series 2000, (AMBAC Insured), 5.750% 11/01/10........ Aaa AAA 5,206 2,800 Cook County, Illinois, Forest Preserve District, Zoo GO, Series 1996, (MBIA Insured), Prerefunded 11/01/06 @ 101, 5.800% 11/01/16........ Aaa AAA 3,059 4,500 Cook County, Illinois, GO, Series 1996, (FGIC Insured), Prerefunded 11/15/06 @ 101, 5.900% 11/15/16........ Aaa AAA 4,937 5,000 Cook County, Illinois, GO, Series 1997A, (MBIA Insured), 5.625% 11/15/22........ Aaa AAA 5,110 2,565 Du Page County, Illinois, GO, Series 1993, 5.600% 01/01/21........ Aaa AAA 2,693 1,700 Glendale Heights, Illinois, Hospital Revenue Refunding, (Glendale Heights Project) Series 1985B, 7.100% 12/01/15........ Aaa AAA 1,968 3,700 Illinois State, GO, Series 1993, 5.500% 08/01/18........ Aa2 AA 3,734 2,400 Illinois State, GO, Series 1994, 5.800% 04/01/19........ Aa2 AA 2,464 4,785 Illinois State, GO, Series 1995, (MBIA Insured), Prerefunded 02/01/05 @ 100, 6.000% 02/01/16........ Aaa AAA 5,201
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- ILLINOIS -- (CONTINUED) $ 1,645 Illinois State, Health Facilities Authority, Revenue, (Sherman Health Systems Project) Series 1997, (AMBAC Insured), 5.500% 08/01/08........ Aaa AAA $ 1,738 1,500 Illinois State, Sales Tax Revenue, Series 1994V, Prerefunded 06/15/05 @ 102, 6.375% 06/15/17........ Aa2 AAA 1,657 2,200 Illinois State, Sales Tax Revenue, Series 1994V, Prerefunded 06/15/05 @ 102, 6.375% 06/15/20........ Aa2 AAA 2,430 1,000 Illinois, Development Finance Authority, PCR Refunding, (Commonwealth Edison Company Project) Series 1994D, (AMBAC Insured), 6.750% 03/01/15........ Aaa AAA 1,094 1,800 Illinois, Educational Facilities Authority, Revenue, (Northwestern University Project) Series 1993, 5.375% 12/01/21........ Aa1 AA+ 1,806 20,390 Illinois, Metropolitan Pier & Exposition Authority, Capital Appreciation, Dedicated State Tax Revenue, (McCormick Place Exposition Project) Series 1993A, (FGIC Insured), 5.174%& 06/15/13....... Aaa AAA 11,502 1,535 McHenry County, Illinois, Community Unit School District Number 200 GO, Series 1996A, (FSA Insured), 5.750% 01/01/13........ Aaa AAA 1,604 2,680 Southern Illinois, Capital Appreciation University Revenue, (Housing and Auxiliary Facilities Systems Program) Series 1997, (MBIA Insured), 4.048%& 04/01/06....... Aaa AAA 2,283 -------- 95,989 --------
SEE NOTES TO FINANCIAL STATEMENTS. 127 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- INDIANA -- 2.7% $ 2,500 Franklin, Indiana, Economic Development Revenue Refunding, (Hoover Universal, Inc. Project) Series 1994, (GTY-AGMT), 6.100% 12/01/04........ A2 A- $ 2,660 1,000 Hamilton/Southeastern Indiana, North Delaware School Building Corporation, First Mortgage Revenue, Series 1996, (AMBAC Insured, State Aid Withholding), 5.000% 07/15/07........ Aaa AAA 1,037 1,000 Hamilton/Southeastern Indiana, North Delaware School Building Corporation, First Mortgage Revenue, Series 1996, (AMBAC Insured, State Aid Withholding), 5.100% 07/15/09........ Aaa AAA 1,038 6,340 Indiana, Health Facilities Financing Authority, Hospital Revenue, (Charity Obligation Group Project) Series 1997D, Prerefunded 11/01/07 @ 100, 5.000% 11/01/26........ Aaa NR 6,472 2,000 Indiana, Health Facilities Financing Authority, Hospital Revenue, (Clarian Health Partners, Inc. Project) Series 1996A, 5.500% 02/15/16........ Aa3 AA 1,996 2,000 Indiana, Ivy Tech State College, Revenue, Series 1997E, (AMBAC Insured), 5.125% 07/01/12........ Aaa AAA 2,048 4,000 Indianapolis, Indiana, Airport Authority, Special Facilities Revenue Refunding, (Federal Express Corporation Project) Series 1998, AMT, 5.500% 05/01/29........ Baa2 BBB 3,625 2,000 Indianapolis, Indiana, Airport Authority, Special Facilities Revenue, (Federal Express Corporation Project) Series 1994, AMT, 7.100% 01/15/17........ Baa2 BBB 2,105
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- INDIANA -- (CONTINUED) $ 2,000 St. Joseph County, Indiana, Educational Facilities Revenue, (University of Notre Dame -- Du Lac Project) Series 1996, 5.500% 03/01/26........ Aaa NR $ 2,007 -------- 22,988 -------- IOWA -- 0.3% 2,750 Iowa, Student Loan Liquidity Corporation, Student Loan Revenue Refunding, Series 1998J, AMT, (AMBAC Insured), 4.800% 06/01/09........ Aaa AAA 2,766 -------- KANSAS -- 0.2% 2,000 Kansas City, Kansas, Utility System Improvement Revenue Refunding, Series 1994, (FGIC Insured), 6.250% 09/01/14........ Aaa AAA 2,158 -------- KENTUCKY -- 0.1% 1,000 Kentucky State, Turnpike Authority, Economic Development Revenue Refunding, (Revitalization Project) Series 1993, (AMBAC Insured), 5.500% 07/01/08........ Aaa AAA 1,071 -------- LOUISIANA -- 0.7% 3,500 East Baton Rouge Parish, Louisiana, Revenue Refunding, (Pacific Corporation Project) Series 1998, AMT, 5.350% 09/01/11........ Baa3 NR 3,266 3,000 Plaquemines, Louisiana, Port Harbour and District Marine Terminal Facilities Revenue Refunding, (Electro-Coal Project) Series 2001B, 5.000% 09/01/07........ A3 A- 2,992 -------- 6,258 --------
SEE NOTES TO FINANCIAL STATEMENTS. 128 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MAINE -- 0.1% $ 1,000 Maine, Health and Higher Educational Facilities Authority, Revenue, Series 1996B, (State Aid Withholding, AMBAC Insured), 5.500% 07/01/16........ Aaa AAA $ 1,020 -------- MARYLAND -- 0.3% 3,000 Maryland State, Economic Development Corporation, Student Housing Revenue, (Salisbury Collegiate Housing Project) Series 1999A, 6.000% 06/01/30........ Baa3 NR 3,024 -------- MASSACHUSETTS -- 0.7% 3,000 Massachusetts State, Water Resources Authority, General Revenue, Series 1993C, (AMBAC Insured), 5.250% 12/01/15........ Aaa AAA 3,122 2,500 Massachusetts State, Water Resources Authority, General Revenue, Series 1994A, (MBIA Insured), Prerefunded 08/01/04 @ 101.5, 5.900% 08/01/16........ Aaa AAA 2,696 -------- 5,818 -------- MICHIGAN -- 1.7% 1,670 Byron Center, Michigan, Public Schools GO, Series 1995, (MBIA Insured), Prerefunded 05/01/05 @ 101, 5.970% 05/01/15........ Aaa AAA 1,807 1,000 Detroit, Michigan, GO Refunding, Series 1995B, 6.375% 04/01/07........ Baa1 A- 1,060 1,700 Hudsonville, Michigan, Public Schools, Series 1994B, (FGIC Insured), Prerefunded 05/01/04 @ 102, 6.000% 05/01/14........ Aaa AAA 1,835 1,000 Leslie, Michigan, Public Schools Ingham and Jackson Counties, GO Refunding, Series 1995, (AMBAC Insured), Prerefunded 05/01/05 @101, 6.000% 05/01/15........ Aaa AAA 1,083
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MICHIGAN -- (CONTINUED) $ 3,000 Michigan State, Comprehensive Transportation Revenue Refunding, Series 1996A, (MBIA Insured), 5.250% 08/01/13........ Aaa AAA $ 3,081 3,435 Michigan State, Environmental Protection Program GO, Series 1992, 6.250% 11/01/12........ Aaa AAA 3,872 2,000 Michigan State, Trunk Line Revenue, Series 1994A, (FGIC-TCRS Insured), Prerefunded 11/15/04 @ 102, 5.625% 11/15/14........ Aaa AAA 2,164 -------- 14,902 -------- MISSISSIPPI -- 1.2% 5,000 Adams County, Mississippi, PCR, (International Paper Company Project) Series 1994A, 5.500% 12/01/05........ Baa2 BBB 5,162 3,000 Lowndes County, Mississippi, Solid Waste Disposal PCR Refunding, (Weyerhaeuser Company Project) Series 1992A, 6.800% 04/01/22........ Baa2 BBB 3,270 2,200 Mississippi, Hospital Equipment and Facilities Improvement Authority, Revenue Refunding, (North Mississippi Health Services Project) Series 1993-1, (AMBAC Insured), 5.400% 05/15/04........ Aaa AAA 2,294 -------- 10,726 -------- MISSOURI -- 3.6% 1,000 Independence, Missouri, School District, GO, Series 1991, 6.250% 03/01/11........ A3 NR 1,124 1,450 Jefferson City, Missouri, School District, Series 1991A, 6.700% 03/01/11........ Aa2 NR 1,657 1,500 Kansas City, Missouri, Water Revenue, Series 1994D, Prerefunded 12/01/04 @ 100, 6.600% 12/01/14........ Aa3 AA 1,634
SEE NOTES TO FINANCIAL STATEMENTS. 129 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MISSOURI -- (CONTINUED) $ 1,600 Mehlville, Missouri, School District Number R9, GO Refunding, Series 1993, (MBIA Insured), Prerefunded 02/15/03 @ 102, 6.000% 02/15/13........ Aaa AAA $ 1,685 3,425 Missouri State, Environmental Improvement and Energy Resource Authority, PCR Refunding, (Associated Electrical Cooperation Thomas Hill Project) Series 1996, 5.500% 12/01/10........ A1 AA 3,594 2,000 Missouri State, Environmental Improvement and Energy Resource Authority, PCR Refunding, (Associated Electrical Cooperation Thomas Hill Project) Series 1996, 5.500% 12/01/11........ A1 AA 2,091 3,290 Missouri State, Environmental Improvement and Energy Resource Authority, Water PCR, Series 1995C, Prerefunded 01/01/05 @ 105, 6.000% 01/01/16........ Aaa NR 3,540 4,065 Missouri State, GO, Series 1995, 5.600% 04/01/15........ Aaa AAA 4,213 1,200 Missouri State, Health and Educational Facilities Authority, Health Facilities Revenue, (Barnes-Jewish Inc., Christian Project) Series 1993A, 5.200% 05/15/11........ Aa3 AA 1,231 1,060 Missouri State, Housing Development Commission, Single-Family Mortgage Revenue, (Homeowner Loan Project) Series 1995A, AMT, (GNMA/FHA/VA COLL), 6.100% 09/01/14........ NR AAA 1,098 1,625 Missouri State, Water Pollution Control GO, Series 1995A, 5.600% 04/01/15........ Aaa AAA 1,684
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MISSOURI -- (CONTINUED) $ 3,500 Sikeston, Missouri, Electrical Revenue Refunding, Series 1992, (MBIA Insured), 6.100% 06/01/07........ Aaa AAA $ 3,829 1,400 St. Louis, Missouri, Industrial Development Authority, PCR Refunding, (Anheuser Busch Company Project) Series 1991, 6.650% 05/01/16........ A1 A+ 1,633 2,240 University City, Missouri, GO, Series 1994, (MBIA Insured), Prerefunded 02/15/04 @ 100, 6.200% 02/15/14........ Aaa AAA 2,371 -------- 31,384 -------- MONTANA -- 0.3% 8,000 Lewis and Clark County, Montana, Environmental Facilities Revenue, (Asarco, Inc. Project) Series 1998, AMT, 5.850% 10/01/33........ Ca CCC 2,338 -------- NEBRASKA -- 0.2% 1,600 Omaha, Nebraska, Public Power District, Electric Revenue, Series 1992B, 6.200% 02/01/17........ Aa2 NR 1,795 -------- NEVADA -- 1.8% 3,000 Las Vegas and Clark County, Nevada, Library District GO, Series 1993, (FGIC Insured), Prerefunded 02/01/03 @ 101, 6.000% 02/01/12........ Aaa AAA 3,125 3,585 Nevada State, GO, Series 1994, Prerefunded 09/01/04 @ 101, 5.875% 09/01/12........ Aa2 AAA 3,851 4,000 Nevada State, GO, Series 1995A, 5.500% 11/01/16........ Aa2 AA 4,088 2,625 Nevada State, GO, Series 1995A, 5.500% 11/01/17........ Aa2 AA 2,672 2,000 Nevada State, Municipal Board GO, (Bank Project Number 40-41) Series 1993A, 6.375% 12/01/17........ NR AAA 2,097 -------- 15,833 --------
SEE NOTES TO FINANCIAL STATEMENTS. 130 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NEW HAMPSHIRE -- 0.5% $ 4,000 New Hampshire, Higher Education and Health Facility Authority, Revenue, (Nashua Memorial Hospital Project) Series 1993, 6.000% 10/01/23........ NR A- $ 3,915 -------- NEW JERSEY -- 0.4% 2,500 New Jersey State, GO, Series 1986B, 6.250% 01/15/05........ Aa2 AA+ 2,687 890 New Jersey State, Highway Authority, Garden State Parkway Generated Revenue, Series 1971, 6.500% 01/01/11........ Aaa AAA 979 -------- 3,666 -------- NEW MEXICO -- 0.2% 1,780 New Mexico, Mortgage Finance Authority, Single-Family Mortgage Revenue, Series 1997C-2, AMT, (GNMA/FNMA/FHLMC COLL), 6.050% 07/01/28........ Aaa NR 1,810 -------- NEW YORK -- 0.8% 1,555 New York City, New York, Industrial Development Agency Civic Facilities Revenue, (Polytechnic University Project) Series 2000, 5.300% 11/01/09........ Baa3 BBB- 1,585 1,250 New York City, New York, Municipal Water Finance Authority, Water and Sewer Systems Revenue, Series 1997B, 5.750% 06/15/29........ Aa2 AA 1,299 2,390 New York State, Local Government Assistance Corporation, Revenue, Series 1995A, 6.000% 04/01/16........ A3 AA- 2,517 1,750 New York, New York, City Municipal Water Financing Authority, Water and Sewer Systems Revenue, Series 1998D, 4.750% 06/15/12........ Aa2 AA 1,757 -------- 7,158 --------
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- 1.4% $ 4,600 Halifax County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Revenue, (International Paper Company Project) Series 2001A, AMT, 5.900% 09/01/25........ Baa2 BBB $ 4,459 2,425 Haywood County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Solid Waste Disposal Revenue Refunding, (Champion International Corporation Project) Series 1999, AMT, 6.400% 11/01/24........ Baa2 NR 2,489 5,450 New Hanover County, North Carolina, GO, Series 2001, 5.000% 06/01/20........ Aa2 AA- 5,367 -------- 12,315 -------- OHIO -- 4.3% 8,260 Akron/Bath/Copley, Ohio, Joint Township Hospital District, Revenue, (Summa Hospital Project) Series 1998A, 5.375% 11/15/18........ Baa1 NR 7,479 7,240 Dayton, Ohio, Special Facilities Revenue Refunding, (Air Freight Corporation Project) Series 1993F, 6.050% 10/01/09........ NR BB+ 6,254 10,500 Dayton, Ohio, Special Facilities Revenue, (Air Freight Corporation Project) Series 1988D, AMT, 6.200% 10/01/09........ NR BB+ 9,156 3,025 Lakota, Ohio, School District GO, Series 1994, (AMBAC Insured), Prerefunded 12/01/05 @ 100, 6.250% 12/01/14........ Aaa AAA 3,307 1,000 Lucas County, Ohio, Hospital Revenue, (Flower Hospital Project) Series 1993, Prerefunded 12/01/04 @ 101, 6.125% 12/01/13........ NR NR 1,076
SEE NOTES TO FINANCIAL STATEMENTS. 131 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- OHIO -- (CONTINUED) $10,000 Montgomery County, Ohio, Hospital Revenue, Series 1999, 6.750% 04/01/22........ Baa1 BBB+ $ 10,375 -------- 37,647 -------- OKLAHOMA -- 0.3% 3,000 Oklahoma, Development Finance Authority, Revenue Refunding, (Hillcrest Healthcare Center Inc. Project) Series 1999A, 5.000% 08/15/08........ B2 B- 2,460 -------- PENNSYLVANIA -- 1.2% 1,725 Philadelphia, Pennsylvania, Hospital and Higher Education Facilities Authority, Hospital Revenue, (Frankford Hospital Project) Series 1993A, 6.000% 06/01/14........ A3 NR 1,831 3,125 Philadelphia, Pennsylvania, Hospital and Higher Education Facilities Authority, Hospital Revenue, (Frankford Hospital Project) Series 1993A, 6.000% 06/01/23........ A3 NR 3,203 4,800 Philadelphia, Pennsylvania, Industrial Development Authority, IDR Refunding, (Ashland Oil Inc. Project) Series 1993, 5.700% 06/01/05........ Baa2 NR 5,012 -------- 10,046 -------- SOUTH CAROLINA -- 3.5% 5,000 Georgetown County, South Carolina, Environmental Improvement Revenue Refunding, (International Paper Company Project) Series 2000A, (GTY-AGMT), 5.950% 03/15/14........ Baa2 BBB 5,160 5,000 Greenville, South Carolina, Hospital Facilities Revenue, Series 2001, 5.500% 05/01/26........ Aaa AAA 5,000 8,085 South Carolina State, State School Facilities, GO, Series 2001A, 3.500% 01/01/16........ Aaa AAA 6,802
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $ 1,545 South Carolina, State Housing Finance and Development Authority, Revenue, (Homeownership Mortgage Purchase Project) Series 1994A, 6.375% 07/01/16........ Aa2 AA $ 1,608 3,500 South Carolina, State Public Services Authority, Revenue Refunding, Series 1995B, (FGIC Insured), 5.875% 01/01/19........ Aaa AAA 3,660 2,000 Spartanburg County, South Carolina, Solid Waste Disposal Facilities Revenue, (BMW U.S. Capital Corporation Project) Series 1994, AMT, (GTY-AGMT), 7.550% 11/01/24........ A1 NR 2,151 6,450 York County, South Carolina, Exempt Facilities IDR, (Hoechst Celanese Corporation Project) Series 1994, AMT, 5.700% 01/01/24........ Baa2 BBB 6,009 -------- 30,390 -------- TENNESSEE -- 3.0% 5,500 Knox County, Tennessee, Health Educational and Housing Facilities Board, Revenue, (University Health Systems Inc. Project) Series 1999, 5.750% 04/01/19........ Baa1 NR 5,418 3,000 Maury County, Tennessee, Industrial Development Board, Multi-Model PCR Refunding, (General Motors Corporation - Saturn Corporation Project) Series 1994, 6.500% 09/01/24........ A3 BBB+ 3,140 4,000 Maury County, Tennessee, Industrial Development Board, Solid Waste Disposal Revenue, Occidental Petroleum Corporation, AMT, (GTD- AGMT), 6.250% 08/01/18........ Baa2 BBB- 4,039
SEE NOTES TO FINANCIAL STATEMENTS. 132 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TENNESSEE -- (CONTINUED) $ 2,750 McMinn County, Tennessee, Industrial Development Board, Recycling Facilities Revenue, (Bowater Inc. Project) Series 1992, AMT, 7.400% 12/01/22........ Baa3 BBB $ 2,843 1,000 Memphis, Tennessee, GO Refunding, Series 1996, 5.200% 11/01/10........ Aa2 AA 1,031 5,000 Memphis-Shelby County, Tennessee, Airport Authority, Special Facilities Revenue Refunding, (Federal Express Corporation Project) Series 2001, 5.000% 09/01/09........ Baa2 BBB 5,028 2,500 Metropolitan Government, Nashville and Davidson County, Tennessee, Water and Sewer Systems Revenue Refunding, Series 1993, (FGIC Insured), 5.200% 01/01/13........ Aaa AAA 2,609 2,000 Metropolitan Government, Nashville and Davidson County, Tennessee, Water and Sewer Systems Revenue Refunding, Series 1996, (MBIA Insured), 5.500% 01/01/14........ Aaa AAA 2,075 -------- 26,183 -------- TEXAS -- 9.9% 6,000 Alliance Airport Authority Inc., Texas, Special Facilities Revenue, (American Corporation - American Airlines Inc. Project) Series 1991, AMT, 7.000% 12/01/11........ B1 BB 5,685 2,000 Arlington, Texas, Independent School District, GO, Series 1991, (PSF-GTD), 6.500% 08/15/03........ Aaa NR 2,104 1,600 Austin, Texas, Utilities System Revenue, Series 1987, Prerefunded 05/15/02 @ 100, 8.625% 11/15/12........ Aaa AAA 1,614
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 2,470 Beaumont, Texas, Independent School District GO, Series 1996, (PSF-GTD), 5.000% 02/15/17........ Aaa AAA $ 2,419 1,540 Bexar, Texas, Metropolitan Water District, Waterworks Revenue, Series 1995, (MBIA Insured), Prerefunded 05/01/05 @ 102, 6.000% 05/01/15........ Aaa AAA 1,681 2,070 Bexar, Texas, Metropolitan Water District, Waterworks Revenue, Unrefunded Balance, Series 1995, (MBIA Insured), 6.000% 05/01/15........ Aaa AAA 2,201 5,000 Brazos River Authority, Texas, PCR Refunding, (Texas Utilities Electric Company Project) Series 1995B, AMT, Mandatory Put 06/19/06 @ 100, 5.050% 06/01/30........ Baa1 BBB+ 4,988 1,000 Brazos River Authority, Texas, Revenue Refunding, (Houston Light and Power Company Project) Series 1992B, (MBIA Insured), 6.375% 04/01/12........ Aaa AAA 1,041 1,540 Comal, Texas, Independent School District GO, Series 1996A, (PSF- GTD), Prerefunded 02/01/06 @ 102, 5.600% 02/01/10........ Aaa AAA 1,640 4,805 Cypress-Fairbanks, Texas, Independent School District GO, Unrefunded Balance, Series 1993A, (PSF-GTD), 5.500% 02/15/11........ Aaa AAA 4,918 1,750 Dallas County, Texas, GO, Series 1996, 5.250% 08/15/16........ Aaa AAA 1,766 6,000 Dallas-Fort Worth, Texas, International Airport Facilities Improvement, Corporate Revenue Refunding, (American Airlines Project) Series 2000C, AMT, Mandatory Put 11/01/07 @ 100, 6.150% 05/01/29........ B1 BB 5,625
SEE NOTES TO FINANCIAL STATEMENTS. 133 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 1,000 Harris County, Texas, GO, Series 1984, 7.800% 01/01/03........ Aaa AAA $ 1,043 3,335 Harris County, Texas, Health Facilities Development Authority, Hospital Revenue, (Memorial Herman Hospital Systems Project) Series 1998, (FSA Insured), 5.500% 06/01/11........ Aaa AAA 3,522 5,000 Houston, Texas, Airport Systems Revenue, Series 1998B, AMT, (FGIC Insured), 5.000% 07/01/16........ Aaa AAA 4,798 5,000 Houston, Texas, Hotel Occupancy Tax and Special Revenue, Series 2001B, (AMBAC Insured), 5.250% 09/01/33........ Aaa AAA 4,728 5,000 Lubbock, Texas, Health Facilities Development Authority, Corporate Revenue, (St. Joseph Health Systems Project) Series 1998, (FSA Insured), 5.000% 07/01/07........ Aaa AAA 5,149 4,155 McKinney, Texas, Independent School District, GO, Series 2001, (PSF-GTD), 5.125% 02/15/17........ Aaa AAA 4,123 2,000 North Central Texas, Health Facilities Development Corporation, Hospital Revenue, (Presbyterian Healthcare Project) Series 1991A, 6.625% 06/01/11........ Aaa NR 2,250 4,500 Port of Bay City Authority, Texas, Matagorda County Revenue, (Hoechst Celanese Corporation Project), Series 1996, AMT, 6.500% 05/01/26........ Baa2 BBB 4,583 2,500 Red River Authority, Texas, PCR Refunding, Series 1991, (AMBAC Insured), 5.200% 07/01/11........ Aaa NR 2,582 3,000 San Antonio, Texas, Electric and Gas Revenue, Series 1995, (MBIA Insured), 5.375% 02/01/18........ Aaa AAA 3,012
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 2,000 San Antonio, Texas, GO, Series 1996, 5.250% 08/01/15........ Aa2 AA+ $ 2,016 1,720 San Antonio, Texas, Water Revenue, Series 1992, Prerefunded 05/15/02 @ 102, 6.500% 05/15/10........ Aaa AAA 1,765 2,855 Spring Branch, Texas, Independent School District GO, Series 1995, (PSF-GTD), Prerefunded 02/01/05 @ 100, 6.000% 02/01/17........ Aaa AAA 3,048 2,000 Texas City, Texas, IDR Refunding, (Atlantic Richfield Company Project) Series 1990, 7.375% 10/01/20........ Aa2 AA+ 2,447 3,000 Texas State, GO Refunding, Series 1996B, Prerefunded 10/01/06 @ 100, 5.750% 10/01/15........ Aa1 AAA 3,240 1,000 Texas State, GO, Series 1996, 5.500% 08/01/15........ Aa1 AA 1,022 -------- 85,010 -------- UTAH -- 2.8% 2,000 Emery County, Utah, PCR Refunding, (Pacificorp Project) Series 1993A, (AMBAC Insured), 5.650% 11/01/23........ Aaa AAA 2,016 15,300 Murray City, Utah, Hospital Revenue Refunding, (IHC Health Services, Inc. Project) Series 1996, (MBIA Insured), 5.000% 05/15/22........ Aaa AAA 14,409 1,875 Provo, Utah, Electric Revenue, Series 1980, 10.125% 04/01/15....... Aaa AAA 2,513 3,000 Salt Lake City, Utah, Water and Sewer Revenue, Series 1994, (AMBAC Insured), Prerefunded 02/01/04 @ 100, 6.100% 02/01/14........ Aaa AAA 3,166 2,500 Utah, County Hospital Revenue, Series 1997, (MBIA Insured), 5.250% 08/15/26........ Aaa AAA 2,410 -------- 24,514 --------
SEE NOTES TO FINANCIAL STATEMENTS. 134 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VERMONT -- 0.2% $ 1,985 Vermont, Municipal Bond Bank, Revenue, Series 1996-1, (AMBAC Insured), 5.750% 12/01/15........ Aaa AAA $ 2,089 -------- VIRGINIA -- 0.9% 2,000 Covington-Allegheny County, Virginia, IDR Refunding, (Westvaco Corporation Project) Series 1994, 6.650% 09/01/18........ Baa2 BBB 2,079 2,830 Fairfax County, Virginia, Water Authority, Water Revenue, Unrefunded Balance, Series 1992, 6.000% 04/01/22........ Aa1 AAA 3,015 1,000 Norfolk, Virginia, Capital Improvement GO, Series 1997, (FGIC Insured), 5.375% 06/01/15........ Aaa AAA 1,032 1,600 Virginia State, Housing Development Authority, Commonwealth Mortgage Revenue, Series 1995, (MBIA Insured), 5.700% 01/01/14........ Aaa AAA 1,652 -------- 7,778 -------- WASHINGTON -- 12.4% 10,000 Chelan County, Washington, Development Corporation, PCR Refunding, (Alcoa, Inc. Project) Series 1995, 5.850% 12/01/31........ A1 A+ 10,122 2,310 Chelan County, Washington, Public Utilities District Division III, Revenue, Series 1997A, AMT, Mandatory Put 07/01/09 @ 100, 5.600% 07/01/32........ Aa2 AA 2,219 2,480 Clark County, Washington, Sewer Revenue, Series 1996, (MBIA Insured), Prerefunded 12/01/06 @ 100, 5.800% 12/01/11........ Aaa AAA 2,691 1,035 King County, Washington, Library Systems GO, Series 1992, 6.150% 12/01/10........ Aa3 NR 1,104
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- WASHINGTON -- (CONTINUED) $ 2,000 King County, Washington, School District Number 415, GO, Series 1996, (FSA Insured), Prerefunded 06/01/06 @ 100, 5.800% 06/01/13........ Aaa AAA $ 2,157 3,000 King County, Washington, Sewer GO Refunding, Series 1996C, 5.250% 01/01/17........ Aa1 AA+ 3,012 11,140 Pilchuck, Washington, Public Development Corporation, Special Airport Facilities Revenue, (Tramco Inc. Project) Series 1993, AMT, 6.000% 08/01/23........ Baa1 BBB+ 10,666 2,405 Port Seattle, Washington, GO, Series 2000, AMT, 6.000% 12/01/11........ Aa1 AA+ 2,560 1,600 Seattle, Washington, GO Refunding, Series 1993, 5.650% 01/01/20........ Aa3 AA 1,617 4,365 Seattle, Washington, GO, Series 1996A, 5.625% 01/15/10........ Aa1 AAA 4,541 1,795 Seattle, Washington, GO, Series 1997, 5.300% 08/01/17........ Aa1 AAA 1,808 2,530 Seattle, Washington, Municipal Light and Power Revenue, Series 1994, Prerefunded 07/01/04 @ 102, 6.625% 07/01/16........ Aa3 A+ 2,773 6,100 Seattle, Washington, Water Systems Revenue Refunding, Series 1993, 5.500% 06/01/18........ Aa2 AA 6,151 1,525 Skagit County, Washington, School District Number 320, GO Refunding, Series 1996, (FGIC Insured), 5.500% 12/01/12........ Aaa AAA 1,572 2,000 Tacoma, Washington, Conservation Systems Project Revenue, Series 1994, 6.600% 01/01/15........ Aa1 AA- 2,142 2,000 Tacoma, Washington, Electric System Revenue, Series 1997, (AMBAC Insured), 5.250% 01/01/15........ Aaa AAA 2,026 12,700 Washington State, GO, Series 1990A, 6.750% 02/01/15........ Aa1 AA+ 14,918
SEE NOTES TO FINANCIAL STATEMENTS. 135 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- WASHINGTON -- (CONTINUED) $ 1,155 Washington State, GO, Series 1992A, 6.250% 02/01/11........ Aa1 AA+ $ 1,287 17,845 Washington State, GO, Series 2000A, 5.625% 07/01/21........ Aa1 AA+ 18,286 2,955 Washington State, GO, Unrefunded Balance, Series 1992-93A, 5.750% 10/01/12........ Aa1 AA+ 3,218 3,000 Washington State, Public Power Supply Systems Revenue Refunding, Series 1993B, (FSA Insured), 5.400% 07/01/05........ Aaa AAA 3,160 5,000 Washington State, Public Power Supply Systems Revenue Refunding, Series 1996A, (MBIA Insured), 5.750% 07/01/11........ Aaa AAA 5,309 1,400 Washington State, Public Power Supply Systems Revenue, (Nuclear Project Number 1) Series 1990, 7.250% 07/01/09........ Aa1 AA- 1,590 1,600 Washington State, Public Power Supply Systems Revenue, (Nuclear Project Number 2) Series 1990, 7.250% 07/01/06........ Aa1 AA- 1,788 -------- 106,717 -------- WEST VIRGINIA -- 0.5% 1,450 Jefferson County, West Virginia, Board of Education, GO, Series 1989, (FGIC Insured), 6.850% 07/01/07........ Aaa AAA 1,640 1,560 Jefferson County, West Virginia, Board of Education, GO, Series 1989, (FGIC Insured), 6.850% 07/01/08........ Aaa AAA 1,789 1,000 West Virginia University, State University Systems Revenue, (Marshall University Library Project) Series 1996, (AMBAC Insured), 5.750% 04/01/16........ Aaa AAA 1,036 -------- 4,465 --------
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- WISCONSIN -- 3.3% $ 3,000 Menomonee Falls, Wisconsin, Sewer Systems Revenue, Series 1996A, (AMBAC Insured), 5.650% 05/01/16........ Aaa AAA $ 3,083 2,170 Nekoosa, Wisconsin, PCR, (Nekoosa Papers Inc. Project) Series 1999A, 5.350% 07/01/15........ Baa3 NR 1,924 4,500 Nekoosa, Wisconsin, PCR, (Nekoosa Papers Inc. Project) Series 1999B, 5.500% 07/01/15........ Baa3 NR 4,048 1,000 Wisconsin State, GO Refunding, Series 1993-1, 5.800% 11/01/08........ Aa3 AA 1,089 11,000 Wisconsin State, Health and Educational Facilities Authority, Revenue, (Aurora Health Care Inc. Project) Series 1999A, 5.600% 02/15/29........ NR BBB+ 9,929 3,500 Wisconsin State, Health and Educational Facilities Authority, Revenue, (Aurora Health Care Project) Series 1999B, 5.500% 02/15/15........ NR BBB+ 3,347 5,500 Wisconsin State, Health and Educational Facilities Authority, Revenue, (Aurora Health Care Project) Series 1999B, 5.625% 02/15/20........ NR BBB+ 5,076 -------- 28,496 -------- WYOMING -- 1.5% 2,300 Campbell County, Wyoming, School District Number 001-Gillette, GO, Series 1996, (SCH BD GTY), 5.550% 06/01/06........ Aaa AAA 2,440 10,000 Wyoming, Student Loan Corporation, Revenue Refunding, Series 1999A, 6.250% 06/01/29........ NR AA 10,366 -------- 12,806 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $816,913)....................... 842,737 --------
SEE NOTES TO FINANCIAL STATEMENTS. 136 NATIONS FUNDS Nations Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
SHARES VALUE (000) (000) -------------------------------------------------------------------------------- INVESTMENT COMPANIES -- 1.5% (Cost: $13,373) 13,373 Nations Tax Exempt Fund, Primary A Class#................ $ 13,373 -------- TOTAL INVESTMENTS (Cost $830,286)................................. 98.8% 856,110 -------- OTHER ASSETS AND LIABILITIES (NET)................ 1.2% Receivable for Fund shares sold.......................... $ 849 Dividends receivable..................................... 20 Interest receivable...................................... 13,973 Payable for Fund shares redeemed......................... (493) Investment advisory fee payable.......................... (260) Administration fee payable............................... (148) Shareholder servicing and distribution fees payable...... (19) Distributions payable.................................... (3,462) Accrued Trustees' fees and expenses...................... (49) Accrued expenses and other liabilities................... (197) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................. 10,214 -------- NET ASSETS........................................ 100.0% $866,324 ======== NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 1,982 Accumulated net realized loss on investments sold........ (1,242) Net unrealized appreciation of investments............... 25,824 Paid-in capital.......................................... 839,760 -------- NET ASSETS............................................... $866,324 ======== VALUE -------------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($805,148,722 / 74,310,813 shares outstanding)......... $10.83 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($50,764,581 / 4,686,859 shares outstanding)........... $10.83 ======== Maximum sales charge..................................... 4.75% Maximum offering price per share......................... $11.37 INVESTOR B SHARES: Net asset value and offering price per share** ($9,115,744 / 841,492 shares outstanding).............. $10.83 ======== INVESTOR C SHARES: Net asset value and offering price per share** ($1,294,487 / 119,472 shares outstanding).............. $10.84 ========
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. &Zero coupon security. The rate shown reflects the yield to maturity. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Municipal Income Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): MBIA 12.39% Nations Municipal Income Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Pre-Refunded 17.68% Industrial Development Revenue/ Pollution Control Revenue 10.18% SEE NOTES TO FINANCIAL STATEMENTS. 137 NATIONS FUNDS Nations California Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 97.2% CALIFORNIA -- 90.8% $2,000 ABAG Finance Authority for NonProfit Corporations, California, Multi-Family Revenue Refunding, Series 2000A, AMT, (GTY-AGMT), Mandatory Put 8/15/08 @ 100, 6.400% 08/15/30...... Baa3 BBB- $ 2,156 3,000 Alameda County, California, Certificates of Participation, Refunding, (Santa Rita Jail Project) Series 1993, (MBIA Insured), Prerefunded 12/01/03 @ 102, 5.700% 12/01/14...... Aaa AAA 3,210 5,000 Beverly Hills, California, Public Financing Authority, Lease Revenue, (Capital Imports Project) Series 1998A, 5.000% 06/01/23...... Aa3 AA 4,816 1,185 Bodega Bay, California, Fire Protection District, Certificates of Participation, (Fire Station Project) Series 1996, 6.450% 10/01/31...... NR BBB 1,240 3,000 California Health Facilities Financing Authority, Revenue, (Cedars-Sinai Medical Center) Series 1999A, 6.125% 12/01/19...... A3 NR 3,166 3,000 California Health Facilities Financing Authority, Revenue, (Kaiser Permanente Project) Series 1998A, (FSA Insured), 5.000% 06/01/24...... Aaa AAA 2,857 2,000 California Housing Finance Agency, Home Mortgage Revenue, Series 1994F-3, AMT, (MBIA/FHA/VA Insured), 6.100% 08/01/15...... Aaa AAA 2,033
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- CALIFORNIA -- (CONTINUED) $2,750 California Housing Finance Agency, Home Mortgage Revenue, Series 1997I, AMT, (MBIA Insured), 5.650% 08/01/17...... Aaa AAA $ 2,804 2,740 California Housing Finance Agency, Home Mortgage Revenue, Series 1997I, AMT, (MBIA Insured), 5.750% 02/01/29...... Aaa AAA 2,766 9,690 California Housing Finance Agency, Revenue, Series 2001M, AMT, (FSA Insured), 6.262%& 08/01/32..... Aaa AAA 1,493 2,050 California Housing Finance Agency, Single-Family Mortgage Revenue, Series 1997B-3, Class I, AMT, (FHA Insured), 5.400% 08/01/28...... Aaa AAA 2,005 1,500 California Infrastructure & Economic Development Bank Revenue, (Kaiser Hospital Assistant I-LLC Project) Series 2001A, 5.550% 08/01/31...... NR A 1,469 1,000 California Pollution Control Financing Authority, PCR, (Southern California Edison Company Project) Series 1992B, AMT, 6.400% 12/01/24...... Ba2 BB 946 3,000 California State, Department of Water Resources, Water Systems Revenue, (Center Valley Project) Series 1993L, 5.700% 12/01/16...... Aa2 AA 3,138 3,500 California State, Department of Water Resources, Water Systems Revenue, (Center Valley Project) Series 1997S, 5.000% 12/01/17...... Aa2 AA 3,485 2,000 California State, GO, (For Previous Veterans Project) Series 2000BJ, AMT, 5.650% 12/01/24...... A1 AA- 1,963 2,000 California State, GO, Series 2000, 5.250% 09/01/24...... A1 A+ 1,949
SEE NOTES TO FINANCIAL STATEMENTS. 138 NATIONS FUNDS Nations California Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- CALIFORNIA -- (CONTINUED) $3,000 California State, GO, Series 2000, 5.625% 05/01/26...... A1 A+ $ 3,076 4,000 California State, Public Works Board, Lease Revenue, (Department of Corrections State Prison Project) Series 1993E, 5.500% 06/01/19...... A2 A 4,034 1,500 California Statewide Communities Development Authority, Revenue Certificates of Participation, Series 1993, 5.400% 11/01/15...... A3 NR 1,510 4,000 California, Statewide Communities Development Authority, Apartment Development Revenue Refunding, (Irvine Apartment Communities Project) Series 1998A-4, Mandatory Put 05/15/13 @ 100, 5.250% 05/15/25...... Baa2 BBB 4,000 3,000 California, Statewide Communities Development Authority, Revenue, Certificates of Participation, (John Muir/Mount Diablo Health Systems Project) Series 1997, (MBIA Insured), 5.125% 08/15/17...... Aaa AAA 3,014 1,500 Caochella Valley, California, Park and Recreation District Improvement Board Revenue Refunding, (Reassessment District 94-1-INDIO Project) Series 1994, (MBIA Insured), Prerefunded 09/02/04 @ 102, 6.200% 09/02/16...... Aaa AAA 1,652 1,000 Castaic Lake Water Agency, California, Revenue, Certificates of Participation, Series 2001A, (MBIA Insured), 5.000% 08/01/29...... Aaa AAA 951
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- CALIFORNIA -- (CONTINUED) $1,615 Central Valley Financing Authority, California, Cogeneration Project Revenue Refunding, (Carson Ice-General Project) Series 1998, (MBIA Insured), 5.250% 07/01/12...... Aaa AAA $ 1,695 3,000 Central Valley, California, Financing Authority, Revenue, (Carson Ice Project) Series 1993, 6.000% 07/01/09...... NR BBB 3,100 465 Chino, California, Unified School District, Certificates of Participation, (Land Acquisition Project) Series 1994A, (FSA Insured), Prerefunded 09/01/04 @ 102, 6.600% 09/01/14...... Aaa AAA 516 1,250 Del Mar, California, Race Track Authority, Revenue Refunding, Series 1996, 6.000% 08/15/06...... NR NR 1,292 1,400 Del Mar, California, Race Track Authority, Revenue Refunding, Series 1996, 6.000% 08/15/08...... NR NR 1,475 1,000 Del Mar, California, Race Track Authority, Revenue Refunding, Series 1996, 6.200% 08/15/11...... NR NR 1,053 2,000 East Bay Municipal Utilities District, California, Water Systems Revenue Refunding, Series 1996, (FGIC Insured), 5.000% 06/01/16...... Aaa AAA 2,008 2,750 East Bay Municipal Utilities District, California, Water Systems Revenue, Series 2001, (MBIA Insured), 5.000% 06/01/26...... Aaa AAA 2,642 1,000 Eastern Municipal Water District, California, Water and Sewer Certificates of Participation, Series 1991, (FGIC Insured), 6.750% 07/01/12...... Aaa AAA 1,193
SEE NOTES TO FINANCIAL STATEMENTS. 139 NATIONS FUNDS Nations California Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- CALIFORNIA -- (CONTINUED) $1,500 Elsinore Valley Municipal Water District, California, Certificates of Participation Refunding, Series 1992A, (FGIC Insured), 6.000% 07/01/12...... Aaa AAA $ 1,699 925 Emeryville, California, Public Financing Authority, Revenue, Unrefunded Balance, (Redevelopment Project) Series 1993A, 6.500% 05/01/21...... NR BBB+ 942 1,500 Escondido JT Powers Financing Authority, California, Lease Revenue, (California Center for the Arts Project) Series 1995, (AMBAC Insured), 6.000% 09/01/18...... Aaa AAA 1,623 2,000 Foothill/Eastern Corridor Agency, California, Toll Road Revenue Refunding, Series 1999, 5.750% 01/15/40...... Baa3 BBB- 1,966 2,000 Foothill/Eastern Corridor Agency, California, Toll Road Revenue Refunding, Series 1999, (MBIA Insured), 5.125% 01/15/15...... Aaa AAA 2,049 1,965 Fremont, California, Public Financing Authority, Revenue, (Local Improvement District 39R Project) Series 1996, 6.000% 09/01/11...... NR NR 2,012 5,000 Fresno, California, Sewer Revenue, Series 1993A-1, (AMBAC Insured), 6.250% 09/01/14...... Aaa AAA 5,763 1,000 Industry California Urban Development Agency, Tax Allocation Refunding, (Transportation Distribution Project) Series 1992-3, 6.900% 11/01/16...... NR A- 1,041
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- CALIFORNIA -- (CONTINUED) $2,000 Inland Empire, California, Solid Waste Authority, Revenue, (Landfill Improvement Financing Project) Series 1996B, AMT, (FSA Insured), 6.250% 08/01/11...... Aaa AAA $ 2,221 1,995 Lafayette, California, GO, Series 2002, 5.125% 07/15/25...... NR AA 1,935 3,050 Larkspur, California, School District GO, Series 2000A, 5.250% 08/01/25...... Aa3 AA 3,025 3,000 Long Beach, California, Harbor Revenue, Series 2000A, AMT, 5.375% 05/15/24...... Aa3 AA- 2,945 3,500 Los Angeles County, California, Metropolitan Transportation Authority, Sales Tax Revenue, Series 2000A, (FGIC Insured), 5.250% 07/01/30...... Aaa AAA 3,449 3,000 Los Angeles, California, Convention and Exhibition Center Authority, Lease Revenue Refunding, Series 1993A, (MBIA-IBC Insured), 6.000% 08/15/10...... Aaa AAA 3,362 3,000 Los Angeles, California, Department of Water and Power, Waterworks Revenue, Series 2001A, 5.125% 07/01/41...... Aa3 AA 2,837 2,000 Los Angeles, California, GO, Series 1999B, 5.250% 09/01/14...... Aa2 AA 2,081 3,750 Los Angeles, California, Parking Revenue, Series 1999A, (AMBAC Insured), 5.250% 05/01/29...... Aaa AAA 3,702 1,680 Metropolitan Water District of Southern California, Waterworks Revenue Refunding, Series 1993A, 5.750% 07/01/21...... Aa2 AA 1,811 1,320 Metropolitan Water District of Southern California, Waterworks Revenue, Series 1993A, 5.750% 07/01/21...... Aa2 AA 1,424
SEE NOTES TO FINANCIAL STATEMENTS. 140 NATIONS FUNDS Nations California Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- CALIFORNIA -- (CONTINUED) $2,000 Metropolitan Water District, Southern California, Waterworks Revenue, Series 1997A, 5.000% 07/01/26...... Aa2 AA $ 1,905 2,000 Monterey County, California, Certificates of Participation, Series 2001, 5.000% 08/01/32...... Aaa NR 1,891 1,000 Natomas, California, Unified School District, GO, Series 1993A, (MBIA Insured), 5.750% 09/01/17...... Aaa AAA 1,024 2,500 Northridge Water District, California, Revenue, Certificates of Participation, Series 1996, (AMBAC Insured), 5.250% 02/01/18...... Aaa AAA 2,524 2,095 Oak Park, California, Unified School District, GO, Series 2000, (FSA Insured), 5.184%& 05/01/14..... Aaa AAA 1,129 1,000 Oakland, California, State Building Authority, Lease Revenue, (Elihu M. Harris Project) Series 1998A, (AMBAC Insured), 5.000% 04/01/17...... Aaa AAA 997 1,500 Orange County, California, Airport Revenue Refunding, Series 1997, AMT, (MBIA Insured), 5.500% 07/01/10...... Aaa AAA 1,588 2,500 Pasadena, California, Community Development Commission, Multi- Family Housing Revenue, (Civic Center Project) Series 1991A, AMT, (FSA Insured), 6.400% 12/01/12...... Aaa AAA 2,570 5,000 Port Oakland, California, Port Revenue Refunding, Series 1997H, AMT, (MBIA Insured), 5.500% 11/01/15...... Aaa AAA 5,175
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- CALIFORNIA -- (CONTINUED) $2,500 Poway, California, Certificates of Participation Refunding, (Poinsettia Mobilehome Park Project) Series 1992, (FSA Insured), 6.375% 06/01/18...... Aaa AAA $ 2,567 2,000 Rancho, California, Water District, Financing Authority, Revenue Refunding, Series 1995, (FGIC Insured), 5.900% 11/01/15...... Aaa AAA 2,158 1,300 Riverside, California, Unified School District Election, GO, Series 2002A, (FGIC Insured), 5.000% 02/01/27...... Aaa AAA 1,248 2,000 Sacramento County, California, Financing Authority, Revenue, Series 2001, 5.000% 12/01/26...... Aaa AAA 1,920 2,000 Sacramento County, California, Sanitation District Financing Authority, Revenue, Series 1993, Prerefunded 12/01/18 @ 100, 4.750% 12/01/23...... Aaa AA 1,926 1,000 Sacramento, California, Municipal Utility District Electric Revenue Refunding, Series 2001P, (FSA Insured), 5.250% 08/15/20...... Aaa AAA 1,006 2,900 Sacramento, California, Power Authority Revenue, (Cogeneration Project) Series 1995, 5.875% 07/01/15...... NR BBB- 3,005 2,000 San Diego, California, Special Tax, Community Facilities District No. 1, Series 1995B, Prerefunded 09/01/05 @ 102, 7.000% 09/01/15...... NR NR 2,288 2,000 San Francisco Bay Area, California, Rapid Transportation District, Sales Tax Revenue, Series 2001, (AMBAC Insured), 5.000% 07/01/26...... Aaa AAA 1,921
SEE NOTES TO FINANCIAL STATEMENTS. 141 NATIONS FUNDS Nations California Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- CALIFORNIA -- (CONTINUED) $2,250 San Francisco, California, City and County Airport Commission, International Airport Revenue Refunding, Series 2001-27B, (FGIC Insured), 5.000% 05/01/21...... Aaa AAA $ 2,185 3,000 San Francisco, California, City and County Airport Commission, International Airport Revenue, Series 1996-2-10A, AMT, (MBIA Insured), 5.700% 05/01/26...... Aaa AAA 3,033 1,750 San Joaquin County, California, Certificates of Participation, (Capital Facilities Project) Series 1993, (MBIA Insured), 5.500% 11/15/13...... Aaa AAA 1,904 3,670 San Jose Redevelopment Agency, California, Tax Allocation, (Merged Area Redevelopment Project) Series 1993, (MBIA Insured), 6.000% 08/01/15...... Aaa AAA 4,131 1,000 San Juan, California, M-S-R Public Power Agency, Revenue Refunding, (San Juan Project) Series 2001I, (MBIA Insured), 5.000% 07/01/12...... Aaa AAA 1,039 2,000 San Mateo County, California, JT Powers Authority, Lease Revenue, (Capital Project) Series 1997A, (FSA Insured), 5.125% 07/15/32...... Aaa AAA 1,931 2,000 Saratoga, California, GO, (Saratoga Community Library Project), Series 2001, (MBIA Insured), 5.250% 08/01/31...... Aaa AAA 1,970 1,000 Southern California Rapid Transit District, Certificates of Participation, (Workers Compensation Fund Project) Series 1990, (MBIA Insured), 6.000% 07/01/10...... Aaa AAA 1,023
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- CALIFORNIA -- (CONTINUED) $4,000 Southern California, Public Power Authority, Power Revenue, Series 1989, 6.750% 07/01/13...... A2 A $ 4,714 2,400 Tahoe Truckee, California, Unified School District, GO, District No. 2, Series 1999A, (FGIC Insured), 5.822%& 08/01/24..... Aaa AAA 666 1,780 Tahoe Truckee, California, Unified School District, GO, Series 1999A, (FGIC Insured), 5.802%& 08/01/23..... Aaa AAA 525 1,000 Torrance, California, Hospital Revenue, (Torrance Memorial Medical Center Project) Series 2001A, 5.500% 06/01/31...... A1 A+ 951 1,220 Union City, California, Community Redevelopment Agency, Tax Allocation, (Community Redevelopment Project) Series 1993, (AMBAC Insured), 5.850% 10/01/23...... Aaa AAA 1,254 4,000 University of California, Hospital Revenue, (University of California Medical Center Project) Series 1996, (AMBAC Insured), 5.750% 07/01/24...... Aaa AAA 4,138 3,000 University of California, Hospital Revenue, (University of California Medical Center Project) Series 1996, (AMBAC Insured), 6.000% 07/01/26...... Aaa AAA 3,146 3,000 West Covina, California, Redevelopment Agency, Community Facilities District Special Tax, Refunding, (Fashion Plaza Project) Series 1996, 6.000% 09/01/17...... NR AA 3,269 1,025 Westwood, California, Unified School District, GO, Series 1996, 6.500% 08/01/21...... NR BBB 1,062 -------- 194,377 --------
SEE NOTES TO FINANCIAL STATEMENTS. 142 NATIONS FUNDS Nations California Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- PUERTO RICO -- 6.4% $3,000 Puerto Rico Commonwealth, GO, Public Improvement, Series 2001A, 5.375% 07/01/28...... Baa1 A $ 2,972 1,500 Puerto Rico, Commonwealth Infrastructure Financing Authority, Special Obligation, Series 2000A, 5.500% 10/01/32...... Aaa AAA 1,538 4,000 Puerto Rico, Electric Power Authority, Power Revenue, Series 2000HH, (FSA Insured), 5.250% 07/01/29...... Aaa AAA 3,994 5,000 Puerto Rico, Electric Power Authority, Revenue, 6.000% 07/01/14...... Baa1 A- 5,286 -------- 13,790 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $201,202)....................... 208,167 --------
SHARES VALUE (000) (000) -------------------------------------------------------------------------------- INVESTMENT COMPANIES -- 3.8% (Cost: $8,157) 8,157 Nations Tax Exempt Fund, Primary A Class#................ $ 8,157 -------- TOTAL INVESTMENTS (Cost $209,359*)................................ 101.0% 216,324 -------- OTHER ASSETS AND LIABILITIES (NET)................ (1.0)% Cash..................................................... $ 1 Receivable for Fund shares sold.......................... 187 Dividends receivable..................................... 9 Interest receivable...................................... 2,821 Payable for Fund shares redeemed......................... (4,526) Investment advisory fee payable.......................... (48) Administration fee payable............................... (37) Shareholder servicing and distribution fees payable...... (41) Distributions payable.................................... (478) Accrued Trustees' fees and expenses...................... (38) Accrued expenses and other liabilities................... (81) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................. (2,231) -------- NET ASSETS........................................ 100.0% $214,093 ======== NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 567 Accumulated net realized loss on investments sold........ (74) Net unrealized appreciation of investments............... 6,965 Paid-in capital.......................................... 206,635 -------- NET ASSETS............................................... $214,093 ========
SEE NOTES TO FINANCIAL STATEMENTS. 143 NATIONS FUNDS Nations California Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
VALUE --------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($57,803,451 / 7,942,173 shares outstanding)......................... $7.28 ========== INVESTOR A SHARES: Net asset value and redemption price per share ($145,567,310 / 19,969,549 shares outstanding).................. $7.29 ========== Maximum sales charge................... 4.75% Maximum offering price per share....... $7.65 INVESTOR B SHARES: Net asset value and offering price per share** ($7,457,820 / 1,022,621 shares outstanding).................. $7.29 ========== INVESTOR C SHARES: Net asset value and offering price per share** ($3,264,623 / 449,259 shares outstanding)......................... $7.27 ==========
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. &Zero coupon security. The rate shown reflects the yield to maturity at March 31, 2002. &&Floating rate note. The interest rate shown reflects the rate in effect at March 31, 2002. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations California Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): AMBAC 12.67% MBIA 16.79% Nations California Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Water Revenue 15.00% Lease Revenue 13.70% Electric Revenue 11.14% SEE NOTES TO FINANCIAL STATEMENTS. 144 NATIONS FUNDS Nations Florida Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 97.9% FLORIDA -- 91.2% $2,000 Alachua County, Florida, Health Facilities Authority, Revenue, (Shands Hospital at the University of Florida Project) Series 1992, (MBIA Insured), 6.100% 12/01/05....... Aaa AAA $ 2,052 1,000 Bay County, Florida, PCR Refunding, (International Paper Company Project) Series 1998A, 5.100% 09/01/12....... Baa2 BBB 998 1,000 Bay Medical Center, Florida, Hospital Revenue Refunding, (Bay Medical Center Project) Series 1996, (AMBAC Insured), 5.000% 10/01/05....... Aaa AAA 1,049 2,000 Bay Medical Center, Florida, Hospital Revenue Refunding, (Bay Medical Center Project) Series 1996, (AMBAC Insured), 5.450% 10/01/12....... Aaa AAA 2,088 1,470 Boca Raton, Florida, GO, Series 2000, 5.000% 07/01/13....... Aaa AAA 1,512 2,000 Boca Raton, Florida, Water and Sewer Revenue Refunding, Series 1992, 5.600% 10/01/04....... Aa1 AA+ 2,047 1,000 Brevard County, Florida, Health Facilities Authority, Revenue Refunding, (Wuesthoff Memorial Hospital Project) Series 1996, (MBIA Insured), 6.250% 04/01/06....... Aaa AAA 1,089 2,000 Broward County, Florida, Solid Waste Systems Revenue, Series 1993A, (MBIA Insured), 5.500% 07/01/04....... Aaa AAA 2,100 2,275 Clearwater, Florida, Water and Sewer Authority, Revenue Refunding, Series 1998, (FGIC Insured), 4.964%& 12/01/11...... Aaa AAA 1,416
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $1,000 Clearwater, Florida, Water and Sewer Authority, Revenue Refunding, Series 1998, (FGIC Insured), 5.174%& 12/01/13...... Aaa AAA $ 551 3,000 Clearwater, Florida, Water and Sewer Authority, Revenue, Series 1993, (AMBAC Insured), 5.000% 12/01/02....... Aaa AAA 3,062 2,250 Collier County, Florida, Housing Finance Authority, Multi-Family Housing Revenue, (Goodlette Arms Project) Series 2002A-1, (FNMA COLL), Mandatory Put 02/15/12 @ 100, 4.900% 02/15/32....... Aaa NR 2,252 1,000 Collier County, Florida, Water and Sewer District, Revenue, Series 1992, (FGIC Insured), Prerefunded 07/01/02 @ 102, 6.375% 07/01/10....... Aaa AAA 1,032 1,000 Dade County, Florida, Aviation Revenue Refunding, Series 1994B, AMT, (AMBAC Insured), 6.300% 10/01/05....... Aaa AAA 1,083 3,650 Dade County, Florida, Aviation Revenue, (Miami International Airport Project) Series 1997B, AMT, (FSA Insured), 5.000% 10/01/06....... Aaa AAA 3,770 2,000 Delray Beach, Florida, Water and Sewer Revenue Refunding, Series 1993A, (AMBAC Insured), 5.000% 10/01/02....... Aaa AAA 2,031 1,000 Delray Beach, Florida, Water and Sewer Revenue Refunding, Series 1993A, (AMBAC Insured), 5.000% 10/01/03....... Aaa AAA 1,037 1,565 Dunes, Florida, Community Development District, Revenue Refunding, (Intracoastal Waterway Bridge Project) Series 1993, 5.300% 10/01/03....... NR BBB 1,611
SEE NOTES TO FINANCIAL STATEMENTS. 145 NATIONS FUNDS Nations Florida Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $1,900 Dunes, Florida, Community Development District, Revenue Refunding, (Intracoastal Waterway Bridge Project) Series 1993, 5.400% 10/01/04....... NR BBB $ 1,973 1,770 Duval County, Florida, Housing Finance Authority, Multi-Family Mortgage Revenue Refunding, (The Cove Project) Series 1992, 6.100% 10/01/02....... NR AAA 1,804 1,935 Escambia County, Florida, Housing Finance Authority, Single-Family Mortgage Revenue, (Multi-County Program) Series 2000A, AMT, (MBIA/FHA/VA Insured), 6.300% 10/01/20....... Aaa NR 2,038 1,700 Escambia County, Florida, Utilities Authority, Systems Revenue, Series 1996, (FGIC Insured), 5.625% 01/01/21....... Aaa AAA 1,732 4,000 Florida State, Board of Education, Lottery Revenue, Series 2001B, 5.000% 07/01/20....... Aaa AAA 3,886 1,000 Florida State, Board of Education, Public Education Capital Outlay GO Refunding, Series 1993A, 5.000% 06/01/08....... Aa2 AA+ 1,044 3,000 Florida State, Board of Education, Public Education Capital Outlay GO Refunding, Series 1995A, 5.500% 06/01/14....... Aa2 AA+ 3,082 1,000 Florida State, Board of Education, Public Education Capital Outlay GO, Series 1992C, Prerefunded 06/01/02 @ 101, 6.500% 06/01/11....... Aaa AAA 1,018 4,000 Florida State, Board of Education, Public Education Capital Outlay GO, Series 1993D, 5.200% 06/01/11....... Aa2 AA+ 4,141
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $2,000 Florida State, Board of Education, Public Education Capital Outlay GO, Series 1996A, 5.000% 06/01/18....... Aa2 AA+ $ 1,948 1,500 Florida State, Department of Transportation GO, (Right of Way Bridge Project) Series 1996, 5.375% 07/01/26....... Aa2 AA+ 1,503 1,000 Florida State, Division of Bond Financing, Department of General Services Revenue, (Department of Natural Resources - Preservation 2000 Project) Series 1992A, (AMBAC Insured), Prerefunded 07/01/02 @ 101, 6.250% 07/01/06....... Aaa AAA 1,021 5,495 Florida State, Division of Bond Financing, Department of General Services Revenue, (Department of Natural Resources - Preservation 2000 Project) Series 1993A, (FSA Insured), Prerefunded 07/01/03 @ 101, 5.300% 07/01/06....... Aaa AAA 5,744 3,300 Florida, Capital Trust Agency, Multi-Family Housing Revenue, (Shadow Run Project) Series 2000A, (FNMA COLL), Mandatory Put 11/01/10 @ 100, 5.150% 11/01/30....... Aaa NR 3,316 2,000 Florida, Greater Orlando Aviation Authority, Revenue Refunding, Series 1992B, (FGIC Insured), 6.200% 10/01/03....... Aaa AAA 2,082 4,000 Florida, Housing Finance Agency, Multi-Family Housing Revenue Refunding, (Altamonte Project) Series 1994C, Mandatory Put 12/01/03 @ 100, 7.000% 12/01/24....... NR BBB+ 4,153
SEE NOTES TO FINANCIAL STATEMENTS. 146 NATIONS FUNDS Nations Florida Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $1,000 Florida, Housing Finance Agency, Multi-Family Housing Revenue Refunding, (United Dominion Realty Trust - Andover Project) Series 1996E, AMT, Mandatory Put 05/01/08 @ 100, 6.350% 05/01/26....... NR BBB+ $ 1,042 720 Florida, Housing Finance Agency, Revenue Refunding, (The Vineyards Project) Series 1995H, 5.875% 11/01/05....... NR BBB- 727 1,000 Florida, Housing Finance Agency, Revenue Refunding, (The Vineyards Project) Series 1995H, 6.400% 11/01/15....... NR BBB- 1,013 2,150 Florida, Housing Finance Corporation, Revenue, (Homeowner Mortgage Project) Series 1998-1, (MBIA Insured), 4.950% 07/01/11....... Aaa AAA 2,183 3,000 Florida, Orlando and Orange County Expressway Authority, Revenue Refunding, Senior Lien, Series 1993, (AMBAC Insured), 5.000% 07/01/03....... Aaa AAA 3,094 1,000 Florida, Ports Financing Commission, Revenue, (State Transportation Trust Fund Project) Series 1996, AMT, (MBIA Insured), 5.375% 06/01/16....... Aaa AAA 1,004 1,000 Gainesville, Florida, Utility Systems Revenue, Series 1996A, 5.750% 10/01/07....... Aa3 AA 1,082 2,000 Greater Orlando, Aviation Authority, Revenue Refunding, Series 1992D, (AMBAC Insured), 5.600% 10/01/02....... Aaa AAA 2,036 1,375 Hialeah, Florida, Capital Improvement Revenue, Series 1993, 5.500% 10/01/18....... Baa1 NR 1,349
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $3,170 Hillsborough County, Florida, Aviation Authority, Revenue Refunding, (Tampa International Airport Project) Series 1997A, AMT, (AMBAC Insured), 5.750% 10/01/07....... Aaa AAA $ 3,371 1,000 Hillsborough County, Florida, Capital Improvement Revenue Refunding, (County Center Project) Series 1996B, (MBIA Insured), 5.000% 07/01/11....... Aaa AAA 1,025 2,640 Hillsborough County, Florida, Environmentally Sensitive Lands, Special Tax, Series 1992, (AMBAC Insured), Prerefunded 07/01/02 @ 102, 6.250% 07/01/06....... Aaa AAA 2,723 1,500 Indian River County, Florida, School District, GO Refunding, Series 1993, (FSA Insured), 5.000% 04/01/03....... Aaa AAA 1,542 1,800 Indian River County, Florida, School District, GO Refunding, Series 1993, (FSA Insured), 5.000% 04/01/04....... Aaa AAA 1,871 1,750 Indian River County, Florida, School District, GO Refunding, Series 1993, (FSA Insured), 5.100% 04/01/05....... Aaa AAA 1,812 1,000 Indian River County, Florida, Water and Sewer Revenue Refunding, Series 1993A, (FGIC Insured), 5.200% 09/01/05....... Aaa AAA 1,055 1,800 Jacksonville, Florida, Economic Development Communities Health Care Facilities Revenue, (Mayo Clinic Jacksonville Project) Series 2001A, 5.500% 11/15/36....... VMIG1 AA 1,737 2,000 Jacksonville, Florida, Electric Systems Authority, Revenue Refunding, Series 1995-11, 5.375% 10/01/15....... Aa2 AA 2,030
SEE NOTES TO FINANCIAL STATEMENTS. 147 NATIONS FUNDS Nations Florida Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $1,000 Jacksonville, Florida, Electric Systems Authority, Revenue, Series 1993A, 5.200% 10/01/02....... Aa2 AA $ 1,017 1,000 Jacksonville, Florida, Excise Tax Revenue Refunding, Series 1995A, (FGIC Insured), 5.000% 10/01/09....... Aaa AAA 1,045 4,200 Jacksonville, Florida, Health Facilities Authority, Hospital Revenue, Series 1997B, 5.400% 08/15/18....... Aaa NR 4,300 1,000 Lakeland, Florida, Electricity and Water Revenue Refunding, Series 1990, (AMBAC Insured), 4.545%& 10/01/09...... Aaa AAA 714 2,000 Lakeland, Florida, Electricity and Water Revenue Refunding, Series 1992, 5.625% 10/01/04....... A1 AA- 2,126 2,025 Marion County, Florida, Hospital District, Revenue Refunding, Series 1999, 5.250% 10/01/11....... A2 NR 2,040 1,500 Miami Beach, Florida, GO Refunding, Series 1993, (FGIC Insured), 5.300% 09/01/03....... Aaa AAA 1,559 1,810 Miami Beach, Florida, Water and Sewer Revenue, Series 1995, (FSA Insured), 5.375% 09/01/15....... Aaa AAA 1,850 2,000 Miami, Florida, GO Refunding, Series 1992, (FGIC Insured), 5.600% 12/01/03....... Aaa AAA 2,100 1,500 Miami-Dade County, Florida, Aviation Revenue Refunding, Series 1998A, AMT, 5.250% 10/01/07....... Aaa AAA 1,563 5,365 Miami-Dade County, Florida, Special Obligation Revenue Refunding, Series 1997A, (MBIA Insured), 5.693%& 10/01/19...... Aaa AAA 2,009
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $1,000 Naples, Florida, Water and Sewer Revenue Refunding, Series 1992, (FGIC Insured), 6.400% 09/01/07....... Aaa AAA $ 1,037 1,000 Nassau County, Florida, PCR Refunding, (ITT Rayonier Inc. Project) Series 1992, 6.250% 06/01/10....... Baa2 BBB- 1,003 1,375 Orange County, Florida, Health Facilities Authority, Revenue Refunding, (Lakeside Alternatives, Inc. Project) Series 1995, 6.250% 07/01/05....... NR BBB 1,431 4,640 Orange County, Florida, Health Facilities Authority, Revenue, (Orlando Regional Healthcare Project) Series 1996A, (MBIA Insured), 6.250% 10/01/08....... Aaa AAA 5,190 1,405 Orange County, Florida, Health Facilities Authority, Revenue, Series 1993A, (MBIA Insured), 5.400% 11/01/02....... Aaa AAA 1,434 2,800 Orange County, Florida, Health Facilities Authority, Revenue, Series 1993B, (MBIA Insured), 4.400% 10/01/02....... Aaa AAA 2,834 1,445 Orange County, Florida, Health Facilities Authority, Revenue, Series 1996A, (MBIA Insured), 6.250% 10/01/16....... Aaa AAA 1,654 555 Orange County, Florida, Health Facilities Authority, Revenue, Series 1996A, (MBIA Insured), 6.250% 10/01/16....... Aaa AAA 629 1,520 Orange County, Florida, Housing Finance Authority, Single-Family Mortgage Revenue, Series 1997A, AMT, (GNMA/FNMA COLL), 5.900% 09/01/19....... NR AAA 1,554
SEE NOTES TO FINANCIAL STATEMENTS. 148 NATIONS FUNDS Nations Florida Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $8,000 Orange County, Florida, Tourist Development Tax Revenue Refunding, Series 1998A, (AMBAC Insured), 4.750% 10/01/24....... Aaa AAA $ 7,317 2,000 Orlando and Orange County, Florida, Expressway Authority, Revenue, Junior Lien, Series 1990, (FGIC Insured), 6.500% 07/01/10....... Aaa AAA 2,287 1,000 Orlando, Florida, Greater Orlando Aviation Authority, Airport Facilities Revenue Refunding, Series 1997, AMT, (FGIC Insured), 5.125% 10/01/12....... Aaa AAA 1,007 3,000 Orlando, Florida, Utilities Commission, Water and Electric Revenue Refunding, Series 1992, 5.600% 10/01/03....... Aa1 AA 3,137 2,000 Orlando, Florida, Utilities Commission, Water and Electric Revenue Refunding, Series 1993B, Prerefunded 10/01/03 @ 102, 5.400% 10/01/08....... Aa2 AA- 2,120 5,865 Orlando, Florida, Utilities Commission, Water and Electric Revenue Refunding, Series 2001 5.000% 10/01/09....... Aa1 AA 6,117 2,000 Palm Beach County, Florida, GO Refunding, Series 1998, 5.500% 12/01/11....... Aa1 AAA 2,157 1,750 Palm Beach County, Florida, GO, Series 1994, 6.875% 12/01/03....... Aa1 AAA 1,871 1,300 Palm Beach County, Florida, GO, Series 1994, 7.000% 12/01/04....... Aa1 AAA 1,430 1,000 Palm Beach County, Florida, Health Facilities Authority, Hospital Revenue, (Good Samaritans Health System Project) Series 1993, 6.100% 10/01/05....... Aaa NR 1,057
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $4,280 Palm Beach County, Florida, Housing Finance Authority, Single-Family Mortgage Revenue Refunding, Series 1999A, AMT, (GNMA/FNMA COLL), 4.850% 04/01/32....... Aaa NR $ 4,355 2,000 Palm Beach County, Florida, School District, GO Refunding, Series 1992, (AMBAC Insured), 6.000% 08/01/06....... Aaa AAA 2,047 2,000 Palm Beach County, Florida, Stadium Facilities Revenue, Series 1996, (MBIA Insured), 5.250% 12/01/16....... Aaa AAA 2,028 1,250 Pembroke Pines, Florida, Consolidated Utilities Systems Revenue, Series 1992, (FGIC Insured), 6.250% 09/01/07....... Aaa AAA 1,364 1,400 Pinellas County, Florida, Health Facilities Authority, Hospital Revenue, (Morton Plant Hospital Association Project) Series 1993, (MBIA Insured), 4.900% 11/15/02....... Aaa AAA 1,426 1,000 Pinellas County, Florida, PCR Refunding, (Anclote and Barton Power Plants - Florida Power Corporation Project) Series 1991, 7.200% 12/01/14....... A2 BBB+ 1,024 2,000 Reedy Creek, Florida, GO, Series 1995A, (MBIA Insured), Prerefunded 06/01/05 @ 100, 5.750% 06/01/15....... Aaa AAA 2,137 1,200 Sarasota County, Florida, GO Refunding, Series 1992, (FGIC Insured), 6.100% 10/01/02....... Aaa AAA 1,226 1,650 Sarasota County, Florida, Public Hospital Board, Revenue Refunding, (Sarasota Memorial Hospital Project) Series 1997B, (MBIA Insured), 5.000% 10/01/07....... Aaa NR 1,720
SEE NOTES TO FINANCIAL STATEMENTS. 149 NATIONS FUNDS Nations Florida Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $1,750 Sarasota County, Florida, Public Hospital Board, Revenue Refunding, (Sarasota Memorial Hospital Project) Series 1998B, (MBIA Insured), 5.250% 07/01/11....... Aaa AAA $ 1,836 1,000 Sarasota, Florida, Water and Sewer Utility Revenue Refunding, Series 1992, (FGIC Insured), 6.000% 10/01/02....... Aaa AAA 1,021 1,000 South Broward, Florida, Hospital District, Revenue, Series 2002, 5.500% 05/01/22....... A1 A+ 972 3,000 South Broward, Florida, Hospital District, Revenue, Series 2002, 5.600% 05/01/27....... A1 A+ 2,929 2,000 St. Lucie County, Florida, School District, GO Refunding, Series 1992, (AMBAC Insured), 6.000% 07/01/03....... Aaa AAA 2,060 1,000 St. Lucie County, Florida, School District, GO, Series 1997, (FGIC Insured), 5.875% 02/01/07....... Aaa AAA 1,080 1,000 Tallahassee, Florida, Health Facilities Revenue Refunding, (Tallahassee Memorial Regional Medical Center Project) Series 1992A, (MBIA Insured), 5.750% 12/01/04....... Aaa AAA 1,044 1,000 Tallahassee, Florida, Health Facilities Revenue Refunding, (Tallahassee Memorial Regional Medical Center Project) Series 1992B, (MBIA Insured), 5.750% 12/01/04....... Aaa AAA 1,044 1,000 Tampa, Florida, Capital Improvement Authority, Hospital Revenue, (H. Lee Moffitt Cancer Project) Series 1999A, 4.875% 07/01/13....... A3 A 954 2,000 Tampa, Florida, Health Systems Revenue, (Catholic Health Project) Series 1998A-1, (MBIA Insured), 4.875% 11/15/15....... Aaa AAA 1,941
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- FLORIDA -- (CONTINUED) $3,170 Tampa, Florida, Sports Authority, Local Optional Sales Tax Revenue, (Stadium Project) Series 1997, (MBIA Insured), 6.000% 01/01/07....... Aaa AAA $ 3,438 3,000 Tampa, Florida, Tax Allocation, (Cigarette - H. Lee Moffitt Cancer Project) Series 1999, (AMBAC Insured), 5.000% 03/01/07....... Aaa AAA 3,130 1,000 Tampa, Florida, Water and Sewer Revenue, Series 1993A, (FGIC Insured), 5.000% 10/01/02....... Aaa AAA 1,016 1,025 Venice, Florida, Health Facilities Revenue, (Venice Hospital Inc. Project) Series 1994, 5.300% 12/01/02....... Aaa NR 1,048 -------- 208,390 -------- GEORGIA -- 0.8% 2,000 Effingham County, Georgia, Development Authority, Solid Waste Disposal Revenue, (Fort James Corporation Project) Series 1998, AMT, 5.625% 07/01/18....... Baa3 BBB- 1,780 -------- ILLINOIS -- 0.5% 1,620 Champaign County, Illinois, Community Unit School District No. 116 Urbana, GO, Series 1999C, (FGIC Insured), 4.845%& 01/01/10...... Aaa AAA 1,118 -------- SOUTH CAROLINA -- 1.5% 1,000 Calhoun County, South Carolina, Solid Waste Disposal Facility Revenue, (Carolina Eastman Company Project) Series 1992, AMT, 6.750% 05/01/17....... A2 A- 1,162 2,700 South Carolina State, Capital Improvement, GO, Series 2001A, 3.500% 01/01/16....... Aaa AAA 2,272 -------- 3,434 --------
SEE NOTES TO FINANCIAL STATEMENTS. 150 NATIONS FUNDS Nations Florida Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- 2.0% $2,000 Dallas-Fort Worth, Texas, International Airport Facilities Improvement, Corporate Revenue Refunding, (American Airlines Project) Series 2000C, AMT, Mandatory Put 11/01/07 @ 100, 6.150% 05/01/29....... B1 BB $ 1,875 4,000 Texas State, Turnpike Authority, Dallas North Tollway Revenue, (President George Bush Turnpike Project) Series 1996, (AMBAC Insured), 4.965%& 01/01/11...... Aaa AAA 2,604 -------- 4,479 -------- VIRGINIA -- 1.9% 4,180 Arlington County, Virginia, Industrial Development Authority, Hospital Facility Revenue, (Virginia Hospital Arlington Health Systems Project), Series 2001, 5.500% 07/01/14....... A2 NR 4,253 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $217,551)...................... 223,454 -------- SHARES VALUE (000) (000) --------------------------------------------------------------- INVESTMENT COMPANIES -- 0.9% (Cost: 2,140) 2,140 Nations Tax Exempt Fund, Primary A Class#................................ $ 2,140 --------
TOTAL INVESTMENTS (Cost $219,691*)................................ 98.8% 225,594 -------- OTHER ASSETS AND LIABILITIES (NET)................ 1.2% Receivable for Fund shares sold.......................... $ 81 Dividends receivable..................................... 3 Interest receivable...................................... 4,088 Payable for Fund shares redeemed......................... (423) Investment advisory fee payable.......................... (37) Administration fee payable............................... (39) Shareholder servicing and distribution fees payable...... (8) Distributions payable.................................... (865) Accrued Trustees' fees and expenses...................... (47) Accrued expenses and other liabilities................... (73) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................. 2,680 -------- NET ASSETS........................................ 100.0% $228,274 ======== NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 211 Accumulated net realized loss on investments sold........ (1,048) Net unrealized appreciation of investments............... 5,903 Paid-in capital.......................................... 223,208 -------- NET ASSETS............................................... $228,274 ========
SEE NOTES TO FINANCIAL STATEMENTS. 151 NATIONS FUNDS Nations Florida Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002 VALUE -------------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($211,928,277 / 20,083,768 shares outstanding)......... $10.55 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($8,529,385 / 808,950 shares outstanding).............. $10.54 ======== Maximum sales charge..................................... 3.25% Maximum offering price per share......................... $10.90 INVESTOR B SHARES: Net asset value and offering price per share** ($5,700,104 / 540,135 shares outstanding).............. $10.55 ======== INVESTOR C SHARES: Net asset value and offering price per share** ($2,116,310 / 200,346 shares outstanding).............. $10.56 ========
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. &Zero coupon security. The rate shown reflects the yield to maturity. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Florida Intermediate Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): AMBAC 18.08% MBIA 18.34% Nations Florida Intermediate Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Pre-Refunded 15.22% Hospital Revenue 14.31% Transportation Revenue 11.95% Housing Revenue 10.70% SEE NOTES TO FINANCIAL STATEMENTS. 152 NATIONS FUNDS Nations Florida Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) ---------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 98.2% FLORIDA -- 90.2% $ 735 Alachua County, Florida, Health Facilities Authority, Revenue Refunding, (Santa Fe Healthcare Facilities, Inc. Project) Series 1993, 6.000% 11/15/09....... Baa1 AAA $ 785 1,000 Alachua County, Florida, Health Facilities Authority, Revenue, (Shands Teaching Hospital/Clinic Project) Series 1996A, (MBIA Insured), 5.000% 12/01/04....... Aaa AAA 1,049 3,375 Bay County, Florida, PCR Refunding, (International Paper Company Project) Series 1998A, 5.100% 09/01/12....... Baa2 BBB 3,367 2,550 Brevard County, Florida, Health Facilities Authority, Revenue, (Holmes Regional Medical Center, Inc. Project) Series 1996, (MBIA Insured), 5.625% 10/01/14....... Aaa AAA 2,650 1,000 Canaveral, Florida, Port Authority, Port Improvement Revenue Refunding, Series 1996B, (FGIC Insured), 5.700% 06/01/13....... Aaa AAA 1,052 2,250 Charlotte County, Florida, Utility Revenue Refunding, Series 1996A, (FGIC Insured), 5.625% 10/01/16....... Aaa AAA 2,346 5,175 Collier County, Florida, Health Facilities Authority, Revenue Refunding, (Moorings, Inc. Project) Series 1994, 7.000% 12/01/19....... NR A- 5,392 1,000 Collier County, Florida, Housing Finance Authority, Multi-Family Housing Revenue, (Goodlette Arms Project) Series 2002A-1, (FNMA COLL), Mandatory Put 02/15/12 @ 100, 4.900% 02/15/32....... Aaa NR 1,001
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) ---------------------------------------------------------------- FLORIDA -- (CONTINUED) $2,500 Dade County, Florida, Aviation Revenue, Series 1996A, AMT, (MBIA Insured), 5.750% 10/01/12....... Aaa AAA $ 2,606 1,975 Escambia County, Florida, Housing Finance Authority, Single-Family Mortgage Revenue, (Multi-County Program) Series 2000A, AMT, (MBIA/FHA/VA Insured), 6.300% 10/01/20....... Aaa NR 2,080 3,000 Florida State, Board of Education, Capital Outlay GO, Series 1997A, 5.000% 01/01/17....... Aa2 AA+ 2,957 1,000 Florida State, Board of Education, Lottery Revenue, Series 2001B, 5.000% 07/01/20....... Aaa AAA 972 1,000 Florida State, Board of Education, Public Education Capital Outlay GO Refunding, Series 1993A, 5.000% 06/01/08....... Aa2 AA+ 1,044 2,500 Florida State, Board of Education, Public Education Capital Outlay GO, Series 1996A, 5.250% 06/01/16....... Aa2 AA+ 2,526 1,000 Florida State, Board of Education, Public Education Capital Outlay GO, Series 1996A, 5.000% 06/01/18....... Aa2 AA+ 974 1,000 Florida, Capital Trust Agency, Multi-Family Housing Revenue, (Shadow Run Project) Series 2000A, (FNMA COLL), Mandatory Put 11/01/10 @ 100, 5.150% 11/01/30....... Aaa NR 1,005 2,935 Florida, Housing Finance Agency, Revenue, (Homeowner Mortgage Project) Series 1997-2, AMT, (MBIA Insured), 5.750% 07/01/14....... Aaa AAA 3,026
SEE NOTES TO FINANCIAL STATEMENTS. 153 NATIONS FUNDS Nations Florida Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) ---------------------------------------------------------------- FLORIDA -- (CONTINUED) $1,560 Florida, Housing Finance Agency, Revenue, (Homeowner Mortgage Project) Series 1998-1, (MBIA Insured), 4.950% 01/01/11....... Aaa AAA $ 1,584 3,000 Gainesville, Florida, Utility Systems Revenue, Series 1992B, 6.500% 10/01/11....... Aa3 AA 3,465 5,000 Jacksonville, Florida, Sales Tax Revenue, (River City Renaissance Project) Series 1995, (FGIC Insured), Prerefunded 10/01/05 @ 101, 5.650% 10/01/14....... Aaa AAA 5,398 3,000 Jacksonville, Florida, Sales Tax Revenue, (River City Renaissance Project) Series 1995, (FGIC Insured), Prerefunded 10/01/05 @ 101, 5.375% 10/01/18....... Aaa AAA 3,212 2,430 Leon County, Florida, Capital Improvement Revenue, Series 1997, (AMBAC Insured), 5.250% 10/01/17....... Aaa AAA 2,443 2,300 Martin County, Florida, Industrial Development Authority, Revenue, (Indiantown Cogeneration Project) Series 1995B, AMT, 8.050% 12/15/25....... Baa3 BBB- 2,398 2,370 Miami Beach, Florida, Water and Sewer Revenue, Series 1995, (FSA Insured), 5.375% 09/01/15....... Aaa AAA 2,423 3,500 Miami-Dade County, Florida, Aviation Revenue, Series 1998C, AMT, (MBIA Insured), 5.250% 10/01/15....... Aaa AAA 3,510 2,000 North Broward, Florida, Hospital District, Revenue Refunding, Series 1997, (MBIA Insured), 5.250% 01/15/17....... Aaa AAA 2,012
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) ---------------------------------------------------------------- FLORIDA -- (CONTINUED) $5,000 Okaloosa County, Florida, Gas Distribution Revenue Refunding, Series 1994, (MBIA Insured), Prerefunded 10/01/04 @ 102, 6.875% 10/01/19....... Aaa AAA $ 5,553 1,260 Orange County, Florida, Health Facilities Authority, Revenue, Unrefunded Balance Series 1996A, (MBIA Insured), 6.250% 10/01/16....... Aaa AAA 1,428 3,260 Orange County, Florida, Health Facilities Authority, Revenue, Series 1996A, (MBIA Insured), 6.250% 10/01/16....... Aaa AAA 3,731 3,000 Orange County, Florida, Tourist Development Tax Revenue Refunding, Series 1998A, (AMBAC Insured), 4.750% 10/01/24....... Aaa AAA 2,744 1,000 Orange County, Florida, Tourist Development Tax Revenue, Series 1994B, (MBIA Insured), Prerefunded 10/01/04 @ 102, 6.000% 10/01/14....... Aaa AAA 1,090 2,950 Orlando, Florida, Greater Orlando Aviation Authority, Airport Facilities Revenue, Series 1999A, AMT, (FGIC Insured), 5.250% 10/01/10....... Aaa AAA 3,040 1,800 Orlando, Florida, Utilities Commission, Water and Electric Utilities Revenue Refunding, Series 1989D, 6.750% 10/01/17....... Aa2 AA- 2,134 1,500 Orlando, Florida, Utilities Commission, Water and Electric Utilities Revenue Refunding, Series 1994A, 5.000% 10/01/20....... Aa2 AA- 1,451 1,000 Osceola County, Florida, Health Facilities Authority, Revenue Refunding, (Evangelical Lutheran Good Samaritan Society Project) Series 1994, (AMBAC Insured), 6.000% 05/01/10....... Aaa AAA 1,067
SEE NOTES TO FINANCIAL STATEMENTS. 154 NATIONS FUNDS Nations Florida Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) ---------------------------------------------------------------- FLORIDA -- (CONTINUED) $1,500 Palm Beach County, Florida, Health Facilities Authority, Hospital Revenue, (Good Samaritans Health System Project) Series 1993, Prerefunded 10/01/05 @ 100, 6.200% 10/01/11....... Aaa NR $ 1,587 980 Palm Beach County, Florida, Housing Finance Authority, Single-Family Mortgage Revenue Refunding, Series 1999A, AMT, (GNMA/FNMA COLL), 4.850% 04/01/32....... Aaa NR 997 5,065 Palm Beach County, Florida, Solid Waste Authority, Revenue, Unrefunded Balance, Series 1997A, (AMBAC Insured), 6.000% 10/01/10....... Aaa AAA 5,602 2,000 Pensacola, Florida, Airport Revenue, Series 1997B, AMT, (MBIA Insured), 5.625% 10/01/14....... Aaa AAA 2,066 4,000 Pinellas County, Florida, Capital Improvement Revenue, Series 2000, 4.500% 01/01/06....... Aa3 AA- 4,110 1,000 Polk County, Florida, Industrial Development Authority, Solid Waste Disposal Facilities Revenue, (Tampa Electric Company Project) Series 1996, AMT, 5.850% 12/01/30....... Aa3 A1 1,010 1,000 South Broward, Florida, Hospital District, Revenue, Series 2002, 5.600% 05/01/27....... A1 A+ 976 4,000 South Miami, Florida, Health Facilities Authority, Hospital Revenue Refunding, (Baptist Health Systems Obligation Group Project) Series 1995, (MBIA Insured), 5.375% 10/01/16....... Aaa AAA 4,070
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) ---------------------------------------------------------------- FLORIDA -- (CONTINUED) $2,500 Sunrise Lakes, Florida, Phase 4 Recreational District, GO, Series 1995A, Prerefunded 08/01/05 @ 102, 6.750% 08/01/24....... NR BBB- $ 2,793 1,000 Tampa, Florida, Sports Authority, Local Optional Sales Tax Revenue, (Stadium Project) Series 1997, (MBIA Insured), 5.125% 01/01/12....... Aaa AAA 1,031 2,000 Tampa, Florida, Sports Authority, Local Optional Sales Tax Revenue, (Stadium Project) Series 1997, (MBIA Insured), 5.250% 01/01/17....... Aaa AAA 2,021 2,500 Tampa, Florida, Sports Authority, Sales Tax Revenue, (Tampa Bay Arena Project) Series 1995, (MBIA Insured), 5.750% 10/01/15....... Aaa AAA 2,724 1,000 Tampa, Florida, Tax Allocation, (H-Lee Moffitt Cancer Project) Series 1999, (AMBAC Insured), 4.875% 03/01/06....... Aaa AAA 1,041 1,000 Volusia County, Florida, Educational Facilities Authority, Educational Facilities Revenue, (Embry-Riddle Aeronautical University Project) Series 1996A, 6.125% 10/15/26....... Baa2 NR 1,025 2,380 Volusia County, Florida, Educational Facilities Authority, Educational Facilities Revenue, (Embry-Riddle Aeronautical University Project) Series 1999A, 5.750% 10/15/29....... Baa2 NR 2,338 -------- 116,906 -------- GUAM -- 2.6% 3,000 Guam, Power Authority, Revenue, Series 1994A, Prerefunded 10/01/04 @ 102, 6.750% 10/01/24....... NR AAA 3,336 --------
SEE NOTES TO FINANCIAL STATEMENTS. 155 NATIONS FUNDS Nations Florida Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) ---------------------------------------------------------------- LOUISIANA -- 0.8% $1,000 Calcasieu Parish, Lousiana, Industrial Development Board, PCR Refunding, (Occidental Petroleum Project) Series 2001, 4.800% 12/01/06....... Baa2 BBB $ 1,024 -------- PUERTO RICO -- 4.6% 4,190 Puerto Rico Commonwealth, GO, Series 1997, (MBIA Insured), 6.500% 07/01/15....... Aaa AAA 4,946 1,000 Puerto Rico, Industrial Tourist Educational Medical and Environmental Authority, Control Facilities Hospital Revenue, (Hospital Auxilio Mutuo Obligation Group Project) Series 1995A, (MBIA Insured), 6.250% 07/01/16....... Aaa AAA 1,077 -------- 6,023 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $119,583)............... 127,289 -------- SHARES VALUE (000) (000) ---------------------------------------------------------------- INVESTMENT COMPANIES -- 0.3% (Cost: $403) 403 Nations Tax Exempt Fund, Primary A Class#................................. $ 403 -------- TOTAL INVESTMENTS (Cost $119,986*)............... 98.5% 127,692 -------- OTHER ASSETS AND LIABILITIES (NET).......................... 1.5% Cash..................................... $ 1 Receivable for Fund shares sold.......... 126 Dividends receivable..................... 1 Interest receivable...................... 2,737 Payable for Fund shares redeemed......... (352) Investment advisory fee payable.......... (26) Administration fee payable............... (22) Shareholder servicing and distribution fees payable........................... (19) Distributions payable.................... (416) Accrued Trustees' fees and expenses...... (46) Accrued expenses and other liabilities... (60) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET).................................. 1,924 -------- NET ASSETS....................... 100.0% $129,616 ======== NET ASSETS CONSIST OF: Undistributed net investment income...... $ 322 Accumulated net realized gain on investments sold....................... 435 Net unrealized appreciation of investments............................ 7,706 Paid-in capital.......................... 121,153 -------- NET ASSETS............................... $129,616 ========
SEE NOTES TO FINANCIAL STATEMENTS. 156 NATIONS FUNDS Nations Florida Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
VALUE ---------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($75,300,079 / 7,673,891 shares outstanding).......... $9.81 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($43,618,733 / 4,445,108 shares outstanding)........................... $9.81 ======== Maximum sales charge..................... 4.75% Maximum offering price per share......... $10.30 INVESTOR B SHARES: Net asset value and offering price per share** ($10,419,286 / 1,062,085 shares outstanding)........................... $9.81 ======== INVESTOR C SHARES: Net asset value and offering price per share** ($278,270 / 28,385 shares outstanding)........................... $9.80 ========
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Florida Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): FGIC 11.61% MBIA 37.23% Nations Florida Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Pre-Refunded 21.21% Hospital Revenue 13.66% SEE NOTES TO FINANCIAL STATEMENTS. 157 NATIONS FUNDS Nations Georgia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 97.8% GEORGIA -- 94.0% $1,000 Alpharetta, Georgia, GO, Series 1992, 6.000% 05/01/03....... Aa2 AA $ 1,040 1,000 Atlanta, Georgia, Airport Facilities Revenue Refunding, Series 1996, (AMBAC Insured), 5.000% 01/01/03....... Aaa AAA 1,021 1,000 Atlanta, Georgia, Airport Facilities Revenue Refunding, Series 1996, (AMBAC Insured), 6.000% 01/01/03....... Aaa AAA 1,029 3,500 Atlanta, Georgia, Airport Facilities Revenue Refunding, Series 2000A, (FGIC Insured), 5.600% 01/01/30(a).... Aaa AAA 3,560 2,000 Atlanta, Georgia, Urban Residential Finance Authority, Multi-Family Revenue Refunding, (Housing City Plaza Project) Series 1998, AMT, (FNMA COLL), Mandatory Put 12/01/08 @ 100, 4.550% 12/01/28....... NR AAA 1,939 940 Atlanta, Georgia, Water and Wastewater, Revenue, Series 1999A, (FGIC Insured), 5.000% 11/01/38....... Aaa AAA 872 1,060 Atlanta, Georgia, Water and Wastewater, Revenue, Unrefunded Balance, Series 1999A, (FGIC Insured), Prerefunded 05/01/09 @ 101, 5.000% 11/01/38....... Aaa AAA 1,113 2,750 Bibb County, Georgia, GO, Series 1993, 5.500% 01/01/08....... Aa3 AA 2,862 1,000 Brunswick and Glynn County, Georgia, Development Authority, Revenue Refunding, (Georgia-Pacific Corporation Project) Series 1998, AMT, 5.550% 03/01/26....... Baa3 NR 849 1,500 Burke County, Georgia, Development Authority, PCR, (Oglethorpe Power Corporation Project) Series 1994B, 4.700% 01/01/04....... A3 A 1,532
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $2,500 Cartersville, Georgia, Development Authority, Sewer Facilities Revenue Refunding, (Anheuser-Busch Companies, Inc. Project) Series 1997, AMT, 5.625% 05/01/09....... A1 A+ $ 2,607 2,000 Chatham County, Georgia, Hospital Medical Authority, Revenue, (Memorial Health Medical Center Project) Series 2001A, 6.125% 01/01/24....... A3 A- 2,032 1,000 Cherokee County, Georgia, School System GO Refunding, Series 1992, 5.900% 06/01/02....... A2 NR 1,007 1,000 Cherokee County, Georgia, School System GO, Series 1993, (AMBAC Insured), 5.875% 02/01/09....... Aaa AAA 1,085 640 Cherokee County, Georgia, Water and Sewer Authority, Revenue Refunding, Series 1993, (MBIA Insured), 5.300% 08/01/09....... Aaa AAA 676 1,000 Clarke County, Georgia, Hospital Authority, Revenue, (Athens Regional Medical Center Project) Series 1993, (MBIA Insured), Prerefunded 01/01/03 @ 102, 5.750% 01/01/08....... Aaa AAA 1,047 1,000 Clarke County, Georgia, School District, GO Refunding, Series 1993, (FGIC Insured), 5.100% 07/01/04....... Aaa AAA 1,044 2,000 Clayton County, Georgia Housing Authority, Multifamily Housing Revenue Refunding, (Tara Court II Apartments Project) Series 2001, (FNMA Liquidity Facility), Mandatory Put 12/01/11 @ 100, 4.350% 12/01/31....... NR AAA 1,946
SEE NOTES TO FINANCIAL STATEMENTS. 158 NATIONS FUNDS Nations Georgia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $3,190 Clayton County, Georgia, Hospital Authority, Revenue Anticipation Certificates, (Southern Regional Medical Center Project) Series 1998A, (MBIA Insured), 5.250% 08/01/09....... Aaa AAA $ 3,344 1,000 Clayton County, Georgia, Water and Sewer Authority, Revenue Refunding, Series 1993, (MBIA Insured), 5.400% 05/01/07....... Aaa AAA 1,047 2,000 Clayton County, Georgia, Water and Sewer Authority, Revenue, Series 2000, 6.250% 05/01/17....... Aa3 AA 2,212 2,000 Cobb County and Marietta, Georgia, Water Authority, Revenue Refunding, Series 1993, 5.000% 11/01/03....... Aa1 AA 2,075 1,000 Cobb County, Georgia, Detention Buildings and Facilities GO, Series 1993, 5.300% 01/01/08....... Aaa AAA 1,028 1,200 Cobb County, Georgia, Kennestone Hospital Authority, Revenue, Series 1992A, 5.600% 04/01/05....... Aa2 AA- 1,226 1,000 Cobb County, Georgia, Kennestone Hospital Authority, Revenue, Series 1992A, 5.700% 04/01/06....... Aa2 AA- 1,021 2,000 Cobb County, Georgia, School District, GO, Series 1991B, 6.150% 02/01/03....... Aa1 AA 2,068 2,000 Cobb County, Georgia, School District, GO, Series 1995, 4.800% 02/01/04....... Aa1 AA 2,065 1,000 Cobb County, Georgia, Water and Sewer Authority, Revenue Refunding, Series 1993A, 5.400% 07/01/08....... Aaa AAA 1,033 2,250 Columbus, Georgia, Water and Sewer Authority, Revenue Refunding, Series 1992, (FGIC Insured), 6.000% 05/01/03....... Aaa AAA 2,335
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $1,000 Columbus, Georgia, Water and Sewer Authority, Revenue Refunding, Series 1993, 5.100% 05/01/03....... A1 A+ $ 1,028 525 Dalton, Georgia, Building Authority, Revenue, Series 1993, 5.000% 07/01/02....... Aa3 NR 529 1,500 Dalton, Georgia, Multiple Utilities Revenue Refunding, Series 1997, (MBIA Insured), 4.450% 01/01/03....... Aaa AAA 1,527 4,000 DeKalb County, Georgia, Development Authority, Revenue, (Emory University Project) Series 1994A, 6.000% 10/01/14....... Aa1 AA 4,276 1,000 DeKalb County, Georgia, School District, GO Refunding, Series 1993, 5.000% 07/01/03....... Aa2 AA 1,031 1,000 Downtown Savannah Authority, Georgia, Revenue Refunding, (Chatham County Project) Series 1993A, 5.000% 01/01/11....... A1 AA 1,017 2,490 East Point, Georgia, Building Authority, Revenue, Series 2000, (FSA Insured), 5.606%& 02/01/18...... Aaa AAA 1,017 4,440 Effingham County, Georgia, Development Authority, Solid Waste Disposal Revenue, (Fort James Corporation Project) Series 1998, AMT, 5.625% 07/01/18....... Baa3 BBB- 3,951 1,000 Forsyth County, Georgia, School District, GO, Series 1999, 6.000% 02/01/15....... Aa2 AA- 1,098 1,000 Fulco, Georgia, Hospital Authority, Revenue Anticipation Certificates, (Georgia Baptist Health Care Project) Series 1992A, Prerefunded 09/01/02 @ 102, 6.000% 09/01/03....... Baa1 NR 1,036
SEE NOTES TO FINANCIAL STATEMENTS. 159 NATIONS FUNDS Nations Georgia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $2,000 Fulco, Georgia, Hospital Authority, Revenue Anticipation Certificates, (St. Joseph Hospital Project) Series 1994, 4.900% 10/01/03....... Aaa NR $ 2,067 1,000 Fulco, Georgia, Hospital Authority, Revenue Anticipation Certificates, (St. Joseph Hospital Project) Series 1994, 5.500% 10/01/14....... Aaa NR 1,056 2,000 Fulco, Georgia, Hospital Authority, Revenue Anticipation Certificates, Health Systems Revenue, (Catholic Health East Project) Series 1998A, (MBIA Insured), 4.600% 11/15/09....... Aaa AAA 2,010 1,000 Fulton and DeKalb Counties, Georgia, Hospital Authority, GO Refunding Certificates, (Grady Memorial Hospital Project) Series 1993, (MBIA Insured), 5.250% 01/01/04....... Aaa AAA 1,036 1,025 Fulton County, Georgia, Building Authority, Revenue, (County Government and Health Facilities Project) Series 1992A, 5.700% 01/01/04....... Aa3 AA 1,070 500 Fulton County, Georgia, Development Authority, Revenue, (Clark Atlanta University Project) Series 1995, (CONNIE LEE Insured), 5.125% 01/01/10....... NR AAA 517 1,735 Fulton County, Georgia, Development Authority, Revenue, (Georgia Tech Foundation Facilities Project) Series 1997A, 5.000% 09/01/17....... Aa1 AA+ 1,713 2,900 Fulton County, Georgia, Housing Authority, Multi-Family Housing Revenue, (Concorde Place Apartments Project) Series 1996A, AMT, Prerefunded 07/01/08 @100, 6.375% 01/01/27....... NR AAA 3,207
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $1,500 Fulton County, Georgia, School District, GO Refunding, Series 1991, 6.250% 05/01/04....... Aa2 AA $ 1,598 1,000 Gainesville & Hall County, Georgia, Hospital Authority, Revenue Anticipation Certificates, (Northeast Georgia Health System Incorporated Project) Series 2001, 5.000% 05/15/15....... NR A- 946 2,000 Gainesville & Hall County, Georgia, Hospital Authority, Revenue Anticipation Certificates, (Northeast Georgia Health System Incorporated Project) Series 2001, 5.250% 05/15/18....... NR A- 1,896 1,500 Georgia State, GO Refunding, Series 1992A, 6.250% 03/01/06....... Aaa AAA 1,636 1,200 Georgia State, GO, Series 1992B, 6.000% 03/01/04....... Aaa AAA 1,268 2,750 Georgia State, GO, Series 1993C, 6.500% 07/01/05....... Aaa AAA 3,001 2,000 Georgia State, GO, Series 1999D, 5.800% 11/01/13....... Aaa AAA 2,184 765 Georgia State, Housing and Finance Authority, Revenue, (Home Ownership Program) Series 1992B, AMT, 6.600% 06/01/25....... NR AA+ 782 1,000 Georgia State, Tollway Authority, Revenue Refunding, (Georgia 400 Project) Series 1998, 5.000% 07/01/07....... Aaa AAA 1,045 3,880 Georgia, George L. Smith II World Congress Center Authority, Revenue Refunding, (Domed Stadium Project) Series 2000, AMT, (MBIA Insured), 6.000% 07/01/05....... Aaa AAA 4,130 1,500 Georgia, Municipal Gas Authority, Gas Tax Revenue, (Southern Storage Gas Project) Series 1994, 6.000% 07/01/04....... NR A- 1,586
SEE NOTES TO FINANCIAL STATEMENTS. 160 NATIONS FUNDS Nations Georgia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $1,000 Griffin-Spalding County, Georgia, School System, GO, Series 1996, (State Aid Withholding, FSA Insured), 5.250% 02/01/10....... Aaa AAA $ 1,020 1,000 Hall County, Georgia, School District, GO Refunding, Series 1992B, 6.300% 12/01/05....... A1 NR 1,092 2,000 Hall County, Georgia, School District, GO, Series 1994, (AMBAC Insured), Prerefunded 12/01/04 @ 102, 6.700% 12/01/14....... Aaa AAA 2,222 1,000 Henry City and County, Georgia, Water and Sewer Authority, Improvement Revenue Refunding, Series 1993A, 5.000% 02/01/07....... A2 NR 1,027 1,550 Henry County, Georgia, Hospital Authority, Revenue, (Henry Medical Center Project) Series 1997, (AMBAC Insured), Prerefunded 07/01/07 @ 102, 5.250% 07/01/09....... Aaa AAA 1,657 2,000 Henry County, Georgia, Hospital Authority, Revenue, (Henry Medical Center Project) Series 1997, (AMBAC Insured), 6.000% 07/01/29....... Aaa AAA 2,134 1,000 Henry County, Georgia, School District, GO, Series 1992A, 5.700% 08/01/02....... Aa3 AA- 1,013 2,000 Houston County, Georgia, School District, GO, Series 1996, (State Aid Withholding, MBIA Insured), 5.500% 03/01/16....... Aaa AAA 2,029 2,000 Houston County, Georgia, School District, GO, Series 2002, (State Aid Withholding), 4.000% 09/01/06....... Aa2 AA 2,017 1,000 Macon, Georgia, Water Authority, Water and Sewer Revenue Refunding, Series 1994A, 4.700% 10/01/04....... Aa3 AA- 1,038
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $1,000 Macon-Bibb County, Georgia, Industrial Authority, Industrial Revenue, (Weyerhaeuser Company Project) Series 1982, 9.000% 10/01/07....... Baa2 BBB $ 1,234 1,000 Meriwether County, Georgia, School District, GO, Series 1996, (State Aid Withholding, FSA Insured), 5.500% 02/01/16....... Aaa AAA 1,032 3,000 Metropolitan Atlanta Rapid Transit Authority, Georgia, Revenue Refunding, Series 1992P, (AMBAC Insured), 5.900% 07/01/03....... Aaa AAA 3,125 540 Metropolitan Atlanta Rapid Transit Authority, Georgia, Revenue, Series 1983D, 7.000% 07/01/11....... Aaa AAA 643 2,500 Metropolitan Atlanta Rapid Transit Authority, Georgia, Revenue, Series 1998B, (MBIA Insured), 5.100% 07/01/13....... Aaa AAA 2,569 2,000 Metropolitan Atlanta Rapid Transit Authority, Georgia, Revenue, Series 1998B, (MBIA Insured), 5.100% 07/01/15....... Aaa AAA 2,028 4,000 Monroe County, Georgia, Development Authority, PCR, (Georgia Power Company Plant Scherer Project) Series 2001, (AMBAC Insured), Mandatory Put 12/01/08 @ 100, 4.200% 01/01/12....... Aaa AAA 3,942 1,000 Monroe County, Georgia, Development Authority, PCR, (Oglethorpe Power Corporation Project) Series 1992A, 6.800% 01/01/12....... A3 A 1,141 1,100 Paulding County, Georgia, School District, GO, Series 1992A, 6.400% 02/01/04....... A2 A 1,166
SEE NOTES TO FINANCIAL STATEMENTS. 161 NATIONS FUNDS Nations Georgia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $1,000 Private Colleges and Universities Facilities Authority, Georgia, Revenue, (Agnes Scott College Project) Series 1999, (MBIA Insured), 4.800% 06/01/16....... Aaa AAA $ 982 1,400 Private Colleges and Universities Facilities Authority, Georgia, Revenue, (Emory University Project) Series 1992C, 5.750% 10/01/02....... Aa1 AA 1,427 1,000 Richmond County, Georgia, Board of Education, GO Refunding, Series 1993, (FGIC Insured), 4.700% 11/01/06....... Aaa AAA 1,029 2,000 Richmond County, Georgia, Development Authority, Environmental Improvement Revenue, (International Paper Company Project) Series 2001A, 5.150% 03/01/15....... Baa2 BBB 1,948 2,000 Roswell, Georgia, GO, Series 1995, 5.600% 02/01/10....... Aaa AAA 2,132 2,000 Roswell, Georgia, GO, Series 2000, 5.500% 02/01/12....... Aaa AAA 2,124 1,000 Savannah, Georgia, Economic Development Authority, Revenue Refunding, (Union Camp Corporation Project) Series 1993, 5.150% 05/01/02....... Baa2 NR 1,002 1,250 Savannah, Georgia, Hospital Authority, Revenue Refunding, (Candler Hospital Project) Series 1992, Prerefunded 01/01/03 @ 102, 7.000% 01/01/11....... Ba1 BB 1,320 1,225 Savannah, Georgia, Hospital Authority, Revenue, (St. Josephs -- Candler Health Systems Project) Series 1998A, (FSA Insured), 5.250% 07/01/11....... Aaa NR 1,271
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $1,310 Savannah, Georgia, Hospital Authority, Revenue, (St. Josephs -- Candler Health Systems Project) Series 1998A, (FSA Insured), 5.250% 07/01/12....... Aaa NR $ 1,350 1,000 Savannah, Georgia, Water and Sewer Improvement Revenue Refunding, Series 1993, 5.100% 12/01/09....... Aa3 AA+ 1,020 2,570 White County, Georgia, Industrial Development Authority, Revenue Refunding, (Springs Industries, Inc. Project) Series 1992, 6.850% 06/01/10....... NR NR 2,589 -------- 146,296 -------- ARKANSAS -- 1.2% 2,000 Crossett, Arkansas, PCR, (Georgia Pacific Corporation Project) Series 1984, 4.875% 10/01/07....... Baa3 NR 1,933 -------- LOUISIANA -- 2.0% 2,000 Calcasieu Parish, Lousiana, Industrial Development Board, PCR Refunding, (Occidental Petroleum Project) Series 2001, 4.800% 12/01/06....... Baa2 BBB 2,048 1,000 Plaquemines, Louisiana, Port Harbour and District Marine Terminal Facilities Revenue Refunding, (Electro-Coal Project) Series 2001B, 5.000% 09/01/07....... A3 A- 997 -------- 3,045 -------- TEXAS -- 0.6% 1,000 Brazos River Authority, Texas, PCR Refunding, (Texas Electric Company Project) Series 2001A, AMT, Mandatory Put 04/01/04 @ 100, 4.950% 10/01/30....... NR BBB+ 1,008 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $147,888)...................... 152,282 --------
SEE NOTES TO FINANCIAL STATEMENTS. 162 NATIONS FUNDS Nations Georgia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
SHARES VALUE (000) (000) --------------------------------------------------------------- INVESTMENT COMPANIES -- 1.2% (Cost: $1,827) 1,827 Nations Tax Exempt Fund, Primary A Class#...................... $ 1,827 -------- TOTAL INVESTMENTS (Cost $149,715*)............... 99.0% 154,109 -------- OTHER ASSETS AND LIABILITIES (NET).......................... 1.0% Cash.................................... $ 1 Receivable for Fund shares sold......... 17 Dividends receivable.................... 4 Interest receivable..................... 2,321 Payable for Fund shares redeemed........ (46) Investment advisory fee payable......... (22) Administration fee payable.............. (26) Shareholder servicing and distribution fees payable.......................... (10) Distributions payable................... (550) Accrued Trustees' fees and expenses..... (47) Accrued expenses and other liabilities........................... (57) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................................. 1,585 -------- NET ASSETS....................... $155,694 100.0% ======== NET ASSETS CONSIST OF: $ 251 Undistributed net investment income..... Accumulated net realized loss on (1,182) investments sold...................... Net unrealized appreciation of 4,394 investments........................... 152,231 Paid-in capital......................... -------- NET ASSETS.............................. $155,694 ======== VALUE --------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($134,638,456 / 12,596,180 shares outstanding)........ $10.69 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($12,790,628 / 1,196,505 shares outstanding).......................... $10.69 ======== Maximum sales charge.................... 3.25% Maximum offering price per share........ $11.05 INVESTOR B SHARES: Net asset value and offering price per share** ($6,864,811 / 642,233 shares outstanding).......................... $10.69 ======== INVESTOR C SHARES: Net asset value and offering price per share** ($1,399,605 / 130,939 shares outstanding).......................... $10.69 ========
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. &Zero coupon security. The rate shown reflects the yield to maturity. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Georgia Intermediate Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): AMBAC 10.41% MBIA 14.40% Nations Georgia Intermediate Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Industrial Development Revenue/Pollution Control Revenue 11.56% Hospital Revenue 11.71% Pre-Refunded 10.46% SEE NOTES TO FINANCIAL STATEMENTS. 163 NATIONS FUNDS Nations Georgia Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 99.6% GEORGIA -- 99.6% $1,500 Atlanta, Georgia, Airport Facilities Revenue Refunding, Series 2000A, (FGIC Insured), 5.600% 01/01/30(a)...... Aaa AAA $ 1,525 1,000 Cartersville, Georgia, Development Authority, Sewer Facilities Revenue Refunding, (Anheuser- Busch Companies, Inc. Project) Series 1997, AMT, 6.125% 05/01/27......... A1 A+ 1,022 1,000 Chatham County, Georgia, Hospital Medical Authority, Revenue, (Memorial Health Medical Center Project) Series 2001A, 6.125% 01/01/24......... A3 A- 1,016 2,000 Clayton County, Georgia Housing Authority, Multifamily Housing Revenue Refunding, (Tara Court II Apartments Project) Series 2001, (FNMA Liquidity Facility), Mandatory Put 12/01/11 @ 100, 4.350% 12/01/31......... NR AAA 1,945 1,000 Clayton County, Georgia, Water and Sewer Authority, Revenue, Series 2000, 5.600% 05/01/18......... Aa3 AA 1,046 500 Columbia County, Georgia, School District, GO, Series 1994A, (MBIA Insured), Prerefunded 04/01/04 @ 102, 6.250% 04/01/13......... Aaa AAA 541 1,000 DeKalb County, Georgia, Development Authority, Revenue, (Emory University Project) Series 1994A, 6.000% 10/01/14......... Aa1 AA 1,069 1,000 Effingham County, Georgia, Development Authority, Solid Waste Disposal Revenue, (Fort James Corporation Project) Series 1998, AMT, 5.625% 07/01/18......... Baa3 BBB- 890 1,000 Forsyth County, Georgia, School District, GO, Series 1999, 6.000% 02/01/15......... Aa2 AA- 1,098
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $1,000 Fulco, Georgia, Hospital Authority, Revenue Anticipation Certificates, (St. Joseph Hospital Project) Series 1994, 5.500% 10/01/14......... Aaa NR $ 1,056 1,000 Gainesville and Hall County, Georgia, Hospital Authority, Revenue, Certificates of Anticipation, (Northeast Georgia Health System Incorporated Project) Series 2001, 5.500% 05/15/31......... NR A- 943 1,000 Georgia State, GO, Series 1999D, 5.800% 11/01/13......... Aaa AAA 1,092 845 Georgia State, Housing and Finance Authority, Single-Family Mortgage Revenue, Series 1998B-3, 4.400% 06/01/17......... Aa2 AAA 836 1,055 Georgia State, Housing and Finance Authority, Single-Family Mortgage Revenue, Series 1999B-2, AMT, 6.100% 06/01/31......... Aa2 AAA 1,083 1,000 Henry County, Georgia, Hospital Authority, Revenue, (Henry Medical Center Project) Series 1997, (AMBAC Insured), 6.000% 07/01/29......... Aaa AAA 1,067 500 Lawrenceville, Georgia, Housing Authority, Multi-Family Housing Revenue, (Knollwood Park, LP Project) Series 1997, AMT, (FNMA COLL), Mandatory Put 06/01/15 @ 100, 6.250% 12/01/29......... NR AAA 518 1,000 Metropolitan Atlanta Rapid Transit Authority, Georgia, Revenue, Series 1998B, (MBIA Insured), 5.100% 07/01/15......... Aaa AAA 1,014 1,000 Monroe County, Georgia, Development Authority, PCR, (Georgia Power Company Plant Scherer Project) Series 2001, (AMBAC Insured), Mandatory Put 12/01/08 @ 100, 4.200% 01/01/12......... Aaa AAA 986
SEE NOTES TO FINANCIAL STATEMENTS. 164 NATIONS FUNDS Nations Georgia Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- GEORGIA -- (CONTINUED) $ 500 Peach County, Georgia, School District, GO, Series 1994, (State Aid Withholding, MBIA Insured), 6.500% 02/01/08......... Aaa AAA $ 560 1,000 Richmond County, Georgia, Development Authority, Environmental Improvement Revenue, (International Paper Company Project) Series 2001A, 5.150% 03/01/15......... Baa2 BBB 974 1,000 Roswell, Georgia, GO, Series 1995, 5.600% 02/01/10......... Aaa AAA 1,066 500 Savannah, Georgia, Hospital Authority, Hospital Improvement Revenue Refunding, (Candler Hospital Project) Series 1992, Prerefunded 01/01/03 @ 102, 7.000% 01/01/23......... Ba1 BB 528 1,000 Savannah, Georgia, Hospital Authority, Revenue, (St. Josephs - Candler Health Systems Project) Series 1998B, (FSA Insured), 5.250% 07/01/10......... Aaa NR 1,043 500 Union County, Georgia, Housing Authority, Multi-Family Housing Revenue Refunding, (Hidden Lake Apartments Ltd. Project) Series 1994A, (FHA/FNMA COLL), 7.125% 12/01/25......... Aaa NR 521 1,000 White County, Georgia, Industrial Development Authority, Revenue Refunding, (Springs Industries, Inc. Project) Series 1992, 6.850% 06/01/10......... NR NR 1,007 ------- 24,446 ------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $23,609)......................... 24,446 -------
SHARES VALUE (000) (000) ----------------------------------------------------------------------------- INVESTMENT COMPANIES -- 3.5% (Cost: $854) 854 Nations Tax Exempt Fund, Primary A Class#................ $ 854 ------- TOTAL INVESTMENTS (Cost $24,463*)................................. 103.1% 25,300 ------- OTHER ASSETS AND LIABILITIES (NET)................ (3.1)% Receivable for Fund shares sold.......................... $ 1 Dividends receivable..................................... 1 Interest receivable...................................... 425 Receivable from investment advisor....................... 4 Payable for Fund shares redeemed......................... (1,018) Administration fee payable............................... (4) Shareholder servicing and distribution fees payable...... (7) Distributions payable.................................... (72) Accrued Trustees' fees and expenses...................... (45) Accrued expenses and other liabilities................... (39) ------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................. (754) ------- NET ASSETS........................................ 100.0% $24,546 ======= NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 98 Accumulated net realized loss on investments sold........ (555) Net unrealized appreciation of investments............... 837 Paid-in capital.......................................... 24,166 ------- NET ASSETS............................................... $24,546 =======
SEE NOTES TO FINANCIAL STATEMENTS. 165 NATIONS FUNDS Nations Georgia Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
VALUE ----------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($15,729,932 / 1,598,753 shares outstanding)........... $9.84 ======= INVESTOR A SHARES: Net asset value and redemption price per share ($1,165,170 / 118,498 shares outstanding).............. $9.83 ======= Maximum sales charge..................................... 4.75% Maximum offering price per share......................... $10.32 INVESTOR B SHARES: Net asset value and offering price per share** ($7,394,342 / 751,386 shares outstanding).............. $9.84 ======= INVESTOR C SHARES: Net asset value and offering price per share**($256,847 / 26,114 shares outstanding).......... $9.84 =======
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Georgia Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Housing Revenue 19.98% Hospital Revenue 16.58% Industrial Development Revenue/Pollution Control Revenue 12.24% Transportation Revenue 10.35% SEE NOTES TO FINANCIAL STATEMENTS. 166 NATIONS FUNDS Nations Kansas Municipal Income Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 95.7% KANSAS -- 82.3% $ 1,000 Butler County, Kansas, Unified School District Number 402, GO Refunding, Series 1994, (FSA Insured), 5.000% 10/01/07........ Aaa AAA $ 1,016 1,045 Douglas County, Kansas, GO, Series 1999, 4.550% 08/01/05........ Aa3 NR 1,078 1,000 Douglas County, Kansas, Unified School District Number 497, GO, Series 1995A, Crossover Refunded 09/01/03 @ 100, 5.700% 09/01/05........ Aa3 NR 1,038 875 Fairway, Kansas, Industrial Revenue Refunding, (JC Nichols Company Project) Series 1998, (GTY-AGMT), 4.400% 03/01/03........ NR AA 891 1,185 Johnson County, Kansas, Unified School District Number 223, GO Refunding, Series 1994, (AMBAC Insured), 5.500% 09/01/04........ Aaa AAA 1,251 1,705 Johnson County, Kansas, Unified School District Number 229, GO Refunding, Series 1993A, (FGIC Insured), 5.400% 10/01/04........ Aaa AAA 1,762 1,500 Johnson County, Kansas, Unified School District Number 229, GO Refunding, Series 1993A, (FGIC Insured), 5.800% 10/01/08........ Aaa AAA 1,561 1,180 Johnson County, Kansas, Unified School District Number 229, GO, Series 1994A, 6.250% 10/01/03........ Aa1 AA 1,244 1,130 Johnson County, Kansas, Unified School District Number 231, GO Refunding, Series 1998A, (FGIC Insured), 4.600% 10/01/09........ Aaa AAA 1,150 1,260 Johnson County, Kansas, Unified School District Number 231, GO Refunding, Series 1998A, (FGIC Insured), 4.700% 10/01/10........ Aaa AAA 1,282
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- KANSAS -- (CONTINUED) $ 750 Johnson County, Kansas, Unified School District Number 233, GO Refunding, Series 1994, (AMBAC Insured), Prerefunded 09/01/04 @ 100, 5.500% 09/01/05........ Aaa AAA $ 793 750 Johnson County, Kansas, Unified School District Number 233, GO Refunding, Series 1994, (AMBAC Insured), Prerefunded 09/01/04 @ 100, 5.625% 09/01/07........ Aaa AAA 795 1,380 Johnson County, Kansas, Unified School District Number 233, GO Refunding, Series 2001C, (FGIC Insured), 5.000% 09/01/05........ Aaa AAA 1,442 2,760 Johnson County, Kansas, Unified School District Number 233, GO, Series 1999A, (FGIC Insured), 5.375% 09/01/14........ Aaa NR 2,854 1,250 Johnson County, Kansas, Unified School District Number 512, Shawnee Mission, GO Refunding, Series 1996B, 4.850% 10/01/08........ Aa1 AA 1,284 1,510 Johnson County, Kansas, Unified School District Number 512, Shawnee Mission, GO, Series 1995, 5.200% 10/01/07........ Aa1 AA 1,564 1,380 Johnson County, Kansas, Unified School District Number 512, Shawnee Mission, GO, Series 1995, 5.200% 10/01/08........ Aa1 AA 1,424 750 Johnson County, Kansas, Water District Number 001, Water Revenue Refunding, Series 1993, 4.750% 06/01/04........ Aa1 AAA 770 720 Johnson County, Kansas, Water District Number 001, Water Revenue Refunding, Series 1993, 4.750% 12/01/04........ Aa1 AAA 739
SEE NOTES TO FINANCIAL STATEMENTS. 167 NATIONS FUNDS Nations Kansas Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- KANSAS -- (CONTINUED) $ 750 Johnson County, Kansas, Water District Number 001, Water Revenue Refunding, Series 1993, 4.800% 06/01/05........ Aa1 AAA $ 765 595 Junction City, Kansas, Water and Sewer Revenue, Series 1996A, (MBIA Insured), Prerefunded 09/01/05 @ 101, 4.900% 09/01/07........ Aaa AAA 627 500 Kansas City, Kansas, Hospital Revenue Refunding, (Sisters Charity Health Services Project) Series 1992, 5.800% 08/01/04........ Aa2 NR 514 2,230 Kansas City, Kansas, Utilities System Revenue, Series 1994, (FGIC Insured), Prerefunded 09/01/04 @ 102, 6.375% 09/01/23........ Aaa AAA 2,444 895 Kansas State, Department of Transportation, Highway Revenue, Series 1992A, Prerefunded 09/01/02 @ 102, 5.800% 09/01/05........ Aa2 AA+ 928 1,055 Kansas State, Department of Transportation, Highway Revenue, Series 1994, 4.800% 09/01/08........ Aa2 AA+ 1,091 735 Kansas State, Development Financing Authority, Health Facilities Revenue, (Hays Medical Center Inc. Project) Series 1997B, (MBIA Insured), 4.800% 11/15/04........ Aaa NR 764 670 Kansas State, Development Financing Authority, Health Facilities Revenue, (Hays Medical Center Inc. Project) Series 1997B, (MBIA Insured), 4.900% 11/15/05........ Aaa NR 698 510 Kansas State, Development Financing Authority, Health Facilities Revenue, (Hays Medical Center Inc. Project) Series 1997B, (MBIA Insured), 5.000% 11/15/06........ Aaa NR 533
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- KANSAS -- (CONTINUED) $ 4,190 Kansas State, Development Financing Authority, Health Facilities Revenue, (Sisters of Charity Project) Series 2000J, 6.250% 12/01/28........ Aa2 AA $ 4,403 620 Kansas State, Development Financing Authority, Health Facilities Revenue, (St. Lukes/Shawnee Mission Project) Series 1996N, (MBIA Insured), 4.700% 11/15/05........ Aaa AAA 641 675 Kansas State, Development Financing Authority, Health Facilities Revenue, (St. Lukes/Shawnee Mission Project) Series 1996N, (MBIA Insured), 4.750% 11/15/06........ Aaa AAA 696 605 Kansas State, Development Financing Authority, Health Facilities Revenue, (St. Lukes/Shawnee Mission Project) Series 1996P, (MBIA Insured), 4.700% 11/15/05........ Aaa AAA 626 630 Kansas State, Development Financing Authority, Health Facilities Revenue, (St. Lukes/Shawnee Mission Project) Series 1996P, (MBIA Insured), 4.750% 11/15/06........ Aaa AAA 650 740 Kansas State, Development Financing Authority, Health Facilities Revenue, (Stormont-Vail Healthcare Inc. Project) Series 1996F, (MBIA Insured), 5.600% 11/15/07........ Aaa AAA 782 500 Kansas State, Development Financing Authority, Health Facilities Revenue, (Stormont-Vail Healthcare Inc. Project) Series 1996F, (MBIA Insured), 5.750% 11/15/09........ Aaa AAA 527
SEE NOTES TO FINANCIAL STATEMENTS. 168 NATIONS FUNDS Nations Kansas Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- KANSAS -- (CONTINUED) $ 730 Kansas State, Development Financing Authority, Health Facilities Revenue, (Stormont-Vail Healthcare Inc. Project) Series 1996G, (MBIA Insured), Prerefunded 11/15/06 @ 100, 5.750% 11/15/09........ Aaa AAA $ 788 890 Kansas State, Development Financing Authority, Health Facilities Revenue, (Stormont-Vail Healthcare Inc. Project), Series 1996G, (MBIA Insured), Prerefunded 11/15/06 @ 100, 5.700% 11/15/08........ Aaa AAA 959 10,000 Kansas State, Development Financing Authority, Revenue, (Board of Regents Rehabilitation Project) Series 1997G-2, 5.000% 10/01/10........ Aaa AAA 10,282 2,500 Kansas State, Development Financing Authority, Revenue, (Public Water Supply Revolving Project) Series 1997, (AMBAC Insured), 5.000% 04/01/17........ Aaa NR 2,462 2,000 Kansas State, Development Financing Authority, Revenue, (Regents-Wichita University Project) Series 2000B, (AMBAC Insured), 5.900% 04/01/15........ Aaa AAA 2,137 955 Kansas State, Development Financing Authority, Revenue, (Sisters of Charity Leavenworth Project) Series 1998, 5.000% 12/01/14........ Aaa AAA 957 1,000 Kansas State, Development Financing Authority, Revenue, (Water Pollution Control Project) Series 1993-II, 5.400% 11/01/03........ Aa1 AA+ 1,043 1,150 Kansas, University Hospital Authority, Revenue, (Kansas University Health System Project) Series 1999A, (AMBAC Insured), 5.250% 09/01/11........ Aaa AAA 1,194
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- KANSAS -- (CONTINUED) $ 1,265 Kansas, University Hospital Authority, Revenue, (Kansas University Health System Project) Series 1999A, (AMBAC Insured), 5.350% 09/01/12........ Aaa AAA $ 1,314 1,525 Kansas, University Hospital Authority, Revenue, (Kansas University Health System Project) Series 1999A, (AMBAC Insured), 5.400% 09/01/13........ Aaa AAA 1,582 2,000 Leavenworth County, Kansas, GO, Series 1997A, (AMBAC Insured), 4.900% 12/01/06........ Aaa AAA 2,090 950 Reno County, Kansas, Unified School District Number 308 Hutchinson, GO, Series 1995, (FSA Insured), 5.500% 09/01/07........ Aaa AAA 994 860 Reno County, Kansas, Unified School District Number 313, GO, Series 1996B, (FSA Insured), 5.900% 09/01/08........ Aaa AAA 942 925 Reno County, Kansas, Unified School District Number 313, GO, Series 1996B, (FSA Insured), 5.900% 09/01/09........ Aaa AAA 1,017 995 Reno County, Kansas, Unified School District Number 313, GO, Series 1996B, (FSA Insured), 5.900% 09/01/10........ Aaa AAA 1,098 500 Salina, Kansas, Hospital Revenue Refunding, (Asbury-Salina Regional Medical Center Project) Series 1993, (AMBAC Insured), 5.100% 10/01/06........ Aaa AAA 512 1,010 Saline County, Kansas, Unified School District Number 305 Salina, GO Refunding, Series 1999, (FSA Insured), Prerefunded 09/01/08 @ 100, 5.250% 09/01/13........ Aaa NR 1,071
SEE NOTES TO FINANCIAL STATEMENTS. 169 NATIONS FUNDS Nations Kansas Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- KANSAS -- (CONTINUED) $ 1,000 Sedgwick County, Kansas, Unified School District Number 265 Goddard, GO, Series 1994, (FSA Insured), 5.350% 10/01/04........ Aaa AAA $ 1,054 1,000 Sedgwick County, Kansas, Unified School District Number 265 Goddard, GO, Series 1994, (FSA Insured), Prerefunded 10/01/04 @ 100, 5.400% 10/01/05........ Aaa AAA 1,056 1,250 Sedgwick County, Kansas, Unified School District Number 265 Goddard, GO, Series 1994, (FSA Insured), Prerefunded 10/01/04 @ 100, 5.500% 10/01/06........ Aaa AAA 1,323 785 Sedgwick County, Kansas, Unified School District Number 266 Maize, GO, Series 1994B, (FSA Insured), Prerefunded 09/01/03 @ 100, 5.700% 09/01/07........ Aaa AAA 819 845 Sedgwick County, Kansas, Unified School District Number 266 Maize, GO, Series 1994B, (FSA Insured), Prerefunded 09/01/03 @ 100, 5.800% 09/01/08........ Aaa AAA 883 500 Sedgwick County, Kansas, Unified School District Number 267, GO Refunding, Series 1995, (AMBAC Insured), Prerefunded 11/01/05 @ 100, 6.100% 11/01/08........ Aaa AAA 544 500 Shawnee County, Kansas, GO Refunding, Series 1992C, 5.500% 09/01/03........ A1 NR 507 500 Shawnee County, Kansas, Health Care Facilities Revenue Refunding, (Menninger Foundation Project) Series 1995, (FSA Insured), 5.000% 08/15/07........ Aaa AAA 512
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- KANSAS -- (CONTINUED) $ 500 Shawnee County, Kansas, Health Care Facilities Revenue Refunding, (Menninger Foundation Project) Series 1995, (FSA Insured), 5.100% 08/15/09........ Aaa AAA $ 510 530 Shawnee County, Kansas, Revenue, (Sisters Charity Leavenworth Project) Series 1994, 4.800% 12/01/05........ Aa2 AA 547 555 Shawnee County, Kansas, Revenue, (Sisters Charity Leavenworth Project) Series 1994, 4.900% 12/01/06........ Aa2 AA 568 895 Shawnee County, Kansas, Unified School District Number 345 Seaman, GO, Series 1994, (MBIA Insured), Prerefunded 09/01/04 @ 100, 5.400% 09/01/06........ Aaa AAA 944 950 Shawnee County, Kansas, Unified School District Number 345 Seaman, GO, Series 1994, (MBIA Insured), Prerefunded 09/01/04 @ 100, 5.500% 09/01/07........ Aaa AAA 1,004 1,050 Shawnee County, Kansas, Unified School District Number 501, GO, Series 1995, (FGIC Insured), Prerefunded 02/01/03 @ 100, 5.300% 02/01/04........ Aaa AAA 1,078 1,170 Wichita, Kansas, Water and Sewer Utility Revenue Refunding, Series 1998, (FGIC Insured), 4.150% 10/01/05........ Aaa NR 1,190 -------- 83,608 -------- ALASKA -- 1.4% 2,000 North Slope Borough, Alaska, Capital Appreciation GO, Series 2000B, (MBIA Insured), 4.789%& 06/30/09....... Aaa AAA 1,421 --------
SEE NOTES TO FINANCIAL STATEMENTS. 170 NATIONS FUNDS Nations Kansas Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- OHIO -- 2.6% $ 1,000 Dayton, Ohio, Special Facilities Revenue Refunding, (Air Freight Corporation Project) Series 1993F, 6.050% 10/01/09........ NR BB+ $ 864 2,000 Dayton, Ohio, Special Facilities Revenue, (Air Freight Corporation Project) Series 1988D, AMT, 6.200% 10/01/09........ NR BB+ 1,744 -------- 2,608 -------- OKLAHOMA -- 2.0% 2,000 Oklahoma, Housing Development Authority, Revenue, Series 2000A, (FHLMC COLL), 5.100% 11/01/05........ Aa3 NR 2,079 -------- SOUTH CAROLINA -- 2.3% 2,000 Calhoun County, South Carolina, Solid Waste Disposal Facility Revenue, (Carolina Eastman Company Project) Series 1992, AMT, 6.750% 05/01/17........ A2 A- 2,324 -------- TEXAS -- 4.1% 2,000 Dallas-Fort Worth, Texas, International Airport Facilities Improvement, Corporate Revenue Refunding, (American Airlines Project) Series 2000C, AMT, Mandatory Put 11/01/07 @ 100, 6.150% 05/01/29........ B1 BB 1,875 2,250 Sabine River, Texas, Pollution Control Authority, Revenue Refunding, (Texas University Electric Company Project) Series 2001A, Mandatory Put 11/01/11 @ 100, 5.500% 05/01/22........ Baa1 BBB+ 2,250 -------- 4,125 --------
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- WASHINGTON -- 1.0% $ 1,000 Energy Northwest Washington, Electric Revenue Refunding, Series 2002A, (MBIA Insured), 5.750% 07/01/18........ Aaa AAA $ 1,048 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $94,777)........................ 97,213 --------
SHARES (000) --------- INVESTMENT COMPANIES -- 3.2% (Cost: $3,266) 3,266 Nations Tax Exempt Fund, Primary A Class#................ 3,266 -------- TOTAL INVESTMENTS (Cost $98,043*)................................. 98.9% 100,479 -------- OTHER ASSETS AND LIABILITIES (NET)................ 1.1% Cash..................................................... $ 1 Receivable for Fund shares sold.......................... 167 Dividends receivable..................................... 5 Interest receivable...................................... 1,619 Payable for Fund shares redeemed......................... (167) Investment advisory fee payable.......................... (26) Administration fee payable............................... (17) Shareholder servicing and distribution fees payable...... (1) Distributions payable.................................... (356) Accrued Trustees' fees and expenses...................... (24) Accrued expenses and other liabilities................... (34) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................. 1,167 -------- NET ASSETS........................................ 100.0% $101,646 ======== NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 112 Accumulated net realized gain on investments sold........ 211 Net unrealized appreciation of investments............... 2,436 Paid-in capital.......................................... 98,887 -------- NET ASSETS............................................... $101,646 ========
SEE NOTES TO FINANCIAL STATEMENTS. 171 NATIONS FUNDS Nations Kansas Municipal Income Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
VALUE -------------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($98,506,072 / 9,698,718 shares outstanding)........... $10.16 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($3,114,813 / 306,886 shares outstanding).............. $10.15 ======== Maximum sales charge..................................... 3.25% Maximum offering price per share......................... $10.49 INVESTOR B SHARES: Net asset value and offering price per share** ($24,776 / 2,443 shares outstanding)................... $10.14 ========
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. &Zero coupon security. The rate shown reflects the yield to maturity. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Kansas Municipal Income Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): AMBAC 14.44% FGIC 14.52% FSA 12.10% MBIA 11.89% Nations Kansas Municipal Income Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Pre-Refunded 19.11% Hospital Revenue 18.23% Lease Revenue 10.11% SEE NOTES TO FINANCIAL STATEMENTS. 172 NATIONS FUNDS Nations Maryland Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 97.7% MARYLAND -- 80.2% $1,000 Anne Arundel County, Maryland, Consolidated General Improvement GO, Series 1993, 5.125% 07/15/08........ Aa1 AA+ $ 1,031 2,855 Anne Arundel County, Maryland, GO, Series 1995, 5.200% 04/01/08........ Aa1 AA+ 2,968 1,000 Baltimore County, Maryland, Metropolitan District, Special Assignment GO Refunding, Series 1992, 5.800% 05/01/03........ Aaa AAA 1,024 1,075 Baltimore, Maryland, Consolidated Public Improvement GO, Series 1991C, (FGIC Insured), 6.375% 10/15/07........ Aaa AAA 1,199 1,000 Baltimore, Maryland, Consolidated Public Improvement GO, Series 1993A, (AMBAC Insured), 5.300% 10/15/06........ Aaa AAA 1,032 1,740 Baltimore, Maryland, Consolidated Public Improvement GO, Series 1997A, (FGIC Insured), 5.300% 10/15/16........ Aaa AAA 1,788 1,000 Baltimore, Maryland, Convention Center Revenue Refunding, Series 1998, (MBIA Insured), 5.000% 09/01/06........ Aaa AAA 1,049 1,725 Baltimore, Maryland, Exchanged Revenue, Series 1996A, (FGIC Insured), 5.900% 07/01/10........ Aaa AAA 1,902 1,000 Baltimore, Maryland, GO, Series 1989B, (MBIA Insured), 7.000% 10/15/04........ Aaa AAA 1,096 1,000 Baltimore, Maryland, GO, Series 1989B, (MBIA Insured), 7.050% 10/15/07........ Aaa AAA 1,147 1,750 Baltimore, Maryland, Port Facilities Revenue, (E.I. duPont de Nemours and Company Project) Series 1985, 6.500% 12/01/10........ Aa3 AA- 1,815
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $1,000 Baltimore, Maryland, Revenue Refunding, (Wastewater Projects) Series 1993A, (MBIA Insured), 5.100% 07/01/04........ Aaa AAA $ 1,045 1,000 Baltimore, Maryland, Revenue Refunding, (Wastewater Projects) Series 1994A, (FGIC Insured), 5.000% 07/01/22........ Aaa AAA 990 2,135 Frederick County, Maryland, GO Refunding, Series 1993, 5.350% 07/01/05........ Aa2 AA 2,187 1,455 Harford County, Maryland, Public Improvement GO, Series 1992, 5.300% 09/01/03........ Aa1 AA 1,502 1,545 Howard County, Maryland, Consolidated Public Improvement GO Refunding, Series 1993A, 5.000% 08/15/03........ Aaa AAA 1,599 20 Howard County, Maryland, Consolidated Public Improvement GO, Series 1993A, Prerefunded 08/15/05 @ 100, 5.250% 08/15/06........ Aaa AAA 21 1,500 Howard County, Maryland, Consolidated Public Improvement GO, Series 2000A, 5.250% 02/15/16........ Aaa AAA 1,533 2,000 Howard County, Maryland, Consolidated Public Improvement GO, Series 2000A, 5.250% 02/15/18........ Aaa AAA 2,029 1,000 Howard County, Maryland, Metropolitan District GO Refunding, Series 1991B, 6.000% 08/15/03........ Aaa AAA 1,049 1,980 Howard County, Maryland, Public Improvement GO, Unrefunded Balance, Series 1993A, 5.250% 08/15/06........ Aaa AAA 2,059 1,530 Laurel, Maryland, Public Improvement GO Refunding, 1996A, (FGIC Insured), 5.000% 10/01/11........ Aaa AAA 1,574
SEE NOTES TO FINANCIAL STATEMENTS. 173 NATIONS FUNDS Nations Maryland Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $1,200 Maryland State, Certificates of Participation Refunding, (State Highway and Motor Vehicle Administration Project) Series 1992, 5.800% 06/01/02........ Aa3 AA+ $ 1,208 1,410 Maryland State, Certificates of Participation Revenue, (Aviation Administration Facilities Project) Series 1999, AMT, 4.750% 05/01/07........ Aa3 AA+ 1,443 1,000 Maryland State, Community Development Administration, Department of Housing and Community Development, Revenue, (Single-Family Program) Series 1997-1, (FHA COLL), 4.950% 04/01/07........ Aa2 NR 1,034 4,000 Maryland State, Community Development Administration, Department of Housing and Community Development, Revenue, (Single-Family Program) Series 1998-3, AMT, 4.500% 04/01/08........ Aa2 NR 3,987 1,685 Maryland State, Community Development Administration, Department of Housing and Community Development, Revenue, (Single-Family Program) Series 1998-3, AMT, 4.700% 04/01/10........ Aa2 NR 1,674 2,410 Maryland State, Community Development Administration, Department of Housing and Community Development, Revenue, Series 1999D, AMT, 5.375% 09/01/24........ Aa2 NR 2,335 2,000 Maryland State, Community Development Administration, Department of Housing and Community Development, Revenue, Series 1999H, AMT, 6.000% 09/01/17........ Aa2 NR 2,070
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $5,000 Maryland State, Department of Transportation, Series 2002, 5.500% 02/01/14........ Aa2 AA $ 5,361 2,000 Maryland State, Economic Development Corporation, Student Housing Revenue, (Salisbury Collegiate Housing Project) Series 1999A, 5.750% 06/01/29........ Baa3 NR 1,989 500 Maryland State, Economic Development Corporation, Student Housing Revenue, (Salisbury Collegiate Housing Project) Series 1999A, 6.000% 06/01/30........ Baa3 NR 504 945 Maryland State, Economic Development Corporation, Student Housing Revenue, Series 1999A, 5.600% 06/01/10........ Baa3 NR 952 1,000 Maryland State, Economic Development Corporation, Student Housing Revenue, Series 1999A, 5.700% 06/01/12........ Baa3 NR 1,006 815 Maryland State, Economic Development Corporation, Student Housing Revenue, Series 1999A, 6.000% 06/01/19........ Baa3 NR 825 1,000 Maryland State, GO, Series 1998, 5.000% 07/15/11........ Aaa AAA 1,037 2,700 Maryland State, Health and Higher Education Facilities Authority, Revenue Refunding, (Johns Hopkins Hospital Project) Series 1993, 5.250% 07/01/04........ A1 AA- 2,824 1,500 Maryland State, Health and Higher Education Facilities Authority, Revenue Refunding, (Johns Hopkins Hospital Project) Series 1993, 5.400% 07/01/06........ A1 AA- 1,557 3,050 Maryland State, Health and Higher Education Facilities Authority, Revenue Refunding, (Johns Hopkins Hospital Project) Series 1993, 5.500% 07/01/07........ A1 AA- 3,160
SEE NOTES TO FINANCIAL STATEMENTS. 174 NATIONS FUNDS Nations Maryland Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $1,000 Maryland State, Health and Higher Education Facilities Authority, Revenue Refunding, (University of Maryland Medical Systems Project) Series 1993, (FGIC Insured), 5.200% 07/01/04........ Aaa AAA $ 1,046 510 Maryland State, Health and Higher Education Facilities Authority, Revenue, (College of Notre Dame Project) Series 1998, (MBIA Insured), 4.600% 10/01/14........ Aaa AAA 505 430 Maryland State, Health and Higher Education Facilities Authority, Revenue, (Howard County General Hospital Project) Series 1993, 5.125% 07/01/03........ Aaa NR 439 1,000 Maryland State, Health and Higher Education Facilities Authority, Revenue, (Howard County General Hospital Project) Series 1993, 5.500% 07/01/13........ Aaa NR 1,058 1,000 Maryland State, Health and Higher Education Facilities Authority, Revenue, (Howard County General Hospital Project) Series 1993, 5.500% 07/01/21........ Aaa NR 1,021 2,000 Maryland State, Health and Higher Education Facilities Authority, Revenue, (John Hopkins Hospital Redevelopment Project) Series 1979, 5.750% 07/01/09........ Aaa AAA 2,182 1,000 Maryland State, Health and Higher Education Facilities Authority, Revenue, (Johns Hopkins Medical Project) Series 1998, 5.000% 07/01/29........ Aaa AAA 953 2,000 Maryland State, Health and Higher Education Facilities Authority, Revenue, (Johns Hopkins University Project) Series 1999, Prerefunded 07/01/09 @ 101, 6.000% 07/01/39........ Aa2 AA 2,223
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $1,100 Maryland State, Industrial Development Financing Authority, Revenue Refunding, (American Center for Physics Facilities Project) Series 2001, (GTY AGMT), 3.650% 12/15/05........ Aa3 NR $ 1,103 1,500 Maryland State, State and Local Facilities Loan GO, Series 1995-2, 5.000% 10/15/04........ Aaa AAA 1,575 1,550 Maryland State, State and Local Facilities Loan GO, Series 1996-2, 5.250% 06/15/11........ Aaa AAA 1,626 1,970 Maryland State, State and Local Facilities Loan GO, Series 2000, 5.750% 08/01/11........ Aaa AAA 2,168 3,000 Maryland State, Transportation Authority, (Baltimore/Washington International Airport Project) Series 2002A, (AMBAC Insured), 4.500% 03/01/15........ Aaa AAA 2,878 645 Maryland State, Transportation Authority, Revenue, (Transportation Facilities Project) Series 1978, 6.625% 07/01/03........ Aaa AAA 665 4,000 Maryland State, Transportation Authority, Transportation Revenue, Series 1992, 5.700% 07/01/05........ A1 A+ 4,267 2,800 Maryland State, Transportation Authority, Transportation Revenue, Series 1992, 5.800% 07/01/06........ A1 A+ 3,020 2,000 Montgomery County, Maryland, Consolidated Public Improvement GO Refunding, Series 1992A, 5.600% 07/01/04........ Aaa AAA 2,116 1,000 Montgomery County, Maryland, Consolidated Public Improvement GO Refunding, Series 1992A, 5.750% 07/01/06........ Aaa AAA 1,081 3,500 Montgomery County, Maryland, Consolidated Public Improvement GO, Series 1993A, 4.900% 10/01/07........ Aaa AAA 3,602
SEE NOTES TO FINANCIAL STATEMENTS. 175 NATIONS FUNDS Nations Maryland Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $1,000 Montgomery County, Maryland, Consolidated Public Improvement GO, Series 1997A, 5.375% 05/01/08........ Aaa AAA $ 1,070 1,000 Montgomery County, Maryland, Consolidated Public Improvement GO, Series 1997A, Prerefunded 05/01/07 @ 102, 5.375% 05/01/13........ Aaa AAA 1,078 1,000 Montgomery County, Maryland, GO Refunding, Series 2001, 5.250% 10/01/14........ Aaa AAA 1,049 1,500 Montgomery County, Maryland, Housing Opportunities Commission, Multi-Family Mortgage Revenue, Series 2000A, 6.100% 07/01/30........ Aaa NR 1,565 1,500 Northeast Maryland, Solid Waste Disposal Authority, Revenue, (Montgomery County Resource Recreation Project) Series 1993A, AMT, 6.000% 07/01/07........ A2 NR 1,601 1,800 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 1992, 5.900% 01/15/06........ Aa3 AA 1,842 2,000 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 1999, 5.000% 10/01/12........ Aaa AAA 2,070 2,300 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 1999, (FSA Insured), 5.125% 10/01/16........ Aaa AAA 2,335 1,000 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 2000, 5.125% 10/01/08........ Aa3 AA 1,057 1,000 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 2000, 5.125% 10/01/10........ Aa3 AA 1,055 2,000 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 2000, 5.250% 10/01/18........ Aa3 AA 2,032
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $2,500 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 2000, 5.250% 10/01/19........ Aa3 AA $ 2,530 4,825 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 2001, (FGIC Insured), 5.250% 12/01/11........ Aaa AAA 5,134 3,970 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 2001, (FGIC Insured), 5.250% 12/01/19........ Aaa AAA 4,029 4,650 Prince Georges County, Maryland, GO, Construction Public Improvements, Series 2001, (FGIC Insured), 5.250% 12/01/12........ Aaa AAA 4,936 370 Prince Georges County, Maryland, Housing Authority, Single-Family Mortgage Revenue, Series 2000A, AMT, 6.150% 08/01/19........ NR AAA 382 1,000 Prince Georges County, Maryland, PCR Refunding, (Potomac Electric Power Project) Series 1995, 5.750% 03/15/10........ A1 A 1,085 2,000 Prince Georges County, Maryland, Solid Waste Management Systems Authority, Revenue Refunding, Series 1993, (FSA Insured), 5.100% 06/15/05........ Aaa AAA 2,076 1,200 Queen Annes County, Maryland, School and Public Facilities GO, Series 2000, 5.250% 01/15/14........ Aaa AAA 1,247 1,000 Rockville, Maryland, GO Refunding, Series 1993, 4.750% 04/15/05........ Aa1 AA+ 1,014 1,000 St. Mary's County, Maryland, GO, Series 1995, (MBIA Insured), 5.700% 03/01/08........ Aaa AAA 1,073
SEE NOTES TO FINANCIAL STATEMENTS. 176 NATIONS FUNDS Nations Maryland Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $2,000 University of Maryland, Systems Auxiliary Facilities and Tuition Revenue Refunding, Series 1993C, 4.900% 10/01/08........ Aa3 AA+ $ 2,042 1,020 University of Maryland, Systems Auxiliary Facilities and Tuition Revenue, Series 1996A, 5.600% 04/01/13........ Aa3 AA+ 1,066 3,115 University of Maryland, Systems Auxiliary Facilities and Tuition Revenue, Series 1996A, 5.600% 04/01/14........ Aa3 AA+ 3,249 1,975 University of Maryland, Systems Auxiliary Facilities and Tuition Revenue, Series 2000A, 5.000% 10/01/08........ Aa3 AA+ 2,077 1,575 University of Maryland, Systems Auxiliary Facilities and Tuition Revenue, Series 2000A, 5.250% 10/01/11........ Aa3 AA+ 1,661 1,000 Washington County, Maryland, Consolidated Public Improvement GO Refunding, Series 1993, (FGIC Insured), 5.250% 01/01/06........ Aaa AAA 1,040 1,000 Washington County, Maryland, Sanitation District, GO Refunding, Series 1993F, (FGIC Insured), 5.250% 01/01/06........ Aaa AAA 1,040 1,000 Washington Suburban Sanitation District Authority, Maryland, General Construction GO, Series 2000, 5.250% 06/01/22........ Aaa AAA 1,007 3,440 Washington Suburban Sanitation District Authority, Maryland, Water Supply GO Refunding, Series 1993, 5.100% 12/01/07........ Aaa AAA 3,564 1,000 Washington Suburban Sanitation District Authority, Maryland, Water Supply GO, Series 1993, 5.000% 06/01/03........ Aaa AAA 1,031
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $2,050 Washington Suburban Sanitation District Authority, Maryland, Water Supply GO, Series 2001, 4.125% 06/01/05........ Aaa AAA $ 2,098 1,355 Wicomico County, Maryland, Public Improvement GO, Series 1997, (MBIA Insured), 4.900% 12/01/11........ Aaa AAA 1,392 1,425 Wicomico County, Maryland, Public Improvement GO, Series 1997, (MBIA Insured), 5.000% 12/01/12........ Aaa AAA 1,464 -------- 161,124 -------- ALABAMA -- 1.5% 3,000 Courtland, Alabama, Industrial Development Board, Solid Waste Disposal Revenue, (Champion International Corporation Project) Series 1992, AMT, 7.000% 06/01/22........ Baa2 BBB 3,070 -------- ARKANSAS -- 1.9% 4,000 Crossett, Arkansas, PCR, (Georgia Pacific Corporation Project) Series 1984, 4.875% 10/01/07........ Baa3 NR 3,866 -------- COLORADO -- 0.8% 3,800 Colorado, E-470 Public Highway Authority, Revenue, Capital Appreciation, Series 1997B, (MBIA Insured), 5.514%& 09/01/18....... Aaa AAA 1,519 -------- DISTRICT OF COLUMBIA -- 1.2% 2,000 Washington, District of Columbia, Metropolitan Area Transportation Authority, Revenue Refunding, Series 1993, (FGIC Insured), 5.000% 07/01/06........ Aaa AAA 2,080
SEE NOTES TO FINANCIAL STATEMENTS. 177 NATIONS FUNDS Nations Maryland Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- DISTRICT OF COLUMBIA -- (CONTINUED) $ 350 Washington, District of Columbia, Metropolitan Area Transportation Authority, Revenue Refunding, Series 1993, (FGIC Insured), 6.000% 07/01/10........ Aaa AAA $ 389 -------- 2,469 -------- FLORIDA -- 0.5% 1,000 Florida State, Board of Education, Lottery Revenue, Series 2001B, 5.000% 07/01/20........ Aaa AAA 972 -------- MICHIGAN -- 1.0% 2,000 Southfield, Michigan, Library Building Authority, GO, Series 2000, (MBIA Insured), 5.500% 05/01/24........ Aaa AAA 2,022 -------- MISSISSIPPI -- 2.0% 1,000 Mississippi State, Hospital Facilities and Equipment Authority, Revenue, (Forrest County General Hospital Project) Series 2000, (FSA Insured), 5.625% 01/01/20........ Aaa NR 1,015 3,100 Mississippi State, Hospital Facilities and Equipment Authority, Revenue, (Forrest County General Hospital Project) Series 2000, (FSA Insured), 5.500% 01/01/24........ Aaa NR 3,092 -------- 4,107 -------- OKLAHOMA -- 0.9% 2,000 Tulsa, Oklahoma, Municipal Airport Transportation Revenue Refunding, Series 2000B, AMT, Mandatory Put 12/01/08 @ 100, 6.000% 06/01/35........ B1 BB 1,859 --------
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TENNESSEE -- 1.0% $2,000 Memphis-Shelby County, Tennessee, Airport Authority, Special Facilities Revenue Refunding, (Federal Express Corporation Project) Series 2001, 5.000% 09/01/09........ Baa2 BBB $ 2,011 -------- TEXAS -- 4.4% 2,000 Brazos River Authority, Texas, PCR Refunding, (Texas Electric Company Project) Series 2001A, AMT, Mandatory Put 04/01/04 @ 100, 4.950% 10/01/30............... NR BBB+ 2,017 2,250 Sabine River, Texas, Pollution Control Authority, Revenue Refunding, (Texas University Electric Company Project) Series 2001A, Mandatory Put 11/01/11 @ 100, 5.500% 05/01/22........ Baa1 BBB+ 2,250 2,000 Texas State, Water Development Board, Revenue, Series 1997, 5.000% 07/15/12........ Aaa AAA 2,034 2,395 Travis County, Texas, Housing Financial Authority, Multifamily Housing Revenue, (Lakeview Apartments Project) Series 2001A, 5.500% 07/01/11........ A3 NR 2,391 -------- 8,692 -------- VIRGINIA -- 0.9% 1,775 Virginia State Transportation Board, Transportation Contract Revenue, (US Route 58 Corridor Development Project) Series 1993PG-B, 5.350% 05/15/09........ Aa1 AA+ 1,858 -------- WASHINGTON -- 1.4% 2,700 Washington Suburban Sanitation District Authority, Maryland, GO Refunding, Series 2001, 5.000% 06/01/08........ Aaa AAA 2,833 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $191,481)....................... 196,402 --------
SEE NOTES TO FINANCIAL STATEMENTS. 178 NATIONS FUNDS Nations Maryland Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
SHARES VALUE (000) (000) ----------------------------------------------------------------------------- INVESTMENT COMPANIES -- 1.1% (Cost $2,218) 2,218 Nations Tax Exempt Fund, Primary A Class#................ $ 2,218 -------- TOTAL INVESTMENTS (Cost $193,699*)................................ 98.8% 198,620 -------- OTHER ASSETS AND LIABILITIES (NET)............................... 1.2% Cash..................................................... $ 1 Receivable for Fund shares sold.......................... 450 Dividends receivable..................................... 4 Interest receivable...................................... 3,221 Payable for Fund shares redeemed......................... (304) Investment advisory fee payable.......................... (33) Administration fee payable............................... (34) Shareholder servicing and distribution fees payable...... (11) Distributions payable.................................... (666) Accrued Trustees' fees and expenses...................... (49) Accrued expenses and other liabilities................... (67) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)...................................... 2,512 -------- NET ASSETS........................................ 100.0% $201,132 ======== NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 166 Accumulated net realized loss on investments sold........ (645) Net unrealized appreciation of investments............... 4,921 Paid-in capital.......................................... 196,690 -------- NET ASSETS............................................... $201,132 ========
VALUE ----------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($172,600,515 / 15,916,761 shares outstanding)......... $10.84 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($20,760,030 / 1,914,519 shares outstanding)........... $10.84 ======== Maximum sales charge..................................... 3.25% Maximum offering price per share......................... $11.21 INVESTOR B SHARES: Net asset value and offering price per share** ($6,317,716 / 582,613 shares outstanding).............. $10.84 ======== INVESTOR C SHARES: Net asset value and offering price per share** ($1,454,209 / 134,102 shares outstanding).............. $10.84 ========
--------------- *Federal Income Tax Information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. &Zero coupon security. The rate shown reflects the yield to maturity. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Maryland Intermediate Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): FGIC 13.50% Nations Maryland Intermediate Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Transportation Revenue 11.39% Housing Revenue 10.16% SEE NOTES TO FINANCIAL STATEMENTS. 179 NATIONS FUNDS Nations Maryland Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 98.4% MARYLAND -- 86.2% $ 500 Anne Arundel County, Maryland, Consolidated General Improvement GO Refunding, Series 1995, 5.300% 04/01/10......... Aa1 AA+ $ 524 500 Anne Arundel County, Maryland, Consolidated General Improvement GO, Series 1993, 5.250% 07/15/11......... Aa1 AA+ 524 1,000 Baltimore, Maryland, Consolidated Public Improvement GO, Series 1998B, (FGIC Insured), 6.500% 10/15/08......... Aaa AAA 1,032 800 Calvert County, Maryland, PCR Refunding, (Baltimore Gas and Electric Company Project) Series 1993, 5.550% 07/15/14......... A2 BBB+ 816 250 Cumberland, Maryland, GO Refunding, Series 1994A, (FGIC Insured), 5.250% 05/01/21......... Aaa AAA 251 1,000 Harford County, Maryland, GO, Series 1997, 5.500% 12/01/07......... Aa1 AA 1,076 1,900 Howard County, Maryland, Consolidated Public Improvement GO, Series 2000A, 5.250% 02/15/17......... Aaa AAA 1,934 500 Maryland State, Community Development Administration, Department of Housing and Community Development, Revenue, (Residential Project) Series 1998B, AMT, 4.950% 09/01/11......... Aa2 NR 501 810 Maryland State, Community Development Administration, Department of Housing and Community Development, Revenue, (Residential Project) Series 2000A, 5.500% 09/01/12......... Aa2 NR 846 1,000 Maryland State, Community Development Administration, Department of Housing and Community Development, Revenue, Series 1999H, AMT, 6.000% 09/01/17......... Aa2 NR 1,035
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $1,265 Maryland State, Department of Transportation, Series 2002, 5.500% 02/01/11......... Aa2 AA $ 1,361 495 Maryland State, Economic Development Corporation, Student Housing Revenue, (Collegiate Housing Project) Series 1999A, 5.300% 06/01/08......... Baa3 NR 495 575 Maryland State, Economic Development Corporation, Student Housing Revenue, (Collegiate Housing Project) Series 1999A, 5.600% 06/01/11......... Baa3 NR 576 2,000 Maryland State, Economic Development Corporation, Student Housing Revenue, (Salisbury Collegiate Housing Project) Series 1999A, 5.750% 06/01/29......... Baa3 NR 1,990 1,150 Maryland State, Economic Development Corporation, Student Housing Revenue, (Salisbury Collegiate Housing Project) Series 1999A, 6.000% 06/01/30......... Baa3 NR 1,159 300 Maryland State, Health and Higher Education Facilities Authority, Revenue Refunding, (Johns Hopkins Hospital Project) Series 1993, 5.600% 07/01/09......... A1 AA- 310 2,000 Maryland State, Health and Higher Education Facilities Authority, Revenue, (Johns Hopkins University Project) Series 1999, Prerefunded 07/01/09 @ 101, 6.000% 07/01/39......... Aa2 AA 2,224 330 Maryland State, Health and Higher Education Facilities Authority, Revenue, (Loyola College Project) Series 1999, 5.000% 10/01/39......... A2 A 303 500 Maryland State, Stadium Authority, Lease Revenue, (Ocean City Convention Center Project) Series 1995, 5.375% 12/15/13......... Aa2 AA+ 515 1,000 Maryland State, State and Local Facilities Loan GO, Series 1999-2, 5.000% 07/15/07......... Aaa AAA 1,048
SEE NOTES TO FINANCIAL STATEMENTS. 180 NATIONS FUNDS Nations Maryland Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $1,000 Maryland State, State and Local Facilities Loan GO, Series 2000, 5.750% 08/01/11......... Aaa AAA $ 1,100 760 Maryland State, Transportation Authority, Revenue, (Transportation Facilities Project) Series 1978, 6.800% 07/01/16......... Aaa AAA 869 300 Maryland State, Transportation Authority, Revenue, (Transportation Facilities Project) Series 1992, 5.750% 07/01/15......... A1 A+ 302 1,500 Montgomery County, Maryland, Consolidated Public Improvement GO, Series 1992A, 5.800% 07/01/07......... Aaa AAA 1,628 1,000 Montgomery County, Maryland, Economic Development Revenue, (Trinity Health Care Group Project) Series 2001, 5.500% 12/01/16......... Aa3 AA- 1,028 935 Northeast Maryland, Solid Waste Disposal Authority, Revenue, (Ogden Martin Systems - Montgomery County Residential Receivables Project) Series 1993A, AMT, 6.300% 07/01/16......... A2 NR 964 1,000 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 1999, (FSA Insured), 5.125% 10/01/16......... Aaa AAA 1,015 1,000 Prince Georges County, Maryland, Consolidated Public Improvement GO, Series 2000, 5.250% 10/01/18......... Aa3 AA 1,016 500 Prince Georges County, Maryland, PCR Refunding, (Potomac Electric Power Project) Series 1995, 5.750% 03/15/10......... A1 A 542 500 Prince Georges County, Maryland, Stormwater Management, GO, Series 1993, 5.500% 03/15/13......... Aa2 AA 510 2,500 University of Maryland, Systems Auxiliary Facilities and Tuition Revenue, Series 1996A, 5.600% 04/01/13......... Aa3 AA+ 2,613
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MARYLAND -- (CONTINUED) $1,000 University of Maryland, Systems Auxiliary Facilities and Tuition Revenue, Series 1997A, 5.125% 04/01/13......... Aa3 AA+ $ 1,031 1,000 University of Maryland, Systems Auxiliary Facilities and Tuition Revenue, Series 2000A, 5.250% 10/01/11......... Aa3 AA+ 1,055 1,290 Wicomico County, Maryland, Public Improvement GO, Series 1997, (MBIA Insured), 4.800% 12/01/10......... Aaa AAA 1,326 ------- 33,519 ------- GUAM -- 1.5% 600 Guam, Government GO, Series 1993A, 5.200% 11/15/08......... NR BB 583 ------- MISSISSIPPI -- 1.3% 500 Warren County, Mississippi, Environmental Improvement Revenue Refunding, (International Paper Company Project) Series 2000A, AMT, 6.700% 08/01/18......... Baa2 BBB 521 ------- PUERTO RICO -- 0.8% 310 Puerto Rico, Housing Bank and Finance Agency, Single-Family Mortgage Revenue, (Affordable Housing Mortgage- Portfolio I) Series 1995, AMT, (GNMA/FNMA/ FHLMC COLL), 6.100% 10/01/15......... Aaa AAA 321 ------- TENNESSEE -- 3.6% 1,355 Maury County, Tennessee, Industrial Development Board, Multi-Model PCR Refunding, (General Motors Corporation - Saturn Corporation Project) Series 1994, 6.500% 09/01/24......... A3 BBB+ 1,418 -------
SEE NOTES TO FINANCIAL STATEMENTS. 181 NATIONS FUNDS Nations Maryland Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- 2.4% $1,000 Houston, Texas, Independent School District, GO Refunding, Series 1999A, (PSF-GTD), 5.000% 02/15/24......... Aaa AAA $ 944 ------- WASHINGTON -- 2.6% 1,000 Washington State, Motor Vehicle Fuel Tax, GO, Series 1997D, (FGIC Insured), 5.375% 01/01/22......... Aaa AAA 1,002 ------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $36,632)......................... 38,308 -------
SHARES (000) ------ INVESTMENT COMPANIES -- 1.1% (Cost: $431) 431 Nations Tax Exempt Fund, Primary A Class#................ 431 ------- TOTAL INVESTMENTS (Cost $37,063*)................................. 99.5% 38,739 ------- OTHER ASSETS AND LIABILITIES (NET)................ 0.5% Cash..................................................... $ 1 Interest receivable...................................... 596 Payable for Fund shares redeemed......................... (215) Administration fee payable............................... (7) Shareholder servicing and distribution fees payable...... (16) Distributions payable.................................... (93) Accrued Trustees' fees and expenses...................... (45) Accrued expenses and other liabilities................... (38) ------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................. 183 ------- NET ASSETS........................................ 100.0% $38,922 ======= NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 85 Accumulated net realized loss on investments sold........ (646) Net unrealized appreciation of investments............... 1,676 Paid-in capital.......................................... 37,807 ------- NET ASSETS............................................... $38,922 ======= VALUE ---------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($17,860,370 / 1,790,843 shares outstanding)........... $9.97 ======= INVESTOR A SHARES: Net asset value and redemption price per share ($3,114,035 / 312,295 shares outstanding).............. $9.97 ======= Maximum sales charge..................................... 4.75% Maximum offering price per share......................... $10.47 INVESTOR B SHARES: Net asset value and offering price per share** ($17,554,849 / 1,760,246 shares outstanding)........... $9.97 ======= INVESTOR C SHARES: Net asset value and offering price per share** ($392,299 / 39,353 shares outstanding)................. $9.97 =======
--------------- *Federal Income Tax Information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Maryland Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Education Revenue 17.85% Housing Revenue 14.90% SEE NOTES TO FINANCIAL STATEMENTS. 182 NATIONS FUNDS Nations North Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 94.5% NORTH CAROLINA -- 92.4% $1,000 Brunswick County, North Carolina, Certificates of Participation, Series 2000, 5.500% 06/01/20........ Aaa AAA $ 1,019 1,000 Buncombe County, North Carolina, GO Refunding, Series 1993, Prerefunded 07/01/02 @ 102, 5.000% 03/01/03........ Aa2 AA 1,027 5 Buncombe County, North Carolina, Metropolitan Sewer District, Sewer System Revenue, Unrefunded Balance, Series 1992B, Prerefunded 07/01/02 @ 102, 6.750% 07/01/16........ A1 NR 5 2,000 Cabarrus County, North Carolina, Certificates of Participation, Installment Financing Contract, Series 2001, 5.500% 04/01/13........ Aa3 AA- 2,112 1,500 Cabarrus County, North Carolina, GO, (MBIA Insured), 5.300% 02/01/13........ Aaa AAA 1,564 1,200 Charlotte, North Carolina, Airport Revenue, Series 1999B, AMT, (MBIA Insured), 4.750% 07/01/05........ Aaa AAA 1,230 1,275 Charlotte, North Carolina, Airport Revenue, Series 1999B, AMT, (MBIA Insured), 4.850% 07/01/06........ Aaa AAA 1,305 1,260 Charlotte, North Carolina, Airport Revenue, Series 1999B, AMT, (MBIA Insured), 5.000% 07/01/07........ Aaa AAA 1,294 1,000 Charlotte, North Carolina, Airport Revenue, Series 1999B, AMT, (MBIA Insured), 6.000% 07/01/24........ Aaa AAA 1,041 1,000 Charlotte, North Carolina, GO Refunding, Series 1993, 4.500% 02/01/03........ Aaa AAA 1,021 1,295 Charlotte, North Carolina, GO Refunding, Series 1995, 5.000% 06/01/07........ Aaa AAA 1,344
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $1,000 Charlotte, North Carolina, Water and Sewer GO, Series 1994, Prerefunded 02/01/04 @ 102, 5.800% 02/01/16........ Aaa AAA $ 1,069 1,670 Charlotte, North Carolina, Water and Sewer GO, Series 1996, 5.500% 05/01/06........ Aaa AAA 1,782 1,855 Charlotte, North Carolina, Water and Sewer GO, Series 1998, 4.750% 02/01/12........ Aaa AAA 1,887 2,545 Charlotte, North Carolina, Water and Sewer Systems Revenue, Series 1999, 5.375% 06/01/19........ Aa1 AAA 2,579 2,000 Charlotte-Mecklenburg Hospital Authority, Revenue, (Carolinas Healthcare System Project) Series 1997A, 5.000% 01/15/17........ Aa3 NR 1,927 4,500 Charlotte-Mecklenburg Hospital Authority, Revenue, (Carolinas Healthcare System Project) Series 1997A, 5.125% 01/15/22........ Aa3 NR 4,356 2,500 Cleveland County, North Carolina, GO Refunding, Series 1993, (FGIC Insured), 5.100% 06/01/02........ Aaa AAA 2,514 1,000 Cleveland County, North Carolina, GO Refunding, Series 1993, (FGIC Insured), 5.100% 06/01/05........ Aaa AAA 1,028 2,000 Coastal Regional Solid Waste Management Authority, North Carolina, Solid Waste Disposal System Revenue, Series 1992, Prerefunded 06/01/02 @ 102, 6.300% 06/01/04........ A3 BBB+ 2,055 1,490 Concord, North Carolina, Certificate of Participation, Series 2001, (MBIA Insured), 5.000% 06/01/17........ Aaa AAA 1,460 500 Concord, North Carolina, GO Refunding, Series 1992, 6.200% 06/01/05........ Aa2 AA- 511
SEE NOTES TO FINANCIAL STATEMENTS. 183 NATIONS FUNDS Nations North Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $1,000 Concord, North Carolina, Utilities System Revenue, Series 1993, (MBIA Insured), 5.200% 12/01/02........ Aaa AAA $ 1,022 2,120 Cumberland County, North Carolina, GO Refunding, Series 1998, (FGIC Insured), 4.750% 02/01/10........ Aaa AAA 2,171 1,720 Durham and Wake County, North Carolina, Special Apartment District, GO Refunding, Series 1992, 5.750% 04/01/03........ Aaa AAA 1,734 2,300 Durham and Wake County, North Carolina, Special Apartment District, GO Refunding, Series 1993, 5.000% 04/01/03........ Aaa AAA 2,360 1,000 Durham, North Carolina, Water and Sewer Utility System, Revenue, Series 2001, 5.250% 06/01/16........ Aa3 AA 1,020 1,150 Fayetteville, North Carolina, Public Works Commission, Revenue Refunding, Series 1997, (FSA Insured), 5.250% 03/01/07........ Aaa AAA 1,211 2,000 Forsyth County, North Carolina, GO Refunding, Series 1993A, 4.750% 03/01/06........ Aaa AAA 2,058 1,000 Greensboro, North Carolina, Combined Enterprise Systems Revenue, Series 1998A, 5.000% 06/01/18........ Aa3 AA- 979 2,000 Greenville, North Carolina, Combined Enterprise Systems Revenue, Series 1994, 6.000% 09/01/10........ A2 A+ 2,160 2,000 Halifax County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Revenue, (International Paper Company Project) Series 2001A, AMT, 5.900% 09/01/25........ Baa2 BBB 1,939
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $3,000 Haywood County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Solid Waste Disposal Revenue Refunding, (Champion International Corporation Project) Series 1999, AMT, 6.400% 11/01/24........ Baa2 NR $ 3,080 1,000 Haywood County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Solid Waste Disposal Revenue, (Champion International Corporation Project) Series 1993, AMT, 5.500% 10/01/18........ Baa2 BBB 950 1,095 Iredell County, North Carolina, GO, Series 1997, 4.750% 02/01/16........ Aa3 A+ 1,065 1,955 Iredell County, North Carolina, Public Facilities Corporate Installment Payment Revenue, (School Projects) Series 2000, (AMBAC Insured), 5.500% 06/01/09........ Aaa NR 2,093 2,180 Iredell County, North Carolina, Public Facilities Corporate Installment Payment Revenue, (School Projects) Series 2000, (AMBAC Insured), 5.125% 06/01/18........ Aaa NR 2,167 1,305 Johnston County, North Carolina, GO, Series 2000, (FGIC Insured), 5.500% 03/01/12........ Aaa AAA 1,393 2,700 Johnston County, North Carolina, GO, Series 2000, (FGIC Insured), 5.500% 03/01/16........ Aaa AAA 2,848 390 Lower Cape Fear, North Carolina, Water and Sewer Authority, Revenue, Series 1993, AMT, 5.200% 03/01/04........ A2 BBB 402 1,170 Mecklenburg County, North Carolina, GO, Series 2001A, 5.000% 04/01/16........ Aaa AAA 1,178
SEE NOTES TO FINANCIAL STATEMENTS. 184 NATIONS FUNDS Nations North Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $1,000 Mecklenburg County, North Carolina, GO Refunding, Series 1993, 4.250% 04/01/05........ Aaa AAA $ 1,024 1,800 Mecklenburg County, North Carolina, GO, Series 2000D, 5.000% 04/01/11........ Aaa AAA 1,874 1,000 Mecklenburg County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Revenue Refunding, (Fluor Corporation Project) Series 1993, 5.250% 12/01/09........ NR A 1,010 1,195 Morganton, North Carolina, Water and Sewer GO, Series 1995, (FGIC Insured), 5.700% 06/01/11........ Aaa AAA 1,258 2,220 New Hanover County, North Carolina, GO, Series 1995, 5.500% 03/01/10........ Aa2 AA- 2,326 1,350 New Hanover County, North Carolina, GO, Series 2001, 4.600% 06/01/14........ Aa2 AA- 1,331 2,000 New Hanover County, North Carolina, GO, Series 2001, 5.000% 06/01/17........ Aa2 AA- 2,000 4,725 North Carolina State, GO, Series 1994A, 4.700% 02/01/10........ Aaa AAA 4,837 4,000 North Carolina State, GO, Series 1997A, 5.100% 03/01/06........ Aaa AAA 4,206 5,000 North Carolina State, GO, Series 2001A, 4.750% 03/01/14........ Aaa AAA 5,004 1,000 North Carolina, Appalachian State University, Revenue Refunding, (Utility Systems Project) Series 1998, (MBIA Insured), 5.000% 05/15/12........ Aaa AAA 1,033 2,165 North Carolina, Eastern Municipal Power Authority, Revenue, Series 1986A, 5.000% 01/01/17........ Aaa BBB 2,178 1,750 North Carolina, Housing Finance Agency, (Home Ownership Project) Series 2000A-8, AMT, 5.950% 07/01/10........ Aa2 AA 1,841
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $1,210 North Carolina, Housing Finance Agency, (Home Ownership Project) Series 2000A-8, AMT, 6.050% 07/01/12........ Aa2 AA $ 1,274 1,950 North Carolina, Housing Finance Agency, Multi- Family Housing Revenue Refunding, Series 1992B, (FHA COLL), 6.900% 07/01/24........ Aa2 NR 2,002 985 North Carolina, Housing Finance Agency, Revenue, (Home Ownership Project) Series 1999A-6, AMT, 6.000% 01/01/16........ Aa2 AA 1,013 1,500 North Carolina, Housing Finance Agency, Revenue, Series 1999A-3, AMT, 5.150% 01/01/19........ Aa2 AA 1,440 3,960 North Carolina, Housing Finance Agency, Single- Family Housing Revenue, (Home Ownership Project) Series 1998A-1, AMT, 5.350% 01/01/17........ Aa2 AA 3,926 740 North Carolina, Housing Finance Agency, Single- Family Housing Revenue, Series 1994Y, 6.300% 09/01/15........ Aa2 AA 757 2,500 North Carolina, Housing Finance Agency, Student Housing Revenue, (Appalachian Student Housing Project) Series 2000A, (First Union National Bank LOC), Mandatory Put 09/01/03 @ 100, 4.750% 07/01/31........ Aa3 NR 2,552 2,985 North Carolina, Housing Financing Agency, Series 1999A-5, AMT, 5.550% 01/01/19........ Aa2 AA 2,989 2,605 North Carolina, Medical Care Commission, Health Care Facilities Revenue Refunding, (Novant Health, Inc. Project) Series 1998A, (MBIA Insured), 5.000% 10/01/08........ Aaa AAA 2,712
SEE NOTES TO FINANCIAL STATEMENTS. 185 NATIONS FUNDS Nations North Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $2,000 North Carolina, Medical Care Commission, Health Care Facilities Revenue Refunding, (Presbyterian Health Care Services Project) Series 1993, 5.250% 10/01/04........ A1 AA- $ 2,087 1,000 North Carolina, Medical Care Commission, Health Care Facilities Revenue Refunding, (Presbyterian Health Care Services Project) Series 1993, 5.300% 10/01/05........ A1 AA- 1,040 3,000 North Carolina, Medical Care Commission, Health Care Facilities Revenue Refunding, (Presbyterian Health Care Services Project) Series 1993, 5.500% 10/01/14........ A1 AA- 3,035 2,000 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Carolina Medicorp Inc. Project) Series 1996, 5.100% 05/01/07........ A1 AA- 2,064 1,715 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Carolina Medicorp Inc. Project) Series 1996, 5.125% 05/01/08........ A1 AA- 1,759 2,000 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Duke University Hospital Project) Series 1996C, 5.250% 06/01/17........ Aa3 AA 1,973 2,000 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Gaston Memorial Hospital Project) Series 1995, (AMBAC-TCRS Insured), 5.000% 02/15/05........ Aaa AAA 2,080 1,500 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Moore Regal Hospital Project) Series 1993, 5.200% 10/01/13........ Aa3 AA 1,510 1,930 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Rex Hospital, Inc. Project) Series 1993, 5.400% 06/01/02........ A1 A+ 1,941
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $1,620 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Rex Hospital, Inc. Project) Series 1993, Prerefunded 06/01/03 @ 102, 5.600% 06/01/04........ Aaa A+ $ 1,712 3,000 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Rex Hospital, Inc. Project) Series 1993, Prerefunded 06/01/03 @ 102, 6.250% 06/01/17........ Aaa A+ 3,193 1,000 North Carolina, Medical Care Commission, Hospital Revenue Refunding, (Stanley Memorial Hospital Project) Series 1996, (AMBAC Insured), 5.250% 10/01/06........ Aaa AAA 1,056 2,000 North Carolina, Municipal Power Agency Number 1, Revenue, Series 1992, (MBIA-IBC Insured), 7.250% 01/01/07........ Aaa AAA 2,260 1,000 North Carolina, State Education Assistance Authority, Revenue, Series 1995A, AMT, (GTD STD LNS), 5.300% 07/01/03........ A2 NR 1,029 1,625 Orange County, North Carolina, GO, Series 1994, Prerefunded 02/01/04 @ 102, 5.500% 02/01/12........ Aa1 AA+ 1,728 4,645 Orange County, North Carolina, GO, Series 2000, 5.300% 04/01/18........ Aa1 AA+ 4,767 1,390 Pitt County, North Carolina, Certificates of Participation, (School Facilities Project) Series 2000B, 5.750% 04/01/16........ Aaa AAA 1,476 1,240 Pitt County, North Carolina, Revenue Refunding, (Pitt County Memorial Hospital Project) Series 1995, 5.375% 12/01/10........ Aaa NR 1,302 1,000 Raleigh, North Carolina, Combined Enterprise System Revenue, Series 1996, 5.250% 03/01/07........ Aa1 AAA 1,056
SEE NOTES TO FINANCIAL STATEMENTS. 186 NATIONS FUNDS Nations North Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $1,910 Raleigh, North Carolina, GO, Series 1996, 5.300% 06/01/16........ Aaa AAA $ 1,970 1,000 Randolph County, North Carolina, Certificates of Participation, Series 2000, (FSA Insured), 5.200% 06/01/12........ Aaa AAA 1,038 1,000 Randolph County, North Carolina, Certificates of Participation, Series 2000, (FSA Insured), 5.300% 06/01/13........ Aaa AAA 1,040 1,595 Randolph County, North Carolina, Certificates of Participation, Series 2000, (FSA Insured), 5.500% 06/01/14........ Aaa AAA 1,671 2,000 Randolph County, North Carolina, GO, Series 1992, Prerefunded 05/01/02 @ 102, 6.250% 05/01/08........ Aa3 AA- 2,048 1,000 Robeson County, North Carolina, Industrial Facilities, PCR Refunding, (Campbell Soup Company Project) Series 1991, 6.400% 12/01/06........ NR A 1,098 1,000 Rockingham, North Carolina, Certificates of Participation, Series 2002, (AMBAC Insured), 5.000% 04/01/10........ Aaa AAA 1,036 1,690 University of North Carolina, Chapel Hill, Hospital Revenue Refunding, Series 1999, (AMBAC Insured), 5.250% 02/15/12........ Aaa AAA 1,756 1,000 University of North Carolina, Charlotte, Revenue Refunding, (Housing and Dining Systems Project) Series 1993M, (MBIA Insured), 4.800% 01/01/04........ Aaa AAA 1,031 3,500 University of North Carolina, University Utilities Systems Revenue Refunding, Series 1993, 5.200% 08/01/06........ Aa1 AA 3,585 1,000 University of North Carolina, University Utilities Systems Revenue Refunding, Series 1993, 5.000% 08/01/09........ Aa1 AA 1,028
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $1,600 University of North Carolina, University Utilities Systems Revenue Refunding, Series 1993, 5.000% 08/01/11........ Aa1 AA $ 1,645 1,000 Wake County, North Carolina, GO Refunding, Series 1993, 4.700% 04/01/05........ Aaa AAA 1,023 1,500 Wake County, North Carolina, GO, Series 2001B, 4.500% 02/01/14........ Aaa AAA 1,465 3,065 Wake County, North Carolina, Hospital Revenue, Series 1993, (MBIA Insured), 5.125% 10/01/26........ Aaa AAA 3,041 1,000 Wake County, North Carolina, Public Improvement GO, Series 1994, 4.600% 02/01/06........ Aaa AAA 1,026 1,200 Wayne County, North Carolina, GO Refunding, Series 1993, (MBIA Insured), 4.900% 04/01/05........ Aaa AAA 1,250 1,000 Wilmington, North Carolina, Public Improvement GO, Series 1997A, (FGIC Insured), 5.000% 04/01/11........ Aaa AAA 1,038 1,000 Wilmington, North Carolina, Public Improvement GO, Series 1997A, (FGIC Insured), 5.000% 04/01/13........ Aaa AAA 1,029 -------- 180,433 -------- PUERTO RICO -- 0.6% 1,000 Puerto Rico, Electric Power Authority, Power Revenue Refunding, Series 1995Y, (MBIA Insured), 7.000% 07/01/07........ Aaa AAA 1,142 -------- SOUTH CAROLINA -- 0.9% 1,500 Calhoun County, South Carolina, Solid Waste Disposal Facility Revenue, (Carolina Eastman Company Project) Series 1992, AMT, 6.750% 05/01/17........ A2 A- 1,743 --------
SEE NOTES TO FINANCIAL STATEMENTS. 187 NATIONS FUNDS Nations North Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- WASHINGTON -- 0.6% $1,150 Washington State, Public Power Supply Systems, Revenue Refunding, Series 1993A, (MBIA-IBC Insured), 5.800% 07/01/07........ Aaa AAA $ 1,235 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $178,903)....................... 184,553 -------- SHARES (000) --------- INVESTMENT COMPANIES -- 4.5% (Cost: $8,867) 8,867 Nations Tax Exempt Fund, Primary A Class#................................. 8,867 -------- TOTAL INVESTMENTS (Cost $187,770*)................ 99.0% 193,420 -------- OTHER ASSETS AND LIABILITIES (NET)........................... 1.0%
Receivable for investment securities sold................ $ 491 Receivable for Fund shares sold.......................... 848 Dividends receivable..................................... 9 Interest receivable...................................... 2,788 Payable for Fund shares redeemed......................... (340) Investment advisory fee payable.......................... (30) Administration fee payable............................... (33) Shareholder servicing and distribution fees payable...... (8) Distributions payable.................................... (692) Payable for investment securities purchased.............. (1,043) Accrued Trustees' fees and expenses...................... (46) Accrued expenses and other liabilities................... (67) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................. 1,877 -------- NET ASSETS........................................ 100.0% $195,297 ======== NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 726 Accumulated net realized loss on investments sold........ (1,463) Net unrealized appreciation of investments............... 5,650 Paid-in capital.......................................... 190,384 -------- NET ASSETS............................................... $195,297 ======== VALUE -------------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($176,671,178 / 16,931,037 shares outstanding)......... $10.43 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($11,975,464 / 1,147,520 shares outstanding)........... $10.44 ======== Maximum sales charge..................................... 3.25% Maximum offering price per share......................... $10.79 INVESTOR B SHARES: Net asset value and offering price per share** ($5,917,236 / 567,087 shares outstanding).............. $10.43 ======== INVESTOR C SHARES: Net asset value and offering price per share** ($733,543 / 70,281 shares outstanding)................. $10.44 ========
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations North Carolina Intermediate Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Hospital Revenue 15.00% Pre-Refunded 11.19% SEE NOTES TO FINANCIAL STATEMENTS. 188 NATIONS FUNDS Nations North Carolina Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 88.9% NORTH CAROLINA -- 88.9% $1,000 Charlotte, North Carolina, GO, Series 2000, 5.500% 06/01/12........ Aaa AAA $ 1,073 1,000 Craven County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, PCR Refunding, (Weyerhaeuser Company Project) Series 1992, 6.350% 01/01/10........ NR BBB 1,033 1,000 Cumberland County, North Carolina, GO, Series 1998, (FGIC Insured), 5.000% 03/01/17........ Aaa AAA 996 1,305 Greensboro, North Carolina, Enterprise Systems Revenue, Series 1998A, 5.500% 06/01/08........ Aa3 AA- 1,396 1,000 Greensboro, North Carolina, Public Improvement GO, Series 1998, 4.700% 04/01/10........ Aa1 AAA 1,024 1,000 Greenville, North Carolina, Utilities Commission Revenue, Series 2000A, (MBIA Insured), 5.500% 09/01/19........ Aaa AAA 1,024 1,000 Haywood County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Solid Waste Disposal Revenue Refunding, (Champion International Corporation Project) Series 1999, AMT, 6.400% 11/01/24........ Baa2 NR 1,027 1,000 Haywood County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Solid Waste Disposal Revenue, (Champion International Corporation Project) Series 1993, AMT, 5.500% 10/01/18........ Baa2 BBB 950 1,925 Johnston County, North Carolina, GO, Series 2000, (FGIC Insured), 5.500% 03/01/15........ Aaa AAA 2,039
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $1,300 Martin County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Solid Waste Disposal Revenue, (Weyerhaeuser Company Project) Series 1993, AMT, 5.650% 12/01/23........ Baa2 BBB $ 1,229 1,000 Mecklenburg County, North Carolina, GO Refunding, Series 1993, 6.000% 04/01/11........ Aaa AAA 1,115 2,000 Mecklenburg County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Revenue Refunding, (Fluor Corporation Project) Series 1993, 5.250% 12/01/09........ NR A 2,021 1,000 Monroe, North Carolina, Combined Enterprise Systems, Revenue, Series 1994, Prerefunded 03/01/04 @ 102, 6.000% 03/01/14........ A3 A 1,074 1,000 Morganton, North Carolina, Water and Sewer GO, Series 1995, (FGIC Insured), 5.600% 06/01/10........ Aaa AAA 1,053 400 New Hanover County, North Carolina, GO, Series 2001, 4.600% 06/01/14........ Aa2 AA- 394 1,000 New Hanover County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Solid Waste Disposal Revenue, (Occidental Petroleum Corporation Project) Series 1994, AMT, 6.500% 08/01/14........ Baa3 BBB 1,015 1,000 North Carolina, Appalachian State University, Revenue Refunding, Series 1998, (MBIA Insured), 5.000% 05/15/18........ Aaa AAA 981 1,210 North Carolina, Housing Finance Agency, Revenue, (Home Ownership Project) Series 1998A-2, AMT, 5.200% 01/01/20........ Aa2 AA 1,162
SEE NOTES TO FINANCIAL STATEMENTS. 189 NATIONS FUNDS Nations North Carolina Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $1,130 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Gaston Memorial Hospital Project) Series 1995, (AMBAC-TCRS Insured), 5.250% 02/15/07........ Aaa AAA $ 1,186 860 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Halifax Regional Medical Center, Inc. Project) Series 1998, 4.600% 08/15/06........ Baa1 NR 845 1,500 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Pitt County Memorial Hospital Project) Series 1998B, 4.750% 12/01/28........ Aa3 AA- 1,308 1,000 North Carolina, Medical Care Commission, Health Care Facilities Revenue, (Rex Hospital, Inc. Project) Series 1993, Prerefunded 06/01/03 @ 102, 6.250% 06/01/17........ Aaa A+ 1,064 1,000 North Carolina, Medical Care Commission, Hospital Revenue, (Pitt County Memorial Hospital Project) Series 1998B, 5.000% 12/01/18........ Aa3 AA- 954 1,000 North Carolina, Municipal Power Agency Number 1, Revenue Refunding, (Catawba Electric Project) Series 1992, (FGIC Insured), 6.200% 01/01/18........ Aaa AAA 1,042 1,500 Onslow County, North Carolina, Combined Enterprise Systems, Revenue, Series 1994, (MBIA Insured), 5.875% 06/01/09........ Aaa AAA 1,609 1,000 Orange County, North Carolina, GO, Series 1994, Prerefunded 02/01/04 @ 102, 5.500% 02/01/14........ Aa1 AA+ 1,063 1,000 Orange County, North Carolina, GO, Series 2000, 5.300% 04/01/17........ Aa1 AA+ 1,031 1,000 Pitt County, North Carolina, Certificates of Participation, (School Facilities Project) Series 2000B, 5.500% 04/01/25........ Aaa AAA 1,011
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- NORTH CAROLINA -- (CONTINUED) $1,000 Pitt County, North Carolina, Hospital Revenue, (Pitt County Memorial Hospital Project) Series 1995, 5.250% 12/01/21........ Aaa NR $ 1,007 1,000 Randolph County, North Carolina, Certificates of Participation, Series 2000, (FSA Insured), 5.500% 06/01/15........ Aaa AAA 1,042 1,000 Randolph County, North Carolina, Certificates of Participation, Series 2000, (FSA Insured), 5.750% 06/01/22(a)..... Aaa AAA 1,043 1,000 Wilmington, North Carolina, Water Authority, GO, Series 1994, 5.700% 06/01/15........ Aa3 AA- 1,075 1,000 Wilson, North Carolina, GO, Series 2000, (AMBAC Insured), 5.100% 06/01/14........ Aaa AAA 1,034 ------- 36,920 ------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $35,226)......................... 36,920 -------
SHARES (000) --------- INVESTMENT COMPANIES -- 10.2% (Cost: $4,218) 4,218 Nations Tax Exempt Fund, Primary A Class# 4,218 ------- TOTAL INVESTMENTS (Cost $39,444*)................. 99.1% 41,138 ------- OTHER ASSETS AND LIABILITIES (NET)........................... 0.9% Dividends receivable..................... $ 3 Interest receivable...................... 590 Payable for Fund shares redeemed......... (17) Administration fee payable............... (7) Shareholder servicing and distribution fees payable........................... (14) Distributions payable.................... (99) Accrued Trustees' fees and expenses...... (45) Accrued expenses and other liabilities... (42) ------- TOTAL OTHER ASSETS AND LIABILITIES (NET).................................. 369 ------- NET ASSETS........................ 100.0% $41,507 ======= NET ASSETS CONSIST OF: Undistributed net investment income...... $ 97 Accumulated net realized loss on investments sold....................... (1,401) Net unrealized appreciation of investments............................ 1,694 Paid-in capital.......................... 41,117 ------- NET ASSETS............................... $41,507 =======
SEE NOTES TO FINANCIAL STATEMENTS. 190 NATIONS FUNDS Nations North Carolina Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
VALUE --------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($22,220,703 / 2,251,788 shares outstanding)........................... $9.87 ======= INVESTOR A SHARES: Net asset value and redemption price per share ($4,058,501 / 411,401 shares outstanding)........................... $9.87 ======= Maximum sales charge..................... 4.75% Maximum offering price per share......... $10.36 INVESTOR B SHARES: Net asset value and offering price per share** ($15,093,121 / 1,529,505 shares outstanding)........................... $9.87 ======= INVESTOR C SHARES: Net asset value and offering price per share** ($134,809 / 13,664 shares outstanding)........................... $9.87 =======
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations North Carolina Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): FGIC 12.36% Nations North Carolina Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Hospital Revenue 10.34% Resource Recovery 10.17% Pre-Refunded 10.14% SEE NOTES TO FINANCIAL STATEMENTS. 191 NATIONS FUNDS Nations South Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 95.4% SOUTH CAROLINA -- 94.2% $1,100 Anderson County, South Carolina, GO Revenue Refunding, Series 1992, 6.400% 04/01/03........ Aa3 AA- $ 1,126 1,300 Anderson County, South Carolina, GO Revenue Refunding, Series 1992, 6.500% 04/01/04........ Aa3 AA- 1,331 1,240 Anderson County, South Carolina, Sewer Authority, Revenue Refunding, Series 1993, (FGIC Insured), 5.200% 07/01/03........ Aaa AAA 1,281 1,000 Anderson County, South Carolina, Sewer Authority, Revenue Refunding, Series 1993, (FGIC Insured), 5.500% 07/01/06........ Aaa AAA 1,039 1,500 Anderson County, South Carolina, Sewer Authority, Revenue Refunding, Series 1993, (FGIC Insured), 5.600% 07/01/07........ Aaa AAA 1,575 1,000 Anderson County, South Carolina, Sewer Authority, Revenue Refunding, Series 1993, (FGIC Insured), 5.600% 07/01/08........ Aaa AAA 1,050 1,725 Beaufort County, South Carolina, School District, GO, Series 2000B, (SCSDE), 5.500% 03/01/16........ Aa1 AA+ 1,787 1,200 Beaufort County, South Carolina, School District, GO, Series 2000C, (SCSDE), 5.125% 03/01/12........ Aa1 AA+.. 1,238 1,000 Berkeley County, South Carolina, Refunding and Improvement Authority, GO, Series 1993, (FGIC Insured), 5.300% 05/01/04........ Aaa AAA 1,044 1,000 Berkeley County, South Carolina, Refunding and Improvement Authority, GO, Series 1993, (FGIC Insured), 5.400% 05/01/05........ Aaa AAA 1,040
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $1,000 Berkeley County, South Carolina, Refunding and Improvement Authority, GO, Series 1993, (FGIC Insured), 5.500% 05/01/06........ Aaa AAA $ 1,049 2,500 Berkeley County, South Carolina, School District, GO, Series 2000, (SCSDE), 5.000% 04/01/21........ Aa1 AA+ 2,431 2,000 Calhoun County, South Carolina, Solid Waste Disposal Facility Revenue, (Carolina Eastman Company Project) Series 1992, AMT, 6.750% 05/01/17........ A2 A- 2,324 1,000 Camden, South Carolina, Combined Public Utilities Revenue Refunding and Improvement, Series 1997, (MBIA Insured), 5.500% 03/01/17........ Aaa AAA 1,027 3,000 Charleston County, South Carolina, Hospital Facilities, Revenue Refunding and Improvement, (Bon Secours Health Systems Project) Series 1993, (FSA Insured), 5.500% 08/15/10........ Aaa AAA 3,186 1,000 Charleston County, South Carolina, Hospital Facilities, Revenue Refunding and Improvement, (Medical Society Health Project) Series 1992, (MBIA Insured), 6.000% 10/01/09........ Aaa AAA 1,040 2,370 Charleston County, South Carolina, Hospital Facilities, Revenue, (Care Alliance Health Services Project) Series 1999A, (FSA Insured), 5.125% 08/15/15........ Aaa AAA 2,417 1,000 Charleston County, South Carolina, Public Improvement Authority, GO, Series 1994, (State Aid Withholding), Prerefunded 06/01/06 @ 100, 5.500% 06/01/14........ Aa1 AA+ 1,066
SEE NOTES TO FINANCIAL STATEMENTS. 192 NATIONS FUNDS Nations South Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $1,000 Charleston County, South Carolina, Revenue, (Care Alliance Health Services Project) Series 1999A, (FSA Insured), 5.000% 08/15/12........ Aaa AAA $ 1,013 1,040 Charleston County, South Carolina, Solid Waste User Fee Revenue, Series 1994, (MBIA Insured), 5.800% 01/01/06........ Aaa AAA 1,112 5,105 Charleston, South Carolina, Waterworks and Sewer Capital Improvement Revenue Refunding, Series 1998, 5.250% 01/01/08........ Aa3 AA- 5,387 9,500 Charleston, South Carolina, Waterworks and Sewer Capital Improvement Revenue Refunding, Series 1998, (FGIC Insured), 4.500% 01/01/24........ Aaa AAA 8,294 1,000 Columbia, South Carolina, Parking Facilities Revenue Refunding, Series 1994, (AMBAC Insured), 5.750% 12/01/09........ Aaa AAA 1,052 5,500 Columbia, South Carolina, Waterworks and Sewer Systems Revenue Refunding, Series 1993, 5.500% 02/01/09........ Aa2 AA 5,884 1,750 Darlington County, South Carolina, IDR, (Nucor Corporation Project) Series 1993A, AMT, 5.750% 08/01/23........ A1 AA- 1,752 2,000 Darlington County, South Carolina, PCR, (Carolina Power and Light - Annual Tender Project) Series 1983, 6.600% 11/01/10........ A2 BBB+ 2,097 1,000 Darlington County, South Carolina, PCR, (Carolina Power and Light - Annual Tender Project) Series 1983, (MBIA-IBC Insured), 6.600% 11/01/10........ Aaa AAA 1,055 1,250 Florence, South Carolina, Water and Sewer Revenue Refunding, Series 1993, (AMBAC Insured), 5.150% 03/01/06........ Aaa AAA 1,289
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $1,225 Georgetown County, South Carolina, Environmental Revenue, (International Paper Company Project) Series 1997A, AMT, 5.700% 10/01/21........ Baa2 BBB $ 1,161 4,000 Georgetown County, South Carolina, PCR Refunding, (International Paper Company Project) Series 1999A, 5.125% 02/01/12........ Baa2 BBB 3,939 2,480 Georgetown County, South Carolina, School District, GO, Series 2000,(SCSDE), 5.500% 03/01/09........ Aa1 AA+ 2,666 1,000 Grand Strand, South Carolina, Water and Sewer Authority, Revenue Refunding, Series 1992, (MBIA Insured), 6.000% 06/01/02........ Aaa AAA 1,007 1,950 Grand Strand, South Carolina, Water and Sewer Authority, Revenue Refunding, Series 1992, (MBIA Insured), 6.300% 06/01/05........ Aaa AAA 2,004 1,000 Grand Strand, South Carolina, Water and Sewer Authority, Revenue Refunding, Series 1992, (MBIA Insured), 6.400% 06/01/07........ Aaa AAA 1,028 1,000 Greenville, South Carolina, Hospital Facilities Revenue Refunding, Series 1993C, 5.300% 05/01/04........ Aa3 AA 1,036 4,000 Greenville, South Carolina, Hospital Facilities Revenue Refunding, Series 1993C, 5.400% 05/01/05........ Aa3 AA 4,141 2,400 Greenville, South Carolina, Hospital Facilities Revenue Refunding, Series 1993C, 5.500% 05/01/11........ Aa3 AA 2,439 1,000 Greenville, South Carolina, Hospital Facilities Revenue Refunding, Series 1996A, (GTY-AGMT), 5.400% 05/01/07........ Aa3 AA 1,044 4,000 Greenville, South Carolina, Hospital Facilities Revenue Refunding, Series 1996B, (GTY-AGMT), 5.250% 05/01/17........ Aa3 AA 3,930
SEE NOTES TO FINANCIAL STATEMENTS. 193 NATIONS FUNDS Nations South Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $1,385 Greenville, South Carolina, Hospital Facilities Revenue, Series 2001, 5.500% 05/01/26........ Aaa AAA $ 1,385 2,000 Greenville, South Carolina, Water Utility Improvement Waterworks Revenue, Series 1997, 6.000% 02/01/06........ Aa1 AAA 2,163 1,000 Greenville, South Carolina, Water Utility Improvement Waterworks Revenue, Series 1997, 6.000% 02/01/08........ Aa1 AAA 1,095 1,885 Greenwood, South Carolina, Combined Public Utilities, Revenue Refunding and Improvement, Series 1993, (AMBAC Insured), 5.500% 12/01/06........ Aaa AAA 1,970 2,000 Greenwood, South Carolina, Combined Public Utilities, Revenue Refunding and Improvement, Series 1993, (AMBAC Insured), 5.500% 12/01/07........ Aaa AAA 2,110 1,060 Greenwood, South Carolina, Combined Public Utilities, Revenue Refunding and Improvement, Series 1993, (AMBAC Insured), 5.500% 12/01/08........ Aaa AAA 1,118 1,000 Hilton Head Island, South Carolina, GO, Series 2001, 5.000% 03/01/13........ Aa3 AA 1,020 1,200 Horry County, South Carolina, Hospital Facilities Revenue, (Conway Hospital, Inc. Project) Series 1998, (AMBAC Insured), 4.875% 07/01/11............... Aaa AAA 1,213 1,275 Horry County, South Carolina, School District, GO, Series 1995B, (MBIA Insured, SCSDE), 5.700% 03/01/16........ Aaa AAA 1,308 1,725 Lancaster County, South Carolina, School District, GO, Series 1991, (MBIA Insured), Prerefunded 07/01/02 @ 102, 6.500% 07/01/07........ Aaa AAA 1,780
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $1,180 Lexington County, South Carolina, Health Services District, Revenue Refunding, (Health Service District and Lexmed, Inc. Project) Series 1997, (FSA Insured), 5.500% 11/01/06........ Aaa AAA $ 1,251 3,000 Lexington County, South Carolina, Health Services District, Revenue Refunding, Series 1997, (FSA Insured), 5.125% 11/01/21........ Aaa AAA 2,901 2,000 Lexington, South Carolina, Water and Sewer Authority, Revenue, Series 1997, Prerefunded 10/01/14 @ 100, 5.450% 04/01/19........ NR AA 2,147 4,500 Medical University of South Carolina, Hospital Facilities, Revenue Refunding, Series 1990A, 7.000% 07/01/02........ Baa2 BBB+ 4,549 3,725 Medical University of South Carolina, Hospital Facilities, Revenue Refunding, Series 1990A, 7.200% 07/01/05........ Baa2 BBB+ 3,758 2,500 Myrtle Beach, South Carolina, Water and Sewer Improvement Revenue Refunding, Series 1993, (MBIA Insured), 5.000% 03/01/03........ Aaa AAA 2,565 1,750 North Charleston, South Carolina, GO Refunding, Series 1993, 5.600% 08/01/07........ A2 AA- 1,816 1,725 North Charleston, South Carolina, GO Refunding, Series 1993, 5.750% 08/01/08........ A2 AA- 1,791 1,000 North Charleston, South Carolina, Sewer District, Revenue Refunding, Series 1992A, (MBIA Insured), 6.000% 07/01/02........ Aaa AAA 1,011 1,850 Piedmont Municipal Power Agency, South Carolina, Electric Revenue Refunding, Series 1991, (FGIC Insured), 6.850% 01/01/07........ Aaa AAA 1,896
SEE NOTES TO FINANCIAL STATEMENTS. 194 NATIONS FUNDS Nations South Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $1,600 Piedmont Municipal Power Agency, South Carolina, Electric Revenue Refunding, Series 1992, (MBIA Insured), 6.000% 01/01/05........ Aaa AAA $ 1,707 4,000 Piedmont Municipal Power Agency, South Carolina, Electric Revenue Refunding, Series 1996B, (MBIA Insured), 5.250% 01/01/09........ Aaa AAA 4,168 2,020 Richland County, South Carolina, GO Refunding, Series 1994B, (State Aid Withholding), 4.750% 03/01/03........ Aa1 AA 2,069 2,120 Richland County, South Carolina, GO Refunding, Series 1994B, (State Aid Withholding), 4.850% 03/01/04........ Aa1 AA 2,193 2,250 Richland County, South Carolina, GO Refunding, Series 1994B, (State Aid Withholding), 4.950% 03/01/05........ Aa1 AA 2,326 3,000 Richland County, South Carolina, PCR Refunding, (Union Camp Corporation Project) Series 1992C, 5.875% 11/01/02........ Baa2 BBB 3,052 6,000 Richland County, South Carolina, School District Number 1, GO, Series 1996, (SCSDE), 4.625% 03/01/22........ Aa1 AA+ 5,443 1,590 Richland County, South Carolina, School District Number 2, GO Refunding, Series 1994A, (MBIA Insured, SCSDE), 4.900% 03/01/04........ Aaa AAA 1,646 1,655 Richland County, South Carolina, School District Number 2, GO Refunding, Series 1994A, (MBIA Insured, SCSDE), 5.000% 03/01/05........ Aaa AAA 1,723 1,000 Rock Hill, South Carolina, Combined Public Utility Systems Revenue, Series 1991, (FGIC Insured), 6.200% 01/01/03........ Aaa AAA 1,013 6,135 South Carolina State, Capital Improvement GO, Series 1996A, 3.500% 07/01/06........ Aaa AAA 6,084
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $3,350 South Carolina State, Capital Improvement GO, Series 2001A, 3.500% 01/01/15........ Aaa AAA $ 2,874 1,245 South Carolina State, GO, Series 2000A, 4.800% 03/01/09........ Aaa AAA 1,286 5,000 South Carolina State, Housing Finance and Development Authority, Multi-Family Housing Revenue, (United Dominion Realty Trust Project) Series 1994, AMT, Mandatory Put 05/01/04 @ 100, 6.500% 05/01/24........ NR BBB- 5,055 2,135 South Carolina State, Housing Finance and Development Authority, Rental Housing Revenue, (Windsor Shores Project) Series 1993B, (FHA Insured), 5.600% 07/01/16........ NR AA 2,108 4,300 South Carolina State, Housing Finance and Development Authority, Revenue Refunding, Series 1992A, (FNMA/ FHA COLL), 6.800% 11/15/11........ Aaa NR 4,391 1,250 South Carolina State, Jobs Economic Development Authority, Hospital Facility Revenue, (Georgetown Memorial Hospital Project) Series 2001, 5.250% 02/01/21........ NR AA 1,205 4,565 South Carolina State, Port Authority, Revenue, Series 1998, AMT, (FSA Insured), 5.250% 07/01/13........ Aaa AAA 4,610 3,495 South Carolina State, Ports Authority, Ports Revenue, Series 1991, AMT, (AMBAC Insured), 6.750% 07/01/21........ Aaa AAA 3,578 3,000 South Carolina State, Public Service Authority, Revenue Refunding, Series 1992A, 6.200% 07/01/05........ Aa2 AA- 3,078 1,000 South Carolina State, Public Service Authority, Revenue Refunding, Series 1993A, 5.200% 07/01/03........ Aa2 AA- 1,030
SEE NOTES TO FINANCIAL STATEMENTS. 195 NATIONS FUNDS Nations South Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $1,500 South Carolina State, Public Service Authority, Revenue Refunding, Series 1993A, (MBIA Insured), 5.300% 07/01/05........ Aaa AAA $ 1,549 2,000 South Carolina State, Public Service Authority, Revenue Refunding, Series 1993C, (AMBAC Insured), 5.100% 01/01/11........ Aaa AAA 2,027 4,000 South Carolina, Educational Facilities for Non-Profit Institutions, Revenue, (Furman University Project) Series 1996A, (MBIA Insured), 5.500% 10/01/26........ Aaa AAA 4,020 1,500 South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, (Oconee Memorial Hospital, Inc. Project) Series 1995, (CONNIE LEE Insured), 6.150% 03/01/15........ NR AAA 1,586 4,500 South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, (Palmetto Health Alliance Project) Series 2000A, 7.125% 12/15/15........ Baa2 BBB 4,785 6,500 South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, (South Carolina Baptist Hospital Project) Series 1993, (AMBAC Insured), 5.450% 08/01/15........ Aaa AAA 6,551 2,375 South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, Series 1999, (FSA Insured), 5.300% 02/01/14........ Aaa AAA 2,424 1,000 South Carolina, State Public Service Authority, Revenue Refunding, Series 1992A, 6.375% 07/01/11........ Aa2 AA- 1,030
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $1,000 South Carolina, Transportation Infrastructure Revenue, Series 1998A, (MBIA Insured), 4.500% 10/01/17........ Aaa AAA $ 923 1,025 Spartanburg County, South Carolina, GO, Series 1992, 5.800% 02/01/05........ Aa2 AA 1,074 1,005 Spartanburg County, South Carolina, GO, Series 1992, 5.700% 02/01/06........ Aa2 AA 1,052 1,000 Spartanburg County, South Carolina, GO, Series 1992, 5.700% 02/01/09........ Aa2 AA 1,045 1,275 Spartanburg County, South Carolina, School District Number 007, GO, Series 2001, (SCSDE), 4.000% 03/01/12........ Aa1 AA+ 1,206 3,240 Spartanburg County, South Carolina, School District Number 007, GO, Series 2001, (SCSDE), 4.125% 03/01/13........ Aa1 AA+ 3,060 2,850 Spartanburg, South Carolina, Sewer District, Sewer Systems Revenue, Series 1997, AMT, (MBIA Insured), Prerefunded 06/01/07 @ 101, 5.500% 06/01/27........ Aaa AAA 3,065 3,445 Spartanburg, South Carolina, Waterworks and Sewer Systems Authority, Revenue, Unrefunded Balance, Series 1992, Prerefunded 06/01/02 @ 101, 6.200% 06/01/09........ A1 A+ 3,505 1,000 West Columbia, South Carolina, Water and Sewer Revenue Refunding, Series 1992, (MBIA Insured), 6.300% 10/01/07........ Aaa AAA 1,041 1,000 Western Carolina, Regional Sewer Systems Authority, Revenue Refunding, Series 1993, (FGIC Insured), 5.500% 03/01/10........ Aaa AAA 1,045
SEE NOTES TO FINANCIAL STATEMENTS. 196 NATIONS FUNDS Nations South Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $2,500 York County, South Carolina, Exempt Facilities IDR, (Hoechst Celanese Corporation Project) Series 1994, AMT, 5.700% 01/01/24........ Baa2 BBB $ 2,329 -------- 223,184 -------- TEXAS -- 1.2% 1,000 Brazos River Authority, Texas, PCR Refunding, (Texas Electric Company Project) Series 2001A, AMT, Mandatory Put 04/01/04 @ 100, 4.950% 10/01/30........ NR BBB+.. 1,008 2,000 Dallas-Fort Worth, Texas, International Airport Facilities Improvement, Corporate Revenue Refunding, (American Airlines Project) Series 2000C, AMT, Mandatory Put 11/01/07 @ 100, 6.150% 05/01/29........ B1 BB 1,875 -------- 2,883 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $217,791)....................... 226,067 --------
SHARES VALUE (000) (000) -------------------------------------------------------------------------------- INVESTMENT COMPANIES -- 3.4% (Cost: $8,134) 8,134 Nations Tax Exempt Fund, Primary A Class#................ $ 8,134 -------- TOTAL INVESTMENTS (Cost $225,925*)................................ 98.8% 234,201 -------- OTHER ASSETS AND LIABILITIES (NET)................ 1.2% Cash..................................................... $ 1 Receivable for Fund shares sold.......................... 629 Dividends receivable..................................... 8 Interest receivable...................................... 3,242 Payable for Fund shares redeemed......................... (17) Investment advisory fee payable.......................... (37) Administration fee payable............................... (40) Shareholder servicing and distribution fees payable...... (14) Distributions payable.................................... (902) Accrued Trustees' fees and expenses...................... (47) Accrued expenses and other liabilities................... (78) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................. 2,745 -------- NET ASSETS........................................ 100.0% $236,946 ======== NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 883 Accumulated net realized loss on investments sold........ (239) Net unrealized appreciation of investments............... 8,276 Paid-in capital.......................................... 228,026 -------- NET ASSETS............................................... $236,946 ========
SEE NOTES TO FINANCIAL STATEMENTS. 197 NATIONS FUNDS Nations South Carolina Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
VALUE -------------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($207,645,196 / 19,767,288 shares outstanding)......... $10.50 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($17,791,228 / 1,693,903 shares outstanding)........... $10.50 ======== Maximum sales charge..................................... 3.25% Maximum offering price per share......................... $10.86 INVESTOR B SHARES: Net asset value and offering price per share** ($7,796,806 / 742,218 shares outstanding).............. $10.50 ======== INVESTOR C SHARES: Net asset value and offering price per share** ($3,712,522 / 353,331 shares outstanding).............. $10.51 ========
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations South Carolina Intermediate Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): MBIA 13.49% Nations South Carolina Intermediate Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Hospital Revenue 20.10% Water Revenue 16.36% SEE NOTES TO FINANCIAL STATEMENTS. 198 NATIONS FUNDS Nations South Carolina Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 100.1% SOUTH CAROLINA -- 100.1% $ 500 Charleston County, South Carolina, Hospital Facilities, Revenue Refunding and Improvement, (Bon Secours Health Systems Project) Series 1993, (FSA Insured), 5.625% 08/15/25........ Aaa AAA $ 529 1,000 Chester County, South Carolina, IDR Refunding, (Springs Industries Inc. Project) Series 1992, 7.350% 02/01/14........ NR NR 1,003 1,500 Columbia, South Carolina, Waterworks and Sewer Systems Revenue Refunding, Series 1993, 5.500% 02/01/09........ Aa2 AA 1,605 2,700 Columbia, South Carolina, Waterworks and Sewer Systems Revenue, Series 1991, 2.334%& 02/01/03....... Aa2 AA 2,649 1,500 Darlington County, South Carolina, IDR, (Sonoco Products Company Project) Series 1995, AMT, 6.125% 06/01/25........ A2 A- 1,511 2,000 Georgetown County, South Carolina, PCR Refunding, (International Paper Company Project) Series 1999A, 5.125% 02/01/12........ Baa2 BBB 1,969 1,500 Greenville, South Carolina, Water Utility Improvement, Waterworks Revenue, Series 1997, 5.500% 02/01/22........ Aa1 AAA 1,524 1,100 Horry County, South Carolina, Hospital Facilities Revenue, (Conway Hospital, Inc. Project) Series 1998, (AMBAC Insured), 4.750% 07/01/10........ Aaa AAA 1,110 1,575 Medical University, South Carolina, Hospital Facilities Revenue, Series 1999, 5.500% 07/01/09........ Baa2 BBB+ 1,619 1,000 Oconee County, South Carolina, School District, GO, Series 1994, (MBIA Insured), 5.100% 01/01/13........ Aaa AAA 1,011
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- (CONTINUED) $1,000 Piedmont Municipal Power Agency, South Carolina, Electric Revenue Refunding, Series 1996B, (MBIA Insured), 5.250% 01/01/09........ Aaa AAA $ 1,042 1,000 South Carolina State, Capital Improvement, GO, Series 2001A, 3.500% 01/01/16........ Aaa AAA 841 2,000 South Carolina State, Public Service Authority, Revenue, Series 1999A, (MBIA Insured), 5.625% 01/01/13........ Aaa AAA 2,132 1,000 South Carolina, Educational Facilities for Non-Profit Institutions, Revenue, (Furman University Project) Series 1996A, (MBIA Insured), 5.500% 10/01/26........ Aaa AAA 1,005 1,000 South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, (Palmetto Health Alliance Project) Series 2000A, 7.125% 12/15/15........ Baa2 BBB 1,063 2,000 South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, Series 1999, (FSA Insured), 5.300% 02/01/14........ Aaa AAA 2,041 1,000 South Carolina, Transportation Infrastructure Revenue, Series 1998A, (MBIA Insured), 5.000% 10/01/12........ Aaa AAA 1,023 1,000 Spartanburg County, South Carolina, Health Services District, Hospital Revenue Refunding, Series 1997B, (MBIA Insured), 5.125% 04/15/17........ Aaa AAA 982 1,250 Spartanburg, South Carolina, Sanitary Sewer District, Sewer System Revenue Refunding, Series 1999B, (MBIA Insured), 5.000% 03/01/26........ Aaa AAA 1,198 -------- 25,857 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $24,510)........................ 25,857 --------
SEE NOTES TO FINANCIAL STATEMENTS. 199 NATIONS FUNDS Nations South Carolina Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
SHARES VALUE (000) (000) -------------------------------------------------------------------------------- INVESTMENT COMPANIES -- 0.2% (Cost: $51) 51 Nations Tax Exempt Fund, Primary A Class#................ $ 51 -------- TOTAL INVESTMENTS (Cost $24,561*)................................. 100.3% 25,908 -------- OTHER ASSETS AND LIABILITIES (NET)................ (0.3)% Cash..................................................... $ 1 Interest receivable...................................... 306 Receivable from investment advisor....................... 3 Payable for Fund shares redeemed......................... (190) Administration fee payable............................... (4) Shareholder servicing and distribution fees payable...... (7) Distributions payable.................................... (97) Accrued Trustees' fees and expenses...................... (45) Accrued expenses and other liabilities................... (39) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)...................................... (72) -------- NET ASSETS........................................ 100.0% $ 25,836 ======== NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 95 Accumulated net realized loss on investments sold........ (102) Net unrealized appreciation of investments............... 1,347 Paid-in capital.......................................... 24,496 -------- NET ASSETS............................................... $ 25,836 ======== VALUE -------------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($16,873,388 / 1,655,638 shares outstanding)........... $10.19 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($1,023,098 / 100,444 shares outstanding).............. $10.19 ======== Maximum sales charge..................................... 4.75% Maximum offering price per share......................... $10.69 INVESTOR B SHARES: Net asset value and offering price per share** ($7,277,224 / 714,233 shares outstanding).............. $10.19 ======== INVESTOR C SHARES: Net asset value and offering price per share** ($662,240 / 64,987 shares outstanding)................. $10.19 ========
--------------- *Federal income tax information (see Note 7). ** The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. &Zero coupon security. The rate shown reflects the yield to maturity. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations South Carolina Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): MBIA 28.57% Nations South Carolina Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Water Revenue 27.00% Hospital Revenue 26.38% Industrial Development Revenue/Pollution Control Revenue 17.35% Electric Revenue 12.28% SEE NOTES TO FINANCIAL STATEMENTS. 200 NATIONS FUNDS Nations Tennessee Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 94.0% TENNESSEE -- 91.7% $1,535 Anderson County, Tennessee, GO Refunding, Series 2001, (FSA Insured), 5.000% 04/01/13......... Aaa AAA $ 1,563 1,000 Anderson County, Tennessee, Health and Educational Facilities Board, Revenue Refunding, (Methodist Medical Center - Oak Ridge Project) Series 1993, 5.400% 07/01/04......... A1 NR 1,018 1,300 Chattanooga, Tennessee, GO Refunding, Series 2002, 4.500% 09/01/04......... Aa2 AA 1,343 1,700 Chattanooga-Hamilton County, Tennessee, Hospital Authority, Revenue Refunding, (Erlanger Medical Center Project) Series 1993, (FSA Insured), 5.375% 10/01/04......... Aaa AAA 1,786 1,000 Chattanooga-Hamilton County, Tennessee, Hospital Authority, Revenue Refunding, (Erlanger Medical Center Project) Series 1993, (FSA Insured), 5.500% 10/01/07......... Aaa AAA 1,061 1,600 Knox County, Tennessee, Health Educational and Housing Facilities Board, Hospital Facilities Improvement Revenue Refunding, (Baptist Health System of East Tennessee, Inc. Project) Series 1996, (CONNIE LEE Insured), 5.500% 04/15/11......... Aaa AAA 1,669 500 Knox County, Tennessee, Health Educational and Housing Facilities Board, Hospital Facilities Revenue, (Sanders Alliance Project) Series 1993A, (MBIA Insured), 4.900% 01/01/05......... Aaa AAA 516 1,500 Knox County, Tennessee, Health Educational and Housing Facilities Board, Revenue, (University Health Systems Inc. Project) Series 1999, 5.750% 04/01/19......... Baa1 NR 1,478 1,250 Knox County, Tennessee, Public Improvement GO, Series 1998, 4.750% 04/01/19......... Aa2 AA 1,178
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TENNESSEE -- (CONTINUED) $1,330 Lawrenceburg, Tennessee, Public Building Authority, Water and Sewer GO, Series 2001B, (FSA Insured), 5.500% 07/01/16......... Aaa AAA $ 1,376 2,500 Maury County, Tennessee, Industrial Development Board, Multi-Model PCR Refunding, (General Motors Corporation - Saturn Corporation Project) Series 1994, 6.500% 09/01/24......... A3 BBB+ 2,616 1,000 Maury County, Tennessee, Industrial Development Board, Solid Waste Disposal Revenue, Occidental Petroleum Corporation, AMT, (GTD-AGMT), 6.250% 08/01/18......... Baa2 BBB- 1,010 1,000 McMinn County, Tennessee, Industrial Development Board, Recycling Facilities Revenue, (Bowater Inc. Project) Series 1992, AMT, 7.400% 12/01/22......... Baa3 BBB 1,034 1,000 Memphis, Tennessee, Electric System Revenue Refunding, Series 1992, 6.000% 01/01/05......... Aa3 AA 1,065 2,100 Memphis, Tennessee, GO, Series 2000, 5.000% 04/01/17......... Aa2 AA 2,071 1,500 Memphis, Tennessee, Water Division, Revenue Refunding, Series 1992, 5.900% 01/01/04......... Aaa AAA 1,574 1,000 Memphis-Shelby County, Tennessee, Airport Authority, Special Facilities and Project Revenue Refunding, (Federal Express Corporation Project) Series 1992, 6.750% 09/01/12......... Baa2 BBB 1,032 1,600 Metropolitan Government, Nashville and Davidson County, Tennessee, Electric Revenue, Series 1998B, 5.500% 05/15/13......... Aa3 AA 1,710 1,000 Metropolitan Government, Nashville and Davidson County, Tennessee, GO Refunding, Series 1993, 5.250% 05/15/07......... Aa2 AA 1,054
SEE NOTES TO FINANCIAL STATEMENTS. 201 NATIONS FUNDS Nations Tennessee Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TENNESSEE -- (CONTINUED) $ 505 Metropolitan Government, Nashville and Davidson County, Tennessee, Health and Educational Facilities Board, Improvement Revenue Refunding, (Meharry Medical College Project) Series 1996, (AMBAC Insured), 6.000% 12/01/08......... Aaa AAA $ 554 295 Metropolitan Government, Nashville and Davidson County, Tennessee, Health and Educational Facilities Board, Improvement Revenue Refunding, (Meharry Medical College Project) Series 1996, (AMBAC Insured), 6.000% 12/01/09......... Aaa AAA 325 1,000 Metropolitan Government, Nashville and Davidson County, Tennessee, Multi-Family Housing Revenue, (Enchantment, Inc. - Welch Bend Apartments Project) Series 1996A, (FNMA COLL), Mandatory Put 01/01/07 @ 100, 5.500% 01/01/27......... NR AAA 1,043 1,645 Rutherford County, Tennessee, Public Improvement GO, Series 1996, 6.000% 04/01/06......... Aa2 AA 1,778 1,280 Shelby County, Tennessee, GO Refunding, Series 1996B, 5.200% 12/01/09......... Aa3 AA+ 1,335 1,000 Shelby County, Tennessee, GO Refunding, Series 1999B, 5.250% 04/01/11......... Aa3 AA+ 1,052 520 Shelby County, Tennessee, Health Educational and Housing Facilities Board, Revenue, (Lebonheur Childrens Medical Center Project) Series 1993D, (MBIA Insured), 5.300% 08/15/04......... Aaa AAA 547 500 Shelby County, Tennessee, Health Educational and Housing Facilities Board, Revenue, (Methodist Health Systems, Inc. Project) Series 1995, (MBIA Insured), 6.250% 08/01/09......... Aaa AAA 550
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TENNESSEE -- (CONTINUED) $2,000 Shelby County, Tennessee, Health Educational and Housing Facilities Board, Revenue, (St. Jude's Childrens Research Project) Series 1999, 5.375% 07/01/24......... NR AA $ 1,937 400 Shelby County, Tennessee, Public Improvement GO Refunding, Series 1999A, 4.750% 05/01/21......... Aa3 AA+ 372 500 Shelby County, Tennessee, Public Improvement GO, Series 1996A, 5.625% 06/01/06......... Aa3 AA+ 535 1,000 Sumner County, Tennessee, Resource Authority, Revenue, Series 1993, (AMBAC Insured), 5.125% 08/01/03......... Aaa AAA 1,033 1,500 Tennergy Corporation, Tennessee, Gas Revenue, Series 1999, (MBIA Insured), 5.000% 06/01/07......... Aaa AAA 1,552 1,000 Tennessee State, GO, Series 1994A, Prerefunded 03/01/04 @ 101.5, 5.200% 03/01/05......... Aa2 AA 1,055 1,000 Tennessee State, GO, Series 1995A, 7.000% 03/01/03......... Aa2 AA 1,044 500 Tennessee State, School Board Authority, Higher Education Facilities Revenue, Series 1992A, Prerefunded 05/01/02 @ 101.5, 6.000% 05/01/05......... Aa3 AA- 509 1,120 Tennessee, Housing Development Agency, Revenue, (Home Ownership Program) Series 1997, AMT, 3.624%& 07/01/03........ Aa2 AA 1,071 1,215 Tennessee, Housing Development Agency, Revenue, (Home Ownership Program) Series 1997, AMT, 4.115%& 07/01/04........ Aa2 AA 1,109 2,500 Tennessee, Housing Development Agency, Revenue, (Home Ownership Program) Series 1997-3A, AMT, 5.298%& 01/01/08........ Aa2 AA 1,850
SEE NOTES TO FINANCIAL STATEMENTS. 202 NATIONS FUNDS Nations Tennessee Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TENNESSEE -- (CONTINUED) $ 785 Tennessee, Housing Development Agency, Revenue, (Home Ownership Program) Series 1998, AMT, 4.750% 07/01/08......... Aa2 AA $ 784 1,135 Tennessee, Housing Development Agency, Revenue, (Home Ownership Program) Series 1998, AMT, 4.850% 07/01/09......... Aa2 AA 1,129 700 Williamson County, Tennessee, GO, Series 2000, 5.350% 03/01/17......... Aa1 NR 715 ------- 48,033 ------- MISSOURI -- 2.3% 1,275 West Plains, Missouri, Industrial Development Authority, Hospital Revenue, (Ozarks Medical Center Project) Series 1997, 5.250% 11/15/07......... NR BB+ 1,231 ------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $48,041)......................... 49,264 -------
SHARES VALUE (000) (000) -------------------------------------------------------------- INVESTMENT COMPANIES -- 7.7% (Cost: $4,047) 4,047 Nations Tax Exempt Fund, Primary A Class#................................ $ 4,047 ------- TOTAL INVESTMENTS (Cost $52,088*)................ 101.7% 53,311 ------- OTHER ASSETS AND LIABILITIES (NET).......................... (1.7)% Dividends receivable.................... $ 3 Interest receivable..................... 747 Payable for Fund shares redeemed........ (22) Investment advisory fee payable......... (3) Administration fee payable.............. (9) Shareholder servicing and distribution fees payable.......................... (3) Distributions payable................... (161) Payable for investment securities purchased............................. (1,349) Accrued Trustees' fees and expenses..... (45) Accrued expenses and other liabilities........................... (34) ------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................................. (876) ------- NET ASSETS....................... 100.0% $52,435 ======= NET ASSETS CONSIST OF: Undistributed net investment income..... $ 21 Accumulated net realized loss on investments sold...................... (359) Net unrealized appreciation of investments........................... 1,223 Paid-in capital......................... 51,550 ------- NET ASSETS.............................. $52,435 =======
SEE NOTES TO FINANCIAL STATEMENTS. 203 NATIONS FUNDS Nations Tennessee Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
VALUE -------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share($40,807,066 / 3,979,357 shares outstanding)................... $10.25 ======= INVESTOR A SHARES: Net asset value and redemption price per share ($9,954,623 / 970,803 shares outstanding).......................... $10.25 ======= Maximum sales charge.................... 3.25% Maximum offering price per share........ $10.60 INVESTOR B SHARES: Net asset value and offering price per share** ($1,351,097 / 131,737 shares outstanding).......................... $10.26 ======= INVESTOR C SHARES: Net asset value and offering price per share** ($321,839 / 31,534 shares outstanding).......................... $10.21 =======
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. &Zero coupon security. The rate shown reflects the yield to maturity. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Tennessee Intermediate Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): FSA 11.03% Nations Tennessee Intermediate Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Hospital Revenue 21.45% Housing Revenue 13.32% SEE NOTES TO FINANCIAL STATEMENTS. 204 NATIONS FUNDS Nations Tennessee Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 97.0% TENNESSEE -- 97.0% $ 500 Blount County, Tennessee, Public Building Authority, Public Facility Revenue, Series 1998, (FGIC Insured), 5.000% 04/01/19........ Aaa AAA $ 483 250 Chattanooga-Hamilton County, Tennessee, Hospital Authority, Revenue Refunding, (Erlanger Medical Center Project) Series 1993, (FSA Insured), 5.500% 10/01/07........ Aaa AAA 265 740 Hamilton County, Tennessee, GO Refunding, Series 1998B, 5.100% 08/01/24........ Aa1 NR 734 575 Humphreys County, Tennessee, Industrial Development Board, Solid Waste Disposal Revenue, (E.I. duPont de Nemours and Company Project) Series 1994, AMT, 6.700% 05/01/24........ Aa3 AA- 612 400 Knox County, Tennessee, Health Educational and Housing Facilities Board, Hospital Facilities Improvement Revenue Refunding, (Baptist Health System of East Tennessee, Inc. Project) Series 1996, (CONNIE LEE Insured), 5.500% 04/15/11........ Aaa AAA 417 300 Knox County, Tennessee, Health Educational and Housing Facilities Board, Revenue Refunding, (Fort Sanders Alliance Project) Series 1993, (MBIA Insured), 7.250% 01/01/09........ Aaa AAA 346 200 Loudon County, Tennessee, Industrial Development Board, Solid Waste Disposal Revenue, (Kimberly-Clark Corporation Project) Series 1993, AMT, 6.200% 02/01/23........ Aa2 AA 204
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TENNESSEE -- (CONTINUED) $ 500 Maury County, Tennessee, Industrial Development Board, Multi-Model PCR Refunding, (General Motors Corporation - Saturn Corporation Project) Series 1994, 6.500% 09/01/24........ A3 BBB+ $ 523 250 McMinn County, Tennessee, Industrial Development Board, Recycling Facilities Revenue, (Bowater Inc. Project) Series 1992, AMT, 7.400% 12/01/22........ Baa3 BBB 258 300 Memphis, Tennessee, Electric System Revenue Refunding, Series 1993, 4.900% 01/01/11........ Aa3 AA 306 400 Memphis, Tennessee, GO, Series 2000, 5.000% 04/01/17........ Aa2 AA 395 500 Memphis-Shelby County, Tennessee, Airport Authority, Special Facilities and Project Revenue Refunding, (Federal Express Corporation Project) Series 1997, 5.350% 09/01/12........ Baa2 BBB 487 350 Metropolitan Government, Nashville and Davidson County, Tennessee, Electric Revenue, Series 1996A, Prerefunded 05/15/06 @ 102, 5.625% 05/15/14........ Aa3 AA 381 400 Metropolitan Government, Nashville and Davidson County, Tennessee, Electric Revenue, Series 1998B, 5.500% 05/15/13........ Aa3 AA 427 500 Metropolitan Government, Nashville and Davidson County, Tennessee, Health and Educational Facilities Board, Improvement Revenue Refunding, (Meharry Medical College Project) Series 1996, (AMBAC Insured), 6.000% 12/01/16........ Aaa AAA 554
SEE NOTES TO FINANCIAL STATEMENTS. 205 NATIONS FUNDS Nations Tennessee Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TENNESSEE -- (CONTINUED) $ 300 Metropolitan Government, Nashville and Davidson County, Tennessee, Health and Educational Facilities Board, Improvement Revenue Refunding, (Meharry Medical College Project) Series 1996, (AMBAC Insured), 6.000% 12/01/09........ Aaa AAA $ 330 250 Metropolitan Government, Nashville and Davidson County, Tennessee, Revenue, (Meharry Medical College Project) Series 1994, (AMBAC Insured), Prerefunded 12/01/04 @ 102, 7.000% 12/01/11........ Aaa AAA 279 300 Metropolitan Government, Nashville and Davidson County, Tennessee, Water and Sewer Systems Revenue Refunding, Series 1993, (FGIC Insured), 5.200% 01/01/13........ Aaa AAA 313 250 Sumner County, Tennessee, Health Educational and Housing Facilities Board, Revenue Refunding, (Sumner Regional Health Systems, Inc. Project) Series 1994, 7.000% 11/01/03........ NR A- 264 250 Tennessee State, Local Development Authority, Revenue Refunding, (State Loan Program) Series 1993A, 5.750% 03/01/11........ A2 A 257 300 Tennessee, Housing Development Agency, Revenue, (Home Ownership Program) Series 1998, AMT, 4.750% 07/01/08........ Aa2 AA 299
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TENNESSEE -- (CONTINUED) $ 500 Williamson County, Tennessee, GO, Series 2000, 5.350% 03/01/17........ Aa1 NR $ 511 -------- 8,645 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $8,283)......................... 8,645 -------- SHARES (000) --------- INVESTMENT COMPANIES -- 2.5% (Cost: $223) 223 Nations Tax Exempt Fund, Primary A Class#................................. 223 -------- TOTAL INVESTMENTS (Cost $8,506*).................. 99.5% 8,868 -------- OTHER ASSETS AND LIABILITIES (NET)........................... 0.5%
Cash..................................................... $ 1 Receivable for Fund shares sold.......................... 1 Interest receivable...................................... 140 Receivable from investment advisor....................... 9 Administration fee payable............................... (2) Shareholder servicing and distribution fees payable...... (3) Distributions payable.................................... (25) Accrued Trustees' fees and expenses...................... (44) Accrued expenses and other liabilities................... (36) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)...................................... 41 -------- NET ASSETS........................................ 100.0% $ 8,909 ======== NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 36 Accumulated net realized loss on investments sold........ (58) Net unrealized appreciation of investments............... 362 Paid-in capital.......................................... 8,569 -------- NET ASSETS............................................... $ 8,909 ========
SEE NOTES TO FINANCIAL STATEMENTS. 206 NATIONS FUNDS Nations Tennessee Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002 VALUE -------------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($4,141,596 / 410,358 shares outstanding).............. $10.09 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($1,593,200 / 157,830 shares outstanding).............. $10.09 ======== Maximum sales charge..................................... 4.75% Maximum offering price per share......................... $10.60 INVESTOR B SHARES: Net asset value and offering price per share** ($2,898,452 / 287,187 shares outstanding).............. $10.09 ======== INVESTOR C SHARES: Net asset value and offering price per share** ($275,598 / 27,306 shares outstanding)................. $10.09 ========
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Tennessee Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): AMBAC 13.05% Nations Tennessee Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Hospital Revenue 14.85% Industrial Development Revenue/Pollution Control Revenue 14.36% Education Revenue 10.11% SEE NOTES TO FINANCIAL STATEMENTS. 207 NATIONS FUNDS Nations Texas Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 97.3% TEXAS -- 87.2% $ 1,000 Alamo, Texas, Community College District, Revenue, (FSA Insured), 5.375% 11/01/16........ Aaa AAA $ 1,019 1,550 Alliance Airport Authority Inc., Texas, Special Facilities Revenue, (American Corporation - American Airlines Inc. Project) Series 1991, AMT, 7.000% 12/01/11........ B1 BB 1,469 1,775 Arlington, Texas, Independent School District, GO, Unrefunded Balance, Series 1992, (PSF-GTD), 6.100% 02/15/05........ Aaa NR 1,781 1,000 Arlington, Texas, Waterworks and Sewer Improvement Revenue Refunding, Series 1992, (FGIC Insured), 6.100% 06/01/02........ Aaa AAA 1,007 5,750 Austin, Texas, GO Refunding, Series 1993, 5.500% 09/01/04........ Aa2 AA+ 6,066 2,000 Austin, Texas, Public Improvement GO, Series 1992, (AMBAC Insured), Prerefunded 09/01/02 @ 100, 5.900% 09/01/05........ Aaa AAA 2,035 4,275 Austin, Texas, Utility System Revenue Refunding, Series 1992, (AMBAC Insured), 6.250% 11/15/03........ Aaa AAA 4,467 3,000 Austin, Texas, Utility System Revenue Refunding, Series 1992, (AMBAC Insured), 6.250% 11/15/05........ Aaa AAA 3,135 965 Brazos, Texas, Higher Education Authority Inc., Revenue Refunding, Senior Lien, Series 1994A-2, AMT, (GTD STD LNS), 6.050% 06/01/03........ Aaa NR 971
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 4,365 Cass County, Texas, Industrial Development Corporation, Environmental Revenue, (International Paper Corporation Project) Series 1997A, AMT, (GTY-AGMT), 6.250% 04/01/21........ Baa2 BBB $ 4,382 4,115 Cedar Hill, Texas, Independent School District, GO, Prerefunded, Series 2000, (PSF-GTD), 5.502%& 08/15/16....... NR AAA 1,756 2,840 Cedar Hill, Texas, Independent School District, GO, Prerefunded, Series 2000, (PSF-GTD), 5.587%& 08/15/17....... NR AAA 1,125 3,525 Clear Creek, Texas, Independent School District, GO, Series 1993, (PSF-GTD), 5.375% 02/01/06........ Aaa AAA 3,603 1,575 Dallas, Texas, Independent School District, GO, Prerefunded Balance, Series 1993, (PSF-GTD), Prerefunded 08/15/03 @ 100, 5.600% 08/15/05........ Aaa AAA 1,640 1,550 Dallas, Texas, Independent School District, GO, Prerefunded Balance, Series 1993, (PSF-GTD), Prerefunded 08/15/03 @ 100, 5.700% 08/15/06........ Aaa AAA 1,616 2,860 Dallas, Texas, Independent School District, GO, Series 1993, (PSF-GTD), 5.600% 08/15/05........ Aaa AAA 2,964 2,940 Dallas, Texas, Independent School District, GO, Series 1993, (PSF-GTD), 5.700% 08/15/06........ Aaa AAA 3,053 1,510 Dallas, Texas, Independent School District, GO, Series 1993, (PSF-GTD), Prerefunded 08/15/03 @ 100, 5.700% 08/15/06........ NR AAA 1,575 5,000 Dallas-Fort Worth, Texas, Regional Airport Revenue Refunding, (Dallas Fort-Worth Airport Project) Series 1994A, (MBIA Insured), 5.400% 11/01/03........ Aaa AAA 5,206
SEE NOTES TO FINANCIAL STATEMENTS. 208 NATIONS FUNDS Nations Texas Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 1,395 El Paso, Texas, GO Refunding, Series 1992C, (FGIC Insured), 5.700% 08/15/03........ Aaa AAA $ 1,413 1,000 Grapevine, Texas, GO, Series 2000, (FGIC Insured), 5.800% 08/15/19........ Aaa AAA 1,049 3,155 Harris County, Texas, Health Facilities Development Authority, Revenue, (Memorial Hospital Systems Project) Series 1997A, (MBIA Insured), 6.000% 06/01/10........ Aaa AAA 3,422 2,000 Harris County, Texas, Health Facilities Development Authority, Revenue, Series 1999A, 5.500% 07/01/09........ Aaa AAA 2,072 2,000 Harris County, Texas, Health Facilities Development Corporation, Revenue, (Christus Health Project) Series 1999A, (MBIA Insured), 5.500% 07/01/10........ Aaa AAA 2,068 2,000 Harris County, Texas, Health Facilities Development Corporation, Revenue, (St. Lukes Episcopal Hospital Project) Series 2001A, 5.625% 02/15/16........ NR AA 2,024 4,000 Harris County, Texas, Toll Road Revenue Refunding, Senior Lien, Series 1994, (FGIC Insured), 5.000% 08/15/16........ Aaa AAA 3,927 3,580 Harris County, Texas, Toll Road Revenue Refunding, Senior Lien, Series 1994, (FGIC Insured), 5.375% 08/15/20........ Aaa AAA 3,580 1,195 Houston, Texas, Hotel Occupancy Tax and Special Revenue, Series 2001B, (AMBAC Insured), 5.250% 09/01/19........ Aaa AAA 1,178 1,265 Houston, Texas, Hotel Occupancy Tax and Special Revenue, Series 2001B, (AMBAC Insured), 5.250% 09/01/20........ Aaa AAA 1,244
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 5,000 Houston, Texas, Independent School District, GO Refunding, Series 1993, (PSF-GTD), 5.400% 08/15/07........ Aaa AAA $ 5,150 8,000 Houston, Texas, Water and Sewer Systems Revenue Refunding, Junior Lien, Series 1997A, (FGIC Insured), 5.375% 12/01/27........ Aaa AAA 7,892 10,000 Houston, Texas, Water and Sewer Systems Revenue, Junior Lien, Series 1996A, (FGIC Insured), 5.250% 12/01/25........ Aaa AAA 9,672 6,145 Houston, Texas, Water and Sewer Systems Revenue, Unrefunded Balance, Prior Lien, Series 1992B, 5.900% 12/01/03............... A2 A+ 6,383 1,500 Klein, Texas, Independent School District, GO, Series 1999A, (PSF-GTD), 5.125% 08/01/15........ Aaa AAA 1,516 3,815 Lewisville, Texas, Independent School District, GO, Unrefunded Balance, Series 1992, (PSF-GTD), 6.250% 08/15/05........ Aaa NR 3,874 5,000 Mesquite, Texas, Independent School District 1, GO Refunding, Series 1993, (PSF-GTD), 5.300% 08/15/06........ Aaa AAA 5,158 1,380 Mesquite, Texas, Independent School District 1, GO, Unrefunded Balance, Series 1992, (PSF-GTD), 5.750% 08/15/03........ Aaa AAA 1,385 5,000 North Central, Texas, Health Facilities Development Corporation, Health Facilities Revenue, (Presbyterian Healthcare Residential Project) Series 1996B, (MBIA Insured), 5.500% 06/01/16........ Aaa AAA 5,319 3,000 North Central, Texas, Health Facilities Development Corporation, Revenue Refunding, (Baylor Health Care Systems Project) Series 1995, 5.500% 05/15/13........ Aa3 AA- 3,050
SEE NOTES TO FINANCIAL STATEMENTS. 209 NATIONS FUNDS Nations Texas Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 1,500 Pearland, Texas, Independent School District, GO, Series 2000, (PSF-GTD), 5.500% 02/15/20........ Aaa AAA $ 1,520 1,835 Plano, Texas, Independent School District, GO, Series 1995, (PSF-GTD), 7.000% 02/15/05........ Aaa AAA 2,012 1,000 Port of Houston Authority of Harris County, Texas, Revenue Refunding, Series 1992, (MBIA Insured), 6.300% 05/01/04........ Aaa AAA 1,004 4,000 Red River Authority, Texas, PCR Refunding, Series 1991, (AMBAC Insured), 5.200% 07/01/11........ Aaa NR 4,131 6,500 Red River Authority, Texas, PCR, (Hoechst Celanese Corporation Project) Series 1992, AMT, 6.875% 04/01/17........ Baa2 BBB 6,645 5,000 Round Rock, Texas, Independent School District, GO, Series 2000, (PSF-GTD), 5.000% 08/01/18........ Aaa AAA 4,853 1,000 San Antonio, Texas, Independent School District, GO, (PSF-GTD), 5.500% 08/15/24........ Aaa AAA 1,005 4,185 San Antonio, Texas, Unrefunded Balance GO, Series 1992, 5.500% 08/01/05........ Aa2 AA+ 4,229 3,300 Tarrant County, Texas, Health Facilities Development Corporation, Health Systems Revenue, (Texas Health Resources Systems Project) Series 1997A, (MBIA Insured), 5.750% 02/15/08........ Aaa AAA 3,447 500 Texas State, College Student Loan Authority, GO, Series 1994, AMT, 5.750% 08/01/11........ Aa1 AA 508 1,000 Texas State, College Student Loan Authority, GO, Series 1996, AMT, 5.000% 08/01/12........ Aa1 AA 992 1,425 Texas State, College Student Loan Authority, GO, Series 1997, AMT, (GTD STD LNS), 5.000% 08/01/05........ Aa1 AA 1,472
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 6,835 Texas State, College Student Loan Authority, GO, Series 1997, AMT, (GTD STD LNS), 5.250% 08/01/07........ Aa1 AA $ 7,094 3,565 Texas State, College Student Loan Authority, GO, Series 1999, AMT, 5.000% 08/01/07........ Aa1 AA 3,651 5,000 Texas State, GO Refunding, Series 1992A, 5.800% 10/01/04........ Aa1 AA 5,319 2,955 Texas State, Port of Corpus Christi Revenue Authority, Refunding, (Hoechst Celanese Corporation Project) Series 1992, AMT, 6.875% 04/01/17........ Baa2 BBB 3,021 5,000 Texas State, Public Finance Authority, Building Revenue Refunding, Series 1992B, (AMBAC Insured), 6.100% 02/01/04........ Aaa AAA 5,272 1,200 Texas State, Public Finance Authority, GO Refunding, Series 1996C, 6.000% 10/01/06........ NR AA 1,303 3,500 Texas State, Texas A&M University, Revenue, Series 1999, 5.500% 05/15/20........ Aa1 AA+ 3,547 3,250 Texas State, Turnpike Authority of Dallas, North Tollway Revenue, (President George Bush Turnpike Project) Series 1996, (AMBAC Insured), 4.756%& 01/01/09....... Aaa AAA 2,366 3,000 Texas State, Water Development Board, Revenue, Series 1997, 5.000% 07/15/12........ Aaa AAA 3,052 1,100 Texas State, Water Development Board, Revenue, Series 1999B, 5.625% 07/15/21........ Aaa AAA 1,125 1,850 Texas State, Water Development GO, Series 1997, 5.500% 08/01/07........ Aa1 AA 1,970 5,000 Texas State, Water Development GO, Series 1997, 5.250% 08/01/28........ Aa1 AA 4,872
SEE NOTES TO FINANCIAL STATEMENTS. 210 NATIONS FUNDS Nations Texas Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 2,000 Texas State, Water Financial Assistance, GO, Series 1999, (MBIA Insured), 5.500% 08/01/29........ Aaa AAA $ 2,013 5,000 Texas, Municipal Power Agency, Revenue Refunding, Series 1992, (MBIA Insured), Prerefunded 09/01/02 @ 102, 5.900% 09/01/04........ Aaa AAA 5,186 15,000 Texas, Municipal Power Agency, Revenue Refunding, Series 1993, (MBIA Insured), 5.250% 09/01/05........ Aaa AAA 15,582 4,085 Travis County, Texas, Health Facilities Development Corporation, Revenue, (Ascension Health Credit Project) Series 1999A, (MBIA Insured), 5.750% 11/15/09........ Aaa AAA 4,381 3,500 Travis County, Texas, Limited Tax GO Refunding, Series 1992A, (MBIA Insured), 5.600% 03/01/04........ Aaa AAA 3,580 1,500 Travis County, Texas, Limited Tax GO Refunding, Series 1992A, (MBIA Insured), 5.750% 03/01/06........ Aaa AAA 1,542 500 Trinity River Authority, Texas, PCR, (Texas Instruments Inc. Project) Series 1996, AMT, 6.200% 03/01/20........ NR A 513 3,885 Trinity River Authority, Texas, Ten Mile Revenue, Series 1992, (AMBAC Insured), 5.700% 08/01/03........ Aaa AAA 3,930 2,500 University of Texas, University Financing Systems Revenue, Series 2001B, 5.375% 08/15/15........ Aaa AAA 2,577 4,610 Waxahachie, Texas, Independent School District, GO, Series 2000, (PSF-GTD), 5.556%& 08/15/17....... Aaa NR 1,849
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- TEXAS -- (CONTINUED) $ 4,755 Waxahachie, Texas, Independent School District, Prerefunded, GO, Series 2000, (PSF-GTD), 5.405%& 08/15/15....... Aaa NR $ 2,215 -------- 238,024 -------- ALABAMA -- 1.8% 3,000 Courtland, Alabama, Industrial Development Board, Solid Waste Disposal Revenue, (Champion International Corporation Project) Series 1992, AMT, 7.000% 06/01/22........ Baa2 BBB 3,070 1,750 Mobile, Alabama, Industrial Development Board, Environmental Improvement Revenue, (International Paper Company Project) Series 2000A, AMT, 6.700% 03/01/24........ Baa1 BBB 1,823 -------- 4,893 -------- CONNECTICUT -- 1.2% 3,000 Connecticut State, GO, Series 1995A, Prerefunded 03/15/03 @ 102, 5.625% 03/15/09........ Aa2 AA 3,158 -------- FLORIDA -- 0.4% 1,000 Florida, Housing Finance Agency, Multi-Family Housing Revenue Refunding, (United Dominion Realty Trust - Andover Project) Series 1996E, AMT, Mandatory Put 05/01/08 @ 100, 6.350% 05/01/26........ NR BBB+ 1,042 -------- WASHINGTON -- 1.3% 2,425 Washington State, GO, Series 1995C, 5.450% 07/01/07........ Aa1 AA+ 2,519 1,000 Washington State, Motor Vehicle Fuel Tax, GO Refunding, Series 2001R-B, 5.000% 09/01/09........ Aa1 AA+ 1,037 -------- 3,556 --------
SEE NOTES TO FINANCIAL STATEMENTS. 211 NATIONS FUNDS Nations Texas Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MAINE -- 0.4% $ 1,000 Bucksport, Maine, Solid Waste Disposal Revenue, (Champion International Corporation Project) Series 1985, 6.250% 05/01/10........ NR BBB+ $ 1,029 -------- MICHIGAN -- 1.7% 4,600 Detroit, Michigan, GO Refunding, Series 1995B, 6.500% 04/01/02........ Baa1 A- 4,602 -------- MISSISSIPPI -- 1.0% 2,600 Warren County, Mississippi, Environmental Improvement Revenue Refunding, (International Paper Company Project) Series 2000A, AMT, 6.700% 08/01/18........ Baa2 BBB 2,710 -------- OKLAHOMA -- 0.5% 1,400 Oklahoma, Housing Development Authority, Revenue, Series 2000A, (FHLMC COLL), 5.100% 11/01/05........ Aa3 NR 1,456 -------- SOUTH CAROLINA -- 0.6% 1,500 Calhoun County, South Carolina, Solid Waste Disposal Facility Revenue, (Carolina Eastman Company Project) Series 1992, AMT, 6.750% 05/01/17........ A2 A- 1,743 -------- TENNESSEE -- 1.2% 3,135 Chattanooga-Hamilton County, Tennessee, Hospital Authority, Revenue Refunding, (Erlanger Medical Center Project) Series 1993, (FSA Insured), 5.500% 10/01/07........ Aaa AAA 3,326 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $256,168)....................... 265,539 --------
SHARES VALUE (000) (000) ----------------------------------------------------------------------------- INVESTMENT COMPANIES -- 1.9% (Cost: $5,151) 5,151 Nations Tax Exempt Fund, Primary A Class#................ $ 5,151 -------- TOTAL INVESTMENTS (Cost $261,319*)................................ 99.2% 270,690 -------- OTHER ASSETS AND LIABILITIES (NET)............................... 0.8% Receivable for Fund shares sold.......................... $ 30 Dividends receivable..................................... 6 Interest receivable...................................... 3,440 Payable for Fund shares redeemed......................... (53) Investment advisory fee payable.......................... (44) Administration fee payable............................... (47) Shareholder servicing and distribution fees payable...... (3) Distributions payable.................................... (1,115) Accrued Trustees' fees and expenses...................... (45) Accrued expenses and other liabilities................... (85) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)...................................... 2,084 -------- NET ASSETS........................................ 100.0% $272,774 ======== NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 447 Accumulated net realized loss on investments sold........ (3,798) Net unrealized appreciation of investments............... 9,371 Paid-in capital.......................................... 266,754 -------- NET ASSETS............................................... $272,774 ========
SEE NOTES TO FINANCIAL STATEMENTS. 212 NATIONS FUNDS Nations Texas Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
VALUE ----------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($265,882,126 / 26,086,938 shares outstanding)......... $10.19 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($4,813,273 / 472,273 shares outstanding).............. $10.19 ======== Maximum sales charge..................................... 3.25% Maximum offering price per share......................... $10.53 INVESTOR B SHARES: Net asset value and offering price per share** ($2,021,010 / 198,305 shares outstanding).............. $10.19 ======== INVESTOR C SHARES: Net asset value and offering price per share** ($57,645 / 5,663 shares outstanding)................... $10.18 ========
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. &Zero coupon security. The rate shown reflects the yield to maturity. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Texas Intermediate Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): FGIC 10.46% MBIA 18.60% PSF-GTD 18.20% Nations Texas Intermediate Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Water Revenue 12.12% SEE NOTES TO FINANCIAL STATEMENTS. 213 NATIONS FUNDS Nations Texas Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) ---------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 97.0% TEXAS -- 88.2% $ 500 Austin, Texas, Public Improvement, GO, Series 1999, 5.375% 09/01/18........ Aa2 AA+ $ 505 500 Dallas-Fort Worth, Texas, Regional Airport Revenue Refunding, Series 1994A, (MBIA Insured), 6.000% 11/01/09........ Aaa AAA 530 400 Fort Worth, Texas, Higher Education Financial Corporation, Higher Education Revenue, (Texas Christian University Project) Series 1997, 5.000% 03/15/17........ Aa3 AA- 390 500 Grand Prairie, Texas, Independent School District, GO Refunding, Series 1996, (PSF-GTD), 5.200% 02/15/24........ Aaa AAA 485 500 Harris County, Texas, Health Facilities Development Corporation, Hospital Revenue, (Texas Childrens Hospital Project) Series 1995, 5.500% 10/01/19........ Aa2 AA 514 780 Harris County, Texas, Health Facilities Development Corporation, Revenue, (St. Lukes Episcopal Hospital Project) Series 2001A, 5.625% 02/15/16........ NR AA 789 750 Harris County, Texas, Port Houston Authority, Revenue Refunding, Series 2000B, AMT, 5.500% 10/01/07........ Aa1 AA+ 786 500 Klein, Texas, Independent School District, GO, Series 1999A, (PSF-GTD), 5.125% 08/01/15........ Aaa AAA 505
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) ---------------------------------------------------------------- TEXAS -- (CONTINUED) $ 500 Red River Authority, Texas, PCR, (Hoechst Celanese Corporation Project) Series 1992, AMT, 6.875% 04/01/17........ Baa2 BBB $ 511 600 Round Rock, Texas, Independent School District, GO, Series 2000, (PSF-GTD), 5.000% 08/01/18........ Aaa AAA 582 500 Socorro, Texas, Independent School District, GO, Series 1998, (PSF-GTD), 5.250% 08/15/28........ Aaa AAA 484 1,000 Tarrant County, Texas, Health Facilities Development Corporation, Health Systems Revenue, (Harris Methodist Health Systems Project) Series 1994, (MBIA-IBC Insured), 6.000% 09/01/10........ Aaa AAA 1,103 500 Texas State, College Student Loan Authority, GO, Series 1994, AMT, 5.750% 08/01/11........ Aa1 AA 508 455 Texas State, GO, Series 1999, 5.250% 08/01/21........ Aa1 AA 451 375 Texas State, Veterans Housing Assistance, GO Refunding, Series 1994C, 6.400% 12/01/09........ Aa1 AA 384 400 Texas State, Water Development Board, Revenue, Series 1999B, 5.625% 07/15/21........ Aaa AAA 409 500 Texas State, Water Financial Assistance, GO, Series 1999, (MBIA Insured), 5.500% 08/01/29........ Aaa AAA 503
SEE NOTES TO FINANCIAL STATEMENTS. 214 NATIONS FUNDS Nations Texas Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) ---------------------------------------------------------------- TEXAS -- (CONTINUED) $ 500 Travis County, Texas, Health Facilities Development Corporation, Revenue, (Ascension Health Credit Project) Series 1999A, (AMBAC Insured), 5.875% 11/15/24........ Aaa AAA $ 511 500 Trinity River Authority, Texas, PCR, (Texas Instruments Inc. Project) Series 1996, AMT, 6.200% 03/01/20........ NR A 513 1,000 Waxahachie, Texas, Independent School District, GO, Series 2000, (PSF-GTD), 5.556%& 08/15/17....... Aaa NR 401 ------- 10,864 ------- OHIO -- 8.8% 1,000 Lucas County, Ohio, Hospital Revenue, (Flower Hospital Project) Series 1993, Prerefunded 12/01/04 @ 101, 6.125% 12/01/13........ NR NR 1,077 ------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $11,212)......................... 11,941 ------- SHARES VALUE (000) (000) ---------------------------------------------------------------- INVESTMENT COMPANIES -- 2.7% (Cost: $327) 327 Nations Tax Exempt Fund, Primary A Class#.................................. 327 ------- TOTAL INVESTMENTS (Cost $11,539*)................. 99.7% 12,268 ------- OTHER ASSETS AND LIABILITIES (NET)............... 0.3% Interest receivable....................... $ 154 Receivable from investment advisor........ 9 Payable for Fund shares redeemed.......... (1) Administration fee payable................ (2) Shareholder servicing and distribution fees payable............................ (4) Distributions payable..................... (38) Accrued Trustees' fees and expenses....... (45) Accrued expenses and other liabilities.... (35) ------- TOTAL OTHER ASSETS AND LIABILITIES (NET)....................... 38 ------- NET ASSETS........................ 100.0% $12,306 ------- NET ASSETS CONSIST OF: Undistributed net investment income....... $ 52 Accumulated net realized loss on investments sold........................ (294) Net unrealized appreciation of investments............................. 729 Paid-in capital........................... 11,819 ------- NET ASSETS................................ $12,306 =======
SEE NOTES TO FINANCIAL STATEMENTS. 215 NATIONS FUNDS Nations Texas Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
VALUE ---------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($7,362,330 / 744,297 shares outstanding)..................... $9.89 ======= INVESTOR A SHARES: Net asset value and redemption price per share ($314,960 / 31,837 shares outstanding)............................ $9.89 ======= Maximum sales charge...................... 4.75% Maximum offering price per share.......... $10.39 INVESTOR B SHARES: Net asset value and offering price per share** ($4,607,959 / 465,820 shares outstanding)............................ $9.89 ======= INVESTOR C SHARES: Net asset value and offering price per share** ($20,466 / 2,049 shares outstanding)............................ $9.99 =======
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. &Zero coupon security. The rate shown reflects the yield to maturity. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Texas Municipal Bond Fund had the following insurance concentration greater than 10% at March 31, 2002 (as a percentage of net assets): PSF-GTD 19.97% Nations Texas Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Pre-Refunded 22.19% Transportation Revenue 10.97% Hospital Revenue 10.71% SEE NOTES TO FINANCIAL STATEMENTS. 216 NATIONS FUNDS Nations Virginia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 98.4% VIRGINIA -- 90.7% $2,000 Alexandria, Virginia, Redevelopment and Housing Authority, Multi-Family Housing Mortgage Revenue, (Buckingham Village Apartments Project) Series 1996A, AMT, 6.050% 07/01/16........ NR A+ $ 2,035 1,000 Amherst, Virginia, Industrial Development Authority, Revenue Refunding, (Georgia-Pacific Corporation Project) Series 1998, AMT, 5.250% 02/01/11........ Baa3 NR 1,012 3,285 Arlington County, Virginia, GO Refunding, Series 1993, 6.000% 06/01/12........ Aaa AAA 3,678 3,000 Arlington County, Virginia, GO, Series 1993, 5.000% 07/15/03........ Aaa AAA 3,100 3,865 Arlington County, Virginia, GO, Series 1999, (State Aid Withholding), 5.250% 06/01/16........ Aaa AAA 3,957 2,000 Arlington County, Virginia, Industrial Development Authority, Facilities Revenue Refunding, (Lee Gardens Housing Corporation - Housing Mortgage - Woodbury Park Apartments Project) Series 1998A, 5.450% 01/01/29........ NR A 1,892 1,000 Arlington County, Virginia, Industrial Development Authority, Facilities Revenue, (The Nature Conservancy Project) Series 1997A, 5.450% 07/01/27........ Aa1 NR 1,009 1,250 Arlington County, Virginia, Industrial Development Authority, Hospital Facilities Revenue, (Virginia Hospital Center Project) Series 2001, 5.250% 07/01/21........ A2 NR 1,192 2,000 Arlington County, Virginia, Industrial Development Authority, IDR Refunding, (Ogden Martin Systems Project) Series 1998A, (FSA Insured), 5.250% 01/01/05........ Aaa AAA 2,095
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $3,280 Arlington County, Virginia, Industrial Development Authority, Revenue, (Ogden Martin Systems of Union-Alexandria/ Arlington Project) Series 1998B, AMT, (FSA Insured), 5.250% 01/01/09........ Aaa AAA $ 3,399 1,855 Arlington County, Virginia, Industrial Development Authority, Revenue, (Ogden Martin Systems of Union-Alexandria/ Arlington Project) Series 1998B, AMT, (FSA Insured), 5.250% 01/01/10........ Aaa AAA 1,916 2,000 Brunswick County, Virginia, Industrial Development Authority, Correctional Facility Lease Revenue, Series 1996, (MBIA Insured), 5.250% 07/01/04........ Aaa AAA 2,096 1,000 Charlottesville-Albemarle, Virginia, Airport Authority, Revenue Refunding, Series 1995, AMT, 6.125% 12/01/09........ NR BBB 1,022 6,195 Chesapeake, Virginia, GO Refunding, Series 1993, 5.125% 12/01/05........ Aa2 AA 6,551 1,000 Chesapeake, Virginia, GO, Series 1998, (State Aid Withholding), 4.650% 08/01/11........ Aa2 AA 1,017 1,525 Chesapeake, Virginia, Public Improvement GO, Series 1996, (State Aid Withholding), 5.000% 05/01/03........ Aa2 AA 1,571 2,000 Chesapeake, Virginia, Water and Sewer GO, Series 1995A, (State Aid Withholding), 7.000% 12/01/09........ Aa2 AA 2,268 1,000 Chesterfield County, Virginia, Water and Sewer Authority, Revenue Refunding, Series 1992, 6.200% 11/01/05........ Aa2 AA 1,044
SEE NOTES TO FINANCIAL STATEMENTS. 217 NATIONS FUNDS Nations Virginia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $1,320 Covington-Allegheny County, Virginia, Industrial Development Authority, PCR Refunding, (Westvaco Corporation Project) Series 1994, 5.900% 03/01/05........ Baa2 BBB $ 1,389 11,585 Fairfax County, Virginia, Economic Development Authority, Resource Recovery, Revenue Refunding, Series 1998A, AMT, (AMBAC Insured), 5.950% 02/01/07........ Aaa AAA 12,450 3,385 Fairfax County, Virginia, Economic Development Authority, Resource Recovery, Revenue Refunding, Series 1998A, AMT, (AMBAC Insured), 6.050% 02/01/09........ Aaa AAA 3,674 1,000 Fairfax County, Virginia, GO, Series 1998, (State Aid Withholding), 4.800% 04/01/10........ Aa1 AA+ 1,033 2,000 Fairfax County, Virginia, Public Improvement GO, Series 1997A, 6.000% 06/01/04........ Aaa AAA 2,130 3,000 Fairfax County, Virginia, Sewer Revenue Refunding, Series 1993, (AMBAC Insured), 5.500% 11/15/09........ Aaa AAA 3,173 3,135 Fairfax County, Virginia, Water and Sewer Authority, Revenue Refunding, Series 1993, (AMBAC Insured), 5.100% 11/15/04........ Aaa AAA 3,296 2,000 Fairfax County, Virginia, Water Authority, Water Revenue, Series 2000, 5.625% 04/01/25........ Aa1 AAA 2,075 2,000 Fairfax County, Virginia, Water Authority, Water Revenue, Unrefunded Balance, Series 1992, 6.000% 04/01/22........ Aa1 AAA 2,131 2,000 Giles County, Virginia, Industrial Development Authority, Solid Waste Disposal Facilities Revenue, (Hoechst Celanese Corporation Project) Series 1992, AMT, 6.625% 12/01/22........ Baa2 BBB 2,044
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $5,000 Goochland County, Virginia, Industrial Development Authority, (Old Dominion Electric Cooperative Project) Series 1998, AMT, 4.250% 12/01/02........ NR NR $ 5,025 1,200 Halifax County, Virginia, Industrial Development Authority, Hospital Revenue Refunding, (Halifax Regional Hospital, Inc. Project) Series 1998, 4.900% 09/01/10........ NR A 1,188 1,000 Hanover County, Virginia, Industrial Development Authority, Revenue, (Memorial Regional Medical Center Project) Series 1995, (MBIA Insured), 5.500% 08/15/25........ Aaa AAA 1,005 2,105 Henrico County, Virginia, Industrial Development Authority, Revenue, Series 1994, 7.500% 08/01/02........ Aa2 AA 2,146 3,500 Henrico County, Virginia, Industrial Development Authority, Solid Waste Revenue, (Browning-Ferris Project) Series 1995, AMT, (GTY-AGMT), Mandatory Put 12/01/05 @ 100, 5.300% 12/01/11........ B1 BB- 3,304 1,500 Henrico County, Virginia, Water and Sewer Authority, Revenue Refunding, Series 1992, 6.200% 05/01/04........ Aa2 AAA 1,506 2,420 Henrico County, Virginia, Water and Sewer Authority, Revenue Refunding, Series 1992, 6.300% 05/01/05........ Aa2 AAA 2,430 1,915 James City and County, Virginia, GO, Series 1995, (FGIC Insured, State Aid Withholding), 5.000% 12/15/08........ Aaa AAA 2,004 1,000 Leesburg, Virginia, GO Refunding, Series 1993, 5.500% 08/01/06........ A1 A+ 1,041
SEE NOTES TO FINANCIAL STATEMENTS. 218 NATIONS FUNDS Nations Virginia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $2,000 Loudoun County, Virginia, Improvement GO Refunding, Series 1993A, (State Aid Withholding), 5.000% 10/01/02........ Aa1 AA+ $ 2,032 1,500 Loudoun County, Virginia, Industrial Development Authority, Hospital Revenue, (Loudoun Hospital Center Project) Series 1995, (FSA Insured), 5.500% 06/01/08........ Aaa AAA 1,576 1,000 Loudoun County, Virginia, Industrial Development Authority, Hospital Revenue, (Loudoun Hospital Center Project) Series 1995, (FSA Insured), 5.600% 06/01/09........ Aaa AAA 1,050 5,000 Loudoun County, Virginia, Industrial Development Authority, Revenue, (Air Force Retired Officers - Falcons Landing Project) Series 1994A, Prerefunded 11/01/04 @ 103, 8.750% 11/01/24........ Aaa AAA 5,833 510 Loudoun County, Virginia, Public Improvement GO, Series 2001C, (State Aid Withholding), 5.000% 11/01/14........ Aa1 AA+ 524 2,960 Loudoun County, Virginia, Public Improvement GO, Series 2001C, (State Aid Withholding), 5.000% 11/01/15........ Aa1 AA+ 3,023 2,710 Loudoun County, Virginia, Public Improvement GO, Series 2001C, (State Aid Withholding), 5.000% 11/01/16........ Aa1 AA+ 2,739 1,140 Lynchburg, Virginia, Public Improvement GO, Series 1997, 5.400% 05/01/17........ Aa3 AA 1,167 1,000 Medical College of Virginia, Hospital Authority, General Revenue, Series 1998, (MBIA Insured), 4.800% 07/01/11........ Aaa AAA 1,018 1,000 Newport News, Virginia, GO, Series 1998, 5.000% 03/01/18........ Aa2 AA 988
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $5,000 Newport News, Virginia, Public Improvement GO Refunding, Series 1993B, (State Aid Withholding), 5.200% 11/01/04........ Aa2 AA $ 5,265 1,000 Newport News, Virginia, Water and Sewer Authority, GO Refunding, Series 1993B, (State Aid Withholding), 5.100% 11/01/03........ Aa2 AA 1,041 3,500 Norfolk, Virginia, Capital Improvement GO Refunding, Series 1998, (FGIC Insured, State Aid Withholding), 5.000% 07/01/11........ Aaa AAA 3,627 2,250 Norfolk, Virginia, Redevelopment and Housing Authority, Educational Facilities Revenue, (Tidewater Community College Campus Project) Series 1995, 5.875% 11/01/15........ Aa1 AA+ 2,401 2,000 Norfolk, Virginia, Water Revenue, Series 1995, (MBIA Insured), 5.700% 11/01/10........ Aaa AAA 2,168 1,000 Portsmouth, Virginia, GO Refunding, Series 1993, 5.250% 08/01/04........ A1 AA- 1,047 3,710 Portsmouth, Virginia, Public Improvement GO Refunding, Series 2001A, (FGIC Insured), 5.500% 06/01/17 Aaa AAA 3,807 1,525 Prince William County, Virginia, Industrial Development Authority, Hospital Revenue Refunding, (Potomac Hospital Corporation Project) Series 1995, 6.550% 10/01/05........ Aaa NR 1,625 1,300 Prince William County, Virginia, Industrial Development Authority, Hospital Revenue Refunding, (Prince William Hospital Project) Series 1993, 5.625% 04/01/12........ A2 NR 1,310
SEE NOTES TO FINANCIAL STATEMENTS. 219 NATIONS FUNDS Nations Virginia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $1,000 Prince William County, Virginia, Park Authority, Water and Sewer Systems, Revenue Refunding, Series 1994, Prerefunded 10/15/04 @ 102, 6.300% 10/15/07........ NR NR $ 1,095 3,000 Prince William County, Virginia, Service Authority, Revenue Refunding, Series 1993, (FGIC Insured), 5.000% 07/01/21........ Aaa AAA 2,920 1,000 Richmond, Virginia, GO Refunding, Series 1995B, (FGIC Insured, State Aid Withholding), 5.000% 01/15/21........ Aaa AAA 977 1,430 Richmond, Virginia, Public Improvement GO, Series 1993B, (State Aid Withholding), 5.500% 07/15/09........ A1 AA 1,541 2,855 Richmond, Virginia, Public Improvement, GO Refunding, Series 1999A, (FSA Insured), 5.000% 01/15/19........ Aaa AAA 2,816 1,115 Roanoke County, Virginia, IDR, (Hollins College Project) Series 1998, 5.200% 03/15/17........ NR A 1,105 4,000 Roanoke, Virginia, Industrial Development Authority Hospital Revenue, (Carilion Health System Project) Series 2002A, 5.250% 07/01/12........ Aaa AAA 4,171 1,100 Spotsylvania County, Virginia, GO Refunding, Series 1998, (FSA Insured), 4.375% 07/15/05........ Aaa AAA 1,133 1,900 Spotsylvania County, Virginia, GO Refunding, Series 1998, (FSA Insured), 4.400% 07/15/06........ Aaa AAA 1,952 2,000 Spotsylvania County, Virginia, GO Refunding, Series 1998, (FSA Insured), 4.400% 07/15/07........ Aaa AAA 2,038 2,320 Spotsylvania County, Virginia, Public Improvement GO, Series 1992, Prerefunded 07/15/02 @ 102, 5.875% 07/15/09........ A1 AA- 2,394
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $2,535 Staunton, Virginia, Industrial Development Authority, Educational Facilities Revenue, (Mary Baldwin College Project) Series 1996, 6.600% 11/01/14........ NR NR $ 2,655 1,035 Suffolk Virginia, GO, Unrefunded Balance, Series 1993, 5.750% 08/01/08........ Aa2 AA- 1,095 4,300 Suffolk, Virginia, Redevelopment and Housing Authority, Multi-Family Housing Revenue Refunding, (Windsor Ltd. Partnership Project) Series 2001, (FNMA Insured), Mandatory Put 07/01/11 @ 100, 4.850% 07/01/31........ Aaa NR 4,312 1,110 Suffolk, Virginia, GO Refunding, Series 1993, 5.400% 08/01/04........ Aa2 AA- 1,167 2,300 Virginia Beach, Virginia, GO Refunding, Series 1993, 5.400% 07/15/08........ Aa1 AA+ 2,467 3,060 Virginia Beach, Virginia, Public Improvement GO, Series 2000, 5.500% 03/01/17........ Aa1 AA+ 3,202 2,805 Virginia Beach, Virginia, Public Improvement GO, Series 2000, 5.500% 03/01/18........ Aa1 AA+ 2,924 1,790 Virginia Beach, Virginia, Water and Sewer Revenue, Series 2000, 5.250% 08/01/17........ Aa3 AA 1,819 1,935 Virginia Beach, Virginia, Water and Sewer Revenue, Series 2000, 5.250% 08/01/18........ Aa3 AA 1,957 2,035 Virginia Beach, Virginia, Water and Sewer Revenue, Series 2000, 5.250% 08/01/19........ Aa3 AA 2,051 2,145 Virginia Beach, Virginia, Water and Sewer Revenue, Series 2000, 5.250% 08/01/20........ Aa3 AA 2,158 5,000 Virginia College Building Authority, Virginia Educational Facilities Revenue, (University Richmond Project) Series 2002A, Mandatory Put 03/01/09 @ 100, 5.000% 03/01/32........ Aa1 AA 5,168
SEE NOTES TO FINANCIAL STATEMENTS. 220 NATIONS FUNDS Nations Virginia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $1,000 Virginia Commonwealth, Transportation Board, Transportation Program Revenue, (Oak Grove Connector Project) Series 1997A, 5.250% 05/15/22........ Aa1 AA+ $ 1,002 3,375 Virginia Commonwealth, Transportation Board, Transportation Revenue Refunding, (Route 58 Corridor Project) Series 1997C, (MBIA Insured), 5.000% 05/15/13........ Aaa AAA 3,452 1,245 Virginia Commonwealth, Transportation Board, Transportation Revenue Refunding, (U.S. Route 58 Corridor Project) Series 1997C, 5.125% 05/15/19........ Aa1 AA+ 1,242 2,465 Virginia Port Authority, Virginia, Commonwealth Port Fund Revenue, Series 1996, AMT, 5.550% 07/01/12........ Aa1 AA+ 2,545 1,000 Virginia Port Authority, Virginia, Commonwealth Port Fund Revenue, Series 1997, AMT, (MBIA Insured), 5.650% 07/01/17........ Aaa AAA 1,029 1,210 Virginia Port Authority, Virginia, Port Facilities Revenue, Series 1997, AMT, (MBIA Insured), 6.000% 07/01/07........ Aaa AAA 1,305 2,655 Virginia State Housing, Housing Development Authority, Revenue, (Rental Housing Project) Series 2000B, AMT, 5.875% 08/01/15(a)..... Aa1 AA+ 2,764 2,000 Virginia State Transportation Board, Transportation Contract Revenue, (US Route 58 Corridor Development Project) Series 1993PG-B, 5.350% 05/15/09........ Aa1 AA+ 2,093 1,440 Virginia State, Housing Development Authority, Commonwealth Mortgage Revenue, Series 1994H, Subseries H-2, 6.200% 01/01/08........ Aa1 AA+ 1,479
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $1,430 Virginia State, Housing Development Authority, Commonwealth Mortgage Revenue, Series 1995D-3, 6.000% 01/01/12........ Aa1 AA+ $ 1,501 1,470 Virginia State, Housing Development Authority, Commonwealth Mortgage Revenue, Series 1995D-3, 6.000% 07/01/12........ Aa1 AA+ 1,543 1,695 Virginia State, Housing Development Authority, Commonwealth Mortgage Revenue, Series 1995D-3, 6.100% 01/01/15........ Aa1 AA+ 1,770 3,595 Virginia State, Housing Development Authority, Commonwealth Mortgage Revenue, Series 2000B-3, 5.950% 07/01/14........ Aa1 AA+ 3,825 2,455 Virginia State, Housing Development Authority, Commonwealth Mortgage Revenue, Series 2000B-4, 5.500% 01/01/15........ Aa1 AA+ 2,527 1,480 Virginia State, Public School Authority, Revenue Refunding, Series 1993B, (State Aid Withholding), 5.100% 01/01/05........ Aa1 AA 1,545 2,195 Virginia State, Public School Authority, Revenue, Series 1993A, (State Aid Withholding), 5.400% 01/01/08........ Aa1 AA 2,284 1,120 Virginia State, Resource Authority, Infrastructure Revenue, Series 2000A, (MBIA Insured), 5.500% 05/01/22........ Aaa AAA 1,148 2,970 Virginia State, Resource Authority, Sewer Systems Revenue Refunding, (Harrisonburg-Rockingham Project) Series 1998, 5.000% 05/01/18........ NR AA 2,922 1,000 Virginia State, Resource Authority, Sewer Systems Revenue, (Hopewell Regional Wastewater Facilities Project) Series 1995A, AMT, 6.000% 10/01/15........ NR AA 1,051 2,000 Virginia State, Resource Authority, Systems Revenue Refunding, Series 1998, 5.000% 05/01/22........ NR AA 1,943
SEE NOTES TO FINANCIAL STATEMENTS. 221 NATIONS FUNDS Nations Virginia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $2,470 Virginia State, Resource Authority, Water and Sewer Systems Revenue Refunding, (Washington County Service Project) Series 1993, 5.150% 10/01/07........ NR AA $ 2,553 1,020 Virginia State, Resource Authority, Water and Sewer Systems Revenue, (Suffolk Project) Series 1996A, 5.500% 04/01/17........ NR AA 1,047 1,000 Virginia State, Resource Authority, Water and Sewer Systems Revenue, (Sussex Service Authority Project) Series 1998, 4.625% 10/01/18........ NR AA 934 5,345 Virginia State, Transportation Board Authority, Transportation Contract Revenue, (Northern Virginia Transportation District Project) Series 1996A, 5.125% 05/15/21........ Aa1 AA+ 5,258 3,000 Virginia State, Transportation Board Authority, Transportation Revenue Refunding, (U.S. Route 58 Corridor Development Program) Series 1993A, 4.900% 05/15/03........ Aa1 AA+ 3,087 5,390 Virginia State, Transportation Board Authority, Transportation Revenue Refunding, (U.S. Route 58 Corridor Development Program) Series 1993A, 5.500% 05/15/09........ Aa1 AA+ 5,560 2,105 Virginia State, Transportation Board Authority, Transportation Revenue, (U.S. Route 58 Corridor Development Program) Series 1993B, 5.100% 05/15/05........ Aa1 AA+ 2,183 1,000 Virginia, Biotechnology Research Park Authority, Lease Revenue, (Biotech Two Project) Series 1996, 5.300% 09/01/13........ Aa1 AA+ 1,035 2,350 Virginia, Biotechnology Research Park Authority, Lease Revenue, (Biotechnology Two Project) Series 1996, 5.750% 09/01/05........ Aa1 AA+ 2,517
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $2,475 Virginia, Chesapeake Bay Bridge and Tunnel Commission District, Revenue, Series 1995, (FGIC Insured), Prerefunded 07/01/05 @ 102, 5.875% 07/01/10........ Aaa AAA $ 2,701 2,300 Virginia, College Building Authority, Virginia Educational Facilities Revenue, (Public Higher Education Financing Program) Series 1999A, 5.375% 09/01/12........ Aa1 AA 2,418 5,000 Virginia, Southeastern Public Service Authority, Revenue Refunding, Series 1993A, (MBIA Insured), 5.100% 07/01/08........ Aaa AAA 5,256 1,000 Washington County, Virginia, Industrial Development Authority, Hospital Facility Revenue Refunding, (Johnston Memorial Hospital Project) Series 1995, Prerefunded 07/01/05 @ 102, 6.000% 07/01/14........ A2 NR 1,090 2,250 West Point, Virginia, Industrial Development Authority, Solid Waste Disposal Revenue, (Chesapeake Corporation Project) Series 1994A, AMT, 6.375% 03/01/19........ B1 BB 1,944 -------- 265,809 -------- ALABAMA -- 0.7% 2,000 Mobile, Alabama, Industrial Development Board, PCR Refunding, (International Paper Company Project) Series 1998B, 4.750% 04/01/10 Baa2.. BBB 1,938 -------- DISTRICT OF COLUMBIA -- 0.7% 1,000 Metropolitan Washington, District of Columbia, Airport Authority, Virginia General Airport Revenue Refunding, Series 1998B, AMT, (MBIA Insured), 5.250% 10/01/10........ Aaa AAA 1,025
SEE NOTES TO FINANCIAL STATEMENTS. 222 NATIONS FUNDS Nations Virginia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- DISTRICT OF COLUMBIA -- (CONTINUED) $1,000 Metropolitan Washington, District of Columbia, Airport Authority, Virginia General Airport Revenue, Series 1992A, AMT, (MBIA Insured), 6.500% 10/01/05........ Aaa AAA $ 1,038 -------- 2,063 -------- GEORGIA -- 0.5% 1,450 Richmond County, Georgia, Development Authority, Environmental Improvement Revenue, (International Paper Company Project) Series 2001A, 5.150% 03/01/15........ Baa2 BBB 1,412 -------- MAINE -- 0.8% 2,500 Baileyville, Maine, PCR, (Georgia-Pacific Corporation Project) Series 1998, 4.750% 06/01/05........ Baa3 NR 2,471 -------- MICHIGAN -- 0.7% 2,000 Southfield, Michigan, Library Building Authority, GO, Series 2000, (MBIA Insured), 5.500% 05/01/24........ Aaa AAA 2,022 -------- NEW YORK -- 0.7% 2,005 New York City, New York, Industrial Development Agency, Civic Facility Revenue, (Polytechnic University Project) Series 2000, 5.750% 11/01/10........ Baa3 BBB- 2,100 --------
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- SOUTH CAROLINA -- 0.8% $2,000 Calhoun County, South Carolina, Solid Waste Disposal Facility Revenue, (Carolina Eastman Company Project) Series 1992, AMT, 6.750% 05/01/17........ A2 A- $ 2,324 -------- TENNESSEE -- 0.7% 2,000 Memphis-Shelby County, Tennessee, Airport Authority, Special Facilities Revenue Refunding, (Federal Express Corporation Project) Series 2001, 5.000% 09/01/09........ Baa2 BBB 2,011 -------- WASHINGTON -- 2.1% 1,000 Energy Northwest Washington, Electric Revenue Refunding, Series 2002A, (MBIA Insured), 5.750% 07/01/18........ Aaa AAA 1,048 5,035 Washington State, Motor Vehicle Fuel Tax, GO, Series 1997F, 5.375% 07/01/22........ Aa1 AA+ 5,043 -------- 6,091 -------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $279,530)................ 288,241 --------
SEE NOTES TO FINANCIAL STATEMENTS. 223 NATIONS FUNDS Nations Virginia Intermediate Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
SHARES VALUE (000) (000) -------------------------------------------------------------------------------- INVESTMENT COMPANIES -- 2.0% (Cost: $5,941) 5,941 Nations Tax Exempt Fund, Primary A Class#......... 5,941 -------- TOTAL INVESTMENTS (Cost $285,471*)................................ 100.4% $294,182 -------- OTHER ASSETS AND LIABILITIES (NET)................ (0.4)% Cash..................................................... $ 1 Receivable for Fund shares sold.......................... 835 Dividends receivable..................................... 6 Interest receivable...................................... 4,430 Payable for Fund shares redeemed......................... (73) Investment advisory fee payable.......................... (49) Administration fee payable............................... (50) Shareholder servicing and distribution fees payable...... (18) Distributions payable.................................... (946) Payable for investment securities purchased.............. (5,176) Accrued Trustees' fees and expenses...................... (55) Accrued expenses and other liabilities................... (94) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................. (1,189) -------- NET ASSETS........................................ 100.0% $292,993 ======== NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 639 Accumulated net realized loss on investments sold........ (1,032) Net unrealized appreciation of investments............... 8,711 Paid-in capital.......................................... 284,675 -------- NET ASSETS............................................... $292,993 ======== VALUE -------------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($237,459,461 / 22,006,302 shares outstanding)......... $10.79 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($45,677,849 / 4,233,135 shares outstanding)........... $10.79 ======== Maximum sales charge..................................... 3.25% Maximum offering price per share......................... $11.15 INVESTOR B SHARES: Net asset value and offering price per share** ($8,986,784 / 832,811 shares outstanding).............. $10.79 ======== INVESTOR C SHARES: Net asset value and offering price per share** ($869,088 / 80,544 shares outstanding)................. $10.79 ========
--------------- *Federal Income Tax Information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Virginia Intermediate Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Water Revenue 13.76% Resource Recovery 11.06% Transportation Revenue 10.87% SEE NOTES TO FINANCIAL STATEMENTS. 224 NATIONS FUNDS Nations Virginia Municipal Bond Fund STATEMENT OF NET ASSETS MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MUNICIPAL BONDS AND NOTES -- 98.0% VIRGINIA -- 83.0% $1,000 Arlington County, Virginia, Industrial Development Authority, Facilities Revenue Refunding, (Lee Gardens Housing Corporation-Housing Mortgage - Woodbury Park Apartments Project) Series 1998A, 5.450% 01/01/29....... NR A $ 946 1,000 Arlington County, Virginia, Industrial Development Authority, Hospital Facilities Revenue, (Virginia Hospital Center Project) Series 2001, 5.250% 07/01/21....... A2 NR 953 1,000 Chesapeake, Virginia, Water and Sewer GO, Series 1995A, 5.375% 12/01/20....... Aa2 AA 1,010 500 Covington-Allegheny County, Virginia, IDR Refunding, (Westvaco Corporation Project) Series 1994, 6.650% 09/01/18....... Baa2 BBB 520 500 Fairfax County, Virginia, Industrial Development Authority, Health Care Revenue Refunding, (Inova Health Systems Project) Series 1996, 5.500% 08/15/10....... Aa2 AA 523 1,000 Fairfax County, Virginia, Public Improvement GO, Series 1999B, 5.500% 12/01/16....... Aaa AAA 1,046 1,000 Fairfax County, Virginia, Water and Sewer Revenue Refunding, Series 1993, (AMBAC Insured), 5.500% 11/15/13....... Aaa AAA 1,025 1,000 Fairfax County, Virginia, Water Authority, Water Revenue, Series 2000, 5.625% 04/01/25....... Aa1 AAA 1,038 1,000 Fairfax County, Virginia, Water Authority, Water Revenue, Unrefunded Balance, Series 1992, 6.000% 04/01/22....... Aa1 AAA 1,065
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $ 800 Giles County, Virginia, Industrial Development Authority, Exempt Facilities Revenue, (Hoechst Celanese Corporation Project) Series 1995, AMT, 5.950% 12/01/25....... Baa2 BBB $ 758 1,000 Giles County, Virginia, Industrial Development Authority, Solid Waste Disposal Facilities Revenue, (Hoechst Celanese Corporation Project) Series 1992, AMT, 6.625% 12/01/22....... Baa2 BBB 1,022 400 Halifax County, Virginia, Industrial Development Authority, Hospital Revenue Refunding, (Halifax Regional Hospital, Inc. Project) Series 1998, 5.250% 09/01/17....... NR A 382 500 Hanover County, Virginia, Industrial Development Authority, Revenue, (Bon Secours Health Systems Project) Series 1995, (MBIA Insured), 5.500% 08/15/25....... Aaa AAA 501 500 Henrico County, Virginia, Industrial Development Authority, Public Facilities Lease Revenue, Series 1994, Prerefunded 08/01/05 @ 102, 7.000% 08/01/13....... Aa2 AA 563 500 Henry County, Virginia, GO, Series 1994, 5.750% 07/15/07....... A2 A 527 700 James City and County, Virginia, GO, Series 1995, (FGIC Insured, State Aid Withholding), 5.250% 12/15/14....... Aaa AAA 719 765 Loudoun County, Virginia, Industrial Development Authority, Hospital Revenue, (Loudoun Hospital Center Project) Series 1995, (FSA Insured), 5.600% 06/01/09....... Aaa AAA 803
SEE NOTES TO FINANCIAL STATEMENTS. 225 NATIONS FUNDS Nations Virginia Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $ 500 Loudoun County, Virginia, Industrial Development Authority, Hospital Revenue, (Loudoun Hospital Center Project) Series 1995, (FSA Insured), 5.800% 06/01/20....... Aaa AAA $ 510 2,000 Montgomery County, Virginia, Industrial Development Lease Authority, Revenue, Series 2000B, (AMBAC Insured), 5.500% 01/15/22....... Aaa AAA 2,052 1,000 Prince William County, Virginia, Industrial Development Authority, Lease Revenue, (ATCC Project) Series 1996, 6.000% 02/01/14....... Aa3 NR 1,015 500 Prince William County, Virginia, Park Authority, Revenue, Series 1994, Prerefunded 10/15/04 @ 102, 6.875% 10/15/16....... NR NR 555 1,000 Staunton, Virginia, Industrial Development Authority, Educational Facilities Revenue, (Mary Baldwin College Project) Series 1996, 6.600% 11/01/14....... NR NR 1,047 1,500 Suffolk, Virginia, Redevelopment and Housing Authority, Multi-Family Housing Revenue Refunding, (Windsor Ltd. Partnership Project) Series 2001, (FNMA Insured), Mandatory Put 07/01/11 @ 100, 4.850% 07/01/31....... Aaa NR 1,504 500 Virginia Beach, Virginia, Public Improvement GO Refunding, Series 1994, (State Aid Withholding), 5.750% 11/01/08....... Aa1 AA+ 542 1,000 Virginia Beach, Virginia, Public Improvement GO, Series 2000, 5.500% 03/01/18....... Aa1 AA+ 1,042 1,035 Virginia State, Housing Development Authority, Commonwealth Mortgage Revenue, Series 2001D-D-1, 4.750% 07/01/12....... Aa1 AA+ 1,037
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- VIRGINIA -- (CONTINUED) $ 640 Virginia State, Public School Authority, Revenue, Series 1994A, (State Aid Withholding), 6.125% 08/01/11....... Aa1 AA $ 694 1,070 Virginia State, Residential Authority, Infrastructure Revenue, Series 2000A, (MBIA Insured), 5.500% 05/01/21....... Aaa AAA 1,097 750 Virginia State, Resource Authority, Sewer Systems Revenue, (Hopewell Regional Wastewater Facilities Project) Series 1995A, AMT, 6.000% 10/01/15....... NR AA 788 500 Virginia State, Resource Authority, Water and Sewer Systems Revenue, (Fauquier County Water and Sanitation Project) Series 1994C, 6.125% 05/01/14....... NR AA 523 1,800 West Point, Virginia, Industrial Development Authority, Solid Waste Disposal Revenue, (Chesapeake Corporation Project) Series 1994A, AMT, 6.375% 03/01/19....... B1 BB 1,555 ------- 27,362 ------- WISCONSIN -- 3.0% 1,000 Wisconsin State, Health and Educational Facilities Revenue, (Agnesian Healthcare Project) Series 2001, 6.000% 07/01/21....... A3 A- 1,003 ------- FLORIDA -- 6.5% 1,000 Florida State, Board of Education, Lottery Revenue, Series 2001B, 5.000% 07/01/20....... Aaa AAA 972 1,195 Miami-Dade County, Florida, Health Authority, Hospital Revenue Refunding, (Miami Childrens Hospital Project) Series 2001, (AMBAC Insured), 4.375% 08/15/10....... Aaa AAA 1,186 ------- 2,158 -------
SEE NOTES TO FINANCIAL STATEMENTS. 226 NATIONS FUNDS Nations Virginia Municipal Bond Fund STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002
PRINCIPAL MOODY'S S&P AMOUNT RATINGS VALUE (000) (UNAUDITED) (000) --------------------------------------------------------------- MISSISSIPPI -- 5.5% $1,285 Mississippi State, Hospital Facilities and Equipment Authority, Revenue, (Forrest County General Hospital Project) Series 2000, (FSA Insured), 5.625% 01/01/20....... Aaa NR $ 1,304 500 Warren County, Mississippi, Environmental Improvement Revenue Refunding, (International Paper Company Project) Series 2000A, AMT, 6.700% 08/01/18....... Baa2 BBB 521 ------- 1,825 ------- TOTAL MUNICIPAL BONDS AND NOTES (Cost: $31,410)......................... 32,348 ------- SHARES (000) --------- INVESTMENT COMPANIES -- 1.1% (Cost: $375) 375 Nations Tax Exempt Fund, Primary A Class#.................................. 375 -------
TOTAL INVESTMENTS (Cost $31,785*)................................. 99.1% 32,723 ------- OTHER ASSETS AND LIABILITIES (NET)................ 0.9% Receivable for Fund shares sold.......................... $ 1 Interest receivable...................................... 494 Payable for Fund shares redeemed......................... (6) Administration fee payable............................... (6) Shareholder servicing and distribution fees payable...... (8) Distributions payable.................................... (107) Accrued Trustees' fees and expenses...................... (45) Accrued expenses and other liabilities................... (40) ------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................. 283 ------- NET ASSETS........................................ 100.0% $33,006 ======= NET ASSETS CONSIST OF: Undistributed net investment income...................... $ 88 Accumulated net realized loss on investments sold........ (586) Net unrealized appreciation of investments............... 938 Paid-in capital.......................................... 32,566 ------- NET ASSETS............................................... $33,006 ======= VALUE ------------------------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($22,473,547 / 2,317,857 shares outstanding)........... $9.70 ======= INVESTOR A SHARES: Net asset value and redemption price per share ($1,485,707 / 153,387 shares outstanding).............. $9.69 ======= Maximum sales charge..................................... 4.75% Maximum offering price per share......................... $10.17 INVESTOR B SHARES: Net asset value and offering price per share** ($8,991,355 / 927,359 shares outstanding).............. $9.70 ======= INVESTOR C SHARES: Net asset value and offering price per share** ($55,154 / 5,690 shares outstanding)................... $9.69 =======
--------------- *Federal income tax information (see Note 7). **The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. #Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, LLC. Nations Virginia Municipal Bond Fund had the following industry concentration greater than 10% at March 31, 2002 (as a percentage of net assets): Hospital Revenue 21.71% Water Revenue 16.77% Housing Revenue 10.57% SEE NOTES TO FINANCIAL STATEMENTS. 227 NATIONS FUNDS STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2002 ABBREVIATIONS: AMBAC American Municipal Bond Assurance Corporation AMBAC-TCRS American Municipal Bond Assurance Corporation -- Transferable Custodial Receipts AMT Alternative Minimum Tax CONNIE LEE College Construction Loan Insurance Association FGIC Financial Guaranty Insurance Company FHLMC COLL Federal Home Loan Mortgage Corporation collateral FHA Federal Housing Authority FHA COLL Federal Housing Authority collateral FNMA COLL Federal National Mortgage Association collateral FSA Financial Security Assurance GO General Obligation GNMA COLL Government National Mortgage Association collateral GTY-AGMT Guarantee Agreement GTD STD LNS Guaranteed Student Loans IDR Industrial Development Revenue LOC Letter of Credit MBIA Municipal Bond Insurance Association MBIA-IBC Municipal Bond Insurance Association -- Insured Bond Certificate NR Not Rated PCR Pollution Control Revenue PSF-GTD Permanent School Fund Guarantee SCSDE South Carolina School District Enhancement SCH BD GTY School Bond Guarantee VA COLL Veterans Administration collateral VA Veterans Administration
SEE NOTES TO FINANCIAL STATEMENTS. 228 [This page intentionally left blank] 229 NATIONS FUNDS STATEMENTS OF OPERATIONS For the year ended March 31, 2002
SHORT-TERM INTERMEDIATE MUNICIPAL MUNICIPAL MUNICIPAL INCOME BOND INCOME ---------------------------------------------------- (IN THOUSANDS) INVESTMENT INCOME: Interest.................................................... $ 10,055 $ 61,437 $ 50,809 Dividend income from affiliated funds....................... 402 181 248 -------------- -------------- -------------- 10,457 61,618 51,057 -------------- -------------- -------------- EXPENSES: Investment advisory fee..................................... 842 4,819 4,550 Administration fee.......................................... 618 2,650 2,002 Transfer agent fees......................................... 76 364 275 Custodian fees.............................................. 18 76 58 Legal and audit fees........................................ 87 103 101 Trustees' fees and expenses................................. 29 28 29 Interest expense............................................ --* 6 5 Registration and filing fees................................ 34 46 48 Printing expense............................................ 34 60 58 Other....................................................... 26 84 62 -------------- -------------- -------------- Subtotal................................................ 1,764 8,236 7,188 Shareholder servicing and distribution fees: Investor A Shares......................................... 175 71 120 Investor B Shares......................................... 26 31 87 Investor C Shares......................................... 129 13 13 -------------- -------------- -------------- Total expenses.......................................... 2,094 8,351 7,408 Fees waived and/or expenses reimbursed by investment advisor, administrator and/or distributor................. (641) (2,198) (1,723) -------------- -------------- -------------- Net expenses............................................ 1,453 6,153 5,685 -------------- -------------- -------------- NET INVESTMENT INCOME/(LOSS)................................ 9,004 55,465 45,372 -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: Net realized gain/(loss) on investments..................... (14) 3,825 998 Net change in unrealized appreciation/(depreciation) of investments............................................... (2,703) (22,442) (25,049) -------------- -------------- -------------- Net realized and unrealized gain/(loss) on investments...... (2,717) (18,617) (24,051) -------------- -------------- -------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................................ $ 6,287 $ 36,848 $ 21,321 ============== ============== ==============
--------------- * Amount represents less than $500. SEE NOTES TO FINANCIAL STATEMENTS. 230 NATIONS FUNDS STATEMENTS OF OPERATIONS (CONTINUED)
FLORIDA GEORGIA MARYLAND CALIFORNIA INTERMEDIATE FLORIDA INTERMEDIATE GEORGIA KANSAS INTERMEDIATE MARYLAND MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL BOND BOND BOND BOND BOND INCOME BOND BOND ------------------------------------------------------------------------------------------------------------------------- $ 10,852 $ 12,210 $ 7,530 $ 7,805 $ 1,441 $ 5,290 $ 10,052 $ 2,079 65 49 30 43 17 40 61 27 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 10,917 12,259 7,560 7,848 1,458 5,330 10,113 2,106 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 1,028 952 705 610 136 533 804 204 452 523 310 335 60 235 442 90 63 74 44 47 8 32 61 13 14 16 10 11 3 7 14 4 89 93 87 91 81 72 94 82 29 29 28 28 29 29 28 29 -- 1 1 --* --* 1 --* --* 19 6 3 2 3 16 5 5 32 23 27 19 22 24 21 23 20 24 10 18 5 16 24 8 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 1,746 1,741 1,225 1,161 347 965 1,493 458 369 18 115 32 4 6 46 7 64 51 105 68 83 2 54 176 23 6 2 10 2 -- 8 3 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 2,202 1,816 1,447 1,271 436 973 1,601 644 (513) (552) (377) (399) (184) (325) (489) (212) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 1,689 1,264 1,070 872 252 648 1,112 432 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 9,228 10,995 6,490 6,976 1,206 4,682 9,001 1,674 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 56 341 948 (45) 434 215 747 117 (4,341) (3,484) (2,554) (1,887) (902) (1,921) (3,847) (539) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (4,285) (3,143) (1,606) (1,932) (468) (1,706) (3,100) (422) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 4,943 $ 7,852 $ 4,884 $ 5,044 $ 738 $ 2,976 $ 5,901 $ 1,252 ============ ============ ============ ============ ============ ============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS. 231 NATIONS FUNDS STATEMENTS OF OPERATIONS (CONTINUED) For the year ended March 31, 2002
NORTH CAROLINA SOUTH CAROLINA INTERMEDIATE NORTH CAROLINA INTERMEDIATE MUNICIPAL MUNICIPAL MUNICIPAL BOND BOND BOND ---------------------------------------------------- (IN THOUSANDS) INVESTMENT INCOME: Interest.................................................... $ 10,052 $ 2,167 $ 13,189 Dividend income from affiliated funds....................... 78 17 46 -------------- -------------- -------------- 10,130 2,184 13,235 -------------- -------------- -------------- EXPENSES: Investment advisory fee..................................... 797 207 977 Administration fee.......................................... 438 91 537 Transfer agent fees......................................... 61 13 75 Custodian fees.............................................. 14 3 17 Legal and audit fees........................................ 95 83 97 Trustees' fees and expenses................................. 29 29 28 Interest expense............................................ --* --* 1 Registration and filing fees................................ 3 3 4 Printing expense............................................ 20 23 22 Other....................................................... 23 7 24 -------------- -------------- -------------- Subtotal................................................ 1,480 459 1,782 Shareholder servicing and distribution fees: Investor A Shares......................................... 28 8 43 Investor B Shares......................................... 56 159 74 Investor C Shares......................................... 2 2 31 -------------- -------------- -------------- Total expenses.......................................... 1,566 628 1,930 Fees waived and/or expenses reimbursed by investment advisor, administrator and/or distributor................. (483) (210) (559) -------------- -------------- -------------- Net expenses............................................ 1,083 418 1,371 -------------- -------------- -------------- NET INVESTMENT INCOME/(LOSS)................................ 9,047 1,766 11,864 -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: Net realized gain/(loss) on investments..................... 412 109 306 Net change in unrealized appreciation/(depreciation) of investments............................................... (3,257) (616) (3,275) -------------- -------------- -------------- Net realized and unrealized gain/(loss) on investments...... (2,845) (507) (2,969) -------------- -------------- -------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................................ $ 6,202 $ 1,259 $ 8,895 ============== ============== ==============
--------------- * Amount represents less than $500. SEE NOTES TO FINANCIAL STATEMENTS. 232 NATIONS FUNDS STATEMENTS OF OPERATIONS (CONTINUED)
TENNESSEE TEXAS VIRGINIA SOUTH CAROLINA INTERMEDIATE TENNESSEE INTERMEDIATE TEXAS INTERMEDIATE VIRGINIA MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL BOND BOND BOND BOND BOND BOND BOND ------------------------------------------------------------------------------------------------------------------------ $ 1,582 $ 2,458 $ 514 $ 15,265 $ 718 $ 15,273 $ 1,864 15 43 4 31 15 81 24 -------------- -------------- -------------- -------------- -------------- -------------- -------------- 1,597 2,501 518 15,296 733 15,354 1,888 -------------- -------------- -------------- -------------- -------------- -------------- -------------- 150 202 49 1,139 68 1,208 172 66 111 21 627 30 664 76 9 15 3 86 4 92 11 3 4 1 18 1 20 3 82 82 79 102 80 102 81 29 29 29 29 29 29 28 --* -- --* 2 --* 1 --* 3 5 5 7 3 3 3 20 14 21 19 20 26 22 5 10 4 21 5 27 7 -------------- -------------- -------------- -------------- -------------- -------------- -------------- 367 472 212 2,050 240 2,172 403 4 21 5 14 1 110 3 78 14 32 20 50 89 101 4 1 2 --* --* 8 1 -------------- -------------- -------------- -------------- -------------- -------------- -------------- 453 508 251 2,084 291 2,379 508 (187) (219) (154) (624) (158) (661) (196) -------------- -------------- -------------- -------------- -------------- -------------- -------------- 266 289 97 1,460 133 1,718 312 -------------- -------------- -------------- -------------- -------------- -------------- -------------- 1,331 2,212 421 13,836 600 13,636 1,576 -------------- -------------- -------------- -------------- -------------- -------------- -------------- 618 -- 41 698 88 1,164 150 (888) (514) (169) (4,954) (290) (4,717) (581) -------------- -------------- -------------- -------------- -------------- -------------- -------------- (270) (514) (128) (4,256) (202) (3,553) (431) -------------- -------------- -------------- -------------- -------------- -------------- -------------- $ 1,061 $ 1,698 $ 293 $ 9,580 $ 398 $ 10,083 $ 1,145 ============== ============== ============== ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 233 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS
SHORT-TERM INTERMEDIATE MUNICIPAL INCOME MUNICIPAL BOND -------------------------------- -------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 3/31/02 3/31/01 3/31/02 3/31/01 -------------------------------------------------------------------- (IN THOUSANDS) Net investment income/(loss)......................... $ 9,004 $ 5,396 $ 55,465 $ 52,108 Net realized gain/(loss) on investments.............. (14) (149) 3,825 (857) Net change in unrealized appreciation/(depreciation) of investments..................................... (2,703) 2,564 (22,442) 45,131 -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets resulting from operations......................................... 6,287 7,811 36,848 96,382 Distributions to shareholders from net investment income: Primary A Shares................................... (6,582) (4,292) (54,029) (51,156) Investor A Shares.................................. (2,088) (871) (1,236) (835) Investor B Shares.................................. (71) (186) (111) (96) Investor C Shares.................................. (248) (47) (47) (20) Distributions to shareholders from net realized gains on investments: Primary A Shares................................... -- -- -- -- Investor A Shares.................................. -- -- -- -- Investor B Shares.................................. -- -- -- -- Investor C Shares.................................. -- -- -- -- Net increase/(decrease) in net assets from Fund share transactions....................................... 402,545 5,629 (5,822) 302,645 -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets................ 399,843 8,044 (24,397) 346,920 NET ASSETS: Beginning of period.................................. 133,497 125,453 1,219,940 873,020 -------------- -------------- -------------- -------------- End of period........................................ $ 533,340 $ 133,497 $ 1,195,543 $ 1,219,940 ============== ============== ============== ============== Undistributed net investment income/(distributions in excess of net investment income) at end of period............................................. $ 142 $ 50 $ 2,397 $ 1,190 ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 234 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
CALIFORNIA FLORIDA INTERMEDIATE MUNICIPAL INCOME MUNICIPAL BOND MUNICIPAL BOND ----------------------------------- ------------------------------- ------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 3/31/02 3/31/01 3/31/02 3/31/01 3/31/02 3/31/01 ------------------------------------------------------------------------------------------------------- $ 45,372 $ 42,275 $ 9,228 $ 8,950 $ 10,995 $ 10,852 998 4,250 56 1,117 341 172 (25,049) 43,979 (4,341) 7,388 (3,484) 7,500 -------------- -------------- -------------- -------------- -------------- -------------- 21,321 90,504 4,943 17,455 7,852 18,524 (42,656) (40,064) (2,323) (1,448) (10,465) (10,331) (2,281) (1,795) (6,589) (7,146) (317) (354) (351) (363) (236) (191) (186) (162) (52) (53) (82) (21) (18) (5) -- -- (162) (78) -- -- -- -- (583) (359) -- -- -- -- (23) (11) -- -- -- -- (7) (1) -- -- (40,107) 283,421 25,668 1,497 (18,953) 20,534 -------------- -------------- -------------- -------------- -------------- -------------- (64,126) 331,650 20,606 9,697 (22,087) 28,206 930,450 598,800 193,487 183,790 250,361 222,155 -------------- -------------- -------------- -------------- -------------- -------------- $ 866,324 $ 930,450 $ 214,093 $ 193,487 $ 228,274 $ 250,361 ============== ============== ============== ============== ============== ============== $ 1,982 $ 1,128 $ 567 $ 457 $ 211 $ 22 ============== ============== ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 235 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FLORIDA GEORGIA INTERMEDIATE MUNICIPAL BOND MUNICIPAL BOND -------------------------------- -------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 3/31/02 3/31/01 3/31/02 3/31/01 -------------------------------------------------------------------- (IN THOUSANDS) Net investment income/(loss)......................... $ 6,490 $ 6,746 $ 6,976 $ 6,696 Net realized gain/(loss) on investments.............. 948 405 (45) 108 Net change in unrealized appreciation/(depreciation) of investments..................................... (2,554) 6,378 (1,887) 5,250 -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets resulting from operations......................................... 4,884 13,529 5,044 12,054 Distributions to shareholders from net investment income: Primary A Shares................................... (4,009) (4,107) (6,131) (5,867) Investor A Shares.................................. (2,075) (2,183) (561) (546) Investor B Shares.................................. (395) (455) (247) (255) Investor C Shares.................................. (6) (1) (36) (28) Distributions to shareholders from net realized gains on investments: Primary A Shares................................... (394) (96) -- -- Investor A Shares.................................. (216) (54) -- -- Investor B Shares.................................. (49) (13) -- -- Investor C Shares.................................. (1) --* -- -- Net increase/(decrease) in net assets from Fund share transactions....................................... (16,359) 17 10,052 (553) -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets................ (18,620) 6,637 8,121 4,805 NET ASSETS: Beginning of period.................................. 148,236 141,599 147,573 142,768 -------------- -------------- -------------- -------------- End of period........................................ $ 129,616 $ 148,236 $ 155,694 $ 147,573 ============== ============== ============== ============== Undistributed net investment income/(distributions in excess of net investment income) at end of period............................................. $ 322 $ 224 $ 251 $ 162 ============== ============== ============== ==============
--------------- * Amount represents less than $500. (a)Kansas Municipal Income commenced operations on July 17, 2000. SEE NOTES TO FINANCIAL STATEMENTS. 236 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
GEORGIA KANSAS MARYLAND INTERMEDIATE MARYLAND MUNICIPAL BOND MUNICIPAL INCOME MUNICIPAL BOND MUNICIPAL BOND ------------------------------- --------------------------- --------------------------- --------------------------- YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 3/31/02 3/31/01 3/31/02 3/31/01(A) 3/31/02 3/31/01 3/31/02 3/31/01 ------------------------------------------------------------------------------------------------------------------------- $ 1,206 $ 1,205 $ 4,682 $ 3,769 $ 9,001 $ 9,247 $ 1,674 $ 1,573 434 (7) 215 182 747 356 117 (14) (902) 1,404 (1,921) 4,390 (3,847) 7,548 (539) 2,065 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 738 2,602 2,976 8,341 5,901 17,151 1,252 3,624 (807) (736) (4,569) (3,725) (7,993) (8,276) (910) (866) (80) (84) (106) (39) (785) (757) (124) (93) (312) (383) (7) (5) (191) (202) (627) (606) (7) (2) -- -- (26) (11) (12) (8) -- -- (80) (16) -- -- -- -- -- -- (1) --* -- -- -- -- -- -- -- --* -- -- -- -- -- -- -- --* -- -- -- -- (3,419) 1,774 (8,701) 107,578 3,023 1,629 (469) 2,145 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (3,887) 3,171 (10,488) 112,134 (71) 9,534 (890) 4,196 28,433 25,262 112,134 -- 201,203 191,669 39,812 35,616 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 24,546 $ 28,433 $ 101,646 $ 112,134 $ 201,132 $ 201,203 $ 38,922 $ 39,812 ============ ============ ============ ============ ============ ============ ============ ============ $ 98 $ 74 $ 112 $ 79 $ 166 $ 48 $ 85 $ 52 ============ ============ ============ ============ ============ ============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS. 237 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
NORTH CAROLINA INTERMEDIATE NORTH CAROLINA MUNICIPAL BOND MUNICIPAL BOND -------------------------------- -------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 3/31/02 3/31/01 3/31/02 3/31/01 -------------------------------------------------------------------- (IN THOUSANDS) Net investment income/(loss)......................... $ 9,047 $ 9,034 $ 1,766 $ 1,742 Net realized gain/(loss) on investments.............. 412 (693) 109 (11) Net change in unrealized appreciation/(depreciation) of investments..................................... (3,257) 7,641 (616) 1,916 -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets resulting from operations......................................... 6,202 15,982 1,259 3,647 Distributions to shareholders from net investment income: Primary A Shares................................... (8,353) (8,383) (1,030) (942) Investor A Shares.................................. (481) (457) (145) (96) Investor B Shares.................................. (199) (191) (584) (702) Investor C Shares.................................. (8) (3) (6) (2) Distributions to shareholders from net realized gains on investments: Primary A Shares................................... -- -- -- -- Investor A Shares.................................. -- -- -- -- Investor B Shares.................................. -- -- -- -- Investor C Shares.................................. -- -- -- -- Net increase/(decrease) in net assets from Fund share transactions....................................... 2,338 (1,784) 208 324 -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets................ (501) 5,164 (298) 2,229 NET ASSETS: Beginning of period.................................. 195,798 190,634 41,805 39,576 -------------- -------------- -------------- -------------- End of period........................................ $ 195,297 $ 195,798 $ 41,507 $ 41,805 ============== ============== ============== ============== Undistributed net investment income/(distributions in excess of net investment income) at end of period............................................. $ 726 $ 323 $ 97 $ 28 ============== ============== ============== ==============
--------------- * Amount represents less than $500. SEE NOTES TO FINANCIAL STATEMENTS. 238 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
SOUTH CAROLINA INTERMEDIATE SOUTH CAROLINA TENNESSEE INTERMEDIATE MUNICIPAL BOND MUNICIPAL BOND MUNICIPAL BOND ----------------------------------- ------------------------------- ------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 3/31/02 3/31/01 3/31/02 3/31/01 3/31/02 3/31/01 ------------------------------------------------------------------------------------------------------- $ 11,864 $ 11,547 $ 1,331 $ 1,682 $ 2,212 $ 2,246 306 (465) 618 (107) -- 16 (3,275) 8,838 (888) 2,101 (514) 2,065 -------------- -------------- -------------- -------------- -------------- -------------- 8,895 19,920 1,061 3,676 1,698 4,327 (10,631) (10,425) (965) (1,300) (1,801) (1,828) (814) (757) (59) (47) (360) (358) (288) (281) (291) (333) (49) (59) (122) (84) (14) (2) (2) --* -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (5,285) 4,503 (9,244) (5,351) 4,625 (1,090) -------------- -------------- -------------- -------------- -------------- -------------- (8,245) 12,876 (9,512) (3,357) 4,111 992 245,191 232,315 35,348 38,705 48,324 47,332 -------------- -------------- -------------- -------------- -------------- -------------- $ 236,946 $ 245,191 $ 25,836 $ 35,348 $ 52,435 $ 48,324 ============== ============== ============== ============== ============== ============== $ 883 $ 218 $ 95 $ 20 $ 21 $ 11 ============== ============== ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 239 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
TENNESSEE TEXAS INTERMEDIATE MUNICIPAL BOND MUNICIPAL BOND -------------------------------- -------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 3/31/02 3/31/01 3/31/02 3/31/01 -------------------------------------------------------------------- (IN THOUSANDS) Net investment income/(loss)......................... $ 421 $ 462 $ 13,836 $ 15,095 Net realized gain/(loss) on investments.............. 41 (3) 698 (912) Net change in unrealized appreciation/(depreciation) of investments..................................... (169) 555 (4,954) 10,896 -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets resulting from operations......................................... 293 1,014 9,580 25,079 Distributions to shareholders from net investment income: Primary A Shares................................... (209) (232) (13,499) (14,818) Investor A Shares.................................. (82) (75) (252) (195) Investor B Shares.................................. (121) (149) (81) (82) Investor C Shares.................................. (9) (6) --* --* Distributions to shareholders from net realized gains on investments: Primary A Shares................................... -- -- -- -- Investor A Shares.................................. -- -- -- -- Investor B Shares.................................. -- -- -- -- Investor C Shares.................................. -- -- -- -- Net increase/(decrease) in net assets from Fund share transactions....................................... (1,278) (852) (16,417) (50,947) -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets................ (1,406) (300) (20,669) (40,963) NET ASSETS: Beginning of period.................................. 10,315 10,615 293,443 334,406 -------------- -------------- -------------- -------------- End of period........................................ $ 8,909 $ 10,315 $ 272,774 $ 293,443 ============== ============== ============== ============== Undistributed net investment income/(distributions in excess of net investment income) at end of period............................................. $ 36 $ 29 $ 447 $ 299 ============== ============== ============== ==============
--------------- * Amount represents less than $500. SEE NOTES TO FINANCIAL STATEMENTS. 240 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
TEXAS VIRGINIA INTERMEDIATE VIRGINIA MUNICIPAL BOND MUNICIPAL BOND MUNICIPAL BOND ----------------------------------- ------------------------------- ------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 3/31/02 3/31/01 3/31/02 3/31/01 3/31/02 3/31/01 ------------------------------------------------------------------------------------------------------- $ 600 $ 627 $ 13,636 $ 13,895 $ 1,576 $ 1,370 88 92 1,164 (33) 150 (201) (290) 600 (4,717) 11,747 (581) 1,357 -------------- -------------- -------------- -------------- -------------- -------------- 398 1,319 10,083 25,609 1,145 2,526 (392) (393) (11,366) (11,539) (1,120) (907) (19) (16) (1,914) (1,999) (59) (31) (188) (215) (318) (330) (394) (432) (1) (3) (27) (27) (2) --* -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (1,302) (736) (9,537) 9,165 2,087 2,614 -------------- -------------- -------------- -------------- -------------- -------------- (1,504) (44) (13,079) 20,879 1,657 3,770 13,810 13,854 306,072 285,193 31,349 27,579 -------------- -------------- -------------- -------------- -------------- -------------- $ 12,306 $ 13,810 $ 292,993 $ 306,072 $ 33,006 $ 31,349 ============== ============== ============== ============== ============== ============== $ 52 $ 39 $ 639 $ 138 $ 88 $ 71 ============== ============== ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 241 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY
SHORT-TERM MUNICIPAL INCOME YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 32,832 $334,597 4,691 $ 47,007 Issued as reinvestment of dividends....................... 23 237 4 39 Redeemed.................................................. (7,243) (73,714) (3,834) (38,338) ------ -------- ------ -------- Net increase/(decrease)................................... 25,612 $261,120 861 $ 8,708 ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 11,719 $119,451 646 $ 6,508 Issued as reinvestment of dividends....................... 165 1,674 61 607 Redeemed.................................................. (1,849) (18,808) (633) (6,315) ------ -------- ------ -------- Net increase/(decrease)................................... 10,035 $102,317 74 $ 800 ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... -- $ -- -- $ -- Issued as reinvestment of dividends....................... 6 62 17 171 Redeemed.................................................. (162) (1,645) (383) (3,826) ------ -------- ------ -------- Net increase/(decrease)................................... (156) $ (1,583) (366) $ (3,655) ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 4,160 $ 42,433 128 $ 1,275 Issued as reinvestment of dividends....................... 17 175 4 42 Redeemed.................................................. (189) (1,917) (155) (1,541) ------ -------- ------ -------- Net increase/(decrease)................................... 3,988 $ 40,691 (23) $ (224) ====== ======== ====== ======== Total net increase/(decrease)............................. 39,479 $402,545 546 5,629 ====== ======== ====== ========
SEE NOTES TO FINANCIAL STATEMENTS. 242 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
INTERMEDIATE MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 -------------------- -------------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 19,140 $ 194,388 20,448 $ 202,560 Issued in exchange for: Assets of Boatmen's Trust Company Intermediate Tax-Exempt Bond Fund (Note 8)......................... -- -- 20,653 204,013 Assets of Bank IV Kansas U.S. Tax Exempt Bond Fund (Note 8).................................................... -- -- 2,481 24,319 Assets of BCA High Grade Tax Exempt Bond Fund (Note 8).................................................... -- -- 12,824 124,078 Issued as reinvestment of dividends....................... 85 862 86 853 Redeemed.................................................. (20,960) (212,768) (25,614) (253,151) ------- --------- ------- --------- Net increase/(decrease)................................... (1,735) $ (17,518) 30,878 $ 302,672 ======= ========= ======= ========= INVESTOR A SHARES: Sold...................................................... 2,076 $ 21,030 872 $ 8,704 Issued as reinvestment of dividends....................... 40 423 32 318 Redeemed.................................................. (1,270) (12,907) (885) (8,755) ------- --------- ------- --------- Net increase/(decrease)................................... 846 $ 8,546 19 $ 267 ======= ========= ======= ========= INVESTOR B SHARES: Sold...................................................... 215 $ 2,189 3 $ 30 Issued as reinvestment of dividends....................... 5 53 4 44 Redeemed.................................................. (61) (622) (34) (336) ------- --------- ------- --------- Net increase/(decrease)................................... 159 $ 1,620 (27) $ (262) ======= ========= ======= ========= INVESTOR C SHARES: Sold...................................................... 261 $ 2,668 2 $ 21 Issued as reinvestment of dividends....................... 3 32 2 17 Redeemed.................................................. (116) (1,170) (7) (70) ------- --------- ------- --------- Net increase/(decrease)................................... 148 $ 1,530 (3) $ (32) ======= ========= ======= ========= Total net increase/(decrease)............................. (582) $ (5,822) 30,867 $ 302,645 ======= ========= ======= =========
SEE NOTES TO FINANCIAL STATEMENTS. 243 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
MUNICIPAL INCOME YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 -------------------- -------------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 15,205 $ 167,595 14,464 $ 157,002 Issued in exchange for assets of Boatmen's Trust Company Tax Exempt Bond Fund (Note 8)........................... -- -- 30,910 319,789 Issued as reinvestment of dividends....................... 38 424 34 368 Redeemed.................................................. (20,093) (221,779) (17,964) (194,301) ------- --------- ------- --------- Net increase/(decrease)................................... (4,850) $ (53,760) 27,444 $ 282,858 ======= ========= ======= ========= INVESTOR A SHARES: Sold...................................................... 7,190 $ 79,183 5,113 $ 55,544 Issued as reinvestment of dividends....................... 126 1,392 108 1,169 Redeemed.................................................. (6,095) (67,366) (5,119) (55,775) ------- --------- ------- --------- Net increase/(decrease)................................... 1,221 $ 13,209 102 $ 938 ======= ========= ======= ========= INVESTOR B SHARES: Sold...................................................... 177 $ 1,955 59 $ 645 Issued as reinvestment of dividends....................... 18 197 17 186 Redeemed.................................................. (156) (1,721) (97) (1,058) ------- --------- ------- --------- Net increase/(decrease)................................... 39 $ 431 (21) $ (227) ======= ========= ======= ========= INVESTOR C SHARES: Sold...................................................... 20 $ 220 9 $ 95 Issued as reinvestment of dividends....................... 4 42 4 43 Redeemed.................................................. (22) (249) (27) (286) ------- --------- ------- --------- Net increase/(decrease)................................... 2 $ 13 (14) $ (148) ======= ========= ======= ========= Total net increase/(decrease)............................. (3,588) $ (40,107) 27,511 $ 283,421 ======= ========= ======= =========
SEE NOTES TO FINANCIAL STATEMENTS. 244 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
CALIFORNIA MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 4,210 $ 31,174 3,382 $ 24,631 Issued as reinvestment of dividends....................... 18 132 17 125 Redeemed.................................................. (1,287) (9,526) (1,434) (10,511) ------ -------- ------ -------- Net increase/(decrease)................................... 2,941 $ 21,780 1,965 $ 14,245 ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 8,737 $ 65,024 3,156 $ 23,416 Issued as reinvestment of dividends....................... 540 3,997 590 4,331 Redeemed.................................................. (9,303) (69,166) (5,829) (42,720) ------ -------- ------ -------- Net increase/(decrease)................................... (26) $ (145) (2,083) $(14,973) ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... 360 $ 2,668 244 $ 1,793 Issued as reinvestment of dividends....................... 24 179 19 141 Redeemed.................................................. (129) (956) (84) (620) ------ -------- ------ -------- Net increase/(decrease)................................... 255 $ 1,891 179 $ 1,314 ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 380 $ 2,810 123 $ 901 Issued as reinvestment of dividends....................... 9 67 2 14 Redeemed.................................................. (100) (735) (1) (4) ------ -------- ------ -------- Net increase/(decrease)................................... 289 $ 2,142 124 $ 911 ====== ======== ====== ======== Total net increase/(decrease)............................. 3,459 $ 25,668 185 $ 1,497 ====== ======== ====== ========
SEE NOTES TO FINANCIAL STATEMENTS. 245 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
FLORIDA INTERMEDIATE MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 21, 2002 MARCH 21, 2001 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 4,172 $ 44,624 6,568 $ 69,039 Issued as reinvestment of dividends....................... 1 10 5 45 Redeemed.................................................. (6,566) (70,243) (4,187) (43,648) ------ -------- ------ -------- Net increase/(decrease)................................... (2,393) $(25,609) 2,386 $ 25,436 ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 768 $ 8,208 302 $ 3,169 Issued as reinvestment of dividends....................... 13 136 24 251 Redeemed.................................................. (470) (5,007) (767) (8,021) ------ -------- ------ -------- Net increase/(decrease)................................... 311 $ 3,337 (441) $ (4,601) ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... 171 $ 1,829 45 $ 481 Issued as reinvestment of dividends....................... 12 132 11 108 Redeemed.................................................. (57) (610) (90) (941) ------ -------- ------ -------- Net increase/(decrease)................................... 126 $ 1,351 (34) $ (352) ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 276 $ 2,961 5 $ 52 Issued as reinvestment of dividends....................... 1 11 --* 5 Redeemed.................................................. (93) (1,004) (1) (6) ------ -------- ------ -------- Net increase/(decrease)................................... 184 $ 1,968 4 $ 51 ====== ======== ====== ======== Total net increase/(decrease)............................. (1,772) $(18,953) 1,915 $ 20,534 ====== ======== ====== ========
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 246 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
FLORIDA MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 1,052 $ 10,469 2,650 $ 25,710 Issued as reinvestment of dividends....................... 10 99 11 110 Redeemed.................................................. (2,636) (26,255) (1,739) (16,785) ------ -------- ------ -------- Net increase/(decrease)................................... (1,574) $(15,687) 922 $ 9,035 ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 848 $ 8,447 162 $ 1,571 Issued as reinvestment of dividends....................... 170 1,700 185 1,800 Redeemed.................................................. (1,084) (10,826) (1,024) (9,917) ------ -------- ------ -------- Net increase/(decrease)................................... (66) $ (679) (677) $ (6,546) ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... 179 $ 1,789 85 $ 826 Issued as reinvestment of dividends....................... 22 216 22 212 Redeemed.................................................. (222) (2,217) (367) (3,549) ------ -------- ------ -------- Net increase/(decrease)................................... (21) $ (212) (260) $ (2,511) ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 23 $ 231 5 $ 48 Issued as reinvestment of dividends....................... --* 1 --* 1 Redeemed.................................................. (1) (13) (1) (10) ------ -------- ------ -------- Net increase/(decrease)................................... 22 $ 219 4 $ 39 ====== ======== ====== ======== Total net increase/(decrease)............................. (1,639) $(16,359) (11) $ 17 ====== ======== ====== ========
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 247 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
GEORGIA INTERMEDIATE MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 2,350 $ 25,409 2,378 $ 25,106 Issued as reinvestment of dividends....................... 1 14 1 12 Redeemed.................................................. (1,596) (17,293) (2,246) (23,542) ------ -------- ------ -------- Net increase/(decrease)................................... 755 $ 8,130 133 $ 1,576 ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 539 $ 5,844 156 $ 1,665 Issued as reinvestment of dividends....................... 40 432 42 441 Redeemed.................................................. (479) (5,186) (372) (3,917) ------ -------- ------ -------- Net increase/(decrease)................................... 100 $ 1,090 (174) $ (1,811) ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... 87 $ 937 14 $ 153 Issued as reinvestment of dividends....................... 8 86 9 87 Redeemed.................................................. (78) (843) (51) (536) ------ -------- ------ -------- Net increase/(decrease)................................... 17 $ 180 (28) $ (296) ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 67 $ 733 --* $ --* Issued as reinvestment of dividends....................... 3 33 3 28 Redeemed.................................................. (11) (114) (5) (50) ------ -------- ------ -------- Net increase/(decrease)................................... 59 $ 652 (2) $ (22) ====== ======== ====== ======== Total net increase/(decrease)............................. 931 $ 10,052 (71) $ (553) ====== ======== ====== ========
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 248 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
GEORGIA MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ----------------- ----------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 156 $ 1,567 638 $ 6,134 Issued as reinvestment of dividends....................... --* --* --* --* Redeemed.................................................. (295) (2,948) (270) (2,608) ---- ------- ---- ------- Net increase/(decrease)................................... (139) $(1,381) 368 $ 3,526 ==== ======= ==== ======= INVESTOR A SHARES: Sold...................................................... 224 $ 2,223 67 $ 662 Issued as reinvestment of dividends....................... 7 72 8 81 Redeemed.................................................. (292) (2,893) (91) (896) ---- ------- ---- ------- Net increase/(decrease)................................... (61) $ (598) (16) $ (153) ==== ======= ==== ======= INVESTOR B SHARES: Sold...................................................... 25 $ 255 24 $ 227 Issued as reinvestment of dividends....................... 18 189 21 207 Redeemed.................................................. (209) (2,090) (208) (2,028) ---- ------- ---- ------- Net increase/(decrease)................................... (166) $(1,646) (163) $(1,594) ==== ======= ==== ======= INVESTOR C SHARES: Sold...................................................... 24 $ 246 --* $ --* Issued as reinvestment of dividends....................... --* 1 --* 1 Redeemed.................................................. (4) (41) (1) (6) ---- ------- ---- ------- Net increase/(decrease)................................... 20 $ 206 (1) $ (5) ==== ======= ==== ======= Total net increase/(decrease)............................. (346) $(3,419) 188 $ 1,774 ==== ======= ==== =======
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 249 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
KANSAS MUNICIPAL INCOME YEAR ENDED PERIOD ENDED MARCH 31, 2002 MARCH 31, 2001 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES:+ Sold...................................................... 681 $ 7,028 12,800 $ 10,035 Issued in exchange for assets of Bank of America Common Trust Kansas Tax Exempt Fund (Note 8)................... 121 118,623 Issued as reinvestment of dividends....................... 16 160 13 130 Redeemed.................................................. (1,766) (18,158) (2,166) (22,067) ------ -------- ------ -------- Net increase/(decrease)................................... (1,069) $(10,970) 10,768 $106,721 ====== ======== ====== ======== INVESTOR A SHARES:+ Sold...................................................... 392 $ 4,029 220 $ 2,210 Issued as reinvestment of dividends....................... 4 47 2 22 Redeemed.................................................. (152) (1,574) (160) (1,630) ------ -------- ------ -------- Net increase/(decrease)................................... 244 $ 2,502 62 $ 602 ====== ======== ====== ======== INVESTOR B SHARES:+ Sold...................................................... 2 $ 25 25 $ 250 Issued as reinvestment of dividends....................... 1 6 1 5 Redeemed.................................................. (26) (264) -- --* ------ -------- ------ -------- Net increase/(decrease)................................... (23) $ (233) 26 $ 255 ====== ======== ====== ======== Total net increase/(decrease)............................. (848) $ (8,701) 10,856 $107,578 ====== ======== ====== ========
--------------- + Kansas Municipal Income Primary A, Investor A and Investor B Shares commenced operations on July 17, 2000, August 14, 2000 and August 29, 2000, respectively. *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 250 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
MARYLAND INTERMEDIATE MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 3,415 $ 37,615 2,696 $ 28,779 Issued as reinvestment of dividends....................... 14 153 9 96 Redeemed.................................................. (3,710) (40,787) (2,495) (26,799) ------ -------- ------ -------- Net increase/(decrease)................................... (281) $ (3,019) 210 $ 2,076 ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 519 $ 5,699 252 $ 2,681 Issued as reinvestment of dividends....................... 50 552 52 559 Redeemed.................................................. (242) (2,675) (271) (2,892) ------ -------- ------ -------- Net increase/(decrease)................................... 327 $ 3,576 33 $ 348 ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... 143 $ 1,570 14 $ 152 Issued as reinvestment of dividends....................... 13 150 15 162 Redeemed.................................................. (39) (432) (99) (1,063) ------ -------- ------ -------- Net increase/(decrease)................................... 117 $ 1,288 (70) $ (749) ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 109 $ 1,199 10 $ 113 Issued as reinvestment of dividends....................... 2 23 1 9 Redeemed.................................................. (4) (44) (15) (168) ------ -------- ------ -------- Net increase/(decrease)................................... 107 $ 1,178 (4) $ (46) ====== ======== ====== ======== Total net increase/(decrease)............................. 270 $ 3,023 169 $ 1,629 ====== ======== ====== ========
SEE NOTES TO FINANCIAL STATEMENTS. 251 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
MARYLAND MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ----------------- ----------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 488 $ 4,932 508 $ 4,964 Issued as reinvestment of dividends....................... --* 4 --* 2 Redeemed.................................................. (685) (6,910) (365) (3,531) ---- ------- ---- ------- Net increase/(decrease)................................... (197) $(1,974) 143 $ 1,435 ==== ======= ==== ======= INVESTOR A SHARES: Sold...................................................... 155 $ 1,572 90 $ 884 Issued as reinvestment of dividends....................... 7 75 8 75 Redeemed.................................................. (115) (1,183) (19) (184) ---- ------- ---- ------- Net increase/(decrease)................................... 47 $ 464 79 $ 775 ==== ======= ==== ======= INVESTOR B SHARES: Sold...................................................... 209 $ 2,123 200 $ 1,957 Issued as reinvestment of dividends....................... 44 441 45 443 Redeemed.................................................. (163) (1,646) (257) (2,513) ---- ------- ---- ------- Net increase/(decrease)................................... 90 $ 918 (12) $ (113) ==== ======= ==== ======= INVESTOR C SHARES: Sold...................................................... 11 $ 113 4 $ 40 Issued as reinvestment of dividends....................... 1 10 1 8 Redeemed.................................................. --* --* -- --* ---- ------- ---- ------- Net increase/(decrease)................................... 12 $ 123 5 $ 48 ==== ======= ==== ======= Total net increase/(decrease)............................. (48) $ (469) 215 $ 2,145 ==== ======= ==== =======
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 252 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 2,618 $ 27,760 2,754 $ 28,334 Issued as reinvestment of dividends....................... 13 137 17 173 Redeemed.................................................. (2,720) (28,762) (2,951) (30,411) ------ -------- ------ -------- Net increase/(decrease)................................... (89) $ (865) (180) $ (1,904) ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 273 $ 2,873 239 $ 2,454 Issued as reinvestment of dividends....................... 28 295 30 308 Redeemed.................................................. (129) (1,370) (241) (2,499) ------ -------- ------ -------- Net increase/(decrease)................................... 172 $ 1,798 28 $ 263 ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... 148 $ 1,567 14 $ 151 Issued as reinvestment of dividends....................... 15 158 14 144 Redeemed.................................................. (93) (985) (41) (427) ------ -------- ------ -------- Net increase/(decrease)................................... 70 $ 740 (13) $ (132) ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 64 $ 680 2 $ 15 Issued as reinvestment of dividends....................... --* 5 --* 3 Redeemed.................................................. (2) (20) (3) (29) ------ -------- ------ -------- Net increase/(decrease)................................... 62 $ 665 (1) $ (11) ====== ======== ====== ======== Total net increase/(decrease)............................. 215 $ 2,338 (166) $ (1,784) ====== ======== ====== ========
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 253 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
NORTH CAROLINA MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ----------------- ----------------- SHARES DOLLARS SHARES DOLLARS -------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 423 $ 4,217 685 $ 6,614 Issued as reinvestment of dividends....................... --* --* --* --* Redeemed.................................................. (370) (3,690) (355) (3,397) ---- ------- ---- ------- Net increase/(decrease)................................... 53 $ 527 330 $ 3,217 ==== ======= ==== ======= INVESTOR A SHARES: Sold...................................................... 162 $ 1,620 131 $ 1,274 Issued as reinvestment of dividends....................... 12 124 8 75 Redeemed.................................................. (41) (415) (21) (203) ---- ------- ---- ------- Net increase/(decrease)................................... 133 $ 1,329 118 $ 1,146 ==== ======= ==== ======= INVESTOR B SHARES: Sold...................................................... 89 $ 884 89 $ 874 Issued as reinvestment of dividends....................... 40 399 51 494 Redeemed.................................................. (298) (2,980) (564) (5,438) ---- ------- ---- ------- Net increase/(decrease)................................... (169) $(1,697) (424) $(4,070) ==== ======= ==== ======= INVESTOR C SHARES: Sold...................................................... 10 $ 101 3 $ 29 Issued as reinvestment of dividends....................... 1 5 --* 2 Redeemed.................................................. (6) (57) -- --* ---- ------- ---- ------- Net increase/(decrease)................................... 5 $ 49 3 $ 31 ==== ======= ==== ======= Total net increase/(decrease)............................. 22 $ 208 27 $ 324 ==== ======= ==== =======
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 254 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
SOUTH CAROLINA INTERMEDIATE MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 3,137 $ 33,350 3,272 $ 33,974 Issued as reinvestment of dividends....................... 7 82 8 80 Redeemed.................................................. (3,825) (40,691) (2,787) (28,918) ------ -------- ------ -------- Net increase/(decrease)................................... (681) $ (7,259) 493 $ 5,136 ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 363 $ 3,856 423 $ 4,461 Issued as reinvestment of dividends....................... 29 310 26 270 Redeemed.................................................. (430) (4,581) (412) (4,234) ------ -------- ------ -------- Net increase/(decrease)................................... (38) $ (415) 37 $ 497 ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... 109 $ 1,161 15 $ 160 Issued as reinvestment of dividends....................... 16 172 16 161 Redeemed.................................................. (49) (521) (77) (798) ------ -------- ------ -------- Net increase/(decrease)................................... 76 $ 812 (46) $ (477) ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 201 $ 2,126 71 $ 753 Issued as reinvestment of dividends....................... 6 69 6 61 Redeemed.................................................. (58) (618) (141) (1,467) ------ -------- ------ -------- Net increase/(decrease)................................... 149 $ 1,577 (64) $ (653) ====== ======== ====== ======== Total net increase/(decrease)............................. (494) $ (5,285) 420 $ 4,503 ====== ======== ====== ========
SEE NOTES TO FINANCIAL STATEMENTS. 255 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
SOUTH CAROLINA MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 26 $ 268 2,356 $ 23,820 Issued as reinvestment of dividends....................... --* --* 1 8 Redeemed.................................................. (886) (9,121) (2,794) (28,185) ------- ------- ------ -------- Net increase/(decrease)................................... (860) $(8,853) (437) $ (4,357) ======= ======= ====== ======== INVESTOR A SHARES: Sold...................................................... 73 $ 750 66 $ 674 Issued as reinvestment of dividends....................... 4 39 4 36 Redeemed.................................................. (79) (818) (60) (608) ------- ------- ------ -------- Net increase/(decrease)................................... (2) $ (29) 10 $ 102 ======= ======= ====== ======== INVESTOR B SHARES: Sold...................................................... 42 $ 431 31 $ 306 Issued as reinvestment of dividends....................... 19 193 22 217 Redeemed.................................................. (156) (1,615) (164) (1,621) ------- ------- ------ -------- Net increase/(decrease)................................... (95) $ (991) (111) $ (1,098) ======= ======= ====== ======== INVESTOR C SHARES: Sold...................................................... 59 $ 618 -- $ -- Issued as reinvestment of dividends....................... 1 11 --* 2 Redeemed.................................................. -- --* -- -- ------- ------- ------ -------- Net increase/(decrease)................................... 60 $ 629 -- $ 2 ======= ======= ====== ======== Total net increase/(decrease)............................. (897) $(9,244) (538) $ (5,351) ======= ======= ====== ========
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 256 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
TENNESSEE INTERMEDIATE MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ----------------- ----------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 759 $ 7,881 462 $ 4,633 Issued as reinvestment of dividends....................... 9 94 10 105 Redeemed.................................................. (548) (5,707) (519) (5,222) ---- ------- ---- ------- Net increase/(decrease)................................... 220 $ 2,268 (47) $ (484) ==== ======= ==== ======= INVESTOR A SHARES: Sold...................................................... 288 $ 2,991 49 $ 486 Issued as reinvestment of dividends....................... 28 292 30 307 Redeemed.................................................. (113) (1,169) (99) (1,000) ---- ------- ---- ------- Net increase/(decrease)................................... 203 $ 2,114 (20) $ (207) ==== ======= ==== ======= INVESTOR B SHARES: Sold...................................................... 10 $ 106 1 $ 5 Issued as reinvestment of dividends....................... 3 35 4 42 Redeemed.................................................. (21) (223) (45) (446) ---- ------- ---- ------- Net increase/(decrease)................................... (8) $ (82) (40) $ (399) ==== ======= ==== ======= INVESTOR C SHARES: Sold...................................................... 31 $ 323 -- $ -- Issued as reinvestment of dividends....................... --* 2 --* --* Redeemed.................................................. -- --* -- --* ---- ------- ---- ------- Net increase/(decrease)................................... 31 $ 325 -- $ -- ==== ======= ==== ======= Total net increase/(decrease)............................. 446 $ 4,625 (107) $(1,090) ==== ======= ==== =======
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 257 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
TENNESSEE MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ----------------- ----------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 22 $ 225 91 $ 896 Issued as reinvestment of dividends....................... --* --* --* --* Redeemed.................................................. (73) (755) (158) (1,530) ---- ------- ---- ------- Net increase/(decrease)................................... (51) $ (530) (67) $ (634) ==== ======= ==== ======= INVESTOR A SHARES: Sold...................................................... 31 $ 322 74 $ 724 Issued as reinvestment of dividends....................... 1 15 2 17 Redeemed.................................................. (41) (425) (50) (480) ---- ------- ---- ------- Net increase/(decrease)................................... (9) $ (88) 26 $ 261 ==== ======= ==== ======= INVESTOR B SHARES: Sold...................................................... 11 $ 114 --* $ 2 Issued as reinvestment of dividends....................... 8 85 12 116 Redeemed.................................................. (95) (976) (62) (609) ---- ------- ---- ------- Net increase/(decrease)................................... (76) $ (777) (50) $ (491) ==== ======= ==== ======= INVESTOR C SHARES: Sold...................................................... 10 $ 111 1 $ 6 Issued as reinvestment of dividends....................... 1 6 1 6 Redeemed.................................................. --* --* -- --* ---- ------- ---- ------- Net increase/(decrease)................................... 11 $ 117 2 $ 12 ==== ======= ==== ======= Total net increase/(decrease)............................. (125) $(1,278) (89) $ (852) ==== ======= ==== =======
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 258 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
TEXAS INTERMEDIATE MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 2,407 $ 24,835 2,653 $ 26,811 Issued as reinvestment of dividends....................... 2 23 2 16 Redeemed.................................................. (4,044) (41,784) (7,563) (75,991) ------ -------- ------ -------- Net increase/(decrease)................................... (1,635) $(16,926) (4,908) $(49,164) ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 472 $ 4,870 389 $ 3,924 Issued as reinvestment of dividends....................... 9 98 7 75 Redeemed.................................................. (429) (4,422) (584) (5,851) ------ -------- ------ -------- Net increase/(decrease)................................... 52 $ 546 (188) $ (1,852) ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... 2 $ 26 15 $ 159 Issued as reinvestment of dividends....................... 6 59 6 60 Redeemed.................................................. (17) (177) (14) (150) ------ -------- ------ -------- Net increase/(decrease)................................... (9) $ (92) 7 $ 69 ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 5 $ 55 -- $ -- Issued as reinvestment of dividends....................... --* --* --* --* Redeemed.................................................. -- --* -- --* ------ -------- ------ -------- Net increase/(decrease)................................... 5 $ 55 -- $ -- ====== ======== ====== ======== Total net increase/(decrease)............................. (1,587) $(16,417) (5,089) $(50,947) ====== ======== ====== ========
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 259 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
TEXAS MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ----------------- ----------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 111 $ 1,103 140 $ 1,364 Issued as reinvestment of dividends....................... --* --* --* --* Redeemed.................................................. (185) (1,859) (144) (1,397) ---- ------- ---- ------- Net increase/(decrease)................................... (74) $ (756) (4) $ (33) ==== ======= ==== ======= INVESTOR A SHARES: Sold...................................................... 21 $ 207 --* $ --* Issued as reinvestment of dividends....................... --* 3 --* 2 Redeemed.................................................. (23) (232) (1) (12) ---- ------- ---- ------- Net increase/(decrease)................................... (2) $ (22) (1) $ (10) ==== ======= ==== ======= INVESTOR B SHARES: Sold...................................................... 8 $ 79 14 $ 133 Issued as reinvestment of dividends....................... 10 99 12 115 Redeemed.................................................. (63) (633) (97) (944) ---- ------- ---- ------- Net increase/(decrease)................................... (45) $ (455) (71) $ (696) ==== ======= ==== ======= INVESTOR C SHARES: Sold...................................................... 2 $ 17 -- $ -- Issued as reinvestment of dividends....................... --* 1 --* 4 Redeemed.................................................. (9) (87) --* (1) ---- ------- ---- ------- Net increase/(decrease)................................... (7) $ (69) -- $ 3 ==== ======= ==== ======= Total net increase/(decrease)............................. (128) $(1,302) (76) $ (736) ==== ======= ==== =======
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 260 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
VIRGINIA INTERMEDIATE MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 3,889 $ 42,475 6,077 $ 64,610 Issued as reinvestment of dividends....................... 9 98 8 84 Redeemed.................................................. (5,038) (54,978) (4,706) (50,317) ------ -------- ------ -------- Net increase/(decrease)................................... (1,140) $(12,405) 1,379 $ 14,377 ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 577 $ 6,308 141 $ 1,487 Issued as reinvestment of dividends....................... 118 1,293 121 1,289 Redeemed.................................................. (460) (5,031) (705) (7,465) ------ -------- ------ -------- Net increase/(decrease)................................... 235 $ 2,570 (443) $ (4,689) ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... 73 $ 799 17 $ 186 Issued as reinvestment of dividends....................... 20 216 21 225 Redeemed.................................................. (72) (780) (91) (966) ------ -------- ------ -------- Net increase/(decrease)................................... 21 $ 235 (53) $ (555) ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 21 $ 229 15 $ 159 Issued as reinvestment of dividends....................... 2 22 2 24 Redeemed.................................................. (17) (188) (14) (151) ------ -------- ------ -------- Net increase/(decrease)................................... 6 $ 63 3 $ 32 ====== ======== ====== ======== Total net increase/(decrease)............................. (878) $ (9,537) 886 $ 9,165 ====== ======== ====== ========
SEE NOTES TO FINANCIAL STATEMENTS. 261 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
VIRGINIA MUNICIPAL BOND YEAR ENDED YEAR ENDED MARCH 31, 2002 MARCH 31, 2001 ----------------- ----------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 710 $ 6,949 581 $ 5,576 Issued as reinvestment of dividends....................... -- -- -- -- Redeemed.................................................. (397) (3,907) (310) (2,956) ---- ------- ---- ------- Net increase/(decrease)................................... 313 $ 3,042 271 $ 2,620 ==== ======= ==== ======= INVESTOR A SHARES: Sold...................................................... 90 $ 889 58 $ 551 Issued as reinvestment of dividends....................... 4 44 2 17 Redeemed.................................................. (44) (432) (18) (170) ---- ------- ---- ------- Net increase/(decrease)................................... 50 $ 501 42 $ 398 ==== ======= ==== ======= INVESTOR B SHARES: Sold...................................................... 34 $ 330 53 $ 511 Issued as reinvestment of dividends....................... 26 259 29 278 Redeemed.................................................. (207) (2,047) (130) (1,243) ---- ------- ---- ------- Net increase/(decrease)................................... (147) $(1,458) (48) $ (454) ==== ======= ==== ======= INVESTOR C SHARES: Sold...................................................... --* $ 1 5 $ 50 Issued as reinvestment of dividends....................... --* 2 --* --* Redeemed.................................................. --* (1) -- --* ---- ------- ---- ------- Net increase/(decrease)................................... -- $ 2 5 $ 50 ==== ======= ==== ======= Total net increase/(decrease)............................. 216 $ 2,087 270 $ 2,614 ==== ======= ==== =======
--------------- *Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 262 [This page intentionally left blank] 263 NATIONS FUNDS FINANCIAL HIGHLIGHTS For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- SHORT-TERM MUNICIPAL INCOME PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.14 $0.34 $ 0.01 $0.35 $(0.36) Year ended 3/31/2001#..................... 9.94 0.44 0.20 0.64 (0.44) Year ended 3/31/2000#..................... 10.10 0.41 (0.16) 0.25 (0.41) Year ended 3/31/1999#..................... 10.05 0.41 0.05 0.46 (0.41) Year ended 3/31/1998...................... 9.95 0.42 0.10 0.52 (0.42) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.14 $0.30 $ 0.03 $0.33 $(0.34) Year ended 3/31/2001#..................... 9.94 0.41 0.21 0.62 (0.42) Year ended 3/31/2000#..................... 10.10 0.39 (0.16) 0.23 (0.39) Year ended 3/31/1999#..................... 10.05 0.39 0.05 0.44 (0.39) Year ended 3/31/1998...................... 9.95 0.40 0.10 0.50 (0.40) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.14 $0.27 $(0.02) $0.25 $(0.26) Year ended 3/31/2001#..................... 9.94 0.34 0.20 0.54 (0.34) Year ended 3/31/2000#..................... 10.10 0.36 (0.16) 0.20 (0.36) Year ended 3/31/1999#..................... 10.05 0.38 0.05 0.43 (0.38) Year ended 3/31/1998...................... 9.95 0.39 0.10 0.49 (0.39) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.14 $0.19 $ 0.06 $0.25 $(0.26) Year ended 3/31/2001#..................... 9.94 0.34 0.20 0.54 (0.34) Year ended 3/31/2000#..................... 10.10 0.32 (0.16) 0.16 (0.32) Year ended 3/31/1999#..................... 10.05 0.40 0.02 0.42 (0.37) Year ended 3/31/1998...................... 9.95 0.39 0.10 0.49 (0.39)
--------------- * Effective April 1, 2001, the Short-Term Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.33% to 3.37%. Investor A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.08% to 3.12%. Investor B Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 2.33% to 2.37%. Investor C Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 2.33% to 2.37%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 264 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS- RATIO OF RATIO OF NET RATIO OF NET ASSETS OPERATING INVESTMENT OPERATING NET ASSET END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO VALUE TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE END OF PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS ---------------------------------------------------------------------------------------------------------- $10.13 3.54% $364,372 0.40%(a) 3.37% 12% 0.63% 10.14 6.61 105,004 0.40(a) 4.41 38 0.66 9.94 2.58 94,393 0.40(a) 4.16 90 0.77 10.10 4.71 79,002 0.40(a) 4.11 53 0.80 10.05 5.33 70,740 0.40(a) 4.17 94 0.77 $10.13 3.27% $125,262 0.65%(a) 3.12% 12% 0.88% 10.14 6.34 23,613 0.65(a) 4.16 38 0.91 9.94 2.35 22,415 0.63(a) 3.93 90 1.02 10.10 4.50 35,805 0.60(a) 3.91 53 1.05 10.05 5.12 23,580 0.60(a) 3.97 94 0.97 $10.13 2.51% $ 1,884 1.40%(a) 2.37% 12% 1.63% 10.14 5.56 3,463 1.40(a) 3.41 38 1.66 9.94 1.99 7,030 0.94(a) 3.62 90 1.77 10.10 4.34 13,931 0.75(a) 3.76 53 1.80 10.05 4.96 13,753 0.75(a) 3.82 94 1.12 $10.13 2.47% $ 41,822 1.40%(a) 2.37% 12% 1.63% 10.14 5.55 1,417 1.40(a) 3.41 38 1.66 9.94 1.57 1,616 1.40(a) 3.16 90 1.77 10.10 4.29 2,583 0.83(a) 3.68 53 1.80 10.05 4.99 1,388 0.75(a) 3.82 94 1.12
SEE NOTES TO FINANCIAL STATEMENTS. 265 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.15 $0.47 $(0.15) $ 0.32 $(0.47) Year ended 3/31/2001...................... 9.78 0.47 0.37 0.84 (0.47) Year ended 3/31/2000#..................... 10.30 0.47 (0.50) (0.03) (0.47) Year ended 3/31/1999...................... 10.30 0.47 0.07 0.54 (0.47) Year ended 3/31/1998...................... 10.01 0.48 0.33 0.81 (0.48) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.15 $0.45 $(0.16) $ 0.29 $(0.44) Year ended 3/31/2001...................... 9.78 0.46 0.36 0.82 (0.45) Year ended 3/31/2000#..................... 10.30 0.45 (0.50) (0.05) (0.45) Year ended 3/31/1999...................... 10.30 0.45 0.07 0.52 (0.45) Year ended 3/31/1998...................... 10.01 0.46 0.33 0.79 (0.46) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.15 $0.36 $(0.14) $ 0.22 $(0.37) Year ended 3/31/2001...................... 9.78 0.37 0.37 0.74 (0.37) Year ended 3/31/2000#..................... 10.30 0.38 (0.50) (0.12) (0.38) Year ended 3/31/1999...................... 10.30 0.39 0.07 0.46 (0.39) Year ended 3/31/1998...................... 10.01 0.41 0.33 0.74 (0.41) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.16 $0.35 $(0.14) $ 0.21 $(0.37) Year ended 3/31/2001...................... 9.78 0.37 0.38 0.75 (0.37) Year ended 3/31/2000#..................... 10.30 0.38 (0.50) (0.12) (0.38) Year ended 3/31/1999...................... 10.30 0.40 0.09 0.49 (0.42) Year ended 3/31/1998...................... 10.01 0.42 0.33 0.75 (0.42) DISTRIBUTIONS FROM NET REALIZED GAINS ------------- INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001...................... -- Year ended 3/31/2000#..................... (0.02) Year ended 3/31/1999...................... (0.07) Year ended 3/31/1998...................... (0.04) INVESTOR A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001...................... -- Year ended 3/31/2000#..................... (0.02) Year ended 3/31/1999...................... (0.07) Year ended 3/31/1998...................... (0.04) INVESTOR B SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001...................... -- Year ended 3/31/2000#..................... (0.02) Year ended 3/31/1999...................... (0.07) Year ended 3/31/1998...................... (0.04) INVESTOR C SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001...................... -- Year ended 3/31/2000#..................... (0.02) Year ended 3/31/1999...................... (0.07) Year ended 3/31/1998...................... (0.04)
--------------- * Effective April 1, 2001, the Intermediate Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.53% to 4.61%. Investor A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.28% to 4.36%. Investor B Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.53% to 3.61%. Investor C Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.53% to 3.61%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 266 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS ---------------------------------------------------------------------------------------------------------------------- $(0.47) $10.00 3.17% $1,160,559 0.50%(a) 4.61% 14% 0.68% (0.47) 10.15 8.81 1,196,121 0.50(a) 4.73 17 0.68 (0.49) 9.78 (0.27) 849,966 0.50(a) 4.75 30 0.70 (0.54) 10.30 5.33 918,367 0.50(a) 4.55 40 0.68 (0.52) 10.30 8.20 867,154 0.50(a) 4.65 47 0.74 $(0.44) $10.00 2.91% $ 28,868 0.75%(a) 4.36% 14% 0.93% (0.45) 10.15 8.54 20,728 0.75(a) 4.48 17 0.93 (0.47) 9.78 (0.49) 19,782 0.73(a) 4.52 30 0.95 (0.52) 10.30 5.12 16,149 0.70(a) 4.35 40 0.93 (0.50) 10.30 7.99 6,487 0.70(a) 4.45 47 0.94 $(0.37) $10.00 2.14% $ 4,110 1.50%(a) 3.61% 14% 1.68% (0.37) 10.15 7.74 2,563 1.50(a) 3.73 17 1.68 (0.40) 9.78 (1.18) 2,733 1.42(a) 3.83 30 1.70 (0.46) 10.30 4.49 2,556 1.30(a) 3.75 40 1.68 (0.45) 10.30 7.50 2,023 1.20(a) 3.95 47 1.44 $(0.37) $10.00 2.03% $ 2,006 1.50%(a) 3.61% 14% 1.68% (0.37) 10.16 7.84 528 1.50(a) 3.73 17 1.68 (0.40) 9.78 (1.19) 539 1.50(a) 3.75 30 1.70 (0.49) 10.30 4.80 1,511 1.21(a) 3.84 40 1.68 (0.46) 10.30 7.62 1,590 1.20(a) 3.95 47 1.44
SEE NOTES TO FINANCIAL STATEMENTS. 267 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ---------------------------------------------------------------------------- MUNICIPAL INCOME PRIMARY A SHARES Year ended 3/31/2002*#.................... $11.14 $0.55 $(0.31) $0.24 $(0.55) Year ended 3/31/2001#..................... 10.69 0.56 0.45 1.01 (0.56) Year ended 3/31/2000#..................... 11.48 0.54 (0.78) (0.24) (0.54) Year ended 3/31/1999...................... 11.46 0.54 0.07 0.61 (0.54) Year ended 3/31/1998...................... 10.89 0.57 0.62 1.19 (0.57) INVESTOR A SHARES Year ended 3/31/2002*#.................... $11.14 $0.53 $(0.31) $0.22 $(0.53) Year ended 3/31/2001#..................... 10.68 0.53 0.46 0.99 (0.53) Year ended 3/31/2000#..................... 11.48 0.52 (0.79) (0.27) (0.52) Year ended 3/31/1999...................... 11.46 0.52 0.07 0.59 (0.52) Year ended 3/31/1998...................... 10.89 0.54 0.62 1.16 (0.54) INVESTOR B SHARES Year ended 3/31/2002*#.................... $11.13 $0.44 $(0.30) $0.14 $(0.44) Year ended 3/31/2001#..................... 10.69 0.45 0.44 0.89 (0.45) Year ended 3/31/2000#..................... 11.48 0.44 (0.78) (0.34) (0.44) Year ended 3/31/1999...................... 11.46 0.44 0.08 0.52 (0.45) Year ended 3/31/1998...................... 10.89 0.48 0.62 1.10 (0.48) INVESTOR C SHARES Year ended 3/31/2002*#.................... $11.14 $0.44 $(0.30) $0.14 $(0.44) Year ended 3/31/2001#..................... 10.69 0.45 0.45 0.90 (0.45) Year ended 3/31/2000#..................... 11.48 0.44 (0.78) (0.34) (0.44) Year ended 3/31/1999...................... 11.46 0.46 0.07 0.53 (0.46) Year ended 3/31/1998...................... 10.89 0.49 0.62 1.11 (0.49) DISTRIBUTIONS FROM NET REALIZED GAINS ------------- MUNICIPAL INCOME PRIMARY A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... (0.05) Year ended 3/31/1998...................... (0.05) INVESTOR A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... (0.05) Year ended 3/31/1998...................... (0.05) INVESTOR B SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... (0.05) Year ended 3/31/1998...................... (0.05) INVESTOR C SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... (0.05) Year ended 3/31/1998...................... (0.05)
--------------- *Effective April 1, 2001, the Municipal Income Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.95% to 5.01%. Investor A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.70% to 4.76%. Investor B Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.95% to 4.01%. Investor C Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.95% to 4.01%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. #Per share net investment income has been calculated using the monthly average shares method. (a) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 268 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS ------------------------------------------------------------------------------------------------------------- $(0.55) $10.83 2.21% $805,149 0.60%(a) 5.01% 13% 0.79% (0.56) 11.14 9.80 881,611 0.60(a) 5.13 18 0.79 (0.55) 10.69 (2.08) 552,650 0.60(a) 4.99 36 0.82 (0.59) 11.48 5.42 635,629 0.60(a) 4.71 11 0.80 (0.62) 11.46 11.12 456,485 0.60(a) 4.97 38 0.84 $(0.53) $10.83 1.95% $ 50,765 0.85%(a) 4.76% 13% 1.04% (0.53) 11.14 9.55 38,591 0.83(a) 4.90 18 1.04 (0.53) 10.68 (2.28) 35,937 0.83(a) 4.76 36 1.07 (0.57) 11.48 5.21 28,625 0.80(a) 4.51 11 1.05 (0.59) 11.46 10.89 19,226 0.80(a) 4.77 38 1.04 $(0.44) $10.83 1.28% $ 9,116 1.60%(a) 4.01% 13% 1.79% (0.45) 11.13 8.62 8,930 1.60(a) 4.13 18 1.79 (0.45) 10.69 (2.99) 8,795 1.53(a) 4.06 36 1.82 (0.50) 11.48 4.53 13,810 1.45(a) 3.86 11 1.80 (0.53) 11.46 10.23 15,383 1.42(a) 4.15 38 1.66 $(0.44) $10.84 1.28% $ 1,294 1.60%(a) 4.01% 13% 1.79% (0.45) 11.14 8.71 1,318 1.60(a) 4.13 18 1.79 (0.45) 10.69 (3.03) 1,418 1.60(a) 3.99 36 1.82 (0.51) 11.48 4.64 2,150 1.36(a) 3.95 11 1.80 (0.54) 11.46 10.37 2,444 1.33(a) 4.24 38 1.57
SEE NOTES TO FINANCIAL STATEMENTS. 269 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ---------------------------------------------------------------------------- CALIFORNIA MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $7.45 $0.35 $(0.14) $0.21 $(0.35) Year ended 3/31/2001#..................... 7.13 0.37 0.33 0.70 (0.36) Period ended 3/31/2000***................. 7.51 0.30 (0.36) (0.06) (0.30) INVESTOR A SHARES** Year ended 3/31/2002*#.................... $7.47 $0.33 $(0.15) $0.18 $(0.33) Year ended 3/31/2001#..................... 7.14 0.35 0.34 0.69 (0.34) Period ended 3/31/2000.................... 7.50 0.31 (0.34) (0.03) (0.31) Period ended 5/14/1999.................... 7.60 0.07 (0.10) (0.03) (0.07) Year ended 2/28/1999...................... 7.64 0.34 0.10 0.44 (0.34) Year ended 2/28/1998...................... 7.35 0.35 0.29 0.64 (0.35) Year ended 2/28/1997***................... 7.45 0.36 (0.05) 0.31 (0.36) INVESTOR B SHARES** Year ended 3/31/2002*#.................... $7.47 $0.27 $(0.14) $0.13 $(0.28) Year ended 3/31/2001#..................... 7.14 0.30 0.34 0.64 (0.29) Period ended 3/31/2000.................... 7.51 0.27 (0.35) (0.08) (0.27) Period ended 5/14/1999.................... 7.61 0.06 (0.10) (0.04) (0.06) Period ended 2/28/1999****................ 7.61 0.16 0.14 0.30 (0.16) INVESTOR C SHARES Year ended 3/31/2002*#.................... $7.44 $0.27 $(0.13) $0.14 $(0.28) Year ended 3/31/2001#..................... 7.12 0.30 0.33 0.63 (0.29) Period ended 3/31/2000****................ 7.31 0.19 (0.17) 0.02 (0.19) DISTRIBUTIONS FROM NET REALIZED GAINS ------------- CALIFORNIA MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $(0.03) Year ended 3/31/2001#..................... (0.02) Period ended 3/31/2000***................. (0.02) INVESTOR A SHARES** Year ended 3/31/2002*#.................... $(0.03) Year ended 3/31/2001#..................... (0.02) Period ended 3/31/2000.................... (0.02) Period ended 5/14/1999.................... -- Year ended 2/28/1999...................... (0.14) Year ended 2/28/1998...................... -- Year ended 2/28/1997***................... (0.05) INVESTOR B SHARES** Year ended 3/31/2002*#.................... $(0.03) Year ended 3/31/2001#..................... (0.02) Period ended 3/31/2000.................... (0.02) Period ended 5/14/1999.................... -- Period ended 2/28/1999****................ (0.14) INVESTOR C SHARES Year ended 3/31/2002*#.................... $(0.03) Year ended 3/31/2001#..................... (0.02) Period ended 3/31/2000****................ (0.02)
--------------- * Effective April 1, 2001, the California Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.69% to 4.71%. Investor A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.44% to 4.46%. Investor B Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.69% to 3.71%. Investor C Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.69% to 3.71%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. **The financial information for the fiscal periods through May 14, 1999 reflect the financial information for the Pacific Horizon California Municipal Bond Fund A and B Shares, which were reorganized into the California Municipal Bond Investor A and Investor B Shares, respectively, as of May 21, 1999. Prior to May 21, 1999, the Fund's investment adviser was Bank of America National Trust and Savings Association. Effective May 21, 1999, its investment adviser became Banc of America Advisors, LLC and its investment sub-adviser became Banc of America Capital Management, LLC. ***As of July 22, 1996, the Fund designated the existing series of shares as "A" Shares. **** California Municipal Bond Primary A, Investor B and Investor C Shares commenced operations on May 21, 1999, July 15, 1998 and July 29, 1999, respectively. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. (b)The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 270 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO AND END OF TOTAL PERIOD AVERAGE TO AVERAGE TURNOVER AVERAGE DISTRIBUTIONS PERIOD RETURN++ (000) NET ASSETS NET ASSETS RATE NET ASSETS -------------------------------------------------------------------------------------------------------------- $(0.38) $7.28 2.85% $ 57,803 0.60% 4.71% 8% 0.85% (0.38) 7.45 10.05 37,285 0.60(a) 5.04 20 0.82 (0.32) 7.13 (0.66) 21,654 0.60+(a) 4.70+ 34 0.79+ $(0.36) $7.29 2.45% $145,567 0.85% 4.46% 8% 1.10% (0.36) 7.47 9.93 149,282 0.83(a) 4.81 20 1.07 (0.33) 7.14 (0.46) 157,672 0.80+(a) 4.50+ 34 1.04+ (0.07) 7.50 (0.42) 206,000 0.93+ 4.40+ 1 0.96+ (0.48) 7.60 5.94 219,000 0.93 4.42 42 0.93 (0.35) 7.64 9.18 214,000 0.90(b) 4.74 28 1.06(b) (0.41) 7.35 4.29 221,000 0.90(b) 4.88 34 1.10(b) $(0.31) $7.29 1.68% $ 7,458 1.60% 3.71% 8% 1.85% (0.31) 7.47 9.15 5,729 1.55(a) 4.09 20 1.82 (0.29) 7.14 (1.16) 4,206 1.45+(a) 3.85+ 34 1.79+ (0.06) 7.51 (0.57) 3,000 1.66+ 3.63+ 1 1.69+ (0.30) 7.61 4.09 2,000 1.70+(b) 3.67+ 42 1.71+(b) $(0.31) $7.27 1.82% $ 3,265 1.60% 3.71% 8% 1.85% (0.31) 7.44 8.97 1,191 1.60(a) 4.04 20 1.82 (0.21) 7.12 0.30 258 1.60+(a) 3.70+ 34 1.79+
SEE NOTES TO FINANCIAL STATEMENTS. 271 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ---------------------------------------------------------------------------- FLORIDA INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.70 $0.50 $(0.15) $ 0.35 $(0.50) Year ended 3/31/2001...................... 10.34 0.50 0.37 0.87 (0.51) Year ended 3/31/2000#..................... 10.79 0.50 (0.45) 0.05 (0.50) Year ended 3/31/1999...................... 10.77 0.50 0.02 0.52 (0.50) Year ended 3/31/1998...................... 10.40 0.50 0.37 0.87 (0.50) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.69 $0.47 $(0.15) $ 0.32 $(0.47) Year ended 3/31/2001...................... 10.33 0.48 0.36 0.84 (0.48) Year ended 3/31/2000#..................... 10.79 0.48 (0.46) 0.02 (0.48) Year ended 3/31/1999...................... 10.77 0.48 0.02 0.50 (0.48) Year ended 3/31/1998...................... 10.40 0.48 0.37 0.85 (0.48) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.70 $0.39 $(0.15) $ 0.24 $(0.39) Year ended 3/31/2001...................... 10.34 0.40 0.36 0.76 (0.40) Year ended 3/31/2000#..................... 10.79 0.41 (0.45) (0.04) (0.41) Year ended 3/31/1999...................... 10.77 0.42 0.02 0.44 (0.42) Year ended 3/31/1998...................... 10.40 0.43 0.37 0.80 (0.43) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.72 $0.31 $(0.08) $ 0.23 $(0.39) Year ended 3/31/2001...................... 10.36 0.40 0.36 0.76 (0.40) Year ended 3/31/2000#..................... 10.79 0.40 (0.43) (0.03) (0.40) Year ended 3/31/1999...................... 10.77 0.41 0.03 0.44 (0.42) Year ended 3/31/1998#..................... 10.40 0.43 0.37 0.80 (0.43)
--------------- * Effective April 1, 2001, the Florida Intermediate Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.61% to 4.65%. Investor A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.36% to 4.40%. Investor B Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.61% to 3.65%. Investor C Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.61% to 3.65%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 272 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF NET ASSETS OPERATING NET INVESTMENT OPERATING NET ASSET END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO VALUE TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE END OF PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS ----------------------------------------------------------------------------------------------------- $10.55 3.28% $211,928 0.50%(a) 4.65% 15% 0.73% 10.70 8.59 240,441 0.50(a) 4.82 6 0.71 10.34 0.54 207,704 0.50(a) 4.80 12 0.74 10.79 4.95 234,530 0.50 4.65 14 0.72 10.77 8.55 203,710 0.50(a) 4.74 13 0.76 $10.54 3.03% $ 8,530 0.75%(a) 4.40% 15% 0.98% 10.69 8.33 5,319 0.75(a) 4.57 6 0.96 10.33 0.22 9,695 0.73(a) 4.57 12 0.99 10.79 4.74 12,783 0.70 4.45 14 0.97 10.77 8.34 7,205 0.70(a) 4.54 13 0.96 $10.55 2.26% $ 5,700 1.50%(a) 3.65% 15% 1.73% 10.70 7.52 4,429 1.50(a) 3.82 6 1.71 10.34 (0.38) 4,639 1.41(a) 3.89 12 1.74 10.79 4.11 5,090 1.30 3.85 14 1.72 10.77 7.80 3,606 1.20(a) 4.04 13 1.46 $10.56 2.12% $ 2,116 1.50%(a) 3.65% 15% 1.73% 10.72 7.49 172 1.50(a) 3.82 6 1.71 10.36 (0.26) 117 1.50(a) 3.80 12 1.74 10.79 4.10 1,416 1.36 3.79 14 1.72 10.77 7.80 188 1.20(a) 4.04 13 1.46
SEE NOTES TO FINANCIAL STATEMENTS. 273 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ---------------------------------------------------------------------------- FLORIDA MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $9.98 $0.47 $(0.12) $ 0.35 $(0.47) Year ended 3/31/2001...................... 9.53 0.48 0.46 0.94 (0.48) Year ended 3/31/2000...................... 9.99 0.48 (0.46) 0.02 (0.48) Year ended 3/31/1999...................... 9.99 0.48 0.00 0.48 (0.48) Year ended 3/31/1998...................... 9.48 0.48 0.51 0.99 (0.48) INVESTOR A SHARES Year ended 3/31/2002*#.................... $9.98 $0.45 $(0.12) $ 0.33 $(0.45) Year ended 3/31/2001...................... 9.53 0.45 0.46 0.91 (0.45) Year ended 3/31/2000...................... 9.99 0.46 (0.46) -- (0.46) Year ended 3/31/1999...................... 9.99 0.46 0.00 0.46 (0.46) Year ended 3/31/1998...................... 9.48 0.46 0.51 0.97 (0.46) INVESTOR B SHARES Year ended 3/31/2002*#.................... $9.98 $0.37 $(0.12) $ 0.25 $(0.37) Year ended 3/31/2001...................... 9.53 0.38 0.46 0.84 (0.38) Year ended 3/31/2000...................... 9.99 0.39 (0.46) (0.07) (0.39) Year ended 3/31/1999...................... 9.99 0.40 0.00 0.40 (0.40) Year ended 3/31/1998...................... 9.48 0.40 0.51 0.91 (0.40) INVESTOR C SHARES Year ended 3/31/2002*#.................... $9.97 $0.36 $(0.11) $ 0.25 $(0.37) Year ended 3/31/2001...................... 9.53 0.37 0.46 0.83 (0.38) Year ended 3/31/2000...................... 9.99 0.38 (0.46) (0.08) (0.38) Year ended 3/31/1999#..................... 9.99 0.37 0.03 0.40 (0.40) Year ended 3/31/1998#..................... 9.48 0.41 0.51 0.92 (0.41)
--------------- * Effective April 1, 2001, the Florida Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.71% to 4.76%. Investor A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.46% to 4.51%. Investor B Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.71% to 3.76%. Investor C Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.71% to 3.76%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 274 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS RATIO OF --------------- OPERATING RATIO OF NET RATIO OF DISTRIBUTIONS TOTAL NET ASSET NET ASSETS EXPENSES TO INVESTMENT OPERATING FROM NET DIVIDENDS VALUE END OF AVERAGE INCOME/(LOSS) PORTFOLIO EXPENSES TO REALIZED AND END OF TOTAL PERIOD NET TO AVERAGE TURNOVER AVERAGE GAINS DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS ----------------------------------------------------------------------------------------------------------------------------- $(0.05) $(0.52) $9.81 3.55% $75,300 0.60%(a) 4.76% 5% 0.87% (0.01) (0.49) 9.98 10.13 92,327 0.60(a) 4.93 7 0.83 -- (0.48) 9.53 0.26 79,335 0.60(a) 4.98 18 0.86 -- (0.48) 9.99 4.90 77,197 0.60(a) 4.80 16 0.85 -- (0.48) 9.99 10.60 27,378 0.60(a) 4.85 19 0.90 $(0.05) $(0.50) $9.81 3.29% $43,619 0.85%(a) 4.51% 5% 1.12% (0.01) (0.46) 9.98 9.86 45,034 0.85(a) 4.68 7 1.08 -- (0.46) 9.53 0.04 49,439 0.83(a) 4.75 18 1.11 -- (0.46) 9.99 4.69 65,373 0.80(a) 4.60 16 1.10 -- (0.46) 9.99 10.38 2,027 0.80(a) 4.65 19 1.10 $(0.05) $(0.42) $9.81 2.52% $10,419 1.60%(a) 3.76% 5% 1.87% (0.01) (0.39) 9.98 9.05 10,811 1.60(a) 3.93 7 1.83 -- (0.39) 9.53 (0.67) 12,802 1.53(a) 4.05 18 1.86 -- (0.40) 9.99 4.01 15,435 1.45(a) 3.95 16 1.85 -- (0.40) 9.99 9.71 17,048 1.42(a) 4.03 19 1.72 $(0.05) $(0.42) $9.80 2.51% $ 278 1.60%(a) 3.76% 5% 1.87% (0.01) (0.39) 9.97 8.92 64 1.60(a) 3.93 7 1.83 -- (0.38) 9.53 (0.73) 23 1.60(a) 3.98 18 1.86 -- (0.40) 9.99 4.01 23 1.53(a) 3.87 16 1.85 -- (0.41) 9.99 9.83 3 1.33(a) 4.12 19 1.63
SEE NOTES TO FINANCIAL STATEMENTS. 275 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- GEORGIA INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.82 $0.50 $(0.13) $ 0.37 $(0.50) Year ended 3/31/2001...................... 10.42 0.51 0.40 0.91 (0.51) Year ended 3/31/2000...................... 10.94 0.50 (0.51) (0.01) (0.50) Year ended 3/31/1999...................... 10.92 0.49 0.07 0.56 (0.50) Year ended 3/31/1998...................... 10.58 0.49 0.38 0.87 (0.49) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.82 $0.48 $(0.13) $ 0.35 $(0.48) Year ended 3/31/2001...................... 10.42 0.48 0.40 0.88 (0.48) Year ended 3/31/2000...................... 10.94 0.48 (0.52) (0.04) (0.47) Year ended 3/31/1999...................... 10.92 0.47 0.06 0.53 (0.47) Year ended 3/31/1998...................... 10.58 0.47 0.38 0.85 (0.47) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.82 $0.39 $(0.12) $ 0.27 $(0.40) Year ended 3/31/2001...................... 10.42 0.40 0.40 0.80 (0.40) Year ended 3/31/2000...................... 10.94 0.40 (0.51) (0.11) (0.40) Year ended 3/31/1999...................... 10.92 0.41 0.06 0.47 (0.41) Year ended 3/31/1998...................... 10.58 0.42 0.38 0.80 (0.42) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.82 $0.39 $(0.12) $ 0.27 $(0.40) Year ended 3/31/2001...................... 10.42 0.40 0.40 0.80 (0.40) Year ended 3/31/2000...................... 10.94 0.39 (0.51) (0.12) (0.39) Year ended 3/31/1999...................... 10.92 0.41 0.05 0.46 (0.40) Year ended 3/31/1998#..................... 10.58 0.42 0.38 0.80 (0.42)
--------------- * Effective April 1, 2001, the Georgia Intermediate Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.61% to 4.65%. Investor A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.36% to 4.40%. Investor B Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.61% to 3.65%. Investor C Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.61% to 3.65%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 276 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
RATIO OF RATIO OF NET DISTRIBUTIONS TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT FROM NET DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO REALIZED AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER GAINS DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE -------------------------------------------------------------------------------------------------------------------- $ -- $(0.50) $10.69 3.50% $134,638 0.50%(a) 4.65% 6% -- (0.51) 10.82 8.93 128,158 0.50(a) 4.80 10 (0.01) (0.51) 10.42 (0.02) 121,948 0.50(a) 4.69 28 (0.04) (0.54) 10.94 5.20 132,016 0.50 4.51 14 (0.04) (0.53) 10.92 8.45 125,654 0.50 4.54 25 $ -- $(0.48) $10.69 3.24% $ 12,791 0.75%(a) 4.40% 6% -- (0.48) 10.82 8.66 11,872 0.75(a) 4.55 10 (0.01) (0.48) 10.42 (0.27) 13,244 0.73(a) 4.46 28 (0.04) (0.51) 10.94 4.99 19,674 0.70 4.31 14 (0.04) (0.51) 10.92 8.24 9,446 0.70 4.34 25 $ -- $(0.40) $10.69 2.47% $ 6,865 1.50%(a) 3.65% 6% -- (0.40) 10.82 7.85 6,773 1.50(a) 3.80 10 (0.01) (0.41) 10.42 (0.96) 6,812 1.41(a) 3.78 28 (0.04) (0.45) 10.94 4.37 8,310 1.30 3.71 14 (0.04) (0.46) 10.92 7.70 7,378 1.20 3.84 25 $ -- $(0.40) $10.69 2.46% $ 1,400 1.50%(a) 3.65% 6% -- (0.40) 10.82 7.96 770 1.50(a) 3.80 10 (0.01) (0.40) 10.42 (1.13) 764 1.50(a) 3.69 28 (0.04) (0.44) 10.94 4.35 886 1.31 3.70 14 (0.04) (0.46) 10.92 7.70 1,034 1.20 3.84 25 WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF DISTRIBUTIONS OPERATING FROM NET EXPENSES TO REALIZED AVERAGE GAINS NET ASSETS ------------- --------------- $ -- 0.76% -- 0.73 (0.01) 0.78 (0.04) 0.73 (0.04) 0.75 $ -- 1.01% -- 0.98 (0.01) 1.03 (0.04) 0.98 (0.04) 0.95 $ -- 1.76% -- 1.73 (0.01) 1.78 (0.04) 1.73 (0.04) 1.45 $ -- 1.76% -- 1.73 (0.01) 1.78 (0.04) 1.73 (0.04) 1.45
SEE NOTES TO FINANCIAL STATEMENTS. 277 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- GEORGIA MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.02 $0.48 $(0.18) $ 0.30 $(0.48) Year ended 3/31/2001#..................... 9.53 0.47 0.49 0.96 (0.47) Year ended 3/31/2000...................... 10.12 0.46 (0.59) (0.13) (0.46) Year ended 3/31/1999...................... 10.00 0.46 0.12 0.58 (0.46) Year ended 3/31/1998...................... 9.50 0.47 0.50 0.97 (0.47) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.02 $0.46 $(0.20) $ 0.26 $(0.45) Year ended 3/31/2001#..................... 9.53 0.44 0.50 0.94 (0.45) Year ended 3/31/2000...................... 10.12 0.43 (0.59) (0.16) (0.43) Year ended 3/31/1999...................... 10.00 0.44 0.12 0.56 (0.44) Year ended 3/31/1998...................... 9.50 0.45 0.50 0.95 (0.45) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.02 $0.38 $(0.18) $ 0.20 $(0.38) Year ended 3/31/2001#..................... 9.53 0.38 0.49 0.87 (0.38) Year ended 3/31/2000...................... 10.12 0.37 (0.59) (0.22) (0.37) Year ended 3/31/1999...................... 10.00 0.37 0.12 0.49 (0.37) Year ended 3/31/1998...................... 9.50 0.39 0.50 0.89 (0.39) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.02 $0.36 $(0.16) $ 0.20 $(0.38) Year ended 3/31/2001#..................... 9.53 0.38 0.49 0.87 (0.38) Year ended 3/31/2000...................... 10.12 0.36 (0.59) (0.23) (0.36) Year ended 3/31/1999...................... 10.00 0.37 0.12 0.49 (0.37) Year ended 3/31/1998#..................... 9.50 0.40 0.50 0.90 (0.40)
--------------- * Effective April 1, 2001, the Georgia Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.72% to 4.77%. Investor A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.47% to 4.52%. Investor B Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.72% to 3.77%. Investor C Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.72% to 3.77%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 278 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF NET ASSETS OPERATING INVESTMENT OPERATING NET ASSET END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO VALUE TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE END OF PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS ---------------------------------------------------------------------------------------------------------- $ 9.84 2.98% $15,730 0.60%(a) 4.77% 28% 1.28% 10.02 10.38 17,408 0.60(a) 4.87 11 1.08 9.53 (1.27) 13,064 0.60 4.74 50 1.38 10.12 5.89 9,719 0.60 4.53 17 1.18 10.00 10.43 8,138 0.60(a) 4.82 30 1.02 $ 9.83 2.62% $ 1,165 0.85%(a) 4.52% 28% 1.53% 10.02 10.11 1,789 0.85(a) 4.62 11 1.33 9.53 (1.50) 1,853 0.83 4.51 50 1.63 10.12 5.68 2,611 0.80 4.33 17 1.43 10.00 10.22 483 0.80(a) 4.62 30 1.22 $ 9.84 1.96% $ 7,394 1.60%(a) 3.77% 28% 2.28% 10.02 9.29 9,178 1.60(a) 3.87 11 2.08 9.53 (2.19) 10,285 1.54 3.80 50 2.38 10.12 5.00 11,348 1.45 3.68 17 2.18 10.00 9.54 10,052 1.42(a) 4.00 30 1.84 $ 9.84 1.96% $ 257 1.60%(a) 3.77% 28% 2.28% 10.02 9.29 58 1.60(a) 3.87 11 2.08 9.53 (2.29) 60 1.60 3.74 50 2.38 10.12 4.97 3 1.49 3.64 17 2.18 10.00 9.64 27 1.33(a) 4.09 30 1.75
SEE NOTES TO FINANCIAL STATEMENTS. 279 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- KANSAS MUNICIPAL INCOME PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.33 $0.45 $(0.16) $0.29 $(0.45) Period ended 3/31/2001**#................. 10.00 0.46 0.18 0.64 (0.31) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.33 $0.43 $(0.17) $0.26 $(0.43) Period ended 3/31/2001**#................. 10.00 0.47 0.13 0.60 (0.27) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.32 $0.35 $(0.17) $0.18 $(0.35) Period ended 3/31/2001** #................ 10.00 0.33 0.19 0.52 (0.20) DISTRIBUTIONS FROM NET REALIZED GAINS ------------- KANSAS MUNICIPAL INCOME PRIMARY A SHARES Year ended 3/31/2002*#.................... $(0.01) Period ended 3/31/2001**#................. 0.00 INVESTOR A SHARES Year ended 3/31/2002*#.................... $(0.01) Period ended 3/31/2001**#................. 0.00 INVESTOR B SHARES Year ended 3/31/2002*#.................... $(0.01) Period ended 3/31/2001** #................ 0.00
--------------- * Effective April 1, 2001, the Kansas Municipal Income Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.39% to 4.40.%. Investor A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.14% to 4.15%. Investor B Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.39% to 3.40%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. **Kansas Municipal Income Primary A, Investor A and Investor B Shares commenced operations on July 17, 2000, August 14, 2000 and August 29, 2000, respectively. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 280 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO AND VALUE TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS --------------------------------------------------------------------------------------------------------------------------- $(0.46) $10.16 2.84% $ 98,506 0.60%(a) 4.40% 13% 0.91% (0.31) 10.33 6.60 111,226 0.60+(a) 4.44+(a) 17 0.93+ $(0.44) $10.15 2.49% $ 3,115 0.85%(a) 4.15% 13% 1.16% (0.27) 10.33 5.66 646 0.85+(a) 4.19+(a) 17 1.18+ $(0.36) $10.14 1.62% $ 25 1.60%(a) 3.40% 13% 1.91% (0.20) 10.32 4.78 262 1.60+(a) 3.44+(a) 17 1.93+
SEE NOTES TO FINANCIAL STATEMENTS. 281 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- MARYLAND INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $11.01 $0.50 $(0.17) $ 0.33 $(0.50) Year ended 3/31/2001#..................... 10.58 0.51 0.43 0.94 (0.51) Year ended 3/31/2000...................... 11.07 0.50 (0.48) 0.02 (0.50) Year ended 3/31/1999...................... 11.01 0.50 0.06 0.56 (0.50) Year ended 3/31/1998...................... 10.70 0.51 0.31 0.82 (0.51) INVESTOR A SHARES Year ended 3/31/2002*#.................... $11.01 $0.47 $(0.17) $ 0.30 $(0.47) Year ended 3/31/2001#..................... 10.58 0.48 0.43 0.91 (0.48) Year ended 3/31/2000...................... 11.07 0.47 (0.48) (0.01) (0.47) Year ended 3/31/1999...................... 11.01 0.48 0.06 0.54 (0.48) Year ended 3/31/1998...................... 10.70 0.49 0.31 0.80 (0.49) INVESTOR B SHARES Year ended 3/31/2002*#.................... $11.01 $0.38 $(0.16) $ 0.22 $(0.39) Year ended 3/31/2001#..................... 10.58 0.40 0.43 0.83 (0.40) Year ended 3/31/2000...................... 11.07 0.40 (0.48) (0.08) (0.40) Year ended 3/31/1999...................... 11.01 0.41 0.06 0.47 (0.41) Year ended 3/31/1998...................... 10.70 0.43 0.31 0.74 (0.43) INVESTOR C SHARES Year ended 3/31/2002*#.................... $11.01 $0.35 $(0.13) $ 0.22 $(0.39) Year ended 3/31/2001#..................... 10.58 0.40 0.43 0.83 (0.40) Year ended 3/31/2000...................... 11.07 0.39 (0.48) (0.09) (0.39) Year ended 3/31/1999...................... 11.01 0.41 0.06 0.47 (0.41) Year ended 3/31/1998...................... 10.70 0.43 0.31 0.74 (0.43) DISTRIBUTIONS FROM NET REALIZED GAINS ------------- MARYLAND INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000...................... (0.01) Year ended 3/31/1999...................... -- Year ended 3/31/1998...................... -- INVESTOR A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000...................... (0.01) Year ended 3/31/1999...................... -- Year ended 3/31/1998...................... -- INVESTOR B SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000...................... (0.01) Year ended 3/31/1999...................... -- Year ended 3/31/1998...................... -- INVESTOR C SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000...................... (0.01) Year ended 3/31/1999...................... -- Year ended 3/31/1998...................... --
--------------- * Effective April 1, 2001, the Maryland Intermediate Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.49% to 4.54%. Investor A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.24% to 4.29%. Investor B Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.49% to 3.54%. Investor C Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.49% to 3.54%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 282 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS ----------------------------------------------------------------------------------------------------------------------- $(0.50) $10.84 3.02% $172,600 0.50%(a) 4.54% 16% 0.74% (0.51) 11.01 9.08 178,304 0.50 4.72 13 0.71 (0.51) 10.58 0.17 169,218 0.50 4.65 21 0.76 (0.50) 11.07 5.17 183,356 0.50 4.51 22 0.74 (0.51) 11.01 7.83 84,715 0.50 4.63 12 0.80 $(0.47) $10.84 2.76% $ 20,760 0.75%(a) 4.29% 16% 0.99% (0.48) 11.01 8.81 17,478 0.75 4.47 13 0.96 (0.48) 10.58 (0.06) 16,454 0.73 4.42 21 1.01 (0.48) 11.07 4.96 17,166 0.70 4.31 22 0.99 (0.49) 11.01 7.61 15,558 0.70 4.43 12 1.00 $(0.39) $10.84 1.99% $ 6,318 1.50%(a) 3.54% 16% 1.74% (0.40) 11.01 8.01 5,120 1.50 3.72 13 1.71 (0.41) 10.58 (0.74) 5,662 1.42 3.73 21 1.76 (0.41) 11.07 4.33 5,989 1.30 3.71 22 1.74 (0.43) 11.01 7.07 4,804 1.20 3.93 12 1.50 $(0.39) $10.84 1.98% $ 1,454 1.50%(a) 3.54% 16% 1.74% (0.40) 11.01 8.01 301 1.50 3.72 13 1.71 (0.40) 10.58 (0.82) 335 1.50 3.65 21 1.76 (0.41) 11.07 4.31 561 1.32 3.69 22 1.74 (0.43) 11.01 7.07 840 1.20 3.93 12 1.50
SEE NOTES TO FINANCIAL STATEMENTS. 283 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- MARYLAND MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.08 $0.46 $(0.11) $ 0.35 $(0.46) Year ended 3/31/2001#..................... 9.53 0.46 0.55 1.01 (0.46) Year ended 3/31/2000#..................... 9.99 0.42 (0.45) (0.03) (0.42) Year ended 3/31/1999...................... 9.94 0.43 0.05 0.48 (0.43) Year ended 3/31/1998...................... 9.41 0.45 0.53 0.98 (0.45) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.08 $0.43 $(0.10) $ 0.33 $(0.44) Year ended 3/31/2001#..................... 9.53 0.43 0.56 0.99 (0.44) Year ended 3/31/2000#..................... 9.99 0.40 (0.45) (0.05) (0.40) Year ended 3/31/1999...................... 9.94 0.41 0.05 0.46 (0.41) Year ended 3/31/1998...................... 9.41 0.43 0.53 0.96 (0.43) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.08 $0.36 $(0.11) $ 0.25 $(0.36) Year ended 3/31/2001#..................... 9.53 0.37 0.54 0.91 (0.36) Year ended 3/31/2000#..................... 9.99 0.33 (0.45) (0.12) (0.33) Year ended 3/31/1999...................... 9.94 0.35 0.05 0.40 (0.35) Year ended 3/31/1998...................... 9.41 0.37 0.53 0.90 (0.37) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.09 $0.36 $(0.12) $ 0.24 $(0.36) Year ended 3/31/2001#..................... 9.53 0.37 0.53 0.90 (0.36) Year ended 3/31/2000#..................... 9.99 0.33 (0.45) (0.12) (0.33) Year ended 3/31/1999...................... 9.94 0.34 0.05 0.39 (0.34) Year ended 3/31/1998...................... 9.41 0.39 0.53 0.92 (0.39) DISTRIBUTIONS FROM NET REALIZED GAINS ------------- MARYLAND MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... (0.00)## Year ended 3/31/1998...................... -- INVESTOR A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... (0.00)## Year ended 3/31/1998...................... -- INVESTOR B SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... (0.00)## Year ended 3/31/1998...................... -- INVESTOR C SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... (0.00)## Year ended 3/31/1998...................... --
--------------- * Effective April 1, 2001, the Maryland Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.51% to 4.57%. Investor A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.26% to 4.32%. Investor B Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.51% to 3.57%. Investor C Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.51% to 3.57%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. ## Amount represents less than $0.01 per share. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 284 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS -------------------------------------------------------------------------------------------------------------- $(0.46) $ 9.97 3.52% $17,861 0.60%(a) 4.57% 8% 1.12% (0.46) 10.08 10.90 20,029 0.60(a) 4.74 25 1.00 (0.43) 9.53 (0.25) 17,587 0.60 4.41 50 1.22 (0.43) 9.99 4.92 17,033 0.60 4.29 22 1.07 (0.45) 9.94 10.62 9,049 0.60 4.61 17 1.07 $(0.44) $ 9.97 3.27% $ 3,114 0.85%(a) 4.32% 8% 1.37% (0.44) 10.08 10.62 2,679 0.85(a) 4.49 25 1.25 (0.41) 9.53 (0.49) 1,781 0.83 4.18 50 1.47 (0.41) 9.99 4.71 1,751 0.80 4.09 22 1.32 (0.43) 9.94 10.40 1,902 0.80 4.41 17 1.27 $(0.36) $ 9.97 2.50% $17,555 1.60%(a) 3.57% 8% 2.12% (0.36) 10.08 9.80 16,830 1.60(a) 3.74 25 2.00 (0.34) 9.53 (1.19) 16,034 1.54 3.47 50 2.22 (0.35) 9.99 4.03 16,124 1.45 3.44 22 2.07 (0.37) 9.94 9.72 11,071 1.42 3.79 17 1.89 $(0.36) $ 9.97 2.60% $ 392 1.60%(a) 3.57% 8% 2.12% (0.36) 10.07 9.69 274 1.60(a) 3.74 25 2.00 (0.34) 9.53 (1.23) 214 1.60 3.41 50 2.22 (0.34) 9.99 4.01 3 1.47 3.42 22 2.07 (0.39) 9.94 9.88 3 1.33 3.88 17 1.80
SEE NOTES TO FINANCIAL STATEMENTS. 285 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.58 $0.49 $(0.16) $ 0.33 $(0.48) Year ended 3/31/2001#..................... 10.21 0.49 0.37 0.86 (0.49) Year ended 3/31/2000...................... 10.71 0.48 (0.48) 0.00 (0.48) Year ended 3/31/1999...................... 10.70 0.49 0.04 0.53 (0.49) Year ended 3/31/1998...................... 10.34 0.49 0.36 0.85 (0.49) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.58 $0.46 $(0.14) $ 0.32 $(0.46) Year ended 3/31/2001#..................... 10.21 0.47 0.36 0.83 (0.46) Year ended 3/31/2000...................... 10.71 0.46 (0.48) (0.02) (0.46) Year ended 3/31/1999...................... 10.70 0.47 0.04 0.51 (0.47) Year ended 3/31/1998...................... 10.34 0.47 (0.36) 0.83 (0.47) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.58 $0.38 $(0.15) $ 0.23 $(0.38) Year ended 3/31/2001#..................... 10.21 0.38 0.37 0.75 (0.38) Year ended 3/31/2000...................... 10.71 0.39 (0.48) (0.09) (0.39) Year ended 3/31/1999...................... 10.70 0.40 0.04 0.44 (0.40) Year ended 3/31/1998...................... 10.34 0.42 0.36 0.78 (0.42) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.58 $0.34 $(0.10) $ 0.24 $(0.38) Year ended 3/31/2001#..................... 10.21 0.39 0.36 0.75 (0.38) Year ended 3/31/2000...................... 10.71 0.38 (0.48) (0.10) (0.38) Year ended 3/31/1999...................... 10.70 0.42 0.02 0.44 (0.40) Year ended 3/31/1998...................... 10.34 0.42 0.36 0.78 (0.42) DISTRIBUTIONS FROM NET REALIZED GAINS ------------- NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000...................... (0.02) Year ended 3/31/1999...................... (0.03) Year ended 3/31/1998...................... -- INVESTOR A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000...................... (0.02) Year ended 3/31/1999...................... (0.03) Year ended 3/31/1998...................... -- INVESTOR B SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000...................... (0.02) Year ended 3/31/1999...................... (0.03) Year ended 3/31/1998...................... -- INVESTOR C SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000...................... (0.02) Year ended 3/31/1999...................... (0.03) Year ended 3/31/1998...................... --
--------------- * Effective April 1, 2001, the North Carolina Intermediate Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.48% to 4.58%. Investor A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.23% to 4.33%. Investor B Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.48% to 3.58%. Investor C Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.48% to 3.58%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 286 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS -------------------------------------------------------------------------------------------------------------- $(0.48) $10.43 3.20% $176,671 0.50%(a) 4.58% 13% 0.74% (0.49) 10.58 8.61 180,126 0.50(a) 4.71 19 0.71 (0.50) 10.21 0.05 175,650 0.50(a) 4.67 19 0.76 (0.52) 10.71 5.03 193,398 0.50 4.57 16 0.71 (0.49) 10.70 8.39 179,729 0.50(a) 4.69 21 0.76 $(0.46) $10.44 3.04% $ 11,975 0.75%(a) 4.33% 13% 0.99% (0.46) 10.58 8.34 10,332 0.75(a) 4.46 19 0.96 (0.48) 10.21 (0.18) 9,684 0.73(a) 4.44 19 1.01 (0.50) 10.71 4.82 10,099 0.70 4.37 16 0.96 (0.47) 10.70 8.17 8,572 0.70(a) 4.49 21 0.96 $(0.38) $10.43 2.17% $ 5,917 1.50%(a) 3.58% 13% 1.74% (0.38) 10.58 7.54 5,261 1.50(a) 3.71 19 1.71 (0.41) 10.21 (0.87) 5,212 1.41(a) 3.76 19 1.76 (0.43) 10.71 4.20 6,671 1.30 3.77 16 1.71 (0.42) 10.70 7.64 6,859 1.20(a) 3.99 21 1.46 $(0.38) $10.44 2.25% $ 734 1.50%(a) 3.58% 13% 1.74% (0.38) 10.58 7.54 79 1.50(a) 3.71 19 1.71 (0.40) 10.21 (0.95) 88 1.50(a) 3.67 19 1.76 (0.43) 10.71 4.18 109 1.31 3.76 16 1.71 (0.42) 10.70 7.64 822 1.20(a) 3.99 21 1.46
SEE NOTES TO FINANCIAL STATEMENTS. 287 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- NORTH CAROLINA MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $ 9.99 $0.47 $(0.12) $ 0.35 $(0.47) Year ended 3/31/2001#..................... 9.52 0.47 0.47 0.94 (0.47) Year ended 3/31/2000#..................... 10.08 0.45 (0.56) (0.11) (0.45) Year ended 3/31/1999...................... 10.01 0.45 0.08 0.53 (0.46) Year ended 3/31/1998...................... 9.47 0.47 0.54 1.01 (0.47) INVESTOR A SHARES Year ended 3/31/2002*#.................... $ 9.99 $0.44 $(0.12) $ 0.32 $(0.44) Year ended 3/31/2001#..................... 9.52 0.44 0.48 0.92 (0.45) Year ended 3/31/2000#..................... 10.08 0.43 (0.56) (0.13) (0.43) Year ended 3/31/1999...................... 10.01 0.43 0.08 0.51 (0.44) Year ended 3/31/1998...................... 9.47 0.45 0.54 0.99 (0.45) INVESTOR B SHARES Year ended 3/31/2002*#.................... $ 9.99 $0.37 $(0.12) $ 0.25 $(0.37) Year ended 3/31/2001#..................... 9.52 0.37 0.47 0.84 (0.37) Year ended 3/31/2000#..................... 10.08 0.37 (0.56) (0.19) (0.37) Year ended 3/31/1999...................... 10.01 0.38 0.07 0.45 (0.38) Year ended 3/31/1998...................... 9.47 0.39 0.54 0.93 (0.39) INVESTOR C SHARES Year ended 3/31/2002*#.................... $ 9.99 $0.37 $(0.12) $ 0.25 $(0.37) Year ended 3/31/2001#..................... 9.51 0.36 0.49 0.85 (0.37) Year ended 3/31/2000#..................... 10.08 0.37 (0.57) (0.20) (0.37) Year ended 3/31/1999...................... 10.01 0.37 0.07 0.44 (0.37) Year ended 3/31/1998#..................... 9.47 0.40 0.54 0.94 (0.40)
--------------- * Effective April 1, 2001, the North Carolina Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.58% to 4.66%. Investor A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.33% to 4.41%. Investor B Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.58% to 3.66%. Investor C Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.58% to 3.66%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 288 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF NET ASSETS OPERATING INVESTMENT OPERATING NET ASSET END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO VALUE TOTAL PERIOD AVERAGE NET TO AVERAGE NET TURNOVER AVERAGE END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS ----------------------------------------------------------------------------------------------------------- $ 9.87 3.51% $22,221 0.60%(a) 4.66% 1% 1.11% 9.99 10.15 21,966 0.60(a) 4.86 19 0.98 9.52 (0.98) 17,787 0.60(a) 4.74 37 1.13 10.08 5.39 16,293 0.60(a) 4.57 11 1.00 10.01 10.86 6,452 0.60(a) 4.78 20 0.93 $ 9.87 3.25% $ 4,058 0.85%(a) 4.41% 1% 1.36% 9.99 9.88 2,780 0.85(a) 4.61 19 1.23 9.52 (1.20) 1,528 0.83(a) 4.51 37 1.38 10.08 5.20 1,028 0.80(a) 4.37 11 1.25 10.01 10.64 609 0.80(a) 4.58 20 1.13 $ 9.87 2.48% $15,093 1.60%(a) 3.66% 1% 2.11% 9.99 9.06 16,972 1.60(a) 3.86 19 1.98 9.52 (1.90) 20,207 1.54(a) 3.80 37 2.13 10.08 4.53 24,656 1.45(a) 3.72 11 2.00 10.01 9.96 25,187 1.42(a) 3.96 20 1.75 $ 9.87 2.48% $ 135 1.60%(a) 3.66% 1% 2.11% 9.99 9.18 87 1.60(a) 3.86 19 1.98 9.51 (1.99) 54 1.60(a) 3.74 37 2.13 10.08 4.50 3 1.47(a) 3.70 11 2.00 10.01 10.07 3 1.33(a) 4.05 20 1.66
SEE NOTES TO FINANCIAL STATEMENTS. 289 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- SOUTH CAROLINA INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.64 $0.52 $(0.14) $ 0.38 $(0.52) Year ended 3/31/2001#..................... 10.27 0.52 0.37 0.89 (0.52) Year ended 3/31/2000#..................... 10.79 0.51 (0.51) -- (0.51) Year ended 3/31/1999...................... 10.79 0.51 0.04 0.55 (0.51) Year ended 3/31/1998...................... 10.50 0.52 0.29 0.81 (0.52) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.64 $0.50 $(0.14) $ 0.36 $(0.50) Year ended 3/31/2001#..................... 10.27 0.49 0.37 0.86 (0.49) Year ended 3/31/2000#..................... 10.79 0.49 (0.51) (0.02) (0.49) Year ended 3/31/1999...................... 10.79 0.49 0.04 0.53 (0.49) Year ended 3/31/1998...................... 10.50 0.50 0.29 0.79 (0.50) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.64 $0.42 $(0.14) $ 0.28 $(0.42) Year ended 3/31/2001#..................... 10.27 0.41 0.37 0.78 (0.41) Year ended 3/31/2000#..................... 10.79 0.41 (0.51) (0.10) (0.41) Year ended 3/31/1999...................... 10.79 0.43 0.04 0.47 (0.43) Year ended 3/31/1998...................... 10.50 0.44 0.29 0.73 (0.44) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.64 $0.41 $(0.12) $ 0.29 $(0.42) Year ended 3/31/2001#..................... 10.27 0.41 0.37 0.78 (0.41) Year ended 3/31/2000#..................... 10.79 0.40 (0.51) (0.11) (0.40) Year ended 3/31/1999...................... 10.79 0.42 0.04 0.46 (0.42) Year ended 3/31/1998...................... 10.50 0.44 0.29 0.73 (0.44) DISTRIBUTIONS FROM NET REALIZED GAINS ------------- SOUTH CAROLINA INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... (0.04) Year ended 3/31/1998...................... (0.00)## INVESTOR A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... (0.04) Year ended 3/31/1998...................... (0.00)## INVESTOR B SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... (0.04) Year ended 3/31/1998...................... (0.00)## INVESTOR C SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... (0.04) Year ended 3/31/1998...................... (0.00)##
--------------- * Effective April 1, 2001, the South Carolina Intermediate Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.02, decrease net realized and unrealized gains or losses per share by $0.02 and increase the ratio of net investment income to average net assets from 4.78% to 4.92%. Investor A Shares -- increase net investment income per share by $0.02, decrease net realized and unrealized gains or losses per share by $0.02 and increase the ratio of net investment income to average net assets from 4.53% to 4.67%. Investor B Shares -- increase net investment income per share by $0.02, decrease net realized and unrealized gains or losses per share by $0.02 and increase the ratio of net investment income to average net assets from 3.78% to 3.92%. Investor C Shares -- increase net investment income per share by $0.02, decrease net realized and unrealized gains or losses per share by $0.02 and increase the ratio of net investment income to average net assets from 3.78% to 3.92%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the average shares method. ## Amount represents less than $0.01 per share. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 290 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE NET TURNOVER AVERAGE DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS ----------------------------------------------------------------------------------------------------------------------- $(0.52) $10.50 3.65% $207,645 0.50%(a) 4.92% 8% 0.73% (0.52) 10.64 8.85 217,513 0.50(a) 4.95 9 0.70 (0.52) 10.27 0.09 204,854 0.50(a) 4.88 14 0.74 (0.55) 10.79 5.22 239,195 0.50(a) 4.75 9 0.69 (0.52) 10.79 7.88 253,090 0.50(a) 4.86 16 0.75 $(0.50) $10.50 3.39% $ 17,791 0.75%(a) 4.67% 8% 0.98% (0.49) 10.64 8.58 18,420 0.75(a) 4.70 9 0.95 (0.50) 10.27 (0.14) 17,396 0.73(a) 4.65 14 0.99 (0.53) 10.79 5.01 18,729 0.70(a) 4.55 9 0.94 (0.50) 10.79 7.67 13,945 0.70(a) 4.66 16 0.95 $(0.42) $10.50 2.62% $ 7,797 1.50%(a) 3.92% 8% 1.73% (0.41) 10.64 7.78 7,083 1.50(a) 3.95 9 1.70 (0.42) 10.27 (0.82) 7,310 1.41(a) 3.97 14 1.74 (0.47) 10.79 4.39 8,542 1.30(a) 3.95 9 1.69 (0.44) 10.79 7.13 6,819 1.20(a) 4.16 16 1.45 $(0.42) $10.51 2.71% $ 3,713 1.50%(a) 3.92% 8% 1.73% (0.41) 10.64 7.78 2,175 1.50(a) 3.95 9 1.70 (0.41) 10.27 (0.91) 2,755 1.50(a) 3.88 14 1.74 (0.46) 10.79 4.36 3,102 1.32(a) 3.93 9 1.69 (0.44) 10.79 7.13 2,698 1.20(a) 4.16 16 1.45
SEE NOTES TO FINANCIAL STATEMENTS. 291 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- SOUTH CAROLINA MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.30 $0.49 $(0.11) $ 0.38 $(0.49) Year ended 3/31/2001#..................... 9.75 0.48 0.55 1.03 (0.48) Year ended 3/31/2000#..................... 10.30 0.46 (0.55) (0.09) (0.46) Year ended 3/31/1999...................... 10.26 0.49 0.03 0.52 (0.48) Year ended 3/31/1998...................... 9.79 0.49 0.47 0.96 (0.49) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.29 $0.47 $(0.11) $ 0.36 $(0.46) Year ended 3/31/2001#..................... 9.75 0.46 0.54 1.00 (0.46) Year ended 3/31/2000#..................... 10.30 0.45 (0.55) (0.10) (0.45) Year ended 3/31/1999...................... 10.26 0.44 0.06 0.50 (0.46) Year ended 3/31/1998...................... 9.79 0.47 0.47 0.94 (0.47) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.30 $0.39 $(0.11) $ 0.28 $(0.39) Year ended 3/31/2001#..................... 9.75 0.39 0.55 0.94 (0.39) Year ended 3/31/2000#..................... 10.30 0.38 (0.55) (0.17) (0.38) Year ended 3/31/1999...................... 10.26 0.39 0.04 0.43 (0.39) Year ended 3/31/1998...................... 9.79 0.40 0.47 0.87 (0.40) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.30 $0.37 $(0.09) $ 0.28 $(0.39) Year ended 3/31/2001#..................... 9.75 0.39 0.55 0.94 (0.39) Year ended 3/31/2000#..................... 10.30 0.38 (0.55) (0.17) (0.38) Year ended 3/31/1999#..................... 10.26 0.39 0.04 0.43 (0.39) Year ended 3/31/1998...................... 9.79 0.42 0.47 0.89 (0.42) DISTRIBUTIONS FROM NET REALIZED GAINS ------------- SOUTH CAROLINA MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... -- Year ended 3/31/1999...................... -- Year ended 3/31/1998...................... (0.00)## INVESTOR A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... -- Year ended 3/31/1999...................... -- Year ended 3/31/1998...................... (0.00)## INVESTOR B SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... -- Year ended 3/31/1999...................... -- Year ended 3/31/1998...................... (0.00)## INVESTOR C SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... -- Year ended 3/31/1999#..................... -- Year ended 3/31/1998...................... (0.00)##
--------------- * Effective April 1, 2001, the South Carolina Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.61% to 4.73%. Investor A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.36% to 4.48%. Investor B Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.61% to 3.73%. Investor C Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.61% to 3.73%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. ## Amount represents less than $0.01 per share. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 292 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS ------------------------------------------------------------------------------------------------------------- $(0.49) $10.19 3.72% $16,874 0.60%(a) 4.73% 7% 1.23% (0.48) 10.30 10.90 25,908 0.60(a) 4.87 8 0.99 (0.46) 9.75 (0.72) 28,784 0.60(a) 4.79 71 1.28 (0.48) 10.30 5.13 12,793 0.60 4.62 3 1.18 (0.49) 10.26 10.04 9,455 0.60(a) 4.79 9 0.99 $(0.46) $10.19 3.56% $ 1,023 0.85%(a) 4.48% 7% 1.48% (0.46) 10.29 10.52 1,057 0.85(a) 4.62 8 1.24 (0.45) 9.75 (0.95) 906 0.83(a) 4.56 71 1.53 (0.46) 10.30 4.92 1,060 0.80 4.42 3 1.43 (0.47) 10.26 9.82 1,517 0.80(a) 4.59 9 1.19 $(0.39) $10.19 2.69% $ 7,277 1.60%(a) 3.73% 7% 2.23% (0.39) 10.30 9.80 8,338 1.60(a) 3.87 8 1.99 (0.38) 9.75 (1.65) 8,974 1.54(a) 3.85 71 2.28 (0.39) 10.30 4.25 10,905 1.44 3.78 3 2.18 (0.40) 10.26 9.15 10,394 1.42(a) 3.97 9 1.81 $(0.39) $10.19 2.67% $ 662 1.60%(a) 3.73% 7% 2.23% (0.39) 10.30 9.80 45 1.60(a) 3.87 8 1.99 (0.38) 9.75 (1.71) 41 1.60(a) 3.79 71 2.28 (0.39) 10.30 4.23 77 1.44 3.78 3 2.18 (0.42) 10.26 9.29 28 1.33(a) 4.06 9 1.72
SEE NOTES TO FINANCIAL STATEMENTS. 293 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- TENNESSEE INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.35 $0.46 $(0.10) $ 0.36 $(0.46) Year ended 3/31/2001#..................... 9.91 0.48 0.44 0.92 (0.48) Year ended 3/31/2000#..................... 10.46 0.47 (0.54) (0.07) (0.47) Year ended 3/31/1999...................... 10.40 0.47 0.06 0.53 (0.47) Year ended 3/31/1998...................... 10.08 0.47 0.32 0.79 (0.47) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.35 $0.43 $(0.09) $ 0.34 $(0.44) Year ended 3/31/2001#..................... 9.91 0.45 0.44 0.89 (0.45) Year ended 3/31/2000#..................... 10.46 0.44 (0.54) (0.10) (0.44) Year ended 3/31/1999...................... 10.40 0.45 0.06 0.51 (0.45) Year ended 3/31/1998...................... 10.08 0.45 0.32 0.77 (0.45) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.35 $0.36 $(0.09) $ 0.27 $(0.36) Year ended 3/31/2001#..................... 9.91 0.38 0.44 0.82 (0.38) Year ended 3/31/2000#..................... 10.46 0.38 (0.54) (0.16) (0.38) Year ended 3/31/1999...................... 10.40 0.38 0.06 0.44 (0.38) Year ended 3/31/1998...................... 10.08 0.40 0.32 0.72 (0.40) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.31 $0.30 $(0.04) $ 0.26 $(0.36) Year ended 3/31/2001#..................... 9.87 0.42 0.40 0.82 (0.38) Year ended 3/31/2000#..................... 10.45 0.39 (0.57) (0.18) (0.39) Year ended 3/31/1999...................... 10.40 0.39 0.05 0.44 (0.39) Year ended 3/31/1998...................... 10.08 0.40 0.32 0.72 (0.40) DISTRIBUTIONS FROM NET REALIZED GAINS ------------- TENNESSEE INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... -- Year ended 3/31/1998...................... -- INVESTOR A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... -- Year ended 3/31/1998...................... -- INVESTOR B SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... -- Year ended 3/31/1998...................... -- INVESTOR C SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.01) Year ended 3/31/1999...................... -- Year ended 3/31/1998...................... --
--------------- * Effective April 1, 2001, the Tennessee Intermediate Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.44% to 4.45%. Investor A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.19% to 4.20%. Investor B Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.44% to 3.45%. Investor C Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.44% to 3.45%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 294 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS ------------------------------------------------------------------------------------------------------------- $(0.46) $10.25 3.54% $40,807 0.50% 4.45% 0% 0.93% (0.48) 10.35 9.53 38,928 0.50(a) 4.77 10 0.84 (0.48) 9.91 (0.67) 37,736 0.50(a) 4.62 49 0.94 (0.47) 10.46 5.18 42,826 0.50 4.48 22 0.85 (0.47) 10.40 7.99 39,091 0.50(a) 4.58 38 0.84 $(0.44) $10.25 3.28% $ 9,955 0.75% 4.20% 0% 1.18% (0.45) 10.35 9.25 7,945 0.75(a) 4.52 10 1.09 (0.45) 9.91 (0.90) 7,810 0.73(a) 4.39 49 1.19 (0.45) 10.46 4.97 9,242 0.70 4.28 22 1.10 (0.45) 10.40 7.77 8,061 0.70(a) 4.38 38 1.04 $(0.36) $10.26 2.61% $ 1,351 1.50% 3.45% 0% 1.93% (0.38) 10.35 8.44 1,448 1.50(a) 3.77 10 1.84 (0.39) 9.91 (1.58) 1,783 1.41(a) 3.71 49 1.94 (0.38) 10.46 4.34 3,007 1.30 3.68 22 1.85 (0.40) 10.40 7.24 2,924 1.20(a) 3.88 38 1.54 $(0.36) $10.21 2.52% $ 322 1.50% 3.45% 0% 1.93% (0.38) 10.31 8.46 3 1.50(a) 3.77 10 1.84 (0.40) 9.87 (1.96) 3 1.50(a) 3.62 49 1.94 (0.39) 10.45 4.28 33 1.11 3.87 22 1.85 (0.40) 10.40 7.29 3 1.20(a) 3.88 38 1.54
SEE NOTES TO FINANCIAL STATEMENTS. 295 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- TENNESSEE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.24 $0.48 $(0.15) $ 0.33 $(0.48) Year ended 3/31/2001...................... 9.68 0.49 0.56 1.05 (0.49) Year ended 3/31/2000#..................... 10.30 0.47 (0.62) (0.15) (0.47) Year ended 3/31/1999...................... 10.22 0.48 0.08 0.56 (0.48) Year ended 3/31/1998...................... 9.70 0.48 0.52 1.00 (0.48) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.24 $0.46 $(0.15) $ 0.31 $(0.46) Year ended 3/31/2001...................... 9.68 0.46 0.56 1.02 (0.46) Year ended 3/31/2000#..................... 10.30 0.43 (0.62) (0.19) (0.43) Year ended 3/31/1999#..................... 10.22 0.43 0.11 0.54 (0.46) Year ended 3/31/1998...................... 9.70 0.46 0.52 0.98 (0.46) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.24 $0.38 $(0.15) $ 0.23 $(0.38) Year ended 3/31/2001...................... 9.68 0.39 0.56 0.95 (0.39) Year ended 3/31/2000#..................... 10.30 0.38 (0.62) (0.24) (0.38) Year ended 3/31/1999...................... 10.22 0.39 0.08 0.47 (0.39) Year ended 3/31/1998...................... 9.70 0.40 0.52 0.92 (0.40) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.24 $0.38 $(0.15) $ 0.23 $(0.38) Year ended 3/31/2001...................... 9.68 0.39 0.56 0.95 (0.39) Year ended 3/31/2000#..................... 10.30 0.36 (0.62) (0.26) (0.36) Year ended 3/31/1999#..................... 10.22 0.38 0.09 0.47 (0.39) Year ended 3/31/1998#..................... 9.70 0.40 0.52 0.92 (0.40)
--------------- * Effective April 1, 2001, the Tennessee Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.68% to 4.72%. Investor A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.43% to 4.47%. Investor B Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.68% to 3.72%. Investor C Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.68% to 3.72%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 296 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS ----------------------------------------------------------------------------------------------------------- $10.09 3.29% $4,142 0.60%(a) 4.72% 3% 2.18% 10.24 11.10 4,726 0.60(a) 4.92 9 1.57 9.68 (1.36) 5,114 0.60 4.83 34 2.14 10.30 5.53 5,762 0.60 4.61 40 1.55 10.22 10.45 4,559 0.60 4.74 19 1.20 $10.09 3.03% $1,593 0.85%(a) 4.47% 3% 2.43% 10.24 10.82 1,706 0.85(a) 4.67 9 1.82 9.68 (1.59) 1,357 0.83 4.60 34 2.39 10.30 5.32 484 0.80 4.41 40 1.80 10.22 10.23 1,440 0.80 4.54 19 1.40 $10.09 2.27% $2,898 1.60%(a) 3.72% 3% 3.18% 10.24 10.00 3,720 1.60(a) 3.92 9 2.57 9.68 (2.28) 4,001 1.54 3.89 34 3.14 10.30 4.64 4,718 1.45 3.76 40 2.55 10.22 9.56 4,915 1.42 3.92 19 2.02 $10.09 2.26% $ 276 1.60%(a) 3.72% 3% 3.18% 10.24 10.00 163 1.60(a) 3.92 9 2.57 9.68 (2.35) 143 1.60 3.83 34 3.14 10.30 4.62 68 1.46 3.75 40 2.55 10.22 9.65 42 1.33 4.01 19 1.93
SEE NOTES TO FINANCIAL STATEMENTS. 297 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- TEXAS INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.35 $0.50 $(0.16) $ 0.34 $(0.50) Year ended 3/31/2001...................... 10.00 0.51 0.35 0.86 (0.51) Year ended 3/31/2000...................... 10.48 0.49 (0.48) 0.01 (0.49) Year ended 3/31/1999...................... 10.50 0.49 0.02 0.51 (0.49) Year ended 3/31/1998...................... 10.18 0.49 0.32 0.81 (0.49) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.35 $0.48 $(0.16) $ 0.32 $(0.48) Year ended 3/31/2001...................... 10.00 0.48 0.35 0.83 (0.48) Year ended 3/31/2000...................... 10.48 0.47 (0.48) (0.01) (0.47) Year ended 3/31/1999...................... 10.50 0.47 0.02 0.49 (0.47) Year ended 3/31/1998...................... 10.18 0.47 0.32 0.79 (0.47) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.35 $0.40 $(0.16) $ 0.24 $(0.40) Year ended 3/31/2001...................... 10.00 0.40 0.35 0.75 (0.40) Year ended 3/31/2000...................... 10.48 0.40 (0.48) (0.08) (0.40) Year ended 3/31/1999...................... 10.50 0.41 0.02 0.43 (0.41) Year ended 3/31/1998...................... 10.18 0.42 0.32 0.74 (0.42) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.35 $0.24 $(0.02) $ 0.22 $(0.39) Year ended 3/31/2001...................... 10.00 0.40 0.35 0.75 (0.40) Year ended 3/31/2000...................... 10.48 0.38 (0.48) (0.10) (0.38) Year ended 3/31/1999#..................... 10.50 0.40 0.02 0.42 (0.40) Year ended 3/31/1998...................... 10.18 0.42 0.32 0.74 (0.42) DISTRIBUTIONS FROM NET REALIZED GAINS ------------- TEXAS INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001...................... -- Year ended 3/31/2000...................... (0.00)## Year ended 3/31/1999...................... (0.04) Year ended 3/31/1998...................... -- INVESTOR A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001...................... -- Year ended 3/31/2000...................... (0.00)## Year ended 3/31/1999...................... (0.04) Year ended 3/31/1998...................... -- INVESTOR B SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001...................... -- Year ended 3/31/2000...................... (0.00)## Year ended 3/31/1999...................... (0.04) Year ended 3/31/1998...................... -- INVESTOR C SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001...................... -- Year ended 3/31/2000...................... (0.00)## Year ended 3/31/1999#..................... (0.04) Year ended 3/31/1998...................... --
--------------- * Effective April 1, 2001, the Texas Intermediate Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.84% to 4.87%. Investor A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.59% to 4.62%. Investor B Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.84% to 3.87%. Investor C Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.84% to 3.87%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. ## Amount represents less than $0.01 per share. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 298 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS --------------------------------------------------------------------------------------------------------------------- $(0.50) $10.19 3.36% $265,882 0.50%(a) 4.87% 5% 0.72% (0.51) 10.35 8.78 286,949 0.50(a) 5.00 6 0.70 (0.49) 10.00 0.17 326,323 0.50(a) 4.84 33 0.72 (0.53) 10.48 4.98 391,431 0.50 4.66 22 0.68 (0.49) 10.50 8.09 385,770 0.50 4.74 19 0.75 $(0.48) $10.19 3.10% $ 4,813 0.75%(a) 4.62% 5% 0.97% (0.48) 10.35 8.52 4,346 0.75(a) 4.75 6 0.95 (0.47) 10.00 (0.06) 6,075 0.73(a) 4.61 33 0.97 (0.51) 10.48 4.77 6,909 0.70 4.46 22 0.93 (0.47) 10.50 7.87 2,666 0.70 4.54 19 0.95 $(0.40) $10.19 2.33% $ 2,021 1.50%(a) 3.87% 5% 1.72% (0.40) 10.35 7.71 2,145 1.50(a) 4.00 6 1.70 (0.40) 10.00 (0.74) 2,005 1.42(a) 3.92 33 1.72 (0.45) 10.48 4.15 2,137 1.30 3.86 22 1.68 (0.42) 10.50 7.34 2,184 1.20 4.04 19 1.45 $(0.39) $10.18 2.16% $ 58 1.50%(a) 3.87% 5% 1.72% (0.40) 10.35 7.69 3 1.50(a) 4.00 6 1.70 (0.38) 10.00 (0.86) 3 1.50(a) 3.84 33 1.72 (0.44) 10.48 4.14 3 1.33 3.83 22 1.68 (0.42) 10.50 7.34 293 1.20 4.04 19 1.45
SEE NOTES TO FINANCIAL STATEMENTS. 299 NATIONS FUNDS FINANCIAL HIGHLIGHTS For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- TEXAS MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.06 $0.48 $(0.17) $ 0.31 $(0.48) Year ended 3/31/2001...................... 9.56 0.49 0.50 0.99 (0.49) Year ended 3/31/2000#..................... 10.11 0.48 (0.55) (0.07) (0.48) Year ended 3/31/1999...................... 10.04 0.46 0.07 0.53 (0.46) Year ended 3/31/1998#..................... 9.48 0.48 0.56 1.04 (0.48) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.06 $0.45 $(0.17) $ 0.28 $(0.45) Year ended 3/31/2001...................... 9.56 0.47 0.50 0.97 (0.47) Year ended 3/31/2000#..................... 10.11 0.45 (0.55) (0.10) (0.45) Year ended 3/31/1999...................... 10.04 0.44 0.07 0.51 (0.44) Year ended 3/31/1998#..................... 9.48 0.46 0.56 1.02 (0.46) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.06 $0.38 $(0.17) $ 0.21 $(0.38) Year ended 3/31/2001...................... 9.56 0.39 0.51 0.90 (0.40) Year ended 3/31/2000#..................... 10.11 0.39 (0.55) (0.16) (0.39) Year ended 3/31/1999...................... 10.04 0.38 0.07 0.45 (0.38) Year ended 3/31/1998#..................... 9.48 0.39 0.56 0.95 (0.39) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.06 $0.35 $(0.02) $ 0.33 $(0.40) Year ended 3/31/2001...................... 9.56 0.39 0.51 0.90 (0.40) Year ended 3/31/2000#..................... 10.11 0.38 (0.55) (0.17) (0.38) Year ended 3/31/1999...................... 10.04 0.38 0.07 0.45 (0.38) Year ended 3/31/1998#..................... 9.48 0.40 0.56 0.96 (0.40)
--------------- * Effective April 1, 2001, the Texas Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.71% to 4.77%. Investor A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.46% to 4.52%. Investor B Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.71% to 3.77%. Investor C Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.71% to 3.77%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 300 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS --------------------------------------------------------------------------------------------- $ 9.89 3.11% $7,362 0.60%(a) 4.77% 6% 1.76% 10.06 10.64 8,237 0.60(a) 5.03 10 1.37 9.56 (0.63) 7,868 0.60(a) 4.95 39 1.75 10.11 5.41 9,393 0.60 4.59 34 1.25 10.04 11.12 7,615 0.60(a) 4.83 33 1.07 $ 9.89 2.85% $ 315 0.85%(a) 4.52% 6% 2.01% 10.06 10.37 340 0.85(a) 4.78 10 1.62 9.56 (0.86) 333 0.83(a) 4.72 39 2.00 10.11 5.20 401 0.80 4.39 34 1.50 10.04 10.90 419 0.80(a) 4.63 33 1.27 $ 9.89 2.09% $4,608 1.60%(a) 3.77% 6% 2.76% 10.06 9.55 5,142 1.60(a) 4.03 10 2.37 9.56 (1.56) 5,569 1.54(a) 4.01 39 2.75 10.11 4.53 6,828 1.45 3.74 34 2.25 10.04 10.23 8,804 1.42(a) 4.01 33 1.89 $ 9.99 3.28% $ 21 1.60%(a) 3.77% 6% 2.76% 10.06 9.55 91 1.60(a) 4.03 10 2.37 9.56 (1.62) 84 1.60(a) 3.95 39 2.75 10.11 4.51 84 1.46 3.73 34 2.25 10.04 10.31 80 1.33(a) 4.10 33 1.80
SEE NOTES TO FINANCIAL STATEMENTS. 301 NATIONS FUNDS FINANCIAL HIGHLIGHTS For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- VIRGINIA INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $10.92 $0.50 $(0.13) $ 0.37 $(0.50) Year ended 3/31/2001#..................... 10.51 0.50 0.41 0.91 (0.50) Year ended 3/31/2000#..................... 10.98 0.50 (0.47) 0.03 (0.50) Year ended 3/31/1999...................... 10.92 0.50 0.06 0.56 (0.50) Year ended 3/31/1998...................... 10.59 0.51 0.33 0.84 (0.51) INVESTOR A SHARES Year ended 3/31/2002*#.................... $10.92 $0.47 $(0.13) $ 0.34 $(0.47) Year ended 3/31/2001#..................... 10.51 0.48 0.41 0.89 (0.48) Year ended 3/31/2000#..................... 10.98 0.47 (0.47) 0.00 (0.47) Year ended 3/31/1999#..................... 10.92 0.47 0.07 0.54 (0.48) Year ended 3/31/1998...................... 10.59 0.49 0.33 0.82 (0.49) INVESTOR B SHARES Year ended 3/31/2002*#.................... $10.92 $0.39 $(0.13) $ 0.26 $(0.39) Year ended 3/31/2001#..................... 10.51 0.40 0.41 0.81 (0.40) Year ended 3/31/2000#..................... 10.98 0.40 (0.47) (0.07) (0.40) Year ended 3/31/1999...................... 10.92 0.41 0.06 0.47 (0.41) Year ended 3/31/1998#..................... 10.59 0.44 0.33 0.77 (0.44) INVESTOR C SHARES Year ended 3/31/2002*#.................... $10.92 $0.39 $(0.13) $ 0.26 $(0.39) Year ended 3/31/2001#..................... 10.51 0.40 0.41 0.81 (0.40) Year ended 3/31/2000#..................... 10.98 0.39 (0.47) (0.08) (0.39) Year ended 3/31/1999#..................... 10.92 0.39 0.08 0.47 (0.41) Year ended 3/31/1998#..................... 10.59 0.44 0.33 0.77 (0.44) DISTRIBUTIONS FROM NET REALIZED GAINS ------------- VIRGINIA INTERMEDIATE MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.00)## Year ended 3/31/1999...................... -- Year ended 3/31/1998...................... -- INVESTOR A SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.00)## Year ended 3/31/1999#..................... -- Year ended 3/31/1998...................... -- INVESTOR B SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.00)## Year ended 3/31/1999...................... -- Year ended 3/31/1998#..................... -- INVESTOR C SHARES Year ended 3/31/2002*#.................... $ -- Year ended 3/31/2001#..................... -- Year ended 3/31/2000#..................... (0.00)## Year ended 3/31/1999#..................... -- Year ended 3/31/1998#..................... --
--------------- * Effective April 1, 2001, the Virginia Intermediate Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.49% to 4.58%. Investor A Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 4.24% to 4.33%. Investor B Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.49% to 3.58%. Investor C Shares -- increase net investment income per share by $0.01, decrease net realized and unrealized gains or losses per share by $0.01 and increase the ratio of net investment income to average net assets from 3.49% to 3.58%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. ## Amount represents less than $0.01 per share. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 302 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS ----------------------------------------------------------------------------------------------------------------------- $(0.50) $10.79 3.44% $237,459 0.50%(a) 4.58% 10% 0.72% (0.50) 10.92 8.92 252,741 0.50 4.73 9 0.70 (0.50) 10.51 0.29 228,698 0.50(a) 4.66 23 0.73 (0.50) 10.98 5.21 227,299 0.50(a) 4.54 5 0.70 (0.51) 10.92 8.12 170,969 0.50(a) 4.77 21 0.74 $(0.47) $10.79 3.18% $ 45,678 0.75%(a) 4.33% 10% 0.97% (0.48) 10.92 8.65 43,655 0.75 4.48 9 0.95 (0.47) 10.51 0.06 46,663 0.73(a) 4.43 23 0.98 (0.48) 10.98 5.00 56,733 0.70(a) 4.34 5 0.95 (0.49) 10.92 7.91 54,080 0.70(a) 4.57 21 0.94 $(0.39) $10.79 2.40% $ 8,987 1.50%(a) 3.58% 10% 1.72% (0.40) 10.92 7.85 8,859 1.50 3.73 9 1.70 (0.40) 10.51 (0.63) 9,073 1.41(a) 3.75 23 1.73 (0.41) 10.98 4.38 10,296 1.30(a) 3.74 5 1.70 (0.44) 10.92 7.37 9,643 1.20(a) 4.07 21 1.44 $(0.39) $10.79 2.41% $ 869 1.50%(a) 3.58% 10% 1.72% (0.40) 10.92 7.84 817 1.50 3.73 9 1.70 (0.39) 10.51 (0.71) 759 1.50(a) 3.66 23 1.73 (0.41) 10.98 4.36 1,100 1.34(a) 3.70 5 1.70 (0.44) 10.92 7.37 1,949 1.20(a) 4.07 21 1.44
SEE NOTES TO FINANCIAL STATEMENTS. 303 NATIONS FUNDS FINANCIAL HIGHLIGHTS For a share outstanding throughout each year.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME ------------------------------------------------------------------------- VIRGINIA MUNICIPAL BOND PRIMARY A SHARES Year ended 3/31/2002*#.................... $9.83 $0.48 $(0.13) $ 0.35 $(0.48) Year ended 3/31/2001#..................... 9.45 0.49 0.37 0.86 (0.48) Year ended 3/31/2000#..................... 9.99 0.46 (0.54) (0.08) (0.46) Year ended 3/31/1999...................... 9.95 0.47 0.04 0.51 (0.47) Year ended 3/31/1998...................... 9.40 0.47 0.55 1.02 (0.47) INVESTOR A SHARES Year ended 3/31/2002*#.................... $9.82 $0.46 $(0.14) $ 0.32 $(0.45) Year ended 3/31/2001#..................... 9.44 0.45 0.40 0.85 (0.47) Year ended 3/31/2000#..................... 9.99 0.39 (0.55) (0.16) (0.39) Year ended 3/31/1999#..................... 9.95 0.45 0.04 0.49 (0.45) Year ended 3/31/1998#..................... 9.40 0.45 0.55 1.00 (0.45) INVESTOR B SHARES Year ended 3/31/2002*#.................... $9.83 $0.38 $(0.13) $ 0.25 $(0.38) Year ended 3/31/2001#..................... 9.45 0.39 0.38 0.77 (0.39) Year ended 3/31/2000#..................... 9.99 0.38 (0.54) (0.16) (0.38) Year ended 3/31/1999...................... 9.95 0.38 0.04 0.42 (0.38) Year ended 3/31/1998#..................... 9.40 0.39 0.55 0.94 (0.39) INVESTOR C SHARES Year ended 3/31/2002*#.................... $9.83 $0.38 $(0.14) $ 0.24 $(0.38) Year ended 3/31/2001#..................... 9.45 0.29 0.48 0.77 (0.39) Year ended 3/31/2000#..................... 9.99 0.38 (0.54) (0.16) (0.38) Year ended 3/31/1999...................... 9.95 0.37 0.04 0.41 (0.37) Year ended 3/31/1998 #.................... 9.40 0.40 0.55 0.95 (0.40)
--------------- * Effective April 1, 2001, the Virginia Municipal Bond Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended March 31, 2002 on each of the classes was: Primary A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.84% to 4.87%. Investor A Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 4.59% to 4.62%. Investor B Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.84% to 3.87%. Investor C Shares -- increase net investment income per share by $0.00, decrease net realized and unrealized gains or losses per share by $0.00 and increase the ratio of net investment income to average net assets from 3.84% to 3.87%. Per share amounts and ratios for the period ended March 31, 2001 have not been restated to reflect this change in presentation. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. # Per share net investment income has been calculated using the monthly average shares method. (a)The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 304 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS ------------------------------------------------------------------------------------------------------- $9.70 3.59% $22,474 0.60%(a) 4.87% 13% 1.17% 9.83 9.46 19,709 0.60 5.11 17 1.07 9.45 (0.69) 16,378 0.60 4.87 21 1.35 9.99 5.18 12,992 0.60(a) 4.66 11 1.11 9.95 11.11 11,026 0.59(a) 4.86 9 0.96 $9.69 3.34% $ 1,486 0.85%(a) 4.62% 13% 1.42% 9.82 9.20 1,016 0.85 4.86 17 1.32 9.44 (1.02) 590 0.83 4.64 21 1.60 9.99 4.98 965 0.80(a) 4.46 11 1.36 9.95 10.88 1,222 0.79(a) 4.66 9 1.16 $9.70 2.57% $ 8,991 1.60%(a) 3.87% 13% 2.17% 9.83 8.38 10,570 1.60 4.11 17 2.07 9.45 (1.61) 10,608 1.53 3.94 21 2.35 9.99 4.30 13,499 1.45(a) 3.81 11 2.11 9.95 10.21 13,082 1.41(a) 4.04 9 1.78 $9.69 2.46% $ 55 1.60%(a) 3.87% 13% 2.17% 9.83 8.35 54 1.60 4.11 17 2.07 9.45 (1.58) 3 1.60 3.87 21 2.35 9.99 4.21 3 1.45(a) 3.81 11 2.11 9.95 10.31 3 1.32(a) 4.13 9 1.69
SEE NOTES TO FINANCIAL STATEMENTS. 305 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS Nations Fund Trust (the "Trust"), Nations Reserves ("Reserves") and Nations Funds Trust ("Funds Trust") are each registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. At March 31, 2002, the Trust offered thirty-three separate portfolios, Reserves offered thirteen separate portfolios and Funds Trust offered eighteen separate portfolios. These financial statements pertain only to the municipal bond portfolios of the Trust, Reserves and Funds Trust: Short-Term Municipal Income Fund, Intermediate Municipal Bond Fund, Municipal Income Fund, California Municipal Bond Fund, Florida Intermediate Municipal Bond Fund, Florida Municipal Bond Fund, Georgia Intermediate Municipal Bond Fund, Georgia Municipal Bond Fund, Kansas Municipal Income Fund, Maryland Intermediate Municipal Bond Fund, Maryland Municipal Bond Fund, North Carolina Intermediate Municipal Bond Fund, North Carolina Municipal Bond Fund, South Carolina Intermediate Municipal Bond Fund, South Carolina Municipal Bond Fund, Tennessee Intermediate Municipal Bond Fund, Tennessee Municipal Bond Fund, Texas Intermediate Municipal Bond Fund, Texas Municipal Bond Fund, Virginia Intermediate Municipal Bond Fund and Virginia Municipal Bond Fund (each a "Fund" and collectively, the "Funds"). Financial statements for the other portfolios of the Trust, Reserves and Funds Trust are presented under separate cover. The Funds currently offer four classes of shares: Primary A Shares, Investor A Shares, Investor B Shares and Investor C Shares. Shareholders of a Fund have equal voting rights on matters affecting all shareholders of the Fund. In addition, each class of shares of a Fund has exclusive voting rights on matters that relate solely to that class and separate voting rights on matters in which the interests of one class differ from the interests of any other class. 1. SIGNIFICANT ACCOUNTING POLICIES The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. Securities valuation: Securities are generally valued by an independent pricing service. These valuations are based upon a matrix pricing system and/or appraisals which take into consideration such factors as yields, security prices, maturities, redemption features and credit ratings on comparable securities. Certain securities may be valued based upon quotes provided by one or more principal market makers. Restricted securities, securities for which market quotations are not readily available, and certain other assets may be valued under procedures adopted by the Boards of Trustees. Short-term investments that mature in 60 days or less are valued at amortized cost, which approximates current market value. Investments in other Nations Funds are valued at their net asset value determined as of the close of the New York Stock Exchange on the valuation date. A Fund's municipal holdings may include obligations of issuers that rely in whole or in part for payment of interest and principal on state specific revenues, real property taxes, revenues from particular institutions, such as healthcare institutions, or obligations secured by mortgages on real property. Consequently, the impact of changes in state law or regulations or the economic conditions in a particular state should be considered. When-issued/delayed delivery securities: Securities purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after trade date; interest income is not accrued until settlement date. At the time a Fund enters into such transactions, it instructs its custodian to segregate assets with a current value at least equal to the amount of its when-issued or delayed- delivery purchase commitments. Securities transactions and investment income: Securities transactions are recorded on trade date. Realized gains and losses are computed based on the specific identification of securities sold. Interest income, adjusted for accretion of discounts and amortization of premiums, is earned from settlement date and recorded on an accrual basis. Dividend income from affiliated funds is recorded on ex-dividend date. Each Fund's investment income and realized and unrealized gains and losses are allocated among its share classes based upon the relative net assets of each class of shares. Effective April 1, 2001, the Funds have adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing market discount on debt securities. Prior to April 1, 2001, the Funds did not amortize market discount on debt 306 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) securities. The cumulative effect of this accounting change had no impact on total net assets of the Funds, but resulted in the following increase in cost of securities and a corresponding decrease in net unrealized appreciation/(depreciation), based on securities held by the Funds on April 1, 2001:
DECREASE IN INCREASE IN NET UNREALIZED COST OF APPRECIATION/ SECURITIES (DEPRECIATION) (000) (000) ---------------------------- Short-Term Municipal Income....... $ 73 $ (73) Intermediate Municipal Bond....... 1,254 (1,254) Municipal Income.................. 725 (725) California Municipal Bond......... 146 (146) Florida Intermediate Municipal Bond............................ 142 (142) Florida Municipal Bond............ 97 (97) Georgia Intermediate Municipal Bond............................ 89 (89) Georgia Municipal Bond............ 16 (16) Kansas Municipal Income........... 33 (33) Maryland Intermediate Municipal Bond............................ 108 (108) Maryland Municipal Bond........... 32 (32) North Carolina Intermediate Municipal Bond.................. 399 (399) North Carolina Municipal Bond..... 56 (56) South Carolina Intermediate Municipal Bond.................. 646 (646) South Carolina Municipal Bond..... 52 (52) Tennessee Intermediate Municipal Bond............................ 10 (10) Tennessee Municipal Bond.......... 7 (7) Texas Intermediate Municipal Bond............................ 144 (144) Texas Municipal Bond.............. 15 (15) Virginia Intermediate Municipal Bond............................ 480 (480) Virginia Municipal Bond........... 19 (19)
The effect of this change for the year ended March 31, 2002 was to increase/(decrease) net investment income, increase/(decrease) net unrealized appreciation/ (depreciation) and increase/(decrease) net realized gains/ (losses) as stated below. The statement of changes in net assets and financial highlights for prior periods have not been restated to reflect this change in presentation.
INCREASE/ INCREASE/ (DECREASE) (DECREASE) IN NET INCREASE/ IN NET UNREALIZED (DECREASE) IN INVESTMENT APPRECIATION/ NET REALIZED INCOME (DEPRECIATION) GAINS/(LOSSES) (000) (000) (000) -------------------------------------------- Short-Term Municipal Income.............. $ 101 $ (91) $ (10) Intermediate Municipal Bond................ 1,023 (757) (266) Municipal Income...... 512 (253) (259) California Municipal Bond................ 44 (10) (34) Florida Intermediate Municipal Bond...... 90 (75) (15) Florida Municipal Bond................ 67 (42) (25) Georgia Intermediate Municipal Bond...... 55 (54) (1) Georgia Municipal Bond................ 14 (5) (9) Kansas Municipal Income.............. 9 (9) --* Maryland Intermediate Municipal Bond...... 93 (58) (35) Maryland Municipal Bond................ 23 (23) --* North Carolina Intermediate Municipal Bond...... 191 (137) (54) North Carolina Municipal Bond...... 32 (28) (4) South Carolina Intermediate Municipal Bond...... 345 (238) (107) South Carolina Municipal Bond...... 37 (23) (14) Tennessee Intermediate Municipal Bond...... 6 (6) -- Tennessee Municipal Bond................ 4 (4) --* Texas Intermediate Municipal Bond...... 89 (88) (1) Texas Municipal Bond................ 9 (7) (2) Virginia Intermediate Municipal Bond...... 266 (174) (92) Virginia Municipal Bond................ 12 (9) (3)
--------------- *Amount represents less than $500. Dividends and distributions to shareholders: It is the policy of each Fund to declare dividends from net investment income daily and to pay such dividends monthly. Each Fund will distribute net realized capital gains (including net short-term capital gains) at least annually after the fiscal year in which the capital gains were earned, unless offset by any available capital loss carryforward. Income distributions and capital gain 307 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) distributions on a Fund level are determined in accordance with federal income tax regulations which may differ from accounting principles generally accepted in the United States of America. Federal income tax: Each Fund intends to continue to qualify as a regulated investment company by complying with the applicable requirements of the Internal Revenue Code of 1986, as amended, and by distributing substantially all of its earnings to its shareholders. Therefore, no provision is made for federal income or excise taxes. Expenses: General expenses of the Trust, Reserves and Funds Trust are allocated to the Funds based upon their relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to a Fund or class of shares are charged to such Fund or class. 2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED PARTY TRANSACTIONS Each of the Trust, Reserves and Funds Trust has entered into an investment advisory agreement (the "Investment Advisory Agreements") with Banc of America Advisors, LLC ("BA Advisors"), a wholly-owned subsidiary of Bank of America, N.A. ("Bank of America"), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, pursuant to which BA Advisors provides investment advisory services to the Funds. Under the terms of the Investment Advisory Agreements, BA Advisors is entitled to receive an advisory fee, calculated daily and payable monthly, based on the following annual rates multiplied by the average daily net assets of each Fund:
ANNUAL RATE ------ Short-Term Municipal Income..................... 0.30% Intermediate Municipal Bond and eight single-state Intermediate Municipal Bond Funds......................................... 0.40% Municipal Income and ten single-state Municipal Bond Funds.................................... 0.50%
Each of the Trust, Reserves and Funds Trust has entered into a sub-advisory agreement with BA Advisors and Banc of America Capital Management, LLC ("BACAP"), a wholly-owned subsidiary of Bank of America, pursuant to which BACAP is entitled to receive a sub-advisory fee from BA Advisors at the maximum annual rate of 0.07% of each Fund's average daily net assets. Stephens Inc. ("Stephens") and BA Advisors serve as co-administrators of the Trust, Reserves and Funds Trust. Under the co-administration agreements, Stephens and BA Advisors are currently entitled to receive a combined fee, computed daily and paid monthly, at the maximum annual rate of 0.22% of each Fund's average daily net assets. The Bank of New York ("BNY") serves as sub-administrator of the Trust, Reserves and Funds Trust pursuant to agreements with BA Advisors. For the year ended March 31, 2002, Stephens and BA Advisors earned 0.05% and 0.11%, respectively, of the Funds' average daily net assets for their co-administration services. BA Advisors and/or the sub-adviser and/or Stephens may, from time to time, reduce their fees payable by each Fund. During the year ended March 31, 2002 and until July 31, 2002, BA Advisors and/or the sub-adviser and/or Stephens have agreed to reimburse expenses and/or waive fees to the extent that total expenses (excluding shareholder servicing and distribution fees), as a percentage of the respective Fund's average daily net assets, exceed the following annual rates:
ANNUAL RATE ------ Short-Term Municipal Income..................... 0.40% Intermediate Municipal Bond and eight single-state Intermediate Municipal Bond Funds......................................... 0.50% Municipal Income and ten single-state Municipal Bond Funds.................................... 0.60%
BNY serves as the custodian of the Trust's, Reserves' and Funds Trust's assets. PFPC Inc. ("PFPC") serves as the transfer agent for the Funds' shares. Bank of America serves as the sub-transfer agent for the Primary A Shares of the Funds. For the year ended March 31, 2002, Bank of America earned approximately $37,452 for providing such services. Stephens also serves as distributor of the Funds' shares. For the year ended March 31, 2002, the Funds were informed that the distributor received $560,923 in front-end sales charges for sales of Investor A Shares and $154,151 in contingent deferred sales charges from redemption of shares which were subject to such charges. A substantial portion of these fees is paid to affiliates of Bank of America. No officer, director or employee of Bank of America, BA Advisors or BACAP, or any affiliate thereof, receives any compensation from the Trust, Reserves and Funds Trust for serving as Trustee or Officer of the Trust, Reserves and Funds Trust. 308 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) The Trust's, Reserves' and Funds Trust's eligible Trustees may participate in non-qualified deferred compensation and retirement plans which may be terminated at any time. All benefits provided under these plans are unfunded and any payments to plan participants are paid solely out of the Funds' assets. Income earned on each plan participant's deferral account is based on the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, on the rate of return of Nations Treasury Fund, a portfolio of Nations Fund, Inc., another registered investment company in the Nations' Funds family. The expense for the deferred compensation and retirement plans is included in "Trustees' fees and expenses" in the Statements of operations. Effective January 1, 2002, the retirement plan was terminated. The Trust's, Reserves' and Funds Trust's eligible Trustees had the option of a rollover into the deferred compensation plan on January 1, 2002 or a lump sum distribution, including interest, on January 1, 2003. Certain Funds have made daily investments of cash balances in Nations Tax Exempt Fund, a portfolio of the Trust, pursuant to an exemptive order received from the Securities and Exchange Commission. The income earned by each Fund from such investments is included in its Statement of operations as "Dividend income from affiliated funds". A significant portion of each Fund's Primary A Shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion. 3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS The Trust, Reserves and Funds Trust each has adopted shareholder servicing plans and distribution plans for the Investor A, Investor B and Investor C Shares of each Fund. The shareholder servicing plans permit the Funds to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Funds to compensate or reimburse the distributor and/or selling agents for activities or expenses primarily intended to result in the sale of the classes' shares. Payments are made at an annual rate, as a percentage of average daily net assets, set from time to time by the Boards of Trustees, and are charged as expenses of each Fund directly to the applicable class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BA Advisors. For the year ended March 31, 2002, the annual rates in effect and plan limits, as a percentage of average daily net assets, were as follows:
CURRENT PLAN RATE LIMIT --------------- Investor A Combined Distribution and Shareholder Servicing Plan........... 0.25%* 0.25% Investor B and Investor C Shareholder Servicing Plans...................... 0.25% 0.25% Investor B and Investor C Distribution Plans................................ 0.75% 0.75%
--------------- *Short-Term Municipal Income pays its shareholder servicing fees under a separate shareholder servicing plan. 4. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, excluding long-term U.S. government securities and short-term investments, for the year ended March 31, 2002 were as follows:
PURCHASES SALES (000) (000) --------------------- Short-Term Municipal Income..... $419,157 $ 31,183 Intermediate Municipal Bond..... 202,535 166,251 Municipal Income................ 119,056 171,240 California Municipal Bond....... 37,754 16,728 Florida Intermediate Municipal Bond.......................... 36,055 41,494 Florida Municipal Bond.......... 7,000 21,939 Georgia Intermediate Municipal Bond.......................... 22,996 9,330 Georgia Municipal Bond.......... 7,417 8,944 Kansas Municipal Income......... 14,004 21,510 Maryland Intermediate Municipal Bond.......................... 50,246 32,038 Maryland Municipal Bond......... 3,598 2,931 North Carolina Intermediate Municipal Bond................ 26,895 25,024 North Carolina Municipal Bond... 498 3,933 South Carolina Intermediate Municipal Bond................ 22,052 19,635 South Carolina Municipal Bond... 1,966 10,197 Tennessee Intermediate Municipal Bond.......................... 6,019 -- Tennessee Municipal Bond........ 259 1,441 Texas Intermediate Municipal Bond.......................... 13,301 29,100 Texas Municipal Bond............ 795 1,522 Virginia Intermediate Municipal Bond.......................... 53,155 30,727 Virginia Municipal Bond......... 7,678 4,493
There were no purchases and sales of long-term U.S. government securities for the year ended March 31, 2002. 309 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) 5. SHARES OF BENEFICIAL INTEREST As of March 31, 2002, an unlimited number of shares of beneficial interest without par value were authorized for each of the Trust, Reserves and Funds Trust. The Trust's, Reserves' and Funds Trust's Declarations of Trust authorize the Boards of Trustees to classify or reclassify any authorized but unissued shares into one or more additional classes or series of shares. See Schedules of capital stock activity. 6. LINES OF CREDIT The Trust, Reserves and Funds Trust each participate with other Nations Funds in a $1 billion uncommitted line of credit provided by BNY under a line of credit agreement (the "Agreement"). Advances under the Agreement are taken primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest on borrowings is payable at a specified Federal Funds rate plus 0.50% on an annualized basis. Each participating Fund maintains a ratio of net assets (not including amounts borrowed pursuant to the Agreement) to the aggregate amount of indebtedness pursuant to the Agreement of no less than 4 to 1. At March 31, 2002, there were no loans outstanding under this Agreement. For the year ended March 31, 2002, borrowings by the Funds under the Agreement were as follows:
AVERAGE AMOUNT AVERAGE OUTSTANDING INTEREST FUND (000) RATE ----------------------------------------------------------- Short-Term Municipal Income....... $ --* 5.07% Intermediate Municipal Bond....... 129 4.27 Municipal Income.................. 141 4.14 Florida Intermediate Municipal Bond............................ 18 3.54 Florida Municipal Bond............ 37 2.93 Georgia Intermediate Municipal Bond............................ 3 3.30 Georgia Municipal Bond............ 9 2.69 Kansas Municipal Income........... 15 3.49 Maryland Intermediate Municipal Bond............................ 7 4.35 Maryland Municipal Bond........... 1 2.30 North Carolina Intermediate Bond............................ 5 2.54 North Carolina Municipal Bond..... --* 4.97 South Carolina Intermediate Bond............................ 35 2.69 South Carolina Municipal Bond..... 12 3.46 Tennessee Municipal Bond.......... 3 3.57 Texas Intermediate Municipal Bond............................ 59 3.56 Texas Municipal Bond.............. 2 2.23 Virginia Intermediate Municipal Bond............................ 28 4.31 Virginia Municipal Bond........... 2 2.39
--------------- * Amount represents less than $500. The average amount outstanding was calculated based on daily balances in the period. 310 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) 7. INCOME TAXES Information on the tax components of capital is as follows:
NET TAX UNDISTRIBUTED UNDISTRIBUTED COST OF UNREALIZED ORDINARY LONG-TERM INVESTMENTS GROSS TAX GROSS TAX APPRECIATION/ INCOME/ GAINS/ FOR TAX UNREALIZED UNREALIZED (DEPRECIATION) TAX EXEMPT (ACCUMULATED PURPOSES APPRECIATION DEPRECIATION ON INVESTMENTS INCOME CAPITAL LOSS) FUND (000) (000) (000) (000) (000) (000) --------------------------------------------------------------------------------------------------------------------------------- Short-Term Municipal Income.......... $ 537,556 $ 2,358 $ (2,800) $ (442) $ -- $ (413) Intermediate Municipal Bond.......... 1,163,650 32,327 (12,046) 20,281 705 228 Municipal Income..................... 829,341 42,665 (15,896) 26,769 1,031 (1,236) California Municipal Bond............ 209,209 8,363 (1,248) 7,115 417 (74) Florida Intermediate Municipal Bond................................. 219,480 6,791 (677) 6,114 -- (1,048) Florida Municipal Bond............... 119,847 7,937 (92) 7,845 183 435 Georgia Intermediate Municipal Bond................................. 149,573 5,262 (726) 4,536 109 (1,182) Georgia Municipal Bond............... 24,443 966 (109) 857 78 (555) Kansas Municipal Income.............. 98,001 3,103 (625) 2,478 70 211 Maryland Intermediate Municipal Bond................................. 193,556 5,872 (808) 5,064 21 (643) Maryland Municipal Bond.............. 37,007 1,792 (60) 1,732 29 (646) North Carolina Intermediate Municipal Bond................................. 187,235 6,765 (580) 6,185 191 (1,463) North Carolina Municipal Bond........ 39,360 1,904 (126) 1,778 13 (1,401) South Carolina Intermediate Municipal Bond................................. 225,042 9,852 (693) 9,159 -- (239) South Carolina Municipal Bond........ 24,486 1,439 (17) 1,422 20 (102) Tennessee Intermediate Municipal Bond................................. 52,071 1,368 (128) 1,240 4 (359) Tennessee Municipal Bond............. 8,495 403 (30) 373 25 (58) Texas Intermediate Municipal Bond.... 261,087 10,160 (557) 9,603 215 (3,798) Texas Municipal Bond................. 11,517 762 (11) 751 30 (294) Virginia Intermediate Municipal Bond................................. 284,842 10,344 (1,004) 9,340 10 (1,032) Virginia Municipal Bond.............. 31,757 1,247 (281) 966 60 (586)
At March 31, 2002, the following Funds had available for federal income tax purposes unused capital losses as follows:
EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING IN 2003 IN 2004 IN 2005 IN 2008 IN 2009 IN 2010 FUND (000) (000) (000) (000) (000) (000) ----------------------------------------------------------------------------------------------------------------------------- Short-Term Municipal Income................................. -- $25 -- -- $ 360 $15 Municipal Income............................................ -- -- -- $502 734 -- Florida Intermediate Municipal Bond......................... -- 285 $22 717 24 -- Georgia Intermediate Municipal Bond......................... -- -- -- 516 608 58 Georgia Municipal Bond...................................... -- -- -- 11 544 -- Maryland Intermediate Municipal Bond........................ -- -- -- -- 643 -- Maryland Municipal Bond..................................... -- -- -- 32 614 -- North Carolina Intermediate Municipal Bond.................. -- -- -- -- 1,463 -- North Carolina Municipal Bond............................... $425 -- 207 -- 769 -- South Carolina Intermediate Municipal Bond.................. -- -- -- -- 239 -- South Carolina Municipal Bond............................... -- -- -- -- 102 -- Tennessee Intermediate Municipal Bond....................... -- -- -- 315 44 -- Tennessee Municipal Bond.................................... -- -- -- 48 10 -- Texas Intermediate Municipal Bond........................... -- -- -- 338 3,460 -- Texas Municipal Bond........................................ 132 -- -- 75 87 -- Virginia Intermediate Municipal Bond........................ -- -- -- -- 1,032 -- Virginia Municipal Bond..................................... 77 12 63 139 295 --
311 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) During the year ended March 31, 2002, the following Funds utilized capital losses as follows:
CAPITAL LOSSES UTILIZED FUND (000) -------------------------------------------------------- Intermediate Municipal Bond................... $2,772 Municipal Income.............................. 900 Florida Intermediate Municipal Bond........... 213 Georgia Municipal Bond........................ 427 Maryland Intermediate Municipal Bond.......... 744 Maryland Municipal Bond....................... 117 North Carolina Intermediate Municipal Bond.... 415 North Carolina Municipal Bond................. 208 South Carolina Intermediate Municipal Bond.... 315 South Carolina Municipal Bond................. 479 Tennessee Municipal Bond...................... 40 Texas Intermediate Municipal Bond............. 698 Texas Municipal Bond.......................... 92 Virginia Intermediate Municipal Bond.......... 1,153 Virginia Municipal Bond....................... 151
Under the current tax law, capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For the fiscal year ended March 31, 2002, the following Funds elected to defer losses occurring between November 1, 2001 and March 31, 2002 under these rules, as follows:
CAPITAL LOSSES DEFERRED FUND (000) -------------------------------------------------------- Short-Term Municipal Income................... $13 California Municipal Bond..................... 74
Such deferred losses will be treated as arising on the first day of the fiscal year ending March 31, 2003. The tax composition of dividends (other than return of capital dividends for the year) was as follows:
LONG-TERM TAX-EXEMPT ORDINARY CAPITAL FUND INCOME INCOME GAINS -------------------------------------------------------------- Short-Term Municipal Income................... $ 8,960 $ 29 -- Intermediate Municipal Bond..................... 55,063 360 -- Municipal Income........... 45,154 186 -- California Municipal Bond..................... 9,229 16 $760 Florida Intermediate Municipal Bond........... 10,953 33 -- Florida Municipal Bond..... 6,464 115 566 Georgia Intermediate Municipal Bond........... 6,916 59 -- Georgia Municipal Bond..... 1,200 6 -- Kansas Municipal Income.... 4,611 70 82 Maryland Intermediate Municipal Bond........... 8,947 48 -- Maryland Municipal Bond.... 1,606 67 -- North Carolina Intermediate Municipal Bond........... 9,040 1 -- North Carolina Municipal Bond..................... 1,760 5 -- South Carolina Intermediate Municipal Bond........... 11,743 112 -- South Carolina Municipal Bond..................... 1,298 31 -- Tennessee Intermediate Municipal Bond........... 2,206 6 -- Tennessee Municipal Bond... 421 -- -- Texas Intermediate Municipal Bond........... 13,777 55 -- Texas Municipal Bond....... 600 -- -- Virginia Intermediate Municipal Bond........... 13,543 82 -- Virginia Municipal Bond.... 1,575 -- --
Certain reclassifications are made to each Fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under federal income tax regulations. These reclassifications are due primarily to different book and tax accounting for market discount and use of the tax accounting practice known as equalization. 8. REORGANIZATIONS CONVERSION OF COMMON TRUST FUNDS On July 14, 2000, certain Funds, as listed below (each an "Acquiring Fund"), acquired the assets of certain common trust funds, managed by Bank of America, also listed below (each an "Acquired Fund"), in a tax-free exchange for 312 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) shares of the Acquiring Fund. The number and value of shares issued by the Acquiring Fund are presented in the Schedules of capital stock activity. Net assets and unrealized appreciation as of the conversion date were as follows:
TOTAL NET ASSETS TOTAL NET ASSETS TOTAL NET ASSETS OF ACQUIRING FUND ACQUIRED FUND OF ACQUIRED FUND OF ACQUIRING FUND AFTER CONVERSION UNREALIZED APPRECIATION ACQUIRING FUND ACQUIRED FUND (000) (000) (000) (000) ------------------------------------------------------------------------------------------------------------------ Intermediate Boatmen's Municipal Bond Trust Company Intermediate Tax-Exempt Bond Fund $203,437 $ 854,161 $1,057,598 $175 Intermediate Bank IV Kansas Municipal Bond U.S. Tax Exempt Bond Fund 24,435 854,161 878,596 74 Intermediate BCA High Grade Municipal Bond Tax Exempt Bond Fund 126,314 854,161 980,475 1,523 Municipal Boatmen's Income Trust Company Tax Exempt Bond Fund 332,899 588,608 921,507 12,881
On July 14, 2000, the Kansas Municipal Income Fund, a newly established portfolio, acquired the assets and assumed the liabilities of the Bank of America Common Trust Kansas Tax Exempt Fund, a common trust fund managed by Bank of America, pursuant to a plan of reorganization approved by its shareholders. The acquisition was accomplished by a tax-free exchange of shares of the Kansas Municipal Income Fund in an amount equal to the outstanding shares of the Bank of America Common Trust Kansas Tax Exempt Fund. 9. SUBSEQUENT EVENTS On October 10, 2001, the Board of Trustees of each fund listed in the left column below (each a "Fund") approved an Agreement and Plan of Reorganization (the "Reorganization") pursuant to which a successor fund to each fund shown in the right column (the "Acquiring Fund") will acquire all of the assets and liabilities of each corresponding Fund in exchange for shares of equal value of the Acquiring Fund. On March 27, 2002, shareholders of each Fund approved the Reorganization. The Reorganization occurred and each Fund ceased operations on May 10, 2002. The principal effect of this Reorganization was to transfer each Fund's investment into an investment in a corresponding Acquiring Fund with similar investment objective, principal investment strategies and investment risks.
FUND REORGANIZED INTO A NEWLY CREATED SUCCESSOR FUND: ----------------------------------------------------------------------------------------- Georgia Municipal Bond Georgia Intermediate Municipal Bond Maryland Municipal Bond Maryland Intermediate Municipal Bond North Carolina Municipal Bond North Carolina Intermediate Municipal Bond South Carolina Municipal Bond South Carolina Intermediate Municipal Bond Tennessee Municipal Bond Tennessee Intermediate Municipal Bond Texas Municipal Bond Texas Intermediate Municipal Bond Virginia Municipal Bond Virginia Intermediate Municipal Bond
On October 10, 2001, the Board of Trustees of each fund listed in the left column below (each a "Fund") approved its Reorganization into a newly created successor fund that is substantially identical to the existing Fund. On March 27, 2002, shareholders of each Fund approved the Reorganization. The Reorganization occurred on May 10, 2002. At that time, shares of each Fund were exchanged for shares of equal value of the newly created successor fund. The principal 313 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) effect of this Reorganization was to redomicile the Fund in Delaware, under a Delaware business trust structure that management believes provides greater flexibility and efficiency in certain corporate and organizational matters.
FUND REORGANIZED INTO A NEWLY CREATED SUCCESSOR FUND: ----------------------------------------------------------------------------------------- Georgia Intermediate Municipal Bond Georgia Intermediate Municipal Bond Maryland Intermediate Municipal Bond Maryland Intermediate Municipal Bond North Carolina Intermediate Municipal North Carolina Intermediate Municipal Bond Bond South Carolina Intermediate Municipal South Carolina Intermediate Municipal Bond Bond Tennessee Intermediate Municipal Bond Tennessee Intermediate Municipal Bond Texas Intermediate Municipal Bond Texas Intermediate Municipal Bond Virginia Intermediate Municipal Bond Virginia Intermediate Municipal Bond Short-Term Municipal Income Short-Term Municipal Income Intermediate Municipal Bond Intermediate Municipal Bond Municipal Income Municipal Income Florida Intermediate Municipal Bond Florida Intermediate Municipal Bond Florida Municipal Bond Florida Municipal Bond
On October 10, 2001, the Board of Trustees of the California Municipal Bond Fund (the "Fund") approved its Reorganization into a newly created successor fund that is substantially identical to the existing Fund. On March 27, 2002, the shareholders of the Fund approved the Reorganization. The Reorganization occurred on May 17, 2002. At that time, shares of the Fund were exchanged for shares of equal value of the newly created successor fund. The principal effect of this Reorganization was to redomicile the Fund in Delaware, under a Delaware business trust structure that management believes provides greater flexibility and efficiency in certain corporate and organizational matters. 314 NATIONS FUNDS REPORT OF INDEPENDENT ACCOUNTANTS TO THE SHAREHOLDERS AND TRUSTEES OF NATIONS FUND TRUST, NATIONS RESERVES AND NATIONS FUNDS TRUST In our opinion, the accompanying statements of net assets, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Nations Short-Term Municipal Income Fund, Nations Intermediate Municipal Bond Fund, Nations Municipal Income Fund, Nations California Municipal Bond Fund, Nations Florida Intermediate Municipal Bond Fund, Nations Florida Municipal Bond Fund, Nations Georgia Intermediate Municipal Fund, Nations Georgia Municipal Bond Fund, Nations Kansas Municipal Income Fund, Nations Maryland Intermediate Municipal Bond Fund, Nations Maryland Municipal Bond Fund, Nations North Carolina Intermediate Municipal Bond Fund, Nations North Carolina Municipal Bond Fund, Nations South Carolina Intermediate Municipal Bond Fund, Nations South Carolina Municipal Bond Fund, Nations Tennessee Intermediate Municipal Bond Fund, Nations Tennessee Municipal Bond Fund, Nations Texas Intermediate Municipal Bond Fund, Nations Texas Municipal Bond Fund, Nations Virginia Intermediate Municipal Bond Fund and Nations Virginia Municipal Bond Fund (constituting parts of Nations Fund Trust, Nations Reserves and Nations Funds Trust, hereafter collectively referred to as the "Funds") at March 31, 2002, and the results of each of their operations, the changes in each of their net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at March 31, 2002 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. As discussed in Note 9, effective May 10, 2002 Nations Georgia Municipal Bond Fund, Nations Maryland Municipal Bond Fund, Nations North Carolina Municipal Bond Fund, Nations South Carolina Municipal Bond Fund, Nations Tennessee Municipal Bond Fund, Nations Texas Municipal Bond Fund and Nations Virginia Municipal Bond Fund completed reorganizations pursuant to which all of their assets were acquired and liabilities assumed in exchange for shares of equal value of the acquiring funds and ceased operations. PricewaterhouseCoopers LLP New York, New York May 17, 2002 315 NATIONS FUND TAX INFORMATION (UNAUDITED) For the fiscal year ended March 31, 2002, the following percentage of distributions made from net investment income of the Nations Municipal Bond Funds are exempt for Federal income tax purposes. A portion of the income may also be subject to Federal Alternative Minimum Tax.
FEDERAL EXEMPT FUND PERCENTAGE ---------------------------------------------------------------------------- Short-Term Municipal Income................................. 99.63% Intermediate Municipal Bond................................. 99.35% Municipal Income............................................ 99.59% California Municipal Bond................................... 99.82% Florida Intermediate Municipal Bond......................... 99.37% Florida Municipal Bond...................................... 98.24% Georgia Intermediate Municipal Bond......................... 99.15% Georgia Municipal Bond...................................... 99.48% Kansas Municipal Income..................................... 98.50% Maryland Intermediate Municipal Bond........................ 99.47% Maryland Municipal Bond..................................... 96.00% North Carolina Intermediate Municipal Bond.................. 99.99% North Carolina Municipal Bond............................... 99.69% South Carolina Intermediate Municipal Bond.................. 99.05% South Carolina Municipal Bond............................... 97.70% Tennessee Intermediate Municipal Bond....................... 99.74% Tennessee Municipal Bond.................................... 100.00% Texas Intermediate Municipal Bond........................... 99.60% Texas Municipal Bond........................................ 100.00% Virginia Intermediate Municipal Bond........................ 99.40% Virginia Municipal Bond..................................... 100.00%
For the period April 1, 2002 to May 10, 2002, the following percentage of distributions made from net investment income of the Nations Municipal Bond are exempt for Federal income tax purposes. A portion of the income may also be subject to Federal Alternative Minimum Tax:
FEDERAL EXEMPT FUND PERCENTAGE ---------------------------------------------------------------------------- Georgia Municipal Bond...................................... 95.00% Maryland Municipal Bond..................................... 96.13% North Carolina Municipal Bond............................... 95.00% South Carolina Municipal Bond............................... 90.00% Tennessee Municipal Bond.................................... 100.00% Texas Municipal Bond........................................ 100.00% Virginia Municipal Bond..................................... 99.99%
316 NATIONS FUNDS TAX INFORMATION (CONTINUED) (UNAUDITED) For the fiscal year ended March 31, 2002, the amount of long-term capital gains designated by the Trust, Reserves and Funds Trust were as follows:
FUND TOTAL ---------------------------------------------------------------------- Intermediate Municipal Bond................................. $ 6,736 California Municipal Bond................................... 775,503 Florida Municipal Bond...................................... 615,504 Kansas Municipal Income..................................... 85,771
For the period April 1, 2002 to May 10, 2002, the amount of long-term capital gains designated by the Trust, Reserves, and Funds Trust as follows:
FUND TOTAL ---------------------------------------------------------------------- South Carolina Muni......................................... $ 4,222 Tennessee Muni Bond......................................... 5,655
317 NATIONS FUNDS FUND GOVERNANCE (UNAUDITED) The Boards of Trustees/Directors (the "Boards") of Nations Fund Trust, Nations Fund, Inc., Nations Reserves, Nations Funds Trust and Nations Master Investment Trust (the "Companies") oversee their funds to ensure that they are managed and operated in the interests of shareholders. This annual report may relate to Funds of one or more of the Companies. Please see the introduction for the Notes to financial statements for information about which Funds and which Companies are applicable to this annual report. A majority of the Trustees/Directors ("Board Members") are "independent," meaning that they have no affiliation with Bank of America, N.A., its affiliates, or the funds, apart from the personal investments that most Board Members have made in certain of the funds as private individuals. The Board Members bring distinguished backgrounds in government, business, academia and public service to their task of working with Company officers to establish the policies and oversee the activities of the funds. Although all Board Members are charged with the fiduciary duty of protecting shareholders interests when supervising and overseeing the management and operations of the Companies, the independent Board Members have particular responsibilities for assuring that the Companies are managed in the best interests of fund shareholders. The following table provides basic information about the Board Members and Officers of the Companies. The mailing address of each Board Member is c/o Nations Funds, 101 South Tryon Street, 33rd Floor, Charlotte, North Carolina 28255. Each Board Member and Officer serves in identical capacities for each Company (except for Mr. Carmichael, who serves in an advisory capacity for certain Companies) and serves an indefinite term, subject to retirement from service as required (pursuant to each Company's retirement policy) at the end of the calendar year in which a Board Member turns 72, provided that any Board Member who served on any of the Boards as of February 22, 2001, and who reached the age of 72 no later than the end of that calendar year, may continue to serve until the end of the calendar year in which such Trustee reaches age 75 and may continue to serve for successive annual periods thereafter upon the vote of a majority of the other Board Members.
NAME, AGE AND POSITION TERM OF OFFICE AND PRINCIPAL OCCUPATION(S) DURING NUMBER OF FUNDS IN WITH THE COMPANIES LENGTH OF TIME SERVED THE PAST FIVE YEARS FUND COMPLEX OVERSEEN ------------------------------------------------------------------------------------------------------------------ INDEPENDENT BOARD MEMBERS William P. Carmichael Indefinite term; Senior Managing Director of The 41 (50 others in an Age: 58 Board Member since Succession Fund (a company formed advisory capacity Board Member (Nations 1999 to advise and buy family owned only) Funds Trust and Nations Master companies) from 1998 through Investment Trust only) April 2001. William H. Grigg Indefinite term; Retired; Chairman Emeritus since 95 Age: 69 Board Member since July 1997, Chairman and Chief Board Member 1991 Executive Officer through July 1997 -- Duke Power Co. Thomas F. Keller Indefinite term; R.J. Reynolds Industries 95 Age: 70 Board Member since Professor of Business Board Member 1991 Administration, Fuqua School of Business, Duke University, since July 1974; Dean, Fuqua School of Business Europe, Duke University, July 1999 through June 2001 Carl E. Mundy, Jr. Indefinite term; President and Chief Executive 91 Age: 66 Board Member since Officer -- USO from May 1996 to Board Member 1996 May 2000; Commandant -- United States Marine Corps from July 1991 to July 1995; Member, Board of Advisors to the Comptroller General of the United States; Chairman, Board of Trustees, Marine Corps University Foundation; Dr. Cornelius J. Pings Indefinite term; Retired; President, Association 91 Age: 73 Board Member since of American Universities through Board Member 1999 June 1998. NAME, AGE AND POSITION WITH THE COMPANIES OTHER DIRECTORSHIPS HELD ------------------------------ --------------------------------- INDEPENDENT BOARD MEMBERS William P. Carmichael Director -- Cobra Electronics Age: 58 Corporation (electronic equipment Board Member (Nations manufacturer), Opta Food Funds Trust and Nations Master Ingredients, Inc. (food Investment Trust only) ingredients manufacturer) and Golden Rule Insurance Company since May, 1994; Board Member, Nations Funds Family (4 registered investment companies) William H. Grigg Director, The Shaw Group, Inc.; Age: 69 and Director and Vice Chairman, Board Member Aegis Insurance Services, Ltd. (a mutual fund insurance company in Bermuda); Board Member, Nations Funds Family (11 registered investment companies) Thomas F. Keller Director, Wendy's International, Age: 70 Inc. (restaurant operating and Board Member franchising); Director, Dimon, Inc. (tobacco); and Director, Biogen, Inc. (pharmaceutical biotechnology); Board Member, Nations Funds Family (11 registered investment companies) Carl E. Mundy, Jr. Director -- Shering-Plough Age: 66 (pharmaceuticals and health care Board Member products); General Dynamics Corporation (defense systems); Board Member, Nations Funds Family (7 registered investment companies) Dr. Cornelius J. Pings Director, Farmers Group, Inc. Age: 73 (insurance company); Board Board Member Member, Nations Funds Family (7 registered investment companies)
318 NATIONS FUNDS FUND GOVERNANCE (CONTINUED) (UNAUDITED)
NAME, AGE AND POSITION TERM OF OFFICE AND PRINCIPAL OCCUPATION(S) DURING NUMBER OF FUNDS IN WITH THE COMPANIES LENGTH OF TIME SERVED THE PAST FIVE YEARS FUND COMPLEX OVERSEEN ------------------------------------------------------------------------------------------------------------------ Charles B. Walker Indefinite term; Vice Chairman and Chief Financial 91 Age: 63 Board Member since Officer -- Albemarle Corporation Board Member 1985 (chemical manufacturing) INTERESTED BOARD MEMBERS(1) Edmund L. Benson, III Indefinite term; Director, President and 91 Age: 65 Board Member since Treasurer, Saunders & Benson, Board Member 1985 Inc. (insurance) James B. Sommers Indefinite term; Retired 91 Age: 63 Board Member since Board Member 1997 A. Max Walker Indefinite term; Independent Financial Consultant 95 Age: 80 Board Member since President, Chairman of the inception Boards and Board Member Thomas S. Word, Jr. Indefinite term; Partner -- McGuire, Woods, Battle 91 Age: 63 Board Member since & Boothe LLP (law firm) Board Member 1985 OTHER OFFICERS Richard H. Blank, Jr. Indefinite term; Senior Vice President since 1998, N/A Age: 44 Secretary since 1993 and Vice President from 1994 to Stephens Inc. and Treasurer since 1998 -- Mutual Fund Services, 111 Center Street 1998 Stephens Inc.; Secretary since Little Rock, AR 72201 September 1993 and Treasurer Secretary and Treasurer since November 1998 -- Nations Funds Family (7 other registered investment companies) NAME, AGE AND POSITION WITH THE COMPANIES OTHER DIRECTORSHIPS HELD ------------------------------ --------------------------------- Charles B. Walker Director -- Ethyl Corporation Age: 63 (chemical manufacturing); Board Board Member Member, Nations Funds Family (7 registered investment companies) INTERESTED BOARD MEMBERS(1) Edmund L. Benson, III Director, Insurance Managers Inc. Age: 65 (insurance); Board Member, Board Member Nations Funds Family (7 registered investment companies) James B. Sommers Chairman -- Central Piedmont Age: 63 Community College Foundation; Board Member Director, Board of Commissioners, Charlotte/Mecklenberg Hospital Authority; Trustee, Central Piedmont Community College, Mint Museum of Art; Board Member, Nations Funds Family (7 registered investment companies) A. Max Walker President, Chairman and Board Age: 80 Member, Nations Funds Family (7 President, Chairman of the registered investment companies) Boards and Board Member Chairman and Board Member, Nations Funds Family (4 registered investment companies) Thomas S. Word, Jr. Director -- Vaughan-Bassett Age: 63 Furniture Company, Inc. Board Member (furniture); Board Member, Nations Funds Family (7 registered investment companies) OTHER OFFICERS Richard H. Blank, Jr. N/A Age: 44 Stephens Inc. 111 Center Street Little Rock, AR 72201 Secretary and Treasurer
--------------- (1) Basis of Interestedness. Mr. Benson's step-son is an employee of Bank of America, the parent of BA Advisors. Mr. Sommers own securities of Bank of America Corporation, the parent holding company of BA Advisors. Mr. Word is affiliated with a law firm which provides services to Bank of America and certain of its affiliates. Mr. A. Max Walker is an Interested Board Member by virtue of the fact that he also serves as President of the Companies. More information about the Board Members is available in the Statement of Additional Information, which is available at no charge from Nations Funds. 319 [This page intentionally left blank.] [This page intentionally left blank.] THE NATIONS FUNDS FAMILY OF FUNDS Within each category, the funds are listed from aggressive to conservative. Lower risk/reward potential SPECIALTY FUNDS INDEX FUNDS Nations SmallCap Index Fund Nations MidCap Index Fund Nations LargeCap Index Fund Nations Managed Index Fund ASSET ALLOCATION PORTFOLIOS Nations LifeGoal Growth Portfolio Nations LifeGoal Balanced Growth Portfolio Nations LifeGoal Income and Growth Portfolio OTHER SPECIALTIES Nations Financial Services Fund Nations Convertible Securities Fund MONEY MARKET FUNDS Nations Prime Fund(1) Nations Cash Reserves Nations Money Market Reserves Nations Government Money Market Fund(2) Nations Government Reserves Nations Treasury Fund(3) Nations Treasury Reserves Nations Tax Exempt Fund(4) Nations Municipal Reserves Nations California Tax-Exempt Reserves Nations New York Tax-Exempt Reserves FIXED INCOME FUNDS TAXABLE INCOME FUNDS Nations High Yield Bond Fund Nations Strategic Income Fund Nations Bond Fund Nations Intermediate Bond Fund Nations Government Securities Fund Nations Short-Intermediate Government Fund Nations Short-Term Income Fund TAX-EXEMPT INCOME FUNDS Nations Municipal Income Fund Nations State-Specific Long-Term Municipal Bond Funds (CA, FL, GA, MD, NC, SC, TN, TX, VA)(5) Nations Intermediate Municipal Bond Fund Nations State-Specific Intermediate Municipal Bond Funds (FL, GA, KS, MD, NC, SC, TN, TX, VA) Nations Short-Term Municipal Income Fund STOCK FUNDS GROWTH FUNDS Nations Small Company Fund Nations Marsico 21st Century Fund Nations MidCap Growth Fund Nations Marsico Focused Equities Fund Nations Marsico Growth & Income Fund(6) Nations Aggressive Growth Fund(7) Nations Capital Growth Fund Nations Strategic Growth Fund BLEND FUNDS Nations Blue Chip Fund(8) Nations Asset Allocation Fund Nations Equity Income Fund(9) VALUE FUNDS Nations MidCap Value Fund Nations Value Fund Nations LargeCap Value Fund Nations Classic Value Fund Higher reward/risk potential INTERNATIONAL/GLOBAL FUNDS Nations Emerging Markets Fund Nations Marsico International Opportunities Fund Nations International Equity Fund Nations International Value Fund Nations Global Value Fund 1 Effective May 10, 2002, the fund reorganized into Nations Cash Reserves. 2 Effective May 10, 2002, the fund reorganized into Nations Government Reserves. 3 Effective May 10, 2002, the fund reorganized into Nations Treasury Reserves. 4 Effective May 10, 2002, the fund reorganized into Nations Tax-Exempt Reserves. 5 Effective May 10, 2002, these funds, excluding CA and FL, reorganized into a corresponding intermediate municipal bond fund of the same state which has substantially similar investment objectives and principal investment strategies. 6 Effective May 10, 2002, the fund's name changed to Nations Marsico Growth Fund which better reflects the fund's investment objective and strategies. 7 Effective May 10, 2002, the fund reorganized into Nations Capital Growth Fund. 8 Effective May 10, 2002, the fund reorganized into Nations Strategic Growth Fund. 9 Effective May 10, 2002, the fund reorganized into Nations Convertible Securities Fund. MUNIAR 220635 (04/02)