-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EUXR7f3Avfi8coWYBYcUAmB7Ox620+BumM5FZoxoo8PIUaz/G6O7VodE868M9cvi /IA4hV+A/lqlCoxUHm5ofA== 0000872032-05-000012.txt : 20050909 0000872032-05-000012.hdr.sgml : 20050909 20050909123005 ACCESSION NUMBER: 0000872032-05-000012 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050909 DATE AS OF CHANGE: 20050909 EFFECTIVENESS DATE: 20050909 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TAX FREE FUND FOR UTAH CENTRAL INDEX KEY: 0000872032 IRS NUMBER: 133673542 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-06239 FILM NUMBER: 051077010 BUSINESS ADDRESS: STREET 1: 380 MADISON AVE STREET 2: SUITE 2300 CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2126976666 MAIL ADDRESS: STREET 2: 380 MADISON AVE SUITE CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: PLEIADES TAX FREE FUND DATE OF NAME CHANGE: 19920514 N-CSR 1 tffu63005ncsr.txt TAX-FREE FUND FOR UTAH 6/30/2005 NCSR UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-6239 Tax-Free Fund for Utah (Exact name of Registrant as specified in charter) 380 Madison Avenue New York, New York 10017 (Address of principal executive offices) (Zip code) Joseph P. DiMaggio 380 Madison Avenue New York, New York 10017 (Name and address of agent for service) Registrant's telephone number, including area code: (212) 697-6666 Date of fiscal year end: 6/30 Date of reporting period: 6/30/05 FORM N-CSR ITEM 1. REPORTS TO STOCKHOLDERS. ANNUAL REPORT JUNE 30, 2005 [LOGO OF TAX-FREE FUND FOR UTAH: A RECTANGLE CONTAINING DESERT BULDERS WITH THE SUN RISING BEHIND THEM] (SM) TAX-FREE FUND FOR UTAH A TAX-FREE INCOME INVESTMENT [LOGO OF THE AQUILA GROUP OF FUNDS: ONE OF THE AN EAGLE'S HEAD] AQUILA(SM) GROUP OF FUNDS [LOGO OF TAX-FREE FUND FOR UTAH: A RECTANGLE CONTAINING DESERT BULDERS WITH THE SUN RISING BEHIND THEM] (SM) SERVING UTAH INVESTORS FOR MORE THAN A DECADE TAX-FREE FUND FOR UTAH "DON'T WAIT UNTIL TOMORROW" August, 2005 Dear Fellow Shareholder: Are there things that you wish that you had done today? Yesterday? 10 years ago? We are all guilty of sometimes putting off to tomorrow things we really should do today. However, when it comes to investing for one's retirement and future needs, any delay can prove to be extremely costly. LIFE EXPECTANCY As you probably know, continuing advances in medicine and a renewed focus on healthier life styles have contributed to life expectancy in the United States reaching an all-time high. The average American can now expect to live 77.6 years. It probably won't surprise you to learn that this increase is in keeping with historical trends. U.S. life expectancies have risen an average of 2/10th of a year, each and every year since 1990. AN OPTIMISTIC, YET REALISTIC APPROACH While it is certainly always hoped for, and may be fully expected, that plans will come to fruition in exactly the manner anticipated, it is always best to also have a realistic approach to most future dealings - especially when it comes to investing and one's retirement planning. INADEQUACY OF SOCIAL SECURITY -- Coupled with a population that is living longer is a society which is reproducing less. This is creating a phenomenon known as "global aging." It is anticipated that before too long, the number of retired persons will outweigh the number of individuals in the workforce. This situation may well wreak havoc with the Social Security system. While we may not realize the full impact of global aging in our lifetimes, it does bring to light that perhaps it may not be wise to rely solely on Social Security for one's retirement needs. Many financial experts suggest that one should plan to have 75% - 80% of their current income available at retirement so that they can maintain their current standard of living. For many people, Social Security alone will not even come close to providing this suggested percentage, if it truly is an accurate estimate. PRECARIOUSNESS OF PENSION PLANS -- When you read about such industry leaders as Bethlehem Steel, United Airlines, Enron and WorldCom having significant financial problems, it reminds us all that our corporate pension plans may not be 100% safe. Therefore, relying solely upon income from corporate pension plans for retirement may also not necessarily be a wise thing to do. INFLATION -- With so much uncertainty in this world today, going back to the olden days of "placing your savings under your mattress for safe-keeping" might not seem like such a bad idea. However, while this method is better than not saving at all, it does not take into consideration the effect of an often overlooked risk factor - inflation. A dollar placed safely under one's mattress today may still be there in a few years. But, it is unlikely that it will still have the same purchasing power that it does today. The dollar may still look and feel the same as it did when it was first tucked away. But, in actuality, inflation will most likely take a bite out of its purchasing power. In other words, it will no longer have the same "bang for the buck." As you probably are aware, the Consumer Price Index (CPI) measures the average price of a 'basket' of goods and services at regular intervals. It should come as no surprise to you that the cost for that basket of goods and services continues to rise year after year. In fact, as you will note from the chart below, in the past 20 years, the CPI has come very close to doubling. YEAR CPI ---- --- 1985 $105.5 1990 $127.4 1995 $150.3 2000 $168.8 2005 $190.7 As you can see, each dollar buys substantially less each year. So, while one may have enough money to cover their living expenses right at the moment, it is also important to ask oneself if you will be able to say the same thing 10, 20 or more years from now. PLAN AHEAD AND DIVERSIFY Unfortunately, many of us probably know a retired person who has been forced back to work in order to keep up with their living expenses. And, we may know someone who has had to adopt a diminished life style in order to keep their expenses under control. Our best advice for everyone in order to avoid these types of situations is to: 1) sit down with a financial professional and develop a sound financial plan; 2) start saving as early as possible; 3) have a diversified portfolio of investments; and 4) have a diversified pool of resources to rely upon for your retirement, not depending solely on Social Security or a pension plan. No matter where you choose to place your cash reserves - in Tax-Free Fund For Utah or elsewhere - don't wait until tomorrow to prepare for your future. If you haven't already done so, start a savings plan today that will, hopefully, enable you to reach your goals. Sincerely, /s/ Diana P. Herrmann /s/ Lacy B. Herrmann Diana P. Herrmann Lacy B. Herrmann President Founder NOT A PART OF THE ANNUAL REPORT [LOGO OF TAX-FREE FUND FOR UTAH: A RECTANGLE CONTAINING DESERT BULDERS WITH THE SUN RISING BEHIND THEM] (SM) SERVING UTAH INVESTORS FOR MORE THAN A DECADE TAX-FREE FUND FOR UTAH ANNUAL REPORT MANAGEMENT DISCUSSION OF FUND PERFORMANCE Over the past twelve months, we have certainly seen our share of memorable world events andThe national economy has recently not been as predictable as in past years. While the Federal Reserve aggressively continues its mandate to keep inflation under control while ensuring that the economy doesn't slip into a recession, short-term interest rates continue to rise as long-term rates (ten years and longer) fall to near-record lows. We have been witness to a myriad of economic events that delight and confound us all! On the one hand, we are heartened by the surprisingly low inflation rates, recently expanding industrial production, and retail sales. On the other hand, we are paying more at the gas pump than we have in a number of years. As we head toward the end of 2005, it is widely believed that the Federal Reserve will raise short-term rate targets even higher. The most recently announced unemployment report covering the month ended May 31, 2005, indicates a rate of 5.0%, the lowest since September 2001. Other measures of economic progress, such as retail sales (up 1.7% for June 2005), housing starts (approaching historical highs), and industrial production (up 0.9% for June 2005) are also pointing to a reasonably sustainable recovery. Historically, as we have seen progress on the economic front, there has been the fear that a higher level of inflation will rear its ugly head. However, recent increases in both the Producer Price Index ("PPI") and the Consumer Price Index ("CPI") have been modest, with both indices unchanged for the month of June. For the year ended June 30, 2005, the CPI is up 2.5%, in spite of record oil prices. The Gross Domestic Product is currently on an annual growth pace of 3.25% through the second quarter of 2005. The Class A share of Tax-Free Fund For Utah experienced a rise in net asset value per share of 3.53% for the 12-month period ended June 30, 2005. The Fund's Class A share value was $9.91 on July 1, 2004 and $10.26 on June 30, 2005. A typical AA-rated general obligation with a 15-year maturity has fallen in yield from 4.59% to 4.05% over that same period. Equity performance for the 12 months ended June 30, 2005 was relatively mixed. The Dow Jones Industrial Average was up 0.65%; the S&P 500 Index was up 6.32%; and the NASDAQ Composite Index was up 1.10% - all showing rather lackluster performance versus their respective previous 12 month performance. Historically, as the economy has grown, commodity prices and interest rates have begun to rise. While these increases have been modest to date, we continue to monitor any changes and position Tax-Free Fund For Utah's portfolio accordingly. To address the concerns raised by an increase in the overall level of interest rates, we take great care in the selection of the individual MANAGEMENT DISCUSSION OF FUND PERFORMANCE (CONTINUED) bonds purchased for the Fund. We will seek to continue to add high quality, intermediate maturity Utah municipal bonds that best meet our demanding standards. The investment objective of Tax-Free Fund For Utah is to provide as high a level of double tax-exempt current income as is consistent with the preservation of capital. We believe this objective continues to be successfully addressed by our adherence to a discipline of solid fundamental, conservative portfolio management ideals. As of the fiscal year ended June 30, 2005, the Fund continued to maintain an average quality rating of "AA", with over 76% of the portfolio rated "AAA". The Fund's laddered maturity structure helps us manage price volatility. At June 30, 2005, the portfolio had an average life of approximately 13.5 years and a modified duration of 5.37 years. We seek to maintain a well-diversified portfolio, which consisted of 276 different issues at year end, of which 100% were in Utah and reciprocal states (based on current Utah tax laws). With the national and local economies showing improvement, we will remain vigilant and do whatever is necessary as we strive to continue to meet the Fund's investment objective. We will seek to "stay the course" and manage the portfolio by taking advantage of opportunities in the Utah marketplace that are consistent with the high standards of your Fund. PERFORMANCE REPORT The following graph illustrates the value of $10,000 invested in the Class A shares of Tax-Free Fund For Utah for the 10-year period ended June 30, 2005 as compared with the Lehman Brothers Quality Intermediate Municipal Bond Index and the Consumer Price Index (a cost of living index). The performance of each of the other classes is not shown in the graph but is included in the table below. It should be noted that the Lehman Index does not include any operating expenses nor sales charges and being nationally oriented, does not reflect state specific bond market performance. [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL] CPI TFTA no sales TFTA w sales Lehman 6/95 10000 10000 9600 10000 6/96 10275 10472 10055 10556 6/97 10511 11338 10887 11278 6/98 10689 12209 11723 12061 6/99 10898 12446 11950 12427 6/00 11305 12716 12209 12928 6/01 11672 13827 13276 14070 6/02 11797 14700 14115 15048 6/03 12046 16007 15370 16225 6/04 12439 15855 15224 16281 6/05 12754 16994 16317 17158
AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED JUNE 30, 2005 ------------------------------------------- SINCE 1 YEAR 5 YEARS 10 YEARS INCEPTION ------ ------- -------- --------- Class A (7/24/92) With Sales Charge ............. 3.77% 5.90% 5.42% 5.54% Without Sales Charge .......... 8.06 6.76 5.85 5.87 Class C (5/21/96) With CDSC ..................... 6.17 5.83 n/a 4.79 Without CDSC .................. 7.20 5.83 n/a 4.79 Class Y (5/21/96) No Sales Charge ............... 8.27 6.96 n/a 6.00 Lehman Index .................... 5.39 5.83 5.55 5.68* (Class A) 5.36** (Class C&Y)
Total return figures shown for the Fund reflect any change in price and assume all distributions within the period were invested in additional shares. Returns for Class A shares are calculated with and without the effect of the initial 4% maximum sales charge. Returns for Class C shares are calculated with and without the effect of the 1% contingent deferred sales charge (CDSC), imposed on redemptions made within the first 12 months after purchase. Class Y shares are sold without any sales charge. The rates of return will vary and the principal value of an investment will fluctuate with market conditions. Shares, if redeemed, may be worth more or less than their original cost. A portion of each class's income may be subject to federal and state income taxes and/or the federal alternative minimum tax. Past performance is not predictive of future investment results. * From commencement of operations on 7/24/92. ** From commencement of operations on 5/21/96. - -------------------------------------------------------------------------------- [LOGO OF KPMG LLP: FOUR SOLID RECTANGLES WITH THE LETTERS KPMG IN FRONT] REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees and Shareholders of Tax-Free Fund For Utah: We have audited the accompanying statement of assets and liabilities of Tax-Free Fund For Utah, including the schedule of investments, as of June 30, 2005, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of June 30, 2005, by correspondence with the custodian and brokers, or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Tax-Free Fund For Utah as of June 30, 2005, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles. /s/ KPMG LLP New York, New York August 12, 2005 - -------------------------------------------------------------------------------- TAX-FREE FUND FOR UTAH SCHEDULE OF INVESTMENTS JUNE 30, 2005
RATING FACE MOODY'S/ AMOUNT GENERAL OBLIGATION BONDS (21.4%) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- CITY, COUNTY AND STATE (10.8%) American Fork City, Utah $ 610,000 5.000%, 12/01/14 FGIC Insured (pre-refunded) ........... Aaa/NR $ 642,415 645,000 5.000%, 12/01/15 FGIC Insured (pre-refunded) ........... Aaa/NR 679,275 Anderson, Indiana San. District 505,000 4.600%, 07/15/23 AMBAC Insured ......................... Aaa/AAA 522,342 Brian Head, Utah 530,000 5.000%, 08/01/19 XLCA Insured .......................... Aaa/NR 575,850 405,000 6.500%, 03/15/24 ....................................... NR/NR* 477,098 Cedar City, Utah Special Improvement District Assessment 235,000 5.050%, 09/01/10 ....................................... NR/NR* 244,045 215,000 5.200%, 09/01/11 ....................................... NR/NR* 225,825 Clearfield City, Utah 2,095,000 5.125%, 02/01/18 MBIA Insured (pre-refunded) ........... Aaa/AAA 2,217,034 Coral Canyon, Utah Special Service District 580,000 5.700%, 07/15/18 ....................................... NR/NR* 602,400 Hurricane, Utah 295,000 5.400%, 11/01/09 Radian Insured ........................ NR/AA 319,240 Mckinney, Texas 1,700,000 4.500%, 08/15/23 XLCA Insured .......................... Aaa/AAA 1,733,167 Mesquite, Texas 510,000 4.625%, 02/15/22 FSA Insured ........................... Aaa/AAA 524,530 Nevada State 965,000 4.500%, 08/01/21 FSA Insured ........................... Aaa/AAA 998,650 St. George, Utah 100,000 5.375%, 08/01/21 FGIC Insured (pre-refunded) ........... Aaa/AAA 106,293 Salt Lake City, Utah 120,000 5.750%, 06/15/17 (pre-refunded) ........................ Aaa/NR 134,990 San Antonio, Texas 125,000 4.750%, 02/01/24 FSA Insured ........................... Aaa/AAA 129,006 Spokane County, Washington 420,000 4.500%, 12/01/23 MBIA Insured .......................... Aaa/AAA 430,941 Waco, Texas 2,560,000 4.500%, 02/01/24 MBIA Insured .......................... Aaa/AAA 2,592,717 Washington County, Utah 1,250,000 5.000%, 10/01/22 MBIA Insured .......................... Aaa/NR 1,340,775
RATING FACE MOODY'S/ AMOUNT GENERAL OBLIGATION BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- CITY, COUNTY AND STATE (CONTINUED) Washington State $ 3,315,000 4.500%, 01/01/22 MBIA Insured .......................... Aaa/AAA $ 3,387,731 605,000 4.500%, 07/01/23 FSA Insured ........................... Aaa/AAA 609,029 ------------- Total City, County and State 18,493,353 ------------- SCHOOL DISTRICT (10.6%) Alpine, Utah School District 375,000 5.000%, 03/15/12 (pre-refunded) ........................ Aaa/NR 413,509 Carbon County, Utah School District 800,000 5.000%, 06/15/21 ....................................... Aaa/NR 849,304 Dallas, Texas Independent School District 2,500,000 5.000%, 08/15/29 ....................................... Aaa/AAA 2,655,800 Davis County, Utah School District 575,000 5.000%, 06/01/15 (pre-refunded) ........................ Aaa/NR 634,478 250,000 5.100%, 06/01/16 (pre-refunded) ........................ Aaa/NR 278,875 675,000 5.150%, 06/01/17 (pre-refunded) ........................ Aaa/NR 755,035 Eagle Mountain & Saginaw, Texas Independent School District 525,000 4.750%, 08/15/23 ....................................... Aaa/AAA 545,926 Frisco, Texas Independent School District 1,260,000 5.000%, 07/15/26 ....................................... Aaa/NR 1,342,858 Navasota, Texas Independent School District 475,000 5.000%, 08/15/23 FGIC Insured .......................... Aaa/NR 508,692 Nebo, Utah School District 440,000 5.500%, 07/01/11 (pre-refunded) ........................ Aaa/AAA 490,371 North Summit County, Utah School District 760,000 5.000%, 02/01/23 ....................................... Aaa/NR 818,512 800,000 5.000%, 02/01/24 ....................................... Aaa/NR 857,184 Rich County, Utah School District 120,000 5.500%, 12/15/09 ....................................... NR/NR* 121,361 100,000 5.600%, 12/15/10 ....................................... NR/NR* 100,915 Salt Lake City, Utah School District 265,000 5.000%, 03/01/21 (pre-refunded) ........................ Aaa/NR 293,034 Tooele County, Utah School District 670,000 4.000%, 06/01/20 ....................................... Aaa/AAA 657,431 Washington County, Utah 440,000 5.000%, 10/01/18 XLCA Insured .......................... Aaa/NR 480,779 465,000 5.000%, 10/01/19 XLCA Insured .......................... Aaa/NR 507,720 490,000 5.000%, 10/01/20 XLCA Insured .......................... Aaa/NR 533,022
RATING FACE MOODY'S/ AMOUNT GENERAL OBLIGATION BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- SCHOOL DISTRICT (CONTINUED) Washington County, Utah (continued) $ 510,000 5.000%, 10/01/21 XLCA Insured .......................... Aaa/NR $ 553,131 535,000 5.000%, 10/01/22 XLCA Insured .......................... Aaa/NR 578,517 565,000 5.000%, 10/01/23 XLCA Insured .......................... Aaa/NR 609,143 320,000 5.000%, 10/01/24 XLCA Insured .......................... Aaa/NR 343,722 Weber County, Utah School District 750,000 5.000%, 06/15/18 ....................................... Aaa/NR 806,115 825,000 5.000%, 06/15/20 ....................................... Aaa/NR 894,655 Weber County, Utah School District Series B 1,485,000 5.000%, 06/15/21 ....................................... Aaa/NR 1,576,521 ------------- Total School District 18,206,610 ------------- Total General Obligation Bonds 36,699,963 ------------- REVENUE BONDS (76.8%) EDUCATION (13.8%) Clinton Prairie, Indiana Community School Building 675,000 4.625%, 01/15/19 FGIC Insured .......................... NR/AAA 712,982 Florida State Board Education Public Education 210,000 4.500%, 06/01/25 FSA Insured ........................... NR/AAA 215,567 Laredo, Texas Independent School District Public Facility Corp. 190,000 5.000%, 08/01/24 AMBAC Insured ......................... Aaa/AAA 199,831 Raven Hills, Texas Higher Education Housing & Education Revenue 215,000 5.000%, 06/01/26 AMBAC Insured ......................... Aaa/NR 225,045 St. Joseph County, Indiana Educational Facilities Revenue 100,000 5.000%, 03/01/27 ....................................... Aaa/NR 102,412 Salt Lake County, Utah Westminster College Project 115,000 5.050%, 10/01/10 ....................................... NR/BBB 121,688 100,000 5.500%, 10/01/19 ....................................... NR/BBB 104,706 1,200,000 5.000%, 10/01/22 ....................................... NR/BBB 1,233,816 1,250,000 5.000%, 10/01/25 ....................................... NR/BBB 1,276,025 1,000,000 5.750%, 10/01/27 ....................................... NR/BBB 1,045,500 Southern Utah University Revenue 375,000 6.300%, 06/01/16 ....................................... NR/NR* 386,243
RATING FACE MOODY'S/ AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- EDUCATION (CONTINUED) Texas State College Student Loan Revenue $ 100,000 5.000%, 08/01/22 AMT ................................... Aa1/AA $ 103,463 Tyler, Texas Independent School District 325,000 5.000%, 02/15/26 FSA Insured ........................... Aaa/AAA 347,490 University of Nevada University Revenues 190,000 4.500%, 07/01/24 MBIA Insured .......................... Aaa/AAA 195,375 University of Utah Revenue Refunding (Biology Research Facilities) 200,000 5.500%, 04/01/11 MBIA Insured (pre-refunded) ........... Aaa/AAA 206,186 Utah State Board Regents Dixie State College 115,000 5.500%, 05/01/1/13 MBIA Insured ........................ Aaa/AAA 129,733 120,000 5.500%, 05/01/1/14 MBIA Insured ........................ Aaa/AAA 135,373 130,000 5.500%, 05/01/1/15 MBIA Insured ........................ Aaa/AAA 147,077 400,000 5.100%, 05/01/1/21 MBIA Insured ........................ Aaa/AAA 428,476 Utah State Board Regents Office Facility Revenue 450,000 5.050%, 02/01/20 MBIA Insured .......................... Aaa/AAA 480,263 360,000 5.125%, 02/01/22 MBIA Insured .......................... Aaa/AAA 385,117 Utah State Board Regents Revenue 2,885,000 4.500%, 08/01/18 MBIA Insured++ ........................ Aaa/AAA 3,015,690 Utah State Board Regents Revenue University of Utah 1,045,000 5.000%, 04/01/23 MBIA Insured .......................... Aaa/AAA 1,128,527 Utah State Board Regents Salt Lake Community College 1,260,000 5.500%, 06/01/16 FSA Insured ........................... Aaa/AAA 1,396,130 Utah State Board Regents University Utah-Auxiliary & Campus Revenue 895,000 5.250%, 04/01/12 MBIA Insured .......................... Aaa/AAA 957,435 1,015,000 5.000%, 04/01/20 MBIA Insured (pre-refunded) ........... Aaa/AAA 1,056,006 Utah State Board Regents University of Utah Hospital Revenue 2,030,000 5.500%, 08/01/17 MBIA Insured (pre-refunded) ........... Aaa/AAA 2,290,429 905,000 5.000%, 05/01/19 AMBAC Insured ......................... Aaa/AAA 976,549 3,595,000 5.000%, 08/01/19 MBIA Insured .......................... Aaa/AAA 3,822,779 Weber State University, Utah Revenue 100,000 5.250%, 04/01/24 FSA Insured ........................... NR/AAA 107,060
RATING FACE MOODY'S/ AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- EDUCATION (CONTINUED) Weber State University, Utah Revenue Student Facilities System Series A $ 300,000 5.100%, 04/01/16 ....................................... NR/AA $ 326,142 425,000 5.250%, 04/01/19 ....................................... NR/AA 464,580 ------------- Total Education 23,723,695 ------------- HEALTHCARE (2.2%) Harris County, Texas Health Facility Development Corp. 145,000 5.000%, 11/15/28 AMBAC Insured ......................... NR/AAA 150,226 Murray City, Utah Hospital Revenue 595,000 5.000%, 05/15/22 MBIA Insured .......................... Aaa/AAA 607,263 Salt Lake County, Utah Hospital Revenue - IHC Hospitals, Inc. 500,000 5.500%, 05/15/13 AMBAC Insured ......................... Aaa/AAA 555,205 Tarrant County, Texas Health Facilities Revenue 230,000 5.000%, 02/15/26 MBIA Insured .......................... Aaa/AAA 236,842 Utah County, Utah Hospital Revenue, IHC Health Services 1,935,000 5.250%, 08/15/21 MBIA Insured ETM ...................... Aaa/AAA 2,017,934 Utah State Board Regents Revenue University of Utah Hospital Revenue 310,000 5.000%, 08/01/21 MBIA Insured .......................... Aaa/AAA 328,262 ------------- Total Healthcare 3,895,732 ------------- HOUSING (3.9%) Indiana State Housing Finance Authority Single Family 290,000 4.850%, 07/01/22 AMT ................................... Aaa/NR 296,963 Provo City, Utah Housing Authority 500,000 5.800%, 07/20/22 GNMA Collateralized ................... Aaa/NR 521,050 Utah Housing Corporation Single Family Housing 280,000 4.000%, 07/01/11 AMT ................................... Aaa/AAA 281,184 65,000 5.250%, 07/01/23 AMT ................................... Aa2/AA 66,396 Utah Housing Corporation Single Family Mortgage 315,000 5.150%, 07/01/23 AMT ................................... Aaa/AAA 320,503 945,000 5.100%, 01/01/26 AMT ................................... Aa3/AA- 966,385 Utah State Housing Agency Housing Revenue 145,000 5.650%, 07/01/27 AMT ................................... Aa2/AA 150,887
RATING FACE MOODY'S/ AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- HOUSING (CONTINUED) Utah State Housing Corporation Single Family Housing Revenue $ 1,475,000 5.125%, 07/01/24 AMT ................................... Aa3/AA- $ 1,506,609 Utah State Housing Finance Agency 5,000 6.600%, 07/01/11 Series E-1 ............................ NR/AA 5,000 15,000 6.350%, 07/01/11 Mezzanine Series G-1 .................. AAA/NR 15,052 10,000 6.350%, 07/01/12 AMBAC Insured AMT .................... Aaa/AAA 10,036 10,000 6.150%, 07/01/16 Senior Issue A-1 ...................... Aaa/AAA 10,250 170,000 5.650%, 07/01/16 Series 1994C .......................... Aaa/AAA 174,819 65,000 5.400%, 07/01/16 AMT ................................... Aa2/AA 66,250 110,000 6.000%, 07/01/17 AMT ................................... Aaa/AA 113,057 890,000 5.500%, 07/01/18 AMT ................................... Aa3/AA- 930,157 130,000 5.300%, 07/01/18 AMT ................................... Aaa/AAA 136,700 115,000 5.000%, 07/01/18 AMT ................................... Aaa/AAA 117,748 260,000 5.400%, 07/01/20 AMT ................................... Aa2/AA 268,606 415,000 5.600%, 07/01/23 AMT ................................... Aa2/AA 427,720 145,000 5.700%, 07/01/26 MBIA Insured .......................... Aaa/AAA 145,634 Wyoming Community Development Authority Housing Revenue 120,000 5.000%, 12/01/22 ....................................... Aa1/AA+ 124,733 ------------- Total Housing 6,655,739 ------------- INDUSTRIAL DEVELOPMENT & POLLUTION CONTROL (0.4%) Sandy City, Utah Industrial Development, H Shirley Wright Project, Refunding Bonds, LOC Olympus Bank 250,000 6.125%, 08/01/16 ....................................... NR/AAA 250,642 Utah County Environmental Improvement Revenue 435,000 5.050%, 11/01/17 ....................................... Baa1/BBB+ 465,085 ------------- Total Industrial Development & Pollution Control 715,727 ------------- LEASE (6.8%) Celebration Community Development District, Florida 290,000 5.000%, 05/01/22 MBIA Insured .......................... Aaa/AAA 310,613 Marion County, Indiana Convention & Recreational Facilities Authority Revenue 390,000 5.000%, 06/01/27 MBIA Insured .......................... Aaa/AAA 402,207
RATING FACE MOODY'S/ AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- LEASE (CONTINUED) Murray City, Utah Municipal Building Revenue $ 520,000 5.050%, 12/01/15 AMBAC Insured ......................... Aaa/NR $ 563,997 Salt Lake County, Utah Municipal Building Authority, Lease Revenue 100,000 5.400%, 10/01/19 (pre-refunded) ........................ Aa1/AA+ 109,143 320,000 5.400%, 10/15/19 AMBAC Insured (pre-refunded) .......... Aaa/AAA 353,674 3,900,000 5.200%, 10/15/20 AMBAC Insured (pre-refunded) .......... Aaa/AAA 4,349,475 Utah County, Utah Municipal Building Authority, Lease Revenue 120,000 5.500%, 11/01/16 AMBAC Insured ......................... Aaa/NR 133,135 240,000 5.500%, 11/01/17 AMBAC Insured ......................... Aaa/NR 265,841 Utah State Building Ownership Authority 1,350,000 5.250%, 05/15/20 FSA Insured (pre-refunded) ............ Aaa/AAA 1,441,733 1,080,000 5.000%, 05/15/25 ....................................... Aa1/AA+ 1,156,507 Washington County - St. George, Utah Interlocal Agency Revenue 1,000,000 5.125%, 12/01/17 AMBAC Insured ......................... NR/AAA 1,056,510 100,000 5.125%, 12/01/22 AMBAC Insured ......................... NR/AAA 105,365 West Bountiful, Utah Courthouse Revenue 410,000 5.000%, 05/01/19 ....................................... NR/A- 447,704 West Valley City, Utah 865,000 5.000%, 08/01/21 AMBAC Insured ......................... Aaa/AAA 923,275 ------------- Total Lease 11,619,179 ------------- TAX REVENUE (26.9%) Bay County, Florida Sales Tax Revenue 175,000 4.750%, 09/01/23 FSA Insured ........................... Aaa/NR 179,630 Bluffdale City, Utah Series 2004 295,000 6.000%, 12/01/13 ....................................... NR/NR* 295,286 310,000 6.000%, 12/01/14 ....................................... NR/NR* 310,301 330,000 6.000%, 12/01/15 ....................................... NR/NR* 330,386 350,000 6.000%, 12/01/16 ....................................... NR/NR* 350,410 370,000 6.000%, 12/01/17 ....................................... NR/NR* 370,433 395,000 6.000%, 12/01/18 ....................................... NR/NR* 395,494 420,000 6.000%, 12/01/19 ....................................... NR/NR* 420,525 Bluffdale, Utah Sales Tax Revenue 2,110,000 5.500%, 08/01/23 ....................................... NR/NR* 2,151,609
RATING FACE MOODY'S/ AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- TAX REVENUE (CONTINUED) Bountiful, Utah Special Improvement District Special Assessment Revenue $ 203,000 5.000%, 06/01/14 ....................................... NR/NR* $ 203,126 213,000 5.150%, 06/01/15 ....................................... NR/NR* 213,198 224,000 5.300%, 06/01/16 ....................................... NR/NR* 224,172 236,000 5.500%, 06/01/17 ....................................... NR/NR* 236,271 249,000 5.650%, 06/01/18 ....................................... NR/NR* 249,354 Brian Head, Utah Special Service Improvement District Revenue 410,000 5.350%, 11/01/12 ....................................... NR/NR* 421,800 Cache County, Utah Sales Tax Revenue 500,000 5.000%, 12/15/14 FGIC Insured .......................... Aaa/AAA 547,725 670,000 5.000%, 12/15/16 FGIC Insured .......................... Aaa/AAA 729,831 600,000 5.000%, 12/15/17 FGIC Insured .......................... Aaa/AAA 649,512 510,000 5.000%, 12/15/18 FGIC Insured .......................... Aaa/AAA 548,653 830,000 5.000%, 12/15/19 FGIC Insured .......................... Aaa/AAA 892,906 Clearfield, Utah Sales Tax Revenue 590,000 5.000%, 07/01/18 FGIC Insured .......................... Aaa/AAA 640,062 620,000 5.000%, 07/01/19 FGIC Insured .......................... Aaa/AAA 669,947 650,000 5.000%, 07/01/20 FGIC Insured .......................... Aaa/AAA 699,582 Coral Canyon, Utah Special Service District 110,000 5.000%, 07/15/13 ....................................... NR/NR* 115,331 250,000 5.500%, 07/15/18 ....................................... NR/NR* 261,708 Davis County, Utah Sales Tax Revenue 1,470,000 5.150%, 10/01/18 AMBAC Insured ......................... NR/AAA 1,609,400 Jordanelle, Utah Special Service District 186,000 5.000%, 11/15/14 ....................................... NR/NR* 189,322 196,000 5.100%, 11/15/15 ....................................... NR/NR* 199,800 206,000 5.200%, 11/15/16 ....................................... NR/NR* 209,473 216,000 5.300%, 11/15/17 ....................................... NR/NR* 219,635 228,000 5.400%, 11/15/18 ....................................... NR/NR* 231,969 240,000 5.500%, 11/15/19 ....................................... NR/NR* 244,171 253,000 5.600%, 11/15/20 ....................................... NR/NR* 257,230 268,000 5.700%, 11/15/21 ....................................... NR/NR* 272,390 283,000 5.800%, 11/15/22 ....................................... NR/NR* 287,627 299,000 6.000%, 11/15/23 ....................................... NR/NR* 303,868
RATING FACE MOODY'S/ AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- TAX REVENUE (CONTINUED) Jordanelle, Utah Special Service Improvement District $ 360,000 8.000%, 10/01/11 ....................................... NR/NR* $ 381,463 Lehi, Utah Sales Tax 610,000 5.000%, 06/01/21 FSA Insured ........................... Aaa/AAA 661,472 790,000 5.000%, 06/01/24 FSA Insured ........................... Aaa/AAA 848,658 Mountain Regional Water District, Utah Special Assessment Revenue 1,935,000 7.000%, 12/01/18 ....................................... NR/NR* 1,998,410 Mountain Regional Water, Utah Special Service District 2,000,000 5.000%, 12/15/20 MBIA Insured .......................... Aaa/AAA 2,159,900 North Ogden, Utah Sales Tax Revenue 195,000 5.000%, 11/01/24 XLCA Insured .......................... Aaa/AAA 208,781 Orem, Utah Special Assessment Revenue 96,000 5.000%, 08/01/15 ....................................... NR/NR* 96,024 101,000 5.150%, 08/01/16 ....................................... NR/NR* 101,022 106,000 5.300%, 08/01/17 ....................................... NR/NR* 106,025 112,000 5.500%, 08/01/18 ....................................... NR/NR* 112,036 118,000 5.650%, 08/01/19 ....................................... NR/NR* 118,041 Pleasant Grove City, Utah Sales Tax Revenue 410,000 5.250%, 12/01/17 MBIA Insured .......................... Aaa/AAA 455,859 Salt Lake City, Utah Sales Tax Revenue 490,000 5.250%, 02/01/12 ....................................... NR/AAA 546,007 265,000 5.250%, 02/01/13 ....................................... NR/AAA 293,803 1,320,000 5.250%, 02/01/15 ....................................... NR/AAA 1,452,871 100,000 5.250%, 02/01/17 ....................................... NR/AAA 109,329 Salt Lake County, Utah Sales Tax Revenue 955,000 5.000%, 02/01/21 XLCA Insured .......................... NR/AAA 1,039,002 1,005,000 5.000%, 02/01/22 XLCA Insured .......................... NR/AAA 1,092,566 1,060,000 5.000%, 02/01/23 XLCA Insured .......................... NR/AAA 1,147,068 1,115,000 5.000%, 02/01/24 XLCA Insured .......................... NR/AAA 1,201,981 Sandy City, Utah Sales Tax Revenue 520,000 5.000%, 09/15/18 AMBAC Insured ......................... NR/AAA 558,579 605,000 5.000%, 09/15/20 AMBAC Insured ......................... NR/AAA 647,132 South Jordan, Utah Municipal Building Authority Revenue 290,000 5.375%,10/01/20 AMBAC Insured .......................... NR/AAA 320,186 South Jordan, Utah Sales Tax 570,000 5.000%, 08/15/15 AMBAC Insured ......................... Aaa/AAA 614,682 South Jordan, Utah Special Assignment 1,000,000 6.875%, 11/01/17 ....................................... NR/NR* 1,031,900
RATING FACE MOODY'S/ AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- TAX REVENUE (CONTINUED) South Weber City, Utah $ 525,000 5.000%, 01/15/24 MBIA Insured .......................... Aaa/AAA $ 561,430 Utah Water Finance Agency Revenue 775,000 5.100%, 07/01/18 AMBAC Insured ......................... Aaa/NR 835,318 510,000 5.000%, 07/01/18 AMBAC Insured ......................... Aaa/NR 551,448 260,000 5.000%, 06/01/19 MBIA Insured .......................... Aaa/AAA 270,158 685,000 5.000%, 07/01/19 AMBAC Insured ......................... Aaa/NR 740,184 Wasatch County, Utah Building Authority 130,000 5.000%, 10/01/15 ....................................... A3/NR 139,321 135,000 5.000%, 10/01/16 ....................................... A3/NR 144,092 Wasatch County, Utah Sales Tax Revenue 205,000 5.000%, 12/01/16 AMBAC Insured ......................... Aaa/AAA 223,220 210,000 5.000%, 12/01/17 AMBAC Insured ......................... Aaa/AAA 227,247 225,000 5.000%, 12/01/18 AMBAC Insured ......................... Aaa/AAA 242,122 Washington City, Utah Sales Tax Revenue 680,000 5.250%, 11/15/17 AMBAC Insured ......................... Aaa/AAA 756,704 Washoe County, Nevada Tax Revenue 210,000 5.000%, 12/01/23 MBIA Insured .......................... Aaa/AAA 220,153 Weber County Utah Sales Tax Revenue 385,000 5.000%, 07/01/23 AMBAC Insured ......................... Aaa/NR 413,001 West Valley City, Utah Redevelopment Agency Revenue 1,625,000 5.000%, 03/01/21 ....................................... NR/A- 1,715,318 320,000 5.000%, 03/01/22 ....................................... NR/A- 336,237 350,000 5.000%, 03/01/23 ....................................... NR/A- 366,072 1,000,000 5.000%, 03/01/24 ....................................... NR/A- 1,041,920 West Valley City, Utah Sales Tax Revenue ............... 800,000 5.500%, 07/15/17 MBIA Insured .......................... Aaa/AAA 883,488 250,000 5.000%, 07/15/20 AMBAC Insured ......................... Aaa/AAA 267,865 180,000 5.000%, 07/15/21 MBIA Insured .......................... Aaa/AAA 191,034 1,400,000 6.000%, 03/01/24 (pre-refunded) ........................ NR/A- 1,487,052 Woodland Hills, Utah Special Assessment Revenue 93,000 5.500%, 08/01/09 ....................................... NR/NR* 95,135 221,000 5.500%, 08/01/10 ....................................... NR/NR* 227,780 233,000 5.500%, 08/01/11 ....................................... NR/NR* 242,362 246,000 5.500%, 08/01/12 ....................................... NR/NR* 256,512 261,000 5.500%, 08/01/13 ....................................... NR/NR* 273,450 ------------- Total Tax Revenue 46,143,557 -------------
RATING FACE MOODY'S/ AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- TRANSPORTATION (0.8%) Port of Seattle, Washington Revenue $ 100,000 5.100%, 04/01/24 AMT FGIC Insured ...................... Aaa/AAA $ 102,569 Utah Transit Authority Sales Tax & Transportation Revenue 1,000,000 5.400%, 12/15/16 FSA Insured ........................... NR/AAA 1,066,360 100,000 5.000%, 06/15/21 FSA Insured ........................... Aaa/AAA 107,378 100,000 5.000%, 06/15/25 FSA Insured ........................... Aaa/AAA 105,983 ------------- Total Transportation 1,382,290 ------------- UTILITY (10.7%) Indianapolis, Indiana Gas Utility Revenue 290,000 5.000%, 08/15/24 AMBAC Insured ......................... Aaa/AAA 302,957 Intermountain Power Agency Utilities Light & Power Service, Utah 450,000 5.000%, 07/01/12 MBIA Insured ETM ...................... Aaa/AAA 456,102 1,470,000 5.250%, 07/01/15 MBIA Insured .......................... Aaa/AAA 1,576,369 90,000 5.000%, 07/01/16 ....................................... A1/A+ 93,144 425,000 5.000%, 07/01/18 FSA Insured ........................... Aaa/AAA 461,367 1,380,000 5.000%, 07/01/19 MBIA Insured .......................... Aaa/AAA 1,454,161 2,450,000 5.000%, 07/01/21 ....................................... A1/A+ 2,523,231 445,000 5.000%, 07/01/23 FSA Insured ........................... Aaa/AAA 458,341 Lower Colorado River Authority, Texas Revenue 175,000 5.000%, 05/15/26 FSA Insured ........................... Aaa/AAA 186,489 Manti City, Utah Electric System Revenue 603,000 5.750%, 02/01/17 ....................................... NR/NR* 633,120 Murray City, Utah Utility Electric Revenue 400,000 5.625%, 06/01/18 AMBAC Insured ......................... Aaa/NR 443,164 1,340,000 5.000%, 06/01/25 AMBAC Insured ......................... Aaa/NR 1,438,450 St. George, Utah Electric Revenue 1,910,000 4.500%, 06/01/20 FSA Insured ........................... Aaa/NR 1,984,223 Salem, Utah Electric Revenue 125,000 5.300%, 11/01/07 ....................................... NR/NR* 128,977 130,000 5.350%, 11/01/08 ....................................... NR/NR* 136,097 140,000 5.400%, 11/01/09 ....................................... NR/NR* 147,696 Seattle, Washington Municipal Light & Power Revenue 1,360,000 4.500%, 08/01/19 FSA Insured ........................... Aaa/AAA 1,420,738
RATING FACE MOODY'S/ AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- UTILITY (CONTINUED) Southern Utah Valley Power System Revenue $ 210,000 5.250%, 09/15/13 MBIA Insured .......................... NR/AAA $ 234,874 225,000 5.250%, 09/15/14 MBIA Insured .......................... NR/AAA 251,651 235,000 5.250%, 09/15/15 MBIA Insured .......................... NR/AAA 262,041 185,000 5.125%, 09/15/21 MBIA Insured .......................... NR/AAA 199,563 Springville, Utah Electric Revenue 550,000 5.600%, 03/01/09 ....................................... Baa1/NR 582,285 Utah Assessed Municipal Power System Revenue 790,000 5.250%, 12/01/09 ....................................... NR/A- 844,265 1,000,000 5.000%, 04/01/21 FSA Insured ........................... Aaa/AAA 1,072,790 Washington, Utah Electric Revenue 985,000 5.000%, 09/01/21 XLCA Insured .......................... Aaa/NR 1,063,741 ------------- Total Utility 18,355,836 ------------- WATER AND SEWER (11.3%) Ashley Valley, Utah 230,000 9.500%, 01/01/08 AMBAC Insured ......................... Aaa/AAA 247,583 Eagle Mountain, Utah Water and Sewer 750,000 5.800%, 11/15/16 ACA Insured ........................... NR/A 810,750 Granger and Hunter, Utah Improvement District Water and Sewer 350,000 5.000%, 03/01/18 FSA Insured (pre-refunded) ............ Aaa/NR 369,908 Mesquite, Texas Waterworks & Sewer Revenue 225,000 4.500%, 03/01/24 FSA Insured ........................... Aaa/AAA 228,863 Murray City, Utah Sewer and Water Revenue 465,000 5.000%, 10/01/17 AMBAC Insured ......................... Aaa/NR 506,864 390,000 5.000%, 10/01/18 AMBAC Insured ......................... Aaa/NR 422,522 440,000 5.000%, 10/01/19 AMBAC Insured ......................... Aaa/NR 476,366 North Davis County, Utah Sewer District 1,330,000 5.375%, 03/01/18 AMBAC Insured (pre-refunded) .......... Aaa/NR 1,500,346 1,350,000 5.000%, 03/01/21 AMBAC Insured ......................... Aaa/NR 1,458,108 150,000 5.125%, 03/01/22 AMBAC Insured (pre-refunded) .......... Aaa/NR 166,983 Orem, Utah Water & Storm Sewer Revenue 1,720,000 4.500%, 07/15/17 MBIA Insured .......................... Aaa/AAA 1,815,168 Riverton, Utah Water Revenue 100,000 5.350%, 09/01/15 FGIC Insured (pre-refunded) ........... Aaa/NR 110,937
RATING FACE MOODY'S/ AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- WATER AND SEWER (CONTINUED) Salt Lake City, Utah Metropolitan Water Revenue $ 1,200,000 5.375%, 07/01/24 AMBAC Insured (pre-refunded) .......... Aaa/AAA $ 1,311,036 125,000 5.375%, 07/01/29 AMBAC Insured (pre-refunded) .......... Aaa/AAA 136,566 Salt Lake City, Utah Water and Sewer Revenue 500,000 5.750%, 02/01/13 AMBAC Insured (pre-refunded) ......... Aaa/AAA 501,160 675,000 5.000%, 02/01/19 FSA Insured ........................... Aaa/AAA 732,726 845,000 5.000%, 02/01/20 FSA Insured ........................... Aaa/AAA 913,411 Salt Lake & Sandy, Utah Water District 1,000,000 5.000%, 07/01/20 AMBAC Insured ......................... Aaa/NR 1,084,280 Spanish Fork City, Utah Water Revenue 195,000 5.500%, 06/01/17 FSA Insured ........................... Aaa/NR 218,472 55,000 5.500%, 06/01/17 FSA Insured (pre-refunded) ............ Aaa/NR 62,704 Upper Trinity Regional Water District, Texas 205,000 4.500%, 08/01/20 AMBAC Insured ......................... Aaa/AAA 211,624 Utah Water Finance Agency Revenue 100,000 5.000%, 06/01/14 MBIA Insured .......................... Aaa/AAA 105,290 200,000 5.250%, 07/01/16 AMBAC Insured ......................... Aaa/NR 221,656 250,000 5.375%, 09/01/17 AMBAC Insured ......................... Aaa/NR 280,723 310,000 5.000%, 10/01/17 AMBAC Insured ......................... Aaa/NR 334,952 500,000 5.250%, 10/01/18 AMBAC Insured ......................... Aaa/NR 554,805 465,000 5.000%, 10/01/20 AMBAC Insured ......................... Aaa/NR 497,555 830,000 4.500%, 10/01/22 AMBAC Insured ......................... Aaa/NR 855,041 100,000 5.125%, 07/01/23 AMBAC Insured ......................... Aaa/NR 107,112 285,000 5.300%, 10/01/23 MBIA Insured (pre-refunded) ........... Aaa/AAA 306,794 870,000 4.500%, 10/01/23 AMBAC Insured ......................... Aaa/NR 893,429 450,000 5.400%, 10/01/24 AMBAC Insured (pre-refunded) .......... Aaa/AAA 493,016 250,000 5.500%, 10/01/29 AMBAC Insured (pre-refunded) .......... Aaa/AAA 274,885 Weber-Box Elder, Utah Conservation District Water Revenue 200,000 6.450%, 11/01/14 (pre-refunded) ........................ Baa3/NR 231,976 200,000 6.500%, 11/01/19 (pre-refunded) ........................ Baa3/NR 232,462 335,000 6.900%, 11/01/20 (pre-refunded) ........................ Baa3/NR 395,886
RATING FACE MOODY'S/ AMOUNT REVENUE BONDS (CONTINUED) S&P VALUE - ---------------- -------------------------------------------------------- --------- ------------- WATER AND SEWER (CONTINUED) White City, Utah Water Improvement $ 300,000 5.90%, 02/01/22 AMBAC Insured (pre-refunded) ........... Aaa/AAA $ 308,544 ------------- Total Water and Sewer 19,380,503 ------------- Total Revenue Bonds 131,872,258 ------------- Total Investments (cost $162,234,383**) ................ 98.2% 168,572,221 Other assets less liabilities 1.8 3,027,410 ----- ------------- Net Assets 100.0% $ 171,599,631 ===== ============= Portfolio Distribution by Quality Rating (unaudited) Highest rating(1) .......................................... 76.4% Second highest rating(2) ................................... 4.1 Third highest rating(3) .................................... 5.9 Fourth highest rating(4) ................................... 3.4 Not rated* ................................................. 10.2 ----- 100.0% =====
(1) Aaa of Moody's or AAA of S&P. (2) Aa of Moody's or AA of S&P. (3) A of Moody's or S&P. (4) Baa of Moody's or BBB of S&P. * Any security not rated (NR) by either credit rating service must be determined by the Manager to have sufficient quality to be ranked in the top four ratings if a credit rating were to be assigned by a rating service. ** See note 4. + Security pledged as collateral for the Fund's when - issued commitments. ++ Security traded on a "when-issued" basis. PORTFOLIO ABBREVIATIONS: ------------------------ ACA - American Capital Assurance Financial Guaranty Corp. AMBAC - American Municipal Bond Assurance Corp. AMT- Alternative Minimum Tax ETM- Escrowed to Maturity FGIC- Financial Guaranty Insurance Co. FSA- Financial Security Assurance GNMA- Government National Mortgage Association LOC- Letter of Credit MBIA- Municipal Bond Investors Assurance NR- Not Rated XLCA- XL Capital Assurance See accompanying notes to financial statements. TAX-FREE FUND FOR UTAH STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 2005 ASSETS Investments at value (cost $162,234,383) ........................................... $ 168,572,221 Cash ............................................................................... 2,589,500 Interest receivable ................................................................ 2,528,895 Receivable for Fund shares sold .................................................... 953,333 Receivable for investment securities sold .......................................... 400,000 Other assets ....................................................................... 2,864 ------------- Total assets ....................................................................... 175,046,813 ------------- LIABILITIES Payable for investment securities purchased ........................................ 2,955,279 Dividends payable .................................................................. 155,729 Payable for Fund shares redeemed ................................................... 148,324 Distribution and service fees payable .............................................. 85,793 Management fees payable ............................................................ 24,772 Accrued expenses ................................................................... 77,285 ------------- Total liabilities .................................................................. 3,447,182 ------------- NET ASSETS ............................................................................. $ 171,599,631 ============= Net Assets consist of: Capital Stock - Authorized an unlimited number of shares, par value $0.01 per share $ 167,170 Additional paid-in capital ......................................................... 167,952,342 Net unrealized appreciation on investments (note 4) ................................ 6,337,838 Accumulated net realized loss on investments ....................................... (2,740,549) Distributions in excess of net investment income ................................... (117,170) ------------- $ 171,599,631 ============= CLASS A Net Assets ......................................................................... $ 126,091,449 ============= Capital shares outstanding ......................................................... 12,286,791 ============= Net asset value and redemption price per share ..................................... $ 10.26 ============= Offering price per share (100/96 of $10.26 adjusted to nearest cent) ............... $ 10.69 ============= CLASS C Net Assets ......................................................................... $ 27,580,578 ============= Capital shares outstanding ......................................................... 2,688,582 ============= Net asset value and offering price per share ....................................... $ 10.26 ============= Redemption price per share (*a charge of 1% is imposed on the redemption proceeds of the shares, or on the original price, whichever is lower, if redeemed during the first 12 months after purchase) ...................................... $ 10.26* ============= CLASS Y Net Assets ......................................................................... $ 17,927,604 ============= Capital shares outstanding ......................................................... 1,741,641 ============= Net asset value, offering and redemption price per share ........................... $ 10.29 =============
See accompanying notes to financial statements. TAX-FREE FUND FOR UTAH STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2005 INVESTMENT INCOME: Interest income ............................................ $ 6,581,831 Expenses: Management fee (note 3) .................................... $ 720,074 Distribution and service fees (note 3) ..................... 460,389 Transfer and shareholder servicing agent fees .............. 92,319 Fund accounting fees ....................................... 66,178 Legal fees (note 3) ........................................ 57,754 Trustees' fees and expenses (note 8) ....................... 56,802 Shareholders' reports and proxy statements ................. 49,568 Custodian fees ............................................. 36,268 Auditing and tax fees ...................................... 24,850 Registration fees and dues ................................. 11,868 Insurance .................................................. 8,353 Chief compliance officer (note 3) .......................... 3,399 Miscellaneous .............................................. 17,957 Total expenses ............................................. 1,605,779 ------------- Management fee waived (note 3) ............................. (585,160) Expenses paid indirectly (note 6) .......................... (36,268) ------------- Net expenses ............................................... 984,351 ------------- Net investment income ...................................... 5,597,480 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from securities transactions ...... 339,699 Change in unrealized appreciation on investments ........... 4,737,661 ------------- Net realized and unrealized gain (loss) on investments ..... 5,077,360 ------------- Net increase in net assets resulting from operations ............. $ 10,674,840 =============
See accompanying notes to financial statements. TAX-FREE FUND FOR UTAH STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED JUNE 30, 2005 JUNE 30, 2004 ------------- ------------- OPERATIONS: Net investment income ......................................... $ 5,597,480 $ 4,722,829 Net realized gain (loss) from securities transactions ......... 339,699 (365,387) Change in unrealized appreciation on investments .............. 4,737,661 (3,968,215) Change in net assets from operations ....................... 10,674,840 389,227 DISTRIBUTIONS TO SHAREHOLDERS (note 10): Class A Shares: Net investment income ......................................... (4,664,445) (4,242,881) Class C Shares: Net investment income ......................................... (844,820) (733,873) Class Y Shares: Net investment income ......................................... (481,279) (83,837) ------------- ------------- Change in net assets from distributions .................... (5,990,544) (5,060,591) ------------- ------------- CAPITAL SHARE TRANSACTIONS (note 7): Proceeds from shares sold ..................................... 61,124,699 57,964,198 Reinvested dividends and distributions ........................ 3,507,838 2,768,847 Cost of shares redeemed ....................................... (22,013,872) (34,397,531) ------------- ------------- Change in net assets from capital share transactions ....... 42,618,665 26,335,514 ------------- ------------- Change in net assets ....................................... 47,302,961 21,664,150 NET ASSETS: Beginning of period ........................................... 124,296,670 102,632,520 ------------- ------------- End of period* ................................................ $ 171,599,631 $ 124,296,670 ============= ============= * Includes distributions in excess of net investment income of: $ (117,170) $ (108,192) ============= =============
See accompanying notes to financial statements. TAX-FREE FUND FOR UTAH NOTES TO FINANCIAL STATEMENTS JUNE 30, 2005 1. ORGANIZATION Tax-Free Fund For Utah (the "Fund"), a non-diversified, open-end investment company, was organized on December 12, 1990 as a Massachusetts business trust and commenced operations on July 24, 1992. The Fund is authorized to issue an unlimited number of shares and, since its inception to May 21, 1996, offered only one class of shares. On that date, the Fund began offering two additional classes of shares, Class C and Class Y Shares. All shares outstanding prior to that date were designated as Class A Shares and are sold with a front-payment sales charge and bear an annual distribution fee. Class C Shares are sold with a level-payment sales charge with no payment at time of purchase but level service and distribution fees from date of purchase through a period of six years thereafter. A contingent deferred sales charge of 1% is assessed to any Class C shareholder who redeems shares of this Class within one year from the date of purchase. Class C Shares, together with a pro-rata portion of all Class C Shares acquired through reinvestment of dividends and other distributions paid in additional Class C Shares, automatically convert to Class A Shares after 6 years. The Class Y Shares are only offered to institutions acting for an investor in a fiduciary, advisory, agency, custodian or similar capacity and are not offered directly to retail investors. Class Y Shares are sold at net asset value without any sales charge, redemption fees, contingent deferred sales charge or distribution or service fees. On October 31, 1997, the Fund established Class I Shares which are offered and sold only through financial intermediaries and are not offered directly to retail investors. As of the report date, there were no Class I Shares outstanding. All classes of shares represent interests in the same portfolio of investments and are identical as to rights and privileges but differ with respect to the effect of sales charges, the distribution and/or service fees borne by each class, expenses specific to each class, voting rights on matters affecting a single class and the exchange privileges of each class. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America for investment companies. a) PORTFOLIO VALUATION: Municipal securities which have remaining maturities of more than 60 days are valued each business day based upon information provided by a nationally prominent independent pricing service and periodically verified through other pricing services. In the case of securities for which market quotations are readily available, securities are valued by the pricing service at the mean of bid and asked quotations. If market quotations or a valuation from the pricing service is not readily available, the security is valued at fair value determined under procedures established by and under the general supervision of the Board of Trustees. Securities which mature in 60 days or less are valued at amortized cost if their term to maturity at purchase is 60 days or less, or by amortizing their unrealized appreciation or depreciation on the 61st day prior to maturity, if their term to maturity at purchase exceeds 60 days. b) SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME: Securities transactions are recorded on the trade date. Realized gains and losses from securities transactions are reported on the identified cost basis. Interest income is recorded daily on the accrual basis and is adjusted for amortization of premium and accretion of original issue and market discount. c) FEDERAL INCOME TAXES: It is the policy of the Fund to qualify as a regulated investment company by complying with the provisions of the Internal Revenue Code applicable to certain investment companies. The Fund intends to make distributions of income and securities profits sufficient to relieve it from all, or substantially all, Federal income and excise taxes. d) MULTIPLE CLASS ALLOCATIONS: All income, expenses (other than class-specific expenses), and realized and unrealized gains or losses are allocated daily to each class of shares based on the relative net assets of each class. Class-specific expenses, which include distribution and service fees and any other items that are specifically attributed to a particular class, are charged directly to such class. e) USE OF ESTIMATES: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. 3. FEES AND RELATED PARTY TRANSACTIONS a) MANAGEMENT ARRANGEMENTS: Aquila Investment Management LLC (the "Manager"), a wholly-owned subsidiary of Aquila Management Corporation, the Fund's founder and sponsor, serves as the Manager for the Fund under an Advisory and Administration Agreement with the Fund. Under the Advisory and Administration Agreement, the Manager provides all investment management and administrative services to the Fund. The Manager's services include providing the office of the Fund and all related services as well as managing relationships with all the various support organizations to the Fund such as the shareholder servicing agent, custodian, legal counsel, fund accounting agent, auditors and distributor. For its services, the Manager is entitled to receive a fee which is payable monthly and computed as of the close of business each day at the annual rate of 0.50 of 1% on the Fund's average net assets. For the year ended June 30, 2005, the Fund incurred management fees of $720,074 of which $585,160 was voluntarily waived. Such waivers are voluntary and can be terminated in the future at the Manager's discretion. However, the Manager has indicated that it intends to continue waiving fees as necessary in order that the Fund will remain competitive. Under a Compliance Agreement with the Manager, the Manager is compensated for Chief Compliance Officer related services provided to enable the Fund to comply with Rule 38a-1 of the Investment Company Act of 1940. Specific details as to the nature and extent of the services provided by the Manager are more fully defined in the Fund's Prospectus and Statement of Additional Information. b) DISTRIBUTION AND SERVICE FEES: The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 (the "Rule") under the Investment Company Act of 1940, as amended. Under one part of the Plan, with respect to Class A Shares, the Fund is authorized to make distribution fee payments to broker-dealers or others ("Qualified Recipients") selected by Aquila Distributors, Inc. (the "Distributor") including, but not limited to, any principal underwriter of the Fund, with which the Distributor has entered into written agreements contemplated by the Rule and which have rendered assistance in the distribution and/or retention of the Fund's shares or servicing of shareholder accounts. The Fund makes payment of this service fee at the annual rate of 0.20% of the Fund's average net assets represented by Class A Shares. For the year ended June 30, 2005, distribution fees on Class A Shares amounted to $217,992, of which the Distributor retained $4,043. Under another part of the Plan, the Fund is authorized to make payments with respect to Class C Shares to Qualified Recipients which have rendered assistance in the distribution and/or retention of the Fund's Class C shares or servicing of shareholder accounts. These payments are made at the annual rate of 0.75% of the Fund's average net assets represented by Class C Shares and for the year ended June 30, 2005, amounted to $181,798. In addition, under a Shareholder Services Plan, the Fund is authorized to make service fee payments with respect to Class C Shares to Qualified Recipients for providing personal services and/or maintenance of shareholder accounts. These payments are made at the annual rate of 0.25% of the Fund's average net assets represented by Class C Shares and for the year ended June 30, 2005 amounted to $60,599. The total of these payments with respect to Class C Shares amounted to $242,397, of which the Distributor retained $42,707. Specific details about the Plans are more fully defined in the Fund's Prospectus and Statement of Additional Information. Under a Distribution Agreement, the Distributor serves as the exclusive distributor of the Fund's shares. Through agreements between the Distributor and various broker-dealer firms ("dealers"), the Fund's shares are sold primarily through the facilities of these dealers having offices within Utah, with the bulk of sales commissions inuring to such dealers. For the year ended June 30, 2005, total commissions on sales of Class A Shares amounted to $858,772, of which the Distributor received $77,829. c) OTHER RELATED PARTY TRANSACTIONS: For the year ended June 30, 2005, the Fund incurred $56,393 of legal fees allocable to Hollyer Brady Barrett & Hines LLP, counsel to the Fund, for legal services in conjunction with the Fund's ongoing operations. The Secretary of the Fund is a Partner of Hollyer Brady Barrett & Hines LLP. 4. PURCHASES AND SALES OF SECURITIES During the year ended June 30, 2005, purchases of securities and proceeds from the sales of securities aggregated $55,157,265 and $12,326,310, respectively. At June 30, 2005, the aggregate tax cost for all securities was $162,195,824. At June 30, 2005, the aggregate gross unrealized appreciation for all securities in which there is an excess of market value over tax cost amounted to $6,396,312 and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over market value amounted to $19,914, for a net unrealized appreciation of $6,376,398. 5. PORTFOLIO ORIENTATION Since the Fund invests principally and may invest entirely in double tax-free municipal obligations of issuers within Utah, it is subject to possible risks associated with economic, political, or legal developments or industrial or regional matters specifically affecting Utah and whatever effects these may have upon Utah issuers' ability to meet their obligations. The Fund is also permitted to invest in tax-free municipal obligations of issuers in other states and U.S. territories meeting comparable quality standards and providing income which is exempt from both regular Federal and Utah income taxes. The general policy of the Fund is to invest in such securities only when comparable securities of Utah issuers are not available in the market. At June 30, 2005, the Fund had 85% of its net assets invested in State of Utah municipal issues. 6. EXPENSES The Fund has negotiated an expense offset arrangement with its custodian wherein it receives credit toward the reduction of custodian fees and other Fund expenses whenever there are uninvested cash balances. The Statement of Operations reflects the total expenses before any offset, the amount of offset and the net expenses. It is the general intention of the Fund to invest, to the extent practicable, some or all of cash balances in income-producing assets rather than leave cash on deposit. 7. CAPITAL SHARE TRANSACTIONS Transactions in Capital Shares of the Fund were as follows:
YEAR ENDED YEAR ENDED JUNE 30, 2005 JUNE 30, 2004 ----------------------------- ----------------------------- SHARES AMOUNT SHARES AMOUNT ------------ ------------ ------------ ------------ CLASS A SHARES: Proceeds from shares sold 3,901,386 $ 39,687,818 3,786,483 $ 38,300,080 Reinvested distributions 277,575 2,823,980 227,183 2,293,880 Cost of shares redeemed . (1,384,213) (14,072,096) (2,800,659) (28,028,537) ------------ ------------ ------------ ------------ Net change ........... 2,794,748 28,439,702 1,213,007 12,565,423 ------------ ------------ ------------ ------------ CLASS C SHARES: Proceeds from shares sold 825,234 8,390,613 1,087,383 11,056,567 Reinvested distributions 48,338 491,581 42,247 426,325 Cost of shares redeemed . (401,020) (4,069,806) (507,597) (5,107,857) ------------ ------------ ------------ ------------ Net change ........... 472,552 4,812,388 622,033 6,375,035 ------------ ------------ ------------ ------------ CLASS Y SHARES: Proceeds from shares sold 1,275,070 13,046,268 864,901 8,607,551 Reinvested distributions 18,832 192,277 4,819 48,642 Cost of shares redeemed . (380,156) (3,871,970) (127,200) (1,261,137) ------------ ------------ ------------ ------------ Net change ........... 913,746 9,366,575 742,520 7,395,056 ------------ ------------ ------------ ------------ Total transactions in Fund shares .................. 4,181,046 $ 42,618,665 2,577,560 $ 26,335,514 ============ ============ ============ ============
8. TRUSTEES' FEES AND EXPENSES At June 30, 2005 there were 7 Trustees, two of which are affiliated with the Manager and are not paid any fees. The total amount of Trustees' service and attendance fees paid during the year ended June 30, 2005 was $44,400, to cover carrying out their responsibilities and attendance at regularly scheduled quarterly Board Meetings and meetings of the Independent Trustees held prior to each quarterly Board Meeting. When additional or special meetings are held, the meeting fees are paid to those Trustees in attendance. Trustees are reimbursed for their expenses such as travel, accommodations, and meals incurred in connection with attendance at Board Meetings and the Annual Meeting of Shareholders. For the fiscal year ended June 30, 2005, such meeting-related expenses amounted to $12,402. 9. SECURITIES TRADED ON A WHEN-ISSUED BASIS The Fund may purchase or sell securities on a when-issued basis. When-issued transactions arise when securities are purchased or sold by the Fund with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price and yield to the Fund at the time of entering into the transaction. Beginning on the date the Fund enters into a when-issued transaction, cash or other liquid securities are segregated in an amount equal to or greater than the amount of the when-issued transaction. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities. 10. INCOME TAX INFORMATION AND DISTRIBUTIONS The Fund declares dividends daily from net investment income and makes payments monthly in additional shares at the net asset value per share, in cash, or in a combination of both, at the shareholder's option. Net realized capital gains, if any, are distributed annually and are taxable. The Fund intends to maintain, to the maximum extent possible, the tax-exempt status of interest payments received from portfolio municipal securities in order to allow dividends paid to shareholders from net investment income to be exempt from regular Federal and State of Utah income taxes. However, due to differences between financial statement reporting and Federal income tax reporting requirements, distributions made by the Fund may not be the same as the Fund's net investment income, and/or net realized securities gains. In this regard, the Fund credited distributions in excess of net investment income in the amount of $384,086 and debited additional paid-in capital in the amount of $384,086 at June 30, 2005. This adjustment had no impact on the Fund's aggregate net assets at June 30, 2005. Further, a small portion of the dividends may, under some circumstances, be subject to taxes at ordinary income rates. For certain shareholders some dividend income may, under some circumstances, be subject to the alternative minimum tax. At June 30, 2005, the Fund had a capital loss carryover of $2,740,548 of which $11,866 expires on June 30, 2008, $2,459,398 expires on June 30, 2009, $15,469 expires on June 30, 2011, and $253,815 expires on June 30, 2012. This carryover is available to offset future net realized gains on securities transactions to the extent provided for in the Internal Revenue Code. To the extent that this loss is used to offset future realized capital gains, it is probable that the gains so offset will not be distributed. The tax character of distributions: YEAR ENDED JUNE 30, 2005 2004 ---------- ---------- Net tax-exempt income $5,604,701 $4,758,187 Ordinary income 385,843 302,404 ---------- ---------- $5,990,544 $5,060,591 ========== ========== As of June 30, 2005, the components of distributable earnings on a tax basis were as follows: Accumulated net realized loss $(2,740,549) Unrealized appreciation 6,376,398 ----------- $ 3,635,849 =========== At June 30, 2005, the difference between book basis and tax basis unrealized appreciation was attributable primarily to the treatment of accretion of discounts and amortization of premiums. 11. CHANGE IN PRINCIPAL ACCOUNTANTS KPMG LLP was previously the principal accountants for the Tax-Free Fund For Utah (the "Fund"). On July 27, 2005 KPMG LLP declined to stand for reelection and Tait, Weller and Baker was engaged as the principal accountants to audit the Fund's financial statements for the fiscal year of 2006. The decision was made by the Audit Committee of the Board of Trustees. The audit reports of KPMG LLP on the Fund's financial statements as of and for the years ended June 30, 2005 and 2004 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. In connection with the audits of the two fiscal years ended June 30, 2005 and 2004 and the subsequent interim period through August 12, 2005, there were no reportable events or disagreements with KPMG LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to the satisfaction of KPMG LLP would have caused them to make reference in connection with their opinion to the subject matter of the disagreements. TAX-FREE FUND FOR UTAH FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A ---------------------------------------------------------------------------- YEAR ENDED JUNE 30, ---------------------------------------------------------------------------- 2005 2004 2003 2002 2001 ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of period ........... $ 9.91 $ 10.31 $ 9.85 $ 9.65 $ 9.35 ----------- ----------- ----------- ----------- ----------- Income (loss) from investment operations: Net investment income ...................... 0.41+ 0.43++ 0.44+ 0.46+ 0.48+ Net gain (loss) on securities (both realized and unrealized) ......................... 0.38 (0.37) 0.48 0.22 0.32 ----------- ----------- ----------- ----------- ----------- Total from investment operations ........... 0.79 0.06 0.92 0.68 0.80 ----------- ----------- ----------- ----------- ----------- Less distributions (note 10): Dividends from net investment income ....... (0.44) (0.46) (0.46) (0.48) (0.50) Distributions from capital gains ........... -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- Total distributions ........................ (0.44) (0.46) (0.46) (0.48) (0.50) ----------- ----------- ----------- ----------- ----------- Net asset value, end of period ................. $ 10.26 $ 9.91 $ 10.31 $ 9.85 $ 9.65 =========== =========== =========== =========== =========== Total return (not reflecting sales charge) ..... 8.06% 0.54% 9.55% 7.22% 8.72% Ratios/supplemental data Net assets, end of period (in thousands) ... $ 126,091 $ 94,103 $ 85,329 $ 55,957 $ 34,321 Ratio of expenses to average net assets .... 0.59% 0.48% 0.43% 0.46% 0.48% Ratio of net investment income to average net assets .............................. 3.98% 4.19% 4.31% 4.65% 4.95% Portfolio turnover rate .................... 8.68% 15.98% 6.43% 27.42% 44.17% The expense and net investment income ratios without the effect of the voluntary waiver of a portion of the management fee and the voluntary expense reimbursement were (note 3): Ratio of expenses to average net assets .... 0.97% 0.94% 1.02% 1.00% 1.11% Ratio of net investment income to average net assets .............................. 3.60% 3.73% 3.72% 4.11% 4.32% The expense ratios after giving effect to the waiver, reimbursement and expense offset for uninvested cash balances were: Ratio of expenses to average net assets .... 0.56% 0.47% 0.42% 0.40% 0.39%
- ---------- Note: Effective August 1, 2001, Aquila Management Corporation became the Fund's Investment Adviser replacing Zions First National Bank which was the sub-adviser. Effective January 1, 2004, Aquila Management Corporation, founder of the Fund, assigned its Advisory and Administration Agreement to its wholly-owned subsidiary, Aquila Investment Management LLC. + Per share amounts have been calculated using the monthly average shares method. ++ Per share amount calculated using the daily average shares method. See accompanying notes to financial statements. FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
CLASS C -------------------------------------------------------------------------- YEAR ENDED JUNE 30, -------------------------------------------------------------------------- 2005 2004 2003 2002 2001 ---------- ---------- ---------- ---------- ---------- Net asset value, beginning of period ....... $ 9.91 $ 10.30 $ 9.85 $ 9.64 $ 9.35 ---------- ---------- ---------- ---------- ---------- Income (loss) from investment operations: Net investment income .................. 0.32+ 0.34++ 0.34+ 0.37+ 0.38+ Net gain (loss) on securities (both realized and unrealized) ............ 0.38 (0.36) 0.48 0.23 0.31 ---------- ---------- ---------- ---------- ---------- Total from investment operations ........... 0.70 (0.02) 0.82 0.60 0.69 ---------- ---------- ---------- ---------- ---------- Less distributions (note 10): Dividends from net investment income ... (0.35) (0.37) (0.37) (0.39) (0.40) Distributions from capital gains ........... -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- Total distributions .................... (0.35) (0.37) (0.37) (0.39) (0.40) ---------- ---------- ---------- ---------- ---------- Net asset value, end of period ............. $ 10.26 $ 9.91 $ 10.30 $ 9.85 $ 9.64 ========== ========== ========== ========== ========== Total return (not reflecting sales charge) . 7.20% (0.16)% 8.48% 6.36% 7.52% Ratios/supplemental data Net assets, end of period (in thousands) $ 27,581 $ 21,961 $ 16,420 $ 6,694 $ 1,874 Ratio of expenses to average net assets 1.39% 1.27% 1.31% 1.34% 1.47% Ratio of net investment income to average net assets .................. 3.18% 3.38% 3.39% 3.72% 3.93% Portfolio turnover rate ................ 8.68% 15.98% 6.43% 27.42% 44.17% The expense and net investment income ratios without the effect of the voluntary waiver of a portion of the management fee and the voluntary expense reimbursement were (note 3): Ratio of expenses to average net assets 1.77% 1.74% 1.81% 1.78% 1.89% Ratio of net investment income to average net assets .................. 2.80% 2.93% 2.89% 3.28% 3.51% The expense ratios after giving effect to the waiver, reimbursement and expense offset for uninvested cash balances were: Ratio of expenses to average net assets .... 1.36% 1.27% 1.30% 1.28% 1.39% CLASS Y -------------------------------------------------------------------------- YEAR ENDED JUNE 30, -------------------------------------------------------------------------- 2005 2004 2003 2002 2001 ---------- ---------- ---------- ---------- ---------- Net asset value, beginning of period ....... $ 9.94 $ 10.34 $ 9.89 $ 9.68 $ 9.36 ---------- ---------- ---------- ---------- ---------- Income (loss) from investment operations: Net investment income .................. 0.42+ 0.44++ 0.42+ 0.50+ 0.49+ Net gain (loss) on securities (both realized and unrealized) ............ 0.39 (0.36) 0.50 0.20 0.34 ---------- ---------- ---------- ---------- ---------- Total from investment operations ........... 0.81 0.08 0.92 0.70 0.83 ---------- ---------- ---------- ---------- ---------- Less distributions (note 10): Dividends from net investment income ... (0.46) (0.48) (0.47) (0.49) (0.51) Distributions from capital gains ........... -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- Total distributions .................... (0.46) (0.48) (0.47) (0.49) (0.51) ---------- ---------- ---------- ---------- ---------- Net asset value, end of period ............. $ 10.29 $ 9.94 $ 10.34 $ 9.89 $ 9.68 ========== ========== ========== ========== ========== Total return (not reflecting sales charge) . 8.27% 0.76% 9.55% 7.41% 9.05% Ratios/supplemental data Net assets, end of period (in thousands) $ 17,928 $ 8,233 $ 883 $ 30 $ 5 Ratio of expenses to average net assets 0.39% 0.28% 0.30% 0.36% 0.42% Ratio of net investment income to average net assets .................. 4.15% 4.41% 4.17% 4.75% 4.83% Portfolio turnover rate ................ 8.68% 15.98% 6.43% 27.42% 44.17% The expense and net investment income ratios without the effect of the voluntary waiver of a portion of the management fee and the voluntary expense reimbursement were (note 3): Ratio of expenses to average net assets 0.77% 0.74% 0.78% 0.80% 0.64% Ratio of net investment income to average net assets .................. 3.78% 3.95% 3.70% 4.31% 4.62% The expense ratios after giving effect to the waiver, reimbursement and expense offset for uninvested cash balances were: Ratio of expenses to average net assets .... 0.37% 0.27% 0.29% 0.30% 0.36%
- ---------- Note: Effective August 1, 2001, Aquila Management Corporation became the Fund's Investment Adviser replacing Zions First National Bank which was the sub-adviser. Effective January 1, 2004, Aquila Management Corporation, founder of the Fund, assigned its Advisory and Administration Agreement to its wholly-owned subsidiary, Aquila Investment Management LLC. + Per share amounts have been calculated using the monthly average shares method. ++ Per share amount calculated using the daily average shares method. See accompanying notes to financial statements. ADDITIONAL INFORMATION (UNAUDITED) TRUSTEES(1) AND OFFICERS
NUMBER OF POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS HELD WITH IN FUND HELD BY TRUSTEE NAME, FUND AND PRINCIPAL COMPLEX(4) (THE POSITION HELD IS ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.) - ----------------- ---------- ------------------- ---------- --------------------- INTERESTED TRUSTEES(5) Lacy B. Herrmann Trustee Founder and Chairman of the Board, Aquila 8 Director or trustee, Pimco New York, NY since 1992 Management Corporation, the sponsoring Advisors VIT, Oppenheimer Quest (05/12/29) and Chairman of the organization and parent of the Manager or Value Funds Group, Oppenheimer Board of Trustees, Administrator and/or Adviser or Small Cap Value Fund, 1992-2005 Sub-Adviser to each fund of the Aquilasm Oppenheimer Midcap Fund, and Group of Funds(6); Chairman of the Oppenheimer Rochester Group of Manager or Administrator and/or Adviser Funds. or Sub-Adviser to each since 2004; Founder, Chairman Emeritus and Trustee of Aquila Rocky Mountain Equity Fund, Tax-Free Fund For Utah, Narragansett Insured Tax-Free Income Fund and Tax-Free Trust of Arizona; Founder and Chairman Emeritus of Hawaiian Tax-Free Trust, Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust, Pacific Capital U.S. Government Securities Cash Assets Trust, Tax-Free Fund of Colorado, Churchill Tax-Free Fund of Kentucky and Tax-Free Trust of Oregon; previously Chairman and a Trustee of each fund in the Aquilasm Group of Funds since its establishment until 2004 or 2005; Director of the Distributor since 1981 and formerly Vice President or Secretary, 1981-1998; Trustee Emeritus, Brown University and the Hopkins School; active in university, school and charitable organizations.
NUMBER OF POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS HELD WITH IN FUND HELD BY TRUSTEE NAME, FUND AND PRINCIPAL COMPLEX(4) (THE POSITION HELD IS ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.) - ----------------- ---------- ------------------- ---------- --------------------- Diana P. Herrmann Trustee Vice Chair and Chief Executive Officer of 10 None New York, NY since 1997 Aquila Management Corporation, Founder of (02/25/58) and President the Aquilasm Group of Funds and parent of since 1998 Aquila Investment Management LLC, Manager since 2004, President and Chief Operating Officer since 1997, a Director since 1984, Secretary since 1986 and previously its Executive Vice President, Senior Vice President or Vice President, 1986-1997; Chief Executive Officer and Vice Chair since 2004 and President, Chief Operating Officer and Manager of the Manager since 2003; Vice Chair, President, Executive Vice President or Senior Vice President of funds in the Aquilasm Group of Funds since 1986; Director of the Distributor since 1997; trustee, Reserve Money-Market Funds, 1999-2000 and Reserve Private Equity Series, 1998-2000; Governor, Investment Company Institute (2004) and head of its Small Funds Committee since 2004; active in charitable and volunteer organizations. NON-INTERESTED TRUSTEES Gary C. Cornia Chair of the Board Director, Romney Institute of Public 4 None Orem, UT of Trustees Management, Marriott School of (06/24/48) since 2005 Management, Brigham Young University, and Trustee 2004 - present; Professor, Marriott since 1993 School of Management, 1980 - present; Past President, the National Tax Association; Fellow, Lincoln Institute of Land Policy, 2002-2003; Associate Dean, Marriott School of Management, Brigham Young University, 1991-2000; Utah Governor's Tax Review Committee since 1993. William L. Ensign Trustee Planning and Architectural Consultant; 2 None Annapolis, MD since 1992 Acting Architect, United States Capitol (12/14/28) 1995-1997; formerly Assistant Architect; former trustee of various cultural organizations.
NUMBER OF POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS HELD WITH IN FUND HELD BY TRUSTEE NAME, FUND AND PRINCIPAL COMPLEX(4) (THE POSITION HELD IS ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.) - ----------------- ---------- ------------------- ---------- --------------------- Lyle W. Hillyard Trustee President of the law firm of Hillyard, 1 None Logan, UT since 2003 Anderson & Olsen, Logan, Utah, since (09/25/40) 1967; member of Utah Senate, 1985 to present, in the following positions: President, 2000, Senate Majority Leader, 1999-2000, Assistant Majority Whip, 1995-1998; served as Chairman of the following Senate Committees: Tax and Revenue, Senate Judiciary Standing, Joint Executive Appropriations, and Senate Rules; also Appropriations Subcommittees for Higher Education and for Public Education. John C. Lucking Trustee President, Econ-Linc, an economic 3 Director, Sanu Resources Phoenix, AZ since 2004 consulting firm, since 1995; formerly (05/20/43) Consulting Economist, Bank One Arizona and Chief Economist, Valley National Bank; member, Arizona's Joint Legislative Budget Committee Economic Advisory Panel and the Western Blue Chip Economic Forecast Panel; Board, Northern Arizona University Foundation since 1997; member, various historical, civic and economic associations.. Anne J. Mills Trustee President, Loring Consulting Company 4 None Castle Rock, CO since 1994 since 2001; Vice President for Business (12/23/38) Affairs, Ottawa University, 1992-2001; IBM Corporation, 1965-1991; Budget Review Officer, the American Baptist Churches/USA, 1994-1997; director, the American Baptist Foundation; Trustee, Ottawa University; and Trustee Emerita, Brown University.
NUMBER OF POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS HELD WITH IN FUND HELD BY TRUSTEE NAME, FUND AND PRINCIPAL COMPLEX(4) (THE POSITION HELD IS ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.) - ----------------- ---------- ------------------- ---------- --------------------- Charles E. Executive Vice Executive Vice President of all funds in N/A N/A Childs, III President the Aquilasm Group of Funds and the New York, NY since 2003 Manager and the Manager's parent since (04/01/57) 2003; formerly Senior Vice President, corporate development, Vice President, Assistant Vice President and Associate of the Manager's parent since 1987; Senior Vice President, Vice President or Assistant Vice President of the Aquila Money-Market Funds, 1988-2003. Jerry G. McGrew Senior Vice President of the Distributor since 1998, N/A N/A New York, NY President Registered Principal since 1993, Senior (06/18/44) since 1997 Vice President, 1997-1998 and Vice President, 1993-1997; Senior Vice President, Aquila Rocky Mountain Equity Fund and five Aquila Bond Funds since 1995; Vice President, Churchill Cash Reserves Trust, 1995-2001. Kimball L. Young Senior Vice Co-portfolio manager, Tax-Free Fund For N/A N/A Salt Lake City, UT President Utah since 2001; Co-founder, Lewis Young (08/07/46) since 1998 Robertson & Burningham, Inc., a NASD licensed broker/dealer providing public finance services to Utah local govern-ments, 1995-2001; Senior Vice President of two Aquila Bond Funds and Aquila Rocky Mountain Equity Fund; formerly Senior Vice President-Public Finance, Kemper Securities Inc., Salt Lake City, Utah. Thomas S. Albright Senior Vice Senior Vice President and Portfolio N/A N/A Louisville, KY President Manager, Churchill Tax-Free Fund of (07/26/52) since 2003 Kentucky since July 2000; Senior Vice and Vice President, Tax-Free Fund For Utah since President, 2003, Vice President, 2001-2003 and 2001-2003 co-portfolio manager since 2001; Vice President and backup portfolio manager, Tax-Free Trust of Arizona, since 2004; Vice President and Portfolio Manager, Banc One Investment Advisors, Inc., 1994-2000.
NUMBER OF POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS HELD WITH IN FUND HELD BY TRUSTEE NAME, FUND AND PRINCIPAL COMPLEX(4) (THE POSITION HELD IS ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.) - ----------------- ---------- ------------------- ---------- --------------------- Mary Kayleen Willis Vice President Vice President, Tax-Free Fund For Utah N/A N/A Salt Lake City, UT since 2003 since September 2003, Assistant Vice (06/11/63) and Assistant President, 2002-2003; Vice President, Vice President, Aquila Rocky Mountain Equity Fund, since 2002-2003 2004; various securities positions: Paine Webber, Inc., Salt Lake City, 1999-2002, Dean Witter Reynolds, Inc., Salt Lake City, 1996-1998. Stephen J. Caridi Assistant Vice Vice President of the Distributor since N/A N/A New York, NY President 1995; Vice President, Hawaiian Tax-Free (05/06/61) since 1993 Trust since 1998; Senior Vice President, Narragansett Insured Tax-Free Income Fund since 1998, Vice President, 1996-1997; Senior Vice President, Tax-Free Fund of Colorado since 2004; Assistant Vice President, Tax-Free Fund For Utah since 1993. Robert W. Anderson Chief Chief Compliance Officer of the Fund, the N/A N/A New York, NY Compliance Manager and the Distributor since 2004, (08/23/40) Officer since Compliance Officer of the Manager or its 2004 and predecessor and current parent since 1998 Assistant and Assistant Secretary of the Aquilasm Secretary Group of Funds since 2000; Consultant, since 2000 The Wadsworth Group, 1995-1998. Joseph P. DiMaggio Chief Financial Chief Financial Officer of the Aquilasm N/A N/A New York, NY Officer Group of Funds since 2003 and Treasurer (11/06/56) since 2003 since 2000; Controller, Van Eck Global and Treasurer Funds, 1993-2000. since 2000
NUMBER OF POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS HELD WITH IN FUND HELD BY TRUSTEE NAME, FUND AND PRINCIPAL COMPLEX(4) (THE POSITION HELD IS ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.) - ----------------- ---------- ------------------- ---------- --------------------- Edward M. W. Hines Secretary Partner, Hollyer Brady Barrett & Hines N/A N/A New York, NY since 1992 LLP, legal counsel to the Fund, since (12/16/39) 1989; Secretary of the Aquilasm Group of Funds. John M. Herndon Assistant Assistant Secretary of the Aquilasm Group N/A N/A New York, NY Secretary of Funds since 1995 and Vice President of (12/17/39) since 1995 the three Aquila Money-Market Funds since 1990; Vice President of the Manager or its predecessor and current parent since 1990. Lori A. Vindigni Assistant Assistant Treasurer of the Aquilasm Group N/A N/A New York, NY Treasurer of Funds since 2000; Assistant Vice (11/02/66) since 2000 President of the Manager or its predecessor and current parent since 1998; Fund Accountant for the Aquilasm Group of Funds, 1995-1998.
- ---------- (1) The Fund's Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request by calling 800-437-1020 (toll free). (2) The mailing address of each Trustee and officer is c/o Tax-Free Fund For Utah, 380 Madison Avenue, New York, NY 10017. (3) Each Trustee holds office until the next annual meeting of shareholders or until his or her successor is elected and qualifies. The term of office of each officer is one year. (4) Includes certain Aquila-sponsored funds that are dormant and have no public shareholders. (5) Mr. Herrmann is an interested person of the Fund as that term is defined in the 1940 Act as an officer of the Fund and a director, officer and shareholder of the Manager and as a shareholder and director of the Distributor. Ms. Herrmann is an interested person of the Fund as an officer of the Fund, as a director, officer and shareholder of the Manager and as a shareholder and director of the Distributor. Each is also an interested person as a member of the immediate family of the other. (6) In this material Pacific Capital Cash Assets Trust, Pacific Capital U.S. Government Securities Cash Assets Trust and Pacific Capital Tax-Free Cash Assets Trust, each of which is a money-market fund, are called the "Aquila Money-Market Funds"; Hawaiian Tax-Free Trust, Tax-Free Trust of Arizona, Tax-Free Trust of Oregon, Tax-Free Fund of Colorado, Churchill Tax-Free Fund of Kentucky, Narragansett Insured Tax-Free Income Fund and Tax-Free Fund For Utah, each of which is a tax-free municipal bond fund, are called the "Aquila Bond Funds"; Aquila Rocky Mountain Equity Fund is an equity fund; considered together, these 11 funds, which do not include the dormant funds described in footnote 4, are called the "Aquilasm Group of Funds. - -------------------------------------------------------------------------------- ANALYSIS OF EXPENSES (UNAUDITED) As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end sales charges with respect to Class A shares or contingent deferred sales charges ("CDSC") with respect to Class C shares; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. The tables below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The tables below are based on an investment of $1,000 invested on January 1, 2005 and held for the six months ended June 30, 2005. ACTUAL EXPENSES This table provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled "Expenses Paid During the Period". FOR THE SIX MONTHS ENDED JUNE 30, 2005 ACTUAL TOTAL RETURN BEGINNING ENDING EXPENSES WITHOUT ACCOUNT ACCOUNT PAID DURING SALES CHARGES(1) VALUE VALUE THE PERIOD(2) - -------------------------------------------------------------------------------- Class A 2.82% $1,000.00 $1,028.20 $3.05 - -------------------------------------------------------------------------------- Class C 2.42% $1,000.00 $1,024.20 $7.04 - -------------------------------------------------------------------------------- Class Y 2.92% $1,000.00 $1,029.20 $2.06 - -------------------------------------------------------------------------------- (1) ASSUMES REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS, IF ANY, AT NET ASSET VALUE AND DOES NOT REFLECT THE DEDUCTION OF THE APPLICABLE SALES CHARGES WITH RESPECT TO CLASS A SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES ("CDSC") WITH RESPECT TO CLASS C SHARES. TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE OF THE TOTAL RETURN FOR THE YEAR. (2) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF 0.61%, 1.41% AND 0.41% FOR THE FUND'S CLASS A, C AND Y SHARES, RESPECTIVELY, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 181/365 (TO REFLECT THE ONE-HALF YEAR PERIOD). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ANALYSIS OF EXPENSES (UNAUDITED) (CONTINUED) HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table below provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the Trust's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Trust and other mutual funds. To do so, compare this 5.00% hypothetical example relating to the Trust with the 5.00% hypothetical examples that appear in the shareholder reports of other mutual funds. Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, with respect to Class A shares. The example does not reflect the deduction of the applicable sales charges or contingent deferred sales charges ("CDSC") with respect to Class C shares. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transaction costs were included, your costs would have been higher. FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2004 HYPOTHETICAL ANNUALIZED BEGINNING ENDING EXPENSES TOTAL ACCOUNT ACCOUNT PAID DURING RETURN VALUE VALUE THE PERIOD(1) - -------------------------------------------------------------------------------- Class A 5.00% $1,000.00 $1,021.45 $3.59 - -------------------------------------------------------------------------------- Class C 5.00% $1,000.00 $1,017.20 $7.87 - -------------------------------------------------------------------------------- Class Y 5.00% $1,000.00 $1,022.20 $2.83 - -------------------------------------------------------------------------------- (1) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF 0.71%, 1.56% AND 0.56% FOR THE TRUST'S CLASS A, C AND Y SHARES, RESPECTIVELY, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 183/366 (TO REFLECT THE ONE-HALF YEAR PERIOD). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INFORMATION AVAILABLE (UNAUDITED) Much of the information that the funds in the Aquilasm Group of Funds produce is automatically sent to you and all other shareholders. Specifically, you are routinely sent the entire list of portfolio securities of your Fund twice a year in the semi-annual and annual reports you receive. Additionally, we prepare, and have available, portfolio listings at the end of each quarter. Whenever you may be interested in seeing a listing of your Fund's portfolio other than in your shareholder reports, please check our website (www.aquilafunds.com) or call us at 1-800-437-1020. The Fund additionally files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available free of charge on the SEC website at www.sec.gov. You may also review or, for a fee, copy the forms at the SEC's Public Reference Room in Washington, DC or by calling 800-SEC-0330. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PROXY VOTING RECORD (UNAUDITED) The Fund does not invest in equity securities. Accordingly, there were no matters relating to a portfolio security considered at any shareholder meeting held during the 12 months ended June 30, 2005 with respect to which the Fund was entitled to vote. Applicable regulations require us to inform you that the foregoing proxy voting information is available on the SEC website at http://www.sec.gov. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FEDERAL TAX STATUS OF DISTRIBUTIONS (UNAUDITED) This information is presented in order to comply with a requirement of the Internal Revenue Code AND NO CURRENT ACTION ON THE PART OF SHAREHOLDERS IS REQUIRED. For the fiscal year ended June 30, 2005, $5,604,701 of dividends paid by Tax-Free Fund For Utah, constituting 93.53% of total dividends paid during the fiscal year ended June 30, 2005, were exempt-interest dividends, and the balance was ordinary dividend income. Prior to January 31, 2005, shareholders were mailed IRS Form 1099-DIV which contained information on the status of distributions paid for the 2004 CALENDAR YEAR. Prior to January 31, 2006, shareholders will be mailed IRS Form 1099-DIV which will contain information on the status of distributions paid for the 2005 CALENDAR YEAR. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PRIVACY NOTICE (UNAUDITED) TAX-FREE FUND FOR UTAH OUR PRIVACY POLICY. In providing services to you as an individual who owns or is considering investing in shares of the Fund we collect certain nonpublic personal information about you. Our policy is to keep this information strictly safeguarded and confidential, and to use or disclose it only as necessary to provide services to you or as otherwise permitted by law. Our privacy policy applies equally to former shareholders and persons who inquire about a fund. INFORMATION WE COLLECT. "Nonpublic personal information" is personally identifiable financial information about you as an individual or your family. The kinds of nonpublic personal information we have about you may include the information you provide us on your share purchase application or in telephone calls or correspondence with us, and information about your fund transactions and holdings, how you voted your shares and the account where your shares are held. INFORMATION WE DISCLOSE. We disclose nonpublic personal information about you to companies that provide necessary services to us, such as the Fund's transfer agent, distributor, investment adviser or sub-adviser, as permitted or required by law, or as authorized by you. Any other use is strictly prohibited. We do not sell information about you or any of our fund shareholders to anyone. HOW WE SAFEGUARD YOUR INFORMATION. We restrict access to nonpublic personal information about you to only those persons who need it to provide services to you or who are permitted by law to receive it. We maintain physical, electronic and procedural safeguards to protect the confidentiality of all nonpublic personal information we have about you. If you have any questions regarding our Privacy Policy, please contact us at 1-800-437-1020. AQUILA DISTRIBUTORS, INC. AQUILA INVESTMENT MANAGEMENT LLC This Privacy Policy also has been adopted by Aquila Distributors, Inc. and Aquila Investment Management LLC and applies to all nonpublic information about you that each of these companies may obtain in connection with services provided to the Fund or to you as a shareholder of the Fund. - -------------------------------------------------------------------------------- (THIS PAGE INTENTIONALLY LEFT BLANK) FOUNDER AQUILA MANAGEMENT CORPORATION MANAGER AQUILA investment MANAGEMENT LLC 380 Madison Avenue, Suite 2300 New York, New York 10017 BOARD OF TRUSTEES Gary C. Cornia, Chair Lacy B. Herrmann William L. Ensign Diana P. Herrmann Lyle W. Hillyard John C. Lucking Anne J. Mills OFFICERS Diana P. Herrmann, President Jerry G. McGrew, Senior Vice President Kimball L. Young, Senior Vice President and Co-Portfolio Manager Thomas S. Albright, Senior Vice President and Co-Portfolio Manager M. Kayleen Willis, Vice President Robert W. Anderson, Chief Compliance Officer Joseph P. DiMaggio, Chief Financial Officer and Treasurer Edward M.W. Hines, Secretary DISTRIBUTOR AQUILA DISTRIBUTORS, INC. 380 Madison Avenue, Suite 2300 New York, New York 10017 CUSTODIAN BANK ONE TRUST COMPANY, N.A. 1111 Polaris Parkway Columbus, Ohio 43240 TRANSFER AND SHAREHOLDER SERVICING AGENT PFPC INC. 760 Moore Road King of Prussia, Pennsylvania 19406 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM KPMG LLP 345 Park Avenue New York, New York 10154 Further information is contained in the Prospectus, which must precede or accompany this report. ITEM 2. CODE OF ETHICS. (a) As of June 30, 2005 (the end of the reporting period) the Trust has adopted a code of ethics that applies to the Fund's principal executive officer(s)and principal financial officer(s) and persons performing similar functions ("Covered Officers") as defined in the Aquila Group of Funds Code of Ethics for Principal Executive and Senior Financial Officers under Section 406 of the Sarbanes-Oxley Act of 2002.; (f)(1) Pursuant to Item 10(a)(1), a copy of the Fund's Code of Ethics that applies to the Trust's principal executive officer(s) and principal financial officer(s) and persons performing similar functions is included as an exhibit to its annual report on this Form N-CSR; (f)(2) The text of the Fund's Code of Ethics that applies to the Fund's principal executive officer(s) and principal financial officer(s) and persons performing similar functions has been posted on its Internet website which can be found at the Fund's Internet address at aquilafunds.com. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. (a)(1)(ii) The Board of Trustees of the Fund has determined that it does not have at least one audit committee financial expert serving on its audit committee. The Fund does not have such a person serving on the audit committee because none of the persons currently serving as Trustees happens to have the technical accounting and auditing expertise included in the definition of "audit committee financial expert" recently adopted by the Securities and Exchange Commission in connection with this Form N-CSR, and the Board has not heretofore deemed it necessary to seek such a person for election to the Board. The primary mission of the Board, which is that of oversight over the operations and affairs of the Fund, confronts the Trustees with a wide and expanding range of issues and responsibilities. The Trustees believe that, accordingly, it is essential that the Board's membership consist of persons with as extensive experience as possible in fulfilling the duties and responsibilities of mutual fund directors and audit committee members and, ideally, with extensive experience and background relating to the economic and financial sectors and securities in which the Fund invests, including exposure to the financial and accounting matters commonly encountered with respect to those sectors and securities. The Board believes that its current membership satisfies those criteria. It recognizes that it would also be helpful to have a member with the relatively focused accounting and auditing expertise reflected in the applicable definition of "audit committee financial expert," just as additional members with similarly focused technical expertise in other areas relevant to the Fund's operations and affairs would also contribute added value. However, the Board believes that the Fund is better served, and its assets better employed, by a policy of hiring experts in various areas, including the specialized area of technical accounting and auditing matters, if and as the Board identifies the need, rather than by seeking to expand its numbers by adding technical experts in the areas constituting its domain of responsibility. The Fund's Audit Committee Charter explicitly authorizes the Committee to retain such experts as it deems necessary in fulfilling its duties under the Charter. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES a) Audit Fees - The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements were $17,000 in 2005 and $15,450 in 2004. b) Audit Related Fees - There were no amounts billed for audit-related fees over the past two years other than stated above. c) Tax Fees - The Registrant was billed by the principal accountant $7.755 and $8,392 in 2005 and 2004, respectively, for tax return preparation, tax compliance and tax planning. d) All Other Fees - There were no additional fees paid for audit and non- audit services other than those disclosed in a) thorough c) above. e)(1) Currently, the audit committee of the Registrant pre-approves audit services and fees on an engagement-by-engagement basis. e)(2) None of the services described in b) through d) above were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, all were pre-approved on an engagement-by-engagement basis. f) No applicable. g) There were no non-audit services fees billed by the Registrant's accountant to the Registrant's investment adviser or distributor over the past two years. h) Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) Based on their evaluation of the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) as of a date within 90 days of the fling of this report, the registrant's chief financial and executive officers have concluded that the disclosure controls and procedures of the registrant are appropriately designed to ensure that information required to be disclosed in the registrant's reports that are filed under the Securities Exchange Act of 1934 are accumulated and communicated to registrant's management, including its principal executive officer(s) and principal financial officer(s), to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the Securities and Exchange Commission. (b) There have been no significant changes in registrant's internal controls or in other factors that could significantly affect registrant's internal controls subsequent to the date of the most recent evaluation, including no significant deficiencies or material weaknesses that required corrective action. ITEM 10. EXHIBITS. (a)(1) (a)(1) Aquila Group of Funds Code of Ethics for Principal Executive and Senior Financial Officers under Section 406 of the Sarbanes-Oxley Act of 2002. (a)(2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. (b) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TAX-FREE FUND FOR UTAH By: /s/ Diana P. Herrmann - - --------------------------------- Vice Chair, President and Trustee September 9,2005 By: /s/ Joseph P. DiMaggio - - ----------------------------------- Chief Financial Officer and Treasurer September 9, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 And the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Diana P. Herrmann - - --------------------------------- Diana P. Herrmann Vice Chair, President and Trustee September 9, 2005 By: /s/ Joseph P. DiMaggio - - ----------------------------------- Joseph P. DiMaggio Chief Financial Officer and Treasurer September 9, 2005 TAX-FREE FUND FOR UTAH EXHIBIT INDEX (a)(1) Aquila Group of Funds Code of Ethics for Principal Executive and Senior Financial Officers under Section 406 of the Sarbanes-Oxley Act of 2002. (a) (2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. (b) Certification of chief executive officer and chief financial officer as required by Rule 30a-2(b) of the Investment Company Act of 1940. EX-99.906 CERT 2 tffu906cert.txt SECTION 906 CERTIFICATION CERTIFICATION Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18,United States Code), each of the undersigned officers of Tax-Free Fund For Utah, do hereby certify to such officer's knowledge, that: The report on Form N-CSR of Tax-Free Fund For Utah for the period ended June 30, 2005, (the "Form N-CSR") fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of Tax-Free Fund For Utah. Dated: September 9, 2005 /s/ Diana P. Herrmann ---------------------------------- Vice Chair, President and Trustee Tax-Free Fund For Utah Dated: September 9, 2005 /s/ Joseph P. DiMaggio ---------------------------------- Chief Financial Officer and Treasurer Tax-Free Fund For Utah A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Tax-Free Fund For Utah and will be retained by Tax-Free Fund For Utah and furnished to the Securities and Exchange Commission or its staff upon request. This certification is being furnished solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Report or as a separate disclosure document. EX-99.CERT 3 tffu306cert.txt SECTION 306 CERTIFICATION CERTIFICATIONS I, Diana P. Herrmann, certify that: 1. I have reviewed this report on Form N-CSR of Tax-Free Fund For Utah; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report ("Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: September 9, 2005 /s/ Diana P. Herrmann - - ---------------------- Title: Vice Chair, President and Trustee I, Joseph P. DiMaggio, certify that: 1. I have reviewed this report on Form N-CSR of Tax-Free Fund For Utah; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report ("Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: September 9, 2005 /s/ Joseph P. DiMaggio - - ------------------------ Title: Chief Financial Officer and Treasurer EX-99.CODE ETH 4 sarbanes.txt SARBANES-OXLEY CODE OF ETHICS AQUILASM GROUP OF FUNDS CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS UNDER SECTION 406 OF THE SARBANES-OXLEY ACT OF 2002 I. Covered Officers/Purpose of the Code This is the code of ethics (the "Code") for the investment companies within the Aquilasm Group of Funds (collectively, "Funds" and each, a "Fund," each of which is detailed in Exhibit A). It applies to the Fund's Principal Executive Officer(s) and Principal Financial Officer(s) (the "Covered Officers," each of whom is listed in Exhibit B), for the purpose of promoting: *honest and ethical conduct, including the ethical handling of actual; *or apparent conflicts of interest between personal and professional relationships; *full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Fund; *compliance with applicable laws and governmental rules and regulations; *the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and *accountability for adherence to the Code. Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. II. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest Overview. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his/her service to, the Fund. For example, a conflict of interest would arise if a Covered Officer, or a member of his/her family, receives improper personal benefits as a result of his/her position with the Fund. Certain conflicts of interest arise out of the relationships between Covered Officers and the Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Fund because of their status as "affiliated persons" of the Fund. The Fund's and the investment adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Fund and the investment adviser of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Fund or for the adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the adviser and the Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Fund and the adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Fund. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds' Boards of Trustees ("Boards") that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Fund. Each Covered Officer must: *not use his/her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would benefit personally to the detriment of the Fund; *not cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit the Fund; There are some conflict of interest situations that should always be discussed with the general counsel of the Fund ("General Counsel"), if material. Examples of these include: *service as a director on the board of any public or private company; *the receipt of any non-nominal gifts; *the receipt of any entertainment from any company with which the Fund has current or prospective business dealings unless such entertainment is business- related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; *any ownership interest in, or any consulting or employment relationship with, any of the Fund's service providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof; *a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. III. Disclosure and Compliance Each Covered Officer should familiarize himself/herself with the disclosure requirements generally applicable to the Fund; *each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, whether within or outside the Fund, including to the Fund's Trustees and auditors, and to governmental regulators and self-regulatory organizations; each Covered Officer should, to the extent appropriate within his/her area of responsibility, consult with other officers and employees of the Funds and the adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, it is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. IV. Reporting and Accountability Each Covered Officer must: *upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that he/she has received, read, and understands the Code; *annually thereafter affirm to the Board that he/she has complied with the requirements of the Code; *not retaliate against any other Covered Officer or any employee of the Funds or their affiliated persons for reports of potential violations that are made in good faith; and *notify the Chair of the Audit Committee of the Fund promptly if he/she knows of any violation of this Code. Failure to do so is itself a violation of this Code. *file at least annually a complete and accurate Funds' Trustees and Officers Questionnaire. The General Counsel is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, any approvals or waivers1 sought by the Chairman of the Board or the President will be considered by the Audit Committee (the "Committee"). The Funds will follow these procedures in investigating and enforcing this Code: *the General Counsel will take all appropriate action to investigate any potential violations reported to him; *if, after such investigation, the General Counsel believes that no violation has occurred, the General Counsel is not required to take any further action; any matter that the General Counsel believes is a violation will be reported to the Committee; * if the Committee concurs that a violation has occurred, it will inform the Board, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer; * the Committee will be responsible for granting waivers, as appropriate; and * any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. V. Other Policies and Procedures This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as othe policies or procedures of the Funds, the Funds' adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Funds' and their investment adviser's and principal underwriter's codes of ethics under Rule 17j-1 under the Investment Company Act and the adviser's more detailed policies and procedures set forth in their respective codes are separate requirements applying to the Covered Officers and others, and are not part of this Code. VI. Amendments Any amendments to this Code, other than amendments to Exhibit B, must be approved or ratified by a majority vote of the Board, including a majority of independent Trustees. VII. Confidentiality All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the appropriate Board and the General Counsel, and if deemed appropriate by the Board, with other Funds in the complex where the Funds share a common Covered Officer. VIII. Internal Use The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Fund, as to any fact, circumstance, or legal conclusion. Exhibit A Funds Covered by this Code of Ethics Aquila Fund Aquila Rocky Mountain Equity Fund Capital Cash Management Trust Cash Assets Trust series, consisting of Pacific Capital Cash Assets Trust Pacific Capital Tax-Free Cash Assets Trust Pacific Capital U.S. Government Cash Assets Trust Churchill Cash Reserves Trust Churchill Tax-Free Trust Hawaiian Tax-Free Trust Narragansett Insured Tax-Free Income Fund Prime Cash Fund Tax-Free Fund For Utah Tax-Free Fund of Colorado Tax-Free Trust of Arizona Tax-Free Trust of Oregon Exhibit B Persons Covered by this Code of Ethics The following officers of each Fund, and the identities of such officers as of April 1, 2005: Chairman and/or Chairman Emeritus And Founder Lacy B. Herrmann Trustee and/or President Diana P. Herrmann Chief Financial Officer and Treasurer Joseph P. DiMaggio -----END PRIVACY-ENHANCED MESSAGE-----