Government & Corporate Bond Funds

Nations Funds
Notes to financial statements (continued) (unaudited)
10. Lines of credit 11. Securities lending
Funds Trust participates with other Nations Funds in a Under an agreement with BNY, the Funds can lend their
$1 billion uncommitted line of credit provided by BNY securities to approved brokers, dealers and other financial
under a line of credit agreement (the ‘‘Agreement’’). institutions. Loans are collateralized by cash, in an
Advances under the Agreement are taken primarily for amount at least equal to the market value of the securities
temporary or emergency purposes, including the meeting loaned. The cash collateral received is invested in Nations
of redemption requests that otherwise might require the Cash Reserves. A portion of the income generated by the
untimely disposition of securities. Interest on borrowings investment of the collateral, net of any rebates paid by
is payable at a specified Federal Funds rate plus 0.50% BNY to borrowers, is remitted to BNY as lending agent,
on an annualized basis. Each participating Fund maintains and the remainder is paid to the Fund. Generally, in the
a ratio of net assets (not including amounts borrowed event of counterparty default, the Fund has the right to
pursuant to the Agreement) to the aggregate amount of use the collateral to offset losses incurred. There would
indebtedness pursuant to the Agreement of no less than 4 be a potential loss to the Fund in the event the Fund is
to 1. delayed or prevented from exercising its right to dispose
At September 30, 2002, there were no loans outstanding
under this Agreement. For the six months ended
of the collateral. The Fund bears the risk of loss with
respect to the investment of collateral.
September 30, 2002, there were no borrowings by the At September 30, 2002, the following Funds had
Funds under the Agreement. securities on loan:
12. Income taxes
Information on the tax components of capital is as follows:
Market
Market value of value
loaned securities of collateral
Fund (000) (000)
Short-Term Income ************** $219,939 $225,437
Short-Intermediate Government **** 196,398 201,742
Government Securities *********** 34,199 40,393
Bond ************************* 56,400 60,878
Strategic Income **************** 4,194 4,294
Net tax unrealized
appreciation/
(depreciation) on
Net tax unrealized derivatives and
Gross tax Gross tax appreciation/ foreign currency
Cost of investments unrealized unrealized (depreciation) on and net other
for tax purposes appreciation depreciation investments assets
Fund (000) (000) (000) (000) (000)
Short-Term Income*********************** $1,043,736 $11,393 $ (240) $11,153 $2,075
Short-Intermediate Government ************* 728,952 17,115 (75) 17,040 4,470
Government Securities ******************** 305,427 8,461 (511) 7,950 3,477
Intermediate Bond *********************** N/A* N/A* N/A* — —
Bond ********************************** 3,637,489 64,064 (48,856) 15,208 5,316
Strategic Income ************************* 242,467 3,466 (10,371) (6,905) 45
High Yield****************************** N/A* N/A* N/A* — —
* See corresponding Master Portfolio for tax basis information.
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