SNYDER STRYPES TRUST
FINANCIAL REPORT
JUNE 30, 1999
(UNAUDITED)
CONTENTS
- --------------------------------------------------------------------------
FINANCIAL STATEMENTS:
Statement of net assets 1
Schedule of investments 2
Statement of operations 3
Statements of changes in net assets 4
Notes to financial statements 5-7
Financial highlights 8
- --------------------------------------------------------------------------
SNYDER STRYPES TRUST
STATEMENT OF NET ASSETS
JUNE 30, 1999
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments, at value (amortized cost $117,239,530) (Notes 2, 4, and 8) $ 150,163,447
Cash
3,906
-------------------
TOTAL ASSETS $ 150,167,353
===================
NET ASSETS $ 150,167,353
===================
COMPOSITION OF NET ASSETS
Structured Yield Product Exchangeable for StockSM ("STRYPES"),
no par value; 5,175,000 shares issued and outstanding (Note 9) $ 116,038,074
Net unrealized appreciation of investments 32,923,917
Undistributed net investment income
1,205,362
1411111,149,913111
-------------------
NET ASSETS $ 150,167,353
===================
NET ASSET VALUE PER STRYPES $ 29.02
===================
</TABLE>
See Notes to Financial Statements.
SNYDER STRYPES TRUST
SCHEDULE OF INVESTMENTS
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Par Maturity Market Amortized
Securities Description Value Date Value Cost
- --------------------------------------------------------------------------------------------------------------------
UNITED STATES GOVERNMENT
SECURITIES:
<S> <C><C> <C> <C> <C>
United States Treasury Strips $ 2,170,000 08/15/99 2,158,043 2,154,505
United States Treasury Strips 2,170,000 11/15/99 2,131,439 2,123,286
United States Treasury Strips 2,170,000 02/15/00 2,103,989 2,092,715
United States Treasury Strips 2,170,000 05/15/00 2,076,039 2,062,936
United States Treasury Strips 2,170,000 08/15/00 2,045,160 2,032,542
United States Treasury Strips 2,170,000 11/15/00 2,017,536 2,002,600
--------------- ---------------------------------------
$ 13,020,000 12,532,206 12,468,584
===============
FORWARD PURCHASE CONTRACT:
Snyder Communications, Inc. Common
Stock Forward Purchase Agreement 11/15/00 137,631,241 104,770,946
---------------------------------------
TOTAL $150,163,447 $117,239,530
=======================================
</TABLE>
See Notes to Financial Statements.
SNYDER STRYPES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ACCRETION OF ORIGINAL ISSUE DISCOUNT $ 411,683
EXPENSES:
Administrative fees and expenses $ 18,116
Legal fees 13,389
Accounting fees 14,020
Mailing expense 7,089
Trustees' fees (Note 5) 5,671
Other expenses 6,184
-------------------
TOTAL FEES AND EXPENSES 64,469
EXPENSE REIMBURSEMENT (Note 7) ( 64,469)
-------------------
TOTAL EXPENSES - NET ---
--------------------
NET INVESTMENT INCOME 411,683
NET DECREASE IN UNREALIZED APPRECIATION
OF INVESTMENTS (6,326,078)
--------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (5,914,395)
====================
</TABLE>
See Notes to Financial Statements.
SNYDER STRYPES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS Year Ended
ENDED December 31,
JUNE 30, 1999 1998
- ------------------------------------------------------------------------------------------------------------------
OPERATIONS
<S> <C> <C> <C> <C>
Net investment income $ 411,683 $ 1,147,710
Unrealized depreciation of investments (6,326,078) (7,985,820)
NET DECREASE IN NET ASSETS
-----------------------------------------------
FROM OPERATIONS (5,914,395) (6,838,110)
-----------------------------------------------
DISTRIBUTIONS
Net investment income (356,234) (357,542)
Return of capital (3,985,074) (8,325,073)
-----------------------------------------------
NET DECREASE IN NET ASSETS FROM DISTRIBUTIONS (4,341,308) (8,682,615)
DISTRIBUTIONS
-----------------------------------------------
TOTAL DECREASE IN NET ASSETS
FOR THE PERIOD (10,255,703) (15,520,725)
NET ASSETS, BEGINNING OF PERIOD 160,423,056 175,943,781
-----------------------------------------------
NET ASSETS, END OF PERIOD $ 150,167,353 $ 160,423,056
===============================================
</TABLE>
See Notes to Financial Statements.
SNYDER STRYPES TRUST
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- -------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Snyder Strypes Trust ("Trust") was established on August 5, 1997 and is
registered as a non-diversified closed-end management investment company under
the Investment Company Act of 1940 (the "Act"). In September 1997, the Trust
sold Structured Yield Product Exchangeable for StockSM ("STRYPES") to the
public pursuant to a Registration Statement on Form N-2 under the Securities
Act of 1933 and the Act. The Trust used the proceeds to purchase a portfolio
comprised of stripped U.S. Treasury securities and a forward purchase contract
for shares of common stock of Snyder Communications, Inc. ("Snyder"), a
corporation, with certain existing shareholders of Snyder ("Contracting
Stockholders"). The shares are deliverable pursuant to the contract on
November 15, 2000 and the Trust will thereafter terminate.
Pursuant to the Administration Agreement between the Trust and The Bank of New
York (the "Administrator"), the Trustees have delegated to the Administrator
the administrative duties with respect to the Trust.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by
the Trust, which are in conformity with generally accepted accounting
principles.
Valuation of Investments
The U.S. Treasury Strips are valued at the mean of the bid and ask price
at the close of the period. Amortized cost is calculated using the
effective interest method. The forward purchase contract is valued at
the mean of the bid prices received by the Trust at the end of each
period from two independent broker-dealer firms unaffiliated with the
Trust who are in the business of making bids on financial instruments
similar to the contract and with terms comparable thereto.
Investment Transactions
Securities transactions are accounted for as of the date the securities
are purchased and sold (trade date). Interest income is recorded as
earned and consists of accrual of discount. Unrealized gains and losses
are accounted for on the specific identification method.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
NOTE 3. DISTRIBUTIONS
STRYPES holders are entitled to receive distributions from the maturity of
U.S. Treasury Strips of $1.6778 per annum or $0.41945 per quarter (except for
the first distribution on November 15, 1997 which was $0.2377).
NOTE 4. PURCHASES AND SALES OF INVESTMENTS
Maturities of U.S. Treasury Strips totaled $4,340,000 and $8,680,000 for the
six months ended June 30, 1999 and the year ended December 31, 1998,
respectively. There were no sales of such investments during either period.
Purchase of the U.S. Treasury Strips and the forward purchase contract during
the period ended December 31, 1997 totaled $24,789,215 and $104,770,946,
respectively.
NOTE 5. TRUSTEES FEES
Each of the three Trustees were paid a one-time, up front fee of $10,800 for
the services during the life of the Trust. In addition, the Managing Trustee
was paid an additional one-time, up front fee of $3,600 for serving in such
capacity. The total fees paid to the Trustees of $36,000 are being expensed
over the life of the Trust. As of June 30, 1999, the Trust had expensed
$20,209 of such fees. NOTE 6. INCOME TAXES The Trust is not an association
taxable as a corporation for Federal income tax purposes; accordingly, no
provision is required for such taxes.
As of June 30, 1999, gross unrealized appreciation and depreciation of
investments, based on amortized cost for Federal income tax purposes,
aggregated $32,923,917 and $0, respectively. The amortized cost of investment
securities for Federal income tax purposes was $117,239,530 at June 30, 1999.
NOTE 7. EXPENSES
The estimated expenses to be incurred by the Trust in connection with the
offering of the STRYPES and its ongoing operations is $818,061. Of this
amount, $395,000 represents offering expenses ($385,000) and organizational
expenses ($10,000) incurred by the Trust. All of these expenses are being paid
from cash received by the Administrator from the Contracting Stockholders. At
June 30, 1999, the Administrator had paid $186,725 relating to such expenses.
The remaining amount of $423,061 represents a prepayment of estimated
administrative and other operating expenses. Such amount was paid to the
Administrator by the Contracting Stockholders. Expenses incurred in excess of
this amount will be paid by the Contracting Shareholders.
Cash received by the Administrator from the Contracting Stockholders of
$423,061 for the payment of administrative and related operating expenses of
the Trust has not been included in the Trust's financial statements since the
amount does not represent Trust property. At June 30, 1999, $285,986 had been
paid by the Administrator for current and prepaid administrative and related
operating expenses. All administrative and related operating expenses incurred
by the Trust are reflected in the Trust's financial statements net of amounts
reimbursed.
NOTE 8. FORWARD PURCHASE CONTRACT
On September 18, 1997, the Trust entered into a forward purchase contract with
certain existing stockholders of Snyder (the "Contracting Stockholders") and
paid to the Contracting Stockholders $104,770,945 in connection therewith.
Pursuant to such contract, the Contracting Stockholders are obligated to
deliver to the Trust a specified number of shares of common stock on November
15, 2000 (the "Exchange Date") so as to permit the holders of the STRYPES to
exchange on the Exchange Date each of their STRYPES for between 0.8333 and
1.00 shares of common stock. See the Trust's original prospectus dated
September 18, 1997 for the formula upon which such exchange will be
determined.
The forward purchase contract held by the Trust at June 30, 1999 is as
follows:
<TABLE>
<CAPTION>
Exchange Cost of Contract Unrealized
Date Contract Value Appreciation
-------------- ------------------- ------------------- --------------------
Snyder Communications, Inc.
Common Stock Forward
<S> <C> <C> <C> <C> <C> <C> <C>
Purchase Agreement 11/15/00 $ 104,770,946 $ 137,631,241 $ 32,860,295
=================== =================== ====================
</TABLE>
The Sellers' obligations under the forward purchase contract are
collateralized by shares of Snyder common stock which are being held in the
custody of the Trust's Custodian, The Bank of New York. At June 30, 1999, the
Custodian held 5,175,000 shares with an aggregate value of $169,481,250.
NOTE 9. CAPITAL SHARE TRANSACTIONS
On September 12, 1997 one STRYPES was sold to one of the underwriters of the
STRYPES for $100. As a result of a stock split effected immediately prior to
the public offering of the STRYPES, this STRYPES was converted into 3 STRYPES.
During the offering period, the Trust sold 5,174,997 STRYPES to the public and
received net proceeds of $129,568,987 ($133,579,610 less sales commission of
$4,010,623). As of June 30, 1999, there were 5,175,000 STRYPES issued and
outstanding with an aggregate cost, net of sales commissions and return of
capital, of $116,038,074.
SNYDER STRYPES TRUST
FINANCIAL HIGHLIGHTS
(UNAUDITED)
- -------------------------------------------------------------------------------
The Trust's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Trust's beginning net asset value
to the ending net asset value so that they can understand what effect the
individual items have on their investment assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item as disclosed in the financial statements
to their equivalent per share amounts.
The total return based on market value measures the Trust's performance
assuming investors purchased shares at market value as of the beginning of the
period, reinvested dividends and other distributions at market value, and then
sold their shares at the market value per share on the last day of the period.
The total return computations do not reflect any sales charges investors may
incur in purchasing or selling shares of the Trust. The total return for
period of less than one year is not annualized.
<TABLE>
<CAPTION>
SIX MONTHS (Commencement)
ENDED Year Ended of Operations) to
JUNE 30, December 31, December 31,
1999 1998 1997
---------------------------------------------------------
PER SHARE OPERATING PERFORMANCE FOR A STRYPE OUTSTANDING
THROUGHOUT THE PERIOD
<S> <C> <C> <C> <C> <C>
Investment income $ $ 0.22 $ 0.07
Expenses 0.00
0.00
---------------------------------------------------------
Investment income - net 0.22 0.07
Distributions from income (0.07) (0.00)
Return of capital (1.61) (0.24)
Unrealized (loss) gain on investments (1.22) (1.54) 9.13
---------------------------------------------------------
Net (decrease) increase in net asset value (3.00) 8.96
Beginning net asset value 34.00 25.04
---------------------------------------------------------
Ending net asset value $ $ 31.00 $ 34.00
=========================================================
Ending market value $ $ 31.00 $ 34.00
=========================================================
TOTAL INVESTMENT RETURN BASED ON MARKET VALUE (5.18)% (4.46)% 32.75%
RATIOS/SUPPLEMENTAL DATA Ratio of expenses to average net assets:
Before reimbursement (1) .08% .07% .09%
After reimbursement (1) .00% .00% .00%
Ratio of net investments income to average net assets:
Before reimbursement (1) .45% .57% .80%
After reimbursement (1) .53% .64% .89%
Net assets, end of period (in thousands) $ 150,167 $ 160,423 $ 175,944
(1) Annualized
</TABLE>
