<PAGE>
CHICAGO
MILWAUKEE
CORPORATION
- ------------------------------------------------------------------------------
1995 ANNUAL REPORT
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors of
Chicago Milwaukee Corporation
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Chicago Milwaukee Corporation as of
December 31, 1995, the related statement of operations for the year then ended,
and the statement of changes in net assets for each of the two years in the
period then ended, and financial highlights for each of the three years in the
period then ended. These financial statements and the financial highlights are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits. The financial highlights for each of the two years in the period ended
December 31, 1992 were audited by auditors whose report dated February 19, 1993,
expressed an unqualified opinion on the financial statements and the financial
highlights.
We conducted our audits in accordance with generally accepted auditing
standards. 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. Our procedures included confirmation of the investment owned as of
December 31, 1995 by correspondence with the custodian. 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.
As discussed in Note 1 to the financial statements the Board of the Company
approved a plan for liquidation and redeemed all outstanding shares of the
Company's common stock.
In our opinion, the financial statements and fianancial highlights referred
to above present fairly, in all material respects, the financial position of
Chicago Milwaukee Corporation at December 31, 1995, the results of its
operations for the year then ended, and the changes in its net assets for each
of the two years in the period then ended and financial highlights for each of
the three years in the period then ended, in conformity with generally accepted
accounting principles.
Ernst & Young LLP
Chicago, Illinois
February 20, 1996
<PAGE>
CHICAGO MILWAUKEE CORPORATION
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investment, at value (cost $2,061,098)............................ $2,061,098
Cash.............................................................. 115,439
----------
Total Assets................................................... 2,176,537
LIABILITIES
Estimated costs through date of complete liquidation.............. 2,176,537
----------
Total Liabilities.............................................. 2,176,537
NET ASSETS........................................................ $ ---
==========
COMMON SHARES OUTSTANDING......................................... ---
==========
NET ASSET VALUE PER COMMON SHARE.................................. $ ---
==========
</TABLE>
See accompanying Notes to Financial Statements
2
<PAGE>
CHICAGO MILWAUKEE CORPORATION
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C> <C>
Investment Income:
Interest.............................................. $ 915,448
Expenses:
Compensation and benefits............................. 180,038
Directors fees and expenses........................... 7,570
Professional fees..................................... 420,200
Advisory fees......................................... 32,989
Custodian fees........................................ (4,363)
Insurance............................................. 56,163
Fund termination expenses............................. 1,752,080
Other general and administrative expenses............. 34,843
---------
Total Expenses...................................... 2,479,520
-----------
Net Investment Loss................................. (1,564,072)
Net Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on sale of investments.............. (95,674)
Net change in unrealized depreciation on investments.. 370,057
---------
Net Realized and Unrealized Gain on Investments..... 274,383
-----------
Net Decrease in Net Assets.......................... $(1,289,689)
===========
</TABLE>
See accompanying Notes to Financial Statements
3
<PAGE>
CHICAGO MILWAUKEE CORPORATION
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
Operations:
Net investment (loss) income.......................... $ (1,564,072) $ 4,928,252
Net realized loss on sales of investments............. (95,674) (2,848,349)
Net change in unrealized depreciation on investments.. 370,057 (248,406)
------------ ------------
Net increase (decrease) in Net Assets Resulting from
Operations............................................ (1,289,689) 1,831,497
------------ ------------
Distributions to Stockholders:
From Net Investment Income............................. (734,142) (2,438,749)
From Realized Gains on Investments..................... --- (11,651)
Liquidating Distribution............................... (35,867,614) ---
------------ ------------
Total Distributions to Stockholders................ (36,601,756) (2,450,400)
------------ ------------
Capital Share Transactions:
Redemptions............................................ (11,205,327) (56,166,685)
------------ ------------
Total Decrease in Net Assets.............................. (49,096,772) (56,785,588)
Net Assets at Beginning of Year........................... 49,096,772 105,882,360
------------ ------------
Net Asset at End of Year (including undistributed
net investment income of $0 at December 31, 1995
and $ 826,223 at December 31, 1994)....................... $ --- $ 49,096,772
=========== ============
</TABLE>
See accompanying Notes to Financial Statements
4
<PAGE>
CHICAGO MILWAUKEE CORPORATION
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Principal
FIXED INCOME SECURITIES Amount Value
------ -----
<S> <C> <C>
US Treasury Obligations
- -----------------------
U. S. Treasury Bill, due 2/15/96 (cost $2,061,098).. $2,075,000 $ 2,061,098
OTHER ASSETS AND LIABILITIES, NET................... (2,061,098)
-----------
NET ASSETS.......................................... $ ---
===========
</TABLE>
See accompanying Notes to Financial Statements
5
<PAGE>
CHICAGO MILWAUKEE CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1. PLAN OF LIQUIDATION
On May 8, 1995, the Board of Directors of the Company adopted a plan of complete
liquidation of the Company. Pursuant to the plan of liquidation and the
Company's Articles of Incorporation, the Company redeemed all outstanding shares
of its common stock held by stockholders of record at the close of business on
May 22, 1995 (Liquidating Distribution Date), at a redemption price of $133.92
per share, which was the net asset value per share at the close of business on
such date.
The Company will seek to terminate its registration as an investment company.
Any assets of the Company available for distribution pursuant to the plan of
complete liquidation, after satisfaction of the Company's liabilities and
expenses, will subsequently be distributed to the stockholders who received the
initial liquidating distribution payment.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Estimated costs through date of complete liquidation:
- -----------------------------------------------------
As a result of the Company's adoption of its plan of complete liquidation, the
Company has established a liability which is presented at estimated final
settlement amounts, including estimated costs associated with carrying out the
liquidation. Preparation of the financial statements requires significant
assumptions by management, including assumptions regarding the amounts that
creditors would agree to accept in settlement of obligations due them, the
estimate of liquidation costs to be incurred and the resolution of contingent
liabilities resulting from the liquidation. There may be differences between the
assumptions and the actual results because events and circumstances frequently
do not occur as expected. Those differences, if any, could result in a change in
the net assets recorded in the statement of net assets as of December 31, 1995.
Separate reporting:
- ------------------
The financial statements reflect the activities of Chicago Milwaukee Corporation
(the "Company"). Previous Chicago Milwaukee Corporation annual reports through
December 31, 1992 included the activities of Milwaukee Land Company ("MLC") on a
consolidated basis. See Note 4.
Security valuation:
- ------------------
Investments are stated at "value." Fixed-income securities are valued at the
most recent bid quotation. U.S. Treasury bills are valued at amortized cost,
which approximates market value.
Investment transactions and investment income:
- ---------------------------------------------
Security transactions are accounted for on the trade date (the date the order to
buy or sell is executed). Realized gains and losses on investment transactions
are reported on an identified cost basis. Interest income is recorded on the
accrual basis and includes amortization of premium and discount on securities.
6
<PAGE>
CHICAGO MILWAUKEE CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
Common shares valuation:
- -----------------------
Prior to the Liquidating Distribution Date shares of Chicago Milwaukee
Corporation common shares were redeemed by stockholders on a continuous basis at
the net asset value per share. On each day the New York Stock Exchange
(the"Exchange") was open for trading, the net asset value per share was
determined as of the earlier of 3:00 p.m. Chicago time or the close of the
Exchange by dividing the total value of the Company's investments and other
assets, less liabilities, by the number of common shares outstanding.
In accordance with the plan of liquidation, all issued and outstanding common
stock at the Liquidating Distribution Date were redeemed by stockholders at the
net asset value at that date (Note 1).
Federal income taxes:
- --------------------
Beginning with 1991, the Company elected to be taxed as a "regulated investment
company" for Federal income tax purposes. The Company has complied with the
special provisions of the Internal Revenue Code applicable to investment
companies and, therefore, no federal income tax provision is required.
Dividends and distributions to stockholders:
- -------------------------------------------
Dividends and distributions payable to the Company's stockholders are recorded
by the Company on the ex-dividend date.
NOTE 3. INTERESTS IN PARTNERSHIPS AND RELATED TRANSACTIONS
At the close of business on June 27, 1990, the Company and MLC transferred to
CMC Heartland Partners ("CMC"), at the direction of Heartland Partners, L.P.
("Heartland"), substantially all of their respective real estate properties and
certain miscellaneous assets and liabilities related to these properties.
In connection with the real estate transfer, Heartland and CMC have assumed
primary responsibility and liability for the resolution and satisfaction of most
of the liabilities for (i)claims remaining under the plan of reorganization of
the predecessor of CMC Real Estate Corporation, formerly a wholly owned
subsidiary of the Company, and previously named the Chicago, Milwaukee, St paul
and Pacific Railroad Company (the "Railroad"), (ii)certain other contingent
liabilities with respect to the properties transferred to CMC arising after the
consummation of such plan, and (iii)the costs and expenses incurred in resolving
such plan and other contingent liabilities (collectively, the "Plan
Liabilities"). The Company was required to contribute to Heartland, over time,
cash in the amount of $18.1 million ("Deferred Capital Contribution"), plus
interest, for settlement of the Plan Liabilities. In consideration of such
commitment, Heartland issued to the Company a Class B limited partnership
interest (the "Class B Interest"). On August 28, 1990 and February 15, 1991,
pursuant to an authorization of the Board of Directors of the Company on May 7,
1990, the Company made additional capital contributions to Heartland of
approximately $3. 6 million in the aggregate, representing an increase in the
Company's Class B Interest in Heartland. In general, the Class B Interest
entitles the holder to .5% of Heartland's available cash for distribution and
allocations of taxable income and loss. In addition, items of deduction, loss,
credit and expense attributable to the satisfaction of Plan Liabilities are
specially allocated 99% to the holder of the Class B Interest and 1% to MLC as
the general partner until the aggregate amount of all such items allocated to
the Class B Interest equals the aggregate capital contribution with respect to
the Class B Interest. If the aggregate amount of such items specially allocated
to the holder of the Class B Interest is less than the amounts contributed by
such holder to Heartland, such excess will be reflected in the capital account
of the Class B Interest. The Company paid interest on the undrawn balance of the
Deferred Capital Contribution at the average one year U.S. Treasury bill rate as
in effect from time to time, payable monthly. On June 30, 1993 the Company paid
the $7.9 million remaining outstanding balance of the $18.1 million Deferred
Capital Contribution and related accrued interest.
7
<PAGE>
CHICAGO MILWAUKEE CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
The Class B Interest was transferred to MLC on June 30, 1993 in a transaction
related to the Company's conversion to an open-end management investment
company. (See Note 4)
Pursuant to a management agreement, CMC was required to pay to the Company an
annual management fee in the amount of approximately $425,006. In the discretion
of Heartland, the management fee may be accrued and not paid for up to 5 full
years after the real estate transfer. Effective July 1, 1993 the Company
transferred its rights and obligations under the management agreement to MLC.
CMC paid the Company the $1,272,657, representing accrued management fee due and
owing to the Company under the management agreement through the date of payment
and $234,418 in reimbursement of Heartland's organization expenses.
For the year ended December 31, 1995, the Company paid CMC Heartland
approximately $20,000 for staff salary and operating expense allocations.
Included in estimated costs through the date of complete liquidation are amounts
reimbursable to CMC Heartland of $23,689, for fees and expenses.
NOTE 4. CONVERSION TO AN OPEN-END MANAGEMENT INVESTMENT COMPANY
On May 12, 1993, the Company's shareholders approved the conversion (the
"Conversion) of the Company from a closed-end management investment company to
an open-end management investment company under the Investment Company Act of
1940, as amended. The Conversion was effected on June 30, 1993.
As part of the Conversion, the Company redeemed its outstanding preferred stock,
sold its waste water treatment plant to Heartland for its fair market value, and
paid Heartland the balance of the Deferred Capital Contribution. In addition,
the Company transferred to MLC, as a capital contribution, the Company's rights
and obligations pursuant to the 1990 Management Agreement with Heartland, its
Class B Interest in Heartland, and all of its remaining illiquid assets and
certain of its contingent liabilities.
After the close of business on June 30, 1993, the Company distributed to its
shareholders, on a pro-rata basis and without consideration, all of the shares
of common stock of MLC, at the rate of one share of MLC for each share of the
Company's common stock that was held as of June 18, 1993, the record date for
the distribution.
The Company changed its state of incorporation from Delaware to Maryland on
December 31, 1993.
NOTE 5. CAPITAL SHARE TRANSACTIONS
On May 9, 1995, the Company paid dividends of ordinary income of $2.73 per share
to holders of record at the close of business on May 8, 1995.
On May 23, 1995, the Company paid a liquidating distribution of $133.92 per
share to holders of record on May 22, 1995 (Note 1).
8
<PAGE>
CHICAGO MILWAUKEE CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
The following table summarizes the redemption activity in common shares and
dollars of the Company:
<TABLE>
<CAPTION>
SHARES AMOUNT
------ ------
<S> <C> <C>
Year Ended December 31, 1995
Redeemed................................ 79,417 $ 11,205,327
----------------------------
Year Ended December 31, 1994
Redeemed................................ 385,475 $ 56,166,685
</TABLE>
NOTE 6. LEGAL PROCEEDINGS AND CONTINGENCIES
In connection with the separation of its real estate properties from its
investment activities in June 1990, the Company transferred to Heartland and CMC
(collectively, the "Real Estate Partnerships"), and the Real Estate Partnerships
jointly and severally agreed to assume and become primarily responsible for,
certain fixed and contingent obligations for which the Company was, or in the
future might become, liable. These obligations were comprised of most of the
liabilities for claims remaining under the plan of reorganization of the
Railroad, and certain liabilities relating to the real estate properties
transferred by the Company and MLC to the Real Estate Partnerships (such
liabilities being hereinafter referred to as the "Heartland Assumed
Liabilities"). At the time of the real estate separation, the Company estimated
the Heartland Assumed Liabilities to be in the amount of approximately $12.1
million.
In consideration of the Real Estate Partrnership assumption of the Heartland
Assumed Liabilities and the issuance to the Company of the Class B Interest, the
Company contributed to Heartland cash in the aggregate amount of $18.1 million,
plus interest. Heartland had available reserves of approximately $2.5 million as
of December 31 ,1995 which are estimates of future costs that may be incurred in
respect of the Heartland Assumed Liabilities. Actual payments in respect of the
Heartland Assumed Liabilities may exceed such amount.
Included in the Heartland Assumed Liablities are knowm environmental liabilities
associated with certain of the real estate properties transferred to the Real
Estate Partnerships arising out of the activities of the Railroad or certain of
its lessees or other third parties. Further environmental obligations as yet
unknown in respect of these properties may become due and owing in the future. A
majority of the known environmental matters stem from the use of petroleum
products, such as motor oil and diesel fuel, in the operation of a railroad. The
Company and/or the Real Estate Partnerships have been notified by governmental
agencies of potential liabilities inconnection with certain of these real estate
properties. Decscriptions of the known material environmental matters are
included in the reports filed by Heartland with the Securities and Exchange
Commission pursuant to the provisions of the Securities Exchange Act of 1934, as
amended.
The Company did not seek any releases from third party obligees in respect of
the Heartland Assumed Liabilities and, accordingly, the Company remains liable
to such obligees for any amounts that may in the future become due and owing in
respect of such liabilities. The Real Estate Partnerships have agreed to
indemnify and hold the Company harmless from any and all damages, costs or
expenses that the Company may incur in connection with the Heartland Assumed
Liabilities. Further, as the general partner of the Real Estate Partnerships,
MLC would be liable to the Company in respect of any such amounts to the extent
that the Real Estate Partnerships do not perform and satisfy their respective
indemnification obligations.
In connection with the Conversion and the transaction related thereto, the
Company transferred to MLC, and MLC agreed to become primarily liable for, any
obligation for which the Company is or may become liable (the "MLC Assumed
Liablilities") arising out of any matters existing on or occurring prior to the
effective time of the Conversion other than (i) the Heartland Assumed
Liabilities, (ii) liabilities directly related to the Company's business of
investing and managing its investment securities, (iii) certain litigation then
pending against the Company and subsequently dismissed, or (iv) any liabilities
relating to federal, state, local or foreign income or other tax matters.
9
<PAGE>
CHICAGO MILWAUKEE CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
As is the case with the Heartland Assumed Liabilities, the Company has not and
will not seek any release from third party obligees in respect of the MLC
Assumed Liabilities and, accordingly, the Company remains liable to such
obligees for any amounts that may in the future become due and owing in respect
of such liabilities. Prior to the effective time of the Conversion, the Company
and MLC entered into an agreement pursuant to which MLC agreed to indemnify and
hold the Company harmless from any and all damages, costs or expenses that the
Company may incur in connection with the MLC Assumed Liabilities.
Based on its knowledge of the Heartland Assumed Liabilities and the MLC Assumed
Liabilities, and the current financial condition of Heartland, CMC and MLC, and
in consideration of all other relevant factors, the Company believes that
Heartland, CMC and MLC together will have sufficient assets to fully satisfy any
future claims that may be made in respect of the Heartland Assumed Liabilities
and the MLC Assumed Liabilities and that the Company will not be required to
expend any amounts in connection therewith. Accordingly, the Company did not
establish any reserves in respect of these liabilities.
NOTE 7. DIRECTORS AND OFFICERS COMPENSATION
On June 17, 1985, as part of the employment agreement between the Company and
its chief executive officer (the "Agreement"), the Company granted to its chief
executive officer, "phantom share units" at $143.75 per share in respect of
7,500 shares. By amendment to the Agreement, on January 19, 1988, the Company
granted additional units to its chief executive officer at $134.25 in respect of
7,500 shares. Such units entitled the officer to payment on or before July 5,
1991 of the excess, if any, of the value of such common shares on July 1, 1991
adjusted for dividend payments, stock dividends, etc., over the prices indicated
above. On June 26, 1991, in connection with an amendment to the Agreement
extending the officer's employment term to June 30, 1994, the measurement date
was changed to July 1, 1994 and the payment date was revised from on or before
July 5, 1991 to on or before July 5, 1994. On June 29, 1994, in connection with
an amendment to the Agreement further extending the officer's employment term to
June 30, 1996, the measurement date was changed to September 30, 1994 and the
payment date was changed to on or before October 5, 1994 with respect to the
7,500 phantom units granted on June 17, 1985. The measurement date and payment
date for the 7,500 phantom units granted on January 19, 1988 were changed to the
last day of the officer's employment with the Company, pursuant to the
Agreement, and on or before the fifth day following the officer's last day of
employment with the Company, pursuant to the Agreement, respectively.
The Company included changes in the adjusted net asset value subsequent to the
measurement date as a component of compensation expense in the statement of
operations. During 1995, compensation expense included $12,550 due to an
increase in the adjusted net asset value relating to the phantom share units.
Payment of $498,225 with respect to the phantom units granted on January 17,
1985 was made on October 3, 1994. The remaining liability with respect to the
phantom units granted on January 19, 1988 was $536,775 at December 31, 1995.
Included in the estimated costs through date of complete liquidation is an
accrual for $713,345 relating to a former officer of the Railroad.
NOTE 8. NET ASSETS
As a result of the Company's adoption of its plan of complete liquidation and
its liquidating distribution in May, 1995, there are no net assets at December
31, 1995.
At the Liquidating Distribution Date undistributed net investment losses of
$1,471,991 and undistributed net realized losses of $2,944,023 were reclassified
to Paid-in capital as there is no future benefit of these amounts for tax
purposes.
10
<PAGE>
CHICAGO MILWAUKEE CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 9. INVESTMENT SERVICES
The Company paid advisory fees in the amount of $32,989, for investment advisory
services during 1995 under a revised agreement with OFFITBANK, a nonaffiliated
investment advisor. The Company terminated such agreement in connection with its
plan of complete liquidation and the redemption of all outstanding shares of its
common stock.
NOTE 10. INVESTMENT TRANSACTIONS
Investment transactions for the year ended December 31, 1995, excluding any
money market investments, are as follows:
<TABLE>
<S> <C>
Purchases...................... $18,078,040
Proceeds from Sales............ $66,906,988
</TABLE>
The cost of investments at December 31, 1995 for federal income tax purposes
was $2,061,098.
11
<PAGE>
CHICAGO MILWAUKEE CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 11. FINANCIAL HIGHLIGHTS
The table below reflects per share financial highlights and ratios for a
share of common stock outstanding during the years presented.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE: (d)
Net Asset Value, Beginning
of period.......................... $141.39 $ 144.51 $ 149.35 $ 151.49 $ 145.91
Net Investment Income (a)........... (6.27)(e) 14.19 8.11 8.43 13.24
Net Gains or Losses on Securities
both realized and unrealized (b)... 1.53 (10.71) .51 1.39 5.22
------- ------------ ------------ ------------ ------------
Total From Investment
Operations......................... (4.74) 3.48 8.62 9.82 18.46
Less Distributions:
To Preferred Shareholders......... --- --- .10(c) .54 .78
To Common Shareholders............ 2.73 (c) 6.58(c) 2.93(c) 7.26 11.11
Distributions (from capital gains)
To Preferred Shareholders......... --- --- .35(c) .30 .06
To Common Shareholders............ --- .02(c) 10.08(c) 3.86 .93
Liquidating distribution to
Common Shareholders................ 133.92 (c) --- --- --- ---
------- ------------ ------------ ------------ ------------
Total Distributions................. 136.65 6.60 13.46 11.96 12.88
------- ------------ ------------ ------------ ------------
Net Asset Value, End of
Period............................. $ --- $141.39 $ 144.51 $ 149.35 $ 151.49
======== ============ ============ ============ ============
Total Investment Return:............ (3.35)% 2.41% 10.59% 16.07% 17.94%
RATIO/SUPPLEMENTAL DATA
Net Assets, End of Period........... $ --- $ 49,096,772 $105,882,360 $277,468,595 $281,038,250
Ratio of Expenses to Average
Net Assets........................ 4.39%(f) 1.09% 1.30% 1.24% 1.46%
Ratio of Net Investment Income to
Average Net Assets................ 1.13%(f) 5.88% 3.33% 4.90% 6.03%
Portfolio Turnover Rate............. (g) 79.47% 207.01% 76.03% 172.77%
</TABLE>
(a) Unless otherwise noted, per share figures are based on the number of
common shares outstanding at the end of the year.
(b) Includes net effect of repurchases and redemptions of common and
preferred stock at market value.
(c) Per share figures for 1993,1994 and 1995 distributions are based on the
number of common shares outstanding at the date of distribution.
(d) Years prior to 1993 have not been adjusted to reflect the transaction
described in Note 4 to Financial Statements.
(e) Based on 267,827, the number of common shares outstanding prior to May
22, 1995, liquidation.
(f) Excludes fund termination expense of $1,752,080 which represents
estimated remaining expenses to be incurred through final liquidation. In
addition, ratios have been determined on an annualized basis. Inclusion of
fund termination expenses would result in a ratio of expenses to
average net assets of 5.25% and a ratio of net investment loss to average
net assets of (3.31)%.
(g) Not meaningful.
12
<PAGE>
CHICAGO MILWAUKEE CORPORATION
<TABLE>
<S> <C>
BOARD OF DIRECTORS CHICAGO MILWAUKEE CORPORATION
ROBERT S. DAVIS An open-end mutual fund NASDAQ
Consultant symbol CHGMX
CLARENCE G. FRAME 547 W. Jackson Boulevard
Chairman of the Board Chicago, Illinois 60661
Chicago Milwaukee Corporation (312) 822-0400
EDWIN JACOBSON Investment Adviser
President and Chief Executive Officer OFFITBANK
Chicago Milwaukee Corporation 520 Madison Avenue
New York, New York 10022
EZRA K. ZILKHA
President, Zilkha & Sons, Inc. Custodian,
Transfer Agent,
OFFICERS Stock Registrar,
Dividend Disbursing Agent,
CLARENCE G. FRAME and Redemption Agent
Chairman of the Board Norwest Bank Minnesota, N.A.
Mutual Fund Services - Transfer Agent
EDWIN JACOBSON MS 0040
President and Chief Executive Officer 733 Marquette Avenue, Fifth Floor
Minneapolis, Minnesota 55479-0040
LEON F. FIORENTINO (800) 767-0096
Vice President-Fiance,
Secretary and Treasurer Independent Auditors
Ernst & Young, LLP
LAWRENCE S. ADELSON 233 S. Wacker Drive
Vice President and Chicago, Illinois 60606
General Counsel and
Assistant Secretary
DAVID L. KOZISEK
Assistant Treasurer
</TABLE>
13
