FUND
PORTFOLIOS.........3
FINANCIAL
INFORMATION
INDEPENDENT
PUBLIC
ACCOUNTANTS'
REPORT.........10
FINANCIAL
STATEMENTS.....11
FINANCIAL
HIGHLIGHTS.....13
NOTES TO
FINANCIAL
STATEMENTS.....15
MORE ABOUT
THE COMPOSITE
GROUP.............18
MONEY MARKET FUNDS' BENEFITS
PROVE ATTRACTIVE TO INVESTORS
[PHOTO, WILLIAM PAPESH, PRESIDENT, COMPOSITE FUNDS]
In 1996, many investors found Composite Cash Management Co. to be an
attractive option for keeping a portion of their net worth where they could earn
a solid return, avoid market uncertainties and maintain liquidity.
Total assets of the portfolios rose 29% during the past 12 months - an
increase of $59 million - and reached the highest level in several years.
WHAT WERE THE MAIN IMPACTS ON 1996 PERFORMANCE?
In January 1996, the Federal Reserve cut its target for short-term interest
rates from 5.50% to 5.25%. Shortly thereafter, the three-month treasury bill
traded at yields significantly below this.
The market - concerned about a possible recession - anticipated further
cuts. However, these concerns proved to be unfounded as strong unemployment
numbers led the three-month treasury bill to trade at yields above the targeted
rate. Then, rates eased as the economy slowed and inflation remained in check.
All through this, the Federal Reserve kept a steady hand on the tiller, holding
the target for the short-term interest rate at 5.25%.
As of December 31, 1996, the seven-day simple yield for Class A shares of
the Money Market Portfolio was 4.87%, or 4.99% on a compounded annual basis.*
The securities in this Portfolio had a weighted average maturity of 18 days.
The Tax-Exempt Portfolio Class A shares produced a seven-day simple yield
of 3.42%, or 3.48% on a compounded annual basis.* The weighted average maturity
was 64 days.
A portion of both portfolios' expenses were waived or reimbursed by the
Fund's Adviser, Distributor, and Transfer Agent. Absent waivers and
reimbursements, the Class A share seven-day simple yield at year end would have
been 4.79% for the Money Market Portfolio and 3.29% for the Tax-Exempt
Portfolio.
WHAT'S AHEAD?
Looking ahead, we believe the current level of interest rates represents
fair value. We feel those rates will continue to be restrained by five forces we
expect are likely to limit growth and inflation. These include high levels of
consumer debt, worldwide fiscal austerity, increased global competition, U.S.
monetary policies targeting low inflation, and favorable demographic trends.
Additionally, in the global marketplace the United States is a major
competitor, thanks to intensive use of technologies, an efficient labor force,
and comparatively less intrusive federal government than in most other
countries. These factors have helped us achieve a stable economic environment,
low unemployment and low interest rates.
WHAT ARE COMPOSITE'S KEY INVESTMENT STRATEGIES?
Our primary objective for the portfolios is to preserve capital and
maintain liquidity. In pursuit of this, we invest only in securities that have a
top-tier ranking by a national rating agency.
More importantly, we evaluate the credit quality of each investment and
assign a more selective internal ranking that is intended to guard against
worst-case scenarios. Within this framework, we seek to enhance shareholder
returns by anticipating the general direction in interest rates and by using our
credit research to take advantage of neglected issues we feel are attractive for
the portfolios.
IMPORTANT CHANGES IN THE BOARD OF DIRECTORS
An on-going strength of the Composite Group of Funds has been the counsel
and leadership provided by members of our Board of Directors. After more than 21
years as a director and a source of valuable guidance, Edwin J. McWilliams
retired from our Board in December 1996. We are deeply appreciative for all he
has done for Composite.
Elected to succeed Mr. McWilliams was Daniel L. Pavelich, chairman and CEO
of BDO Seidman, the nation's seventh largest accounting firm. Mr. Pavelich has
national and international perspectives, as well as an intimate knowledge of our
Pacific Northwest region, having spent 27 years with Seidman in Spokane. He
moved recently to the firm's headquarters in Chicago. We are pleased to have Dan
join our Board.
YOUR CONFIDENCE IN COMPOSITE IS APPRECIATED
In closing, I would like to express our gratitude to those of you who
invest in our Composite money market portfolios. If you have longer-term
investment goals, we invite you to speak with your investment representative
about our other Composite funds.
We appreciate your continued confidence and we will do our utmost to help
support your financial goals.
/s/
WILLIAM G. PAPESH
PRESIDENT
- --------------------------------------------------------------------------------
* ALL YIELD INFORMATION REPRESENTS PAST PERFORMANCE, WHICH CANNOT GUARANTEE
FUTURE RESULTS. PRINCIPAL IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT,
AND YIELDS WILL FLUCTUATE DEPENDING ON MARKET CONDITIONS. THERE IS NO
ASSURANCE THAT THE $1.00 PER SHARE NET ASSET VALUE (NAV) WILL BE MAINTAINED.
CLASS B SHARES ARE AVAILABLE ONLY BY EXCHANGING B SHARES FROM OTHER COMPOSITE
GROUP FUNDS AND ARE INTENDED AS TEMPORARY INVESTMENTS. THE CLASS B SHARES'
SEVEN-DAY SIMPLE YIELD THROUGH DECEMBER 31, 1996, WAS 3.99% FOR THE MONEY
MARKET PORTFOLIO AND 2.48% FOR THE TAX-EXEMPT PORTFOLIO AFTER EXPENSE
REIMBURSEMENTS. THE ALTERNATIVE MINIMUM TAX, AS WELL AS STATE AND LOCAL TAXES,
MAY APPLY TO INCOME DISTRIBUTED BY THE TAX-EXEMPT PORTFOLIO.
<PAGE>
COMPOSITE
CASH
MANAGEMENT
COMPANY
PORTFOLIO OF
INVESTMENTS
IN SECURITIES
DECEMBER 31,
1996
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- -------------
SHORT-TERM INVESTMENTS
BANKERS ACCEPTANCES-4.34%
<S> <C> <C>
$ 5,000,000 Dai Ichi Kangyo Bank, Ltd. NY, 5.36%, due 01/15/1997........... $ 4,989,578
5,000,000 Sanwa Bank Limited, 5.34%, due 02/06/1997...................... 4,973,300
-------------
TOTAL BANKERS ACCEPTANCES (cost $9,962,878).................... 9,962,878
-------------
CERTIFICATES OF DEPOSIT - YANKEE-5.23%
8,000,000 Industrial Bank of Japan NY, 5.48%, due 01/08/1997............. 8,000,022
4,000,000 Sumitomo Bank, Ltd. NY, 5.66%, due 01/03/1997.................. 4,000,029
-------------
TOTAL CERTIFICATES OF DEPOSIT - YANKEE (cost $12,000,051)...... 12,000,051
-------------
COMMERCIAL PAPER-DOMESTIC-72.41%
AUTOS-12.18%
8,000,000 Chrysler Financial Corporation, 5.30%, due 01/08/1997.......... 7,991,756
3,000,000 Ford Motor Credit Company, 5.31%, due 01/07/1997............... 2,997,350
4,000,000 Ford Motor Credit Company, 5.31%, due 01/14/1997............... 3,992,330
3,000,000 Ford Motor Credit Company, 5.50%, due 01/17/1997............... 2,992,667
4,000,000 General Motors Acceptance Corporation, 5.51%, due 01/02/1997 .. 3,999,388
6,000,000 General Motors Acceptance Corporation, 5.30%, due 01/21/1997 .. 5,982,333
-------------
27,955,824
-------------
BANKING-4.79%
3,000,000 Bank of New York, 5.32%, due 01/09/1997........................ 2,996,453
5,000,000 Bank of New York, 5.30%, due 01/10/1997........................ 4,993,375
3,000,000 Bankers Trust NY Corporation, 5.30%, due 01/16/1997............ 2,993,375
-------------
10,983,203
-------------
BROKERAGE-16.96%
9,000,000 CS First Boston, 5.33%, due 01/09/1997......................... 8,989,340
5,000,000 Dean Witter Discover Company, 5.31%, due 01/15/1997............ 4,989,675
5,000,000 Dean Witter Discover Company, 5.31%, due 01/17/1997............ 4,988,200
5,000,000 Goldman Sachs Group, 5.42%, due 01/10/1997..................... 4,993,225
5,000,000 Goldman Sachs Group, 5.45%, due 01/23/1997..................... 4,983,347
5,000,000 Merrill Lynch and Company, 5.42%, due 01/13/1997............... 4,990,967
5,000,000 Merrill Lynch and Company, 5.44%, due 01/21/1997............... 4,984,889
-------------
38,919,643
-------------
COMPUTERS-4.35%
3,000,000 IBM Corporation, 5.30%, due 01/14/1997......................... 2,994,258
3,000,000 IBM Corporation, 5.47%, due 01/16/1997......................... 2,993,163
4,000,000 IBM Corporation, 5.31%, due 01/21/1997......................... 3,988,200
-------------
9,975,621
-------------
CONSUMER FINANCE-13.06%
3,000,000 American Express Credit Corporation, 5.31%, due 01/06/1997..... 2,997,788
8,000,000 American Express Credit Corporation, 5.31%, due 01/07/1997..... 7,992,920
4,000,000 Beneficial Corporation, 5.31%, due 01/06/1997.................. 3,997,050
5,000,000 Beneficial Corporation, 5.32%, due 01/27/1997.................. 4,980,789
5,000,000 Household Finance Corporation, 5.55%, due 01/03/1997........... 4,998,458
5,000,000 Household Finance Corporation, 5.31%, due 01/06/1997........... 4,996,313
-------------
29,963,318
-------------
DIVERSIFIED MANUFACTURING-4.35%
3,000,000 General Electric Capital Corporation, 5.31%, due 01/08/1997 ... 2,996,902
3,000,000 General Electric Capital Corporation, 5.45%, due 01/16/1997 ... 2,993,187
4,000,000 General Electric Capital Corporation, 5.30%, due 01/17/1997 ... 3,990,578
-------------
9,980,667
-------------
INSURANCE-3.47%
3,000,000 Prudential Funding Corporation, 5.40%, due 01/06/1997.......... 2,997,750
5,000,000 Prudential Funding Corporation, 5.55%, due 02/03/1997.......... 4,974,562
-------------
7,972,312
-------------
MACHINERY - AGRICULTURAL-6.29%
3,500,000 Caterpillar Financial Services Corporation, 5.53%, due 01/13/1997 3,493,548
7,000,000 Caterpillar Financial Services Corporation, 5.37%, due 02/18/1997 6,949,880
4,000,000 John Deere Capital Corporation, 5.40%, due 01/02/1997.......... 3,999,400
-------------
14,442,828
-------------
OFFICE EQUIPMENT-4.35%
5,000,000 Xerox Corporation, 5.35%, due 01/06/1997....................... 4,996,285
5,000,000 Xerox Credit Corporation, 5.31%, due 01/13/1997................ 4,991,150
-------------
9,987,435
-------------
RETAIL - DEPARTMENT STORES-2.61%
3,000,000 Sears Roebuck Acceptance Corporation, 5.58%, due 01/09/1997 ... 2,996,280
3,000,000 Sears Roebuck Acceptance Corporation, 5.60%, due 01/21/1997 ... 2,990,667
-------------
5,986,947
-------------
TOTAL COMMERCIAL PAPER - DOMESTIC (cost $166,167,798).......... 166,167,798
-------------
COMMERCIAL PAPER - FOREIGN-16.73%
BANKING-10.00%
5,000,000 Commerzbank US Finance, Inc., 5.32%, due 01/17/1997 ........... 4,988,178
6,000,000 National Westminster Bank, 5.50%, due 01/16/1997............... 5,986,250
4,000,000 Sumitomo Bank, Ltd. NY, 5.42%, due 01/21/1997.................. 3,987,955
3,000,000 Sumitomo Bank, Ltd. NY, 5.63%, due 02/13/1997.................. 2,979,826
5,000,000 Union Bank of Switzerland Finance (DE), Inc., 7.25%,
due 01/02/1997............................................... 4,998,993
-------------
22,941,202
-------------
ELECTRONICS-3.05%
7,000,000 Sharp Electronics Corporation, 5.31%, due 01/10/1997........... 6,990,707
-------------
REAL ESTATE-1.95%
4,500,000 Towson Town Center (Direct Pay Letter of Credit,
Bank of Tokyo, Mitsubishi Ltd.), 5.45%, due 02/07/1997....... 4,474,794
-------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT-1.73%
4,000,000 Toshiba America, Inc., 5.35%, due 01/30/1997................... 3,982,761
-------------
TOTAL COMMERCIAL PAPER - FOREIGN (cost $38,389,464)............ 38,389,464
-------------
REPURCHASE AGREEMENT-1.24%
2,847,000 Repurchase agreement with Goldman Sachs, collateralized by
a U.S. Treasury Note, in a joint trading account at 6.15%
dated 12/31/1996, due 01/02/1997 with a maturity value of
$2,847,973 (cost $2,847,000).................................. 2,847,000
-------------
TOTAL INVESTMENTS (cost $229,367,191).......................... 229,367,191
Other assets ($3,776,674) less liabilities ($3,671,608)........ 105,066
-------------
NET ASSETS.................................................... $229,472,257
==============
FEDERAL INCOME TAX INFORMATION:
The aggregate cost of investments owned at December 31, 1996, for federal income
tax and financial reporting purposes was $229,367,191.
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
TAX-EXEMPT PORTFOLIO
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ ------------
STATE AND MUNICIPAL SECURITIES-98.09%
BONDS-29.52%
<S> <C> <C>
$ 1,440,000 Bexar County, TX, Limited Tax General Obligation,
5.95%, due 06/15/1997........................................ $ 1,453,595
500,000 Clark County, NV, Limited Tax General Obligation,
6.00%, due 06/01/1997........................................ 504,480
1,000,000 Colorado State Board of Agriculture (Colorado State
University), Revenue, 3.80%, due 03/01/1997.................. 1,000,000
200,000 East Williston, NY, Union Free School District Unlimited
Tax General Obligation, 6.625%, due 07/15/1997............... 203,175
500,000 Intermountain Power Agency, Utah Power Supply Revenue
Bond, Series E, 3.75%, Put date 03/17/1997................... 500,000
710,000 Las Vegas, NV, Limited Tax General Obligation,
4.50%, due 06/01/1997........................................ 712,129
200,000 New Jersey Educational Facilities Authority (Princeton
University) Revenue, Series A, 6.25%, due 07/01/1997......... 202,430
1,000,000 Omaha, NE, Public Power District Electric Revenue,
Series B, 4.10%, due 02/01/1997.............................. 1,000,366
150,000 Pine Bluff, AR, Sewer Revenue, 6.50%, due 03/01/1997........... 153,674
500,000 Purdue University Certificates of Participation - 1996,
3.75%, due 07/01/1997........................................ 500,000
450,000 Richardson, TX, Independent School District
General Obligation, 7.00%, due 05/15/1997.................... 455,043
850,000 Snohomish County, WA (Edmonds School District No. 15),
Unlimited Tax General Obligation, 3.80%, due 06/01/1997...... 850,000
200,000 Sparks, NV, Limited Tax General Obligation,
4.00%, due 09/01/1997........................................ 200,447
1,500,000 Tennessee State School Board (Higher Educational Facilities)
Revenue, Series B, 5.00%, due 05/01/1997..................... 1,505,544
200,000 State of Washington Unlimited Tax General Obligation
AB-7, 8.25%, due 02/01/1997.................................. 200,715
------------
9,441,598
------------
REFUNDED BONDS-11.76%
300,000 District of Columbia, Series 1987-A, General Obligation,
7.60%, due 06/01/1997, Pre-refunded at 101.5................. 309,440
500,000 Emerald, Peoples Utility District, OR, Revenue,
7.50%, due 11/01/1997, Pre-refunded at 100................... 515,831
260,000 Lower Colorado River Authority, TX, Revenue,
5.875%, due 05/01/1997, Pre-refunded at 100.................. 261,729
210,000 Lower Colorado River Authority, TX, Revenue,
6.25%, due 05/01/1997, Pre-refunded at 100................... 211,649
415,000 Lower Colorado River Authority, TX, Revenue,
6.375%, due 05/01/1997, Pre-refunded at 100.................. 418,428
400,000 Maricopa County, AZ, Community College District Revenue,
Junior Lien, 6.90%, due 07/15/1997, Pre-refunded at 101.5 412,944
300,000 Multnomah County, OR, Certificates of Participation,
6.85%, due 07/15/1997 (Escrowed to maturity)................. 304,870
250,000 Pennsylvania Intergovernment Co-op Authority
Special Tax Revenue (City of Philadelphia Funding Program),
5.40%, due 06/15/1997, (Escrowed to maturity)................ 251,930
500,000 Portland, OR, Urban Renewal and Downtown Waterfront Tax
Allocation, Series H, 8.25%, due 12/01/1997, Pre-refunded at 100 520,660
550,000 San Antonio, TX, Water Revenue, 5.25%, due 05/01/1997,
(Escrowed to maturity)....................................... 552,453
------------
3,759,934
------------
VARIABLE RATE DEMAND OBLIGATIONS*-56.81%
400,000 Alabama Special Care Facilities Financing Authority (Montgomery
Hospital Depreciable Assets), due 04/01/2015, 4.15%.......... 400,000
300,000 Arizona Health Facilities Authority Revenue
(Pooled Loan Program), due 10/01/2015, 4.15%................. 300,000
500,000 Athens, AL, Industrial Development Board (Coilplus, Inc.
Project), Series 1984, due 09/01/1999, 4.30%................. 500,000
300,000 Austin County, TX, Industrial Development Corporation
(Justin Industries, Inc. Project), due 12/01/2014, 4.10%..... 300,000
500,000 Brazos River, TX, Pollution Control Refunding Revenue
(Monsanto Company Project), due 11/01/2000, 4.15%**.......... 500,000
1,500,000 Chicago O'Hare International Airport General Airport
Second Lien Revenue, Series B, due 01/01/2015, 4.15%......... 1,500,000
1,100,000 Delaware Economic Development Authority Gas Facilities
Refunding Revenue (Delmarva Power Project), Series C,
due 10/01/2028, 4.15%**...................................... 1,100,000
500,000 Florida Housing Finance Authority, Multifamily Housing
(Village Place), due 11/01/2007, 4.15%....................... 500,000
400,000 Florida Housing Finance Authority, Multifamily Housing
(Oak Mill), due 11/01/2007, 4.15%............................ 400,000
400,000 Greensboro, NC, Public Improvement, Series B,
due 04/01/2010, 4.05%........................................ 400,000
1,400,000 Hawaii State Housing Finance & Development Corporation
(Rental Housing System), Series A, due 07/01/2025, 4.20%..... 1,400,000
400,000 Illinois Health Facility (Bensenville Home Society),
Series A, due 02/15/2019, 4.10%.............................. 400,000
900,000 Illinois Health Facility (Hospital Sisters Services),
Series E, due 12/01/2014, 12/01/2015, 4.15%.................. 900,000
1,100,000 Jackson/Union County, IL, Port District Port Facilities Revenue
Bond (Enron Transportation Service), due 04/01/2024, 4.15%** 1,100,000
700,000 Lower Neches Valley Authority, TX, (Neches River Treatment
Project), due 02/01/2004 (Guaranteed by Mobil Corp.), 4.15%** 700,000
300,000 Metro Government Nashville/Davidson County, TN,
Airport Authority Special Facilities Revenue Bond (American
Airlines Project), Series A, due 10/01/2012, 4.95%........... 300,000
600,000 Metro Government Nashville/Davidson County, TN, Health and
Educational Facilities Board Revenue (Hospital Depreciable
Assets), Series A, due 06/01/2015, 4.15%..................... 600,000
300,000 Metro Government Nashville/Davidson County, TN, Industrial
Development Multifamily Housing Revenue (Chimneytop II),
due 09/01/2006, 4.15%........................................ 300,000
300,000 Michigan Job Development Authority Revenue
(East Lansing Residence), due 12/01/2014, 3.90%.............. 300,000
200,000 Michigan Job Development Authority Revenue
(Kentwood Residence), due 11/01/2014, 3.90%.................. 200,000
600,000 Michigan Hospital Finance Authority (Equipment Loan Program),
due 12/01/2023, 4.15%........................................ 600,000
400,000 Michigan Hospital Finance Authority (Equipment Loan
Program), Series A, due 12/01/2023, 4.15%.................... 400,000
500,000 Oregon State Veteran's Welfare Unlimited Tax General
Obligation, Series 73E, due 12/01/2016, 4.05%................ 500,000
1,000,000 Richland, WA, Golf Enterprise Revenue, due 12/01/2021, 4.30% .. 1,000,000
1,465,000 Seattle, WA, Housing Authority Low Income Housing
Assistance Revenue (Bayview Manor Project), Series B,
due 05/01/2019, 4.20%........................................ 1,465,000
600,000 Seattle, WA, Municipal Power and Light Revenue,
due 11/01/2018, 4.15%........................................ 600,000
500,000 Washington County, PA, Lease Revenue, Higher Education
(Pooled Equipment Lease) Series 1985-A, due 11/01/2005, 4.15% 500,000
500,000 Wisconsin Health and Educational Facilities Authority (SSM Health
Care Project), Series A, Revenue, due 06/01/2006, 4.15%...... 500,000
500,000 Wood Dale, IL, Industrial Development Revenue Bond (Nippon
Express USA, Inc. Project), due 06/01/2000, 4.30%............ 500,000
------------
18,165,000
------------
TOTAL STATE AND MUNICIPAL SECURITIES (cost $31,366,532)........ 31,366,532
------------
OTHER INVESTMENT-0.42%
135,500 Nuveen Tax Exempt Money Market Fund, 3.67% (cost $135,500)..... 135,500
------------
TOTAL INVESTMENTS (cost $31,502,032)........................... 31,502,032
Other assets ($662,585) less liabilities ($188,475)............ 474,110
------------
NET ASSETS..................................................... $31,976,142
============
**Variable Rate Demand Obligations are payable on demand and are secured by
letters of credit, liquidity agreements, and other credit support. The
interest rate, which is subject to change periodically, is based on an
index of market interest rates.
**Obligations of various corporations which are not supported by other third
party credit agreements.
FEDERAL INCOME TAX INFORMATION:
The aggregate cost of investments owned at December 31, 1996, for federal income
tax and financial reporting purposes was $31,502,032.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
COMPOSITE
CASH
MANAGEMENT
COMPANY
FINANCIAL
INFORMATION
DECEMBER 31,
1996
INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
COMPOSITE CASH MANAGEMENT COMPANY
We have audited the accompanying statements of assets and liabilities,
including the investment portfolios, of Composite Cash Management Company
(comprising, respectively, the Money Market and Tax-Exempt Portfolios) as of
December 31, 1996, and the related statements of operations for the year then
ended and the statements of changes in net assets for the years ended December
31, 1996 and 1995, and the financial highlights for each of the five years in
the period ended December 31, 1996. These financial statements and financial
highlights are the responsibility of the Funds' 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 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 confirming securities owned as of December
31, 1996, 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 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
each of the respective portfolios constituting Composite Cash Management Company
as of December 31, 1996, and the results of their operations, the changes in
their net assets, and their financial highlights for the above-stated periods in
conformity with generally accepted accounting principles.
LEMASTER & DANIELS PLLC
CERTIFIED PUBLIC ACCOUNTANTS
SPOKANE, WASHINGTON
JANUARY 24, 1997
<PAGE>
STATEMENTS OF ASSETS
AND LIABILITIES
DECEMBER 31, 1996
MONEY MARKET TAX-EXEMPT
PORTFOLIO PORTFOLIO
------------- -------------
ASSETS
Investments at value (identi-
fied cost $229,367,191, and
$31,502,032, respectively) $229,367,191 $31,502,032
Cash.............................. 311,133 110,951
Prepaid expense................... 26,114 9,662
Receivable for:
Sale of Fund's shares........... 3,315,323 321,899
Interest........................ 124,104 220,073
------------- ------------
Total assets...................... 233,143,865 32,164,617
------------- ------------
Liabilities
Payable for:
Repurchase of Fund's shares 3,569,969 176,549
Accrued expenses and
other payables................. 101,639 11,926
------------- ------------
Total liabilities................. 3,671,608 188,475
------------- ------------
NET ASSETS........................ $229,472,257 $31,976,142
============= ============
COMPOSITION OF
NET ASSETS
Capital Stock, at par............. $ 22,947 $ 3,198
Additional paid-in capital........ 229,449,310 31,972,944
------------- ------------
$229,472,257 $31,976,142
============= ============
SHARES OUTSTANDING ............... 229,472,257 31,976,142
============= ============
CLASS A SHARES:
Net asset value, offering
price, and redemption
price per share (net assets
of $229,355,308 and
$31,973,937, respectively, for
229,355,308 and 31,973,937
shares outstanding,
respectively).................. $1.00 $1.00
============ ============
CLASS B SHARES:
Net asset value, offering
price, and redemption
price per share (net assets
of $116,949 and $2,205,
respectively, for 116,949
and 2,205 shares outstanding,
respectively).......... $1.00 $1.00
============ ============
See accompanying notes to financial statements.
STATEMENTS
OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
MONEY MARKET TAX-EXEMPT
PORTFOLIO PORTFOLIO
------------ ------------
INVESTMENT INCOME
Interest income............. $11,252,565 $1,120,029
------------ ------------
Expenses:
Management fees............. 916,867 139,482
Distribution expenses -
Class A................... 20,720 -
Class B................... 1,270 16
Shareholder servicing -
Class A................... 410,863 26,696
Class B................... 215 40
Postage, printing and
office expense............ 206,941 17,859
Registration and filing fees 144,585 16,782
Custodial fees.............. 88,938 13,193
Directors' fees............. 7,390 7,390
Auditing and legal fees..... 8,228 4,973
Insurance................... 4,271 1,323
Expense reimbursement....... (202,612) (47,274)
------------- ------------
Total expenses................ 1,607,676 180,480
Fees paid indirectly.......... (66,693) (7,409)
------------- ------------
Net expenses.................. 1,540,983 173,071
------------- ------------
Net investment income......... 9,711,582 946,958
------------- ------------
NET INCREASE IN NET
ASSETS RESULTING
FROM OPERATIONS............... $ 9,711,582 $ 946,958
============= ============
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
MONEY MARKET TAX-EXEMPT
PORTFOLIO PORTFOLIO
------------------------- ------------------------
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
1996 1995 1996 1995
------------ ----------- ---------- ------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income ................................. $ 9,711,582 $ 7,553,304 $ 946,958 $ 1,035,200
Net realized gain on investments....................... - 9,864 - 165,507
------------ ------------ ---------- -------------
Net increase in net assets resulting from operations... 9,711,582 7,563,168 946,958 1,200,707
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A.............................................. (9,706,992) (7,550,363) (946,927) (1,035,177)
Class B.............................................. (4,590) (2,941) (31) (23)
Distributions from net capital gains from investment transactions:
Class A.............................................. - (9,858) - (165,501)
Class B.............................................. - (6) - (6)
NET CAPITAL SHARE TRANSACTIONS
Class A.............................................. 58,129,940 45,574,783 986,131 (2,624,310)
Class B.............................................. 42,492 63,601 1,172 6
------------ ------------ ------------ -------------
Total increase (decrease) in net assets................ 58,172,432 45,638,384 987,303 (2,624,304)
NET ASSETS
Beginning of the year.................................. 171,299,825 125,661,441 30,988,839 33,613,143
------------ ------------ ------------ -------------
End of the year........................................ $229,472,257 $171,299,825 $31,976,142 $30,988,839
============ ============ ============ =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
MONEY MARKET PORTFOLIO
Class A
Years Ended December 31,
1996 1995 1994 1993 1992
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ...................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
-------- -------- -------- -------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.................................. 0.0476 0.0519 0.0341 0.0238 0.0302
-------- -------- -------- -------- ---------
Total From Investment Operations..................... 0.0476 0.0519 0.0341 0.0238 0.0302
-------- -------- -------- -------- ---------
LESS DISTRIBUTIONS
Dividends (from net investment income)................. (0.0476) (0.0519) (0.0341) (0.0238) (0.0302)
-------- -------- -------- -------- ---------
Total Distributions.................................. (0.0476) (0.0519) (0.0341) (0.0238) (0.0302)
-------- -------- -------- -------- ---------
NET ASSET VALUE, END OF YEAR ............................ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======== ======== ======== ======== =========
TOTAL RETURN ............................................ 4.88% 5.33% 3.47% 2.41% 3.07%
Ratios/Supplemental Data
Net Assets, End of Year ($1,000's)..................... $229,355 $171,225 $125,651 $135,187 $141,193
Ratio of Expenses to Average Net Assets(1) ............ 0.79% 0.92% 0.95% 0.97% 0.88%
Ratio of Net Income to Average Net Assets.............. 4.77% 5.19% 3.39% 2.38% 3.04%
</TABLE>
<TABLE>
<CAPTION>
Class B Years Ended May 2 to
December 31, Dec. 31,
1996 1995 1994(2)
------- ------- --------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD .................... $1.0000 $1.0000 $1.0000
------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.................................. 0.0384 0.0421 0.0184
------- ------- --------
Total From Investment Operations..................... 0.0384 0.0421 0.0184
------- ------- --------
LESS DISTRIBUTIONS
Dividends (from net investment income)................. (0.0384) (0.0421) (0.0184)
------- ------- --------
Total Distributions.................................. (0.0384) (0.0421) (0.0184)
------- ------- --------
NET ASSET VALUE, END OF PERIOD .......................... $1.0000 $1.0000 $1.0000
======= ======= ========
TOTAL RETURN ............................................ 3.91% 4.30% 2.78%(3)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period ($1,000's)................... $117 $74 $11
Ratio of Expenses to Average Net Assets(1) ............ 1.69% 1.94% 1.93%(3)
Ratio of Net Income to Average Net Assets.............. 3.87% 4.19% 3.29%(3)
(1) Ratio of expenses to average net assets includes expenses paid indirectly beginning in fiscal 1995. The ratios before voluntary
waiver of certain fees incurred by the portfolio and expense reimbursements for Class A shares were .89% in 1996, 1.04% in
1995, 1.04% in 1994, and 1.03% in 1993; for Class B shares, the ratios were 1.90% in 1996, 2.10% in 1995 and 2.62% in 1994.
(2) From the commencement of offering Class B Shares.
(3) Annualized.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
TAX-EXEMPT PORTFOLIO
Class A
YEARS ENDED DECEMBER 31,
1996 1995 1994 1993 1992
--------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ...................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
--------- --------- -------- --------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.................................. 0.0301 0.0339 0.0235 0.0203 0.0238
--------- --------- -------- --------- --------
Net Gains or (Losses) on Securities
(both realized and unrealized)........................ - 0.0054 - - -
--------- --------- -------- --------- --------
Total From Investment Operations..................... 0.0301 0.0393 0.0235 0.0203 0.0238
--------- --------- -------- --------- --------
LESS DISTRIBUTIONS
Dividends (from net investment income)................. (0.0301) (0.0339) (0.0235) (0.0203) (0.0238)
Distributions (from capital gains)..................... - (0.0054) - - -
--------- --------- -------- --------- --------
Total Distributions.................................. (0.0301) (0.0393) (0.0235) (0.0203) (0.0238)
--------- --------- -------- --------- --------
NET ASSET VALUE, END OF YEAR ............................ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
========= ========= ======== ========= ========
TOTAL RETURN............................................. 3.05% 4.01% 2.37% 2.06% 2.41%
Ratios/Supplemental Data
Net Assets, End of Year ($1,000's)..................... $31,974 $30,988 $33,612 $34,513 $32,425
Ratio of Expenses to Average Net Assets(1) ............ 0.57% 0.61% 0.60% 0.50% 0.57%
Ratio of Net Income to Average Net Assets.............. 3.01% 3.39% 2.33% 2.03% 2.36%
</TABLE>
<TABLE>
<CAPTION>
Class B Years Ended May 2 to
December 31, Dec. 31,
1996 1995 1994(2)
------- ------- --------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD .................... $1.0000 $1.0000 $1.0000
------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.................................. 0.0199 0.0226 0.0097
Net Gains or (Losses) on Securities
(both realized and unrealized)........................ - 0.0054 -
------- ------- --------
Total From Investment Operations..................... 0.0199 0.0280 0.0097
------- ------- --------
LESS DISTRIBUTIONS
Dividends (from net investment income)................. (0.0199) (0.0226) (0.0097)
Distributions (from capital gains)..................... - (0.0054) -
------- ------- --------
Total Distributions.................................. (0.0199) (0.0280) (0.0097)
------- ------- --------
NET ASSET VALUE, END OF PERIOD .......................... $1.0000 $1.0000 $1.0000
======= ======= ========
TOTAL RETURN ............................................ 2.01% 2.83% 1.45%(3)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period ($1,000's)................... $2 $1 $1
Ratio of Expenses to Average Net Assets(1) ............ 1.53% 1.73% 1.66%(3)
Ratio of Net Income to Average Net Assets.............. 1.99% 2.12% 1.38%(3)
(1) Ratio of expenses to average net assets includes expenses paid indirectly beginning in fiscal 1995. Portions of the expenses
were voluntarily waived and reimbursed by the Adviser, Transfer Agent and Distributor. The ratios before such waivers and
expense reimbursements for Class A shares were .72% for 1996, .81% for 1995, .76% in 1994, and .77% in 1993; for Class B
shares, the ratios were 4.22% in 1996, 3.66% in 1995 and 3.61% in 1994.
(2) From the commencement of offering Class B Shares.
(3) Annualized.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
NOTE 1 - ACCOUNTING POLICIES
Composite Cash Management Company (the "Company"), is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Company consists of taxable and tax-exempt
money market portfolios, each designed to meet different investment objectives.
The Company offers both Class A and Class B shares. The two classes of
shares differ in their respective shareholder servicing fees, distribution and
service fees, and sales charges. All shareholders bear common expenses of the
Company pro rata, based on value of settled shares outstanding, without
distinction between share class. Dividends are declared separately for each
class. Neither class has preferential dividend rights; differences in per share
dividend rates are generally due to differences in separate class expenses,
including distribution expenses and shareholder servicing fees.
Following is a summary of significant accounting policies, in conformity
with generally accepted accounting principles, which are consistently followed
by the Company in the preparation of its financial statements.
a. Investment securities are valued at cost as adjusted for amortization
of premiums and discounts where applicable. The Board of Directors
regularly and routinely monitors amortized cost assigned to these
securities to insure that carrying value approximates market value.
b. The Money Market Portfolio requires the custodian to take possession,
to have legally segregated in the Federal Reserve Book Entry System or
to have segregated within the custodian's vault, all securities held
as collateral for repurchase agreements. The market value of the
underlying securities is required to be at least 102% of the resale
price at the time of purchase. If the seller of the agreement defaults
and the value of the collateral declines, or if the seller enters an
insolvency proceeding, realization of the value of the collateral by
the Fund may be delayed or limited.
c. The Company distributes its net interest income daily plus or minus
any realized gains or losses, if applicable. Net interest income
equals return on the investment portfolio less expenses including
management fees.
d. Interest income is determined on the basis of interest accrued and
discounts earned and is computed daily.
e. Security transactions are accounted for on the trade date (execution
date of the order to buy or sell). The cost of investments sold is
determined by use of the specific identification method for both
financial reporting and federal income tax purposes.
f. The Company complies with requirements of the Internal Revenue Code
applicable to regulated investment companies and distributes its
income and realized capital gains so that no provision for federal
income or excise tax is required. Income dividends are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. For the year ended December 31, 1996,
the Tax-Exempt Portfolio did not distribute income subject to the
alternative minimum tax.
g. Custodial fees have been increased by $66,693 and $7,409 for the Money
Market and Tax-Exempt Portfolios, respectively. Such amounts relate to
"expense offset arrangements." The Company could have otherwise
employed the assets to produce income if it had not entered into such
arrangements. In accordance with regulations, such amounts are added
to custodial fees actually incurred to arrive at gross custodial fees
and then reflected as a deduction, "fees paid indirectly" to derive
net expenses. There were no "expense offset arrangements" other than
custodial fees.
h. The preparation of financial statements in conformity with generally
accepted accounting principles 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 statement and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
NOTE 2 - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
The amounts of fees and expenses described below are shown on each Fund's
statement of operations. Composite Research & Management Co. (the "Adviser")
manages each Portfolio; Murphey Favre, Inc. (the "Distributor"), is the
principal underwriter; and Murphey Favre Securities Services, Inc. (The
"Transfer Agent"), is the transfer and shareholder servicing agent. All are
affiliates of Washington Mutual Bank and Washington Mutual fsb and subsidiaries
of Washington Mutual, Inc.
Management fees were paid by the Company to the Adviser. Management fees
are equal to an annual rate of .45% of each fund's average daily net assets of
the first $1 billion and .40% on assets in excess of $1 billion.
Under terms of the management agreement, the Adviser will reimburse the
Company should any portfolio's expenses (excluding taxes, interest, portfolio
brokerage, and Class B shares distribution service fees, but including the
management fee) exceed in any fiscal year 1.50% of the average daily net assets
up to $30 million, and 1% of such net assets over $30 million. No such
reimbursement was required during the year ended December 31, 1996.
Directors' fees and expenses were paid directly to directors having no
affiliation with the Company other than in their capacity as directors. Other
officers and directors received no compensation from the Company.
Shareholder servicing fees were paid to the Transfer Agent for services
incidental to issuance and transfer of shares, maintaining shareholder lists,
and issuing and mailing distributions and reports. The authorized monthly
shareholder servicing fees are $1.55 and $1.65 per Class A and Class B
shareholder accounts, respectively. The Transfer Agent is currently waiving the
shareholder servicing fee on Class B shareholder accounts. Additionally, for all
shareholder accounts with balances below $1,000, the Transfer Agent has waived
shareholder servicing fees. For the year ended December 31, 1996, the total
shareholder servicing fees waived were $137,904 and $1,628 for the Money Market
and Tax-Exempt Portfolios, respectively.
Distribution expenses were paid to the Distributor, in accordance with
separate Distribution Plans for Class A and Class B. The Company's Board of
Directors adopted the Plans pursuant to Rule 12b-1 of the Investment Company Act
of 1940. The Class A Distribution Plan provides that the Company will reimburse
MFI up to 0.15% of the average daily net assets attributable to Class A shares
annually for a portion of its expenses incurred in distributing the Company's
Class A shares, including payments to brokers. The Class B Distribution Plan
provides that the Company will pay the Distributor a distribution fee, equal to
0.75% annually, and a service fee of 0.25% of the Company's average daily net
assets attributable to Class B shares.
For the year ended December 31, 1996, the Distributor received contingent
deferred sales charges of $5,275 from the Money Market Portfolio upon redemption
of Class B shares as reimbursement for sales commissions advanced by the
Distributor at the time of such sales.
For non-IRA shareholder accounts with balances below $1,000 and IRA
shareholder accounts with balances below $500, the Distributor has agreed to
reimburse the Company for printing and postage costs. For the year ended
December 31, 1996, the Money Market and Tax-Exempt Portfolios were reimbursed a
total of $64,708 and $859, respectively.
The Adviser, Transfer Agent, and Distributor have jointly agreed to equally
reimburse the Tax-Exempt Portfolio for a portion of expenses incurred. For the
year ended December 31, 1996, the Tax-Exempt Portfolio was reimbursed a total of
$44,787.
NOTE 3 - CAPITAL STOCK
Money Market Portfolio:
Capital stock authorized ............ 5,000,000,000
Designated as:
Class A............................ 3,000,000,000
Class B............................ 2,000,000,000
Par value per share.................. $0.0001
Note 3 - Capital Stock (continued)
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------------- ------------------------
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
-------------------------- ------------------------
1996 1995 1996 1995
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
SHARES
Sold.................................................... 600,191,639 468,926,898 429,250 157,286
Issued for reinvestment of dividends and capital gains.. 9,585,807 7,464,213 4,519 2,616
------------ ------------- ------------ -----------
609,777,446 476,391,111 433,769 159,902
Reacquired.............................................. (551,647,506)(430,816,328) (391,277) (96,301)
------------ ------------- ------------ -----------
Net increase............................................ 58,129,940 45,574,783 42,492 63,601
============ ============= ============ ===========
</TABLE>
TAX-EXEMPT PORTFOLIO
Capital stock authorized ............ 5,000,000,000
Designated as:
Class A............................ 3,000,000,000
Class B............................ 2,000,000,000
Par value per share.................. $0.0001
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------- ------------------------
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
------------------------- ------------------------
1996 1995 1996 1995
------------ ------------ ------------- ----------
<S> <C> <C> <C> <C>
SHARES
Sold.................................................... 54,027,014 53,063,893 2,901 0
Issued for reinvestment of dividends and capital gains.. 939,901 1,193,764 8 19
------------ ------------ ------------- ----------
54,966,915 54,257,657 2,909 19
Reacquired.............................................. (53,980,784) (56,881,967) (1,737) (13)
------------ ------------ ------------- ----------
Net increase (decrease)................................. 986,131 (2,624,310) 1,172 6
============ ============ ============= ==========
</TABLE>
<PAGE>
A FAMILY OF
FUNDS TO MEET
MOST ANY NEED
MORE ABOUT THE COMPOSITE GROUP
A RANGE OF INVESTING
OPPORTUNITIES FOR YOU
The Composite Group offers you six additional portfolios, with such varied
groupings as value-oriented common stocks, income-producing government and
corporate bonds and tax-exempt municipal obligations. An investment in one or
more of these funds makes it possible for you to match your objectives with
sensible investment opportunities.
COMPOSITE BOND & STOCK FUND
This Fund is managed to provide the potential for steady income,
conservation of principal, and long-term growth of income and principal.
Investments are made in bonds, preferred and common stocks, and convertible
bonds.
COMPOSITE GROWTH & INCOME FUND
Long-term capital growth is the focus for this Fund. Current income is a
secondary consideration. The Fund invests principally in high-quality common
stocks which, in our opinion, are undervalued.
COMPOSITE NORTHWEST FUND
The Northwest Fund seeks long-term growth of capital by investing in common
stocks of companies located or doing business in Washington, Oregon, Idaho,
Montana and Alaska.
COMPOSITE U.S. GOVERNMENT SECURITIES
Securities for this Fund are selected for their ability to provide a high
level of current income, consistent with safety and liquidity. Investments are
made in obligations issued or guaranteed by the U.S. government. The Fund also
invests in repurchase agreements and collateralized mortgage obligations secured
by those types of obligations. Individual fund shares are not guaranteed by the
U.S. government, and share values will fluctuate.
COMPOSITE INCOME FUND
The objective of this Fund is to provide a high level of current income
that is consistent with protection of shareholders' capital. It does this
through careful investment in a diversified pool of debt securities.
COMPOSITE TAX-EXEMPT BOND FUND
Current income, free from federal income tax, is targeted for this Fund.
Investments are made in high-quality municipal bonds that have received one of
the four highest ratings from Standard & Poor's Corporation or Moody's Investor
Service, Inc. In some tax situations, the alternative minimum tax and/or state
and local taxes may apply.
HELPFUL FEATURES OFFERED
BY THE COMPOSITE GROUP
* Distinct portfolios to fit your objectives
* Diversification within portfolios
* Highly experienced professional management
* Ease of exchange from one fund to another
* Most funds appropriate for IRAs
* Automatic reinvestment of earnings
* Systematic investment programs
* Convenient monthly payments of principal and interest
(Continued withdrawals in excess of income, of course, will eventually
exhaust principal.)
WE'RE HERE TO HELP
We encourage you to visit with your investment representative when you have
questions about your investments or a new goal you have in mind.
But you also may call Composite Customer Service toll-free at 1-800-543-8072,
Monday through Friday, 7:00 a.m. - 6:00 p.m., Pacific time.
Or, if you prefer, you can have virtual 24-hour access to account
information by calling the Composite INFO-LINE at 1-800-662-3533 on your
touch-tone telephone. Readily available information includes such data as
account balances, fund prices, and last-transaction details. When calling,
please be sure to have your account number and personal identification number
(the last four digits of your Social Security or tax ID number) handy. Both are
listed on your statement.
When calling INFO-LINE, please respond to the recorded prompt messages by
pressing the appropriate numbers on your touch-tone phone.
For more information on any of the Composite Group funds, including charges
and expenses, write or call for a free prospectus. Please read it carefully
before you invest or send money.
<PAGE>
For further information, please contact:
FUND OFFICES
Composite Group of Funds
601 W. Main Avenue, Suite 801
Spokane, WA 99201-0613
Phone: (509) 353-3550
Toll free: (800) 543-8072
ADVISER
Composite Research & Management Co.
1201 Third Avenue, Suite 1400 Seattle, WA 98101-3015
DISTRIBUTOR
Murphey Favre, Inc.
1201 Third Avenue, Suite 780 Seattle, WA 98101-3015
CUSTODIAN
Investors Fiduciary Trust Company
127 W. 10th Street Kansas City, MO 64105-1716
INDEPENDENT PUBLIC ACCOUNTANTS
LeMaster & Daniels PLLC
601 W. Riverside Avenue, Suite 800 Spokane, WA 99201-0614
COUNSEL
Paine, Hamblen, Coffin, Brooke & Miller LLP
717 W. Sprague Avenue, Suite 1200 Spokane, WA 99204-0464
OFFICERS
President
William G. Papesh
Executive Vice President
Kerry K. Killinger
Vice Presidents
Gene G. Branson
Douglas D. Springer
Vice President & Treasurer
Monte D. Calvin
Secretary
John T. West
Board of Directors
Members
Wayne L. Attwood, M.D.
Kristianne Blake
Anne V. Farrell
Michael K. Murphy
William G. Papesh
Daniel L. Pavelich
Jay Rockey
Leland J. Sahlin
Richard C. Yancey
This report is submitted for the general information of
shareholders of the Fund. For more detailed information
about the Fund, its officers and directors, fees, expenses
and other pertinent information, please see the prospectus
of the Fund. This report is not authorized for distribution
to prospective investors in the Fund unless preceded or
accompanied by an effective prospectus.
