<PAGE>
[LOGO]
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
RESERVE INSTITUTIONAL TRUST
PRIMARY INSTITUTIONAL FUND
U.S. GOVERNMENT INSTITUTIONAL FUND
U.S. TREASURY INSTITUTIONAL FUND
INTERSTATE TAX-EXEMPT
INSTITUTIONAL FUND
NOVEMBER 30, 1999
[LOGO] BULK RATE
U.S. POSTAGE
PAID
PERMIT NO. 8898
BRONX, N.Y.
1250 BROADWAY, NEW YORK, NY 10001-3701
(212) 401-5500
GENERAL INFORMATION AND 24-HOUR YIELD AND BALANCE INFORMATION
800-637-1700
This literature is not authorized for distribution to prospective investors
unless preceded or accompanied by an appropriate current prospectus.
Distributor--Resrv Partners, Inc.
RIT/SEMI-ANNUAL 01/00
<PAGE>
RESERVE INSTITUTIONAL TRUST--PRIMARY INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--54.6% (NOTE 1)
- ------------ ---------------------------------------------- ------------
<S> <C> <C>
DOMESTIC--12.3%
$ 16,000,000 BankBoston, NA, 5.85%, 2/14/00................................................................. $ 16,000,000
5,000,000 Chase Manhattan Bank, 5.85%, 2/14/00........................................................... 5,000,000
18,000,000 Morgan Guaranty Trust Co., N.Y., 5.65%, 2/3/00................................................. 18,000,000
5,000,000 Wilmington Trust Co., 5.88%, 2/22/00........................................................... 5,000,000
------------
44,000,000
------------
EURO--6.7%
12,000,000 ING Bank, NV, 5.87%, 3/27/00................................................................... 12,000,000
12,000,000 Bank of Scotland, 6.14%, 1/31/00............................................................... 12,000,000
------------
24,000,000
------------
YANKEE--35.6%
12,000,000 Bank Austria, 6.08%, 2/22/00................................................................... 12,000,000
15,000,000 Banque National de Paris, 6.00%, 2/29/00....................................................... 15,000,000
12,000,000 Bayerische Landesbank Girozentrale, 6.01%, 2/7/00.............................................. 12,000,111
17,000,000 Commerzbank, AG, 5.79%, 2/10/00................................................................ 17,000,000
17,000,000 Credit Suisse First Boston, 5.73%, 2/7/00...................................................... 17,000,312
15,000,000 Deutsche Bank AG, 6.00%, 3/2/00................................................................ 15,000,000
10,000,000 Lloyds TSB Bank PLC, 5.90%, 2/15/00............................................................ 10,000,000
15,000,000 National Westminster Bank, PLC, 5.5425%, 11/22/00.............................................. 14,989,934
15,000,000 Westdeutsche Landesbank Girozentrale, 6.00%, 3/1/00............................................ 15,000,000
------------
127,990,357
------------
Total Negotiable Bank Certificates of Deposit (Cost $195,990,357).............................. 195,990,357
------------
COLLATERALIZED PROMISSORY NOTES--4.1% (A)
15,000,000 ABN/AMRO, N.A., 5.73%, 2/23/00
(Cost $14,799,450)............................................................................ 14,799,450
------------
REPURCHASE AGREEMENTS--44.6%
85,000,000 Bear, Stearns & Co. Inc., 5.74%,12/1/99 (collateralized by FNMA 0% due 4/18/27 valued at
$7,722,949, FGRA 0% due 8/15/28 to 8/15/29 valued at $5,967,361, FGRM 6.50% to 7.00% due
5/15/24 to 3/15/26 valued at $44,363,501, FNRM 0% due 7/25/08 to 3/25/23 valued at $9,696,443,
FNRA 0% due 11/25/10 to 11/25/29 valued at $10,988,532, FNRM 0% due 12/25/26 valued at
$9,014,558)................................................................................... 85,000,000
75,000,000 Prudential Securities, Inc., 5.65 to 5.71%, 12/1/99 (collateralized by FNRM 6.50% due 1/29/25
valued at $23,966,480, FGRM 6.00% due 8/19/15 valued at $9,797,358, FHLB 0% due 1/4/06 valued
at $43,068,561)............................................................................... 75,000,000
------------
Total Repurchase Agreements (Cost $160,000,000)................................................ 160,000,000
------------
<S> <C> <C> <C>
TOTAL INVESTMENTS (COST $370,789,807)................................................. 103.3% 370,789,807
LIABILITIES, LESS OTHER ASSETS........................................................ (3.3) (11,667,135)
------ ------------
NET ASSETS............................................................................ 100.0% $359,122,672
------ ------------
------ ------------
<CAPTION>
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE OF EACH CLASS BASED ON SHARES OF BENEFICIAL INTEREST
$.001 PAR VALUE OUTSTANDING AND EQUIVALENT TO THE NET ASSETS OF EACH CLASS:
<S> <C>
48,400,150 SHARES CLASS A.................................................. $1.00
=====
16,542,038 SHARES CLASS B.................................................. $1.00
=====
50,760,643 SHARES CLASS C.................................................. $1.00
=====
243,419,841 SHARES TREASURER'S TRUST....................................... $1.00
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE>
RESERVE INSTITUTIONAL TRUST--U.S. GOVERNMENT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT REPURCHASE AGREEMENTS-101.7% (NOTE 1)
- ------------ ---------------------------- ------------
<S> <C> <C>
$ 8,000,000 Bear, Stearns & Co. Inc., 5.72%, 12/1/99 (collateralized by GNMA, 6.50%-8.00%, due from 6/15/26
to 9/15/28 valued at $8,299,844).............................................................. $ 8,000,000
9,000,000 Merrill Lynch, GSI, 5.63%, 12/1/99 (collateralized by UST Note, 5.50% due 5/15/09 valued at
$9,003,322)................................................................................... 9,000,000
9,000,000 Prudential Securities, Inc., 5.68%, 12/1/99 (collateralized by G1JP, 6.50%%, due 11/12/15
valued at $9,000,000)......................................................................... 9,000,000
9,000,000 Goldman Sachs & Co., 5.63%, 12/1/99 (collateralized by GNMA, 7.00% due 9/20/29 valued at
$9,000,000)................................................................................... 9,000,000
------------
<S> <C> <C>
TOTAL INVESTMENTS (COST $35,000,000).................................................. 101.7% 35,000,000
LIABILITIES, LESS OTHER ASSETS........................................................ (1.7) (586,395)
------ ------------
NET ASSETS............................................................................ 100.0% $ 34,413,605
------ ------------
------ ------------
<S> <C> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION PRICES PER SHARE BASED ON 34,413,605 SHARES
OF BENEFICIAL INTEREST, $.001 PAR VALUE OUTSTANDING.
17,105,050 SHARES CLASS A..................................................... $1.00
=====
7,831,257 SHARES CLASS B...................................................... $1.00
=====
9,477,298 SHARES TREASURER'S TRUST............................................ $1.00
=====
</TABLE>
RESERVE INSTITUTIONAL TRUST--U.S. TREASURY INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT U.S. TREASURY BILLS--99.3% (NOTE 1)
- ------------ ----------------------------------------------------------------------------------------------- ------------
<S> <C> <C>
$ 200,000 4.86%, 12/2/99................................................................................. $ 199,973
1,500,000 4.71% to 4.91%, 1/6/00......................................................................... 1,492,810
3,000,000 4.795% to 4.87%, 1/13/00....................................................................... 2,982,773
5,500,000 4.92% to 5.195%, 1/20/00....................................................................... 5,461,778
2,500,000 4.825% to 4.94%, 2/3/00........................................................................ 2,478,351
2,000,000 4.69% to 4.80%, 2/10/00........................................................................ 1,981,284
3,000,000 4.885% to 4.905%, 2/17/00...................................................................... 2,968,204
500,000 5.135%, 2/24/00................................................................................ 493,938
500,000 4.82%, 3/9/00.................................................................................. 493,372
------------
<S> <C> <C>
TOTAL INVESTMENTS (COST $18,552,483).................................................. 99.3% 18,552,483
OTHER ASSETS, LESS LIABILITIES........................................................ .7 135,574
------ ------------
NET ASSETS............................................................................ 100.0% $ 18,688,057
------ ------------
------ ------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICES PER SHARE BASED ON 18,688,057 SHARES OF
BENEFICIAL INTEREST, $.001 PAR VALUE OUTSTANDING:............................................. $1.00
=====
</TABLE>
GLOSSARY
<TABLE>
<S> <C>
G1JP GNMA 1 Single Family Platinum Pool
FGRA Federal National Mortgage Association ("FNMA") Adjustable Rate Gold REMIC
FGRM FHLMC Gold REMIC Mortgage-Backed Pass-Through Participation Certificates
FNRM Federal National Mortgage Association ("FNMA") REMIC Mortgage-Backed Pass-Through Securities
FNRA Federal National Mortgage Association Adjustable Rate REMIC
FHLB Federal Home Loan Bank
GNMA Government National Mortgage Association
FNMA Federal National Mortgage Association
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
RESERVE INSTITUTIONAL TRUST--INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1999--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--98.6% (NOTE 1)
- ------------ ----------------------------- ------------
<S> <C> <C>
ARIZONA--7.5%
$ 700,000 Apache County IDA for Tucson Electric Power Company, Series 83A, 3.90%, 12/15/18 (a)........... $ 700,000
1,000,000 Apache County IDA for Tucson Electric Power Company, Series 83B, 3.95%, 12/15/18 (a)........... 1,000,000
500,000 Pima County IDA PCR for Tucson Electric Project, 4.00%, 10/1/22 (a)............................ 500,000
600,000 Pima County G.O. Note, 4.75% 7/1/00 (b)........................................................ 603,216
------------
2,803,216
------------
COLORADO--7.6%
500,000 Arapahoe School District #5 for Cherry Creek, TAN, 4.25%, 6/30/00.............................. 501,496
1,000,000 Broomfield IDR for Buckeye INVTS Project, 3.95%, 12/1/09 (a)................................... 1,000,000
850,000 Denver Airport, Series B, 3.90%, 12/1/20 (a)................................................... 850,000
500,000 Smith Creek Metro District for Eagle County, 3.90%, 10/1/35 (a)................................ 500,000
------------
2,851,496
------------
DISTRICT OF COLUMBIA--1.3%
500,000 Washington, D.C. George Washington University, 3.90%, 3/1/06 (a)............................... 500,000
------------
FLORIDA--4.3%
500,000 Florida Local Gov't Financial Auth. for Lake Wales Medical Centers, Series A, 4.05%, 3/1/15
(a)........................................................................................... 500,000
400,000 Martin Pollution Control for Florida Power & Light Co, 3.70%, 9/1/24 (a)....................... 400,000
700,000 University Athletic Assn. Cap. Impt. for Florida Stadium Project, 4.00%, 2/1/20 (a)............ 700,000
------------
1,600,000
------------
GEORGIA--3.5%
700,000 Clayton Housing Auth. Multi Family for Rainwood Development, 3.975%, 5/1/06 (a)................ 700,000
600,000 Georgia Mun. Assn. Pool Bd. Certificate of Participation, 3.85%, 12/15/20 (a).................. 599,839
------------
1,299,839
------------
ILLINOIS--4.6%
500,000 Chicago Emergency Telephone System GOB, 4.50%, 1/1/00 (b)...................................... 500,000
400,000 Illinois HFA for Swedish Covenant Hospital, 3.90%, 8/1/25 (a).................................. 400,000
835,000 Illinois HFA for Community Hospital Center--C, 3.90%, 10/1/15 (a).............................. 835,000
------------
1,735,494
------------
KENTUCKY--5.9%
1,200,000 Kentucky Asset/Liability COP, 3.85%, 6/30/01 (b)............................................... 1,200,000
1,000,000 Kentucky Asset/Liability TRAN, 4.50%, 6/28/00.................................................. 1,003,763
------------
2,203,763
------------
LOUISIANA--4.7%
1,270,000 Calcasieu Parish Sales Tax District 4A, 3.90%, 9/1/00 (a)...................................... 1,270,000
500,000 Lake Charles Harbor & Terminal for Citgo Pere Corp., 3.90%, 8/1/07 (a)......................... 500,000
------------
1,770,000
------------
MARYLAND--3.5%
1,300,000 Baltimore IDA for Cap. Acquisitions, 3.90%, 8/1/16 (a)......................................... 1,300,000
------------
MASSACHUSETTS--1.3%
500,000 Triton Regional School District BAN, 3.50%, 4/12/00............................................ 500,615
------------
MICHIGAN--4.1%
100,000 Delta EDC for Mead-Escanaba Paper, Series E, 3.75%, 12/1/23 (a)................................ 100,000
935,000 Garden City HFA for Garden City Hospital, 3.90%, 9/1/26 (a).................................... 935,000
500,000 Jackson EDC for Thrifty Leoni Inc. Project, 3.975%, 12/1/14 (a)................................ 500,000
------------
1,535,000
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
RESERVE INSTITUTIONAL TRUST--INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1999 (UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--98.6% (NOTE 1)
- ------------ ----------------------------- ------------
<S> <S> <C>
MISSOURI--0.9%
$ 355,000 Platte IDA for Platte Care, 4.25%, 10/1/10 (a)................................................. $ 355,000
------------
NEBRASKA--1.0%
390,000 Buffalo IDR for Agrex Inc Project, 4.20%, 2/1/15 (a)........................................... 390,000
------------
NEW YORK--9.6%
1,000,000 New York City GOB, Series E5, 3.70%, 8/1/10 (a)................................................ 1,000,000
700,000 New York City GOB, Series E5, 3.70%, 8/1/17 (a)................................................ 700,000
900,000 New York City GOB, Series B7, 3.80%, 8/15/18 (a)............................................... 900,000
1,000,000 New York City GOB, Series A4, 3.75%, 8/1/22 (a)................................................ 1,000,000
------------
3,600,000
------------
NORTH CAROLINA--2.7%
1,000,000 Lenoir Indl Fac & Pollution Control for Texas Gulf, 3.975%, 12/1/03 (a)........................ 1,000,000
------------
OHIO--1.3%
500,000 Sharonville IDA for Edgecomb Metals Inc., 3.90%, 11/1/09 (a)................................... 500,000
------------
OKLAHOMA--1.3%
500,000 Oklahoma IDA for Christian College, 4.10%, 7/1/15 (a).......................................... 500,000
------------
PENNSYLVANIA--17.3%
1,200,000 Allegheny HDA for Allegheny General Hospital, Series B, 4.85%, 9/1/20 (a)...................... 1,200,000
900,000 Allegheny HAD for Children's Hospital Pittsburgh, Series B, 4.00%, 12/1/15 (a)................. 900,000
1,000,000 Allegheny IDA for Longwood at Oakmont, 3.70%, 7/1/27 (a)....................................... 1,000,000
500,000 Allegheny Series C, GOB, 6.10%, 9/1/00 (b)..................................................... 508,202
475,000 Clarion County IDA Bonds for Meritcare Project, Series A,4.00%, 12/1/12 (a).................... 475,000
700,000 Emmaus GOB Local Government Revenue Bonds, 3.90%, 12/1/28 (a).................................. 700,000
1,000,000 Lehigh IDA for Allentown Airport, 3.95%, 12/1/05 (a)........................................... 1,000,000
700,000 York General Authority Pooled Financing, 3.90%, 9/1/26 (a)..................................... 700,000
------------
6,483,202
------------
SOUTH DAKOTA--2.5%
925,000 South Dakota HEFA for Rapid City Regional Hospital, 5.00%, 9/1/00 (b).......................... 932,402
------------
TENNESSEE--1.2%
455,000 Chattanooga IDA for Baylor School Project, 3.95%, 11/1/16 (a).................................. 455,000
------------
TEXAS--7.2%
1,200,000 Harris County HFDC for Greater Houston Project, 3.90%, 11/1/25 (a)............................. 1,200,000
700,000 Harris County HFDC for TIRR Project, 4.00%, 10/1/17 (a)........................................ 700,000
300,000 Midlothian IDC for Box-Crow Cement Co. Project, 3.85%, 12/1/09 (a)............................. 300,000
500,000 Texas Series A TRAN, 4.50%, 8/31/00............................................................ 502,893
------------
2,702,893
------------
VIRGINIA--2.7%
1,000,000 Norfolk IDA for Childrens Hospital Project, 3.90%, 6/1/20 (a).................................. 1,000,000
------------
WASHINGTON--1.3%
500,000 Port of Seattle IDC for Douglas Management Corp., 4.10%, 12/1/05 (a)........................... 500,000
------------
WISCONSIN--1.3%
500,000 Green Bay IDA for St. Mary's Holdings, Inc., 4.00%, 11/1/00 (a)................................ 500,000
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
RESERVE INSTITUTIONAL TRUST--INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1999 (UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--(CONTINUED) (NOTE 1)
- ------------ ----------------------------------- ------------
<S> <C> <C> <C>
TOTAL INVESTMENTS (COST $37,017,920).......................................... 98.6% $ 37,017,920
OTHER ASSETS, LESS LIABILITIES................................................ 1.4 530,598
------ ------------
NET ASSETS.................................................................... 100.0% $ 37,548,518
------ ------------
------ ------------
<CAPTION>
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE, BASED ON SHARES OF EACH
CLASS OF BENEFICIAL INTEREST $.001 PAR VALUE OUTSTANDING AND EQUIVALENT TO THE NET
ASSETS OF EACH CLASS:
<S> <C> <C>
9,111,882 SHARES CLASS A...................................................... $1.00
28,436,636 SHARES TREASURER'S TRUST........................................... $1.00
</TABLE>
- ---------------
(a) The interest rates, as reported November 30, 1999, are subject to change
periodically. The Securities are payable on demand and are collateralized by
letters of credit, other bank credit agreements or financial guaranty
assurance agencies.
(b) The Securities are collateralized by letters of credit, other bank credit
agreements or financial guaranty assurance agencies
GLOSSARY
Security Type Abbreviations:
BAN -- Bond Anticipation Notes
EDC -- Economic Development Corporation
GOB -- General Obligation Bonds
HDA -- Hospital Development Authority
HEFA -- Health & Education Facilities Authority
HFA -- Health Facilities Authority Revenue Bonds
HFDC -- Housing Finance Development Corporation
COP -- Certificate of Participation
IDA -- Industrial Development Authority Revenue Bonds
IDC -- Industrial Development Corporation Revenue Bonds
IDR -- Industrial Development Agency Revenue Bonds
TAN -- Tax Anticipation Notes
TRAN -- Tax & Revenue Anticipation Notes
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
RESERVE INSTITUTIONAL TRUST
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
U.S. U.S. INTERSTATE
PRIMARY GOVERNMENT TREASURY TAX-EXEMPT
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
FUND FUND FUND FUND
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INTEREST INCOME (Note 1)................................ $ 8,458,918 $ 1,155,362 $ 430,897 $ 584,764
----------- ----------- --------- ---------
EXPENSES (Note 2)
Comprehensive fees.................................... 397,356 57,613 23,032 43,836
12b-1 fees (Class C).................................. 79,729 -- -- --
Shareholder services fees:
Class B........................................... 9,076 8,285 -- --
Class C........................................... 79,729 -- -- --
Treasurer's Trust................................. 229,799 11,032 23,032 31,055
Other operating expenses.............................. 91,919 4,412 9,886 12,422
----------- ----------- --------- ---------
Total Expenses before waivers......................... 887,608 81,342 55,950 87,313
Less: expenses waived................................. -- -- (36,851) --
----------- ----------- --------- ---------
Net Expenses.......................................... 887,608 81,342 19,099 87,313
----------- ----------- --------- ---------
NET INVESTMENT INCOME, representing Net Increase in Net
Assets from Investment Operations..................... $ 7,571,310 $ 1,074,020 $ 411,798 $ 497,451
----------- ----------- --------- ---------
----------- ----------- --------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
RESERVE INSTITUTIONAL TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PRIMARY U.S. GOVERNMENT U.S. TREASURY
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
--------------------------------- ----------------------------- ---------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
1999* 1999 1999* 1999 1999* 1999(A)
--------------- --------------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS FROM
INVESTMENT OPERATIONS:
Net investment income... $ 7,571,310 $ 8,723,962 $ 1,074,020 $ 1,997,803 $ 411,798 $ 301,406
--------------- --------------- ------------- ------------- ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM NET
INVESTMENT INCOME
(Note 1):
Class A................. (1,579,989) (1,858,597) (684,712) -- -- --
Class B................. (227,147) (206,486) (190,857) (1,520,574) -- --
Class C................. (1,452,930) (137,927) -- (215,653) -- --
Treasurer's Trust....... (4,311,244) (6,520,952) (198,451) (261,576) (411,798) (301,406)
--------------- --------------- ------------- ------------- ------------ ------------
Total Dividends to
Shareholders............ (7,571,310) (8,723,962) (1,074,020) (1,997,803) (411,798) (301,406)
--------------- --------------- ------------- ------------- ------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS (at net
asset value of $1.00 per
share):
Net proceeds from sale
of shares............. 1,036,132,449 1,544,713,374 55,018,147 185,966,100 41,449,202 48,349,768
Dividends reinvested.... 7,571,311 8,723,962 1,074,020 1,997,803 411,798 301,406
Cost of shares
redeemed.............. (977,126,261) (1,447,380,639) (69,579,439) (149,132,456) (38,897,037) (32,927,080)
--------------- --------------- ------------- ------------- ------------ ------------
Net increase (decrease)
derived from capital
share transactions and
from investment
operations............ 66,577,499 106,056,697 (13,487,272) 38,831,447 2,963,963 15,724,094
NET ASSETS:
Beginning of period...... 292,545,173 186,488,476 47,900,877 9,069,430 15,724,094 --
--------------- --------------- ------------- ------------- ------------ ------------
End of period............ $ 359,122,672 $ 292,545,173 $ 34,413,605 $ 47,900,877 $18,688,057 $ 15,724,094
--------------- --------------- ------------- ------------- ------------ ------------
--------------- --------------- ------------- ------------- ------------ ------------
<CAPTION>
INTERSTATE
TAX-EXEMPT
INSTITUTIONAL
---------------------------
SIX MONTHS
ENDED YEAR ENDED
NOVEMBER 30, MAY 31,
1999* 1999
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS FROM
INVESTMENT OPERATIONS:
Net investment income... $ 497,451 $ 472,770
------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM NET
INVESTMENT INCOME
(Note 1):
Class A................. (154,154) (52,593)
Class B................. -- (4,840)
Class C................. -- --
Treasurer's Trust....... (343,297) (415,337)
------------ ------------
Total Dividends to
Shareholders............ (497,451) (472,770)
------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS (at net
asset value of $1.00 per
share):
Net proceeds from sale
of shares............. 51,360,025 102,124,017
Dividends reinvested.... 497,451 472,770
Cost of shares
redeemed.............. (49,222,249) (81,714,432)
------------ ------------
Net increase (decrease)
derived from capital
share transactions and
from investment
operations............ 2,635,227 20,882,355
NET ASSETS:
Beginning of period...... 34,913,291 14,030,936
------------ ------------
End of period............ $37,548,518 $ 34,913,291
------------ ------------
------------ ------------
</TABLE>
- ---------------
(a) For the period October 21, 1998 (Commencement of Operations) to May 31,
1999.
* Unaudited
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
<TABLE>
<S> <C>
(1) SIGNIFICANT ACCOUNTING POLICIES:
Reserve Institutional Trust (the "Trust") is registered under the Investment Company Act of 1940 as a
non-diversified, open-end investment company. The policies summarized below are consistently followed in the
preparation of its financial statements in conformity with generally accepted accounting principles.
A. The Trust's authorized shares of beneficial interest are unlimited, and currently are divided into four series
(funds): Primary Institutional, U.S. Government Institutional, U.S. Treasury Institutional and Interstate
Tax-Exempt Institutional Funds (collectively the "Funds"). Additionally, each Fund is divided into five classes of
shares with similar investment objectives, but with different expense ratios.
B. Securities are valued at amortized cost, which approximates market value. The amortized cost method values a
security at cost at the time of purchase, and thereafter assumes a constant amortization to maturity of any
discount or premium, irrespective of intervening changes in interest rates or market values. The maturity of
floating or variable rate instruments in which the Fund may invest will be deemed to be, for floating rate
instruments (1) the notice period required before the Fund is entitled to receive payment of the principal amount
of the instrument; and for variable rate instruments the longer of (1) above or (2) the period remaining until the
instrument's next interest rate adjustment, for purposes of Rule 2a-7 and for computing the portfolio's average
weighted life to maturity.
C. It is the Trust's policy to comply with Subchapter M of the Internal Revenue Code and to distribute all of its
taxable income to its shareholders. Accordingly, no Federal income tax provision is required.
D. Security transactions are recorded on a trade date basis; interest income is accrued daily and security premium
or discount is amortized or accreted daily. Net investment income is distributed to shareholders daily and
automatically reinvested in additional Fund shares.
E. Expenses are allocated based on a Fund's net assets and/or number of shareholder accounts. Those expenses
recognized as directly attributable to a specific Fund are charged to that Fund directly.
F. The Trusts may enter into repurchase agreements with financial institutions and securities dealers who are
deemed credit-worthy pursuant to guidelines established by the Funds' Board of Trustees. The Funds' Investment
Adviser will follow procedures intended to provide that all repurchase agreements are at least 100% collateralized
as to principal and interest. The Trust's custodian holds the underlying securities subject to repurchase
agreements.
(2) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
Pursuant to an Investment Management Agreement (the "Agreement") between Reserve Management Company, Inc. ("RMCI")
and the Funds, RMCI serves as the Funds' Investment Adviser subject to the policies adopted by the Board of
Trustees. Under the Agreement, RMCI will furnish continuous investment advisory and management services to the
Funds.
RMCI receives a fee of 0.25% per year of the average daily net assets of each Fund. RMCI pays all employee and
customary operating expenses of the Fund. Excluded from the definition of customary operating expenses are
interest, taxes, brokerage fees, extraordinary legal and accounting fees and expenses, and the fees of the
disinterested Trustees, for which each Fund pays its direct or allocated share. Each Fund's operating expenses are
limited to an annual rate of .25% for Class A, .45% for Class B and .60% for Treasurer's Trust of each Class'
average daily net assets. During the six months ended November 30, 1999, RMCI voluntarily waived $36,851 of U.S.
Treasury Institutional Fund's total expenses.
DISTRIBUTION ASSISTANCE AND SHAREHOLDER SERVICES:
Pursuant to a Plan of Distribution, each Fund makes payments to firms for distribution assistance and
administrative services provided to shareholders of Class C and D at an annual rate of .25% and .50%, respectively.
To date, no payments have been made by Class D since it has yet to begin operations. In addition, under the Plan,
shareholders of Class B, C, D and Treasurer's Trust may make payments to firms (including RMCI) providing
shareholder services, including maintaining shareholder accounts, responding to shareholder inquiries and providing
certain other services, at an annual rate of .20%, .25%, .25% and .25%, respectively.
(3) MANAGEMENT'S 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 amounts of assets and liabilities at the
dates of the financial statements and the reported amounts of income and expenses during the reporting periods.
Actual results could differ from those estimates.
</TABLE>
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
(4) COMPOSITION OF NET ASSETS:
At November 30, 1999, the composition of each Fund's net
assets was as follows:
<TABLE>
<CAPTION>
INTERSTATE
PRIMARY U.S. GOVERNMENT U.S. TREASURY TAX-EXEMPT
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
FUND FUND FUND FUND
------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Par Value............................................. $ 359,123 $ 34,413 $ 18,688 $ 37,549
Paid-in-Capital....................................... 358,763,549 34,379,192 18,669,369 37,510,969
------------- ------------- ----------- -----------
Net Assets............................................ $ 359,122,672 $ 34,413,605 $18,688,057 $37,548,518
------------- ------------- ----------- -----------
------------- ------------- ----------- -----------
</TABLE>
(5) CAPITAL SHARE TRANSACTIONS:
For the six months ended November 30, 1999 and the year ended May 31,
1999, the capital share transactions of each Fund was as follows:
SIX MONTHS ENDED NOVEMBER 30, 1999:
PRIMARY INSTITUTIONAL
<TABLE>
<CAPTION>
TREASURER'S
CLASS A CLASS B TRUST CLASS C
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Sold............................................... 267,949,423 21,959,308 629,301,443 116,922,276
Reinvested......................................... 1,579,988 227,147 4,311,244 1,452,930
Redeemed........................................... (296,930,622) (9,867,780) (544,272,694) (126,055,164)
-------------- ------------- ------------- -------------
Net Increase (Decrease)............................ (27,401,211) 12,318,675 89,339,993 (7,679,958)
-------------- ------------- ------------- -------------
-------------- ------------- ------------- -------------
</TABLE>
U.S. GOVERNMENT INSTITUTIONAL
<TABLE>
<CAPTION>
TREASURER'S
CLASS A CLASS B TRUST
------------ ------------ ------------
<S> <C> <C> <C> <C>
Sold................................................................... 14,919,708 25,032,101 15,066,338
Reinvested............................................................. 684,712 190,857 198,451
Redeemed............................................................... (35,026,362) (23,830,668) (10,722,409)
------------ ------------ ------------
Net Increase (Decrease)................................................ (19,421,942) 1,392,290 4,542,380
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
U.S. TREASURY INSTITUTIONAL
<TABLE>
<CAPTION>
TREASURER'S
TRUST
-----------
<S> <C> <C>
Sold................................................................................................. 41,449,202
Reinvested........................................................................................... 411,798
Redeemed............................................................................................. (38,897,037)
-----------
Net Increase......................................................................................... 2,963,963
-----------
-----------
</TABLE>
INTERSTATE TAX-EXEMPT INSTITUTIONAL
<TABLE>
<CAPTION>
TREASURER'S
CLASS A TRUST
------------ ------------
<S> <C> <C> <C>
Sold.................................................................................. 2,801,447 48,558,578
Reinvested............................................................................ 154,154 343,297
Redeemed.............................................................................. (5,029,631) (44,192,618)
------------ ------------
Net Increase (Decrease)............................................................... (2,074,030) 4,709,257
------------ ------------
------------ ------------
</TABLE>
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
YEAR ENDED MAY 31, 1999:
PRIMARY INSTITUTIONAL
<TABLE>
<CAPTION>
TREASURER'S
CLASS A CLASS B TRUST CLASS C
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Sold................................................... 591,162,085 10,331,062 876,047,357 67,172,870
Reinvested............................................. 1,858,597 206,486 6,520,952 137,928
Redeemed............................................... (521,631,338) (16,690,430) (900,188,675) (8,870,196)
------------ ------------ ------------- ------------
Net Increase (Decrease)................................ 71,389,344 (6,152,882) (17,620,366) 58,440,602
------------ ------------ ------------- ------------
------------ ------------ ------------- ------------
</TABLE>
U.S. GOVERNMENT INSTITUTIONAL
<TABLE>
<CAPTION>
TREASURER'S
CLASS A CLASS B TRUST
------------ ------------ ------------
<S> <C> <C> <C> <C>
Sold................................................................... 122,168,766 32,646,145 31,151,190
Reinvested............................................................. 1,520,574 215,653 261,577
Redeemed............................................................... (87,162,348) (32,230,911) (29,739,198)
------------ ------------ ------------
Net Increase........................................................... 36,526,992 630,887 1,673,569
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
U.S. TREASURY INSTITUTIONAL
<TABLE>
<CAPTION>
TREASURER'S
TRUST
-----------
<S> <C> <C>
Sold................................................................................................. 48,349,768
Reinvested........................................................................................... 301,406
Redeemed............................................................................................. (32,927,080)
-----------
Net Increase......................................................................................... 15,724,094
-----------
-----------
</TABLE>
INTERSTATE TAX-EXEMPT INSTITUTIONAL
<TABLE>
<CAPTION>
TREASURER'S
CLASS A CLASS B TRUST
------------ --------- -------------
<S> <C> <C> <C> <C>
Sold..................................................................... 13,573,613 572,192 87,978,212
Reinvested............................................................... 52,593 4,840 415,337
Redeemed................................................................. (2,440,294) (577,032) (78,697,106)
------------ --------- -------------
Net Increase............................................................. 11,185,912 0 9,696,443
------------ --------- -------------
------------ --------- -------------
</TABLE>
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
<TABLE>
<S> <C>
(6) FINANCIAL HIGHLIGHTS:
Contained below is per share operating performance data for a share of beneficial interest outstanding for the periods as
indicated.
PRIMARY INSTITUTIONAL FUND
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B
---------------------------------- --------------------------------------------
SIX MONTHS FISCAL YEAR SIX MONTHS FISCAL YEAR
ENDED ENDED MAY 31, ENDED ENDED MAY 31,
NOVEMBER 30, ----------------- NOVEMBER 30, ---------------------------
1999* 1999 1998(A) 1999* 1999 1998 1997(B)
------------ ------- ------- ------------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period..... $ 1.0000 $1.0000 $1.0000 $ 1.0000 $1.0000 $1.0000 $1.0000
Net investment income
from investment
operations.............. .0256 .0509 .0332 .0246 .0488 .0529 .0179
Less dividends from net
investment income....... (.0256) (.0509) (.0332) (.0246) (.0488) (.0529) (.0179)
-------- ------- ------- -------- ------- ------- -------
Net asset value at end of
period.................. $ 1.0000 $1.0000 $1.0000 $ 1.0000 $1.0000 $1.0000 $1.0000
-------- ------- ------- -------- ------- ------- -------
-------- ------- ------- -------- ------- ------- -------
Total Return............. 5.12%(d) 5.09% 5.49%(d) 4.92%(d) 4.88% 5.29% 4.95%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets end of period
(millions).............. $ 48.4 $ 75.8 $ 4.4 $ 16.5 $ 4.2 $ 10.4 $ 2.0
Ratio of expenses to
average net assets...... .25%(d) .25% .25%(d) .45%(d) .45% .45% .50%(d)(e)
Ratio of net investment
income to average net
assets.................. 5.05%(d) 4.79% 5.35%(d) 4.85%(d) 4.79% 5.16% 4.81%(d)(e)
<CAPTION>
TREASURER'S TRUST CLASS C
---------------------------------- ------------------------
SIX MONTHS FISCAL YEAR SIX MONTHS PERIOD
ENDED ENDED MAY 31, ENDED ENDED
NOVEMBER 30, ----------------- NOVEMBER 30, MAY 31,
1999* 1999 1998(C) 1999* 1999(F)
------------ ------- ------- ------------ -------
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of period..... $ 1.0000 $1.0000 $1.0000 $ 1.0000 $1.0000
Net investment income
from investment
operations.............. .0239 .0470 .0322 .0231 .0036
Less dividends from net
investment income....... (.0239) (.0470) (.0322) (.0231) (.0036)
-------- ------- ------- -------- -------
Net asset value at end of
period.................. $ 1.0000 $1.0000 $1.0000 $ 1.0000 $1.0000
-------- ------- ------- -------- -------
-------- ------- ------- -------- -------
Total Return............. 4.77%(d) 4.70% 5.13%(d) 4.61%(d) 4.11%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets end of period
(millions).............. $ 243.4 $ 154.1 $ 171.7 $ 50.8 $ 58.4
Ratio of expenses to
average net assets...... .60%(d) .60% .60%(d) .75%(d) .75%(d)
Ratio of net investment
income to average net
assets.................. 4.70%(d) 4.59% 5.00%(d) 4.55%(d) 4.12%(d)
</TABLE>
(a) From October 23, 1997 (Commencement of Operations) to May 31, 1998.
(b) From January 21, 1997 (Commencement of Operations) to May 31, 1997.
(c) From October 15, 1997 (Commencement of Operations) to May 31, 1998.
(d) Annualized.
(e) Due to the voluntary waiver of certain expenses by RMCI, the net
expense ratio and net investment income amounted to .48% and
4.83%, respectively, for the period ended May 31, 1997.
(f) From April 30, 1999 (Commencement of Operations) to May 31, 1999.
* Unaudited.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
<TABLE>
<S> <C>
FINANCIAL HIGHLIGHTS (CONTINUED)
U.S. GOVERNMENT INSTITUTIONAL FUND
</TABLE>
<TABLE>
<CAPTION>
CLASS B
CLASS A ---------------------------------------
------------------------- FISCAL
SIX MONTHS PERIOD SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, MAY 31,
1999* 1999(A) 1999* 1999 1998(B)
------------ ------- ------------ ----------- -------
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of period.... $ 1.0000 $1.0000 $ 1.0000 $1.0000 $1.0000
-------- ------- -------- ------- -------
Net investment income
from investment
operations............. .0244 .0228 .0234 .0471 .0364
Less dividends from net
investment income...... (.0244) (.0228) (.0234) (.0471) (.0364)
-------- ------- -------- ------- -------
Net asset value at end of
period................. $ 1.0000 $1.0000 $ 1.0000 $1.0000 $1.0000
-------- ------- -------- ------- -------
-------- ------- -------- ------- -------
Total Return............. 4.87% 4.60% 4.67% 4.71% 5.13%
RATIOS/SUPPLEMENTAL DATA
Net assets end of period
(millions)............. $ 17.1 $ 36.5 $ 7.8 $ 6.4 $ 5.8
Ratio of expenses to
average net assets..... .25%(d) .25%(d) .45%(d) .45% .45%(d)
Ratio of net investment
income to average net
assets................. 4.80%(d) 4.55%(d) 4.60%(d) 4.70% 5.00%(d)
<CAPTION>
TREASURER'S TRUST
-----------------------------------------
FISCAL
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31,
1999* 1999 1998(C)
--------------- ----------- -------
<S> <C> <C> <C>
Net asset value at
beginning of period.... $ 1.0000 $1.0000 $1.0000
--------------- ------- -------
Net investment income
from investment
operations............. .0226 .0455 .0036
Less dividends from net
investment income...... (.0226) (.0455) (.0036)
--------------- ------- -------
Net asset value at end of
period................. $ 1.0000 $1.0000 $1.0000
--------------- ------- -------
--------------- ------- -------
Total Return............. 4.51%(d) 4.55% 4.85%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets end of period
(millions)............. $ 9.5 $ 4.9 $ 3.3
Ratio of expenses to
average net assets..... .60%(d) .60% .60%(d)
Ratio of net investment
income to average net
assets................. 4.45%(d) 4.42% 4.73%(d)
</TABLE>
---------------
(a) From December 2, 1998 (Commencement of Operations) to May 31, 1999.
(b) From September 15, 1997 (Commencement of Operations) to May 31, 1998.
(c) From May 5, 1998 (Commencement of Operations) to May 31, 1998.
(d) Annualized.
* Unaudited.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
FINANCIAL HIGHLIGHTS (CONTINUED)
U.S. TREASURY INSTITUTIONAL FUND--TREASURER'S TRUST
<TABLE>
<CAPTION>
SIX MONTHS ENDED FISCAL YEAR
NOVEMBER 30, ENDED MAY 31,
1999* 1999(A)
---------------- -------------
<S> <C> <C> <C>
Net asset value at beginning of period.................................... $ 1.0000 $1.0000
-------- -------
Net investment income from investment operations.......................... .0226 .0245
Less dividends from net investment income................................. (.0226) (.0245)
-------- -------
Net asset value at end of period.......................................... $ 1.0000 $1.0000
-------- -------
-------- -------
Total Return.............................................................. 4.51%(b) 4.03%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (millions)....................................... $ 18.7 $ 15.7
Ratio of expenses to average net assets................................... .60%(b) .60%(b,c)
Ratio of net investment income to average net assets...................... 4.46%(b) 3.66%(b,c)
</TABLE>
---------------
(a) From October 21, 1998 (Commencement of Operations) to May 31,
1999.
(b) Annualized.
(c) During the period ended May 31, 1999, RMCI voluntarily waived
a portion of its fee. Due to the voluntary waiver of certain
expenses by RMCI, the net expense ratio and net investment
income amounted to .24% and 4.02%, respectively.
* Unaudited.
INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
<TABLE>
<CAPTION>
TREASURER'S TRUST
CLASS A CLASS B ----------------------------------
----------------------- ------- FISCAL
SIX MONTHS PERIOD PERIOD SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, NOVEMBER 30, MAY 31, MAY 31,
1999* 1999(A) 1999(D) 1999* 1999(D) 1998(B)
------------ ------- ------- ------------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period.... $ 1.0000 $1.0000 $1.0000 $ 1.0000 $1.0000 $1.0000
-------- ------- ------- -------- ------- -------
Net investment income
from investment
operations............. .0158 .0175 .0101 .0140 .0284 .0018
Less dividends from net
investment income...... (.0158) (.0175) (.0101) (.0140) (.0284) (.0018)
-------- ------- ------- -------- ------- -------
Net asset value at end of
period................. $ 1.0000 $1.0000 $1.0000 $ 1.0000 $1.0000 $1.0000
-------- ------- ------- -------- ------- -------
-------- ------- ------- -------- ------- -------
Total Return............. 3.15%(c) 3.06%(c) 3.12%(c) 2.80% 2.84% 3.39%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets end of period
(millions)............. $ 9.1 $ 11.2 -- $ 28.4 $ 23.7 $ 14.0
Ratio of expenses to
average net assets..... .25%(c) .25%(c) .45%(c) .60%(c) .60% .60%(c)
Ratio of net investment
income to average net
assets................. 3.12%(c) 3.13%(c) 3.04%(c) 2.77%(c) 2.79% 3.33%(c)
</TABLE>
---------------
(a) From November 3, 1998 (Commencement of Operations) to May 31,
1999.
(b) From May 13, 1998 (Commencement of Operations) to May 31, 1998.
(c) Annualized.
(d) From August 4, 1998 (Commencement of Operations) to December 31,
1998 (the final redemption of all outstanding shares).
* Unaudited.
14
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