<PAGE>
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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/ANNUAL 07/00
[LOGO]
ANNUAL REPORT
RESERVE INSTITUTIONAL TRUST
PRIMARY INSTITUTIONAL FUND
U.S. GOVERNMENT INSTITUTIONAL FUND
U.S. TREASURY INSTITUTIONAL FUND
INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
MAY 31, 2000
<PAGE>
RESERVE INSTITUTIONAL TRUST--PRIMARY INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 2000
<TABLE>
<CAPTION>
Principal Value
Amount NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--77.0% (Note 1)
--------- ---------------------------------------------- --------
<C> <S> <C>
DOMESTIC--18.1%
$20,000,000 Harris Trust & Savings Bank, 6.59%, 7/3/00.................. $ 20,000,000
20,000,000 Southtrust Bank, NA, 6.58%, 7/10/00......................... 20,000,000
20,000,000 U.S. Bank, NA, 6.27%, 6/5/00................................ 20,000,000
20,000,000 Wilmington Trust Co., 6.59%, 7/11/00........................ 20,000,000
-----------------
80,000,000
-----------------
YANKEE--58.9%
20,000,000 Banque Nationale de Paris, 6.31%, 6/6/00.................... 20,000,000
20,000,000 Bayerische Hypo-und Vereinbank, AG, 6.15%, 6/19/00.......... 20,000,000
30,000,000 Canadian Imperial Bank of Commerce, 6.70%, 2/12/01.......... 29,990,017
25,000,000 Commerzbank, AG, 6.15%, 6/15/00............................. 25,000,000
15,000,000 Den Danske Bank, 6.46%, 6/14/00............................. 15,000,000
25,000,000 Deutsche Bank, AG, 6.75%, 8/23/00........................... 25,000,000
25,000,000 Dexia Bank, 6.75%, 8/24/00.................................. 25,000,000
35,000,000 National Westminster Bank, PLC, 6.30%--6.55%,
6/5/00--11/22/00............................................ 34,995,094
25,000,000 Rabobank Nederland NV, 6.52%, 1/24/01....................... 24,993,828
20,000,000 Societe Generale, 6.25%, 7/17/00............................ 20,000,000
20,000,000 Toronto Dominion Bank, 6.14%, 6/15/00....................... 20,000,000
-----------------
259,978,939
-----------------
Total Negotiable Bank Certificates of Deposit (Cost
$339,978,939)............................................... 339,978,939
-----------------
EURO TIME DEPOSITS--9.1%
20,000,000 Chase Manhattan Bank, 6.81%, 6/1/00......................... 20,000,000
20,000,000 Bank One, NA, 6.81%, 6/1/00................................. 20,000,000
-----------------
Total Euro Time Deposits (Cost $40,000,000)................. 40,000,000
-----------------
REPURCHASE AGREEMENTS--17.9%
Bear, Stearns & Co. Inc., 6.55%, 6/1/00, (collateralized by
FNMA 0% due 12/20/27 valued at $4,983,308, FGRA 0% due
2/15/24 to 5/15/29 valued at $60,275,057, GNMA 6.6875% to
7.50% due 9/16/27 to 4/15/30 valued at $16,657,243)......... 79,000,000
79,000,000
-----------------
Total Repurchase Agreements (Cost $79,000,000).............. 79,000,000
-----------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments (Cost $458,978,939)....................... 104.0% 458,978,939
Liabilities, Less Other Assets.............................. (4.0) (17,758,103)
-------- ------------
Net Assets.................................................. 100.0% $441,220,836
======== ============
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:
305,591,348 shares Class A................................................ $1.00
============
9,212,885 shares Class B.................................................. $1.00
============
62,390,175 shares Treasurer's Trust....................................... $1.00
============
64,026,428 shares Class C................................................. $1.00
============
</TABLE>
See notes to financial statements.
2
<PAGE>
RESERVE INSTITUTIONAL TRUST--U.S. GOVERNMENT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 2000
<TABLE>
<CAPTION>
Principal Value
Amount REPURCHASE AGREEMENTS--96.0% (Note 1)
--------- ---------------------------- --------
<C> <S> <C>
Bear, Stearns & Co., Inc., 6.53%, 6/1/00 (collateralized by
GNMA, 5.50% to 8.50%, due from 12/15/07 to 2/15/30 valued at
$14,142,317, U.S. Treasury Bonds, 7.125% due 2/15/23 valued
at $627,603)................................................ $ 14,000,000
$14,000,000
Prudential Securities, Inc., 6.38%, 6/1/00 (collateralized
by GNMA, 6.375% to 7.125%, due 4/24/20 to 11/27/20 valued at
$12,360,000)................................................ 12,000,000
12,000,000
----------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments (Cost $26,000,000)........................ 96.0% 26,000,000
Other Assets, Less Liabilities.............................. 4.0 1,067,840
-------- -----------
Net Assets.................................................. 100.0% $27,067,840
======== ===========
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:
11,517,211 shares Class A................................................. $1.00
===========
6,837,280 shares Class B.................................................. $1.00
===========
8,713,349 shares Treasurer's Trust........................................ $1.00
===========
</TABLE>
See notes to financial statements.
3
<PAGE>
RESERVE INSTITUTIONAL TRUST--U.S. TREASURY INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 2000
<TABLE>
<CAPTION>
Principal Value
Amount U.S. TREASURY BILLS--99.2% (Note 1)
--------- -------------------------- --------
<C> <S> <C>
5.39% 6/1/00................................................ $ 1,000,000
$1,000,000
5.67%, 6/8/00............................................... 998,898
1,000,000
5.48%, 6/15/00.............................................. 997,869
1,000,000
5.40%--5.50%, 6/22/00....................................... 996,822
1,000,000
5.56%, 6/29/00.............................................. 995,676
1,000,000
5.60%--5.63%, 7/6/00........................................ 1,491,809
1,500,000
5.25%--5.56%, 7/13/00....................................... 1,987,387
2,000,000
5.54%, 7/20/00.............................................. 1,488,689
1,500,000
5.71%, 8/17/00.............................................. 1,975,574
2,000,000
5.83%, 8/24/00.............................................. 1,972,817
2,000,000
5.84%, 9/7/00............................................... 1,476,174
1,500,000
5.83%, 9/14/00.............................................. 1,474,494
1,500,000
6.03%--6.12%, 11/2/00....................................... 974,013
1,000,000
6.09%--6.11%, 11/9/00....................................... 1,945,461
2,000,000
----------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments (Cost $19,775,683)........................ 99.2% 19,775,683
Other Assets, Less Liabilities.............................. 0.8 158,740
-------- -----------
Net Assets.................................................. 100.0% $19,934,423
======== ===========
Net asset value, offering and redemption price per share based on
19,934,423 shares of beneficial interest,
$.001 par value outstanding............................................... $1.00
===========
</TABLE>
See notes to financial statements.
4
<PAGE>
RESERVE INSTITUTIONAL TRUST--INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 2000
<TABLE>
<CAPTION>
Principal Value
Amount TAX-EXEMPT OBLIGATIONS--103.6% (Note 1)
--------- ------------------------------ --------
<C> <S> <C>
ARIZONA--8.2%
$2,100,000 Apache County IDA for Tucson Electric Power Company, 4.10%,
12/1/20 (a)................................................. $ 2,100,000
1,100,000 Arizona HFAR, 3.95%, 10/1/15 (a)............................ 1,100,000
1,000,000 Maricopa County School District 97, 6.80%, 7/1/00 (b)....... 1,002,194
600,000 Pima County GO, 4.75%, 7/1/00 (b)........................... 600,453
500,000 Pima County IDA PCR for Tucson Electric Project, 4.10%,
10/1/22 (a)................................................. 500,000
----------------
5,302,647
----------------
COLORADO--2.3%
500,000 Arapahoe School District #5 for Cherry Creek, TAN, 4.25%,
6/30/00..................................................... 500,205
1,000,000 Denver Airport, Series B, 4.30%, 12/1/20 (a)................ 1,000,000
----------------
1,500,205
----------------
FLORIDA--9.1%
3,000,000 Florida Local Gov't Financial Auth. for Lake Wales Medical
Centers, Series A, 4.50%, 6/27/00........................... 3,000,000
1,710,000 Orange County IDA for Lake Highland Prep School, 4.40%,
10/1/18 (a)................................................. 1,710,000
1,200,000 Port St. Lucie County PCR for Florida Power & Light Project,
4.30%, 1/1/26 (a) .......................................... 1,200,000
----------------
5,910,000
----------------
GEORGIA--6.7%
1,485,000 Clayton County Housing MFH for Huntington Woods, 4.30%,
1/1/21 (a).................................................. 1,485,000
2,300,000 Fulton County DAR for Alfred & Adele Davis, 4.35%, 12/1/19
(a)......................................................... 2,300,000
557,866 Georgia Municipal Association COP Pool Bd., 4.35%, 12/15/20
(a)......................................................... 557,866
----------------
4,342,866
----------------
HAWAII--1.6%
1,000,000 Honolulu City & County, Series C, 7.15%, 6/1/10 (b)......... 1,010,000
----------------
ILLINOIS--14.8%
1,600,000 Illinois DFA for Chicago Shakespeare Project, 4.33%, 1/1/19
(a)......................................................... 1,600,000
3,000,000 Illinois EFA for Lake Forest Open Lands, 4.25%, 8/1/33
(a)......................................................... 3,000,000
1,000,000 Illinois HFAR for Carle Foundation, Series B. 4.15%, 7/1/28
(a)......................................................... 1,000,000
2,875,000 Illinois HFAR for Community Hospital Center--C, 4.40%,
10/1/15 (a)................................................. 2,875,000
300,000 Illinois HFAR for Swedish Covenant Hospital, 3.90%, 8/15/27
(a)......................................................... 300,000
500,000 Illinois HFAR, Series F, 4.15%, 8/1/15 (a).................. 500,000
300,000 McCook for St. Andrew Society, Class B, 4.45%, 12/1/21
(a)......................................................... 300,000
----------------
9,575,000
----------------
INDIANA--3.2%
2,045,000 Indiana HFAR for Community Mental Health & Rehab, 4.30%,
11/1/20 (a)................................................. 2,045,000
----------------
KENTUCKY--6.2%
3,000,000 Kentucky Asset/Liability, 4.15%, 7/12/00 (b)................ 3,000,000
1,000,000 Kentucky Asset/Liability TRAN, 4.50%, 6/28/00............... 1,000,484
----------------
4,000,484
----------------
</TABLE>
See notes to financial statements.
5
<PAGE>
RESERVE INSTITUTIONAL TRUST--INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 2000 (Continued)
<TABLE>
<CAPTION>
Principal Value
Amount TAX-EXEMPT OBLIGATIONS (Continued) (Note 1)
--------- ---------------------------------- --------
<C> <S> <C>
LOUISIANA--3.1%
$2,000,000 Calcasieu Parish Sales Tax District, 4.45%, 9/1/02 (a)...... $ 2,000,000
----------------
MASSACHUSETTS--2.4%
500,000 Massachusetts Bay Transit Authority, Series B, 7.875%,
3/1/21 (b).................................................. 522,845
1,000,000 Massachusetts HEFA, Series B, 8.00%, 7/1/18 (b)............. 1,023,211
----------------
1,546,056
----------------
MICHIGAN--7.8%
500,000 Jackson County EDC for Thrifty Leoni Project, 4.375%,
12/1/14 (a)................................................. 500,000
1,000,000 Michigan Job Development Authority for Wyandotte Cort,
4.10%, 12/1/09 (a).......................................... 1,000,000
2,400,000 Michigan State HFAR for Mary Hospital of Livonia, 4.20%,
7/1/17 (a).................................................. 2,400,000
1,155,000 Wayne State University, 4.50%, 11/15/00 (b)................. 1,156,660
----------------
5,056,660
----------------
MISSISSIPPI--1.5%
1,000,000 Mississippi Development Bank for Natural Gas, 4.50%, 1/1/01
(b)......................................................... 1,000,972
----------------
MISSOURI--0.5%
355,000 Platte IDA for Platte Care, 4.60%, 10/1/10 (a).............. 355,000
----------------
NEVADA--3.4%
2,200,000 Las Vegas Valley Water District, 3.95%, 6/8/00 (b).......... 2,200,000
----------------
NEW JERSEY--1.1%
700,000 Bernards Township BAN, 5.15%, 5/18/01....................... 702,565
----------------
NEW YORK--6.3%
2,500,000 Metropolitan Transportation Authority, 3.95%, 6/8/00 (b).... 2,500,000
1,000,000 New York City GO, Series A7, 4.30%, 8/1/21 (a).............. 1,000,000
600,000 New York City GO, Series E5, 4.30%, 8/1/19 (a).............. 600,000
----------------
4,100,000
----------------
OHIO--0.8%
500,000 Sharonville IDA for Edgecomb Metals Inc., 4.25%, 11/1/09
(a)......................................................... 500,000
----------------
OKLAHOMA--0.8%
500,000 Oklahoma IDA for Christian College, 4.60%, 7/1/15 (a)....... 500,000
----------------
PENNSYLVANIA--8.7%
500,000 Allegheny County Series C, 6.10%, 9/1/00 (b)................ 502,744
100,000 Allegheny HDA for Children's Hospital Pittsburgh, Series B,
4.40%, 12/1/15 (a) ......................................... 100,000
300,000 Clarion County IDA Bonds for Meritcare Project, Series A,
4.40%, 12/1/12 (a) ......................................... 300,000
500,000 Delaware Valley Regional Finance Authority, Series D, 4.10%,
12/1/20 (a)................................................. 500,000
1,500,000 Lancaster County, 4.38%, 5/1/30 (a)......................... 1,500,000
1,000,000 Pennsylvania GO, 6.60%, 1/1/01 (b).......................... 1,013,424
1,700,000 Schuylkill County IDA for Northeastern Power, 4.35%, 12/1/22
(a)......................................................... 1,700,000
----------------
5,616,168
----------------
</TABLE>
See notes to financial statements.
6
<PAGE>
RESERVE INSTITUTIONAL TRUST--INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 2000 (Continued)
<TABLE>
<CAPTION>
Principal Value
Amount TAX-EXEMPT OBLIGATIONS (Continued) (Note 1)
--------- ---------------------------------- --------
<C> <S> <C>
RHODE ISLAND--3.1%
$2,000,000 East Providence TAN, 4.50%, 7/7/00.......................... $ 2,000,716
----------------
SOUTH DAKOTA--1.4%
925,000 South Dakota HEFA for Rapid City Regional Hospital, 5.00%,
9/1/00 (b).................................................. 927,476
----------------
TENNESSEE--0.6%
405,000 Chattanooga HEFA for Baylor School Project, 4.40%, 11/1/16
(a)......................................................... 405,000
----------------
TEXAS--4.2%
1,200,000 Harris County IDC for Baytank Houston Project, 4.10%, 2/1/20
(a)......................................................... 1,200,000
690,000 Houston Community College, 5.00%, 4/15/01 (b)............... 693,481
300,000 Midlothian IDC for Box-Crow Cement Co. Project, 4.05%,
12/1/09 (a)................................................. 300,000
500,000 Texas Series A TRAN, 4.50%, 8/31/00......................... 500,961
----------------
2,694,442
----------------
VIRGINIA--2.5%
550,000 Newport News MFH for Oxford Project, 4.40%, 11/1/06 (a)..... 550,000
1,100,000 Norfolk IDA for Childrens Hospital Project, 4.40%, 6/1/20
(a)......................................................... 1,100,000
----------------
1,650,000
----------------
WASHINGTON--0.8%
500,000 Port of Seattle IDC for Douglas Management Corp., 4.45%,
12/1/05 (a)................................................. 500,000
----------------
WISCONSIN--2.5%
1,600,000 Green Bay IDA for St. Mary's Holdings, Inc., 4.40%, 11/1/00
(a)......................................................... 1,600,000
----------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments (Cost $67,041,257)........................ 103.6% 67,041,257
Liabilities, Less Other Assets.............................. (3.6) (2,317,524)
-------- -----------
Net Assets.................................................. 100.0% $64,723,733
======== ===========
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:
48,375,123 shares Class A................................................. $1.00
===========
16,348,610 shares Treasurer's Trust....................................... $1.00
===========
</TABLE>
-----------------
<TABLE>
<S> <C>
(a) The interest rates, as reported May 31, 2000, 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) Securities are collateralized by bank letters of credit or
other agreements.
</TABLE>
See notes to financial statements.
7
<PAGE>
RESERVE INSTITUTIONAL TRUST--INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 2000 (Continued)
GLOSSARY
<TABLE>
<CAPTION>
<S> <C> <C>
Security Type Abbreviations:
BAN -- Bond Anticipation Notes
COP -- Certificate of Participation
DAR -- Development Authority Revenue Bonds
DFA -- Development Finance Authority Revenue Bonds
EDC -- Economic Development Corporation
EFA -- Educational Facilities Authority Revenue Bonds
FGRA -- Federal National Mortgage Association ("FNMA")
Adjustable Rate Gold REMIC
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
GO -- General Obligation Bonds
HDA -- Hospital Development Authority
HEFA -- Health & Education Facilities Authority
HFAR -- Health Finance Authority Revenue Bonds
IDA -- Industrial Development Authority Revenue Bonds
IDC -- Industrial Development Corporation Revenue Bonds
MFH -- Multi-family Housing Revenue Bonds
PCR -- Pollution Control Revenue
TAN -- Tax Anticipation Notes
TRAN -- Tax & Revenue Anticipation Notes
</TABLE>
See notes to financial statements.
8
<PAGE>
RESERVE INSTITUTIONAL TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MAY 31, 2000
<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)............................................. $24,679,782 $2,135,414 $980,313 $1,759,175
----------- ---------- -------- ----------
Expenses (Note 2)
Comprehensive fees................................................. 1,073,925 99,516 48,037 117,444
12b-1 fees (Class C)............................................... 152,058 -- -- --
Shareholder services fees:
Class B.......................................................... 22,568 16,978 -- --
Treasurer's Trust................................................ 671,456 29,744 67,267 101,840
Class C.......................................................... 152,058 -- -- --
Other operating expenses........................................... 674 674 674 674
----------- ---------- -------- ----------
Total Expenses before waivers.................................... 2,072,739 146,912 115,978 219,958
Less: expenses waived............................................ -- -- (76,870) (20,653)
----------- ---------- -------- ----------
Net Expenses..................................................... 2,072,739 146,912 39,108 199,305
----------- ---------- -------- ----------
Net Investment Income, representing Net Increase in Net Assets from
Investment Operations.............................................. $22,607,043 $1,988,502 $941,205 $1,559,870
=========== ========== ======== ==========
</TABLE>
See notes to financial statements.
9
<PAGE>
RESERVE INSTITUTIONAL TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. U.S.
PRIMARY GOVERNMENT TREASURY
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
FUND FUND FUND
--------------------------------- ----------------------------- ---------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
May 31, May 31, May 31, May 31, May 31, May 31,
2000 1999 2000 1999 2000 1999 (a)
--------------- --------------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
From Investment Operations:
Net investment income....... $ 22,607,043 $ 8,723,962 $ 1,988,502 $ 1,997,803 $ 941,205 $ 301,406
--------------- --------------- ------------- ------------- ------------ ------------
Distributions to Shareholders
From Net Investment Income
(Note 1):
Class A..................... (9,444,752) (1,858,597) (1,162,123) (1,520,574) -- --
Class B..................... (599,849) (206,486) (418,749) (215,653) -- --
Treasurer's Trust........... (9,577,370) (6,520,952) (407,630) (261,576) (941,205) (301,406)
Class C..................... (2,985,072) (137,927) -- -- -- --
--------------- --------------- ------------- ------------- ------------ ------------
Total Dividends to
Shareholders.............. (22,607,043) (8,723,962) (1,988,502) (1,997,803) (941,205) (301,406)
--------------- --------------- ------------- ------------- ------------ ------------
From Capital Share Transactions
(at net asset value of $1.00 per
share):
Net proceeds from sale of
shares.................... 3,866,941,138 1,544,713,374 231,102,585 185,966,100 97,802,140 48,349,768
Dividends reinvested........ 22,607,043 8,723,962 1,988,502 1,997,803 941,205 301,406
Cost of shares redeemed..... (3,740,872,518) (1,447,380,639) (253,924,124) (149,132,456) (94,533,016) (32,927,080)
--------------- --------------- ------------- ------------- ------------ ------------
Net increase (decrease)
derived from capital share
transactions and from
investment operations..... 148,675,663 106,056,697 (20,833,037) 38,831,447 4,210,329 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............... $ 441,220,836 $ 292,545,173 $ 27,067,840 $ 47,900,877 $ 19,934,423 $ 15,724,094
=============== =============== ============= ============= ============ ============
<CAPTION>
INTERSTATE
TAX-EXEMPT
INSTITUTIONAL
FUND
-----------------------------
Year Year
Ended Ended
May 31, May 31,
2000 1999
------------- -------------
<S> <C> <C>
Increase (Decrease) in Net Ass
From Investment Operations:
Net investment income....... $ 1,559,870 $ 472,770
------------- -------------
Distributions to Shareholders
From Net Investment Income
(Note 1):
Class A..................... (663,416) (52,593)
Class B..................... -- (4,840)
Treasurer's Trust........... (896,454) (415,337)
Class C..................... -- --
------------- -------------
Total Dividends to
Shareholders.............. (1,559,870) (472,770)
------------- -------------
From Capital Share Transaction
(at net asset value of $1.00
share):
Net proceeds from sale of
shares.................... 241,743,464 102,124,017
Dividends reinvested........ 1,559,870 472,770
Cost of shares redeemed..... (213,492,892) (81,714,432)
------------- -------------
Net increase (decrease)
derived from capital share
transactions and from
investment operations..... 29,810,442 20,882,355
Net Assets:
Beginning of period......... 34,913,291 14,030,936
------------- -------------
End of period............... $ 64,723,733 $ 34,913,291
============= =============
</TABLE>
-----------------
<TABLE>
<C> <S>
(a) For the period October 21, 1998 (Commencement of Operations)
to May 31, 1999.
</TABLE>
See notes to financial statements.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(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 (Class A, B, Treasurer's
Trust, C and D) 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 Trust 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 comprehensive management 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 total operating expenses are accrued 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, respectively. During the year ended May 31, 2000,
RMCI voluntarily waived $76,870 of U.S. Treasury Institutional Fund's total
expenses and $20,653 of the Treasurer's Trust Class of Interstate
Tax-Exempt 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.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(4) Composition of Net Assets:
--------------------------------------------------------------------------------
At May 31, 2000, the composition of each Fund's net assets was as follows:
<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>
Par Value.............................................. $ 441,221 $ 27,068 $ 19,934 $ 64,724
Paid-in-Capital........................................ 440,779,615 27,040,772 19,914,489 64,659,009
------------ ----------- ----------- -----------
Net Assets............................................. $441,220,836 $27,067,840 $19,934,423 $64,723,733
============ =========== =========== ===========
</TABLE>
(5) Capital Share Transactions:
--------------------------------------------------------------------------------
For the year ended May 31, 2000 and May 31, 1999, the capital share
transactions of each Fund was as follows:
<TABLE>
<CAPTION>
Year Ended May 31, 2000
---------------------------------------------------------------
Treasurer's
Class A Class B Trust Class C
-------------- ----------- -------------- ------------
<S> <C> <C> <C> <C>
PRIMARY INSTITUTIONAL
----------------------------------------------------
Sold................................................ 1,943,164,267 27,677,033 1,566,404,143 329,695,695
Reinvested.......................................... 9,444,752 599,849 9,577,370 2,985,072
Redeemed............................................ (1,722,819,032) (23,287,360) (1,667,671,186) (327,094,940)
-------------- ----------- -------------- ------------
Net Increase (Decrease)............................. 229,789,987 4,989,522 (91,689,673) 5,585,827
============== =========== ============== ============
U.S. GOVERNMENT INSTITUTIONAL
----------------------------------------------------
Sold................................................ 145,538,884 56,600,025 28,963,676 --
Reinvested.......................................... 1,162,123 418,749 407,630 --
Redeemed............................................ (171,710,788) (56,620,461) (25,592,875) --
-------------- ----------- -------------- ------------
Net Increase (Decrease)............................. (25,009,781) 398,313 3,778,431 --
============== =========== ============== ============
U.S. TREASURY INSTITUTIONAL
----------------------------------------------------
Sold................................................ -- -- 97,802,140 --
Reinvested.......................................... -- -- 941,205 --
Redeemed............................................ -- -- (94,533,016) --
-------------- ----------- -------------- ------------
Net Increase........................................ -- -- 4,210,329 --
============== =========== ============== ============
INTERSTATE TAX-EXEMPT INSTITUTIONAL
----------------------------------------------------
Sold................................................ 73,400,688 -- 168,342,776 --
Reinvested.......................................... 663,416 -- 896,454 --
Redeemed............................................ (36,874,893) -- (176,617,999) --
-------------- ----------- -------------- ------------
Net Increase (Decrease)............................. 37,189,211 -- (7,378,769) --
============== =========== ============== ============
</TABLE>
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(5) Capital Share Transactions (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended May 31, 1999
---------------------------------------------------------
Treasurer's
Class A Class B Trust Class C
------------ ----------- ------------ ----------
<S> <C> <C> <C> <C>
PRIMARY INSTITUTIONAL
---------------------------------------------------------
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
============ =========== ============ ==========
U.S. GOVERNMENT INSTITUTIONAL
---------------------------------------------------------
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 --
============ =========== ============ ==========
U.S. TREASURY INSTITUTIONAL
---------------------------------------------------------
Sold..................................................... -- -- 48,349,768 --
Reinvested............................................... -- -- 301,406 --
Redeemed................................................. -- -- (32,927,080) --
------------ ----------- ------------ ----------
Net Increase............................................. -- -- 15,724,094 --
============ =========== ============ ==========
INTERSTATE TAX-EXEMPT INSTITUTIONAL
---------------------------------------------------------
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>
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(6) Financial Highlights:
Contained below is per share operating performance data for a share of
beneficial interest outstanding for the periods as indicated.
<TABLE>
<CAPTION>
Class A Class B
------------------------------ -----------------------------------------
Fiscal Year Fiscal Year
Ended May 31, Ended May 31,
------------------------------ -----------------------------------------
2000 1999 1998(a) 2000 1999 1998 1997(b)
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PRIMARY INSTITUTIONAL FUND
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....... .0572 .0509 .0332 .0549 .0488 .0529 .0179
Less dividends from net
investment income........... (.0572) (.0509) (.0332) (.0549) (.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.................. 5.72% 5.09% 5.49%(d) 5.49% 4.88% 5.29% 4.95%(d)
Ratios/Supplemental Data
Net assets end of period
(millions).................. $ 305.6 $ 75.8 $ 4.4 $ 9.2 $ 4.2 $ 10.4 $ 2.0
Ratio of expenses to average
net assets.................. .25% .25% .25%(d) .48% .45% .45% .50%(d)(e)
Ratio of net investment income
to average net assets....... 5.69% 4.79% 5.35%(d) 5.29% 4.79% 5.16% 4.81%(d)(e)
<CAPTION>
Treasurer's Trust Class C
------------------------------ -------------------
Fiscal Year Fiscal Year
Ended May 31, Ended May 31,
------------------------------ -------------------
2000 1999 1998(c) 2000 1999(f)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PRIMARY INSTITUTIONAL FUND
Net asset value at beginning
of period................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- -------
Net investment income from
investment operations....... .0532 .0470 .0322 .0516 .0036
Less dividends from net
investment income........... (.0532) (.0470) (.0322) (.0516) (.0036)
------- ------- ------- ------- -------
Net asset value at end of
period...................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= =======
Total Return.................. 5.32% 4.70% 5.13%(d) 5.16% 4.11%
Ratios/Supplemental Data
Net assets end of period
(millions).................. $ 62.4 $ 154.1 $ 171.7 $ 64.0 $ 58.4
Ratio of expenses to average
net assets.................. .60% .60% .60%(d) .75% .75%(d)
Ratio of net investment income
to average net assets....... 4.99% 4.59% 5.00%(d) 4.91% 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.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(6) Financial Highlights (Continued)
<TABLE>
<CAPTION>
Class A Class B Treasurer's Trust
---------------------- ------------------------------------ ------------------------------------
Fiscal Year Period Fiscal Year Fiscal Year Period Fiscal Year Fiscal Year Period
Ended Ended Ended Ended Ended Ended Ended Ended
May 31, May 31, May 31, May 31, May 31, May 31, May 31, May 31,
2000 1999(a) 2000 1999 1998(b) 2000 1999 1998(c)
----------- -------- ----------- ----------- -------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. GOVERNMENT
INSTITUTIONAL FUND
Net asset value at
beginning of period...... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- ------- ------- -------
Net investment income from
investment operations.... .0542 .0228 .0520 .0471 .0364 .0503 .0455 .0036
Less dividends from net
investment income........ (.0542) (.0228) (.0520) (.0471) (.0364) (.0503) (.0455) (.0036)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value at end of
period................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= ======= ======= =======
Total Return............... 5.42% 4.60%(d) 5.20% 4.71% 5.13% 5.03% 4.55% 4.85%(d)
Ratios/Supplemental Data
Net assets end of period
(millions)............... $ 11.5 $ 36.5 $ 6.8 $ 6.4 $ 5.8 $ 8.7 $ 4.9 $ 3.3
Ratio of expenses to
average net assets....... .25% .25%(d) .45% .45% .45%(d) .60% .60% .60%(d)
Ratio of net investment
income to average
net assets............... 5.08% 4.55%(d) 4.94% 4.70% 5.00%(d) 4.80% 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.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(6) Financial Highlights (Continued)
<TABLE>
<CAPTION>
Treasurer's Trust
-----------------------------------
Fiscal Year Fiscal Year
Ended Ended
May 31, 2000 May 31, 1999(a)
--------------- ------------------
<S> <C> <C>
U.S. TREASURY INSTITUTIONAL FUND
Net asset value at beginning of
period................................ $1.0000 $1.0000
------- -------
Net investment income from investment
operations............................ .0512 .0245
Less dividends from net investment
income................................ (.0512) (.0245)
------- -------
Net asset value at end of period........ $1.0000 $1.0000
======= =======
Total Return............................ 5.12% 4.03%(b)
Ratios/Supplemental Data
Net assets end of period (millions)..... $ 19.9 $ 15.7
Ratio of expenses to average net
assets................................ .60% .60%(b,c)
Ratio of net investment income to
average net assets.................... 4.50%(c) 3.66%(b,c)
</TABLE>
---------------
(a) From October 21, 1998 (Commencement of Operations) to May 31, 1999.
(b) Annualized.
(c) During the years ended May 31, 1999 and May 31, 2000, RMCI voluntarily
waived a portion of its fees. Due to the voluntary waiver of certain
expenses by RMCI, the net expense ratio and net investment income for the
years ended May 31, 1999 and May 31, 2000, amounted to .24% and .20%,
respectively and 4.02% and 4.90%, respectively.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
(6) Financial Highlights (Continued)
<TABLE>
<CAPTION>
Class A Class B Treasurer's Trust
----------------------- ---------- ------------------------------------
Fiscal Year Period Period Fiscal Year Fiscal Year Period
Ended Ended Ended Ended Ended Ended
May 31, May 31, May 31, May 31, May 31, May 31,
2000 1999(a) 1999(d) 2000 1999 1998(b)
----------- ---------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
Net asset value at
beginning of period.... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- -------
Net investment income
form investment
operations............. .0353 .0175 .0101 .0320 .0284 .0018
Less dividends from net
investment income...... (.0353) (.0175) (.0101) (.0320) (.0284) (.0018)
------- ------- ------- ------- ------- -------
Net asset value at end of
period................. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= =======
Total Return............. 3.53% 3.06%(c) 3.12%(c) 3.20% 2.84% 3.39%(c)
Ratios/Supplemental Data
Net assets end of period
(millions)............. $ 48.4 $ 11.2 -- $ 16.3 $ 23.7 $ 14.0
Ratio of expenses to
average net assets..... .25% .25%(c) .45%(c) .60%(e) .60% .60%(c)
Ratio of net investment
income to average net
assets................. 3.71% 3.13%(c) 3.04%(c) 3.01%(e) 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).
(e) During the year ended May 31, 2000, 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 .53% and 3.08%.
17
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Shareholders and the Board of Trustees of The Reserve Institutional
Trust:
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and financial highlights
present fairly, in all material respects, the financial position of The Reserve
Institutional Trust (comprising, respectively, the Primary Institutional, U.S.
Government Institutional, U.S. Treasury Institutional and Interstate Tax-Exempt
Institutional Funds (the "Funds") at May 31, 2000, and the results of their
operations for the year then ended and the changes in their net assets and the
financial highlights for the periods presented, in conformity with accounting
principles generally accepted in the United States. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at
May 31, 2000 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
July 15, 2000
18
