BT ALEX. BROWN
CASH RESERVE
FUND, INC.
Prime Series
Treasury Series
Tax-Free Series
SEMI-ANNUAL REPORT
September 30, 1997
[Logo] BT ALEX. BROWN
<PAGE>
FUND FEATURES
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o DAILY DIVIDENDS
The Fund declares dividends daily and distributes them monthly in the form of
additional shares or, at your option, credits the dividends in cash to your
account at BT Alex. Brown.
o CHECK REDEMPTION PRIVILEGE
After completing an authorization form, you may redeem your shares by writing
a check (in a minimum amount of $500) on your account. You will continue to
earn dividends until your check reaches the bank for clearance.
o PURCHASES BY MAIL
You may purchase shares by mailing a check and a completed order form to the
Fund at P.O. Box 1346, Baltimore, MD 21203. Order forms may be obtained from
your BT Alex. Brown investment representative.
o NO SALES CHARGE AND IMMEDIATE LIQUIDITY
You may buy or redeem shares in your account at any time. There is no sales
charge or penalty imposed by the Fund for the purchase or redemption of
shares.
o AUTOMATIC PURCHASE AND SALE
You may participate in a program that results in the automatic purchase and
sale of Fund shares in conjunction with security transactions as well as cash
balances accumulated in your BT Alex. Brown accounts.
o CONSTANT NET ASSET VALUE
The Fund will attempt to maintain a constant net asset value of $1.00 per
share and has done so since its inception on August 11, 1981. However, there
can be no assurance that the Fund will be able to maintain a net asset value
of $1.00 per share.
o MINIMUM INVESTMENT
The minimum initial investment is $1,500. Subsequent investments may be made
in an amount of $100 or more. The minimum amounts do not apply if you
participate in the automatic purchase and sale program.
o CURRENT YIELD INFORMATION AVAILABLE
For current yield information, call (410) 895-5995.
<PAGE>
LETTER TO SHAREHOLDERS
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October 29, 1997
We are pleased to report on the progress of your Fund for the six months
ended September 30, 1997. At the end of the period, the Fund's net assets
totaled $4.9 billion, an increase of approximately 14% since the Fund's fiscal
year-end of March 31, 1997. The breakdown among each of the Fund's series is
illustrated in the pie chart below.
ASSET BREAKDOWN BY SERIES
Prime Series $3.4 billion
Treasury Series $701 million
Tax-Free Series $774 million
PERIOD IN REVIEW
The Federal Reserve Board's increase of the closely watched Federal Funds
rate from 5.25% to 5.50% in March was unusual because it was not followed by
further rate increases. Since the increase six months ago, there has been solid
economic growth -- the Dow Jones Industrial Average has returned 15%, the yield
on 10-year Treasury notes has decreased from just under 7% to nearly 6%, and
inflation has declined to approximately 2%. Money market rates also declined
during the six-month period, albeit modestly, with the yield on 3-month Treasury
bills decreasing from 5.3% in March to 5% in September.
International economies are beginning to struggle. European economies are
dealing with the pressures associated with joining the European Monetary Union
(EMU). Southeast Asia, once the fastest growing region in the world, has started
to slow, precipitating stock market and currency declines.
Domestically, the Federal Reserve has been enjoying a seemingly perfect
economy, with both low unemployment and low inflation. However, Federal Reserve
Chairman Alan Greenspan has caused some concern in the markets by questioning
whether this environment can continue. The markets, which apparently had
speculated that the Fed would continue to take no action on interest rates, were
somewhat surprised by Chairman Greenspan's comments and have become more
volatile in recent weeks.
1
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LETTER TO SHAREHOLDERS (CONCLUDED)
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We continue to manage the Fund conservatively, as evidenced by the Standard
& Poor's ratings of each of the Fund's series. Both the Prime and the Tax-Free
Series continue to maintain a "AAAm" rating and the Treasury Series maintains a
"AAAm-G" rating. These ratings are the highest that S&P awards to money market
funds. In addition, each of the Fund's three series has provided a competitive
return, as shown in the chart below.
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PERFORMANCE COMPARISONS
30-DAY YIELD
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As of 9/30/97
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BT ALEX. BROWN CASH RESERVE PRIME SERIES 4.93%
First Tier Rated Money Fund Average 4.97%
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BT ALEX. BROWN CASH RESERVE TREASURY SERIES 4.68%
100% U.S. Treasury Rated Money Fund Average 4.71%
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As of 9/29/97
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BT ALEX. BROWN CASH RESERVE TAX-FREE SERIES 3.11%
Tax-Free Rated Money Fund Average 3.06%
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Source: IBC/Donoghue, Inc. "Rated Money Fund Report," October 1997.
The yields shown represent past performance, which is no guarantee of future
results. An investment in a money market fund is neither insured nor guaranteed
by the U.S. government. The Rated Money Fund Averages are average yields of all
funds rated AAA by Standard & Poor's in their respective categories.
2
<PAGE>
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MARKET OUTLOOK
We expect the economy will continue to grow at a steady pace. The earnings
growth of U.S. corporations remains in the 10% to 12% range, due in large part
to productivity gains. Pricing power remains limited with skilled labor being
the scarcest resource.
Going forward, the Federal Reserve will be carefully weighing the tradeoff
between continued growth and potential inflation. Inflation is not yet evident
in the producer or consumer price indexes, but inflation remains the Fed's
primary concern. However, with real yields (the difference between nominal
yields and the inflation component) being historically high, it is difficult to
imagine any near-term return to rampant inflation.
We continue to believe that the conservative approach we apply to investing
on behalf of the Fund's three series will provide comfort to our shareholders as
well as competitive yields.
As always, we appreciate your support.
Sincerely,
/s/ Richard T. Hale
- -------------------
Richard T. Hale
Chairman
3
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
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STATEMENT OF NET ASSETS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Rating
-------------- Par
PRIME SERIES S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Commercial Paper -- 87.4%(a)
AUTOMOBILES & TRUCKS - 2.0%
Ford Motor Credit Corp.
5.48% 10/2/97 A-1 P-1 $20,000 $ 19,996,956
5.55% 2/9/98 A-1 P-1 20,000 19,596,083
PACCAR Financial Corp.
5.50% 10/2/97 A-1+ P-1 15,000 14,997,708
Toyota Motor Credit Corp.
5.47% 10/14/97 A-1+ P-1 15,000 14,970,371
------------
69,561,118
------------
CHEMICALS, GENERAL - 3.9%
E.I. duPont de Nemours and Co.
5.61% 10/2/97 A-1+ P-1 10,000 9,998,441
5.49% 11/25/97 A-1+ P-1 10,000 9,916,125
5.55% 12/3/97 A-1+ P-1 20,000 19,805,750
5.62% 12/4/97 A-1+ P-1 20,000 19,800,178
5.54% 12/5/97 A-1+ P-1 25,000 24,749,931
5.46% 1/12/98 A-1+ P-1 25,000 24,609,458
5.47% 1/29/98 A-1+ P-1 25,000 24,544,167
------------
133,424,050
------------
COMPUTER & OFFICE EQUIPMENT - 2.8%
Pitney Bowes Credit Corp.
5.63% 10/1/97 A-1+ P-1 10,000 10,000,000
5.64% 11/26/97 A-1+ P-1 13,200 13,084,192
5.57% 12/11/97 A-1+ P-1 8,000 7,912,118
5.53% 1/9/98 A-1+ P-1 10,000 9,846,389
5.52% 1/13/98 A-1+ P-1 29,500 29,029,573
5.52% 1/15/98 A-1+ P-1 8,000 7,869,973
Xerox Corp.
5.47% 11/21/97 A-1 P-1 19,500 19,348,891
------------
97,091,136
------------
CONSUMER PRODUCTS - 2.4%
Eastman Kodak Co.
5.47% 10/10/97 A-1+ P-1 22,500 22,469,231
5.48% 10/15/97 A-1+ P-1 20,000 19,957,378
5.49% 10/24/97 A-1+ P-1 20,000 19,929,850
5.55% 10/29/97 A-1+ P-1 20,000 19,913,667
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82,270,126
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</TABLE>
4
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BT ALEX. BROWN CASH RESERVE FUND, INC.
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<TABLE>
<CAPTION>
Rating
-------------- Par
PRIME SERIES (continued) S&P Moody's (000) Value
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<S><C>
Commercial Paper (continued)
CREDIT UNIONS - 2.6%
Central Corporate Credit Union
5.55% 10/15/97 A-1+ P-1 $18,000 $ 17,961,150
Mid-States Corporate Federal Credit Union
5.58% 10/24/97 A-1+ P-1 22,100 22,021,213
U.S. Central Credit Union
5.49% 11/17/97 A-1+ P-1 20,000 19,856,650
5.48% 12/5/97 A-1+ P-1 30,000 29,703,167
------------
89,542,180
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ELECTRICAL & ELECTRONICS - 4.6%
Emerson Electric Co.
5.50% 1/8/98 A-1+ P-1 28,500 28,068,937
General Electric Co.
5.50% 12/22/97 A-1+ P-1 25,000 24,686,806
5.50% 12/31/97 A-1+ P-1 15,000 14,791,458
Motorola Inc.
5.47% 10/24/97 A-1+ P-1 60,000 59,790,317
5.46% 11/3/97 A-1+ P-1 30,000 29,849,850
------------
157,187,368
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ELECTRIC UTILITY - 2.1%
Duke Energy Co.
5.49% 10/14/97 A-1+ P-1 20,000 19,960,350
Northern States Power Co.
5.51% 10/10/97 A-1+ P-1 25,000 24,965,562
5.48% 10/31/97 A-1+ P-1 27,855 27,727,796
------------
72,653,708
------------
ENTERTAINMENT - 1.0%
Walt Disney Co.
5.21% 11/19/97 A-1 P-1 20,000 19,858,172
5.20% 11/25/97 A-1 P-1 15,000 14,880,833
------------
34,739,005
------------
FINANCE, COMMERCIAL - 0.6%
CIT Group Holdings Inc.
5.45% 11/10/97 A-1 P-1 20,000 19,878,889
------------
</TABLE>
5
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Rating
-------------- Par
PRIME SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Commercial Paper (continued)
FINANCE, CONSUMER - 4.2%
USAA Capital Corp.
5.54% 10/7/97 A-1+ P-1 $15,000 $ 14,986,150
5.47% 10/27/97 A-1+ P-1 15,000 14,940,742
5.50% 11/6/97 A-1+ P-1 10,000 9,945,000
5.50% 11/10/97 A-1+ P-1 10,155 10,092,942
5.49% 11/12/97 A-1+ P-1 30,000 29,807,850
5.51% 11/14/97 A-1+ P-1 15,000 14,898,983
5.49% 12/2/97 A-1+ P-1 20,000 19,810,900
5.55% 1/9/98 A-1+ P-1 15,000 14,768,750
5.52% 2/10/98 A-1+ P-1 15,000 14,696,400
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143,947,717
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FINANCE, DIVERSIFIED - 3.1%
General Electric Capital Corp.
5.57% 10/1/97 A-1+ P-1 15,000 15,000,000
5.60% 10/9/97 A-1+ P-1 15,000 14,981,333
5.48% 10/14/97 A-1+ P-1 13,339 13,312,604
5.50% 11/3/97 A-1+ P-1 15,000 14,924,375
5.57% 12/4/97 A-1+ P-1 10,000 9,900,978
5.57% 12/9/97 A-1+ P-1 24,700 24,436,307
5.48% 1/13/98 A-1+ P-1 15,000 14,762,533
------------
107,318,130
------------
FOOD - 10.8%
Campbell Soup Co.
5.42% 10/8/97 A-1+ P-1 10,000 9,989,461
5.53% 11/20/97 A-1+ P-1 10,000 9,923,194
5.48% 12/1/97 A-1+ P-1 25,000 24,767,861
5.53% 12/3/97 A-1+ P-1 20,000 19,806,450
5.54% 4/17/98 A-1+ P-1 4,000 3,878,120
Cargill, Inc.
5.48% 10/3/97 A-1+ P-1 20,000 19,993,911
5.40% 10/7/97 A-1+ P-1 15,000 14,986,500
5.52% 10/10/97 A-1+ P-1 20,000 19,972,400
5.48% 10/14/97 A-1+ P-1 20,000 19,960,422
5.53% 10/16/97 A-1+ P-1 9,000 8,979,263
5.47% 11/3/97 A-1+ P-1 20,000 19,899,717
5.47% 1/26/98 A-1+ P-1 20,000 19,644,450
General Mills Inc.
5.55% 11/6/97 A-1 P-1 15,000 14,917,500
Hershey Foods
5.46% 10/20/97 A-1+ P-1 25,000 24,927,958
5.48% 11/14/97 A-1+ P-1 15,000 14,899,533
5.48% 11/25/97 A-1+ P-1 33,000 32,723,717
5.48% 12/12/97 A-1+ P-1 25,700 25,418,328
</TABLE>
6
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BT ALEX. BROWN CASH RESERVE FUND, INC.
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<TABLE>
<CAPTION>
Rating
-------------- Par
PRIME SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Commercial Paper (continued)
FOOD (CONCLUDED)
Kellogg Co.
5.48% 10/10/97 A-1+ P-1 $17,000 $ 16,976,710
5.48% 10/23/97 A-1+ P-1 23,833 23,753,186
5.49% 12/10/97 A-1+ P-1 25,000 24,733,125
------------
370,151,806
------------
HOUSEHOLD PRODUCTS - 4.2%
Procter & Gamble Co.
5.47% 10/2/97 A-1+ P-1 25,000 24,996,201
5.48% 10/8/97 A-1+ P-1 16,680 16,662,227
5.46% 11/19/97 A-1+ P-1 40,000 39,702,733
5.46% 11/21/97 A-1+ P-1 29,200 28,974,138
5.48% 12/10/97 A-1+ P-1 20,000 19,786,889
5.48% 12/22/97 A-1+ P-1 15,000 14,812,767
------------
144,934,955
------------
INSURANCE, BROKERAGE - 1.4%
Marsh & McLennan Companies Inc.
5.38% 10/3/97 A-1+ P-1 30,000 29,991,041
5.60% 3/5/98 A-1+ P-1 20,000 19,517,778
------------
49,508,819
------------
INSURANCE, PROPERTY & CASUALTY - 3.3%
A.I. Credit Corp.
5.54% 10/20/97 A-1+ P-1 15,000 14,956,142
5.50% 1/9/98 A-1+ P-1 25,000 24,618,056
5.48% 1/14/98 A-1+ P-1 20,000 19,680,333
Chubb Capital Corp.
5.51% 10/1/97 A-1+ P-1 54,795 54,795,000
------------
114,049,531
------------
INTEGRATED OIL - 2.6%
Amoco Co.
5.53% 10/17/97 A-1+ P-1 40,000 39,901,689
5.47% 1/21/98 A-1+ P-1 25,000 24,574,556
5.47% 1/22/98 A-1+ P-1 25,000 24,570,757
------------
89,047,002
------------
MACHINERY & TOOLS - 1.9%
Dover Corp.
5.70% 10/22/97 A-1 -- 19,650 19,584,664
5.52% 10/24/97 A-1 -- 20,000 19,929,467
5.60% 10/30/97 A-1 -- 15,000 14,932,333
</TABLE>
7
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Rating
-------------- Par
PRIME SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Commercial Paper (continued)
MACHINERY & TOOLS (CONCLUDED)
Snap-On Incorporated
5.51% 10/28/97 A-1+ P-1 $10,000 $ 9,958,675
------------
64,405,139
------------
OIL TRANSPORTATION - 2.5%
Colonial Pipeline Co.
5.47% 10/6/97 A-1+ P-1 17,500 17,486,705
5.48% 10/17/97 A-1+ P-1 23,100 23,043,739
5.64% 11/4/97 A-1+ P-1 10,000 9,946,733
5.60% 12/12/97 A-1+ P-1 10,000 9,888,000
5.60% 12/16/97 A-1+ P-1 9,200 9,091,236
5.53% 3/17/98 A-1+ P-1 15,000 14,615,204
------------
84,071,617
------------
PAPER - 1.6%
Kimberly-Clark Corp.
5.50% 10/21/97 A-1+ P-1 25,000 24,923,611
5.50% 10/23/97 A-1+ P-1 19,500 19,434,458
5.48% 10/24/97 A-1+ P-1 11,500 11,459,737
------------
55,817,806
------------
PHARMACEUTICALS - 13.3%
Abbott Laboratories
5.47% 10/1/97 A-1+ P-1 35,000 35,000,000
5.47% 10/16/97 A-1+ P-1 60,000 59,863,250
5.50% 10/30/97 A-1+ P-1 25,000 24,889,236
Merck & Co., Inc.
5.46% 12/1/97 A-1+ P-1 70,000 69,351,621
Schering-Plough Corp.
5.65% 10/7/97 A-1+ P-1 18,000 17,983,050
5.58% 10/28/97 A-1+ P-1 18,000 17,924,670
5.50% 11/4/97 A-1+ P-1 9,385 9,336,250
5.64% 11/19/97 A-1+ P-1 28,650 28,430,064
5.47% 12/3/97 A-1+ P-1 11,775 11,662,284
5.50% 12/16/97 A-1+ P-1 11,500 11,366,472
5.48% 1/14/98 A-1+ P-1 8,700 8,560,945
5.49% 1/15/98 A-1+ P-1 30,000 29,515,050
Warner-Lambert Co.
5.48% 11/19/97 A-1+ P-1 53,150 52,753,560
5.46% 11/26/97 A-1+ P-1 20,000 19,830,133
5.46% 12/16/97 A-1+ P-1 25,000 24,711,833
5.46% 12/22/97 A-1+ P-1 35,000 34,564,717
------------
455,743,135
------------
</TABLE>
8
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
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<TABLE>
<CAPTION>
Rating
-------------- Par
PRIME SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Commercial Paper (continued)
PUBLISHING - 0.4%
McGraw-Hill, Inc.
5.48% 12/18/97 A-1 P-1 $14,500 $ 14,327,837
------------
RETAIL - 1.2%
May Department Stores
5.48% 10/27/97 A-1 P-1 20,000 19,920,844
Wal-Mart Stores
5.50% 10/3/97 A-1+ P-1 20,000 19,993,889
------------
39,914,733
------------
STRUCTURED FINANCE - 6.2%
CIESCO, L.P.
5.52% 10/3/97 A-1+ P-1 15,000 14,995,400
5.49% 10/10/97 A-1+ P-1 25,000 24,965,688
5.50% 11/10/97 A-1+ P-1 20,000 19,877,778
5.50% 11/25/97 A-1+ P-1 25,000 24,789,931
5.53% 1/6/98 A-1+ P-1 20,000 19,701,994
Corporate Asset Funding Co., Inc.
5.50% 11/6/97 A-1+ P-1 30,000 29,835,000
5.52% 11/14/97 A-1+ P-1 25,000 24,831,333
5.52% 11/17/97 A-1+ P-1 25,000 24,819,833
Corporate Receivables Corp.
5.50% 10/17/97 A-1 P-1 30,000 29,926,667
------------
213,743,624
------------
TELEPHONE - 6.8%
Ameritech Capital Funding Corp.
5.46% 11/10/97 A-1+ P-1 14,000 13,915,067
Ameritech Corp.
5.47% 10/29/97 A-1+ P-1 15,000 14,936,183
5.47% 11/6/97 A-1+ P-1 10,000 9,945,300
5.475% 11/7/97 A-1+ P-1 25,000 24,859,323
5.48% 12/4/97 A-1+ P-1 25,000 24,756,444
5.65% 12/5/97 A-1+ P-1 15,000 14,846,979
5.50% 12/29/97 A-1+ P-1 15,000 14,796,042
AT&T Corp.
5.44% 10/15/97 A-1+ P-1 50,000 49,894,222
Bell Atlantic Network Funding Corp.
5.54% 10/16/97 A-1+ P-1 15,000 14,965,375
SBC Communications Inc.
5.49% 12/3/97 A-1+ P-1 35,000 34,663,738
5.50% 12/11/97 A-1+ P-1 15,000 14,837,292
------------
232,415,965
------------
</TABLE>
9
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Rating
-------------- Par
PRIME SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Commercial Paper (concluded)
TRANSPORTATION - 1.9%
United Parcel Service of America
5.49% 11/3/97 A-1+ P-1 $65,000 $ 64,672,704
--------------
TOTAL COMMERCIAL PAPER 3,000,418,100
--------------
Medium-Term Note - 0.6%
E.I. duPont de Nemours and Co.
5.59% 10/8/97 A-1+ P-1 9,500 9,499,925
Eli Lilly & Co.
6.20% 11/6/97 A-1+ P-1 10,000 10,003,834
--------------
TOTAL MEDIUM-TERM NOTE 19,503,759
--------------
Variable Rate Note - 3.6%
Associates Corp. Master Note
5.497%(b) 12/1/97 A-1+ P-1 75,000 75,000,000
Coca-Cola Co. Master Note
5.377%(b) 3/13/98 A-1+ P-1 50,000 50,000,000
--------------
TOTAL VARIABLE RATE NOTE 125,000,000
--------------
Federal Home Loan Bank - 1.6%
FHLB
5.46% 12/12/97 AAA -- 15,000 14,998,863
5.81% 1/23/98 AAA -- 10,000 10,000,000
5.80% 8/13/98 AAA -- 15,000 15,000,000
5.86% 9/2/98 AAA -- 15,000 15,000,000
--------------
TOTAL FEDERAL HOME LOAN BANK 54,998,863
--------------
Federal National Mortgage Association - 3.2%
FNMA
Note
5.79% 10/16/97 -- P-1 20,000 20,000,000
5.688% 11/13/97 -- P-1 15,000 15,000,000
5.59% 12/18/97 -- P-1 35,000 35,000,000
5.52% 1/15/98 -- P-1 20,000 20,000,000
5.54% 3/12/98 -- P-1 20,000 20,000,000
--------------
TOTAL FEDERAL NATIONAL MORTGAGE ASSOCIATION 110,000,000
--------------
</TABLE>
10
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
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<TABLE>
<CAPTION>
Rating
-------------- Par
PRIME SERIES (concluded) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Repurchase Agreements - 3.7%(c)
Goldman, Sachs & Co.
6.11%(d) 10/1/97 -- -- $75,800 $ 75,000,000
Morgan Stanley & Co.
5.95%(e) 10/1/97 -- -- 50,000 50,000,000
---------------
TOTAL REPURCHASE AGREEMENTS 125,000,000
---------------
TOTAL INVESTMENTS - 100.1% 3,434,920,722(f)
LIABILITIES IN EXCESS OF OTHER ASSETS, NET - (0.1%) (1,892,982)
---------------
NET ASSETS - 100.0% $3,433,027,740
===============
Net Asset Value, Offering and Redemption Price Per:
Prime Share
($2,938,450,337 / 2,938,441,857 shares outstanding) $1.00
=====
Flag Investors Class A Share
($6,920,887 / 6,920,623 shares outstanding) $1.00
=====
Flag Investors Class B Share
($380,804 / 380,804 shares outstanding) $1.00
=====
Prime Institutional Share
($273,187,869 / 273,187,590 shares outstanding) $1.00
=====
Quality Cash Reserve Prime Share
($214,087,843 / 214,087,161 shares outstanding) $1.00
=====
</TABLE>
- ----------
(a) Most commercial paper is traded on a discount basis. In such cases, the
interest rate shown represents the rate of discount paid or received at time
of purchase by the Fund.
(b) Master note is payable upon demand by the Fund upon no more than five days'
notice. Interest rates on master notes are redetermined weekly. Rates shown
are the rates in effect on September 30, 1997.
(c) Collateral on repurchase agreements is taken into possession by the broker's
custodial bank upon entering into the repurchase agreement. The collateral
is marked to market daily to insure market value as being as least 102% of
the resale price of the repurchase agreement.
(d) Dated 9/30/97, to be repurchased on 10/1/97, collateralized by U.S. Treasury
Notes with a market value of $76,500,648.
(e) Dated 9/30/97, to be repurchased on 10/1/97, collateralized by U.S. Treasury
Notes with a market value of $51,007,747.
(f) Aggregate cost for financial reporting and federal tax purposes.
MOODY'S RATINGS:
Aaa Bonds that are judged to be of the best quality.
P-1 Commercial paper bearing this designation is of the best quality.
S&P RATINGS:
AAA Obligations that are of the highest quality.
A-1 Commercial paper that has a strong degree of safety regarding timely
payment. Those issues determined to possess very strong safety
characteristics are denoted with a plus (+) sign.
A detailed description of the above ratings can be found in the
Fund's Statement of Additional Information.
See Notes to Financial Statements.
11
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Maturity Par
TREASURY SERIES Date (000) Value
- ---------------------------------------------------------------------------------------
<S><C>
U.S. Treasury Securities - 99.2%
U.S. TREASURY BILLS(a) - 55.4%
5.060% 10/16/97 $ 19,100 $ 19,059,691
5.070% 10/16/97 7,000 6,985,213
5.100% 10/16/97 12,400 12,373,650
5.060% 10/23/97 28,000 27,913,332
5.070% 10/23/97 8,000 7,975,213
5.130% 11/6/97 9,000 8,953,785
5.140% 11/6/97 7,300 7,262,478
5.010% 11/13/97 6,300 6,262,262
5.020% 11/13/97 1,700 1,689,807
5.060% 11/13/97 15,800 15,704,412
5.070% 11/13/97 4,200 4,174,566
5.100% 11/13/97 11,600 11,529,337
5.150% 11/13/97 3,200 3,180,296
5.160% 11/13/97 11,800 11,727,273
5.120% 11/20/97 23,000 22,836,444
5.120% 11/20/97 43,000 42,694,222
5.140% 11/20/97 6,500 6,453,552
4.890% 11/28/97 17,100 16,965,281
5.000% 11/28/97 10,500 10,415,332
5.070% 11/28/97 6,000 5,950,942
4.840% 12/4/97 25,000 24,784,889
5.150% 12/4/97 11,500 11,394,711
4.950% 12/11/97 5,800 5,743,378
4.970% 12/11/97 4,300 4,257,852
4.900% 1/8/98 1,900 1,874,398
4.940% 1/8/98 25,000 24,660,031
4.990% 1/8/98 50,000 49,313,875
4.980% 1/22/98 8,200 8,071,820
5.020% 2/5/98 2,600 2,553,955
5.075% 2/5/98 2,800 2,749,870
5.130% 2/5/98 3,100 3,043,843
------------
TOTAL U.S. TREASURY BILLS 388,555,710
------------
</TABLE>
12
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Maturity Par
TREASURY SERIES (concluded) Date (000) Value
- ---------------------------------------------------------------------------------------
<S><C>
U.S. Treasury Securities (concluded)
U.S. TREASURY NOTES - 43.8%
8.750% 10/15/97 $ 45,000 $ 45,056,019
5.625% 10/31/97 88,600 88,595,807
5.750% 10/31/97 20,000 20,005,282
5.250% 12/31/97 145,000 144,974,033
6.000% 12/31/97 8,400 8,413,780
------------
TOTAL U.S. TREASURY NOTES 307,044,921
------------
TOTAL INVESTMENTS IN U.S. TREASURY SECURITIES - 99.2% 695,600,631(b)
OTHER ASSETS LESS LIABILITIES, NET - 0.8% 5,314,857
------------
NET ASSETS - 100.0% $700,915,488
============
Net Asset Value, Offering and Redemption Price Per:
Treasury Share
($634,225,149 / 634,129,293 shares outstanding) $1.00
=====
Treasury Institutional Share
($66,690,339 / 66,676,132 shares outstanding) $1.00
=====
</TABLE>
- ------------
(a) U.S. Treasury bills are traded on a discount basis. In such cases, the
interest rate shown represents the yield at the date of purchase.
(b) Aggregate cost for financial reporting and federal tax purposes.
See Notes to Financial Statements.
13
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Rating
-------------- Par
TAX-FREE SERIES S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Alabama -- 2.1%
Alabama Housing Finance Authority,
Multifamily Housing Refunding RB
(Heatherbrooke Project) DN
(FNMA LOC)
4.10% 10/7/97(a) A-1+ -- $ 3,600 $ 3,600,000
Alabama Housing Finance Authority,
Multifamily Housing Refunding RB
(Rime Village Hoover Project),
Series 1996a DN (FNMA LOC)
4.10% 10/7/97(a) A-1+ VMIG-1 5,600 5,600,000
University of Alabama, University of
Alabama-Birmingham Hospital,
Series A DN
4.10% 10/7/97(a) A-1+ VMIG-1 7,200 7,200,000
------------
16,400,000
------------
Arkansas -- 0.2%
Arkansas Development Authority Health
Care Facility (Sisters of Mercy) DN
(ABN-Amro Bank N.V. LOC)
4.05% 10/7/97(a) A-1+ VMIG-1 1,800 1,800,000
------------
Colorado -- 1.1%
Colorado Housing Finance Authority,
Multifamily Housing (Silver Reef
Project) DN (FNMA LOC)
4.10% 10/7/97(a) A-1+ VMIG-1 8,290 8,290,000
------------
Florida -- 5.3%
Orlando Special Assessment RB,
Republic Drive Interchange DN
(Morgan Guaranty LOC)
4.00% 10/7/97(a) -- VMIG-1 10,000 10,000,000
Sunshine State Governmental Financing
Commission, Commercial Paper
Revenue Notes (Government
Financing Program)
3.70% 12/19/97(b) A-1+ -- 15,000 15,000,000
Sunshine State Governmental Financing
Commission RB (Union Bank
of Switzerland LOC)
3.80% 10/24/97(b) -- VMIG-1 12,565 12,565,000
</TABLE>
14
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Rating
-------------- Par
TAX-FREE SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Florida (concluded)
Tampa Health Facilities Authority RB
(Lifelink Foundation Inc. Project)
DN (Suntrust Bank LOC)
4.15% 10/7/97(a) -- VMIG-1 $ 3,500 $ 3,500,000
------------
41,065,000
------------
Georgia -- 13.1%
Burke County PCR MB (Oglethorpe
Power Company) (AMBAC Insurance)
3.60% 12/1/97(b) -- VMIG-1 6,000 6,000,000
Cobb County Housing Authority,
Multifamily Housing RB
(Mill Bridge Project), DN
(FNMA LOC)
4.10% 10/7/97(a) A-1+ -- 8,500 8,500,000
Cobb County Housing Authority RB
(Post Bridge Project), Series
1995 DN (FNMA LOC)
4.10% 10/7/97(a) A-1+ -- 9,380 9,380,000
Dekalb County Housing Authority,
Multifamily Housing (Clairmont
Crest Project) DN (FNMA LOC)
4.15% 10/7/97(a) A-1+ VMIG-1 1,400 1,400,000
Dekalb County Housing Authority,
Multifamily Housing (Post
Ashford Project) DN (FNMA LOC)
4.10% 10/7/97(a) A-1+ -- 7,895 7,895,000
Dekalb County Multifamily Housing
Bonds (Camden Brooke Project)
DN (FNMA LOC)
4.15% 10/7/97(a) -- VMIG-1 5,400 5,400,000
Fulton County Development Authority
(Georgia Tech Athletic Association
Project), Series 1995 DN
(Suntrust Bank LOC)
4.15% 10/7/97(a) -- VMIG-1 6,150 6,150,000
Georgia Municipal Electric Authority,
Series B DN (Credit Suisse LOC)
4.05% 10/7/97(a) A-1+ P-1 12,000 12,000,000
Georgia Municipal Electric Authority,
Series C DN (Morgan Guaranty LOC)
4.15% 10/7/97(a) A-1+ VMIG-1 19,600 19,600,000
</TABLE>
15
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Rating
-------------- Par
TAX-FREE SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Georgia (concluded)
Georgia Municipal Gas Authority,
Gas RB DN (Wachovia LOC)
4.10% 10/7/97(a) A-1+ -- $ 4,100 $ 4,100,000
Gwinnett County Housing Authority,
Multifamily Housing (Post Corners
Project), Series 1996 DN (FNMA LOC)
4.10% 10/7/97(a) A-1+ VMIG-1 5,000 5,000,000
Macon-Bibb County Hospital Authority
(Medical Center of Central Georgia),
Series 1997 DN (Suntrust Bank LOC)
4.15% 10/7/97(a) -- VMIG-1 3,000 3,000,000
Roswell Housing Authority, Multifamily
Housing (Post Canyon Project)
DN (FNMA LOC)
4.10% 10/7/97(a) A-1+ -- 5,500 5,500,000
Smyrna Housing Authority (Post Valley
Project), Series 1995 DN
(FNMA LOC)
4.10% 10/7/97(a) A-1+ -- 7,100 7,100,000
------------
101,025,000
------------
Idaho -- 1.0%
State of Idaho TAN
4.625% 6/30/98(b) SP-1+ MIG-1 7,500 7,540,071
------------
Illinois -- 13.5%
Illinois Development Finance Authority
(Chicago Symphony Orchestra Project)
DN (Northern Trust LOC)
4.05% 10/7/97(a) A-1 VMIG-1 11,300 11,300,000
Illinois Development Finance Authority
(Lyric Opera Chicago) DN
(Harris Trust & Savings Bank LOC)
4.05% 10/7/97(a) A-1+ VMIG-1 6,100 6,100,000
Illinois Development Finance Authority
PCR (Commonwealth Edison Co.
Project), Series 1994C DN
(ABN-Amro Bank N.V. LOC)
4.15% 10/7/97(a) A-1+ P-1 7,700 7,700,000
Illinois Development Finance Authority
PCR Refunding (Illinois Power Co.
Project) DN (Canadian Imperial
Bank LOC)
4.15% 10/7/97(a) A-1+ VMIG-1 8,500 8,500,000
</TABLE>
16
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Rating
-------------- Par
TAX-FREE SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Illinois (concluded)
Illinois Development Finance Authority
PCR (Illinois Power Co. Project)
(Canadian Imperial Bank LOC)
3.80% 3/17/98(b) A-1+ VMIG-1 $ 9,500 $ 9,500,000
Illinois Education Facilities Authority
(Museum of Science and Industry)
DN (Northern Trust LOC)
4.05% 10/7/97(a) -- VMIG-1 5,900 5,900,000
Illinois Education Facilities Authority
Adjustable Demand MB (John F.
Kennedy Health Care Foundation)
(Harris Trust LOC)
3.90% 11/20/97(b) A-1+ -- 12,800 12,800,000
Illinois Health Facilities Authority RB
(Gottlieb Health) DN
(Harris Trust LOC)
4.05% 10/7/97(a) -- VMIG-1 2,500 2,500,000
Illinois Health Facilities Authority,
Revolving Fund Pooled
Financing Program (The University
of Chicago Project)
3.80% 12/2/97(b) A-1+ VMIG-1 16,400 16,400,000
Illinois Health Facilities Authority
(Carle Foundation Project) DN
(Northern Trust LOC)
4.05% 10/7/97(a) -- VMIG-1 5,850 5,850,000
Illinois Health Facilities Authority
(Evanston Hospital Corp. Project),
Series 1990A MB
3.85% 10/15/97(b) A-1+ VMIG-1 13,000 13,000,000
Illinois Health Facilities Authority
(Evanston Hospital Corp. Project),
Series 1996 MB
3.90% 7/31/98(b) A-1+ VMIG-1 5,000 5,000,000
------------
104,550,000
------------
Indiana -- 4.0%
Evansville Hospital Authority, Hospital
Revenue (Daughters of Charity,
St. Mary's Medical Center of
Evansville) DN
4.10% 10/7/97(a) A-1+ VMIG-1 4,570 4,570,000
</TABLE>
17
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Rating
-------------- Par
TAX-FREE SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Indiana (concluded)
Mount Vernon PCR RB Solid Waste
Disposal (General Electric),
Series L DN
4.05% 10/7/97(a) A-1+ VMIG-1 $ 3,500 $ 3,500,000
Petersburg PCR (Indianapolis Power &
Light Co.) DN (AMBAC Insurance)
4.00% 10/7/97(a) -- VMIG-1 4,100 4,100,000
Petersburg PCR Refunding RB
(Indianapolis Power & Light Co.)
3.75% 11/14/97(b) A-1+ VMIG-1 8,500 8,500,000
Purdue University, Student Fee
Bonds DN
4.05% 10/7/97(a) A-1+ VMIG-1 10,000 10,000,000
------------
30,670,000
------------
Iowa -- 1.0%
Iowa Finance Authority Health Care
Facility RB (Catholic Health Corp.-A)
DN (Toronto Dominion LOC)
4.00% 10/7/97(a) A-1+ -- 7,700 7,700,000
------------
Louisiana -- 3.5%
East Baton Rouge Parish (Georgia-
Pacific Corp.) PCR Bonds DN
(Toronto Dominion LOC)
4.05% 10/7/97(a) -- P-1 2,700 2,700,000
Louisiana Offshore Terminal Authority,
First Stage 1991 A (Loop Inc.)
DN (Morgan Guaranty LOC)
4.00% 10/7/97(a) A-1+ VMIG-1 5,300 5,300,000
Plaquemines Port, Harbor and Terminal
District, Marine Terminal Facilities
Refunding RB (Tampa Electric),
Series A
3.85% 10/8/97(b) -- P-1 6,325 6,325,000
Plaquemines Port, Harbor and Terminal
District, Marine Terminal Facilities
Refunding RB (Tampa Electric)
3.85% 10/8/97(b) -- P-1 7,000 7,000,000
St. Charles Parish PCR (Shell Oil Co.
Project) DN
3.95% 10/7/97(a) A-1+ P-1 6,050 6,050,000
------------
27,375,000
------------
</TABLE>
18
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Rating
-------------- Par
TAX-FREE SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Maryland -- 4.2%
Maryland Health & Higher Education
Facility Authority (Daughters of
Charity, National Health System) DN
4.10% 10/7/97(a) A-1+ VMIG-1 $ 5,200 $ 5,200,000
Maryland Health & Higher Education
Facility Authority (Daughters of
Charity, National Health System) DN
4.10% 10/7/97(a) -- VMIG-1 10,500 10,500,000
Washington Suburban Sanitary District,
Montgomery, Prince George's Counties
GO BAN DN
3.80% 10/7/97(a) A-1+ VMIG-1 16,600 16,600,000
------------
32,300,000
------------
Michigan -- 0.5%
Delta County Economic Development
Corp., Environmental Improvement RB
(Mead-Escanaba Paper), Series 85 DN
(Credit Suisse LOC)
3.85% 10/1/97(a) A-1+ -- 1,000 1,000,000
Detroit Water Supply System DN
(FGIC Insurance)
4.15% 10/7/97(a) A-1+ VMIG-1 2,000 2,000,000
Strategic Fund Consumer Power Co.
PCR, Series 1988A DN (Union Bank
of Switzerland LOC)
3.85% 10/1/97(a) -- P-1 800 800,000
------------
3,800,000
------------
Minnesota -- 1.1%
Becker PCR (Northern States
Power), Series 92
3.80% 12/16/97(b) -- P-1 3,000 3,000,000
Rochester Health Care Facilities RB
(Mayo Foundation/Mayo Medical
Center), Series A
3.80% 10/22/97(b) A-1+ -- 2,500 2,500,000
Rochester Health Care Facilities RB
(Mayo Foundation/Mayo Medical
Center), Series C
3.80% 10/22/97(b) A-1+ VMIG-1 2,800 2,800,000
------------
8,300,000
------------
</TABLE>
19
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Rating
-------------- Par
TAX-FREE SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Missouri -- 2.7%
Missouri Health & Education Facility
Authority (Sisters of Mercy),
Series D DN
4.05% 10/7/97(a) A-1+ VMIG-1 $ 9,000 $ 9,000,000
Missouri Health & Education Facility
Authority (SSM Health Care Series 88c)
(Morgan Guaranty LOC)
3.80% 12/16/97(b) -- VMIG-1 3,600 3,600,000
Missouri Health & Education Facility
Authority (Washington University) DN
4.15% 10/7/97(a) A-1+ VMIG-1 8,600 8,600,000
------------
21,200,000
------------
Montana -- 1.6%
Forsyth PCR (Portland General Electric
Project), Series 1983-B DN
4.00% 10/7/97(a) A-1+ P-1 12,400 12,400,000
------------
New Jersey -- 1.5%
Gloucester County PCR (Mobil Oil
Refining Co. Project), Series 1993 DN
3.70% 10/7/97(a) A-1+ VMIG-1 600 600,000
Mercer County Improvement Authority
(Pooled Government Loan Project),
Series 1985 DN (Credit Suisse LOC)
3.80% 10/7/97(a) A-1+ VMIG-1 1,600 1,600,000
New Jersey Economic Development
Authority (Public Service Electric &
Gas Company), Series 1995A DN
(Swiss Bank LOC)
3.70% 10/7/97(a) A-1+ VMIG-1 3,300 3,300,000
Salem County IDA PCR (E.I. duPont
de Nemours and Co. Project),
Series 1982A DN
3.60% 10/7/97(a) A-1+ VMIG-1 5,700 5,700,000
------------
11,200,000
------------
New York -- 0.7%
New York City Municipal Water Finance
Authority, Series 3 TECP (Toronto
Dominion LOC)
3.85% 10/9/97(b) A-1+ P-1 5,300 5,300,000
------------
</TABLE>
20
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Rating
-------------- Par
TAX-FREE SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
North Carolina -- 0.3%
North Carolina Medical Care Commission
(Moses H. Cone Memorial Hospital
Project), Series 1995 DN (Wachovia
Bank LOC)
4.05% 10/7/97(a) A-1+ VMIG-1 $1,200 $ 1,200,000
North Carolina Medical Care Commission
(Baptist Hospital Project),
Series 1992B DN
4.05% 10/7/97(a) A-1+ VMIG-1 1,000 1,000,000
------------
2,200,000
------------
Ohio -- 3.2%
Clermont County Health Facilities
Authority (Mercy Health Systems
Project), Series 1996A DN
4.05% 10/7/97(a) -- VMIG-1 4,700 4,700,000
Clermont County Health Facilities
Authority (Mercy Health Systems
Project), Series 1994B DN
4.05% 10/7/97(a) A-1+ VMIG-1 7,336 7,336,000
Franklin County Hospital
(Holy Cross Health System Corp.
Project), Series 1995 DN (Morgan
Guaranty LOC)
4.15% 10/7/97(a) A-1+ VMIG-1 1,400 1,400,000
Franklin County Hospital Facilities
Refunding and Improvement RB
(U.S. Health Corp. of Columbus)
DN (Morgan Guaranty LOC)
3.80% 10/7/97(a) -- VMIG-1 6,700 6,700,000
Hamilton County Hospital Finance
Authority RB (Health Alliance
Hospital Project), Series B DN
(Credit Suisse LOC)
4.10% 10/7/97(a) A-1+ VMIG-1 5,000 5,000,000
------------
25,136,000
------------
Oklahoma -- 3.6%
Oklahoma Industries Authority
Hospital RB (St. Anthony Parking
Garage B) (Morgan Guaranty LOC)
3.85% 12/1/97(b) -- VMIG-1 2,300 2,300,000
</TABLE>
21
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Rating
-------------- Par
TAX-FREE SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Oklahoma (concluded)
Oklahoma Industries Authority
Hospital RB (Baptist Medical Center
of Oklahoma, Inc. Project) DN
4.20% 10/7/97(a) A-1+ VMIG-1 $ 9,375 $ 9,375,000
Oklahoma Industries Authority Medical
Practice Facility RB (SSM Health
Care Obligated Group) (St. Anthony
Physicians Building Project)
(Morgan Guaranty LOC)
3.80% 12/1/97(b) -- VMIG-1 6,445 6,445,000
Oklahoma State Water Resources Board,
State Loan Program RB
3.75% 3/2/98(b) A-1+ -- 10,000 10,000,000
------------
28,120,000
------------
Oregon -- 2.6%
Clackamas County Hospital Facility
Authority RB (Kaiser Permanente),
Series 1984
3.55% 10/1/97(b) A-1+ -- 2,700 2,700,000
Kalmath Falls Electric Revenue (Salt Caves
Hydroelectric Project), Series D
(Escrowed In U.S. Treasuries)
4.50% 5/1/98(b) SP-1+ -- 17,500 17,564,062
------------
20,264,062
------------
Pennsylvania -- 2.7%
Delaware County IDA Solid Waste
(Kimberly-Clark Project),
Series 1984B DN
4.00% 10/7/97(a) A-1+ P-1 6,500 6,500,000
Emmaus General Authority, Pooled Loan,
Series 1996 DN (Financial Security
Assurance LOC)
4.05% 10/7/97(a) A-1+ VMIG-1 6,400 6,400,000
Lehigh County Water RB, Series 1984 DN
(ABN-Amro Bank N.V. LOC)
4.10% 10/7/97(a) A-1+ -- 3,300 3,300,000
Philadelphia Hospital & Higher
Educational Facility Authority
(Children's Hospital of Philadelphia
Project), Series 1992B DN
3.90% 10/1/97(a) A-1+ VMIG-1 400 400,000
</TABLE>
22
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Rating
-------------- Par
TAX-FREE SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Pennsylvania (concluded)
Philadelphia Hospital & Higher
Educational Facility Authority
(Children's Hospital of Philadelphia
Project), Series 1996A DN
3.90% 10/1/97(a) A-1+ VMIG-1 $ 500 $ 500,000
York County IDA PCR (PECO Energy Co.
Project), Series 1993A DN
(Toronto Dominion LOC)
3.75% 10/1/97(a) A-1+ P-1 3,500 3,500,000
------------
20,600,000
------------
Tennessee -- 2.1%
Knox County Health, Education and
Housing Facilities (Webb School of
Knoxville Project), Series 1997 DN
(Suntrust Bank LOC)
4.15% 10/7/97(a) -- VMIG-1 5,000 5,000,000
Memphis GO, Series A DN
(Westdeutsche Landesbank LOC)
4.15% 10/7/97(a) A-1+ VMIG-1 2,500 2,500,000
Tennessee GO BAN DN
4.05% 10/7/97(a) SP-1+ VMIG-1 9,000 9,000,000
------------
16,500,000
------------
Texas -- 17.4%
Austin Combined Utility Systems TECP,
Series A (Travis & Williamson Counties)
(Morgan Guaranty LOC)
3.75% 12/12/97(b) A-1+ P-1 4,876 4,876,000
Austin Combined Utility Systems TECP,
Series A (Travis & Williamson Counties)
(Morgan Guaranty LOC)
3.70% 12/12/97(b) A-1+ P-1 8,735 8,735,000
Board of Regents, Texas A & M
University System
3.80% 12/15/97(b) A-1+ P-1 16,000 16,000,000
Harris County Toll Road, Unlimited Tax
and Subordinate Lien RB, Series G DN
4.10% 10/7/97(a) A-1+ VMIG-1 2,800 2,800,000
Harris County Toll Road, Unlimited Tax
and Subordinate Lien RB, Series H DN
4.10% 10/7/97(a) A-1+ VMIG-1 10,300 10,300,000
Hockley County IDA (Amoco Co.
Project) DN
3.80% 11/1/97(b) A-1+ -- 8,000 8,000,000
</TABLE>
23
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Rating
-------------- Par
TAX-FREE SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Texas (concluded)
Houston GO, Series A TECP
3.80% 12/16/97(b) A-1+ P-1 $ 8,600 $ 8,600,000
Houston GO, Series B TECP
3.80% 12/16/97(b) A-1+ P-1 9,800 9,800,000
Lower Colorado River Authority TECP
3.65% 11/5/97(b) A-1+ P-1 3,300 3,300,000
Lower Colorado River Authority TECP,
Series D (Morgan Guaranty LOC)
3.65% 11/19/97(b) A-1+ P-1 13,400 13,400,000
Lower Neches Valley Authority
(Chevron, Inc.)
3.75% 2/17/98(b) A-1+ P-1 6,600 6,600,000
San Antonio Gas and Electric TECP
3.75% 10/23/97(b) A-1+ P-1 6,500 6,500,000
Texas Higher Education Facilities
Authority Revenue, Series 85b
(FGIC Insurance) DN
4.05% 10/7/97(a) A-1+ VMIG-1 3,560 3,560,000
Texas State TRAN
4.75% 8/31/98(b) SP-1+ VMIG-1 22,000 22,176,293
Texas State Veterans Housing
Assistance Fund DN
4.10% 10/7/97(a) A-1+ VMIG-1 4,885 4,885,000
Yoakum County Industrial Development
PCR (Amoco Co. Project)
3.80% 11/1/97(b) A-1+ -- 5,265 5,265,000
------------
134,797,293
------------
Utah -- 0.6%
Utah County Environmental
Improvement RB (USX Corp. Project)
DN (Wachovia LOC)
3.75% 1/15/98(b) A-1+ VMIG-1 5,000 5,000,000
------------
Virginia -- 0.3%
Hampton Roads Regional Jail Authority,
Series 1996B DN (Wachovia Bank LOC)
4.05% 10/7/97(a) A-1+ VMIG-1 2,500 2,500,000
------------
Washington -- 4.9%
King County Sewer Revenue Notes,
Series A TECP
3.70% 11/14/97(b) A-1+ P-1 10,000 10,000,000
</TABLE>
24
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Rating
-------------- Par
TAX-FREE SERIES (continued) S&P Moody's (000) Value
- ------------------------------------------------------------------------------------
<S><C>
Washington (concluded)
King County Sewer Revenue Notes,
Series A TECP
3.75% 11/13/97(b) A-1 P-1 $10,000 $ 10,000,000
Washington GO DN
4.05% 10/7/97(a) A-1+ VMIG-1 17,800 17,800,000
------------
37,800,000
------------
Wisconsin -- 4.2%
Oak Creek PCR (Wisconsin Electric
Power Co. Project) DN
4.20% 10/7/97(a) -- P-1 3,200 3,200,000
Pleasant Prairie Village PCR Refunding
(Wisconsin Electric Power
Co. Project) DN
4.10% 10/7/97(a) A-1+ P-1 10,000 10,000,000
Wisconsin Health Facilities Authority RB
(Daughters of Charity, St. Mary's
Hospital) DN
4.10% 10/7/97(a) -- VMIG-1 4,150 4,150,000
Wisconsin TRAN
4.50% 6/15/98(b) SP-1+ VMIG-1 15,000 15,066,165
------------
32,416,165
------------
Wyoming -- 0.6%
Carbon County PCR (Amoco Co. Project)
3.80% 11/1/97(b) A-1+ -- 4,800 4,800,000
TOTAL INVESTMENTS - 99.6% 771,048,591(c)
OTHER ASSETS IN EXCESS OF LIABILITIES, NET - 0.4% 3,268,052
------------
NET ASSETS - 100.0% $774,316,643
============
Net Asset Value, Offering and Redemption Price Per:
Tax-Free Share
($702,661,433 / 702,733,598 shares outstanding) $1.00
=====
Tax-Free Institutional Share
($71,655,210 / 71,655,199 shares outstanding) $1.00
=====
</TABLE>
- --------
(a) Demand security; payable upon demand by the Fund with usually no more than
seven (7) calendar days' notice. Interest rates are redetermined
periodically. Rates shown are those in effect on September 30, 1997.
(b) Security has an outstanding call, mandatory put or optional put by the
issuer. Par value and maturity date reflect such call or put.
(c) Aggregate cost for financial reporting and federal tax purposes.
See Notes to Financial Statements.
25
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1997
TAX-FREE SERIES (concluded)
- --------------------------------------------------------------------------------
INVESTMENT ABBREVIATIONS:
BAN Bond Anticipation Notes
DN Demand Notes
GO General Obligation Bonds
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
LOC Letter of Credit
MB Municipal Bonds
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
RB Revenue Bonds
TAN Tax Anticipation Notes
TECP Tax-Exempt Commercial Paper
TRAN Tax Revenue Anticipation Notes
INSURANCE ABBREVIATIONS:
AMBAC AMBAC Indemnity Corp.
FGIC Financial Guaranty Insurance Corporation
MBIA Municipal Bond Investors Assurance
MOODY'S MUNICIPAL BOND RATINGS:
Aaa Bonds that are judged to be of the best quality.
Aa Bonds that are judged to be of high quality by all standards. Issues
are sometimes rated with a 1, 2 or 3, which denote a high, medium or
low ranking within the rating.
MIG-1 Notes bearing this designation are of the best quality.
VMIG-1 Variable rate demand obligations bearing this designation are of the
best quality.
P-1 Commercial paper bearing this designation is of the best quality.
S&P MUNICIPAL BOND RATINGS:
AAA Obligations that are of the highest quality.
AA Obligations that have the second strongest capacity for payment of
debt service. Those issues determined to possess very strong safety
characteristics are denoted with a plus (+) sign.
SP-1 Notes that have a strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety
characteristics are assigned a plus (+) designation.
A-1 Commercial paper that has a strong degree of safety regarding timely
payment. Those issues determined to possess very strong safety
characteristics are denoted with a plus (+) sign.
A detailed description of the above ratings can be found in the
Fund's Statement of Additional Information.
See Notes to Financial Statements.
26
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
Prime Treasury Tax-Free
Series Series Series
- ------------------------------------------------------------------------------------
<S><C>
INVESTMENT INCOME (NOTE 1):
Interest income $87,054,105 $18,180,919 $13,306,931
----------- ----------- -----------
EXPENSES:
Distribution fee (Note 2) 3,970,178 780,951 850,459
Investment advisory fee (Note 2) 4,090,678 844,989 981,655
Transfer agent fee 1,568,681 137,872 73,177
Custodian fee 186,739 43,486 31,711
Accounting fee (Note 2) 80,721 62,478 33,016
Directors' fees 152,800 22,553 36,138
Registration fees 518,500 37,193 66,206
Legal fees 31,265 6,173 4,878
Printing & postage fees 80,290 16,044 24,392
Other expenses 124,940 40,705 13,578
----------- ----------- -----------
Total expenses 10,804,792 1,992,444 2,115,210
Less: Fees waived (Note 2) (65,144) -- --
----------- ----------- -----------
Net expenses 10,739,648 1,992,444 2,115,210
----------- ----------- -----------
Net investment income 76,314,457 16,188,475 11,191,721
----------- ----------- -----------
Net realized gain/(loss) from security
transactions -- 47,222 (906)
----------- ----------- -----------
Net increase in net assets resulting
from operations $76,314,457 $16,235,697 $11,190,815
=========== =========== ===========
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
PRIME SERIES
- ------------------------------------------------------------------------------------
For the Six For the
Months Ended Year Ended
September 30, March 31,
------------- ----------
1997(1) 1997
<S><C>
INCREASE/(DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 76,314,457 $ 132,679,566
Net realized gain/(loss) on sales of
investments -- 13,047
-------------- --------------
Net increase in net assets resulting
from operations 76,314,457 132,692,613
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
BT Alex. Brown Cash Reserve Prime, Treasury
and Tax-Free Shares, respectively (65,730,315) (119,826,842)
BT Alex. Brown Cash Reserve
Institutional Shares (5,694,643) (4,256,297)
Flag Investors Class A Shares (168,552) (295,562)
Flag Investors Class B Shares (6,546) (1,260)
Quality Cash Reserve Prime Shares (4,714,401) (8,299,605)
-------------- --------------
Total distributions (76,314,457) (132,679,566)
CAPITAL SHARE TRANSACTIONS, NET - (NOTE 3) 565,564,126 264,670,792
-------------- --------------
Total increase/(decrease) in net assets 565,564,126 264,683,839
NET ASSETS:
Beginning of period 2,867,463,614 2,602,779,775
-------------- --------------
End of period $3,433,027,740 $2,867,463,614
============== ==============
</TABLE>
- -------
(1) Unaudited.
28
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
TREASURY SERIES TAX-FREE SERIES
- ---------------------------------------------------------------------------------------------------------------------------------
For the Six For the For the Six For the
Months Ended Year Ended Months Ended Year Ended
September 30, March 31, September 30, March 31,
------------- ---------- ------------- ----------
1997(1) 1997 1997(1) 1997
<S><C>
INCREASE/(DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 16,188,475 $ 33,069,786 $ 11,191,721 $ 16,906,007
Net realized gain/(loss) on sales of
investments 47,222 1,180 (906) 15,016
------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations 16,235,697 33,070,966 11,190,815 16,921,023
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
BT Alex. Brown Cash Reserve Prime, Treasury
and Tax-Free Shares, respectively (14,496,429) (30,533,284) (10,547,076) (16,906,007)
BT Alex. Brown Cash Reserve
Institutional Shares (1,692,046) (2,536,502) (644,645) --
Flag Investors Class A Shares -- -- -- --
Flag Investors Class B Shares -- -- -- --
Quality Cash Reserve Prime Shares -- -- -- --
------------ ------------ ------------ ------------
Total distributions (16,188,475) (33,069,786) (11,191,721) (16,906,007)
CAPITAL SHARE TRANSACTIONS, NET - (NOTE 3) (38,785,307) 21,015,478 127,105,524 75,690,009
------------ ------------ ------------ ------------
Total increase/(decrease) in net assets (38,738,085) 21,016,658 127,104,618 75,705,025
NET ASSETS:
Beginning of period 739,653,573 718,636,915 647,212,025 571,507,000
------------ ------------ ------------ ------------
End of period $700,915,488 $739,653,573 $774,316,643 $647,212,025
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
29
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
BT ALEX. BROWN CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended
September 30,
-------------
1997(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00
------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0246
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0246)
------------------
Net asset value at end of period $ 1.00
==================
TOTAL RETURN:
Based on net asset value per share 4.95%(2)
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.67%(2)
Net investment income 4.91%(2)
SUPPLEMENTAL DATA:
Net assets at end of period $2,938,450,337
Number of shares outstanding at end of period 2,938,441,857
</TABLE>
- ----------
(1) Unaudited.
(2) Annualized.
30
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
BT ALEX. BROWN CASH RESERVE PRIME SHARES (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year ended March 31,
- -----------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------- ---------------- ---------------- ---------------- ---------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0478 0.0524 0.0442 0.0262 0.0295
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0478) (0.0524) (0.0442) (0.0262) (0.0295)
---------------- ---------------- ---------------- ---------------- ---------------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
================ ================ ================ ================ ===============
TOTAL RETURN:
Based on net asset value per share 4.88% 5.36% 4.51% 2.65% 2.99%
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.62% 0.60% 0.61% 0.62% 0.63%
Net investment income 4.77% 5.21% 4.46% 2.62% 2.95%
SUPPLEMENTAL DATA:
Net assets at end of period $2,545,532,365 $2,386,681,216 $1,472,079,739 $1,350,334,979 $1,470,711,552
Number of shares outstanding at end of period 2,545,523,885 2,386,684,392 1,472,077,488 1,350,332,916 1,470,709,489
</TABLE>
See Notes to Financial Statements.
31
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
FLAG INVESTORS CASH RESERVE PRIME SHARES--CLASS A
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended
September 30,
-------------
1997(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00
------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0246
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0246)
------------
Net asset value at end of period $ 1.00
============
TOTAL RETURN:
Based on net asset value per share 4.95%(2)
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.67%(2)
Net investment income 4.90%(2)
SUPPLEMENTAL DATA:
Net assets at end of period $6,920,887
Number of shares outstanding at end of period 6,920,623
</TABLE>
- ----------
(1) Unaudited.
(2) Annualized.
32
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FLAG INVESTORS CASH RESERVE PRIME SHARES--CLASS A (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended March 31,
---------------------------------------------------------------------------------
1997 1996 1995 1994 1993
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------- -------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0478 0.0524 0.0442 0.0262 0.0295
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0478) (0.0524) (0.0442) (0.0262) (0.0295)
------------ ------------ ------------ ------------- -------------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ ============ ============= =============
TOTAL RETURN:
Based on net asset value per share 4.88% 5.36% 4.51% 2.65% 2.99%
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.63% 0.60% 0.61% 0.62% 0.63%
Net investment income 4.78% 5.25% 4.26% 2.62% 2.95%
SUPPLEMENTAL DATA:
Net assets at end of period $6,521,574 $5,976,831 $7,726,696 $18,116,648 $10,392,282
Number of shares outstanding at end of period 6,521,310 5,976,824 7,726,698 18,116,633 10,392,267
</TABLE>
See Notes to Financial Statements.
33
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
FLAG INVESTORS CASH RESERVE PRIME SHARES--CLASS B
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended
September 30,
- --------------------------------------------------------------------------------
1997(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00
-----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0208
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0208)
-----------
Net asset value at end of period $ 1.00
===========
TOTAL RETURN:
Based on net asset value per share 4.19%(3)
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 1.42%(3)
Net investment income 4.17%(3)
SUPPLEMENTAL DATA:
Net assets at end of period $380,804
Number of shares outstanding at end of period 380,804
</TABLE>
- ----------
(1) Unaudited.
(2) Commencement of operations.
(3) Annualized.
34
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
FLAG INVESTORS CASH RESERVE PRIME SHARES--CLASS B (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
For the Year April 3, 1995(2)
Ended through
March 31, March 31,
- --------------------------------------------------------------------------------
1997 1996
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00 $ 1.00
---------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0414 0.0361
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0414) (0.0361)
---------- ---------
Net asset value at end of period $ 1.00 $ 1.00
========== =========
TOTAL RETURN:
Based on net asset value per share 4.22% 3.69%(3)
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 1.42% 1.38%(3)
Net investment income 4.10% 4.30%(3)
SUPPLEMENTAL DATA:
Net assets at end of period $227,098 $ 10,200
Number of shares outstanding at end of period 227,098 10,200
</TABLE>
See Notes to Financial Statements.
35
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
BT ALEX. BROWN CASH RESERVE PRIME INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended
September 30,
- --------------------------------------------------------------------------------
1997(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00
--------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0258
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0258)
--------------
Net asset value at end of period $ 1.00
==============
TOTAL RETURN:
Based on net asset value per share 5.21%(2)
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.42%(2)
Net investment income 5.20%(2)
SUPPLEMENTAL DATA:
Net assets at end of period $273,187,869
Number of shares outstanding at end of period 273,187,590
</TABLE>
- ----------
(1) Unaudited.
(2) Annualized.
36
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
BT ALEX. BROWN CASH RESERVE PRIME INSTITUTIONAL SHARES (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended March 31,
- -----------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ------------- ------------- ------------- -------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0503 0.0548 0.0472 0.0294 0.0327
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0503) (0.0548) (0.0472) (0.0294) (0.0327)
------------- ------------- ------------- ------------- -------------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= ============= =============
TOTAL RETURN:
Based on net asset value per share 5.15% 5.62% 4.82% 2.98% 3.32%
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.38% 0.35% 0.36% 0.30% 0.31%
Net investment income 5.04% 5.32% 4.57% 2.94% 3.24%
SUPPLEMENTAL DATA:
Net assets at end of period $117,812,047 $53,699,315 $11,904,716 $23,437,449 $28,884,078
Number of shares outstanding at end of period 117,811,768 53,699,535 11,904,663 23,437,512 28,884,132
</TABLE>
See Notes to Financial Statements.
37
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
QUALITY CASH RESERVE PRIME SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended
September 30,
- --------------------------------------------------------------------------
1997(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00
--------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0231
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0231)
--------------
Net asset value at end of period $ 1.00
==============
TOTAL RETURN:
Based on net asset value per share 4.66%(2)
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.96%(2,3)
Net investment income 4.62%(2,4)
SUPPLEMENTAL DATA:
Net assets at end of period $214,087,843
Number of shares outstanding at end of period 214,087,161
</TABLE>
- ----------
(1) Unaudited.
(2) Annualized.
(3) Ratio of expenses to average daily net assets prior to partial fee waivers
assumed was 1.02%, 0.98% and 0.95% for the six months ended September 30,
1997 and the years ended March 31, 1997 and 1996, respectively.
(4) Ratio of net investment income to average daily net assets prior to partial
fee waivers was 4.56%, 4.43% and 4.86% for the six months ended September
30, 1997 and the years ended March 31, 1997 and 1996, respectively.
38
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
QUALITY CASH RESERVE PRIME SHARES (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended March 31,
- ---------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- -------------- ------------- ------------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0449 0.0493 0.0402 0.0218 0.0253
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0449) (0.0493) (0.0402) (0.0218) (0.0253)
-------------- -------------- ------------- ------------- --------------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============= ============= ==============
TOTAL RETURN:
Based on net asset value per share 4.59% 5.04% 4.09% 2.20% 2.53%
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.91%(3) 0.90%(3) 0.96% 1.06% 1.04%
Net investment income 4.50%(4) 4.91%(4) 4.04% 2.18% 2.53%
SUPPLEMENTAL DATA:
Net assets at end of period $197,370,530 $156,412,213 $94,592,158 $92,678,440 $101,321,868
Number of shares outstanding at end of period 197,369,848 156,412,393 94,591,979 92,678,268 101,321,668
</TABLE>
See Notes to Financial Statements.
39
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
BT ALEX. BROWN CASH RESERVE TREASURY SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended
September 30,
- --------------------------------------------------------------------------------
1997(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00
--------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0225
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0225)
--------------
Net asset value at end of period $ 1.00
==============
TOTAL RETURN:
Based on net asset value per share 4.54%(2)
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.60%(2)
Net investment income 4.64%(2)
SUPPLEMENTAL DATA:
Net assets at end of period $634,225,149
Number of shares outstanding at end of period 634,129,293
</TABLE>
- ----------
(1) Unaudited.
(2) Annualized.
(3) Ratio of expenses to average daily net assets prior to partial fee waivers
was 0.56% for each of the years ended March 31, 1995, 1994 and 1993,
respectively.
(4) Ratio of net investment income to average daily net assets prior to partial
fee waivers was 4.08%, 2.53% and 2.86% for the years ended March 31, 1995,
1994 and 1993, respectively.
40
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
BT ALEX. BROWN CASH RESERVE TREASURY SHARES (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended March 31,
- --------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- -------------- -------------- -------------- -------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0453 0.0494 0.0411 0.0255 0.0285
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0453) (0.0494) (0.0411) (0.0255) (0.0285)
-------------- -------------- -------------- -------------- -------------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============== ============== =============
TOTAL RETURN:
Based on net asset value per share 4.63% 5.05% 4.19% 2.58% 2.89%
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.61% 0.58% 0.55%(3) 0.54%(3) 0.55%(3)
Net investment income 4.54% 4.94% 4.09%(4) 2.55%(4) 2.87%(4)
SUPPLEMENTAL DATA:
Net assets at end of period $678,444,803 $666,814,158 $512,167,212 $581,724,214 $618,175,839
Number of shares outstanding at end of period 678,391,386 666,762,028 512,162,864 581,723,448 618,152,465
</TABLE>
See Notes to Financial Statements.
41
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
BT ALEX. BROWN CASH RESERVE TREASURY INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended
September 30,
- --------------------------------------------------------------------------------
1997(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00
-------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0245
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0245)
-------------
Net asset value at end of period $ 1.00
=============
TOTAL RETURN:
Based on net asset value per share 4.94%(2)
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.35%(2)
Net investment income 4.88%(2)
SUPPLEMENTAL DATA:
Net assets at end of period $66,690,339
Number of shares outstanding at end of period 66,676,132
</TABLE>
- ----------
(1) Unaudited.
(2) Annualized.
(3) Ratio of expenses to average daily net assets prior to partial fee waivers
was 0.31%, 0.29% and 0.27% for the years ended March 31, 1995, 1994 and
1993, respectively.
(4) Ratio of net investment income to average daily net assets prior to partial
fee waivers was 4.14%, 2.80% and 3.15% for the years ended March 31, 1995,
1994 and 1993, respectively.
42
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
BT ALEX. BROWN CASH RESERVE TREASURY INSTITUTIONAL SHARES (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended March 31,
- ----------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ------------- ------------- ------------- -------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0481 0.0523 0.0438 0.0282 0.0314
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0481) (0.0523) (0.0438) (0.0282) (0.0314)
------------- ------------- ------------- ------------- -------------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= ============= =============
TOTAL RETURN:
Based on net asset value per share 4.92% 5.36% 4.47% 2.86% 3.19%
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.33% 0.33% 0.30%(3) 0.27%(3) 0.26%(3)
Net investment income 4.81% 5.12% 4.15%(4) 2.82%(4) 3.16%(4)
SUPPLEMENTAL DATA:
Net assets at end of period $61,208,770 $51,822,757 $14,051,995 $39,692,848 $60,146,987
Number of shares outstanding at end of period 61,199,345 51,823,226 14,046,467 39,688,259 60,140,874
</TABLE>
See Notes to Financial Statements.
43
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
BT ALEX. BROWN CASH RESERVE TAX-FREE SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended
September 30,
- --------------------------------------------------------------------------------
1997(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00
--------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0156
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0156)
--------------
Net asset value at end of period $ 1.00
==============
TOTAL RETURN:
Based on net asset value per share 3.36%(2)
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.60%(2)
Net investment income 3.10%(2)
SUPPLEMENTAL DATA:
Net assets at end of period $702,661,433
Number of shares outstanding at end of period 702,733,598
</TABLE>
- ----------
(1) Unaudited.
(2) Annualized.
44
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
BT ALEX. BROWN CASH RESERVE TAX-FREE SHARES (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended March 31,
- -----------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- -------------- -------------- -------------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0286 0.0318 0.0271 0.0184 0.0213
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0286) (0.0318) (0.0271) (0.0184) (0.0213)
-------------- -------------- -------------- -------------- --------------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============== ============== ==============
TOTAL RETURN:
Based on net asset value per share 2.90% 3.23% 2.75% 1.86% 2.15%
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.62% 0.60% 0.57% 0.58% 0.60%
Net investment income 2.86% 3.16% 2.74% 1.84% 2.13%
SUPPLEMENTAL DATA:
Net assets at end of period $647,212,025 $571,507,000 $475,384,229 $378,859,232 $315,661,447
Number of shares outstanding at end of period 647,283,274 571,593,265 475,474,913 378,939,262 315,700,742
</TABLE>
See Notes to Financial Statements.
45
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
BT ALEX. BROWN CASH RESERVE TAX-FREE INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
June 2, 1997(1)
through
September 30,
- --------------------------------------------------------------------------------
1997(2)
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $ 1.00
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.0110
LESS DISTRIBUTIONS:
Dividends from net investment income (0.0110)
-------
Net asset value at end of period $ 1.00
=======
TOTAL RETURN:
Based on net asset value per share 3.38%(3)
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 0.35%(3)
Net investment income 3.36%(3)
SUPPLEMENTAL DATA:
Net assets at end of period $71,655,210
Number of shares outstanding at end of period 71,655,199
</TABLE>
- ----------
(1) Commencement of operations.
(2) Unaudited.
(3) Annualized.
See Notes to Financial Statements.
46
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
BT Alex. Brown Cash Reserve Fund, Inc. (the "Fund"), formerly Alex. Brown
Cash Reserve Fund, Inc., commenced operations August 11, 1981. The Fund is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end Investment Management Company. Its objective is to seek as
high a level of current income as is consistent with preservation of capital and
liquidity.
The Fund consists of three portfolios: the Prime Series, the Treasury
Series and the Tax-Free Series. The Prime Series consists of five classes: BT
Alex. Brown Cash Reserve Prime Shares ("Prime Shares"), Flag Investors Cash
Reserve Prime Shares Class A ("Flag Investors Class A Shares"), Flag Investors
Cash Reserve Prime Shares Class B ("Flag Investors Class B Shares"), Quality
Cash Reserve Prime Shares ("Quality Cash Shares") and BT Alex. Brown Cash
Reserve Prime Institutional Shares ("Prime Institutional Shares"). The Treasury
Series consists of two classes: BT Alex. Brown Cash Reserve Treasury Shares
("Treasury Shares") and BT Alex. Brown Cash Reserve Treasury Institutional
Shares ("Treasury Institutional Shares"). The Tax-Free Series consists of two
classes: BT Alex. Brown Cash Reserve Tax-Free Shares ("Tax-Free Shares") and BT
Alex. Brown Tax-Free Institutional Shares ("Tax-Free Institutional Shares").
Shareholders can vote only on issues that affect the share classes they own.
When preparing the Fund's financial statements, management makes estimates
and assumptions to comply with generally accepted accounting principles. These
estimates affect 1) the assets and liabilities that we report at the date of the
financial statements; 2) the contingent assets and liabilities that we disclose
at the date of the financial statements; and 3) the revenues and expenses that
we report for the period. Our estimates could be different from the actual
results. The Fund's significant accounting policies are:
A. SECURITY VALUATION--Each portfolio has a weighted average maturity of 90
days or less. The Fund values portfolio securities on the basis of
amortized cost, which approximates market value. Using this method, the
Fund values a security at its cost when it is purchased. The Fund then
assumes a constant amortization to maturity of any discount or premium.
B. REPURCHASE AGREEMENTS--The Prime Series may enter into tri-party
repurchase agreements with broker-dealers and domestic banks. A
repurchase agreement is a short-term investment in which the Fund buys a
debt security that the broker agrees to repurchase at a set time and
price. The third party, which is the broker's custodial bank, holds the
collateral in a separate account until the repurchase agreement matures.
The agreement ensures that the collateral's market value, including any
accrued interest, is sufficient if the broker defaults. The Fund's
access to the collateral may be delayed or limited if the broker
defaults and the value of the collateral declines or if the broker
enters into an insolvency proceeding.
C. FEDERAL INCOME TAXES--The Fund determines its distributions according to
income tax regulations, which may be different from generally accepted
47
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1--CONCLUDED
accounting principles. As a result, the Fund occasionally makes
reclassifications within its capital accounts to reflect income and
gains that are available for distribution under income tax regulations.
The Fund is organized as a regulated investment company. As long as
it maintains this status and distributes to its shareholders
substantially all of its taxable net investment income and net realized
capital gains, it will be exempt from most, if not all, federal income
and excise taxes. As a result, the Fund has made no provisions for
federal income taxes. Each portfolio is treated as a separate entity for
federal income tax purposes.
The Tax-Free Series and Prime Series each have a capital loss
carryforward of $72,632 and $1,520, respectively, that may be carried
forward to offset any capital gains. These capital loss carryforwards
begin to expire in the years 2000 and 2005, respectively, if not used.
D. SECURITY TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS--The Fund
uses the trade date to account for security transactions and the
specific identification method for financial reporting and income tax
purposes to determine the cost of investments sold or redeemed. Interest
income is recorded on an accrual basis and includes the pro rata
scientific method for amortization of premiums and accretion of
discounts when appropriate. Dividends to shareholders are declared
daily. Dividend distributions or reinvestments are made monthly.
E. EXPENSES--Operating expenses for each share class are charged to that
class' operations. If a Fund expense cannot be directly attributed to a
share class, the expense is prorated among the classes that the expense
affects and is based on the classes' relative net assets.
NOTE 2--INVESTMENT ADVISORY FEES, TRANSACTIONS WITH AFFILIATES AND OTHER FEES
Investment Company Capital Corp. ("ICC"), an indirect subsidiary of Bankers
Trust New York Corporation, is the investment advisor for all series. Under the
terms of the investment advisory agreement, the Fund pays ICC an annual fee
based on the Fund's aggregate average daily net assets. This fee is calculated
daily and paid monthly at the following annual rates: 0.30% of the first $500
million, 0.26% of the next $500 million, 0.25% of the next $500 million, 0.24%
of the next $1 billion, 0.23% of the next $1 billion and 0.22% of the amount
over $3.5 billion. The Prime Series pays an additional fee that is calculated
daily and paid monthly at the annual rate of 0.02% of its average daily net
assets. The Tax-Free Series also pays an additional fee that is calculated daily
and paid monthly at the annual rate of 0.03% of its average daily net assets.
Prior to August 23, 1995, the Fund paid ICC a different annual fee based on the
Fund's aggregate average daily net assets. This fee was calculated daily and
paid monthly at the following annual rates: 0.25% of the first $500 million,
0.21% of the next $500 million, 0.20% of the next $500 million and 0.19% of the
amount over $1.5 billion.
48
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--CONTINUED
PNC Institutional Management Corporation ("PIMC") is the sub-advisor for
the Tax-Free Series. As compensation for its subadvisory services, ICC pays PIMC
an annual fee based on the Tax-Free Series' aggregate average daily net assets.
This fee is calculated daily and paid monthly, at the following annual rates:
0.15% of the first $250 million, 0.13% of the next $250 million, 0.11% of the
next $250 million, 0.09% of the next $250 million, 0.075% of the next $3 billion
and 0.06% of the amount over $4 billion. For the six months ended September 30,
1997, ICC paid PIMC $468,992 for sub-advisory services for the Tax-Free Series.
As compensation for its accounting services, the Prime Series and Treasury
Series pay ICC an annual fee that is calculated daily and paid monthly from the
two series' average daily net assets. The Prime Series paid $80,721 and the
Treasury Series paid $62,478 to ICC for accounting services for the six months
ended September 30, 1997.
As compensation for its accounting services, the Tax-Free Series pays PFPC
Inc. ("PFPC"), an affiliate of PIMC, an annual fee that is calculated daily and
paid monthly from its average daily net assets. The Tax-Free Series paid $33,016
to PFPC for accounting services for the six months ended September 30, 1997.
As compensation for its transfer agent services, the three series pay ICC a
per account fee that is calculated and paid monthly. The Prime Series paid
$1,568,681, the Treasury Series paid $137,872 and the Tax-Free Series paid
$73,177 to ICC for transfer agent services for the six months ended September
30, 1997.
As compensation for providing distribution services, the Prime Shares, Flag
Investors Class A Shares, Treasury Shares and Tax-Free Shares pay ICC
Distributors, Inc. ("ICC Distributors") an annual fee equal to 0.25% of these
classes' average daily net assets. The Prime Shares, Flag Investors Class A
Shares, Treasury Shares and Tax-Free Shares paid $3,348,079, $8,593, $780,951
and $850,459 for distribution services, respectively, for the six months ended
September 30, 1997. The Quality Cash Shares and Flag Investors Class B Shares
also pay ICC Distributors an annual fee for distribution services. This fee is
equal to 0.60% of the Quality Cash Shares' aggregate average daily net assets or
$611,936 and 1.00% of the Flag Investors Class B Shares' aggregate average daily
net assets or $1,570 for the six months ended September 30, 1997. Prior to
September 1, 1997, Alex. Brown & Sons Incorporated ("Alex. Brown") served as
these classes' distributor for the same compensation and on substantially the
same terms and conditions as ICC Distributors.
ICC and ICC Distributors may voluntarily waive or reimburse a portion of
their advisory or distribution fees for the Prime, Treasury and Tax-Free
Series to preserve or enhance each series' performance. If ICC decides to
waive part of its fee, PIMC will waive the same proportion of its fee for the
same time periods. These voluntary waivers and reimbursements are not
contractual and could change. Any reimbursements by ICC, ICC Distributors or
PIMC are limited to the fees they actually received for the fiscal year. ICC
and PIMC did not waive any advisory fees for the six months ended September
30, 1997. Alex. Brown and ICC Distributors voluntarily waived distribution fees
of $65,144 for the Quality Cash Shares for the six months ended September 30,
1997.
49
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--CONCLUDED
The Fund's complex offers a retirement plan for eligible Directors. The
actuarially computed pension expense allocated to the Fund for the period April
1, 1997 to September 30, 1997 was $52,521 for the Prime Series, $16,503 for the
Treasury Series and $12,723 for the Tax-Free Series. The accrued liability on
September 30, 1997 was $200,329 for the Prime Series, $73,343 for the Treasury
Series and $70,395 for the Tax-Free Series.
NOTE 3--CAPITAL STOCK AND SHARE INFORMATION
The Fund is authorized to issue up to 8 billion shares of $.001 par value
capital stock (4.9 billion Prime Series, 1.5 billion Treasury Series, 1.25
billion Tax-Free Series and 350 million undesignated). Transactions in shares of
the Fund were as follows:
<TABLE>
<CAPTION>
September 30, 1997(1) March 31, 1997
--------------------- --------------
<S><C>
PRIME SERIES:
SOLD:
Prime Shares 11,369,880,500 22,263,288,298
Flag Investors Class A Shares 3,206,149 9,331,912
Flag Investors Class B Shares 201,502 328,144
Prime Institutional Shares 2,406,523,910 912,825,877
Quality Cash Shares 568,353,311 1,001,597,821
ISSUED AS REINVESTMENT OF DIVIDENDS:
Prime Shares 61,059,227 113,931,978
Flag Investors Class A Shares 161,160 281,420
Flag Investors Class B Shares 5,497 1,264
Prime Institutional Shares 4,043,078 3,084,567
Quality Cash Shares 4,546,262 8,045,624
REDEEMED:
Prime Shares (11,038,021,755) (22,218,380,783)
Flag Investors Class A Shares (2,967,996) (9,068,618)
Flag Investors Class B Shares (53,293) (112,510)
Prime Institutional Shares (2,255,191,166) (851,798,212)
Quality Cash Shares (556,182,260) (968,685,990)
--------------- ---------------
Net increase 565,564,126 264,670,792
=============== ===============
TREASURY SERIES:
SOLD:
Treasury Shares 1,572,249,194 4,075,840,415
Treasury Institutional Shares 255,563,421 458,391,680
ISSUED AS REINVESTMENT OF DIVIDENDS:
Treasury Shares 13,865,596 29,377,891
Treasury Institutional Shares 1,049,363 1,597,049
REDEEMED:
Treasury Shares (1,630,376,883) (4,093,588,948)
Treasury Institutional Shares (251,135,998) (450,602,609)
--------------- ---------------
Net increase/(decrease) (38,785,307) 21,015,478
=============== ===============
</TABLE>
- ---------
(1) Unaudited.
50
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
NOTE 3--CONCLUDED
<TABLE>
<CAPTION>
September 30, 1997(1) March 31, 1997
--------------------- --------------
<S><C>
TAX-FREE SERIES:
SOLD:
Tax-Free Shares 3,095,805,785 5,222,168,283
Tax-Free Institutional Shares 111,749,850 --
ISSUED AS REINVESTMENT OF DIVIDENDS:
Tax-Free Shares 9,990,055 16,162,636
Tax-Free Institutional Shares -- --
REDEEMED:
Tax-Free Shares (3,050,345,516) (5,162,640,910)
Tax-Free Institutional Shares (40,094,651) --
-------------- --------------
Net increase 127,105,523 75,690,009
============== ==============
</TABLE>
- -------
(1) Unaudited.
NOTE 4--NET ASSETS
On September 30, 1997, net assets consisted of:
<TABLE>
<CAPTION>
Prime Treasury Tax-Free
Series Series Series
-------------- ------------ ------------
<S><C>
PAID-IN CAPITAL $3,433,020,772 $700,801,236 $774,388,797
Undistributed net realized gain/(loss) on
sales of investments 6,968 114,252 (72,154)
-------------- ------------ ------------
$3,433,027,740 $700,915,488 $774,316,643
============== ============ ============
</TABLE>
NOTE 5--SHAREHOLDER MEETING
Alex. Brown Incorporated, which was the parent corporation of the Fund's
investment advisor, merged into a subsidiary of Bankers Trust New York
Corporation on September 1, 1997. Due to the change in control of Alex. Brown
Incorporated, the Fund held a special meeting for its shareholders on August
14, 1997. During the meeting, shareholders of each series approved new
Investment Advisory Agreements between the Fund and ICC with respect to the
Prime Series, Treasury Series and Tax-Free Series. Shareholders of the
Tax-Free Series also approved a new Sub-Advisory Agreement between ICC and PIMC
with respect to the Tax-Free Series. These new agreements are
substantially the same as the former agreements. In addition, the Fund's
shareholders elected the following Directors: James J. Cunnane, Richard T.
Hale, John F. Kroeger, Louis E. Levy, Eugene J. McDonald, Rebecca W. Rimel,
Truman T. Semans and Carl W. Vogt.
51
<PAGE>
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
RICHARD T. HALE EUGENE J. McDONALD
Chairman Director
JAMES J. CUNNANE REBECCA W. RIMEL
Director Director
JOHN F. KROEGER TRUMAN T. SEMANS
Director Director
LOUIS E. LEVY CARL W. VOGT, Esq.
Director Director
OFFICERS
- --------------------------------------------------------------------------------
HARRY WOOLF AMY M. OLMERT
President Secretary
JOSEPH A. FINELLI LAURIE D. COLLIDGE
Treasurer Assistant Secretary
- --------------------------------------------------------------------------------
Distributor Custodian
ICC DISTRIBUTORS, INC. BANKERS TRUST COMPANY
P.O. Box 7558 130 Liberty Street
Portland, ME 04101 New York, NY 10006
(207) 879-6200
Transfer Agent
Investment Advisor INVESTMENT COMPANY CAPITAL CORP.
INVESTMENT COMPANY CAPITAL CORP. One South Street
One South Street Baltimore, MD 21202
Baltimore, MD 21202 (800) 553-8080
Sub-Advisor Auditors
(Tax-Free Series) COOPERS & LYBRAND L.L.P.
PNC INSTITUTIONAL 2400 Eleven Penn Center
MANAGEMENT CORPORATION Philadelphia, PA 19103
103 BELLEVUE PARKWAY
Wilmington, DE 19809
- --------------------------------------------------------------------------------
This report is prepared for the general information of shareholders of BT Alex.
Brown Cash Reserve Fund, Inc. It may be distributed only to current shareholders
or to persons who have received a current prospectus.
52
<PAGE>
[Logo] BT ALEX. BROWN
BALTIMORE, MD 21202
One South Street
(410) 727-1700
================================================================================
ANNAPOLIS, MD 21403 NEW YORK, NY 10104
410 Severn Avenue, Suite 202 1290 Avenue of the Americas,
(410) 268-4040 10th Floor
(212) 237-2000
ATLANTA, GA 30305
One Piedmont Center, Suite 400 PHILADELPHIA, PA 19103
3565 Piedmont Road, N.E. 1635 Market Street, 17th Floor
(404) 261-1000 (215) 563-2300
BOSTON, MA 02110 RICHMOND, VA 23219
101 Federal Street, 15th Floor 100 Shockoe Slip
(617) 737-8181 (804) 644-8000
CHICAGO, IL 60606 SAN FRANCISCO, CA 94111
The USG Building, Suite 1900 101 California Street, 46th Floor
222 West Adams Street (415) 544-2800
(312) 424-6000
TOKYO 105, JAPAN
DALLAS, TX 75201 Shiroyama Jt. Mori Building
200 Crescent Court, Suite 500 12F, 4-3-1 Toranomon,
(214) 740-7700 Minato-Ku, Tokyo 105
011-81-3-5401-2270
FISHKILL, NY 12524
300 Westage Bus. Ctr., Suite 310 TOWSON, MD 21204
(914) 897-4900 210 W. Pennsylvania Ave., Ste. 260
(410) 825-8600
GENEVA, SWITZERLAND (1204)
7, Rue du Rhone, 1st Floor WASHINGTON, DC 20005
011-41-22-312-4000 500 The Washington Building
1440 New York Ave., N.W.
GREENWICH, CT 06830 (202) 626-7000
One Pickwick Plaza
(203) 869-5555 WEST PALM BEACH, FL 33401
The Esperante Building
JACKSONVILLE, FL 32202 222 Lakeview Avenue, Suite 1200
200 West Forsyth Street, Suite 1520 (561) 832-4488
(904) 355-0643
WILMINGTON, DE 19801
LONDON, ENGLAND EC2N 2HE 1201 Market Street, Suite 1001
Austin Friars House (302) 656-8111
2-6 Austin Friars, 2nd Floor
011-44-171-786-7410 WINSTON-SALEM, NC 27101
200 West Second Street, Suite 500
LOS ANGELES, CA 90017 (910) 724-6921
601 South Figueroa St., Suite 3650
(213) 892-0500
- --------
Information may be obtained and shares may be purchased through any of the
offices listed above.
(c) BY BT ALEX. BROWN INCORPORATED
<PAGE>
BT ALEX. BROWN CASH RESERVE FUND, INC.
P.O. Box 1346
Baltimore, MD 21203
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| BULK RATE |
| U.S. Postage |
| PAID |
| Charlotte, NC|
|Permit No. 136|
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